Sitting of 2 July 2002

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

    Bus Services
    Ms Joan Walley: What action he is taking to improve co-ordination of bus services. [63711]
    The Minister for Transport (Mr. John Spellar): I am encouraging all the stakeholders to work together fruitfully to improve co-ordination of bus services. The Transport Act 2000 provides the framework through local transport plans, bus strategies, ticketing schemes and information strategies.
    Ms Walley: I thank my right hon. Friend for that answer, and I hope that he will make his mark on transport in the new Department. It is important that we consider buses as part of an integrated transport system, but we cannot improve bus services when as many as 50,000 bus journeys are being lost in Stoke-on-Trent, as well as a large number in north Staffordshire. Will he look closely at the Transport Act 1985, which deregulated bus services, and at whether we need a quality contract in that part of north Staffordshire? Will he also look closely at the issue of revenue funding, bearing in mind the report of the social exclusion committee and the Chancellor's current comprehensive spending review?
    Mr. Spellar: My hon. Friend rightly draws attention to the review of funding announced in the Budget. Yesterday, we met the Local Government Association—including the passenger transport executive group—and the bus operators. I am very pleased with the positive work being undertaken between them. There is a very mixed picture across the country, but I take my hon. Friend's points on board. We will have a look at them and try to put them into the discussions, so that they can inform a wider examination. I must also say to her—as I have to a number of colleagues as well as to local authorities and to the bus operators—that there is clearly a diverse picture across the country, and we cannot take
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    the position of one size fits all. We shall look at the points that she has raised, and I thank her for drawing them to our attention.
    Mr. Douglas Hogg: There is clearly scope for improving public transport but, for most people in rural areas, private transport is not only the preferred but the only viable form of transport to and from work, shopping and so on. Bearing that in mind, will the Minister please be careful not to tilt the balance yet further against the rural motorist?
    Mr. Spellar: I was surprised that the right hon. and learned Gentleman uncharacteristically omitted to congratulate us on the rural bus challenge, which has increased substantially the percentage of people in rural areas who have access to bus services. I acknowledge that there are different problems in rural areas, which is one of the reasons why we are considering flexible bus routing in those areas, for example, and greater provision of demand-generated community transport. All those issues are extremely important and are part of the programme. As he rightly says, car journeys form the majority of journeys—in urban as well as rural areas—and are extremely important. We need, and we have, a balanced transport policy, unlike that of the previous Conservative Government, whose extremely unbalanced transport policy was biased against public transport.
    Mr. Graham Stringer: Does my right hon. Friend agree that the competition authorities in this country are often a barrier to improving the co-ordination and integration of bus services? In the north of the Greater Manchester conurbation, First Group almost has a monopoly, resulting in my constituents having to pay 20 per cent. higher bus fares. The competition authorities do not investigate such issues, yet when local authorities want to introduce quality bus partnerships, the competition authorities perversely say that that would be anti-competitive. Does my right hon. Friend agree with me on this? What can he do about it?
    Mr. Spellar: Actually, it is more a question of "What have we done about it?", because we have already held discussions with the Office of Fair Trading. One of the complaints of bus operators and local authorities has been that the provisions of the competition regulations—as interpreted by the OFT—were preventing them from engaging in sensible co-operation in the interests of providing an improved service. The legislation provides for exemptions in those areas. I was pleased that, as a result of the discussions before yesterday's meeting, there has been engagement with the OFT, which is doing away with a number of misconceptions. Many people certainly used to believe that the OFT would take a particular position; in some cases, people did not even bother to ask the OFT what its position was. The dialogue that is now being undertaken shows a more proactive approach by the OFT, which is to be welcomed. That will lead to an improvement in services and in dealing with the kind of problem that my hon. Friend has just outlined.
    Mr. John Baron: Despite the initiatives that the Minister has highlighted, the fact remains that bus passenger usage is still declining in rural areas. Many

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    people believe that the money that has been directed into these areas has been both negligible and badly targeted. What will the Government do to put that right?
    Mr. Spellar: It is a widely differentiated picture. In some areas bus passenger usage is rising, whereas in others it is declining as ownership of motor cars increases, which is also happening in some urban areas. As I said, funding fixed routes may not be the most appropriate mechanism for dealing with this issue. Flexible routes may be more appropriate, and we are considering that capability within the regulations and from the traffic commissioner's viewpoint.
    We are also examining enhanced community transport with a more flexible role. All those schemes have to deal with an inherently difficult situation, but we have redressed that to some extent with the rural bus challenge, which has had an effect in a number of areas. However, I fully accept that there is an outstanding problem.

    Bus Regulation
    Mr. Chris Mullin: If he will consult on the re-regulation of buses; and if he will make a statement. [63712]
    Helen Jackson: What action he is taking to promote better regulation of local public transport. [63713]
    The Minister for Transport (Mr. John Spellar): We do not believe that it would be right to return to the regime that was in place before 1986. It would distract the industry from focusing on improving the provision and quality of services to attract more customers. The Transport Act 2000 gave local authorities various powers to influence provision. We will consider specific changes if necessary to overcome particular problems. For example, we will soon be consulting on proposals to remove obstacles to registering flexibly routed local bus services.
    Mr. Mullin: Is my right hon. Friend aware that bus companies such as Stagecoach and GoAhead Northern, which operate in Sunderland, are becoming increasingly ruthless in their search for profits and increasingly brazen in their demand for public subsidies? They are also abusing their near monopoly position to run small operators off the road. Is he also aware that in the past few weeks in Sunderland they have drastically cut bus services after 6.30 pm and on Sundays, leaving whole communities isolated? Has not the time come to consider re-regulating bus services with a view to having them take into account the public interest as well as their own profits?
    Mr. Spellar: Once again, I say to my hon. Friend that there is a mixed picture across the country, and that has been clear from my discussions with the Local Government Association and the bus operators. When we look into the route changes posted by the bus operators, we see that quite a number are marginal changes to timetables; some are about a reduction in services, as my hon. Friend rightly said, which is a particular problem in areas of social exclusion, especially those on the fringes of conurbations; and others are to do with enhancement.
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    We are working together on those issues, which is precisely why I have asked local authorities and the bus operators to form a joint committee to work their way through this problem to ensure that we maintain a proper network across the bus system, and that we deal with issues of social exclusion. We should also recognise the substantial increase in the cab trade in many areas, which is providing a flexible transport service and may be more appropriate. In some areas it can be funded from the public sector.
    It is a mixed picture, but if my hon. Friend's local authority wants to make representations to the LGA that we can include in these discussions that would be worth while.
    Helen Jackson: Does my right hon. Friend understand that, in places like Sheffield, we remember the time prior to 1986 when buses were sensibly regulated and fares were sensibly organised so that there was integration of fares and services between buses, local trains and trams, if there was a tram? Does he understand how irritated people get when one operator can put its fares up, as First Group did recently, throwing into confusion all the integrated ticketing arrangements that exist between tram and other operators? In Sheffield, we think that a degree more regulation covering both fares and services would do nothing but good.
    Mr. Spellar: As my hon. Friend says, there are considerable arguments for through ticketing and for the integration of ticketing arrangements. One aspect of our discussions with the Office of Fair Trading involved doing away with misconceptions that that can be prevented. We are happy to consider individual cases and to put them into the general examination. The key point is that we want to achieve a modal shift on to buses, always remembering that bus travel represents some 4.3 billion journeys compared with only 2.1 billion by rail. The figure for rail includes the London underground, as well as Sheffield trams.
    Considerable changes in patterns of demand have occurred in many areas. For example, in the north-east there has been a steady demand in bus usage, but that is matched by the region's beginning to approach the levels of car ownership enjoyed by the rest of the country—thanks to the more progressive economic policies of this Government compared with those of the Conservative lot opposite. We have to deal with a complicated picture, but I am more than pleased to look at the details that my hon. Friend described.
    Mr. Steve Webb: My constituents, too, see the bus companies as latter-day highway robbers. Fares are high, services are unreliable and the notion of a quality bus partnership would give rise to a hollow laugh among many of those who use the services. Is it not the case that a lightly and inadequately regulated private monopoly—that is essentially what the bus companies are—will never deliver quality, reliable public services?
    Mr. Spellar: Many areas are experiencing considerable increases in bus usage. For example, West Yorkshire showed a 4 per cent. increase last year and, with a different regime. London showed an increase of some 5 per cent. As regards London, it is interesting that having supported the Mayor, Liberal Democrat Members are now trying to dig him into a hole. That just shows what unreliable allies the Liberals can be. If they are so keen on public transport, I am surprised that they have not managed to sort out a sensible arrangement on the light rail between Bristol and south Gloucestershire.
    Mr. Malcolm Moss: The Minister seems more than happy to become involved in regulating public transport everywhere—that is, everywhere except London. Does he agree with his erstwhile colleague, now the Mayor of London, who said not so long ago,
    "I hate cars. If I ever get any powers again, I'd ban the lot."?
    Does the Minister have any sympathy with the thousands of motorists, bus drivers and taxi drivers in London, who each day face ever-increasing delay and congestion because the Mayor has tinkered with the phasing of traffic lights and the alignment of bus lanes and road junctions to soften up the public for congestion charging? Does the Minister condone what the Mayor is doing and, if not, what is he going to do about the situation?
    Mr. Spellar: One of the matters for which, fortunately, I am not responsible is the Mayor of London. I detect, as I did last week, the considerable enthusiasm for the Mayor that is felt by Opposition Members. However, I have a far longer track record in opposing him, in his previous incarnation as Ken Livingstone, than they do.
    Andy Burnham: It is typical—you wait for ages for a question on bus services and a load come along at once.
    The Minister will be aware that Leigh is the largest town in the country without a railway station, but he may not know that we, too, have lost crucial bus services in recent weeks—one to Leigh infirmary and one to the Westleigh estate. I urge him to press in the spending review for funding to support bus services in areas where there is no other transport provision. In the longer term, does he agree that the solution is to tackle that other great Tory transport folly—bus deregulation?
    Mr. Spellar: We have doubled the moneys going to local authorities through local transport plans. My hon. Friend referred to health facilities, and the social exclusion unit, in its report, expresses concern about access to employment facilities, education facilities and, particularly—following their consolidation—medical facilities. We are keeping a careful eye on these issues right across the country, along with the social exclusion unit, to see how we can get the right balance of public and private transport in various modes to ensure that we have mobility for all.

    Network Rail
    Chris Grayling: If he will make a statement on the accountability of Network Rail. [63714]
    The Secretary of State for Transport (Mr. Alistair Darling): As I set out in my statement last week, Network Rail will be accountable to its members as well as to the rail regulator. Its board and management will be incentivised to meet performance targets and its outputs will be aligned to the Strategic Rail Authority's strategic plan. It will also have obligations under its network licence both to its funders and its customers.
    Chris Grayling: Is it true that the National Audit Office has ruled that Network Rail should be treated as a public sector body?
    Mr. Darling: The position is exactly as I set out when the hon. Gentleman asked the same question last week; nothing has changed. The NAO has said that Network Rail's accounts will appear on the books of the Strategic Rail Authority. That means that the accounts will be transparent and open. Everyone will see where the money is going and how it is being spent; something one could not always say with Railtrack. It seems to be an entirely sensible arrangement, so that we see where the money is going and the benefit coming from it.
    Lawrie Quinn: In view of the great skills shortages in the railway industry, will the Secretary of State spell out exactly what requirement Network Rail will be given to make sure that we make up for the great gaps in the key jobs in technical and other areas that we need to build a railway fit for the 21st century?
    Mr. Darling: My hon. Friend raises an important point. There are skills shortages in engineering across the board, but particularly in transport and the railway industry. The Strategic Rail Authority is concerned about that and is consulting on setting up a national scheme—an academy—to increase the amount of skills available to the industry. As I said to a meeting with the railway industry today, it is important that we as a Government play our part, together with the SRA. It is important also that the industry does more to sell the career opportunities that undoubtedly exist in this important industry.
    Mr. Don Foster: How will Network Rail be held to account if, within a reasonable period, Lord Cullen's recommendations on standards and monitoring of maintenance contractors are not in place? Given that, in his speech today, the Secretary of State said that this issue needed to be sorted out, what is he doing to sort it out and what will he be requiring of Network Rail?
    Mr. Darling: I have met John Armitt, the chief executive of Railtrack, and I have impressed upon him the importance of making sure that there is end-to-end accountability in relation to the operation of contractors. I repeat that it is not the use of contractors that is the problem, because contractors were used in the British Rail days and, indeed, have been used throughout industry. The problem is that although the processes for checking that someone ought to have done something are often in place, in too many cases nobody actually checks whether the job has been done and done safely. I know that John Armitt is concerned about that and, as I said to the industry today, I want to make sure that Network Rail and

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    the other operators are far more firmly focused on the importance of safety and that they make sure that their subcontractors do what they are supposed to do.
    I have said today that, later this month, I shall publish proposals for setting up the rail accident and emergency board that Lord Cullen recommended. I am anxious that we have, for the first time, an independent investigative body that can find out what happens and learn lessons as quickly as possible.
    Mr. Michael Jabez Foster: Will Network Rail become responsible for the decisions of Railtrack, such as the electrification of the Hastings to Ashford line that it had promised?
    Mr. Darling: Network Rail will be responsible for the ownership and maintenance of the track. Under the Transport Act 2000, the Strategic Rail Authority was set up to bring together the railway industry and to provide some coherence in relation to its planning. As I mentioned last week, there are a number of railway projects that the SRA is looking at, with Network Rail and the train operating companies, to make sure that the money that we spend is spent rather more effectively than it is at present.
    Among the problems that are striking from the legacy of Railtrack are not only the massive debts but the fact that there are too many projects for which the costs and the scale were not properly examined, resulting in things falling behind. The advantage of Network Rail is that it is completely focused on maintaining and improving the railway network and is there to carry out the objectives set by the Strategic Rail Authority and to ensure that we have greater coherence in the railway system.
    If my hon. Friend wants to pursue the specific matter of the route to Hastings, along which I travelled last summer, I will be happy to oblige him, but I do not have time to go into the details now.
    Mr. Bernard Jenkin: Does the Secretary of State share my relief that nobody was hurt in the train accident at Lawford in my constituency earlier this week? Does he also share my concern that, had there been a derailment and a passenger train involved, as in a similar accident at Great Heck last year, there could have been fatalities once again? I welcome his announcement that there will be independent rail accident investigation, which I first called for before the Cullen inquiry reported. How many times will he have to make this announcement before it actually goes ahead? Two Queen's Speeches ago, the Government announced that there would be a rail safety Bill, but we are still waiting for it.
    Mr. Darling: As far as I am aware, I have announced proposals to set up the rail accident investigation board only once, and that was this morning. I am glad that the hon. Gentleman welcomed it.
    On the accident that the hon. Gentleman mentioned, fortunately it was possible for one freight train approaching the lorry to stop in time, although unfortunately it was not possible to stop the other approaching freight train. It was indeed lucky that there were not more serious injuries and that the lorry driver was away from his lorry by the time that it happened. I am sure that the industry will learn from this case. On
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    the broader point, we all consider it important to get an independent investigatory service as quickly as we possibly can.
    Mrs. Theresa May: Will the Secretary of State confirm that, for accounting purposes, Network Rail will be treated as a subsidiary of the Strategic Rail Authority?
    Mr. Darling: I do not know whether the hon. Lady is hard of hearing or whether she was not paying attention last week. I have today confirmed what I said in my statement last Thursday, namely, that the National Audit Office has decided that Network Rail's accounts will appear on the books of the Strategic Rail Authority. That means that we can see where the money is going and how it is being spent: something that did not happen under Railtrack, which, as far as I know, she still thinks is a good thing—she must be about the only one in Britain who still does.
    Mrs. May: Protest as the Secretary of State may, the one question that he refuses to answer is whether Network Rail will be treated as a subsidiary of the Strategic Rail Authority. Its business will be included in the SRA's accounts and its £21 billion of funding will be backed by the taxpayer, but still he tries to spin that it is not a Government body—that it is nothing to do with the Government. Meanwhile, not a penny of that £21 billion has been set aside for real improvements to network capacity and hence to services for passengers. The spin continues: £21 billion of taxpayers' money and no real improvements—is that what he calls a fresh start?
    Mr. Darling: I took the trouble to read what the hon. Lady has said over the past few months, and I cannot be the only one who is still none the wiser as to what her policy on the railways actually is. Railtrack could not carry on trading. It had left about £7 billion of debt, it had come to the Government asking for more money, it had asked for a suspension of the regulatory regime and it was asking us to underwrite its share values. No one in their right mind could have thought that that was a viable proposition to keep Railtrack going.
    As I said last week, no matter who took over from Railtrack, it would be necessary to provide the finance to take over its debt, to meet the cost overruns and to ensure that there is money to spend day to day on the railways.
    Yes, the Government have made sure that the Strategic Rail Authority can provide credit facilities, without which there would be no successor to Railtrack. I respectfully suggest to the Conservatives that it is high time that they cared more about future investment in the railways, rather than trying to go over old ground. Frankly, in doing so they expose the bankruptcy of their thinking, and remind the country yet again that it was the Tories who introduced Railtrack and this botched privatisation, which has left so much mess and damage. It is us who are rebuilding and ensuring that new investment is going into the industry.

    Wales and the Border (Franchising)
    Mr. Simon Thomas: If he will make a statement on the progress of the Wales and the border franchising process. [63715]
    The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): The Strategic Rail Authority has invited initial proposals from the companies that were pre-qualified to submit bids for the new Wales and the border franchise. The SRA hopes to have the new franchise in place in early 2003.
    Mr. Thomas: I hope, too, that this time that date will be adhered to. However, will the Under-Secretary take this opportunity to reiterate the evidence that he gave to the Welsh Affairs Committee, in which he acknowledged that, as a franchise area, Wales was short-changed in terms of funding? When can we expect funding for railways in Wales to follow the example of funding for other public services by meeting something like the Barnett proportion? Moreover, when can I expect the improvements that we have demanded for several months to on the railway line to Aberystwyth, at Dyfi junction?
    Mr. Jamieson: I am pleased to say that there has been strong interest in the Wales and the border franchise, and we hope that it will deliver the services that, in our view, the people of Wales deserve.
    As the hon. Gentleman knows, there have been substantial increases in funding for Wales. The rail passenger partnership, developed with local authorities and local people, has delivered 20 per cent. of all funding to Wales—a sum far greater than that given to many other areas.
    Mrs. Jackie Lawrence: There is massive concern in west Wales, particularly in the Fishguard area, about the Fishguard service and the new franchise. It appears that the franchise's passenger service requirements will not even match the standard of the previous franchise. My hon. Friend mentioned the money going into Wales, but will he ensure that the Strategic Rail Authority puts a proper proportion of it into services for west Wales, rather than simply stopping at Cardiff?
    Mr. Jamieson: When the franchise is awarded, it will be for the SRA to ensure that all areas of Wales receive the funding that they wish to receive. We have improved the quality of the franchise, to give the people of Wales what they really want. At the moment, the timetable often includes trains that do not arrive, and which are not being delivered. The people of Wales want a timetable that delivers the trains listed in it, and trains that arrive at the stated times.

    10-Year Transport Plan
    Mr. Geoffrey Clifton-Brown: If he will make a statement on the recommendations in the recent report from the Transport Select Committee relating to the investment programme in the 10-year transport plan. [63716]
    The Secretary of State for Transport (Mr. Alistair Darling): We will respond to the Select Committee report in the normal way. In addition, as I said when I was
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    appointed to this job, 1 am looking at all the Department's policies, and I will keep the House informed of policy developments as and when appropriate.
    Mr. Clifton-Brown: Paragraph 84 of the Select Committee's stingingly critical report on the Government's 10-year plan states:
    "The Committee remains concerned about the lack of clarity surrounding the financing of the rail improvements in the 10 Year Plan…The lack of any detailed implementation plan is a major barrier to improving the railways."
    When can we expect from the Government some interim targets and a defined work programme? Indeed, when will the Government respond to the report, will a revised plan be produced, and will all such matters be smuggled out during the summer recess when Parliament is not sitting?
    Mr. Darling: The report will be tabled in the normal way, when the House is sitting. In times past, particularly under a Conservative Government, funding for the railways—and, indeed, for everything else—was arranged on an annual basis. This Government have, for the first time, made clear the money available for 10 years through public and private sector sources. The Select Committee welcomed the Government's putting in place a 10-year plan as a major step forward for transport planning.
    That gives a degree of certainty that the industry never had in the past.
    On the specific problems that the hon. Gentleman raises and to which the Select Committee refers, now that Railtrack is in the course of being taken out of administration and Network Rail is being put in place, it will be possible to be far clearer about what the individual projects are and how we can deliver improvements year on year. However, I come back to the point that I made to the hon. Member for Maidenhead (Mrs. May). The difference between us and the Tories is that we are putting in place money for investment that was never available under Conservative Governments. The railways are having so much difficulty now because they are suffering from years of underinvestment.
    Clive Efford: I welcome my right hon. Friend's commitment to the railways and investment through the 10-year plan. Although I support schemes such as crossrail and the extension of the East London line, may I draw his attention to south-east London and the wider area, which also need increased capacity on the railways? Upgrading the electricity supply on the North Kent lines in particular would be a very significant improvement, adding capacity, increasing comfort and encouraging more people to use the railways.
    Mr. Darling: I am aware of the problem referred to by my hon. Friend. As he will know, there is a substantial investment programme to introduce new railway carriages. I am also aware of the problems of electricity supply on a number of railway lines south of the river, and the Strategic Rail Authority is working to address them. Again, it comes back to the same point—the problems that we are encountering with the railways could have been foreseen 20 or 30 years ago, and we are paying a very high price for successive Governments' underinvestment.

