Sitting of 23 April 2002

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  GREENHAM AND COOKHAM COMMONS BILL
  Lords amendments agreed to.
Oral Answers to Questions
  TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS
  The Secretary of State was asked—
  TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS

    Standard Spending Assessments
    Hugh Bayley: What steps he is taking to bring SSAs in English unitary authorities closer to the national average. [49393]
    The Minister for Local Government (Mr. Nick Raynsford): We are currently reviewing the system for distributing grant to local government. We have said that the new formulae will take into account the circumstances that authorities face. Clearly, circumstances in unitary authorities vary enormously, as they do elsewhere. Therefore, I do not think that it is helpful to set broad goals, such as moving a particular group towards an average. That would lead us to a system where everybody gets the same irrespective of differing needs and local circumstances, which would not be fair.
    Hugh Bayley: When the City of York was created as a unitary authority in 1996, it inherited from the Conservatives one of the lowest SSAs in the country. I know that the Government acknowledge the need for change in the local government funding formula, and that they have brought forward proposals in that regard. Will my right hon. Friend say whether the Government intend to bring forward legislation in time to affect the local government finance settlements next year?
    Mr. Raynsford: I am pleased to be able to tell my hon. Friend that we intend to introduce changes in time for next year's local government settlement, although that will not require legislation. The proposals will be subject to a period of consultation with local government and other
    130
    interested parties during the summer, and we intend to make the necessary arrangements so that the new system can be in force from April 2003.
    Mr. Andrew Rosindell: In his review, will the Minister look at the London borough of Havering, which receives substantially less than other boroughs with similar populations? For example, Redbridge next door gets £50 million more than Havering. Does he agree also that it is better for local money to be spent on local services than on the bureaucratic and unnecessary regional assemblies around England with which the Government appear obsessed?
    Mr. Raynsford: The system is based on a proper and serious assessment of the needs of each area, taking account of different circumstances and requirements. Simplistic and crude comparisons of the grants available to different areas are usually very wide of the mark. However, I assure the hon. Gentleman that the Government are looking carefully at all the factors relevant to local government needs, in London and in other parts of the country. We intend to produce a system that is clearer, simpler and easier to understand than the current system, and one that is also fairer.
    As to regional assemblies, the hon. Gentleman will have to await our proposals. However, it is our intention not to create bureaucracy but to create structures that add value and improve regional economic performance.
    Ms Julia Drown: My right hon. Friend said that it was important to take into account the circumstances of different authorities. Swindon borough council receives the lowest education SSA of all unitary authorities. Schools elsewhere in the country receive £1,000 more per pupil than is the case in Swindon, where standards are higher. Does my right hon. Friend accept that that is unacceptable and unfair, and that the situation cannot continue?
    Mr. Raynsford: My hon. Friend raises a perfectly fair point about the weight to be given to the per-pupil allowance in the educational element of the grant distribution formula. However, other factors need to be taken into account, such as special local circumstances. Authorities in rural areas face greater costs because of sparsity, for example, and there are particular deprivation factors in inner-city areas, and where there are high concentrations of people for whom English is not the first language. Any system must take account of the whole range of factors, and that is why we propose to carry out detailed consultation before we finalise our proposals.
    Mr. Malcolm Moss: Despite the Government's continual boasting about increases in SSAs and levels of grant money to all local authorities, including the unitary authorities, real-terms council tax rises under Labour have averaged 5 per cent a year, compared with 2 per cent. under the previous Conservative Administration. Is not that yet another example of a Labour Government stealth tax?
    Mr. Raynsford: No, it is not. The details show that the largest increases in council tax this year have been imposed by Conservative authorities. If he wishes to criticise council tax increases, the hon. Gentleman could

    131
    do no better than to talk to his colleagues in those Tory shire counties which, in the year after an election, have chosen to have a very large increase in their precept. That is an example of the politics being played by the Conservative party, and the House will have no truck with that approach.
    Ms Karen Buck: Boroughs such as mine, Westminster and the royal borough of Kensington and Chelsea did well in this year's settlement, but is my right hon. Friend aware that the figures issued last week on households below average income show that London as a whole has more families at risk of poverty than any other region in England? Will he assure me, therefore, that the current review into SSAs will take into account both London's exceptional costs and the extremely high levels of deprivation across the capital?
    Mr. Raynsford: My hon. Friend makes an extremely valid point. As she will know from my earlier comments, we are considering carefully all the relevant factors in all areas of the country. Inevitably, there will be some difficulty during that process, because every area and every group of authorities sees the review as an opportunity to increase its share of the total. Everyone cannot be a gainer in that process, however, and it is our duty to be thoughtful and careful and to come to the best and most prudent conclusions that will genuinely respond to needs and create a fair framework for the grant distribution settlement. That is the basis on which we are acting, and I hope that my hon. Friend will bear with me and will understand the difficulties that face us as we try to come up with an appropriate solution.

    West Coast Main Line
    Mr. Peter Luff: What recent representations he has received on the progress of the upgrade of the west coast main line. [49394]
    The Minister for Transport (Mr. John Spellar): I have received a number of representations about a range of issues relating to modernisation of the west coast main line.
    Mr. Luff: On St. George's day—and a very happy St. George's day to you, Mr. Speaker—I am delighted to be able to ask a question about a line that links London with the heart of England. Does the Minister share my concern about the implications of the regular programme of weekend closures planned for the line later in the year? Will he intervene to ensure that better management avoids the serious short and long-term consequences of that wholly unnecessary programme of closures?
    Mr. Spellar: As a fellow heart of England Member of Parliament, I remind the hon. Gentleman that we have a very acceptable and efficient alternative rail system from the west midlands to London via the Chiltern line. I am sure that he will acknowledge its extremely good record.
    I depart from the hon. Gentleman, however, when he says that the closures are unnecessary. There was much discussion about them in the industry. As he knows, the initial proposals were for a four-week closure programme that included the working week. Many representations
    132
    were made as to the impact of that on business and commerce in the regions. However, Railtrack needs to secure the track in order to make vital improvements on the west coast main line and there has been much discussion with the Strategic Rail Authority, local train operators, Virgin and Railtrack to try to pull together the various elements. Nobody could say that the closure is desirable but it is necessary and there was an agreement in which everyone gave a little. Obviously, we are looking forward to the improvements that will result from this period. We have also made sure that it avoids a number of significant events—not least the Commonwealth games in Manchester.
    Mr. Eric Martlew: I am grateful to my right hon. Friend for that answer. Does he agree that when the west coast main line is fully upgraded—hopefully with the trains running at 140 mph—there will still be a major capacity problem? Bearing that in mind, does he support the SRA plan for a brand new high-speed link from London to the north of England?
    Mr. Spellar: My hon. Friend is a little in advance as regards the state of that process. That option is being examined and we shall obviously look at the outcome. Similarly, we shall consider the proposal for additional freight capacity made by Central Railway. The SRA is in intense negotiations and will be making its recommendation later this year.
    Mr. Peter Duncan: On St. George's day, may I ask whether the Minister has had the opportunity to meet the Secretary of State for Scotland to make a joint assessment of the impact on the Scottish economy of the continued procrastination about the west coast main line upgrade? Will the right hon. Gentleman take this opportunity to deny the rumours and speculation that the upgrade will not extend north of the border?
    Mr. Spellar: The hon. Gentleman is a little uncharitable given that the state of the railway industry that the Conservative Government bequeathed to us, the appalling structure and record of Railtrack and the problems that it had on the west coast main line were the absolutely crucial factors in its inability to continue as a going concern. A degree of humility from Opposition Members would he in order.
    As the hon. Gentleman will be aware, the SRA, Railtrack and the train operators are considering how they can work together to ensure the most favourable outcome from the west coast main line scheme, which had been appallingly priced and mismanaged by Railtrack. We are starting to pull that scheme together, but I do not underestimate the difficulties that we were bequeathed by the Conservative Government, whom he supported.
    Andrew Bennett: Will my right hon. Friend reconsider the weekend closures and the closure of Stockport station? I am not sure whether he recalls that between 1958 and 1960, when the west coast main line was electrified, every bridge between Manchester and London had to be raised to get the electrical cables through. That was done with minimum disruption on a Sunday. Why do engineers now seem

    133
    incapable of achieving the desired main line upgrade without major closures at weekends and without closing some stations for long periods?
    Mr. Spellar: Well, Sunday is half the weekend. The implications of the time scale are straightforward—the more the work is spread out, the longer it takes and the later we get the improvements. As I said earlier, there was a proposal to do the work in shorter time by shutting down much longer chunks of the network throughout the week. That was thought undesirable and, indeed, damaging to business and business travel. As a result, we are considering a series of weekend works, but even more weekends would be affected if we were to adopt my hon. Friend's suggestion, which would, of course, affect even more people who wish to travel to and from London at the weekend.
    A balance must be struck. No one believes that such closures are desirable—I merely point out that the various parties have reached the best negotiated outcome.
    Mr. George Osborne: The chief executive of the north-west tourist authority says that the weekend closures will seriously affect tourism in that region. They will also seriously inconvenience my constituents who do not have cars and who wish to travel to London and the rest of the country. Is it not beyond the wit of Railtrack and the Government to upgrade the west coast main line without shutting it at weekends in one of busiest periods?
    Mr. Spellar: I suspect that the hon. Gentleman's other constituents who wish to travel to and from London on business would be very concerned if the system were shut down during the week. A balance must be struck. All the options create difficulties; it is question of which is more undesirable. The House would generally agree that weekend closures are preferable to shutting the line during the week and severely disrupting business and commerce. I am sure that the business community in the north-west will note the rather light-hearted way in which the hon. Gentleman is treating such comments.

    Regional Air Services
    Mr. David Stewart: If he will make a statement on the future of regional air services. [49395]
    The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): The Government recognise the importance of regional air services and have undertaken a programme of studies on them. The Government will shortly undertake a consultation exercise on the findings of those studies through a series of regional consultation documents. Those documents will examine how regional air services could develop under a range of scenarios.
    Mr. Stewart: The Minister will be aware of the worrying trend in the United Kingdom of regional air services being cut in favour of more lucrative international destinations. In my constituency, for example, we lost our link with Heathrow in 1997. Does my hon. Friend share my view that we have to beef up our protection for vulnerable geographic routes, such as those to and from Inverness and Plymouth? Does he agree
    134
    that we must demand stronger regulations in Europe for public service obligations; interpret the current regulations as liberally as the French do; and, finally, grapple with the difficult and thorny issue of the lack of runway capacity in the south-east?
    Mr. Jamieson: I congratulate my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) on so assiduously following up this important issue on behalf of his constituents through questions, correspondence, meetings with constituents and Adjournment debates. He has left us in no doubt about the importance for Inverness of the London air links. I noticed that he cheekily introduced the issue of Plymouth in relation to Inverness; I am not quite sure why.
    The Government have shown that where there is a demonstrable need for regional air services, we will take the necessary action to provide them—as we have in the highlands and islands, where there are public service obligations on certain flights. However, I remind my hon. Friend that public service obligations and the ring-fencing of slots are governed by strict European legislation, and we have to test each application to determine whether it meets those criteria.
    My hon. Friend mentioned the south-east and east of England regional consultation document. I am sure that all hon. Members will be interested to see it once it is published.
    Mr. John Randall: Will the Minister acknowledge that any further expansion of Heathrow that involves the construction of a third runway would be completely unacceptable to the vast majority of local residents, and will he take this opportunity to rule it out?
    Mr. Jamieson: It is too early to speculate on that matter, and I ask the hon. Gentleman to wait until the regional air services consultation documents are published. I assure him that many hon. Members, not only those in the south-east and east regions, will be interested in the outcome of studies in their areas.
    Mrs. Gwyneth Dunwoody: The Minister will be aware that in France, major airports in the Paris area have vast numbers of slots that are protected for public service obligations, allowing regional air services to connect people with goods and services. Given that it is possible to protect regional air services, will the Minister give an undertaking that the Government will put that at the top of their agenda in order to defend the interests of the regions?
    Mr. Jamieson: I assure my hon. Friend that the importance of regional air services is very much on our agenda, as will be underlined by the consultation documents when they are published.
    I can also tell my hon. Friend that my Department is considering the European legislation to see how it can be strengthened and to see if other policy options could be used to provide protection for regional air services. It has not generally been Government policy to protect and ring-fence the slots, because where they are protected—for example, in the highlands and islands—funding issues must be addressed as well.
    Angus Robertson: The Minister will be aware that a campaign for a public service obligation order for the Inverness to Gatwick route has been running for years, not months. He will also be aware that there have been debates in the House and Ministers have repeatedly been questioned about when the Government will announce a decision, yes or no, on a PSO for the Gatwick to Inverness route. The longer they take, the more it will be perceived as a rebuff to the Scottish Executive, who are in favour. The delay is inexplicable to the people of the highlands and islands, given the contrast with the situation in France, where there are at least 34 such PSOs, even on routes where there are competing airlines. When will the Government announce their decision?
    Mr. Jamieson: I note the hon. Gentleman's interest in public service obligation orders and look forward to seeing ideas from his party about how they might be funded in certain circumstances, because that issue must be addressed at the same time.
    My hon. Friend the Member for Inverness, East, Nairn and Lochaber has made clear to me the importance of the Inverness service. An application for a public service order was received from the Scottish Executive last year. We are in correspondence with them about the matter, and an announcement will be made shortly.

    Local Transport
    Andy King: What recent additional resources have been allocated to local authorities for investment in local transport. [49396]
    The Secretary of State for Transport, Local Government and the Regions (Mr. Stephen Byers): Last December we announced an allocation of more than £1.5 billion for local authority transport schemes. By 2005, we will have invested over £8 billion in a five-year package of local transport improvements. That funding represents a long-overdue increase in levels of investment.
    Andy King: I am grateful to my right hon. Friend for that response, and I can give him some figures from Warwickshire, which has benefited enormously from that settlement.
    Chris Grayling: Has he got a job yet?
    Andy King: I have not, actually.
    Spending on integrated transport has gone up from £1.7 million to £4.52 million and on public transport improvements from £212,000 to £1,005,000. The facts speak for themselves. Now here comes the question. The people of Rugby and Kenilworth have said for a long time that they want to use public transport, but, through the efforts of the Conservative party, it was not there to use. There is now more public transport, and we need to continue the investment. Does my right hon. Friend share my pleasure in the refurbishment, undertaken under the Government, of Rugby station, which will officially be reopened on 27 May?
    Mr. Speaker: Order. The Secretary of State can now answer the question.
    Mr. Byers: I am sure that we all look forward to celebrating the opening of Rugby station on 27 May. My hon. Friend made an important point, and Conservative Members' reaction was all too typical. They do not want the facts to get in the way of their prejudices. The Conservative party starved local authorities of funding for their transport projects. Consequently, many parts of the country have a local transport system that desperately needs significant investment. We are putting in that money now: £1.5 billion before Christmas and more than £8 billion by 2005. That investment will make a genuine difference in Rugby and Kenilworth and throughout the country.
    Mr. Geoffrey Clifton-Brown: The Secretary of State is considering the allocation of resources for local transport systems. He knows that in London, investment in the tube has decreased in the past four years and that long-term investment strategy has still not been determined. Delays have doubled in that period, and London Underground has missed its seven targets.
    An article in the Evening Standard today describes London commuting as the worst in Europe. How can any voter in the next four years trust the Government to provide a decent transport system in London or anywhere else in the country?
    Mr. Byers: The hon. Gentleman makes the case for the modernisation plans for the London underground, which has been starved of investment for too long. He must acknowledge that under 20 years of Conservative rule as much as under any other Government, money was not invested in the London underground system. We are consulting about a proposal to provide investment—some £16 billion a year over 15 years—in it. That will remedy many of the problems to which the hon. Gentleman referred. I hope that he will support our proposals for investment and modernisation.
    Mr. David Clelland: What influence will regional government have over local and regional transport plans? What will be the division of powers between local and regional government and national Government? Will the forthcoming White Paper spell that out? When can we expect it to be published?
    Mr. Byers: As always, my hon. Friend presents a strong argument for involving the regions, in this case in transport. He will have to await the White Paper, which will be published shortly after the local elections on 2 May. When he reads its proposals, he will realise that, for the first time, we have a Government with an active regional policy that provides choice. People can vote for an elected regional assembly if they wish, but, most important, the White Paper will value the regions of England. I am delighted that so many hon. Members are wearing red roses on St. George's day. Perhaps they have been out campaigning for Labour in the local elections. On St. George's day, it is right to celebrate the regions of England, and the White Paper will do that.
    Mr. Steve Webb: The community transport schemes funded by the Government have been

    137
    welcomed in my constituency and elsewhere. However, they have suffered from the problem of a hand-to-mouth existence because their funding has never been guaranteed beyond the next year or, in some cases, two years. Will the Secretary of State explain how such community transport schemes will be funded in the long term when the current grants run out? Will councils have to cut other items of public transport to keep community transport going?
    Mr. Byers: The hon. Gentleman is right to stress the importance and the valuable role of community transport in his constituency and in many others. The figures will show that we have doubled the funds being made available to that initiative. The hon. Gentleman makes the strong point—both in relation to certainty and to the achievement of value for money—that if we can plan not only on an annual basis but perhaps over a three-year spending programme, it will allow people to plan ahead with confidence, which they perhaps cannot always do at the moment. We will certainly want to look carefully at how we can extend the benefits of the Government's three-year spending programme to those agencies, local authorities and bodies involved in community transport which want the certainty that we can now provide as a result of that three-year spending programme.

    Rail Network (Nottingham)
    Vernon Coaker: What assessment he has made of the development of the local rail network in Greater Nottingham. [49397]
    The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): We have established the Strategic Rail Authority with a fundamental purpose to secure the development of the railway network. The authority has published its first strategic plan, which lists the developments being taken forward—a number of which will benefit Greater Nottingham.
    Vernon Coaker: May I tell my hon. Friend that Nottingham station is full, and that we shall not be able to develop the local rail network until that problem is overcome and, in particular, until the Trent junction signal box is improved to an adequate standard? Will my hon. Friend try to give some impetus to that plan? It has been around for a number of years and it needs—for want of a better word—a bit of oomph behind it to try to get it moving. We have old pit lines and a local rail network—we have everything in place—hut the signalling needs to be improved so that we can use Nottingham station and have a properly functioning, expanded local rail network, which will help to address the commuter problems in Greater Nottingham.
    Mr. Jamieson: On the important subject of the railway station. I know that the Nottingham councils have funded a feasibility study, in partnership with Railtrack and the train operating companies, into improving passenger capacity and integration, particularly with the Nottingham express transit service. I hope that it will be a candidate for railway passenger partnership funding. My hon. Friend will know that the complexities of the rail system in the area around the Trent junction are considerable, and I am
    138
    afraid that there is no single, simple solution to that problem. However, the SRA will be trying to get some oomph behind the problem by working with Railtrack on the feasibility study to achieve incremental improvements in performance and to increase capacity to benefit rail users in the area. I am sure that my hon. Friend will be around later in the year when my right hon. Friend the Minister for Transport is due to open some of the new improvements to the Robin Hood line.

    Local Government Finance
    Ms Joan Walley: What steps his Department is taking to analyse the council tax and spending patterns of local authorities. [49398]
    The Secretary of State for Transport, Local Government and the Regions (Mr. Stephen Byers): Over the past five years, the Government have increased the grant to local authorities by 20 per cent. in real terms. This compares to a cut of 7 per cent. in the last four years of the Conservative Government. As part of our changes to local government finance, we will be considering the relationship between the levels of council tax, the Government grant and the amount actually spent on the provision of services.
    Ms Walley: It is extremely important that we have properly funded public services, particularly after all the inequalities of the last 12 years. It is important that my right hon. Friend looks at the review of the standard spending assessment, and, in particular, at authorities such as Staffordshire and Stoke-on-Trent—which I represent—to see how we can put right the problem of our per capita spending being 5.4 per cent. below the national average. What people really want is proper standards of rubbish collection, green spaces to be properly attended to, and back alleyways—of which there are many in Stoke-on-Trent—to be made good and kept clean. That is what we need the money for. Will my right hon. Friend ensure that his review gives councils such as Stoke-on-Trent the opportunity to have their say and the certainty for future spending?
    Mr. Byers: My hon. Friend makes a powerful point, as she often does, on behalf of her constituency and of Stoke-on-Trent more generally. I am aware of the difficulties and pressures faced by that area because of certain closures that have taken place in recent years and because of the historically low levels of wages provided to those in employment there. It is right that, when we come to review the distribution of Government grant, we should take into account many of the issues that bring pressures to bear on local authorities such as Stoke-on-Trent. It is also important that, when we consider the steps that we want to take for an overall community, we also look at other sources of funding that we might be able to target more specifically in a locality, to focus on the areas of greatest need. That is certainly what we intend to do as we carry forward our review of local government finance distribution.
    Mr. David Curry: When the Secretary of State looks at council tax levels, will he bear it in mind that one thing unites all the shire authorities, whether they are controlled by the Conservatives,

    139
    the Liberal Democrats or, indeed, as in the case of Durham, Labour? What is common to shire authorities and other authorities, such as York, is that they have to respond to the chronic underfunding of social services. Is the Secretary of State comfortable with the Chancellor of the Exchequer's proposals to fine local authorities if they cannot meet obligations for which they have not been funded?
    Mr. Byers: When the right hon. Gentleman has the opportunity to look in detail at the figures that were revealed in the Budget last week, he will see that there is to be an increase in personal social services spending of more than £1.1 billion next year. That is made up of £766 million that had already been identified, which is an increase well above the rate of inflation, and the additional sum of £360 million, which the Chancellor announced last week. There is thus a real-terms increase of 6 per cent. for personal social services. In that context, local authorities—county and unitary—should be able to meet the demands that are being made on them by using the generous increase in funding that is being made available.
    Mrs. Alice Mahon: While my right hon. Friend is looking at patterns of spending, will he pay particular attention to Conservative-controlled Calderdale council? In spite of an excellent financial settlement, it has seen fit to increase home care charges by 33 per cent, to withdraw funding from Scope, an excellent outreach service for people with disabilities, and to introduce one of the highest council tax charges in Yorkshire.
    Mr. Byers: I shall certainly do that. However, Calderdale is not a Conservative administration in isolation; its actions reveal a trend in Tory local authorities up and down the country. The figures speak for themselves. The average council tax in Labour councils is £738; in Liberal Democrat-controlled councils it is £824; and in Tory-controlled councils it is £833. The position is this: Tory councils cost more and deliver less.
    Mr. Don Foster: But following on from the very point that average council tax rises have been greatest in Conservative-controlled councils, as the Minister for Local Government generously explained to the hon. Member for North-East Cambridgeshire (Mr. Moss), will the Secretary of State confirm that the lowest rise in the past four years has been in Liberal Democrat-controlled councils?
    More important, will the Secretary of State acknowledge that regardless of which party is in control of a local council, the greatest cause of any increase in council tax is the issuing of diktats by an increasingly centralising Labour Government? To avoid making matters worse, will the Secretary of State tell the House precisely what plans he has to help local authorities mitigate the increase of £300 million that will be imposed on them as a result of the Chancellor's decision on national insurance, which almost wipes out the increased support to social services?
    Mr. Byers: I suggest that the hon. Gentleman looks carefully at the figures. He will see that the additional costs of national insurance contributions for personal
    140
    social services will be between £40 million and £45 million. Those are the true figures. He can dispute them, but that is the case.
    The fact is that we have made a generous settlement for local government. We added to it last week by providing £360 million specifically for personal social services. The other aspect of local government funding will be dealt with in the spending review, the outcome of which will be announced in July this year. The hon. Gentleman should wait for that. He proclaims the low charges that are imposed by Liberal Democrat county councils, but he will be aware that the highest average council tax per dwelling in England is in Liberal Democrat-controlled Richmond upon Thames, with a figure of £1,208. I am sure that when the electors in Richmond upon Thames go to the polls a week on Thursday, they will be acutely aware that they are paying the highest price in the whole country for being Liberal Democrat-controlled.
    Tony Cunningham: Tax relief for amateur sports clubs was announced in the Budget, but council tax is of course the responsibility of local authorities, so will the Secretary of State consider advising local authorities to give 80 per cent. mandatory rate relief to such clubs, which are very important to the community?
    Mr. Byers: I know that amateur sports clubs have made a positive response to the announcement made by the Chancellor in the Budget last week, and I am sure that local authorities will want to respond in a way that is equally as positive as the Chancellor's action. Lobbying by people such as my hon. Friend means, I hope, that the important role played by sports clubs in the community will be recognised by local authorities, and they will be as generous as possible.
    Mrs. Theresa May: Yet again the Secretary of State is being economical with the facts that he gives to the House. It is all very well him standing there talking about a £360 million increase in funding for local authority social care, but that will be wiped out by the Chancellor's increase in national insurance bills for local authorities. In his assessment of council tax, has the Secretary of State made any assessment of the impact of the Chancellor's stealth tax on pension funds?
    Mr. Byers: We have made sure that the funding for local government is generous and above the rate of inflation, and we added to that in last week's Budget. Additional costs that may be borne by local authorities, whether through national insurance contributions or changes to pension funds, are more than made up by the additional funding given by the Government.
    If the hon. Lady and the Conservative party oppose national insurance contributions, they must say where the money will come from. There are three options: there will be cuts in health service spending; other taxes will be raised which are being kept secret; or people will be charged or will have to take out private insurance. Those are the options, and I hope the hon. Lady will tell the House which of them the Conservatives favour.
    Mrs. May: Yet again the Secretary of State failed to answer the question that he was asked, but it is obvious

    141
    that he has made no assessment of the impact on council tax of the Chancellor's stealth tax on pensions. I can tell him that it is costing council tax payers the equivalent of a 1.5 per cent. increase in council tax every year.
    Every year under Labour, Ministers have said that they have generously funded local authorities, and every year council tax has gone up by three times the rate of inflation. That is bad news that the Secretary of State cannot bury, because people see it every time they pay their council tax bill. Under this Government, the typical single pensioner has seen council tax increases wipe out one third of the rise in the state pension. Is not the sad truth that Labour's double whammy of stealth taxes and soaring council tax is hitting hardest the most vulnerable in our society?
    Mr. Byers: I made it clear in my reply that we had taken into account the increased costs arising from pension changes, and I am sorry that the hon. Lady chose not to hear that. It is interesting that she talks, as the record will show, of the increase in council tax affecting a third of the state pension increase, yet she chooses to ignore the other funds that the Government are making available to pensioners, such as the £200 a year, which is not taxed, and the free TV licence.
    When pensioners look at the benefits that they are getting, in the round, from this Government, they will know that they can trust Labour, but they cannot trust the Conservatives. When they come to vote a week on Thursday, they will know who they can trust. They distrust the Conservatives because they know that, after 18 years of Conservative rule, pensioners had got nothing and were no longer able to live in dignity and security, as they now can because of the measures that this Government have introduced.

    Local Transport
    Paul Goggins: What action he is taking to improve public transport in urban areas. 149399]
    The Secretary of State for Transport, Local Government and the Regions (Mr. Stephen Byers): Most journeys by public transport in urban areas are taken by bus. The Government provide support of more than £1 billion a year to the bus network. We intend to review this support—in particular, the £300 million fuel duty rebate—to ensure that it helps achieve our transport objectives and improves bus services.
    Paul Goggins: I am very grateful to my right hon. Friend for that answer. Can I tell him, however, that although bus companies are very happy to provide services along the busy major urban routes, they are failing miserably in extending public transport to many of the estates where people live? Although I welcome important Government initiatives such as the urban bus challenge, will the Secretary of State tell the House what pressure he is bringing to bear on the private operators to ensure that they play their full part in the delivery of public transport across all our towns and cities?
    Mr. Byers: My hon. Friend is right to raise the importance of travel by bus. More than 10 million bus journeys are taken every day, on average, and it is
    142
    therefore right that the bus network should not be regarded as a sort of Cinderella in the public transport world. It should be given the support and the attention that it deserves. Many hon. Members on both sides of the House have expressed concern to me and Ministers in my Department about worsening bus services in their areas. That is unacceptable. In total, about £300 million in fuel duty rebate is being made available to bus operators. We have to see a real return on that level of public support from taxpayers. We are not seeing that return at the moment, which is why we will review our support to see what further steps need to be taken.
    Tim Loughton: May I point out to the Secretary of State that, however much he might fiddle the figures, the real problem in the south-east of England, particularly in West Sussex, is the lessening number of bus drivers available? Many of them are driven out by high property prices and are moving to the midlands and the north. That means that many bus companies must put up their wages, which means increased costs. Consequently, the subsidies given to local authorities do not stretch. In my county, many routes have been cut simply because more has had to be paid for existing bus services. What is the Secretary of State doing to make sure that bus drivers are available to drive the buses that are needed in places such as the south-east where there are extra costs?
    Mr. Byers: The hon. Gentleman is right to point out the success of this Government. Since 1997, 1.5 million more people are in work. That may be one of the reasons why he is wearing the red rose of Labour this afternoon—he recognises the success of this Labour Government. He is right to point out, however, that we need a strategy for dealing with this success. That is why we want to review the funding that is going in—for example, the £300 million that we are giving in fuel duty rebate—to make sure that we improve standards in his constituency and in constituencies elsewhere in the country.
    Mrs. Anne Campbell: My bus services in Cambridge have improved vastly recently. There is still a need for more frequent bus services in some parts of the city, but there has been a vast improvement in the last five years.
    May I urge the Secretary of State, when he implements the Cambridge to Huntingdon multi-modal study, to ensure that public transport comes first and that the Government back the plans for the guided bus, which will take people from Huntingdon to Cambridge and ensure that they no longer need to use their cars for this purpose?
    Mr. Byers: I am pleased to hear that the bus service in Cambridge is improving. I am acutely aware of the importance that local people attach to the Huntingdon to Cambridge guided bus route. We are looking carefully at the proposals that have come from the multi-modal study report, and we will want to make decisions shortly. Of course, the great strength of that kind of inclusive approach is that all forms of transport are considered.

    143
    The proposal that has come forward from that study is exciting, it shows real innovation, and we will want to give it detailed and appropriate consideration.
    Mr. Eric Pickles: The Secretary of State is right to say that we need to look at all forms of transport. Does he agree that in large conurbations such as London, Birmingham, Manchester, Leeds and Bradford there is a fine balance to be struck between road and rail, and that passengers are attracted to public transport by a combination of perception and price? In these dark days for the strategic plan, I am sure that the House is sympathetic to the Government's reasons for instructing the Association of Train Operating Companies to find some good soundbites in respect of railways.
    Following the publication in The Sun today of the memo from ATOC, may I ask the Secretary of State one simple question? Given the many unhappy statements that he has been forced to make to the House in recent weeks, and the particular esteem in which he is held by the public, how did he think he would ever get away with burying rises in fares?
    Mr. Byers: The hon. Gentleman should know by now not to believe everything he reads in the newspapers. If he were able to produce such a memo, I would be delighted to see it, but I do not think that one exists. That is the fact of the matter.
    More interesting is the fact that, although we are discussing bus services on which 10 million journeys a day are made, the hon. Gentleman has nothing to say about that, or about the railway system. This Government and this Secretary of State are getting on with the job of beginning to turn this country's transport system around. That is what we are committed to do, it is what we shall continue to do, and in due course the travelling public will get the benefits of that approach.

    Disabled Access
    Ms Meg Munn: What good practice his Department has recognised in respect of councils promoting better access and mobility. [49400]
    The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble): Earlier this month, we announced that Telford and Wrekin council, Nottinghamshire county council and the London borough of Lewisham had been awarded beacon status for their good practice in ensuring that they provide better access to services for local residents through imaginative local transport schemes.
    Ms Munn: I thank my hon. Friend for her answer, but may I raise with her the concerns of my constituent Mrs. Carson, who has a disability and relies on a motorised wheelchair to get about? What does my hon. Friend have to say to Sheffield city council about the fact that one of its departments—social services—has spent thousands of pounds adapting Mrs. Carson's council house, while another department has refused to fund the construction of a ramp at the end of the walkway where Mrs. Carson lives, thus making her virtually a prisoner in her own home?
    Ms Keeble: The case shows how important it is to make sure through beacon council schemes and the like
    144
    that local authorities extend best practice and prevent people from becoming prisoners in their own home. My hon. Friend might be aware that under the Disability Discrimination Act 1995 local authorities have responsibilities to ensure that disabled people can exercise their rights of access to goods, facilities, services and premises. The case she describes, which arises in a Liberal Democrat council, is a complex one, and in the interests of ensuring that the services provided to her constituent are improved, I ask her to send me the full details. I will make sure that officials advise the council.
    Mr. Andrew Turner: Is the Minister aware of the importance of access to jobs for those who are unemployed? The unemployment rate on the Isle of Wight is 5.8 per cent., compared to an average rate in the south-east of England of 1.7 per cent. A recent report states:
    "insularity prevents the Island's unemployed searching for jobs effectively off the Island. The cost and time involved cause labour mobility to be far lower than on the mainland."
    Will the Minister consider redesignating the rural bus challenge, which was most welcome, the rural transport challenge, so that Isle of Wight council can apply to the Government for money to spend on supporting ferry journeys?
    Ms Keeble: The Government are acutely aware of the need to make sure that people have access to jobs. Our approach differs somewhat from the one adopted by the previous Administration, which was simply to tell people to get on their bike. We have provided support to enable unemployed people to get buses to work through schemes such as the urban bus challenge, and our support for rural buses makes provision for 4 million additional people to get to work. The hon. Gentleman never fails to raise constituency issues, and I am sure he knows that we have examined extremely carefully the special needs of the Isle of Wight. However, I suspect that most people can find jobs in the local job market, and we provide support for bus services there.
    David Wright: May I congratulate Telford and Wrekin council on securing beacon status for access and mobility? Is my hon. Friend aware that the council, working with its partners, has increased the use of local buses on the red line route in the town by 40 per cent. in the past two years?
    Ms Keeble: Yes, my hon. Friend's local authority's beacon status is well deserved both through the dial-a-ride scheme that he mentioned and a new service called the Wrekin Ryder. By increasing the rural bus subsidy grant, the Government have provided for an extra 4 million bus passenger journeys, which is a huge commitment to improving transport services for rural communities.

    Online Voting
    Mr. Richard Allan: What assessment he has made of progress with the online voting pilots for the forthcoming local elections. [49402]
    The Minister for Local Government (Mr. Nick Raynsford): All online pilots have been subject to a departmental quality review that showed they were all on track. We are planning a further independent quality and security review of those authorities before election day. We have also been working closely with authorities piloting all postal voting to ensure that their arrangements do not enhance the opportunity for fraud or undermine the secrecy and security of the poll. We will remain in contact with all pilot authorities over the election period so that the returning officers responsible and we ourselves can be confident of the robustness and security of the pilot voting arrangements that will be available.
    Mr. Allan: Like the Minister, I want the e-voting pilots to succeed in May. I congratulate Ken Bellamy, head of information, communications and technology at Sheffield city council, on what he has done to develop the Sheffield pilots. Will the Minister ensure that clear guidance is issued to cover a situation which still concerns me? What happens when a voter turns up on 2 May at the polling station only to be told that someone has already cast their vote electronically, but they deny having done so themselves? That problem could damage confidence in e-voting if it is not handled carefully. I hope that the Minister will agree to publish guidance so that Members of Parliament, councillors and the public know what would happen in those circumstances.
    Mr. Raynsford: On the specific issue raised by the hon. Gentleman, I shall ensure that officials from my Department are in touch with Sheffield council to discuss the circumstances of that case and that appropriate guidance is issued to all authorities undertaking electronic polls. It is very important that we use the pilots as an opportunity to test thoroughly the availability of new technology to facilitate voting. All of us are concerned about falling participation in elections; anything that we can do to help people to vote who might not otherwise do so is a good thing. We are keen to explore that, and ensure that we make the most of the opportunities presented by the pilots.
    Mr. Clive Betts: I am sure that my right hon. Friend will understand that certain basic principles govern voting in this country: people can be assured that no one can tell for whom they voted; they can be certain that when they put their ballot paper in a ballot box they have voted: and when counting takes place, candidates or their agents can scrutinise the process. Can my right hon. Friend therefore give a guarantee that when people vote electronically it will not be possible to trace them or the person for whom they voted? Can people have a guarantee that when they have
    146
    voted electronically their vote will be received and counted, and how will the process be scrutinised by candidates and their agents?
    Mr. Raynsford: My hon. Friend raises a number of important issues that we considered carefully, along with the Electoral Commission, before authorising the pilots this May. Arrangements are in place to deal with the precise concerns that he raised, and will ensure the security of the ballot, the anonymity of the voter and the opportunity if necessary to challenge any allegations of fraud. We are keen that the polls should be conducted in the most rigorous and careful way, but we are also conscious of the fact that many people who show an interest in using electronic technology to exercise their vote perhaps would otherwise not vote. It is right to pilot such opportunities to test whether in fact we can extend opportunities and encourage more people to exercise their vote, while at the same time guaranteeing the integrity and secrecy of the ballot.

    West Coast Main Line
    Mr. Michael Jack: What policy the successor to Railtrack will have on the levels of investment for modernising the west coast main line. [49403]
    The Minister for Transport (Mr. John Spellar): That will be a matter for Railtrack's successor.
    Mr. Jack: In earlier exchanges on the west coast main line, the Minister asked for a degree of humbleness on the part of Opposition Members asking questions. May I suggest to the Minister in all humility that many of the problems reflected in those earlier exchanges focus on the problems brought about by his changes to Railtrack and the arrival of Network Rail? When can we expect a definitive statement that will spell out precisely what is to happen on the west coast main line in terms of train capacity, safety and rail closure, and what is included in phase 1 and phase 2 of the development?
    Mr. Spellar: The right hon. Gentleman is right to be humble about the railways, as the Opposition have much to be humble about. If he had been listening to the full exchanges, he would have heard me say that discussions were taking place with all the parties about how the system can evolve to achieve progress on the west coast main line. In view of the mess that the Conservatives left, the right hon. Gentleman should understand that that will take a considerable time, not least because we have steadily been finding more and more deficiencies in the previous practice of Railtrack. He should not only be humble; he should be blooming well ashamed of it.

BILL PRESENTED
  ANNUITIES (COMPETITION)
  Mr. Frank Field presented a Bill to require pension providers to provide information from the Financial Services Authority on annuity rates to all holders of personal pensions policies which allow the purchase of an annuity from any provider: And the same was read the First time; and ordered to be read a Second time on 19 July, and to be printed [Bill 123].

Alcohol Services
3.31 pm
Ross Cranston: I beg to move,
That leave be given to bring in a Bill to require local authorities and health authorities to provide alcohol services in their areas to address the needs of people with alcohol problems, to produce joint five-year strategic projections and annual service evaluations and plans; and to establish joint commissioning arrangements in their areas for the purchase of alcohol services.
There are two background features to the Bill that I should mention briefly. The first is the extent of problem drinking and its social and economic costs. Too many people are drinking well over the recommended limits; indeed, a recent survey indicated that just over a quarter of adults aged 16 to 74 are hazardous drinkers, the highest proportion being those aged 16 to 24 years.
As well as the deaths and illnesses directly attributable to alcohol abuse, there are the indirect effects on the health of the nation—for example, one in seven people killed on the roads and one in 20 people injured are involved in drink-drive accidents. In addition, there are the alcohol-related crimes. The British crime survey in 2000 found that incidents in and around pubs and clubs accounted for nearly one in five of all violent crimes.
I shall say no more about the problems of alcohol abuse. There is an Adjournment debate in Westminster Hall tomorrow and I know that a number of hon. Members want to explore them on that occasion.
The second background feature to the Bill is that alcohol care services throughout the country are under severe pressure. Services are shrinking in number; most services have static or declining levels of funding; and the present sources of funding are not secure. Moreover, alcohol care services are patchy; there is a postcode lottery in availability, range and quality. One current problem is the haemorrhage of skilled staff to drugs agencies as a result of the greater priority and Government funding given to them for the expansion in drugs services. There are therefore high levels of unmet need, especially for early intervention and preventive services. That is showing up in the higher level of alcohol-related admissions to accident and emergency units and to acute and chronic in-patient services.
Four years ago the Government announced that they would publish an alcohol strategy, and two years ago they said that they would implement it by 2004. Unfortunately, other pressing priorities have meant that the strategy has yet to be announced. The upshot is that there is uncertainty about the future of alcohol services. Local authorities are not prioritising alcohol issues in their community strategies, local public service agreements and crime reduction strategies. Without a lead from the centre, primary care trusts are not always clear how to proceed.
The Bill seeks to address those problems in alcohol care services. The understanding behind it is that the Government will use their own favoured system of solving such problems, which they have used successfully in other areas. Specifically, the Bill calls for the inspection and regulation bodies—the Commission for Health Improvement and the National Care Standards Commission—to investigate each part of the country, report on deficiencies in alcohol care services and make recommendations. They would examine whether there was adequate coverage and availability of high-quality alcohol care services in every locality.

149
The best way for the Government to make that work is to issue a national service framework for alcohol care services, which would set standards and models of care, provide a proper implementation structure and ensure that mainstream NHS and local authority money is directed to those services. That would provide the benchmarks against which the regulatory agencies would carry out their inspections. In addition, the Bill builds on the existing roles of local authorities.
I hope that if the House gives leave to bring in the Bill, it will agree on consideration that its approach has advantages, as it fits with Government policy in devolving responsibility for purchasing to primary care trusts and requires no new administrative machinery.
In summary, the Bill provides the implementation machinery for the Government's alcohol strategy. There is an urgent need to put the authority of the regulatory bodies behind a serious initiative to create a nationally adequate and reasonably secure system of alcohol care provision. Without an adequate system of early-intervention alcohol services, other Government policy goals in law and order, employment, productivity, social exclusion and education will not be achieved. An adequate system of alcohol services will save money across the public services as a whole, as well as addressing the social needs of many of our citizens.
Question put and agreed to.
Bill ordered to be brought in by Ross Cranston, Mr. Kelvin Hopkins, Mrs. Marion Roe, Bob Russell, Mr. Russell Brown, Jon Cruddas, Mr. David Amess, Mr. David Drew, Mrs. Betty Williams, Mr. Sioôn Simon, Rev. Martin Smyth and Fiona Mactaggart.

Alcohol Services
  ALCOHOL SERVICES
  Ross Cranston accordingly presented a Bill to require local authorities and health authorities to provide alcohol services in their areas to address the needs of people with alcohol problems, to produce joint five-year strategic projections and annual service evaluations and plans; and to establish joint commissioning arrangements in their areas for the purchase of alcohol services: And the same was read the First time; and ordered to be read a Second time on Friday 19 July, and to be printed [Bill 124].
Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [22 April].

  AMENDMENT OF THE LAW
  Motion made, and Question proposed,
  (1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
  (2) Subject to paragraph (3) below, this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  (a) for zero-rating or exempting a supply, acquisition or importation;

  (b) for refunding an amount of tax;

  (c) for any relief, other than a relief that—

  (i) so far as it is applicable to goods, applies to goods of every description, and

  (ii) so far as it is applicable to services, applies to services of every description.

  (3) Paragraph (2) above does not exclude the making of amendments with respect to value added tax providing for relief on the acquisition from another member State of any goods in relation to which, if they were imported from a place outside the member States, relief would be given by an order under section 37 of the Value Added Tax Act 1994.—(Mr. Gordon Brown.)
  Question again proposed.

Budget Resolutions and Economic Situation
3.38 pm
The Secretary of State for Health (Mr. Alan Milburn): Mr. Speaker—[Interruption.] It gets better—[Interruption.] Oh yes. [Interruption.] Opposition Members are in a frisky mood today. Before I start, I have to draw the attention of the House to the fact that Budget resolution No. 6, as it now appears on the Order Paper, has been slightly amended. In the course of finalising the drafting of the biodiesel provisions—[Interruption.] I should be grateful if there were no interventions on this one. It became apparent during that process that it would be clearer if excise duty on blends of biodiesel and diesel could be dealt with as a separate item and not under existing powers to make orders relating to fuel substitute. The changes in the proposed resolution enable that to be done. [Interruption.] I hope that that is clear. If there are technical questions, my right hon. Friend the Chief Secretary to the Treasury is here, thank God.
Last week, my right hon. Friend the Chancellor of the Exchequer announced a Budget for enterprise and hard-working families, and above all, a Budget to put the national health service on a sustainable footing for the long-term. It deals with funding not for a single year, as used to happen when the Conservative party made Budgets. It is a Budget not even for three years, but for five years, so that the national health service can plan ahead with confidence and stability for the long term. After years when the economy veered between boom and bust—[Interruption.] I knew that that would get

151
Opposition Members going. After those years, this Budget is built on the sure foundations of the economic stability that we have created.
Conservative Members often claim that there was a golden legacy, but the legacy was far from golden. Inflation had peaked at 10 per cent; interest rates had peaked at 15 per cent; borrowing for just one year stood at £50 billion; the national debt had doubled; and 3 million people were out of work. It is this Government who ended that mismanagement of our economy.
Mr. Desmond Swayne: On the legacy and health service reform, only a year or so ago, the Secretary of State said that it was vital that the NHS remain the monopoly supplier of medical services so long as a Labour Government were in office. It is only recently that he has changed his tune, and although I welcome that change, the difficulty is that we have had five years of very little reform.
Mr. Milburn: That is completely untrue. In fact, Conservative Members argued with me for four or five years that we needed better ways of ending the lottery of care in the national health service. That is why we created the National Institute for Clinical Excellence, a reform which they opposed. They argued that we needed tighter inspection systems, so we introduced the Commission For Health Improvement, which they opposed. They argued for greater devolution, so we invented primary care groups and primary care trusts, which we can now take further. I would argue that all those aspects of reform are delivering services for patients.
Chris Grayling: If the Secretary of State has devolved power to primary care groups, why does my local group have to deal with 380 different targets set by central Government? How does that help patient services?
Mr. Milburn: In terms of standards, it is important that we get the balance right. The hon. Gentleman would be the first to complain if cancer patients in his area did not receive the same standard of service as those in other areas. The need to get the balance right is true of every health care system in the world, but what has characterised the national health service for 50 years is that the balance has been wrong. There has been too much centralisation and not enough decentralisation, and we can now put that right.
On taking office, our first job was to put the economy and public finances on a sure footing. Today, we have the lowest inflation in Europe, an employment rate higher than any of our major competitors, the lowest unemployment for almost 30 years, and interest rates that have not been lower for almost 40 years. Our opponents warned that the minimum wage would cost 1 million jobs, but in fact, there are 1.5 million more jobs in the economy than when we took office.
None of that has come about by chance. It has happened because of the choices that we have made: new fiscal rules, Bank of England independence, and new programmes to create jobs and make work pay. All those initiatives were introduced by this Labour Government,
152
and all were opposed by the Conservatives. Every time we were making the right choices for Britain, they were making the wrong choices. Tonight, when they vote against this Budget, they will get it wrong again. They will vote against the biggest sustained growth in resources that the national health service has ever seen. Over five years, investment will grow in real terms by an average of 7.4 per cent. a year.
Mr. Julian Brazier: May I return the Secretary of State to the subject of the Commission For Health Improvement? Its recent report on acute hospitals in East Kent is damning of management beyond belief. It condemns them for failing to take lessons on board, and for failing to make essential communications with medical and nursing staff, whom it commends and describes as overworked. Does he intend to rubber-stamp proposals to waste a fortune reorganising hospitals in east Kent, or will he reconsider them and listen instead to many local commissions, all the local branches of the Royal College of Nursing and four out of six local councils, which recommend that the proposals be thrown out?
Mr. Milburn: I shall of course consider the commission's report. As the hon. Gentleman is aware, we are looking very carefully at the situation in his area, and it is true that problems exist there. Although they are partly the result of changes in the make-up of local services—he has been raising that issue with my hon. Friends for some time—they are also partly the product of a shortage of resources. The question for the hon. Gentleman this evening is whether he is prepared to back this Budget and the extra investment in it. He cannot make such complaints and then vote against the extra resources.
Mrs. Angela Browning: The Secretary of State read out a list of credits for which he claimed ownership for the Government. Will he take ownership of the fact that, under new Labour's stewardship, as a nation we have dropped from ninth to 19th in the world competitiveness league; for the fact that our exports have been in deficit every month for the last four years; and for the fact that productivity growth, which used to be higher, has now slowed? When he hears those things or fails to mention them, does he hear a warning bell in his head that perhaps things are not going to get better after all?
Mr. Milburn: The hon. Lady's claim would have more credibility if in her constituency and those of her right hon. and hon. Friends employment was not up; if unemployment was not down; if there were not more people in work with better protection, a minimum wage and a working families tax credit; and if the economy was not doing better than our major competitors in Europe and across the developed world. The country is moving forwards, not backwards, and the hon. Lady should have the honesty to acknowledge that.
For the benefit of the House, it is worth putting the new resources for the national health service in perspective.
Mr. David Tredinnick: Will the right hon. Gentleman give way?
Mr. Milburn: It is not about complementary medicine, is it?
Mr. Tredinnick: The right hon. Gentleman is ever generous in giving way. It does happen to be about that.

153
I just wanted to ask him whether he intended to include in his package anything that would bring in some of the 60,000 complementary therapists to increase the supply of practitioners in the health service? If he did so, he would have an automatic 15 per cent. increase in people who could treat patients. I beseech him earnestly to consider that issue.
Mr. Milburn: We continue to examine complementary therapies and complementary medicine, but as I have said to the hon. Gentleman before, I cannot take such decisions: they must be taken by the clinicians. [Interruption.] I do not know whether the hon. Gentleman is demonstrating part of the therapy that he advocates. He cannot have his cake and eat it. He cannot say that we should do more and then, when we do, argue that it is centralisation. Nor can he say that we should do more and then argue, and vote, as he will tonight, against the extra investment in the national health service. If he wants an extension of mainstream medicine and other therapies, he must accept that the NHS needs extra resources. I urge him to vote with us in the Lobby tonight.
It is worth comparing this five-year Budget with the five years between 1992 and 1997. Now the NHS will grow by 7.4 per cent. in real terms, whereas then NHS budgets rose by 2.7 per cent. a year in real terms. Social services funding, which rose in that same period by less than 0.5 per cent. a year, will now rise by 6 per cent. a year in real terms.
David Taylor: Does my right hon. Friend acknowledge that the laudable targets in the NHS plan will fail if social care is inadequately funded? Although the extra £300 million that was announced in the Chancellor's Budget last week is most welcome, there has been a long period of chronic underfunding that has led to a gap of at least £1 billion in local authority social services budgets. In that context, how does it help to penalise local authorities for things for which they are not responsible, such as the crisis in residential care in some areas?
Mr. Milburn: I do not accept what my hon. Friend says. In any terms, these increases in funding for social services are very generous. It is worth recalling that social services budgets rose by less than 1 per cent. in real terms before this Government came to office, whereas they are now rising by 3 per cent. in real terms, and we are about to double that to 6 per cent. in real terms. It is absolutely right that social services have the opportunity to use those resources wisely and well. If I know social services, they will use the new incentives to improve and expand the range of services for elderly people.
Dr. Evan Harris: I accept what the right hon. Gentleman says about poor funding in real terms up to 1997. Is he aware of the figure for real-terms growth in social services, which he and his predecessor controlled between 1997 and 1999? He will not find it in the Wanless report, because those two years are missing. Does he accept that it was less than 0 per cent. in real terms, and that we are now paying the price, as his hon. Friend the Member for North-West Leicestershire (David Taylor) has just acknowledged?
Mr. Milburn: The hon. Gentleman is like a broken record. He has only one tune and it is always the same—
154
"More, more, more." However much we give, he always wants more money. He has to accept that when we came to office the public finances were out of control, inflation was back in the system and interest rates were rising. All those had to be sorted out.
We could not make the investment in our public services until we had achieved stability in the public finances and the economy. Frankly, if the hon. Gentleman and his party had been in office, we would have experienced precisely the veering between boom and bust that occurred when the Conservatives were in power, because they would not have had the discipline to do what was necessary to sort out the public finances.
Dr. Liam Fox: May I explore the detail of the point made from the Back Benches by the hon. Member for North-West Leicestershire (David Taylor)? If the changes proposed by the Secretary of State are introduced this year, and given current bed blocking in the NHS, what is the Department's estimate of the cost to local government?
Mr. Milburn: I am not sure that I have a figure for that off the top of my head.
Dr. Fox: You should have.
Mr. Milburn: Well, what I do know is that since we put extra resources into social services on top of the 3 per cent.—the extra £300 million that we distributed in November last year—delayed discharge from hospital has been falling. In September last year, about 6,400 elderly people were needlessly in hospital when they were ready for discharge but there was not adequate provision in the community. Today, the figure is about 4,700, but we must get it down further. To do that, we need not just more investment but reform of the system.
Frankly, as I go round the country—the hon. Member for Woodspring (Dr. Fox) must find this, too—I see that there is a lottery as to whether health and social services can work together in partnership. Basically, that relies on good relationships locally. I do not believe that elderly people, people with a mental health problem or people with a disability should have to rely on happenchance as regards whether a local authority and an NHS trust want to work together. There should be a positive incentive to ensure that they work together.
Mr. Bill O'Brien: My right hon. Friend is making an important point about the relationship between local social services departments and the health service, and the changes will provide a better service for the elderly and the chronically sick and disabled. Will he consider the representations made by SIGOMA—the special interest group of municipal authorities—and, as we need that co-operation between the health authorities and the social services, meet SIGOMA representatives to discuss the progress that can be made in that relationship?
Mr. Milburn: Either the Minister of State, my hon. Friend the Member for Redditch (Jacqui Smith), or I would be extremely happy to meet representatives, and we shall of course discuss the detail of the proposals, but it is worth bearing in mind the fact that the hon. Member for Woodspring, who is the first to suggest that we should look abroad to other parts of Europe for the solution to

155
all the problems in the NHS, might have reminded the House from the Dispatch Box that the proposal that we are discussing for England is precisely that which has worked in Sweden, Denmark and other countries. It has brought delayed discharge from hospital—the misery of so-called bed blocking—down to much more acceptable levels. The hon. Gentleman is always urging us to look abroad, except in respect of policies that we are implementing at home.
Jim Knight: I fully support the reform of the system and the Secretary of State's commitment to delegate the responsibility, but I am sure that he accepts that there is concern about whether there will be sufficient resources to fulfil that responsibility, particularly in counties such as Dorset, which are attractive retirement areas and where there is extreme pressure on the care sector. Can he give me any reassurance about those retired communities?
Mr. Milburn: Clearly we need to ensure that the resources are targeted to the right places and my hon. Friend will be aware that we are reviewing the distribution of resources not only for the NHS, but for social services. Most hon. Members accept that neither the SSA system for distributing local government finance, nor the system for distributing NHS resources, is quite right. I hope that, as we review the system, we will be able to take into account exactly such problems as my hon. Friend has described.
Geraint Davies: Is my right hon. Friend aware of the MORI poll in today's Financial Times? It shows that the tax and health package proposed by my right hon. Friend the Chancellor makes this year's Budget the most popular for 25 years. People do not think that the Budget will necessarily be good for them, but they recognise that it is good for the country's health service and economy. They do not want to return to an era of failure and cuts, which is what a Conservative Government would bring.
Mr. Milburn: My hon. Friend is absolutely right—as is the MORI poll, I suspect. My right hon. Friend the Chancellor has done the right thing by the country, although it was not necessarily the easy thing. He has raised the resources to secure the investment needed to put the NHS on a sustainable long-term footing. Even now, I ask Opposition Members contemplating voting against the Budget this evening to think again. It will not be credible for them to stand up in the Chamber—still less in their constituencies—and argue for more resources for their local services if they are not prepared to back investment across the whole health service.
Mr. Alex Salmond rose—
Mr. Gregory Barker rose—
Mr. Bill Wiggin rose—
Lynne Jones rose—
Mr. Milburn: I have given way a lot, and I will give way to the hon. Gentlemen later. For now, I give way to my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones).
Lynne Jones: I thank my right hon. Friend. Of course, everyone is pleased about the extra money being made available for the NHS, but there are ongoing concerns about resources for social services. Budgets in that sector are overstretched, and there are not enough places in care homes and nursing homes. Is not my right hon. Friend worried that a policy of fining local authorities over cases of bed blocking may mean that vulnerable people in the community miss out on services? The perverse result could be a rise in emergency admissions. Will my right hon. Friend take that into account as he develops the policies?
Mr. Milburn: First, of course safeguards must be built in. We can no longer allow people's discharge from hospital to be delayed unnecessarily—and neither can we accept a big growth in emergency readmission rates to hospitals. My hon. Friend will have seen in the Command Paper that we issued last Thursday that we intend to ensure that the proper incentives for the NHS and for social services are in place to prevent that.
Secondly, I can assure my hon. Friend that we have examined the question of funding very carefully. The Government have accepted that social services investment must be increased to the extent that is proposed because the Department argued that that is how much is needed to do what needs to be done with regard to services for children and care services for the elderly. The first task is to stabilise the care home market, and expand care home places. In some parts of the country, local authorities will have to decide how to use the extra investment. Increasing fees for residential care homes, for example, will be a matter for local authorities. However, we must also expand the range of provision, and not assume that every old person must end up in a residential care home. Many will want to, but many others will want to retain independence for as long as possible. It is therefore important to make certain that the resources exist to ensure that care is available in care homes, and in people's own homes as well.
Mr. Ian Davidson: I welcome the extra money being given to health—so much so that I am now thinking very seriously about voting Labour at the next election.
Is my right hon. Friend the Secretary of State aware of the Arbuthnot report, which proposed that additional money should go to Scotland, and to Glasgow in particular? The city has the worst health record in the UK. The Arbuthnot report was not implemented in previous years because that would have meant taking money from other parts of Scotland. Does my right hon. Friend agree that now that new money is being made available more can go to Glasgow without anyone else suffering, and that it is now possible for Glasgow to get the health care that it needs? [HON. MEMBERS: "Good question."] Thank you.
Mr. Milburn: My hon. Friend has not heard the answer yet.
I am aware of the Arbuthnot report, but it is a matter for the Scottish Parliament, not for me. In England, however, we have an opportunity to address the dreadful health inequalities that are a scar on the face of our country, both by ensuring that we get the right investment to the right parts of the country and by waging an unrelenting war on the diseases that kill the most people

157
in this country—cancer and coronary heart disease. We have made a start; now we have the opportunity to do much, much more. We have made a good start and we need to build on it.
Essentially, the Opposition's grounds for voting against more investment in the NHS are two. First, they argue that putting resources into the NHS does not yield results; in fact, it does. Secondly, they argue that resources are not being matched by reforms; in fact, they are.
Chris Grayling rose—
Mr. Milburn: I have given way about a dozen times, so I shall give way to the hon. Gentleman later.
I want to test each of the Opposition's propositions. First, they say that resources do not produce results. Yes, there are problems in the NHS at present; they are long-standing problems, brought about by failure both to invest and to reform. No one but a fool—and, of course, Members on the Liberal Benches—could believe that a few years of extra investment would put right decades of underinvestment. The difference between the Labour Government and Conservative Governments is that we are both investing and reforming. Waiting lists rose by 400,000 in the years until 1997, but they have fallen by 100,000 during the years since.
Waiting times are falling, too. The number of people waiting more than 12 months for a hospital operation has fallen by one third in only one year. The number of people experiencing long waits for an out-patient appointment is the lowest on record. The total number waiting for an out-patient appointment is lower than when we came into office. For those with the most serious clinical conditions—cancer and coronary heart disease—waiting times are even lower.
Last year, there were 11 per cent. more heart operations and 13 per cent. more cataract operations. Since 1997, the NHS has been treating over 700,000 more in-patients and over 1 million more out-patients.
In primary care, the prescribing of cholesterol-lowering drugs is up by one third. Tens of thousands of patients are receiving the latest drugs to combat cancer, heart disease, Alzheimer's disease and arthritis. In the past year alone, death rates from cancer fell by 2 per cent., and from heart disease by 5 per cent.
Where do Opposition Members think those improvements came from? They did not come about through the invisible hand of the free market. They did not happen by chance, but because of the choice that the Government made to put extra resources into the NHS. Of course, it is true that the NHS is still feeling the effects of decades of underinvestment. It is true that patients wait too long for treatment and that we still have staff shortages. At present, however, the NHS is the fastest-growing health care system in any major country in Europe.
To those who suggest experience abroad as a lesson for our country, I point out that while health spending as a share of national income is falling in France and Germany it is rising in Britain. Decades of neglect are being put right. Resources are beginning to produce results, and because of the Budget we can finish what we started.
158
The Opposition say, secondly—
Mr. Wiggin rose—
Mr. Milburn: The hon. Gentleman is in a different place, but he does not fool me—unless he is the first successful experiment in human cloning.
Dr. Fox: The clones are all behind the right hon. Gentleman.
Mr. Milburn: I hope not, for all our sakes. I give way to the hon. Member for Leominster (Mr. Wiggin).
Mr. Wiggin: I am grateful to the Secretary of State—I shall change my seat more often, although not in the same way as my predecessor.
The Secretary of State will be aware of the extraordinary situation in Herefordshire—not only because I have written to him about it but because I have raised it on other occasions in this place. Today, as he revels in his largesse, provides him with an excellent opportunity to tell not only the House but the people of Herefordshire that he has listened to what they said and that he is aware that the new hospital to be opened in the autumn will be 120 beds short of the number in the previous hospital. As he knows, the primary care trust said that it requires £6.5 million a year.
Mr. Milburn: More money?
Mr. Wiggin: Indeed—£6.5 million a year. While the Secretary of State is asking us to vote for his Budget, perhaps he will take this opportunity to confirm that the primary care trust in Herefordshire will get that £6.5 million a year and that we can have our extra 120 beds.
Mr. Milburn: It is no use raising those issues with me; the hon. Gentleman should raise them with the shadow Chancellor, who tonight will urge his Back-Bench supporters to vote against extra investment in the NHS, not just in Herefordshire, Kent, Avon or Essex, but throughout the country.
The hon. Gentleman now sees the horns of the dilemma on which the Conservatives find themselves: they say that the health service needs more investment, but they are not prepared to commit more investment. They say that they oppose the sources of the extra investment, but they are not prepared to identify new sources of investment. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) nods. I suggest that the hon. Member for Leominster dodges around again and goes to the Front Bench to whisper in the right hon. and learned Gentleman's ear and get him to change his mind.
The Opposition say that there is no reform, but the Budget is every bit as much about reform as it is about investment. The NHS plan, which we published in July 2000, is our 10-year programme for change—national standards, more devolution, greater flexibility among staff and more choice for patients. Last Thursday, I set out in the House and in the Command Paper that we published the next steps that we will now take on those NHS plan reforms.

159
The opponents of the NHS say that reforms can never be made. They say that the NHS cannot offer patients choice because it is not a market. They say that it cannot be sufficiently accountable to members of the public because it is funded from general taxation. They say that it has to be centralised, so stifling local innovation, because it is a public service.
We say that, with the right programme of investment and reform, the NHS need not be a market, but it can offer patient choice; that it should remain tax funded, yet it can be more accountable; and that it can retain its ethos of public service, yet devolve and diversify its services. So alongside the investment will come a strengthened system of inspection and audit to improve accountability to patients and taxpayers. Where more resources are going in, people have the right to know what they are getting out.
Greater accountability will be accompanied by more devolution. Hospitals will he paid by results, through a new system of financial incentives that will give more rewards to those who can treat more patients, more quickly and to higher standards. Social services will also be paid by results—an issue that hon. Members have raised with me—so we will put in place new incentives to end the misery of bed blocking.
For the first time, patients will be able to make informed choices about when and where to be treated. We will start this summer by offering choice to patients who need heart surgery. As capacity expands, choice will grow for more patients. By 2005, patients, with their GPs, will have choice over the location of their treatment, as well as the timing of their treatment.
The hon. Member for Woodspring cannot bring himself to say that those are radical reforms because to do so he would have to acknowledge that the NHS is capable of being reformed. That is not what Conservative Members have in mind. They do not want to reform the NHS; they have decided to reject the NHS—not that they are yet ready to say in public what they say in private.
Only this weekend on the BBC, the right hon. and learned Member for Folkestone and Hythe told John Humphrys:
"We haven't got a plan yet. And if we did have a plan, John, you'd laugh me out of this studio."
The Conservative party has spent months on study tours and city breaks, but as I reminded the hon. Member for Woodspring on Thursday, the purpose of travel is not to travel but to arrive. So when he gets to the Dispatch Box, he has got to do more than show us his postcards—he has to outline his prescription.
The truth is the hon. Gentleman has made up his mind already, as we know from what he told the Conservative Medical Society in Harrogate a few weeks ago. Of course, he felt that it was safe to speak then because it was, as he said,
"a secure environment to float ideas without having to read about them … in the Daily Mirror."
I have here a copy of The Mirror of 11 April 2002—it is not very flattering, as it describes the hon. Gentleman as
"DR. Death"—in which his speech is extensively quoted. He outlines his four-step strategy to break the NHS. Step one:
"persuade the public that the NHS is not working";
160
step two: convince them that it has "never worked before"; step three: tell them that it "will never work"; and step four: get more people to "self-pay" for their own care.
That is the strategy that the Conservatives have been implementing. That is why they say that NHS staff treat patients worse than dogs. That is why they dismiss every step in the right direction. That is why they distort every issue. And that is why we will expose their strategy for what it is. It is denigration for a purpose—a cynical attempt to destroy the bond of trust between the British people and the British health service.
Chris Grayling: Can I take the right hon. Gentleman back three years to the Chancellor of the Exchequer's previous Budget announcement of £40 billion of extra spending on public services, including a substantial chunk for the national health service? If the NHS is the vehicle to deliver better health care, why have we seen no signs at ground level in our constituencies of improvements as a result of that extra spending?
Mr. Milburn: The hon. Gentleman obviously lives in a parallel universe.
Chris Grayling: I see problems every day of the week.
Mr. Milburn: Of course there are problems in the national health service; we acknowledge that. I do not pretend that everything is perfect, but the hon. Gentleman should not pretend that everything is hopeless, because it is not. The NHS is growing and expanding. Numbers of nurses, doctors and beds are up; waiting lists and waiting times are coming down. Yes, of course there is a long way to go, but the only way to ensure that we continue to make progress is to get in the investment alongside the reforms.
As I said to the hon. Gentleman before, if he is concerned about the national health service, what will he do tonight to support it now that he has an opportunity to do so? No one should pretend that if we want world-class health care in our country it can come without being paid for.
Mr. Ivan Henderson: May I welcome the investment on behalf of pensioners in my constituency? Under the Government's plan, my pensioners will not pay a penny, whereas under the Conservatives' plan they would have to pay—if they could find an insurance policy that would insure them.
Before 1997, two community hospitals in my constituency were threatened with cuts by the Conservative Government. Will my right hon. Friend assure me that this Government will give the investment to primary care trusts that will allow those community hospitals to deliver services for elderly patients at the nearest point to where they live?
Mr. Milburn: That is precisely what we propose. When we came into office, GPs controlled about 15 per cent. of overall NHS budgets. Today, through the primary care trusts, they help to control about 50 per cent., and over the course of the next two years they will control 75 per cent. Indeed, if we can go further than that, we should do so. The money should be out there on the front

161
line, controlled not by politicians or by civil servants, but by front-line doctors, nurses and local patients and members of the public.
On my hon. Friend's first point, he is absolutely right. The choice about funding health care is not whether we pay more for improved health care, but how we pay it. The right hon. and learned Member for Folkestone and Hythe and the hon. Member for Woodspring both acknowledged that we need to put more money into our health care system; there is consensus on that. The issue is how best to do so. The choice is not between one system funded through general taxation, which might result in higher national insurance contributions, and another system that comes for free. Every health care system in the world has to be paid for.
Conservative Members are in danger of arguing that the grass is inevitably greener on the other side. Yet when they look at social insurance systems in France and Germany, they will see that although more investment has been going in, it has been going in for decades. The costs of importing the German system would be the equivalent of approximately £1,000 per worker a year; the French system would cost around £1,500 per worker a year. That is the problem with social insurance.
I shall outline the problems with private health insurance; the hon. Member for Woodspring has form on that. I do not know whether he will advocate it, but he knows that it means increased bureaucracy, decreased efficiency and heightened inequity. The British Medical Association review stated more than a year ago that
"on the grounds of both equity and efficiency retaining a centrally tax funded system which remains essentially free at the point of use is preferable to introducing other systems."
There are good reasons for saying that the case for a tax-funded NHS is stronger than ever. In a world where health care can do more but also cost more than ever, providing care according to need rather than according to ability to pay is the best insurance policy in the world.
Conservative Members like to pretend that we have a closed mind on learning lessons from other countries. That is simply untrue. Of course there are lessons to be learned from abroad. However, the first lesson is not to abandon our system of tax-based funding, and to make the right supply-side reforms. Our proposals on patient choice are therefore modelled on the success of that approach in the tax-funded health care systems of Denmark, Sweden and Norway.
Payment by results and output-based funding are founded on experiences not only in Scandinavia, but in Australia, Austria, France and Germany. Our plans to reduce delayed discharge, which the hon. Member for Woodspring seems to have taken against, are modelled on those in Sweden, Denmark and Norway. Models similar to foundation hospitals exist throughout Europe, whether in Sweden or Spain. Diagnostic and treatment centres are increasingly common not only in this country but in the United States.
The difference between the Government's approach to lessons from abroad and that of the Conservative party is that we have sought to learn lessons to strengthen the NHS, whereas Conservative Members look for excuses to undermine it. Why else do they refuse to learn the big lesson from countries such as France, Germany, Denmark or Sweden? It is that better health care requires more resources alongside effective reforms. Those countries do
162
not have a superior system but a superior level of funding for health care. In the Budget, we apply the lessons that we have learned.
By contrast, the Conservative position frankly lacks principle and credibility. Conservative Members say that health care needs more resources, but refuse to say how much. They say that they will not back our sources of extra investment, but refuse to explain where they will get the resources. They say that the NHS must be reformed but refuse to outline their programme of reform.
There is only one conclusion. Today's Conservative party does not want the NHS to expand, but to decline. Conservative Members do not want a one-nation service, but two-tier health care. When they claim that they want the NHS to be reformed, they mean that they want it to be abandoned.
Labour Members say that that is not the right way forward for health care in our country. Tonight we will vote for investment plus reform. We will vote for increases in funding, but improvements in performance; we will vote to put more in, but demand to get more out. Tonight, we will vote for the NHS. We will do that with our heads as well as our hearts.
4.18 pm
Dr. Liam Fox: I agree with one comment in the Secretary of State's speech. There is much in the current debate on health care on which both sides agree. He is correct that we agree on the need to spend more on health care in the United Kingdom—however the money is raised—and that it should be available to all, irrespective of ability to pay. I go further. I agree with the Secretary of State's comment that
"what we need to see over time is actually more diversity and more plurality in the health care system."
I hope that he was serious when he said on Sunday that private management might well run national health service hospitals by the next general election.
There is undoubtedly a growing appetite for a genuine debate about health care in this country, and I welcome that. The Conservative party will make proposals on organisation and funding, and I should be surprised if they were not vigorously debated in the House and beyond. Many other systems are worth examining and most of them lead to better cure and survival rates and shorter waiting times than the NHS. The Secretary of State is right; in many ways, the grass is greener on the other side, and that is what we would like to see on this side as well.
The Chancellor would have us believe that there is a simple choice between the NHS and a US-style insurance model. That is a completely bogus argument. A whole range of systems of funding and structure shares this country's values of availability to all, irrespective of ability to pay, and delivers to poor and vulnerable people better quality health care than those groups receive in Britain. Just to set the record straight with the Secretary of State, I spent part of my time as a medical student studying in the United States, and I do not find the United States an attractive alternative model for health care in the United Kingdom. I believe, however, that the experiences of a number of other countries could lead to improvement here.
Those arguments are for another time, however. Today, we are discussing the Government's plans for our NHS in the Budget and the reform package. It is the beginning of

163
their sixth year in office. We ask whether they offer real hope of improvement or whether, in the Chancellor's terms, the scale of reform matches the scale of his tax and spending plans.
Andy Burnham: The hon. Gentleman says that he has an open mind on the future financing of health care, but is there not mounting evidence that he has, in fact, made up his mind? I refer to a message sent to me by the NHS Confederation about a conference that the Conservative party held. It states:
"Last week … we joined a group of think tanks … at a Conservative Party seminar designed to help them with their policy formation. Many believed that the NHS needed to be dismantled and replaced by a variety of competing providers and insurers."
Has not the hon. Gentleman made up his mind?
Dr. Fox: I understand that the term "think tank" is entirely alien to new Labour. The whole point, when at an early point in opposition, is to bring together groups such as the NHS Confederation and the King's Fund—which I am sure the hon. Gentleman would not regard as having closed minds or being outrageously right wing—so that we can have a proper debate about these matters, in a way that the Chancellor is clearly trying to preclude in his own party. They came because we wanted to take soundings from a wide range of those involved in health care provision.
Mr. George Howarth rose—
Mr. Salmond rose—
Dr. Fox: I will give way again in a moment.
The Government would like us to believe that this is not the beginning of their sixth year in office but year zero for their health policy, and that if we only give them just a little more time, all will be well. They have already been in office for five years, however, and their record is hardly one to shout about.
Let me remind the Secretary of State what the real NHS looks like. We have seen the loss of 50,000 care home beds, a bed-blocking crisis, and record numbers of cancelled operations, hospital infection rates, and readmission rates among the elderly, many of whom are sent out of hospital early to make the statistics look better. We have also seen the clinical distortions arising from the Government's flawed waiting list policy.
Of course, there have been good things, too. The establishment of the Commission for Health Improvement, in particular, is a positive development. We shall wait to see whether the new primary care trusts achieve the benefits promised. When the Labour Government came to office, and when they were re-elected, they were promising more than just some improvement. Let us remember that they had 24 hours to save the NHS. That has now turned into the Prime Minister's aim to have it basically fixed by 2010. They promised us world-class public services by the next election, so it is only reasonable for us to expect them to have met some of the targets that they have missed so far.
Mr. Howarth: I want to take the hon. Gentleman back a few minutes in his speech. Most people would
164
accept that, at this stage in the political cycle, it is not unreasonable that the Opposition should look around and consider what policies are appropriate for them to adopt. I would certainly accept that. In the unlikely event of the Conservatives winning the next election, it would take them 12 to 18 months—perhaps even longer—to implement any new proposals. People find it perplexing at this stage in the political cycle that, in the absence of any meaningful proposals of their own, the Conservatives are not prepared to accept the Budget proposals of my right hon. Friend the Chancellor, and the proposals of my right hon. Friend the Secretary of State for reform and increased funding. The hon. Gentleman is incoherent rather than enlightening—
Mr. Speaker: Order.
Dr. Fox: The choice for the Opposition on these occasions is simple. We are weighing up whether we think that the costs and benefits of the Government's proposals are sensible. The costs are certainly high in terms of both reducing personal income and increasing costs to employers, which will result in a loss of competitiveness in our economy. We have to balance that against whether we think that the Government's plans for reform will deliver. It is our judgment that they will not deliver what the Government promise and so our position is entirely justified.
We are looking not only at what the Government promise, but at what stage they should have reached according to their timetable of reform. They promised that they would achieve a set of benchmarks on the way to the 10-year NHS plan and it is reasonable for us to see whether those have been met. They promised us that more NHS patients would be treated in the private sector. They boasted in December last year of a done-and-dusted deal with the BUPA hospital at Redhill in Surrey. We now find out that nothing has been signed. So much for a done-and-dusted deal.
Before they were elected, the Government promised us an end to the indignity of mixed-sex wards, but patients still have to endure that humiliation five years into their Administration. They promised free nursing care, but it turned out not to be free because it was capped at £110 a week. They promised that by April 2002, 35 per cent. of trusts would have electronic patient record systems, but that is the case for only 3 per cent. They promised more capacity and less bureaucracy, but there are 12,000 fewer beds than when Labour came to office in 1997 and they have managed to increase the number of administrators to 1.15 for every bed in the NHS.
The Government told us that they had met the promise for patients waiting more than 15 months, with only two patients across the country now waiting for that long. When the Secretary of State announced that achievement, we were inundated with telephone calls, e-mails and faxes from people up and down the country wanting to know who the other person was.
Mr. Salmond: All that being so, can we return to thinking the unthinkable? What was the truth behind the leak in The Mirror? The hon. Gentleman is a fair-minded man and he must accept that his comments on the NHS read pretty badly. Was he lured into saying something he did not want to say? Was he tricked in some fashion? What was the truth behind that story?
Dr. Fox: The same newspaper said:
"Today is a very good day to bury Alan Milburn"
when one of the Government's figures was published that did not suit it. Not only were my comments made at a fringe meeting, but it was open to everyone, including the press. Only The Mirror would believe that that was part of a closed conspiracy. As several people, including the Labour party's press officer, were present, I am surprised that it took The Mirror an entire month to get a world exclusive.
Before, during and just after the Budget statement, it became increasingly clear that Ministers have a new lexicon. They have learned the language of reform, but what lies beneath that language? Are the soundbites made to please the private sector and the right-of-centre press, or do they have substance? There is a huge suspicion that the Chancellor has agreed to part with the cash before the plans to spend it have been finalised. Of course, that story has probably been planted by the Treasury so any failure will be blamed on the Secretary of State and will not interfere with the Chancellor's main agenda.
On Sunday, I wrote to the Secretary of State setting out a number of questions that illustrate the problems that arise because of the lack of detail in the Government's proposals. It will ultimately be the detail that matters in terms of whether the Government deliver on their programme. I asked: if money is to follow the patient, what new information technology systems will be required? Will money automatically follow any patient who wants to be treated outside their geographical area and, if so, what say will the PCTs have as they are now nominally independent? If hospitals are to be paid by results, what will happen to those that achieve no stars under the Government's rating if patients refuse to go there? What effect will that have on their funding and will they, or parts of them, be forced to close? That is an extraordinarily important question.
If patients choose to be treated in a private hospital or overseas instead of by the NHS, which has been mooted by the Government, will the entire NHS benchmark funding go with them, or will strings be attached? Will private companies competing to treat patients at nationally fixed rates be required to meet the same terms and conditions of employment for their staff as the NHS? Will the new auditors have powers to audit or inspect hospitals abroad that are treating NHS patients and receiving British taxpayers' money?
The subject of the auditor gives rise to other important questions. It will take time to introduce that office through primary legislation, time to get it up and running and time for it to report. By our reckoning, the very earliest that such a body will be able to report to Parliament is 2005. The body set up by the Chancellor to guarantee to monitor how our taxes are to be spent will not be able to report to Parliament until after the money has been spent. Once again, we are being entirely hoodwinked by spin and a false calendar—[Interruption.] As my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) says, only after the next election will the body be introduced that will tell the voters how their extra taxes have been spent. What makes the difference to the provision of care is not how one audits and monitors but how one spends the money, and it is on that point that we intend to hold the Government to account.
166
Much has been said in this debate about opinion polls. It has been suggested that there will be much in which the Government can take comfort in the short term. This is the most popular Budget since 1977, according to the hon. Member for Croydon, Central (Geraint Davies). Oh, he has already left the Chamber—hard lines for him, but no sadness to the House. I shall just remind the Government what happened in the aftermath of that Budget. We saw Chancellors arriving at Heathrow airport, having been humiliated by the International Monetary Fund; we had the winter of discontent, and the Government were thrown out of office. If that is the precedent that the hon. Gentleman wants to follow, I am sure that we can live with that.
The clear message from pre-Budget and post-Budget polls is that there is public scepticism about the direct link between spending and outcome. There is no doubt that it is possible to spend more, much more, without success. Scotland, Wales and Northern Ireland all have spending levels per head which are much higher than those in England and, indeed, above the European average, but waiting lists in Wales and Northern Ireland are much longer than those in England, with rates of 23.7 and 33.2 per 1,000 respectively, compared with only 21.2 per 1,000 in England. Waiting times in Scotland are going up.
No one believes that with the increased cost of medical science, improvement can come without any increase in spending. Historically, health care has been underfunded in the UK compared with many of our European neighbours. The Secretary of State is entirely right about that, but it is worth pointing out that UK spending fell below the European average not in 1979 but in 1963. For all but 18 months of my life we have been falling behind our European neighbours, and when the Labour party tries to say that that is entirely as a result of Conservative Government, I have to point out that Labour was in office for 16 of those years. We clearly need a higher level of debate about attracting funding as well as about how we organise it.
We need to ask ourselves two questions. First, how do we best spend any available money to produce the best quality health care? Secondly, how much can we afford to spend? Unfortunately, the Government have those questions the wrong way round, and they have decided how much to spend before they have decided how to spend it. It was that mistaken order of priority that saw spending double in the 1990s, under both parties, and increase by £18 billion after 1998. Yet we still see increasing numbers of elderly patients trapped in hospital beds, A and E patients treated on trolleys or even on the floor and a recruitment and retention crisis among health professionals.
Nowhere in the NHS is that manpower crisis seen more clearly and nowhere is the challenge greater than in my previous area of general practice. One of the Government's central promises was that they would recruit 2,000 more GPs by 2004. They are already falling well behind that target, but I wonder how many hon. Members, even on the Government side of the House, understand quite how far. In 1996–97, the increase in whole-time equivalent GPs in England was 111. By 1998–99, that figure had fallen to 71 throughout the whole country, and in both 1999–2000 and 2000–01, the increase in England was 18.

167
The Government will no doubt argue that the number of trainee GPs has increased, which is correct. The number of fully trained GPs going into general practice, however, has gone down. The problem is even worse than it looks at first glance—16.5 per cent. of all GPs on 1 November 1992 qualified in overseas medical schools and roughly two thirds who were practising then will have retired by 2007. Not only will that have a disproportionate effect geographically, because of their distribution, but many of those doctors will work close to the retirement age of 65. When they are taken out of the statistics, the alarming revelation is that most UK-qualified doctors are retiring at the age of 58. Not only will the increase in the number of GPs come nowhere close to the Government's fantasy target of 2,000, but it is entirely possible that it will remain entirely static over the period in which the Government said that there would be a huge increase. There is nothing in this Budget to help the morale of the country's hard-pressed GPs.
Linda Gilroy: Will the hon. Gentleman give way?
Dr. Fox: If I may, I shall quote from a letter that appeared on the letter page of The Times yesterday. A GP wrote:
"I am also self-employed within the NHS. As a result (in common with other GPs) some of my staff costs are reimbursed. In 1990 the Government paid 70 per cent. of these costs, now this figure is creeping below 50 per cent. To add insult to injury, not only am I being penalised personally to fund my employer but I will have to pay more on behalf of my staff as well."
If the hon. Member for Plymouth, Sutton (Linda Gilroy) can tell me how taxing NHS staff more will help recruitment and retention, I would love to hear the answer.
Linda Gilroy: As the hon. Gentleman is highlighting the shortage of doctors, will he apologise to his constituents, my constituents and those of all hon. Members, given that it takes seven years to train one?
Dr. Fox: The logic of the hon. Lady's question is rather dubious, as the Government constantly trumpet the increased number of GP trainees. By her definition, all of them must have started their medical education under the last Conservative Government. If there is an increase in the number of trainees, that is nothing to do with the Government. The problem with the Government is that those trainees do not want a career in general practice because morale is constantly undermined by interference from politicians in clinical freedom. GPs have less ability to do what they think is right, and they are now being taxed more into the bargain, notwithstanding the fact that they are more likely to be sued. All those elements contribute to general practice being much less attractive as a career, and responsibility for most of them lies at the door of the Secretary of State. I suggest that the hon. Lady saves her questions for the wind-up this evening.
The Secretary of State told us this afternoon about the Government's closed mind. We have had many indications of what he described as their closed mind. That is perhaps the most disappointing aspect of the Government's policy. To make matters worse, the Chancellor's closed mind was forced on the Department
168
of Health. The Wanless report, which was held up as a great independently minded tome, was simply used as a smokescreen to raise our taxes. Its conclusions could have been written in advance, and its contribution to the health debate was minimal at best.
That closed mind, which the Secretary of State mentioned, prevents the Government from dealing with four of the biggest problems in the national health service. For all the talk, it remains hugely centralised. Devolution, which was written and directed in Whitehall, is a sham. The primary care trusts will have their budgets decided by the Secretary of State. He will set the budgets, decide the performance targets and withhold funding as he sees fit. Labour's concept of earned autonomy is an oxymoron; it means that people can do what they like, but only if it is what Labour likes. The system also remains hugely politicised. Far too many appointments are made according to political allegiance rather than health expertise. Since the introduction of the so-called independent Appointments Commission, the number of appointments given to those who expressed an allegiance to the Labour party has gone up. The system is becoming even more politicised than it was when it was being criticised by Dame Rennie Fritchie only a couple of years ago.
The system also remains hugely wasteful. In case hon. Members think that I am bigoted in terms of what newspapers I read, the Sunday Mirror—the Chancellor's fanzine—pointed out this week the loss of
"£9 billion down the drain every year in the NHS … £2 billion because of bedblocking or late-cancelled operations … £1 billion because of infections caught in hospitals; £400 million on clinical negligence; £300–£600 million on wasteful prescribing and over-priced drugs: £100 million on avoidable management costs."
Given the Treasury's intense interest in the content of the Mirror group of newspapers, I presume that the Chancellor is hugely concerned by those figures.
Perhaps most worrying is the Government's failure to deal with lack of choice in the NHS. All too often in the NHS, patients are seen to service the system, rather than the system being seen to exist to service the patients. What the Government mean by choice is extremely unclear. The Secretary of State told the House:
"Within three years, all patients, with their GPs, will be able to book hospital appointments at a time and a place that is convenient to them."—[Official Report, 18 April 2002; Vol. 383, c. 716.]
Yet by this weekend, on "On the Record", that unambiguous promise had been diluted into:
"if the Primary Care Trust and if your local GP and you yourself as a patient decide … There are a lot of ifs about this—decide that what you want to do is to be treated in that hospital, then providing it's got the capacity that's fine."
Little wonder the public are so hugely sceptical, when what Ministers say one day is translated into something entirely different another day. [Interruption.] The Secretary of State says that it is obvious that capacity is essential. We all acknowledge that—so why did he make a promise that he knew he could not fulfil, given the failure of reform up to that point?
Since the Budget, desperate Ministers have described the NHS as the world's best insurance policy, so let us examine the case for that assertion. The first reason why the NHS is not the world's best insurance policy is that consumers cannot tell whether they are getting value for money. In Germany, whose system the Secretary of State

169
so deprecates, consumers can compare the prices of sickness funds and if they do not like what they see in one, they can choose another. We in this country have no idea how much of our tax goes to the NHS because of the Chancellor's rejection of hypothecation. Secondly, people on middle incomes cannot tell whether they are paying enough to assist the poor because we know too little about access and outcomes. Thirdly, the payment we make to the Treasury does not guarantee us any power of choice. Fourthly, the NHS is a state-run monopoly with no real competition.
Let us imagine telephoning the world's best insurance company for car insurance. We might be told, "We can't say how much it will cost you—we'll take an unspecified sum directly from your pay packet each month. Although we will promise you fully comprehensive, high-quality, universal coverage, we won't detail what rights you have to expect that, and if you make a claim, we might not get around to the repair for 15 months, especially if your car's an older model, and even then you'll have no choice of repairer." How long would such a company stay in business?
Clive Efford: The hon. Gentleman is fixated on people on low incomes, but when we talk about a universal insurance policy, we have chronic illnesses in mind as well. Can he tell me about one insurance policy that covers chronic illnesses?
Dr. Fox: The German social insurance policy ensures that people get access to chronic disease management far better than they get in the United Kingdom. The Chancellor says that we cannot even consider other systems because of the effect that they would have on the poor and vulnerable. I say to him, go to France, Holland or Germany and see what happens to the poor and vulnerable of those countries—they get far better quality care than people in many parts of the United Kingdom.
Clive Efford: Will the hon. Gentleman give way?
Dr. Fox: No. The hon. Gentleman had his chance and he blew it.
We will, no doubt, engage in much further debate on how we finance health care, but the way in which money is spent must take priority.
Helen Jones: Will the hon. Gentleman give way?
Dr. Fox: No. I will not gibe way again.
There are real doubts about the NHS's ability properly to absorb spending increases of such magnitude within such a time scale. The Conservatives will continue to examine the ways in which other countries organise and fund their health care, to see what lessons we can learn for the sake of the people of the United Kingdom. As the King's Fund puts it:
"It is time to stop making heroic promises, and buckle down to the unglamorous detail of building a good-enough health system for the 21st century."
The Labour Government will ultimately live or die as a result of their success or failure in producing a world-class NHS by the next election—[Interruption.]
Mr. Deputy Speaker (Sir Alan Haslehurst): Order. I am sorry to interrupt the hon. Gentleman. It is no good
170
hon. Members baying at a Member addressing the House; the hon. Gentleman will indicate if he is prepared to give way. He has said that for the moment he is not.
Dr. Fox: It is entirely characteristic of the party with no arguments but lots of volume to adopt such an approach in the House. It knows, as do the voters of this country, that the Government will ultimately live or die as a result of the success or failure of producing not good, not better, but world-class health services by the next election. We will monitor their performance; we will support them when we think that they are right, and produce alternatives when we think that they are wrong. The push for deeper reform must continue. The life and death of the Government is one thing, but failure to reform is a matter of life and death for our fellow citizens and is of a completely different order of magnitude.
Several hon. Members rose—
Mr. Deputy Speaker: Order. I remind the House that Mr. Speaker has imposed a 15-minute limit on Back-Bench speeches.
4.45 pm
Mr. Piara S. Khabra: The arguments of the shadow spokesman on health were baseless. Under Conservative rule, the national health service in my constituency was completely privatised; people found it difficult to get any service at all because of Conservative policy. I am sure that people know that the Conservatives will pursue such policies again.
My hon. Friends and I were pleased that the Budget moved us to the next stage of our agenda to improve public services. During our first term in office, it was essential to stabilise the economy and provide a sound economic footing for the reforms and improvements in health and education that we promised. We undoubtedly achieved that, despite the shock to economies around the world caused by the 11 September attacks. Last year, the British economy was the fastest growing of those of the Group of Seven rich nations. The Chancellor consequently judged that we were in a position to put significantly more money into our public services to compensate for years of underinvestment, which was worst during the 18 years of Conservative rule.
It is not just the Labour party that believes that investment in services has been inadequate for a number of years. An economic survey by the Organisation for Economic Co-operation and Development published in November said that, thanks to fiscal consolidation in recent Budgets, there is room to address what it describes as
"a poor quality of public infrastructure"
derived in part from a "long period of underfunding".
The health service is set to be the main but by no means the only beneficiary of that extra funding, with a cash injection of £40 billion by the year 2007–08—a rise of over 40 per cent. in real terms—to be funded largely by an increase in national insurance. The Chancellor considered that the fairest means of funding improvements. Some people, including the Conservatives, have criticised that as a stealthy way of raising income tax, but a rise in income tax would have hit pensioners the hardest, which we did not want to do if at all possible.
Chris Grayling: Will the hon. Gentleman give way?
Mr. Khabra: No, I do not have much time.
Undoubtedly the amounts pledged on health spending are huge, and the Chancellor has made some optimistic assumptions about the levels of growth necessary to fund the increases. However, optimism is not the same as recklessness; the Treasury team has been remarkably accurate in its forecasts. In its conclusions on the Budget, Deloitte and Touche argues that the Chancellor's optimism on growth will probably be vindicated.
Increased Government spending on health has already contributed to improvements in my constituency, and I have noticed that people have benefited from that. Ealing, Hammersmith and Hounslow health authority in my area secured an extra £225,000 from the Government to help people stop smoking, and smoking cessation clinics are now open in all three boroughs covered by the health authority. Extra funding has also helped the health authority to spend £625 million on hospital, community and health services in 2002–03, compared with £472 million in 1998–99. That is the result of more money being given to the health service.
The Wanless report offered an insight into the scale of the task ahead, with enormous improvements necessary in buildings, equipment and information technology. The British Medical Association, reflecting on the scale of the increase in funding, said that there was "real hope" for improvement. However, as the chief executive of the Patients Association pointed out, extra money is all well and good, but it needs to be invested properly. The Chancellor made that clear to the House on the day that he presented his Budget.
I welcome the announcement of an annual statement by a commission for health care audit and inspection, which will soon be appointed to inspect and comment on how the extra cash is being spent. I am pleased that the commission is to be independent of both the NHS and the Government and that it will report annually to Parliament rather than to Ministers. I hope that Conservative Members will be pleased to see that happen as soon as possible.
The problem of wasting the extra money will not be an easy one to overcome, but it is essential that we avoid the possibility that, as The Economist put it, the NHS will
"gag on the huge quantities of money being stuffed down its throat"
as we seek to make improvements.
The Conservatives have attacked—
Chris Grayling: Will the hon. Gentleman give way?
Mr. Khabra: May I finish?
The Conservatives have attacked the increases in taxation generally and the method of funding the NHS specifically, yet they have failed to respond convincingly when asked how they would fund investment and how the NHS would be different under a Conservative Government. They have failed miserably to answer those questions, even today in the House. Their retort so far has been that they are still developing their agenda for the NHS. The public have no idea when they will have completed that.
Dr. Fox: I am grateful to the hon. Gentleman for giving way. The point was best made for the Opposition some time ago, when it was said:
"Time for reflection is necessary because the political landscape will alter over the next five years. There is no point in our debating whether our policies were right for"
the last election
"because we will not be asked to fight"
the last election "for a second time." Those were the words of John Smith. It was wise advice to the Opposition and we will stick to it.
Mr. Khabra: That may be the hon. Gentleman's view; it is not mine. It is all very well for the Opposition to adopt such a view, but a Government in office must present a Budget each year and make decisions and commitments. The Government cannot simply wait and see. The Opposition have the luxury of engaging in debate without having to put real proposals before the House and say what they would do if ever they had the opportunity.
The other charge made against the Government—that Labour is returning to tax and spend simply for taxing and spending's sake—is ridiculous. I do not believe that we are in danger of crippling the public with tax rises. As we have seen over the past five or six years, the noises from the Opposition Benches have had no effect at all on the economic position of the country. There is more money in people's pockets.
Chris Grayling: Will the hon. Gentleman allow me?
Mr. Khabra: No.
It is true that taxes have risen under Labour, but they have not risen nearly as dramatically as some people imply. For example—
Mr. Barker: Will the hon. Gentleman give way?
Mr. Khabra: Let me continue.
For example, figures released by the OECD last year show that the tax burden of income tax plus employee contributions as a percentage of gross income was lower than in our main European competitor countries, which is a record. The burden was also slightly lower than in the United States. Indirect taxes undoubtedly increase the tax burden further, but I think that many people will be surprised about having lower percentages in comparison with those of other nations. As Martin Wolf, writing in the Financial Times, pointed out, the headline-grabbing tax increases in this year's Budget still amount to less than 1 per cent. of GDP over the next four years.
With regard to other provisions in the Budget, I feel that the Chancellor has introduced some useful changes. For example, in respect of small businesses, which are many and diverse in my constituency, I welcome the measures to ease the impact of VAT as well as the penny cut in corporation tax rates for small businesses. I am sure that many small businesses in my community will benefit and will be able to contribute more to the development of the economy as a result.
I also hope that my constituency might benefit from the new community tax credit, which is intended to support enterprise and investment in disadvantaged areas such as mine. Southall in particular is feeling the strain of a high

173
number of asylum seekers and other immigrants—I make this point for the attention of Front Benchers—in increased pressure not only on housing, but on education and environmental services. That pressure is worrying my constituents in the Southall area, which has been completely neglected in terms of new money. I hope that the Government will make extra investment in such places a priority and that the Treasury will take them into consideration. Areas such as mine are prone to ethnic tensions, and there is already a deterioration in people's living standards.
One aspect of the Budget with which I was a little disappointed was the failure to close the tax loophole that allows foreign business men who are resident in Britain to avoid paying tax on much of their income. That is the point that Ministers should take on board after this debate. We were right to be critical of the loophole when we were in opposition, and I should like all those who can afford to pay their way in taxes to contribute. We should not be one of the few nations that lets the problem happen.
Despite that concern, I broadly welcome the Budget proposals and the shift in emphasis from stabilising this country's finances to investing in our future. Economic stability is essential, but it should not be an end in itself. It should have a purpose, and I believe that investment in our public services is a very worthy purpose, as the Chancellor emphasised in his Budget. If we want a health service that meets the expectations of the public, we have to invest, and he has committed himself to doing that. I am pleased that he has been brave enough to make the case for that investment in a Budget that is truly for the health of our country, and I am delighted that the majority of the public have supported the rise in national insurance contributions. They fully realise that money has to be made available, and the Chancellor considers national insurance the best way of raising it.
I congratulate the Chancellor of the Exchequer on his popular Budget for investment in public services, and I shall vote for it tonight.
5 pm
Matthew Taylor: The House's formal debate on the Budget has almost come to an end, but I suspect that the debate outside—on the health service above all, but also on the Government's entire approach to public services since taking office, including the decisive change in the funding of those services—is in many senses only just beginning. We welcome that change, which we called for, but so far as the equivalent of a penny extra on national insurance is concerned, I am tempted to say that that was the longest wait to spend a penny in history.
The Budget is decisive for another reason: it has finally forced into the open the floundering position of the Conservative party and its attitude towards the national health service. We now know that it is a party with no arguments—a criticism that the hon. Member for Woodspring (Dr. Fox) levelled at the Government a moment ago. Of course, the Conservatives know only what they do not like, and they do not like the national health service. They cannot offer an alternative, yet they oppose the funding that would tackle the problems that patients face, while asking us to wait until who knows when for them to offer a solution.
Chris Grayling: Does the hon. Gentleman share my desire for a health care system that works and that has no
174
waiting lists, as in virtually every other European country? After a decade in which Conservative and Labour Governments have poured money into the national health service with few measurable results, is it not appropriate to consider whether lessons can be learned from methods used elsewhere?
Matthew Taylor: The hon. Gentleman should take a moment to consider the number of doctors and nurses available to the public in every other European country, and spending on their health systems. Various systems all have in common much greater investment and many more staff, which result in much better outcomes. At the front line, it does not matter whether doctors are paid for through a private health scheme, a social insurance scheme or national taxation, provided that they are available to patients. Under private insurance schemes, doctors are too often unavailable because patients do not have such insurance and cannot afford to pay. Under social insurance schemes, patients can be asked to pay more than they would pay under a national health system, or to make a direct cash contribution to treatment by their GP. In other words, such a scheme is less fair, more expensive and does not of itself deliver better care—unless one pays the staff to do the job.
Mrs. Browning: During the Budget debate and in the media, the Liberal Democrat spokesman on trade and industry has opposed the 1 per cent. employers' national insurance increase. Will the Liberal Democrats vote for that tax tonight?
Matthew Taylor: If the hon. Lady casts a glance at the Order Paper, she will discover that there is no such vote tonight, so the answer is that we shall not vote on it and nor will she. I shall deal with the issue that she raises in a few moments, which prompts me to move on a little.
Mr. Barker: Will the hon. Gentleman give way?
Matthew Taylor: I shall give way later, but I want to make progress. I did hope that, in giving way to Conservative Members, we might hear about their alternative proposal, but of course, they do not know what it is. They know only that they oppose the NHS, and no one will grant them credibility while that is so. Worse still, they are asking for no extra resources for the NHS—for the patients who need treatment today and tomorrow—because they believe that an alternative will come to them in a flash of intuition just before the next general election.
Mr. Barker: Will the hon. Gentleman give way?
Matthew Taylor: I told the hon. Gentleman that I want to make some progress.
The first test that we set for the Budget was the test of whether the Government would at last start to tackle underinvestment and underspending—a word that I want to reintroduce to the House. Matthew Parris sadly no longer writes his column in The Times, but he rightly said that the word "spending" has disappeared, and I want to use that proper word. We know that the Government have not been delivering on long-term capital investment. It does not suit the Conservative party to say that, so it does not expose the Labour Government's failure, which leaves them free to get away with cuts in investment.

175
The real figures show that public sector net investment from 1992 to 1997 was on average 1.5 per cent. of national income. Under five years of Labour, it has fallen to less than half that. That is why there is not enough investment in public services. In every year since 1997, public sector net investment has been lower than it was in 1995. Only in 2006–07 will it reach the same proportion of gross domestic product as in 1992–93. That is why public services are crumbling.
The Conservatives argue that there has been investment in public services, but that chucking money at the problem has not succeeded. The truth is that no money has been chucked at it, and this Government's record is even worse than that of the Conservative Government.
I want to deal also with spending and the direct day-to-day costs of investment in staff—the teachers, doctors and nurses who have to deliver the service. It is true that tax has risen as a proportion of GDP since 1997, but in 2000–01 total spending as a proportion of national income was lower than in any year of Tory Government between 1979 and 1997. That is true even if we strip out debt and social security. The Government argue that we are paying less on debt and unemployment, but that is not the answer. Labour chose to follow Conservative cuts in the early years, and the later spending increases did nothing to balance that out. At first they were mythical, and even when they eventually arrived they were so late that they were hardly in time for the general election campaign.
Linda Gilroy: Does the hon. Gentleman believe that the Peninsula medical school, which is about to open its doors to its first students from Plymouth, Devon and Cornwall this September, would have been built had the Tories remained in power? Will he acknowledge the fact that such significant ventures are under way in the south-west peninsula?
Matthew Taylor: The hon. Lady argues that the position would have been worse under the Conservatives, and I am sure that it would have been. I doubt that the Conservatives would have reversed the cuts, as Labour started to do at the end of the last Parliament.
Mr. Edward Davey: Two wrongs do not make a right.
Matthew Taylor: As my hon. Friend says, two wrongs do not make a right.
The biggest problem identified in the Wanless report is the growing gap between the number of doctors who will be in place and the number that we need. That gap will grow even after the late investment that Labour has made in training more doctors. That investment should have been made when Labour first came to office. I suspect that the hon. Lady agrees with me, and would have liked the Government to have taken those decisions five years ago. Many Labour Back Benchers wanted them to do that.
Linda Gilroy: Will the hon. Gentleman give way again?
Matthew Taylor: I want to move on, and the hon. Lady may find that I will answer her point. Many Labour Members privately agree with us that the Government's greatest error was to fail to make that investment early on.
Mr. Tom Levitt: Will the hon. Gentleman give way?
Matthew Taylor: I shall move on, and then I shall take some more interventions.
Average spending on pensioners was 4.4 per cent. of GDP between 1992 and 1997, but that has fallen under Labour to 4.3 per cent. for the period to 2003–04. Labour's pension credit, which it says is designed to relieve pensioner poverty, has an outstanding problem. The Chancellor, who likes to complicate the tax system, has delivered a change for pensioners that, sadly, will—like so much else that Labour has done—leave without many people whom the Government acknowledge are needy. On the Government's own figures, one in three of those entitled to the pension credit will not find their way through the complicated forms. Indeed, pensioners do not want to be seen to claim benefits to get the money that they need. The fact is that the Government have introduced a system that will means-test millions, but leave some 1.5 million people who are entitled to that pensioner support without it.
Average health spending between 1992 and 1997, when we, like many Labour Back Benchers, campaigned for change and the investment that the health service so obviously and badly needed, was 5.4 per cent. of GDP. In 1997, it was cut, and only after 1999–2000 did it begin to exceed the Conservative averages. Again, the cuts took years to retrieve—years in which patients suffered, doctors were not trained, the number of beds fell and hospitals closed. Exactly the same can be said of education. Average spending between 1992 and 1997 was 5 per cent. of GDP. Under Labour, all the way forward to 2003–04, it still averages only 4.8 per cent.
The fact is that Labour failed to invest. Now we come to the excuse, which we heard from the Secretary of State, "Oh, we had to balance the economy. We inherited an economy with huge deficits and problems." That is true. Taxes rose and spending did not, because Labour spent most of that money on clearing the deficit—the £20 billion every year that the Conservatives spent but did not pay for through taxes. In that process, the Conservatives were, of course, wrecking the economy in the long run. Labour may have put that right, but because it allowed itself no tax rises for health or education, it left health and education cuts in place.
Mr. Barker rose—
Mr. Levitt rose—
Matthew Taylor: I shall finish my point and then give way to both hon. Members.
In fact, the situation is worse, because Labour released funds and the Chancellor found money. What did he find it for? Tax cuts. We are told that Labour could not spend extra money because it was not there, but a penny came off income tax. Although the measure was hugely unpopular, the Chancellor made that choice; it is the very penny that Labour has in effect put on the national insurance system.

177
What else did we see in the run-up to the general election, only just over a year ago? The Chancellor announced some £3.6 billion of tax cuts for this year and £4.2 billion for next year, describing them as
"tax cuts we can afford".—[Official Report, 7 March 2001; Vol. 364, c. 308.]
The Secretary of State for Trade and Industry described them as prudent.
The money was there, but Labour believed those on the Conservative Benches who said, "You can't win an election if you promise tax rises. You can't win an election except by bribing the electorate with their own money." Labour was wrong. It should have told the truth: first, invest the money, which was there, then turn the NHS around and present to the electorate the case that Labour now makes—the money must be found.
Mr. Levitt rose—
Matthew Taylor: I shall give way to the hon. Gentleman, because I want to ask him some questions. Does he honestly believe that, just a year ago, the Chancellor had no idea that taxes would have to rise now? Between 1997 and 2001, how was the Chancellor able to change his position from being able to pledge no national insurance rises to being unable to do so if he did not know that he had to increase taxes? How could he ask Wanless to report on NHS funding if he did not know that there was a problem with it?
If the Chancellor knew all those things, why did he cut taxes just before the general election and refuse to admit during that election that he would increase them? Indeed, only months later, he has announced that taxes must increase. We do not disagree, but Labour should have been honest enough to say that it would happen. Perhaps the hon. Member for High Peak (Mr. Levitt) was honest enough to say so in his constituency.
Mr. Levitt: I am grateful to the hon. Gentleman for allowing me to answer. Of course my right hon. Friend the Chancellor looks to plan for the future—that is why the changes in national insurance contributions come into force next year, and not this year, as the hon. Gentleman seems to suggest. It is a matter of planned investment over a number of years.
I want to return the compliment and ask the hon. Gentleman a question. Does he honestly believe that it would have been possible and sustainable to have a capital programme in the NHS of the size that is proposed in the Budget at a time when inflation was three times the current level, and interest rates were twice what they are now? That is what the Government inherited. Moreover, in their early years they had competing priorities, such as paying for 2 million unemployed.
If the Government had tried to embark on an investment programme of this scale in 1997 they would have been doomed to fail because of the economy's underlying weakness.
Matthew Taylor: I would agree with the hon. Gentleman had the Government at the time tried to spend borrowed money, but the Chancellor has now admitted that the strategy was wrong because the money could have been found through taxation. The Liberal Democrat party
178
was right to argue for an increase in taxes. The share of national income spent on services has had to be increased, and that could have happened five years ago.
In addition, I advise the hon. Gentleman to look again at the Wanless report. It shows that, even allowing for the private finance initiative contribution, the Government over the years have been investing less in capital terms than their predecessors. They have not exceeded Conservative spending in even one year.
I understand the confusion among Labour Back Benchers. They are being told two different things at once. They are told that, only a year ago, the Government had no idea that they would have to raise taxes and make the largest-ever spending increase in the NHS. However, the Sunday papers contain reports quoting friends close to the Chancellor to the effect that the Government have not changed strategy, and that this move was planned two, three or even 10 years ago. That latter figure means that, even in opposition, the Government knew that they would have to introduce these measures. It was all a matter of stealthily taking the public along with them. I can understand why Labour Back Benchers might find it hard to interpret the different briefings that they get from different members of their Front-Bench team.
Mr. Barker: A little time ago, the hon. Gentleman mentioned the myth that it was the Chancellor's prudent management of the economy that reduced the national debt. That is a canard. The reality is that the reduction in the national debt was due overwhelmingly to the bubble in Internet share prices that pushed telecommunications, media and technology share prices to ridiculously high and unsustainable levels. As a result, there was a frenzied auction, at which the companies involved bid an unprecedented £22 billion. Even the Treasury thought that the amount that landed like a golden egg in the Chancellor's hands was ridiculous. That money accounts for the record fall in national debt, not some wonderful powers of economic management.
Matthew Taylor: I do not agree. Just a little distance behind and along from the hon. Gentleman is sitting someone who probably agrees with that analysis even less: the right hon. and learned Member for Rushcliffe (Mr. Clarke). The major reason why the Government were able to eliminate national debt was that they chose to follow his Budget plans.
Incidentally, I believe that the right hon. and learned Gentleman would agree that, if he had remained in office, he would not have followed the spending plans that he had set out, as his Government's annual spending review would probably have meant that spending would have gone up. However, the Labour Government decided to follow his plans and make real-terms cuts in spending. The cuts in social services spending, for example, are among the factors that led to the rise of the problem of bed blocking for elderly people who would be better off in nursing homes or residential homes.
The Labour Government got rid of the deficits incurred by their predecessors and balanced spending. However, in their early years, they did nothing but cut the public services that they had been elected to save.
I am glad that the hon. Member for Bexhill and Battle (Mr. Barker) intervened, because I want to turn my attention to the Conservative party. We cannot let

179
Conservative Members off the hook and say that they have no ideas about the NHS, for we know that, behind the scenes, they do have some ideas on the matter. Unfortunately, he is not present, but the shadow Chancellor has changed his use of language in the past few days. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) used to talk about the Stalinist NHS. He used to ask, "How can we expect it to work? It is a Stalinist creation". That is an odd view of history because the NHS developed from the ideas of a Liberal, but we shall put that to one side.
The shadow Chancellor used to say that the NHS was a Stalinist creation but now he says, in new softly modulated tones and with an expression of complete reasonableness, "We support extra investment; we are not going to vote for it, but we support it. We want an NHS that works. We do not actually believe in it, but we want it to work." The word "Stalinist" no longer passes his lips.
I hoped that the right hon. and learned Gentleman would remain in the Chamber because I wanted to ask him whether he still believes that the NHS is a Stalinist creation. In fact, it is clear that a focus group has told the Conservatives to stop saying what they think. They have stopped saying what they think about an even more fundamental issue. They have stopped their health spokesman saying anything about what he thinks. He is allowed to say it only to delegates at the Conservative conference, behind closed doors, but we know what it is. He believes that they need to run down the NHS, persuade people that it cannot work and then introduce self-pay. Self-pay means that people will not get treatment unless they can afford to pay for it. They will have to pay for it when they are sick rather than through taxes funding the health service. People who have the means will pay for themselves, instead of everybody contributing to a national health service. The Conservatives do not want to reform the NHS but to dismantle it.
Chris Grayling: The hon. Gentleman is no more a shadow Chancellor than Lord David Sutch was a peer.
Does the hon. Gentleman realise that many of my constituents have no choice but self-pay? The reality confronting them is that they must either wait a year for their operation or pay for it themselves in a private hospital. Does he think that that system is fair? If he thinks that it is not fair, why does not he share the desire of my party to consider every possible way of creating a better health care system in this country, rather than accepting the single option presented to us by the Chancellor?
Matthew Taylor: I agree that self-pay is unfair. That is why I oppose a system that would force people down the private insurance, pay-as-you-go route that the hon. Gentleman's Front-Bench colleagues seem to prefer. The hon. Member for Epsom and Ewell (Chris Grayling) is in a difficult position. We know that the Conservative party is prepared to look at any option apart from the system that we actually have—the national health service—and they are prepared to delay any investment until they have made a decision, even though such delay would cost today's patients the treatment that they need. Under Conservative policy, people will have to carry on paying
180
for treatment—if they can afford it; if they cannot afford it, they will have to carry on waiting. That is a wholly disreputable policy.
The reason that the Conservatives do not explain their policy publicly is simple: the public do not agree with it. In fact, the public hate it. They think that it is the worst possible idea and they are right. All the Conservative options would cost the public more and treat them less and, worst of all, later, because there would be delay in making the investment that is so obviously needed.
All the alternatives have one thing in common: they are more expensive and less fair. The Conservatives say that they have an open mind but they have closed their mind to saving the national health service.
Mr. Paul Tyler: In the interest of proportionality, it is time for a Liberal Democrat intervention.
Has my hon. Friend noticed that, in the opinion poll published in The Guardian today, such is the popularity of the Conservative party's opposition to the NHS that it has dropped five points?
Matthew Taylor: We shall have to see whether that continues. I noticed that most Conservative supporters favour the increase in spending so it seems unlikely that the party can make much progress on that issue.
Conservatives raise one issue in particular as a weapon in their argument that the money should not be spent: they say that there is no way of spending it effectively. I want to suggest some ways in which it could be spent not only effectively but earlier than the Government's plans would allow.
First, it is well known that thousands of NHS beds are blocked by elderly patients who are kept in hospital not because they need hospital treatment but because there is no funding either for the residential or nursing care that they need, or for support in their own homes. That is a real issue now and the money could be spent now. Throughout the country, social services departments, including my own in Cornwall, could make the investment to find places for those people if they had the money to do so. That needs to be done now, not in a year or two, because the doctors and nurses who support the people in those beds could be treating patients who need hospital care.
One of the biggest worries about Labour's plans—I do not know whether the Government did not think of this, or whether they simply had no answer—is that the very local government organisations that are expected to spend the extra money to find places for those people will be hit by a national insurance increase for their staff, so much of the extra funding for social services next year will be taken out by the back door no sooner than it has come in through the front door.
The Government need urgently to consider how they can release to local authorities the scale of funds necessary to allow such placements to be made. The funds need to cover not only the extra beds, but the increase in fees necessary to stop many residential and nursing homes closing because the current fees simply are not enough for them to keep their doors open. That is urgent: my constituency has lost four nursing homes in the past year or so because the fees that they can be paid are too low, even though Cornwall county council has substantially

181
increased them recently, at the expense of placing fewer patients. More needs to be done urgently. Conservative Members have argued for that, but they will not now agree to the means to pay for it.
Secondly, recruiting and retaining nurses is an issue. In many parts of the country, nurses have the training and skills to do the job, but they cannot afford to work in the NHS on the low pay that many—not all—nurses receive. There is now a reasonable pay scale, which starts to give nurses real rewards as they go up it, but pay is an immediate issue at the low end, especially for other professional staff in the NHS. That is why we budgeted for immediate pay rises for low-paid professional staff in the NHS, especially in areas of high housing cost. If hon. Members visit any hospital in the south-east, they will be told that there are trained nurses, but that they cannot be recruited on the salaries being paid.
The third immediate priority—again, Conservative Members need to pay attention to this—is massively to increase the number of people being trained. It takes five years to train a doctor, so things cannot wait one, two or three years, or however long it is until the next general election before the Conservatives decide what to do. We must start training doctors and nurses now, or no matter what system the Conservatives come up with, they will not be able to find the staff needed to look after those in the beds.
The Budget has at last delivered the increase for health on the scale that we called for and, very nearly, using the means that we called for, but we do not agree that the Government have chosen the best way to raise the money. We argued for the use of income tax. Instead of using employers' national insurance, the Government could have raised about the same amount of money with a new top rate of tax on earnings of more than £100,000 a year. That would have been fairer in its distribution and, unlike the Government's proposal, would not have hit jobs and manufacturing industry. That said, we want the increase in the NHS to take place, we will not stand in its way, and we charge the Government with spending that money well—none of which can be said of the Conservative party.
5.29 pm
Mr. Neil Turner: First, may I apologise to the House and to you, Mr. Deputy Speaker, because I should be attending a Standing Committee sitting that is scheduled to continue until 10 minutes to 10, so I may not be able to return to the Chamber to hear the winding-up speeches or the rest of the debate; I apologise to those on the Front Benches and to yourself.
Tackling poverty—whether child, family or pensioner poverty—has been a major Government target, and to the Government's eternal credit, we have also set out to tackle overseas poverty. Of course, much progress has been made. On child poverty, however we want to measure it, either 1 million or 0.5 million children have been lifted out of poverty following years and years of inexorable growth in the number of children living in deprivation.
We recognised that the best way to lift people out of poverty is to ensure that they get a job—the Yosser Hughes way; "Gizza job." One million extra people in work represents 1 million extra people out of poverty. It is not a matter only of putting them in work, but of protecting them once they are there. The minimum wage, trade union rights and protected working conditions
182
through the social chapter will ensure that their social needs are looked after as well as their economic needs. The Budget will build on that. This year, deprived areas such as Pemberton in my constituency will get additional help to ensure that the enterprise that lies within such communities can be released. However, even with the extra jobs, many deprived areas—not only Pemberton, but other parts of my constituency—will continue to suffer deprivation. Despite the protection of the minimum wage, far too many people are still on low wages, and skill levels remain low, leading to low attainment and low ambition, perpetuating the cycle of deprivation.
That cycle is further reinforced by the lack of collective wealth in such communities. People are not able to go and spend in local shops, thereby creating more wealth and jobs and improving the whole area. We need to pump more money into such areas to break the cycle. That is why the Chancellor's help through his support for enterprise, children and families is not only welcome, but essential.
However, that alone is not enough. The wages of poorer people comprise not only the wages that they get in their pockets through work or benefits, but what we used to call, and may still be called, the social wage. They cannot afford to send their children to private schools, to take out private medical insurance or to hire home helps to look after their parents or children when they are ill, as can people with much greater incomes. They depend on high quality public services even more than the average, because they have no alternative. They need good schools to lift their children out of declining educational standards, which were so evident in the Conservative years, and which we have addressed through the learning and skills promoted by the literacy and numeracy hours. They need better hospitals to give them better treatment, because they are poor not only in financial, but in health terms. They need the primary care facilities provided by GPs to ensure that the chronic diseases that are rife among people in deprived areas are treated. They need the protection provided by local authority social services. They need their environment to be protected so that they have access to clean air, clean water and the generally higher standard of life that exists in a better countryside. The vast majority of those services are provided locally.
David Taylor: Would my hon. Friend add to his list such people's need for higher standards of policing and tackling of criminality? Poorer people in working class areas are much more subject to the actions of criminals, which damage their lives far more than those of other sections of the community.
Mr. Turner: The list could almost be added to ad infinitum, but my hon. Friend makes a valid point.
Many of the services that I mentioned are provided not only by local authorities, but by police authorities and health trusts—primary care trusts and local hospital trusts.
If we are to eradicate poverty, the agencies that I mentioned need to be funded not only properly but fairly. That does not happen currently. The standard spending assessment and health funding formulae are manifestly unfair. I have heard the description, "postcode lottery of underfunding". The author of that term, the Conservative party, is guilty of a foul calumny because "lottery" suggests chance; it implies dealing a card, spinning a bottle or tossing a coin. That is nonsense.

183
The SSA was designed to discriminate. It was not envisaged that all local authority leaders would troop down to Queen Elizabeth hall every November to watch money being drawn out of a hat and to exclaim, "Oh look, Westminster's won yet again. What a surprise." The SSA was never meant to be a lottery; it was designed to ensure a shift of resources from deprived, Labour-voting areas and councils to Tory-voting councils. It achieved precisely that.
I do not doubt that pockets of deprivation exist in Wandsworth and Westminster, but they sit alongside areas of great wealth. Indeed, there are fewer than 150 houses in band H in the whole Wigan borough, which has 212,000 properties. There are streets in Wandsworth and Westminster with more band H houses than the whole of Wigan. Those authorities have the wealth to deal with deprivation, but what do they do with the largesse that they receive from the SSA that the Conservative party designed? Do they tackle their pockets of poverty with it? No. They use it to ensure low council tax rises year after year.
Chris Grayling: The hon. Gentleman obviously does not understand the pressures on many local authorities in the south-east, where housing costs have made it difficult to get teachers for schools and nurses for hospitals. Does he not realise that pushing up the council tax in those areas makes it more difficult for young teachers, nurses and doctors to stay there? Simply diverting resources to other parts of the country would mean that swathes of Britain could not man their public services effectively.
Mr. Turner: I do not understand the hon. Gentleman's point. Does he not accept that people in Wigan have the same problems in paying their council tax as people in Westminster? It is even more difficult in Wigan because our band D council tax is so much higher than that in Westminster and Wandsworth. Those boroughs also receive significantly larger amounts of money through the area cost adjustment, which is designed to deal with the hon. Gentleman's points.
The borough of Wigan includes the constituencies of Leigh, Makerfield and part of Worsley. I am therefore speaking not only about my constituency but those of my right hon. and hon. Friends. Our local education authority is acknowledged to be good; it has received three stars under best value and gets better results than its demographics would suggest. Despite that, 24.3 per cent. of people in the Wigan borough have no formal educational qualifications compared with 18.4 per cent. nationally. Yet the SSA for education places Wigan 134th out of 150 local education authorities.
Our social services received a superb social services inspectorate report, which describes joint working, joint budget, lead commissioning and service integration. It proves that Wigan is good at dealing with those matters. The report states:
"Wigan has the second lowest number of over 75 year old people waiting to be discharged from hospital, the second lowest percentage of older people delayed in acute beds and excellent performance in reducing 4-hour trolley waits …
184
Wigan has an above average spend on nursing placements for 75 year olds, but it also has the second lowest expenditure for each person aged 75 or over on home support."
In other words, it is an efficient authority.
Mr. Patrick McLoughlin: I did not catch all the hon. Gentleman's point, but he was talking about SSA. If he believes that it was designed specifically to help Tory areas and to damage Labour areas, why has it taken the Government so long to change it?
Mr. Turner: If we had come into office with an absolutely wonderful legacy from the Conservative Government, that would clearly have been a high priority. Unfortunately, we had an awful lot of problems to deal with, and we are now going to deal with this one. I shall come to that shortly.
Good things are happening not only in local government but in health. The clinical governance review has congratulated my local health authority on the way in which it has set up its primary care trust. The standard of health in my constituency is, however, exceedingly poor. We have tremendous problems with morbidity and mortality rates, which are well above the national average, but that is not reflected in the funding formula for health.
Unemployment is another area in which the formula does not accurately reflect the needs of a community. It takes a simplistic count of the unemployed, without taking into account those who are incapacitated, yet those are the very people who place huge demands on local authorities, social services and the health service. On a claimant count, Wigan has 4.2 per cent. unemployment and is 73rd most deprived out of 354 authorities. On income deprivation, it is ranked 30th out of the 354, and on employment deprivation, it is ranked ninth, reflecting the large proportion of people in the borough who are too ill to work.
None of those factors is accurately reflected by the formula, either for the local authority settlement or for health funding. No one doubts the need to raise individual incomes. A stable and growing economy is essential, and the measures in the Budget will assist that. Many people, however, do not—and never will—have the capacity to have a good quality, high-paying job. The individual enterprise that we want to achieve, particularly in deprived areas, has to be backed up by the collective provision of public services. That will be achievable only by funding regimes that rigorously reflect the real needs of communities, which are identifiable and measurable.
In response to the point made by the hon. Member for West Derbyshire (Mr. McLoughlin), the Departments responsible for health and local government are undertaking fundamental reviews of the funding formulae. I welcome the Secretary of State for Health's agreement to meet members of SIGOMA—the special interest group of municipal authorities—to discuss that issue. The additional money for health will provide the opportunity to speed up the equalisation process.
Solving the problem of poverty of the individual is essential, but if we do not take this opportunity to tackle the inequalities in public services such as health, education and social services, it will be a lost chance. We shall doom the individual to failure if we do not ensure that the means to tackle individual poverty and public service inequalities advance at the same rate.
5.42 pm
Mr. Kenneth Clarke: I refer the House to the interests that I have declared in the Members' register.
I see from this morning's newspapers that this is probably the most popular political U-turn that we have seen in modern history, or, certainly, for a very long time. It is certainly a very dramatic one. Prudence was being scorned last year, but her defenestration is now quite complete. This is a reckless return to a policy of tax and spend—spending on one service in particular—of a kind that was completely ruled out by the new Labour project only two or three years ago.
In the short term, the Budget has had a popular reception, but this is not the first time that I have said in a Budget debate that Budgets that have a popular reception in the short term do not have a good history either of delivering results or of remaining popular for very long. The Budget of 1977 has already been cited as an example of that. In 1987, I seem to remember sitting surrounded by people waving their Order Papers at Nigel Lawson's most popular Budget. The responses to both those Budgets presaged complete disaster, and I fear that something similar might happen if this country does not have some good economic fortune in the next few years.
I have some concern for the Chancellor; I feel a slight responsibility for the well-being of my successor. He and I have presided over 10 years of growth with low inflation. We have not had a negative quarter for 10 years, although the present Chancellor has had some damned close run-ins and has nearly got there. However, he has presided over the second and least distinguished half of that period. In the public interest, I should like us to maintain the combination of growth and low inflation. It is the essential pre-requisite for funding the improvement in our infrastructure and public services which the country deserves.
The economic judgments behind the Budget are deeply flawed. The prospects for the NHS, to which I will devote the second part of my speech, are undoubtedly not as rosy as they have been made to appear. The Government are making one of the mistakes that they have frequently made since coming to office: they are raising public expectations of what will be delivered to incredible heights. If the public feel as disappointed and cheated as they did at the last election, the Government could be in for a big surprise at the next election.
The politics dominate this Budget. All Budgets are political, but I cannot remember one in which the political presentation has so dominated the content. The Prime Minister and the Chancellor of the Exchequer were obviously both in a panic about the fact that they were having to break their election promises and raise personal taxation, which is what they have done. I agree with the hon. Member for Truro and St. Austell (Matthew Taylor) that the increase in the employees' national insurance contribution is the Liberal penny, which was so derided and ruled out at the last election. It is not enough to pay for the promised expenditure but it clearly breaches the public commitments that the Government gave in spirit and almost to the word.
I cannot remember such a cynical Budget since the mid-1950s or such a cynical move before and after election to office. I will not repeat the largely excellent speech of the hon. Member for Truro and St. Austell, but the Government cut taxation on the eve of the election
186
and then raised personal taxation on incomes as soon as they could in the next Budget. That ranks with the type of political cynicism that we have not seen for more than a generation.
Clive Efford: Will the right hon. and learned Gentleman give way?
Mr. Clarke: Not now, but I will when I deal with the NHS.
In order to make the personal taxation increase popular, the Government produced spending plans for one Department. It happened to be the very Department over which they were in a political panic—the one with responsibility for the NHS. The public rightly perceived that the health service had slightly deteriorated in the five years in which Labour had been in office. To sell the Budget and break the news about the penny taxation on income, it was necessary for the Government to bury the NHS under pound notes. No one had contemplated that that would happen to that extent over the next five years, but such expenditure is popular. However, the penny is not enough to pay for this, nor for a quarter of the other things that the Liberals constantly cite.
The penny on employees' national insurance is not the principal taxation increase in the Budget. The problem is the choice of taxation when the Government looked elsewhere to raise revenue. I was one of those Chancellors who always thought that taxes sometimes have to go up or down. I prefer low tax economies, but we make a ludicrous fuss trying to forecast what will happen to tax in future years. However, the Government chose a bad tax; they decided to put a penny on the employers' contribution to national insurance, rightly described as a tax on jobs.
The Government have been raising tax on business ever since they came into office. They have not just started doing that. They usually deny those increases and this time they have obscured the fact that they are raising tax on business. The effect on our competitiveness is too severe to contemplate if things get difficult for us and the Government carry on with their plans. We are losing one of our major advantages. I raised taxes when I was Chancellor—I had to in order to leave Labour the legacy that it inherited, which I would defend again now were I living in the past to the same extent as Labour Members. However, I avoided taxing business and lowered the employers' national insurance contribution to strengthen the recovery in the economy and to get back to the full employment that 10 years' growth has nearly achieved.
The other problem that the Government face, and which they obscure, is the fact that they have lost tax receipts. The pre-election estimates were completely useless. One of the things that the Chancellor mentioned en passant in his Budget speech was that the forecasts for tax revenues that he made last year were £10 billion out. His receipts were £10 billion less than he had forecast in the last Budget because of the slowdown in the economy, and that is why he had to raise taxation. Even then, the Chancellor could not raise taxation to the extent that was necessary. Last year, I predicted that tax revenues would fall short, and I predict now that more tax increases will have to be made unless the Chancellor goes in for real prudence before the next election because he has probably not raised enough for the spending that he is now talking about.

