Sitting of 17 October 2001

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

  CITY OF LONDON (WARD ELECTIONS) BILL
  Motion made,
  That the promoters of the City of London (Ward Elections) Bill which originated in this House in the last Parliament but had not received the Royal Assent may, notwithstanding anything in the Standing Orders or practice of this House, proceed with the bill in the present session of Parliament; and the petition for the bill shall be deemed to have been deposited and all Standing Orders applicable to it shall be deemed to have been complied with;
  That the bill shall be presented to the House by deposit in the Private Bill Office no later than the fifth day on which the House sits after this day;
  That a declaration signed by the agent shall be annexed to the bill, stating that it is the same in every respect as the bill presented in this House in the last Parliament;
  That on the next sitting day following presentation, the Clerk in the Private Bill Office shall lay the bill on the Table of the House;
  That in the present session of Parliament the bill shall be deemed to have passed through every stage through which it had passed in the last Parliament, and shall be recorded it the Journal of the House as having passed those stages;
  That no further fees shall be charged to such stages.—[The Second Deputy Chairman of Ways and Means.]
  Hon. Members: Object.

  SELECTION
  Ordered,
  That Mr. James Cran be discharged from the Committee of Selection and Mr. John Hayes be added to the Committee.—[Mr. Nick Ainger, on behalf of the Committee of Selection.]

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

  Rural Housing
  Mr. Elfyn Llwyd: What discussions he has had with the First Secretary on the provision of rural housing in Wales; and if he will make a statement. [4190]
  The Secretary of State for Wales (Mr. Paul Murphy): I have regular meetings with the First Secretary to discuss a range of issues, including the provision of housing. Rural housing has been and continues to be a high priority for the National Assembly. The Assembly aims to develop thriving rural communities, with everyone in Wales having the opportunity to live in good-quality, affordable housing and being able to choose where they live and to decide whether buying or renting is best for them and their families.
  Mr. Llwyd: I thank the right hon. Gentleman for that reply. He will know that there is a crisis in rural housing in Wales, and that the crisis has become something of a politicised subject. May I ask him, respectfully, to work with some of his noble Friends, with other Labour party members and with all the political parties in Wales to build a consensus, so that we can produce proper and lasting answers for the people of Wales? If we fail them, we all, as political parties, fail them.
  Mr. Murphy: I have no problem with what the hon. Gentleman has said. Our rural communities in Wales are represented by Plaid Cymru, the Labour party and the Liberal Democrat party, all of which I think, have in mind the same solutions for rural housing in Wales. The Assembly has also taken very vigorous action on the issue, providing £18 million for social housing in rural Wales. Additionally, Homebuy is a low-cost housing scheme, and local authorities in Wales are identifying affordable sites for local people. I therefore agree with the hon. Gentleman on the issue.

  NHS Waiting Times
  Mr. David Amess: What recent discussions he has had with the First Minister on NHS waiting times. [4192]
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend the Secretary of State and I regularly meet the First Minister to discuss the NHS in Wales. The subject of waiting times is of course often on the agenda.
  Mr. Amess: Now that we are in the fifth year of this appalling Government, is the Minister aware that the number of patients waiting for in-patient or day-case

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  treatment has increased from more than 6,000 to 9,385? It is a staggering increase. Who does the Secretary of State for Wales blame for that disgraceful increase?
  Mr. Touhig: The increase in the number of in-patient and day cases is 779, not the figure that the hon. Gentleman gave. Clearly, however, the Government are disappointed by the increase, and that disappointment is shared by my colleague the Assembly Secretary, Jane Hutt. Disappointment, however, is not enough: we must do something about it. The Government are doing something about it. We are putting extra funding into the national health service: £35 million extra this year to ease waiting times and emergency pressures, on top of the £40 million that was put in last year. Additionally, there is a further £3 million to increase bed capacity, and £12 million to help reduce orthopaedic waiting lists. All those public expenditure increases are opposed by Conservative Members.
  Ultimately, resources alone will not be enough; reform of the health service is also necessary. When the Government introduce measures shortly to reform the health service, I hope that the hon. Member for Southend, West (Mr. Amess) and other Conservative Members will support them.
  Mr. Jon Owen Jones: Now that the Government have given the country the opportunity, with devolution, to embark on different policies—both in the health service and in other services—in different parts of the country, what efforts are the Government and the Assembly making to compare and contrast the efficacy of the various policies on either side of the Severn and on either side of the border between Scotland and England?
  Mr. Touhig: A joint ministerial committee composed of Health Ministers from the United Kingdom Government and the devolved Administrations will meet on Monday. There is a continuous dialogue between the Government and the devolved Administrations to ensure that we have one objective in mind: improving health care and the health service across the United Kingdom. As a result of devolution, there are of course different roads on which we shall travel to achieve that objective. Our objective, however, is the same.
  Rev. Martin Smyth: Ulster Unionist Members welcome the concept of reform of the health service. Has the Minister discussed with his colleagues in Wales the possibility of using some of that extra money to purchase provision in Germany and France, where they seem to be able to provide the operations that we cannot?
  Mr. Touhig: I understand the point that the hon. Gentleman makes. Of course, decisions on patients being treated in other countries in the European Union are initially a matter for clinical referral. They then have to be supported by the health authority that has to provide the funding, and they also require the support of the Department of Health. Discussions are taking place between the Department of Health and the devolved Administration in Wales on that matter.
  Mr. Nigel Evans: The Prime Minister told public service workers yesterday that, despite the international situation, he would continue with his reforms
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  to improve public services. We all want to see such an improvement, but let us consider the facts. In 1997, some 101,000 Welsh residents were waiting for a first out-patient appointment, but on 31 August this year 203,000 were waiting. In 1997, some 28,000 people were waiting for more than three months, but on 31 August 135,000 were waiting. All the Minister can say is that he is "disappointed". Those are appalling figures. Will the Minister meet the Secretary of State for Health to discuss what action needs to be taken now to turn around those figures and improve on the 1997 levels?
  Mr. Touhig: I must congratulate the hon. Gentleman on reaching his Front Bench position. A boy from the valleys is on the Front Bench—if it is not the Welsh valleys, at least it is the Ribble Valley. We need to put in resources and to reform the health service. We recognise the difficulties and that we are not achieving the targets that we want to achieve. However, it would be helpful if the hon. Gentleman's party would support the Government when we introduce measures to increase health spending and reform the health service to achieve the goal that we all share—to improve the national health service in Wales and the rest of the United Kingdom. Before too long, he will have a chance to support from the Front Bench the Government's proposals for a health Bill for Wales. I hope that I can count on his backing.
  Mr. Evans: I thank the Minister for his initial remarks. The chilling statistics hide the personal pain of those on the waiting lists. Yesterday, we heard the story of an 88-year-old lady, Violet Lee, who was left for more than 30 hours on a Cardiff hospital trolley. The sick pensioner was among a number of patients forced to wait hours for treatment in the emergency unit of the University of Wales hospital. She also had to wait more than 29 hours for a hot meal. One Pontypool GP I spoke to yesterday, Dr. Greg Graham, said that the situation was getting worse and expressed his frustration. It is little wonder that there has been an 11 per cent. increase in complaints by patients in Wales and that a survey of GPs released today showed that one in four wants to quit the profession. An increasing number are also going private for acute care. I ask the Minister again to meet the Secretary of State for Health and report back to the House on what new measures he will take to halt the rot for the sake of patients in Wales.
  Mr. Touhig: I have every sympathy with the lady the hon. Gentleman mentions. No one should have to wait in the circumstances that he describes. However, as I said earlier, it is by putting in resources and reforms that we will make changes. I appreciate the comments from Dr. Greg Graham. I know him well and he is a strong advocate of improving the health service. However, I note also that the overwhelming majority of GPs questioned in the survey the hon. Gentleman mentioned believe that patient care has improved in the past five years. The Government have a good record on which to build and we are improving on that. As I said earlier, I hope that the hon. Gentleman will give us his support, when he gets the chance, in putting those resources and reforms in place to improve the health service.

  Assembly Funding
  Mr. Win Griffiths: When he last met the First Minister of the National Assembly to discuss the funding of its functions. [4193]
  The Secretary of State for Wales (Mr. Paul Murphy): I meet the First Minister regularly on a range of matters, including funding issues. I also recently met the Assembly's Finance Minister, Edwina Hart. Tomorrow, the Assembly will debate its annual Budget.
  Mr. Griffiths: I thank my right hon. Friend, his Under-Secretary and his staff at the Wales Office for the excellent relationships that have been developed with the Assembly and the way in which the Department acts as a bridge with the Assembly, as exemplified by the flexibility on the Barnett formula that enabled the extra funding for objective 1. Will my right hon. Friend consider more flexibility for other functions of the Assembly, because needs in Wales have been shown to be much higher than those in other parts of the United Kingdom?
  Mr. Murphy: I thank my hon. Friend for those remarks. On Monday, Edwina Hart, the Welsh Assembly Finance Minister, announced a further £17 million to support Welsh local authorities. Today, the Government are providing about £1.2 million for Wales, which results from extra money from the Department of Health in England. In recent months, extra money for Wales has included up to £2 million for rate relief grant, more than £2.5 million related to foot and mouth disease, and more than £2 million from the invest-to-save budget. We have also offered to clear outstanding housing debt when local authority stock transfers take place. Potentially, that is worth up to £300 million, and is in addition to the extra £100 million given last year for education and health, and for tackling crime, especially drug crime. All that comes on top of the spending review in 2000, and of the comprehensive spending review before that.
  Mr. Nigel Evans: Does the Secretary of State agree that the Assembly does not need a new building to carry out its functions and that it would be better if the money earmarked for that project went into public services, and especially the health service?
  Is the Secretary of State aware that the Richard Rogers Partnership, the architects of the Assembly building, has issued a statement today, which refutes a statement made by the Finance Minister on 16 January? She said:
  "I am pleased to report that since last June we have made excellent progress. We remain on course to deliver a high quality building, on time and within total budget provision."
  The Richard Rogers Partnership refutes that statement, and accuses the Finance Minister of refusing to meet to discuss the matter. We are talking about a lot of taxpayers' money. Will the Secretary of State therefore offer to meet the First Minister, to sort out the problem?
  Mr. Murphy: May I first congratulate the hon. Gentleman on his appointment to the shadow Cabinet? He knows that this is a matter for the Assembly itself to decide. It is time that all hon. Members understood that
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  devolution is here to stay, and that it is for the Assembly to decide whether to have a home of its own—just as we have our own home in the House of Commons.
  With regard to the Richard Rogers Partnership, I understand that the Finance Minister is to write to all members of the Assembly—including those in the Conservative party. However, the House must bear in mind what I told my hon. Friend the Member for Bridgend (Mr. Griffiths): extra money—hundreds of millions of pounds of it—has gone to the Assembly for precisely those public services about which the hon. Gentleman spoke earlier.

  Transport
  Mr. Martin Caton: What discussions he has had with the First Secretary of the National Assembly on transport in Wales. [4194]
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend regularly meets the First Secretary of the National Assembly to discuss wide-ranging current issues affecting Wales, including transport.
  Transport generally is a matter for the Assembly, although railways, air and ports remain, generally, the responsibility of the UK Government, working closely with the Assembly. I am keen to continue dialogue with the Assembly and Cabinet colleagues in order to determine how best we can meet the transport needs of Wales.
  Mr. Caton: I thank my hon. Friend for that reply. Does he agree that the people and economy of Wales were especially poorly served by Railtrack, until it was taken into administration 10 days ago? Will he undertake to work in partnership with the Assembly to press the new company when it is set up to invest in the rail infrastructure that we so badly need in Wales? In particular, will he emphasise the need to improve the track west of Cardiff, so that in the 21st century our inter-city trains move faster than Stevenson's Rocket on its first test run?
  Mr. Touhig: As a regular user of the rail network, I understand—and share—the frustration passengers have had to put up with over past years. The Government are committed to working in close partnership with the Assembly and other stakeholders to improve the railway system. That is why, to achieve that improvement, my right hon. Friend the Secretary of State for Transport, Local Government and the Regions has committed £30 billion to the network over the next 10 years.
  Mr. Roger Williams: Given the difficulty experienced by Railtrack, will the Minister say what discussions he is having with the Secretary of State for Transport, Local Government and the Regions about the progress on the single rail franchise for Wales, and especially about improvements to the service in rural areas, such as the heart of Wales line that is so important to my constituency of Brecon and Radnorshire?
  Mr. Touhig: Our colleagues in the Assembly attach considerable importance to developing the new Wales and borders rail franchise and the opportunities that will be

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  derived from that for improving the whole rail structure and support in Wales. I have met my right hon. Friend the Secretary of State for Wales and the Assembly's Minister for Environment, Sue Essex, to discuss the all-Wales franchise. We have also had a meeting with my right hon. Friend the Minister for Transport, and discussions are continuing. We hope to make progress.

  Education
  Dr. Hywel Francis: What recent discussions he has had with the First Minister of the National Assembly on education in Wales. [4195]
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend has met the First Minister on a number of occasions recently to discuss education in Wales.
  My right hon. Friend and I have also had meetings and discussions with the Minister for Education and Lifelong Learning in Wales to discuss the forthcoming Education Bill.
  Dr. Francis: I warmly welcome the National Assembly's discussion document, "The Learning Country". Does my hon. Friend agree that the foundations for such a learning country are being achieved by many schools in Wales, particularly Cymer Afan and Sandfields comprehensive schools in my constituency? Does he agree that our learning country will be achieved only if we base it on the principles of equity, lifelong learning and citizenship?
  Mr. Touhig: I congratulate Cymer Afan and Sandfields schools on their achievements. It shows what can be done with resources, commitment and the vision of good teachers. The opportunities for all our citizens afforded by a programme of lifelong learning is obvious to us all, and I believe that the publication of "The Learning Country", to which my hon. Friend referred, as well as that of the White Paper, "Schools Achieving Success" contributes to the continuing debate on improving the standards of education that we all want to see.
  Lembit Öpik: The Rees report on student finance, commissioned by the Welsh Assembly, clearly recommended the abolition of student tuition fees in the interests of widening access to higher education. Would the Minister be willing to promote the abolition of student tuition fees to the Department of Education and Skills in its review of student finance if called upon to do so by the Welsh Assembly?
  Mr. Touhig: Our core objective is to get more people into higher education. The review of student support was announced by my right hon. Friend the Secretary of State for Education and Skills on 4 October. The Government recognise that the fear of debt can act as a barrier to those wanting to go into higher education—that is why we are having a review.
  I am aware of the Rees report, which I think is very constructive. It contains 54 recommendations, which the Assembly is considering. The report does not recommend that students make no contribution to their higher education. However, I believe that that report and the
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  Assembly's response will undoubtedly form part of the consultation announced by my right hon. Friend on 4 October.

  Employment
  Alan Howarth: What his latest assessment is of levels of employment in south-east Wales. [4196]
  The Secretary of State for Wales (Mr. Paul Murphy): Employment in south-east Wales increased slightly to 69 per cent. in 2000. Some 3,800 new jobs have been announced in south-east Wales in the past 12 months through developments in retailing, electronics and communications sectors. However, that does not compensate for the heavy loss of jobs in the area due to the Corns closures. The Government are providing support to those affected in the form of a modernised ISERBS package. This is complemented by a range of Government employment initiatives and by the Assembly's training and regeneration packages.
  Alan Howarth: I thank my right hon. Friend for the energy that he has put into brokering the well co-ordinated response in south-east Wales to the crisis in the steel industry and the job losses following from it. Does he agree that the fortunes of Newport are crucial to the fortunes of south-east Wales and to employment prospects in particular? Will he do what he can to ensure that at the very earliest opportunity an urban regeneration company is established in Newport with broad scope and depth of resources?
  Mr. Murphy: I am grateful to my right hon. Friend for those comments. I entirely agree that an urban regeneration company for the Newport and south Gwent area would be an excellent idea. I understand that Newport county borough council is making proposals regarding the urban regeneration company, which the Assembly is considering in detail. I welcome the proposals, which will serve my constituents as well as those of my right hon. Friend.
  Adam Price: Do not the recent 800 job losses announced by United States-owned firms in Wales—Corning on Deeside, GEAES in Nant Garw and Dow Corning in Barry—confirm that the Government's core economic policies are destroying the Welsh manufacturing sector? As Secretary of State, what is the right hon. Gentleman doing? What proposals is he putting to his colleagues in Government to prevent further job losses in the Welsh manufacturing sector?
  Mr. Murphy: As I said in my previous answer and as the hon. Gentleman will be aware, we are deeply concerned about losses in the manufacturing sector in Wales, but I reject the claim that the Government are destroying manufacturing in Wales. He will know that only last week about 250 new jobs for Blaenau Gwent were announced by the First Minister. There have been 350 new jobs at Morrisons in Rogerston, 400 at Oakdale, 188 at SkyTronics in Cardiff and 264 in my constituency. On average, about 300 jobs a month are coming to Wales.

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  Of course, that does not make up for all the jobs that we have lost, but it is not in any way true to say that we are destroying manufacturing in Wales.
  Mr. John Smith: Given the increasing number of jobs in Wales that are dependent on the aviation industry, will my right hon. Friend assure me that when he next meets the Chancellor of the Exchequer he will press on him that any aid package for that industry includes the capacity to protect aviation jobs in Wales, especially in my constituency?
  Mr. Murphy: My hon. Friend will know that my right hon. Friend the Chancellor of the Exchequer is sitting next to me and listening. At the end of the day, it is the stability and strength of our economy in Wales that will protect our jobs. That will be the best sort of protection in terms of what has happened on the international scene in the past few weeks.

  Manufacturing Employment
  Mr. Graham Brady: If he will make a statement on manufacturing employment in Wales. [4197]
  The Secretary of State for Wales (Mr. Paul Murphy): Some 7,500 jobs have been announced in the manufacturing sector in Wales in the past 12 months. That is particularly welcome in the context of severe losses in the steel sector.
  Mr. Brady: I am amazed by the complacency of the Secretary of State's comments. In the past four years throughout the United Kingdom 8 per cent. of the nation's manufacturing jobs have been destroyed by the Government. In Wales, the picture is worse. Does the right hon. Gentleman accept that this Government's tax and regulatory policies have been one of the main reasons why those jobs have gone? What is he going to do now to lift that burden from business in Wales and start to reverse the decline?
  Mr. Murphy: I do not agree with the hon. Gentleman on the basis that he represents a party that saw the loss of 2 million manufacturing jobs during its period of office. Of course we have lost jobs in steel and elsewhere, but as I said earlier jobs are coming to our economy in Wales. Of course I am not complacent. I live in Wales and I represent a Welsh constituency.
  Chris Ruane: Is my right hon. Friend aware that in the seven years prior to 1997 under the previous Conservative Government only 100 jobs were created on the St. Asaph business park? In the four years since then, under a Labour Government, 1,100 jobs have been created on that £11.5 million project. Will my right hon. Friend join in congratulating the National Assembly for Wales, Denbighshire county council and the Welsh Development Agency on creating quality jobs in my constituency?
  Mr. Murphy: Not only do I congratulate my colleagues in the National Assembly, the WDA and the local authority, I congratulate my hon. Friend. He played a major role in the St. Asaph business park development.
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  At present, about 520 people are employed there—100 are in inward investment companies. So, that is a great new story for north Wales and for his constituency in particular.

  Health Service
  Julie Morgan: What recent discussions he has had with the First Secretary of the National Assembly on the health service in Wales. [4198]
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend and I regularly meet the National Assembly First Minister and the Minister for Health and Social Services to discuss the national health service in Wales.
  Julie Morgan: I thank my hon. Friend for that reply. He is aware of the plan to phase out health authorities in Wales by 2003 and to give additional powers to local health groups. Will he assure me that the legislation will be in place by 2003 to enable that to happen, so that the layer of bureaucracy can be removed and there can be a further reduction in the quango state and more money for patient care?
  Mr. Touhig: I know that my hon. Friend is a staunch advocate of the NHS. I can tell her that discussions are on-going about the proposed content of the Welsh health Bill. In addition, discussions are currently taking place between my officials, officials from the Department of Health and the Assembly on time-critical elements that we hope may be included in the NHS reform and decentralisation Bill. Unfortunately, I cannot tell my hon. Friend that the legislation will be on the statute book by the date that she says, because that is a matter for the House to determine when the Government announce their legislative programme, but I can tell her that we are working towards that end.

  The Prime Minister was asked—

  Engagements
  Q 1. [4220] David Winnick: If he will list his official engagements for Wednesday 17 October.
  The Prime Minister (Mr. Tony Blair): Before listing my engagements, may I express on behalf of Members on both sides of the House our deep sadness at the death of Jamie Cann? He was a conscientious Member of Parliament who always battled for his constituency, Ipswich. He will be sadly missed, and our thoughts are with his family at this time.
  This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today. Shortly before coming to the House, I spoke to President Bush.
  David Winnick: In recognising that the terror groups who have struck again are fanatically opposed to a

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  settlement in the middle east, should not the United States in particular do more to try to bring about a sovereign Palestinian state in the occupied territories? Would it not also be useful if countries such as our own told the Israelis that although they, like any other state, have a perfectly legitimate right to defend their country, as far as the occupied territories are concerned they cannot win against the Palestinians and, frankly, they do not deserve to win?
  The Prime Minister: I think that the first thing that we should say to Israel is to give our complete condemnation of the assassination of the Israeli Tourism Minister, to express our outrage at his assassination and to urge the Palestinian National Authority to take all measures necessary to apprehend those who are responsible.
  As for what my hon. Friend says about the peace process, I do actually believe that the United States of America has been making many efforts to establish a durable peace in the middle east, not least the Tenet plan and the Mitchell plan, which were conceived, and whose implementation was attempted, long before 11 September.
  I think that now, however, there is a renewed sense of urgency and a desire to see a durable lasting settlement there, so that Israelis and Palestinians can live side by side in peace. We shall certainly do all that we can to assist that process and move it forward. What we always know about such situations is that unless we do try to put in place a proper process where people negotiate the way forward, the extremists who are opposed to any form of peace settlement move in with their bloodshed, and we need to defeat the extremists and achieve a lasting and durable peace.
  Mr. Iain Duncan Smith: I associate myself with the Prime Minister's comments and warm thoughts about Jamie Cann. Those of us on this side of the House who knew him will have memories of a good colleague and friend, and our thoughts also go to his family.
  I also associate myself with the Prime Minister's comments on the brutal assassination today of the Israeli Cabinet Minister. Those who may not even have thought about this should know that, as the Prime Minister pointed out, those responsible are determined to break the peace process and ensure that it cannot go ahead; it is not the other way round. Certainly, we, like him, will be very concerned about the way that others react to them.
  Some argued, over a week ago, when we were talking about the military action, and some appear to be arguing now, a week later, for a pause in the bombing. I fully understand that bin Laden's propaganda, and pictures in the media of bombs going astray will worry some, but does the Prime Minister agree that it is essential that, having started this action, we see it through, and that to stop now would send out a terrible message to bin Laden, the Taliban and any other rogue state bent on terrorism that they will be allowed to get away with atrocities in future because we lack the resolve to deal with them?
  The Prime Minister: I do agree with that. I think it is important that we continue this military action and ensure that it is successful.
  I can tell the House that we have now significantly damaged the Taliban's military capability, including fast jets, transports and helicopters. We have inflicted very
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  severe damage on their command and control facilities, early warning systems, air defence systems, radar and surface-to-air missile sites, and we have also inflicted heavy damage on the terrorist network and terrorist training camps of al-Qaeda.
  We are in the process of establishing an ability to take further military action against both the Taliban regime and the al-Qaeda network, and we are giving additional help to the Northern Alliance in its efforts against the Taliban. The Northern Alliance is now taking territory from the Taliban, and is close to Mazar-i-Sharif in the north and to Kabul.
  In any military action there are difficulties—there is no clean or easy way to deal with it—but I think that the House will know that, in the weeks that followed 11 September, we made every effort to give the Taliban regime a chance to be reasonable and to yield up bin Laden and his associates; they refused to do so. We now know quite clearly from the statements made by al-Qaeda and bin Laden since 11 September that, if they are not stopped, they will try to commit further terrorist atrocities. We have no option but to continue this, to bring it to a successful conclusion and to close down that terrorist network once and for all.
  Mr. Duncan Smith: Following that point with the Prime Minister, is not it also correct that ending the humanitarian crisis in Afghanistan is clearly linked to the same military success? The biggest obstacle that we now see to delivering aid is the control of the vast majority of Afghanistan by the Taliban, who are now, I understand, taxing some of the aid that is going in and even sending some of it to market, not letting it go to those who need it. As we know that some of the key passes into Afghanistan will be closed by the new year, time, as the Prime Minister knows, is short. So would not the best way to ensure that vital aid gets through be for the existing Taliban regime to fall and for a new Government to come to power committed to assisting the aid programme?
  The Prime Minister: It may again help if I say a word or two about this, because I understand the concerns of aid agencies and others about humanitarian assistance going through to people inside Afghanistan. Around Afghanistan, on the borders, we have sufficient provision of food, camps and shelter for about 2.5 million people. Some 4 million people are already being helped. Inside Afghanistan is the problem. The World Food Programme believes that it can get in some 12,000 tonnes of food in the coming week, even despite the difficulties, and it has already got in several thousands tonnes of food in the past few days. That is difficult, but it is important for people to realise why it is difficult.
  It is difficult because the Taliban regime are harassing the UN convoys, in intimidating them and, in some cases, taking over their equipment, their communications or the sites where the UN staff are. They are taxing some of the food—so-called taxing—as it comes into Afghanistan, and they are trying to lift other parts of it and use it for their own purposes. If we have their co-operation in the humanitarian help to the Afghan people, we can make sure that that food gets through. It is they who are the obstacle, and we will do everything that we possibly can, despite their obstruction, to get that food through to

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  people. However, it is very important that people realise that it is their obstruction that is stopping the food getting through to the people who need it.
  Mr. Duncan Smith: Our aim must be to bring bin Laden and al-Qaeda to justice, as the Prime Minister has said from the beginning, but until there is a Government in Afghanistan who are determined to rid themselves of bin Laden and al-Qaeda, that, as he knows, will be immensely difficult to achieve. Will he therefore, take this opportunity to assure the House that such a Government must be broadly based and include not just the mainly Tajik Northern Alliance, but other tribes, such as the Pushtun, Hazaras and others? Will he also confirm, against some reports, that he and the United States are talking widely to all the people who could help to put together such a Government and who may already have plans to do so?
  The Prime Minister: We certainly are talking to all the people who would have to be involved in order to have a broad-based post-Taliban regime in Afghanistan. However, the work that is being carried out is being undertaken principally by Mr. Brahimi, the UN representative, and he is in talks with all the relevant ethnic groupings in Afghanistan. It is extremely important that we have a successor to the Taliban regime that has broad support in the country and that we commit ourselves to assisting that regime in the reconstruction of Afghanistan.
  Now, some few weeks after 11 September, I can assure the House that the coalition for action remains strong and that countries are pledging their support—military, as well as logistical support—right around the world. On the humanitarian effort, we are doing everything that we reasonably, humanly can, and will do more. In respect of what happens after the Taliban fall, we are working to make sure that the Afghan people, who are the victims of the Taliban, get the best possible prospect of a decent and stable future.
  Mr. Alan Simpson: The Prime Minister will know of the statement made by the aid agencies this morning that 400,000 people in Afghanistan are surviving on grass and wild vegetation. He will also know that that statement makes it clear that the problems of getting humanitarian relief through are caused by a combination of the tithes imposed by the Taliban, obstructions placed by the Northern Alliance and the bombing that makes drivers reluctant to go into the area. The aid agencies have called for a pause in the bombing to feed those 400,000, and the 2 million who will not have enough food to survive the winter. Will we take any notice of that call?
  The Prime Minister: Of course, we take notice of the concerns that the agencies have raised but I must say to my hon. Friend that the principal problem for the drivers of the UN convoys is the Taliban regime's harassment and intimidation of them. We should remember that anyone who associates with the UN inside the Taliban-controlled areas of Afghanistan is liable, according to the Taliban's own statements, to be prosecuted by them.
  The World Food Programme believes that it can get 12,000 tonnes of food into Afghanistan in the next week. We are doing everything we can to remove the obstacles,
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  but the single most important thing for the Afghan people is to be released from the tyranny of the Taliban regime as swiftly as possible. That is essential, and it is essential for humanitarian reasons, too.
  I also stress to my hon. Friend and to the House that the humanitarian crisis in Afghanistan pre-dates 11 September by a long way. Literally millions of people were refugees before then and living in conditions of deprivation and, in some cases, starvation. So we will continue to do everything we can. We cannot have the Taliban regime remain in power and able to use this humanitarian crisis as a reason for warding off the action that we take.
  Mr. Charles Kennedy: May I associate Liberal Democrat Members with the proper expressions of condolences about the two individuals that the leader of the Conservative party and the Prime Minister have already offered?
  Given the need for the military action in Afghanistan to be underpinned by the moral authority of the maximum humanitarian effort that is consistent with the military and political objectives that we support, will the Prime Minister acknowledge that anything that can be done to open the passage of roads into Afghanistan will be welcome? Is the international community, for example, considering safe corridors that will perhaps be under longer-term United Nations administration?
  The Prime Minister: We are looking urgently at all the different ways that we can try to secure corridors by which food can get into Afghanistan. Of course, one of the areas in which the military and the humanitarian actions interconnect is that the more territory that is under some sort of control by forces hostile to the Taliban, the more aid we can get into Afghanistan. The actions are linked. We are also working very closely with the United Nations to see what further measures it can take too.
  Mr. Kennedy: UNICEF warns today that up to 100,000 children could die over the next few months because of climatic conditions, dreadful internal conditions and the lack of aid, so will the Prime Minister tell us what steps if any—perhaps through the use of American spy satellites—have been taken to ensure that the aid drops that have already taken place have, in fact, reached the desired destinations?
  The Prime Minister: We believe that most of the aid that is being put into Afghanistan reaches the people whom it is supposed to reach, but we cannot be sure. We are operating in extremely difficult territory in the areas controlled by the Taliban where, as I said, there is a great deal of intimidation and harassment by them. However, in the conversation that I had with President Bush a few moments ago, we both agreed that the humanitarian aspect of this mission is as important as the military. Indeed, the two are linked. It is important that we do everything that we possibly can to remove any obstacles there and to get the aid in. We will consider what further help we can give to the refugees both on the borders of Afghanistan and those on the move inside Afghanistan.
  I simply express to the House the obvious point that it is an extremely difficult situation in which there are very poor communications, poor infrastructure and hordes of

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  soldiers from the Taliban who can literally take over an area very quickly and intimidate the people there, including, of course, the UN staff.
  Mr. Eddie McGrady: Is the Prime Minister aware that the leader of the Ulster Unionist party, the right hon. Member for Upper Bann (Mr. Trimble), will, as we understand it, withdraw his Ministers from the partnership Executive in Northern Ireland within the next few days, leading to the collapse of the power-sharing Executive and the unravelling of the devolved institutions? Does he agree that that will create a political vacuum in Northern Ireland that might only be filled by men of violence? Will he use his good offices to ensure that the hard-won peace process, even at this eleventh hour, can be saved, in partnership with the Irish Government, for the people of Ireland, north and south?
  The Prime Minister: I am obviously deeply committed to the peace process moving forward. Of course it is important that we do everything we can to ensure that we have the stability and institutions that we want. However, that requires all those who have supported the Belfast agreement—the Good Friday agreement—to do what they are supposed to do under its terms. My hon. Friend knows full well what I am referring to. If all parties are to have the confidence that we are moving forward on an agreed basis—namely, peaceful and democratic means as the only way in which to advance their cause—it is important that everyone implements all the obligations under the agreement, not simply some of them.
  Mr. Peter Luff: Did the Prime Minister see the comments of the Anglican vicar who lost a relative on 11 September? He told the BBC that Jo Moore's infamous e-mail was
  "basically burying bad news … under the bodies of six and a half thousand people.
  Indeed, she did not even include the relatives of those who died in her belated list of apologies. Did anyone in Downing street speak to Jo Moore after her e-mail or seek her resignation at any time?
  The Prime Minister: First, I do not defend in any shape or form what Jo Moore said, which was horrible, wrong and stupid. I do, however, defend the decision that to sack someone and end their career was too heavy a penalty. That was the decision taken. I supported it and regard the matter as closed.

  Local Government Reform
  Mr. David Chaytor: If he will make a statement on the reform of local government finance.
  The Prime Minister: We will publish a White Paper on local government. We are also working with local government to review revenue grant distribution to create a fair and transparent system that enables councils to meet the needs of their communities. These changes will be introduced in 2003–04.
  Mr. Chaytor: I thank my right hon. Friend for that reply. I want to ask him about the standard spending assessment for education. Last year, a primary school
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  pupil in my constituency received around £2,300 per annum; a primary school pupil in the city of Westminster received more than £3,300 per annum; and a primary school pupil in the best-funded local authority received £4,300. Does my right hon. Friend think that that is fair? Can the system be justified to my constituents any longer?
  The Prime Minister: It is precisely because of people's concerns that we are reviewing the system, as my hon. Friend knows. However, it is important that such a complex system is reviewed properly and that we get the answers right. He will know that in Bury, as in other parts of the country, there has been a massive increase in the amount of money that goes into the education budgets, irrespective of what system we use. That is one reason why it is so important that we continue to invest in our public services so that education, health and other services get what they need.
  Dr. Jenny Tonge: Have recent events affected the Government's thinking on the siting of airports, especially those near London—
  Mr. Speaker: Order. This is a closed question. The hon. Lady cannot ask about that.

  Engagements
  Dr. Desmond Turner: I hope that my right hon. Friend agrees that Railtrack's fate sends all private companies involved in the delivery of public services a clear signal that they can no longer expect to be feather-bedded. Can he assure the House that any future developments will be determined by the imperative to give quality and value in services to the public?
  The Prime Minister: I can give my hon. Friend that assurance. It was important, particularly because we were being asked for billions of pounds of extra public subsidy for Railtrack, that we took the action necessary to put the company on a better footing for the future, so that the interests of the travelling public come first. We know what a disaster rail privatisation was; it is our job and our duty to make sure that it we put it right, and we are doing so.
  Mr. Iain Duncan Smith: Why does the Prime Minister think that more than a quarter of all family doctors now want to leave the NHS?
  The Prime Minister: There are huge strains on family doctors at the moment because they are going through a period of enormous change. We are moving the whole of primary care to primary care trusts. However, I think that family doctors believe that primary care trusts are the right way forward. They also believe, as the right hon. Gentleman will see from the survey on which he based his question, that the services that they offer to their patients today are greatly improved compared with a few years ago.
  Mr. Duncan Smith: If that is the case, why does the same British Medical Association survey show that nine

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  out of 10 GPs believe that the Prime Minister's reforms are unachievable, and two thirds think that his plans will do nothing to improve care for patients?
  It is not only the doctors. A constituent of mine—[Interruption.] They do not like it. A constituent of mine recently died in hospital after waiting nine hours on a trolley. His family were not aware that he had been admitted or, for a further three days, that he had died. When they came to pay their respects, they found that the body had been lost. Does not the Prime Minister think that all his promises of a better tomorrow will sound hollow to such people?
  The Prime Minister: Of course what happened to the right hon. Gentleman's constituent is unacceptable. There are situations in the national health service today that are unacceptable. People wait too long for operations; we do not have enough doctors, nurses and consultants; we need to renovate many hospital buildings and introduce new technology. All those things require investment and money, and I am afraid that the difference between our two political parties is that we support the additional investment and his party opposes it.
  Mr. Duncan Smith: It is the usual story. The Prime Minister talks about investment and then, as he did the other day, pleads for more time. What is the point when his own Ministers, some of whom are present, belie his words? His Health Secretary goes around telling everybody that the NHS will remain a state monopoly as long as Labour is in power. Labour Members are all nodding because they enjoy that. A senior Cabinet Minister is sent to tell the unions that their working practices will not change, no matter what. Is it not clear that when it comes to pleas for more time, with Labour it will be more wasted time? [Interruption.] They do not like it.
  Mr. Speaker: Order. The Leader of the Opposition must be heard.
  Mr. Duncan Smith: They do not like it, Mr. Speaker. The truth that the Prime Minister has to be aware of is that Labour always puts favours to its friends ahead of fairness to patients.
  The Prime Minister: First, on the trade unions, we want to ensure that when services are contracted out, it is not done on the basis of poorer terms and conditions of employment for the staff. One of the things that we have learned over the past few years, not only under this Government but under the previous Government, is that if the impact of contracting out is simply to undermine the terms and conditions of staff, it will not usually lead to a better service, and having discussions on that basis is perfectly sensible.
  We are employing many thousands more nurses in the health service, and there are more doctors and consultants. The largest hospital-building programme since the war is under way, and GP premises are being renovated. Of course, it takes a very long time to do that, but it can be done only if we put in the necessary investment.
  The position of the Labour party is that it is necessary to put investment into health care, education and other public services before short-term tax cuts. The right hon.
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  Gentleman's position is to stand in the opposite corner. That is why, no matter how much the Conservatives talk about public services, they will never have credibility on that issue.
  Joan Ruddock: My right hon. Friend spoke earlier about the efforts to bring together the various interest groups that might form a post-Taliban Government. My concern is that they are probably all men. Does he agree that there are many courageous and able women in Afghanistan and in exile, and will he carefully examine the models of female participation that paved the way for women's political involvement in the transitions in South Africa and Northern Ireland?
  The Prime Minister: Female participation would certainly be an innovation in Afghanistan after the Taliban regime. I assure my hon. Friend that we are considering how to have a post-Taliban Government in Afghanistan that is as broad-based as possible, and how we can help Afghanistan get over some of the extremism that has so disfigured the country. Under the Taliban, not only are women not allowed to occupy any position of power in public life, they were first driven out of Kabul university, and then girls were forbidden to go to school. There are many changes in which female participation would be most welcome.
  Mr. Simon Thomas: I remind the Prime Minister of the words of the Foreign Secretary in the House yesterday:
  "There is no problem finding the money to pay for aid to Afghanistan".—[Official Report, 16 October 2001: Vol. 372, c. 1060.]
  The Prime Minister has just told the House that the humanitarian aspect is as important as the military aspect. How does he explain the fact that to date the World Food Programme has received only one third of the money promised to it by the west to feed the starving in Afghanistan? How can we stop the Muslim world feeling that we find it easier to find money for bombs than for bread? Will he now lead a humanitarian coalition, as he has led the military coalition, to squeeze out of the rich west the money to feed 6 million people?
  The Prime Minister: The hon. Gentleman's question is predicated on a misunderstanding of the true position: $700 million have been pledged and the World Food Programme needs about $130 million of that immediately. It has got it. When it needs more, it will have more. The issue is not the sum that has been pledged: it has been made absolutely clear that that money will be available. The issue is how we get the food into Afghanistan. On the question of the humanitarian coalition, we are doing everything that we can, but, as I said earlier, we face obstruction by the Taliban regime.
  As for the military action, I ask the hon. Gentleman to reflect on the fact that there is no alternative to taking action against those who perpetrated the terrorist attacks on 11 September other than to say that we will sit back and let them carry on doing it, which would be interpreted as another sign of weakness. I find it extraordinary that anyone can look at the situation and not realise the absolute necessity of acting and of carrying that action through.

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  Of course it is difficult. Anyone with any sense of humanity who sees the humanitarian problems and realises the appalling difficulties of any form of military conflict would prefer not to take the action, but what have we learned since 11 September? It is that the Taliban will not yield up the terrorist networks and, what is more, those people will do anything they can to repeat the atrocities that they committed on 11 September. In such circumstances, we have no alternative but to act. Our primary aim should be to make the action effective and to get it done as swiftly as we can.
  Mr. Piara S. Khabra: Is the Prime Minister aware of the existence of madrasas in Pakistan in which the indoctrination of young people in fundamentalist education takes place, preparing them for future terrorist activities? Is he also aware that there are in Pakistan centres where training in the use of weapons is carried out? Will he take the opportunity to speak to the President of Pakistan and say that those institutions should be closed to ensure that the culture of terrorism is rooted out of society?
  The Prime Minister: I do not think that it is for us to start dictating to countries what they do, but I agree with my hon. Friend that it is important that we address the issue. I found, both when I was in Pakistan and out in the Gulf, that there was considerable understanding of the need for the moderate parts of Islam to regain full and proper ownership of their own religious beliefs from the
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  extremists. I hope very much that that is what happens; I know that it is essential for the future stability of the world.
  Mr. Roy Beggs: Does the Prime Minister share the opinion expressed by Northern Ireland Assembly Minister Brid Rodgers that only the IRA can save the Belfast agreement? Does he agree that the issue of decommissioning all illegally held weapons and explosives cannot be fudged? All terrorist organisations in Northern Ireland, whether so-called loyalists or republicans, must commit exclusively to democratic processes and sever immediately all links with other terrorist groups, such as those based in Turkey, Slovakia, Spain and, indeed, Colombia.
  The Prime Minister: I do agree that it is important for all people to express themselves and indeed to be committed to exclusively peaceful and democratic means. Of course, that is the very reason why we are insistent that weapons are put beyond use, not merely by republicans, but by loyalists and all those groups who have acted and used terrorism in the past 30 years to do so much damage in Northern Ireland. I very much hope that, if we can get that process under way, the hon. Gentleman and his colleagues will work with us to make sure that the institutions can be given the stability that they need, derived from people's confidence that exclusively peaceful and democratic means are going to be used.

BILLS PRESENTED

  SEX DISCRIMINATION (ELECTION CANDIDATES)
  Mr. Secretary Byers, supported by the Prime Minister, Secretary Margaret Beckett, Secretary Clare Short, Mr. Secretary Reid, Mr. Secretary Murphy, Mrs. Secretary Liddell, Ms Secretary Hewitt, Secretary Estelle Morris, Secretary Tessa Jowell, Mr. Nick Raynsford and Dr. Alan Whitehead, presented a Bill to exclude from the operation of the Sex Discrimination Act 1975 and the Sex Discrimination (Northern Ireland) Order 1976 certain matters relating to the selection of candidates by political parties: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed. [Bill 28].
  PROTECTION OF PROPERTY (STLTIC DEVICES)
  Michael Fabricant presented a Bill to allow a property owner to erect static devices with warning signs for the protection of his property; and to indemnify the property owner from prosecution or liability if a person or persons committing a criminal act on his property is injured by a static protection device: And the same was read the First time; and ordered to be read a Second time on Friday 19 July 2002, and to be printed [Bil 29].
  ENVIRONMENTAL AUDIT
  Mr. David Chaytor, supported by Mr. Harold Best, Mrs. Helen Clark, Mr. Colin Challen, Sue Doughty, Mr. Neil Gerrard, Mr. Jon Owen Jones, Ian Lucas, Mr. Malcolm Savidge, Mr. Simon Thomas, Joan Walley and David Wright, presented a Bill to require the Comptroller and Auditor General to examine and report on the environmental impact of public expenditure, and the environmental performance of government departments and certain other public bodies against targets set by Ministers; to provide for the establishment of an environmental auditor general to carry out such functions and report thereupon to the House of Commons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 30 November, and to be printed [Bill 30].

Orders of the Day

  European Communities (Amendment) Bill
  [4TH ALLOTTED DAY]
  Order for Third Reading read.
  3.32 pm
  The Minister for Europe (Peter Hain): I beg to move, That the Bill be now read the Third time.
  The Foreign Secretary is representing the United Kingdom at a meeting today in Luxembourg of the General Affairs Council, which will discuss the European Union's overall counter-terrorism policy in response to the atrocities on 11 September. In particular, EU Foreign Ministers will review progress on the package of measures called for at the emergency European Council on 21 September. They will also discuss the way forward on Afghanistan and how best to ensure a better future for the country and its people. The Foreign Secretary will then immediately travel to Turkey for further talks. The Turks are an important part of the international coalition against terrorism, and we will continue to work closely with them and all other allies in the coalition to ensure that terrorism does not prevail.
  I recently made my first visit to central Europe as Minister for Europe. In Hungary and the Czech Republic, I saw countries, Governments and people determined to be a part of the EU. I have also met Ministers from Poland, Cyprus, Malta, Estonia and Slovenia; they all look to the EU as their future and they look to Britain as their champion. They want EU membership, and they want it now. They think that the EU has delayed too long. They, and all other candidates like them, want to take their place as full members of the European family, which history has long denied them. They asked me with some bemusement how those in Britain who say that they are in favour of enlargement can at the same time be against the only treaty that will deliver it on time and in good order. I put that same question to the Conservative Opposition today. By voting against the Bill, they are voting against all Britain's friends and allies in eastern, central and southern Europe who are anxiously knocking on the door to enter.
  Mrs. Angela Browning: I am grateful to the Minister. Like him, I have spoken to officials, particularly in Poland and Hungary, about their countries joining the EU. Did they ask him what arrangements the UK Government have tried to put in place to make sure that the common agricultural policy will work effectively? As he knows, agriculture is particularly important to those countries. What did they ask him and what did he reply?
  Peter Hain:Perhaps I have the advantage over the hon. Lady, as I have spoken to Ministers in those countries, not simply officials—[Interruption.] Okay, and officials as well. The answer to her question is simple. Poland, the Czech Republic and Hungary have all completed negotiations on a range of chapters, up to the total of 31, which is their aim for full accession. Agriculture is one of those that still have to be negotiated. There are concerns, in relation to Poland especially, about the

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  reforms that will be necessary in the common agricultural policy. We will tackle that agenda and tackle it with the candidate countries, as we are doing.
  Reform of the common agricultural policy must not be used as an excuse to deny enlargement. A series of vested interests need to be overcome among some of our fellow member states in order to reform the CAP. It is important that we do not allow those vested interests to triumph by blocking enlargement. We want the candidate countries in, and we want to conduct both reforms in parallel.
  Mr. David Chidgey: I endorse the Minister's remarks. Can he confirm that in our efforts to achieve enlargement within the timetable set out, it will be necessary for all the applicant states to meet the full requirements of the acquis, and that there will be no political fudge at the last minute to achieve our political requirements of enlargement of the EU?
  Peter Hain: No. I can assure the hon. Gentleman that that cannot be the case under the treaty. Each of the applicants must sign off and agree the 31 chapters involved in the acquis, then they must ratify the treaty through their domestic process. There is no question of fudges. Detailed negotiations are necessary and much progress has been made. The Czech Republic, for example, has signed off 19 chapters. Cyprus is in a similar position. In the next year or so, we must redouble our efforts to make sure that the other candidates can come in, particularly those that are likely to be in the first wave. We are determined to play our part to ensure that enlargement happens on time, from 1 January 2004. Getting the Bill through the House tonight is an important part of that process. [Interruption.]
  The hon. Member for Buckingham (Mr. Bercow), whom I see sitting on the Front Bench instead of complaining from the Back Benches about European policy, says "Nonsense." Enlargement is the only show in town. If hon. Members want enlargement, and if they do not want all our friends in eastern and central Europe to be denied the opportunity of joining the European Union, they should vote for the Bill. If not, they are against those countries and their interests, and they should go out and tell them that that is their position.
  Dr. Julian Lewis: I thank the Minister for giving way. As my hon. Friend the Member for Buckingham (Mr. Bercow) cannot answer for himself, may I suggest an answer on his behalf? The Nice treaty covers many matters other than enlargement, such as the creation of a European military force outside the NATO structure. How can the Minister try to blackmail the House into saying that we must vote for the Bill, because if we vote against it for any reason whatever, we are voting against enlargement? That is, as my hon. Friend rightly said, utter nonsense.
  Peter Hain: Part of my duties is to educate Opposition Members about Europe. That is hard work in several cases, and the hon. Gentleman is an example. I thought that the edict from the new leadership of the Conservative Opposition was for them to take a low profile on European matters. I thought that they had instructions not to say anything about European policies that might deflect
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  attention from the domestic agenda. However, I am not surprised. Their policies are not just unmentionable; they are unspeakable as well. We must make it clear, so that the House and voters understand, that Opposition Members such as the hon. Gentleman and the entire Eurosceptic Conservative Front Bench are not so much anti-Europe as anxious to be out of Europe, as the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke) so eloquently said.
  Mike Gapes: Is my right hon. Friend aware that the hon. Member for New Forest, East (Dr. Lewis) is a Conservative Whip? Does his intervention indicate a new dispensation within the Opposition? Apparently, in order to get a job on the Front Bench, Opposition Members must be able to defy their leader about keeping quiet on Europe.
  Peter Hain: My hon. Friend makes the point very well. I look forward to hearing many more interventions being made from the Back Benches by Front Benchers such as the hon. Member for Stone (Mr. Cash), who is there at the moment. It is a new novelty in opposition.
  Mr. John Bercow: Novelties are new.
  Peter Hain: Indeed. The hon. Gentleman is very quick, and I congratulate him on that.
  Let us be clear that our Government want enlargement just as much as the candidate countries, not only because we have strong ties with each of them and because it is in their interests, but because it is in Britain's interests.
  Mr. Robert Jackson: The Minister is right that the practical effect of denying the Bill its Third Reading would be to ensure that Britain could not ratify the Nice treaty. Does he agree that the certain consequence would be the throwing of a major spanner into the enlargement works?
  Peter Hain: I am grateful that sense has prevailed at least somewhere on the Opposition Benches. The hon. Gentleman makes a valid point. If we do not carry this Bill in the House and the other place, we will be unable to ratify the Nice treaty, which will fall apart. Britain would then be in a dangerous position, as it would be a champion of enlargement that could not introduce its own Bill to ratify the treaty that makes enlargement possible. I am sure that I have his support in saying that there is no alternative. If we want enlargement to occur on time and to ensure the entry on 1 January of the first wave of countries, including many of our friends, such as the Poles, Czechs, Hungarians and others, the Bill needs to pass through the House—and quickly.
  Mr. Ian Davidson: My right hon. Friend stressed the importance of the House enacting the Bill so that the treaty can be ratified. Is he aware that Ireland has rejected the proposal on which the Bill is based? Does that mean that all our discussion is immaterial or does not the Irish rejection matter?
  Peter Hain: Neither suggestion is true. Three countries have already ratified the treaty and we intend also to be in the first batch that do so. The more countries that ratify

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  it, the more progress can be made in securing the enlargement that we, at least, want.
  On the Irish decision, my hon. Friend made an important point to which I want to respond fully. Consultations have taken place between the European Union leadership, including Britain, and the Irish Government. They have asked for time to consider their position. [Interruption.] It is interesting to hear scoffing, howls of laughter and cheering at that prospect. However, if ratification is not agreed by any member state, including Britain, enlargement cannot proceed. If enlargement is desirable, as I believe it to be, it must proceed.
  Roger Casale: Does my right hon. Friend accept that, although it is sometimes difficult to understand the exact position of the Opposition, it is clear that they are not against the enlargement of the European Union, but want an enlargement that will weaken or undermine it, instead of consolidating it and reinforcing its capacity to act?
  Peter Hain: My hon. Friend is absolutely right. I do not think that the Opposition are in favour of proper enlargement. They want to wreck the prospects of the candidate countries, as well as Europe, the Bill and the possibility of getting ratification from Britain. Fortunately, we have a clear majority over the Eurosceptics who sit on the Opposition Benches and it is just possible that the Bill will be introduced without their support.
  Mr. Boris Johnson: Does the Minister really think that the Bill is indispensable for enlargement? From my experience of the Community, it seems to me that it would be perfectly possible to convene an intergovernmental conference tomorrow in Brussels to discuss enlargement issues in the Nice treaty that are completely uncontroversial and without any need to ratify the treaty itself. One could have such a conference tomorrow and get on with enlargement.
  Peter Hain: The hon. Gentleman is a formidable journalist, but if he imagines that he can convene an intergovernmental conference tomorrow and renegotiate enlargement, he is living in cloud cuckoo land. Britain increased its voting strength in the Council of Ministers under the Nice treaty. We got a better deal than any of the other larger countries; we increased the share of our vote under qualified majority voting. If we reopened the Nice agenda, does the hon. Gentleman believe that that increase, which is embedded in the treaty, subject to ratification, would be left untouched? Of course it would not. Several parties are not happy that Britain's share of the vote increased.
  Mr. Robert Jackson: My hon. Friend the Member for Henley (Mr. Johnson) is a formidable journalist, but I do not believe that The Spectator had correspondents at the Nice summit. He would otherwise know that the decision on the voting weight was exceedingly controversial and that representatives of several member states threatened to walk out. If the treaty falls through, the whole matter might have to be renegotiated with consequent enormous complications.
  Peter Hain: The hon. Gentleman is right; I shall continue to take his interventions if he wishes to make
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  them. He makes a valid point: several other countries are extremely upset about the deal to which they agreed and they would desperately like to unravel it. The opposition of the hon. Member for Henley and his colleagues to the Bill would promote that outcome.
  Donald Anderson: My right hon. Friend said that his mission was to educate the Opposition. He has shown them that their zealous anti-Europeanism would recklessly annoy many of our friends. However, will he also educate them about the changed attitude of the United States Administration to European security and defence policy? It undermines yet another plank of their anti-Europeanism.
  Peter Hain: My right hon. Friend is right. The President of the United States has been steadfast in his support for the European security and defence policy. He speaks for the Administration in Washington, and some of the offstage noises to the contrary should be ignored. As I shall make clear later, if I am allowed to get that far, the events of the past month have increased the importance of a European role in security. The progress has been endorsed.
  Dr. Julian Lewis: Will the Minister give way?
  Peter Hain: I am sorry, but I shall make some progress before taking any more interesting interventions from the hon. Gentleman.
  Enlargement is not a favour that we are doing the candidates. It is a favour we are doing ourselves. Why? It will reunite Europe at long last after the bitter divisions of world war two and the cold war. It will make us safer; war between the EU's members is now unthinkable. By enlarging, the EU will extend stability throughout Europe.
  Enlargement will make us richer. Taking in the central Europeans alone will boost British gross domestic product by £1.75 billion. That is an important prize. It will create more jobs for British workers. Enlargement will create thousands of them throughout the UK. It will mean lower prices and greater choice for UK consumers. They will have access to a wider range of products at more competitive prices as the single market is enlarged to become the largest in the world, with a population of nearly 500 million.
  It will also make Britain cleaner and greener. Common environmental standards applied in all EU member states, new and old, will reduce the cross-border pollution that affects our skies and rivers.
  Enlargement will make our streets safer. Together, the EU member states are tackling cross-border crime, drug smuggling, people trafficking and illegal immigration. If we are to deliver lasting success, we need the candidates inside the EU, working with us on those tasks.
  As I said earlier, enlargement is even more important after 11 September. After the horror of that day, we need enlargement more than ever. If we are to defeat the terrorists, we need the bigger, stronger Europe that enlargement will bring. We need the practical co-operation across the continent that enlargement will allow.
  Let me explain. On 21 September, European Union leaders agreed on an action plan to fight terror across Europe and beyond. That plan is based on much closer co-operation with the United States, and on much closer co-operation among the EU's member states themselves.

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  We agreed on a European arrest warrant. The warrant will be most effective when it applies not just in the present 15 member states but across Europe, in what are now the candidate countries. It will, when they join. There will be nowhere for the terrorists to hide any more. A common definition of terrorism in each nation's laws was also agreed. When it applies across Europe, as it will when the candidates join, the days when terrorists could avoid justice through legal loopholes will be ended.
  We agreed on quicker freezing of assets and evidence, through recognition by each EU member state of others' court orders. When that applies across Europe, as it will when the candidates join, terrorists will no longer be able to hide the funds that pay for their campaigns, or the evidence that will convict them across Europe.
  We agreed on better intelligence-sharing between member states. When the candidates are part of that network, as they will be when they join, all Europe's eyes and ears will help to ensure that we can crack and pre-empt planned terrorist action throughout our continent.
  Those are important prizes, which enlargement will bring.
  Mr. John Smith: Does my hon. Friend agree that in the fight against terrorism, one of the most important aspects of this treaty is the headline military goals? As has been revealed in recent weeks, many of our NATO allies have not the military capability to contribute to NATO. If the goals within the treaty for the European targets are achieved, the capability will exist.
  Peter Hain: I am not sure about that, but I take my hon. Friend's general point.
  A bigger European Union will mean a stronger European defence policy too—which relates to what my hon. Friend just said. It will mean more troops able to handle the peacekeeping, humanitarian and crisis-management operations that Europe may need to run in the future. It will mean an EU better able to stop the kind of instability, on its borders or further afield, in which terrorists can hide and thrive.
  Mr. Menzies Campbell: I hope that the Minister will not be seduced by the intervention of his hon. Friend the Member for Vale of Glamorgan (Mr. Smith)—with whom I often agree, although I do not on this occasion. It would do nothing for the strength of NATO if it were somehow thought that to achieve the headline goals of the European rapid reaction force was equivalent to achieving the objectives of the defence capabilities initiative, and NATO itself.
  Peter Hain: I take the right hon. and learned Gentleman's point. He usually speaks with great authority, conviction and, indeed, persuasiveness about these matters.
  Our biggest weapon of all in the fight against terrorism, however, is not more troops. It is not just better intelligence sharing, and not just enhanced extradition arrangements. It is international solidarity. The member states are showing that: not just Britain but all our European partners gave immediate and unconditional
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  support to the US after 11 September. The European Union is emerging through this crisis as a force to be reckoned with on the global diplomatic stage. It is no longer simply passing resolutions in its Council of Ministers meetings; it has earned a right to be taken seriously in Washington and, indeed, in the rest of the world.
  Let us remember that the candidates too have been steadfast in giving unconditional solidarity. They too have voiced their full support to the US, for the anti-terrorist measures that the EU is establishing, and for the broader fight against fear. All—each one—did that voluntarily and immediately. Without being prompted, they demonstrated that, at a critical time internationally, they were already embryonic members of the European Union. We welcome them and commend them for that. We need their support, for this struggle has no boundaries. We need their solidarity; their accession will consolidate it. We need their co-operation; their accession will strengthen it.
  What kind of Europe will the candidates join? We want them to join our kind of Europe. We want them to join a practical Europe that delivers real things for real people: jobs, prosperity, cleaner air, safer cars, and the right to live, work and study anywhere inside the European Union. We want them to join an accountable Europe, whose agenda is set by the democratically elected leaders of the member states; an open Europe, which consults its citizens and makes decisions with full transparency.
  We want them to join a comprehensible Europe that uses language that people can understand and procedures that they can follow, and a diverse Europe that cherishes the differences between its member states and empowers them all while respecting the national identity of each. We want them to join a Europe that stands in a strong transatlantic alliance with the United States—as it has so steadfastly in the fight against international terrorism, and as it must also do in opening up trade, on conflict prevention, on a new deal for Africa, on humanitarian assistance and in fighting world poverty. That is our kind of Europe. That is the Europe that our Government are building and the Europe that we want the candidates to join.
  Mr. Davidson: I am grateful to the Minister for giving way again, and I very much agree with him on the merits of enlargement. Does he agree with me and Romano Prodi that, as Mr. Prodi said on 21 June 2001, in The Irish Times,
  "legally, ratification of the Nice treaty is not necessary for enlargement"?
  Does the Minister accept that?
  Peter Hain: I noticed renewed interest in the debate among Opposition Members when my hon. Friend mentioned Romano Prodi, who is very popular among Opposition Members. Legally we could have an accession treaty with each member state, one by one, and convene an intergovernmental conference to agree that. However, is my hon. Friend seriously suggesting—I hope that he is not—that that is a sensible way to proceed on enlargement?
  We need a unified position to address issues such as the common agricultural policy—which the hon. Member for Tiverton and Honiton (Mrs. Browning) raised—security, the single market and the various other issues

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  raised in the 31 chapters. A single treaty to which each country joining the European Union has to accede makes far more sense than the alternative and is indeed the only practical way of proceeding. That is the only sensible and practical way of pursuing the matter. Legalistically, one could pursue the extremely unlikely strategy that my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson) seems to be supporting, but that strategy would never deliver enlargement.
  Mr. Robert Jackson: Does the right hon. Gentleman agree that, although it would be perfectly possible to fix in each treaty of accession the number of seats that each new member state would have in the Council of Ministers, it is very hard to see how one could embody in each treaty of accession a voting weight for the current 15 member states?
  Peter Hain: The hon. Gentleman speaks great common sense on the issue. We are discussing blindingly obvious points. If we want enlargement, Nice is the vehicle by which to achieve it. If we wreck Nice, we will not achieve enlargement.
  Several hon. Members rose—
  Mrs. Browning: Will the Minister comment on the Foreign Secretary's comment on this issue in a previous debate? The Foreign Secretary said that
  "it is not true in a legal and technical sense that the Nice treaty is necessary for enlargement."—[Official Report, 22 June 2001; Vol. 370, c. 287.]
  Peter Hain: I am answering the same point. Nice is the only realistic, practical and feasible vehicle to achieve enlargement.
  Several hon. Members rose—
  Mr. Davidson: Will my right hon. Friend give way?
  Peter Hain: I shall give way one last time.
  Mr. Davidson: My right hon. Friend is very generous indeed. Romano Prodi and I are of the view that, as I said,
  "legally, ratification of the Nice treaty is not necessary for enlargement."
  We would both go on to say:
  "It's without any problem up to 20 members, and those beyond 20 members have only to put in the accession agreement some notes of change, some clause. But legally it's not necessary."
  As that was in The Irish Times, on 21 June 2001, it must be true.
  Peter Hain: I do not know whether to treat roughly or gently my hon. Friend's remarks, but I shall treat them gently and say that I think that he should study the response made by the Foreign Secretary when he answered that precise point.
  Mr. John Gummer: Does the Minister agree that the mechanism that he is proposing has the advantage of enabling us to underline that Europe is seeking to find a way of working together and a
  1180
  framework within which, by working together, each of us becomes stronger? The alternative does not provide that clear object lesson.
  Peter Hain: The right hon. Gentleman is absolutely right and is speaking sense. The logic that he, like the hon. Member for Wantage (Mr. Jackson), brings to the debate is the only logic that can achieve enlargement. That is the point.
  The majority of Conservative Members want to wreck enlargement. It is impossible to achieve enlargement for the first wave of countries by 1 January 2004 by proceeding on some magical mystery tour of individual treaties to be signed one by one on behalf of the accession states. That is simply not feasible.
  Those Conservative Members should visit Poland, the Czech Republic, Malta, Cyprus, Estonia, Slovenia and all the other countries and tell them that they oppose their desire to join the EU on that date. The Conservatives should tell those states that they do not want an enlarged Europe, that they do not want to reunite Europe. Those countries are desperate to join the European family, and the Government are providing them with a vehicle to do so in this Bill.
  I have described the Europe that will be made better for Britain by the Nice treaty. Nice is not the penalty that we have to pay to get to enlargement: it is part of the prize. It is a benefit in its own right for Britain. Why? Because, as we have already explained in the House, Nice will give Britain more power. It will give the UK more votes in the Council relative to the small and medium-sized countries. Nice will extend qualified majority voting where that is in Britain's interests—in the single market or to deliver a more efficient EU. It will preserve unanimity for decision making on key areas of national interest, including tax, social security, defence, the EU's own resources, border controls and treaty change—just like we said we would achieve.
  Nice will reform the European courts to enable them to cut delays in the exercise of justice, which can penalise British interests. Nice will reform the Commission. It will make it smaller: there will be only one Commissioner per member state from 2005, and once the EU reaches 27, fewer than one. Nice will make the Commission more efficient. It will give the Commission President—the great buddy of my hon. Friend the Member for Glasgow, Pollok—new powers to organise the Commission and sack individual Commissioners if necessary. Nice will make the EU more flexible. It will make it easier for groups of member states to act together without requiring all to join in, or undercutting the single market.
  So Nice and enlargement are both in our interests. Both are necessary and both are urgent. The task now is to press on with the ratification of Nice.
  David Cairns: On the point about the benefits to Britain, has my right hon. Friend received representations from British business on the desirability of enlargement? What assessment has he made of the benefits to British business and jobs of achieving enlargement as quickly as possible?
  Peter Hain: My hon. Friend is right. We have had discussions with British businesses, many of whom have taken advantage of the period before enlargement to visit

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  those countries to obtain new markets and contracts, and the jobs that those will bring. Thousands of jobs will be created in Britain as a result of enlargement. It is estimated that 300,000 jobs have been created across the European Union member states as they are currently constituted, just by bringing in the first wave of enlargement. Enlargement will bring enormous opportunities for British businesses, jobs and prosperity.
  We must press on with the enlargement negotiations, to conclude on schedule by the end of 2002, so that new members can join by mid-2004 at the latest. We hope that they will be able to join by 1 January if possible, to deliver the Europe we all want. That is a challenging agenda. It can be achieved, but only if all of us, including the UK, the other member states and the candidate countries—it would be nice to include the Opposition, too—make every effort to achieve it. There can be no more obstacles and no more excuses for delay on any side.
  I have explained why we brought the Bill to the House soon after we were returned to office. The Bill is necessary for a treaty that, in turn, is necessary for enlargement on time and in a sensible form. All member states agree that the enlarged EU we want cannot work effectively without the changes that Nice will make to the EU' s institutions and procedures.
  All member states agree that Nice is necessary for enlargement. All member states also agree that Nice is all that is necessary for enlargement and that once Nice is ratified the EU will have completed all the institutional changes necessary for the accession of the new member states. That is the point. Nice will complete all the changes necessary—instead of a shambolic, treaty by treaty approach that would never reach a conclusion—and that is why the other member states support Nice. That is why the candidates support it. That is why the Government support it. That is why we brought the Bill to the House. That is why I urge the House to support the Bill today, and the stronger, safer Europe that it will help to build for Britain. I commend the Bill to the House.
  4.5 pm
  Mr. Michael Ancram: It is some years since I faced the Minister at the Dispatch Box, and in those days he was a Minister at the Welsh Office. I am delighted that his breathtaking arrogance has not been altered by his promotion to the Foreign Office.
  I come late to the legislative process on this Bill, which has now reached Third Reading. However, the jockey may have changed but the horse remains the same—although I hope that this slightly heavier jockey will not injure it. Moreover, it is clear that I shall have to learn the niceties of behaviour in the Chamber on this Bill. I was interested to note that, during his speech, the Minister was subject to friendly fire that came symmetrically from both sides of the Chamber.
  The Opposition oppose this Bill, as we have done throughout its passage through the House. I shall ask my hon. Friends to vote against it tonight, for two reasons. First, we believe that the treaty agreed at Nice fails to achieve even the aims set out by the Government. Secondly, it fails to advance the vision of a flexible Europe that lies at the heart our policy. We believe that that flexibility is essential to the successful enlargement of the European Union, as we wish to see it.
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  We have always been in favour of enlargement. The Minister related a litany of all the benefits that would accrue from enlargement, which by and large I welcome, as they are broadly the same as those that we have identified. However, they are not what the Nice treaty is about—a subject to which I shall return.
  We have long argued for a more flexible Europe, yet—as has happened again today—the unsubstantiated response that we receive when we do so is that we are flying in the face of achieving greater strength through political integration. Much of the debate on this Bill has centred on those two different basic positions.
  It is worth pausing to consider those differing positions in the light of the current international situation. Europe is an essential part of the coalition that has been put together so painstakingly in the fight against international terrorism. As it happens, the European Union's ability to contribute constructively to the coalition has depended not on further integration but on the flexibility that currently exists in Europe. The Nice treaty, and other initiatives, would reduce that flexibility.
  That flexibility has allowed our partners in the EU to be part of what has effectively been a layered coalition, with different levels of participation and, even, enthusiasm. If the supporters of integration had had their way—if the implied common foreign and defence policies had been established—would it have been possible for the Prime Minister to attach himself so firmly to the American cause? Would he have been able to sign up so readily to the longer-term objectives of the fight against international terrorism, and could he have committed armed forces to the military phase in Afghanistan? I think that the answer to those questions is: almost certainly not.
  Mike Gapes: Does the right hon. Gentleman think that the remarks of Italian Prime Minister Berlusconi were helpful in building the coalition? Does he think that it would be in the interests of European unity—or of the Conservative party—for his party to continue its discussions with far-right former fascists in Italy?
  Mr. Ancram: I am not certain what those questions have to do with the debate. I am making it clear that the coalition works because all partners are not being asked to give precisely the same response. I am sure that the Minister, if he has met Ministers from around Europe, will be aware of that. That is what flexibility means. The lowest-common-denominator approach that would have been adopted otherwise would almost certainly have restrained the valuable support that the Prime Minister has been able to give the USA. Almost certainly, it would have prevented military engagement by forces from the UK, France or Germany, and it would have militated against the best interests of this country in the fight against international terrorism.
  Mr. John Smith: Does the right hon. Gentleman agree that one of the reasons for a layered response within Europe—probably the most important one—is the variation in the military capability of NATO allies in Europe and the fact that some could not contribute to the extent that we did? The headline goals in the treaty will help those assets to be developed within NATO as well as within Europe.
  Mr. Ancram: I was with the hon. Gentleman until his last phrase, because that is precisely my argument about

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  flexibility. That is one reason why we believe that a flexible Europe is a stronger Europe, better placed to take on the enlargement that we all seek. The events of the past weeks have underlined the strength of flexibility, which is an asset that should not lightly be thrown away.
  Roger Casale: In the right hon. Gentleman's pursuit of greater flexibility within the European Union, is he limiting himself to opposing the treaty of Nice or would he, if he could, unpick previous treaties such as Amsterdam and Maastricht and even the Single European Act? Where does it stop?
  Mr. Ancram: We are dealing with the Nice treaty. However, we have made it clear throughout the debates on the Bill that we would have liked the Nice negotiations to be used to return certain powers to national Governments. That would be in the interests of a stronger Europe. People feel disconnected from what is happening in Europe, and I believe that that is one way to deal with that. I shall come to that in greater detail shortly.
  Mr. Robert Jackson: I hope that when my right hon. Friend does so he will explain why he thinks we should reject the Nice treaty on the basis that it does not provide us with sufficient flexibility, when in fact it makes provision for enhanced co-operation to be extended and developed.
  Mr. Ancram: If this were an à-la-carte Bill, we could pick the bits that we thought were better for Europe and say no to the rest. However, we cannot do that, as the Minister says—we have to take this lock, stock and barrel, and we happen not to like the stock and the barrel. That is why I will be asking my right hon. and hon. Friends to vote against the Bill tonight.
  Several hon. Members rose—
  Mr. Ancram: I would like to make some progress, but will give way later.
  Nice was, in our view, a missed opportunity. It was a chance to create greater flexibility, to give powers back to national Parliaments and to create a closer connection, through those Parliaments, between the institutions of Europe and the people of Europe.
  The debates on the Bill have all been conducted in the shadow of the Irish referendum. That referendum and its result cannot be ignored; it was symptomatic of people's feeling of alienation from Europe, which has been growing ever since the Maastricht treaty was signed. Nice was an opportunity to address that and find a way of reconnecting with people. The Minister said that that was one of his aims, but I do not believe that it has been achieved. It could have been a way of showing the disillusionment felt by so many at what they understandably see to be the immutability of European-made law, but the opportunity was missed.
  The Government went to Nice with no clear view of the Europe they were seeking ultimately to achieve. To put it bluntly, they were ill prepared. They indicated before they went that they would not give way on qualified majority voting and then promptly did so when they got there. Now they do not seem to be able to make up their mind as to whether the areas of QMV that they
  1184
  conceded are unimportant or essential to the future workings of the European Union. They appear to be trying to play this both ways but they cannot do so. The extension of QMV was a further move towards integration.
  The Government declared that they would not undermine NATO through the approval of the rapid reaction force, and then signed up to a report in the annexe to the treaty that clearly does so. They claimed that in approving the inclusion of the charter of fundamental rights as an annexe they would be doing more than agreeing its principles. Now there is every indication that they signed up to something very much more.
  Suffice it to say that, in each case, the Conservative party gave the Government due warning. They chose to ignore those warnings. Tonight we will try once more. The Bill seeks to ratify a treaty that failed to achieve the Government's objectives. It flies in the face of our vision of a flexible Europe, and it is increasingly integrationist.
  The strongest arguments made for Nice, which the Minister made again this afternoon, was that it enabled enlargement of the European Union to take place. Our opposition to it has been inaccurately described as anti-enlargement. I stress that nothing could be further from the truth. We are the long-standing and very committed supporters of enlargement. We were pursuing enlargement in 1990–11 years ago. We have always believed that the European Union should welcome the new democracies that emerged from behind the iron curtain at that time. That would not only bind them into the European family of democracies, but enhance the concept of the flexible Europe of nations of which we are a natural part and which has always been at the heart of our European policy.
  Throughout this process, therefore, we have made it clear that we remain strong supporters of enlargement and that we would accept immediately those aspects of Nice that relate to enlargement, such as Commission size, which has been mentioned, and vote re-weighting. That remains our position, but this legislation does not allow us to do so. It would ratify a treaty that contains much more to do with integration, which carries within it the disincentive to enlargement, and much less that is central to the enlargement that we seek.
  Roger Casale: If the treaty of Nice fell, what is the earliest date at which enlargement of the European Union could take place?
  Mr. Ancram: I will deal with the treaty of Nice, which is an important point in view of the Irish referendum. We have not had an answer from the Minister on that. We have been told again today that the treaty is necessary for enlargement. Until the Irish referendum, that was the firm position of the Government.
  The Labour party election manifesto claimed that
  "it is vital that we ratify the treaty of Nice which is essential to enlargement".
  Those were the two key words—vital and essential. Like so much of that manifesto, we now discover that that is at best a distortion of the truth and that Nice is not necessary for enlargement, as my hon. Friend the Member for Henley (Mr. Johnson) said.
  Dr. Stephen Ladyman: Will the right hon. Gentleman give way?
  Mr. Ancram: When I have finished this point.
  Since 7 June, with our general election out of the way and the Irish referendum results staring the Government in the eye, the European Commission has had to admit the truth. The hon. Member for Glasgow, Pollok (Mr. Davidson), who has now left the Chamber, questioned the Minister and quoted to him what President Romano Prodi told The Irish Times on 21 June:
  "Legally, ratification of the Nice Treaty is not necessary for enlargement".
  Indeed, my hon. Friend the Member for Henley also pointed out to the Minister that the Foreign Secretary told Parliament on the next day:
  "It is true that a treaty is necessary for enlargement; it is not true in a legal and technical sense that the Nice treaty is necessary for enlargement."
  He then said:
  "We would have to have an alternative treaty."—[Official Report, 22 June 2001; Vol. 370, c. 287.]
  He did not tell us at that stage that we would have to have a series of treaties, which the Minister sprang on us today. I suspect that if he checks with his advisers he will find that one treaty would secure the accession and enlargement that is necessary.
  There we have it. Nice is not and never was necessary for enlargement or capable of affecting it on its own.
  Mr. Doug Henderson: I understand the right hon. Gentleman's argument, but does he believe that the countries that are seeking to join an enlarged European Union will understand those arguments? Does he not see a risk that they might think that British Conservatives are more concerned with the minutiae and with their own interests than with building bridges with other countries in Europe? At this time, is that not a dangerous signal to send to other partners beyond Europe?
  Mr. Ancram: The hon. Gentleman will have to speak for his party and its relationships with those countries. We have been in contact with them and they understand our position. In many cases, they understand our concerns, which would affect them if they continued with their applications for accession.
  Dr. Ladyman rose—
  Mr. Ancram: I will give way in a moment. I keep on being asked what will happen about accession if the treaty is not ratified, but what will happen if the Irish continue to vote against ratification? At the time of the referendum, many people thought that that was the end of the treaty. That was not the line being taken by Commissioners in Europe or by the Government earlier. I want to hear a categorical answer from the Minister. If the Irish do not ratify the Nice treaty, is he saying that enlargement will be impossible, or that there are other ways of achieving it?
  Peter Hain: Legally, the treaty has to be ratified by all 15 member states, as the right hon. Gentleman very well knows.
  Mr. Ancram: I shall ask the question again. Is the Minister saying that if that treaty is not ratified by the
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  Irish, accession and enlargement cannot take place? That is a very straightforward question; I ask him to give me an answer.
  Peter Hain: I have already answered it. The answer is, in the terms of this treaty, yes. The treaty cannot proceed—enlargemen; cannot proceed—unless all member states endorse it. The right hon. Gentleman wants us to follow the same course: to put another roadblock in the way of enlargement. That is what he wants to do.
  Mr. Ancram: I want to get this clearly on the record, because the Minister is now saying that if the Irish continue to refuse to ratify the treaty of Nice, enlargement is finished. It is not what has been said previously, so it is interesting to hear it being said now. I give the Minister a chance to correct himself if he is wrong, but that is what he has put before the House today: that if the Irish continue to say no, enlargement is ended. Is that right? The Minister does not know.
  Mr. Robert Jackson Mr. Robert Jackson rose—
  Mr. Chris Bryant rose—
  Mr. Ancram: I give way to my hon. Friend the Member for Wantage (Mr. Jackson).
  Mr. Jackson: Does my right hon. Friend consider that the effect of a negative vote in the House on Third Reading would help or hinder the Irish people in deciding to ratify the Nice treaty and enable enlargement to take place?
  Mr. Ancram: I must say, with great friendliness to my hon. Friend, that I spent some time dealing with the Irish people, in Northern Ireland and in the south, and I learned very early on not to try to tell the Irish people what to do. I doubt whether they would listen, particularly to what is being said in the House. They will continue, as they always do, robustly to make up their own minds.
  Dr. Ladyman rose—
  Mr. Bryant rose—
  Mr. Ancram: I want to make progress; then I will give way.
  We need to take the argument further, because Nice failed to address the single biggest obstacle to enlargement: the unreformed common agricultural policy. The truth is that enlargement cannot succeed with the CAP as it stands, and I believe that the Minister would agree with that—he is nodding.
  Agriculture currently absorbs nearly 50 per cent. of the European budget—the Minister provided my hon. Friend the Member for West Suffolk (Mr. Spring) with an answer that says that the figure is just under 50 per cent. at the moment—but if Poland acceded, that figure would rise to 85 per cent. Therefore CAP reform must be a necessary precursor to enlargement, yet at Nice it was totally ignored. That treaty—that negotiation—which was to do with enlargement, did not deal with the single most important precursor to enlargement.

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  That precursor will continue to be ignored. The Minister talks about accession by 2004, but he should read what President Chirac said last week. He said, with an eye to his own domestic political requirements, that as far as he was concerned there would be no reform of the CAP until 2006. I should like to place on the record what he said, because we can speculate in the House, but we know that if there is no reform of the CAP, enlargement is in danger to a far greater degree than anything that my hon. Friend the Member for Wantage has suggested.
  President Chirac said:
  "On this plan, I would like to say first of all that, because it is an important point, and because it is not bad that the world should know the clearly expressed position of the French authorities, we are absolutely opposed, and we will do everything to oppose, a re-opening of the agreement of Berlin, that is to say a redefinition, a reform of the common agricultural policy before 2006."
  Effectively, he is saying—this is another challenge to the Minister—that the precursor to enlargement will not occur because the French will not allow it to happen. What is the Minister's answer then, in terms of enlargement? How does he deal with that?
  Peter Hain: The answer, for the record, is that common agricultural policy reform is not necessary for enlargement. It is not necessary: it is desirable. It is not technically necessary, however. In any case, the treaty does not deal with common agricultural policy reform. [HON. MEMBERS: "Exactly."] Exactly so. That is being proceeded with on a separate road; it has already started, as a result of the British initiative, and will continue. There is, as the right hon. Gentleman well knows, an agricultural chapter, which must be negotiated, state by state, in order for the accession of each of those states to be ratified, and that is one of the next sections of the enlargement process down the road.
  Mr. Ancram: Although I am new to this particular legislation, I am again astounded by the Minister's attitude. Is he really suggesting that the common agricultural policy does not matter as far as enlargement is concerned? How will an enlarged Community or Union pay for itself without a reformed common agricultural policy? Is he suggesting—
  Mr. Robert Jackson rose—
  Mr. Ancram: I will allow my hon. Friend to help the Minister in a moment, but I should like to ask the Minister the question first. Is he seriously suggesting that we could have an enlarged Community or Union of the sort that we are talking about without a reform of the common agricultural policy, and believe that it would work?
  Peter Hain: I have given the answer to the right hon. Gentleman on several occasions. The treaty does not include reform of the CAP. Legally under the treaty, agricultural reform is not necessary for those countries to ratify the treaty to enable their accession and, therefore, for enlargement to occur. Has he understood that point?
  Mr. Ancram indicated assent.
  Peter Hain: As I have already said, of course, such reform is desirable. That is why we have already started a process of reform—it began in 1999, and it will
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  continue. In the meantime, 10 of the 12 applicants have already opened the chapter on agriculture, and those negotiations will proceed.
  Mr. Ancram: The right hon. Gentleman gives us the answer that reform is not legally necessary, but only about half an hour ago he said that his view of Europe was a practical one. How will an enlarged EU be paid for without reforming the CAP? He should take further advice from his officials on that point because, once again, he is in danger of misleading the House. I shall now give way to my hon. Friend the Member for Wantage; I promised him that I would.
  Mr. Robert Jackson: My right hon. Friend is a true friend of enlargement—indeed, I agree with that point of view—but it seems absolutely clear to me, and I hope that this will commend itself on reflection to my right hon. Friend, that to put the agriculture issue on the table before enlargement would effectively prevent enlargement from happening, because to do so would call forth vetoes from all the member states that have a great stake in the existing structure of the CAP. The significance of 2006 is that it is the year in which it has been agreed that negotiations will take place on whether to increase the own-resources ceiling. That is a point at which we could exercise our veto to enable reform of the CAP to take place.
  Mr. Ancram: To return to the racehorse analogy with which I started, at some risk, my hon. Friend may be dealing with carts and horses, rather than with two things that have to run alongside each other. I am asking the Minister an important question: without having done the work on reform of the CAP, how can he know that it will slot in at the time of accession; and can he actually say that the EU will be financed? That is very difficult to answer in the affirmative, and he has not sought to do so.
  Dr. Ladyman: I should like to deal with the other side of the coin. If we were to take the right hon. Gentleman's argument to its logical conclusion—throwing out the Nice treaty and achieving enlargement by different means, thereby delaying it until 2006—the cost to British non-agricultural business would be nearly £4 billion, according to the figures that he has accepted as representing the benefit of enlargement. Is he prepared to pay that price?
  Mr. Ancram: I have never said that I want to delay enlargement until 2006. I was saying that one of the great co-operative leaders in the EU—one of the partners—has said that he is not prepared to change the CAP until 2006. So the hon. Gentleman's question is better addressed to him than to us. We have made it clear throughout that it is taking far too long for enlargement to happen. We want it to happen as quickly as possible; we are not the obstructionists. We will not be led down the path to further political integration behind the smokescreen that has been raised about enlargement.
  I am happy to admit that we do not support further political integration. Indeed, we believe that it will only further alienate people from the institutions and processes of the EU. We have long made clear our view that further political integration will create a one-size-fits-all Europe, which would seriously undermine the basis for the

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  sustainable, prosperous and harmonious Europe, in all its diversity, that is our aim. In pursuit of that, we would want some powers to be returned to national Parliaments, where the national interests can be most effectively pursued. That does not mean that we are anti-European, as our opponents like to suggest.
  I had an Italian grandmother; I am by blood a European, but my belief in Europe is one of a Europe of nations, which are happy to be part of Europe so long as we retain our basic national rights of self-determination. The simple fact is that political integration is the enemy of an enduring community of nation states. It cannot be argued that the treaty of Nice was not integrationist. It includes several integrationist measures, including the extension of qualified majority voting, to which I have already referred.
  Mr. Bill Rammell rose—
  Mr. Mark Hendrick: Will the right hon. Gentleman give way?
  Mr. Ancram: I shall make some progress; I have given way often.
  Extended QMV will make it even more difficult for our Government to block measures that are not in our national interest, and we should never forget that that is what we are all elected by our constituents to the House to serve. We have consistently opposed the extension of QMV for many years. We did so in our 1997 manifesto, and we continue to oppose it now.
  This is part of the salami-slicing tactics by which integration proceeds and national self-determination is diminished. We believe that the salami has been sliced through quite far enough.
  Yet alongside the treaty in the annexe lie two further integrationist initiatives. First, I shall deal with the charter on fundamental rights. The European Commissioner for Justice and Home Affairs, Antonio Vitorino, said in Lisbon on 13 May 2000:
  "The Charter will mark a definitive change in the Community which will move it away from the essentially economic raison d'être of its origins to become a full political union."
  That is what the Commissioner believes; we could not have put it better ourselves.
  The Government may seek to belittle the importance of the charter and I am sure that they will insist that they will block its incorporation in 2004. We shall have to wait and see, but the fact that it is integrationist cannot be doubted. In its extradition measures, it would increase the chances of interference in the ability of a democratically accountable British Government and politically accountable Ministers to act against threats. Instead, it would put decisions in the hands of unaccountable European judges. It would operate alongside the European Court of Justice, thus creating two sets of integrationist judges. Even unincorporated, it would undoubtedly affect the judgments of the court, which will seek inspiration from it as it does from other fundamental rights instruments.
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  The Commission's report on the legal nature of the charter of fundamental rights of the European Union was published on 18 October 2000. It states:
  "It can reasonably be expected that the Charter will become mandatory through the Court's interpretation of it as belonging to the general principles of European Law".
  As a Scottish lawyer. I look to the right hon. and learned Member for North-East Fife (Mr. Campbell), who also shares the distinction of being qualified in the Scottish law. Like me, he will remember the strengthened force of principles in the Scottish law, which, after all, is part of the European tradition. When the report uses the word "principles", I believe that they have special significance.
  Mr. Wayne David: Surely much of what the right hon. Gentleman said about the charter is redundant because, as the Government have made clear and as is clear in the treaty, it is a political declaration.
  Mr. Ancram: I do not think that the hon. Gentleman has listened to what I and the Commission have said. The courts will take inspiration from the charter in the way that they take inspiration from other fundamental rights instruments. The courts, in their interpretation, will ensure that what is in the charter will, in practice, become law. The charter is integrationist and interventionist.
  The second initiative is the report on European security and defence policy, which discuses how the rapid reaction force will relate to NATO. I will leave the more detailed analysis of that to my hon. Friend the Member for West Suffolk, who will wind up for the Opposition. However, although we have long supported the concept of pan-European defence co-operation in pursuit of the Petersberg tasks, we have firmly registered our opposition to the proposed rapid reaction force and we will continue to do so.
  If ever the importance of NATO, and of our relations with the USA within it, has been clearly demonstrated, it is now. We must do nothing that would undermine the value of those relations within NATO. However, the rapid reaction force would endanger those relationships at this time.
  Ms Gisela Stuart: I share some of the right hon. Gentleman's concerns, but members of the Foreign Affairs Committee have just returned from a two-day trip to meet representatives of the Belgian presidency, and we talked to members of NATO yesterday. No one there sees any threat at all. Can he substantiate his fears when even NATO does not have them?
  Mr. Ancram: We must consider not just the present but the future of such a proposal. Essentially, what is being proposed are the beginnings of a European army. The proposal already envisages a command, logistics and planning structure independent of NATO and the ability to act without the approval of NATO. That would undermine the relationship that I have mentioned.
  Mr. John Smith rose—
  Mrs. Browning rose—
  Mr. Ancram: I shall give way for the last time to my hon. Friend.
  Mrs. Browning: Is not the real problem the fact that the Prime Minister has persuaded the United States that

  1191
  the proposal is totally benign in terms of NATO's command and control and planning? General Jean-Pierre Kelche, the French chief of staff, has said clearly that the annexe of the presidency report was deliberately worded to rule out any interpretation that would give NATO a decision-making priority. Is it not the case that the Prime Minister has spun the Americans a line that does not reflect what is in the treaty?
  Mr. Ancram: I am grateful to my hon. Friend for reminding me of that. My point, which is important, is that we have to deal with realities, and the reality is to be found in the document to which she refers. It makes it clear that the dangers of the rapid reaction force undermining relationships within NATO are considerable. We must take that into account.
  Third Reading is not the time to consider at length the future of Europe and the lead-up to the intergovernmental conference in 2004, but the Bill and the Nice treaty prompt certain questions about it. It is our strong belief that the integrationist agenda is the wrong approach for a diverse, enlarged Europe. Indeed, it is precisely that approach that has slowed down enlargement.
  We will issue positive and constrictive proposals for the IGC and reject the old-fashioned bloc mentality within which the Government are fixed. Through the concept of a flexible Europe, we will pursue a Europe of deregulation and decentralisation and seek a Europe that will be best placed to prosper in an increasingly globalised world. We will challenge the Government to produce their own positive vision, to which the Minister referred but on which he did not enlarge. I reiterate the challenge that if the Nice treaty is ratified, a While Paper should be published on its effects.
  In the aftermath of the Irish referendum, we will oppose the Bill. The time has come to stop being driven by officials in Brussels and to start listening to the people of Europe again. They want enlargement; so do we. They want decision making closer to them; so do we. They want a Europe that is relevant to their needs; so do we. What is important is that there is still time to achieve that, which is why I invite the House to join us in voting against Third Reading.
  4.36 pm
  Denzil Davies: My right hon. Friend the Minister dealt mainly with enlargement, and I do not criticism him for that. The Bill is, technically, the vehicle by which the provisions of the treaty of Nice will be incorporated into UK domestic law. Like most European treaties that we sometimes debate, the Nice treaty continues and accelerates the process of European integration and the transfer of power from the democracy of the House to the central institutions of the European Union.
  Perhaps the Nice treaty is not as extensive as the treaty of Maastricht or the treaty of Amsterdam, but it continues the process that, over the past 30 years, has gradually denuded the democratic powers of all EU member states. We should not be surprised by that because that is what ever closer union means. The EU's powers are not conjured out of the ether somewhere in the sky; they come from the powers of the democratic member states of that union.
  1192
  If we consider the treaties, as European institutions and their staff sometimes do, the main loser is usually the House. The winner in this case is the European Parliament. The treaty of Nice gives it the power of veto, which adds insult to injury. As I mentioned to the Minister when the Bill was debated in Committee, the European Parliament is to be given the power of veto on some decisions that are made by the Council of Ministers. Although the power is not referred to as a veto—it is not the right type of word—"co-decision" is mentioned. We would be happy to have co-decision-making powers with the Council of Ministers, but the treaty removes those powers from the Government and the House.
  Mr. David: Co-decision-making is not new. There is a modest extension of that power, but it has been in existence for a long time.
  Denzil Davies: I did not say that it had not; I am merely relating my remarks to the treaty. My hon. Friend knows that it grants powers of veto to the European Parliament. It also removes powers of veto from this Parliament and affects the way in which the Government cast their votes in the Council of Ministers. The European Parliament gains powers of veto while this House loses powers of veto. The European Court of Justice does well out of the treaty, as does the Council of Ministers, in its newer form as a collegiate or collective body. Perhaps I can return to that point in a few minutes.
  The national veto will be taken away in about 30 policy areas. As I argued in previous debates, the reason for the veto— or the unanimity rule, to give it another name—in many international and supranational bodies is to protect the democracy of the nation state. It is there to bridge the gap between decisions taken, more and more globally, in not only the European Union but other supranational bodies. However, that gap seems to be getting wider, which is a matter for real concern.
  Mr. Bryant: Will my right hon. Friend give way?
  Denzil Davies: I will finish my argument.
  The veto exists to bridge the gap between decisions taken globally, internationally or supranationally and the needs and requirements of accountability and local and national democracy. That is why most international or supranational institutions require the unanimity rule. In these days, when that gap is getting wider, surely it is a retrograde step to try to do away with the rule of unanimity.
  Mr. Bryant: As far as I understand the matter, my right hon. Friend poses two philosophical opposites that are not in fact opposites at all. He says that the rule of unanimity must be preserved, but that unanimity is anti-democratic because it means that only a few can determine the arrangements for everybody, whereas democracy has always preserved the rights of the majority, pure and simple.
  Denzil Davies: My argument is that when a nation state is represented in a supranational body, the rule of unanimity generally applies. I was merely saying that the reason for that is to keep a link between the democracy of the
  nation state and decisions taken globally that may

  1193
  be in the interests of more than one country. That is why it is preferable that there should be a rule of unanimity in those cases.
  The veto is, frankly, incompatible with the European goal of ever closer union. The veto has to go, because ever closer union can be achieved and advanced ultimately only at the expense of the democracy of the nation state. In the 30 or so policy areas in which the veto will disappear, the British electorate may in future have laws imposed on them that have been passed by the votes of Governments whom they have not elected. The votes of the British Government, whom they have elected, will be overruled by the votes of Governments whom they have not elected and, in some cases, by the votes of Governments whom they would perhaps never elect. I do not want to follow my hon. Friend the Member for Ilford, South (Mike Gapes), who made some remarks about Mr. Berlusconi. However, the democratically elected Governments of other countries may one day be able to pass laws for the electorate of Britain who have not elected those Governments.
  I do not know whether any Scottish lawyers are present who could tell us whether that is a novel constitutional principle. I do not remember it being in Dicey's "Law of the Constitution" when I read it many years ago. It may have happened before, but it seems to me to be a change. If we do away with the veto and move towards qualified majority voting, Governments who have not been elected by the British people may pass laws for the British people.
  Mr. Hendrick: I thank my right hon. Friend for giving way when he was about to finish speaking. He made the point that the European Parliament was gaining powers of co-decision or, in his terms, veto, and was making decisions. He says that Governments of other nations are making European laws. Does he accept that the European Parliament is directly elected by the peoples of Europe, and that if they have a part in that decision making it is not purely and simply other Governments who are passing those laws?
  Denzil Davies: Of course the European Parliament sometimes agrees laws for the whole of Europe, but I was referring to the nation state and the democracy of our nation state. If a proposition is made in the Council of Ministers and is carried by the votes of Governments other than the British Government, who vote against the proposition, and a law is made as a result of that vote, that law will be imposed on the British electorate, who will not have elected the people who actually passed that law. I do not know whether that is a novel constitutional principle; perhaps we can return to that issue at another time.
  I do not know where it will lead us, but I consider it ironic that when the veto is abolished, power shifts in a curious way from the nation state to the Council of Ministers. The Council of Ministers was always intended to be the body that represented the democracy of the nation state, but over the past few years it has become a sort of collective or collegiate body. The other institutions of the European Union have criticised the development of the Council of Ministers into a collegiate body with a personality of its own. That has been revealed in the
  1194
  attempts to bypass other institutions in the so-called pillars—the second and third pillars affected by the Maastricht and Amsterdam treaties.
  I think that the motives behind that development were good: Ministers and Governments felt that there was a democratic deficit in the EU and they wanted to redress that in some way, by increasing the powers, profile and bureaucracy of the Council of Ministers. However, in doing so they have made it into a collegiate body with a personality of its own.
  Every time the veto is taken away and replaced with qualified majority voting, the Council of Ministers is backed further into the position of being unable to defend the democracy of the member state. Ultimately, even within the Council of Ministers, the veto is not compatible with current developments, because it cannot be allowed in a union in which constant progress has to be made towards an ever closer union.
  We are told that the veto is to go in 30 policy areas. The Government argue that its loss does not matter in some cases because the policy areas involved are trivial, and in other cases it is not in the national interest to keep the veto. I have three points to make about that.
  First, many of the areas so affected are not trivial. We discussed that in the Committee of the whole House, but I shall list some of those areas now. The rules on EU structural funds are not a trivial matter, nor is economic and social cohesion outside the structural funds. Implementation of agreed foreign policy, joint actions and common positions is not a trivial matter, nor is trade in services or intellectual property rights. The issue of who is to negotiate for the Community with, for example, the World Trade Organisation, is not trivial. The appointment of the head of foreign policy—its supremo—is not a trivial matter, nor is external representation of economic and monetary union. The implementation of rules on visas, issues relating to asylum, refugees and illegal immigration, and measures of co-operation in justice and home affairs are not trivial matters.
  Secondly, even if those matters are currently perceived to be trivial, or even if worrying too much about the veto is not currently perceived to be in the national interest, circumstances change. Let me give an example. During debate on the Maastricht treaty, some of us tried to discuss whether it was possible for a member state, once it had subscribed to monetary union and signed up to the single currency, to finance a war. Those who spent a lot of time on the treaty will remember that it prohibits the printing of money, or words to that effect. In future, the situation may change. In the case of the Maastricht treaty, would this country not be able to finance a war if other countries in the monetary union did not wish to participate in it? That is one factor. Circumstances change, and policy areas that the Minister and the Government dismiss as trivial or not in the national interest could change. Once the power of the veto is entrenched in the acquis communautaire, that is the end of the matter; it cannot be retrieved or changed. However, states will come back and ask for more—next time, it will be taxation, social security or defence. The veto is not compatible with ever closer union.
  The veto is also done away with in the proposal for enhanced co-operation. The French have a much better phrase for enhanced co-operation, which they translate as the "avant-garde". It was established by the Amsterdam

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  treaty, which proposed that countries outside the potential inner core should have a veto. However, that did not satisfy France and Germany, which wanted to go ahead and establish the avant-garde, so, after only a few years, the veto on enhanced co-operation has gone and, subject to the conditions of the treaty, several countries can now go ahead.
  The avant-garde policy has been well described by European statesmen. Mr. Fischer, the German Foreign Minister, gave a speech on 12 May 2000 at Humboldt university in Berlin, in which he said:
  "The last step will then be the completion of integration in a European Federation … such a group of States"—
  I assume that Mr. Fischer was referring to the avant-garde—
  "would conclude a new European framework treaty, the nucleus of the constitution of the Federation. On the basis of this treaty, the Federation would develop its own institutions, establish a government which, within the EU, should speak with one voice."
  A month later, Jacques Delors put it much more concisely, as one would expect. On 17 June, he told a French newspaper:
  "We will have to create an avant-garde … We could have a union for the enlarged Europe and a Federation on for the avant-garde."
  That is what will happen; that will be the result of losing the veto even on the establishment of enhanced co-operation.
  Mr. Robert Jackson: With reference to the debate sparked off by Foreign Minister Fischer's remarks, will the right hon. Gentleman tell the House about the letter that Mr. Fischer received from the French Foreign Minister explaining precisely why his proposals for a federal Europe were mistaken?
  Denzil Davies: I am not party to Mr. Fischer's correspondence—I was merely quoting from an interesting and open speech. At least he was honest, which is more than can be said, unfortunately, for many British politicians in relation to the EU. Mr. Fischer's interesting views may not have been German Government policy, but, as I tried to show, they were echoed by Jacques Delors, a distinguished President of the Commission and a clear thinker.
  The pressure is now on. The veto has gone. The pressure will be, in Jacques Delors's words, to create a federation of the avant-garde. Given the enthusiasm of my right hon. Friend the Prime Minister for such matters, Britain will have to be part of that, will it not?
  I am sure that my right hon. Friend the Minister will be in there with the Foreign Office, punching our weight, or punching above our weight—I am not sure; I stand to be corrected. Punching above our weight all the time must get a little tiring. We will certainly be in there, punching our weight as part of the federation of the avant-garde. That will mean more integration still.
  The train rolls on, discarding national vetoes and national democracies as it goes along. The next pressure will come from joining the inner core. As my right hon. Friend the Minister said, the Government will easily win the vote this evening, but before the ink is dry on the Royal Assent, work will begin—it probably has begun—on the next treaty. Happily or unhappily, before 2004 we will be debating the next legislation incorporating the
  1196
  treaty of 2004 into the law of the United Kingdom. That will be an integrationist treaty, like the present treaty and most past treaties.
  Dr. Ladyman: Will my right hon. Friend give way?
  Denzil Davies: No, I am coming to an end.
  Perhaps before long the member states of Europe will call a halt to the process, but they had better do it soon. If not, there will not be much left to halt.
  4.56 pm
  Mr. Menzies Campbell: I do not propose to delay the House over-long, as I confess that I do not have anything very new to say about the Bill. As some of the contributions so far have suggested, albeit that they were couched in elegant and even intellectual language, there is not much more to be said by many others, either. The speech of the shadow Foreign Secretary echoed some of the elegant contributions made by the hon. Member for West Suffolk (Mr. Spring) during the various stages of the Bill's progress.
  As we know, we are having the Third Reading today, after the summer recess, although it could quite easily have been held before the summer recess. However, an internal decision had to be taken in the Conservative party, and there were those who thought that the nature of that decision might determine their attitude this evening. That, as we now know, is not the case.
  So far in the debate, we have traversed some pretty old ground. We heard from the shadow Foreign Secretary—who is no longer in his place, but who explained to me that he had another pressing engagement—that he had an Italian grandmother, which made him European. Well, I have a Glaswegian grandmother, which still makes me European. We should recognise that our Europeanism is determined not by the exotic nature of our relations, but rather by the fact that we are firmly embedded in the European tradition. In particular, the Scots law to which the right hon. Gentleman referred is, of course, a European legal system based on Roman Dutch law. Large parts of our life are firmly embedded in Europe, and the sooner we recognise that, the better.
  The shadow Foreign Secretary was at pains to suggest that President Bush, whose perspicacity, maturity and sound common sense have been generally commended in the House in recent debates, had somehow been the subject of an exercise in duplicity by the Prime Minister of the United Kingdom. The right hon. Gentleman cannot have it both ways: President George W. Bush cannot be a great leader and at the same time a dupe of the British Prime Minister. The two are wholly incompatible. As was pointed out in an intervention, at NATO, where one might think that there would be real anxiety about anything that might undermine its effectiveness, there is no such apprehension as has now and previously been expressed from the Conservative Benches.
  I should like to make one point about the rapid reaction force, returning to comments that I addressed to the Minister following an intervention by the hon. Member for Vale of Glamorgan (Mr. Smith). If we have a poor rapid reaction force, and the headline goals are not achieved and capability does not become an important part of what is done, we will damage NATO. A successful rapid reaction force will most certainly strengthen NATO.