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    I share my hon. Friend's frustration about crossrail, or what is now the rather inappropriately named Thameslink 2000, considering that we do not have it yet. There is no doubt that the demands on London transport are substantial and are likely to be far greater as more expansion takes place, particularly in the east and the south-east of the city. I am anxious to ensure that we have both the money and workable plans in place. Sadly—I said this a few moments ago but the hon. Member for Maidenhead does not always listen to what I say, so I will repeat it—one of Railtrack's legacies is an appalling lack of planning, which needs to be addressed.
    Mr. Gary Streeter: In their 10-year plan, the Government have high hopes for rural bus services. However, the Secretary of State knows full well, and the Minister for Transport mentioned it earlier, that local councils such as the South Hams district council are prevented from entering into a local arrangement with bus companies and other partners, such as Age Concern, to provide tailor-made, demand-led services for needy people in rural areas. When will the Secretary of State come forward with proposals to remove these unnecessary regulations so that councils such as South Hams can provide the quality bus services that rural people really need?
    Mr. Darling: Listening to the exchanges earlier between right hon. and hon. Members and my right hon. Friend the Minister for Transport brought back memories of the last time I really dealt with buses when, in 1986, I and other people had to pick up the pieces of bus deregulation introduced by the last Conservative Government.
    I am very sympathetic to calls from Members on both sides of the House for greater use of the bus. I believe that we can do an awful lot with bus services that cannot be done with trains or cars, and I want to encourage their greater use. I am aware that some councils can do and have done a lot to improve bus services, rural as well as urban, whereas councils in other areas are not doing so. That is one of the issues that I want to look at over the next few months to see whether we can improve the level of bus provision, not only in rural areas but in those which are not well served under the present system. I believe that bus transport could enable more people to move around than at present. We are not exploiting it enough and should do more about it.
    Mr. Kelvin Hopkins: Does my right hon. Friend agree that the Central Railway scheme could make an enormous contribution to rail freight, provide vital economic links between the north, the midlands and the continent of Europe and make a great contribution to achieving the Government's 10-year transport plan?
    Mr. Darling: As my hon. Friend knows, we want more freight users to use rail services. The Strategic Rail Authority is currently considering this and should provide us with advice and a report later this year, but I will keep my hon. Friend informed.
    Mr. Christopher Chope: The Select Committee in effect condemned the plan as a confidence trick. The previous Secretary of State promised that there would be a revised plan this July. Will a revised plan be
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    published this July? Furthermore, does the Secretary of State have confidence in the present Chairman of the Transport Committee, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), and does he extend that confidence in her to endorsing her continued membership of the RMT?
    Mr. Darling: Happily, the hon. Gentleman's last point lies outside my responsibility. I suspect that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and I share exactly the same view of the hon. Gentleman—we are united on that.
    On what might be described as the hon. Gentleman's more substantial point—the 10-year plan—I made it clear in an earlier reply that I want to look at all aspects of the Department's policies and I am currently doing so. I do not envisage making revisals to the 10-year plan in July. We should build on what we are doing; the 10-year plan has set out an investment strategy that will bring much benefit across the board. What I shall do, however, is to respond to the Select Committee, as I have just said, and over the next few months I shall keep the House informed of the improvements and developments that will be necessary in relation to the plan.
    The 10-year plan is, in essence, an investment strategy and any such strategy must be capable of development and improvement. That is what we intend to do. When the hon. Gentleman next comes to the Dispatch Box, I hope that he will say whether he is prepared to match the investment that we are making or whether the Tories are still committed to cutting it, as they have been suggesting so far.

    Motorway Signs
    Paul Flynn: What proposals he has to increase the number of motorway variable signs. [63717]
    The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): Currently, there are about 880 variable message signs on the English motorway and trunk road network. As part of our commitment to providing motorists with better information about traffic conditions, we plan to increase that number to 1,400 by spring 2005.
    Paul Flynn: Last Friday afternoon, there were two accidents on the M4—one near Reading and one near Swindon. Because there are hardly any variable message signs between the outskirts of London and the Severn crossing, drivers approaching those hold-ups had no advance warning. The Minister will be aware of how distressing it is—especially for young families and the vulnerable elderly—to be stuck in traffic jams with no idea of their likely duration. Can he confirm that the acceleration in the provision of variable message signs that he just mentioned will include that section of the M4?
    Mr. Jamieson: Like my hon. Friend, we, too, are distressed to hear about such jams. We realise that they not only cause people inconvenience, but create a greater road safety risk. Handling traffic after major incidents on motorways is something that we can and will do better during the next few years, especially as the new national traffic control centre comes into being. That will provide motorists with information so that they can, where

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    necessary, take avoiding action. Furthermore, as part of the 10-year plan, the Highways Agency is installing automatic hold-up warning systems on the most congested 30 per cent. of our motorways. They will be in place by 2005. We certainly hope that such measures will help to reduce accidents at the back of queues and, of course, the inconvenience that, as my hon. Friend pointed out, people must have suffered last week on the M4.
    Michael Fabricant: I hope that the national traffic control centre does not use the same computer system as National Air Traffic Services.
    The Minister will be aware of the value of variable speed limits on motorways such as the M25. Associated with them are, of course, speed cameras. Can the Minister confirm that the Government have no plans to introduce speed cameras on the rest of Britain's motorways?
    Mr. Jamieson: I congratulate the hon. Gentleman on sliding from signs to speed cameras. I can assure him that we shall be using the variable signs to give motorists up-to-date information that will help them to take avoiding action where appropriate, especially where traffic is blocking part of the motorway. As Transport Direct unfolds, motorists will also have good-quality information about road conditions before they set out, so that they can decide whether to switch to public transport if appropriate.
    Dr. Brian Iddon: Like my hon. Friend the Member for Newport, West (Paul Flynn), I recognise the value of variable motorway signs. Does my hon. Friend the Minister agree, however, that the confidence in those signs is proportional to the timeliness of the information that they provide? Will he ensure that when that information is out of time it is revised or the signs are switched off?
    Mr. Jamieson: My hon. Friend is absolutely correct. That is why the new national information system will give contemporary information to motorists. There is nothing more frustrating than seeing signs that warn of a lower speed limit or of an incident ahead that does not exist. We will make sure that the new information system gives up-to-date contemporary information that is of genuine help and use to motorists.

    Motorway Improvements
    Mr. James Gray: How much will he spent on motorway improvements in the 10-year plan for transport. [63718]
    The Secretary of State for Transport (Mr. Alistair Darling): Road improvements are important. Some £59 billion has been set aside to be spent on roads, and 55 schemes—including 6 motorway schemes—are currently in the programme of improvements, one of which has been completed.
    Mr. Gray: I am grateful to the Secretary of State for that informative answer. He will know of the proposals of the south west area region multi-modal study, which include substantial work at junction 16 at Wootton Bassett in my constituency. The study cost some £1.5 million, and. I think, a total of some £30 million was paid to
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    Messrs. Halcrow for carrying out these extensive studies. First, will the Secretary of State explain from which budget that £30 million comes? Secondly, will he tell us how much of the SWARMMS report, and of the other similar multi-modal reports elsewhere in England, will be funded? We all suspect that there will be warm words and more studies, but not much action.
    Mr. Darling: The study to which the hon. Gentleman refers is being considered at the moment, and a recommendation will follow shortly. The money in relation to all that work comes from my Department.
    Mrs. Anne Campbell: When my right hon. Friend is considering future investment in motorways, will he examine carefully the balance between spending on motorways and spending on public transport schemes? I am thinking in particular of the proposed project to provide a guided bus between Cambridge and Huntingdon, which could be very effective in taking traffic off motorways and main trunk roads and putting people on public transport.
    Mr. Darling: My hon. Friend raises an important point. It is important to strike the right balance between transport by car—road transport—and public transport, whether guided bus, rail or light rail. I have said on many occasions in the last month that it is important that we invest in both forms of transport. For some people, particularly those living in rural areas, a car is a necessity, and there are other people who need to use their cars to go to work. At the same time, it is important that, where we can encourage people to use public transport, we put in the investment to do so. The scheme to which my hon. Friend refers—the Cambridge to Huntingdon proposal—is one that we will consider, but it is important that we have a balanced approach.

    National Air Traffic Services
    Mr. John Randall: What recent representations he has received with regard to safety issues relating to NATS; and if he will make a statement. [63719]
    The Secretary of State for Transport (Mr. Alistair Darling): I have not received any direct representations. Aviation safety is critical and is the direct responsibility of the Civil Aviation Authority.
    With your permission, Mr. Speaker, it might be appropriate for the House to send its condolences to the families of all those who died in the air crash over Germany last night.
    Mr. Randall: I am sure that all Members agree with the Secretary of State's sentiment.
    Can the Secretary of State tell the House how many systems failures there have been at Swanwick since it went live?
    Mr. Darling: The hon. Gentleman is no doubt referring to the three failures this year. Two of them were in the old computer system at West Drayton, and one was at Swanwick. I visited Swanwick last week, as I know that hon. Members have expressed concern about it. It is striking that the two biggest problems occurred in the old

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    computer system, and there are plans to upgrade and replace it. There was one problem only with the new computer system, and that fault was rectified. On 17 May, at the time of the fault at Swanwick, the situation was compounded by another failure at the control centre in Brussels, which controls slots right across Europe. When one considers the overall picture, one sees that some of the criticism directed against Swanwick is entirely misplaced. A great deal of investment has been put into it, and it is a very good air traffic control centre that will serve this country well in years to come.
    Sandra Osborne: Will my right hon. Friend report on progress on the new Scottish centre at Prestwick and, in his new role, visit Atlantic house in my constituency to address the work force on the future of NATS?
    Mr. Darling: I am very happy to visit my hon. Friend's constituency and hope that something can be arranged over the coming months. The air traffic control system in this country, including the two centres at Swanwick and Prestwick, has received a great deal of investment. As I said to the hon. Member for Uxbridge (Mr. Randall), that is absolutely essential, if not very long overdue. I will be happy to visit the centre at Prestwick as I have already visited the one at Swanwick.

    CABINET OFFICE
    The Minister was asked—

    Civil Service (Ethnic Minorities)
    Mr. Ben Chapman: If he will make a statement on ethnic minority recruitment to the civil service. [63747]
    The Minister of State, Cabinet Office (Mr. Douglas Alexander): Government Departments have delegated responsibility for most recruitment. However, the Government are strongly committed to equality of opportunity and to creating an open and modern civil service that fully reflects the society it serves. Government Departments have set themselves challenging diversity targets for their people at all levels of the service, nationally and regionally. Each year heads of Department account personally to Ministers on their progress and on their future plans.
    Mr. Chapman: Given that the Government have set a doubling target of 3.2 per cent. for the representation of ethnic minorities in the senior civil service by 2005, and accepting for the moment that that is sufficiently ambitious, how near are we to achieving that target? What measures are we taking to recruit people mid-career from both within and without the civil service to fill that deficit?
    Mr. Alexander: I am grateful to my hon. Friend for raising that important point. The senior civil service target is indeed 3.2 per cent. The level at present is 2.4 per cent., which is up from the 1.6 per cent. achieved previously in April. However, further work needs to be undertaken to
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    attract people mid-career and we are looking at schemes to facilitate an exchange between the public and private sectors to achieve exactly that purpose.
    Mr. Henry Bellingham: Does the Minister agree that there is a huge pool of talent within the ethnic minorities in this country, so talk of quotas, targets and positive discrimination is insulting? What the Government should do is reach out to those communities and explain why a career in the civil service is worth while.
    Mr. Alexander: The hon. Gentleman makes an important point and I can tell him exactly what we are doing. In conjunction with the Council of Ethnic Minority Voluntary Sector Organisations, the civil service has piloted seminars to do what he describes in Bristol, Leeds, Birmingham and Reading to raise awareness among regional ethnic minority community leaders of the career opportunities available in a modern civil service.
    Mr. Andrew Dismore: Have the Government any plans to review the citizenship requirements for the civil service? Under present rules, one in six Londoners who are not United Kingdom or Commonwealth citizens are precluded from applying for the job of even the most lowly benefit clerk even if they speak perfect English and have lived here most of their lives. If we are serious about serving the communities we represent, should not we look at reviewing and reforming those requirements so that those Londoners are entitled to serve the people of London?
    Mr. Alexander: I can assure my hon. Friend that we are sincere in wanting to create both a more open and a more modern civil service. On that basis, I will be happy to write to him on the particular point that he raises in relation to London.

    Scottish Executive (Staffing)
    Pete Wishart: What assessment he has made of the staffing requirement in the civil service of the Scottish Executive. [63749]
    Mr. Alexander: Responsibility for staffing levels below senior civil service level is devolved to the Scottish Executive. The Cabinet Office publishes statistics on staffing levels within the civil service and is made aware of significant changes in staffing numbers and the reasons for those changes.
    Pete Wishart: I am grateful to the Minister for that reply. Although I appreciate that the appointment of civil servants is a matter for the Scottish Executive, I am sure he appreciates that the civil service is very much reserved to this House. That might account for the undignified and unseemly spat between the First Minister and the head of the civil service in Scotland about the appointment of some 40 policy analysts in the run-up to the Scottish parliamentary elections next year. Is it the responsibility of this House or the Scottish Parliament to ensure that the appointment of 40 policy analysts is in the public interest and not in the interests of the Labour party in Scotland?
    Mr. Alexander: On the constitutional point raised by the hon. Gentleman, Sir Muir Russell, the permanent secretary of the Scottish Executive, serves Scottish Ministers, as do all civil servants in Scotland. The hon. Gentleman's point is much overblown. Only eight of those 40 policy analyst posts are new; there are 32 vacancies at present. Some of the criticism levelled at us is therefore unfair, and it reflects the desperation of the hon. Gentleman's party rather than reality.
    Sandra Osborne: Is my hon. Friend aware of the hundreds and hundreds of questions, some extremely trivial, tabled by SNP list MSPs, who seem to have nothing much else to do with their time? Does he think that that may account for any increase in the number of civil servants required to answer questions?
    Mr. Alexander: I find myself in wholehearted agreement with my hon. Friend. In anticipation of this issue arising from the question tabled by the hon. Member for North Tayside (Pete Wishart), I looked at the figures and found that there has been a fivefold increase in parliamentary questions since devolution. It was therefore inevitable that there would be an increase in the number of civil servants charged with assisting in the development of answers. The hon. Gentleman's question may be better directed at his colleagues in Holyrood than at this Government.
    Mr. Tim Collins: May I belatedly congratulate the Minister on his thoroughly deserved promotion? Does he stand by the explicit commitments made by the Deputy Prime Minister, not only to members of the civil service for the Scottish Executive but to all civil servants in the United Kingdom, that the Government will shortly introduce a Bill to secure the independence of the civil service?
    Mr. Alexander: I am grateful to the hon. Gentleman for his kind remarks of congratulation, and I commend him for his ability to raise that matter in relation to this parliamentary question. The Government remain committed to civil service legislation, but we have also made clear our priorities, and it is simply not possible to do everything at once. It is vital to reform health and education, as we made clear at the election. The Government welcome all the discussion about the civil service that is taking place. I understand that both the Public Administration Committee and the Committee on Standards in Public Life are carrying out work on this issue, and I, for one, shall be interested in their deliberations as we take this policy forward.

    Delivery Unit
    Brian White: What recent progress has been made by the delivery unit in securing the Government's objectives. [63750]
    Mr. Alexander: The delivery unit continues to be responsible for working in partnership with Departments to ensure that the Government achieve their delivery priorities across the key areas of public service. After the
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    spending review, it will expand its scope to include priorities in other main domestic service delivery departments.
    Brian White: As one of the few people who claim to understand the Cabinet Office's previous organisation chart, may I welcome the changes made by Sir Andrew Turnbull? The delivery unit has worked well because it has been extremely focused, so does the Minister share my concern that the plans to expand its remit may result in its existing work becoming less effective?
    Mr. Alexander: I commend my hon. Friend for his understanding of the previous organogram. I hope that Sir Andrew Turnbull's proposals for structural changes, which were announced recently, will give my hon. Friend confidence that we now have a strategic and focused centre that can drive forward the work on delivery and reform. After the spending review, the delivery unit will take forward its vital work within that structure.
    I make it clear to the House that we see the delivery unit as having a key role in supporting, rather than supplanting, the work of Departments. We are determined to ensure that as it expands its role, it continues to work in support of Secretaries of State and Ministers throughout Whitehall as we advance our agenda for reform and delivery.
    Mr. A. J. Beith: Is it the case that the delivery unit monitors between four and six targets in each of the policy areas of health, education, transport and law and order, selected from the Departments' public service agreements? Will the Minister tell us which particular targets are selected at the moment? Perhaps he could give us examples and put a note in the Library so that we can know what all the targets are and what the future priorities will be.
    Mr. Alexander: I can assure the right hon. Gentleman that the delivery contracts have not been published because they contain no new commitments and do not represent a new list of Government priorities. There have been many other equally important priorities throughout Government, and publication might be wrongly interpreted as suggesting that there was a wholly new set of priorities. The work of the delivery unit reinforces pre-existing work taken forward by the Treasury and individual Departments in advancing the public service agreements, which are, of course, published and available to the right hon. Gentleman.
    Margaret Moran: I welcome my hon. Friend to his position, and I also welcome the radical simplification of the Cabinet Office. When he addresses the delivery unit, will he ensure that it considers the performance of local authorities in delivering our 2005 e-government target? As I am sure he is aware, a number of reports, including those from Socitim and IDeA, express concern that we are not on target to deliver the quality of e-government services necessary to ensure that our constituents are able to access the full range of services to which they are entitled.
    Mr. Alexander: I am grateful to my hon. Friend for those observations. Given my background in the Department of Trade and Industry, I am fully aware of the important work being done on getting services online. I am also aware that some of the most innovative and
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    exciting work has been done at local government level. That is why I, with responsibility for e-transformation, will work closely with colleagues at the newly configured centre to ensure that we learn from what is best in local government and take the opportunity share best practice across the country.

Points of Order
3.30 pm
Mrs. Alice Mahon: On a point of order, Mr. Speaker, of which I have given notice. You will have seen the media reports of the latest bombing blunder committed by the United States in Afghanistan. A group of civilians celebrating a wedding, including women and children, were bombed; dozens have been killed or injured. It is the fifth bombing incident since October that we know of in which the United States has bombed civilians with consequent loss of life.
Anger is growing at a strategy of waging war from 20.000 ft. It is threatening the fragile peace process, alienating many members of the coalition against terrorism, and it is simply a wrong strategy. Has either the Secretary of State for Defence or the Foreign Secretary indicated that they will make a statement on the latest tragedy?
Mr. Speaker:No approach has been made to me by any Minister on that matter.
Mr. Andrew Robathan: On a point of order, Mr. Speaker. In May 2000, the then Parliamentary Commissioner for Standards ruled that a subject that I raised was not a matter for her. It was the Rent Acts (Maximum Fair Rent) Order 1999, issued by the Department of the Environment, Transport and the Regions. It allows the Deputy Prime Minister to benefit now, by up to £15,000, from an order issued from his office. I seek your guidance. What further action can a Member of Parliament take when a Minister changes the rules in a manner that benefits him personally?
Mr. Speaker: I cannot advise the hon. Gentleman on how he can raise such matters. It is up to him to acquire some expertise in that respect. He has raised this matter on several occasions under the terms of a point of order, but I cannot help him.