187
The Chancellor has gone back to old Labour practices to get round that problem. He has increased the estimates of growth, which carries shades of every failed Chancellor for the last 10 or 15 years. The Chancellor claims that he will be helped out because, he has discovered, we will have a faster rate of growth than we have hitherto enjoyed. I have to be amused because that is a complete reversal of the prudent Chancellor who took over from me and dourly reproved me for my excess of optimism in saying that trend growth was 2.5 per cent. in 1997. He reproved me for recklessness and reduced that figure to 2.25 per cent. By 1999, he had quietly slipped back to 2.5 per cent., but everything in the Budget in front of us is based on 2.75 per cent.
The Chancellor looks back at the 1990s, a time of boom internationally, and then he peers forward into the 21st century and says that it is going to be better and conditions allow us to assume that trend growth is 2.75 per cent. I do not believe that. I will not go on about the protectionism in the world, the uncertainty of oil prices and the uncertain nature of US recovery and so on, but for the Chancellor to say that he has suddenly discovered in this Budget that the outlook is that trend growth will be faster is plain folly, and I trust that nobody in the Chamber at least is taken in.
I propose to discuss health so I will not spend long discussing other large costs in the Budget. The Chancellor has slipped tax credits into the Budget, but he has not made a great performance about them. They are a huge extension to the benefits system, but he does not count them as such. He likes tax credits because he does not have to count them as public expenditure, but they have an enormous cost. I know that tax credits are very redistributive and family-oriented, but we now have a bizarre system in which means-tested credits are being extended to 90 per cent. of all families in this country, including those with earnings of £50,000 a year. They are filling in their forms to get their means-tested tax credits.
I am told that the Chancellor's public spending colleagues are very angry with him for his obsession with tax credits. I certainly would be if I were the Home Secretary or the Secretary of State for Health. That system is costing about £4 billion, and he is persevering with it in this Budget. It is an enthusiasm understood only by the Chancellor, but it is a very great burden on small businesses that have to administer PAYE systems and on the Inland Revenue, which has to pay out. The Financial Times described the situation as ludicrous, and I will not, at this stage, expand on that judgment except to say that I greatly agree with it.
To distract us from all those aspects of the Budget, we are meant to be talking about the fact that we are now looking at five years of huge expenditure on the NHS, so the Leader of the House has decided that health must dominate the last day's debate on the Budget. One service has mysteriously been plucked out of what was meant to be an orderly public spending round, and we are given not three years' figures for it but five years' figures.
There is to be an immense increase in real terms spending on health. Why is that? It is a very expensive way of stopping people complaining about having to pay another 1 per cent. in national insurance employees' contributions, and looking five years ahead is a way of
188
taking us through the next election. The Government can continue trying to mount the daft argument that we have heard all afternoon, which is that if the Tories do not say that they agree to the spending, it means that we will cut the health service and everybody will have to pay for their treatment. My view is that the public are not as daft as that. The Labour party has been trying to run that argument for as long as I can remember, and it is not an adequate way of explaining the vast increase in expenditure.
I used to deliver Budgets that covered both tax and public spending, all public spending, at the same time. That was a very good thing and I regret the move away from it. Every year we used to make adjustments according to what had happened to the economy and to the services. That practice was cancelled by the new Chancellor, and it led to two years of savage cuts. Yet what he did had never been done by any Conservative Chancellor because, as the hon. Member for Truro and St. Austell rightly pointed out, Labour went for a squeeze on public spending beyond all imagining in its first two years in office. It moved to a three-year cycle, which some people like; I have not yet converted.
This Chancellor and this Treasury claim that they are responsible, yet to plan for five years for one Department on this scale is frankly irresponsible. I predict that whoever is in office in five years will regret being stuck with these immense figures for one Department. We have no idea what will happen to the economy between now and then. Mr. Wanless, soon to be Lord Wanless, seems to have a means of calculating that health spending will be 9.4 per cent. of GDP. I have never read such tosh. No one knows what GDP will be five years out, and no one knows how to compare health spending as a percentage of GDP with figures in Europe. That is not possible five years out, even for the finest academic economist.
Every other area of public expenditure, including local government, the police, the Prison Service and transport, is in hock to this enormous commitment to increase spending on health. I am not surprised that the Chancellor has had open warfare with the Home Secretary, and I am not surprised that the Prime Minister ensured that the Chancellor made some obligatory reference in his Budget speech to bits of money for the Home Office and education. Those Secretaries of State must be seething with rage, but it is nothing compared with what their successors will be like after the next reshuffle or two, when they find that they have to live with that health expenditure commitment.
The Budget is not deserving of its popularity, and that is the background against which we must regard what is meant to be a huge political breakthrough on health. The Government have been increasing health spending for three years and have very little to show for it. Most of the money has gone on pay, and public sector pay is running ahead of other forms of pay. Much of the money has gone on drugs—the drugs bill is out of control and is increasing by 10 per cent. a year, which is simply unsustainable. Almost £500 million goes on litigation and damages, and we have no idea how to stop money going in that direction.
Everything depends, as my hon. Friend the Member for Woodspring (Dr. Fox) said, on how the money is spent, but the Government have done a U-turn there as well, although I have not left myself time to deal with it adequately. The new NHS plan is the internal market

189
rewritten; it is the purchaser-provider divide; it is patient-oriented. We are going back to patient choice and devolution, but it is the delivery in practice which will count—
Mr. Deputy Speaker (Sir Michael Lord): Order. I am afraid that the right hon. and learned Gentleman's time is up.
5.58 pm
Ian Stewart: I should like to return the debate to fact rather than opinion.
In recent years, Salford has seen a decline in population—some would even say a haemorrhage. That, coupled with reduced unemployment and a welcome reduction in the number of benefit recipients, means that in the past two years Salford has received the second-lowest and the fifth-lowest increase in its standing spending assessment of all metropolitan districts. At the same time, its council tax base has been reduced.
The paradox is that authorities such as Salford, which are facing population decline, need additional resources to attract new people to ensure that regeneration through capital resources is not undermined by a lack of revenue. They also need to provide high-quality services for the people who remain in urban areas who tend to be more needy. We do not have contingency funds or flexible mechanisms for dealing with unforeseen and unpredictable pressures, such as the dramatic increase in the number of looked-after children which Salford has experienced in recent years.
Currently, Salford council has considerable concern about funding for social services. Salford supports the function changes that the Government are introducing in 2002–03, particularly in relation to the care of the elderly. However, it believes that, to stay within Government allocated budgets, it will have to restrict eligibility criteria and reduce the number of elderly people receiving council support. This will have a detrimental effect on the Government's important objective of reducing bed blocking in the NHS.
In total, Salford estimates a shortfall of £1.4 million in its social services budget for 2002–03, yet, over the last three years, Salford social services has introduced significant efficiency measures. Furthermore, it was congratulated in October last year on being one of the top 15 performing authorities, and its social services director, Ann Williams, has been nominated and shortlisted for a public sector leadership award. That is a compliment to Ann and to all city of Salford workers.
Nevertheless, under pressure, Salford is now planning to reduce the number of residential and nursing home placements and community support. This will have an immediate effect on the council's ability to help people move from acute hospitals back into the community when they no longer need full-time nursing care.
Last year, the council met its target reduction for delayed discharges from hospitals. It wants to build on this achievement. Grant conditions under the building care capacity grant, however, require a further 20 per cent. reduction this year, and all of Salford's allocation for this year would be needed to meet the ongoing costs of placements and fee increases from 2001–02. It therefore currently anticipates a minimum of 158 delayed transfers from care.
190
Last month, my hon. Friend the Member for Bolton, North-East (Mr. Crausby) organised a meeting with Social Services North West and all the local authorities present identified the same problems. The Association of Directors of Social Services and the Local Government Association have lobbied hard to get more money for social services, and I and many other MPs have raised the issue with Ministers and the Chancellor. Although I am very pleased that the Government are providing additional funding to the tune of a 6 per cent. real increase in spending over the next three years to help local authorities provide the high standard of care in the community that we all want, we must accept that, like the health service, social services have also been historically underfunded.
I was staggered at the structural underfund that was imposed on social services in Salford when the Tories transferred care from health to local social services—I suspect that it was as much as 3 or 4 per cent. Clearly, money must be made available both to sustain community placements for people already in local authority care and to fund new placements for people waiting to leave hospital. All of this is in a climate in which there is a problem in the supply of residential care for which local councils are not responsible.
Social services now receive a number of specific grants such as building care capacity and quality protects for children's services, and I trust that the additional 6 per cent. funding will be on top of those specific grants and general funding. I am sure that the Government will have extensive consultation with social services authorities about proposed penalties for authorities that do not meet their targets for reducing blocked beds. Although it is important that the Government ensure that health services and social services provide an efficient transition of patients from hospital to care or home, I am concerned that authorities could be punished for failing to provide services for which they have not been given sufficient or appropriate resources, or when there is a problem in the supply of residential care over which the local authority has no control.
What we must do is build on good existing partnership relations between health and social services authorities in my area and throughout the country. We must nurture co-operation and the dissemination of good practice. Different authorities may have different criteria to determine when a patient is fit for discharge. Delayed hospital discharges are not just a matter of funding: the availability of residential places or housing adaptations are just two factors that must be considered. There are also complex reasons for people being readmitted to hospital. What we must avoid is patients being caught in a game of ping-pong between different authorities that are anxious to avoid penalties. Notwithstanding those concerns, I believe the Government have taken a very important step in reducing the funding gap between health and social services and giving social services assured resources to enable them to plan for the medium term.
I warmly welcome the broad package of NHS audit and accountability reforms announced by the Chancellor and fleshed out by the Secretary of State for Health. They will make it easier for the public to see how the money is being spent and what is being achieved. More transparency is always healthy. Of course, I also loudly applaud the considerable additional funding to be made available to the NHS—an average annual increase of 7.4 per cent. in each of the next five years. This, of course,

191
builds on the substantial foundations established in Labour's first Administration, under which my local area of Salford benefited from investment in modernisation. Under the local capital modernisation fund, the Salford Royal Hospitals NHS trust received £675,000. In terms of accident and emergency modernisation, £660,000 went to the Manchester Children's Hospitals NHS trust for the Royal Manchester Children's hospital and £755,000 to the Salford Royal Hospitals NHS trust's Hope hospital. An additional £200,000 was invested in an existing scheme to improve the layout of the accident and emergency department. Action has been taken to reduce waiting lists and times: £499,000 was provided to aid early delivery of the maximum in-patient waiting time target of 15 months during 2001–02. In addition, there has been major capital investment in my area as the lead authority for the £114 million fourth wave scheme at the Salford Royal Hospitals NHS trust. Work to develop that scheme is due to start in 2001.
The link between poverty and poor health is well established. I therefore welcome not only the Budget investment in health but the more generous tax credit system that the Chancellor is introducing, which I am sure will play a part in reducing health inequalities.
As I am on my feet, I cannot pass up the opportunity to make a special plea. I hope that some of this extra money will be made available to voluntary hospices. The cost of running one of our local hospices is £7 million per annum, of which only 28 per cent. comes from public funds. The remaining £5 million has to be raised every year from the people of Salford, Manchester and elsewhere. A recent survey undertaken by the Independent Hospice Representative Committee, entitled "NHS Funding of Independent Hospices 2001", found that hospices in the south and in coastal areas fare a lot better than those in the north and in deprived communities. I hope that the Government will take action to reduce regional inequalities and to ensure that all patients have access to the highest quality of service.
This Budget is a significant morale booster for all health and social services workers. The Government have given us the framework and the monitoring procedures to deliver a high-quality service to patients and local authority residents. A sustained commitment has been given to the NHS, which will allow long-term plans to be developed and realised. Managers, doctors and patients have wanted that—and waited for it—for years.
Labour is delivering on its election promise and I am confident that the electorate will support our measures to deliver a national service that is responsive to local needs, which people can count on if they have a minor, chronic or life-threatening condition. The service that I want for my family is the one that I want for every family. Only Labour can guarantee equality of access and a service that is free to everyone. I am confident that this is what my constituents in Eccles in the city of Salford want.
We need only look at France this week to see the awful consequences of public disengagement from politics and the apathy that can result when people feel that they are not presented with real choice. The shadow Secretary of State for Health says that there is a debate to be had. I relish taking on the Tories on the choice that Labour has
192
made, and I am confident that people will recognise that a publicly funded NHS is the best health insurance system around. I shall vote for that tonight.
6.10 pm
Mr. Michael Portillo: I intend to speak mainly about transport, but before doing so I shall pick up on the comments made by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) about the Chancellor's folly in committing money to health in the way that he has done. The Chancellor's approach of making a vast commitment for the next five years surrenders any possibility of leverage that he might have exploited to bring about the changes that are required in the health service, and it will lead to inflation in just the sort of Budget headings that my right hon. and learned Friend mentioned. This afternoon, the Secretary of State for Health displayed extraordinary complacency and misunderstanding of the degree of change that is needed in the health service. As my right hon. and learned Friend pointed out, the Chancellor of the Exchequer—or perhaps his successors—will come to regret the day.
The House was treated to an extremely good speech by the shadow Secretary of State for Health, my hon. Friend the Member for Woodspring (Dr. Fox). However, although it is foolish of the Government to reiterate, as they do almost daily, that they see no alternative to a health service fully funded by taxpayers, the Opposition will require further time and thought to develop alternative or complementary systems. The Government are indeed foolish to continue to insist as they do: no other health system in the world attempts to fund itself as ours does, and no other system produces such levels of inequality as ours, unfortunately, does. For that reason alone, the Government are wholly wrong to have such a closed mind.
Mr. Levitt: Will the right hon. Gentleman give way?
Mr. Portillo: No. I have only a short time and I have not yet progressed to the main part of my speech.
The proposal to introduce a national insurance surcharge across all employees and their employers looks, in the hands of a Labour Government, like the first stage of the abolition of the distinction between tax and national insurance. Paradoxically, if there were a Conservative Government today who were interested in introducing a system of social insurance, that same change might be an interesting first step in that direction. I mention that because naturally, understandably and rightly, there has been a strong reaction from business to the imposition of those surcharges, which are, as my right hon. and learned Friend the Member for Rushcliffe said, a tax on employment. It is worth noting that one of the likely side effects of introducing a social insurance policy would be heavy taxes on employment, which is one of the reasons why we in this country have been reluctant to adopt that policy. Such consequences are among the things that must be carefully weighed in the balance.
Today the House has shown itself to be keener on discussing how money is raised than how health care is provided and how services in this country are run. I believe that how services are run remains the more important issue. In his response to the Budget, my right

193
hon. Friend the Leader of the Opposition drew attention to the fact that in Germany there are no waiting lists. Recently, the British ambassador in Germany told me that when he makes a speech in Germany about health, he has to begin by explaining to the German audience what a waiting list is, because the concept is simply not understood there.
During my recent visit to Germany, it struck me that in the eastern half of that country until 1989 there were queues for food, and we Britons, in our rather superior way, used to tell the east Germans that there was no mystery about why they queued for food: it was not because they did not spend enough money on food, but because they had a nationalised food system. I am sorry to report to the House that Germans today, whether they are from the east or the west of the country, tell the British that it is not surprising that we queue for health—the reason is obvious: it is because we have a nationalised health system. We would do well to reflect on that.
Labour celebrated the return to the binge of tax and spend when the Chancellor and the Prime Minister visited the Chelsea and Westminster hospital in my constituency, where Leo Blair was born. My constituency also contains the Royal Brompton hospital and the Royal Marsden hospital, so we are well endowed with health facilities. It is perhaps for that reason that my constituents currently appear less alarmed by the health service than by the state of the transport system. They will be dismayed that the Budget made no mention of the public-private partnership for London Underground, even though decisions on that are imminent. I wish to use my speech to appeal to the Government at the eleventh hour to abandon the PPP.
My reasons are simple. The plan involves no risk transfer to the private sector, the books have been cooked in the effort to present the plan positively to the public, the PPP will offer extremely poor value to the taxpayer, things will get worse during the course of the proposed 30-year contracts, and London Underground will get less money invested than the taxpayer would spend.
Clive Efford: Would the right hon. Gentleman privatise it?
Mr. Portillo: I shall talk about that later.
It is common ground among many hon. Members that public-private partnership can be a good thing, and I am the first to admit that the genuine transfer of risk away from the public sector and into the private sector has a value and is worth paying for. That is the reason why the Government said that they would undertake the London Underground PPP only if value for money could be proved. At this stage, however, the Government have clearly and absolutely failed to demonstrate value for money.
The Government's main claim to have demonstrated that is that the PPP was endorsed—they say—by accountants Ernst and Young. In fact, Ernst and Young, which was employed by the Government, makes the following points clear. First, it found that the judgments used in the analysis to justify the PPP were subjective judgments. Secondly, although the contracts are for 30 years, they have prices for only the first seven and a half years, after which period everything is up for grabs and can be renegotiated. Thirdly, even Ernst and Young acknowledges that
"Risk transfer is complex and subject to various sharing and limitation procedures."
194
Let me focus on those points. An example of what is meant by subjective judgments having been used in the analysis is that the public sector costs used for comparison to determine whether the PPP offers value for money were arbitrarily increased during the course of the study, by up to 38 per cent. in some cases, whereas the private sector costs were arbitrarily reduced by quite large percentages, on the basis that private sector involvement would guarantee early completion of projects—although that is not a common experience. Accountants Deloitte and Touche said that the values that had been given to the increases and decreases in the basic figures were
"significantly greater than would be expected".
Even using those botched figures, it remains impossible to prove value for money because, as I said, the contracts contain prices for only the first seven and a half years; there are no prices covering the remaining 22 and a half years.
On the question of risk transfer, Transport for London said:
"there is no longer any validity to any claim that private equity is assuming material risk."
To be fair, I have some sympathy with the Government in their dealings with London Underground. It is not a body that inspires confidence and I myself did not find it easy to deal with. As the Government never tire of telling us, the Jubilee line was delivered late and it cost more than expected. However, it is the height of naivety for the Government to believe that simply getting a private contractor to do the work eliminates any danger of projects becoming more expensive than planned or taking longer than expected to complete.
When in government, we made a proper transfer of risk when the channel tunnel was built. The fact that private sector contractors built the tunnel did not prevent it from being vastly more expensive than planned or from being late. However, the risk transfer meant that even though it was late and over budget, the extra cost was not borne by taxpayers. The PPP for London Underground is basically condemned by its failure to transfer risk.
It is extraordinary what the Government have been able to do to London Underground in the five years that they have been in office. When the PPP was first conceived, London Underground was making an operating profit of £265 million a year, which was contributing to investment in the underground. Indeed, that money was counted on for the PPP: the 1998 comprehensive spending review assumed that no public subsidy would be necessary for London Underground by 2001–02, which underlines the point made by my right hon. and learned Friend the Member for Rushcliffe that things do not turn out as expected. The costs per train mile on London underground have gone up by 62 per cent. since the Government have been in office. London Underground is now making a thumping loss, so there is no contribution from an operating profit for investment or the PPP. I dare say that the impossibility of running a shadow PPP, as management have been required to do for the past few years, is one reason why they have taken their eye off the ball and why profits have simply disappeared.
The Government have made grandiose claims about what the PPP will produce for London Underground, but the contracts guarantee virtually nothing at all. None of the major enhancements wanted by people in London—congestion relief, line extensions, improved station

195
accessibility—are specified in the immensely complicated and expensive contracts which have hugely generous margins for private sector contractors. Money will clearly be spent much more badly with the PPP than without it.
As the House knows, the PPP has no friends. Deloitte and Touche is against it; the Mayor of London is against it; the London boroughs are against it; Transport for London is against it; members of every party in the House are against it; the Select Committee on Transport, Local Government and the Regions is against it; most of London's Labour MPs are against it, and it is about time that they spoke up. The PPP is sustained not by logic or conviction, but by the obstinacy of the Chancellor of the Exchequer.
I have not mentioned safety, but I shall cite the Mayor of London, Mr. Livingstone, who said:
"It would be safer … if you just privatised the whole thing to one firm so the chain of command wasn't broken."
That seems pretty sound.
It is the eleventh hour for the PPP, but a really serious error is about to be made. Government money—taxpayers' money—is about to be wasted on a prodigious scale. Although it is late, I appeal to the Government to abandon the PPP, for which they have failed to make a case. It is an abuse of public money, it enjoys no support in the House or elsewhere, and it should be abandoned.
6.23 pm
Liz Blackman: In a recent survey on health, the target group was asked two main questions. The first was, "What do you think of the NHS?", to which the majority replied, "It's in crisis." The second was, "What is your experience of the NHS?", to which the overwhelming answer was, "Extremely positive". There is a reality gap between most people's experience of the NHS and the headlines played for all they are worth by the Opposition. When the hon. Member for Woodspring (Dr. Fox) was speaking, Labour Members tried to count the number of times that he lapsed into the first phase of his plan to rubbish the NHS; we gave up because we got into double figures on the Tory lie.
Clearly, a great deal needs to be done in the NHS; it needs much more investment and a great deal needs to change. However, people's response to the second question in the survey showing that they are broadly satisfied is based on an already improving picture. I am in constant touch with health professionals in my constituency, the chief executive of Erewash primary care trust and local acute hospitals, and they tell me that good and quantifiable things are happening. I do not want to read out a great long list, but I shall give the House a flavour of what has happened during the past five years, especially the past two or three years.
Erewash PCT says that access to GPs in its area is better than the NHS target; the role of practice nurses managing patients with chronic diseases, such as diabetes, has been extended; clinical governance has vastly improved; there have been major improvements in managing patients with chronic heart disease—for example, the prescribing of statins—and personal medical services pilots have modernised contractual arrangements, leading to flexibility in GPs' employment and the use of nurses and allied health professionals to deliver care
196
alongside them. In addition, we have had a valuable new minor injuries clinic at IIkeston community hospital, which during the election did a sterling job treating three Labour campaigners for dog bites. All were seen and treated within the hour.
Mr. Salmond: I am not sure that the hon. Lady has caught up with events. I thought that we had abandoned the model in which everything is all right with the NHS and adopted one in which huge investment is required to put it right, so will she catch up?
Liz Blackman: The hon. Gentleman should wait, as I shall try to offer suggestions on the way forward later.
The Queen's medical centre, one of the largest teaching hospitals in the country and, indeed, in Europe, serves part of my constituency. The number of out-patients waiting for treatment there for more than 13 weeks has gone down from 12,000 in 1999 to 2,000; there are now no in-patients waiting more than 12 months; trolley waits are down; and a new accident and emergency centre is on the way. Interestingly, last February 83 per cent. of cancer patients were seen within two weeks, but last month 99 per cent. were seen; orthopaedic and out-patient clinics are expanding; there is a new day-case theatre, and another one—the third—is being built; the main X-ray department is being refurbished; there are new staff, including 14 consultants and 60 allied health care professionals; and 150 more nurses are on the way.
I will not go on about improvements, but I wanted to give the House a flavour of what has happened and explain the results of that survey. Change is happening, but I accept that there is a great deal more to do. I get some letters from constituents who tell me that they have had a good experience of the NHS, but a few tell me that they have not, which is a tragedy. I therefore fully accept that we need to do more and that there are no quick fixes.
I want to raise a few matters which, I hope, will be considered as ways of making progress. There is increasing pressure on statutory training as well as training to develop best practice. It must be recognised that training takes time and must be incorporated into work force planning in both primary and secondary care; it takes two years to train a nurse consultant, for example. Resources are needed to pay not just for training but for the backfill. Clinicians who provide much of the training are expected to deal with the same clinical case load. We must provide quality training, but not at the expense of clinical work.
We also need continued emphasis on recruitment of excellent managers. Every time that I make a speech about education or any other public service, I say that we can do nothing well without high quality management. I applauded my right hon. Friend the Secretary of State for Health a few weeks ago when he announced that he was recruiting 100 excellent managers, not just from within the public services, but from the voluntary sector and the private sector. They are vital to make the changes by leading, motivating, problem solving and communicating. I hope that that drive continues.
Turning to audit, I welcome the streamlining of the Commission for Health Improvement, the work of the Audit Commission on value for money, and the Care Standards Commission. However, my conversation last Friday with the chief executive of the Queen's medical

197
centre convinced me that there is one aspect which we must consider carefully as we move to a more streamlined audit system. He told me that he was visited by the Commission for Health Improvement in January and by the Audit Commission a few weeks later. He was rather rude to the regional tier of the health authority when it visited him a few weeks after that. We must sort that out. We cannot have people asking for the same information time and again. I welcome the recognition that that is a problem, and we must move quickly to resolve it.
A further issue relating to audit is the fact that some outcomes are relatively easy to measure—for example, operations performed and infection rates. Others, such as community health promotion initiatives, delivered by good health partnership working, can produce enormously good results, but they are much more difficult to measure. We need to find ways of doing that effectively, and we should value those services. Many services have undergone multiple reconfiguration, making it difficult to produce an accurate picture of a moving target. Auditors need an in-depth understanding of the change that is taking place.
Where high quality initiatives are making significant improvements and are being rolled out—for example, the Bradford initiative for dementia care mapping—should we not consider mainstream funding? As someone who has a very good community hospital, I make a plea for greater emphasis on the development of community hospitals as new diagnostic and treatment centres. That is traditionally provided by acute providers, not by those smaller, and sometimes excellent, units.
Can we consider having chronic obstruction respiratory disease and heart failure specialists in primary care? That is not a service identified in the national priorities, but it is another partial solution to bed blocking. Can some evaluation be done on the effectiveness of making it a priority? Perhaps some thought has been given to that already.
I conclude on a more political note. At the weekend, I listened—as did many hon. Members, I imagine—to the radio programme "Any Questions?" hosted by Jonathan Dimbleby. The hon. Member for Ashford (Mr. Green) was asked how the Tories would fund the health service. His answer has been echoed so many times this afternoon in the Chamber—the Tories say that they need to explore other ways. The right hon. Member for Kensington and Chelsea (Mr. Portillo) also said that. The Welsh nationalist who was on the radio panel immediately cut in and said, "We don't need a debate. Stop navel gazing. We need to get on with it." The audience agreed.
If there is something valuable to say, the time to say it is now. Reform is happening, change is taking place and investment is going in. We are moving forward and changing the whole landscape. The Opposition cannot engage with that. All that they are doing is navel gazing and making noise, which people do not wish to hear.
6.34 pm
Mr. Francis Maude: Until the hon. Lady's final remarks, I was about to say that there was a danger that the debate was approaching the level of seriousness that the public expect on matters of such importance. I am sorry that she lapsed back into narrow partisanship, which is a massive turn-off to the public and has led to the disengagement of so many people and the distrust and
198
scepticism discernible not only in our conversations with members of the public, but in the opinion polls, about whether politicians can do even what they say they will do, let alone what the public want. It is important that we approach the debate with a high level of honesty and straightforwardness. We should treat the public with respect and tell them the truth. We should treat other people's views in the debate with respect. We should accept that none of us has a monopoly of the truth.
There is no health system in the world that is perfect. Our health system is manifestly imperfect, and we should be grown up enough to accept that change is needed and that not only is there room for a serious debate about what form that change should take, but that there is an absolute necessity for such a discussion. The attempt to close down the debate before it has even started is lamentable.
On the Budget more broadly, it is widely accepted that the Chancellor deserves some credit for the performance of the economy. My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) made that clear and set out the case fairly. Equally, the Government should accept that the Chancellor had a fantastic legacy. Again, there is no point in being narrowly partisan about it. That is demonstrably the case.
The Chancellor deserves credit for the new monetary arrangements that he has put in place. They are not perfect, but they are a move in the right direction. He deserved some credit until this year—for reasons to which I shall return—for his approach to fiscal discipline, although there has sometimes been criticism of the way in which he achieved it. He deserves credit for a stated, broad commitment to enterprise, which I think he means. He goes on about it a great deal, and I do not think that that is just for the sake of form. He understands that a successful economy depends on successful enterprise.
The criticism of the Chancellor is that he never can resist meddling. There is hugely complex regulation and growing complexity of tax arrangements. For example, capital gains tax needed reform. The previous regime, if my right hon. and learned Friend the Member for Rushcliffe will allow me to say so, was too high, but it was at least very simple. It needed reform, but not the creation of a level of complexity that is to the advantage of no one except the accountancy profession.
Others have spoken about the Chancellor's approach to tax credits. There are huge complaints to be made about the complexity, the instability and the meddling. For families alone, the Chancellor has created five new credits, scrapped four of them and introduced two new ones.
The main complaint about the Government's approach to welfare reform is that it goes in the wrong direction. The aim should be, as Labour argued fiercely and rightly in opposition, to reduce the extent of means-testing. What the Government have done has gone in the other direction. It is a pity that we cannot have a more straightforward debate about that.
The Government were elected with a huge majority, a fund of good will and much political capital, and they have, to give them credit, done quite a lot to contribute to an intellectual consensus about the kind of welfare reform that is needed. It is such a pity that when they were elected and had the ability to do it, they decided to go off in a different direction because the Chancellor could not resist the complexity and the engineering. That has made the

199
welfare system less satisfactory. As my right hon. and learned Friend the Member for Rushcliffe pointed out, 90 per cent. of families in receipt of what are effectively means-tested benefits does not make sense.
A great deal of complexity has been added—but returning to the theme of enterprise, higher taxes have also been introduced. In this case, they are overt taxes. I have spoken many times in the House about the stealth taxes that the Government introduced in the previous Parliament, when they were still trying to pretend that they were not a tax-increasing Government. They have now come out of the closet, however, and imposed direct extra taxes. Clearly, as everyone in the business world has told them, they are taxes on jobs, and there is no question but that they will affect the performance of the economy.
That is why there is genuine reason to question the Chancellor's commitment to fiscal discipline at this stage. My right hon. and learned Friend the Member for Rushcliffe devastated the sleight of hand with which the Chancellor increased his estimate on trend growth—he did so "just like that", as Tommy Cooper would have said—which is suddenly going to be 25 basis points higher than previously. There is such a thing as regression to the mean. It may be reasonable to assume that the mean will be higher in future when there is a genuinely low-tax economy with light regulation that will stimulate and encourage enterprise; it may be reasonable to assume that trend growth might increase in such circumstances—but everything that the Government are currently doing goes in the other direction. If anything, the Chancellor should be reducing his estimate of trend growth, not increasing it, especially in the aftermath of a year in which tax revenues grossly under-delivered because the economy under-performed in comparison with what was expected. It smacks much more of a short-term career plan than a long-term financial strategy.
Health care is obviously the nub of the Budget and I have a few observations to make about it. No one denies that more money is needed for health care. There is no arguing about that, and equally, there is no argument about the desperate need for NHS reform. I find much to agree with in the White Paper published by the Secretary of State for Health, about which he made a statement in the House last week. I would be more enthusiastic, however, if I thought that he had a high chance of achieving his aims. Indeed, if he were to achieve all that he set out in the White Paper, he would just about recreate the process of health service reform set in train by my right hon. and learned Friend the Member for Rushcliffe about 14 years ago—a process of devolution and of moving away from this country's obsession with centralised control of public services.
I applaud the White Paper's emphasis on choice, plurality and devolution, but although that is all good stuff, one must ask oneself whether the Secretary of State really means it. He said only last summer that
"we…have one monopoly provider and that is the NHS. As long as a Labour Government are in power, that will remain the position."—[Official Report, 26 June 2001: Vol. 370, c. 500.]
Suddenly, all that has changed. Instead of monopoly, he is in favour of plurality and wants the private sector, the not-for-profit sector and international providers to come in. I think that that is very sensible and I approve of it,
200
but can we believe that he means it when he was saying only 10 months ago something that was different by 180 degrees?
Such a rapid conversion does not have high credibility and again contributes to the public scepticism that we have seen. Some months ago, an announcement was made about the creation of a new diagnostic and treatment centre to be managed by BUPA at the Redhill hospital. The project, which was mentioned by my hon. Friend the Member for Woodspring (Dr. Fox), is good stuff and very sensible. Local people and the local trust want it, but it has not happened because it is not being pushed. There is always resistance on the part of a monopoly producer within a public service to the introduction of diversity. The issue will need to be pushed if these important reforms are to be carried out.
I also applaud devolution in the health service, which is absolutely what is needed, but it is hard to believe that it will really happen. It is very difficult to drive change in any big organisation, as there will be a huge amount of inertia. Real will and the investment of significant political capital will be required to make it happen. My right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo) pointed out that, by committing so much extra funding in advance, the Secretary of State for Health and the Chancellor have abandoned much of the leverage and purchase that they could have had on the health service in ensuring that the changes occurred in time. Apart from that, however, they need absolute commitment and they need to mean what they say.
Even when we consider what the Government are saying about devolution, we see that their approach and mindset are very top down. They are saying that if hospitals do well and are given so many marks out of 10, they will give them a little bit more independence through the gracious dispensation of a beneficent Secretary of State. He needs to understand that when people who are close to the front line and to the delivery of service are given more power and the ability to make choices, implement them and make a difference by dint of what they do, they will generally get it right. Of course, they will not all get it right. Devolution and decentralisation involve risks, and some people will get things wrong and some experiments will go wrong.
It is absurd for us to aim for a completely uniform health service throughout the country. A health service that seeks uniformity will be committed to mediocrity. We should look for local health providers to find different, better and transforming ways of doing things. That is how general improvement will happen, but that is not the approach that the Government are taking, because in their heart they do not believe that such devolution is the answer. Their approach depends on dispensation and is very top down, which is why it is very hard to believe that the process genuinely will happen.
I hope that the programme of reform that the Secretary of State announced will work, but it is hard to believe that it will do so and easy to understand why the public are so sceptical about it. The Government's mindset does not seem to have progressed very much. They claim that they are moving away from the 1948 model—I seem to remember that Aneurin Bevan said in 1948 that he wanted to hear the clatter of the bed pan in his office in Whitehall. But why should we maintain the absurd pretence that the Secretary of State is to blame for every single thing that

201
goes wrong in the health service, any more than the pretence that he can take credit for every single thing that goes right?
The health service is very big and has been a monolithic organisation. We should seek to decentralise and devolve it, which will require a genuine, grown-up debate, and not the sort of juvenile approach in which we seek to suggest that anything that deviates from current orthodoxy is to be stigmatised as a desire to privatise or disband the national health service. That is the wrong approach. We need an open, serious, grown-up and honest debate; otherwise, I fear that the public's scepticism about the way in which we approach the matter and about whether the health service genuinely can be reformed and improved, as we all hope it can, will remain and may get worse.
6.48 pm
Mr. Tom Levitt: I very much welcome the call made by the right hon. Member for Horsham (Mr. Maude) for a thorough debate. I hope that the hon. Member for Woodspring (Dr. Fox) will hear and will take note.
People have asked me what the Budget tells us about the Labour party and the Labour Government. They ask whether it is an old Labour Budget or a new Labour Budget, and whether it is a throwback or a third-way Budget. I say that it is a Labour Budget. It shows successful management of the economy in the face of an international downturn, commitment to fairness and equity through continued support of children and families, and absolute commitment to public services—not least the national health service, to which all Labour Members, without exception, are committed as a service that is free at the point of use, available to all in need irrespective of their income, and paid for from general taxation. For two thirds of its life—35 of 54 years—the national health service was run by Conservative Governments who did not believe in its values. The Conservatives opposed its formation, the shadow Chancellor recently called it Stalinist, and this evening a former Chancellor described new spending on it as reckless and irresponsible. In 1997, we inherited a damaged NHS. All that held it together was the supreme commitment of its staff and others, and its unique place in the hearts of the British public.
Listening to the hon. Member for Woodspring was an education, and I certainly agree with two of his comments. I am glad that he accepts that a fifth year in opposition is still early days, and I hope that he will have plenty of time to enter into the debate for which the right hon. Member for Horsham has rightly called. The hon. Gentleman also said that he wants a better health service, but the problem is that he does not know what he means by that. We do: a better health service is not just more of the same, but a diverse and flexible service that can provide an appropriate level of service to everyone who needs it, regardless of where they live and of what those needs may be.
Now more than ever, we need such a health service to demonstrate at least three important principles. First, good health provides a huge economic value—a point that has not been picked up on in this debate. The cost to our economy of absence through sickness is about eight times the additional sum that employers are being asked to contribute to national insurance. Reducing the economic
202
cost of sickness would more than pay those employers, therefore, for their increased contributions. The second principle is an absolute civil right to good health for all individuals and families, and the third is simple: social justice. It is right that a health service be provided nationally, so that people can be treated according to need. To my mind, the national health service is the embodiment of social justice.
Chris Grayling: Can the hon. Gentleman explain how such social justice applies to those of my constituents who, under the national health service, continue to wait months or even years for operations? They survive in pain for long periods, under a system that seems simply unable to deliver improvements. Despite the additional moneys provided by the Government, no improvements have been delivered in the past five years. How can the hon. Gentleman reassure me that the changes in the Budget will deliver improvements for my constituents?
Mr. Levitt: No Labour Member has said that the situation is perfect. We regard the NHS as a glass half full and getting fuller; the Opposition and some in the media see it as a glass half empty, and wish to deride it. I shall discuss later some of the progress that has been made, and which I hope will be made.
We will carry for years the burden of Tory underinvestment in the national health service. Some buildings and working environments are still less than adequate. There is a shortage of many types of specialist consultant—to judge by my postbag, the two that particularly stand out are hip operation specialists and audiologists—and there remains a shortage of mainstream doctors and nurses. However, things are better than the Opposition and the media make them out to be. They have been getting better for the past five years, and they will continue to do so.
Across the country, there are already new hospitals, upgraded accident and emergency departments, and 20,000 more nurses and 6,000 more doctors, with record numbers in training. Tens of thousands of people have, or are about to get, digital hearing aids—a massive breakthrough for them. New standards of care have been established for care homes, along with free nursing care in that sector. Waiting lists and waiting times for in-patients and out-patients have improved, and personal experience has shown me that NHS Direct has been a success. After a telephone call to NHS Direct at half-past 2, I was in a hospital bed by half-past 4. By half-past 6 I was receiving intravenous antibiotics, which I was given for several days. In case any hon. Members are wondering, I can assure them no favouritism was shown. Three days after I was admitted, the nurse said. "Why didn't you tell us you were an MP?"
Mr. Barker: Will the hon. Gentleman give way?
Mr. Levitt: I am pushed for time, but I shall invite the hon. Gentleman to contribute later if I can.
There are open minds in our health service on how and where to obtain health care if it is not available locally. I applaud the NHS for having the imagination to buy in operations from abroad, or from the private sector, where necessary. After all, almost all those who provide private sector health were trained at the public expense. I look

203
forward to the establishment of contracts that oblige consultants to prioritise NHS work. Someone whom I know was released from hospital on a Wednesday, rather than a Monday, because the consultant did not do NHS work on Mondays and Tuesdays. As a result, that person had to stay in hospital for an extra two days.
I am the first to agree that investment that is committed blindfold may not be worth having. Investment must be targeted and strategic, and give value for money. It must improve services, and where the status quo is not acceptable, it must be replaced by something better. In my Derbyshire constituency, several modest improvements—I describe them as modest because it does not have an accident and emergency unit or a major hospital—have been made. However, Tameside hospital—a major hospital that serves my constituency—is due to be replaced completely in the next few years.
In New Mills, the NHS has established a salaried dentist to make up for the weakness in the dentistry-free market that we inherited. A community dentist is available to residents in Gamesley, the most deprived ward in High Peak. In rural Hope Valley, an innovative healthy living programme is building on previous schemes that provided—among other things—a citizens advice bureau contact in every GP surgery, and which thereby acknowledged that poverty and poor health go together. A couple of years ago, only 45 per cent. of category A emergency ambulance calls met the 8-minute target time; now, 75 per cent. do so. That major improvement in ambulance services is due in no small part to the commitment of ambulance staff.
Like the rest of the country, we have already enjoyed record year-on-year health service spending increases. In the past few weeks, an entire tier of administration has been removed, thereby promising spending that is much more sensitive to local needs. A recent survey of mine confirms that, for three quarters of my constituents, the national health service is the key policy area in which they expect Labour to deliver improvements in years to come. We have made a huge but worthwhile undertaking, on which we must—and will—deliver.
I cannot resist turning to the Conservative party. Anyone who really wants to know what the Conservatives think should turn to "Tory Talk", an anonymous and outrageous parody of a political leaflet that was distributed door to door in the week before the Budget, and which begins with the phrase:
"Welcome to 'Tory Talk' sent to you by High Peak Conservative Association."
Not a single local politician is mentioned in it—except me. I should modestly point out—and the only national one who is mentioned is the hon. Member for Woodspring. According to "Tory Talk", the hon. Gentleman has no health policies. At least they got that right.
On first looking at the leaflet, the most striking thing is the cartoon, which depicts a patient kicking a doctor in the face. I am sorry that hon. Members cannot see it, and I am happy to pass round the leaflet later. Evidently, that is the Tory attitude to people who work in the NHS. The leaflet's headline is, "New Labour and the Third World
204
NHS." According to the text, the NHS provides a service that is below even that acceptable in the third world. That is the Tory view of the NHS.
Mrs. Browning: Will the hon. Gentleman give way?
Mr. Levitt: The hon. Lady and I have had many exchanges across the Floor of the House, and if there is time I shall let her intervene later on.
That is an outrageous way to describe the commitment, skill, dedication and success of the hundreds of thousands of people who work in the NHS. It is clear that those who wrote the leaflet have never seen third-world health facilities. I can assure them from first-hand experience that, on seeing such facilities, envy is not the emotion that one feels. What one feels is compassion. I want people in the third world to have some of the dignity, concern and good health to which we aspire for every patient in this country.
Mrs. Browning: Clearly, I do not want to take responsibility for something that I have not seen, but I worked in operating theatres in the 1970s, and in recent years I, like others, have had to nurse elderly dying relatives in NHS hospital wards, when our attendance ensured that they had liquid and comfort. Those are the third-world standards that concern people. That may not apply across the NHS, but it is becoming apparent to more and more of us who have had such personal experiences that something must be done.
Mr. Levitt: I exonerate the hon. Lady from responsibility for the leaflet. I congratulate her on having made a genuine point about some people's experience without trying to tell us that that is new and has only recently started to happen. We are not saying that the NHS is perfect. We believe that maintaining a patient's dignity is an important part of health treatment, and we try to do that for every patient at every stage in their health care experience.
I do not want to spend more time on the rag to which I have drawn the House's attention and which contains lies and distortion. The High Peak Conservative association has tried to rewrite history, so it is no surprise that the author wants to remain anonymous. If anyone is as outraged as I am, they can call Buxton 22521 and tell the High Peak Conservatives, so that they may learn for next time.
If we were to go back to a Tory NHS, as before, more beds would be scrapped; disillusioned staff would leave the NHS in droves; there would be no enforceable standards in care homes and nursing homes; people would be unable to afford private health insurance; some medical conditions would be virtually uninsurable even for the rich; lawyers would chase ambulances as they do in America; and the slimmest of safety nets would be provided for the underclass when they fell ill. When I hear Conservative Members criticise our management of the economy, our commitment to public services and our passion to rebuild the NHS, I know that we are right on this one.
The Chancellor is right to reform the national insurance system. The Prime Minister is right to prioritise the national health service. The Secretary of State for Health

205
is right to propose these NHS reforms. The NHS is at the heart of our commitment to public services available for all. We are doing what we are doing because it is right.
7.2 pm
Mr. Alex Salmond: I am in an unusual position. For 15 years in the House, I have watched Chancellors come and go and I have never yet been able to support the amendments of the law in Budget motions, but unless the Chief Secretary completely mucks up his summing up, I shall support the Government on the first motion on the Order Paper. I shall be able to do so, because at last a Budget has been proposed whose central tenet I agree with, which is that taxation should fund public services, that public services have been inadequately funded and a major transformation is required, and that that should be done from general taxation. I support that, and we and our Plaid Cymru colleagues will be delighted to endorse it in the Lobby this evening.
I promise Treasury Ministers that that will be the last complimentary thing that I shall say about them in my speech. I can see the relief on the face of the Paymaster General, who once voted for me, although she may not like to be reminded of it. It was during controversy over a Budget some years ago, in March 1988. The then Chancellor is no longer in this place. Subsequently, everyone realised what a total disaster it was, but we saw it at the time. However, I promise not to embarrass her any further with revelations from the past.
I support the central theme of the Budget. Unfortunately, there are some drawbacks. Hon. Members may ask what they are, and the opinion polls will tell them. According to the polls, the central theme is hugely endorsed by the public, but the same polls tell us that people do not trust the Government or the Chancellor and feel that they have been misled. They have been misled, because the same Chancellor who now proposes a radical shift of resources into the health service has been living a lie—indeed, two lies—for the past five years.
First, after each and every Budget since 1997, the Chancellor told the House that the health service was adequately funded. We all know that he used smoke and mirrors, double counting, triple counting and, on one occasion, quadruple counting of the investment in public services. At each Budget, he told us that the health service was adequately funded, but we now know that that was not true. Even the Prime Minister has noted the scars, as he puts it, in the health service from his personal experience—perhaps it was one of the confrontations that he had during the general election campaign. The Government now accept that, far from being adequately funded, the health service has been systematically underfunded.
The former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), strongly implied that, if he had been Chancellor in 1998, the health service and other public services would have received more funds than they have received from the current Treasury team. I see no reason to doubt his assertion, because that is an extremely embarrassing thing for any Conservative to say. Talking about himself as a big spender will hardly endear him to his Front-Bench colleagues, so I think that we can safely conclude that underfunding of our public services has been greater under the Labour party than it would have been under the outgoing Conservative Government.
206
Secondly, the Labour party has been living a lie because it has said that public services could be adequately funded without recourse to general taxation. For the first five years of the Labour Government, there was an ingenious search for sleekit, back-door, underhand taxation—anything that might not be noticed by the general public. Worst of all, in 1999 when, as the Secretary of State for Health told us earlier, public finance was out of control, Labour announced a 1p reduction in the basic rate of income tax. The Government tried to give the impression that a miracle could be worked: that public services could be adequately funded and there could still be a reduction in the headline rate of income tax. Now we know the truth. That was not possible—it was never possible. It was a deception, and that is why the public are totally cynical about the Government's arguments.
In Scotland, we fought an election in 1999 against that 1p reduction in tax. The Prime Minister, the Chancellor and the full panoply of the new Labour party, from the top right down to the hon. Member for Paisley, South (Mr. Alexander), attacked the SNP's proposal against a taxation reduction for the Scottish Parliament as wildly irresponsible. Labour's running dogs in the Scottish press corps tore into it, and said that it was dreadful to ask people to pay more for public services.
Now, three years later, the Labour party is doing exactly that, and the dogs in the Scottish press corps are running in the opposite direction, saying that this is the best thing since sliced bread and that a Chancellor should be brave enough to increase taxation to fund public services.
We and, to some extent, the Liberal Democrats, who pursued the same argument in opposition, although not in office in Scotland in the past three years—
Mr. Alistair Carmichael: Will the hon. Gentleman give way?
Mr. Salmond: Oh, all right.
Mr. Carmichael: The hon. Gentleman is perfectly well aware that the activities of the Scottish Executive, who include Liberal Democrats, are prescribed and limited by the money that they receive from this place. That is why there has to be some compromise in the programme that they implement.
Mr. Salmond: I understood that the Scottish Executive could vary income tax. I also thought that the Liberal Democrats did not want taxation to be reduced, and that that was the programme on which they stood. They have the ability, if they so choose, to pursue that programme and to say that they will not sell their principles for a ministerial Mondeo. They actually sold them for two ministerial Mondeos.
Mr. Carmichael: That was a cheap shot.
Mr. Salmond: It may be a cheap shot, but not with regard to private prisons. We are down here in this place, where the Liberal Democrats argue strongly against privatising the Prison Service, but Scotland's Deputy First Minister and Minister for Justice is at the forefront of privatising the Prison Service in Scotland. That is not a cheap shot, save at my constituents and others who will be on the receiving end of that deeply misguided policy.

207
We and the Liberals can have fun at the Government's expense, but my resentment is caused by the fact that we are also having that fun at the expense of others—those whose operations have been delayed or cancelled and who have been on long waiting lists over the past five years. The casualties of the Labour party's deception are the people who have suffered from the inability of even the hard-working health service staff to cope over those five years, due to chronic and consistent underfunding. I should tell the Government that although many, including me, welcome the change in line, people will have long memories regarding that period.
In some ways, the Conservative party, and certainly the right hon. Member for Horsham (Mr. Maude), the former shadow Chancellor, has been kind about the Chancellor's economic record. For example, I note that growth in the UK economy over the past five years is marginally less than in the five years under the right hon. and learned Member for Rushcliffe, although it must be said that his best year was his first, probably because he followed a right duffer as Chancellor. The right hon. and learned Gentleman was able to bounce back from that experience.
I also note that on competitiveness, which is the measure that the Chancellor used to describe as the critical one, the UK economy has declined from No. 4 in 1998 to No. 12, according to the World Economic Forum. UK growth over the economic cycle—the past 10 years—is 2.5 per cent., which is much less than Norway's 3.8 per cent., the USA's 3.3 per cent., the Netherlands' 2.7 per cent. and Ireland's 6.9 per cent.
Let us concede for a second that UK economic performance has been adequate over the past five years. That is certainly not true of the Scottish economy. Prophets are not honoured in their own country, so it is no surprise that the Chancellor is not honoured in Scotland. The UK economy bundles along at 2 to 2.5 per cent., but the growth rate in the Scottish economy is less than half that. In the Budget speech, the Chancellor talked of reaching out to full employment, but the International Labour Organisation measures Scottish unemployment at 6.6 per cent., which is a long way from full employment.
We might have expected the Scottish-based Chancellor to address the low growth in his own country and the relatively high unemployment in the Scottish economy. Instead, we get a series of measures that will make the position worse. A major revenue raiser in the Budget is the increase in oil taxation by the equivalent of £1 billion in a full year. The Press and Journal quoted the hon. Member for Aberdeen, Central (Mr. Doran) as saying that that will increase North sea employment. I must say to him and to others that it is impossible to take £1 billion out of the industry and increase North sea activity and employment. There are less damaging ways to increase taxation in the oil sector, but the Government have not found that method.
Chris Grayling: The hon. Gentleman makes an important point about North sea taxation. Does he share my view that taking £6 billion out of business right across the UK through higher employers' national insurance contributions equally cannot but damage employment?
Mr. Salmond: The House will recall that employers' national insurance has been described as a tax on jobs.
208
Indeed, the Chancellor should remember it as well, because The Times of 21 January 1997 revealed that sources close to him discounted any suggestion of increases in national insurance contributions, saying that they would amount to a tax on jobs. Obviously, an increase is serious for employment. Increased employers' national insurance contributions are serious for the public sector, including the health service, which will find itself giving back a substantial amount of the Chancellor's largesse. That is why, of course, I prefer the open and honest method of increasing income tax as opposed to the national insurance route. I suspect that the Chancellor would too, had he not made a previous commitment.
On oil taxation, my party tabled an amendment to the Budget resolutions asking the Government whether they have analysed the employment and activity impact of the major taxation change that they propose. Over the past 25 years, since we last had a popular Budget, £150 billion has come in from North sea revenues, which is £30,000 a head for every man, woman and child in Scotland. All I ask is whether the Government, in attempting to grab another £1 billion a year through the oil taxation change, have worked through the consequences for employment in Scotland.
I suggest that the Government look closely at the number of exploration and appraisal wells drilled last year in the North sea, which is half that for 1996. If they have done so and if they can tell us that they did their sums before introducing such a measure, they might also introduce a sensible concession to at least mitigate the otherwise serious employment consequences for the Scottish economy, which already suffers 6.6 per cent. unemployment according to the ILO figures.
The aggregates tax is a similar measure, although it is not on the same revenue raising scale. Indeed, it is not a revenue raising measure at all, according to the Government. None the less, as Scotland has plenty of aggregates and will not benefit proportionately from a 0.1 per cent. cut in employers' national insurance contributions, which is meant to be the balancing item, it will take about £20 million out of the Scottish economy. Extraordinarily, it will also make it extremely difficult for many trust harbours around Scotland to build sea defences to protect the shoreline against the rigours of the environment, unless the Government introduce a change. Have they thought through that aspect of taxation?
On that and other measures, the Chancellor's own economy—the Scottish economy—is suffering a much lower growth rate than elsewhere in the UK. He seems to be taking measures that will only make matters worse instead of better. Such is the perception of the Scottish economy under the Chancellor's stewardship that the chief executive of the National Australia bank—which owns Scotland's third largest bank, the Clydesdale—is reported to have said last week that the Scottish economy has been
"in permanent recession for…200 years"
and that the business opportunities are therefore "inferior".
It has to be said that Mr. Frank Cicutto's analysis of the Scottish economy is deeply flawed, not least because 100 years ago Scotland was probably the most prosperous country per head in the world. His manner in putting his point is also rather insulting. My point to the House is that the fact that the chief executive of the third largest

209
bank in the country has such views, even if they are foolish, hardly shows rising expectations of the Scottish economy. I strongly suggest that the Treasury team take cognisance of the problems in the Scottish economy and start making them better instead of making them worse.
7.18 pm
Linda Gilroy: I greatly welcome the Budget measures on health and welcome what they will do for people in Plymouth who need the service. I also welcome the role of the health service in Plymouth's economy, which has been a particular growth area since the decision to establish the Peninsula medical school was taken. Our local paper, the Evening Herald, has said in the past week that that decision will make the health service the largest employer in Plymouth as those measures work their way through.
I want to take the House back to the 1997 general election. I took a number of months out before it and spent a lot of time knocking on doors in my constituency. Unemployment was the most prominent issue raised with me. In every street and behind many doors, there were people who were unemployed or who knew an unemployed person or who feared unemployment.
In the 2001 election, I often knocked on doors during the day and found no one in. That was because people were at work. Moreover, I no longer had the team that helped me in 1997, and had to look elsewhere for volunteers. Again, that was because people were working.
That has a relevance for health. Several hon. Members have noted the welcome priority that has been accorded to health, but politics is the art of priorities. The priorities of this Government's early years mean that only 16p—or even less—of every new pound taken in tax is not now dedicated to investment in the public services, and especially in health services. The proportion used to be 43p, which went to tackling unemployment and to paying off debt.
The hon. Members for Truro and St. Austell (Matthew Taylor) and for Banff and Buchan (Mr. Salmond) derided the Government's tactics, and said that priority should have been given to health earlier. However, we now have a much more sustainable base for this important investment in the public services.
Mr. Salmond: What then was the purpose of the 1p reduction in income tax in the 1999 Budget? If the aim was to build a sustainable base for public services investment, why was tax reduced then?
Linda Gilroy: The hon Gentleman makes an appropriate point. That Budget was about making work pay, which was a very important part of our strategy aimed at tackling unemployment and getting us to the position that I have just described.
I do not argue that health was not an issue on the doorstep in the 1997 election, because it was. In 2000, I conducted a survey among 600 people in Plymouth, most of them constituents of mine. Those people knew about the severe and chronic problems with capacity that needed to be addressed, and about the need for more doctors and nurses. In that connection, we should not neglect the important role played by support staff, who often get left out.
The survey also found that people believed that we needed to improve access to general practitioners, that they wanted new treatments and technologies to be
210
introduced, and that they thought that the Government should act to drive up quality standards. The need to improve the number of heart operations performed is of particular importance in Plymouth, and marked progress has been made. The new heart unit established only five years ago to tackle 500 heart operations a year now deals with 2,000 a year. That shows by how much demand for that very welcome resource was initially underestimated.
I was fortunate enough to secure an Adjournment debate early in 2001, in response to which investment in the health services in Plymouth rose. Other hon. Members have said that not much progress has been made, but the amount of cash available to acute services in Plymouth had risen by 30 per cent. to £165 million, from £123 million. We are still very pressed, however, and much remains to be done.
In addition, activity levels had risen by 8.2 per cent. to 108,000 finished consultant episodes, and there had been a 23 per cent. rise in the number of nurses. In numerical terms, that is nearly 400 more nurses, and we have had to work hard to recruit them. There are 40 new consultant posts, and I have referred already to the Peninsula medical school.
If the Tories had remained in government, it is unlikely that progress remotely on that scale would have taken place. I could go on with a long list of examples of the progress that has been made with accident and emergency services, cancer services, NHS Direct, Care Direct, and so on. Although these improvements are substantial, they are still not enough to put right the years of underinvestment, and we have to accept that people in 2001 were not aware of the scale of the progress being made.
Various hon. Members have spoken about the cost of the alternatives to the Government's strategy. That raises another question about awareness. We are told that it is proper for the Opposition to be vague about their proposals. However, they were not vague before the election, when they spoke about the costs of "non-urgent" operations. However, such operations—involving surgery on eyes, knees, hips and cataracts, for example—are very urgent for elderly people.
Mrs. Browning: That allegation—peddled by the hon. Lady and the Liberal Democrat party—was categorically denied. I hope that the hon. Lady will withdraw it. Conservative Members have never used the term.
Linda Gilroy: I do not propose to withdraw what I said. The Conservative proposals at the time of the general election would have cost substantially more than the proposals in this Budget. The Wanless report says that drawing money from general taxation is a fair and efficient way to finance public services such as health, and that there is no evidence that any other method would deliver a given level of health care at lower cost. It also found that other systems are likely to prove more costly.
The Budget proposals mean that people on median earnings of £21,400 will have to pay £3.70 more a week, and that those on 150 per cent. of median earnings£32,000—will have to pay an extra £5.75. Those costs are known and evident, and they demonstrate that the payments represent what is, potentially, the best insurance in the world.
However, the people to whom I have spoken over the past week rightly want to be sure that the money is being used well. As I have said, there is a lack of awareness of

211
how much has been done and of how much alternative strategies would cost. There is a lack of awareness, too, about how much devolution to front-line services and how much reform there has been already.
Plymouth had one of the first primary care trusts in the country—one of the largest and most innovative, and it has had some success in bringing partners together to ensure appropriate treatment for patients and value for money. It has examined the possibility of establishing a common formulary for prescribing drugs, and has shown that, for a community of only 250.000 people, spending on drugs is just short of £30 million a year. Such transparency has allowed the PCT to initiate projects to make more effective use of the money.
The PCT's approach has ensured that money is saved, and that more appropriate treatment is available for people before they end up in an acute hospital. The PCT has also set up a clinic for back pain. Faster and earlier treatment by, and advice from, community health professionals have prevented people's conditions from deteriorating so far that the acute hospital has to intervene.
Reforms and the achievement of value for money are not confined to the PCTs. The framework for clinical governance proposes major reforms to drive up standards. Under the new arrangements involving the litigation authority, responsibility for insurance is to be devolved down from hospitals to lower levels.
The Tamar science park is becoming renowned. It is situated next door to Plymouth Derriford hospital trust. Last week, it was visited by my noble Friend Lord Falconer of Thoroton, and my hon. Friend the Minister with responsibility for small business also visited recently. Their visits provide an interesting insight. One small business flourishing around the hospital is K2 Medical Systems. I believe that the company will make a significant contribution to reducing the huge bill for litigation mentioned earlier by the right hon. and learned Member for Rushcliffe (Mr. Clarke). The estimates in the Wanless report suggest that savings of £225 million a year could be made, especially in connection with obstetrics. About £4 billion in outstanding claims are with the litigation authority. Savings on that scale annually could be redeployed to much better effect. K2, at www.k2ms.com/—for those who want to look up that small business—employed only two people a few years ago but now employs 23 people.
Savings would make a large difference; about 70 per cent. of claims relate to obstetrics. An improvement would be good not only for health budget efficiency, but would reduce the incidence of damage to children—one of the most difficult things for anyone to deal with.
National service frameworks are important in achieving joined-up action and thinking—Wanless envisages their roll-out to more parts of the health service. We discussed with the Minister of State, Department of Health, my hon. Friend the Member for Redditch (Jacqui Smith), the huge contribution that could he made by tackling osteoporosis. The incidence of fractures has risen inexorably: in 1960, there were 10,000 hip fractures; currently, there are 70,000 a year, at a cost of £1.7 billion. That has an effect on bed blocking: accidental fractures take more time than elective hip surgery. The Osteoporosis Society—I am a president of our local branch—has worked hard at
212
producing guidelines. The costs of £1.7 billion are detailed in section 6 of the national service framework for older people. If investment was made to deal with the problem, the health service would save a huge amount of money.
Clinical governance, dealing with more litigation locally and rolling out the national service frameworks to other aspects of health care are building blocks that my Front-Bench colleagues have contributed to the development and implementation of important policies. They will provide a robust foundation on which we can secure a health service delivered according to its original principles: free at the point of delivery; paid for from general taxation; and value for money that is second to none. It will be a true health service in the fullest sense of the word, not the ill health service that we have been used to experiencing.
7.32 pm
Dr. Richard Taylor: I remind the House that I am a retired NHS doctor and that I have registered interests in some investments in health-related businesses.
With some provisos, I welcome the Budget, especially the Chancellor's commitment to the original ideals of the NHS. I am a passionate supporter of the NHS, having worked in it for a long time, and I am delighted that the Government are giving it what may be its final chance to improve and succeed when funded from taxation. The Government realise that they are putting their head on the block by staking all on improving the NHS.
As an Independent Member, I want to examine briefly some of the proposals and then discuss what is missing. I am delighted with the devolution of power to primary care trusts. That goes back a decade or more to the 1980s when local, small health authorities were responsible for running their small part of the health service. At that time, there was much more input from the hospital consultant; and, with the loss of the strict purchaser-provider split, I would like to see some input from hospital staff to PCTs. GPs should also have some accountability for hospital services.
I am delighted that power is moving away from the centre, but will devolution be real? Will central diktat still sway some decisions? I am thinking especially of NICE guidelines, which I fear might sway local priorities and override local decisions. Today, I received a letter signed by 30 senior clinical oncologists, expressing their disagreement with a recent NICE decision. The letter states:
"Quite simply, NICE has got this one wrong."
I am worried that NICE may sway priorities.
I am delighted that the Commission for Health Improvement has been given more power. It is a logical step to amalgamate it with the Audit Commission and the National Care Standards Commission. That will avoid so many visits to trusts and health authorities and demands on their time. The CHI showed its capabilities by promptly removing stars from hospitals that it had inspected, illustrating the lack of reliability in the current star rating system. I am waiting to see whether league tables become more reliable under the new organisation.
I am rather worried that local authorities may be penalised for delayed discharges, even when a strong reason for such delays could he that a health authority had reduced capacity without considering the need for intermediate care.

213
I approve of the plan for electronic booking of all appointments by 2005, although it is terribly challenging—an extremely tall order. It implies that IT systems throughout the health service will be able to talk to each other. We are also to have electronic patient records by 2008. The Government will be judged on such measures.
The loss of community health councils is disappointing. I cannot put it better than the Opposition health spokesman in the other place who, in a recent letter to The Independent, stated:
"CHCs will be replaced by an incomprehensible cats cradle of new committees moulded by the Government without the independence of CHCs."
I have one or two comments on what is missing from the proposals. We need open, honest discussion of health care rationing. Political parties tend to veer away from that and are frightened of it, but it is essential.
Other hon. Members have mentioned the reform of health care management. Sir Terence Conran, writing in The Sunday Times recently, pointed out how marvellous we are in this country at organising events such as the Queen Mother's funeral. We have some superb businesses in my constituency: we make the best carpets; and amazingly, in the middle of England, we make superb ocean-going cruisers. We can do things well. In parts of the NHS we are doing that, so why are we not doing it in every part of the NHS? Excellent management is important.
As other hon. Members have mentioned, there is nothing in the proposals about abolishing waste. Hon. Members have referred to the report by Stuart Emslie, although it has been somewhat brushed aside. In December 2001, it noted that the removal of waste and fraud could save the NHS £7 billion a year. Sick pay and agency nurses account for £2 billion of that amount. Hon. Members who read The Sunday Times—one of the more reliable papers—will have seen that it recommended that people buy shares in a firm specialising in nursing agencies. Seven years ago, its share value was 44p; at present it is 560p.
The answer to the problem is a massive pay rise for nurses. That would go against devolution, but it is the one measure on which the Government should override devolution. It would stop us losing nurses who go abroad. Nurses would not leave the profession. They are our most precious resource and we are wasting money on agencies when we should be paying it direct to them. That is the only directive that I want the Department of Health to give the devolved bodies.
I will not go into all the details of the waste, but I shall list a few of them. We have heard about adverse events, such as delayed discharges, hospital-acquired infections, the over-prescription of drugs and clinical negligence claims. However, we have not heard about two of them: the cost of pay and locum fees when doctors are suspended—those suspensions can go on for two years and more—and the cost of patients not turning up for appointments. I met representatives of a firm today who think that they have an answer to that issue, and they will be persuading some trusts and the health authority to try to get to grips with it.
Dr. Evan Harris: I always worry when I hear doctors attacking patients for not turning up. Patients are often too
214
ill to do so because they have deteriorated while waiting—some may even have died. No clinic that I ever worked in—perhaps the hon. Gentleman will remember this, too—did not over-book to allow for missed appointments, so it is hard to argue that the predicted non-attendance rate costs money when clinics and operating lists are over-booked. That seems like blaming the patients.
Dr. Taylor: I take the hon. Gentleman's point. I am certainly not blaming the patients, but published studies have shown that tremendous savings can be made in that way.
I shall move on to deal with local waste. I was very envious of the hon. Member for Erewash (Liz Blackman) because the majority of letters that she gets are complimentary. I wish I could say that since being elected I had had one letter that was complimentary about the NHS. I am sure that all hon. Members have examples of local waste in their own constituencies. I have the shining example of the closure of all acute in-patient services at a charter-marked efficient hospital, which many sources now readily admit was purely for financial reasons. One can imagine my constituents' derision when they are told that 40 new hospitals will be built, and one that stands largely empty could reduce that number to only 39.
Local affairs are made worse by the inadequacy of the replacement service provided; I receive letters about that almost daily. This weekend, a local Sunday newspaper damned, with local people, the replacement services that are available. Even worse, there is now a plan to spend £14 million on gutting a six-year-old block to recreate what, in the words of a disillusioned manager, we have got already.
Thus I shall support the Government's giving the NHS funded by taxation a final chance, but I draw to hon. Members' attention a quotation from a playwright. In 1624, in a play entitled "The Parliament of Love"—this is certainly not the Parliament of love, but it is a Parliament and the words are very relevant—Philip Massinger wrote:
"All words, and no performance."
The Government will be judged on their performance from now on. We have the words; we are waiting for the performance.
7.43 pm
Mr. Adrian Bailey: The Budget will be welcomed in my constituency. Hon. Members will be aware that West Bromwich, West is in the heart of the industrial black country—the country's manufacturing heartland. Before I talk about the Budget's relevance to my constituency, I should like to say that today I am wearing the latest manifestation of the entrepreneurial spirit that still lives in the black country. I am of course talking about my St. George's rose, which is promoted and manufactured by the Tipton branch of the Royal British Legion. May I tell those hon. Members who have asked me where I got my rose that, for future St. George's days, I will be happy to contact the local officers to ensure that they are not denied that latest privilege and manifestation of the industriousness of the area that I represent?
I shall move to the specific Budget issues. My constituency was devastated by the monetarism and the boom and bust of the Tory Government. During this

215
four-day debate, I have listened to dire warnings from Opposition Members about the state of British economy and the damage that the Budget would do to British industry. Those warnings sound hollow to my constituents. That so-called business-friendly Tory Government, who, by their long-established contacts and innate ability, are so good at managing the British economy, caused two recessions when almost every major manufacturer in my constituency—some of them household names—disappeared. They left behind devastation, and people's livelihoods and prospects were wiped out. To compound that, round after round of public sector cuts took further money out of the local economy and deprived people of their local services in the name of trying to create the very sort of enterprise and initiative that they had wiped out in the area.
Since then, under Labour, we have had two recessions, but employment has risen and economic growth has improved. My constituents will judge by their personal experience, and I am confident that they will know how to judge the improving prospects and public services under Labour, compared with their experience under the Tories, and that they will back the Government.
The reasons for those improvements are the low interest rates and low inflation which have underpinned our economic performance. To be fair, I have heard Opposition Members pay credit to the Government for that. However, Opposition Members have two explanations: one is that we inherited some sort of largesse from the previous Government; the other is that the true, debilitated state of our economy is being masked.
I have also heard Opposition Members say that the I per cent. extra national insurance cost will devastate local industry and be a tax on jobs. I am confident that that prediction will be as accurate as their prediction about the independence of the Bank of England and the possible cost in jobs of the minimum wage.
I do not deny that my constituency still has a long way to go before reaching the affluence of some areas, but unemployment in the most deprived ward has dropped from 25 per cent. in 1994, to 8 per cent. now—still too high, but an enormous improvement. Behind every percentage statistic, there is a tale of new hope, new commitment to work and a new contribution to the local economy.
The package of measures to help small businesses will be welcome. We no longer have the huge manufacturing employers in the area, but new businesses are starting up and creating jobs. The corporation tax reduction, VAT reliefs and research and development credits will all play a part. I also welcome the StepUp pilot scheme. Its aim is to provide a further 360 people in the most deprived ward in my constituency with the opportunity of a year's employment for the first time in many years, so that they can gain self-respect and self-discipline and enjoy the knowledge that they are contributing to the local economy.
I am sure that the 1 per cent. increase in national insurance contributions, which has been long debated in the Chamber, will be opposed by some. However, if one looks at what companies are getting for it, it is obvious that it is an investment that will benefit everybody. Yesterday, I heard my hon. Friend the Member for
216
Telford (David Wright) talk about the cost to industry of sickness at work—£10.7 billion a year. If only a proportion of that is saved, that will be an enormous benefit to industry.
I read in yesterday's Guardian that late trains cost every company £21,000 a year, so our investment in the transport system has an obvious dividend for business. Other transport investments are much sought after in my local area, and they are being provided. Similarly, local companies want more police—and we are investing in more police—because they know that that reduces the chance of burglaries and the costs that accrue from them.
I could go on, but in essence the 1 per cent. on national insurance will provide the investment for a healthy, well educated, more mobile work force. That is an enormous long-term investment for local industry. Investment in human capital is every bit as important as investment in other capital.
I turn to health and social services. When I hear Conservative Members talk about the health service, I am not surprised that they are slipping behind in the opinion polls in that respect. Smoke and windows is a phrase that is often used in this House.
Mr. John Bercow: Smoke and mirrors.
Mr. Bailey: Sorry, smoke and mirrors. That is evident in the contributions made by Conservative Members. They talk seductively about certain aspects of health services in other countries, and consistently and progressively rubbish those in this country, but provide no overall consistent picture of what their alternative would be, so that the electorate can make a judgment. People in my constituency want more doctors and nurses and better facilities, and they know that those must be paid for. In all the comments made by Conservative Members, I did not hear them once mention how their policies would be paid for. Ultimately, my constituents believe that the increase is the fairest way of funding the national health service.
I want to make a plea relating to my constituency. Like many industrial constituencies, it suffers a legacy of ill health owing to its industrial background, as well as poor life expectancy, lower birth weights and so on. Those statistics are improving, but there is still a long way to go. That is why the area was designated as a health action zone. Those involved in it are pioneering a range of joined-up activities for developing more healthy lifestyles, including campaigns on exercise, healthy eating, teenage pregnancies, sure start and smoking cessation programmes, to name but a few. The problem is that funding for those programmes is announced year by year, and those working on them do not feel confident that they will be able to do so over the long term. Now that we have a five-year commitment on health spending, I hope that the funding for health action zones will be made more specific for longer periods to reduce the risk that those who work in them, and do such a good job, may move elsewhere.
The Budget will be of enormous benefit to a company that we are privileged to have in my constituency—Huntleigh Nesbit Evans, the major manufacturer of NHS beds and trolleys. Those of my constituents who are employed there will be reassured by the long-term commitment to a 7.5 per cent. growth in health spending.

217
I want to comment briefly on social care. My local authority, Sandwell, welcomes the commitment on 6 per cent. growth. It believes that that should correct the difficulty that it, in common with most other major metropolitan authorities, has faced over the past few years in balancing its social services budget. It has a tradition of working in partnership with other agencies—it has received Government commendations for doing so—and welcomes the extra flexibilities and allowances that will be given to those who demonstrate good practice in that.
However, I have reservations about the penalty system for local authorities that are unable, for various reasons, to meet their targets on bed blocking. Although I can understand the Government's reasoning as regards the need to take action where partnership working is not taking place, in some areas local economic conditions and the scale of local private provision are such that local authorities have little control over the matter. Any penalty programme should be applied sensitively.
My constituency is crying out for the measures in the Budget. It is a Budget that will help the local economy; a Budget for the middle and lower income families who predominate; a Budget for better health care, which is greatly needed; a Budget to provide the basic requirements for a good standard of living for those on lower incomes; and a Budget for small businesses to develop in the area, which has suffered so much in the past. Above all, it is a fair Budget for constituencies like mine.
7.57 pm
Mrs. Angela Browning: I want primarily to deal with the aspects of the health service that are covered by the Budget. We have heard a lot today about the amount of taxation that will be raised specifically for the health service over a five-year period and the reason why the Government felt it necessary to focus the Budget on one particular Department.
Labour and Liberal Democrat Members have sought to paint the Conservative position as being that we are not in favour of spending more money on the health service and that even if we were, it would not be publicly funded money. That is not true. Our position is not that we are not willing to spend more money—or even more public money—on it, but that we believe that, over the past five years, the Government have spent more money on health without delivering improvements. We therefore question the proposal that the tax increase in the Budget will do so.
I want to be constructive in my comments by addressing how the NHS is organised, especially in relation to its management and what needs to be done to make it more effective and to help it to deliver the benefits that we all, as constituency Members, want for our constituents.
Conservatives
"believe in the ideals of the NHS—comprehensive care, available to all, on the basis of need not ability to pay. It is 'there when you need it, open to all, no matter what your circumstances…no ifs or buts, no small print'. These are ideals worth fighting for."
In putting that on record, I have cited the comments of the leader of the Conservative party in a consultation pamphlet that was published only this month as part of a
218
genuine attempt to find solutions to problems and to put before the British electorate policies in our name that have been well researched, tested and costed.
Mr. David Miliband: Will the hon. Lady give way?
Mrs. Browning: I hope that the hon. Gentleman will forgive me, but those of us who are speaking at the end of the debate agreed to limit our speeches, and I shall try to finish speaking before my 15 minutes are up.
I wanted to begin by putting the Conservative position on the record. I shall now concentrate on the current position of the health service. It is not the same as it was in 1997, when the Government took over. Ministers have made a plethora of pledges and announcements, sometimes accompanied by money. Despite that, the health service has not delivered. The Labour party's 1997 general election pledge card stated that it would reduce NHS waiting lists by treating an extra 100,000 patients as a first step by releasing £100 million saved by cutting NHS red tape. We know that waiting lists did not decrease, but grew by almost 100,000 before they started to fall. There is more, not less red tape now. I shall give some examples of red tape that could be hacked not only to make savings but to affect people who work in the health service.
I worked in the health service under the previous Labour Government, when we were all crossing picket lines to get into operating theatres. [Interruption.] It is a matter of record. Nowadays, more and more health professionals at all levels find increasing bureaucracy. More decisions are made centrally and more systems and initiatives are set up while Ministers and other bureaucrats try to influence the way in which health professionals carry out their jobs. That not only detracts from resources at the sharp end, but has a terrible impact on the morale of people who work in hospitals and in the health service. I shall give a couple of examples.
I raised one example with the Secretary of State at Health questions. It was brushed aside, which is a typical occurrence at Health questions, and the Secretary of State implied that I was expressing only my view. I was not; I was conveying the view of doctors in my constituency. The problem that I raised must be sorted out if improvements are to be made.
In the past, when GPs believed that the condition of a patient on a waiting list had deteriorated, they had the opportunity to refer the patient back to a consultant because they believed that he should be seen again and perhaps be treated more quickly because, in their clinical judgment, the consultant should be made aware of the new circumstances.
A GP in my constituency wrote to a hospital consultant, and received a reply, which stated:
"As you know the government has specified that no patient should wait longer than 15 months and I am afraid that as…waiting lists are only a few weeks below this date we are presently only operating on long waiters, much against our better judgement. However if even a single patient waits longer than 15 months there are enormous financial implications for the Trust which will then result in even longer waiting lists for patients."
When that is unscrambled, it means that the consultant is telling the GP, "If you think your patient is deteriorating, don't refer him to me because I'm not going to do

219
anything. Although I'm a consultant in a hospital, with all those years of training and experience, I am acting not on my clinical judgment but on a directive from central Government through the hospital management. If I fail to do that, there will be financial penalties."
In practice, financial penalties mean that hospitals that fulfil their waiting list targets will receive an additional sum of money that they can spend on patients. However, although some patients get treated more quickly, others who clinically deteriorate are not seen. Such micro-management and micro-interference with the judgment of GPs and consultants about what is right for an individual patient at any time in a specific hospital or on a waiting list does not deliver for patients. It makes GPs and consultants feel that they are not doing the job for which they trained because the executive decisions are not left to them. Instead, those decisions are second-guessed and orchestrated by others who do not have their experience.
We have discussed morale among medical professionals. I include nurses in that discussion because there is a big problem with nursing, not least our reliance on bank nurses. Of course, they have a use, but it is not the best way to proceed either economically or from a patient's point of view. Continuity of nursing on the ward helps to provide better patient care. Anyone who has worked on a hospital ward will appreciate the obvious advantages of continuity of care by a team of nurses who regularly deal with the same patients as they go on and off duty.
If we start to lose the professionals in our medical services and in our NHS, while we may successfully recruit new people, we will reach a point when we have lost a vast number of people with many years' experience. They will have left the system by early retirement or taking up other jobs. That will leave the health service, like all other public services, with a bank of professionals who tend to be younger but less experienced. We will not have the vital mix of experience that we need for continuity and training.
The way in which the money that the Budget allocates is spent and some key changes are important. A great orchestrated audit that will not kick in for another four years, and certainly not until after the next general election, is surely not the priority for the additional money. The Government should make practical suggestions for resolving the problems on the wards, low morale among medical staff and what patients perceive as simple matters. For example, people should be able to go into hospital in this country for general surgery and feel confident that they are not at risk from hospital-acquired infections.
I appreciate that there is an argument about prescribing antibiotics, but claiming that all MRSA is down to that problem is a smokescreen. I know from my constituency lists and debates in the House that people fear MRSA and that they acquire it in hospital. One constituent is confined to a wheelchair, but was not when he was admitted for a routine hip operation. He got MRSA; that was his experience of a hospital in this country. We must use the extra money to deal with such matters. It is worrying that despite such experiences in the NHS, so many resources are spent on unnecessary administration or double checking.
220
I support accountability but much double checking in the NHS appears bureaucratic and unnecessary. I received a report about GP appraisals, which will be introduced in my constituency. In principle, I agree with GP appraisals, but do they require so many resources, so much administration and bureaucracy?
A newsletter, which provides an update on GP appraisals, states:
"the most difficult areas remain: the funding for both appraisers and appraisees; the selection and training of sufficient appraisers to make the system viable; sufficient understanding or training appraisees so that the system is seen to be non-threatening, formative, educative and supportive; how long is needed for the process both in the set up and subsequent years. We are close to agreement on the cost of each appraisal based on a compromise of timing as to how long the process will take."
That is really out of this world. Surely to goodness our local medical committees should not have to get involved in something so complex and bureaucratic—which must, by definition, take up valuable resources, not least doctors' time—to set up a system that is so bureaucratic.
My worry about endorsing this Budget is not about the principle of spending more money or about the fact that the money is coming from the public sector; it is that there is no confidence in the Government to deliver. Throughout the public sector, there has been an inability to deliver. [Interruption.] It is not rubbish. If the House will bear with me, I shall find the piece of paper that I am looking for. Ah, here it is, to my right. I do not often move to the left.
Let me conclude with this comment about the Royal Bolton hospital, which was written by a 73-year-old gentleman. He says:
"The hospital is deep in debt, bottom of the league of North-West hospitals, and 80-year-old patients are kept on trolleys in its corridors for ten hours without meals."
This was written by a former Labour Member for Bolton, Mr. David Young. He goes on to say:
"As the longest-serving MP Labour has ever had in Bolton, I got the go-ahead for what is now the Royal Bolton Hospital. But New Labour has effectively destroyed all I worked for over 23 years."
That indictment, in a letter to the Daily Mail published only last month, shows only too clearly that the Government have got to start taking delivery seriously. The health service has deteriorated under their stewardship. That is a reflection not on the people who work in it, but on the Government's ability to manage and to deliver. I am very sceptical about their ability to deliver this money in a way that will make a difference to the staff and to the patients who rely on our NHS.
8.12 pm
Mr. Hilton Dawson: It is a great pleasure to take part in this debate on a very fine Budget indeed, even when suffering from a raging sore throat—highly appropriate in a health debate.
I have been sitting here for some time reflecting on the words of Opposition Members, which have often been elegantly expressed, although not as seductively as my hon. Friend the Member for West Bromwich, West (Mr. Bailey) might like to claim. The last few hours have been most instructive, because although we have heard fine words, pleas for debate, and good, intelligent points being made, we have heard no passion, commitment or determination to address the problems of the health

221
service. The point of the Opposition is to oppose, but in nothing that the Conservatives have said has there been any hint that, if this country were unfortunate enough to have them back in power, they would ever take on any of the real issues in the health service, invest properly in it or accord it the high priority that it needs.
I am going to stop using the term "health service" now, and start talking about health and social services, because this has been a Budget for social services. It is not true that we have not seen any investment or results in social care over the last few years. The quality protects programme, to name but one, has produced tremendous benefits by addressing the serious problems—bequeathed to us by the Conservative Government—of lack of support for young people in care, and by investing in residential care, fostering and adoption, advocacy and services for the most vulnerable children in society.
The point of this Budget is that it will allow local authorities to build their base budgets and develop their base-line services for social services, and to build on those opportunities. Most importantly, it will allow local authorities to address the serious issues facing elderly people in our constituencies—issues right at the interface of health and social care. They relate to the quality of care afforded to older people, the range of services that we provide for them, the way in which we deliver those services, and the need to ensure that they reflect the needs, wishes, feelings and views of those individual older people.
Thanks to the 6 per cent. increase for social care, councils will be able to increase fees to stabilise the care home market, and to work properly in partnership with the private and voluntary sectors. Councils will be able to develop different forms of care—rehabilitative care, for instance. They will also be able to offer older people more choice in the sort of care that can be made available to them in their own homes.
More important than anything that has been said in the Budget debate so far are the words and prescriptions of the Wanless report. Wanless explicitly says that health and social care are inextricably linked. The Government know that poverty and poor health are inextricably linked, and they recognise that the mechanisms of health and social care are inextricably linked. Those mechanisms are related to how long older people stay in hospital, to the quality and range of services that can be provided, and—most importantly—to the quality of life of older people and the way in which their range of needs can be met.
The excellent Wanless report points out that substantial increases in resources are needed, and the Government are introducing a 7.4 per cent. increase over five years for health and a 6 per cent. increase for social care. Wanless also says, however, that his review had neither the time nor the resources to develop a whole systems model and approach to reorganising care in the future. He had no time to build projections for social care at the same level of detail as he did for health care.
The Government cannot rest on their laurels over what has been achieved through this Budget; they need to move on. There needs to be an immediate extra study of the trends affecting social care to ensure that projections of need, of finance and of the sort of modernisation that is required just as much in social care as in health care are fully integrated, and that health and social care are brought together to meet the holistic needs—the all-round
222
needs—of people living in our communities. That will require major work by the Government and also by the local authorities.
My local authority, Lancashire county council, is having a difficult experience at the moment; it is reviewing its provision for older people, which has been a painful process. I fully support the need to review services, but this review has not, so far, been developed in conjunction with health care—although health and social services need to work together—with the private or voluntary sectors, or with other organisations. The review has certainly not been conducted in close partnership with older people living in the community, or in residential care in Lancashire, or with their carers and families.
The opportunity offered by the Budget, the strictures of the Wanless report and the work that the Government have done on the NHS framework and to build capacity need to be taken to heart by local authorities and all agencies that work with older people so that all those measures are successful. We need to end the uncertainty for constituents throughout Lancashire. We need to stop the bickering between vital parts of the care system and to redevelop services so that they work in partnership on the basis of what the Government have laid down. We need to work back from the patient and carer so that we define their needs and how to provide services.
Health and social services need to adopt a corporate social responsibility across organisational barriers. They need to integrate staff and planning processes, to be quality driven and to derive from shared visions of how services should be delivered. Our services need to take a long-term perspective, to take account of the fact that there is an ageing population and to be financially and professionally viable. If we take the Wanless recommendations on board and develop an integrated projection for the future of health and social care in conjunction with the Budget proposals, it is clear that the Government are giving organisations such as Lancashire county council an opportunity to improve services.
I trust and hope that the social services department and the health service in Lancashire respond to those opportunities. I also hope that the private sector gets around the table with those agencies to deal with the problems properly so that from now on they work together in a true partnership. It is especially important that they work with elderly people in residential care and the wider community, and their carers and families, so that we develop the high-quality health and social care services that people need. We have to put the bickering, falling out, uncertainty and sheer anxiety of the past few months behind us.
8.22 pm
Mr. David Amess: "They've taken leave of their senses"; "It's a disaster"; "I can't believe what they've done"; "They've broken their general election promises"; "They've got it completely wrong"—those are just a few examples of the responses to the Budget that I received when I recently campaigned in the local elections. Where on earth the opinion pollsters get their ideas from, I do not know. They should come to Southend, West where they will find that the verdict of the electorate is that the Budget is a complete and utter disaster.
The Government have spent six years trying to massage the media response, but even they must admit that the response to the Budget has been a disaster. Indeed,

223
the day after the Budget was delivered, the Government would have struggled to find a headline that was sympathetic to them, and that includes in the two tabloids that most consistently support them. The City also gave the Budget a big thumbs down.
However, the reaction of Labour MPs was the most interesting to observe. They were extremely excited last week. They waved their Order Papers at the end of the statement and thought that it was marvellous. As soon as I observed their reaction, I knew that the Budget was an absolute disaster for the Government, and it could not have happened to nicer people.
My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) made a magnificent speech in which he destroyed the reason behind the Budget. He outlined clearly just how the Chancellor has got it completely wrong. I also greatly enjoyed the speech by the hon. Member for Truro and St. Austell (Matthew Taylor). Long may he continue to make such unpleasant remarks about the Conservative party, further undermining the huge difference, thank goodness, between us and the Liberal and Labour parties. As long as the Liberals come up with such crazy ideas like the legalisation of cocaine, the general public will see what a complete shower they are.
In 1992, socialism was defeated and the ghastly new Labour party emerged, but last Wednesday Labour returned to type. It returned to the times when it said, "Whatever the problem is, we'll spend money on it and it will be solved." I was brought up in the east end of London on the ethic that every penny counts and people should spend money well, but this crazy Government waste money. In the past year, there has been a huge underspend in the Department of Health alone. I do not know how the Government think that £6 billion will fix things over the next five or six years.
The whole point of the NHS and its past successes is that it depends on human resources—the women and men who work in it. I know that the Labour party tries to cast aspersions on the Conservative party and to spread smears, but none of that will work any more. All Conservatives applaud the women and men who work in the health service. They do a magnificent job—it is the organisation that is wrong. Without root-and-branch reform, the Government's NHS plan will be a disaster. As ever with Labour, the plan was brilliantly written, giving the impression that the money will be well spent and that reform will follow. However, if one goes through it carefully, it is obvious that there are no big new ideas and that it will be a disaster.
The Conservative party believes in the NHS ideals, but Britain today is further from those than at any time since the NHS was founded. It is wrong that people should not be offered the best treatment regardless of their ability to pay, but that is what the Labour party has ended up offering the people of this country.
Waiting lists are rising again and hospital beds are blocked because care home beds have been closed, and all that is the Government's fault. During the Committee consideration of the Health and Social Care Bill the Government would not listen. They were telling us that they would get all the care home owners together and
224
listen to their concerns, but certainly in my constituency it is too late and many care homes have closed. They are looking to develop other services for local residents.
The odds of surviving cancer in Britain are among the lowest in Europe. Last year, 250,000 people without any insurance paid for their operations—more than ever before. The Budget is a missed opportunity. The Government say that they have analysed systems in other countries and we have nothing to learn from them, but they have the brass neck to send our patients abroad to have operations. What hypocrisy! We do have something to learn from other countries. Germany has no national waiting lists and Danish patients have a legal right to treatment within four weeks of seeing their GP. The Conservative party has a completely open mind about the lessons that we can learn from other countries.
Derek Wanless is continually mentioned. Quite how he has been brought so dramatically into the equation I do not know. In his report he expresses doubt that the Government's existing spending commitments can be used wisely. His report outlining a 20-year vision is already flawed by a lack of information and will have to be rewritten in five years.
Three hours ago, two or three Labour Back Benchers rather tamely intervened on the Secretary of State, but it is interesting that no Labour Member has referred to the letter from the Local Government Association which all hon. Members have received today. I am interested by the letter because the LGA represents all councillors throughout the country, and the letter is signed by Jeremy Beecham, for Labour; Gordon Keymer, a Conservative; Chris Clarke, a Liberal Democrat; and Milner Whiteman, who is independent.
The LGA says that the Government have got things completely wrong. It castigates them for failing to consult local government. This Government do not consult on anything, except perhaps asking those in a Cabinet meeting whether they want a rich tea biscuit or shortbread. The LGA letter says that central Government are already chronically underfunding social services and that there is a problem in the supply of residential care, for which local councils are not responsible. Labour Members will find that more and more of their local councillors castigate them.
Unlike the Government Whip, I have been listening to the debate for more than four hours. We all draw on our personal experiences of the NHS, and I have had four such experiences recently, two involving relatives and two involving friends. The first case is that of an aunt who is now dead. She was an honest, straightforward lady who deserved better treatment than she received from the NHS. That case has been going on for 18 months and the family will not give up the fight to get justice for her. The husband of another of my relatives was offered a care plan when he went home following NHS treatment, but it was never delivered.
At a very early age, the wife of a friend of mine died within 45 minutes of having a brain haemorrhage after coming home from work at the blood bank centre. She was the mother of four children. When I went with my friend to view his wife's body at the hospital—you can imagine the emotion, Madam Deputy Speaker—we were given an appointment time, and we did not see the body for an hour and a half. That is a disgrace, and the organisation was shambolic. The £6 billion will not fix that at all.

225
Finally, perhaps the biggest insult of all concerns the guy who runs my office. He tripped over outside his property seven weeks ago, and the NHS failed to diagnose that he had broken his shoulder and the bones at the base of his thumb. He is well and truly messed up.
This Budget marks the end of new Labour, and for that the country and I rejoice.
8.33 pm
Andy Burnham: Since last week's historic Budget statement, there have been questions, not least from Opposition Members, about whether the NHS is the right model on which to spend the substantial resources that are about to flow from the Government. I would encourage anybody with such doubts to visit north America, as I did with the Health Committee, including, I might add, the hon. Member for Southend, West (Mr. Amess), to see health care in Canada and the US for themselves.
There, side by side, are two health care systems, one offering high-quality care to the whole population, and doing so cost-effectively, and the other proving excellent for a minority but inadequate for many and intensely bureaucratic and costly. I was struck by the number of US health professionals who bemoaned to us the inherent unfairness of the system in which they work. We were joined on our travels by the hon. Member for West Chelmsford (Mr. Burns), a Conservative spokesman, and I am surprised that he has not taken those messages back to his Front-Bench colleagues who talk about learning from abroad.
Mr. Barker: Will the hon. Gentleman give way?
Andy Burnham: I am sorry. I do not have a great deal of time.
Perhaps the hon. Member for Woodspring (Dr. Fox), like Mr. Eriksson, is keeping his options open. He is attracted to the Swedish and Italian models but does not fancy the British much. I am picking up a feeling that there is unease on the Conservative Benches about that policy, as the hon. Member for Woodspring scours Europe for a new policy of his own. I remind the Conservative party of something that the hon. Gentleman said during the general election:
"I think my commitment to the NHS is quite clear. We've said we will maintain a fully comprehensive NHS free at the point of use in our manifesto. I've said that ever since I can remember being in politics and that's something that will go on."
Until now, that is, as The Mirror tells us that the hon. Gentleman is rubbishing the NHS as part of a deliberate strategy to run it down.
Clearly, Conservative politicians were quick to appear in media studios at the weekend to distance themselves from the views expressed by the hon. Member for Woodspring in The Mirror. The hon. Member for Buckingham (Mr. Bercow), who has left the Chamber, was one of those who was quick to say that it would be nonsense to move away from and break up the NHS. Leading Tories were quoted in The Times yesterday expressing their doubts and saying that Labour will have a field day with the remarks of the hon. Member for Woodspring. They say that because they know that markets in health care create bureaucracy and two-tier access, which is what we saw when they introduced the NHS internal market.
226
If the Tories have a point, and occasionally—very occasionally—they do, it is that the NHS has hitherto had a flaw in that it has not been sufficiently patient-focused. I agree that, for too long, NHS managers have been too insulated from public opinion and patient opinion. They worry more about Whitehall hearing the echoes of dropped bed pans than their next door neighbours. With systems to check that new money is spent wisely, we need more patient-focused responsiveness and accountability.
A good illustration of the problem is provided by the NHS complaints system. I have long had concerns that people in the health service treat it as a paper exercise with limited value. I have recently had family experience of trying to make a complaint in the NHS, and the onus is on encouraging people to drop their complaint as soon as possible. When complaints are not big enough for the General Medical Council, they are referred back to local level. People quickly find, however, that there is often no appetite to pick up those complaints and address the issues head-on. I therefore believe that the reforms being considered by the House with regard to patient involvement and empowerment must be accompanied by a recognition that the public, who, after all, are paying the bill, have a right to be taken seriously when making a complaint.
As always, those rights must come with responsibilities. Across the national health service, we are hearing how the prescribing budget is soaring. Currently, in my constituency, overspend is 12.1 per cent., and it is 7.2 per cent. nationally. That is partly driven by national service frameworks, which have brought welcome improvements in my constituency. It is also the case, however, that the public are becoming more demanding.
I recently met a group of Leigh GPs and heard them talk of visiting patients with medicine cupboards full of unused prescription treatments. They also talked of a demand for lifestyle drugs such as Losec—an anti-indigestion treatment that also, I believe, happens to be the best hangover cure known to man. Perhaps it should be made available in the Tea Room. When prescriptions are given to the public, perhaps it would help if the price of that treatment was printed on the medicine bottle to encourage more responsibility when people have those treatments and go back for more. I also encourage Ministers to consider the example of Canada, where a very progressive system of prescribing according to ability to pay has been introduced.
It may also be time to review the exemptions for prescriptions and to come up with a fairer system. The prescribing of Statins, however, as required by the national service framework, will be one of the most effective health interventions and will tackle the very high rates of coronary heart disease in my constituency. The high rates of ill health in my constituency mean that that policy will cost more.
That brings me to the formula whereby the new resources are to be distributed. Just as welcome as the new money is the Department's commitment to review the formula. This year, the system will provide £858 per person in Leigh, which is £37 less per person than neighbouring East Lancashire health authority will receive, £53 less per person than North West Lancashire health authority, £61 less per person than Wirral health authority, and £67 less per person than Sefton health authority. Given that in his annual report the chief medical officer highlighted the fact that in parts of my

227
constituency death rates are the same as they were in the 1950s, there must be something wrong with the current formula if those are the outcomes it produces.
The formula gives equal weight to four factors: age profile, additional need, market forces and emergency services. It will never give us the resources that we need to tackle health inequalities. Older people draw heavily on the NHS, but the older population is one that is, by and large, healthier and living longer as a result. Any new system must give greater weight to deprivation and rates of ill health, so that the money follows sickness.
I have a word of warning about the market forces factor in devising a new formula. We have heard today about the difficulties facing key workers in London, but inner London health authorities already get significant resources to reflect those difficulties: for example, Lambeth, Southwark and Lewisham health authority gets £1,076 per head, and Camden and Islington health authority £1,204 per head—substantially more than Leigh's £858 per head. There is a good reason for that, but we should be wary of creating a formula that gives even more, fuels the property market and widens the north-south divide further. In addition, it can cost more to attract good-quality staff to the most deprived areas, which offer fewer incentives to prospective workers.
As well as good staff, deprived areas need extra facilities, principally because the private sector tends to be less well developed in such areas. Perhaps the Government should consider siting the new diagnostic and treatment centres in constituencies such as mine, where the private sector is unlikely ever to develop substantial capacity of its own. With the new resources, efforts should be made to renew the primary care facilities base. Most people's direct contact with the system is through primary care, and I think that renewal could be achieved fairly quickly.
New ways have to be found to ensure that the extra money coming into the NHS in the next few years is not devoured by hungry acute trusts. Now is the time to alter the balance of funding and innovate to create new models of care delivery. As well as boosting primary care, which will relieve pressure on the acute sector, we should expand non-acute NHS nursing capacity in the community. As the problem of bed blocking shows, the NHS is not the master of its own destiny: it cannot order local authorities to move people out of hospital, nor does it control residential care places in private homes. More flexibility is needed to move people through the system.
The United States system offers us some interesting examples of financial incentives to move people quickly through the system, and of forward planning to adapt people's homes so that they can live as full and as normal a life as possible after leaving hospital. That is what the NHS should be all about—not only treating sickness, but taking the broadest possible view of helping people to live full and healthy lives. Now, it has the resources to do that.
8.43 pm
Mr. Gregory Barker: After five years of Labour Government, the Chancellor in his Budget has correctly identified the most pressing concern of the broad mass of the British electorate: the declining state of our great public services. No public service
228
arouses more anxiety than the national health service. Despite extra cash, the number of cancelled operations in the East Sussex, Brighton and Hove health authority has leapt by a staggering 138 per cent. in the five years since 1997. That is a clear illustration of the fact that behind the hundreds of thousands of committed individuals who staff our surgeries, hospitals and clinics, stands a 50-year-old system that is creaking at the seams. It is sad, but little wonder, that this year a record 250,000 patients who were without private insurance felt compelled to dig into their life savings to purchase private health care.
Despite publication of the final report of the Wanless inquiry just five hours before the Chancellor gave his categorical response in the Budget, we know that the Budget will not be the last word on health care in Britain—far from it—but has merely raised the political stakes. The Prime Minister said that he himself will carry the can if the Chancellor's massive tax and spend solution is found wanting, but the true arbiter of the success or failure of Labour health policy will not be the Prime Minister or even the Government's new army of super-auditors and cost accountants but the British people at the ballot box.
I wonder whether the Chancellor and the Prime Minister on their publicity tour of Chelsea and Westminster hospital found any nurse, doctor, staff member or patient enthusiastic about the prospect of yet more auditors and accountants. At the heart of this tax-raising Budget lies the Chancellor's plans to increase health spending above the rate of inflation for the next five years. To be fair, however we look at it, the significant increases amount to a huge boost for NHS funding, but we all know in our heart of hearts that the NHS has a proven ability to swallow large amounts of taxpayers' money without any discernible improvement in the organisation.
With the Budget, the Chancellor has embarked on a clear course to increase the burden of direct taxation to fund the growth of the NHS and welfare spending. He has brought forth an array of measures that will hit both individuals and families. Indeed, despite the Budget being presented as family-friendly, 50 per cent. of families with children will be worse off. Nor has business escaped, as there is yet another Government-imposed increase in employment costs. However, unlike previous Budgets, which relied on stealth taxes, the current full-frontal attack makes a welcome partial break with dishonest back-door taxation.
While we may disagree about particular fiscal measures, I believe—and our debate has confirmed it—that there is still broad consensus on a range of health care issues, particularly goals. We all want a world-class health care system available to all and based on need, not the ability to pay; that is sacrosanct. But a clear difference is opening like a chasm between the Opposition and the Government about the extent to which the NHS should embrace reform and to which we as a nation should embrace the best practice in health care that prevails in other parts of Europe, where waiting times are shorter and survival rates higher.
Looking positively at that political divergence, I hope that for the first time since the war, we can embark on a grown-up and sensible national debate about the best way

229
forward for the NHS without the usual partisan scaremongering and name calling that is such a big turn-off for the electorate.
Rob Marris: Will the hon. Gentleman give way?
Mr. Barker: I am afraid that I will not.
Scaremongering and sabre rattling serve only to stifle genuine debate. Sadly, the hon. Member for Leigh (Andy Burnham) was not listening to the speech of my hon. Friend the Member for Woodspring (Dr. Fox); the American model is not on the table and forms no part of the examination that the Conservative party is undertaking. The hon. Member for Leigh lowered the tone of the debate by pretending that it does. Whatever differences emerge between the Government and the Opposition, we must always remember the day-in, day-out commitment of the thousands of people toiling in the NHS, trying to make it work.
I have many concerns about the Chancellor's ability to make his massive cash injection work and achieve the results that we all desire, but nothing is of greater concern to me than the state of cancer care services, particularly the crisis in radiotherapy treatment. The United Kingdom has an appalling survival rate for a range of cancers compared with many of our continental partners. In Scotland, where funding as a percentage of gross domestic product has already reached levels previously targeted by the Prime Minister, survival rates for cancer and coronary heart disease are among the worst in the UK. However, it is the plight of cancer patients in my constituency that most concerns me.
Shortly after Christmas, I was alerted to the case of a lady in my constituency who, after surgery for breast cancer, faced a wait of 16 weeks for radiotherapy treatment, whereas her surgeon had recommended that she begin radiotherapy within four to six weeks. Sadly, that has proved not to be an isolated case. Not only are there other women in Bexhill and Battle who have to wait 16 weeks, but others soon emerged who have to wait 18 weeks and 20 weeks, and last week, I spoke to a lady in Battle who must wait 24 weeks. She had surgery two days after Christmas for what her surgeon described as a particularly virulent strain of cancer, but she has been told that she cannot commence radiotherapy treatment at the oncology centre at Maidstone until late June.
No wonder the president of the Royal College of Radiologists, Dr. Dan Ash, writing to the general manager of the Kent oncology centre on 8 March, stated:
"I share your concern that many patients are being offered inappropriate alternative treatments or being denied radiotherapy altogether because of long waiting times. You can be sure the Royal College of Radiologists is doing everything it can to make the Government and health planners aware of the serious crisis in cancer care."
He continued:
"Although there are some improvements in the pipeline, it will be some time before they have an impact on waiting lists and I fear that it may still be too little too late."
Those are strong words.
I spoke earlier to the Under-Secretary of State for Health, the hon. Member for Pontefract and Castleford (Yvette Cooper), and I am grateful that she agreed to meet me and colleagues from my area next month to discuss this grave matter.
230
Despite the desperate pressure on the radiotherapy equipment—the linear accelerators—all too often those expensive machines lie idle outside office hours because there are not the staff to man them. The recruitment and retention crisis in radiotherapy is putting lives at risk. It is no good the Government blithely saying that historically we have not trained enough qualified staff and it will take years for more to come through, when a third of those who qualify as radiographers do not go on to practise radiotherapy.
The NHS must become more flexible and able to meet the different local demands of both patients and staff. In an age when we can do our supermarket shopping on a Sunday and our banking round the clock, it seems extraordinary that cancer care and so many other disciplines and services in the NHS are available only on a nine-to-five regime. I hope that the Chancellor will ensure that the money announced in the Budget, unlike the investment that has gone before it, will find its way to the front line and ensure that we smash the nine-to-five culture in the NHS and move towards a real 24/7 health care service that reflects the way patients choose to live their lives in the 21st century. I fear, however, that that may not happen.
I should like to say more, but I know that other hon. Members want to get in, so I shall draw my remarks to a close. With the Budget, the Chancellor has set a clear course that will ultimately present the British electorate with a clear choice: to retain in aspic the model of health care that for the past three decades has singularly failed to keep pace with our aspirations and ambitions for British health care, despite the dedication of those who work in the system, or to open our minds to the possibilities of standards of care and service that prevail in the rest of modern Europe.
I believe that the Budget asks the country to pay up with more tax, but singularly lacks the guts and vision to make the reforms necessary to give this country the world-class health care that Britain deserves.
8.54 pm
Mr. David Miliband: We have had an interesting debate over the past five or six hours. It is not often that we get to hear two former Conservative Prime Ministers-in-waiting showing off their debating skills—or three former Conservative Prime Ministers-in-waiting, if we include the shadow Chancellor. They may be Tories, but at least they are classy Tories, as they showed this afternoon. The contrast with the pitiful Budget response of the Leader of the Opposition last week should set Opposition Members thinking and should also give Labour Members pause for thought.
I am very pleased to be able to contribute to this debate, because I think that the combined effects of last year's general election and last week's Budget have shifted in a distinctive and important way the course of British politics. I want to focus my remarks on two points: first, the change in the political terms of trade engineered by a Government who have altered not only the size of public spending, but its composition, moving away from economic failure and towards public investment; and, secondly, the challenge of delivery in the health service.
To understand the change that has occurred, we need a bit of political history. In 1979, only a month after the general election of that year, Sir Geoffrey Howe came to

231
the House and set out in his first Budget speech the new philosophy that would govern public policy in Britain. He spoke of the need to reward work and reform collective bargaining, but he also set out two key principles of the approach that came to be known as Thatcherism that are particularly relevant today. First, he said:
"We need to enlarge freedom of choice for the individual by reducing the role of the State."
Secondly, he argued:
"We need to reduce the burden of financing the public sector, so as to leave room for commerce and industry to prosper."—[Official Report, 12 June 1979; Vol. 968, c. 240.]
I believe that last week's Budget, building on five years' experience in government, challenges those two arguments at their very heart.
First, Labour Members do not accept that greater choice requires a smaller state. It depends; if a smaller state means poorer education or a worse health service, it means less choice. If it means cutting training schemes, reducing employment advice or cutting child care, it means that choice is narrowed, not extended. Secondly, we do not accept that commerce and industry can prosper only if public financing is reduced or that it will necessarily prosper if that happens. Again, it depends; if support for research and development is reduced, so is industrial innovation. If education is reduced, so is the quality of production and design. If health cover is reduced, commerce and industry pick up the bill for what the CBI accepts to be the £11 billion annual cost of sickness and ill health.
It is wrongheaded to believe that more spending in itself promotes choice or helps industry. I think that Labour Members cured ourselves of the folly of that position some time ago. However, it is frankly absurd not to recognise that the Government have the responsibility and capacity to contribute to the good society. In that sense, the composition of public spending is as important as the amount in terms both of its effectiveness and the public's willingness to tolerate the taxes that are necessary to pay for it. Keynes's famous remark about tax being the membership fee of a civilised society is undermined if the money is not well spent.
I have asked the Library to compare the composition of public spending in the first term of the Conservative Government after Sir Geoffrey Howe's 1979 Budget with that in the first term of this Government. The comparison is rough and ready, but it is illuminating none the less. Under both Administrations, spending in real terms increased by 6 per cent., but there the comparison ends. Under Conservative stewardship, debt interest payments increased by 6 per cent., but under Labour, they fell by 18 per cent. Social security spending rose by 20 per cent. in four years under the Conservatives to pay for unemployment; under Labour, it has risen by 1 per cent., above all to cover pension and child benefit increases.
The figures on what I would call productive investment in education and health are a mirror image of the figures that I have just given. Education spending rose by 3 per cent. in real terms under the Conservatives; under Labour, it rose by 15 per cent. Under the Conservatives, health spending rose by 13 per cent. in real terms; under Labour, it increased by 19 per cent.
So it was the Conservative party that cut choices and constrained industry. Tax rises and penal interest rates, combined with spending cuts on productive investment,
232
left businesses in bankruptcy and ordinary people without weapons in the fight against unemployment. All that was happening with public spending heading for 45 per cent. of national income and, according to table C24 in the Red Book, total managed expenditure that was higher every year than in any year under Labour.
Mr. Michael Howard: I am grateful to the hon. Gentleman for giving way. He is making an extremely interesting speech, but he seems to have overlooked one important factor in his comparison: the first Conservative Government in 1979 inherited an economy that was on its knees and were engaged in the very process of industrial restructuring that his former employer, the Prime Minister, seemed so keen to praise in his appearance on "Breakfast with Frost" on Sunday morning. However, the current Government inherited in their first term in office a very strong economy and had no need of the industrial restructuring of which the Prime Minister talked.
Mr. Miliband: I am sorry that the shadow Chancellor was not present when the former Conservative Chancellor was speaking. I believe that he and others argued that the 1977 Budget—its popularity has been discussed—fuelled great growth in the economy, which the Conservative Government had to control. In fact, so busy were they controlling it that they created the deepest recession of the 20th century.
In 1997, the Labour party promised to raise education spending as a share of national income as it cut the cost of economic failure. That has been done. It is good that the spending review will raise public spending, but more significant is the challenge to squeeze unproductive investment in favour of a further shift in the spending bias towards productive use—towards education above all, but also towards transport and crime prevention—so that year on year, the composition of public spending continues to change.
Of course, shifting input is the first step to better outcomes. I have spoken before in the House about education reform in South Shields, and about policing reform and changes to the Employment Service, but today I want to focus on the NHS. The official Opposition claim that the NHS is different from other services. The shadow Chancellor calls it Stalinist, and the Leader of the Opposition describes it as Soviet-style. The Opposition say that it cannot improve because it is a predominant provider, and that only by changing the funding system can we spur improvement in delivery.
However, experience in my constituency proves that that assertion is wrong. Over the past four years, an under-performing trust with a £4 million deficit has turned South Tyneside district general hospital into a hospital at the leading edge of change. Waiting times have been cut: some 69 per cent. of patients are seen within two months, and currently only 151 patients have to wait longer than six months. Consultants from Germany and Austria are being recruited, and they are making a fantastic contribution to the hospital. The treatment of elderly people with fractured hips is being transformed; more than nine out of 10 with routine breaks are admitted to a ward within an hour. Maternity services are being improved through the investment of £1.3 million in new delivery suites, and treatment time has been cut to less than 30 minutes for more than seven in 10 heart attack victims.

233
Tough reforms and big challenges lie ahead. We need to use the new powers of primary care trusts to tackle the health inequalities that disfigure our community. Our lung cancer and heart disease rates are more than 70 per cent. higher than the national average. We need to discuss with the new strategic health authority how we can be a good partner with other providers in the region, so that secondary care is spread out to centres of excellence. We need to discuss with the Department of Health the potential and flexibility of foundation status, and to continue to change working practices, so that a patient-centred service can be delivered.
Of course, change is hard, but the vast majority of people in the health service know that it is vital. In fact, the health service offers what the private sector would die for: 1 million staff who are committed to their work and, above all, to their patient-customers. It is not a system unable to change, trapped by sclerotic structures and doomed by vested interests. With national standards and national inspection, we can ensure that such structures and attitudes are exposed and tackled wherever they are found, as they must be. With decentralised delivery, and front-line staff and patients empowered by information and financial clout, they can be overcome.
The second political divide is not just about the theoretical role of the state, but what counts in the delivery of care. The Conservatives have had nearly a year to tackle the issue of public service reform, and they have committed themselves to searching far and wide for the answer, but what is the question that they have been addressing? They have considered not how to deliver better health care, but how to get the state out of paying for it. They are the only people with no view on the powers of primary care, the functions of doctors and nurses, and the role of national standards. Why? Because they are obsessed with breaking the link between tax finance and medical care.
During the debate on the pre-Budget report, the shadow Chancellor took part in an extremely revealing exchange. When he was challenged to reaffirm the Conservative manifesto commitment to a comprehensive service that is free at the point of use, he could confirm only the first part of that commitment. He could not confirm the commitment to a service free at the point of use—the one thing that the hon. Member for Tiverton and Honiton (Mrs. Browning) did not mention in her speech.
The Conservatives say that they need time. They say they need a mid-career gap year to broaden the mind, allowing them to set off on a policy safari to discover new truths and to find new friends. But instead of looking like trendy young students with a future in front of them, full of idealism and promise, the wanderings of the Conservative party remind me of nothing so much as the pitiful window shopping of a faltering old dowager. All she desires from the winter sales is that elusive foreign frock, but none of them will fit either her waist or her purse.
Mr. Kenneth Clarke rose—
Mr. Miliband: If other hon. Members will not penalise me later, I will give way briefly to the right hon. and learned Gentleman.
Mr. Clarke: It has taken the Labour Government five years to get where they are now. The NHS plan, at least
234
in its rhetoric, says that by 2005 every patient will have the right to choose whether to be treated in an NHS hospital, a private hospital, an independent hospital or a hospital abroad. Does the hon. Gentleman think that the right hon. Member for Holborn and St. Pancras (Mr. Dobson) would agree with a word of that? Does he think that the right hon. Gentleman was saying that when he first came into office? Does he wonder why the first Secretary of State for Health under the Labour Government has absented himself from these entire proceedings?
Mr. Miliband: I am flattered that the current shadow Chancellor and the former Chancellor should intervene on a humble Back Bencher. I believe that my right hon. Friend, who set up the National Institute for Clinical Excellence and the Commission for Health Improvement to crack down on standards in every hospital trust, has much to be proud of in his record on the health service.
I am afraid that the right hon. and learned Gentleman has interrupted my flow, but I shall finish my speech. In the 1970s, the Labour party lost the confidence of the people that it would spend their money wisely. From scepticism about bureaucratic spending came anger about taxation, and from the weakness of taxation as a mechanism for regulating the economy came the final death of traditional tax and spend. Tax policy could not, on its own, stimulate growth, and spending could not, on its own, drive improvement.
That was the basis of Sir Geoffrey Howe's appeal to rein back the state that I talked about earlier. Instead of liberating individuals, it took away the floor on which they stood. Instead of supporting businesses, it left them hamstrung by social failure. Today the terms of trade of politics have changed. No one on the Labour Benches believes that the Government are perfect, have a monopoly of wisdom and can do it alone. That is why reform and partnership are vital.
The Government have earned the confidence of the people that they can run the economy, cut unemployment and reform the welfare state. They have earned the confidence of the people that they can improve education, which in my book remains the key motor of social and economic advance in a country that is still held back by scarring social divisions. Now the Government are setting out to earn the confidence of the people that the health service can be brought up to European standard. I believe that they will earn that confidence, and in the process will contribute further to the renewal of progressive politics that represents the best values and the best traditions of this country.
9.7 pm
Chris Grayling: I shall keep my remarks brief, as we shall shortly move on to the winding-up speeches, but some important points need to be raised. We have rightly talked largely about the health service, because health is at the heart of the Budget. However, we must also remember that the Chancellor said that it was a Budget for enterprise and fairness. When we look beneath the surface of the Budget, those claims appear pretty thin.
The fair measures for the family involve a massive expansion of means-testing on a level that I have not seen in my lifetime. The few good ideas for some businesses

235
frankly leave me cold, because they fail to address the fundamental flaw in the Budget, which is the decision to increase employers' national insurance contributions. That will damage companies and organisations across the nation.
The Red Book says that raising the United Kingdom's sustainable rate of productivity growth is central to the Government's economic strategy, so why take billions of pounds out of the pockets of our businesses? Why put a tax on employment, which will cost small businesses thousands of pounds a year? Where do the Government think that money will come from? Salary bills are fixed: most companies cannot adapt those bills to cope with the change in taxation. Rents and rates are fixed, and are often rising. Most of the costs of small businesses cannot be changed in a few months just to cater for tax changes. Cuts in costs are made by cutting expenditure on new equipment, training or marketing. How does that help a company's productivity? How do the Government expect additional costs through this taxation to encourage productivity in our companies?
Companies are not all that will be affected, because employers' national insurance does not simply apply to the private sector. There are consequences for education. A typical secondary school will probably lose about £30,000 or £40,000 a year from its budget in extra NIC costs, which is equivalent to a teaching post. Will those schools get that money back in the financial settlement for next April?
A primary school typically has a salary bill of £300,000 to £500,000 a year, so it will pay between £3,000 to £5,000 a year extra in tax. Where will that money come from? Anyone who has spoken to a head teacher knows that they have little discretionary spend available, so what will go? Will it be books, playground equipment or classroom facilities or, next April, will the Government give back to those schools the money that they are taking from them in NICs?
Universities are under pressure to raise student numbers and they already need to find significant additional resources to cope with the intake that the Government are asking them to accept in the next few years. How will they fund the extra cost of employers' NICs? How will our other public organisations and public services cope? Consignia faces huge losses and a bill from the tax man for between £30 million and £50 million a year extra. How many extra neighbourhood post offices will have to close as a result of the Government's changes?
On policing, my own force in Surrey is overstretched and underfinanced. Where will it get the funding to pay its extra tax bill? Will that come in next year's settlement or in the form of fewer officers on our streets and fewer services available to members of the public?
Nowhere will the impact of higher NICs be felt more than in the health service itself. My local hospital in Epsom will probably have to pay an additional £300,000 a year in tax from next April. Every GP surgery in the country will have to find thousands of pounds of extra tax. Our community-based care services will have to find thousands of pounds more in tax. Care homes, about which we hear so much, will have to find thousands of pounds a year more in tax. Why tax the NHS to pay for the NHS? Will the NHS get a refund next year or will
236
funds that would have gone through the system to pay for new staff and new equipment be devoted to paying extra tax to the Chancellor?
The tax increases will affect not only employers in our public services, but newly qualified teachers, junior doctors, nurses, care home assistants, bus drivers and train drivers, all of whom are in perilously short supply in parts of the country, particularly London and the south-east. They will all pay more tax. As a result, they will all find it more difficult to afford high housing costs. How will that tax increase help to retain, maintain and improve our public services across the south-east of England?
There is no doubt that the Budget will provide a substantial increase for the NHS, but the public are rightly sceptical, as the polls show clearly, about whether the Government taking away all that money from our companies, public services, schools and hospitals to recycle it back into the NHS will deliver the results and improvement that the country needs.
There is no doubt that we all want better health care—there is a consensus on that on both sides of the Chamber—and all hon. Members want a better system of health care in this country. Week after week, we all see at our surgeries constituents who have been waiting desperately for treatment, in pain and anguish for months and months, but are unable to get it. We all want improvement, but no other country runs its health care system in the way that we do and every other country does it better.
The great shame about the Budget and the Chancellor's attitude to the Wanless report is that he does not seem willing to listen and learn. He seems to be stuck, saying dogmatically, "I know what is right. We will do that." Look elsewhere. There is no evidence whatever to support the assertion that running health care through a large national state-run bureaucracy will deliver the health care service that our constituents want and need.
Will the Budget work? That is the key question. Will the money raised deliver improvements in the health service? If that does not happen, there will be an extra burden on employers, schools and hospitals. Head teachers and chief constables will have to find extra money because public service workers will have to pay the tax bills that make up the money that the Chancellor wants to put into the NHS.
David Taylor: Is not the hon. Gentleman overstating the case? The NHS will grow in real terms over the next five years by more than 7 per cent. The extra national insurance contributions will impose a burden of perhaps 0.5 per cent., which will trim the total slightly. However, that is part of the way in which the finance is to be raised, and it is not as hugely significant as the hon. Gentleman suggests. Is he not over-egging the pudding?
Chris Grayling: If that is true, will the Minister give a clear undertaking to head teachers, chief constables and care home owners that, in the public sector funds allocated to them next year, they will receive a refund for the money that is being taken away in taxation?
I do not believe that the Government's proposals will transform the health care system. I have not met any health care professionals who think that it will. The evidence from those parts of the UK with higher spending per head of population is that higher spending does not

237
improve health performance. No other country runs its health care system as we do, and all other countries do it better. The Budget, on what I fear will be a wing and a prayer, places a huge tax burden on organisations and individuals. The Budget is a gamble, for which there has been no proper debate. It is based on dogma put forward by the Chancellor of the Exchequer. It does not deserve the support of the House.
I should love there to be a modern and excellent health care system in this country. We must have it, and we need it. However, this is not the way to deliver it. I fear that the strategy will fail.
9.17 pm
Mr. Anthony D. Wright: I shall be brief, and concentrate on the effect of the extra resources that have been given already to the hospitals in Great Yarmouth, and on the future needs that will be financed by what is probably the best Budget for many years.
I believe that the James Paget hospital trust in my area has done remarkably well, as the facts show. The national waiting time target for out-patients for the end of March 2002 was that no patient should wait more than 26 weeks for a first out-patient appointment. The trust achieved that target.
Another target was to reduce the total number of patients waiting more than 13 weeks; the target was that no more than 831 patients should be required to wait for longer than that. The trust did well with this target too, with only 463 patients waiting in excess of 13 weeks.
The national waiting time target for in-patient and day cases was that no patient should be waiting more than 15 months. The trust exceeded the target by ensuring that no patient was waiting more than 12 months.
However, the total number of patients on the waiting list rose, and there were some 160 more patients on the waiting lists than the target required. That was due to the lack of elective beds available as a result of the number of non-elective cases on the wards. The trust is working with the local primary care trusts to reduce the number of patients on the waiting lists.
The trust is striving to maintain the standards that have been achieved. By 31 March 2003, it is aiming to achieve the national target that no patient will wait more than 21 weeks for a first out-patient appointment.
The national target for in-patient and day cases is that no patient should spend more than 12 months on the waiting list by 31 March 2003. The trust aims to achieve a maximum wait of nine months.
To achieve those targets, the locality is investing in additional staff and facilities. The additional staff will include medical, nursing and other professional and support staff. There will also be a new dermatology unit, additional theatre facilities, an intensive care unit, a day case ward, and an endoscopy suite. In addition, the trust has planned its largest-ever capital programme, worth a total of more than £7 million.
Problems with staffing exist, but it is clear that the Budget could help. The James Paget hospital trust says that that depends on how the money is spent, and whether it reaches trust level. For example, it appears that a lot of the additional money—quite rightly—will be earmarked for capital expenditure. The implementation of the information management and technology strategy will be
238
a significant element of that expenditure, as will making additional equipment available to staff. That is fine, but new IT equipment will be of value only if the staff exists to run it.
9.20 pm
Mr. Michael Howard: I begin by drawing the attention of the House to my declaration in the Register of Member's Interests, and by congratulating all those Members who took part in the debate on their contributions. The debate has been distinguished—I wish that I could say the same about the Budget.
The Budget will be remembered for the way in which it breaks Labour's promises; for the way in which it penalises hard work; and for the tax on jobs that is its most distinguishing feature. When the history of the Government is written, it will be one of wasted opportunities. When the Labour Government came into office in 1997, they had an unprecedented opportunity for reform. They had a huge parliamentary majority. They had inherited a strong economy. There was an appetite for and an expectation of reform and they had the unparalleled good will of the British people.
The Government have failed to reform, however. They have squandered all those assets and wasted that golden opportunity.
Mr. Barry Gardiner: Would the right hon. and learned Gentleman's recommendations for reform include changing the tradition that British people receive health care that is free at the point of use?
Mr. Howard: We have made it clear that we entirely support the ideals of the national health service. We want to see a first-class health service available to the people of this country when they need it and entirely without regard to ability to pay. The difficulty is that we are further away from those ideals today than we have been since the national health service was set up more than 50 years ago.
The Chief Secretary to the Treasury (Mr. Andrew Smith): What will the Conservatives do about the health service?
Mr. Howard: I shall deal with health in a moment; first, I want to talk about some other matters.
The Government came to office promising to reward enterprise. They promised to build a new partnership with business, but this is what business leaders have said about the Budget. The head of economic analysis at the CBI said that there is
"an extra incentive to keep employment to an absolute minimum".
In the words of the Forum of Private Business, the result of the Budget will be
"a further disincentive to employ".
The chief executive of recruitment specialists, Reed Executive, said that the national insurance increase goes
"directly against the Government's professed objective of full employment".
He highlighted the warnings from employers that they might move jobs abroad—[Interruption.] The Chancellor says that is nonsense. Of course, he knows much more

239
than business leaders about the effect of the Budget on business. In due course, perhaps he will tell us what experience he has of employing people and what experience he has of dealing with those difficulties. What experience does he have of trying to decide where to employ people? What experience does he have of the impact of those bills on his ability to make a profit?
The tax on jobs does not hit the companies with the largest profits but those with the largest work force. What sort of Government preach job creation while introducing a direct incentive for job destruction? What sort of Government talk about helping the low paid, but levy an extra tax on the jobs of the self-employed who are often the lowest paid of all? What sort of Chancellor uses the bulk of his speech to talk about enterprise—a word that he mentioned a dozen times—before outlining a measure that will do as much to undermine and damage enterprise as anything that he has done during the past five years?
The Chancellor does all that at a time when business is already struggling under the weight of £6 billion a year of extra taxes and £5 billion a year of red tape, and when our competitive tax advantage is already being eroded. CBI figures show that, among our top five trading partners, only France has a larger burden of business taxation—that was before the Budget. At the same time, manufacturers are struggling to emerge from recession.
Despite some recent encouraging signs, manufacturing output is forecast to contract this year. The director general of the Engineering Employers Federation—no doubt, the Chancellor will also say that he is talking rubbish—has said that the rise in national insurance contributions could not have come at a worse moment. He said:
"Its timing was awful and its emotional impact was appalling."
Of course some other Budget measures, such as help with research and development, have been welcomed, but as the Federation of Small Businesses has put it,
"all the welcome measures have been undone."
National insurance was not the only business tax to rise. The change in the treatment of United Kingdom branches of foreign companies is likely to hit the financial services sector, particularly foreign banks, the hardest.
An article in yesterday's Evening Standard made it clear that
"the City is home to more foreign banks than any other place in the world. They may or may not pay a lot of tax, but their contribution to critical mass, to the credibility of the City, to its appearing on overseas radar, to broadening and deepening the banking market and to employment cannot be argued against. Changing the tax rules can only mean there will be fewer such banks in future and the City will be the weaker for that."
In fact, apart from and in addition to the £4 billion increase in national insurance contributions, the Institute for Fiscal Studies has estimated that the Budget's net cost to business is £1.1 billion, even after the positive measures for business have been taken into account.
Mrs. Lorna Fitzsimons: Does the right hon. and learned Gentleman agree with the comments made by the president of the British Chambers of Commerce yesterday in which he said that business
240
understands that it costs money to get a world-class health service and that business would pay if we did not have such a service?
Mr. Howard: I did not hear the remarks to which the hon. Lady refers, but she ought to set those remarks—if they were made as she reports them—against the other remarks to which I have referred, and she may find that the president of the British Chambers of Commerce, whom I know and who is a notable supporter of the Labour party, may turn out to be rather an isolated voice in the business community on that issue.
Mr. Andrew Smith: Does the shadow Chancellor not accept that business, too, benefits from a health service that is comprehensive and free at the point of need? Does he recollect a leaflet that he issued during the last election campaign, which said that
"Conservatives will retain a free and comprehensive NHS"?
Is that still his position?
Mr. Howard: I have explained very clearly our position on health, and I shall have some more to say about health in a moment. [Interruption.]
Madam Deputy Speaker (Sylvia Heal): Order. The right hon. and learned Gentleman is replying to a question.
Mr. Howard: So much for the Government's promises on enterprise. Now we come to their promises on tax. Ministers claim that they did not mislead people at the last election. Last week, the Prime Minister said in that characteristic way of his:
"I think we have been very straightforward with people."
Well, let me remind the House of three examples of straightforwardness from the Prime Minister and his colleagues. He was asked by the BBC during the election campaign whether any reasonable person would not suppose that Labour proposed to increase national insurance contributions. He replied: "They shouldn't."
The Prime Minister then spoke straightforwardly to the Daily Express. It ran the story under the headline, "Blair in Vow not to Punish High Earners". I do not recollect the Prime Minister making any attempt to correct that headline. He told the Daily Express:
"We are certainly not going back to 1992 and the Shadow Budget … We have not the slightest intention of hammering people on £30,000 and £35,000 and the higher income brackets."
The Secretary of State for Trade and Industry—who, alas, is not with us this evening—engaged in some straightforwardness of her own. She said:
"We've got no plans at all to raise that ceiling on National Insurance contributions … It is not going to happen."
Before the election they make these promises; afterwards, they break them.
Ms Claire Ward: I am sure that the right hon. and learned Gentleman is a regular reader of The Daily Telegraph and The Sunday Telegraph, so he will perhaps have noted the recent poll in which 56 per cent.

241
of Conservative voters thought that it was right to raise national insurance. Does he not agree with those who would normally support his party?
Mr. Howard: The hon. Lady will be aware that initial reactions to Budgets often do not last very long, and I suspect that that will turn out to be so in the case of this Budget.
Last November, the Chancellor called for a debate on the national health service. There is certainly a need for that debate. The Government's policies on the NHS are simply not working. Only yesterday, I received a letter from a nursing sister, who says that the NHS has
"got worse over the past five years"
and that she now feels
"undervalued, spending over 50 hours a week dealing with bureaucracy and troubleshooting."
She continues:
"I cannot remember the last time that my hands touched a patient or I even had time to teach and train my staff".
She says that she speaks on behalf of many of her colleagues.
In Britain in 2002, people are being forced to use their life savings to save their lives. Last year, 250,000 people without any insurance paid for their own operations. In Britain in 2002, people are dying of conditions from which they would not die elsewhere. Twenty-five thousand lives could be saved every year in this country if cancer provision were as good as it is in the best of the rest of Europe. In Britain in 2002, more than 1 million people languish on waiting lists, with another 360,000 on the waiting list for a waiting list—up by more than 100,000 since March 1997.
So there is certainly plenty to debate, but the Chancellor closed off the debate in advance. He rigged the terms of reference of the Wanless report so that it would only consider a "publicly funded … health service". As Mr. Wanless himself pointed out, the review was asked to look only at the level of resources required. He said:
"It is not set up to examine the way in which those resources are financed".
Several hon. Members rose—
Mr. Howard: I know that Labour Members do not like listening to this—they do not like being reminded of the failures of the health service over which their Government are presiding—but they are going to have to listen to a little bit more.
Not content with laying down the terms of reference for the Wanless report in that way, the Chancellor did not even bother to wait for its conclusions. Before he had received the final report, he told the Social Market Foundation that there were no lessons to be learned from the ways in which health care is provided elsewhere.
During this debate and previously, the Health Secretary has talked about reform, but he and his colleagues have been talking about reform for years. That is all that they
242
have been doing—talking. In March 1998, the Chancellor assured the House that
"investment and reform"—
would—
"go hand in hand."—[Official Report, 17 March 1998; Vol. 308, c. 1097.]
Four months later, the Prime Minister said:
"By tying the money to reform and modernisation, we shall ensure that it is spent well and wisely".—[Official Report, 15 July 1998; Vol. 316, c. 402.]
That was in 1998.
In March 2000, the Prime Minister said that
"everybody knows … that the NHS needs fundamental reform".—[Official Report, 22 March 2000; Vol. 346, c. 981.]
He was certainly right about that. Last year he said:
"But investment is not enough. Public services need reform … It is reform or bust".
On 30 November 2001, the Chancellor told The Sun:
"There will not be one penny more until we get changes to let us make reforms and carry out the modernisation the health service needs".
So where is the reform? The British people were promised that a transformation of the national health service would flow from the 1997 election and the 2001 election, and they were promised it every year in between. But where are the reforms that we were assured would accompany the last spending review? Where are the improvements that were to flow from the 10-year plan and the public service agreements? Those targets were meant to focus attention on outputs, not inputs. There has been no genuine change, and without it, we will not experience the difference.
Every year, the Government promise better public services for higher taxes, but we simply get the higher taxes. They threaten the economic prosperity on which our public services depend. We all support the ideals of the national health service: high-quality health care, available to all when they need it, regardless of ability to pay. However, the tragedy is that Britain is further away from those ideals now than at any time since the NHS was founded.
The NHS is, unfortunately, not the only service in decline. In our schools, teachers are swamped with bureaucracy. On our streets, internal Home Office figures show a 26 per cent. rise in crime in recent months. On the trains, delays caused by track and signal failure increased by 45 per cent. in the weeks after Labour renationalised the railways.
The Government have given up on reform and decided that it is all about money. Before the Budget, they were already taking £1,600 more in tax every year for every man, woman and child in the country. Spending on the national health service has already increased by a third, but the service has got worse. We do not have to look far for more evidence. In Scotland—
Several hon. Members rose—
Madam Deputy Speaker: Order. The right hon. and learned Gentleman is clearly not giving way.
Mr. Howard: Hon. Members should listen to what has been happening in Scotland, where spending on health has increased by 28 per cent. in real terms over the past

243
five years. Yet the average waiting time for an out-patient appointment has gone up by more than 25 per cent. since September 1997.
In Wales, spending has increased by 30 per cent. in real terms since 1997. However, since March 1997, the number of people waiting more than six months for an out-patient appointment has increased from only 6,000 to 70,000. Of course, we acknowledge that more resources are required for the NHS, but the problem is not only down to money. It is caused by patients and professionals alike being let down by the system.
Mr. Levitt: Will the right hon. and learned Gentleman give way?
Mr. Howard: No, I shall not give way to the hon. Gentleman.
The Government have admitted that public sector employers will have to pay an additional £1.2 billion because of the increase in national insurance contributions. That shows the sheer absurdity of their position. First, they refuse to change and reform the public services, and we will therefore not get the improvements that we all want. Next, they increase employee contribution rates for many public sector service workers on whom we rely to improve services. Finally, they hit the services with a £1.2 billion tax bill in the name of raising more resources for the same services.
The Government promise a world-class service, but they fail to recognise that the world exists beyond the English channel. The challenge is to maintain the ideals of the NHS while borrowing the best from health care systems overseas. The Government have flunked that challenge.
Last week's Budget showed that the Government have run out of ideas. They promised to save the NHS in 24 hours, and they believed that public services would improve if they were centralised through directives, targets and performance agreements. They have failed on all counts. They promised a new approach but they have turned back to the only way that they know: higher taxes.
When Governments face a crisis, they go back to their instincts. The Government face a crisis in the NHS, and they have made it clear where their instincts lie. They pressed the panic button marked "higher taxes". Without change, we shall not see the difference or get the improvements that we all want, or deliver to the people of this country the health service that they deserve. Without change—
Several hon. Members rose—
Mr. Speaker: Order. I shall take the point of order from the hon. Member for North-West Leicestershire (David Taylor), although it will probably not be a point of order.
David Taylor: On a point of order, Mr. Speaker. Could you advise us whether "Erskine May" describes this continuous rebuttal of would-be interventions as either intellectual weakness or political cowardice?
Mr. Speaker: I knew that it was not going to be a point of order.
Mr. Howard: I do not think that the hon. Gentleman will like this much more either. This is not a Budget for
244
change. It is not a Budget for enterprise, or for the health service. It is a Budget that will do great damage to business and jobs for no appreciable benefit, and that is why we shall vote against it tonight.
9.40 pm
The Chief Secretary to the Treasury (Mr. Andrew Smith): On the foundation of all the steps that the Government have taken towards stability, to build enterprise and fairness in our country, there is one question right at the heart of this Budget and this debate. It is the only question on which the shadow Chancellor had anything to say. It is the question that he addressed in his leaflet in the general election campaign only last year, in which he said:
"Do not believe the lies that are being spread by our opponents. Conservatives will retain a free and comprehensive national health service."
He talked about "free and comprehensive", yet he challenged us time and again tonight. I will give him the opportunity to respond to this point. He will not take that opportunity because the Conservatives have abandoned half a century of consensus in this country, and abandoned what they were once proud to call one-nation Conservatism by abandoning a national health service that is comprehensive and free at the point of need.
This debate has been very interesting—
Mr. Barker rose—
Mr. Smith: I will give way to the hon. Gentleman because he has contributed to the debate.
Mr. Barker: What does the Minister have to say to the 250,000 people who felt compelled to abandon the national health service this year and, without insurance, to dig into their life savings to save their own lives?
Mr. Smith: The way to address that challenge is precisely to put in the investment that this Budget provides. The hon. Gentleman and all his hon. Friends must tell us—just as they will have to tell the people of this country—whether they believe in a health service that is free and comprehensive.
Chris Grayling rose—
Mr. Smith: I want to make some progress.
There was a very interesting contrast between the contributions of my right hon. and hon. Friends and those of right hon. and hon. Members on the Conservative Benches. My hon. Friends spoke positively, with knowledge, passion and conviction, about the national health service, as well as about what we are doing for enterprise and to encourage investment to build social cohesion in this country. I listened very carefully to the speeches by Conservative Members. [Interruption.] Yes, I did. The hon. Member for Woodspring (Dr. Fox) had the nerve to go on about GP recruitment when G str—[Laughter.]—when GP registrar numbers fell by 20 per cent. under his Government. Those numbers are

245
now going up by 20 per cent. under this Labour Government thanks to the investment that we are putting in.
Dr. Fox: I am sorry about the right hon. Gentleman's Freudian slip there. He will know that the number of extra GPs in 1996–97 was 111, and that last year it was 18. I think that that record speaks for itself.
Mr. Smith: Those figures are completely unfounded. My right hon. Friend the Secretary of State for Health has demolished the hon. Gentleman's argument many times when he has quoted those figures. The number of GP registrars has risen by 40 per cent. under the Government after they had been cut by 20 per cent. under the Conservatives.
Mr. George Osborne: Will the right hon. Gentleman give way?
Mr. Smith: No.
I listened to the right hon. and learned Member for Rushcliffe (Mr. Clarke). The right hon. Member for Kensington and Chelsea (Mr. Portillo) spoke only about the public-private partnership for London Underground—perhaps it was his putative bid to be Mayor of London. I heard speeches by the hon. Members for Tiverton and Honiton (Mrs. Browning), for Southend, West (Mr. Amess), who gave his usual dispassionate appraisal of the situation, for Bexhill and Battle (Mr. Barker) and for Epsom and Ewell (Chris Grayling). My hon. Friend the Paymaster General took notes on the comments made by the right hon. Member for Horsham (Mr. Maude). I sat through all that and there was not one iota of a positive suggestion by the Conservative party on an alternative for the NHS.
Mr. Kenneth Clarke: The Chief Secretary may recall that that was because I talked about the Budget which, despite being a Treasury Minister, he has not mentioned in the first five minutes of his response. Does he recall my saying that in the last Budget, the Government cut taxation; that during the election, they promised not to raise taxation; and that now they are raising taxation across the board and imposing it on working people and those who employ them? Does he have anything to say on that subject, which does fall, I think, within his responsibilities?
Mr. Smith: I will take no lectures from the right hon. and learned Gentleman who was responsible for 22 tax rises, all of them based on broken promises. Moreover, we said in our general election manifesto that tax policy will be governed by the health of the public finances, by the requirements of public investment and by the needs of business, families and the environment. That was a promise made and a promise kept, just as we kept every promise we made in the general election campaign.
The right hon. and learned Gentleman did not say whether he believes in a health service that is free, comprehensive and available at the point of need. He is smiling, so I take it that he does. He is clearly one of those who still adheres to the old one-nation Conservatism that his colleagues who responded to the Budget have abandoned when it comes to the NHS.
Several hon. Members rose—
Mr. Smith: I must make some progress.
246
The Budget recognises that the health service that was built in the 20th century was among the greatest achievements of an earlier generation. Renewing the NHS for the 21st century is among the great challenges for our generation. After decades of underinvestment, we needed significant new investment to rebuild it, so the Budget contains the largest sustained increase in spending ever announced for the NHS. We will ensure that the extra money, together with reforms, secures results. The new resources, backed up by reform, will make our NHS what it should be—free at the point of need for everyone and the best insurance policy in the world.
The Opposition have not proposed a single alternative. The shadow Chancellor may consider it an achievement to go through a whole four days of Budget debate without one of his colleagues admitting the truth about their policies. I read in The Times yesterday that
"Senior Tories say that lain Duncan Smith's open-ended review of healthcare could be an electoral disaster".
Many Labour Members would agree, but it would prove an even greater electoral disaster for the Conservative party if it told the truth about its plans—the truth that Conservatives dare speak of only in private, which was famously revealed by their health spokesman, the hon. Member for Woodspring, when he admitted that their real policy was to break up the NHS and bring in charges for patients.
The shadow Chancellor may think it preferable to say nothing on these issues, but with the passing of every day on which he fails to deny that truth, the British people will be more convinced that that is the Tories' plan for the NHS. On Sunday, the shadow Chancellor was given a perfect opportunity—
Michael Fabricant: On a point of order, Mr. Speaker. Is it in order to have a summing up of a Budget debate in which absolutely nothing is said about the Budget?
Mr. Speaker: The Chief Secretary is in order. Had he been out of order, I would have let him know about it.
Mr. Smith: The hon. Gentleman has to accept, as indeed do his right hon. and hon. Friends, that the future of the NHS is the central issue of the Budget for the people of this country as well as for Members of the House. With this Conservative threat, people want to know how much they would have to pay for an operation or a visit to a GP.
Several hon. Members rose—
Mr. Smith: I give way to my hon. Friend the Member for Carlisle (Mr. Martlew).
Michael Fabricant: Coward.
Mr. Speaker: Order. The hon. Gentleman should withdraw that remark. Calling any hon. Member a coward is unparliamentary.
Michael Fabricant: Of course I withdraw. It is not at all cowardly to give way to a Labour Member but not to a Conservative Member.
Mr. Eric Martlew: I am grateful to my right hon. Friend for giving way to a Labour Member for the first time. Perhaps the House could calm down.

247
This is a constituency issue regarding taxation, but it is very important. I totally agree with the Government's policy of raising taxation for the NHS, but I believe that it is as important to collect taxes as it is to raise them. Yesterday, the owner of Carlisle United announced that he was going to take the club out of the Football League. I understand that the club and Carlisle United Holdings owe in excess of £700,000 in taxation. Will my right hon. Friend look into the matter? Is not it a fact that if more people paid the tax that they owed, we would have a better health service?
Mr. Smith: I can well understand my hon. Friend's worries and the concern that the matter must be causing his constituents. He will understand that, consistent with long-standing practice, I cannot comment on the affairs of any individual taxpayer. I shall draw his remarks to the attention of the Inland Revenue and, if appropriate, to the Department of Trade and Industry.
Chris Grayling: Will the Minister give the people of my constituency—the head teachers, the police and the people running the health service—a firm commitment that the money he will take away from them in extra national insurance contributions will be refunded by the Government this time next year? Or will we lose teaching posts as a result of his actions?
Mr. Smith: A spending review is under way. As the hon. Gentleman can see from the figures that we have presented, we have put £5 billion extra into 2003–04 expenditure, and in the following two years there will be a 2.5 per cent. real-terms increase in non-health spending.
Matthew Taylor: Will the right hon. Gentleman give way?
Mr. Smith: No, I must make progress.
I was making a point about the opportunities that the shadow Chancellor has had to clear up the uncertainty about the health service. He had the chance this evening to answer four simple questions about his policies—questions that any serious Opposition party must be able to answer about such an important issue for the country.
The shadow Chancellor points to aspects of performance in Denmark and Germany that he says he admires. What features of their system does he therefore want us to adopt? He would say nothing about that tonight. He said he recognises that the NHS needs more resources, but he did not say how much would be required in terms of extra resources and where those resources would come from. He says that our proposed reforms will not work, but what alternative reforms does he have in mind? He will not tell us. Most important, he would not give us a commitment to an NHS that is free to all at the point of need. He has refused to deny the comments of his health spokesman that the Tories plan to introduce charges for health care. He has therefore been unable to rule out introducing charges.
The British people will draw a very simple conclusion from this evening's debate: while this Government are investing in a reformed NHS that is free to all at the point of need, the real Tory agenda is to break up the NHS, to
248
force people into having private medical insurance and to introduce charges for health care. That is the Tory agenda that dare not speak its name.
Mr. Howard: Is the Chief Secretary aware that most right hon. and hon. Members would expect him, in his winding-up speech, to defend the Budget? Has this Budget become, for him, the truth that dare not speak its name?
Mr. Smith: It is evident to the whole House that the central issue in this Budget, and a key issue facing the country, is the funding of our national health service and how we secure its principles for the future. That is the biggest question facing the country—whether or not we maintain a consensus for an NHS that is comprehensive and free at the point of need.
Matthew Taylor: Will the right hon. Gentleman give way?
Mr. Smith: I am afraid I cannot.
The shadow Chancellor asked about all the other policies in the Budget. I am proud of everything that we do to maintain stability in place of the boom and bust under the Tories. If he wants me to speak about the measures that we are bringing forth to stimulate enterprise—cutting the 10p rate on small companies to zero, and cutting the corporation tax rate—I would like to do so if I had more time.
Matthew Taylor rose—
Mr. Smith: The key issue before us is that on Budget day the Chancellor appealed for an all-party consensus to renew our national health service. Labour Members want a consensus on an NHS that is free and available to all, which has served for the past 50 years, to be reaffirmed for the next 50 years. The shadow Chancellor, however, refuses to join this consensus.
In the days since the Budget, not a single shadow Cabinet member has said that they still believe in an NHS that is accessible to all and free at the point of need. In public, they are unwilling to defend any alternative policy. Instead, they talk vaguely about examining other systems, and spend their time travelling around Europe without ever arriving at a public decision. For the truth of their policies, we have to rely on what they say in private. In private, they talk of breaking up the NHS and introducing charges for patients—heading not even towards a European system of social insurance but towards an American system of charging. As my right hon. Friend the Secretary of State for Health said, that is an example of travel narrowing the mind.
This Budget reaffirms the basic principles of the NHS. It combines enterprise with fairness, and it is supported by the British people. I commend this Budget to the House.
Question put:—
The House divided: Ayes 408, Noes 155.

Division No. 213]

[10 pm

AYES

Abbott, Ms Diane

Clapham, Michael

Adams, Mrs Irene (Paisley N)

Clark, Mrs Helen (Peterborough)

Ainsworth, Bob (Cov"try NE)

Clark, Dr Lynda (Edinburgh Pentlands)

Alexander, Douglas

Allan, Richard

Clark, Paul (Gillingham)

Allen, Graham

Clarke, Rt Hon Charles (Norwich S)

Anderson, Rt Hon Donald (Swansea E)

Clarke, Rt Hon Tom (Coatbridge)

Armstrong, Rt Hon Ms Hilary

Clarke, Tony (Northampton S)

Atherton, Ms Candy

Clelland, David

Atkins, Charlotte

Clwyd, Ann

Austin, John

Coaker, Vernon

Bailey, Adrian

Coffey, Ms Ann

Baird, Vera

Cohen, Harry

Barnes, Harry

Coleman, lain

Barrett, John

Colman, Tony

Barron, Kevin

Connarty, Michael

Battle, John

Cook, Frank (Stockton N)

Bayley, Hugh

Cook, Rt Hon Robin (Livingston)

Beard, Nigel

Cooper, Yvette

Beckett, Rt Hon Margaret

Corbyn, Jeremy

Begg, Miss Anne

Corston, Jean

Beith, Rt Hon A J

Cotter, Brian

Bell, Stuart

Cousins, Jim

Benn, Hilary

Cranston, Ross

Bennett, Andrew

Crausby, David

Benton, Joe

Cruddas, Jon

Best, Harold

Cryer, John (Hornchurch)

Betts, Clive

Cunningham, Rt Hon Dr Jack (Copeland)

Blackman, Liz

Blair, Rt Hon Tony

Cunningham, Jim (Cov"try S)

Blears, Ms Hazel

Cunningham, Tony (Workington)

Blizzard, Bob

Curtis-Thomas, Mrs Claire

Blunkett, Rt Hon David

Dalyell, Tam

Boateng, Rt Hon Paul

Davey, Edward (Kingston)

Borrow, David

Davey, Valerie (Bristol W)

Bradley, Rt Hon Keith (Withington)

David, Wayne

Bradley, Peter (The Wrekin)

Davies, Rt Hon Denzil (Llanelli)

Bradshaw, Ben

Davies, Geraint (Croydon C)

Brake, Tom

Dawson, Hilton

Breed, Colin

Dean, Mrs Janet

Brennan, Kevin

Denham, Rt Hon John

Brooke, Mrs Annette L

Dhanda, Parmjit

Brown, Rt Hon Gordon (Dunfermline E)

Dismore, Andrew

Dobbin, Jim

Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

Dobson, Rt Hon Frank

Donohoe, Brian H

Brown, Russell (Dumfries)

Doran, Frank

Browne, Desmond

Doughty, Sue

Bryant Chris

Dowd, Jim

Buck, Ms Karen

Drew, David

Burgon, Colin

Eagle, Angela (Wallasey)

Burnett, John

Eagle, Maria (L'pool Garston)

Burnham, Andy

Edwards, Huw

Burstow, Paul

Efford, Clive

Byers, Rt Hon Stephen

Ellman, Mrs Louise

Cable, Dr Vincent

Ennis, Jeff

Caborn, Rt Hon Richard

Ewing, Annabelle

Cairns, David

Farrelly, Paul

Calton, Mrs Patsy

Field, Rt Hon Frank (Birkenhead)

Campbell, Alan (Tynemouth)

Fitzpatrick, Jim

Campbell, Mrs Anne (C'bridge)

Fitzsimons, Mrs Loma

Campbell, Rt Hon Menzies (NE Fife)

Flint, Caroline

Follett, Barbara

Caplin, Ivor

Foster, Rt Hon Derek

Carmichael, Alistair

Foster, Don (Bath)

Casale, Roger

Foster, Michael (Worcester)

Caton, Martin

Foster, Michael Jabez (Hastings)

Cawsey, Ian

Foulkes, George

Challen, Colin

Francis, Dr Hywel

Chapman, Ben (Wirral S)

Galloway, George

Chaytor, David

Gapes, Mike

Chidgey, David

Gardiner, Barry

250

George, Andrew (St Ives)

Knight, Jim (S Dorset)

George, Rt Hon Bruce (Walsall S)

Kumar, Dr Ashok

Gerrard, Neil

Ladyman, Dr Stephen

Gibson, Dr Ian

Lammy, David

Gidley, Sandra

Lawrence, Mrs Jackie

Gilroy, Linda

Laws, David

Godsiff, Roger

Laxton, Bob

Goggins, Paul

Lazarowicz, Mark

Green, Matthew (Ludlow)

Lepper, David

Griffiths, Jane (Reading E)

Leslie, Christopher

Griffiths, Nigel (Edinburgh S)

Levitt, Tom

Griffiths, Win (Bridgend)

Lewis, Ivan (Bury S)

Grogan, John

Lewis, Terry (Worsley)

Hain, Rt Hon Peter

Liddell, Rt Hon Mrs Helen

Hall, Mike (Weaver Vale)

Linton, Martin

Hall, Patrick (Bedford)

Llwyd, Elfyn

Hamilton, David (Midlothian)

Lucas, Ian

Hamilton, Fabian (Leeds NE)

Luke, Iain

Hanson, David

Lyons, John

Harris, Dr Evan (Oxford W)

McAvoy, Thomas

Harvey, Nick

McCartney, Rt Hon Ian

Havard, Dai

McDonagh, Siobhain

Healey, John

MacDonald, Calum

Heath, David

McDonnell, John

Henderson, Doug (Newcastle N)

MacDougall, John

Henderson, Ivan (Harwich)

McFall, John

Hendrick, Mark

McIsaac, Shona

Hepburn, Stephen

McKechin, Ann

Heppell, John

McKenna, Rosemary

Hermon, Lady

Mackinlay, Andrew

Hewitt, Rt Hon Ms Patricia

McNulty, Tony

Hill, Keith

Mactaggart, Fiona

Hodge, Margaret

McWalter, Tony

Hoey, Kate

Mahmood, Khalid

Holmes, Paul

Mahon, Mrs Alice

Hood, Jimmy

Mallaber, Judy

Hope, Phil

Mandelson, Rt Hon Peter

Hopkins, Kelvin

Mann, John

Howarth, Rt Hon Alan (Newport E)

Marris, Rob

Howarth, George (Knowsley N)

Marsden, Gordon (Blackpool S)

Hoyle, Lindsay

Marsden, Paul (Shrewsbury)

Hughes, Beverley (Stretford)

Marshall, Jim (Leicester S)

Hughes, Simon (Southwark N)

Marshall-Andrews, Robert

Humble, Mrs Joan

Martlew, Eric

Hurst, Alan

Meacher, Rt Hon Michael

Hutton, Rt Hon John

Merron, Gillian

Iddon, Dr Brian

Michael, Rt Hon Alun

Illsley, Eric

Milburn, Rt Hon Alan

Ingram, Rt Hon Adam

Miliband, David

Irranca-Davies, Huw

Miller, Andrew

Jackson, Helen (Hillsborough)

Mitchell, Austin (Gt Grimsby)

Jamieson, David

Moffatt, Laura

Jenkins, Brian

Moore, Michael

Johnson, Alan (Hull W & Hessle)

Morgan, Julie

Johnson, Miss Melanie (Welwyn Hatfield)

Morley, Elliot

Morris, Rt Hon Estelle

Jones, Helen (Warrington N)

Mudie, George

Jones, Jon Owen (Cardiff C)

Mullin, Chris

Jones, Kevan (N Durham)

Munn, Ms Meg

Jones, Lynne (Selly Oak)

Murphy, Denis (Wansbeck)

Jones, Martyn (Clwyd S)

Murphy, Jim (Eastwood)

Jones, Nigel (Cheltenham)

Murphy, Rt Hon Paul (Torfaen)

Jowell, Rt Hon Tessa

Naysmith, Dr Doug

Kaufman, Rt Hon Gerald

Norris, Dan

Keen, Alan (Feltham & Heston)

Oaten, Mark

Keen, Ann (Brentford & Isleworth)

O'Brien, Bill (Normanton)

Keetch, Paul

Olner, Bill

Kelly, Ruth

O'Neill, Martin

Kemp, Fraser

Öpik, Lembit

Kennedy, Jane (Wavertree)

Organ, Diana

Khabra, Piara S

Osborne, Sandra (Ayr)

Kidney, David

Owen, Albert

Kilfoyle, Peter

Palmer, Dr Nick

King, Andy (Rugby & Kenilworth)

Pearson, Ian

King, Ms Oona (Bethnal Green)

Perham, Linda

Kirkwood, Archy

Picking, Anne

251

Pickthall, Colin

Stewart, Ian (Eccles)

Pike, Peter

Stinchcombe, Paul

Plaskitt, James

Stoate, Dr Howard

Pond, Chris

Strang, Rt Hon Dr Gavin

Prentice, Ms Bridget (Lewisham E)

Straw, Rt Hon Jack

Prescott, Rt Hon John

Stringer, Graham

Price, Adam

Stuart, Ms Gisela

Primarolo, Dawn

Stunell, Andrew

Prosser, Gwyn

Sutcliffe, Gerry

Pugh, Dr John

Tami, Mark

Purchase, Ken

Taylor, Rt Hon Ann (Dewsbury)

Pumell, James

Taylor, David (NW Leics)

Quin, Rt Hon Joyce

Taylor, Matthew (Truro)

Quinn, Lawrie

Taylor, Dr Richard (Wyre F)

Rammell, Bill

Thomas, Gareth (Clwyd W)

Rapson, Syd

Thomas, Simon (Ceredigion)

Raynsford, Rt Hon Nick

Thurso, John

Reed, Andy (Loughborough)

Timms, Stephen

Reid, Alan (Argyll & Bute)

Tipping, Paddy

Rendel, David

Todd, Mark

Robertson, Angus (Moray)

Tonge, Dr Jenny

Robertson, John (Glasgow Anniesland)

Touhig, Don

Trickett, Jon

Robinson, Geoffrey (Cov"try NW)

Truswell, Paul

Roche, Mrs Barbara

Turner, Dennis (Wolverh'ton SE)

Rooney, Terry

Turner, Dr Desmond (Kemptown)

Ross Ernie

Turner, Neil (Wigan)

Roy Frank

Twigg, Stephen (Enfield)

Ruane, Chris

Tyler, Paul

Ruddock, Joan

Tynan, Bill

Russell, Bob (Colchester)

Walley, Ms Joan

Russell, Ms Christine (Chester)

Ward Ms Claire

Ryan, Joan

Wareing, Robert N

Salmond, Alex

Watson, Tom

Sanders, Adrian

Watts, David

Sarwar, Mohammad

Webb, Steve

Savidge, Malcolm

Weir, Michael

Sawford, Phil

White, Brian

Sedgemore, Brian

Whitehead, Dr Alan

Shaw, Jonathan

Wicks, Malcolm

Sheerman, Barry

Williams, Rt Hon Alan (Swansea W)

Sheridan, Jim

Williams, Mrs Betty (Conwy)

Short, Rt Hon Clare

Williams, Hywel (Caemarfon)

Simon, Sioôn

Williams, Roger (Brecon)

Simpson, Alan (Nottingham S)

Willis Phil

Singh, Marsha

Wilson, Brian

Skinner, Dennis

Winnick, David

Smith, Rt Hon Andrew (Oxford E)

Winterton, Ms Rosie (Doncaster C)

Smith, Angela (Basildon)

Wishart, Pete

Smith, Rt Hon Chris (Islington S)

Woodward, Shaun

Smith, Jacqui (Redditch)

Woolas, Phil

Smith, John (Glamorgan)

Worthington, Tony

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

Wright, Anthony D (Gt Yarmouth)

Soley, Clive

Wright, David (Telford)

Southworth, Helen

Wright, Tony (Cannock)

Spellar, Rt Hon John

Wyatt, Derek

Squire, Rachel

Younger-Ross, Richard

Starkey, Dr Phyllis

Steinberg, Gerry

Tellers for the Ayes:

Stevenson, George

Mrs. Anne McGuire and

Stewart, David (Inverness E)

Mr. Nick Ainger.

NOES

Amess, David

Blunt, Crispin

Ancram, Rt Hon Michael

Boswell, Tim

Arbuthnot, Rt Hon James

Bottomley, Peter (Worthing W)

Atkinson, Peter (Hexham)

Bottomley, Rt Hon Virginia

Bacon, Richard

Brady, Graham

Baldry, Tony

Brazier, Julian

Barker, Gregory

Browning, Mrs Angela

Baron, John

Burns, Simon

Beggs, Roy

Burnside, David

Bellingham, Henry

Burt, Alistair

Bercow, John

Butterfill, John

Beresford, Sir Paul

Cash, William

252

Chope, Christopher

Maples, John

Clappison, James

Mates, Michael

Clarke, Rt Hon Kenneth (Rushcliffe)

Maude, Rt Hon Francis

Mawhinney, Rt Hon Sir Brian

Clifton-Brown, Geoffrey

May, Mrs Theresa

Collins, Tim

Mercer, Patrick

Conway, Derek

Mitchell, Andrew (Sutton Coldfield)

Cormack, Sir Patrick

Moss, Malcolm

Curry, Rt Hon David

Murrison, Dr Andrew

Davies, Quentin (Grantham)

Norman, Archie

Davis, Rt Hon David (Haltemprice)

O'Brien, Stephen (Eddisbury)

Djanogly, Jonathan

Osborne, George (Tatton)

Dodds, Nigel

Ottaway, Richard

Dorrell, Rt Hon Stephen

Page, Richard

Duncan, Alan (Rutland & Melton)

Paice, James

Duncan, Peter (Galloway)

Paisley, Rev Ian

Duncan Smith, Rt Hon lain

Paterson, Owen

Evans, Nigel

Pickles, Eric

Fabricant, Michael

Portillo, Rt Hon Michael

Fallen, Michael

Prisk, Mark

Field, Mark (Cities of London)

Redwood, Rt Hon John

Flight, Howard

Robathan, Andrew

Flook, Adrian

Robertson, Hugh (Faversham)

Forth, Rt Hon Eric

Robertson, Laurence (Tewk'b'ry)

Fox, Dr Liam

Robinson, Mrs Iris (Strangford)

Francois, Mark

Robinson, Peter (Belfast E)

Garnier, Edward

Rosindell, Andrew

Gibb, Nick

Ruffley, David

Gray, James

Sayeed, Jonathan

Grayling, Chris

Selous, Andrew

Green, Damian (Ashford)

Shephard, Rt Hon Mrs Gillian

Greenway, John

Simmonds, Mark

Grieve, Dominic

Simpson, Keith (Mid-Norfolk)

Gummer, Rt Hon John

Smyth, Rev Martin (Belfast S)

Hague, Rt Hon William

Soames, Nicholas

Hammond, Philip

Spicer, Sir Michael

Hawkins, Nick

Spink, Bob

Hayes, John

Spring, Richard

Heald, Oliver

Stanley, Rt Hon Sir John

Heathcoat-Amory, Rt Hon David

Steen, Anthony

Hendry, Charles

Streeter, Gary

Hoban, Mark

Swayne, Desmond

Hogg, Rt Hon Douglas

Swire, Hugo

Horam, John

Syms, Robert

Howard, Rt Hon Michael

Tapsell, Sir Peter

Howarth, Gerald (Aldershot)

Taylor, Ian (Esher & Walton)

Hunter, Andrew

Taylor, John (Solihull)

Jack, Rt Hon Michael

Taylor, Sir Teddy

Jackson, Robert (Wantage)

Tredinnick, David

Jenkin, Bernard

Trend, Michael

Johnson, Boris (Henley)

Turner, Andrew (Isle of Wight)

Key, Robert

Tyrie, Andrew

Kirkbride, Miss Julie

Viggers, Peter

Knight, Rt Hon Greg (E Yorkshire)

Waterson, Nigel

Laing, Mrs Eleanor

Watkinson, Angela

Lait, Mrs Jacqui

Whittingdale, John

Lansley, Andrew

Widdecombe, Rt Hon Miss Ann

Leigh, Edward

Wiggin, Bill

Liddell-Grainger, Ian

Willetts, David

Lidington, David

Wilshire, David

Lilley, Rt Hon Peter

Winterton, Mrs Ann (Congleton)

Loughton, Tim

Winterton, Nicholas (Macclesfield)

Luff, Peter

Yeo, Tim

Mclntosh, Miss Anne

Young, Rt Hon Sir George

MacKay, Rt Hon Andrew

Maclean, Rt Hon David

Tellers for the Noes:

McLoughlin, Patrick

Mrs. Cheryl Gillan and

Malins, Humfrey

Dr. Julian Lewis.