  1197
  I suspect that many hon. Members share my anxiety that there does not seem yet to be sufficient commitment to providing financial support to ensure the military capability that will be necessary if we are to achieve either the levels required by the headline goals of the rapid reaction force, or those that are likely to be imposed on us—some might say that this point is more persuasive—by the defence capabilities initiative of NATO, which are higher than those of the rapid reaction force. That is why I was at some pains to suggest to the Minister that he should not be seduced by the intervention of the hon. Member for Vale of Glamorgan.
  Mr. Richard Spring: On the right hon. and learned Gentleman's earlier point, may I briefly defend my right hon. Friend the Member for Devizes (Mr. Ancram) in his absence? He pointed out reports that President Bush had said that Mr. Blair had assured him that the European defence effort
  "would in no way undermine NATO … that there would be joint command"
  and
  "that the planning would take place within NATO".
  The fact is, however, that the report that is attached to the Nice treaty says exactly the opposite.
  Mr. Campbell: We know that things have moved on since then. As I understand it, there is now general acceptance that operational and strategic planning responsibilities must remain within NATO. It would make no sense to duplicate them. I have frequently referred in the House to NATO's right of first refusal, which is, as I understand matters, generally accepted. It is important to reflect in our discussion the fact that debate outside has moved on.
  Mr. Chidgey: I should like to reinforce the points that my right hon. and learned Friend makes. The messages are coming loud, clear and strong from Brussels and the people who make these decisions that NATO will have first refusal and that planning, strategic and contingency elements will remain with it. That is the situation and it is agreed. Does he agree that the issue that must be addressed is the shortfall in capability in respect of NATO and the rapid reaction force, which is clear in the light of current circumstances?
  Mr. Campbell: I do not think that anyone doubts the validity of my hon. Friend's second point. His first point—I think that he has recently returned from Brussels—corroborates my own.
  Mr. John Smith: I entirely agree with what the right hon. and learned Gentleman has said. I did not intend to seduce my right hon. Friend the Minister at all—far from it. I agree that the bottom line in this debate is military capability. Does the right hon. and learned Gentleman agree that, following the events of 11 September, the likelihood of generating the political will among our NATO allies in Europe to develop such capability could be much greater?
  Mr. Campbell: I certainly hope so. I make no bones about the fact that I lost the argument in my party to
  1198
  propose in the shadow Budget that the Liberal Democrats produced for the last election a real-terms increase in defence expenditure. However, the current Secretary of State for Defence lost the same argument. Indeed, so did the shadow Secretary of State for Defence. All three of us lost the argument, but the events of 11 September should now persuade others that it must be taken up. If we are serious about some of the intentions that the Prime Minister outlined in the far-ranging speech that he made at his party conference, we must be aware that they cannot be achieved with existing resources.
  We are considering a framework treaty—an expression used by the Minister Throughout the Bill's passage, we have consistently argued that the legislation should be enacted and the treaty ratified as soon as possible. Without the reforms that the treaty sets out in relation to the size and shape of the Commission, the weighting of votes in the Council of Ministers and modest extensions of qualified majority voting, it is difficult to envisage a European Union, perhaps comprising as many as 28 states, that could efficiently and effectively come to agreement.
  Although it is technically true that the European Union could be enlarged without the treaty, it is difficult to envisage the timetable for that enlargement. I should not like to be the British Minister who went to Poland, Hungary and the Czech Republic and said, "By the way, we're not going to ratify the Nice treaty. We've got an alternative set of arrangements, including an instant IGC, which we may be able to conjure up", like a magician at a children's Christmas party. I should not like to try to answer the subsequent question: "When do you think we might gain admission? What is your target date in these new circumstances?"
  We already have a target date, and I hope that we meet it. Such dates sometimes slip, but the advantage of a target is that it gives people something at which to aim. The notion that we could find an alternative way of dealing with the alterations that are fundamental to enlargement does not stand up to scrutiny. If we enlarge the European Union under current circumstances, every country would have two Commissioners, and a minority of the population could overrule the majority. Decision making would become sclerotic, and it would not be long before the EU became unmanageable.
  There is an interesting philosophical underpinning to the debate. I am sorry that the new shadow Attorney-General is not present because he is always an adornment to such discussions. He produced a pamphlet earlier this year. It was not set—although it may have been typeset—in stone. He argued—I thought rather persuasively—that although he supported a Community, he opposed a European Union. That fault line runs through the Conservative and Unionist party. Some distinguished Conservative Members—for example, the hon. Member for Wantage (Mr. Jackson)—favour a Union. However, the mood in the Conservative party has moved back towards a Community.
  It is difficult to envisage the current Conservative party supporting the Single European Act and consenting to its being driven through the House of Commons on a three-line Whip. It is difficult to envisage it supporting the Maastricht Bill; indeed, the current Conservative leader was diametrically opposed to it. The fault line shows a change of view. I believe that Keynes said, "When the facts change, I change my opinion." A change

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  of opinion has undoubtedly occurred in the Conservative party. Its members no longer accept the notion of a Union and many would be content with that of a Community. Some of us perceive that as rather contradictory when compared with positions that they held only a few years ago.
  The right hon. Member for Devizes (Mr. Ancram) did not mention holding a referendum on the treaty, although that appeared to be Conservative party policy for a long time. A referendum should never be used simply as an act of party politics; it should be held when a genuine constitutional issue is at stake. Such issues are not at stake in the Bill. It would be different if we sought to join the single European currency. In that case economic, political and constitutional issues remain to be determined. We should not therefore join the single currency without the endorsement of the people of the United Kingdom.
  Mr. Nicholas Winterton: Does the right hon. and learned Gentleman have a view about when the country should be allowed to decide whether we want to join an integrated, federal Europe? He appears to say that the treaties of Amsterdam, Maastricht and Nice do not require a referendum. Does he agree that the combination of the three treaties would constitute a good ground for a referendum? There is currently a drip, drip, drip or ratchet syndrome that will ultimately deprive people of choice.
  Mr. Campbell: That is an apocalyptic view. It assumes that these developments are always against our interests and always will be.
  Mr. Winterton: They are.
  Mr. Campbell: The hon. Gentleman may think that, but the vast majority of the people of the United Kingdom are not similarly minded.
  Mr. Winterton: They have not had a chance to be.
  Mr. Campbell: The hon. Gentleman is making sedentary remarks. If he wants to intervene again, I will certainly allow him to do so.
  Mr. Winterton: I am grateful to the right hon. and learned Gentleman. Will he tell me, and the House, when the people have had a real chance to talk about the federal Europe into which we are steadily marching, day by day? The only issue on which the right hon. and learned Gentleman says we should have a referendum is the single currency. Is there not more to a federal Europe than a single currency?
  Mr. Campbell: There is more to a federal Europe, as the hon. Gentleman defines it, than a single currency. If, for example, it was proposed that the decision to deploy British forces should be made in Brussels rather than here in the Chamber, that would certainly be an issue of fundamental constitutional importance that should be put to the British people.
  When we had our debates about chinks of light, blank cheques and all the rest of it, I was at some pains to point out that the decision about the deployment of British troops should rest here, because it was our responsibility
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  to answer to our constituents if we wanted to send their sons and daughters into situations in which they might lose their lives. I do not support that; but that is the kind of issue that I would regard as being of sufficiently fundamental constitutional importance to require a referendum.
  Mr. Robert Jackson: Perhaps the right hon. and learned Gentleman would like to point out to my hon. Friend the Member for Macclesfield (Mr. Winterton) that the case he put was argued extensively during the last general election, with not particularly desirable effects from the point of view of our party.
  Mr. Campbell: I hesitate to suggest that the hon. Gentleman might find it easier to put that point directly to his hon. Friend.
  I do not believe that this is a fundamental constitutional change. The right hon. Member for Devizes referred to the, I think, 30 or 31 treaty articles. Four relate to areas in which the United Kingdom has opted out; 17 refer to portions of treaties dealing with appointments to, rules of procedure of and the human resources management of the European Parliament, its Committees and its Courts; and the other 10 extensions of qualified majority voting relate to such matters as anti-discrimination practice, priorities for structural funds and environmental measures. I do not consider those matters to be of fundamental constitutional importance.
  There are occasions when qualified majority voting is actually in our interests. There are areas in which we should seek to extend it, not least the liberalisation of transport throughout the European Union. That would be entirely in our interests. We should approach each proposal on its merits, asking how it best serves our national interests. We should not approach them assuming that any extension of any kind is to be resisted because it is part of some drip, drip, drip or ratcheting up of the process.
  The shadow Foreign Secretary suggested that there would be some inhibition on military action if there were a more fully formed common foreign and security policy. I have some difficulty grasping that point. I see nothing in any of the arrangements, actual or prospective, that would prevent the United Kingdom from saying, in particular circumstances, "We choose, because it is in our own interests, to ally ourselves with the United States"—or, if a more historical parallel is desired, "We choose, because it is in our own interests, to expel the Argentinians from the Falklands."
  There is no inhibition in the idea of a more integrated foreign and security policy. One might argue, indeed, that if any such inhibition exists it is to be found in the NATO treaty, which, in article 5, creates an obligation to go to the assistance of any other country that is attacked on the basis that an attack on one is conceived of as an attack on another. That is a giving up—a pooling, if you like—of sovereignty. It has never affected us, and indeed there are those—in virtually all parts of the House, I believe—who would argue that it has been entirely to our advantage, not least given that the article 5 decision made just a few weeks ago by NATO demonstrated the strength of the alliance.

  1201
  It is also interesting that the queue for NATO membership, particularly by those countries that were formerly Warsaw pact members, is as long as, if not longer than, the queue of countries wanting to join the European Union.
  Ms Stuart: Let us extend the right hon. and learned Gentleman's analogy of the NATO commitment. Although it is clear how to invoke article 5, it is not clear how long that article will remain open. The potential member states that are queueing up in much larger numbers to join NATO rather than the EU will become part of that existing obligation. As far as we can see, however, that obligation has been no deterrent.
  Mr. Campbell: I accept that. The use of the word "deterrent", which the hon. Lady has introduced to the debate, points to the fact that NATO is an alliance that is based on nuclear weapons. New members are therefore signing up not only to an article 5 obligation but to an alliance that still as a fundamental part of its policy and doctrine has a reliance on nuclear weapons. If there were anxieties, one would expect them to be produced not only in relation to the responsibility to go to the aid of all other members, but in relation to the issue of the nuclear deterrent.
  I think that the right hon. Member for Llanelli (Denzil Davies) said words to the effect that this treaty is not the end. I hope that we shall shortly have from the Government a White Paper setting out their views on precisely what will happen and what position they will take at the 2004 intergovernmental conference. A White Paper on the future of Europe has been over-long delayed, and I think that we are entitled to expect the Government to produce a coherent vision for that.
  Other Liberal Democrat Members and I believe that it is right to argue for a proper constitutional basis for the European Union, to establish clearly and unequivocally the nature of the powers and responsibilities of the European Union itself and of constituent Governments, and to establish the rights of individual citizens. I believe that setting out those points in the proper constitutional framework would go a very long way towards making the people of Europe understand more clearly the nature of the European Union.
  Mr. Robert Jackson: Does the right hon. and learned Gentleman agree that one of the desirable features, as a Government objective, of such a White Paper and eventually also of such a treaty would be to drop the phrase "ever closer union", which is in the preface to the Rome treaty and certainly produces damaging reactions of the type expressed by the hon. Member for Macclesfield?
  Mr. Nicholas Winterton: I had hoped that I was an hon. Friend—[Interruption.]
  Mr. Campbell: I think that one or both hon. Gentlemen are about to invoke an article 5 declaration.
  Mr. Jackson: My hon. Friend may not have noticed that I was trying to hold out to him an olive branch.
  Mr. Winterton: It was very well hidden.
  Mr. Campbell: I have not often felt superfluous in the Chamber, but I am at risk of feeling so on this occasion. Perhaps it is time that Conservative Members established a working party on the future of Europe.
  As the hon. Member for Wantage said, the disadvantage of the phrase "ever closer union" is its ambiguity. It means what anyone wants it to mean. That is why it is all the more necessary to have a constitutional framework for the European Union. If one wants, for example, to find where particular provisions lie, one has to consult a whole series of treaties. Measures may have been altered in some way, but that is never clear immediately on first reading. Some type of codification, as well as a careful delineation of the rights and responsibilities of the various levels of the European Union itself and of the Commission and the Council of Ministers, and delineation of the rights and responsibilities of individual citizens, would seem to offer a way forward out or the anxiety, which I do not believe is well founded, that we are engaged in a process of ratcheting up or of drip, drip, drip.
  Several hon. Members rose—
  Mr. Chidgey: Will my right hon. and learned Friend give way?
  Mr. Campbell: No. I should like, if I may, to make some progress.
  The Government have been defective in one respect—the European single currency. I have no doubt that if that argument is to be won—it is in Britain's interests to be part of that currency, subject to the economic conditions at the time of joining being propitious—it cannot be left until the point at which the Chancellor of the Exchequer produces his tablets of stone and makes a statement to the effect that the five economic conditions, which are essentially political in character, have been met. The wind blows in various directions. For example, the Minister emerges as an apparent enthusiast for the single currency, but then someone in a different Department draws back. The country is entitled to look to the Government for a coherent and consistent view on the single currency, and if the Government wish their view to triumph they must accept that the argument must be made now.
  Mr. Spring: The right hon. and learned Gentleman called—correctly, in my view—for a White Paper leading up to the intergovernmental conference. In view of the extraordinary movement in statements from the Government on the single currency, does he agree that it would be appropriate to have a White Paper that set out all the considerations—economic, political and constitutional—on the single currency? I hope that he would support that.
  Mr. Campbell: I certainly would support that proposal. One can hardly argue, as I have, that this is a matter of economic, political and constitutional importance without accepting the need for a proper statement of the Government's position, and the best way to enshrine that is in the form of a White Paper. The debate on the single currency should start, and as soon as possible.
  I said that I thought there had been a change of mood in the Conservative party, for the reasons I mentioned and which I will not repeat. However, those of us who are

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  advocates and supporters of Europe should be much more active in putting our case. Far too much of what the public learn of Europe is contained in curious stories in tabloid newspapers, most of which are founded on myth, not fact or reality.
  I have no doubt that the United Kingdom has benefited considerably from our membership of the European Union and that our future best lies in a close relationship with it. That is why the Bill should have a swift passage through the House and the treaty should receive swift ratification. We should not exclude those who for such a long time lived under the shadow of communism from the benefits and advantages that we have enjoyed so long ourselves.
  5.22 pm
  Joyce Quin: I do not wish to pre-empt the result of the vote tonight, but I welcome the fact that we are likely to conclude our part in the ratification of the Nice treaty today. I have listened to the debates on Second Reading and in Committee and they have been much enriched by the contributions of several new hon. Members, who have brought much to our debates from their experiences of various organisations and previous employment. They have made some very constructive comments.
  Many pertinent questions have been put in the course of our deliberations. While I am light years away from the official Opposition's European policy, it is none the less right to pose hard questions from all points of view about how we best engage our population with the European issues that we have discussed. The hon. Member for Wantage (Mr. Jackson) is right to say that there was no excited tide of anti-Europeanism that was somehow vindicated in the recent general election result. However, there was an alarming passivity and lack of engagement with the issues, and I agree with the right hon. and learned Member for North-East Fife (Mr. Campbell) that it is important for the Government—and all of us in our constituencies—to address the issues and air them widely.
  Dr. Nick Palmer: Does my right hon. Friend agree that part of the problem is that many hon. Members, on both sides of the argument, are committed in principle either to more or less union, whereas men and women on the street are more interested in what the European Union is going to do? They are less interested in the more arcane constitutional arguments on which we spend so much time.
  Joyce Quin: My hon. Friend makes a valid point. People respond more warmly to the European Union when they think that it is dealing with issues that are important. We all remember the sea change in the attitude to the European Union that took place among many trade unionists. That happened not because they suddenly got excited about enhanced co-operation or treaty provisions, but because they felt that the EU was talking about employment rights and conditions—matters very dear to their hearts. Similarly, when the EU was associated with a campaign to clean up beaches, many coastal communities took a great deal of interest. It is therefore important for the EU—and the House—to deal with the sort of practical tasks that co-operation among EU countries can address.
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  In many ways, it is ironic that European co-operation at the present time seems more important than ever. We need to use some of the existing European structures effectively. I was very glad to hear my right hon. Friend the Minister speak of the co-operation that is taking place to combat terrorism. Information is being shared between intelligence agencies, and practical ways to combat terrorism are being studied. For example, action is being taken to strengthen aviation security, and work is being done at a European level to deal with funds and bank accounts that might be used to help terrorists.
  Those are extremely important matters, but addressing them is made easier by the fact that appropriate structures already exist in the EU that we can tap into. We do not have to take time to create many new structures before we can react to what happened on 11 September. We are therefore able to use structures such as Europol or the justice and home affairs provisions, and we have already done so. It helps a great deal that justice and home affairs Ministers are so used to holding regular meetings. They are able to contact each other quickly to work out how to move forward. The existence of the EU is therefore of great benefit in that regard.
  The official Opposition's approach is to renegotiate or dismantle the EU. I am worried about that, as it will harm co-operation in many vital areas. When I was a Home Office Minister, I visited the British arm of Europol and was impressed by the way in which exchange of information had already led to the arrests of some serious transnational criminals. Such work is not often advertised, as to do so would alert the criminals to what is being done, but it is none the less important. I therefore hope that we can build on the efforts being made in that regard, rather than dismantle them.
  I listened to the new shadow Foreign Secretary, and found his arguments extremely unconvincing. It is very hard to say that one is firmly in favour of enlargement, and then vote against measures designed precisely to facilitate enlargement. It is important to remember what happened in the Irish referendum and to look at ways of dealing with the issues that arose from it, but that does not mean that the whole process should be stopped as a result. As the hon. Member for Wantage pointed out so effectively, that is an absurd line to take.
  I noted that, in a radio interview yesterday, the shadow Health Secretary, the hon. Member for Woodspring (Dr. Fox), was trying to convince us that the European issue had been settled among members of the official Opposition, even though Lord Skidelsky had announced that he was leaving the Conservative party largely because of the European issue. Had the shadow Health Secretary been here for today's debate, he would have seen the wildly different reactions that the European issue has caused on his own Benches.
  On Second Reading, my right hon. Friend the Foreign Secretary advised the Opposition to learn from Labour's experience during the long years of opposition, but there are some differences. Our own slough of despond in the early 1980s was caused by an internal problem. What is causing such dissension in the Opposition's ranks is an external factor—the European Union—and its evolving nature. Unless the Conservative party can tackle the issue sensibly, it is in for a traumatic experience for a long time to come.
  Denzil Davies: I do not know when my right hon. Friend came to this House, but she will remember—or,

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  if not, she will be able to read about it in Hansard—that the Single European Act was constantly opposed by the then Opposition from both the Front and Back Benches.
  Joyce Quin: I know the history of this issue very well. No one can deny that there have been considerable changes in my party's attitude towards Europe during that time. None the less, over a period of many years, the European issue has been decided in our party with large majorities. Most party members whom I come across are very comfortable with the Government's approach to the issue.
  On Second Reading, I urged the Government to go out into the country and sell enlargement to the various regions and communities. I still believe that that is extremely important, once our deliberations on the Bill have been concluded.
  We can give the population of our country many positive reasons for enlargement. Obviously, we favour it because it completes the historic task of reconciliation after the end of the cold war. We also need to point out that enlargement has already promoted positive change in the applicant countries. It has helped to improve the treatment of minorities in those countries, resolve some border and nationality disputes and, very importantly, to underpin democracy. That is a huge advantage, and we should not undersell it.
  Mr. Spring: I agreed with the right hon. Lady when she said on Second Reading that the Government should sell enlargement. I wonder whether she believes that that has happened. It is certainly not clear to me. Can she say why, increasingly, right across the European Union, not only in the United Kingdom, there is, regrettably, more opposition to the European Union and to enlargement, even in the accession states?
  Joyce Quin: I do not see the problem in the same terms as the hon. Gentleman. I see a problem, which I mentioned earlier, of a lack of engagement in the issue and a somewhat passive approach. However, my postbag is not full of letters opposing European Union enlargement. When I have held meetings on the subject in my area, people's attitudes have, on the whole, been positive.
  The economic advantages of enlargement, which benefit the existing members of the European Union as much as the applicant countries, should weigh effectively with many of our constituents. They are concerned not so much about the theories of European integration as about the likely prospects for jobs, employment, the environment and other practical issues.
  There is no doubt that increased investment has already taken place in the applicant countries because of the prospect of enlargement. Investors know that those countries will be part of the European market in the future. The increased volumes of trade between us and the applicant countries is a welcome phenomenon. Those trade bonds have benefited us easily as much as they have benefited the new countries. Many industries in our towns, cities and constituencies are already benefiting from trade with the new countries. Those are all important points to make.
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  Indeed, on Second Reading, if I remember rightly, the Minister pointed out some of the expected gains in terms of growth in gross domestic product in both existing European Union member countries and the new countries as a result of this process.
  I am also glad that considerable regional and structural support is already being given to the new countries—again, on the basis that enlargement is going to take place. I urge that that expenditure be speeded up in some areas. It is particularly important for rural development. The so-called SAPARD—special accession programme for agriculture and rural development—schemes have been slow to get off the pound in applicant countries, but could make a real difference and help to progress rural development in those countries.
  The schemes could also help the cause of common agricultural policy reform. As many hon. Members have pointed out, that reform is of prime importance. I certainly do not want CAP issues to scupper enlargement, but the imperative for reform is very real and necessary. I want this country to lead in the negotiations for reform, as I believe we are doing, and to lead by example by using existing funds to the maximum extent for rural development rather than the traditional price and product support mechanisms, which have caused the CAP to overshoot its budgets, created so many difficulties and distorted agriculture in EU countries for a good many years.
  There are positive messages that we can convey as a result of the ratification of the treaty of Nice and its coming into force. The Government achieved a very good deal for Britain during the Nice negotiations and I congratulate them on the way in which they have defended and promoted our interests. What was achieved will help to secure successful enlargement of the EU as a whole.
  5.37 pm
  Mr. David Heathcoat-Amory: I come new to this legislation, but not new to the subject. In the years when I was involved with European matters, and lately when I have been not so involved, I have noticed the persistent habit of Governments of justifying controversial measures by an appeal to relatively uncontroversial overall aims. Just as the single market and the pursuit of free trade have been used to justify all sorts of harmonising and regulatory measures, so enlargement, which all right-thinking people are supposed to favour, is now being used to justify all sorts of disagreeable measures, including a good many in the treaty and the Bill.
  When the Minister was pressed on that matter he asserted that the Bill was necessary for enlargement. He then retreated somewhat and said that it was simply necessary for ratification. I am not sure that that is technically correct. Ratification of treaties is a Crown prerogative and I think that it is technically true that the Government could proceed with ratification in the absence of legislation. In practical terms, however, it is obviously necessary for them to get the Bill through the House if they are to ratify.
  Whether the treaty is required for enlargement is nevertheless a different question. Before the end of this debate we need a certain and clear answer to that question from the Minister. I believe that what is being suggested

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  is highly misleading and untrue. It is certainly the case that the Nice treaty contains some institutional changes that are required for eventual enlargement of the EU, but those are written in protocols and could easily be removed from present legislation and eventually incorporated in the necessary accession treaties. I have some acquaintance with that subject because I was the junior Minister who negotiated the last round of enlargement, when Finland, Norway, Sweden and Austria were negotiating to join the European Union, and at that time the institutional changes—the majority voting, the weighting of votes in the Council and the number of seats in the European Parliament—appeared not in a treaty such as has come out of Nice, but in the accession treaty. However, if it was desirable, in advance of the detailed negotiations, for the European Union to declare exactly how many votes were to be distributed in the succession of enlargement waves, that could be done by a political declaration at this stage.
  Mr. Robert Jackson: Does my right hon. Friend agree that there is a difference between this enlargement and that enlargement? In this enlargement, there will have to be a reallocation of seats among the existing member states. In that enlargement, there was not.
  Mr. Heathcoat-Amory: Yes, but I do not believe that that alters the point I am making. It is simply not necessary, legally or politically, for those changes to be incorporated in an Act of Parliament at this stage. It could quite easily be done at the accession treaty stage, as was done before. However, if my hon. Friend wishes it all to be set out now in a document and agreed, that could be done by political agreement. The European Union is very good at finding ways to express itself politically to give certainty to future negotiations.
  Sir Teddy Taylor: On this difficult and important issue, will my right hon. Friend look to the good advice of a Mr. Prodi, who used to say, until quite recently, that the treaty was vital for the extension of the European Union, but after the Irish referendum said that the extension of Europe did not require the treaty of Nice at all?
  Mr. Heathcoat-Amory: My hon. Friend is absolutely right; Mr. Prodi made a series of mistakes. He started by trying to ignore the rejection of Nice by the Irish—a breathtaking degree of arrogance on the part of a European institution—but he then retreated somewhat and conceded, under pressure, that the Nice treaty was not required or necessary for enlargement. That is the case that I am now making.
  Mr. Bryant: As far as I understand the argument about Ireland's already having decided on behalf of the whole of Europe, perhaps those who argue that case would do better to advocate the idea that each time there is a treaty to be ratified, one country—to be chosen by rotation—should decide on behalf of the whole of Europe whether it should be ratified, because that is exactly the position that the official Opposition are now advocating.
  Mr. Heathcoat-Amory: I have given way to some pretty silly interventions in my time in the House, but that one takes the record. Is the hon. Gentleman now saying that he does not believe in the unanimity rule for treaty
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  changes? Even the most enthusiastic pro-European, on the Treasury Bench or any other, could not seriously advance the proposition that we could simply ignore the treaty of Rome as amended, and ignore what the Irish have decided, not for the whole of Europe but for themselves. Under the present law it is a requirement that treaty changes be agreed by all member states. If the hon. Gentleman wants to find a way around that, I suggest that he take it up with the Irish and use his supposed persuasive powers to get them to change their minds in due course; but that certainly will not be done by bullying the Irish or threatening to ignore their decision or the underlying treaty requirement.
  I have now reached my main argument. If the European Union were seriously preparing itself for enlargement—if it really was interested in making Europe fit to take on up to 12 new member states—why has CAP reform not taken place? It is simply irresponsible to proceed with enlargement when everyone knows that, under the present CAP, Poland's entry to the EU alone will bankrupt the budget. So it is one of this country's duties to ask these difficult questions in advance. To negotiate all sorts of wonderful institutional changes that involve weighted votes without dealing with the underlying problems of the CAP and the budget is to put things the wrong way around—and I shall say a word or two about the budget.
  Mr. David: Does the right hon. Gentleman accept that a significant financial reform of the CAP took place in 1999? According to the agreed rota, there will be a further fundamental discussion of the CAP's future in which its new financial perspective will be discussed.
  Mr. Heathcoat-Amory: No, the earlier reforms may have gone some way to meeting the problem for existing member states, but they do not begin to measure up to the challenge of enlargement. The French have now made it perfectly clear that they have no interest in reopening the reform package before 2006. So Europe is simply not ready for enlargement in the crucial issues of agriculture and the budget.
  We shall debate such matters at greater length tomorrow, but it is important to refer to the budget now, because everyone will concede that the present arrangements for contributions to and receipts from the EU budget are hopelessly arbitrary, unsatisfactory and unfair. The payment side of the budget is riddled with errors, misappropriation and fraud.
  There is something almost comic in the fact that Europe lectures the candidate states that seek entry about budgetary discipline and that they will be required to put their own finances in order, given that the EU budget is riddled with fraud. That is not just my opinion; the European Court of Auditors has refused to verify the accounts as legal or regular for the sixth year running.
  I am a chartered account, and if I had encountered such problems six years in a row in my professional life, I certainly would not invest in the company involved, and its directors would all face prosecution. The problems are like those faced by Railtrack, but they are worse because they happen every year, and the Government do nothing about them. We in the House can do nothing about them because large sums are sent to Europe, and some of them are returned, without any parliamentary authority from year to year.

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  I remind the House that, on average during the past six years, this country's gross contributions have been nearly £20 million every day. Enlargement will add to that problem, because we will bring into the EU states with even weaker administrative and financial systems. If we were serious about preparing Europe for enlargement, and doing so responsibly, such issues should have been discussed and agreed at Nice, rather than simply tinkering with the voting weights for each prospective member state.
  The fact is that the Bill is not primarily about enlargement; it is actually another milestone on the way to a more integrated EU. European integration is not proceeding as quickly as some people would wish. Indeed, many people in the Commission and elsewhere are disappointed at the speed of progress. However, on qualified majority voting, we are still going down that road quite quickly. The Bill contains new proposals for QMV in 31 new articles, some of which are very important.
  Industrial policy has not been described so far in the debate. It worries me, however, that we are signing up to a majority voting system for an industrial policy that will reinforce all the failings of the European Union economic model. It will do that by giving other member states opportunities for interference and meddling on a industrial scale by using the EU budget.
  The Prime Minister goes to the United States on many occasions, and in less troubled times he would go there to learn. He has described to the House how he believes that the European model has much to learn from the United States about job creation, innovation, enterprise and economic growth. He has tried to sell such ideas to his European Union colleagues in the Council of Ministers. Therefore, after the Lisbon summit, he said that he had seen
  "a sea change in European economic thinking"—[Official Report, 27 March 2000: Vol. 347, c. 21.].
  It was nothing of the sort; that summit was an exercise in self-delusion.
  The European Union persists in using qualified majority voting as a way of forcing through damaging and unnecessary measures against the interests of this country. I am not making a partisan point, so let me give an example of where this Government opposed such a measure. The information and consultation directive will impose on member states national works councils. It will have nothing to do with multinational companies or companies that trade and operate in more than one member state; it will cover companies that are based, trade and operate entirely in this country.
  The Government rightly said that the proposal was a breach of the subsidiarity principle and argued as such, but they lost the argument. More importantly, they lost the vote. They therefore had to make the best of a bad job. An unnecessary, expensive, interfering and meddling European measure will be imposed on this country against the wishes of all parties, this House, the other place and the British Government.
  I cite another example, and it is one that I feel particularly strongly about. The art levy directive has been debated in the past, but the House may not know that the
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  directive has now been passed against the vote of the British Government. It will impose a levy on the resale of all works of art by living artists or by artists who have been dead for less than 70 years. The practical effect of that will simply be that any valuable work of art will no longer be sold in the European Union. Sales will take place in New York, Japan or any art centre outside the EU.
  The directive will therefore destroy the London art market, which is the largest in the world and by far the largest in the EU. The Government understood that and, to be fair to them, they argued the case well and persistently, but they were finally outvoted. Art dealers in the United States cannot believe what has happened. A European directive will enrich not the London, United Kingdom and EU art markets but one on the other side of the Atlantic. They cannot believe how that can happen. I have no way of describing the matter to them other than in the terms that I just have.
  The directive was passed under existing qualified majority voting, but the Bill will extend such voting into new areas. What I have described will happen in areas that we have not yet thought of. That is not just bad for the economy. This country will catch the EU disease of over-regulation and over-government; more seriously, such a proposal is bad for democracy.
  Angus Robertson: How does the right hon. Gentleman square that argument with the view of politicians on the continent who are much in favour of a federal Europe? In their reaction to that part of the Nice agreement that deals with the qualified majority threshold and the number of votes for a blocking minority, they viewed the treaty as one of the greatest brakes on a federal Europe. In fact, we are in a confederal Europe.
  Mr. Heathcoat-Amory: As I said earlier, some people would like to go further and faster. The hon. Gentleman did not dispute the example that I gave, and it is inescapably the case that qualified majority voting—which has done ackowledged damage to the House and to the country in the way that I have described—will be extended into new areas. That is my point.
  Such an approach is bad for democracy and the public have sensed that. The point has already been made that they do not worry all the time about the minutiae of EU decision making. They do not understand it for a start, but they perceive that something is wrong. It is striking that, when the electors in any member state are allowed near a decision about a specific European matter, they come up with unpredictable results.
  A year ago, the Danes surprised everyone by voting against the proposal that they should join the euro. They did that by overcoming the Danish establishment—almost all the political parties, the trade unions, employer organisations and most of the press—and all their European neighbours. The people smelled a rat and voted no. In March this year, the Swiss—not a member state, but a highly democratic country—voted no to the proposition that their politicians should apply for membership of the EU, and in June, the Irish unexpectedly voted no to the treaty of Nice.
  There are other manifestations of that malaise. One is the shamefully low turnout in elections to the European Parliament. That problem will not be solved by giving the

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  EU more powers. People will not rush out and vote in European elections because of a great advance in co-decision making. Nor will it help that, under the Bill and the Nice treaty, the EU will be given powers to regulate and fund political parties on a pan-European basis. It will simply increase public cynicism about the whole enterprise when politicians dole out money to other politicians and their own political parties. That is also combined with the strong suspicion that political parties that do not sign up to, or endorse, the aims of the EU will not receive the money. There is a deep-seated malaise that the treaty does not begin to address.
  The distribution of power within the United Kingdom also needs addressing. We need to find ways of shifting power downwards; I would like to revive local authorities and, in this Parliament, I hope to persuade my colleagues to re-examine the issue of local government finance. I know that other Members share that aim. However, if one has that aspiration, it is crazy to start to transfer more powers upwards to the most remote Government in the world—the EU. That will happen under the treaty by the extension of the competence and power of the EU, reinforced by the extension of qualified majority voting into new areas. That represents a transfer of decision making from people who have been voted for and can be removed—Members of the House, for example—to people who are unelected and cannot be removed. The process is irreversible and irrevocable.
  It is sometimes claimed that all the little glitches and problems and things that we do not like are worth while because we gain so much influence. Why is it necessary to try to achieve some small influence over decisions in other countries by giving up all influence over decisions in our country? Is that not the negation of democracy and of the reasons why we have been sent here? In the current international crisis, can people seriously argue that our influence in the world or on the United States or middle east is diminished in any way by our opposition to some aspects of European integration, of that it would be extended if we signed up to a further ratchet of European integration?
  I believe that the reverse is true. The seeds of the destruction of our influence are in the Nice treaty. The proposals for a separate European Union military structure outside NATO, which is what we are signing up to, will undermine what influence we have in the wider world.
  Mr. John Smith: Is the right hon. Gentleman aware of the decision taken at last year's 46th plenary session of the NATO Parliamentary Assembly in Berlin? It voted unanimously to support the creation of a European rapid reaction force and a European security and defence policy precisely because it would enhance NATO capability.
  Mr. Heathcoat-Amory: I disagree. The Bill will not add one soldier or one pound coin to the European Union's defence budgets or capability. There are profound misgivings about what is happening, which I share, throughout the American Administration.
  We must consider the intentions and motivations behind the changes in the treaty. I suggest that the hon. Gentleman balance his rather rosy view of what he hopes will happen with what the French Government have in mind for the powers and structural changes that will occur after the Nice treaty is implemented.
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  I am convinced that the European Union is equipping itself with the attributes and powers of a state. That is the essence of the treaty changes. However, most people whom we represent do not want that. If we continue down that path, it will lead at best to apathy and disillusionment, which we are already witnessing, and at worst to alienation, resentment and perhaps an eventual reassertion of self-government in unpredictable circumstances. The House would therefore be doing its democratic duty if it rejected the Bill.
  6.3 pm
  Mr. Andrew Miller: Listening to the debate, it seems that some hon. Members are developing a mentality of "Stop the world—I want to get off." They do not recognise that the world has changed. I make no bones about the fact that in the early 1970s I took part in the campaign to keep Britain out of the European Common Market, as it was at the time. I also make no bones about my position on our defence policy before the rapid changes of the 1980s. The world has changed, and serious political parties also need to change and recognise what is happening.
  I listened carefully to the right hon. and learned Member for North-East Fife (Mr. Campbell). I agreed with everything that he said, except for one thing—he did not recognise that there has recently been a discernible change among the tabloid newspapers. Although it is not my usual bedtime reading, I commend to hon. Members the News of the World of 14 October this year, which ran an article about the euro under the headline, "It's easy money". It did not go the whole hog and say that the euro is a good thing—far from it. In the context of British holidaymakers going to European destinations, it said:
  "The had news is, you're going to have to get used to the euro no matter what happens in Britain."
  However, it went on to set out six good reasons why there are benefits if Europe uses the euro—so even tabloid newspapers recognise that the world is changing.
  We learned a little this evening about the parentage of the grandmother of the right hon. Member for Devizes (Mr. Ancram) and discovered that the right hon. and learned Member for North-East Fife also has a European grandmother. Although one was from Italy and one from Glasgow, they are nevertheless Europeans. Indeed, they might soon find out that they are related.
  The debate is wide ranging and hon. Members have given interesting perspectives on the realities of European affairs. However, on a more serious note, one or two hon. Members referred to events on 11 September. I want to illustrate why the EU should consider the Nice treaty in the light of some benefits that could accrue from actions that have been taken by our European partners with other allies.
  We have opened the door to enlargement and a bigger single market. That will bring Britain huge benefits, including greater security, more prosperity and more jobs. There are important lessons to learn from terrorist attacks. My right hon. Friend the Minister referred to the special European Council meeting on 21 September, at which European leaders agreed new measures, including many UK ideas aimed at combating terrorism. However, he did not mention changes to increase aviation security within Europe. If we consider what happened on 11 September and the distances that some of the planes travelled, it is

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  clear that there needs to be a common policy, plan and rapid reaction to respond to such an incident if it again occurs in European airspace.
  I know that that is a difficult idea to contemplate, but I put it to hon. Members in all seriousness. There has been lengthy speculation about what leaders of free nations would have to do if they faced such an attack. European countries are so small that the distances travelled in north America are the equivalent of crossing the airspace of several European nations. If that does not justify increased defence co-operation, I do not know what does.
  Dr. Julian Lewis: The hon. Gentleman is making a typically fair-minded and thoughtful speech. However, in the event of a terrible decision having to be taken to shoot down an airliner, which I think is what he is getting at, surely that could be taken only through the medium of NATO. Such a decision would be taken at that level if it is not taken unilaterally. I cannot envisage a European military capability making a difference in the way that he suggests.
  Mr. Miller: I hear what the hon. Gentleman says and if such an awful event did occur, I would expect the decision to act to be taken at the highest level in this country and in the country where the airspace was crossed. However, we are talking about seconds and minutes of travelling time between countries. It takes just a few minutes to travel across Luxembourg, Belgium and a bit of France to get here. There are clear benefits in having close co-operation on such matters.
  European Transport Ministers have made progress on some aviation issues, including classification of weapons, training of crew, checking and monitoring of hold luggage and protection of cockpit access. Those are important matters that demonstrate the need for a common approach to European aviation security, which hon. Members will recognise if, like me, they frequently hop from Heathrow to Brussels en route to another European destination.
  Angus Robertson: Perhaps I can help the hon. Gentleman by giving a clear example of NATO's inability to fulfil the role that he suggests. Several days ago, Austria's air force was scrambled because a Turkish plane, which could not verify its course, was flying in Austrian airspace, and it was not clear whether it would continue to Germany or Italy. As the hon. Member for New Forest, East (Dr. Lewis) is aware, Austria is not a member of NATO, so the co-operation that the hon. Member for Ellesmere Port and Neston (Mr. Miller) is proposing could happen only in a European context, and not in a NATO one.
  Mr. Miller: I thank the hon. Gentleman for his contribution. The issue needs a great deal of thought.
  Mr. John Smith: My hon. Friend raises an interesting point about future European security and military response. However, I must point out that the Nice treaty makes no provision for that because a terrorist attack
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  would not be classed as a Petersberg mission. In fact, there is no such facility in the NATO strategic concept, and that issue will need to be addressed.
  Mr. Miller: I accept my hon. Friend's point and bow to his greater knowledge of NATO. I was merely speculating about the need for closer co-operation between European defence forces because of the events of 11 September.
  I come now to issues in the treaty that seem to cause extraordinary objections, such as qualified majority voting. I bow to the right hon. Member for Wells (Mr. Heathcoat—Amory) and his expertise in the art market. I have never found myself to be a significant player in the market, but I know what I like, as they say. I am not certain when this country signed up to the QMV to which he referred I suspect that it was during a period of Conservative government. On the changes to QMV to which he referred, I have yet to hear an argument from any Member of this House, in any of our debates, about anything except headlines. My right hon. Friend the Member for Llanelli (Denzil Davies) listed the changes to QMV, but at no point has anyone put forward a sustainable argument to show how the changes could be damaging in a particular treaty example. Such hollow opposition from Conservative Members weakens the logic of their case.
  Mr. Spring: We object to the extension of QMV on principle, but I shall give the hon. Gentleman an example. Article 100 deals with measures in the event of severe difficulties in the supply of certain products as well as community financial assistance to member states in severe difficulties. The hon. Gentleman may know that there is something called North sea oil. We do not know, because we do not have an interpretation of the Bill, what would happen if there were difficulties in supplying energy. Could the European Union have access to North sea oil on the basis of QMV? What has happened with fisheries should clearly demonstrate the need for nations to protect their assets, and that is simply one of many examples from the Nice treaty that are not ultimately in our national interest.
  Mr. Miller: The hon. Gentleman is simply taking article 100 and speculating on "what happens if', with no solid evidence that what he says is the case. I have heard no sustainable argument linking the issues of long-term energy policy to article 100. I understand the hon. Gentleman's fear, which may be worth exploring, but it is not being explored in a rational way in this debate.
  If the hon. Gentleman expects the British public to swing towards his side of the argument, I suggest that he consider article 137(1)(k), for example, which might be included in the list of principal objections. I understand that there might be an ideological difference between our two parties about modernisation of social protection systems, provisions relating to health and safety at work, and so on. Some of the more esoteric examples that are being given, however, do not wash with me and certainly do not wash with the British public, as we discovered in the recent general election.
  Mr. Heathcoat-Amory: Will the hon. Gentleman comment on the example that I gave him, in which the information and consultation directive, which was opposed by the Government—presumably with the hon.

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  Gentleman's support—went through by qualified majority voting as agreed at Amsterdam? That is a clear example of the Government giving way on majority voting. A measure came before the House, the Government opposed it—presumably with the support of the hon. Gentleman—but the measure was enacted over their heads. Is that not a clear example of the democratic wish of the House being overridden by a directive?
  Mr. Miller: The right hon. Gentleman is trying to get me into deep trouble. As some of my hon. Friends may know, I encouraged the Government to go a little further on the issue to which he refers. I will not be drawn too far on that, as I might find myself in hot water.
  The Tory objection to the rapid reaction force does not fit with reality, either. As my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) eloquently said, since flesh was put on the bones of the project, opinion in NATO and other serious military circles has been in favour.
  As for the common agricultural policy, everyone recognises the case for massive change. However, the logic of the argument on the CAP must have been just as correct when the previous Conservative Government signed the Maastricht treaty. Opposition Members seem to be crying wolf by introducing the issue at this point.
  Mrs. Browning: Will the hon. Gentleman give way?
  Mr. Miller: The hon. Lady was around at the time—just—so I will give way.
  Mrs. Browning: The hon. Gentleman may have been in the Chamber when the Minister for Europe, in an intervention, suggested that the Government had discussed with Ministers the preparation for changes to the CAP and expanding the Community, whereas the previous Conservative Government had not. I assure him that in 1995–96, as an Agriculture Minister, I discussed reform of the CAP in both Hungary and Poland, for example. The Conservative Government created a working party that produced a document for reform of the CAP.
  What on earth have the hon. Gentleman and his ministerial colleagues been doing for the past five years? They fudged the situation because it was difficult. They kicked it into the long grass, which is why we are in this mess.
  Mr. Miller: I accept that it is a difficult issue, but I do not accept that it has been fudged. From the discussions that I have had recently with colleagues from other countries, and from what my right hon. Friend the Minister for Europe said at the start of the debate, I believe that significant progress is being made. However, I do not understand why this one treaty is suddenly supposed to be bound up inextricably with reforms to the CAP. Those reforms have been necessary for a long time, and I accept the hon. Lady's point that progress is needed.
  The treaty was subject to a great deal of discussion on the fringes of a conference that I was privileged to attend in September. I was in the Estonian Parliament, with colleagues who included the hon. Member for Mid-Worcestershire (Mr. Luff), when the terrible events of 11 September unfolded. During the proceedings on the
  1216
  fringe, I discussed those issues with a wide range of colleagues, including, Mr. Deputy Speaker, your opposite number in the Hungarian Parliament and others from Parliaments in existing and prospective EU member states.
  It became clear to me that existing member nations and applicant countries want to make progress and that they feel a degree of frustration with the conduct of the British Conservative party and the handful of others who adopt a negative approach to the process of enlargement. They all say that they want enlargement, but they do not offer a practical alternative approach, only the piecemeal, one-after-the-other process that would take for ever and would be an impossible way in which to increase EU membership to 27 or 28 nations.
  It is right that Britain should commit itself to the treaty of Nice. In the coming years, we should work closely with our European partners and prospective partners to develop the interests of both our nation and our neighbours and to enhance the role of Europe, thereby enhancing Britain's position in the world.
  6.21 pm
  Mrs. Angela Browning: I am grateful for the opportunity to contribute to the Third Reading debate as I was otherwise occupied during the Bill's previous stages and so unable to participate. I hope to put on record my concerns, which are shared by several of my right hon. and hon. Friends who have already spoken.
  During the opening speech on Second Reading, the Foreign Secretary prayed in aid the same argument that we heard expressed tonight by the Minister for Europe: that the Bill is purely about enlargement. That is not so. Enlargement is an important aspect of the Bill, but it constitutes only 5 per cent. of that which appears on the face of the Bill. If we as the House of Commons are to do justice to any Bill laid before us, it is important that we analyse it, scrutinise it and consider the consequences of all of it, so we must examine that other 95 per cent. of the Bill. It is simply not acceptable for the Government to create a smokescreen by telling people that the Conservative party opposes enlargement of the European Union and that any criticism we might make of the Bill reveals that we are anti-enlargement. That is a travesty of the truth, given the small portion of the Bill that deals with enlargement.
  On Second Reading on 4 July, the Foreign Secretary said that he wanted to put the Bill in the proper historical context, but he rested his argument solely on the enlargement aspects of the Bill. Since then, we have witnessed the dramatic outcome of the referendum in the Republic of Ireland. It has been implied during today's debate, especially by the Minister for Europe, that if the House does not approve the Bill tonight, of all the member countries of the European Union ours will be the one that is pilloried for failing to do its duty.
  Let us look at the progress achieved by other countries in ratification of the Nice treaty. Belgium, which one might imagine would be enthusiastic, has not yet initiated a discussion; Germany has had only a First Reading; and the Greek Parliament has not yet initiated any debate on ratification. The list goes on: Italy has not yet ratified; the position in Ireland is now a matter of record; Austria has had only a First Reading; other countries including

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  Portugal and Finland have presented a Bill, but only in draft form; and Sweden has not yet initiated the debate. Yet here, the Minister for Europe—desperately hiding under the cloak of EU expansion—tells us that we have not got time to talk about 95 per cent. of the Bill, but if we simply sign up we will have done our duty. I do not accept that argument.
  Let us consider why the Irish rejected the proposal. One of the reasons, although by no means the only one, was their concern about the EU's inability to address the vexed issue of reform of the common agricultural policy—a matter that has been mentioned tonight. Progress on CAP reform has to have been made before all the new countries enter the EU. People have argued that other countries have entered in the past, and that is true, but I recall that Spain and Portugal did not have an especially easy passage: there were problems, especially in the fisheries and agriculture sector. The economies of many of the countries that are lined up waiting to join the EU are highly dependent on agriculture and horticulture.
  We should take a look at the Irish experience. Mr. John O' Dowd, who was deeply involved as a member of the committee of the National Platform for Ireland, writes:
  "Right at the beginning of the Irish campaign our first important step was to get hold of a reliable English language text of the Treaty. As everyone knows, Nice was conceived in darkness and confusion, so it was hardly surprising that a reliable text was difficult to find. However, once we got that the long and slow process of working out what Nice did began. As with every other EU treaty, Nice was a mixed bag. It was important to understand what the issues were, how they were prioritised in the treaty, and what was at the heart of Nice. This was a long haul, but for us it was vital to be able to get a grip on what we were dealing with.
  Once that was done (virtually a month of solid work) we could then proceed to organise the information we had."
  I shall come shortly to those parts of the treaty that cause me concern, but the other 95 per cent. deserves proper scrutiny.
  It is a matter of great regret that during the Committee stage, despite some excellent and constructive contributions by Conservative Members and the tabling of amendments and new clauses, the Government failed to consider properly or agree to a single proposal advanced by my right hon. and hon. Friends. The theme struck by the Foreign Secretary at the start of the debate on the Nice treaty was carried through, and we see it being finalised tonight. We are being told, "Either agree with the Bill, or you are against expansion of the European Union—and please don't bother us with the other 95 per cent." That is no way to treat either the House or a Bill of such importance.
  As we have heard, every step of a treaty Bill causes a constitutional change. Individually, they may not be great changes, but their effect is incremental: they add up to a handing over of the powers and rights of the people who are represented by Members of Parliament to unelected people who sit in Brussels.
  Mr. Bryant: Does the hon. Lady not accept that that is the whole point—that to a treaty the response is either yes or no? We are not here to rewrite the treaty in any way.
  Mrs. Browning: In that case, why debate it? Why not just have a statement from a Minister to which we can all
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  nod our heads like little donkeys and say, "Okay, you go ahead"? That does not reflect my understanding of parliamentary democracy. If things threaten to get that bad—judging by the hon. Gentleman's enthusiasm, he might well encourage his colleagues to make things that bad—I will oppose it tooth and nail, as will my right hon. and hon. Friends.
  Mr. Spring: I invite my hon. Friend to say precisely what parliamentary democracy is all about and to emphasise that the extent of the alienation and disconnection of the peoples of Europe from the institutions of the European Union is caused precisely by the attitude articulated by the hon. Member for Rhondda (Mr. Bryant).
  Mrs. Browning: I agree. A distinguishing feature of the treaty is the big question mark resulting from the result of the Irish referendum. This evening, Members have said that treaties have been passed, even under a Conservative Government; I accept that. However, as we saw when other EU members took the single currency on board, what is distinctive is the fact that a referendum of the people by the people gave a result different from that expected by the Government.
  Dr. Ladyman rose—
  Mrs. Browning: May I finish this point before giving way?
  I went to Copenhagen early in the Danish referendum campaign and shared a platform with various people from different countries, all of whom had been invited to speak by the Danes. I shared a platform with a Swedish trade unionist; I think that it was the first time in his life that he had shared a platform with a centre-right politician, and he looked a bit disconcerted. However—and this applies to every country in the EU—he said that the single currency was on the politicians' agenda and was not what the people wanted; unless the people had a voice of their own, and if they could not trust politicians to speak for them, we faced a dangerous future. I told him, "I agree with you comrade." He nearly fell off the platform.
  If we, as representatives of the people, do not represent the views of the people and if, on important matters, they do not even have a referendum, then, not just in this country but throughout the European Union, we are heading for a situation that has already been remarked on by other Members tonight. Ultimately, the people will rebel and the consequences of that should not be underestimated. In democracies, people should be able to speak out. If they do not have an outlet through the people democratically elected to represent them, there is a big problem.
  Several Government Members said that the recent general election gave a clear indication of what the British people think about Europe. I do not agree because a general election is not about a single issue, but about a whole range of issues. We know from every opinion poll that the British people—and it is the British people in whom I am interested—are concerned about giving up their national currency and the drip, drip effect of taking the nation further into an integrated union in which we are no longer an independent nation state. The Nice treaty

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  is yet another step along that route. I now give way to the hon. Member for South Thanet (Dr. Ladyman), who has been very patient.
  Dr. Ladyman: The hon. Lady helped to lead the Conservative team that fought the last election, telling the people that it was their last chance to have their say on Europe. She was a member of that team; was she fibbing? If she is now saying that amendments to treaties passed in the House should be allowed, will she tell us how many amendments the previous Government allowed to the Maastricht treaty?
  Mrs. Browning: At the election, the Conservative party had a clear policy, especially on the currency.
  Mr. Hugo Swire: And on Nice.
  Mrs. Browning: I am grateful for that reminder. We are honouring that pledge, unlike Government Members who must wonder when they are ever going to honour anything that they promised in an election. As an MP, European issues were not the only area on which I campaigned in my Devon constituency. I held more than 40 public meetings, and we discussed the euro, European matters generally and other things. My majority trebled; in fact it more than trebled. Now that I have found out how to treble my majority, I shall do the same next time.
  The treaty, of course, includes other issues. My hon. Friend the Member for West Suffolk (Mr. Spring) mentioned one that is of great concern. We are all conscious of the tragic events of 11 September, but I urge Members to read the debate on the Bill in July in Hansard and look at the contribution of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), who spelled out clearly the problems in those parts of the treaty that revise articles 1, 17 and 25 of the treaty on European Union. My hon. Friend also examined the consequences of those revisions for our defence and security policy. He mentioned terrorism, unaware of how telling his words would become. I urge Members to read his speech because we need to be sure of the terms of this country's co-operation.
  I am all in favour of co-operation, but the treaty is not about flexibility and co-operation; it is about entrenching in statute things that bind us rather than give us the flexibility that we often need. In fact, flexibility, as my hon. Friend the Member for West Suffolk said in his opening remarks, is seen to be important in our defence commitment in Europe.
  Mr. John Smith: Has the hon. Lady read article 17, which states that it shall not prejudice the specific character of the security and defence policy of member states?
  Mrs. Browning: Indeed. As has been said, we know that the Nice treaty proposes that we take the first steps to introduce what has euphemistically been called a European army and certainly a European defence and security policy. I am in favour of EU countries playing their part and contributing their fair share. I am not being malicious but making a statement of fact when I say that many members of NATO have for many years—in fact since NATO was first formed—a record of not contributing from their defence budgets is the amount that
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  they would be expected to pay. Over the years, the Americans have said quite rightly that Europe should pull its weight on defence. I do not have a problem with that general premise, but we are concerned that the treaty is proposing a break in our alignment with NATO and the Western European Union.
  I listened to the Labour Members who have contributed tonight. Never mind what is in the treaty; it is part of that 95 per cent. that they do not want to talk about. The Prime Minister gave his word; things are not quite how they look in the document, and there will still be command and control liaison through NATO. In fact, that is not the interpretation of other EU states, particularly France, as I have said.
  Mr. Spring: May I add to the point that my hon. Friend is making? It is worth considering the remarks of the Finnish commander-designate of the rapid reaction force, who said that it
  "will not bow to NATO".
  General Gustav Hagglund described the planned 60,000-strong force as an important symbol of EU identity, similar to the euro and the flag. He said:
  "We are not talking about a subsidiary of NATO. This is an independent body."
  That point is well made.
  Mrs. Browning: It is compatible with the words of the French chief of staff whom I have quoted on the same subject. We have legitimate concerns about that aspect of the treaty and its interpretation by other EU member states, especially at this time when we all realise the significance not just of co-operation and flexibility but, as in previous times of trouble, clear structures. Ambiguity is the last thing that we want in defence and security. We do not want different nation states making different interpretations because we may discover that only when it is too late.
  The other issue about which I, like my colleagues, am concerned is the extension of qualified majority voting. As a former Minister, I have been asked for examples of what it will mean. Basically, as a nation state, we will again give up some of our rights to veto matters that are in the British interest. I am particularly concerned that the so-called emergency brake, which the Government paraded after their negotiation of the Amsterdam treaty, is to be subject to qualified majority voting.
  I shall briefly share with the House my experience as an Agriculture Minister. Having spent three years at the Ministry of Agriculture, Fisheries and Food, I have no doubt that, with regard to food production, there are those in the European Union who use qualified majority voting not to expand the single market and competition, but the reverse. They identify food sectors where they see British products that are causing problems to their own domestic markets, they form a cabal of like-minded countries, and they raise objections. They use their block voting power under QMV to see off a competitive sector from another country. My experience as a MAFF Minister showed that clearly.
  Anyone who has ever taken an interest in the fight that we had to put up just to maintain British milk chocolate over four or five years will know that the issue is not harmonisation but the raw competition of the marketplace, where QMV is used by pressure groups and companies in

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  other countries to see off the competition from the UK. We saw the same in respect of mineral waters and soya milk. We had to ban in this country the name "soya milk" on a product that was sold only in this country as soya milk, because others did not want that competition. They wanted greater input into our market, and when they could not achieve that on fair competitive terms, they did it by using QMV, forming a cabal and seeing off the competition.
  No one should think that QMV enhances the single market or open competition in the EU. It is used for horse trading, and horse trading is how the whole system works.
  Mr. Hendrick: Does the hon. Lady accept that on 42 occasions her Government gave up the veto and adopted QMV on the Single European Act and on the Maastricht treaty?
  Mrs. Browning: I was not a Member of Parliament at the time of the Single European Act, but the hon. Gentleman is right to say that I was in Parliament for the Maastricht treaty. I will say to the House not for the first time and probably not for the last time—I have certainly said it to my constituents—that I very much regret my support for the Maastricht treaty.
  Mr. David: The implications of the hon. Lady's remarks are profound. Everyone recognises that the great achievement of the European Union is the single market, which is virtually complete. I thought that the Opposition supported the single market. Everyone also recognises that the single market would not have come about without qualified majority voting. The hon. Lady must surely accept that simple fact.
  Mrs. Browning: It depends what we imagined the single market would achieve, back in those early days when we first joined the common market. I voted in the 1970s that we should remain in the common market because I believe in free trade, and I could fully understand why colleagues in the party at the time of the Single European Act saw that we would bring about more free trade and remove both tariff and non-tariff barriers. I was all in favour of the principle, but in practice it did not work out that way.
  For example, I had always expected that with the single market, if the Germans could make a better-quality toaster at a more competitive price than a British company, they would take our market share of toasters in the UK, and we would have to produce a better toaster. That is my rather basic understanding of the free market, but that was not the route taken by the European Community. It took the route of harmonisation in every blessed product and service, and now it is trying to integrate harmonisation into everything else that we do.
  I had every hope of the single market and free trade—[interruption.]I ask hon. Members not to shout from a sedentary position; I will give way.
  My point is borne out by the statistics. In 1992, when the single market was created, the rate of growth in trade between the United Kingdom and the rest of the European Union was the same as that between the United States and the European Union during the same period. In other
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  words, the US increased its trade with the EU at the same rate as we did, but the US was not subject to being a net contributor to the EU.
  The 1998 figures, which are the latest that I have, show that the average of the tariffs that the EU placed on imported industrial goods was 3.6 per cent. Leaving aside any possible retaliatory measures, an average tariff of 3.6 per cent. would have yielded £3.441 billion had it been levied on the UK. In other words, if we had traded with the EU at the same rate as do the US and many other countries around the world, we would have spent £1.748 billion less of UK taxpayers' money in our contribution to the European budget.
  Yes, I am a great advocate of free trade, but I am not in favour of something that parades itself as free trade or a single market, when cabals work to see off the competition and take advantage of qualified majority voting to see off sectors that are perceived as competition. I am not in favour of the United Kingdom having to give up its fishing stocks and much else in order to be net contributors to the HU, if that is not fair and does not take into account the proper rules of free trade, which is what we signed up for in the first place.
  Mr. Hendrick: I thank the hon. Lady for giving way. She argues that the United States has benefited more from the European Union than have EU members, and she contrasts the position of the United States and the United Kingdom. Is she not aware that the fact that we share sovereignty and contribute to a common pool of funds means that we can benefit in many other ways, unlike the United States? It is not a simple trade equation. It involves programmes and projects that spread throughout the regions in the EU and benefit many regions as net gainers, such as my region in the north-west.
  Mrs. Browning: But as a net contributor, the UK is paying for every EU -financed project that the Government agree to become involved in, as the balance sheet shows at the end of the financial year. There is no great pool of money that the EU in its largesse dollops out to regions of the UK. I know that the image of the blue flag with the circle of yellow stars is used to show that a project is EU-funded, but the hon. Gentleman must know that much of that funding is conditional upon match funding, and that the balance sheet shows that as long as we remain net contributors to the EU, we will be financing such projects ourselves.
  Mr. Hendrick: The hon. Lady missed my point. Per capita income and per taxpayer, the north-west is a net gainer, even though as a nation we are net contributors. The hon. Lady may not agree with that method of redistribution, but the majority of hon. Members do.
  Mrs. Browning: The hon. Gentleman may be surprised to hear me say that as it is our money anyway, I would trust his Government to decide how those funds should be distributed to the north-west, the south-west or any other region of the United Kingdom, and to be answerable to the House for their decision. I would rather they used our money for our priorities so that they would be

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  answerable, through Members of Parliament. We would not be the losers for it, as the money would still be spent—
  Mr. Hendrick rose—
  Mrs. Browning: I must move on. The hon. Gentleman and I will have to disagree. The money is ours. The question is who decides what it is to be spent on—people in Brussels or the United Kingdom Parliament, accountable to the people through hon. Members. I believe that accountability should mainly be here.
  Mr. David rose—
  Mr. Miller rose—
  Mrs. Browning: I have taken a considerable amount of time and, much as I am enjoying the debate, I ought to summarise my other concerns about the treaty.
  My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) spelled out his concerns about industrial policy, which I share. Every time the Government establish a deregulation taskforce, we know that it will not succeed. Once one signs up to the social chapter—lots more is going to come into it—one automatically puts a brake on Britain's competitive edge. There is no way out of that scenario and no exit strategy in respect of the social chapter now that the Government have signed up to it. Like my right hon. Friend, I am concerned about more integration in that hidden 95 per cent. of the treaty that affects our competitiveness through industrial policy.
  I am also concerned about control of EU political parties, but I shall not speak in detail about it.
  Mr. Miller: May I intervene before the hon. Lady continues?
  Mrs. Browning: The hon. Gentleman has a very winning way, so I am happy to give way.
  Mr. Miller: I thank the hon. Lady. Can I use the engine in her car as an example? We have spoken about it before, as it was made in my constituency.
  Mrs. Browning: I have changed my car.
  Mr. Miller: I hope that the engine is still made in my constituency.
  Mrs. Browning: It is not.
  Mr. Miller: That is terrible, but, none the less, the hon. Lady's last engine, which ran for 150,000 miles, was exported from the UK during all the troubled times that she has mentioned. It went not only to mainland Europe but to Scandinavia and the United States. We have plenty of examples of good manufacturing successes that have occurred during the period in which she is saying our competitiveness was disappearing. When we have had the products, put in the work and acted in partnership with European counterparts, we have had genuine successes.
  Mrs. Browning: In future, whenever a Labour Member who represents a constituency in the north-east or
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  north-west stands up to complain that he or she has just lost another 2,000 manufacturing jobs, I will be sure to repeat the hon. Gentleman's view to whichever Minister is at the Dispatch Box. That view is not usually expressed when such complaints are made.
  I am concerned about the treaty proposals that will lead in future to the question of a constitution for Europe. I have heard arguments from below the Gangway about such a constitution. It seems to me that if there is a European army, constitution and single currency, as well as harmonisation in all the other spheres that have been mentioned, we will have a country called Europe. I want to see Europe as a combination of nation states that work together and co-operate. There is a great deal of advantage in co-operation. I do not want anybody to think that I do not recognise that fact or that I do not value co-operation. Once we have a country called Europe—we are going that way and are now very close to such an outcome—there will no longer be a country that one would recognise as the United Kingdom or as a democracy that is answerable to the people through this House. That is what I object to.
  Several hon. Members rose—
  Mr. Deputy Speaker (Sir Alan Haselhurst): The average length of Back-Bench speeches is now more than 20 minutes. On that basis, many of the hon. Members who are present will be disappointed. I appeal to hon. Members to give some thought to their colleagues who want to speak in the debate.
  6.53 pm
  Ms Gisela Stuart: I hope to return us to the subject of the treaty of Nice, rather than to speak about our fears of possibilities that I shall not even try to find the words to describe. If we are honest, we will all probably agree that the treaty is not a perfect vehicle. It has its failings, but in negotiations where 15 member states sit around the table it is necessary to agree with some conclusions that the majority believe to be right in order to make progress. Similarly, rightly or wrongly, the treaty of Nice is the vehicle that has been chosen to take enlargement forward. That is the world as it is.
  Let us consider enlargement. I gained the impression from previous speakers that half the House of Commons is in the Baltics, Poland and other accession states. From personal experience, I know that various delegations run into each other in Vilnius. Such meetings mean that many of us can speak with first-hand experience. We probably all share similar experience, which suggests that enlargement is extremely important for accession states. They see not only EU membership but NATO membership as a vehicle for advancement. Many countries envisage that NATO membership will provide military security and that EU membership will provide economic stability and security. They wish to be part of those two frameworks.
  The processes for securing NATO and EU membership are very different. In respect of NATO, an invitation is issued and the approach is, in many ways, much more positive. The EU process is a bit like an Ofsted report; it has many chapters and a country will not be let in unless it can tick all the boxes. It is very sobering. In the past few years, it has helped many countries to develop a structure that reflects the way in which they wish to shape themselves.

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  Most of the accession states—certainly those that hope to be in the first wave—have made it clear that they will hold a referendum even though they have no constitutional need to do so. They want not only to be democratic but to be seen as such. One of the reasons why it would be absolutely disastrous to delay the enlargement process unduly is the fact that opinion polls show that public support is dropping in some of those states.
  We must deal with the reason for that and say something about the Irish referendum. I do not want to second-guess why the Irish people voted as they did or to tell them how they should have voted, but I suspect that some of them were saying, "Curses on all your houses." I suspect that the decision, rather than being a vote against EU enlargement or qualified majority voting, was directed against everything other than what is in the treaty of Nice.
  In the long term, we must consider that disengagement by the electorate. I am not so arrogant as to say that they do not understand what is involved; they may understand only too well but still not like it. If so, we must accept it, but it would be wise for us to separate disillusionment from the very narrow aims of the treaty. I think that it is fairly unambitious and could have been much more ambitious. I agree with Members who said that it did not contain enough meat to make it an appropriate subject for a constitutional referendum in this country. It is the vehicle for enlargement. I agree with it and I believe that it should be taken forward.
  One element of the treaty caused me some anxiety: the common foreign and security policy. I was concerned about the relationship between the EU and NATO. Interestingly, the Select Committee on Foreign Affairs makes the following statement in its fifth report:
  "It remains to be seen just how soon differing interpretations of the report's conclusions can be reconciled, and what the statement that EU-led military operations will take place only 'where NATO as a whole is not engaged' will mean in practice."
  That caused me some concern. Members of the Committee have just returned from two days in Brussels, where we met the Belgian membership. We also met Hageland representatives and NATO members. It is clear that the EU and NATO recognise that the latter will have first refusal. That is made explicit in the statement to which I have referred, but it has been made more explicit during the past few weeks.
  The circumstances in which NATO would choose not to become involved and we would depend on the EU instead are extremely limited. They will be exactly those in which America will not have an interest and the EU will wish to take the first step. The two structures are parallel. While I know that the treaty does not add one extra soldier anywhere, I hope that it allows us to use NATO and EU capabilities far more effectively. Surely parallel and comparable structures are the way forward.
  I hope that we will all learn the lesson from the fact that successive Governments throughout Europe—I agree with the hon. Member for Tiverton and Honiton (Mrs. Browning) on this point—have shamefully underspent on defence. I suspect that when the shortfalls are considered, we will find that those in the EU and NATO are broadly the same. I hope that that will result in increased spending. Again, however, that is not part of the treaty itself.
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  Let us consider what we are deciding tonight: the vehicle for enlargement, on which it would be absolutely disastrous to stall at this stage. I believe that one of the main reasons for central Europe's democratic development is the prospect of membership, which has provided a framework for that to happen.
  Perhaps today affords an opportunity for us to restate a United Kingdom interpretation of two matters. The nature of treaties means that there are slight differences of interpretation. First, the United Kingdom subscribes to NATO and the transatlantic model. I accept that a French school of thought suggests that building an alternative power bloc to the United States should drive the European Union. I do not subscribe to that model, and I should be surprised if many hon. Members did. Perhaps now is the time to restate that clearly. Secondly, our model of co-operation is intergovernmental. Important decisions should be taken at ministerial level by elected representatives of member states.
  Those views are not incompatible with the treaty of Nice. As I said earlier, although the treaty is not perfect, it is vital. No one, apart from those of the most extreme little Englander mentality who want to reconsider all the treaties and to return to the time before we started negotiations for accession and rerun the 1975 referendum, should be unable to support the Bill tonight.
  7 pm
  Mr. Robert Jackson: The speech of the right hon. Member for Llanelli (Denzil Davies) from the Government Back Benches against the Bill means that there will be a pleasing symmetry, because I shall speak from the Opposition Back Benches for the measure. That reflects the reality of the European debate in this country: the division on Europe cuts across parties—there are different views in all parties.
  I shall be brief, as you enjoined us, Mr. Deputy Speaker. I want to explain why I intend to vote with the Government tonight to ratify the Nice treaty. The Government and the Opposition are applying three-line Whips; there is therefore no doubt that the Bill will be carried. That was the consequence of the last general election. The easiest course for me would be to follow the Opposition Whip and vote against the Bill in the certain knowledge that that would make no difference. I could also continue to abstain, as I did until now, including on Second Reading.
  I have decided to vote for the measure because I believe that the treaty of Nice and, therefore, the Bill is essential for the enlargement of the European Union. Nothing has been said in the debate to shake that belief. Like the hon. Member for Birmingham, Edgbaston (Ms Stuart), I believe that it is our duty and in our interest to act to secure the early enlargement of the Union.
  The Nice treaty contains an essential prerequisite for enlargement: the reallocation of voting weights in the Council of Ministers between current and prospective member states. The battle over the reallocation of votes at the Nice conference was hard fought and acrimonious. Many member states would like the matter to be reopened. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, countries such as Belgium were losers in the reallocation, and that is one of the reasons for the failure of the ratification procedure to progress as fast as we would like. It is in Britain's interest not to

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  reopen the matter, not least because the new allocation substantially increases our weight in the Council of Ministers.
  In the light of the off-the-cuff remarks of the President of the Commission in the summer after the failure of the Irish referendum, my right hon. Friend the Member for Devizes (Mr. Ancram) has argued that it the Nice treaty is not necessary for enlargement and that the necessary adaptations of European Union institutions can be accomplished through treaties of accession with the new member states. Let the experts and the non-experts in European law argue about that. I simply share the view of the right hon. and learned Member for North-East Fife (Mr. Campbell). I observe that Mr. Prodi has not repeated his words.
  I appreciate that the votes of prospective member states can be fixed in their treaties of accession, which could state that Poland would have a specific number of votes, Hungary would have a specific number and so on. However, the difference between what we are considering and the position that my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) described in respect of the previous enlargement is that separate treaties between the European Union and Poland and between the EU and Hungary cannot reallocate voting weights between the existing member states. Any attempt to proceed in that way would run the risk of the many discontented member states trying to reopen the question. That would delay enlargement and disadvantage Britain.
  Conservative Members, supported by the right hon. Member for Llanelli, have argued that although the agreement on votes at Nice is positive from the British point of view, it is outweighed by in negative features such as the extension of majority voting, the promulgation of the European Union charter of fundamental rights—not, of course, as a justiciable instrument—and the further development of the common foreign and security policy. I am not persuaded that all those developments are necessarily so negative from a British point of view; I am sure that their significance is far outweighed by the agreement on the new voting structure in the Council of Ministers.
  The new leadership of my party appears, at last, to have grasped that the rhetoric of the past four years about the threat of a European superstate was at least overheated. That is the new leadership line, but the debate shows that it has not trickled down to all Back Benchers.
  In the recent Conservative party leadership election, I undertook the task of answering letters from Conservatives and others about Europe to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who was one of the candidates. Hon. Members will appreciate that that was not always an agreeable task. Many good people—and some who are perhaps not so good—have been persuaded that nothing less than a desperate battle for national survival is under way. A sort of 1940 complex—Britain against a united and hostile European mainland—has been generated.
  The new leadership line is, thank goodness, that Europe is not such a big issue after all and that there is no need for the Tory home guard to fight on the beaches and elsewhere. That is a welcome and clear admission that the threat of a European superstate has been overstated. If the threat were real, Conservatives and all hon. Members would want to oppose it vigorously.
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  If the threat of the European superstate is being discounted and we are to put the 1940 complex behind us, why should not Conservatives examine the Nice treaty realistically? I say to my right hon. Friend the Member for Devizes that, like its predecessors at Amsterdam and Maastricht, the Nice treaty constitutes a signal reverse for federalist ambitions. If the treaty is not to be regarded primarily as another milestone on the road to Britain's incorporation in a federal superstate, why are we voting against it? If it is to be so regarded, why are we putting Europe on the back burner? The Conservative party's opposition to the Nice treaty tonight and some of the rhetoric that we have heard in the debate is best understood as a hangover from the party's previous, discredited European policy.
  I shall conclude by speaking briefly about why I support the early enlargement of the European Union. I do not support it simply because it will stabilise the politics and security of central and eastern Europe and secure the development of important and growing new markets for British goods and services. I do not support it simply because it will necessitate reforms of European policies such as the common agricultural policy and the budget policy, which should produce welcome improvements from the British point of view. By the way, that will happen only after enlargement, because if we try to achieve it beforehand it will simply block enlargement.
  I support enlargement for different reasons. We in Britain have historic obligations in central and eastern Europe, and great states such as ours have a long memory for such matters. I spoke about the 1940 complex in the Conservative party. I want to consider the obligations that arise from another fatal year—1939.
  My right hon. Friend the Member for Devizes referred to his European ancestry. I hope that my words will hold some appeal for him because his distinguished forebear—I believe it was his great uncle—the Marquess of Lothian played an important part in those events, although he was more a man of 1938 than 1939. In March 1939, the British Government responded to the occupation of Czechoslovakia by the Germans in breach of the Munich agreement by extending guarantees to Poland. In September 1939, Britain went to war to uphold those guarantees.
  The British policy of 1939 was not just an admission that Neville Chamberlain was shamefully wrong to speak of the central and eastern European lands as "faraway countries of which we know nothing". Fundamentally, the British policy of 1939 was a commitment by this country to enable the states and peoples of central and eastern Europe to play their full part in a Europe organised on the basis of equality and co-operation.
  For reasons with which we are all familiar, it was impossible for this country to deliver on those commitments—in 1939, at Yalta and Potsdam in 1944 and 1945, or throughout the period until 1989. But today, after half a century, in the context of the enlargement of the European Union—an association of free and equal co-operating member states—the time has at last come for us in this House and in this country to do what we promised to do all those years ago. My vote tonight for the ratification of the Nice treaty by the House is my personal contribution to the fulfilment of that historic British obligation.
  7.11 pm
  Roger Casale: We began considering the Bill in July, well before the terrible events of 11 September in America. I do not say that we must ratify the treaty of Nice because of the international crisis, but I do say that the European Union, which had already reached a critical juncture in its development—like all international institutions—faces a critical challenge to its ability to make decisions, and its capacity to act in the world as we find it today.
  Now as, perhaps, at no previous time in its history is the time for the EU to demonstrate to the people of Europe that the nations of Europe are made much stronger by being able to act together through the European Union than they are by acting alone. Indeed, what better mechanism could there be at this time to strengthen Europe's contribution to the international response to terrorism? What better mechanism could there be at this time to expand the European effort in the fight against terrorism than an intensification of European co-operation, and an enlargement of the EU as envisaged by the Nice treaty?
  Some Opposition Members have given the impression today that it is business as usual in the European debate. Let me tell them that, in terms of where we pick up the debate about the Nice treaty this evening, we are in a different world from the world we were in when we left that debate before the summer break. Others may believe that consideration of the issues in the treaty should perhaps be postponed until after the immediate international crisis has passed. I believe we should treat the international crisis as a spur, or a wake-up call, to intensify efforts to produce important measures such as those in the Nice treaty, which will accelerate European reform.
  We urgently need the introduction, at European level, of measures to counter international terrorism, to strengthen judicial and police co-operation, to tackle money laundering and to operate in many similar fields to strengthen the security of the people of Europe. We need those measures to be agreed quickly, and implemented across as wide a range of European countries as possible. For that reason too, it is important to ratify the treaty of Nice. We are now talking not just about the advantages of expanding the common market and the benefits of trade, but about the advantages that will flow from an enhancement of the ability of EU states to deliver perhaps one of the most fundamental public goods of all: the security of our citizens.
  Chris Grayling: Does the hon. Gentleman believe that the Prime Minister would have enjoyed the freedom to perform the admirable role that he is performing on the world stage in helping the United States to tackle the crisis we all face by offering the military support that this country is offering if this country had subscribed wholeheartedly to a common foreign and defence policy that required us to make decisions on a European rather than a national basis?
  Roger Casale: I am coming to that, but I think part of the reason the Prime Minister has been able to play the role he has played is the desire that the United States has felt to act, together rather than alone in the world. It is for precisely that reason that I think we should exercise leadership within the European context as well, and strengthen our leadership role in Europe too.
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  The treaty of Nice will enhance the EU's capacity to act in the world. I think we all see and support, and we are debating, the leading role that Britain is playing through the present crisis, but, as I have said, we are able to punch above our weight in the world precisely because America is engaged. It is crucial that we also seek to play a leading role in Europe, and ensure that Europe too punches above and not under its weight during the current international crisis.
  I am certainly not one who claims that the European Union is perfect. Indeed, through my work with colleagues in the European Scrutiny Committee I discover more and more of its imperfections every week. Nor do I claim that the EU would be made perfect by the implementation of the Nice treaty. I do, however, see the treaty as part of an historical process—a small new step following on from all the other treaties that made the European Union what it is today, starting with the treaty of Rome in 1958 and proceeding with the Single European Act, the Maastricht treaty and the Amsterdam treaty.
  I believe that, in opposing the treaty of Nice, the Opposition seek to turn their backs on Europe at a time when Europe's citizens look to the European Union to deliver greater security, greater international leadership and greater stability as a foundation for peace. The people of Europe must and, I believe, will see that the EU is more than just a common market—that it must renew its historical mission of 50 years ago to strengthen international resolve in consolidating peace. The EU itself, however, is much in need of reform.
  I was visited this evening by a constituent who had put in a green card, wanting to talk to me about the Nice treaty before this evening's vote. He came to lobby me—to ask me to vote against the treaty. When I asked my constituent, a Mr. Anderson of Graham road, Wimbledon, why he did not want me to vote with the Government for ratification, he told me a story about a European regulation concerning recycling of elements of his refrigerator, which would be more difficult as a result.
  I said "Yes, we must look very critically at regulations presented at European level. Not all of them are doing the good that was intended. But are you aware of the work of the European Scrutiny Committee in the House of Commons? The Committee is there to look at individual regulations, and to weigh the costs and benefits of particular regulations as they relate to the United Kingdom." My constituent said that he was not aware of that.
  I think there is a myth that there is no scrutiny of, and no accountability for, what happens and is proposed in Europe at the level of national Parliaments. A great deal that is done in the European Union is imperfect, and may indeed need to be improved—I am reminded of the suggestion that the EU should do less, but better—but the mechanisms for improvement are in place through, for example, the work of the European Scrutiny Committee. Moreover, as I reminded my constituent, decisions in Brussels are not made by bureaucrats. Regulations may be drafted by civil servants, but they are decided by Ministers of State, who have an important democratic legitimacy as a result.
  It is important to strengthen the democratic accountability of the EU, and I should like that to be done through a continuation of the upgrading of the European

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  Scrutiny Committee's work that took place during the last Parliament. It would be wrong to allow the Opposition to build an argument based on the idea, which is certainly not widely held among Labour Members or anywhere else, that people are claiming that the European Union is perfect. We need the type of reform envisaged in the treaty of Nice precisely because of the imperfection and precisely because we need to improve the capacity to make decisions and the quality of decision making at the European level.
  Very many great challenges still lie ahead. Perhaps the greatest challenge is to overcome the disconnection between the citizens of Europe and the institutions of Europe, as is still being demonstrated in low turnout at European elections. Another challenge—which will not be resolved by the treaty of Nice—is to increase the transparency and democratic accountability of European institutions. Another important challenge, as I said, is to strengthen further the input and role of national Parliaments in the European Union decision-making process.
  I hope that the Select Committee on European Scrutiny will continue to play the role of trying to improve the governance of Europe—a role that we played throughout the intergovernmental conference that led to the treaty of Nice. In future, I hope that not only our Select Committee but national Parliaments more generally will perform that type of role. I also hope that the role of COSACC—Conference of European Affairs Committees—which is the scrutiny committee that brings together representatives from national scrutiny committees, will be enhanced.
  I am sure that, both in the House and across Europe, we shall have many interesting discussions as we prepare and look towards the 2004 intergovernmental conference, which will reshape the future of Europe. However, one thing is certain. Today, by Parliament's ratifying the treaty of Nice, Europe will take one more step towards that future. I believe that our ratification of the treaty will make it a better future.
  To allow Conservative Members to prevent our ratification of the treaty of Nice, as they are seeking to do, would have the effect of diminishing Britain's role in the world and turning the clock back for the European Union by perhaps 50 years, to a time even before the treaty of Rome was signed. It would postpone, perhaps indefinitely, enlargement of the European Union. It would also, in the post-11 September world, compromise the European Union's ability to take collective action to combat terrorism.
  I urge all hon. Members to join Labour Members in the Lobby to ratify the treaty of Nice. Our citizens want, need and deserve the security, prosperity and leadership that the European Union is being challenged—perhaps more so than ever before—to offer. I believe that the European Union now faces its greatest test: to show that it can deliver for the citizens of Europe. Let us ratify the treaty of Nice and enlarge the European Union, and let that test begin.
  7.23 pm
  Rev. Ian Paisley: I am one of the diminishing number of hon. Members who voted in this place on the original legislation to take our United Kingdom into the Common Market. As is well known in the House, I voted against that legislation and am still
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  opposed to it. We had a very warm and hot debate on that occasion, which ended with one of the Labour Whips using his Hansard report to batter the head of the then Liberal leader. There were other very warm scenes in that debate.
  I believe that the sovereign states of Europe should co-operate fully together when they willingly want to co-operate together, in the spheres in which they want to practise that co-operation. I do not believe in the incorporation of sovereign states in a super-European state. Today, we have heard talk in the House about federalism, but we are not talking about that. Federalism is a policy by which so many people with so much power decide voluntarily to surrender part of that power and establish a federal system. That is not the system in Europe.
  Mr. Prodi thinks that he has all the power. He does not ask us whether we would like to give up some power, but tells us, "We have this power, and we give you some say in how that power is used." The hon. Member for Wimbledon (Roger Casale) referred to the many European directives. To deal with those directives, however, the House is offered only a scrutiny Committee. Even if that Committee said to Europe that it did not like a directive and voted unanimously against it, and even if the House endorsed that view, that would make no difference; the European law would stand.
  In the earlier debates to which I referred one of the main arguments used to sell Europe to the House was that none of our sovereignty would be diminished. I do not think that, today, anyone looking back on our history would say that that is true; there has been a diminution in the sovereignty of the House. We know that because many cases of European law have made it clear that the House can only take note of decisions made in Europe. We do not have the power to change those decisions.
  We were also told that we would have a power of veto, so that if the United Kingdom did not like what was being done in Europe, it could stop it. As we all know, however, there has been a great change in the voting system in Europe and we do not have a power of veto. In fact, much of the power of the majority is being diminished.
  When we went into Europe, we had a master-card in one of our industries—the fishing industry. Britain had control of the largest part of the seas of the common market. What has happened? Now, we have to go with a begging bowl to Europe even to have the right to fish our own seas. I remind the House that we got into that serious situation because of the enlargement of Europe. Spain was one of the countries that entered the European Union, and it drove its ships right through the barriers that had been erected.
  Some hon. Members know the sad story of our fleets. The Northern Ireland fleet has been cut in half, and now another third of it will be sacrificed. Around the shores of the United Kingdom mainland there is a dearth in the fishing industry. When we entered the common market we had full control and full authority in our own hands. Where did that control and authority go?
  The new European Commission President, President Prodi, has taken to issuing statements on what will happen in Europe. The French Prime Minister, too, has issued his theory of what will happen in Europe. However, what is really happening in Europe is that the power of national

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  Parliaments is being slowly diminished and debased, so that those Parliaments do not have the power to stop events in Europe.
  Some have said that we have done well out of Europe, but Northern Ireland has not done well. Per head of population, Northern Ireland has not received back from Europe the money that it has paid in as a member of the United Kingdom. One would have thought that, by this time, we would have had that much. Until recently, the south of Ireland was receiving £5 million per day from the common market. That money has stopped now and, as we know, the Celtic tiger of its economy is going down the drain—we hear announcements daily on its vast economic drift. We have to face up to those issues.
  Will our economy advance if we bring in other states? This country's farming economy will certainly not advance when we bring in the other countries of Europe. There will be produce on the market with which our farmers cannot contend. Our farmers have to meet the standards that we demand in our food production and ensure that those standards are upheld, whereas some of the countries that will be brought in adhere to very low standards indeed. Those of us who know something about the workings of the European Parliament know that when Greece joined with its low standards of agriculture, subsidies to the rest were withdrawn and an attempt was made to raise Greek agriculture to a decent standard. If that happens with all the countries that wish to join at present, I do not know what will happen to agriculture. More and more people are coming to realise that the common agricultural policy is not good for farmers or for the housewife, and the House should carefully consider that issue. I will, of course, vote against the treaty tonight.
  7.31 pm
  Dr. Stephen Ladyman: In my parliamentary career, I have usually been called at about ten minutes to 9, by which time the Whips are telling me to keep my contribution down to five minutes, so I am grateful to catch your eye so early, Mr. Deputy Speaker. However, I shall bear in mind your admonition and be as brief as possible so that others can make their contributions to the debate.
  It is an honour to take part in a debate that has included a contribution from the hon. Member for Wantage (Mr. Jackson), who is unfortunately not in his place at the moment. He has the honour—if I may call it that—of being the only hon. Member who has beaten me in an election. I stood against him in 1987, but despite that he was the first Member to greet me when I arrived here in 1997 and to give me a kindly welcome to the House. It is a pleasure for me to be on the same side of the argument with him tonight.
  It was also a pleasure to follow the passionate and eloquent remarks of the hon. Member for North Antrim (Rev. Ian Paisley). He mentioned the pooling—or the loss, as he would put it—of sovereignty that this country has experienced as a result of joining the European Union, but we chose to do so voluntarily. We made a democratic decision to put our sovereignty into the pool because we perceived that we would get democratic benefits from doing so. If those benefits have not materialised, we have serious work to do to obtain them. The fact remains that
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  we took the decision to give up some of our freedom because we felt that that would increase our influence and effectiveness.
  As the hon. Gentleman spoke, I was reminded of my experience in the past few years of coaching a boys' football team in my constituency. I started coaching them when they were nine, and finished last year when they were 16. When they were nine, they were tiny little boys who each felt that they had complete freedom to run anywhere they liked on the pitch. We more or less convinced the goalkeeper that he had to stay towards the back, but the rest felt that they could do whatever they liked. When one got the ball, it was head down and straight for the goal, with not a thought of passing it or involving any other member of the team. Over the years of coaching that football team, we convinced them that they would be more effective if, instead of playing as 11 individuals, they were a team of 11 players. They had more impact for their effort if they limited their personal freedom and one stayed on the left wing, one stayed on the right wing, one of them went up front, some of them stayed in the middle and some stayed at the back. They limited their freedom, but they became more effective and won more matches. They got more bang for their buck. In other words they pooled their personal sovereignty, but they got something back for it, just as we did as a nation when we joined NATO.
  Earlier, we discussed article 5, which is a far greater pooling of sovereignty than anything in the treaty of Nice. It requires us, almost with no ability to modify our undertaking, to go to the aid of any nation in NATO that is under attack. We have no choice in the matter because we have agreed that if one of our NATO colleagues is attacked we will go to war to defend it. We gave up our freedom of action because it made us safer and gave us the power of those other countries at our back to protect us in our turn.
  If the events of 11 September have done anything, they have made hon. Members of all parties rethink our views and positions in politics, and our country's position. We have seen how the freedom that we have as an individual nation has allowed us to act flexibly and forcefully. We have seen my right hon. Friend the Prime Minister take a position of influence on the world stage because we have acted effectively as an individual country. It may therefore have crossed some people's minds that we should be a power by ourselves again, forming ad hoc alliances and coalitions as necessary. However, the message that I get from the events of 11 September is that it is only by working together, pooling power, working with other people and forming coalitions that we will achieve anything.
  The vision that I have continued to develop since the terrible events of 11 September is of a European Union that could find ways to make decisions more quickly and act on them more effectively. We have all seen how decisions in the United Nations can come down to the lowest common acceptable denominator. The European Union should not make decisions in that way, as has been part of the problem over the years, because we need a European Union that works collectively to look after its member states' interests. We should know that the interests of the Spanish, the Italians, the French and the Germans are our interests. We should do what is in their interests, knowing that they will do what is in our

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  interests. Then we could make decisions together properly and effectively. The treaty of Nice is about starting that process.
  The treaty is about extending qualified majority voting so that we can make decisions in that way. The only criticism that I have of the treaty in the light of what happened on 11 September is that the issues to which QMV will be extended seem puny and paltry. We should perhaps consider extending them to broader areas to improve our effectiveness. I therefore welcome the decision by the Swedish presidency to open up the debate on the democratisation of Europe and bringing power back to the people. I hope that we ratify the treaty of Nice tonight and move on to the next treaty, which should consider second chambers and the representation of national Parliaments in Europe. We should start the process of integration and of aiming to work together more effectively.
  Sometimes our constituents do not recognise the arcane discussions that we have about sovereignty, the treaty and various articles. They look to what the EU can do for them, and I have no problem with that. My constituency of South Thanet is in east Kent, and we probably get more benefits from Europe than anywhere else. Enlargement will mean a large share for us of that annual £1.76 billion of extra business. It will mean more exports from east Kent businesses and more jobs in east Kent in transport, manufacturing and services.
  I can already show my constituents what we have done with objective 2 money in Thanet, which still has one of the highest unemployment rates in the UK. It was the EU that came to our aid with money when the then British Government would not. I can show my constituents what Europe has built for us. I can show them estates where adolescents—they are just kids, really—are already alcoholics on bootlegged booze. The only way to deal with that problem is to address the movement of alcohol and bootlegging across Europe. I can show them drug addicts and tell them about what the EU is doing to crack down on the movement of drugs. I can tell them about our current security concerns regarding the channel tunnel, Manston airport or the ports at Dover and Ramsgate. We can deal with those security problems only as part of the European Union.
  Big words like constitutional issues and democratisation are very important to us in the House when we talk about the future of Europe, but other things matter more in the street. We must always keep in mind the vision that the EU means that our country will be stronger and more prosperous.
  Finally, it has been said that the EU has brought an end to war in Europe. We remember the horrors of the second world war, but the war in Europe has is been going on for 3,000 years. Those who doubt that should come to my constituency. I can show them Richborough castle, which was built by Julius Caesar, or the beaches where the Vikings landed. I can show them where Hengist and Horsa arrived from Saxony, and decided to stay and build the English nation. I can show them Ramsgate, built to fight Napoleon, or the business park—now occupied by Pfizer, the pharmaceutical company—that was built as part of the fighting effort in the first world war. I can take them to Manston airport, one of the bases involved in the battle of Britain.
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  We have been fighting the Europeans for thousands of years, but the existence of the European Union means that that battle is at an end. It means that we are bringing security to Europe, as well as prosperity. The treaty of Nice aids that process, and the House should ratify it tonight.
  7.42 pm
  Mr. Jonathan Djanogly: I enjoyed the speech by the hon. Member for South Thanet (Dr. Ladyman), and the football analogy that he made. However, a football match lasts only for an afternoon, whereas when currencies, freedoms and vetoes are given up, they are given up for ever. That is an important distinction.
  I certainly want a forward-looking Europe, but the Bill could lead to a regressive Europe. We want Europe to seek to expand its borders and to enhance its citizens' security, but the Bill will act to compound the introspective, exclusive, rich-member-club mentality that currently pervades many of Europe's institutions.
  To my mind, the Europe of the future should place our destiny in the context of the world economy. The new reality is one of reduced tariffs, and there is a move towards ending protectionism. I fear, however, that this Bill will serve to hide Europe under a stone, and that it will defer the inevitable impact of world competition, improved technology and communications, and the massive strides achieved over recent years by the lightly regulated developing nations.
  The weakening in the treaty of the position of the individual member state is clear. It is evident in article 4 of protocol A, which relates to the size of the European Commission. It reduces the number of Commissioners for Britain, France, Germany and Italy and will reduce the number again when the EU expands to 27 members.
  That weakening is also evident in article 214.2, which provides that the Commission President would be nominated by member states acting by qualified majority voting rather than by unanimity. It is also evident in the re-weighting of member states' votes. That re-weighting means that, in a union of 27 states, the United Kingdom's votes will fall from 12.2 per cent. of the total to 8.4 per cent. That point has not been made yet this evening.
  Mr. Hendrick: Does the hon. Gentleman agree that the UK's position will in fact be greatly enhanced? We have the same number of weighted votes—29—as Germany, even though that country has a population of 82 million, which is 25 million more than our 57 million?
  Mr. Djanogly: That point has been made several times in this debate. The distribution of weighted votes changes as the number of member states rises. After enlargement, the UK's position is likely to deteriorate.
  Of the existing 70 treaty articles requiring unanimity, some 29 are moved to qualified majority voting, and it is important that people fully realise how we will be undermining our current veto powers in many key areas. The point was made very clearly by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). Those areas include external border checks, conditions for freedom of movement for third-country nationals, asylum laws, financial assistance to aid member states in financial difficulties, the introduction of the euro, trade policy,

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  social provisions concerning working conditions and social exclusion, support for industry, economic co-operation with third countries, procedures and rules for the Court of Auditors and procedures for allowing other states to join. To my mind, there is therefore no doubt that the effect of the treaty will be to reduce our veto powers and thereby our power within the EU.
  The treaty goes much further, however. The Bill assumes that by weakening the powers of individual nation states, European institutions will somehow become more adaptable to an enlarged union. To my mind, that is an exercise in papering over the cracks. The problems of the European Union will not be solved by tinkering with the voting systems of its institutions, as the problems do not mainly lie with how votes are cast but with the institutions themselves.
  The European Union seems to find it very easy to blame its difficulties on what it sees as its current unwieldy voting systems. It frequently blames the slowness of the enlargement process on the candidate member states' economies, yet it remains reluctant to look into its own structural problems. We need to realise that countries in the east of Europe frequently operate their economies more efficiently than we operate ours. It is all too easy to assume that those countries are backward and ought to comply with our own—sometimes outdated—institutions and regulations.
  The Nice treaty almost totally ignores that reality. It looks at ways of bolstering the inadequate institutions of the EU. For instance, its effect will not in any way amend the provisions of the common agricultural policy. Many hon. Members have mentioned the CAP in the debate, but the treaty will provide additional mechanisms to keep new member states out of the CAP.
  It is true that there are more farmers in Poland than in the rest of Europe added together, and that the cost of the CAP would mean that it probably would not last a week there, if it were adopted. However, the position of agriculture will not be improved by banning Poland's access to the CAP and by effectively introducing double trading conditions for agricultural products from the east. I should be interested to hear from the Minister how the European institutions are likely to be strengthened by the treaty, or how the basic community concept of free movement of goods and services will be enhanced.
  Article 137 of the treaty will subject to qualified majority voting social provisions concerning health and safety at work, working conditions, information and consultation of workers, social exclusion and modernisation of social protection systems. Again, it is quite clear what the aim is. The provisions will be used as a method of curtailing the competitive advantage of eastern states that have lower labour and production costs than we do. I predict that it will also be used to force the UK to adopt more and more European employment regulations, each of which will continue to chip away at our own country's relatively free economy—or what is left of it after this Government's adoption of the social chapter and the raft of new regulations introduced over recent years. Further proposed regulations—such as paternity rights, and statutory rights for paid leave for adoptive parents—will also have an effect. Article 137 will certainly not aid European enlargement in any way.
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  In the same way, article 157, which it requires the EU to ensure that the conditions necessary for the competitiveness of its industry exist, could well become a licence to intervene in the businesses of nation states, thus reducing their efficiency, disrupting market forces and creating yet more uneven and politically motivated playing fields. Furthermore, it would be interesting to know whether the Government have considered the costs involved in supporting outdated industries in the context of the Bill, as this policy could be extremely costly.
  The days when the Government and the European Union said that they did not want a two-speed Europe are long gone. Now it is quite the reverse. The treaty of Nice is clearly aimed at enabling a multi-class Europe in which certain members can be made second-class citizens to shore up the outdated institutions that were formed on the premise of a single-speed Europe.
  In theory, the new voting proposals adopting the concept of a multi-speed Europe could have been drafted so as to provide a flexibility that would have enabled member states to opt out of further integration proposals to which they may have objected, but the abolition of vetoes makes that unlikely. In practice, I fear that we will see the levelling down of members' competitive advantages, the banning of goods from new eastern European members, and the restriction of their people's freedom to work in the west. Unfortunately, rather than aiding enlargement, the treaty of Nice could be used as a baton to reinforce a sophisticated anti-dumping strategy against new eastern European members in particular.
  So far I have expressed my concerns about the further loss of our national competitive trade advantages and about how the treaty could effectively be used to hinder rather than aid enlargement. However, I believe that we need to put the treaty of Nice into the global context. Here, too, I have concerns.
  One of the effects of the Nice treaty will be to provide the mechanics to support the collection of values, many of them alien to the traditions of this country, that have been built up in western European countries over the past few decades. I refer to the cults of bureaucracy, politically motivated redistribution and inefficient welfare systems. Many eastern European countries are prepared to pay a very high cost for entry to the European Union, so they may well agree to bear the pain of entry—to lose their competitive advantages, to accept being regarded as second-class European citizens and to turn a blind eye to the excesses of "welfarism" to which they will have to subject their young economies. We can, at the same time, be fairly sure that the countries of the far east and the developing countries of the Indian subcontinent, Africa and south America are unlikely to follow the same route.
  We live in a global economy—a massive trading area where competition is fierce, the World Trade Organisation is breaking down tariffs and protectionism against developing countries, and wage and production costs are already lower. That is the direction in which we are heading.
  The dissolution of the old eastern bloc has made international relations more, not less, complicated. Our recent requests for developing countries' help in maintaining the so-called new world order might not come cheap. Is there any truth in the report that Pakistan is to have a number of the tariffs on its products cut or