Committal to Prison in Default of Fines, Local Taxes, Etc. (Abolition)
3.32 pm
Andy King: I beg to move,
That leave be given to bring in a Bill to abolish the penalty of committal to prison in default of payment of community charge, council tax and other local taxes; and for related purposes.
The opportunity to abolish imprisonment for council tax default is provided in the Green Paper "Towards Effective Enforcement" published by the Lord Chancellor last July. It proposes a single piece of bailiff law and a reformed, regulated structure for enforcement. In addition, imprisonment should be abolished for default of fines relating to television licences and parking offences.
The High Court has declared unlawful more than 1,000 of the 5,000-plus cases of people jailed by magistrates courts for local tax default in the 12 years since the poll tax was introduced. It is worrying that none of the relevant Departments knew the number of unlawful imprisonments until they were told by the Zacchaeus 2000 Trust that one of its barrister trustees, Ian Wise, had taken 1,000 such cases through the courts.
One thousand is the minimum number of unlawful imprisonments because there is no legal aid for local tax or fine defaulters in the magistrates courts. The connection between people imprisoned for default of a local fine and a group of concerned lawyers was made by chance. It was not until after the Benham case reached the European Court of Human Rights in 1996 that magistrates were required to call the duty solicitor if they were minded to imprison.
Ilkeston justices jailed George and Doris Smedburg, aged 74 and 80 respectively, for 28 days in February 1994. Mr. Smedburg suffered from severe epilepsy and arthritis. Mrs. Smedburg suffered from asthma and rheumatoid arthritis, and was doubly incontinent and wheelchair-bound. The police, to their credit, refused to execute the arrest warrant. The local authority claimed that the Smedburgs had refused to pay £600. The High Court discovered that they in fact owed only £349, and that the couple had been up to date at the time that the committal warrant was issued.
Dorothy Pittaway, 64 years old, was jailed by Oldbury magistrates court for 14 days in 1994. She was in hospital suffering from tuberculosis, and at the time of arrest weighed only six stone. The police surgeon discharged her from prison into council care. The High Court reduced the sentence to one day and subsequently commuted it entirely following the intervention of her Member of Parliament and a campaign by the Daily Mirror.
In 1996, Barnet justices unlawfully jailed Marjorie Ribbans, an elderly woman with a learning disability and suffering from terminal cancer.
Sarah, a 51-year-old single woman living in Lambeth, receives £53.95 a week in income support. She has a learning disability and suffers from chronic anxiety and panic attacks. Research at the London school of hygiene and tropical medicine suggests that her income should be £84.76 a week if she is to have enough for healthy living. Her doctor in Lambeth writes:
"I am quite clear that were the Bailiffs to proceed with the seizure of her goods, the effect would be catastrophic for her and would seriously compromise her health".

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There is a council tax debt of £468. The bailiffs, who are based in Northampton, blindly threatened Sarah with computer-generated letters. For example, on 9 May 2001, they wrote:
"We have arranged for our bailiff to call at your home this weekend to seize your goods and transport them to auction rooms for sale".
Two days later, Zacchaeus 2000 Trust became involved and Lambeth council withdrew. However, the computer kept running and sent further letters threatening the sale of Sarah's furniture.
News of such imprisonments spreads throughout deprived communities because council enforcement officers and bailiffs threaten vulnerable people, many of whom then borrow from door-to-door lenders—including such household names as Provident finance—at extortionate interest rates, ranging from 100 to 300 per cent. APR.
A seismic fault in current procedures is the absence of any statutory means inquiry by local authorities before they start enforcement. The Inland Revenue knows the means of the income tax payer before it starts its processes, and magistrates enforce fines through means inquiries, but when local authorities are required to attempt distress before they issue a committal warrant, they are often blind to the means of the council tax defaulter.
The committal hearing at the magistrates court is the only part of the enforcement process at which the means of a debtor must be taken into account. Owing to the absence of means inquiries by local authorities before they begin enforcement, bailiffs are sent to collect money from vulnerable people who have little or nothing, and things are made worse by bailiffs adding their costs to the debt. Such debts could and must be dealt with more fairly and efficiently through reductions from wages or benefits according to means.
England and Wales remain the only countries in Europe to continue to jail people for local tax default; Scotland abolished imprisonment for debt in 1987. It is high time that England and Wales did the same. I ask the House to consign the Dickensian practice of sending the poor to debtors' prisons to history once and for all.
Question put and agreed to.
Bill ordered to be brought in by Andy King, Mr. Bill Olner, Mr. Peter Kilfoyle, Mr. Tony Clarke and Mr. Joe Benton.

COMMITTAL TO PRISON IN DEFAULT OF FINES, LOCAL TAXES, ETC. (ABOLITION)
Andy King accordingly presented a Bill to abolish imprisonment for default of payment of community charge, council tax and other local taxes: 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 159].
Opposition Day
[16TH ALLOTTED DAY]

Funded Pensions
Mr. Speaker: We now come to the main business, an Opposition debate on funded pensions. I inform the House that I have imposed a 12-minute limit on Back Benchers' speeches, and have selected the amendment in the name of the Prime Minister.
3.40 pm
Mr. David Willetts: I beg to move,
That this House agrees with the Government's stated aim of increasing from 40 per cent. to 60 per cent. the proportion of pensioners' incomes that comes from the private sector, but condemns the Government for failing to pursue policies which would achieve this objective and instead imposing a massive £5 billion annual tax on pension funds, and for presiding over the lowest savings ratio since records began; notes that fewer than four in ten final salary schemes are now open to new members and is shocked by the Government's complacency in the face of widespread concern about the future of funded pensions: and therefore calls on the Government to cut the burden of regulation on pension funds, reverse the spread of means testing among pensioners, reform annuities and provide better incentives for people to save, so that they can enjoy a prosperous retirement.
I declare my interests, which appear in the Register of Members' Interests.
I welcome the Secretary of State for Work and Pensions to his first debate in his new post. I approach his appointment in a spirit of optimism, and hope that he will use this afternoon's debate as an opportunity to signal a radical shift in the Government's approach to the crisis facing funded pensions.
The time has come for the Government to abandon their complacent denial of a problem. For too long, Ministers have had their heads in the sand: now is the time for the new Secretary of State to admit that there is a problem. I am sure that he has now been made aware of the evidence, which is compelling. The latest figures from the Association of Consulting Actuaries show that fewer than four in 10 final salary pension schemes are still open to new members, and that half of those are contemplating closure.
A wide range of well-known companies have closed their final salary schemes to new members—Barclays, British Airways, British Telecom, ICI, Lloyds TSB, Marks and Spencer, and Sainsbury. We know from the Government's own statistics that 59 per cent. of recently retired pensioners now have an income from an occupational pension, against 67 per cent. of recently retired pensioners when Labour came into office. Fewer pensioners are now retiring with an income from an occupational pension. The number of employees without a funded pension arrangement has grown from 40 per cent. to 44 per cent in the past two years alone. No wonder the latest policy document from the Trades Union Congress on the subject begins with a stark statement:
"The UK's pension system is in crisis."
Ministers used to ignore that evidence by citing statistics that purported to show how much we were saving. I hope that after his salutary experience in the past 24 hours the Secretary of State will not make that mistake

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this afternoon. I welcome his announcement that he will review the Government's statistics on pensions contributions, but I hope that he will give the House a full account of what has gone wrong in his Department, not once, but twice. First, it got the assets in our pensions funds wrong, and more recently it got the annual flow of savings into our pension funds wrong as well. One mistake might be regarded as a misfortune, but two from the same Department on the same subject looks like carelessness.
Mr. John Greenway: Is my hon. Friend aware that the Association of British Insurers informed the all-party group on insurance and financial services this morning that it calculates that the savings gap is now £27 billion, most of which relates to pensions? Will he look carefully at proposals to encourage employers to operate better schemes?
Mr. Willetts: I am grateful to my hon. Friend for that intervention. He is correct about the scale of the savings gap that we face.
I wish to press the Secretary of State for more information on the two serious errors made by his Department in the past few months. The first mistake was in respect of the assets in our pension funds. Originally, the Government said that at the end of 1999 we had £784 billion in our pension funds—quite a lot of money. Then, without any explanation or prior notice, they produced a revised set of figures that showed that at the same date—at the end of 1999—they had reduced their estimate of the assets in our pension funds to £679 billion. That is a reduction of £104 billion—probably the biggest single change in the history of British economic statistics.
The sum that the Government managed to lose is equivalent to the entire national output of Portugal, but, fortunately, three and a half months later we discovered that the money had only been mislaid, and it popped up again. The Government put out a new set of figures, announcing that they had discovered, after all, that in 1999 our pension fund assets were worth £812 billion. So the figure for the value of the assets at one date in time had moved around by £150 billion. Then the Government carried forward the series, to show that having been £812 billion in 1999, the figure was down to £765 billion in 2000 and, on the latest estimates from UBS in the City, £684 billion in 2001.
That would mean that the assets in our pension funds peaked in 1999 and have been in decline ever since. It might be that 1999 was the peak year of our funded pension assets, not to be seen again. That was the first mistake: the Department revealed a £104 billion reduction in the value of the assets in our pension funds, with no explanation whatsoever. That surely should have set the alarm bells ringing about how unreliable the Government's statistics were, but no.
We investigated the figures that the Government were producing for the annual flows into our pension funds. Ministers were saying, "Don't worry. Everybody else might say that there is a crisis in our funded pensions, but we know that everything is all right, because we are saving £86 billion a year in our pension funds." If that figure were true, if the Government had stood back and thought about it for a moment, it would have meant that almost 9 per cent. of the entire national output of our
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country was going in savings in our pension funds—enough to buy for every worker in Britain a two thirds final salary pension, index-linked with inflation. The Government were saying, "Don't worry, £86 billion a year is being saved."
We warned the Government, and we were not alone, that those figures were not credible. Let me quote from the chairman of the Association of Consulting Actuaries, who said:
"We are extremely worried that the impact of the changes that are taking place in terms of future pensioner incomes is being under-estimated by the Government and, as a result, there has been an inadequate policy response."
The Secretary of State was quoted in the papers this morning as saying that within 72 hours of being told that there was a mistake in the statistics, he acted. Let me tell the Secretary of State that I wrote to his predecessor on 8 March 2002, telling him about the mistake and setting out in considerable detail exactly how I believed the mistake had arisen. It is not the case that the Department acted within 72 hours; it took 72 days for it to address the fundamental points that I made in the letter to the right hon. Gentleman's predecessor.
There is now an unseemly row going on between the Secretary of State and his own officials. The Secretary of State, in a way that is all too typical of Ministers nowadays, is happy to blame everybody but himself. Referring to statistics on pension contributions, he said yesterday in the House:
"We have now been informed by the Office for National Statistics that there are problems with the series from which they have been estimated in the past".
He was blaming the Office for National Statistics, but in this morning's Financial Times the Office for National Statistics states:
"The national statistician is not known for his apologies, and there won't be one here."
The ONS is busy briefing that it is Ministers' fault and telling the press that it warned Ministers that the information was unreliable, but that they nevertheless kept on producing the figures.
I hope that the Secretary of State will today give us an end to that briefing and counter-briefing between him and his officials and a clear explanation of when they were first warned by the ONS about the mistakes in the figures, what steps they took to correct them as soon as they heard about them and what advice he was given by the ONS when the Department received my letter of 8 March.
Mr. Patrick McLoughlin: My hon. Friend referred to the letter that he sent on 8 March. Presumably, a letter sent by the shadow Secretary of State for Work and Pensions containing such serious accusations would have had an immediate reply from the Secretary of State. Can he tell me when he received the reply and what it said?
Mr. Willetts: I received a reply that was prompt, but brief and uninformative—exactly the sort of reply with which we are all too familiar.
Of course, this is not just a matter of whether Ministers have confidence in the advice of their statisticians and whether statisticians have confidence that Ministers will take heed of their warnings. It ranges beyond that, as it also raises the question whether the structure of pensions

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in our country is right. Many Ministers were trotting out amazing statistics showing how much we were saving in our pension funds and cited them as evidence that the "structure of pensions" in Britain is "right". If the evidence is wrong, is the conclusion that they drew from that false evidence wrong as well? I hope that the Secretary of State will also refer to that issue.
Mr. Douglas Hogg: My hon. Friend is coming to the question of the structure of pensions. Will he confirm that a pensioner would have to accumulate a fund of about £100,000 to be better off than he or she would be having saved nothing at all? That is the case because of the deprivation of top-up payments on the basis of the fund.
Mr. Willetts: My right hon. and learned Friend makes a very important point on which we have regularly pressed Ministers. The least that people who are considering taking out a stakeholder pension, for example, are entitled to expect is information from Ministers about how much they believe that they need to build up in that pension during their working lives to float them off means-tested benefits. That is the $64,000 question; indeed, the answer might be $64,000, but we have never had any answer from Ministers. The level could be £100,000, but they have never been willing to address the important point that he makes. Again, I hope that we will hear about that from the Secretary of State.
The real question is not just misleading statistics—something with which we are all too familiar from this Government—but what is going on with the pension funds and pension savings of the people of this country. That is the central question that the House is debating. Before the Secretary of State points it out, I accept that there are many reasons for the decline of final salary pension schemes in this country. I understand that there is a range of factors, some of which are not in the Government's control. We are seeing improvements in longevity, and I am sure that hon. Members in all parts of the House will welcome that as good news. The fact that people are living longer is a success that we can celebrate. There have also been changes in the labour market that will change the pattern of pension provision.
We understand that not everything can be controlled by Ministers, but that very fact makes it even more important that the things that they do control are got right; and that, in so far as the Government control the environment in which people plan for their retirement, they get that right. Our central criticism of the Government is that Ministers have got the things that they control—above all, the burden of tax on occupational pensions—catastrophically wrong.
Mr. Michael Connarty: While the hon. Gentleman was recounting some of the things that might have had an effect and which Ministers controlled, did he not think that the Conservative Government's decision to encourage and allow withdrawal of contributions and the taking of holidays by pension fundholders might have caused the massive deficit in the pension funds on which people are now looking to draw for their retirement?
Mr. Willetts: I undertake to cover that point later in my speech, but I want to set it in the context of the other changes. If the hon. Gentleman then thinks that I have still not addressed his question, he can come back to me.
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I want to set out the background to the tax decisions that the Chancellor has taken. At the time of the 1997 Budget, when he introduced his notorious stealth tax on our pension funds, he said:
"Many pension funds are in substantial surplus and at present many companies are enjoying pension holidays,"—
he was celebrating the very thing that the hon. Member for Falkirk, East (Mr. Connarty) just mentioned—
"so this is the right time to undertake a long-needed reform."—[Official Report, 2 July 1997; Vol. 297, c. 306.]
The Chancellor explicitly linked the tax imposition on pension funds to the fact that those funds were in surplus.
Last year, when the Prime Minister was challenged on this matter, he told the House of Commons:
"The value of pension funds has gone up dramatically as a result of the success of the economy. The abolition of payable tax credits was done for the reasons that we stated at the time. It is the right reform, and as a result of the buoyancy of the stock market the value of people's pension funds has gone up."—[Official Report, 7 March 2001; Vol. 364, c. 285.]
The Government justify their tax increase by saying, "Don't worry, the stock market is going up and share prices are rising; it's all okay." But the value of the stock market has now fallen below the level that it was at when the Chancellor originally made that tax announcement in 1997; it has fallen almost to the level that it was at at the 1997 election. Since the justification for the tax has gone, will the Secretary of State tell us what possible reason he can have for imposing this tax on our pension funds?
Mr. Steve Webb: The hon. Gentleman has criticised the £5 billion tax on pension funds. Will he tell us how much of that £5 billion would have been put back under the manifesto on which he stood at the last election?
Mr. Willetts: Our manifesto made it clear that we wanted to encourage people to save for their retirement. [HON. MEMBERS: "Aah!"] I would very much like to be able to reverse the tax, but the fact is that that money is now being spent. That is why we cannot pledge to reverse it.
Mr. Chris Pond: Conservative Members continually repeat the figure of £5 billion. Will the hon. Gentleman confirm that the Conservative Government took £10 billion out of the state pension scheme while they were in office?
Mr. Willetts: I am coming to this important point: we are not talking about a one-off £5 billion. It is £5 billion a year—year after year, ad infinitum. The figure is now £25 billion and rising every year. That is the point.
Mr. Frank Field: Will the hon. Gentleman give way?
Mr. Willetts: I will give way to the right hon. Gentleman because I greatly respect his expertise in this area, but then I would like to make some progress.
Mr. Field: Given that the country is worried about its future pension provision, may I make a plea that, once the hon. Gentleman has made these points, he quickly moves on to what the Opposition will contribute to the evolving debate? It is understandable that he will point out the effect of changes in advance corporation tax on the prosperity of occupational pension funds, but does he agree that that was the second blow, and that the first blow was delivered when the Conservative Government changed the tax laws so that funds that were in surplus had to run their surpluses down to 105 per cent. of their liabilities or face penal rates of tax for not doing so?
Mr. Willetts: The fact is that all the other changes that have affected pension funds are dwarfed by the scale of the tax increase that the Chancellor imposed in 1997.
Mr. Field rose—
Mr. Willetts: I would like to make some progress now.
Mr. Field rose—
Mr. Willetts: I will give way to the right hon. Gentleman in a moment, but I want to give him one more figure. I respect his expertise and, as he knows, I am very happy to contribute in a constructive spirit to debates on his own imaginative ideas on pension reform.
I want to make two points. First, it is incorrect to compare the capital value of the loss of the value of shares—the capital effect—which may be hundreds of billions of pounds, with the flow of £5 billion as a tax hit. We have to realise that this is not just a one-off tax hit; it is £5 billion a year. That is why it is so significant. If we calculate the current cost of a £5 billion-a-year tax, we get a very large sum indeed.
My second point is that Labour Members regularly mention enormous figures for the total fall in the value of the stock exchange. They now seem keen to tell us how much value shares have lost under their management—that is the point that they like to make. They talk as if those shares all belong to pension funds. Pension funds own only about 18 per cent. of British equities, so it is not correct to compare the £5 billion, which is merely the annual effect of the tax, with the £450 billion, which is the total loss in value of all shares, of which only a small proportion are held by pension funds. That is why the tax impact was so great.
Mr. Field rose—
Mr. Willetts: I shall give way to the right hon. Gentleman one more time, then I shall make some progress.
Mr. Field: I am doubly grateful to the hon. Gentleman. Is not it true that ACT has had the effect that it has because the Conservative Government forced pension funds to run down their surpluses? Had they not been forced so to do, many more funds would have had greater buoyancy to enable them to withstand the ACT changes. The running down of surpluses pushed more pensions nearer to the precipice. Most people would say that both sides have made mistakes, but the country wants to hear what constructive proposals the Opposition have.
Mr. Willetts: I should now like to make some progress, during which I hope to answer the right hon. Gentleman's specific question about what proposals we would make.
I shall move from abstract statistics to something vivid and direct. I cite a Member of the other place, who is well known to Labour Members because he is a Labour supporter, a Labour donor and a Labour peer: Lord Paul of Caparo Industries. I shall quote what he said about the decisions that his steel company is making in its attempt to close its final salary pension scheme. When asked why he was closing his final salary scheme, he said:
"You see the main reason is we had this so-called final salary scheme…but in view of the tax on dividends"—
that is the first point he mentions—
"and also the stock market going all over the place there is no way one can really guarantee a final salary scheme".
At the end of his list, he refers to
"government action like the dividend tax".
That is what a Labour peer who runs a business says. He is trying to use a Labour tax to close a final salary pension scheme, and instead put his workers into the Government's pet pension scheme, the stakeholder pension. He wants them to have one of the Government's stakeholder pensions.
What do members of the Labour-supporting steelworkers' union do in response to a Labour peer trying to impose a Labour pensions policy as a result of a Labour tax? The Labour-supporting trade union goes out on strike. That is what its members are threatening to do as a result of the measures that the Government have taken.
That is not the end of the story, because there is another stealth tax, perhaps even stealthier than the £5 billion a year tax on dividends, and that is the miserly uprating of the contracted-out rebates that was announced in April. The actuaries William Mercer estimates that those rebates are now about 15 per cent. below the level necessary to provide the contracted-out benefits that companies are obliged to provide as a condition for contracting out.
With rebates for pensions running at about £11 billion a year, the actuaries are saying that the contracted-out rebate is £1.5 billion a year short. It is not just the £5 billion a year tax on its own, but the £5 billion a year tax plus another £1.5 billion, because the value of the contracted-out rebate does not match the cost of providing the pension that has to be provided in return.
The Government have taken the two main forms of financial support that Governments have historically given to occupational pensions—the tax relief and the contracted-out rebates—and imposed an extra £6.5 billion a year burden on our pension funds.
I can now answer the question put by the hon. Member for Falkirk, East. The entire value of the contribution holidays taken by companies between 1987 and 2000, which has exercised Labour Members, works out at £1.4 billion a year. That has a far smaller impact on the value of company pension schemes than the tax and rebate changes made by the Government. I hope that the hon. Gentleman therefore accepts that it is no good turning to employers and blaming them for the effect of their contribution holidays.
Mr. Connarty: As an economist, I know that £1.4 billion invested in 1979 would be worth a lot of money now. Because it was not earning money, it is not