Question accordingly agreed to.
Resolved,
(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) Subject to paragraph (3) below, this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation;

(b) for refunding an amount of tax;

(c) for any relief, other than a relief that—

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

(3) Paragraph (2) above does not exclude the making of amendments with respect to value added tax providing for relief on the acquisition from another member State of any goods in relation to which, if they were imported from a place outside the member States, relief would be given by an order under section 37 of the Value Added Tax Act 1994.
MR. SPEAKER then, pursuant to Standing Order No. 51(3) (Ways and Means Motions), put forthwith the Questions necessary to dispose of the further motions.

Budget Resolutions and Economic Situation

  2. RATES OF TOBACCO PRODUCTS DUTY
  Resolved.
  That—
  (1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—

  TABLE

  1. Cigarettes

  An amount equal to 22 per cent of the retail price plus £94.24 per thousand cigarettes.

  2. Cigars

  £137.26 per kilogram.

  3. Hand-rolling tobacco

  £98.66 per kilogram.

  4. Other smoking tobacco and chewing tobacco

  £60.34 per kilogram.

  (2) This Resolution shall have effect as from 6 o'clock in the evening of 17th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  3. RATES OF DUTY ON CIDER
  Resolved,
  That—
  (1) In section 62(1A) of the Alcoholic Liquor Duties Act 1979—

  (a) in paragraph (b), for "£39.21" there shall be substituted "£38.43";

  (b) in paragraph (c), for "£26.13" there shall be substituted "£25.61".

  (2) This Resolution shall have effect as from 28th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  4. DUTY ON BEVERAGES MADE WITH SPIRITS
  Resolved,
  That—
  (1) Section 1(9) of the Alcoholic Liquor Duties Act 1979 shall be omitted.
  (2) This Resolution shall come into force on 28th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  5. BEER (SMALL BREWERIES: REDUCED RATES OF DUTY)
  Resolved,
  That—
  (1) In subsection (1) of section 36 of the Alcoholic Liquor Duties Act 1979, for "at the rate of £11.89 per hectolitre per cent of alcohol in the beer" there shall be substituted "at the rates specified in subsection (1AA) below".
  (2) In that section, after that subsection there shall be inserted—
  "(1AA) The rates at which the duty shall be charged are—

  (a) in the case of beer that is not small brewery beer, £11.89 per hectolitre per cent of alcohol in the beer;

  (b) in the case of small brewery beer produced in a singleton brewery, the rate per hectolitre per cent of alcohol in the beer that is given by section 36D below;

  (c) in the case of small brewery beer produced in a co-operated brewery, the rate per hectolitre per cent of alcohol in the beer that is given by section 36F below.".

  (3) In that Act, after that section (and before the heading "Reliefs from excise duty") there shall be inserted—
  "Reduced rates of excise duty
  36A Beer from small breweries: introductory
  (1) For the purposes of section 36(1AA) above (but subject to subsection (2) below)—

  (a) whether beer produced in a singleton brewery is "small brewery beer" is determined in accordance with section 36C below, and

  (b) whether beer produced in a co-operated brewery is "small brewery beer" is determined in accordance with section 36E below.

  (2) Beer is not small brewery beer if it is produced by a person on any premises in circumstances in which he is required to be, but is not, registered under section 47 below in respect of those premises.
  36B Interpretation of provisions relating to small brewery beer
  (1) The following provisions of this section have effect for the purposes of section 36(1AA) above, section 36A above, this section and sections 36C to 36F below.
  (2) A brewery is a "singleton brewery" at any particular time in a calendar year if it is not a co-operated brewery at that time.
  (3) A brewery is a "co-operated brewery" at any particular time in a calendar year if—

  (a) a person who produces beer in the brewery at that time or any earlier time in that year, or

  (b) a person connected with such a person.

  also produces beer in any other brewery at that time or any earlier time in that year.
  (4) "Brewery" means premises (whether or not in the United Kingdom) on which beer is produced and that are situated physically apart from any other premises on which beer is produced.
  (5) "The standard beer duty rate" means the rate of duty specified by section 36(IAA)(a) above.
  (6) References to "the grossed-up amount" of an estimate of the amount of a brewery's production in a calendar year are to the amount given by—
  E/(365"N)x365
  where—
  E is the amount of the estimate, and
  N is the number of days (if any) in the calendar year before the brewery begins to be used as beer-production premises.

  255
  (7) References to a brewery being used as beer-production premises are, in the case of a brewery in the United Kingdom, to there being at least one person who is required to be registered under section 47 below in respect of the brewery.
  (8) Any question whether a person is connected with another shall be determined in accordance with section 839 of the Income and Corporation Taxes Act 1988.
  36C Meaning of "small brewery beer" beer from singleton breweries
  (1) section applies to beer produced in a brewery at a time in a calendar year ("the current year") when the brewery is a singleton brewery.
  (2) beer is "small brewery beer" if the following conditions are satisfied; but this is subject to subsections (9) and (10) below.
  (3) The first condition is that either—

  (a) no beer was produced in the brewery in the previous calendar year ("the previous year"), or

  (b) the amount of beer produced in the brewery in the previous year was not more than 30,000 hectolitres.

  (4) For the purposes of subsection (3)(b) above, where the brewery was in use as beer-production premises during part only of the previous year, the amount of beer produced in the previous year in the brewery shall be taken to have been—
  A/Dx365
  where—
  A is the amount of beer actually produced in the previous year in the brewery, and
  D is the number of days in that part of the previous year.
  (5) The second condition is that the amount of the estimate under subsection (9) below of the brewery's production in the current year is not more than 30,000 hectolitres.
  (6) The third condition is that if the brewery begins to be used as beer—production premises part-way through the current year, the grossed-up amount of that estimate is not more than 30,000 hectolitres.
  (7) The fourth condition is that less than half of the beer produced in the brewery in the previous year was produced under licence.
  (8) The fifth condition is that the beer is not produced under licence.
  (9) Beer produced in the brewery in the current year before the person who first produces beer in the brewery in that year has made a reasonable estimate of the amount of beer that will be produced in the brewery in that year is not small brewery beer.
  (10) Beer produced in the brewery in the current year after the amount of beer produced in the brewery in the current year has reached 30,000 hectolitres is not small brewery beer.
  (11) Subsection (10) above is without prejudice to section 167(4) of the Customs and Excise Management Act 1979 (recovery of duty unpaid by reason of untrue document or statement).
  36D Rate of duty for small brewery beer from singleton breweries
  (1) This section applies to small brewery beer produced in a brewery at a time in a calendar year ("the current year") when the brewery is a singleton brewery.
  (2) The rate of duty in the case of that beer ("the brewery rate") is determined in accordance with this section.
  256
  (3) Subsection (4) below applies if—

  (a) beer was produced in the brewery in the previous calendar year ("the previous year") and the amount produced in the brewery in that year was not more than 5,000 hectolitres, or

  (b) no beer was produced in the brewery in the previous year and the grossed-up amount of the estimate under section 36C(9) above of the brewery's production in the current year is not more than 5,000 hectolitres.

  (4) If this subsection applies, "the brewery rate" is 50% of the standard beer duty rate at the time concerned; but this is subject to rounding under subsection (7) below.
  (5) Subsection (6) below applies if—

  (a) beer was produced in the brewery in the previous year and the amount produced in the brewery in that year was more than 5,000 hectolitres but not more than 30,000 hectolitres, or

  (b) no beer was produced in the brewery in the previous year and the grossed-up amount of the estimate under section 36C(9) above of the brewery's production in the current year is more than 5,000 hectolitres but not more than 30,000 hectolitres.

  (6) If this subsection applies, "the brewery rate" is, subject to rounding under subsection (7) below, given by—
  P-2,500/P xthe standard beer duty rate at the time concerned
  where—
  if this subsection applies by reason of subsection (5)(a) above, P is the amount, in hectolitres, of beer produced in the brewery in the previous year, and
  if this subsection applies by reason of subsection (5)(b) above, P is the grossed-up amount (expressed in hectolitres) mentioned in subsection (5)(b).
  (7) Where a rate given by subsection (4) or (6) above would (apart from this subsection) not be a whole number of pennies, the rate given by that subsection shall be taken to be the rate actually given by that subsection rounded up to the nearest penny.
  (8) Where the brewery was in use as beer-production premises during part only of the previous year, for the purposes of subsections (3)(a), (5)(a) and (6) above the amount of beer produced in the brewery in the previous year shall be taken to have been—
  A/Dx365
  where—
  A is the amount of beer actually produced in the previous year in the brewery, and
  D is the number of days in that part of the previous year.
  36E Meaning of "small brewery beer": beer from co-operated breweries
  (1) This section applies to beer produced in a brewery at a time in a calendar year ("the current year") when the brewery is a co-operated brewery.
  (2) The beer is "small brewery beer" if the following conditions are satisfied; but this is subject to subsections (10) and (11) below.

  257
  (3) In this section—
  "the group" means the group of breweries consisting of—

  (a) the co-operated brewery, and

  (b) every brewery (other than the co-operated brewery) in which beer is produced at the time mentioned in subsection (1) above, or at any earlier time in the current year, by—

  (i) a person who produces beer in the co-operated brewery at the time so mentioned or at any earlier time in the current year, or

  (ii) a person connected with such a person;

  "group brewery" means a brewery that is in the group; "the previous year" means the calendar year immediately preceding the current year.
  (4) The first condition is that either—

  (a) no beer was produced in the previous year in the group, or

  (b) the amount given by PY+GE is not more than 30,000 hectolitres, where—

  PY is the amount of beer produced in the previous year in the group, and
  GE is the aggregate of the grossed-up amount of each estimate that—

  (i) is an estimate for the purposes of subsection (10) below of the amount of the production in the current year in a group brewery in which no beer was produced in the previous year, and

  (ii) is made no later than the time mentioned in subsection (1) above.

  (5) For the purposes of subsection (4)(b) above, where a group brewery was in use as beer-production premises during part only of the previous year, the amount of beer produced in the previous year in that brewery shall be taken to have been—
  A/Dx365
  where—
  A is the amount of beer actually produced in the previous year in that brewery, and
  D is the number of days in that part of the previous year.
  (6) The second condition is that the aggregate of each estimate that—

  (a) is an estimate for the purposes of subsection (10) below of the amount of a group brewery's production in the current year, and

  (b) is made no later than the time mentioned in subsection (1) above,

  is not more than 30,000 hectolitres.
  (7) The third condition is that if any group brewery begins to be used as beer-production premises part-way through the current year, the aggregate of the grossed-up amount of each estimate that—

  (a) is an estimate for the purposes of subsection (10) below of the amount of a group brewery's production in the current year, and

  (b) is made no later than the time mentioned in subsection (1) above,

  is not more than 30,000 hectolitres.
  (8) The fourth condition is that less than half of the beer produced in the previous year in each group brewery was produced under licence.
  (9) The fifth condition is that the beer is not produced under licence.
  (10) Beer produced in the co-operated brewery at an unestimated time is not small brewery beer; and here "unestimated time" means a time in the current year
  258
  when there is a group brewery for which there does not exist a reasonable estimate, made by the person who first produces beer in that brewery in that year, of the amount of beer that will be produced in that brewery in that year.
  (11) Beer produced in the co-operated brewery in the current year after the amount of beer produced in the group in the current year has reached 30,000 hectolitres is not small brewery beer.
  (12) Subsection (11) above is without prejudice to section 167(4) of the Customs and Excise Management Act 1979 (recovery of duty unpaid by reason of untrue document or statement).
  36F Rate of duty for small brewery beer from co-operated breweries
  (1) This section applies to small brewery beer produced in a brewery at a time in a calendar year ("the current year") when the brewery is a co-operated brewery.
  (2) The rate of duty in the case of that beer ("the brewery rate") is determined in accordance with this section.
  (3) In this section—
  "the group" means the group of breweries consisting of—

  (a) the co-operated brewery, and

  (b) every brewery (other than the co-operated brewery) in which beer is produced at the time mentioned in subsection (1) above, or at any earlier time in the current year, by—

  (i) a person who produces beer in the co-operated brewery at the time so mentioned or at any earlier time in the current year, or

  (ii) a person connected with such a person;

  "group brewery" means a brewery that is in the group;
  "the previous year" means the calendar year immediately preceding the current year;
  "the notional previous year's production" has the meaning given by subsection (4) below.
  (4) In this section "the notional previous year's production" means the amount, in hectolitres, given by PY + GE where—
  PY is the amount of beer produced in the group in the previous year, and
  GE is the aggregate of the grossed-up amount of each estimate that—

  (a) is an estimate for the purposes of section 36E(10) above of the amount of the production in the current year in a group brewery in which no beer was produced in the previous year, and

  (b) is made no later than the time mentioned in subsection (1) above.

  (5) Where a group brewery was in use as beer-production premises during part only of the previous year, in calculating PY for the purposes of subsection (4) above the amount of beer produced in that brewery in the previous year shall be taken to have been—
  A/Dx365
  where—
  A is the amount of beer actually produced in the previous year in that brewery, and
  D is the number of days in that part of the previous year.

  259
  (6) Subsection (7) below applies if—

  (a) beer was produced in at least one group brewery in the previous year and the notional previous year's production is not more than 5,000 hectolitres, or

  (b) no beer was produced in the group in the previous year and the aggregate of each estimate that—

  (i) is an estimate for the purposes of section 36E(10) above of the amount of a group brewery's production in the current year, and

  (ii) is made no later than the time mentioned in subsection (1) above,

  is not more than 5,000 hectolitres.
  (7) If this subsection applies, "the brewery rate" is 50% of the standard rate at the time mentioned in subsection (1) above; but this is subject to rounding under subsection (10) below.
  (8) Subsection (9) below applies if—

  (a) beer was produced in at least one group brewery in the previous year and the notional previous year's production is more than 5,000 hectolitres but not more than 30,000 hectolitres, or

  (b) no beer was produced in the group in the previous year and the aggregate mentioned in subsection (6)(b) above is more than 5,000 hectolitres but not more than 30,000 hectolitres.

  (9) If this subsection applies, "the brewery rate" is, subject to rounding under subsection (10) below, given by—
  P-2,500/P x the standard rate
  where—
  if this subsection applies by reason of subsection (8)(a) above,
  P is the previous year's notional production,
  if this subsection applies by reason of subsection (8)(b) above,
  P is the amount, in hectolitres, of the aggregate mentioned in subsection (6)(b) above, and
  "the standard rate" means the standard beer duty rate at the time mentioned in subsection (1) above.
  (10) Where a rate given by subsection (7) or (9) above would (apart from this subsection) not be a whole number of pennies, the rate given by that subsection shall be taken to be the rate actually given by that subsection rounded up to the nearest penny.
  36G Assessments where incorrectly low rate of duty applied
  (1) Subsection (3) below applies if—

  (a) duty is charged by section 36 above on any beer, and

  (b) it appears at the excise duty point that the beer is small brewery beer for the purposes of section 36(1AA) above, but

  (c) it turns out that the beer was not small brewery beer for those purposes (because, for example, circumstances were not as they appeared at that point or they subsequently changed).

  (2) Subsection (3) below also applies if—

  (a) duty is charged by section 36 above on any beer that is small brewery beer for the purposes of section 36(1AA) above, and

  (b) the rate of duty that at the excise duty point appeared to be the correct rate turns out to have been lower than the correct rate (because, for example, circumstances were not as they appeared at that point or they subsequently changed).

  260
  (3) In any such case the Commissioners—

  (a) may assess the amount that is the difference between—

  (i) the actual amount of the duty charged on the beer by section 36 above, and

  (ii) the lower amount that, at the excise duty point, appeared to be the amount charged,

  as being excise duty due from the person liable to pay the duty charged on the beer by section 36 above, and

  (b) may notify him or his representative accordingly.

  (4) Where two or more persons are liable to pay the duty charged on the beer—

  (a) the reference in subsection (3)(a) above to the person liable to pay the duty is to any one or more of those persons, and

  (b) the reference in subsection (3)(b) above to notifying the person liable or his representative is to notifying each person assessed or his representative.".

  (4) In the Finance Act 1994—

  (a) in section 12A(3)(bb), for "or 11" there shall be substituted ", 11 or 36G";

  (b) in section 12B(2), after paragraph (eb) there shall be inserted—
  "(ec) in the case of an assessment under section 36G of that Act, the time at which the requirement to pay the duty took effect (which time, in a case where there was an excise duty point for the beer fixed under section 1 of the Finance (No. 2) Act 1992, is that excise duty point);"; and

  (c) in section 14(1)(ba), for "or 11" there shall be substituted ", 11 or 36G".

  (5) This Resolution shall come into force on 1st June 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  6. BIODIESEL
  Resolved,
  That provision may be made—

  (a) imposing an excise duty on biodiesel and mixtures containing biodiesel,

  (b) for the application in relation to biodiesel of the provisions of the enactments relating to hydrocarbon oil or any description of hydrocarbon oil, and

  (c) defining biodiesel for those purposes and conferring power to amend the definition by order.

  7. HYDROCARBON OIL DUTIES (REBATES)
  Resolved,
  That provision may be made as to the meaning of references to "rebate" in provisions of the Hydrocarbon Oil Duties Act 1979.

  8. HYDROCARBON OIL DUTIES (FUEL SUBSTITUTES)
  Resolved,
  That provision may be made amending section 6A of the Hydrocarbon Oil Duties Act 1979 and section 10 of the Finance Act 1993.

  9. AMUSEMENT MACHINE LICENCES (EXCEPTED MACHINES)
  Resolved,
  That—
  (1) In section 21 of the Betting and Gaming Duties Act 1981, for paragraphs (c) and (d) of subsection (3A) there shall be substituted—
  "(c) a fifty-penny machine that is not a gaming machine.".

  261
  (2) For subsection (3B) of that section there shall be (2) substituted—
  "(3B) For the purposes of this section an amusement machine is a fifty-penny machine if, and only if—

  (a) where it is a machine on which a game can be played solo, the price for a solo game does not exceed 50p; and

  (b) where it is a machine on which a game can be played by more than one person at a time, the price to participate in such a game does not exceed 50p.".

  (3) In subsection (3C) of that section, for "35p", in both places where it occurs, there shall be substituted "50p".
  (4) In section 25 of that Act, in subsections (4) and (6), for "an excepted video machine falling within section 21(3A)(d) above" there shall be substituted "a fifty-penny machine within section 21(3B) above".
  (5) This Resolution shall have effect in relation to the provision of an amusement machine at any time on or after 1st May 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  10. AMUSEMENT MACHINE LICENCE DUTY (RATES)
  Resolved,
  That—
  (1) In the Table in section 23(2) of the Betting and Gaming Duties Act 1981, for columns (4) and (6) there shall be substituted—

  (4)

  (6)

  Category C

  Category E

  £

  £

  80

  225

  160

  435

  235

  630

  305

  820

  370

  990

  430

  1155

  485

  1300

  535

  1440

  585

  1560

  625

  1675

  665

  1775

  695

  1860

  (2) Paragraph (1) above shall apply in relation to any amusement machine licence for which an application is received by the Commissioners of Customs and Excise after 30th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  11 GAMING DUTY (SIC BO AND THREE CARD POKER)
  Resolved,
  That—
  (1) In section 10(2) of the Finance Act 1997—

  (a) after "American roulette" there shall be inserted "sic bo";

  (b) after "super pan 9" there shall be inserted "three card poker".

  (2) This Resolution shall have effect in relation to games begun on or after 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  12. POOL BETTING DUTY ETC
  Resolved,
  That—
  (1) The Betting and Gaming Duties Act 1981 shall be amended in accordance with paragraphs (2) to (10).
  (2)For sections 6 to 8 there shall be substituted—
  "Pool betting duty
  6 The duty
  A duty of excise to be known as pool betting duty shall be charged in accordance with sections 7 to 8C.
  7 Duty charged on net pool betting receipts
  (1) If the amount of a person's net pool betting receipts for an accounting period is greater than zero, pool betting duty is charged on those receipts.
  (2) The amount of that duty is 15 per cent of the amount of the receipts.
  7A Calculating net pool betting receipts
  For the purposes of section 7, the amount of a person's net pool betting receipts for an accounting period is—
  S + E-W
  where—
  S is the aggregate of amounts falling due to the person in the accounting period in respect of dutiable pool bets,
  E is the aggregate of expenses and profits falling within section 7E(2) that are attributable to the accounting period, and
  W is the aggregate of amounts paid by the person in the accounting period by way of winnings on dutiable pool bets (irrespective of when the bets were made or determined).
  7B Net pool betting receipts: meaning of "dutiable pool bet"
  (1) For the purposes of a calculation under section 7A of the amount of a person's net pool betting receipts for any accounting period, a bet (wherever made) is a "dutiable pool bet" if—

  (a) the bet is made by way of pool betting, and

  (b) the following conditions are satisfied.

  (2) The first condition is that—

  (a) the bet is made by means of a totalisator situated in the United Kingdom and that person is the operator, or

  (b) the bet is made otherwise than by means of a totalisator and that person is the promoter and is in the United Kingdom.

  (3) The second condition is that the bet is not—

  (a) made by way of sponsored pool betting,

  (b) made as mentioned in section 4(3), or

  (c) made for community benefit.

  (4) The third condition is that if the bet was made before 31st March 2002, at least one event to which it relates takes place on or after that date.
  7C Net pool betting receipts: calculating stake money
  (1) This section applies for the purpose of calculating S in a calculation under section 7A.
  (2) Any payment that entitles a person to make a bet shall, if he makes the bet, be treated as stake money on the bet.
  (3) All payments made—

  (a) for or on account of or in connection with bets that are dutiable pool bets for the purposes of the calculation,

  (b) in addition to the stake money, and

  (c) by the persons making the bets,

  shall be treated as amounts due in respect of the bets except in so far as the contrary is proved by the person whose net pool betting receipts are being calculated.
  7D Net pool betting receipts: when stakes etc fall due
  (1) Subsections (2) to (5) apply for the purpose of calculating S in a calculation under section 7A.

  263
  (2) Where—

  (a) a person makes a bet, and

  (b) the bet relates to a single event, or to two or more events all taking place on the same day,

  any sum due to a person in respect of the bet shall be treated as falling due on the day on which the event or events take place.
  (3) Where—

  (a) a person makes a bet, and

  (b) subsection (2) does not apply,

  any sum due to a person in respect of the bet shall (subject to subsection (5)) be treated as falling due when the bet is made.
  (4) Subsections (2) and (3) have effect in relation to a sum irrespective of when it is actually paid or required to be paid (even where a sum that those subsections require to be treated as falling due on or after 31st March 2002 was actually paid, or required to be paid, before that date).
  (5) As respects a bet made before 31st March 2002 that relates to events at least one of which takes place before that date and at least one of which takes place on or after that date, any sum paid on or after that date in respect of the bet shall be treated as falling due when it is paid.
  7E Net pool betting receipts: expenses and profits
  (1) Subsections (2) and (3) apply for the purpose of calculating E in a calculation under section 7A.
  (2) The expenses and profits falling within this subsection are (subject to subsection (3))—

  (a) those of the person whose net pool betting receipts are being calculated, and

  (b) those of any other person concerned with or benefiting from the promotion of the betting concerned.

  (3) Expenses and profits do not fall within subsection (2) so far as they are—

  (a) provided out of amounts due, in respect of bets that are dutiable pool bets for the purposes of the calculation, to the person whose net pool betting receipts are being calculated, or

  (b) referable to matters other than—

  (i) the promotion or management of the betting concerned, or

  (ii) activities ancillary to, or connected with, such promotion or management.

  7F Net pool betting receipts: calculating winnings
  (1) Subsections (2) to (5) apply for the purpose of calculating W in a calculation under section 7A.
  (2) The reference to paying an amount to a person includes a reference to holding it in an account if the person is notified that the amount is being held for him in the account and that he is entitled to withdraw it on demand.
  (3) The return of a stake shall be treated as a payment by way of winnings.
  (4) Only payments of money shall be taken into account.
  (5) Where a bet made before 31st March 2002 relates to events at least one of which takes place before that date and at least one of which takes place on or after that date, no account shall he taken of any payment by way of winnings on the bet.
  8 Payment and recovery
  (1) Pool betting duty charged on a person's net pool betting receipts for an accounting period—

  (a) becomes due at the end of the period,

  (b) shall be paid by the person, and

  (c) shall, subject to any directions under paragraph 3 of Schedule 1 to this Act, be paid when it becomes due.

  264
  (2) Pool betting duty that is due to be paid may be recovered from the following persons as if they were jointly and severally liable to pay the duty—

  (a) the person on whose net pool betting receipts the duty is charged ("the primary payer");

  (b) a person responsible for the management of any business in the course of which any bets have been made that are dutiable pool bets for the purposes of calculations under section 7A of the amount of the primary payer's net pool betting receipts for any accounting period;

  (c) a person responsible for the management of any totalisator used for the purposes of any such business;

  (d) where a person within any of paragraphs (a) to (c) is a company, a director.

  8A Meaning of "bet made for community benefit" in sections 6 to 8
  (1) For the purposes of sections 6 to 8 (but subject to any direction under subsection (3)), a bet is made "for community benefit" if—

  (a) the promoter of the betting concerned is a community society or is bound to pay all benefits accruing from the betting to such a society, and

  (b) the person making the bet knows, when making it, that the purpose of the betting is to benefit such a society.

  (2) In the case of a bet made by means of a totalisator, the reference in subsection (1) to the promoter of the betting concerned is a reference to the operator.
  (3) The Commissioners may direct that any bet specified by the direction, or of a description so specified, is not a bet made for community benefit.
  (4) The power conferred by subsection (3) may not be exercised unless the Commissioners consider that an unreasonably large part of the amounts paid in respect of the bets concerned will, or may, be applied otherwise than—

  (a) in the payment of winnings, or

  (b) for the benefit of a community society.

  (5) In this section "community society" means—

  (a) a society established and conducted for charitable purposes only, or

  (b) a society established and conducted wholly or mainly for the support of athletic sports or athletic games and not established or conducted for purposes of private gain.

  (6) In this section "society" includes any club, institution, organisation or association of persons, by whatever name called.
  8B Meaning of "accounting period" in sections 6 to 8
  For the purposes of sections 6 to 8, each period that ends with the last Saturday in a calendar month, and begins with the Sunday immediately following the previous such Saturday, is an accounting period.
  8C Meaning of "bet" in sections 6 to 8A
  (1) For the purposes of sections 6 to 8A, "bet" does not include the taking of a ticket or chance in a lottery.
  (2) Where payments are made for the chance of winning any money or money's worth on terms under which the persons making the payments have a power of selection that may (directly or indirectly) determine the winner, those payments shall be treated as bets for the purposes of sections 6 to 8A notwithstanding that the power is not exercised.
  (3) Subsection (2) has effect subject to section 12(3).
  (4) Where any payment entitles a person to take part in a transaction that is, on his part only, not a bet made by way of pool betting by reason of his not in fact making any stake as if the transaction were such a bet, the

  265
  transaction shall be treated as such a bet for the purposes of pool betting duty (and section 7C(3) shall apply to any such payment).".
  (3) In section 2(2)—

  (a) in paragraph (b), after "bet," there shall be inserted "or", and

  (b) paragraph (d), and the word "or" immediately preceding it, shall be omitted.

  (4) In section 4(6), for the words from "do not apply" to the end there shall be substituted "do not apply to on-course bets.".
  (5) In section 9(2), the words "or coupon betting" shall be omitted (in both places).
  (6) In section 9(3)—

  (a) in paragraph (a), the words "or coupon betting" shall be omitted,

  (b) for sub-paragraphs (i) to (iv) of paragraph (a) there shall be substituted—

  "(i) the bet is not made by means of a totalisator, and

  (ii) the promoter is in the Isle of Man; or", and

  (c) in paragraph (aa)(i), the words "or coupon betting" shall be omitted.

  (7) For section 9(6) there shall be substituted—
  "(6) Section 8C(1) to (3) above shall have effect for the purposes of subsections (2)(a) and (5) above as it has effect for the purposes of sections 6 to 8A above.".
  (8) Section 11 shall be omitted.
  (9) In section 12(3), the words "(except in sections 6, 7, 8, 9(2)(a) and 9(5) in their application to coupon betting)" shall be omitted.
  (10) Schedule I shall be amended as follows—

  (a) in paragraph 1, in the definition of "pool betting business", at the end there shall be inserted "or would or might involve such sums becoming so payable if receipts from bets made for community benefit (as defined by section 8A of this Act) were not excluded from that duty.";

  (b) in paragraph 4(2), for "sub-paragraphs (3) and (4)" there shall be substituted "sub-paragraph (3)";

  (c) paragraph 4(4) to (6) shall be omitted;

  (d) in paragraph 5(1), for "made entry or given notice in accordance with paragraph 4(2) or (4)" there shall be substituted "made entry in accordance with paragraph 4(2)";

  (e) paragraph (b) of paragraph 5(2) shall be renumbered as paragraph 5(3);

  (f) in what remains of paragraph 5(2) after that renumbering, for the words from "paragraph 12(3) below, except that" to the end there shall be substituted "sub-paragraph (3) below.";

  (g) in paragraph 6(2), paragraph (b) shall be omitted;

  (h) paragraphs 8 and 12 shall be omitted;

  (i) in paragraph 14(1), the words after paragraph (b) shall be omitted; and

  (j) in paragraph 15(4), for "the said Schedule 1" there shall be substituted "Schedule 1 to the Betting, Gaming and Lotteries Act 1963".

  (11) In section 1(3) of the Excise Duties (Surcharges or Rebates) Act 1979, the words from ", except that if the duty is pool betting duty" to the end shall be omitted.
  (12) In paragraph 6 of Schedule 5 to the Finance Act 1994, after sub-paragraph (2) there shall be inserted—
  "(3) Any decision consisting in the giving of a direction under section 8A(3) of the Betting and Gaming Duties Act 1981 (pool betting duty: direction that bet is not made for community benefit).".
  266
  (13) If—

  (a) stake money is paid before 31st March 2002 in respect of a bet to which paragraph (17) applies, and

  (b) pool betting duty charged on that money before that date is not paid before 24th April 2002,

  that duty ceases on 24th April 2002 to be charged on that money.
  (14) If—

  (a) stake money is paid before 31st March 2002 in respect of a bet to which paragraph (17) applies, and

  (b) pool betting duty charged on that money before that date is paid before 24th April 2002,

  the person who paid that duty becomes entitled on 24th April 2002 to a credit equal to the amount of the duty.
  (15) Effect is given to such a credit by setting it (until fully utilised) against pool betting duty that the person is liable to pay in respect of accounting periods beginning on or after 31st March 2002 (taking earlier such periods before later ones).
  (16) Such a credit does not—

  (a) carry interest,

  (b) affect the payability of the duty mentioned in paragraph (14), or

  (c) entitle any person to any payment in respect of the credit.

  (17) This paragraph applies to a bet if—

  (a) it is a dutiable pool bet for the purposes of a calculation, under the section 7A of the Betting and Gaming Duties Act 1981 inserted by this Resolution, of the amount of a person's net pool betting receipts for any accounting period, and

  (b) it is made before 31st March 2002 but all the events to which it relates take place on or after that date.

  (18) Any notification under paragraph 4(4) of Schedule 1 to the Betting and Gaming Duties Act 1981 that is effective immediately before 24th April 2002 shall on and after that date have effect (until withdrawn) as a notification made on 31st March 2002 under paragraph 4(3) of that Schedule.
  (19) The amendments made by paragraph (2) shall have effect for the purposes of accounting periods beginning on or after 31st March 2002.
  (20) The amendments made by paragraphs (3) and (4) shall apply to bets made on or after 31st March 2002.
  (21) Subject to paragraph (22), this Resolution shall be deemed to have come into force on 31st March 2002.
  (22) Paragraphs (5), (6)(a) and (c) and (7) to (18) shall come into force on 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  13. GENERAL BETTING DUTY (SPREAD BETS)
  Resolved,
  That provision may be made as to the bets that are spread bets for the purposes of general betting duty.

  14. VEHICLE EXCISE DUTY (CARS REGISTERED ON OR AFTER 1ST MARCH 2001)
  Resolved,
  That—
  (1) For the Table in paragraph 1B of Schedule 1 to the Vehicle Excise and Registration Act 1994 there shall be substituted—

  CO2 emissions figure

  Rate

  (1)

  (2)

  (3)

  (4)

  (5)

  Exceeding g/km

  Not exceeding g/km

  Reduced rate £

  Standard Rate £

  Premium rate £

  —

  120

  60

  70

  80

  120

  150

  90

  100

  110

  150

  165

  110

  120

  130

  165

  185

  130

  140

  150

  185

  —

  150

  155

  160

  (2) This Resolution shall apply to any licence taken out on or after 18th April 2002 for a period beginning on or after 1st May 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  15. VEHICLE EXCISE DUTY (MOTORCYCLES)
  Resolved,
  That—
  (1) For paragraph 2(1) to (1B) of Schedule 1 to the Vehicle Excise and Registration Act 1994 there shall be substituted—
  "2(1) The annual rate of vehicle excise duty applicable to a motorcycle that does not exceed 450 kilograms in weight unladen is—

  (a) if the cylinder capacity of the engine does not exceed 150 cubic centimetres, £15;

  (b) if the vehicle is a motorbicycle and the cylinder capacity of the engine exceeds 150 cubic centimetres but does not exceed 400 cubic centimetres, £30;

  (c) if the vehicle is a motorbicycle and the cylinder capacity of the engine exceeds 400 cubic centimetres but does not exceed 600 cubic centimetres, £45;

  (d) in any other case, £60.".

  (2) In sections 13(3)(a), 35A(5)(b) and 36(3)(b) of that Act, and in section 13(4)(a) of that Act as substituted under paragraph 8 of Schedule 4 to that Act, for "(1)(c)" there shall be substituted "(1)(d)".
  (3) Paragraph (1) of this Resolution, and the amendments in section 13 of that Act, shall apply to any licence taken out on or after 18th April 2002 for a period beginning on or after 1st May 2002.
  (4) The amendments in sections 35A and 36 of that Act shall apply where the relevant period begins on or after 1st May 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  16. VEHICLE EXCISE DUTY (REGISTERED VEHICLES ETC)
  Motion made and Question put,
  That provision may be made for vehicle excise duty to be charged in respect of—

  (a) vehicles registered under the Vehicle Excise and Registration Act 1994 that are neither used nor kept on a public road (within the meaning of that Act);

  (b) things that have been but have ceased to be mechanically propelled vehicles.

  The House divided: Ayes 397, Noes 155.

  Division No. 214]

  [10.15 pm

  AYES

  Abbott, Ms Diane

  Clark, Dr Lynda (Edinburgh Pentlands)

  Adams, Mrs Irene (Paisley N)

  Ainsworth, Bob (Cov"try NE)

  Clark, Paul (Gillingham)

  Alexander, Douglas

  Clarke, Rt Hon Tom (Coatbridge)

  Allan, Richard

  Clarke, Tony (Northampton S)

  Allen, Graham

  Clelland, David

  Armstrong, Rt Hon Ms Hilary

  Clwyd, Ann

  Atherton, Ms Candy

  Coaker, Vernon

  Atkins, Charlotte

  Coffey, Ms Ann

  Austin, John

  Cohen, Harry

  Bailey, Adrian

  Coleman, lain

  Baird, Vera

  Colman, Tony

  Barnes, Harry

  Connarty, Michael

  Barrett, John

  Cook, Frank (Stockton N)

  Barron, Kevin

  Cook, Rt Hon Robin (Livingston)

  Battle, John

  Cooper, Yvette

  Bayley, Hugh

  Corbyn, Jeremy

  Beard, Nigel

  Corston, Jean

  Beckett, Rt Hon Margaret

  Cotter, Brian

  Begg, Miss Anne

  Cousins, Jim

  Beith, Rt Hon A J

  Cranston, Ross

  Bell, Stuart

  Crausby, David

  Benn, Hilary

  Cruddas, Jon

  Bennett, Andrew

  Cryer, John (Hornchurch)

  Benton, Joe

  Cunningham, Rt Hon Dr Jack (Copeland)

  Best, Harold

  Betts, Clive

  Cunningham, Jim (Cov'try S)

  Blackman, Liz

  Cunningham, Tony (Workington)

  Blair, Rt Hon Tony

  Curtis-Thomas, Mrs Claire

  Blears, Ms Hazel

  Dalyell, Tam

  Blizzard, Bob

  Davey, Edward (Kingston)

  Blunkett, Rt Hon David

  Davey, Valerie (Bristol W)

  Boateng, Rt Hon Paul

  David, Wayne

  Borrow, David

  Davidson, Ian

  Bradley, Rt Hon Keith (Withington)

  Davies, Rt Hon Denzil (Llanelli)

  Bradley, Peter (The Wrekin)

  Davies, Geraint (Croydon C)

  Brake, Tom

  Dawson, Hilton

  Breed, Colin

  Dean, Mrs Janet

  Brennan, Kevin

  Denham, Rt Hon John

  Brooke, Mrs Annette L

  Dhanda, Parmjit

  Brown, Rt Hon Gordon (Dunfermline E)

  Dismore, Andrew

  Dobbin, Jim

  Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

  Dobson, Rt Hon Frank

  Donohoe, Brian H

  Browne, Desmond

  Doran, Frank

  Bryant, Chris

  Doughty, Sue

  Buck, Ms Karen

  Dowd, Jim

  Burgon, Colin

  Drew, David

  Burnett, John

  Eagle, Angela (Wallasey)

  Burnham, Andy

  Eagle, Maria (L'pool Garston)

  Burstow, Paul

  Edwards, Huw

  Byers, Rt Hon Stephen

  Efford, Clive

  Cable, Dr Vincent

  Ellman, Mrs Louise

  Caborn, Rt Hon Richard

  Ennis, Jeff

  Cairns, David

  Ewing, Annabelle

  Calton, Mrs Patsy

  Farrelly, Paul

  Campbell, Alan (Tynemouth)

  Field, Rt Hon Frank (Birkenhead)

  Campbell, Mrs Anne (C'bridge)

  Field, Mark (Cities of London)

  Campbell, Rt Hon Menzies (NE Fife)

  Fitzpatrick, Jim

  Fitzsimons, Mrs Lorna

  Caplin, Ivor

  Flint, Caroline

  Carmichael, Alistair

  Follett, Barbara

  Casale, Roger

  Foster, Rt Hon Derek

  Caton, Martin

  Foster, Don (Bath)

  Cawsey, Ian

  Foster, Michael (Worcester)

  Challen, Colin

  Foster, Michael Jabez (Hastings)

  Chapman, Ben (Wirral S)

  Foulkes, George

  Chaytor, David

  Francis, Dr Hywel

  Chidgey, David

  Galloway, George

  Clapham, Michael

  Gapes, Mike

  Clark, Mrs Helen (Peterborough)

  Gardiner, Barry

  269

  George, Andrew (St Ives)

  Ladyman, Dr Stephen

  George, Rt Hon Bruce (Walsall S)

  Lammy, David

  Gerrard, Neil

  Lawrence, Mrs Jackie

  Gibson, Dr Ian

  Laws, David

  Gidley, Sandra

  Laxton, Bob

  Gilroy, Linda

  Lazarowicz, Mark

  Godsiff, Roger

  Lepper, David

  Goggins, Paul

  Leslie, Christopher

  Green, Matthew (Ludlow)

  Levitt, Tom

  Griffiths, Jane (Reading E)

  Lewis, Ivan (Bury S)

  Griffiths, Nigel (Edinburgh S)

  Lewis, Terry (Worsley)

  Griffiths, Win (Bridgend)

  Liddell, Rt Hon Mrs Helen

  Grogan, John

  Linton, Martin

  Hain, Rt Hon Peter

  Llwyd, Elfyn

  Hall, Mike (Weaver Vale)

  Lucas, Ian

  Hall, Patrick (Bedford)

  Luke, lain

  Hamilton, David (Midlothian)

  Lyons, John

  Hamilton, Fabian (Leeds NE)

  McAvoy, Thomas

  Hanson, David

  McCartney, Rt Hon Ian

  Harris, Dr Evan (Oxford W)

  McDonagh, Siobhain

  Havard, Dai

  MacDonald, Calum

  Healey, John

  McDonnell, John

  Heath, David

  MacDougall, John

  Henderson, Doug (Newcastle N)

  McFall, John

  Henderson, Ivan (Harwich)

  McIsaac, Shona

  Hendrick, Mark

  McKechin, Ann

  Hepburn, Stephen

  McKenna, Rosemary

  Heppell, John

  Mackinlay, Andrew

  Hewitt, Rt Hon Ms Patricia

  McNulty, Tony

  Hill, Keith

  Mactaggart, Fiona

  Hodge, Margaret

  McWalter, Tony

  Hoey, Kate

  Mahmood, Khalid

  Holmes, Paul

  Mahon, Mrs Alice

  Hood, Jimmy

  Mallaber, Judy

  Hope, Phil

  Mandelson, Rt Hon Peter

  Hopkins, Kelvin

  Mann, John

  Howarth, Rt Hon Alan (Newport E)

  Marris, Rob

  Howarth, George (Knowsley N)

  Marsden, Gordon (Blackpool S)

  Hoyle, Lindsay

  Marsden, Paul (Shrewsbury)

  Hughes, Beverley (Stretford)

  Marshall, Jim (Leicester S)

  Hughes, Simon (Southwark N)

  Martlew, Eric

  Humble, Mrs Joan

  Meacher, Rt Hon Michael

  Hurst, Alan

  Merron, Gillian

  Hutton, Rt Hon John

  Michael, Rt Hon Alun

  Iddon, Dr Brian

  Milburn, Rt Hon Alan

  Illsley, Eric

  Miliband, David

  Ingram, Rt Hon Adam

  Miller, Andrew

  Irranca-Davies, Huw

  Mitchell, Austin (Gt Grimsby)

  Jackson, Helen (Hillsborough)

  Moffatt, Laura

  Jamieson, David

  Moore, Michael

  Jenkins, Brian

  Morgan, Julie

  Johnson, Alan (Hull W & Hessle)

  Morley, Elliot

  Johnson, Miss Melanie (Welwyn Hatfield)

  Morris, Rt Hon Estelle

  Mudie, George

  Jones, Helen (Warrington N)

  Mullin, Chris

  Jones, Jon Owen (Cardiff C)

  Munn, Ms Meg

  Jones, Kevan (N Durham)

  Murphy, Denis (Wansbeck)

  Jones, Lynne (Selly Oak)

  Murphy, Jim (Eastwood)

  Jones, Martyn (Clwyd S)

  Murphy, Rt Hon Paul (Torfaen)

  Jones, Nigel (Cheltenham)

  Naysmith, Dr Doug

  Jowell, Rt Hon Tessa

  Norris, Dan

  Kaufman, Rt Hon Gerald

  Oaten, Mark

  Keen, Alan (Feltham & Heston)

  O Brien, Bill (Normanton)

  Keen, Ann (Brentford & Isleworth)

  Olner, Bill

  Keetch, Paul

  O'Neill, Martin

  Kelly, Ruth

  Öpik, Lembit

  Kemp, Fraser

  Organ, Diana

  Kennedy, Jane (Wavertree)

  Osborne, Sandra (Ayr)

  Khabra, Piara S

  Owen, Albert

  Kidney, David

  Palmer, Dr Nick

  Kilfoyle, Peter

  Pearson, Ian

  King, Andy (Rugby & Kenilworth)

  Perham, Linda

  King, Ms Oona (Bethnal Green)

  Picking, Anne

  Kirkwood, Archy

  Pickthall, Colin

  Knight, Jim (S Dorset)

  Pike, Peter

  Kumar, Dr Ashok

  Plaskitt, James

  270

  Pond, Chris

  Stoate, Dr Howard

  Prentice, Ms Bridget (Lewisham E)

  Strang, Rt Hon Dr Gavin

  Prescott, Rt Hon John

  Straw, Rt Hon Jack

  Price, Adam

  Stringer, Graham

  Primarolo, Dawn

  Stuart, Ms Gisela

  Prosser, Gwyn

  Stunell, Andrew

  Pugh, Dr John

  Sutcliffe, Gerry

  Purchase, Ken

  Tami, Mark

  Purnell, James

  Taylor, Rt Hon Ann (Dewsbury)

  Quin, Rt Hon Joyce

  Taylor, David (NW Leics)

  Quinn, Lawrie

  Taylor, Matthew (Truro)

  Rammell, Bill

  Taylor, Dr Richard (Wyre F)

  Rapson, Syd

  Thomas, Gareth (Clwyd W)

  Raynsford, Rt Hon Nick

  Thomas, Simon (Ceredigion)

  Reed, Andy (Loughborough)

  Thurso, John

  Reid, Alan (Argyll & Bute)

  Timms, Stephen

  Rendel, David

  Tipping, Paddy

  Robertson, Angus (Moray)

  Tonge, Dr Jenny

  Robertson, John (Glasgow Anniesland)

  Touhig, Don

  Trickett, Jon

  Robinson, Geoffrey (Cov"try NW)

  Truswell, Paul

  Roche, Mrs Barbara

  Turner, Dr Desmond (Kemptown)

  Rooney, Terry

  Turner, Neil (Wigan)

  Ross Ernie

  Twigg, Stephen (Enfield)

  Roy, Frank

  Tyler, Paul

  Ruane, Chris

  Tynan, Bill

  Ruddock, Joan

  Walley Ms Joan

  Russell, Bob (Colchester)

  Ward, Ms Claire

  Russell, Ms Christine (Chester)

  Wareing Robert N

  Ryan, Joan

  Watson, Tom

  Salmond, Alex

  Watts, David

  Sanders, Adrian

  Webb, Steve

  Sarwar, Mohammad

  Weir, Michael

  Savidge, Malcolm

  White, Brian

  Sawford, Phil

  Whitehead, Dr Alan

  Sedgemore Brian

  Wicks, Malcolm

  Sheerman, Barry

  Williams, Rt Hon Alan (Swansea W)

  Sheridan, Jim

  Simon, Siôn

  Williams, Mrs Betty (Conwy)

  Simpson, Alan (Nottingham S)

  Williams, Hywel (Caernarfon)

  Williams, Roger (Brecon)

  Singh, Marsha

  Willis, Phil

  Skinner, Dennis

  Wilson, Brian

  Smith, Rt Hon Andrew (Oxford E)

  Winnick, David

  Smith, Angela (Basildon)

  Winterton, Ms Rosie (Doncaster C)

  Smith, Rt Hon Chris (Islington S)

  Wishart Pete

  Smith, Jacqui (Redditch)

  Woodward, Shaun

  Smith, John (Glamorgan)

  Woolas, Phil

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

  Worthington, Tony

  Soley, Clive

  Wright, Anthony D (Gt Yarmouth)

  Southworth, Helen

  Wright, David (Telford)

  Spellar, Rt Hon John

  Wright, Tony (Cannock)

  Squire, Rachel

  Wyatt, Derek

  Starkey, Dr Phyllis

  Younger-Ross, Richard

  Steinberg, Gerry

  Stevenson, George

  Tellers for the Ayes:

  Stewart, David (Inverness E)

  Mr. Nick Ainger and

  Stewart, Ian (Eccles)

  Mrs. Anne McGuire.

  NOES

  Amess, David

  Brady, Graham

  Ancram, Rt Hon Michael

  Brazier, Julian

  Arbuthnot, Rt Hon James

  Browning, Mrs Angela

  Atkinson, Peter (Hexham)

  Burns, Simon

  Bacon, Richard

  Burnside, David

  Baldry, Tony

  Burt, Alistair

  Barker, Gregory

  Butterfill, John

  Baron, John

  Cash, William

  Beggs, Roy

  Chope, Christopher

  Bellingham, Henry

  Clappison, James

  Bercow, John

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Beresford, Sir Paul

  Blunt, Crispin

  Clifton-Brown, Geoffrey

  Boswell, Tim

  Collins, Tim

  Bottomley, Peter (Worthing W)

  Conway, Derek

  Bottomley, Rt Hon Virginia

  Cormack, Sir Patrick

  271

  Curry, Rt Hon David

  May, Mrs Theresa

  Davies, Quentin (Grantham)

  Mercer, Patrick

  Davis, Rt Hon David (Haltemprice)

  Mitchell, Andrew (Sutton Coldfield)

  Djanogly, Jonathan

  Moss, Malcolm

  Dodds, Nigel

  Murrison, Dr Andrew

  Dorrell, Rt Hon Stephen

  Norman, Archie

  Duncan, Peter (Galloway)

  O'Brien, Stephen (Eddisbury)

  Duncan Smith, Rt Hon lain

  Osborne, George (Tatton)

  Evans, Nigel

  Ottaway, Richard

  Fabricant, Michael

  Page, Richard

  Fallen, Michael

  Paice, James

  Field, Mark (Cities of London)

  Paisley, Rev Ian

  Flight, Howard

  Paterson, Owen

  Flook, Adrian

  Pickles, Eric

  Forth, Rt Hon Eric

  Portillo, Rt Hon Michael

  Fox, Dr Liam

  Prisk, Mark

  Francois, Mark

  Redwood, Rt Hon John

  Garnier, Edward

  Robathan, Andrew

  Gibb, Nick

  Robertson, Hugh (Faversham)

  Gray, James

  Robertson, Laurence (Tewk'b'ry)

  Grayling, Chris

  Robinson, Mrs Iris (Strangford)

  Green, Damian (Ashford)

  Robinson, Peter (Belfast E)

  Greenway, John

  Rosindell, Andrew

  Grieve, Dominic

  Ruffley, David

  Gummer, Rt Hon John

  Sayeed, Jonathan

  Hague, Rt Hon William

  Selous, Andrew

  Hammond, Philip

  Shephard, Rt Hon Mrs Gillian

  Hawkins, Nick

  Simmonds, Mark

  Hayes, John

  Simpson, Keith (Mid-Norfolk)

  Heald, Oliver

  Smyth, Rev Martin (Belfast S)

  Heathcoat-Amory, Rt Hon David

  Soames, Nicholas

  Hendry, Charles

  Spicer, Sir Michael

  Hermon, Lady

  Spink, Bob

  Hoban, Mark

  Spring, Richard

  Hogg, Rt Hon Douglas

  Stanley, Rt Hon Sir John

  Horam, John

  Steen, Anthony

  Howard, Rt Hon Michael

  Streeter, Gary

  Howarth, Gerald (Aldershot)

  Swayne, Desmond

  Hunter, Andrew

  Swire, Hugo

  Jack, Rt Hon Michael

  Syms, Robert

  Jackson, Robert (Wantage)

  Tapsell, Sir Peter

  Jenkin, Bernard

  Taylor, Ian (Esher & Walton)

  Johnson, Boris (Henley)

  Taylor, John (Solihull)

  Key, Robert

  Taylor, Sir Teddy

  Kirkbride, Miss Julie

  Tredinnick, David

  Knight, Rt Hon Greg (E Yorkshire)

  Trend, Michael

  Laing, Mrs Eleanor

  Turner, Andrew (Isle of Wight)

  Lait, Mrs Jacqui

  Tyrie, Andrew

  Lansley, Andrew

  Viggers, Peter

  Leigh, Edward

  Waterson, Nigel

  Liddell-Grainger, Ian

  Watkinson, Angela

  Lidington, David

  Whittingdale, John

  Lilley, Rt Hon Peter

  Widdecombe, Rt Hon Miss Ann

  Loughton, Tim

  Wiggin, Bill

  Luff, Peter

  Willetts, David

  McIntosh, Miss Anne

  Wilshire, David

  MacKay, Rt Hon Andrew

  Winterton, Mrs Ann (Congleton)

  Maclean, Rt Hon David

  Winterton, Nicholas (Macclesfield)

  McLoughlin, Patrick

  Yeo, Tim

  Malins, Humfrey

  Young, Rt Hon Sir George

  Maples, John

  Mates, Michael

  Tellers for the Noes:

  Maude, Rt Hon Francis

  Mrs. Cheryl Gillan and

  Mawhinney, Rt Hon Sir Brian

  Dr. Julian Lewis.

  Question accordingly agreed to.

  17. Vehicle excise duty (calculation of cylinder capacity)
  Resolved.
  That provision may be made for the calculation of the cylinder capacity of engines for purposes of vehicle excise duty.

  18. VALUE ADDED TAX (DISALLOWANCE OF INPUT TAX WHERE CONSIDERATION NOT PAID)
  Resolved,
  That provision may be made about entitlement to credit for input tax where some or all of the consideration for the supply is not paid within a certain period.

  19. VALUE ADDED TAX (FLAT-RATE SCHEME)
  Resolved,
  That—
  (1) Before section 27 of the Value Added Tax Act 1994 there shall be inserted—
  "26B Flat-rate scheme
  (1) The Commissioners may by regulations make provision under which, where a taxable person so elects, the amount of his liability to VAT in respect of his relevant supplies in any prescribed accounting period shall be the appropriate percentage of his relevant turnover for that period.
  A person whose liability to VAT is to any extent determined as mentioned above is referred to in this section as participating in the flat-rate scheme.
  (2) For the purposes of this section—

  (a) a person's "relevant supplies" are all supplies made by him except supplies made at such times or of such descriptions as may be specified in the regulations;

  (b) the "appropriate percentage" is the percentage so specified for the category of business carried on by the person in question;

  (c) a person's "relevant turnover" is the total of—

  (i) the value of those of his relevant supplies that are taxable supplies, together with the VAT chargeable on them, and

  (ii) the value of those of his relevant supplies that are exempt supplies.

  (3) The regulations may designate certain categories of business as categories in relation to which the references in subsection (1) above to liability to VAT are to be read as references to entitlement to credit for VAT.
  (4) The regulations may provide for persons to be eligible to participate in the flat-rate scheme only in such cases and subject to such conditions and exceptions as may be specified in, or determined by or under, the regulations.
  (5) Subject to such exceptions as the regulations may provide for, a participant in the flat-rate scheme shall not be entitled to credit for input tax.
  This is without prejudice to subsection (3) above.
  (6) The regulations may—

  (a) provide for the appropriate percentage to be determined by reference to the category of business that a person is expected, on reasonable grounds, to carry on in a particular period;

  (b) provide, in such circumstances as may be prescribed, for different percentages to apply in relation to different parts of the same prescribed accounting period;

  (c) make provision for determining the category of business to be regarded as carried on by a person carrying on businesses in more than one category.

  (7) The regulations may provide for the following matters to be determined in accordance with notices published by the Commissioners—

  (a) when supplies are to be treated as taking place for the purposes of ascertaining a person's relevant turnover for a particular period;

  (b) the method of calculating any adjustments that fall to be made in accordance with the regulations in a case where a person begins or ceases to participate in the flat-rate scheme.

  273
  (8) The regulations may make provision enabling the Commissioners—

  (a) to authorise a person to participate in the flat-rate scheme with effect from—

  (i) a day before the date of his election to participate, or

  (ii) a day that is not earlier than that date but is before the date of the authorisation;

  (b) to direct that a person shall cease to be a participant in the scheme with effect from a day before the date of the direction.

  The day mentioned in paragraph (a)(i) above may be a day before the date on which the regulations come into force.
  (9) Regulations under this section—

  (a) may make different provision for different circumstances;

  (b) may make such incidental, supplemental, consequential or transitional provision as the Commissioners think fit, including provision disapplying or applying with modifications any provision contained in or made under this Act.".

  (2) In section 83 of that Act, after paragraph (f) there shall be inserted—
  "(fza) a decision of the Commissioners—

  (i) refusing or withdrawing authorisation for a person's liability to pay VAT (or entitlement to credit for VAT) to be determined as mentioned in subsection (1) of section 26B;

  (ii) as to the appropriate percentage or percentages (within the meaning of that section) applicable in a person's case.".

  (3) In section 84 of that Act, after subsection (4) there shall be inserted—
  "(42A) Where an appeal is brought—

  (a) against such a decision as is mentioned in section 83(fza), or

  (b) to the extent that it is based on such a decision, against an assessment,

  the tribunal shall not allow the appeal unless it considers that the Commissioners could not reasonably have been satisfied that there were grounds for the decision.".
  (4) This Resolution shall come into force on 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  20. VALUE ADDED TAX (INVOICES)
  Resolved,
  That provision may be made about VAT invoices

  21. INCOME TAX (CHARGE AND RATES FOR 2002–03)
  Motion made and Question put,
  That income tax shall be charged for the year 2002–03, and for that year—

  (a) the starting rate shall be 10%;

  (b) the basic rate shall be 22%;

  (c) the higher rate shall be 40%.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 344 Noes 56.

  Division No. 215]

  [10.29 pm

  AYES

  Abbott, Ms Diane

  Anderson, Rt Hon Donald (Swansea E)

  Adams, Mrs Irene (Paisley N)

  Ainsworth, Bob (Cov'try NE)

  Armstrong, Rt Hon Ms Hilary

  Alexander, Douglas

  Atherton, Ms Candy

  Allen, Graham

  Atkins, Charlotte

  274

  Austin, John

  Dalyell, Tam

  Bailey, Adrian

  Davey, Valerie (Bristol W)

  Baird, Vera

  David, Wayne

  Barnes, Harry

  Davidson, Ian

  Barron, Kevin

  Davies, Rt Hon Denzil (Llanelli)

  Battle, John

  Dawson, Hilton

  Bayley, Hugh

  Dean, Mrs Janet

  Beard, Nigel

  Denham, Rt Hon John

  Beckett, Rt Hon Margaret

  Dhanda, Parmjit

  Beggs, Roy

  Dismore, Andrew

  Bell, Stuart

  Dobbin, Jim

  Benn, Hilary

  Dobson, Rt Hon Frank

  Bennett, Andrew

  Dodds, Nigel

  Benton, Joe

  Donohoe, Brian H

  Best, Harold

  Doran, Frank

  Betts, Clive

  Dowd, Jim

  Blackman, Liz

  Drew, David

  Blears, Ms Hazel

  Eagle, Angela (Wallasey)

  Blizzard, Bob

  Eagle, Maria (L'pool Garston)

  Boateng, Rt Hon Paul

  Edwards, Huw

  Borrow, David

  Efford, Clive

  Bradley, Rt Hon Keith (Withington)

  Ellman, Mrs Louise

  Bradley, Peter (The Wrekin)

  Ennis, Jeff

  Brennan, Kevin

  Farrelly, Paul

  Brown, Rt Hon Gordon (Dunfermline E)

  Field, Rt Hon Frank (Birkenhead)

  Fitzpatrick, Jim

  Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

  Fitzsimons, Mrs Lorna

  Flint, Caroline

  Brown, Russell (Dumfries)

  Follett, Barbara

  Browne, Desmond

  Foster, Rt Hon Derek

  Bryant, Chris

  Foster, Michael (Worcester)

  Buck, Ms Karen

  Foster, Michael Jabez (Hastings)

  Burgon, Colin

  Foulkes, George

  Burnham, Andy

  Francis, Dr Hywel

  Byers, Rt Hon Stephen

  Galloway, George

  Caborn, Rt Hon Richard

  Gapes, Mike

  Caims, David

  Gardiner, Barry

  Campbell, Alan (Tynemouth)

  George, Rt Hon Bruce (Walsall S)

  Campbell, Mrs Anne (C'bridge)

  Gerrard, Neil

  Caplin, Ivor

  Gibson, Dr Ian

  Casale, Roger

  Gidley, Sandra

  Caton, Martin

  Godsiff, Roger

  Cawsey, Ian

  Goggins, Paul

  Challen, Colin

  Griffiths, Jane (Reading E)

  Chapman, Ben (Wirral S)

  Griffiths, Win (Bridgend)

  Chaytor, David

  Grogan, John

  Clapham, Michael

  Hain, Rt Hon Peter

  Clark, Mrs Helen (Peterborough)

  Hall, Mike (Weaver Vale)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Hall, Patrick (Bedford)

  Hamilton, David (Midlothian)

  Clark, Paul (Gillingham)

  Hamilton, Fabian (Leeds NE)

  Clarke, Rt Hon Tom (Coatbridge)

  Hanson, David

  Clarke, Tony (Northampton S)

  Havard, Dai

  Clelland, David

  Healey, John

  Clwyd, Ann

  Henderson, Doug (Newcastle N)

  Coaker, Vernon

  Henderson, Ivan (Harwich)

  Coffey, Ms Ann

  Hendrick, Mark

  Cohen, Harry

  Hepburn, Stephen

  Coleman, lain

  Heppell, John

  Colman, Tony

  Hermon, Lady

  Connarty, Michael

  Hill, Keith

  Cook, Frank (Stockton N)

  Hodge, Margaret

  Cook, Rt Hon Robin (Livingston)

  Hoey, Kate

  Cooper, Yvette

  Hood, Jimmy

  Corbyn, Jeremy

  Hope, Phil

  Corston, Jean

  Hopkins, Kelvin

  Cousins, Jim

  Howarth, Rt Hon Alan (Newport E)

  Cranston, Ross

  Howarth, George (Knowsley N)

  Crausby, David

  Hoyle, Lindsay

  Cruddas, Jon

  Hughes, Beverley (Stretford)

  Cryer, John (Hornchurch)

  Humble, Mrs Joan

  Cunningham, Rt Hon Dr Jack (Copeland)

  Hurst, Alan

  Hutton, Rt Hon John

  Cunningham, Jim (Cov'try S)

  Iddon, Dr Brian

  Cunningham, Tony (Workington)

  Illsley, Eric

  Curtis-Thomas, Mrs Claire

  Ingram, Rt Hon Adam

  275

  Irranca-Davies, Huw

  Mullin, Chris

  Jackson, Helen (Hillsborough)

  Munn, Ms Meg

  Jamieson, David

  Murphy, Denis (Wansbeck)

  Jenkins, Brian

  Murphy, Jim (Eastwood)

  Johnson, Alan (Hull W & Hessle)

  Murphy, Rt Hon Paul (Torfaen)

  Johnson, Miss Melanie (Welwyn Hatfield)

  Naysmith, Dr Doug

  Norris, Dan

  Jones, Helen (Warrington N)

  O'Brien, Bill (Normanton)

  Jones, Jon Owen (Cardiff C)

  Olner, Bill

  Jones, Kevan (N Durham)

  O'Neill, Martin

  Jones, Lynne (Selly Oak)

  Organ, Diana

  Jones, Martyn (Clwyd S)

  Osborne, Sandra (Ayr)

  Jowell, Rt Hon Tessa

  Owen, Albert

  Kaufman, Rt Hon Gerald

  Paisley, Rev Ian

  Keen, Alan (Feltham & Heston)

  Palmer, Dr Nick

  Keen, Ann (Brentford & Isleworth)

  Pearson, Ian

  Kelly, Ruth

  Perham, Linda

  Kemp, Fraser

  Picking, Anne

  Kennedy, Jane (Wavertree)

  Pickthall, Colin

  Khabra, Piara S

  Pike, Peter

  Kidney, David

  Plaskitt, James

  Kilfoyle, Peter

  Pond, Chris

  King, Andy (Rugby & Kenilworth)

  Prentice, Ms Bridget (Lewisham E)

  King, Ms Oona (Bethnal Green)

  Primarolo, Dawn

  Knight, Jim (S Dorset)

  Prosser, Gwyn

  Kumar, Dr Ashok

  Purchase, Ken

  Ladyman, Dr Stephen

  Purnell, James

  Lammy, David

  Quin, Rt Hon Joyce

  Lawrence, Mrs Jackie

  Quinn, Lawrie

  Laxton, Bob

  Rammell, Bill

  Lazarowicz, Mark

  Rapson, Syd

  Lepper, David

  Raynsford, Rt Hon Nick

  Leslie, Christopher

  Reed, Andy (Loughborough)

  Levitt, Tom

  Robertson, John (Glansgow Anniesland)

  Lewis, Ivan (Bury S)

  Lewis, Terry (Worsley)

  Robinson, Geoffrey (Cov"try NW)

  Liddell, Rt Hon Mrs Helen

  Robinson, Mrs Iris (Strangford)

  Linton, Martin

  Robinson, Peter (Belfast E)

  Lucas, Ian

  Roche, Mrs Barbara

  Luke, lain

  Rooney, Terry

  Lyons, John

  Ross, Ernie

  McAvoy, Thomas

  Roy, Frank

  McCartney, Rt Hon Ian

  Ruane, Chris

  McDonagh, Siobhain

  Ruddock, Joan

  MacDonald, Calum

  Russell, Ms Christine (Chester)

  McDonnell, John

  Ryan, Joan

  MacDougall, John

  Sarwar, Mohammad

  McFall, John

  Savidge, Malcolm

  McIsaac, Shona

  Sawford, Phil

  McKechin, Ann

  Sedgemore, Brian

  McKenna, Rosemary

  Shaw, Jonathan

  Mackinlay, Andrew

  Sheerman, Barry

  McNulty, Tony

  Sheridan, Jim

  Mactaggart, Fiona

  Simon, Siôn

  McWalter, Tony

  Simpson, Alan (Nottingham S)

  Mahmood, Khalid

  Singh, Marsha

  Mahon, Mrs Alice

  Skinner, Dennis

  Mallaber, Judy

  Smith, Rt Hon Andrew (Oxford E)

  Mandelson, Rt Hon Peter

  Smith, Angela (Basildon)

  Mann, John

  Smith, Rt Hon Chris (Islington S)

  Marris, Rob

  Smith, Jacqui (Redditch)

  Marsden, Gordon (Blackpool S)

  Smith, John (Glamorgan)

  Marshall, Jim (Leicester S)

  Soley, Clive

  Marshall-Andrews, Robert

  Southworth, Helen

  Martlew, Eric

  Spellar, Rt Hon John

  Meacher, Rt Hon Michael

  Squire, Rachel

  Merron, Gillian

  Starkey, Dr Phyllis

  Michael, Rt Hon Alun

  Steinberg, Gerry

  Milburn, Rt Hon Alan

  Stevenson, George

  Miliband, David

  Stewart, David (Inverness E)

  Miller, Andrew

  Stewart, Ian (Eccles)

  Mitchell, Austin (Gt Grimsby)

  Stoate, Dr Howard

  Moffatt, Laura

  Strang, Rt Hon Dr Gavin

  Morgan, Julie

  Straw, Rt Hon Jack

  Morley, Elliot

  Stringer, Graham

  Morris, Rt Hon Estelle

  Stuart, Ms Gisela

  276

  Sutcliffe, Gerry

  Watts, David

  Tami, Mark

  White, Brian

  Taylor, Rt Hon Ann (Dewsbury)

  Whitehead, Dr Alan

  Taylor, David (NW Leics)

  Wicks, Malcolm

  Thomas, Gareth (Clwyd W)

  Williams, Rt Hon Alan (Swansea W)

  Timms, Stephen

  Tipping, Paddy

  Williams, Mrs Betty (Conwy)

  Todd, Mark

  Wilson, Brian

  Touhig, Don

  Winnick, David

  Trickett, Jon

  Winterton, Ms Rosie (Doncaster C)

  Truswell, Paul

  Woodward, Shaun

  Turner, Dennis (Wolverh"ton SE)

  Woolas, Phil

  Turner, Dr Desmond (Kemptown)

  Worthington, Tony

  Turner, Neil (Wigan)

  Wright, Anthony D (Gt Yarmouth)

  Wright, David (Telford)

  Twigg, Stephen (Enfield)

  Wright, Tony (Cannock)

  Tynan, Bill

  Wyatt, Derek

  Walley, Ms Joan

  Ward, Ms Claire

  Tellers for the Ayes:

  Wareing, Robert N

  Mrs. Anne McGuire and

  Watson, Tom

  Mr. Nick Ainger.

  NOES

  Allan, Richard

  Laws, David

  Barrett, John

  Llwyd, Elfyn

  Brake, Tom

  Marsden, Paul (Shrewsbury)

  Breed, Colin

  Moore, Michael

  Brooke, Mrs Annette L

  Oaten, Mark

  Burnett, John

  Öpik, Lembit

  Burnside, David

  Price, Adam

  Burstow, Paul

  Pugh, Dr John

  Cable, Dr Vincent

  Reid, Alan (Argyll & Bute)

  Calton, Mrs Patsy

  Rendel, David

  Campbell, Rt Hon Menzies (NE Fife)

  Robertson, Angus (Moray)

  Salmond, Alex

  Carmichael, Alistair

  Sanders, Adrian

  Chidgey, David

  Stunell, Andrew

  Cotter Brian

  Taylor, Matthew(Truro)

  Davey, Edward (Kingston)

  Taylor, Dr Richard (Wyre F)

  Doughty, Sue

  Thomas, Simon (Ceredigion)

  Ewing, Annabelle

  Thurso, John

  Foster, Don (Bath)

  Tonge, Dr Jenny

  George, Andrew (St Ives)

  Tyler, Paul

  Webb Steve

  Gidley, Sandra

  Weir Michael

  Green, Matthew (Ludlow)

  Williams, Hywel (Caemarfon)

  Harris, Dr Evan (Oxford W)

  Williams. Roger (Brecon)

  Harvey, Nick

  Willis, Phil

  Heath, David

  Wishart, Pete

  Holmes, Paul

  Younger-Ross, Richard

  Hughes, Simon (Southwark N)

  Jones, Nigel (Cheltenham)

  Tellers for the Noes:

  Keetch, Paul

  Bob Russell and

  Kirkwood, Archy

  Sir Robert Smith.

  Question accordingly agreed to.

  22. INDEXED RATE BANDS FOR 2002–03: PAYE DEDUCTIONS ETC
  Resolved,
  That for the year 2002–03—

  (a) section I (5A) of the Income and Corporation Taxes Act 1988, and

  (b) section 257C(2A) of that Act as it has effect for the application of sections 257AA(2) and 265 of that Act,

  shall have effect as if "17th June" were substituted for "17th May".
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  23. CORPORATION TAX (CHARGE AND RATE FOR 2003)
  Resolved,
  That corporation tax shall be charged for the financial year 2003 at the rate of 30%.

  24. CORPORATION TAX (SMALL COMPANIES' RATE FOR 2002)
  Resolved,
  That for the financial year 2002—

  (a) the small companies' rate shall be 19%, and

  (b) the fraction mentioned in section 13(2) of the Income and Corporation Taxes Act 1988 shall be 11/400ths.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  25. CORPORATION TAX (STARTING RATE)
  Resolved,
  That for the financial year 2002—

  (a) the corporation tax starting rate shall be 0%, and

  (b) the fraction mentioned in section 13AA(3) of the Income and Corporation Taxes Act 1988 shall be 19/400ths.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  26. STATUTORY PATERNITY PAY AND STATUTORY ADOPTION PAY
  Resolved,
  That provision may be made about the taxation of statutory paternity pay and statutory adoption pay.

  27. SCHEDULE E CHARGE
  Resolved,
  That provision may be made amending Chapters 1 and 2 of Part 5, and section 595, of the Income and Corporation Taxes Act 1988.

  28. DEDUCTIONS UNDER THE CONSTRUCTION INDUSTRY SCHEME
  Resolved,
  That provision may be made about the treatment of sums deducted under section 559 of the Income and Corporation Taxes Act 1988.

  29. CHARGEABLE GAINS (PROVISION IN CONNECTION WITH SUBSTANTIAL SHAREHOLDING EXEMPTION)
  Resolved,
  That provision may be made in connection with provision conferring exemptions for disposals by companies with a substantial shareholding in another company—

  (a) restricting allowable losses, and

  (b) restricting the operation of relieving provisions.

  30. CHARGEABLE GAINS (MISCELLANEOUS AMENDMENTS)
  Resolved,
  That provision may be made amending the Taxation of Chargeable Gains Act 1992 with respect to—

  (a) share exchanges and company reconstructions;

  (b) taper relief.

  31. TAX RELIEF FOR R&D EXPENDITURE OF SMALL OR MEDIUM-SIZED ENTERPRISES
  Resolved,
  That provision may be made amending Schedule 20 to the Finance Act 2000.

  32. CHANGE OF BASIS OF COMPUTATION OF PROFITS
  Resolved,
  That provision (including provision having retrospective effect) may be made about the effect of a change of basis of computation of profits for tax purposes.

  33. DEDUCTION OF EXPENDITURE INVOLVING CRIME
  Resolved,
  That provision may be made that, in calculating profits chargeable under Schedule D, no deduction shall he made for any expenditure incurred in making a payment outside the United Kingdom where the making of a corresponding payment in any part of the United Kingdom would constitute a criminal offence there.

  34. LOAN RELATIONSHIPS ETC
  Resolved,
  That provision (including provision having retrospective effect) may be made for the purposes of corporation tax in relation to—

  (a) loan relationships; and

  (b) other relationships where a company stands, or is treated as standing, in the position of a creditor or debtor in relation to a debt.

  35. FOREIGN EXCHANGE GAINS AND LOSSES
  Resolved,
  That provision (including provision having retrospective effect) may be made for the purposes of corporation tax in relation to gains and losses arising as a result of comparing at different times the expression in one currency of the valuation put on an asset or liability by a company in another currency.

  36. CORPORATION TAX (CURRENCIES OTHER THAN STERLING)
  Resolved,
  That provision may be made in relation to the use of currencies other than sterling for purposes relating to corporation tax.

  37. DERIVATIVE CONTRACTS
  Resolved,
  That provision (including provision having retrospective effect) may be made for the purposes of corporation tax in relation to—

  (a) futures;

  (b) options;

  (c) contracts relating to fluctuations in the value or price of property or in an index or other factor;

  (d) instruments entitling a person to subscribe for shares in a company or for assets representing a loan relationship of a company; and

  (e) contracts which are qualifying contracts for the purposes of Chapter 2 of Part 4 of the Finance Act 1994.

  38. GAINS AND LOSSES FROM A COMPANY'S INTANGIBLE FIXED ASSETS
  Resolved,
  That provision may be made about the taxation of gains, and the allowing of losses, of a company from its intangible fixed assets, including—

  (a) provision restricting capital gains roll-over relief on the disposal of existing assets, and

  (b) provision affecting the value of an intangible fixed asset in the hands of a company's counter-party (as transferor or transferee) for any purposes of the Tax Acts.

  39. GAINS OF INSURANCE COMPANY FROM VENTURE CAPITAL LIMITED PARTNERSHIP
  Resolved,
  That provision may be made about the taxation of the gains of an insurance company from a limited partnership that invests in unquoted shares or securities.

  40. LLOYD'S UNDERWRITERS
  Resolved,
  That provision be made about Lloyds's underwriters.

  41. CONTROLLED FOREIGN COMPANIES
  Motion made and Question put,
  That provision may be made amending Chapter 4 of Part 17 of the Income and Corporation Taxes Act 1988.
  The House divided: Ayes 387, Noes 151.

  Division No. 216]

  [10.41 pm

  AYES

  Abbott, Ms Diane

  Allen, Graham

  Adams, Mrs Irene (Paisley N)

  Anderson, Rt Hon Donald (Swansea E)

  Ainsworth, Bob (Cov"try NE)

  Alexander, Douglas

  Armstrong, Rt Hon Ms Hilary

  Allan, Richard

  Atherton, Ms Candy

  279

  Atkins, Charlotte

  Corston, Jean

  Austin, John

  Cotter, Brian

  Bailey, Adrian

  Cousins, Jim

  Baird, Vera

  Cranston, Ross

  Barnes, Harry

  Crausby, David

  Barrett, John

  Cruddas, Jon

  Barron, Kevin

  Cryer, John (Hornchurch)

  Battle, John

  Cunningham, Jim (Cov"try S)

  Bayley, Hugh

  Cunningham, Tony (Workington)

  Beard, Nigel

  Curtis-Thomas, Mrs Claire

  Beckett, Rt Hon Margaret

  Dalyell, Tam

  Begg, Miss Anne

  Davey, Edward (Kingston)

  Beggs, Roy

  Davey, Valerie (Bristol W)

  Bell, Stuart

  David, Wayne

  Benn, Hilary

  Davidson, Ian

  Bennett, Andrew

  Davies, Rt Hon Denzil (Llanelli)

  Benton, Joe

  Dawson, Hilton

  Best, Harold

  Dean, Mrs Janet

  Betts, Clive

  Denham, Rt Hon John

  Blackman, Liz

  Dhanda, Parmjit

  Blears, Ms Hazel

  Dismore, Andrew

  Blizzard, Bob

  Dobbin, Jim

  Boateng, Rt Hon Paul

  Dobson, Rt Hon Frank

  Borrow, David

  Donohoe, Brian H

  Bradley, Rt Hon Keith (Withington)

  Doran, Frank

  Bradley, Peter (The Wrekin)

  Doughty, Sue

  Brake, Tom

  Dowd, Jim

  Breed, Colin

  Drew, David

  Brennan, Kevin

  Eagle, Angela (Wallasey)

  Brooke, Mrs Annette L

  Eagle, Maria (L'pool Garston)

  Brown, Rt Hon Gordon (Dunfermline E)

  Edwards, Huw

  Efford, Clive

  Brown, Russell (Dumfries)

  Ellman, Mrs Louise

  Browne, Desmond

  Ennis, Jeff

  Bryant, Chris

  Ewing, Annabelle

  Buck, Ms Karen

  Farrelly, Paul

  Burgon, Colin

  Field, Rt Hon Frank (Birkenhead)

  Burnett, John

  Fitzpatrick, Jim

  Burnham, Andy

  Fitzsimons, Mrs Loma

  Burstow, Paul

  Flint, Caroline

  Cable, Dr Vincent

  Follett, Barbara

  Caborn, Rt Hon Richard

  Foster, Rt Hon Derek

  Cairns, David

  Foster, Don (Bath)

  Calton, Mrs Patsy

  Foster, Michael (Worcester)

  Campbell, Alan (Tynemouth)

  Foster, Michael Jabez (Hastings)

  Campbell, Mrs Anne (C'bridge)

  Foulkes, George

  Campbell, Rt Hon Menzies (NE Fife)

  Francis, Dr Hywel

  Galloway, George

  Caplin, Ivor

  Gapes, Mike

  Carmichael, Alistair

  Gardiner, Barry

  Casale, Roger

  George, Andrew (St Ives)

  Caton, Martin

  George, Rt Hon Bruce (Walsall S)

  Cawsey, Ian

  Gerrard, Neil

  Challen, Colin

  Gibson, Dr Ian

  Chapman, Ben (Wirral S)

  Gidley, Sandra

  Chaytor, David

  Gilroy, Linda

  Chidgey, David

  Godsiff, Roger

  Clapham, Michael

  Goggins, Paul

  Clark, Mrs Helen (Peterborough)

  Green, Matthew (Ludlow)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Griffiths, Jane (Reading E)

  Griffiths, Win (Bridgend)

  Clark, Paul (Gillingham)

  Grogan, John

  Clarke, Rt Hon Tom (Coatbridge)

  Hain, Rt Hon Peter

  Clarke, Tony (Northampton S)

  Hall, Mike (Weaver Vale)

  Clelland, David

  Hall, Patrick (Bedford)

  Clwyd, Ann

  Hamilton, David (Midlothian)

  Coaker, Vernon

  Hamilton, Fabian (Leeds NE)

  Coffey, Ms Ann

  Hanson, David

  Cohen, Harry

  Harris, Dr Evan (Oxford W)

  Coleman, lain

  Harvey, Nick

  Colman, Tony

  Havard, Dai

  Connarty, Michael

  Healey, John

  Cook, Frank (Stockton N)

  Heath, David

  Cook, Rt Hon Robin (Livingston)

  Henderson, Doug (Newcastle N)

  Cooper, Yvette

  Henderson, Ivan (Harwich)

  Corbyn, Jeremy

  Hendrick, Mark

  280

  Hepburn, Stephen

  McNulty, Tony

  Heppell, John

  Mactaggart, Fiona

  Hermon, Lady

  McWalter, Tony

  Hill, Keith

  Mahmood, Khalid

  Hodge, Margaret

  Mahon, Mrs Alice

  Hoey, Kate

  Mallaber, Judy

  Holmes, Paul

  Mandelson, Rt Hon Peter

  Hood, Jimmy

  Mann, John

  Hope, Phil

  Marris, Rob

  Hopkins, Kelvin

  Marsden, Gordon (Blackpool S)

  Howarth, Rt Hon Alan (Newport E)

  Marsden, Paul (Shrewsbury)

  Howarth, George (Knowsley N)

  Marshall, Jim (Leicester S)

  Hoyle, Lindsay

  Martlew, Eric

  Hughes, Beverley (Stretford)

  Meacher, Rt Hon Michael

  Hughes, Simon (Southwark N)

  Merron, Gillian

  Humble, Mrs Joan

  Michael, Rt Hon Alun

  Hurst, Alan

  Miliband, David

  Hutton, Rt Hon John

  Miller, Andrew

  Iddon, Dr Brian

  Mitchell, Austin (Gt Grimsby)

  Illsley, Eric

  Moffatt, Laura

  Ingram, Rt Hon Adam

  Moore, Michael

  Irranca-Davies, Huw

  Morgan, Julie

  Jackson, Helen (Hillsborough)

  Morley, Elliot

  Jamieson, David

  Mudie, George

  Jenkins, Brian

  Mullin, Chris

  Johnson, Alan (Hull W & Hessle)

  Munn, Ms Meg

  Jones, Helen (Warrington N)

  Murphy, Denis (Wansbeck)

  Jones, Jon Owen (Cardiff C)

  Murphy, Jim (Eastwood)

  Jones, Kevan (N Durham)

  Murphy, Rt Hon Paul (Torfaen)

  Jones, Lynne (Selly Oak)

  Naysmith, Dr Doug

  Jones, Martyn (Clwyd S)

  Norris, Dan

  Jones, Nigel (Cheltenham)

  Oaten, Mark

  Jowell, Rt Hon Tessa

  O'Brien, Bill (Normanton)

  Kaufman, Rt Hon Gerald

  Olner, Bill

  Keen, Alan (Feltham & Heston)

  O'Neill, Martin

  Keen, Ann (Brentford & Isleworth)

  Öpik, Lembit

  Keetch, Paul

  Organ, Diana

  Kelly, Ruth

  Osborne, Sandra (Ayr)

  Kemp, Fraser

  Owen, Albert

  Kennedy, Jane (Wavertree)

  Palmer, Dr Nick

  Khabra, Piara S

  Pearson, Ian

  Kidney, David

  Perham, Linda

  Kilfoyle, Peter

  Picking, Anne

  King, Andy (Rugby & Kenilworth)

  Pickthall, Colin

  King, Ms Oona (Bethnal Green)

  Pike, Peter

  Kirkwood, Archy

  Plaskitt, James

  Knight, Jim (S Dorset)

  Pond, Chris

  Kumar, Dr Ashok

  Prentice, Ms Bridget (Lewisham E)

  Ladyman, Dr Stephen

  Price, Adam

  Lammy, David

  Primarolo, Dawn

  Lawrence, Mrs Jackie

  Prosser, Gwyn

  Laws, David

  Pugh, Dr John

  Laxton, Bob

  Purchase, Ken

  Lazarowicz, Mark

  Purnell, James

  Lepper, David

  Quin, Rt Hon Joyce

  Leslie, Christopher

  Quinn, Lawrie

  Levitt, Tom

  Rammell, Bill

  Lewis, Ivan (Bury S)

  Rapson, Syd

  Lewis, Terry (Worsley)

  Raynsford, Rt Hon Nick

  Liddell, Rt Hon Mrs Helen

  Reed, Andy (Loughborough)

  Linton, Martin

  Reid, Alan (Argyll & Bute)

  Llwyd, Elfyn

  Rendel, David

  Lucas, Ian

  Robertson, Angus (Moray)

  Luke, lain

  Robertson, John (Glasgow Anniesland)

  Lyons, John

  McAvoy, Thomas

  Robinson, Geoffrey (Cov"try NW)

  McCartney, Rt Hon Ian

  Roche, Mrs Barbara

  McDonagh, Siobhain

  Rooney, Terry

  MacDonald, Calum

  Ross, Ernie

  McDonnell, John

  Roy, Frank

  MacDougall, John

  Ruane, Chris

  McFall, John

  Ruddock, Joan

  McIsaac, Shona

  Russell, Bob (Colchester)

  McKechin, Ann

  Russell, Ms Christine (Chester)

  McKenna, Rosemary

  Ryan, Joan

  Mackinlay, Andrew

  Salmond, Alex

  281

  Sanders, Adrian

  Tonge, Dr Jenny

  Sarwar, Mohammad

  Touhig, Don

  Savidge, Malcolm

  Trickett, Jon

  Sawford, Phil

  Truswell, Paul

  Sedgemore, Brian

  Turner, Dennis (Wolverh'ton SE)

  Shaw, Jonathan

  Turner, Dr Desmond (Kemptown)

  Sheerman, Barry

  Turner, Neil (Wigan)

  Sheridan, Jim

  Twigg, Stephen (Enfield)

  Simon, Siôn

  Tyler, Paul

  Simpson, Alan (Nottingham S)

  Tynan, Bill

  Singh, Marsha

  Walley, Ms Joan

  Skinner, Dennis

  Ward, Ms Claire

  Smith, Rt Hon Andrew (Oxford E)

  Wareing, Robert N

  Smith, Angela (Basildon)

  Watson, Tom

  Smith, Rt Hon Chris (Islington S)

  Watts, David

  Smith, John (Glamorgan)

  Webb, Steve

  Soley, Clive

  Weir, Michael

  Southworth, Helen

  White, Brian

  Spellar, Rt Hon John

  Whitehead, Dr Alan

  Squire, Rachel

  Wicks, Malcolm

  Starkey, Dr Phyllis

  Williams, Rt Hon Alan (Swansea W)

  Steinberg, Gerry

  Stevenson, George

  Williams, Mrs Betty (Conwy)

  Stewart, David (Inverness E)

  Williams, Hywel (Caemarfon)

  Stewart, Ian (Eccles)

  Williams, Roger (Brecon)

  Stoate, Dr Howard

  Willis, Phil

  Strang, Rt Hon Dr Gavin

  Wilson, Brian

  Stringer, Graham

  Winnick, David

  Stuart, Ms Gisela

  Winterton, Ms Rosie (Doncaster C)

  Stunell, Andrew

  Wishart, Pete

  Sutcliffe, Gerry

  Woodward, Shaun

  Tami, Mark

  Woolas, Phil

  Taylor, Rt Hon Ann (Dewsbury)

  Worthington, Tony

  Taylor, David (NW Leics)

  Wright, Anthony D (Gt Yarmouth)

  Taylor, Matthew (Truro)

  Wright, David (Telford)

  Taylor, Dr Richard (Wyre F)

  Wright, Tony (Cannock)

  Thomas, Gareth (Clwyd W)

  Wyatt, Derek

  Thomas, Simon (Ceredigion)

  Younger-Ross, Richard

  Thurso, John

  Timms, Stephen

  Tellers for the Ayes:

  Tipping, Paddy

  Mr. Nick Ainger and

  Todd, Mark

  Mrs. Anne McGuire.

  NOES

  Amess, David

  Djanogly, Jonathan

  Ancram, Rt Hon Michael

  Dodds, Nigel

  Arbuthnot, Rt Hon James

  Dorrell, Rt Hon Stephen

  Atkinson, Peter (Hexham)

  Duncan, Peter (Galloway)

  Bacon, Richard

  Duncan Smith, Rt Hon lain

  Baldry, Tony

  Evans, Nigel

  Barker, Gregory

  Fabricant, Michael

  Baron, John

  Fallon, Michael

  Bellingham, Henry

  Field, Mark (Cities of London)

  Bercow, John

  Flight, Howard

  Beresford, Sir Paul

  Flook, Adrian

  Blunt, Crispin

  Forth, Rt Hon Eric

  Boswell, Tim

  Fox, Dr Liam

  Bottomley, Peter (Worthing W)

  Francois, Mark

  Brady, Graham

  Garnier, Edward

  Brazier, Julian

  Gibb, Nick

  Browning, Mrs Angela

  Gray, James

  Burns, Simon

  Grayling, Chris

  Burnside, David

  Green, Damian (Ashford)

  Burt, Alistair

  Greenway, John

  Butterfill, John

  Grieve, Dominic

  Cash, William

  Gummer, Rt Hon John

  Chope, Christopher

  Hague, Rt Hon William

  Clappison, James

  Hammond, Philip

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Hawkins, Nick

  Hayes, John

  Clifton-Brown, Geoffrey

  Heald, Oliver

  Conway, Derek

  Heathcoat-Amory, Rt Hon David

  Cormack, Sir Patrick

  Hendry, Charles

  Curry, Rt Hon David

  Hoban, Mark

  Davies, Quentin (Grantham)

  Hogg, Rt Hon Douglas

  Davis, Rt Hon David (Haltemprice)

  Horam, John

  282

  Howard, Rt Hon Michael

  Robertson, Hugh (Faversham)

  Howarth, Gerald (Aldershot)

  Robertson, Laurence (Tewk'b'ry)

  Hunter, Andrew

  Robinson, Mrs Iris (Strangford)

  Jack, Rt Hon Michael

  Robinson, Peter (Belfast E)

  Jackson, Robert (Wantage)

  Rosindell, Andrew

  Jenkin, Bernard

  Ruffley, David

  Johnson, Boris (Henley)

  Sayeed, Jonathan

  Key, Robert

  Selous, Andrew

  Kirkbride, Miss Julie

  Shephard, Rt Hon Mrs Gillian

  Knight, Rt Hon Greg (E Yorkshire)

  Simmonds, Mark

  Laing, Mrs Eleanor

  Simpson, Keith (Mid-Norfolk)

  Lait, Mrs Jacqui

  Smyth, Rev Martin (Belfast S)

  Lansley, Andrew

  Soames, Nicholas

  Leigh, Edward

  Spicer, Sir Michael

  Liddell-Grainger, Ian

  Spink, Bob

  Lidington, David

  Spring, Richard

  Lilley, Rt Hon Peter

  Stanley, Rt Hon Sir John

  Loughton, Tim

  Steen, Anthony

  Luff, Peter

  Streeter, Gary

  McIntosh, Miss Anne

  Swayne, Desmond

  MacKay, Rt Hon Andrew

  Swire, Hugo

  Maclean, Rt Hon David

  Syms, Robert

  McLoughlin, Patrick

  Tapsell, Sir Peter

  Malins, Humfrey

  Taylor, Ian (Esher & Walton)

  Maples, John

  Taylor, John (Solihull)

  Mates, Michael

  Taylor, Sir Teddy

  Maude, Rt Hon Francis

  Tredinnick, David

  Mawhinney, Rt Hon Sir Brian

  Trend, Michael

  May, Mrs Theresa

  Turner, Andrew (Isle of Wight)

  Mercer, Patrick

  Tyrie, Andrew

  Mitchell, Andrew (Sutton Coldfield)

  Viggers, Peter

  Moss, Malcolm

  Waterson, Nigel

  Murrison, Dr Andrew

  Watkinson, Angela

  Norman, Archie

  Whittingdale, John

  O'Brien, Stephen (Eddisbury)

  Widdecombe, Rt Hon Miss Ann

  Osborne, George (Tatton)

  Wiggin, Bill

  Ottaway, Richard

  Willetts, David

  Page, Richard

  Wilshire, David

  Paice, James

  Winterton, Mrs Ann (Congleton)

  Paisley, Rev Ian

  Winterton, Nicholas (Macclesfield)

  Paterson, Owen

  Yeo, Tim

  Pickles, Eric

  Young, Rt Hon Sir George

  Portillo, Rt Hon Michael

  Prisk, Mark

  Tellers for the Noes:

  Redwood, Rt Hon John

  Mrs. Cheryl Gillan and

  Robathan, Andrew

  Dr. Julian Lewis.

  Question accordingly agreed to.

  42. PETROLEUM EXTRACTION ACTIVITIES (COMPANIES CARRYING ON RING FENCE TRADES)
  Motion made, and Question put,
  That provision may be made in relation to companies carrying on ring fence trades, as defined in section 502(1) of the Income and Corporation Taxes Act 1988.
  As an Amendment to Mr Chancellor of the Exchequer's proposed Motion (Petroleum extraction activities (companies carrying on ring fence trades)):

  Mr Alex Salmond

  Mr Elfyn Llwyd

  Line 2, at end add 'That any such provision shall not have effect until a full economic assessment has been conducted about the impact of any changes to current and future employment and exploration related to North Sea activities.'.
  The House divided: Ayes 319, Noes 209.

  Division No. 217]

  [10.53 pm

  AYES

  Abbott, Ms Diane

  Alexander, Douglas

  Adams, Mrs Irene (Paisley N)

  Allen, Graham

  Ainger, Nick

  Anderson, Rt Hon Donald (Swansea E)

  Ainsworth, Bob (Cov"try NE)

  283

  Armstrong, Rt Hon Ms Hilary

  Davidson, Ian

  Atherton, Ms Candy

  Davies, Rt Hon Denzil (Llanelli)

  Atkins, Charlotte

  Dawson, Hilton

  Austin, John

  Dean, Mrs Janet

  Bailey, Adrian

  Denham, Rt Hon John

  Baird, Vera

  Dhanda, Parmjit

  Barnes, Harry

  Dismore, Andrew

  Barron, Kevin

  Dobbin, Jim

  Battle, John

  Dobson, Rt Hon Frank

  Bayley, Hugh

  Donohoe, Brian H

  Beard, Nigel

  Doran, Frank

  Beckett, Rt Hon Margaret

  Dowd, Jim

  Begg, Miss Anne

  Drew, David

  Bell, Stuart

  Eagle, Angela (Wallasey)

  Benn, Hilary

  Eagle, Maria (L'pool Garston)

  Bennett, Andrew

  Edwards, Huw

  Benton, Joe

  Efford, Clive

  Best, Harold

  Ellman, Mrs Louise

  Betts, Clive

  Ennis, Jeff

  Blackman, Liz

  Farrelly, Paul

  Blears, Ms Hazel

  Field, Rt Hon Frank (Birkenhead)

  Boateng, Rt Hon Paul

  Fitzpatrick, Jim

  Borrow, David

  Flint, Caroline

  Bradley, Rt Hon Keith (Withington)

  Follett, Barbara

  Bradley, Peter (The Wrekin)

  Foster, Rt Hon Derek

  Bradshaw, Ben

  Foster, Michael (Worcester)

  Brennan, Kevin

  Foster, Michael Jabez (Hastings)

  Brown, Rt Hon Gordon (Dunfermline E)

  Foulkes, George

  Francis, Dr Hywel

  Brown, Russell (Dumfries)

  Galloway, George

  Browne, Desmond

  Gapes, Mike

  Bryant, Chris

  Gardiner, Barry

  Buck, Ms Karen

  George, Rt Hon Bruce (Walsall S)

  Burgon, Colin

  Gerrard, Neil

  Burnham, Andy

  Gibson, Dr Ian

  Caborn, Rt Hon Richard

  Gilroy, Linda

  Cairns, David

  Godsiff, Roger

  Campbell, Alan (Tynemouth)

  Goggins, Paul

  Campbell, Mrs Anne (C'bridge)

  Griffiths, Jane (Reading E)

  Caplin, Ivor

  Griffiths, Win (Bridgend)

  Casale, Roger

  Grogan, John

  Caton, Martin

  Hain, Rt Hon Peter

  Cawsey, Ian

  Hall, Mike (Weaver Vale)

  Challen, Colin

  Hall, Patrick (Bedford)

  Chapman, Ben (Wirral S)

  Hamilton, David (Midlothian)

  Chaytor, David

  Hamilton, Fabian (Leeds NE)

  Clapham, Michael

  Hanson, David

  Clark, Mrs Helen (Peterborough)

  Havard, Dai

  Clark, Dr Lynda (Edinburgh Pentlands)

  Healey, John

  Henderson, Doug (Newcastle N)

  Clark, Paul (Gillingham)

  Henderson, Ivan (Harwich)

  Clarke, Rt Hon Tom (Coatbridge)

  Hendrick, Mark

  Clarke, Tony (Northampton S)

  Hepburn, Stephen

  Clelland, David

  Heppell, John

  Clwyd, Ann

  Hill, Keith

  Coaker, Vernon

  Hoey, Kate

  Coffey, Ms Ann

  Hood, Jimmy

  Cohen, Harry

  Hope, Phil

  Coleman, lain

  Hopkins, Kelvin

  Colman, Tony

  Howarth, Rt Hon Alan (Newport E)

  Connarty, Michael

  Howarth, George (Knowsley N)

  Cook, Frank (Stockton N)

  Hoyle, Lindsay

  Cook, Rt Hon Robin (Livingston)

  Hughes, Beverley (Stretford)

  Corbyn, Jeremy

  Humble, Mrs Joan

  Corston, Jean

  Hurst, Alan

  Cousins, Jim

  Hutton, Rt Hon John

  Cranston, Ross

  Iddon, Dr Brian

  Crausby, David

  Ingram, Rt Hon Adam

  Cruddas, Jon

  Irranca-Davies, Huw

  Cryer, John (Hornchurch)

  Jackson, Helen (Hillsborough)

  Cunningham, Jim (Cov'try S)

  Jamieson, David

  Cunningham, Tony (Workington)

  Jenkins, Brian

  Curtis-Thomas, Mrs Claire

  Johnson, Alan (Hull W & Hessle)

  Dalyell, Tam

  Jones, Helen (Warrington N)

  Davey, Valerie (Bristol W)

  Jones, Jon Owen (Cardiff C)

  David, Wayne

  Jones, Kevan (N Durham)

  284

  Jones, Lynne (Selly Oak)

  Pond, Chris

  Jones, Martyn (Clwyd S)

  Prentice, Ms Bridget (Lewisham E)

  Kaufman, Rt Hon Gerald

  Primarolo, Dawn

  Keen, Alan (Feltham & Heston)

  Prosser, Gwyn

  Keen, Ann (Brentford & Isleworth)

  Purchase, Ken

  Kemp, Fraser

  Purnell, James

  Khabra, Piara S

  Quin, Rt Hon Joyce

  Kidney, David

  Quinn, Lawrie

  Kilfoyle, Peter

  Rammell, Bill

  King, Andy (Rugby & Kenilworth)

  Rapson, Syd

  King, Ms Oona (Bethnal Green)

  Raynsford, Rt Hon Nick

  Knight, Jim (S Dorset)

  Reed Andy (Loughborough)

  Kumar, Dr Ashok

  Robertson, John (Glasgow Anniesland)

  Ladyman, Dr Stephen

  Lammy, David

  Robinson, Geoffrey (Cov'try NW)

  Lawrence, Mrs Jackie

  Roche Mrs Barbara

  Laxton, Bob

  Rooney, Terry

  Lazarowicz, Mark

  Ross, Ernie

  Lepper, David

  Roy, Frank

  Leslie, Christopher

  Ruane, Chris

  Levitt, Tom

  Ruddock, Joan

  Lewis, Ivan (Bury S)

  Russell, Ms Christine (Chester)

  Lewis, Terry (Worsley)

  Ryan, Joan

  Linton, Martin

  Lucas Ian

  Sarwar, Mohammad

  Luke, lain

  Savidge, Malcolm

  Lyons, John

  Sawford, Phil

  McAvoy, Thomas

  Sedgemore, Brian

  McDonagh, Siobhain

  Shaw, Jonathan

  MacDonald, Calum

  Sheerman, Barry

  McDonnell, John

  Sheridan, Jim

  MacDougall, John

  Simon, Siôn

  McFall, John

  Simpson, Alan (Nottingham S)

  McGuire, Mrs Anne

  Singh, Marsha

  McIsaac, Shona

  Skinner, Dennis

  McKechin, Ann

  Smith, Rt Hon Andrew (Oxford E)

  McKenna, Rosemary

  Smith, Angela (Basildon)

  Mackinlay, Andrew

  Smith, Rt Hon Chris (Islington S)

  Mactaggart, Fiona

  Smith, John (Glamorgan)

  McWalter, Tony

  Soley, Clive

  Mahmood, Khalid

  Southworth, Helen

  Mahon, Mrs Alice

  Spellar, Rt Hon John

  Mallaber, Judy

  Squire, Rachel

  Mandelson, Rt Hon Peter

  Starkey, Dr Phyllis

  Mann, John

  Steinberg, Gerry

  Marris, Rob

  Stevenson, George

  Marsden, Gordon (Blackpool S)

  Stewart David (lnvemess E)

  Marshall, Jim (Leicester S)

  Stewart, Ian(Eccles)

  Martlew, Eric

  Stoate, Dr Howard

  Meacher, Rt Hon Michael

  Strang, Rt Hon Dr Gavin

  Merron Gillian

  Stringer, Graham

  Michael, Rt Hon Alun

  Stuart, Ms Gisela

  Miliband David

  Sutcliffe, Gerry

  Miller, Andrew

  Tami, Mark

  Mitchell, Austin (Gt Grimsby)

  Taylor, Rt Hon Ann (Dewsbury)

  Moffatt, Laura

  Taylor, David (NW Leics)

  Morgan, Julie

  Thomas, Gareth (Clwyd W)

  Morley, Elliot

  Mullin Chris

  Timms, Stephen

  Munn, Ms Meg

  Tipping Paddy

  Murphy, Denis (Wansbeck)

  Todd, Mark

  Murphy, Jim (Eastwood)

  Touhig, Don

  Naysmith, Dr Doug

  Trickett, Jon

  Norris, Dan

  Truswell, Paul

  O'Brien, Bill (Normanton)

  Turner, Dennis (Wolverh'ton SE)

  Olner, Bill

  Turner, Dr Desmond (Kemptown)

  O'Neill, Martin

  Turner, Neil (Wigan)

  Organ, Diana

  Twigg, Stephen (Enfield)

  Osborne, Sandra (Ayr)

  Tynan, Bill

  Owen, Albert

  Walley, Ms Joan

  Palmer, Dr Nick

  Ward, Ms Claire

  Perham, Linda

  Wareing, Robert N

  Picking, Anne

  Watson, Tom

  Pickthall, Colin

  Watts, David

  Pike, Peter

  White, Brian

  Plaskitt, James

  Whitehead, Dr Alan

  285

  Wicks, Malcolm

  Worthington, Tony

  Williams, Rt Hon Alan (Swansea W)

  Wright, Anthony D (Gt Yarmouth)

  Wright, David (Telford)

  Williams, Mrs Betty (Conwy)

  Wright, Tony (Cannock)

  Wilson, Brian

  Wyatt, Derek

  Winnick, David

  Winterton, Ms Rosie (Doncaster C)

  Tellers for the Ayes:

  Woodward, Shaun

  Mr. Tony McNulty and

  Woolas, Phil

  Mr. Ian Pearson.

  NOES

  Allan, Richard

  Francois, Mark

  Amess, David

  Garnier, Edward

  Ancram, Rt Hon Michael

  George, Andrew (St Ives)

  Arbuthnot, Rt Hon James

  Gibb, Nick

  Atkinson, Peter (Hexham)

  Gidley, Sandra

  Bacon, Richard

  Gray, James

  Baldry, Tony

  Grayling, Chris

  Barker, Gregory

  Green, Damian (Ashford)

  Baron, John

  Green, Matthew (Ludlow)

  Barrett, John

  Greenway, John

  Beggs, Roy

  Grieve, Dominic

  Bellingham, Henry

  Gummer, Rt Hon John

  Bercow, John

  Hague, Rt Hon William

  Beresford, Sir Paul

  Hammond, Philip

  Blunt, Crispin

  Harris, Dr Evan (Oxford W)

  Boswell, Tim

  Harvey, Nick

  Bottomley, Peter (Worthing W)

  Hawkins, Nick

  Bottomley, Rt Hon Virginia

  Hayes, John

  Brady, Graham

  Heald, Oliver

  Brake, Tom

  Heath, David

  Brazier, Julian

  Heathcoat-Amory, Rt Hon David

  Breed, Colin

  Hendry, Charles

  Brooke, Mrs Annette L

  Hermon, Lady

  Browning, Mrs Angela

  Hoban, Mark

  Burnett, John

  Hogg, Rt Hon Douglas

  Burns, Simon

  Holmes, Paul

  Burnside, David

  Horam, John

  Burstow, Paul

  Howard, Rt Hon Michael

  Burt, Alistair

  Howarth, Gerald (Aldershot)

  Butterfill, John

  Hughes, Simon (Southwark N)

  Cable, Dr Vincent

  Hunter, Andrew

  Calton, Mrs Patsy

  Jack, Rt Hon Michael

  Campbell, Rt Hon Menzies (NE Fife)

  Jackson, Robert (Wantage)

  Jenkin, Bernard

  Carmichael, Alistair

  Johnson, Boris (Henley)

  Cash, William

  Jones, Nigel (Cheltenham)

  Chidgey, David

  Keetch, Paul

  Chope, Christopher

  Key, Robert

  Clappison, James

  Kirkbride, Miss Julie

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Kirkwood, Archy

  Knight, Rt Hon Greg (E Yorkshire)

  Clifton-Brown, Geoffrey

  Laing, Mrs Eleanor

  Conway, Derek

  Lait, Mrs Jacqui

  Cormack, Sir Patrick

  Lansley, Andrew

  Cotter, Brian

  Laws, David

  Curry, Rt Hon David

  Leigh, Edward

  Davey, Edward (Kingston)

  Liddell-Grainger, Ian

  Davies, Quentin (Grantham)

  Lidington, David

  Davis, Rt Hon David (Haltemprice)

  Lilley, Rt Hon Peter

  Djanogly, Jonathan

  Llwyd, Elfyn

  Dodds, Nigel

  Loughton, Tim

  Dorrell, Rt Hon Stephen

  Luff, Peter

  Doughty, Sue

  McIntosh, Miss Anne

  Duncan, Peter (Galloway)

  MacKay, Rt Hon Andrew

  Duncan Smith, Rt Hon lain

  Maclean, Rt Hon David

  Evans, Nigel

  McLoughlin, Patrick

  Ewing, Annabelle

  Malins, Humfrey

  Fabricant, Michael

  Maples, John

  Fallon, Michael

  Marsden, Paul (Shrewsbury)

  Field, Mark (Cities of London)

  Mates, Michael

  Flight, Howard

  Maude, Rt Hon Francis

  Flook, Adrian

  Mawhinney, Rt Hon Sir Brian

  Forth, Rt Hon Eric

  May, Mrs Theresa

  Foster, Don (Bath)

  Mercer, Patrick

  Fox, Dr Liam

  Mitchell, Andrew (Sutton Coldfield)

  286

  Moore, Michael

  Steen, Anthony

  Moss, Malcolm

  Streeter, Gary

  Murrison, Dr Andrew

  Stunell, Andrew

  Norman, Archie

  Swayne, Desmond

  Oaten, Mark

  Swire, Hugo

  O'Brien, Stephen (Eddisbury)

  Syms, Robert

  Öpik, Lembit

  Tapsell, Sir Peter

  Osborne, George (Tatton)

  Taylor, Ian (Esher & Walton)

  Ottaway, Richard

  Taylor, John (Solihull)

  Page, Richard

  Taylor, Matthew (Truro)

  Paice, James

  Taylor, Dr Richard (Wyre F)

  Paisley, Rev Ian

  Taylor, Sir Teddy

  Paterson, Owen

  Thomas, Simon (Ceredigion)

  Pickles, Eric

  Thurso, John

  Portillo, Rt Hon Michael

  Tonge Dr Jenny

  Price, Adam

  Tredinnick, David

  Prisk, Mark

  Trend, Michael

  Pugh Dr John

  Turner, Andrew (Isle of Wight)

  Reid, Alan (Argyll & Bute)

  Tyler, Paul

  Rendel, David

  Tyrie, Andrew

  Robathan, Andrew

  Viggers, Peter

  Robertson, Angus (Moray)

  Waterson, Nigel

  Robertson, Hugh (Faversham)

  Watkinson, Angela

  Robertson, Laurence (Tewk'b'ry)

  Webb, Steve

  Robinson, Mrs Iris (Strangford)

  Weir, Michael

  Robinson, Peter (Belfast E)

  Whittingdale, John

  Rosindell, Andrew

  Widdecombe, Rt Hon Miss Ann

  Ruffley, David

  Wiggin, Bill

  Russell Bob (Colchester)

  Willetts, David

  Russell, Bob (Colchester)

  Williams, Hywel (Caemarfon)

  Salmond, Alex

  Williams, Roger (Brecon)

  Sanders, Adrian

  Willis, Phil

  Sayeed, Jonathan

  Wilshire, David

  Selous, Andrew

  Winterton, Mrs Ann (Congleton)

  Shephard, Rt Hon Mrs Gillian

  Winterton, Nicholas (Macclesfield)

  Simmonds, Mark

  Wishart Pete

  Simpson, Keith (Mid-Norfolk)

  Yeo, Tim

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

  Young, Rt Hon Sir George

  Smyth, Rev Martin (Belfast S)

  Younger-Ross, Richard

  Spicer, Sir Michael

  Spink, Bob

  Tellers for the Noes:

  Spring, Richard

  Mrs. Cheryl Gillan and

  Stanley, Rt Hon Sir John

  Dr. Julian Lewis.

  Question accordingly agreed to.

  43. FILMS: RESTRICTION OF RELIEF
  Resolved,
  That provision may be made restricting relief under the following provisions—

  (a) section 40D of the Finance (No.2) Act 1992;

  (b) section 41 of that Act;

  (c) section 42 of that Act;

  (d) section 48 of the Finance (No.2) Act 1997.

  44. DISTRIBUTIONS (REASONABLE COMMERCIAL RETURN FOR USE OF PRINCIPAL SECURED)
  Resolved,
  That provision may be made as to the cases in which any interest or other distribution out of assets of a company is a distribution, within the meaning of the Corporation Tax Acts, by virtue of section 209(2)(d) of the Income and Corporation Taxes Act 1988.

  45. REFERENCES TO ACCOUNTING PRACTICE ETC
  Resolved,
  That provision (including provision having retrospective effect) may be made standardising references in the Tax Acts to accounting practice and periods of account.

  46. DISCOUNTED SECURITIES ETC
  Resolved,
  That provision (including provision having retrospective effect) may be made amending Schedule 13 to the Finance Act 1996.

  47. VALUATION OF TRADING STOCK
  Resolved,
  That provision may be made as to the valuation of trading stock sold or transferred together with other assets.

  48. MANUFACTURED DIVIDENDS AND INTEREST
  Resolved,
  That provision may be made amending Schedule 23A to the Income and Corporation Taxes Act 1988.

  49. VENTURE CAPITAL TRUSTS (WINDING UP, MERGERS AND FURTHER SHARE ISSUES)
  Resolved,
  That provision (including provision having retrospective effect) may be made—

  (a) for cases where venture capital trusts are wound up;

  (b) for mergers (including takeovers) of venture capital trusts;

  (c) for disapplying, or restricting the application of, section 842AA(5B) of the Income and Corporation Taxes Act 1988.

  50. STAMP DUTY (LAND IN DISADVANTAGED AREAS)
  Resolved,
  That provision may be made about stamp duty on a conveyance or transfer of an estate or interest in land situated wholly or partly in a disadvantaged area, or on a lease of such land.

  51. STAMP DUTY (WITHDRAWAL OF GROUP RELIEF)
  Resolved,
  That the following provisions shall have effect for the period beginning with 24th April 2002 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) Paragraph (2) of this Resolution shall apply where—

  (a) an instrument ("the relevant instrument") transferring land in the United Kingdom from one company ("the transferor company") to another ("the transferee company") has been stamped on the basis that group relief applies,

  (b) before the end of the period of two years beginning with the date on which the instrument was executed the transferee company ceases to be a member of the same group as the transferor company, and

  (c) at the time when it ceases to be a member of the same group as the transferor company it holds an estate or interest in land—

  (i) that was transferred to it by the relevant instrument, or

  (ii) that is derived from an estate or interest that was so transferred,

  and that was not subsequently transferred to it by a duly stamped instrument for which group relief was not claimed.
  (2) In those circumstances—

  (a) group relief in relation to the relevant instrument, or an appropriate proportion of it, is withdrawn, and

  (b) the stamp duty that would have been payable on stamping the relevant instrument but for group relief if the estate or interest in land transferred by that instrument had been transferred at market value, or an appropriate proportion of the duty that would have been so paid, is payable by the transferee company within 30 days after that company ceases to be a member of the same group as the transferor company.

  (3) In paragraph (2) of this Resolution "an appropriate proportion" means an appropriate proportion having regard to what was transferred by the relevant instrument and what the transferee company holds at the time it ceases to be a member of the same group as the transferor company.
  288
  (4) In this Resolution "group relief" means relief under any of the following provisions—

  (a) section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954;

  (b) section 151 of the Finance Act 1995.

  (5) In this Resolution—

  (a) references to the transfer of land include the grant or surrender of an estate or interest in or over land;

  (b) "company" includes any body corporate; and

  (c) references to a company being in the same group as another company are to the companies being associated bodies corporate within the meaning of the relevant group relief provision.

  (6) Where the relevant instrument transfers land in the United Kingdom together with other property, the provisions of this Resolution apply as if there were two separate instruments, one relating to land in the United Kingdom and the other relating to other property.
  (7) Paragraph (2) of this Resolution does not apply if the transferee company ceases to be a member of the same group as the transferor company by reason of the latter company leaving the group.
  (8) The transferor company is regarded as leaving the group if the companies cease to be members of the same group by reason of a transaction relating to shares in—

  (a) the transferor company, or

  (b) another company that as a result of the transaction ceases to be a member of the same group as the transferee company.

  (9) Paragraph (2) of this Resolution does not apply if—

  (a) the transferee company ceases to be a member of the same group as the transferor company as a result of an acquisition of shares by another company ("the parent company") in relation to which acquisition relief applies, and

  (b) the transferee company is immediately after that acquisition a member of the same group as the parent company ("the new group").

  (10) For this purpose—

  (a) "acquisition relief" means relief under section 75 of the Finance Act 1986; and

  (b) references to an acquisition in relation to which such relief applies are to an acquisition such that an instrument effecting the transfer of the shares is exempt from stamp duty by virtue of that provision.

  (11) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—

  (a) the transferee company ceases to be a member of the new group, and

  (b) at the time when it ceases to be a member of the new group it holds an estate or interest in land that—

  (i) was transferred to it by the relevant instrument, or

  (ii) is derived from an estate or interest that was so transferred,

  and that was not subsequently transferred to it by a duly stamped instrument for which group relief was not claimed,
  the provisions of this Resolution shall apply as if the company had then ceased to be a member of the same group as the transferor company.
  (12) Where an amount of duty is payable under this Resolution, interest on that amount is payable as from the end of the period of 30 days from the day on which the relevant instrument was executed.
  (13) The provisions of section 15A(3) to (5) of the Stamp Act 1891 apply in relation to interest under paragraph (13) of this Resolution.

  289
  (14) The transferee company shall, within the period of 30 days mentioned in paragraph (2)(b) of this Resolution within which payment is to be made, notify the Commissioners of—

  (a) the date on which it ceased to be a member of the same group as the transferor company,

  (b) the relevant land held by it at that time,

  (c) the nature of the relevant instrument, the date on which it was executed, the parties to the instrument and the date on which the instrument was stamped,

  (d) the market value of the land transferred to it by the relevant instrument at the date on which that instrument was executed, and

  (e) the amount of duty and interest payable by it under this Resolution.

  (15) In paragraph (14)(b) of this Resolution the "relevant land" held by the transferee company means every estate or interest in relation to which paragraph (1)(c) of this Resolution applies.
  (16) Section 98 of the Taxes Management Act 1970 shall have effect as if a reference to paragraph (14) of this Resolution were inserted in the second column of the Table in subsection (5) of that section.
  (17) The provisions of regulations under section 98 of the Finance Act 1986, and the provisions of the Taxes Management Act 1970 applied by those regulations, have effect with the necessary modifications in relation to—

  (a) the determination by the Commissioners of the duty payable under this Resolution or the interest payable thereon,

  (b) appeals against any such determination, and

  (c) the collection and recovery of any such duty or interest,

  as if it were an amount of stamp duty reserve tax.
  (18) This paragraph applies where —

  (a) an amount is payable under this Resolution by the transferee company,

  (b) a notice of determination of the amount payable has been issued by the Commissioners, and

  (c) the whole or part of that amount is unpaid six months after the date on which it became payable.

  (19) The following persons may, by notice under paragraph (22) of this Resolution, he required to pay the unpaid amount—

  (a) any company that at any relevant time was a member of the same group as the transferee company, and

  (b) any person who at any relevant time was a controlling director of the transferee company or of a company having control of the transferee company.

  (20) For this purpose a "relevant time" means any time between the execution of the relevant instrument and the transferee company ceasing to be a member of the same group as the transferor company.
  (21) In paragraph (19) of this Resolution—

  (a) "director", in relation to a company, has the meaning given by section 168(8) of the Income and Corporation Taxes Act 1988 (read with subsection (9) of that section) and includes any person falling within section 417(5) of that Act (read with subsection (6) of that section); and

  (b) "controlling director", in relation to a company, means a director of the company who has control of it (construing control in accordance with section 416 of that Act).

  (22) The Commissioners may serve a notice on a person within paragraph (19) of this Resolution requiring him, within 30 days of the service of the notice, to pay the amount that remains unpaid.
  290
  (23) Any such notice must be served before the end of the period of three years beginning with the date on which the notice of determination mentioned in paragraph (18)(b) of this Resolution is issued.
  (24) The notice must state the amount required to be paid by the person on whom the notice is served.
  (25) The notice has effect—

  (a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

  (b) for the purposes of appeals,

  as if it were a notice of determination and that amount were an amount of stamp duty reserve tax due from that person.
  (26) A person who has paid an amount in pursuance of a notice under paragraph (22) of this Resolution may recover that amount from the transferee company.
  (27) A payment in pursuance of such a notice is not allowed as a deduction in computing any income, profits or losses for any tax purposes.
  (28) The Commissioners may by notice require any person to furnish them within such time, not being less than 30 days, as may be specified in the notice with such information (including documents or records) as the Commissioners may reasonably require for the purposes of this Resolution.
  (29) A barrister or solicitor shall not be obliged in pursuance of a notice under paragraph (28) of this Resolution to disclose, without his client's consent, any information with respect to which a claim to professional privilege could be maintained.
  (30) Section 98 of the Taxes Management Act 1970 shall have effect as if a reference to paragraph (28) of this Resolution were inserted in the first column of the Table in subsection (5) of that section.
  (31) This Resolution shall be construed as one with the Stamp Act 1891.
  (32) This Resolution shall apply where the relevant instrument is executed after 23rd April 2002.
  (33) But this Resolution does not apply to an instrument giving effect to a contract made on or before 17th April 2002, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  (34) This Resolution shall come into force on 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  52. STAMP DUTY (RESTRICTION OF RELIEF FOR COMPANY ACQUISITIONS)
  Resolved,
  That the following provisions shall have effect for the period beginning with 24th April 2002 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) Section 76 of the Finance Act 1986 shall be amended as follows.
  (2) In subsection (2) for "the condition mentioned in subsection (3) below" substitute "the first and second conditions (as defined below)".
  (3) In subsection (3) for "The condition" substitute "The first condition".
  (4) After subsection (3) insert—
  "(3A) The second condition applies only in relation to an instrument transferring land in the United Kingdom and is that the acquiring company is not associated with another company that is a party to

  291
  arrangements with the target company relating to shares of the acquiring company issued in connection with the transfer of the undertaking or part.
  (3B) Where an instrument transfers land in the United Kingdom together with other property, the provisions of this section apply as if there were two separate instruments, one relating to land in the United Kingdom and the other relating to other property.".
  (5) In subsection (5) for "subsection (2) above" (twice) substitute "this section".
  (6) After subsection (6) insert—
  "(6A) For the purposes of subsection (3A) above—

  (a) companies are associated if one has control of the other or both are controlled by the same person or persons, and

  (b) "arrangements" includes any scheme, agreement or understanding, whether or not legally enforceable.".

  The references in paragraph (a) above to control shall be construed in accordance with section 416 of the Taxes Act 1988.".
  (7) This Resolution shall apply to instruments executed after 23rd April 2002.
  (8) But this Resolution does not apply to an instrument giving effect to a contract made on or before 17th April 2002, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  (9) This Resolution shall come into force on 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  53. STAMP DUTY (WITHDRAWAL OF RELIEF FOR COMPANY ACQUISITIONS)
  Resolved,
  That the following provisions shall have effect for the period beginning with 24th April 2002 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) Paragraph (2) of this Resolution shall apply where—

  (a) an instrument ("the relevant instrument") transferring land in the United Kingdom from one company to another company ("the acquiring company") has been stamped on the basis that relief under section 76 of the Finance Act 1986 ("section 76 relief") applies,

  (b) before the end of the period of two years beginning with the date on which the instrument was executed control of the acquiring company changes, and

  (c) at the time control of that company changes the acquiring company holds an estate or interest in land—

  (i) that was transferred to it by the relevant instrument, or

  (ii) that is derived from an estate or interest so transferred,

  and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed.
  (2) In those circumstances—

  (a) section 76 relief in relation to the relevant instrument, or an appropriate proportion of it, is withdrawn, and

  (b) the additional stamp duty that would have been payable on stamping the relevant instrument but for section 76 relief if the estate or interest in land transferred by that instrument had been transferred at market value, or an
  292
  appropriate proportion of that additional duty, is payable by the acquiring company within 30 days after control of that company changes.

  (3) In paragraph (2) of this Resolution "an appropriate proportion" means an appropriate proportion having regard to what was transferred by the relevant instrument and what the acquiring company holds at the time control of it changes.
  (4) In this Resolution—

  (a) references to the transfer of land include the grant or surrender of an estate or interest in or over land;

  (b) "control" shall be construed in accordance with section 416 of the Income and Corporation Taxes Act 1988; and

  (c) references to control of a company changing are to the company becoming controlled—

  (i) by a different person,

  (ii) by a different number of persons, or

  (iii) by two or more persons at least one of whom is not the person, or one of the persons, by whom the company was previously controlled.

  (5) Where the relevant instrument transfers land in the United Kingdom together with other property, the provisions of this Resolution apply as if there were two separate instruments, one relating to land in the United Kingdom and the other relating to other property.
  (6) Paragraph (2) of this Resolution does not apply by reason of control of the acquiring company changing as a result of any of the transactions listed in the Schedule to the Stamp Duty (Exempt Instruments) Regulations 1987.
  (7) Paragraph (2) of this Resolution does not apply by reason of control of the acquiring company changing as a result of a transfer of shares ("the intra-group transfer") in relation to which group relief applies.
  (8) For this purpose—

  (a) "group relief" means relief under section 42 of the Finance Act 1930 or section 11 of the Finance Act (Northern Ireland) 1954; and

  (b) references to a transfer in relation to which group relief applies are to a transfer such that an instrument effecting the transfer is exempt from stamp duty by virtue of either of the group relief provisions.

  (9) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—

  (a) a company ("company B") holding shares in the acquiring company to which the intra-group share transfer related, or that are derived from shares to which that instrument related, ceases to be a member of the same group as the company referred to in section 76 as the target company ("company C"), and

  (b) the acquiring company, at that time, holds an estate or interest in land—

  (i) that was transferred to it by the relevant instrument, or

  (ii) that is derived from an estate or interest so transferred,

  and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed,
  the following provisions apply.
  (10) In those circumstances—

  (a) section 76 relief in relation to the relevant instrument (or an appropriate proportion of that relief) is withdrawn, and

  (b) the additional stamp duty that would have been paid on stamping the relevant instrument but for that relief if the land in question had been transferred by that instrument at market value, or an appropriate proportion of that

  293
  amount, is payable by the acquiring company within 30 days after company B ceases to be a member of the same group as company C.

  (11) In paragraphs (7) to (10) of this Resolution—

  (a) "company" includes any body corporate; and

  (b) references to a company being in the same group as another company are to the companies being associated bodies corporate within the meaning of the relevant group relief provision.

  (12) Paragraph (2) of this Resolution does not apply by reason of control of the acquiring company changing as a result of a transfer of shares ("the exempt transfer") to another company ("the parent company") in relation to which share acquisition relief applies.
  (13) For this purpose—

  (a) "share acquisition relief" means relief under section 77 of the Finance Act 1986; and

  (b) references to a transfer in relation to which such relief applies are to a transfer such that an instrument effecting the transfer is exempt from stamp duty by virtue of that provision.

  (14) But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—

  (a) control of the parent company changes at a time when that company holds any shares transferred to it by the exempt transfer, or any shares derived from shares so transferred, and

  (b) the acquiring company, at that time, holds an estate or interest in land—

  (i) that was transferred to it by the relevant instrument, or

  (ii) that is derived from an estate or interest so transferred,

  and that was not subsequently transferred to it by a duly stamped instrument on which ad valorem duty was paid and in relation to which section 76 relief was not claimed,
  the following provisions apply.
  (15) In those circumstances—

  (a) section 76 relief in relation to the relevant instrument (or an appropriate proportion of that relief) is withdrawn, and

  (b) the additional stamp duty that would have been paid on stamping the relevant instrument but for that relief if the land in question had been transferred by that instrument at market value, or an appropriate proportion of that additional duty, is payable by the acquiring company within 30 days after control of the parent company changed.

  (16) Where an amount of duty is payable under this Resolution, interest on that amount is payable as from the end of the period of 30 days from the day on which the relevant instrument was executed.
  (17) The provisions of section 15A(3) to (5) of the Stamp Act 1891 apply in relation to interest under paragraph (16) of this Resolution.
  (18) The acquiring company shall, within the period of 30 days within which payment is to be made, notify the Commissioners of—

  (a) the date on which the event occurred by reason of which it is liable to make a payment of duty under this Resolution,

  (b) the relevant land held by it at that time,

  (c) the nature of the relevant instrument, the date on which it was executed, the parties to the instrument and the date on which the instrument was stamped,

  (d) the market value of the land transferred to it by the relevant instrument at the date on which that instrument was executed, and

  294

  (e) the amount of duty and interest payable by it.

  (19) In paragraph (18)(b) of this Resolution the "relevant land" held by the acquiring company means every estate or interest in relation to which paragraph (1)(c) of this Resolution applies.
  (20) Section 98 of the Taxes Management Act 1970 shall have effect as if a reference to paragraph (18) of this Resolution were inserted in the second column of the Table in subsection (5) of that section.
  (21) The provisions of regulations under section 98 of the Finance Act 1986, and the provisions of the Taxes Management Act 1970 applied by those regulations, have effect with the necessary modifications in relation to—

  (a) the determination by the Commissioners of the duty payable under this Resolution or the interest payable thereon,

  (b) appeals against any such determination, and

  (c) the collection and recovery of any such duty or interest, as if it were an amount of stamp duty reserve tax.

  (22) This paragraph applies where—

  (a) an amount is payable under this Resolution by the acquiring company,

  (b) a notice of determination of the amount payable has been issued by the Inland Revenue, and

  (c) the whole or part of that amount is unpaid six months after the date on which it became payable.

  (23) The following persons may, by notice under paragraph (26) of this Resolution, be required to pay the unpaid amount—

  (a) any company that at any relevant time was a member of the same group as the acquiring company, and

  (b) any person who at any relevant time was a controlling director of the acquiring company or of a company having control of the acquiring company.

  (24) For this purpose a "relevant time" means any time between the execution of the relevant instrument and the change of control by virtue of which the liability to pay the amount arises.
  (25) In paragraph (23) of this Resolution—

  (a) references to companies being in the same group are to one company having control of the other or both companies being under the control of the same person or persons;

  (b) "director", in relation to a company, has the meaning given by section 168(8) of the Income and Corporation Taxes Act 1988 (read with subsection (9) of that section) and includes any person falling within section 417(5) of that Act (read with subsection (6) of that section); and

  (c) "controlling director", in relation to a company, means a director of the company who has control of it.

  (26) The Commissioners may serve a notice on a person within paragraph (23) of this Resolution requiring him, within 30 days of the service of the notice, to pay the amount that remains unpaid.
  (27) Any such notice must be served before the end of the period of three years beginning with the date on which the notice of determination mentioned in paragraph (22)(b) is issued.
  (28) The notice must state the amount required to be paid by the person on whom the notice is served.
  (29) The notice has effect—

  (a) for the purposes of the recovery from that person of the amount required to be paid and of interest on that amount, and

  (b) for the purposes of appeals,

  as if it were a notice of determination and that amount were an amount of stamp duty reserve tax due from that person.

  295
  (30) A person who has paid an amount in pursuance of a notice under paragraph (26) of this Resolution may recover that amount from the acquiring company.
  (31) A payment in pursuance of such a notice is not allowed as a deduction in computing any income, profits or losses for any tax purposes.
  (32) The Commissioners may by notice require any person to furnish them within such time, not being less than 30 days, as may be specified in the notice with such information (including documents or records) as the Commissioners may reasonably require for the purposes of this Resolution.
  (33) A barrister or solicitor shall not be obliged in pursuance of a notice under paragraph (32) of this Resolution to disclose, without his client's consent, any information with respect to which a claim to professional privilege could be maintained.
  (34) Section 98 of the Taxes Management Act 1970 shall have effect as if a reference to paragraph (32) of this Resolution were inserted in the first column of the Table in subsection (5) of that section.
  (35) This Resolution shall be construed as one with the Stamp Act 1891.
  (36) This Resolution shall apply where the relevant instrument is executed after 23rd April 2002.
  (37) But this Resolution does not apply to an instrument giving effect to a contract made on or before 17th April 2002, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right, or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  (38) This Resolution shall come into force on 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  54. STAMP DUTY (CONTRACTS FOR SALE OF LAND)
  Resolved,
  That provision may be made with respect to stamp duty on contracts or agreements for the sale of an estate or interest on land.

  55. STAMP DUTY (ABOLITION ON INSTRUMENTS RELATING TO GOODWILL)
  Resolved,
  That the following provisions shall have effect for the period beginning 23rd April 2002 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) No stamp duty shall be chargeable on an instrument for the sale, transfer or other disposition of goodwill.
  (2) The provisions of paragraphs (3) to (7) of this Resolution shall apply where stamp duty under Part 1 of Schedule 13 to the Finance Act 1999 is chargeable on an instrument that relates partly to goodwill and partly to property other than goodwill.
  (3) In such a case—

  (a) the consideration in respect of which duty would otherwise be charged shall be apportioned, on a just and reasonable basis, as between the goodwill and the other property, and

  (b) the instrument shall be charged only in respect of the consideration attributed to the other property.

  (4) Where part of the property referred to in section 58(1) of the Stamp Act 1891 consists of goodwill, that provision shall have effect as if "the parties think fit" read "is just and reasonable".
  296
  (5) Where part of the property referred to in section 58(2) of the Stamp Act 1891 consists of goodwill, and both or (as the case may be) all the relevant persons are connected with one another, that provision shall have effect as if the words from "for distinct parts of the consideration" to the end of the subsection read ", the consideration shall be apportioned in such manner as is just and reasonable, so that a distinct consideration for each separate part or parcel is set forth in the conveyance relating thereto, and such conveyance is to be charged with ad valorem duty in respect of such distinct consideration.".
  (6) In a case where paragraph (4) or (5) of this Resolution applies and the consideration is apportioned in a manner that is not just and reasonable, the enactments relating to stamp duty shall have effect as if—

  (a) the consideration had been apportioned in a manner that is just and reasonable, and

  (b) the amount of any distinct consideration set forth in any conveyance relating to a separate part or parcel of property were such amount as is found by a just and reasonable apportionment (and not the amount actually set forth).

  (7) For the purposes of paragraph (5) of this Resolution—

  (a) a person is a relevant person if he is a person by or for whom the property is contracted to be purchased;

  (b) the question whether persons are connected with one another shall be determined in accordance with section 839 of the Income and Corporation Taxes Act 1988.

  (8) Goodwill shall be disregarded for the purposes of paragraph 6 of Schedule 13 to the Finance Act 1999.
  (9) Any statement as mentioned in paragraph 6(1) of that Schedule shall be construed as leaving out of account any matter which is to be so disregarded.
  (10) Section 12 of the Finance Act 1895 does not require any person who is authorised to purchase any property as mentioned in that section after 23rd April 2002 to include any goodwill in the instrument of conveyance required by that section to be produced to the Commissioners.
  (11) If the property consists wholly of goodwill no instrument of conveyance need be produced to the Commissioners under that section.
  (12) Paragraphs (1) to (9) of this Resolution shall apply to instruments executed on or after 23rd April 2002.
  (13) Paragraphs (10) and (11) of this Resolution shall apply where the Act mentioned in that section, and by virtue of which property is vested or a person is authorised to purchase property, is passed after 23rd April 2002.
  (14) In this Resolution "the enactments relating to stamp duty" means the Stamp Act 1891 and any enactment amending that Act or that is to be construed as one with that Act.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  56. INHERITANCE TAX (POWERS OVER SETTLED PROPERTY OR A SETTLEMENT)
  Resolved,
  That provision may be made amending the Inheritance Tax Act 1984 in relation to powers over, or exercisable (whether directly or indirectly) in relation to, settled property or a settlement.

  57. RATE OF LANDFILL TAX
  Resolved,
  That—
  (1) In section 42(1)(a) and (2) of the Finance Act 1996, for "£12" there shall be substituted "£13".
  (2) This Resolution shall have effect in relation to taxable disposals made, or treated as made, on or after 1st April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  58. CLIMATE CHANGE LEVY (COMBINED HEAT AND POWER STATIONS AND RENEWABLE SOURCES)
  That provision may be made in relation to electricity produced in combined heat and power stations or from renewable sources.

  59. CLIMATE CHANGE LEVY (INCORRECT CERTIFICATES)
  Resolved,
  That—
  (1) In Schedule 6 to the Finance Act 2000, in sub-paragraph (2)(a) of paragraph 101—

  (a) in sub-paragraph (ii) for "18 and 21, or" there shall be substituted "15, 18 and 21,";

  (b) before the word "and" at the end of sub-paragraph (iii) there shall be inserted "or (iv) a reduced-rate supply (or reduced-rate supplies),".

  (2) This Resolution shall apply in relation to certificates given in respect of any supplies made on or after 24th April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  60. CLIMATE CHANGE LEVY (INVOICES INCORRECTLY SHOWING LEVY DUE)
  Resolved,
  That provision may be made about the issuing of invoices that show an amount chargeable as climate change levy where no levy is chargeable in respect of the supply in question, or the amount so chargeable is less than the amount shown.

  61. AGGREGATES TAX (AMENDMENTS TO PROVISIONS EXEMPTING SPOIL ETC)
  Resolved,
  That—
  (1) In section 17(3) of the Finance Act 2001—

  (a) in paragraph (e) after "or other by-products" there shall be inserted ", not including the overburden,";

  (b) after that paragraph there shall be inserted—

  "(f) it consists wholly of the spoil from any process by which—

  (i) coal, lignite, slate or shale, or

  (ii) a substance listed in section 18(3) below,

  has been separated from other rock after being extracted or won with that other rock;".
  (2) Section 17(4)(b) of that Act shall be omitted.
  (3) This Resolution shall be deemed to have come into force on 1st April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  62. AGGREGATES LEVY (CRUSHING AND CUTTING ROCK)
  Resolved,
  That—
  (1) The following provisions of the Finance Act 2001 shall be omitted—

  (a) section 17(3)(a);

  (b) in section 20(1)—

  (i) the words "and is not rock" in paragraphs (a) and (b), and

  (ii) paragraph (c);

  (c) section 21(2)(b);

  (d) section 24(6)(b) and (8)(a).

  (2) In section 18(2)(a) of that Act, for "dimension stone" there shall be substituted "stone with one or more flat surfaces".
  (3) This Resolution shall be deemed to have come into force on 1st April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  63. AGGREGATES LEVY (MISCELLANEOUS AMENDMENTS)
  Motion made, and Question put,
  That—
  (1) In section 197(2) of the Finance Act 1996, in paragraph (h)(ii) for "paragraph 8(3)(a)" there shall be substituted "paragraphs 6 and 8(3)(a)".
  (2) In section 16(1) of the Finance Act 2001, for "A levy" there shall be substituted "A tax".
  (3) In section 17 of that Act—

  (a) for paragraph (2)(d) there shall be substituted—
  "(d) it is aggregate that on the commencement date is on a site other than—

  (i) its originating site, or

  (ii) a site that is required to be registered under the name of a person who is the operator, or one of the operators, of that originating site.";

  (b) in subsection (3)(d)(ii), for "otherwise than wholly or mainly" there shall he substituted "not";

  (c) in subsection (4)(d)—

  (i) after "the Petroleum Act 1998" there shall be inserted "or the Petroleum (Production) Act (Northern Ireland) 1964 (c. 28 (N.I.))";

  (ii) the words from "otherwise" to the end shall be omitted.

  (4) In section 18 of that Act—

  (a) in subsection (2)(c), for "some other substance" there shall be substituted "anything else";

  (b) in subsection (3), paragraphs (d) and (h) shall be omitted.

  (5) In section 19 of that Act—

  (a) in subsection (2)(b) for the words from "who is the operator" to the end there shall be substituted "under whose name that originating site is also registered";

  (b) after subsection (3) there shall be inserted—
  "(3A) For the purposes of subsection (3)(a) above "business" includes any activity of a Government department, local authority or charity.";

  (c) in subsection (4), for the words "adjacent land" in both places there shall be substituted "other land".

  (6) In section 22 of that Act, at the end of subsection (2) there shall be inserted—
  "For the purposes of this subsection "business" includes any activity of a Government department, local authority or charity.".
  (7) In section 24(6) of that Act, after paragraph (c) there shall be inserted—
  "(ca) for mixing, otherwise than in permitted circumstances (within the meaning given by section 19(7)), any aggregate with any material or substance other than water,".
  (8) In section 37(7) of that Act, paragraphs (g) to (j) shall be omitted.
  (9) In paragraph 1 of Schedule 4 of that Act—

  (a) for sub-paragraph (1) there shall be substituted—"

  (1) An unregistered person who—

  (a) is required to be registered for the purposes of aggregates levy, or

  (b) has formed the intention of carrying out taxable activities that are registrable,

  shall notify the Commissioners of that fact.

  299
  (1A) An unregistered person who—

  (a) would he required to be registered for the purposes of aggregates levy but for an exemption by virtue of regulations under section 24(4) of this Act, or

  (b) has formed the intention of carrying out taxable activities that would be registrable but for such an exemption,
  shall, in such cases or circumstances as may be prescribed in the regulations, notify the Commissioners of that fact.
  (1B) For the purposes of sub-paragraphs (1) and (1A) above, taxable activities are "registrable" if a person carrying them out is, by reason of doing so, required by section 24(2) of this Act to be registered for the purposes of aggregates levy.";

  (b) in sub-paragraphs (2) and (5), after "sub-paragraph (1)" there shall be inserted "or (1A)".

  (10) In paragraph 11(2) of Schedule 8 to that Act, paragraphs (f), (g) and (h) shall be omitted.
  (11) This Resolution shall be deemed to have come into force on 1st April 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  As an Amendment to Mr Chancellor of the Exchequer's proposed Motion (Aggregates Levy (miscellaneous amendments)):

  Mr Alex Salmond

  Mr Elfyn Llwyd

  Leave out paragraph (11) and insert—
  "() That any provision for the enforcement of the aggregates levy shall not have effect until a full environmental and economic impact assessment has been made relating to each country and region within the United Kingdom.".
  The House divided: Ayes 319, Noes 32.