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  abolished as part of the arrangements for our war on terrorism? In any event, my point is that the world is moving towards free trade and low production costs, while the Nice treaty will be used for the opposite effect.
  I recently spoke to the owner of some call centres in the United Kingdom. The company has recently set up a call centre in India, employing graduates who speak perfect English and cost one fifth of UK equivalent employees. Modern communications mean that calls made to India cost the same as those to a call centre in Glasgow. Thousands of what would have been British jobs are to be lost and we do not seem to appreciate that globalisation is no longer a future threat but a present reality. Indeed, the European Union as a whole does not seem to appreciate that.
  The question arises as to whether the forces of federalism in Europe actually want enlargement of the Union. If new member states join before federalism is achieved, it is unlikely that the cause of federalism will be advanced by any of the new members. Could this be part of the reason why a treaty that was meant to be instituted for the purposes of encouraging enlargement could be used for the opposite effect? Could member states that support federalism be holding back on allowing enlargement until such time as plans for federalism are in place, effectively using enlargement as a bargaining chip for their own ends?
  The issue will become clearer as we head for the constitutional conference planned by the European Union for 2004. However, I suggest that the countries of eastern Europe are worth more than bargaining chips, and that we ignore the urgent need to widen the Union and enhance European security at our peril.
  Europe is at an important crossroads. We can accept the inevitability of the global economy and use the opportunity of enlargement to restructure our European institutions, embrace the new economy and sustain our long-term viability. Alternatively, we can stifle what enterprise and competitive advantages still remain on our continent.
  To my mind, the treaty of Nice will be used to facilitate the latter option. That will, I am sure, be to the detriment of British business and employment prospects. That is why I continue to oppose the Bill.
  7.56 pm
  Mr. Chris Bryant: I had intended to start my speech by saying that the single word "Europe" seems to inspire extraordinary feats of imaginative power, but I had not reckoned on the speech of the hon. Member for Huntingdon (Mr. Djanogly). It seemed to beat even the imaginative powers of Nicholas Ridley, who said years ago of the European Union:
  "This is all a German racket designed to take over the whole of Europe."
  Myths and misunderstandings may not matter in many areas of life. I say that as someone who, as a child, believed for many years not only in Santa Claus but that the Lord's prayer went, "Our Father, a chart in heaven, Harold be thy name." Why Harold should have been His name, I have no idea. I was also confused in the collects by the author of peace and the lover of concord, which at least had some European context.
  It is very important that we do not have myths and misunderstandings about this issue. When I go round my constituency in the Rhondda, it is very rare for anybody
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  to mention the European Union to me. However, a few people do and one of the most common things said is, "I voted for a common market, not the European Union." We have heard that sentiment several times today from Conservative Members.
  To say that there is a difference between a common market and the European Union is a false dichotomy. The free movement of goods when it comes to buying cars at EU prices in this country should, of course, be easier. However, without addressing issues of state aid and unfair competition from article 87, which was article 92 in the treaty, it will be impossible to bring about a common market.
  The United Kingdom is the only country in the world, apart from the United States of America, that has a positive balance of trade in audio-visual services. If we are to achieve further gains in selling our television programmes, films and CDs in France, Germany and Italy, we will have to change copyright law and ensure further harmonisation across the EU.
  Mr. John Redwood: Will the hon. Gentleman give way?
  Mr. Bryant: The right hon. Gentleman has been here for hardly any of the debate, so I do not think that I will give way.
  Mr. Redwood rose—
  Mr. Bryant: No, I will not give way. The right hon. Gentleman has not been here for long and some of us have suffered extremely lengthy speeches from his colleagues.
  Chris Grayling: I thank the hon. Gentleman for giving way to me. As he is not certain about the difference between the common market and the European Union, may I ask him to comment on a specific example? I have friends in the police force who were forced to change their shift pattern as a result of a European directive. They did not want to, but had to change to a pattern that made them more tired and meant that they enjoyed the job less and did it less effectively. Why is it necessary for decisions about the shift patterns of our police forces to be dictated at a supranational level?
  Mr. Bryant: I do not know the instance to which the hon. Gentleman refers, but on the broader issue of how we achieve a common market, we have to stray into areas that might otherwise be considered to have nothing to do with trade. As I said, copyright could be considered to be an area that is primarily of cultural significance and, therefore, the prerogative solely of member states, but if we are to achieve a common market in audio-visual services, we have to consider copyright.
  Dr. Ladyman: The same directive to which the hon. Member for Epsom and Ewell (Chris Grayling) referred provided tens of thousands of people with holidays for the first time.
  Mr. Bryant: Indeed.
  There is now a common European market in drugs. That is an established fact and, therefore, we have to have a common law enforcement policy. It need not cover

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  every detail, but we need enhanced co-operation between the police and other organisations throughout Europe if we are to deal with a problem that affects us in this country.
  One can produce countless examples to show that trying merely to produce a common market for which people originally voted requires us now to stray into areas that might otherwise be considered as creating a union. What people voted for many years ago is also no longer relevant because the world has changed. When I was born, people did not travel as much as they do now. The health service in other countries now matters just as much to my constituents as the health service in this country, not least because a quarter of them travel to Spain every year. Whether they receive support from the health service in Spain, and the quality of that service, are what matters to them. It also matters to them whether the aeroplane in which they are travelling has met certain safety standards and whether health and safety regulations are incorporated in the laws of Spain, France, Italy, Germany and all the other countries they visit. Consumer protection is an essential part of the changed world, which we must now incorporate to meet the original objectives of the union.
  Another misunderstanding that has been perpetrated by Conservative Members is that it is an issue of either the United States or the European Union—we have to be with one or the other. That view is particularly prevalent on the Tory Benches and may, indeed, be shared by the Leader of the Opposition, the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith). I gather that one of his prominent supporters in the Chingford Conservative party told him immediately after he announced that he was standing for the leadership that he would rather be in the 53rd state of America than join Europe, and apparently the right hon. Gentleman agreed. We will ignore the figures, which are obviously a mistake—but Conservatives are not very good on facts. It is patently untrue that Britain has to make a single choice between the United States of America and the European Union.
  My rather more obscure difficulty with some of the views expressed today—another myth—stems from further back, to 1848, when Palmerston said:
  "We have no eternal allies and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow."
  Those words are often repeated. It is profoundly wrong that we should now try to maintain that view as the foundation stone of our diplomatic efforts. As we must know by now, allies for a day are not allies that are worth having any longer. True patriotic diplomacy builds long-term, not just short-term, alliances. Our interests change from year to year.
  On the treaty, we need to ask only three questions. The first is whether further reform is desirable and/or necessary. We have already heard the Conservative answer. We heard it in May 1992 when, in his maiden speech, the Leader of the Opposition said:
  "If now is not the time to put the line in the sand and say, 'Thus far and no further', when are we to say that?"—[Official Report, 20 May 1992; Vol. 208, c. 357.]
  He was referring to the Maastricht treaty—and Conservative Members clearly agree with that view now, judging from what they have said today.
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  At that time, however, the right hon. Gentleman seemed to oppose any change. Even if that treaty had been changed, as the shadow Foreign Secretary suggested we might change this treaty in some a-la-carte way to make it acceptable, it would not have been improved in his view—this is obscure, I fear. He also said that a bite from a Rottweiller hurts just as much as a bite from a Pekinese. [Interruption.] That was the view of the Leader of the Opposition, who was wrong then and is wrong now.
  Enlargement is vital. Whatever some hon. Members have said, it is at the heart of the issue under debate. Improved trade for United Kingdom businesses will undoubtedly follow from enlargement. The hon. Member for North Antrim (Rev. Ian Paisley) referred to the problems when Spain acceded to the EU, but British trade with Spain increased by 40 per cent. in the two years following its accession. We can expect similar benefits for British industry with the accession of the other 12 applicant members.
  United Kingdom industy needs to compete on a level playing field with that of Poland and the other countries that will be coming into the EU. That will not happen unless we advance enlargement at some speed. Furthermore, we need the applicant countries to adopt the principles that we have to adopt on state aid. Improved travel safety throughout the 12 applicant countries would also be good. Hon. Members have also said that politics in eastern Europe will be stabilised, which would be an essential result of enlargement. I submit to Conservative Members that that cannot happen unless the decision-making processes of the EU—in the Council, the Commission and the Parliament—change. There are too many Commissioners. There should be fewer if the Commission is to do its business effectively and expeditiously. It is unimaginable for 27 countries to produce 35 Commissioners. The process of appointing the President of the Commission is unsustainable now, and would be even more so. If we do not make the changes required by the treaty of Nice, it will lead to poor decisions. The common commercial policy of article 214 is a significant advance, as is the improved article 31, which will make a significant difference for this country.
  We need to improve the effectiveness of the EU in international negotiations. The French determination to ensure that cultural and intellectual property issues are always treated under unanimity may in the long term prove to be a mistake for this country. Of course, we need the speeding up of the Court of First Instance and the European Court of Justice, which will be expedited by the treaty.
  Therefore, the first question we must ask is whether reform is desirable and/or necessary, but the next question is whether it is a good deal for the UK. Contrary to what the hon. Member for Huntingdon (Mr. Djanogly) said in his inaccurate portrayal of re-weighting in the Council and the reassignation of votes, Britain will get a better deal. Furthermore, our ability to block proposals that will not be in our interests will be improved. Unanimity on tax, social security, defence, budget, border controls and treaty change will be preserved, which is essential—it is what we went into this process hoping to achieve.
  Finally, we must ask ourselves whether this is the right time for us to ratify the treaty. Contrary to what several Conservative Members said, if we vote against ratification this evening we will undoubtedly delay enlargement. One hon. Member suggested that it would be possible to call

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  an intergovernmental conference tomorrow if we really wanted to. Clearly, that is living in cloud cuckoo land. The processes of unpicking the treaty and reconstituting another would take a considerable number of months. Furthermore, if this country were to say that we did not want to go forward with ratification. I would doubt that we would see enlargement in the next 10 years, let alone the next 10 months.
  On the Irish referendum, I recognise that the unanimity principle should, and always will, apply to treaty change, but that does not mean that because one small country has voted, every other country must adopt exactly the same position as that first country. It is a profoundly undemocratic process to say, "They have decided, so we cannot even take a decision for ourselves."
  Mr. Hendrick: What was my hon. Friend's view on the slogan that was used by the eventual victors in the referendum in Ireland:
  "If you don't know, vote No"?
  Was it a victory for ignorance or for common sense?
  Mr. Bryant: I thank my hon. Friend. I started my comments this evening by saying that the great myth-making machine that has spread itself throughout the European Union, largely assisted by members of the Conservative party as they wander around Europe, has been profoundly unhelpful to the debate and has made it far more difficult for Britain to get advantages for our country.
  I agree in the end with the words of de Gaulle in 1959: "Yes, it is Europe, from the Atlantic to the Urals, it is Europe, the whole of Europe that will decide the fate of the world."
  It is a unique moment in the post-war history of the world for Europe to act as the world champion for democracy, for internationalism, for justice and, indeed, for peace. We can take that forward only if we ratify the treaty.
  8.11 pm
  Mr. Hugo Swire: We have gone over quite a lot of old ground this afternoon, leading me to misquote the late great F.E. Smith—leaving me perhaps none the wiser, but certainly better informed. I shall try not to cover that old ground, but instead concentrate on the matter before us tonight.
  The treaty of Nice, we were told, is vital to the enlargement process. Indeed, the Government's election manifesto claimed:
  "It is vital we ratify the Treaty of Nice which is essential to enlargement"—
  so it must be true. But as we heard this afternoon, on 7 June this year the Irish—a small nation, I grant you—voted against the Nice treaty, and those 54 per cent. of Irish citizens who ticked the "No" box on their ballot papers effectively threw a spanner in the works of the European Union machine, so much so that we were told that the "No" vote was
  "a slap in the face of the applicant countries".
  The Germans "regretted the Irish decision". The Slovaks were "disappointed by the vote". Those sentiments were understandable. After all, was not the treaty about enlargement? The treaty was dead, or at least on hold, so it stands that enlargement, too, must be in the same
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  predicament. As if to confirm that view, Romano Prodi hot-footed it over to Ireland to reassure the Irish that they had misunderstood the treaty and that all would be well.
  However, enlargement was not totally dead. In an interview with The Irish Times—these are not off-the-cuff remarks, as suggested by my hon. Friend the Member for Wantage (Mr. Jackson)—Mr. Prodi explained that "thankfully", the treaty of Amsterdam allowed for enlargement of up to a total of 20 countries. He continued:
  "It's without any problem up to 20 members, and those beyond 20 members have only to put in the accession agreement some notes of change, some clause. But legally, it's not necessary. This does not mean the Irish referendum is not important. But from this specific point of view, enlargement is possible without Nice".
  Enlargement will go ahead, irrespective. Even on the day of the referendum, the European Commissioner for Enlargement, Mr. Günter Verheugen, said that a "No" vote in Ireland's referendum
  "would not affect the enlargement process. We would continue with the same speed and the same quality."
  Could enlargement be possible without Nice? It must be so, despite mixed signals from the Foreign Secretary, who said in the Chamber:
  "It is true that a treaty is necessary for enlargement; it is not true in a legal and technical sense that the Nice treaty is necessary for enlargement. We would have to have an alternative treaty. Nice is what is available at the moment."—[Official Report, 22 June 2001; Vol. 370, c. 287.]
  Those sentiments were reiterated this afternoon, and are reiterated now and again, by the Minister for Europe.
  Was Nice about enlargement? After all that hype and hot air, was it really relevant to enlargement? Closer examination of the documents that emanated from Nice reveal a different story. The truth is that the bulk of the business at Nice had nothing to do with enlargement. Members may have been surprised to hear from my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) that the annexes detailing the process for enlargement account for only about 5 per cent. of the contents of the treaty and the presidency conclusions. So much for Nice being all about enlargement. The amendments proposed by the Nice treaty are not yet in force, nor will they be until at least the end of 2002. It is reported that a second Irish referendum will not take place until after the Irish general election, which must be held by June 2002, and no doubt pressure will be brought to bear on the recalcitrant Irish between now and then.
  As I have said, we are assured that enlargement will go ahead irrespective, so I ask again, what was Nice really about? Opposition Members have been strong supporters of the enlargement process. We said—and speaker after speaker has said it again this afternoon—that we would ratify tomorrow a treaty that was genuinely about enlargement. Therefore, we are right to oppose the Bill. It has virtually nothing to do with enlargement, and anyway, as my right hon. Friend the Member for Devizes (Mr. Ancram) said, we may like the lock, but we do not like the stock and the barrels.
  I add one remark before I finish. Our Belgian friends hold the presidency of the European Union. To put them out of their misery, will someone please tell them the truth

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  behind the Nice treaty? They, too, are labouring under a misapprehension. The Belgian presidency makes much of future enlargement:
  "With the new Treaty of Nice, the door has been opened once and for all for the biggest enlargement operation in the history of the European Union"—
  not, as we have heard this afternoon, that the Belgian Government have done much to ratify the treaty.
  Only one thing will genuinely pave the way for successful enlargement, and it is not the Nice treaty. I say that as one who passionately believes in enlargement. My right hon. Friend the Member for Devizes has an Italian grandmother. We heard that the right hon. and learned Member for North-East Fife (Mr. Campbell) had a Glaswegian grandmother. Well, I have a Slovenian mother-in-law, desperate to be enlarged—or rather, desperate for the land of her birth to be admitted into the family of Europe—and I suspect that she is influenced by her upbringing in a communist environment, an experience that she no doubt shares with the late grandmother of the right hon. and learned Gentleman.
  It is my belief that the only thing that can pave the way for a successful enlargement is reform of the common agricultural policy—a subject that, I note, is treated, whenever mentioned, like the plague. The last attempt, as we all know, at limited reform of the common agricultural policy was made by the German presidency in 1999. I agree with my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), who argued that it is time for the issue to be addressed once and for all. That is certainly what the people to whom I speak in Devon and the west country generally are saying. Without the immediate reform of the CAP, they view all the other arguments and discussions as irrelevant. There is no doubt that people have been left feeling alienated, disconnected and, frankly, bewildered by our discussions on the extension of qualified majority voting and other matters that seem to them to be far removed from their everyday lives.
  In conclusion, the Nice treaty represents a missed opportunity. The Conservative party envisages a modern, forward-looking and flexible Europe, which also addresses the inherent problems that have been discussed in this debate. We will continue to work to that end, but we do not recognise any of that in the Nice treaty, and that is why we shall oppose its ratification.
  8.20 pm
  Jon Trickett: I do not agree with the hon. Member for East Devon (Mr. Swire), who seems to approach the EU with almost theological principles—as, I am afraid, do some of my hon. Friends, but from another point of view. I approach the EU from the point of view of a pragmatist, and most people in Europe share that view. Many of my hon. Friends who have pressed the case to accelerate integration and the deepening of the EU should be very careful about their desire to press forward.
  The people of Europe have generally indicated that they are somewhat disconnected from the political process, especially in relation to the EU. We would be ill advised to disregard the increasing scepticism that the people of Europe feel towards the political class and the European project. To its credit, the EU recognised that problem in a discussion document that was issued during the summer.
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  It is an amazing document; it says, "Look at us—aren't we unpopular?" Some 87 per cent. of the people sampled by the EU for the document said that they had no connection at all to the debate about the Nice treaty—it had no relevance to them. That view occasioned breast beating in the Commission and by the presidency. To try to improve things, they proposed to wipe away 80,000 pages of treaty text and documentation and to simplify the vocabulary that they use in an attempt to increase transparency and accountability.
  If we were to apply the Hemsworth test, or that of any of our constituencies to the EU, we would find that the problem was not so much one of the various treaties, which we may or may not have signed, containing superfluous pages, but whether our constituents and the people of Europe felt that they had access to prosperity. That is the test that we should use to judge the processes of enlargement and integration.
  It is undoubtedly the case that prosperity probably will be enhanced by the EU's enlargement. The Minister referred to a £4 billion increase in gross domestic product. That figure may or may not be accurate, but I have no doubt that an enlarged market would generate increased wealth over time. We know that market economies do not operate in ways that guarantee the equality of access to that prosperity for all the people in that market. The EU's founding fathers and mothers well understood the processes of social exclusion and social division that can work alongside the enhancement of wealth and prosperity. That is why they devised several mechanisms to attempt to safeguard the communities that would suffer from exclusion because of the enlargement and strengthening of the European market.
  I accept that the British economy will benefit from the increased prosperity generated by the EU's enlargement, but it would be preposterous to argue that that will have a completely even effect across all the communities that we represent. It is clear it that further restructuring will take place in the British economy as a result of enlargement. If labour costs in the east are compared with those in the United Kingdom, it is apparent to everyone that British companies may well seek to take advantage of the larger market, but not necessarily by using British labour. In fact, British jobs may be displaced by labour in the east. To take a long-term, historical view, that may not be a bad thing, but we will be failing in our duty if we do not acknowledge that that will be an inevitable consequence of enlargement. The treaty of Nice and the Bill should be used to enhance some of the powers contained in the instruments that the EU devised. I am afraid that, by that test, the treaty of Nice fails.
  I shall briefly refer to three of the available mechanisms, the first of which is the ability of a national Government to use their tax and spending powers to help to control economic activity within their national boundaries. That will certainly be circumscribed if we are to enter into the later stages of monetary union. Most hon. Members will know about the growth and stability pact, which has already led the EU and the Chancellor to cross swords over his spending plans. Given the possibility that the economy will go through a rough period, the growth and stability pact may well impact on the British Government's public expenditure and tax plans. That is worrying and may lead to the circumscribing of the

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  national Government's powers to protect those communities that could be affected by enlargement and the world downturn.
  My second point is that the structural funds were devised in the knowledge that the European market would have a differential impact on different communities—for example, some would suffer from exclusion. That will be the case in the future. Women, migrant groups and those in peripheral areas or areas of traditional industry have all suffered from the restructuring promoted by the EU. All of them were recipients—perhaps insufficiently in some respects—of structural funding, but enlargement of the community to the east poses big questions as to whether structural funds will be adequate to protect communities such as the one that I represent.
  The third mechanism is contentious, but it is an important tool in the armoury of anyone wishing to resist the processes of fragmentation and social exclusion. Article 137, the so-called social chapter, is barely moved forward by this Bill. Given Mr. Deputy Speaker's strictures, I will not go into that matter, but I have studied in detail the social chapter and the documents on it produced by the Library. I believe shat it is possible to argue that article 137 has been weakened. It certainly has not been strengthened and we need such instruments to protect us and to ensure that the prosperity that Ministers and those leading the British nation's negotiations have promised is to be shared by all our communities.
  I utter a word of caution. If we find that enlargement produces further social division and exclusion as the result of the aggregation of wealth elsewhere, we will pay. We have already received a clear warning in the European elections, in various referendums and in the general election that people are becoming disaffected. If they believe that powers are escaping from the nation state and they do not regard the EU as an ally, I fear for the future. With that warning, I look forward with interest to the rest of the debate.
  8.30 pm
  Angus Robertson: I am grateful for the opportunity to speak in this debate, having spoken on earlier stages of the Bill.
  I speak on behalf of the Scottish National party and Plaid Cymru. Our position on EU matters is well established. We are in favour of full national status for Scotland and Wales, with their having equality of status with other member states. We seek a seat at the top table and do not wish to hang on the coat tails of Westminster Ministers. We do not believe that Scotland and Wales are too poor, too stupid or too peripheral to have a direct say at the top table in Europe.
  Mr. kin Luke: The Scottish National party's policy has been one of independence in Europe and has been roundly rejected by the Scottish electorate on numerous occasions. Does the hon. Gentleman think it is worth while to continue to push that policy?
  Angus Robertson: As a democrat, I am always in favour of pushing democratic policies. That is the future for Scotland and the rest of the United Kingdom and Europe. Perhaps even the hon. Gentleman will acknowledge that, from a Scottish and Welsh perspective, there is a certain irony in the fact that our nations are
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  about to be overtaken by accession nations that were formerly members of the Warsaw pact. Quite rightly, they will take their seat at the top table before us.
  I wish to discuss the specifics of the Bill and the two guiding principles of the SNP's and Plaid Cymru's attitude towards it. Many Members have spoken about enlargement and the wish to end the artificial division of our continent—the hon. Member for Wantage (Mr. Jackson) put that case most eloquently. To achieve that end, we will, in a bipartisan spirit, join the non-Eurosceptic parties in the House and vote for the Bill. That is our first guiding principle.
  The second relates to the fact that the Bill will not hinder the progress of Scotland and Wales towards the normality of full national status, should the people of Scotland and Wales desire that. Contrary to the view expressed by some Conservative Members, the Nice treaty entrenches the rights of nation states. Through qualified minority thresholds and provisions for minorities, the EU is a confederal and not a federal Europe. We welcome that.
  In the past, some people hoped for a strong Europe of the regions, and that model has been outlined by my Plaid Cymru colleague, the hon. Member for Ceredigion (Mr. Thomas). Everyone acknowledges that that is no longer a prospect and that the only show in town is full national member status.
  On the re-weighting of Council voting, it is interesting that the Nice treaty makes it explicitly clear for the first time that direct representation by the nations of these islands would secure more votes than Britain is currently entitled to under the treaty. According to the re-weighting and the predication on a population basis incorporated in table 2 of the declaration on the enlargement of the European Union, Scotland would have seven votes, which is seven more than at present; Wales would have four votes, four more than at present; and England could have no fewer than 27 votes. That would give a grand total of 38 votes as opposed to the planned 29. If, as unionists on both sides of the House argue, we always share the same interest, surely it makes sense to increase our voting strength by 40 per cent.
  There are some unresolved issues. During the Committee stage, I asked the Minister to clarify
  "how many MEPs Scotland, Wales and Northern Ireland will have after the ratification of the Nice treaty"
  and enlargement. He replied:
  "That matter has still to be addressed. I am being absolutely frank with the hon. Gentleman when I tell him that the reduction from, I think, 87 to 72 MEPs is a long way into the future."—[Official Report, 18 July 2001; Vol. 371, c. 380.]
  That may be the case, but three months have elapsed since then and it appears that the matter has still not been addressed. That is not good enough. If the reduction is universally applied, Scotland will have the same number of MEPs or fewer than Luxembourg, which has a population similar in size to that of Edinburgh. Scotland has a six-party parliamentary system, so democratic balance will not be served. Wales will have fewer MEPs than Malta, which has a population about the same size as that of Cardiff. Wales has a four-party system and, again, democratic balance will not be served. I was not present when the hon. Member for North Antrim (Rev. Ian Paisley) spoke, but I know that all parties in

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  Northern Ireland are extremely alarmed at the prospect for cross-community representation should their numbers be reduced.
  We were disappointed that Conservative Back Benchers and Government and Tory whips made no effort to allow time for our amendment to deal with that anomaly to be debated or voted on in Committee. If we face a reduction in Scottish, Welsh or Northern Irish MEPs, the point will have been made with great clarity that once again the big UK parties acted against the interests of our countries.
  I want the Minister to address that concern and would welcome an intervention by Labour MPs who represent Scottish or Welsh constituencies. I see that the hon. Member for Dundee, East (Mr. Luke) has just left the Chamber. I think that he hopes to speak and I will welcome his contribution. Unfortunately, the sole Conservative Member who represents a Scottish constituency has not attended the debate. [HON. MEMBERS: "Yes, he has."] If he returns to the Chamber perhaps he will say whether the Conservatives agree that Scotland and Wales deserve to have their levels of representation in the European Parliament reduced. Should Scotland and Wales be directly represented, that difficulty would be academic because our representation would increase to 13 and seven respectively.
  The Nice treaty gives rise to other problematic issues if viewed from a Scottish and Welsh perspective. They were presented during the negotiations in Nice and vetoed by the UK Government, so they are not part of the treaty. That has created an ironic situation. The Labour and Liberal Democrat Executive in the Scottish Parliament have endorsed the policy that there should be direct Scottish representation in the European Court of Justice, but the British Government vetoed that. Again, I should like to know whether our Welsh and especially our Scottish colleagues support the UK Government's policy, which does not favour increasing Scottish direct representation, or whether they support our colleagues in Edinburgh who do.
  It is useful to raise the problematic issues that arose when the Nice treaty was negotiated because it allows hon. Members from outside Scotland and Wales to be aware of the difficulty that we face because of the lack of representation in the UK. When the treaty was negotiated, Scottish Executive Ministers had attended only 9 per cent. of the meetings held by the Council of Ministers. [Interruption.] I hear a Labour Member say, "Shame." I agree entirely. It is disgraceful that they do not take seriously their important role of representing our interests in Europe, although some hon. Members might rightly say that representation at the Council of Ministers is not the most important consideration because many decisions are made beforehand in working groups at an EU level.
  Interestingly, Scottish Executive civil servants attended only 75 of about 4,500 working group meetings—an attendance record of a paltry 1.6 per cent. When the Nice treaty was negotiated, Scotland's Europe Minister, Jack McConnell, had never attended a Council meeting. The Scottish Justice Minister, the Liberal Democrat Jim Wallace, had attended only one and had missed the previous seven. There is absolutely no excuse for that.
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  The difficulties in the negotiations and the unsatisfactory results in many cases show that the current intergovernmental method of treaty reform cannot tackle the challenges that the EU faces. The European Council was well aware of the shortcomings of its decisions and decided therefore to annex to the treaty a declaration describing the steps for the next reform of the EU. The Scottish National party and Plaid Cymru, as part of the Green-European Free Alliance group in the European Parliament, believe that the declaration is ambiguous and postpones for many years—at least until 2004—the deadline for a decision on which direction the EU should take. Furthermore, member states' Governments intend to decide about the next reform of the EU with the usual inefficient and undemocratic method that failed at Maastricht, Amsterdam and Nice—namely, an intergovernmental conference, which would happen in 2004.
  In the declaration there are also aspects that can prepare the way for a decisive change of direction for European integration, away from a mere diplomatic negotiation towards a process open to the participation of member state and sub-state Parliaments, the European Parliament, the Commission and civil society. Building on an inclusive bottom-up democratic process from now to 2004 could also offer a vital opportunity to define new priorities facing the EU.
  Having listed many shortcomings, I return to the key principles with which I started. Is it right that this Bill should be passed to allow enlargement to go forward? The Scottish National party and Plaid Cymru clearly believe that that should he the case; that is why we will be voting with the Government. The second and equally important reason for our support for the Bill is that it does not preclude Scotland and Wales from moving to the normal status of being independent member states of the European Union.
  8.41 pm
  Mr. John Smith: I welcome the opportunity to speak, albeit briefly, in this important debate. I speak in support of the treaty and of endorsing it as quickly as we can.
  I found today's debate entertaining, especially the speeches made by Opposition Members. If today is an example of the way in which Conservative Members have put the European issue behind them since the election, well, it is great stuff, and all power to their elbow. Keep it up lads and lasses, because we absolutely love it.
  Some of the Opposition's arguments have been bizarre. I want to focus on just one of them—the ludicrous propositions they have made on defence. The idea that the Nice treaty will somehow undermine NATO and be the basis for the creation of a European standing army is absolute bunkum, and anyone with a scintilla of intelligence should realise that.
  As a member of the North Atlantic Assembly for the past four and a half years, I have not heard a single voice among parliamentarians who represent the political spectrum from right to left within Europe, the United States and Canada against the development of a foreign and security policy in Europe as set out in the treaty or the related development of a European security and defence policy.
  The only people who have opposed those ideas are Conservative Members and a few of their cronies—their more oddball cronies—in the United States Congress.

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  I have met a couple of those cronies, and part of their problem is that they have been briefed by one or two of the oddballs among Conservative Members, one of whom now stands as the Leader of the Opposition. He addressed the United States Congress-Senate defence committee on two occasions and presented his view of future European defence policy. We nearly fell off our chairs when Senator Gordon Smith told us in a briefing that the proposed European security and defence policy, combined with the European single currency, is a plot to create a socialist federation of Europe. Some of us thought, "If only." Such is the standard of debate that we have heard.
  The Nice treaty could—I am not saying that it certainly will—help us to meet the real throat to NATO, which is declining capability within NATO member states. Only three of four of the NATO allies in Europe have a NATO capability. Let us be clear about what that means. During Kosovo, despite a standing army throughout the European nations totalling 2 million, it was not possible to muster 30,000 troops to intervene in Kosovo. We had to call on our American allies, who were somewhat reluctant to respond—and with good reason: what reason did they have to deliver for us? That, more than anything else, undermines the future of NATO.
  Through the treaty and the related policy of developing a rapid reaction force for Petersberg missions, which range from humanitarian aid to peacekeeping, we could achieve an intensive military capability with a core strength of 60,000 troops—which entails readiness of up to 200,000 troops throughout Europe—who could be used at any time for NATO operations and as NATO assets. If we can achieve that, I will welcome it, because it may—I repeat, I am not saying that it definitely will—address the worrying lack of capability within NATO.
  Mr. Paul Keetch: The hon. Gentleman studies defence issues closely. Is not one of the reasons why the United States supports the creation of the European rapid reaction corps the fact that it perceives that it has been pulled in from time to time to sort out Europe's problems? If we had had a force that could have dealt with Kosovo unaided, there would have been no urgent need for America to become involved. Is that not the real reason why the Americans support the development so much, and why the Conservative party objects to it so strongly?
  Mr. Smith: It is certainly one of the reasons. Not a single voice within the United States Administration has raised a serious objection to the proposal. They see the potential benefits.
  A cursory glance at defence expenditure in European allied countries reveals real-terms cuts of 50 per cent. and more since the end of the cold war, but the true position is worse than that. It is not only the cuts that we inherited four years ago from the Conservative Government that took away our NATO commitment capability, but the fact that money is spent badly. It is not used for a rapid reaction force, heavy-lift capability, or second-line logistics that keep a force in the field for a long time at distance; instead, money continues to be spent on old cold war defence strategies within Europe—to meet the threat of a Soviet or Russian invasion from the east, which is a nonsense.
  The forces behind such spending persist in some countries. It is imperative that we find ways and means to change the political will in those countries so that they
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  increase defence expenditure, enabling them to make a NATO commitment, or—at the very least—so that they improve the way in which they spend their defence resources. That is the bottom line—that is what has to be achieved if NATO is to continue to be the best military alliance in human history.
  I remain deeply concerned after the horrendous events of 11 September. About 6,000 people died, but we must bear it in mind that more than 50,000 people were targeted and that had it not been for the bravery of a few and some luck, the devastation would have been far greater. The day after, or perhaps the day after that, Lord Robertson was prepared to invoke article 5 of the NATO treaty, and the Americans took up the offer. However, NATO's military contribution is just six airborne warning and control system aircraft that will fly to the United States to protect its territory while it releases forces to go into Afghanistan. That is worrying. The truth is that NATO could not have responded to the attack on America had it taken place on allied soil; it could not have delivered. It was only because of American capability and the leadership of our Prime Minister that we have been able to put together an effective coalition.
  Had a similar attack, or perhaps a biological attack targeting 100,000 people, been made in Madrid, Rome or Berlin, I am worried that NATO would not have been able to invoke article 5. Even if it did, I do not think that it could deliver the military punch to back it up, which is why we should support the Bill.
  8.51 pm
  Chris Grayling: I apologise to the House for missing the first part of the debate; I was attending a Select Committee meeting.
  As I have listened to tonight's contributions, I have been mindful of a conversation that I had perhaps 10 years ago in a restaurant in Dresden in eastern Germany with a group of German politicians about the future direction of the European Union. When I questioned the pace of change in the EU, they reacted by saying, "It's going to happen anyway. You've got to be part of it; just get behind us." That process of taking just another step on the road is perhaps the most worrying aspect of the trend towards European integration. I am looking in vain for a clear end point, and I urge the Minister to address the question from this country's perspective. What are we working towards? With what are we integrating? Like colleagues from my previous employment who know senior figures in the European Commission well, I believe that the Commission itself recognises that there is no clearly defined end point to the process of integration that we are going through.
  The treaty represents just another step on the way to that ill-defined end point. What are we creating? Is it a common market, an economic union, a political union or the united states of Europe? One gets different perspectives from different countries and different politicians. This country does not have a clear sense of where it is going in western Europe; it is profoundly worrying that we are apparently walking blindly, taking another step towards integration and the unification of Europe without quite knowing where the end point will be.

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  I am also concerned about democratic accountability and the treaty. It clearly sets out a framework in which, it says, the political parties of western Europe should operate. It states:
  "It is proposed that political parties which do not respect democratic principles and fundamental rights may be the subject of suspension proceedings".
  Against that background, how do we take the views expressed about the vote in Ireland? Is that vote a veto? Does the fact that one part of the EU has democratically said "no" mean that the treaty cannot go ahead? It clearly should. However, it appears that the attitude of the rest of Europe is, "Well, it's a small country; it doesn't matter. Everyone else will ratify the treaty, so we can go ahead anyway."
  I ask Members to look into the future, when another treaty is under consideration. Instead of Ireland being the small country that does not want the treaty, suppose that it is the United Kingdom. Will we have the right to step aside from a treaty in future, or will we be told, "You are just one country among many and you have to accept it"? If it is the latter, I fear for the future of our nation.
  We must also consider the financial support in the treaty for political groupings in Europe. The financial structures that require that financial support should be given only to organisations that have a grouping across five member nations immediately discriminate financially against national politics, as opposed to pan-European politics. Can that be right? Does that not represent a further unnecessary erosion of national sovereignty?
  The treaty represents a further extension of qualified majority voting, under which, for example, European legislation on worker consultation can be forced through against the wishes of the British Government, businesses and community. It will affect companies with only 20 employees, which is nonsense. Yet again, under QMV we have no choice. Why is it necessary for decisions to be taken in Brussels about whether a small business in the UK should consult all its workers? I made a similar point in my intervention on the speech of the hon. Member for Rhondda (Mr. Bryant). Why should such decisions be supranational? Why cannot they be taken in the United Kingdom?
  Finally, there is the military dimension. The hon. Member for Vale of Glamorgan (Mr. Smith) argued strongly that that is an irrelevance. I do not agree. It would be foolhardy in the extreme for this country to subsume its foreign policy and its defence policy into a common European framework.
  Mr. John Smith: I must come back on that. Far from arguing that the defence issue was an irrelevance, I was arguing that it was vital.
  Chris Grayling: The hon. Gentleman's point was that the Opposition were wrong in their view that it is essential to preserve Britain's national sovereignty in defence and foreign policy. He suggested that we should not see the formation of a European defence force as undermining NATO and undermining our ability to function in the international community as we have done for 50 years.
  At this moment of all times, we have the clearest possible demonstration of why it is fundamental that Britain remains a sovereign nation, as we deploy our
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  defences and take foreign policy decisions. We could not offer to the United States the level of unqualified diplomatic and military support that we have done in recent weeks if we had to take decisions about our foreign policy and our defence by committee across Europe.
  I have always counted myself a firm pro-European, but in the past 10 or 15 years Europe has moved on, rather than I. [HON. MEMBERS: "Quite."] I am still pro-European, but I am not in favour of the creation of a European megalith. Step by step, as we move from treaty to treaty, the process of integration develops, we hand over more sovereignty to an international pool, and decisions that should be taken in this country are taken at European level.
  The pooling of European sovereignty belies the fact that if recent history teaches us one lesson, it is that nationalism in Europe is not dead and that the spirit of sovereign nations is not dead. If we subsume ourselves into a European superstate and continue to yield sovereignty in treaty after treaty, we will live to regret it. The Bill represents a treaty too far and should be opposed by the House.
  8.59 pm
  Mr. David Miliband: Many speakers have promised to be brief and have then spoken for 25 minutes, so I promise not to be brief.
  The perspective that I want to introduce to the debate is that of a convinced but frustrated pro-European—a European who believes that daily the case for Europe grows stronger, but also a European who believes that we have much work to do to bridge the gap between the potential of the European Union and its current performance. I do not believe that the EU is broken down—a view shared by both maximalists and sceptics. The EU is a child of post-war reconstruction adapting to the modern world. It is a dynamic process, not a static one. My case is not that the Bill somehow ends all my frustrations with the EU or solves all its problems, but that it sorts out some thorny questions that could block progress on the big issues if they are not dealt with.
  I have considered carefully the arguments advanced by the Opposition on Second Reading and have listened to the debate today. I want to go through some of the arguments that they have put forward.
  Mr. Keetch: The Conservatives.
  Mr. Miliband: I beg the hon. Gentleman's pardon; I wish to speak about the arguments advanced by the Conservatives today.
  First, the Conservatives have argued that the extension of qualified majority voting is somehow contrary to the national interest. The hon. Member for West Suffolk (Mr. Spring) said that he was against the extension of QMV in principle. But the best argument put forward by the Conservatives is that we have been outvoted on the issue of droit de suite. What are the facts about QMV, however? According to the figures that I have, in respect of the hundreds of decisions taken under QMV in 1998, we were outvoted only twice—on fewer occasions than France, Italy and Germany. In 1999, we were not outvoted at all.
  Thanks to QMV, we have been able to secure the e-commerce directive and to liberalise some agricultural trade. We have even been able to override the proposal to

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  label British chocolate as vegelate. So, QMV has its uses. I cannot agree with the hon. Member for West Suffolk that we should be against it in principle. Outside areas that are central to national sovereignty—tax, defence and so on—QMV not only makes sense, but can operate in British interests. After all, that is why the Government extended it in the 1980s. We will not win all the arguments, but enough of them to make it worth while.
  Secondly, the Conservatives have argued that integration would put off east European applicant states, but there is absolutely no evidence to support that view. Those states will be much mote reluctant to join a sclerotic EU that cannot work than me that can function efficiently. Thirdly, we have seen a lot of crocodile tears today about the common agricultural policy, but surely this is the greatest Aunt Sally of them all. Treaty reform is not needed to amend the CAP. As was argued earlier, the 1999 financial perspective started the process, and it will be continued. The truth of the argument about the CAP is that enlargement will force the pace of CAP reform, rather than such reform paving the way to enlargement.
  I shall not speak in detail about the fourth complaint that has been made about the Bill. It was made on Second Reading by the hon. Member for Stone (Mr. Cash), about whose views I shall speak again later. He claimed that the Bill was a German plot. I do not think that that argument can be taken seriously, especially when one considers the facts. At the Nice summit, Chancellor Schrüder put aside the opportunity to argue for greater voting weight for his country than for France in the Council of Ministers. He put aside his national interest in favour of the European one. That is the sort of grown-up politics of which we need to see more, because I think that the UK has something distinctive to offer to the development of the EU.
  During the past three months, I have been participating in a group chaired by the Belgian Prime Minister. I shall continue to do so until December. The group is considering the debate on the future of Europe and how it should be structured in the run-up to the intergovernmental conference of 2004. I am delighted to say that Prime Minister Verhofstad is coming to South Shields next week to test the waters on European issues and find out about local public opinion on some of the matters that we are discussing.
  In the run-up to 2004, my belief is that the debate about institutions has to start with one about substance and policy. The task for the European Council is to start a process that tackles the delivery deficit as much as the democratic one. What sort of institutional reforms would achieve that aim? Now is not the time for blueprints, but I want to put down a few markers.
  First, the IGC has been called partly to give meaning to subsidiarity. Our Prime Minister has proposed a political declaration policed by a second Chamber. Prime Minister Jospin has suggested a standing committee of national parliamentarians, and others have suggested clearer treaty language and sunset clauses in legislation. All those ideas are worthy of discussion. Secondly, the European Council also needs reform. The organisation of the presidency and the establishment of a political guiding hand from each country—a co-ordination council that meets regularly in Brussels—would also add to institutional effectiveness. Thirdly, we need to find a way of propelling forward the open co-ordination method that was developed at Lisbon.
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  I see a key role for the European Commission in that respect. Finally, I think that there is a strong case for expressing clearly the aims, objectives and practices of the European Union in a single treaty. That European constitution could be the clear benchmark for judging the EU's actions. Since there are three years before the IGC, let us also debate whether European citizens and the connection between them and the EU's work might best be served by holding the legislative sessions of the European Council in public so that people can hear the arguments.
  As a new hon. Member, I believed that the Conservative leadership election might lead to Front-Bench Members updating their thinking after Second Reading and developing a more pragmatic approach. I am sorry that the hon. Member for Stone is not present. On Second Reading, he was a humble Back Bencher who attacked his party for failing to offer an immediate referendum not on the Nice treaty but on "the whole European issue".
  Pulling out of Europe is a long-standing passion of the hon. Member for Stone. In 1996, he introduced a Bill that provided for a referendum on withdrawal from the EU. A man should not be judged by his friends, but hon. Members will want to know that co-sponsors included Mr. Jonathan Aitken, Mr. John Townend and, intriguingly, the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith).
  Little did I realise when I listened on Second Reading to the plea for a referendum on withdrawal from the EU that the hon. Member for Stone was auditioning for the Conservative Front Bench. He has achieved his aim. The leader of the Conservative party has said that the party should no longer be "monomaniac" about Europe. Yet he has promoted to the position of shadow AttorneyGeneral—a post that includes a special remit to examine European policy—a man of whom the former Prime Minister, John Major, said:
  "Bill Cash is … obsessive, driven, and, on Europe, frankly a bore. Discussing Europe with Bill is like spending an afternoon with the Ancient Mariner."

  The Conservative party may claim that its dogmatic days are behind it, but there is no clearer sign of its extremism than the fact that the keeper of the anti-European faith is now the keeper of its European policy.
  I do not believe that the Bill is great or historic, but it is necessary. A united Europe, not only in the negative sense of living peacefully together, but positively, as a force for good in our own countries and in the wider world, is more necessary than ever. The Bill helps to make that possible, and I support it on that basis.
  9.7 pm
  Angela Watkinson: I hope the fact that my paternal grandmother was Welsh would satisfy the right hon. and learned Member for North-East Fife (Mr. Campbell), if he were here, of my European credentials.
  The Nice treaty is a crucial step in the development of our relationship with Europe. Although enlargement is only a small element of the Bill, it is welcome. Most applicant countries have large tracts of agricultural land; for example, Poland, which has been mentioned several times this evening. The common agricultural policy

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  cannot possibly be sustained as it currently operates. That reform should have been tackled first to enable enlargement to progress readily.
  It is unfortunate that the treaty is a package deal, which includes the European rapid reaction force. Despite assurances, I continue to have reservations that NATO would be weakened by it. It also covers qualified majority voting, which I shall consider later.
  Europe is our nearest neighbour, and we should be on the best possible terms. There are countless ways in which we can co-operate—environmental issues, trade, tourism and international crime are obvious topics on which to do that. The current crisis of international terrorism is an opportunity for Europe to demonstrate whether it can act and speak as a single entity with support from all its members. However, we must respect the differences of member countries, which have widely varied economies, cultures and needs.
  The differences will be even wider if the treaty is ratified this evening. It will lock them together by increased qualified voting into policies of one size fits all. They may benefit some countries, have a neutral effect on some and disadvantage others. In that way, the loss of control over our own domestic decisions—in which I include how much we spend on our public services, and on local government finance—could lead to policies agreed on the basis of qualified majority voting being imposed on this country when we had voted against them. That would constitute a fundamental erosion of democracy.
  The electorate have the right to expect that representatives for whom they have voted in an election, and could subsequently vote out of office if not satisfied, will formulate the policies that govern their lives. Nice is a further step towards a inward-looking, protectionist, over-regulated, centralised Europe—that politically bound federal European state that is the openly acknowledged aim of France, Germany, Italy and other members.
  Nice would take us in the wrong direction. The future of Europe should be what Charles de Gaulle described as a "Europe des patries"—a flexible group of co-operating but independent self-governing nations. It should focus on clear, overriding issues that transcend national boundaries, with which national Parliaments cannot or do not wish to deal effectively. If the nation state is not able to regulate an area completely or exclusively, electorates will have nothing to lose and everything to gain from international co-operation.
  The question before us tonight, however, is "Who governs Britain?" Europe is our friend, neighbour and trading partner, but we do not need to give up the independence of our Government to prove it—and that would be the effect of our ratifying the Nice treaty tonight. It is a step too far, and I shall vote against it.
  9.11 pm
  Mr. Iain Luke: I am glad to be able to make this late contribution to the debate.
  I hope very much that all of us who believe that Britain's future lies within the European Union will be willing to put the case for continuing constructive participation in the shaping of our joint European future, and for the enlargement of the European Union. We also
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  need to expose the paucity of credible arguments advanced by the Conservative party in opposition to the Government's case.
  As one who grew to maturity as a close observer of the positive and peaceful development of the European Union, first visiting Spain and Portugal when they were in the firm grip of ageing fascist military dictators, I believe that the case for Europe and what it has achieved in the last 50 years must be constantly reiterated.
  No democracy or other organisation can be described as perfect. Indeed, the House of Commons may be a case in point. One of the major recurring themes of civil society has been the efforts of citizens to ensure that the political constitutions by which their lives are directed, regulated and controlled are structured to allow balance, redress and a share of responsibilities between rulers and ruled. In the context of the European dimension, the path to this treaty cannot he seen as a pursuit of political perfection; it must be seen as meeting the need to accommodate the national interests and aspirations of the member states of the European Union. The treaty is just another step on that road.
  The Conservative party's opposition to this parliamentary process of ratification is a spectacle both ironic and distressing. It is ironic in that all the major steps along the road so far have been initiated by the major Opposition party, as a party in government. The accession treaty represented the high point of Edward Heath's premiership, indeed of his whole political career. Mrs. Thatcher willingly agreed to the Single European Act, although it is rumoured that she later had regrets. The Maastricht and Amtsterdam treaties were bravely and successfully piloted by John Major, in the face of the rebellious opposition of a then new Member—now the new leader of the Conservative party.
  As I have said, what we have heard from the major Opposition party tonight—as in earlier debates—is both ironic and depressing. We see the remains of a once great party, now in the process of rejecting the European ideal so eloquently proposed by Winston Churchill in the aftermath of the second world war when he argued for a united states of Europe. Now, in contrast, for the first time we have a Conservative leader and a Conservative party not just rejecting the European ideal, but actively and seriously believing that we should remove ourselves from the mainstream of European decision making and political life.
  Conservative Members have trumpeted in this debate that the treaty of Nice represents a further significant loss of British sovereignty and is a serious attack on what they regard as the British way of life. What rubbish. I do not subscribe to the view that the closer we come to our fellow EU members and the closer we work with them, the less British we become. Indeed, in response to some of the comments made earlier, I ask a question from a specifically Scottish perspective. Has 300 years of membership of the United Kingdom made the Scots less Scottish? The answer is no. I believe that as a nation we Scots have played, and continue to play, a full and active part, in the Union while keeping a distinctive cultural context.
  Angus Robertson: Will the hon. Gentleman give way?
  Mr. Luke: I have to press on, as other hon. Members wish to speak.
  Angus Robertson: Go on.
  Mr. Luke: Other hon. Members wish to speak and I hope to get through my speech as quickly as possible. I shall give the hon. Gentleman the chance to raise the issue with me outside the Chamber.
  Both the Government and the Opposition Front-Bench membership contain a fair smattering of Scots making their mark. Some of them come from an elevated position, whereas others come from a less-elevated one.
  Will this treaty or the euro have any effect on the essential nature of the English or indeed of the United Kingdom dimension? Does EU membership make the Germans less German or the French less French? Does membership make them less likely to promote their national prosperity and jobs? The answer is no. Individual citizens are more concerned about jobs, prosperity and well-being. Ultimately, qualified majority voting has had little impact on those people's daily lives and consciousness.
  Therefore, putting all the humbug to one side, one should view the Bill's proposals as they really are. The proposals are very positive, modest and useful improvements to the way in which the European Union operates, paving the way to enlargement. An enlarged European Union will in turn provide a larger market for British goods and bring greater prosperity to new and current member states and to our constituents.
  Angus Robertson: Will the hon. Gentleman give way?
  Mr. Luke: I really have to press on so that other hon. Members can speak.
  The arguments in support of the United Kingdom's continued active involvement in the affairs of the European Union also are true of Scotland's continued membership of the United Kingdom. The case for an independent Scotland in Europe made by the Scottish National party has been rejected several times. That case, just like the one made today by Conservative Members, runs contrary to the economic, political, social and cultural realities that we face as a country and as parliamentarians. It is a recipe for job losses, unfulfilled potential and an introverted obsession with the past and its redundant jingoism.
  I firmly believe that the best possible deal for Britain will be achieved by staying on the inside track rather than by crashing along the hard shoulder with an eye on a possible early exit from the European Union.
  Last year, in his final speech o the Labour party conference, just before his sad death, Donald Dewar made the point that he was proud of being a Scot, a Briton and a European. For me, those sentiments set the framework in which I shall serve as a Member of Parliament, to achieve the best possible deal for my country and my constituents.
  9.18 pm
  Mr. John Baron: There can be little doubt that this treaty is mainly about political and economic integration and not about enlargement. If hon. Members need proof of that, they have only to look at the circumstances surrounding the Irish referendum. As we all know, before that referendum, it was widely claimed by Commissioners, Members of the European Parliament and European Union members themselves that ratification
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  of the treaty was an essential precondition for enlargement of the European Union. However, when the Irish voted no, the EU itself changed its tune. Romano Prodi, President of the Commission, told the Irish Times:
  "legally it is not necessary … enlargement is possible without Nice".
  Had the European Union been genuinely preparing itself for enlargement, it would have put the common agricultural policy—is the biggest obstacle to enlargement—on the agenda at Nice, but it was not on the agenda. It is therefore clear that the treaty is not about enlargement, but about further creating a framework to achieve full political and economic union.
  By way of illustration, I bring to the attention of the House article 157 of the treaty, which deals with industrial policy, a matter that the treaty commits to co-determination and which was previously subject to a national veto. Article 157 says that the Community and the member states shall ensure that their actions shall be aimed at
  "speeding up the adjustment of industry to structural changes … encouraging an environment favourable to initiative and to the development of undertakings throughout the Community … encouraging an environment favourable to co-operation between undertakings."
  Essentially, that article is a charter for industrial meddlers that will cost us dear. Such vague words will provide limitless scope for Governments and the EU to intervene in industry. Now that article 157 is subject to co-determination, that potential will be more easily realised.
  The Prime Minister of France, Lionel Jospin, for example, has already called for a "Community industrial policy", and it seems likely that he and the others who advocate such intervention will stand a better chance of achieving their goal, courtesy of article 157. Removing the national veto in that area is likely to be expensive in terms of reduced industrial efficiency and the increased red tape and taxes required to implement any EU economic restructuring that the article will now permit.
  History has shown time and again the dynamic relationship between low taxes and prosperity. Governments stand a far better chance of creating wealth for the benefit of all their citizens if they stand back and allow businesses to breathe and thrive, not smother them with bureaucracy, red tape and taxes. However, article 157 will open the door and encourage those who argue that we should have a Community industrial policy. Such an approach can only stifle enterprise and prosperity in the long term.
  Despite the Prime Minister's claims to the contrary, the treaty will take Europe closer to political and economic integration, as illustrated by article 157. It is interesting to note that other EU leaders have at least been honest enough to acknowledge that fact. Indeed, Joschka Fischer, Germany's Foreign Minister, has said that Nice
  "paves the way"
  for
  "the deepening of the Union",
  and
  "goes well beyond the treaty of Amsterdam".
  The Conservatives' approach to the EU is one of friendly co-operation, not centralisation. The treaty is about not enlargement but further integration. For that reason, I oppose its ratification.
  9.22 pm
  Ms Meg Munn: I support the Bill because of the benefits that my constituents have had from the European Union and the further benefits that they will gain from an enlarged Union. My area of Sheffield in south Yorkshire currently receives objective 1 help of some £711 million to help it recover from some of the devastation caused in the 18 years of Conservative government.
  The area also benefits from the jobs that arise from exports to the EU. Some 315,000 jobs are thought to depend on our ability to export to the EU, and some 63 per cent. of goods exported from Yorkshire and Humberside go to the EU. What other benefits might there be for areas such as ours? My hon. Friend the Member for Hemsworth (Jon Trickett) described the problems caused by the differing benefits that accrue to areas in Britain through membership of the EU.
  Membership of an enlarged EU is important not only for large companies but for small and medium-sized enterprises. Some 30 per cent. of Yorkshire and Humberside SMEs have trading links with other EU states and that would continue and expand with an enlarged EU. Inward investment is also important; over the past 10 years it has brought some £11 billion to the region.
  We have also heard people talk disparagingly about EU social legislation. That surprises me, because health and safety at work are extremely important. In my brief time as an MP, two casework issues have arisen in which we have looked to the European regulations. One concerns asbestos and a constituent of mine who unfortunately died from related diseases. With his widow, I have been looking at how European regulations might be of benefit.
  The second matter is the issue of the working time directive, which some Opposition Members have so disparaged this afternoon. On Monday, some bus drivers from my constituency came to lobby me. They believe that the fact that they are not subject to the working time directive means that they drive for more hours than they should. They think that that is dangerous, and that passengers are put at risk. They sorely need to be covered by the directive.
  I do not agree with my hon. Friend the Member for South Shields (Mr. Miliband), who said that things have not changed since the Conservative party elected its new leader. I detected a puzzling change emerging in this debate, in that the shadow Foreign Secretary at the start of the debate raised issues that were different from those raised at earlier stages of the Bill's progress through the House. What was that about? Do the Opposition want enlargement, but not in the way set out in the treaty? Do they want a positive vision of Europe? I wondered whether the Opposition were developing a new slogan—"In Europe, but not of Europe"—and I am considerably puzzled.
  Michael Fabricant: Will the hon. Lady give way?
  Ms Munn: No, I am very short of time.
  Michael Fabricant: Oh, come on.
  Madam Deputy Speaker (Sylvia Heal): Order. The hon. Lady has indicated that she is not taking an intervention.
  Ms Munn: Thank you, Madam Deputy Speaker.
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  I researched the Conservative position, and discovered that Iain Duncan Smith—I beg your pardon, Madam Deputy Speaker, I am still relatively new to the job and meant to say "the right hon. Member for Chingford and Woodford Green"—told a magazine called Fast Forward that
  "Britain should promote a wider, more flexible European Union."
  We have heard that argument today, but I am puzzled because the Conservative position on Europe would more appropriately be called "rewind". Certainly, that is the button on the video machine that I would press if I were looking at Europe from the Conservative viewpoint.
  We have also heard that the treaty is not about enlargement. As a new Member, I am still finding my way around. I have been told that the House of Commons Library is first rate, and that it is the place to find out about anything. I picked up a document there entitled "The Treaty of Nice and the Future of Europe Debate", which I was sure would be useful. It states:
  "Formulas were agreed for the main institutional issues outstanding from the last IGC in 1996–97 that gave rise to the Treaty of Amsterdam (size of the Commission, weighting of votes in the Council and extension Qualified Majority Voting), and amendments to a range of other Treaty Articles were also decided. The new Treaty aims to prepare the Union to expand to 27 members."
  I am therefore left in a dilemma: do I believe the House of Commons Library, or Conservative Members?
  There may be problems with enlargement, and some hon. Members have identified them, but I believe that its effect will be positive overall. It will give Britain, as a leading country in the EU, a stronger role in the world. We have heard in the debate already how we have benefited from that status in connection with the terrorism that the world is having to face at present.
  Successful enlargement will create new opportunities for Britain. I am convinced that it will benefit my constituents, and the people of Britain as a whole.
  9.29 pm
  Mr. Richard Spring: I congratulate all right hon. and hon. Members who have participated in the debate. We have had a lively but good humoured debate, with a range of opinions expressed.
  Only last month the Minister for Europe made a speech in Strasbourg, much of which I entirely agreed with. Speech making twice in a day is clearly becoming the right hon. Gentleman's forte. He said how much he welcomed the need
  "to explain clearly and simply the issues we face in today's EU, without resort to Eurobabble. We need to reconnect Europe with its citizens, particularly the citizens of the future, both here and abroad."
  The same point was made so well by my hon. Friend the Member for Epsom and Ewell (Chris Grayling). Yet the Government, by signing up to Nice, are doing precisely the reverse. Far from reconnecting Europe's citizens with EU institutions, the treaty has provoked yet more disappointment, disillusion and disconnection with the European Union, and not only in Ireland—a point made so tellingly by my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning).
  In the right hon. Gentleman's speeches, and in a major speech by the Foreign Secretary on 27 July, constant reference was made to the fact that the EU exists for its

  1263
  citizens and not for the political elite. The trouble is that it is like a doctor diagnosing the problems of a patient and then declining to prescribe the medicine that would cure the problem.
  Europe is at a crossroads. The necessary and wholly desirable enlargement of the Union provides an extraordinary opportunity to build a modern, outward-looking and flexible Europe that will endure and be acceptable to its citizens. That point was made very effectively by my hon. Friend the Member for Upminster (Angela Watkinson).
  Much of what the Government agreed at Nice, despite all the rhetoric, achieved exactly the reverse. An opportunity was clearly and tragically missed. It was a catalogue of bad preparation, backtracking and incompetence on a grand scale which sped on the process of political integration and further alienated people from the Union.
  Let us examine some of the misjudgments and mistakes that the Government made at Nice. Before Nice, the former—and late lamented—Foreign Secretary talked to the Select Committee on Foreign Affairs about the 50 items on the French presidency's list of potential extensions to qualified majority voting. He substantially ruled them out. So what happened in practice? Our Government accepted the majority of the items on that list in one form or another, wholly or in part. This is the same Foreign Secretary who told us that the so-called Amsterdam treaty leftovers probably did not require a new formal treaty to pave the way for enlargement. Indeed, a simpler treaty of accession arrangement would have sufficed.
  On QMV, however, the Government cannot have it both ways. They say that these items are unimportant or technical and ask what the fuss is about. In the next breath, they say that those items are vital for the functioning of the Union. They cannot have it both ways. The right hon. Member for Llanelli (Denzil Davies) was right to say that the importance of a number of the issues dealing with QMV cannot be overlooked.
  My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) was quite right about the devastating effect of the levy on the resale of works of art. I agree entirely with him about the devastating effect that it will have on the London art market. I also agree that the Prime Minister's speech at Lisbon about economic reform has rapidly run into the sands.
  The reason the Government postured—as they did in advance on QMV and then gave in—is because they have no view and no vision of what an enlarged European Union should look like. A lively and legitimate debate is taking place across Europe about what the architecture of the EU should be. Only our Government have thus far declined to participate in any meaningful way. Their only specific recommendation to bridge the democratic-deficit divide was the Prime Minister's ill conceived call for a second Chamber of the European Parliament—inspired, no doubt, by his brilliant reforms of the House of Lords.
  Ms Stuart: On divisions about QMV, I am delighted that the hon. Member for Stone (Mr. Cash) is on the Front
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  Bench. He, of all people, called for an extension of QMV on matters of family law. Can the hon. Member for West Suffolk explain that?
  Mr. Spring: No such vote was called for by my hon. Friend at the Committee stage, as I think hon. Members will agree—[Interruption.] No, it was not voted on.
  Before Nice, Ministers repeatedly listed areas where they would refuse to extend QMV: treaty change, taxation, border controls, social security, defence and EU own resources. However, Labour's election manifesto mentioned only two items to be retained for the veto—namely, tax and border controls. So are we going to see the continuation of the salami-slicing away of Britain's veto?
  As we have heard, the irony of ironies of the whole process is that even the Commission President regards Nice as unessential for incorporating new members. My hon. Friend the Member for East Devon (Mr. Swire) reminded us of the remarks of the President of the Commission in June. It is worth listening to them again. He said:
  "Legally, ratification of the Nice Treaty is not necessary for enlargement. It's without any problem up to 20 members, and those beyond 20 members have only to put in the accession agreement some notes of change, some clause. But legally, it's not necessary. This doesn't mean the Irish referendum is not important. But from this specific point of view, enlargement is possible without Nice."
  There we have it from the President.
  In more than four years of government, what powers have this Government retrieved for our national Parliament where, at the very least, the law can be changed? The Minister for Europe complained in his Strasbourg speech about the "disconnect" from national Parliaments. We need to involve our national legislatures more closely in shaping and monitoring EU decisions, so why did we not embark on that process at Nice by drawing a line, as we would have done on QMV, and saying, "Let us return powers to national Parliaments"? It was not even mentioned.
  The Minister should stop making speeches about "Eurobabble" and the need for plain speaking and should do something about it before the decline in confidence in the European Union's institutions among the peoples of both the member and accession states gets any worse.
  We hear about so-called constructive engagement—I must repeat this point—but in four and a half years it has not yielded one power back to our national Parliament. Of course, we are happy to accept the technical changes made in the Council of Ministers and the composition of the European Commission as being necessary for enlargement. We have made that plain all the way through.
  As my right hon. Friend the Member for Devizes (Mr. Ancram) made clear, however, nothing has proved more clearly the need for a continuing American involvement in Europe than the terrible events of 11 September. Ultimately, our American allies will want more defence burden sharing. As one surveys the declining defence expenditure in Europe, one sees that that is going to be something of a challenging aspiration.
  One thing that comes through loud and clear, however, is the fact that we in Europe need our American friends to stay committed to our defence and security. We have always been committed as a party to enhanced

  1265
  pan-European defence co-operation, but under the umbrella of NATO. At Nice, report annexe 1, page 8, stated:
  "It remains essential to the credibility and effectiveness of the European security and defence policy that the Union's military capabilities for crisis management be reinforced so that the Union is in a position to intervene with or without recourse to Nato assets."
  Speaking of the rapid reaction force, it went on to say:
  "the entire chain of command must remain under the political control and strategic direction of the EU throughout the operation … the operation commander will report on the conduct of the operation to EU bodies only".
  Thank goodness. At least NATO does not operate on the basis of QMV.
  The last thing we need now is to go ahead and create a European rapid reaction force that is disconnected from NATO. I hope that the lessons of the past few weeks have made that proposition crystal clear.
  The right hon. and learned Member for North-East Fife (Mr. Campbell) said that the process had moved on as a result of the tragic events of 11 September, and that the importance and centrality of NATO had been increasingly recognised. I very much hope that that is the case, but we have yet to see any concrete proof, or any written document to that effect, and I remind hon. Members that we are dealing with what is in front of us—the Nice treaty—not speculation as to what may have developed after that point, however welcome it may be.
  Similarly, my right hon. Friend the Member for Devizes warned of the implications of yet more judge-led law in this country, arising from the charter of fundamental rights. By contrast with the previous Minister for Europe, who likened its importance to The Beano magazine, no lawyer disregards the importance of the charter. Repeatedly, various politicians in Europe demand that it should be a basis for a written constitution.
  What has been said in this regard?
  "The Charter will mark a definitive change in the Community which will move it away from the essentially economic raison d'être of its origins to become a full political union"—
  thus Commissioner Vitorino. Furthermore, if one wanted proof positive of the force of the charter, the Commission itself observed:
  "It can reasonably be expected that the Charter will become mandatory through the Court's interpretation of it as belonging to the general principles of Community law".
  Its impact on our country, with its history of common law and practice, and the division between the judiciary and the legislature, would be to transform the centuries-old systems that serve us so well.
  It is worth reminding ourselves that originally the European rapid reaction force was flatly rejected by the Prime Minister, and then suddenly his mind was changed. Therefore, when he says that he will not accept a European written constitution, we all know that on the question of European defence he has flip-flopped for reasons of political expediency, and he may well do so again.
  My hon. Friend the Member for Wantage (Mr. Jackson) said, and I fully agree, that it is an historic obligation on our part to increase the European Union by way of enlargement. Of course we are passionately committed to
  1266
  enlargement. When the Berlin wall came down, it was truly a momentous event. Yet every hon. Member knows that unless we get budgetary reform, enlargement simply cannot happen; and in the Foreign Secretary's speech on 27 July at Chatham house he said:
  "We want reform of the Common Agricultural Policy."
  Yes indeed, as my hon. Friend the Member for Huntingdon (Mr. Djanogly) observed, that is crucial for Poland. So what are the Government actually doing about it? We know President Chirac's views—no reform until 2006. How is enlargement to be funded? How will the agricultural chapters of the accession states be closed successfully? We need some leadership from the Government; otherwise enlargement will be imperilled.
  When the Foreign Secretary spoke at Chatham house, he spoke of the need once again to connect with Europe's citizens. He said that Europe should focus more on outcomes and less on process, that the European Union was built on the foundation of its nation states, and that we should be ready to engage in a serious debate about Europe; I agreed with every single word. Yet the Government, by their actions, did precisely the opposite at Nice, unnecessarily giving up our veto, failing to bring back any powers to Westminster and failing to tackle Europe's post-enlargement financing.
  The Government talk boldly but have absolutely no clear idea of what a sustainable European institutional architecture should look like. Nice was not, in practice, about enlargement. As we have seen, it may actually slow down and damage enlargement. From the viewpoint of the United Kingdom. it was about our Government who failed to stand up for our national interests and failed to argue for an enduring, flexible, open and democratic European Union, valued and supported by its citizens.
  We have three years before the intergovernmental conference, which will examine the competences of the EU and its members. It is a hugely important opportunity to fashion a sustainable European Union. I agree with the right hon. and learned Member for North-East Fife that we are anxious to have a White Paper on the subject, as we examine all these considerations. The Conservatives will want, as a party, to contribute positively to the process, and I hope that the Government will do the same. At Nice, they signed up to a treaty that had precious little to do with enlargement, and I truly hope that the Government will move away from simply talking towards constructive action and Firm, clear proposals. Sadly, the Government's failure at Nice gives us precious little hope that that will be the case.
  9.44 pm
  Peter Hain: With the leave of the House, Mr. Speaker, I shall reply to the debate and support the Third Reading of the Bill.
  I applaud the hon. Member for West Suffolk (Mr. Spring) for reading all my speeches, but it does not seem to have done him much good. I confess that I have had withdrawal symptoms in this debate because of the absence from the Back Benches of the hon. Member for Stone (Mr. Cash). I miss seeing him there. I miss his 235 amendments and his championing of qualified majority voting on family law. I also miss the hon. Member for Buckingham (Mr. Bercow), with his convoluted semantics. What has happened to them? They have been sentenced to silence by duty on the Front

  1267
  Bench. Indeed, we read in the papers that the hon. Member for Stone—a good friend of mine, whom I enormously admire—was told on his appointment to say nothing about Europe, which must be very hard for him.
  There is another absent figure—the right hon. and learned Member for Rushcliffe (Mr. Clarke). Where is he? What would he have said? In announcing his candidacy for the Conservative party leadership in June, he said:
  "Our official policy at the general election was that Conservatives favoured enlarging the Union but opposed the Treaty of Nice which paves the way for enlargement. We opposed the extension of QMV to any new subject, however trivial. We were hostile to the European rapid reaction force. We demanded that Parliament should be able to overturn judgements of the European Court whenever we disagreed with the Court's rulings on our treaty obligations. These policies are difficult to reconcile with Britain's continued membership of the European Union."
  Exactly, and I am a little puzzled about the Conservative party's new stance since its change in leadership.
  Where are all the pound signs that Conservative Members used to wear proudly in their lapels when in the Chamber? Has somebody stolen them? Perhaps they have lost them, and the slogan of the new Conservative party leadership is, "We've lost the pound." Perhaps they have given them away, and their new slogan is, "We've given away the pound." Perhaps they have melted them down to form new ones, or perhaps they have scrapped the pound already. We should be told what they have done with their pound signs.
  Mrs. Browning: Will the right hon. Gentleman give way?
  Peter Hain: I gave way to many Opposition Members in my opening speech, much to my regret, and I am pressed for time.
  Michael Fabricant: The Minister has 12 minutes in which to finish his speech.
  Peter Hain: Yes, but in 12 minutes I have to reply to a long debate.
  We know what the modern Conservative party really thinks about Europe. Lord Skidelsky, who has just quit the Conservative party, said:
  "The party I joined was Eurosceptic. It has become Europhobic. And with Europhobia has surfaced a streak of xenophobia."
  That is the new Conservative party.
  The hon. Member for Tiverton and Honiton (Mrs. Browning) was absolutely apoplectic at the end of her speech when she said that there will be no such thing as a United Kingdom any more—but as my hon. Friend the Member for Dundee, East (Mr. Luke) said, does she really think that the French are less French by being in the EU, or that the Germans are less German or the Spanish less Spanish? Does she really think that they have less pride, less national identity or less patriotism than we do in Britain? Of course they do not.
  The hon. Member for Upminster (Angela Watkinson) asked a rhetorical question in the context of European issues: who governs Britain? Well, the answer is that Labour governs Britain.
  The right hon. Member for Devizes (Mr. Ancram) spent much time talking about the Irish referendum. It is worth recalling that when the Conservatives were in office and
  1268
  he was a Minister and the Danes voted against the Maastricht treaty that the Conservatives introduced to the House, the Tories did not tear up the treaty or withdraw the Bill. On the contrary, the Conservative Government worked assiduously to produce assurances for the Danes that allowed for a second positive referendum in Denmark and for the Maastricht treaty to be ratified unamended. That is what happened under a Conservative Government.
  I invite the right hon. Gentleman and his colleagues on the Conservative Benches to cut the cant about their position on enlargement. By their vote against the Bill, they are seeking to sabotage enlargement of the EU. The way in which they glory in the result of the Irish referendum is rather distasteful. It is as though they want everyone to vote against the Bill on the Nice treaty and to wreck enlargement as a result.
  My hon. Friends the Members for Birmingham, Edgbaston (Ms Stuart) and for Hemsworth (Jon Trickett) made valid points about disengagement and disconnection in the modern EU. To his credit, the hon. Member for West Suffolk made those points as well. The Government and the whole House—pro-Europeans especially—need to pay heed to the result of the Irish referendum and, particularly, to the central slogan of the "No" campaign, which was, "If you don't know, vote no." That imposes a special obligation on the EU's leadership to come up with reforms and new ways of working to close the gap between the leaders and the led, which is far too wide at present.
  I commend the hon. Member for Wantage (Mr. Jackson) on the elegance, eloquence and logic of his case in support of the Bill and enlargement of the EU. In joining us in the Aye Lobby, he will put the reunification of Europe above his party obligations. I commend him on that.
  I welcome the speeches of my hon. Friends the Members for Ellesmere Port and Neston (Mr. Miller) and for Wimbledon (Roger Casale). I endorse the points made by my hon. Friend the Member for South Thanet (Dr. Ladyman) in his excellent speech. He pointed out that, in becoming involved in the EU, we are not giving up our sovereignty, but pooling it to make us stronger in the way that we do as members of NATO, the Security Council of the United Nations and other international bodies such as the International Monetary Fund.
  In another excellent speech, my hon. Friend the Member for Rhondda (Mr. Bryant) made it absolutely clear that the issue is not the US versus Europe. Indeed, the transatlantic alliance between the US and Britain has been especially important over the past month. It needs to strengthen.
  My right hon. Friend the Member for Gateshead, East and Washington, West (Joyce Quin) made an important point about the battle against terrorism that has followed the awful events of 11 September. She pointed out that, if we did not have in place EU structures such as the Justice and Home Affairs Council and the EU's other mechanisms to take on the threat of terrorism, we would find it much more difficult to confront and beat that threat.
  In an excellent tour de force, my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) described as absolutely ludicrous Conservative arguments on European security and defence policy. He tore them apart.
  My hon. Friend the Member for South Shields (Mr. Miliband) made an important argument about the common agricultural policy, which answered the point

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  raised by the hon. Member for Tiverton and Honiton. He said that enlargement will force reform of the CAP, because the current policy—which desperately needs reform in any case—will not be sustainable after enlargement. However, we must not block enlargement by seeking to make CAP reform a condition of it. My hon. Friend the Member for Sheffield, Heeley (Ms Munn) explained how important enlargement will be for businesses, especially small businesses, in her constituency. That is an important case for it.
  Enlargement represents an historic opportunity to end the cold war division of Europe and reunite our continent. A bigger EU will be stronger and safer. Today we can only fight terrorism, crime, drugs and pollution through joint action across the continent. The Nice treaty is essential to open the door to enlargement, the goal of successive British Governments. It removes all remaining institutional obstacles.
  The Nice treaty has met its primary objective, but it has also advanced other key British interests. Our first priority was to get more voting strength for the UK, and we got it. The treaty increases the relative weight of Britain's vote in the Council of Ministers for the first time. Who could disagree with that? Perhaps only a party that does not care about our weight inside the EU because most of its members want to be outside it.
  I am pleased that the leader of the Conservative party has joined us. Perhaps he can explain how he put his name to a 1996 Bill sponsored by the hon. Member for Stone, which called for withdrawal from the EU. Why does he not explain his position? I see that the pound signs have suddenly reappeared, but the real agenda under his leadership is withdrawal from the EU.
  My right hon. Friend the Member for Llanelli (Denzil Davies) raised a series of questions about qualified majority voting. In the treaty negotiations we retained unanimity where it was necessary and extended QMV when it was in Britain's interests. The Opposition should have no difficulty with that. They agreed to move from unanimity to QMV and gave away the veto, as they now call it, in the Single European Act under the leadership of Margaret Thatcher and in the Maastricht treaty under John Major. They did that on some fundamental articles, including the general single market legislation and on almost all environment provisions.
  As the Opposition are not against QMV in principle, why do they oppose it in the Nice treaty on such measures as the appointment of EU special representatives on foreign policy? Unanimity could clearly hold up important work that those envoys do or allow one member state to hold out against the best candidate for the job. Why do they hold out against QMV for the salary and pension of the Registrar of the Court of First Instance? Where is the earth-shattering national importance—the threat to our sovereignty—of the British veto on that issue? Would the Opposition really have the British people trooping off to the polls for a referendum on that vital constitutional issue, but not for the euro?
  QMV will make it easier to introduce changes to the rules of procedure of the European Court of Justice to improve efficiency so that justice will no longer be delayed or denied to British companies seeking redress. The Opposition used to be the party of business—but no
  1270
  longer apparently. They opposed QMV on financial regulations on probity, which will be introduced by the treaty. It will now be easier to carry out reforms to tighten up financial management, which I thought concerned the Conservatives.
  Once again, I welcome the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) to the Front Bench. People constantly say to me that we should give him time and more credit for his appointment as leader of his party. I am a generous man, but how can we give him credit when he has given us Cash? The answer is because he is leading an anti-European crusade with a Front Bench—there they are, grinning away—full of anti-Europeans and Eurosceptics who want to take us out of Europe.
  The Opposition do not want European enlargement or the advantages of having peace, prosperity, stability and jobs. They do not want to benefit from protection of the environment, food safety measures or streets that are made safer from the danger of drugs. They do not want protection from the threat of terrorism, which will be repelled much more effectively by an enlarged EU that brings in all the candidate states to join us in our fight against terrorism. The Opposition argue against that—
  Question put, That the Bill be now read the Third time:—
  The House divided Ayes 392, Noes 158.

  Division No. 38]

  [10 pm

  AYES

  Adams, Mrs Irene (Paisley N)

  Brooke, Annette

  Ainger, Nick

  Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

  Ainsworth, Bob (Cov'try NE)

  Alexander, Douglas

  Brown, Russell (Dumfries)

  Allan, Richard

  Browne, Desmond

  Allen, Graham

  Bruce, Malcolm

  Anderson, Rt Hon Donald (Swansea E)

  Bryant, Chris

  Buck, Ms Karen

  Anderson, Janet (Rossendale)

  Burden, Richard

  Armstrong, Rt Hon Ms Hilary

  Burgon, Colin

  Atherton, Ms Candy

  Burnham, Andy

  Atkins, Charlotte

  Byers, Rt Hon Stephen

  Austin, John

  Cable, Dr Vincent

  Bailey, Adrian

  Caborn, Rt Hon Richard

  Baker, Norman

  Cairns, David

  Banks, Tony

  Calton, Mrs Patsy

  Barnes, Harry

  Campbell, Alan (Tynemouth)

  Barrett, John

  Campbell, Mrs Anne (C'bridge)

  Barron, Kevin

  Campbell, Rt Hon Menzies (NE Fife)

  Battle, John

  Bayley, Hugh

  Carmichael, Alistair

  Beard, Nigel

  Casale, Roger

  Beckett, Rt Hon Margaret

  Caton, Martin

  Begg, Miss Anne

  Cawsey, Ian

  Beith, Rt Hon A J

  Challen, Colin

  Benn, Hilary

  Chapman, Ben (Wirral S)

  Bennett, Andrew

  Chaytor, David

  Benton, Joe

  Chidgey, David

  Berry, Roger

  Clapham, Michael

  Best, Harold

  Clark, Mrs Helen (Peterborough)

  Betts, Clive

  Clark, Dr Lynda (Edinburgh Pentlands)

  Blackman, Liz

  Blears, Ms Hazel

  Clarke, Rt Hon Charles (Norwich S)

  Blizzard, Bob

  Borrow, David

  Clarke, Rt Hon Tom (Coatbridge)

  Bradley, Rt Hon Keith (Withington)

  Clarke, Tony (Northampton S)

  Bradley, Peter (The Wrekin)

  Clwyd, Ann

  Brake, Tom

  Coaker, Vernon

  Breed, Colin

  Coffey, Ms Ann

  Brennan, Kevin

  Cohen, Harry

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  Colman, Tony

  Heath, David

  Connarty, Michael

  Henderson, Doug (Newcastle N)

  Cook, Frank (Stockton N)

  Henderson, Ivan (Harwich)

  Corston, Jean

  Hendrick, Mark

  Cotter, Brian

  Hepburn, Stephen

  Cousins, Jim

  Heppell, John

  Crausby, David

  Hesford, Stephen

  Cruddas, Jon

  Heyes, David

  Cryer, Mrs Ann (Keighley)

  Hill, Keith

  Cummings, John

  Hinchliffe, David

  Cunningham, Rt Hon Dr Jack (Copeland)

  Hood, Jimmy

  Hoon, Rt Hon Geoffrey

  Cunningham, Jim (Cov'try S)

  Hope, Phil

  Cunningham, Tony (Workington)

  Howarth, Rt Hon Alan (Newport E)

  Curtis—Thomas, Mrs Claire

  Howarth George (Knowsley N)

  Darling, Rt Hon Alistair

  Howells, Dr Kim

  Davey, Edward (Kingston)

  Hoyle, Lindsay

  Davey, Valerie (Bristol W)

  Hughes, Beverley (Stretford)

  David, Wayne

  Hughes, Kevin (Doncaster N)

  Davies, Geraint (Croydon C)

  Hughes, Simon (Southwark N)

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

  Humble, Mrs Joan

  Hurst, Alan

  Dawson, Hilton

  Hutton, Rt Hon John

  Dean, Mrs Janet

  Iddon, Dr Brian

  Denham, Rt Hon John

  Illsley, Eric

  Dhanda, Parmjit

  Ingram, Rt Hon Adam

  Dismore, Andrew

  Jackson Glenda (Hampstead)

  Dobbin, Jim

  Jackson, Helen (Hillsborough)

  Dobson, Rt Hon Frank

  Jackson, Robert (Wantage)

  Donohoe, Brian H

  Jamieson, David

  Doughty, Sue

  Jenkins, Brian

  Dowd, Jim

  Johnson, Alan (Hull W & Hessle)

  Drown, Ms Julia

  Jones, Helen (Warrington N)

  Eagle, Angela (Wallasey)

  Jones, Jon Owen (Cardiff C)

  Eagle, Maria (L'pool Garston)

  Jones, Kevan (N Durham)

  Edwards, Huw

  Jones, Lynne (Selly Oak)

  Efford, Clive

  Jones, Martyn (Clwyd S)

  Ellman, Mrs Louise

  Joyce, Eric

  Ennis, Jeff

  Kaufman, Rt Hon Gerald

  Ewing, Annabelle

  Keen, Alan (Feltham & Heston)

  Farrelly, Paul

  Keen, Ann (Brentford & Isleworth)

  Fisher, Mark

  Keetch, Paul

  Fitzpatrick, Jim

  Kemp, Fraser

  Fitzsimons, Mrs Lorna

  Khabra, Piara S

  Flint, Caroline

  Kidney, David

  Flynn, Paul

  Kilfoyle, Peter

  Follett, Barbara

  King, Andy (Rugby & Kenilworth)

  Foster, Rt Hon Derek

  King, Ms Oona (Bethnal Green)

  Foster, Don (Bath)

  Kirkwood, Archy

  Foster, Michael (Worcester)

  Knight, Jim (S Dorset)

  Foster, Michael Jabez (Hastings)

  Ladyman, Dr Stephen

  Foulkes, George

  Lamb, Norman

  Francis, Dr Hywel

  Lammy, David

  Gapes, Mike

  Lawrence, Mrs Jackie

  George, Andrew (St Ives)

  Laws, David

  George, Rt Hon Bruce (Walsall S)

  Laxton, Bob

  Gerrard, Neil

  Lazarowicz, Mark

  Gibson, Dr Ian

  Lepper, David

  Gidley, Sandra

  Leslie, Christopher

  Gilroy, Linda

  Levitt, Tom

  Godsiff, Roger

  Lewis, Ivan (Bury S)

  Goggins, Paul

  Linton, Martin

  Green, Matthew (Ludlow)

  Lloyd, Tony

  Griffiths, Jane (Reading E)

  Llwyd, Elfyn

  Griffiths, Nigel (Edinburgh S)

  Love, Andrew

  Griffiths, Win (Bridgend)

  Lucas, Ian

  Grogan, John

  Luke, Iain

  Hain, Rt Hon Peter

  Lyons, John

  Hall, Patrick (Bedford)

  McAvoy, Thomas

  Hamilton, David (Midlothian)

  McCabe Stephen

  Hancock, Mike

  McCafferty, Chris

  Hanson, David

  McCartney, Rt Hon Ian

  Harris, Dr Evan (Oxford W)

  McDonagh, Siobhain

  Harris, Tom (Glasgow Cathcart)

  MacDonald, Calum

  Havard, Dai

  MacDougall, John

  Healey, John

  McFall, John

  1272

  McGuire, Mrs Anne

  Robertson, Angus (Moray)

  McIsaac, Shona

  Robertson, John (Glasgow Anniesland)

  McKechin, Ann

  McKenna, Rosemary

  Roche, Mrs Barbara

  Mackinlay, Andrew

  Rooney, Terry

  McNulty, Tony

  Ross, Ernie

  Mactaggart, Fiona

  Ruane, Chris

  McWalter, Tony

  Ruddock, Joan

  McWilliam, John

  Russell, Bob (Colchester)

  Mahmood, Khalid

  Russell, Ms Christine (Chester)

  Mahon, Mrs Alice

  Salmond, Alex

  Mallaber, Judy

  Salter, Martin

  Mann, John

  Sanders, Adrian

  Marris, Rob

  Sarwar, Mohammad

  Marsden, Gordon (Blackpool S)

  Savidge, Malcolm

  Marsden, Paul (Shrewsbury)

  Sawford, Phil

  Martlew, Eric

  Sedgemore, Brian

  Meacher, Rt Hon Michael

  Sheerman, Barry

  Meale, Alan

  Sheridan, Jim

  Merron, Gillian

  Shipley, Ms Debra

  Michael, Rt Hon Alun

  Simon, Siôn

  Milburn, Rt Hon Alan

  Singh, Marsha

  Miliband, David

  Smith, Rt Hon Andrew (Oxford E)

  Miller, Andrew

  Smith, Rt Hon Chris (Islington S)

  Moffatt, Laura

  Smith, Geraldine (Morecambe)

  Moonie, Dr Lewis

  Smith, Jacqui (Redditch)

  Moore, Michael

  Smith, John (Glamorgan)

  Moran, Margaret

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

  Morgan, Julie

  Soley, Clive

  Morley, Elliot

  Southworth, Helen

  Morris, Rt Hon Estelle

  Spellar, Rt Hon John

  Mountford, Kali

  Squire, Rachel

  Mudie, George

  Starkey, Dr Phyllis

  Mullin, Chris

  Steinberg, Gerry

  Munn, Ms Meg

  Stevenson, George

  Murphy, Denis (Wansbeck)

  Stewart, David (Inverness E)

  Murphy, Rt Hon Paul (Torfaen)

  Stewart, Ian (Eccles)

  Naysmith, Dr Doug

  Stinchcombe, Paul

  Norris, Dan

  Stoate, Dr Howard

  Oaten, Mark

  Strang, Rt Hon Dr Gavin

  O'Brien, Bill (Normanton)

  Stringer, Graham

  O'Brien, Mike (N Warks)

  Stuart, Ms Gisela

  O'Hara, Edward

  Stunell, Andrew

  Olner, Bill

  Tami, Mark

  O'Neill, Martin

  Taylor, Rt Hon Ann (Dewsbury)

  Öpik, Lembit

  Taylor, Ms Dari (Stockton S)

  Organ, Diana

  Taylor, David (NW Leics)

  Osborne, Sandra (Ayr)

  Taylor, Matthew (Truro)

  Owen, Albert

  Thomas, Gareth (Clwyd W)

  Palmer, Dr Nick

  Thomas, Simon (Ceredigion)

  Pearson, Ian

  Timms, Stephen

  Picking, Anne

  Tipping, Paddy

  Pickthall, Colin

  Todd, Mark

  Pike, Peter

  Tonge, Dr Jenny

  Plaskitt, James

  Touhig, Don

  Pollard, Kerry

  Trickett, Jon

  Pond, Chris

  Turner, Dennis (Wolverh'ton SE)

  Pope, Greg

  Turner, Dr Desmond (Kemptown)

  Pound, Stephen

  Turner, Neil (Wigan)

  Powell, Sir Raymond

  Twigg, Derek (Halton)

  Prentice, Gordon (Pendle)

  Twigg, Stephen (Enfield)

  Prescott, Rt Hon John

  Tyler, Paul

  Price, Adam

  Tynan, Bill

  Primarolo, Dawn

  Walley, Ms Joan

  Prosser, Gwyn

  Wareing, Robert N

  Purchase, Ken

  Watson, Tom

  Purnell, James

  Watts, David

  Quin, Rt Hon Joyce

  Webb, Steve

  Quinn, Lawrie

  Weir, Michael

  Rammell, Bill

  White, Brian

  Rapson, Syd

  Whitehead, Dr Alan

  Raynsford, Rt Hon Nick

  Wicks, Malcolm

  Reed, Andy (Loughborough)

  Williams, Rt Hon Alan (Swansea W)

  Reid, Alan (Argyll & Bute)

  Reid, Rt Hon Dr John (Hamilton N)

  Williams, Mrs Betty (Conwy)

  Rendel, David

  Williams, Hywel (Caernarfon)

  1273

  Williams, Roger (Brecon)

  Wray, James

  Willis, Phil

  Wright, Anthony D (Gt Yarmouth)

  Wills, Michael

  Wright, David (Telford)

  Winnick, David

  Wright, Tony (Cannock)

  Winterton, Ms Rosie (Doncaster C)

  Wyatt, Derek

  Wishart, Pete

  Younger—Ross, Richard

  Wood, Mike

  Woodward, Shaun

  Tellers for the Ayes:

  Woolas, Phil

  Angela Smith and

  Worthington, Tony

  Mr. Ivor Caplin.

  NOES

  Ainsworth, Peter (E Surrey)

  Hague, Rt Hon William

  Amess, David

  Hammond, Philip

  Ancram, Rt Hon Michael

  Hawkins, Nick

  Arbuthnot, Rt Hon James

  Hayes, John

  Atkinson, David (Bour'mth E)

  Heald, Oliver

  Atkinson, Peter (Hexham)

  Heathcoat—Amory, Rt Hon David

  Bacon, Richard

  Hermon, Lady

  Baldry, Tony

  Hoban, Mark

  Barker, Gregory

  Hogg, Rt Hon Douglas

  Baron, John

  Horam, John

  Beggs, Roy

  Howard, Rt Hon Michael

  Bellingham, Henry

  Howarth, Gerald (Aldershot)

  Bercow, John

  Jack, Rt Hon Michael

  Beresford, Sir Paul

  Jenkin, Bernard

  Blunt, Crispin

  Johnson, Boris (Henley)

  Boswell, Tim

  Key, Robert

  Brady, Graham

  Kirkbride, Miss Julie

  Brazier, Julian

  Knight, Rt Hon Greg (E Yorkshire)

  Browning, Mrs Angela

  Laing, Mrs Eleanor

  Burns, Simon

  Lait, Mrs Jacqui

  Burnside, David

  Lansley, Andrew

  Burt, Alistair

  Leigh, Edward

  Butterfill, John

  Letwin, Oliver

  Cameron, David

  Lewis, Dr Julian (New Forest E)

  Campbell, Gregory (E Lond'y)

  Liddell—Grainger, Ian

  Cash, William

  Lidington, David

  Chapman, Sir Sydney (Chipping Barnet)

  Lilley, Rt Hon Peter

  Loughton, Tim

  Chope, Christopher

  Luff, Peter

  Clappison, James

  McIntosh, Miss Anne

  Clifton—Brown, Geoffrey

  MacKay, Rt Hon Andrew

  Collins, Tim

  Maclean, Rt Hon David

  Conway, Derek

  McLoughlin, Patrick

  Cran, James

  Malins, Humfrey

  Davies, Rt Hon Denzil (Llanelli)

  Maples, John

  Davis, Rt Hon David (Haltemprice)

  Mates, Michael

  Djanogly, Jonathan

  Maude, Rt Hon Francis

  Dodds, Nigel

  May, Mrs Theresa

  Dorrell, Rt Hon Stephen

  Mercer, Patrick

  Duncan, Alan (Rutland & Melton)

  Mitchell, Andrew (Sutton Coldfield)

  Duncan, Peter (Galloway)

  Moss, Malcolm

  Duncan Smith, Rt Hon Iain

  Murrison, Dr Andrew

  Evans, Nigel

  Norman, Archie

  Fabricant, Michael

  O'Brien, Stephen (Eddisbury)

  Fallon, Michael

  Osborne, George (Tatton)

  Field, Mark (Cities of London)

  Ottaway, Richard

  Fight, Howard

  Page, Richard

  Flook, Adrian

  Paice, James

  Forth, Rt Hon Eric

  Paisley, Rev Ian

  Fox, Dr Liam

  Paterson, Owen

  Francois, Mark

  Pickles, Eric

  Garnier, Edward

  Prisk, Mark

  Gibb, Nick

  Randall, John

  Gillan, Mrs Cheryl

  Redwood, Rt Hon John

  Goodman, Paul

  Robathan, Andrew

  Gray, James

  Robertson, Hugh (Faversham)

  Grayling, Chris

  Robertson, Laurence (Tewk'b'ry)

  Green, Damian (Ashford)

  Robinson, Mrs Iris (Strangford)

  Greenway, John

  Robinson, Peter (Belfast E)

  Grieve, Dominic

  Roe, Mrs Marion

  1274

  Rosindell, Andrew

  Taylor, Dr Richard (Wyre F)

  Ruffley, David

  Taylor, Sir Teddy

  Sayeed, Jonathan

  Tredinnick, David

  Selous, Andrew

  Trend, Michael

  Shepherd, Richard

  Turner, Andrew (Isle of Wight)

  Simmonds, Mark

  Tyrie, Andrew

  Skinner, Dennis

  Viggers, Peter

  Smyth, Rev Martin (Belfast S)

  Walter, Robert

  Soames, Nicholas

  Waterson, Nigel

  Spelman, Mrs Caroline

  Watkinson, Angela

  Spicer, Sir Michael

  Whittingdale, John

  Spink, Bob

  Widdecombe, Rt Hon Miss Ann

  Spring, Richard

  Wiggin, Bill

  Stanley, Rt Hon Sir John

  Wilkinson, John

  Steen, Anthony

  Willetts, David

  Streeter, Gary

  Winterton, Mrs Ann (Congleton)

  Swayne, Desmond

  Winterton, Nicholas (Macclesfield)

  Swire, Hugo

  Young, Rt Hon Sir George

  Syms, Robert

  Tellers for the Noes:

  Tapsell, Sir Peter

  Mr. David Wilshire and

  Taylor, John (Solihull)

  Mr. Charles Hendry.

  Question accordingly agreed to.
  Bill read the Third time, and passed.

  FOOTBALL (DISORDER) (AMENDMENT) BILL
  Ordered,
  That, during the proceedings on the Football (Disorder) (Amendment) Bill, the Standing Committee on the Bill shall have leave to sit twice on the first day on which it shall meet.—[Dan Norris.]

PETITION

  Canvey Island (Southern Bypass)
  10.18 pm
  Bob Spink: The petition, signed by about 700 of my constituents, including Mr. Mark Dennis, who organised the petition and lives in Western esplanade, and by many illustrious fighters for the environment of Canvey Island, including Mrs. Eileen Gough and Edna Bowden, calls for the dropping of a proposal to build the Canvey Island southern bypass road. Many of the petitioners would agree that the resources that the road would require would be better applied to provide a third access road for Canvey Island.
  In presenting the petition, it is my duty to inform the House that opinion on the matter on Canvey Island is mixed. The petition states:
  The Humble Petition of the concerned residents and visitors of Canvey Island sheweth
  That the proposed building of a southern bypass road on Canvey Island, Essex, connecting Roscommon Way to Western Esplanade should be abolished.
  Wherefore your Petitioners pray that your Honourable House will urge the Transport Minister to abolish plans for a southern bypass road on Canvey Island. Essex, connecting Roscommon Way to Western Esplanade, and not to increase traffic flow on roads connected to this proposed bypass road.
  And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

  NHS Dentistry (South Somerset)
  Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]
  10.19 pm
  Mr. David Laws: I am very grateful to you, Mr. Speaker, for this opportunity to raise an issue of great importance in my constituency. It is one of the issues that has featured most in my postbag since the general election. Indeed, concerns about access to NHS dentistry in south Somerset were also raised consistently with my predecessor, Lord Ashdown.
  Yeovil has a particular problem with access to NHS dentistry. At present, no dentists in the area are taking new adult NHS patients. That has been a problem not only in recent weeks and months, but since at least two years before the general election. It is shared by many other areas in the region and in the other part of south Somerset represented by my hon. Friend the Member for Somerton and Frome (Mr. Heath).
  The issue can be encapsulated not only by the fact that no dentists in Yeovil are taking new adult NHS patients, but by the realisation that registrations of dental patients in Somerset have declined from about 69 per cent. of the adult population in 1993 to a low of just under 50 per cent. The level is now hovering around 50 per cent., which shows the great difficulty that many people in south Somerset are having in trying to get access to NHS dentistry.
  That difficulty leads to a number of problems. First, the NHS dentists who are nearest to many of the towns in my constituency, such as Yeovil, Chard, Ilminster and Crewkerne, are based as much as 15 or 20 miles away. I am sure that the Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears), will agree that that is a great distance to go to benefit from a basic health service such as dentistry. In a rural area, transport is a difficulty for many people, which creates greater pressures.
  The second problem that is caused by the lack of access to NHS dentistry is that many people are forced to opt for private provision, which is obviously more expensive and is very difficult for many people in the area to afford. Some people have found that their NHS dentists have converted to private practice and insisted that any NHS patients who want to stay with them should go private, at great additional expense.
  Thirdly, there are many people who fall out of access to dentistry altogether and therefore cannot get the attention and especially the preventive care that they would expect. Progress on that problem has been slow in the constituency, which is a matter of concern for me and my hon. Friends in the surrounding area. A couple of years ago, the Prime Minister made a welcome pledge to increase access to NHS dentistry so that everybody had it. However, the Government seem to have modified that pledge over the past couple of years, so that people have access to a telephone number and operator for information, but not a dentist in their area.
  I think that people in the main towns of my constituency—Yeovil, Chard, Crewkerne and Ilminster—would have expected the Government's commitment to mean that they would be able to get access to an NHS dentist in their area. I raise that issue with the desire not
  1276

  to make a political point, but to emphasise to the Under-Secretary how great the problem is and to see whether we can find a way forward.
  I have recently had the pleasure of formally opening the new NHS dental access centre in my constituency. Others have been opened in Chard and—I believe—in Taunton. That has to be a welcome development. It means that people who need emergency treatment can obtain it, which is obviously helpful for those particular individuals. The Under-Secretary will appreciate, however, that that does nothing to provide the on-going dental treatment that most people would want. I am sure that the Government wish to encourage such treatment, given their emphasis on preventive treatment not only in NHS dentistry but in all aspects of health care.
  I hope that the Under-Secretary will agree that such treatment cannot be provided unless people see dentists regularly. Although I welcome the money that has been invested, it will not deal with the dental access problems in the constituency and the Government should not be encouraging it as the only solution. In some senses, it is a solution that treats failure but not the dental and other health problems that a proper system of NHS dentistry should tackle.
  We appreciate that the problems are not new and that they go back to the reduction in fees for NHS dental treatment under a Conservative Administration. Access problems have therefore been prevalent for some time.
  Anxiety also exists about the lack of trained dentists. More dentists going through our medical schools would help to tackle the shortage throughout the country. Local dentists and other health experts believe that the Government should deal with those two major problems if we are to make progress not only in south Somerset but throughout the country. We need more dentists and a revision of the fee structures that govern NHS treatments.
  Much modernisation is required. Most dentists who have gone private in the past few years are resistant to transferring back to a national health service system in which their fees and ability to treat patients to a high level are significantly curtailed. It will be difficult to get many of them back into the NHS. We must therefore try to ensure that new dentists remain in it.
  Such changes will take many years to effect, and people in Yeovil do not want to wait that long for action. They are not encouraged by the mere provision of access centres or Somerset health authority's commitment to stabilise registrations at the current level rather than increasing the proportion of people who are registered. I should like the same solutions that were applied in other parts of the country, such as north Devon, to be tried in Yeovil.
  In north Devon, the health authority, the Government and private partners have worked together to attract dentists to the area and even used professional dentistry publications to draw attention to the gaps. However, we also need action to help dentists who want to establish practices in black hole areas where there is currently no provision.
  There are major problems in identifying those areas and help for new dentists. Local newspapers such as the Yeovil Express and the Western Gazette have highlighted those issues, and many of those who recently wanted to set up practices in the area have been alerted to the problem only through that means. Dental practitioners whom my

  1277
  predecessor, Lord Ashdown, and I have tried to encourage to come to those areas in the past couple of years have looked to funding from Government schemes such as investing in dentistry and its successors to tackle the problems. The Minister knows how expensive it can be to set up a new practice. One has to secure appropriate property and much equipment as well as staff.
  Information and financial support have been lacking. Perhaps the Minister recalls that, a couple of years ago, one of the investing in dentistry schemes had bids of approximately £1 million in the Somerset health authority area, but only around £80,000 was granted. There is a definite shortfall in assistance with the start-up costs.
  I would not support endless subsidies on top of the ordinary payments that are made to NHS dentists, but it is important to give additional financial incentives to dentists who are moving to the black hole areas that we are considering. I hope that the Minister will say whether the Government propose to continue such schemes as investing in dentistry so that we can assist dentists to move to such areas.
  My final point is not political. I accept that the Government are trying to tackle lack of access and to renew NHS dentistry after a period in which it has suffered. However, I am worried that the Government's ambitions, which the Prime Minister expressed, are not matched by the policy achievements and that some Government solutions, such as dental access centres, seem to provide only emergency and safety net treatment, which is better than nothing but not good enough for many of our constituents.
  10.29 pm
  Annette Brooke: I thank my hon. Friend the Member for Yeovil (Mr. Laws) for describing the situation so clearly. I am sure that many of us experience the same difficulties in our areas, and I want to make some general points that I think will support his case.
  A recent survey by the magazine Health Which? suggested that two in five dental surgeries now accepted only private patients. We might well assume that there had been a mass exodus from NHS dentistry over the past 10 or 11 years. I believe that 1990 was a critical year: I am told that at that time the then Government were taking £15,000 from each NHS dentist. Although that was waived eventually, dentists obviously found that they could earn a better income without being in the NHS. As with all these things, once someone discovers something it sets the ball rolling in a direction that is difficult to change.
  My hon. Friend mentioned a number of Government initiatives. Different initiatives are being operated by different local authorities in different areas. Has the Minister any evidence to indicate which are the most effective? Obviously local conditions should be taken into account, but the information would be interesting, given the range of measures that are being tried.
  I am concerned because I feel that although a programme exists, the situation seems basically to be getting worse. I feel that we are treating the symptoms rather than the disease. We should be concerned not just about the shift, over time, of existing dentists to the
  1278
  private sector, but about the emergence of corporate bodies in dentistry. How much, for example—I have no idea of the answer—does a dentist employed by Boots receive for a check-up, compared with what the NHS would pay? That is cause for concern, because it could lead to further erosion. As my hon. Friend said, fee scales need to be addressed.
  A recent survey of vocational trainee dentists showed that 75 per cent. were not prepared to commit themselves to the NHS. I understand that they felt there was no incentive, and also no real sense of the ethos of working in the public sector. This, I feel, is where the Government have a role to play in demonstrating that the NHS has a future, and in making the necessary investment.
  Like people in south Somerset, my constituents often refer to the lack of NHS dentists. The problem arises when people moving into the area cannot register. They become quite distraught, and it is difficult just to pick up emergency treatment. I am also concerned—this probably applies to south Somerset as well—about people with special needs such as a lack of mobility and who therefore need home visits. I am told that home visits are not a very attractive option for private dentists. We must therefore rely on the NHS, and there are long waiting lists.
  Let me illustrate the seriousness of the situation with the example of a ward in my constituency, Canford Heath, which contains 6,000 new properties full of families with young children. There are currently no NHS dentists. Single mums in particular have no incentive to take their children to the dentist. We are storing up so many problems for the future by failing to provide preventive care at that early stage. I ask the Minister to assure us that a much larger programme of investment in NHS dentistry is planned.
  10.33 pm
  The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): I congratulate the hon. Member for Yeovil (Mr. Laws) on securing this important debate on NHS dentistry, particularly as it affects his constituents. I know about his written question in June. He is already building up quite a record of pursuing these matters on behalf of his constituents, and I am aware that his predecessor had several meetings about the issue.
  This is an excellent opportunity for me to tell the hon. Gentleman and his hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) some of the good news that we do have, while recognising that we still have a long way to go in providing full coverage for access to NHS dentistry across the country, as well as in south Somerset.
  It is true that Somerset has suffered from long-standing problems. As both hon. Members said, the 1990s witnessed a nationwide decline in patient registration with NHS dentists, with a corresponding increase in access problems for the public. Additionally, in September 1996, the then Government cut the maximum time allowed between visits for a patient to remain registered with an NHS dentist from 24 months to 15 months. That caused many patients' registration to lapse without their even knowing it. In total, the number of adults registered plummeted from a 1993 high of about 21 million adults to just over 16 million adults by 1999. That is the scale of the problem, and I would not seek to minimise it.