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in the fund. I have just done a little calculation. Some £81 billion has been lost in the value of pension funds if they hold 18 per cent. of the shares that have lost £450 billion in value, as the hon. Gentleman just told us.
Mr. Willetts: The hon. Gentleman is in a hole, and he should stop digging. I am comparing a £6.5 billion imposition by the Government with the £1.4 billion a year impact that is the maximum that can be calculated to be the effect of pension contribution holidays.
Several hon. Members: rose—
Mr. Willetts: No, I shall not give way. I want to make progress, because many hon. Members wish to speak.
The effect of the changes—the tax increases and the reduction in the value of contracting-out rebates—is to drive pensioners, now and in future, on to means-tested benefits. That is where they will end up; there will be lower pension saving and more dependency on welfare. In the early 1990s, the Chancellor famously told the Labour party conference:
"I want the next Labour Government to achieve what in 50 years of the Welfare State has never been achieved. The end of the means test for our elderly people".
Well, that is not what the Government are doing. In fact, they will have more than half the entire pensioner population dependent on means-tested benefits. Our vision is very different—it is of a country in which more and more people build up funded savings so that they can enjoy a prosperous retirement that is not dependent on state benefits or means testing, but a source of pride in that they have built up their own savings during their lifetimes
That is what we believe in, and that is what is being damaged and destroyed by the Government—although the Prime Minister pledged, in one of their first documents after coming into office, that his aim was to change the balance of pensioners' dependence on benefits and funded pensions. He said that he wanted to reverse the situation whereby pensioners get 40 per cent. of their income from funded savings and 60 per cent. from the state, so that they get 40 per cent. of their income from state benefits and 60 per cent. from funded pension savings. That is an objective that we completely endorse. However, typically of this Prime Minister, despite having that grandiose objective, he has done absolutely nothing to implement it. If one asked him to do the washing up, he would announce that he had a 20-year plan for a cleaner kitchen on which he would undertake widespread consultation—but a pile of dirty crockery would be left at the end of the day. That is what he is like. He has a grandiose objective and no means of implementing it.
Conservative Members, by contrast, know how that vision should be delivered. We are committed to the reform of annuities. My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) has introduced a private Member's Bill that would do so. We have voted for such a provision time and again, but the Government tried to stop it every time. We have called for reform of the accounting standard FRS17. I was pleased to hear about today's announcement whereby, in line with our requests, there will be a delay in implementing it until we know what the European standard will be.
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We have called for less means-testing of pensioners. We worked with the right hon. Member for Birkenhead (Mr. Field) and with the Liberal Democrats to propose an alternative to the pension credit, suggesting that that money could instead have been put into a higher pension for older pensioners, who tend to he poorer, to offer more help to poorer pensioners without more means testing.
Mr. Barry Gardiner: Will the hon. Gentleman give way?
Mr. Willetts: No, I want to make more progress in dealing with the perfectly reasonable challenge issued by the right hon. Member for Birkenhead as to what our policies are.
Another policy is based on our view that the burden of regulation on pension funds is too high and needs to be radically cut back. We strongly support the Pickering review, which I am sure that the Secretary of State will talk about in his speech. However, since the announcement of the Pickering review, which was supposed to reduce the burden of regulation on pension funds, we have had, in the past nine months, another 251 pages of regulations, including 67 pages of statutory instruments and 81 pages from the Inland Revenue. Those have been churned out while the Government have boasted of their review to cut the burden of red tape on pension funds. That is the reality of what they do, despite their claims.
Over the past five years, the Government have, in a display of hyperactivity, comprehensively messed up the provision of funded pensions in our country. The Government have taxed them more heavily, cut the value of the contracted-out rebates to which they are entitled and abolished SERPS. The Government have brought in more means-testing and introduced a stakeholder pension whose take up by the eligible target group has been pitiful.
We now face a Labour environment for pension provision, which means less saving, low funded pensions and a poorer retirement for millions of British people. Labour Members should be ashamed of themselves.
4.11 pm
The Secretary of State for Work and Pensions (Mr. Andrew Smith): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
'welcomes the Government's framework for pensions which will reduce pensioner poverty and encourage saving; recognises that pensions are best provided on the firm foundation of the sound economy the Government has put in place, with partnership between employees and employers, pension providers and Government; congratulates the Government on the extra £6 billion paid to pensioners from April of this year and its intention to bring in the Pension Credit which will increase the incomes of around half of all pensioners; further welcomes the introduction and progress of stakeholder pensions; recognises that there is still more to do and looks forward to receiving the Pickering and Sandler Reviews and consulting on proposals for reform in the Autumn.'.
I want to stress that the Government not only recognise the pension challenge that the country faces but, through the steps we have taken to reform the structure of pensions—tackling pensioner poverty and rewarding those with modest savings and occupational pensions—and the reviews that we have initiated of pensions regulation, retail savings and tax simplification, we are

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addressing the very issues that are key to making it easier for people to build up savings for retirement and for employees to contribute.
Mr. David Ruffley: If Government policy on savings is working, can the Secretary of State explain why the savings ratio has plummeted by half since new Labour came to power?
Mr. Smith: As the hon. Gentleman ought to know well from looking at trends in the savings ratio, it tends to vary inversely with economic conditions. Characteristically, the savings ratio goes up in recessions and down in periods of prosperity. Actually, he is pointing to the fact that we have had a period of stability, thanks to the stewardship of the economy by my right hon. Friend the Chancellor and the tough fiscal and monetary disciplines that we have stuck to. That is responsible for the savings ratio.
Like the hon. Member for Havant (Mr. Willetts), I very much welcome the Accounting Standards Board announcement this morning that it is delaying the introduction of FRS17, pending a decision on the international standard. I hope that there is agreement on both Front Benches that although it is vital that there be openness and transparency in accounting, FRS 17 has been blamed for some of the closures of final salary schemes. Providers have put the case that the standard forces pension liabilities to be disclosed as a snapshot, when those liabilities may be spread over a longer period.
Ministers in the Department have been conscious of the impact that some providers believe FRS17 has had on schemes. My predecessor had a meeting with the ASB, drawing its attention to the advantages of aligning FRS17 with the international standard, which allows a smoothing of pension liabilities over time. I am pleased that the ASB will look at the international standard and I welcome the decision that our companies do not have to change their accounting practices twice, in 2003 and again, possibly, in 2005.
Of course, FRS is not the whole issue; of course more needs to be done to raise levels of saving for retirement. As the hon. Member for Havant said, people are living longer. That is something to celebrate, but it means that pension funds have to go further than ever before.
Mr. Hogg: On current figures, what fund would a pensioner have to possess in order to be better off than he or she would be with no fund at all?
Mr. Smith: The reforms to which I have already referred, and especially the pension credit, reward people for saving. The Financial Services Authority has made that clear. Stakeholder pensions make an invaluable contribution in adding to the convenient vehicles that people can use. [Interruption.] Conservative Members ask how people are better off. With the introduction of the pension credit, where the Conservatives penalised people with modest savings and occupational pensions, we will reward them.
We accept that more needs to be done. That is why we set up the reviews, which the Opposition say that they welcome, and why we need to consider bold and radical action to sustain pension schemes and raise the level of
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pension savings. Our approach and the principles on which it is based are clear. First, there is the basic state pension as the foundation. Secondly, there is our responsibility towards those pensioners who have saved all their lives. Thirdly, there is our continued commitment to tackling pension poverty. Fourthly, there is radical reform to support occupational pensions. I want to deal with each of those issues.
Mr. John Redwood: When the Chancellor imposes a tax on dividends and further substantial taxes on the cash flow of companies, would the Minister expect the value of shares in people's pension funds to go up or down?
Mr. Smith: As ever, the right hon. Gentleman misunderstands the purpose of that corporate tax reform, which was to correct the perverse incentive in the previous tax arrangements for distribution in the form of dividends rather than for reinvestment. The impact of such reform can be judged only over a period, but the level of investment in industry is now higher, having reached the highest level for many years, at 14 per cent., whereas it averaged about 11 per cent. in the years of Conservative government. The reform was designed to strengthen British industry and our wealth-generating capacity, which is what enables us not only to enjoy higher living standards but to boost the strength of the foundations of our economy so that we can pay decent pensions in retirement.
I listened very carefully to the speech by the hon. Member for Havant to try and catch one glimmer of what the Opposition's policy is. He mentioned annuities and said that he agreed with us on regulation, but that was about it. Under the Conservatives' stewardship, we had pensions mis-selling on a massive scale and the introduction of much of the burden of regulation on pensions that they now complain about. Their leader said that the minimum income guarantee, which is taking pensioners out of poverty, had "nothing to recommend it"; and the hon. Member for Havant said that the pension credit, which rewards modest savings and occupational income, should be "reconsidered".
On the basic state pension, which should be the foundation of security in retirement, the Conservatives tried to say nothing in public—and we heard nothing about it today. According to the reports of the Opposition's so-called summit last Thursday, their spokesman refused to say anything about what their policy would be, but we have, and can share with the House, not just a memo or a note but the formal letter that the shadow Secretary of State sent to the hon. Member for Sutton Coldfield (Mr. Mitchell) on 7 March. Let us remind ourselves of what it says:
"Here is the material I promised you about a funded alternative to the basic state pension."
It continues by stating:
"the vision of moving to a funded alternative to the basic state pension is a powerful and compelling one which you and I share."
That means that their vision is to privatise the basic state pension.
Several hon. Members rose—
Mr. Smith: The dividing lines in this debate—[Interruption.]
Mr. Speaker:Order. I do not think that the Secretary of State is giving way.
Mr. Smith: The dividing lines in this debate are very clear. We believe in a partnership, in a balance between state and private funding; the Tories believe in privatising the basic state pension.
We have set out our policy, but what about the Opposition's?
Lynne Jones: Did my right hon. Friend notice how the Opposition spokesperson regarded the loss on the stock market of £405 billion in less than two years as unimportant in relation to the problems with private pension schemes? Does that loss not show the importance of having a sure foundation of state provision, so that people are not subjected to the vagaries of the stock market that we have witnessed in recent years? In that regard, what is the Government's justification for the 60:40 split?
Mr. Smith: I hear what my hon. Friend says. She underlines the importance of partnership, of a balance between private and state provision, and of not privatising the basic state pension.
Mr. Mark Francois rose—
Mr. Oliver Heald rose—
Mr. Smith: We need to talk about the basic questions of pension policy and the pensions framework. First, should we believe in the basic state pension as the foundation for pension provision in retirement? We say yes, but what about the hon. Member for Havant and his colleagues? They say that they have a compelling vision of privatisation.
Mr. Heald rose—
Mr. Smith: Secondly, should we believe in rewarding people with modest pensions and savings with a top-up?the pension credit—rather than the old means-testing of pound-for-pound deductions? We do, but what about Conservative Members?
Several hon. Members rose—
Mr. Smith: Thirdly, should we believe in a guaranteed minimum income to continue to tackle pensioner poverty—a minimum that we have increased by 30 per cent. since 1997? We do, but what about them?
Mr. Michael Jack rose—
Mr. Smith: Fourthly, should pensioners continue to receive the £200 winter fuel payments, and should those over 75 continue to receive free television licences? [Interruption.] A Conservative Member says "Come on!", but those provisions make a great deal of difference
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to many pensioners throughout the country. It ill behoves Opposition Members to dismiss them as gimmicks, as they have done in the past.
Mr. Jack: I am disappointed that the Secretary of State has so far been unwilling to accept any responsibility for the crisis in our pension schemes. In a letter to me, the Church Commissioners confirmed that the Chancellor's tax on pension funds was costing the Church of England some £7 million a year. Many less well-off vicars are about to retire, uncertain of their financial future. Given the difficulties that churches experience in raising money, could the Secretary of State explain how the Church of England is to make up for the deficit in its pension funding that was caused by his Government?
Mr. Smith: I would set more store by such comments—I accept that they are well intentioned—from the right hon. Gentleman and his colleagues about dividend tax credits and corporation tax credits if they said that they would reinstate them. However, when challenged time and again, they will not say that.
Yesterday the shadow Chancellor gave a major speech on these issues. We have scoured the reports for the commitment that surely would not have escaped the attention of journalists that he was pledging to reinstate the tax credits. So the Tories are crying crocodile tears. Their approach is to keep quiet, hoping that the voters will not notice that they are same old Tories, and more extreme than ever. The policy of not owning up to what they believe in will not work.
Mrs. Angela Browning rose—
Mr. Smith: In the end, we will have an open debate about policies in the House and the Tories will have to come forward with their proposals.
Mrs. Browning: Will the Secretary of State give way?
Mr. Smith: Not at the moment.
We inherited a pension system in chaos, riddled with disincentives, which did nothing for the poorest pensioners and penalised those with modest occupational pensions and savings.
Andrew Selous rose—
Mr. Smith: The Tories presided over a growing gap between rich and poor pensioners. They left millions in poverty. They did nothing to help the low paid, those in part-time work, carers and disabled people.
Mr. Archy Kirkwood: I understand that blame allocation is an important part of this process. However, may I go back to the important point made by the right hon. Member for Birkenhead (Mr. Field)? No one in the Chamber can be in any doubt that we are in the middle of a crisis of confidence regarding funded pension schemes. I think that there is a six-month window of opportunity, and the Government have put some useful reviews in place that might assist that process.
I do not think that people listening to the debate will be satisfied simply with blame allocation. The key question for me this afternoon is whether the Secretary of

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State will lead a debate on what will eventually have to be a complete reconstruction of a settlement for funded pensions in the future, because that is what the country is looking for a lead to achieve.
Mr. Smith: I respect the contribution of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), not least as the Chairman of the Select Committee on Work and Pensions. It is important to have a debate. That is one of the reasons why I was so disappointed that we heard so little by way of constructive proposals from the Opposition.
Mrs. Browning rose—
Mr. Smith: We want to have that debate and establish a consensus.
Mr. Richard Bacon: Why does the right hon. Gentleman not give way then?
Mr. Smith: I have given way on several occasions already.
We believe in building partnership for pensions in this country. As well as the steps that we have taken to help today's pensioners, we are putting in place steps to help tomorrow's pensioners, such as long-term reforms to prevent poverty in the future by encouraging people to save for their retirement.
Mrs. Browning: Will the right hon. Gentleman give way?
Mr. Smith: The hon. Lady is very persistent; I will give way to her.
Mrs. Browning: The right hon. Gentleman is too kind. He expresses his concern about future generations; the most important thing is that younger people have an incentive to recognise that they must put money away today for when they eventually retire. When the Conservatives left office, there was more in funded pension funds in this country than in the rest of Europe put together. We had savings vehicles such as personal equity plans and tax-exempt special savings accounts—which the Government scrapped—so that there was an incentive for people to put away money for a rainy day and for their retirement through taxation vehicles as well as through pensions.
What possible incentive is there in the Government's taxation policy, which sees tax as being used only as a penalty as far as pensions are concerned, and not as an incentive? Will the right hon. Gentleman give us one good reason why the younger generation should believe that his policies will deliver for them, because they do not?
Mr. Smith: The hon. Lady raises an important question about raising the level of savings among the young. The answer is the ISA, a more flexible vehicle which is attracting more savings, especially from younger people. [Interruption.] The hon. Lady specifically asked what we could offer to younger people to ensure that they were saving, and I quite reasonably pointed to ISAs, just as I can point to the reward that we have built into the pension credit system for the future to ensure that saving is
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rewarded and not penalised. However, we must also continue to increase incomes by building a stable economy, making work pay and helping people into jobs—something that the Conservatives were not so good at when they were in government.
All those measures build on the historical partnership that we have enjoyed in this country—[interruption.]—between the state, individuals and employers, and between the funded and state sectors. In that partnership, the state provides a basic pension on which people should build. It also provides the state second pension, so that from this April, 18 million people will start to gain from the changes that we have made.
Mr. Jim Cunningham: Has my right hon. Friend noticed that Opposition Members have not mentioned the mis-selling of pensions that took place during their tenure of office? Will he reiterate that it is the Government's intention to defend the state pension, while working for improvements towards a decent income for pensioners?
Mr. Smith: I did indeed note the omissions from the remarks of Opposition Members. As I have reached the passage of my speech where I look to the future and to the forging of partnerships and consensus, I shall not dwell on the first point raised by my hon. Friend. What went wrong under the previous Tory Administration, as well as their failure to apologise for it, is evident to the public.
It is clear that to enjoy a secure income in retirement people need to build up more savings. Over 1.5 million more people are in work than in 1997. Having more people in work means that more people have the opportunity to save for their future. For those of working age who have never had the opportunity to join a company scheme—about half the work force—we have introduced new options for saving for retirement.
People need to be able to make informed choices. At present, pension provision and planning is an incomprehensible maze for far too many people—something that is easier to put off until another day. That must change.
The Government have an obligation, working with providers, to help people to obtain the information that they need to make informed choices.
Several hon. Members rose—
Mr. Smith: Last October, in partnership with volunteer employers and private pension providers, we launched combined pension forecasts that will allow people to see more clearly what pension they can expect to receive when they retire. That will form a crucial first step in raising—
Mr. Francois: Will the right hon. Gentleman form a partnership with me and give way?
Several hon. Members rose—
Madam Deputy Speaker (Sylvia Heal): Order. The Secretary of State has made it clear that he is not giving way.
Mr. Smith: We have taken a crucial first step in raising awareness to ensure that people have enough income

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when they retire. All too often at present, they have a rude awakening when they realise that they will be getting less than they expected. Inevitably, it is also a lot less than they were getting while they were at work. It is a scandal—[Interruption.] Opposition Members are grinning, but when they were in government, they never did anything to enable people to estimate their retirement income.
We shall build on our approach from April next year when members of money purchase occupational schemes, stakeholder pensions and personal pensions start to receive an annual illustration of their future pension rights.
Those are important steps, but we need to go further still. I want talking about pensions and financial planning to be more of an everyday issue. The attention received by this debate about the situation facing the country on pensions will do some good if more people realise that they must consider their pension prospects. They have a right to expect reliable information about how they can save more for the future. To that end, we are working closely with the Financial Services Authority and others in the industry to promote the need to save and to ensure that people have the information that they need to make savings choices that are right for them.
Lynne Jones: Does my right hon. Friend agree that it is vital that people are given information in pensions statements about the impact of their own savings on their likely receipt of state benefits? Would not it be better if we rewarded pensioners who save by setting the basic state pension at the same level as the guaranteed pension credit, as proposed by the Institute for Public Policy Research? Would that not offer a more robust system for the future?
Mr. Smith: No, I do not believe that. [HON. MEMBERS: "Why?"] For reasons of cost and the effectiveness of the scheme in concentrating available resources on those who need them most. That is the merit of the minimum income guarantee and the pension credit reform that we have introduced. I must now make some progress.
I was outlining the key drivers in these matters, one of which is ensuring that people have the right incentives. It should pay to save, yet, until we introduced reforms, that had not always been the case. That is why we are introducing the pension credit from next year, and why the Inland Revenue, as part of the review that we are carrying forward, will report later this year on tax simplification. Simplification, of course, is a third key principle.
Mr. Gary Streeter: Does the Secretary of State see any connection at all between the Chancellor's £5 billion a year tax on dividends and the increasing number of final salary pension schemes that are closing their doors to new members? Is there any connection—yes or no?
Mr. Smith: I have already explained the reason for that policy and the impact that it has had on raising levels of investment in this country, thereby strengthening British industry and services and putting in place a stronger economic foundation, which, surely, is the way to ensure that we can pay higher pensions in the future.
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On simplification, we need to make sure that as much goes into the pension pot as possible, avoiding excessive costs in selling or in running schemes. The key next step will be the Pickering and Sandler reviews, which are due to report shortly. As I said, the Inland Revenue will report on its review of tax simplification later in the year. Alan Pickering's report will consider how we can strip away unnecessary legislation and make pensions much simpler, thereby making it easier for employers who run a company scheme, easier for the industry to sell pensions, and, above all, easier for people to save.
Mr. Julian Brazier: The Secretary of State referred again to encouraging saving. He will know that, for nearly 40 years, a measure has been taken of savings across the economy—the savings ratio. Will he tell the House why it is now at an all-time low—a miserable 3.5 per cent.?
Mr. Smith: The hon. Gentleman was clearly not listening, or did not comprehend fully, when I explained this matter to Opposition Members. I shall give the short version: the savings ratio tends to go down when the economy is doing well, and it tends to go up when the economy is doing badly. That might explain why it was often higher under the previous Administration than it is now, as the economy has been doing so well.
On simplification, we need to take a hard look at the regulations surrounding pensions and make a conscious decision to simplify the system. We need to make sure that pensions are accessible to the people who need them.
David Winnick: Would not large companies find it useful to use as their model the pension scheme that exists in the House of Commons? We now have—it may have been different in the past—a very good pension scheme. What I cannot understand is why we should have that scheme, which is right and proper, when it is denied to many other people. Every effort should be made to ensure that large companies have—or introduce—a final salary pension scheme. What is good for us should be good for others.
Mr. Smith: We recognise the contribution that final salary defined benefit schemes make more widely in the economy, as well as in Parliament and across much of the public sector. It is important to explain, however, that the final salary or defined benefit scheme is not the most appropriate vehicle for everyone, especially more mobile workers and those who do not have the prospect of progressing up the salary spine, for whom a defined contribution system can offer more. The crucial consideration is the amount of contribution that goes into the pot and the security and return on the investment.
Gregory Barker: Will the right hon. Gentleman give way?
Mr. Smith: I have given way many times and I must finish my remarks.
Another aspect of the debate is important in informing the national consensus that we need to build. As well as making it easier for people to save, we need to provide more and better opportunities to prepare them for retirement. We need to reverse the trends of the 1980s and 1990s in which, for example, the proportion of men