  Division No. 218]

  [11.5 pm

  AYES

  Abbott, Ms Diane

  Bradley, Peter (The Wrekin)

  Adams, Mrs Irene (Paisley N)

  Bradshaw, Ben

  Ainger, Nick

  Brennan, Kevin

  Ainsworth, Bob (Cov"try NE)

  Brown, Rt Hon Gordon (Dunfermline E)

  Alexander, Douglas

  Allen, Graham

  Brown, Russell (Dumfries)

  Anderson, Rt Hon Donald (Swansea E)

  Browne, Desmond

  Bryant, Chris

  Armstrong, Rt Hon Ms Hilary

  Buck, Ms Karen

  Atherton, Ms Candy

  Burgon, Colin

  Atkins, Charlotte

  Burnham, Andy

  Austin, John

  Caborn, Rt Hon Richard

  Bailey, Adrian

  Cairns, David

  Baird, Vera

  Campbell, Alan (Tynemouth)

  Barnes, Harry

  Campbell, Mrs Anne (C'bridge)

  Barron, Kevin

  Caplin, Ivor

  Battle, John

  Casale, Roger

  Bayley, Hugh

  Caton, Martin

  Beard, Nigel

  Cawsey, Ian

  Begg, Miss Anne

  Challen, Colin

  Bell, Stuart

  Chapman, Ben (Wirral S)

  Benn, Hilary

  Chaytor, David

  Bennett, Andrew

  Clapham, Michael

  Benton, Joe

  Clark, Mrs Helen (Peterborough)

  Best, Harold

  Clark, Dr Lynda (Edinburgh Pentlands)

  Betts, Clive

  Blackman, Liz

  Clark, Paul (Gillingham)

  Blears, Ms Hazel

  Clarke, Rt Hon Tom (Coatbridge)

  Boateng, Rt Hon Paul

  Clarke, Tony (Northampton S)

  Borrow, David

  Clelland, David

  Bradley, Rt Hon Keith (Withington)

  Clwyd, Ann

  300

  Coaker, Vernon

  Hood, Jimmy

  Coffey, Ms Ann

  Hope, Phil

  Cohen, Harry

  Hopkins, Kelvin

  Coleman, lain

  Howarth, Rt Hon Alan (Newport E)

  Colman, Tony

  Howarth, George (Knowsley N)

  Connarty, Michael

  Hoyle, Lindsay

  Cook, Frank (Stockton N)

  Hughes, Beverley (Stretford)

  Cook, Rt Hon Robin (Livingston)

  Humble, Mrs Joan

  Corbyn, Jeremy

  Hurst, Alan

  Corston, Jean

  Hutton, Rt Hon John

  Cousins, Jim

  Iddon, Dr Brian

  Cranston, Ross

  Illsley, Eric

  Crausby, David

  Ingram, Rt Hon Adam

  Cruddas, Jon

  Irranca-Davies, Huw

  Cryer, John (Hornchurch)

  Jackson, Helen (Hillsborough)

  Cunningham, Jim (Cov'try S)

  Jamieson, David

  Cunningham, Tony (Workington)

  Jenkins, Brian

  Curtis-Thomas, Mrs Claire

  Johnson, Alan (Hull W & Hessle)

  Dalyell, Tam

  Jones, Helen (Warrington N)

  Davey, Valerie (Bristol W)

  Jones, Jon Owen (Cardiff C)

  David, Wayne

  Jones, Kevan (N Durham)

  Davidson, Ian

  Jones, Lynne (Selly Oak)

  Davies, Rt Hon Denzil (Llanelli)

  Jones, Martyn (Clwyd S)

  Dawson, Hilton

  Kaufman, Rt Hon Gerald

  Dean, Mrs Janet

  Keen, Alan (Feltham & Heston)

  Denham, Rt Hon John

  Keen, Ann (Brentford & Isleworth)

  Dhanda, Parmjit

  Kemp, Fraser

  Dismore, Andrew

  Khabra, Piara S

  Dobbin, Jim

  Kidney, David

  Dobson, Rt Hon Frank

  Kilfoyle, Peter

  Donohoe, Brian H

  King, Andy (Rugby & Kenilworth)

  Doran, Frank

  King, Ms Oona (Bethnal Green)

  Dowd, Jim

  Knight, Jim (S Dorset)

  Drew, David

  Kumar, Dr Ashok

  Eagle, Angela (Wallasey)

  Ladyman, Dr Stephen

  Eagle, Maria (L'pool Garston)

  Lammy, David

  Edwards, Huw

  Lawrence, Mrs Jackie

  Efford, Clive

  Laxton, Bob

  Ellman, Mrs Louise

  Lazarowicz, Mark

  Ennis, Jeff

  Lepper, David

  Farrelly, Paul

  Leslie, Christopher

  Field, Rt Hon Frank (Birkenhead)

  Levitt, Tom

  Fitzpatrick, Jim

  Lewis, Ivan (Bury S)

  Flint, Caroline

  Lewis, Terry (Worsley)

  Follett, Barbara

  Linton, Martin

  Foster, Michael (Worcester)

  Lucas, Ian

  Foster, Michael Jabez (Hastings)

  Luke, lain

  Foulkes, George

  Lyons, John

  Francis, Dr Hywel

  McAvoy, Thomas

  Galloway, George

  McDonagh, Siobhain

  Gapes, Mike

  MacDonald, Calum

  Gardiner, Barry

  McDonnell, John

  George, Rt Hon Bruce (Walsall S)

  MacDougall, John

  Gerrard, Neil

  McFall, John

  Gibson, Dr Ian

  McGuire, Mrs Anne

  Gilroy, Linda

  McIsaac, Shona

  Godsiff, Roger

  McKechin, Ann

  Goggins, Paul

  McKenna, Rosemary

  Griffiths, Jane (Reading E)

  Mackinlay, Andrew

  Griffiths, Win (Bridgend)

  Mactaggart, Fiona

  Grogan, John

  McWalter, Tony

  Hain, Rt Hon Peter

  Mahmood, Khalid

  Hall, Mike (Weaver Vale)

  Mahon, Mrs Alice

  Hall, Patrick (Bedford)

  Mallaber, Judy

  Hamilton, David (Midlothian)

  Mandelson, Rt Hon Peter

  Hamilton, Fabian (Leeds NE)

  Mann, John

  Hanson, David

  Marris, Rob

  Havard, Dai

  Marsden, Gordon (Blackpool S)

  Healey, John

  Marshall, Jim (Leicester S)

  Henderson, Doug (Newcastle N)

  Martlew, Eric

  Henderson, Ivan (Harwich)

  Meacher, Rt Hon Michael

  Hendrick, Mark

  Merron, Gillian

  Hepburn, Stephen

  Michael, Rt Hon Alun

  Heppell, John

  Miliband, David

  Hill, Keith

  Miller, Andrew

  Hoey, Kate

  Mitchell, Austin (Gt Grimsby)

  301

  Moffatt, Laura

  Smith, Angela (Basildon)

  Morgan, Julie

  Smith, Rt Hon Chris (Islington S)

  Morley, Elliot

  Smith, John (Glamorgan)

  Mullin, Chris

  Soley, Clive

  Munn, Ms Meg

  Southworth, Helen

  Murphy, Denis (Wansbeck)

  Spellar, Rt Hon John

  Murphy, Jim (Eastwood)

  Squire, Rachel

  Naysmith, Dr Doug

  Starkey, Dr Phyllis

  Norris, Dan

  Steinberg, Gerry

  O'Brien, Bill (Normanton)

  Stevenson, George

  Olner, Bill

  Stewart, David (Inverness E)

  O'Neill, Martin

  Stewart, Ian (Eccles)

  Organ, Diana

  Stoate, Dr Howard

  Osborne, Sandra (Ayr)

  Strang, Rt Hon Dr Gavin

  Owen, Albert

  Stringer, Graham

  Palmer, Dr Nick

  Stuart, Ms Gisela

  Perham, Linda

  Sutcliffe, Gerry

  Picking, Anne

  Tami, Mark

  Pickthall, Colin

  Taylor, Rt Hon Ann (Dewsbury)

  Pike, Peter

  Taylor, David (NW Leics)

  Plaskitt, James

  Thomas, Gareth (Clwyd W)

  Pond, Chris

  Timms, Stephen

  Prentice, Ms Bridget (Lewisham E)

  Tipping, Paddy

  Primarolo, Dawn

  Todd, Mark

  Prosser, Gwyn

  Touhig, Don

  Purchase, Ken

  Trickett, Jon

  Purnell, James

  Truswell, Paul

  Quin, Rt Hon Joyce

  Turner, Dennis (Wolverh'ton SE)

  Quinn, Lawrie

  Turner, Dr Desmond (Kemptown)

  Rammell, Bill

  Turner, Neil (Wigan)

  Rapson, Syd

  Twigg, Stephen (Enfield)

  Raynsford, Rt Hon Nick

  Tynan, Bill

  Reed, Andy (Loughborough)

  Walley, Ms Joan

  Robertson, John (Glasgow Anniesland)

  Ward, Ms Claire

  Wareing, Robert N

  Robinson, Geoffrey (Cov'try NW)

  Watson, Tom

  Roche, Mrs Barbara

  Watts, David

  Rooney, Terry

  White, Brian

  Ross, Ernie

  Whitehead, Dr Alan

  Roy, Frank

  Wicks, Malcolm

  Ruane, Chris

  Williams, Rt Hon Alan (Swansea W)

  Ruddock, Joan

  Russell, Ms Christine (Chester)

  Williams, Mrs Betty (Conwy)

  Ryan, Joan

  Wilson, Brian

  Sarwar, Mohammad

  Winnick, David

  Savidge, Malcolm

  Winterton, Ms Rosie (Doncaster C)

  Sawford, Phil

  Woodward, Shaun

  Sedgemore, Brian

  Woolas, Phil

  Shaw, Jonathan

  Worthington, Tony

  Sheerman, Barry

  Wright, Anthony D (Gt Yarmouth)

  Sheridan, Jim

  Wright, David (Telford)

  Short, Rt Hon Clare

  Wright, Tony (Cannock)

  Simon, Siôn

  Wyatt, Derek

  Simpson, Alan (Nottingham S)

  Singh, Marsha

  Tellers for the Ayes:

  Skinner, Dennis

  Mr. Tony McNulty and

  Smith, Rt Hon Andrew (Oxford E)

  Mr. Ian Pearson.

  NOES

  Barrett, John

  Price, Adam

  Beggs, Roy

  Reid, Alan (Argyll & Bute)

  Brooke, Mrs Annette L

  Robertson, Angus (Moray)

  Burnside David

  Robinson, Mrs Iris (Strangford)

  Calton, Mrs Patsy

  Robinson, Peter (Belfast E)

  Russell, Bob (Colchester)

  Carmichael, Alistair

  Salmond, Alex

  Dodds, Nigel

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

  Duncan, Peter (Galloway)

  Smyth, Rev Martin (Belfast S)

  Ewing, Annabelle

  Thurso, John

  Green, Matthew (Ludlow)

  Webb; Steve,

  Heath, David

  Weir, Michael

  Williams, Hywel (Caemarfon)

  Hermon, Lady

  Williams, Roger (Brecon)

  Llwyd, Elfyn

  Younger-Ross, Richard

  Marsden, Paul (Shrewsbury)

  Mawhinney, Rt Hon Sir Brian

  Tellers for the Noes:

  Öpik, Lembit

  Mr. Simon Thomas and

  Paisley, Rev Ian

  Pete Wishart.

  Question accordingly agreed to.

  64. AGGREGATES LEVY (AMENDMENTS TO PROVISIONS ABOUT CIVIL PENALTIES)
  Resolved,
  That—
  (1) In Schedule 6 to the Finance Act 2001—

  (a) in sub-paragraph (1) of paragraph 7—

  (i) the word "and" shall be inserted at the end of paragraph (a);

  (ii) paragraph (b) and the words from "equal to the amount" to the end shall be omitted;

  (b) after that sub-paragraph there shall be inserted—

  "(1A) The amount of the penalty shall be—

  (a) equal to the amount of the levy evaded, or (as the case may be) intended to be evaded, by the person's conduct if at the time of engaging in that conduct he was or was required to be registered;

  (b) equal to twice that amount if at that time the person neither was nor was required to be registered.";

  (c) in sub-paragraph (3) and (4) of paragraph 7, for "sub-paragraph (1)" there shall be substituted "sub-paragraph (1A)";

  (d) after paragraph 9 there shall be inserted—

  "Incorrect records etc evidencing claim for tax credit
  9A(1) This paragraph applies where—

  (a) a claim is made for a tax credit in such a case as is mentioned in—

  (i) section 30(1)(c) of this Act (aggregate used in a prescribed industrial or agricultural process), or

  (ii) section 30A of this Act (transitional tax credit in Northern Ireland);

  (b) a record or other document is provided to the Commissioners as evidence for the claim; and

  (c) the record or document is incorrect.

  (2) The person who provided the document to the Commissioners, and any person who provided it to anyone else with a view to its being used as evidence for a claim for a tax credit, shall be liable to a penalty.
  (3) The amount of the penalty shall be equal to 105 per cent of the difference between—

  (a) the amount of tax credit that would have been due on the claim if the record or document had been correct, and

  (b) the amount (if any) of tax credit actually due on the claim.

  (4) The providing of a record or other document shall not give rise to a penalty under this paragraph if the person who provided it satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for his having provided it.
  (5) Where by reason of providing a record or other document—

  (a) a person is convicted of an offence (whether under this Act or otherwise), or

  (b) a person is assessed to a penalty under paragraph 7 or 9 above,

  that person shall not by reason of the providing of the record or document be liable also to a penalty under this paragraph.".
  (2) This Resolution shall come into force on 1st May 2002.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  65. RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)
  Resolved,
  That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) that may arise from provisions designed in general to afford relief from taxation.

PROCEDURE (AMOUNTS DEDUCTED FROM PAYMENTS TO SUB-CONTRACTORS)
Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may include provision authorising sums deducted and paid to the Commissioners of Inland Revenue under section 559 of the Income and Corporation Taxes Act 1988 to be treated as paid in respect of, or on account of, liabilities of the sub-contractor other than liabilities in respect of income tax or corporation tax.

PROCEDURE (R&D TAX CREDITS)
Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision relating to R&D tax credits.

PROCEDURE (TAX CREDIT FOR VACCINE AND MEDICINE RESEARCH)
Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision for allowing tax credits to be paid to companies in respect of research and development expenditure relating to vaccines or medicines.

PROCEDURE (RECOVERY OF TAXES ETC DUE IN OTHER MEMBER STATES)
Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may include provision to give effect—

(a) to Council Directive 76/308/EEC, as amended by Council Directive 2001/44/EC (the "Mutual Assistance Recovery Directive");

(b) to any Commission Directive laying down detailed rules for implementing the Mutual Assistance Recovery Directive;

(c) to any future amendments of the Mutual Assistance Recovery Directive.

PROCEDURE (FUTURE TAXATION)
Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

(a) provision about income tax personal allowances for the year 2003–04;

(b) provision for corporation tax to be charged for the financial year 2003;

(c) provision amending section 158 of the Income and Corporation Taxes Act 1988;

304

(d) provision amending the Taxation of Chargeable Gains Act 1992 and section 72 of the Finance Act 1991 with respect to claims to set trading losses against chargeable gains;

(e) provision amending the Taxation a Chargeable Gains Act 1992 with respect to cases where chargeable gains are treated as accruing to a person under section 77 or 86 (read, where appropriate, with section 10A) of that Act;

(f) provision for gifts made on or after 6th April 2003 to be treated for the purposes of section 25 of the Finance Act 1990 as made in the year of assessment prior to that in which they are in fact made;

(g) provision about lorry road-user charge.

FINANCE [Money]
Queen's recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session relating to finance ("the Act"), it is expedient to authorise—

(a) the payment out of money provided by Parliament of sums payable by the Secretary of State by virtue of any provisions of the Act relating to vehicle excise and registration;

(b) any increase, attributable to any provisions of the Act relating to Schedule 20 to the Finance Act 2000, in the sums deducted from the gross revenues of the department of the Commissioners of Inland Revenue for the purpose of the payment of R&D tax credits;

(c) the deduction of sums from those gross revenues for the purpose of the payment of tax credits in respect of research and development expenditure relating to vaccines or medicines;

(d) the payment out of money provided by Parliament of any expenses of a relevant Minister within the meaning of section 6 of the European Communities Act 1972 resulting from any provisions of the Act relating to the recovery of amounts due in respect of agricultural levies of the European Community;

(e) the payment out of money provided by Parliament of sums required by a Minister of the Crown or government department for preparing for the introduction of lorry road-user charge;

(f) the payment out of the National Loans Fund with recourse to the Consolidated Fund of any expenses of the Treasury attributable to any provision of the Act relating to the administration of Government securities;

(g) any increase in the sums paid out of the National Loans Fund or the Consolidated Fund in accordance with section 16(9) of the National Loans Act 1968.

Bill ordered to be brought in upon the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Prescott, Mr. Secretary Blunkett, Mr. Secretary Darling, Mr. Secretary Byers, Mr. Secretary Milburn, Ms Secretary Hewitt, Mr. Andrew Smith, Dawn Primarolo, Ruth Kelly and Mr. Paul Boateng do prepare and bring it in.

FINANCE [Money]
  FINANCE BILL
  Mr. Paul Boateng accordingly presented a Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 125]

DEREGULATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 18(1)(a) (Consideration of draft deregulation orders),
That the draft Deregulation (Correction of Birth and Death Entries in Registers or Other Records) Order 2002, which was laid before this House on 11th March, be approved.—[Mr. Heppell.]
Question agreed to.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
DELEGATED LEGISLATION

  VETERINARY SURGEONS
  That the draft Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order 2002, which was laid before this House on 21st March, be approved.—[Mr. Heppell.]
  Question agreed to.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
DELEGATED LEGISLATION

  NORTHERN IRELAND
  That the draft Northern Ireland Criminal Injuries Compensation Scheme 2002, which was laid before this House on 10th April, be approved.—[Mr. Heppell.]
  Question agreed to.

ADJOURNMENT
Motion made, and Question put forthwith, pursuant to Standing Order No. 25 (Periodic adjournments),
That this House, at its rising on Thursday 2nd May, do adjourn till Tuesday 7th May.—[Mr. Heppell.]

Gulf War Illness
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heppell.]
11.18 pm
Mr. David Laws: I am grateful for the opportunity to raise the issue of Gulf war illness. I am grateful to the Minister of State for Defence for joining me at this late hour in place of his colleague, the Under-Secretary of State for Defence, the hon. Member for Kirkcaldy (Dr. Moonie), who has ministerial responsibility for veterans' affairs; I understand that the Under-Secretary cannot be with us this evening. I am also grateful for the presence of my hon. Friend the Member for North Cornwall (Mr. Tyler), who has had a sustained expertise and involvement in these matters.
The Minister of State will doubtless know from the correspondence that I have recently had with the Minister for veterans' affairs why I am raising Gulf war illness today. He will be aware that Petty Officer Nigel Thompson, a constituent of mine, died from motor neurone disease in January this year after a long period in which he played a leading role in the campaign to draw attention to Gulf war illness. He conducted a lengthy campaign for a full independent public inquiry to get to the bottom of an issue that has affected many people who served in the Gulf and could well affect service men in future if we do not deal with some of the underlying problems. After Nigel Thompson sadly died in January, I spoke to his widow, Sam Thompson, who lives in my Yeovil constituency. She confirmed that, despite the tragedy of her husband's death, she is keen to pursue the campaign that he helped to lead for many years to obtain a clear outcome and a full public independent inquiry to establish the facts.
I appreciate very much the role that the Government have played since 1997 in seeking to identify the causes of Gulf war illness, a condition now recognised by the Ministry of Defence, even though its causes are still unclear. Nevertheless, 11 years after the end of the Gulf war, we have failed to find answers to many of the key questions. I therefore want to use today's debate not only to press for a full inquiry but to put further pressure on the Government to advance their agenda of medical and other work to make sure that we get to the bottom of what happened in the Gulf in 1990 and 1991, which affected many thousands of our service men as well as many thousands of service men from the United States of America.
There are four main reasons why it is vital to get to the bottom of the matter. First, it is in the medical interest of individuals who served in the Gulf and are still alive. Secondly, we all want to know what happened in the Gulf, particularly friends and relatives of individuals who died as a consequence of a Gulf war illness of one kind or another. Thirdly, and most importantly, we need to ensure the safety of our armed forces who, as we speak, are being deployed in places such as Afghanistan, where they may come face to face with some of the possible causes of Gulf war illness, on the medical evidence for which we do not have clear agreement. Finally, although this is not my constituent's priority, many individuals who have experienced Gulf war illness remain concerned about

307
appropriate compensation for their medical problems. All those issues depend on a clear outcome to the investigation that has been going on for many years.
Mr. Roy Beggs: Does the hon. Gentleman agree that it is essential that there should be no suspicion whatever that there has been a cover-up for the delay in finding out the cause of Gulf war illness?
Mr. Laws: I agree entirely. Although I said earlier that the Government since 1997 appear to have pursued the problem energetically, there are certainly doubts not only about the length of time that they are taking to resolve it but about the performance of the Ministry of Defence, especially prior to 1997. Although I do not particularly want to rake over those matters, they are relevant to the continuing calls for a full independent public inquiry. I refer hon. Members to the report prepared by the Select Committee on Defence in April 2000, in which the Committee draws attention to its earlier report of 1995 into Gulf war syndrome. That previous report stated:
"In responding to allegations of a Gulf War Syndrome MoD has been quick to deny but slow to investigate… MoD's response has been reactive rather than proactive and characterised throughout by scepticism, defensiveness and general torpor."
That referred to the period prior to 1995.
In the Defence Committee's 1997 report, concern about the way in which the MOD was pursuing the matter was reinforced when the Committee stated:
"we do not feel that the Ministry of Defence has been dogged in pursuit of the facts."
In April 1999, even after the present Government came to power and pursued a more determined approach to the issue, the Minister for the Armed Forces told the Select Committee in evidence:
"I think there is a worry among the Gulf veterans that not very much is happening."
When we turn to the report that the Defence Committee prepared in April 2000 and read its recommendations and conclusions, we see on page 17 at paragraph 39 that the Committee concluded:
"Although the MoD may have acted correctly from the scientific viewpoint in this respect"—
in relation particularly to the evidence about depleted uranium—
"the way that it has dealt with veterans' concerns has not been impressive. The MoD took action on DU testing only when it became unavoidable. It failed to explain to veterans precisely what the tests organised by the MAP"—
that is, the medical assessment programme—
"involved and some veterans now believe that they have been misled."
There has, then, been concern for some time about the way in which the MOD has taken forward these matters. Although the situation has improved considerably since 1997, that has not taken away the basic argument for an independent public inquiry. There are a number of reasons why there should be an independent public inquiry. The first is that that is the only way of ensuring that the scrutiny of the matter is truly independent.
The second reason is so that we can be sure that there is the determination to see the matter through and to investigate every aspect of the work that has been done
308
and of the medical evidence, rather than relying on some of the medical evidence from a range of sources, including other countries. The independent public inquiry should be able to commission work of its own, pursue an agenda that should include a thorough examination of why Gulf war syndrome has occurred, and make recommendations to avoid such a problem in future, including dealing with some of the matters that the Select Committee discussed, such as improvements to medical records.
There are two reasons why confidence is crucial in this area and why the present approach must be questioned. First, there is the record in this regard, to which I have referred. I appreciate that much of that somewhat dubious record, including evidence given to the Select Committee prior to 1997 which proved not to be accurate, pre-dates the Government, but it has created in many people's minds, and in the minds of Gulf veterans, serious doubt whether the Ministry of Defence can be relied upon to take a sufficiently independent and proactive line in the case.
Eleven years have passed since the Gulf war and since people returned from it. Without being emotive, I remind all hon. Members that during that time many of those who were affected by Gulf war illness have died. That will inevitably lessen the momentum to resolve the matter, and we must not allow that to happen.
On the second issue, I speak with all due deference to the professionalism of staff who work at the Ministry of Defence, and I am fully aware that one issue that has given rise to concern about the cause of Gulf war illness is vaccination and inoculation against chemical weapons that might have been used by those whom we were fighting in the Gulf war. People will inevitably be sceptical of the MOD's ability to assess its own performance, in that the possible causes of Gulf war illness included not just the action that may have been taken by our enemies, but the actions that we may have taken through the use of munitions such as depleted uranium, our inoculation programme, particularly the multiple inoculations, and the use of organophosphates, about which I hope my hon. Friend the Member for North Cornwall (Mr. Tyler) will comment if he catches your eye, Mr. Deputy Speaker. When compensation would have to fall on a contingency reserve or directly on the MOD budget, there must be scepticism about whether that will influence the ability of the Department as a whole, even if not of Ministers, to see the matter through properly to an end. If the veterans have such a perception, that alone is a major reason to conduct a fully independent public inquiry now. The Government have yet to rule out such an inquiry. They say that they are waiting, but I do not believe that we can afford to wait much longer to resolve this matter.
I hope that the Minister will comment on the prospects for such an inquiry and respond to my points. I hope also that he can update us on the research that his Department is commissioning and backing on vaccines, organophosphates and depleted uranium. Perhaps he can tell us when we can expect those reports to be published and give us an interim update.
I am proud to have the opportunity to raise this important matter on behalf of a constituent who was himself particularly active in shedding light on it. I am determined, as many other hon. Members clearly are, to see it through to a conclusion in the interests not only of

309
those who served this country in the Gulf, but of all members of the armed forces who serve us now or will do so in future.
11.31 pm
Mr. Paul Tyler: I congratulate my hon. Friend the Member for Yeovil (Mr. Laws). I am grateful to him for allowing me briefly to contribute and to the Minister for consenting.
My interest is that I have been for many years a member of the Gulf war group organised by the Royal British Legion, which has taken the lead in trying to assist veterans in a very difficult situation. I do not wish to deal with the particular issues on which my hon. Friend concentrated, but I entirely endorse the general thrust of his remarks.
We sent service personnel to the Gulf in circumstances that turned out to be entirely unexpected from the point of view both of those individuals and of the Ministry of Defence. We do not know precisely why the illness that is the subject of the debate, which has been a matter of controversy over the years, has arisen. All we know is that it has done so, and that such work as has been undertaken in this country shows that it is not identical to the syndrome that has been found after previous hostilities. It is different in degree and character, and as chairman of the all-party group on organophosphates, I am especially concerned with the mysterious role of that type of pesticide and insecticide.
We are disappointed that the Minister's colleague, the Under-Secretary of State for Defence, cannot be with us, as he has taken a personal interest in this matter over the years before and since he became Minister for veterans' affairs. I have had various exchanges with him in the House and by correspondence.
The answers that the Ministry of Defence has been able to provide on the role that organophosphates may have had in this mystery have been inadequate. That inadequacy stretches back to the previous Government's term in office, when a Minister was misled—it was not his fault—into giving me an answer saying that OPs had not been used extensively in the Gulf. Subsequently, he had to apologise to the House and showed that they had been used extensively in UK forces. Significantly, OPs were not used by our French allies, who did not seem to have anything like the same problems after hostilities ceased.
Let me turn to my particular concern and the reason why I wanted to contribute. The United States Government are undertaking a very extensive research programme and congressional hearings are taking place in Washington. In addition, no less a personality than Ross Perot is funding a research programme into some of the specific aspects that I mentioned. That is occurring because that country is so concerned to see that justice is done by the service personnel who served it and us well.
Although my hon. Friend is right that more attention and care has been given to the subject since 1997, my concern is that our Ministry of Defence and Government seem not to be taking full account of the international research programme, which should be relevant to our inquiries. Hence the need for an independent public inquiry.
310
I ask that the Minister express to the Under-Secretary my continuing concern, shared by the Royal British Legion, that we have yet to take full advantage of international studies—particularly on the role of organophosphates—in this deplorable episode.
11.35 pm
The Minister of State for Defence (Mr. Adam Ingram): I am grateful to the hon. Member for Yeovil (Mr. Laws) for initiating tonight's debate on Gulf veterans' illnesses, and to the hon. Member for North Cornwall (Mr. Tyler) for his contribution. The hon. Member for East Antrim (Mr. Beggs) also deserves my gratitude, although I must confess to hesitation in remembering his constituency. That shows how quickly one's past life as a Northern Ireland Minister can be forgotten.
I apologise for the absence, due to illness, of my hon. Friend the Under-Secretary, who has direct responsibility for this subject within the Department. I shall ensure that any points of detail that are not answered in the debate will be dealt with by him on his return.
As the hon. Member for Yeovil has pointed out, this topic is of considerable interest to a wide community—primarily, of course, to those veterans of the 1990–91 Gulf conflict who are unfortunately ill. Let me make it clear from the outset that issues relating to Gulf veterans' illnesses remain a high priority for this Government. We have demonstrated our commitment to addressing Gulf veterans' concerns openly, honestly and seriously, and I can assure the House that we will continue to do so. I am grateful to the hon. Members for Yeovil and for North Cornwall for recognising that the matter is being dealt with in a substantially different way since this Government took office.
We accept that some of the 53,000-odd UK Gulf veterans have become ill, and that some have died. Many believe that such ill health and mortality is unusual, and is related to the Gulf conflict; indeed, that is the contention and core argument of the hon. Member for Yeovil. However, although there is evidence that Gulf veterans report more ill health than other comparable groups, no medical or scientific consensus exists as to why. Because of this unknown factor, important research continues. We are monitoring mortality and publishing the data every six months. Our most recent data—published on 31 December last year—showed that the total number of deaths among Gulf veterans was almost identical to that among a matched group of service personnel who were members of the armed forces on 1 January 1991 but who did not deploy to the Gulf.
It may be helpful if I set out how the Government are approaching this complex issue. We have adopted three principles to underpin our response to concerns about Gulf veterans' illnesses. First, all Gulf veterans will have prompt access to medical advice from the Ministry of Defence's Gulf veterans' medical assessment programme. Secondly, appropriate research will be undertaken into veterans' illnesses and factors that might have a bearing. Thirdly, the MOD will make available to the public any information that it possesses that is of potential relevance to this issue. I want to say a little more about those three topics before dealing with some of the specific points that were raised.
The Gulf veterans' medical assessment programme has been running since 1993. Since then, it has been subject to audit by the Royal College of Physicians and the King's

311
Fund health quality service. In addition, the Royal College of Pathologists has provided advice on the range of clinical investigations undertaken. Since 1993, more than 3,300 patients have been seen by physicians participating in the programme, and the annual underlying trend in referrals is declining. I am pleased to say that an analysis of satisfaction questionnaires showed that 96 per cent. of patients who responded were satisfied with their consultation. The physicians at the Gulf veterans' medical assessment programme, who have complete clinical independence from the MOD, find that about 80 per cent. of those they see are well. Of the 20 per cent. who are unwell, about 85 per cent. are found to have psychiatric disorders. That shows the importance of the psychiatric referral network that has been established. I should like to take this opportunity to encourage all Gulf veterans who are worried about their health to seek a referral to the Gulf veterans' medical assessment programme through their doctors.
I know that the hon. Member for Yeovil and other hon. Members who have involved themselves in this subject accept that scientific and medical research is vital to the issue of Gulf veterans' illnesses, as that is the only way we will find out why some veterans are ill. So far, the Ministry of Defence has spent approximately £6.7 million on studies in this field, and another £1.8 million will be required to complete the current programme of work. That level of expenditure underlines our commitment to scientific research.
The results from one important research study commissioned by the Ministry of Defence through the Medical Research Council were published last year. The study was based on self-reporting, which can be unreliable, but the team from the university of Manchester found a link between skin and muscle problems and the number of vaccinations given to Gulf veterans. However, the study team found no reason to explain such a link between vaccinations and these problems. Further work is currently under way in this area. The MOD's vaccines interactions research programme is studying whether the combination of vaccines used to protect personnel during the Gulf conflict can give rise to adverse health effects. That important research will be completed by the end of 2003. However, we hope that further interim results will be made public later this year.
Another Government-funded study, at the London School of Hygiene and Tropical Medicine, is examining the reproductive health of Gulf veterans and their partners and the health of their children. Results from the study are expected to be published this year.
Lady Hermon: I appreciate the Minister giving way, and the patience of other Members at this late hour. Given the uncertainty about the immunisation programme for the soldiers who fought in the Gulf campaign, what lessons have been learned and implemented for troops who have recently been sent to Afghanistan?
Mr. Ingram: I am sure that the hon. Lady will appreciate that my hon. Friend the Minister for veterans affairs has a detailed knowledge of this issue, so I shall ensure that she is given a full response in writing to that
312
question. Lessons are always learned, but rather than me trying to explain the specific lessons, it would be better if she were given that information in more detail.
The provision of information and dialogue is the third principle of our approach. Last year, my Department sent an updated information pack about Gulf veterans' illnesses to all GPs in the United Kingdom as well as to other interested health professionals, including those in the defence medical services. More than 48,000 copies have now been despatched.
The MOD's internet website is frequently updated, and is an increasingly valuable way of making information public 24 hours a day, 365 days a year, worldwide. Gulf Update, the newsletter produced by the MOD's Gulf veterans' illnesses unit, is published every six months and sent to several hundred veterans, to Members of both Houses and to other interested parties. The next issue will be published in the summer.
Veterans and others continue to contact the MOD via our freephone helplines and to receive appropriate assistance. In addition, my Department deals with a considerable amount of correspondence from veterans and their representatives.
As the hon. Member for Yeovil said, the whole issue is scrutinised by Parliament, both here and in the other place. Less than a year ago, my hon. Friend the Minister for veterans' affairs gave evidence on Gulf veterans' illnesses and on depleted uranium to the House of Commons Select Committee on Defence, from which the hon. Gentleman quoted.
I should like to deal with some of the particular points raised during the debate. The Government's position on a public inquiry into Gulf veterans' illnesses issues is clear. A public inquiry could not help to answer the question why some Gulf veterans are ill; only continuing scientific and medical research can do that. Furthermore, the Government's record is already subject to close public scrutiny and we believe that our current policy, our track record on delivering what we have promised and our continued openness allow for a proper assessment of what is being done. I have set out at length the three principles underlying that.
Mr. Laws: Does the Minister understand that a public inquiry would fully restore veterans' confidence that the matter is being considered independently and speedily? The Gulf war took place 11 years ago. I recently received a letter dated 8 April from the Minister for veterans' affairs, which says:
"the Prime Minister does not believe that an independent public inquiry is appropriate at this time."
Is the Minister's reading of that comment that an independent public inquiry is still possible at some time?
Mr. Ingram: On the hon. Gentleman's point about satisfying people's concerns, we have sought to address the issue in a range of ways, which should, I hope, convince reasonable-minded people that we are operating independently and that an assessment is taking place. All the medical research is independent of the MOD, although we may commission it. It is carried out rigorously and independently.
We do not interfere with the conclusions, and the research is all subject to peer review, which is why there is sometimes such a delay in publishing findings. Those

313
are correctly subject to peer review, because that provides rigorous examination. I hope that those who take a close interest in the matter take back the message that an extensive research programme has been undertaken. All of it is independent, but certainly funded by the MOD—that is, by the public purse.
On the letter that the hon. Gentleman received and the view of the Prime Minister and the Government, of course we would never write off that possible eventuality, but I have pointed out that the best way to deal with the matter is to get to the core problem.
Mr. Laws rose—
Mr. Ingram: No, no, hold on. The research gives us the base knowledge for that. It is finding the answer to the problems, because it is easy to set running the hare that there is some great conspiracy or some great secrecy here. I have set out the principles for our approach, which
314
is open, extensive and discursive. Our approach is to consider what more could be brought to the debate in terms of what we are doing.
Mr. Laws: I am grateful to the Minister for giving way on that point. I note that he does not rule out completely an independent public inquiry, but, given his background comments, in what circumstances would it be appropriate to hold such an inquiry into the matter?
Mr. Ingram: If circumstances were to change, a public inquiry may become the appropriate mechanism. The hon. Gentleman asks me to look into the future and make a prediction, but he has not given any example to support his argument that a public inquiry is desirable because concerns exist—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twelve minutes to Twelve midnight

Preamble
[SIR ALAN HASELHURST in the Chair]

Public Appointments
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Sutcliffe.]
9.30 am
Tony Cunningham: I am delighted to have this opportunity to share some of my concerns about appointments to public bodies. I am particularly concerned about the enormous power given to many members of public bodies, some of whom have responsibility for huge sums of money. Public bodies play an important role in helping to shape and develop Government policy. More than 1,000 non-departmental public bodies influence the expenditure of a total budget of about £23 billion a year—as I said, it is a huge sum. In addition, there are approximately 500 national health service trust and health authority boards.
Those appointed bodies, often referred to as quangos, have a considerable influence over public life. In that respect, I have no doubt that public bodies are a force for good—a force for progress and social improvement that is to be wholeheartedly welcomed. Indeed, because those bodies have the potential to be at the heart of delivering the programme of social justice to which the Government are committed, I would like to see more effort being made to encourage fair practice within them.
Thousands of people participate in public life through service to schools, colleges, NHS trusts, magistrates courts and tribunals. According to a Cabinet Office paper on the subject,
"Public involvement provides accountability, brings a wealth of skills and experience into the running of Public Bodies and supports democracy by allowing 'ordinary' people"—
I do not like that term—
"to play an important and constructive role in the process of local and national government".
According to a paper on frequently asked questions published by the public appointments unit, appointments are made to public bodies using fair selection procedures in accordance with the relevant codes of practice. However, although such quangos have well-intentioned objectives, I am worried that those aims are not effectively realised.
In the mid-1990s, under the auspices of Lord Nolan, the Committee on Standards in Public Life established seven general principles that should govern public life. I am sure that we all agree on those principles. They are selflessness, integrity, objectivity, accountability, openness, honesty and leadership. It will come as little surprise to hon. Members that such principles are reflected in the remit of many public bodies. However, the extent of openness of those organisations, and by extension their transparency, is questionable.
I stress that I do not believe that some sort of cynical operation is occurring beneath the purported policy of attempting to widen participation in public life. On the
2WH
contrary, the Government are genuinely committed to recruiting people who more accurately reflect the society in which we live. They are actively attempting to recruit more women and ethnic minorities to public positions. I shall return to that theme later, but it sufficiently highlights the fact that any suggestion that jobs in public bodies are solely for the great and the good would be an exaggeration. I would like to think that society has moved on from that.
Mr. Simon Burns: Could the hon. Gentleman say which of the people's peers is not one of the great and the good?
Tony Cunningham: If the hon. Gentleman wants to debate the House of Lords, I am sure that time can be found. He need only catch your eye, Mr. Deputy Speaker.
I wish to highlight the fact that although we have moved on from bodies being simply for the great and the good, a series of structural constraints on the process of appointment make it difficult to counter some of the problems that I am about to raise. Public bodies carry out some of the most important and prominent tasks in public life, but their members, unlike parliamentarians and councillors, are not elected, and the processes by which they are selected are neither well known nor well understood. A recent MORI poll stated:
"The majority of the public know very little of the ministerial public appointments process",
but I would argue that the vast, vast majority know very little about it.
The Nolan rules recommend that organisations use as many methods as possible to find suitable candidates for jobs in public service. The rationale behind that is surely to allow as wide a range of people as possible to apply. It is impossible to get precise empirical data to support the claim that I am about to make, but I am sure that colleagues will agree that we, as representatives of our constituents, are suitably placed to assess the extent to which they feel that they have adequate access to information about public and civic life. I am sure that so-called ordinary people in my constituency are not aware of the vacancies that arise in public bodies to anywhere near the extent that the Government would like. We might think that advertising on the internet would increase the number of people who apply for vacancies, but people in parts of my constituency have little or no access to the internet, so it does not often affect them.
The next issue is perhaps more parochial, but it is still of great importance. I am far from convinced that people in Cumbria—it is nice to see the hon. Member for Westmorland and Lonsdale (Mr. Collins) in the Chamber—and particularly in west Cumbria, which I represent, have a fair opportunity to get involved in public bodies. The Committee of the Regions was set up because
"about three quarters of EU legislation is implemented at local or regional level, so it makes sense for local and regional representatives to have a say in the development of new EU laws."
I am not sure whether the hon. Gentleman knows who our nearest Committee Members are, but they are probably some distance away—in Lancaster or

3WH
somewhere in the north-east. Cumbria has no representative on the Committee—indeed, it has never had one.
The regional development agency is a key regional player in my constituency, and indeed throughout Cumbria. Let me quote from its website to demonstrate just how important it is. The RDA
"co-ordinates economic development, regeneration, skills development, strategic sites, business relocation and inward investment in North West England".
West Cumbria and Furness have been identified as its top priorities, along with east Manchester and Liverpool, yet it has no west Cumbrian representative. If west Cumbria and Furness are such a high priority, we should have a representative.
The Government remain committed to increasing the range and diversity of all their public appointments. They are committed to ensuring that there is an equal proportion of men and women and a pro rata number of people from ethnic minority backgrounds. They are also attempting to increase public appointments of people with disabilities, and I am sure that we all share those sentiments. Since 1992, the proportion of women in non-departmental public bodies has risen by about 8 per cent. The proportion of people from ethnic minorities who hold a public appointment more than doubled over the same period, but the figure remains low. Indeed, according to The Sunday Times,
"the average quango member still fits the white, male, middle-aged stereotype".
About three quarters of appointees are aged between 46 and pensionable age, with fewer than 3 per cent. under 35. Women make up only 38 per cent. of public appointees and—I am sure that hon. Members will be interested in the next statistic—only 3 per cent. of those who earn £50,000 or more. That is interesting, is it not? Some 8.5 per cent. of appointees come from ethnic minorities, and just 2.4 per cent. are disabled. A huge amount of work remains to be done.
However, while gender and ethnicity are at least considered, regional discrepancies are not. Perhaps that is an important factor in explaining the relative disadvantages faced by the regions, and particularly the north of England. The Government are committed to promoting equality of opportunity in all walks of life, and discrimination by gender, ethnic background and age are unacceptable. I contend that discrimination by geographical location is equally intolerable. It is difficult to establish precisely the proportion of people in Workington holding a public appointment, because— strangely—figures published by the Cabinet Office are not broken down geographically. It does not report on quangos in Cumbria and tends to refer to "offices throughout England and Wales". That flaw must be addressed. Many of my constituents would be tremendously interested to know how many appointees to public bodies are residents of the 88 local authorities with the most deprived neighbourhoods. If we are serious about social inclusion, such people must be better represented on public bodies.
The final issue that I would like to draw to hon. Members' attention is the training and managerial acumen of people appointed to public bodies. If people
4WH
from various backgrounds are to be appointed to public bodies and retained, we must ensure that they are properly trained. People appointed to important bodies with huge budgets, such as health authorities and primary care trusts, need excellent managerial and communications skills, and we must provide them with the skills and know-how to do their jobs properly. Without such skills, they will surely not perform at the level that we expect of them. Their ability to do their jobs well will have an enormous impact on their local communities. It is essential to invest in proper and effective training—sustained over time—so that they remain fully equipped to carry out their work.
My intention has been to provide a constructive platform on which future public appointments can be made. The Government should feel no shame at the advances that they have made in actively encouraging more women and members of ethnic minorities to engage in all areas of public life. The Minister has expressed the Government's desire for a wider representation of people regardless of age, disability, gender, ethnicity, geographic or socio-economic background. There is no such diversity of representation at the moment. I hope that highlighting some areas of concern will lead to a genuine, informed debate about how we can widen participation in public life. I am sure that other hon. Members have much to add and would like to raise other concerns. I look forward to hearing from them.
9.43 am
Mr. Simon Burns: I congratulate the hon. Member for Workington (Tony Cunningham) on having secured this important debate. The Government have built up a justifiable reputation for seeking to control every nook and cranny of our lives. One hears examples of the way in which they seek to control their Back Benchers so that many are reduced to clones who, if one is to believe the hon. Member for Hayes and Harlington (John McDonnell), are induced not to spill the beans about what the Government, through Millbank and No. 10, try to do.
The hon. Member for Workington has given us an excellent opportunity to debate the question of public appointments that affect our lives. I shall start by considering the areas on which I could not agree more with him—and, I suspect, with the Minister. We need the best individuals from all walks of life and from all backgrounds—whether ethnic or gender backgrounds—to contribute to the vast array of public bodies in this country that rely on the selfless duty and commitment of those who want to serve. However, on considering the areas in which such individuals are needed, one discovers that all is not well with regard to appointments.
The national health service, for example, is a crucial area, especially in the light of the problems that we have all faced with it over the past few years. As the hon. Member for Workington said, there are 373 chairmen of NHS trusts and slightly more than 1,800 non-executive directors. Until 1 April, the health authorities that were created in 1999 will remain in place, with 520 non-executive directors. Those were all public appointments, made before 2 July last year through a process that eventually depended on Ministers. In addition, from 1 April the strategic health authorities will come into

5WH
being, which will have non-executive directors. There will also be those that remain of the primary care groups, and a significant number of primary care trusts that have come into existence over the past few months.
All those bodies require a significant number of appointments. Because of the numbers, a significant temptation or potential for patronage is vested in the power of Ministers. That is a worrying fact, and the remedy that Ministers have sought to apply to the health service in the form of the Appointments Commission has not rectified the problem but accentuated it.
The Minister can be a bruiser on occasions, and will no doubt make the point that when the Government were in opposition they made the accusation that the health service was stuffed with Conservative placemen. Before he gets too excited about that statement, I should state that the reality was very different, but if one spins a yarn often enough it takes root, regardless of its accuracy. Figures given by the Government in written answers have proved the fallacy of that statement. Of those appointed to NHS bodies who declared a political activity in the last full year of the last Conservative Government, 8.2 per cent. were Labour supporters and 7.2 per cent. were Conservative supporters, with the Liberal Democrats left drifting further down the scale. The Minister could argue that that shows the failure of the Conservative Government. His Government have not made the same mistake, because they are systematically packing the bodies with Labour placemen.
I make my case about the health service through information given in written answers and the Government's own statistics. When Dame Rennie Fritchie became Appointments Commissioner in March or April 1999, she received so many criticisms and complaints about the appointments process that she carried out an investigation. Her report makes interesting reading. She says that in the 1998 appointments round in the north-west national health service region, 70 per cent. of the 109 candidates declared political activity on behalf of the Labour party. She also cites the example of a former Conservative Minister—
Helen Jones: The hon. Gentleman has given us the figures for candidates, not for appointments. Would he like to give us the figures for appointments?
Mr. Burns: Yes, I certainly will. If the hon. Lady is kind enough to let me develop my argument, I will give her the figures that she requires, in buckets—
Helen Jones: For the north-west.
Mr. Burns: No, the overall figures, because what matters is what is happening throughout the country.
It transpired from the report that a former Conservative Minister had acted as referee for someone who was seeking a position in an NHS body. The candidate's politics were unknown to the referee, but the individual was known in the local area in which the position was sought and was well qualified as a result of experience gained in professional life. Time and time again, that individual was turned down for a position,
6WH
and the former Minister reached the conclusion that it would be better if he did not act as referee, because it seemed to be harming the candidate's prospects. I confess that, long ago, I gave up agreeing to act as referee for anyone seeking an appointment—usually in the NHS in Essex—because I decided that, notwithstanding my judgment and experience, giving my support to any suitable candidate would be the kiss of death for them. I thought that it was actually kinder not to agree to act as referee because to do so would be counter-productive.
Furthermore, more and more of those who are being placed on NHS trusts and the old health authorities—I suspect that nothing has changed with the introduction of new strategic health authorities and primary care trusts—have declared affiliations to, or act on behalf of, the Labour party. I am not suggesting that simply being associated with politics, be it Labour, Conservative, Liberal Democrat or any other sort of politics, should be a barrier to a public appointment—of course it should not. Just because one engages in political activity does not mean that one does not have a great deal to contribute, outside that sphere, to a public body.
Mr. Kevan Jones: Does the hon. Gentleman agree that most of those people, whether they are Conservative, Labour or Liberal party members, are also active in voluntary and political organisations in their local communities, so they are exactly the people who should be appointed to NHS trusts, for example? It is not that the current situation is anti-Conservative or anti-Liberal Democrat: the establishment is anti-anyone who has any political affiliation.
Mr. Burns: No, I am afraid I do not agree with the hon. Gentleman. Of course, many people who are politically active are also active in their communities, but as a Member of Parliament, visiting charitable organisations and local businesses in one's constituency, one encounters many people whose political activities are probably zero—certainly unknown—and who contribute in their different ways to the local community. However, the figures show that about a third of those who are appointed have a declared political affiliation, and of those a significant number—far more significant than the Liberal Democrat and Conservative appointees added together—happen to be Labour activists.
Before anyone accuses me of fiddling the figures, let me tell hon. Members that these figures were provided by Department of Health Ministers during the past year or so. Between 2 May 1997 and 31 March 2001, successive Secretaries of State at the Department of Health appointed 5,543 individuals to trusts, PCTs and health authorities. Of those who declared a political interest, 5.2 per cent were Conservatives, 3.9 per cent. were Liberal Democrats and a staggering 25.1 per cent. were Labour activists. Between 1 April and 2 July 2001—I use that time scale because on 2 July the Secretary of State ceased to have a role in the appointments, as the Appointments Commission came into force—4.5 per cent. of appointees were Conservatives, 2.9 per cent. were Liberal Democrats and 25.2 per cent. were Labour activists.

7WH
Once the Appointments Commission was established and had started its work on 2 July, one would have assumed, from the rhetoric—bearing it in mind that the members are appointed by the Secretary of State for Health—that the situation would have been different. Ministers would argue that the purpose of the commission is that it should be independent and not influenced—as Ministers might be—in its appointments. However, extraordinarily, the situation has not improved. Between 2 July 2001 and 10 January 2002, 4.9 per cent. of appointees were Conservatives, 5.4 per cent. were Liberal Democrats and 23.5 per cent. were Labour activists.
If one considers the figures for all the work that the commission has done up to the latest time for which figures are available, which happens to be 4 April 2002, the situation is even worse. Some 4.5 per cent. of appointees were Conservatives and 4.4 per cent. were Liberal Democrats, but the proportion of Labour appointees increased from 23.5 per cent. to 26.5 per cent. Sadly, there is something rotten in the system, whether under the new Appointments Commission system or the old system of Ministers giving final approval to appointees. A disproportionate number of those declaring a political affiliation are from the governing party.
I can come to only one conclusion, given the record and the history of this Government. In the press and information units of the Departments, where we used to have a totally non-political civil service, there is increasing politicisation, as the unfortunate ongoing saga at the Department of Transport, Local Government and the Regions has shown. Mr. Alastair Campbell at No. 10 Downing street has control of information officers and the flow of information across the board. The media are manipulated with good news stories and through what used to be—the spin doctors are losing their touch—the highly skilled practice of burying bad news. One comes to the conclusion that the Government are continuing the politicisation of our society through the appointment of people to public bodies.
It does no service to public bodies or the local community for those bodies to be stuffed with Labour party political hacks. Some are being rewarded for an undue length of time in local government or for retirement from this House. Some who fail to get elected to the House or a local authority are given such jobs as a recompense both financially and to massage their egos.
Mr. A. J. Beith: Is the hon. Gentleman contending that the Appointments Commission is acting improperly, or is he saying that we have a high proportion of Labour activist applicants and that that may reflect a wide public assumption that a person will not be appointed to a position unless he or she is a supporter of the Labour party?
Mr. Burns: I am certainly not accusing the Appointments Commission of wrongdoing, but I believe that it has failed to meet the aims for which it was ostensibly set up. I am also arguing that if a person happens to be a Labour party activist, the system is slanted to benefit such an applicant in appointment to the jobs that he or she seeks.
8WH
The statistics show that in recent years there has been a dramatic increase in people with a declared political affiliation being placed on a public body, and an exorbitant increase in those with a political affiliation on a body being supporters of the ruling party. The system is becoming more and more tainted, so we should seek a return to a system in which the person with the best qualifications is appointed, rather than one in which a person is favoured because they happen to support a political party. I am not confident that we will see that during this Government's lifetime, but that does not mean that we should not hold the Government to account over what they are doing about what is, in effect, a distorting and a stuffing of our public bodies with political appointees
10.1 am
Mr. Keith Vaz: I congratulate my hon. Friend the hon. Member for Workington (Tony Cunningham) on securing the debate. He spoke so eloquently, and touched on so many subjects, that I have little to add. However, as he looked in my direction when he spoke about the lack of black and Asian representation on public bodies, I thought that I would make a small contribution.
The subject has greater urgency following the events in France on Monday. The far right was successful in France because it portrayed the immigrant community there as spongers, rather than contributors. In Britain, we can learn the lessons of France and ensure that the black and Asian community plays a leading role in the way in which society operates.
We have an impressive and talented ethnic minority group in Britain. It is settled here and is now in its second generation. Young black and Asian men and women make a great contribution to our public services, but sadly their contribution to public bodies has not been of the order that some of us would like. In 1997, I published a report entitled "The Glass Ceiling", and in its opening I quoted the Prime Minister's speech in Brighton on 30 September 1997 when he said that we cannot be a beacon to the world unless we allow the talents of all our people to shine through. That was a commitment from the highest level that the Government would be different, and that they would ensure that black and Asian people were properly represented, not just in the civil service, but on public bodies.
I am pleased to say that progress has been made. I congratulate the various Departments, which have, during the past five years, attempted to ensure that black and Asian people are appointed to public bodies. However, one should consider the appointments that were made up to 1997 in three Departments. In the Ministry of Agriculture, Fisheries and Food, there were 225 appointees, none of whom were of Asian origin; in the Department of Environment, Transport and the Regions, there were three out of 134; even in the Home Office, there were only 16 out of 332. At that stage, the Department of Health would not release its figures. I am glad to say that the present Secretary of State for Health has not only ensured that the names of ethnic minority people are published, but that a register is now produced each year setting out how many have been appointed. In the overall figures, of the 2,005 appointments made in 1997, only 35 were of people of Asian origin. I hope that when the Minister replies, he can give us the up-to-date figures.

9WH
I know that the hon. Member for West Chelmsford (Mr. Burns) thinks that people like me are just clones of the Minister because we Back Benchers are fairly well controlled, but it is actually much easier to ask the Government to produce the figures than to request the information through parliamentary questions. Judging by the amount of money that the hon. Member for Buckingham (Mr. Bercow) has spent—more than £500,000 I think—it is probably cheaper too. Politicians, from the Prime Minister downwards, are committed to ensuring that such appointments are made.
I pay tribute to the work of Sir Richard Wilson, the Cabinet Secretary. When appointed, he made sure that issues of race and diversity were very much a part of his term in that post. He has just managed to appoint the first Asian permanent secretary before leaving office, which he will in July this year. I very much hope that when Sir Andrew Turnbull, the new Cabinet Secretary, takes over, he continues the excellent work of Sir Richard Wilson.
When I published my survey, I found that one of the most interesting facets of the whole debate on public appointments was the lack of understanding of how they were made, to which my hon. Friend the Member for Workington also referred. That is especially important in the black and Asian communities. When I wrote seeking information before the publication of the report, I discovered that some people on the public appointments register had died. Because that register, from which the pool of talent is drawn, was not regularly updated, there was a risk that the information held on it was very old. I notice that the Government now advertise for those posts. Obviously, that means that information is current, but can the Minister tell us whether the problems encountered in the past over the way in which the civil service gather information have diminished? That would be one way of ensuring that we can modernise the system.
We could also ensure that the appointments are not only published in the mainstream press. My hon. Friend the Member for Workington quoted The Sunday Times. We see public appointments advertised in such newspapers, but if we want more black and Asian people to sit on public bodies, we should advertise in the ethnic minority press and on ethnic minority television and radio. We should seek nominations from a wider range of people. The hon. Member for West Chelmsford said that he does not recommend people. Such matters are difficult because, as hon. Members know, people come to us and ask for our support. It is important for them to realise that they do not need the support of politicians to be considered. That would be the best way of getting really talented people to serve on the committees.
We are coming to an era in which people have a career in quangocracy—they do not just sit on one body, but are appointed to others. That is grossly unfair. We want to ensure that the most talented people come forward for what are not full-time appointments. In some of the posts people are paid, but they always, inevitably, spend more time on them than that for which the remuneration, which is pretty low overall, provides. We should introduce a rule that prevents people from serving on more of those bodies. Unless they have retired, I do not see how people have the time to serve
10WH
on several. Such a rule would enable more women and people from ethnic minority communities to be appointed, and would project a much better image.
We have a great deal of work to do, but the enormous power of appointment is very important. In the debate on race and citizenship, the need for more black and Asian people to be elected to Parliament and appointed to the House of Lords is discussed, but elections come only once every five years and can only get us so far, although people can stand for local government and be elected as councillors. The Minister's power, and that of the Cabinet Office and other Ministers, is absolutely enormous as far as public bodies are concerned.
We can change the shape and face of Britain by making our public appointments reflect the whole of society. The shadow of Le Pen is, of course, now over Britain, and we should take the leadership role about which the Prime Minister spoke in September 1997. We have the largest settled black and Asian population of any country in Europe. Many black and Asian people who live in Germany and France do not even have the right to vote. We have a huge contribution to make to the European debate. Let us start by giving the black and Asian population the chance to contribute and to serve, and make them truly a part of our multicultural society.
10.10 am
Helen Jones: I, too, congratulate my hon. Friend the Member for Workington (Tony Cunningham) on securing the debate, and on the lucid way in which he set out some of the difficulties in the public appointments process.
I want to concentrate on another aspect of the matter. Although I recognise the progress that the Government have made in appointing more women and people from ethnic minorities, I particularly want to consider the situation of our more deprived communities. We are all, of course, primarily interested in our constituencies, and constituencies such as mine can show a great deal about how deprived communities are treated. There are few people from deprived communities, and indeed from certain areas of the country, serving on our public bodies. That issue ought seriously to concern us if we really want to create a civic society in which all kinds of people participate in decision making.
I have asked a number of questions about what has happened in my constituency. It is fair to say that some areas have made better progress than others. Progress has been made in appointing more people from my constituency to the magistracy, for example, but the raw figures hide a more serious problem because people from the most deprived communities do not sit on the bench. Bewsey, the most deprived area in my constituency, has no magistrates. Orford, which is the centre of my constituency and covers several wards, has only four magistrates. Things such as that pose a serious problem. Those communities are not represented, yet seven magistrates from outside Warrington sit on the bench. The people who have most experience of crime and antisocial behaviour do not, for whatever reason, have an input into the process of administering the law, which makes us all poorer.
Contrary to what the hon. Member for West Chelmsford (Mr. Burns) said, the real problem facing my constituency is health authority appointments. I

11WH
represent most of the health-deprived areas in Warrington, yet my constituency has consistently been under-represented on health authorities and trusts. In fact, one of the early meetings that I had in the last Parliament was with the then chair of the north-west region to raise that issue. I was promised that there would be an active programme to encourage people to apply; to provide training; and actively to seek applicants from all sections of the community. Then we got the spanking new Appointments Commission, and I am sorry to say that the situation did not get better.
In the past, my constituency had one person on the North Cheshire health authority and one person serving on the Warrington hospital trust. There were six members, four of whom were from Warrington, South and two of whom were from Warrington, North, on the old Warrington community health care trust, which has now ceased to be. Under the new Appointments Commission, we have one member on the new strategic health authority and one member on the hospital trust, which now covers both Warrington and Halton because the hospitals have merged. I have to say to the hon. Member for West Chelmsford that, contrary to the argument that he was making, in an area that is overwhelmingly Labour, there is only one person with a declared Labour affiliation on that trust. We have one member on the new Five Boroughs mental health trust.
It is, however, appointments to the primary care trust about which I am most concerned. They highlight the problem because the primary care trust serves the Warrington borough—the two constituencies. There are five non-executive appointments plus the chairman. Of those six people, only one comes from Warrington, North. The other five come from three wards in Warrington: two from Stockton Heath, one from Lymm and two from Appleton. Statistically, that seems a very unlikely result.
There are 24 wards in the Warrington borough, and I find it odd that three of those wards—including one of the small wards, Stockton Heath—throw up so many members of the PCT. I have to ask why. It is not geographical balance. When I raised that with the appointments commissioner for the north-west, he was rather unhelpful. I am sorry to say that I would rate him as the most smug and self-satisfied public official whom I have ever encountered in my years as a councillor or a Member of Parliament. He told me that the commission appointed the best people. I cannot believe that all the best people come from such a small geographical area.
We have to ask whether there is a flaw in the appointments system. I think that there is. I know of applicants whose applications were not acknowledged. I know that when the interviews took place, the interviewees were asked very technical questions. One of the interviewees, being a fairly lively lady, asked the chair of the PCT—who had been appointed by then— what he was looking for. She was told that he was looking for someone with financial or medical expertise. That is not the job of non-executive members. It is the job of the professional executive committee.
I have to say to the Minister that there is no equal opportunities process. People from deprived communities are not encouraged to apply. The commissioner told me that he was not a politician, and
12WH
that he did not know where the boundaries were. That is, to say the least, somewhat disingenuous, since he was a parliamentary candidate in the 1970s, and I understand—although I have not been able to confirm this—that he lived in Lymm. Although he may not know where the boundary lies in the centre of Warrington, he certainly knows that Lymm, Stockton Heath and Appleton are nowhere near the deprived areas of Warrington, North.
The guidance says nothing about parliamentary constituencies, but I remind the Minister of the answer given to me by the Parliamentary Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears):
"The National Health Service Appointments Commission aims at ensuring that board membership reflects the geographical areas served by the bodies concerned."
It does not in my area. She also said that
"it is crucial that a proper cross-section of the public serves on boards."—[Official Report, 22 January 2002; Vol. 378, c. 741–42.]
That is not happening.
The same situation can be seen in national bodies. I asked Departments several questions about how many people from my constituency had been appointed to non-departmental public bodies. Most of the answers were notable for their brevity. The answer was "None" for the Department for Work and Pensions, the Department for Transport, Local Government and the Regions, the Department for Culture, Media and Sport or the Department for Environment, Food and Rural Affairs. The Department of Trade and Industry did better in one respect, in that it managed to appoint one person from Warrington, North to the employment appeals tribunal—an event for which we were tempted to put out the flags. However, when I asked the DTI and the Home Office about other appointments, I received the usual answer that we all expect, about the information being "not held centrally". That raises some interesting questions.
How can we possibly monitor the make-up of national bodies if we do not hold the information? What information is put before a Minister when making an appointment? How do we manage to write to people to tell them of their appointments if we do not know where they live? Does that make a difference? I think that it does. If we are interested in promoting a civic society, and we want to involve people in decisions about how society moves forward, we must ensure that a cross-section of the community is involved and that areas are not excluded from the process.
The Government are committed to ending social exclusion, but they can do that properly only if people from the communities are involved in the delivery of the services. If we do not involve them, we lose a lot of experience and expertise. The people who live in our poorer communities know most about tackling poverty. Those who suffer most from crime and antisocial behaviour can tell us the most about what affects their lives and their neighbours' lives. Those who live in health-deprived communities can tell us why people do not access services. For example, there is no point designing health services that people in the communities cannot access because there is no public transport, or lecturing people about healthy diets if they do not have access to cheap fruit and vegetables. We need their

13WH
expertise if we are to make real progress, and we ought to have learned the lessons of the past: trying to regenerate communities from the outside does not work. People from the inside must be involved if we are to design good services.
Nationally, there must be proper monitoring to ensure that appointments to non-departmental public bodies reflect the regional diversity of the country. It may come as a surprise to some officials in Whitehall that not everyone with brains lives in London. In fact, those of us from the north argue that people with brains opt for a better lifestyle outside London. In addition to the existing criteria for appointments to public bodies, regional diversity should be encouraged.
I suggest that the Minister talk to his colleagues in the Department of Health about the criteria of the NHS Appointments Commission. Locally, it should be required actively to seek out, encourage, train and support people from under-represented sections of the community. If the PCT in my area does not have confidence in my constituents, why should my constituents have confidence in it? That is the key. I want my constituents to get a fair deal in representation on other bodies. At present, they and many people in similar communities do not, and that must be addressed if we are serious about encouraging participation in public life.
Miss Anne Begg (in the Chair): I remind hon. Members that the summing-up speeches must begin at 10.30.
10.22 am
Mr. Kevan Jones: I add my congratulations to my hon. Friend the Member for Workington (Tony Cunningham) on initiating the debate. I want to concentrate on appointments to health bodies and to draw attention to my concerns about the way in which the NHS Appointments Commission operates in Durham.
As has already been said, the commission was set up following Dame Rennie Fritchie's report in 1998. The view of the Secretary of State for Health was that an independent commission should be set up, because that was the only way to reassure the public that appointments were being made fairly. The NHS Appointments Commission's website refers to the need
"to ensure that the public, the NHS and Ministers have confidence in the openness, transparency and fairness of the procedures which are used."
Openness and transparency are not words that easily spring to mind when one examines how the NHS Appointments Commission operates in Durham. On 5 December last year, I initiated an Adjournment debate in the main Chamber on the appointment of the chairman of the North Durham NHS trust and the removal of its existing chairman, Mr. Kevin Earley. I do not intend to repeat all the details of the case, so I urge hon. Members to read the debate if they want to know about the commission's unsatisfactory operations. I want to highlight the facts that I have since found out and some other concerns about how the commission is operating in Durham.
Following my Adjournment debate, and on the advice of the Parliamentary Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms
14WH
Blears), I arranged a meeting on 5 March with Sir William Wells, the chairman of the NHS Appointments Commission, to discuss Kevin Earley's case and some other concerns. Mr. Roger Moore, the commission chief executive, was in attendance.
Like my hon. Friend the Member for Warrington, North (Helen Jones), I find Sir William Wells's attitude high-handed. He gave the clear impression that he did not want to be at the meeting, and that he thought it an affront that an elected Member of Parliament should question him or his organisation. Things were so bad that 10 minutes into the meeting I told him that I thought it was a waste of time. That pricked his conscience a little, and he started to listen to what I had to say. The chairman of the commission's lack of interest in the concerns of an elected MP is representative of the mindset of the rest of the organisation.
I raised three questions about the case of Kevin Earley. First, if the appraisals that Mr. Earley undertook were good, why did the commission not automatically reappoint him to the chair of the North Durham NHS trust? Secondly, why had he not received full reasons why he had been removed? Thirdly, when the commission failed to make an appointment first time around, why did it exclude at least one chair of a primary care trust from its shortlist of candidates?
The answer to the first question is simple: the commission did not use the appraisals. It consulted the regional director of health, Mr. Peter Garland. Mr. Earley's reappointment was in his hands, even though this is the same Mr. Garland with whom Mr. Earley crossed swords a year earlier about the appointment of a new chief executive of the North Durham trust. I have long suspected that this was Mr. Garland's attempt to get his own back on Mr. Earley, and that is now evident. I tried to find mention of a consultation with the regional director in the appointments procedure, but could not find one anywhere. The case is clearly an example of someone employed by the health service determining who sits on a health board. That cannot be right.
Until I intervened on Mr. Earley's behalf, he had been given no reason why he had been removed. I could not find mention of a decision not to use appraisals anywhere in the procedure book. It is clearly the commission's trademark that it makes up the rules as it goes along. On the subject of existing chairmen, the document, "The Appointment Process for NHS Chairs and Non-Executives", says:
"Whilst there can be no right to reappointment, there will be a presumption that all candidates who have served a single term will be eligible for consideration for uncontested reappointment if their appraised performance has been consistently good."
There is no mention of the regional director. I even looked in annexe D, which is headed "Exceptional Procedures", but I could not find any mention of it there. It is ironic that it was Sir William Wells who gave me a copy of the document at our meeting.
In my Adjournment debate, I questioned the basis on which the shortlist of the new candidates for the trust was drawn up, as it does not appear in the appointment process document. In my meeting with Sir William Wells, he admitted that it was not part of the procedure. I also asked why one of the chairs of the party trust was

15WH
not included on the shortlist. As my hon. Friend the Member for Warrington, North says, the NHS trust is not very good on boundaries; it answered that it did not know that the chairman lived in Durham. Therefore, the shortlist of candidates did not include at least one able and appointable candidate. That raises questions about the process that arrived at the appointment of Mrs. Angela Ballatti.
Equal opportunities has already been mentioned. Mrs. Dorothy Burnett, who applied to be a non-executive member of the local primary care trust, asked me whether I would support her application, and I did, as she was a very able candidate, a committed trade unionist and a past president of her union who sits on the employment appeals tribunal, was an observer to Nicaraguan elections in 1999 and lives in one of the most deprived parts of my constituency, Tantobie. She applied last August and received an acknowledgment on 5 September. After that, she received no further communication and had no reply when she tried ringing the number given in the letter. In January, I wrote to Dr. John Marshall, the regional commissioner, to find out what had happened to her application. She received a letter on 3 February saying that she had been unsuccessful because of the high number and standard of candidates. To date, I, the local Member of Parliament, have not received a reply. How the commission treats Members of Parliament should be examined. If—
Miss Anne Begg (in the Chair): Order. I warned the hon. Gentleman that summing-up speeches had to begin at 10.30, and it is now 10.31.
10.31 am
Mr. A. J. Beith: Obviously, the hon. Member for North Durham (Mr. Jones) could dig deeper into his treasure store of the workings of the appointments system, but time does not permit him to do so.
The hon. Member for Workington (Tony Cunningham) has done us a service in bringing this matter before us, because of the extent of public bodies to which such appointments are made, the value of the public service done on them and the serious failure to get to grips with the under-representation of various groups, including women, ethnic minorities, people from particular parts of the country or, as the hon. Member for Warrington, North (Helen Jones) so effectively described, from deprived areas within regions and constituencies. She is a model of a Government supporter holding Ministers vigorously to account, which is not a contradiction in terms. The practice should be encouraged.
The hon. Member for West Chelmsford (Mr. Burns) made an interesting trawl through the figures. He might have looked at the figures for water authorities during the earlier years of the Conservative Administration, too, which showed similar trends. All parties should recognise that if procedures are not in place for public appointments that are not heavily influenced by political preference or affiliation, difficulties will be experienced and circumstances such as exist now will be created. In
16WH
some areas, just as happened in other areas when the Conservatives were in government, people assume that it is not worth applying for public positions because they will all go to people from the ruling party. Whether that view is always justified is open to argument, but it is widely held and deters people from applying. That is also true of other considerations, such as the belief that someone with their background would not be considered, have a fair chance or withstand the interview process that they fear they may face.
Various concerns have been expressed. Much reference has been made, as perhaps it should be, to gender balance, because of the continuing conspicuous failure in that area. The Departments that have shown an improvement in the proportion of women on public bodies are the smallest, and include the Cabinet Office and the Export Credits Guarantee Department—all the Departments that started from a very low base. The record of large Departments, such as the Department for Environment, Food and Rural Affairs, which has vast numbers of appointments, is frightening. The Department still achieves only an 87:13 male to female ratio of appointments. Its target is only 80:20, and it seems unlikely to meet it. That shows how far short it is falling of the objective of achieving a better balance. Let us compare departmental figures with those for the Scottish Executive, who have a male to female ratio for public appointments of 53:47. It is obviously possible to do a great deal better than most Departments in England are doing.
Achieving a gender balance presents a serious problem, which Dame Rennie Fritchie has examined. It has been suggested that the emphasis that she places on the legal framework may be a factor in that and other problems of representation—because of the merit argument. I am not arguing that people should be appointed to jobs for which they are not suitably qualified or appropriately experienced. In the appointment of single posts, such as chief executive or chairman, a particular mix of qualities will be required and one will want to get the best person available.
If one appoints several people to a body over a period of time, however, one wants it to be broadly representative, so background and experience are relevant factors in assessing merit. We must ensure that merit is defined in that broad context, especially in bodies that, taken together, are expected to be representative and to reflect a variety of backgrounds—as most public bodies should.
The hon. Member for Leicester, East (Mr. Vaz) spoke about the representation of ethnic minorities. I agree that we must advertise the opportunities for public service and contributions one can make to public life that are available to people in ethnic minorities, as to other groups. A more active effort is required to overcome any feeling that there might not be a place for ethnic minority groups in the apparently closed world of advisory bodies.
The hon. Member for West Chelmsford spoke extensively about the problem of achieving political balance. It is especially acute in the national health service, in which so many appointments have been necessary because of the constant reorganisations and the creation of new trusts. In my experience in the northeast, in the earlier years of this Administration, appointment lists were stuffed with people who could

17WH
declare Labour political activism. Almost every name on any list, of those who were political activists, was the name of a Labour activist. There were some nonpolitical appointments, but the political ones were almost wholly Labour.
There was conspicuous representation on the lists of people who had lost their positions as leaders of councils, for example, which included some able and competent people. However, the new system is designed to escape such clear bias in the lists. It is disappointing to hear that, in the experience of hon. Members from other constituencies, the new system may be failing to draw on the full range of people who should serve on public bodies.
To some extent, the appointments reflect the applicants: many applications in the north-east were from Labour activists. We should not simply accept that. Rather, we should counteract it: efforts should be made to recruit from a wider group than those who recognise, perhaps because of their political experience, that they would have a good chance of being appointed to a public body.
The hon. Member for Workington quoted a newspaper article that probably referred to a recent report by the Institute for Public Policy Research about public bodies in the field of culture and media. The report pointed out that such bodies were heavily white, middle-class and Oxbridge in their composition. Some are Government-appointed bodies, although some of the worst offenders are self-appointed bodies. High sheriffs, for example, are appointed by their predecessors. Those who have a political affiliation are almost invariably Conservative, and in rural areas they are almost always landowners or have substantial landowning or farming interests. We should examine cases in which people appoint their successors, which is the case with some of the cultural bodies referred to in the report. That should be of concern to the Government.
Too many responsibilities are in the hands of unelected bodies. People often say that they do not want regional government. We have regional government, but it is not elected: it is conducted by people who are appointed and are therefore the product of a system that, as we all recognise, has serious defects. Whenever possible, responsibilities should be handled by elected bodies, whether existing ones such as local government, or regional or specialised elected bodies. There is a role for unelected or partly unelected advisory bodies that draw together a particular mix of experience, but we would much rather put major executive responsibility in the hands of people who have to account to the public and who may lose their jobs if the public are not satisfied with how that responsibility is discharged.
Some of the many unelected advisory bodies and taskforces seem to escape the public body rules because they are temporary—even though they seem to last a long time. The new lobbying to get on taskforces is increasingly leading to questions about whether political donors are more likely to be appointed to taskforces than others. The proliferation of temporary taskforces, which are not particularly transparent in their appointments systems, suggests that whole areas of policy are being influenced by those who have come to public positions through a defective appointments
18WH
system—one that clearly fails to represent many sections of society. The Minister should take such concerns seriously, and I look forward to his response.
10.40 am
Mr. Tim Collins: I, too, congratulate my constituency neighbour, the hon. Member for Workington (Tony Cunningham), on securing this debate and on the interesting way in which he opened it. He raised a series of concerns, which have been developed by other hon. Members.
The hon. Gentleman said that about £23 billion of public money had been spent by non-departmental public bodies. The latest figure that I have is £25 billion, but whatever the exact figure it is a substantial sum—and it has increased since the Government came to office. The Minister may say that the number of quangos has been reduced, but the number of people employed by them and the amount of public money that they spend has increased substantially since Labour came to power.
The hon. Gentleman was right to lead off by saying that the fundamental issue, which relates to a whole range of concerns expressed in the debate, is accountability. A number of clear concerns have been expressed by members of both main parties this morning, and I hope that the Minister will address them by saying how appointments are made. I hope that he will also deal with the widely expressed concerns about the workings of the NHS Appointments Commission. I know that that body is new, and that it is the responsibility of the Department of Health; none the less I hope that the Minister will take our concern as a sign that a debate on that subject on the Floor of the House would be useful in the not too distant future.
My hon. Friend the Member for West Chelmsford (Mr. Burns), in his characteristically robust way, flattered the Minister shamelessly by calling him something of a bruiser—a remark that I suspect the Minister will have framed in his smallest room before the end of the week. In a characteristic tour de force, my hon. Friend spoke of the appointments system in the NHS and more broadly, saying—the Minister would not expect me to make my speech without gently tweaking his tail—that it is important to put things in context.
The Government are of course entitled to take the view that they have won two general elections, that they are now in office, and that they would expect to appoint more supporters of the Labour party than supporters of other parties. However, that needs to be put in the context of what happened at the general election. For every vote won by the Conservative party, the Labour party had 1.3 votes; the evidence now is that for every appointment of a Conservative party member by the NHS Appointments Commission, five members of the Labour party are appointed. That seems a little out of kilter with how people voted at the general election.
The hon. Member for Leicester, East (Mr. Vaz) made some important points. I imagine that all of us here today would thoroughly endorse what he had to say about the unfortunate events in France, and would endorse his wish for a steady growth in the proportion

19WH
of ethnic minorities at all levels of public appointments, including the most senior. I applaud, as he did, the early steps that have been taken by Sir Richard Wilson, but little progress has yet been made and a lot more needs to be done.
I strongly endorse what the hon. Gentleman said about the horrors of people making what he called a career in quangocracy. I endorse his view not only because, as he pointed out, if some people are getting themselves appointed to a multiplicity of quangos, it will mean fewer appointments for everyone else, but because if people are spending all their time on one quango or another, the very merit that they supposedly bring to those quangos—their outside experience and links—is likely to be lost.
The hon. Member for Warrington, North (Helen Jones) made an excellent speech. I very much agreed with everything she said. I hope that she will not regard praise from the Conservative Front Bench as damning her further, as she has already been praised by the right hon. Member for Berwick-upon-Tweed (Mr. Beith)—we are not trying to bury her political career. She is right that if our civic society is genuinely to mean anything, the issue of geographical representation must be carefully considered. I imagine that, like me, she would not expect any Minister in any Government easily to be able to divide the number of appointments made by central Government by 650 and allocate them evenly to constituencies, but she is right to say that some constituencies and types of constituency are under-represented.
I recognise that the hon. Lady represents an area where social deprivation and exclusion are widespread. My own constituency is in many ways more fortunate, but some people there feel excluded, as the hon. Member for Workington said. That applies throughout Cumbria because of its geographical distance from London, the difficulties in rural areas and the differences that arise even within regions, because Cumbria is very different from other parts of the north-west. The Government have a responsibility to address those issues of geographical representation. It would be helpful if the Minister would say whether the Government would like to address those issues, because I believe that any positive comments from the Government would be widely welcomed across the political divide.
The hon. Member for North Durham (Mr. Jones) raised some extremely powerful and cogent concerns about the workings of the NHS Appointments Commission. He is clearly much more familiar with the details of the cases to which he referred than I am, but he seemed to raise matters of grave concern. Certainly, the principle that those who are to be supervised by NHS bodies should not have a hand in deciding who should be on those bodies seems to be correct, and that reinforces the need to consider how the Appointments Commission is working in the health service.
In addition to paying tribute to the hon. Member for Warrington, North, the right hon. Member for Berwick-upon-Tweed also made a fair point when he said that there had been difficulties under successive Governments—this is not something that has suddenly sprung to life since 1997. He said that the best way of
20WH
tackling the problem that he correctly identified—the fact that some people do not feel that it is even worth their while putting their names forward for nomination—is to increase the element of democracy and accountability.
We might differ about whether that should be achieved through regional government. Some of us are concerned that that would result in decisions that are currently taken at county level being hoovered up and decided at a more distant level. None the less there is a case, as the Conservative party has proposed, for Parliament to take on a role comparable with one in the American system, whereby Select Committees play a part in approving the appointments of very senior officials to non-departmental public bodies.
For example, we have suggested that that should apply to some of the individuals who have been mentioned in the debate, such as the head of the NHS Appointments Commission. Perhaps one way of ensuring that that person has a more constructive working relationship with Members of Parliament of all parties would be to decide that such an appointment could go ahead only with the support of the relevant departmental Select Committee. The hon. Member for North Durham is nodding his head, so he recognises that that might be one way to counter people's perceptions of arrogance and unaccountability.
Before the Government came to power, they made clear declarations about what they would do about the quango state. When he was shadow Home Secretary, the present Foreign Secretary said:
"Labour will dismantle this unelected quango state."
In his final speech to the Labour party conference before the 1997 general election, the present Prime Minister said that he would place
"the quango-state in history's dustbin where it belongs."
Given the statistics that my hon. Friend the Member for West Chelmsford has quoted today, perhaps he would like to reflect on the somewhat ironic comment by the right hon. Member for Islington, South and Finsbury (Mr. Smith), who in 1996 was shadow Secretary of State for Health:
"Solely political appointments made to non-executive directorships on the boards of trusts and authorities must end."
As my hon. Friend pointed out, he did not say that they must "sort of change".
We have a huge number of these wonderful tsars. I was going to read out the list, but it is so long that I do not have time. After going through a list of two or three dozen tsars, one comes upon the classic title of the "red tape tsar". That seems a little ironic to some of us.
I would expect from the Minister an admirably well intentioned declaration of Government belief in wider access to appointments and greater openness and transparency. However, we need to hear about how the Government propose to make the process even more democratic than he would maintain it currently is, and whether he can address hon. Members' concerns, not least those expressed by his hon. Friends about the workings of the NHS Appointments Commission.
10.50 am
The Parliamentary Secretary, Cabinet Office (Mr. Christopher Leslie): I shall try to live up to expectations, although the text of my speech has more pages than there are minutes left for me to deliver it, so I hope hon. Members will forgive me if I have to pass as quickly as possible over as many issues as possible.
I congratulate my hon. Friend the Member for Workington (Tony Cunningham) on securing the debate. It has been both refreshing and wide ranging, even if it has featured cross-party compliments going from one side to the other—perhaps too many for my liking. My hon. Friend stressed the need to broaden awareness and knowledge of the appointments processes. I would like to touch on those processes and develop that theme, but first it is important to consider the nature of public bodies. They operate at arm's length from Ministers, but Ministers are ultimately responsible for what they do. Some public bodies are well known in Parliament and have a high profile with the general public. Others are less well known, but all of them have an impact on our lives, whether they are concerned with the development of policy or the delivery of public services, or whether they help define issues or advise Ministers in that process.
There has for decades been a concern about the proliferation of so-called quangos. The Government are committed to keeping their number to a minimum. There are now fewer in the UK than at any other time during the past 20 years. As of 31 March there were 1,025 such bodies—a 10 per cent. decrease since 1997.
My hon. Friend the Member for Leicester, East (Mr. Vaz) made an important contribution when talking about the composition of these bodies. Of the roughly 30,000 individuals serving as board members, 34 per cent. are women. However, his particular concern related to the proportions from ethnic minority communities. In 1992, 2 per cent. of board members were from those communities, and in 1997 the proportion was 3.6 per cent. As of 2001, it is 4.8 per cent. There has been some progress, although I accept that a lot more still needs to be done to ensure that we focus on increasing involvement among the black and Asian community. I will read his report, entitled "The Glass Ceiling", and consider it for the future.
The accountability of public bodies is extremely important. Ministers are accountable to Parliament on behalf of the public bodies within their Departments. We have tried to take steps since 1997 to promote greater awareness of what such bodies do and to make them more open and accountable to the communities that they serve.
We publish detailed information on all public bodies. We intend to publish the next edition before the end of this year, and the intention is that that should include, for the first time, summary information on the arrangements that each body has in place for ensuring greater openness and transparency in what it does. I pay tribute to Dame Rennie Fritchie, the Commissioner for Public Appointments, who is responsible for governing the appointment processes and ensuring that the code of practice is properly adhered to.
My hon. Friend the Member for Workington urged us to give greater attention to the process of appointing local people to local public bodies. Where a public body
22WH
serves a clearly defined neighbourhood, district or region, it makes sense for its members to have experience of living or working in that community. Merit and ability to do the job are the overriding criteria for appointment to any public body, but Ministers have to account to Parliament for the performance of local as well as national public bodies, so it is desirable for local decision makers to be drawn from a pool of candidates who are likely to engage with and understand local needs.
Clearly there are many communities in which we need to make extra efforts to encourage applications for places on the boards of quangos. My hon. Friend the Member for Warrington, North (Helen Jones) was articulate in voicing her concern that lower income groups and deprived communities are not sufficiently represented. Successful local boards are those with a wide range of people from diverse social, economic and employment backgrounds. We must engage proactively with individuals who, although they have the skills and abilities to do the job, for some reason do not know when vacancies arise, or how to apply. I shall continue to examine policies and practices to see how improvements might be made.
My hon. Friend the Member for Workington also made comments about the regional development agency in his area. It is difficult to achieve a balance in all specifics and to secure appointments on merit. I am assured that a member of that RDA, John Dunning, does live in Cumbria. Strict proportionality is never fully attainable, but I recognise the need to keep a close eye on such matters.
I have a deep-rooted concern about achieving diversity nationally, not just to represent the composition of the nation better, but to enrich the character and the work of public bodies. I am anxious to ensure that we are clear about our targets and aspirations. Gender, ethnicity and disability all require more attention; there have been positive improvements, but there remains a historic, lingering under-representation of women, ethnic and other minorities and disabled people. We have introduced various measures to address that problem, and seminars throughout the country have encouraged women to join public bodies. None the less, greater national diversity is still required, so the Government will continue to promote vacancies nationwide, so that people living in all areas of the UK have a fair chance of winning seats on boards.
There have been comments about the NHS Appointments Commission, particularly from the hon. Member for West Chelmsford (Mr. Burns), who developed his frenzied conspiracy theory at length. In April 2001, we established the independent NHS Appointments Commission, which has effectively taken NHS appointments out of the political domain. The appointments that it makes—there have been more than 4,500 to various trusts—still come under the remit of the Commissioner for Public Appointments, Dame Rennie Fritchie. She has said that there is no significant difference between the political activity of applicants and that of those appointed, nor is there evidence of any political bias in the appointments process. My hon. Friend the Member for North Durham (Mr. Jones) made a number of points about his discontent with a

23WH
specific case. I listened to his comments with care and will ensure that I again draw them to the attention of Ministers in the Department of Health.
I want to stress the ways in which the Government can ensure faster progress on diversity, which should have high priority in our policy approach to public bodies. We publish the annual report to give all Departments a strong incentive to improve their performance. The Cabinet Office will now focus on making greater efforts to help Departments to apply best practice in making appointments to the public bodies that they sponsor, so that they can meet the published targets on diversity.
Work is also in hand to identify new initiatives and policies in order to broaden the range of options available to Ministers. That will allow us more radically to drive progress on diversity in its widest sense, while preserving the overriding principle of selection on merit. Merit is always our overriding principle, but we must keep a close eye on diversity issues. Our main focus must be on putting the right people in the right posts so that they can deliver higher quality public services. That must be the outcome that we all seek, and I am glad to have had this opportunity to highlight those matters.

Pensions
11 am
Mr. Peter Lilley: The greatest domestic problem facing all developed countries is how to finance retirement incomes for populations that are experiencing increasing longevity and declining fertility. People are living longer and having fewer children from whom to draw the work force of the future, and that is a serious problem. It behoves us all to participate as constructively and positively as possible in such debates, and I shall certainly approach this debate in that spirit.
Britain is better placed to cope with the problems of an ageing population than most other countries in Europe. That is not only because our expected population pattern is more favourable than those on the continent, but because we have taken steps to encourage people to save and invest for their retirement. We have more funded private provision for retirement than any other European country: indeed, we have more provision than all other European countries together, and the value of our funds exceeds that of all of theirs.
None the less, funded private provision still meets only 40 per cent. of this country's future pension liabilities. When the Government came into office, they set a target of raising that percentage to 60 per cent. by the middle of the century, and I unreservedly praise them for that. After all, we require companies to save and invest to ensure that they meet their pension promises to their employees. Even though Governments cannot legally bind their successors, it is extraordinary that they have not considered it necessary similarly to ensure that money and resources are saved and invested so that their pensions promises can be met. I therefore welcome the fact that the Government have at least set the target of making a major step towards more funded provision for our pensions liabilities over the next few decades.
Unfortunately, having set that target, they have, in practice, moved decisively in the opposite direction. They have vastly increased their unfunded pensions and retirement-provision liabilities by replacing the state earnings-related pension scheme with the state second pension, which is set at a more elevated level. Furthermore, they have raised the value of the basic state pension by introducing the minimum income guarantee, raising it and extending it across the spectrum through the pension credit.
At the same time, funded occupational schemes are in crisis. Many are closing to new members, many are cutting contributions and, therefore, the benefits to which employees are entitled, and many are in deficit. Insurance companies are advising older members in particular to opt back into the state second pension, which they will receive on a pay-as-you-go basis, not a funded basis.
Occupational schemes are being pushed in that direction largely because of the underlying problem of increasing longevity, which has been accentuated by the decline in investment returns in recent years. However, the situation was aggravated most of all by the extraordinary decision of the incoming Chancellor to impose a £5 billion a year pensions tax on people's pension funds. I christened it the "Maxwell memorial

25WH
tax," not only because two of the Treasury Ministers were formerly close colleagues of Robert Maxwell, but because up to that point he had been the only person who believed that one could siphon money out of a pension fund and get away with it, as pensioners would not discover until many years later that the money was missing. The Government's action undermined private occupational schemes.
That effect was aggravated further by an increase in the regulatory burden and the disincentives to savings created by raising the minimum income guarantee and extending it up the scale through pension credit. That, in turn, was aggravated by the impact of the financial reporting standard 17, which is not directly the Government's responsibility but has caused problems. I hope that the relevant accounting bodies will consider the proposals of the Confederation of British Industry to allow a spreading of the impact of pension liabilities on companies' reported accounts.
As a result of all those factors, the savings ratio has collapsed. There has been a serious overall impact that we cannot ignore. However, we must be constructive and consider how the Government might pull back from that decline and meet the targets that they have set and which I welcome. In substance, there are only two ways in which they can do that.
First, they could promote more saving, investment and back-up, and supplement state pension pledges. When I was Secretary of State for Social Security in the last year of the Conservative Government, I proposed a scheme called "basic pension plus", which would have ensured that every entrant to the labour market—every young person starting work—was given his own pension fund, into which a rebate would be paid that was sufficient, over their lifetime, to fund a pension at least equal to the basic pension and the earnings-related pension. That would have been backed up by a guarantee from the state that if, through any misfortune or bad investment, the fund did not reach that target, the actual pension would be supplemented and topped up to the level guaranteed by the state through the old basic pension system. Those people would have had the prospect of sharing in a buoyant economy on the upside. If their funds did better than the modest projections by the Government Actuary, that would have acted as the basis for the rebates.
The scheme would have guaranteed the basic state pension to everyone in the country, enabled future pensioners to share in economic growth and given a massive boost to investment such that, if it had raised the growth level of the country from 2.2 per cent. to 2.3 per cent., it would have paid for the whole scheme through the extra revenues that it generated. It would have relieved taxpayers of the biggest single element of public expenditure that they faced and brought about the greatest extension of personal ownership since the spread of home ownership that ensued by allowing people to buy their council houses. In so doing, it would have resolved a major issue facing modern Governments: how to provide a decent, secure pension for increasing numbers of elderly people.
Sadly, although the scheme was widely welcomed by all the media—apart from the Daily Mirror, and I should have been alarmed if it had supported it—by those across the political spectrum and by commentators, the Government decided not to go
26WH
ahead and implement it, as they could have done. I should have been only too happy to have seen my ideas purloined. Instead they have wasted five years, as we are five years further back from entering a system in which everyone has his own savings pot for the future. If we had introduced it, 3 million young people would now have their own pension funds, with £3 billion invested in them, growing towards their future retirement needs.
The Government went so far, as they often do, as to borrow some of my rhetoric and dress it up in stakeholder pensions, saying that they were adopting some of the substance of Lilley's ideas. Unfortunately, stakeholder pensions, about which I have said many favourable things, are as close to basic pension plus as a hologram is to the real thing that it represents—as soon as one gets to it, one finds that the substance has disappeared. The most desirable feature of the stakeholder pension is that it is to be hoped that it will reduce the cost of provision and the element of savings siphoned off for administrative costs rather than being invested for future pensions.
It is said that people will save and invest only if they are either persuaded or compelled to do so. Persuasion costs money. Introducing stakeholder pensions, with their limit on costs, has removed the reward that could persuade people to save without replacing it with any element of compulsion that makes them save. Compulsion was clearly envisaged in the paper produced by the Government, "Partnership in Pensions" when the right hon. Member for Birkenhead (Mr. Field) was still gracing the Government. Since his departure, matters which were then going in the right direction have taken a downturn. The famous page 105, paragraph 9 of "Partnership in Pensions" referred to
"compulsory funded pensions for those earning over £9,000 a year".
Obviously, that was the Government's original proposal, and they failed to proof-read it out of the final published document.
I urge the Government to think again. If they intend to meet their pledge, should they not consider automatically giving to all or some of those accruing the state second pension rights their own pension fund, with a rebate paid into it and a guarantee that their pensions will, at the end of the day, be topped up if, by any misfortune, the fund is not able to provide them with the pensions foreseen by the state second pension scheme? In many ways, the state second pension lends itself to such an approach even better than the basic pension lent itself to basic pension plus. That is because the state second pension is accruing, over a generation, rights to a better pension when people retire. It therefore lends itself to a scheme that comes in gradually, with a generation.
As the scheme is, in essence, a flat-rate one, or will become so for most people, it is rather more suitable for people to opt out of than was the case with the state earnings-related pensions scheme. As SERPS was earnings-related, people with low earnings received a very low rebate, which was inadequate to cover the fixed costs of setting up and maintaining a fund. The state second pension would have a flat-rate rebate paid into private funds that would be more than sufficient to make it worth while for everyone, on all income levels, to opt out of the scheme and have their own fund generating a pension at least as good.

27WH
At present, 8.3 million people contribute to employers' pension schemes and 5.5 million have personal pension schemes. About 13.8 million in all have, therefore, opted out of the state earnings-related pension scheme, and about 7.5 million have opted in. We are talking of moving from a world in which two thirds of people have the benefit of a private pension to one in which 100 per cent. of those earning above the lower earnings limit have their own pension scheme. The current value of rebates paid into such pension schemes is £6.8 billion a year. That would have to be increased to cover the third not covered at present.
I have some questions for the Minister. I do not expect her necessarily to respond to them all here and now, but I hope that she will be able to provide answers in due course and that they will be placed in the Library to allow other Members to benefit from them. Why did the Government abandon their original proposal to make it automatic for everybody to have their own personal pension fund, equal in value to the state second pension, rather than leaving many people opted into the pay-as-you-go system? What would the value of the extra rebates be if the Government were to move to that system? What would be the value of a fund of an individual on average earnings if they paid into a fund to meet their state second pension liability by the time that they retired? How many ten or hundreds of thousands of pounds would they have accumulated through investing their rebates over a working life?
Was the reason why the Government were reluctant to move towards automatic opting out that for those who are older the structure of rebates does not fully reflect the rate of accrual—the value of the pension rights accrued by people who are working in older age—because there is less time for those rebates to accumulate compound? How much would it cost if only younger people, perhaps those under 30 or under 50, were automatically opted out of the state second pension? I calculate that if new entrants only were opted out, the net cost of extra rebates for each year's cohort of people would accumulate at a rate of £100 million per annum, but I ask the Minister to check whether that back-of-the-envelope calculation is correct.
The underlying problem facing our pension system is that we are living longer, but we are not working longer. In 1950–52, the life expectancy of a man who had reached the retirement age of 65 was, on average, 11.7 years, which meant that he could, on average, expect to enjoy 11.7 years of retired life. By 1997–99, a man reaching 65 had a life expectancy of 15.3 years. For women, whose retirement age was and still is 60, their life expectancy in 1950 was 18.1 years at 60, but now it is 22.8 years. Roughly speaking, average life expectancy in retirement has been rising by about one month every year for the past few decades.
In theory, if people worked for a bit longer and were therefore retired for a correspondingly shorter period of time, they would have more time to save and they would be able to buy a higher pension at a lower cost for the slightly shorter remaining period of their lives. Ideally, people should be free to make that choice and should be equipped with their own pension fund. When they reach the sort of age at which they may want to think about retiring, if they have a fund sufficient to cover a pension
28WH
at least equal to the minimum that the state deems to be adequate or appropriate for them, they could decide to retire. Alternatively, they could decide to work a bit longer and build up a bigger pension fund to have a higher pension for their retired life.
The evidence—I seem to remember seeing it when I was Secretary of State—that people would behave like that is provided by the fact that those with money-purchase pensions, predominantly the self-employed, have been working for longer, while those with defined benefit pensions or those who are reliant on the state pension have been retiring earlier, despite their longer life expectancy. When people have a money-purchase pension to which they can continue to add by working a bit longer, they do that to enjoy a higher standard of living during a slightly shorter period of retirement.
Other countries have encouraged that process to a considerable degree. I was in Washington a while ago, and my taxi driver told me that he was 92. At first, I was slightly shaken by that, but he pointed out that he did not drive at precipitate speed, he drove with great caution, he had more experience than most taxi drivers and he drove extremely safely, which was proved because he had lived so long. People can continue working to very considerable ages if they so wish. Ideally, it should be up to them, but the Government have effectively repudiated plans to move towards a position in which all of us have our own pension funds, and all of us are free to make our own decisions about when we retire and whether we decide to work a bit longer. The Government have to face taking that decision collectively on our behalf rather than leaving it to us as individuals to make the decision.
In the Scandinavian countries and America, Governments have already begun to consider moving the pension age, or have already legislated to raise the state pension age, from 65, typically, to 67. I believe that it is time for the Government, working within their own parameters, to launch a debate about the future retirement age that they will be able to afford. They must consider whether it is more logical to raise the pension age by, for example, a month per year, so that those starting work now would probably work for three or four years longer than the previous generation, just as they would expect to live three or four years longer.
The decision will be important, whether the Government decide to go down that route or not. I emphasis that it is a decision that they face because they have chosen to rely largely on state pay-as-you-go obligations. They have increased those obligations and unless they do something about that they will not be able to meet their target of reducing the cost of state unfunded liabilities to just 40 per cent. of the total by the middle of this century.
My decision to equalise the state pension age for men and women at 65, rather than reducing it to 60 for both sexes, was extremely important. That was actually the biggest single cost-saving decision that any Government or Minister have or has ever taken. I am glad to say that it was endorsed by the then Opposition. Effectively, a consensus was achieved through the process of launching a debate, floating the arguments and allowing discussion. I believe that if the Government did a similar thing now, they would receive a similar constructive response across the political spectrum.

29WH
Are the Government considering that process, or have they closed their eyes to that option? What is the cost to the taxpayer of a failure to reflect in any way longer life expectancy in the state pension age? My calculation is that a single month's deferment of the state pension age would save about £3 billion gross—perhaps £2 billion net—of any extra benefits that would have to be paid. That is a very significant decision.
Mr. Tim Boswell: Does my right hon. Friend agree that it is interesting and remarkable that the incentives for deferment of state retirement pension to a greater age are relatively modest and that doing so provides very little return? That may be reflected, as the memory of the earnings rule dissipates, in the much lower number of people who are deferring retirement and claming their benefit at the age at which they are entitled to it.
Mr. Lilley: I announced an increase in incentives for those who chose to defer retirement. Under the long-established system—I think, since 1948—anyone who deferred taking their state pension for a year subsequently received a pension that was 7.5 per cent. higher. I announced that that would be raised to 10 per cent. I am not sure whether that promise is being honoured by the Government, but I hope that it will be. I do not expect a huge impact from that. The evidence suggests that it will not be as effective as people having their own pension fund to which they can pay in extra if they work a month or two longer and buy a slightly higher pension at a lower cost as a result.
I reiterate that the Government have created the problem, not us. I pay tribute to my hon. Friends the Members for Daventry (Mr. Boswell) and for Havant (Mr. Willetts) for the constructive way in which they have approached the problems of longevity. I hope that the Minister will give a similarly positive and constructive response, rather than descend into the scaremongering and point-scoring that we saw during the 1997 general election. The problem is too important for us to take too partisan an approach.
In practice, pension provision over the years has been a case of each Government building on predecessors' work rather than undoing it. I hope that the Government respond to the building blocks that we have put in place, and to the ideas that I have put forward in today's debate.
11.26 am
John Robertson: I congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on securing the debate. He raised several important pension issues, including how longevity in our population poses new challenges for the Government, and I look forward to the Minister's response. I shall expand the debate to incorporate final salary pension schemes, and discuss how the Government can seek to protect employees as more and more companies move away from such schemes.
A final salary pension is a type of defined benefit pension that guarantees, on retirement, to pay out a pension based on the final salary that the individual earned in a job—that includes their years of service for a company plus any pension that they have transferred
30WH
to that employer's pension scheme from another employer. Most importantly, members of such schemes are guaranteed a specific pension, which they can calculate, and on which they can base retirement plans. The final salary membership has sadly declined from 51 per cent. in 1983 to 41 per cent. in 1995, but it is still the dominant occupational pension.
However, such schemes are expensive for today's employers. Several factors have played a part in making final salary schemes much more expensive for them. There are social factors, such as demography and, as the right hon. Gentleman mentioned, an increase in life expectancy. Policy changes, such as the introduction of the minimum funding requirement and financial reporting standard 17, and economic circumstances, such as the fall in stock market returns have also contributed. Those economic conditions and policy changes have impacted enormously on employers who previously offered final salary schemes, so we must consider how the Government can instigate policy changes to take off some pressure. If we do not remedy the situation now, although the full impact will not be felt for 20 or 30 years, it will be felt. Failure to act will create a pensions time bomb.
The alternative pension scheme that companies are embracing is the defined-contribution or money-purchase scheme, which transfers any investment risk to the individual away from the company. Thus if the stock market underperforms, the employee's pension is likely to be less than it would have been under a final salary scheme. In broad terms, a final salary scheme guarantees a pension at a given fraction of final salary—the firm has to fund the scheme to achieve that—but a defined-contribution scheme guarantees absolutely nothing.
According to the National Association of Pension Funds, 46 companies stopped accepting new contributions to their final salary schemes last year, offering money-purchase schemes instead. Nearly half the companies that ran defined-contribution pension schemes contributed 5 per cent. or less of employees' salaries. In a typical final salary scheme, companies contributed 10 per cent. or more. Without final salary pension schemes, retired workers could be 30 per cent. worse off.
A vast number of companies have closed their final salary schemes to new employees, citing the aforementioned factors, individually or collectively, as reasons. British Telecom closed the BT pension scheme, of which I am a member, to new employees on 1 April 2001, and many others, such as HSBC, Marks and Spencer, Abbey National and Barclays, have closed their schemes. To my certain knowledge, two companies have even closed their schemes to existing employees, and I fear that that may become commonplace. The Trades Union Congress estimates that the numbers in final salary schemes may have fallen from 5.6 million in 1991 to 3.8 million in 2001.
With money-purchase schemes, the size of the individual's pot at retirement determines the size of his or her pension. If the individual has not put in enough, or if investment returns have been poor, there may well not be enough to fund a decent pension. At present, the situation is made immeasurably worse by the high price

31WH
of annuities. The law obliges people to use their pension fund to buy an annuity. If they look up annuity rates on the financial pages of newspapers, they will find that they need an absolutely huge pot of money to buy a half-decent pension. For a retirement income of £10,000 per annum, a half-pension for a partner, should the pensioner die first, and inflation proofing of up to 5 per cent., a pension pot of at least £250,000 is required. Clearly, that is impossible for the vast majority of people. The pension industry says that people need to save 20 to 25 per cent. of their salary for the whole of their working life to ensure a reasonably decent pension. For all but the richest in society, that is nothing more than a pipe dream.
Closure of final salary schemes also has implications for employee relations. Although closing a final salary scheme may not be a breach of contract, it may break an implicit promise in the employer-employee relationship. Apart from the obvious damage to the commitment that employees have to their company, the loss of a guaranteed pension and reduced company contributions may increase wage demands as employees seek to maximise their pension.
There are several problems with the minimum funding requirement, which is an assessment of the funding status of pension schemes on the basis of rules established by the pensions industry with Government support. The test for the schemes is too onerous. A scheme fully funded under MFR rules—one that can meet its pensions obligations is in fact over-funded; in other words, the MFR is too cautious. It might seem absurd to advance that argument, but it is not. Under MFR rules, schemes have to be returned to fully funded status in a fairly short period of time. It is now 10 years, and it used to be five years. The only way that that can happen is if employers make sizable payments to their pension schemes. The onus is placed on them to make up the shortfall, although in many cases the shortfall is really nothing of the kind.
Another problem is FRS 17, a new accounting convention, which is designed to force companies to show any shortfall in their pension scheme funding as a liability on their balance sheet. It is designed to aid transparency in company accounts by forcing companies to disclose the real state of their liabilities.
We must appreciate the sheer size of most mature pension funds. The BT scheme is capitalised at £28 billion, and is worth about 50 per cent. more than BT itself. If it were shown to be 10 per cent. less than fully funded, there would, under FRS 17, be a £2.8 billion liability on the BT balance sheet. That is a totally artificial state of affairs. First, when we define a pension fund using MFR, we greatly exaggerate the size of the deficit. Secondly, even under MFR, we have 10 years to put it right. FRS 17 grossly exaggerates that liability. It can seriously damage a firm's share value and current rating, making capital more expensive. Those two issues are, between them, driving firms to close their final salary schemes.
32WH
Peter Thompson, chairman of the National Association of Pension Funds, said that companies were facing a number of cost pressures. He said:
"People are living longer, stock market returns in the last few years have been relatively poor, interest rates have been declining, so the cost of buying a pension has gone up by about 40% in the last five years."
Mr. Boris Johnson: Would the hon. Gentleman care to evaluate the impact that the rises in national insurance contributions will have on those companies? Does he agree with me that they will greatly aggravate companies' difficulties in paying generous pensions? He has not mentioned in his analysis the advance corporation tax, which my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) rightly compared to a Maxwell memorial tax. Does the hon. Gentleman agree that that, too, has had a severe impact on company pension schemes?
John Robertson: The hon. Gentleman has obviously read the penultimate page of my contribution. On his first point, I refer him back to the right hon. Member for Hitchin and Harpenden, who instigated the debate and said that we should not try to score points on the subject, as it is too serious. However, I would probably disagree with the hon. Member for Henley (Mr. Johnson) about national insurance contributions.
Given the comments of Mr. Peter Thompson, and the fact that buying a pension has gone up by 40 per cent. in the past five years, the Government might well say that they want people and their employers to take more responsibility for pension provision. However, the introduction of MFR and FRS 17 has created an environment in which that is practically impossible. The result is that we shall increasingly have to step in and use taxes to fund pension subsidies in order to prevent consigning the elderly to poverty and future Governments of all colours to electoral disaster.
What should the Government be doing? A first step should be at least to reform or, ideally, get rid of FRS 17 so that it does not have such a major effect on decision making. There should also be further reform of MFR to make it more realistic. FRS 17 is due to be replaced in 2005 with an international accounting standard. I would like that to be speeded up, although I am concerned that the international standard may well be based on FRS 17. Perhaps the Minister will comment on that.
We could add incentives, such as abolishing advance corporation tax for those firms that maintain their final salary schemes, and abolishing it retrospectively for those who reopen such schemes. We could also consider giving firms transitional relief from other taxes if they can show that they are under genuine pressure because of their final salary pension schemes. We could lift the requirement on people to purchase annuities with their money-purchase schemes and make it mandatory for firms to pay a minimum of 10 per cent. of salaries into money-purchase or stakeholder schemes. Essentially, we must make it cheaper for firms to keep final salary schemes going while making it more expensive to switch to money-purchase schemes.
I am pleased to have had the opportunity to contribute to the debate. I realise that some of my ideas to alleviate pressure on companies and encourage employers back into final salary schemes may fall under

33WH
the responsibility of the Treasury, and I shall seek assurances from the Minister that she will raise them with that Department. I look forward to her response.
Miss Anne Begg (in the Chair): Order. I remind hon. Members that summing-up speeches must begin at midday. Two hon. Members have indicated that they wish to speak. I call Mr. Boris Johnson.
11.39 am
Mr. Boris Johnson: I shall be very brief, as all my points have essentially been made by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), at whose feet I sit and to whose briefings on pensions I used to listen humbly and sincerely when I was a mere journalist—which, of course, I still am.
This morning, I asked my secretary, who is, I am afraid to say, a Labour voter, about her pension arrangements. She said that she had none, as no one in her family lived longer than the age of 50, and she saw no reason to make any private arrangements. That is a great shame, as I have every confidence, as she seems in the peak of health, that she will live a long time. As my right hon. Friend said, we live increasingly longer, and through several errors of policy the Government have gravely aggravated the pensions position in this country.
When sitting at the feet of my right hon. Friend, I used to write that Britain had the best private pension provision in Europe, which remains true. Unfortunately, however, we seem to be harmonising our position downwards, towards the rest of Europe. Perhaps that is a subtle scheme to approximate us to the rest of the Community, with a view to eventual membership of monetary union, or perhaps there is an agenda that I do not follow. However, I cannot believe that that is so. It seems more likely that errors of public policy, such as FRS 17, to which the hon. Member for Glasgow, Anniesland (John Robertson) referred, and advance corporation tax, which, as my right hon. Friend said, swindled £5 billion out of the general pensions pot, have contributed to a grave diminution in general available funds.
The question is, what are we going to do now, and how can we respond positively? Having listened to my right hon. Friend, I am delighted to discover that the Lilley plan rides again. We had such difficulty defending it in the 1997 election. The Minister smiles, because she remembers that at the time the Labour party grossly traduced and misrepresented it. It was a good idea, and I understand that my right hon. Friend is now offering a sophisticated variant that would do well and enable the Government to escape some of the mess that they have created.
The Government should think much more creatively about the retirement age. It is ridiculous that a man such as Sir Magdi Yacoub is forced to retire at 65 whereas a journalist such as Bill Deedes can, praise be, go on for ever, like my right hon. Friend's taxi driver. I am anxious to hear the Minister's comments about that, as I do not believe that many people will exculpate the Government for their failures in public policy over pensions. There is a risk that we will oscillate from apathy to panic. I am starting to detect serious panic about pensions. People my age are seriously wondering what is going on, and it is time that the Government did something to allay their fears.
11.44 am
Mr. Peter Luff: As I am sure that you would agree, Miss Begg, my hon. Friend the Member for Henley (Mr. Johnson) may be a journalist, but he is not a mere journalist.
I rise to speak with some hesitation, as I find my own personal pension arrangements immensely difficult to understand. An appropriate metaphor for today, to spare your blushes, Miss Begg, is that I feel like St. George taking on the dragon of the pension industry. The complexity of personal arrangements is difficult. I speak on behalf of my constituents, who tell me all their bewildering concerns—frankly, I often get lost.
Members of Parliament are a species of public servant who seem likely to continue to benefit from a final salary scheme. For those constituents who might criticise me, I would like to place on record that the average length of service in the House is not that long. The benefits of the final salary pension scheme are nowhere near as great as they may appear to the outside world, coupled with which, many of us take a substantial salary decrease to become Members of Parliament, so it is even worse than it looks.
I congratulate my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) on securing this debate on an important subject. Over the past year or so, my postbag has reflected a sharp increase in concern, not from the traditional pension lobby of those who rely entirely on state pensions, but from those who have put something away for their retirement and now find that it is under threat. In the past few months, employees of companies that are ending their final salary pension schemes have expressed complaints and concerns to me. The importance of that issue is growing. Politicians sometimes find it difficult to deal with because, typically, those who express their worries are approaching retirement or have actually retired. However, we must urgently focus our attention on it. The term "pension time bomb" was used by my right hon. Friend and by the hon. Member for Glasgow, Anniesland (John Robertson), in what I thought was a useful and thoughtful contribution, although I am not sure that the Minister would agree. He raised important and serious points.
In opening this important debate, my right hon. Friend took a characteristically emollient tone, and did not seek to score party points. I shall try to follow his example, but I believe that a substantial part of the fault for the problems that we face rests at the door of the Government. My right hon. Friend said that there were only two ways to persuade people to provide for their old age—by persuasion and by compulsion, but it is difficult to persuade people to deal with the issue against the confusing and complex background noise on pensions created by the Government.
Although the debate is primarily about final salary pension schemes, the subject cannot be divorced from the broader pension framework that the Government have sought to establish, the single greatest mistake of which is the growing reliance on means-tested benefit for pensioners. Pensioners have also been badly affected by the increase in council taxes, which is another source of taxation on pensioners that is outside the terms of this debate.

35WH
Thanks to the minimum income guarantee, an impression has been created in the minds of some pensioners that they no longer have to provide for their old age. It may be that the closure of their final salary pension scheme does not concern them as much as it ought to. That worries me.
The Government's failure to move on annuities may also discourage people facing the end of their final salary pension scheme from making appropriate contributions to their own money-purchase scheme. The responsibility rests with the Treasury rather than the Minister's Department, but I urge her to look again carefully at the arguments relating to annuities. Final salary pension schemes appear to be in terminal decline, and there will surely be few private limited companies left with such a scheme within a few years—my right hon. Friend looks surprised, but it is difficult to imagine that any would maintain them. Therefore, the way in which the Government treat money-purchase schemes will become even more important.
The Bill introduced by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) comes before the House again on 10 May. In the context of the demise of final salary pension schemes, I hope that the Government will take a more sympathetic view to that Bill than they have so far. The introduction of other pension arrangements such as stakeholder and second state pensions has made the background noise to the pensions debate immensely more complicated for people such as myself who, frankly, find such things very difficult to understand.
In October last year, the National Association of Pension Funds said that 46 companies had closed their final salary schemes to new members during the previous year, 13 schemes had been switched from final salary to money purchase, 95 per cent. of companies had said that providing an occupational pension took up more company resources compared with five years ago, and 92 per cent. expected that to continue. Fewer than one in 10 companies intended to replace any scheme with a stakeholder one. More than seven out of 10 private sector schemes said that the introduction of stakeholder pensions had had no effect on the benefits that they offered. Worryingly, as the hon. Member for Glasgow, Anniesland pointed out, more than three quarters of schemes said that the new accounting standard FRS 17 would make it less attractive to employers to offer a final salary scheme. The director general of the National Association of Pension Funds, David Cranston, summarised the situation very neatly when he said:
"Falling investment returns, combined with longer life expectancy undoubtedly account for much of this pressure. But the volume and complexity of red tape has clearly weighed heavily enough with some schemes to drive them away from final salary scheme provision … There is no shortage of evidence that employers want to provide good occupational schemes wherever possible. It is to their credit that many do so. But too often, regulations hinder rather than help. Now, more than ever, is the time to encourage such employers and to strip away unnecessary red tape."
I hope that the Minister can address that issue. It lies within her responsibilities.
36WH
The two crucial issues that have been mentioned and cannot be repeated too often are the devastating impact of the Chancellor's raid on pension funds at the beginning of the New Labour Administration, final salary pension schemes—
Mr. Lilley: My hon. Friend suggests that there was a one-off raid on pension funds and that is often repeated in the press. However, £5 million is extracted from pension funds every year; I hope that that is clearly on the record.
Mr. Luff: My right hon. Friend makes an important point. Like the increase in national insurance contributions announced last week—£9 billion-worth of taxes on incomes, not just one year but year on year— so it is with the raid on pension schemes through the change in advance corporation tax rules.
The accountancy firm Chantrey Vellacourt DFK has calculated that a typical 30-year-old needs to save an extra £200 a year just to pay for the Chancellor's stealth tax. It has also been reported that Tesco has imposed a 15 per cent. increase in contributions to the company's final salary pension scheme as a result of that tax—a 15 per cent. increase that will not boost the final pensions of employees, but will pay the Chancellor's stealth tax. The Chancellor said that the stock market would continue to rise and that the increase in value of pension funds would more than compensate—he said that it would be a direct result of the abolition of the tax, as I recall. Those of us with modest shareholdings and ISAs know how sadly untrue that has proved over the past couple of years.
My right hon. Friend made a powerful case concerning the damage done by FRS 17 to the pensions industry, particularly to final salary pension schemes. He suggested its repeal. I suspect that the damage has now been done—repeal will not undo it, and it cannot be unwound—but I should like to hear the Minister's analysis of the point. Will she put pressure on the Inland Revenue to change the arrangements?
The issue is important, and there are three major Front-Bench speeches to come, so I shall not prolong my remarks unnecessarily. However, the total impact on pension arrangements of what the Government have done is serious. It is estimated that many will need to double their savings rates to provide a decent retirement income. An individual aged between 35 and 45, earning between £17,500 and £35,000 per year currently saves 10 per cent. of annual income for retirement. In order to provide a comfortable retirement, that needs to increase to between 10 and 21 per cent. of income. Those are immense figures. My fear is that, with their final salary pension schemes scrapped, such individuals will see the Government's promises to protect their income under the minimum income guarantee and decide that it is not worth the candle. When the Minister responds to the debate, she must set the demise of final salary pension schemes in a much broader context. This is becoming our most important domestic policy issue: in 20 years' time we shall have to face our constituents and say that we did not speak up soon enough to protect them from the poverty that confronts them.
A low savings rate, confusion caused by the stakeholder pension arrangements, more means testing, the failure to reform annuities, tax increases on pension

37WH
schemes through the change in ACT and new Inland Revenue rules are creating a pensions time bomb. I hope that the Minister will address that problem, and will take from the debate a sense of urgency: the cries of pain are beginning now, but we have heard nothing yet.
11.54 am
Mr. David Heath: I, too, congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on having secured the debate, and on the way in which he expressed his views. He has a great deal of expertise and interest. I do not always agree with his conclusions, but I do not doubt the genuine expertise that he brings to the subject. My only regret is that my hon. Friend the Member for Northavon (Mr. Webb) cannot be here—he is a member of a Standing Committee that is sitting this morning—as he has more expertise on the subject than I, even with my best efforts, could achieve. Nevertheless, I hope that I can contribute to what has been a good debate.
I congratulate the hon. Members for Glasgow, Anniesland (John Robertson), for Henley (Mr. Johnson) and for Mid-Worcestershire (Mr. Luff) on their contributions. The hon. Member for Mid-Worcestershire mentioned the parliamentary pension scheme, which is a serious problem. The idea that the House can vote to enhance its final salary scheme while the rest of the country sees its final salary schemes going by the board is difficult to defend, and I for one am not prepared to defend it. That, however, is a subject that should be addressed elsewhere.
The right hon. Member for Hitchin and Harpenden made a comparison with other countries. He was right to say that, in contrast to many European countries, we are fortunate in having funded schemes. I am glad that he did not follow the path taken by many of his colleagues on so many other subjects by saying that European models are preferable. I find it difficult to reconcile the Conservative party's telling us that health systems in Denmark are preferable to ours with what it says on other subjects. It took the biscuit yesterday when the shadow spokesman for the Home Office said that we should consider policing in Belgium as a model. The mind boggles.
Setting that aside, we are historically lucky that many pensions are provided by funded schemes. Indeed, it is the schemes that are not funded that cause the greatest problems. I recall my time in local government when police authorities had difficulties with non-funded schemes because of the problems of finding the contributions to ensure the recipients a proper rate of return on their pensions, and of dealing with the ever increasing proportion of their revenue that went towards pensions. I am not sure that the answer is to keep hiking up the pensionable age. Doing so has clear attractions, but I am worried that we would start chasing our tails.
I recently heard an interesting exposition by the head of demographics at the United Nations. He was comparing the ratio between those of working age and those of retirement age in various countries, and Britain is by no means the worst in that respect. In order to maintain a steady ratio between those in work and those of pensionable age, some countries, including China, would have to increase the age of retirement into the 90s.
38WH
People would have to continue working until the age of 90 in order to receive a pension. That is clearly not sustainable, and it worries me that we might end up in some sort of forlorn race.
I shall deal principally with the crisis in funded pension schemes that so many hon. Members have spoken of, particularly that in final salary schemes. It is a hot potato at the moment, and is causing a great deal of concern to many people. Indeed, the hon. Member for Glasgow, Anniesland drew attention to it. Clearly, many factors are involved. I have no doubt that the impact of advance corporation tax is a factor—one among several. Many people also point to FRS 17, but I am less convinced by that argument. That change in accounting standards will improve the transparency of the arrangements, but it will not change the value of the funds. It is the triennial valuation of the funds that tells fund managers that they have insufficient funds to meet their commitments, not the way in which they are reported.
Several hon. Members have suggested that the real problem is twofold. First, mortality rates have fallen and longevity has increased; secondly, stock market returns are lower. It is extraordinary that actuaries can glibly pass over their contribution to those eventualities, given that they predicted neither of them in the 1980s, and did not advise pension funds of the need to make provision for them. As a result, many large companies took a contributions holiday at that time, saying that they had a large excess in their pension funds. As we came into this century, however, they were facing deficits, which raises serious questions about the way in which actuarial science was practised in the 1980s.
There are two problems with the way in which companies have behaved. First, they have often used pension schemes to reorganise their structures. Throughout the 1980s and 1990s, companies that were disengaging labour, restructuring and downsizing used attractive enhanced pension schemes to move members of the work force into early retirement. Those people are now, of course, the beneficiaries of the schemes.
The other problem relates to contributions holidays, with which I have some difficulty, although I have always defended the concept. It is fair for companies to take contributions holidays from final salary schemes, because they take the investment risk. They may have to put more money in during the bad times, so it is only fair that they should put less in during the good times. The trouble, however, is that they have had no intention of putting more money in during the bad times, even though they have been happy to take it out during the good times. They see schemes as one-way arrangements, or no-lose bets, which is why we now have huge deficits following the performance of the stock market and the inclusion of additional beneficiaries. Companies must tackle their deficits. BT's is an enormous £3 billion, BAE Systems' is £776 million and Unilever's is £647 million. Those big figures must be tackled, but as we heard, many companies have chosen to do so by closing their final salary schemes and pulling out altogether or migrating to money-purchase schemes.
A money-purchase scheme is not intrinsically a worse deal for recipients, and will indeed be better for some. One by-product is that employees have ownership of the

39WH
fund and surety about what will happen. Companies with a final salary scheme are, however, the guarantors of the investment and are within their rights to say that it is theirs—although that is disputable.
Whatever the scheme, the key is whether the level of company investment is the same as before. Time and again, however, we find that it has gone down. Marks and Spencer migrated from a final salary scheme to a money-purchase scheme, and its contribution fell from 22 per cent under the old scheme to between 6 and 12 per cent under the new scheme. That is the problem: not enough money is going into the system to meet the demands made on it.
The crux of Government policy must be to find ways to stem the reduction in contributions, and, ideally, to enhance them so that schemes have sufficient resources to provide benefits. The Government have announced their review; they are working on it at the moment, and we look forward to the results. What is the basis for that review and the decisions that the Government will then take? Do they want simply to staunch the wounds, or to enhance the contributions made by the corporate sector into the funded pension area? Are they prepared to ensure those levels of contribution by one method or another? Will there be a compulsory minimum contribution, and if so, what mechanism would be used?
Should there be a compulsory employer contribution, to stakeholder pensions if not to company schemes? That might be exactly the spark that is needed to get people to take out stakeholder pensions, because an employer contribution often persuades people to take out such a scheme. Are there changes in regulation or in costs to companies that would make a difference? In the context of the 1 per cent. rise in national insurance, some sort of fiscal incentive might seem attractive to companies.
Is it necessary to revisit FRS 17? It is not the villain of the piece. In terms of reducing the contributions, it is the messenger rather than the protagonist. Nevertheless, if some aspect of it needs to be reviewed, the Government should respond.
The Minister responsible for pensions told us that there would be legislation on the minimum funding regulation. When are we likely to see that, what is it likely to comprise and what is the intention behind it? The Minister is smiling, and I suspect that she may not be able to give me the answer to all those questions, but perhaps she will—who knows?
Is there a case for exploring the concept of insurance against insolvency again, so that there is at least a backstop for companies who find themselves in difficulties? Should we re-examine the fiduciary duties of trustees and companies to existing and future pensioners? It is clear that nothing illegal or improper has been happening in the closure of the schemes, but in terms of the actual effects on pensioners, something profoundly disturbing has been happening. The Government have a role in ensuring that those people's interests are properly protected. They are not necessarily well protected at the moment, and there is a case to answer. I hope that the Minister will be able to respond positively to some of the questions that have been raised.
12.7 pm
Mr. Tim Boswell: My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) deserves all our thanks for securing this debate and for the moderate way in which he elucidated his concerns. For those who have any residual doubt about the efficacy of Westminster Hall as a sounding board for matters of policy, this debate justifies the innovation: a former Secretary of State and deputy leader of my party has taken the trouble to share his thoughts and give us his experience on this matter. In fairness to all those who have contributed subsequently, they have responded in kind.
My right hon. Friend drew on his experience and was critical, but not hyper-critical, of Government policy. He expressed concern about the expansion under this Government of unfunded liabilities. He made the point that savings and investment are central not only to the pension issue but to economic performance. He rather trenchantly made the point that persuasion costs money. We all need to remember that. The alternative to persuasion is compulsion, and many of us would not wish to go down that route without good reason.
Finally, he produced a series of specific thoughts built on his earlier thinking, which will repay further consideration. In particular, I welcome his ideas on incremental changes that would have a highly beneficial effect in the medium term, but might not necessarily either take the political trick or produce instant results.
The hon. Member for Glasgow, Anniesland (John Robertson) made a valuable contribution, which was not uncritical of the Government, and considered the issues very much from the employee's perspective. It is right that we should do that—I often think that the trade union input to the pensions debate has not been fully developed in either its practical or its theoretical aspects. He gave us a fascinating statistic about the relative size of the market capitalisation of BT as against its pension fund—twin stars, as it were, with different sizes at different times. That was hugely interesting.
My hon. Friend the Member for Henley (Mr. Johnson) spoke with perspicacity and self-assumed detachment. I especially liked his reference to the danger of oscillation from apathy to panic, which was germane to what my right hon. Friend said. Although there are a lot of reviews in hand, the Government seem to be in apathy mode, but we do not want them suddenly to push the panic button and make a series of dramatic and eye-catching gestures that may not be right for the long term.
My hon. Friend the Member for Mid-Worcestershire (Mr. Lull) said what I might have said, but eloquently and with a passion that I cannot claim to match—and amen to that, because he put his points very clearly. He rightly said that we must all get to grips with the issue.
The hon. Member for Somerton and Frome (Mr. Heath) spoke for the Liberal Democrats. His colleague, the hon. Member for Northavon (Mr. Webb)—or "the professor", as he is known is speaking in Committee upstairs. Both the Minister and I should be there as well, so we are two-timing at the moment, but I make no complaint about that, as it is in the nature of the House

41WH
that we should be in two places at once. The hon. Member for Somerton and Frome made some interesting comments about companies and contributions, to which I may return in the moment.
To summarise my views, this debate is analogous to the debate about the national health service, in that we are at a turning point in our affairs in relation to pension provision. It may be no accident that the NHS and modern pension provision have their roots in the wartime consensus and derive from action taken by the post-war Labour Government. Subsequent Governments have worked on them in various ways, and there is now an interesting difference between the two. Whereas the NHS has continued as a broadly monolithic state and taxpayer-financed provision, the pensions industry quickly moved away from that and took advantage of a mixed economy with a diversity of provision and a high degree of private financing. That may be the reason for the relative success of our system compared with the more state-funded systems on the continent.
That success may now be at risk. The Government's attitude, as shown originally in their Green Paper of 1998, did not so much mis-sell as oversell the Government line. The objectives were not bad—in particular, the aim of reversing the split of 40:60 between private and public provision—but some hon. Members have expressed real doubt today as to whether that split can be achieved. Certainly, to achieve it, the Government must respond briskly to the reviews of Alan Pickering, Ron Sandler and the Inland Revenue that are under way, before going ahead with any changes.
I should remind hon. Members that funded pensions are what they say they are—they are pension funds, generally held in tradable securities. Therefore, the funds reflect the performance of stock markets and other kinds of markets, and whatever a Chancellor does is directly relevant to their success and to the amount that is available to beneficiaries. I cannot help but take notice of the changes to the national insurance contribution, just as I could not overlook the raid of advance corporation tax in the past. I had the privilege of serving under my right hon. Friend on our Treasury team, and we both remembered the impact of previous policies on pensions. We shared our knowledge with the Committee but, however hard we worked, people did not take much notice because they did not realise what could happen when the markets hit a downturn. Now markets have turned down, triggering difficulties for pension funds.
One cannot say that ACT was the sole cause of pension fund problems, but since 1997, perhaps coincidentally, there has been a series of phased retreats in provision by companies with company pension funds. They began by abandoning the pension holiday as finances became tighter and went on to close final salary schemes to new entrants, with the possibility that they might close those schemes to existing beneficiaries and place the arrangements on a new contractual basis.
As has rightly been said, the move from defined-benefit or final salary schemes to defined-contribution or money-purchase schemes is not, of itself, objectionable, but it is usually accompanied not by an extra contribution from the employer to acknowledge the transfer of risk, but by a reduced contribution, which
42WH
reduces the employer's overall costs. I heard a senior partner, a well known figure in the pensions industry, speaking yesterday, and he said that employers seem to have lost interest in the whole pensions business. That needs to be recorded in the context of this discussion, because if that is happening—because employers do not want highly intrusive, pervasive and expensive pension funds—we must consider self-provision, for which my right hon. Friend and others in the previous Conservative Government established some of the framework for the future. That was not always successful the first time around, but now we are considering private pensions and stakeholders, which need not be objectionable, any more than the growth of self-provision of company cars is objectionable. What matters is how it is achieved and whether, ultimately, the figures are adequate.
Our concerns have been well expressed in the debate, and we want the Minister to answer the points that have been raised. They centre on the targeting of private provision; issues relating to annuities, which were raised so passionately by my hon. Friend the Member for Mid-Worcestershire; the adequacy of contracting out rebates in relation to the state second pension; the interaction of the state second pension and the basic pension, both of which are probably still inadequate to reach the guarantee offered under the pension credit—so there may not be an incentive to save—and that certainly will not help individual pensioners who have a partial contributions record; and the awful business of means testing 5.5 million pensioners, which has been referred to by several commentators, including the National Pensioners Convention.
What has come out of today's debate is an acknowledgment that we are all in this together. This is not just a matter for the young or old. The old will come and complain to us, now or in the next few years, and the young will be very critical of us if we let them down in the medium term or do not explain what is necessary to secure their future provision, which must be comparable with what we expect for ourselves. The concerns apply equally to the relatively affluent and to those who live at income support level. People need security in retirement, and it will be a long retirement because of longevity. We hope that people will he able to share in rising prosperity over that time. In addition, the issue should not divide either side of industry. Everyone needs to get together and decide whether provision should be made through a company scheme and, if so, how the burden is to be shared. Above all, the Government need to take the issue seriously and to level with the British people about what is needed and what they can do to assist us in providing for ourselves and our dependants for the future.
12.18 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): This has been an interesting debate. It is a shame that it cannot continue for a little longer, because it was apparent to me as I listened to the contributions of hon. Members that many of those present wished that they had a little more time to expand on their comments. None the less, we are stuck, as ever, with the time available to us.
First, I join many hon. Members in congratulating the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who obviously retains his interest in the area in

43WH
which he used to control Government policy as Secretary of State, on initiating the debate, and on the way in which he put forward his views, because as everyone in the Chamber is well aware, if we had so chosen we could have had a slanging match. I am in no doubt about that, so I congratulate him also on the tone that he adopted in making his points.
Before trying to deal with some of the many points that have been made, I want briefly to say something about the Government's approach. The right hon. Gentleman mentioned back-of-the-envelope calculations, but although he might be able to do calculations on his specific, technical points—the value of rebates, the rate of accrual for older people contracting out and what the value of pension pots would be if only younger people opted out—on the back of an envelope, I cannot. I do not have any envelopes with me, and I do not have the time or the wherewithal to answer those points in full now. I shall, of course, write to him on them and, as he suggested, ensure that my answers are placed in the Library of the House so that other Members can see them.
The Government's strategy is to try to ensure that those who can afford to save for their retirement do so. I do not think that that is different from the strategy of any previous Government. We want any saving undertaken to be rewarded, not penalised. We want individuals to have the right information to save enough. A theme that has run through this morning's debate is that it is how much people save, rather than the different ways in which they save, that is crucial. I do not think that people have ever saved enough. I am sure that it would be true of most of us here that, if we were to stop and examine our arrangements, we would be shocked to see how poorly we are providing for ourselves.
We must ensure that people have the right information. We must also ensure that regulation on employers and pension providers is proportionate, while providing the safeguards that people expect, and that the right savings products are available.
We have heard less today about those who cannot afford to save for their retirement, but they form a substantial proportion of our population. The Government are committed to developing policies that will enable such pensioners to share in the country's rising prosperity and that tackle pensioner poverty. As a Government, we value the genuine public-private partnership and mix of provision for pensions. That has been true of all Governments; although there have been different views on how to stimulate saving and the most appropriate way of doing that, the value of that genuine public-private partnership has not, I think, ever been questioned.
State provision, and pension policy generally, must seek to maintain a fair balance between the needs of today's pensioners and those of tomorrow's pensioners. We have heard little about that balancing act that Governments must carry out. Such balances are never easy to obtain, and there are bound to be tensions between the requirements of those of working age today, in respect of incentives to save, and the amount of money and basic state provision that we give to today's pensioners. There are trade-offs, and we must ensure that we get those right.
44WH
Pensions are a long-term business. We must bear that in mind, no matter how much sound and fury there is about the particular issues of today and the past year or two, although I am not saying that those are unimportant. It would not be sensible for any Government to make panic judgments based on whether the stock market is going up or down, and that could be even more true if, as the right hon. Gentleman argued for, there were a much greater extension of funded provision. It is important to bear in mind that, although in many instances political decisions are a reaction to yesterday's or last week's headline, politicians on either side of the House should not fall into that trap with regard to pensions. I am not accusing anyone of that; I am simply saying that that must be borne in mind when we consider what we ought to do.
The right hon. Gentleman said that he approved of the 60:40 aim for 2050—the aim for more pension provision to come from private savings. He then said that some of our anti-poverty measures, which are aimed at relieving some quite bad poverty among today's pensioners, work against that aim. I do not accept that tackling pensioner poverty is a problem. We must ensure that the need for people today to have a decent retirement is balanced with the disincentive effects that adhere to increasing the basic minimum. Many Opposition Members would argue, and have argued this morning, that such disincentive effects adhere either to the minimum income guarantee or to the reward for saving that the pension credit tries to give. A balance must be struck, because there are those who have not had proper access to pensions in the past.
In the past, the pensions system was not perfect because many people such as carers and those who did not have full work records did not have proper access to it. SERPS was aimed at those who had worked for most of their lives. We have to try gently to move the entire system to benefit those who have not had that benefit in the past. We have to strike a balance between that and creating disincentives for tomorrow's pensioners.
We can argue about whether that balance is correct, but I hope that Government and Opposition Members will accept that the Government are not moving away from perfection. The right hon. Gentleman might believe that he approached perfection when he was in office, but many people were not able to have or to save for proper pensions through no fault of their own. We have to strike a proper balance, and I shall not apologise for trying to deal with pensioner poverty.
The right hon. Gentleman and some of his hon. Friends raised the issue of advance corporation tax credit. [Interruption.] My hon. Friend the Member for Glasgow, Anniesland (John Robertson) also raised that point. Those Opposition Members, and even my hon. Friend, do not always mention that a cut in corporation tax at least partially offset the cost of the removal of the credit, which is worth about £3.5 billion a year to companies, and that such company pension schemes also have tax privileges worth £14 billion a year. It was not just an annual removal of £5 billion because there were offsetting issues.
The hon. Member for Henley (Mr. Johnson) raised the issue of the national insurance increases in the Budget being an additional burden. If he had read Saturday's Financial Times, he would have spotted that employer national insurance contribution increases can

45WH
actually encourage private pension provision because they make contributing to occupational pensions, on which one does not pay national insurance, more attractive than pay. It can be argued that that is an incentive effect.
The right hon. Member for Hitchin and Harpenden argued that the state pension scheme is not sustainable with the additions that the Government are putting on to it to alleviate poverty, but we do not accept that. Even after the introduction of the pension credit, which will benefit half of all pensioner households, state spending on pensions will rise by only about 1 per cent. of GDP over a significant period of time. We think that that is sustainable, and so does PricewaterhouseCoopers, which also had a look at sustainability.
The right hon. Gentleman talked in some detail about replacing the basic state pension with funded provision, but one danger is that the state is always the last resort if funded provision goes wrong. It would be difficult for a Government to say, "Here is your rebate for your funded pension. Go and get your own pension pot. If it all goes wrong do not come back to us." There is no doubt that pensioners would come back. It is not possible for the state completely to get out of pensions.
I know that the right hon. Gentleman and others are looking at that, but a man retiring now would have to build up a pension pot of more than £60,000 to get a pension equivalent to the basic state pension, which, it is important to remember, is not all of the state's provision. A woman would need more than £80,000. The rebate for a 16-year-old man would need to be £623 a year. For a woman of that age it would have to be more than £1,000. To fund those rebates would require an increase in national insurance contributions of between 2 and 3 per cent. It seems that the Conservative party is against increasing national insurance contributions at the moment, but it may look at that and think that it is good value for money. There is, however, no cost-free way in which to do that.
Staying contracted into the basic state pension provides the certainty of a particular retirement provision. If people had contracted out in the past two years, for example, and seen the stock market fall as it has, they might have become worried about their basic state pension equivalent. There is a guarantee from the Government at present that one will at least receive the pay-as-you-go provision. If that were contracted out, could the state really say, "Go away, we will let you starve"? I am not sure that it could.
Mr. Lilley: I offered the guarantee that if things went wrong, people could come back to the state. That is what the guarantee means.
Maria Eagle: That would put the cost through the roof. I do not have a figure for it, but if there were a major stock market crash, we might end up with a large bill. I do not have much time to say more.
Miss Anne Begg (in the Chair): Order. In fact, we have no time at all.

Drugs (Sport)
12.30 pm
Mr. Gareth R. Thomas: I am grateful for the opportunity to raise several issues concerning drugs in sport.
Sport has become very big business during the past 20 years, with growing media attention and, crucially, the possibility of growing rewards for the top performers. With those increasing rewards, new ways have been promoted to enhance an athlete's performance.
In my teens, I enjoyed watching Daley Thompson win decathlon after decathlon. I always remember him explaining that he trained on Christmas day because none of his rivals would, which gave him an advantage. For someone of my athletic capabilities, a second trip to the gym a week would undoubtedly enhance my performance, although I fear it would not get me any closer to playing elite-level sport. Others with more feasible aspirations look to coaches and doctors for the extra dietary information or the additional training routine to help them gain that split-second improvement in performance to launch them on to a medal podium.
Sadly, the truth is that a few contemplate artificial improvement in performance by looking to performance-enhancing drugs, such as anabolic steroids which might be used by athletes to increase muscle size, to train harder and for longer, or to increase their competitiveness and aggression. Other examples of drugs that might be considered to raise performance are human growth hormones, which stimulate muscle and tissue growth. Competitors may misuse erythropoietin—EPO—to enhance the body's oxygen-transport capacity and therefore endurance.
As awareness of the use of drugs in sport has risen, so have the demands on sports' governing bodies to do more to keep their sport drug-free and ensure that competitions are not won by drug cheats. Drugs taken to enhance performance can also cause the athlete health problems. Anabolic steroids can stop people growing properly. They can increase the chance of liver failure, heart attack, miscarriage and stillbirth. Large, prolonged doses of human growth hormone can lead to high blood pressure or diabetes, while the misuse of EPO carries severe risks because of thickening of the blood, which can overload the heart and increase the risk of blood clots, strokes, heart attacks, and even death in the very worst cases.
There are good public health reasons, as well as the moral and ethical desire for genuine, fair competitions, for challenging the use of performance-enhancing drugs. Research by the British Medical Association published two weeks ago highlighted evidence from GP and needle-exchange surveys, alongside interviews with anabolic steroid users, suggesting that anabolic steroid use in British gyms is sufficiently commonplace to he considered a genuine public health problem. Further research is needed on the potential adverse impact on the body of anabolic steroid use.
There have been few attempts to quantify the extent of doping in elite-level sport. As far back as 1989, two inquiries by committees in the American and Australian Senates highlighted the use of performance-enhancing drugs by athletes in their respective countries. The

47WH
Canadian Government established their own commission of inquiry in 1990, concluding, sadly, that the problem of the use of performance-enhancing drugs was widespread not only in Canada but throughout the world.
The BMA report went on to note the comments of Anthony Miller, then research director at the Institute of Sports Medicine in Australia, who talked of an epidemic of drugs use in sport, and added that the problem was worsening. A British survey that is worth referring to is one that was carried out by the former Sports Council in 1996, which showed that almost 50 per cent. of British athletes thought that drug use in international competition in their sport was a problem. The figure rose to more than 80 per cent. for track and field athletes.
Fortunately, there have been few cases in the UK of sports people testing positive for performance-enhancing drugs, but we cannot afford to relax our continuing efforts to rid national and international sport of such drugs. It is certainly true that Britain has led the way in tackling the issue. The UK Sport anti-doping unit serves as a model for other countries to build on in their efforts to combat the use of performance-enhancing drugs. The publication and widespread acceptance of a national anti-doping policy, which was strongly backed by Ministers, is extremely positive, as has been the strong Government support for the establishment and operation of the World Anti-Doping Agency.
However, several issues still need to be addressed. There are genuine concerns about the number of drug tests that Britain can fund. The regulation and labelling of supplements is an issue that is worthy of further work. Funding for research into performance-enhancing drugs and legislation governing the role and supply of such drugs by coaches and doctors are required, and there is a continuing need for consistency among governing bodies in responding to positive drugs tests. In addition, the planned testing regime in the run-up to and during the Commonwealth games needs to be reviewed.
UK Sport's capacity for drugs testing has remained largely unchanged since 1991. The number of tests has not significantly increased. Without a substantial increase in funding, the number of drug tests may decrease, given their rising sophistication. For example, blood tests cost £1,000 each, yet they will soon be an accepted and normal procedure for rooting out cheats using EPO in international sport. Such tests are particularly important for endurance events. It was good to see EPO testing during the recent London marathon. The need for such testing was highlighted by the commendable protests of our own Paula Radcliffe at the world athletics championships in August last year.
I recognise that plans are in place for an extensive programme of drug testing, including pre-games testing, but I urge my right hon. Friend the Minister to make representations to the Commonwealth Games Federation to provide for a testing regime that includes blood testing for EPO before and during the games. Perhaps additional lottery funding could be released to help close the gap and to make the testing regime even more robust.
48WH
Aside from the Commonwealth games, many other countries now undertake a far greater number of drug tests to reinforce their anti-doping rules. For example, I understand that there were 6,100 tests in the UK in 2000. That compares with 8,900 in France, 14,200 in Germany and 11,300 in Italy. In terms of hard cash, the UK spent £1.2 million on its drugs-testing regime in 2000. France spent the equivalent of £1.7 million, Germany £1.4 million and Italy £2.8 million.
The cost of drugs tests at UK and European laboratories has become a concern to many of our national sports bodies, which understandably want to maintain a robust drugs-testing regime but face financial pressures. The danger is that drugs tests will be conducted in laboratories that are significantly distant from the UK. I understand that the laboratory at King's college is the only one in the UK that is able to carry out tests to the level required. Clearly, a further facility is essential if we are to drive down the costs of drugs tests without compromising the process.
In 1999, there was a small but significant increase in the number of drugs tests showing nandrolone use. Reports emerged of a similar pattern from samples collected in other countries. Concern has focused on supplements used by athletes. Several athletes have successfully defended themselves over positive drugs test findings by citing worries about nandrolone in supplements.
A nandrolone review committee, which reported in January 2000 at the behest of UK Sport, gave strong warnings about the dangers of using supplements that may be incorrectly or inadequately labelled. Furthermore, research conducted in Aberdeen under the guidance of Professor Ron Maughan suggested a link between supplements and the presence of nandrolone metabolites. The link was confirmed through an analysis of bottles of supplements at the International Olympic Committee laboratory in Cologne.
The possibility of inadequate labelling or cross-contamination of supplements puts athletes at risk of using prohibited substances unknowingly, and it inevitably makes disciplinary investigations more difficult. Current rules rightly make athletes ultimately responsible for substances found in their urine or bloodstream. That position is crucial if the vast majority of athletes who are honest are to be protected from those who want to cheat by administering banned substances. Nevertheless, it is not impossible to envisage a situation in which an athlete is the innocent victim of a positive drugs test after having used supplements that, unknown to him or her, contained nandrolone metabolites.
Concerns were raised in the UK following the successful prosecution of the food supplements company Maximuscle in October last year for incorrectly labelling one of its supplements. Meetings have been held with the supplements industry, without real positive progress, to try to improve the standard of information available about products, and to achieve a higher standard of quality assurance. The industry does not want to pay for a quality assurance system. Given the level of advertising for food supplements, and the lack of rigour applied to labelling by some companies in the industry—both factors have been cited in recent positive drugs tests—it is entirely right that sports governing bodies should advise against the use of any

49WH
supplements. However, given the potential health implications of performance-enhancing drugs, we cannot leave it at that.
I am not a fan of regulating business for its own sake, but the supplements industry must recognise that it needs to change. It is unacceptable that rogue companies continue to peddle products containing banned substances without proper labelling. Action must be taken. Independent verification of labelling and company activity is essential. Perhaps the Food Standards Agency or the Medicines Control Agency could be given responsibility to monitor that area. In its report two weeks ago, the British Medical Association recommended that all dietary supplements should be clearly labelled to prevent sports people from inadvertently ingesting banned substances.
In addition, there needs to be consideration of the role of coaches and doctors in the supply of performance-enhancing drugs to athletes. Their role was thrown into graphic relief by the investigations into widespread drug use during the Tour de France. A French study in the 1997 British Journal of Sports Medicine reported that 61 per cent. of those surveyed who were drug-using sports people cited their GP as the source of the drugs. There are several genuine and proper reasons why doctors would prescribe drugs to athletes, but that survey shows that the responsibility for the use of performance-enhancing drugs needs to be widened in some cases.
In Britain, the General Medical Council already has clear guidelines about a doctor's role, but that is not the case for the equivalent bodies among our European neighbours. Perhaps the World Anti-Doping Agency should consider that. Given the importance of the coach and doctor in the team that supports an athlete in elite sports, we must ensure that we have the legislative means to hold to account a coach or doctor who helps, and possibly pressures, an athlete into taking a performance-enhancing drug.
Further consideration must be given to policing the supply of performance-enhancing drugs. A monitoring company, Envisional, has highlighted the easy availability of prescription drugs over the internet. In the UK, the Medicines Control Agency has a responsibility, but the international nature of the internet makes policing more difficult. The easy availability over the internet of banned substances such as EPO has also been highlighted.
Concern has been expressed about the extent to which sport's governing bodies are consistent in how they enforce rules on performance-enhancing drugs. There are inconsistencies between governing bodies about whether the UK governing body or the relevant international federation has jurisdiction to hear the dispute. There are also inconsistencies between sports about the length of penalty imposed for the same breach of the same IOC medical code. There are even inconsistencies within sports between the constitution of the UK governing body and its international federation over the hearing of drugs issues. I commend UK Sport's attempts to link funding to whether a sport's governing body is willing to adopt rules and procedures on performance-enhancing drugs that are consistent throughout the UK. That work needs to be accelerated.
50WH
I know that the Government take the issue seriously, and I commend the work of UK Sport's anti-doping unit. Nevertheless, I hope that the Minister will address the need for further action in several of the areas that I highlighted.
12.46 pm
The Minister for Sport (Mr. Richard Caborn): I congratulate my hon. Friend the Member for Harrow, West (Mr. Thomas) on having secured this afternoon's debate. It is an important issue. We all recognise that the use of drugs in sport is, ultimately, cheating and undermines that sport's integrity. Indeed, the use of drugs probably tarnishes sport more than any other problem. As my hon. Friend said, the Government, and I as Minister for Sport, are committed to the battle against doping in sport. I congratulate him on the work that he has done before the debate and with which he will continue. We shall join many others to ensure that doping is driven out of sport.
We regard the problem as a worldwide matter and are keen to work at national, European and international levels to combat it. As Minister for Sport, I am committed to ensuring a drugs-free environment in sport and to putting in place appropriate policies and procedures to achieve that, and I take on board my hon. Friend's points.
In the United Kingdom, we are committed to achieving a partnership between sport and the Government to tackle the problem. The UK is recognised as one of those at the forefront of the fight against the use of drugs in sport. Nationally, the Government fund the UK anti-doping agency, UK Sport, to implement the Government's programme to combat the use of drugs in sport.
We spend more than £1.3 million a year on ensuring the programme's quality and comprehensiveness. In 2000–01, UK Sport undertook 5,406 tests, of which only 110, or 2 per cent., showed positive results. The programme included 404 events organised by national governing bodies, and 156 international and European sports federation events.
UK Sport's anti-doping programme includes in and out-of-competition testing of athletes, the development of a national policy framework and provision of education and information services for athletes and sports governing bodies. The anti-doping programme is rightly regarded as one of the best in the world and is something of which we can be proud.
The need to respond to major changes in sport, such as the increasing availability of supplements, to which my hon. Friend referred, the use of blood testing and concerns about the adequacy and inconsistency of disciplinary procedures, recently added fresh urgency to the work of UK Sport in the field. Recent examples include setting up the nandrolone review, the continued development of blood-testing protocols and finalising national anti-doping policy. Earlier this year, I was proud to be present when UK Sport launched the new national anti-doping policy. I join my hon. Friend in thanking the staff of UK Sport for the professional and effective job that they are doing. The organisation is recognised around the world as one of the leaders in the field, and I want to ensure that that continues.
UK Sport has worked with national governing bodies to develop a new policy that promotes greater consistency in procedures and decision making on anti-

51WH
doping across governing bodies and sports federations. It also sets out clear minimum standards that need to be achieved, with clear lines of responsibility for those involved at each stage of the anti-doping process. That includes independent review, disciplinary and appeal procedures. In short, the new policy provides a consistent and transparent system that benefits athletes, governing bodies and sports fans alike.
The national anti-doping policy is not the only new initiative being undertaken by UK Sport. The drug information database is the latest in a range of information tools available to sport. It provides athletes with online up-to-the-minute information about which medications in the UK contain prohibited substances and which contain substances that are allowed under the regulations of sport. It is a very comprehensive and effective user-friendly instrument that can be used by all those involved in sport. Athletes can check the medicine that they are thinking of taking anywhere in the world using the internet. Pharmacists and doctors will be able to help athletes select the right kind of medication to allow them to continue to train and compete without worrying about whether they are likely to fail a test. That is another example of real help that the Government are giving to athletes through UK Sport.
The problem of doping is not only damaging the image and the value of sport; drug misuse can be harmful to an athlete's health, as well as to those close to the athlete—family, friends, colleagues and fellow competitors. Athletes can also be influential role models for young people. If we are not careful, the sporting world will become tarnished, and we will start to lose the potency of that influence with young people. The behaviour of top athletes can have a significant impact on young people as they aspire to emulate their sporting heroes. We need to take action on a number of fronts to address the problem.
Part of UK Sport's anti-doping remit is to ensure the development of extensive information and education programmes for athletes, coaches, officials, administrators and parents on anti-doping. Through these schemes the Government can ensure that, throughout the UK, athletes and people who provide them with support are aware of the dangers involved in drug abuse. Next week, I shall be opening the British Medical Association's conference on drugs in sport. The conference, which aims to build on the excellent work already being undertaken in the UK, will focus on the roles and responsibilities of health care professionals in tackling drug abuse at all levels in sport.
Health care professionals can play a key role in ensuring that sport in the UK takes place in a drug-free environment. By alerting those who work in the medical profession to the risks involved in using drugs in sport, we can also draw attention to the wider public health implications of drug abuse in our society. Under the Misuse of Drugs Act 1971, the UK has strict control over the supply of substances such as steroids. It is an offence to produce, supply, possess with intent to supply and import or export with intent to supply such substances. Those controls are aimed at suppliers and traffickers who profit from selling and supplying those substances to not only sportsmen and women but others such as bodybuilders.
52WH
Lessons learned from sport and the action taken can help to address drug problems faced elsewhere in our society. Indeed, only recently, in response to concerns in sport—similar to those that my hon. Friend raises—and to advice from the Advisory Council on the Misuse of Drugs, the Home Office took action to extend the list of substances controlled under the 1971 Act. Those are all substances that are included on the International Olympic Committee list of prohibited substances and include nandrolone- related metabolites.
Of course, many substances prohibited in sport are in use in wider society for perfectly legitimate reasons, including, for example, supplements. That means that it would be impossible to make the supply of all substances regarded as performance-enhancing a criminal offence. Doping in sport is prohibited because it is cheating. Substances are prohibited because they give those who take them an unfair advantage over competitors. The criteria applied to determine what substances are prohibited relate to fairness in competition rather than health or crime. It is important to keep that in perspective when examining what we are trying to achieve. Sometimes, in the international arena, and especially in the European arena, we see the issue of drugs in sport used to make pronouncements about the ills of society. However, we are focused on making sport free of performance-enhancing drugs.
The only practical way of dealing with the use of banned substances is through the action of sport itself. Contravening anti-doping regulations is a case of professional misconduct in sport, and the decision to ban an athlete as a result of a positive drug test is a matter for sport's national governing bodies and international federations. Criminalising what is professional misconduct is not, therefore, an effective option. In the United Kingdom, we favour a non-legislative approach focusing on the standardisation of doping lists, sanctions and procedures within the sporting framework. The national anti-doping policy gives sport the focus to put in place procedures that are consistent, accountable and transparent. Sport itself must continue to own the problem of drug misuse in sport.
Of course, doping is a global rather than national problem that requires co-ordinated action at an international level. The UK has played a role in that action. We proudly achieved ISO certification under the international standard for doping controls in 1997—the first country to do so—and we were one of the first signatories to the international anti-doping agreement.
The Government have been fully supportive of the development of the World Anti-Doping Agency since its inception in 1999. The establishment of WADA has moved international co-operation against doping to a new level and given added impetus to our work. The Government firmly believe that WADA is the appropriate body to promote co-operation in this field.
I recently attended a meeting in Brussels between European Union Ministers, the President of the IOC, Jacques Rogge, and WADA officials, where we discussed how best to move forward the agenda. In informal discussions, the IOC president was keen to ensure that the UK was fully on board in relation to involvement in WADA as well as the IOC because of the expertise and respect that we have in the field. It was pleasing to hear him say that. I can confirm that, along

53WH
with other national Governments, the UK will contribute to WADA's core costs in 2002. As my hon. Friend probably knows, there has been some wrangling about that issue. We believed that procrastination on the funding regime was unacceptable, so we took unilateral action. I am pleased to see that many others have now followed in the funding of WADA from Europe.
We regard the development of WADA's anti-doping code as the most appropriate way in which governing bodies and federations can be aligned to internationally agreed standards on anti-doping. The adoption of the code will be a significant step towards collective action and will provide a powerful weapon in the worldwide fight against doping in sport. Without the inconsistency and inability to regulate and set standards internationally, WADA can now move towards development of the code. If it is achieved, a significant step forward will have been taken and we will have a basis on which to start policing cheating and fraud in sport globally. Indeed, the national anti-doping policy has been developed mindful of the international standards and procedures endorsed by WADA. We are one of the first countries to produce a national policy that fully complies with international standards on doping control.
The initiatives serve to highlight the fact that the UK continues to lead the way in the fight against the use of drugs in sport. However, we cannot be complacent and are determined to ensure that the UK anti-doping system, while retaining the respect of competitors, also retains the support of members of the public, who need to be assured that the results that they see in sport are genuine and fair.
I shall write to my hon. Friend on any of the specific points that I might have missed. Final decisions have not been made on the Commonwealth; they rest with the Commonwealth Games Federation, and we shall be talking to those involved. I have no doubt that, in time-honoured fashion, my hon. Friend will challenge us again in written questions. Again, I thank him for bringing to our attention an important subject that needs to be aired from time to time.