  1279
  About 45 per cent. of adults and 68 per cent. of children in Somerset are registered with an NHS dentist. Although that is not a wonderful figure, it is slightly higher than the national average. However, a worryingly small number of practices in the area have been willing to take on new NHS patients. There has also been a scarcity of urgent and emergency dental care across the county.
  We recognised the access problems when, in September 2000, we published "Modernising NHS Dentistry—Implementing the NHS Plan". The plan committed the Government to ensuring that everyone can access an NHS dentist if and when they need to do so; to trying to improve the quality of service offered by NHS dentists; to raising the level of oral health, particularly in children—a preventive care issue that both hon. Members have raised today; and to trying to tackle the inequalities that exist across communities.
  Alongside the Government's review of dentistry, in September 1999 the Prime Minister pledged that by the end of September 2001 everyone would be able to find an NHS dentist simply by telephoning NHS Direct. People do not simply receive a telephone number, they receive information on how to gain access to an NHS dentist. I acknowledge that that service is not about on-going registration; it is about providing access to care, not only for urgent and emergency cases but for routine cases.
  In the past 18 months the Government have spent £100 million in trying to implement that dental strategy. That is not a small sum, and it shows the importance that we attach to trying to get NHS dentistry back into the mainstream of the service. We have spent £7 million from the dental care development fund to try to improve existing NHS practices, and £35 million from modernisation fund moneys to try to encourage dentists who are committed to the NHS to improve their practices. We have also asked every health authority to produce a dentistry action plan to set out the practical action that has to be taken to ensure that dentistry is available in communities.
  Given the long-standing problems in Somerset, we were particularly keen to ensure that the area should receive the benefit of the whole range of the Government's current schemes. The Somerset dentistry action plan adopted a set of standards for the maximum time that patients should have to wait and the maximum distance that they would have to travel to gain access to NHS dentists. The standards are that they should have to travel a maximum of 10 miles for routine care—not 20 miles, as the hon. Member for Yeovil said, although 10 miles is still a fair distance to have to travel—and a maximum of 15 miles for urgent care and emergency care. Those standards are on a par with those set for rural areas by other health authorities in England.
  The action plan identified several areas of risk that were likely to fail those standards and noted several very vulnerable areas, such as Wincanton and Chard. It also recognised that, across the county, patients who did not have an on-going registration found it very difficult to access urgent and emergency care.
  The action plan therefore tried to identify practical action that we could take to address those issues, and the local health authority bid for considerable funds to try to put in place facilities. In 2000–01, the Government invested £71,000, and, in 2001–02, that figure has doubled
  1280
  to £144,000. That investment should allow registration for an extra 2,500 patients in Yeovil, 3,500 in Langport and 2.500 in Castle Cary. That should help to ease the pressure.
  As well as encouraging those initiatives, we have tried to channel funds into Taunton, to ease pressure on dentists in the south Somerset region. South Somerset also received almost £59,000 of modernisation fund moneys for distribution to existing practices.
  Sir Paul Beresford: I have an interest in this subject, albeit not in the particular area. The hon. Members for Yeovil (Mr. Laws) and for Mid-Dorset and North Poole (Annette Brooke) touched on one of the core problems—the fee structure. The Government have to decide whether they are providing a basic service or a full service. In doing so, they must recognise the escalating costs—running costs and capital costs—and the increasing complexity of dentistry today. The service that the Minister is speaking of is mis-targeted, and dentists will move into the private sector. She must also recognise that in providing a service through the private sector, dentists are supplementing the NHS, and that frequently, especially for children, the cost to the patient is low or—as in my case—zero.
  Ms Blears: The hon. Gentleman should recognise that the Government's aim is to try to rebuild NHS dentistry after the devastating effects of the early 1990s. From my discussions with the profession, it is obvious that many dentists welcome change. They want to change the way they work and to try to move from payments for items of service into more preventive work in oral health and in tackling inequalities. Many excellent young dentists are coming through the system who are keen to explore new ways of working. That needs to be reflected in the fee system. My dealings with the profession have shown a real willingness to engage in new ways of working to try to ensure that NHS dentistry begins to recover from the tremendous onslaught of the early 1990s.
  We have tried to put considerable money into Somerset. We have allowed £20,000 for spot contracting, to try to purchase additional sessions from existing dentists. That has been fairly successful and has resulted in 100 extra appointments a week in the area. The hon. Member for Yeovil mentioned dental access centres, and I am delighted that he had the opportunity to open one. 1 am sure that it was an enjoyable occasion. The first DAC was opened in Yeovil and the second in Taunton. The first site involved £500,000 of capital investment and costs £855,000 a year in revenue expenditure. That is a considerable service. There are plans to extend the DACs to cover the entire county, and an additional £1.5 million will be provided to do so.
  Once all the sites have been opened, the DACs will employ eight practitioners and will look to provide more than 15,000 courses of treatment a year. They will also be able to deal with 8,000 emergency cases a year. It is a new form of provision, especially for the routine care that people need. We are trying to rebuild the NHS dentistry service and of course we want existing dentists to come into the system and increase the proportion of their NHS practice. In places where that is not happening, however, the DACs are providing a much-needed service to local people.

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  We are also trying to ensure that we work closely with health authorities and primary care groups to try to recruit new dentists to the basic service. I am sure that the hon. Gentleman will accept that that is not easy, and he mentioned the need to make information available about the location of areas of unmet need and to provide support.
  Mr. Laws: I welcome the dental access centres, but my great concern is that they are not a replacement for the on-going dental care that people need. Does the Minister accept that it is unsatisfactory that my constituency has no dentist who will take new adult NHS patients? Would it be satisfactory if that were still the situation in a year's time?
  Ms Blears: The hon. Gentleman will recognise that the Government have little power to compel dentists to take part in NHS activities. This is a market. Dentists decide for themselves whether they want to be in the NHS or to undertake extensive private practice. The Government are trying to put in place incentives so that existing NHS dentists increase the proportion of their practice that is in the NHS. Other incentives are aimed at getting dentists to improve their premises and equipment, so that they stay in the NHS.
  The Government are also undertaking longer-term work to do with fee structures and new ways of working. In that way, we hope to encourage some exciting and innovative new dentists to work in the NHS. We are working with health authorities and primary care groups to support the recruitment of dentists for mainstream services. We are helping with advertising costs, which are crucial in recruitment. We are also providing relocation expenses to dentists willing to move to new areas.
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  Most importantly, we are offering assistance with short-term accommodation. Taking on new premises is a very big step, so the Government are helping dentists to move on a short-term basis initially, with accommodation provided to which they do not have to commit in the long term. In that way, we hope that dentists will be enticed back into the NHS, and that they will want to remain because they enjoy the work. We are therefore trying to be as imaginative as possible in providing incentives to draw people back into the service.
  The Government have asked dentists locally for recommendations about what else they would like us to do. We want to help, and we have asked dentists for their ideas about how we can draw them back into the NHS. The dental access centre in Yeovil has been able to recruit dentists: the fact hat there are eight whole-time equivalent dentists in that centre shows that the task is not impossible. I hope that the same persistence will pay off elsewhere, and that the support mechanisms on offer to existing practices will help them to augment the work that they do.
  We must accept that being a general dental practitioner became distinctly unattractive in the 1990s. The Government are now working nationally with the profession to change that and to make dentistry an integral element of NHS care. People's teeth and oral health are as important as any other aspect of health care. Drawing dentists back into the centre of the NHS is a top priority for the Government, and I would welcome ideas and suggestions—from the profession and elsewhere—about how we can create a vibrant NHS service. Such a service is needed by people in Somerset and in Yeovil, as it is by people right across the country.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes to Eleven o'clock.

Preamble
[SIR MICHAEL LORD in the Chair]

Equitable Life
Motion made, and Question proposed, That the sitting be now adjourned.—[Angela Smith.]
9.30 am
Richard Ottaway: It is a matter of profound disappointment that, yet again, Opposition Members must raise the matter of Equitable Life. The only occasion on which the Government have voluntarily made any pronouncement was when they launched their public inquiry, having previously said that they were content with the inquiry being conducted by the Financial Services Authority. The matter concerns not just a few hundred people but millions of policyholders who are suffering trauma and anxiety. The Government's lack of action and leadership is regrettable.
I welcome the FSA's report, but it was published only a little over two hours ago so there has been insufficient time to consider it fully. Why did it take this debate to flush it out? Why could it not have been published earlier? A preliminary flip through it suggests that it raises more questions than it answers. It is a narrow report on a limited period and, rightly, concentrates on improving regulation in the insurance sector. Its conclusions can be summarised by saying that at the end of 1999, when the FSA took over, the die was cast. Interestingly, the FSA was surprised by the outcome of the House of Lords decision that the regulators could have been more proactive.
I first raised the matter on 19 December 2000, and a brief recap may assist hon. Members During the 1950s, the Equitable started to sell with-profit pensions which gave policyholders a guaranteed annuity rate—more commonly known as a GAR. On retirement, an annuity must be purchased by the policyholder's 75th birthday. During the era of high interest rates in the 1970s and 1980s, GARs gave no cause for concern as the offered annuity rates were well below market rates.
Mr. John Greenway: I am grateful to my hon. Friend for giving way so soon.
I worked for Equitable Life from 1970 to 1972, and it may be helpful to our debate if I explain two aspects of the GAR at that time. First, the potential benefit for policyholders was significantly greater if they did not take the GAR, and very few policies were sold on the GAR figures. Secondly, at that time, Equitable Life lent money for house purchase at interest rates of 13 and 14 per cent. fixed for 25 years. When Lord Penrose examines the history of the problem, he will need to bear in mind the extent to which Equitable Life's ability to fund the GAR in the early days was clear from its own business.
Richard Ottaway: I am grateful for my hon. Friend's intervention, which shows his experience of the matter. I am sure that Lord Penrose will hang on his every word.
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Interest rates were higher in the 1970s and 1980s, but when they fell in the 1990s, the policies became a liability to the Equitable. About 90,000 policyholders were entitled to benefit from a GAR higher than the prevailing rate in the open market. That was an attractive proposition to the GAR policyholders, but not to other Equitable policyholders who had to pay for it.
The mistake that previous Equitable boards made was not to address the issue and not to save reserves for a rainy day. Instead, they took a different course of action. As the GAR policies began to mature, the Equitable offset the extra costs by paying a lower final bonus to policyholders with GARs than to those policyholders without GARs. GAR policyholders were, in effect, given a choice between exercising the right to a GAR—in which case the final bonus would be reduced—or relinquishing the guaranteed growth, purchasing an annuity at current market rates, and receiving the full bonus.
The Equitable was entitled to believe that that was the right approach. On 18 December 1998, the Treasury's director, consumer, investment and insurance directorate published a letter—it is in the FSA report—which it described as a "considered view" that endorsed that strategy. Referring to the guaranteed annuities, the directorate said:
"It would appear possible, depending on the particular circumstances relating to the contract, that any terminal bonus added at maturity may be somewhat lower than for contracts without such options and guarantees, and that this terminal bonus could in some case be applied at current annuity rates."
The advice was clear, easy to understand and confirmed the established practice that had sprung up over the past three or four years. Interestingly, if the FSA was surprised by the outcome of the court case, it clearly thought that the practice was acceptable.
The GAR policyholders, however, were not so enthusiastic. A group of them complained to the Personal Investment Authority ombudsman, who agreed to allow the case to be referred to the High Court. The policyholders lost in the High Court, but had a partial success in the Court of Appeal and an emphatic victory in the House or Lords. That has placed the future of the Equitable in a grave position. The Law Lords published their judgment on 20 July 2001. They found that the Equitable's actions had not been valid, and they obliged it to pay a full bonus to the GAR policyholders and to pay the guaranteed annuity on the whole sum.
As a result two different classes of policyholder have been created in the Equitable: those with guaranteed annuities, and those with annuities at market rates. Consequently, the non-GAR policyholders are funding those with GAR policies. The worst-case scenario liability is believed to be about £2.6 billion. To cover that cost, the Equitable froze its bonuses for seven months, which has raised £1.5 billion. It has also entered into an arrangement with the Halifax, whereby the Halifax is paying £500 million for the Equitable's operating assets. The Halifax will pay a further£500 million on two conditions: it will pay£250 million if the Equitable's compromised proposals are passed, and£250 million if the Equitable's sales force, which is transferred to the Halifax, meets certain performance

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targets. That leaves the Treasury with egg on its face, particularly with regard to the guidance document of 18 December 1998.
When prompted, the Treasury has put up what can best be described as the "Treasury defence": its guidance specifically indicates that any "charge" on policyholders needs to be consistent with the terms of the contract and how that contract has been presented to policyholders. That is a perfectly reasonable position, and was the view of the House of Lords, which reached the conclusion that the Equitable's contract did not provide for a reduction in the final bonus to the guaranteed policyholders.
The Treasury comes unstuck at that point. If five Law Lords can reach that conclusion after looking at the documents for a few days, why cannot the Treasury—with its army of advisers and all the time in the world—also reach the same conclusion? The Treasury must have read the contracts. If it did not, that is negligence beyond anyone's imagination. The guidance was suspended within hours of the Law Lords' judgment. Why? The Treasury argued that the guidance was right, and the FSA agreed with it. The Treasury, after reading the contracts, was satisfied with the Equitable's conduct. It is a regulator's role to reach such a conclusion. Unfortunately for the regulator, he or she got it wrong, and it is for that reason that I believe that the Treasury was negligent.
The Chancellor of the Exchequer has indicated that, in his view, the Government are not responsible. What is the point of setting up the Lord Penrose inquiry if the right hon. Gentleman has already prejudged the issue? The Treasury has argued in answer to questions tabled by me and by others that compensation is available only when a firm becomes insolvent. That is disingenuous; a cynic might say that it was a holding argument for the course of the general election.
In truth, Governments are liable to compensate those adversely affected by their negligent advice. No one else was in the position to, or was expected to, give that advice. The public look to the regulator to protect their interests, and in this instance there was a woeful failure. The Government got it wrong. Investors relied on their advice, and the Government must accept responsibility for that.
A number of bodies have conducted inquiries into the matter—so many that we will suffer inquiry fatigue by the time that they have all finished. They include the Institute of Actuaries, the Institute of Chartered Accountants, the Office of Fair Trading, the Treasury Committee, the FSA and Lord Penrose. Two ombudsmen have decided not to conduct inquiries.
I welcome any inquiry that sheds light on the failure of the regulatory authorities. The Treasury Select Committee rightly identified some of the key questions for Lord Penrose, especially the risky decision not to establish reserves in 1993. It wishes to ask why the insurance regulator did not address that point. The Minister has had the report from the FSA—which succeeded the Treasury as regulator in January 2000—on her desk for some time. In my view, the FSA has questions to answer. In a preliminary flip through the report this morning, I think I saw that it acknowledges that.
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The Equitable welcomed the deal that was made with the Halifax in February 2001, stating that the Equitable's prime objective was
"to strengthen the with-profits funds to the benefit of all members and it was important that policyholders would not be disadvantaged in the future."
Where was the FSA when that statement was made? Did it have any idea that the statement was ludicrous? Did it know that the reserves were so inadequate that a fall in the stock market could affect the situation? Only five months later, the Equitable slashed 16 per cent. off pension fund values.
If the FSA knew that the reserves were inadequate, why did it not speak up? If it did not know, why not? I have the answer. At Treasury questions on 19 July, I raised the point. The Chancellor ducked the issue, and left a junior Minister to answer; the Minister may find that she often experiences that. The managing director of the FSA's insurance section, Mr. John Tiner, wrote to me subsequently to say that he was satisfied with the Equitable's decisions. He wrote:
"The FSA has power s of intervention when it considers the Society is not acting with due regard to the interests of policy holders. Until the Equitable had completed its review and had some firm propositions to make, it is unclear what they (or we) could have told policy holders which would have put them in a better position to make a decision."
In other words, the FSA will not act unless it thinks that it can make things better. I call that the passive approach to regulation. I have news for Mr. Tiner and the FSA. I am unsure whether the Equitable has acted with due regard for some time. The same test was applied in the 1990s, when regulators could have intervened to make things better. The regulator—be it the Department of Trade and Industry, the Treasury or the FSA—is guilty as charged.
How do we make the charges stick, and how do we bring the Government to book? I hope that the inquiries will provide an answer. I am pleased to say that the FSA has concluded this morning that the regulatory approach is to be strengthened. I am interested to note that the Minister agrees with that, and I welcome her letter in which she says that she encourages the bringing forward of proposals by the end of November.
How does Parliament find out what happened? We have the parliamentary ombudsman, whose role is to decide whether there has been maladministration in government activity. However, he seems reluctant to carry out his duties in this instance. When I referred a complaint from a constituent of mine about Equitable Life, the ombudsman said that he would defer making a final decision until the FSA report became available. This summer, when the Government announced the Lord Penrose inquiry, the ombudsman announced that he had decided to await the outcome of that inquiry, and to consider further at that stage whether he might usefully intervene. That seems to be an example of bobbing, weaving and ducking the punches like a prize fighter at a boxing match.
Sir Gordon Downey, a former Parliamentary Commissioner on Standards, pointed out in a letter to The Times:
"Lord Penrose reports to Ministers, the parliamentary ombudsman, who has more powers than Lord Penrose, reports to Parliament. The very least he could do is to investigate whether or not there is a case to answer."

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The parliamentary ombudsman must recognise the essential distinction between the Executive and the legislature before Parliament concludes that he is too close to the Executive. He may well argue that there is a precedent in the Barlow Clowes affair. In my opinion, that was wrong as well. The issue is huge—as it big the as it gets—and the ombudsman must address it without delay.
The concept of saving for retirement is put into question by the Equitable Life situation, particularly the obligation to buy an annuity. In response to questions from myself and others, the Government have made it clear that they do not intend to change the present regime. In the last Budget, they recognised the anxiety that the issue has created but indicated that many of the ideas for reform would incur substantial costs running into hundreds of millions of pounds. In my view, if we can resolve the annuity issue for hundreds of millions of pounds, that is a small price to pay.
The recommendations of Dr. Oonagh McDonald's report deserve closer scrutiny by the Government than they have obviously had so far. There is much unrest concerning this matter, and it seems fair to point out that the Equitable situation would be largely alleviated if there were no obligation to buy an annuity and people had a wider freedom to choose how best to use their lifetime savings.
We have to question how much risk individuals can be expected to take in a pensions system that depends on fluctuating capital markets and income rates. The issue highlights the failure of the private sector to protect individuals against such risk and clearly demonstrates the need for a reappraisal of pensions policy. The Government's stakeholder pensions are simply a way of encouraging lower and middle income groups to begin making contributions to privately funded pension schemes. However, they carry the same market risks as those of the Equitable. If the retirement prospects of the knowledgeable professionals who took out Equitable Life policies could be damaged so unexpectedly, how reasonable is it to expect lower income groups to accept a similar degree of market risk? Investors will need unusually visionary minds when planning for their retirement. That is the exact opposite of what was intended, and will simply put people off making decisions about their retirement.
I conclude by addressing the position of the Equitable. I am extremely grateful for the advice and guidance that I received from policyholders throughout the country and from constituents. It would be an understatement to say that there is a wide range of views and opinions as to the way out. However, it seems that one or two essential principles have already become clearly established. The first is that 1 he past management of the Equitable has been woeful. What on earth did senior managers and directors think that they were doing in guaranteeing a rate of return when they had no idea of what the future held? No one in their right mind would guarantee high rates of return but, having done so, why did they not adopt an investment strategy to back it up? A prudent company would create reserves to back up the situation.
It is my opinion that pointing the finger at those who made those bad decisions is a fruitless exercise. I read reports in the newspapers that legal action may be commenced against past directors, but I believe that that
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is a complete waste of time. Even if, after years of litigation, such a course of action is successful, where does it get us? They are not rich people, and a few thousand pounds here or there will not make any difference whatever. Some say, "Let us sue the Equitable", but it is for the policyholders themselves to do that, and that would also be a pointless exercise.
There is now a new board. If the previous board did us any favours at all, it was by going quietly and ensuring a smooth transition to the present board under the chairmanship of Mr. Treeves. I must confess that I have never met Mr. Treeves, but I spoke to him on the telephone, when he had the courtesy to warn me of the 16 per cent. cut in policy values. Nevertheless, he seems to be determined to draw a line under the past and to push through the compromise agreement. All policyholders have now received a copy of the proposed compromise and details of the consultation exercise that is being carried out. Yet again, that has produced a plethora of comment and opinion, which leads to the second principle that I think is becoming accepted: that it is not a perfect world.
There are those who want to push the balance of the compromise this way or that, and to point the finger of blame at one group of people or another. Some want to delay while various opinions are sought, and so it continues. Even the legal opinions that have been obtained disagree with one another. The hard, cold, unrelenting truth is that, if the compromise does not go through, the policyholders' position will be much diminished. There is no doubt that the present board will resign, and that the sort of people whom we need to lead us out of the mire will not come forward. It is no surprise that a number of action groups have already recommended a yes vote. Whether or not the Government ultimately chip into the pot is irrelevant, as that would affect only the size of the pot and not its distribution. The lawyers will have a field day and everything will spiral downwards. I leave it to individuals to make their own choice, but no one should be unaware of the consequences of a no vote.
I regret the lack of leadership from the Government. Many people whom they employ, from civil servants to judges, are affected, including staff and employees of the House. It is the Government's approved pension scheme. Many staff in the House are policyholders, and it would be helpful if the Minister were to agree to meet their representatives to alleviate their concerns. If the Government can produce a solution to the Railtrack problem in a matter of weeks, why cannot they act in this case? The country is crying out for the Government to say something, and I mean no disrespect to the Minister when I say that it should be the Chancellor who is replying to this debate and not her. This is a profoundly serious matter that goes to the heart of our financial system and the security that it should be providing for all those who have served their nation well and are entitled to a peaceful retirement.
9.53 am
Mr.Barry Gardiner: I congratulate the hon. Member for Croydon, South (Richard Ottaway) on securing this extremely important debate. I was concerned by his somewhat partisan opening remarks, and trust that he will agree that hon. Members on both sides of the House have been most assiduous in

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questioning Ministers on the matter. He may also care to reflect that his remarks about the culpability of the Government as regulator, however true, reflect damningly not on this Government qua regulator alone, as he seemed to suggest, but on successive Governments who failed to spot or control one central problem with Equitable over the past two decades and more.
Today's Financial Services Authority report on Equitable is extremely candid, and I welcome it. It has been impossible in the two hours that have been available to read the report in its entirety, but I would like to draw attention to one section in the report, which is extremely pertinent to our debate, and which strikes at the nub of the problem that existed with Equitable Life. Paragraph 6.1.2 of the report refers to
"the need to maintain a strong solvency position that covers not only current conditions but can cushion adverse changes in the future."
That applies to any insurance company in a position such as that of Equitable. The paragraph continues:
"This is achieved by prudent valuation of the assets and liabilities, and the need to ensure that solvency can still be demonstrated in the event of a fall in equities and/or changes in interest rates."
The report adds:
"The weakness of a company with a low level of free assets can ostensibly be repaired by subordinated loans and accelerating the recognition of future profits by the use of implicit items and financial reinsurance agreements. Those latter features may be viewed as mortgaging the future to strengthen the present and, when in place concurrently with little or no free assets, render the company poorly placed to withstand a major financial shock.
The scale of Equitable Life's potential liability from the unmatched interest rate exposure, which it created when it wrote its GAR business, and the scale of the future profits it had already taken into account, combined to leave Equitable Life seriously exposed to any further financial shock."
That clearly explains, in three brief paragraphs, one of the fundamental problems that lay behind what went wrong at Equitable Life. For that reason, I want to discuss what the Government and regulators may be able to do in future to ensure that such situations do not recur.
The solvency margins that are required by the European Union are universally regarded within the financial community as a complete joke. If one considers the Independent Insurance Company and its recent collapse, it would have met the EU solvency margins four times over at the point of collapse. I recently had the opportunity to discuss solvency margins with Herr Kaulbach, the deputy financial services regulator in Germany, who also said that EU solvency margins were far too low. I found that surprising given that his boss as regulator in Bonn is Dr Müller, who wrote the famous Müller report, which stated that solvency margins were adequate in principle and in practice. However, the Government and the regulators must look again at the solvency margins applied within the EU, and change dramatically the way in which we regard the solvency of a company.
If we consider the north American model, actuaries in Canada adopt a dynamic capital adequacy testing model. That is a risk-based assessment of future trends and parameters, which is far better able to capture the
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risk exposure of a company and to ensure that its solvency margins are adequate to meet potential risks. When regulators in the United States introduced new risk-based assessment requirements in 1993–94, the histogram showed a dramatic fall in the number of insolvencies—the number was reduced by more than half in the years following the introduction of those models. I therefore urge the Government to consider extremely carefully how this aspect of financial services is regulated in this country and elsewhere in Europe. The FSA is moving in the right direction and is beginning to lead the change towards risk-based assessment, but I fear that in the rest of Europe it will not be able to take many people with it in the immediate future. Other countries are even further back in this respect than we are in the United Kingdom.
Moving on to the current circumstances at Equitable, I was most intrigued to hear the hon. Member for Croydon, South say that Mr. Treeves had had the courtesy to warn him ahead of time of the 16 per cent. cut in the value of funds. When I spoke recently to Mr. Treeves and the new chairman of the company, Mr. Charles Townsend, I challenged him about how some representatives of Equitable Life had, after the application of the market value adjuster to stop people flying from the company, said that no further penalty would be applied to members and that they had to be absolutely secret in company discussions about the 16 per cent. drop. I find it staggering that the directors of Equitable Life gave advance warning—
Richard Ottaway: Before the hon. Gentleman gets too carried away, it was done simultaneously, as the news was announced.
Mr. Gardiner: I am extremely glad to hear that the courtesy did not extend, as the hon. Gentleman suggested earlier, to prior warning of what had happened.
I shall pursue the point about the circumstances at the time. Representatives of Equitable Life Assurance company had suggested to members of the public that no further penalties would be applied to their fund. In such circumstances, there has been neglect on the part of the new board of Equitable Life, which must bear responsibility for misinformation being given to members of the public at the time. Although I appreciate the difficulty of negotiating a way forward for policyholders, I do net believe it acceptable for members of the public to be given misinformation by the company about the security of their position at a time when the company intended to slash 16 per cent. off policyholders' funds.
In my debate with Mr. Treeves and Mr. Townsend, I was further troubled by their acceptance that, because of the constraints on Equitable Life at the moment and being unable to take on new business, its future performance would be sub-optimal. We are discussing a company that accepts that its performance relative to the rest of the life assurance market will be substandard in future. It recognises that its performance will be substandard, and a huge question mark hangs over the company and its capacity to weather the storm and secure the agreement that is required. The directors have been clear that they are far from sure that the compromise will be accepted. It would be inconceivable

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that an independent financial adviser would advise an existing policyholder not to withdraw their funds now and place them elsewhere to avoid the sub-optimal performance that they admit will take place and the potential confusion and further claims on the company that may arise if the compromise deal does not go ahead.
I am sure that many other hon. Members want to participate in the debate. I could bring many more problems to the attention of the House, but I am sure that the issue will be revisited. On that note, I shall allow others to speak.
Several hon. Membersrose—
Mr. Frank Cook (in the Chair): Order. This is a vexed subject, which requires careful consideration and, in the Chair's view, a fair response from the Government. At the moment, three hon. Members are seeking my eye. I advise that we start wind-up speeches at 10.25 am, which gives us only 20 minutes. I ask hon. Members to bear that in mind and to make their comments clear and concise.
10.6 am
Mr. Michael Weir: The hon. Member for Croydon, South (Richard Ottaway) has given a succinct resumé of the history of Equitable Life. I do not propose to go into that, other than to say that the plethora of different regulators in the insurance industry over the past few years seems to be part of the problem. Equitable Life policyholders are being asked to consider the compromise proposal without having the full information about the regulator's role before them. They are entitled to that information before being asked to vote on the proposal.
The Government's lack of leadership and openness has led to great deal of suspicion—justified or otherwise—that there is something to hide. That is making Equitable Life policyholders reluctant to deal with the compromise proposal before all the information is in the public arena. The policyholders are entitled to that information. How many hon. Members have heard the remark, "Why should I bother with a pension if this is going to happen?" The situation at Equitable Life is leading to difficulties throughout the pension industry. There is a loss of confidence in pensions. That is a serious problem, especially when the Government are trying to promote stakeholder pensions.
I ask the Government to take on board a particular point. The hon. Member for Croydon, South mentioned briefly the Government's own employees. That matter was first brought to my attention not because of the guaranteed annuity rates but because of worries expressed by constituents within the NHS pension scheme. As the Minister will be aware, in Scotland—I presume that the same applies in England—many people in the NHS pension scheme paid additional voluntary contributions. The Government, through the NHS, were advising people in that scheme to invest AVCs within Equitable Life, and continued to do so even when the difficulties were apparent to them—at least they should have been apparent to them through the regulator.
A constituent told me that, in 1999, he attended a sales presentation given by representatives of Equitable Life that was organised by the NHS on its premises that
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encouraged NHS employees to purchase AVCs through Equitable Life. The Government, as regulator and as an employer, have difficulties. I appreciate that dual roles cause a difficulty for them, but many of their employees, particularly those in the NHS, are finding that their ultimate pensions will be worth a great deal less than they first believed. The Government must seriously examine the problem. It has been suggested that meetings should be held with representatives of pension schemes within the House, but the problem goes much further than that. Action must be taken to deal with the pensions of those who work in the NHS.
I reiterate the point that the matter goes far beyond Equitable Life. It has caused a drop in confidence in the other life assurance companies that are very important to the Scottish and United Kingdom economies. If the matter is not dealt with, that lack of confidence will have serious long-term effects for all of us who are looking for pensions, as it will on the Government at a time when they seek to establish stakeholder pensions. The issue is not going down well with the general public and a great deal of cynicism exists about pension provisions. Serious consequences will follow in future unless the issue is dealt with.
10.10 am
Mr. Jim Cousins: I will take your advice to be brief, Mr. Cook. I have only two points to make.
Mr. Frank Cook (in the Chair): Order. Please also accept my advice to speak up.
Mr. Cousins: I am always happy to accept your advice.
At the heart of the issue is the question of reserving policy. If we were to read the financial press for coverage of insurance companies, the question that arises time and again throughout the 1980s and 1990s is that of so-called orphan assets or free assets.
When the House deals with this issue, it should bear in mind that the issue of reserving policy, which caught the public eye and the attention of the press and the media during that period, was not lack of reserves but excess of reserves. That point must be borne clearly in mind when criticising the events of the past. When the technical issue of reserving policy ever caught public attention, the emphasis was always that life insurance providers were carrying excessive reserves.
Equitable Life's strong marketing point was precisely that it was pursuing a policy of not carrying excessive reserves. That is why so many people signed up for policies with the company. In talking about these issues, it is wise not to be too clever after the event. We now see that the central failure of Equitable Life was at the heart of its marketing strategy. Nobody could say that they were not aware of that.
However, it brings into question the issue—and I hope that the Government will address it in due course—of whether the Insurance Companies Act 1982, which established the role of appointed actuary within with-profits funds, did enough to strengthen the powers of the actuaries. It also brings into question whether some of those who had the responsibility of being

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appointed as actuaries were carrying out their duties in the best interests of policyholders. I hope that that serious underlying issue will not be overlooked.
I am a member of the Treasury Select Committee. As part of our inquiry, we were told that the Government Actuary's advice to the regulators, who were within government, was not to be made available to us. We were told that we could not cross-question the Government Actuary about the advice that he may have given to the regulators about Equitable Life's reserving policy. I hope, in the course of Lord Penrose's inquiry, that that advice will be made public. That would allow us to see what was the advice of the Government Actuary on the issue. I also hope that exposing better the advice of actuaries will be one of the main benefits that will flow out of this unfortunate affair.
The hon. Member for Angus (Mr. Weir) said that a great number of regulators were involved and, in form, that was the case. Fortunately or unfortunately, in all cases they were the same two people. There was continuity of personnel, even though the regulators switched institutions, and that will enable a proper examination to be made.
I want to emphasise the point made by the hon. Member for Angus that 40,000 people in the NHS pension scheme have additional voluntary contributions with Equitable Life and that the problem is very serious for them. Half of those people are in the with-profits fund and half are not. Half of the 40,000 went to Equitable Life as a result of transfers back into the NHS scheme, which was a product of mis-selling further on. The problem is serious and it must be addressed outside the terms of Lord Penrose's inquiry. I hope that the Government do not intend to overlook the problem by using the Penrose inquiry as an excuse.
Many people in the civil service pension scheme—for whom the Treasury was the source of advice on superannuation—also have AVCs with Equitable Life. I hope that the Minister will assure us that the issue of AVC policyholders, whether in the public sector, the Government sector or otherwise, will be addressed alongside the Penrose inquiry.
The hon. Member for Croydon, South (Richard Ottaway) said that the previous board of Equitable Life went quietly. One board member sought quietness on the board of Halifax, but I think that history will show that that was an odd place to seek it.
10.16 am
Mr. John Greenway: I do not want to detain hon. Members for long. It is fair to say that everyone who has had an association with Equitable Life in a professional or employment capacity is hugely disappointed by the way in which events have turned out. As I said in my intervention on my hon. Friend the Member for Croydon, South (Richard Ottaway), I worked for Equitable Life at its Epsom office for about two years in the early 1970s. I suspect that many colleagues are policyholders with Equitable Life, particularly Surrey Members who were serviced by the Epsom office at that time and subsequently. In those days, very few life offices wrote that type of business, and the two leading companies were Equitable Life and
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National Provident. I was headhunted by National Provident from Equitable Life, and subsequent to that I became an insurance broker.
Lord Penrose is right to go back to the early days, but I do not believe that the problems arose then, because at that time the guaranteed annuity rate, which is the cause of all the difficulties, was not considered to be particularly attractive. As I indicated in my intervention, it was common for people to be happy to borrow money for mortgages at a fixed interest rate of 13 per cent. or 14 per cent. for 25 years. There was a high interest rate policy for some time and under successive Governments. The guaranteed annuity rate was significantly less than that—I would guess that it was about 60 per cent. or 65 per cent.—so the open-market option was much more attractive.
Conditions changed in two ways. First, many other insurance companies entered the market and in the late 1970s and early 1980s successive Governments made investment in personal pensions much more attractive by increasing the amount of money that could be put into a policy. The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), who is an active member of the all-party group on insurance and financial services of which I am the chairman, knows that the group takes a close interest in the matter. He is exactly right to say that Equitable Life pursued a different policy on reserving from other companies.
Many companies have had huge orphan fund problems. For example, Equity and Law recently made an arrangement with its policyholders, of which I am one, to make a payment whereby some of the orphan funds would go to the company. However, Equitable Life was always supposed to be ahead of the game. It was the top and most attractive company, and the one in which everyone ought to be recommended to place their business. I suspect that there were considerable pressures in Equitable Life to maintain that position. I also suspect that the inquiry will find that the slip into not making adequate reserves for a potential downturn in interest rates started about 20 to 25 years ago.
For now, I will merely address two simple points, because it will take a long time to absorb all of the contents of the report. We should have regard for the expectations of the policyholders. They were encouraged to join the mutual society by almost every financial journalist—and public sector workers were encouraged to join to take out various types of investment—and they had a right to expect that the company was properly managed. They also had a right to expect that supervision of the company was satisfactory. That point goes to the heart of the matter. My first reading of the document confirms to me what many hon. Members have suspected; under the prudential supervision of the Department of Trade and Industry and subsequently the Treasury—long before the Financial Services Authority was formed—that supervision was inadequate. The Government must address that issue now.
As my hon. Friend the Member for Croydon, South has stated, policyholders must now make a choice; as the hon. Member for Brent, North (Mr. Gardiner) said, they have been let down once with regard to the 16 per cent., and they cannot afford to be misled again. I suspect that they have no choice but to accept the offer, which has, I believe, been made in good faith. It would

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help them to come to that conclusion if, as several hon. Members have suggested, the Government were to indicate early on that if the inquiry by Lord Penrose pins some of the blame on regulatory failure by the Government, they will do the honourable thing by providing funds. That would reassure the policyholders that their policies will continue to provide the returns to which they are entitled.
10.21 am
Angela Watkinson: I will not repeat the many valid points raised in the debate, but I wish to refer to a comment made by the hon. Member for Brent, North (Mr. Gardiner) about the advisability of policyholders withdrawing their funds and transferring them elsewhere if the compromise scheme is unsatisfactory to them. That option is not available to many of my constituents who have contacted me with regard to the matter, as they are nearing retirement. Moreover, the transfer of funds by policyholders who are able to do that would exacerbate the problem for those who have no option but to remain in the scheme.
Mr. Gardiner: I accept that point, a policyholder who has less than about 10 years to go until retirement would be in an invidious position.
Angela Watkinson: These constituents of mine, some of whom are due to retire in less than five years, are facing a very different retirement from that which they had planned and paid for, and they are entirely dependent on the compromise scheme. It has been stated that legal opinion about that scheme is varied, and I urge the Government to clarify the position swiftly. That would alleviate the stress on the many people of ordinary means who have tried to provide for their retirement.
10.32 am
Dr. Vincent Cable: I congratulate the hon. Member for Croydon. South (Richard Ottaway) on focusing on the essential problem, which is the issue of government regulatory failure. It is not the job of hon. Members to be financial advisers to our constituents, or to look over the shoulder of the new management and to tell it how to run the company. However, it is our job to scrutinise the Government's actions and to examine the possibility of regulatory failure.
I will make two brief comments about the company and its current situation. I, like other hon. Members, have constituents coming to me with problems with regard to the situation, and it is important to point out to them that their losses can be separated into three different elements: first, the losses associated with the guaranteed annuity rate liabilities, although it is still unclear how open-ended they are—a figure of £6 million has been mooted, but it could be more than that—secondly, the losses that they are experiencing, along with everyone else in the life insurance industry, because of the falling value of the stock exchange; and, thirdly, the losses that they would incur if they chose to withdraw from the society—which are optional losses, as they could choose to participate in the conference rather than to withdraw from the society.
As for the conduct of the company, the hon. Member for Croydon, South was correct to stress that there would not be any great advantage in different groups of
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policyholders fighting one another in a mutual society. That is the road to mutual ruin and the enrichment of lawyers. However, there is certainly one category that merits detailed attention—that of the auditors' conduct. I find it impossible to understand why Ernst and Young gave the company a completely clean bill of health in 1999, after all the discussion that took place in the City during 1998–99. The regulators were discussing the matter and the memorandum that I produced before a debate in the House in June 1998, when the Department of Trade and Industry was advising about insolvency, also dealt with it. That action was utterly incomprehensible. If there were any possibility for litigation, I would have thought that it lies in that direction.
I return to the key issue, which is the role of the Government. The Government's prime responsibility in the matter now, whatever may have happened in the past, is to ensure that there is a transparent and expeditious process for examining whether there has been a regulatory failure. I agree with the hon. Member for Croydon, South that the present position is a mess. First, there is the Baird report, which appeared at 7.30 am—some of us have had a chance to glance at it. The Baird report was structurally flawed from the outset, because it was a report by the FSA about the FSA, and even if Mr. Baird is a man of enormous integrity, and I am sure that he is, the credibility of this report is bound to be questioned and it will have limited value.
Another basic problem with the Baird report lies in the way in which it has interpreted its own terms of reference. I read the original terms of reference, which state clearly that the report will describe the background and events leading up to the FSA's assumption of responsibility for the prudential regulation of Equitable Life on 1 January 1999. In fact, it has not done that. It seems to have interpreted its brief, in an extremely narrow way, to refer to the FSA's management of the affair after 1999. The report could have gone into the early history, but the FSA chose not to do so.
That responsibility has now fallen to the Penrose inquiry, which we hope will be definitive. It will certainly be very long—we understand that it will take until next summer. It is not clear that it will be entirely in the public domain; I hope the Minister will answer questions about that.
The big problem with the process—the hon. Member for Croydon, South dealt with this very well, but I will reinforce the point—is the way in which it has paralysed the parliamentary ombudsman. I have been writing to the ombudsman to ask him why he cannot get on with the job that Parliament has given him to do. The answer that he gives, in a letter written yesterday, is clear. He states:
"My decision not to begin an investigation at present was influenced by a consideration of the practical difficulties that will inevitably arise when two bodies attempt simultaneously to investigate matters which, while not identical, will involve a significant degree of overlap."
Why are two bodies conducting overlapping investigations? The answer is that the Government asked them to do so. The parliamentary ombudsman cannot get on with his job because of the structure of the process that the Government have set in train. That is unsatisfactory.

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What can we already say about the evidence of regulatory failure? There are three elements. First, there is the early history, covering the period of the early 1990s, when guaranteed annuities were being written extensively by Equitable Life. One could say that we are wise with hindsight about that practice, but other Members who are knowledgeable about the industry, such as the hon. Member for Ryedale (Mr. Greenway), know that the Equitable Life was unique in going so far out on a limb in writing guaranteed annuities on such a scale. It was already becoming apparent that a period of low inflation and low interest rates was upon us. Indeed, the Government of the day adopted the Maastricht targets, which precisely embodied that.
There must surely have been, at some point, an intervention from the Government Actuary advising on the structural soundness of that type of financing. It is important that the evidence of the exchanges between the Department of Trade and Industry, the Treasury and the Government Actuary is publicly revealed, so that we understand at what point it was clear to the financial community that the policies that Equitable Life were writing were unsustainable. That is one of the key elements in the story that has not yet been revealed.
Secondly, there is the Baird report itself. Obviously, I have not had an opportunity to read it in the few minutes that we have had access to it, but it is already clear in the conclusions that it reaches. Although it is put politely, there are some damning comments on the FSA's role. Section 6.6.1 of the report states:
"At the outset …'the prudential regulator'…addressed the issue of reserving for the guarantees in a resolute manner. There were, however, some particular issues which the prudential regulator missed or failed to follow up, with which we deal below."
Section 6.6.2 continues:
"In respect of this episode, we believe that if the prudential regulator had been more proactive and adopted a more challenging, carefully co-ordinated and researched approach, then it would have allowed itself more time and been better informed, to consider in conjunction with Equitable Life, how best to manage the consequences…of the judgment of the House of Lords."
The report goes on to describe poor levels of communication and co-ordination between the two arms of regulation. It is for the parliamentary ombudsman to judge whether there has been a regulatory failure, but prima facie, even the Baird report, with its restrictive mandate, seems to find serious faults.
I conclude by suggesting what should be the Government's role in future. The problem, as in the old Irish saying, is that we should probably have started from somewhere else, but I hope that the Minister will give us an assurance that the inquiry will proceed quickly and with the full co-operation of the Government. There should be no attempt to conceal documentation, which should be transparent and in the public domain so that the parliamentary ombudsman can get on with the job.
The hon. Members for Newcastle upon Tyne, Central (Mr. Cousins) and for Angus (Mr. Weir) and others raised the worrying matter of what the episode tells us about the state of the long-term private savings and pensions industry. For far too long in Britain there has
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been a conceit that whereas the benighted continentals have the problem of unfunded pensions, we do not because we have brilliant financial institutions that look after everyone's private occupational pensions. That illusion and conceit is crumbling rapidly, for several reasons: first, the compulsory annuity problem, which may be resolved as there are solutions available; secondly, the growing problem—it could even be called a crisis—in the with-profits sector. We are probably entering a long-term bear market in equities and many of the assumptions that underlie the growth of bonuses may prove to be fallacious. The confidence that previously existed in private pension provision has been further undermined by chronic and endemic mis-selling, which is undermining the entire structure. The Government must give us a clear lead on the matter of stakeholder pensions and on the future of private and occupational pensions in an environment where confidence has been severely damaged.
10.32 am
Mr. Christopher Chope: I warmly congratulate my hon. Friend the Member for Croydon, South (Mr. Ottaway) on securing the debate and on showing such a command of the complex issues that are involved. I hope that the Minister will answer his questions and those asked by other hon. Members in this important debate.
When my hon. Friend raised the issue on 19 December 2000, he secured from the Minister who responded a guarantee that there would be an inquiry; today he has initiated the debate and forced the Government to produce their FSA report. To judge by the Minister's body language and the words used in August when the Penrose inquiry reported, it was clear that the Government were toying with the idea of delaying publication of the FSA report until after Penrose. I am glad that they have now come clean and produced the report.
It is disappointing that we were given only two-and-a-half hours notice that the FSA report was being produced. If the Government could produce a report at 7 o'clock in the morning, why could they not do so at 7 o'clock the previous evening, so that people had a chance to read it? I was amazed to discover from representatives of Equitable Life yesterday evening that they were told only at 5.30 pm that the report would be published this morning, and that they could look at it on a website at that time. That is thoroughly unsatisfactory; we are grateful to have the report, but it is a pity that the Minister did not make a greater effort to produce it a few hours earlier so that we had more time to read it.
I hope that the Government will be prepared to use their time to allow a fuller debate of the issues raised by the report. It is no good saying that we will not have a further debate until Penrose has reported. Policyholders must decide in the next few weeks whether to accept the compromise, and they are entitled to the benefit of a Government response on the subject. I am pleased that the Minister is attending the Treasury Committee on 30 October, but that is not enough, and the Government should provide us with a proper debate.
Much of the debate has been about possible regulatory failure. The first question is whether there has been such a failure? The report, especially chapters 5 and

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6, suggests strongly that there has. The second question is that if there was a failure, was it caused by the negligence of one or more of the regulators? The parliamentary ombudsman should be getting to grips with that issue straight away. If a regulator was negligent, will policyholders who suffered loss as a result receive compensation? The Minister seems to have answered that question already in a written answer to the hon. Member for Brent, North (Mr. Gardiner) on 15 October. He asked if the Government
"will establish a scheme to compensate policyholders of Equitable Life for losses sustained by them as a result of regulatory failure."
The Minister replied:
"We have no plans to do so."
I am sure that I am not alone in finding that answer contemptible and an insult to policyholders. If a regulator has been negligent, it—or, in other words, the Government—should be open and forthcoming in meeting claims for compensation flowing from that negligence.
I tried to find out whether Lord Penrose would investigate allegations of maladministration by the regulators, but the Minister, in response to a specific question, merely referred me to the terms of reference of the Penrose inquiry, adding:
"The scope of the inquiry being conducted by Lord Penrose is a matter for him, subject to his terms of reference."—[Official Report, 15 October 2001; Vol. 372, c. 850–51W.]
That makes me rather suspicious. Many hon. Members have referred cases from constituents to the parliamentary ombudsman, and he should now investigate those issues. As has already been mentioned, he has written to a number of hon. Members during the past few weeks to explain why he should not investigate at the moment. I hope that he will reconsider in the light of today's report, which shows a prima facie case of maladministration. Indeed, he said in February that it would be helpful to read the Financial Services Authority report. He said that it
"may serve to indicate those areas, if any, which warrant further scrutiny by the Ombudsman."
He was right; the FSA report indicates areas that warrant further scrutiny, which I hope that he will get on with straight away.
The problems of Equitable Life affect millions of people, and I must declare as an interest that my wife is a policyholder, although I am not. The former commissioner, Sir Gordon Downey, has argued that the ombudsman should undertake an inquiry now, and his arguments are persuasive. The Penrose inquiry will investigate matters going back 30 or 40 years, or perhaps even longer; the parliamentary ombudsman can investigate only issues that do not fall foul of the 12-month time bar. He could concentrate on the most recent events, which are highlighted in the report before us today.
There is insufficient time to deal with all the issues that have been raised by policyholders, but I hope that the Minister will bring pressure to bear through the regulator to ensure that policyholders receive proper information to enable them to assess whether the compromise proposals are in their interests. They are still waiting to see the financial results up to 30 June, but they should have much more up-to-date information, particularly in light of the dramatic reduction in values that was announced on 16 July.
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The Minister will know that her predecessor said in the debate last December:
"The FSA is concerned that material changes to the expectations of Equitable Life policyholders are seen in context, and that policyholders should not rush to take precipitate action. The FSA has advised Equitable's customers to remember that the society remains solvent and that their existing policies are still valid."—[Official Report, Westminster Hall, 19 December 2000; Vol. 360, c. 13WH.]
There are many policyholders who, in the light of that advice, did not rush to sell their policies. They now find that, as the new chairman of Equitable Life has admitted, those who withdrew their money before 16 July took a disproportionately larger share of the fund than they were entitled to. Policyholders must not be let down again. They need proper information on which to base their judgment. That should come from the regulator to the individual investment advisers. It is not for us as Members to give that advice, but we can legitimately ask that the framework to make that advice available be established quickly.
I should like now to refer briefly to one or two parts of the report. The Treasury is trying to suggest, and the Minister may be party to this, that it is a "not me guy" situation and that the Treasury was not involved. The report makes it plain that in January 1998 the Treasury took responsibility from the Department of Trade and Industry for the prudent regulation of insurance companies, and from 1 January 1999 it contracted out that role to the FSA but did not surrender or abandon it. That is why the comments in the report about what the Treasury knew and the action that it should have taken but did not take are particularly pertinent.
Those who have had a chance to read the report will know that in August 1998 there was widespread awareness of the problems facing Equitable Life policyholders and memorandums were flying round the Treasury and other parties. Presciently paragraph 5.6.2 states that one of the Treasury memorandums noted that that was
"an example of an issue on which we will need to work closely together to ensure a seamless regulatory approach."
That was in autumn 1998. If the Treasury had followed its own advice, I doubt whether policyholders, particularly those who joined after that, would have been in their current mess.
There are a number of other damning indictments of Treasury involvement. It is clear from paragraph 5.7 and the following paragraphs that the Treasury was aware that the policies being issued by Equitable Life and the related advertising were not accurate. It knew that back in 1998 although nothing was done about it. Indeed, when the matter was raised in 1999 there seemed to be some doubt as to how anyone found out about it originally.
The suggestion running throughout the report is that the Treasury was slow on the uptake and that it did not investigate and take a hands-on approach when it should have done. As a result, policyholders have been let down. There is clear evidence that the Treasury needs to allow the parliamentary ombudsman to investigate these issues on an independent basis. I hope that it will not stand in the way of that. I look forward to hearing what the Minister has to say.
10.43 am
The Economic Secretary to the Treasury (Ruth Kelly): I congratulate the hon. Member for Croydon, South (Richard Ottaway) on securing this debate. He set out the background to these events clearly and I do not intend to repeat them. I express at the outset my deepest sympathy for all those Equitable Life policyholders, including those who have taken out additional voluntary contributions, who have been affected by recent events. I fully understand the distress and anger that they feel. I should also like to say at the outset that it is not the Treasury that advises people in the public sector about what policies they should take out. It would be inappropriate for the people who provide policy advice on financial services to do so. It is their employers who take that responsibility.
The House will know that I announced on 30 August that the Government had established an independent inquiry under Lord Penrose into events at Equitable Life. Equitable Life indeed raises important issues, many of which have been raised today. The issues deserve full consideration by an independent inquiry, which will consider what lessons can be drawn for the conduct, administration and regulation of life assurance business.
Lord Penrose's terms of reference are:
"To inquire into the circumstances leading to the current position of the Equitable Life Assurance Society, taking account of relevant life market background; to identify any lessons to be learnt for the conduct, administration and regulation of life assurance business; and to give a report thereon to Treasury Ministers.
Those terms of reference will enable Lord Penrose to consider events at Equitable Life from all angles. By virtue of its wide-ranging remit, Lord Penrose's inquiry will be able to look back as far as necessary to establish the origin and development of problems. It can look in detail at the actions not only of the Financial Services Authority but of the society and all other key players. He can investigate issues that have a bearing on the subject, regardless of where and when they arose. It is important that all the lessons are learned from what has happened. The inquiry will allow us to achieve that.
I have written to Lord Penrose today, enclosing a copy of the FSA report into Equitable Life, published by the Treasury this morning. I have taken the opportunity to publish that report as early as possible and in time for Members to consider the information in front of them before our debate.
In line with its terms of reference, the FSA's report analyses the conduct of business and prudential supervision from January 1999 until the society closed to new business in December 2000. The report provides a helpful contribution to investigating problems at Equitable Life, but it is not—and could not have been—a full picture of events. I would like to thank Mr. Baird, who conducted the inquiry, for his report and all the useful research that it contains. The review could not look back more than two years out of a total of more than 40. Nor could it investigate the roles of all involved, the deep-rooted nature of the problems or the actions of Equitable Life itself. Mr. Ronnie Baird and his team at the FSA had no access to documents held by Equitable Life or its advisers. Nor could the inquiry conduct interviews with any of the board members, staff or professional advisers. As such, it was unable to examine events as they unfolded.
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Problems at Equitable Life clearly date back many years. As the report makes clear, the seeds were sown as far back as the 1950s when the first guaranteed annuity policies were sold. A full explanation will have to wait for Lord Penrose's review and report. In my letter to Lord Penrose, I made it clear that the Government recognise that the FSA report will provide a valuable input to his inquiry, but he cannot, of course, be bound by it or its recommendations. He will wish to form his own views on the basis of the evidence that he gathers.
Although we expect that Lord Penrose will wish to investigate events of recent years, including those that took place after Equitable Life closed to new business—a period that the FSA report was not asked to cover—he will also be free to go back as far as he thinks necessary.
In his reply to my letter, Lord Penrose says of the FSA report:
"As you rightly observe, it covers a relatively short period and is narrower in focus than the Inquiry I have been asked to undertake. In particular, my Inquiry will have to look more deeply than the review team have been able to at the activities of the Society, its directors and managers in relation to the classes of business that are of primary interest. This difference of focus is bound to be reflected in the conclusions I shall reach."
He continues:
"Nevertheless, the narrative of the evidence collected by the review team, and the comments made in the report, provide a valuable insight into the culture and workings of the regulatory authorities over the period. The report will help focus lines of enquiry extending over the longer period I shall have to address, even though it cannot, of course, confine the scope of my Inquiry."
The Penrose inquiry will look into the circumstances leading to the current situation at the Equitable. It will not comment or offer advice on the merits of any compromise deal proposed to Equitable Life policyholders and nor will it review past judicial decisions in relation to Equitable, or pre-judge future decisions which will be rightly taken by the courts. I very much hope that interested parties will co-operate fully with Lord Penrose's inquiry in its current non-statutory form, but I have made it clear that if Lord Penrose considers that there is a failure of co-operation, I will not hesitate to put the report on to a statutory footing.
Lord Penrose began to work full time on his inquiry as soon as it was announced at the end of August. He is determined to complete his report as soon as possible. Hon. Members have made clear today the importance of that. I agree with them. Lord Penrose will be able to consider some of the detailed issues that have been raised today, including the role of the appointed actuary. I shall today also issue a consultation paper setting out proposals for the situation where an appointed actuary will have to report information to the FSA. This will form part of any potential review of the role of the appointed actuary, which is also considered in the Baird report.
The FSA report makes several recommendations about the regulation of life insurance. In particular, it has called for improved solvency and disclosure standards to ensure the prudential framework for life assurance adequately reflects the nature, direction or scale of business. Under the new regime—which will come into force at the end of November—created by the Financial Services and Markets Act 2000, that will be the responsibility of the FSA. Some of the recommendations will necessarily involve consultation with the industry and I am anxious that the FSA should take it forward as a matter of urgency.

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The report also makes several extremely important recommendations on strengthening the regulatory approach—the culture, processes and tools of the FSA—to ensure that it achieves the "role, style and approach" envisaged for the FSA as a single integrated regulator. In particular, it recommends that the FSA should take a more proactive approach to regulating the insurance industry to ensure that the interests of customers are properly protected; that it should take action to break down all remaining barriers to internal communication and co-ordination, to achieve the full benefits envisaged when the FSA was established; and that it should improve its use of risk-assessment techniques. My hon. Friend the Member for Brent, North (Mr. Gardiner) pointed out some reforms that will be taken forward in this area I am sure that he is aware that the FSA is considering insolvency standards in that area.
The proposals are core ones. The Government expected that, for example, brigading conduct of business regulation and prudential supervision into one organisation would create opportunities for an integrated approach, even in advance of the enactment and implementation of the Financial Services and Markets Act. From N2—the end of November this year—the Act will be implemented in full. The transition period will be over and we expect all the benefits to exist. The FSA report is clear that the benefits of an integrated proactive, risk-based regulator will be substantial. Accordingly, I have today written to the chairman of the FSA, Howard Davies, asking him to pursue vigorously the recommendations contained in the report, particularly those relating to the problems of poor communication.
Given the importance of those issues to delivering the benefits of the new approach, I have asked him to provide me with a full report by 20 November, covering the action taken to implement the recommendations. That does not mean that we were wrong to establish the Financial Services Authority. On the contrary, the FSA's report shows that the Government were right to make reform of the existing framework of financial regulation a priority on taking office, and that the situation at Equitable would have been worse without a single regulator in place over the past two years.
The FSA report that we published today is only a partial picture. We set up the Penrose inquiry to provide us with a far wider perspective, not to apportion blame but to learn lessons and ensure that the mistakes of the past are not repeated.
Mr. Chope: If the report will not apportion blame and is only partial, how can the Minister already have prejudged whether the Treasury will in any circumstances pay compensation to policyholders?
Ruth Kelly: I have looked at some issues with regard to the use of public money. In particular, when I announced the public inquiry by Lord Penrose, I said that we had considered the use of public money to inject funds into a lifeboat for Equitable Life and had specifically ruled that out as an option. We do not think that that is the appropriate way forward; rather, we should learn all the lessons from the Equitable Life
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situation to minimise the risk of such a scenario happening again. That is how the terms of the Penrose inquiry were drawn up.
I will not stand here today and prejudge the outcome of Lord Penrose's review. Several hon. Members have questioned the independence of Lord Penrose, but I wish to underline that the reason why we cannot say specifically what he is looking at or how the review is developing is precisely the independence of that review.
Richard Ottaway: If Lord Penrose finds that there has been a regulatory failure, the Government must be liable. Is not the right approach for the Government to say that they have an open mind on whether compensation should be paid, rather than to rule it out at this stage?
Ruth Kelly: I certainly would not pre-judge any recommendations that Lord Penrose will make. It is open to him to pursue the lines of inquiry that he sees fit.
Mr. Gardiner: I am grateful to the Minister for her comments, because I believe that we can take some solace from her words. It would be imprudent to set any course or to put in words anything that might influence the inquiry to reach one conclusion or another. However, I listened to the Minister's words carefully and think that they are well judged.
Ruth Kelly: I thank my hon. Friend for those comments. It is absolutely clear that an independent report was necessary in the public interest, and that is exactly why we decided to set up the Penrose inquiry. I expect Lord Penrose to report as soon as he thinks that he is able to, which I hope will be some time next year.
Mr. Cousins: I welcome what the Minister said about strengthening the role of the appointed actuary; that is a fundamental point. However, will Lord Penrose be able to review the role of the Government Actuary in the advice that was given on the Equitable Life situation?
Ruth Kelly: Action has already been taken as regards the Government Actuary's department, and actuaries responsible for life insurance have been fully incorporated into the FSA. Clearly, it is a benefit of a seamless and integrated regulator that they should be. Lord Penrose will be able to review any actions that he wishes to within his terms of reference. Of course, that could include the role of the actuaries.
Given the importance of the issues, I stand ready to brief the House as events unfold. I have offered to appear before the Treasury Committee and shall do so shortly.
Mr. Frank Cook (in the Chair): This has been a splendid debate, displaying exemplary standards of preparation, delivery, candour, regard and mutual respect. However, we are compelled by the rules to move on to the next topic for consideration, which is the London Underground. I ask right hon. and hon. Members to leave the Chamber quietly so that we can get on with our business.

London Underground
11 am
Harry Cohen: I thank Mr. Speaker for granting me this debate on the London Underground. I want to concentrate on future investment and funding plans and the Government's proposed public-private partnership.
I received a letter from Mr. Double, the director of the City Remembrancer's Office in the City Corporation. He wrote:
"You will already be aware of the importance the City attaches to an efficient rail network servicing London. In the City Corporation's view, there is undoubtedly a need to improve the rail transport system and in particular to modernise the London Underground, including the Central Line. The Corporation's strong interest in the Crossrail project, which should do much to improve transport in the capital, also reflects this concern."
He asked me to bring his remarks to the attention of the House. I support his sentiments strongly on improving the Central line, upon which my constituency depends, and Crossrail. We need new capacity; Crossrail would provide that, and relieve overcrowding. There should be extra investment above what the Government now propose.
The Government have pledged £13 billion of new investment over the next 15 years, which is welcome, but a similar pledge was made before the 1997 election. It is disappointing that so little progress has been made. In their first term, the Government set up the Greater London Authority and the office of the London Mayor, but the court case this summer showed that the Government have been in control all along. More progress should have been made. The Government have said that they put £1 billion more into London Underground in their first term. That is true, but £2 billion went on the extra cost of the Jubilee line extension, so the rest of the infrastructure suffered during that first term.
There has been serious decline. Figures obtained by the hon. Member for Carshalton and Wallington (Tom Brake) for signal and points failures and track failures show a 35 per cent. increase for 2000–01 in comparison to 1999–2000. There were nearly 1,280 hours of delays in a 12-week period from January, showing the deterioration in the tube.
An article on the front page of today's edition of The Guardian states that anticipated investment has been cut by 30 per cent. The report states that when my right hon. Friend the Deputy Prime Minister was Secretary of State, he indicated that a grant of £775 million could be expected for the tube in this financial year, but that ended up as only £520 million. That did not really make an impact on the decline that I have mentioned, and it was against that background that the Government proposed their version of a public-private partnership. I feel that the Government are showing inflexibility, which is a matter for concern. It is also regrettable that they have fallen into dispute with the Mayor and his Transport Commissioner Bob Kiley.
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I want to talk about the Secretary of State's press aide Jo Moore. Her 11 September bad taste e-mail—

"It is now a very good day to get out anything we want to bury"
rightly has been criticised. The Home Secretary called it "extraordinarily stupid" and the Secretary of State for International Development described it as "cynical". However, it was the only serious breach of the Prime Minister's invocation that we stand shoulder to shoulder with the United States in moral outrage about the events of 11 September. She has apologised, there has been an official reprimand and, in my view, she should be encouraged to find alternative employment.
That incident overshadowed another issue that came to light; an official effort to denigrate Bob Kiley. Mr. Evans, an honourable civil servant, was removed from his post. He is said to have lost the confidence of my right hon. Friend the Secretary of State for Transport, Local Government and the Regions when he refused to be involved in political briefing to vilify Mr. Kiley. Members of the Labour party, trade unionists and Londoners do not want backbiting and spitefulness. They want consensus and co-operation with the Mayor. The Mayor was elected to do the job and, in due course, he and Mr. Kiley will have to take a degree of responsibility for the tube. The Secretary of State should apologise for that campaign of vilification against Mr. Kiley.
If Mr. Kiley were so useless, why, at the beginning of May, did the Prime Minister ask him to take charge of the negotiations with the PPP bidder? Vilification was not a good approach for the Government to take, and it should be abandoned. If the Government want to criticise Bob Kiley, Ministers need only look at Ian Williams' article in Tribune on 27 July. He points out the problems with the New York system, but also states:
"So what is the good news? First, the system is cheap with a flat fare of around £1 regardless of distance. Ridership is way up and the system is perceptibly better policed and clean than it was before. Air conditioning helps on the trains as well."
I wish we had air conditioning on our trains.
"There is investment in rolling stock and in upgrading stations. And, for all its faults, it is a 24-hour system as befits a world city. What capitalist secret could Kiley bring from New York? Simple. Money works and more money works harder. New York's recipe for success is simply a return to pre-Margaret Thatcher days: a low flat fare with intermodal transfers and lots of national government money…And of course, there is private finance. However, instead of dirtying the money through the hands of financial intermediaries, New York Transit Authority raised $5 billion in bonds at preferential rates for the current capital plan and even got half a billion from New York City bond flotations. The transit authority takes the money and uses it."
That is a statement of what could be done in London. I am concerned by value for money, accountability and effectiveness of investment.
This is the first opportunity to raise in the House a report released in the summer by Deloitte & Touche. It compared, for value for money purposes, the PPP proposals with the normal public sector financing approach. London Underground sought to stop both its publication and its progress to the National Audit Office. However, Mr. Justice Sullivan allowed its publication on 31 July. He stated:

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"Once the PPP agreements have been concluded, the horse will have bolted. If Deloittes are right, it will be a very expensive bolting. It is only right that their view about the V[alue] F[or] M[oney] condition should be placed in the public arena, together with all the other views, so that the electorate may be assisted in making its choice in due course."
I shall provide the Chamber the headings of the executive summaries in the report:
"Neither the 30 year nor the seven-and-a-half year comparison provides a satisfactory basis for establishing—value for money. Highly material adjustments to the—public sector comparator—are judgmental, volatile or statistically simplistic…Some of the statistical analysis is arbitrary and could be mis-interpreted by the reader…Selection of preferred bidders too early in the process could lead to a materially adverse impact on—value for money. The financial advantages of selecting—a specific contractor as the…preferred bidder depend upon judgmental adjustments…Public sector bond financing has been largely dismissed."
Mr. Edward Davey: I am grateful to the hon. Gentleman for giving way. He is making a very serious speech, and I am worried that not enough of his London Labour colleagues—with the exception of the hon. Member for Brent, North (Mr. Gardiner)—are present to hear his remarks. Having read Deloitte & Touche's report, does the hon. Member for Leyton and Wanstead believe that the Public Accounts Committee, with the support of the National Audit Office, should conduct an urgent inquiry into the public-private partnership for London?
Harry Cohen: Yes, I support that proposal. As for my London colleagues, I know that they will read the account of this debate avidly.
In his article of 26 August, Will Hutton of The Observer refers to the "mendacious gerrymander" exposed by the Deloitte & Touche report. Will Hutton is a director of the Industrial Society, and in the past has spoken in favour of proper public-private partnership as a means of investment. His excellent summary refers to "four dodges" which I want to read into the record:
"Dodge One: Everybody recognises that there would be substantial efficiency savings of around 20 per cent if LU were offered the same framework as the private contractors—the guarantee of a high subsidy over years and the capacity to raise external finance freely as investment needs dictated.
The Government cannot accept this, thus the concept of 'reputational externality' has been introduced—out of thin air. This is the imputed £700 million cost LU must bear because it assumed that as a public organisation it is bound to fail to deliver and raise the financing costs of the public sector generally."
Mr. Barry Gardiner: I recall clearly the article to which my hon. Friend refers, but does he accept that the journalist concerned is making a mendacious point? When looking at a public sector comparator, one must remember that any cost overruns would be borne by the taxpayer rather than the public sector. In assessing the private finance method and the
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public sector comparator, one must make a financial assessment of the quantum of that risk. It is absolutely legitimate to try to put a price on that risk.
Harry Cohen: I will come to the point about private sector risk-taking, but as Will Hutton says, it was not right to state that the public sector comparator would cost £2.5 billion more.
Mr. John Horam: The hon. Gentleman is making a very interesting speech. I, too, am sorry that—excluding Ministers—he is supported by only one of his colleagues, the hon. Member for Brent, North (Mr. Gardiner).
Tom Brake: He is opposed by his colleague.
Mr. Horam: Indeed. Does the hon. Gentleman agree that, in addition to more Labour Members, a Treasury Minister should also be present in the Chamber? It is clear that the real villain of the piece is the Chancellor of the Exchequer, who has controlled the situation from the beginning and continues to do so. That is why London is still suffering.
Harry Cohen: I hear the hon. Gentleman's point, and I shall refer to the Chancellor.
The article by Will Hutton continued:
"Dodge Two: London Underground is such an organisational no-hoper and bound to manage any investment programme so disastrously as a public enterprise that there will be problems for passengers. LU's estimates of the 'performance adjustment' have bounced around between £460 m and £1.34 bn, finally settling on £1.17 bn. But this is not a real but an imputed cost, subject to political exigency.
Dodge Three: London Underground, because it is a public organisation, has no capacity to learn from its mistakes, but instead is condemned to repeat them on the same or even greater scale. Thus because there have been major cost overruns, such as building the Jubilee line, it is forced to assume it can never improve its systems to do better as it is in the public sector and thus is organisationally stupid. Cost: £1.576 bn.
Dodge Four: As no private sector organisation ever makes mistakes it is assumed that the private contractors will deliver what they promise to budget and there will be no upward renegotiation of a contract—ever. This report cannot be read without a mounting sense of incredulity and anger. It is hard to see how the National Audit Office can accept the spurious reasoning."
He added that to lift the performance of the London tube, it would need to be run by an innovative and creative organisation managing an integrated system, and that that is not what the PPP could deliver.
I received a reply from the Minister in July about the comparator. He said:
"We will make this judgment guided by the results of the robust public sector comparator that London Underground has constructed."
Alongside the Will Hutton article, the Minister's response gives a new definition to the word robust. What is the total investment proposed, and what are its components? When I asked staff of the London Underground at the Labour party conference, they were vague. They talked of £900 million a month being introduced, but the total figure, or who was paying what, was not clear. At the party conference, the Chancellor said:

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"And on London Underground we plan to invest not less public money but more, an extra £13 billion of public funds, the biggest public investment programme in the history of the Underground. And it is precisely because we are determined to avoid a repeat of the unacceptable extra costs of the Jubilee Line's delays and overruns—nearly £2 billion paid unnecessarily by the public sector to the private sector—that we are requiring that the private sector accepts its responsibilities, tied in to a proper partnership to raise capacity, improve safety, enhance reliability, and ensure that the £13 billion we invest delivers the best public service and protects public interest."
The Minister's July reply quoted the £13 billion figure and said that an estimated 20 per cent. of finance for these plans would be provided by the private sector with the remainder coming from London Underground fares and Government grants. Is the Chancellor right? Will the public be putting in £13 billion? If that is the case, what will the private sector invest? Will it be a greater total? What is the amount expected from fares? Can we have some clarity on the total amount?
Mr. Eric Pickles: I am sorry to interrupt the hon. Gentleman's fascinating speech. He mentioned the Labour party conference, but did he attend the question-and-answer session at which the Secretary of State promised that if independent evidence were produced to suggest that PPP did not offer value for money, PPP would not go ahead? Does the hon. Gentleman consider that the Deloitte report provides that evidence?
Harry Cohen: The Secretary of State did say that, and repeated it to the London group of Labour Members.
I would like the Minister to tell me what the total investment will be. What will be the input from the private infracos? What is their rate of return and what is it based on? Are they spending public money? If so, why should they get a rate of return at all? Or should not that rate be much less than if they were putting in their own money? Will they be getting their return before they have invested anything, or before they have invested the full amount? The Government have said that they will impose penalties on them if they do not perform, but will those penalties be paid for by public money? We need some answers.
Will the arrangement be comparable to that for the Isle of Skye bridge? That was the subject of a good article by Ian Aitken, again in Tribune, which is well worth reading; I recommend it to hon. Members. The islanders have to pay £5.70 each way to cross the bridge. He said that that was doubly outrageous given that £25 million of the cost of the bridge was shelled out by the taxpayer and only £500,000 came from the PFI consortium, which is now pocketing more than £3 million a year in revenues. I am worried that we will have that kind of set-up with the private infrastructure companies in London Underground; that is why we need to see the figures.
What are the implications of the Railtrack collapse? The language coming from the Government is of the private sector taking the risk, but the infracos will surely demand more cash and more profit, which will mean less value for money and perhaps none at all. The contracts are for 30 years with reviews after seven and a half years.
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What will happen at those reviews? Have the Government burned their bridges in terms of other options, so that if the infracos want substantially higher prices there will he no option but to pay them?
A process of perverse output accounting is taking place, although I am in favour of a degree of output accounting. In July, I asked a parliamentary question about London Underground's private finance initiative contracts. Following my hon. Friend the Minister's response—about more than £1 billion of investment in facilities such as the British transport police station at West Ham and better ticketing services—there was a footnote:
"The investment value is not the actual amount the private sector is investing in London Transport. Instead it is London Transport's estimate of what investment in PFI projects would have cost had they done the investment themselves."—[Official Report, 13 July 2001; Vol. 371, c. 655W.]
That is not the same thing as the actual amount that the private sector is investing. That form of accounting has serious implications, because it disguises the actual level of private sector investment and is, potentially, a fraud on the public. If it were applied to the PPP, the rate of return could end up being paid on money that was not actually invested. That is unacceptable. Will the public be given a clear understanding of what the private sector actually invests, and will there be proper accounts?
It is right to mention the Jubilee line extension at this point. The Chancellor described the £2 billion cost overrun on that project as a mistake that must not be repeated. LUL, which was presumably responsible for the extension and the cost overrun, has been put in charge of the current contract negotiations without any assistance from the Government or any other outside expertise. If the Government are saying that it was to blame for the Jubilee line cost overrun, it is strange to give it the chance to make similar mistakes.
Mr. Gardiner: It strikes me as odd, given that my hon. Friend agrees that LUL was poor in its performance in negotiating the contract for the Jubilee line extension and criticises the fact that it has been put in charge of negotiations on this occasion, that he should now want it to run the whole system.
Harry Cohen: I do not. The Minister outlined LUL's position on the Jubilee line overrun and said that it was not attributable to quality estimating. He said that significant risks and programme changes, such as those occurring as a result of the collapse of a tunnel—the project was using a new Austrian tunnelling method—at the concurrent Heathrow Express project, were the major contributors to the cost overruns.
If something similar happened again—a collapse of a tunnel, for example, with big implications for the infrastructure of the underground—I do not believe that the contractors, the infrastructure companies, would take the risk. That was a major tunnelling collapse, which had international implications. If that happened again, would the contractors of similar projects take risks? I do not believe it.
We need to see what is in the contracts. Will they mention risks specifically, or only generally? In that case, companies might accept liability, or they might not. Will there be absolute, unlimited requirements in

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the contracts, and can the public see them? Bob Kiley said that the risks will not be transferred wholesale, and that contracts will not cover risks concerning track, tunnels and signals. What if the water table rises, which in London it could, and causes damage? That would probably not be covered either. What will the contracts say about the potential cost of risks? Are there going to be fixed prices, or will the infrastructure companies simply be able to raise their prices should the risk materialise?
The Observer on 4 March mentioned the likelihood of "constant contractual disputes". London Underground had not even completed an inventory of the assets that it was going to pass over, implying a weak position for post-contract negotiations. Is the Minister satisfied that the contract will be absolutely watertight this time?
On safety, the international engineering consultant Parsons Brinckerhoff has produced a report on safety standards. Its findings included:
"We conclude…that LUL's Standards, in their current form, are inappropriate and inadequate to serve as an effective management control mechanism to protect the public interest in performance-based PPP contracts with privately owned Infracos."
It added that "Subject Committees" would be present
"to oversee changes to the mandatory Category 1 standards. However, all other standards will be…susceptible to change by the Infracos",
and, effectively, will be "self-regulating." The infracos can change them themselves.
The report, referring to disputes about standards, says that each standard
"could potentially become the basis of a PPP variation order, with consequent demands by the Infracos for increased compensation, risk mitigation, and relief from the PPP performance regime…As the contract allows the Infracos a degree of self-regulation, the Standards Regime could soon fall into disrepute and become unmanageable as a contractual oversight mechanism."
A further point is:
"The three different Infracos are under no obligation to cooperate and LUL could end up with three different sets of Category 2 standards controlling working methods."
That is a pretty damning verdict, as it states how difficult it will be for that management tool to ensure proper safety.
The railway inspectorate's report was due to be published in March, and then in July; it has since been put off again. The inspectorate made a statement saying that London Underground and new companies would have to jump a significant hurdle before a final version of the safety case could be accepted. I understand that the inspectorate has written its report, but it seems to have been suppressed and delayed. Can the Minister tell us where it is and when we are going to see it?
On PPP contracts, my right hon. Friend the Secretary of State told a group of London Labour Members that he would take independent advice—it would be
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interesting to know who will give that advice—on the outcome of the London Underground infrastructure company negotiations. He would then make his decision, for which he would be held accountable, and then release whatever documentation he could. That sounds reasonable, but it is not.
Tom Brake: Does the hon. Gentleman consider that advice from PricewaterhouseCoopers would be independent if that was where the advice was sought?
Harry Cohen: I would not want to cast a slur on PricewaterhouseCoopers and I do not know who will be chosen, but the Government should announce who it is to be. If the hon. Gentleman has a point to make about PricewaterhouseCoopers, he can make it during his speech and I will listen with interest.
The matter is complex and all aspects should be in the public domain before contracts are signed and irrevocable commitments are made. When the contracts have been signed, it will be too late for proper prior scrutiny, and Parliament will have been treated as a rubber stamp. Londoners want to know all the implications and to be satisfied that value for money will be achieved; they want to know that much-needed investment will not be wasted. There is already talk of station shopping malls taking priority over tracks and signalling. We must see the details before they are agreed to. The Select Committee on Transport recommended publication of the contracts before the decision was made.
In July, the Minister told me in reply to a written question:
"I understand that London Underground intends to publish the contracts once negotiations have been completed and will make available information on performance."—[Official Report, 18 July 2001; Vol. 371, c. 195W.]
Does that mean that contracts will be published before they are signed and agreed to by the Secretary of State? Perhaps the Minister will clarify what he said in his answer to me.
Unified management is much needed. A briefing to Labour Members in July stated:
"There will be no privatisation of the Tube. London Underground must always own and run the Tube. Nobody wants to repeat the mistakes of rail privatisation. There is a defined role for the private sector in making the investment happen. But the public sector must always be in charge."
I welcomed those comments, but there will be a split—it will not be the same as that with Railtrack—under the PPP between the operation of services and maintenance. Also, the tube will not be under public control between 1 am and 5 am when it is handed over to the infrastructure companies. There is a danger that the infracos will drive policy in their own interests, swallow cash and insist on priorities that may not be the same as

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London Underground's priorities. They may be able to ignore the Mayor and Londoners' wishes. What relationship will the companies have with Transport for London and the Mayor? When will London Underground become part of Transport for London? At the recent meeting with London Underground, doubts were raised about who is to run the business for the public sector. It was suggested that the business may be leaderless. When will the necessary appointments be made?
The Minister has been helpful and has given me some good and open answers, but many unanswered questions and too much uncertainty remains. That is deeply destabilising. There is great potential for the matter to go wrong with spectacular cost for years to come. Sir Cameron Mackintosh stated in the Evening Standard on 3 September that
"The Underground has taken over from the Dome as the nation's fiasco."
I do not believe that, but we do not want the matter to reach that stage, and serious concerns exist. For example, the TUC stated:
"PPP is deeply flawed and it cannot deliver the safe, affordable and quality tube system that all those who live, work and travel in London deserve.… We call on the Government not to close off dialogue but to urgently discuss the way ahead with the Mayor's Transport Commissioner, trade unions and other key partners."
The executive group of London Labour Members stated:
"We regret the Government's announcement … to impose the modified public private partnership for the tube.
While supporting the role of the private sector in construction works, and welcoming the £13 billion investment which will follow, we believe that Londoners must be satisfied that Bob Kiley's concerns over safety have been met. We recognise that the Government has attempted to meet these concerns, but we believe the proposals remain flawed.
We therefore urge both sides to re-open negotiations immediately in order to resolve the outstanding issues of safety and maintenance."
In his article in Tribune on 13 July, Ian Aitken said:
"The reality behind the whole controversy is that there would be no question of pursuing anything so bizarre as the Government's Heath Robinson scheme for the Tube if it were not for Gordon Brown's unhealthy obsession with the Treasury's rules for public borrowing. These rules assert, quite arbitrarily, that borrowing by public institutions like the nationalised industries counts toward the dreaded public sector borrowing requirement, and is therefore a bad thing. Borrowing by private institutions, on the other hand, does not, even if the money is raised from exactly the same lenders. It is therefore a good thing.
This is frankly bonkers."
Mr. John Wilkinson: Why have Her Majesty's Government gone against the evidence not just of the London transport commissioner, but of the Select Committee, Labour Members, the TUC and others; particularly in light of the Railtrack fiasco, which showed that providing public money to a private operator did not provide a solution? How will the PPP proposal for the underground differ?
Harry Cohen: There are significant differences between the London Underground PPP and the Railtrack one, but it falls to the Minister to respond to the general thrust of the hon. Gentleman's point.
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In his letter to me of 6 July, Bob Kiley said:
"My negotiations … concluded that the current procurement could not be structured to guarantee that new trains would be delivered, that stated investment programs would be carried out, or that maintenance would proceed under standards acceptable to LUL. The only solution was for the bidders to provide LUL with control of core management functions. The bidders could not accept this, leaving no solution within the PPP structure.
The way forward … is to drop the current procurement and take up a safer, quicker and more economic system, bringing massive private-sector participation to clearly defined projects. We can bring new trains and fully repaired tracks to London years ahead of the timescale currently envisaged by PPP. It is a shame that so much time and money has been expended to date on the fruitless negotiations around PPP rather than in progressing a detailed investment programme."
I urge greater Government flexibility. Private sector involvement and finance is acceptable, but must be under the full control of the public sector. London Underground is a public service, not a profit-making conduit. The proposed version of the PPP seems to contain many flaws. The Mayor will eventually have to take over responsibility for the tube. He was elected to do so. It makes no sense—including from a Labour party-political perspective—to tie his hands behind his back. We should be at ease with local democracy on matters such as the running of the tube. Even at this late stage, I urge a radical rethink.
11.38 am
Mr. John Wilkinson: We are all most grateful to the hon. Member for Leyton and Wanstead (Harry Cohen) for, above all, his honesty, his candour and his willingness to face unpleasant realities. One such unpleasant reality has been demonstrated today, as the Jubilee line is closed from Waterloo northbound to Finchley Road. My constituents face such impediments daily. The frustrations of Londoners are legion, and hardly anything creates more frustration than the Government's total failure to modernise the underground system.
The Mayor's transport strategy put the alleviation of traffic congestion, especially in inner London, at the top of his list of priorities, and we are to have road-user charges, with all the pain and grief that they will impose. If he and the Government were to put the modernisation of the underground at the top of the list, Londoners and London's businesses would be most grateful. I appreciate everything that the hon. Gentleman said. The division of responsibilities, which is inherent in the operating companies and London Underground under the PPP model, is fatally, fundamentally and totally flawed. There has to be a clear chain of command from those who operate the service to those who have management responsibilities to those at a political level within the GLA who have the responsibility of laying down policy. If t hat model is pursued, the modernisation of the London underground is possible.
It is not necessarily a question of private sector involvement. What is necessary is effective political leadership from the Mayoralty, and support for the Mayoralty from Her Majesty's Government, instead of the consistent effort of Her Majesty's Government to undermine the Mayoralty for party-political reasons and out of sheer spite. The Government should have the magnanimity to acknowledge that the Mayor may be correct in choosing a professional to be transport

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commissioner for London—most Londoners believe that he is correct in that judgment—and that the transport commissioner for London requires and deserves the support, at the very least, of Her Majesty's Government.
The Department for Transport, Local Government and the Regions seems to be more interested in looking into "Old Moore's Almanac" than listening to the voice of Londoners as expressed through the GLA and the Mayor. I am pleased that my party in its manifesto made it clear that it was unacceptable for the Government to maintain the division that they propose between the operating companies and London Underground.
I want to concentrate on the need for investment in the system, which the hon. Gentleman mentioned at the beginning of his speech, and to identify areas of investment that would benefit my constituents in northwest London and help the regeneration of London's economy by improving the transport system within the capital. Setting in place appropriate underground links to the fifth terminal at Heathrow should be at the top of the list.
The downturn in air transport is a temporary, understandable and tragic phenomenon, the causes of which we all understand. Civil air transport and its support is a matter of critical importance for the capital's economy. The fifth terminal at Heathrow must be built, and a Piccadilly line extension constructed. The Heathrow Express line must be extended also and, most important of all, Crossrail should get the go-ahead. The initiation of the Crossrail project from Reading and Heathrow out to the north-east and to Stansted, and down from Aylesbury, through Paddington and out of Stratford, would do more than almost any other project to revitalise public transport in London and free up the capital from the congestion that bedevils it today. That should be a priority for Her Majesty's Government, using public money. The City of London has said that it is possible for private finance to be obtained, which may be the case. However, London Underground should take the lead in supporting the Crossrail project.
There are also minor projects of particular importance to the west London economy. The Croxley link would extend the Metropolitan line beyond Northwood in my constituency up to Watford junction. At present, it is impossible for passengers coming from north-west London on the tube to go beyond the end of the tube at Watford. They then face a long journey on foot, by public transport or by taxi, to get to Watford junction and the railway network to the north-west and beyond. A small stretch of track is required, but the amelioration of transport problems in north-west London would be remarkable.
Likewise, it is necessary for a much better rail connection to be put in place between north-west London and Heathrow. A first step would be an extension of the tube from Ruislip Gardens on the Central line to Uxbridge and, I hope, beyond Uxbridge down to Heathrow. That, too, would be invaluable.
To set the proposals in perspective, the Government are minded to spend hundreds of millions of pounds to extend the channel link, under its second phase, eventually as far as St. Pancras. The current link to Waterloo may be slow, but it serves a part of London that is an equally important catchment area from the
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point of view of passengers. Now that the Jubilee line goes from north-west London all the way to Waterloo, there is no great problem for passengers in north and north-west London to reach Waterloo, the terminus. The money that is to be allocated to the second stage of the channel tunnel link would be much better spent on Crossrail and the improvements that I outlined. Again I thank the hon. Member for Leyton and Wanstead for his candour and for the service that he has done the House in obtaining this morning's debate.
Mr. Frank Cook (in the Chair): Order. I remind the House that in this slot on a Wednesday morning, we aim to start the winding-up speeches at 12 noon. I hope that those hon. Members seeking to catch my eye will bear that in mind.
11.46 am
Sir Sydney Chapman: congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on introducing this important debate for Londoners this morning. I welcome the new Minister and hope that he enjoys his poisoned chalice. I have particular affection for him because, as he will recall, we used to pair in what I now regard as the good old parliamentary days when the pairing system worked.
More than two thirds of Londoners now say that they receive poor value for money in using the London Underground. More than half the people who use the underground say that they receive a poor and unacceptable level of service. There is overcrowding and congestion, too many trains are terminated early and there are too many delays and breakdowns. As a London Member of Parliament, I have never received so many complaints as I have about London Transport, and London Underground in particular, over the past two years.
My constituency is at the end of the Northern line, which has been dubbed the misery line; although, in fairness, it now has new rolling stock that was ordered and built before 1997. Several of my constituents live near the end of the Piccadilly line, where the problem of the early termination of services at Arnos Grove, instead of Cockfosters, is especially prevalent.
The modernisation of London Underground requires a large and rapid investment, as we all know. However, sadly, that is the exact opposite of what is happening at the moment, as the front-page report in today's edition of The Guardian, to which the hon. Member for Leyton and Wanstead referred, spells out.
Despite what the Secretary of State said in the summer, Government support for London Underground has not substantially increased. According to The Guardian report, investment has been cut by 30 per cent. The Secretary of State claims the doubling of the grant, to £520 million, this year. I make two points. First, last year's investment by the Government of £267 million was a rock-bottom low, so it was a pretty low base from which to start. Secondly, I calculate that London Underground will be lucky if it receives only £400 million of that £520 million.
The Government have wasted the past four years and failed to deal with the urgent issues facing London Underground, which must either remain in the public

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sector or be run by the private sector. Public-private partnership will achieve the worst of both worlds. The body that owns the assets must run the operations; the recent history of the running of public transport has taught us that lesson. Someone has to be held to account, but poor performance by the public part of the industry will be blamed on the private sector, and vice versa.
Complete privatisation would work if it was backed up by a good and unambiguous contract, but Londoners have made their choice. Parliament has established a Mayor, a new Greater London Authority, and Transport for London to run London Underground. My party accepts that. However, if I correctly judge the feelings of my constituents—which I think I do—they do not much care whether London Underground is in the public or the private sector. They want a safe, reliable and clean service with fares that are good value for money.
The Government must sort out their problems by joining up their policy with regard to public transport in London and by getting on with the job of providing a decent service to Londoners.
11.51 am
Mr. Mark Field: I endorse the comments of my hon. Friend the Member for Chipping Barnet (Sir S. Chapman).
The subject under discussion is a Treasury-related matter, and I have some sympathy for the Minister. I am also aware that there are many bodies and individuals in place—such as the Mayor, Mr. Kiley and the Greater London Authority—which means that hon. Members are yet another layer of politicians involved in dealing with the problem; perhaps we interfere with it more than we help. However, our voices must be heard. My constituency contains the largest number of tube stations, most of which are stations of destination rather than departure.
Fundamental issues are at stake. Before 1 May 1997, the tube was not in a fantastic state, and it is important that my party acknowledges that. However, matters have only got worse since then. It appears that there is no strategy. In the Government's first term, the Deputy Prime Minister was the Secretary of State with responsibility for Transport. He constantly said that he wanted an integrated transport policy but did not do much about achieving it. The present Secretary of State lacks any credibility. An article in today's edition of The Guardian suggested that there was a cancer of cynicism in his Department; it will be difficult to cure, and I was concerned to read about the misleading statements that have been made.
London's infrastructure is falling apart; that is true with regard to not only the tube but the health and education services. A fundamental rethink is required and I hope that the debate can help to identify the problems. However, it is now up to the Treasury and the Department for Transport, Local Government and the Regions to try to make a difference.
I am particularly concerned about the matter because London—by which I mean my constituency and the other 74 London-related constituencies—earns much of
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the nation's wealth. However, despite the massive amount of wealth that London brings into the country, Londoners have to live with third world infrastructure, and there is no real strategy to improve it. The situation that Londoners have to put up with is unacceptable, especially when one considers the amount of money that is being pumped into other devolved regions, particularly Scotland. It is high time that the Chancellor—who, of course, does not represent his constituents in this place on many of these infrastructure-related matters—was made aware of that, because it is entirely unacceptable. There will be a massive political backlash—particularly because 55 out of the 74 London Members of Parliament are on the Government Benches—as this fact continues to be exposed.
I am also concerned about Crossrail, and I agree with the remarks of the hon. Member for Leyton and Wanstead (Harry C, then). It is important that that is introduced; again, the Conservative Government put a stop to the proposals that were made in 1992–93. One of my greatest concerns is that any sign of an economic downturn in London will take the edge off demand for the transport infrastructure. The reductions may be only marginal—a 5 or 10 per cent. fall in numbers—but that might give the impression that things are not as bad as they have been in the past two or three years. That might be used as an excuse—the Treasury is considering paring off a lot of its financial commitments—for putting things on the backburner. That is particularly likely in the case of Crossrail, but it could also happen with some of the necessary investment in London Underground.
I appreciate that much of the matter is in the hands of Mr. Livingstone and Mr. Kiley, but the plans for a congestion charge, which affect my constituency more than virtually any other in the country, were predicated on the idea that there would be a demonstrable improvement in public transport. Since Mr. Livingstone's election, he has made it quite clear that the underground requires a decade or more of investment before such improvement can be achieved. He is absolutely right to identify that as the time frame. There will be no quick fix on the underground and it requires long-term investment. That investment must start now, because things are likely to get worse before they get better. If we do not have a strategy in place, things will go from bad to worse.
All of the emphasis is now on bus transport. This may be the only instance of the integrated policy to which the late, lamented Secretary of State for the Department of the Environment, Transport and the Regions—the Deputy Prime Minister—referred. We cannot simply rely on buses. We can introduce bus lanes and improve bus services, but the idea that that can happen before January 2003, which—although I expect it to change—is still the expected start date for the congestion charge, will not prove realistic.
Bob Kiley was brought over from New York at great expense. Clearly, he has experience in this area, notwithstanding the rubbishing that one or two Government Ministers and advisers have tried to give him. He must be given the tools to do the job. I like to think that I speak on behalf of all 13 of the Conservative London Members of Parliament in saying that.