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between the age of 50 and state pension age not in work doubled. We need to get rid of perverse incentives to retire when it might suit people to carry on working, perhaps part-time, for longer. Far too many people experience a cliff edge between work and retirement—
Mr. Redwood: Like Ministers?
Mr. Smith: The right hon. Gentleman should know.
On Friday, someone could be deemed a valuable member of the work force, but the following Monday find himself shuffled off to retirement.
Youth unemployment was the focus of many Government efforts to get people into work in the 1990s. The focus now must be on the over-50s. Progress has been made. The rate of employment for the over-50s has risen every year for the past four years and is now one of the highest in Europe. Already 900,000 more people aged over 50 are in work than in 1997, but there is still more to do. With increasing longevity, people should be able to choose to combine work with income from retirement not just in the years up to state retirement, but beyond.
Mr. McLoughlin: Will the right hon. Gentleman give way?
Mr. Smith: No, I am concluding my remarks.
I firmly believe that our framework is based on a combination of state and private provision that strikes the right balance. Like the Conservatives, I do not believe that state pay-as-you-go pensions should dominate, but unlike them I do not believe that we should rely exclusively on funded private pensions. Privatising the basic pension, as the Conservative party proposes, would force everyone to put their retirement nest egg into one basket.
The future is risky and we need a balanced strategy to spread those risks—a partnership between the state and the private sector. We will continue to build on the changes we have made to enhance that partnership. The principles on which our approach is based are clear: first, the basic state pension as the foundation; secondly, our responsibility to those who save; thirdly, our continued commitment to tackle pensioner poverty; and, fourthly, radical reform to support occupational pensions. We will carry forward our work, building on what has been achieved to help people gain security and fulfilment in retirement.
4.44 pm
Mr. Steve Webb: Sometimes we have had cause to agree with the Conservatives' analysis of the pensions issue. One phrase in their motion— "shocked by the Government's complacency"— jumps out because it puts its finger on the pulse of the pension problem. The Government are indeed guilty of complacency on funded pensions. It is striking that relatively little of the Government amendment, on which we will vote later, is about funded pensions. Instead, the Government pat themselves on the back for £6 billion of state spending.
That goes to the nub of the problem, which is that the Government have set a target for increasing funded pensions, but appear to have almost no policy levers to deliver it. It is a paradox that for several years it has been
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Government policy to increase funded pensions from 40 to 60 per cent. of income in retirement, yet there appears to be no method of delivering that policy goal.
That, I regret to say, is where the consensus between the Liberal Democrats and the Conservatives breaks down. When I look at their motion, I see hand-wringing over measures that they oppose but would not reverse, and a very thin set of proposals for reform, some of which are agreed throughout the House and are not distinctive, and most of which are rather vague and do not amount to a row of beans.
The motion condemns the
"massive £5 billion annual tax on pension funds",
but does not propose to reverse it. When we challenge the Conservatives to say whether they would reverse it, they reply that they cannot make spending pledges this early in the Parliament and that they will produce a manifesto. They produced a manifesto a year ago, after the dividend tax credit was abolished, and there was no pledge to reverse that move. The Conservatives had the chance to say what they would have done if they had been elected, and they said nothing, so instead of criticising measures taken several years ago that they have no intention of reversing, they should move forward with a positive agenda, which seems sadly lacking this afternoon.
Mr. John Butterfill: Is the hon. Gentleman telling me that reversing that £5 billion of taxation is a Liberal Democrat policy, along with all the other pledges that they will never have the opportunity to implement?
Mr. Webb: Not at all. None of the three main political parties has included a reversal of that policy in its manifesto, and that is the point. It is dishonest of the Conservatives to keep whingeing, "Oh, it's terrible but if we had the chance to be in government, we wouldn't do anything about it." It is also a waste of our time. Let us talk about what they would do.
The Conservatives are in favour of cutting the burden of regulation, almost all of which they wrote. As for the regulations introduced since Labour was elected, will the hon. Member for Havant (Mr. Willetts) list which of them the Conservatives voted against? I put it to him that his party has supported the vast majority of pensions regulations introduced in recent years. I would give way, but there is no response. The Conservatives are weeping crocodile tears. They will not reverse the tax change to which they object; they voted for or waved through most of the extra regulation that they claim to oppose, and they wrote all the rest of it.
The Conservatives say that they want to reverse the spread of means-testing, and we share that desire. But is there a Conservative proposal to put money into the basic pension? When the pension credit was introduced, there was a suggestion that the money might go, quite properly in my view, to older pensioners through the basic pension. Is that current Conservative policy? Is it Conservative policy to put up the basic pension? It has suddenly gone very quiet. There is no such policy. There is a lot of hot air on this issue. The Conservatives complain about measures that they would not reverse or to which they have agreed.
James Purnell James Purnell (Stalybridge and Hyde): Has the hon. Gentleman noticed that the Conservatives are rather less

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coy outside Parliament? At a conference that we attended last week, the hon. Member for Havant (Mr. Willetts) speculated about getting rid of the state second pension and the state earnings-related pension scheme. Is that Liberal Democrat policy, or do the two parties part company on that point too?
Mr. Webb: We diverge on a number of points. The hon. Gentleman, the hon. Member for Havant and I addressed that conference, and the hon. Member for Havant said something intriguing that has not been picked up. I know that saying something on the Floor of the House is not a good way to get it publicised, but I will have a go.
The hon. Gentleman said on the record that pensioners currently get three means-tested benefits: income support, or whatever name it is known by these days; housing benefit, and council tax benefit. His view, and I am sure he will correct me if I misrepresent him, is that three is too many. The Conservatives would prefer there to be two benefits, and housing benefit is the one that he has in mind. The Conservatives are thinking of ending not only the basic state pension but housing benefit. If he wants to correct the record, I am happy to give way, but he explicitly said that we should go from three benefits to two, which, according to my arithmetic, must mean doing away with one.
The Conservatives suggest that there should be simplification. Alan Pickering, for whom I have a great deal of respect, has shrewdly spent a lot of time with the hon. Member for Havant, myself and people who have some influence in the pensions world—perhaps the hon. Gentleman and I do not—gathering a consensus. I strongly suspect that when he makes his proposals they will attain cross-party support. It is true that we want simplification of regulation, but that is not a distinctive policy. Once that is done, what will be left of the Conservative proposals? They are getting a bit thin—and we are nearing the end of the motion.
What is left? On reform of annuities, there is a specific proposal that will benefit a small number of people. We supported that proposal when it was set out in a private Member's Bill, but it will be largely irrelevant to the vast number of people who are suffering the loss of funded pensions now.
Mrs. Browning: I have to disagree with that statement. My constituency experience is that when it is explained to younger people being offered a stakeholder pension that they have to take it as an annuity, it puts them off signing up. That is why the take-up figures for stakeholder pensions are so small. I am talking not about people on high salaries, but about garage mechanics and people like that.
Mr. Webb: The hon. Lady misses the point. The private Member's Bill that I mentioned would not deal with such people—it would be of absolutely no value to them. That is because the sort of pension pot that such folk could accumulate would not put them in the range of those who would benefit from having draw-down or greater flexibility. That proposal was the only example of
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innovative reform that the hon. Member for Havant gave, but it is largely peripheral to the problem of the big falls that we are now seeing in funded pension provision.
Mr. Butterfill: Will the hon. Gentleman give way?
Mr. Gardiner: Will the hon. Gentleman give way?
Mr. Webb: I have given way already to the hon. Member for Bournemouth, West (Mr. Butterfill), and I want to make some progress, but I give way to the hon. Member for Brent, North (Mr. Gardiner).
Mr. Gardiner: I am grateful. Is the hon. Gentleman aware that the Association of British Insurers has published data on the low earnings of those taking out stakeholder pensions, in contradistinction to the remarks made by the hon. Member for Tiverton and Honiton (Mrs. Browning)? The ABI says:
"Where earnings data is known the majority of purchasers earn between £10,000 and £29,000"
a year. Does not that give the lie to the hon. Lady's comment?
Mr. Webb: Not only do the majority of those taking out stakeholder pensions earn between £10,000 and £29,000, but the earnings of the majority of the working population range between those two figures. It is an extremely wide band, and it was not the original target for stakeholder pensions.
One of my concerns about the stakeholder scheme is that the ABI figures show that only one in three stakeholder pensions have been bought by a woman. One of the key features of the pensions debate is that women are almost invisible. Among today's pensioners and people approaching retirement age, it is always women who have grotty pensions or poor pension rights. My concern about the change from 40 to 60 per cent. private provision, which the hon. Member for Birmingham, Selly Oak (Lynne Jones) is right to challenge, is that it is likely to be detrimental to women. Greater reliance on funded but money-purchase pensions, in which people buy an annuity—which is less for women than for men—is likely to be detrimental to women's relative position.
Mr. Tom Levitt: Is not that point addressed by the state second pension, which will specifically help women who have broken or reduced contributions records?
Mr. Webb: The state second pension will build up over a 45-year period, and it will help only women whose children are now aged five or under. Even in 45 years' time, the poorest women in retirement will not be those who have just hit pension age at 65; they will be the 80-year-olds. Even in 45 years' time, a full basic pension and a full state second pension—which will be quite hard to accumulate—will not lift a woman above the means test. The glory of the Government's goal—the full fruition of their policies—is that in 45 years' time, even if she is good and has a full basic pension and a full state second pension, a woman can be rewarded by needing to claim a means-tested top-up because she does not have enough to live on. That is not a goal that I would set.

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If a simple target not of 40 per cent. but of 60 per cent. funded provision is arbitrary and inappropriate, what should be the Government's target? What should they measure to determine the progress of their pensions policy? The answer is so blindingly obvious that it is hardly ever said. Instead of measuring the numbers of billions in funds, which the Government appear to have great difficulty doing, they should measure how many people in the current work force are heading for an income in old age that will give them a decent standard of living. The target of policy should he to deliver that decent income to each individual in the most effective way—whether through state provision, private provision, or a combination of the two. It should not be an arbitrary figure—40 per cent., 60 per cent., or whatever—picked out of the air, because that might not be consistent with the right number of people getting a decent income in retirement.
Such an exercise has been undertaken. NatWest Life produced a pensions index. It asked retired people what sort of income they needed for a decent standard of living, then projected how many of the current work force would, as things stand, attain such standards, and came up with a figure of 21 per cent. A year later, it found that that figure had fallen slightly. We can argue about thresholds and measures, but the principle must be right. We should be debating the proportion of people of working age who are heading for poverty or comfort in old age, not having obscure discussions about hundreds of billions of pounds and inflows and outflows. We have lost sight of the goal.
If we agree that there should be such a goal, the question is what should be done. As the right hon. Member for Birkenhead (Mr. Field) said, we have a duty not merely to whinge about the Government's performance, disappointing though it has been, but to say what should be done. I enormously welcome the fact that the Secretary of State for Work and Pensions is talking about flexible retirement and getting rid of arbitrary barriers. He even used a phrase that I have used for a long time, saying that he wanted to get rid of a cliff-edge notion of retirement. I heartily support that.
I hope that, following its review, the Inland Revenue will allow people partly to retire, partly to work for the same employer and partly to draw a part pension. It is absurd to assume that 99 per cent. of the work force are tax dodgers and to set the rules for them. Let us presume that people want to order their affairs to their own advantage but not to exploit the taxpayer. Let us assume that they want the system to allow flexibility in retirement, get rid of arbitrary rules that cut people off at 60 or whatever age, and provide choices. That would help funded pensions and would help to make the sums add up.
Geraint Davies: As the hon. Gentleman is moving toward making recommendations, will he say whether he favours the Australian occupational pension scheme, in which a certain level of coercion on employer contributions is matched by increases in productivity and tax breaks? That gives rise to much higher predictable income in later life.
Mr. Webb: I shall come to that very issue. Ideally, we want to enable people who are willing and fit to work longer. The question is how we complement that and get more saving done—the stick and the carrot. We can either force people, as the hon. Gentleman has suggested, or incentivise them. I shall return to compulsion.
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The ABI has written to a number of us proposing an interesting scheme. Where, say, two thirds of a company's employees are in a scheme and the employer is contributing, say, 5 per cent., there could be a pension contribution tax credit—not a pension credit but a Government top-up. There could be some subsidy of good company schemes in which employers contribute a fair whack and to which a decent proportion of the work force belong. That idea seems to be well worth pursuing.
The Government may think that the decline in final salary schemes and the amount that is going in are problems, yet they have no control over that amount. It is determined by the entirely private decisions of employers. If the employer decides to cut the contribution rate, the Government cannot say, "No, you can't." They just have to sit and watch. That is my key point. The Government do not appear to have policy levers to stop the problem arising. Why not look at incentives such as the ABI suggests? There could be some reward for employers that run good schemes to which they contribute a decent amount. That could perhaps be financed by reductions in higher-rate pension contribution relief.
John Robertson: Will the hon. Gentleman give way?
Mr. Webb: I should explain that this is me speaking; this is not yet official party policy. [HON. MEMBERS: "Ah."] It is important that we put on the table the ideas that are kicking around and see what reaction we get. Should not that, rather than reading out prepared speeches, be the point of a debate?
Mr. Frank Field: Surely what is sauce for the goose should be sauce for the gander. If the hon. Member for Havant (Mr. Willetts) wants to discuss what we do with housing benefit, should he not be encouraged, rather than penalised, for doing so? Similarly, we should encourage the hon. Member for Northavon (Mr. Webb) to discuss ideas of redistributing tax privileges.
Mr. Webb: Absolutely. If the hon. Member for Havant had repeated in the House what he said at an IPPR conference, I would have been delighted. We could have kicked the idea around, but it has disappeared. We would not even have to get rid of all the higher-rate relief. The ABI has costed one of its proposals at £900 million; higher-rate relief costs substantially more than that. Higher-rate relief is not delivering a penny of extra pension savings to people who are not saving enough. That is the key. If a finite amount of Government subsidy is going into the pension business and we want people who are not saving enough to save more, it may be worth looking at redistributing money from people who are saving quite well and can look after themselves by putting it into good company schemes over which the Government have no sway. If that eventually becomes Government policy, you heard it here first.
John Robertson: Is the hon. Gentleman saying that he would like to introduce legislation to force companies to make a contribution to pensions? If so, will he say what should that contribution be, and develop an idea in which I am interested?
Mr. Webb: There are two strategies—the incentive strategy, which provides a tax break to encourage firms

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to make such provision or, alternatively, as the hon. Member for Croydon, Central (Geraint Davies) mentioned, the Australian model, in which employers are required to make a contribution. A typical employer contribution to a scheme is 5 or 6 per cent. Obviously, there are some big variations, but that figure is not atypical. An advantage of a mandatory contribution from employers is that the good guys do not mind because they are already making contributions, and we prevent them from being undercut by the bad guys who are not contributing.
Obviously, the Australian situation is different because there is far more collective labour organisation—national labour unions can offer a deal in return for a pension contribution. The Australian system has achieved a huge increase not just in the proportion of male full-timers with pensions but women part-timers. We must therefore take a serious look at compulsion—we must not be afraid to use that word. It is hard to compel new young workers to pay for a pension. Even for me, telling a 21-year-old with a £10,000 student debt, "By the way, you've got to pay for your pension," is not a saleable proposition. However, we might tell people in their late 20s, before the onset of family responsibilities, "Now is the time to start thinking about a pension." The earlier that we do so, the less severe will be the contribution demanded of them.
John Robertson rose—
Mr. Webb: I am afraid that I shall not give way. There is a time limit on subsequent speeches, so I do not want to take up too much time.
Do the Government regard incentives as part of the solution, without which they have no lever on employers? Or do they regard compulsion as part of the solution? The Secretary of State is wary of that option, but does not seem to have ruled it out completely, which is probably the right approach. I hope that he will keep an open mind, as there is a widespread view in the industry that we may need to go down the route of compulsion.
I am concerned about where we are heading. The time bomb is not about paying for pensions—it is about pensioners living in poverty. As the hon. Member for Havant said, the Government have just published figures showing that newly retired people are less likely to have an occupational pension than they were a year or two ago. I asked the Secretary of State about those figures at Work and Pensions questions yesterday, but his response concerned a different set of figures, perhaps because my question was not clear enough. However, I was referring to the Department's own pensioner income series, which shows that in 1999–2000, 48 per cent. of single females had a company pension, but in 2000–01 only 39 per cent. had one—a huge fall from one year to the next. In a written answer, the Minister for Pensions told me that that might because of the selection of an atypical group. That may be true, although a sampling variation alone cannot account for a shift of that size. We know what the scale of uncertainty is in samples, and it cannot explain such a big difference. Either the figures are wrong—someone has done something wrong with the questionnaire or survey and, if so, I hope the Department looks into it—or something more significant is going on.
Sandra Osborne: I am one of the women whom the hon. Gentleman is talking about. Before I came to the
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House, I did not have an occupational pension as I was working in the voluntary sector—that is typical for both men and women in that field. I am always interested in the hon. Gentleman's remarks about the position of women in relation to pensions. Precisely what are his proposals for a rapid improvement in the situation?
Mr. Webb: I shall address that point in a second.
Either something dramatic is going on that warrants proper investigation or the data are dodgy, which also warrants investigation. The Government cannot continue to take the approach that they have taken in written answers to me—they cannot say that they will collect data for a few more years, then think about the position. By then, they will have been in power for seven or eight years. If something serious is going on in declining occupational pension receipts from women pensioners, eight years is a long time to let that continue.
The hon. Member for Ayr (Sandra Osborne) quite properly asked what the Liberal Democrats would do about the situation of women. We want the basic state pension to be far more of a foundation than the Secretary of State suggested, which means that there would be price indexation. We particularly want the basic state pension for older pensioners substantially increased; the majority of older pensioners are women.
The hon. Lady may say that before she is old, she will be newly retired, and that group of women need providing for, as well. With a substantially better pension at 75, women with small amounts of saving could buy a much better pension with it if they had to buy it only for the years between 65 and 75, instead of for the rest of their life. They would get roughly double the pension from a 10-year pension than from a lifetime pension. If the state guaranteed a good income for women at 75, they could get double the private pension at 65. That is one of the possibilities that we want to consider.
There are no easy answers. Making sure that contributions were mandatory at some level over the longer term might ensure that some women were provided for. Also, many women have paid at the married women's reduced rate, and there are still a huge number of them working their way through the system who do not know what pension rights they will accumulate. We believe that the Government should contact those women now to alert them to that fact.
Kali Mountford: Will the hon. Gentleman give way?
Mr. Webb: I am about to conclude, if the hon. Lady will forgive me.
The Conservative motion wrings its hands about aspects that it would not reverse and offers practically nothing of substance to take the debate forward. Yes, the Government have been complacent. There are just the stirrings of one or two movements in the right direction. We welcome the Pickering review, such as we know of it, and the prospect of Inland Revenue reform to encourage people to be more flexible in their retirement.
When the Minister looks at funded pensions and the overall pension regime, I urge him not to forget women. I urge him to look at where women are heading and the trouble that is building up for them—which the state second pension will not address for 40 years, and even