Hospital Hygiene
1 pm
Dr. Vincent Cable: I am grateful for the opportunity to debate this subject. The methicillin-resistant staphylococcus aureus or MRSA problem and the broader matter of hospital hygiene are strongly connected. It is appropriate that, in a week when we have been discussing the substantial and extremely welcome increase in resources for the NHS, we should discuss also how to reduce the great waste of resources—the waste of nursing staff and of beds, and the human and financial costs of infection.
My interest in the subject goes back five years to shortly after I was elected to Parliament. A case was raised with me within weeks of May 1997 by a distressed constituent. She was a middle-aged cancer patient being given chemotherapy at her local general hospital, who contracted MRSA in an outbreak of the infection. Her treatment had to be interrupted, and given the severity of her condition, it could have been a life-threatening problem. I did not then appreciate the fact that infection control in hospitals was a major problem. I was brought up to believe that hospitals were inherently clean places, where antiseptics and disinfectants were widely used. However, as a result of the publicity that resulted from that case, I realised that it was indeed a major problem, both locally and nationally.
I appreciate that a great deal has happened on the policy front during the intervening five years. I do not want to rehearse all the Government intervention and the study since then, but I know of the Public Accounts Committee's report and the Government's response and of the helpful work of the National Audit Office, with its follow-up report. The Government have taken a series of welcome initiatives, including mandatory reporting, the setting of standards for hospital trusts and the introduction of guidelines—and have made the cash available. The tranches of £30 million that have gone to hospitals, including my local hospital, will make a welcome contribution. I acknowledge that, and I am not using this debate as an opportunity for bashing the Government for not doing things. I appreciate that policy has been progressing.
I am prompted to raise the subject again because of local experience and a feeling in local hospitals that the problem remains serious. I have two local district general hospitals in my constituency, the West Middlesex and the Kingston. The latter has a generally good record on infection control, and the preliminary statistics on MRSA show that it is pretty low in the national league tables. However, a few weeks ago I learned from a constituent that his mother, Mrs. Tarrant, had died of MRSA during an outbreak at the Kingston hospital.
The West Middlesex hospital has altogether more serious problems. It was the subject of a scathing report by a Government inspection team on hygiene grounds a few months ago, and almost weekly I hear anecdotes and receive letters describing the problems of hospital infection that derive from bad practice on the wards. I shall describe a couple of cases. In a letter to the hospital

55WH
general manager, one gentleman makes a series of complaints about the hospital. He states:
"You make no comment about the poor level of infection control on the ward that extended to urinals not being emptied, one of which eventually disintegrated, and to soiled dressings being left around the ward, including on beds."
Another local resident, who belongs to the community health council, recently observed, in the course of passing through the hospital, an event that was eloquent testimony in itself. A ward was isolated because of MRSA, with a clear sign saying "Barrier Nursing Do Not Enter". A cleaner promptly walked through the barrier with a cloth and cleaned all the tables in the isolated ward, then took the cloth and used it in other wards. I am reluctant to be too damning and critical about that hospital; it has serious problems and is being rebuilt under the private finance initiative, which I welcome. I hope that a lot of its problems, which stem from antiquated, badly designed fittings will be solved. Nevertheless, I represent two district general hospitals in which bad reports of hygiene, specifically of MRSA, surface weekly. That is what prompted me to seek this debate.
I do not need to rehearse all the arguments about MRSA and hospital hygiene. They have been set out in the NAO reports. Let me just return to the dichotomy between the two issues. MRSA is a distinct problem caused by the overuse of antibiotics and the building up of resistance. It is something that most of us carry around on our skins, not inherently an infection. However, in a hospital it can be very damaging. A great deal more is now known about it. The House of Lords report on resistance to antibiotics has advanced the science considerably and data have emerged revealing the extent to which MRSA is a severe problem, particularly in London. Statistics for the quarter April to June 2001 show that five London hospitals—including some of the most highly regarded such as Guy's and St. Thomas's—had more than 20 incidents of MRSA in that three-month period.
We now know more about MRSA. It is a serious problem in the general area of hospital hygiene. Why is it a problem? First, it is because of its sheer scale. Recent figures have indicated that one in 11 patients acquires an infection in hospital. I believe that statistics are now emerging—partly prompted by the Government's emphasis on monitoring—that suggest that a third of cases have hitherto been undetected, so the real figure is substantially more than one in 11. That translates into about 100,000 cases a year. Some 5,000 deaths a year are directly attributable to hospital-acquired infection. There are bound to be problems of interpretation: one of the complicating factors is that patients are, by definition, vulnerable. However, hospital-acquired infections kill more people a year than, for example, car accidents.
There is a big cost to the NHS as a result of people having long stays in hospital and operations being cancelled. The NAO estimates that it is about £1 billion a year, some of which is unavoidable, because vulnerable people will acquire infections even in conditions of perfect hygiene. However, between 15 and 30 per cent. of that £1 billion could be saved if practice was improved.
56WH
I should like to ask three groups of questions about where some of the Government's current initiatives might be leading, and about follow-up. The first is about the system of surveillance and monitoring, the second about how national standards operate and can be improved, and the third about resources.
I appreciate that the Government now require hospital trusts to report on internal infections, and specifically on MRSA. I believe that a surveillance exercise was due to be published this month. Is it now available, and if so, in what form? I have two specific questions about monitoring and surveillance. First, is it now possible to get meaningful and useful data on post-discharge infections, which are an important element of the story? Secondly, is it now possible, as a result of international work on the issue, to make meaningful comparisons between British standards and those overseas? I have heard conflicting views in that regard, and while some people say that British hospitals are the dirtiest in Europe, others suggest that they are about in the middle among developed countries. I have no objective basis on which to judge which of those propositions is true, and it would be helpful to know what analysis is being done and what conclusions are emerging from it.
The Government made a big breakthrough a couple of years ago, when they set national standards and tried to push them through at the hospital level, but I have several questions about that. First, do we have any indication whether some of the basic principles of hygiene are being applied in hospitals? I was shocked by comments in the National Audit Office report, which referred in slightly arch language to "a culture of noncompliance" as regards handwashing. The fact that doctors, in particular, rarely wash their hands struck me as rather shocking, perhaps because I was brought up in a traditional way. Clearly, patients and staff are not following elementary practices, and that is responsible for much cross-infection. It would be interesting to know how far the attitude to such practices is changing.
A more important question under the heading of basic hygiene is what happens under the Government's standards in cases of blatant non-compliance. What would happen if my local general hospital was given a caning by an inspection team? Clearly, it would make an effort to improve, but what sanctions could be put in place? Have any been used, and how does the Minister envisage that happening?
On institutional arrangements, the Government's response to the Public Accounts Committee acknowledges that there has been a big improvement in the involvement of chief executives, for example, in infection-control debates in hospitals, which is clearly an advance. Is there, however, any indication that infection-control teams are much more systematically involved in key decisions in hospitals? I noted from one report that a quarter of all infection-control teams are not allowed to have an input into cleaning and catering contracts, which are the heart of the transmission mechanism.
Is there any indication that the structure and organisation of wards is being changed in the way that the Royal College of Nursing strongly advocated? There is a belief that senior sisters should be unambiguously in charge of all activities on their wards, including

57WH
cleaning, that responsibility should not be fragmented and that someone should have overall charge of standards.
Finally, under the general heading of standards, what is the Government's assessment of the utility of screening? I know that it is not a straightforward matter and that costs are involved in screening staff and patients to discover whether they are carrying infections when they come into hospitals. However, is there a potential advantage in terms of cost-effectiveness in extending screening programmes, given the severity of the problem and the associated costs?
My last set of questions relates to resources. I appreciate that more resources are going into the NHS in general and that there has been a specific allocation of funding for infection control, which is welcome. Do the Government have a view on the optimum level of infection-control nursing, and how close are we to achieving it? Will the big new injection of cash into the NHS help with that? Is the issue specifically highlighted, and are the Government trying to achieve a particular target?
On bed occupancy, one reason for the high instance of hospital infection is that beds are being used constantly. There is a rapid turnover in patients with little time for a break. Sheets are changed, but infections can hang around. With less pressure on beds it should be possible to reduce some of the infections associated with intensive use. Have the Government formulated a view on how their big investment programme will affect bed occupancy levels? Is it expected that bed occupancy levels will fall, building some spare capacity into the system? Will the £30 million programme, which has now run for two financial years, continue, and what lessons have been learned from it?
This issue is not politically contentious. I am aware that progress is being made, but it is a matter of real concern. I continue to be shocked, as do many members of the public, to encounter major examples of very poor hygiene and malpractice in public hospitals, and I want to be assured that the Government are on top of the issue.
1.15 pm
The Parliamentary Under-Secretary of State for Health (Yvette Cooper): I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this debate and choosing to discuss hospital hygiene and MRSA. I know that he has a long-standing interest in these important issues and has raised them before. I welcome his approach to the debate, and many of his points, and I will try to respond to his questions. Some of them I can respond to now—they concern systems that are already in place—and others concern issues that are currently being considered as part of a programme of developing work. I will try to explain where we are on the matters about which he is concerned.
As the hon. Gentleman rightly said, hospital-acquired infection in general and MRSA in particular are serious problems for the NHS. These infections associated with health care are difficult and expensive to treat and directly affect patients, causing acute and chronic illness, pain, anxiety, depression, longer stays in hospital—with implications for NHS resources—and sometimes death. They have serious consequences in terms of health care.
58WH
For those reasons, we need to tackle this serious problem. There is much ongoing work to improve the current arrangements for surveillance, infection control, monitoring and action to reduce hospital-acquired infection. As the hon. Gentleman pointed out, the National Audit Office has examined the issue. It estimates that the potential avoidable costs are around £150 million annually. We should treat those figures with caution, because they are based on a study performed in just one hospital and then extrapolated across the NHS, but the issue clearly has a serious impact.
Some hospital-acquired infection is generally viewed as an inevitable consequence of many serious illnesses being treated under one roof and the vulnerability, for different reasons, of patients to infection. However, it is also widely accepted that some of the hospital-acquired infection currently occurring is avoidable and could be prevented through strengthened arrangements. That is what we should aim for.
The hon. Gentleman is right that many people carry the staphylococcus aureus bacterium without any harm being caused. The serious problem arises when methicillin-resistant staphylococcus aureus—MRSA—spreads rapidly in a hospital environment where patients are seriously ill and susceptible to infection and where the use of catheters and other invasive devices allows the bacterium an easy route of entry.
Also, rates of MRSA vary across different NHS trusts. The statistics can be affected by the nature of the patients and conditions being treated. Trusts with more vulnerable patients and those that undertake more invasive and high-risk specialist care are more susceptible to higher rates of MRSA. However, that does not entirely explain the wide variation in levels of MRSA across the country.
What action needs to be taken about the problem? The hon. Gentleman grouped his concerns around surveillance, national standards and what happens when there is non-compliance. He is right in saying that extensive work is being done on surveillance. We should not underestimate how important good surveillance is for serious action to reduce MRSA and hospital-acquired infection. The fundamental element of any strategy to improve the situation is to collect proper data about the level of MRSA and the surveillance operating throughout the country. Since April last year, we have required all acute trusts to collect data on MRSA bloodstream infections. When the hon. Gentleman referred to information to be published in April 2002, I think that he was referring to those data, which were published in February.
The information allows trusts to identify problem areas for more detailed investigation and allows national monitoring and action to tackle the problem. It also provides a base line against which we can measure improvements in hospital-acquired infection. That is the first phase of a compulsory national surveillance system for a broad range of infections associated with health care. It is more comprehensive than systems used in other developed countries and provides us with important information.

59WH
The hon. Gentleman referred to international comparisons, which are in place, but the United Kingdom system is the more extensive, and that has an impact on international comparisons. I am willing to write to him further on the subject.
The data need to be interpreted cautiously because the reasons why there are different levels of MRSA can vary. Trusts may import MRSA from other hospitals, and the many patients who move through tertiary centres as they go between hospitals may bring with them MRSA and other problems. That problem may have affected the London teaching hospitals to which the hon. Gentleman referred.
We have established a programme of work to improve the surveillance system, which involves extending compulsory surveillance and carrying out alert organism surveillance to collect information routinely on specified micro-organisms causing MRSA and other infections. We also intend to monitor adverse patient incidents due to infections, such as outbreaks of salmonella food poisoning in hospitals, and link that to the National Patient Safety Agency. Other systems are in an early stage of development for surgical site surveillance in conjunction with orthopaedic surgeons and surveillance of infection occurring after patients are discharged from hospitals. The hon. Gentleman referred to that post-discharge issue, which is complicated and difficult but important to measure. We shall consider, too, levels of MRSA and health care-acquired infection in the community, which is more difficult to measure than the levels in hospitals but represents an important part of the picture.
The hon. Gentleman asked about national standards. There are two relevant sets of standards. First, the controls assurance standard on infection control requires chief executives to ensure that effective policies to tackle hospital-acquired infection are in place and are implemented. The standard requires acute NHS trusts to ensure that people work in a managed environment in which the risk of infection to patients, staff and visitors is minimised. There are 15 supporting criteria for hospital infection control, including the work of infection-control teams and their supervision by local infection-control committees that incorporate local consultants in communicable disease control.
Secondly, all hospitals were required to introduce national standards of cleanliness for the NHS by February and to implement a regular programme of monitoring to ensure that the standards are met. All trusts with in-patients in England received guidelines on implementing the standards, which will be added to the performance assessment framework in July. The NHS plan recognises that hospital cleanliness is a major issue for patients, their families and visitors. That is why the clean hospitals programme was launched. We should recognise that there is not a strict relationship between hospital cleanliness and MRSA. Of course, it is an important consideration, but there are many other complicating factors involved.
To support those standards, extra investment is being put into the NHS. The hon. Gentleman referred in particular to investment to support the clean hospitals programme and to improve the patient environment—
60WH
£62 million over two years is being provided. Another £200 million is being provided to improve standards of decontamination. In addition, there has been broader investment in the NHS. Substantial additional investment has already been made over the past couple of years, but the extra investment set out in the Budget will provide for an increase in the capacity of the NHS.
The hon. Gentleman asked about capacity. Local flexibility is necessary, because trusts need to be responsive to the nature of the problems that they confront. The capacity that they need will depend, in part, on the level of their problems, but also on the sort of hospital or unit involved. It is important to provide national guidelines on infection control and hospital-acquired infection. Although a considerable number of guidelines are already in place, and work undertaking infection-control audits against standards of national guidelines is being carried out to update local guidelines for hospital infection control, it is important to take stock now of the work that has gone on so far and to consider what further action needs to be taken. That is where much of the work being carried out as part of the chief medical officer's strategy for combating infectious diseases comes in, and I shall say a little more about that in a moment.
The hon. Gentleman also asked what happens in cases of non-compliance, where hospitals are clearly struggling with MRSA or doing badly compared with similar hospitals. Action is already under way, but we need to review that as part of the chief medical officer's strategy. Regional directors of public health play an important role. They have already been instrumental in collecting and collating data from trusts in their regions, and they arrange peer review visits, in conjunction with the regional epidemiologist, regional meetings with infection-control teams and support from regional infection-control nurses. Where MRSA rates give cause for concern, regional directors of public health will work with a trust to review its infection control arrangements.
A range of enhanced initiatives are under way, which include reviewing the adequacy of infection-control resources; raising awareness of health care-associated infections and control measures in hospitals, reinforced by training and education of staff; undertaking infection-control audits; updating local guidelines; reinforcing specific measures, such as handwashing, which the hon. Gentleman mentioned; promoting ward cleanliness initiatives and training; equipping wards for better handwashing and cleaning; and assessing the degree of importation of MRSA from the community. One of the 10 responsibilities of modern matrons is to prevent hospital-acquired infection by ensuring that infection-control measures are properly applied by all staff.
Much work is already being done, but there is an extra enforcement and inspection role to be undertaken by the Commission for Health Improvement and by the new Commission for Healthcare Audit and Inspection. We have tried independently to review and monitor the uptake of the national controls assurance standards for hospital-acquired infection during the routine reviews of an organisation's system and processes for monitoring and improving services. Obviously, the work done in that inspection process feeds into the national enforcement system and the wider programme.

61WH
As I said, there is forward-looking work to be done, as part of the chief medical officer's strategy for combating infectious diseases, "Getting Ahead of the Curve", published in January 2002. The chief medical officer has identified a small number of priority areas including health care-associated infection and antimicrobial resistance, and said that we need particular additional action in those areas. New updated action plans are currently being drawn up for health care-associated infection and three other areas, which will be ready by the end of the year. For each action, they will set out who is responsible, who is to implement it, what the output will be and in what time scale it will happen. That important further action builds on the progress that we have made so far on an important matter that is of concern to people throughout the country.

Regeneration (Great Yarmouth)
1.30 pm
Mr. Anthony D. Wright: I am extremely grateful for the opportunity to raise the effect that some of the Government's regeneration initiatives have had on my constituency, Many colleagues have been genuinely surprised when I have raised in the House some of the problems that Great Yarmouth has faced for several years—high unemployment, high benefit dependency and other indices of an area of deprivation.
Those problems were highlighted by the national index of multiple deprivation drawn up in 1998 and 2000 by the Department for Environment, Transport and the Regions. That study examined 8,414 borough council wards in England using the following indicators: income deprivation; employment deprivation; health deprivation; education, schools and training deprivation; housing deprivation and geographical access to services. Great Yarmouth came out as the fifth most deprived in the whole United Kingdom.
In 1996, when I was leader of my local authority, we commissioned a report that highlighted how bad the situation was, based not only on benefit dependency, but on figures that came to light such as average household income—which, at about £8,000 per annum, was about 50 per cent. of the regional average—and our higher than average mortality rate among young and old alike. We knew then that we had to take action, and began the long journey to improve the lives of the people living in and around Great Yarmouth. Recognising the need for a plan of what we had to do to create a more prosperous borough, we decided on a document entitled "2020 Vision" to give us a vision of our borough in the year 2020.
That is just a rough snapshot of where we were five or six years ago. We have come a long way since then, not least because of the way in which everyone has pulled together. The public and private sectors and voluntary and charitable organisations joined in a partnership approach and the Government recognised that something had to be done to eliminate poverty. Regeneration can mean different things to different people. It includes regenerating industries—manufacturing and tourism—regenerating our education system and health service and regenerating in people the hope that they can improve their lives, by giving them opportunities that they have not had before. In Great Yarmouth, we are well on the way to achieving all that, but I stress that we still have a long way to go.
I have mentioned "2020 Vision", our blueprint for the future. It was not long into my first term as a Member of Parliament that our first major project was realised—our new gas-fired power station. That project was first applied for in early 1996, but it was not until late 1997 that the Minister for Energy gave the necessary permission to proceed. On the face of it, that might seem an easy decision but it was not because we were in the period of a gas moratorium. Permission was given because of the problems that we faced. The prospect of the largest single inward investment that we had seen, more than £160 million, with the resulting economic benefits, was enough for the Minister for Energy to accept the need for that investment, despite the moratorium.

63WH
The second major project to aid our regeneration was the reinstatement of the dualling of the A47 Acle straight and an acceptance of the need to construct a new road connecting the A47 to the A 149. That project had been removed from the previous Administration's roads programme back in 1996. Although the Government had been persuaded of the need to carry out a study as part of the roads review, the consultants unfortunately came to the conclusion that, on balance, the environmental issues were more important than safety and economic problems. That report had to go to the regional planning body, which, thankfully, agreed with our views and asked for a further study to take the economic case more fully into account. I impress on my hon. Friend the Minister that the overwhelming view of the vast majority of my constituents, both businesses and individuals, is that, on safety and economic grounds, that stretch of the road should be dualled.
The third, and most ambitious, project is a new outer harbour. The project has been around for several years, but since the formation of a new company, Eastport, under the stewardship of Richard Jewson and with support from Great Yarmouth, the county and the region, it has never been closer to coming to fruition. The fact that the regional development agency has agreed to invest in the project, subject to certain conditions being met, has given it a welcome boost.
Another welcome boost came last week, when in a written answer the Minister gave permission to Powergen Renewables to construct a large offshore wind farm just off our coast on Scroby sandbank. Alongside our oil and gas connections, that gives us justification to consider ourselves as the centre for energy in the southern North sea.
Before I move on to the direct Government help that we have received, the final project that I want to mention is our new business park. That project, which started as a vision about 15 years ago, has now been brought to reality by a partnership approach between the East of England Development Agency and many local businesses. The first building, an innovation centre, is due to be opened in May and will be of significant help to both existing and new businesses. It would not have been possible without regional help and will help enormously in our quest to encourage new, high-tech industry to set up in Great Yarmouth.
Everything about which I have just spoken, with the exception of the roads issue, was started under a Labour administration in Great Yarmouth, but equally everything has also received some assistance from Government sources, but only since 1997. As I said earlier, regeneration can come in different ways, and I want to discuss some Government-inspired projects that have been up and running for a little while, as well as some that are just starting.
Because of our social and economic problems, we have had significant help from the Government in the past few years. That help has included single regeneration budget funding, which, when all the schemes are finished, will have brought in about £12 million of Government awards. Those awards will cover areas throughout the borough, but mainly those that needed the regeneration most, such as South Denes,
64WH
Cobholm and Lichfield. In addition, we have been awarded £4.2 million for our sure start project, and our latest award was from the neighbourhood renewal fund for £4.5 million, with a further £500,000 from the community empowerment fund and the community chest.
Our new education action zone is the largest nationwide, and has been awarded £3.75 million to cover 33 schools. In its first year, we are already seeing a great deal of progress, with improvements in 70 per cent. of the key stages and increased attendance levels with a marked reduction in exclusion. There has been further funding through assisted area status, European Union objective 2 and 3 status, East of England Development Agency investment programmes, English Partnerships investment programmes and lottery support.
The story does not end there because much more is going on. There are two new resource centres, which cost approximately £1 million each. A new museum, which cost £4.25 million, recording Great Yarmouth's fishing industry, has opened at a former fish curing works. A new Nelson museum has opened on our historic quayside, and new community centres are planned for the future.
When I began the debate, I painted a picture that was far from rosy when I, along with Labour, came into office in 1997. Five years on, I have highlighted areas in which the Government have helped in the regeneration of Great Yarmouth after years of neglect. In the few areas that I have covered, the Government have granted more than £30 million of direct or individual help, but there is even more going on with bids from our seafront partnership for European money, which would not be available without the help of my hon. Friend the Member for Rossendale and Darwen (Janet Anderson), who visited Great Yarmouth when she was the Minister responsible for tourism and pushed hard for the inclusion of seaside resorts under the objective 2 review.
Finally, one area that has been extremely helpful to the local authority is the extra Government money in grants to offset council tax. During the final four years of Tory Government, we had an average £50,000 a year increase in our external funding, whereas for the past four years my authority has had on average an extra £250,000 a year. That has allowed the new Tory council, which was elected two years ago, to reap benefits that were not available to the Labour council. The Government have certainly responded to a lot of our needs.
I must also point out to my hon. Friend the Minister that I have received one criticism—there was only one—of the need to form fill and to have checks made on certain funding and spending for, for example, one individual. My colleague states that in the document on community empowered funding grants, the Government said that they must be prepared to take a risk on empowering local partnerships to deliver. His plea to them is to take the risk that they said they would take, and be prepared to empower those who they wanted to empower.
One area that groups in Great Yarmouth are trying to address is the acute skills shortage. If we are to attract inward investment, we need skilled personnel. I know of one scheme at the Oriel high school in Great Yarmouth.

65WH
It has applied for engineering status but is still waiting for the response. I have been involved in the education action zone attempts to encourage youngsters in the Great Yarmouth area to gain engineering skills. An organisation called ProTrain is working very hard to attract youngsters—male and female, I hasten to add—to engineering, which is a skill for the future.
I took a great deal of encouragement from a letter that appeared last week in my local paper, the Great Yarmouth Mercury. It gives a perception of the Great Yarmouth economy:
"Figures show that unemployment in Great Yarmouth is falling and has been for the last two years. The February figures have again showed a marked improvement with 633 fewer unemployed compared to last year. The future looks bright for further economic development with several projects set to create more full time sustainable employment in the coming year … Overall the economic prospects for Yarmouth are very positive and we should be looking to the future with confidence … Yarmouth will enjoy a period of invigorated and expanding prosperity leading to even lower unemployment and a continuing reduction in deprivation."
Those comments came from the Conservative economic development member on Great Yarmouth borough council, so I can only take that as a ringing endorsement of the Labour Government's policies.
I have tried to demonstrate the benefits that have resulted from the Government's many regeneration initiatives in Great Yarmouth, which are working well. However, as I said, there is still much more to do. We must create employment opportunities. We in Great Yarmouth are able to deliver. All that we ask is that the Government continue to help our area so that we can enjoy the economic benefits experienced in other parts of the UK.
1.41 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble): I congratulate my hon. Friend the Member for Great Yarmouth (Mr. Wright) on securing the debate. I am aware of the challenges that Great Yarmouth faces. My hon. Friend is an outstanding advocate for his constituency and has left no stone unturned in making sure that the Government understand the challenges, and the success that the area has had in achieving its goals. I am pleased to hear about the most recent developments, particularly the wind farm and the business park. It is also excellent to hear that the funds and programmes that the Government have designed and have targeted at the kind of problems that his area experiences are getting to the communities and making a difference, and it is especially good to hear validation from people who are not normally our political allies.
However, my hon. Friend is right to say that much remains to be done. The index of local deprivation 2000 confirmed that Great Yarmouth is the 43rd most deprived local authority area in England. On intensity and depth of deprivation, the borough scored the fifth highest level in the country. It is the only seaside town in the top 50 disadvantaged boroughs, although we recognise that other seaside towns have difficulties because of the particular economic pressures on them. The index confirmed what we knew before its publication.
66WH
Before setting out what the Government are doing for Great Yarmouth and the effect of the initiatives, I want to draw attention to, and commend, what is happening locally. I know that the borough and other partners have long been aware of the issues that had to be addressed. Even before ID 2000, they had established a social strategy, coming under the framework of the "2020 Vision". Its specific aim was to bring a multi-agency response to deprivation. I am pleased that the strategy is not owned by any one agency but is a shared view of local issues signed up to by the statutory and voluntary agencies in the borough. I shall say more later about how the Government are working with and through the arrangements, but shall mention now that the way in which the borough has drawn together all the players and partners to tackle the problems is a model for towns elsewhere.
The borough has benefited considerably from the single regeneration budget. A seven-year round 2 scheme, worth £8.7 million, began in April 1996 and focused on the South Denes area. Projects are increasing the local community's awareness, involvement, and sense of pride in the area and helping to generate employment and training opportunities and to encourage business growth. Those include a nationally respected young mothers project, which enables them to gain skills and qualifications.
A seven-year round 5 local regeneration scheme, worth £2.4 million, began in April 1999 in Cobholm and Lichfield is delivering improvements to education and skills through the colleges, education service and the local Learning and Skills Council. It will also develop business opportunities and the local economy by way of business advice and the establishment of a credit union.
A four-year scheme worth £1.3 million across the whole of Great Yarmouth aims to widen participation in community-based learning, improve vocational skills and enhance employability, empower individuals, invigorate the local economy and ensure the social and cultural regeneration of the community. I am pleased to hear from my hon. Friend that the funding is having good results for his constituents because that is exactly what was intended.
One of the key issues in any regeneration project is crime and community safety. A year ago, the Prime Minister announced a street wardens programme to make streets in villages, towns and neighbourhoods cleaner, safer and better places to be. Great Yarmouth was successful in bidding for a scheme and I was pleased to hear that in the past few days, three wardens began their patrols around the town centre. There was a lot of competitive bidding for the schemes. They were very popular, and the fact that Great Yarmouth was successful was a tribute to the amount of care that went into the preparation of the bid and the quality of the scheme that was put forward. The new wardens will concentrate on preserving the physical appearance of the town centre but their uniformed presence will also help to deter anti-social behaviour and the fear of crime. That is particularly important for an area that is looking to increase its tourism trade.
In the past two years, £591,220 has been allocated for three closed circuit television projects in and around Great Yarmouth. The capital modernisation fund is

67WH
also helping small retailers. Nearly £90,000 has been allocated for the communities against drugs initiative. The Great Yarmouth crime reduction partnership has received funding to increase its capacity to reduce crime. The safer communities initiative is assisting the partnership in tackling crime and disorder to meet national crime reduction targets and other local priorities. A lot is going on in Great Yarmouth to ensure that issues concerning crime and community safety are not acting as a brake on economic regeneration, and that the creation of a safe and secure community is fostered.
In his speech in the February debate, my hon. Friend drew attention to the success of the education action zone in Great Yarmouth. Key stage 3 and 4 results were higher than the national average, attendance levels improved and 80 per cent. of pupils showed measurable progress in reading. It has also been successful in setting up partnerships with a number of local businesses for sponsorship and workplace training. The EAZ has also been awarded an extra £260,000 by the East of England Development Agency for an innovative programme for key stage 4 pupils. From April 2005, the EAZ will become an excellence cluster increasing funding to £1.8 million a year. My hon. Friend is right to highlight the need to improve the skills and education base as an essential part of the economic regeneration of his area.
My hon. Friend mentioned the sure start programme and the success that that has had in Great Yarmouth with its funding of £4.2 million until 2004. A new £500,000 nursery was opened in February. I would particularly like to commend the programme's community parent scheme. Its course has achieved accreditation to the Open college, and it has been adopted as a model of good practice by several other sure start programmes.
Wider economic funding initiatives have also been used to good effect, including for objective 2, the East of England Development Agency investment programme, English Partnerships investment programmes and lottery support.
I have time to refer to only a selection of the major initiatives that address the challenges facing Great Yarmouth. Work is being carried out in the context of the national strategy for neighbourhood renewal, which was launched by my right hon. Friend the Prime Minister in January 2001. That is a new approach, which attacks the core problems of deprived areas, such as weak economies and poor schools, harnesses the powers of all sectors to work in partnership, explicitly focuses services and resources on deprived areas, and gives local residents and community groups a central role in turning their neighbourhoods round.
To deliver mainstream services better and to involve communities are the two purposes behind local strategic partnerships that bring together residents in the public, private and voluntary sectors to identify local problems and deliver local solutions. We were pleased to announce on 28 February that the Great Yarmouth local strategic partnership—comprising the Great Yarmouth economic, environmental and social forums, overseen by the 2020 forum—has been officially
68WH
accredited. To achieve that status, it had to fulfil several key criteria. The Great Yarmouth LSP well demonstrated all those characteristics.
As I have said before, we have been struck by the strong partnership working in Great Yarmouth from the outset. The common sense of purpose bodes well for its future development and we believe that it has much to teach other LSPs. As a result, a payment of a further £1.4 million of neighbourhood renewal funding was approved for 2002–03, in addition to almost £1 million approved for 2001–02. A further £1.9 million will be available in 2003. That money can be spent in any way that will tackle deprivation in the most deprived neighbourhoods. Already, community development workers have been introduced into six key areas through the grant.
The involvement of local communities is key to making everything work. We will support, encourage and enable that in several ways, such as the community empowerment fund, the community chest and the community learning chest. Funding is being provided at £115,000 a year for three years. The community chest and community learning chest will provide small grants totalling £375,000 to formal and informal community groups to support community activity and mutual self-help.
The key task of any LSP in the context of neighbourhood renewal is to prepare a local neighbourhood renewal strategy, and Great Yarmouth LSP has submitted a framework for such a strategy. A notable factor, to which my hon. Friend referred, was the strength of input from all sectors of the community, and the fact that they have been able to forge partnerships ahead of time. That stands the town in good stead as regards attracting funding and, more importantly, delivering its strategies.
I shall deal now with specific issues that relate to economic regeneration, and particularly to two schemes, which I suspect are the most pressing for my hon. Friend's town, and on which decisions and actions have yet to be taken. He left me in no doubt, both today and on previous occasions in the House, of the local worry about the development of the Great Yarmouth outer harbour. That debate has been going on for 30 years. I know that Eastport, GO-East and the East of England Development Agency have had exhaustive discussion about bridging the gap between the full project costs and the likely commercial and local government support. It is vital that Eastport takes heed of the advice that it has been given, and, in particular, that it meets all its targets during the early preparatory stages. We cannot take it for granted that approval for any further European funding will be forthcoming, and behind all of that we must be conscious of the rules on state aid, which are becoming an increasing factor in economic regeneration.
Looking at the east coast, we cannot avoid comparison being drawn with Immingham, where Associated British Ports has secured funding on a commercial basis to underpin further expansion in ro-ro. Other ports, not only in the UK, have aspirations to expand in the same way as Great Yarmouth. There is a process to be followed and all cases will be judged on their merits. I am sure that my hon. Friend will assist

69WH
and encourage all agencies involved locally to focus on working through the process to meet the various targets required along the way.
My hon. Friend also emphasised the need for the dualling of the Acle Straight, which has been a longstanding issue. The regional planning body has endorsed most of the recommendations of the Norwich to Great Yarmouth roads-based study, and I will write to my hon. Friend as soon as any decision is taken on future investment in that road. Led by the Government office for the east of England, we are committed to strengthening collaborative working between
70WH
Government Departments to support neighbourhood renewal, thereby assisting the further regeneration of Great Yarmouth.
I congratulate my hon. Friend again on both the persistence with which he has brought up all the issues that relate to Great Yarmouth and the careful presentation that he gave of successful local achievements, the challenges that the town still faces and its strengths in work across different sectors, and the political divide to make sure that its economy delivers a better future for its people.
Question put and agreed to.
Adjourned accordingly at three minutes to Two o'clock.

TREASURY

  Higher-rate Income Tax
  Mr. Laws
  To ask the Chancellor of the Exchequer, pursuant to his answer of 18 December 2001,Official Report, column 195W, which part of Table 3.4, Inland Revenue Statistics gives the yield from the upper rate of income tax which is forecast for the years (a) 2000–01, (b) 2001–02, (c) 2002–03, (d) 2003–04 and (e) 2004–05; and if he will make a statement. [26695]

  Dawn Primarolo
  [holding answer 16 January 2002]: Available estimates of liabilities from the higher rate of income tax are given in the table.

  Higher rate tax

  £ billion

  1999–2000

  30.0

  2000–011

  33.3

  2001–021

  35.0

  2002–032

  37.0

  2003–042

  40.7

  1 Provisional

  2 Projected

  These estimates are based on the Survey of Personal Incomes and are consistent with the April 2002 Budget.

  Housing Market Renewal Fund
  Mr. McNamara
  To ask the Chancellor of the Exchequer what assessment he has made of the proposed housing market renewal fund. [51781]

  Ruth Kelly
  [holding answer 22 April 2002]: We have received a joint representation from the National Housing Federation, Key Cities Housing Group and the Northern Housing Forums, proposing a Housing Market Renewal Fund to address the serious problems experienced by areas affected by low housing demand. We are considering this and other proposals as part of the current Spending Review and our conclusions will be announced in due course.

  Motor Fuel Smuggling Duties (Northern Ireland)
  Mr. Quentin Davies
  To ask the Chancellor of the Exchequer how many Customs and Excise officers have been employed on motor fuel smuggling duties in Northern Ireland in each year since 1997. [50026]

  Mr. Boateng
  [holding answer 22 April 2002]: Up to April 2000, 25 Customs and Excise officers were employed to tackle hydrocarbon oils smuggling in Northern Ireland. The number of staff was increased to 118 in September 2000 and since January 2001 it has been
  126W
  further increased to over 160. The Government plan further enhancements to Customs efforts in this area during the course of this year.

  Insurance Premium Tax
  Mr. Willis
  To ask the Chancellor of the Exchequer how much revenue the insurance premium tax has generated since 11 September 2001. [51475]

  Ruth Kelly
  Figures for receipts of insurance premium tax are shown in the Office for National Statistics publication "Financial Statistics".

  Mr. Willis
  To ask the Chancellor of the Exchequer for what reason there is no financial allowance for those who collect insurance premium tax for the Exchequer. [51477]

  Ruth Kelly
  It has always been a general feature of taxation policy that those who are legally liable to account for tax should bear the cost of carrying out their obligations.

  Mr. Willis
  To ask the Chancellor of the Exchequer what plans he has to raise insurance premium tax. [51476]

  Ruth Kelly
  As will be clear from the Chancellor's Budget statement on 17 April, he has no current plan to raise the level of insurance premium tax.

  Departmental Functions
  Mr. Bercow
  To ask the Chancellor of the Exchequer if he will list the functions of his Department that have been(a) market tested and (b) outsourced in each of the last five years, specifying the (i) money saving and (ii) percentage saving in each case. [42991]

  Ruth Kelly
  Three functions were outsourced in the last five years, as follows:

  The Central Reprographic Unit was outsourced during 2000–01. The money saving is estimated at £70,500, and the percentage saving is estimated at 22 per cent.

  Historic file storage was outsourced in early 2000. An investment appraisal showed that the outsourcing would result in savings using various assumptions about the cost of storage space in the current Treasury accommodation.

  The Goods Inwards and Post Room were outsourced in April 2001. The estimated money saving is £46,400, and the percentage saving is estimated at 15 per cent.

  Monterrey Conference
  Dr. Tonge
  To ask the Chancellor of the Exchequer what discussions he had at the Financing for Development Conference in Mexico on debt relief with the(a) IMF, (b) World bank and (c) regional development banks. [46656]

  Mr. Boateng
  No Treasury Minister attended the Financing for Development conference, where Her Majesty's Government was represented by my right hon. Friend the Secretary of State for International Development.

  Beer and Wine
  Jane Griffiths
  To ask the Chancellor of the Exchequer what proportion of beer and wine personally imported into the UK was imported in quantities exceeding the maximum indicative limit in 2001. [50043]

  Mr. Boateng
  Figures for the revenue evaded from cross-channel passenger smuggling of beer and wine in 2001 are contained in the HM Customs and Excise document "Measuring Indirect Tax Fraud" which was published with the November 2001 pre-Budget report and a copy placed in the Library.

  The latest figures for the revenue avoided through cross-border shopping of beer and wine relate to 1999–2000 and are contained in the same document.

  Jane Griffiths
  To ask the Chancellor of the Exchequer what rate of duty pass-on he assumes to retail prices for each increase of 1p in beer duty. [50045]

  Mr. Boateng
  Calculation of the expected effects on consumer demand, resulting from changes in duty rates on excise goods, assumes that any change in duty is passed on in full to the consumer.

  Jane Griffiths
  To ask the Chancellor of the Exchequer what the Treasury Model of the economy shows to be the consequences of changes in the rate of beer duty on(a) the wider economy and (b) net revenues. [50046]

  Mr. Boateng
  Estimates of the impact of changes in the rate of beer duty are given in "Tax Ready Reckoner and Tax Reliefs" published in November 2001 by HMT, and available in the House of Commons Library.

  Jane Griffiths
  To ask the Chancellor of the Exchequer what his estimate is of the impact of each 1p change in UK duty on the volume of smuggled beer. [50047]

  Mr. Boateng
  No estimate is available.

  Jane Griffiths
  To ask the Chancellor of the Exchequer what his estimate is of the loss of revenue from other taxes on the hospitality industry consequent on each 1p rise in beer duty. [50048]

  Mr. Boateng
  No such estimate has been made.

  Illegal Meat
  Adam Price
  To ask the Chancellor of the Exchequer what tonnage of illegal meat has been confiscated by UK Customs over the last 10 years. [50452]

  Mr. Boateng
  Central records of Customs seizures of meat and meat products are available only from 2000. Records for calendar years 2000 and 2001 show:

  2000: 2.88 metric tonnes seized

  2001: 9.17 metric tonnes seized.

  There were in addition in 2001 136 seizures where the quantity was not recorded by weight.

  Climate Change Levy
  Mr. Stunell
  To ask the Chancellor of the Exchequer how much revenue has been raised in the first full year of the climate change levy; and how this revenue has been allocated. [50449]
  128W
  Mr. Boateng
  Climate change levy receipts up to 31 March 2002 are £551 million. However, CCL was introduced on 1 April 2001, and revenue was not received until July 2001. Due to start-up effects, therefore, 2001–02 is not a full year.

  Revenue is recycled to business through a 0.3 percentage point reduction in employers' national insurance contributions. The levy package also includes a targeted programme of support measures for businesses investing in energy-saving technologies and practices. The levy package as a whole is intended to be broadly revenue neutral.

  European Union Funds
  Mr. Wray
  To ask the Chancellor of the Exchequer what the UK contribution to European Union funds has been for each of the past five years; and how much the UK has received in its rebate in each of those years. [51239]

  Ruth Kelly
  The UK's gross contribution to the EC budget in 2000–01 and 2001–02 was £10.6 billion and £9.2 billion respectively; the UK abatement for these years was £2.2 billion and £4.4 billion respectively. Details of the UK's gross contribution to the EC budget together with the value of the UK abatement for earlier years can be found in Table 14a of the Departmental Report of the Chancellor of the Exchequer's Departments (Cm 5116) published in April 2001.

  Premium Bonds
  Mr. David
  To ask the Chancellor of the Exchequer what were the(a) amounts and (b) number of premium bond cash prizes in the past three years. [51540]

  Ruth Kelly
  The figures are as follows:

  Financial year

  Total number of prizes

  Total value of prizes (£)

  1999–2000

  6,924,869

  447,366,000

  2000–01

  8,464,046

  593,308,400

  2001–02

  8,674,844

  552,367,550

  Gross total for 3 years

  24,063,759

  1,593,041,950

  BCCI
  Mr. Vaz
  To ask the Chancellor of the Exchequer how much his Department has paid Freshfields Solicitors in each year since 1991 concerning the litigation regarding BCCI. [51517]

  Ruth Kelly
  Nothing in any year.

  Financial Services Authority
  Mr. Carmichael
  To ask the Chancellor of the Exchequer what monitoring the Financial Services Authority conducts of the number of providers of financial services and investment business advice in(a) cities, (b) small towns and (c) rural areas in (i) England and Wales and (ii) Scotland. [51973]

  Ruth Kelly
  The FSA does not, as a matter of course, monitor the numbers of providers of financial services and investment business advice in(a) cities, (b) small towns and (c) rural areas. The FSA conducts appropriate

  129W
  risk-based monitoring of all financial services firms authorised by it under the Financial Services and Markets Act 2000, regardless of where these firms are located.

  Professional Body Registration
  Mr. Carmichael
  To ask the Chancellor of the Exchequer how many firms of(a) solicitors and

  31 March 1990

  31 March 1995

  31 March 2000

  The Law Society (ie England and Wales)

  7,207

  7,272

  6,591

  The Law Society of Scotland

  964

  800

  540

  The Institute of Chartered Accountants in England and Wales

  6,173

  4,964

  4,780

  The Institute of Chartered Accountants of Scotland

  536

  456

  420

  Figures for 1986 are not available, as the Act did not come into effect until 1988.

  Gibraltar
  Dr. Palmer
  To ask the Chancellor of the Exchequer what estimate he has made of the potential liability arising from the current Gibraltar pension arrangements, should these be found to be incompatible with EC law. [45173]

  Peter Hain
  I have been asked to reply.

  I refer my hon. Friend to the statement I made in the House on 16 April 2000, Official Report, column 453. I wrote to both the chair of the Public Accounts Committee and the Chief Minister of Gibraltar on 8 March to inform them that the contingent liability, in the event of a successful challenge in the European Court of Justice against Gibraltar's financial arrangements for those of pensionable age, was now estimated at £77 million. I also reminded the Chief Minister of Gibraltar that this liability would fall to the Government of Gibraltar as HMG have repeatedly warned them. I have today placed copies of both letters in the Library.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Departmental Publications
  Dr. Cable
  To ask the Secretary of State for Environment, Food and Rural Affairs how much her Department spent on information literature, advertising and campaign material in the financial years(a) 1995–96, (b) 1996–97, (c) 1997–98, (d) 1998–99, (e) 1999–2000 and (f) 2000–01; and if she will make a statement. [12272]

  Mr. Morley
  The Department has no information relating to the years in the question, as DEFRA was created in June 2001.

  Undertaking a retrospective analysis using the resources of the predecessor Departments and policy divisions would incur disproportionate costs and the resulting information could not be regarded as reliable or specific to questions about DEFRA expenditure.

  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the publications issued by her Department in each of the last four years; and what the(a) circulation, (b) cost and (c) purpose of each was. [34204]
  130W
  (b) chartered accountants in (i) Scotland and (ii) England and Wales were registered with their professional bodies for the purposes of conducting investment business under the Financial Services Act 1986 in (A) 1986, (B) 1990, (C) 1995 and (D) 2000. [51970]

  Ruth Kelly
  The number of firms certified by their recognised professional bodies are as follows:

  Mr. Morley
  As DEFRA was created in June 2001, retrospective annual data analysis is not available. Our records show that 491 publications were commissioned and produced by DEFRA at a total cost of £1,038,469.

  Print production records are held by product/job code, not by publication title; to extract and tabulate these by title, would result in a disproportionate cost.

  Circulation figures are between 500 and 180,000 depending on the target audience.

  Postage expenditure for DEFRA, which is additional to production and distribution, was £831,049.

  The purpose of these publications is to raise public awareness and to convey information to specific target audiences and stakeholder groups. They may have Government statutory significance, be an EU directive or provide guidance on one of the diverse range of subjects covered by DEFRA's ministerial responsibilities.

  Departmental Name Change
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what the cost has been to the public purse of re-branding her Department to accommodate its name change following the last General Election. [14449]

  Mr. Morley
  Our records currently show that the cost to the public purse of the re-branding of DEFRA following the last General Election was:

  £

  Design—conceptual design and graphics

  4,200.00

  Stationery—print-related expenditure

  21,804.00

  New name plaques

  4,763.00

  Miscellaneous—production, installation of signage and photographic charges

  2,977.00

  Miscellaneous—forms control costs

  950.00

  Preparation of designs—graphics manufacture and the production of signage with alternative names, which were not chosen

  14,798.00

  Note:

  All expenditure net of VAT

  Carbon Trust Board
  Mr. Alan Simpson
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list those members of the Carbon Trust board with(a) skills and (b) experience gained from (i) central Government and the

  131W
  devolved Administrations, (ii) local government, (iii) the energy supply industry, (iv) the energy efficiency industry, (v) the non-governmental sector and (vi) other sectors. [16320]

  Mr. Meacher
  The Carbon Trust is a company limited by guarantee and appointments to its board are not made by the Government.

  Currently five directors are senior civil servants in national and devolved Government with responsibility for low carbon issues. Two of these also have experience of local government issues.

  Seven other directors have direct experience of delivering energy efficiency, through the development and deployment of energy efficiency products and services and/or the management of energy budgets in private companies. Five of these directors also have energy supply experience, and four are closely involved with Government low carbon energy policy initiatives.

  The remaining five directors work or have experience in the NGO and other sectors. One is environment director of a leading business representation organisation. One was recently a director of a leading investment bank. One is a leading trade union general secretary. One was recently the chief executive of a research council. One is the head of environmental policy of a leading green NGO.

  Biographical details of all the Carbon Trust board members are available on the Carbon Trust website at www.thecarbontrust.co.uk.

  Publicity Expenditure
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the total real terms expenditure of her Department, its agencies and non-departmental public bodies on publicity in each of the years(a) 1997–98, (b) 1998–99, (c) 1999–2000, (d) 2000–01 and (e) 2001–02 (i) to date and (ii) as estimated for the whole of the present year; and if she will break these figures down to indicate expenditure on (A) advertising and (B) press and public relations. [36158]

  Mr. Morley
  As DEFRA was created on the 8 of June 2001 annual retrospective budget expenditure does not exist.

  Our records show centrally funded budget expenditure for publicity activities that included advertising, press and public relations, for the period June 2001 till March 2002 totalled £3,196,519, this excludes expenditure relating to publicity and communications support in dealing with the foot and mouth disease crisis.

  Further analysis, and information not held centrally for non-departmental public bodies, agencies and decentralised DEFRA budget expenditure could only be supplied at a disproportionate cost.

  Press and Public Relations
  Mr. Andrew Turner
  To ask the Secretary of State for Environment, Food and Rural Affairs what the annual budget for communications activities, including press, public relations, marketing and internal communications, was for her Department for each financial year from 1997–98 to 2001–02.[39918]
  132W
  Mr. Morley
  As DEFRA was created on the 8 June 2001 retrospective annual budget information is not available for the new Department. The budget for the Communications Directorate for DEFRA for 2001–02 was £10,264,900.

  Non-departmental public bodies, agencies and DEFRA directorates, where the expenditure has not been centralised have not been included, as recovering this information would be at a disproportionate cost.

  Litigation
  Mr. Andrew Turner
  To ask the Secretary of State for Environment, Food and Rural Affairs how many cases(a) her Department and (b) its agencies have defended in (i) industrial tribunals and (ii) the courts in each year since 1997; how many were concluded in their favour; and what the total cost to his Department of litigation was in each year. [41114]

  Mr. Morley
  The information requested is not available.

  Fluoride
  Mr. Syms
  To ask the Secretary of State for Environment, Food and Rural Affairs what tests have been commissioned by the Government to examine the effects of excess fluoride. [42978]

  Mr. Meacher
  So far as the effects on the aquatic environment are concerned, a review of the effect of fluoride on a range of aquatic life was carried out for the Environment Agency as part of the work in drawing up the Proposed Environmental Quality Standard for Fluoride in Water which was published in 2000. The review draws on research carried out by a range of recognized scientific laboratories. A copy has been deposited in the Library of the House.

  As for tests to examine the effects on human health, this is a matter for my right hon. Friend the Secretary of State for Health.

  Waste Disposal Authorities
  Dr. Pugh
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of how much financial support(a) Merseyside and (b) other metropolitan waste disposal authorities will receive from central Government over the next financial year. [44308]

  Mr. Meacher
  Joint Waste Disposal Authorities (JWDAs) are funded by their constituent Waste Collection Authorities, not central Government.

  However, the Government recently announced plans for the distribution of the £140 million fund for local authority waste minimisation and recycling schemes. Greater Manchester and Merseyside Metropolitan JWDAs may apply for a grant from this fund but the Government have made no estimate of how much either authority might receive, should they choose to apply.

  Environmental Protection
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps have been taken to assess the(a) environmental, (b) economic

  133W
  and (c) economic impacts of exploiting natural resources in environmentally fragile ecosystems; and what account these have taken of research on the circumstances of those areas assessed. [46556]

  Mr. Meacher
  In the appraisal of policies it is standard practice within DEFRA to consider the economic, social and environmental impacts of policy options, taking into account all relevant information. This will include the results of research relating to the area being assessed.

  The environmental effects of development proposals are assessed in accordance with the EU Environmental Impacts Assessment Directive, and the Wild Birds and Habitats Directives. Consenting regimes take account of factors shown by environmental assessment by setting conditions to monitor and mitigate possible impacts on these fragile ecosystems. Additionally, in the marine zone we are working through the OSPAR Convention to develop and pilot ecological quality objectives for threatened and fragile ecosystems.

  Farm Biodiversity Action Plans
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) since the launch of the farm biodiversity action plan, how many plans have been implemented and how much money has been spent on all plans; [48537]

  (2) what monitoring systems are in place to ensure that the farm biodiversity action plans are properly implemented; [48540]

  (3) of the farm biodiversity action plans implemented, what percentage have fully achieved all objectives within the individual plans. [48542]

  Mr. Meacher
  Farm biodiversity action plans are provided commercially by the Farming and Wildlife Advisory Group (FWAG), and are not implemented or monitored by the Department for Environment, Food and Rural Affairs. DEFRA provides financial and other support to FWAG, but not specifically for farm biodiversity action plans.

  Male Fish
  Mr. Peter Ainsworth
  To ask the Secretary of State for Environment, Food and Rural Affairs what evidence she has received that male fish in inland waterways are changing gender; and if she will make a statement. [48560]

  Margaret Beckett
  [holding answer 10 April 2002]: Results of a five-year research programme, funded by NERC, DEFRA, the water industry and the Environment Agency, were published by the agency on 26 March. This followed on from an earlier programme of research, which demonstrated the presence of feminised roach in a number of UK rivers. an apparent relationship between severity of feminisation and proportion of treated sewage effluent in rivers, and implicated natural and synthetic steroids in effluent as the causal agents.
  134W
  The results of the second phase of research can be summarised as follows:
  The continued presence of feminised male roach in several UK rivers was confirmed and reported in a second species, the gudgeon, although to a lesser extent.
  In laboratory studies, severely feminised male roach produced fewer and less viable sperm than control fish. Consequently their fertility was reduced.
  The oestrogenic (feminising) components in treated effluents include natural and synthetic steroids and alkylphenol ethoxylates and their degradation products, which may act in combination.
  Natural steroids degrade rapidly in rivers, but synthetic steroids are more persistent. Some may adsorb on to suspended or bed sediments, although levels were below the limit of detection in field studies in two rivers.
  There does not appear to be a problem with feminised male fish in every UK catchment and it does not seem to be an issue in Scotland.

  DEFRA will be discussing these findings with the Environment Agency and the water industry in order to establish any implications for sewage treatment processes.

  DEFRA, together with other Government Departments and agencies and the European chemical industry has also funded a programme of research to investigate whether endocrine disruption is occurring in marine life, including in estuaries, around the UK. This programme will conclude this spring.

  Animal Health Bill
  Mr. Peter Ainsworth
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to reintroduce measures contained in the Animal Health Bill; and if she will make a statement. [48563]

  Margaret Beckett
  [holding answer 10 April 2002]: The recent motion passed in another place has had the effect of suspending further consideration of the Animal Health Bill.

  However, the Government continues to believe that the measures contained in the Bill are necessary and are a proportionate response to the very real threat of a future outbreak of serious animal disease in this country. Were there to be another outbreak of serious animal disease in the near future we would hope to see co-operation from Opposition parties in introducing any necessary emergency powers.

  Processing and Marketing Grant
  Mr. Paice
  To ask the Secretary of State for Environment, Food and Rural Affairs when she expects to decide grants for the year 2002–03 under the Processing and Marketing Scheme. [49321]

  Mr. Morley
  Decisions on awards under the Processing and Marketing Grant are generally made quarterly. In 2002–03, this will be in May, August, November and February. Regional Managers of DEFRA's Rural Development Service, who chair the Regional Appraisal Panels at which grant awards are made, may however hold such Panels more frequently if the number of applications to be considered are sufficient to ensure an appropriate level of competition.
  135W
  Mr. Paice
  To ask the Secretary of State for Environment, Food and Rural Affairs what EU criteria there are regarding maximum and minimum grants for individual applications under the Processing and Marketing Scheme. [49322]

  Mr. Morley
  Maximum and minimum grants under the Processing and Marketing Grant were approved by the European Commission as part of national rural development programmes.

  The England Rural Development Programme states that:

  The maximum rate of grant will be 30 per cent. of the total eligible cost; There is a minimum total project cost threshold of £70,000. Projects may be of any size above this figure but there is a ceiling on the maximum grant payable of £1.2 million per project.

  Mr. Paice
  To ask the Secretary of State for Environment, Food and Rural Affairs what(a) maximum and (b) minimum amounts are payable to individual applicants under the Processing and Marketing Scheme in (i) cash terms and (ii) percentage terms. [49319]

  Mr. Morley
  The maximum cash amount payable to individual applicants under the Processing and Marketing Grant is £1.2 million on a single project.

  The rate of grant under the Processing and Marketing Grant is 30 per cent. of total eligible costs.

  There is a requirement for a minimum total project cost of £70,000. The minimum cash amount payable is dependent on the eligible costs of the project.

  Mr. Paice
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total budget was for the Processing and Marketing Scheme for(a) 1997–98, (b) 1998–99, (c) 1999–2000, (d) 2000–01, (e) 2001–02 and (f) 2002–03; and what the largest individual grant was in each year in (i) cash terms and (ii) as a percentage of the total sum of all grants. [49320]

  Mr. Morley
  The Processing and Marketing Grant was re-introduced as part of the England Rural Development Programme (ERDP) in 2000. The previous scheme was closed in England in 1996.

  A budget for the ERDP Processing and Marketing Grant was first held in 2001–02; this was £4 million. The budget for 2002–03 is £8 million.

  The largest individual grant awarded in 2001 was £314,949.21 which represents 17.12 per cent. of the total sum of all grants approved in 2001.

  The largest individual grant awarded in 2002 (to date) was £596,043 which represents 18.11 per cent. of the total sum of all grants awarded in 2002 (to date).

  Parliamentary Questions
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what the cost was to her Department of answering written parliamentary questions in 2001; and how that cost was calculated; [49111]

  (2) how many staff were involved in each of the last three years in preparing draft answers to written parliamentary questions. [49153]
  136W
  Mr. Morley
  I refer the hon. Member to the reply given to him by my right hon. friend the Leader of the House on 17 April 2002,Official Report, column 929W.

  Sunset Clauses
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs which Bills introduced by her Department in the last five years have contained sunset clauses; and what plans she has for the future use of such clauses. [49627]

  Mr. Morley
  None.

  Meat Imports
  Adam Price
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans the Government have to change the legislation permitting visitors to the United Kingdom to bring their own meat for personal consumption. [50451]

  Mr. Morley
  UK import rules permit personal imports from third countries of no more than 1 kg of meat for personal consumption. This meat must be heat treated in a hermetically sealed container (e.g. a tin). This is somewhat more restrictive than EU rules. We have raised with the European Commission the need to tighten up EU rules on personal imports and we understand the commission are preparing proposals for further discussion.

  Rural Payments Agency
  Mr. Peter Ainsworth
  To ask the Secretary of State for Environment, Food and Rural Affairs if computer systems in the Rural Payments agency are capable of handling payments in euros; and if she will make a statement. [50458]

  Margaret Beckett
  The Rural Payments agency is operating a system for paying traders in euro where requested. This system covers schemes outlined in a statement by the Minister in 1998, for example export refunds. internal market schemes and intervention. Due to the complexities of the legacy computer systems direct aid payments to farmers are not yet covered.

  The Rural Payments agency (RPA) has included euro capability in the design for its new business system. The needs of the RPA's customers will be central to the development work which we plan on completing by the end of 2004.

  Communities
  David Davis
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans her Department has for the future assessment of community vibrancy according to parish. [50616]

  Alun Michael
  We announced in the Rural White Paper that we were asking the Countryside agency to bring together, and report on in their State of the Countryside report, a set of headline indicators including one on Community vibrancy, under the theme A Vibrant Countryside. This was to measure "percentage of parishes in four categories (vibrant, active, barely active, sleeping) assessed on numbers of meeting places, voluntary and
  137W
  cultural activities, contested parish elections". The purpose of the indicator is to measure on a national basis the trend over time.

  The indicator which was first reported on in April 2001 in the State of the Countryside report is still under development and we recognise that there are a number of short-comings in the data from which it has been compiled. For instance, the indicator does not reveal the extent to which smaller settlements and parishes are able to take up community activities in neighbouring parishes. Furthermore, communities in all sizes of parish may exhibit community vibrancy in other ways than those assessed through the Rural Services Survey.

  The Countryside agency intends to look at the whole issue again, through consultation on the methodology, rather than amending individual classifications. This will include working with DEFRA and the National Association of Local Councils. The revised approach will be piloted with a number of communities or their representative bodies.

  Differing views over individual classifications is inevitable but the Countryside agency would prefer to address these in a review of the indicator rather than on a case-by-case basis. In particular, the naming convention of the groups may be re-considered to more accurately reflect the underlying information.

  Refrigerator Disposal
  Mr. Page
  To ask the Secretary of State for Environment, Food and Rural Affairs when the Government expect to announce their intentions regarding the reimbursement of the additional expenditure incurred over refrigerator disposal. [R] [50867]

  Mr. Meacher
  [holding answer 18 April 2002]: An initial statement on funding for local authorities was made on 4 December 2001. The £6 million announced then was to cover costs in 2001–02. A Government announcement on further local authority funding will be made shortly.

  Foot and Mouth
  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the reliability rate of the computer model used during the 2001 foot and mouth disease outbreak to predict the spread of the virus; what percentage of error was expected from the model; if her Department has commissioned a new computer programme for predicting disease spread; and if she will make a statement. [51457]

  Mr. Morley
  The "Interspread" model was used extensively and on a daily basis in the 2001 foot and mouth disease (FMD) outbreak. It proved to be of great value to epidemiologists as an aid to understanding the epidemic and providing advice on control. The simulation proved to be accurate in determining the ultimate size of the epidemic.
  138W
  Two other models were developed during the course of the epidemic by research groups at Imperial college and Edinburgh and Cambridge universities. Results from all models were broadly consistent.

  DEFRA is considering what future work it needs to commission into modelling of disease outbreaks and control measures and will be discussing its requirements with the relevant part of the research community next month.

  Mari Geni
  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs, pursuant to the hon. Member for Scunthorpe's, answer of 18 March 2002,Official Report, column 130, on the Mari Geni, under which sector of the United Kingdom fleet the Mari Geni was registered; and what was the total amount of (a) tonnage and (b) kilowatts the sector has been reduced by due to the decommissioning of the Mari Geni. [51445]

  Mr. Morley
  The Mari Geni was registered under the "Demersal trawls, seines and nephrops" segment. The vessel had a gross tonnage of 315 and a kilowatt power of 709.

  Fish Quotas
  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs, pursuant to her answer of 20 March 2002,Official Report, column 375, on fish quotas, if she will make a statement on the relationship between the Shetland Island Council and (a) the Shetland Development Trust and (b) the Shetland Leasing and Purchasing Company; and how much money was expended by SLAP for the purchase of fish in the years (i) 1998 (ii) 1999 (iii) 2000 and (iv) 2001. [51443]

  Mr. Morley
  The relationship between the Shetland Island Council, the Shetland Development Trust and Shetland Leasing and Property Ltd. (SLAP) was explained in the Official Journal of the European Communities for 12 February, (Official Journal, 12 February 2002, c. 38–39). As stated in my answer of 20 March 2002, Official Report, column 375. SLAP spent £2 million on quota purchase in 1998: there was no expenditure on quota purchase by SLAP in 1999, 2000 or 2001.

  Advisory Panels (Political Affiliation)
  Mr. Liddell-Grainger
  To ask the Secretary of State for Environment, Food and Rural Affairs what the political affiliations are of each member of each existing advisory panel that she appoints. [51720]

  Mr. Morley
  Ministerial appointments to DEFRA's advisory committees, which are non-departmental public bodies (NDPBs), fall within the remit of the Commissioner for Public Appointments and are covered by the OCPA Code of Practice. Applicants are not required to declare their political affiliation and appointment is on merit.

  For other bodies such as the Rural Affairs Forum for England, we did not request nor are we aware of members' political affiliations.

  Departmental Consultations
  Mr. Peter Ainsworth
  To ask the Secretary of State for Environment, Food and Rural Affairs what consultations(a) her Department is conducting and (b) have been conducted by her Department since May 2001. [51416]

  Consultation

  Deadline

  Consultation on Stage II Petrol Vapour Recovery

  9 July 2002

  Review of seed certification in England: draft seeds regulations and registration, licensing and enforcement regulation

  8 July 2002

  Consultation on draft code of recommendations for the welfare of cattle

  28 June 2002

  Economic evaluation of the Apple and Pear Research Council

  27 June 2002

  Consultation on UK Ratification of the 1998 Protocol to the 1979 Convention on Long Range Transboundary Air Pollution on Heavy Metals

  11 June 2002

  Consultation on proposed Agricultural Development Scheme

  31 May 2002

  Consultation on Public Rights of Way: Rules for procedures for Inquiries and Hearings held under The Highways Act 1980, Wildlife And Countryside Act 1981 and Town and Country Planning Act 1990

  31 May 2002

  Consultation on proposals for amendment to the Potato Industry Development Council Order 1997 (as amended)

  29 May 2002

  Review of agri-environmental schemes in England

  27 May 2002

  Consultation on Food And Environment Protection Act 1985 (Part II): Charges for Licences to Deposit Materials At Sea and Approval Of Oil Spill Treatment Products

  25 May 2002

  Consultation on proposals for an EU Directive on environmental liability

  24 May 2002

  Consultation on flood and coastal defence funding review

  17 May 2002

  Consultation on Fees for Seed Certification 2002– 03

  13 May 2002

  Consultation on fees for National Listing and Plant Breeders' Rights

  13 May 2002

  Consultation on developing a draft strategy for antimicrobial resistance in animals (VMD consultation)

  7 May 2002

  Consultation on detailed rules for determining the mesh size of fishing nets

  6 May 2002

  Consultation on an Animal Welfare Bill

  30 April 2002

  Consultation on the environmental impact of growing sugar beet

  24 April 2002

  Consultation on the Environment Agency's Objectives and Contribution to Sustainable Development

  18 April 2002

  Consultation on proposals for Regulations on Dedication of Access Land under Section 16 of the Countryside and Rights of Way Act 2000

  15 April 2002

  Consultation on the Hills Task Force Report

  See Papers

  Consultation on the Deregulation of Livestock Quotas: Review of Overgrazing Controls in England

  Suspended

  (b) Since May 2001, the Department for Environment, Food and Rural Affairs has conducted and closed the

  Consultation

  Deadline

  Consultation on proposals for Regulations on Dedication of Access Land under Section 16 of the Countryside and Rights of Way Act 2000

  15 April 2002

  Consultation on conservation of native freshwater fish stocks—amendments to the Prohibition of Keeping or Release of Live Fish (Specified Species) Order 1998

  1 April 2002

  Consultation on quinquennial review and better quality services review of the UK Register of Organic Food Standards (UKROFS)

  31 March 2002

  Consultation on draft guidance to Local Highway Authorities on the preparation of Rights of Way Improvement Plans

  28 March 2002

  Consultation on quinquennial review of Horticulture Research International (HRI)

  22 March 2002

  Consultation on proposals for regulations on the exclusion or restriction of access to open countryside and registered common land under the Countryside and Rights of Way Act 2000

  22 March 2002

  Consultation on changes to the EU sheepmeat regime

  15 March 2002

  Consultation on proposed national ambient noise strategy for England

  15 March 2002

  Consultation on managing radioactive waste safely

  12 March 2002

  Amendments to 'The Welfare of Animals (Slaughter or Killing) Regulations 1995' (Wask)

  5 March 2002

  Consultation on Better Quality Service review of the Egg Marketing Inspectorate

  28 February 2002

  Consultation outlining two options for reducing nitrate pollution of waters from agriculture in England

  28 February 2002

  Consultation on Proposals for Regulations on Provisional and Conclusive Maps under Section 11 of the Countryside and Rights of Way Act 2000

  8 February 2002

  Quality town and parish councils—consultation

  31 January 2002

  Consultation on review of Dangerous Wild Animals Act 1976

  31 January 2002

  Consultation on guidance to draft codes of practice to minimise noise

  31 January 2002

  Consultation on Distribution of the £140 million Waste Minimisation and Recycling Fund

  21 January 2002

  Consultation European Commission proposals on measures for the control and prevention of zoonoses

  5 January 2002

  Consultation on flood and coastal defence managed realignment: land purchase, compensation and payment for alternative beneficial land use

  31 December 2001

  Consultation on guidance on the role of flood and coastal defence in nature conservation in England

  31 December 2001

  Pollution Prevention and Control (England and Wales) Regulations 2000: Consultation on a Deferral of the Relevant Period for Applications of certain A2 and B Installations

  19 December 2001

  Consultation on Radioactive Substances: Proposed Natural Gas Exemption Order

  19 December 2001

  Air Quality Strategy: Particles, Benzene, Carbon Monoxide and Polycyclic Aromatic Hydrocarbons

  12 December 2001

  Milk Quotas: Consultation on new consolidated Dairy Produce Quotas Regulations

  10 December 2001

  Consultation on DEFRA voluntary Code of Practice for the prevention and control of salmonella in broiler flocks on farm

  3 December 2001

  Consultation on distribution of the Aggregates Levy Sustainability Fund

  27 November 2001

  Second consultation on Flood and Coastal Defence Funding Scheme Prioritisation System

  26 November 2001

  Consultation on implementation of Council Directive 1999/22/EC on the keeping of wild animals in zoos

  23 November 2001

  Consultation on changes to the BSE Offspring Slaughter Regulations

  22 November 2001

  Consultation on recovery and recycling targets for packaging waste in 2002

  7 November 2001

  Consultation on National Park Authorities and Broads Authority review

  2 November 2001

  Second Consultation on Implementing the Uncultivated Land and Semi-Natural Areas Provisions of the Environmental Impact Assessment Directive

  31 October 2001

  Consultation on waste management controls: proposed amendment to the duty of care

  26 October 2001

  Consultation on implementation of Council Directive 1999/31/EC on the landfill of waste (second consultation paper)

  26 October 2001

  140W
  Margaret Beckett
  [holding answer 19 April 2002]: (a) The Department for Environment, Food and Rural Affairs (DEFRA) is currently conducting 22 consultations. These consultations are listed in reverse chronological order of deadline date:

  following 44 consultations, which are listed, also in reverse chronological order:
  141W

  Consultation

  Deadline

  Consultation on proposed EC Directive on the Energy Performance of Buildings

  26 October 2001

  Consultation on Implementation of Directive 2001/18/EC on deliberate release of genetically modified organisms into the environment

  26 October 2001

  Proposals for regulations on Local Access Forums under sections 94 and 95 of the Countryside and Rights of Way Act 2000

  23 October 2001

  Consultation on draft Groundwater Protection Code for Fuel Dispensing Facilities Involving Underground Storage Tanks

  19 October 2001

  Energy Efficiency Commitment—2002–05: Consultation Proposals

  12 October 2001

  Consultation on draft Regulations on vehicular access over common land, under Section 68 of the Countryside and Rights of Way Act 2000

  1 October 2001

  Consultation on DEFRA Aim and Objectives

  28 September 2001

  Consultation on Sites of Special Scientific Interest, Appeals Regulations

  23 August 2001

  Technical Amendments to the Conservation (Natural Habitats) Regulations 1994

  23 August 2001

  Consultation on the proposed reform of the EU sheepmeat regime

  20 July 2001

  Further information on all of the consultations can be obtained from the DEFRA website www.defra.gov.uk

  State Veterinary Service
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs how many veterinarian surgeons left the State Veterinary Service in each year since 1990; what the reasons were for their departure; and what employment they left for. [51733]

  Mr. Morley
  [holding answer 22 April 2002]: Details of the numbers of veterinary surgeons leaving the State Veterinary Service and the reasons for their departure are set out in the table.

  Information about employment destination is not readily available in all cases and could be identified only at disproportionate cost.

  Number leaving SVS

  Reasons for departure

  1990

  13

  Retirement 3

  Resignation 10

  1991

  21

  Retirement 13

  Resignation 5

  Death in Service 2

  Discharged 1

  1992

  9

  Retirement 5

  Resignation 3

  Death in Service 1

  1993

  12

  Retirement 4

  Resignation 6

  Death in Service 1

  Transfer to OGD 1

  1994

  11

  Retirement 4

  Resignation 4

  Death in Service 2

  Transfer to OGD 1

  1995

  16

  Retirement 10

  Resignation 5

  Death in Service 1

  1996

  12

  Retirement 8

  Resignation 4

  1997

  8

  Retirement 3

  Resignation 3

  Death in Service 2

  1998

  13

  Retirement 8

  Resignation 3

  Death in Service 1

  Transfer to OGD 1

  1999

  6

  Retirement 3

  Resignation 3

  2000

  14

  Retirement 4

  Resignation 9

  Transfer to OGD 1

  2001

  11

  Retirement 6

  Resignation 4

  Death in Service 1

  20021

  6

  Retirement 3

  Resignation 3

  1To date

  Departmental Employment Practice
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs, pursuant to her answer of 10 April 2002,Official Report, column 271W, on gender-based assessments, if she will publish the assessment reports relating to her Department's gender, ethnic, disability and full time/part time categories completed since June 2001. [51741]

  Mr. Morley
  [holding answer 23 April 2002]: The Department for Environment, Food and Rural Affairs was created on 9 June 2001. The new Department brings together staff previously employed in parts of both DETR and the Home Office with the Ministry of Agriculture, Fisheries and Food. Robust data on staff in post in DEFRA were not available until recently. An assessment was undertaken on 15 March 2002 and the resulting data are included in the table. This position reflects the staff profile for permanent staff in the core-Department on that date.

  Total

  Men

  Number

  3,701

  Percentage

  52

  Women

  Number

  3,483

  Percentage

  48

  Part time

  Number

  703

  Percentage

  10

  Ethnic minority1

  Number

  384

  Percentage

  5

  Disabled

  Number

  406

  Percentage

  6

  1 Due to current ethnic re-survey, ethnicity data are incomplete and should therefore be interpreted with care. The figures in the table are based on a 70 per cent. response rate. Estimated overall margin of error for staff in post currently = ±1.5 per cent. Data exclude casual staff.

  Performance Targets
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent assessment she has made of whether the PSA target to ensure that secondary treatment is provided for all sewage discharges from towns with a population of at least 15,000 by 31 March will be met. [47218]
  143W
  Mr. Morley
  [holding answer 10 April 2002]: As at 31 March 2002, 536 (99 per cent.) of waste water treatment plants in England serving communities greater than 15.000 population (or its equivalent) met this target. We will continue to monitor that secondary treatment for the few remaining discharges is provided as soon as practicable.

  Rio Earth Summit (Implementation)
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps have been taken by the Government since the Rio Earth Summit in 1992 to(a) set goals on environmental protection and (b) improve eco-efficiency and resource productivity relating to minerals and metal issues; and what these (i) goals and (ii) improvements have been. [44342]

  Mr. Wilson
  I have been asked to reply.

  The Government have been working with others within the EU to set emissions standards which will protect the environment but also strike an appropriate balance with the economic and social aspects of sustainable development.

  More specifically, as they are dominated by multinationals, we have been actively encouraging the minerals and metals industries to work globally to establish their sustainable development credentials. Work on indicators to measure performance are being developed.

  Forests
  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she has taken at international level to increase forest protection and improve forest management; and if she will make a statement. [51237]

  Hilary Benn
  I have been asked to reply.

  The UK has a long record of contributing to the shaping of international forest policy. This takes place at the level of expert working groups, as well as intergovernmental negotiations such as: the United Nations Forum on Forests; the Convention on Biological Diversity; and the G8 Action Programme on Forests. All of these processes seek to improve the management and protection of forests.

  The UK leads on tackling illegal logging within the G8. We have made progress domestically, with the introduction of the Government's new timber procurement policy, and internationally, through collaborative work with a number of key timber exporting countries. The Memorandum of Understanding singed between Indonesia and UK on 18 April is the first of its kind and signals a real determination to deal with this problem.

  DFID's bilateral programmes and DEFRA's Darwin Initiative provide support to forest management and protection in many developing countries.

NORTHERN IRELAND

  Entertainment Costs
  Mr. Burns
  To ask the Secretary of State for Northern Ireland how much was spent by Ministers in his 144W
  Department on food, alcoholic and non-alcoholic drinks for official entertainment purposes in each of the last five years. [47055]

  Dr. John Reid
  As the information you have requested is not held centrally, an answer could be provided only at disproportionate cost.

  Mr. Burns
  To ask the Secretary of State for Northern Ireland how much was spent by departmental special advisers on food, alcoholic and non-alcoholic drinks for entertainment purposes in each of the last five years. [46844]

  Dr. John Reid
  As the information you have requested is not held centrally, an answer could be provided only at disproportionate cost.

  Sunset Clauses
  Mr. Bercow
  To ask the Secretary of State for Northern Ireland which Bills introduced by his Department in the last five years have contained sunset clauses; and what plans he has for the future use of such clauses. [49619]

  Dr. John Reid
  Over the past five years two Bills introduced by my Department contained sunset clauses: the Northern Ireland Arms Decommissioning Act 1997 and the Northern Ireland Arms Decommissioning (Amendment) Act 2002. Each contains a provision limiting the maximum duration of the amnesty period under a decommissioning scheme.

  I shall continue to use such clauses where it is appropriate to do so.

  Better Quality Services Initiative
  Mr. Bercow
  To ask the Secretary of State for Northern Ireland which of the services of his Department have not been reviewed under the Better Quality Services Initiative; and when they will be reviewed. [50308]

  Dr. John Reid
  The Northern Ireland Office's executive services are delivered by the Department's three agencies—the NI Prison Service, Compensation Agency and Forensic Science Northern Ireland. The requirements of the Better Quality Services Initiative were addressed in the terms of reference of recent quinquennial reviews of each of the agencies. No definite timetable has yet been determined for the other, mainly policy, functions of the Department, which will be considered as appropriate as the extent of the NIO's future role becomes clearer.

  Smart Card Technology
  Mr. Laurence Robertson
  To ask the Secretary of State for Northern Ireland if he will make a statement on the use of smart card technology in his Department and in the areas for which it is responsible; and what discussions he has had with private companies about the use of smart card technology within his Department. [50484]

  Dr. John Reid
  Electronic access control systems, many of which operate by smart cards, are extensively used in all premises occupied by my Department. Suppliers in the private sector are consulted as necessary.

SCOTLAND

  Foot and Mouth
  Mr. Liddell-Grainger
  To ask the Secretary of State for Scotland if she will make a statement on the recovery of Scotland's rural economy from last year's outbreak of foot and mouth disease. [41471]

  Mr. Foulkes
  2002 will continue to present challenges but I am confident that the FMD recovery measures implemented by the Scottish Executive and the sympathetic approach of the Inland Revenue and Customs and Excise will help the rural economy in Scotland withstand the effects of the outbreak.

  Child Poverty
  Mr. David Marshall
  To ask the Secretary of State for Scotland what plans she has to combat child poverty in Scotland; and if she will make a statement. [45671]

  Mr. Foulkes
  We are making good progress in tackling child poverty although we acknowledge that much still needs to be done. Full details of the measures taken, and the results achieved, can be found in the Government's annual report on tackling poverty. "Opportunity for All" and the Scottish Executive's annual Social Justice report, "A Scotland where everyone matters".

  Tackling child poverty in Scotland requires action from both Government and the Scottish Executive. The "Opportunity for All" report highlights five headline indicators of child poverty: low income, worklessness, health inequalities, educational attainment and housing. Health, education and housing are devolved matters for the Executive. The Government have taken direct action in the areas it is responsible for. On income, for example, the working families tax credit benefits over 119,000 families in Scotland. And we are currently reforming the tax credits system, to improve it further. On worklessness, we have, for example, invested in the new deal: the new deal for lone parents has helped around 14,500 people into employment.

  The Government have taken a number of other measures which help reduce child poverty including the national minimum wage; action on personal indebtedness and family-friendly employment measures to help people stay in work and meet family commitments. Tackling child poverty is, and will remain, one of our top priorities.

  Train Drivers (Strikes)
  Mrs. Lait
  To ask the Secretary of State for Scotland what steps she has taken to represent Scottish interests to the DTLR on the current strikes by train drivers. [46349]

  Mrs. Liddell
  I have regular discussions with DTLR Ministers on a wide range of matters.

  Scotland Act
  Mr. Peter Duncan
  To ask the Secretary of State for Scotland what plans she has to introduce proposals to amend the Scotland Act 1998. [47650]

  Mrs. Liddell
  I have nothing to add to the reply I gave the hon. Member on 14 March,Official Report, column 1205W.

INTERNATIONAL DEVELOPMENT

  St. Helena
  Mr. MacDougall
  To ask the Secretary of State for International Development what plans she has for the construction of an airport runway on St. Helena; and if she will make a statement. [51479]

  Hilary Benn
  I refer the hon. Member to the answer given on 21 March,Official Report, column 472W. Further discussions are expected to take place over the coming months.

  Angola
  Mr. Ivan Henderson
  To ask the Secretary of State for International Development how much aid her Department plans to make available to Angola in the next five years. [51298]

  Hilary Benn
  We are planning to spend some £4 million on humanitarian support and urban poverty reduction in Angola in the current financial year. Spending plans for subsequent years are not yet firm, but are likely to amount to at least as much as the current figure.

  Following my right hon. Friend's visit to Angola earlier this month and the positive recent developments in the Angolan peace process we are also examining the potential for a specific DFID contribution to assist in building Government capacity in support of envisaged programmes with the IMF and World bank, particularly in the area of the demobilisation of fighters and transparent financial management.

  Millennium Declaration
  Malcolm Bruce
  To ask the Secretary of State for International Development what the timetable is for implementation of the Millennium Declaration; what steps have been taken to set interim targets for 2005 and 2010; and if she will make a statement. [51922]

  Hilary Benn
  The Millennium Development Goals have a deadline of 2015 in most cases. (Eliminating gender disparity in primary and secondary education has a 2005 deadline and improving the lives of slum dwellers is a 2020 target.) Individual developing countries are being encouraged to set and monitor country-relevant interim targets within their poverty reduction strategies. DFID's PSAs/SDAs set targets based on the MDGs for the period up to 2006. Analysis of progress towards these targets is set out in DFID's Departmental Report 2002, which will be published on 24 April. Plans for the implementation of the Millennium Declaration are set out in the UN Secretary General's report "Road map towards the implementation of the UN Millennium Declaration". The UN will report annually on global progress and indicate whether we are on track to meet the goals. As well as setting development targets, the Millennium Declaration renews the commitment of member states to the fundamental principles of the UN, including freedom, equality, tolerance, human rights, peace and security and respect for the environment; and emphasises the needs of Africa and the need to strengthen the UN.

  Cheap Drugs
  Mr. Wray
  To ask the Secretary of State for International Development what discussions she has had with drug companies to ensure that their products are made available to third world countries cheaply. [52145]

  Hilary Benn
  The Working Group on Access to Medicines, which I chair, brings together UK Government, the pharmaceuticals industry and others to look at options for bringing about widespread, sustainable and predictable differential pricing of medicines at reduced prices for the poor in third world countries. The Group has met twice and made good progress in identifying the best ways to address under-investment in research and development for diseases affecting the poor. The third meeting will discuss donations, pricing and affordability issues. The Group is scheduled to complete its work and report back to the Prime Minister in July.

  In addition we have committed over £1 billion since 1997 to strengthening developing countries' health systems, building their capacity both to deliver medicines to the poor and to make effective choices about the selection and use of drugs.

  Zimbabwe
  Mr. Alan Campbell
  To ask the Secretary of State for International Development how much aid was given by her Department to Zimbabwe in the last year for which figures are available. [51537]

  Hilary Benn
  The Department for International Development provided assistance worth £16 million for Zimbabwe in 2001–02, focused on humanitarian relief including HIV/AIDS programmes.

  Israel
  Mrs. Spelman
  To ask the Secretary of State for International Development if she will make a statement on the humanitarian situation within Palestinian refugee camps; what assistance her Department provides to the refugee camps; and if she intends to increase aid to the refugee camps. [48966]

  Hilary Benn
  [pursuant to Clare Short's reply, 15 April 2002, column 730W]I apologise for the error contained in my right hon. Friend's reply. The answer should read:

  We have steadily increased our financial and technical support to UNRWA, from £6 million in 1997 to £25 million in 2001 in response to the rising needs.

CULTURE, MEDIA AND SPORT

  National Stadium
  Mr. Purchase
  To ask the Secretary of State for Culture, Media and Sport if the £20 million investment into Wembley National Stadium in addition to the £120 million Lottery grant, will be exclusively to fund transport and infrastructure improvement in the Brent area with no other Treasury moneys being made available to this project. [46190]
  148W
  Tessa Jowell
  Subject to the Football Association and Wembley National Stadium Limited meeting the conditions I set out to the House on 19 December 2001,Official Report, columns 291–93, it is the Government's intention to make up to £20 million available for non-stadium infrastructure improvements. The current intention is that the Government's grant would repay funds spent by WNSL arising from its agreement with the London borough of Brent pursuant to section 106 of the Town and Country Planning Act 1990 to contribute towards a number of specified infrastructure projects in the Brent area including improvements to stations, roads and public amenities in the area.

  The London Development Agency (LDA) has decided to commit up to £21 million to the National Stadium project subject to certain conditions. Any LDA funding will be subject to Treasury approval and will be conditional on the Football Association and WNSL meeting the Government's conditions which I set out on 19 December.

  In addition, I would draw my hon. Friend's attention to the announcement my right hon. Friend the Secretary of State for Transport, Local Government and the Regions made in response to a question from my hon. Friend the Member for Brent, North on 12 March 2002, and which appeared on 19 March 2002, Official Report, column 238W that a further £7 million would he made available from his transport provision for improvements to Wembley Park Underground station and that the Mayor of London had also agreed to make available a similar sum.

  Mr. Hoyle
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the replacement of the directors of the Wembley Board. [52136]

  Tessa Jowell
  The Football Association announced on 11 April a new board of Wembley National Stadium Ltd. The FA wished to move from a `representative' board of 12 to a smaller board of seven which contained the core skills of construction/capital project management; finance and marketing. My officials continue to co-operate closely with the FA and Sport England as the FA and WNSL work to address the issues I set out to the House on 19 December 2001,Official Report, columns 291–93.

  ITV Digital
  John Barrett
  To ask the Secretary of State for Culture, Media and Sport what discussions she has had with the Independent Television Commission concerning ITV Digital's entry into administration. [50709]

  Siobhain McDonagh
  To ask the Secretary of State for Culture, Media and Sport what discussions she has had with the Independent Television Commission concerning ITV Digital's entry into administration. [50669]

  Dr. Howells
  The Independent Television Commission has kept me closely informed about the regulatory implications of ITV Digital's decision to place the company into administration.

  Siobhain McDonagh
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made
  149W
  of the impact of ITV Digital's collapse on plans for digital television take-up in the UK. [50666]

  Dr. Howells
  Section 33 of the Broadcasting Act 1996 places a duty on my right hon. Friend the Secretary of State to keep under review the development of digital television, the availability of existing analogue services in digital form and the possession of digital receiving equipment, in order to decide when analogue services might be switched off. This review is being carried out and the results will be published in due course. The review will of course take account of the eventual outcome of the current administration of ITV Digital.

  Funding (£)

  Project

  Location

  Partners

  Total project cost

  SAZ funding

  Commonwealth Games Co-ordinator to raise awareness of the Games and deliver a local programme in line with the Games

  Allerdale

  Allerdale borough council, NW Economic and Social SRB, Learning and Skills Council

  50,000

  15,000

  Sports Co-ordinator to develop a sustainable sporting infrastructure

  Allerdale, particularly Salterbeck, Harrington, Moorclose and Westfield wards

  Impact Housing Association, Salterbeck Sports Association, Allerdale borough council, Youth Sport Trust, Women's Sport Foundation, West Lakes college, Age Concern

  112,000

  54,000

  Young people in speedway

  Allerdale—priority Northside

  Groundwork West Cumbria, Allerdale borough council, Cumbria Waste Management, Workington SRB, Workington town council, Auto Cycle Union, St. John's Ambulance, Cumbria constabulary

  18,766

  1,500

  Sport for Health Manager

  Allerdale—including Oval Centre in Salterbeck, Copeland

  Steering Group consisting of: West Cumbria CVS, Sport Action Zone, Health Action Zone, Primary Care Trust

  170,000

  230,000

  Directory of sport and physical activity in West Cumbria

  Allerdale, Copeland

  West Cumbria CVS

  19,700

  8,500

  Development of Adult Other than teacher (AOTT) programme

  Allerdale—including Harrington and Ashfield schools in Workington, Barrow, Copeland

  Cumbria Sport

  24,800

  7,500

  Community Chest for funding smaller projects particularly in rural areas

  Allerdale, Barrow, Copeland

  Allerdale borough council

  —

  7,000

  1 For two years.

  2 For two years with commitment of £45,000 for further three years.

  Film Council
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport if she will list the films funded by the Film Council for which(a) members of staff and (b) members of the board of the Council have received an on-screen credit, stating for each (i) the nature of and (ii) the reason for the credit. [51078]

  Dr. Howells
  [holding answer 18 April 2002]: The following table details the films funded by the Film Council (since 1 April 2000) for which members of staff have received an on-screen credit. It is normal practice in the film industry to provide on-screen credits which reflect the work undertaken by the various partners.

  No member of the board has received an on-screen credit through their membership of the board of the Film Council. However, some Film Council board members are employed by, or are directors of, the three lottery film franchise companies—DNA, the Film Consortium and

  Sports Action Zone
  Tony Cunningham
  To ask the Secretary of State for Culture, Media and Sport how much Sports Action Zone money has been spent in the Workington constituency since the initiation of the scheme; and on what projects. [51267]

  Mr. Caborn
  The Needs Assessment and Action Plan for the West Cumbria and Barrow Sport Action Zone identifies a range of projects which are priorities for the zone. The following relate specifically to the Workington constituency:

  Pathe Pictures Ltd. They may be credited by virtue of that role on relevant franchise films. Those titles have not been listed in the following table.

  Film title

  Reason for the credit

  Gosford Park

  Executive Producer for the Film Council's Premiere Fund

  Business Affairs

  Production Finance

  Production Executives

  Mike Bassett: England Manager

  Executive Producer

  Production Executives for the Premiere Fund

  Business Affairs

  Production Supervisor

  Bloody Sunday

  Executive Producer

  Legals Film Council for the Film Council

  Digital Television
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport what her estimate is of(a) the number

  151W
  and (b) the percentage of households in the United Kingdom that (i) receive and (ii) can receive digital television by (A) digital terrestrial, (B) digital satellite, (C) digital cable and (D) other means. [51071]

  Dr. Howells
  The information available is as follows:

  (A) Digital television take up

  (i) 5.7 million subscribers to Sky Digital.

  0.7 million subscribers to Telewest.

  1.25 million subscribers to NTL

  1.26 million subscribers to ITV Digital

  Source:

  Pay television subscriber figures December 2001
  (ii) The Office for National Statistics has available the following figures for Great Britain from the National Statistics Omnibus Survey, October 2001. These figures were released on 18 December 2001.

  Percentage

  Proportion of households in Great Britain by whether there is digital TV in the household; October 2001

  Households with digital TV

  29

  Households without digital TV

  71

  Proportion of households in Great Britain with digital TV broken down by service provider; October 2001

  Digital TV service provider

  ONDigital/ITV Digital

  11

  Sky Digital

  64

  NTL (Cable-Digital)/Telewest

  25

  Other (including other cable and terrestrial)1

  1

  1 The majority of these households had digital terrestrial TV.

  Note:

  These percentages are proportions of all households with digital TV (29 per cent. of GB households). Like all estimates from sample surveys these figures are subject to sampling variability.

  Source:

  National Statistics Omnibus Survey

  (B) Digital television coverage

  The latest figures available from the Independent Television Commission are as follows:

  (1) Digital terrestrial television (DTT) as at July 2001

  UK coverage

  Percentage population

  Number of homes

  Multiplex 1 BBC

  81

  20,261,000

  Multiplex 2, Digital 3&4

  80

  19,851,000

  Multiplex A, SDN

  78

  19,455,000

  Multiplex B, ITV Digital

  79

  19,546,000

  Multiplex C, ITV Digital

  76

  18,963,000

  Multiplex D, ITV Digital

  74

  18,441,000

  Core coverage1

  68

  16,929,000

  1 Core coverage is the ability to receive all six multiplexes

  The BBC and ITC, who are responsible for the DTT transmission network, are considering, in consultation with Government and stakeholders, how to improve coverage of all DTT multiplexes across the UK.
  (2) Digital satellite is predicted to reach about 98.2 per cent. of the UK population.
  (3) The ITC does not have figures for the number of homes passed by digital cable.
  (4) Data is not available for other technologies.

  152W
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport (1) what assessment she has made of the likelihood of digital television transmission reaching homes that are not receiving analogue reception in North Devon; and if she will make a statement; [51779]

  (2) what efforts have been made to encourage digital television switchover in areas that do not receive analogue television reception. [51780]

  Dr. Howells
  The Digital Television Action Plan, posted on www.digitaltelevision.gov.uk on 20 December, sets out a series of actions for Government and stakeholders to promote digital television and to prepare for switchover. We began a consultation on 11 December 2001 seeking views on the basis on which we should plan the use of spectrum once analogue transmissions cease, including what level of coverage would be required by terrestrial television for public service broadcasting and for pay-tv services. The consultation closed on 5 April 2002 and we are considering the responses.

  Television Reception
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport how many and what proportion of homes in North Devon, and what proportion of total geographical area in North Devon, were unable to receive(a) digital terrestrial, (b) digital satellite, (c) cable and (d) none of those television signals in each of the past seven years; and if she will make a statement. [51776]

  Dr. Howells
  The information can be provided only in the form requested at disproportionate cost. However, estimates of coverage of digital television services in North Devon, provided by the Independent Television Commission are as follows:

  (i) digital terrestrial: approximately 46,000 viewers in North Devon can receive BBC, ITV, Channel 4 and Channel 5 services from the Huntshaw Cross transmitter. 42,000 of whom are able to receive all digital terrestrial services;

  (ii) digital satellite: UK coverage is around 98 per cent. of the population; and

  (iii) cable services: these are not available in the North Devon area.

  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport how many homes are unable to receive analogue television signals in north Devon; and if she will make a statement. [51777]

  Dr. Howells
  I understand from the Independent Television Commission (ITC) that around 2,000 homes in north Devon may experience difficulty in receiving good quality analogue signals. However, the ITC also advise that, depending on the quality of individual aerial installations, reception is often possible in areas where signal strengths are low, though a degradation in picture quality may be noticeable.

  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport what plans she has to improve(a) television and (b) radio reception in north Devon; and if she will make a statement. [51778]

  Dr. Howells
  The provision of television and radio services in the UK is a matter for the BBC, the Independent Television Commission, the Radio Authority and the commercial broadcasters to determine, subject to spectrum availability.

  UK Sport (Drugs Inquiries)
  Mr. Hunter
  To ask the Secretary of State for Culture, Media and Sport (1) if she will make a statement on UK Sport's inquiry into matters relating to the life ban on participation in athletics imposed on Mr. Paul Edwards; [51420]

  (2) if she will have discussions with UK Athletics and King's college, London, on co-operation with UK Sport's inquiry into matters relating to the life ban on participation in athletics imposed on Mr. Paul Edwards. [51419]

  Mr. Caborn
  [holding answer 19 April 2002]: UK Sport is the lead agency for the Government's anti-doping programme. Its Chairman Sir Rodney Walker has met Mr. Paul Edwards and his advisers to hear his concerns regarding his life ban on participation in athletics. This resulted from a second positive drug test, which was the subject of an independent review of the evidence, a disciplinary hearing chaired by an independent QC and an appeal hearing also chaired by a QC. UK Sport are seeking further information and views from the parties concerned. It would not be appropriate for Ministers to intervene in individual doping cases.

  Mr. Hunter
  To ask the Secretary of State for Culture, Media and Sport if she will take measures to ensure that UK Sport has sufficient powers to conduct inquiries into previous rulings on the alleged use of performance-enhancing substances. [51418]

  Mr. Caborn
  [holding answer 19 April 2002]: UK Sport is the lead agency for the Government's anti-doping programme. The National Anti-Doping Policy, recently launched by UK Sport, sets out standardised procedures to ensure that governing bodies of sport have consistent, transparent and accountable anti-doping procedures. The National Anti-Doping Policy has clearly defined independent review, disciplinary and appeal processes built into it.

  Public Entertainment (Licensed Premises)
  Miss McIntosh
  To ask the Secretary of State for Culture, Media and Sport (1) what recent representations she has received concerning the licensing of premises for public entertainment; and if she will make a statement; [51752]

  (2) what plans she has to change the law on the licensing of premises for public entertainment, with regard to the number of performers allowed to perform at unlicensed premises. [51753]

  Dr. Howells
  I have received a number of representations recently from hon. Members on behalf of their constituents and from performers of live music calling for the abolition of the exemption which provides for up to two musicians to perform live in public houses without a public entertainment licence. These include a number of similar letters sent to me as part of a campaign. I have also received representations arguing that all live music should be exempt from licensing, that some licence 154W
  fees are excessive, that some conditions attached by local authorities are disproportionate and that the current licensing regime deters spontaneous singing in public houses.

  Our plans for the modernisation of the licensing regimes were set out clearly in the White Paper "Time for Reform" (Cm. 4696) published on 10 April 2000. We proposed that the current exemption from public entertainment licensing that allows two musicians to perform live in premises licensed for the sale of alcohol should end. This is because one or two live musicians using powerful microphones and amplifiers can make more noise and so generate more nuisance for local residents than three without. Alcohol and public entertainment licensing will be integrated into a single scheme. This would remove at a stroke a considerable amount of existing red tape and reduce the licensing costs which currently deter many venues from providing live music and dancing. The reforms will be implemented by means of primary legislation to be brought forward as soon as parliamentary time permits.

  Complaints
  Malcolm Bruce
  To ask the Secretary of State for Culture, Media and Sport how many complaints were registered against her Department and its predecessor Departments in(a) 1990 to 1996 and (b) 1997 to 2002; how many are current; and what proportion were (i) taken up and (ii) upheld by the parliamentary ombudsman in those periods. [51584]

  Dr. Howells
  [holding answer 22 April 2002]: The information on complaints received for the periods requested in (a) and (b) is not held centrally and could be obtained only at disproportionate cost. There is one current complaint. The number of complaints (i) taken up and (ii) upheld by the parliamentary ombudsman is contained in the Parliamentary Commissioner for Administration's annual reports for the periods specified, copies of which are available in the Library of the House.

  Playing Fields
  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport if she will publish the statistics compiled by the DCMS monitoring group on playing field sales on the number of applications reported to the group for the disposal of playing fields over the past two years. [51920]

  Mr. Caborn
  Data on playing field sales are not available. The Playing Field Monitoring Group will shortly be publishing combined figures for(a) applications from schools submitted to the Secretary of State for Education and Skills for the disposal or change of use of school playing fields (which are already published monthly), and (b) figures from Sport England giving details of planning applications affecting playing fields which have been referred to them as statutory consultee (which are already published quarterly), along with (c) relevant data from the Department of Transport, Local Government and the Regions.

PRIME MINISTER

  Staff Pay
  Mr. Bercow
  To ask the Prime Minister what the cost in 2001–02 was of the pay increase to staff in his Office; and what the cost of the forthcoming increase will be in 2002–03. [50408]

  The Prime Minister
  I refer the hon. Member to the answer given to him by my hon. Friend the Parliamentary Secretary, Cabinet Office on 22 April 2002, at column 91W.

EDUCATION AND SKILLS

  Vacant Teaching Posts
  Mrs. Laing
  To ask the Secretary of State for Education and Skills how many vacant head teacher posts there were in(a) primary schools, (b) secondary schools, (c) special schools and (d) all schools, expressed as a percentage of the total number of head teachers, in each year since 1997 broken down by local education authority. [48259]

  Mr. Timms
  [holding answer 10 April 2002]: The information requested has been placed in the Libraries.

  Individual Learning Accounts
  Mr. Boswell
  To ask the Secretary of State for Education and Skills what progress has been made in(a) reaching agreement on outstanding liability on the Department to pay Individual Learning Account contributions to training providers and (b) making such payments. [46713]

  John Healey
  My Department wrote to all registered learning providers on 31 January 2002 setting out future payment arrangements. Claims have been invited from providers for learning booked on the ILA centre system, but not confirmed by the closure of the Individual Learning Account programme on 23 November, with start dates between 1 September 2001 and 31 March 2002. Pay runs are now being made on a monthly cycle. Where we have complaints or other concerns, payments are withheld pending the outcome of validation checks and investigations.

  Since the closure of the Individual Learning Account programme on 23 November: payments of £8.16 million have been made to 2,883 registered learning providers; and payments of £15.12 million to 223 learning providers have been withheld pending results of validation checks and investigations.

  Mr. Andrew Turner
  To ask the Secretary of State for Education and Skills if she will list the ILA providers who were(a) deregistered because of failure to register between June and August 2001 and (b) deregistered (i) temporarily or (ii) permanently for non-compliance with the scheme's rules. [49879]

  John Healey
  [holding answer 15 April 2002]: It is not appropriate to list individual learning account providers as the information requested is held as commercial in confidence. The number of providers who failed to re-register between June and August 2001 is 485. Prior to
  156W
  the closure on 23 November 2001 47 providers had been suspended from the register of learning providers. None had been permanently removed from the register. From 23 November 2001, we have withheld payments from 239 providers, including 17 of those originally suspended, pending completion of validation checks and investigations into claims.

  Press Office
  Mr. Burns
  To ask the Secretary of State for Education and Skills what the total cost of running the Department's press office was in(a) 1996–97 and (b) the latest year for which figures are available. [46816]

  Mr. Ivan Lewis
  [holding answer 10 April 2002]: The annual budget for the Department for Education and Employment/Department for Education and Skills press office for 1996–97, 2000–01 and 2001–02 (spend to date) are:

  Press office budget figures

  £

  Spend to date

  Year to date

  1996–97

  n/a

  1,387,834

  2000–01

  n/a

  2,086,576

  2001–02

  1,877,4611

  n/a

  1 To date

  Curriculum Online
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what progress has been made with the Curriculum Online programme; and if she will make a statement. [48848]

  John Healey
  We are currently working on the design/build phase of the programme to prepare for the September roll-out of the Curriculum Online service. The service will offer teachers a range of educational material, both free and priced, and will give them the freedom to access the resources that best suit their teaching needs, using the advanced search technology which will feature on the portal.

  Pay Scales
  Richard Ottaway
  To ask the Secretary of State for Education and Skills if she will make a statement on the differential between upper pay scales in further and secondary education in the last three years for which records are available. [50038]

  Margaret Hodge
  The upper pay scale range for qualified teachers in secondary education over the two years for which we hold comparable details is as follows:

  2000: £25,959 to £30,018;

  2001: £26,919 to £31,128.

  The equivalent pay scale range for lecturers in further education sector colleges, as recommended by employer and employee representative bodies, over the same period is:

  2000: £24,039 to £31,771;

  2001: £24,928 to 32,947.

  157W
  Although the scales are broadly comparable, as independent corporations colleges have their own pay policies and the way in which the recommended pay scales are used will vary from college to college.

  Further and Higher Education
  Mr. Bercow
  To ask the Secretary of State for Education and Skills (1) pursuant to her answer of 3 December 2001,Official Report, column 68W, regarding planned funding of further and higher education, if the planned cash increase of £412 million in 2001–02 was all spent. [50415]

  (2) pursuant to her answer of 3 December 2001, Official Report, column 68W, regarding planned funding of further and higher education, if the planned cash increases of £268 million and £298 million for 2002–03 and 2003–04 will all be spent in the years for which they were allocated. [50416]

  Margaret Hodge
  The increase in publicly planned funding for higher education institutions in England in 2001–02 over 2000–01 is now estimated to be £396 million, the difference being due mainly to the re-classification of planned expenditure to support widening participation in that year. The accounts for 2001–02 are not yet closed and will not be finalised until November 2002.

  For the subsequent two years the increases are now expected to be £292 million and £304 million respectively. The differences are due to provision of funding for the British Academy being made via the Higher Education Funding Council for England from 2002–03, and this increase being offset by a further re-classification of planned expenditure for widening participation in those years. It is intended that these increases will be spent in the years for which they are allocated.

  Student Financial Support
  Mr. Cox
  To ask the Secretary of State for Education and Skills what plans she has to review the Government's policies on student financial support. [50544]

  Margaret Hodge
  The Government have announced a review of student finance. We are considering a number of options and a decision will be made in due course.

  Universities
  Stephen Hesford
  To ask the Secretary of State for Education and Skills what progress is being made on lifting the cap on university enrolment. [50674]

  Margaret Hodge
  My right hon. Friend the Secretary of State for Education and Skills has accepted the recommendation of the board of the Higher Education Funding Council for England (HEFCE) that they dispense with the Maximum Student Number (MaSN) control from 2002–03. It has been agreed that should the removal of the control have undesirable effects, the policies would be reconsidered. Details were announced in the HEFCE publication "Recurrent Grants for 2002–03" (March 02/11) and sent to the heads of all HEFCE-funded institutions and heads of universities in Northern Ireland.

  Medicine
  Andrew Mackinlay
  To ask the Secretary of State for Education and Skills what steps she will take to increase the number of applications to study medicine from social classes IV and V, between 1996 and 2001. [49805]

  Margaret Hodge
  [holding answer 17 April 2002]: Widening access was a criterion in the exercise to distribute new medical places, completed in 2001. Under the "Widening Participation in Medicine" programme universities were encouraged to put forward innovative proposals to support the admission of students from a broad range of social and ethnic backgrounds. The aim is to reflect the population served by the NHS.

  In addition, the Council of Heads of Medical Schools, working closely with the Commission for Racial Equality, has set up guiding principles and a model action plan for handling applications and admissions. These have been adopted by all 24 medical schools in the UK.

  This Government are committed to raising the participation rates for people from low income backgrounds. We have a £290 million programme under Excellence Challenge, to raise the aspirations of those who traditionally would not consider enter higher education. Moreover, students from lower income families do not pay tuition fees.

  As a result of these measures, between 1996 and 2001 the number of applicants from social class IV accepted on to medical courses increased by 32 per cent. and by 50 per cent. for social class V.

  Railways
  Mr. Don Foster
  To ask the Secretary of State for Education and Skills what shortages of(a) drivers, (b) signallers and (c) tracklayers exist within the railway industry; and how many vacancies there are within the industry for (i) middle managers, (ii) graduates and (iii) others. [50904]

  John Healey
  The Progress Report on "Delivering the Framework for Skills in the Rail Industry", published in December 2001 by the Strategic Rail Authority and my Department, gives the following information on skill shortages for these occupations:

  Occupational group

  Population

  Number of skill shortages

  Percentage

  Trade Occupations

  Train driving

  19,000

  855

  4.5

  Signal operation (and control)

  6,500

  1(795) 100

  1(12.3) 1.5

  Track laying and maintenance

  10,000

  1,200

  12

  First line/middle management

  18,650

  755

  4

  Graduate and professional staff

  20,000

  1,638

  8

  Other occupations

  45,050

  2—

  2—

  1 These figures have been amended since the report was published, as new information became available.

  2 Not available.

  Mr. Don Foster
  To ask the Secretary of State for Education and Skills, pursuant to her answer of 10 April 2002,Official Report, column 119W, on skills shortages in the railway industry, if she will place in the Library copies of the "Framework for Skills in the Rail Industry"

  159W
  and the progress report; to whom, and where, she announced the funding for new adult apprenticeships; and to which significant skill shortages she refers. [51034]

  John Healey
  Copies of the "Framework for Skills in the Rail Industry" and the progress report on it have been placed in the Library. I announced the funding for adult apprenticeships for the rail industry at the Transport Skills Seminar on 14 February 2002. The significant skill shortages I referred to are those for train driving, signal operation (and control), electrification and track laying and maintenance.

  EU Council of Ministers
  Mr. Salmond
  To ask the Secretary of State for Education and Skills who attended the education meeting of the EU Council of Ministers on 8 June 2001 on behalf of the UK; and who led the UK delegation. [51037]

  Margaret Hodge
  [holding answer 18 April 2002]: There was no meeting of the EU Education Council on this date. However, the UK was represented, at the meeting of 8 June 2000, by Nicol Stephen MSP. This is one of only two occasions, when a Minister from Scotland has led the UK delegation at a meeting of the EU Education Council.

  Mr. Salmond
  To ask the Secretary of State for Education and Skills who attended the education meeting of the EU Council of Ministers on 12 February 2001 on behalf of the UK; and who led the UK delegation. [51038]

  Margaret Hodge
  [holding answer 18 April 2002]: The UK was represented at the EU Education Council of 12 February 2001 by Nicol Stephen MSP. This is one of only two occasions, when a Minister from Scotland has led the UK delegation at a meeting of the EU Education Council.

  School Sports Provision (Bristol)
  Mr. Yeo
  To ask the Secretary of State for Education and Skills how many letters Ministers in her Department and officials have received about the provision of sports facilities at Cotham School, Bristol. [51074]

  John Healey
  [holding answer 18 April 2002]: The Department has received 28 letters concerning PE facilities at Cotham School in Bristol, up to and including 16 April 2002.

  Mr. Yeo
  To ask the Secretary of State for Education and Skills if she will make a statement on the provision of sports in schools in Bristol. [51077]

  John Healey
  [holding answer 18 April 2002]: Bristol city council has received a provisional allocation of just under £4.5 million from the New Opportunities Fund for the provision and enhancement of sports and physical education facilities in the 361 schools in Bristol. The New Opportunities Fund is a National Lottery distribution body, independent of central Government. The Fund has asked local education authorities to consult with other organisations in the area to determine priorities, and assesses applications to ensure that they demonstrate that there is a local need. Case managers work with LEAs to develop applications.

  Central Government cannot influence the outcome of local consultation.

  Computer Training (Over-50s)
  Mr. Wray
  To ask the Secretary of State for Education and Skills what the Government have done to help people over 50 learn how to use computers and to receive training in information technology. [51234]

  John Healey
  The Department for Education and Skills is committed to enabling people to learn later in life and to widening access to ICT skills. By the end of 2002 there will be over 6,000 UK online centres throughout England with access points in public libraries, colleges, local community centres and elsewhere. Older people are one of the key client groups for this initiative. In addition there are over 1,600 learndirect centres, which along with FE colleges and Adult and Community Learning centres, offer opportunities for older learners to improve their ICT skills.

  Learndirect
  Mr. Bercow
  To ask the Secretary of State for Education and Skills (1) what estimate she has made of the number of people resident in the Buckingham constituency who are studying a Learndirect course(a) online and (b) at a Learndirect centre; [51384]

  (2) which (a) Learndirect and (b) UK online learning centres are based in the Buckingham constituency; and if she will indicate the date they were established in each case. [51385]

  John Healey
  Just under 2,000 people in the Buckingham constituency have studied, or are studying, a learndirect course with an element of online learning. A large proportion of these will have used a learndirect centre for some or all their learning. It is, however, not currently possible to gather information on where learners are accessing their learndirect learning.

  There is a learndirect centre, a learndirect access point and a UK online centre in the Buckingham constituency:
  The Winslow Centre in Winslow, established in November 1999. This is a learndirect and a UK online centre.
  Tomorrowclub Ltd. in Aylesbury, established in January 2001. This is a learndirect access point.

  Teachers' Pay Regrading
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what estimate she has made of the cost to local education authorities in England and Wales in(a) 2002–03 and (b) 2003–04 of her regrading of teachers' pay scales. [51392]

  Mr. Timms
  In addition to the cost of the general pay award of 3.5 per cent., the 0.1 per cent. cost of the additional allowance of £33 payable to teachers in respect of the fees they are required to pay to the General Teaching Councils for England or Wales, and the cost of pay progression for performance or experience, the cost of shortening the main pay scale to six points is estimated to be 0.4 per cent. of the pay bill in 2002–03 and 1 per cent. in 2003–04.

  Complaints
  Mr. Breed
  To ask the Secretary of State for Education and Skills how many complaints were registered against her Department and its predecessor Departments in
  161W
  (a) 1990 to 1996 and (b) 1997 to 2002; how many are current; and what proportion were (i) taken up and (ii) upheld by the Parliamentary Commissioner for Administration in those periods. [51224]

  Estelle Morris
  [holding answer 19 April 2002]: The number of complaints received by the Department and its predecessor Departments for the dates stated can be provided only at disproportionate costs.

  Any and all complaints referred to the Parliamentary Ombudsman are accounted for in their annual reports, copies of which are available in the Library of the House, or on the Parliamentary Ombudsman's website www.ombudsman.org.uk/pca/document/par01/index.

  The Department's current complaints procedure complies with Standard Five of the Six Service Standards for Central Government. Complaints can be made in writing, by fax, by e-mail, by telephone or in person (by appointment). More information can he found on the DfES website at www.dfes.gov.uk/compl.shtml.

  Education (Herefordshire)
  Mr. Keetch
  To ask the Secretary of State for Education and Skills what changes the Budget of 17 April will make to the provision of education in Herefordshire. [51649]

  Mr. Timms
  My right hon. Friend the Chancellor of the Exchequer announced in the Budget an additional £85 million investment in 2002–03 in school and college buildings in England. This means that every maintained school in England, including those in Herefordshire, will receive in 2002–03 an additional allocation of about 20 per cent. of New Deal for Schools Devolved formula capital for schools. Details of changes to funding for education will be announced when the spending review has been completed in the summer.

  Asylum Seekers (Education)
  Julie Morgan
  To ask the Secretary of State for Education and Skills what provisions of race relations statutory provision apply to access to school places for children of asylum seekers. [51801]

  Mr. Ivan Lewis
  There are no specific statutory provisions that apply in respect of the access to school places for children of asylum seekers.

  Section 17 of the Race Relations Act 1976 makes it unlawful for school admission authorities to discriminate against a person (a) in the terms that it offers to admit a child to the school, (b) by refusing or deliberately omitting to accept the application for the child's admission to the school as a pupil, or (c) where the child is a pupil at a school (i) in the way that the pupil is granted access to any benefits, facilities or services or by refusing or deliberately not allowing the pupil access to them or (ii) excluding them from the school or subjecting them to other detriment.

  Section 18 of the same Act makes it unlawful for an LEA to perform any act which constitutes racial discrimination, not covered by section 17, when carrying out any of its functions under the education legislation.

  These apply to all children, including those of asylum seekers.
  162W
  Mr. Woodward
  To ask the Secretary of State for Education and Skills what assessment she has made of the availability of places in schools in the vicinity of the proposed sites for accommodation centres. [51660]

  Mr. Ivan Lewis
  No such assessment has been made. The proposed sites for the accommodation centres have not yet been decided.

  Mr. Woodward
  To ask the Secretary of State for Education and Skills whether accommodation centres which provide education for asylum seekers will be required to have a governing body. [51663]

  Mr. Ivan Lewis
  The administration and management of accommodation centres will be a matter for contractors who will run the centres. Bids to operate them have not yet been invited but contractors (once appointed) will run the centres within parameters defined by my right hon. Friend the Secretary of State.

  Mr. Woodward
  To ask the Secretary of State for Education and Skills whether children seeking asylum have the same right to education as other children in England and Wales; and if she will make a statement. [51176]

  Mr. Ivan Lewis
  [holding answer 22 April 2002]: Asylum seeking children have the same right to education as all other children in England and Wales.

  Mr. McNamara
  To ask the Secretary of State for Education and Skills which bodies have been consulted on removing some refugee children from the application of sections 13 and 14 of the Education Act 1996; and which bodies were in favour. [51782]

  Mr. Ivan Lewis
  [holding answer 22 April 2002]: The views of a number of chief education officers and interested organisations were sought informally. All those who responded asked for LEA duties in respect of asylum seeker children in accommodation centres to be clarified. The majority were not in favour of any changes to LEA duties.

  Departmental Circular
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills if she will list the circular documents that were sent by her Department to(a) primary and (b) secondary schools during March; and how many pages each document contained. [51595]

  Mr. Timms
  [holding answer 22 April 2002]: The Department sent five documents to all primary schools and eight documents to all secondary schools in March 2002 as listed below.

  Communications to primary schools

  Page numbers

  Letter from Secretary of State—performance points on the upper pay scale

  3

  Spectrum

  11

  Standards and school workload. Letter from Secretary of State +poster

  3

  Teachers Pay confirmation 2002–03

  8

  Write Here, Write Now 2002—competition/letter

  3

  163W

  Communications to secondary schools

  Page numbers

  14–19: More opportunities, Higher Standards—Young People's version of the Green Paper

  18

  Connexions Card launch

  2

  Key Stage 3 National Strategy Designing and timetabling the Key Stage 3 Curriculum

  31

  Letter from Secretary of State—performance points on the upper pay scale

  3

  Progress file to replace the National Record of Achievement

  3

  Spectrum

  11

  Standards and school workload. Letter from Secretary of State +poster

  3

  Teachers' pay confirmation 2002–03

  8

  Maintained Schools
  Mr. Brady
  To ask the Secretary of State for Education and Skills if she will list the occasions on which a maintained school applying for a change of status has been refused permission by the school organisation committee, stating the grounds for refusal in each case. [51944]

  School

  LEA

  New category

  Decision by

  Change date

  (a) Foundation

  Repton Primary

  Derbyshire

  Community

  SOC1

  1 January 2002

  (b) Community

  Churston Ferrers Grammar

  Torbay

  Foundation

  SOC1

  1 September 2001

  St. Edmund's Community

  Norfolk

  Foundation

  SOC1

  1 January 2002

  New Bradwell Combined

  Milton Keynes

  Foundation

  SOC1

  1 January 2002

  Ousedale

  Milton Keynes

  Foundation

  SOC1

  1 January 2002

  Mayfield School and College

  Redbridge

  Foundation

  Schools adjudicator

  1 January 2002

  Stanton Middle

  Milton Keynes

  Foundation

  Schools adjudicator

  1 February 2002

  Torquay Grammar School for Girls

  Torbay

  Foundation

  SOC1

  1 April 2002

  Loughton Middle

  Milton Keynes

  Foundation

  SOC1

  1 April 2002

  Southwood Middle

  Milton Keynes

  Foundation

  SOC1

  1 April 2002

  Cleeve Secondary

  Gloucestershire

  Foundation

  SOC1

  1 April 2002

  Shenley Brook End

  Milton Keynes

  Foundation

  Schools adjudicator

  1 September 2002

  Hayesfield Secondary

  Bath and north-east Somerset

  Foundation

  Schools adjudicator

  1 September 2002

  (c) Voluntary aided

  Kirkbie Kendal VA Secondary

  Cumbria

  Foundation

  SOC1

  1 September 2001

  (d) Voluntary controlled

  Springwood High

  Norfolk

  Foundation

  SOC1

  1 September 2001

  Heddington CE Primary

  Wiltshire

  Voluntary aided

  SOC1

  1 September 2001

  Zeals CE First

  Wiltshire

  Voluntary aided

  SOC1

  1 September 2001

  Verwood CE VC First

  Dorset

  Voluntary aided

  SOC1

  1 September 2001

  St. George's CE Primary, Bourton

  Dorset

  Voluntary aided

  SOC1

  1 September 2001

  Keevil CE Primary

  Wiltshire

  Voluntary aided

  SOC1

  1 January 2002

  Crockerton CE Primary

  Wiltshire

  Voluntary aided

  SOC1

  1 January 2002

  Stoborough CE First

  Dorset

  Voluntary aided

  Schools adjudicator

  1 September 2002

  1 SOC = local School Organisation Committee

  LEA Funding
  Mr. Brady
  To ask the secretary of state for Education and Skills what percentary of education funding was delegated to schools by local education
  164W
  Mr. Timms
  Only one proposal for a change of school category has been rejected by a School Organisation Committee since the change of category regulations were introduced in September 2000. Proposals published by the governing body of Olney Middle Community School, to become a Foundation School, were rejected by Milton Keynes School Organisation Committee in March this year. The Committee stated that their reason for rejection was that the proposals were not in the best interests of education in the area because they did not demonstrate how the change would support improving standards.

  In another five cases, the School Organisation Committee was not able to arrive at a unanimous decision, so the change proposals were referred to the Schools Adjudicator, who approved them.

  Mr. Brady
  To ask the Secretary of State for Education and Skills which maintained schools have changed status between(a) foundation, (b) community, (c) voluntary aided and (d) other in each year since the School Standards and Framework Act 1998 created the categories, giving the initial status and the new status in each case. [51945]

  Mr. Timms
  The following schools have changed category since the Education (Change of Category of Maintained Schools)(England) Regulations came into force on September 2000:

  authority area in the latest year for which figures are available, estimating the extra spending per pupil in each authority delegated at the highest percentage level. [52085]
  165W
  Mr. Timms
  The following table sets out, for each local education authority,(a) the percentage of the Local Schools Budget (LSB) delegated to schools in 2001–02 and (b) the additional amount per pupil which would have been delegated to schools if the LEA had delegated 90.6 per cent. of its LSB (this being the highest delegation percentage achieved by any LEA).

  Column 1

  Column 2 Increase in delegated funding if LEA had delegated at level of highest delegating authority

  LEA name

  Percentage of LSB delegated 2001–02

  £ per pupil

  Havering

  90.6

  0

  Southend-on-Sea

  90.3

  8

  Lincolnshire

  90.3

  7

  Barnet

  90.2

  11

  Sefton

  89.5

  32

  Northamptonshire

  89.0

  44

  Rotherham

  88.9

  47

  Wigan

  88.8

  50

  West Berkshire

  88.7

  53

  Trafford

  88.6

  55

  Brent

  88.5

  70

  Kingston upon Thames

  88.5

  62

  Kirklees

  88.5

  59

  Halton

  88.4

  66

  Lewisham

  88.3

  89

  Hillingdon

  88.3

  68

  Stoke-on-Trent

  88.3

  64

  Northumberland

  88.3

  62

  Redbridge

  88.2

  75

  Peterborough

  88.1

  75

  Tower Hamlets

  88.0

  115

  Bournemouth

  88.0

  74

  Sandwell

  87.9

  80

  Slough

  87.9

  87

  Cumbria

  87.8

  79

  Birmingham

  87.7

  96

  St. Helens

  87.7

  82

  Salford

  87.6

  89

  Devon

  87.6

  80

  Shropshire

  87.6

  79

  Poole

  87.5

  86

  Rochdale

  87.4

  91

  Durham

  87.4

  92

  Plymouth

  87.4

  91

  Hammersmith and Fulham

  87.3

  136

  Redcar and Cleveland

  87.3

  93

  Brighton and Hove

  87.3

  101

  West Sussex

  87.3

  93

  Wirral

  87.1

  101

  Norfolk

  87.1

  98

  Sutton

  87.0

  109

  South Tyneside

  87.0

  107

  Warrington

  87.0

  97

  Hounslow

  86.9

  126

  Solihull

  86.9

  97

  Liverpool

  86.9

  121

  Hartlepool

  86.9

  106

  East Sussex

  86.9

  107

  Southampton

  86.9

  115

  Warwickshire

  86.9

  101

  Walsall

  86.8

  108

  Wolverhampton

  86.8

  113

  North Tyneside

  86.8

  108

  North Lincolnshire

  86.8

  108

  North Yorkshire

  86.8

  108

  Suffolk

  86.8

  106

  Southwark

  86.7

  152

  Bexley

  86.7

  111

  Enfield

  86.7

  128

  Oldham

  86.7

  115

  Sunderland

  86.7

  113

  East Riding of Yorkshire

  86.7

  109

  Rutland

  86.7

  114

  Swindon

  86.7

  103

  Bury

  86.6

  106

  166W

  Column 1

  Column 2 Increase in delegated funding if LEA had delegated at level of highest delegating authority

  LEA name

  Percentage of LSB delegated 2001–02

  £ per pupil

  Barnsley

  86.6

  110

  Dorset

  86.6

  112

  Darlington

  86.6

  110

  Newham

  86.5

  145

  Richmond upon Thames

  86.5

  123

  Bradford

  86.5

  122

  Cambridgeshire

  86.5

  112

  Ealing

  86.4

  144

  Hampshire

  86.4

  117

  Portsmouth

  86.4

  130

  South Gloucestershire

  86.3

  118

  Middlesbrough

  86.3

  132

  Stockton-on-Tees

  86.3

  126

  Surrey

  86.3

  123

  Barking and Dagenham

  86.2

  145

  Knowsley

  86.2

  143

  Essex

  86.2

  130

  Medway

  86.2

  130

  Isle of Wight

  86.2

  133

  Islington

  86.1

  178

  Wandsworth

  86.1

  172

  Harrow

  86.1

  143

  Gateshead

  86.1

  137

  City of Bristol

  86.1

  139

  Wiltshire

  86.1

  118

  Wokingham

  86.1

  125

  Cheshire

  86.1

  124

  Waltham Forest

  86.0

  171

  Hertfordshire

  86.0

  132

  Coventry

  85.9

  144

  Bromley

  85.8

  140

  Calderdale

  85.8

  139

  Leeds

  85.8

  145

  City of Kingston Upon Hull

  85.8

  148

  Luton

  85.8

  147

  Cornwall

  85.8

  135

  Somerset

  85.8

  135

  Greenwich

  85.7

  190

  Westminster

  85.7

  208

  Dudley

  85.7

  131

  Sheffield

  85.7

  139

  Blackburn with Darwen

  85.7

  148

  Camden

  85.6

  218

  Croydon

  85.6

  156

  Derbyshire

  85.6

  134

  Blackpool

  85.6

  144

  Merton

  85.5

  160

  Manchester

  85.4

  175

  Newcastle upon Tyne

  85.4

  154

  North Somerset

  85.4

  137

  Lancashire

  85.4

  150

  Nottinghamshire

  85.4

  143

  Oxfordshire

  85.4

  147

  Bolton

  85.3

  148

  York

  85.3

  151

  Milton Keynes

  85.3

  156

  Staffordshire

  85.3

  138

  Windsor and Maidenhead

  85.3

  159

  Kent

  85.3

  156

  Hackney

  85.2

  219

  Tameside

  85.2

  153

  Bath & North East Somerset

  85.2

  155

  Derby

  85.2

  155

  Gloucestershire

  85.2

  147

  Haringey

  85.1

  205

  Stockport

  85.1

  146

  Bedfordshire

  85.1

  161

  Buckinghamshire

  85.1

  151

  Leicester

  85.1

  169

  Bracknell Forest

  85.1

  153

  Herefordshire

  85.1

  149

  Telford and Wrekin

  85.1

  158

  Wakefield

  85.0

  154

  North East Lincolnshire

  85.0

  164

  Leicestershire

  85.0

  148

  Reading

  85.0

  168

  167W

  Column 1

  Column 2 Increase in delegated funding if LEA had delegated at level of highest delegating authority

  LEA name

  Percentage of LSB delegated 2001–02

  £ per pupil

  Torbay

  85.0

  157

  Nottingham

  85.0

  185

  Thurrock

  84.8

  177

  Doncaster

  84.7

  169

  Lambeth

  83.7

  296

  Worcestershire

  83.7

  190

  Kensington and Chelsea

  83.6

  314

  Notes:

  1. The percentages in column 1 are those shown for each LEA in the annual comparative table published by the Department on 29 June 2001, except in the cases of Halton and Westminster, whose figures have been revised in the light of subsequent information. (Subsequent information from two other LEAs does not affect the calculation of their delegation percentages rounded to the nearest 0.1 per cent.). As in the case of the annual comparative table, the Corporation of London and the Isles of Scilly have been omitted.

  Estimated proceeds by local education authority in England arising from approved applications to dispose of school playing fields larger than a sports pitch under section 77 and Schedule 22 to the School Standards and Framework Act 1998, October 1998 to 19 April 2002

  Local education authority

  1998

  1999

  2000

  2001

  2002

  Barking and Dagenham

  —

  —

  —

  —

  —

  Barnet

  —

  —

  8,650,000

  —

  —

  Barnsley

  —

  —

  —

  —

  —

  Bath and North East Somerset

  —

  —

  —

  —

  —

  Bedfordshire

  —

  72,000

  —

  100,000

  —

  Bexley

  —

  —

  650,000

  —

  —

  Birmingham

  —

  —

  —

  900,000

  —

  Blackburn with Darwen

  —

  —

  —

  —

  —

  Blackpool

  —

  —

  450,000

  —

  —

  Bolton

  —

  800,000

  —

  —

  —

  Bournemouth

  —

  —

  —

  —

  —

  Bracknell Forest

  —

  —

  —

  —

  —

  Bradford

  —

  —

  —

  —

  —

  Brent

  —

  —

  —

  —

  —

  Brighton and Hove

  —

  —

  —

  —

  —

  Bristol

  2,200,000

  —

  —

  —

  —

  Bromley

  —

  —

  —

  —

  —

  Buckinghamshire

  —

  468,000

  4,500,000

  —

  —

  Bury

  —

  —

  —

  —

  —

  Calderdale

  1,038,000

  —

  —

  —

  —

  Cambridgeshire

  —

  —

  —

  —

  500,000

  Camden

  —

  —

  285,000

  —

  —

  Cheshire

  —

  —

  3,175,000

  308,000

  —

  County Durham

  —

  32,600

  6,520

  —

  —

  Cornwall

  —

  —

  —

  —

  —

  Coventry

  —

  —

  —

  —

  —

  Croydon

  —

  3,000,000

  —

  —

  —

  Cumbria

  —

  —

  —

  —

  —

  Darlington

  —

  —

  —

  —

  —

  Derby, City of

  —

  —

  —

  —

  —

  Derbyshire

  —

  218,000

  363,000

  —

  —

  Devon

  —

  750,000

  150,000

  —

  —

  Doncaster

  —

  —

  —

  —

  —

  Dorset

  —

  —

  —

  1,500,000

  —

  Dudley

  —

  —

  —

  —

  —

  Ealing

  —

  —

  1,000,000

  —

  —

  East Riding of Yorkshire

  —

  —

  —

  —

  —

  East Sussex

  —

  —

  —

  —

  —

  Enfield

  —

  1,200,000

  —

  —

  —

  Essex

  —

  1,000,000

  7,500,000

  4,000,000

  —

  Gateshead

  —

  —

  —

  —

  —

  Gloucestershire

  99

  —

  900,000

  —

  —

  168W
  2. The calculations underlying column 2 are based on the rounded percentages in column 1. As in column 1 and in the annual comparative table, delegated funding includes devolved Standards Fund grants, but not School Standards Grant.

  Playing Fields
  Mr. Greenway
  To ask the Secretary of State for Education and Skills how much money was realised by each local education authority from the disposal of school playing fields in each of the past five years. [51919]

  Mr. Timms
  The exact amount of money raised by each local education authority from the disposal of school playing fields is not known. In those cases where disposal has been approved, the disposal transaction, whether it is a sale, land exchange or the granting of a lease, might not yet be concluded. It is not possible, therefore, to say exactly what proceeds have been raised. Proceeds from the disposal of school playing fields can only be used to help improve sports and education facilities at maintained schools.

  The table shows the proceeds that each local education authority expects to raise from approved applications to dispose of areas equal to, or larger than, a small sports pitch of 2000m2 suitable for use by the under-10s.
  169W

  Estimated proceeds by local education authority in England arising from approved applications to dispose of school playing fields larger than a sports pitch under section 77 and Schedule 22 to the School Standards and Framework Act 1998, October 1998 to 19 April 2002

  Local education authority

  1998

  1999

  2000

  2001

  2002

  Greenwich

  —

  —

  —

  —

  —

  Hackney

  —

  —

  —

  —

  —

  Halton

  50,000

  —

  —

  —

  —

  Hammersmith and Fulham

  —

  400,000

  —

  —

  —

  Hampshire

  —

  —

  —

  10,000

  —

  Haringey

  —

  —

  —

  —

  —

  Harrow

  —

  —

  —

  —

  —

  Hartlepool

  —

  —

  —

  —

  —

  Havering

  —

  —

  6,850,000

  —

  —

  Herefordshire

  —

  —

  —

  —

  —

  Hertfordshire

  —

  10,650,000

  —

  800,000

  —

  Hillingdon

  —

  700,000

  —

  —

  —

  Hounslow

  —

  —

  —

  —

  —

  Isle of Wight

  —

  —

  —

  —

  —

  Isles of Scilly

  —

  —

  —

  —

  —

  Islington

  —

  —

  —

  —

  —

  Kensington and Chelsea

  —

  —

  —

  —

  —

  Kent

  —

  480,000

  2,585,000

  75,000

  —

  Kingston upon Hull

  —

  —

  —

  —

  —

  Kingston upon Thames

  —

  —

  —

  —

  —

  Kirklees

  —

  —

  —

  —

  —

  Knowsley

  —

  —

  —

  —

  —

  Lambeth

  —

  —

  —

  —

  —

  Lancashire

  —

  1,225,000

  —

  315,000

  —

  Leeds

  —

  650,000

  —

  720,000

  —

  Leicester, City of

  —

  —

  —

  —

  —

  Leicestershire

  —

  —

  —

  —

  3,500,000

  Lewisham

  —

  —

  —

  —

  —

  Lincolnshire

  —

  —

  —

  —

  —

  Liverpool

  —

  —

  —

  2,500,000

  —

  London, Corporation of

  —

  —

  —

  —

  —

  Luton

  —

  —

  —

  —

  —

  Manchester

  —

  —

  —

  —

  3,020,100

  Medway Towns

  —

  —

  600,000

  —

  —

  Merton

  —

  —

  —

  —

  —

  Middlesbrough

  —

  —

  —

  —

  —

  Milton Keynes

  —

  5,480,000

  —

  —

  —

  Newcastle

  —

  1,250,999

  —

  —

  —

  Newham

  —

  —

  —

  —

  —

  Norfolk

  —

  —

  181,500

  —

  —

  North East Lincolnshire

  —

  —

  —

  —

  —

  North Lincolnshire

  —

  —

  —

  —

  —

  North Somerset

  —

  —

  —

  —

  —

  North Tyneside

  —

  95,000

  —

  —

  —

  North Yorkshire

  —

  —

  —

  —

  —

  Northamptonshire

  —

  —

  —

  4,000,000

  —

  Northumberland

  —

  1,350,018

  5,158,000

  5,850

  —

  Nottingham

  —

  —

  —

  —

  —

  Nottinghamshire

  —

  —

  140,000

  —

  —

  Oldham

  —

  —

  —

  —

  —

  Oxfordshire

  —

  980,000

  3,700,000

  —

  —

  Peterborough

  —

  —

  —

  1,985,000

  —

  Plymouth

  —

  —

  —

  —

  —

  Poole

  —

  —

  —

  —

  —

  Portsmouth

  —

  —

  —

  —

  —

  Reading

  —

  —

  —

  —

  —

  Redbridge

  —

  —

  —

  —

  —

  Redcar and Cleveland

  —

  —

  —

  —

  —

  Richmond upon Thames

  —

  —

  —

  —

  —

  Rochdale

  —

  300,000

  —

  400,000

  —

  Rotherham

  —

  —

  —

  —

  —

  Rutland

  —

  —

  —

  —

  —

  Salford

  —

  —

  —

  —

  —

  Sandwell

  —

  —

  —

  —

  —

  Sefton

  —

  5,000

  —

  —

  —

  Sheffield

  —

  160,000

  —

  —

  —

  Shropshire

  —

  —

  —

  600,000

  —

  Slough

  —

  —

  278,615

  —

  —

  Solihull

  —

  —

  —

  —

  —

  Somerset

  —

  —

  —

  —

  —

  South Gloucestershire

  —

  —

  —

  —

  —

  South Tyneside

  —

  —

  —

  —

  —

  170W 171W

  Estimated proceeds by local education authority in England arising from approved applications to dispose of school playing fields larger than a sports pitch under section 77 and Schedule 22 to the School Standards and Framework Act 1998, October 1998 to 19 April 2002

  Local education authority

  1998

  1999

  2000

  2001

  2002

  Southampton

  —

  —

  —

  —

  —

  Southend on Sea

  —

  —

  —

  —

  —

  Southwark

  —

  —

  —

  —

  —

  St. Helens

  —

  —

  —

  —

  —

  Staffordshire

  —

  1,700,000

  —

  —

  —

  Stockport

  —

  —

  —

  —

  —

  Stockton on Tees

  —

  —

  —

  —

  —

  Stoke on Trent

  —

  —

  —

  —

  —

  Suffolk

  —

  120,000

  —

  —

  —

  Sunderland

  —

  —

  —

  —

  —

  Surrey

  —

  4,413,000

  1,950,000

  —

  —

  Sutton

  —

  —

  —

  —

  —

  Swindon

  —

  —

  —

  —

  —

  Tameside

  —

  —

  —

  —

  —

  Telford and Wrekin

  —

  —

  300,000

  —

  —

  Thurrock

  —

  —

  —

  —

  —

  Torbay

  —

  —

  —

  —

  —

  Tower Hamlets

  —

  —

  —

  —

  —

  Trafford

  —

  —

  2,900,000

  —

  —

  Wakefield

  —

  1,505,000

  48,000

  —

  —

  Walsall

  —

  2,000,000

  —

  3,100,000

  —

  Waltham Forest

  —

  —

  —

  —

  —

  Wandsworth

  —

  —

  —

  —

  —

  Warrington

  —

  —

  —

  —

  —

  Warwickshire

  245,000

  300,000

  800,000

  3,000,000

  —

  West Berkshire

  —

  —

  —

  —

  —

  West Sussex

  —

  7,900,000

  2,945,000

  —

  —

  Westminster

  —

  —

  —

  —

  —

  Wigan

  —

  1,380,000

  600,000

  —

  —

  Wiltshire

  —

  —

  —

  2,010,000

  —

  Windsor and Maidenhead

  —

  —

  —

  —

  —

  Wirral

  2,414,000

  —

  —

  —

  —

  Wokingham

  —

  —

  —

  —

  —

  Wolverhampton

  —

  —

  2,387,500

  —

  —

  Worcestershire

  —

  —

  —

  2,000

  —

  York

  —

  —

  —

  —

  —

  Notes:

  1. Excludes applications that have been withdrawn or rejected.

  2. Excludes applications covered by a general consent.

  3. Includes applications to dispose of playing fields at foundation, voluntary and former grant-maintained schools.

  4. 'Sports pitch' means areas of open grassed land which are equal to, or larger than, the Football Association's recommended area for games played by under-10s, that is 2,000m2 and which have a configuration making them suitable for sports pitches.
  172W

TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS

  Social Housing
  Caroline Flint
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has to review the guidance to local authorities on developing the expansion of social housing through planning gain. [49404]

  Ms Keeble
  We have consulted on proposals to replace the present system of negotiated planning obligations with an approach based upon the application of a more transparent tariff-based approach applicable to commercial as well as residential developments.