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The whole issue of PPP and PFI-related projects is up in the air after the fiasco of Railtrack. I do not think that City financial institutions, other investors or even the employees of any of those future companies will feel that this is a sensible way forward. As a result, we must look to the Treasury to make a firm, and long overdue, commitment to the investment that is required. It has been required for more than a decade, although my party would obviously have to accept some responsibility for that.
The crying shame is that we have wasted four and a half years. Nothing has been achieved. There has been parroting of various slogans, but no real strategy has been put in place. This has been an interesting debate. London Members of Parliament should, in a sense, get off the stage, because we need to get the core decisions made in Government and then give Mr. Livingstone and Mr. Kiley the opportunity to get on and do the job.
11.59 am
Tom Brake: I welcome the opportunity to have this topical debate and, like other Members, I feel very sorry for the Minister. I understand why he has such a grim and determined expression on his face.
It is worth recapping what has happened in the past four years under London Underground and Government management. The hon. Member for Leyton and Wanstead (Mr. Cohen) quoted from parliamentary answers that I obtained, which reveal a significant deterioration in services. Statistics reveal the extent of train delays of 15 minutes or more. Several lines have experienced significant increases in such delays over recent years. Significant increases in the length of time that people have to wait in queues for tickets are also occurring. Under the present management and the present Government, services are definitely deteriorating.
London Underground has spent £300,000 of our money on an advertising campaign. "Publicly run, privately built" was its slogan, which sounded suspiciously like a Labour party slogan to me. That campaign has now stopped and, "The quickest line to improvement" is its latest slogan. The advertising shows a pound sign at the end of the tunnel; precisely what the consortia will be interested in.
In response to the front page of today's edition of The Guardian, will the Minister place in the Library all correspondence between his Department and London Underground on the 2001–02 budget? Members can then judge for themselves whether the figure was nothing more than a bargaining ploy by the Government or a firm figure on which the Government have subsequently reneged. Will the Minister also confirm what safety imperatives will be cancelled or delayed as a result of the £30 million cut in the safety budget mentioned in The Guardian article?
What has been the Government's approach? They resorted to smear tactics in attacking Bob Kiley and we have received no apology from any Government spin doctor for that attack. Presumably the same Government spin doctors are currently spinning against London Underground because it made public its concerns about the proposed cut. It takes a peculiar spin on the Government's part to fall out both with Transport for London and with their own appointees, London Underground.
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Some dubious claims have been made about the value for money of PPP. The Deputy Prime Minister stated in December 1999:
"PPP is the right choice. It would save £4.5 billion".—[Official Report, 8 December 1999; Vol. 340, c. 847.]
The Minister for London spoke about
"generating massive efficiencies in the tube investment programme over 15 years."—[Official Report, 8 December 1999; Vol. 340, c. 930.]
However, we know from the report of the highly reputable Deloitte & Touche—a report that the Government tried but failed to suppress—that no value for money could be demonstrated in the first seven and a half years of the contract.
Does the Minister still anticipate a saving in the order of £4.5 billion, or anything remotely close to it? Following the Railtrack debacle, is he confident that £3 billion of private sector efficiencies can be achieved? Does he believe that PPP will generate the supposedly massive efficiency savings in the tube investment programme? Do the terms of the PPP contracts include specific figures on how little money winning bidders have to invest in London Underground? A proper amount should be stipulated as a minimum requirement for delivery.
A crucial issue is who will validate whether PPP represents value for money. At the Labour party conference, the Transport Secretary said that he would take his own independent advice. That is why I intervened on the hon. Member for Leyton and Wanstead to ask whether he thought that PricewaterhouseCoopers would be independent. That company has been adjusting the public sector comparator and making the bond issue look much worse than I, and others, think it is. One must question whether it is capable of giving independent, impartial advice to Ministers on whether public-private partnership represents value for money. Will the Minister confirm whether PricewaterhouseCoopers will be the independent advise?
There is so much uncertainty about whether PPP represents value for money that it is necessary, as other hon. Members have said, for bodies that are clearly independent of the Government, London Underground and PricewaterhouseCoopers to examine the question. It is for that reason that my hon. Friend the Member for Newbury (Mr. Rendel) will later today present a letter on our behalf to the new Chairman of the Public Accounts Committee, who is due to be elected today. The letter will ask the PAC to examine the issue as a matter of urgency and to put pressure on the National Audit Office to consider PPP before, rather than after, contracts are signed. It will be no consolation to Londoners if, as the Transport Secretary said,
"I will be held accountable for the decision and I will make it public and people can criticise me if they feel I have made the wrong decision."
That's all right, then. If PPP fails and the NAO finds that it does not represent value for money, we can all criticise the Transport Secretary. However, we would still have to live with PPP for the next 30 years.
There is one final reason why PPP should be stopped in its tracks. Many hon. Members have referred to it; Railtrack. The Transport Secretary said on Monday:

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"It was a company in crisis and came to the Government with a begging bowl month after month. It begged for taxpayers' money while handing out dividends to shareholders."
He also said:
"the Government are not here to fund the shareholders of private companies."‑[Official Report, 15 October 2001; Vol. 372, c. 959.]
I can envisage a situation a few years hence—as I am sure can other hon. Members—in which the Transport Secretary's successor comes to the House to say similar things about the PPP project.
Finally, I ask the Minister to convey to the Secretary of State the following message. He had the courage to pull the plug on Railtrack. Will he now take decisive action against the Chancellor's pet project, PPP, and put it out of its misery?
12.7 pm
Mr. Eric Pickles: I congratulate the hon. Member for Leyton and Wanstead (Harry Cohen) on what has been a timely and fortuitous debate on London Underground. He and several Members referred to Crossrail, and I should declare an interest. Crossrail will start about 300 yards from my bedroom window and, if it proves to be noisy, hon. Members should be sure that I will regularly report that back to them.
My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) was right to talk about the need for a clear line of command for safety and investment. He was also right to point out that Mr. Kiley deserves our support. My hon. Friend the Member for Chipping Barnet (Sir S. Chapman) spoke about the deteriorating reliability of the underground and about particular problems on the Northern and Piccadilly lines, and I support his comments.
My hon. Friend the Member for Cities of London and Westminster (Mr. Field) said that the network was not in a particularly good state when the Government came to power, at which point I saw the Minister scribbling away. However, he should remember that since the war, the only bumper time for the London underground was in the first two years of Mr. Major's Government. The facts speak for themselves. However, that level of public investment was unsustainable and there has been a gradual downturn in investment since then. Most of the London underground is 150 years old. More worryingly, we should also realise that no one has a real idea of the state of the tunnels on the underground, a fact that Mr. Kiley candidly volunteered to me in a meeting a couple of weeks ago.
Capacity on the underground is severely limited. There is much talk about shifts from the road to the underground, but there is virtually no capacity for significant increase. My hon. Friend the Member for Cities of London and Westminster rightly talked about a possible world recession, but this is none the less an ideal time to press ahead with improvements in the rail network and the underground. That might give us a few valuable years of breathing space to get those projects under way before there is an inevitable increase in capacity.
The hon. Member for Carshalton and Wallington (Tom Brake) talked about the new displays on the underground that show a pound at the end of the tunnel,
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representing valuable investment money floating away from the underground. They demonstrate more honesty than the spin doctors.
Thanks to The Guardian, we now know that despite the Government's promises a few weeks ago—they trumpeted a vast increase in the money available for the underground—their so-called increase actually represents a 30 per cent. decrease. I find myself in a position that I would not have believed any Conservative spokesman would be in; I am almost tempted to table an early-day motion demanding the return of the Deputy Prime Minister to his former transport role.
Mr. Field: It is not that bad.
Mr. Pickles: I think it is. Messages should be sent to Ukraine, where I understand the Deputy Prime Minister is in negotiations—
Mr. Field: For political asylum?
Mr. Pickles: I am sure that it is not for that. The Deputy Prime Minister should return immediately because he had the clout. We know from talking to London Underground officials that firm promises were made for £775 million of investment. They were shocked to find that a press release from the present Secretary of State claimed that they would receive considerably less—30 per cent.—and that that sum was heralded as some kind of triumph. The cut means a £30 million cut in safety improvement, a £16 million cut in the maintenance of lifts and escalators, a £72 million cut in the upkeep of stations and a £34 million cut in infrastructure. The backlog of repairs and maintenance now stands at the princely sum of £1.2 billion. There is a paradox in that because the amount of money put aside to set up the PPP—perhaps the Minister would give us the exact figure; we are certainly talking about hundreds of millions of pounds—would otherwise be available for improvements.
We need a clear grasp of how important the underground is in terms of moving passengers about. The City of London has a 92 per cent. commuter intake, larger than any other city in the world. The underground carries 3 million passengers a day, roughly the equivalent of the railway network for the whole of the United Kingdom. However, it is old and outmoded. As the hon. Member for Carshalton and Wallington said, the number of signals passed at danger increases as funding for the rail network decreases. Punctuality is decreasing. There s a suggestion—I hope that the Minister will refute it—that we are seeing before and after shots; that the Government are following a deliberate policy of running down investment in the underground to show clearly some great benefit after PPP comes in. If that were the case, it would be a scandal. The Minister is scowling, and I am sure that he will refute that argument.
It needs to be stated clearly that, even with PPP, the money generated by fares will not be sufficient to guarantee improvements to the infrastructure. It will not even be sufficient to deal with the basic safety

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requirements. The success of the underground will be determined by the level of state subsidy. That will play a significant part because of the way in which the PPP is structured; there is no getting away from it. The Government could do to the underground what they did to Railtrack; turn off the resources and make the company go bust. Those people who are thinking of investing in PPP will have the image of a Secretary of State deliberately destroying a company very much in their minds before they make that investment.
The hon. Member for Leyton and Wanstead was particularly courageous to refer, as did Opposition Members, to the regrettable and unfortunate incident involving the Secretary of State's spin doctor. The hon. Gentleman was quite right; she should go. The staged apology yesterday was ill-timed and ill-considered—particularly in its failure to address the families of those who died—and made matters considerably worse. My principal concern is not only that the disgusting e-mail was sent; what seems to be for gotten is that the Government acted on it. The various consultation documents that they later suggested should be put out were, indeed, put out.
Mr. Edward Davey: Is the hon. Gentleman not even more concerned about the way in which the director of communications at the Department was treated—we are told—by the Secretary of State himself?
Mr. Pickles: That relates directly to the underground. We must remember that the way in which Mr. Evans was dealt with was connected to the Parsons Brinckerhoff report about safety on the underground. Ms Moore saw a possibility that the report might be regarded as unfavourable and thought it appropriate to send out information about Mr. Kiley, an honoured and dedicated public servant. That should not surprise us. This is the woman who saw the destruction of the twin towers as a good way to get out bad news about councillors' pensions and who tried to deny and defer information on the safety of the railway's.
Mr. Wilkinson: My hon. Friend is making an important constitutional point. Has it not always been the tradition that Her Majesty's Ministers are answerable personally for the conduct of public servants in their Department? It is a preposterous notion that a public servant should appear on television to try to exculpate herself. The Secretary of State himself must take responsibility, and he ought to resign.
Mr. Pickles: Indeed. I have called for the Secretary of State to resign. He does not seem to realise the seriousness of the situation. The Opposition parties have stopped the normal criticism of Government to offer support in these difficult times. There is an obligation on the Government to keep their own house in order and to accept responsibility for that despicable e-mail. It certainly leaves us all with a bad taste in our mouths, which is not good as we move on to the next stage—trying to ensure that sufficient investment goes into London Underground. I am afraid that the Secretary of State has been looked upon, weighed in the balance and found wanting on this important issue.
12.20 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 Leyton and Wanstead (Mr. Cohen) on securing this important debate. A number of hon. Members have commiserated with me on my task. I can assure them that I am pleased to have this job and to respond to the debate. The hon. Member for Carshalton and Wallington (Tom Brake) said that I had a grim expression on my face. I can assure him that it was a happy expression; any grim expression may have been in anticipation of what he had to say.
I congratulate my hon. Friend on the sensible and courteous manner in which he conducted the debate and on his characteristically robust presentation. I also congratulate him on his perseverance, both in tabling questions to me and the Department and in writing to the Department. He has been a serious player. I congratulate him on the way in which he has robustly taken up matters on behalf of his constituents. That may not always be convenient or comfortable for the Government, but it is important that people do as he has done.
I agree with my hon. Friend right from the outset. He says that we want an underground system that gives value for money and accountability. We want something else, too. His constituents and those who use the tube—I use it regularly, both in my ministerial capacity and privately—want it to be safe, clean and reliable. That is what we will deliver. I hope that my praise for my hon. Friend has done less damage than his praise for me. I cannot cover all the points in the time available. However, as always, if there are points that he or others feel we have not covered sufficiently I shall be happy to deal with them in writing.
A number of hon. Members referred to one of the Department's press officers. My hon. Friend quite rightly said that she should be condemned. It was also right for her to apologise yesterday. This debate, however, and the ongoing debate, should be about the issues and not about the personalities. I intend to move on to the issues. Before I attempt to answer some of the points in the debate, it is important to set my response in context.
I welcome the debate today. London Underground is a vital national asset. The hon. Member for Brentwood and Ongar (Mr. Pickles) gave some of the figures. We need to get a clear grasp of the value of the underground, which carries 3 million passengers a day and is essential for the functioning of London as one of the great cities of the world. But for too long, London Underground has suffered from a lack of investment. It struggles to run a 21st century service with old and outdated equipment.
We recognised those problems when we first came to power. It was clear that to make the fundamental changes needed to secure the long-term future of the tube would take time. But the underground's needs were urgent. Some may have forgotten—those involved in trying to make the improvements to the tube need to remember—that the previous Government's spending plans would have seen investment fall to £160 million and beyond that to zero. We reversed those cuts.

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An additional £365 million of funding for London Underground was made available in March 1998. Another £517 million over two years was announced in July 1999. In our first term as a whole, the Government provided the underground with almost £1 billion more in grant than the Tories planned. It is important to get those figures on the record. We are providing another £520 million of grant this year, almost double the amount available last year. We will continue to provide the additional resources needed to keep the underground from getting worse and to make a start on the vital improvements needed.
Mr. Pickles: Does the Minister think that it was wrong that a senior London Underground manager told the Evening Standard that the Government were resorting to old-fashioned hypocrisy by announcing with a fanfare that they were doubling the money this year?
Mr. Jamieson: The old-fashioned hypocrisy may be coming from the Opposition, not the Government. I shall come to funding in a moment.
It is clear that even Government grant year on year could never be enough to achieve the faster, cleaner and more reliable service that the constituents of the hon. Member for Leyton and Wanstead want. We cannot build a better system by just throwing money at the problem, whether that money comes from taxpayers or from issuing bonds. The tube needs new life and a new structure to ensure that the money that we put in is well spent and delivers the service that we want.
It has been suggested that the Government are taking a dogmatic approach to the matter, but that is not the case. The tube modernisation plans are not the creation of an official hidden away in an obscure corner of the Treasury; they are the result of a huge amount of careful thought by expert advisers and, most important, by the people in London Underground, who really know how the tube works. They know the system inside out and know the real problems.
The Government ruled out privatisation at an early stage, contrary to some claims. We passionately believe in quality public services; it is often forgotten that we looked at all the options for the best way to modernise the tube. When the Deputy Prime Minister announced our approach, he published a document setting out the options we considered, including the use of bonds, a
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trust and a joint venture. The tube runs intensive services and the operation of the tube lines need to be coordinated, with signals, trains and stations managed together in real time. That is why we insisted on keeping all aspects of the tube operation firmly in the public sector.
It was necessary to change the management of the investment to upgrade the infrastructure and to avoid past problems of projects being late and over budget. My hon. Friend the Member for Leyton and Wanstead referred to the Jubilee line being over budget and out of control. We had to avoid such mistakes because we wanted to ensure that the money that went in would provide the service and give the value that passengers wanted. We needed a new solution to help to fix that infrastructure.
The underground needs a new way to manage investment, to ensure that improvements are carried out on time and, most important, on budget, and to ensure that essential maintenance work is not overlooked.
My hon. Friend mentioned the £2 billion overrun—as he called it—of the Jubilee line extension, which we do not want to be replicated in the future. I am glad that he asked a proper question about private profits from the infracos. Those companies will make a profit only if they deliver a punctual, quality service that provides value for money according to the contract negotiated with London Underground. If they do so, and meet the new high standards, they will be able to make a profit as private companies.
My hon. Friend the Member for Leyton and Wanstead asked about the railway inspectorate. A report is expected shortly, certainly before Christmas; we hope it will be next month. My hon. Friend asked whether the contracts would be in the public domain; we have put the criteria that we are using to draw up the contracts in the public domain, but my hon. Friend will appreciate that much of the commercially confidential material cannot be released. There have been comments from various sources about the £775 million; that was an expectation of London Underground, which said in its press release yesterday:
"It is not unusual for us to receive less than we ask for."
I have been allowed very little time to respond to the many important issues raised by today's debate. There are many matters that Members will want to take further. If they would care to indicate them in correspondence or otherwise, I should be happy to take them forward. This is an important debate about a matter of great substance. I am glad that we have had an opportunity to air some of the issues today.

Grantham Hospital
12.30 pm
Mr. Quentin Davies: I am grateful to both you and Mr. Speaker for giving me this debate, Mr. Winterton. It is an opportunity— [Interruption.]
Mr. Nicholas Winterton (in the Chair): Order. Will those leaving the Chamber please be quiet and leave quickly?
Mr. Davies: These new debates have provided an opportunity to bring to the attention of both the House and the Government a matter of the greatest concern to myself, my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg), my hon. Friend the Member for Newark (Patrick Mercer), who would be here but for his being away with a defence committee, and to all our constituents, including the mayor of Grantham.
The debate concerns the future of a general hospital, Grantham hospital, which has served the people of Grantham and its surrounding areas, including Newark, Sleaford and many villages, for generations. Until 1998, the hospital had a full range of services including paediatrics, gynaecology and obstetrics. With your knowledge of the health service, Mr. Winterton, you will be the first to agree that those are three important specialties in any general hospital.
The paediatric facility had been supplied for many years by a contract with the Queens medical centre in Nottingham. That worked perfectly well, providing a full range of paediatric services including neo-natal back-up to the obstetrics service. In the summer of 1998, Lincolnshire health authority decided to set up a new ambulatory paediatrics service in Lincolnshire. It announced to the Queens medical centre that in future all it would be required to deliver on its contract would be the neo-natal back-up for' emergency deliveries, which are, of course, exceedingly rare in the course of a year, requiring the immediate attention of a paediatrician. Lincolnshire health authority must have known that that would result in the Queens medical centre saying that it could no longer go on supplying paediatricians to be used once or twice a month. It was a ridiculous suggestion and the Queens medical centre was unable to renew the contract.
Lincolnshire health authority deliberately made no alternative provision. As a result, the viability of the obstetrics department was undermined, which provided the health authority with a wonderful excuse to withdraw gynaecology and obstetrics consultants from Grantham hospital. I use the word "excuse" advisedly. It was clear at the time that they knew the consequences of what they were doing. We found that out in the most dramatic fashion when, at a meeting of the health authority, which was supposedly going to take a decision on the future of the specialties in Grantham hospital, it was discovered that Lincolnshire health authority had already spent money on expanding the maternity facilities in Lincoln before the decision had been made. That was a clear breach of due process to which I drew attention at the time. Had we had the funds, we would certainly have pursued the matter
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under judicial review. What is more, the Government, who knew perfectly well what was going on, did not intervene, as they should have done, at this clear breach of due process. It is obvious that they were complicit in the manoeuvre whereby those vital specialists were removed from Grantham hospital. That caused great concern and agitation in Grantham and its surrounding towns and villages. In all, 100,000 people depended on the facilities in Grantham hospital.
Several proposals were made to save those services. I should like to pay tribute to Mr. Voght, one of the consultant gynaecologists and obstetricians in Grantham hospital, who produced several proposals under which it would have been possible for consultant gynaecologists and obstetricians to continue to operate in the hospital, but the Government rejected them all.
Of course, I immediately took the issue up with a series of Ministers. First, I contacted the then Secretary of State for Health, the right hon. Member for Holborn and St. Pancras (Mr. Dobson). I had meetings with him both privately and accompanied by my right hon. and learned Friend and by the then hon. Member for Newark. I took a deputation of local citizens, including many interested groups and local authority leaders of all three parties, to see the right hon. Member for Holborn and St. Pancras on 1 September 1998, when we received a promise that the royal colleges would be instructed to look at the matter and to make urgent proposals on the future of maternity services in Grantham hospital.
The right hon. Member for Holborn and St. Pancras was then replaced as Secretary of State by the right hon. Member for Darlington (Mr. Milburn), who continued to maintain that promise. I pursued him on several occasions—for example, in February and April 1999—and was always told that the report was about to appear. It never has, and it has now been revealed by the Minister for Public Health, who is not here today because she is on maternity leave, that the promise has been—to use her words, which I believe are in the new spin-doctor language—"overtaken by events". In other words, the promise has been breached.
From spring 1999, the right hon. Member for Darlington, who evidently had little taste for the issue and was perhaps deeply embarrassed by it, decided to pass the whole matter over to his deputy, the Minister for Public Health, who has displayed in her handling of the matter a lack of interest and commitment and a lackadaisical and disorganised approach to her work such as I have not previously witnessed in my dealings with Ministers in Governments of either party. On one occasion, she took a year to respond to one of my letters. I eventually received a grovelling written apology from the permanent secretary and chief executive of the national health service, Mr. Nigel Crisp, apologising for the behaviour of his Minister: a pretty extraordinary state of affairs. Her letter, which I am happy to make available to anyone who wishes it, is dated 16 May 2000. That gives a flavour of the way in which we have been treated by the Government.
Naturally, I continued to pursue the matter. I arranged a meeting with the Minister for Public Health on 1 March 2001, when I received her assurance that she would institute an inquiry into the future of maternity services in Grantham, apart and aside from any national investigations or inquiries relating to royal colleges about the future of maternity services in the national

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health service, because she accepted that the matter of Grantham was of sufficient urgency. I recorded that in a letter to her dated 9 April. I received no written confirmation from her of the promise or of any moves to set up the inquiry. My secretary and research assistant pursued her office and on 10 May received a promise that we would definitely hear something from her before the dissolution of Parliament. We did not. One may ask why the Government did not wish to give me a discouraging response on the eve of the election campaign, but I will leave that open to speculation.
I finally received a reply to my letter of 9 April on 20 September, which represented a considerable improvement in the hon. Lady's performance. The delay in her dealing with her correspondence has evidently come down from 12 months to six months, so I suppose that we should be grateful for that. The letter said that the original promise that I was given by the right hon. Member for Holborn and St. Pancras had been, to repeat her phrase, "overtaken by events" and that her own undertaking on 1 March no longer applied. The letter was full of gobbledegook saying that there would be all sorts of studies of all kinds of maternity and obstetric issues in the national health service and that over the long term the future of Grantham hospital would have to be considered in the light of those. I have no time to quote the letter, but I will make it available to the press and any other interested party. It makes depressing, but revealing, reading.
This is a history of avoidance and evasion of fundamental responsibility and of trying to fob off the people of Grantham. However, the really vital issue that we should be focusing on today is the actual consequence of removing those facilities from Grantham hospital.
I am afraid that the consequence has been what was predicted by myself and many others, including the general practitioners of Grantham to a man and to a woman, Mr. Voght and other doctors and specialists in Grantham hospital: a whole series of tragedies. We have lost lives. Babies have died. Children have died who quite evidently would not have done had the proper facilities, such as are usually expected to be present in a general hospital worthy of the name, still been in place.
The nearest obstetric, gynaecology and 24-hour paediatric facilities are now located in general hospitals all more than an hour away by road. One is on the other side of Nottingham, one on the other side of Lincoln and another on the other side of Boston. That is the position that we face. We now have a series of calls on the ambulance service to take emergency cases to those three hospitals. Imagine what it is like to have a haemorrhage and be on a bumpy road in an ambulance hoping to get to a general hospital in time.
It is always difficult to be certain in each individual case whether a fatality would have occurred had the facilities still been available in Grantham, but there are a number of cases in which there is little doubt. One is that of a poor little three-year-old called Tyler Foster. In March 2000 he was sent to three hospitals before he died. He was first admitted to Grantham, but because there was no paediatrician there he was shipped to Boston. Having gone 30 miles to the east he was then shipped 30 miles to the west, to Nottingham, where he
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died of meningitis. Usually, if that is diagnosed in time and treated with antibiotics, the prognosis is favourable. He was sent to three different departments in search of the paediatricians who should have been present in Grantham, and would have been before 1998.
Another case was that of Olivia Gonzales in October 2000. She was born with a blood incompatibility and rapidly developed jaundice. Again, the proper facilities were not there and she died from a condition the outcome of which, in the general medical view, is usually satisfactory as long as it is treated in time. By the time she got to Lincoln hospital, it was too late.
Just a week ago was the case of Georgia Adelle Sewards, which I will dwell on for a second, as it was so recent. I have been authorised by her grandmother to read from the tragic letter that I have received. It is dated 15 October 2001.
"Last Thursday, my daughter Keely had a stillborn baby after only being 22 weeks pregnant. She started bleeding on Monday and it took 4 doctors to see her before she was admitted to Lincoln Hospital where the baby was still born in the early hours of Thursday morning."
She had been taken from Grantham to Lincoln.
"Had Grantham been open I am sure that she would have been referred there straight away or if she hadn't, I would have took her there myself…No words can express the heartache this has caused the whole family. The lack of facilities at Grantham could have made a difference I feel sure. Surely no amount of money is worth the cost of human life, even one so young."
Mr. Douglas Hogg: Will my hon. Friend accept my congratulations on having secured this Adjournment debate? My constituents who live in Sleaford and in the adjoining villages around Grantham and Sleaford would endorse the criticisms and anxieties that he has expressed on behalf of his own constituents in Grantham.
Mr. Davies: I am grateful to my right hon. and learned Friend, who has spoken well this morning. His constituents and mine look to us, above anything else that we do in this House at the present time in national or even international politics, to try to ensure that those essential facilities are restored to Grantham hospital.
There have been fatalities. I asked for a public inquiry into the case of Olivia Gonzales, but of course, the Government have not given it to me. Perhaps they would be embarrassed about what it would reveal. Many others have demanded public inquiries into fatalities. Even in cases where people have survived, the situation that has be m revealed is utterly unacceptable. One poor lady—I have been unable to contact her, so do not have consent to use her name, but the Government know about the case—had a haemorrhage in Bracebridge Heath, in my right hon. and learned Friend's constituency, in an ambulance rushing to Lincoln county hospital. She survived, but she could easily have not.
I shall read another account, from The Journal of 22 October 1999, which is just one of many that have been published in that Grantham paper:
"A pregnant woman's life was saved at Grantham Hospital when an ambulance crew decided she would not survive a 30-mile blue light trip to Lincoln.
The unnamed woman was bleeding heavily when the ambulance heading for Lincoln County Hospital obstetrics unit turned round to go to Grantham accident and emergency.

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Following a life-saving operation last Wednesday, the woman was detained overnight and then transferred to Lincoln…
'A general surgeon agreed to perform a life-saving operation.'
Normally, any emergency operation on a pregnant woman would be carried out by a consultant gynaecologist and obstetrician."
We should pay tribute to that general surgeon, who was prepared to take the personal professional risk of intervening in a case that was beyond his specialty. Thank God he did—he saved somebody's life. However, he was put in that position by the decision to take away those consultants from Grantham hospital. Let no one be in any doubt about that.
I am authorised to quote from the following letter, which I received from a constituent of mine on 23 March:
"On 17 February this year, I gay,: birth to my third baby…Unfortunately, he was very poorly and grossly anaemic with a condition known as 'chronic foetal maternal transfusion'. So pale, cold and lifeless he could not support himself and would have collapsed without an immediate blood transfusion. Due to the lack of services at Grantham we had to be rushed to Lincoln county hospital. The journey to Lincoln was very stressful and upsetting—not to mention uncomfortable for a newly delivered mum. It was very bumpy in the ambulance for all of us. Also traumatic having the siren blue lights going with my new-born in such a lifeless state. More than once three of us had to hold the baby's incubator steady as it was jolted about inside the speeding vehicle."
If that is not a graphic description of the situation in Grantham hospital, I do not know what is. I am authorised to mention the name of the lady concerned—it is Jayne Saunders.
I think that I have said enough to give a sense of the dramatic importance of this issue to the lives of people in Grantham now, and to the birth of future generations. Everyone in Grantham who expects to have a child at some time is extremely concerned about the absence of proper facilities. Every woman can legitimately be worried about the absence of gynaecological consultants. All manner of complications can emerge through the use of general surgery and accident and emergency facilities that have no gynaecological specialists or paediatricians. Women and children account for more than half the human race. How can a general hospital that is deprived of those essential facilities be called a general hospital?
This appalling situation has been made even worse by the Government's history of prevarication, equivocation and simple delay in even addressing the matter. They have tried every possible bureaucratic subterfuge to get rid of me, delay matters, find excuses and evade their responsibility. That cannot go on, which is why I have initiated today's debate. The Government must decide now whether they are going to bring back those consultants to Grantham hospital, or take the terrible responsibility for the consequences of not doing so.
12.48 pm
The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): I, too, congratulate the hon. Member for Grantham and Stamford (Mr. Davies) on securing today's extremely important debate on the future of Grantham and District hospital. My ministerial colleagues and I are aware of local concerns
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about the current and future level of services provided by the hospital. We are all aware of the passion and commitment of the hon. Gentleman and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) on their constituents' behalf. It is clear that these issues are of great concern to the entire community, and I understand how strongly the hon. Gentleman feels about the level of health services for his constituents.
Changes to those services have been the subject of considerable debate for a long time. The initial changes were introduced for reasons of clinical safety, and I intend to talk about them in a little more detail in order to set the future context for some of them.
Mr. Davies: The Government have made that contention—falsely—before. Before she falls into a trap of her own bureaucrats' making, I should tell the hon. Lady that there were no complaints whatever about the viability of services in Grantham hospital as they existed until summer 1998. There were no complaints from the royal colleges; nor did anyone else suggest that it was unsafe to continue with the existing structure. A decision was taken to change the structure and remove the consultants, and our problems derived from that.
Ms Blears: I understand that that is the hon. Gentleman's view of the situation. Rather than fall into a bureaucratic trap, I assure him that I am familiar with similar circumstances relating to accreditation, training, throughput and volume, the views of the royal colleges about those issues and how often they conflict with the perceived needs of communities. I understand the difficulties of drawing balances. Those are difficult issues for communities. Governments and clinicians to resolve.
As the hon. Gentleman stated, he has pursued this matter for a long time. I am aware that he had a meeting with the former Secretary of State, my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), who said that the Grantham area needed a substantial hospital to meet the needs of local people and take advantage of technology changes and new services developing that may make it easier to provide higher quality services in future. That commitment existed then and exists now. There is no threat to the future of Grantham hospital as a district general hospital in that community.
The hon. Gentleman outlined the issue in depth and detail, and his intimate knowledge of it enables him to take us quickly through the history of the services. It is a long and complex history and, sadly for many people, the hospital will always be associated with the terrible events of the early 1990s relating to Beverly Allitt and the consequent review of paediatric services. At that time, a number of clinical concerns were expressed about the safety of paediatric services at the hospital—limited scope for clinical experience; low work load; professional isolation; and limited capacity to deal with complex problems. It is not true to say that those matters came out of thin air, they happened as a result of concerns about paediatric quality following the dreadful events related to Beverly Allitt.
Mr. Davies: This is getting worse. The hon. Lady is taking refuge in complete irrelevance. I already

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mentioned that the Beverly Allitt case resulted in a contract being placed with Queens medical centre to provide paediatric care and facilities. That worked extremely well and satisfactorily, there was no problem and the royal colleges were happy with it. The Government, or the health authority on the Government's instruction, pulled the rug from under that structure. Returning to what happened in the 1960s and 1970s is irrelevant. In the limited time that we have, we must focus on the central issue: will the Government bring back those consultants or not?
Ms Blears: It is important to explain that it was not a matter in which, in the hon. Gentleman's words, the Government were "complicit in the manoeuvre." The proposals arose from a set of circumstances that raised genuine clinical concerns about safety. After the service had been taken over by the Queens medical centre, concerns surfaced again about low volume and throughput that had significant implications for medical training and the safety of those services. The paediatric service was withdrawn in August 1998 and at that time the community health council did not object, so it was not a matter placed before Ministers. The ambulatory service was developed and the local community health council gave its full support to that model; there was therefore no need for any further decision to be made.
Those changes to paediatrics raised concerns about the sustainability of clinically safe obstetric and gynaecology services and it was considered that, without a 24-hour consultant-led paediatric service, the delivery of high-risk babies would be clinically unsafe. That was made clear in the original consultation on the changes in paediatrics.
In respect of the proposals on obstetrics and gynaecology, the community health council objected to them and there remains an outstanding reference to Ministers about the objection, which needs to be formally decided upon. A midwife delivery unit was then established that has now been formally evaluated by the NHS office and Nottingham university. It is important to reassure local women that delivery results at the midwife unit are extremely satisfactory: some 91 per cent. of people are satisfied with the service. There is no evidence of increased mortality at the midwife-led unit. It is important to have that on record because local people and their families would be concerned at the prospect of lower clinical standards. Standards in the midwifery unit are satisfactory and clinicians who thought that standards might deteriorate have publicly acknowledged that that is not so.
My ministerial colleagues have established a review to consider whether the midwifery unit can begin to expand its activities geographically and in terms of the sort of pregnant women it can take under its auspices. The unit has been recognised as doing excellent work and may be able to do more work for local people.
It is important to respond to the hon. Gentleman's point about the royal colleges' review. My ministerial colleague's letter to him stated that it had been overtaken by events, but that was not to avoid dealing with the issue. A number of national reviews of maternity services are taking place to try to ensure that we provide the best high-quality and consistent service
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throughout the country. There is to be huge investment, as the hon. Gentleman knows from the extra finance that was announced this week for maternity services. The national service framework for children, which will include maternity services, is trying to set top-quality standards. We want to examine Grantham in the context of that national review so that there is a prospect of providing high-quality services for local people.
I understand the hon. Gentleman's frustration that the national review, the work force review and the national service framework may sound like NHS gobbledegook, but we are making a genuine attempt to put in place, for the first time, a national entitlement for everyone, wherever they are in the country, to receive high standards of care. It would be easy to make decisions about Grantham now outside the context of that wider review. However, keeping the objection open, which the community health council has lodged, means that a decision will have to be made. Making a decision about Grantham in the wider context of the national review is harder in many ways than reaching an immediate decision on the basis of information that we have now. The re view may come up with further information that enables us to examine the situation in Grantham more closely in the future.
Mr. Davies: I do not underestimate the capacity of the review to provide further excuses for more delays by the Government. The hon. Lady now has three minutes in which to answer my questions. Will she make a decision? Will she deal with the formal objection? If she does not intend to do so today, when will she give us an answer? Will it be after the next election?
Ms Blears: I understand that the review group hopes to report by the end of the year and to send reports on its national consideration to Ministers by April 2002. That is the framework to which we are working.
It is right that I should refer to specific cases raised by the hon. Gentleman. I did not intend to do so, but as he has raised them, it is important to comment on them. The two cases of which I am aware—Tyler Foster and Olivia Gonzales—are tragic. It is important to say that Tyler Foster had meningitis and, as many people know, meningitis can deteriorate dramatically quickly. Tyler was transferred to Pilgrim hospital, Boston and then to the paediatric intensive care unit at Queen's medical centre, Nottingham. There have never been paediatric intensive care facilities at Grantham, so the transfer would have had to be made in any event. I also understand that the has been a full report on that case and that there is no evidence that, had he been transferred to the paediatric intensive care unit sooner, the outcome would have been any different.
Mr. Davies: May I point out the geography of Lincolnshire? Boston is 30 miles in one direction, Nottingham is 30 miles in another direction. The poor child was sent in one direction and then 60 miles in the opposite direction.
Ms Blears: In the case of Olivia Gonzales, the transfers took plate as they would have done in any event. There is no evidence that the unfortunate death of that child could have been avoided by the existence of a

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consultant-led service. The hon. Gentleman said that it is very difficult to decide in individual cases where the provision of services would be.
In relation to the current reviews, the national review and the decisions to be made in Grantham in that context, it would be inappropriate and wasteful now to hold a separate public inquiry. However, it is important that the objection from the community health council remains. Ministers will have to take a decision about Grantham, but it will be better informed, in relation to the work currently being done on maternity services. The hon. Gentleman has raised some important issues about the connection between paediatrics and obstetrics. Those issues need to be closely examined and I am grateful to him for bringing them to our attention.

National Lottery
1 pm
Mr. Conn Challen: I am grateful for the opportunity for this debate, which comes at an opportune time.
Someone once said that if life was fair, Elvis would be alive and all his impersonators would be dead. I am reminded of that remark as I make my first Adjournment debate speech, on the subject of the national lottery. Perhaps it is a philosophical question whether something called a lottery should be expected to be fair; you pays your money and you takes your chances. The trouble is, I cannot let the matter pass as easily as that. Some constituencies contribute more than their fair share in the purchase of lottery tickets and scratch cards, compared with what they get back in lottery grants to their local good causes. Let me not beat about the bush; mine is such a constituency.
Since the inception of the national lottery, my constituency has spent well over £40 million on it and currently ranks at 253rd out of 659 on that score. However, where are we when it comes to getting money for good causes? According to Library figures, to the end of June this year we came 654th out of 659 constituencies for grants to good causes. However, mine is by no means the worst case and I am pleased to see in the Chamber one or two hon. Members who represent other such constituencies. The lowest-ranked recipient is Denton and Reddish, which ranked 255th in the purchasing of tickets. Poor old Hayes and Harlington was in the top 50 payers but came second from bottom in what it got out of the lottery.
By June this year, Morley and Rothwell had received just £814,000 in the whole of the six years since the lottery started. The average for a constituency was £14,086,000 nationally. Of course, the average is somewhat inflated by the fact that some constituencies contain locations such as city centres where applicants for geographically widespread awards are based. Alternatively, they may have nationally prestigious and widely acclaimed projects within their borders, such as the dome in Greenwich and Woolwich, which came top of the list with more than £672 million. However, even if we removed that factor from our reckoning, I doubt very much whether it would result in a ratio better than 10 to 1 between the average awards and those given to the bottom dozen or so.
I am pleased that the Government announced, earlier in the year, that they intended to tackle that appalling deficit in the worst-off areas by creating a £150 million fund called "communities first", which, starting next April, will channel money to areas that are deprived or that have received less than their fair share of lottery funds. What constitutes an area for the purpose of this scheme is yet to be announced. Will it be a county, a city, a constituency or a district? If communities are being considered, in my view only one definition of an area will suffice£a constituency.
In a city the size of Leeds, of which my constituency is a part, there are many communities, some of them fiercely proud of their local traditions and identities. It would be wrong to lump them all together, so this is my first plea: if we are interested in communities first, let us ensure that the communities first fund tackles its remit at the lowest possible level—that of the constituency.

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However, I do not want to focus entirely on the new fund. If it receives all our attention, we may, by default, miss out on all the other lottery funding streams, yet still imagine that our problem has been solved. The whole ethos has to change. With the declining sales in lottery tickets, it is clear that fewer large awards will be made. The emphasis now is on many smaller awards. In that sense, therefore, it is even more unlikely that we at the bottom will be able to catch up.
I come now to some of the obstacles that are placed in the way of successful applications. A highly respected charity in my constituency has been turned down for grants on four occasions. The most recent disappointment was with regard to its application to the community fund's poverty and disadvantage programme to tackle issues on one of the most problematic housing estates in my constituency. The charity employs professional fundraisers. Their applications are not made lightly or without very serious attention to detail. It seems that the fundraisers have been refused because of some missing details. If that is the case, why were they not asked to fill in the alleged gaps rather than being refused and told to start all over again?
Another reason for the charity being turned down was that its board was not considered representative enough of the community. That was despite the fact that the charity's board was necessarily constituted to reflect the institutional arrangements with some of its key funding bodies, such as the local authority, which meant that such arrangements would be difficult to alter. I am not a fan of the phrase "politically correct", but there seems to have been a politically correct pretext for turning down bids that had not been exercised thoughtfully.
Since being elected to Parliament in June, I have been campaigning in my constituency to raise awareness of our poor record in receiving grants. I have no doubt that if we applied for more money, we would receive more money. However, we must first develop our capacity to make good applications. I visited one local charity that desperately needed to improve its accommodation. The only person who was really interested in performing the role of applicant was the charity's septuagenarian secretary. Unfortunately, he died before a successful bid could be made. The organisation has since folded, even though it served many local people and provided a heart for the community.
The problem is that organisations need capacity building before they can do anything and those in deprived areas are most likely to lack capacity. There may be no easy access to the services of solicitors, accountants or other professionals who could help such organisations with complex applications. Volunteers in the community who have such skills may already be overstretched. Has any research been commissioned into the matter?
I come now to my second plea. If we seriously want to ensure that lottery money goes to the areas that have missed out on it before, we must analyse why that has happened, learn the lessons and take active steps to remedy the problem. Such steps must include providing training as well as having lottery funding officials
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meeting groups and assisting them. At a meeting in my constituency, they did just that. It was useful to have experts on hand to answer specific questions. We must ensure that that happens regularly. It should not have to be the local Member of Parliament who initiates such activity. We must also ask whether enough time is given to the application appraisal process. What is the average time given to reading, checking and analysing applications? Is it 20 minutes or half an hour? In some cases, the process may be too summary. What I have sought so far might help the problem, but I know that only marginal improvements can be made to our local success rate. Turning the tanker around will take a long time and, after six years, that is too long a time to wait.
I come now to my third plea. A ring-fenced sum from the communities first fund should be reserved for the bottom dozen or so constituencies, which have received less than 10 per cent. of the average amount given nationally to constituencies. Even if that ring-fenced sum were aimed at ensuring that each of the constituencies received only £1 million each, thereby doubling what they had received in the previous six years, it would still be less than 10 per cent. of the entire value of the communities first fund.
Mr. Kevin Hughes: I am grateful to my hon. Friend for allowing me to intervene. As he knows, my constituency—like his own—has received less than £1 million, although it has paid into the lottery a great deal more than that. His idea of targeted funding is excellent, but is he not being a little too modest? Is he aware that other targeted funding such as "Brass for Barnsley" was more than £3 million? Perhaps we should have funding along the lines of "Money for Morley" and "Dosh for Doncaster". That should be more than £1 million. It would bring us up to at least half the average, which would be a huge increase in our constituencies.
Mr. Challen: My proposal may be a little modest, although later we shall find out how modest the Minister believes it is. Those of us at the bottom of the heap have to raise the profile of our constituencies, but we must do it in a way that does not upset people further up the ladder who may not want to be overtaken in the stakes. The exact sum must be right, but I am grateful that such a debate has been opened.
The situation demonstrates how little we have received. It is like asking for a new crumb to match the crumb that we haw already received. Nevertheless, that would go a long way towards alleviating the problem that I fully anticipate will continue throughout next year. Unless we take a radical step, those of us at the bottom will stay at the bottom and will not notice a change in our fortunes. That would be a real scandal.
My proposal is called "top slicing". It is a familiar, justifiable concept and I hope that the Minister will consider it on its merits. After all, it is merely a small refinement to the principle that has been admitted: that the distribution of national lottery money to good causes has not worked fairly. It is a great shame that we could not just have kept our original £40 million. The money that has been drained from my constituency over the past six years to subsidise other areas could have been better spent on renewing my local communities.

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However, I am pleased for the other areas. The lottery is probably the least efficient form of charity invented. More often than not, it hurts poorer pockets disproportionately. However, even though we have not been able to fulfil our pledge to ensure that it is run on a not-for-profit basis, the lottery has brought benefits to many communities that otherwise would not have received them.
My campaign to bring more lottery cash into Morley, Middleton and Rothwell will continue. It would be wrong to make a plea for assistance if local people did not get their act together and submit good, well-thought-out applications. The principle of fairness implies that we should not receive something for nothing. It also implies that we should not expect to receive nothing from something, or in our case, £40 million plus.
1.13 pm
The Minister for Sport (Mr. Richard Caborn): I congratulate my hon. Friend the Member for Morley and Rothwell (Mr. Challen) on securing the debate. It is his first Adjournment debate and I am sure that hon. Members agree that he has put his case extremely well this morning. I want first to clear up one or two misconceptions. I understand my hon. Friend's frustration on behalf of his constituents at not receiving the level of national lottery awards that has been made from the ticket sales. I must point out, however, that 50 per cent. of the lottery money goes straight back into prize money, so no constituency will receive more money than half its ticket sales.
Money is awarded by lottery distributors according to need. Many people do not realise that those in the better-off constituencies buy most of the tickets. I did not know that before I came to my present job in the Department. So, in a sense, there is a redistribution of wealth in some respects. The Government are aware that some areas have done better from the lottery than others. Some of the steps that we hive taken since we came into power have shown that we are committed to achieving a fairer spread by direct distribution to ensure that all parts of the country benefit.
We have tried to refine the distribution of moneys for good causes. Further refinement includes, as my hon. Friend said, the announcement made by my right hon. Friend the Secretary of State for Culture, Media and Sport earlier this year, in the summer, that £150 million would be targeted on schemes to be delivered by the community fund and the new opportunities fund in areas that are deprived and have received less lottery money than elsewhere.
We asked the community fund and the NOF to select the areas to be targeted under the new scheme on the basis of two criteria—deprivation and having received less lottery money. We have not specified whether they should select on the basis of county, city, constituency or district. My hon. Friend forcibly made his case for the constituency. We have not directed them in that, and we shall find out what emerges from that consultation. We hope that targeting will effectively tackle pockets of deprivation at the local level.
Coming from south Yorkshire, I understand my hon. Friend's anxiety about targeting with reference to Barnsley. The Government had discussions with
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coalfield communities because we believed that we had a responsibility to them in trying to restructure their economies. Lottery distribution was cited in 1997 as an aspect that was not being used as effectively as it should be. The then Secretary of State, my Friend the right hon. Member for Islington, South and Finsbury (Mr. Smith), took that on board and proposed a scheme in the coalfield communities, and the priorities initiative was established.
Andrew Bennett: Precisely when will the new money be allocated? My hon. Friend the Minister says that he has referred the matter to those bodies to make up their minds. When will they tell him how that will be done?
Mr. Caborn: I hope in the next few weeks. As my hon. Friend knows, my right hon. Friend the Secretary of State has been preoccupied with handling bereavements following 11 September; indeed, she is in New York today and flies back this evening. Several decisions would have been made had she had more time in the Department; that is one of them. I assure my hon. Friend that that will happen in weeks, rather than months.
The priority area initiatives were established by the community fund in England and, as my hon. Friend the Member for Doncaster, North (Mr. Hughes) said, "Brass for Barnsley" was the first manifestation of that, back in April 1999, for an initial period of 12 months. He is absolutely right to say that it identified £3 million from the regional grants budget to be available as funding for Barnsley over the three years to 2002. Regionally based community fund officers worked in partnership with local development agencies to increase the funding given by the board to local voluntary community organisations in Barnsley in the metropolitan borough. That was successful: all £3 million was distributed in the first year of operation. That was commendable, because one of the criticisms that was rightly made of the fund was that a lot of bureaucracy was involved and that the money was not reaching the areas that it should.
Bit by bit we have refined the process. Almost 41 per cent. of lottery funds now go to much smaller schemes, rather than to the big ones that have to some extent distorted the figures to which my hon. Friend refers.
Mr. Kevin Hughes: Does my hon. Friend believe that targeting initiatives such as "Brass for Barnsley" would be better targeted at less well-off constituencies, in order to put some money into such constituencies? I have not done an analysis, but I suspect that if he or his Department were to do so, he would probably find out that the constituencies at the bottom end in this case are at the bottom end of the deprivation stakes, too.
Mr. Caborn: I do not know whether that is true. We must see this in the context of the lottery being one of the funding mechanisms to address some of the structural weaknesses of the coalfield communities. It was not standalone funding. GDP per head in Barnsley is around 62 per cent. relative to the average of the European regions. Doncaster is not down at that level. That figure is from memory, but I ask my hon. Friend to reflect that Barnsley is probably one of the poorest

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constituencies in the country. That was accelerated by the closure of the pits and consequent effect on the local economy.
My hon. Friend mentioned a charity that had had its application for an award turned down four times. I am sure that he will understand that it is not my place to comment on particular applications. That is the responsibility not of the Government but of the lottery distributors. However, I am concerned if that has been taking place without good reasons being given. Distributors take decisions independently of Ministers and concerns about specific cases should be taken up with them. If my hon. Friend approaches the various lottery distributors I am sure that he will get a full answer.
We are concerned to make the application process as straightforward as possible and for lottery distributors to work with applicants in a supportive way. That was certainly the recommendation of the quality, efficiency and standards team whom we asked to carry out an independent study of the applications process. Distributors welcomed that report and agreed to take forward its recommendations. My hon. Friend also mentioned capacity building, which is another area that needs further attention. I agree that capacity building is important and we are increasingly seeing distributors providing that kind of support, such as in the Barnsley scheme that has been mentioned. It is clear that professional support helps the lottery funds get to where they are needed.
Andrew Bennett: Does my hon. Friend accept that part of the problem with capacity building is that the people who are paid the money come from outside the areas that we are talking about? The money goes off to Cheltenham or some such area where those consultants come from, rather than going to the disadvantaged areas of the country.
Mr. Caborn: I do not know whether that is true. We put in professional community fund officers in the Barnsley area. I shall look at that. In terms of their salaries, the answer is yes, but in terms of the money coming in, I do not think that the £3 million went out of Barnsley. I think that it was invested in Barnsley. The question I would ask is, when one brings in that professionalism, does one get a better quality decision, and does the money get to where it should quicker than it would do normally? This is about cutting through some of the bureaucracy. I am open to that type of discussion and I want to see that debate taking place. I want to make sure that lottery money gets to the areas that really need it.
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Some of the criticism has been justified. There has been too much bureaucracy and we should move that out of the way, get things focused and spend money effectively. As my hon. Friend may know, Sheffield Hallam university, on behalf of the DCMS and the lottery distributors, undertook a study of professional services to the lottery on the building up of capacity so that it is not always necessary to rely on outside forces, but there is capacity building inside those communities. That brings in agencies like the local authorities and other voluntary agencies to ensure that they understand how lottery applications can be framed and be successful. A number of recommendations have been made and the Department is taking them forward and hoping to build the type of capacity that my hon. Friend described.
In some quarters there is an argument about—and, indeed, some frustration about—the amount of money being held. The figure bandied around in the press is something like £3 billion, which apparently remains unspent by the distributors. In reality, almost all the money has already been committed to projects. Grants are usually paid out over a period of time according to when recipients need them. Distributors have assured us that we can expect their balances to fall dramatically over the next two or three years as more projects draw down their grants at d more awards are made. We attach a high priority to ensuring that that happens.
The lottery has brought enormous benefits to this country, as my hon. Friend acknowledged. I hope that we shall continue to refine the system and address the genuine anomalies. In the next few weeks we shall announce the new £150 million fund, which will start to address some of those problems. It is an ongoing debate and our actions over the past three or four years have helped to refine the system and make distribution fairer.
Andrew Bennett: All we need is a simple wind-up in which the Minister says that he will give us the money.
Mr. Caborn: As my hon. Friend knows, if I could come here and say Mat, I would—but it is not so simple, as he also knows. My genuine response is that we will try to iron out the anomalies and make the distribution as fair as possible. We have taken several fundamental steps with the distribution of the lottery, which is fairer than it was four years ago. There is still further to go, which is why we shall continue to refine the system to make it even fairer.
Mr. Nicholas Winterton (in the Chair): I thank the Minister for his response. We can now move on to our final debate, introduced by the hon. Member for Blaby (Mr. Robathan).

Renewable Energy
1.26 pm
Mr. Andrew Robathan (Blaby): To great fanfares on 1 October, the Parliamentary Secretary, Cabinet Office, the hon. Member for Shipley (Mr. Leslie) announced that all electricity at 10 Downing street and two main Cabinet Office buildings was being generated from renewable energy sources. He said:
"The very heart of government is now being powered by electricity from renewable sources. This is an important step towards the greening of government. It is also highly symbolic".
As hon. Members know, the Government's target is to produce 5 per cent. of their electricity from renewable energy sources by the end of 2003 and 10 per cent. by the year 2010. At the same time, their target is to double the use of combined heat and power to 10 GW by 2010.
Those are laudable targets, which ill who care about climate change would like to see achieved. Unfortunately, the Government also chose to introduce new electricity trading arrangements which are having a serious impact on renewable energy and the combined heat and power industry. Both consequences were entirely unintended, although they we re predicted by the Royal Society for the Protection of Birds, which said:
"NETA will have an adverse effect on the development of renewable energy".
The Association of Electricity Producers also said:
"Renewable energy schemes will be at a considerable disadvantage in a market which favours plant with a larger and more predictable output".
In March Alcan wrote to the then Minister for Energy, the hon. Member for Neath (Mr. Hain), stating:
"NETA would be damaging to small players and this would persist".
It pointed out that there was a bias in NETA against small generators, encompassing most renewable and CHP generators.
I should say at the outset that I am an unpaid vice-president of the Combined Heat and Power Association, and vice-chairman of PARSEG—the parliamentary group on renewable and sustainable energy. My only pecuniary interest, which does not yet exist but is proposed for the future, is that I want to put my money where my mouth is and install a wind generator on my farm in Leicestershire. My wife is somewhat less keen, but I hope that I will be able to persuade her of its merits.
NETA was launched in March this year and replaced the pool system. In essence, NETA is about forward trading and is designed as a step forward in the liberalisation of the market—hopefully to the benefit of consumers. NETA was introduced by Ofgem, at the instigation of the Government. It has been followed by and probably contributed to—if it did not actually cause—a 10 per cent. reduction in electricity prices. I applaud that, although reducing prizes might have the unintended consequence that it would not discourage the unnecessary and profligate use of energy and the world's resources.
In August, Ofgem published a "Review of the initial impact of NETA on smaller generators". From that came the startling conclusion that
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"the data confirms that wind power is unpredictable".
On the radio this morning Callum McCarthy, the chief executive of Ofgem, said that unpredictable supplies were less valuable than predictable supplies of energy, which is a more worrying conclusion to draw than that wind does not blow at the same speed all the time. Unfortunately, he has taken that view further because NETA, which was formulated by Ofgem under his guidance, requires predictable and constant energy output and penalises unpredictable energy producers.
The renewable energy sector was the genesis of today's debate—specifically a conversation I had three weeks ago with a small wind energy producer in Leicestershire. The unpredictability of supply from his two 25 kW turbines meant that his contract with Powergen was cancelled in April. In other words, it is no longer cost-effective to run his wind generators, a fact that is mirrored throughout the country. Large wind farms are seeing a 27 per cent. reduction in the price of their electricity, while other renewable prices are down by 26 per cent. The renewable energy price is being artificially depressed by NETA; far from encouraging renewables, they are being discouraged.
As another example, a report from the Tyndall Centre for Climate Change Research, partly funded by the Department of Trade and Industry, found that the imbalance penalties imposed by NETA outweighed the payments made for supplying energy. It suggested that a 10 MW wind farm would have had a net negative unit value of minus 0.41p per kW hour. That means that the farm makes a loss just by producing and selling electricity, not even taking into account any costs involved in setting it up. Indeed, experience shows that some wind generators are finding it easier to stop producing electricity and that turbines are being switched off.
Last year, as in 1999, renewables provided only 2.8 per cent. of the electricity generated in the United Kingdom. Besides wind, other energy sources such as solar power are similarly intermittent, and there must be a great deal of encouragement for renewable energy if we are to rise from 2.8 per cent. last year to 5 per cent. of electricity production by the end of 2003. It is interesting that electricity generation by renewables was nearly 2 per cent. in 1990 and, notwithstanding the non-fossil fuel obligation, was only 2.8 per cent. 10 years later. The renewables obligation is coming, but it is not yet clear how effective that will be. On 6 March, the Prime Minister announced an additional £100 million for the development of renewables, but we do not yet know how that will be spent. All the good intentions do not seem to be leading to greater capacity for renewable energy, largely because of NETA.
If we examine combined heat and power, which according to the Government's climate change strategy has
"the potential to deliver the single largest contribution to cutting CO2 emissions in the short to medium term, at a net benefit to the UK economy",
we can see that matters are even worse. I have heard the CHP industry described recently as "in meltdown". Power exports from CHP generators have fallen by more than 60 per cent. and British Sugar has cancelled two major 70 MW CHP schemes, which was a £100 million investment. Slough Heat and Power, a

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small local producer, is considering writing off £60 million of investment because of the impact of NETA. That would lead to 70,000 tonnes a year of additional landfill waste, which the company is currently turning into fuel. To quote the Minister for the Environment,
"the CHP industry is in crisis".
The problems facing CHP are not due only to NETA, but relate to the fall in electricity prices as a consequence of NETA and the unprecedented rise in gas prices. Moreover, CHP labours under the need to pay climate change levy on exports of power from CHP producers. The Combined Heat and Power Association was promised exemption from the levy but achieved only partial exemption. As almost everyone, including the Government, believes that combined heat and power is an efficient use of energy and leads to the reduction of carbon emissions into the atmosphere and therefore a reduction of climate change, it seems ludicrous to impose the climate change levy on the export of CHP-produced energy.
Furthermore, I understand that the levy is producing only £33 million a year in revenue, which is small beer compared to the £100 million investment that British Sugar has now not made, for instance. Exempting CHP from the climate change levy could be done quickly and easily, perhaps in the Chancellor's autumn statement—assuming that he is going to make one.
It is also currently intended that CHP should be subject to the renewables obligation, and that would cost CHP producers a further £100 million a year. Many people will argue that CHP should be treated as a renewable source—a complicated argument, which I do
not wish to pursue here—but it does seem perverse to ask CHP to fund the renewables obligation. The whole purpose of that obligation is to encourage environmentally friendly forms of electricity and to discourage carbon release into the atmosphere, which causes climate change. It seems to me that CHP is an efficient, environmentally friendly use of electricity that does not release extra carbon into the atmosphere.
NETA was set up by Ofgem. To say that the arrangements are complicated is a gross understatement—I would describe them as arcane in their complexity. This makes it all the more difficult for small operators and generators to find their way around them. Candidly, I suspect that there are few people in the House of Commons who understand these arrangements. I do not know whether the Minister wants to intervene to explain them—apparently not.
I am not sure that I would put myself among those who understand the arrangements, but I do understand the consequences. The unintended consequences of NETA are that the renewable energy and CHP industries are being severely undermined, and the result will be that the Government's laudable targets on renewable and CHP generation are not met. Indeed, Callum McCarthy seems in his pronouncements specifically to exclude any consideration of renewable energy. He seems to take the view that his sole intention is to organise the arrangements so that reliable and cheap electricity is provided.
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I come to this debate more in sorrow than in anger, and I do not believe that this issue is party political. I want the Government to succeed in these targets for the good of the world's climate, but I see little likelihood of it happening. The Government gave Ofgem the task of creating these arrangements and the stipulation, as I understand it, that renewable energy and CHP should be encouraged and certainly not penalised—but that has not happened. It is now up to the Government to rectify the arrangements. This needs to be done urgently because it is easy to destroy something quickly, but much more difficult to set up viable renewable and CHP industries. The damage is being done now and the Government need to react quickly, not with another review that will report in a couple of years' time.
We should contrast what is happening here with the announcement on Monday in the United States of America that the environmental protection agency, at President Bush's behest, has set up a new compact to promote CHP with various partners. The Bush Administration have been criticised for their attitude to environmental matters, but they have obviously got it right regarding what the statement refers to as
"reducing air pollution and fuel consumption and leading the way towards a cleaner future".
I want to see the Government follow up their fine words with two swift actions. First, I suggest that both CHP and renewables should be taken out of NETA and given some special status—perhaps some transitional arrangements while electricity trading arrangements are again revised. Secondly, CHP exports should be exempt from the climate change levy.
I would like to wind up this debate with some quotations—the first from the Labour party manifesto issued earlier this year. On page 13 it states:
"We are putting an obligation on electricity companies to deliver 10 per cent. of the UK's electricity from renewable sources by 2010 with a doubling of combined heat and power. We will consider setting further targets for renewables".
Those are fine words; I, too, want to see those obligations met. Nick Goodall is chairman of the Confederation of Renewable Energy Associations and is also the chief executive of the British Wind Energy Association. At the end of August, in response to the review of initial it impact conducted by Ofgem's chief executive, Callum McCarthy, he said:
"OFGEM have today verified long held concerns that NETA is incompatible with the UK renewables and CHP targets and is also contrary to the widely expected outcome of the Government's energy review that the use of renewables will increase well beyond the 10 per cent. target in the longer term. The NETA process is damaging existing renewable energy projects and sending out the wrong signals to industry."
At the beginning of the debate, I quoted a Minister who said that the Government's commitment to green energy was symbolic. What is being symbolised? I hope that I have illustrated that on this issue the left hand of the Government h is no idea what the right hand is doing. That gives the lie to the Government's claim that they have an holistic approach. I hope that the Minister for Industry and Energy will explain not only that he understands the problems, but that he is taking action to put things right for the long-term benefit of this country and the world's environment.
The Minister for Industry and Energy (Mr. Brian Wilson): I thank the hon. Member for Blaby (Mr. Robathan) for his choice of subject and for the way in which he introduced the debate. I recognise his work as vice-chairman of PARSEG, a highly successful and valued parliamentary group on renewable and sustainable energy. I welcome the fact that he has focused attention on these genuine and urgent matters in an Adjournment debate. We agree on the fundamental fact that it is a big issue, which, as he said, is largely non-party political. It is al so an issue that the Government are interested in addressing; we have commitments and targets, and it is therefore entirely in our interests to ensure that nothing inadvertent happens to prevent our achieving those targets. I recognise the hon. Gentleman's genuine concerns and the need for an urgent response. I hope that I shall make some progress in responding today.
Although I have come to the issue only recently, I have a long-standing record of supporting renewable technologies, so I have no interest in paying lip service to targets if events on the ground are running contrary to their fulfilment. If there is such a problem we must tackle it. Any inconsistency of approach will be picked up quickly by investors who will not make the investment and commitment that we will need in the renewable sector if the targets are to be achieved. The issue is how we maintain our renewables targets. How do we advance; how do we send out powerful messages about the Government's commitment to renewables while also recognising that there are certain forces at work, one of which may be neater in some of its operations but may have a counter-productive effect? I do not reject the contention that such a problem exists.
In response to the Ofgem report to which the hon. Gentleman referred, I intend shortly to issue my own consultation document which will contain proposals specifically aimed at addressing the concerns of the smaller generator community. This debate is timely; NETA has been introduced and we have received Ofgem's assessment of the impact of NETA on smaller generators. I am about to respond to Ofgem and consultations will be held on that basis. That might sound as if there will be a long, bureaucratic process, but I assure hon. Members that the process will be rapid. Ofgem reported quickly on the first few months of operation. We will respond quickly with our views about what has to be done, and await the generators' response. The process will be concluded within the next two or three months, and there will be some kind of outcome, and whether or not it is exactly what the hon. Member or I want, we shall reach conclusions on the debate in a reasonable time. I am keen to advance the development of NETA in an open and inclusive way, but I am also totally committed to renewables. We must somehow synthesise those two objectives and make them compatible.
The hon. Gentleman asked about the Prime Minister's announcement of £100 million for renewables. That figure comes from a separate performance and innovation unit report on the future of renewables. The allocation of that money to individual firms will be announced shortly. I am sure that the hon. Gentleman will become aware of that. Consultation has taken place and the allocation of the money, which is additional to other investment in renewables, will be
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announced shortly. The hon. Gentleman fairly recognised that a lot of money and commitment is being put into renewables, but we must ensure that the end product is as we intend it to be.
The new electricity trading arrangements, which have come to be known as NETA, made significant changes to the operation of the electricity market in England and Wales. Two Ofgem reports on the working of the arrangements over their first three months have made us better informed on NETA's performance and issues arising from it. It has been suggested—even in the context of this debate—that NETA was a disaster that had not produced positive results.
Mr. Robathan indicated dissent.
Mr. Wilson: The hon. Gentleman suggests that he does not think so.
In fact, NETA has been a success in its own terms. The introduction of a more efficient regime into a more transparent, inclusive and efficient pricing system has meant that wholesale electricity prices are up to 25 per cent. lower than the artificially high prices that existed under the pool arrangements. NETA has delivered quite spectacular results in a short time. Although it does not negate the argument made by the hon. Member for Blaby, I can say that the price reduction for renewables has been about 17 per cent., which is less than the overall reduction achieved under NETA.
Mr. Robathan: My figures, which may be out of date, suggest that the position is the other way around, but I accept that the figures may change by the day. I certainly do not criticise NETA in general, merely in specific ways.
Mr. Wilson: The figures may change by the end of the debate if I receive another piece of paper, but I do not expect that to happen. The figure on renewables is lower than that for overall price reduction. I do not mean to quibble over that. The impact on renewables, which are produced by smaller producers and have higher relative capital costs, is clearly proportionately greater than is the case for larger generators.
NETA's role allows market signals to set electricity prices. It is also vital that NETA delivers security of supply. Ofgem's report on the first three months of the operation of NETA shows the rapid emergence of a strong and liquid forward market, and all that contributes to reliable longer-term price signals for investors to use in planning new generation. NETA's development will secure our longer-term aims for encouraging a move towards a more cost-reflective and efficient system, within which the benefits of embedded generation and renewables are recognised. In the longer term, there will also be benefits for renewables.
As the hon. Gentleman said, it was always predicted in some quarters that NETA would damage both renewables and the smaller generator industry in general. That is why my predecessor, my right hon. Friend the Member for Neath (Peter Hain)—now the Minister for Europe—asked Ofgem to complete a report on the impact of NETA over the first two months of operation. That report was based on the experience of 40 companies and organisations, including some

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renewable generators. Even that small sample should tell us how the predicted problems were working out in reality. The Ofgem report, which does not contain anything contradictory to what the hon. Gentleman said, states that the volume of trade in renewables is slowing down only slightly. Although the same volume of renewables is sold at market, prices have dropped substantially. I hope that improved future contract terms will address that problem.
The renewables contracts that were traded in the first two months of NETA were negotiated before 27 March, and I expect them to contain a speculative element, but as NETA settles down and the industry gains trading experience, future contract prices may stabilise. The report stated that in NETA's early days, sharp price hikes had occurred when trying to balance the market. That would have a greater impact on small generators. As the market has matured, the price spread has narrowed, and the balance and settlement system has been modified in the light of earlier experiences. The cost of balancing is now half of what it was. We should continue to reduce volatility, and ensure that electricity prices are cost reflective.
There were concerns that renewables would suffer when we moved to the NETA market because they are less predictable. The Ofgem report analysed the predictability of generating technology, and found that wind power was the only one judged to be less predictable. It is not a remarkable discovery that wind power is a less predictable technology, but it is interesting that it is alone in that.
The report also showed that consolidation services, which could group smaller generators into portfolios of predictable and less predictable generation, had not yet emerged in the market. That, possibly, is a partial solution. I do not deny that the issue exists, but we can take evolutionary steps to address the problem. In my response to the Ofgem report, I will reflect the hon. Gentleman's concerns—and mine.
The hon. Member for Blaby mentioned combined heat and power. I recognise the urgency of that matter; in addition to my departmental work, I spoke on the subject at a couple of meetings in Brighton at my party's conference, once for the Combined Heat and Power Association and once for GEC Alsthom. It was useful to hear straight from the coalface about the urgent problems that affect CHP. There is no point in proudly announcing targets for CHP if, as is the case now, something unexpected is happening on the ground.
As the hon. Member for Blaby acknowledged, it is not NETA but a combination of high gas prices and falling electricity prices that is the primary cause of CHP's problems, although NETA is a factor in falling electricity prices. We have done much on CHP, introducing, for example, the climate change levy exemption for good quality CHP used on site or sold direct to other users. CHP is a key option for energy-intensive industries that want to negotiate an 80 per cent. reduction in CCL.
About £70 million has been made available this financial year for enhanced capital allowance. We have offered tax incentives to companies investing in CHP, and have exempted electricity generating plant
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machinery in CHP schemes from business rates. The energy efficiency fund under the climate change levy is to be administered by the carbon trust, and CHP schemes are expected to benefit from it. A lot has been done in support of CHP. It has enjoyed a period of expansion, much interest from industry, investment and proposed investment, but if the reality is that people are now walking away from it, I have to treat that seriously. Indeed, the economic difficulties faced by CHP were highlighted by the findings in Ofgem's report on NETA and the smaller generators.
As a holding statement, I can say that my Department, working with industry and other Departments to address those difficulties, is collaborating with the Department for the Environment, Food and Rural Affairs—the lead Department in the development of the Government's CHP strategy. The strategy, which I hope will be published soon, will address both existing measures to support CHP and new measures to encourage development. High gas prices are a large part of the problem, and we have a three-point strategy to address that. We are pressing for greater competition in Europe, improving the function of the home market, and taking action against anti-competitive behaviour.
I accept that the problems of CHP are urgent and have to be considered closely if we are to continue to issue targets. At the moment, they are not in tune with events unfolding in le CHP industry. I recognise that major companies that had made major commitments to CHP have now reversed those decisions. In particular, I am aware of the British Sugar decision to cancel its investment. I assure, he hon. Gentleman that I am aware of all those matters, and he does us all a service by drawing our attention to them.
As with CHP, the future of renewables is not only dependent on how NETA works, although that is important. I have formed a co-ordinating committee with Callum McCarthy by to advise on the implementation of the recommendations of the embedded generation working group, which reported in June. That group identified a whole range of actions designed to improve the incentives for distribution companies to ease the connection of all small generation, including renewables. I am determined to see those actions implemented as soon as is practicable.
The renewables obligation underpins much of the discussion because it is the practical embodiment of our commitment to renewables. Shortly, I will be introducing to the House a draft order to implement the renewables obligation. That will oblige licensed electricity suppliers to provide a specified proportion of electricity from renewable sources in future. That will be the prime mechanism through which we will increase the uptake of renewable energy between now and 2010, and beyond. The renewables obligation aims to produce a secure market as far ahead as at least 2027. Our interim aim is that 10 percent, of licensed electricity sales will be generated from renewables by 2010.

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I do not dissent from the thrust of what the hon. Member for Blaby has said. The extent to which NETA has been the direct source of problems is clearly a matter of degree, particularly in the case of combined heat and power, as many other factors are at work. NETA has delivered considerable successes in other ways, but I have no interest in denying or concealing the fact that there are problems for wind energy and CHP. I am very anxious to address those problems. One of my main
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obligations is to deliver on the Government's renewables targets, and to send out strong, consistent signals that we want to help to stimulate the renewables markets. If perceived, or real, problems stand in the way of those aims, I share the hon. Gentleman's wish to remove them and to give a clear commitment to the future of renewables and CHP.
It being Two o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

DEFENCE

  Defence Vetting Agency
  Syd Rapson
  To ask the Secretary of State for Defence what key targets have been set for the Defence Vetting Agency for the financial year 2001–02. [8604]

  Mr. Ingram
  The Defence Vetting Agency carries out security vetting checks on people employed by the Ministry of Defence, by certain other Government Departments, and by defence contractors. Since 1997, the agency has been involved in an ambitious modernisation programme to create a responsive, efficient organisation that will exploit the capabilities of modern information technology to the benefit of its customers. This is the second year of major change for the agency. During this financial year a collocation programme, which involved the closure of its London and regional offices and the setting up of an integrated organisation in York, will be completed and a number of other initiatives to improve efficiency and responsiveness will also be progressed. It is expected that performance will be depressed while those changes take place. The chief executive has been set the following key targets:

  Quality

  Key Target 1:
  At least a 95 per cent. success rate in dealing with specially selected cases and zero serious errors.

  Timeliness
  Key Target 2To complete 69 per cent. of security checks within 42 days.Key Target 3:To complete 61 per cent. of counter terrorist checks within 42 days.Key Target 4:To complete 90 per cent. of developed vetting within 182 days.Key Target 5:To achieve average completion times of 33 days for security checks, 32 days for counter terrorist checks and 105 days for developed vetting.
  Efficiency

  Key Target 6:
  To maintain the unit cost of output.

  I will place copies of the corporate plan in the Library of the House.

  Medical Agencies
  Mr. Anthony D. Wright
  To ask the Secretary of State for Defence what progress has been made with the quinquennial review of the medical agencies; and if he will make a statement. [8603]
  1224W
  Dr. Moonie
  I am pleased to say that the review team have completed the first phase of its studies. As indicated in my written answer to my hon. Friend the Member for Gedling (Vernon Coaker) of 15 December 2000,Official Report, column 275W, the team has covered medical arrangements for personnel in Germany and Northern Ireland; and the interrelationships between primary and secondary care as well as the functions and organisation of the Ministry of Defence's four medical agencies—the Defence Secondary Care Agency, the Defence Dental Agency, the Defence Medical Training Organisation and the Medical Supplies Agency.

  I have endorsed the broad lines of the review team's report on the first phase of its studies and have agreed a package of further work to underpin and confirm its provisional conclusions. A paper summarising the main features of the team's initial report and the phase 2 work, which will take place between now and the end of the year, is being placed in the Library of the House. As the paper indicates, this further work will result in a detailed report which will form the basis of full consultation.

CULTURE, MEDIA AND SPORT

  Foot and Mouth
  Mr. Borrow
  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 Committee's report "Tourism—the Hidden Giant—and Foot and Mouth". [8602]

  Dr. Howells
  The Department's response to the Culture, Media and Sport Committee's report on "Tourism—the Hidden Giant—and Foot and Mouth" has been laid before both Houses today.

  National Lottery
  Mr. Watson
  To ask the Secretary of State for Culture, Media and Sport what plans she has to publish a response to the First report from the Culture, Media and Sport Select Committee, Session 2000–01, on the operation of the national lottery. [8826]

  Mr. Caborn
  The Department's response to the Culture, Media and Sport Committee's report on the operation of the national lottery has been laid before both Houses today.

  Departmental Spending
  Pete Wishart
  To ask the Secretary of State for Culture, Media and Sport what the total amount of spending by her Department was in each nation and region of the UK, in the last year for which figures are available; what proportion of her Department's total spending this constitutes; and if she will make a statement. [6779]

  Tessa Jowell
  I refer the hon. Member to the answer given by my right hon. Friend the Chief Secretary to the Treasury to the hon. Member for Banff and Buchan (Mr. Salmond) on 15 October 2001,Official Report, columns 454–56W.

TRADE AND INDUSTRY

  Departmental Spending
  Pete Wishart
  To ask the Secretary of State for Trade and Industry what the total expenditure was on(a) advertising, (b) polling, (c) focus groups, (d) design consultants, (e) caterers, (f) production of departmental publications and g photographs/photographers by her Department for each year since 1995 in (i) cash and (ii) real terms; what was (A) the annual percentage increase in spending on each category and (B) spending on each category as a percentage of the total departmental running costs; and if she will make a statement. [6882]

  Ms Hewitt
  Excluding its agencies and non-departmental public bodies, the total cash expenditure on publishing, preparation and production of those official publications, which have been notified to the Department's publications unit by individual budget holders, is as follows:

  Year

  Cash (£)

  Real (1995 prices) (£)

  Per cent. increase in real terms from previous year

  Spending as percent. of total running costs

  1995–96

  5,463,340

  5,463,340

  n/a

  1.2

  1996–97

  5,176,892

  5,011,512

  –8.3

  1.2

  1997–98

  4,886,238

  4,596,649

  –8.3

  1.2

  1998–99

  7,208,674

  6,583,264

  43.2

  1.7

  1999–2000

  4,552,019

  4,064,303

  –38.3

  1.0

  2000–01

  5,298,296

  4,647,628

  14.4

  1.1

  These figures exclude the costs of publications produced for internal use. Where the Department makes use of a private sector publisher, the publishing, printing and design costs are generally met by the publisher as part of its acceptance of the risks of publication.

  The Department does not routinely collect the other information requested at the required level of detail, and to provide it would entail disproportionate cost.

TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS

  Vehicle Accidents
  Mr. Burns
  To ask the Secretary of State for Transport, Local Government and the Regions how many people in the last three years for which figures are available, in(a) mid-Essex and (b) the county of Essex (i) have died and (ii) have been injured as a result of vehicle accidents. [7168]

  Mr. Jamieson
  [holding answer 15 October 2001]: Deaths and injuries on public roads in accidents which involved a road vehicle are shown in the table for the County of Essex and for the areas covered by the local authorities Braintree District and Chelmsford Borough.
  1226W

  Braintree District & Chelmsford Borough

  County of Essex

  Killed

  Injured

  Killed

  Injured

  1998

  15

  1,558

  84

  9,052

  1999

  23

  1,646

  112

  9,123

  2000

  20

  1,555

  86

  9,462

  Planning Appeals
  Mr. Hoban
  To ask the Secretary of State for Transport, Local Government and the Regions (1) how many appeals against planning decisions made by Fareham borough council were outstanding at(a) 31 December 1998, (b) 31 December 1999, (c) 31 December 2000 and (d) 30 June 2001; [6270]

  (2) how many appeals there were in respect of planning applications made in the area covered by Fareham borough council in (a) 1998, (b) 1999 and (c) 2000. [6269]

  Ms Keeble
  [holding answer 15 October 2001]: The provision of information on planning appeals is the responsibility of the Planning Inspectorate. I have asked the Inspectorate's Chief Executive, Mr. Chris Shepley, to write to the hon. Member.

  Letter from C. J. Shepley to Mr. Mark Hoban, dated 17 October 2001:
  The Secretary of State has asked me to reply to your Questions about planning appeals in the Fareham Borough Council area.
  The number of planning appeals received and in hand at the end of each year were:

  Year

  Appeals received

  Appeals in hand at end of period

  1998

  48

  16

  1999

  47

  13

  2000

  48

  21

  There were 16 appeals in hand at 30 June 2001.

  National Homelessness Strategy
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1)(a) on what date he issued the consultation documents on the national homelessness strategy and (b) on what date those organisations that he has specifically invited to comment on the consultation were first alerted to the fact that the consultation was to take place; [7825]

  (2) if he will list the organisations that he has specifically invited to comment on the consultation document, national homelessness strategy. [7824]

  Ms Keeble
  My Department placed a consultation document inviting views on a national homelessness strategy on its internet site on 21 September 2001. The Department has established a Stakeholder Group to assist
  1227W
  in the development of the national homelessness strategy. The organisations represented on the Group are as follows:

  The Association for London Government

  The British Property Federation

  The Chartered Institute of Housing

  The Council of Mortgage Lenders

  The Greater London Authority

  Havant borough council

  The Housing Corporation

  The Housing Inspectorate

  The Local Government Association

  Manchester city council

  The National Homeless Alliance

  The National Housing Federation

  Portsmouth city council

  Shelter

  The Small Landlords Association.

  Most of these organisations were invited to participate on or shortly after 12 September 2001.

  New Roads and Street Works Act
  Dr. Cable
  To ask the Secretary of State for Transport, Local Government and the Regions how many local authorities have fined utility companies using powers under section 74 of the New Roads and Street Works Act 1991. [7508)

  Ms Keeble
  110 local authorities have now informed the Government that they are or will be making use of the powers to levy a daily charge on utilities where the latter's works overrun an agreed deadline. While we do not yet have comprehensive details as to exactly how many authorities have already imposed charges, the Department's consultants, Halcrow, will be gathering such information for the Government as part of the study they are conducting into the effect of the section 74 powers.

  Dr. Cable
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made of the operation of the powers given through section 74 of the New Roads and Street Works Act 1991; and if he will make a statement.[7509]

  Ms Keeble
  Halcrow have been appointed by the Government to carry out an assessment of the effect of the section 74 powers. They will be providing me with an interim report by the end of this year. A further report, covering the first 12 months of operation of the new powers will follow in spring 2002.

  Region

  Project description

  Length (km)

  Properties affected per km

  2001–02

  South East

  Al2 Hatfield Peverel

  1.5

  158

  South East

  M11 J6–7 NB

  7

  11

  South East

  M27 J2–4

  9

  125

  South East

  M25 J16–17 marker post 104/9 to 110/4

  6.0

  32

  South West

  M5 J26–27 marker post 227/2 to 229/8

  2.6

  5

  Road Works (Local Authority Charges)
  Dr. Cable
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment has been made of the experiment of allowing local authorities to charge utility companies a daily amount for digging up the road; and if he will make a statement. [7510]

  Ms Keeble
  On 14 August, my right hon. Friend the Minister for Transport launched a consultation on the details of two pilot schemes to be launched in the London borough of Camden and in Middlesbrough. As part of the pilots, the two councils will be able to levy a daily charge (or "lane rental" as it is often called) on utilities carrying out works on the highway. The pilots are expected to begin in January 2002, and we will be monitoring closely the effect they have on the disruption caused to road users by utilities' works in the two areas.

  "Lane Rental" Schemes
  Mr. Mark Field
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has to pilot projects in local authorities to test the effectiveness of allowing them to levy a lane rental charge on companies undertaking street works. [8517]

  Ms Keeble
  My Department has recently concluded a period of consultation on draft regulations to permit pilot "lane rental" schemes in Middlesbrough and the London borough of Camden under section 74A of the New Roads and Street Works Act 1991. We intend laying revised regulations before the House later this autumn and envisage that the pilots will begin operation early in 2002.

  Road Noise
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Transport, Local Government and the Regions what progress has been made on surfacing concrete roads with quieter material. [8127]

  Mr. Jamieson
  Having consulted with English local highway authorities and other interested bodies, we have established criteria for prioritising the surfacing of concrete trunk roads with quieter materials. These criteria are:

  1. that wherever possible the application of quieter surfaces will fit in with normal maintenance needs;

  2. that priority will be given to those sites where treatment would benefit the greatest number of people.

  3. that the works will be carried out in such a way as to minimise disruption to general public and users of network;

  4. that priority will be given to roads, opened since June 1988, where actual noise levels have turned out to be significantly higher than predicted at the time of the Public Inquiry.

  I am pleased to be able to announce a list of schemes that satisfy the first criterion and are planned for the following three years (2002–03, 2003–04 and 2001–05). They are listed together with those that are planned for 2001–02.
  1229W

  Region

  Project description

  Length (km)

  Properties affected per km

  Midlands

  M42 J9–10 northbound carriageway

  6.8

  174

  Midlands

  A1 Winthorpe to North Muskham

  4.1

  37

  Midlands

  A1 Long Bennington Bypass

  3.5

  41

  2002–03 to 2004–05

  Midlands

  A1 Winthorpe—Coddington

  3

  93

  Midlands

  A1 Coddington—Balderton

  3

  37

  Midlands

  A1 Carlton—North Muskham

  5.3

  12

  Midlands

  A46 Widmerpool to Willoughby

  4

  1

  Midlands

  A46 Willoughby to Six Hills

  4

  0

  Midlands

  M42 J2–3 Crack and Seat contract 1

  3.8

  6

  Midlands

  M42 J9–10

  11.5

  28

  Midlands

  M69 Con 2 J21 to flexible section

  10

  8

  Northern

  A180 Harbrough—Stallingborough

  4

  11

  Northern

  A180 Great Coates—Pyewipe

  3.5

  15

  Northern

  M62 Gilberdyke—Newport

  3.8

  1

  Northern

  M180 Sandtoft J2

  3.8

  0

  Northern

  M180 J2—Beltoft

  3.8

  2

  South East

  Al2 Brentwood 2

  4.4

  87

  South East

  Al2 Witham

  7

  117

  South East

  M25 J26–27 Contract 2 (MP153/1–158/6)

  4.4

  44

  South East

  A47 East Dereham Bypass (2000–01)

  3.2

  205

  South East

  M20 J10–11

  6.5

  58

  South East

  M 11 J9–8 Phase 1

  7

  27

  South East

  M11 J6–7 SB

  7

  11

  South East

  M20 J11–13 (MP 100/1–109/2)

  6

  156

  South West

  M5 J27 South to Willand

  5

  51

  South West

  M5 J26–27 NB and SB (MP 217/B–220/0)

  4.4

  5

  South West

  M5 J26–27 NB and SB (MP 220/0–223/6)

  3.6

  5

  South West

  M5 J26–27 NB and SB (MP 223/6 to 227/2)

  3.6

  5

  The Highways Agency is currently identifying additional schemes that satisfy the second and third criteria and could be added to this list. The agency has also identified 17 roads with concrete surfaces that have been opened since June 1988 and has instigated a programme of noise surveys to identify those that satify the fourth criterion. These roads are:

  M18 Junctions 5–6

  M20 Junctions 9–8

  M23 Junctions 10–Northbound Lane 1

  Al-M1 Link

  All Besthorpe-Wymondham Bypass

  A13 A1306 to M25 Junction 30

  A27 Chichester-Havant

  A30 Exeter-Honiton

  A34 Peartree-Weston

  A35 Tolpuddle/Puddletown

  A50 Doveridge Bypass

  A50 Derby Southern Bypass

  A50 Foston-Hatton-Hilton Bypass

  A52 Bottesford Bypass

  A249 (M2 to Iwade)

  A417/419 Cirencester and Latton Bypass

  A483 (B5445 to Welsh Boundary).

  Transport Grant (GLA)
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Transport, Local Government and the Regions how much transport grant he has allocated for the Greater London Authority for 2001–02.[8128]
  1230W
  Mr. Jamieson
  GLA transport grant is determined annually after consultation with the Mayor of London under section 101 of the GLA Act 1999. The Secretary of State has today redetermined the level of grant for 2001–02 at £714,388,000. This reflects additional monies paid to the Mayor in respect of his share of the costs relating to preparation for an east-west rail link across London, and other minor adjustments.

  Railtrack
  Lawrie Quinn
  To ask the Secretary of State for Transport, Local Government and the Regions if he will provide details of how his Department will provide financial assistance for Railtrack plc in administration. [8715]

  Mr. Byers
  Full details of the funding arrangements agreed with the administrators are in the Loan Agreement. Parliamentary approval for this new expenditure in the form of a voted loan (to be repaid when Railtrack plc moves out of administration) will be sought in a Supplementary Estimate for DTLR. Pending that approval, urgent expenditure estimated at £800 million will be met by repayable cash advances from the Contingencies Fund.

  Correspondence
  Andrew Mackinlay
  To ask the Secretary of State for Transport, Local Government and the Regions if he will publish the letter of 9 October from Vernon Hince, Acting General Secretary if RMT, to the Chief Executive of Strategic Rail Authority and the Chief Executive's reply. [8107]
  1231W
  Mr. Jamieson
  The publication of this correspondence is a matter for the individuals concerned and my hon. Friend may therefore wish to contact them direct.

EDUCATION AND SKILLS

  Sixth Form Education
  Mr. Bacon
  To ask the Secretary of State for Education and Skills what assessment she has made of the cost of administering the sixth form reforms. [6643]

  Mr. Ivan Lewis
  We have not made an assessment of those costs. There will be no change to funding for local education authority administrative costs. The Department funds the Learning and Skills Council for its administrative costs. We expect the LSC to deliver its new sixth form funding responsibilities within the overall administrative budget allocated to it. There is no separate element within that overall budget identified for work on school sixth forms.

  Specialist Schools
  Mr. Willis
  To ask the Secretary of State for Education and Skills how many schools bidding for specialist status under the specialist schools programme were supported by donations from the Technology Colleges Trust as part of the qualifying sponsorship criteria in the years(a) 1999–2000 and (b) 2000–01. [7689]

  Mr. Timms
  The Technology Colleges Trust does not itself make donations to applicant schools but raises funds from other donors. Detailed information on the sponsorship included in school applications for specialist status in 1999–2000 and 2000–01 is not readily available and can be provided only at disproportionate cost. However, we do have an analysis of applications for Arts, Technology and Language College status in June and October 1999 and in March 2000, which shows that 37 per cent. of applicants included sponsorship arranged through the Technology Colleges Trust.

  Mr. Willis
  To ask the Secretary of State for Education and Skills how much the planned expansion of the specialist school programme depends on the ability of the Technology Colleges Trust to support financially schools that are unable to find some or all of the required sponsorship. [7690]

  Mr. Timms
  The Technology Colleges Trust seeks at national level to raise sponsorship that can be allocated to schools intending to apply for specialist schools designation. Many specialist school applications include elements of sponsorship raised in this way. This is one source of sponsorship and has been part of the initiative since it began in 1994 and we expect it to remain so. Funds raised at national level help to ensure that schools are not excluded from the programme because of particular local difficulties in raising sponsorship.

  Mr. Willis
  To ask the Secretary of State for Education and Skills how many schools have failed to achieve specialist school status through their inability to raise the level of sponsorship that is required. [7691]

  Mr. Timms
  Our network of 685 specialist schools shows that applicant schools across the country, including those from rural and inner city areas, have raised the 1232W
  sponsorship required, but we are aware that some schools find this more difficult than others. It would not be practicable to make an estimate of the number of schools that have been unable to raise funds but we have taken steps to ensure all schools have a reasonable opportunity to do so. In 1999, the sponsorship requirement was halved to £50,000 and my Department grant aids the Technology Colleges and Youth Sport Trusts to provide advice to schools about raising sponsorship and raise funds themselves to support applicant schools. We will keep the sponsorship criteria under review.

  Mr. Willis
  To ask the Secretary of State for Education and Skills what plans she has to change the sponsorship requirement for schools wishing to join the specialist schools programme. [7692]

  Mr. Timms
  There are no current plans to relax or remove the sponsorship requirement except that we are considering the position in relation to very small secondary schools. We will keep the situation under review.

  National Academy for Gifted and Talented Youth
  Mr. Brady
  To ask the Secretary of State for Education and Skills if she will fund places at the National Academy for Gifted and Talented Youth to the most academically able 5 per cent. of the school population whether or not parents can afford to pay fees. [7494]

  Mr. Timms
  [holding answer 15 October 2001]: The tender documentation for the Academy says that tenderers should
  "consider the contribution that might be made to income through fees and charges associated with its services, ensuring that these do not create a disincentive to participation on the part of those from relatively disadvantaged backgrounds".
  The level and use of Government funding will be agreed when we have identified the winning tender.

  Local Education Authorities
  Mr. Luff
  To ask the Secretary of State for Education and Skills what resources she plans to provide to local education authorities, with particular reference to Worcestershire, prior to the introduction of a new system for setting standard spending assessments for education for the financial year 2002–03; and if she will make a statement. [8037]

  Mr. Timms
  In 2002–03 the overall increase in Education Standard Spending will be over £1.3 billion or 5.7 per cent.; direct grants to schools will increase by 2.75 per cent.; and Standards Fund grant will increase by £85.6 million. We are currently working up proposals for a reformed system of school and LEA funding for introduction in 2003–04.

HOME DEPARTMENT

  Civil Defence Guidance
  Mr. Brady
  To ask the Secretary of State for the Home Department (1) what civil defence guidance has been issued to schools since 11 September; [7501]
  1233W
  (2) what plans he has to issue updated civil defence guidance to parents of school age children. [7500]

  Mr. Ivan Lewis
  [holding answer 15 October 2001]: I have been asked to reply.

  Existing Government guidance to local authorities and others on civil defence continues to apply. My Department will shortly issue further guidance for local education authorities to disseminate to schools and others on a range of issues resulting from the terrorist attacks in the USA and subsequent events.

  Overseas Domestic Workers
  Gillian Merron
  To ask the Secretary of State for the Home Department when he will change the arrangements for overseas domestic workers who accompany their employers to the United Kingdom. [8743]

  Angela Eagle
  There is a longstanding concession, outside the Immigration Rules, enabling overseas employers coming to the United Kingdom to bring their domestic workers with them, if they need to do so.

  Changes to the conditions under which overseas domestic workers could be admitted to the United Kingdom were laid before the House on 23 July 1998. The primary objective of those changes was to deal with concerns about reports of abuse suffered by such workers. Responding to those concerns, while minimising scope for immigration abuse, presented a difficult balance. We therefore undertook at the time to review the changes in the light of operational experience.

  Following this review, a number of changes are being made with effect from today, which we shall include in the Immigration Rules at a suitable opportunity.

  In response to concerns raised by the employers of domestic workers, the level of duties needing to be performed by the worker will no longer have to exceed those set down in the International Labour Organisation's International Standard Classification of Occupations.

  We remain concerned at reports of abuse of domestic workers accompanying their employers to the United Kingdom and have discussed with Kalayaan, the organisation that represents overseas domestic workers, how this can be prevented. We have decided to continue allowing domestic workers to change employer but will be asking any that do so to inform the Immigration and Nationality Directorate in writing, outlining their reasons for doing so, at the earliest opportunity. This will enable officials to monitor any possible abuse of the concession by either individuals or employers and, if detected, liaise with other departments to ascertain whether any action could be taken.

  We are also clarifying what is meant in the concession by the meaning of 'household'. Some United Kingdom-based employers have long argued that, although they reside here, they maintain a household abroad and therefore domestic workers currently working in their overseas residence should qualify under this concession. We will make clear that a domestic worker wishing to come to the United Kingdom is expected to have been carrying out domestic duties under the same roof as their employer for 12 months before applying for entry clearance, or in a household that the employer uses for himself on a regular basis and where there is clear
  1234W
  evidence of a connection between employer and employee. The domestic worker will also be expected to travel to the United Kingdom with their employer, their employer's spouse or minor child.

  This definition should make it clear that the concession is not intended to allow employers who are resident here to recruit domestic workers from overseas. It will also benefit those employers who regularly divide their time between two houses.

  Drugs
  Paul Flynn
  To ask the Secretary of State for the Home Department what his estimate is of the levels of repeat offending among drug misusing offenders in each year since 1997. [5888]

  Mr. Denham
  The New English and Welsh Arrestee Drug Abuse Monitoring (NEW-ADAM) research programme provides estimates of repeat offending drug misusing offenders for the purpose of tracking the drugs strategy. Repeat offending drug misusing offenders are defined as the proportion of arrestees that are using heroin and/or cocaine/crack at least once a week and who have offended at least twice a month in the last 12 months. As yet estimates are available only for the financial year 1999–2000. The proportion of arrestees falling within the definition of repeat offending drug misusing offenders category is 15 per cent. Please note that this only represents the interim baseline result. A summary of the full baseline data will be available in due course.

  Paul Flynn
  To ask the Secretary of State for the Home Department what assessment he has made of the extent of access to drugs among five to 16-year-olds in each year since 1997. [5762]

  Mr. Denham
  The survey of smoking, drinking and drug use among school children aged 11 to 15 years includes a question on whether children have been offered drugs.

  Information on the proportion of 11 to 15-year-olds in England who were offered drugs is presented in the table. Information regarding younger children is not available centrally.

  The data requested are available only for the years 1998–2000.

  Percentage of 11 to 15 year olds in England who have been offered drugs

  Year

  Percentage

  1998

  34

  1999

  35

  2000

  35

  Bases: 1998 = 4,751; 1999 = 8,795; 2000 = 7,089

  Sources

  Goddard, E. and Higgins, V. (1999) "Drug use, smoking and drinking among young teenagers in 1998".

  London: The Stationery Office.

  Goddard, E. and Higgins, V. (2000) "Drug use, smoking and drinking among young teenagers in 1999".

  London: The Stationery Office.

  Department of Health statistical Press Notice July 2001. "Smoking, drinking and drug use among young people in England in 2000".

  Prison Service
  Simon Hughes
  To ask the Secretary of State for the Home Department what estimate he has made of the percentage of the Prison Service estate which will be privately managed by 2005; and if he will make a statement. [5104]

  Beverley Hughes
  [holding answer 19 July 2001]: The estimated percentage is 8 per cent.; this represents 11 prisons out of a total of 138.

  Asylum Seekers
  Mr. Rosindell
  To ask the Secretary of State for the Home Department what representations he has received about the voucher support system for asylum seekers; and if he will make a statement. [6281]

  Angela Eagle
  We received many representations regarding the voucher support system and will make an announcement in due course.

  Mother and Baby Units
  Mr. Allen
  To ask the Secretary of State for the Home Department (1) how many women have applied for admission to a prison mother and baby unit on reception to prison; [7941]

  (2) how many women have been refused admission to a prison mother and baby unit in the last two years; and if he will make a statement. [7937]

  Beverley Hughes
  The information requested is not held centrally. However, computer systems have recently been installed in each of the four mother and baby units and will record that type of information and transmit it to a central point. The staff concerned are being trained in its use and some inputting of new cases has begun.

  Fire Safety (Prisons)
  Mr. Boswell
  To ask the Secretary of State for the Home Department if he will make a statement on fire safety in prisons. [7399]

  Beverley Hughes
  Fire safety in prisons is the responsibility of the individual prison governor. Prison governors are provided with guidance on the measures to be taken regarding fire safety in the form of written advice contained in the Prison Service publication "Fire Standards in Prison Establishments", copies of which are in the Library. Further advice is provided by fire safety qualified staff of the Prison Service Fire Safety Section.

  Prison premises are exempt from the requirement to have a fire certificate under the Fire Precautions Act 1971 but are subject to the requirements of the Fire Precautions (Workplace) Regulations 1997 as amended 1999. In state prisons these regulations are enforced by officers of The Crown Premises Inspection Group of Her Majesty's Fire Service Inspectorate. In private prisons the regulations are enforced by the local fire authority.

  Information relating to Scotland is a matter for the Scottish Executive and information relating to Northern Ireland a matter for my right hon. Friend the Secretary of State for Northern Ireland.

  Al Muhijiroon
  Mr. Dismore
  To ask the Secretary of State for the Home Department (1) what action he proposes to take concerning recent statements issued by Al Muhijiroon members(a) Shah Jalal Hussain, (b) Omar Brooks, (c) Abu Yahya and (d) Zahir Khan; [7640]

  (2) if he will investigate the links between Abu Hamza and the Aden Abyan Islamic Army; and if he will make a statement; [7638]

  (3) if he will make a statement concerning the activities of the Takfir wal-Hijra organisation at the North London Central Mosque; and if he will make a statement; [7637]

  (4) if he will investigate the links between Abu Hamza and Rachid Ramda, awaiting extradition to France since 1995; and if he will make a statement; [7639]

  (5) if he will investigate the links between Sakina Security Services Ltd., Al Muhijiroon and Supporters of Sharia; and if he will make a statement; [7572]

  (6) if he will investigate the nature of training courses offered at North London Central Mosque, Finsbury Park; and if he will make a statement [7542]

  (7) if he will make a statement concerning the activities of Yasser-Al-Siri; [7634]

  (8) if he will make a statement on the activities of Supporters of Sharia since 11 September; [7565]

  (9) if he will investigate whether Al Muhijiroon members have acted in contravention of the proscription of Hamas, Hezbollah or Islamic Jihad; and if he will make a statement; [7631]

  (10) if he will investigate the links between Al Muhijiroon and Hamas and Hezbollah; and if he will make a statement; [7544]

  (11) if he will make a statement concerning the statements issued by and actions of Abu Hamza since 11 September; [7543]

  (12) if he will make a statement on investigations into the activities of Al Muhijiroon; [7939]

  (13) what assessment he has made of recent statements issued on behalf of Sakina Security Services Ltd.; and if he will make a statement; [7547]

  (14) what action he proposes to take concerning the fatwa issued by Omar Bakri Mohammed against the President of Pakistan; and if he will make a statement; [7671]

  (15) if he will investigate the links between Abu Hamza and Ahmed Begal, recently arrested in Dubai; and if he will make a statement; [7636]

  (16) if he will make a statement about the activities of Al Muhijiroon since 11 September; [7568]

  (17) if he will investigate the activities of Muhammed Jamed with reference to Sakina Security and Al Muhijiroon; and if he will make a statement. [7632]

  Mr. Blunkett
  I have been in close touch with the relevant policing and anti-terrorist units, and with the Attorney-General, in tracking the work undertaken in surveilling, monitoring and evaluating evidence which might be used in any prosecution. As my hon. Friend
  1237W
  knows, the detailed operational functions lie with the police and intelligence services, and decisions on prosecutions with the Crown Prosecution Service. We have made it clear that those who step over the line will be prosecuted.

  Islamic Fundamentalism (Recruitment)
  Mr. Dismore
  To ask the Secretary of State for the Home Department (1) what action he proposes to take to restrict the activities of those involved in recruiting British citizens for paramilitary training(a) in the UK and (b) overseas on behalf of Islamic fundamentalist organisations; and if he will make a statement; [7437]

  (2) if he will make a statement on the activities of Al Muhijiroon and Supporters of Sharia in recruiting for training which is linked to terrorism; [7633]

  (3) what action he plans to take concerning the statement by Omar Bakri Mohammed of 30 May 2000 in al Sharq al Awsat, on British passport holders being sent on Al Muhijiroon guerrilla training courses in the USA; [7670]

  (4) what assessment he has made of the number of British citizens who (a) have recently undergone and (b) are undergoing (i) military and (ii) paramilitary training overseas, organised by Islamic fundamentalist groups; and if he will make a statement; [7438]

  (5) if he will make a statement concerning the activities of Abu Yahya in respect of recruitment for military training camps in Kashmir. [7555]

  Mr. Blunkett
  I am aware of the allegations relating to the training of United Kingdom nationals overseas. Under Section 54 (1) and (2) of the Terrorism Act 2000, it is an offence 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, and the police and intelligence services are fully aware of this.

  Terrorism Act
  Mr. Dismore
  To ask the Secretary of State for the Home Department (1) if he will assess the evidence for proscribing Supporters of Sharia under the Terrorism Act 2000; and if he will make a statement; [7553]

  (2) if he will assess the evidence with a view to proscribing Al Muhijiroon under the Terrorism Act 2000; and if he will make a statement. [7545]

  Mr. Blunkett
  Schedule 2 of the Terrorism Act 2000 applies only to those terrorist organisations which are 'concerned in terrorism' as defined under Section 3 of the Act. Decisions to proscribe and deproscribe are and will continue to be taken only after the most careful consideration and on the basis of the best possible security and other appropriate advice. Any evidence which my hon. Friend feels would be of assistance in aiding the process should be supplied to my Department immediately.

  Sakina Security Services
  Mr. Dismore
  To ask the Secretary of State for the Home Department what discussions he has had with the US authorities concerning Sakina Security Services; and if he will make a statement. [7635]

  Mr. Blunkett
  None. However, the police, who are responsible for the investigation of any alleged illegal activity, have been meeting regularly with their United States counterparts to discuss a range of issues including those companies or organisations where concerns have been raised.

  Refugees
  Miss McIntosh
  To ask the Secretary of State for the Home Department how many refugees have sought to enter the UK from(a) Iran, (b) Iraq and (c) Afghanistan since January; and if he will make a statement.[8054]

  Angela Eagle
  It is not possible to provide information on how many refugees have sought to enter the United Kingdom in any given period, because some refugees arrive clandestinely and subsequently claim asylum in-country rather than claiming on arrival at United Kingdom ports, and because not all attempts to enter the United Kingdom are successful. Information on the numbers of applications for asylum to the United Kingdom in 2001 from nationals of Iran, Iraq and Afghanistan is provided in the table.

  Applications for asylum to the UK from nationals of
  Afghanistan, Iran and Iraq, by location where made, January-July 2001

  Port

  In-country

  Total

  Afghanistan

  January

  185

  325

  510

  February

  310

  305

  615

  March

  470

  210

  680

  April

  500

  200

  700

  May

  560

  335

  900

  June

  655

  255

  910

  July

  550

  260

  810

  Total

  3,230

  1,890

  5,120

  Iran

  January

  155

  430

  585

  February

  105

  255

  355

  March

  110

  180

  295

  April

  100

  195

  295

  May

  70

  135

  205

  June

  65

  130

  200

  July

  105

  135

  245

  Total

  715

  1,460

  2,175

  Iraq

  January

  185

  570

  755

  February

  230

  475

  710

  March

  215

  215

  425

  April

  155

  140

  295

  May

  175

  160

  340

  June

  205

  240

  440

  July

  340

  240

  580

  Total

  1,500

  2,045

  3,545

  Note

  All data are provisional, exclude dependants, and are rounded to nearest 5.

FOREIGN AND COMMONWEALTH AFFAIRS

  Departmental Properties
  Angus Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will estimate the total annual running costs for buildings used, owned or rented by his Department for each nation and region of the UK, and estimate the average cost per sq m for properties used by his Department as a whole, and by region and nation of the UK. [6819]

  Mr. MacShane
  Within the UK the FCO currently occupies, or partly occupies, seven properties, all located in England. The total internal letting area for these is 90,000 sq m. Total running costs (including the capital charge) in 2000–01 were £22.4 million. Average cost per sq m was £249.

  Overseas British Prisoners
  Mr. Alan Duncan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list those British citizens held in foreign jails for which consular support has been requested, by(a) name, (b) country of imprisonment and c date of imprisonment. [7827]

  Mr. Bradshaw
  As of 1 October we were aware of 3,605 British nationals in prison overseas. Around 40 per cent. of these prisoners were convicted on drugs related offences.

  The 3,605 prisoners are serving their sentences in 126 different countries. The 10 countries with the most British nationals serving sentences are:

  USA: 674

  Spain: 421

  France: 382

  Germany: 220

  Australia: 152

  Thailand: 31

  Jamaica: 129

  Belgium: 113

  Ireland: 140

  Venezuela: 35.