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then, only in a very limited way—and not to condemn women to a retirement of means-testing, but to help women in particular, and people of working age in general, to have a decent income in old age. That should be the goal, and it should be the measure of progress in pensions policy.
Madam Deputy Speaker: I remind all hon. Members that Mr. Speaker has imposed a 12-minute limit on Back-Bench speeches.
5.7 pm
Paul Flynn: Those of us who are old lags at pension debates must have listened with incredulity to the opening speech from the Opposition. It is curious that there was such excitement among Opposition Members about a tax change that has resulted in a £5 billion loss to the pension industry, yet we are to ignore entirely 18 per cent. of £450 billion, which is a result of factors beyond the control of any Government—the change in the stock exchange. We are expected to get excited about £5 billion a year, and ignore the sum of £86 billion that has gone the same way.
I listened with amazement to the idea that 1997 was year zero. I shall deal with more positive developments later, but the wreckage of the pension prospects of a whole generation—people in their 20s, 40s and 60s—originated mainly during the years from 1979 onwards. In 1980, the break was made in the link between pensions and earnings. In 1985–86, SERPS was cut in half. That wonderful scheme was one of the great achievements of the Labour Government, and was introduced by the Minister, Barbara Castle, whose life we shall celebrate a week today at 12.30 pm in Central hall. I hope to see everyone there, and we will bring our banners along. SERPS was one of our major achievements, but one that we neglected to respect and nurture under the present Government.
Mr. Butterfill: The hon. Gentleman is perpetuating the myth that it was the Conservatives who first broke the link between pensions and earnings. He neglects to remember that it was Labour who did not implement it. Labour Back Benchers, some of whom are present today, to their credit castigated their own Government for not implementing that link because they fiddled the figures. All the Conservatives did was to formalise what Labour was already doing.
Paul Flynn: I did not suggest for a moment that the Tories were the first to break the link, but they broke it in every year from 1980 until the time that they went out of office, so it was a continuous period and the result was a huge loss. However, they did worse things than that.
One of the points in the thoughtful speech of the hon. Member for Northavon (Mr. Webb) was that many people who are not involved in the pension debate—those who are working, between the ages of, say, 25 and 50—face a bleak future. The main reason for that is that in the 1980s, occupational pension schemes were compulsory for employers. The Conservative Government decided in the name of choice to make them voluntary. Many young people, in the belief that they were immortal and would never grow old and need a pension—they were likely to have been in the child-rearing, furniture-buying days of
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early marriage—did not contribute to their occupational pensions, even though they were good pensions; they were not only final salary schemes, but were index-linked in many cases. Millions of those people now find themselves without the benefit of any contributions made in those years, and if they start contributing in their 40s and 50s, it is almost impossible for them to catch up without paying 20 or 25 per cent. of their salary. There is a massive crisis on the horizon, and the problem was the result of the actions of the Conservative party.
The great crime was on personal pensions. I fondly remember a golden moment when I was sitting on the Benches where the hon. Member for Bournemouth, West (Mr. Butterfill) is sitting now and challenging the then Prime Minister about personal pensions, which were being wickedly oversold by very deceptive advertisements. Mrs. Thatcher told me that I was against choice because I was a socialist, but the choice that she gave people was that of jumping over the cliff and abandoning guaranteed schemes that would have given them a final salary pension that was index linked in many cases, and moving on to the hopeless gamble of personal pensions. That was the great sin of the Conservative party.
Mr. Francois: I shall not contest for a moment the suggestion that the hon. Gentleman is a socialist, as his record is perfectly clear. I have listened to his argument, but does he accept that many people rely on a final salary scheme from their employer'? Whatever he says about the 1980s, it is undeniable that in the past year to 18 months, company after company has been abandoning those final salary schemes. There must be a reason for that. We would argue that it has happened because of the different tax treatment introduced by the Government. Does he not accept that the abandonment of a large number of those schemes is a very serious issue for the people who work in the companies in question?
Paul Flynn: The hon. Gentleman knows that there is a stampede away from final salary schemes. I agree with the hon. Member for Tiverton and Honiton (Mrs. Browning) that that is likely to be irreversible and will continue. It is very difficult for us to say to young people in their 20s that they should invest in schemes that will lock up their savings for several decades, which will turn out to be money purchase schemes and will be likely to provide very poor value. What we currently tell our young people—I am sure that we all do so—is that their best way of ensuring prosperity in old age is to go into property. That is another reason why the savings ratio has gone down. The advice is that it would be sensible for grandparents to have stakeholder schemes for their grandchildren, but that it would not be sensible for the young people themselves to do so, for reasons that we know about and because of the way in which things have developed.
SERPS and the basic state pension were the two firm foundations and they have both crumbled a little in recent years. The Labour Government, to their credit, have given increases across a range of benefits for retired people. The amounts are far greater than anything that has been given for at least 30 years, so we can take credit for that, but what retired people now want is the promise, which no party is currently giving to them, that the basic pension that they receive will not fade away with inflation. They are rightly terrified of a disappearing income that will reduce their ability to buy.

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SERPS was our creation and I appeal to my right hon. Friend the Secretary of State to re-examine it and rediscover its virtues, which were summarised by the National Pensioners Convention in evidence given to the 1997 pensions review. First—he made the same comment in answer to one of my hon. Friends—it gave this point as one of the main virtues of SERPS:
"Compared with salary-related occupational schemes, it offers total portability and a fairer method of calculation than final salary."
That is what everyone wants—a bit of security. The NPC also said:
"Compared with money-purchase schemes, it offers defined benefits…Compared with either, it offers the possibility of…enhancing pension rights during periods of non-earning."
We can now add a fourth advantage:
"as a pay-as-you-go scheme, it is not dependent on the vagaries of investment markets."
So what are the Government doing about SERPS? A change of name to "state second pension" has been accompanied by two major improvements, a much better deal for contributors with low earnings and credit both for disabled people and for carers. The 1998 Green Paper, however, proposed a more fundamental change—that from about 2006 the state second pension should cease to be earnings-related for most people, becoming a flat-rate pension like the basic pension. The assumption was that by then stakeholder pensions would be firmly established, and that there would no longer be any need for earnings-related pensions provided by the state.
It is not yet clear how successful stakeholder pensions are likely to be in reaching the low-to-middle earners for whom they were intended, and about whom many of us are very concerned; but the need for a high-quality state earnings-related pension scheme has never been more obvious. The debate gives the Minister an opportunity to clarify the Government's intentions. Do they still intend to destroy the best of what remains of SERPS in a few years' time? If not, will they consider seriously what changes are needed to re-establish it on a firm financial basis and restore public confidence in the scheme?
Poor old SERPS has never been sold. It has never been promoted. Indeed, during the 1980s there were campaigns running it down. The Midland bank, for instance, urged people not to take it up when they could have a £5,000 gift from the Government. But here we have a scheme of quality with guarantees at the end—a scheme that we are allowing to be run down.
The other part of the foundation is the basic state pension. Over the last five years, we could have increased it by the top level of inflation or the level of earnings. We have done that with a number of other benefits—we have delivered for pensioners—but if only we had taken the small step of restoring the link for as long as possible, and given the current inflation rate we could probably have done so for the foreseeable future, today's pensioners would feel much more secure.
I believe that the main lesson of the past 30 years is the failure of the private pension industry. A vast amount of money is lost in administration, selling and commissions, whereas the basic pension scheme represents good value in that less than 1 per cent. is lost in administration. We should recognise the multiplicity of
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crises affecting all the groups of people involved, and realise that we can tackle them only by restoring the basic state pension, restoring the link and restoring SERPS to its old level, and by investing in that. We should not depend on the private pension industry: we have seen the way in which the wolves in some of those companies have ravaged the pensions of millions over the past few years.
The only way in which we shall achieve a pension guarantee for the future is by using compulsion at many levels of society. I do not believe that, without that compulsion, we can convince the young and middle-aged generations of the need to make the massive contribution to their pensions that will assure them of an adequate income in retirement. We must also face up to something which, although it is obvious, we rarely address—the need for a flexible retirement age. The Queen, who says in her mid-seventies that she intends to go on and on, is a magnificent example to us all as she approaches the prime of life. Many of us have similar ambitions. To achieve them we must go on earning and not raid our pension schemes, allowing others to take advantage of them.
5.19 pm
Mr. James Arbuthnot: I declare my interest, happily, as a barrister and, rather less happily, as a policy holder of Equitable Life, among other pension companies.
I have already found this debate extremely interesting, particularly the exchange between the hon. Members for Croydon, Central (Geraint Davies) and for Northavon (Mr. Webb) about the virtues of the Australian pension scheme. The virtues of compulsion in Australia were funded in the first year by the trade unions agreeing to at least partially forego any pay rise for that year. That is something that this country ought to examine with interest.
This is a vital debate, and I shall be extremely complimentary, if I may, about my Front Bench for choosing to spend the entire day on this important subject. This issue is central to the whole world: how do we cope with the fact that we are all living longer? If one puts it as simply as that, it looks as though there ought to be a pretty simple answer. Unless we want to live in increasingly abject poverty, we must either work longer or save more money—or, preferably, a mixture of both. It would be preferable for the individual to be able to choose the extent to which he or she worked longer, or saved more, but I believe that there must be an element of one or the other, or both.
It will be up to the Government to decide whether to achieve this by encouragement, compulsion, or, perhaps, a mixture of both. What we should not do is retire earlier, save less, or—still worse—both. Unfortunately, however, that seems, in many cases, to be precisely what is happening now. I would be happy to see an increase in the element of compulsion. I personally prefer the idea of encouragement, but if that is not going to work, we have no alternative but to go down the route of compulsion.
I am disappointed that the Government continue to give the impression that the structure of pensions is basically right. After the important announcement by the Secretary of State yesterday about the difficulties that his Department is having with his figures, it may be that he will wish to revisit the question of whether the structure

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of pensions is basically right. I hope that he does. There is a massive problem in this country, and in the west, but I hope that he will also treat this as a massive opportunity.
In relation to the fact that we need to work longer, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) grasped that nettle when he raised the working age of women to 65 in the Pensions Act 1995—when I was a junior Minister in his Department. That was obviously right; women live longer than men, and for them to be retiring earlier than men was daft. With that one action, my right hon. Friend saved more money for the country than any other Minister or Government in history. Looking back, however, I think that we can ask whether we went far enough. We are still living longer. Every decade, we seem to live another year longer. We are not, however, gradually raising the retirement age on an automatic basis to take account of that. That is something that we ought to consider.
I did not get the impression from the Secretary of State's speech that he was focusing on that need. He said at one point that the increase in life expectancy means that pension funds have to go further than ever before. I am not sure that that is the right way of looking at it. We need to increase pension funds, and make sure that they do not have to go further than ever before, because we are working longer.
Kali Mountford: The right hon. Gentleman makes an interesting point about people living longer. Is not that a good reason why people should not draw down on annuities early?
Mr. Arbuthnot: That may be a good reason why people should not draw down on annuities early, but I am making a different point, which is that the Government should focus far more on the future. This is a question of sentiment. We should encourage people to look forward to their old age, which they naturally do not like doing. People put off thinking about it, because they do not want to envisage growing older. They prefer not to think about their retirement age. If they have a pot of money, they may be tempted to spend it now. We should encourage them to leave money for their old age and to save as much as possible.
The trouble is that we do not seem to be saving more money: we seem to be saving less under this Government. Opinion polls suggest that most people think that there will not be a state pension by the time they retire. At a time when we are living longer, we are saving less and retiring early. It seems as though the world is going mad.
We think that we are superior to other European countries because we are saving more in funded pensions, but the position is not much better in this country. We have an extremely serious problem. When I was in the Department of Social Security, as it was then, I said that we always had more money in funded pensions than the whole of the rest of Europe put together. How complacent that was. Although that remains true, we have a major problem. I did not envisage the coming into office of a Government who do not appreciate the need to encourage people to put money into pensions.
The reason I say that is because one of the first and most important steps that the Government took was to withdraw ACT relief. When they came to power, they could have taken up the idea of my right hon. Friend the
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Member for Hitchin and Harpenden of basic pension plus. They could still take up that idea and adapt it in a sophisticated way to the state second pension, as my right hon. Friend has suggested. I think that they should do so, because that would provide every young person with a fund, guaranteed by the Government, as they come into the work force.
James Purnell: Will the hon. Gentleman give way?
Mr. Arbuthnot: I am afraid that I do not have much time left, so I cannot give way.
Such a scheme would build up a fund for young people to give them dignity and choice in their old age. That would be enormously beneficial to the economy of this country.
The Secretary of State has said that the withdrawal of ACT relief was to get rid of a major distortion relating to investment by companies. That may have been a stated reason, but we know that he wanted the money. The effects of the withdrawal of that relief were huge.
Mr. Levitt: Will the hon. Gentleman give way?
Mr. Arbuthnot: I am afraid that I cannot give way, because we have a limit on the time we can speak.
Tesco announced in March 2000 that there would be a 15 per cent. increase in employee contributions to final salary schemes. I agree that there should be increases in contributions to final salary schemes, but that increase was eaten up immediately by the Government's withdrawal of ACT relief.
People are reluctant to think about their pensions. They need to be cajoled into thinking that the Government believe that it is a good thing to invest in funded pensions. When someone like Robert Maxwell comes along, it takes years for the country to recover in pensions terms. When something like mis-selling comes along, it takes years for the country to recover. My right hon. Friend the Member for Hitchin and Harpenden sorted out the problem of Robert Maxwell, and he began to sort out the problem of mis-selling. But when a Government remove £5 billion every year from pension funds, it will take years to recover from it. Unfortunately, the Government have no intention of allowing the country to recover, because they do not intend to change the situation.
We do not have to look into a crystal ball—we can see the effect of the Government's withdrawal of ACT relief in the fall in the savings ratio from 9.5 per cent. of earnings to 3.75 per cent. of earnings. I applaud the Government for saying that funded pensions should move from 40 per cent. to 60 per cent. of pension provision, but we have come to learn that it is necessary to look not at what they say, but at what they do. When we say to the Government, "Stand and deliver", we mean, "Stand and deliver on your promises." Their commitment to move from 40 per cent. to 60 per cent. is excellent, but they should deliver on it. Unfortunately, I suspect that they take it to be an invitation to act as a highwayman and to get rid of the benefits of the strong pensions structure that we had under the Conservative Government.
5.31 pm
Kali Mountford: Today, we have been offered a rare treat—an opportunity to debate policy with Conservative Members. I congratulate them on that. It is rare because, in many such debates, the Opposition's interest is not in public policy, social policy or anything to do with what interests people outside this House. According to my recollection, this must be my eighth Opposition day speech on pensions.
The debate has drawn us once again into our old comfort zones. We have returned to the old class struggle that we are so used to, and Conservative Members have fallen back on their faithful comfort zone of the markets. In talking about what they would do with funded pension schemes, no Conservative Front Bencher mentioned poverty, people in middle-income brackets, people who have no income because they are carers, people who are living in dire straits because of a failed previous scheme, people who lost all their savings under Conservative Governments, or the need for better regulation. Although Conservative Members seem to have no memory of their 18 years in power, they have a clear memory of the past five years—but not of what has changed in that time. They have forgotten about the complete change to the way in which we deliver support to elderly people in our society. That forgetfulness is the result of the narrow scope of their thinking, which comes down to one change in tax regulation.
Conservative Members do not have a wider vision of how the markets affect funded pension schemes overall, so what sort of vision are they offering us? Advance corporation tax schemes, which were so beloved of them, benefited the shareholders of pension schemes. They were made an offer: "If you take your dividend you'll get a 20 per cent. rebate off the taxpayer." That did nothing to help people to get a better pension when they retire.
Conservative Members made much of the £5 billion a year that is being lost—that is arguable, because it should be offset by the 3 per cent. cut in corporation tax—but they should have looked at the measures as a whole. We are trying to introduce some sense into the market by saying, "If you are going to use our money, which we have invested in your fund, at least put it into long-term investment and do not waste it on shareholder dividends, because that is the wrong thing to do." We cannot ignore markets and their actions—or, sometimes, inactions. Stock markets will have periods of volatility. It is sheer folly to consider a pension period such as this in isolation, because it is narrow in the context of the whole history of funded pension schemes. There has been market volatility before, and there will be again.
The current market volatility is not surprising. Let us look at the markets. What happened with Equitable Life? There was a complete ignorance, or an "ignore-ance", of its duty. [Interruption.] I wonder how Hansard will deal with my pronunciation—it has a problem. There was an "ignore-ance" of its reinsurance duties. From as long ago as 1983, the company ignored its clear and obvious duty to behave properly; the problems did not occur magically in 1997.
Enron cannot have escaped our notice. We now have WorldCom, and there will be others. When the Treasury Select Committee took evidence on the various problems in marketplaces, we found, again and again, that there was over-optimism, a complete failure to ensure duties and a
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failure by accountants to ensure that people's investments were being taken care of properly. Is it any wonder that there is now no faith in markets?
Mr. Redwood: What would the hon. Lady say to the workers of Caparo, who tonight are facing the closure of their final salary scheme and a substantial worsening of their pension conditions? Would she deny that their fund is being closed because of the dividend tax, or is she saying that they are rich enough to be able to stand it?
Kali Mountford: I would say to the right hon. Gentleman and to everyone having problems with final salary schemes that to try to narrow the debate and to blame one mechanism is complete folly. We must look at schemes and the markets as a whole.
John Robertson: Does my hon. Friend agree that the companies who are winding up these final salary schemes seem to be using that as an excuse not to plough money into their employees' pension funds?
Kali Mountford: In my experience, it is not unusual for any company that is failing on any ground whatever to avoid the real and honest issue and to try to blame somebody else, or another simple mechanism. That is easier for them than being honest with the people whom they are letting down.
James Purnell: Is my hon. Friend aware that the hon. Member for Daventry (Mr. Boswell) said exactly that in Committee recently? He said:
"There appears to be a growing propensity among employers to pull out of the business of providing contributions themselves."—[Official Report, First Standing Committee on Delegated Legislation, 14 May 2002; c. 4.]
Companies are doing exactly what my hon. Friend says—using Government policy to hide the fact that they are trying to cut the salaries of their employees.
Kali Mountford: They are not the first and they will not be the last. I suspect that we will see more of that. That is very disappointing, but what should we do about it? There are mechanisms that we should employ and I hope that Pickering will pick up on some of the market failures and start to look at better regulation.
The Conservative party is usually very resistant to better regulation, which it regards as a burden on employers. However, it is a bigger burden for pensioners, who, as we are now witnessing, have to pick up the pieces of failed market activity.
There is also complete "ignore-ance"—I use that word again—of what has happened with pension holidays. I have heard a few figures bandied around on the issue today, and I will throw one into the pot myself. Tax office figures show that an estimated £19 billion was taken out of pension schemes through contribution holidays by employers and employees—
Several hon. Member rose—
Kali Mountford: I seem to have caused a stir. I shall give way to my hon. Friend.
Sandra Osborne: I was puzzled when the hon. Member for Havant (Mr. Willetts) mentioned a figure of less than £2 billion. However, the TUC has said that, according to Inland Revenue statistics, employers took contribution holidays or reductions between 1987–88 and 2000–01 to a value of £18.57 billion. Does my hon. Friend agree that that is a more accurate figure?
Kali Mountford: It is very close to my own figure of £19 billion.
The TUC should take some cognisance of this, because it, too, encouraged pension holidays, as it believed that they would keep companies going that in fact needed more investment, rather than short-term mechanisms such as using pension funds to prop up a failing business.
Mr. Butterfill: While the hon. Lady is talking about pension contribution holidays, she may care to reflect on the fact that the Government have taken a holiday on the parliamentary contributory pension scheme for the past 10 or 11 years, and that in the past year alone it was 11 per cent.
Kali Mountford: That did not really take the debate any further forward.
Mr. Bill Tynan: Does my hon. Friend recognise that, in addition to pension holidays, many companies took the opportunity to raid the funds of pension scheme surpluses, using them for their own ends? Is not that a tremendous problem that should have been resolved at the time?
Kali Mountford: That neatly takes me back to the point that I am trying to make. We really need regulation that will safeguard funds if we are to tackle the issues rightly raised by the right hon. Member for North-East Hampshire (Mr. Arbuthnot). Not only do we have an ageing population but the number of people in work will continue to fall, because of demographic change. Currently, we have a high number of people in employment, but the problem is that the total population is falling, so the gap between the number in work and the number who have retired will continue to grow. We must take real cognisance of what the right hon. Gentleman said.
People in work will have to pay a larger proportion of their income to support those who have retired. It is folly to keep peddling the myth that we ever had properly funded pension schemes. The truth is that all schemes were pay-as-you-go, although some were dressed up in different ways. Today's workers pay for today's pensioners, whether in the state or in the private system. If we are to tackle that thorny issue, we must take account of the sort of savings that we should be encouraging young people to build up today.
I am only sorry that time is so limited that I cannot say any more.
5.42 pm
Mr. John Butterfill: I was interested to hear what the hon. Member for Northavon (Mr. Webb) said about encouraging a wider discussion on this important topic. Such wider discussions have been going on for a long time. People have been talking about
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the Australian proposal, which some of us have advocated since before he came into the House. We should remember that the Australian scheme is quite complex. As my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot) said, it requires the trade unions to agree to forgo their annual pay increase in the year in which it is brought in, and then to moderate their pay increases in subsequent years. It also includes a proposal whereby the employees are gradually pushed into compulsory contributions. That has not yet been implemented. I wonder why. It was also accompanied by massive mis-selling, on a scale that dwarfed anything that happened here. Before we rush into any such scheme, we must examine it with more care and deliberation.
The problem is that the whole pension system—especially for private pensions—is in crisis. There is a massive loss of public confidence, and it is essential that it be restored. There is no evidence that that is happening. Only 25 per cent. of companies are now inviting new entrants into defined benefit schemes, the Government's pension figures are wildly wrong, as they now admit, and the savings ratio is down to its lowest since records began. The Minister said that that is a reflection of the wonderful state of the economy. The economy was wonderful when the Government inherited power, but we now have a record and massive balance of payments deficit, the lowest—and declining—growth in the whole of the European Union, and a manufacturing industry that is in recession. That is not my definition of a wonderful economy, and nor is it true to say that a precise correlation exists between the savings ratio and the health of the economy. I urge hon. Members to be cautious. As all independent commentators agree, the Chancellor's growth forecast will not be met. Substantial tax increases are therefore likely, which will prove painful in years to come.
The point is that the public are losing confidence in this sector. Many are buying property not because doing so brings a tax benefit—it does not—but because they consider property the only safe place in which to put their money. There has been a failure to regulate the system properly; indeed, the case of Equitable Life constituted a massive failure of regulation. The actuary for that scheme should have known that the commitments taken on by the company required far greater reserving, and the Treasury that was responsible at the time for prudential supervision should have so required it. People have blamed the Financial Services Authority, but it came rather late to the case; it was the Treasury that failed to regulate.
Some hon. Members say that nothing was right before, and they utter the mantra of mis-selling, but only a minority of personal pension schemes were mis-sold. Had we not introduced them, the sum total of pension provision would be very much lower than it is. Moreover, they were mis-sold in relation to the occupational schemes that people were taken out of. Of course, as we now know, some occupational schemes are failing. Those who thought that they had been mis-sold a scheme might be glad that they bought a personal pension, now that they see their former occupational scheme failing. It all depends on what point in history one considers.
The Association of British Insurers estimates that the pensions savings deficit is about £27 billion. There is a great need to bolster public confidence, and perhaps to move to compulsion. In that regard, I agree with many Labour Members. In a speech to this House nearly two