  Wealden Line
  Mr. Hendry
  To ask the Secretary of State for Transport, Local Government and the Regions what representations he has received regarding the time scale for the electrification of the Wealden line. [49405]

  Mr. Spellar
  We have received correspondence from Members of Parliament and others about the "Wealden" line between Lewes and Tunbridge Wells. In addition I have met the Wealden Line Group, who made a useful presentation.

  Partly, representations have been in relation to possible electrification of the line between Uckfield and Eridge, but mainly in relation to possible reinstatement of the lines between Lewes and Uckfield and between Eridge and Tunbridge Wells.

  Bedfordshire County Council
  Alistair Burt
  To ask the Secretary of State for Transport, Local Government and the Regions if he plans to visit Bedfordshire to discuss local government funding with the county council. [49406]

  Dr. Whitehead
  There are currently no plans for Ministers to visit Bedfordshire county council to discuss local government funding.

  Local Authority Housing
  Mr. Rammell
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on his plans for changes to the level of local authority housing investment. [49407]

  Ms Keeble
  The level of Government support for local authority housing investment is being considered as part of the spending review. Since 1997–98 this Government has increased support for local authority housing investment by more than two and a half times. The spending review is considering what further increases should be made.

  Network Rail
  Chris Grayling
  To ask the Secretary of State for Transport, Local Government and the Regions what guarantees he is providing for loan finance raised by Network Rail; and what discussions he has had with the European Commission about support for the company. [49408]

  Mr. Spellar
  The Network Rail bid, if successful, would involve a subordinated standby credit facility from the SRA.

  This would enable Network Rail to raise the bridging finance required to release Railtrack from administration as soon as possible; and provide a longer term, last resort, loan facility.

  The process of explaining the possible financial arrangements to the commission has now started with a view to obtaining any necessary state aid clearances.

  Disabled Access
  David Wright
  To ask the Secretary of State for Transport, Local Government and the Regions what good practice his Department has recently recognised in respect of councils promoting better physical access and mobility within their areas. [49409]

  Ms Keeble
  Earlier this month we announced that Telford and Wrekin Council, Nottingham County Council, and the London borough of Lewisham had been awarded beacon status for their good practice on access and mobility. Aided by increased local transport plan funding, and the sharing of good practices, authorities can help to make our society more inclusive by improving access to work, healthcare, education, and other key services and facilities.

  Road Traffic Reduction
  Mr. David
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made of the extent to which local authorities are meeting their obligations under the Road Traffic Reduction Acts 1997 and 1998. [49410]

  Ms Keeble
  It is only the 1997 Act that places an obligation on local authorities. Local authorities in England (outside London) submitted road traffic reduction reports as part of their full local transport plans in July 2000. Copies of these reports have been placed in the Libraries of both Houses. In the Government's view the majority of the reports met local authorities' obligations under the Road Traffic Reduction Act 1997 in full.

  Grant Distribution System
  Paddy Tipping
  To ask the Secretary of State for Transport, Local Government and the Regions when he will publish details of the grant distribution system intended for 2003–04. [49411]

  Dr. Whitehead
  We are currently working with local government to develop options for the new grant distribution system. As we recently announced in the local government White Paper implementation plan, we will consult over the summer. We will then implement our decisions in time for the 2003–04 local government finance settlement.

  Multi-modal Studies
  Mr. Kidney
  To ask the Secretary of State for Transport, Local Government and the Regions what funding his Department has provided to implement the recommendations of the Midman multi-modal study. [49412]

  Mr. Jamieson
  The 10-year plan provides the funding for transport investment up to 2010, including schemes which are approved following a multi-modal study.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1) what the estimated tax revenues are that would be generated if the road charging proposals in the DTLR Multi-Modal Study Infrastructure charging seminar summary papers were introduced; [49465]

  (2) at what time the Multi-Modal Study Infrastructure charging seminar summary papers were published on the DTLR website on 9 April; [49461]

  (3) what factors underlay the decision to publish the Multi-Modal Study Infrastructure charging seminar summary papers on 9 April; [49463]

  (4) if he will deposit in the Library the complete versions of the DTLR Multi-Modal Study Infrastructure charging seminar papers. [49466]

  Mr. Byers
  [holding answer 15 April 2002]: The papers are already available on the Department's website. However, I have arranged for them to be placed in the Libraries of the House. The papers do not reflect Government policy.

  The papers were produced for an internal seminar. Although under no obligation to publish publicly a request for the papers was received from Transport 2000. It was agreed to provide them with the papers and to make them more widely available by posting them on the Department's website.

  The website team were to post the documents in the week commencing 8 April. They tried to post the documents on Monday 8 April but were prevented by technical difficulties faced by our external contractors.

  Further technical problems faced by the Internet Service Provider meant a delay of approximately two hours between website staff processing the documents for posting at 10.30 on 9 April and when they actually appeared on the website.

  At no stage were Ministers involved in deciding any aspect of the timing of the posting of the papers on the website.

  The Government has made no estimate of the tax revenues that might be generated.

  Council Tax
  Mr. Tredinnick
  To ask the Secretary of State for Transport, Local Government and the Regions what estimate he has made of the average percentage increase in band D council tax this year across England. [49413]

  Dr. Whitehead
  The average Band D increase across England for 2002–03 is 8.2 per cent.

  Dartford Bridge
  Mr. Gibb
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the Dartford bridge. [49414]

  Mr. Jamieson
  Following a public consultation the Secretary of State for Transport, Local Government and the Regions announced on 4 April 2002 that we intend to introduce a road user charging scheme at the Dartford Crossing using powers in the Transport Act 2000 when the powers to toll expire. It is expected that the charging scheme will commence on 1 April 2003.

  Local Government Review
  Peter Bradley
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has for a further local government review. [49415]

  Dr. Whitehead
  The recently published Local Government White Paper, "Strong Local Leadership, Quality Public Services", sets out the future of local government in England. The forthcoming Regional Governance White Paper will set out our proposals for elected regional assemblies for England, including the implications for local government.

  Rail Links (Scotland)
  Mr. Connarty
  To ask the Secretary of State for Transport, Local Government and the Regions what progress has been made in modernising the railway lines to Scotland. [49416]

  Mr. Jamieson
  Modernisation of the West Coast Main Line is under way, and proposals for upgrading the East Coast Main Line are under development.

  Parish Councillors
  Mr. Swayne
  To ask the Secretary of State for Transport, Local Government and the Regions what representations he has received with regard to the proposed code of conduct for parish councillors. [49417]

  Dr. Whitehead
  Since the new year, there have been 148 representations received by my Department about the model code of conduct for Parishes.

  London Underground
  Harry Cohen
  To ask the Secretary of State for Transport, Local Government and the Regions what recent representations he has received from(a) Transport for London, (b) Mr. Bob Kiley and (c) the Mayor of London about future funding and management arrangements for the London Underground: and if he will make a statement. [49418]

  Mr. Jamieson
  The Secretary of State receives frequent correspondence from the Mayor and Mr. Kiley, on behalf of Transport for London, in relation to the future of London Underground.

  DTLR provided TfL with detailed proposals for an unprecedented commitment of long-term grant funding in February 2002. I expect a full response from TfL shortly.

  Planning
  Mr. Roger Williams
  To ask the Secretary of State for Transport, Local Government and the Regions what recent discussions he has had to ensure that a coherent planning system is implemented across the United Kingdom. [49419]

  Ms Keeble
  Ministers and officials in DTLR have had discussions with colleagues in other Departments and in the devolved administrations about the Green Paper "Planning—Delivering a Fundamental Change". Although responsibility for most aspects of the planning system outside England is for the devolved administrations, similar reform consultation exercises are being undertaken in those areas. The planning system is, and is likely to remain, fundamentally similar across the United Kingdom.

  Bus Regulation
  Jim Dobbin
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has for further regulation of buses. [49420]

  Mr. Jamieson
  The Transport Act 2000 gives local authorities new powers to promote better bus services, including powers for joint ticketing schemes and for quality contracts. If necessary my Department is willing to consider further regulatory changes to improve services and value for money.

  Antisocial Behaviour
  Mr. Todd
  To ask the Secretary of State for Transport, Local Government and the Regions what steps he is taking to ensure that local authorities are able to deal effectively with antisocial behaviour. [49422]

  Ms Keeble
  The Department has recently issued a consultation paper, "Tackling Anti-Social Tenants", which is directed towards enabling social landlords to tackle anti-social behaviour more effectively. The proposals and guidance in the consultation paper cover the fundamental areas of enforcement, prevention and rehabilitation. Copies have been placed in the Libraries of the House.

  Ms Ward
  To ask the Secretary of State for Transport, Local Government and the Regions what steps he is taking to give local authorities additional powers to deal with antisocial behaviour. [49427]

  Ms Keeble
  The Department has recently issued a consultation paper, Tackling Anti-Social Tenants, which is directed towards enabling social landlords to tackle anti-social behaviour more effectively. The paper includes proposed new powers for social landlords. Copies have been placed in the Libraries of the House.

  Walton Ashcott Bypass
  Mr. Liddell-Grainger
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on his decision on the Walton Ashcott bypass. [49423]

  Mr. Jamieson
  We decided to turn down Somerset county council's bid because the scheme had not been considered sufficiently in a wider strategic context, including SWARMMS; it is inconsistent with Regional Planning Guidance and the County Structure Plan; and 178W
  improving road access is considered to have the capacity to generate development of a scale inappropriate to Glastonbury and Street.

  Local Government White Paper
  Mr. Borrow
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the response he has had from local government regarding the local government White Paper, with special reference to local government finance. [49424]

  Dr. Whitehead
  We have received a number of responses to the White Paper from local government on both finance and non-finance proposals. We are taking these into account in taking forward the commitments in the White Paper. Our White Paper implementation plan has been published on the DTLR website.

  Rail Congestion
  Mrs. Brooke
  To ask the Secretary of State for Transport, Local Government and the Regions what progress his Department has made towards tackling overcrowding on the rail network. [49425]

  Mr. Jamieson
  The SRA's Strategic Plan sets out how the objectives and targets for rail established in the Government's 10-Year Plan are to be delivered.

  Fares Policy Review
  Dr. Cable
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the Strategic Rail Authority's review of fares policy. [49426]

  Mr. Jamieson
  The Strategic Railway Authority's review of fares policy is timely, as from January 2003 the current regime can be varied to reflect changes since privatisation. The industry cannot proceed on a blind assumption that existing policies in areas such as fares which are key to the further development of the railways can continue indefinitely. The review will consider the advantages and disadvantages of change.

  Parish Councils
  Mr. Burns
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the future of parish councils. [49428]

  Dr. Whitehead
  The Government's rural White Paper "Our Countryside: The Future—A Fair Deal for Rural England" sets out our proposals for strengthening the future role of town and parish councils in England.

  Connex Train Services
  Clive Efford
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement about his plans to improve Connex train services in south-east London. [49429]

  Mr. Jamieson
  We encourage the SRA to ensure that all train operating companies, including Connex, comply with the terms of their franchise agreements. The new directions and guidance, issued to the authority by the Secretary of State on 11 April, include an objective to secure progressive improvements in the performance of franchised rail services.

  Sports Pitches
  Bob Russell
  To ask the Secretary of State for Transport, Local Government and the Regions what action is he taking to increase protection for sports pitches in planning legislation. [49430]

  Ms Keeble
  I refer the hon. Member to my answer of 25 February 2002,Official Report, column 824W, in which I said that I have no plans to extend the provisions of The Town and Country Planning (Playing Fields) (England) Direction 1998 to cover all playing fields.

  South Coast Multi-modal Study
  Mr. Hoban
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the progress of the South Coast Multi-Modal study. [49431]

  Mr. Jamieson
  The South Coast Multi-Modal study is consulting on a preferred strategy in May/June 2002 and will be looking to produce a consultant's report in July. This should be in a position to pass to the Regional Assembly in August 2002 for consideration in their November plenary session.

  Local Government Finance
  Mr. Bill O'Brien
  To ask the Secretary of State for Transport, Local Government and the Regions what recent representations he has received from local authorities about local government finance reform. [49432]

  Dr. Whitehead
  We have received a number of responses to last December's White Paper from local government on both finance and non-finance proposals. We are taking these into account in taking forward the commitments in the White Paper. Our White Paper implementation plan has been published on the DTLR website.

  Building Regulations
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Transport, Local Government and the Regions (1) if he will list those organisations consulted regarding S.I. 2001, No. 3335 introducing self-certification under the Building Regulations; [49861]

  (2) how his Department will ensure that reputable builders are not disadvantaged by the cost and time involved with self-assessment, as laid out in S.I. 2001, No. 3335; [49863]

  (3) what effect the self-certification of building firms, allowed under the Building Regulations S.I. 2001, No. 3335, will have on building firms. [49862]

  Dr. Whitehead
  S.I. 2001, No. 3335, did not introduce self-certification. Self-certification was introduced into the Building Regulations through S.I. 2002, No. 440. This recognises schemes for the self-certification of the installation of combustion appliances, replacement glazing and plumbing work.

  Moving towards self-certification and non-notification by identified competent firms will significantly enhance compliance with the procedural and technical requirements of the regulations; it will reduce costs for firms joining recognised schemes; promote training and
  180W
  competence within the industry; help tackle the problem of 'cowboy builders' by identifying reputable firms to consumers; and will start to assist local authorities with enforcement, as they can devote more resource to tackling those, who either wilfully or in ignorance, fail to comply with the Building Regulations.

  The regulatory impact assessment we undertook prior to laying the regulations, identified that the financial benefit to firms of introducing self-certification would be £104,685,000, taking into account the cost of joining the recognised schemes. These savings arise from firms not having to pay building control fees. Other savings, such as those that would arise from relief from the internal administrative expense and delay in complying with the procedural requirements of the Building Regulations, were not calculated. I understand that the schemes involved have experienced very considerable interest from potential members, and the savings are likely to be higher than the earlier conservative estimate.

  Prior to laying these regulations we undertook extensive consultation. Proposals for self-certification were first consulted on in 1997, with the consultation document 'Proposals for reducing the administrative burden with the prospect at the same time of enhancing health and safety'. The results of the consultation were favourable. We consulted again in 1999 with the document 'Taking Forward Self-Certification Under the Building Regulations'. The consultation went to 250 organisations and a list of these has been placed in the Libraries of the House.

  I believe that self-certification is a very significant step forward for promoting competence in the construction industry, and providing rewards for those who voluntarily subscribe to schemes which are designed to protect society from the adverse effects of poor building work.

  Housing
  Ms Oona King
  To ask the Secretary of State for Transport, Local Government and the Regions, pursuant to the answer of 25 March 2002,Official Report, column 667W, how many grants were made by and what the total value of grants was in each local authority in London running a cash incentive scheme in (a) 1997–98, (b) 1998–99, (c) 1999–2000 and (d) 2000–01. [48715]

  Ms Keeble
  The information requested is set out in the table.
  181W

  Cash incentive scheme grants made by London boroughs, 1997–98 to 2000–01

  Number of grants made

  Total value of grants (£ thousand)

  1997–98

  1998–99

  1999–2000

  2000–01

  1997–98

  1998–99

  1999–2000

  2000–01

  Barking and Dagenham

  0

  0

  0

  0

  0

  0

  0

  0

  Barnet

  53

  34

  23

  31

  856

  545

  380

  618

  Bexley

  21

  0

  0

  0

  284

  0

  0

  0

  Brent

  76

  46

  0

  0

  1,536

  1,034

  0

  0

  Bromley

  0

  0

  0

  0

  0

  0

  0

  0

  Camden

  28

  15

  10

  50

  538

  287

  198

  1,138

  City of London

  12

  7

  0

  0

  150

  82

  0

  0

  Croydon

  105

  92

  135

  44

  1,580

  1,397

  1,258

  858

  Ealing

  111

  48

  3

  0

  1,202

  682

  50

  0

  Enfield

  76

  68

  53

  41

  1,316

  1,442

  1,334

  809

  Greenwich

  74

  4

  0

  0

  802

  47

  0

  0

  Hackney

  160

  120

  0

  9

  3,198

  2,190

  0

  224

  Hammersmith and Fulham

  50

  12

  0

  0

  820

  155

  0

  0

  Haringey

  84

  68

  16

  25

  1,392

  1,083

  175

  398

  Harrow

  45

  22

  14

  10

  1,600

  533

  275

  180

  Havering

  37

  20

  132

  4

  463

  275

  186

  69

  Hillingdon

  52

  31

  36

  20

  811

  433

  527

  317

  Hounslow

  89

  48

  0

  0

  1,506

  923

  0

  0

  Islington

  102

  79

  0

  0

  2,440

  1,854

  0

  0

  Kensington and Chelsea

  29

  9

  3

  1

  630

  217

  66

  25

  Kingston upon Thames

  29

  27

  18

  14

  594

  520

  387

  283

  Lambeth

  59

  23

  0

  0

  884

  345

  0

  0

  Lewisham

  31

  13

  0

  13

  429

  223

  0

  280

  Merton

  42

  20

  9

  10

  578

  365

  171

  198

  Newham

  113

  73

  22

  0

  1,404

  572

  255

  0

  Redbridge

  14

  10

  0

  0

  171

  178

  0

  0

  Richmond

  71

  57

  24

  2

  1,488

  1,405

  653

  59

  South wark

  226

  171

  0

  0

  3,289

  2,329

  0

  0

  Sutton

  38

  16

  9

  7

  728

  251

  186

  143

  Tower Hamlets

  117

  84

  46

  36

  1,258

  855

  489

  500

  Waltham Forest

  53

  39

  23

  21

  1,028

  863

  647

  846

  Wandsworth

  89

  86

  38

  42

  1,747

  1,651

  796

  930

  Westminster

  52

  32

  16

  23

  1.029

  644

  335

  498

  Total

  2,138

  1,374

  630

  403

  35,748

  23,380

  8,368

  8,373

  Heathrow
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what constraints exist on the development of(a) new and (b) improved rail links to Heathrow from the West. [49470]

  Mr. Byers
  The overriding constraint for new or improved rail services is the heavy traffic already using the Great Western and South West Trains lines around Heathrow. The Strategic Rail Authority is considering how a package of service changes could assist in serving Heathrow from the West.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1) what assessment he has made as to the future demand for rail links to and from Heathrow from and through Berkshire; [49469]

  (2) what plans exist to create new rail links to Heathrow from the west. [49468]

  Mr. Byers
  The Strategic Rail Authority is actively working with BAA on developing proposals for rail service improvements to Heathrow, including the possibility of new and improved links to the west. The SRA is sponsoring the train service demand forecasting phase of this work, which will include services from Heathrow to the west.

  Rail Use
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what is the estimated increase in use of(a) diesel trains and (b) electric trains, for passenger journeys over the lifetime of the 10-year plan. [49717]

  Mr. Byers
  The Government are committed to seeing a 50 per cent. increase in passengers over the next decade. No estimate has been made of a split between diesel and electric train usage.

  Pollution
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what requirements must be satisfied by diesel rolling stock with regards to levels of(a) nitrogen oxide, (b) carbon dioxide and (c) noise emissions, for use on the UK rail network. [49708]

  Mr. Byers
  Railways are covered by the following:

  (a) policy on local air quality, including emissions of nitrogen oxide, is set out in the UK National Air Quality Strategy. In areas where the Air Quality Objectives will be exceeded from whatever source, the relevant local authority must draw up an action plan to meet the objectives. The levels of emissions along railway lines, however, meet the National Air Quality Strategy targets;

  183W

  (b) on carbon dioxide the Government's goal is for transport to reduce its overall impact on the environment thereby contributing to the United Kingdom moving towards a reduction in carbon dioxide emissions by 20 per cent. by 2010;

  (c) railway noise is covered by the Noise Insulation (Railways and Other Guided Transport Systems) Regulations (1996), and, potentially, the Environmental Protection Act (1990).

  Better Quality Services Initiative
  Mr. Bercow
  To ask the Secretary of State for Transport, Local Government and the Regions which of the services of his Department have not been reviewed under the Better Quality Services Initiative; and when they will be reviewed. [50313]

  Dr. Whitehead
  The Better Quality Services (BQS) programme was launched in 1998 and adopted by the Cabinet Office in the Modernising Government White Paper of 1999 as a means of delivering continuous improvements in the quality and effectiveness of Government activities and services. It requires all Government Departments to review every activity and service over a five-year period starting in October 1999. The scheme covers all activities in Departments, agencies and executive non-departmental public bodies, and is similar in remit to the Best Value programme in local government.

  The review of the Department's activities and services under the scheme started in 1999. The central Department has completed 12 reviews to date and others are on-going. There are still 53 activities and services to review. Our agencies and executive non-departmental public bodies have their own programmes of performance review.

  Following an evaluation of the BQS scheme in September 2001, the management of the scheme by the Cabinet Office ceased. However, experience has shown that BQS is a useful management tool, particularly in examining central corporate management functions. Departments have therefore been encouraged not to discontinue its use simply as a result of central co-ordination ceasing, but to consider its use alongside other management tools, as appropriate.

  Council Tax Arrears
  Mr. Bercow
  To ask the Secretary of State for Transport, Local Government and the Regions, pursuant to his answer of 4 March 2000,Official Report, column 84W, regarding rent and council tax arrears in England and Wales, for what reason his Department does not provide information on council tax arrears by local authority in England. [50329]

  Dr. Whitehead
  The Department does not at present collect information from local authorities on the level of council tax arrears, and so individual figures are not available. National estimates of the level of council tax arrears are derived from the results of a voluntary survey that is carried out each year by the Institute of Public Finance. These estimates were given in my answer of 4 March.

  The Department is giving active consideration to collecting this information for future years.

  Salaries
  Mr. Bercow
  To ask the Secretary of State for Transport, Local Government and the Regions what the cost in 2001–02 was of the pay increase to staff in his Department, agencies and the non-departmental public bodies for which he is responsible; and what the cost of the forthcoming increase will be in 2002–03. [50407]

  Dr. Whitehead
  The estimated cost in 2001–02 of the pay increase to staff in the Departments agencies and the non-departmental public bodies is given in the table.

  £

  Central Department

  5,000,000

  Agencies

  Driving Standards Agency

  1,240,000

  Driver and Vehicle Licensing Agency

  5,600,000

  Fire Service College

  140,000

  Highways Agency

  1,300,000

  Maritime and Coastguard Agency

  1,000,000

  Planning Inspectorate

  780,000

  Queen Elizabeth II Conference Centre

  40,000

  Rent Service1

  180,000

  Vehicle Inspectorate

  1,930,000

  Vehicle Certification Agency

  75,000

  Non-departmental public bodies

  Audit Commission2

  3,000,000

  English Partnerships3

  164,000

  Health and Safety Executive

  4,000,000

  Housing Action Trusts

  201,000

  Housing Corporation

  740,000

  Local Government Commission4

  63,000

  Northern Lighthouse Board

  347,000

  Parliamentary Boundary Commission for England and Wales

  12,000

  Strategic Rail Authority

  278,000

  Trinity House Lighthouse Service

  735,000

  1 For the Rent Service the cost cannot be given in full as the 2001–02 pay increase for two of the agency's three pay bargaining units have not yet been agreed. The cost was £180,000 for the pay increase for the pay bargaining unit which has been agreed (covering administrative staff who transferred to the agency from local authorities in 1999).

  2 The Audit Commission's financial year ends on 31 October.

  3 English Partnerships is a national body for regeneration and development bringing together the Urban Regeneration Agency and the Commission for the New Towns for which details of the cost of the pay increase is provided.

  4 The Local Government Commission's responsibilities were transferred to the Electoral Commission on 1 April.

  Note:

  The Standards Board for England (a new NDPB) was created on 1 February and will seek the first pay increase for its staff during 2002–03.

  The Department is unable to provide these costs for 2002–03 as the pay increases for that year have not yet been agreed.

  Environmental Targets
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what environmental targets have been set by the EU with regard to transport provision in the UK over the course of the 10-year plan. [50522]

  Mr. Byers
  The European Commission recently set out its proposals for the future direction of transport policy in its White Paper, 'European Transport Policy for 2010: Time to Decide' (http://europa.eu.intleur-lex/en/com/wpr/
  185W
  2001/com2001–0370en.html). No environmental targets regarding transport provision have been set by the EU at member state level.

  Motoring Charges
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions if he will publish the list of local authorities that(a) are planning to introduce congestion or work place parking taxes and (b) have expressed interest in introducing such taxes. [49460]

  Mr. Byers
  [holding answer 15 April 2002]: The Mayor has announced his congestion charging plans for London. I am considering a draft scheme order from Durham county council for a road user charging scheme in the historic core of the city of Durham.

  No other local authority has yet undertaken formal public consultation on proposals for a road user charging or work place parking levy scheme.

  Renovation Grants
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1) what account is taken of(a) other family support and (b) the financial means of any manager of the property when means testing landlords and (ii) tenants of a property who are applying for a renovation grant; [50657]

  (2) what facilities exist for local authorities to provide loans to people for renovation of their property; [50655]

  (3) under what circumstances a tenant can refuse to allow grant-aided renovation to a property to be carried out, if it has been applied for by the landlord; [50656]

  (4) under what circumstances people are eligible for local authority renovation grants. [50654]

  Mr. Byers
  The Housing Grants, Construction and Regeneration Act 1996 requires that where an applicant for a renovation grant is a tenant or owner occupier then he is subject to a prescribed means test. This test requires that if any such applicant is receiving voluntary help from a third party towards meeting general living expenses, such as food, clothing, fuel for heating and local taxes, then this support, other than the first £20 of any such regular payment, is treated as part of an applicant's income for the purpose of the means test.

  The Act also specifies that a tenant can only qualify for a renovation grant if he is required by the terms of his lease to carry out the relevant works. In these circumstances no regard is paid to the financial means of the property manager. Local authorities have discretion to decide the level of grant they should make available to a landlord but are required to have regard to the extent to which the landlord is able to charge a higher rent for the premises following the completion of works.

  Local authorities presently have powers under the Housing Act 1985 to give loans at commercial interest rates for private sector housing renewal.

  Landlords have a right of access to property they have let to carry out repairs where the works are necessary to maintain the property in the condition under which it was agreed to be let. Where the works are such that they would improve the condition of the property beyond that under
  186W
  which it was agreed to be let, then the tenant may refuse access to carry out such works unless a right of entry for that purpose is specifically reserved in the tenancy agreement.

  Under the 1996 Act, local authorities currently have discretion as to whether they should make grants available in their area, but they may make such grants to landlords, owner-occupiers and tenants with a repairing obligation in their lease. The principal purposes for which grants may be paid are for making a dwelling fit, putting a dwelling into reasonable repair, providing home insulation or heating facilities, providing satisfactory internal arrangements or conversions. Grants may also be made for the cost of radon remedial works.

  Railways
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1) how many rails are listed as defective and in need of replacement; [50662]

  (2) what the average time taken was to replace a rail once it has been identified as defective in the last 12 months; and in what way defective rails are prioritised for replacement; [50663]

  (3) how many rails were identified as defective in each of the last five years; and how many of these (a) were replaced before they broke, (b) broke and (c) have yet to be replaced. [50661]

  Mr. Byers
  These are matters for Railtrack, the Office of the Rail Regulator and the Health and Safety Executive. My Department does not hold such information.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what investment has been made as part of the 10-year plan for improved detection techniques of broken rails. [50659]

  Mr. Byers
  As part of the Periodic Review, the Rail Regulator has provided for £150 million of expenditure over the current control period to fund Railtrack's target of reducing the number of broken rails.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what factors can lead to rails breaking. [50660]

  Mr. Byers
  Many factors can cause rails to break. These are not only matters of the metallurgy, manufacture and maintenance of the rails themselves, but are also strongly influenced by the volumes of traffic, the design of the vehicles running over the track and the quality of maintenance of those vehicles. The industry's Wheel Rail Interface System Authority (WRISA) is investigating all aspects of this complex technical interaction.

  Smart Card Technology
  Mr. Laurence Robertson
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on the use of smart card technology in his Department and in the areas for which it is responsible; and what discussions he has had with private companies about the use of smart card technology within his Department. [50482]
  187W
  Whitehead
  Dr. [holding answer 16 April 2002]: My Department does not use smart cards at present although a contactless magnetic card is used for buildings entry in London and elsewhere. We are considering the use of a single smart card with encryption for identification of individuals for access to and authorisation of a range of e-services and buildings access. The Driver and Vehicle Licensing Agency will be issuing smart cards as part of the EU-wide "Smart Tachograph" project. DVLA is reviewing other uses for a personal smart card such as a driver licence possibly with other identification-based applications such as travel rights within the EU.

  We are sponsoring pilot card projects in local authorities as part of the local government on-line programme and a number of LAs and passenger transport executives are using local transport plan funds for smart card schemes in transport particularly for ticketing. We have sponsored the development of card standards for transport so that as far as possible applications can be interoperable between different LAs and PTEs to ensure seamless travel and through ticketing. We may launch other initiatives once the Office of the e-Envoy has issued its smart card policy paper.

  It is not the normal practice of the Government to release details of discussions with private individuals or companies. However Departmental officials have been involved in a number of discussions with companies, either individually or at meetings of organisations such as the Transport Card Forum or the Integrated Transport Smart Card Organisation, as part of the planning for the projects noted above.

  Tropical Hardwoods
  Mr. Gordon Prentice
  To ask the Secretary of State for Transport, Local Government and the Regions what guidance he gives transport undertakings concerning the use of tropical hardwoods in renewing and repairing infrastructure. [50683]

  Dr. Whitehead
  The Department's policy, contained in the Greening Operations Policy Statement is to provide advice to those transport undertakings for which the Department sponsors on Government policy aims and best practice in relation to timber and other environmental issues. This is done by forwarding all the latest guidance to these bodies.

  Comfort Letters
  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions, pursuant to his answer of 11 April 2002,Official Report, column 512W, on comfort letters, when the notification period will now end; for what reason the customary notification period was not initially provided; and if he will make a statement. [51452]

  Mr. Jamieson
  I refer the hon. Member to the Minute from the DTLR concerning London Underground PPP letters of comfort that was laid before Parliament on 20 March. A copy is available in the Libraries of the House. The notification period will now end 14 parliamentary sitting days from 20 March.

  Railtrack
  Chris Grayling
  To ask the Secretary of State for Transport, Local Government and the Regions (I) what assessment he has made of the implications of paragraph 24. section 3.1 of the Community guidelines on state aid for rescuing and restructuring firms in difficulty (1999/c 288/02) for the timing of state aid to Railtrack in administration; [50769]

  (2) if he will make a statement on the implications of paragraph 48 of the Community guidelines on state aid for rescuing and restructuring firms in difficulty (1999/c 288/02) as it relates to the Government's ability to extend state aid for Railtrack in administration beyond 7 October; [50773]

  (3) if he will make a statement on section 3.1, paragraph 23, subsections b and d of the Community guidelines on state aid for rescuing and restructuring firms in difficulty (1999/c 288/02) as it relates to Railtrack in administration; [50768]

  (4) what assessment his Department made of the implications of paragraph 24, section 3.1 of the Community guidelines on state aid for rescuing and restructuring firms in difficulty (1999/c 288/02) before it took the decision to provide financial support for the Network Rail bid for Railtrack; [50770]

  (5) if the stipulation in paragraph 51 of the Community guidelines on state aid for rescuing and restructuring firms in difficulty (1999/c 288/02) prevents Network Rail from receiving state aid to purchase the assets of Railtrack in administration. [50774]

  Mr. Jamieson
  [holding answer 18 April 2002]: The Secretary of State has had full regard to the implications of the Community guidelines on state aid for rescuing and restructuring firms in difficulty as it relates to Railtrack in administration and any financial support to be provided to Network Rail if its bid for Railtrack plc is successful. The Government's guarantee of commercial borrowing by Railtrack plc is consistent with section 3.1, paragraph 23, subsections b and d of the Guidelines.

  Rescue aid under these guidelines can be extended beyond the initial period of six months in duly substantiated exceptional circumstances (paragraph 24). If the administration of Railtrack plc is likely to continue beyond 30 September 2002 clearance for an extended period of aid would be sought from the European Commission, either as an extension of the existing clearance or as a separate notification if more appropriate.

  If the Network Rail bid were to be successful in accordance with the timetable as currently projected the Government guaranteed loans to Railtrack plc (in administration) would be reimbursed in full before 30 September. Any state aid granted to Network Rail would be notified separately. The Government will ensure that any aid provided to Network Rail is compatible with the provisions of the EC treaty in particular Article 73 and Article 86(2).

  Deep-sea Ports (Freight)
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1) what the average length was of the onward journey for freight arriving in deep-sea ports, destined for the UK that was taken to its
  189W
  destination by (a) road, (b) rail, (c) a combination of road and rail and (d) short sea shipping in the last 12 months; [51186]

  (2) what percentage of freight leaving deep-sea ports by road was later transferred on to the rail network in the last 12 months; [51184]

  (3) what percentage of freight (a) carried to and (b) carried from deep-sea ports, went by (i) road, (ii) rail and (iii) sea in the last 12 months. [51183]

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

  Trans-european Network
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what conditions projects must satisfy in order to be eligible for funding from the EU trans-european transport network budget. [51199]

  Mr. Byers
  General rules for the granting of community financial aid in the field of trans-European networks are set out in Council Regulation (EC) 2236/95.

  The Community guidelines for the development of the trans-European transport network (Decision No. 1692/96/EC) sets out the objectives projects must pursue. Annexes I and II to that Decision illustrate the network by way of maps and set out for each mode of transport the project eligibility criteria and specifications.

  Sea Shipping (Freight)
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what estimate he has made of the environmental costs associated with the sea shipping of freight. [51187]

  Mr. Byers
  My Department is in the process of assessing relevant scientific and economic evidence on external costs including environmental from a number of sources in the UK and elsewhere. This assessment is part of a review of values to be used in considering freight facility grants.

  Road Signs
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made of the aesthetic impact of road signs and markings. [51250]

  Mr. Byers
  Traffic signs and road markings have to attract the attention of road users in order to fulfil the purpose for which they are provided, but local traffic authorities have a statutory duty to take account of the effects on amenity when installing signs and markings at particular locations. Chapter 7 of the Traffic Signs Manual, published in 1997, gives guidance on designing signs so as to produce aesthetic as well as functional designs.

  Ballast Water
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made as to the contamination caused by the release of 190W
  ballast water by ships; and what guidelines exist as to the (a) location and (b) frequency with which ballast water should be released. [51249]

  Mr. Byers
  With relation to oil, the MARPOL Convention has contained requirements for the segregation of ballast water from cargo oil in tankers constructed after 1983. Since August 1999 the seas around the UK and out to the west of Ireland have had Special Area status under the MARPOL Convention; this means a total prohibition on the discharge of any cargo-related oil which may be entrained with ballast water.

  Joint Nature Conservation Council, Department for Environment, Food and Rural Affairs and Scottish Executive Environment and Rural Affairs Department have conducted studies in a number of ports to identify the presence of non-indigenous organisms, some of which are thought to have been introduced via ships' ballast water. The Maritime and Coastguard Agency (MCA) has urged ships to follow the IMO's guidelines on ballast water management practices to reduce the risk of introducing non-indigenous species. The agency has issued a Marine Guidance Note on the matter. The UK continues to play a leading role within the International Maritime Organisation to develop mandatory requirements.

  Windows
  Mr. Clifton-Brown
  To ask the Secretary of State for Transport, Local Government and the Regions what climatic factors were taken into account by the Government in proposing the standards for new windows insulation under S.I. 440. [51436]

  Dr. Whitehead
  [holding answer 19 April 2002]: S.I. 2002/440 requires, among other things, that members of the Fenestration Self-assessment Scheme, who seek to self-certify their work, must comply with the relevant requirements of the Building Regulations (S.I. 2000/2531 as amended by S.I. 2001/3335). These regulations apply in England and Wales. Guidance on achieving compliance in relation to window insulation standards is given in Approved Documents L1 and L2. The standards given in the guidance have been derived using Meteorological Office data for winter temperatures in the UK, and in particular how often ambient temperature falls below a pre-determined level.

  Humber Bridge Board
  David Davis
  To ask the Secretary of State for Transport, Local Government and the Regions what plans his Department has to address the levels of debt accumulated by the Humber Bridge board. [51819]

  Mr. Spellar
  The debt owed to the Government is subject to an agreement with the Humber Bridge board dated 29 March 1972, this agreement was supplemented by a further agreement made 1 July 1998.

  The 1998 agreement includes a provision for reviewing the debt by 1 September 2002 and at five yearly intervals thereafter.

  Planning System
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what
  191W
  action he has taken to prepare a statutory definition of the purpose of the planning system; and if he will make a statement. [52091]

  Mr. Byers
  In response to the Green Paper "Planning: delivering a fundamental change", a number of bodies have suggested that there should be a statutory purpose for the planning system. My officials have written to a range of organisations seeking views on this proposal.

  Concessionary Travel
  Paddy Tipping
  To ask the Secretary of State for Transport, Local Government and the Regions (1) what the estimated cost is to his Department of supporting the half-fare concession bus pass in 2002–03; [50027]

  (2) what estimate has been made of the cost of providing concessionary travel for men aged 60 to 64; [50028]

  (3) what estimate has been made of the cost of providing a free transport concession to all pensioners. [50029]

  Ms Keeble
  Government support for local authorities' concessionary fares scheme is met through general grant. The Local Government Finance Settlement 2002–03 increased general grant in the current financial year by 5 per cent. on a like for like basis. Local authorities are responsible for decisions on their spending priorities bearing in mind their statutory responsibilities and the wishes of their electorate.

  Estimated total expenditure on concessionary travel schemes on all transport modes in England is about £504 million. Of this we estimate that some £443 million is for travel for pensioners and disabled people on local bus services, including schemes that are more generous than the statutory half-fare requirement. We have no separate figures for the cost of half-fare travel on buses.

  It is estimated that the additional cost of providing concessionary travel for men aged 60–64 on all modes will be £50 million per year.

  We have no estimate for the cost of providing free transport for pensioners. However we estimate that the additional cost of providing free travel on local bus services for pensioners and disabled people would be in the order of £300 million per year.

DEFENCE

  Armed Forces Personnel Administration Agency
  Paddy Tipping
  To ask the Secretary of State for Defence what performance targets have been set for the Armed Forces Personnel Administration Agency for the financial year 2002–03. [52257]

  Mr. Ingram
  The key targets have been set for the Chief Executive of the Armed Forces Personnel Administration Agency (AFPAA) for the financial year 2002–03. The targets build upon progress made by the agency since it formed on 1 April 1997, and are set against three main groupings as follows.
  192W
  Delivery of service
  To make 99.9 per cent. of all pay payments by the due date (excluding late payments caused by events determined to be outside the control of the agency).
  To make 100 per cent. of all pension payments by the due date (excluding late payments caused by events determined to be outside the control of the agency).
  To keep the error rate within 1 per 1,000 for payments of pensions.
  To keep the error rate within 1.5 per 1,000 for payments of pay and allowances.
  To respond to all pay, pension. records of service and manpower inquiries in accordance with the requirements of each service level agreement (SLA) and emerging customer service agreements (93–96 per cent. within 10 working days).

  Service enhancement
  To deliver minor change in accordance with agreed programs and major change in accordance with individual project plans to implement approved policy aspects of the modernisation agenda (95–98 per cent. over the planning period).

  Efficiency
  Reduce the unit cost by 12 per cent., over a four year period, for delivery of core pay and personnel administration. Consistent with this the agency will target a 3.5 per cent. saving in year 2002–03.

  Gibraltar
  Mr. Jenkin
  To ask the Secretary of State for Defence if he will list the MOD facilities in Gibraltar; what the future of the MOD facilities in Gibraltar under the Brussels Process is; and what arrangements have been made under the Brussels Process for the continued use of military facilities in Gibraltar by UK forces in the event of a 'yes' vote in the referendum [51017]

  Mr. Ingram
  The Ministry of Defence maintains a wide range of facilities in Gibraltar, including HM Naval Base; RAF Gibraltar; the Royal Naval hospital; ammunition, fuel and stores depots; a training area; maritime exercise areas; communications facilities; sport and recreational facilities; St. Christopher's school; and accommodation for service and civilian personnel. As my hon. Friend the Minister for Europe told the House on 16 April 2002,Official Report, column 451, the United Kingdom will retain full control over the British military base in Gibraltar.

  Beaufort Trench (Mustard Gas)
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Defence how much mustard gas is stored in the Beaufort trench; and what recent assessment has been carried out to determine the health risks associated with the site. [51570]

  Dr. Moonie
  Detailed inventories of chemical weapons and other munitions disposed of in Beaufort's Dyke are no longer available; many records were destroyed after the disposals as a matter of routine custom and practice in view of the fact that sea dumping of munitions, including CW-filled items, was then an acceptable method of disposal. Where records of disposals do remain in existence, they have been released to the Public Record Office. From those existing records, it is known that some 14,500 tons of 5 inch artillery rockets filled with phosgene were dumped in Beaufort's Dyke in July 1945. There are no records which indicate that other chemical weapons, including mustard gas, have been disposed of to that dump
  193W
  site. As to the potential risk posed by chemical weapons, the long-held consensus of international scientific opinion is that munitions on the sea bed present no significant risk to safety, human health or the marine environment, provided they remain undisturbed.

  Phosgene is destroyed by hydrolysis on contact with seawater. The surveys of Beaufort's Dyke conducted by the then Scottish Office in 1995 and 1996 found no residual traces of chemical weapons in that dump site. A copy of the 1996 report by the Scottish Office, entitled `Fisheries Research Service Report 15/96'. which confirms the findings of the surveys, is available in the Library of the House.

  Heavy Lift Aircraft
  Mr. Jenkin
  To ask the Secretary of State for Defence what recent(a) representations he has received from the NATO Secretary-General and (b) discussions he has had with his European counterparts concerning the possibility for European countries to come together in order to obtain a fleet of C-17s and C-130Js to fill the gap until their orders for the A400M come forward; and if he will make a statement. [51021]

  Mr. Hoon
  Transport aircraft are one of the capability shortfall areas which European Union member states have identified in the European Capabilities Action Plan (ECAP). The shortfall is primarily in outsized transport aircraft (larger than a C130). An ECAP panel led by the UK is looking at a number of possible options for member states to address this.

  Progress against the ECAP is discussed regularly by EU Defence Ministers, most recently at the informal meeting in Zaragoza on 22–23 March. As capability improvements achieved through the ECAP also benefit NATO, there are regular contacts with the NATO Secretary-General on this topic.

  Sentry Duty (Edinburgh Castle)
  John Barrett
  To ask the Secretary of State for Defence what discussions he has had with representatives of the armed forces regarding the removal of the traditional sentry duty of Edinburgh castle. [51271]

  Mr. Ingram
  Such decisions are quite rightly a matter for the local army commander. In this case, the decision to withdraw the traditional sentries from continuous duty at Edinburgh castle between April and September was taken by the General Officer Commanding, 2nd Division, after due consideration. The hon. Member should note however that castle guard will continue to be mounted during state ceremonial occasions during the summer months.

  John Barrett
  To ask the Secretary of State for Defence what representations the Government have received regarding the decision to remove the traditional sentry duty of Edinburgh castle. [51274]

  Mr. Ingram
  The General Officer Commanding 2nd Division has received a number of letters and pre-printed coupons, cut from an Edinburgh evening newspaper, seeking reinstatement of the sentries. He has also received a letter from Sarah Boyack, a Member of the Scottish Parliament. I too have received a copy of Ms Boyack's letter and I will be replying to her shortly.
  194W
  John Barrett
  To ask the Secretary of State for Defence what the costs associated with the traditional sentry duty of Edinburgh castle were in the last 12 months. [51272]

  Mr. Ingram
  The direct costs of mounting the sentries at Edinburgh castle are in the order of £84,000 each year. The indirect cost is the fact that the soldiers concerned are not available for military training or other duties. These costs cannot be readily quantified.

  John Barrett
  To ask the Secretary of State for Defence what assessment the Government have made of the impact the traditional sentry duty of Edinburgh castle has on(a) morale of army soldiers and (b) army resources. [51273]

  Mr. Ingram
  Soldiers acting as sentries at Edinburgh castle are aware that they have no guarding or security role, and this is not conducive to good morale. In terms of resourcing, providing these sentries throughout the summer months is a heavy drain upon the single battalion which is available for public duties in Scotland and, as such, represents an inappropriate use of highly trained military manpower.

  Nuclear Weapons
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence if he will make it his policy to provide the figure for the total number of operational nuclear warheads in the United Kingdom's stockpile; and if he will make a statement. [51138]

  Mr. Ingram
  In line with the policy set out in the Strategic Defence Review, we have fewer than 200 operationally available warheads. It would not be in the interests of national security to be more precise than this, and I am therefore withholding the information sought under Exemption 1 (Defence, Security and International Relations) of the Code of Practice on Access to Government Information. The right hon. Member may like to note that the United Kingdom is widely agreed already to be the most transparent country in the world about its holdings of nuclear weapons.

  Falkland Islands
  Jane Griffiths
  To ask the Secretary of State for Defence what assistance he is giving to South Atlantic veterans to visit the South Atlantic to mark the 20th anniversary of the recapture of the Falkland Islands. [51719]

  Mr. Ingram
  It is not the Government's policy to provide assistance in the form of free or subsidised travel for veterans who wish to attend commemorative events overseas, and there is no provision in the Defence budget for such expenditure. The one exception is the war widows pilgrimage scheme operated on behalf of the Ministry of Defence by Remembrance Travel, the pilgrimage department of the Royal British Legion, which enables widows of servicemen who died while serving overseas in or before 1967 to visit their husband's grave once at a reduced rate.

  Jane Griffiths
  To ask the Secretary of State for Defence what arrangements he is making to commemorate the 20th anniversary of the recapture of the Falkland Islands. [51718]
  195W
  Mr. Ingram
  The Falkland Islands authorities are planning a series of events later this year, culminating in a cathedral service in Stanley on Liberation Day, 14 June. The armed forces will take part in a tri-service parade with each of the services represented and the Royal Marines will provide a band. I will visit the Falkland Islands at this time and will attend the cathedral service on behalf of the armed forces.

  Service Personnel
  Mr. Jenkin
  To ask the Secretary of State for Defence how many(a) army personnel, (b) navy personnel and (c) RAF personnel are (i) assigned to operations, (ii) training for operations, (iii) recovering from operations and (iv) training for their assigned role; and what the percentage is of each service in each case. [49674]

  Mr. Ingram
  I refer the hon. Member to the answer I gave him on 3 April 2002,Official Report, column 1019–20W. The table shows the total number and percentage of trained service personnel deployed on military tasks at home and abroad. This includes personnel deployed on operations (e.g. in Afghanistan) and ongoing commitments (e.g. in the Falkland Islands), but excludes those personnel undertaking public duties.

  Number

  Percentage

  Navy (including Marines)

  5,707

  15.3

  Army

  23,440

  23.2

  Air Force

  6,324

  12.9

  The remaining data requested are not held centrally and could be provided only at disproportionate cost. However, we estimate that around 5–6 per cent. of trained service personnel are either preparing for, or recovering from, deployments on military tasks.

  Those service personnel not accounted for in the above figures are engaged in a wide range of other activities, including collective and individual training.

FOREIGN AND COMMONWEALTH AFFAIRS

  Israel
  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to Israel in respect of its failure to implement in full United Nations Security Council resolutions. [49268]

  Mr. Bradshaw
  The Government have called for an immediate and full Israeli withdrawal from Palestinian towns in accordance with UN Security Council Resolution 1402. The Foreign Secretary most recently stressed our concerns to Israeli Foreign Minister Peres in a telephone conversation on 15 April. We have called on both parties to implement UN Security Council Resolutions 1397, 1402 and 1403.

  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his current estimate is of the quantity of(a) nuclear weapons and (b) chemical weapons possessed by Israel. [49480]
  196W
  Mr. Bradshaw
  Any such estimate would be based on sensitive intelligence sources. It has been the practice of successive Governments not to comment on intelligence matters.

  We regularly call upon Israel to resolve international concerns about its nuclear status by acceding to the Nuclear Non-Proliferation Treaty as a non-nuclear weapons state.

  Israel is a state party to the 1925 Geneva Protocol which prohibits the use of chemical and biological weapons. It has also signed, but not ratified the Chemical Weapons Convention, which prohibits the development, production, acquisition, stockpiling and retention of chemical weapons. We continue to urge Israel to ratify the convention whenever an appropriate opportunity arises.

  Afghanistan
  Joan Ruddock
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has received the UN Secretary General's report to the Commission on the Status of Women on discrimination against women and girls in Afghanistan (E/CN.6/2002/5 dated 24 January); and what action he will take to ensure the recommendations are implemented. [50698]

  Mr. Bradshaw
  We have received the UN Secretary General's Report to the Commission on the Status of Women on discrimination against women and girls in Afghanistan (E/CN.6/2002/5 dated 24 January). We welcome its recommendations. At the UN, the UK co-sponsored a Consensus Resolution on women and girls in Afghanistan (E/CN.6/2002/L.4/Rev.2) approved on 25 March, which urges the Interim Administration to undertake a series of steps aimed at improving the quality of life for women.

  As stated in my reply of 28 February to my hon. Friend, Official Report, columns 1638–39W, we have always said that the restoration of human rights, including women's rights, will be key to the establishment of stable systems of government in Afghanistan.

  We welcome the role that women are playing in the Afghan Interim Authority, both in the Interim Administration and on the Loya Jirga Commission. While the form of any future Afghan Government is for the Afghan people to decide, we expect that women will be involved.

  On reconstruction, our projects have always involved women and this will continue in the recovery and rehabilitation process. The involvement of women in projects, and use of expertise on gender issues will help to ensure that the rights of women are promoted—particularly recognising the complexity of gender issues in Afghanistan.

  Mr. Salah Zanie
  Mr. Kaufman
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he will reply to the letter dated 21 February from the right hon. Member for Manchester, Gorton, with regard to Mr. Salah Zanie. [51427]
  197W
  Mr. Bradshaw
  My right hon. Friend's letter crossed with the Secretary of State's letter of 20 February. A further copy will be sent and I apologise for any confusion caused.

  East Timor
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the British Government were informed that East Timor was to be taken over by Indonesian-backed forces; and if he will make a statement. [51251]

  Mr. Bradshaw
  The British Government were of course aware of reports of Indonesian involvement in East Timor ahead of the invasion in 1975, but the situation was far from clear and reports were difficult to verify. In the absence of any British representation in the area, HMG had no independent means of doing so. The UK deplored the Indonesian invasion and did not recognise the incorporation of East Timor into Indonesia.

  Malcolm Rennie and Brian Peters
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what(a) the date and (b) the outcome was of meetings his Department has held with representatives of the (a) Portuguese, (b) Indonesian, (c) Australian and (d) New Zealand Governments concerning the deaths of Malcolm Rennie and Brian Peters; and what matters were discussed. [51309]

  Mr. Bradshaw
  Ministers and officials have regularly discussed this case with representatives of other Governments. Full details of the significant number of meetings could be provided only at a disproportionate cost.

  The British Government continue to take an active interest in the events surrounding the deaths of Malcolm Rennie and Brian Peters and will raise our concerns with other Governments at every appropriate opportunity.

  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Indonesian Government in relation to Yumus Yosfiah and the deaths of Malcolm Rennie and Brian Peters. [51308]

  Mr. Bradshaw
  Ministers have regularly raised this case with the Indonesian authorities. The most recent discussion took place in Jakarta in August 2001 when I met the Indonesian Attorney-General.

  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the United Nations transitional administration in East Timor in relation to Yumus Yosfiah and the deaths of Malcolm Rennie and Brian Peters. [51307]

  Mr. Bradshaw
  I have discussed this case on a number of occasions with Sergio Vieira de Mello, Head of the United Nations Transitional Administration in East Timor. I did so most recent]) when we met in London in October 2001.

  Ministerial Meetings (President Kostunica of Serbia)
  Mr. Wray
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met President Kostunica of Serbia; and what was discussed. [51241]
  198W
  Mr. MacShane
  FRY President Kostunica visited the UK on 28–29 November and had an audience with Her Majesty The Queen. He also met my right hon. Friends the Prime Minister, the Defence Secretary, and the Secretary of State for International Development. The Foreign Secretary held a meeting with Foreign Minister Svilanovic.

  The Government underlined their support for the Federal Republic of Yugoslavia's development as a democratic state and partner in Europe. The FRY needed to cooperate fully with the International Criminal Tribunal for the Former Yugoslavia and send a clear message to Bosnian Serbs that their future lay in Bosnia. Continued positive FRY engagement in Kosovo was necessary, as was a resolution of the constitutional position of Montenegro. Further internal reforms were needed, including in the FRY Army.

  Macedonia/Kosovo Border
  Mr. Wray
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest developments on the Macedonia/Kosovo border. [51240]

  Mr. MacShane
  The situation on the Macedonia/ Kosovo border is stable. A demarcation agreement was signed between the Federal Yugoslav and Macedonian Governments in February 2001. UNMIK and the Macedonian authorities have established a joint committee to agree working arrangements to allow farmers access to their land and to relax Macedonia's visa regime for Kosovo citizens in possession of UNMIK travel documents.

  The UN Interim Administration Mission in Kosovo (UNMIK) and the NATO-led Kosovo Force (KFOR), in conjunction with the Macedonian authorities, have taken action against organised crime and extremism, confiscating arms and ammunition and detaining suspected traffickers.

  Complaints
  Mr. Breed
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many complaints were registered against his Department in(a) 1990 to 1996 and (b) 1997 to 2002; how many are current; and what proportion were (i) taken up and (ii) upheld by the Parliamentary Commissioner for Administration in those periods. [51220]

  Mr. Straw
  [holding answer 19 April 20021]Information on the number of complaints registered and that are current is not held centrally and could be provided only at disproportionate cost.

  However, information on the outcome of statutory investigations that were concluded between 1990 and 1996 is set out in the Parliamentary Ombudsman's Annual Reports. Copies of the Annual Reports covering the period specified are available in the Library.

  Information on the proportion of complaints taken up and upheld by Parliamentary Commissioner for Administration between 1990 and 1996 is not held centrally and could be provided only at disproportionate cost.
  199W
  Between 1997 and 2002 69 complaints were taken up by the Parliamentary Commissioner for Administration. Of these, 44 were either rejected or discontinued and 10 were informally resolved. In the remaining 15 cases, where a full investigation was carried out, the PCA found that three complaints were justified, 10 partly justified and two not justified.

  Complaints received by the Foreign and Commonwealth Office are handled in line with FCO complaints procedure, details of which are publicised on the FCO website at www.fco.gov.uk.

  Voluntary Sector (Funding)
  Mr. Letwin
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the answer to the hon. Member for South-West Bedfordshire of 25 January 2002,Official Report, columns 1185W-86W on Government funding of the voluntary sector, if he will list the grant schemes and other mechanisms by which (a) his Department and (b) the Westminster Foundation for Democracy distributes funding to voluntary sector organisations. [51403]

  Mr. Straw
  [holding answer 19 April 2002]: The FCO may award grants to both national and international voluntary sector organisations from its Conflict Prevention Fund, Human Rights Project Fund, Economic Recovery Fund, Environmental Projects Fund and other funds administered by specific geographical or policy Departments. Individual projects are assessed for awards against criteria based on the FCO's aims and objectives.

  Decisions on support for projects made by the Westminster Foundation for Democracy are made by their board, drawing on the advice of the FCO.

  Zimbabwe
  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 15 April 2002,Official Report, column 724W, on Zimbabwe, if he will make his substantive reply. [51948]

  Mr. Straw
  I refer the right hon. Member to the answer given to my hon. Friend the Member for Stalybridge and Hyde (Mr. James Purnell) on 19 April 2002,Official Report, column 1208W.

DEPUTY PRIME MINISTER

  Non-departmental Public Bodies
  Mr. Bercow
  To ask the Deputy Prime Minister what have been the total salary costs of each of the non-departmental public bodies for which he is responsible in each of the last five years. [50298]

  Mr. Leslie
  The salary costs of the Equal Opportunities Commission can be found in the annual report and accounts for the years in question up to 2000–01. Copies are held in the Library.

  The Cabinet Office currently has 12 advisory NDPBs. Information on the salary costs of these NDPBs is not held centrally and could be provided only at disproportionate cost.

  Family-friendly Working Practices
  Julie Morgan
  To ask the Deputy Prime Minister what recent action he has taken to encourage family-friendly working practices in the civil service with special reference to the weekly hours worked. [48829]

  Mr. Leslie
  Over 14 per cent. of civil servants (some 60,000 staff) now work a flexible hours pattern.

  Officials in the Cabinet Office have been working in partnership with Departments and consultants on work-life balance issues over the last 12 months.

  Projects have been undertaken with the Inland Revenue and Department of Trade and Industry and guidance is being produced for Departments and agencies. These will address issues of particular concern to part-time staff in the Civil Service Diversity Survey:
  'A Managers' Guide to Flexible Working'; and
  'A Compendium of Best Practice for Work Life Balance'.

  These guides are currently in working draft with Government Departments and will be available on the Cabinet Office Diversity website (www.diversity-whatworks.gov.uk) in autumn 2002.

  Departmental Functions
  Mr. Bercow
  To ask the Deputy Prime Minister if he will list the functions of his Department that have been(a) market tested and (b) outsourced in each of the last five years, specifying the (i) money saving and (ii) percentage saving in each case. [43001]

  Mr. Leslie
  In the last five years no Cabinet Office functions were outsourced.

  In that period COI outsourced the following:

  COI Picture Library

  (i) cost saved £32,000 per annum

  (ii) 100 per cent.

  COI Film and Video Library

  (i) cost saved £148,000 per annum

  (ii) 100 per cent.

  Pensions Administration

  (i) cost saved £10,130 per annum

  (ii) 45 per cent.

WORK AND PENSIONS

  Data Protection Act
  Matthew Taylor
  To ask the Secretary of State for Work and Pensions what the policy of the Department is for ensuring responses to requests for information under the Data Protection Act 1998 are completed within 40 days; and what their procedure is to achieve this. [33476]

  Mr. McCartney
  The Department's policy is to reply to all subject access requests as soon as possible and in any event within the 40-day mandatory deadline. The 40 days do not start "ticking" until sufficient information is received from the data subject to satisfy the data controller [DWP] as to the identity of the data subject making the request and to enable him to locate the information that they are seeking.

  Civil Servants
  Mr. Burstow
  To ask the Secretary of State for Work and Pensions if he will set out for each civil service grade within his(a) Department and (b) Department's executive agencies the (i) total number of staff employed, (ii) number aged (A) 16 to 25, (B) 26 to 35, (C) 36 to 45, (D) 46 to 60 and (E) over the age of 60 years,(iii) number of registered disabled and (iv) number of ethnic minorities. [39154]

  Maria Eagle
  I refer the hon. Member to the answer given by my hon. Friend the Parliamentary Secretary for the Cabinet Office (Mr. Leslie) on 13 March 2001 Official Report, column 1072W.

  Verification Framework
  Mr. Kirkwood
  To ask the Secretary of State for Work and Pensions (1) what has been the cost of setting up the verification framework; and what assessment has he made of the costs to local authorities in excess of central Government funding; [42256]

  (2) what have been the costs of setting up and implementing the verification framework; what are the costs of operating the verification framework; and what information he holds about the shortfall in funds from central Government; and what information he has collated about the costs of local authorities in setting up and operating the verification framework. [45126]

  Malcolm Wicks
  The verification framework (VF) was introduced in May 1998 and aims to tighten the gateway onto housing benefit and council tax benefit. It does so through a set of defined standards for collecting and checking evidence before a claim can be paid and during the lifetime of the claim. From April 2002 the VF has been separated into three modules allowing authorities to introduce the scheme incrementally.

  Authorities who apply to join the scheme receive a one-off payment as set-up funding and funding to continue operating once they become fully compliant with the scheme module or modules that they have chosen.

  Details of total sums spent to date are in the table.

  In August 2000, a number of local authorities already compliant with the VF took part in a departmental survey' of the cost to local authorities of setting up and running the framework. The results of the survey indicated that implementation and operating costs vary considerably between local authorities, so it is not possible to provide a generalised estimate of the costs for local authorities.

  Amount spent on set-up and continuing costs for the verification framework

  £000

  Set-up costs

  Continuing costs

  1998–99

  4,900

  580

  1999–2000

  15,465

  13,662

  2000–01

  3,484

  20,898

  2001–02

  7,244

  31,338

  Total to date

  31,093

  66,478

  Notes:

  1. 1998–99, 1999–2000 and 2000–01 data obtained from published departmental accounts.

  2. 2001–02 data obtained from departmental housing benefit/council tax benefit administrative payments system.
  202W
  3. The data does not account for costs repaid after the close of the relevant financial year.

  1 Cost of the Verification Framework, DSS Operational Research, Analytical Services Division 2A, published April 2001.

  Child Support
  Mr. Webb
  To ask the Secretary of State for Work and Pensions (1) if he will estimate when the Child Support Reforms New Rules Implementation computer system will(a) have completed full systems testing, (b) be fully operational, (c) deal with new cases assessed under the new formula and (d) deal with existing cases which are transferred onto the new formula; [43362]

  (2) who has been awarded the contracts for the (a) development, (b) systems testing and (c) maintenance of the Child Support Reforms New Rules Implementation computer system; [43363]

  (3) if he will estimate the (a) number and (b) percentage of non-resident parents who (i) fully comply, (ii) partially comply and (iii) do not comply with the CSA maintenance assessments. [43364]

  Malcolm Wicks
  [holding answer 14 March 2002]: I refer the hon. Member to the statement made to this House by my right hon. Friend, the Secretary of State, on 20 March 2002, Official Report, columns 315–16.

  Employment Zones
  Mr. Clappison
  To ask the Secretary of State for Work and Pensions how many personal job accounts have been established as part of the Employment Zone scheme since its introduction in April 2000. [47931]

  Mr. Nicholas Brown
  The personal job account is the amount spent on a participant in step 2 of the Employment Zone process. Step 2 is the stage at which a costed action plan, developed in step 1, is implemented and the participant undertakes their concentrated jobsearch.

  Between April 2000 and January 2002, 46,399 Employment Zone participants had moved from step 1 to step 2.

  Mr. Clappison
  To ask the Secretary of State for Work and Pensions how many jobseekers have been provided with(a) mobile phones, (b) driving lessons and (c) financial assistance to buy a motor vehicle as part of (i) the Employment Zone initiative and (ii) the Action Teams for Jobs scheme. [47925]

  Mr. Nicholas Brown
  The information requested is not available and could be provided only at disproportionate cost.

  Higher Education
  Hywel Williams
  To ask the Secretary of State for Work and Pensions what discretion local Benefit Agency offices have to discount the availability of student loans when assessing income support for part-time students pursuing higher education courses. [47615]

  Malcolm Wicks
  Since a student loan is intended to help towards everyday living costs it is taken into account as income. However, before the weekly income is assessed, £319 of the annual loan is disregarded towards the cost of travel and £260 towards the cost of books and
  203W
  equipment. In addition, any grants made specifically for these costs are disregarded in full. Once the weekly loan income has been calculated a further £10 a week is disregarded.

  Local offices do not have any discretion to discount student loans as income when assessing entitlement to any income-related benefit. However as part-time students generally receive an annual loan of £500, which is below the amounts allowed for travel, books and equipment, the loan will normally be disregarded in full.

  If a student loan is available, it is taken into account regardless of whether it has been applied for or received. If a loan is not available, a student must provide evidence to that effect.

  Pension Credit
  Dr. Kumar
  To ask the Secretary of State for Work and Pensions (1) what will be the average gain per person for pensioners benefiting from the new pension credit; [48579]

  (2) what advice is available to pensioners about the pension credit and how it can be accessed; [48581]

  (3) if he will make a statement on the benefits of the new pensioner credit for people in Middlesbrough, South and East Cleveland; [48582]

  (4) what impact will the new pension credit have on pensioners receiving housing and council tax benefits; [48583]

  (5) how the savings credit element of the new pension credit will operate. [48584]

  Mr. McCartney
  I refer the hon. Member to the booklet, "The Pension Credit: the Government's proposals" which sets out how pension credit will work. A copy is available in the Library.

  Subject to successful passage of the State Pension Credit Bill, pension credit will be introduced in October 2003. About 4.1 million pensioner households (over 5 million pensioners) will be eligible. On average they stand to gain around £400 a year.

  Pension credit will ensure a guaranteed minimum income for those aged 60 and over so they need not live on less than £100 a week (£154 a week for pensioner couples). It will also ensure that pensioners no longer lose a pound in their benefit for every pound of pensions or other savings they have built up. From age 65 pension credit will give pensioners a cash addition of 60p for every £1 of income they have above the level of basic state pension up to a maximum of £13.80 week (£18.60 a week for couples). Pensioners with incomes up to £135 a week (£200 a week for couples) will benefit.

  The housing benefit and council tax benefit schemes will be modified at a cost of £450 million a year to ensure that people who gain from pension credit do not lose those gains because of knock-on effects. As a consequence, almost 1.9 million pensioner households will be entitled to more help, or entitled to help for the first time, with their rent or council tax from October 2003.

  Private Finance Initiative
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Employment Service IT Partnership by comparison with a non-Private Finance Initiative alternative. [49658]

  Mr. Nicholas Brown
  The savings to public funds were estimated to be £64 million (net present value) over the 10 year life-span of the contract with Electronic Data Systems. These savings were based on the comparison of the estimated costs of continuing to provide the service in-house and were forecast on the basis of planning assumptions known at the time the contract was let.

  Mr. Bercow
  To ask the Secretary of State for Work and Pensions how many Private Finance Initiative projects have been subject to refinancing after the contracts have been signed; and what has been the financial effect in each case. [50287]

  Mr. Nicholas Brown
  None.

  Winter Fuel Payment
  Mr. Webb
  To ask the Secretary of State for Work and Pensions if he will estimate the number of people who had to make a claim for the 2001–02 winter fuel payment; and of that number how many failed to do so by 31 March. [50990]

  Mr. McCartney
  For winter 2001–02, an estimated 500,000 people became newly entitled to a Winter Fuel Payment. At least 255,00 of these people were paid automatically.

  Exact numbers of people who need to claim are not available. However, by the deadline of 30 March, around 220,000 claims forms have been received. It is up to the individual to choose whether to claim.

  Jobcentre Plus
  Mr. Webb
  To ask the Secretary of State for Work and Pensions what plans he has to transfer responsibility for the administration of local authority benefits to Jobcentre Plus offices. [52084]

  Malcolm Wicks
  We are encouraging Jobcentre Plus and local authority managers to build on the framework of liaison and service level agreements that already exist. This will help to ensure the efficient administration of Housing Benefit and Council Tax Benefit, which is so important for many of the people using our services, not least in helping the transition to work.

  New Deal
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions how many people employed by the non-departmental public bodies for which he is responsible under the New Deal for Young People in each of the last four years have subsequently(a) found unsubsidised employment for more than 13 weeks and (b) returned to jobseekers' allowance or other benefits. [49598]

  Mr. McCartney
  The Department sponsors 11 non-departmental public bodies. Of these, only four employ people. The Disability Rights Commission, the
  205W
  Occupational Pensions Regulatory Authority and the Pensions Ombudsman employ around 430 people between them. Many of these have been employed because of their particular expertise in their field. Remploy employs over 10,000 people, the majority of whom are disabled people in supported employment.

  None of these bodies has employed anyone under the New Deal for Young People in the last four years.

LORD CHANCELLOR'S DEPARTMENT

  Special Advisers
  Mr. Burns
  To ask the Parliamentary Secretary, Lord Chancellor's Department, how many times special advisers have accompanied Ministers on overseas visits in each of the last five years; which countries were visited; and what the total cost of each individual visit was. [47143]

  Ms Rosie Winterton
  Since May 1997, the expert adviser for the Lord Chancellor's Department has accompanied a Minister overseas only once. On that occasion the Lord Chancellor, a senior Departmental official, the expert adviser, and a private secretary went to Brussels on official business. The total cost of the visit for the whole party was £1,670.00. All travel by special advisers is undertaken in accordance with the rules set out in the Ministerial Code and the Civil Service Management Code.

  Parliamentary Questions
  Mr. Bercow
  To ask the Parliamentary Secretary, Lord Chancellor's Department, (1) what the cost was to her Department of answering written parliamentary questions in 2001; and how that cost was calculated; [49109]

  (2) how many staff were involved in each of the last three years in preparing draft answers to written parliamentary questions. [49151]

  Ms Rosie Winterton
  I refer the hon. Member to the reply given to him by the President of the Council and the Leader of the House on 17 April 2002,Official Report, column 929W.

  Staff Pay
  Mr. Bercow
  To ask the Parliamentary Secretary, Lord Chancellor's Department what have been the total salary costs of each of the non-departmental public bodies for which she is responsible in each of the last five years. [50293]

  Ms Rosie Winterton
  The answer covers the Legal Services Commission and the Children and Family Court Advisory and Support Service.

  Salary costs for staff working in the Legal Services Commission are set out as follows. The figures include overtime payments, but exclude social security and pension costs, and have been subject to audit.

  1997–98–£24,310,000

  1998–99–£25,563,000

  1999–2000– £25,240,000

  2000–01–£28,775,000

  2001–02–£32,859,000.

  206W
  The Children and Family Court Advisory and Support Service (CAFCASS) came into existence in April 2001. Salary costs for 2001–02 totalled £37,021,259.

  Census Information
  Mr. John Taylor
  To ask the Parliamentary Secretary, Lord Chancellor's Department if she will make a statement on Government policy relating to publication of census information, with special reference to information contained in the website at http://learningcurve.pro.gov.uk/ FocusOn/census/what is/intro.htm printed on the census forms for England and Wales; and what action the Public Record Office has taken to amend the information published on its website. [51181]

  Ms Rosie Winterton
  The specific reference is to the PRO's Learning Curve website, which is an on—line teaching resource, structured to tie in with the History National Curriculum from Key Stages 2 to 5. Its investigation "Focus On…The Census" is intended to encourage schools to consult census material. At one point it states "To encourage people to provide the correct details, the Government has always guaranteed that any personal information will not be made available to the public for 100 years."

  This statement compresses into a single sentence the various assurances which Governments have provided about the confidentiality of census returns at different times. Early census schedules assured individuals that the information collected from them would be published in "General Abstract only" and would not be used for "the gratification of curiosity". Although the precise wording has differed for each census, all assurances given on the forms have been to the effect that information would be kept confidential. In 1966, under Section 5(1) of the Public Records Act, the Lord Chancellor signed Instrument 12 which closed the decennial censuses for 100 years.

  The PRO has now amended the wording on the Learning Curve website in order to increase its clarity.

  Government Funding
  Mr. Letwin
  To ask the Parliamentary Secretary, Lord Chancellor's Department, pursuant to the answer to the hon. Member for South-West Bedfordshire (Andrew Selous) of 25 January 2002,Official Report, columns 1185–86W, on Government funding of the voluntary sector, if she will list the grant schemes and other mechanisms by which the Legal Services Commission distribute funding to voluntary sector organisations. [51413]

  Ms Rosie Winterton
  The Commission funds not for profit organisations in three ways. First it pays not for profit organisations under contract to deliver legal aid services to the public by means of the Community Legal Service Fund. This accounts for most of the payments to the not for profit sector.

  Second the Commission pays grants to not for profit agencies in order to improve the delivery of legal aid services, for example by offering training and support to providers or developing standards to underpin new forms of service.
  207W
  Third under the Partnership Innovation Budget (PIB), which was launched on 8 May 2001, the Commission makes grants on a joint funding basis with other Community Legal Service partner organisations. This scheme helps meet local needs with innovative services that do not fit within current funding mechanisms.

  Data Protection Act
  Norman Baker
  To ask the Parliamentary Secretary, Lord Chancellor's Department what proposals he has to amend the Data Protection Act 1998. [49317]

  Mr. Wills
  I refer the hon. Gentleman to the reply I gave to a question from the hon. Member for Truro and St. Austell (Matthew Taylor) on 19 March 2002,Official Report, column 188W.

PRIVY COUNCIL

  Voting Procedures
  Norman Baker
  To ask the President of the Council if he will propose changes within the House to allow abstentions to be recorded. [49316]

  Mr. Robin Cook
  No.

TRADE AND INDUSTRY

  Greenhouse Gas Emissions Trading Scheme
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry if she will list companies and organisations taking part in the United Kingdom's greenhouse gas emissions trading scheme. [50431]

  Mr. Meacher
  I have been asked to reply.

  34 organisations entered the scheme as direct participants and bid in the auction, held in March 2002.

  It is expected that the number of participants will increase later this year as nearly 6,000 companies with Climate Change Agreements who can chose to use the scheme to meet their targets, or sell any over-achievement, start to participate.

  The 34 Direct participants are:

  Asda Stores Ltd.

  Barclays Bank plc

  Battle McCarthy Carbon Club

  Blue Circle Industries plc

  British Airways plc

  British Sugar plc

  BP plc

  Budweiser Stag Brewing Company Ltd.

  Dalkia plc

  Dana UK Holdings Ltd.

  Dupont (U.K.) Ltd.

  EGNI (Wales) Ltd.

  First Hydro Company

  Ford Motor Company Ltd.

  General Domestic Appliances Ltd.

  GKN (U.K.) plc

  208W

  Imerys Minerals Ltd.

  Ineos Fluor Ltd.

  Kirklees Metropolitan Council

  Land Securities plc

  Lend Lease Real Estate Investment Services Ltd.

  Marks & Spencer plc

  Mitsubishi Corporation UK plc

  Motorola GTSS

  The Natural History Museum

  Quantum Gas Management

  Rhodia Organique Fine Ltd.

  Rolls-Royce plc

  Royal Ordnance plc

  Shell UK Ltd.

  Somerfield Stores Ltd.

  Tesco Stores Ltd.

  UK Coal Mining Ltd.

  WatesGroup.

  Cluster Munitions
  Mr. Berry
  To ask the Secretary of State for Trade and Industry (1) what Open Individual Export licences have been granted since 2 May 1997 for the export of cluster munitions; and if she will provide the(a) number of cluster munitions exported, (b) category codes and (c) final end-use destination; [46156]

  (2) what export licences have been granted since the introduction of the ELATE export licensing system for the export of cluster munitions; and what are (a) the number of cluster munitions exported, (b) the category codes and (c) the final end-use destination; [46247]

  Nigel Griffiths
  Licences issued covering cluster munitions are recorded on the ELATE database under ratings ML3 and ML4. These headings cover a range of other equipment including bombs, torpedoes, rockets, missiles as well as mine clearance equipment (as described on page 310 of the Government's annual report on strategic export controls for 2000). Cluster munitions are not recorded as a separate category in the annual report or on ELATE. For this reason, a breakdown by end use destination of the licences issued covering cluster munitions cannot be provided except at disproportionate cost.

  The DTI's Export Control Organisation records details of licences issued and licences refused. We are reviewing how this information might be better collated.

  Home Safety
  Mr. Drew
  To ask the Secretary of State for Trade and Industry if she will make a statement on what help is available to organisations for safer building and home safety from the modernisation fund. [47910]

  Miss Melanie Johnson
  The DTI's consumer protection Modernisation Fund was launched early in 2001. To date we have earmarked £2.5 million to support local projects which offer practical home safety interventions. Many of the projects involve improvements to make homes safer such as stair handrails, child-proof window locks, home safety checks and installation of smoke alarms. In 2001–02 we supported 12 projects across the UK and provided support to strengthen the
  209W
  capacity of two national home safety charities, the Royal Society for the Prevention of Accidents and the Child Accident Prevention Trust. Applications for awards during 2002–03 closed on 15 February and I will announce the successful projects shortly.

  New Deal
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry how many people employed by the non-departmental public bodies for which she is responsible under the New Deal for Young People in each of the last four years have subsequently(a) found unsubsidised employment for more than 13 weeks and (b) returned to jobseekers' allowance or other benefits. [49611]

  Ms Hewitt
  This information is not available. The Department's non-departmental public bodies do not monitor future employment or otherwise of people taken on under the New Deal for Young People.

  Exports (Tanzania)
  Harry Cohen
  To ask the Secretary of State for Trade and Industry when she was informed that British Aerospace had received down payments for the Tanzanian Air Traffic Control System prior to an export licence being granted; and if she will make a statement. [49740]

  Nigel Griffiths
  This information is commercially confidential and exempt from disclosure under Part 2, Exemption 1 and 13 of the Code of Practice on Access to Government Information.

  Engineering Projects
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry if she will list the projects undertaken by the Engineering Technology Board that her Department plans to support. [49878]

  Mr. Wilson
  Discussions between the Department and the Engineering Technology Board about project support have not, as yet, reached this level of detail. There is agreement in principle that some support will be offered.

  Draft EU Waste Electrical and Electronic Equipment Directive
  Mr. Hammond
  To ask the Secretary of State for Trade and Industry (1) what Government policy is on the financial impact on councils of the draft EU Waste Electrical and Electronic Equipment Directive; [50914]

  (2) what the Government's policy is on (a) individual company responsibility, (b) collective industry responsibility and (c) community responsibility through the general taxation system for costs of collection and recycling of waste equipment as required by the draft EU Waste Electrical and Electronic Equipment Directive. [50919]

  Mr. Wilson
  The UK's approach to the implementation of the directive will depend on the provisions of the directive when finally adopted.

  The Government will consult fully with all stakeholders on implementation options once the final text is available.

  In addition, a further regulatory impact assessment will be carried out to assess the financial and other impacts of the Waste Electrical and Electronic Equipment Directive
  210W
  on local authorities and other stakeholders. Where the costs of EU initiatives fall disproportionately on local authorities, the lead Government Department is responsible for fully funding those costs.

  Mr. Hammond
  To ask the Secretary of State for Trade and Industry (1) what assessment she has made of the impact on the economic viability of(a) individual businesses and (b) defined business sectors from the implementation of the draft EU Waste Electrical and Electronic Equipment Directive; [50916]

  (2) what assessment she has made of the cost to UK business of the draft EU Waste Electrical and Electronic Equipment Directive. [50912]

  Mr. Wilson
  The Department submitted its updated Explanatory Memorandum and partial regulatory impact assessment of the proposal to both Houses on 15 March 2002. The regulatory impact assessment suggests that the costs to business lie in the range of £191 million and £391 million per annum in the UK.

  The European Commission's Explanatory Memorandum suggests that product price increases could he between 1 and 3 per cent. if the costs of the proposal were to be passed on to consumers. Under these circumstances, economic viability of businesses or sectors would not be significantly affected.

  Impacts on the economic viability of businesses or sectors will also depend on domestic implementation structures. The Government will consult all stakeholders while devising implementing legislation.

  ITV Digital
  John Barrett
  To ask the Secretary of State for Trade and Industry what meetings she has had with representatives of(a) Granada plc and (b) Carlton Communications plc since ITV Digital's entry into administration. [50715]

  Mr. Alexander
  Neither I nor the Secretary of State have met representatives of(a) Granada plc and (b) Carlton Communications plc since ITV Digital's entry into administration, though DCMS and DTI officials are keeping abreast of the situation.

  John Barrett
  To ask the Secretary of State for Trade and Industry what assessment she has made of the impact of ITV Digital's entry into administration on the Government's plans for digital television provision in the UK. [50714]

  Mr. Alexander
  The policies and targets which the Government have set for digital TV are not predicated on the actions of any one company. The Digital Television Action Plan sets out a wide range of tasks to be undertaken by Government and various stakeholders in order to achieve our aim for the UK to have the most dynamic and competitive market for digital TV in the G7, and to enable us to meet the criteria set for the switchover from analogue to digital terrestrial transmissions. The action plan is kept under review so that it can be developed to reflect changes in the market.

  John Barrett
  To ask the Secretary of State for Trade and Industry if she has met representatives of ITV Digital since it entered administration. [50713]
  211W
  Mr. Alexander
  Neither I nor the Secretary of State have met representatives of ITV Digital since it entered administration, though DCMS and DTI officials are keeping abreast of the situation.

  Solar Panels
  Ian Lucas
  To ask the Secretary of State for Trade and Industry what plans she has to set a minimum rate at which electricity companies may buy electricity from owners of solar panels. [51194]

  Mr. Wilson
  I have no current plans to set a minimum rate for electricity purchased from owners of solar panels. In a liberalised electricity market suppliers can choose to offer special tariffs for electricity generated from renewable sources, and one or two are already offering equal tariffs for electricity generated from solar panels.

  Ian Lucas
  To ask the Secretary of State for Trade and Industry what incentives are available for people investing in solar energy. [51197]

  Mr. Wilson
  The £20 million First Phase of the Major Photovoltaics Demonstration Programme, which I announced on 26 March, offers incentives to a variety of people and organisations to install solar panels.

  Applications for individual systems of 0.5–5k Wp will be accepted from householders, schools, community groups and SMEs on a rolling basis and 50 per cent. capital grant awards will be automatic, provided that the basic programme criteria are met. Applications for larger individual systems. or for multiple systems (e.g. from housing developers) will be considered on a quarterly competitive call basis. Grant levels will be subject to European Union State Aid rules and will vary from 65 per cent. for public bodies to 40 per cent. for private sector organisations other than SMEs.

  Ian Lucas
  To ask the Secretary of State for Trade and Industry what forecast she has made of the proportion of UK electricity generating capacity which will use solar energy in the next decade. [51192]

  Mr. Wilson
  DTI energy projections cover installed capacity in the electricity supply industry (ESI), which is defined as major power producers and those 'industrial' generators using renewable sources of energy. Latest DTI1 projections for the ESI show zero installed solar PV capacity to 2010.

  Installed UK solar PV capacity in building, non-building and off-grid applications was 1.95MW in 2000. Although no formal projections have been made about growth in this area, existing field trials and the First Phase of the Major PV Demonstration Programme (MDP) should add around 10–15MW of installed capacity over the next three years. This could rise to 200MW over the next decade if the full MDP is implemented.
  1 Energy Projections for the UK, DTI Energy Paper 68. "http://www.dti.gov.uk/energy/energyprojections.htm"

  Ian Lucas
  To ask the Secretary of State for Trade and Industry if she will set a target for the installation of solar panels on domestic properties. [51193]

  Mr. Wilson
  Under the £20 million First Phase of the Major Photovoltaics (PV) Demonstration Programme (MDP), which I announced on 26 March, there is a target for 3,000 domestic roofs to receive solar panels over the 212W
  next three years. The Government will take a decision on whether to proceed with a second phase, and if so the appropriate target for the number of systems, in the light of progress achieved with the first phase.

  In addition, my Department's Domestic PV Systems Field Trial, which is already underway, should see PV systems installed on over 500 roofs by the end of this financial year.

  Sue Doughty
  To ask the Secretary of State for Trade and Industry what the estimated cost is of extending the enhanced capital allowances scheme for energy saving technologies to include(a) solar photovoltaics and (b) onshore and offshore wind; and if she will make a statement. [51507]

  Mr. Wilson
  Solar photovoltaics, onshore and offshore wind already benefit from the Renewables Obligation and exemption from the climate change levy. Except for onshore wind energy, which is already a competitive technology, they also benefit from substantial capital grants. We have no plans to extend enhanced capital allowances to these technologies.

  Sue Doughty
  To ask the Secretary of State for Trade and Industry what the estimated total value is of her Department's capital funding programmes to the UK solar PV industry in each year from 2001 to 2005 for(a) domestic, (b) commercial and (c) industrial applications; and if she will make a statement. [51511]

  Mr. Wilson
  The Domestic Field Trial is supporting the installation of PV systems on over 500 homes from 2001–03 with a budget of £5.4 million, and the Large-Scale Field Trial is supporting the installation of large PV systems on 18 non-residential buildings from 2002–04 with a budget of £4.2 million.

  In addition, the First Phase of the Major PV Demonstration Programme, which the Secretary of State launched on 26 March, will support the installation of PV systems on at least 3,000 homes and 140 non-residential buildings over the years 2002–05, with a budget of £20 million. The budget will be split roughly 2:1 in favour of domestic applications, and the split between commercial, industrial and other large non-residential buildings will be determined by a selection panel on the basis of proposals received in the quarterly competitive call process.

  Pay Statistics
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry what the average gap between men's and women's pay in(a) England and (b) the Buckingham constituency is. [51395]

  Alan Johnson
  (a) According to the 2001 New Earnings Survey (the latest data available), conducted by the Office for National Statistics, average hourly pay for full-time employees, excluding overtime, in England, was £12.18 for men and £9.90 for women, a pay gap of £2.28.

  (b) Estimates for the parliamentary constituency of Buckingham are not available. According to the 2001 New Earnings Survey, average hourly pay for full-time employees, excluding overtime, in the county of Buckinghamshire, was £13.82 for men and £10.33 for women, a pay gap of £3.49.

  Universities (Companies)
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry how many companies were spun out by universities in(a) Buckinghamshire and (b) England in each year since 1997. [51425]

  Ms Hewitt
  The Higher Education Business Interaction Survey shows that there were 220 spinouts in total from universities in England between August 1994 and July 1999, and 139 between August 1999 and July 2000.

  Individual institutions responded to the survey on a confidential basis, so I am not able to supply breakdowns by county.

  National Business Debtline
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry how many calls the National Business Debtline has received(a) in total and (b) from businesses based in the Buckingham constituency in each year since its inception; and what the cost was in each year. [51388]

  Nigel Griffiths
  The table contains the information about the number of national callers and the number from Buckinghamshire.

  Number of calls received:

  Period in which the calls were made

  Nationally

  From Buckinghamshire

  July to December 2000

  2,497

  8

  January to December 2001

  5,933

  34 + 1146 = 180

  January to 11 April 2002

  1,479

  1195

  Total

  9,909

  42 + 1341 = 383

  1 These figures refer to south-east England and not only Buckinghamshire.

  We fund this pilot with £80,000 per annum and the banks provide an additional £102,000 per annum.

  Tax Incentives
  Mr. Watts
  To ask the Secretary of State for Trade and Industry what discussions she has had with the Treasury regarding tax incentives for industries in areas of deprivation. [51374]

  Alan Johnson
  DTI and Treasury Ministers have had a range of discussions about tax issues, including tax incentives relating to deprived areas. In the Budget on 17 April the Chancellor announced the implementation of the Community Investment Tax Credit. He also announced that the Government will abolish stamp duty for all non-residential transfers in the UK's most disadvantaged areas, subject to EU state aids approval. The Budget also confirmed that the Government have committed £20 million to the Community Development Venture Fund, and that the Government remain confident that private investors will contribute a further £20 million.

  Micro-renewable Technologies
  Sue Doughty
  To ask the Secretary of State for Trade and Industry what policy measures, in addition to her Department's capital funding, have been introduced since 1997 to support the development of micro-renewable technologies in the UK; and if she will make a statement. [51510]
  214W
  Mr. Wilson
  In addition to the general support for renewables provided by the Renewables Obligation and Climate Change Levy exemption, there have been a number of initiatives aimed specifically to encourage smaller projects.

  In February, I launched the Community Renewables Initiative to encourage community-based renewable energy projects, many of which are likely to be small.

  Agency Workers
  Mr. Mullin
  To ask the Secretary of State for Trade and Industry when she expects to issue the discussion paper on legal issues relating to employment status; for what reason it has been delayed; and if she will make a statement. [51566]

  Alan Johnson
  I refer my hon. Friend to the answer I gave to the hon. Member for Twickenham on 13 February 2002,Official Report, column 443W. A discussion document is in preparation.

  Mr. Mullin
  To ask the Secretary of State for Trade and Industry what the Government's policy is towards the draft EU law on protection for agency workers; and if she will make a statement. [51565]

  Alan Johnson
  The European Commission published a proposal for a directive on temporary agency workers in March 2002. We are currently studying the proposal to establish whether it protects agency workers without damaging the important contribution agency workers and agencies make to the labour market and to maintaining high levels of employment.

  Employment Relations Act
  Mr. Mullin
  To ask the Secretary of State for Trade and Industry what action the Government have taken under section 23 of the Employment Relations Act 1999; and if she will make a statement. [51567]

  Alan Johnson
  None. We are in the process of undertaking a review of employment status issues pursuant to Section 23. I refer my hon. Friend to the answer I gave to the hon. Member for Twickenham (Dr. Cable) on 13 February 2002,Official Report, column 443W.

  Rural/Urban Definitions
  Mrs. Betty Williams
  To ask the Secretary of State for Trade and Industry what definitions of(a) rural and (b) urban are used by her Department. [51657]

  Alan Johnson
  [holding answer 22 April 2002]: My Department currently uses the broad definitions contained in the Rural and Urban White Papers. However, the Government recognises that there is a need for a more co-ordinated and consistent approach to the categorisation and use of definitions of urban and rural areas. For that reason DEFRA, DTLR, the Countryside Agency and the Office for National Statistics are working together towards a better set of definitions.

  Energy Markets
  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry, pursuant to the answer of 10 April 2002,Official Report, column 381W, on energy markets,

  215W
  what action her Department has taken since May 2001 in regard to bringing the benefits of market liberalisation to rural consumers. [51950]

  Mr. Wilson
  The benefits of energy liberalisation have been extended to rural consumers. Research undertaken by OFGEM shows that 35 per cent. of gas customers and 32 per cent. of electricity customers in rural areas have switched supplier, compared with 38 per cent. of gas customers and 41 per cent. of electricity customers in urban areas. The differences in the rate of customer switching in rural areas are in part due to the inability of consumers in areas without mains gas to take up "dual fuel" deals.

  To address this, the Government have established a working group to look at issues surrounding extension of the gas network, as part of their Fuel Poverty Strategy. The group reported in November 2001 and its report was published on the DTI website http://www2.dti.gov.uk/ energy/gasnetworks/index.htm. The Government are considering how the report's recommendations can best be taken forward.

  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry, pursuant to the answer of 10 April 2002,Official Report, column 380, on energy markets, what her Department's definition of the term 'vulnerable consumers' is. [51952]

  Mr. Wilson
  There is no definition of the term "vulnerable customers" in draft energy market liberalisation legislation under discussion in the European Council and Parliament. Member States will therefore be free to define the term in any national implementing legislation. The definition used in the UK for the purpose of the UK Fuel Poverty Strategy is as follows: "vulnerable households are those at risk of ill-health from cold conditions—older householders, families with children and households who are disabled or suffering from a long-term illness".

  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry, pursuant to the answer of 10 April 2002,Official Report, column 380W, on energy markets, if it is the UK Government's policy not to take a position on individual European Parliament amendments that are not included in the European Commission's revised text. [51951]

  Mr. Wilson
  The UK Government do not take a position on individual European Parliament amendments not included in the Commission's revised text. Approximately 500 amendments to the internal market legislation currently under discussion were tabled by MEPs, around 150 of which were accepted in the European Parliament's Plenary vote. It is now up to the Commission to decide which amendments to accept and to present these to the council in a revised text. It would be pointless to take a position on every amendment as the majority of them will not appear in the revised Commission proposal.

  Correspondence
  David Winnick
  To ask the Secretary of State for Trade and Industry when the hon. Member for Walsall, North will receive a reply to his letter of 19 March concerning correspondence from an engineering firm in Walsall. [51803]
  216W
  Mr. Wilson
  I have answered today.

HOME DEPARTMENT

  Public Appointments
  Helen Jones
  To ask the Secretary of State for the Home Department, pursuant to his answer of 11 March 2002,Official Report, column 717W, on public appointments, what information he receives on possible appointees to non-departmental public bodies prior to their appointment; and what method his Department uses to notify people of their appointment to a non-departmental public body. [44104]

  Angela Eagle
  [holding answer 18 March 2002]: The procedures for making appointments to non-departmental public bodies are governed by the rules set out in the Code of Practice published by the Commissioner for Public Appointments (OCPA). This includes a requirement for each applicant to complete an application form. As well as information relevant to the specific appointment, application forms request information on ethnicity, gender and disability for monitoring purposes. The OCPA Code also requires Departments to ask all applicants to supply information on any political activity in which they have engaged in the five years prior to application.

  Successful applicants receive a letter of appointment. Details of appointments to public bodies are published in press releases at the time of appointment and in the annual report of the non-departmental public body. Details of all appointments to Home Office non-departmental public bodies are published in the Home Office annual report, copies of which are placed in the Library.

  Departmental Contracts
  Dr. Cable
  To ask the Secretary of State for the Home Department if he will list the 30 largest contracts awarded by his Department from(a) May 1997 to April 1998, (b) May 1998 to April 1999, (c) May 1999 to April 2000, (d) May 2000 to April 2001 and (e) May 2001 to the latest date for which figures are available, stating in each case the values of the contracts and the companies with which the contracts were placed. [43681]

  Angela Eagle
  The Home Department is unable to provide the level of detailed information sought on contracts and contract costs. Records are not held centrally and to collate and maintain a central register of contracts awarded across the Home Office and its agencies would incur disproportionate costs.

  Private Medical Insurance
  Mr. Laws
  To ask the Secretary of State for the Home Department how many employees in(a) his Department and (b) his Department's agencies and non-departmental public bodies have had private medical insurance provided for them in each year since 1997–98; what the total cost is; and if he will make a statement. [32316]

  Angela Eagle
  [holding answer 6 February 2002]: The Civil Service Management Code prohibits Departments and agencies from providing staff with private medical insurance. Remuneration for the employees of non-departmental public bodies (NDPBs) is a matter for the

  217W
  non-departmental public body (NDPB) concerned and its sponsoring Department, subject to any statutory provision, but information about these arrangements in Home Office sponsored NDPBs is not collated centrally.

  Asylum Seekers
  Tony Baldry
  To ask the Secretary of State for the Home Department how often in the last three years, and for what purpose, his Department has applied the special urgency provisions in paragraph 22 of circular 18/84 (Development by Government Departments). [48948]

  Angela Eagle
  [holding answer 15 April 2002]: I would refer the hon. Member to the reply I gave the hon. Member for Mid-Worcestershire (Mr. Luff) on 11 April 2002, Official Report, column 567W.

  Non-departmental Public Bodies
  Mr. Bercow
  To ask the Secretary of State for the Home Department what the cost in 2001–02 was of the pay increase to staff in his Department, agencies and the non-departmental public bodies for which he is responsible; and what the cost of the forthcoming increase will be in 2002–03. [50413]

  Angela Eagle
  Costs for 2002–03 are not known as the pay increase for 2002–03 has not yet been agreed. The estimated cost of the pay increase for 2001–02 at the time of the settlement was as follows:

  Core Home Office: £8.57 million.

  Agencies

  Prison Service: £32.1 million.

  Forensic Science Service: £1.3 million.

  United Kingdom Passport Service: £1.7 million.

  Non-Departmental Public Bodies (NDPBs)

  Community Development Foundation: £0.003 million.

  Criminal Injuries Compensation Authority: £0.12 million.

  Criminal Injuries Compensation Appeals Panel: £0.036 million.

  Office of the Immigration Service Commissioner: £0.035 million.

  Police Complaints Authority: Not applicable1

  Police Information Technology Organisation: £0.6 million.

  Youth Justice Board: £0.09 million.

  1 The Police Complaints Authority's staff are on loan from numerous departments and remain on their parent department's payroll and pay settlement dates.

  Prisons
  Mrs. Brooke
  To ask the Secretary of State for the Home Department how many(a) independent custody visitors' groups and (b) lay observers' panels published annual reports in the last year; and if he will make a statement. [49980]

  Beverley Hughes
  I refer the hon. Member to the reply I gave on 7 March 2002,Official Report, column 514W.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department what steps are being taken to improve links between prisons and voluntary sector organisations. [49979]

  Beverley Hughes
  The Prison Service is committed to developing and strengthening its relationship with voluntary and community organisations at all levels. For this reason a national Voluntary Sector Co-ordinator 218W
  (Jo Gordon) was appointed in January 2001. She organised a series of regional consultation events, bringing together staff and volunteers from voluntary and community groups with Prison Service staff. A strategy "Working with the Voluntary and Community Sector" based on ideas and information from the consultation process was published in December 2001. This sets out recommendations for the development and better management of relationships with voluntary and community groups. A Prison Service Order based on the strategy will be issued to establishments in May 2002.

  Further work in hand includes:
  a guide on volunteering in prisons (which will be a companion to the "Guide to Good Practice for Voluntary and Community Organisations Working with Prisons", which was produced jointly with the CLINKS organisation last year):
  an induction pack for voluntary and community sector staff and volunteers new to working in prisons;
  "Get Linked. A Guide to Community Links", produced in partnership with the National Association for the Care and Resettlement of Offenders (Nacro), which will have a specific focus on building links with black and minority ethnic voluntary and community groups;
  a national conference in June 2002 to bring together voluntary and community groups with prison staff and representatives from other criminal justice agencies to review the progress made so far and help plan future developments.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department what the key performance target is for the improvement of prisoners' basic literacy and numeracy skills in the financial year 2001–02. [49990]

  Beverley Hughes
  The target for 2001–02 is for prisoners to achieve 18,000 awards at level 2 for basic skills.

  Secondments
  Norman Baker
  To ask the Secretary of State for the Home Department how many BP employees are on secondment to his Department; for what purposes; on what terms; and how many BP employees have been on secondment to his Department since January 2000. [45885]

  Angela Eagle
  [holding answer 25 March 2002]: For the periods in question no staff were seconded from BP to the Home Department.

  Public Consultation
  Mr. Bercow
  To ask the Secretary of State for the Home Department what new steps his Department took in 2001–02 to consult the users of its services about their wishes and expectations; and if he will publish the findings. [47413]

  Angela Eagle
  [holding answer 10 April 2002]: The Home Department greatly values input from all our users especially with regard to the services we provide. Feedback is used to inform and influence proposals for change, develop services further, improve initiatives and identify best practice.

  Regular checks are made to ensure that services the Home Office provides meet the expectations of their users and we are always looking at ways to improve customer care. The Criminal Records Bureau, for example, used a range of research techniques in 2001–02 such as seminars

  219W
  and customer fora to get a clear picture of customer attitudes and requirements so that they can cater more precisely to those needs.

  The United Kingdom Passport Service regularly issues questionnaires to its customers as a means of tracking customer satisfaction and ran both personal caller and customer awareness surveys last year. The Forensic Science Service has introduced a new approach to monitoring customer satisfaction and will continue to publish the outcome of their biennial customer satisfaction survey in their annual report due to be published in July 2002. The Immigration and Statistics Service, in conjunction with the National Asylum Support Service, consulted asylum seekers about their experiences of the voucher scheme. A report of the findings was published in 2001 and the fieldwork findings will be available on the Home Office website from 8 April 2002.

  Increasing use is made of Home Office websites to request comments or feedback and 'Contact Us' facilities and feedback forms have been introduced.

  Formal consultation exercises are another important way in which the Home Office seeks the views of its customers. Consultation documents are now made available in a variety of formats in order to make it easy for users to respond. Details of all Home Office consultations published in 2001–02 can be found on our website on http://www.homeoffice.gov.uk/atoz/consult papers.htm.

  Performance Targets
  Mr. Bercow
  To ask the Secretary of State for the Home Department (1) what recent assessment he has made of whether the PSA target for completions of accredited offender behaviour programmes in prison will be met; [47224]

  (2) what recent assessment he has made of whether the PSA target for completions of accredited offender behaviour programmes for sex offenders will be met; [47225]

  (3) what recent assessment he has made of whether the PSA target for the number of prisoners participating in treatment programmes will be met by March. [47221]

  Beverley Hughes
  [holding answer 10 April 2002]: The relevant public service agreements (PSA) performance target is that the Prison Service should increase the number of completions of accredited offending behaviour programmes from 3,000 to 6,000 by the end of 2001–02, including an increase from 680 to 1,100 in those completing sex offender treatment programmes.

  The Service also has a key performance target (KPT) of ensuring 5,000 entrants per year to drug treatment programmes by March 2002.

  Final outturns will be known by the end of April 2002.

  Mr. Bercow
  To ask the Secretary of State for the Home Department what the target has been in each of the last five years for efficiency savings as a percentage of total running costs for each of the non-departmental public bodies for which he is responsible; and if the target was met. [49631]
  220W
  Angela Eagle
  Details of performance and efficiency targets agreed between executive non-departmental public bodies and their sponsor departments, and performance against these targets are available in each individual body's annual report. All annual reports are presented to Parliament and copies placed in the Library. The majority of bodies have also posted recent annual reports on their websites.

  Drugs
  Mr. Cox
  To ask the Secretary of State for the Home Department what funding has been made available to the Metropolitan police force to combat the use and supply of illegal drugs in each of the last three years. [48680]

  Mr. Bob Ainsworth
  Within the police force grant, there is not a ring-fenced allocation for combating the misuse of drugs.

  The Metropolitan Police Service has received the following drugs funding, which is in additional to their mainstream budget, specifically used to tackle the supply and misuse of illegal drugs: for arrest referral workers and for treatment for the financial years 2000–01 to 2001–02, £869,214 for workers and £708,480 for treatment in 2000–01, and £869,214 for workers and £708,480 for treatment in 2001–02.

  In 2001–02, £7.5 million was made available to London boroughs from the Communities Against Drugs (CAD) fund, at the start of a new three-year funding programme, a share of which goes to the police. Prior to this, the Metropolitan police was awarded £3.5 million after a successful bid for funding for drugs-related schemes from Targeted Police Initiatives, which was a three-year programme that ended at the start of April 2002.

  Mr. Cox
  To ask the Secretary of State for the Home Department what discussions he has had with the Commissioner of Police of the Metropolis on the use and supply of crack cocaine in the Greater London area. [48684]

  Mr. Denham
  The use of crack cocaine in London is of major concern to both the Government and the police. My right hon. Friend the Home Secretary and the Commissioner (Sir John Stevens) have discussed it at their periodic meeting. Additionally officials from this Department have met regularly with the Metropolitan police to discuss this and other issues, especially in connection with the Metropolitan police's current review of its operations and policy.

  My right hon. Friend the Member for Southampton, Itchen (Mr. Denham) and I have also met Commander Brown of the Metropolitan police who heads Operation Trident.

  Relocation
  Annabelle Ewing
  To ask the Secretary of State for the Home Department what plans he has to relocate executive agencies and non-departmental public bodies under the remit of his Department to Scotland. [47979]

  Angela Eagle
  [holding answer 10 April 2002]: A number of Home Office executive agencies and non-departmental public bodies (NDPBs) have offices in Scotland. These include the Criminal Injuries Compensation Authority, the Forensic Science Service and the United Kingdom Passport Service.
  221W
  NDPBs and agencies are free to decide their location in the light of their business needs, but I am not aware of plans for any Home Office agency or non-departmental public body (NDPB) to relocate to Scotland.

  Robbery Reduction Initiative
  Lembit Öpik
  To ask the Secretary of State for the Home Department what proportion of the Communities Against Drugs Initiative will be used to finance the Robbery Reduction Initiative; and if he will make a statement. [46664]

  Mr. Bob Ainsworth
  Communities Against Drugs (CAD) funding is provided to Crime and Disorder Reduction Partnerships to tackle the impact that drugs has on particular communities. Partnerships will want to consider how CAD and the Robbery Initiative might support each other.

  Television Licences
  Mr. Yeo
  To ask the Secretary of State for the Home Department if he will list the(a) number and (b) total cost of television licences paid for by his Department. [48356]

  Angela Eagle
  [holding answer 10 April 2002]: The number and total cost of television licences for the Home Department are as follows:

  Number of television licences—138

  Total cost of television licences—£15,042.00.

  Private Finance Initiative
  Mr. Bercow
  To ask the Secretary of State for the Home Department (1) what estimate he has made of the total savings to public funds of the private finance initiative contract for Fazakerley (Altcourse) prison by comparison with a non-private finance initiative alternative; [49656]

  (2) what estimate he has made of the total savings to public funds of the private finance initiative contract for Quantum for HM Prison Service by comparison with a non-private finance initiative alternative; [49655]

  (3) what estimate he has made of the total savings to public funds of the private finance initiative contract for Lowdham Grange prison by comparison with a non-private finance initiative alternative; [49653]

  (4) what estimate he has made of the total savings to public funds of the private finance initiative contract for prisons energy (Tranche 1) by comparison with a non-private finance initiative alternative; [49652]

  (5) what estimate he has made of the total savings to public funds of the private finance initiative contract for (a) Marchington prison, (b) Onley prison, (c) Agecroft prison (Forest Bank) and (d) Pucklechurch prison by comparison with a non-private finance initiative alternative; [49648]

  (6) what estimate he has made of the total savings to public funds of the private finance initiative contract for Bridgend (Parc) prison by comparison with a non-private finance initiative alternative. [49657]
  222W
  Beverley Hughes
  Public sector savings under the private finance initiative are calculated by comparing the net present value (NPV) of the project against a public sector comparator (PSC), as shown in the table.

  The overall value of the Quantum contract, which took effect from July 2000, as estimated in the final business case, is approximately £200 million. However, this excludes the value of future business change developments. Against estimated internal prison costs, the estimated cost saving in cash terms is £190 million over the 12 year life of the contract. The net present value of this saving, discounted at 6 per cent. discount value, is £128 million.

  £ million

  Contract

  Public sector comparator

  Net present value

  Savings

  Altcourse (Fazakerley)

  248

  247

  1

  Ashfield (Pucklechurch)

  141

  122

  19

  Dovegate (Marchington)

  292

  241

  51

  Forest Bank (Agecroft)

  234.5

  204.5

  30

  Lowdham Grange

  157

  127

  30

  Parc (Bridgend)

  319

  266

  53

  Rye Hill (Onley)

  209

  154

  55

  Heat Energy Services1

  29

  25

  4

  1 Tranche 1

  Departmental Report
  Mr. Bercow
  To ask the Secretary of State for the Home Department when the 2002 Departmental report will be published. [49576]

  Angela Eagle
  As my right hon. Friend the Chief Secretary to the Treasury (Andrew Smith) said in his answer on 15 April, the 2002 Departmental Report for the Home Office will be published in spring 2002. The exact date will be announced shortly.

  Sunset Clauses
  Mr. Bercow
  To ask the Secretary of State for the Home Department which Bills introduced by his Department in the last five years have contained sunset clauses; and what plans he has for the future use of such clauses. [49622]

  Angela Eagle
  The following Bills introduced by the Home Office in the last five years contained sunset clauses:

  (i) The Football (Disorder) Bill introduced in the Session 1999–2000.

  (ii) The Terrorism Bill introduced in the Session 1999–2000.

  (iii) The Criminal Justice and Police Bill introduced in the Session 2000–2001.

  (iv) The Anti-Terrorism, Crime and Security Bill introduced in the Session 2001–02.

  (v) The Football (Disorder) (Amendment) Bill introduced in the Session 2001–02.

  My right hon. Friend the Secretary of State (Mr. Blunkett) will consider whether a sunset clause is appropriate in the context of any future Bill.

  Sex Offenders
  Mrs. Curtis-Thomas
  To ask the Secretary of State for the Home Department whether prisoners who maintain their innocence and who refuse to attend a sex offenders treatment programme will be(a) denied parole and (b) have limited privileges. [49832]

  Beverley Hughes
  Refusal to participate in the sex offenders' treatment programme as a consequence of a prisoner maintaining his innocence is not of itself a bar to the release of prisoners on parole licence. An assessment of the prisoner's current level of risk is the pre-eminent factor in determining whether he/she may be granted parole. Offending behaviour programmes, such as the sex offender treatment programme, depend upon a prisoner being willing to discuss their offending. Therefore, such programmes are not open to prisoners who deny their guilt. Whilst the absence of reports on a prisoner's progress on such programmes makes it more difficult to make an assessment risk, it should still be possible to make one, taking into account, among other things, the prisoner's attitudes and behaviour during sentence.

  The criteria for earning and retaining privileges will depend on a number of factors, including attitudes to and involvement in sentence planning and a willingness to make constructive use of their time in custody. Where a prisoner refuses, for any reason, to address their offending behaviour this may be relevant when assessing a prisoner's privilege level and may be sufficient to deny a prisoner enhanced status.

  Prisoners
  Mr. Llwyd
  To ask the Secretary of State for the Home Department what measures are being taken to reduce the number of prisoners in prison; and what precautions are being taken to ensure that prisoners do not commit further crimes under the electronic tagging programme. [49318]

  Beverley Hughes
  The Government believe that prison must be used as effectively as possible and targeted where it is most necessary. It should be used for incapacitating dangerous, violent and other serious offenders but prison sentences should be as long as necessary for punishment and public protection, and no longer.

  The reform of the probation service, with its central focus on reducing re-offending means that rigorously enforced community sentences are a real and tough alternative to imprisonment. As part of the work taking forward the recommendations of the Halliday report on the sentencing framework we are looking at new forms of community penalties. We aim to encourage greater use of community penalties for some non-violent offenders such as those convicted of theft and handling or fraud.

  We are addressing the recent increase in female prison population by taking forward the Government's strategy for female prisoners. A cross-Government women's offenders reduction plan is currently being developed by a multi-agency team drawn from across the criminal justice system, which is based in the Home Office.

  Home Detention Curfew and a rigorous assessment process plays an important role by enabling some prisoners to be released from prison, whilst still subject to restrictions placed on their liberty. This facilitates a
  224W
  smoother and more effective integration back into the community and helps offenders to secure employment as soon as possible.

  Prior to release under the Home detention Curfew arrangements, the Probation service undertakes a home circumstances assessment of every prisoner's release address to confirm that the proposed accommodation is suitable for the monitoring equipment, that other persons residing at the address understand the impact of the curfew and have been given the opportunity to raise any issues which they wish to be considered, and that there are no issues relating to victims which would give cause for concern if the prisoner were to be curfewed to that address. Following release, each curfew is offered an interview to discuss the curfew requirements and to offer advice on any resettlement arrangements, including providing contact or access to local support groups and a Probation Service `helpline' contact.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department what the Prison Service's policy is on the evaluation and accreditation of psychological interventions for prisoners; and under what circumstances unevaluated projects are allowed to continue. [49989]

  Beverley Hughes
  The Prison Service's policy in relation to psychological interventions with prisoners is that these should be carried out in line with the standards for applied psychologists set by the British Psychological Society. Individual assessment and intervention work should be carried out under the supervision of a Chartered Psychologist.

  Group based interventions aimed at reducing the risk of re-offending are subject to scrutiny by a panel of Prison Service, Probation Service and external practitioners and academics with expertise in relevant areas of work. Members are drawn from a range of disciplines. Group based interventions involve an assessment of clinical impact and are also audited to assess the degree of compliance with agreed national standards.

  Group based interventions that have not been evaluated may be supported where they meet specific needs not addressed by currently available groups. However, the prison and probation services are committed to an evidence based practice approach, for both individual and group based interventions.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department how many applications were made by juvenile prisoners to see the board of visitors in 2001, broken down by institution. [49974]

  Beverley Hughes
  This information is not held centrally.

  Public Service Agreements
  Mr. Bercow
  To ask the Secretary of State for the Home Department if he will list the public service agreement targets which have been revised and those which have been introduced since the publication of the 2001 departmental report. [43246]

  Angela Eagle
  The Home Office's public service agreement (PSA) targets are listed. These were set in the 2000 Spending Review. There have been no changes since the publication of the 2001 Home Office Departmental Report except those resulting from the Machinery of Government changes shown.
  225W
  PSA Target

  1. Reduce the key recorded crime categories of:

  Vehicle crime by 30 per cent. by 2004;

  Domestic burglary by 25 per cent. with no local authority area having a rate more than three times the national average, by 2005; and

  Robbery in our principal cities by 14 per cent. by 2005.

  2. Ensure by 2004 that the levels of fear of crime in the key categories of violent crime, burglary and car crime, reported in the British Crime Survey (BCS), are lower than the levels reported in the 2001 BCS.

  3. Reduce by 2004 the economic cost of crime, as measured by an indicator to be developed by March 2001.

  4. Disrupt 10 per cent. more organised criminal enterprises by 2004.

  5. Improve the level of public confidence in the Criminal Justice System (CJS) by 2004, including improving that of ethnic minority communities.

  6. Increase the number and proportion of recorded crimes for which an offender is brought to justice.

  7. Improve by 5 percentage points the satisfaction of victims and witnesses with their treatment by the CJS by 2002 and thereafter at least maintain that level of performance.

  8. Reduce by 2004, the time from arrest to sentence of other outcome by:

  Reducing the time from charge to disposal for all defendants, with a target to be specified by 31 March 2001;

  Dealing with 80 per cent. of youth court cases within their time targets; and halving from 142 to 71 days by 2002 the time taken from arrest to sentence for persistent young offenders and maintaining that level thereafter.

  9. Reduce the rate of reconviction:

  of all offenders punished by imprisonment or community supervision by 5 per cent. in 2004 compared with the predicted rate; and

  of all young offenders by 5 per cent. in 2004 compared with the predicted rate.

  10. Maintain the current low rates of prisoner escapes including no Category A escapes.

  11. Reduce the proportion of people under the age of 25 reporting the use of Class A drugs by 25 per cent. by 2005 (and by 50 per cent. by 2008).

  12. Reduce the levels of repeat offending among drug-misusing offenders by 25 per cent. by 2005 (and by 50 per cent. by 2008).

  13. Ensure that by 2004, 75 per cent. of substantive asylum applications are decided within two months.

  14. Enforce the immigration laws more effectively by removing a greater proportion of failed asylum seekers.

  15. Make substantial progress by 2004 towards one million more people being actively involved in their communities.

  16. Promote race equality, particularly in the provision of public services such as education, health, law and order, housing and local government, and measure progress by the annual publication of Race Equality in Public Services, a set of race equality performance indicators across the public sector; and achieve representative work forces in the Home Office and its police, probation and prison services.

  17. Ensure annual efficiency gains by police forces are worth in total at least 2 per cent. of overall police spending in that year.

  18. Reduce the incidence of accidental fire-related deaths in the home by 20 per cent. averaged over the five-year period to March 2004 compared with the average recorded in the five-year period of March 1999.1

  1 Following Machinery of Government changes, this target has been transferred from the Home Office to the Department of Transport, Local Government and the Regions.

HEALTH

  Mortality Rate
  David Hamilton
  To ask the Secretary of State for Health how many deaths have occurred in the Midlothian constituency since 1990. [27189]

  Mr. Foulkes
  I have been asked to reply. The information requested is not available in relation to the Midlothian parliamentary constituency. However, the number of deaths in the Midlothian local authority area (Midlothian District Council before 1 April 1996 and Midlothian Council since then) is as follows:

  Males

  Females

  Persons

  1990

  408

  416

  824

  1991

  390

  459

  849

  1992

  402

  378

  780

  1993

  437

  424

  861

  1994

  370

  407

  777

  1995

  417

  441

  858

  1996

  406

  448

  854

  1997

  405

  414

  819

  1998

  456

  417

  873

  1999

  393

  434

  827

  2000

  423

  422

  845

  If my hon. Friend requires further statistical information on this matter, he may wish to approach the General Register Office for Scotland.

  Visual Impairment
  Mr. Boswell
  To ask the Secretary of State for Health what response he has sent to the recent submission by the Improving Lives Coalition on priorities in health and social care for blind and partially sighted people. [40893]

  Jacqui Smith
  [holding answer 7 March 2002]: A major conclusion of Improving Lives was that large numbers of people who are eligible for registration as blind or partially sighted are not registered. We recognise this problem and the Department has set up a group to investigate ways to improve the way we notify and register sight loss. This group includes representatives of several members of the Improving Lives Coalition.

  We have also awarded the Royal National Institute of the Blind (RNIB) and the Guide Dogs for the Blind Association (GDBA) jointly a project grant to develop visual care standards based on Improving Lives.

  Capacity
  Brian Cotter
  To ask the Secretary of State for Health what funding has been made available to each local health authority to increase capacity for the treatment of patients. [40492]

  Mr. Hutton
  [holding answer 7 March 2002]: In 2002–03 £425 million has been earmarked to expand acute capacity, increase activity levels and reduce waiting. This is in addition to funding from general allocations which can be spent to deliver waiting times by agreement

  227W
  between primary care trusts (PCTs), health authorities (HAs) and NHS trusts and their partners locally. The earmarked funding will be used to:
  Expand local capacity by expanding diagnostic and treatment centres and/or buying into spare capacity in public or private services locally or nationally;
  Commission extra activity
  Pay for the consequential costs in community health and social care of this extra activity.

  In addition, capital funding of £179 million in 2001–02 and £329 million in 2002–03 for increasing activity and providing diagnostic and treatment centres was issued as part of general capital allocations. PCTs, HAs and NHS trusts and their local partners agree how the general capital allocation is spent.

  The heath authority total allocations and earmarked funding for capacity are given in the table.

  2002–03 HA total allocations and earmarked funding for capacity

  £000

  Health authority

  Total allocation

  Earmarked funding for capacity

  Bradford

  414,737

  4,306

  Calderdale and Kirklees

  480,687

  4,986

  County Durham

  540,526

  5,649

  East Riding

  474,977

  4,816

  Gateshead and South Tyneside

  332,463

  3,391

  Leeds

  6,28553

  6,285

  Newcastle and North Tyneside

  436,790

  4,393

  North Cumbria

  261,665

  2,676

  North Yorkshire

  566,781

  5,931

  Northumberland

  257,298

  2,626

  Sunderland

  268,228

  2,702

  Tees

  485,772

  5,041

  Wakefield

  277,810

  2,848

  Barnsley

  207,257

  2,155

  Doncaster

  259,726

  2,634

  Leicestershire

  682,748

  7,262

  Lincolnshire

  519,957

  5,378

  North Derbyshire

  300,013

  3,056

  North Nottinghamshire

  313,543

  3,226

  Nottingham

  519,138

  5,408

  Rotherham

  210,533

  2,147

  Sheffield

  477,104

  4,777

  South Derbyshire

  448,542

  4,724

  South Humber

  258,993

  2,591

  Bedfordshire

  414,926

  4,484

  Cambridgeshire

  525,529

  5,529

  Hertfordshire

  802,649

  8,241

  Norfolk

  611,615

  6,346

  North Essex

  668,052

  7,002

  South Essex

  554,308

  5,876

  Suffolk

  519,352

  5,352

  Barking and Havering

  333,897

  3,421

  Barnet, Enfield and Haringey

  725,055

  7,604

  Bexley, Bromley and Greenwich

  635,109

  6,180

  Brent and Harrow

  432,599

  4,293

  Camden and Islington

  477,910

  4,584

  Croydon

  274,247

  2,881

  Ealing, Hammersmith and Hounslow

  676,038

  6,890

  East London and the City

  702,986

  7,391

  Hillingdon

  203,317

  2,063

  Kensington, Chelsea and Westminster

  436,168

  4,787

  Kingston and Richmond

  284,506

  2,939

  Lambeth, Southwark and Lewisham

  829,552

  8,099

  Merton, Sutton and Wandsworth

  563,125

  5,655

  Redbridge and Waltham Forest

  399,542

  3,951

  Berkshire

  588,572

  6,340

  Buckinghamshire

  493,959

  5,264

  East Kent

  521,292

  5,226

  East Surrey

  324,719

  3,217

  East Sussex, Brighton and Hove

  666,721

  6,724

  228W

  2002–03 HA total allocations and earmarked funding for capacity

  £000

  Health authority

  Total allocation

  Earmarked funding for capacity

  Isle of Wight, Portsmouth and South East Hampshire

  561,429

  5,692

  North and Mid Hampshire

  381,685

  3,969

  Northamptonshire

  429,544

  4,450

  Oxfordshire

  445,458

  4,713

  Southampton and South West Hampshire

  432,174

  4,475

  West Kent

  744,108

  7,606

  West Surrey

  485,877

  4,835

  West Sussex

  618,829

  6,302

  Avon

  774,501

  7,987

  Cornwall and Isles of Scilly

  416,197

  4,213

  Dorset

  582,186

  5,874

  Gloucestershire

  432,361

  4,352

  North and East Devon

  393,334

  4,019

  Somerset

  379,361

  3,916

  South and West Devon

  499,768

  5,045

  Wiltshire

  453,698

  4,671

  Birmingham

  900,062

  9,196

  Coventry

  267,745

  2,773

  Dudley

  241,721

  2,491

  Herefordshire

  130,657

  1,347

  North Staffordshire

  403,322

  4,154

  Sandwell

  268,794

  2,757

  Shropshire

  326,945

  3,416

  Solihull

  158,220

  1,629

  South Staffordshire

  421,814

  4,406

  Walsall

  217,042

  2,256

  Warwickshire

  381,972

  3,909

  Wolverhampton

  212,684

  2,193

  Worcestershire

  393,056

  4,073

  Bury and Rochdale

  332,127

  3,413

  East Lancashire

  461,132

  4,700

  Liverpool

  453,913

  4,497

  Manchester

  461,845

  4,593

  Morecambe Bay

  268,369

  2,644

  North Cheshire

  261,550

  2,614

  North West Lancashire

  424,129

  4,276

  Salford and Trafford

  407,159

  4,076

  Sefton

  254,961

  2,481

  South Cheshire

  531,913

  5,382

  South Lancashire

  247,205

  2,509

  St. Helen's and Knowsley

  310,547

  3,171

  Stockport

  231,170

  2,390

  West Pennine

  392,430

  4,075

  Wigan and Bolton

  494,170

  5,193

  Wirral

  297,121

  2,920

  Total England

  41,468,469

  425,000

  Ministerial Design Champion
  Bob Spink
  To ask the Secretary of State for Health what meetings the Ministerial Design Champion for his Department has attended in her capacity as Design Champion in the last month; and if he will make a statement. [41962]

  Ms Blears
  My noble Friend the Parliamentary Under-Secretary of State for Health (The Lord Hunt of Kings Heath) has recently replaced my hon. Friend the Parliamentary Under-Secretary for Health (Yvette Cooper) as the Ministerial Design Champion for the Department of Health. He attended the last Ministerial Design Champion meeting on 17 January 2002 chaired by Lord Falconer and will be attending the next meeting on 22 May 2002.
  229W
  In his capacity as Ministerial Design Champion, Lord Hunt will:
  Deliver the opening speech at the Primary Healthcare Design conference 1 May 2002. This conference has been organised by CABE (Commission for Architecture and the Built Environment) and The Kings Fund regarding the value of quality design in producing a healing environment, to an audience made up of key decision-makers from Primary Care Trusts.
  Deliver the keynote address at the Health Facilities Management Association (HEFMA) annual conference 23 May 2002. This will provide the Minister with an opportunity to further raise the profile of design excellence to an audience of facilities decision-makers who are charged with delivering services at Trust level.
  Work closely with the NHS and Architectural bodies, personally mentoring two projects being Walsall Design Exemplar and a South Manchester Primary Care Trust development.

  Mixed Sex Wards
  Mr. Burns
  To ask the Secretary of State for Health how many mixed sex wards there are at Broomfield Hospital, Chelmsford. [41920]

  Jacqui Smith
  [holding answer 11 March 2002]: Patients at Broomfield Hospital, part of Mid Essex Hospital Services NHS Trust, are treated on wards that are divided into single-sex bays containing four or six beds. All wards have separate toilet and bathroom facilities for male and female patients.

  As part of the plans for the development of Broomfield Hospital, the Trust is planning to have single gender wards.

  The Trust is aware of the need to maintain the privacy and dignity of patients at all times and places great emphasis on the need to segregate male and female patients.

  Learning Disability Strategy
  Mr. Boswell
  To ask the Secretary of State for Health what arrangements he has made for the publication of the annual report to Parliament on the implementation of the Learning Disability Strategy, with specific reference to the use of the Learning Disability Task Force and the occurrence of Learning Disability Week annually in June. [41998]

  Jacqui Smith
  [holding answer 12 March 2002]: Section 62 of the Health and Social Care Act 2001 requires my right hon. Friend the Secretary of State to lay before Parliament annually a report
  "containing such information as he considers appropriate with respect to the development of health and social services for persons with learning disability".

  I have agreed that the Learning Disability Task Force should report to me annually on its work overseeing the implementation of the proposals in the White Paper "Valuing People: A New Strategy for Learning Disability for the 21' Century" published in March 2001.

  I am currently considering how the timing and presentation of these two reports can best reflect recent developments in the provision of learning disability services.

  Public-private Partnerships (Consultants)
  Mr. Bercow
  To ask the Secretary of State for Health what the total external spending by his Department was on public-private partnership consultants in each of the last four years; how many full-time equivalent consultants were employed over this period; how many billed consultancy days there were per year; what the implied average cost of each PPP consultant was; how many consultancy firms were used by his Department over this period; and if he will make a statement. [43191]

  Mr. Hutton
  I refer the hon. Member to the response I gave him on 5 March 2002,Official Report, column 280W, which listed the total external spend on private finance initiative consultancy work from 1998 to date.

  NHS Treatment (Travel Costs)
  Mr. Andrew Turner
  To ask the Secretary of State for Health what arrangements are in place to provide assistance with the costs of travel to hospital for NHS treatment to residents of the Isle of Wight in receipt of(a) income support and (b) jobseeker's allowance. [43242]

  Ms Blears
  The hospital travel costs scheme, part of the NHS low income scheme, provides financial assistance for patients in receipt of a qualifying benefit, for travel to hospital for NHS treatment under the care of a consultant. Income support and income-based jobseeker's allowance are qualifying benefits for the hospital travel costs scheme. The scheme provides full or partial reimbursement of travel costs throughout England.

  Hearing Aids
  Mr. Hunter
  To ask the Secretary of State for Health if he will list the sites which will have the necessary training and equipment in place to fit digital hearing aids provided through the NHS contract from 2003–04. [43624]

  Jacqui Smith
  I announced the sites which will be joining the Modernising Hearing Aid Services project this financial year on 10 April 2002,Official Report, column 465W. We will shortly be approaching all those trusts not currently involved in the project to invite them to put themselves forward to receive the training and equipment necessary to prepare them to join the project after April 2003. An announcement will be made in due course.

  Mr. Hunter
  To ask the Secretary of State for Health which NHS trusts(a) provide digital hearing aids and (b) will be fitting digital hearing aids by the end of 2002–03. [43623]
  231W
  Jacqui Smith
  The following 20 trusts are currently providing digital hearing aids as part of the Modernising Hearing Aid Services project.

  Addenbrookes NHS Trust

  James Paget Healthcare NHS Trust

  Royal National Throat Nose and Ear Hospital

  Whipps Cross University Hospital NHS Trust

  Bradford Hospitals NHS Trust

  Leeds Teaching Hospitals NHS Trust

  City Hospitals Sunderland NHS Trust

  Trafford Healthcare NHS Trust

  Morecambe Bay Hospitals NHS Trust

  Royal United Bath Hospital NHS Trust

  United Bristol Healthcare NHS Trust (Children)

  Royal Cornwall Hospitals NHS Trust

  East Berkshire Community Health NHS Trust

  Royal Berkshire and Battle Hospitals NHS Trust

  Winchester and Eastleigh Healthcare NHS Trust

  Queens Medical Centre University NHS Trust Nottingham

  The Kings Mill Centre for Healthcare Services NHS Trust

  Sheffield Children's Hospital NHS Trust (Children)

  University Hospital Birmingham NHS Trust

  Royal Shrewsbury and Princess Royal Hospitals NHS Trust.

  In addition an announcement was made on 10 April of those trusts who will be joining the project this financial year, 10 April 2002, Official Report, column 465W.

  We know that a number of other trusts are obtaining digital hearing aids through the NHS contract and that others are providing digital aids outside of that contract. Full details are not available centrally.

  North and East Yorkshire and Northern Lincolnshire Health Authority
  Mr. Greg Knight
  To ask the Secretary of State for Health what the expected overall cost is of locating the headquarters of the North and East Yorkshire and Northern Lincolnshire Health Authority at York. [43976]

  Jacqui Smith
  The cost incurred in provisionally locating and establishing the Strategic Health Authority (StHA) HQ for North and East Yorkshire and Northern Lincolnshire is for the rent of two offices in the York Science Park for February and March 2002. This will be approximately £3,500. This is the Project Office for the Strategic Health Authority pending a discussion about its permanent location.

  On 20 March 2002, the StHA shadow Board discussed the option appraisal and work in progress to produce an outline business case for a permanent location. It was unanimously agreed that appropriate criteria had been used to inform the option appraisal on the location of the StHA and that the decision made by the Chairman and Chief Executive (Designate) that the York Science Park be the permanent location, was supported. Formal consideration of the outline business case was part of the first StHA Board meeting on 18 April 2002.

  National Care Standards
  Mr. Burstow
  To ask the Secretary of State for Health, pursuant to his answer of 12 March 2002,Official Report, column 1037W, on national care standards, what estimate
  232W
  he has made of the costs (a) per establishment and (b) per room of the implementation of the regulatory impact assessment for adult placements; and if he will make a statement. [44674]

  Jacqui Smith
  [holding answer 21 March 2002]: The environmental standards for adult placements reflect the domestic nature of these placements and represent a lighter touch approach to regulation for this sector. We expect the implementation cost to be minimal. The costs of implementing environmental standards for adult placements was covered in the overall totals set out within the Regulatory Impact Assessment for Care Homes placed in the Library on 21 January 2002.

  Police Checks
  Mr. Burstow
  To ask the Secretary of State for Health what steps he is taking to resolve the difference between the National Minimum Standard 29.3 in respect of police checks and the regulations giving effect to the standard. [44770]

  Jacqui Smith
  [holding answer 21 March 2002]: Regulation 19 of the Care Homes Regulations sets out the requirement that a satisfactory Criminal Records Check must be received by a provider before he may employ someone to work in the home. Standard 29.3 can be interpreted to mean that a care worker could be offered a job subject to receipt of a check. It is not intended to imply that people can be employed prior to receipt of that check which is prohibited by regulation.

  Government Information
  Tony Wright
  To ask the Secretary of State for Health if he will list the administrative manuals and internal guidance which his Department has made public as required by Part 1 of the Code of Practice on Access to Government Information; and which of these were first made available after May 1997. [45398]

  Ms Blears
  Information on a large number of administrative manuals and internal guidance already exists in the public domain on the Department of Health internet site at www.doh.gov.uk and in particular in the:Publications on the internet site (POINT) at www.doh.gov.uk/ publications/pointh.html, and
  Circulars on the internet site (COIN) at http://www.doh.gov.uk/ publications/coinh.html

  Work is in hand to identify significant gaps and meet the code provisions in full in preparation for the issue by November 2002 of a publication scheme, as required under the Freedom of Information Act 2000.

  Failing Hospitals
  Mr. Hancock
  To ask the Secretary of State for Health how the appointment of new managers to failing hospitals will be decided; what system of assessment was used to rate those hospitals with a no star rating; and if he will make a statement. [46029]

  Ms Blears
  Twelve national health service trusts were categorised as zero-star rated. The system of rating used to assess their performance in 2000–01 was published in September 2001. The 12 trusts are required to provide action plans setting out how they are going to achieve the level of performance improvement required. Each of
  233W
  the action plans were assessed by the Department at the end of 2001 together with the level of performance improvement achieved by each of the trusts since the ratings were published. Where appropriate the Department additionally used the progress reports provided by the Commission for Health Improvement (CHI).

  Following the assessment it was decided that five of the trusts should be made subject to franchise arrangements. The performance of the remaining seven trusts is being closely monitored to ensure that their action plans are successfully delivered. Support will continue to be provided, where required, by the Modernisation Agency.

  The process to appoint new managers under franchising arrangements is underway. Candidates have been invited to apply if they are experienced national health service managers with a good track record for delivery. They are being shortlisted for specific national health service trusts, taking into account their expressed preferences and individual skills. Shortlisted candidates are being given a month to draw up a franchise plan.

  A register of interest from non-national health service bodies will be in place by the summer so that future franchises can draw on a wider pool of expertise and experience.

  Adult Protection
  Mr. Burstow
  To ask the Secretary of State for Health what allocation of(a) staff and (b) cash resources has been given to each police force in England for the referral of cases of adult abuse under the No Secrets guidance; and if he will make a statement. [45636]

  Jacqui Smith
  [holding answer 26 March 2002]: The local implementation of the 'No Secrets' guidance is unlikely to have significant resource consequences for local police forces and therefore no additional resources have been allocated.

  User Consultation
  Mr. Bercow
  To ask the Secretary of State for Health what new steps his Department took in 2001–02 to consult the users of its services about their wishes and expectations; and if he will publish the findings. [47305]

  Ms Blears
  [holding answer 10 April 2002]: A programme of National Health Service trust-based patient surveys began in January this year, with all acute hospital trusts carrying-out a specially designed survey which seeks the views of a randomly selected group of patients—about 500 in each trust. This will become an annual survey. The main areas covered include; admissions, nature of the hospital ward, staff attitudes, care & treatment (pain management etc), leaving hospital and how the patient feels after their experience.

  The acute survey results will be used to:
  (i) inform the national NHS performance ratings, ensuring that patient experience is a key element in determining the ratings given to trusts
  (ii) feedback directly to trusts, where service improvement programmes will pick up on the findings of the survey and will then be used to deliver year on year quality improvements. Here, it is envisaged that, the new 'patient prospectus' (to be distributed to local communities this autumn onwards), will be an important vehicle to convey the survey findings to staff and
  234W
  the public. Then, through the liaison of the Trust board and (subject to legislation) the new 'Patient Forum', an action plan will be established which takes forward the issues identified, and outlines how real improvements to the quality of the patient experience will be delivered within the trust. At the national level, a survey of coronary heart disease (CHD) patients reported during year 2000, (fieldwork having taken place during 1999). The survey looked at the quality of NHS care for both inpatients and day patients treated for CHD. The results were published on the Department's website and fed back to participating trusts, thus providing a national overview of patients' opinions of their treatment. A further national survey—looking at the experience of cancer services patients, was carried out in 2001 and will report later this year to individual trusts, the 'cancer networks' and via the website. A general practitioner patient survey is also taking place this year (began January '02). As with the acute IP survey above, this will inform both the national performance ratings in the summer, and improve the quality of primary care/GP services, via feedback to all existing primary care organisations, so that appropriate actions can be taken. Next year (reporting 2003) a more specialised survey will be devised to better relate to the comprehensive range of primary care trust-based services.

  Performance Targets
  Mr. Bercow
  To ask the Secretary of State for Health what the target has been in each of the last five years for efficiency savings as a percentage of total running costs for each of the non-departmental public bodies for which he is responsible; and if the target was met. [49635]

  Ms Blears
  The information sought is available in the annual reports and accounts of these bodies, which are available in the Library.

  Mr. Bercow
  To ask the Secretary of State for Health what recent assessment he has made of whether the target to reduce by 20 per cent. by 2001–02 the number of absences by staff caused by violence will be met. [47362]

  Ms Blears
  [holding answer 10 April 2002]: The Department conducted a survey of sickness absence, accidents and violence in national health service trusts in England in 1998–99. The survey found that there were approximately 65,000 violent incidents against NHS trust staff recorded each year. A further survey of recorded violent incidents in 2000–01 has been conducted, and the figures are currently being analysed by the Department. The figures will be published as soon as the Department is satisfied the figures are sufficiently robust and reflect NHS trust mergers and other organisational changes in the NHS. The 2000–01 figures will form the baseline for measuring progress against the Government's national improvement targets.

  Information on levels of sickness absence resulting from violence at work is not collected centrally, but may be held at a local level by individual national health service employers.

  Overtime
  Mr. Bercow
  To ask the Secretary of State for Health what his policy is on overtime payments for staff in his Department. [49128]
  235W
  Mr. Hutton
  The policy of the Department is to recompense staff who work more than their contracted hours either by payment of overtime or by giving time off in lieu of the hours worked. Overtime is not paid to Senior Civil Servants and other senior managers.

  PFI/PPPs
  Mr. Bercow
  To ask the Secretary of State for Health (1) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Hereford Hospitals NHS Trust by comparison with a non-Private Finance Initiative alternative; [49539]

  (2) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the north-west and west central community units for the elderly for the Leeds Community and Mental Health Services NHS Trust by comparison with a non-Private Finance Initiative alternative; [49507]

  (3) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the rationalisation of in-patient services for the South Manchester University Hospital NHS Trust by comparison with a non-Private Finance Initiative alternative; [49531]

  (4) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for single site development for the South Tees Acute Hospitals NHS Trust by comparison with a non-Private Finance Initiative alternative; [49537]

  (5) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Cumberland Infirmary, Carlisle for the North Cumbria Acute Hospital NHS Trust by comparison with a non-Private Finance Initiative alternative; [49505]

  (6) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Bromley NHS Trust—New Hospital for the Bromley Hospitals NHS Trust by comparison with a non-Private Finance Initiative alternative; [49529]

  (7) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Bishop Auckland redevelopment for the South Durham Health Care NHS Trust by comparison with a non-Private Finance Initiative alternative; [49541]

  (8) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the new hospital for the North Durham Health Care NHS Trust by comparison with a non-Private Finance Initiative alternative; [49533]

  (9) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the acute general hospital development for Dartford and Gravesham hospital by comparison with a non-Private Finance Initiative alternative; [49504]

  (10) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Mancunian Community Trust—Primary Care for the Mancunian NHS Trust by comparison with a non-Private Finance Initiative alternative; [49528]
  236W
  (11) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Barnet hospitals for the Barnet and Chase Farm Hospitals NHS Trust by comparison with a non-Private Finance Initiative alternative; [49540]

  (12) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Calderdale Redevelopment for the Calderdale Healthcare NHS Trust by comparison with a non-Private Finance Initiative alternative; [49532]

  (13) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Worcestershire new hospital for the Worcester Acute Hospitals NHS Trust by comparison with a non-Private Finance Initiative alternative; [49538]

  (14) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Wycombe and Amersham developments for the South Buckinghamshire NHS Trust by comparison with a non-Private Finance Initiative alternative; [49506]

  (15) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the Queen Elizabeth Hospital, Woolwich for the Greenwich Healthcare NHS Trust by comparison with a non-Private Finance Initiative alternative. [49530]

  Mr. Hutton
  I refer the hon. Member to my answers of 11 March 2002,Official Report, columns 833–34W and of 22 November 2001, Official Report, columns 411–13W in which are listed all the major private finance initiative contracts that have reached financial close since May 1997, with figures for the projected savings on each.

  Mr. Bercow
  To ask the Secretary of State for Health what the difference was between the price offered in reaching preferred bidder stage and the final contract price for PPP contracts let by his Department in each of the last four years; and if he will make a statement. [45606]

  Ms Blears
  [holding answer 25 March 2002]: To collect this information for all contracts let by NHS trusts other than for the major PFI schemes would involve disproportionate cost. I refer the hon. Member to the response I gave him on 19 April 2002, Official Report, column 1245W.

  Mr. Bercow
  To ask the Secretary of State for Health (1) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for new facilities for the Newham NHS Trust by comparison with a non-Private Finance Initiative alternative; [49535]

  (2) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the front entrance to Mayday Healthcare by comparison with a non-Private Finance Initiative alternative; [49515]

  (3) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the ACAD Equipment for the North West London NHS Trust by comparison with a non-Private Finance Initiative alternative; [49524]
  237W
  (4) what estimate he has made of the total savings to public funds of the Private Finance Initiative contract for the reprovision of mental health for Oxleas NHS Trust by comparison with a non-Private Finance Initiative alternative. [49534]

  Net present costs of PSC v. PFI option

  Trust

  PFI £000

  Public £000

  £000

  % difference

  Newham Healthcare NHS Trust1

  —

  —

  —

  —

  Mayday Healthcare NHS Trust

  2,495

  2,564

  69

  2.7

  Oxleas Healthcare NHS Trust

  227,325

  234,848

  7,523

  3.2

  North West London Hospitals NHS Trust

  5,385

  5,483

  98

  1.8

  1 The project at Newham Healthcare NHS Trust has not yet received final approval and therefore no final assessment has been made of the comparative costs of the project.

  Rehabilitation Beds
  Mr. Boswell
  To ask the Secretary of State for Health what statistics he collates on(a) the availability of specialist rehabilitation beds in NHS hospitals, (b) their occupancy and (c) the explanations for voids. [48816]

  Mr. Hutton
  [holding answer 17 April 2002]: Specialist rehabilitation beds are included in wards categorised as 'Other general and acute' and are not counted separately in the annual collection of KH03—`Bed availability and occupancy'.

  Information on general rehabilitation beds was collected on the winter bed census. There were 7,269 open and staffed beds as at 29 November 2001. Occupancy was not included as part of this census.

  Professional Indemnity Insurance
  Mr. Gray
  To ask the Secretary of State for Health how many contracts his Department has with consultants; what level of professional indemnity insurance is standard in contracts with small consultants; whether he can make exceptions to the level of professional indemnity insurance; and what recent discussions he has had with other Government Departments about the level of professional indemnity insurance. [50844]

  Ms Blears
  [holding answer 18 April 2002]: The Department does not centrally hold a record of individual contracts.

  In the past the Department sought a professional indemnity of not less than £5 million, as the standard sum. Since risks vary between contracts, it is no longer deemed appropriate to resort to a single standard level of indemnity and current Department consultancy contracts include the following paragraphs as standard:
  "17.2 The Contractor shall effect and maintain with a reputable insurance company a policy or policies of insurance providing an adequate level of cover in respect of all risks which may be

  Number of children looked after at 31 March 1997–31 March 2001 and the number of children adopted from care during the years ending 31 March 1997–31 March 2001

  England

  1997

  1998

  1999

  2000

  2001

  Total number of children looked after at 31 March

  51,200

  53,300

  55,500

  58,100

  58,900

  Of which:

  Number in foster placements

  33,500

  35,000

  36,200

  37,900

  38,400

  238W
  Mr. Hutton
  The business cases justifying the individual schemes gave the estimates of the net savings in present value terms (with all future costs and benefits discounted to their present values), compared with publicly funding the scheme, shown in the table.incurred by the Contractor, arising out of the Contractor's performance of the Contract, in respect of death or personal injury, or loss of or damage to property. Such policies shall include cover in respect of any financial loss arising from any advice given or omitted to be given by the Contractor.
  17.5 The terms of any insurance or the amount of cover shall not relieve the Contractor of any liabilities under the Contract. It shall be the responsibility of the Contractor to determine the amount of insurance cover that will be adequate to enable the Contractor to satisfy any liability referred to in Condition 17.2."

  The Department has not specifically discussed the issue of professional indemnity in consultancy contracts with any other Department. In this and all matters pertaining to commercial contracts, the Department does give all due regard to best practice advice disseminated by the Office of Government Commerce.

  Ambulance Services (South-east)
  Mr. Peter Ainsworth
  To ask the Secretary of State for Health what has been the cost in the past five years of consultants fees incurred in relation to reviews of the configuration of ambulance services in Surrey, Kent and Sussex; and if he will make a statement. [51988]

  Ms Blears
  No additional workforce costs were incurred as most of the work in connection with the review of ambulance services in the south-east has been carried out by existing civil servants at the Department and staff at health authorities and trusts. Management consultants have been employed but this was for the region wide review. For that reason costs specifically relating to Surrey, Kent and Sussex have not been recorded.