  To list the British citizens and offences for which each prisoner was convicted would incur disproportionate costs and breach consular confidentiality.

  The welfare of British nationals in prison overseas is one of our key concerns. Although we cannot get prisoners released, we do whatever we can to ensure their human rights are protected. We work closely with NGOs and human rights organisations to ensure that their rights are respected.

HEALTH

  Correspondence
  Virginia Bottomley
  To ask the Secretary of State for Health when he plans to respond to the letter from the hon. Member for South-West Surrey concerning variations in levels of revenue funding for hospices. [7559]

  Mr. Hutton
  A reply to the right hon. Member was sent on 10 October.

  Beta Interferon
  Vernon Coaker
  To ask the Secretary of State for Health what negotiations he plans to have with drug companies on the cost of beta interferon. [7427]

  Mr. Hutton
  [holding answer 15 October 2001]: We have met three companies in the light of the points made in the National Institute for Clinical Excellence's provisional appraisal determination and are planning further discussions.

  Waiting Lists
  Mr. Evans
  To ask the Secretary of State for Health how many people have been waiting (1) over six months for an appointment in hospitals within Lancashire; [7699]

  (2) over 12 months for an operation in hospitals within the north-west. [7746]

  Mr. Hutton
  At the end of August 2001, 1,076 patients had been waiting more than 26 weeks for an out-patient appointment after being referred by a general practitioner to a hospital trust in Lancashire. This represents a 41.3 per cent. reduction compared with August 2000. Plans are in place to eliminate all over 26-week waits by the end of March 2002.

  The number of patients waiting more than 12 months for in-patient or day case treatment in the north-west, at the end of August, was 6,369. This is 20 per cent. fewer than the previous August figure.

  Overseas Treatment
  Mr. Frank Field
  To ask the Secretary of State for Health (1) what information or guidance he has issued during the past two months to NHS trust chairmen on(a) the purchasing of health care from other EU countries and (b) employing staff from other EU countries on short-term contracts; [7107]

  (2) what contracts (a) his Department and (b) NHS (i) trusts and (ii) agencies have signed during the past month with an EU-based supplier of health care offering to treat British patients abroad, giving details in each case; [7106]

  (3) what negotiations he has had during the past two months with suppliers of health care in other EU countries offering to treat patients abroad.[7108]

  Mr. Milburn
  holding answer 15 October 2001]: On 12 July the European Court of Justice ruled on joined cases C-157/99 Geraets-Smits and Peerbooms and case C-368/98 Vanbraekel that some hospital services may fall within EC single market rules if they are provided for remuneration.

  Following this ruling, the Government announced that National Health Service commissioners will be able to commission care for NHS patients from providers in other member states of the European Union, as part of their wider efforts to reduce waiting times.

  NHS chief executives were alerted to the announcement on 30 August through the Chief Executive's Bulletin issued by the Department of Health.
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  I have not had any negotiations with suppliers of health care in other EU countries offering to treat NHS patients. Officials in the Department have met several organisations which provide or arrange treatment in other member states of the European Union.

  The decision to treat NHS patients in mainland Europe will be made locally as part of normal NHS commissioning arrangements. The Department has not signed any contracts and is not aware of any contracts that have been signed by primary care trusts or health authorities. The Department is working closely with NHS managers and clinicians in Portsmouth, East Kent, West Sussex and East Surrey to offer patients the option of going to other European countries for procedures. Lessons learned from these areas on the legal, clinical and quality issues involved in sending NHS patients abroad for treatment will inform guidance, which will be sent out to the service later this year.

  The recruitment of staff from the EU is an important part of the Department's recruitment and retention strategy and we are currently undertaking a range of initiatives, including the recruitment of doctors and nurses from Spain and doctors through our global recruitment campaign. A Code of Practice on International Recruitment was launched on 12 October which sets out for the NHS guidelines on the ethical and effective recruitment of staff from abroad.

  Radiotherapy
  Tim Loughton
  To ask the Secretary of State for Health how many hospital trusts in England have received new radiotherapy equipment in the last two years paid for predominantly out of public funds. [7593]

  Mr. Hutton
  [holding answer 15 October 2001]: Investment through the New Opportunities Fund and the NHS Plan will provide public funds for 102 linear accelerators for treating cancer. In the last two years 30 linear accelerators have been delivered to 20 National Health Service trusts and are expected to be treating patients by the end of the year.

  In addition as part of the planned investment announced in this period, public funding has been allocated for radiotherapy treatment planning computers and simulation equipment to support these. By 2004 all of this radiotherapy equipment will be in place. In total we expect 41 of the 48 hospitals delivering radiotherapy in England to have received equipment through central funding.

  Tim Loughton
  To ask the Secretary of State for Health what investment has taken place in radiotherapy equipment in the NHS in each of the last four years; and what percentage of this was funded from NHS rather than voluntary sector sources. [7592]

  Mr. Hutton
  [holding answer 15 October 2001]: Investment in radiotherapy equipment by the National Health Service in the last four years will have come from a number of sources and will not always have been made through central purchasing channels. Radiotherapy equipment may include linear accelerators, remote afterloading equipment, superficial treatment machines,
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  and treatment planning computers and simulation equipment. Provision has been through traditional capital purchasing and through leasing arrangements.

  New Opportunities Fund funding of £44 million has been allocated to radiotherapy equipment over this period and further funding will be made available centrally for linear accelerators, simulation equipment and treatment planning computers, as announced in the NHS Plan.

  Combined Heat and Power
  Tim Loughton
  To ask the Secretary of State for Health how many combined heat and power projects have been installed in NHS properties since 1997. [7615]

  Mr. Hutton
  [holding answer 15 October 2001]: The information requested is not collected centrally.

  The Department it supports the Government's commitment to reduce greenhouse gas emissions as detailed in the current climate change programme, and in the Government's target for 10,000 megawatts of electricity (Mwe) installed combined heat and power (CHP) by the year 2010. Installing CHP in National Health Service premises is an effective means of achieving the energy/carbon efficiencies required as part of this agenda for action.

  Since 1990 the NHS has been working towards energy efficiency savings and successfully achieved the Government's previous target of a 20 per cent. reduction in energy use from 1990 to 2000. The new target is a 15 per cent. energy, 0.15 million tonnes carbon efficiency saving from a base year of March 2000 to March 2010. Ways of meeting this target will continue to include the introduction, where appropriate, of CHP plant.

  Heart Transplants
  Mr. McCabe
  To ask the Secretary of State for Health if he will place a copy of the Royal College of Surgeons' report into the effectiveness of heart transplant procedures in the Library. [7150]

  Mr. Hutton
  A copy of the Royal College of Surgeons of England's report entitled "The Report of the Working Party to Review Organ Transplantation", published in January 1999, will he placed in the Library.

  Health Expenditure
  Mr. Bercow
  To ask the Secretary of State for Health what figure he uses as the EU average expenditure on health to form the basis of his target of meeting this figure in the UK; and by when he expects to achieve that target. [7792]

  Mr. Hutton
  We aim to increase health expenditure in the United Kingdom up to the average of the countries of the European Union, which is around 8 per cent. of gross domestic product. By the end of the present spending review period (2003–04), we expect that total United Kingdom expenditure on health will have reached 7.7 per cent. of gross domestic product. Public sector spending beyond this period will be decided in future spending reviews.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Waste Plans
  Mr. Baron
  To ask the Secretary of State for Environment, Food and Rural Affairs for what reasons the inspector appointed by the Government to oversee the consultation exercise during the drawing up of the recent Essex waste plan forbade Essex county council from specifically excluding incinerators from the plan. [5196]

  Ms Keeble
  [holding answer 19 July 2001]: I have been asked to reply.

  The inspector did not forbid Essex county council from specifically excluding incinerators from the plan. The deposit draft plan itself, which was before the inspector at the inquiry, did not exclude incinerators. It set out a policy, W7K, which provided criteria for considering planning applications for incinerators, and at policy W8A it identified sites for major waste management facilities, which explicitly might include incinerators. In response to objections, the inspector recommended retention of these policies subject to modifications.

  In a schedule of proposed changes put to the inquiry by the county council, it was proposed to delete policy W7K. But this did not amount to excluding incinerators from the plan, as the relevant criteria were proposed to be transferred, with amendments, to policy W8A. The inspector recommended against such a change for reasons set out in his report, principally that it confused the criteria to be applied to proposed incinerators with those to be applied to major waste management sites, which might not necessarily be developed for incinerators.

  It would not in any case have been possible for the Inspector to have forbidden the county council for excluding incinerators. His role was to make recommendations to the county as to how they should respond to the objections made. It remained for the county council to decide whether or not to accept those recommendations.

  The reasons why the Inspector did not recommend the council to exclude incinerators from the plan as some objectors would have wished are set out in his report, especially paras 27.11–27.14 and 27.36–27.39. To get the full picture these paragraphs should be read in the context of other parts of the report, especially the remainder of part 27 and parts 5 and 34. In summary the main reasons are:
  Whatever the plan says, it cannot prevent planning applications for incinerators in Essex from being submitted. It is appropriate therefore that the plan should set out how the county council would respond to such applications. The deposit draft plan proposed to deal with this by stating criteria against which planning applications would be considered, as well as identifying sites for waste management facilities in general. The inspector supported this basic approach.
  It would in theory have been possible for the plan to state a presumption against any incinerators being permitted. But this would have to be justified by land use planning considerations and take account of advice about the relationship between planning and pollution control (report para 5.12). National policy in "Waste Strategy 2000" provides for a continuing role for energy from waste, including incinerators, as part of the waste hierarchy. There was no such presumption in the deposit draft plan and the Inspector supported the county council on this.
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  Attention is drawn to the modified versions of policies W7K and W8A which were recommended by the Inspector (report paras 27.49, last bullet, and 34.49, last bullet). The criteria recommended they address objectors' concerns about incineration and for these to be taken into account if planning applications for incinerators are submitted.

  The paragraphs of the Inspector's report are as follows:

  Extracts from Essex local plan report

  5.12 For example, at the inquiry there was more than once quoted to me the parliamentary answer given to Mr. Bob Russell, MP, that "A Way With Waste" creates no obligation to include incineration within waste development plans (doc 2588/PE/1, appendix 5) (and no doubt a similar point could be made with regard to "Waste Strategy 2000"). However I think that is not the point. Nobody can prevent planning applications being submitted for incinerators, and if the plan said nothing about them then it would not provide useful guidance. It would perhaps be entitled to state a presumption against incinerators being permitted, but if it did so this would have to be justified by land use planning considerations, and take account of advice about the relationship between planning and pollution control. I say more about that in part 27. The point here is that the plan should not, in my view, dictate to the WDAs and WCAs what their strategy should be, although it can constrain that strategy within land use planning principles.

  Should there be a policy on incineration?

  27.11 The first issue arises because in schedule 8 the WPAs propose to delete policy W7K and incorporate policy guidance on incineration into policy W8A. The consortium's objection is withdrawn subject to this. This change might be thought to delight many others who do not want to see any policy on incineration in the plan and who quoted in support of their case the parliamentary reply to Bob Russell MP that there is no obligation to include incineration in the plan (see para 5.12). But it seems to me that having no policy on the matter will not necessarily meet objectors' cases.
  27.12 There is no doubt that waste incineration is an issue in Essex and Southend. Private companies are interested in building incinerators, as evidenced by the three successful bids in the latest round of NFFO contracts (doc 2588/PE/1, appendix 3). They may decide to submit planning applications, and if the waste local plan provided no guidance as to how such applications would be dealt with, the resulting uncertainty would not be in anyone's interest. As regards household waste, the WDAs, having agreed interim contract strategies up to 2007, are in the process of deciding their strategy for post-2007. Through "Working Together", they have agreed with the WCAs a minimum recycling/composting target of 60 per cent. by 2007, but as I understand it they have not reached any decision to eliminate energy from waste incineration from their strategy. Paragraph 29 of PPG 10 advises that waste local plans should ensure an adequate planning framework for the provision of facilities by the waste management industry, and should carefully consider the environmental implications of all waste management proposals. For these reasons it would not be a reasonable option for the plan to ignore incineration.
  27.13 I accept that the proposed changes to policy W8A would still refer to incineration. But I do not consider that it would provide proper guidance. Firstly, this policy applies to the waste management sites identified in schedule 1. Planning applications for incinerators might be submitted on other sites, and there would be no policy basis in the plan for determining such applications. Secondly, the additions to policy W8A on incineration have no justification in the supporting text in chapter 8, and indeed, as objectors to this proposed change point out, include new matter on incineration being a last resort which is not justified anywhere in the plan. Thirdly, the supporting text to policy W7K is not proposed for deletion or amendment, yet if the policy were deleted this text would be left hanging in the air. Fourthly, all the other significant waste management processes, including landfill, have explicit policies applying to them. Simply to remove the

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  incineration policy and include amended parts of it in policy W8A is not therefore in my view an appropriate response to the objections.
  27.14 For these reasons I shall not recommend the deletion of policy W7K. In line with the scheme of chapter 7 of the plan for other waste processes, there should be a policy which provides clear guidance for responding to planning applications for incinerators. It is next necessary to consider the content of the policy. To address this, I shall examine in turn the matters included under the second issue listed above.

  Should the policy state a presumption against incinerators? If not, what constraints should be applied?

  27.36 It will be evident from my conclusions on the above issues that I do not consider that the plan should rule out incineration as a matter of principle. I also see no justification for introducing the phrase "as a last resort" proposed in schedule 8. It is not clear what this means: the question of practicable alternatives further up the waste hierarchy would be taken into account anyway under policy W3A. However clear guidance should be provided in policy W7K as to the matters that would be taken into account by the WPAs in dealing with any planning application.
  27.37 The definition of these matters follows from the foregoing discussion. Where requirements are common to other forms of waste management, they should be stated in policies W8A and W8B. They would then apply to incineration also, as would be made clear by inserting a cross-reference to those policies in policy W7K. The purpose of policy W7K is to introduce additional requirements specific to incineration, namely consideration of emissions to air or water (see para 27.22) and disposal of residues (see para 27.34). A further matter that I think is best expressed as a requirement is that incineration without energy recovery will not be permitted: but in response to objection from GOER this should be worded to enable an exception to be made in specialised cases. That would conform to para 7.37 of the supporting text, incorporating the modification recommended, which explains the meaning of that term.
  27.38 Policy W8B contains criteria for major waste development outside the locations identified in schedule 1. Provided an incinerator proposal met those requirements, I see no justification for precluding it solely on the grounds that it was not on an identified site. It might for example be a smaller scale project, or the location might be a suitable one even though it has not been foreseen in drafting the plan. This is the more so because later in this report I have recommended the deletion of some of the identified sites, and shown that there would be difficulties in accommodating a conventional incinerator at some of the others. It would impose an unfair burden on the remaining sites if the plan did not allow flexibility for alternative locations to come forward. My recommended wording therefore includes a reference to other locations subject to policy W8B, and I consider in part 35 how that policy should be worded. This would meet Mid Essex Gravel's objection. It is perhaps unlikely that an incinerator below 50,000 tpa capacity, to which policy W4B would apply, would be proposed, but to allow for future developments this possibility could be mentioned in supporting text.
  27.39 Lastly I pick up some of the other matters raised by objectors. The limited energy efficiency of a conventional incinerator, unless it includes a combined heat and power plant, is a factor that would be taken into account in assessing whether a proposed incinerator was the BPEO, under policy W3A. This factor might be improved by technical innovations. The life of an incinerator would be taken into account at planning application stage, and also, no doubt, by the WDAs when considering waste contracts. The University of Essex and others refer to new quasi-incineration techniques such as pyrolysis or gasification: there is nothing in the plan to preclude these, and insofar as they overcame the problems of conventional incinerators they would to that extent be favoured under the policy. The problems raised by Harlow council are all matters that would be addressed at the application stage under various policies of the plan; the issue of
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  EIA has been covered at part 9. The matters raised by waste industry companies, and also those raised by GOER and the Environment Agency, have already been dealt with.

  Policy W7K: delete text and substitute as follows:

  Proposals for incineration of waste will be permitted at the locations identified in schedule 1 (subject to compliance with the requirements of policy W8A) or at other locations (subject to the requirements of policy W8B), provided the following requirements are also met:
  incineration without energy recovery will not be permitted except in specialised cases;
  emissions to air and water from the process will not materially endanger human health or harm the environment. In deciding whether this requirement is met, the WPAs will assume that the necessary controls are exercised under Environmental Protection legislation and that the pollution control regime operates effectively, and will take into account whether the process proposed is the Best Practicable Environmental Option for the particular waste stream; and
  provision is made for the recycling or other management of all residues, including the means of disposal to landfill where that is the BPEO.

  Policy W8A: delete text and substitute as follows:

  Waste management facilities will be permitted at the locations shown in schedule 1 provided all of the following criteria, where relevant, art complied with:
  there is a need for the facility to manage waste arising in Essex and Southend (subject to policy W3C);
  the proposal represents the Best Practicable Environmental Option for the particular waste stream, having regard to any alternative options further up the waste hierarchy;
  the development complies with other relevant policies of this plan, including the policy/ies in chapter 7 for the type(s) of facility proposed;
  adequate road access is provided in accordance with policy W4E. Access by rail or water will be supported if practicable;
  buildings and structures are of a high standard of design, with landscaping and screening provided as necessary; and
  integrated schemes for recycling, composting, materials recovery and energy recovery from waste will he supported where this is shown to provide benefits in the management of waste which would not otherwise be obtained.

  Mr. Baron
  To ask the Secretary of State for Environment, Food and Rural Affairs what powers inspectors appointed to oversee the drawing up of county waste plans have to overrule decisions of the councils concerned. [5197]

  Ms Keeble
  [holding answer 19 July 2001]: I have been asked to reply.

  The role of a Local Plan Inspector is prescribed in the Town and Country Planning (Development Plan) (England) Regulations 1999 and set out more informally in the Green Book, "Local Plans and Unitary Development Plans: A Guide to Procedures". Essentially it is to hold the inquiry and report to the council with recommendations as to the action they should take with respect to each of the objections. The council must decide whether or not to accept the Inspector's recommendations. They may decide not to do so but must give their reasons for this. The council will normally propose modifications to the Plan in accordance with their decisions on the Inspector's recommendations, prior to adopting the Plan.

  Rural Payments Agency
  Mr. Ivan Henderson
  To ask the Secretary of State for Environment, Food and Rural Affairs what targets she has set for the Rural Payments Agency for 2001–02. [8746]

  Margaret Beckett
  I have set the Rural Payments Agency the following performance targets for 2001–02.

  Issues and Aims
  Operational Service Performance
  To process at least 98.5 per cent. of valid claims correctly and in doing so:
  To process at least 96.14 per cent. of IACS claims by value within the EU deadline.
  To process at least 98 per cent. of CAP claims within ministerial deadlines and all claims within the set EU Commission deadlines or in their absence 60 days.
  To carry out 100 per cent. on-the-spot inspections for CAP schemes in accordance with EU targets, subject to agreed derogations.
  To meet all targets set for customer service.
  Financial and control performance
  To operate within the resource and cash allocations in RPA's Request for Resources (RfR), as agreed with DEFRA.
  To agree and implement a comprehensive RPA Risk Management Plan by 31 March 2002.
  To implement procedures for the production of a statement of internal controls as part of the audited annual report and accounts for 2001–02.
  To obtain full paying Agency accreditation in from the Competent Authority from 16 October 2001.
  To ensure that disallowance within the control of RPA remains below 0.5 per cent. of the value of CAP payments made by the Agency.

  Fair, responsive quality services performance
  To develop and operate a procedure for handling complaints that will be transparent and efficient and compliant with best practice as identified by the Cabinet Office. RPA will also participate in any mechanism that is operated by the Department and the Devolved Administrations that provides an opportunity for independent evaluation of an appeal.
  To develop the use of the Industry Forum set up in August 2001 and by 31 March 2002, to establish additional further specialist sub-groups in support to enable close and effective communication with, and involvement of all RPA customers.
  To develop and implement a RPA Quality Strategy by 31 March 2002.
  Efficiency performance
  RPA Change Programme to deliver change programmes as identified in programme plan and in the Corporate Plan for 2001–02.
  To deliver key milestones of the RPA change programme, as agreed with the Regional Overview Board.
  To maintain/ensure business continuity and customer satisfaction during the RPA change programme.

  Policy advice
  To meet the needs of policy divisions in providing operational advice in support of CAP policy formation.

  Valuing staff
  To implement an action plan to remain accredited following the IiP review in February 2002 and the plan for the culture change programme.
  To continue the roll out of Diversity workshops with the intention to achieve 80 per cent. coverage of all management staff by 31 March 2002.

  Foot and Mouth
  David Maclean
  To ask the Secretary of State for Environment, Food and Rural Affairs how long foot and mouth disease can remain active in the digestive tract and faeces of(a) carrion crows and (b) foxes. [5255]

  Mr. Morley
  These species are not susceptible to infection by the foot and mouth disease virus. If they ingest the virus there is no true infection or colonisation of the digestive tract. If the virus is ingested, any remaining virus particles, which have survived the activities of digestion, will only persist in the gut for a day or two and will be excreted naturally. However, crows and foxes are not capable of excreting sufficient virus to infect one of the farm species.

  Miss McIntosh
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent representations she has received on the handling by her Department of the foot and mouth outbreak. [5436]

  Mr. Morley
  The Department has received representations from an extremely wide range of interested parties on all aspects of the foot and mouth outbreak. Since the start of the outbreak, we have regularly consulted a wide range of stakeholders and worked closely with them in the development of our disease control policies.

  David Maclean
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will bring forward specific proposals to assist the local parish council surrounding the Great Orton disposal site. [5548]

  Mr. Morley
  The Department has engaged consultants to prepare detailed restoration and aftercare proposals for the site. The final form of the proposal is nearing completion and in the very near future a copy of the formal proposals will be submitted for approval by the Cumbria county council. Part of this process will involve the county council consulting a number of statutory agencies, the local council and the local parish council for their views.

  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs what the reasons were for the decision to scrap the EpiMan data management and prediction system for controlling a major foot and mouth epidemic. [7727]

  Mr. Morley
  The EpiMan data management and prediction system was not scrapped. The modelling component (Interspread) for evaluating control measures and predicting the future course of the epidemic has been used extensively and almost on a daily basis. One scientific paper has been published describing its use during the early stages of the epidemic. The data management component was not used in full as it was designed to administer all tracings associated with Infected Premises and other control activities from a central disease control centre. The widespread geographical distribution of infection did not lend itself to such a central administration. Staff in DEFRA built on their experiences from dealing with the outbreak of classical swine fever and produced a generic disease control database, which has proved to be of great benefit.
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  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs what the estimated cost to the economy is of the foot and mouth disease outbreak to date. [7731]

  Mr. Morley
  I am very much aware that the outbreak is having a considerable impact on farming and a range of industries throughout the UK. However, it is not possible, at this stage, to make a reliable estimate of the longer-term economic consequences. Work is in hand to complete a national assessment, the details of which will be made publicly available.

  Paddy Tipping
  To ask the Secretary of State for Environment, Food and Rural Affairs what is the total amount of compensation so far paid to farmers following the foot and mouth outbreak. [7666]

  Mr. Morley
  [holding answer 15 October 2001]: The total amount paid in statutory compensation in Great Britain as at 10 October is £1,047,102,708. This comprises £1,020,769,169 for animal compensation payments and £26,333,152 for items seized and destroyed such as hay, feed, fodder and semen straws.

  Mr. Luff
  To ask the Secretary of State for Environment, Food and Rural Affairs what arrangements she has made to encourage(a) individuals, (b) companies and (c) organisations affected by foot and mouth disease to submit evidence to the inquiries the Government have established; and if she will make a statement. [8043]

  Mr. Morley
  The inquiries which the Government have announced into the current foot and mouth disease epidemic are independent. It would, therefore, be inappropriate for DEFRA to decide how to encourage any person, company or organisation to submit evidence. It is for the chairmen of the independent inquiries to encourage interested parties to submit their views.

  Mr. Luff
  To ask the Secretary of State for Environment, Food and Rural Affairs what arrangements she has made for the Government inquiries into foot and mouth disease to receive representations from hon. Members; and if she will make a statement. [8040]

  Mr. Morley
  The inquiries into the current foot and mouth disease epidemic are independent. It is for the Chairmen to decide on how to receive any representations.

  Paul Flynn
  To ask the Secretary of State for Environment, Food and Rural Affairs what contribution her Department is making to the research being undertaken to develop a vaccine against foot and mouth disease, which does not result in a carrier state. [6486]

  Mr. Morley
  As yet no vaccine is available that can provide a guarantee of preventing the carrier state. The Department is funding a programme of research on foot and mouth disease, concentrating on (i) vaccine development (ii) molecular structure of the virus (iii) improved diagnosis and (iv) epidemiology. During the current financial year, we are committed to spend just over £900,000 on this programme, of which £268,000 will be devoted to three projects on vaccine development. In addition, one project from the 'improved diagnosis'1250W
  programme is specifically examining the carrier state in cattle. The Department has also received six proposals for future research and development into vaccine development and use.

  Mr. Heath
  To ask the Secretary of State for Environment, Food and Rural Affairs when she expects that Somerset will be adjudged not to have high risk status in respect of foot at and mouth disease. [7889]

  Mr. Morley
  [holding answer 15 July 2001]: The county of Somerset was classified as foot and mouth disease free from 9 October, while the single unitary authority of Bath acid North East Somerset was declared foot and mouth disease free on 11 September. The unitary authority of North Somerset was classified as foot and mouth disease free on 16 October 2001.

  Combined Heat and Power
  Joan Ruddock
  To ask the Secretary of State for Environment, Food and Rural Affairs how much CHP capacity has been put out of service since the new electricity trading arrangements came into effect. [5181]

  Mr. Meacher
  No information is available on whether any CHP capacity has been decommissioned since the introduction of NETA. However, the recent report by the Office of Gas and Electricity Markets, "Report to DTI on the Review of the Initial Impact of NETA on Smaller Generators", issued last month, indicates that the export of power from CHP has reduced by around 60 per cent.

  Energy Efficiency (Government Estate)
  Mr. Colman
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans the Government have to legislate for a 30 per cent. improvement in the energy efficiency of the Government Estate. [5669]

  Mr. Meacher
  [holding answer 20 July 2001]: Further to the current 20 per cent. improvement target, we are developing new realistic, but challenging energy efficiency targets for the Government estate. These will be based on an assessment of the estate's performance against national standards, which will be available next year.

  We are currently analysing the latest information about the estate's energy efficiency performance over the past decade, details of which will be announced next month.

  Livestock Markets
  Mr. Heath
  To ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on the resumption of operation of livestock markets. [7891]

  Mr. Morley
  [holding answer 15 October 2001]: Veterinary and scientific advice is that there is an inherent risk of spreading the disease by mixing animals together and then dispersing them. Any livestock keeper with poor standards of biosecurity might attend markets from anywhere in the country and put at risk others attending the market. Even in designated free counties, it would take only one such lapse in biosecurity precautions to spread disease. It is right to be cautious at this stage but the situation will be kept under review.

WALES

  Tourism
  Chris Ruane
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on support for small businesses in the tourism sector in Wales. [4199]

  Mr. Paul Murphy
  I regularly meet the First Secretary of the National Assembly to discuss a variety of issues, including the tourism sector in Wales.

  Over the last six months, I have made many visits to different parts of Wales, meeting representatives of local business communities, hoteliers and other organisations to listen to their concerns.

  Mrs. Betty Williams
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on financial assistance for small businesses in the tourism sector which have been affected by foot and mouth disease. [4202]

  Mr. Paul Murphy
  I have regular meetings with the First Secretary to discuss a variety of issues, including the tourism sector in Wales.

  The Under-Secretary, my hon. Friend the Member for Islwyn (Mr. Touhig), recently visited my hon. Friend's constituency and met representatives of the local business community, hoteliers and other organisations to listen to their concerns on the effects of FMD on the local economy.

  17. Mrs. Curtis-Thomas
  To ask the Secretary of State for Wales if he will make a statement on the use of the Small Firms Loan Guarantee Scheme for promotion of businesses in tourism. [4208]

  Mr. Paul Murphy
  The Small Firms Loan Guarantee Scheme, a UK-wide scheme, is the responsibility of the Secretary of State for Trade and Industry.

  This scheme, which has been running since 1981, helps viable small firms access loans where conventional finance is unavailable because of a lack of security. Under standard scheme terms and conditions many business sectors are eligible including some within tourism.

  The scheme was temporarily extended in April 2001 to assist businesses affected by the outbreak of foot and mouth disease. Coverage was extended to a number of business sectors normally excluded, including retailing, catering and others within tourism.

  Health Service
  10. Mr. Bryant
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary of the National Assembly for Wales on the health service in Wales. [4200]

  24. Ann Clwyd
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on the health service in Wales. [4215]

  Mr. Touhig
  My right hon. Friend and I meet regularly the National Assembly First Minister and the Assembly Health and Social Services Minister to discuss the NHS in Wales.
  1252W
  As my hon. Friends know the NHS (Wales) Bill received advance- drafting authority and we have therefore been in constant touch in order to make progress.

  Transport
  Donald Anderson
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary of the National Assembly on transport in Wales. [4201]

  Mr. Touhig
  My right hon. Friend meets the First Secretary of the National Assembly on a regular basis to discuss wide-ranging current issues affecting Wales, including transport.

  Transport generally is a matter for the National Assembly, though railways, air and ports remain, generally, the responsibility of Central Government, working closely with the Assembly on matters affecting Wales. I am keen to continue dialogue with the Assembly and Cabinet colleagues in order to determine how best to meet the transport needs of Wales.

  Mr. Edwards
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on transport in Wales. [4218]

  Mr. Paul Murphy
  I meet the First Secretary of the National Assembly on a regular basis to discuss wide-ranging current issues affecting Wales, including transport.

  Transport generally is a matter for the National Assembly, though railways, air and ports remain, generally, the responsibility of Central Government, working closely with the Assembly on matters affecting Wales. I am keen to continue dialogue with the Assembly and Cabinet colleagues in order to determine how best to meet the transport needs of Wales.

  Manufacturing Industry
  Kevin Brennan
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on manufacturing industry in Wales. [4203]

  Mr. Paul Murphy
  I meet the First Secretary regularly to discuss a range of issues, including manufacturing in Wales.

  I am pleased to note the announcement of some 7,500 jobs in manufacturing operations across Wales in the past 12 months, particularly in the light of heavy job losses in the steel sector.

  Mrs. Lawrence
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on manufacturing industry in Wales. [4209]

  Mark Tami
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on the manufacturing industry in Wales. [4219]

  Mr. Paul Murphy
  I meet the First Secretary regularly to discuss a range of issues, including manufacturing in Wales.
  1253W
  I am pleased to note the announcement of some 7,500 jobs in manufacturing operations across Wales in the past 12 months.

  Mr. Nicholas Winterton
  To ask the Secretary of State for Wales if he will make a statement on manufacturing employment in Wales. [4210]

  Mr. Paul Murphy
  I am pleased to note the announcement of some 7,500 jobs in manufacturing operations across Wales in the past 12 months.

  Higher Education
  Mr. Martyn Jones
  To ask the Secretary of State for Wales what discussions he has had with his right hon. Friend the Secretary of State for Education and Skills about higher education in Wales. [4205]

  Mr. Touhig
  My right hon. Friend and I have had a number of meetings and discussions recently to discuss education in Wales. These discussions have included the provision of higher education.

  The Assembly's Education and Lifelong Learning Committee is conducting a comprehensive policy review of higher education in Wales, to inform a 10-year strategy for the sector. The review's findings are expected later this year.

  Environment
  Mr. Stephen O'Brien
  To ask the Secretary of State for Wales if he will make a statement on the mechanisms for determining cross-border environmental issues. [4206]

  Mr. Paul Murphy
  Such issues are a matter for the National Assembly for Wales, in discussion with the lead Whitehall Department and where appropriate the Environment Agency. The Wales Office would only become involved if I were asked to intervene to help resolve a difficulty.

  North Wales Young Offenders Team
  Ian Lucas
  To ask the Secretary of State for Wales what assessment he has made of the effectiveness of the North Wales young offenders team; and if he will make a statement. [4207]

  Mr. Touhig
  The Youth Justice Board for England and Wales has responsibility for the operation of youth offending teams. The Crime and Disorder Act 1998 requires local authorities to submit a youth justice plan to the Board annually, setting out the composition and funding of youth offending teams and how youth justice services in their areas are to be provided.

  I am informed that the Youth Justice Board is aware of the proposals by Wrexham county borough council and Flintshire county council to split into two the present North East Wales Youth Offending Team. It is for the Board to comment on the merits of these proposals.

  Welsh Language (Documents)
  Mr. Andrew Turner
  To ask the Secretary of State for Wales what arrangements are in place to ensure that documents produced by his Department are obtainable in Welsh. [4211]
  1254W
  Mr. Paul Murphy
  Wales Office publications are bilingual and we reply in Welsh to anyone who writes to us in that language. Our translation needs are met partly by the National Assembly for Wales under the terms of a service level agreement and partly by external translators. We are currently preparing a Welsh Language Scheme which will be published for consultation shortly.

  Labour Statistics
  Llew Smith
  To ask the Secretary of State for Wales how many job losses have been announced, and how many new jobs have been created, in Blaenau Gwent in the past 12 months. [4212]

  Mr. Paul Murphy
  While the figures are not exhaustive, a survey of announcements over the past 12 months suggests that around 1,000 jobs have been lost in Blaenau Gwent and just under 300 new jobs have been announced during this period. While these figures are disappointing, I am pleased to note that the unemployment rate in Blaenau Gwent Unitary Authority has fallen by 0.7 per cent. in the last year.

  Mr. David:
  To ask the Secretary of State for Wales what discussions he has had with the First Secretary of the National Assembly on manufacturing job losses, with special reference to job losses in the Caerphilly county borough. [4213]

  Mr. Paul Murphy
  I meet the First Secretary regularly to discuss a wide range of issues including manufacturing employment in Wales.

  While a number of manufacturing job losses have been announced in Caerphilly and across Wales during the past 12 months, I very much welcome the announcement of continued expansion at Norgine Pharmaceuticals and National Britannia, with a total of 144 jobs to be created in Caerphilly.

  Inward Investment
  Bob Spink
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary concerning the level of inward investment in Wales. [4214]

  Mr. Paul Murphy
  I meet the First Minister regularly to discuss a wide range of issues including inward investment in Wales.

  In the past 12 months, Wales has attracted capital investment of £549 million, with nearly 9,000 new jobs created and over 6,000 jobs safeguarded.

  Foot and Mouth
  Adam Price
  To ask the Secretary of State for Wales what recent discussions he has had with the National Assembly for Wales regarding the state of the rural economy following the outbreak of foot and mouth disease; and if he will make a statement. [4216]

  Mr. Paul Murphy
  I have regular discussions with the First Minister on a wide range of issues, including the rural economy in Wales.

  The recent declines in rural incomes are attributable to prices for most commodities falling sharply due to market conditions, economic difficulties in Russia and Asia, and

  1255W
  the strength of sterling, as well as the foot and mouth outbreak. We cannot ignore these difficulties, but must respond positively to the challenges. I understand that the National Assembly's Advisory Group is advising on how best to tackle these challenges in a way which best meets the needs of rural Wales.

  Redundant Steel Workers
  Paul Flynn
  To ask the Secretary of State for Wales what plans he has to assist redundant steelworkers in Wales. [4217]

  Mr. Paul Murphy
  On 3 May the Secretary of State for Trade and Industry announced a number of measures to help individuals and communities affected by redundancies in the steel industry. This included lump sum payments of around £2,500 in social aid. The scheme will be backdated to 1 January 2000.

SCOTLAND

  Refurbishment Projects
  Ms Walley
  To ask the Secretary of State for Scotland if she will list the top 10 companies to which her Department contracted out its construction and refurbishment work in the last 12 months. [6615]

  Mrs. Liddell
  My Department has let no contracts for construction and refurbishment work in the last 12 months.

  Ms Walley
  To ask the Secretary of State for Scotland what(a) building and (b) refurbishment projects are planned by her Department in (i)the current and (ii) the next financial year; and what the costs will be of each project. [6591]

  Target

  Achievement

  The average number of disabled people employed by Remploy

  110,400

  10,423

  Average number of disabled people employed under the Interwork Scheme

  14,400

  4,403

  The number of disabled employees to move from Remploy factories to Interwork having been employed there for at least six months, or from Interwork or factories to open employment

  1700

  774

  Remploy will keep within a unit cost target (operating deficit per disabled worker) of:

  £9,600

  £9,580

  1at least

  Invalid Care Allowance
  Dr. Cable
  To ask the Secretary of State for Work and Pensions what representations he has received from carers' organisations regarding an increase in the invalid care allowance; and if he will make a statement. [7507]

  Maria Eagle
  We have received from carers' organisations a number of representations on this and other aspects of financial support for carers. Some of these were in response to the Government's recent consultation on our proposed changes to provide entitlement to Invalid Care Allowance (ICA) to those aged over 65, to make the benefit payable for 8 weeks after the death of the person being cared for, and to change its name to the more appropriate "Carer's Allowance". These enhancements to ICA, which are part of a £500 million per annum package
  1256W
  Mrs. Liddell
  My Department has no building or refurbishment projects planned for this financial year or next, other than on-going minor maintenance work.

  Civil Service (Retirement Age)
  Mr. Brady
  To ask the Secretary of State for Scotland if she will list the compulsory retirement ages which apply to employees of her Department and of executive agencies and other public sector bodies for which it is responsible, broken down by grade or job title. [7230]

  Mrs. Liddell
  My Department's normal retirement age for all staff is 60. This policy is currently under review in relation to staff below the senior civil service.

  The Scotland Office has no executive agencies or other public service bodies.

WORK AND PENSIONS

  Fraud
  Liz Blackman
  To ask the Secretary of State for Work and Pensions if he will place the results of the evaluation of the March advertising campaign on targeting fraud in the Library. [8747]

  Mr. Darling
  A report on the results of the evaluation of the March burst of the Targeting Fraud Advertising Campaign has been placed in the Library.

  Remploy
  Liz Blackman
  To ask the Secretary of State for Work and Pensions what Remploy's performance has been against the targets set in their 2000–01 Annual Performance Agreement. [8748]

  Maria Eagle
  Remploy published its Report and Accounts for 2000–01 in July and copies have been placed in the Library. The targets and achievements are set out in the table.

  of benefit improvements announced last Autumn, will be introduced shortly by means of a Regulatory Reform Order.

PRIME MINISTER

  Ynys Môn
  Albert Owen
  To ask the Prime Minister what plans he has to visit the Ynys Môn constituency in the near future. [4226]

  The Prime Minister
  I have no plans at present to do so.

  Housing Rents (London)
  Jeremy Corbyn
  To ask the Prime Minister what actions are being taken by the Government to ensure that the number of affordable rented houses in London increases. [4230]

  The Prime Minister
  We have reversed the decline in housing investment by the previous Administration with a massive programme to improve the quantity and quality of social housing in London. We are actively working with others, including the Mayor, on measures to increase the provision of housing, including affordable housing, in London. We have also just announced the allocations for our Starter Homes Initiative which will help to expand the supply of housing to key workers in the capital.

  NHS Beds (Oxfordshire)
  Dr. Evan Harris
  To ask the Prime Minister what assessment he has made of the adequacy of the number of NHS beds in Oxfordshire. [4231]

  The Prime Minister
  In August 2001, an assessment made in accordance with the recommendations of the National Beds Inquiry showed that Oxfordshire needed a further 151 beds to reach its recommended number. A more detailed assessment process is now being developed to ensure that the right capacity exists to meet the needs of patients in Oxfordshire. Action is already being taken to address the capacity problem, and current plans include an increase of 48 surgical beds at the John Radcliffe Hospital by spring 2003 and an increase of 18 beds in Bicester by autumn 2004.

  Experience Corps
  Bob Russell
  To ask the Prime Minister which Minister has responsibility for the operation of the Experience Corps. [8453]

  The Prime Minister
  The Under-Secretary of State, Home Office, my hon. Friend the Member for Wallasey (Angela Eagle), has responsibility for the Experience Corps.

  Devolved Administrations
  Mr. Salmond
  To ask the Prime Minister what his policy is with regard to(a) Ministers and (b) officials in his Department giving evidence to (i) Scottish Parliament, (ii) Welsh Assembly and (iii) Northern Ireland Assembly Committees; and to what categories of document he gives (A) full access, (B) restricted access and (C) no access to (1) Scottish Parliament, (2) Welsh Assembly, (3) Northern Ireland Assembly and (4) House of Commons Select Committees. [7018]

  The Prime Minister
  I refer the hon. Member to the answer given to him by my hon. Friend the Minister of State, Cabinet Office on 15 October 2001,Official Report, columns 1003–04W.

  Public Sector (Retirement)
  Mr. Frank Field
  To ask the Prime Minister what proportion of public sector employees in work are due to retire in the next(a) five, (b) 10 and (c) 15 years. [8028]

  Ruth Kelly
  I have been asked to reply.
  1258W
  The Labour Force Survey (LFS) can provide estimates of the total number of employees in the public sector due to reach state retirement age in the next five, 10 and 15 years. That is, men aged 60–64,55–64, and 50–64 and women aged 55–59, 50–59 and 45–59 respectively. Estimates for the number of employees in the public sector for the age breakdowns and their proportions of the total number of employees of working age in the public sector are shown in the table.

  The LFS does not collect information on the retirement intentions of individuals.

  Proportion of public sector employees of working age reaching
  state retirement age in the next five, 10 and 15 years, spring1,2 2001—United
  Kingdom

  Thousand

  Percentage

  All persons

  Five years

  465

  7.4

  10 years

  1,252

  20.0

  15 years

  2,172

  34.6

  Men

  Five years

  111

  4.6

  10 years

  322

  13.4

  15 years

  648

  27.0

  Women

  Five years

  355

  9.1

  10 years

  931

  24.0

  15 years

  1,525

  39.3

  1March to May

  2Not seasonally adjusted

  Note:

  Percentages are based on the total number of public sector employees in the relevant age group as a percentage of all employees in the public sector

  Source

  ONS—Labour Force Survey

TREASURY

  Split Level Investment Trusts
  Dr. Cable
  To ask the Chancellor of the Exchequer (1) what steps are being taken by the Treasury and the FSA to investigate(a) mis-selling and (b) financial solvency in respect of split level investment trusts; [7504]

  (2) what investigations have been carried out by the Treasury and the FSA into the possible mis-selling of zero coupon preference shares by investment trusts. [7505]

  Ruth Kelly
  I understand from the Financial Services Authority that they have been considering for some time the sale of 'exotic' products, including split capital investment trusts, to retail investors. It issued a Consumer Alert on 9 March 2001, entitled "Be wary of exotic ISAs, warns financial watchdog". In March 2001, it also issued specific guidance to financial advisers, reminding them of their responsibility to ensure that investors are aware of the risks involved in purchasing split capital investment trusts.

  Employment Tax Credits
  Dr. Cable
  To ask the Chancellor of the Exchequer what discussions he has had with carers' organisations as part of the consultation on employment tax credits. [7511]
  1259W
  Dawn Primarolo
  Throughout 2001, I have met a wide range of interested groups and individuals, including representatives from carers' organisations and disability groups, to discuss all aspects of the new tax credits proposals.

  Departmental Staff
  Mr. Salmond
  To ask the Chancellor of the Exchequer if he will estimate total annual staff costs for his Department and its agencies by nation and region of the UK; and if he will make a statement. [6871]

  Ruth Kelly
  I refer the hon. Member to the answer given by the Parliamentary Secretary, Cabinet Office, on 15 October 2001,Official Report, columns 1009–12W.

  Departmental Spending
  Mr. Salmond
  To ask the Chancellor of the Exchequer what the total expenditure was on(a) advertising, (b) polling, (c) focus groups, (d) design consultants, (e) caterers, (f) production of departmental publications and (g) photographs/photographers by his Department for each year since 1995 in (i) cash and (ii) real terms; what was (A) the annual percentage increase in spending on each category and (B) spending on each category as a percentage of the total departmental running costs; and if he will make a statement. [6878]

  Ruth Kelly
  I refer the hon. Member to the answer given by the Parliamentary Secretary, Cabinet Office, on 15 October 2001,Official Report, columns 1009–12W.

  Customs and Excise, Shrewsbury
  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer what the maximum distance is that employees at Her Majesty's Customs and Excise office in Shrewsbury would be expected to travel if alternative work were found for them.[7142]

  Mr. Boateng
  Staff could be moved to another office within reasonable daily travel, which is defined as within 90 minutes' travelling time each way from home, taking into account the personal and domestic circumstances of each member of staff.

  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer (1) when the review into workloads will be completed at Her Majesty's Customs and Excise office in Shrewsbury; [7139]

  (2) if he will publish the brief given o the regional director undertaking the review into workloads at Her Majesty's Customs and Excise office in Shrewsbury. [7140]

  Mr. Boateng
  There is no review into workloads at the HM Customs and Excise Shrewsbury office.

  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer if he will make a statement on the proposed reduction in work at HM Customs and Excise office in Shrewsbury. [7137]

  Mr. Boateng
  HM Customs and Excise are pursuing a number of initiatives to improve their service to business and achieve efficiency improvements. Reductions in personnel at Shrewsbury are related to the programme to concentrate the work of Debt Management Units from 1260W
  29 sites into 10. As a result HM Customs and Excise announced that the DMU at their Shrewsbury office will close on 31 March 2002, affecting 32 staff.

  However, Customs have no plans to close the Shrewsbury office. Customs are also exploring options with other Government Departments and agencies. Their aim remains to avoid compulsory redundancies wherever possible.

  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer if he will estimate the number of redundancies at Her Majesty's Customs and Excise office in Shrewsbury if replacement work is not found. [7141]

  Mr. Boateng
  HM Customs and Excise's policy is to avoid compulsory redundancies wherever possible. They are not in a position to estimate whether or not there will be any redundancies at Shrewsbury until all the other options have been exhausted.

  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer what steps are being taken to introduce new work at HM Customs and Excise office in Shrewsbury. [7138]

  Mr. Boateng
  HM Customs and Excise are undertaking a national review of Regional Business Services work that does not have to be based at a particular location. This may result in that work being pooled or concentrated in particular sites. Shrewsbury will be given equal consideration alongside similar locations as part of that review.

  Foot and Mouth
  Dr. Cable
  To ask the Chancellor of the Exchequer what estimate he has made of Government payments arising from the foot and mouth outbreak in the financial year 2001–02 expressed(a) gross and (b) net of reimbursement from the European Commission; and what the total cost is. [8015]

  Mr. Andrew Smith
  The costs of FMD for the full financial year are not yet known and cannot be reliably estimated. Up to 10 October, the Government had spent £1.5 billion on eradicating foot and mouth, of which just over £1 billion has been on compensation to farmers. In addition, £308 million had been spent on the Livestock Welfare Disposal Scheme, and the Government have put in place several measures to help the countryside recover from foot and mouth disease, including: deferral of tax, VAT and National Insurance contributions which has helped over 18,000 businesses; establishment of a £50 million Business Recovery Fund; establishment of rate relief scheme covering affected areas; establishment of a matched funding scheme for charitable donations; and the Government making additional lending available through the Small Firms Loan Guarantee Scheme.

  The UK is eligible for reimbursement from the European Commission of 60 per cent of the costs of compensation for the slaughter and destruction of animals, cleansing and disinfecting of holdings and equipment and the transport of carcases. The EC have approved an initial payment of euro 355 million, and we anticipate a further payment being made during 2002.

  Scottish Executive
  Mr. Bercow
  To ask the Chancellor of the Exchequer how much has been paid at current prices by HM Treasury
  1261W
  to the Scottish Executive outside the block grant since 1 July 1999; and if he will place in the Library a list of all the major items included in that additional expenditure. [7781]

  Mr. Andrew Smith
  Nothing—all funding by the Government of the Scottish Executive since 1 July 1999 has been by means of the block grant.

  Air Passenger Duty
  Mr. Martyn Jones
  To ask the Chancellor of the Exchequer if he will assess the benefits of using revenues from air passenger duty to assist British airlines during their current financial difficulties. [7673]

  Mr. Boateng
  The Government will continue to consider any appropriate means of providing support to the airlines industry during the current period. However, at this time, the Government do not think that hypothecating revenues raised from air passenger duty to the airlines industry would be an appropriate or efficient means of support. In general, the way in which Government revenues are raised should not determine where they are spent.

  Equitable Life
  Mr. Gardiner
  To ask the Chancellor of the Exchequer what reasons the appointed actuary of Equitable Life has given to the FSA for the change in his assessment of(a) the valuation of the with-profits fund and (b) the company's financial position, that prompted the company to downgrade its terminal bonus guidelines by 16 per cent. [7058]

  Ruth Kelly
  The reduction in policy value was, the Equitable has publicly said,"vital for the long-term interests of the Society and all its policyholders. The decision was taken … because stock markets have fallen heavily over the last 18 months; maturity values now significantly exceed the value of the investments underlying maturing policies; as a mature fund, a large number of policyholders are currently retiring and taking their benefits."

  Mr. Gardiner
  To ask the Chancellor of the Exchequer (1) what questions the FSA raised with Equitable Life about the values assigned to policyholders' final bonus levels in its(a) with-profits fund and (b) GAR fund since January 2000; [6623]

  (2) what assessments the FSA made, on what bases and on which dates, of the adequacy of the reserves of Equitable Life to meet the liabilities it faced from its guaranteed annuity rate policies, between 1 January 1999 and 8 December 2000. [7057]

  Ruth Kelly
  This is an issue which Lord Penrose may wish to consider in his inquiry into the events surrounding Equitable Life.

  Mr. Russell Brown
  To ask the Chancellor of the Exchequer what evidence he will provide to Lord Penrose's inquiry into Equitable Life; and if he will publish it. [8280]

  Ruth Kelly
  The Government are submitting to Lord Penrose the report of the Financial Services Authority on the review of the regulation of Equitable Life from January 1999 to December 2000. The report has been 1262W
  presented to Parliament and is being published today (as House of Commons Paper 244). Copies are available in the Vote Office.

  Insurance Company Actuaries
  Mr. Gardiner
  To ask the Chancellor of the Exchequer if he will change the reporting obligations of appointed actuaries of insurance companies so that all material changes in the financial position of a company must be notified to the Financial Services Authority in between annual reporting dates. [7061]

  Ruth Kelly
  Sections 342 and 343 of the Financial Services and Markets Act 2000 provide HM Treasury with powers to make regulations specifying the circumstances in which appointed actuaries of insurance companies must make a report to the Financial Services Authority. The Treasury intends to make such regulations, but before doing so it wants to give interested parties an opportunity to comment on its proposals. These proposals are set out in a consultation document which will be published by HM Treasury in the near future.

  Insurance Companies (Negligence)
  Mr. Gardiner
  To ask the Chancellor of the Exchequer (1) if he will impose upon the auditors and audit committees of insurance companies a duty of care to the Financial Services Authority qua regulator, making them liable for negligence; [7059]

  (2) if he will impose upon the appointed actuaries of insurance companies a duty of care to the Financial Services Authority qua regulator, making them liable for negligence. [7060]

  Ruth Kelly
  This is an issue which Lord Penrose may wish to consider in his inquiry into the events surrounding Equitable Life.

  Airline Insurance
  Mr. Bercow
  To ask the Chancellor of the Exchequer what the forecast average monthly cost of the airline insurance guarantee is. [7778]

  Dr. Cable
  To ask the Chancellor of the Exchequer what the limit of Government contingent liabilities is under(a) Pool Re and (b) the cover provided to the aviation industry to insure against terrorist risk; and how these commitments will be reported in Government accounts. [8017]

  Mr. Brady
  To ask the Chancellor of the Exchequer what arrangements have been made with the airline industry to ensure that passengers travelling out of the UK while airline insurance is underwritten by Her Majesty's Government will be able to return to the UK after the expiry of the current arrangements. [7482]

  Mr. Andrew Smith
  [holding answer 15 October 2001]: There is no limit to the Government contingent liability under the arrangements with the re-insurer, Pool Re, or the cover provided to the airline industry. Full details of the liabilities will be submitted to the Parliamentary Accounts Committee in accordance with normal procedures.
  1263W
  The cost of the airline insurance guarantee is mainly in the form of actual liabilities. Costs cannot be quantified in advance of any claim being made.

  The airline insurance guarantee established by HM Treasury will run for 30 days from 11.59 GMT 24 September, and there is an option for renewal on seven days' notice for a further 30-day period if it is evident that adequate insurance is not available.

  Treasury Select Committee Report
  Mr. McFall
  To ask the Chancellor of the Exchequer when the Government will respond to the Treasury Committee's Tenth report for the Session 2000–01. [8749]

  Ruth Kelly
  The Government response has been delivered to the Committee today and a copy has been deposited in the Library of the House.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.

Lord King of Bridgwater
The Right Honourable Thomas Jeremy King, CH, having been created Baron King of Bridgwater, of Bridgwater in the County of Somerset, for life—Was, in his robes, introduced between the Viscount Younger of Leckie and the Lord Mayhew of Twysden.
Lord Kilclooney
The Right Honourable John David Taylor, having been created Baron Kilclooney, of Armagh in the County of Armagh, for life—Was, in his robes, introduced between the Lord Molyneaux of Killead and the Lord Ponson by of Shulbrede.

Company Directors' Remuneration
2.49 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What is the basis for the proposed legislation to control excessive salary and related payments made to private company chief executives and board members.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the Government are very concerned that there should be a strong linkage between directors' rewards and performance. We have already announced our intention to legislate to strengthen the disclosure requirements in that area. We have also said that we shall take a final decision on how to improve directors' accountability to shareholders in the light of the company law review's recommendations on related issues such as voting at general meetings and the enforcement of fair dealing by directors. That remains the case.
Lord Dormand of Easington: My Lords, I thank my noble friend for that reply, but is he aware that the number and scale of such increases are a scandal? It is deeply disappointing that a Labour Government, having been in power for four years, have done nothing to control them. Does he agree that the argument that such payments reward success is nonsense when so many of the companies concerned have failed, and in some cases have suffered huge losses? Will my noble friend add t o his Answer and tell us when at least some of the recommendations in the report on modern company
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law will be introduced, particularly those relating to remuneration committees and accountability to shareholders?
Lord Sainsbury of Turville: My Lords, I agree that the linkage between rewards and performance has not been as strong or clear as it should be. There is cause for concern on that. I think that my noble friend will be pleasantly surprised at how soon an announcement will be made about the action that the Government are taking. In this context I use the word "soon" in its colloquial sense, not its political sense of -I haven't a clue when it is going to take place".
Baroness Gardner of Parkes: My Lords, is the Minister aware that most of the general public do not feel so strongly about rewards for someone doing a good job, but are quite upset to see people going away with a golden handshake of millions when they have failed completely? I am told that that is covered by contract law. Can anything be done on that aspect?
Lord Sainsbury of Turville: My Lords, people feel strongly about those who walk away from companies with large rewards. In this case, it is for the directors of the company to come up with the best arrangements. That decision has to be taken in the light of the circumstances of the company. It is for the shareholders of the company to hold the directors to account for their actions. The role of the Government should be to make certain that there are good governance arrangements in place so that shareholders are able to hold directors to account.
Lord Marsh: My Lords, does the Minister agree that, under the present situation, institutional shareholders in most sizeable companies are perfectly capable of applying pressure to boards if they believe that companies are behaving wrongly?
Lord Sainsbury of Turville: My Lords" I am not certain that that is the case. I believe that the procedures relating to this matter are rather difficult. They lead to the unfortunate situation whereby the only way in which shareholders can make their views known is by voting against the reappointment of a director to the remuneration committee. I do not believe that that is satisfactory, and I consider that there is a case for looking strongly at how we can improve the system.
Lord Razzall: My Lords, does the Minister accept that the position would be a great deal clearer, and no doubt the noble Lord, Lord Dormand of Easington, would not have to continue to ask this Question, if the Government were to set out whether in principle they believe that legislation should be brought in to control what they regard as excessive increases or whether they simply believe that the legislation will deal with better disclosure?
Lord Sainsbury of Turville: My Lords, I do not believe that this is a matter for the Government, and

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none of the reports on corporate governance has suggested that it is for the Government to take action to control salary levels. In this case we are talking about, and the Government are concerned with, the corporate governance arrangements whereby shareholders can legitimately hold directors to account in what they do.
Lord Wedderburn of Charlton: My Lords, does my noble friend agree that this pressing problem raised by my noble friend demonstrates the importance of maintaining the legal duty placed by the Companies Act on directors since 1980? The relevant section of the Act states that they must take into consideration in the performance of their functions the interests of employees as a whole as well as the interests of shareholders.
Lord Sainsbury of Turville: My Lords, I believe that that they should take account of the impact that such increases have on employee morale. That is an important issue. To reiterate the point that I made, I believe that it is appropriate for shareholders to ensure that they do so.
Lord Rotherwick: My Lords, the number of people who live below the poverty line is increasing. Indeed, national statistics for the past five years show that the percentage of the population below the low-income thresholds, which vary with mean income, rose slightly during that period. Shall we be surprised to hear soon how the Government will reverse that trend?
Lord Sainsbury of Turville: My Lords, I congratulate the noble Lord on his first appearance at the Dispatch Box. We are talking about directors' salaries. The comparisons that can be drawn between the increases that top directors receive and those that people in the economy generally receive do not make a great deal of sense. However, the improvement in low pay, on which this Government notably have taken major action in terms of minimum wage legislation, and so on, in the face of total opposition from the noble Lord's party, is a quite separate issue.
Lord Mackie of Benshie: My Lords, will the noble Lord say what is his idea of a proper salary for a competent director? Would it be fair to say that it should be rather less than that of the Lord Chancellor or the Prime Minister? Surely he has a figure in mind.
Lord Sainsbury of Turville: My Lords, obviously it must be more. However, taking into consideration the range of companies and jobs done by directors, it is clear that there will be a vast range of appropriate salaries. I believe that we can all agree that, if the performance of directors is outstanding and their company is doing very well, they should be rewarded appropriately. However, most of us find it unacceptable when directors appear to be rewarded extremely well for performance which is extremely poor.
Lord Faulkner of Worcester: My Lords, in the clamour for the shareholders of Railtrack to be
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compensated as a consequence of the company's collapse, does my noble friend know whether Mr Gerald Corbett, who eventually had to resign due to his culpability in the causes of the crash at Hatfield, which occurred exactly one year ago today, has returned any of the £1 million pay-off that he received? What did the shareholders do to resist that payment?
Lord Sainsbury of Turville: My Lords, I believe that that is exactly the type of situation on which we want to see action. Of course, people's contracts must be taken into account. As Mr Bonham made clear in the case of the salary of the noble Lord, Lord Simpson, there is very little that a chairman of a company can do in circumstances where a contract exists and where it is quite clear that, if that contract is taken to the courts, the company will lose.

State Benefits: Hospital Downrating Rule
2.58 p.m.
Baroness Greengross Baroness Greengross asked Her Majesty's Government:
What plans they have to review the hospital downrating rule for the state pension.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, the department, in conjunction with the Department of Health, is looking at issues affecting hospital in-patients. The rules governing the downrating of benefits are being reviewed.
Baroness Greengross: My Lords, I thank the Minister for that reply. Does she agree that it would be very much in keeping with the Government's policy towards poorer people to address this issue now and to update the policy in a way that would be more suited to the 21st century rather than to apply the policy formulated in 1948?
Age Concern has recently drawn attention to the anomalous downrating rule. It is odd that pensioners are the only people who are forced to pay to stay in hospital. More than 30,000 pensioners in the year 2000 had their pensions docked for being in a hospital for too long. Approximately £60 million was taken from state pensions. Pensioners believed that they had earned and saved that money during all their working days. Is the Minister aware of any private pension provider that cuts benefits?
Finally, does she agree that people who stay in hospital for a fairly long time—say, six weeks—are likely to be rather ill; otherwise, in theory at least, they would be transferred to long-term care settings? Many geriatric beds have now gone. Does the Minister agree that a review is needed on this policy as soon as possible, both formally and openly?
Baroness Hollis of Heigham: My Lords, the noble Baroness is well known to the House for her honourable advocacy of the concerns of pensioners.

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I am sure that we all support her in that. However, over and beyond the question of cost, I believe that two considerations make this a complicated issue. The first has been the long-standing provision since 1948 that there should not be double-funding. In other words, if one receives a widow's benefit, one does not also receive retirement pension; and if one receives income support or related benefits, one does not also receive free provision for one's care, and so on, in hospital. Therefore, if we were to move away from that principle, a read-across over the whole social security system would have to be explored.
The second consideration was also raised by the noble Baroness; that is, the read-across to people in private residential care and local authority homes who, after 12 weeks, have all their benefit taken towards their charges, apart from £16 a week pocket money. I believe that it would be invidious if people in long-stay hospitals were to keep every penny of their benefit. Most of the benefit received by people in residential care goes towards their care. Therefore, although I am sympathetic to the point raised by the noble Baroness, we need to explore the real issues associated with this matter.
Lord Higgins: My Lords, In the light of the Minister's forthcoming initial reply, does she agree that the report by Age Concern entitled, Penalised for Being Ill is timely. The Government statistics seem to be extraordinarily out of date. The figure of £60 million for the abolition of the rule, which was given just before the Recess, is exactly the same as that given four or five years ago by the previous Conservative Government, which cannot possibly be right. The Government apparently have no idea of the administration costs. Will the review which the Minister mentioned take into account the need to ensure that those who have benefits withdrawn have them reinstated immediately they leave hospital?
Baroness Hollis of Heigham: My Lords, I agree with the noble Lord that it is likely that the figures offered by the previous Conservative Government were not accurate. That may well be the case. I am sure that the House would like to hear the figures I have. My understanding is that to remove the six-week rule for pensioners would cost about £30 million; to remove the fifty-two week rule for pensioners would cost £60 million, and to remove the rule for other people on related benefits would cost another £40 million. That would cost around £100 million in total. It may be that the noble Lord has other figures. However, I would not rely too much on the accuracy of the previous set of figures.
Perhaps I may correct a possible misapprehension by the noble Lord. I did not say that there is a review, but that we were keeping benefits under review—as we do with all such benefits—which is rather different.
Baroness Pitkeathley: My Lords, does the Minister agree that although there are undoubted savings associated with being in hospital, there are also undoubted extra costs. I refer, for example, to
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particular kinds of food which may need to be purchased, and to the cost of visiting for spouses and relatives.
Baroness Hollis of Heigham: Yes, my Lords. At present, the effect of the charges on a pensioner couple, if one is in hospital for more than six weeks, is an approximate reduction of five per cent of their joint pension income. That is for a 52-week period, which, given the reduction in the cost of food, and the like, I believe most people would not think unreasonable. I take the point made by my noble friend about transport. First a relative or carer on income support or JSA would have access to the social fund community care grants, which are available for transport to hospital. I am assured by my noble friend Lord Hunt that the Department of Health is currently considering the wider issues of transport raised by the Kennedy report.
Earl Russell: My Lords, I refer to the figures given by the Minister to the noble Lord, Lord Higgins, about the cost of any change. Are those changes exclusively in the budget of the Department of Social Security, or do they take account of administrative costs falling on the National Health Service?
Baroness Hollis of Heigham: My Lords, I referred to the cost of not withdrawing benefit, as currently happens.
Baroness Trumpington: My Lords, can the Minister tell the House whether people in hospital would have access to the social fund to pay for rent, rates and other weekly expenses? I do not refer to the cost of food. If that is not the case, people will get into debt.
Baroness Hollis of Heigham: My Lords, for a person whose benefit is reduced after six weeks there is a reduction of £28 for a single person and £14 a week for a couple. Housing benefit, council tax and the like are not affected. The reduction is from their total income. Therefore, their housing situation—rent and rates—will continue unchanged for 12 months. After that, because housing benefit and council tax benefit are renewed and reviewed every year, it would become a matter for the local authority.
Baroness Crawley: My Lords, does my noble friend agree that one of the main wishes of pensioners in hospital is to return home as soon as possible and, when they do so, to be as independent as possible? Can she tell the House what the Government are doing to support pensioners in that way?
Baroness Hollis of Heigham: Yes, my Lords. The main push of government policy is for community care. The Department of Health has recently announced not just that £1.4 billion is to go into the nursing home sector, but that there will be a further £300 million to end bed blocking. Over and above that, I am pleased to tell the House that my own department has put together what I consider to be a good package

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of support for carers, which includes respite care, and has developed direct payments for elderly people so that they can employ the health and support services they need. I am sure that every one of us would wish, if at all possible, to live in our own homes. Our aim is to ensure that all people, irrespective of income, have a similar choice.

Israel: EU Representations
3.6 p.m.
Lord Lamont of Lerwick Lord Lamont of Lerwick asked Her Majesty's Government:
What representations European Union Ministers have recently made to the Government of Israel about the internal situation in Israel.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, the European Union has made a number of representations to the Government of Israel about the situation in the occupied territories but not about the internal situation in Israel. Since the start of the intifada on 28th September 2000, there have been 16 EU démarches on, inter alia, restrictions on free movement, Israeli incursions into Palestinian authority controlled areas, extra-judicial killings, settlements, the closure of Orient House and the repayment of tax revenues. In the same period, the European Union delivered six démarches to the Palestinian authority, including on the death penalty.
Lord Lamont of Lerwick: My Lords, I thank the Minister for that reply. Perhaps I may also take the opportunity to condemn utterly the assassination of Minister Zeevi in Jerusalem today. Does the noble Baroness recall that Minister Zeevi once campaigned on the slogan, "Arabs should go back to Mecca"? Does she agree that, far from adding to the security of Israel, such attitudes, combined with the fact of the astonishing figure of 400,000 illegal settlers today in the occupied territories, increase the dangers, as today's tragedy sadly shows?
Baroness Symons of Vernham Dean: My Lords, I join the noble Lord, Lord Lamont, in his condemnation of the assassination that took place this morning. Not only has my right honourable friend the Secretary of State condemned the assassination, so too has President Arafat in unambiguous terms. I am sure that the noble Lord, Lord Lamont, would not wish in any way to give even a shred of comfort or a hint of justification to those who have murdered a senior member of an elected government, no matter what the views of any such member on any subject. That sort of political violence is totally unacceptable. However much individuals or groups of individuals may disagree with what a politician has said, I am sure we would all agree that a politician in a democracy must be able to express views without fear of an assassin's bullet.
Baroness Williams of Crosby: My Lords, I should like to express sympathy for the family of Minister
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Zeevi. There is a tragic inclination at present for a new "tit-for-tat" to take place in which leaders of each side are destroyed by the other. Given that in the end these political leaders will have to meet to discuss together, this development seems to be entirely tragic and short-sighted.
Does the Minister agree that the proposed EU mission to the Middle East could be of great use in the present, tense situation? Does she further agree that the recommendation and welcome extended by the US Secretary of State to that mission is a small constructive step to what we hope may one day be a lasting settlement?
Baroness Symons of Vernham Dean: My Lords, I agree with the noble Baroness that these "tit-for-tat" killings, as she described them, are in no way conducive to the peace process, which I am sure the overwhelming majority of your Lordships—and, I suspect, of right-minded people everywhere—would wish to see going forward. It is my view that those who committed this act have done a great disservice to all those Palestinians and Israelis who need peace, justice and security in their country.
I agree with the noble Baroness that the EU mission should receive our good wishes. We hope that it will take forward the Mitchell proposals which Her Majesty's Government believe to be the right way forward in trying to find a route back to the peace process. It should be remembered that those proposals suggest that there should be an absolute freeze on settlement—a point made by the noble Lord, Lord Lamont—which has been the cause of so much unhappiness to the Palestinians.
Lord Archer of Sandwell: My Lords, does my noble friend agree that history has dealt unkindly with both peoples in the Middle Eastern dispute and that they both deserve our sympathy and understanding? Does she further agree that whenever the peace process appears to be underway, somebody finds a method of destroying the accords, strengthening the extremists and weakening the peacemakers? Finally, does she agree that if we cannot bring about a reconciliation and heal the wounds, we should at least abstain from interventions which are likely to inflame the situation?
Baroness Symons of Vernham Dean: My Lords, I agree that both sides are suffering considerably in the current situation. Your Lordships may know that barely a week goes by without our learning of more families being ripped apart by violence. Often those who suffer the violence are young people. I make no discrimination on either side in that regard; the death of a young person—indeed the death of any person—is equally to be regretted on whatever side of an argument such death may occur. But we must do our best, even in these difficult circumstances, to look forward. In fact, violence in the area had decreased in the past couple of weeks or so, certainly since 7th October. It is the view not only of Her Majesty's Government, but also of our colleagues in the United States and the European Union, that the

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recommendations of the Mitchell committee, which cover many of the points at issue, are where we must focus our diplomatic effort. They were published in May this year. They were followed by the Tenet accord, published in June this year, which exhorts both Israelis and Palestinians to implement a security work plan to enforce the declared ceasefire. It is on Mitchell and Tenet that we should be directing our efforts.

Railtrack Successor Company: Funding
3.13 p.m.
Baroness Blatch Baroness Blatch asked Her Majesty's Government:
What are the circumstances in which public money would be paid to the successor company which they envisage taking over control of the railway system.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, the Government proposed that a private sector company limited by guarantee should succeed Railtrack. Public money would be paid to such a company when it can deliver effective management control over its business, with stronger performance incentives within an appropriate framework of regulation. We believe that would provide greater value for money for public support for both rail users and the taxpayer.
Baroness Blatch: My Lords, I am grateful to the noble and learned Lord for that Answer. On Monday this week the noble and learned Lord answered the noble Lord, Lord Palmer, when he asked how the money was going to be raised, in this way:
"The new company will be able to raise capital on the basis that it will be a company limited by guarantee, with certain assets guaranteed by certain people".—(Official Report, 15/10/01; col. 394.)
Who will be the guarantor? What are the "certain assets"? Who are the "certain people"?
Lord Falconer of Thoroton: My Lords, in order to raise money, the company will need to have reserves and have the ability to raise debt investment in the City. In order to do that, it will need to have a triple B rating and we will set up a structure to do that. That will enable it to raise the money it needs to continue trading.
Lord Barnett: My Lords, does my noble and learned friend share my surprise at the loss of memory of so many noble Lords opposite as to who was responsible for this sorry mess in the first place? Does he also agree that it seems a remarkable success by the present Minister for the directors of Railtrack to be seen as the good guys? The noble Baroness made a good point. What rate of interest is likely to be offered for bonds that may be issued to the new company without any government guarantee?
Lord Falconer of Thoroton: My Lords, the ability to raise money in the market on the basis of debt
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investment will depend upon the credit rating that the company obtains. The higher the credit rating, the cheaper it will be to raise money in the market. A triple B rating—that is the structure we intend to introduce—will be sufficient to raise money at reasonable market rates. Unlike my noble friend, I am not surprised that there appears to be a sudden loss of memory on the Benches opposite as to who set up the structure that led to this.
Lord Bradshaw: My Lords, this morning's Financial Times said that disposal will generate large fees for experts. Will the Minister please tell us that we are going to spend more money on the railway in future and a lot less on the experts who seem to jump on every gravy train that noble Lords care to invent?
Lord Falconer of Thoroton: My Lords, as we discussed in this House on Monday this week, this is a real opportunity to ensure that we put in place a structure for the railways that delivers high quality service for the travelling public. It is right that we should consult as widely as possible. It is also right that we should take sensible advice for which reasonable fees are paid. We should ensure that there is no gravy train on to which such consultants can jump.
Baroness Noakes: My Lords, will the noble and learned Lord answer the questions put by my noble friend? Who will be the guarantor? What are the assets? What people will be involved?
Lord Falconer of Thoroton: My Lords, there will be no need for guarantors. The position is that if the company has a triple B credit rating, it will be able to borrow money in the market.
Lord Berkeley: My Lords, is my noble and learned friend aware that part of the problem with Railtrack over the past six years has been that it has not known what its assets are, as we saw after Hatfield? Does he agree that no due diligence could have been carried out when Railtrack was privatised? How will lie ensure that proper due diligence is carried out now so that those who might invest in or lend to Railtrack know what the assets are against which they are making their investment?
Lord Falconer of Thoroton: My Lords, it became apparent, during the period leading up to the appointment of administrators, that Railtrack was not aware, for example, how much money it would need to invest for the future in order to survive. It was perfectly plain that there were significant areas where inadequate control had been exercised over a long period of time. That is why I said that there would not be an input of public money until there was effective management control over the business to which that money is to be paid.
Lord Geddes: My Lords, to the best of my hearing the noble and learned Lord has still failed to answer the three specific questions initially raised by my noble

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friend Lady Blatch and subsequently raised by my noble friend Lady Noakes. Will he do the House a service and answer those three questions specifically?
Lord Falconer of Thoroton: My Lords, I believe I answered those questions. The critical point is how money will be raised by the new company. The noble Baroness, Lady Blatch, asked about guarantors. I indicated that there will not be a need for guarantors because the company will have a sufficient credit rating to raise money in the market.
Lord Faulkner of Worcester: My Lords, does my noble and learned friend agree that there is now a great opportunity to undo the damage that the fragmentation of the railway created? We can now move forward to a situation where there are clear lines of accountability and responsibility so that we get away from the blame culture where everybody is searching for an alibi and looking for someone else to blame when things go wrong.
Lord Falconer of Thoroton: My Lord, I believe that this is a day to look forward. It is a day to see that there is scope for a renewed railway which will produce real service to the travelling public.

Christmas Day (Trading) Bill [H.L.]
3.20 p.m.
Lord Davies of Coity: My Lords, I beg to introduce a Bill to prohibit trading on Christmas Day in certain cases and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Davies of Coity.)
On Question, Bill read a first time, and to be printed.

Business of the House: Debates this Day
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Inglewood set down for today shall be limited to three hours and that in the name of the Earl Howe to two hours.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Countryside and Tourism
3.21 p.m.
Lord Inglewood Lord Inglewood rose to call attention to the need for a strategy for the recovery of the countryside, tourism and rural businesses; and to move for Papers.
The noble Lord said: My Lords, as noble Lords may know, the debate was originally in the name of my noble friend Lord Geddes, but he has handed it over to
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me. While some of your Lordships may feel that they have come under false pretences, I hope that they will not also be disappointed.
In March and April this year I spoke in your Lordships' House about the impact of foot and mouth disease in my home county of Cumbria. I shall not repeat what I said then, but I must begin by once more declaring the interest I declared on those occasions. Indeed, I do not want to speak specifically much about foot and mouth, although on one of the occasions to which I referred a personal friend who sits on the Benches opposite said to me that he thought I had been a bit unfair to the Government in my remarks. I have since thought about that criticism and must say that on the basis of my own experience and those of my neighbours I do not believe that I was.
What has occurred in Cumbria is, in economic terms, dire and there has been enormous destruction of assets and wealth. It has been calculated by Cumbria County Council's rural task force that approximately 5 per cent of the county's total GDP has been destroyed.
Metaphorically, we are at war. For that reason, I and many others want to put aside party differences to unite in the process of reconstruction. Against that background, I want to repeat today what the Minister has heard me say elsewhere; that I regret that there will not be a full public inquiry. Many Cumbrians believe that the Government have something to cover up. Understandably, after what they have gone through, that is causing real resentment.
When I was talking to the noble Lord, Lord Haskins, about the problems we both agreed that foot and mouth disease did not fundamentally change the problems facing the areas affected; it merely vastly accelerated the pace of many of the changes which were happening anyway. In this debate I want to speak generally about the problems facing rural Britain today. And I want to emphasise that it is not only about farming; it is about tourism, rural businesses, services, communities and the environment. One cannot pick and mix between them because they are all a seamless piece.
I hope that I shall set a framework within which others, who have less time to speak, will be able to make their particular points. And as we have many a true expert in the list I anticipate some telling points being made, not least from the right reverend Prelate the Bishop of Peterborough, whose maiden speech we await with anticipation. The diocese of Peterborough is some distance from the diocese of Carlisle, in which I live, but my mother's family live not far from the city and I was confirmed by one of his predecessors, Cyril Easthaugh. But of course he can in no way be held responsible for anything I might have said or done since.
I want to begin by talking about what I have christened the "Great Mistake", the "Great Myth" and the "Great Error". The "Great Mistake" is the land use policy, accepted by all political parties for many years, that agriculture and forestry are probably the only two "proper" activities in the countryside.

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That idea became entrenched at the heart of the way in which the town and country planning system was applied in this country from at least the 1940s. It certainly does not represent the reality of 18th or 19th century Britain where the countryside was the location of a wide range of activities. While the rationale for that approach is understandable, especially with hindsight, it is clear that it was mistaken.
The "Great Myth" is that farmers are the last of the John Bull breed; sturdy, independent yeomen working their land in splendid individual isolation; the archetypal businessmen beholden to no one; and the direct spiritual descendent of William Cobbett. The reality is that in all western countries there are complicated systems of agricultural support which are invariably politically sensitive. The farmer is penned in on all sides by policy and is permitted to do little other than farming with his land. In reality, he is operating within a set of narrowly drawn parameters and in fact agriculture is one of the most heavily regulated industries that we have.
The "Great Error" is the approach we have had for many years of supporting rural Britain by supporting agricultural output more or less to the exclusion of everything else. That goes back long before the CAP, deep into the traditions of domestic United Kingdom agriculture support.
For far too long, rural Britain has too often been seen as synonymous with agricultural Britain. It is not. And agriculture has been perceived as a single output activity when in fact it is multifunctional. It is not and never should be seen simply as an industry which produces mere food. It could and should produce inter alia the environment, the raw material of rural tourism, much of the fabric of rural society, the setting for suitable rural business as well as being the site of the production of what I call high quality food as opposed to human fodder. By focusing too much support and placing too much emphasis on production, agriculture has lost its bearings and with it rural Britain has lost its way.
I do not believe that there will be much disagreement around the Chamber about that analysis and I believe that that general consensus is important, as I shall explain in a moment. I, and I suspect a number of other noble Lords, walked across to the Queen Elizabeth Conference Centre in July to listen to the "Two Feisty Ladies"—the right honourable Member for Derby South and Mrs Renate Kunast, the German Green Minister for agriculture, when they spoke at a conference. The general thrust of their approach was one with which I had considerable sympathy, although I had a number of disagreements on emphasis and detail. Nevertheless, the points of agreement seemed to be greater than those of disagreement.
As I shall explain in a moment, it follows that the political problems of agriculture and rural Britain should not be and are not domestic party political divisions. After all, the hurdles in the way of progress are the CAP reform and the World Trade Organisation. Since the Berlin Summit 2000 we have seen a formal change in emphasis at European Union
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level. It is what the right honourable Member for Derby South called the second pillar of the CAP; the development of rural development policies. The change of emphasis is, of course, too slow and the myriad of outstanding problems cannot be resolved in the 2002 review, but we are on the move and evolution of the concept of national envelopes in the way in which the CAP is delivered, and giving more and more discretion to member state's governments in delivering the policy, has the potential to be helpful.
One must also remember that, especially as regards some of the southern European countries, the CAP is a kind of sacrament and that this special quality is not only associated with the policy itself but is in equal measure attached to its outdated delivery systems. An ally in the assault of the sacred CAP is the World Trade Organisation, which for good reasons has its targets focused on trade distorting output encouraging subsidies.
What is required is the drawing together of the various potential allies in a united coalition to move the argument on and to develop policies which flow from them in a direction in which we in Britain as a whole want to see. I believe that there are many shared fundamental views between all political sides in the debate. I want to know what steps the Government are taking to ensure that politicians who are not of their party—for example, Commissioner Chris Patten or me and my Conservative MEP colleagues—have some ownership and participation in these policies and that we all advocate the kind of changes that we desire to see in the international fora where many of the decisions which matter will be taken. In those the divide is essentially along national, not ideological, lines. I have seen at first hand the way in which the Germans do this very effectively. The German Government know that they cannot themselves do the kinds of things that they want. I should like to know how the Government propose to draw all of us into this campaign.
Farming is a very circumscribed industry. Under Article 33(1)(b) of the European treaty the Government have a duty to,
"ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture".
I should, therefore, like to ask the Minister how that squares with current net farm incomes which, as can be seen from official figures, corroborated by the recently published Deloitte Touche report, are in some sectors below the level of the minimum wage. Can the Minister explain to the House how farm incomes should be allowed to drop below a level which the Government consider to be too low for an employer to offer when they have a treaty obligation to increase them? If I may describe myself as a simple Cumbrian farmer, it does not appear to stack up.
Probably the single most important factor in this decline is the strength of the pound against the euro. There is absolutely no need to join the euro to iron out the distortion and injustices that it has caused. Agrimonetary provisions are available, but why have they not been used? To have done so certainly would

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have helped to ease, but only eased, the plight of the countryside and, to some extent, helped the Government to honour their obligations. I hope that the Minister will not give us the old chestnut about agricultural support being manifested straight away in increased land values. After all, there is no direct correlation between them, as can be clearly seen from the recent relevant figures.
I referred earlier in my remarks to the Cumbria task force which is now looking at means of reviving the devastated Cumbrian economy. Increasingly, it is clear that however laudable may be the aims of policy—there is a great deal of common ground between all sides about what the Government aspire to for the countryside—the means to get there are not in place. Just as derelict inner city areas require, and have in the past received, massive sums of money to pick themselves up by their bootstraps—a number of them have been conspicuously successful—how will we enable rural Britain to move forward having haemorrhaged for so long? After all, bankrupt peasants cannot do it.
As a measure of the importance of this matter it is now public knowledge that the Cumbria task force estimates that it needs about £¼ billion to get itself going again. I shall not even ask the Minister to give an undertaking that the Treasury will not make that money available; I am sure that he can give a commitment to that effect with total confidence. But I ask the noble Lord to give the Government's view on how the actual implementation for their aspirations for rural Britain can be brought about. What we need now are not necessarily new policies but new enabling measures.
Earlier in my remarks I referred to the "Great Mistake", namely the policy of a single land use—agriculture—in the countryside. As we move into a world of greater leisure and mobility the tourist industry in general, and rural tourism in particular, becomes of increasing importance to our country and the countryside. Figures issued recently by the British Tourist Association about the impact of foot and mouth and the atrocities in New York show how important this sector of the rural economy has now become.
In developing rural tourism and suitable businesses located in the countryside it is of paramount importance not to kill the goose that lays the golden egg. After all, one of the reasons for the expulsion of non-agricultural uses from the countryside was their generally intrusive appearance, and visual and physical degradation and dereliction must not be allowed to happen. The way to avoid that is to insist on a high standard of development, but in turn that is expensive. Currently, a rural economy on its knees is in no position to achieve that, so how is it to be brought about?
Probably the greatest single cause of inner urban decline and dereliction was the failure of business to make its own way there under its own steam. The economic haemorrhaging of much of rural Britain—
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not only England but also Wales and Scotland—is propelling these areas towards the same problems of a downward economic spiral.
It is sound policy to attack the provisions of the discredited common agricultural policy for it wastes millions of pounds on doing the wrong things and fails to provide for the things that it should pay for, but, however attractive it may appear to the Treasury to believe it, it may be a mistake to assume that the conclusion to be drawn is that no public money should be spent on rural Britain. Over the past half-century the amount of public money spent on agriculture in this country has more or less halved as a percentage of GDP. We all know that we cannot get something for nothing for long.
Rural Britain contributes a lot to this country and for years much of that has not been paid for properly. The working capital is now running out, and unless it is replenished and a proper return is received the whole thing will seize up. The Government do not want that to happen; they have said so, and I believe them. But good intentions are in themselves insufficient. What we need is a framework that positively promotes the right thing: a policy to get things done and a fair day's wage for a fair day's work. In that regard the Government have European obligations. How are they to meet them? In short, we need means, not dreams. My Lords, I beg to move for Papers.
3.36 p.m.
Lord Judd: My Lords, I am sure that the whole House would like to thank the noble Lords, Lord Inglewood and Lord Geddes, for the opportunity to debate this subject this afternoon. If the noble Lord, Lord Inglewood, will forgive my saying so, his speech today was all the more effective because of the moderation and thoughtful way in which it was presented, in contrast to the noble Lord's intervention on foot and mouth.
If we look to a strategy for the future—I declare an interest as vice-president of the Council for National Parks and member of the north west regional committee of the National Trust—we must address some practical issues which now confront farmers. First, farmers find the existing arrangements hard to operate. The paperwork is onerous and takes up at least a day per week, and obviously the amount of time that is being spent on it is increasing. There is an emphasis on policing with penalties, which does not leave much room for encouraging positive thought and ideas about future action. Farmers are ageing, which raises the question of who will be there to do the innovation. With average subsidies of some £30,000 and incomes of some £6,000 a year, or less in many instances, inevitably that greatly influences agricultural performance. Farmers concentrate on what attracts the subsidy as distinct from what the market might otherwise really demand.
Underlying all this are the distortions introduced by the common agricultural policy. Pillar 1, which represents 90 per cent of what is available, emphasises production; pillar 2, with only 10 per cent, is for the

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management of the environment and related issues. That results in over-production and over-grazing. Where I live—the noble Lord, Lord Inglewood, will know it well—there are severe problems of over-grazing on the fells. Beyond that, it also undermines the attention which should be paid to quality, fattening stock and the rest. We are now reaching the stage where environmental considerations are so crucial to the future of humanity that we must have a change of mindset whereby we begin to regard management of the environment as the dominating concern and talk about how to fit agriculture into that, rather than carry on as in the past by emphasising agriculture and talking about some environmental responsibilities which have to be taken into account in the agricultural priority.
The noble Lord, Lord Inglewood, was absolutely right to emphasise that we must not concentrate simply on the farming community and that there must be an integrated approach—the recent crisis has underlined that beyond any doubt—to tourism, rural businesses, environment and biodiversity.
There is one practical observation that I should like to make to the Minister. I hope that the noble Lord and his colleagues will be able to look at the matter. In the areas where we have national parks we have an ideal opportunity to present model schemes for an integrated approach to meet the reality of the interdependence which is there and to produce practical policies which may turn this to an advantage rather than seeing it as a problem to be contained.
Lastly, I hope that we do not drift into a situation in this country where we begin to see an adversarial relationship between the interests of the countryside and those of urban areas. The countryside is tremendously dependent—consumers, wealth production and the rest—on urban communities. Urban communities are desperately dependent on the countryside, not least for recreation and regeneration, but also for what it produces. We need integrated policies that recognise this, stress the inter-dependence and make an advantage of it. I hope that we shall not simply try to return to the situation that existed before the awful food and mouth experiences, but that we shall treat the severity of those experiences as an opportunity for some genuine new thinking about new strategies to meet the century ahead.
3.41 p.m.
Lord Mackie of Benshie: My Lords, I do not want to talk a great deal about the strategy. That has been put over quite well. I agree that agriculture is not everything in the countryside. In fact tourism has probably suffered more. However, I want agriculture still to be considered for what it is—an extremely important industry. It is one which has done this country a great deal of good in the past and could well do it a good deal of good in the future.
I have just been to the national fruit show in Kent. It is a great pity that the noble Lord and the Minister could not go. I understand of course that they are extremely busy. It was fascinating. The industry is
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doing all the things that it should. It is looking at the breeding of new fruits to counter the various diseases that attack them. It is talking about organic fruit. It is marketing. It is introducing new machinery. Everything that an industry should do to improve itself in marketing and the production of the goods is being done. It has not fallen into the error such as one sees with imported strawberries where most of them look beautiful but have the consistency of a carrot and the taste of a turnip. That industry has gone solidly for the strawberry that we used to like. It is a very important part of industry. It is an example. It is not heavily supported at all. However, it is doing extremely well.
The Government must look in any future reorganisation at imports. So far as we know, foot and mouth came from imports and their control. There is no question that many of the practices abroad when producing agricultural produce lower the costs of our competitors enormously, providing them with an unfair advantage over our farmers. The Government must look at that.
The main point I wish to make concerns the foot and mouth epidemic. We must learn the lessons from that. The biggest lesson that the Government must learn is that we need more official vets. Half the trouble was caused by the slowness in analysing the outbreaks because of an enormous shortage of vets. We had to appeal for vets from all over the world. I am afraid that we must spend more money on a more competent and larger official veterinary body looking after the health of the cattle and sheep and the animals of this country.
In the countryside as a whole I agree that agriculture has to be replaced in many cases by tourism, small industry or bigger industry, whatever it may be. There is one factor that stands against people working in the countryside. That is the business of houses which were built to let being sold to the children of elderly people who then sell them. They are bought by people who want to live in the country as a second, or as a first home. People—decent chaps—who want to work in the country cannot get a house. The Government must stop the sale of these houses which are built and subsidised publicly and keep them for letting for which they were meant.
One other matter that the Government might look at is the offering to farmers in the hills of £10 for a lamb. If one cut off the hind legs and sold them separately one would get £10. However, to buy them at a tenner and destroy them is not good policy.
3.45 p.m.
Lord Skidelsky: My Lords, I recognise that this will be a wide-ranging debate because, as the noble Lord, Lord Inglewood, said, countryside issues form a seamless web. I recognise that the health of the countryside is about much more than the health of farming. Nevertheless, I want to concentrate on farming in the short time available to me. In particular, I should like to make four propositions about farming which, from an economic point of view. I think I am in a position to make.