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years ago, I cautiously advocated compulsion for everybody, not just employers. At the same time, the Government must themselves do something to boost pension savings. What have they done so far? They have introduced a stakeholder scheme that had one beneficial effect: it reduced costs. As the right hon. Member for Birkenhead (Mr. Field) pointed out to me, the effect was major, and we agreed that reducing costs to an industry average of about 1 per cent. was a marvellous achievement. However, the scheme has not proved efficient in reaching its target audience.
The problem is that linking a scheme such as the stakeholder scheme with a minimum income guarantee creates a considerable disincentive to save for those on the lowest incomes. Despite what the Minister said, that problem is not met by the pension credit, which, as he knows, is an extremely complicated scheme. Many of those representing elderly people say that it would be beyond the wit of most of them to work out how to implement it, and that they will not necessarily claim it.
What else have the Government done to encourage people to save? Much has been said about the £5 billion a year that they have taken out in respect of advance corporation tax. Some say that that does not constitute a huge sum, but those with money purchase schemes have to increase their contributions by about 20 per cent. just to stand still. That is a lot of money for most people who are saving, but more important is the message that that sends—a message that has been reinforced by, for example, underfunding of the contracting-out rebate to the tune of £1.5 billion a year. It has been reinforced by other Government taxation and stealth measures. For example, people with personal schemes can no longer take advantage of carry-back arrangements. One advantage of the personal schemes was that people could pay in when they could afford it; when they had a lean year they did not need to pay in, but if they then did better they could claw back from previous years. That arrangement has been prevented by the new Inland Revenue rules. What sort of message is that to send to people who want to save for their retirement?
The Inland Revenue is the villain of the piece. One message that I should like to get across to Ministers is that they should have the courage to face up to the Inland Revenue, which thinks that every pension scheme devised—indeed, almost every savings scheme—is a tax avoidance device for the rich. It is perfectly easy to frame legislation to prevent tax avoidance. The Revenue fears loss of income to the state, but it forgets that if it encouraged people to save for their old age, the state burden would be so much less as to outweigh any temporary disadvantage. That is why it should consider annuity reforms. We need worry less about the type of person who has an annuity than the overall message that it gives. Young people on modest incomes say to me that they will not enter a scheme if it means that they must buy an annuity at the end of it. They want greater flexibility.
The Government should tackle the Inland Revenue. They should take up the very good proposals made today by the Association of British Insurers, to which the hon. Member for Northavon referred. Some of them are excellent and the ABI thinks that, if implemented, they would produce an aggregate of about £10 billion of savings.
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I believe that the Government are doing one thing right in asking experts to advise them. What Ron Sandler and Alan Pickering are doing is extremely worth while. I just hope that when the reviews are completed, the Government will have the courage to implement the recommendations.
5.52 pm
Mr. Frank Field: For the past two days the House of Commons has been reflecting feelings in the country. At Question Time yesterday, the Order Paper was dominated by questions on pensions. As for today, I cannot think of a previous debate on pensions that has had a time limit on Back-Bench contributions. The House is reflecting the urgency that is felt in the country, and in following the comments of the hon. Member for Bournemouth, West (Mr. Butterfill), it is thinking about what can be done so that our constituents do not face a leaner and meaner retirement.
There have been two significant changes with the change in the holder of the office of Secretary of State for Work and Pensions. The first is that, during this debate and on other occasions, he has called for a new consensus. In looking for that new consensus, I make a plea for us to look at the Order Paper. Constituents who may be watching the debate and seeing the normal way in which we behave may not have the opportunity of reading the motions and amendments on the Order Paper. I suggest that much of the consensus that the Secretary of State wishes to see in this area of policy is on the Order Paper, and I should like to highlight those points.
The official Opposition talk about the need to increase savings and funded provision. Although one or two people with eccentric views on this side of the House believe that that is not the way forward, the consensus is that we should pursue that policy. The Opposition's other suggestion is to cut regulation. Indeed, we are looking for the Pickering and the Inland Revenue reports to give a framework within which the Government can begin that process.
The Liberal Democrat motion breaks new ground by arguing that we should not have arbitrary targets regarding funding or pay-as-you-go schemes but should instead ensure that an increasing number of people are on a decent pension. I would enter a small amendment, in that we must think about how those pensions are delivered. My hon. Friend the Member for Colne Valley (Kali Mountford) was right to say that, ultimately, pensioners are making a claim on this year's national income. We have to debate the most effective way of delivering that claim. In this country, generally speaking, people have a greater chance of that claim being delivered if they have ownership of capital than if they rely too heavily on pay-as-you-go schemes. However, there needs to be a balance.
The hon. Member for Northavon (Mr. Webb)—I call him my hon. Friend, because he is in these matters—said that we must increase the state element in our retirement package. Although some people not too far from the Chamber quite properly claim that the existing pensioner population should have a much larger increase in the state pension, I think that a consensus will emerge, at least in the first instance, that we need to weight the increases in state provision towards the oldest pensioners who are, in general, our poorest pensioners.

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My hon. Friend the Member for Northavon also made the point that we need to simplify pension provision because we are strangling occupational pensions, the one big welfare success of the past 100 years. In doing so, we need to reduce the numbers of people on means-testing.
In the Government's amendment to the motion, they rightly draw attention to the extra resources that they have made available to today's pensioners. No other Government's record can compare. The problem is that we are giving that form of help in a way that is undermining long-term provision of savings. Clearly, some changes have to be made; so the Government's recognition in their amendment to the motion that
"there is still more to do"
is very welcome.
I conclude with a suggestion about what "still more to do" might mean. It comes back to the point that my hon. Friend the Member for Northavon made about compulsion. This is not a debate about whether or not to have compulsion. There is already compulsion, in that taxpayers pay 4p in the pound on the standard rate of tax to finance means-tested benefits for people who, for reasons that are sometimes very good and sometimes not so good, have been unable to provide adequate pensions for themselves. Under the Government's projections, that compulsion will rise to 12p in the pound when the pension credit is fully operative. That form of compulsion is not sustainable.
The Government say that there is still more to do. I make a plea that, when the door is open to the reviews by Pickering, Sandler and the Inland Revenue, we should recognise that our biggest failure as a country has been our failure to provide people with an adequate basic pension in the first place. I believe that such a pension cannot be delivered simply through a pay-as-you-go scheme. We need to roll up our pay-as-you-go scheme with funded provision so that we offer an adequate pension for everybody.
If we begin to achieve that objective, many of the problems that we have spoken about will be resolved, because we will need less regulation. We will not have to regulate schemes to ensure that they deliver the funds to make good the failure to provide an adequate pension. The worries about mis-selling will be fewer, although not eliminated, because people will know that every penny they save will be added on to their basic, adequate pension rather than being subtracted in the way that governs so much of our current provision.
For two days running, we have reflected the concerns of our constituents, many of whom are genuinely worried that what they thought was to be a decent pension provision and a pension promise will be stolen from them, and who fear that unless the House of Commons acts soon, they will have a leaner and meaner retirement.
I very much welcome the comments made by the Secretary of State during the past few days, because he has called for a national consensus, the beginnings of which are on today's Order Paper. The cornerstone will be to implement an adequate first pension that is part funded and part pay-as-you-go. Would not it be a treat if, instead of our having to go through the Lobbies later on, the Government accepted that there is good in all the motions on the Order Paper, and if all the parties decided that the important thing was to begin to establish that national consensus instead of having three rather boring Divisions at 10 o'clock?
6 pm
Mr. John Redwood: I have declared my interest in the Register, and in the course of my remarks I shall draw on some of my experiences before I became a Member, as a director in charge of investment research and a pension fund manager in charge of considerable funds in the City. That experience seems very relevant as current events unfold.
As I listened to the Secretary of State's remarks, I found it curious that the man who has just managed to get out ahead of the private finance initiative and public-private partnership disasters that are likely to implode in the Treasury—under the rigged accounting that the Government are going in for—should be given the rather difficult task of picking up the unfolding pensions crisis so nimbly left to him by his predecessor. I congratulate the Secretary of State; I admire him for many reasons, but this challenge will prove extremely difficult. It may concentrate his mind to realise that if he fails, he will be off, like his predecessor, to try to sort out the railways, which will prove an even more difficult task for the Administration.
Mr. Peter Viggers: Not only would the right hon. Gentleman be in charge of sorting out the railways, he would also have to sort out the air traffic control system, having previously told the Labour party conference that our air was not for sale.
Mr. Redwood: My hon. Friend is right. That is one of the PPPs that will cause continuing hassle and call into question some of the accounting techniques.
The Secretary of State used curious arguments. He said that the low savings rate was a sign of great success in our economy. He seemed to imply that when we had higher savings rates and people were making much better provision for their retirement and other events in their lives, that was a great failure. I would rather swap our failure—higher savings rates—for his success. Extending his argument, if we took 20 per cent. off his salary—as the Government took 20 per cent. off the dividends going into pension funds—the Secretary of State would feel richer. It would not feel like that to anyone else, but that is the topsy-turvy world of the Secretary of State's economics, which seem to invert everything known to the rest of us.
The Secretary of State also told us that the dividend tax had been extremely good for British businesses; it had been wonderful to take some of their money away and that was one reason they were investing far more money. If that is the way to attain higher investment targets and raise productivity, why do not the Government take even more money away from companies?
Opposition Members are shaking their heads—they know that the Secretary of State's argument was fatuous. The Government have made a series of tax raids on pension funds and companies and they have suddenly woken up to the awful fact that the money is running out. There simply will not be enough money to pay all the promises, meet all the expectations and pay all the bills that the Government blandly assumed would be paid and met by the private sector, despite their tax policies.
Let us consider some of the figures. As some of my colleagues had to point out to the Government, the £5 billion is £5 billion a year deliberately removed from

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pension funds by the Government—money that the funds could otherwise have invested. Worse than that, the removal of that money must have an impact on the value of all the shares held in the portfolios of those pension funds. That is why I intervened to ask the Secretary of State a simple question: if the Government decide to take £5 billion away from companies, will that lead to share prices rising or falling?
Everyone outside the House—with or without investment experience—could give the Secretary of State the answer. I will give him the answer—based on 15 years' experience at senior level in a leading investment house: all things being equal, it will lead to lower share prices. That is exactly what has happened in recent years as the full consequences of the dividend tax have worked through the investment markets in Britain.
When the tax was imposed, companies were expensively rated. For example, if we take a modest rating of 16 times below the market average reached as the market rose, we would expect £80 billion to be wiped off shares in Britain as a direct result of imposing a tax of £5 billion a year on company profits and dividends. A similar figure is reached by a calculation based on dividend yields. I am sure that colleagues understand how the arithmetic would work.
I have consulted people outside who have told me that my figures were rather modest. Many people would expect £100 billion or more to be wiped off share prices as a direct result of the £5 billion tax. There is a double whammy for the pension fund; it is short of the income to reinvest and the capital value of its underlying assets is falling.
The Government made the extraordinary decision—the Chancellor of the Exchequer again—to impose a substantial tax on telephone companies that wanted to remain in business and continue to develop the mobile telephony that is so important to their future. The Government worked out such a clever system that they managed to relieve the leading telephone companies in Britain of £22.5 billion. Does the Secretary of State think that taking away £22.5 billion would make those companies stronger or weaker? Will it lead them to invest more or less? Will it be good or bad for their share prices? Drawing again on my past experience, I can give the Secretary of State the clear answer that he was unable to offer the House: it is bound to lead to a sharp reduction in the share prices of those companies.
These matters are important, because when the Chancellor imposed that tax, those companies were extremely popular with investors and pension funds in the City, which had massive positions in leading companies such as Vodafone and British Telecom. The share prices of those companies have fallen far more sharply and devastatingly than the market averages, partly because of the Chancellor's clumsy intervention and the deliberate reduction in shareholder value that he created.
If that £22.5 billion—a one-off amount—is spread over a five-year period and we apply a multiple well below that on which telecoms were then selling on the stock market, we would expect their shares to fall by at least £90 billion, as a direct result of the £22.5 billion being removed from their coffers. What happened in practice? Overall, share prices fell by much more than that. At its
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peak value, Vodafone was worth more than £240 billion in the stock market; pension funds had very large positions in that company. Today, it is worth about £60 billion. About £180 billion was wiped off the shareholder value of Vodafone, some of which is directly attributable to the decision of Her Majesty's Government to lift so much money off the company.
The situation was similar for British Telecom, which also held a large and favoured position in many pension funds; it reached a peak value of about £100 billion. Today, the value of BT and mm02, a spin-off of the company, is about £26 billion. About £74 billion has been wiped off the value of BT. Again, part of that is the direct result of that very expensive tax imposed by the Government.
Mr. Gardiner: Will the right hon. Gentleman give way?
Mr. Redwood: Briefly—I have plenty to say.
Mr. Gardiner: I am grateful to the right hon. Gentleman for giving way, especially in view of the time limit.
I have been listening carefully to the right hon. Gentleman. Surely he would accept that, especially in the case of the two companies in the telecoms industry to which he has referred, other extremely significant factors had a far greater impact. For example, they over-extended themselves in the amounts that they paid for band wave. To blame the whole fall in share price on the introduction of the ACT regulations is beyond the pale.
Mr. Redwood: The hon. Gentleman has not been listening. In the case of Vodafone and BT, I have been putting more blame on the tax raids specific to the telecoms industry in the United Kingdom. The UK raid had the biggest impact on Vodafone and BT. Furthermore, it was mimicked in Germany, which did not help. As I explained—if the hon. Gentleman had been listening—the fall in Vodafone and BT was far greater than the amount I should have expected as a direct result of the Chancellor's actions. My modest calculation blames the Chancellor for £90 billion of the fall. A lot of that loss was incurred by British pension funds, so they will find it difficult to pay the pensions—[Interruption.] Labour Members seem to think this is great fun, but I warn them that many of their constituents are members of those schemes. Many of their constituents who do not have high incomes depend on those schemes for their future earnings in retirement.
Rob Marris: Will the right hon. Gentleman give way?
Mr. Redwood: I wish I could, but there is not enough time.
Many people out there with modest life prospects and far less generous pensions than we receive in this place, courtesy of the taxpayer, must today face up to a crisis. Perhaps their scheme has been closed to new members, perhaps its terms are being worsened, or perhaps it is being wound up because it cannot meet its obligations. That is happening because of the combined effect of taking money away from pension funds, taking money away from companies and the dramatic reduction in share prices.

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Of course, international factors affect share markets, too, but much of the drop in British stocks and shares has been made in 11 Downing street by a Chancellor of the Exchequer who did not know when to stop taking money away from people. That is a disaster for pensions and for savers, and it goes some way to explain why the savings rate is so low and why companies such as Caparo, which is presided over by a chairman who is a Labour peer, must face extremely difficult choices, which I am sure that they would prefer not to face. The money is running out, the shares are not worth enough, the incomes are not flowing in, the Chancellor has squeezed the pips too much and it is beginning to hurt very badly.
The Government have launched new types of pension: stakeholder pensions. Many people think that they are mistake holder pensions—they do not seem popular, and they do not seem to be touching the parts of the income scale that they were designed to help. They, too, will struggle for exactly the same reason. The Government are creating an atmosphere that is hostile to enterprise, to profits and to dividends. I fear that the market has not yet adjusted fully to the massive national insurance hike coming next year. Let us hope that it has discounted some of it. Some £8.6 billion a year will go out of companies. Let us say that half that—£4.3 billion—is directly attributable to and payable by the leading companies quoted on the stock exchange. One would expect a further £50 billion or £60 billion to be wiped off share values as a direct result of that money going out of companies.
Do the Government care? Will they cancel the measure at the last minute? Do they not see that a tax on jobs is the last thing that is needed in the current parlous situation? Pensions are in a funding crisis, much of which is the result of bad policies at No. 11 Downing street.
6.12 pm
Mr. Terry Rooney: It is good to see that Vulcan economics lives on. There is a danger in debates of this nature that we try to resolve policies on the basis of the last three weeks' headlines. Much of the Opposition's contribution has been on that basis. Given the nature of the subject, however, we need to take an extremely long-term perspective on pensions and on how people arrive at the pensions entitlement.
Looking back, the biggest single advance in pension provision for the majority of people was probably made by the 1975 changes that introduced SERPS. For the first time, compulsion was introduced into the system for a second pension. Of course, many of the benefits that accrued from that were wiped out by the disastrous changes that took place in the mid-1980s. Notwithstanding that, people retiring today who have contributed only to SERPS on fairly average earnings are getting about £60 a week extra. In half a working life, that is a significant advance, which should not be knocked.
If we consider the three different elements of the state second pension, personal pensions and occupational schemes, the biggest disaster for occupational schemes was caused by the 1988 changes, which led to 2 million people coming out of occupational pension schemes, becoming the victims of mis-selling, and, to date, receiving £13 billion in compensation. With the best will in the world, taking £13 billion out of the asset base of pension companies has an effect on their reserves and on the amount that they can afford to pay out in future years. That has also had a significant impact on, for example, so-called low-cost endowment policies.
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Ultimately, the key must be a significant element of compulsion as well as a significant incentives arrangement. Most people do not know about the incentives that already exist in the schemes. They are totally unaware, for example, of the national insurance rebates and tax relief on contributions, which are not sold well enough. That is partly because the whole focus and emphasis—especially following the 1988 changes—is on the personal pension. That puts the public in the hands of dodgy sales people who are not driven by the future needs of those to whom they are selling but by commissions.
The sad thing about personal pensions is that so many are taken out and cancelled in the first three years, at which point the individual concerned has lost every penny that they have put in, as it has been wiped out by charges and so on. As the hon. Member for Bournemouth, West (Mr. Butterfill) highlighted, the beauty of the stakeholder pension scheme is that it has fixed those costs and driven them down across the entire life assurance sector. They will never return to their previous levels.
Mr. Arbuthnot: The hon. Gentleman makes a good point about driving down costs generally. Is it not a real problem that some costs have been driven down so far that many of the new stakeholder pensions are being issued at a loss? That is not sustainable, and it cannot continue.
Mr. Rooney: I would always call into question people like pension providers and the Association of British Insurers when they start talking about losing money, in the same way as I question their definition of the shortage in pension provision, bearing in mind how much of that they will want to keep for themselves. We need to recognise that they are seeking business. None of the big providers of stakeholder pensions has stopped selling them—that is the acid test. When they stop selling them, there may be a problem, but they are all in the market, and they all want them. A key change has been made to what used to be an evil level of charges. That regime has gone for ever. Charges have been fixed at I per cent., which everybody said could not be done. Magically, however, once the change comes into force, the market adapts. That key change must be driven through.
Nobody has so far had the courage to grasp the balance between incentives and compulsion. That is a massive challenge for Government—to grasp the nettle of compulsion while being brave enough to match that with incentives that add up to a decent package. Young people—especially those under the age of 25—are, and always have been, a phenomenal problem. At that age, they are first setting up home, getting married, having children, and buying their first three-piece suite. If one tries to explain to them the necessity of starting pension provision, one finds that the issue is so far over their horizon it is not even on their radar. That is always a problem with occupational schemes, as young people have the option of whether to join up to the age of 25. One cannot get them to join. They say, "What's in it for me? Do you want me to lose 5 per cent. of my salary at a time when I have all these expenses, all these bills?" There must be an element of compulsion that matches that in the state second pension. The carrot must be equal to the stick, however, to give people genuine hope and a reason to save at the appropriate levels.
I am sorry that the hon. Member for Bournemouth, West has left the Chamber, as he has an incredible faith that pension providers will make the right decisions. In