  Looked-after Children
  Mr. Burstow
  To ask the Secretary of State for Health how many children were placed in(a) care, (b) foster care and (c) adopted in each of the last five years. [51079]

  Jacqui Smith
  The information requested is shown in the table.
  239W

  Number of children looked after at 31 March 1997–31 March 2001 and the number of children adopted from care during the years ending 31 March 1997–31 March 2001

  England

  1997

  1998

  1999

  2000

  2001

  Number of children adopted from care during the year ending 31 March

  1,900

  2,100

  2,200

  2,700

  3,100

  Notes:

  Children looked after in this table exclude agreed series of short term placements.

  All figures in this table have been rounded to the nearest 100.

  Source:

  DH Annual Statistical returns (CLA Episode)

  Parliamentary Questions
  Mr. Burns
  To ask the Secretary of State for Health when he will reply to the question of 6 March, ref. 41920, from the hon. Member for West Chelmsford on mixed sex wards at Broomfield Hospital, Chelmsford. [51227]

  Jacqui Smith
  I replied to the hon. Member today.

  Mr. Burstow
  To ask the Secretary of State for Health when he will answer the parliamentary question from the hon. Member for Sutton and Cheam regarding overseas nurse recruitment of 28 February. [51081]

  Mr. Hutton
  I replied to the hon. Member on 16 April 2002,Official Report, columns 1024–25W.

  Departmental Expenditure (Scotland)
  Mrs. Lait
  To ask the Secretary of State for Health if he will list, in real terms, for each year since 1979(a) the total sums of money spent directly by his Department in Scotland and (b) the total sums of money allocated by his Department for spending in Scotland through (i) the Scottish Office, (ii) the Scotland Office and (iii) the Scottish Executive. [16184]

  Mr. Hutton
  Pursuant to the reply given to the hon. Member by my right hon. Friend the Secretary of State (Mr. Milburn) on 5 March 2002,Official Report, column 275W, the information requested is not readily available. Public expenditure information by territory and function is available in the Public Expenditure Statistical Analyses (PESA) 2001–02 (Cm 5101) for the years 1995–96 to 1999–2000, and earlier years are available in previous PESA publications. Copies of these are available in the Library.

  Audit Commission
  Dr. Fox
  To ask the Secretary of State for Health what appointments he has made to the Audit Commission in each of the past five years. [51923]

  Ms Blears
  Three health commissioners have been appointed during the last five years:

  Roger Hoyle—January 2002

  David Moss—April 2001

  Dr. Judith Curson—October 1998 (appointed second term June 2001).

  Health Reforms
  Mr. Andrew Turner
  To ask the Secretary of State for Health what legislative changes will be required to implement the health reforms envisaged in his statement on 18 April. [51913]
  240W
  Mr. Hutton
  The statement and publication on 18 April set out further policy reforms as part of the Government's continuing strategy of reform backed by investment to deliver the NHS Plan published in July 2000. "Delivering the NHS Plan" makes clear that new legislation will be needed to introduce a system of cross-charging in relation to delayed discharges (paragraph 8.10); to establish the new Commission for Healthcare Audit and Inspection (paragraph 10.8); and to establish the new Commission for Social Care Inspection (paragraph 10.11). The details of the legislative changes required to implement these and the reform package as a whole are now being considered.M

  Ministerial Travel
  Mr. Burns
  To ask the Secretary of State for Health how many times Ministers in his Department have travelled abroad at taxpayers' expense since March 2001; what countries they visited; and what the total cost of each visit was. [47104]

  Ms Blears
  [holding answer 10 April 2002]: I refer the hon. Member to the reply given by my right hon. Friend the Deputy Prime Minister on 11 April 2002, Official Report, column 552W.

  Press Office
  Mr. Burns
  To ask the Secretary of State for Health what the total cost of running the Department's press office was in(a) 1996–97 and (b) the latest year for which figures are available. [46801]

  Ms Blears
  [holding answer 10 April 2002]: The Department's staffing cost information for Press and Publicity Division for 1996–97 does not separately identify the cost of press office. The total cost of Press and Publicity Division for 1996–97 was £2.3 million. The cost of the News Branch for 2000–01 was £1.2 million.

  Ambulance Call-outs
  Mr. Burns
  To ask the Secretary of State for Health (1) how many ambulance call-outs were made between 20 December 2001 and 3 January 2002 in Essex; what average length of time it took for ambulances to reach(a) the patient and (b) the hospital to which the patient needed to be taken; and what the average figure was in England; [46758]

  (2) how many 999 calls were made to the Essex ambulance service between 20 December 2001 and 3 January for which it was decided an ambulance was not necessary; and what proportion of calls over this period such calls represent. [46757]

  Ms Blears
  [holding answer 10 April 2002]: The information is not collected centrally in the format requested.
  241W
  Information about ambulance response times is contained in the Department of Health Statistical Bulletin 'Ambulance Services, England 2000–01'. A copy of the bulletin is in the Library and available at www.doh.gov.uk/public/sb0115.htm.

  Press Officers and Special Advisers
  Tim Loughton
  To ask the Secretary of State for Health, pursuant to his answer of 12 March 2002,Official Report, column 1062–63W, on press officers, why he is not able to provide cost details for press officers in 1996–97; and if his figures for press officer numbers refer to full-time working equivalents. [47528]

  Ms Blears
  [holding answer 10 April 2002]: The Department's staffing cost information for the Press and Publicity Division for 1996–97 does not separately identify the cost of press office or individual press officers. This level of detail has only been available since 1997–98. The total cost of the Press and Publicity Division for 1996–97 was £2.3 million.

  Press officer numbers refer to full-time working equivalents, except for 1999–2000 when two members of staff were part-time.

  Tim Loughton
  To ask the Secretary of State for Health how many(a) press officers and (b) special advisers were employed by his Department in each of the years 1990–91 to 1995–96. [47529]

  Ms Blears
  [holding answer 10 April 2002]: The information requested is shown in the table.

  Number

  (a) Press officers

  1990–91

  11

  1991–92

  12

  1992–93

  10

  1993–94

  12

  1994–95

  12

  1995–96

  9

  (b) Special advisers

  1990–91

  2

  1991–92

  2

  1992–93

  2

  1993–94

  1

  1994–95

  1

  1995–96

  1

  Television
  Mr. Yeo
  To ask the Secretary of State for Health if he will list the number of subscriptions to(a) digital terrestrial, (b) digital satellite and (c) digital cable television held by his Department for services in any departmental building from which Ministers work, stating for each subscription its (i) cost and (ii) purpose. [48351]

  Ms Blears
  [holding answer 10 April 2002]: The Department is linked to the Annunciator system, provided by cable link to Richmond House, by the Central Office of Information. The cost of this system is £26,161 per annum, including value added tax. The purpose is to provide Ministers, Communications and Policy staff in Richmond House access to debates in the Houses of Commons and Lords, and Select Committee hearings.

  NHS Trusts (Police Officers)
  Dr. Fox
  To ask the Secretary of State for Health which hospital trusts have specially assigned police officers. [47851]

  Mr. Hutton
  Security arrangements at hospitals are a matter for the individual hospital trust to address. Many hospitals employ specially trained in-house staff for security services; others use external security companies.

  Strong working relationships between the police and the national health service are essential if staff, patients and visitors are to be able to work and receive care in the best environment. While we do not hold details of every trust's arrangements centrally, we are aware that many trusts have made a dedicated room available within the accident and emergency department of the hospital for police use. Some trusts have a police station situated within the hospital grounds. All hospitals have developed close links with the local police force and hold security liaison meetings which include a police representative on the group. We are also aware that the Royal Devon and Exeter NHS Trust has an arrangement with the local police to fund a full-time police presence in the hospital with porters providing routine security services. South Devon Healthcare Trust and Royal Cornwall Hospitals Trust have similar arrangements in place. We understand that a number of other trusts are considering adopting comparable approaches.

  All trusts have arrangements with their local police authority to provide specially assigned police officers in the event of a major incident involving firearms, or in a hostage situation.

  Non-clinical Data
  Dr. Fox
  To ask the Secretary of State for Health what steps he is taking to improve the quality of non-clinical data. [47870]

  Ms Blears
  National health service organisations collect a wide range of data that are used locally within and between health care organisations to support a variety of purposes. Local arrangements therefore exist within health communities to performance manage the quality of data collected that reflect local circumstances.

  All NHS organisations are responsible for the quality of their own data. A fundamental principle of data quality is that data should be right first time, at the point at which they are recorded. In relation to hospital data, this principle was supported by the recent Audit Commission report, "Data Remember", which stated that
  "the key to better quality of information is held by Trusts themselves".
  All NHS trusts are expected to have a named senior manager responsible for data quality within their organisations by 30 June 2002. All chief executives will shortly be reminded of their responsibilities for ensuring that their organisation produces good quality data.

  While the ultimate responsibility for data quality lies with NHS organisations themselves, there are a number of national initiatives which aim to support them in improving the quality of their non-clinical data. These include national performance monitoring of data quality, providing support and guidance material on improving

  243W
  and managing data quality, accreditation and audit of data quality and through the implementation of national information strategies.

  Maintenance Backlog
  Dr. Fox
  To ask the Secretary of State for Health what the current maintenance backlog of the NHS is. [47823]

  Mr. Hutton
  The most recent available information for the total maintenance backlog cost, inclusive of physical condition, fire safety and health and safety, associated with NHS trusts in England is at 2000–01. This currently indicates the total maintenance backlog cost to be £3.16 billion.

  Toothbrushes
  Dr. Fox
  To ask the Secretary of State for Health which company supplied the toothbrushes handed out as part of the Brushing for Life campaign. [47026]

  Ms Blears
  As part of the Brushing for Life scheme, packs were distributed containing a toothbrush, a tube of toothpaste and a leaflet. The toothbrushes in the packs were supplied by GlaxoSmithKline plc.

  Ambulance Turnaround Times
  Dr. Fox
  To ask the Secretary of State for Health, pursuant to his answer of 25 February 2002,Official Report, column 940W, on ambulance turnaround times, if he will state the turnaround times for ambulance crews at each hospital in the Greater London area with an A&E department. [48288]

  Ms Blears
  The information requested is not collected centrally.

  Critical and Intensive Care Beds
  Dr. Fox
  To ask the Secretary of State for Health how many(a) adult critical care and (b) intensive care beds there were in each of the past five years. [47864]

  Ms Blears
  The total number of critical care beds and those being used for intensive care purposes on the census day is given in the following table. The first census was carried out in March 1999 and data are not available previous to this date.

  Number of critical care beds on census day

  Census date

  Total critical care beds

  of which intensive care

  31 March 1999

  2,240

  1,520

  30 September 1999

  2,241

  1,501

  15 January 2000

  2,362

  1,555

  14 July 2000

  2,343

  1,496

  15 January 2001

  2,885

  1,677

  16 July 2001

  2,940

  1,670

  15 January 2002

  3,030

  1,711

  Source:

  Department of Health form KH03a

  TV and Telephone Services
  Dr. Fox
  To ask the Secretary of State for Health if he will list the applicants for the contract to provide television and telephone services to NHS patients. [47003]
  244W
  Ms Blears
  The list shows those companies that submitted tender documentation to request a licence to provide bedhead entertainment and telephone services to the NHS.

  First round (3 August 2000) tender applications received from:

  Hospital Telephone Services

  Patientline

  Wandsworth Electrical

  Sodexho

  Static Systems

  Unicorn Hospital Communications Ltd.

  BT Health

  Compaq Computers

  ITR Telecom

  Syntec Telecom

  Second Round (23 February 2001) tender applications received from:

  Philips Business Communications

  Kerfone Communications Limited

  BT Health

  Premier Managed Payphones

  Patientpal (MIM Meditech Hospital Systems).

  Emergency Re-admissions
  Dr. Fox
  To ask the Secretary of State for Health what the levels of emergency re-admissions were in each health authority for the third quarter of 2001–02. [46997]

  Jacqui Smith
  Quarterly information on re-admissions is only collected for patients aged 75 and over. This information by health authority, has been placed in the Library.

  Correspondence
  Mr. Lansley
  To ask the Secretary of State for Health when he expects to provide a substantive reply to the letter of 2 August 2001 from the hon. Member for South Cambridgeshire. [48248]

  Ms Blears
  The Department has no record of receiving this correspondence. The Department's Ministerial Correspondence Unit is seeking a copy of this correspondence.

  Mrs. Roe
  To ask the Secretary of State for Health when the hon. Member for Broxbourne will receive a reply to her letters of(a) 21 January, (b) 21 February, (c) 19 March and (d) 18 April relating to her constituent, Mr. R. Merkitt of Wormley. [51802]

  Mr. Hutton
  A reply was sent on 23 April.

  Essex Heart Centre
  Bob Russell
  To ask the Secretary of State for Health what representations he has received over the proposal to establish the Essex Heart Centre at Basildon instead of Broomfield, Chelmsford; and if he will make a statement. [48571]

  Jacqui Smith
  Essex Health Authority is about to start the public consultation exercise on this proposal. All relevant and interested parties will have the opportunity
  245W
  to make their concerns known during this period and as such it would not be appropriate for Ministers to comment further at this stage.

  GP Vacancies
  Andrew Selous
  To ask the Secretary of State for Health how many GP vacancies there were in Bedfordshire(a) in each of the last three years and (b) at the latest date for which figures are available. [47629]

  Jacqui Smith
  The Department first carried out a survey into general practitioners recruitment, retention and vacancies in 2000.

  In the 2000 survey Bedfordshire health authority reported that they had 25 GP vacancies outstanding at some time in the 12 month period 1 April 1999 to 31 March 2000.

  Date

  Venue

  Topic

  21 to 22 May 2001

  Tokyo

  Possible pharmacovigilance topics for the International Conference on Harmonisation (ICH) process

  4 to 6 February 2002

  Brussels

  April 2001

  Videoconference/teleconference held between London and Rockville Pike (FDA HQ)

  To discuss current safety issues with the FDA and other EU member-states

  June 2001

  July 2001

  September 2001

  November 2001

  January 2002

  March 2002

  27 August 2001

  FDA, Rockville Pike

  FDA use of General Practice Research Database (GPRD)

  28 August 2001

  22 to 24 May 2001

  International Laboratory Forum of Counterfeit Medicines (ILFCM), Washington, USA

  Collaboration and knowledge sharing of illegal and counterfeit medicines

  22 to 24 May 2001

  Permanent Forum on International Pharmaceutical Crime (PFIPC), Washington, USA

  Pharmaceutical crime including counterfeits and fraudulent diversion

  8 June 2001

  Videoconference held between London and Rockville Pike (FDA HQ)

  Equivalence between UK and USA systems for assessing compliance by inspection

  28 July to 23 August 2001

  FDA, Cincinnati, USA

  Series of meetings on collaborative procedures for the analysis of illegal steroid creams

  17 September 2001

  Videoconference held between London and Rockville Pike (FDA HQ)

  Proposed Mutual Recognition Agreement on Inspection

  29 October to 1 November 2001

  International Laboratory Forum of Counterfeit Medicines (ILFCM), Canberra, Australia

  Collaboration and knowledge sharing of illegal and counterfeit medicines

  15 to 16 November 2001

  London

  FDA observation of MCA medicines inspection

  26 to 30 November 2001

  London, Hitchin and York

  FDA observation of MCA inspectorate quality system

  12 December 2001

  Videoconference held between London and Rockville Pike (FDA HQ)

  General progress on the Mutual Recognition Agreement (MRA)

  March 2002

  Houston, USA

  Criminal investigations on the supply of prescription-only medicines and an unlicensed product

  New Deal
  Mr. Bercow
  To ask the Secretary of State for Health how many people employed by the non-departmental public bodies for which he is responsible under the New Deal for Young People in each of the last four years have subsequently(a) found unsubsidised employment for more than 13 weeks and (b) returned to jobseeker's allowance or other benefits. [49600]

  Mr. Hutton
  This information is not available. Neither the Department nor the individual non-departmental public bodies concerned monitor people who have left those organisations.

  Average daily number of available beds, acute sector, total residential care beds, mental illness residential care beds for the London regional office area, 2000–01 to 1996–97

  2000–01

  1999–2000

  1998–99

  1997–98

  1996–97

  Acute beds

  16,736

  16,419

  17,022

  17,090

  17,663

  246W
  In the 2001 survey they reported that they had 20 GP vacancies outstanding at some time in the 12 month period 1 April 2000 to 31 March 2001.

  Results from the 2002 survey should he available later in the year. We have no data prior to 2000.

  Medicines Control Agency
  Matthew Taylor
  To ask the Secretary of State for Health how many times officials from the Medicines Control Agency have held meetings with officials of the United States Food and Drug Administration since 1 April 2001; when and where each of these meetings took place; and what the subject was of each of these meetings. [48610]

  Ms Blears
  There have been 21 meetings between officials of the Medicines Control Agency and officials of the United States Food and Drug Administration since 1 April 2001. The details of the meetings are shown in the table.

  Mental Health
  Harry Cohen
  To ask the Secretary of State for Health what change in provision since 1997, there has been of(a) acute beds, (b) residential places staffed 24 hours a day and (c) low support residential places in mental health in London. [48864]

  Mr. Hutton
  The change in provision since 1997 for acute beds, residential places staffed 24 hours a day and low support residential places in London is given in the table.
  247W

  Average daily number of available beds, acute sector, total residential care beds, mental illness residential care beds for the London regional office area, 2000–01 to 1996–97

  2000–01

  1999–2000

  1998–99

  1997–98

  1996–97

  Acute mental illness beds

  4,884

  —

  —

  —

  4,544

  Total residential care beds (includes mental illness)

  683

  691

  1,256

  1,234

  1,117

  Mental illness residential care beds

  299

  317

  309

  280

  257

  Source:

  KH03—Bed availability and occupancy

  Residential care places in London area not managed by the NHS, 1997 to 2001

  Number of residential care places

  1997

  30,062

  1998

  30,201

  1999

  29,525

  2000

  30,140

  2001

  29,342

  Thiomersal
  Ian Lucas
  To ask the Secretary of State for Health if he will make a statement on progress towards the replacement of thiomersal as a preservative in vaccines. [48832]

  Ms Blears
  The European Committee for Proprietary Medicinal Products (CPMP) has developed regulatory guidance entitled "Points to Consider on the Reduction, Elimination or Substitution of Thiomersal in Vaccines". This regulatory guidance has come into operation since May 2001. It sets out recommendations and strategy for reducing, eliminating and substituting thiomersal as a preservative in vaccines. As indicated in this regulatory guidance, in an initial stage, a manufacturer may choose to reduce the amount of thiomersal while developing a thiomersal-free formulation with or without a substitute preservative. Since reducing or eliminating thiomersal could have an impact on microbiological quality, antigenicity, immunogenicity, reactogenicity and stability of vaccines, substantial developmental and validation work is necessary before such modifications can be implemented.

  Better Quality Services Initiative
  Mr. Bercow
  To ask the Secretary of State for Health which of the services of his Department have not been reviewed under the Better Quality Services Initiative; and when they will be reviewed. [50312]

  Ms Blears
  Between September 1999 and February 2001, the Department had largely undertaken Better Quality Services reviews of its support services and the functions and activities of its agencies. The Department was working with Cabinet Office to develop a rigorous approach for the review of policy.

  Since March 2001 specific Better Quality Services activity has been incorporated into a fundamental review of the Department's services and activities, including policy areas. This fundamental review was carried out in the spirit of the Better Quality Services Initiative in line with Government policy. It has generated a programme of change that focuses on the Department's delivery contract and which aims to improve efficiency and effectiveness.

  Ministerial Private Offices
  Mr. Bercow
  To ask the Secretary of State for Health, pursuant to his answer of 26 March 2002,Official Report. column 924W, on the running costs of his Ministers' private offices, for what reason those costs rose between 1997–98 and 2001–01. [50340]

  Ms Blears
  Costs of Ministers' private offices have risen since 1997–98 in part because an additional Minister was appointed in 1999–2000. The level of support provided to Ministers has also been improved over the period.

  Complaints
  John Cryer
  To ask the Secretary of State for Health what plans he has to promote wider use of conciliation in handling complaints against the NHS. [49941]

  Ms Blears
  Conciliation is a positive mechanism for resolving complaints at an early stage. The NHS complaints procedure evaluation report recommended that wider use of conciliation should be encouraged and we are currently considering how best to achieve this as part of our broader reforms to the NHS complaints procedure.

  Malcolm Bruce
  To ask the Secretary of State for Health how many complaints were registered against his Department and its predecessor Departments in(a) 1990 to 1996 and (b) 1997 to 2002; how many are current; and what proportion were (i) taken up and (ii) upheld by the Parliamentary Ombudsman in those periods. [51586]

  Ms Blears
  [holding answer 22 April 2002]: The information relating to complaints registered against the Department can be provided only at disproportionate cost. Information on complaints made to the Parliamentary Ombudsman is contained in the Ombudsman's annual reports, copies of which are held in the Library, and from 1997–98 on the Ombudsman's website at www.ombudsman.org.uk/pca/document/part01/index.

  Hospital Waiting Times
  Mr. Burns
  To ask the Secretary of State for Health what the latest figures are for the Mid Essex Hospital Trust area for the(a) number of people waiting for hospital treatment and (b) number of people waiting less than (i) 18, (ii) 15, (iii) 12 and (iv) six months for hospital treatment. [48802]
  249W
  Jacqui Smith
  The information requested is shown in the table.

  Patients waiting for elective admission, Mid-Essex Hospital Services NHS Trust, February 2002. Ordinary and day case admissions combined

  By month waiting

  Total waiting

  9,646

  Less than 6 months

  7,126

  Less than 12 months

  9,360

  Less than 15 months

  9,641

  Less than 18 months

  9,646

  Source:

  Department of Health Monthly Monitoring

  Pathology Services
  Mr. Hinchliffe
  To ask the Secretary of State for Health what the estimated total NHS expenditure was on pathology services in 2000–01; how many pathology services there are in England; how many public health laboratory services there are: and what estimate he has made of the number of private sector pathology laboratories. [49041]

  Mr. Hutton
  [holding answer 16 April 2002]: Information on pathology expenditure is not collected centrally; funding for pathology is included in the general allocation to the National Health Service.

  The Department does not hold a central register of pathology laboratories. However, we estimate that there are around 300 NHS Pathology services in England based in acute Trusts. These include up to 1700 separate laboratories providing diagnostic services for haematology, microbiology, biochemistry, histopathology/ cytopathology, immunology and genetics. We also estimate that there are approximately 250 pathology laboratories in the independent sector.

  The Public Health Laboratory Service (PHLS) comprises 46 laboratories in eight regional groups, the Central Public Health Laboratory (CPHL) (incorporating seven reference laboratories and a scientific support services unit), and the Communicable Disease Surveillance Centre (CDSC), both at Colindale, North West London. In addition, there are five PHLS collaborating centres serving the London population, and two other special laboratories.

  Smart Card Technology
  Mr. Laurence Robertson
  To ask the Secretary of State for Health if he will make a statement on the use of smart card technology in his Department and in the areas for which it is responsible; and what discussions he has had with private companies about the use of smart card technology within his Department. [50483]

  Ms Blears
  [holding answer 16 April 2002]: The NHS Plan published in July 2000 refers to the possible introduction of smart cards to meet two key business

  Table 1: Grant

  £000

  2000–01

  2001–02

  2002–03

  AIDS Support Grant

  16,000

  16,500

  16,500

  Drugs and Alcohol Specific Grant

  6,800

  8,850

  —

  Mental Health Grant

  129,500

  148,443

  154,443

  Training Support Programme

  42,500

  47,500

  57,500

  250W
  requirements, i.e., to enable patients and healthcare professionals to access medical records, and to store a limited amount of emergency medical data. A number of studies have been conducted within the Department which looked at different options, including smart cards, and biometrics, to meet these business requirements. Our current view is that there are many issues that need to be resolved before decisions can be made about implementing a large-scale scheme involving smart card technology. These include the question of security and confidentiality. There are also technical, legal, cultural, funding and other issues which need to be addressed. The government's approach, therefore, is to test these concepts in pilot projects before considering further a wider use of patient-held smart cards.

  The Department is currently funding a programme of pilot projects over a three year period to introduce occupational health smart cards for hospital doctors, initially doctors in training, in England. The company running the projects is TSSI (Thorn Secure Science Ltd.). This is not a patient-held smart card scheme, but we hope to learn lessons about the technology and other issues from this pilot programme.

  Ministers and officials at the Department have both formal and informal discussions with private companies on a range of issues, including the possible use of smart card technology in healthcare. The Department is also represented on the Office of the e-Envoy's Smart Card Policy Working Group which includes private companies and other interest groups in its membership.

  NHS Finance
  Mr. Andrew Turner
  To ask the Secretary of State for Health if he will list the ring-fenced allocations and special purpose grants made by him in financial years(a) 2000–01, (b) 2001–02 and (c) 2002–03, together with the amount of each allocation; what arrangements are in place to ensure that allocations are spent for the purpose intended; whether unspent resources are clawed back; and if he will make a statement. [50065]

  Mr. Hutton
  [holding answer 16 April 2002]: Table 1 lists the ring-fenced allocations and grants which the Department made available to councils in 2000–01, 2001–02 and 2002–03. Audit arrangements are in place to check that allocations are used for the purpose intended. Unspent grant in excess of any end year flexibility allowed by the grant conditions is clawed back unless Ministers decide to waive recovery in accordance with the grant conditions. Unused supplementary credit approvals (SCAs) lapse unless they are surrendered by councils. SCAs cannot be clawed back by the Department.

  Table 2 shows the ring-fenced allocation which is made to health authorities. There are local monitoring arrangements in place to ensure allocations are spent in full. Expenditure is separately identified within the annual accounts.
  251W

  Table 1: Grant

  £000

  2000–01

  2001–02

  2002–03

  Children's Services Grant

  120,000

  291,750

  461,500

  Secure Accommodation Grant

  6,228

  6,228

  6,228

  Partnership Grant1

  216,000

  —

  —

  Prevention Grant1

  30,000

  —

  —

  Promoting Independence Grant1

  —

  296,000

  155,000

  Carers' Grant

  50,000

  70,000

  85,000

  Care Direct Grant

  500

  2,000

  10,000

  Deferred Payments Scheme

  —

  15,000

  30,000

  Improving Information Management Grant

  —

  3,000

  25,000

  Young People's Substance Misuse Planning Grant

  —

  4,500

  4,500

  Building Care Capacity Grant

  —

  100,000

  200,000

  Teenage Pregnancy Local Implementation Grant

  —

  —

  16,000

  Performance Fund

  —

  —

  50,000

  Residential Allowance Grant

  —

  —

  93,000

  Preserved Rights Grant

  —

  —

  614,000

  Invest to Save Grant

  4,254

  1,330

  —

  Supplementary credit approvals: Mental Health

  15,600

  15,600

  15,600

  Supplementary credit approvals: AIDS

  3,100

  3,100

  3,100

  1 The Partnership and Prevention Grants merged in 2001–02 to become the Promoting Independence Grant

  Table 2: Allocation

  £000

  Out of hours development fund

  2000–01

  43,420

  2001–02

  44,506

  2002–03

  45,617

  Alcohol
  Mr. Boswell
  To ask the Secretary of State for Health if he will make a statement on progress in the development of a national alcohol strategy. [48813]

  Ms Blears
  [holding answer 17 April 2002]: The NHS Plan stated that the Government would be implementing the National Strategy to Tackle Alcohol Misuse by 2004 and we are currently on course to achieve this target.

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

Children's Commissioners
Baroness Walmsleyasked Her Majesty's Government:
Whether a children's commissioner will be appointed in all parts of the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, a children's commissioner was appointed in Wales in March 2001. A Scottish parliamentary committee recently proposed the establishment of a children's commissioner. A Bill is being drafted in Northern Ireland to establish a children's commissioner. The Government are considering whether lessons might be learned for England given its different structures for children and young people and their manifesto commitment to consider whether to develop and extend the role of the Children's Rights Director.
Baroness Walmsley: My Lords, I thank the Minister for that Answer. I wish her a happy St. George's Day. Does she accept that it is an appropriate day to focus on the discrepancies in protection for children in England compared to those in Wales, Scotland and Northern Ireland? Can she confirm that the powers of the Children's Rights Director are not the same as those of the Children's Commissioner for Wales? He is not an advocate for children in the same way and he does not go around actively seeking the views of children and basing his priorities on those views. Is the Minister aware that the children's charities are so convinced of the need for such an advocate that they have used their budgets to establish an office of children's rights in London, which acts as a de facto commissioner although it receives no support from the Government? Can she give a timetable for the establishment of a children's commissioner for England?
Baroness Ashton of Upholland: My Lords, I am aware of the work of the children's charities within London and the setting up of a children's rights commissioner. I am also aware of the children's commissioner's role within Wales. As I said, that is one of the reasons why we are examining how the work is carried out in Wales. However, I should draw the noble Baroness's attention to the different ways in which we have approached this issue in England. For example, we have a Minister for Children and Young People; we have a Cabinet committee on children and young people's services chaired by the Chancellor of
118
the Exchequer; we have the Children's Fund, which has £450 million for preventive work; and we have the children and young people's unit, the role of which is to co-ordinate policies. 1t is in the context of that ongoing work that we wish to look and see, and celebrate with our colleagues in different parts of the United Kingdom, what exactly would work best for England.
Baroness Blatch: My Lords, will the Minister consider persuading her right honourable colleague in another place to accept an amendment to be proposed to the Education Bill which seeks to strengthen protection for children throughout all the public services—education, social services, criminal departments, law and order and so on? That will be a golden opportunity to protect children in this country pending the decision about a commissioner.
Baroness Ashton of Upholland: My Lords, we are deeply concerned to ensure that children are protected so far as possible. It is in that context that we will examine carefully the proposed amendment to the Education Bill.
Baroness Gale: My Lords, does my noble friend the Minister agree that devolution in Wales has been an outstanding success and that part of the reason for that success is the unique appointment of the Children's Commissioner for Wales? Does she further agree that the commissioner, Mr Peter Clarke, is an excellent voice for and a champion of the children of Wales? Does she also agree that it would be beneficial for the children of England and the rest of the United Kingdom if they had a similar voice to speak up for them?
Baroness Ashton of Upholland: My Lords, Mr Peter Clark is doing an excellent job. His role is to safeguard and promote the rights and welfare of children. He is what is described as a "corporation sole"—that is, an independent appointment—and, as such, with his budget of £963,000 a year, he is able to work on behalf of children. He is working to ensure that children's rights are respected through the monitoring and oversight of complaints and whistle-blowing procedures; he is examining particular cases; he will be assisting children in making complaints and representations; and he will be publishing reports. As I said, we look forward with interest to watching the progress of Mr Clark and the work that is going on in Scotland and Northern Ireland and making our decisions in the light of that.
Lord Roberts of Conwy: My Lords, does the noble Baroness agree that there is some danger that the appointment of a children's commissioner is a way of salving the conscience of people in this country? Does she further agree that it would be right to have a full inquiry into the problems of children involving a number of departments of government?
Baroness Ashton of Upholland: My Lords, the role of the children and young people's unit and the work of the Cabinet Committee are designed to work across

119
government, to strengthen what is done in each individual department and to pull that together into a government response. It is in that context that we need to look at whether the way forward for England is to have a children's commissioner. I do not want noble Lords to have any view other than that the Government are committed to supporting and protecting all our children in all circumstances.
Lord Northbourne: My Lords, does the noble Baroness accept that parents have an important role to play in securing the welfare of children, particularly younger children? Obtaining the views of, say, a three year-old would not necessarily give useful information.
Baroness Ashton of Upholland: My Lords, I can think of a number of three year-olds, including my own at that age—they were very capable of telling me precisely what they thought on a wide range of issues and continue to do so—whose views would be useful. The noble Lord makes a very important point. We do not wish to get in the way of the rights and responsibilities of parents. It is for parents to take responsibility for their children. However, as a government—and, I am sure, as a House—we wish to make sure that where those responsibilities are not taken, or cannot be taken, we act in a way that supports our children.
Lord Campbell of Croy: My Lords, if commissioners are appointed, will the Government try to prevent their being known as "czars", as that is likely to mislead the public and frighten the children?
Baroness Ashton of Upholland: My Lords, I have heard of no proposal to call them "czars". I shall, however, take on board the noble Lord's comment.

Foreign Exchange Transactions: Taxation
2.43 p.m.
Baroness Whitakerasked Her Majesty's Government:
What is their response to the report by Professor Paul Bernd Spahn on the feasibility of a tax on foreign exchange transactions commissioned by the Germany Ministry for Economic Co-operation and Development.
Lord McIntosh of Haringey: My Lords, the Government have been closely following the debate about the feasibility of a tax on foreign exchange transactions, including Professor's Spahn's work. Other studies, such as the recent Commission report of February 2002, Responses to the Challenges of Globalisation, which was requested by EU Finance Ministers, have raised questions about the feasibility of the tax. The Government are not convinced that the tax would be particularly effective in stabilizing
120
international capital flows, but are committed to exploring the full range of options for increasing the amount of financing available for development.
Baroness Whitaker: My Lords, I thank my noble friend for that promising Answer. Does he agree that the study makes it clear that such a tax is feasible, and that the main obstacle to developing it is in fact political will? Does he further agree that this would be the most promising way to respond to the Chancellor's call for innovative ways to finance international development?
Lord McIntosh of Haringey: My Lords, I do not quite agree. In paragraph 25 of his summary, Professor Spahn states that the obstacles,
"are related to political will, to international co-operation, and to legal enforcement".
That range of difficulties is a good deal wider. The problem is: whose political will? We may have the political will, but do the offshore havens, for example, which might take over currency markets have the same political will? As for the Chancellor's pursuit of the matter, we have enough evidence from his contribution to the UN Financing for Development conference in Monterey last month, where European and US pledges were made for an extra 30 billion dollars before 2006 for overseas development.
Lord Beaumont of Whitley: My Lords, do the Government have any plans to raise this matter at the G8 summit? The host will be Canada, which has already committed itself to this approach; and representatives from France and Germany will also be present—France having passed preliminary legislation for such a tax.
Lord McIntosh of Haringey: My Lords, I have no doubt that the matter will be raised at the G8 summit, especially in view of the participation of the countries referred to. The currency transaction tax is not the only global tax that is being considered. The issue has been discussed for a very long time, since Willy Brandt and Gro Harlem Brundtland raised it. There could be global taxes on carbon dioxide emissions, on aviation fuel, and on arms exports. But all present the same difficulty as the Tobin tax; namely, that they require near universal support to be effective.
The Earl of Northesk: My Lords, without in any way gainsaying the worthy intent of those who advocate the so-called Tobin tax, does the Minister recall his observation in a debate on this matter some two years ago? At that time he said:
"I am sorry, I would like to think that it would work but I cannot believe that it can".—[Official Report, 8/6/00; col. 1323.]
Does the Minister agree that nothing has happened since that debate to make the practicality of such a tax any more certain?
Lord McIntosh of Haringey: My Lords, perhaps I am a little less blunt than I was two years ago. This is what happens—it grinds you down after a time,

121
doesn't it? Fundamentally, I think I am saying the same thing now as I was then. The problems are, as Spahn said, political will, international co-operation and legal enforcement. There must be near universal acceptance and enforcement in order to make such a tax work.
Lord Newby: My Lords, does the Minister agree that, so far as concerns political will, by far the single most important player is the United States? Will he urge his colleague the Chancellor to use the close relationship that the Government now have with the United States to build on the steps that it took at Monterey to accept some responsibility for the development of the poorest countries in the world, so that fresh impetus can be put into examining how these taxation proposals might he made effective—whether it is the Tobin tax, the Spahn tax, or any of the other options set out by the Minister?
Lord McIntosh of Haringey: My Lords, that is exactly what the Chancellor has been doing. That is exactly what he did so effectively at Monterey in March—from which the additional pledges from the European Union and the United States resulted. Indeed, there have been pledges of 12 billion dollars a year of ODA funding after 2006. In addition, the Chancellor has been pursuing, including with the United States, his plans for an international development trust fund, which I think the noble Lord would agree would he a very effective step forward.
Lord Paul: My Lords, will my noble friend confirm that a tax on foreign exchange transactions before we join the euro would make British products even more expensive, making it difficult to compete in Europe?
Lord McIntosh of Haringey: My Lords, given the Government's view that the precondition for a currency transaction test is that it should be universal, it should not make a great deal of difference whether it is carried out before or after joining the euro. The question to be considered as regards the feasibility of a currency transaction test is whether it would increase currency volatility if it caused trading volumes to fall. That applies whether or not we are in the euro.
Lord Stoddart of Swindon: My Lords, has the noble Lord seen the report that appeared today showing that 39 per cent of aid issued by the European Union is going not to the poorest countries in the world, but to countries in eastern Europe? Bearing in mind that we supply one-third of those funds and that 39 per cent of that is £350 million, is it not a great and crying shame that assistance provided by the British taxpayer for the poorest countries is not finding its way there?
Lord McIntosh of Haringey: My Lords, I can nearly always be caught out by being asked whether I have seen something that was reported today. I do not get up early enough to read all the newspapers. However, it does not follow from what the noble Lord is saying that there is anything wrong with development aid
122
going from the European Union to eastern Europe. That has been an explicit objective for a considerable number of years—since 1989, in fact—and it is not necessarily in conflict with help for the most deprived countries in the world. Both are necessary.
Lord Campbell-Savours: My Lords, is it fair to say that my noble friend is saying that he is not opposed in principle to Tobin, but he thinks it is unenforceable at the moment?
Lord McIntosh of Haringey: My Lords, my noble friend has said more precisely and concisely what I was trying to say, perhaps with greater verbosity.

Angola
2.51 p.m.
Lord Hyltonasked Her Majesty's Government:
What is their assessment of the situation in Angola, following the agreed ceasefires.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, we welcome recent moves towards peace in Angola. The agreement signed in Luanda on 4th April between the chiefs of staff Of the Angolan armed forces and UNITA is a positive step. Both sides must now commit to an inclusive, transparent and sustainable political process. However, the humanitarian situation remains critical. We are encouraging the Angolan Government to put more of their own resources into the relief effort and to facilitate access and, where necessary, provide security for the relief agencies.
Lord Hylton: My Lords, I thank the noble Baroness for her reply. Does not Angola have oil revenues in excess of 3 billion dollars a year? Will that enable the Angolan Government to disarm and resettle 150,000 ex-soldiers and to cope with 4 million displaced people? Can the noble Baroness give us a little detail about the action plan intended to combine the efforts of Angola with international help?
Baroness Amos: My Lords, the noble Lord is right that Angola has significant oil revenues. There is a two-phase process on the action plan. The memorandum of agreement was signed on 4th April, but that has to go hand in hand with a political process, which, as I said in my original Answer, needs to be inclusive and transparent. Noble Lords will know that we are keen to see implementation of the Lusaka protocol. We agree that the process of DDRR needs to begin urgently. The noble Lord mentioned figures. It is estimated that there are more than 50,000 UNITA fighters and more than 300,000 families in addition to the more than 4 million people who are displaced within Angola. The Portuguese have offered military observers for the disarmament demobilisation

123
process. We shall continue to work with the UN and other international agencies to make sure that the process stays on rack.
Lord Hughes of Woodside: My Lords, does my noble friend agree that at long last there is a real opportunity for the people of Angola to have a peaceful future? The Angolan Government have said clearly that they wish to implement the Lusaka accords in full and are prepared to move on a programme of social reconstruction. However, does my noble friend agree that even with oil and diamond revenues it will take time before the money currently spent on the Angolan army can be redirected to peaceful uses? Given the massive number of mines in the country, what help can we give to ensure that the demining process is accelerated so that the countryside is accessible and the people can get back to a decent economy?
Baroness Amos: My Lords, my noble friend has asked me two different questions. One relates to long-term reconstruction. The Government of Angola intend to have two donor conferences this year, one dealing with the immediate humanitarian situation and the second looking at the reconstruction effort. My noble friend also referred to land mines. Noble Lords will know that we had a demining programme in Angola. We stopped that programme because we had reliable evidence that the areas were being remined. We fund a UN agency that prioritises, on our behalf, areas where it thinks we should go back and remove land mines. If that agency said that the situation in Angola were now such that we could engage in constructive demining, we would do that as a matter of urgency.
Lord St John of Bletso: My Lords, does the Minister agree that peace in Angola is interlinked with peace in the Democratic Republic of Congo? The peace talks in South Africa on the DRC, initiated by President Thabo Mbeki, recently broke down. What action are the Government and the international community taking to get those talks back on track in order to secure long-term peace in the region?
Baroness Amos: My Lords, it is true that, while we have an important moment for peace in Angola after nearly 30 years of civil war, Angola is also involved in the conflict in the DRC. We were concerned at the breakdown of the talks in Sun City, but it is important to remember that a number of issues were agreed through that dialogue process. The political elements of any transition have yet to be agreed. We are doing all we can to support the South Africans and the facilitator of the dialogue process. It is anticipated that the talks will restart shortly.
Lord Avebury: My Lords, will the Minister confirm that the forthcoming G8 meeting in Alberta will feature a special session devoted to NePAD, which will be attended by some of the countries concerned, including Angola? Will the Government take that
124
opportunity to impress on the Government of Angola the need to comply with the advice that has been given by the IMF and others on the need for greater transparency, particularly on oil revenues? What is the Government's attitude to the proposal by a number of distinguished NGOs that all states, not just the G8, should encourage those companies that are resident in their territory to make full disclosure of payments made to other countries for the use of development resources?
Baroness Amos: My Lords, there will be a discussion in Kananaskis at the end of June on the G8 Africa action plan. The five steering committee members of NePAD will be invited to attend that meeting. The G8 countries believe that peace and security have to be a priority for that action plan. Some of the issues that have been raised this afternoon will be part of that discussion.
We continue to encourage the Government of Angola to stay on track in their discussions with the IMF, because economic reform is important for Angola. Transparency in the oil account is important for Angola's long-term development. It is important to pay tribute to BP, which has done some good work on that.
The noble Lord asked me one further question, which I have managed to forget.
Lord Avebury: My Lords, the question was about the proposal by a group of distinguished NGOs, including Oxfam and Christian Aid.
Baroness Amos: My Lords, I am aware of that proposal. It would be difficult for G8 countries to regulate business. As we know, a number of international companies take corporate governance very seriously indeed, and a number of multinationals have signed up to the UN global compact. Through such voluntary initiatives we must try to ensure that our concerns about events in Angola are represented in those forums.
Baroness Sharples: My Lords—
Noble Lords: Next Question!

Middle East
3.1 p.m.
Lord Blakerasked Her Majesty's Government:
What steps they are taking to assist progress towards a settlement of the problems between Israel and the Palestinians.
Baroness Amos: My Lords, the Government are profoundly concerned at the violence in the Middle East and the terrible humanitarian situation in the occupied territories. We continue to press the Israeli Government to allow full access to humanitarian relief agencies. We support UN Security Council Resolution

125
1405 which calls for a fact-finding mission into events in Jenin. We support continuing US efforts to end the violence and resume political negotiations. We urge Israel and the Palestinian Authority to implement UN Security Council Resolution 1402, which calls for Israeli withdrawal from Palestinian cities, and for both parties to move immediately toward a meaningful ceasefire and work toward a political settlement.
Lord Blaker: My Lords, has not the recent brutal behaviour by Israel put at risk the cohesion of the coalition against terrorism and made it more difficult to prevent Saddam Hussein proceeding with his programme for making weapons of mass destruction? Is it not imperative now that steps should be taken to resume some form of peace process? Is it not clear that the best and perhaps only country to initiate such a programme is the United States, using the economic levers which it has against Israel? Will the Government put that point of view to the Government of the United States?
Baroness Amos: My Lords, noble Lords will know—we have had a number of discussions in this House on events in the Middle East—that we are in constant contact with our US partners on this matter. On 18th April, Secretary Powell said that the US has a vision of,
"two states living in peace, side by side".
and that that is the,
"only solution to this conflict".
We agree with that.
With our European Union partners, the United States and the United Nations, we are working very hard to end the violence in the region and to bring both sides back to the negotiating table. We are very pleased that the UN fact-finding mission is intended to go into Jenin towards the end of this week or early next week.
Lord Wright of Richmond: My Lords, will the Minister confirm that the British Government still regard the Palestinian Authority, under the elected President Yasser Arafat, as the legitimate administrators of the occupied territories? Will she also tell us what specific representations have been made either directly or indirectly to Israel about what appears to be the systematic destruction of the Palestinian Authority's infrastructure, including their computers and health and school records, and their continued restriction on the freedom of movement of President Arafat?
Baroness Amos: My Lords, we have made specific representations. Indeed, my right honourable friend the Foreign Secretary has asked our ambassador in Israel to talk to the Israeli Government about the alleged abuses which have been said to have taken place. That is why we have welcomed the UN fact-finding mission. It is precisely because we are receiving contradictory information about what is happening
126
and what is alleged to have happened that we require an independent fact-finding mission under the auspices of the UN.
Lord Howell of Guildford: My Lords, I agree with what has been said about the key role of the United States. I am also sure that the Minister will agree that European Union officials, provided that they can get the balance right, may have a role to play. However, does she agree with the comment this morning of a leading and very wise Arab leader that, of all the countries and major powers in the world, the United Kingdom has the most expertise and most experience in handling the appalling complexities of the Middle East? Will she encourage her colleagues in the Foreign Office to make a more direct contribution to the building up of a regional conference within which, out of all this bloodshed, the seeds of some kind of peace can be sown?
Baroness Amos: My Lords, first, I thank the noble Lord for his comments on the experience and expertise that exists in this country. However, it is important to remember that, as we have all said, this issue requires an international response. We have taken the lead within the context of the UN, but Saudi Arabia and Crown Prince Abdullah have also played a key role. The US has an absolutely critical role, and the countries within the region themselves have a key role to play. The key factor is that we should all work together and recognise that military action will not deliver a solution. We know that the two sides have to sit down and negotiate. In the long term, they have to be able to live together.
The Lord Bishop of Bradford: My Lords, is the Minister aware of the deep concern felt on these Benches about the deteriorating situation in and around the Church of the Nativity in Bethlehem, a place of the utmost significance for Christians and Christian sensibilities throughout the world? Among other concerns, am I right in my understanding that the people currently inside the church have water but no food although they have been there for 20 days or so? Can she please tell us what steps the British Government might be able to take to support local efforts by people of different faiths to bring this appalling solution to a peaceful and acceptable solution?
Baroness Amos: My Lords, I entirely share the right reverend Prelate's concern. There are at least 150 Palestinians—including about 80 members of the Christian orders—in the church in Bethlehem, and they have been there since Israel began its incursion into Bethlehem. It has been quite difficult to get accurate reporting on water and food. The last report that I saw indicated that water and food were running out, but I have certainly not seen a report indicating that there is no food. We are closely engaged in

127
diplomatic efforts to resolve the stand-off, and we will continue to do all we can to bring this situation to an end.

Tax Credits Bill
3.7 p.m.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, I beg to move that this Bill be now read a second time.
Last week, in his Budget Statement, my right honourable friend the Chancellor of the Exchequer made clear the Government's continued commitment to building a welfare state fit for the 21st century. We are determined to improve the support available to families with children, to streamline administration, and to tackle child poverty by targeting help to those who need it most. At the same time, we want to tackle the unemployment and poverty traps by making sure that work pays. Working within the constraints imposed by the systems we inherited, we took action in the previous Parliament to achieve those aims. We introduced the working families' tax credit, which is currently benefiting almost 1.3 million families, and the children's tax credit, a tax cut of up to £520 annually for about 4.6 million families.
Our reforms to date have been a success. However, the practical constraints imposed by the existing systems meant that they could not go far enough. Existing forms of support are divisive. Support for children depends on whether the parents are in work and whether they pay tax. Support for workers with a disability focuses on their disability rather than on the fact that they work; and some people, such as students and student nurses, fall through the gaps between those systems, excluded from all but child benefit.
Existing forms of support are also inflexible. WFTC and disabled person's tax credit are paid as a six-month fixed award, based on family circumstances and a snapshot of income at the point of claim. Once an award has been made, it cannot, except in limited circumstances, respond to changing circumstances and changing levels of need.
So, while the Government are not changing their objectives, we are—with this Bill and with the new tax credits it introduces—improving the way we deliver them.
The new tax credits represent the next, and important, step forward, allowing us to make further progress through a system which is fairer, more inclusive, better targeted and more flexible. The new credits will rationalise the existing systems of support, delivering more effective help to families with children and to working households.
Building on universal child benefit, the child tax credit will tackle poverty and provide targeted support to parents. For the first time, there will be a single credit to support families with children—one framework for income-related support for children,
128
reducing stigma, smoothing the transition from welfare into work, and broadening the scope of support.
The working tax credit will improve work incentives, tackle in-work poverty, and remove barriers to work. It will provide a single, inclusive credit for those in work, so that workers with a disability receive the support they are entitled to under the same framework as other working households; and it will extend support to working households facing poverty without either children or a disability.
Last week's Budget set out detailed information about the structure of the new credits and the levels of support they will provide. That is why the Second Reading was tailored to follow the Budget rather than precede it. Together, the new tax credits will provide initially an additional £2.7 billion to support families with children, tackle poverty and make work pay.
The child tax credit will, in total, target around £13 billion of support to around 5.75 million families with children. The credit will be made up of two elements. The family element will be available to all families with at least one child, recognising the additional responsibilities that come with parenthood. From April 2003, this will be worth up to £545 a year (£10.45 a week). It will be worth double that for families with a child under one year-old—extending the extra support provided to families with a new baby through the children's tax credit down the income distribution so that families on lower incomes who do not pay tax can also benefit. On top of that family element, an additional amount of up to £1,445 a year (£27.75 a week) will be available for each child, tailoring support according to the size of the family. This child element will rise to £3,600 a year (£69.05 a week) for children who have a disability, and to £4,465 (£85.65 a week) for children who are severely disabled.
This is an inclusive system. These amounts of child tax credit will not start to be withdrawn until family income reaches £13,000 a year—meaning that around a quarter of all families will receive the maximum amount of child tax credit on top of their child benefit. Together, this will ensure that these families are guaranteed £54.25 a week for the first child. So a family with two children and income of less than £13,000 is guaranteed support of £92.75 a week.
The family element of the child tax credit will not start to be withdrawn until family income reaches £50,000. Your Lordships will recall I explained that the child tax credit replaces the children's tax allowance. Some 80 per cent of families will receive at least this full family element on top of their child benefit, guaranteeing a family with income of up to £50,000 at least £26.50 a week for the first child. A family will continue to benefit from the child tax credit until family income reaches £58,000.
The working tax credit is designed to tackle poor work incentives and persistent poverty among working people. As I say, the child tax credit is designed to support children. The same level of benefit applies whether one is out of work or in work. One ports it from one to the other. It is a secure, portable

129
bridge of income. As I say, the working tax credit—the adult element—is designed to tackle poor work incentives and persistent poverty among working people. It will broadly replicate the support for adults provided through WFTC and DPTC but, for the first time, will extend support to those on low incomes without children or a disability aged 25 or over and working 30 hours or more a week. In other words, the adult element is available to those without children, unlike the current WFTC, unless they are disabled.
The working tax credit will consist of a basic element for all those who are eligible of £1,525 a year (£29.20 a week). Additional elements will provide targeted support according to household circumstances. For example, there will be additional elements for couples and lone parents worth an additional £1,500 a year (£28.80 a week), and a top up of another £620 (£11.90 a week) for those working at least 30 hours a week. People aged 50 or over returning to work from welfare will also be eligible for extra support from working tax credit for the first 12 months, helping them to settle back into work.
The working tax credit will be available for households with incomes up to a maximum of around £13,000 for part-time workers with children and almost £15,000 for full-time workers. On its introduction, it will guarantee a minimum income from full-time employment for those aged 25 or over without children or a disability of £183 a week for couples and £154 a week for single people. That is well above the minimum wage for the same number of hours. A family with one child and one earner working full-time on the national minimum wage will have a guaranteed minimum income of £237 a week.
Working tax credit replaces DPTC, bringing people with disabilities into the same system of support as other workers, but providing additional elements to recognise disability. The basic tax credit available for a disabled worker will increase to £68.35 a week—around £5 more than would be payable under DPTC. The minimum income guarantee for a single disabled full-time worker will rise from £172 currently to £194 in 2003–04. In addition, work incentives will improve for couples with two disabled workers, as the disabled worker element of WTC will be available for each person who qualifies.
We are also building on the success of the childcare tax credit in WFTC and DPTC by including a childcare element within the working tax credit. The childcare tax credit is already helping around 160,000 families in WFTC and DPTC with their childcare costs—around three times the number who benefited from the childcare disregard in family credit. Levels of employment among lone parents are now at their highest for 20 years. One message comes over consistently from lone parents when asked what is their greatest barrier to work: it is being able to afford reliable, quality and safe childcare.
In designing the working tax credit as a modern mechanism for removing barriers to work, we have listened to what parents and childcare providers have had to say about the existing arrangements, as one
130
would expect. As a result, we will make sure that help with childcare costs, provided through the working tax credit, is paid directly to the main carer, alongside the child tax credit. And, so that couples can decide themselves how to share responsibility for looking after their children, we will allow couples with children to add their hours together to qualify for the 30-hour top-up.
The Government will introduce changes to ensure that the childcare tax credit can in future meet the needs of even more parents. From April 2003–this is something I am sure the House will welcome warmly—eligibility for the childcare element of the working tax credit will extend to those who use approved childcare in their own home, as opposed to a child having to go to a nursery or a childminder outside, benefiting families who need home-based care, such as those with disabled children or parents who work outside conventional hours.
The working tax credit and the child tax credit will form an integrated part of the tax system. Based on annual income for a tax year, they represent a sea change in the way support is targeted. By basing entitlement on annual income before tax and national insurance contributions are deducted—in other words, on gross income—and aligning the measure of income more closely with that used for income tax, the new tax credits will extend the light touch income test currently enjoyed by middle and higher income families—what we all take for granted—to all families.
Assessing income on an annual basis, which the system will do, reduces hassle for claimants, who will be required to report their income only once a year and will be able to use information that is already available for tax—for example, on their P60—to do so. It also provides a fairer measure of income than the "snapshot" approach used in WFTC and DPTC, which bases entitlement for six months on income around the date of the claim.
Looking at gross income for the year—many commentators have not picked up this point although it is vital in the new system—will improve work incentives for second earners, who will be able to get the full benefit from their personal tax allowance when they move into work rather than seeing the effect of that allowance eroded, which can happen now because entitlement to WFTC and DPTC is based on their net, after tax, income. One of the by-products of the older social security system, as noble Lords will be aware, is that second earners have always been penalised by very high deduction rates that go as they move into work; otherwise, their partner would be eligible for support. Going for gross rather than net income reduces the deduction rate. It introduces additional income into and stabilises income in low-wage families. Moreover—in my view, this is extremely important— perhaps three-quarters of lone parents have come from couple families and they might have been encouraged to work through the arrangements while in a couple family. We should give them the best possible financial insurance, should they go on to become lone parents in future, to remain attached to the labour market.

131
Second earners stand to gain by virtue of going for gross rather than net income. Overall, the move to the new tax credits will mean that the gain to work for a second earner taking a part-time job at typical entry wages will increase by around £14 a week where the first earner is on half average earnings.
The new tax credits will also provide a system that combines continuity of support with the flexibility to respond quickly to changes as they happen, ensuring that support is targeted where it is needed and when it is needed. There will no longer be any need for families to wait for up to six months for their awards to respond to their changing circumstances, as people receiving WFTC and DPTC do now. Where circumstances change after an award of new tax credits is made—for example, if the composition of a household changes or a family's childcare costs change significantly—the awards will be able to respond to that change straightaway.
Awards will initially be based on family income for the previous year, ensuring that claimants have a known starting point and a degree of assurance about the level of their award. But awards will also be able to respond to rises and falls in income in comparison with the previous year—that is, going on to a current year figure—ensuring that resources are targeted effectively and, in particular, that those who experience a fall in income can have their awards increased to reflect that fall and thus prevent any perverse drive to drop out of work altogether.
After careful consideration of the available evidence, having examined similar systems in other countries and having discussed possible arrangements with representative groups, the Government have decided that awards should be able to adjust for all falls in income in comparison with the previous year. That means that recipients who experience a fall in income that will increase their award will be able to inform the Inland Revenue that they expect their income in the current year to be less than last year's, giving them the opportunity to get increased payments when they most need them.
However, we have decided that the system should be less responsive to rises in income. In other words, there is an asymmetry of generosity. Responding to all rises in income could lead to significant numbers of recipients having overpayments of tax credit—through, for example, wage increases or extra hours worked—which would need to be recovered. The Government have therefore decided that awards should respond only to rises in income in the current year of more than £2,500. Any increase below that amount will be entirely ignored. Rises of more than that amount will be taken into account only to the extent that they exceed the threshold. The first £2,500 of any rise will be disregarded. That will mean that the system provides certainty for people who enjoy small rises in income—they will not have an overpayment to make—and that people who are able to increase their income will know that they will see the full benefit of the first slice of their additional income. In other words, if one's circumstances worsen, one can get one's
132
increase in working tax credit and child tax credit immediately; if one's circumstances improve, one need have that figure adjusted for the current year only if the increase is of more than £2,500. That asymmetry allows for a decent response by the Government.
Finally, I should not neglect to mention that the Bill also provides for the transfer of child benefit to the Inland Revenue, as announced by the Prime Minister in June last year. Child benefit is a key part of the Government's strategy for eradicating child poverty. I assure noble Lords that it will remain an identifiable stream of income and universally available. The child tax credit builds on the foundation that is provided by universal child benefit. Universal child benefit remains the response of those without children to support those with children. The child tax credit allows a further redistribution that is targeted at those on lower incomes.
It makes sense to streamline the administration of financial support for parents. Transferring child benefit to the Inland Revenue alongside the introduction of the child tax credit will mean that the Government can deliver a joined-up service to parents, who will need to deal with only one department to get the support to which they are entitled for their children. The majority of the 7 million families who receive child benefit will also receive help through the child tax credit, so it makes sense for them both to be run by a single department. That will help to reduce hassle and red tape for families.
During the previous Parliament, we embarked on a wide-ranging programme of reform of the tax and benefits systems. We had to take action quickly, and we did so. But it is now time to take the next step forward by rationalising and modernising the support that is available to families and working households and by improving the way in which it is delivered. The introduction of the child tax credit and the working tax credit, and the transfer of child benefit to the Inland Revenue, will deliver that next stage of reform.
The new credits provide a fairer system. Awards will be based on family income for the whole of a tax year, giving a fairer picture of a family's financial position than the "snapshot" used in WFTC and treating single earner and dual earner couples alike, rather than continuing the bias in the existing children's tax credit towards dual earner couples. At the same time, however, the new system will improve work incentives for dual earner couples, for whom the fact that awards will be based on gross income will mean that they can keep more of what they earn. Treating income from savings just like any other income means that the system will also improve incentives to save, because families will not be penalised for their savings.
The new credits will also be more generous than existing systems. For example, most families with two children on income support will gain more than £9 a week from the child tax credit. One of the matters that most delights me about the child tax credit—this was not picked up very much by commentators—is that for at least this current Parliament it will be earnings linked, not price linked. A single earner couple with

133
two children working full time at the national minimum wage will receive about £400 a year more from the new tax credits compared to WFTC and the existing children's tax credit.
In addition, the fact that families will continue to receive child tax credit when they start work—with no need to submit a new claim and with the credit continuing to be paid at the maximum rate until income reaches £13,000—will improve security for families as they move from welfare into work.
The Bill introduces a fairer, more generous, more responsive system, which streamlines administration, reduces red tape for families and working households, which has been welcomed by business and which improves incentives to work and save. Those are important reforms that will allow us to progress towards our goals of tackling child poverty and delivering employment opportunity for all—goals that I am sure the House shares. I commend the Bill warmly to the House.
Moved, That the Bill be now read a second time.—(Baroness Hollis of Heigham.)
3.29 p.m.
Lord Saatchi: My Lords, I thank the Minister for her introduction of the Bill to your Lordships' House. On these Benches we have often said that there is a great deal of expertise in your Lordships' House on matters of this kind. I believe that Parliament is very fortunate to have the Minister, my noble friend Lord Higgins and the noble Earl, Lord Russell—perhaps three of the greatest experts in the land on such matters— to lead on this Bill.
As an introduction, I shall try to give a Treasury perspective to your Lordships. Before doing so, I am told that, under our new rules, I must declare an interest, which I now do. I am a shareholder in a company which provides consultancy advice to the Inland Revenue and I am a director of the Centre for Policy Studies.
Baroness Hollis of Heigham: My Lords, did we accept it?
Lord Saatchi: My Lords, that has yet to be seen. We shall find out.
If Bills were persons, this Bill would be a kind and generous soul, rather like the Minister, who was kind and generous only last week in arranging a personal briefing for many of the speakers in this debate. There, I am afraid, the resemblance between the Bill and the Minister ends. While the noble Baroness is always admirably clear and straightforward, the Bill is the exact opposite: "a monstrous thing", according to the editor of the FT, of "paralysing complexity", in the words of the editor of the Economist.
As the Minister said, there is no doubt that the Bill is well intentioned. It aims to boost the income of people in low-paid jobs. That is a fine and worthy aim and we support it. But, before commenting on the Bill, perhaps I may mention the parliamentary procedure that has brought the Bill before your Lordships' House
134
today. We believe that it sets a new and dangerous precedent on the balance between what Parliament determines in primary legislation and what Ministers alone can decide in secondary regulations.
In clause after clause of the Bill, periods, amounts, descriptions, definitions, rates, tests, entitlements, notifications, records and the whole paraphernalia of this system are left to regulation and to Ministers alone to decide. The fundamentals of the new tax credits scheme, some of which the Minister described today, were simply omitted from the face of the Bill as seen by another place. Who will receive how much and in what circumstances remained a mystery to the elected Chamber. Parliament was unable to judge whether the Bill's scheme would be beneficial or harmful to existing or potential recipients.
I give one example. Clause 8 deals with entitlement to child tax credit, but the elected Chamber was not told who is entitled, who is responsible for a child and which children qualify. All those fundamentals are left for regulations to provide for, or not, on whatever terms the Minister might choose. Ironically, while the elected Chamber could not scrutinise those details, we, the Chamber for whom financial Bills are famously strictly X-rated material, can do so, as we begin to do today. It is odd, is it not? We should like to see a more normal balance restored between Ministers and Parliament, and we shall bring forward amendments to try to achieve that.
I turn to the Bill itself. I would say that no Bill currently before your Lordships' House better reveals the philosophical gulf between the two Benches than this one. I should like noble Lords to consider for a moment a table in the Red Book. It is Table A1 on page 154. It is very helpful as it shows the impact of Budget changes. The first change is in lines 1 and 3: personal tax charges up £4.6 billion. The second change is on lines 18, 19 and note k: personal tax changes down £4.6 billion. The net change is nil, except for one thing.
In that pointless transaction, who benefits? The Government. What do they gain? Power. Who loses? The citizen. What does he or she lose? Independence. The Government like it that way because it puts the Government at the centre of events and centre stage. It is the Government who giveth and who taketh away. Most people believe that the tax system now takes around 39 per cent of GDP, but that is just the end result of the system. The total system collects a staggering total of 53 per cent of GDP. The citizen is then obliged to claim back 14 per cent of GDP—that is £143 billion—by navigating a mass of more than 250 complex tax allowances, reliefs, exemptions, credits, tapers, indexations, disregards and so on, to which list the Bill adds more.
Perhaps noble Lords will follow me for a moment in the strange history of the working families' tax credit. I believe that the Minister called what I am about to describe "sea changes". The Chancellor announced hits intention to introduce that credit in his March 1998 Budget, to take effect on 6th April 2000. But before the first tax credit was paid by employers, the Chancellor

135
announced in his March 2000 Budget that it was to be abolished and replaced by the employment tax credit for working households.
The working families' tax credit had a longer life than the employment tax credit because the latter never even made it to the statute book, let alone into the pay packet. In his Pre-Budget Statement, the Chancellor announced that the employment tax credit was to become the working tax credit. But that was a model of consistency compared to the history of the child tax credit. In the 1998 Budget, the Chancellor announced the introduction of the children's tax credit. That was to begin in April 2001, but it never made it. In his March 2000 Budget Statement, the Chancellor announced that the children's tax credit was to be replaced by the integrated child credit. Therefore, the children's tax credit had the distinction of being abolished before it was even introduced. But sadly, since then, the integrated child credit has itself disintegrated, and we are now left with only the child credit.
Perhaps I may tell your Lordships a little tale about the Bill before us. Under this Government, family credit, which had existed since 1988, has so far been replaced by the working families' tax credit, the employment tax credit, the working tax credit, the children's tax credit, the integrated children's tax credit and the child tax credit. To look at it another way, the average life of a tax credit is six months.
The result is that almost half the increase in government administration costs over the next few years—I am talking about £4 billion—is allocated to the collection of tax or the distribution of benefits. There are 140,000 government employees involved in the process. Yet billions of pounds of benefits and credits go unclaimed by millions of citizens who cannot fathom how to claim them.
The problem of take-up is endemic to the system that we are examining in the Bill. Many cities have a high level of social mobility and high population turnover. For many people in houses of multiple occupation, getting the post is a nightmare. Readership of local newspapers is low compared with that in other areas. The multiplicity of media outlets may be exciting but it means that it is difficult to get a message through to people. In addition, 130 languages are spoken in many cities. Thus, it is especially difficult to reach minority communities, which are among the poorest.
Therefore, the working families' tax credit's take-up has been estimated at 62 per cent. Only 72 per cent of entitled families with children had claimed the children's tax credit by December 2001. This year, following the introduction of the children's tax credit and the pensions credit, it is estimated that a further £2.6 billion of budgeted expenditure on tax credits will go unclaimed. Where is all this money? Who has it? We should very much like to know.
We all know about stealth tax. It is a tax charge unknown or incomprehensible to its victim. The Bill introduces us to a new concept in public finance—the
136
stealth credit. That is a tax relief unknown or incomprehensible to its beneficiary. But there is one crucial difference between a stealth tax and a stealth credit. The stealth tax is unerring in its reach. It achieves 100 per cent of what we call "take up". The stealth credit, on the other hand, reaches only 60 per cent of its beneficiaries. In other words, returning to my table in the Red Book, the £4.6 billion of tax rise from NICs, about which we heard in the Budget, will be paid to the Government, but the £4.6 billion of tax credit will not be paid by the Government.
In a debate in Committee in another place, the Financial Secretary said that the Bill would give us a tax system like a television set; so complicated that no one would understand it. But she said that that did not matter as all people had to do was to turn on the switch. What nonsense. How many of us have to fill in a 16-page application form to turn on our TV? All this complexity might be well and good if it worked in achieving some sort of basic objective of the kind the Minister described in her opening speech. Perhaps that might be some form of redistribution from rich to poor, which would be fair enough, but sadly not. We already know that the Government did not achieve what they claimed they had; that is, taking 1.2 million children out of poverty. According to the latest figures the Government achieved taking out only 300,000 of 2.4 million children officially in poverty.
However, that is only the beginning of the awesome injustice of this system. Let us consider this. The Government regard a child as being in poverty if he or she lives in a household which has an income below 60 per cent of the median. Yet the poorest 10 per cent of people now pay a record rate of between 50 per cent and 63 per cent of their income in tax. The least well off pay the highest rate. It is a mad world with the poor paying higher taxes than the rich. According to Inland Revenue statistics for 2000–01, a total of £3 billion was received from 8 million taxpayers with annual gross incomes below £10,000. Incredibly, the Budget last week adds to the tax burden on those people. On page 12 we find that the poorest people will now pay £1.65 per week more in tax. Is it not outrageous that 3.6 million people, who earn less than half the national average and are officially defined as "in poverty", should pay any tax at all? They suffer not just because their incomes are too low but because even people on low incomes have their already low income further reduced by tax.
At present the Government first tax people on low incomes. They then means test their income; offer them benefits and credits such as these to restore their income back to where it was before they paid the tax; and then finally tax some of the benefits, with the poorest people bearing the heaviest tax burden. Meanwhile, the upper half of income earners, who should have nothing to do with the benefit/credit system, receive 30 per cent of all benefit expenditure. Now, with the Bill, if I have correctly understood it, households on £60,000 per year—that is three times average earnings—can claim a credit.

137
In the dependency culture at the root of the Bill, almost a quarter of the households in Britain are already means tested for benefits. The Bill and associated measures will increase that proportion to nearly 40 per cent in the next two years for everyone and to between 50 per cent and 65 per cent for pensioners. In a nation of dependent benefit claimants, only 10 per cent of families now fail to qualify for some sort of state hand-out. The Government have bizarrely devised a means-tested system not for the poor but for 90 per cent of families in the country.
As I said, the Bill shows the philosophical gulf between the two Front Benches. In a remarkable essay Immanuel Kant declared that
"to be civilised is to be grown-up".
To be grown up, he wrote, is not to abdicate one's responsibilities to others; not to permit oneself to be treated as a child or barter away one's freedom for the sake of security and comfort. He said that a paternalist government based on,
"the benevolence of a ruler who treats his subjects as dependent children … is the greatest conceivable despotism and destroys all freedom".
He said that unless a creature can determine itself, it is not a moral being. Kant was absolutely definite on this point: autonomy was the basis of all morality. His writings were celebrated models of liberal rationalism. He is a symbol of the enlightenment of the 18th century, yet I would say that his teaching is an appropriate starting point for the examination of the Bill in your Lordships' House today.
Like Locke, Rousseau, Jefferson and most of the champions of liberal democracy, Kant placed immense stress on independence, inner directness and self-determination. He wanted a free man to be able to say, "I am the captain of my soul". This Government want the exact opposite: the people as dependent children; themselves the master, the Bill the instrument of their power.
3.45 P.m.
Lord Rix: My Lords, those who were present at the extremely helpful meeting in the Moses Room last week, conducted so courteously by the Minister, will be all too aware that in discussing the Bill I shall focus my attention on childcare in the home and the effectiveness of the new working tax credit in supporting people with a learning disability who wish to work. It is slightly unusual for me to be debating Treasury matters. I usually find myself in fiscal rather than political exchanges with the Inland Revenue.
I thank the Minister for her explanation of the Bill and the thinking that lies behind it. I am delighted that after effective campaigning by Mencap—of which I have the honour to be president—and other voluntarily organisations, parents of disabled children will now gain tax credits for childcare which has to be undertaken in the home. It is gratifying to know that the Government have listened to the call for change, a welcome benefit to many parents of severely disabled children across the country.
138
I also welcome the main thrust of the proposals to create a working tax credit which gives additional financial support to people on lower incomes, with special provision for people with disabilities. My concern about the working tax credit, though, is about the continuing lack of employment opportunities for many people with a learning disability. That situation may be improved by greater flexibility in the tax credit regime, but I must remind your Lordships how pitifully few people with a learning disability are afforded paid employment.
Research by Mencap suggests that many people with a learning disability would benefit from financial assistance in employment. The Government's mantra on welfare to work seems to refer only to full-time paid work. That is borne out in the rules for the tax credit system known as the 16-hour rule. That means that people working fewer than 16 hours per week will not be able to access the new tax credit and will not receive any extra money to top up low-paid employment.
But for many people with a learning disability part-time work is a more realistic possibility. Part-time work can also be a source of extremely important training or experience and can develop the self-confidence of a person with a learning disability, a large proportion of whom work at the lower end of the earnings scale and never come close to boardroom salaries. Sometimes that can be as a result of discrimination or lack of support, but in many cases it can be attributed to the limitations of the individual's disability.
A phased entry into the tax credit would enable claimants to gain a foothold in the labour market by working fewer than 16 hours per week for a limited period. Working out a formula to phase in entry into the tax credit system is no mean feat. Certainly, it would defeat me. Mencap understands the complexities of such a solution. I said that I do not support over-complication of the tax and benefit system; to over-complicate is to lose the main thrust of the welcome proposals. However, I am all too aware that the 16-hour rule may well be set in governmental quick-drying cement.
Therefore, an alternative which may be preferred by the Government is to increase the income support disregard up to, say, £35, rather than its current limit of £20. People with a learning disability may do a limited amount of part-time work under what is known as the income support disregard. That allows them to work for up to four hours at the minimum wage without losing any income support. The £20 disregard was an advance on the previous £15, but did not restore the real-terms value of the disregard 20 years ago. A figure of £35 a week would enable disabled people to work part-time, up to eight hours, without being penalised and provide a fairer and a more progressive entry into full-time employment. If the Minister is not persuaded by the argument for a phased tax credit, perhaps she will give this alternative proposal some consideration. Having benefited from the Minister's understanding and help in the battle for the SERPS inherited rights, I can but live in hope.

139
In conclusion, I believe that the new tax credits will improve the situation of some low-paid workers and parents with disabled children, but there is a danger of missed opportunity for those who do not conform to the standard picture of working and family life. I look forward to the Minister's response and to the assurance that people with a learning disability will have the employment opportunities which the rest of us take for granted.
3.50 p.m.
Lord Howe of Aberavon: My Lords, I follow the noble Lord with respect for his expertise in the area of this topic. I am all the more conscious of my own current lack of expertise. The Minister and I happened to meet each other yesterday. She expressed a certain degree of surprise at my appearance on the List of Speakers for this occasion.
Baroness Hollis of Heigham: My Lords, I hope that the noble and learned Lord appreciated that it was delighted warmth.
Lord Howe of Aberavon: My Lords, it was not unwelcoming, but I detected a degree of surprise. That was understandable because it is probably almost 20 years since my days in the Treasury when I last grappled with anything as complicated as this issue.
If one goes 21 years further back to November 1964 and to my maiden speech in the other place—here the battle on these issues was joined between Lord Joseph and Lord Houghton, alas both deceased—I asked for a solution to the problem with which we are grappling. I look back with affectionate naivety at the sentences:
"The solution … must be one of which all in need can take advantage. It must be … simple".—[Official Report, Commons, 12/11/64; Col 1239.]
During the time I grappled with these matters, I worked alongside much greater experts than myself who are still around. My noble friend Lord Cockfield—alas not with us at the moment—has forgotten more about this than the rest of us have ever known. He still remembers more than we shall ever know. My noble friend Lord Higgins is another in that category. I therefore touch upon the subject with some diffidence.
I began by asking myself where the money is coming from and how will it be raised to finance this and other munificent matters. In rather an old-fashioned way, I sought a copy of the Budget speech from the Printed Paper Office. I found it a remarkably unrevealing document in all the crucial matters with which we are here concerned. A strange feature is that in its 30 printed pages the symbol for the pound does not appear. It is spelt out in some strange fashion as an Anglo-Saxon word—a "pound". I wondered whether that meant that the Chancellor's word processors do not have the "£" symbol on them. Are they perhaps already equipped with the euro, or even the dollar since his glance is more often in that direction? One would like to know why.
140
If one looks at the more serious details one finds that the only figure given of the yield, the burden or the net figure of what is produced for any of the tax changes is a single figure for the net yield of all the changes. It is a figure of between £6 billion this year and £8.3 billion in 2005. But the cost, the burden or the changes imposed by particular tax changes are never to be found. One has to go therefore to the Red Book. That has changed a good deal since I last had a little Red Book in my hand. In my last two years in office the two that I produced were 48 and 44 pages in length. They cost just under £5. The volumes produced by the Chancellor this time, on pages twice as large and multi-coloured, are 500 pages in total at a cost of £50. I do not believe that the intelligence available reflects the increase in activity and expenditure.
One of the more notable discoveries is the hugely important part played in raising the revenues for these changes by the scarcely disclosed burden of the 1 per cent payable on national insurance contributions by the employer, the employee and the self-employed. Of the £8 billion raised by that, £4 billion—this is the important point on the revenue-raising side—comes from the employers' payroll tax. I seem to be almost alone in reacting to that by saying, "Haven't I seen that somewhere before?" Indeed, one finds that one has seen it somewhere before. Way back in 1976 when the noble Lord, Lord Healey, was under pressure from the International Monetary Fund, lo and behold he introduced a 2 per cent national insurance surcharge which was payable by the employers. In 1978, still under pressure from the IMF, that was increased by a further 2.5 per cent, as he intended. But the Liberals rode to the rescue and the Lib/Lab pact had the effect of reducing that 2.5 per cent to 1.5 per cent. So we ended up with a 3.5 per cent national insurance surcharge, known as "Healey's tax on jobs". That is what we are now revisiting in this particular burden. I am very anxious that that idea does not spread, if it is not already deeply rooted in the Chancellor's mind. It is 1 per cent this year; it reached 3.5 per cent when they were last at it.
Between 1982 and 1984 in the Budgets introduced by my noble friend Lord Lawson and myself, we got rid of that. It is very important to understand the potential danger of this burden on employers and, above all, on jobs, which is the engine that is driving the generosity to which my noble friend Lord Saatchi has referred.
That is how the money will be raised, but how will it be distributed, and with what side effects? The Minister has talked quite often about an integrated system. Integration is the flavour of her speech if not of the substance which she has been describing. As my noble friend Lord Saatchi has pointed out, the regulations to be made under the Bill set about defining a whole range of "elements", as they are called, defining a married couple, defining what kind of unmarried couple can be benefited as though they are a married couple and defining "relevant" incomes with at least nine different "relevant factors", with power to prescribe a great deal more. All those features are to be prepared in a separate code of regulations, as

141
my noble friend points out, unscrutinised by either House of Parliament but quite separate and distinct from those already in operation for pay-as-you-earn under the income tax legislation.
Speaking quite personally as chairman of the steering committee of the tax law rewrite project, this year we want to rewrite in a more intelligible form all the primary legislation which deals with PAYE. The secondary legislation on that topic is itself so unintelligible that that is also being rewritten, not by ourselves but by the revenue authorities. So at the same time we are rewriting in simpler terms legislation on these very topics dating back to early in World War II. Alongside that, under the legislation now before us power is being given for a completely separate code which addresses the same question: who is entitled, in what way, and to what amount? All the methods of enforcement, discovery, revision and appeal are to be set out in regulations.
However, I cannot believe my eyes because we are now generating two completely separate distinct codes addressing essentially the same elements. I ask myself: how disintegrated can an integrated system become?
The other feature which has already been pointed out by my noble friend Lord Saatchi is the very simple point that this network of claimable benefits will be available to those earning up to £58,000 per year. Only 10 per cent of families will fail to qualify for the examination of claiming or not claiming the benefits available under these provisions. They will be paying marginal rates of 48 per cent in the band between £50,000 and £58,000. It will cover of course childless couples as well and pensioners with a special credit. In saying that, one does not object to the attempt to direct benefits in that way, but it really is an extraordinary jungle. I mentioned possible side-effects, and there are two in particular. The first is the effective abolition of the independent taxation of married women—even if they are not actually married, as it happens, because unmarried couples can qualify in the same way.
In 1968, I was a member of a committee that produced a booklet with the bizarre, patronising title, "Fair share for the fair sex". It was a long time ago and a bit old-fashioned, but the objective was the same. One of the many objectives that we set out was independent taxation for women. In my second Budget in 1980, I produced a Green Paper on the subject. My noble friend Lord Lawson in due course—by 1990— implemented it. That was one occasion on which both my noble friend and I could bask for a moment in the admiration—if your Lordships can imagine—of our spouses and others for having done the right thing.
The introduction of the proposed system, applying to nine families in 10, will require married couples when considering whether or not to apply for such grants to aggregate not only their income but their working hours. All will be revealed. The concept of independent taxation will disappear altogether.
Secondly, what is almost recreated is what was at the heart of Nye Bevan's case on behalf of all people with experience of its impact in South Wales between the
142
wars—the case against the household means test. That is in effect being reintroduced across the canvas—not only will there no longer be single taxable units but there will be a single means test. That is much to be regretted.
Towards the end of the Minister's peroration following her helpful description, she said that as a result of the changes, the Government can deliver a joined-up system. There is a huge inaccuracy at the heart of that. The Government cannot deliver anything; the system will be administered by employers through the pay-as-you-earn system. That is at the heart of the idea of an integrated system. If it is to be done, it needs to be done with much more sensitivity. The Government will not be delivering it: employers will struggle to deliver it; a random sample of people will struggle to claim it; and it will fail to achieve the objectives that we all share.
The noble Baroness may ask me to explain how I would set about achieving those objectives in a different way. We should return to focusing the system on much narrower targets, not spread out the target across the entire income range of the population. We should concentrate on simple objectives—as my noble friend Lord Saatchi often suggests: raising the tax threshold.
The Budget also freezes the threshold for income tax and national insurance. By that very act, a large number of people are brought back into the tax system. Alongside the reduced rate band, that means that still more people are in the tax system than if the threshold were raised.
I must stop reminiscing and draw to a close. In my second Budget I was able to scrap the reduced rate band—the 25 per cent band—introduced by the noble Lord, Lord Healey, and substantially raise thresholds. The reduced rate band is of almost no value at all in helping those in poverty. It is a tranche of lower tax income available to everyone and, by its very existence, it lowers the tax threshold. By that one simple change, I reduced the number of people at the Inland Revenue by 1,300, with a corresponding reduction in the private sector.
So that is my approach: narrow the targets; restore something like the standard benefits available under the simpler system; and make the system manageable, instead of proceeding down this fluctuating path in which any objective that is fulfilled is rapidly swept away.
I say all that with great regret because, as I said at the outset, the objectives are ones that we all want to achieve. The fact that we have all struggled with them for so long shows how difficult it is to achieve them, but the way in which the proposals have been introduced means that in several respects we shall be moving in the wrong direction. I say that with much regret.
4.4 p.m.
Baroness Noakes: My Lords, it is, of course, extremely difficult to follow a speech such as that of my noble and learned friend Lord Howe of Aberavon,

143
whose huge experience and expertise as a former Chancellor and current commitment to the tax rewrite project make him especially well-qualified to comment on the Bill. However, from my much lower base of expertise, I hope to be able to contribute to the debate.
Let me say at the outset that I have no problem in principle with bringing together the tax and benefits systems. But that approval in principle is subject to several important provisos. First, the Government should not pretend that benefits are anything other than benefits. They like to score benefits as if they were negative taxation—thereby fiddling the figures. I am aware that accounting conventions are rather dull material and not normally the stuff of our consideration as Bills pass through the House, but I hope that we can make an exception for the Bill. It is time that the Government stopped cooking the books.
My second proviso is that it is logical to merge the administration functions only if the concepts and basic approaches to measurement and coverage are the same. Here the Bill fails almost completely. The Bill takes the existing social security approach to benefits and sticks it alongside an entirely different approach in the Inland Revenue. The social security and tax elements will come together only in payment of the benefit—where the Inland Revenue will again use businesses as its unpaid tax administrators to shoulder most of the burden.
We should be in no doubt that the systems are quite different. For example, the Inland Revenue deals with taxpayers as individuals. Each submits a return and they are genuinely treated as individuals. My noble and learned friend Lord Howe told us of his contribution to the creation of independent taxation. Obviously, there are some instances in which marriage is relevant—for example, capital gains tax treatment of transfers of assets between spouses—but that does not result in individuals being treated other than as individuals in their own right.
The benefits approach contained in the tax credit system is quite different. In the social security system, the concept of a household unit reigns. If a person is married, he or she loses his or her individual identity for tax credit purposes. Even worse, the household unit also applies to unmarried couples—although illogically not to same sex couples. So the Inland Revenue will deal with individuals as such for tax purposes but as household units for tax credit purposes. It will have to enquire not only into marital status but also the status of relationships which are not the result of marriage.
Perhaps I may give your Lordships another example of a huge difference between the two systems. The tax system taxes income according to a series of statutory provisions laid out in Acts of Parliament. There is a system of schedules and cases for income with clear rules attaching to them. Of course, from time to time, it is necessary for Finance Acts to introduce new rules to ensure that all sources of income are brought into charge. But the system is statutorily based and hence receives detailed scrutiny before it is enacted.
144
The tax credit system, rooted as it is in the social security system, does not do that. Entitlement to credits is based on a concept of "current year income", but that has no firm statutory base. Rather, as we have heard, it rests on regulations. For example, the regulations under Clause 7 can do several things. They can prescribe income to be treated or not treated as being income for a particular tax year. They can prescribe that a person has income that he does not have or does not have income that he in fact has. The Inland Revenue has no equivalent provision for tax purposes except some specific provisions—usually for anti-avoidance purposes—that are clearly spelled out in Finance Acts.
So a tax credit system might make sense if it took the existing tax basis and fitted social security benefits within it. Or, it might make sense if a more complex synthesis of the tax and social security systems had been attempted. In either case, the taxpayer or benefit recipient would be approached in the same way. The Bill does not do that, and we are left with a real puzzle as to why the Government are bothering to transfer benefits to the Inland Revenue.
One reason may be that the Inland Revenue is more efficient than the Department for Work and Pensions. Certainly, the Inland Revenue has a better track record of introducing new computer systems. Given the department's unimpressive attempts to introduce the new child support system, one might well conclude that it might be beneficial to call that a tax credit and transfer it the Inland Revenue. The regulatory impact assessment makes no claims for greater efficiency; it just says that the Inland Revenue's costs will go up now and costs for the Department for Work and Pensions will go down. It does not comment on the relationship between them. Another reason might be the cosmetic desire to pretend that tax credits are negative tax. Nobody is really fooled by that.
I have come to the conclusion that the real reason is territorial aggrandisement by the Chancellor. The Board of Inland Revenue is his department. The chairman of the board reports to the Chancellor. The tax credit system enables the Chancellor to spread his control way beyond the traditional boundaries of the Treasury. It is classic Treasury power play. As a former secondee to the Treasury and as someone who has worked with the Treasury for many years, I am aware that the prevailing culture and belief is one of superiority over every other department. The combination of that mindset with the ambitions of the current Chancellor is a dangerous one constitutionally. I have concluded that we are not considering the Tax Credit Bill for any sound reason. The right course would be to reject it.
If we do not reject it, we must consider its provisions carefully. As my noble friend Lord Saatchi has already said, there is a big difference in the use of regulations between this Bill and tax legislation. Of course the Inland Revenue uses regulations, but it does so less frequently. PAYE regulations are one example, but others are few and far between. This Bill, however, has 44 clauses in Part 1, 20 of which create regulation-making powers. Virtually the whole of Part 2 transfers

145
a load more regulation powers to the Treasury or the Inland Revenue. Regulations made under the Bill are subject only to the negative resolution procedure. I am sure that we will want to consider that carefully in Committee.
It is fundamentally unsound to conduct virtually the whole of the tax credit system by way of regulation. In addition to reduced parliamentary scrutiny, it results in a system that is inaccessible to the people affected and their advisers. The tax credit system is complicated, and the use of regulations makes it more so. We know that the practice is to issue regulations and, if they are wrong or need to be improved, to issue more regulations amending the earlier regulations and so on. I remind the Minister of the child support order that we debated on 11th April. That order had nine substantive regulations, amending nine different orders, derived from powers in two Acts, one of which had amended a previous Act. Ordinary people and their advisers do not stand a snowflake's chance in hell of coping with that degree of complexity.
The Minister will not expect me to pass up an opportunity to refer to burdens on business. Tax credits are such a burden, especially for smaller businesses. The regulatory impact assessment says that businesses will save £11 million. However, with 300,000 employers, that works out at £37 each, excluding the cost to those businesses of upgrading their payroll system. Even that, however, misses the real point. The tax credit systems are already a huge burden on employers. Whether or not the Government fund the cash-flow implications of the tax credit system, the operation of the system is the real imposition. In its recent paper, The Red Tape Menace, the Institute of Directors called for the Government, rather than small and medium-sized enterprises, to pay tax credits. I3usinesses the length and breadth of this land will say, "Amen" to that.
4.15 p.m.
Baroness Andrews: My Lords, it gives me great pleasure to speak in the Second Reading debate on the Bill, although that pleasure is tempered by the triangulation of expertise on the Front Benches and the fact that I follow a distinguished speech from the noble and learned Lord, Lord Howe of Aberavon. It is a historic Bill, and it would not be so radical or so inclusive had it not been for our Minister in this House, who champions the cause of poor families inside and outside the House.
I am disappointed by the scepticism that has been expressed on the Benches opposite. I heard from another group of experts yesterday in the All-Party Children Group. They represented the whole poverty lobby that has worked closely with the Government to prepare the Bill. First, they spoke, without equivocation, of their appreciation of the way in which their concerns and their expert views about the delivery mechanism and the changeover to tax credits had been listened to during the consultation process. They expressed delight that the Government had gone further—in some respects—than they had anticipated to put money in more accessible places. They
146
expressed their conviction that the abolition of poverty—notwithstanding the debate about numbers—is a non-negotiable part of government policy and said that they were happy to support that. They were confident that the Budget would make "a real difference" to the poorest families.
I have sat through many anti-poverty strategy meetings in the past 20 years. I have never heard such an unprecedented vote of confidence in a government. We have not heard much about families today, but I want the House to reflect on what it means to be in poverty in the opening years of the 21st century. The Family Welfare Association has calculated that, once household costs and bills are paid, the poorest families have £3 a day on which to feed and clothe every child and provide them with the sort of extras that families always want to provide. The Bill is central to any attempt to improve that situation.
Poverty is seamless in its impact. It feels the same whether one is in or out of work. That is why we should have a seamless policy in response. Seamlessness has been elusive; no one knows that better than the noble and learned Lord, Lord Howe of Aberavon. I remember when the Supplementary Benefits Commission was being wound up in 1979, after the failure of negative tax credits. The structure of supplementary benefits was then described as a once-noble strategy that had become surrounded by ramshackle sheds and outhouses that were in danger of bringing it down. We have not made a great deal of progress, but we have responded to some of the things for which the poverty lobby has been asking for a long time.
The strength of the Bill lies in its reliance on evidence and expertise. It is not a technical Bill in the sense that it is incomprehensible. It does not simply re-define the definition of poverty. It deals with some of the historic barriers that keep people in poverty. For years, the poverty lobby begged the Government not only to recognise that all poor families are poor in the same way but to provide a kinder and more responsive system, with simpler assessment and wider access and in which payments are paid to the responsible carer. That will provide greater security and greater dignity.
The noble Lord, Lord Saatchi, had a great deal of fun with evolution and abortion of different forms of credit and their titles. With the best of intentions, there has come greater complexity. Family lives are extremely complicated. There are four separate routes for child payments: universal child benefit; child additions attached to income support and JSA for people out of work; child credits attached to working families' tax credit; and a children's tax credit for people in work. Yes, there are four different credits each applied for separately, each assessed separately, each awarded separately and each award going to make a similar difference in a similar way. The Bill takes a bulldozer to that undergrowth and complexity and it creates a broad highway out of poverty.
The crucial test will be take up. I believe that it will be increased for the following reasons. First, the separation of work credit and child support is long

147
overdue. It puts an equal value and dignity on both. One cannot underestimate the value of symbolism in social security. It is extremely important for people to be treated with dignity.
In terms of the child tax credit, we are moving towards a new definition of "universalism". The great strength of child benefit has been that it goes to every family. It creates a contract of interest in the welfare of the child. Creating a single tax credit with the same level of credit for all children signals the value and the needs of all children. I do not believe that that is a reflection of dependency and I greatly doubt whether many families do so. The decision to uprate the child elements of the child tax credit in line with earnings extends that contract. It means that all families now have a vital share in a growing economy.
Supporting all families, but giving greater help to those who need it through an inclusive test of income and not a means test, which stigmatised the claimant —and I entirely with what the noble and learned Lord, Lord Howe, said about the means test—will encourage take up.
Secondly, I warmly welcome the decision to pay the child tax credit to the carer. It will usually be the mother. The childcare tax credit will also go to the carer. I do not see anything stealthy about that. I can think of systems which are less stealthy than the mother caring for the child and receiving the benefit. I am sorry that the noble Baroness, Lady Castle, is not in her place today because she fought and won that battle in 1975 and she would have some warm words to say about the way the change is being made. It will simplify and encourage take up.
Moreover, unlike the other place which struggled with a fog of assumptions—not knowing how the benefits will kick in and what will be the interrelationship between them—we now know how generous the Chancellor has been. A child credit of £54.25 a week for the first child in families with incomes of less than £13,000 will have a real impact on the family food and clothing bill. And there is something else to rejoice about: the disregard on maintenance has already been shown to have a positive effect on work incentives for mothers eligible for working families' tax credit and the disabled person's tax credit. It goes along with common sense and flexibility, which I believe is written through the paper that accompanied the Budget, and with the equally welcome decision to fence off the capital cliff edge so that people are not suddenly shoved over the edge when they hit the capital barriers.
I turn to the decision to pay credits in retrospect on an annual basis. I, too, believe that that will bring enormous benefits to family management. Trying to stretch a budget across a week is an art form. Trying to stretch it across an unpredictable year is a fine art which few families can manage. Moving on to an annual entitlement will reduce the burdens on families, the crippling unpredictability of income and the burden on the awarding agencies.
148
That change, above all, is at the heart of the Bill. It will require immense and scrupulous care in terms of the transition process. It will mean providing quality of and access to information and extensive training of new staff. It will mean that we must have the best IT system. It is extremely difficult for any social security system to strike the right balance between simplifying the system and taking into account the chaotic circumstances of family life.
What cheers me is that in the papers I have seen there is a clear determination to minimise the risk at point of transition. The Government have got it about right. Disregarding small losses of income while allowing for rises of less than £2,500 is a good and sensible way to act. It is practical. I am also pleased to see that the preferred method of dealing with overpayments will not be to issue one-off demands. We do not want to fall into the trap which the Australians fell into.
However, there is a major challenge to families in collecting information in new ways. They will need help to do that. It means a change of habit and culture. That was explored at some length in Committee in another place. There is no doubt that it will be much more successfully managed if we do what the Minister in the other place suggested; that is, recognise what real life is all about. Families will need contact and support from groups which are used to providing information and help. The transition process is crucial. I am rather sceptical about the emphasis placed on online applications and would welcome the Minister's views on that and on the process of publicising and supporting the transition.
In conclusion, I want briefly to comment on two aspects of the Bill. I am delighted that by separating out work credits from child credits it is finally possible to help students and student nurses with their childcare costs. I notice that the General Secretary of the RCN warmly welcomed that. She said that nurses are being forced out of nursing because they cannot afford their childcare costs. What a time for nurses to be forced out of a profession that is longing to recruit more nurses and when we have so many mature students entering higher education. We need their skills and we must provide such help.
Secondly, I am delighted that people in work and on low incomes but without children will be brought into the tax credit system, especially young people. The uncertainty and difficulty in getting a first job, acquiring crucial skills and being unable to obtain support on very low incomes is a major issue. Providing an extra £30 a week for couples earning less than £10,000 will make a huge difference.
Finally, I have some questions for the Minister on issues opened up by the Bill. Like the noble Lord, Lord Rix, I greatly welcome the decision to extend childcare tax relief to families using their own homes. I wonder whether this is the time to grasp the nettle and whether the Minister, as only she can, will try to charm the Chancellor into making this the first move in provision for all informal childcare. That will have a profound effect on lone parents in work.

149
To extend the metaphor, the other nettle is the disproportionate number of large families in poverty. Is it not time to see whether something more sensible can be done for those people and their families? Finally, given the reliance of families in poverty upon passported benefits—a question that was left hanging in the other place—has progress been made on the attachment mechanism to the new important benefits?
I think that we have a historic Bill which raises the prospect of achieving what everyone wants to see; that is, a reduction in the number of families living in poverty and a more effective and appropriate system for doing that. The process is the challenge and it needs to match the principle. But, given the consultation and the way in which it has worked so far, I am more confident that it can be achieved.
4.28 p.m.
Lord Freeman: My Lords, it is a pleasure to follow the noble Baroness, Lady Andrews, because I find myself in agreement with a great deal of what she said. She has tremendous experience in the field. One of the key points she made at the outset of her speech was the value in and the need for a kinder and more responsive system. Members on these Benches would agree with the noble Baroness that it is not a question of why; it is a question of whether: whether what is proposed will deliver what the Government correctly and legitimately want in terms of improved care for those on low incomes but in work and those who have children.
I declare an interest as an adviser to PricewaterhouseCoopers, part of the wider accounting profession which each year has to deal with what seems to be a geometric progression in tax legislation. It is rather like an Irish tide with a strong westerly gale; one is always ho ping the tide will recede but somehow it never does. I thank the Minister for her courtesy in providing a briefing before Second Reading—something devoutly to be wished would apply to other departments. It is greatly helpful to debate on a common platform of facts.
The Minister asked noble Lords, particularly Back-Benchers, to write to her. I shall do so, in the hope that her answers to specific points will illuminate the Committee stage.
My noble friend Lady Noakes and others have already made clear that the Government have embarked on a process of drawing together tax and part of the social benefits administration and cash flows, which are increasingly to be managed by the Inland Revenue. We ought to be clear that we are not entering or re-entering—as the noble Baroness, Lady Andrews, implied—an integration of the tax and benefit systems, to replicate previous experiments with a positive and negative tax system. That is not being offered. However, it does beg the question of what further tax credits are planned. What other aspects of the social benefits system are to be marshalled together with the tax system? There are fundamental differences between them still.
150
The noble Baroness, Lady Noakes, correctly said that the income tax system is based on a retrospective assessment of people's income that is annually assessed. PAYE is a clever mechanism for extracting payments on account but fundamentally the system is retrospective. The social benefits system of which tax credits are a part is a prospective application of assistance. It can be adjusted during the year, but many of us involved in the practical administration are delighted that we are dealing with the provision of tax credits on the basis of an annual estimate of income. It is either retrospective in certain cases, when adjustment comes within the year, or is an estimate of income for payment during the course of the year.
My noble and learned friend Lord Howe and others pointed out an even more fundamental difference—that since 1990, thank heaven, tax is based on individual assessment. My noble and learned friend's seminal pamphlet published by the Bow Group in 1968 almost doubled overnight the number of young, thrusting professional women joining the Bow Group. His was an important seminal thought that eventually became law in 1990.
A number of anomalies are created because the tax credits system is based on the family unit. When two systems are run in parallel, a number of complications arise. I will not deal with the vexed problem of varying marginal rates of withdrawal of benefit or increases in tax—which is inevitable when two systems are run in parallel.
I want briefly to flag up some of the administrative complications that have, under similar reforms in the past, led to lower take-up. Heavens above‡ A 62 per cent take-up for the working families' tax credit is no credit at all. Three areas need to be addressed early. I have always thought it anomalous that your Lordships' House and another place examine the principles of legislation but do not seem to devote the same time to looking a t how the processes are introduced and the results. We have Select Committees but there are lessons to be learnt from other legislatures—particularly across the Atlantic.
The areas I want to touch on are application forms; the sufficiency of the resources devoted to the reforms by the Inland Revenue; and the transitional arrangements and start date. When the Minister winds up, perhaps she will say whether draft regulations can be made available before the Committee stage. I dare say that is possible. It would immensely assist the progress of the Bill through your Lordships' House if we can see the entire shape of the reforms. Tribute is due to the Minister's Department and to the Inland Revenue on a great improvement in the quality of the consultations on the introduction of the two new tax credits with lobby groups, the accountancy profession and employers—compared with the experience of 1998, 1999 and 2000 in relation to the working families' tax credit.
First, application forms must be easily understandable. The noble Baroness, Lady Andrews, rightly referred to families who are literally in a state of chaos. It is difficult for them to understand forms as

151
easily as your Lordships. Clear English is needed for the regulations, leaflets, forms, code of practice, and the setting out of claimants' rights and obligations. The Bill is already a step forward. I am sure that my noble and learned friend agrees that the text is much clearer than in the past, which goes for both administrations.
Secondly, I am suspicious of the resources being devoted by the Inland Revenue. There will need to be excellent linkage between the Inland Revenue, job centres, local authorities and pension schemes. I am doubtful that the software, hardware or procedures are in place to ensure that that happens. Citizens ought to be offered so-called "better off" calculations. If someone claims for either of the two tax credits in the Bill, will they be better off? I refer to the perverse influence of the marginal rates in certain cases. Personal counselling and help should be provided to applicants. We should learn by experience. The Government should not be too proud to return the legislation to Parliament after three, six or nine months to amend and simplify the procedures.
I share the scepticism expressed by my noble friend Lady Noakes about IT. Sophisticated IT will be needed. I give your Lordships a specific example. When someone comes out of work, he or she will have to apply for income support. The Inland Revenue needs to get that information automatically transferred, probably electronically, so that child tax credit can be changed. There must be a linkage also to local authorities, in the provision of housing and council tax benefits. The mind boggles at the complications.
Finally, 6 million households will move to the new tax credits system by and on 7th April 2003. While your Lordships may welcome the fact that there is to be no overlap between the payment of working families tax credit and working tax credit for employers—that would be a complication—unless the administrative complexities are mastered and we can be assured of a more successful take-up rate, I hope that the Government will consider postponing the implementation of the reforms until the system is working correctly. As we draw closer to the target date currently set, I trust that the Minister will provide the House with information on how successful plans that have been laid for some months now have proved in implementing the new measures.
4.39 p.m.
Lord Haskel: My Lords, I have little expertise in this area, so your Lordships will be pleased to hear that I do not have a lot to say. I particularly wanted to speak in this Second Reading debate because the Bill has something that is rarely seen in legislation that comes before your Lordships. The Bill has vision. It seeks to continue the work of creating a fairer society by helping people to climb out of poverty and get into work. And few would argue with that vision. It even has the support of the noble Lord, Lord Saatchi.
152
When this Bill was debated in another place, MPs lacked the numbers and tapers without which the Bill was perhaps somewhat academic, but the principles were absolutely clear. Now that we have the numbers after last week's Budget, we can see that guaranteed minimum incomes really will enable people and families to do what the Bill will encourage them to do. I am most grateful to my noble friend the Minister for giving us the numbers in such great detail. Perhaps they were a little indigestible, but none the less they will make interesting reading.
As my noble friend Lady Hollis explained, the whole purpose of tax credits is to eliminate the old poverty and employment trap, where it did not pay people on benefits to move into low-paid work. We have already seen that tax credits do this. My noble friend reminded us that, in a way, this Bill is a development and refinement of what is already in place, but with one important new element. The child tax credit and the working tax credit are entirely separate.
The child tax credit supports families with children, whether the parents are in or out of work. The working tax credit supports low-paid families, whether or not they have children. Like my noble friend Lady Andrews, I think that this is yet another move towards greater freedom and less dependence rather than more dependence, as suggested by the noble Lord, Lord Saatchi.
The children's tax credit and the working tax credit top up the incomes of families and the working poor. In effect, the bottom 40 per cent are gainers while, to a varying degree, the top 60 per cent are losers. Yes, this is an element of redistribution, but it should not be taken in isolation from the education and skills training schemes designed to make the working poor into the working better off, and to help employers fill those skilled vacancies, which seem to be blocking our economic growth.
It is conceivable that the working tax credit on its own would simply subsidise low pay and gain nothing for the economy but, taken together with the minimum wage, this legislation will provide a pathway to work and a whole culture of moving into higher skills and higher pay. Furthermore, it does so in a dignified and unpatronising way.
I make that point because some noble Lords, including the noble Baroness, Lady Noakes, have complained that the working tax credit is an additional burden on employers. Most businessmen are not whingers; they look at these things as a whole. Certainly the burden is minimised by allowances made to small companies for clerical work and annual assessments to reduce the numbers of changes. But businessmen know, too, that they can benefit. Recent surveys have shown that the biggest barrier to growth is no longer the strength of the pound, but the skills shortage. By participating in this whole group of schemes, businesses have the opportunity of attracting new employees who perhaps are not working, and turning them into valuable and skilled members of staff, with all the costs of doing that heavily subsidised by the Government. Surely that is worth a bit of extra administration.

153
This initiative may well have come at the right time. I think that many businessmen do care. Businesses realise that they need to go further than simply showing social responsibility. Corporate philanthropy is not enough. Now, most companies think that there should be some social purpose to what they do. What more important social purpose could they fulfil than by turning the unskilled poor into the skilled better off? So all businessmen do not just complain about costs; they take a much broader and far more entrepreneurial view. I wish that noble Lords would give them the benefit of that doubt.
The working tax credit will also include an element for the costs of childcare, either in or out of the home. This, too, will help businesses, as it will help low-paid parents who have to work irregular or unsocial hours and so cannot use nurseries or childminders. The credit will be paid directly to the main carer to make it more likely that the money will be spent on the children, which I think is very good.
However, there is one matter in the legislation which does appear to me to be regressive. The noble and learned Lord, Lord Howe, referred to this point. To receive the working tax credit or the child credit, a claim form has to be completed. The income used to calculate the entitlement is the total family income, not the income of an individual. Of course the noble and learned Lord, Lord Howe, pointed out that joint taxation is not new. Only 10 years ago, tax was based on the joint income of all married couples unless one specifically opted out. However, the tax system has been moving steadily in the direction of independent taxation for spouses. Family tax credits seem to reverse that trend and I am not sure that that is something which will be helpful to family relationships. In the modern world, some spouses want to keep their tax affairs separate and private. A way should he found to facilitate that.
In spite of that small point, I welcome the Bill. I welcome it because it is unashamedly progressive and an important part of the overall scheme to move yet more families and children out of poverty. However, it is also a step further along the process of remoulding society into one where fairness and enterprise sit together.
4.47 p.m.
Lord Northbrook: My Lords, one of the Chancellor's major ideas since 1997 has been the integration of tax and benefits. The result of that philosophy has been a whirlwind of activity which has enormously complicated the system of welfare benefits. Noble Lords should cast their minds back to 1997 when, in the area we are discussing, we had the simple concepts of the married couple's allowance, family credit and the disability working allowance. Since then, it has been "all change".
At this point in my remarks I was going to run through all the changes to the regime that have taken place since 1997, but as my noble friend Lord Saatchi has done that already, I shall not bore the House. Instead, like other speakers, I should like to emphasise
154
the complexity of the Government's welfare payments changes since 1997. Since October 1999, the Government have introduced five new tax credits for families, scrapped four of them, and then introduced two further new ones for April 2003. As stated by my noble friend Lord Saatchi, that represents a new tax credit for families every six months.
I should also like to ask the Minister how many more members of staff will be required by the Inland Revenue to administer the new credits. I ask that question in the light of the comment made by my noble friend Lord Freeman to the effect that 6 million new families will be eligible to claim them. I should also like to emphasise the burden to be put on business, as has been done by my noble friend Lady Noakes, in administering the new tax credits.
Like my noble and learned friend Lord Howe of Aberavon, I should like to ask the Minister whether it would not be better to raise tax thresholds than to increase the benefits population. I agree with my noble friend Lady Noakes that to conduct taxation by way of regulation is a bad trend.
I want to concentrate on three areas of the Bill. First, the basis of claim; secondly, concerns about fraud and, thirdly, the treatment in government accounts. First, looking at the basis of claim, as other speakers have noted, the record of WTFC is not encouraging as a pointer to the future. According to the Chartered Institute of Taxation, only one in 10 tax inspectors could fill in the relevant application form successfully. The introduction of the new tax credits will serve only to highlight the already existing complexity. The Institute of Fiscal Studies has the following to say about the new system:
"Claimants should find the new system very different from existing means-tested benefits, with the Government hoping that an annual system will be easier to understand and administer, and less obtrusive for claimants. But the conflicting aim of targeting the credits effectively has forced the Government to compromise on simplicity and predictability for families whose composition or income changes significantly during a year".
Many families will surely find themselves in this position, particularly when they have by good fortune a sudden increase in salary or a good bonus because of a company's good results for the year. The need for claimants to monitor their annual income, average hours of work and, if appropriate, childcare costs means that the Government's desire to provide a flexible and well-targeted system may be increasing the risk of non-compliance.
During its investigation of the new child tax credit the Social Security Committee stated:
"There is still a considerable way to go to create a tax credit and benefit system which is easy to understand and to use from the recipient's perspective".
As many speakers have said, tax experts have warned that many families will fail to claim the new tax credits because they are too complex. David Gibbs, a tax partner at Grant Thornton, said they are extremely difficult to work out. For the average person it will be next to impossible to understand how they work and whether they are due anything and then fill in what promises to be a complex form.

155
Under the working families' tax credit only 1.3 million out of 1.5 million have claimed it in the two years since it came into being. With the child tax credit and working tax credit, the complexity of the means test will mean that fewer people will take it up. The new credits will mean that the proportion of families in receipt of means-tested benefits will grow, as has been stated by other speakers, from 24 per cent in 1998–99 to 38 per cent in 2003–04. The Prime Minister himself has highlighted the problems of means testing. In 1998 he said on "Breakfast with Frost":
"There are problems if you move to too much means testing as you can see with pensioners who do not take up income support".
Moving on to concerns about fraud, when the working families' tax credit and the disabled person's tax credit were introduced, questions were asked about the scope that they presented for fraudulent claims. The Social Security Select Committee stated in 1999 concern that the potential for fraud in the tax credit system could increase if priority was placed on prompt payment rather than on rigorous checking of eligibility. Frank Field also highlighted the scope for fraud in 1998.
Other tax credit schemes abroad have had the problem of fraud. The working income supplement in Canada saw such problems of fraud that the department is now moving back to a benefits-based system. The US-based earned income tax credit—the EITC system—also saw extensive, fraudulent over-claiming.
The Government have determined that the tax credits are administered through the payroll and therefore they are not subject to the Social Security Fraud Act 2001, which aims to reduce the costs of welfare fraud. A letter from Dawn Primarolo, placed in the House of Commons Library in April 2001, stated that there had been approximately 29,000 WFTC and DPTC investigations. In the region of 300 penalties were imposed. I ask the Minister how that compares with the family credit regime and how much has been recovered by way of over-payment and penalties.
One problem of the current system which has been highlighted is where people have booked places with existing childcare providers. Once they have received sufficient proof of the cost of the childcare, they cut all contact with the childcare provider and pocket the WFTC cash for the next six months. That example is quoted by David Willets and Nicholas Hillman in their booklet Tax Credits-Do They Add Up? It seems strange that the money cannot be paid direct to the childcare provider.
Furthermore, under the new system there will be the further weakness that claimants will not have to provide the Inland Revenue with written confirmation of the childcare costs as they currently have to do, as I understand it, and neither will they have to provide documentary proof of their childcare costs or earnings in contrast to the current WFTC system.
The complexity of the new regime will make it easier for fraud to enter it. Claimants will need to provide detailed information on changes to their annual
156
income, on their average hours of work and on their childcare costs, which could increase the scope for fraud.
Finally, I wish to move on to discuss the treatment of the tax credits in the government accounts. As mentioned by other speakers, in the past family credit was counted as part of social security spending, but now the Treasury counts its current replacement, the WFTC, as a £6 billion tax cut. If all benefits were replaced with tax credits in that way, all benefit expenditure would miraculously disappear from the government accounts. I ask the Minister whether there is a possibility that the new benefits could be categorised as government spending by an amendment to the Bill which would make their overall costs much clearer?
In summary, I have a mixed view of the Bill. I welcome the fact that there are no capital limits, that the tax credit is extended to support about 100,000 families who are currently excluded, including students and student nurses, and that it will support families with young children who are in full-time education up to the age of 19. I am pleased also to note that the child credit will end the unfair treatment of single-earner families.
However, my approval is balanced by criticism, first, of the expansion of means testing, which encourages further dependency and, secondly, of the potential of fraud due to the complexity of the new benefits. My final criticism is of the treatment in the government accounts of the benefit as a tax cut rather than a benefit. I am sure that we shall return to these issues at Committee stage.
4.56 p.m.
Baroness Byford: My Lords, I join with other noble Lords and thank the Minister for setting out the principles of this Bill drawing together the tax and benefits system. If I understand correctly, the main purpose of this Bill is to make up the income of anyone entitled to a payment under it to a higher level than would otherwise be the case. Until the Budget I had thought that that entitlement would accrue mainly to the financially disadvantaged in our society. Indeed, I follow other noble Lords who have reflected that only in fact 10 per cent of families will not qualify for some form of tax credit, which should be of concern to us all.
Those who will receive payment through the good offices of an employer will presumably receive the credit in the same fashion as their pay; in other words, if through bank automated clearing services, then through that system; if by cheque, then by cheque; and if in cash, then in cash. The Bill does not actually specify that and I am surprised that it does not.
I am also surprised that there does not appear to be any form of compensation for the extra work and the bureaucratic hassle that employers will doubtless have to endure in the running of this negative tax collection system for the Government. Will the Minister assure us that employer responsibility will not include any involvement in sorting out problems between employees and the Inland Revenue?

157
How will the credit be paid to those who do not have handy employers to bear the onus? It will be due to the self-employed, those who have more than one employment and those who have a series of part-time jobs who come in when needed, and those who are temporarily out of work. Will the Minister explain the mechanisms envisaged to ensure that this time the credits are claimed and paid?
Will she also comment on the progress in respect of the doubts expressed by the social security committee in its second report, when it queried whether the IT and the administrative systems would be ready for 2003? Is Alistair Darling's recent announcement of the delay in paying the child tax credit related to these doubts and an acknowledgement that the committee was in fact right and it will not be ready?
Baroness Hollis of Heigham: My Lords, does the noble Baroness mean not so much the child tax credit as child support reform?
Baroness Byford: My Lords, I believe that I do. I apologise. Perhaps I may clarify that later when I have had a chance to look at the papers to which the report refers.
Can the Minister explain the meaning of Clause 23(8) on page 16, which seems to indicate that if anyone claiming a tax credit cannot have a bank account, he or she will lose the credit. It states:
"If the regulations make provision for payments of a tax credit, or any element of a tax credit, to be made by the Board by way of a credit to a bank account or other account notified to the Board, the regulations may provide that entitlement to the tax credit or element is dependent on an account having been notified to the Board in accordance with the regulations".
Can the Minister also clarify the consequences of subparagraphs 9(1), (2) and (3) of Schedule 5, which would seem to allow personal information relating to anyone entitled to tax credit, child benefit or guardian's allowance to be passed quite freely between certain government departments and agencies? Can she explain why that provision has been included in the Bill and, in particular, why it refers to a guardian, who frequently may have no blood relationship to the person for whom the credit is paid?
As the Minister knows, the business of payment has exercised my imagination for many years. I have spoken in debates and raised questions in the House on this issue, and I intend to raise it again. How will some recipients receive their payments? In a nutshell, the Government have decided to save themselves something in the region of £400 million a year by ceasing to pay sub-post offices for the continued payment of pensions and child benefits in cash or by giro cheques to those who urgently need it to be paid in that way. As a result, more than 3,000 sub-post offices have closed and it is rumoured that another 3,000 are due to go.
A sub-post office is a franchise, and the franchisee pays for the privilege of holding that franchise. When the business is rendered non-viable, he or she receives no compensation, no redundancy, and the business cannot be sold because there is nothing of value left to
158
offer. The sub-postmaster goes to the wall and his customers have to travel further to receive their state entitlements. In less than two years from now, they will be unable to draw their benefits except through a bank account.
It sounds simple—"Get yourself a bank account so that we can pay your benefits into it and save the state some money"—and yet the National Association of Citizens' Advice Bureaux still reports monthly that many of its clients are refused bank accounts or are having insurmountable obstacles to opening them placed in their way.
I have asked before and I ask again today, how will entitlement benefits pass from the Treasury to the pockets of the poor? How will that happen? Can we produce a simple diagram or flow chart which shows the process from the collection of tax to the disbursement of benefit for every class and subdivision of our population?
The poorest of our population are under the greatest threat. Even now, many of them pay out a great proportion of their benefits and entitlements in order to get to their sub-post offices to collect the amounts due to them. In this country, if you pay your bills on time, save up for what you want until you have enough money to pay for it and eschew the finance houses, you will find yourself refused credit should you ever need it. Similarly, a credit reference is an essential part of the clearance process for a bank account. Under all the systems of which I have so far heard, no credit history is almost as bad as a lousy record. Those who are reasonably expert in this field calculate that up to 2 million people will not qualify for a bank account. In her response today, will the Minister make a definite statement about the method of payment of these benefits?
What restrictions will be placed on the passporting of other benefits? In the past, for example, entitlement to family credit automatically opened the door to benefits related to NHS costs and to help with certain travel costs—for instance, for visiting relations in prison. Will the Minister confirm that restrictions are intended? Will she spell out what those restrictions may be?
Can the Minister also explain how and why a net family income of £11,250 has been chosen? It seems a little low in the light of the Chancellor's generosity over the child tax credit limits.
In conjunction with the Budget Statement, the Bi11 seems to open state aid to many families earning rather large joint incomes. At the same time it does not appear to grant proportionately more benefit to the less well off and those lower down the income scale, a matter to which other Lords have referred.
I am, as always, concerned for those for whom accessibility is a problem. As I have mentioned, it can be a problem because of distance; because of a lack of transport or the cost of transport; because of the complexity of the changes for those less well equipped to understand and insist on their true entitlement; and, to a certain extent, because of the lack of detail and clarity on the face of the Bill.

159
Many noble Lords have referred to the low take-up of the working families' tax credit—62 per cent only. I, too, wish to pick up the point raised by the noble and learned Lord, Lord Howe of Aberavon, on the question of independent taxation for women and moving towards a joint payment to the family. If they prefer it, will a family be able to have the child benefit paid directly to the carer through a separate account rather than having it paid into a joint account over which the other partner may have greater control? We have fought for many years to ensure, particularly with child benefit payments as they were, that benefits go to the carer in an unthreatened way. My concern is that making payments in the way envisaged by the Government could jeopardise that freedom, which has been gained at some cost.
Will the Minister comment on what the Government consider will be the cost of introducing this new legislation? In 1992–93, the Government spent some £4.2 million to promote the take-up of benefits; by 2001–02, that had risen to –26.5 million. That is a huge increase in spending on advertising to encourage take-up, and yet we know that take-up is low, with many families not taking up their entitlement. As to unclaimed benefit, some –2.55 million was spent in 1998–99, which had risen to more than £3 million by 1999–2000.
I welcome parts of the Bill but I am concerned about the costs. The Minister will know—I have raised the issue with her many times before—that I am extremely concerned that those on lower incomes should not be put in double jeopardy by having to spend a high proportion of their benefits on getting to a post office to claim them.
5.9 p.m.
Earl Russell: My Lords, in some ways the Bill is a little like a hedgehog. One very hot summer night I woke up and came downstairs without any slippers—and rashly trod on one. Underneath the rebarbative exterior, I found a very small, very soft, very pink and very innocent object concealed in a welter of ladders and half-empty paint pots and all the other objects one has around the fringe of a house. The Bill is not nearly as bad as it looks.
People say that the Bill is difficult. Yes, it is—but that is mainly because the concepts, the terminology and the way of thinking are in many ways unfamiliar to us. For those of us who have experience of the United States' tax system, it is considerably more familiar. The basic distinction between a tax credit and a tax allowance is that for a tax allowance you get back the 40 per cent or whatever the percentage is; for a tax credit you get back the whole thing.
One of the skills one learns in opposition is that of seeing all hell in a grain of sand. I do not think that the Minister would entirely acquit me of having any of that skill. However, since I have been working on the Bill, between last Saturday night and now, I have been able to see rather fewer grains of hell than I could previously. That is an unusual experience when
160
dealing with a Bill. In that context, I congratulate the noble Baroness, Lady Andrews, on the determination with which she stuck to evidence in the face of a House whose general mood was at the time rather hostile.
The other speech of the day has been that of the noble and learned Lord, Lord Howe of Aberavon—which might well have been subtitled,
"Look on my works, ye Mighty, and despair!".
The noble and learned Lord made a perfectly rational case for that view. But if we had all despaired every time it was rational for us to do so, none of us would be here now.
I am talking of circularity. I cannot help remembering the noble and learned Lord's first Budget, when he offered us income tax cuts in order to pay our VAT bills. That was a circular transaction. What we have here is not a pure circle; it is a spiral. It is the transfer of money from the childless to the childed. That is an approach in which one can see a purpose. The whole of the funding of the education system is that. A House which has in the past been wholly hereditary cannot with great ease condemn that principle totally. So the fact that there is an element of circularity is not fatal.
The noble and learned Lord complained, perhaps with more justice, about a tax on jobs. But you cannot have, at one and the same time, a total ban on a tax on jobs and a total ban on any increase in tax on income. We on these Benches believe that income is the fairer and more sensible place to put the tax. But you must be able sometimes, as a point of principle, to increase revenue. If you are to be banned from doing it in one place, you must be free to do it in the other.
In the course of tackling some very real problems, we run into some of the thorniest problems in the social security system. We did not create them; nor did our predecessors. Many are in the nature of the case. If we do not get it right first time, I do not find that particularly surprising. The noble Lord, Lord Saatchi, criticised the Government heavily for changing their mind and changing their policy—as indeed they have done on some points with some rapidity. But we cannot have this both ways. Either we criticise them for refusing to learn from experience, or we criticise them for changing their mind. What do we want? Both are mistakes; but I would rather they made the mistake of changing their mind rapidly than of not learning from experience. If there is any criticism to which the Bill is liable in that area, it is the second.
The general idea, as the Minister put it, is to make work pay. I have noticed that most of the fiercest critics of the Bill—notably the noble Lord, Lord Saatchi, and the noble Baroness, Lady Noakes—were not Members of this House during the Parliament of 1992–97. The Minister will remember the debates we had in that Parliament on poverty traps and the constant refrain of the people who were worse off because they were working. I should like to think that during those debates we were of some assistance to each other.

161
It is that thinking that has helped to produce the Bill. That is why there is such long tapers. The Minister always used to warn me that we could not make this approach work unless we made the tapers long enough to make it very expensive. She was right, but it is on the whole better that people should be better off by working than by not working.
I remember an interesting conversation with my noble friend Lady Williams of Crosby in the spring of 1997, shortly before this Government came to office for the first time. She said that they had become very interested in the principle of the tax credit—about which, from her American and Harvard experience, she knew a good deal. She said that it was a good principle, and that I should view it with a cautious sympathy. She said that it would be necessary to ensure that. in their enthusiasm for the principle, the Government did not neglect the interest of those who were unable to obtain work.
In the Bill—the first of the tax credit Bills of which I have been able to say this—that point has been taken, and I am very glad to see it. The Chancellor has brought together two basic principles. One is all the various forms of support for children which people receive whether or not they are in work; the other is the support for low-paid work—which encourages work. So he answers the point made by Roy Hattersley on "Any Questions?" two weeks ago; namely, that the Government had done a great deal for the poor in work but practically nothing for the poor out of work. I should not like to think that this is the Government's last word on the subject. I very much hope that it is not. However, it is a word that I am extremely glad to hear.
The problem of poverty traps is not the whole story of the benefits system. I should not wish the Government to become obsessive about it. However, I shall not dwell on the other matters that I should like them to be thinking about. The Minister knows perfectly well what they are.
I am glad, like my honourable friend Mr Webb, about the decision to pay the benefit to the main carer rather than through the payroll packet. The decision to pay such benefits through the payroll packet was in order to teach people the importance of work. I do not believe t hat that needed doing. The importance of work, if you have been out of it for a long time, is social as well as financial. It is a lonely job being stuck at home all day, especially if your only company is that of children too young for conversation. Such a decision was unnecessary. Also, it was proving a considerable difficulty between employer and employee.
The National Association of Citizens Advice Bureaux reports several recent cases of employees being dismissed because they were claiming the working families' tax credit. That really will not do. The association has produced a proposal for a fair employment commission which seems very reasonable.
We hear a good deal about burdens on business. There are burdens on everyone who has responsibility—some welcome, some unwelcome.
162
They should in all cases he kept down when possible. But one cannot live in society without carrying burdens. Employers have to accept that as much or as little as the rest of us.
It does not seem that the system of payment through the payroll has been ideal. It has been suggested that we deal with the matter by leaving out Clause 21(4). That is one possible way of amending the Bill, but there will be others.
I was also interested in what the noble and learned Lord, Lord Howe of Abe rayon, said about thresholds. Exactly the same point was made in another place by my honourable friend Mr Webb. The answer to the problem of how to work it out without an excessive burden is by increasing the tax burden on those at the top of the scale. We would do it by an extra tax on those earning more than £100,000 a year, who I hope will not plead poverty. It can be achieved so that the effect on people in the middle of the scale is pretty well tax neutral. If the complications of the scheme prove greater than we fear, the Minister might want to think again about the suggestions of my honourable friend Mr Webb. They were kindly met and are worth considering.
When she abandons the principle of payment through the payroll or creates an alternative, the Minister will find that there is some problem about who the main carer is. I recall one large happy family featuring two couples who had swapped spouses. They spent the summer together in a large country house, all looking after each other as they ran into each other. The primary carer was the person who happened to be nearest when the boy fell over and cut his knee. The Minister would have some trouble working out who the primary carer was in that situation. I am not asking her for an answer now. We shall have to consider the issue in Committee. However, I should like at least an assurance that she is thinking about it and that she knows that it is a difficulty. There is not always one single person with primary care for the children. The way family law is moving now, we do not feel it right that there should be. After a divorce or separation there should, when possible—which is not always—be a continuing responsibility resting on both parents.
A great deal of the rest of the comment on the Bill comes under the heading that I have put clown confusingly in my notes as "thorns and roses"—opposite in their effect, but closely associated in their appearance and therefore confusing to decide how to handle. Change of circumstance is one issue under that heading. There is no right way of handling it. admire the way in which the Government have tried to tackle it. I do not know how it will work out. I ask the Minister only to continue to keep the issue under review and to keep in touch with my honourable friend Mr Webb, who has done a great deal of constructive thinking about it.
I also ask the Minister to bear in mind the problems raised by my honourable friend about the burden of keeping records. I recently found myself in the process of doing my annual tax return, but discovering where among the litter of parliamentary Bills and White

163
Papers all my various old cheque stubs are is not quite as easy as I would wish. If I had a large number of young children present as well, it could be well nigh insuperable, but that would not be evidence of any fraud on my part. We should think about the burden of record keeping that we are putting on people.
I agree with the noble Baroness, Lady Andrews, about passporting. We also need to think about passporting for medical equipment. My mother in law, who is 92 and has angina, relies on a nebuliser. She is not on benefit, but if she were she would find it very difficult to afford, because it is an expensive piece of equipment.
I am tempted to imagine that I see the hand of the Minister in the provisions for the disregard of maintenance as income. If so, I ask her to accept my hypothetical congratulations.
I share the concerns of the noble Baroness, Lady Byford, about the commencement date, mainly because I am not at all certain that the universal bank will be up and running in April 2003. I agree with the noble Baroness about the closure of sub-post offices, which is becoming a disaster. If the system were running with neither sub-post offices nor the universal bank, we could have a very nasty situation. If I were a Minister, I would have a contingency plan. I dare say the Minister does. I am not sure that she is going to share it with us, but I should be awfully glad to know that she has one. The more you have contingency plans, the less you need them—they are like umbrellas.
We may also have to think through leaving out Clause 24(2) about a small business exemption. This comes back to the problem of the payroll and burdens on business. I hope the Minister will also consider leaving out Clause 38. After all, that would only be following the example of JSA, which can hardly be regarded as quite such a wild and radical example. That is one case in which the point made by the noble Lord, Lord Saatchi, about the regulation-making power is clear. Entitlement can be changed at a stroke of the Le Pen, if noble Lords will forgive the phrase.
There are two sections of tax credit. The credit for children is justified by need and the credit for work is justified because earned. Leaving either of those out would be a potential injustice. I hope the Government will not lead their successors into that sort of temptation.
I also hope that people will think about the point that has been made by several noble Lords about housing benefit taper. There is also a problem with requiring different information to be notified for tax credit and for housing benefit. The complication of preparing two sorts of record for the two sorts of submission makes one worry. However, I have no answers to the problem. If the Minister, any other noble Lord or any outside body does, I shall listen with great interest.
I hope that the Social Security Advisory Committee will apply, as it has done to other matters that have been transferred to the Treasury.
164
The noble Lord, Lord Rix, is right. I hope that the Minister will listen to him. I do not know whether she can do it in this Bill or whether we shall have to do it in another. One keeps hoping for finality, but in this life it does not happen, alas.
I welcome the Bill. There is a great deal of work to do on it. The problems will not be over when we have done it, but we are attempting something that is well worth attempting.
5.28 p.m.
Lord Higgins: My Lords, this has been a fine debate. However long one has been involved in these matters, one cannot wind it up without feeling that some diffidence is appropriate. When I first saw the title of the Bill, I had a strong sense of déjà vu. As long ago as 1972, the then Chancellor of the Exchequer, Mr Anthony Barber, as he then was, put forward proposals for a tax credit scheme. They were followed by a Green Paper on the subject later that year, which was devised by the noble Lord, Lord Cockfield, as he now is, who was with us earlier this afternoon. It was then examined by a Select Committee whose most prominent members were the noble Lords, Lord Barnett and Lord Sheldon, and the noble Baroness, Lady Castle, as they now are.
Alas, despite that Select Committee report, the incoming Labour government dropped the whole idea. Now, many years later, we find ourselves again with a Tax Credits Bill, although one must stress, as my noble friend Lord Freeman did, that whereas the previous scheme was a genuine negative income tax or tax credit scheme, the proposals in this Bill are not. It does, however, reflect the Chancellor's obsession with the idea of tax credits. It has also been combined with his vacillation.
I shall not repeat the long list of changes we will have experienced over the four years. My noble friend Lord Saatchi has spelled them out, and my honourable friend Mr Willetts—in a fine pamphlet dealing with this matter—has listed them. Indeed, the changes are to be found in Clause 1. Nevertheless, to introduce five new tax credits, abolish four of them and introduce another two does not exactly show the firm hand of government. That brings me to two other points.
First, the vacillation has been an extraordinary waste of legislative time. Although not all the proposals have been dealt with in legislation, much of what the Minister and I have debated in recent years has now been overtaken by this scheme. It is not—as the noble Earl, Lord Russell, has suggested—a matter of the Chancellor learning from experience and then changing his mind. The proposals have not been given a sufficiently long run to enable one to learn from experience.
The second effect of the Chancellor's changes of mind is an increase in the burden on small businesses, which find that the problems they have to deal with are constantly changing. The Bill will place a very considerable burden on business because of the proposal that these tax credits—I prefer to call them benefits-should be paid through the payroll. As my

165
noble friend Lady Byford pointed out, there are real difficulties in that, particularly in relation to opening bank accounts and the problems with credit rating agencies which I myself raised with the Minister just a short time ago. There is a very considerable burden on business.
There is also some obscurity about the administrative cost of the proposals to the Government. Page 39 of the Explanatory Notes states that,
"The annual administration costs in relation to tax credits cannot be determined until the rates of the new tax credits are set".
They have now been set. Can the Minister please tell us what those administrative costs are expected to be?
The Bill is one of great complexity. My noble friend Lord Saatchi has advocated that we should deal much more in this House with financial matters. My own feeling is that this Bill is actually a Money Bill in the strict sense of the term. Regardless, it is fortunate that we are dealing with it. Because of the way in which the Government have handled the matter in another place, whole chunks of the Bill have received no consideration there at all. Perhaps the Minister will confirm that the whole of Part 2 did not receive any scrutiny in another place because of the way in which the Bill itself was—I use the euphemistic term employed by the Government—"programmed". We shall have a considerable task in scrutinising the Bill, but we shall have to examine it very carefully.
As a number of noble Lords—particularly my noble friend Lady Noakes—have pointed out, the Bill itself is bedevilled with regulations. A great deal of what is to happen will appear in regulations. The Select Committee on Delegated Powers and Regulatory Reform seemed to have been somewhat placated by the fact that the regulations in the first instance will be subject to affirmative resolution, although the subsequent ones will not. However, I feel bound to say that I do not think that that is the same as having them in advance. .I very much hope that, as the noble Lord, Lord Freeman, said, we will have them in advance of the Committee stage, when we can debate and if possible seek to amend them. Simply having a yes-no vote, even on an affirmative resolution, does not enable the House to ensure that the initial set-up is appropriate.
As I said, the Bill is greatly complex. Inevitably, that will result in a number of consequences. As many noble Lords have pointed out, the first consequence is the problem of low take-up—which is a very serious problem indeed. Reference has been made to what is happening in relation to the working families tax credit. Perhaps the Minister can confirm whether the quoted figure of, I think, 62 per cent is correct. There is also a very real problem in estimating the proposals' overall operation cost, which I understand is estimated at about £2.7 billion. As that estimate must have been based on assumptions about take-up, will the Minister tell us what assumptions have been made about take-up of the Bill's two major benefits?
The other problem is fraud, a matter to which another place did give considerable attention. As my noble friend Lord Northbrook pointed out, of about
166
29,000 investigations, there have been only about 300 prosecutions. It is a real problem because the complexity and the payment-payroll link will allow considerable scope for fraud. Consequently, however, the Bill provides for the imposition of pretty severe penalties.
I am sure that the noble Baroness, Lady Andrews, will be aware that there is concern in the Child Poverty Action Group and elsewhere at the increase in penalties accompanying the change from a work and pensions regime to a tax regime in which the penalties are clearly much more severe. As the Child Poverty Action Group rightly points out, although we must all be against fraud, one must take account of the fact that there is a distinction between a tax imposition which is determined as against a benefit which is to be claimed. They are not the same, and I am glad to see that the noble Baroness agrees with us on that. We shall have to pursue the issue in Committee.
One point which has come out very clearly in the debate is the great extent to which Government intervention in individuals' affairs has been increased. Until now, we have had a social security system that works on a set basis and a tax system that operates at the higher income levels. However, there is a pretty large group in between who do not fill in self-assessment forms and are not involved with the benefits system. The size of that group will now be very significantly reduced. Perhaps the Minister can give us some idea of how many extra people will—I hesitate to use such a pejorative phrase—fall into the clutches of the Inland Revenue? There will be very considerable government intervention in individuals' lives, requiring individuals to respond in a very complex situation.
There is no doubt at all that the Bill provides for a substantial increase in means-testing. The Minister invariably objects to my using the term means-testing and prefers use of the word targeting. The reality, however, is that people will be "targeted", to use her word, up to an income of £58,000 annually. That is some targeting. It is also a very real problem.
As this scheme is designed to accompany improvements in health expenditure and so on over 20 years or more, I should perhaps take a slightly longer view. At some stage—given the overall crisis in pensions and so many people on means-tested benefits, and if we are to continue with the type of tax imposition announced in the most recent Budget—we shall have to ask who is going to pay for all this. As a longer term view, that is an interesting proposition. My noble and learned friend Lord Howe of Aberavon asked who would pay for the measure. That is a matter which we shall need to consider carefully.
If one looks at it in broad terms, I suppose one can say of the Budget that the whole of the health expenditure will probably be funded by the increase in taxation on companies and the rest of the increase in taxation—a high percentage of it—will pay for the costs incurred by the Bill's provisions. In some ways one may say that is a good thing when one has regard to the effect of those provisions on child poverty. The

167
noble Baroness, Lady Andrews, referred to that matter, as did the noble Lord, Lord Rix. I hope that the Minister will comment on the 16-hour rule and related matters.
On many occasions recently we have debated the whole question of child poverty. The noble Baroness, Lady Andrews, was hopeful that the Government's measures in the Bill would have an effect on child poverty. Clearly they will have some effect. However, if one considers the Government's record on that matter, that is a different issue. At the previous election the Labour Party's manifesto stated,
"Over one million children have been taken out of poverty".
We debated that matter on many occasions. It is not the case, partly because the estimate was reached by various outsiders on an academic basis but also because it was based on the number of people who might have fallen into poverty if the Government had not done anything. Indeed, the latest information from various outside bodies shows that the figure was probably less than half that which the Government stated in their manifesto had already been achieved. Therefore, the Government's record as regards cutting child poverty is open to considerable doubt. However, we shall have to see how the measure works out in practice despite the substantial costs involved and the imposition on taxation, in particular national insurance contributions.
I hope that the Minister can clarify one further point. I refer to a matter of constant contention between the two sides of another place and this Chamber; namely, as regards treating these matters as increases in public expenditure, not as reductions in taxation. It is therefore interesting to note a change in the Government's attitude on page 216 of what once upon a time used to be called the Red Book. The relevant wording is an incredible example of weasel words. The document states:
"The Government has consistently argued that tax credits paid through the pay packet should be classified as negative taxation".
However, what they actually do is to go part of the way towards the argument which we on this side of the House have put forward and closer to the OECD definition of what constitutes public expenditure and what constitutes a tax reduction. The Government now propose to count as public expenditure a benefit which is paid out, a tax credit, which is not deducted from tax because the individual concerned does not pay tax, whereas if it is a deduction from an individual's tax, they will count that as a tax deduction. What percentage of the total involved in this operation does the Minister believe will constitute a genuine tax credit in the sense that it is deducted from tax as opposed to being simply a benefit which is paid out?
In many ways the Bill has admirable objectives. It is always difficult to oppose a measure whereby people receive taxpayers' money. One is looking at one side of the equation in the Bill and not at the other. My noble and learned friend Lord Howe of Aberavon was right to ask where the money is to come from. I am a little
168
confused to the extent that the money coming in looks as though it will all go into the National Insurance Fund, which is devoted either to the health service or to pensions. I am not at all clear how it is suddenly switched into the credits. However, I noticed with interest that a few days ago the Leader of the House in another place said that there was to be a national insurance Bill which, apparently, is related to the Bill we are discussing. Perhaps the noble Baroness will tell us what is likely to be in that national insurance Bill and whether it is related to the Bill we are discussing.
In his opening remarks my noble friend Lord Saatchi set out clearly our objections to the Bill. They are fundamental but we must at least hope that the Government are now creating a framework which will remain stable for a reasonable length of time. There is, none the less, much scope for improving the Bill which is before us. We shall do our very best in the course of the Grand Committee—I must say that it is rather strange to deal with such a major Bill in Grand Committee—to ensure that it fulfils its admirable objectives as far as possible but also to ensure that many of the disadvantages which have been pointed out in the course of the debate are taken into account and that the Bill is suitably amended.
5.46 p.m.
Baroness Hollis of Heigham: My Lords, I am delighted that we have had such an interesting and in some senses unusual debate. I particularly welcome—I am sure that the noble Lord, Lord Higgins, and the noble Earl, Lord Russell, will agree—hearing the voices of the noble and learned Lord, Lord Howe of Aberavon, and others who do not usually contribute to more conventional social security debates. It is refreshing to hear different perspectives.
In winding up the debate, I state the usual proviso that so many questions were asked that I simply cannot answer them all in the time available without sending your Lordships to sleep even earlier than would otherwise be the case. I shall write to those noble Lords whose questions I cannot answer tonight. Apart from making some general comments that I cannot resist, I should like, first, to pick up the points about Treasury issues, tax, social security, integration and national insurance, then, secondly, to go on to questions about the particular form of tax credit we are discussing, particularly as regards means-testing and take-up, which your Lordships pursued. I want to address the implications for disabled people. I then want to look at issues of accessibility in terms of the online payment methods that the noble Baroness, Lady Byford, has gallantly fought to ensure are available. I then want to discuss a favourite topic of your Lordships' House—I refer to burdens on employers—before picking up the point about fraud which one could perhaps have anticipated and some structural points before making some final comments. I hope that your Lordships will accept that I shall try as best I can to pick up as much as I can within that general framework.