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The first is perhaps the most unusual. We can no longer safely rely on foreign imports for all our food requirements. That has been a long-standing security argument for a country growing its own food. It has been strengthened by the events of 11th September. I do not want to make too much of that argument, but, undoubtedly, transport costs have increased as a result of the outrages of that date. Therefore, the argument for growing as much of one's food as possible, and in particular the argument for local markets, has been strengthened and the consumer's perspective on these matters is no longer the only one to adopt if we are thinking about the future.
The second argument is also a familiar one but needs to be emphasised. A vibrant national society needs its citizens to develop the full range of their natural talents and interests. An over-specialised society is one that is impoverished, spiritually and intellectually. That is an argument for preserving a variety of activities in a country and not adopting an exclusively urban or an exclusively industrial perspective. One does not have to say that rural life is healthier than urban life, although many of the statistics suggest that it is; it is just a necessary component of a varied life.
A third argument is that a countryside confers benefits on visitors whether they come from England or abroad. They cannot readily be charged for those benefits. One can charge someone for a room in a hotel, a meal or a visit to a historic house. One cannot charge them for most of the settings which make these amenities attractive to people. Those settings are essentially provided by the landscaped countryside which is and has been the work of farmers over the centuries. That is a familiar argument for subsidy.
Finally, there is no doubt that most people in this country strongly want the countryside to be preserved, even if they do not visit it or experience it that much. It is a value. It is part of what Britishness is about. For that reason, I am pleased that the Government have set up the new DEFRA to supervise the affairs of the countryside. I hope that the Secretary of State will not be invisible and that she will soon make her own views and those of the Government known.
3.50 p.m.
The Lord Bishop of Peterborough: My Lords, I speak in the debate not only from knowledge of my own diocese, which extends across the whole of rural Northamptonshire and the county of Rutland, but also from four years' experience as Bishop of Lewes in Sussex and with long-standing knowledge of Cumbria, where my father still lives. I was in the north Pennines when the last cluster of outbreaks of foot and mouth disease occurred in Allendale at the end of August. For the first time in my life, I found myself living within the "blue box".
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In the short time available this afternoon I can touch on only a few of the range of issues which were raised by members of the General Synod in its moving debate held in July. As the noble Lord, Lord Inglewood, has already indicated, the effects of foot and mouth disease on the farming and tourism industries have been devastating, but they have only accelerated processes that were already under way. The economic shape of agriculture will inevitably change. Indeed, the pattern of subsidies has already changed to encourage a lower level of stocking and to promote an environmentally friendly approach.
I believe that farmers deserve our thanks more than our criticism for their care of the environment, but so-called green farming must be profitable if it is to survive. Farm gate prices must reflect more closely the price we pay in our supermarket-driven economy. Farmers tell me that those who can sustain their incomes from a variety of sources will survive. I fear that many smaller tenant farmers may not. There is an urgent need both for alternative employment to subsidise farm incomes and for affordable rented housing for those who, with heavy hearts, decide to leave the livelihood they have known and loved.
The Church-led initiative, the ARC-Addington Fund, supported by the Royal Agricultural Society of England, has been able to offer some help. To date it has raised over £10.5 million and has distributed some £8.6 million through our agricultural chaplains and the Farm Crisis Network to over 18,000 applicants.
But if regeneration is to take place, we must restore a sense of confidence, both that the interconnectedness of farming, tourism and rural businesses is understood and that the need for a vibrant and profitable agriculture remains part of the strategy for the recovery of which the noble Lord has spoken. That is particularly true for hill farmers, many of whom are not members of the National Farmers Union, and who sometimes feel that neither their interests nor their experience is being heard.
Last November's White Paper, written of course before the recent outbreak of foot and mouth disease, recognised that rural life and the rural environment as we know it would not exist without farming. A vibrant countryside needs a vibrant agricultural industry. The unique character of our rural areas which is so attractive to tourists is a managed character—centuries of agricultural practice and experience have made it the place we value.
Therefore we must seize the opportunity to address certain fundamental questions. What is the nature of our countryside and what is it for? How can we be good stewards rather than exploiters of its resources and its beauty? How can we rebuild lives and an economy which will sustain families and our rural communities?
The Churches see themselves as active partners in that process. They value the countryside as a spiritual resource as well as the base for a vital industry. Church buildings in themselves are major tourist attractions, as well as key centres for the community. But local initiatives need support. The economic downturn and

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the devastation in our sheep and cattle, as well as the international situation, mean that rural communities need financial help as well as our active encouragement. Whatever support the Treasury can give will not be wasted. To quote a Cumbrian farmer:
"Government support for the recovery programme will be fully repaid in the rebirth of a new and active rural economy delivering the products and environmental goods which are demanded today".
That must be our aim.
3.55 p.m.
Baroness Gibson of Market Rasen: My Lords, it is a great honour to extend the congratulations of the whole House to the right reverend Prelate the Bishop of Peterborough on his maiden speech. In my brief career in this House, it was one of the most stimulating maiden speeches that I have had the honour to hear.
If I may say so, the right reverend Prelate has gained a reputation in the Church of England for a combination of scholarship and pastoral care. He served his time—perhaps I may put it like that—as a suffragan bishop and his promotion to a diocesan bishop was welcomed, I understand, with undiluted enthusiasm by all those who know him. The right reverend Prelate carries with him a reputation for not being shy of controversy. I am sure that all Members of this House hope that he will endorse that reputation in his future contributions to our debates.
I begin by thanking the noble Lords, Lord Inglewood and Lord Geddes, for tabling this subject for debate today. I want to concentrate on a wide-ranging strategy for our countryside which was published last November in the Government's rural White Paper. At the time it was widely recognised as a ground-breaking document. No previous government have ever made such a comprehensive commitment to our rural communities. As someone who comes from and has lived most of my life in a rural area, I certainly recognise its importance. I also know at first hand how rural communities declined over the 20 years prior to 1997. Indeed, the electorate also recognised that. That is why, since 1997, it is Labour Members of the other place who represent more rural seats than any other party.
There will not be time today to outline all the Government's strategies, so I have chosen what I believe to be the key ones. The first is the revitalisation of market towns. The Government have pledged to speed up revitalisation and to ensure that they are vibrant places in which to live. Major initiatives relate to good quality public transport, affordable housing, more power to local communities and parishes to ensure that their voices are heard in local government, as well as more support for farmers and local businesses.
Secondly, the Government have made pledges to rural transport, which is so vital, for example, to the elderly, to those with disabilities, to people with young families and to those who need to use public transport to travel to work. Recognising that a good number of families living in rural areas do not own a car, the
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Government have allocated £62 million to improve rural bus services. Contrast that with the previous administration's rundown over two decades of local public services.
I turn next to housing—a further must if our rural areas are to retain younger people and our retired folk. Such housing must be affordable and be located in local villages and towns. The Housing Corporation has already announced that it will double its provision of such homes by 2004.
As regards schools, between 1983 and 1997, over 25 local schools were closed each year. In contrast with that policy, the Government have pledged an extra £180 million to help small schools. M y daughter works as a school secretary in a lovely village in Suffolk. I know at first hand how the Government's measures are helping villages to retain and improve local schools, which are a vital part of the rural way of life.
Lastly, I turn to health. So many local hospitals were closed and their remits changed in the 1980s and early 1990s, with the result that vast numbers of people living in rural areas now have to travel many miles to their nearest hospitals. That is why the new mobile units, hospital tele-links and primecare centres, proposed by the Government in the NHS Plan, are so welcome.
I could go on, but time does not permit. I hope that, in this brief outline of the Government's initiatives, I have been able to demonstrate the Government's commitment to and strategy for the countryside as a whole. As Margaret Beckett said in a recent speech:
"Initiatives taken by this Government represent the most substantial and sustained investment in rural areas that we have seen by any government";
and that is how it should be.
4 p.m.
Earl Ferrers: My Lords, I should declare an interest in that I have been involved in agriculture all of my life.
It is often said nowadays that the countryside is going through the worst depression since the 1930s and before. So it is. I agree with my noble friend Lord Inglewood that the problems being faced by rural communities were there before foot and mouth and that the disease has merely exacerbated and accelerated them.
I agree with the right reverend Prelate the Bishop of Peterborough when he said, in a notable maiden speech, that the heart of a successful countryside must be a successful agriculture. He is completely right. The prosperity of the countryside, of the environment, of the villages, of the country towns, of the many manufacturing companies and distributors who operate there, and of the many people who work within them, depends on a vibrant and successful agriculture.
Of course, agriculture has been smitten recently by salmonella, swine fever, BSE and foot and mouth, together with the collapse in corn prices and milk prices. Average farm incomes—excluding hill farmers and intensive pig and poultry farmers—are apparently now £2,500 a year. No industry—indeed, no individual

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business or individual person—can stick that kind of thing for long; and they have not. Some 50,000 people have left agriculture this year.
I want to make two points. The first is that confidence must be brought back into agriculture. It is, of course, easy to say that; it is much more difficult to do. But as long as the countryside is considered to be a place full of disease and burning carcasses, where walking is restricted and "keep-out" notices abound, no one will want to visit it. Tourism will suffer, as indeed will agriculture.
We all know that foot and mouth has caused the most unbelievable devastation. People have seen their life's work destroyed and animals they have loved—sometimes even their pets—killed. We know the reason. It is the slaughter and compensation policy of which I have always, up until now, been in favour. Whether we should continue with that policy or move to another is a deeply complicated scientific matter. Personal views should not muddy the waters until such time as a review has been undertaken in the aftermath, as it were, of the battle. I agree with my noble friend Lord Inglewood and the noble Lord, Lord Mackie of Benshie, when they express surprise that the Government have so far rejected a full public inquiry. Like them, I urge the Government to hold one into the current foot and mouth epidemic.
As my noble friend said, we are left with the inescapable feeling that the Government are afraid of a public inquiry, either for what it will say or because they may have something to hide. I cannot believe that they have anything to hide. Everyone involved in the epidemic worked their hardest and to the best of their ability for the public benefit. The point of an inquiry would be not to criticise, to blame or to carry out a witch-hunt, but to try to learn, in the aftermath of this devastating outbreak, what went right and what went wrong in order that we might be better placed to deal with any future outbreak should it occur.
After all, one way or another, this disease has cost £5,000 million pounds. That really does deserve an inquiry. I hope that the noble Lord, Lord Whitty, can give us some encouragement that a public inquiry will take place. The Government have set up some eight inquiries into all kinds of different matters, but I do not think that they will be suitable because they either overlap or are not extensive enough.
My second point is one with which I have assailed your Lordships before. On the grounds that I will be flattered if your Lordships remember anything that I have said by the end of the debate, I should like to say it once again. The Government have made it fairly clear that, in their view, what matters in the countryside and the environment are the birds and the bees, the wildlife, the flora, the fauna and the visitors. The production of food is de minimis; we can get that elsewhere.
I do not have time to dilate on that subject. However, I should like to remind your Lordships that in 1960 there were 3,000 million people in the world. That figure has doubled in the past 40 years to 6,000 million; and in the next 25 years it is likely to double
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again to 12,000 million. So some people will in the course of their life have seen the population of the world multiply four-fold. That is a devastating thought.
I agree with the noble Lord, Lord Skidelsky, that we should be a supplier of food. We cannot afford to say, "The production of food does not matter. We can get it elsewhere". In the short term we may be able to; in the long term we may not.
Agriculture has been one of the strategic defences of this country. In their desire to "modernise" everything, I hope that the Government will not make the mistake of making impotent that particular line of defence or of making impotent agriculture's traditional—and still hugely important—role of providing food. On that depends so much the health of the countryside as a whole.
4.5 p.m.
Lord Palmer: My Lords, I, too, thank the noble Lord, Lord Inglewood, for his succinct and realistic appraisal of the crisis currently being experienced by all those involved in the rural economy. As other noble Lords have said, it must not be forgotten that this deep, deep depression was well and truly rooted prior to the ugly appearance of foot and mouth disease.
I must, as always, declare an interest as someone who tries to farm and as president of the British Association of Biofuels. I also share my home and gardens with the visiting public and I am heavily involved in all aspects of rural tourism.
The noble Lord, Lord Whitty, said on 19th August:
"This Government is fully committed to a viable, vibrant and sustainable British agricultural sector containing both livestock and arable farms".
Those words should be music to all of those involved in the rural economy, especially when he went on to add, much to the amazement of many,
"This Government is in the business of construction not demolition".
It is time for plain speaking on countryside matters and also time for new ideas and solutions. The countryside is our main food factory. It is also the backdrop for much of our tourist industry and a playground for many.
Our farmers currently produce 80 per cent of the temperate food which can be grown here, and they do so to the highest possible standards. This work has not been helped in the past by the activities of MAFF. Let us hope that DEFRA shows more knowledge and sense. But the DEFRA official who recently asked an acquaintance of mine what sex his bull was does not exactly inspire confidence.
However, we now have more land than is currently needed for food production, although that may not always be the case. Fuel, however, is another mainstream product essential to our survival. The time has come to get road fuel from spare farmland, and so help safeguard our whole economic system.
Old MAFF policy on energy is in disarray and ridicule. For all the talk of biomass and electricity generation, only some 1,500 hectares of biomass

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coppice has been planted—0.01 per cent of UK farmland. It is hard to believe that civil servants have so misguided Ministers that where road transport and rural policy come together the results have been so totally pathetic—a market share of only 0.01 per cent for road gas and 0.01 per cent of farmland for energy.
There is, however, a clear and logical way forward. I believe that our farmers should be turned from fuel protestors to fuel producers. British agriculture could within 10 years be producing 10 per cent of our road transport fuel, in the form of biodiesel and bioethanol, from 10 per cent of our farmland. That surely must be attractive to the Government now that Saudi and other oil supplies are in doubt. The biofuels are particularly clean, both on tailpipe emissions and on greenhouse gas emissions. They also add greatly to biodiversity.
How can this most attractive state of affairs be brought about? Very simply. Just give the biofuels, bioethanol and biodiesel, the same duty rebate as has already been given to the gas fuels—that is, 4.5p per litre. At that duty rate the industry will spring into life and rapidly eclipse the misguided gas and biomass policies of the old DETR and MAFF. Major companies with world experience and fully adequate capital are waiting in the wings to revitalise British agriculture and the rural economy with a brand new business—the "British Agricultural Energy Industry".
I beg the Chancellor in his November Statement to take this route, which will ensure safer and sustainable fuel supplies and a revitalised agricultural industry. It will produce exactly what the Government and the nation want and need—that is, worthwhile amounts of clean, green road transport fuels.
4.10 p.m.
Lord Greaves: My Lords, I, too, congratulate the noble Lord, Lord Inglewood, on initiating the debate. Not for the first time, I have been overwhelmed by the amazing amount of good sense in remarks from all corners of the House.
I want to refer to one group of people who use the countryside; namely, hill-walkers and climbers—those who might generally be described as mountaineers—and the contribution that we can make to the future, particularly of the upland areas of this country which are in many cases in the most need and suffer the greatest deprivation.
As has been said, the foot and mouth outbreak has pinpointed the close relationship between farming and recreation in rural areas. The balance varies. It is claimed that in the Lake District the ratio of GDP from tourism as opposed to agriculture is 10:1. In other areas the importance of tourism lies in topping up local economies and helping them to stay afloat. If they were dependent solely on farming they might not be able to survive.
Tourism providers have suffered in ways that have been an eye-opener to many people, particularly in the uplands. As the noble Lord, Lord Inglewood, said, the
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position in the Lake District is still dire. Many guesthouse owners have not paid their mortgages since March and are wondering what the banks are now going to do.
But the countryside covers diverse areas. I shall refer to the hill country in England and Wales, where farming has always been hard. In some places there is a great deal of tourism; in others—for example, in parts of mid-Wales and the Pennines—there is little other economic activity. Certainly, without farming subsidies, such areas would have closed down.
The closure of the mountain areas and hills during the foot and mouth outbreak has shown the importance to the local economy, even in the more peripheral areas, of visits by hill-walkers and climbers. But the extent of that contribution is not well documented. Some research has been done in the north-west Highlands of Scotland, in Wester Ross and in Cromarty. In a more lowland area, it is estimated that the long-distance Pembroke coastal path, which I know well, brings in some £14 million per annum from walkers, so that is important.
The British Mountaineering Council, of which I am a member, has proposed a research project to determine just how much hill-walkers and mountaineers contribute to the rural economy in such areas and, more importantly, how much more could be contributed if modest, small-scale local and national projects were put in hand. As someone who visits the upland areas frequently as a day-tripper, I can drive into these areas, parking is free, I can go climbing or walking, and then go home again. We may then have a meal at the pub near my home. I am always conscious of the question: what have I contributed to that part of the Pennines or the Peak District in so doing?
I commend to the Government the paper produced by the British Mountaineering Council. It has already been presented to the National Access Forum for Wales. I shall be happy to provide the Minister with a copy. I ask him to give a. commitment that he will at least read it and respond to the BMC's proposals.
4.14 p.m.
The Lord Bishop of Hereford: My Lords, I, too, thank the noble Lord, Lord Inglewood, for introducing the debate. I congratulate the right reverend Prelate the Bishop of Peterborough on his excellent maiden speech. It is good to have another person on these Benches who understands, and cares and speaks about, rural issues.
The dark shadow of foot and mouth is still present. The Prime Minister has talked about it having a silver lining. The right reverend Prelate the Bishop of Peterborough spoke about the work of the ARC-Addington fund in terms of the financial help that it has brought to many people in desperate straits. Such help will continue. ARC-Addington has also started a fodder bank which is helping to meet the needs of those who run out of supplies or are likely to do so very soon as a result of the movement restrictions and the desperate welfare problems still faced by many livestock farmers. The Church will continue to

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maintain a presence and a ministry, even in the deepest countryside—a ministry increasingly shared between clergy and lay people.
What is needed is a strategy that recognises the interdependence of farming and local business and tourism. We need viable communities able to sustain schools, shops, pubs and social life. The strategy must allow some degree of continuity and stability. Farming works on a four- to seven-year cycle. It cannot survive without a steady, coherent government policy. The loss of expertise and skill over recent years has been deeply serious: 41,000 people left the farming industry in the two years before foot and mouth struck. In almost every case that represented an individual personal tragedy involving a sense of failure and betrayal of a tradition stretching back over generations. The personal human cost of that change has been very high and is seldom recognised.
I fervently hope that the Minister will be able to assure the House that the Government do indeed have a strategy or at the very least that they intend to have a strategy. The rural White Paper was alarmingly vague about the strategy for farming, and recent signs have been distinctly mixed. The Secretary of State, Margaret Beckett, spoke honeyed words at the conference to which the noble Lord, Lord Inglewood, referred and at which I was present. However, her speech did not compare favourably with that given by the German Minister, Renata Kunast, which was clear, coherent, passionate and highly specific, inspiring confidence that she knows how to navigate the labyrinthine bureaucracy of Brussels. I am not sure that our own Government have those skills.
Yet although the words at the conference were encouraging—and other speakers have referred to "encouraging" statements by the Government—at the Labour Party conference there was what was received by the farming community as an abrasive, even hostile, catalogue delivered by the Secretary of State of criticisms of farmers, of their unwillingness to change, and of their obsession with—believe it or not—high prices for food. How ironic, and how profoundly unfair, with farm gate prices at their lowest in real terms for generations and general popular spending on food less than half in percentage terms of income compared with 40 years ago. How can the Minister talk about high prices and criticise farmers for not being willing to change when most of them have been changing as fast as they can in recent years?
Certainly, we need more change. We need a tripling of organic production. Those noble Lords who were up with the lark this morning listening to "Farming Today" will have heard a wonderful item about organic cider in Herefordshire. But let us have a tripling of all kinds of organic production, more energy crops—I agree with the noble Lord, Lord Palmer, as usual—but also the generating capacity to make use of them if they are for energy generation; more emphasis on integrated crop management; truly intelligent farming; and consistently high animal welfare standards. In addition, I beg for a menu of environmental and social benefits into which farmers
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can buy, according to a sliding scale of easily intelligible and carefully targeted financial support. We need countryside stewardship for everyone, without the hurdles that must presently be jumped in order to get into such schemes.
There are many excellent farmers—imaginative, highly skilled and extremely hard-working. Many care deeply about social and environmental benefits. Last week, I had the privilege to be present at the Silver Lapwing Award ceremony where three farmers received rewards for splendid performance for farming commercially but with excellent environmental results. There are farmers who are willing to change and willing to work. We must have a strategy. I hope that the Minister will give us real assurances about that.
4.19 p.m.
Lord Plumb: My Lords, it is a pleasure to speak after the right reverend Prelate and to listen to the maiden speech of the right reverend Prelate the Bishop of Peterborough.
I thank my noble friend Lord Inglewood for initiating the debate and I thank those who have spoken for their broadmindedness in looking at the whole situation while we await the report of the Rural Task Force. Obviously the full impact on rural businesses following foot and mouth and the dramatic fall in income for farmers, tourism and all who live in the countryside will take time to become apparent as debts increase. Some estimates show a figure in excess of £3 billion and a survey conducted by Deloitte & Touche shows a fall in profits of £2,500 a year for an average 500-acre farm.
It is a tribute to many farmers that they have trimmed their costs in order to live, but there is no room for investment. I follow five generations of farmers. I have not seen a time like this in my memory of farming, and the motto of my family is, "You will leave this earth in better shape than you found it". We find that difficult to accept at this time.
Both the arable and livestock sectors of farming are existing on subsistence returns, and for many the future looks bleak. However, 15 days without an outbreak of foot and mouth disease is a relief and a hopeful sign. When the Minister replies, can he say, in reply to the question of the right reverend Prelate the Bishop of Hereford, what action the Government will take to ease the animal welfare problem that will become apparent in the next few weeks and months? It must be realised that cattle require housing, bedding and fodder and that although the RSPCA, the Addington Farm, the RABI and other charitable organisations are doing their best financially to help areas of need, a hard winter can create real problems for stock and for stock keepers. Now is the time, I submit, for the Government to give help in addition to that voluntary help.
Before the committees of inquiry which are sitting issue their reports, will the Government give an assurance that they are willing to stop imports of meat from countries where foot and mouth disease exists? Over the past two and a half years, 37,000 tonnes of pig

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meat have come in from 26 countries where foot and mouth disease exists or is endemic. The phyto-sanitary measures do exist, as approved by the World Trade Organisation, but we should surely take some stringent food security measures, as is done in Australia and the United States of America. I know that measures have been taken but they are not tough enough. That is the only way that we can move towards satisfaction in the future.
In the wider field the reasons why the economic fortunes of British agriculture are tied to the exchange rate are well rehearsed. In the past five years farmers were eligible for more than £2 billion in compensation, while only £783 million has been paid out. Fifty-seven million pounds is currently available for the arable sector: that is, if it is applied for before the end of this month. The system is destined to cease at the end of this year. As my noble friend Lord Inglewood said, it ought not to be necessary. Will the Minister give an assurance that he will at least apply for the amount due before it is too late?
4.24 p.m.
Lord Beaumont of Whitley: My Lords, I thank the noble Lord, Lord Inglewood, for introducing the debate but I challenge the first point that he made. I think that agriculture has been, and is, the basic occupation of the countryside. I should like to see the noble Lord's evidence that in the 17th and 18th centuries this was not so. The fact remains that one of the most important things that any government can and must do is to feed their people, and if they are going to do so they must ensure food security. I am sorry that the noble Lord, Lord Skidelsky, is not in his place because he made that point very strongly; and in case he was short of a political party, I was going to offer him a place on these Benches. I should like also to welcome the maiden speech of the right reverend Prelate the Bishop of Peterborough. It is good to have another clerical voice in this Chamber speaking such sensible words.
Having made my first point, which is that agriculture is central to the countryside and that all the other things by way of adding to it are useful, helpful and worthy in their own right but are not central to the main point, I need to make my second point. The way to improve rural life is to repopulate it with working people. That means far more farms and smaller farms. More farms mean more food produced per acre and more food per person working on them. The one important area where more is not produced is per pound invested. That is one of the places where we have gone wrong over the years. These days that is always ignored in favour of monetary capital. The most important factors are food per acre and food per person, particularly if the land is looked after, as it always is, by small farmers who have their emotional capital invested in the countryside in a way that the big farms which are run by companies in London do not.
The solution for producing more farms and more farmers is obvious, though not simple to provide. It is to abandon the doctrine of free trade, which is a con trick thought up by Liberal politicians, I regret to say,
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to feed the urban masses cheaply at the expense of the farmers. Such bribes always bring in their wake a vengeance, and we have vengeance at the moment. It is that farmers are suffering, the countryside is suffering and we are all suffering. We must turn back from our tracks.
4.27 p.m.
Lord Dormand of Easington: My Lords, your Lordships are aware of the great problems caused by foot and mouth disease, particularly to the tourist industry. Indeed, those problems have been referred to by more than one speaker. I wish to draw attention to the particular additional difficulties being experienced in the North East of England, and in doing so I declare an interest as vice-president of the Northumbria Tourist Board.
Tourism in the region generates in excess of £1.5 billion and employs more than 60,000 people, which is seven per cent of the area's workforce. I have drawn attention many times in your Lordships' House and in another place to the fact that the North East continues to have the highest rate of unemployment in the United Kingdom. I say "continues" because the region has had the highest rate of unemployment—ever since such statistics were first compiled. The devastation of coalmining, shipbuilding and the steel industry were blows from which we all knew it would take years to recover.
Tourism is now at the heart of the North East's economy. Then came foot and mouth disease, which was a serious setback to the progress which had been achieved. Then came a second calamity—the resurgence of foot and mouth disease which, as your Lordships will know, is centred in Northumberland and Durham. So the fight has begun all over again. Although tremendous efforts have been made by the Northumbria Tourist Board and many other organisations in the region, it is essential that the Government should increase their contribution to the area's recovery. Can they, for example, make much more use of Section 10 of the Development of Tourism Act to develop and improve hotels in the region? We believe that our assets, character, identity and culture are different from those of other areas. I hesitate to say that they are better but they are certainly different and are worthy of maximum assistance from the Government in retaining that character.
To recover from the two body blows which I have described there will need to be large-scale advertising and large-scale marketing campaigns, both of which will be expensive. I have spoken of special problems affecting tourism in the North East. I hope that the Government appreciate, therefore, that special and urgent measures are necessary to deal with them.
4.30 p.m.
Lord Vinson: My Lords, it is a great honour to follow so many knowledgeable speakers. I should declare a particular interest in the subject in that I farm in Northumberland, a county that has been badly hit

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by foot and mouth and I am also a past chairman of the Rural Development Commission which has now been absorbed into the Countryside Agency.
I wish to make two points. The first reiterates one made by the noble Lord, Lord Plumb. I suggest that before any programme for rural economic regeneration is introduced the first thing to do is to take steps to prevent a further outbreak of foot and mouth. The present outbreak was not caused by some poor pig farmer feeding swill. There is nothing inherently wrong in feeding swill. Indeed, to throw away millions of tonnes of food that is good enough for humans and say that it is not good enough for pigs makes a nonsense of all the arguments for recycling.
The fact remains that we have a damaging, sloppy and ineffectual meat import policy which allows the importation of contaminated meat from countries that have endemic foot and mouth, or have it without owning up to it. Unless rigorous controls are introduced, undoubtedly we shall face a further foot and mouth disease epidemic 'ere long. It would be a waste of time to introduce a programme of rural regeneration until we have closed the door to contaminated meat imports. I hope we shall hear from the noble Lord, Lord Whitty, that steps are being taken to achieve that.
When I was chairman of the Rural Development Commission we were able to introduce a number of measures to encourage indigenous enterprise, many of which are still in place and are just as important today. However, in pursuing those policies we were deeply aware that the changes they helped introduce were only peripheral to the huge and underlying economic impact of national and EU policies. The real issues, like anywhere else, remain employment laws, the cost of fuel, the rate of exchange, et cetera. One must be careful not to advocate headline grabbing but merely tokenist measures that are basically ineffectual. Village appraisals and post buses are peripheral matters.
Any strategy to help rural areas—this is my second point—needs to differentiate between those parts of the country where alternative businesses such as home computing and local markets stand a reasonable chance of success and those more deeply rural parts of the country where the basic economy will have to continue to rely on agriculture—areas where tourism is already up to capacity. I was delighted to see that the Minister in the other place, Mrs Beckett, endorsed that in a speech the other day when she said:
"I recognise the role of agriculture within the rural economy. It remains and will always remain the case that agriculture is a vital, even essential, ingredient in its life and prosperity".
That is so true of that great industry.
The problem with our agriculture and, indeed, with agriculture world-wide is one caused by overproduction, and in our case over-production exacerbated by an over-valued pound. Overproduction has led to the collapse of prices worldwide, prices that do not reflect in any sense the world median cost of production but are dumped market clearing prices in practically all instances.
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The major question remains of how to bring supply and demand into balance, both nationally and internationally. But meanwhile governments worldwide are subsidising their agriculture to prevent it going bankrupt in order to ensure next year's supply of food. I quote from the Farmers Weekly:
"President George Bush this week signed off another emergency package for his country's beleaguered farmers—the fourth bailout in as many years … The latest pay out means that the US have spent over 30 million dollars (that is over 21 million pounds) in four years in emergency farm support".
The fact remains that currently one either has to have subsidised agriculture or no agriculture. If food is being sold below the cost of production, it is not unreasonable to ask "Who is subsidising whom?" Is such support aimed at reducing farm output so that supply and demand come more naturally into balance? If we wish to have a sustainable rural economy, we have to have sustainable farm incomes. I hope that this key factor will be at the heart of any plan for rural regeneration.
4.35 p.m.
Lord Kimball: My Lords, the Secretary of State in another place used to have a Lincolnshire seat. However, she lost it and it is depressing and quite frightening that she now believes that farming is an optional extra in the countryside today. It was No. 5 in the list of priorities which she mentioned in her speech at the Labour Party conference. As the noble Lord, Lord Plumb, said, I fear that she will lose out in the next round of agricultural spending. I doubt whether we shall get the extra money available under the agricultural money scheme. The Chancellor is bound to get his own back on farmers in the near future.
The rural economy today can be transformed only if there is a more flexible planning system—for example, using old farm buildings to accommodate tourists, or even office blocks. I hope that the Minister realises that DEFRA does not have the right to be consulted on planning applications. That is an anomaly when farmers are being asked to diversify. The Minister, when replying to debates, gives us all kinds of answers, but I am afraid that there is little follow-up. I hope that he will follow up that point about DEFRA and planning applications.
The Government seem to believe that there will be a major shift in the common agricultural policy. The lobby in France and Germany is less strong and less vociferous than it was, but things will change slowly. We shall certainly see in this country a shift from headage payments to acreage payments. However, I was impressed when I got in touch with the local agricultural college in Leicestershire to discover that, despite all the problems of zero farm incomes, the number of people applying to Brooksby Agricultural College is greater than at any time over the past three years. Young people believe that they can turn this country round. Farmers must continue to add value to their own products and sell them to the customer either wholesale or retail. What we must avoid is a subsidised theme park. We must be certain that taxpayers' money is used in a way that Whitehall believes might be useful.

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Over the past eight months the Daily Telegraph has kept us informed about the spread of foot and mouth. It has not always been easy. DEFRA has been on strike in Nottingham and, previously, in Northumberland. I had hoped that the Secretary of State might have given better leadership. However, for the past 15 days there has been no mention in the Daily Telegraph of foot and mouth. We are grateful for the way in which it has kept the matter in the public eye.
4.39 p.m.
Lord Taverne: My Lords, I address one narrow point: the relevance to the future of the countryside of organic farming. My points are my own and not those of my party because I want to challenge the common view that organic farming should be encouraged. I am sorry to differ in that respect from the right reverend Prelate the Bishop of Hereford, for whom I have immense respect.
Organic farming originated in the mystical, back-to-nature philosophy of Rudolf Steiner, who had some unsavoury followers in Germany. It has developed since then, but, as was made clear by the evidence given to the House of Lords Select Committee on Organic Farming, it is still not based on science. Even its supporters acknowledged that anyone looking for logic should not look to the rules of the Soil Association or the UK Register of Organic Food Standards. Those rules are fundamentally illogical and contradictory. They allow the use of some highly toxic inorganic compounds, such as copper sulphate, as well as spraying with the pesticide bacillus thuringiensis, to which the Soil Association violently objects when its gene is inserted into a plant by gene splicing.
It seems that people buy organic food because they believe that it tastes better, is safer and is better for the environment. That is why they are willing to pay a large premium. Blind tests do not bear out the claim that organic food tastes better. Because it has a short shelf-life, it is fresher than most conventional foods and fresher food tastes better, but it was not found to taste better than fresh conventional food.
The Food Standards Agency has examined claims that organic food is safer, but found no evidence that it is. In fact, articles in Nature have cited evidence that it can be less safe. There are special risks stemming from the fact that organic farming uses animal waste as fertiliser, which can be a reservoir of enteric pathogens. It has certainly not been as thoroughly tested as conventional food—or, for that matter, genetically modified food.
The main claim is that organic food is better for the environment. Many people take up organic farming for admirable reasons because they care for the environment. They set out to manage their farms in an environmentally friendly way. It is not surprising that they achieve good environmental results. However, conventional farms that are managed to be environmentally friendly achieve equally good results at lower costs. That was the clear evidence to the Select Committee of the Institute of Arable Crops Research.
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The most thorough study—the Boarded Barns study in Essex—showed that, compared with organic farming, integrated crop management was better for promoting biodiversity and at least as good for bird life, soil quality and mammal and insect life. It was also less costly and used less energy.
However, even if organic farming is based on gobbledegook and does not achieve the results that are claimed for it, should it not be encouraged because it is more profitable? First, there is no merit in promoting more expensive food if it has no special qualities. The vocal middle class might not mind paying extra, but poor people need cheap food. Secondly, it makes no economic sense to base future agriculture on inefficient production with higher costs. If supply increases, prices will come down, as they already have for organic milk, and many organic producers could soon be left struggling.
If we based our policy on science, not on mysticism, if we looked at evidence and ignored fashion, false alarms and hypes, we would end subsidies for conversion to organic farming and support integrated crop management instead. We should not spend money on an inefficient form of farming and an inefficient use of land whose main claims have not been substantiated.
4.43 p.m.
Lord Elliott of Morpeth: My Lords, my noble friend has opened this most important debate with his usual ability at a very appropriate time. I congratulate the right reverend Prelate the Bishop of Peterborough on his speech; he happens to be my Bishop. I thought that his contribution was extremely good and very thoughtful. I hope that we shall hear many more contributions from him in the future.
A number of areas of the country have been badly hammered by the foot and mouth outbreak—none more so than Northumberland, which I know well and where I farmed for many years. The news in recent days that the outbreak may well be over is most welcome. I very much hope that movement restrictions in the north of the country can be lifted. There is an urgent problem of stock presently on higher ground facing starvation through movement restriction.
Contributors to the debate have rightly sought to emphasise the need for a long-term strategy for the country as a whole. In that regard, I very much welcome the formation in recent days of a task force in the North East of England. A number of eminent people have agreed to serve on it and a number of eminent organisations are taking part, including the tourist board.
There is no doubt that the foot and mouth outbreak has been desperately difficult for many people in Northumberland, many of whom I know personally. The noble Lord, Lord Dormand, talked about tourism. It was announced this week that the Roman wall in Northumberland, which is probably our major tourist attraction in the north of the country, had 70,000 fewer visitors in the past summer than in the summer before. That is the measure of the effects of foot and mouth.

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A long-term strategy is very important, but I shall concentrate on the immediate short-term problems of farming. The viability of farms has long depended a great deal on their size. There was a time when it was considered in the north of England that 100 acres and a pair of horses would keep a man. That is a long time ago. Just after the Second World War, that figure had risen to 400 acres, with much greater use of machinery. I contend that a tenant farmer now would have to work very hard to make a living from that size of holding. If the recent proposed European Physical Agents Directive, which would limit the time that a man can spend on a tractor to two or three hours a day, is implemented, it will be impossible to make a living from that acreage.
The future of farming falls under three categories. The immediate problems for larger farms are fewer than for smaller ones. I know of a well organised and efficiently run estate in the north-east of Scotland. When grants were available, they were used wisely. Old buildings were replaced by modern ones and fields were made into workable sizes. There was also some diversification through forestry and sport—shooting and fishing. Larger farms have fewer problems than smaller ones.
In the second category are holdings that have been in the same family for generations. For such farms, the problems of heavy mortgages are way in the past.
The third category, particularly tenant farmers, is the most difficult one. Like the right reverend Prelate, I fear for their future. Their holdings are often too small and co-operation is highly desirable. Years ago, as an officer of a county branch of the National Farmers Union, I chaired a committee that looked into the possibility of co-operation on the sharing of machinery and co-operative buying. We did not have great success, but co-operation in those areas is still very important. I very much hope that they can be looked into in the longer-term strategy that we hope will be developed.
4.48 p.m.
Baroness Masham of Ilton: My Lords, I, too, thank the noble Lord, Lord Inglewood, for initiating the debate. I declare an interest on several counts. I live in an area of the countryside that has been infected with foot and mouth and I farm. I have a small riding centre to help give tourists and locals a recreation pursuit and I have recently been a victim of rural crime.
The complex foot and mouth disease regulations have made life extremely difficult. My pedigree Texil rams remain unsold. I was allowed to have some ram lambs carried across a river, but not taken a few yards down a road in a trailer. Yet strange people with dogs can walk along footpaths through fields on either side of, and crossing, the road, and often their dogs are off the lead. Small farmers feel bewildered and frustrated over that. Many of them depended on supplementing their income by providing bed and breakfast accommodation, but that has been virtually nonexistent over the past eight months.
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Recently I attended a conference in Settle on the subject of stress in farming. I know that people still living with their stock, which must be fed through the winter, are worse off than those who have had their stock culled. There is much insecurity. The very wet weather over the past year has added to the bleak depression that surrounds the farming industry in the North of England.
My riding centre has been broken into over the years on several occasions. We have security lights, alarms and double locks, which add to the expense of shoeing, vets' bills, staff and fodder. My handbag vanished two weeks ago in Masham town hall. Nothing that was in it has been found. My diary was in the bag. The entry for Monday, 15th October, read: "Back in the House of Lords". Our house was burgled with three people in it at about 8 p.m. on Monday. They used a jemmy to prise open a window.
We have no local police in Masham. The police house stands empty. When I was giving details of the contents of my bag to a policeman from Ripon the day after it was stolen, he was called away to a rape case involving a 15 year-old girl in the village of Masham. Rural crime is on the increase. I was told that the police were short-staffed, with many off sick. This deteriorating situation does not help the recovery of the countryside, tourism and rural businesses. The changing situation and the increase in drug abuse without enough crime prevention facilities makes the countryside a dangerous place in which to live.
I hope that the Government will help and support the countryside so that good morale returns to the police and country dwellers and so that, once more, England's green and pleasant land will flourish.
4.52 p.m.
Baroness Anelay of St Johns: My Lords, I also thank my noble friend Lord Inglewood for enabling us to have this debate. I start by declaring two interests in this area, both of which are unpaid. I am patron both of the Tourism for All Consortium and of the Restaurateurs Association of Great Britain. I shall concentrate my few remarks today on tourism matters.
Increasingly, tourism is seen as part of the answer to supporting a rural economy and its communities. When handled sensitively, tourism can also be a truly creative force in conserving the rural heritage, biodiversity and the landscape on which it depends. However, as others have mentioned today, the tourism industry faces an unprecedented situation—a drop of 20 per cent in business this year. Of course, that is due to the cumulative effect of the foot and mouth outbreak since March and the terrorism attacks in America last month. The Government's response to the crisis caused by foot and mouth was tardy, confusing and inadequate.
I recognise that the Government now face a very difficult task in helping the tourism industry to launch a recovery strategy in the face of the loss of business caused by the unprecedented terrorism in the United States. The Government will receive my support for measures which make reasonable attempts to address this further crisis.

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The total losses to tourism this year from foot and mouth are estimated to be £4.2 billion. The terrorist attacks are expected to cause a further loss to tourism of £1 billion this year. By the end of the year, we can expect to see 3,000 small tourism businesses under threat of failure. The Tourism Minister has said that we should market our way out of this crisis and that the domestic market is the way to go. I believe that he may well be right in that, but it is not the whole picture; nor is it an easy solution. It will require commitment from central government, local government, all the tourism boards at every level and the tourism industry itself.
However, one commitment could be made by the Government immediately. They could seize this opportunity to restore to the English Tourism Council its marketing remit. I believe that it is the right time to do so. The industry is not one to whinge about its ills. It states clearly what its problems are and then tries to get on with solving them itself wherever possible. But sometimes it cannot do so all alone.
In August I was interested to read the report, Rural Tourism: Working for the Countryside. It is a five-year blueprint for the recovery of rural tourism, produced jointly by the English Tourism Council and the Countryside Agency. I ask today: what is the Government's response to that report? Do they agree with me that it offers a sound, visionary way forward for the countryside?
The report makes it clear that diversifying to tourism from farming is not always quite as easy as the Government like to make out. We must recognise that diversification to tourism is not always possible or even desirable in some locations. As my noble friend Lord Vinson pointed out, market saturation may already exist where tourism is a mature business. Of course, in areas as yet almost untouched by tourism, diversification must always be handled sensitively.
Furthermore, the promotion of special attractions in remote areas may need help with infrastructure costs, such as transport improvements. Visitors have high expectations of the variety of events and activities which should be available to them and their families within a reasonable distance of their accommodation. Tourism businesses are inter-dependent to a great extent. They cannot be created overnight in areas where farming can no longer be the business of first choice.
However, the question that I ask today is: what happens to that ETC and Countryside Agency strategy now? Its implementation will require a whole range of organisations and enterprises to be involved, and it requires proper funding. At the moment, the ETC is not funded or staffed to tackle such an undertaking. I hope that the Minister is able to give today the undertaking that the Government will make such funds available.
4.57 p.m.
Lord Campbell-Savours: My Lords, I congratulate the noble Lord, Lord Inglewood, on bringing forward this debate today. Like him, I live in the county of
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Cumbria. I myself live in Keswick, at the foot of Skiddaw, surrounded by hill and sheep farmers and various areas of tourism.
I want to bring two very simple messages to the debate today. They are based on my experience of counselling and advising a large number of people during the early months of the foot and mouth crisis at the beginning of the year. What came ringing through in all the conversations that I had was the feeling, particularly among the farming community, that MAFF—as it was at that stage—was simply not equipped or prepared to deal with the scale of the crisis. Furthermore, MAFF was not revealing to Ministers or officials at a regional level the full story as to the scale of the escalating crisis. The message that MAFF gave to Ministers through the Civil Service structures by way of Page Street was totally at variance with the message that we, as Members of the other place, were bringing directly to Ministers.
I do not say that that was characteristic of MAFF over many years. MAFF in the county of Cumbria has provided an excellent and superb service. But the reality, irrespective of government, if I may say so, was that at that stage the Civil Service was simply not competent or capable of dealing with the scale of the problem.
My first message is: let us be absolutely sure that the officials involved in providing a service by MAFF within areas of the United Kingdom affected by crises of a similar nature in the future understand quite clearly that they have a duty and a responsibility to reveal to Ministers at art early stage what is happening in those areas. In the case of foot and mouth, my own view is that, if the department had been alerted earlier with accurate information, many millions of pounds of public money, yet to be spent, would have been saved.
The second message that I want to bring relates to the tourist industry. I believe that the Government were absolutely right to appoint the North West Development Agency as the lead agency to deal with the problems in Cumbria. Following representations by a large number of individuals, including myself, measures were brought in on marketing and IT, as was an interest-rate subsidy. Such measures were of help to many people within the tourist industry. The problem is that the crisis is changing. Instead of being a short-term crisis it has now become a medium-term and perhaps even a long-term crisis for the tourist industry.
The demands of the tourist industry are changing and will continue to change. A subsidy regime was introduced to help the industry. The local authority subsidies and, in particular, those brought in by the North West Development Agency, need to be modified to include expenditure on refurbishment and perhaps support for people who are in arrears with VAT, PAYE or, indeed, mortgage payments. Consideration should be given to that matter.
I understand that the report by the noble Lord, Lord Haskins, will be published tomorrow. Perhaps I may say that his was an excellent appointment. I was pleased when I saw news of his appointment on the television screens outside both Houses. I had dealings

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with the noble Lord some five or six years ago on the agriculture Bill and felt confident then that he would come up with the right solutions.
I plead with Government to find the money to implement all of his recommendations, irrespective of what they are.
5.1 p.m.
Lord Montagu of Beaulieu: My Lords, I must declare a lifetime interest in tourism, the rural economy and particularly built heritage, which is suffering from a severe decline in visitors as a result of the crises. It is particularly important to acknowledge that most of Britain's heritage and landscape is man made, evolved over centuries, moulded by good husbandry and by subsequent creation of fine buildings and gardens.
Britain's historic buildings and the heritage of its towns are at the heart of our appeal to tourists from overseas. Indeed, 40 per cent of all our tourist accommodation is in the countryside. Even before foot and mouth, it was accepted by all that tourist income maintained the viability of our green and pleasant land. Initially the crisis was considered to affect only our agriculture, but through short-sightedness, the Government did not foresee the immediate and devastating effect the message that "our countryside is closed" would have on tourism.
Tourism is worth four times as much as agriculture as a national earner, and directly employs more than four times as many people. For many years it has received relatively little recognition and only grudging assistance from government. By the end of March, even the Prime Minister was asking people to go back to the countryside. Most tourism businesses have high fixed costs. Tourist venues cost as much to open for one visitor as for 1,000. Consequently, the dramatic fall in admissions has caused immediate local economic difficulties and closures, cancelled repair and conservation projects, and caused staff to be laid off just as the summer season began.
The lost income from the missing visitors was more than the difference between marginal profitability and survival, or the threat of closure. The rural economy is fragile, as is Britain's tourist appeal. Such schemes of assistance that were finally offered by the Government came too late and offered too little.
For many farmers, who are desperately seeking to supplement their income, tourism has been seen as a potential saviour. But here, the voice of caution should be heard. Diversification into tourism should not be lightly undertaken. It should be competently marketed and developed otherwise they will succeed only in weakening the tourist industry and cutting the tourist cake too thin.
Most rural tourism businesses are considered "micro businesses". For rural tourism to thrive, it is essential that the inherent fragmentation of the industry is overcome. There needs to be good marketing and perhaps better information to entice visitors. We certainly need to give more assistance to the regional tourist boards in fertilising the ground.
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The faltering ability of the industry to respond in the face of recent crises has brought into the spotlight one particular failure of recent government policy. I refer to the decision to strip the slimmed-down English Tourism Council of the marketing remit exercised by its predecessor, the English Tourist Board. In times of need, DCMS had to look to ETC to act, which, when set up, was specifically excluded from a marketing role. The need to reinstate the central marketing role is urgent, especially now that the domestic market is of even greater importance until the international circumstances revert to normality.
As ever, we should congratulate the BTA on the leadership it has shown in overseas marketing and in working with the industry to overcome extreme circumstances. We must ask, however, what is the evidence of the Government's commitment to tourism, especially given the benefits it surely brings to Great Britain. We are aware that the Government are consulting the industry through a variety of newly-established groups, cabinets, task forces, summits, and other miscellaneous entities. Unfortunately, at present it seems to be only talk.
Just before the election the House of Commons Select Committee published a report on tourism, which states:
"Recent developments have exposed the problems brought about by the failure of successive Governments to invest in the promotion of tourism appropriate to the structure of the industry and to the revenue benefits to the public purse …
"There is also a compelling case for a fundamental reconsideration of the scale and nature of public sector support for the tourist industry".
Following the election, we have a new Minister who I gather is consulting industry widely to better understand its needs. So far the solidarity and support has been characterised by his insulting and ill-judged remarks such as, "the industry pays slave wages", that Britain's tourism lives up to its "Fawlty Towers" image, and that its participants are either lacking in vision and ability or are profiteers.
Does the Minister agree with those remarks by the Minister for Tourism?
5.6 p.m.
Lord Selsdon: My Lords, this debate, and others like it, may put little pinpricks in the shrink-wrapped soul of government before it is microwaved by the noble Lord, Lord Haskins, and others.
We are facing fundamental social and economic changes where a few ghosts must be laid to rest. First, I have always wondered why so many people believe that the ruling classes are wealthy and landed and live in the country. Perhaps the St George on the Bench opposite may stop tilting at dragons and concentrate upon others. Today the ruling class lives in Islington in a house worth £1 million. He pays his labour four times as much as someone in the country and could probably swap that house for 500 acres of land. He would like to have 500 acres of land as well, with white posts around it, non-productive agriculture, the right to ride go-karts with his children, and to keep horses.

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The changes through which we have gone began with the flight from the land to industry. Then there was the flight from industry, but to where? What is the basis of our economy now? We have no industry left in the manufacturing sector. Even the great GEC seems to have disappeared almost without trace. Upon what is the future economy of the United Kingdom to be based? Should it be based upon subsidy or grants? Should it be based upon the increased value of property that has reached exorbitant heights, or upon people?
The ruling classes, as they were called—I was never privileged enough to belong to them—were peasants. A peasant is someone of any class who lives and works in the country and earns his subsistence through himself and his family; in short, a small family business. lf we look at the rural areas, we see that the flight from the land has led to only 10 per cent of people in the United Kingdom living in the country. One hundred and ninety-two countries in the world have a greater proportion of their people living in the country than we do.
The problem in the country is de-population and lack of productivity. There may be all sorts of problems connected to that. However, we should encourage more people to live and work in the country. That leads to certain measures which governments may or may not take. The Government will probably not now agree to do what I suggest. The whole of the rural area of the United Kingdom is effectively classified as a special development area. Compared to other parts of the European Union, it desperately needs support.
First, the Government should introduce tax holidays for all those who live in a designated rural area. We could draw a map of that area, should it be necessary. Secondly, they should remove road tax from any vehicles belonging to people who live in such a rural area. That has been done in France. It should be noted that anyone living in a rural area pays far more in fuel tax than the cost of a road fund licence.
I turn to the desire for outsourcing, the creation of SOHOs (small offices, home offices) and the encouragement from t hose in inner cities to outsource, which is perfectly possible, in this age of high technology. There are many things we can do, but I declare my interest as a peasant farmer within the EU. I have just received my first grant from the EU for replanting vines. There is hope that we peasants will stick together; otherwise, what happened 620 years ago—now re-emerging under the Countryside Alliance—the peasants' revolt, may come again.
5.11 p.m.
Lord Williamson of Horton: My Lords, this is a very necessary debate as we can see from the number of speakers. It is also sad that we have to keep returning to the recovery of the countryside and rural business because the situation remains so serious. This debate is drawn very widely, as it should be, because we have to cover all the fabric of rural life. Recent events have shown very dramatically how the problems of
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agriculture quickly become the problems of many other businesses—travel and tourism. I declare my own interest as a director of Whitbread that has a large hotel and restaurant business across the United Kingdom.
I wish to pose three questions. First, following the disasters of BSE and foot and mouth, what of the future perspective for the control of significant animal disease if it recurs? The British Tourist Authority and the English Tourism Council are doing a very good job. But we have to concentrate heavily on campaigning against negative perceptions related to animal disease. Secondly, how do we build into our strategy on a longer-term basis the role of farmers as guarantors of the environment, the landscape and the support we give them in that role? Thirdly, what should be the future thrust of policy for rural development that must cover rural businesses and rural amenities? It may cover, but it must go much wider than, the traditional three Ps—pubs, post offices and preachers—that most of us hope to see in our villages.
The answers are more difficult. First, I deal with the future control of animal disease. I give it priority because we have seen how much the country—not just the countryside—has been damaged by BSE and foot and mouth. We have had the excellent Phillips report that gives lessons for the control of health risks to animal and man in the future. We need to draw upon those lessons. There are a lot of positive elements. One thing that is clear, and it is a very had conclusion, is that we passed a number of laws that were not rigorously respected. As the Phillips committee dramatically puts it,
"some members of the feeds trade, being given an inch. felt free to take a yard".
We can eliminate BSE from the cattle herd, but we need to take account of the bitter lesson that full enforcement, not half enforcement, is an essential element of disease control. On foot and mouth, we need, in letters of fire somewhere, two words only, "Never again". I am pleased that there are the inquiries by Dr Anderson and the Royal Society. We need to concentrate on how we can improve our import vigilance—a number of noble Lords have referred to this point—and how we can limit the disease risk from livestock markets.
Those are key points for the control of animal disease. As to the environment and the rural landscape, all my life I have been deliberately and resolutely attached to the view that farming—above all, farmers—are exercising an economic activity. We need to put much greater emphasis now on the second aspect, the guardianship of the land, the landscape and encouraging projects such as the Country Stewardship Scheme which introduced 14,000 schemes. I like the idea of a menu of schemes of the kind mentioned by the right reverend Prelate. That is the way forward.
We need active support for rural development projects. We need maximum devolution to the regions. Above all, in the present difficult situation, we need to be quick on our feet to improve our capacity—regions, local services and private businesses together—to

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offset the reduction in overseas, particularly US, visitors. More than four in five of the visitors to our rural areas are from our own country. We can increase that figure. Although this is a very serious crisis, it is a real challenge. I think we can make progress on that line. At the same time there are things we can do to diversify activity in the countryside that will help business and tourism; for example, the operation of the planning system, taxing businesses as one trading unit, and so on. There are things that can be done which would be helpful.
My conclusion is that we may be in a crisis situation but I console myself that the great potential of our rural businesses and landscape has not gone away.
5.17 p.m.
Lord Willoughby de Broke: My Lords, I declare my interest as a farmer or as a peasant, as my noble friend Lord Selsdon would have it, and as a serial diversifier. Therefore, I welcome the laudable aims of the Government White Paper last year, Our countryside, our future.
I concentrate on one particular point in that paper where the reality does not yet match the rhetoric. That is the matter of business rates and the problems they present to small businesses. I take an example on my own farm where I have converted some farm buildings into small workshops and business premises. There are about a dozen businesses, one of which started as a one-man band and is now employing 18 persons servicing the aerospace industry. They succeeded in spite of, rather than because of, the rural rates. I have several others, all start-ups, one-person operations. We have several women working there.
Without exception those businesses say that one of their biggest problems is the weight of the rural uniform business rate, levied at exactly the same rate as that levied on businesses in towns or business parks—around 43 pence in the £1. That seems to put a complete damper on enterprise. These people are risking their own time, energy, capital and belief in starting a small business that hopefully will develop to bring employment both directly and indirectly into the rural economy which is the aim of the rural White Paper.
For the rate they receive nothing at all. They receive no water, no rubbish collection, no sewerage, no electric light. As the noble Baroness, Lady Masham, pointed out, they get extremely sketchy, if not nonexistent, police protection.
I welcome the commitment in the White Paper to examine ways of reducing the burden of business rates on small businesses. The rating Act 2001 was introduced to give some new relief to agricultural businesses, but that does not go nearly far enough. It gives rate relief only to buildings used for agriculture during six of the previous 12 months. It does nothing for people who want to start new businesses in existing converted agricultural buildings such as mine. There are many others around the country who must be in the same position.
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Can the Minister confirm the proposals in the Green Paper issued last year called Modernising Local Government Finance to give special rate relief to all small businesses, both urban and rural, up to a rateable value of £8,000. On 28th February 2001 the junior Environment Minister, Beverley Hughes, replied in a Written Answer:
"Legislation to implement these proposals will be introduced as soon as parliamentary time allows. They are a significant contribution to realising the vision set out in the White Paper, 'Our countryside: the future'".—(Official Report, Commons, 28/02/01; col. 689W.)
Hear, hear to that! Can the Minister tell the House in his reply or in a letter to me when the Government will introduce the necessary Bill to put these proposals into flesh? Perhaps the answer should not be "soon" which the noble Lord, Lord Sainsbury, said early on, but rather more concrete than that.
5.20 p.m.
Lord Carlile of Berriew: My Lords, I too congratulate the noble Lord, Lord Inglewood, on enabling us to have this debate today. I declare an interest as the director of an agricultural feed manufacturing and merchanting company.
Not for the first time in debates on agricultural questions I find myself totally in agreement with the right reverend Prelate the Bishop of Hereford. He is absolutely right. A long-term solution is needed to the problems of farming and agricultural areas. In recent weeks we have seen the Prime Minister developing a creditable status as a world statesman. Is it not time that we saw our Minister of Agriculture, Mrs Beckett, in her new and enhanced role as Secretary of State for DEFRA similarly going about Europe ensuring that at long last we get a grip of the failed, discredited common agricultural policy.
For years the common agricultural policy has been not much more than a lifeboat which, from time to time, has assisted farmers from crisis to crisis. Foot and mouth has not been the first such crisis.
The principles are not difficult. The first requirement is that we should tear up the existing common agricultural policy. We should replace it with one which has, in my view, three clear principles. The first is that we should have adequate production of cheap food. Why has it not got through to policy makers that if food is cheap, people will buy and use more of it. That can only be in the interests of farmers and will encourage domestic consumption of domestic production.
The second principle of a new policy should be an enhanced environment. That will create more domestic tourism and, indeed, more foreign tourism throughout Europe. The third principle, in my view, is that there should be reasonable public access which will ensure that the urban and rural environments have greater understanding of each other's needs and requirements.
I hope therefore that the Minister will be able to tell us what new initiatives DEFRA has taken with a view to reforming the common agricultural policy.

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The broad Arcadian landscape that I see from the Welsh hill on which I live is now physically divided as never before, on one side of our lane, for several miles, are sheep and cattle as far as the eye can see; the other side, for several miles, has not a single sheep, cow or bullock—they have all been killed as a result of foot and mouth. Unlike Arcadia, mid-Wales contains real people. The effect of what we see from our hill is reality for those people. It threatens the future of the schools, the churches, the pubs and all facets of village life.
We suggest to the Government that talking of glib solutions is no longer any good. In mid-Wales we had the Development Board for Rural Wales and have the Welsh Development Agency. They have done a great deal. We already have hotels; we have our love spoon manufacturers; we have bed and breakfast establishments; we have caravan sites; we have an unusual museum of sculpture and jewellery, some of which I have seen on the more exotic lapels of some noble Baronesses. We even have a village blacksmith who built the conjugal bed for the new marriage of somebody who is shortly to be joining this House.
So we need no lessons on the development of rural businesses. We need much more than that—the long-term solution of which the right reverend Prelate spoke. My plea therefore is that we stop this cycle of rescue situations for the farming industry. Let us bring some stability to the rural life of this country and let us ensure that farmers no longer feel the threatened species which they have become.
Finally, if the Government really want to demonstrate their commitment to helping the countryside, for heaven's sake leave off the trivia of hunting, at least in this parliamentary Session, and let us rebuild rural life.
5.24 p.m.
Lord Cavendish of Furness: My Lords, the House is indebted to my noble friend Lord Inglewood for so ably introducing this debate. Especially valuable is the authority with which he speaks of agriculture in the context of the European Union. As always I declare an interest as chairman of a group of Cumbria-based companies concerned with land ownership, farming, forestry, construction, mineral extraction, tourism and National Hunt racing. I have a personal stake in all those companies.
With a slightly heavy heart I have to express my disappointment with the Government and I occupy precious time doing so because it is important. This is the fourth time I have intervened in debates about the countryside since the first outbreak of foot and mouth. During that time I have asked Ministers more than 12 questions, all of them, I like to think, constructive; all of them, as it seemed to me and others, needing answers. There has never been a single attempt to respond to those questions, either at the time or later in writing.
Perhaps a powerful Administration like this one, with a huge majority in another place, feels entitled to dispense with normal courtesies, and perhaps the contemptuous rudeness on the part of Ministers is
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something we should learn to endure without extravagant distress. But that overlooks two important points. The first is that, in democratic societies it has always been the instinct of sensible politicians to lend a special ear to under-represented sectors of the population. That is done for reasons of common decency and to include those who might otherwise be excluded. This Government I fear appear to reject that instinct.
Secondly, I believe that Ministers in your Lordships' House have a right to expect that those of us who belong to opposition parties give at least a fair hearing to the Government when they are away from here, especially when the Government are seeking to deal with intractable problems of a non-partisan nature. The Minister should know that his apparent indifference, not to say hostility, to rural Britain makes that difficult for us.
In respect of the management of the foot and mouth crisis, the noble Lord, Lord Whiny, in a New Statesman interview, appeared to accept that mistakes were made. I do not know what the circulation of the New Statesman is in Cumbria—I suspect modest—but that sensible admission reinforces the need for a full public inquiry, not, as my noble friend Lord Ferrers said, to punish the Government, but so that next time (of course there will be a next time) a clear policy will be in place.
More than 1 million animals have been slaughtered in Cumbria, that is 44 per cent of the total killed; Devon is next with 8.5 per cent. In money terms, gross loss of agricultural output through slaughter, at the end of July, was just short of £130 million. Consequential losses amount to between £20 million and £30 million, which includes the support industry. In the current year it is estimated that tourism in Cumbria will have lost £200 million.
I have always argued that in essence recovery will come through our own efforts and by recognising the need to change—a point made by my noble friend Lord Ingleby. Those features are central to a document entitled First Steps: a proposal for a Cumbria Rural Action Zone: Draft Strategy, which is due to be launched this Friday. It is a powerful document and I pay tribute to the commitment or the many Cumbrians who contributed to it and to the leadership which emerged in the country which has led to a spirit of renaissance.
I commend the proposals to the Government, not because I endorse every syllable of them, but because they demonstrate that the spirit and the will to recover is very much alive. If the Government show themselves willing to foster that spirit, they do a great service to the countryside and to the country.
5.28 p.m.
Lord Tanlaw: My Lords, we are all grateful to the noble Lord, Lord Inglewood, for instigating this debate. I declare an interest, as I have many times before, in that I had a farmed forest in the 1960s in Eskdalemuir, which I started on land which had been abandoned for 11 years before I came and the house

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had been empty for 14. The incomes were really down so at that time there was no future in farming. The markets were in Lockerbie, Langtown and New Castleton. We had a D notice but fortunately it was removed during the foot and mouth period.
As a result, everyone is looking to the future. In that regard many suggestions have been made in this interesting debate. But obviously hill farmers are having to diversify into new areas like field sports, tourism, environment, fishing, shooting and so forth to add to their incomes. But that means, in the post foot and mouth era, segregation of the visitor from the farm factories; that is, the farmlands. Visitors do not wander through manufacturing factories with dogs. I take the point made by my noble friend Lady Masham, that if we are trying to farm, we should keep visitors separate—and that would require an urgent fencing grant—so that we can re-landscape the farming areas.
The Minister would do well to clarify the Government's attitude to country sports, such as fishing and shooting. Why should farmers invest in reorganising river banks, managing forests or planting copses, if, through a Private Member's Bill, they are unable to use that land for sporting purposes? A definitive statement from the House on this matter would be very helpful.
Consideration also needs to be given to the question of second homes, to which the noble Lord, Lord Mackie of Benshie, referred in a rather deprecating way. Second homes provide income to the region. Since 11th September many people have given consideration to their second homes perhaps becoming their first homes at some future date.
In addition, businesses are now looking to relocate to the regions. As the noble Lord, Lord Whitty, knows—I have previously asked him about it—they will require access to broadband Internet. Broadband communications are essential to the conversion of farm buildings to offices or new factories. If businesses do not have access to broadband communication, as they have in the City, they will not come to the regions, and we shall be left with a bed and breakfast economy, which will be left behind in a post-foot and mouth disease economy.
The same point applies to children in primary and secondary schools in the countryside. A lack of access to broadband communication, which this Government, when in Opposition, promised would be available throughout the nation, would result in children being discriminated against. That surely is not the intention. If we have to wait another 10 years for BT's ADSL, which I have commended to everybody in this House—BT say that it will not come to Dumfriesshire for at least 10 years—there will be no primary schools left in Dumfriesshire and no farmers in the hills and uplands of Dumfries and Galloway. The hill farmers will have walked off the land, as they did in the 1960s, and they will have to walk off again, for their future will be non-existent.
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I have not seen IT put forward as one of the main points by the Countryside Alliance, the Country Landowners' Association or other similar organisations. They seem to have missed the point. People will not move to the country unless they have proper access to the Internet, on which they can conduct their business and from which they can get enjoyment. That access is not available today. It is required by schools, the police, hospitals, and individuals with second homes in the country who want to enjoy the same access. Where is it going to come from? It cannot come through cable. It must come through satellite access and through enlightened planning permission that allows people to put up dishes. It is essential that Ministers and civil servants should understand what broadband Internet communication is about. One sometimes despairs that that is not fully understood or appreciated when we debate countryside issues.
I hope that something positive will come out of this debate, rather than the rounded reassurances that we have so often had.
5.33 p.m.
The Earl of Arran: My Lords, as I have frequently done in the past, I address my remarks to the West Country and in particular to Devon, where I live and my wife farms.
Even in those parts of Devon that have been so devastated by foot and mouth disease, there is a huge resilience in the rural community and a determination to rebuild businesses and lives. Due to the sorry record of incompetence and mismanagement that has marred the efforts of MAFF and DEFRA to control the disease, the damage that must now be made good is far worse than it might have been. The Government therefore carry an even greater burden of responsibility to help the rural community to recover and rebuild.
What has been the Government's response to date? A paltry £11.5 million for assisting business recovery and a miserable £260,000 to help South West Tourism in the massive task of bringing tourists back to the rural areas of the South West; and that despite the fact that the South West is England's largest and most rural region and has been as badly affected by foot and mouth disease, Devon having had the second highest number of cases after Cumbria. Once again, we are the poor relations.
The South West has an agricultural output more than three times that of Wales and has had twice as many cases of foot and mouth disease. Yet Wales has had more than four times as much Government funding—£69 million, compared with a total of £16 million in the South West—for the foot and mouth disease recovery operation. That is the latest example of the way in which the rural English regions are disadvantaged compared with the devolved administrations. For tourism, Wales has £4.13 per head of population; the South West has just 26p. For economic development, Wales has £55.17 per head of population; the South West has just £18.77. For the

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promotion and marketing of agriculture, food and drink following the foot and mouth outbreak—an area in respect of which we are in direct competition with our friends across the Bristol Channel—we receive just £250,000, compared with £18 million in Wales. Well done, Wales! But why no equality for the West Country?
Great plans are afoot in the South West to revive the rural economy on the back of the unparalleled beauty of our countryside and the unrivalled quality of our food. We shall shortly launch a chamber of rural enterprise to represent and take forward the entire land-based sector. In addition, there are proposals to set up an industry body to promote and market food and drink from the regions—an industry in which 3,000 businesses employ a total of 45,000 people; and a further 46,000 are employed in agriculture, where there is also huge potential.
If those initiatives are to succeed in injecting into our economy the confidence and cash that it needs, we must receive equivalent support to that enjoyed by our competitors. The response of the rural community to the challenge and the tragedy of foot and mouth disease has been as magnificent as the Government's has been mean. My message to Ministers is simple: country people in the South West are determined to lead the recovery, but it is vitally important that the Government should help them to help themselves.
5.37 p.m.
Baroness Miller of Chilthorne Domer: My Lords, we on these Benches are very grateful to the noble Lord, Lord Inglewood, for introducing this debate. The noble Lord made a number of excellent points, ably amplified by my noble friend Lord Carlile, about the external pressures of the WTO and CAP on the countryside and on agriculture.
I propose to concentrate on what we believe the Government should be doing. As the right reverend Prelate the Bishop of Peterborough said in his excellent maiden speech, the Government are either still unclear about the purpose of the countryside or are giving mixed messages about it. The first thing that we need in a countryside strategy is a much clearer indication from the Government of what they believe the countryside is for. We need that message to be given by all Ministers at all times.
A successful government strategy must address three points. First, it must recognise the differences that exist in the countryside. The countryside is not an homogeneous place, a point made by my noble friend Lord Greaves and the noble Lords, Lord Vinson and Lord Selsdon. Secondly, it must recognise that any strategy needs to be a long-term strategy, a point made by a number of noble Lords, including the right reverend Prelate the Bishop of Hereford and my noble friend Lord Carlile. Thirdly, it needs to build on local and regional strengths. The Government must realise that one solution does not fit all.
I deal with the first point of recognising the differences, and I declare an interest as the Vice-President of the Council of National Parks. I speak
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particularly for the upland hill and remote areas, because they are very different from the lowland areas and face very different pressures. Those areas have been hardest hit because of the link that we in this country have come to understand between hill farming and tourism; but I believe that those areas also offer unrivalled gains if the Government get it right.
I could spend the rest of my time reading out the 50 excellent recommendations of the task force for the hills, but I believe that the Minister and many other noble Lords will have that report. What is the Government's response to the report and when will they begin to act on its recommendations? There is no better starting place for dealing with upland areas than that report. The report deals, for example, with the reform of commons—and I do not mean the other place but the upland areas. They suffer from overgrazing and arcane legislation which often requires unanimity and makes difficult any application of the environmentally sensitive area criteria. However, a reformed commons regime could be a starting point and a vehicle for the co-operation of commoners for marketing their goods and working together. It could also bring big biodiversity gains. During the passage of the Countryside and Rights of Way Bill, the Government stated that they were interested in bringing forward such legislation, but it has again disappeared over the horizon. In view of the importance of the countryside strategy, will the Minister tell the House whether there have been any discussions about bringing the legislation forward more urgently?
The noble Lords, Lord Campbell-Savours and Lord Williamson of Horton, mentioned other reports. The Government have commissioned a number, many of which have contained excellent recommendations, but we have not seen their implementation. In fact, I cannot think of any which have been implemented in full or any in respect of which a good start has been made. I hope that any strategy will incorporate a firm timetable as regards the recommendations which the Government accept and their enactment.
The noble Lord, Lord Judd, pointed out that the national parks are willing and able to be a blueprint for rural revival because they have the experience of a coordinated approach to planning, farming, biodiversity and housing. Each national park could haw different policies and solutions, but they will he what works in their areas. What is the Minister's view of the future role of national parks? If he cannot expand on that during the time available to him today, will he come back to the House with information at a later date?
I had wondered whether we would get through the entire debate without a reference to new technologies and I was most pleased to hear such points made by the noble Lord, Lord Tanlaw. I believe that without proper investment in the kind of e-technology infrastructure which the Government envisage for urban areas, rural areas will be left in the kind of economic backwater experienced by those areas with no roads and railways at the end of the 19th century. Rural areas cannot make that investment themselves—not even regional government can do it

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for itself—and it needs to come from national government. Will the Minister tell the House what initiatives the Government are taking to ensure that the private sector is involved? Will they put national funding into this important area?
Any strategy needs to be long-term. During the summer I travelled around and spoke to different organisations. One of the constant refrains related to the funding of pilot initiatives. Such funding is innovation-driven so that when a good scheme is no longer an innovation—usually after two or three years—the funding disappears. Good schemes which work manage only to get off the ground before their funding disappears. I believe that such funding could be less annually but available for a longer time.
The funding for the Rural Challenge, for example, was a good idea but a huge sum of money—£1 million—was given to schemes for only three years. The effect was that they have tended to be bricks-and-mortar-based and have often struggled to receive the necessary grass-roots community support. I believe that it would have been better for those schemes to have received £100,000 annually over 10 years and they would have succeeded in establishing community support more thoroughly.
The England Rural Development Plan offers the Government a good way of setting out their future funding. The Labour Party when it was in opposition and then newly in government stated that it was disgraceful that we had fallen so far down the European league in funding the second pillar of the CAP; that is, the pillar which allows us to have rural development instead of subsidy support. But where do we rank now? Is it more important to the Government; and if so, are they willing to invest more in that? I believe that that is the way forward.
The long-term view is also about young people. It is about education. Another sadness is that the national curriculum has no space for an imaginative use of the outdoors. I visited many outdoor centres during the summer and it is clearly one of the most memorable things school children do. However, it is a once-in-a-lifetime experience because the constraints of the national curriculum make it impossible for such centres to offer more. The chairman of the Countryside Agency made a sad comment, stating that he did not believe it was possible to change the situation. If the Government are serious about links between urban and countryside areas and want to imbue children with a sense of outdoor excitement, they must start to build an imaginative national curriculum.
Can the Government build on the strength which exists and move away from the perception, which I somewhat share, of a centralist government who find it difficult to accommodate small populations, small businesses and small schemes? They need to allow different places to have different solutions, as have the devolved administrations.
In conclusion, I want to echo the plea for a public inquiry into foot and mouth. The disease has involved the loss of £5 billion of public money and the jobs and
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futures of people across all communities, not only those of farmers. Alun Michael, in addressing the Local Government Association conference in Buxton, said that having a public inquiry would be like using a sledgehammer to crack a nut. But I do not believe that the crisis was a nut—it was extremely expensive and it has brought the countryside further to its knees.
The three inquiries do not address the same issues as a public inquiry. First, three inquiries leave room for inconvenient decisions that were made at the time to slide down the gaps between them. Secondly, a public inquiry should at its best he a catalyst for wider change because everyone who suffered through the crisis and who gives evidence can have a stake in it; people can give evidence, hear the deliberations and understand the outcome. In that way they are signed up to future changes. At the moment they feel that they may be forced upon them in one way or another either by economic circumstance or the Government. Surely the Government would prefer to have a public inquiry which acted as such a catalyst and provided a more optimistic future for our countryside.
5.48 p.m.
Baroness Byford: My Lords, I, too, want to thank my noble friend Lord Inglewood for introducing the debate today. His comments about the devastation which the foot and mouth outbreak has had on the Cumbrian community was reflected to me during my three-day visit there some 10 days ago. The farming industry has been in steep decline for the past four years. Some 48,000 jobs were lost between 1998–99 and 2000. Farm incomes are down by 75 per cent to a mere £2,500, or £50 a week, from an average of £80,000 in 1995–96. Those figures from Deloitte & Touche were referred to by my noble friend Lord Ferrers.
On top of that came the disastrous outbreak of foot and mouth disease, which has seen the killing of 5.6 million animals on some 2,030 infected premises. Dangerous contacts and contiguous culls meant that more than 9,500 premises had every living cloven animal slaughtered. Those figures do not include the 500,000 sheep killed in Cumbria in response to the voluntary cull, the 1 million lambs, which do not count at all, or the other half-million animals killed in the welfare cull. It is a national scandal. Others have reflected today that it shows sheer incompetence on the part of the former MAFF. No wonder my noble friend calls for a strategy of recovery to aid the countryside, tourism and rural business.
At this stage I should remind the House of my family's farming interests and my patronage of VIRSA, the Rural Stress Network and membership of other organisations listed in the register. All of those interests are unpaid.
I also welcome and congratulate the right reverend Prelate the Bishop of Peterborough on his very thoughtful contribution. We look forward to hearing from him often in future debates. He reminded us today of the 18,000 families which had received help and the need for farmers to be profitable. I take this

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opportunity to acknowledge the extra work undertaken by the Churches and members of their congregations throughout this crisis.
This month's report by Ferguson, Donelly and Anderson in Nature and Keeling and his colleagues in Science on the response to the foot and mouth outbreak makes interesting reading. To paraphrase, speed of action is paramount; the cull policies must be implemented much faster in any outbreak. Animal movements spread disease and the policy must ensure that movement bans are implemented faster in any future suspected outbreak. Vaccination needs to be considered in any policy on the control of animal diseases.
There is no doubt that the infection is coming to Britain from both third world countries and maybe EU sources. Unless procedures at points of entry are tightened up and adhered to, swine fever, foot and mouth and other such diseases will hit us again and again. A report on "Farming Today" on 6th October indicated that raw meat was still being brought into the UK in great quantities by visitors in personal luggage. I ask the Minister yet again what additional inspection procedures have been put in place since the outbreak. How many more inspectors are employed throughout the country at ports of entry? That question has remained unanswered since June.
We hear plenty about the need to reform CAP and move away from direct payments for food production. Perhaps more importantly we need to reform the European rules as to how, when and who may examine all kinds of food imports to ensure that the trade in, and the practice of, the illegal importation of suspect food products ceases immediately. How can the Government consider requiring farmers to insure against future diseases if they fail to shoulder their responsibility in these undertakings?
We have heard again today from my noble friends Lord Ferrers, Lord Cavendish and many others the call for a full public inquiry. I repeat that call. The Government must have a full public inquiry into this crisis. It is surely right that former Ministers and officials are cross-examined. We need to know how they came to the decisions they took and why they were implemented in the way they were. Surely, all we want are answers to make sure that in any future outbreak we benefit from hindsight in formulating a quick response leading to a less adverse impact on the people and animals affected. MAFF's mistakes in managing farmers and their families must never recur.
The foot and mouth outbreak has affected farmers directly. But many rural businesses have also been hit hard, as we have heard. None of us had realised the dependency on tourism for the health of the countryside. Overseas visitors were frightened to come to the UK, and some of those who intended to visit only the cities also cancelled. The noble Lord, Lord Skidelsky, made a very important point in that connection.
My noble friend Lady Anelay predicted the loss of some £5.2 billion this year. A team booklet on British tourism reflects that in Cumbria alone 18 per cent of
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its GDP comes from tourism, which relates to 25 per cent of jobs in that county. Clive Aslet, writing in the latest issue of The House Magazine, said:
"Cumbria has been a war zone that now needs the equivalent of a Marshall Plan to get it going".
Other noble Lords have also referred to that today. In order to draw visitors back there must be a concerted effort both at home and abroad.
I have already mentioned reform of the CAP and the rules which govern the inspection of imports. But it is also obvious that in times of trouble individual regions or countries need to be able to impose special measures. It has become obvious that in normal times differences of culture, geography and custom and practice militate against: the imposition of continent-wide regulations. No lesser person than the Minister herself, in a speech to the CEA in Ireland last week, acknowledged that policies needed in northern Finland differed from those required in southern Greece.
Any future strategy to revive the countryside economy must consider the WTO and its probable forward direction. Unfortunately, that is likely to play down the importance of animal welfare and emphasise even greater free trade. Such developments are likely to be at cross-purposes with Britain's intentions on the environment, wildlife, fishing and other policies such as forestry.
Each nation must feed its people. For the first time for many years this country has suffered a major pestilence. No one denies that farming and horticulture will have to change in order to survive. They will be affected by the negotiations on CAP but must also respond to changes in the UK. There appears to be general agreement that farmers must work much more closely together, and the new farmers' markets are examples of that. But there is room for conventional, organic, specialist and niche markets, as other noble Lords have pointed out.
Rural business should be about rural people being able to live and work in their locality. Over recent years we have seen some businesses moving out of towns and cities. While that is welcome, some of them continue to employ existing staff with little or no recruitment of local people or use of local enterprises. Local people should be encouraged to go into business for themselves and local authorities should work with them sympathetically, thereby improving the rural opportunities for tourism and business in the market towns, to which several of my noble friends have referred.
I have been on my feet for some nine minutes and have not mentioned such matters as transport, public services, post offices, schools, doctors' surgeries, utilities, housing, facilities for young people, the environment and the greater use of bio-fuel. These are hugely important. What have the Government done today? They have produced the urban and rural White Papers, neither of which has been debated in this House. Recently, the Prime Minister intervened by setting up the Policy Commission on the Future of Farming and Food chaired by Sir Don Curry I ask the

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Minister whether its deliberations will supplant the content of the rural White Paper. The Government continually seek advice but appear to be unable to translate it into action.
None of us will ever forget the 11th September, but we must still plan ahead. The future consists of the short, medium and long term, to which many noble Lords have referred. In the short term, businesses dependent on tourism are going bankrupt, livestock particularly on hill farms is threatened with starvation, and some breeding cycles are already being disrupted. In the medium term we face shortages of home produced meat, fodder and grazing land next year. Very worryingly, in the long term we risk handing to others the ability to feed our own nation.
The countryside has been in crisis and that has affected both town and country alike. This crisis must be overcome. I and others like me are concerned by the absence of political leadership, the proliferation of consultation and the total lack of coherent action.
6 p.m.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, I join other noble Lords in thanking the noble Lord, Lord Inglewood, not only for initiating the debate but also for his thoughtful contribution. I know that the noble Lord, as other noble Lords, has immediate experiences in the stricken county of Cumbria which has had the roughest end of recent months. The noble Lord was not only able to deal with that but also to challenge us all to look to a longer-term and more viable future.
Perhaps I may also commend the maiden speech of the right reverend Prelate the Bishop of Peterborough. The right reverend Prelate showed an enormous commitment to the countryside and knowledge thereof, which I am sure will inform future debates.
Most noble Lords' contributions, at least in part, have been hugely constructive and helpful. However, I must introduce a slight jarring note at the start of my speech. I also take issue with the noble Lord, Lord Cavendish. It is difficult for the Government, who are attempting to do their best to deal with a crisis in the countryside, to face criticisms that we do not care and that we are deeply hostile to the countryside and to country people. It is perhaps understandable that that view is held among the distressed farming population in areas that have been hit seriously by foot and mouth and its knock-on effects. I do not think that it is appropriate, even in political knock-about in this House, for such views to be repeated.
The Government are deeply concerned about the state of many areas of our countryside. We have expressed our commitment on many occasions not only to the countryside and to rural people as a whole, but specifically to the development and return to prosperity of, in particular, the agricultural sector.
As other noble Lords have found necessary, I also need to deal with the shadow of foot and mouth before dealing with anything else. It has been an immense
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problem for the Government and for the countryside. We are now at a situation where there is a glimmer of hope. For the last six weeks the disease has been contained in two areas—Northumberland and Cumbria. During the whole of the outbreak we are for the first time experiencing a period where there have been no new cases for over a fortnight.
In England and Wales we have 104 counties and local authorities which have been declared FMD free. The whole of Scotland is FMD free. Therefore, the broader part of the countryside is beginning to return to something like normality. The vast majority of premises which were covered by restrictions have now had those lifted. Nevertheless, we must keep up our vigilance and our guard. It has been necessary to introduce a difficult system of control on autumn movements of animals to ensure that what is inevitably and necessarily a massively increased volume of animal movements is subject to strict controls. That has understandably caused difficulties for farmers and for trade. Its introduction has had some difficulties. I think that everyone recognises that we need a balanced approach to this matter in order to allow necessary movements and also to bring in a regime which does not encourage a further outbreak of the disease.
For that and other reasons we are not there yet. I remind the House that in the 1967 outbreak there was a period of 29 days without an outbreak. There were four months of outbreaks beyond that. So we are not home and dry yet. Nevertheless, it is important that we begin to look at the way out and at cushioning measures over the winter. The right reverend Prelate the Bishop of Hereford and others referred us to the important work of the Addington Fund. The Government back that fund. They will intensify their backing of that organisation which brings fodder to those animals which are still effectively locked up due to restrictions. We need to address the immediate problems, not only of farmers but also the rest of the countryside, of getting through the winter.
It is perhaps too early to draw the full lessons of this outbreak. A number of noble Lords have put down a few markers. My noble friend Lord Campbell-Savours has mentioned the problems with communications. The noble Lord, Lord Mackie, emphasised the need for more vets. There are other issues in the administration of this outbreak which I readily accept have not gone as well as they should. Serious lessons have to be learnt by DEFRA and by the other authorities and indeed by the farming community.
The regulation of animal disease in this country needs to be addressed. The effectiveness of the enforcement also needs to be addressed, as indicated by the noble Lord, Lord Williamson. The noble Lord also said that the message for any investigation as to what we do in the future must be "never again". But we will be faced with the challenge again.
I have some sympathy with those noble Lords who say that we should have greater concentration on import checks and greater priority on those checks. But in the global market we will always be faced with

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some challenge. Even those countries with far more robust forms of import checking than ourselves occasionally have outbreaks. The point is that when an outbreak occurs, they suppress it much more rapidly than we were able to do on this occasion. So although we can take measures to ensure that we minimise the risk of disease coming in, we also must take measures to ensure that the spread never occurs as rapidly and as disastrously as on this occasion.
In terms of learning those lessons, I should like to knock on the head the argument that, because the Government have said that we will not have a formal public inquiry, with its full quasi-judicial overtones and procedures, we have something to hide. We have nothing to hide. That is not to say that we have not made mistakes. I have already admitted to that, as has the Secretary of State. We are being open about this. Those noble Lords who might have been in another place this morning will have known that the Secretary of State had a full two-hour session in front of the Select Committee on precisely how we managed the outbreak. We intend to be open about this matter. We do not believe that what is normally seen as a public inquiry with lawyers sitting at one's elbow is the best way of getting the full truth.
We believe that the inquiries being made under the Royal Society and under Dr Ian Anderson—and every one has full access to them—are a better way of showing not only whether the way that science and veterinary expertise was deployed in the control of this disease and the way in which the Government administered that expertise was correct, but whether the rules and regulations of Britain and the EU covering the control of disease are the ones that we should be following in future or whether we need a radically different approach. We intend to be open with that. We hope everybody will have access to it. We believe, both here and in another place, that Parliament will certainly have its use to make matters clear during that whole process and at the end of that process.
Earl Ferrers: My Lords, perhaps I may ask the noble Lord a question because he made a very interesting and important statement. Can he say whether this inquiry will have the right to call people such as ex-Ministers and so forth and ask them directly what the questions were? As I understand the situation, one can have that with a public inquiry but not with any other form of inquiry.
Lord Whitty: My Lords, the inquiry will request the presence of whomever it wishes. Former Ministers have made it absolutely clear that they are prepared to give evidence to whatever inquiry is appropriate and established. So the answer is, yes, their evidence will be taken into account. The question of the precise procedure is a matter for these independent inquiries and their chairs.
That is the sad background of foot and mouth disease against which we have this debate. Of course many of the problems of, in particular, agriculture and parts of our countryside more generally predate foot
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and mouth disease but are now very much focused on the consequences of foot and mouth disease. It is true that farmers, particularly those with stock, in areas still subject to restrictions, as the noble Baroness, Lady Masham, made clear, are probably the most obvious victims of this. But there are a great many other victims—small businesses, tourism and other parts of the rural economy—which have suffered.
Perhaps I may deal first with the agricultural sector. It is appropriate and timely for us to take a long-term view of the future of agriculture. The Government are being asked for clear signals. We have established the independent Policy Commission for Food and Farming under Sir Don Curry. It is intended that the commission will mark the first step towards producing a new consensus on the future of food and farming in this country. At present there is no consensus. Indeed, even in our discussions today many different views have been put forward. The noble Lord, Lord Beaumont of Whitley, saw one future in which all agriculture shifted to small farms; the right reverend Prelate the Bishop of Hereford put all his money on organics, which somewhat offended the noble Lord, Lord Taverne. Even in this House, all shades of opinion and view are held.
Perhaps I may underline what was said by the noble Baroness, Lady Miller of Chilthorne Domer. "One size fits all" is not a solution for agriculture. The common agricultural policy, which in effect adhered for most of its existence to such a policy until the most recent reforms, now finds that it is no longer appropriate, either in Britain or in Europe.
The Lord Bishop of Hereford: My Lords, I am grateful to the Minister for giving way. I have to say that I do not put all my eggs in the organic basket and I agree with much of what was said by the noble Lord, Lord Taverne, on that subject. I am far more keen on pursuing long-term strategies addressing integrated crop management. Perhaps the Minister misunderstood what I said.
Lord Whitty: My Lords, I beg the pardon of the right reverend Prelate. I was too much taken by his advocacy of Hereford organic cider. I became completely carried away.
As I have said, we do not have a consensus on the future of agriculture. I think that it is important to put agriculture into context, as did my noble friend. Lord Judd at the beginning of our debate. Instead of seeing agriculture as an activity subject to environmental pressures, the future of agriculture both for its landscape and production should form part of a broader environmental and rural economy, both in its processes and in its context. For that reason, we need to look at our methods of food production.
I would take issue with the noble Earl, Lord Ferrers, when he said that the Government take the view that the production of food is not important. That is not our view. I have stated that several times, both in this House and elsewhere. Indeed, I was grateful to the noble Lord, Lord Palmer, who saved me from having to quote myself in the course of my remarks. I and my

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right honourable friends the Prime Minister and the Secretary of State have reiterated our wish to see a viable, sustainable, diverse food production industry in this country, embracing livestock and arable, as well as horticulture, if it is not already covered by arable farming. However, the noble Lord, Lord Mackie of Benshie, pointed out that that industry already stands on its own two feet and has a great future.
We want to support all sectors of agriculture, but they are subject to change. They are subject to change in the nature of subsidy, in consumer demand and from environmental pressures. Agriculture is always changing; it does not remain the same. It has changed since I was a child and in 10 years' time it will not be the same as it is now. That will be the case irrespective of CAP reform or individual government policies. We need to seek other outputs for current agricultural activity. Some of those are close to agriculture, such as the advocacy of the noble Lord, Lord Palmer, for biofuels. I share his enthusiasm for those developments. Biofuels and other industrial uses for crops form an important part of the jigsaw which I hope that the Policy Commission on Food and Farming will address.
We need to look also at diversification into the wider rural economy. It is important that we recognise that food production comprises only a part of the equation, albeit an important one. How self-sufficient we should be in food is now perhaps an old-fashioned question. I certainly do not agree entirely with the implication of the noble Lord, Lord Skidelsky, that it is the most important question. We produce nearly two-thirds of our food ourselves. The noble Lord, Lord Palmer, stated that 80 per cent of the food that can be grown indigenously is produced by our farmers. That is a remarkable record. Whether it is the right figure is a matter of contention. But it is not the only issue. More important is the question of how we should utilise the assets of the nation's farming skills and experience, as well as our landscape, to maximise their benefits for the population as a whole. Part of that question concerns food production, part concerns landscape, part concerns recreation and part is agriculture-based but covers diversification into other activities in our rural areas.
The traditional forms of agricultural support are more than creaking; they are breaking down. CAP reform is central to our strategy. It should be the aim of us all to see that the CAP is altered from its present basis—aid offered largely in the form of production subsidies, albeit changing types of subsidy—to something which supports the rural economy as a whole. I was surprised when a noble Lord commented that Margaret Beckett has not been prominent in this effort. She has strongly advocated the point that our central aim must be to focus on the negotiations covering the mid-term review of the Agenda 2000 aspect of the common agricultural policy. Serious negotiations on that will begin by the middle of next year. In the long term, we seek a complete change in the policy.
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The CAP is not the only way in which taxpayers' money has been put into farming over recent years. The noble Lord, Lord Plumb, and others asked about agri-monetary compensation. Over the period of this Government, we have committed £1.7 billion, including about £700 million of agri-monetary compensation, over and above the contribution made by the CAP. Whether we go further on that at this juncture is a matter for pause; we are now considering the matter further. Clearly a great many other pressures are being exerted on the Exchequer. Whether further compensation is the best use of taxpayers' money at this point is something to which we must return. For that reason, I cannot give the commitment which I believe the noble Lord, Lord Plumb, was looking for.
Furthermore, I cannot give immediate commitments on other aspects, including the regional development pillar, a matter referred to by the noble Baroness, Lady Miller. The size of the UK allocation from the RDP has been disappointing and we are working on that. We want to broaden the scope of projects and expenditures that can be met under that heading. Changes can be made, even without complete radical reform of the CAP.
Diversification also forms a part of the jigsaw. Complaints have been made about the burden of regulation and planning restrictions. The noble Lord, Lord Kimball, spoke of planning restrictions which affect diversification of agricultural enterprises. I would ask the noble Lord to wait for a week or so, at which time my noble and learned friend Lord Falconer will have something to say publicly on that matter. Obviously it is an issue which needs to be addressed.
The longer-term recovery of farming has to be seen in a wide context. Sir Don Curry's commission will play a major part in that. Broader rural recovery depends on the Government completing the process initiated by the publication last November of the rural White Paper, to which my noble friend Lady Gibson referred; namely, consolidating policies for market towns, rural transport and affordable rural housing. This last point was taken up by several noble Lords in their contributions. The social dimension of the recovery of the countryside is just as important as the purely economic and agricultural dimensions.
Tourism now forms by far the biggest rural industry and is one that we must seek to sustain. By that I do not suggest that we move from agriculture subsidy dependency to tourism subsidy dependency, but a little help along the way may be given to businesses to help them to become viable in the medium term. My colleagues in the Department for Culture, Media and Sport have given their full support to the tourist boards and other interested groups currently examining the issues.
In the immediate and more local context, tomorrow will see the publication not only of the report of my noble friend Lord Haskins—I am grateful that my noble friend Lord Campbell-Savours has given an unreserved and totally blind commitment to its

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conclusions—but also of the wider report from the Rural Task Force. It will deal in particular with the worst-hit counties of Cumbria, Northumberland, North Yorkshire and Devon. I would prevail upon noble Lords to await the outcome of that report. It will form an important, albeit short-term, indication of the Government's commitment.
We need to develop the tourist industry, just as we need to develop rural businesses as a whole. Furthermore, we need to address the particular problems of the countryside. However, let us not write off the countryside as a failure. Before the foot and mouth outbreak, large sectors of the rural economy were doing relatively well. It is not true to say, except in the remotest areas, that rural England is becoming depopulated. In some cases, the opposite is true and it can be a problem. Businesses and people are moving into rural areas at a rate which sometimes those areas find difficult to accept.
There was a prosperity in much of rural England. We hope to get back to that position quickly. We believe that we can. We already are in many of the areas which were not seriously damaged by foot and mouth.
I was surprised when the noble Lord, Lord Selsdon, reminded me that the House of Lords I entered four years ago was full of peasants. His description of the social origins and the social basis of rural England is partially true, but nevertheless it is a little limited because every profession now lives in rural England: farmers, certainly; agricultural-related trades, certainly; tourism, certainly—but every single profession now lives in rural towns and rural villages. We are more one country than many people think. The rural part of this country has been hit hard in recent months and we all have a responsibility to help it, but in the long run we all face the same problems.
Lord Inglewood: My Lords, the time allocated for the debate is more or less complete. We have had some good contributions and it would be invidious to single out any particular one. Each has in turn complemented the other to create a comprehensive discussion about the issues we have been debating. As is customary on these occasions, all that is left for me now is to beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Child Abuse
6.21 p.m.
Earl Howe Earl Howe rose to call attention to the damage caused to families by false accusations of child abuse; and to move for Papers.
The noble Earl said: My Lords, the abuse of children, whether violent, sexual or emotional, is a criminal and wholly repugnant act. As a society it is incumbent upon us to do all that we can to protect children from such abuse and to ensure that the perpetrators are dealt with in an appropriate fashion.
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Nothing I am about to say should be interpreted as a desire to underplay or belittle such conduct. Indeed, quite the contrary.
My concern can be summed up very simply. It is that alongside the worrying numbers of genuine child abuse cases there is a parallel cause for worry, which is that many innocent people are being wrongly accused of child abuse and whose lives in consequence are being turned upside down without due justification.
I should like to talk today about two of the triggers for false accusations. The first one is a phenomenon known as "recovered memory". Noble Lords may remember that about 10 years ago a number of cases were reported in the press of families being torn apart as a result of adults—usually women—making retrospective accusations of childhood sexual abuse against a member of their family. The accused person—most often a father of hitherto impeccable character—would protest his innocence. A common thread in many cases was that the grown-up daughter had undergone a course of psychotherapy, during which she and her therapist had apparently unlocked memories of previously unremembered traumas in childhood.
In 1998 the Royal College of Psychiatrists set up a working party under Professor Sydney Brandon to look into the whole question of recovered memory. Its unequivocal conclusion was that when apparent memories appear to be recovered after a long period of amnesia there is a high probability that those memories are false. A key passage of its report reads as follows:
"Despite widespread clinical support and popular belief that memories can be blocked out by the mind, no empirical evidence exists that supports the existence of repression or dissociation".
Despite the acute dangers highlighted in that report, and clear warnings issued by responsible professionals, there are still some committed followers of the more extreme theories of memory repression who continue to practise and lecture. The British False Memory Society has records of hundreds of cases of the kind I have outlined, I myself have received several dozens of letters from sometimes quite elderly parents who, after having enjoyed a normal and loving relationship with a daughter, suddenly find that following psychotherapy that daughter has suffered a profound change of character, making accusations against a father or stepfather about childhood abuse alleged to have been committed many years earlier. Quite often she cannot recall any details of the abuse, but she is so convinced of the truth of the memories that she severs permanently all connection with her parents.
That is tragedy enough, but when the police become involved the injustice can be magnified. When allegations of this kind are made, it ought to be clear to all, in the light of the Brandon report, that guilt should not be taken for granted. The consequences of a miscarriage of justice are so grave that the utmost care is needed before there can be any question of criminal charges being laid.
However, many cases are still occurring that are characterised by an uncritical acceptance by the police and social workers of claims about newly remembered abuse. The possibility of false memory is often either ignored or overlooked. Indeed, the lack of any objective evidence of abuse seems to be overridden by a need to protect the person perceived as being the victim.
Those criticisms also apply, incidentally, to cases in which abuse is alleged retrospectively against a care worker or teacher many years after the supposed event. The police often assume guilt from the outset and the burden of proof is effectively reversed. I regret greatly that lack of time prevents me from exploring this important aspect of the topic more fully.
I believe that harmful psychotherapeutic techniques are wreaking havoc with people's lives. It is a great pity, to say the least, that the psychotherapy bodies are unable to speak with one voice about this issue. Indeed, it has been put to me that they are often unwilling to investigate malpractice when it is brought to their notice. Regulation of the profession will be a step in the right direction, but for as long as the profession fails to confront the damage that can be done, my fear is that such damage will simply continue unchecked.
I come now to the second major trigger for false accusations that particularly concerns me, and that is the condition known as Munchausen Syndrome by Proxy or MSBP. MSBP is one of a number of terms used to describe the fabrication or deliberate creation of illness in a child by a parent or carer. The existence of such a syndrome was first put forward in the 1970s and received a good deal of publicity a few years ago during the trial of Beverley Allitt, a nurse who was subsequently convicted of murdering several children in her care. In the past 10 years or so the MSBP theory has been widely promoted in this country and is a firm feature of social work training.
The term MSBP is used to describe two types of behaviour. In the first type, a parent—most often the mother—invents an account of illness in the child, for example by reporting falsely that the child is suffering from chronic diarrhoea. Often this leads to the child being subjected to a range of unnecessary clinical tests. In the second type, the parent is claimed to have deliberately induced illness in the child, for example by poisoning. Again a referral to a doctor often leads to extensive clinical tests which are necessary only because of the parent's interfering actions. MSBP therefore encompasses a wide range of behaviour, from an excessively anxious parent inventing an illness or exaggerating quite minor symptoms, right through to inflicting deliberate physical harm.
The danger of such a broad spectrum of behaviour being packaged into a single portmanteau term, MSBP, is that in the hands of those who are not sufficiently trained or experienced to know better, it is a label that is all too easily applied without due care. This is all the more true when one considers the so-called profile of characteristics that are said to mark
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out a person suffering from MSBP. These characteristics include such things as privation during childhood, repeated bereavement, miscarriage, divorce and past health problems. An over-intense relationship with the child and a desire to be the perfect parent are other supposed markers.
Regardless of the fact that there are very many perfectly innocent, sane people around who might have such characteristics, the very idea of a tell-tale profile of this kind is an open invitation to apply the MSBP label without properly looking at what may or may not be happening to the child. Put at its simplest, there is all the difference in the world between a Beverley Allitt, whose severe personality disorder led her to murder young children, and a mother who invents reasons why she and her child should visit the doctor. Yet under the all-embracing banner of MSBP, and in the hands of the untrained, the two are treated as being practically indistinguishable. It does not matter whether one calls the condition "MSBP" or "factitious illness by proxy", or by any other name. The point remains the same.
In quite a number of the cases I have encountered, when an allegation of MSBP has been made, the mother, in protesting her innocence, has pointed to unexplained symptoms or behaviour in her child. She may have raised her concerns about these with the doctor on more than one occasion. Unfortunately, the act of denial is itself seen as a marker of MSBP a "Catch 22" if ever there was one. But the danger of having, as it were, an identikit profile of an adult considered likely to be an abuser or potential abuser is that judgments can be made too much by reference to perceptions of the parent and not enough—sometimes not at all—from a proper and thorough examination of the child. I have been made aware of cases where MSBP has been alleged without any outward sign whatever of harm to the child, beyond some odd or atypical behaviour. Often, the allegations have been pursued doggedly by social workers over a long period, and it is only after months of anguish, when children have been placed on the "at risk" register and proceedings have been brought in the family courts, that the parents have been completely exonerated—exonerated, that is, if they are lucky; but exoneration, when it comes, is frequently by way of a specialist diagnosis of an unobvious clinical condition in the child: a congenital disorder, a birth injury, an allergy, autism, Asperger's syndrome, an adverse reaction to a vaccine, attention deficit and hyperactivity disorder, chronic fatigue syndrome, and so on.
I have the highest regard for the social work profession and I admire the dedication and commitment that the vast majority of social workers bring to their often difficult jobs. But I suggest that it takes a lot more than a recently acquired social work diploma to be able to diagnose a condition such as MSBP and to attribute symptoms in a child to the wilful actions of a parent. Dare I say also that there are some paediatricians who are not qualified to do this? If MSBP is a valid term at all, it identifies what

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amounts to a serious psychiatric disorder. That kind of diagnosis should be left to those who are properly trained to make it; namely, qualified psychiatrists.
We should remember that all the indications from research are that MSBP is very rare. But it is worth noting that the scientific basis for MSBP as a recognised condition is, at best, thin. As a theory it rests on a small number of anecdotal cases. It has never been tested under clinical conditions and none of the evidence has ever been approved by a national medical or scientific body. Even the connection with the Beverley Allitt case turns out on investigation to be illusory. An official inquiry into the Allitt case rejected any association between MSBP and the murders that Allitt committed. Despite that, the supposed relationship between the homicidal Allitt and MSBP has remained firmly embedded in the public consciousness.
None of this is to deny that there are people who intentionally set out to inflict harm on children in a covert fashion. Where real physical harm is inflicted secretly on a child there is no difference between this type of violence and any other sort. The point, however, is that before jumping to conclusions about MSBP, social workers and doctors ought to look at what is actually going on, or not going on. They should investigate the family's circumstances in the round, including all relevant medical information, in a professional, informed and unbiased manner. They should carry out an assessment of the family's needs in accordance with Section 17 of the Children Act. Quite often, that process is hardly even attempted.
The damage that can be done by the mere suggestion of MSBP is enormous. Chinese whispers begin—what one researcher has referred to as "the first gossamer breath" of rumour—about unexplained illness in a child and about a fussy parent. These can swiftly turn that parent into a potential murderer in the eyes of the community. Members of the family become local pariahs. Social workers are sometimes not clever at handling situations of this kind. Children are made to live in constant fear of being parted from their parents. The climate is like that of a witchhunt in which the voice of reason and all sense of proportion is lost.
There is a considerable weight of published research on these matters. It is this that gives me good grounds for believing that we are dealing with a substantive problem. In that context, the Government's recent consultation document on safeguarding children in whom illness is induced or fabricated, despite some laudable features, is deeply flawed—principally because it fails almost wholly to acknowledge that the topic is highly controversial and that erroneous diagnosis is a real risk.
There are several lessons to be learnt from the points I have outlined. Clearly, lessons need to be learnt about the training of social workers, and about making it far more skills-based than at present. There is a good case for making social workers personally and legally accountable for what they do. Presently—perhaps uniquely among professional people—they are not.
There is a need to improve the monitoring and inspection of social work and the ways in which resources are directed by social services departments. The channelling of considerable resources into chasing the falsely accused and the pursuit of flimsily based allegations have the effect of removing resources from where they are really needed; namely, in the active prevention of real physical violence, such as was inflicted on Victoria Climbie. We need to consider whether the rights of parents to present evidence at child protection conferences should be strengthened in some way. We should attempt to determine whether the complaints system is adequate in cases where a number of agencies, not merely the NHS or social services, are involved. There is also a need to examine the law: for example, to ensure that it is the duty of local authorities, in the first instance, to help and support families in difficulties. Somehow we need to strike a better balance.
I hope that the Government will take these issues in hand and examine them seriously. It is a subject which a Select Committee, either in this House or in another place, could examine to advantage. Having made a personal study of these matters, I believe them to be of deep significance for the well-being of countless children and families up and down the country. My Lords, I beg to move for Papers.
6.36 p.m.
Lord Warner: My Lords, I welcome the opportunity provided by the noble Earl to discuss a number of issues relating to child protection work. I declare an interest as a retired member—with the emphasis on "retired"—of the Association of Directors of Social Services. However, I do not have a social work qualification, so I bring to this topic a degree of detachment or ignorance—depending on one's point of view.
I have a good deal of sympathy with the concerns raised by the noble Earl. When I was a director of social services I had direct experience of the kind of obsessive behaviour to which he referred by way of an NHS consultant with a total attachment to anal dilation. It took a huge effort by social services, the police and others to remove that person from child protection work. Therefore, I can identify with much of what the noble Earl said.
I share the noble Earl's concern over false or recovered memory. However, it is an extremely difficult area to regulate. It sits in the complex area of what transpires between a therapist and an unhappy person. Some therapists in the US in the 1980s, and in the UK in the 1990s, have undoubtedly taken the area of sexual abuse and used it to convey a belief to their clients that it is at the root of their unhappiness. The unhappy person then uses the idea to satisfy his or her-own needs as much as anything else. It is a serious and difficult problem.
Having acknowledged many of the problems, however, I am not totally convinced about the noble Earl's suggestion of a way forward. Perhaps I may refer briefly to the current situation and identify some

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of the strengths in present methods of dealing with the issues surrounding false allegations. They are much stronger than the noble Earl acknowledges.
I have seen on a day-to-day basis what social workers have to deal with in the area of child abuse and the management and the multi-agency context in which they work. It is not a pretty sight uncovering layers of physical, emotional or sexual abuse within families. This is the sordid end of family policy upon which most people prefer not to dwell. Those who perpetrate abuse inevitably lie and deceive; it is in the nature of the problem. Social workers are called upon to exercise extremely difficult judgments. I have found that most people prefer the position of 20/20 hindsight, rather than recognising some of the things that social workers must deal with in difficult situations.
Because protecting children from abuse presents hugely complex problems of detection, assessment and remedial action, we do not at present leave everything to social workers. That is why we have established systems of multi-agency sharing of information and assessing that information, which involves social workers, health visitors, teachers, doctors, police and others pooling their information and then taking agreed action. Despite individual cases that go tragically wrong and capture newspaper headlines, this "working together" system of child protection has served us very well as a country. WHO data comparing homicide rates for all children aged 0 to 14 show the rate falling from 66 million to 27 million per year between 1974–78 and 1993–97. In the US, those homicide rates have increased by about 50 per cent. We are second only to Sweden in our low rate of child injury deaths, so it is not a failing system. We are actually picking out a very large number of vulnerable children, and dealing with false allegations in that context.
We have not only required social workers—and, indeed, other professionals—to operate in a multi-agency way when dealing with child abuse allegations; we have also placed them within a management hierarchy that determines the resources available and the nature of their training and support. Social workers do not have the professional independence of doctors. I do not believe that we can give them that independence in the system that we are choosing to operate in this country. If they are given too many cases to handle, or have too little training and support to enable them to cope with the complexity of their cases, that is not primarily their fault. It is the fault of the managers who manage them; the councillors who determine the local resources for child protection in social services departments, and—uncomfortably—the government departments that largely determine national policy on the length and character of training for social workers. It is interesting to note the finding of a new report produced by the Social Services Inspectorate and the Audit Commission on failing social services departments. It is not social workers who take the blame: the report actually attributes the blame to failures of management.
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Despite the complexity of some of the issues with which social workers have to deal when they handle child abuse cases, we have decided as a matter of public policy that much of this work can be carried out by a generalist social work profession. If we want to improve the situation, I believe that we must look at the training and the resourcing of child protection work. I hope that my very good friend, the noble Lord, Lord Laming, who is not with us for today's debate, will, in his current inquiry into the tragic death of Victoria Climbie, take account of these wider issues when he makes his recommendations.
6.43 p.m.
The Lord Bishop of Birmingham: My Lords, the noble Earl, Lord Howe, is to be thanked for raising this important issue. There are, indeed, cases of false accusations of child abuse. They are distressing and they can be very damaging to families. We are therefore right to be concerned. Nevertheless, I am bound to say that we would do well to be even more concerned about our failure as a society to respond adequately to the issue of abuse itself. Adults can speak for themselves; children often cannot.
The notion of "false accusations" deserves some critical examination. It is often used to refer to cases in which an investigation does not lead to a criminal conviction. But we know a great deal more now than we did only a few years ago about the abuse of children and young people. We know about the skill and cunning of many abusers, the powerlessness of children and young people, the difficulty that we have in listening to them and the difficulty that people experience for very many years in speaking about traumatic experiences, together with the inherent difficulty of securing convictions in situations where it is very unlikely that there will be other witnesses.
We also know that there is a great deal of hidden abuse. When convictions are secured, it is common for several—often a large number—of other incidents to emerge. Very many cases never come to court, even though there is a moral certainty that there has been abuse. I can remember a case where a priest was brought to trial. Two boys were involved. The prosecution outlined the case. One boy gave evidence, but the other, the younger brother, panicked and would not go into the witness box. The case collapsed. The man in question went around saying that he was not guilty. The police knew, and I knew, otherwise.
A debate of this kind must not be taken as a sign of any weakening in our institutional and corporate commitment to make the interest of the child "paramount"—to use the language of the Children Act. We must not forget that the much-criticised child protection teams (police and social services) have a statutory duty laid upon them by Parliament to investigate wherever there are grounds for suspecting abuse. If I may speak for myself, I have learned the hard way that when I receive allegations about a priest or a Church officer, however flimsy they may appear, I have a duty to refer them to the police or to the social services. It is very hard for a bishop to feel that he is

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shopping one of his clergy, but it has to be done. That is because questions about trust between a priest and a bishop have to be subordinated to issues of trust between families, especially children, and the Church.
No one doubts that the experience of being investigated is thoroughly unpleasant and can be traumatic for everyone concerned. I have seen individuals and families terribly hurt by the experience. There are malicious and vindictive individuals who make false accusations. But the fact that the process is hurtful and the fact that accusations are sometimes false do not add up to any reason whatever for not investigating accusations of abuse against children and young people when they are made. Accusations are not false because they are denied.
But one factor that does cause unnecessary hurt and damage is the length of time that is taken both in investigation and in bringing cases to trial. Sometimes this is a matter of incompetence, sometimes a matter of administrative muddle, but more often a matter of inadequate resources. My own experience, though limited, is that the police are very good, but that the social services, while including excellent individual officers, are often understaffed and demoralised. Because of staff shortages, cases are not followed up quickly enough and staff with insufficient experience, through no fault of their own, are put in charge of complex and difficult cases. Our social services have an essential role to play in the defence and protection of children and families. We depend on them. If they are demoralised, we have to ask ourselves who is responsible for undermining their confidence and their competence. We have to take steps, for everyone's sake, to put: matters right.
The issue of child abuse is very serious. It is most important that we do not allow ourselves to become diverted into throwing away the progress made in recent years. There is a danger that people who are unaware either of the extent and depth of the problem or of the professional sophistication of most experienced child protection teams may be misled into supposing, "Perhaps the pendulum has swung too far". It has not. Child abuse is hideously common. It is not confined to any one class, race or gender. Abusers are very good at hiding their crimes. People must be protected as far as possible from false accusations, but not at the cost of weakening in any way our paramount duty to protect and to listen to children and young people.
6.48 p.m.
Lord Carlile of Berriew: My Lords, I, too, welcome the opportunity to take part in a debate on this very important subject. I should declare two interests: first, as a barrister, I have conducted prosecutions and defences in some extremely serious child abuse cases. They include some of cases which I know the noble Earl has in mind from his research, and which have given rise to controversy. My second interest is as chairman of an independent review that will report
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next March to the Welsh Assembly on the safety of children in the National Health Service, which has relied to an extent upon work carried out in the past by the noble Lord, Lord Warner. That will be a very full review of all the connected issues.
I am concerned that this debate should have a proper balance. Indeed, the right reverend Prelate sought to take steps in that direction.
Anyone who has sat in court—and I hope that the noble Earl has taken the trouble to look through case papers and to sit in court through some trials—and listened to damaged adults giving evidence of terrible things that happened to them 20, 25 or 30 years ago cannot underestimate the importance of something being done to bring closure to those cases.
I shall comment on whether what we do is the right way of achieving that in a moment or two. That prosecutions are justified in many cases is self-evident from the very large numbers of pleas of guilty which have been recorded in the majority of child abuse cases. People do not plead guilty, knowing they will receive long terms of imprisonment, without being guilty on the whole.
There has been criticism of the way the police obtain evidence. Detective Chief Superintendent Robbins of Liverpool is on record as saying that the police adopt a quite different approach to obtain evidence in these cases, but his remarks have been totally misunderstood. How else are the police to obtain evidence save by asking people in an even-handed way without creating prejudice if anything happened to them when they were in an institution years ago of which they wish to make complaint?
When cases are brought to court we have a system which is called jury trial which enables people like myself and my noble friend Lord Thomas of Gresford, who also has great experience in this field, to test the evidence and to present it, to call expert witnesses and to explore precisely such issues as recovered memory syndrome, which have been raised by the noble Earl I have done that in particular myself in only one case. I would challenge him to tell the House how many cases there really have been in which recovered memory syndrome has been relied upon by the prosecution as evidence towards conviction. I believe there have been very few—probably fewer than five in this country, and possibly no more than one or two.
It is very important that the House should not think that absolutely any memory that comes back is the result of recovered memory syndrome. It is a term of art and refers only to memories which have been recovered as a result of a form of therapy which, as the noble Earl said, is largely discredited in this country. That is why it is not relied upon in court.
The noble Lord, Lord Warner, mentioned anal dilatation. I do not believe that there has been a case based on anal dilatation ever in a criminal court in this country, certainly not in the past 10 or 15 years.