169
I am particularly glad that the noble Earl, Lord Russell, welcomed so much of the Bill. I am delighted that the more work he did on it, the more supportive he became. That is not always the history of social security legislation. Therefore, I am particularly grateful for his warm remarks.
I refer now to the speech of the noble Lord, Lord Saatchi. I was intrigued by the amount of time he devoted to Kant. He made the point that Kant argued that moral adulthood meant no means testing, as far as I recall from my reading of Kant. But, of course, Kant wrote before the introduction of income tax which was introduced in the Napoleonic Wars by a Tory as I recall and, when scrapped by the Whigs—Liberals—was reintroduced by another Tory, Robert Peel. I wonder, therefore, whether the noble Lord will be quite as keen to quote Kant in the light of the experience and history of income tax which I am sure Kant would also have deplored.
I turn to the comments made by the noble and learned Lord, Lord Howe. I believe that he identified some of the same issues in his maiden speech back in November 1964 when he tested the possibility of whether a negative income tax might allow for the problem of selectivity without stigma, as I believe it would be termed today. I believe that in 1964 he called on all Members of the House not to condemn proposals simply because they involved a test of means. He argued that we should respond to differing needs as well as to differing means and that, as a result, the package should ultimately have a real flavour of humanity. I am happy to commend the Bill to the noble and learned Lord on precisely those tests. I hope that he agrees with my argument.
I was intrigued to see how extensively the Politeia pamphlet. by David Willetts was quoted. I am sure that Mr Willetts would be delighted that it was read so widely by the people who mattered; that is, those on his own side. That, of course, is not always the case.
I turn to the first substantive point, which involves the interaction between the social security and income tax systems and which raises questions of tax. The noble Lord, Lord Saatchi, said that the tax burden was falling on the poorest. No, my Lords: those earning below the personal allowance have not been affected by the Budget changes to NICs and income tax. The tax credits system means that even after allowing for the Budget's changes to NICs, a single-earner family on medium earnings with two children will be £3.90 a week better off. A single person aged over 25 working 35 hours at the minimum wage will be more than £20 a week better off.
We have to operate in that way because, as the noble and learned Lord, Lord Howe, identified—and as the noble Earl, Lord Russell, confirmed—the matter is nominally complicated in the Bill because one is trying to bring together the financial consequences of the tax and national insurance systems when we know that earnings and wages do not reflect family size and that income tax is disaggregated but that tax credits seek to attend to family needs and family means. Therefore, one is integrating earnings and wages—which bear no
170
resemblance to needs or means—an income tax system that is disaggregated and a social security system that is based on households. That is why, as the noble Earl, Lord Russell, rightly identified, we have to deal with the situation as we are doing. It is worth reminding ourselves that since 1997 the poorest fifth of our citizens have received an income gain of about £2,400 on average. We should be proud of that.
The noble and learned Lord, Lord Howe, supported by the noble Baroness, Lady Noakes, inquired about unmarried couples. He will not need me to remind him that that arrangement has been in place since the additional personal allowance was introduced in 1988 and is therefore not new in the Bill.
The issue about same-sex couples may or may not come up in subsequent legislation or in a proposed Bill that will be introduced by, I believe, the noble Lord, Lord Lester. Tax credits in that regard follow the social security and tax systems, and a same-sex couple is not at the moment recognised as a household.
The noble Baroness went on to make slightly more rebarbative comments—she said that tax credits fiddle—
Earl Russell: My Lords, the Minister said that a same-sex couple is not at the moment recognised as a household. I believe that the judgment of the Appellate Committee in this House in the Fitzpatrick case is to the contrary.
Baroness Hollis of Heigham: My Lords, in social security terms and, so far as I am aware, within the tax system, a single-sex couple is not regarded as a household. For tax purposes, that does not matter because the incomes are obviously disaggregated. However, I assure the noble Earl that for social security purposes, they are not.
I return to the point made by the noble Baroness, Lady Noakes, about tax credits fiddling the figures by scoring as negative income tax. Not alt all: box C2 in the Red Book described the Government's preferred method, which is that the system is now aligned with OECD guidelines and follows best international practice. The Red Book also reports fiscal aggregates for a national accounts basis, as determined by the ONS. We discussed that at our pre-meeting. If there are any particular concerns about accountancy., I should be happy to follow them up in correspondence. I seek the maximum transparency on this.
Lord Higgins: My Lords, what proportion of the total is deducted from taxation and what proportion of the total is simply a straight handout and has nothing to do with taxation?
Baroness Hollis of Heigham: My Lords, the system does not work like that; a sum would not be deducted from tax in that sense for any individual because he would continue to have tax payments. I am trying to find the relevant tables. There is information in the Red Book about the relative gainers and losers under the new system, which may answer the noble Lord's

171
question. I refer to chart 3.3 on gains for families; chart 3.2 may also be relevant. There is further information, but I cannot find the tables. I shall write to the noble Lord—we have printed information about the gainers on tax credits and losers on tax NICs and how they correlate.
Lord Higgins: My Lords, I should be happy if the Minister would write to me about that. I am rather surprised by what she has just said. As I understand it, some tax credits may be paid to someone who is outside the tax system because he is not paying tax. However, so far as others are concerned, I thought that the amount would be deducted from someone's tax bill and that his or her tax would be correspondingly reduced. Is that so?
Baroness Hollis of Heigham: My Lords, I believe that the noble Lord and I are misunderstanding each other. Tax credits are made up of two chunks. The first is the working tax credit, which goes to adults, including adults without children when their incomes are sufficiently low. That is paid through the wage packet. There may be some overlap—I should have to check the statistics—but there will be relatively little overlap because that sum goes to the very low earners. The other chunk involves the much broader band of the children's tax credit, which is paid to the main carer. That is made up of three elements. Leaving aside childcare, they are: the children's element, which provides support for individual children; the second element is the family premium, which was formerly the children's tax allowance; and below that is the child benefit. Those three elements represent the children's block of support. They will be transported from out-of-work benefits to into-work benefits.
The tapers will work in the following way. The taper will come down in relation to children's tax credit; one will start losing it right through up to about —20,000, when one will he on the bottom two strands, which are the family premium–the old children's tax credit of about £500 a year—plus the children's benefit. That will taper out again at about £50,000 to £58,000. In other words, the taper comes down, based on the working tax credit and the children's element. It then flattens between £20,000 and £50,000 and it comes down again in relation to the child benefit allowance. I do not know whether that answers the noble Lord's point.
Lord Higgins: My Lords, I am grateful to the Minister for explaining how simple the system is! Is it not the case that when the tax credit is paid through the payroll—leaving the child credit on one side—the amount of credit will be deducted from the tax bill?
Baroness Hollis of Heigham: My Lords, in a mechanical sense, the individual will get a take-home pay that includes tax and national insurance and this arrangement. In terms of the aggregation for families,
172
there is not a trade-off in the sense of an integrated tax and benefits system because there cannot be. Is that okay?
Lord Higgins: No, my Lords.
Baroness Hollis of Heigham: My Lords, I shall not pursue the matter further.
The noble Lord, Lord Higgins, also asked about the national insurance Bill. The primary rates for national insurance are bedded in primary legislation and therefore need to be altered by primary legislation. There is nothing more to it than that.
On the Bill's objectives, the crucial difference is that, under the working families' tax credit system and under previous legislation, there was a system of benefits that was based on being out of work or in work. We are now slicing that horizontally so that one has work-related support and children's support. That goes back to the explanation that I recently offered. It will help to make work pay and to tackle child poverty.
That brings me to the second range of questions, which were raised by the noble Lords, Lord Saatchi, Lord Freeman, Lord Northbrook, Lord Higgins, and others. Those questions were about means-testing, take-up and how effective the arrangement is likely to be. Noble Lords will recall that the old FIS—family income supplement—had a take-up of about 30 to 40 per cent. When family credit was introduced in 1993, it had a take-up of 50 per cent, which rose to about 72 per cent in terms of case numbers and to 80 to 85 per cent in terms of cash expenditure.
With regard to the working families' tax credit, the statistics of the IFS, which were quoted earlier, were based on the position of the WFTC 10 months after it had been introduced and therefore they had been considerably overtaken by events. At the time that the IFS did its work, it was, indeed, a fact that the figures were 62 per cent in terms of case load and 76 per cent in terms of cash because the people not claiming were those who had least to claim. We now believe that those figures are almost certainly 76 per cent in terms of case load and therefore, well over 80 per cent, or perhaps 85 per cent, in terms of cash.
We also know that, of those eligible but not entitled to family credit, one-third went on to claim WFTC. Half of all lone parents who were entitled to claim family credit but who did not do so did claim WFTC. One-third of those who were entitled to claim but did not do so could name the benefit. I am expecting that under ITC, as the momentum grows, we shall do even better than that primarily because people will be porting their children's tax credit from out of work into work. Therefore, there is an element of automaticity which, over time, should build into a much higher take-up. I cannot give more precise figures than that because, for the first time, we shall be introducing 300,000 or so people who have no children and who will be eligible to claim. We do not yet know how effective that take-up reach will be.
The noble and learned Lord, Lord Howe, suggested that the payments should be carried by other benefits. Perhaps he had in mind, for example, increasing child

173
benefit. I do not know whether he was considering that. If we did so, the money available would allow us to increase child benefit by £20 per child but at the cost of taking almost £20 a week from lower-income families while giving £10 to £20 extra for children in better-off families. Therefore, it would not have the redistributive effects that we wanted to achieve.
With regard to the more general point in relation to tapers and MDRs, as the noble Earl, Lord Russell, said, it is possible for a real conflict to arise. A sharp taper would reduce the number of people caught by targeting. In that case, there would be very high marginal deduction rates because one would be coming off the system very quickly. On the other hand, a slow, low and gentle taper, which is what we have been encouraged to introduce, would bring about a low marginal deduction rate but, as a result, it would go much further up the income scale. There is no way of reconciling those two.
The noble Earl, Lord Russell, raised the question of shared care and asked that we consider the matter. We are considering it, especially in the light of the Chester case and the read-across, if any, from child benefit to issues such as child tax credit. Obviously, it is different when one is dealing with child support because payment goes between partners as opposed to a payment from the state to the individual primary carer. However, I assure the noble Earl that that matter will be kept under review and it is currently under discussion.
The noble Lord, Lord Rix, asked about disability payments. He asked whether, if we were unable to reduce the threshold below £69, we could increase the disregard. I am perfectly willing to look at this matter, but I do not suggest that noble Lords should take comfort from that statement. We have recently reviewed, for example, the therapeutic work rules— the permitted work rules for people on IB—and that may be a better way forward for the constituency for which the noble Lord speaks than going for an increased disregard.
My noble friend Lady Andrews talked about informal childcare and asked whether there was any movement on that front. It is, indeed, the case that lone parents often favour informal rather than formal childcare because they trust it more and find it more convenient. I hope that she will agree that childcare in the home, which the Bill supports, is a useful step forward in meeting the needs of lone parents. Again, we shall keep under review whether we need to do more than that.
The issue of passporting was raised by both my noble friend and the noble Baroness, Lady Byford. The passporting of benefits, including free school meals, will be aligned to a large extent in line with the current benefit structure.
The question was raised of the system being inaccessible and I was asked about IT links with DWP. The Inland Revenue will provide support in a number of ways, including extensive guidance on claim forms being tested for suitability, the telephone help line, and face-to-face support at job centres and Inland Revenue
174
centres. We are having IT links. We want people to have access on-line if they wish. We shall also issue claim forms to existing recipients of children's tax credit, WFTC, DPTC, and so on. Rather than going into an extensive description of how we seek to reach people, if noble Lords would prefer me to do so, I shall be very happy to write a general letter on the subject and circulate it to your Lordships. I hope that, as a result, people will believe that we shall reach those whom we need to help.
The noble Baroness also returned to an issue for which she has fought so gallantly; that is, the question of post offices and methods of payment. It must be said that the primary reason that post offices are not surviving is that they are no longer being used by the communities they seek to serve. I gave the noble Baroness a statistic which I shall now share with the House. I was rather startled to find that last year 50 per cent of the rural post offices that closed had fewer than 70 customers a week. I believe that the line there is, "Use it or lose it".
In future, the methods of payment available to carers who do not receive their benefit through the wage packet will be as follows. The first method will be via a bank. More than 50 per cent of those who claim benefits now have those payments made directly into their bank account. The second method will be via the new direct banks, access to which will be available at post offices. That method is funded jointly by the Government and the banks—I believe that it is what used to be called the "universal bank". The third method will be by card account at post offices. With that system, people gain access with a card number. Therefore, there will be two or three means, including ATMs, by which people can obtain cash from the post office with greater convenience, greater security and less fraud than occurs at present.
Earl Russell: My Lords, can the Minister give me the assurance, for which I asked, that a contingency plan is in place in case the universal bank is not ready in lime?
Baroness Hollis of Heigham: My Lords, not only is there direct access into people' own banks, as is now the case; there is also direct banking and the card account. Clearly, there is no way that ration books will be withdrawn until other appropriate and convenient ways of paying benefits to people are in place. That would be inconceivable. However, we have no reason to think that the universal bank will not be ready in time. I am happy to give the noble Earl that assurance.
Baroness Byford: My Lords, perhaps I may raise a matter to which we shall return. If only 70 people use their local post office, where will those 70 people go if that post office is not there?
Baroness Hollis of Heigham: My Lords, I understand that 80 per cent of all villages where there is a post office have another post office within about one-and-a-half miles.
Noble Lords: Oh!
Baroness Hollis of Heigham: My Lords, that is my understanding. In any event, I believe that post offices

175
will survive ultimately only if they are used by their communities. From my experience of living in rural Norfolk, too often I find that people are happy to use a post office as an occasional convenience but, when it comes to buying goods in order to move revenue from post office payments into the local postmaster's income, they choose instead to go to Sainsbury's. One cannot have it both ways.
A noble Lord: An excellent choice!
Baroness Hollis of Heigham: My Lords, I am sure that the reason they go to Sainsbury's is because of the very high quality of goods that it offers.
I move to the issue of burdens on business. The noble Earl, Lord Russell, asked about discrimination as in cases reported from NACAB. It is an offence to discriminate. We have had very little evidence of it but obviously NACAB has picked up some cases. We shall be happy to take that further in order to safeguard employees. If employers act in such a way, they are committing an offence.
With regard to the matter of burdens on business, I would say only that the new system has been widely welcomed by business. For example, the CBI,
"support and welcome the attempts made by the government to simplify the rules for tax credits. In particular … [the] abolition of the need for employers to provide a proof of earning certificate … simplification of the notice periods … [and] automatic funding".
It also supports,
"the principle of moving from a fixed 6 month payment of tax credits to a rolling 12-month period".
That system has received a welcome from the CBI, the Institute of Payroll and Pensions Management, the IOD, the Association of Convenience Stores and the like. We believe that these reforms will save compliance costs of approximately £11 million which currently fall on employers. Therefore, I hope that the noble Baroness will accept that, while, so far as I can tell, all employers would like to operate in a regulation-free regime, that system has been widely welcomed as an improvement on the existing system.
With regard to childcare checking and fraud, perhaps I may write to noble Lords as I shall be able to do so in detail.
In the time left to me, I believe it is important that I address a point raised by the noble Lords, Lord Saatchi and Lord Freeman. Key draft regulations will be available for the Committee stage of the Bill. I hope that that will be helpful to the House. I accept that it is the case that social security Bills are framework Bills by definition. It would be absurd to have £16.20 enshrined in primary legislation and then to have to come back with primary legislation to turn £16.20 into £16.25. That is why all of this is done by way of regulation. It is equally important that those regulations are scrutinised so that your Lordships can read across from one to the other. I am happy to give that assurance.
176
In the light of that, we have also had a clean bill of health, as your Lordships will know, from the Delegated Powers and Regulatory Reform Committee. I shall seek to make some negative resolutions affirmative, which I am sure your Lordships will welcome. However, as I said, the Bill has been given a clean bill of health from the affirmative powers committee. I have been pressed on administrative costs. I cannot yet give a precise answer. However, we are working on updating the regulatory impact assessment which will carry the figures required.
Finally, I want to come back to a word, which—I do not want to sound disparaging—apart from the noble Earl, Lord Russell, was used by only my noble friends Lord Haskel and Lady Andrews; that is, poverty. The noble Lord, Lord Higgins, pressed me on whether the Government have, indeed, taken children out of poverty according to their manifesto. I have been trying to find the Households Below Average Income (HBAI) statistics to give him the page references. However, I shall follow this up in writing. If the noble Lord were to look at the after-housing cost figures for children based on the 1996–97 baseline, which is when we came into government, he would find that the latest HBAI statistics show that since 1996–97, 1.4 million children have been lifted out of poverty. It is in the book; read it. That is the key point.
It is certainly true that the relative figures as a median of current income have not been as successful as we had hoped. I am afraid that that is because the Chancellor has managed the economy so successfully. Possibly, had the Chancellor managed it less successfully, we would have been able more effectively to hit the relative child poverty targets because the economy would have shrunk. It is a statement of the growth of income that we have not been able to hit the relative targets. However, as regards the targets compared to the baseline of 1996–97, we have exceeded what we sought to do.
I return to the issue of poverty. As my noble friend Lady Andrews said, we are addressing those who are at the bottom of the income distribution. Currently price-linking the FBU figures, a lone parent with two children under 11 would need an income of £138 per week. The HBAI figures suggest that the latest 60 per cent median figure is £147 per week. Under our tax credits, that figure will indeed be –147. We are hitting those poverty targets with the new reforms. In addition, student nurses and dual-earner couples will all gain. As a result, we are seeing not only a shift of support from those without children to those with children but also a generous shift of support from those who are better off to those who are poorest off, both to support children in poverty and to ensure that entry wages, which are relatively low and worsening relative to median wages, still make attractive the opportunity to work.
If we put that together, we have this Bill. As we explore it in Committee, I hope that your Lordships

177
will become even more aware, as the noble Earl, Lord Russell has found, that its obvious merits will make its support compelling.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Energy Supply: EUC Report
6.14 p.m.
Lord Brooke of Alverthorperose to move, That this House takes note of the report of the European Union Committee on Energy Supply: how secure are we? (14th Report, HL Paper 82).
The noble Lord said: My Lords, this is a timely report. Energy is again high on the political agenda. I thank all those who contributed to the inquiry and to the production of our report. If I can be forgiven for being selective, in particular I thank our specialist adviser, Malcolm Keay. We could not have wished for better advice or assistance from an adviser. He seemed to know the answers to all our questions even before we had concluded asking them. As ever, our thanks go to Patrick Wogan, our worthy clerk. Finally, I thank our industrious and enthusiastic secretary, Kate Denhard, who was undertaking her first European Union inquiry with us.
I am grateful to the Minister for having responded so quickly to the recommendations in our report. I am pleased to see that the Government appear to have accepted the validity of our arguments in almost every case. I do not intend to address the recommendations one by one but rather to highlight what I think are the major themes of the report.
First, why supply and not demand? The European Commission's Green Paper, the Cabinet Office PIU review and the recent House of Commons trade and industry report all deal with energy policy in a comprehensive way; that is to say, they combine an examination of supply-side policies, demand-side policies and the application of energy to transportation. We deliberately chose not to follow that path Demand-side policies are important because they lead to a more cost-effective use of assets; in particular, non-renewable fossil fuels. There are compelling arguments for every government to apply themselves to getting right these policies. However, in our view there is not a causal link between supply-side policies and demand-side policies, though the two may interact.
The Commission's Green Paper was prompted by the fear that the decline of fossil fuels and the threat of interruption might erode the continuing level of energy supply needed to feed Europe's growing economies. We thought it right, therefore, to concentrate on that and to determine whether or not Europe and the UK in particular should be concerned. We asked the question: is supply secure? We came to the conclusion that we do need to be worried.
We heard evidence which ranged between those who pointed out that not only were fossil fuels limited but that we had or were about to pass the peak in the
178
global exploitation of oil and gas. That was a view put to us forcefully by the Oil Depletion Analysis Centre. Most of our witnesses, however, suggested that, while the ultimate decline of such resources was not in question, there were differences about how much time we had left. Whether oil and gas resources last 50 years or 100 years is an important consideration in the medium-term. But given the need for massive cultural and industrial adjustment to a world without a plentiful supply of affordable fossil fuel, it is not too early for all of us to begin to think the unthinkable.
The first question we addressed was: how should we respond to the growing threat to security of supply? Should we seek to be self-sufficient or seek to manage risk? We doubt whether it would be practicable for Europe to try to achieve self-sufficiency. In any case it would be prohibitively expensive. We shall inevitably be reliant on world markets, but world energy trade is beneficial to producers and consumers alike and should be welcomed, not feared. Such reliance, however, is not risk-free. The aim of energy security policy should be to understand, reduce and mitigate such risk. In our opinion, the way to do that is to go for diversity, flexibility and back-up. Diversity and flexibility are characteristics of competitive markets.
As regards oil, in the European and increasingly the United Kingdom perspective, the supply of oil is conditioned primarily by a global market that up to now has delivered and is confident it can go on delivering in the medium-term. There are standby arrangements administered by the International Energy Agency but, like most contingency reserves, the problem is always deciding when they might be used and what impact they might have on markets. Because the oil market is a global market, we concluded that it was not subject to a specific security threat, although undoubtedly regional political problems could impact upon that. We have seen recently, in relation to events in the Middle East, both Iraq and Libya announce short-term suspension of deliveries. That affected prices for a short period but the balance of supply and demand has remained stable.
I turn to gas. Although the gas market is becoming more of a global market, it is still dependent upon a costly and relatively inflexible infrastructure which tends to inhibit the growth of a flexible global market that would provide our best security. In the United Kingdom we have been shielded because of the proximity of oil and gas fields in the North Sea. But the North Sea is in decline and we are rapidly moving towards a position where the United Kingdom will become a net importer of gas, probably as early as 2006. This is not a problem in itself, although there are problems which flow from it—physical delivery via an infrastructure that has not yet caught up with the market; and the organisation of gas deliveries into Europe via very long-term contracts from a limited number of suppliers.
Our gas infrastructure is not at the moment capable of rapid expansion which would allow us to import large quantities of gas from the continental system. Gas enters the United Kingdom at two points—

179
St Fergus and Bacton through the compressor in Zeebrugge in Belgium. Both facilities, it is true, are being upgraded, but there is a period until 2005 when we shall be sailing very close indeed to the wind. We heard evidence that on one or two occasions over the past year the gas distribution companies in the United Kingdom were a step away from real trouble. We note with satisfaction that the Government are now looking into that issue. Can the Minister tell us when we can expect to hear results from the working group which was established to try to ensure that we do not encounter problems in that arena?
As regards longer-term gas contracts, gas for the European Union comes primarily from Russia and Algeria. At first sight, both sources might give cause for concern. Both have had severe economic and political problems. However, the historical record demonstrates that neither Russia nor Algeria have ever failed to deliver to contract.
Those deliveries have been underwritten largely by long-term "pay-or-take" contracts, usually between 25 and 30 years. We heard evidence from Gazprom of Russia, from Ruhrgas and from EdF and others that they consider these long-term contracts to be essential because they provide the necessary comfort to the financial institutions that underwrite the enormous investment required in bringing gas into Europe. There is much to be said for those arguments. Long-term contracts will no doubt continue to play a part in the provision of energy for Europe. But there is no doubt that long-term contracts impede the development of a flexible market and thus reduce our options.
We were also worried about the Russian ability to fulfil those long-term contracts. Shortly after the inquiry finished, I had occasion to meet the former Russian Deputy Prime Minister, Boris Federov, who is now a director of Gazprom. He was worried about the need to find the enormous sums of money necessary to pay for the new Russian infrastructure—after all the system was laid down 40 years ago—but also to meet the increasing domestic demand. The Russian economy is coming out of the chaos that followed the collapse of communism. Domestic demand there is growing rapidly. The Russian energy suppliers will not be able to ignore domestic demand in order to earn hard currency through exports, as they used to.
So what we are looking at is not only a requirement for Russia to replace and renew existing infrastructure to enable it to maintain its existing contractual obligations to European companies, but increasingly we shall see the need for even greater investment to meet rising domestic demand. Under those circumstances, it is difficult to share the confidence of Ruhrgas and Gazprom that the long-term "pay-or-take" contract brings any real security to Europe in 20, 25 or 30 years' time.
We have already seen, too, what happens when a flexible market meets a semi-rigid market. Gas prices in the United Kingdom over the past year have shot up not because we are any less efficient, but simply
180
because we have no choice but to import the far more expensive gas from the continent to make up our shortfalls. This gas is expensive largely because of the way in which it has been paid for. We therefore concluded that it was important for the European Community to find ways to increase the flexibility of the energy markets.
I turn to liberalisation. That leads me to the main conclusion we drew about the question of security of supply. Here I am talking about long-term security of supply, as opposed to short-term threats to the security of supply, with which I shall deal later. The European Commission is wedded to liberal markets. We heard evidence from the Commissioner herself. We were heartened by the importance that she attaches to persuading all member states to move towards more fully liberalised markets. Fully liberalised markets would not only sweat existing assets more efficiently and thus be better value for money for European consumers, but would also lead to greater security of supply. The Commission has brought forward directives governing both electricity and gas, but these do not of themselves require member states to liberalise completely. The French were fully prepared to liberalise commercial and industrial markets, but not to go all the way to the domestic consumer. In the view of the French authorities, the French domestic consumer needed the protection of the state. Barcelona has not really changed that position.
German witnesses, on the other hand, claimed that Germany had achieved 100 per cent liberalisation. But it is an odd sort of liberalisation where the market is dominated by three major German integrated groups and where there is no regulator other than the suppliers themselves to determine how the market should operate.
There are other member states similar to the UK which have already moved to fully liberalised markets. Their consumers have already seen the benefits of efficient and flexible markets. We hope very much that all European consumers will see that it is in their interests that constraints on the markets should be removed. But flexible markets also need regulation to prevent monopolies from restricting competition. Can the Minister tell us when we can expect to see regulators introduced throughout the whole of Europe, and certainly when we can expect to see regulators introduced in Germany?
During the course of our inquiry we witnessed the outrages of 11th September. The question of security threats to the existing energy infrastructures has since been taken very seriously after those tragic events. From the evidence we received, however, attacks on the energy infrastructure, although possibly devastating in a particular locality, would by and large not seriously affect the overall supply of energy to Europe and to the United Kingdom. We have no doubt that all stakeholders in the energy industries have revised their contingency plans and that the range of possible threats to be considered has been greatly widened as a result of the events of 11th September.

181
As to nuclear power—and other committee members will speak more about the role of renewables and the role of nuclear power—we came to the conclusion that for the United Kingdom in particular, and possibly for the EU collectively, it was difficult to see how the 30 per cent of energy currently supplied by nuclear power could be easily replaced from other sources without an unacceptable increase in carbon dioxide emissions.
In the short term, however, we believe very strongly that the Government can no longer delay decisions on the future of the UK nuclear industry, any more than the EU collectively can wish it away. We talk about a global village. There is not much point in giving up something in one's own garden if one's neighbour is doing exactly the opposite in his. The French nuclear industry is likely to remain the major generator of power in France. We buy their power already. Parts of the United Kingdom lie close to the French nuclear power stations. Nuclear-free parishes are unreal in a global village.
I turn to coal. Already in the United Kingdom the high price of continental gas has caused some power generators to bring back coal-fired power stations and to mothball the cleaner gas-fired power stations. We are not surprised: coal remains the most secure and competitive of all energy sources throughout the world. It is found all over the world and global resources can be measured in centuries in the future. Its drawback is the high level of CO2 emissions. If we accept the current fashionable assumption that the increase in CO2 emissions is the trigger for climate change, then clearly we must do something to make coal more socially and politically acceptable. But that is not impossible—or even especially difficult—to achieve. It requires us to divert resources to clean coal technologies and to measures such as CO2 sequestration.
On renewables, the committee examined the case for renewable energy in its 12th report in 1999 and concluded that aspiration and delivery were far apart. We then expressed scepticism whether the UK and EU would be able to meet their Kyoto targets. We have seen little to change that view, although we fully accept the importance that renewables may play in helping to reduce our dependence on fossil fuels and in limiting CO2 emissions.
To sum up, there is increasing risk to the security of supply of energy in the UK and the EU. We should learn to manage that risk, not pursue dreams of self-sufficiency. Fully liberalised European markets operating within a global energy market are the best way to achieve security of supply.
We urge the Government and the European Commission to persevere in persuading our European partners of the validity of those assumptions. European consumers are currently paying more than they need because not all markets are operating as they should. The Government and the EU need to be realistic about the role of the nuclear industry. It currently supplies 30 per cent of the EU's energy needs. In our view, it cannot rapidly be replaced by any
182
combination of windmills, tidal barrages or biomass. Hard decisions are needed now. Nor should we forget the important role that coal will continue to play as we collectively learn to manage the long-term decline of oil and gas.
Moved, That this House takes note of the report of the European Union Committee on Energy Supply: how secure are we? (14th Report. IIL Paper 82).—(Lord Brooke of Alverthorpe.)
6.31 p.m.
Lord Ezra: My Lords, I wish first to declare that for many years I have been actively involved in the energy sector and am currently chairman of Micropower, which seeks to promote the small-scale generation of electricity. I pay tribute to the committee for its wide-ranging report and to the noble Lord, Lord Brooke of Alverthorpe, for so clearly identifying the issues that it considered. I am sure that that will lead to a constructive debate.
As the noble Lord said, a spate of reports has recently been issued on the subject—not only the European Commission's Green Paper, which is the subject of the Select Committee report, but the Select Committee on Trade and Industry in another place and the wide-ranging Performance and Innovation Unit energy review issued in February. There have been a number of other reports. They all demonstrate the importance now attached to the issue of energy security.
Hitherto, the environment has been regarded as the most important aspect of energy. It remains important, but security of supply—both short-term and long-term73x2014;is now equally if not more important. Of course, we cannot be sure when or how short-term risk will arise—whether motivated by politics or terrorism—but we must ensure that we are fully prepared for such risks. However, in the case of longer-term risk, we are in a better position to act because we are fairly clear what is likely to happen: namely, increased dependence on imports.
The EU is at present 40 per cent dependent on imports. It is estimated that on current trends that is likely to rise to at least 70 per cent by 2020. In Britain, we shall in all likelihood move from total self-sufficiency to net import dependency from 2005–06 onwards, leading to substantial import dependency in gas by 2020. So we share a common problem with the rest of the EU and I am glad that we are jointly considering the issue. The committee clearly recognises the problem—the noble Lord has just told us of the importance that it attaches to it and has given us a clear analysis of its findings.
I should like to refer to the emphasis placed by the report and the noble Lord on what is described as "risk management" to deal with the problem of increasing import dependence. That term was used by the Department of Trade and Industry in its evidence to the committee in October It implies that we should wait for problems to arise and then deal with them, whereas I should have thought that as it is clear that we shall become increasingly dependent on imports, more

183
specific action could be suggested. A system of risk management appears to mean that we prepare ourselves for possible eventualities.
The problem is that, especially in the case of gas, we shall become dependent on increasingly distant supplies and will be at the end of the European pipeline, with all the risks that that implies—a point mentioned by the noble Lord, Lord Haslam, in his evidence to the committee last December. I should have thought it desirable that, while preparing to deal with possible future risks, we should be more clear how we intend to mitigate the problem. For the first time in our long industrial history, we shall face the prospect of largely importing our main source of energy. We had coal from the start of the industrial revolution—gradually supplanted by gas and oil, which in recent years has been supplied from the North Sea. All that will substantially change.
So we should seriously consider alternative energy sources in a determined manner. Indeed, the report and the noble Lord's speech referred to those alternatives. Perhaps I may speak about some of them.
Concerning oil—of which we shall once again become a net importer—more determined efforts need to be made to substitute other forms of energy in the transport sector. While much encouragement is being given to research and development, more decisive action is needed. For example, there are now well-tried alternatives to the use of petroleum products in motor transport. Why could we not make a start by converting all public transport to one or other of those alternatives and providing fiscal incentives, similar to those offered for unleaded petrol, to the private motorist? That would at least be a positive start.
In the case of gas, as the noble Lord said, the main alternative energy sources are nuclear power, coal and renewables. In the case of nuclear energy, the committee is right to state that the three main issues that must be resolved before present nuclear plant can be replaced are its economic viability, perceived safety and waste disposal. On the last matter, there has been a long delay in reaching conclusions. There has been a whole succession of reports and consultations but no conclusions. Until we reach a decision on waste disposal, it will be difficult to reach a conclusion on any replacement nuclear plant.
The committee is also right—as was the noble Lord—to criticise the EU report for being too dismissive about coal. The EU and the UK have abundant coal reserves and skills to develop them. As the noble Lord rightly pointed out, although coal presents environmental difficulties when burnt conventionally, there is now the clear prospect of developing clean coal technology—as it has been in other parts of the world, where plant is working—to overcome that problem. Unfortunately, at present, there is no working plant in the UK. If we develop clean coal technology associated with carbon sequestration, we can make coal thoroughly environmentally acceptable.
184
As the noble Lord said, much reliance has been placed on renewables. However, expectations have always been somewhat in advance of achievement. Although it is important to develop renewable sources, we must accept that it will be a long time before a major contribution will come from that source. So, we must consider other possibilities, some of which could be provided by developing the small-scale generation of electricity—distributed generation, as it is now called. I have already declared my interest in the subject.
In this country, much of the energy that we lose is from the waste heat from conventional power stations. If that waste heat could be productively used, we could substantially reduce our overall energy requirement. Electricity generated on a smaller scale can make use of the waste heat that large-scale generators cannot. The prospects for small-scale generation making full use of the waste heat are well advanced and could make a big contribution to the energy security problem if the present regulatory obstacles were removed.
In the present system of electricity generation in Britain, the electricity moves only one way: from the major power stations, through the distributive systems to the ultimate consumer. By introducing small-scale generation, we can have electricity that moves two ways. That will mean changes in the regulatory system and in the way in which the distribution system works, particularly at local level. Those issues must be resolved quickly, if we are to take advantage of such prospects.
I wish to raise two issues arising from the operation of the new electricity trading arrangement (NETA). The first is the pressure for wholesale electricity prices to be reduced to the point that plant is now being taken out of production. That raises the important issue of the margin of security of electricity supply. In the old days, it was clear who was responsible for making sure that there was an adequate margin for the security of electricity supply—the CEGB. Now, it is not entirely clear who is responsible. It does not appear to be Ofgem, which seems to regard it as its main task to reduce the price of electricity through the operation of market forces. That is a laudable objective, as long as it does not lead, on the other hand, to a threat to longterm supply and capacity. That matter should be carefully examined.
My second point relates to NETA's adverse impact on the supply of small-scale generators with variable outputs. That is a well known issue and has frequently been mentioned in debates in the House. The settlements procedure under NETA means that small generators with variable output—in particular, renewables and CHP plants—suffer. The Government wish to encourage the development of those plants, but that aspect of the new electricity arrangement operates against them.
In the recent Budget, the Government gave added support to combined heat and power by exempting it entirely from the climate change levy. That is highly welcome and desirable. They have also done it for

185
electricity generation from coalmine methane. Those are important steps in the right direction, but there is more to be done.
A great deal of energy is wasted in the domestic sector. One reason for that is that there have been abundant supplies of energy, in whatever form, and downward pressure on prices. The PIU report correctly draws attention to the need to stimulate greater efficiency in that market. I was a little disappointed in the view expressed in the Select Committee's report about the effect of energy efficiency. The committee concluded that,
"the European Union should continue to promote energy efficiency but without assuming that it will lead to greater security of supply"
I found that a surprising statement. There is no doubt in my mind that greater energy efficiency can substantially lessen the need for imports if directed in the right way. A strong fiscal incentive in the domestic sector could lead to much energy saving that could, combined with a move towards small-scale electricity generation, substantially diminish overall energy needs.
To conclude, my Lords, the Select Committee on the European Union was right to examine the important Green Paper prepared by the European Commission. Security of supply is an issue of major importance not only to the EU as a whole but, increasingly, to the UK. The defect that I have found in many reports on the subject is that they recite options without recommending specific action. Short-term terrorist or political threats cannot be forecast, so a general state of preparedness is required. However, the longer-term trend towards growing dependence on imports is more predictable. We do not need more reports or consultation periods: we need clearly defined action to diversify energy sources and reduce energy demand through greater efficiency.
6.47 p.m.
Lord Wilson of Tillyorn: My Lords, it is a great pleasure to follow the noble Lord, Lord Ezra, who has such long experience of energy matters. He gave powerful evidence to the committee when the report was in preparation. It was also a great pleasure to serve on Sub-Committee B, which worked on the report under the benign chairmanship of the noble Lord, Lord Brooke of Alverthorpe. As the noble Lord said, the report covered a huge amount of ground. It was instructive to be involved in the work of the committee.
I shall concentrate, if I may, on the role of renewable sources of energy, with particular reference to the experience that we have had in the United Kingdom. That is one part of the subject with which the committee dealt. The report used one of those splendid, sonorous committee phrases to refer to renewable energy, saying that it was,
"important not to let a justifiable enthusiasm … lead to an unrealistic expectation".
186
There is an even more powerful expression in Chinese that, roughly translated, describes someone as behaving as though their "eyes were eating ice cream"; in other words, they are looking at some delectable object and getting slightly over-enthusiastic about it.
During the committee's work, it became clear that there was a great deal of justified enthusiasm for renewable sources of energy and many high expectations for it—possibly, even probably, too high. The European Commission has set a target for all energy of 12 per cent from renewable sources by 2010. That doubles a previous target. It was clear from the evidence given to the committee that many people were pressing for higher targets. In the UK, expectations are also high. A target of 10 per cent by 2010 has been set for electricity from renewable sources.
That implies building new sources of electricity generation at a rate of four to five times the rate they have been built during the past decade. That is a substantial increase. The latest energy review by the Cabinet Office, the PIU, talks of the need to double that target by 2010, to 20 per cent of all electricity used in the UK. That is a high target. The evidence which came before the committee from most, but by no means all, of the witnesses suggested that the targets were unrealistic. People tended to use the nicer phrase, "over optimistic".
Before going further with the subject, perhaps should declare an expired interest, if one is meant to do that. Until some 18 months ago, I was chairman of an energy company which produces the largest amount of electricity from renewable sources in this country. Partly as a result of that experience, but both before and since, I have felt a passionate attachment to the whole history of the development of renewable energy particularly from hydro-electric sources in the UK.
I also feel a huge respect for people such as the great Torn Johnston, the Labour Secretary of State for Scotland in the war-time coalition government and then Secretary of State again after the war, who during that period did a huge amount to develop hydro electricity in Scotland against deep-rooted opposition. I hope that all this will not be seen as unduly' colouring my approach to the issues.
I believe that, as suggested in the committee's report, we must be realistic and practical. We must recognise, first, that new generation from renewable sources is expensive. For instance, I am told that, on rough calculation, the cost of generation from a modern gas-fired power station is roughly £21 per megawatt hour, or just over 2p per kilowatt hour. The average cost of generation from a wind farm is about £34 per megawatt hour; that is nearly 3.5p per kilowatt hour. It is very expensive.
I suggest that it is good to encourage the use of renewables; but we need to be aware of the additional cost. Furthermore, we need to ensure that those who consume the electricity and who pay the bills are also aware of the additional cost. After all, if the Government state that X amount of electricity must come from a new renewable source—for instance,

187
wind turbines—and that this must be bought in by the electricity suppliers at an inflated price, that is, in effect, a tax. It would seem right that the people who pay that tax—the consumers of electricity—should know what they are paying. In other words, on a bill you should be able to see that X is the additional amount you are paying because the electricity is coming from a new renewable source. Everyone will then be clear about what is being done.
Then there is the question of what kind of renewable energy one should try to use and develop. Sadly, we have lagged behind on the development of wind turbines. Perhaps that is because everyone concerned was all too well aware of the fact that, although the wind blows strongly, it does not blow all the time. I remember visiting an experimental wind generator in Shetland. I arrived one evening when the plane could hardly land because the wind was blowing a gale. The wind generator had had to be furled so that it would not be blown over. The next morning, when I visited the site, there was no wind and the wind generator was not working. Even in the Shetland Islands, the wind does not blow all the time; it is spasmodic.
However, we in the UK have growing experience of wave generation. It is probably correct to say that we are at the forefront of that. Whereas we buy our new wind turbines essentially from Denmark and Germany, in wave generation the picture is rather different. For example, I remember visiting the island of Islay off the west coast of Scotland where there was being developed a small wave generation power station by a company called Wavegen. As one approached it, one saw nothing—only level ground. Only when one was right on top of it could one see that anything was happening. The wave power is, unlike wind power, constant. One might say that we in the UK have some of the best waves in Europe. Perhaps we should use them more because we are at the forefront of that development.
Moreover, if we are to make full and proper use of renewable sources of energy, we need to ensure that the various parts of the official machinery get together. The noble Lord, Lord Ezra, referred to the new energy trading arrangements (NETA), which are being put out by the regulator, Ofgen. They discriminate against small generators such as wind generators. They also discriminate against generation which is distant from the source of use. But the reality is that, in the UK, the renewable sources of generation tend to be in the North and North West, whereas the major users tend to be in the South or in the Midlands. The NETA arrangements tend to discriminate against bringing power from a distant point and therefore potentially against renewable sources of generation.
If we are to capitalise on our potential renewable generation such as wave and wind power, we need a good North/South link. That will not come cheaply. I have seen an estimate showing that, in order to fulfil the Government's commitment to the use of renewable energy in the UK, it will cost approximately £1 billion in establishing a transmission network. One would hope that those costs would not fall on the area or the
188
consumers where the renewable energy is being generated but throughout the whole of the UK where the energy is to be used.
Finally on that point, one needs to ensure that, as we develop renewable generation, the pricing structure from a system such as NETA does not so operate that it encourages the use of, say, an old coal-fired power station (not one of the clean coal technologies to which the noble Lord, Lord Ezra, referred), thus encouraging the use of that kind of power station at the expense of more efficient but more distant power stations, either more modern or those using renewable sources of energy. The trouble with all this, as the noble Lord, Lord Ezra, implied, is that the remit of the regulator, Ofgem, does not run in that kind of direction. It runs entirely in the direction of cost effectiveness. There is no joined-up government.
If we are to use our renewable sources properly, I suggest that we make full use of our substantial sources of hydro electricity. It amounts to about 50 per cent of all the renewables we have in this country. At one point, the Government ruled out existing large-scale hydro stations from qualifying under their various schemes to encourage the use of renewable energy. Happily, that policy has now changed and present government policy allows hydro electricity, even if it has existed for some time, to be counted for the so-called "green ticket" and for the new Renewables Obligation, provided that it is the result of recent refurbishment and only up to a limit of 20 megawatts.
Many may feel that the 20-megawatt limit is somewhat parsimonious, given that a large hydro station—for instance, Sloy power station on Loch Lomond—is 160 megawatts. Clunie power station, near Pitlochry, is 62 megawatts. If we are really to make use of all our renewable sources of energy, it would seem sensible that government policy should join up and should encourage the use of that energy too.
I have deliberately concentrated on experience in the United Kingdom because that is an area in which we can do something. It is also part of our contribution to what is done throughout the whole of the European Union towards diversity and security of supply. In making use of our own renewable energy resources, we need to be realistic. We should neither expect more, nor set targets for more, than can realistically be achieved. We need to recognise the true cost and to have overall policies that enable renewables to play their full role in diversity, security of supply and being environmentally friendly. If we act in those ways, renewables will take their proper place in the pantheon of energy providers.
7 p.m.
Baroness Cohen of Pimlico: My Lords, I am a member of Sub-Committee B of the Select Committee on the European Union and had a hand in writing the report under the guidance of its excellent chairman, my noble friend Lord Brooke of Alverthorpe. I want to address the issue of nuclear power generation, which currently provides 25 per cent of the United Kingdom's needs.

189
The UK has 16 nuclear power stations—6 Magnox operated by British Nuclear Fuels and 10 of other designs owned and operated by British Energy plc. The last nuclear power station built in the UK was Sizewell B, which came on stream in 1994. The bulk of those plants are ageing. The Magnox stations will all reach their 40th anniversary within the next 10 to 15 years. Calder Hall, which is still in operation, dates from 1956. The majority of the 10 British Energy plants will reach 40 years of age in the next 15 to 20 years, leaving the UK with limited generating capacity by 2020.
Those nuclear plants provide some 25 per cent of the UK's generating capacity and about 10 per cent of that of the European Union. By 2020 they will be providing less than 3 per cent of UK capacity and about 1 per cent of Europe's—assuming that Electricité de France continues to produce about 70 per cent of the power consumed by France using nuclear sources.
We all assume that the fall in nuclear generation will be made up by increased gas and, to a lesser extent, oil generation. My noble friend Lord Brooke spoke about the potential limitations of gas and oil generation. The noble Lord, Lord Wilson, referred to the contribution to be made by renewable resources; and the noble Lord, Lord Ezra, to that which coal could make. Whichever way you slice it, the implication is that by 2020, Europe will be hugely dependent on geographically distant sources of gas and oil, transported by an ageing distribution network that may still be inadequately financed.
The UK, being at the wrong end of that network, could be particularly adversely affected. Even if those problems did not exist—if gas supplies were closer and distribution more reliable—using carbon sources so heavily undermines the ability of Europe and the UK individually to meet the environmental targets agreed at Kyoto. We agreed to a major reduction of carbon emissions by 2010. So did our European colleagues. It is practically impossible to see how those targets can be reached unless the UK retains something like its current nuclear capacity. The report is primarily about security of supply rather than environmental matters, it is clear that environmental concern contributed to the final, somewhat limp recommendation that
"the nuclear option must be kept open".
I was strongly reminded of the observation in Kipling's poem that
"gardens are not made
By singing:—'Oh, how beautiful!'
And sitting in the shade".
By the same token, the nuclear power option cannot be kept open by people seriously saying that it should be. Active steps must be taken to make those words approach reality. I welcome the PIU, which at least recommends that the Government take positive steps to keep the nuclear option open.
Members of Sub-Committee B, being conscientious people, discussed those steps in detail. All are difficult but all need tackling now. I put the priorities in reverse order to the noble Lord, Lord Ezra. For me, the first step is dealing with radioactive waste. A report from the Select Committee on Technology in 2001 observed that if we never build another nuclear power station, the problem would still he with us. Defence uses nuclear
190
power. All our submarines are powered by nuclear reactors because that is the only form of propulsion that enables a submarine to operate undetected. Waste is already accumulated from existing stations and decommissioning will add more. The problem will not go away and solutions must be found. We all hope that work will gain impetus when the liabilities management authority is established and operational.
Secondly, it is clear that the industry needs government decisions on the planning and siting of replacement plants. That cannot he left to the normal planning processes, as if we were talking about supermarkets. They are considerations of national importance. Clear policy, unambiguously stated, is required. We should accept the solution urged by British Energy—that planning consent should be available for replacement plants on existing sites. Neither British Energy nor anyone else involved in the UK debate is suggesting that we do more than replace existing capacity. That can be done with fewer and much smaller modern plants, so not all existing sites would necessarily be used.
Thirdly, and critically, the public need the opportunity and the information necessary to enable them to think about nuclear power generation and to form a balanced view. The debate about security of supply has not surfaced since the mid-1980s and is not well understood—not surprising in view of the past 15 years, which have seen cheap and abundant supplies of carbon-based generation.
Nuclear generation has received an undeservedly bad press. For far too long—and in the teeth of the laws of physics, as well as the UK's admirable safety record—public perception has been that a nuclear generating plant remains intrinsically dangerous. There are valid arguments, some of them new, about the dangers of terrorism but the construction of new plants would take such issues into account. They could be rendered reasonably safe with a combination of physical defences and the ability to shut down quickly. There is a lack of logic also in objections. Elements of the public oppose new nuclear generation in any area that is close to them geographically, yet ignore the presence of nuclear plants closer still, in France. All those aspects need addressing to gain public consent for a nuclear plant building programme, which will not be easy.
Fourthly, there is considerable dispute and uncertainty as to the real costs of nuclear power. Some figures suggest that it is not much more expensive than current prices for gas. Figures given to the committee suggested that nuclear power could be generated at 2.2 pence per kilowatt hour. Because the private sector will not build a new power station without assurances about the prices at which its output could be sold, consideration may have to be given to some form of carbon tax—which would also enable the UK to meet the terms of the Kyoto agreement. However, that is by no means clear and the real costs need further exploration.
I hope to see a real sense of urgency in the nuclear debate. The response of Ministers so far to the PIU and to our report has not been unencouraging—just not very dynamic. There is a strand of feeling that it will be

191
all right on the night; that either a way will be found to extract more fuel from somewhere or that some wondrous invention just around the corner will save all our bets. I do not doubt that the private sector will display its usual resource in sweating assets and exploiting to the full world reserves of oil and gas. But what then of our obligations to Kyoto? In my 40-year working life, only one new invention capable of saving all our bets in this field has emerged. It is called nuclear power.
Ministers have promised to take the first steps towards ensuring that the option is kept alive with a White Paper to be published "later in the year". I would be most grateful if, when he comes to respond to the debate, my noble friend on the Front Bench could tell us how much later in the year. Similarly, the setting up of a liabilities management authority has been announced, but primary legislation will be required to fund it and make it operational. Again, I hope that my noble friend will be able to give the House some assurance that the relevant legislation will be brought forward during the next Session to bring this much-needed authority into operation.
Time closes all options. To paraphrase the well-known saying, all that is required for the death of nuclear generation in this country is for Ministers to do not a great deal rather slowly. If we do not take the critical steps towards enabling a programme of replacement for our existing nuclear power plants soon, then we shall lose finally the necessary lead times and the skills of the people needed to build and operate them. Without nuclear generation capacity and the means to renew it, I believe that we shall be putting at risk the ability of the United Kingdom to provide secure generating power for the economic and domestic needs of our citizens in the not too distant future.
7.11 p.m.
The Earl of Mar and Kellie: My Lords, following the noble Baroness, Lady Cohen of Pimlico, reminds me that in Scotland, some 44 per cent of our electricity is generated by nuclear power. Furthermore, two out of our three nuclear power stations are due to close in the medium term. Clearly, in Scotland, we shall have to decide what to do about power generation when we reach that point of replacement.
I intervene in this debate at a slight tangent because I have an increasing interest in new forms of energy, in particular the use of non-fossil road fuels and the re-use of waste as road fuels. I note that the report considers renewables to be an agreeable and morally virtuous side-show which may have potential in the future, but on which we should not rely in the near or medium term. I fully accept that many of the renewables are still in the development phase and that they represent only a tiny percentage of the volume of energy required across the United Kingdom.
I wish to declare the following minor interests. I own woodlands in Clackmannanshire and as a consequence sell timber and firewood. I also have to
192
clear up a great deal of rubbish resulting from fly-tipping. I resent that task less when the rubbish is combustible in the stoves at home, thus heating our water. I shall be speaking about alternative road fuels, but I have no interests to declare in that industry, except perhaps to say that at home I have two diesel road vehicles, a Peugeot 306 and Ford Ranger pick-up.
We have an embryonic alternative fuels industry in the United Kingdom which is in need of greater fiscal breaks than those recently offered in the Budget. The road fuels to which I refer are diesel fuels derived from oilseed rape and waste cooking oil. The former is an organic fuel, planted in the spring, harvested in the autumn, processed and used within the year. It is thus a highly renewable fuel. The limited tonnage of oilseed rape diesel fuel could be increased by allowing the crop to be grown during agricultural set-aside or, indeed, as an alternative to set-aside.
The second fuel to take my fancy is diesel fuel derived from waste cooking oil. This is a green fuel, but it is not a renewable one. It is of course a sustainable waste product, which might be seen as being even more virtuous. The source of such waste derives mostly from chip shops, which generally have a problem with regard to its disposal. Recently it has been used as an additive in animal feed, but that is supposed to have come to an end. Where waste cooking oil is so collected, the chip shops change their oil more often, which benefits their chips. That is in itself a useful consequence beyond the use of the old oil as a road fuel.
These industries must develop themselves. The Government could help, but they are not doing so at present. Recently the Chancellor announced fuel duty rebates of 20p per litre on the 46p duty for so-called biodiesel. This will help the producers of biodiesel, which has a small bioderived content and is largely fossil-derived diesel. That barely qualifies it as a renewable or organic fuel.
The duty derogation needs to be increased above the level of 20p in order to bring pure biodiesel and diesel fuel derived from waste on to the forecourts at a competitive price. Their production processes do cost more, in particular in the earlier stages of their development. The Chancellor could help here by introducing a further duty derogation.
Then there is the problem, for which the Government are not responsible, of vehicle warranties. Most manufacturers will allow the use of only fossil-derived diesel fuels, or an owner faces invalidating the warranty. This morning I contacted the agents for both of the vehicles I mentioned earlier in my remarks. Both agents confirmed that the use of non-fossil-derived diesel fuels was out of the question. That is largely a matter of conservatism on the part of the motor engineering industry.
It is a perverse fact that the Chancellor's much-favoured ultra low sulphur diesel fuel may well be causing increased engine wear as it may not be a good upper cylinder lubricant and could be wearing out injector pumps. But then the Chancellor seems to be more interested in acting on vehicle emission reduction than on reducing the use of fossil-derived road fuels.

193
He is right to be interested in reducing greenhouse gases, but he should take a greater interest in promoting the use of non-fossil fuels. They are largely carbon neutral and in the main are presently an untapped source of energy.
I wish to make two further points. First, I believe that the duty on non-fossil fuels is a case of mistaken interpretation of the EU rules. Germany does not impose any duty on biofuels; nor does Poland. Poland is an EU accession country and it will be interesting to see whether the Poles are required to impose a duty on their non-fossil-derived diesel fuel as a part of the accession process.
In a Written Answer published yesterday, the noble Lord, Lord McIntosh of Haringey, stated that when non-fossil fuels are used as road fuels, they require to be taxed at the same rate as the fuel for which they have been substituted. Perhaps it is only raw government policy rat her than a misinterpretation. I suspect that the policy could he changed at will.
My second and final point concerns the apparent inability to sell non-fossil fuels as "red diesel". One supplier in North Wales has told me that the local Customs and Excise officials insist that all his non-fossil fuel is subject to the full duty of 46p, even if that fuel is then used in vehicles which qualify for red diesel. There are organisations which would like to use a green diesel in the red diesel context, but that seems to be impossible at present Will any action be taken to remedy that?
I conclude with the belief that these domestically produced embryonic fuels can contribute to the security of fuel supplies in future, albeit in a small way. That is especially so if their development can he unshackled by fiscal measures.
7.20 p.m.
Lord Cooke of Islandreagh: My Lords, I must congratulate the Select Committee on its report. I found it unusually good bedtime reading. It kept me awake much longer than anything else. I believed that the noble Lord, Lord Brooke of Alverthorpe, and others, would discuss and debate the main issues of the report. I have picked up a few things which might he described as "sidelines".
I was surprised, but not too surprised, to find that European countries have clone little to improve security by interconnecting and co-ordinating their electrical power networks and pipelines. Perhaps they do not have the inter-country trust that is needed. But it means that we cannot depend on gas supplies via continental pipelines to the extent we might have expected.
The Select Committee's executive report sets out all the main issues very well. I found myself in agreement with the recommendations on each, particularly the last urging government to maintain nuclear power generation to at least 20 per cent of the total. I believe that it is vital that we keep in touch with nuclear power development and waste disposal. I entirely agree with the noble Baroness, Lady Cohen of Pimlico, that we must not let time pass, but get to the matter now and move things on quickly otherwise it will be too late.
194
I found the submissions to the Select Committee and the examination of witnesses to be of particular interest. They were very relevant and gave real body to the report. I wish to comment on some of them. I heard Dr Dieter Helm, one of the witnesses, speak at a recent meeting. I noted that he had a thorough grasp of all the issues. His evidence includes his thoughts about an energy agency comprising knowledgeable people with relevant expertise who would advise government, but be independent.
Unfortunately, the Government have declared the intention to use the ministerial sub-committee on energy policy to carry out that work. Their reports will have a political slant which is inappropriate for a report of this nature. We are moving into a new world of problems which will require expertise which is scarce at present in the view of Dr Helm: I agree. I believe that his proposal is an important one and should be supported so that we could separate technical advice from politics.
The Select Committee interviewed many interesting witnesses including, of course, the noble Lord, Lord Ezra. From his written submission I took particular note of his request that,
"the emphasis on increased competition and reduced prices needs to be replaced with emphasis on energy conservation and efficiency".
I believe that we are paying too much attention to price alone.
The new electricity trading arrangements have not made for efficient operation of the power stations. The noble Lord pointed out that very cheap electrical power did not encourage either manufacturers or householders to save energy. In the comments of the noble Lord, Lord Ezra, and in many other interviews, there was more good sense shown about energy matters than much of what I have read in official sources recently. The PIU submission, The Energy Review, published in February, is a good example of the latter. There are nine pages listing the names of those consulted. Unfortunately, the benefit of their advice is not obvious. For instance, the review sets up arbitrary targets and proposes that there should be an examination later on how to achieve them. That seems an odd way to deal with the matter. Does it make sense?
One of the many recommendations in the report is that,
"Government should set up a cross-cutting unit to oversee the future direction of energy policy; to implement the findings of the PIU review and to provide an enhanced analytical capability".
That made me wonder whether the members of the unit will be given chain saws to enhance their analytical capability.
The noble Lord, Lord Ezra, spoke with feeling on the reduction of energy in buildings, a matter which has not been attended to by the authorities. I simply do not understand why. It is also a subject which is close to my heart. I must declare a past interest. For many years I was involved in the promotion and building of low-energy houses and other buildings. They cost one-half or less to heat than houses built to the building regulations of the time. Building was faster and the

195
cost less than 10 per cent more than ordinary houses. To the best of my knowledge, we had no complaints. We have never had any complaints from the owners or tenants of very comfortable houses.
I cannot resist mentioning the evidence given by Mr Andrew Warren of EuroACE. He believed that if we concentrated on the insulation of the existing housing stock we could reduce the energy required by 30 per cent or 40 per cent, which amounts to about 12 per cent of the national demand for energy. But the building trade does not like fiddling around with work which requires care and judgment. It charges very high prices for such work. It prefers to build houses quickly with bricks and blocks. I am afraid that vested interests would resist change in building materials or methods.
I believe that we should be working nationally to reduce the energy used in existing houses. It has been achieved. We should look to Denmark which has achieved much in a similar climate. I wonder whether the Select Committee would like to move on to study how the demand for energy, particularly for housing, could be reduced. If it is feeling energetic it might include industry and other buildings.
I finish by congratulating the members of the Select Committee of the European Union on their painstaking work. I hope that it will receive widespread attention.
7.28 p.m.
Lord Shutt of Greetland: My Lords, I also rise as a Member of Sub-Committee B. Until yesterday I thought I would come along and take note. I now find that it is a double act of both speaking and winding up. It is my first experience of being on a committee, preparing a substantial report and being thoroughly involved. I endeavoured to attend most of the meetings.
It has been somewhat difficult to get used to some of the language that was used, but I believe that ultimately we coped. Three matters really stuck in my mind as regards the report. The first point struck me six months ago yesterday at one of our earliest meetings. In response to the noble Baroness, Lady O'Cathain, one of our witnesses, Professor Paul Stevens, stated at page 23 of the evidence:
"In the countries of the Middle East for a long time now there has been a growing disconnect between the rulers and the ruled. The ruled, by and large, regard their ruling elite as incompetent, corrupt, un-Islamic and propped up by the United States".
That remark has stayed with me. It is very important because it suggests that many of the issues surrounding the security of supply concern politics and diplomacy. We must not forget that.
My second point relates to the many discussions that there have been about renewables. The suggestion that 12 per cent of our energy will come from renewables by 2010 arises more from hope than expectation. I wonder whether there should be more encouragement across Europe for renewable sources of energy.
196
The third point to stay with me relates to the nuclear option and the concerns about safety and nuclear waste should that come very much into the reckoning. Those issues will have to be considered thoroughly.
So those are the three areas that one should keep in mind—the security of supply of oil, renewables and, if the nuclear option has to be looked at, safety and nuclear waste.
I, too, pay tribute to the noble Lord, Lord Brooke of Alverthorpe, for giving a full account and a clear summary of the report. It is interesting that, with the exception of my noble friend Lord Ezra, who referred particularly to coal and energy efficiency, most noble Lords homed in on two issues. The noble Baroness, Lady Cohen of Pimlico, made a vibrant case for the nuclear option to be kept open, a matter also referred to by the noble Lord, Lord Cooke; and the noble Lord, Lord Wilson, and my noble friend Lord Mar and Kellie referred to renewables. It is obvious from the debate that your Lordships believe that, however difficult it may be, the renewable option needs to be encouraged and pursued to ensure security of supply.
7.34 p.m.
Baroness Miller of Hendon: My Lords, I, too, congratulate the noble Lord, Lord Brooke of Alverthorpe, and his committee on their excellent work. I also thank him for securing the time for this important debate. It is important but it is not novel because, in one way or another, we have debated energy supply and its future at frequent intervals without, as far as I can see, any solutions appearing even on the distant horizon. It is important also because the Government have not yet provided the time for a debate on the review in both Houses, as was promised in European Standing Committee C by the Minister for Industry and Energy last year.
It is right that the House should continue to raise the matter in order to concentrate the Government's mind—and, it is to be hoped, the minds of other governments, especially those in the EU and the United States—on the need for action now, rather than to leave matters until severe damage is done not only to our economy and the lives of our citizens, but to the rest of the world as well.
There are several sources of energy available to the United Kingdom, but different problems attach to each—problems which, in the case of a loss or restriction of the supply of each of them, could cause severe disruption to the lives of our citizens and the whole of our industry, and which would certainly compromise our security as regards our energy supply.
The Select Committee stated that,
"the focus should be on risk management and … the main tools should be diversity, flexibility and the availability back up".
Thus far I entirely agree with the committee; but the sentence concludes, "not… self sufficiency".
Safety in any field of supply of goods or services is greatest when one does not have to depend on the performance or good will of others—in this case, foreign governments who may have political axes to grind or even local problems to solve. One has to look

197
only at the various attempts at oil embargoes or the virtual absence of a free and open market in the price of oil, which is manipulated by a supranational cartel, to see what I mean. As for local problems, can it be said that the former Soviet Union, with its massive resources of oil and gas, is a dependable source of supply upon which anyone could place long term reliance? The noble Lord, Lord Brooke of Alverthorpe, made a very similar point.
In its energy review, the Government's Performance and Innovation Unit stated that,
"energy security should he addressed by a variety of means … however, there appears to be no pressing problems connected with the increased dependence on gas, including gas imported from overseas".
That is short-termism. Leaving aside the fact that large parts of our supplies have to be paid for out of our foreign currency earnings, dependency on others—even in what the PIU calls the "liberalised European gas market"—still makes us vulnerable to forces over which we have no control. Proven gas reserves in the United Kingdom, Norway and the Netherlands are less than the United Kingdom's gas requirements for the next 50 years. Russia and the Middle East hold more than 60 per cent of the world's gas supplies, and geographically the United Kingdom is at the far end of a trans-European gas pipeline, as the noble Lord, Lord Ezra, pointed out.
The PIU refers to,
"continued attention to long term incentives".
In my view, "Long term" includes making sure that we have sufficient alternative supplies of energy—especially ones where we are not dependent on international factors— so that even if for the moment, "We're all right, Jack", we will not have put so many eggs into the one basket of overseas supplies of gas that our grandchildren could he in trouble half-way through this new century.
It is unnecessary for me to remind your Lordships—but I shall do so nevertheless—that the supplies of all kinds of fossil fuel, especially oil and gas, are not inexhaustible, and that while the world continues to consume them at the rate it is doing, we are bringing closer the day when future generations, starting with the one after next, will have to find some alternative forms of energy.
Gas is a clean fuel. It avoids the problems of both coal and oil and, to that extent, its use should be encouraged. It is beyond argument that burning fossil fuels causes major problems to the environment.
As I reminded your Lordships in the debate on cleaner coal last year, a United States Senate Committee on air quality reported as long ago as 1975 that every coal-burning plant produces 25 deaths and 60,000 cases of respiratory disease as a result of the pollutants it emits, and that is quite apart from the property and environmental damage that those pollutants cause.
Almost four years ago, the Minister for Science and Technology told the other place that the Government support the development of clean coal technology. But by the following year the United Kingdom's leading
198
share in this technology in the world market had fallen from 12.5 per cent to 11 per cent. When the Government came to power, they said that they would provide £60 million for research into this field.
In November 2000, the Minister for Competitiveness in Europe told another place:
"We are conducting an analysis [into cleaner coal] and will do so in even more detail as we proceed with examining the technology".—[Official Report, Commons, 22/11/00; col. 405 ]
Without engaging in a similar piece of waffle, perhaps the Minister will tell us precisely what the Government are doing and what incentives they are providing for this vital project, which, if successful—and before the coal-mining industry is lost for ever—will provide a great deal of energy independence to the United Kingdom.
On the subject of abating carbon emissions, the PIU also stated in its report:
"There would be no sense for the UK to incur large abatement costs, harming its international competitiveness, if other countries were not doing the same".
If that is truly the Government's policy, it not only negates their claim of supporting cleaner coal research; it means that they cannot complain about the United States' deplorable renunciation of the Kyoto agreement.
Renewable sources of energy are a vital topic in any debate about the independence of this country's energy supplies. Unfortunately, the ability of the United Kingdom to establish these resources is severely limited, for several reasons. First, we do not have the climate to enable solar cells to be used with any degree of reliability. We do not have the physical geography that would enable us to obtain substantial supplies from hydro-electricity—such as those available to Switzerland and France. Wind, wave and tidal sources, even where technically feasible, are mostly best sited in Scotland, far from areas of dense population, which causes problems in the economics of getting the resultant supplies to the consumer. There are parts of the United Kingdom where wind farms could be sited, but, as in Scotland, Yorkshire people do not want projects like these near their home or in their local beauty spots.
Nevertheless, apart from the political and technical difficulties involved, the Government have to support the development of a substantial percentage of our energy needs from renewable sources as part of the process of achieving a degree of independence o f foreign supplies. That includes resolving the problem that, in the short term, renewable sources are more expensive and less economic than simply burning large quantities of a rapidly diminishing natural resource. The extra costs of conservation by using renewable' sources has to be regarded as an investment for the future benefit of our descendants. I was interested to see that the noble Lord, Lord Wilson of Tillyorn, majored on this particular source of energy.
Will the Minister tell the House what resources the Government are making available to encourage research and development in this vital field—in actual cash subsidies, the procurement of funds from the EC, or tax incentives?

199
All I know about the Government's plans regarding renewable energy sources is what the President of the Board of Trade said to the other place on 28th June 1998. Perhaps I may quote her remarks:
"I am sure that he will be gratified to learn that we already have an application to build a suitable station, which we shall, of course, be considering with interest".—[Official Report, Commons, 25/6/98; col. 1175.]
Perhaps I have missed something amidst the snowstorm of paper that passes over my desk every day, but I should be glad if the Minister could tell us the result of that four-year exercise in consideration.
That brings me to the all-important topic of nuclear energy. I was interested to hear what the noble Baroness, Lady Cohen of Pimlico, had to say on the subject. Fuel supplies are abundant and secure. They come from Canada and Australia, which are stable and friendly countries. The volume of supplies is reliable and continuous and can be assured by the retention of strategic reserves, and only about 250 million tonnes per annum would meet an appreciable proportion of the United Kingdom's energy needs.
I accept that many people have sincere reservations about the use of nuclear fuel and nuclear power stations. With no disrespect to them, a great part of those fears are unfounded and are caused in some cases by ignorance and perhaps even by deliberate misinformation from the less responsible elements in the ecology lobby. Again, I was interested to hear the points made so well by the noble Baroness, Lady Cohen of Pimlico.
In saying that in the past, I have had two well-publicised incidents quoted at me; namely, the accidents at Three Mile Island and Chernobyl. Without going into detail, I believe that modern reactors are not prone to such disasters. Despite dramatic demonstrations by pressure groups, I believe that this type of energy is as safe as any other. I find it surprising that those who campaign against nuclear fuel are often the very same people who campaign against global warming and acid rain, both of which are caused by fossil fuels. An average coal-burning power station produces about a quarter of a tonne of ash in an hour. The waste generated by a nuclear power station in a year would easily fit under a card table and, despite propaganda to the contrary, is technically easy to contain and store safely. The cost of the necessary storage of such waste and the decommissioning of obsolete nuclear stations does add substantially to the cost of nuclear power, and that is unavoidable.
In anticipation of today's debate, the Clerk to your Lordships' Science and Technology Committee sent me a copy of the committee's report on managing radioactive waste dated last November. He highlighted three paragraphs of the report, which concluded:
"the view is often expressed that it would be irresponsible to make further commitments to nuclear power without settling the problem of waste".
200
I was pleased to receive the report in the interests of presenting a balanced argument. However, I believe— I hope that I am right—that the problem of disposal could be, or is already, solvable using methods and technology currently available. But again, the question of waste has to be seen as part of the whole picture as regards nuclear energy.
The additional disposal and decommissioning cost is, of course, spread among the other sources of supply by what is called "pool pricing", which evens out the cost to the consumer irrespective of the source of the supply received.
The important fact that presses on us with ever-increasing urgency is that 50 per cent of Scottish electricity is from nuclear sources and in the rest of the United Kingdom the figure is 25 per cent. However, the existing stations will, sooner rather than later, have to close, and the lost power will have to be replaced. A decision about what types of power station are to replace the existing ones cannot be deferred much longer. It is, therefore, essential that the pros and cons on the use of nuclear energy are carefully considered and that the question of whether or not to use it is finally decided once and for all. It is difficult to see what would happen in Scotland, and what other sources of energy it would have. The Government's coyness about holding a debate on the energy review may simply be due to the fact that they have not arrived at a conclusion, and they may he concerned about their Back-Benchers in another place. However, the debate must come to a conclusion.
Our debate today does not relate directly to the ecological aspects of energy use, although the topic is inescapable. What solution is offered by the Government in their PI U report? I quote:
"The Government should create a new cost-cutting Sustainable Energy Policy Unit to draw together all dimensions of energy policy in the UK".
It seems to me that the Government are simply intending to set up yet another quango.
In conclusion, perhaps I may make five points. First, a robust consensus on energy must be taken on the facts—for example, on climate change and on reliable energy projections and forecasts. Secondly, there is a compelling importance to supporting and planning ahead the development of renewable sources, especially for the United Kingdom, in view of the potential depletion of gas and oil supplies available to the United Kingdom within the next 20 to 50 years. Thirdly, current political short-term considerations and loyalties should not cloud the necessity of planning for the long-term needs relating to climate change, biodiversity and the use of all available resources. Fourthly, the Government must do more to gain the support of the public for the needs of conservation of supplies by symbolic exercises in the use of energy-efficient public buildings. I note what the noble Lord, Lord Cooke, said about his involvement in making energy-saving houses. The use of low or zero-emission vehicles is also important. Fifthly, the issue of nuclear energy must be resolved. New power stations take time to design, build and to bring on stream. Time is marching on and a decision has to be

201
made before there is a breakdown in supply and we suffer major power cuts of the sort that recently paralysed California.
The responsibility for providing resources and tax for research and development rests with the Government. The responsibility for leading the world and Europe by example rests with the Government. The responsibility for putting the United Kingdom's present and future energy needs first rests with the Government. We currently import about 50 per cent of our energy needs. As many noble Lords have pointed out, within the next 20 years that could rise to 70 per cent. I look forward to hearing from the Minister how the Government intend to meet their responsibilities and reduce the UK's potential dependence on imports.
7.51 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the Government welcome the committee's thorough and comprehensive examination of the issues arising from the Green Paper, under the chairmanship of the noble Lord, Lord Brooke. The events of 11th September and the recent escalation of tension in the Middle East have brought the issues relating to the security of supply into sharper focus. However, the core issues remain fundamentally the same. The UK and the EU are facing increasing energy dependence. I agree with the noble Lord, Lord Brooke, that we should be concerned about that. However, there is no single simple solution or silver bullet. We need to move forward on a number of fronts if this country is to achieve the energy security that we must have.
The committee identified a wide range of important issues, on all of which the Government are broadly in agreement. I shall put my remarks in the context of six of those: liberalisation, nuclear power, coal, renewables, energy efficiency and research and development.
I very much agree with the noble Lord, Lord Brooke, that we should be concerned with risk management rather than with self-sufficiency. To respond to the noble Lord, Lord Ezra, a belief in risk management does not mean that one should not take steps for mitigation. The argument is between risk management and some kind of central planning. The most obvious aspect of the energy scene is the simple impossibility of planning for the future, because one has no idea what the sources of supply or their costs will be.
The DTI was recently considering whether we should go on supporting the world programme on fusion energy. We had a helpful contribution from the economists, who said that they could tell us the answer if we could tell them what the cost of fusion energy would be in 50 years, what the cost of the other energy sources would be and what the demand would be. We cannot make that prediction six months ahead, let alone 50 years. If we could make the prediction 50 years ahead, we would not need economists to tell us the right answer.
202
Flexibility is one of the key issues in energy. That flexibility comes with a process of liberalisation, which is the most important of the issues. The UK's liberalised energy markets are widely seen as a success. We see market systems as central to future energy policy domestically and internationally.
In response to the noble Baroness, Lady Miller, the option of self-sufficiency is not a possibility in any of the scenarios. In formulating any energy policy, the three considerations of energy security, cost and environmental objectives must all be borne in mind. Self-sufficiency is not possible if you are trying to meet all three of those.
We firmly agree with the Select Committee's views on the link between a fully liberalised, integrated, competitive EU energy market and security of supply. However, I do not agree with the noble Lord, Lord Brooke, that no progress was made at Barcelona. The conclusions at the recent Barcelona summit gave a welcome push towards liberalisation of the EU's electricity and gas markets and set out the key principles needed for effective competition: network separation, published tariffs, a regulatory authority in each member state and cross-border trading mechanisms. It was also agreed that industrial and commercial customers must be able to choose their suppliers by 2004 and that agreement should be reached by spring 2003 on further measures —in other words, the opening up of the domestic sector.
However, in answer to the noble Lord, Lord Brooke, I cannot say precisely when there will be a regulatory authority in Germany. There is still much to be done on that front, but at least we are now moving in the right direction.
As the committee noted, liberalisation is not in itself sufficient for an effective single EU energy market. Key missing infrastructure links need addressing. There was progress on that, too, at Barcelona, with agreement that the revised trans-European network—TEN—energy guidelines be adopted by December 2002. By making financial assistance available for important projects where the market cannot deliver on its own, this will help the development of a well connected energy infrastructure throughout the EU.
The importance of liberalisation for security of supply applies also to countries outside the EU, particularly since, as the committee noted, the sources on which we have become dependent are uncertain. For example, the noble Baroness, Lady Miller, sees the EU's dependency on Russian gas as a cause for alarm. We do not see it that way. Russia has proved a reliable supplier and needs gas revenue as much as the EU needs her gas. Russia also needs foreign investment to realise her export potential.
At the same time, it is important that the European Commission continues to press for economic liberalisation, competitive market conditions and a stable investment climate in all supplier countries. Negotiations in the World Trade Organisation, the International Energy Agency and the Energy Charter Treaty provide the means to do so. I very much agree with the noble Lord, Lord Shutt, that diplomacy has a key part to play in that aspect.

203
There are various sources of supply. Diverse sources of energy are no less important for security than diverse countries of supply. I agree with the noble Baroness, Lady Cohen, that we need to think hard about the future of nuclear power. It will clearly be very difficult to achieve our environmental goals without nuclear power. If we ran down the 25 per cent of our energy supply that comes from nuclear power, it would be very difficult to replace it with renewables. That is why the Government are launching a public consultation on the PIU recommendations, which will lead to a White Paper later this year.
It has always seemed to me that one of the great values of the PIU report was to get the facts on the table about the energy situation so that there can be a major public debate. The PIU report was essentially independent, which was one of its great values. It recommended that the Government take positive steps to keep the nuclear option open and to stimulate open and transparent debate on waste and other areas of nuclear policy. Nuclear stations will continue to contribute to the UK's energy requirements, provided they do so to the high safety and environmental standards currently observed.
The Government already support research into innovative reactor systems for the longer term which could provide competitively priced electricity supplies while addressing the public concerns of safety, waste and proliferation. The noble Lord, Lord Ezra, raised the issue of radioactive waste. The Government's September 2001 consultation paper Managing Radioactive Waste Safely seeks views on the management of radioactive waste over the longer term and ways of ensuring public confidence in the decisions to be taken. I think that the sector is also increasingly seen as a major subject for R and D. If we can apply R and D to it and come up with solutions, the overall nuclear power issue will be transformed.
In the European Union context, it is for member states to decide whether nuclear generation should be part of their fuel mix. However, we strongly support the Green Paper's assertion that nuclear energy makes a major contribution to security of supply and greenhouse gas emission reduction.
The Government agree that coal has a future in helping to secure energy supplies. Its advantages include the geopolitical diversity of supply sources, the ease with which it can be stockpiled, and the flexibility of coal-fired generation in meeting peak demand or covering for supply difficulties in other fuels. Although there are serious environmental considerations, those issues can, as the noble Lord, Lord Brooke, said, be tackled. Nevertheless, if we want to continue using significant amounts of coal in electricity generation, we must adopt technological advances to address the remaining potential environmental impacts.
The noble Lord, Lord Ezra, mentioned the need for a clean coal generation demonstration plant in the United Kingdom. Cleaner coal technologies are well established in larger plants and we do not need further
204
development in that regard. However, in answer to the noble Baroness, Lady Miller, the Department of Trade and Industry is broadening its R and D programme to enable it to support small-scale cleaner-coal technology demonstration activities and to allow it to cover technical and economic studies in carbon capture and storage. The department will also encourage research and development teams to look for sources of European support for that work.
The Government believe that renewables have an important contribution to make both to energy security and to emissions reduction. At the same time, however, we recognise that contributions from other sources will be needed. Renewables will play an increasingly important role in our energy use, but their future contribution will be even harder to quantify than that for other energy forms. We have to push very hard on the issue on a number of different fronts. However, I agree with the noble Lord, Lord Wilson, that we must be realistic about what can be achieved. Nevertheless, the situation is not static and the cost of renewables is, as one would expect, declining under the impact of scale increases and the input of R and D.
I also tell the noble Lord, Lord Wilson, that the United Kingdom's slowness in developing a wind industry is in no way due to an insufficient quantity or quality of wind. The United Kingdom is actually very well placed in terms of wind. However, he was quite right in his comments. In a recent report on energy research, the Chief Scientific Adviser has highlighted wave and tidal power as critical research areas in which we can expect a step change in performance. The main point on hydro-electric power is that we are already using almost all of our capacity. Consequently, the sector will not be able to contribute a great deal more in future. The sector also contributes a very high proportion of what is described as renewable energy, in some senses making the position look more optimistic than it is.
We are putting a lot of money into renewables by means of a series of mechanisms including the Carbon Trust. We have also recently increased the money provided through the Sixth Framework Programme from 600 million euros to 810 million euros. That is a substantial sum for research.
I heard the various points on taxation issues made by the noble Earl, Lord Mar and Kellie. However, he should appreciate that, as important as those sources are, none of them—particularly waste cooking oil—will make a huge dent in this major problem. In developing renewable energy, it is necessary to focus on a few significant issues that will have an impact on the national scene.
The Government note the committee's comment that energy efficiency will not necessarily lead to greater security of supply. Nevertheless, energy efficiency does bring huge environmental benefits. It is also important to realise that energy efficiency has increased substantially in recent years. Since 1970, the UK economy has grown by more than 90 per cent, but energy consumption by only 10 per cent. We are doing quite a bit on the issue although there is more to be

205
done in the domestic sector. The Government's new energy efficiency commitment started at the beginning of this month and will require energy suppliers to meet targets for improving energy efficiency by offering help and advice to domestic consumers. It will focus particularly on low-income customers.
Research and development is another key area, and the Chief Scientific Adviser has just conducted a review of all our energy R and D activity. International data show that UK government spending on energy research, development and demonstration declined dramatically from the mid-1980s to the mid-1990s such that spending in 1995 was roughly one tenth of that in 1984. We are reversing the situation, and the Chief Scientific Adviser's report suggested that we should focus on the six key spheres—sub-carbon sequestration, energy efficiency, hydrogen, nuclear, solar voltaics and wave and tidal power—in which a step change is most likely.
The noble Lord, Lord Brooke, asked about the joint committee on security of energy supplies and when its report will be available. I can confirm that the committee, working under the auspices of the DTI and Ofgem, is examining issues such as the future adequacy of our infrastructure including our gas import infrastructure. Although I cannot make a specific commitment, I hope and expect that the committee's first report will be published soon, within about the next month.
The noble Lord, Lord Ezra, drew attention to the potential contribution of small-scale electricity generation including combined heat and power. The Government have been very active in this sector. Ofgem has been considering the impact of NETA on embedded generation, and, as the noble Lord acknowledged, my right honourable friend the Chancellor proposes to exempt good-quality CHP from the climate change levy subject to EU state aids approval. The noble Lord also raised the key issue of who is responsible for ensuring a long-term electricity supply. Responsibility lies firmly with Ofgem, which is responsible for protecting the interests of consumers, including current and future consumers. That duty also includes ensuring appropriate conditions for market-related arrangements to safeguard long-term electricity and gas supplies. There was also a question about when the White Paper will be produced. I can only say that it will be produced towards the end of the year.
I have attempted to cover the key issues identified in the Committee's valuable report. We are broadly in agreement with the Committee's views and appreciate its useful contribution to what must be one of the most important debates in this country. The Committee has produced a very helpful report which will be extremely productive in furthering an informed public debate on these issues. We need such a debate so that people from all types of background can express their concerns. There are no simple solutions, but the Government welcome the debate. The United Kingdom's energy policy will have to continue to strike a balance
206
between the often conflicting priorities of energy security, environmental protection and consumer interests.
8.10 p.m.
Lord Brooke of Alverthorpe: My Lords, once again we have had an interesting debate on a report of the European Union Committee. I am grateful to all noble Lords who contributed to it. I am also grateful to the Minister for what I hope everyone will agree was a full response to the points that were made. As he said at the beginning of his response, there is not that much between what we said and the Government's response.
However, I ask the Minister to reconsider our recommendation on one matter and to reconsider my remarks in opening the debate. I refer to Russia. There is no question that Russia has delivered so far and appears to be able to deliver in the near to middle term. However, we have expressed concern about the longer term, 20 to 25 years ahead, and about the dangers that we foresee may arise. I ask the Minister to reflect on our comments on that issue as his response appeared—to put it kindly—somewhat complacent.
I trust that all the contributions this evening and those in our written submission will help in the development of energy policy and the security of energy at EU level and in particular in the UK. We look forward to the debates which will take place later this year on a whole variety of topics concerning energy policy. We look forward even more to some tough decisions being taken on some of the important issues we pointed up in our report.
On Question, Motion agreed to.

European Arrest Warrant: EUC Report
8.12 p.m.
Lord Scott of Foscoterose to move, That this House takes note of the report of the European Union Committee on the European Arrest Warrant (16th Report, HL Paper 89).
The noble and learned Lord said: My Lords, your Lordships debated the European arrest warrant on 19th November last year. Since that debate took place a number of changes to the proposed framework decision produced in Brussels have been made. Some of the concerns that your Lordships voiced in the previous debate have been met but others, I am afraid, remain. On those that remain representations have been made to government in letters from my noble friend Lord Brabazon. However, I doubt whether the Select Committee can carry the scrutiny process any further. I think that we have reached the position in our correspondence with the Government where we have made clear our concerns. The Government have responded and this is, therefore, an appropriate time for your Lordships to review the position that has been reached.
I hope that I may say a little about the timetable regarding the European arrest warrant. The proposal is that, assuming all the member states have agreed to the proposal, the arrest warrant measures will become

207
effective as from 1st January 2004. The Government have made clear that before that can happen primary legislation authorising the arrest warrant provisions will be necessary in this country. There are, however, three member states besides ourselves which still have scrutiny reservations regarding the proposals. They are: Denmark, the Netherlands and Sweden. In Sweden in particular, if the media reports I have seen are accurate, it appears that strong parliamentary opposition has been expressed. Since, as I have said, this is an area where unanimity is necessary, it is perhaps possible that the proposed framework decision may still be some way off having binding effect.
But it appears also that the Government have agreed with a group of member states—I believe five others—on an early introduction as between ourselves of the arrest warrant provisions. Of course, so far as that is concerned, the Government may agree on a treaty basis with other member states whatever they think it right to agree. The reports I have seen indicate that the original date proposed for this mini-implementation, so to speak, of the arrest warrant provisions was to be the beginning of 2003. But primary legislation is needed and the legislative programme is apparently congested. As I understand it, it is now not thought that the stage will be set for implementation between the United Kingdom and the other five until later in 2003. That, as I understand it, remains the position. Perhaps the Minister will be able to clarify the position for us in due course this evening. It is a matter of some comment, although not perhaps a matter to be gone into in any detail this evening, that the Government have agreed to implement the arrest warrant provisions with the five other member states in question among themselves at a time when the proposals are still held under scrutiny reserve by Parliament.
I now turn to the substance of the proposals. There are one or two matters of particular concern that I wish on this occasion to draw to your Lordships' attention. They are matters to which attention was drawn in the course of the previous debate. The first of these relates to human rights. In a number of letters to government Ministers the Select Committee has expressed concern about the absence from the arrest warrant proposals of an article that expressly allows human rights objections to extradition pursuant to an arrest warrant to be taken before the judicial authority in this country, the Bow Street magistrate. The human rights in question are likely to be Article 5 rights—the right to liberty—and Article 6 rights—the right to a fair trial. The sort of points that might engage complaints about infringement of those articles would include, for example, excessive delay before a trial could take place while the individual was held; conditions of detention pending a trial; or a perceived lack of independence of the judiciary of the country concerned in relation to the particular charge that the individual faced. There might be others. Those are simply examples.
208
Throughout the discussion on the arrest warrant proposals the Government have consistently made clear that in their view if objective evidence establishing a reasonable fear that human rights infringements might take place if the extradition were to proceed were placed before the Bow Street magistrate, he would be entitled to refuse to execute the arrest warrant. That is in my respectful opinion an extremely comforting assurance. But the framework decision does not say so. The framework decision recites, in Recitals 12 and 12a, a number of human rights that might relate to an extradition decision and, in Article 1.3, states:
"This Framework Decision shall not have the effect of amending the obligation to respect fundamental rights and fundamental legal principles as enshrined in [the Convention]".
However, I respectfully suggest that this explicit reference does not go far enough. Where there is objective evidence of anticipated human rights infringements, we should not leave it to the individual concerned to litigate his or her point in the member state concerned or, in the last resort, in Strasbourg before the European Court of Human Rights. We should perhaps allow such a person to remain under the protection of our courts. I suggest that the framework decision should expressly so provide.
Then there is the issue of double criminality. As your Lordships will know, the proposed framework decision removes the requirement of double criminality from a specified list of offences. In relation to offences which are not among the specified list—there are 32 listed—the Government have power under the framework decision to waive the requirement of double criminality. That is the Government's power, not the power of the person accused.
In relation to some of the specified offences, where there is broad harmonisation and correspondence of the offence across the Union, there is, in my opinion, no real problem—I refer, for example, to murder, kidnapping and robbery. There is no need to insist on dual criminality in regard to crimes of that character. But for others there is no harmonisation and the description of the specified offence is broad. The question whether the charge against the individual who is sought to be extradited falls within the specified offence is to be answered by the law of the country that is seeking extradition. The specified offences include offences such as racism and xenophobia. Another broad description is swindling. Those are very broad descriptions of offences. We do not know what specific offences other member states might have that they would say, under their law, fitted the description in question.
Indeed, "racism and xenophobia" has very recently received a definition in yet another proposed framework decision, which the sub-committee of which I am chairman currently has under scrutiny. That framework decision is intended to require member states to introduce crimes of racism and

209
xenophobia which will be common across the Union. It is therefore necessary to define racism and xenophobia. It is defined as,
"the belief in race, colour, descent, religion or belief, national or ethnic origin as a factor determining aversion to individuals or groups".
That is contained in Article 3. Article 4 sets out the offences for which the laws of each member state must provide. It defines racism and xenophobia offences as including,
"public dissemination or distribution of tracts, pictures or other material containing expressions of racism or xenophobia".
So distribution of, for example, literature containing expressions of belief in race, colour, national origin and so on as a factor determining aversion to individuals or groups would be a criminal offence, and extradition of a person accused of the offence could be sought under the European arrest warrant. The offence in question would almost certainly cover the distribution of Biggles. It would probably cover the distribution of the Old Testament as well. I do not know what the Government's reaction to that proposal will be—I imagine that it will be a mixture of horror and laughter. But my point for this evening is that if any member state creates offences on those lines—those lines are proposed by the Commission—and prescribes three years' imprisonment as a possible penalty, we in this country would be expected to extradite the accused under a European arrest warrant. I suggest that those categories of offence need to be made much more specific.
I turn to the issue of trials in absentia. In many of the continental jurisdictions—for all I know, in all of them—trials in absentia, with sentences of imprisonment, may take place, notwithstanding the fact that no notice of the trial has been received by the accused. A European arrest warrant may then be issued, in order to bring the convicted person to the member state in question to serve his sentence. On that, the framework decision in Article 5.1 says that if the person convicted has not been summoned in person or informed of the date or place of the hearing, his extradition under the warrant may be subject to a guarantee that he will have the opportunity to lodge an appeal against his conviction.
That, I suggest, is simply not good enough. First, why should there be an appeal when there has not been a proper trial at all? The person concerned should have a guarantee of a retrial, with the ability, as one has at all trials, to cross-examine witnesses. Appeal is simply not enough in such a case and, in my opinion, is inappropriate. The Government, I believe, agree that that is so but, for reasons that I am afraid I do not understand, they are apparently prepared to agree to Article 5 in its present form; that is, lacking a guarantee of a full retrial.
There is a second point regarding trials in absentia. Article 5.1 applies only to people who have not received notice of the date and place of the trial hearing. What about those who have received proper notice but, through no fault of their own, have been unable to be present? An illness, an accident or any unforeseen misfortune might have occurred. Those
210
people, too, surely should be entitled to a full retrial and be able to cross-examine those who have given evidence against them, and so on.
The in absentia trial provision in Article 5.1 is, in my opinion and for both of those reasons, unacceptable. I urge the Minister to look at that provision again.
The Minister of State, Home Office (Lord Rooker): My Lords, I am reluctant to intervene because I want noble Lords to make their speeches. However, I make it clear, for the avoidance of doubt later on, that when we introduce the extradition Bill later this year, we intend to make it explicit in our domestic law that we would not surrender an individual under a European arrest warrant in a conviction in absentia case without a guarantee of a retrial with the defendant having full rights of defence.
Lord Scott of Foscote: My Lords, I am much obliged to the Minister for that very comforting reassurance. I do not see how that is entirely consistent with the terms of the framework decision. However, if we pass legislation of the sort that the Minister described, and if someone proposed that we had not honoured the framework decision, we should, I have no doubt, meet that situation head on.
There is a further problem that I wish to draw to the attention of noble Lords and which I invite the Minister to reconsider. The expressed purpose of a European arrest warrant is declared in Article 1 to be to obtain the extradition of the named person,
"for the purposes of conducting a criminal prosecution or executing a custodial sentence".
That corresponds with our notion of what extradition is for. It is not for the purpose of getting a person for interrogation or for furthering the investigation of the crime and establishing whether a case can be built up. Extradition is, of course, for the purpose of getting back an escaped convict and, so far as trials are concerned, for conducting a prosecution. But the particulars that must accompany the arrest warrant do not have to include any detail of the substance of the case against the accused person. The accused person cannot rely on the absence of any prima facie case shown against him in order to prevent being extradited. Under current—traditional—extradition procedures, a prima facie case has to be shown, but no longer within the European Union. All that will be required will be for the subject to be named, the details of the crime to be given and the "degree of participation" of the accused to be set out in the particulars.
In that regard, too, the Government have made it clear, in evidence given to Sub-Committee E, that it is not their intention that the European arrest warrant should be available to be used to extradite a believed offender in order to interrogate him and build up a case that is sufficient for trial. But under continental procedures, the dividing line between investigation of a crime and the point at which there is enough material for a prosecution is not always easy to draw. The investigation will be under the control of an investigating magistrate—a judicial figure. It is

211
presumably he who authorised the issue of the arrest warrant. There seems to me to be a risk that the extradition of a suspected offender will be sought in order that the investigating magistrate may complete his investigation by interrogating, or authorising the interrogation of, the suspect, rather than for the purpose of a prosecution in respect of which he already has sufficient material to start. There is no machinery proposed for monitoring what happens to the accused in that respect after he arrives in the extraditing member state. It seems to me of some interest that the only other European member state that, like us, has an adversarial criminal justice system, as opposed to an inquisitorial one—that is, Ireland—has made a formal statement, in December, to qualify its agreement to the proposed framework directive. The statement made by Ireland is as follows:
"Ireland shall, in the implementation into domestic legislation of this framework decision, provide that the European Arrest Warrant shall only be executed for the purpose of bringing that person to trial or for the purpose of executing a custodial sentence or detention order".
That mirrors the purposes expressed in Article 1. It seems to me that if such a statement is necessary or desirable in the case of Ireland, it would be for us, too. I would welcome the Minister's reaction to the need for us to make a similar statement.
There are other problems in relation to the proposed framework decision, but I have mentioned those that seem to me to be the most pressing.
The principle underlying the framework decision is that of trust between member states—trust in their respective criminal justice systems. I understand that. There are certainly a number of member states in respect of which trust in their criminal justice systems would have no qualifications and would always be present. No doubt all member states, present and future, will have criminal justice systems which we in this country can trust at least most of the time. But the proposition must be that we can trust all the criminal justice systems of all the member states all the time in order to be content with the extradition proposals envisaged in the European arrest warrant without any further qualification.
The consequences for both the citizens and the non-citizens of this country may be serious. They are entitled to expect protection by our courts and under our laws. We should deprive them of that only if we are completely confident that they no longer need that protection. I beg to move.
Moved, That this House takes note of the Report of the European Union Committee on the European Arrest Warrant (16th Report, HL Paper 89).—(Lord Scott of Foscote.)
8.31 p.m.
Lord Lamont of Lerwick: My Lords, it is, as always, a pleasure to follow the noble and learned Lord, Lord Scott, who has in this debate, as in others, on the arrest warrant illuminated the issues with great authority and clarity. I am not a lawyer and previously have been apprehensive about intervening in debates on this
212
subject but I have somehow been drawn into them successively. I justify that to myself partly on the grounds that the incomprehensions of a non-lawyer may in themselves be illuminating to the lawyers and, secondly, also that possibly the subject is too important to be left entirely to the lawyers alone.
I believe that it is very good that we are having this debate. It is, in a sense, more important than many of the other reports that we receive from EU Select Committees because we are discussing very directly legislation which is about to happen and which affects each and every citizen profoundly. Perhaps I may say that I am slightly surprised that, in the first instance, the Government resisted having this debate. Earlier, when we began to examine the arrest warrant and when matters were presented before the Select Committee, more and more issues which had not been anticipated or identified by the Government kept emerging.
Then, in addition, as the noble and learned Lord, Lord Scott, said, came the announcement by the Home Secretary in February this year that the British Government were intending the European arrest warrant to be operational in early 2003. If that is to happen, there will be very little opportunity for us to discuss the legislation which presumably will come forward in the autumn—that is, the legislation which fills in so many of the details and definitions of the different offences listed Article 2.
The arrest warrant is presented by the Government as a pragmatic development and logical progression whereby Europe will become an area of freedom, security and justice. In the words of the Home Office press release:
"We are sweeping away outdated, inefficient extradition procedures".
It is what Chairman Mao might have called "the next great modernisation".
Unfortunately, these proposals have been received in a number of different countries with strictly modified rapture. Mr Tremonti, the highly respected Italian Finance Minister, said of the European arrest warrant:
"It is a sign that, when it comes to drawing up laws, we are going back to the pre-Enlightenment age".
I believe that in a number of countries parliamentary reserves still apply. I understand that very strong opposition has been expressed in the Swedish Parliament. It would be helpful if the Minister could tell us which countries still have such reserves. My understanding is that that is the case in Sweden, Ireland and Denmark.
I should also be grateful if he could tell us precisely what the position is in relation to Austria and Italy. I understand that, although Austria is signing up to it, surprise, surprise, one looks at the small print and that country has a derogation until it can amend its constitution because its constitution forbids the extradition of nationals. I have also heard that the surrender of the Italian Government to the concept of the European arrest warrant after initial resistance is perhaps not all that it appears to be because the

213
Italians, too, may have to alter their constitution. I believe it is important that we know that so that we are aware of the likelihood of all the countries ratifying.
Of course, it is true that five countries have agreed to the early operation of the European arrest warrant. But, as Stephen Jakobi of Fair Trials Abroad caustically remarked:
"With the exception of Greece, those constitute a roll call of countries that have the most problems in providing basic rights to people who have been arrested".
That was his opinion.
Very fundamental issues are raised in relation to the arrest warrant. A few weeks ago in this country, an Algerian who had been a pilot taking lessons in the United States was the subject of an extradition request from the United States authorities. The courts in this country delayed his extradition pending receipt of evidence to justify his extradition. In the end, that evidence was not provided and the courts let the Algerian go free. I took tremendous pride in the fact that the courts could make that decision despite all the pressure after 11th September. Despite all the demands that terrorists be brought to justice as quickly as possible, I took pride in the fact that, where there was no evidence, a man should go free. Of course, had that occurred several years hence and had that been a request for extradition under the European arrest warrant, the British courts would not have been able to leave that man free in this country.
One tidying up in the present draft which I welcome, and which I believe is different from earlier drafts, is in Article 4(7). That paragraph says that the state can refuse to extradite if the offence has been committed on its own territory. Therefore, I believe and assume that that takes care of the case that I raised earlier which so delighted the noble Lord, Lord Goodhart, but horrified me. It concerned the Editor of the Sun possibly being extraditable for what he might write in his newspaper here. I should be grateful if the Minister would confirm that my understanding is entirely right in that regard.
None the less, what is proposed is a gigantic step forward. I consider that it carries great risks and one is tempted to wonder whether it is entirely wise. Of course, I am all in favour of extraditing criminals, and I am all in favour of criminals elsewhere being extradited back to this country. But what also matters are the rights of the accused.
What I find so extraordinary about this document—we have pages and pages of it—is that the rights of the accused get precious little mention. The Home Office talks about outdated and inefficient extradition procedures. But the rights of the accused are not outdated; they are something for which we must have regard. There is a passing reference to the right of the accused to have the charges against him translated.
I welcome the fact that paragraph 10 of the preamble refers to the possibility that a person will not be removed to the requesting state for extradition if it is unlikely that he will receive a fair trial there. I do not know how much the declaration in the preamble is worth—possibly not very much. However, I believe
214
that much more needs to be guaranteed with regard to the rights of the accused, legal representation, interpretation at all stages of the legal procedures, interpretation for witnesses and the right to bail.
There is then the question of whether there should be Europe-wide statutory limits relating to the conduct of proceedings. It was John Mortimer, QC, a supporter of New Labour, who wrote in a newspaper:
"Would you care to be arrested on the say-so of a Greek or Spanish judge and be pushed oil with no case having been made against you to face trial under a foreign system in another country?".
He pointed out that investigating magistrates—who, as the noble and learned Lord, Lord Scott, said, operate on a different basis, being investigators and prosecutors at the same time—are notorious for keeping people locked up in prison for a long time in the hope of forcing information out of them.
It was that fear which led the distinguished lawyer, the SNP Member of the European Parliament, Sir Neil MacCormick, to suggest that there should be a Europe-wide provision for an end limit to detention similar to the longstanding 110-day provision in Scottish law. But that got nowhere with the European Parliament. It is all very well to say that ultimately there is a right of appeal to Strasbourg, but that could take a long time, possibly years. It seems to me that there should also be a provision for an avenue of national appeal where someone fears that his or her removal will not be fairly judged.
The lack of clarity and certainty in the framework decision, as put forward, is particularly regrettable. The main example is precisely Article 2 where we now have a positive list of so-called offences where double criminality does not apply. As everyone understands, that is not so much a list of offences but a list of types of offences. As the noble and learned Lord, Lord Scott, said, fraud and swindling have different connotations in different jurisdictions. One might say the same also for motor vehicle crime. What on earth does that mean? Even the term "murder" is open to different interpretations, including in certain countries abortion and euthanasia.
We have the famous case of xenophobia. Like the noble and learned Lord, Lord Scott, I have been wondering about that. In Foyles the other day I came across a whole series of books called The Xenophobe's Guide to the Belgians, The Xenophobe's Guide to the French and the xenophobe's guide to this and that country. They were light-hearted books, but will they be entirely legal from now on? I know that when the legislation is put forward there will be attempts to refine what those offences are. But how shall we ensure when we examine this legislation that the way the offences are defined corresponds with how they are defined in other countries?
However, the greatest uncertainty is with the treatment of the concept of speciality. It is speciality that prevents a person from being extradited for one crime and subsequently charged for another. The concept also prevents someone being re-extradited from one country to a third country. It is a necessary protection for people against a system where

215
magistrates may be both the prosecutor and the investigator. As I understood it, at one point the Government were denying that speciality was being set aside. The report clearly states that it is.
The Law Society says that the document allows for the abolition of the speciality rule. Article 22(1) allows member states to opt out of speciality for a whole range of offences, provided there has been a declaration of prior consent. The Law Society has called that "a worrying development". The Law Society, no less, said:
"There is a risk that a person will be transferred on a charge which is then used as a holding charge to allow for the investigation and the bringing of charges for other offences for which the person would not have been arrested".
Surely, that leaves the person in a state of complete uncertainty as to what charges he may face once he has surrendered. It is a denial of basic rights.
As the noble and learned Lord, Lord Scott, pointed out, there is no mechanism for the requested state to monitor the proceedings once extradition has taken place.
I have a detailed point I wish to raise with the Minister which relates to speciality. I refer to the letter which Mr Bob Ainsworth, the Parliamentary Under-Secretary of State, wrote to the noble Lord, Lord Brabazon, and which is quoted on page 10 of the Select Committee report. The paragraph dealing with speciality states that:
"The UK has … indicated that, within the structure of this agreement, we would not intend … to apply the dual criminality test to requests made to us, even where it is required of us. We therefore do not expect speciality to be applied for the prosecution of fugitives within the EU".
I have been unable to understand what that means. I have asked two distinguished lawyers who are in the House at present, and they could not tell me either. I would be grateful if the Minister could enlighten us as to precisely what that means and what is meant by saying that because we are not applying double criminality there will be no infringement of speciality. Does it mean that, because one can be extradited for almost anything under the sun, there is no real risk that one would be extradited for one thing and charged for another? If that is what it means, that is not a very good reply. I cannot believe that that is what it means.
As regards double criminality, what is also regrettably uncertain is that abolition seems to take place in different countries in different ways. It can be done with the positive list for crimes that carry a minimum sentence of three years, a positive list for crimes that carry a minimum sentence of one year, or for all offences—not just those in Article 2.2—carrying a minimum sentence of one year. So, as I understand it, there will be different ways in which double criminality is abolished in different jurisdictions.
Surely, as Justice has recommended, it would be better if there was no possibility of an opt-out of the double criminality beyond the 32 offences listed in Article 2.2. That would prevent extradition warrants
216
being issued in relation to controversial issues such as abortion, euthanasia, freedom of expression or vexed issues such as blasphemy.
The central issue behind the warrant is one which is difficult to deal with, and I was pleased that it was touched on by the noble and learned Lord, Lord Scott. I refer to the question of whether we have sufficient mutual trust in the judicial systems of other member states to justify what has been proposed with the safeguards as they are at present. I am rather pessimistic about that.
Let us consider, first, applicant countries to the European Union. The other day I was in a country which is an applicant for membership of the EU. While I was there a person was arrested and charged with undermining the state because he had released on the Internet details of the Prime Minister's houses. I do not want to go into more detail than that. In many eastern European and central European countries the integrity of the system is highly questionable, to put it mildly. It is naive to think that, having signed the European Convention on Human Rights, that deals with that and naive to think that that will change quickly.
Even with existing members of the European Union one has some anxieties. To quote what Mr Chirac said about French judges or magistrates might not be regarded as convincing. However, Mr Strauss-Kahn, the respected Finance Minister, said:
"In our system [France] you are presumed innocent until declared guilty. The reality is that you are seen as guilty from the moment the judicial system is interested in you".
One may call that political. However, let us consider some other unambiguously liberal voices.
Stephen Jakobi again in Fair Trials Abroad stated that,
"Spain, France, Portugal and Belgium are notorious for holding people without evidence in the hope that some evidence may turn up".
Hugo Young lambasted the warrant in the Guardian. He condemned the "pathetic legal aid", as he called it, given in Italy, Portugal and Spain. He pointed out that in Belgium a suspected paedophile is still on remand after five years. Of course there have been other concerns about the judiciary, the police and paedophilia in Belgium. When I referred to that on one occasion, the noble and learned Lord, Lord Williams, said that it is not the judiciary; it is only the police. I do not regard that as an entirely convincing answer.
The Law Society in measured words said that the,
"Law Society believes the presumption of mutual standards of recognition and compliance with the ECHR is too strongly accepted at the European level".
Therefore, I think that this is a dangerous step. The Government are very good at drawing up paper lists of human rights. But the rights that matter are the ones that exist and have been proven. They should not be given away lightly.
8.51 p.m.
Lord Donaldson of Lymington: My Lords, in view of the opening remarks of the noble Lord, Lord Lamont,

217
perhaps I should apologise for being a lawyer. But it is a fact that just as bishops are professionally against sin, lawyers are professionally against injustice and perhaps have a wider appreciation of where it might arise than those who are not involved or who have not been involved in the law.
I entirely accept the pressing need for a simpler, speedier and more effective extradition system. That is subject to an overriding need for safeguards to ensure the full preservation of the human rights of those who are potentially liable to extradition. That at once raises the question of who is responsible for formulating and enforcing those safeguards. My answer to that is the state within whose borders and subject to whose laws the potential extradite—if that is the right word—happens to be found. So, from our point of view, when other states seek to extradite people from this country—whether or not they are British subjects because they are all owed a duty by the state and they all incidentally owe duties to the state, but that is beside the point—the responsibility must rest with us.
Furthermore, it is not a duty which can be delegated to other nations. The concept that the production by a requesting state of an indication that someone is alleged to have committed a particular offence without any necessary supporting information does not discharge our obligation to safeguard the rights of people in this country.
We all know that in some countries—indeed some European countries—treaty obligations are, in circumstances in which the interests of the state arise, treated as à la carte menus rather than binding obligations. There would be a risk that in some situations that would impinge upon our duty to protect people within this country. It really is not satisfactory to say, "Well, if there is experience that Ruritania, a member of the EU, is not in fact complying with its obligations, the unfortunate person concerned can of course go to Strasbourg, should he live so long". But it would only be after a large number of cases of that kind had come to the notice of our authorities that under the system proposed they would be entitled to say, "Well, we are not satisfied that Ruritania is a safe country to which to extradite someone".
Still less can we treat the EU itself as an overriding sovereign body within whose borders and subject to whose laws we all live and thus pass responsibilities to it, the suggestion being that the right to freedom of movement—incidentally I do not think that it is a duty to move freely—puts the EU in exactly the same position as this country. If the judiciary sought to move someone from England to Wales there would be no possible objection to that course. One would assume that there was some justification for so doing, but there is no jurisdictional objection. I am not sure whether the same is true of Scotland. Scotland is always a problem on these occasions, so I let that pass.
The plain fact is that the EU is not a state. None of us here is a citizen of the EU; we are citizens of states
218
which are members of the EU. That is wholly different. The Law Society in a comment said:
"The principle underlying the changes is that as the member states are part of the EU with its policy of open borders then all residents are effectively EU nationals. As EU nationals the assumption is that there can be no objection to the free movement of criminal suspects/offenders between EU states".
That needs to be rejected wholeheartedly and without any ambiguity or exception.
Then there is the question of reciprocity. I was astonished to read in the minutes of evidence that Mr Ainsworth seemed to think that it would be quite all right to extradite people from this country if in similar circumstances we could apply for the extradition of others to this country. That seems to me to be quite astonishing. On page 10 in the left-hand column, he states:
"Fundamentally we feel there are potentially substantial benefits for British people of lowering the barriers and accepting that with our EU partners, we are not talking about accession states here [EU partners], we are talking about people who are members of the European Union, fully signed up to the ECHR and hopefully increasingly in total compliance with the ECHR".
That in itself is a somewhat surprising statement—"hopefully increasingly in total compliance with the ECHR". He continued:
"There are substantial benefits in accepting that the system of justice and the implementation of justice should take place in a state within which the crime is alleged to have been committed and not double guessed at by putting a preliminary hearing of substance in front of that return".
There is something in that. However, it requires to be looked at rather carefully.
In the right-hand column on the same page he is talking about the generic list of offences. He says that,
"the warrant itself will have to be framed in terms of a specific offence. The offence will have to meet the thresholds and these thresholds will be set against the law in the issuing country. So if a British citizen goes to Germany and breaks the German law in Germany, to the extent it breaches those thresholds he will be extraditable for breaking that law".
So far, so good. But he goes on to state:
"The benefit is that the same happens in reverse, and that German people will not be able to come to this country and break our laws without suffering rapid return to face justice in our country".
That is a form of justice at which the Germans might cavil since it is quite different from their own form of justice. But let that pass. He continues:
"Surely with the numbers of people who are now travelling between us, good law-abiding people as well as the criminal elements, that is the kind of protection the British people actually want".
I very much doubt it. There cannot be many British people thirsting to have Germans extradited to this country. If the provision takes effect, many British people will object strongly to being extradited themselves.
The question of prima facie evidence has been raised. I do not think it necessary in every case, but the Bow Street magistrate ought, in an appropriate case, to be able to seek some degree of reassurance of the evidence. For instance, if identity is challenged, it is

219
often possible for the Bow Street magistrate to enquire of the requesting state what evidence it has that it has named the right person in the warrant.
The Bow Street magistrate should have authority to look into other matters. It is interesting that Section 11 of the Extradition Act 1989, which is described as a statutory version of habeas corpus—although it does not go to the full length of habeas corpus—provides the following.
"Without prejudice to any jurisdiction of the High Court apart from this section, the court shall order the applicant's discharge if it appears to the court it relation to the offence, or each of the offences, in respect of which the applicant's return is sought, that—

(a) by reason of the trivial nature of the offence; or

(b) by reason of the passage of time since he is alleged to have committed it or to have become unlawfully at large, as the case may be"—

I am worried not about his being unlawfully at large but about the time elapsed since he committed the offence, which may make it vastly more difficult for him to defend himself—
"it would, having regard to all the circumstances, be unjust or oppressive to return him".
That provision should not disappear. It may be convenient to reincorporate it in a different form, but we certainly ought not to allow it to disappear.
Indeed, rights of habeas corpus should always be preserved, but this is the second occasion in 18 months when the Government have shown signs of wanting to do without them. I can understand that from their point of view, but it is most unappealing to anyone interested in justice.
There is also the question of health. As far as I can make out, it would not be open to the Bow Street magistrate, if alerted to the point, to say, "I want a medical examination. This chap is said to have Alzheimer's, in which case, if it is in an advanced state, he is not fit to stand trial. I want to know about that". At present, that will be impossible. Of course, the Irish qualification ought to be made.
I have taken too much time already, so I shall just say in conclusion that the report contains valuable contributions on many potential problems. If the Government do not heed them, they are heading for trouble on the primary legislation. For my part, if they do not heed the report, I hope that I shall find myself in a majority in voting down that legislation or amending it.
9.4 p.m.
Lord Stoddart of Swindon: My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Donaldson. He does not need to apologise for being a lawyer. Lawyers, especially of his standing, give great service to this House, another place and the country generally. In any event, they rank in public esteem above journalists and politicians.
I congratulate the Sub-Committee and its chairman, the noble and learned Lord, Lord Scott, on their diligence and tenacity over the European arrest
220
warrant. There is considerable concern, not only in this House but throughout the country, about exactly what will be the effect of the European arrest warrant on ordinary people. There is also worry about the rush to implement it so quickly. I am glad to hear that that process has been slowed down. It is altogether good that we should take our time over any agreement to such a warrant in the first place.
Having listened to the noble and learned Lord, Lord Scott, speak about xenophobia and racism and the European Commission's proposition that we should introduce legislation to define those offences, I am now almost frightened. If such a clause were included in a Bill, I should hope that the House of Commons would not let it pass but that, if it did, this House would certainly not allow it to pass.
It is intolerable that the powers of our courts to resist extradition of British subjects to existing EU countries—and, presumably, to applicant countries, some of which, as the noble Lord, Lord Lamont, noted, have shady human rights backgrounds that would be unacceptable here—are to be severely restricted and the final say of an elected Minister responsible to Parliament removed. Some may think that that is good, but in the matter of removing citizens from this country to another for trial, elected representatives must represent the public. I hope that that proposal can be resisted, even at this stage.
There is no need for a European arrest warrant. There is nothing in it that could not be achieved by bilateral agreement between countries. The delays could certainly be eliminated by such agreements. People in Britain who have been following the issue have yet to be convinced that the European arrest warrant will not put them in danger of being extradited for an offence that was committed not abroad but in this country. We have already heard about newspapers that are published in another country—The Sun, for example. There is no certainty that Mr Yelland, editor of The Sun, would be safe if one of his paper's headlines were to be construed as an offence under that country's laws.
What about someone who writes and publishes in Britain a book or article denying the Holocaust that is then circulated in Germany? Germany, of course, has strict laws about Holocaust denial; it is an offence punishable by a term of three years. They have that offence because they want to assuage their guilt about what happened under the Nazi regime, including the Holocaust and all the other awful things that were done. There is no reason, however, why we should suffer for that as well.
I do not know whether anybody in that category would be safe. I hope that Mr Yelland will read this debate, particularly what the noble and learned Lord, Lord Scott of Foscote, said about racism and xenophobia. He may want to say a few words about it in his newspaper. I feel sure that he would be at great risk. The presumption of innocence will be turned on its head, as the executing authorities will, under the provisions of the framework agreement, have little option but to hand the suspect over, once the European arrest warrant is presented.

221
The legislation is being rushed through on the grounds of the need to combat terrorism. The listing of 32 offences in the agreement means that virtually any significant offence will be caught by the agreement. The protection of dual criminality will, as we have heard, be removed.
We have also heard a great deal about habeas corpus. The Government have given assurances, as has Mr Vitorino, the European Commissioner, to the European Parliament on 6th February, during discussion of an amendment to insert a habeas corpus provision into the agreement. Incidentally, the amendment was defeated. Mr Vitorino claimed that habeas corpus was contained in the legal system of every member state: it most certainly is not. It is not, for example, in the legal framework of Greece, where the 12 plane-spotters were incarcerated. They have now, I am glad to say, been brought to trial. Nor does habeas corpus apply in France, as I understand it. It is not absolutely certain whether or not the European Convention on Human Rights provides the protection of habeas corpus—at least, not to me—and we shall have to await experience until there is certainty.
Those of us who have observed the European scene for a long time know that the European arrest warrant is just another step along the road to a European judicial system. People do not have to believe me; I shall quote what Mr Watson, the rapporteur, said to the European Parliament on 6th February, when it was discussing the European arrest warrant and the amendment on habeas corpus:
"The European Union may allow itself a few moments of satisfaction. These measures represent a major step forward towards the creation of a European judicial space".
"Judicial space" refers to what we have been talking about for a long time; that is, corpus juris. Of course, it has been denied that there is any intention to introduce corpus juris into European law, but here we have it from the rapporteur that the European Union wants to create judicial space. He continued:
"I would like to thank the President-in-Office for reminding us that this judicial space did not start on 11 September last year, although it would be churlish not to recognise that the attacks on New York and Washington on 11 September gave a political momentum which allowed us to knock heads together and overcome certain objections".
Therefore, it admits to taking advantage of those terrible happenings in New York in order to push its idea for a European judicial space. Everyone should take note of that.
That is a telling comment about the European arrest warrant and it is yet another ratchet on the road to the creation of a harmonised judicial system and, of course, towards the European superstate so beloved of people like the German Foreign Minister, Herr Fischer, who believes that nation states should be abolished.
I was most struck by the remarks of the Minister, the noble Lord, Lord Rooker, on 19th November last. He said:
"I know that we are not completely in a federal state, but we are trying to work together with our partners".—[Official Report, 19/11/01; col. 990.]
222
What did he mean by that statement:
"I know that we are not completely in a federal state"?
Did he mean that this particular measure was taking us even further towards a federal state? Perhaps he 'will tell us when he winds up the debate. As far as I can see, we are not completely there, but we are apparently getting there.
I have to tell the noble Lord, Lord Rooker, that this is not about a federal union and he should not misunderstand where we are going. That would be bad enough, but it is really about the creation of a unitary European state; a country called Europe. That is something very different because it is a state controlled from the centre. That is the path along which we are being driven, and the European arrest warrant is just another milestone along that journey. For all those reasons, the warrant should be resisted by all those who treasure individual rights and freedoms and desire democratic self-government through our own tried and tested institutions and want them to continue.
9.17 p.m.
Lord Hunt of Wirral: My Lords, I share the concerns about the European arrest warrant so clearly articulated by the noble and learned Lord, Lord Scott of Foscote. As I had the privilege of serving under his chairmanship, perhaps I may also add how strongly I and the other members of the committee support his views, so well expressed in an outstandingly good speech today.
Perhaps I may add two points. The first relates to judgments in absentia. I was pleased to hear the Minister repeat the Government's assurance that in their forthcoming extradition Bill they would make explicit that a person will not be surrendered in a conviction in absentia case without the guarantee of a retrial. It was good to hear that. However, I still believe that it is most unsatisfactory that the guarantee of a retrial is not set out in the framework decision. I hope that he will reconsider that point and realise that as a consequence there would be the risk of the creation of different standards of justice across the European Union, which would be most unsatisfactory.
Secondly, as regards fundamental rights, we on the committee feel strongly that the framework decision should not be adopted without being amended to make it clear that a national judge can hear argument that to accede to a request for transfer might lead to an infringement of the ECHR rights, particularly under Articles 5 and 6, of the individual concerned. Further, the judge would be entitled to refuse the request on such grounds. The Law Society brief clearly sets out a number of safeguards that I hope the Minister will accept. There must be provision for accepted standards of procedures and common definitions relating to arrest, bail, legal advice and representation through proceedings, disclosure of evidence, and rights of appeal and retrial where tried in absentia. There must be clarification as to the limits and procedures to arrests in pre-charge and ongoing investigations—particularly in view of the erosion of the specialty rule to safeguard ECHR Article 5 rights.

223
There must be agreed the early provision of confidential legal advice and assistance, interpreting and translating services—which should be provided at the state's expense. There are no proposals for systems of accountability. There must be national mechanisms for appeal, to prevent the only accountability being through application to Strasbourg.
It must be the positive, explicit and appealable responsibility of each member state's judiciary to satisfy itself that transfer under any mechanism will not breach the individual's human rights—either because of his or her circumstances or because of ECHR breaches within the criminal justice system in the requesting state. I hope that mechanisms such as consular assistance could include a monitoring role of the implementation of agreed procedural safeguards and minimum standards.
We say all that because we want to ensure that the European arrest warrant becomes another important weapon in the fight against crime—not an opportunity to abuse the human rights of individuals under suspicion, then deny them proper protection of their rights.
9.22 p.m.
Lord Pearson of Rannoch: My Lords, I have the temerity to query something said by the noble and learned Lord, Lord Donaldson, when he commented that there is no such thing as a European citizen and that the EU is not a state at all. Under the Maastricht Treaty, we did become citizens of the European Union—although perhaps in that vague and confusing way in which European plans are always laid. I trust that the Minister agrees that there is on the stocks a plan for the intergovernmental conference in Brussels in 2004, precisely to give the European Union legal personality.
I have asked that of the Government in Written Questions but have been given the brush-off. For the noble and learned Lord, Lord Donaldson, to be right, it would be helpful if the Minister will give a firm assurance this evening that the British Government will veto any attempt to move towards the granting of legal personality to the European Union.
Lord Rooker: My Lords, for the avoidance of doubt, I have absolutely no intention of addressing that question.
Lord Pearson of Rannoch: My Lords, that must cast some doubt on the words of the noble and learned Lord, Lord Donaldson, but it must come out in the wash as we move towards the intergovernmental conference in 2004. It is unhelpful of the Minister to say that. We had from the noble Lord, Lord Stoddart—who follows these matters closely—a clear indication of how this particular arrest warrant fits with the whole European judicial ambition of corpus juris. We already have the European police force, which has immunity collectively and individually against all its actions.
We are clearly moving down that road. We look to the intergovernmental conference to set the debate in a wider context. We have the charter of fundamental
224
rights, which will clearly give the European Union a constitution. We have the army on the way, common foreign and security policies and all the rest of it. For the Minister to say that he is not going to answer as to whether the Government will reveal their views on legal personality is unhelpful. Given the Government's slavish obedience to the wishes of the people in Brussels, I am not surprised.
9.25 p.m.
Lord Goodhart: My Lords, I should start by declaring my interests. I am vice-chairman of the Council of Justice and a trustee of Fair Trials Abroad, both of which organisations have, among other things, submitted evidence to the committee of the noble and learned Lord. I thank the noble and learned Lord and his committee for the report, which is valuable and important. This evening it has led to an interesting, although I have to say somewhat one-sided, debate.
I have few problems with the European arrest warrant as an ideal at which to aim. As crime becomes increasingly international and criminals find it easier to move both themselves and their assets across national borders, so it is increasingly important to make extradition procedures simple, swift and effective. Frankly, the ideal is to make it as simple to enforce in the United Kingdom an arrest warrant issued in another member state as it is to enforce in Scotland a warrant issued in England. Most of the safeguards built into existing procedures are due to lack of trust in the judicial process of other countries. They would be unnecessary if mutual confidence did in fact exist.
In looking at the European arrest warrant, therefore, I think that there are two tests. The first is whether there is anything inherently wrong with the actual framework decision, if one assumes that it is entered into by states which have full confidence in each other's judicial processes. The second is whether that confidence is justified in respect of the member states of the European Union, including the candidate states.
Where trust exists, I see no need for the required country to investigate whether a prima facie case exists. After all, that is immensely expensive and time-wasting because it involves two separate trials—or at least one-and-a-half trials. Where trust exists, I see no need for a speciality rule. Such a rule stipulates that the requiring country cannot try the defendant for any offences other than those for which the defendant has been extradited. That is necessary to protect defendants from any abuse of the extradition procedure by a country getting the defendant back and then charging him with offences for which extradition would have been refused. If we are confident that abuse would not take place, I see no need for the rule.
Where trust exists, I believe that the dual criminality rule can be greatly restricted. People have a duty to observe the laws of the place where they are for the time being, provided that those laws are properly democratic and fair. If people commit breaches of those laws, I do not see why they should be entitled to

225
escape the penalty for those breaches through the refusal of extradition, even if what they have done is not criminal in the required country. If the law they have contravened is oppressive or unjust, or contrary to human rights, then of course dual criminality must he applied and it must be retained for that purpose.
However, to cite a case which has been in the news over the past two days, for myself I would not find it offensive if the law required us to extradite to the USA someone accused in that country of serious breaches of its anti-trust laws, even if a breach of anti-trust law is not a criminal offence in the United Kingdom.
On the first question of the two that I have posited, my criticisms are limited. Of course the inclusion of "racism and xenophobia" in Article 2(2) of the list has attracted a great deal of controversy. I have my doubts whether it would be appropriate to include it. But they are doubts and certainly not convictions. People who go abroad to stir up racial hatred should know what penalties they face and should not use extradition as a shield behind which to hide.
There is, of course, an English crime of incitement to racial hatred, and I believe that what we would see under the general heading of racism and xenophobia in the Article 2(2) list would be broadly the foreign equivalence of that crime. Frankly, I believe that this issue has been exaggerated and I do not entirely agree on that with the noble and learned Lord. Nor is his highly critical view fully reflected in either the first or second reports of the committee. The second report appears to ignore it and the first takes a less controversial view. It is also true that under the present law of the United Kingdom the distribution of racist literature is an offence.
But there is a very important safeguard here. Law which criminalises racist literature or speech is a restriction on freedom of speech and therefore must satisfy the criteria in Article 10 of the European convention. That means, for example, that it must be a restriction which is necessary in a democratic society. Given the form in which the restrictions in Article 10 are expressed in the convention, I do not believe that Mr David Yelland has anything very serious to fear.
However, there are a number of other serious problems with the framework decision and they have been expressed by a number of speakers, particularly by the noble Lord, Lord Hunt of Wirral, with whose comments I am in very close agreement. First, I believe that there should be express provision in the body of the framework decision that extradition can be refused on European convention grounds. The nearest we get to that is Recitals 12 and 12A, which I believe are inadequate.
Secondly, Article 5(1) does not guarantee retrial for a person convicted in absentia but merely gives a right of appeal. That is a very serious defect in the framework decision. Apparently it was the Government's intention that there should be a right of retrial but for some mysterious reason it disappeared. Thirdly, the time limit for the execution of the warrant under Article 17 is 90 days, which is inadequate to allow the appeal process which would be necessary in
226
the requested country in order to provide what I agree is necessary. That is an appeal process in the requested country and not just an appeal to Strasbourg.
Fourthly, the framework decision does not provide for all states to be bound by the jurisdiction of the European Court of Justice, which is desirable in cases where I believe there is a great risk of conflicting interpretations of the framework decision by national courts.
Fifthly, it should be made clear that the European arrest warrant cannot be used to detain suspects for investigation purposes. I recognise that there are a number of very serious defects in the framework decision as it now stands.
I now turn to the second and even more difficult question. Even if one accepts, as I do, that we ought to aim at the objective of the European arrest warrant, can we have sufficient confidence in the judicial process in other member states to justify giving up the traditional safeguards in the extradition process to the extent which the framework decision requires of us? In the case of some member states the answer is yes. It would be wrong to claim that our own procedures are the best in the world. Others may be our equals and in some cases perhaps better than ours, but not all. Italy is notorious for its delays. The system of criminal administration in Belgium is so bad that it has caused a national scandal. Several countries continue to have standards for legal aid which we would regard as significantly too low.
It would have been desirable, as Justice has suggested, to have had an EU framework decision on minimum standards of criminal procedure to go along with the European arrest warrant. Minimum standards of criminal procedure should contain a right to legal representation of the defendant's choice and legal advice at all stages of the proceedings where it is needed, including, of course, the extradition proceedings.
The minimum standard should include a right to legal aid to pay for the necessary representation and advice. There should be a right to an interpreter if the defendant is not fluent in the language in which the proceedings are being conducted. Article 12(2) of the framework decision provides to some extent these rights but not necessarily adequately and it does not guarantee an adequate standard of legal aid.
We need something similar to habeas corpus to ensure that detention has legal justification and that defendants are released from custody where there has been excessive delay in bringing them to trial. An agreement on minimum standards should contain a presumption of the right to bail, an issue for which Fair Trials Abroad has been pressing for a long time. That presumption should extend to people who live outside the country where the proceedings are conducted and should be backed by a system of Euro bail providing for an automatic return of bail absconders. This would remove one of the main problems faced today, which is the tendency of national courts to refuse bail to non-residents because of the difficulty of ensuring their return to face trial

227
If such a framework decision was adopted and observed, I would feel far less concerned about the European arrest warrant. As it stands, it is essential that courts in the United Kingdom which are asked to give effect to the European arrest warrant should be satisfied that standards of fair trial under Articles 5 and 6 of the European convention will be applied in the requiring state. I would not object to a presumption to that effect, but it must at least be a rebuttable presumption.
I accept that allowing courts in the required country to consider standards of procedure in the requiring country could involve significant delay and expense in enforcing the European arrest warrant, but that is a price which has to be paid for ensuring that defendants are not returned automatically to states whose standards do not match those of the European convention. It would also act as a lever in raising standards in states where standards are not yet acceptable.
The adoption of the European arrest warrant has been an example of the flaws in the legislative process of the Council of Ministers. The framework decision has gone through many variations and even now it is not clear that it is in its final version—or, indeed, that the latest version in the Library dated 10th December 2001 is the current version. This is because the process is secret and we do not know the arguments behind the changes or who pressed for them.
Paragraphs 21 to 32 of the report of the House of Commons European Select Committee on the arrest warrant show an extraordinary situation. In this country, and, indeed, almost certainly in any other member state, there would have been far more transparency if the legislation was being passed through our Parliaments. Again because this is a third pillar issue rather than a first pillar issue, the European Parliament has a relatively minor role.
When we get the new extradition Bill in the next Session, we will be faced with either adopting a European arrest warrant without the additional safeguards we believe are needed or reneging on commitments entered into by our Government. Both alternatives are deeply unsatisfactory.
9.40 p.m.
Lord Kingsland: My Lords, first, I should like to congratulate the noble and learned Lord, Lord Scott of Foscote, on a speech which was as perspicacious as it was comprehensive. Having heard the debate, I can say that it would have served equally well in winding it up.
Unlike the noble and learned Lord, I shall not make a speech which covers all the issues. Indeed, I shall address myself to only one of them—the issue which involves the Opposition's central criticism of the Government's conduct of the negotiations with regard to the framework directive. Our central criticism is that the Government failed to achieve incorporation of Articles 5 and 6 of the European Convention on Human Rights into the directive itself.
228
I wonder how seriously the Government tried to do that. I have been looking at a letter printed in the 16th Report from the Select Committee on the European Union, Session 2001–02, dated 26th February 2002. The report contains a letter from Mr Bob Ainsworth MP to my noble friend Lord Brabazon of Tara, in which Mr Ainsworth says the following:
"The Government does not see the need to include in the Framework Decision explicit grounds for refusal on ECHR grounds. A Framework Decision provides a broad commitment which is to be implemented in detail in national law. It will be for the Government to consider whether UK legislation should contain an express reference to refusal on ECHR grounds. It is significant that we believe that the Framework Decision would not prohibit such a reference".
If that is so, is the Minister prepared to give a commitment to your Lordships' House tonight that the Government will include in the forthcoming Bill an explicit guarantee that our courts can apply Article 5 and Article 6 to these proceedings at Bow Street? The Minister has not responded to my question now. He may well respond affirmatively later when he replies to the debate.
Mr Ainsworth continues:
"However, it should be stated that it is not the intention that, as a matter of routine, the Bow Street District Judge should look at the motivation behind the request or the nature of the trial on return. These are extradition proceedings to a fellow EU Member State. Protection for the individual is contained in the domestic incorporation of the ECHR into the requesting state's criminal justice system, not before the District Judge at Bow Street".
So I am forced to the conclusion that the Government's heart may not really be in providing ECHR protection in the requested member state's courts.
But supposing that I am wrong about this, and that when the Bill comes along the Government do everything in their power to ensure that these protections are provided—will that work? Probably not, because somebody is bound to make a complaint to the European Court of Justice about the United Kingdom providing such additional protection to those who come before its courts. Although the framework directive has no direct effect in our legal system, it would be perfectly possible for a complainant to go to the European Commission, which could then bring infraction proceedings against the United Kingdom Government.
As a consequence of those proceedings, the European Court of Justice might well say that the practice reflected in the extradition Act, as it would then be, was illegal, because it was not provided for in the framework directive. The current wording of the framework directive makes no express reference to these ECHR protections. It refers to the EU provisions on fundamental rights, but not expressly to the ECHR protections. The noble and learned Lord, Lord Scott of Foscote, made that point very clearly.
What conclusions can we reach about this sad affair? The first is that your Lordships' House must take early steps to ensure that, in future, draft legislation at European level negotiated exclusively between governments does not get far before your Lordships' House is involved. This legislation was

229
passed in three stages: first by groups of national civil servants meeting in secret; then by the permanent representatives of the European Community meeting in secret; and then by the Council of Ministers meeting in secret. It was only by accident that your Lordships discovered the true content and import of the framework directive in time to debate it.
There is perhaps an even wider issue here. I do not think that my learned friends behind me would ever accuse me of being a Euro-sceptic; but I believe that the European Union is making a serious mistake in extending the terms of the arrest warrant beyond the issue of terrorism. A nation state's criminal law goes deep into its history and traditions, reflecting individual moral values, which often differ widely between nations because the history of the member states of the European Community differ widely. To try to harmonise those matters is deeply dangerous and could provoke a strong adverse reaction from the citizens of this country and from others. I hope that I am wrong about that, but I fear that I shall be proved right.
9.48 p.m.
Lord Rooker: My Lords, I shall do my best to answer some of the questions that have been raised, but I fear that I shall disappoint many noble Lords for reasons that will become obvious. In some ways, the noble Lord, Lord Kingsland, has just given the game away. He asks me to say whether something will be in the Bill, but says that if I say yes it will not work anyway. I cannot satisfy him however I answer. He will have to wait for the Bill to find the answer.
I am very grateful to the noble and learned Lord, Lord Scott of Foscote, for the way in which he introduced the debate. It might be useful to put on the record that we are not inventing extradition. Anyone would think that it did not currently take place. I asked the other clay for the figures to update your Lordships' House since we last debated the subject in November last year. Since then there have been 26 surrenders of fugitives from the United Kingdom to other countries, of which 15 have been to our European partners. Twenty fugitives have been returned to the United Kingdom, of whom 14 were returned by our European partners.
Among those surrendered by the United Kingdom in the intervening period was a case which took almost three years from provisional arrest to the conclusion of surrender. The person in that case was not being surrendered to a third world country with a questionable human rights record but to another EU member state.. Nevertheless, I accept that it is being said explicity in the debate that some EU member states probably have third world legal systems. That was clearly the import of some noble Lords' comments.
One point not made by noble Lords—although it was raised in a question from the noble and learned Lord, Lord Donaldson—is the requirement for prima facie evidence. As I understand it, no EU state is currently required to provide prima facie evidence
230
when seeking extradition from the UK, and it is not being proposed that that should be changed. In fact, no party to the European Convention on Extradition—which includes EU applicant states as well as some others—has to provide prima facie evidence. That is the current EU position.
The noble Lord, Lord Lamont, asked a question to which I think he probably knew the answer. Sometimes it is wise to ask only questions to which one knows the answer; otherwise one might be surprised. I assure him that no one will be extradited because of conduct occurring in the United Kingdom that is not contrary to UK law. I am happy to place that on the record and I hope that it reassures him.
In answering a question from the noble and learned Lord, Lord Scott, I rest on the wording of the framework document. For the avoidance of any doubt, I should add that my copy of the document is dated 10th December. In relation to people giving evidence, we rely on Article 1 of the framework decision—which, in my non-legal way, I do not believe could be clearer. In no way could anyone read Article 1 and infer that someone could be extradited for the purpose of giving evidence as part of an investigation. I do not think that anyone could interpret the article in that way. As there is no ambiguity, we see no need to make the type of statement that has been made in Ireland.
I come to the implementation date, although I shall return in a moment to future events. On 14th February my right honourable friend the Home Secretary joined Ministers from Spain, France, Belgium, Luxembourg and Portugal in announcing their wish. If possible, to operate the European arrest warrant between participating member states within the first three months of 2003. However, I can assure noble Lords that no declaration to that effect has been signed. The United Kingdom's ability to meet that objective will also be entirely dependent on agreement of the framework decision and passage of the extradition Bill by Parliament.
The noble Lord, Lord Lamont, asked which other member states still have parliamentary scrutiny reserves in place. I can confirm that he is correct in stating that, in addition to the United Kingdom, Ireland, Sweden and Denmark still have such reserves. He is also correct in noting that Austria will not be required to surrender its own nationals until at least 1st January 2009 at the latest.
I am extremely grateful for noble Lords' comments. I believe that back in November I responded to two debates on the same day. One concerned the European arrest warrant and the other concerned a matter the nature of which escapes me. In preparing for the two debates I believed that the European arrest warrant debate would be the easier debate. However, I reported back to the Home Office the next day that I had been knocked all around the Chamber. Things have changed, of course, since then, I am pleased to say. I believe that at that time we had just published the emergency anti-terrorism legislation and we intended

231
to legislate on this matter in a certain way. However, we did not do so at the end of the day. That matter greatly annoyed noble Lords.
I address the issue of parliamentary scrutiny, which has been the subject of voluminous correspondence between my ministerial colleagues and the committee and, indeed, myself on occasion although in much less detail. The European arrest warrant is now inextricably tied up with the issue of the review of extradition. I hope that noble Lords will take that on board. We are not dealing with the narrow single issue here. As noble Lords know, the Government set out their thinking on a streamlined extradition system in March 2001. That review was widely circulated and consulted on. The majority who responded supported the review's proposals.
One of the main purposes of the review was a fast-track extradition system between England and the United States. That in the event was overtaken by progress on the framework decision on the European arrest warrant. So far, the Government have deposited three texts and three explanatory memorandums on the draft framework decision. Ministers have appeared before Sub-Committee E of the European Union Select Committee on two occasions and written to the Select Committee five times. We are now engaged, of course, in a second debate on the European arrest warrant. In the other place Ministers have appeared once before the European Scrutiny Committee, have written to the committee five times and have participated in a debate in Standing Committee B. However, that is not the end of the opportunities that are available. That is central to the debate today and one of the reasons I cannot answer all of the detailed questions.
We announced in February that the Government would publish a draft extradition Bill. We shall do so before the Summer Recess. It was pulled out of the programme for this year. I am not announcing anything new. The Government intended to proceed with an extradition Bill in this parliamentary Session. However, the Home Office has three Bills this Session that were not announced in the gracious Speech last year and had to drop at least one criminal justice Bill. It was thought that once the decision was taken to introduce the European arrest warrant in primary legislation, the obvious vehicle for that was the extradition Bill.
As I say, we shall publish a draft extradition Bill, complete with notes on clauses, before the Summer Recess. That in itself will involve a detailed consultation process by which Members of both Houses and those outside who watch our proceedings closely, and are affected by them, will be able to see the Government's full decisions. There are still policy decisions to be taken on these matters. I am not in a position to comment on those policy decisions. That is why I did not respond to the noble Lord, Lord Kingsland. However, all will be revealed in the draft Bill. I asked the other day whether that would be a full draft Bill, not simply a "50 per cent" draft Bill, of which the rest would be filled in later on. I was assured
232
that it would be a full draft Bill, with Notes on Clauses, so that people can see exactly what is proposed. I hope that that makes for a mature debate in this country and an extremely well-informed debate in both Houses of Parliament.
Lord Mayhew of Twysden: My Lords, does the Minister accept that the terms of the extradition Bill will have to be governed by the terms of the framework decision when they are finalised? That is the immediacy of the issue that the committee and noble Lords this evening are pressing. Do the Government accept the necessity of ensuring that the framework decision makes it explicit that the required state shall have the right to question whether ECHR provisions will or will not be met by the requiring state? It is no good saying, "We should wait and see. All will be revealed when the Bill is published, when we can look at the Explanatory Notes". There will have to be consistency with the framework decision; otherwise our own courts, due to the Human Rights Act, will have a duty to strike them down.
Lord Rooker: My Lords, our courts have a duty to operate the Human Rights Act on behalf of our citizens as well. We should not beat about the bush. That is the primacy in this matter. The Human Rights Act is there to defend individual citizens. The courts also have that duty to consider.
I stick to the line that there are still policy decisions to be taken; I am not in a position to announce a series of policy decisions tonight. I am not in any way opposed to any debate in Parliament on any subject; far from it. However, sometimes the timing of debates can be a bit of a problem in the sense that one cannot make all of the announcements that one would wish.
Lord Lamont of Lerwick: My Lords, since it did not involve a policy matter, I wonder whether the Minister might answer the question that I raised.
Lord Rooker: My Lords, I can answer that, in the sense that I shall write to the noble Lord. I have been advised on this. I would not be able to answer his question from the Dispatch Box. I shall put the answer in black and white on paper. I apologise that I cannot answer his question now. The question is too difficult and complicated to answer from the Dispatch Box.
I understand why the noble and learned Lord, Lord Mayhew, pressed me on this matter. I am not in a position to go further than I already have, save in one area. In our first debate, in November, the question that the noble Lord, Lord Goodhart, asked about abortion and related issues gave me the greatest concern because I did not fully understand it. The issue was not clear.
The issue of dual criminality is set out in Article 2(2), but Article 2(4) of the framework decision allows the existing member state to decide whether to apply the dual criminality test. I said in our earlier debate, and we have said since—in correspondence and in the evidence that we have given before committees—that the Government have reflected on whether they should

233
retain the dual criminality test in respect of certain moral issues, such as abortion or homosexuality. While the Government remain committed to the abolition of dual criminality within the European Union, we have come to the view that it would be right to make use of the safeguard that is provided for in Article 2(4) of the framework decision in respect of such conduct. Accordingly, we intend to apply the dual criminality test for non-list offences. I make it absolutely clear that we anticipate that the overwhelming majority of requests will relate to the list in Article 2(2).
However, where we receive a request relating to an offence falling under Article 2(4), the district judge will be required to impose a dual-criminality requirement; in other words, he will need to establish whether the UK Parliament has taken a view as to whether the conduct in question should be considered illegal. If the test is satisfied, the warrant can be executed. If those requests do not pass the test, the district judge must refuse to execute the warrant. All that will be contained in the legislation which will give effect to the European arrest warrant. As I said, the extradition issues go beyond that.
With regard to the issue of racism and xenophobia, I want to help noble Lords as much as I can because it is a thorny subject and one which is often raised. The tabloids love it. That is not a criticism of noble Lords who may raise it, but the way in which the tabloids play it knocks it on the head.
I shall place this on the record for the avoidance of doubt later. A proposal for a Council framework decision on combating racism and xenophobia was published on 28th November and deposited for scrutiny on 17th December last year. The purpose of the framework decision will be to combat racism and xenophobia in the European Union by approximating the laws and regulations of the member states regarding racist and xenophobic offences and facilitating and stimulating co-operation among member states to combat those offences. It will, of course, be subject to the usual parliamentary scrutiny procedures. The types of offence listed in the framework decision go somewhat further than those found in UK statute. The deadline for full implementation of the framework decision is 30th June 2004.
The annex to COPEN 79—that is, the framework decision on the European arrest warrant—states that in order to make the European arrest warrant operational throughout the Union for racism and xenophobia offences, member states should be guided in their definition of such offences by reference to the joint action of 15th July 1996. Once the framework decision on racism and xenophobia has been adopted, this will supersede the joint action of 1996.
I shall put one more question and answer on the record concerning how the Government define the crime of xenophobia as listed in Article 2(2) of the framework decision. If the UK were making an extradition request for offences under the heading of "racism and xenophobia", we would do so in terms
234
of our law on incitement to racial hatred, racially aggravated offences, and racial discrimination under the Race Relations Act. Execution of the warrant would, of course, be subject to the threshold that a sentence of at least 12 months should apply to the offence in the issuing state.
I realise that there will be a good deal of debate about this issue, and rightly so. But it will have to rest on our proposals—that is, the proposals that the Government bring to Parliament. We are not in a position to do so now, towards the end of April, but we shall do so before the Summer Recess. I regret that I cannot be more specific than that in respect of the date, not least because I do not know the date of the Summer Recess. We shall produce the draft Bill which, of course, can, and I have no doubt will, be subject to debate in the country as well as in Parliament, perhaps before we even reach the point of publishing the formal legislation to bring before Parliament.
That said, I am extremely grateful for the work that the committee has done and for the way in which the noble and learned Lord, Lord Scott, introduced the debate.
Lord Pearson of Rannoch: My Lords—
Lord Rooker: My Lords, I shall never be able to answer the noble Lord's question but I shall give him a chance.
Lord Pearson of Rannoch: My Lords, the Minister has been very kind in telling us how the United Kingdom would regard an extradition request for racism and xenophobia. However, he has, I believe, given me no fewer than two Written Answers to the effect that, when a foreign country issues the arrest warrant, the crime of racism and xenophobia, and indeed all the others in the list, will be defined purely by the issuing country.
That leads me to a final question to the noble Lord, both as regards the directive which attempts to define the crime of xenophobia and racism and, more importantly, as regards the framework decision itself. How deeply enmeshed are we in this particular Eurobog in Brussels? When the noble Lord is good enough to publish his draft Bill, what powers will this House and the other place have to change that? Can we change it or are we already committed, and if so to what extent, particularly on the framework decision?
Lord Rooker: My Lords, I am unable to answer he question in a way which would satisfy the noble Lord. The powers of Parliament are to pass or reject the proposals put to it by the Government. In saying that I do not make a point either way. However, that is the only answer I can give. The Government will present a Bill to both Houses. We cannot get Royal Assent to the Bill and operate what would then be an Act unless both Houses agree to the final terms of the legislation, as in the normal parliamentary process.
I realise that to those who take a principled position on anything which contains the word "Europe", that is not a satisfactory answer because they will list, chapter

235
and verse, the things about which they are not happy which Parliament has approved. However, that is where I rest my case. Parliament will have approved it.
Lord Pearson of Rannoch: My Lords, the Minister has not quite answered the question, which was: to what extent are we inevitably committed to this legislation in Brussels and to what extent have the Government already sold the pass? How relevant is what we agree here and send to Her Majesty for signature and so forth? How deeply enmeshed are we in this? Can we change it? Is what we decide in Parliament the end of the matter or are the Government already compromised by decisions taken in Brussels?
Lord Rooker: My Lords, I had sat down. I do not accept the pejorative terms in which the question was asked as regards selling the pass and the Government being compromised. I rest the case on the answer I gave originally. I have now concluded.
Lord Scott of Foscote: My Lords, I am grateful to all noble Lords who have spoken in the debate and who have provided support for the report of Sub-Committee E. I am grateful also to the Minister for the assistance he has given in the response to the points made by your Lordships. There are some points about which I am still troubled and some about which I am still uncertain. I am anxious to see the draft Bill, which we shall have before the summer Recess, to see to what extent the points of principle which have been made in the various speeches tonight have been taken on board by the Government. I was pleased to hear from the Minister that there were points of principle on which the Government have not yet made up their mind. They have had a great deal of material tonight to assist them to do that.
Perhaps I may take a moment to refer to the point raised by the noble Lord, Lord Pearson. The framework decision has not yet become final. The
236
Minister said that besides ourselves, Ireland, Sweden and Denmark still retain scrutiny reservations. According to the document of 10th December at which we have all been looking, COPEN 79, there were scrutiny reservations also from the Netherlands. Perhaps they have relinquished their reservations since then.
Unless the framework decision becomes final, Parliament will have complete freedom to pass whatever amendments to the extradition arrangements with the European Union it chooses. If the framework decision becomes final, as a matter of treaty the Government will be bound to introduce domestic legislation to implement the terms of the decision which will have become final. However, if the legislation introduced by the Government and passed by Parliament in one respect or another appears to contain an inconsistency with the framework decision, it will be the Westminster Act that will govern in this country. What potentially might happen then would be that some other member states might take whatever proceedings are available—I hope not to be asked what they might be—in order to complain of the British Government's failure to produce legislation which corresponds with the framework decision. But we can rely, for the time being at least, on the contents of the Act passed by the Westminster Parliament. Therefore, the assurances that the noble Lord has given about what will be contained in that are of legitimate comfort to us.
I am grateful for the opportunity to have had the report of Sub-Committee E debated today. I am grateful to all noble Lords who have spoken and for their support and to the noble Lord for his response.
On Question, Motion agreed to.

Greenham and Crookham Commons Bill
Returned from the Commons with the amendments agreed to.
House adjourned at fifteen minutes after ten o'clock.

  Trafficking in Human Beings
  Trafficking in Human Beings
  Accident at Nocton
  Accident at Nocton
  Criminal Records Bureau: Registered Bodies
  Criminal Records Bureau: Registered Bodies
  National Asylum Support Service Form 35
  National Asylum Support Service Form 35
  Patents
  Patents
  TRIPs Agreement
  TRIPs Agreement
  Cefn Croes
  Cefn Croes
  Abandoned Cars
  Abandoned Cars
  Consignia
  Consignia
  Local Flora: Patenting
  Local Flora: Patenting
  Bottles and Cans: Deposits
  Bottles and Cans: Deposits
  National Air Traffic Services
  National Air Traffic Services
  Small Business Rate Relief: Funding
  Small Business Rate Relief: Funding
  Airport Passenger Services
  Airport Passenger Services
  Road Congestion
  Road Congestion
  Medical Records
  Medical Records
  Smallpox Vaccine
  Smallpox Vaccine
  Medicines: Safety
  Medicines: Safety
  Nelson, Lancashire: Community Dental Service
  Nelson, Lancashire: Community Dental Service
  Medical Care: Patients Sent Abroad
  Medical Care: Patients Sent Abroad
  Public Sector Broadcasting
  Public Sector Broadcasting
  Government Advertising
  Government Advertising
  Ministerial Cars: GLA Tolls
  Ministerial Cars: GLA Tolls