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It was discussed in the Cleveland abuse inquiry and was thoroughly discredited then; and anyone in practice has seen repeated statements by a celebrated doctor from Manchester, Dr. Raine Roberts, in which she supports the view that you cannot rely on that kind of evidence at all, ever, ever. With great respect to the noble Lord, to raise anal dilatation in this debate is to talk about ancient history that does not apply to the present time at all.
Again, regarding Munchausen's syndrome by proxy, can the noble Earl tell us how many prosecutions have been brought as the result of a false diagnosis of this syndrome and, if so, whether that diagnosis was incapable of challenge in court? I do not believe that he can refer the House to any such case.
In the minute or so left to me I should like to put forward a particular view, which may be of assistance to the House, based on my experience of spending many months in court dealing with these cases. I believe that the criminal justice system is a very blunt instrument, especially for dealing with events which occurred 20 or 30 years ago. I am not sure that making people go through giving the evidence of what happened to them is cathartic at all. I have certainly seen very little evidence of catharsis: I think it may be quite the opposite. Child abuse is quite as much a problem as a crime. I would raise the question: do we really achieve much by sentencing people to 10, 12 or even—in a case which I am pleased to say I prosecuted—18 years' imprisonment for child abuse? Does that really serve much of a purpose? Possibly we should take a fresh look in an attempt to find a different way of closing these cases which would help to resolve the problem for the future and bring closure to the victim.
6.54 p.m.
Lord Eden of Winton: My Lords, I think it is important to underline the fact that this debate is about false accusation of child abuse and the damage that that can cause to families. I put the emphasis on that because I want to talk primarily about it, but at the outset I would make clear what I am sure is the view of every noble Lord involved in this debate: our wholehearted condemnation of any form of child abuse. Obviously we must do everything we possibly can to ensure that action is taken to prevent that or to deal with it when it does arise in the most effective and efficient manner.
I very much support the thinking behind the NSPCC's "Full Stop" campaign. For example, it is most important to provide child protection and family support projects and to give children someone to whom they can turn, someone in whom they can confide away from the immediate home circle, which is possibly the origin of their anxiety, unhappiness or distress. When children are frightened they sometimes do not want to talk about their fears; so it is better for them to talk to a third person independent of their own environment.
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However, we must be warned by the growing weight of evidence that the experts in the social services, the medical profession and the police can get things tragically wrong. It arises either because they have been conditioned to believe that everything the child says has to be true or they fail to interpret correctly the physical symptoms they may be examining. What is most dangerous of all is that they might have a pre-conceived presumption that abuse has taken place. If so, the child is then subjected to suggestible questioning designed to substantiate that opinion.
They appear to be too ready to jump to a conclusion on the flimsiest of evidence. In one or two cases I have heard about, when the police are brought in they sometimes trawl the neighbourhood to seek corroboration for that so-called evidence.
It is well known that children can become unhappy for many reasons. There may be trouble in the home, problems at school, jealousy, anxiety brought on by physical changes in their own body or simply by being different from their peers. They might perceive themselves as being too tall, too small, too fat or too thin, and might find themselves unhappy for those reasons. They will then crave attention and in the process of craving attention they will deliberately put themselves into trouble and might even inflict harm upon themselves.
I have met several victims of false accusations: teachers and social workers. Some of them are in prison, some have served prison sentences and all of them have had their reputations completely destroyed. Some have maintained their innocence to this day and others have been proven innocent. I will concentrate on one particular family which I know about, where the child became ill and the doctor advised that she should have a certain form of hormonal drug treatment. Her condition deteriorated and the parents were then advised to have the child referred to a psychiatric hospital unit. More drugs were administered and the child was subjected to questioning. Elements of abuse were brought into the questioning and the experts decided that the father was responsible for the abuse. The experts then visited the family but did not use a shred of common sense. They did not study the circumstances of the family or realise what a loving family situation was there. Instead, they threatened to remove the other children unless the father was kept away. Finally, the child herself was kept away from the family for several years—what amounted to institutionalised kidnapping. In the end no case of abuse was found and yet there was no redress whatever for the family or for the innocent victim and not a word of apology from anyone in authority. The family and, more importantly, the child have been deeply damaged.
I support very much what my noble friend said from the Front Bench. I hope that all professionals involved in child abuse cases will proceed with caution and first study the family circumstances. They and, above all, the police involved in these cases should be seekers of the truth. Truth is in the best interests of the child.
7 p.m.
Baroness Pitkeathley: My Lords, I declare two interests. First, I am a qualified social worker and, secondly, I am the interim chair of the General Social Care Council.
Listening to some speeches in the debate I begin to feel that social workers are damned if they do and damned if they don't. Society is quick to condemn social workers for not taking action. "How could they have missed that obvious abuse?", we ask in the tragic cases of Victoria Climbie and Lauren Wright. On the other hand, inquiries as to whether children may be in danger of physical, emotional or sexual abuse are seen as interfering in family life and with the rights of parents, and are therefore unacceptable.
Of course it is right that we should be concerned about false accusations and I am most grateful to the noble Earl, Lord Howe, for giving us the opportunity to debate the matter. But in our anxiety to protect parents let us please take care lest, to borrow the right reverend Prelate's metaphor, the pendulum does not swing back to the horrendous situation in which I worked as a social worker 30 years ago when child abuse was simply not acknowledged. In fact, when I once raised with my senior officer my anxieties about three small boys having been sexually abused by their parents I was told "to go away and take my dirty mind with me". The memory of those three small boys—now, no doubt, fathers themselves—and my failure to protect them because sexual abuse was a no-go area, haunts me still. Therefore, we must be aware and beware of throwing out babies with bath water.
I am grateful to the noble Earl, Lord Howe, for acknowledging the dedication and commitment of most social workers because they are—I believe that we should acknowledge this—a very easy group to take to task and even to pillory. It is interesting that the criticism about social workers is often stronger, and certainly more self-righteous, than any reaction we hear to doctors, nurses, teachers and clerics, although in child protection cases those professions are often equally as involved. We also conveniently forget that doctors can close their lists if they have too many patients, that teachers can send children home, or even close the school if they do not have enough teachers, yet no social work department can ignore a report of a child being abused, however overworked and overburdened it is.
We know that social workers should be there to protect children, to support elderly people and to organise community care for those who have been discharged from hospital, but do we really know anything of the conditions under which they do that? How many of your Lordships have been into a household where no cooked food is ever prepared or eaten, where the notion of there being a responsible person to get the children up and off to school does not exist, where the only purpose anyone in the household has is that the next drink or the next "fix" is available, no matter how, where no notion of privacy, or of there being things children should be
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prevented from witnessing exists, so that any kind of drug taking or sexual activity takes place in front of children? Have any of your Lordships been to houses where children are routinely brutalised and abused? As the noble Lord, Lord Warner, reminded us, most of us prefer not to admit that these things even exist, let alone have to deal with them. Yet for most social workers, often young and inexperienced, these are day-to-day issues. They are faced with the knowledge that changes in human behaviour are hard to bring about, but that social workers are expected to do so.
Although I defend social workers—your Lordships will no doubt say, "Well she would, wouldn't she?—I do not for a moment want to suggest that no improvements can be made. That is why the Government have recently put into place the most far-ranging set of reforms ever seen in the social care world. They have set up the National Care Standards Commission which will inspect all social and healthcare services, including residential establishments and domiciliary care agencies. The other body they have established, of which I am the interim chair, the General Social Care Council, has been eagerly awaited for about 25 years. It is the first ever regulatory body for the social care profession. It will establish codes of conduct and practice for social care workers, set up a register of approved practising professionals and regulate and support social care education and training about which your Lordships have expressed concerns. We aim to provide leadership for the profession, to be the champion of good practice and the guardian of standards, We aim to raise the profile of the profession, to improve its image and to put social care as firmly on the political agenda as health currently is. Once the register is established we shall be able to receive complaints about social care workers and take appropriate action if necessary, including striking them off the register. Social workers themselves will be the first tranche of workers to be registered.
I remind your Lordships that every criticism which is made of those who work in this field sends the already low morale of an undervalued profession plummeting down. The GSCC intends to improve recruitment by increasing public confidence, championing good practice and challenging bad practice and improving the public image of the profession. Social care workers are in a unique position of responsibility working with some of society's most vulnerable members. We in the General Social Care Council aim to ensure that we can recruit and retain a skilled and well qualified workforce so that there will in future be fewer opportunities for criticising and many more for praising this unjustly maligned profession.
7.6 p.m.
Baroness Carnegy of Lour: My Lords, it is disturbing to say the least that only 12 years after the carefully considered Children Act became law its arrangements in some respects of child protection are having the reverse effect of what was needed. My noble friend has brought together a far wider

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collection of facts than that to which he spoke this evening. He points out that out of a smaller number of children being put on the child protection register, a higher proportion are now going into care than used to be the case. Above all, in relation to this debate, no fewer than 160,000 cases of child abuse a year are alleged, of which only 40,000 go to a case conference and only 25,000 result in children being put on the register.
I want to make one point only and I make it as an outsider who has not been involved in the system at all. In identifying what must be done it seems to me that it is important that the Government should not be bamboozled by the detailed, sometimes dubious and often conflicting theories and explanations offered by those who have the job of thinking about these problems and by the lobbying groups in the background.
It seems to me that what has to be accepted first and foremost is that the system we have is simply not robust enough to withstand the pressures under which social workers, the police and, to an extent, doctors now have to operate. The pressures come from the media and from an increasingly anxious public. It is not easy, alas, to lessen those pressures. It is a fact that newspapers and television compete by means of ever more shocking headlines and lurid reporting and, of course, nothing is more shocking than the abuse of a child, proved or alleged. The good side of this is that nowadays we are all more vigilant in our local communities and that organisations such as ChildLine exist. The bad side is mounting public anxiety which, as we all know, rises sometimes to near hysteria and frequently seeks a witch-hunt.
Whatever those in charge of the various parts of the system say, the prevalent atmosphere is very frightening indeed for the social workers and police who have to make the initial decisions of what to do in families when abuse is first alleged. Common sense and legislation may say that they should talk with the parents and the child, offer support and keep in close touch, but it is all too easy to picture the headlines and the letters to the local paper if things go wrong and to play safe by recommending taking the child away.
Even the more senior social workers who later chair case conferences are not immune from pressure. Solidarity with a junior colleague is attractive and it is tempting to uphold the original decision.
I apologise to the knowledgeable people who have spoken for over-simplifying. I do so to make the point that the strong public emotion that surrounds social workers puts unfair pressure on professionals who are not equipped to withstand it. That fact above all leads to some of the suggestions that my noble friend has made in his document. He suggests that better training for social workers and the police is crucial. Perhaps there should be more stringent selection of those involved. The person who chairs a case conference should be independent, not from one of the agencies involved in the case. There should be
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closer monitoring, not, as at present, by advisers, but by inspection of how resources are used. Lead responsibility for investigations should be taken by legally qualified teams. Perhaps social workers should be personally liable in civil law for negligence. To reduce public irresponsibility, there might be legal sanctions against malicious false allegations.
Something has to be done in general about the problem. I hope that the Government will not be bamboozled by all the detailed issues, but will see the problems clearly. Children who go into care needlessly suffer unnecessarily from it. About 120,000 innocent adults who are accused every year need not suffer.
7.12 p.m.
The Countess of Mar: My Lords, I am grateful to the noble Earl, Lord Howe, for introducing this debate. I echo all the condemnation of actual abuse of children. I declare an interest as patron of a number of ME associations. I shall restrict my remarks to children suffering from ME. My sister is a social worker, but I have not involved her in any of my parliamentary work.
I first became involved in the subject three years ago. I was approached by a paediatrician who was very concerned about the wellbeing of a boy who had been diagnosed with ME. I shall not go into detail because, as I have been told repeatedly, Ministers cannot intervene in individual cases. Time is also restricted.
Like the noble Earl, I have had a large number of letters from parents and grandparents accused of child abuse. Their children or grandchildren have been put on the "at risk" register, taken into care or made wards of court. What I read and have been told profoundly distresses and disturbs me. I am reminded of the witch hunts of previous centuries. This time, the victims are frequently nice middle class families whose only fault is to be concerned about their child, who has ill-defined symptoms from which he or she does not rapidly recover. For various reasons, some social workers—I repeat that it is some, not all—are not prepared to consider that those conditions might be organic. Suspicion leads to referral, which leads to a huge investment in social services, health services and court resources. There is no presumption of innocence, as there is in other similar situations, and there seems to be no requirement for social services to prove guilt.
A terrible injustice is done to the families involved. Virtually without warning, the parent or parents find that they have been unjustly and unnecessarily investigated under the child protection proceedings of Section 47 of the Children Act 1989. Somehow, the Act has been so misconstrued as to enable some social services departments, paediatricians and organisations such as the NSPCC to abuse their powers, through misplaced zeal and ideology or through sheer incompetence, to create tremendous distress and psychological damage to parents, children and the wider family, sometimes destroying

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the family structure. There is no measuring the levels of anxiety or the harm done to children and their carers while the whole weight of the law is brought to bear on them.
Even when accusations of child abuse against a parent or parents have subsequently been withdrawn, often after prolonged and costly legal action, the stigma of being branded a child abuser by the local authority remains with the parents. Once a social services referral is placed on their Samson database, the details remain for ever, no matter what the outcome of later inquiries. The referral becomes common knowledge in the local community. Those who work with children, either as carers or teachers, are refused employment and those who have been active in the community or in voluntary work find that they are no longer required, especially if children or young people are involved.
These are people who have been proved innocent, yet they are treated like criminals. What is more, their sentence never ends. Their child, who is wrongly perceived as having been abused, is pitied. Parents are afraid to seek medical treatment for themselves or their children. If they are brave enough to go to the doctor, their complaints are often dismissed as somatisation.
I know that many social workers, doctors and voluntary workers do wonderful work with seriously deprived children and their families. I know that they bridle against the incompetence of a small number of their colleagues. We need to think again about what we expect from social workers and to ask whether we are expecting too much. The communal hysteria that is generated around child abuse must have an effect on those who work with children. Are we being reasonable in our expectations? I think that perhaps we are not.
When I originally asked for an inquiry, I had no idea that the problem was so widespread. I am grateful that the Minister in another place has agreed to meet me with some of the parents concerned, but I fear that that may not resolve the problem. There is a need for an inquiry to resolve the problem, even if it is a Select Committee inquiry, as the noble Earl has suggested. Abused parents need to be able to tell their stories. Solutions need to be sought and these dreadful injustices must be put right as far as possible. There needs to be a cleansing.
7.17 p.m.
Viscount Bridgeman: My Lords, when a subject such as child abuse is raised, I am minded to see a parallel with the dreadful events of 11th September, when the sheer dreadfulness of the event has meant that many topics that are in some way connected are in effect taboo. The situation is similar, in a somewhat different way, with child abuse. The subject raises such strong emotions that objective discussion is in many ways inhibited. That is why my noble friend Lord Howe has done the House a service in initiating a debate in which such frank and informed discussion is possible.
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It is widely agreed that facts relating to possible cases of false accusations of child abuse are notoriously difficult to get, but an experienced lawyer in the field has made two remarks to me. First, in a case of false accusation, a decision the wrong way either way ends up as a disaster for the child. Secondly, he reminded me of the saying, "Once an abuser, always an abuser".
Any inquiry into the subject reveals many different and often contradictory impressions of different social services departments. On the one hand we have the Climbie case. On the other hand there are authorities that say that the Children Act is working well and many cases are largely resolved without recourse to the courts—a key plank of the Children Act. Some critics will say that Section 17 of the Children Act—the initial assessment—is hardly ever used, but others will say that they use it many hundreds of times a year.
Some social services departments appear to be consistently good, while others are consistently bad, but few, if any—good or bad—will not have a significant number of vacancies unfilled. Recruitment for the profession is not good and it does not enjoy high public esteem at the best of times. Nor is it well paid. That is why we particularly welcome the information provided by the noble Baroness, Lady Pitkeathley, about the Government's initiative. Add to that the universal complaint, if not of under-funding, then certainly of inefficient use of resources, and it is a depressing situation.
It has been said rightly that in potential child abuse cases preventive measures are better than reactive action after the event. My noble friend Lord Howe drew attention to that. But the preventive approach is inherently more expensive—the social services are shooting at moving targets. With limited resources of money and manpower, the preventive approach goes by default with all the unsatisfactory outcome that that entails. Examples of that have been cited in the debate.
Therefore, I am saying that many of the scandals about which we have heard can be traced back to a shortage of resources to perform the work adequately. While they cannot in any way be excused, it is as well to remember that that is frequently a contributory factor.
I take the opportunity in this debate to pay tribute to the many voluntary organisations which play a part in the fight against child abuse. One such organisation of which I have some knowledge is the St Michael's Fellowship. However, it is one of many similarly admirable organisations.
St Michael's was formed at the turn of the last century to assist what were euphemistically called "fallen middle-class women". Typically, it organised adoption for the baby and arranged for the mother to be trained for a career. Now it is involved at the hard end, where parents and children are sent by social services to be accommodated in one of the St Michael's houses under close supervision. Many of those cases are of suspected child abuse, and that is why I mention it.

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At St Michael's, specialised treatment from, for example, social workers and psychotherapists is made available as required. At the end of, usually, three months, an assessment is made as to whether the child should be taken into care. The aim of the organisation is to make the right decision for the child in the longer term. That decision is made under conditions of close observation, and it is hoped that the possibility of false accusations of child abuse, of which we have heard this evening, will be minimised.
Sadly, institutions of that type are comparatively rare. However, even with a capacity as modest as 30 cases a year, serving all the London boroughs, there are frequently vacancies at St Michael's due to the inability of social services to fund the residential cost. Sadly, that serves as a further reminder of the funding crisis to which I referred earlier.
7.22 p.m.
Lord Lucas: My Lords, I do not share the impression that I gained from the speech of the right reverend Prelate that, because of the horrendousness of the effects of child abuse, we should pay any less attention to the horrendousness of the effects of false accusations of child abuse. Nor do I share—I am sorry that the noble Lord is not in his place—the impression given by the noble Lord, Lord Carlile, that the problem lies in cases that reach the courts. It appears to me that the problems lie in cases that do not reach the courts and in what happens in the months and years before that stage is reached.
With regard to the question raised so aptly by my noble friend, my feeling is that things do not feel right. There is too much pain, and too many of the expressions of pain feel real and justified. The outlying situation is one in which we could reasonably expect there to be a witch hunt.
Child abuse is a particularly nasty crime and one about which I feel extremely strongly. I would impose penalties on child abusers that this House would not contemplate. It has devastating effects on the children concerned. It is extremely hard to detect and prosecute, and abusers habitually deny any involvement in it. It raises great fear and concern among the public to the extent that occasional outbreaks of mob violence take place and, certainly among the media, rabble-rousing.
Professionals, too, have over the years consistently shown their ability to lose a sense of balance and professionalism. I lost trust in the NSPCC a few years ago when it ran an advertising campaign claiming that one in eight children is subject to child abuse. The NSPCC cannot see that child abuse is a term which should be reserved for the serious abuse of children, which is far too common. Its claim would suggest that 100 of your Lordships had suffered child abuse and that perhaps 50 of your Lordships were child abusers. That is so far from reality and reason. It is very important that such an organisation maintains a sense of balance and professionalism.
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Within the prosecuting professions, if I may call them that, the succession of ideas from anal dilatation to recovered memory and, currently, Munchausen's syndrome by proxy create a very difficult situation. Faced with someone who is determined to pursue an allegation of child abuse, it is extremely difficult for professionals to gather together information, to resist pressure, to calm people down and to form a reasoned debate in a case conference. Great public concern and passions and diversions aroused in the profession do not create an easy atmosphere in which to operate.
I am particularly disappointed that the Department of Health should have published its consultation document as it has. The department has made great strides under this Government in evidence-based medicine. I applaud it for NICE, and I applaud it for doing the things that have needed doing for a long time. But here is an example of the Department of Health publishing a document which simply is not based on research or proper consideration. I hope that the department will recover its balance in this matter.
I believe that this is an area which demands our attention. We should expect the professional systems which deal with these extremely difficult cases to have high standards, to be open, to be subject to review and to provide a situation in which it is possible for the accused to have real rights. I am most encouraged by what the noble Baroness, Lady Pitkeathley, said about what she and this Government are doing. I hope very much that matters will lead in that direction.
I want to pick up two particular points. I should be encouraged if it were possible for the accused to be given greater representation at case conferences. I believe that if a case conference had a professional present to look after the interests of the accused—be it a lawyer or anyone else—that would tend to hold the level of rationality and proper professionalism of the conference at a consistently better level than is sometimes the case.
Unlike the noble Lord, Lord Carlile, I do not like the practice of trawling. One can imagine it applied in a totalitarian society where the police might offer people £1,000 if they were able to give evidence against me that I had said something rude about the Government. It is too much of a temptation, particularly where the people being asked are themselves criminals or damaged people for one reason or another. It invites false accusation, especially when there is no penalty for making a false accusation. I believe that such a technique should be used with a great deal of care and be subject to the type of supervision which might be possible if an independent element were introduced into case conferences.
7.28 p.m.
Lord Mitchell: My Lords, I want to speak about a case which involved a woman called Sally Clark, a woman who may well have been falsely accused of

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the ultimate child abuse; namely, the crime of murder, and, in this case, double murder. I know that I am changing the debate slightly but perhaps your Lordships will bear with me.
Noble Lords may recall this case at the end of 1999 because it attracted much media publicity. Mrs Clark was accused of killing her two infant boys, Christopher and Harry. She was convicted and is now serving two life sentences.
I declare a personal interest. I do not know Sally Clark but I do know her father, Frank Lockyer. Mr Lockyer is a retired police divisional commander. He is not a close friend but is one of those people one meets in one's lifetime who makes one proud to be British and restores one's faith when sometimes it lapses. In these days, when we hear all too frequently reports of police misconduct, Frank Lockyer stands out as the total antithesis—a fine policeman of total integrity. He is a man who has lived his life with absolute faith in the legal system which all in this House represent, but he is a man who today is totally devastated, convinced both as a police professional as well as a loving father that the British legal system has committed a terrible injustice.
As stated by the noble Earl, Lord Howe, a fundamental tenet of our judicial system is that everyone is presumed innocent until proven guilty. When a family suffers the unbelievable tragedy of two infant deaths, the pathologist may say that each individual child died of cot death. But increasingly our police and prosecution services are treating such an occurrence not as a tragic coincidence but as a double murder. In practice the mother is treated as being guilty of those deaths unless she is able to prove her innocence to a jury's satisfaction.
Sally Clark is a typical young woman of our age. She is a solicitor, married to Stephen Clark, who is also a solicitor. She bore three sons: Christopher, who died aged 12 weeks, and Harry who died 14 months later, aged seven weeks. Their third son survived, thanks to hospital care in the early weeks. He is nearly three. She was convicted of murdering Christopher and Harry because of a series of false accusations.
Mrs Clark was originally advised to plead guilty to infanticide on the grounds that if she did so it would be highly unlikely that she would receive a custodial sentence but, as she has said, she refused to lie. She was charged with murder because Professor Michael Green, one of the country's leading eye experts, certified that Harry, the second dead child, suffered from shaken baby syndrome. For 20 months that is what everybody believed. To add to the confusion, prosecution expert pathologist, Dr Alan Williams, changed his opinion on the cause of death of the first child, Christopher, from natural causes to smothering to death. Mrs Clark was charged with double murder.
The day before the trial began, Professor Green signed a new statement saying that he was sorry, but
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he had made a mistake. There were no retinal haemorrhages and Harry did not have the classic signs of having been shaken. Defence expert, Professor Phillip Luthert, who encouraged Professor Green to admit his terrible mistake, said last week on national television that he fully expected the case to be dropped and that Mrs Clark would be set free when the prosecution case collapsed. But the prosecution case did not collapse. The prosecution team thought that they could still win the case if they switched Harry's cause of death from shaking to smothering. They did and they succeeded. All the prosecution experts who at committal had supported shaking now said that what they had found was consistent with smothering. I am not a lawyer, let alone a criminal lawyer, but I find that conclusion baffling. I say that because I am informed reliably that there is no known medical test to prove that a baby has not been smothered. So, how could they have said that he had been?
The case was a minefield of medical and legal gobbledegook. Jargon was thrown all over the court and it was impossible for anyone except the experts to comprehend what was said. The jury must have been totally confused until, out of the blue, one single fact was introduced by the prosecution which sealed Mrs Clark's fate. Professor Sir Roy Meadow, a leading authority on child abuse, told the jury that the chances of there being two innocent cot deaths in any one family were in excess of one in 73 million. How did he reach that figure? He multiplied the chances of one cot death—one in 8,600—again by 8,600. That is interesting, but it is mathematical nonsense.
The jury probably did not understand the ins and outs of a highly technical case but they certainly understood how to interpret betting odds. People who play the National Lottery have no problem in understanding clearly the basic principles of probability theory. As noble Lords will imagine, the tabloids, with their instinct for the jugular, had a field day. Every newspaper in the land was plastered with that headline-grabbing number. The Clarks know of 40 families who have suffered the tragedy of two babies dying from cot deaths. How does that square with the assertion that was made? Not particularly well. It is not surprising that Sir Roy Meadow has since refuted the statistic.
However, the story gets worse. The Court of Appeal rejected Mrs Clark's appeal. It said that juries take no notice of statistics. I think not. The truth is that that mistaken statistic of one in 73 million continues to haunt the case. Now there is a possible breakthrough. It appears that a team in Manchester has isolated a gene which could be the cause of inexplicable cot death. Now it is being said that if both parents carry that gene, the chances could be as low as one in four.
I know that I have gone over my time. In conclusion, perhaps I may say that we hope for a successful resolution to this case.
7.35 p.m.
Baroness Fookes: My Lords, the distressing story described by the noble Lord, Lord Mitchell, reminds me of my intention to mention sudden cot death as another trigger to add to those mentioned by my noble friend Lord Howe. In New Zealand there has been a breakthrough in the prevention of cot deaths as a result of changes in the mattresses used for infants. I understand that fire-retardant mattresses can set off an unfortunate chain of events which can lead to cot deaths. Since that change, over the past five years, there have been virtually no cot deaths in New Zealand. That seems to me to be a striking statistic. It might even be helpful in dealing with the distressing case described.
That indicates clearly the danger of false accusations. I am deeply grateful to my noble friend for introducing the debate. The fact that there is real child abuse, which we all abhor and detest, does not mean that we should not consider those innocent people who may be accused and deal with them as fairly and expeditiously as possible.
I have tried to think what it might be like for a loving and innocent parent suddenly to find himself or herself in a welter of accusations. That must be a complete nightmare and something about which one could not think with any degree of belief. We owe it to such people to do the best we can when investigations are being carried out. I rather liked the suggestion that there should be a friend or supporter in a case conference for an accused person. There should certainly be a presumption of innocence until proven guilty. That is the normal manner of our judicial proceedings but that seems to get lost in these proceedings. I understand that if a prima facie case of abuse is of such a serious nature that one cannot afford to wait, that that should take precedence. However, that is not always the case. It is important for natural justice to be observed.
Furthermore, as has been mentioned by one or two noble Lords, there may well be a role for outside charities. There has been criticism of the NSPCC by my noble friend. I have connections with that organisation. My understanding is that the NSPCC is now involved far more in preventive work and support for parents rather than simply engaging in inquiries leading to prosecution. If, as I understand, social services departments are under severe stress, it seems reasonable to make use of charities such as the NSPCC, which has a wealth of expertise. I hope that that is a matter which the Government, in considering the future of social workers, will consider closely.
It also seems to be a prudent and sensible suggestion to have an inquiry by a Select Committee. That could be by this House, which I believe would be admirably suited to do that; by the other place, or by a Joint Committee, if that were considered a good idea. I do not think that we can leave things as they are. This is all much too serious. We need to be concerned not only with child abusers, whom I would
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dearly like to strangle, if I am allowed to make such an impolitic remark. It is equally important that we support those who are innocent of any wrongdoing.
Finally, in response to the right reverend Prelate, one should not overlook the effect on a child if the so-called abuser is innocent. Let us imagine what it must be like for a child with a loving family and where nothing is wrong suddenly to find himself or herself taken out of that family unit and put into care. I cannot imagine what bewilderment there must be. How would one explain that to a child? If accusations are made and the child is taken away without proper controls being in place, that in itself could be a form of abuse. I shall end on that point, with renewed thanks to my noble friend.
7.40 p.m.
Lord Northbourne: My Lords, I intend to focus briefly on the recent sexual abuse of children, not on things that took place a long time ago. I intend to argue that the child himself—and it is a point the noble Baroness has just made—may be gravely damaged, not only by the accusations but also by the process. It is a point that the right reverend Prelate tended to ignore.
The noble Lord, Lord Carlile, referred to the good record of the courts in abuse cases. That has been confirmed to me by others. I have a great respect for the courts. Sadly, the damage is caused long before the case gets to court; so, it is the process. Different local authorities work in different ways. There is no set pattern. Sometimes intrusive questioning of the child by social workers or psychiatrists is used to try to reveal supposedly hidden memories. A child's hesitant statements can be seized upon by an anxious or over zealous adult whose unshakeable conviction is of the accused's guilt. That allows premature closure of the mind to alternative explanations. Parents and other accused persons do not have any right to make representations or to be present at case conferences; I am sure that that situation ought to be remedied.
When a decision is made it will probably take nine months before the case comes to court. Bear in mind that currently only about one-sixth of all accusations lead to a conviction.
From my own work with the Stepney Children's Fund over 14 years I am absolutely in no doubt that sexual abuse does cause great damage to the child. That damage is mainly emotional damage and it often lasts for life. Abuse is most serious when it is perpetrated by an adult who is an authority figure in the child's life, an adult whom the child respects and trusts. Abuse is worst of all when the accusation is against "my mum" or "my dad". That sort of accusation destroys the child's whole world, destroys his security. It destroys his trust and belief in human goodness. It destroys his trust in his own self-worth. A parental haven of safety suddenly becomes a source of alarm and anxiety.
At what stage is the damage caused? Clearly, if there is an abuse that will be the trigger. If there has been no abuse the child's world can still be torn

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apart. A child is damaged by a false accusation. A. child is damaged when dad is led away by the police. A child is damaged when he is torn away from his family and put into a children's home for his protection. A child is damaged when he is intrusively questioned by an adult who tries to make him remember being abused, who tries to sow doubts in his mind, who tries to persuade him to testify against his father, Long before the case gets to court the damage is done. Even if the court finds the parent innocent there will always remain in the child's mind a lurking suspicion. Trust once doubted cannot be restored. The shock and sense of betrayal can and often does affect the child for life.
I am truly sorry for those who have to make decisions in this type of case because there is no safe option. Either way it may destroy the quality of life of a child and his family if they get it wrong. A judgment has to be made at every stage and the quality of those judgments is crucial.
What can be done to improve the chances that the right decisions will be made at each stage? A number of proposals have been made this evening. I suggest the following. All concerned must realise that there is no safe option. These decisions are so serious that they must be taken only by experienced, responsible, well trained professionals who understand the inherent problems which may arise as a result of the decision they make. If we do not have enough professionals we must buy some more. The criterion for decision, I believe, should be: is more damage likely to be caused to the child by pursuing the case or by not pursuing the case? Before deciding to pursue the case it would be logical to ensure that there is corroborative evidence, that the accuser does not have a private agenda: for example, revenge or financial gain.
There will be a need to change government guidelines and possibly the law. It has been suggested that false accusations of sexual abuse should become a criminal offence. The Royal College of Psychiatrists has provided guidelines for practitioners questioning children. These guidelines should be strictly adhered to by all adults questioning children. The Government should ensure that all local authorities enforce this rule.
Finally, all parents need to understand their responsibilities towards their children. It is no good punishing parents who fail to live up to a code of behaviour which has never been communicated to them. All parents should know how much damage they will cause to their child if they make a false accusation against their partner.
7.46 p.m.
Lord Astor of Hever: My Lords, I want to raise the concerns of some parents of children with autism and attention deficit hyperacitivity disorder. I declare an interest. My wife and I have one daughter with autism and another with ADHD. My wife is patron of the ADHD charity, ADDIS.
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One child in every 100 in the United Kingdom is autistic. The National Autistic Society is extremely concerned about false accusations of child abuse. They are directly and personally involved with families affected by it. ADDIS is also concerned about these false accusations. Because of the unwillingness of some social workers to accept ADHD as a recognised condition they sometimes wrongly assume that the symptoms of ADHD are symptoms of abuse.
A further complication results when parents deny this accusation and seek a medical diagnosis for the child. Social workers have been known then to use MSBP as an explanation for the parents' behaviour. In several extreme cases where families were placed in family assessment units at the request of the social services, the referring social workers have still refused to accept the diagnosis when the assessment units confirm and validate the diagnosis, even sometimes commenting on the excellent parenting skills. This places untold stress on the family, and ultimately the child's real needs are not being met
The effects of having an impaired and disabled child both on the family and the child are enormous. No words can do justice to the emotional pain, the sheer physical hardship and the financial drain on these families. They rightly look for assistance from the statutory authorities. But it is a sad fact that a small minority of authorities and their staff charged with providing services to disabled people and their families are turning the problem back on to the parents due to their over reliance on psychoanalytical theories. Such officials blame the parents for causing the child's problems when it is the child's problems causing the family to malfunction. This has led to parents and children with autism and ADHD being labelled wrongly as child abusers. These officials fail to understand the constant difficulties of managing the effects of a child's disruptive behaviour on a family.
Like my noble friend Lord Howe, I admire the dedication and commitment that the vast majority of social workers bring to their difficult jobs. I agree with the right reverend Prelate the Bishop of Birmingham that the interests of the child must be paramount; that a significant minority of children suffer quite horrific experiences and must be protected.
However, I am concerned that a small minority of social workers are misusing their enormous powers. Families have powerful evidence of cases where child protection procedures are not being implemented in an impartial, objective and even-handed manner. The evidence to prove their innocence when charged with child abuse is not being admitted to child protection conferences. I agree with my noble friends Lord Howe and Lord Lucas that the rights of parents should be strengthened in that regard.
The NAS is particularly concerned about the draft guidance on identifying MSBP. Worryingly, all the symptoms described are also applicable to autism. But the guidance is likely actively to encourage

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people to focus attention on MSBP—as my noble friend Lord Howe said, a very rare condition—before discounting other possibilities such as autism.
Can the Minister tell the House why, given the far higher prevalence of autism, it is so neglected in terms of adequate guidance? Also, does the Minister agree that autism and ADHD awareness training is needed for social workers, area child protection committees and the police?
7.51 p.m.
Lord Brookman: My Lords, as the last speaker before the debate is wound up, it is my duty to be brief, if for no other reason than that I have listened intently to people who have far more experience than I in the field of false memory syndrome. Indeed, I am somewhat humbled having heard the contribution of the noble Lord, Lord Astor of Hever.
First, I declare an interest. Last year I succeeded Lord Wise of King's Lynn as president of the Welsh Trust for the Prevention of Abuse, whose object it is to protect children from paedophiles and the aged and mentally handicapped from sexual and physical abuse. It does good work and is supported strongly by the Churches in Wales and indeed the police.
As noble Lords may be aware, Wales has had some of the most horrendous cases of child abuse that one could imagine. But now, probably as a result of that fact, Wales has a children's commissioner whose principal aim in exercising his functions will be to promote and safeguard the rights and welfare of children. I well recall, as will many other noble Lords, the delicate handling of the Bill through this House by my noble and learned friend Lord Williams of Mostyn, now Leader of the House. All that will help.
I agree very much with the NSPCC. Unlike the noble Lord, Lord Lucas, who has lost faith in that organisation, I have not. I agreed with it when it recognised that false accusations can be extremely damaging to the individual and the families. But it makes the point that from its own research it is vital that children are listened to. The NSPCC goes on to say that all too often children and young people who suffer abuse have no one they can trust or turn to.
So my point is, as is the society's, that false allegations must not leave children suffering in silence. It is still the case that most child abuse and neglect remains hidden because children find it too difficult to speak out. A report published by the NSPCC entitled Child Maltreatment in the United Kingdom, showed that nine out of 10 young people—2,869 18 to 24 year-olds took part in the survey—had a loving family background. But significant minorities suffered serious abuse or neglect.
Therefore, while fully understanding the merit in the noble Earl's eloquent raising of the issue we are debating this evening, and agreeing with views expressed that it is an extremely complex matter and that from time to time serious issues arise (as highlighted by the British False Memory Society) I take the view that nothing should in any way
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interfere with the support of children in what is, as I said before, a very complex area. I look forward to hearing the Minister's response.
7.58 p.m.
Lord Clement-Jones: My Lords, I start by congratulating the noble Earl, Lord Howe, on raising this very difficult issue in the debate today. We heard some thoughtful and heartfelt speeches from all round the House. I am particularly pleased to see the noble Baroness, Lady Pitkeathley, in her place today making such a good speech.
Recognising that false allegations can be and are made and discussing how to avoid those cases is crucial. It is not an "either or" issue. I strongly support campaigns such as the NSPCC's Full Stop campaign, mentioned by the noble Lord, Lord Eden of Winton, which are designed to prevent child abuse and neglect. The incidence of neglect is still unacceptably high, as a recent NSPCC survey shows.
The law of child protection has rightly evolved over the years. The recent Victoria Climbie case however demonstrates that, despite that, horrendous abuse and the death of young defenceless children still takes place. We must therefore always be on the alert to child abuse and we should expect an interventionist approach of those responsible for child protection. We expect a great deal, rightly, of social workers in particular and heavily censure them when they fail. The right reverend Prelate the Bishop of Birmingham made a powerful case for ensuring that we do not weaken our commitment to the protection of children. I share that view.
I agree that there is a paramount need to prevent child abuse and the Bryn Estyn cases which were the subject of Sir Ronald Waterhouse's report stick particularly in my mind. I understand that guilty people will often protest their innocence even after a fair trial. But we must also be on the alert for false accusations and poor process which lead to family break-up and misery.
In that regard, I say to my noble friend Lord Carlile that we are not here talking largely about criminal cases and the result of criminal trials; we are talking about the situation beforehand, as the noble Lord, Lord Northbourne, reminded us. That is the situation where children are put into care and put on the child protection register even before the process of going through the criminal courts.
Many groups feel an acute sense of grievance in relation to false accusations made, many of them parents of children with ME, autism or respiratory problems that were only diagnosed after parents had been accused of abuse, notably through the diagnosis of Munchausen's syndrome by proxy. As regard diagnoses of MSPB for parents of children with ME, Dr Nigel Speight, of University Hospital, North Durham, described it as a "mini epidemic". Paul Shattock of the Autism Research Unit at Sunderland University described the same trend for parents of children with autism as "horrifying". Some have

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likened the use of MSBP allegations to the subject matter of Arthur Miller's Crucible and alleged that this is a new Salem.
The line of cases through Rochdale, Cleveland and the Orkneys must surely convince us all of the dangers. Use by a powerful group of individuals—paediatricians, social workers and the police—of some dubious diagnostic technique or social work theory, whether it is recovered memory, belief in satanic ritual abuse or anal dilatation, can lead to massive injustice and family break-up without any objective justification at all.
I confess that I am disquieted about the use of the diagnosis of MSBP, the way in which allegations of abuse are made and the draconian way in which they are sometimes acted upon. I am doubtful about the level of understanding by doctors and social workers of the condition. Indeed, I am doubtful as to whether it really is a scientifically or medically established condition. I share that view with the noble Earl, Lord Howe. Where is the scientific scrutiny of the condition?
I am doubtful too about what the diagnosis consists of and who should make it. After all, what are the clear and unambiguous symptoms? Is it for a paediatrician to make or a psychiatrist? How qualified are paediatricians to make what often appears to be not a physical diagnosis about a child but a psychiatric diagnosis about a parent? I am doubtful about whether the paediatricians involved have become too hooked on the diagnosis and have, in many cases, acted as judge and jury. The discoverer of the condition, Professor Roy Meadow, admitted that,
"there is a real danger of the term being overused".
As a result, I doubt whether child protection agencies have in all cases established whether a child has a real disorder before making an MSBP diagnosis. Above all, I am worried that MSBP by its very nature can be a self-fulfilling prophesy. Attention-seeking behaviour confirms the diagnosis; so does denial. Much can be made to fit into an MSBP profile. As a result, parents can, as the noble Earl, Lord Howe, said, find themselves in the classic catch-22 situation.
I therefore welcome the fact that, following the North Staffordshire inquiry, a new draft guidance has been produced by the Department of Health on induced or fabricated illness. However, I am disappointed that the review of MSBP as a condition, due from the Royal College of Paediatricians, has not yet emerged. The question is whether the guidance will perform the dual task of protecting children and preventing injustice and false allegations. However, we surely should not finalise the guidance until the college's review is available.
It. must be made clear by the guidance that, where no criminal offence is alleged, a parent would have an adequate opportunity to contest the evidence put forward at case conferences. There must be a proper opportunity for parents to participate in the discussion. Equally importantly, the child in
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question, if of sufficient age, must have his or her views heard and considered. There should be a right to independent advocacy. I am disappointed that the only body that I believe had a role in that respect was disbanded as a result of lack of government funding.
As many noble Lords have said, there must be proper training in investigative techniques for social workers, general practitioners, hospital staff and others involved in case conferences. As was made clear by the Butler-Sloss Report on the Cleveland case, it is important that social workers should not act solely on the basis of medical diagnoses. A full investigation and social assessment should be carried out. If covert surveillance techniques are to be used, strict safeguards must be put in place. As the draft guidance indicates, the minimum requirement is that they should be used only by the police. I believe also that they should be used only where evidence of abuse cannot be obtained by other means. On the basis of those tests, the guidance needs considerable amendment; and in that respect, I share the doubt expressed by the noble Lord, Lord Lucas.
With regard to the practice of trawling by the police, I differ somewhat from my noble friend Lord Carlile. Even among those who are not concerned about the specific issues of false allegations that I have mentioned today, there is considerable concern about the way in which, in certain cases, the police have fished for complaints, especially where there is evidence that complainants have been encouraged by the prospect of compensation to come forward. That amounts to starting with a suspect and then trying to find a crime—the opposite of the usual Police practice—which can create considerable injustice, especially when the events in question happened 15 to 20 years ago.
What assurance can the Minister give about those police practices and about a tightening of investigative procedures in such cases? What guidelines apply, and who ensures that they are followed? What training do the police receive to enable them to investigate those cases? This is not an academic issue; it is highly topical. A massive investigation is currently taking place in Merseyside—Operation Care—with some 547 suspects and 106 establishments under investigation. However, we should not demonise paediatricians or social workers, nor should we persecute patients. Professionals have a very difficult line to tread. I echo the words of the noble Lord, Lord Warner, that training and resourcing for our child protection services is absolutely crucial.
In a recent BMJ article, Dr Richard Wilson, a leading consultant paediatrician, said:
"Munchausen's by proxy has had an honourable life and valuable effects beyond its own confines".
I am not so sure. Having participated in this debate, I am keener to ensure that some of the family tragedies about which we have heard today will never happen again.
8.4 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, under our rules, I have only 18 minutes left to respond to what has been a very wide-ranging debate. I echo the sentiment of the noble Viscount, Lord Bridgeman, that it has been a very balanced and objective debate.
We owe a great debt of gratitude to the noble Earl, Lord Howe. I can tell him that neither I nor the Government underestimate the impact of false accusations of child abuse on individuals, parents and the children concerned. However, as the noble Lord, Lord Clement-Jones, suggested, that has to be balanced against our fundamental duty, both as a responsible Government and as responsible individuals, to safeguard vulnerable children from abuse and neglect.
As my noble friend Lord Brookman said, child abuse is a very real problem for many children in this country today. The latest research, in 1993, by the Home Office shows that at that time over 100,000 adults in the UK had convictions for sex offences against children. The right reverend Prelate the Bishop of Birmingham referred to the scale and depth of the abuse and of the damage that can be done to many young people in our society.
We recall the recent dreadful cases of Victoria Climbie and Lauren Wright. Surely, they provide a chilling warning of what can happen when child protection concerns are not picked up or acted upon. As the noble Viscount, Lord Bridgeman, pointed out, when vital information is not shared between the relevant agencies with child protection responsibilities, or when there is an enormous variation in the performance of those authorities, tragedies can occur. Because of those failures, the Government have taken a series of measures to improve the performance of local authorities. I hope that I shall yet have time to deal with those.
However, in rightfully criticising poor performance, we must not overlook the tremendous work undertaken by many social workers and others directly involved in protecting children. We cannot ignore the difficult job that they do daily, nor the scale of the decisions that they are required to make. My noble friend Lord Warner placed this country's overall performance on child protection in a proper international context. My noble friend Lady Pitkeathley said that social workers are damned if they do and damned if they do not. I have some sympathy with that view. It reflects the very difficult balance that they have to maintain at all times.
I listened with great interest to the noble Earl, Lord Howe, and the noble Lord, Lord Astor. I shall be happy to discuss with the noble Lord, Lord Astor, the specific issue of autism, which he has again raised in your Lordships' House. I am sure that all parents would be concerned if children were being taken away from their families on the basis of false accusations, founded on misguided and scientifically unproved theories.
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I turn to the issue of false memory or recovered memory, raised by the noble Earl, Lord Howe. I cannot emphasise strongly enough the importance for patients and their families of a full, unbiased, accurate assessment in all cases in which abuse may feature or is alleged. I am well aware of the risks that therapists may unwittingly, or wittingly, lead their patients to the wrong conclusion or fail to establish the full facts. That is a grave allegation. However, it is also important that in this debate about false memory we should not obstruct an objective consideration of all relevant issues.
I certainly agree with the noble Earl, Lord Howe, that issues concerning psychotherapists and their professional regulation cannot be ignored. The noble Earl will know that we have started an open-ended consultation with stakeholders, including independent psychotherapy and counselling practitioners. If the noble Lord, Lord Alderdice, were here today, I have no doubt that he would be able to speak about the discussions he has had with the many schools of psychotherapy in this country with a view to trying to introduce some form of regulation of them. The Government strongly support the work being done by the noble Lord, Lord Alderdice, in that area.
With regard to Munchausen's syndrome by proxy, I understand that it was first described by Professor Roy Meadow in 1977. I also understand that there is a widespread dispute about whether the syndrome exists. I know that cases have been identified involving suffocation, poisoning, often with prescribed drugs, active interference with medical treatment, fabrication of illness, and active withholding of food. It is very difficult for us to enter into the whys and wherefores of Munchausen's syndrome by proxy. It has been a long-running and at times very technical debate.
We are concerned to protect children from harm. That is why we have issued for consultation guidance on children in whom illness is induced or fabricated by carers with parenting responsibilities. I listened with great interest to the comments made about that consultation and I can assure noble Lords that they will be fed into the consultation process.
The noble Countess, Lady Mar, again raised her concerns about CFS/ME. She will know that the Chief Medical Officer has put together a group which is examining the whole issue of CFS/ME and there is a sub-group examining particular issues in relation to children. The group has been aware of some of the issues surrounding child protection and it is hoped that when the whole group comes to a conclusion the guidance which will then be issued will include that in relation to clinical management. That will be most helpful to social workers in their understanding of some of the issues involved.
The noble Countess raised with me a number of specific cases. My honourable friend Ms Jacqui Smith has invited the noble Countess to provide more details and has assured her that we will examine those cases within the limit of the terms of the Children Act 1989.
The noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, raised police trawling methods. The police have a duty thoroughly to investigate all

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allegations of child abuse and to undertake a complete investigation. The aim is to obtain evidence either to support or to disprove the original allegation and not to produce fresh evidence. I can assure the House that the police are aware of the need to ensure that their investigation procedures in these cases incorporate the necessary safeguard against false allegations while fulfilling their duty to ensure that those who have committed serious crimes against young people in care do not escape justice.
Surely the problem is that sex offenders generally do not commit their offences in public view and therefore there are usually no known witnesses to the allegations. It is here that the police must try to track down any witnesses. However, I agree with the noble Lord, Lord Lucas, that that responsibility must be exercised with care. In relation to guidance, I say to the noble Lord, Lord Clement-Jones, that the Association of Chief Police Offices is currently drawing up a manual for senior investigation officers working in child abuse cases which will include a section on good practice in tracing potential witnesses and in obtaining corroborative evidence. I hope that that will provide the detailed operational guidance which is necessary and will also lead to greater consistency throughout police forces, but I will pass on to ACPO the comments made in tonight's debate in order to ensure that it is able to take account of them.
My noble friend Lord Mitchell would not expect me to comment on the specific case he raised and indeed I cannot do so. However, as regards sudden infant death syndrome, in recent years there has been a considerable reduction in the number of cot deaths. It is believed that that is due to a change in parental behaviour, particularly in relation to the sleeping position of babies and since the Back to Sleep campaign began there has been a 70 per cent reduction in sudden unexpected infant deaths. However, we must be alert to the fact that infanticide occurs and that death by homicide is commonest in the first year of life.
As regards the point raised by the noble Baroness, Lady Fookes, the theory of toxic gas in babies' mattresses has been considered by an independent expert group and its report was published in May 1998. That was a thorough investigation but it concluded that the hypothesis was unsubstantiated and that there was no evidence to suggest that the compounds used as fire retardant in PVC or other cot mattress materials were a cause of sudden death syndrome.
I say to the noble Lord, Lord Lucas, that I understand the pain of families falsely accused of child abuse; the parents and the children concerned. The noble Lord, Lord Northbourne, rightly reminded us of that. It is the aim of social service authorities to enable families to stay together wherever possible. Many inquiries following referrals to social services result in families being classified as those whose children are in need of support and who need assistance to promote the well-being of the child and to aid families to cope. I suggest that that is the reason for the gap between the number of children referred and the number of
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children taken into care at the end of the process. In a sense, that is the preventive part of the work of social workers. My noble friend Lord Warner provided some reassurance in that area.
As regards child protection conferences, parents should normally be invited to attend and helped to participate fully. If the parents are excluded, or are unable or unwilling to attend a child protection conference, they should be enabled to communicate their views to the conference by another means. The focus of the conferences is on the welfare of the child and it is not an adversarial process. I repeat that in working together we say that parents should normally be invited to attend the conference; they should be helped fully to participate; and social services should give parents information about local advice and advocacy agencies and explain that they may bring an advocate friend or supporter to the case conference. Parents have a right to be heard.
In relation specifically to the medical issues raised tonight, where parents disagree with a medical diagnosis made in their child's case, they have the right to seek a second opinion. If that opinion is given, they have the right for it to be taken into account by statutory agencies when assessing their child's case. In addition, proper complaints procedures are an essential safeguard for people receiving social service services. We require local authorities to publicise their social service complaint procedures to ensure that service users, carers and their representatives are properly informed about them and how to use them.
The noble Lord, Lord Eden of Winton, suggested that sometimes social workers jump in too quickly. My belief is that social services do not instigate child protection inquiries lightly or on a whim, but under the Children Act 1989 they have a statutory duty to make inquiries where they have reasonable cause to believe that a child is suffering or is likely to suffer significant harm. But I also say to the noble Lord that no one can be complacent about how those child protection procedures are operated in practice—certainly not me—and I have taken careful note of the concerns that have been raised. I also noted the comments of the noble Lord, Lord Cathie, about the appropriateness of the use of the criminal justice system.
There is no doubt that we need to do more work to drive up standards in the area of child protection. First, we have established an inter-agency working group which is reviewing procedures for investigating the abuse of children in care or looked-after children in the context of taking forward the Government's response to the Waterhouse report, Lost in Care. That review will lead to the development of practical procedural guidance to the police and social services on the handling of complex abuse investigations.
I also accept the point, as have many noble Lords, in particular the noble Lord, Lord Northbourne, and my noble friend Lady Pitkeathley, that if we are to ensure that we have the highest quality service in child protection, we clearly have to do much to raise the morale, professionalism and training of our social workers. I believe that the General Social Care

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Council will have a profound impact in doing so and I am delighted my noble friend is continuing as its acting chair. The National Care Standards Commission will be responsible for ensuring consistency in the quality of service provided, particularly in relation to children's homes, foster care and childcare, alongside the introduction of the Social Care Institute for Excellence.
The noble Lord, Lord Lucas, challenged the Government to take an evidence-based approach in social services and child protection procedures as it has done in the NHS. We shall very shortly establish the Social Care Institute for Excellence which will have the very purpose of publishing robust evidence in relation to the performance of social care provision. I am sure that that will prove extremely helpful.
I agree with the right reverend Prelate the Bishop of Birmingham that we need to build up the professionalism and confidence of social workers and do much more in the area of recruitment and retention. This week a recruitment and retention campaign will be launched at the social services conference. It is clear to me that in the past workforce planning and strategic decisions and policies about the social service workforce have been considerably lacking. We must put it right. We must attract more high quality people to the profession and do everything we can to ensure that those who work in it receive the support they require. As my noble friend Lord Warner suggested, I am sure that the extension of the current social work qualification from September 2003 from a two-year certificate to a three-year degree level course will be enormously helpful.
The right reverend Prelate the Bishop of Birmingham raised the question of funding, which is very important. This year and next social service departments should receive a 3.5 per cent growth in funding, and clearly we need to build upon it. As to the performance of social service authorities overall, I agree with my noble friend Lord Warner that we are not talking simply about the individual performance of social workers but the role of managers and counsellors. I believe that the new approach of the social service inspectorate, our intervention powers, best value and the ability of councils to take special measures are a symbol of our efforts to improve overall performance.
In conclusion, it is not easy to inquire into allegations of abuse, some of which inevitably will be mistaken, misplaced or even false, but we must never encourage a culture of non-interference, turning a blind eye or passing on the other side. Our effort must be to obtain a child protection service where the procedures are operated with fairness, rigour and, above all, the interests of children at heart. I have no doubt that our determination to do that will be informed by the debate tonight.
Earl Howe: My Lords, in thanking all noble Lords who have spoken in this debate, I now beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Gulf War Veterans
8.24 p.m.
Lord Morris of Manchester Lord Morris of Manchester rose to ask Her Majesty's Government what new consideration they are giving to the problems and needs of Gulf War veterans with still undiagnosed illnesses and the dependants of those who have died.
The noble Lord said: My Lords, speaking as a veteran of parliamentary debates on Gulf War illnesses over many years—indeed almost for a decade now—both here and in another place, I welcome my noble friend Lord Bach to this evening's debate and look forward to his, as it were, "maiden" speech on what I know he appreciates is a subject of high importance to the ex-service community. At the same time I record my appreciation to his ministerial predecessors, my noble friends Lord Gilbert and Lady Symons, for their unfailing courtesy in replying for the Government to the four previous debates I have opened on the problems and needs of Gulf veterans.
None of us here, least of all my noble friend, wants to see the afflicted and bereaved of the Gulf conflict made to suffer the added strain and hurtful and demeaning indignities that preventable delay in dealing with their concerns can impose. There was no delay in their response to the call of duty. Nor should there have been any delay in discharging our debt of honour to act justly to them. That was, and is now, much the best way—better by far than words of praise—of showing our regard and admiration for those who served this country with such gallantry in the Gulf War 10 years ago.
Yet sadly, as I found when spending an evening with many of them recently after performing the opening ceremony of the National Gulf War Veterans and Families Association's new premises in Kingston-upon-Hull, there is widespread feeling among veterans and bereaved families alike that they are not being justly treated. Indeed, some talk of being,
"discarded now by officialdom as 'yesterday's people"'.
It was through my right honourable friend John Prescott, the Deputy Prime Minister and Member of Parliament for Kingston-upon-Hull East, that the association invited me to perform the opening ceremony. He is highly regarded by them, and I take this opportunity warmly to thank him, on their behalf, for his abiding readiness to listen and practical concern to help when and where he can.
The association's officers and members recalled during my evening with them two veterans, both now deceased, whose cases I referred to in opening the debate on Gulf War illnesses on 15th January 2001. I had raised first the case of Major Ian Hill whom I had known for many years. He was in touch with me shortly before the debate to say that his health had again deteriorated and that his medical condition was now described by his doctor as one of "total burnout". His wife Carol, on whose devoted care he relied crucially both day and night, was also severely disabled with a "crumbling spine". In the final weeks

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of Ian's life they were left trying to cope in inappropriate housing, and my last news of him before his death was that he had then become registered blind.
The other case I raised in my speech on 15th January was that of Hilary Jones, ex-Queen Alexandra Royal Army Nursing Corps. I described hers as distressing as any case of which I was aware. Terminally ill and living alone, she was deeply hurt by delays in dealing with her war pension appeal; and as in Ian Hill's case, her entitlement to a 100 per cent war pension was accepted only after she had died. Both Hilary and Ian went to their graves with a deep sense of injustice having succumbed to illnesses which were never fully diagnosed. They are widely mourned among Gulf veterans.
It was cases like these which led The Royal British Legion to describe its own experience of dealing with Gulf War pension appeals as "nothing short of shocking". Anyone contesting that assessment should read a ministerial reply of 22nd September to representations that I had made for Shaun Rusling of the Gulf Veterans and Families Association. The reply states that the MoD's Gulf War database,
"… confirms that at the end of July 2001, 253 appeals made by veterans had been heard by the independent Pensions Appeal Tribunal. Of these, 125 were successful".
Therefore, almost 50 per cent of appellants were found, by independent assessors, to have been receiving less than their war pension entitlement. And in further endorsement of The Royal British Legion's description of the treatment of appellants as "nothing short of shocking" I repeat that, in the cases of Ian Hill and Hilary Jones, notwithstanding their terminal illnesses, full war pension entitlement was denied until after they had died.
No one underestimates the scale of the hideous inhumanity of the terrorist attacks on New York and Washington on 11th September; and the Prime Minister was eminently right, in his Statement in another place on 14th September, in seeking to put them into perspective. But many Gulf veterans were disturbed by the impression they felt could have been given that the conflict in which they were involved was of scant significance. First, they quote in particular the comment that,
"In the Falklands War, 255 British servicemen perished, and during the Gulf War we lost 47".
Reacting to this, Gulf veterans say that it was over 10 years out of date. They point out that the cost in British lives was very much higher than 47 and that it is still increasing month by month. Since the conflict, says the MoD, 496 more of our troops have died, of whom 88 took their own lives. Thousands more, all of them A1 when hostilities began in 1991, are in broken health and—again recalling the cases of Ian Hill and Hilary Jones—many of them are terminally ill. Gulf veterans also state that deaths among innocent civilians in Kuwait caused by the conflict were high and continue to rise.
And the second extract that veterans quote from the Statement on 14th September is the comment that:
"The limits on the numbers that they [terrorist groups] kill … are only practical and technical. We know that they would, if they could, go further and use chemical, biological or even nuclear weapons of mass destruction".—[Official Report, Commons, 14/9/01; col. 606.]
The reaction of veterans to this is to say that any understanding of the significance of the Gulf conflict has to start from the fact that it was on a scale bigger than any that British troops had been involved in since the Korean War. It was also the first in which chemical or biological weapons were deployed against our troops since 1918. Moreover the MoD and the Pentagon were convinced they would be used. So too were our troops deployed to the Gulf. They like millions more across the world had seen in TV reporting, only months before the conflict began, the stark effects of Saddam Hussein's use of these weapons against tens of thousands of Iranian civilians. And US and British commanders not only expected their use in the Gulf War, but calculated the likely death toll. Thus the Pentagon sent 150,000 body bags to the Gulf.
So when the conflict started our troops were not acting on the assumption that their adversaries "would, if they could" use such means of mass destruction as biological and chemical weapons. They knew these weapons were already deployed against them by a fanatical enemy who had only recently used them utterly without scruple or mercy in attacks on the civilian population of a neighbouring Muslim country. And Gulf veterans, now in broken health, many with severely debilitating but still undiagnosed illnesses, trace some of the worst of their problems to the MoD's preparations for their role in facing the reality of living within range of Iraqi weapons known to be carrying chemical, biological and nuclear warheads.
The MoD correctly assessed the threat but not all the health risks of its measures. Of the 17.3 per cent of veterans Professor Simon Wessely's report in the January/February edition of the BMJ described as believing they are suffering from "Gulf War Syndrome", more and more attribute their illnesses to the protective measures taken to counter anticipated health risks. The measures taken comprised a multiple immunisation programme of unprecedented range and intensity—a veritable blitzkrieg on the immune system—that included protection against anthrax, then known to be stockpiled in Iraq; the first-ever issue of pyridostigmine bromide (NAPS) tablets as an antidote to biological agents; and the deployment of toxic sensors and pesticides, including organophosphates, to prevent fly-borne diseases.
Now that British forces face another enemy with and prepared to use chemical and biological weapons, I invite my noble friend to detail the action so far taken to rectify shortcomings in the measures taken to protect our troops in the Gulf. I invite my noble friend also to comment on the anguish and at times anger felt by the afflicted and bereaved that the public inquiry, for which The Royal British Legion has been pressing the Prime Minister for over two years now, has still to be agreed. The failure to institute an inquiry is deeply

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unfortunate. For ultimately there will have to be one, not only in fairness to Gulf veterans with undiagnosed illnesses but to avoid repetition of the mistakes made in preparing for that conflict in future deployments.
Meanwhile, I have been asked to establish this evening the total legal costs so far incurred by the MoD in responding to compensation cases raised by Gulf veterans; and also whether, and at what cost to them, veterans bringing such cases have been or will be asked to contribute to costs.
My noble friend will be aware of the certainty with which veterans with undiagnosed illnesses say that their suffering was caused by measures taken to protect them. They know they were taken with the best of intentions; but that does not lessen their suffering from problems still to be fully addressed. Nor are they concerned only about their own plight. Their backing for an urgent and wide-ranging public inquiry was founded also on a desire to ensure that our Armed Forces would be thoroughly prepared and better protected in future deployments.
Sadly, one shortcoming that could now be repeated is the failure to safeguard our troops from the ill effects of a multiple immunisation programme. In fact we were told by the then Minister, in the debate on 15th January, that the final results of work on "possible adverse health effects" of the inoculations given in the Gulf conflict were not available. Speaking earlier in that debate, the noble and gallant Lord, Lord Bramall, said that,
"one glaring question stands out above all others. Was the cocktail of inoculations … liable to cause, in some individuals, a harmful chemical or physiological reaction that would lead to loss of future immunity?".—[Official Report, 15/1/2001; col. 1014.]
He went on to say that he was "staggered" to have been told some months earlier, by the then Minister, that a planned medical study of the effects of dispensing all the inoculations at the same time—"including the medical histories of those who had subsequently so tragically suffered"—had not yet been undertaken.
The noble and gallant Lord, Lord Bramall, strongly insisted that this should have been done at the outset because it was by far the most likely common factor in causing subsequent indisposition or worse; and on 15th January he asked the then Minister for the results of the study. He said:
"It must by now have been carried out—if it has not been, that can only mean that the Ministry of Defence is not serious enough about getting at the truth".—[Official Report, 15/1/01; col. 1014.]
To which the Minister replied:
"He will be disappointed when I tell him that the final results are not expected until 2003.—[Official Report, 15/1/01; col. 1021.]
So the only honest answer to anyone who in 1990—about to be given 14 inoculations within a fortnight—had asked about their likely health effects would have been:
"We will not be able to tell you for another 13 years".
The Minister was, of course, correct in saying her reply would disappoint the noble and gallant Lord, Lord Bramall. It visibly did so: for to him, as he had already told the House, it meant that,
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"the MoD is not serious enough about getting at the truth".
I know that my noble friend will want to respond to the justified concern here and in another place about the worrying implications of this for our troops now deploying. Perhaps my noble friend would comment also on what further help is being considered for those who, in the words of his predecessor to the noble Lord, Lord Bramall, "so tragically suffered" after multiple immunisation in the Gulf conflict. In particular, my noble friend might reflect on the possible relevance of the vaccine damage payments legislation in compensating them.
Another question raised with me is whether it is intended again to issue NAPS tablets as an antidote to biological weapons; and, if so, what instructions are now being issued on their use? And can my noble friend confirm that there are sufficient stocks of pesticides, other than organophosphates, available to protect troops deployed to and desert regions in what could be a protracted conflict?
A further question of concern to veterans is what action has been taken to improve medical record-keeping? Records were often incomplete after the Gulf conflict, making it difficult to confirm the nature of treatment given and to diagnose veterans' medical problems. Other concerns are: first, whether, if reservists are now to be called upon, the same benefits as for regulars will be payable in the case of injury or death; secondly, with the closure of all military hospitals except Haslar, whether enough beds and medical specialists will be available to treat the number of casualties we could be confronted with; and, thirdly, since current hostilities are likely to prove traumatic for the troops most involved, what arrangements have been made for aftercare and counselling for those who deploy and for families left behind.
All of us know that Gulf War illnesses are rarely discussed now without mention of the very heavy use of depleted uranium (DU) during the conflict; and many noble Lords will be aware of Granada TV's recently networked film "Back to the Front" which included extracts from a US Army training video made before the Gulf War by Dr Douglas Rokke, a highly regarded expert on the health effects of exposure to DU.
Dr Rokke was later sent to the Gulf to investigate contamination there from the use of DU and to "devise a way of cleaning it up". He is seen in the film saying:
"We found that nobody there knew what was contaminated, how to manage contamination or how to provide medical care to casualties. It was a mess".
He went on:
"The British Government knew because they approved the video and training materials developed. I had a British officer assigned to work with me".
It will be helpful now to have my noble friend's response to these disclosures and, more particularly, to the contrast between Dr Rokke's comments and ministerial assurances here and in another place that there was and is no danger in the use of DU. I invite him also to respond to the valuable recent report from the British Geological Survey (BGS).
That report, like Dr Rokke in his training video, looks beyond heavy metal poisoning in stating that:
"Unlike materials such as cadmium, exposure to uranium may also result in health effects due to the presence of its inherent radioactivity".
In discussing DU used in military conflicts, the report goes on to say that those likely to be exposed include rescue workers and field staff associated with the clean-up and decommissioning of vehicles and sites attacked by DU weapons. The BGS report, no less than Dr Rokke's video and subsequent comments, calls seriously into question what Gulf veterans have been told. I know my noble friend will want to respond to me about this as fully as he can when he speaks.
I ask him also now to explain why the MoD's own report on the use of DU made no attempt to estimate the interactive effects of combining exposure to DU with multiple immunisation. He will know that this question, posed by doctors of high distinction and raised in the House soon after the MoD's report was published, is now of urgently renewed importance. Yet it has still not been answered.
Gulf veterans with still undiagnosed illnesses and bereaved families strongly resent being told to accept that mistakes made were not deliberate. They know as well as anyone in Whitehall that decisions about protective measures often have to be made on a "needs must" basis; but they will never accept that the victims of mistaken decisions alone should be left to cope with their consequences. They rightly insist that the nation, not the individual, should meet the cost of such decisions. That quintessentially is the case for a most urgent review of the MoD's current stance on further help for those who, and I quote the words again,
"so tragically suffered from mistaken decisions".
The way a nation treats those who are prepared to lay down their lives in its service, and the dependants of those who do so, is ultimately more revealing of its moral worth than all the oratory of its leaders. By that defining test, the men and women that this debate is about deserve well of this House.
8.40 p.m.
Lord Burnham: My Lords, the noble Lord, Lord Morris of Manchester, has a long-standing and well deserved reputation for his concern for all those who suffer or have disabilities of any kind. He has been a prominent and very hard-working member of The Royal British Legion's committee set up to study the effects of illness arising out of service in the Gulf during Operation Granby. This is now a problem which has been of great concern for more than 10 years and it is appropriate that your Lordships should again have the opportunity to debate the matter. The noble Lord is much to be congratulated on raising it. His closing words sum up the difficulties that we are facing. At the same time, I should like to pay tribute to Colonel Terry English of The Royal British Legion for his work for Gulf veterans.
The noble Lord, Lord Morris, has not left undone those things which he ought to have done, but the current scare word is "anthrax". It would seem that the
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realities of the problem are far exceeded by the media coverage that it is receiving, but anthrax has been a matter which has concerned the Ministry of Defence for some time. I hope that the Minister will be able to bring the House up to date.
In November 1998 the anthrax immunisation programme of voluntary immunisation for service personnel and MoD civilians was suspended when the licence for the current stocks of vaccine ran out. It seems that the sole supplier, the Centre for Applied Microbiology and Research, suffered production problems, but did not inform the Ministry of Defence until October, a month after full delivery should have been completed.
The then Minister, the noble Lord, Lord Gilbert, assured those concerned with defence matters in both Houses that there was no long-term problem. However, the first new supplies of anthrax vaccine were not received until January of this year, 27 months after the problem was first discovered. But supplies are now available and all members of the UK Armed Forces will have access to the highest level of protection possible against this potential biological warfare agent.
So far, so good. Members of the Armed Forces will be able to get protection if they so wish. It is likely that the dangers of anthrax infection, in spite of what we have seen in the evening papers today, have been wildly overstated. But perhaps I may take the opportunity to ask the Minister what is the current situation regarding major supplies of anti-anthrax vaccine appropriate for large numbers of the population, should it be so needed.
When The Royal British Legion delegation visited the United States a year ago, it received a statement from Congressman Metcalf on squalene in anthrax vaccine. I say this not for the first time: I do not know what I am talking about—perhaps the Minister can discover for me in due course—but it is suggested that this may be sufficient to call for an end to the anthrax vaccination programme. Is there any justification for the concern about squalene and does it indicate the possible need for a change in policy?
This is merely one aspect of the problems arising from the exposure of members of the Armed Forces to various illness inducing agents. Both in this country and in the United States, great efforts have been made to establish whether a common agent has caused these problems or indeed whether those who have suffered do so because of their service in the Gulf or exposure to anti measures which have gone wrong. Rightly, tests have been made on peer bodies or control groups of those who did not serve in the Gulf to find out what is their incidence of disease or premature death.
As the noble Lord, Lord Morris, pointed out, in both countries record keeping and retrieval have been less than satisfactory. But that is past and gone and those who are working on the problem today have to do their best with what they have. During Operation Granby there was no evidence of any chemical alarms, all of which are regarded as having been false. For instance, both in the United States and over here, the

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Sabbahiyah Girls' School incident is regarded as being due to nitric acid and not a mustard gas agent. To this day it is being denied, as the noble Lord suggests, that chemical or biological weapons were employed anywhere in the Gulf. Therefore without doubt we have a problem in that some other explanation of the illnesses is required. I am not certain that we have one.
In the United States, the problem is being taken most seriously. Last year The Royal British Legion again visited America and the noble Lord, Lord Morris, accompanied the party. The Department of Defense, the Department of Veterans' Affairs, the American Legion and the Walter Reed Hospital have all clearly worked hard to establish the causes of the problem or problems, and what can be done to alleviate them. Much water has passed under the bridge and it is time that we received from the Government a further interim report.
Throughout work on Gulf problems runs the strain of depleted uranium, as the noble Lord has said. It is a matter which is not restricted to the Gulf, but certainly obtained in Bosnia as well. Rather like anthrax, the scare seems to have been exaggerated. There is little doubt that depleted uranium in itself is neither toxic nor dangerous. However, there may well be danger when the depleted uranium takes the form of a metallic dust following an explosion. I hope that in his reply the Minister will be able to bring the House up to date on current thinking.
It is very good news that in this country we now have a sub-department of the Ministry of Defence, under Dr Moonie, which concentrates on veterans' affairs. That will enable all the bodies working on the problems—it has to be said that they have not always been in unison—to have one department to which they can address their concerns.
Having established the sub-department, it will be easier and more convenient to establish a veterans' register. I hope that this is being done, or has been done. The lack of documentation on Gulf problems arises at least in part from the lack of such a register, although of course that is only a small part of the difficulties regarding the documentation of Gulf problems. With the possibility of operations in an ecologically dangerous area in the near future, it is to be hoped that the Ministry of Defence has learnt the lessons of the Gulf War and will get it right next time. I hope that there will not be a next time, but I fear that there may be.
8.49 p.m.
Baroness Park of Monmouth: My Lords, I speak in the gap because I was afraid that I would not be able to get here in time for the debate. I apologise to the House.
At a time when we are once more preparing to send our troops into battle, it seems intolerable that we have still done nothing for this small group of people who came back sick from the Gulf 10 years ago. The War Pensions Agency acknowledged in 1998 that illness occurred in relation to Gulf service, which is a fairly plain statement.
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The damage to these lives has arisen not from enemy action but because of our long drawn out refusal to recognise that the men whom we cheerfully dispatched hale and hearty to war returned sick men. We are still ignoring both the American findings and the 1997 medical report of the MoD itself.
I am very glad that there is a Veterans Affairs Office, but it has been in position for some time now and I should like to know what it is doing about pensions. It would be difficult to think of a more striking example of perverse behaviour in the way of morale raising than what is going on still for these veterans.
At long last we have provided some justice for the prisoners of the Japanese. We are looking at a very small group, but what the Government do or do not do for them sends a most significant message to soldiers about to go into battle. They should be able to count on just and equitable treatment—and treatment early rather than late—and not the prospect of being fobbed off once they have served their term. That is what it feels like to them.
What guarantee is there that we are better prepared this time for the troops to encounter a chemical threat? What lessons have the Government learnt? I hope they have learnt some, because it seems to me that a small group of people have suffered unduly and are still suffering.
8.51 p.m.
Lord Clement-Jones: My Lords, we last debated this subject, as the noble Lord, Lord Morris, pointed out, in January of this year on the 10th anniversary of the Gulf War. I believe that this is my fourth debate on the subject in the past few years. Despite the temptation, noble Lords will be pleased to hear that I shall not repeat what I said on those occasions, but I hope that the Government will take it as read that we on these Benches very strongly support the noble Lord, Lord Morris, in his long campaign for justice for Gulf veterans.
In our previous debate we talked at length about the issue of depleted uranium and whether the MoD was being wholly frank about depleted uranium and its effects. In that context, I was quite surprised, to put it mildly, to see correspondence in May this year from Dr Moonie to Llew Smith, MP, which appeared to constitute a reply to a question which Mr Smith had asked all of 18 months earlier on the subject of testing veterans for depleted uranium. Although the information contained in the answer on retrospective exposure assessment was helpful, it does show just how slow progress can be on the issue of compensation and justice for Gulf veterans.
In the 10 months since the previous debate a series of papers have been published and there have been a number of other developments. Even so, the Government have essentially not changed their line on compensation for Gulf War veterans or taken to mediation the claims of those taking legal redress.
There are some 1,866 legal claims from Gulf veterans currently in the pipeline. In May, in a Written Question, I asked whether the MoD had plans to

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follow the Lord Chancellor's guidance on mediation published on 23rd March. In announcing the new initiative by the Government—and I believe that the Minister was then with the Lord Chancellor's Department and he may recollect what he said at the time—the Lord Chancellor said:
"This Government want to lead the way in demonstrating that legal disputes do not have to end up in court. Very often there will be alternative ways of settling the issues at stake which are simpler, cheaper, quicker and less stressful to all concerned".
The noble Baroness, Lady Symons, who at that time was the Minister responsible in the House of Lords, replied by letter. She said, fairly bluntly, that,
"The Ministry of Defence does not consider mediation on compensation for Gulf Veterans an appropriate way forward at the present time".
She went on to say, however, that the Government would be,
"tireless in its efforts to understand the reasons why some Gulf veterans are now ill".
I wonder whether the Minister, having now served in both the Lord Chancellor's Department and the Ministry of Defence, has any different reply on that subject.
To many of us, the strategy of the Ministry of Defence is to play for time. The essence seems to be to commission endless research papers while having no intention of actually compensating the veterans. Some of the research carried out has, of course, been valuable, particularly that of Professor Nicola Cherry of Manchester University, and I should like to look at this more closely presently.
I am, however, rather baffled why we needed to have the latest piece of research from the Gulf Veterans Medical Assessment Programme, which published a paper in the BMJ this September. This concluded that,
"substantial numbers—17.3%—of British Gulf War Veterans believe they have Gulf War Syndrome which is associated with psychological distress, a high number of symptoms, and some reduction in activity levels".
I am not quite sure why we have had to wait 10 years for that astounding conclusion. Equally bizarre is the research from Professor Lee and others published in the Journal of the Royal Army Medical Corps in June this year which concluded that 80 per cent of the second cohort of 1,000 veterans were "well".
Of greater value have been the conclusions of Professor Cherry's studies published in Occupational and Environmental Medicine in May. These are: that while not accepting that there is such a condition as Gulf War syndrome, nevertheless Gulf veterans report more illness than non-Gulf veterans; that the severity of the symptoms is greater in Gulf than in non-Gulf veterans; and that three factors are consistently related to severity—the number of inoculations, days spent handling pesticides and days exposed to smoke from oil fires—and that the former two warranted further investigation.
Following publication of this research, in answer to another Written Question the noble Baroness informed me that a team—I assume this is concerned with the Gulf Veterans Assessment Programme—has completed work on blood samples taken from Gulf
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veterans to test the hypothesis that multiple vaccinations may have triggered physiological changes. It seems incredible that we still do not have this data after 10 years. Can the Minister say when publication of these findings is expected?
When will the MAFF research into the effects of exposure to OP pesticides be completed? Likewise, the Porton Down research into the adverse effects of the combination of vaccines and NAPS tablets given to the troops in the Gulf, both of which were mentioned by the noble Baroness in her reply to me? What other research to test the link between these two exposures and Gulf illness is being carried out?
While the research has been carried out the MoD has been stalling on compensation for Gulf veterans. However, it has emerged in the meantime that it has been paying out record sums—some £100 million—to a variety of deserving and not so deserving individuals: £387,000 for negligent treatment of warts; £541,000 for injury from slipping on oil; £377,000 for failure to prevent frostbite. If these claims can be satisfied, why not those of the Gulf veterans?
There are two further important issues; first, squalene. I have seen the letter of reassurance from the Minister, Dr Moonie, in the press, categorically denying that this was added to vaccines administered to Gulf veterans. Can the Minister repeat this assurance? If he can, what investigations were made to allow him to do so? How can the Ministry explain the positive tests for squalene carried out by the Tulane Medical School in Louisiana?
The second issue is abnormalities which may be experienced by veterans' children. Evidence from the States, in a major study of 30,000 parents, seems to be suggesting that both male and female veterans conceive children with birth defects at a much higher rate than normal. Are the Government monitoring this? Are they carrying out their own research?
It is hardly surprising that both among Gulf veterans and supporters there is a large degree of impatience. The wheels of the MoD have ground exceeding slow. In correspondence it says that it is willing to engage in dialogue where there is no discussion of liability, but that is central to the veterans' case. It is almost as if the MoD is insisting that there must be a single "syndrome" before liability can be accepted. If that is the case, then the Minister should make it clear.
The only conclusion I can draw is that the Government's piecemeal approach to this whole subject is quite unacceptable. Should not there now be a full public inquiry as we had into BSE and CJD, for which the Royal British Legion has been pressing? I hope that the Minister can bring a fresh government response tonight. We badly need to draw a line under the whole episode, all the more so in view of the new involvement in prospect for our troops. What kind of precedent can the way that our Gulf War veterans are treated be for the health of our current troops? I hope that we can give our current troops every confidence that they will be dealt with properly in future and that means treating our Gulf veterans in a proper fashion.
9 p.m.
Lord Vivian: My Lords, I am grateful to the noble Lord, Lord Morris, for introducing a debate on this subject. Perhaps I may say from the outset that we owe a huge debt of gratitude to the British servicemen who fought in the Gulf in Operation Granby.
Almost 3,000 members of the 53,462 forces of the United Kingdom who served in the Gulf conflict have been seen by doctors looking into Gulf war syndrome. No cause for the wide range of symptoms has ever been found, but in the past illnesses have been blamed on biological weapons, smoke from burning oil wells, exposure to depleted uranium or vaccinations. There is no doubt that many hundreds of them have contracted illnesses since then. The Conservative government put in place a series of scientific inquiries into the causes of the illnesses, and the present Government have added more. Those scientific studies must run their course before we can be in a position to make conclusive judgments. But no stone should be left unturned in the search for the truth about Gulf War syndrome. Meanwhile, we must keep open minds and ensure that veterans receive not only our sympathy but also our strong support in obtaining the very best health care from the National Health Service and other care agencies.
At the beginning of 2001, the MoD released details of 477 Gulf veterans who have since died. It said that 69 had developed cancer, 60 had suffered from diseases of the circulatory system and about 85 had committed suicide or died of injuries "undetermined whether accidental". In almost all the categories there were more deaths among a control group of personnel not sent to the Gulf. However, the figures may now have changed. I ask the Minister if he will update us on the current figures. The MoD said that the figures for the cancer deaths were,
"markedly less than one would expect amongst a similarly sized group of the same age and sex from the civilian population".
However, an MoD-funded study into the health of Gulf veterans, published in April 2001, indicated that Gulf War veterans were twice as likely to complain of ill health as other men and women in the services. Although there had been no excess deaths or hospital admissions, the study revealed that they had suffered from a "significant decline in health". I believe that the MoD denied that the figures indicated that veterans suffered ill health problems, but rather that they indicated that when Gulf veterans complained of symptoms they tended to be more severe.
The Ministry of Defence has been criticised for failing to provide the financial and medical help needed by veterans suffering illnesses caused by the Gulf War. The Defence Select Committee demanded urgent action to improve veterans' quality of life. In its report on Gulf veterans' illness, published in April 2000, it concluded:
"The government's record has been far less impressive in respect of improving the quality of life of ill veterans. We wish to see a great deal more progress in terms of ensuring Gulf veterans have access to adequate financial provision and to appropriate medical treatments and advice … Urgent action is required in both these areas if it is to fulfil the debt of honour which it has acknowledged".
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I now turn to the subject of depleted uranium—used for its extreme hardness and density—which has been blamed for illnesses among soldiers who fought in the Gulf War and among Iraqi civilians. Concerns have also been expressed about its use in operations over Kosovo.
The most common uses for depleted uranium ammunition are in main battle tank shells (the UK has stocks for its Challenger tanks) and in aircraft cannon. The US A-10 "tank buster" aircraft carries a 30mm cannon in its nose which uses depleted uranium ammunition. A-10 operations accounted for the depleted uranium ammunition use in Kosovo. British forces did not use any depleted uranium ammunition in Kosovo.
The alleged dangers of the use of DU ammunition have been examined both by the MoD in this country and by the US Department of Defense, and their investigations are continuing. So far, their studies have concluded that expended DU ammunition presents very little danger to civilians and service personnel.
The Ministry of Defence asserted in its study on the testing for the presence of depleted uranium in UK veterans of the Gulf conflict:
"There are a number of ways in which some UK troops could have been exposed to DU during the Gulf conflict. However, it is judged that any radiation effects from these possible exposures are extremely unlikely to be a contributory factor to the illnesses currently being experienced by some Gulf veterans. Furthermore, because the kidney is the organ most susceptible to the toxic effects of (soluble) DU, and given the transient nature of any acute kidney damage, the symptoms which are most likely to be exhibited now in individuals who have ingested or inhaled large quantities are those of chronic kidney damage, although such damage could have been caused by a number of other unrelated factors. Chronic kidney damage has been observed in a very small number of those veterans who have so far attended the MAP (Medical Assessments Programme), although in each case this damage has been directly attributed to other specific diseases".
The Ministry of Defence announced on 8th September 1999 that the Gulf War veterans tested for depleted uranium in Canadian tests and concerned by the results would be given the opportunity to be retested in Britain. The effects of depleted uranium are also being studied by a group of six experts appointed by the Royal Society, and the World Health Organisation has set in train a study to set standards on depleted uranium and define minimum levels of contamination.
In January 2001, there were widespread reports in the domestic and international media about possible exposure of British and allied forces to depleted uranium in the Balkans. Allegations were made that the health of peacekeepers in Bosnia or Kosovo may have been affected by their deployment. It was suggested that some peacekeeping personnel may have become ill as a result of exposure to depleted uranium in the Balkans.
In January 2001, the MoD made the following statement:
"Handled in accordance with the regulations, DU shells present no hazard to our forces. We have long recognised, however, that on the battlefield its debris might present a hazard from chemical toxicity, in the same way as any heavy metal such as lead, and a low level radiological hazard. The risk from chemical toxicity

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would arise from ingestion of the soluble depleted uranium oxides, and the radiological risk primarily from inhalation of the insoluble depleted uranium oxides. These risks arise from the dust created when DU strikes a hard target such as an armoured vehicle. In its massive form, as expended rounds or solid fragments, it is a negligible hazard",
In view of the concern, the MoD announced an additional appropriate voluntary screening programme for our service personnel and civilians who have served in the Balkans.
We on these Benches welcomed the extra medical checks on servicemen to give them peace of mind and enable them to understand the issue more clearly. But I must stress that no decision on the future use of depleted uranium ammunition should be taken for political reasons, as it is one of the very few armour piercing weapons that can destroy enemy armour.
Evidence accumulated by some scientists since the Gulf war, where 10-times as much depleted uranium was used, has linked DU to birth defects in Iraq and long-term illnesses, including cancer. But none of the research has been conclusive. However, it is important to consider that either the use of, or storage of, chemical weapons by Iraqi forces in the region, as well as the oil fires caused by retreating Iraqi forces, could go some way to explaining the reported proliferation of cancers and other health conditions in southern Iraq.
In conclusion, I support the comments made by my noble friend Lord Burnham, especially on the subject of anthrax, as well as those made by my noble friend Lady Park. The same applies to the remarks made by the noble Lord, Lord Morris, particularly his point about pensions. The situation is nothing less than scandalous. As stated earlier, the Government's record has not been impressive in respect of improving the quality of life of veterans who are ill—if they wish to fulfil the debt of honour that they have acknowledged.
I am aware that these veterans have access to the full range of services available through the NHS or, if still serving, through the Defence Medical Services. In addition, the medical assessment programme has contributed to improving veterans' conditions in various practical ways. But can the Minister state what new action is being taken to improve the lot of these veterans? This country has always provided the necessary medical cover for our servicemen. That is a large contributory factor to the high morale that exists in our superbly well-trained Armed Forces today. It is critical that this high morale is sustained. It is our duty to ensure that no stone is left unturned to assist these veterans if our Armed Forces are to fight effectively to win wars.
9.10 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, I am very grateful to my noble friend Lord Morris of Manchester for, once again, providing us with an opportunity to debate the Government's approach to Gulf veterans' illnesses. My noble friend's active
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interest in the subject is well known, and I welcome his involvement. I am also grateful to all noble Lords who have taken part in tonight's debate.
As has been said, this is my introduction to debates on the subject. It is fitting that we should be talking about veterans at a time when our own servicemen and women are putting themselves at risk in another theatre of war with their usual bravery, as did those veterans of the Gulf war. As the noble Lord, Lord Vivian, has just said, this House is always the first to acknowledge the huge debt that we owe to our servicemen and women, whether in the present or in the past.
Having mentioned the noble Lord, Lord Vivian, perhaps I may welcome him to his new position on the Opposition Front Bench. He is a noble Lord with great experience, and great distinction, in the defence field. I very much look forward both to working with him and no doubt to disagreeing with him from time to time, though I suspect that that will not be very often. In the same breath, I should also like to thank the noble Lord, Lord Burnham, who served so well on the Opposition Front Bench for many years. He and I were, as it were, opposite each other for a very short period of time in the summer of this year. All Members of the House will recognise the fact that he behaved towards me, who was absolutely brand new to the Ministry of Defence, with sympathy, tolerance and good humour. We wish him the very best for the future.
Since our previous debate on the subject in January of this year, to which reference has been made, the Government have undertaken much work on Gulf veterans' illnesses issues generally, and specifically addressed the concerns of those Gulf veterans who are ill. In the limited time available to me, I shall attempt to highlight some important developments since January, and to touch upon work that the Government have in hand.
I want to make it quite clear at the beginning of my response that I shall not be able to answer the many proper questions that have been put to me this evening. However, I guarantee to write to noble Lords with the answers to their questions as soon as I am able to do so after the debate. I shall, of course, do my best to answer some of the questions raised.
As has also been said, on 14th March this year the Prime Minister announced the appointment of my honourable friend Dr Lewis Moonie as Minister for Veterans Affairs. This was an important development for all Armed Forces veterans, including Gulf veterans, as they now have for the first time a single ministerial focal point for any queries or problems that may arise as a result of their service. The appointment reflects the Government's determination that veterans' issues should be handled in a co-ordinated and joined-up way to ensure a properly integrated approach.
An interdepartmental veterans task force, supported by a veterans' forum, has been established to assist the Minister, and its first meeting will take place next month. The veterans' forum, including

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representatives of the veterans' groups, enables them to articulate to us their principal concerns. The first meeting was on 24th July and was a great success. We believe this will develop a close relationship with key veterans' organisations.
The veterans' plenary forum met for the first time yesterday. It was a very successful meeting, with more than 200 representatives from veterans' groups attending. Its importance was highlighted by the attendance not only of Dr Moonie but of my right honourable friend the Secretary of State at a time when, as your Lordships will know, his time is extremely precious.
As part of this more integrated approach, the War Pensions Agency was transferred to the Ministry of Defence. I know that that has caused a little disquiet among some veterans. However, there is no question of the WPA losing its impartiality as it remains bound by the legislation that underpins the War Pensions Scheme. The agency's decisions in respect of individual cases will continue to be based on the case facts, the standard of proof required by law and contemporary medical understanding. Claimants for war pensions have, and will continue to have, a right of appeal to the independent Pensions Appeal Tribunal service, part of the department of my noble and learned friend the Lord Chancellor. The War Pensions Agency is working hard to reduce the amount of time it takes to consider claims.
Certain claims have been made in relation to compensation and certain questions have been asked in relation to costs. I think they are worthy of an attempt to answer. My noble friend Lord Morris asked about costs of the MoD. Details are not readily available. Learned counsel was consulted on 15th April 1997 and Treasury solicitors have provided ad hoc legal advice since, but costs are not readily available.
I want to make it absolutely clear that it is not the case that the Ministry of Defence or its legal advisers have ever made financial demands on claimants. If claimants' solicitors have sought additional funding for their clients, that has not followed demands from the ministry. Veterans should take this up with their solicitors, if they have concerns.
The noble Lord, Lord Clement-Jones, raised the issue of compensation, as he has in the past. I have to say—this would apply to any Minister standing at the Dispatch Box—that when compensation claims are submitted they are considered on the basis of whether or not the department involved, in this case the Ministry of Defence, has a legal liability to pay compensation. When there is a legal liability to pay, compensation is of course paid. To have any lesser standard, bearing in mind that this is taxpayers' money, would not be a sensible thing for any government.
We have made a concession to Gulf veterans by undertaking not to rely on the defence of limitation under the Limitation Act 1980 without giving solicitors prior notice. I tell the House that as of 30th
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September this year we had 1,890 active notices of intention to claim from veterans and members of their families in respect of illness allegedly arising from the Gulf conflict. However, the Ministry has yet to receive any writs or claims of sufficient detail.
The veterans' forum is but one way in which the Government keep in touch with veterans and their representatives. An updated information pack published in January of this year about the illnesses of Gulf veterans has been sent to all GPs in the United Kingdom as well as to those other interested parties, including health professionals and those in the Defence Medical Services. Over 48,000 copies have now been dispatched. The Ministry of Defence's Internet website is frequently updated and is an increasingly valuable way of making information public. Gulf Update, the newsletter produced by the Ministry of Defence's Gulf Veterans' Illnesses Unit, is published every six months and sent to several hundred veterans, parliamentarians and other interested parties. The veterans and others continue to contact the MoD via our freephone helplines and receive appropriate assistance. In addition, there is a considerable amount of correspondence.
Of course these issues are rightly much scrutinised by Parliament, both here and in another place. Some 70 parliamentary Questions have been tabled on the subject of Gulf veterans' illnesses and on depleted uranium since January. Noble Lords may recall that in May the Minister for veterans' affairs and the head of the Gulf Veterans' Illnesses Unit gave evidence on both topics to the House of Commons Defence Select Committee. Their evidence and a memorandum submitted to the committee by the Ministry of Defence have been published.
The Gulf veterans' medical assessment programme has been running now for many years and in that time has seen over 3,200 patients. Since January, over 150 patients have been seen. There was an increase in referrals earlier in the year which I believe was a reflection of the considerable media attention given to depleted uranium and because more health practitioners are now aware of the Gulf veterans' medical assessment programme rather than due to an increase in the numbers of veterans becoming ill. The annual underlying trend in referrals continues to decline.
Up to September, the results of an analysis of a satisfaction questionnaire showed that 96 per cent of medical assessment programme patients who responded were satisfied and 26 per cent added comments to express the extent of their satisfaction. However, we should not be complacent. A significant proportion of the medical assessment programme's patients live a long way from London and some find it difficult to travel. As a trial, since May a small number of patients are being seen at a clinic held approximately every two months and run by the head of the Gulf veterans' medical assessment programme in Northallerton, North Yorkshire. Patients are given exactly the same assessment as they would have received had they come to London and early indications are that this trial is a success.

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On 29th June the MAP published a paper on its clinical findings of the second thousand service and ex-service patients to be examined. Of those examined, 80 per cent were well and 20 per cent were unwell. The authors of the paper defined those who were unwell as having an active disease or symptoms interfering with daily living. Of the 20 per cent who were unwell as defined, 70 per cent had psychiatric disorders. This demonstrates the importance of the psychiatric referral network that has been established. As noble Lords will know—I shall not go into detail now—the Government have identified mental illness as one of our three health priorities and have addressed it in the mental health national service framework. Much extra investment has been put into that for the next year.
Research into what all noble Lords would agree is the complicated issue of Gulf veterans' illnesses is continuing and further results of Ministry of Defence-funded research have become available in the past few months. I was surprised to hear criticism of the fact that research was taking place. Imagine the criticism there would be if research was not taking place. It is important, both for the veterans themselves and for the Ministry of Defence, that research is done properly and that time is taken on it so that the conclusions can be relied on.
On 12th April, a team from Manchester University published its results from a study looking at the ill health of Gulf veterans. It found that although Gulf veterans report greater severity of symptoms than those who were not deployed to the Gulf, the overall severity of their symptoms is not high. Those findings also suggest that vaccinations and the handling of pesticides might be a cause of certain patterns of ill health. Research in both areas is ongoing. The interaction works at the defence science and technology labs at Porton Down are working on organophosphate pesticides, sponsored by the Department for Environment, Food and Rural Affairs, work at Manchester Royal Infirmary and work at King's College, London.
In July last year, the University of Manchester team reported the results of their independent study into mortality among Gulf veterans. We have updated those figures every six months. Between 1st April 1991 and 30th June this year there were 496 deaths to Gulf veterans, compared with 494 in a comparison group who did not deploy to the Gulf. That means that there was essentially no difference in overall death rates between the Gulf veterans and the controls. Deaths due to external causes, particularly road traffic accidents, were slightly more common among Gulf veterans. We are researching that further.
A paper by a team at Guy's, King's and St Thomas' School of Medicine entitled Ten Years On; What do we know about Gulf War Syndrome? noted:
"No evidence has emerged to date of neither distinct biomedical abnormalities nor premature mortality",
among Gulf veterans. The programme of research initiated by the Government to investigate the possible adverse health effects that might result from the combined administration of the nerve agent pre-treatment tablets and vaccines used during the conflict
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is also making progress. Such a thorough and complicated study takes time and final results are not expected until 2003.
Another government-funded study is examining the reproductive health of Gulf veterans and their partners and the health of their children. Results are expected to be published next year.
The Ministry of Defence has spent approximately £4.7 million on the studies described. It is estimated that they will cost another £1.5 million to complete. We continue to monitor research undertaken in the United States.
I am conscious that I am beyond my time, but I believe that the debate has not reached its conclusion, so I hope that noble Lords will bear with me, because depleted uranium has also been mentioned and I have a little to say about it. The possible health effects of depleted uranium-based ammunition are a cause for concern among veterans and their families as well as in the Ministry of Defence. In particular, a link has been suggested between exposure to depleted uranium and the illnesses being experienced by some Gulf veterans. As the noble Lord, Lord Vivian, said, the Government are taking urgent steps to put in place an appropriate voluntary screening programme. We have constituted an independent oversight board comprising eminent scientists and representatives of the veterans' organisations to take forward and oversee proposals recently published for public consultation. We emphasise that it is vital that the arrangements that are put in place are technically well founded and properly validated. We recognise that that process is taking some time.
The consultative processes and the independent oversight board are a clear demonstration of our intention to be open in developing plans for a screening programme. The oversight board met for the first time on 27th September.
On 22nd May, the Royal Society published a report on its independent review of the health hazards of depleted uranium-based ammunition. Its main thrust strongly supports our view of the radiological risks posed by DU on the battlefield, which is that its use in the Gulf and the Balkans has presented only an extremely low health hazard to UK forces.
Anthrax was also mentioned during the debate. I have little to say about it today except that in March the Ministry of Defence announced its intention to resume anthrax immunisation in April. On 21st May we resumed the voluntary immunisation programme for personnel deployed in operations to the Gulf, together with some specialist units. We shall offer anthrax immunisation as it has previously been offered to personnel on the basis of informed voluntary consent.
Of course, we hope that in the current crisis we shall have learned lessons from what happened 10 years ago. However, I do not believe that tonight noble Lords will expect me to go into detail about what specifically has and has not been done in the field of protecting our servicemen and women. The Ministry

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of Defence wants to be as open as possible with the House. I shall go as far as I can in letters to noble Lords with the details that they seek.
This debate has highlighted the concern for Gulf veterans. I was going to talk in some detail about the war pensions scheme. However, time is against me and, as not much mention was made of that subject during the course of the debate, I shall leave that part of my speech until another day.
The Government's position is that we are committed to dealing with Gulf veterans openly, honestly and fairly. We believe that we have made considerable progress since our previous debate. We
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shall continue to treat this matter as a high priority, and we are always ready to listen to suggestions for improvement. As I said, research on a broad range of topics is continuing into what is a difficult subject. Answers will not be found overnight.
In the meantime, in the consultation that we carry out we shall keep an open mind about the causes of the ill health that has been experienced. We shall continue to do what we can to assist veterans who are unwell and the families of those who, sadly, have died. We remain committed to addressing the health concerns of Gulf veterans. I conclude by again thanking noble Lords who have taken part in this short debate.
House adjourned at twenty-seven minutes before ten o'clock.

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