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1988, a major pension fund manager in charge of about £44 billion of funds decided to opt out of the equities market totally, and to convert all its funds into cash holdings. Over the next three years, it lost £7.5 billion of income for the funds that it managed.
There are some incredible differences in the track records of pension providers and insurance companies. The returns of some of them—it is the same companies year after year—are such that they should be closed down and barred from the investment business. In general, those companies have paid the highest levels of commission, but their returns are horrendous. There can be as much as a 70 per cent. gap between the best and worst investment houses. The Government need to examine that structure.
It has been only 10 years since the House clamoured for a raft of regulations on pensions to stop the practices that occurred in the Maxwell scheme. There is a great danger in getting rid of all regulation to simplify matters. We only need to lose 1 per cent. of £870 billion, or whatever the figure is, through abuse or weak regulation to have a serious problem. We know what happened with WorldCom and Enron and should be alive to the fact that there are people in this world who will seek any opportunity and use any means available to deprive other people of their money.
It will always be the case that the private sector has cleverer lawyers and accountants than the Government. We need an appropriate level of regulation to protect the interests of our constituents and their future. A landmark judgment by the European Court of Justice in 1994 has not been translated into legislation. The Coloroll judgment said that pensions are deferred wages: they do not belong to the employer or the pension provider but are the property of the individual. Individuals need to know that the state will provide the appropriate regulation to protect their funds so that when they retire they get not a shock but a pension.
6.22 pm
Mr. Peter Viggers: I hope that the debate does not disappear into a black hole, because Parkinson's law tends to apply to such matters. The numbers are so large and the time scale so long that the press do not pay much attention. That is wrong because the debate is important. I am pleased that my party chose to allocate a whole day to it and I hope that its importance is reflected in the press.
In a fiercely competitive field, pensions are the Government's greatest failure. They are condemning millions to inadequate pensions and means-testing. I declare an interest in the general subject as the chairman of a pension fund who has taken an interest in such matters for many years.
From a global perspective, the United Kingdom does not stand too badly against our European colleagues. About £1,270 billion is invested in pension funds in Europe, 90 per cent. of which is invested in three countries—the UK, the Netherlands and Ireland. The disparity is that we value our investment in pension funds in a way different from that of most of our European colleagues and there is a serious funding crisis in the UK.
The right hon. Member for Birkenhead (Mr. Field), to whom we owe a great deal, quoted the Lombard Street research group in an article in The Times on 3 June. He
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said that new inflows into pension funds since the Labour party was elected in 1997 have fallen by three quarters. In other words, the net inflows into pension funds are only one quarter of what they were in 1997. That is staggering.
We also face the problem of outflows caused by longevity and fluctuations on the stock exchange. We all know, however, that actuaries can and do take account of longevity. They tabulate their projections on a very long-term basis, which also takes account of variations in stock exchange values. One cannot attribute the crisis in pension funds simply to those two issues. There is the further problem of FRS17, which requires companies to include a reference to their pension fund situation in their annual accounts. I am pleased that that has been delayed while further discussions take place. There is also the problem of the miserly uprating of the contracted-out rebates, which cost each contracted-out pension fund member about £130 a year.
Those problems pale into insignificance, however, when compared with the Chancellor's raid on pension funds in his first Budget. The £5 billion-a-year raid on pension funds has been the major single factor in causing the crisis in pension funds. It adds up to a £27 billion shortfall, which pension funds cannot sustain.
The pensions debate takes place against a background in which companies find it appropriate to phase out their final salary schemes partly because of projected underfunding and FRS17. It also reflects a changed employment system. It is unusual for someone to stay with a firm for his whole career. Individuals are more likely to move from company to company, which is why many employers regard money purchase schemes as more appropriate.
John Robertson: Does the hon. Gentleman agree, as other hon. Members have, that some companies are deliberately winding up final salary schemes to save money on their costs?
Mr. Viggers: That practice is a reflection of FRS17, which requires companies to take account of their pension fund situation, and of changed employment practices. It is still appropriate in some firms to have the advantageous final salary schemes, but if individuals are not staying with companies for long periods one has to accept that the final salary scheme does not suit such an employment system. A money purchase scheme also has advantages for employees who work for longer periods but who are not expecting to move further up the ladder in their firms, perhaps because they decide to work in a different capacity at the end of their employment, which means that they earn less than when they were younger.
Firms with final salary schemes—this relates to the hon. Gentleman's question—were in the habit of paying 15 to 20 per cent. to the pension fund of each employee, but employers tend to pay 5 to 10 per cent. towards money purchase schemes. If an employer pays 6 per cent. to the pension scheme, the employee contributes about 3 per cent. on average. That 9 per cent. contribution is less than half of what will be needed to allow for a reasonable pension at the end of the employee's period of work.
Those problems add up to a crisis. We need leadership, encouragement from the Government to contribute to pension schemes and incentives. It has been mentioned that people in their 30s and 40s who are concerned with

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child care and furniture buying think that they can defer making a payment to their pension fund, but an early payment would allow a larger fund to build up.
Something needs to be done. What is the way ahead? First, I have no doubt that compulsion in pension funding is necessary. It is not possible to envisage a sensible scheme unless there is compulsion across the board. Compulsion can be supported for those who cannot afford to pay, but compulsion there must be. Secondly, there must be an admission that the guaranteed minimum pension is unfair and unsustainable. It cannot be continued indefinitely. The right hon. Member for Birkenhead referred to the percentage of national product that it will take if it continues.
Thirdly, the Government need to take decisive action to simplify pension schemes and to ease contributions. There must be tax support for contributions to reverse their collapse to only a quarter of what they were when the Government came to power.
I turn now to an area that has not been mentioned. It is one in which we would have expected a reforming Government to be active, and in which this Government have been supine. They have failed to take account of problems in the "trough", whereby individuals employed in government service find that at a time of pay restraint the Government hold back wages, which means that their pensions are also held down. If someone retires on a low wage held back by the Government for their own purposes, their pension will for ever be lower than that of someone who retired when wages were higher. That trough in public sector pensions is unfair and should be rectified.
The hon. Member for Brent, North (Mr. Gardiner) looks uncertain. There are cases in the armed forces where, because of a period of pay restraint, a person of a certain rank retires at a wage lower than that of someone of the same rank who retired before or after him. That individual's pension will be permanently affected, and that is unfair.
Mr. Gardiner rose—
Mr. Viggers: I am afraid that I cannot give way because time is very restricted.
The Government have also failed to reform by upgrading the pensions of those who have retired abroad. It is monstrous and unacceptable that those who retire within the European Union have their pensions upgraded, while those who retire to the old Commonwealth of Canada, Australia and New Zealand do not. That is unsustainable, and any fair, reforming Government would seek to tackle the situation.
The Government have also failed to reform the provision whereby widows sacrifice a public sector pension when they remarry. I had a case recently in my constituency surgery concerning a woman who has been widowed more than once. When she was first widowed she received a pension, which she sacrificed on remarriage. When she was again widowed, she applied for her pension to be restored, and after she had filled in a rather complicated form, it was restored on a means-tested basis. She has now been widowed again, and although her income and circumstances have not changed, she has been told that she cannot have her widow's pension restored. It is wrong that this elderly and dignified lady should not have her pension restored.
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Finally, on a point made by one of my colleagues, the oldest pensioners also deserve further support. Many of them retired after a long period of service and are now very poor. They may be unable to fill in the forms for the various means-tested benefits that might be available to them, and they lose out.
I submit that this Government have failed. They have damaged funded pensions and introduced a massive increase in means testing.
In a pertinent question, my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) asked the Secretary of State what amount an individual will need to have saved to escape means-testing, and suggested that the amount may be £100,000. My own calculation is that an individual who has saved for his retirement and is not eligible for means-tested benefits will be ineligible for council tax benefit and housing benefit, which come to about £100 a week. That is £5,000 a year, and if one takes an average actuarial calculation and multiplies it by 16 to subtend the capital amount required to produce £5,000 a year, the answer is £80,000.
In other words, under this Government, if people can save £80,000, they will be okay, but if they can save less than £80,000, they are better off blowing the whole amount and not trying to save at all. That is monstrous and unacceptable. The pension credit will not resolve the problem because it is far too complicated and many pensioners cannot cope with the amount of paperwork involved. I therefore condemn this Government for their utter failure on funded pensions.
6.34 pm
James Purnell: The Opposition seem to operate on the basis that if they assert something often enough in pained tones, it will become true. Unfortunately, that will not happen because the facts undermine their case. The decline in the number of people covered by an occupational pension has been going on for a long time. Since 1991, that number has fallen from 5.6 million to about 3.8 million, and the pretence that it is due to changes made since 1997 will not wash for several reasons.
First, the change to advance corporation tax in 1997 has not had the effect that the Opposition allege. Like other changes made then, it was part of a policy to get rid of a perverse incentive in the system which encouraged companies to distribute money as dividends rather than to reinvest it. If, as the Government argue, their policy encourages people to reinvest in their company and to raise productivity, even by only 0.25 per cent., the profitability of pension funds will be far higher over the long term than it would have been if the perverse incentive had remained in place.
Mr. Levitt: One element that seems to have been forgotten, as I am sure my hon. Friend is aware, is that when ACT was abolished, a 3 per cent. cut in corporation tax made it the lowest in Europe.
James Purnell: I am grateful to my hon. Friend. He has saved me from making that point.
Secondly, the real cause of the decline in occupational pensions lies elsewhere, as the hon. Member for Daventry (Mr. Boswell) said in the Standing Committee that I

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quoted. There are several reasons for the changes in occupational pension funds, the main one being that employers face exactly the same pressures as the Government-people's longevity. People live longer, so the cost of maintaining a pension fund is becoming greater. Is that an excuse for companies to close their pension funds?
Andrew Selous: The hon. Gentleman is right to say that there has been a gradual decline in the membership of funded schemes, but does he accept that it has been far steeper since 1997?
James Purnell: The figures do not justify that because, as I understand it, the latest ones are projections rather than facts.
Between 1991 and 2000, the stock market was booming, so companies were taking holidays from pension contributions. My hon. Friend the Member for Ayr (Sandra Osborne) quoted stark figures: out of the almost £19 billion taken by funds at that time, the figure put into pension holidays was 16 times higher than the amount put into reducing employee contributions. In that period, pension schemes were getting a large surplus because of the performance of the stock market, but companies used it to profit themselves, and now that the stock market is going through a more difficult period, they are using the excuse of Government policy to reduce their contributions, which effectively reduces their employees' pay. If they directly reduced people's salaries to that extent, there would be absolute outrage.
It is no surprise that when the TUC surveys people about their conditions of work, it now finds that pensions are their greatest worry. That may start to make a difference to people's attitude to this issue. Employers will find it much more difficult to reduce contributions if individuals begin to treat their pension as part of their salary.
John Robertson: Does my hon. Friend agree that pensions are in people's thoughts so much because the Government have raised awareness of the issue and taken the debate to the people?
James Purnell: Absolutely.
There are legitimate issues to be discussed. Unfortunately, the main ones are not those raised by the Opposition today. We never hear what their policies are. The hon. Member for Havant (Mr. Willetts) claimed that he would come on to Conservative policy, but he spent 25 minutes talking about statistics, rather boring those on the Benches behind him. He may come to regret the large attendance that he enjoyed today. He then spent one minute talking about his policies, one of which is to support the Government's policy on Pickering. The only other two that he mentioned were support for annuities, which overwhelmingly benefits the rich, and a reduction in means-testing, but he did not tell us how he would achieve that.
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Luckily for us, the hon. Gentleman is rather less coy outside the Chamber. He is fond of being expansive at seminars or in print, as the hon. Member for Northavon (Mr. Webb), whom I am glad to see is still present, and I found at the conference I mentioned earlier.
Kali Mountford: Did my hon. Friend glean from the speech of the hon. Member for Havant (Mr. Willetts) the telling point that he hoped that there would be less reliance on, and indeed no need for, the basic state pension?
James Purnell: That is deeply worrying. The hon. Gentleman wrote the last Conservative manifesto, and after his great success at the election he may have a hand in writing the next one. If we cobble together his policy from the indications that he has given, we find that the manifesto is likely to include opting out of the basic state pension, which may be paid for by getting rid of SERPS and the state second pension. That is what he seemed to be saying at the conference that the hon. Member for Northavon and I attended last week.
The hon. Member for Havant said that other Opposition Front Benchers were already enviously eyeing SERPS and the state second pension, especially now that it had been made into what he described as a "rather odd system", with a flat rate. The reason it has been made into a flat-rate system is to make it redistributive, so that those who benefit from the state second pension are those with broken career records or caring responsibilities who have not been able to build up the same entitlement as those who work their whole life.
It is not surprising that the one pensions policy for which the Conservatives-who claim suddenly to have discovered the vulnerable and the poor-voice clear support is a change to annuities, which would overwhelmingly benefit the rich, and the one area that they are prepared to raid to fund their pensions policy is one that overwhelmingly benefits the poor. People outside will notice that.
It is worth wondering what would have happened had the plan proposed by the hon. Member for Havant been introduced—if we had a system in which people opted out of the basic state pension—and the stock market had fallen by £270 billion or £480 billion. People who, because they had opted out, relied on the stock market for the whole of their pension would suddenly have found on reaching retirement age that the value of their pension had been decimated—that it had fallen by 20 or 30 per cent. Our current pensions system would be regarded as a triumph compared with that. People would be beating down Downing street's doors demanding that their pension entitlement be restored to the level it would be under the current system.
Under the hon. Gentleman's plans, this country's entire pensions system would be dependent on the fluctuations of the stock market; that is an extremely strange position to want to be in. The hon. Member for Sutton Coldfield (Mr. Mitchell), who is supposed to be responsible for this policy area, shakes his head. Presumably, in the Conservatives' system the state would guarantee a fixed sum that people would receive. In that case, in the scenario that I have described, the Government would have to find a huge sum to make up the shortfall. As

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the stock market fell, the Chancellor would be faced with having to find a huge sum to make good the difference. That is not a sensible policy.
Mr. Webb: The hon. Gentleman describes the 100 per cent. funded scenario, but he supports the Government's aim of getting one third of the way there—going from 40 to 60 per cent. funded provision. Is he not at least one third vulnerable to that criticism?
James Purnell: Of course I support Government policy, but I thought that the hon. Gentleman's suggestion of monitoring how many people will have sufficient income in retirement while pursuing that policy was interesting.
The real question is how we can further stimulate private saving. According to some estimates, we are saving 50 per cent. less than we should be. The TUC produced a thoughtful document on whether we should look again at compulsion, pointing out that although employees are already obliged to contribute through SERPS and the state second pension, there is no such obligation on employers. It would be worth debating such a proposal. Or perhaps a tax incentive could be used, as the hon. Member for Northavon suggested. I hope that the Work and Pensions Committee, of which I am a member, will consider that important matter soon.
I urge the Minister to consider how to encourage stakeholders further. The last time but one that we debated this subject, the hon. Member for Havant bemoaned the failure of stakeholder pensions. Unfortunately the facts have undermined his case again, because in the six months that have elapsed since that debate the number of people in stakeholder pension schemes has more than doubled. He claimed during that debate that most of those pensions were being sold to children or people who did not benefit from them; in fact, most are sold to people on incomes of between £10,000 and £30,000—precisely the middle or low-income earners who we want to save more. I believe that that policy is developing into a success. Individual savings accounts took a while to get off the ground but then acquired a momentum of their own, and I hope that the same will happen to stakeholder pensions.
I encourage the Minister to consider a couple of suggestions about how to build on that success. One idea is to allow employers to promote the system more actively to their work force. If they have opted into a scheme, they should have more freedom to promote it and encourage people to join it, but they are currently held back from doing so by regulation. I hope that such a recommendation will emerge from this summer's reviews.
Last week, Adrian Boulding of Legal and General made the interesting suggestion that instead of tax incentives remaining as they are now, they should be changed, so that, for example, a lower-income worker saving £100 a month would receive £50 a month in direct cash contributions. Tax incentives should be brought up front. Everyone likes free money, and the way in which incentives currently operate is too complicated for people to realise what benefits can accrue from saving and what help the Government will give.
This is an interesting time in pensions policy—if I can say that with a straight face. There are genuine issues that we should consider, and we shall continue to focus on them. Meanwhile, the Conservatives try to distract people
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from the substance, and by so doing give cover to those employers who are cynically closing schemes and cutting their contribution rates. That is a genuine issue, and it would have been a much better subject for today's debate.
6.45 pm
Mr. Andrew Mitchell: It is a great pleasure to follow the hon. Member for Stalybridge and Hyde (James Purnell), with whom I sit on the Select Committee on Work and Pensions. He mentioned that I shook my head at his comment that falling markets would lead people to rush to the doors of No. 10 demanding to get back into a state scheme. Markets are more sophisticated than he describes, and he knows very well that an examination of long-term stock market trends around the world is encouraging. He should not take a snapshot view of such matters. Furthermore, although I do not know much about the pension investment industry, I do know that as people near their retirement years, the level of risk that their advisers will allow them to undertake becomes much lower. That is why I was shaking my head.
I draw the House's attention to my interests, which are clearly registered. This is an extremely important debate and the Opposition deserve considerable credit for spending a day of their time on it. The Government should have held the debate in their time. My hon. Friend the Member for Havant (Mr. Willetts) made an excellent opening speech, taking time off from correcting the Government's figures, as was made necessary yesterday. The debate takes place against a background of crisis in the pensions industry. For millions of our fellow citizens this debate is extremely important, and crisis is not too strong a word.
It is a pity that the bipartisan approach that often characterises the House's discussion of very long-term issues has broken down to some extent on pensions. I remember proceedings on the Pensions Act 1995, when I was the Government Whip and my right hon. Friends the Members for North-East Hampshire (Mr. Arbuthnot) and for Richmond, Yorks (Mr. Hague) were the Ministers responsible for taking through that complicated legislation; we were faced by Donald Dewar, sadly now deceased. Those were the days. There was a high degree of bipartisanship then, and I am sorry that I shall not be able to do full justice to that spirit during the first part of my speech.
I start by absolving the Government of responsibility for the demographic factors that several of my right hon. and hon. Friends have highlighted. In every other respect, however, the Government have failed to notice the great difficulties. There was an elegant exchange between the hon. Member for Stalybridge and Hyde and my hon. Friend the Member for South-West Bedfordshire (Andrew Selous). Surely the Government must have noticed that between 1997 and 2001 the number of people retiring with a funded pension fell from 67 per cent. to 59 per cent. of the total. The Government must have noticed the tremendous disadvantages arising from the closure of defined benefit schemes. Not only did defined benefit schemes give UK citizens the largest funded pension provision of anywhere in Europe, but the great advantage of such schemes is that they have allowed the country to restructure much of British industry in recent years.

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The Government were warned extensively by the industry and the Opposition about FRS17, but they remained blithely indifferent, only taking action extremely late in the day. The £5 billion per annum raid has been mentioned. The full effects of that were concealed while markets were rising, but they are now revealed in ghastly technicolour. My right hon. Friend the Member for Wokingham (Mr. Redwood) discussed what that £5 billion a year really means. The net present value of £5 billion a year is more than £105 billion—a very large amount of money.
The Government are guilty of woeful negligence in their inattention to the way in which the degree of complexity in the system has increased. It is now so great that almost no one can understand the system. It is the result of the hopeless over-regulating of the selling of pension products—a reaction to the mis-selling scandals and to Robert Maxwell. In the face of such complexity, the industry is grinding to a halt. The Government have been warned, but have done nothing about it. They are doubly to blame bearing in mind the very cushy pensions that we in this House, including Ministers, enjoy.
Mr. Gardiner: The hon. Gentleman criticises the effect that he believes FRS17 might have when it is introduced. In the present climate, following Enron and WorldCom, does he seriously mean to maintain that it is not right that companies should show in their books the full extent of liabilities to which they and their shareholders are subject?
Mr. Mitchell: The hon. Gentleman misunderstands my point. The right answer to FRS17 has now been arrived at, but the Government were much too late to support the move given that the original announcement did such damage.
The Government's policy is inadequate, complacent and excessively complicated. It started well enough with the pledge to swap the 60:40 role, which we have discussed, but the state second pension will not work. The highly respected Andrew Dilnot said of it:
"It won't last much beyond the introduction of pension credit".
We discussed pension credit in the House in March. A highly respected practitioner from Northern Pensions Resource Group, Sue Ward, said of that:
"It reduces the Government's pensions strategy to incoherence".
Several hon. Members rose—
Mr. Mitchell: I am sorry but I cannot give way; time is against me.
The stakeholder policy has been a complete flop. The reason is that there is no compulsion. People can say, "It's not my problem; it's the Government's." Therefore, take-up among the target group has been derisory. Under the law, an employer must have a stakeholder pension scheme, but as there is no compulsion, that is merely a box-ticking exercise. The stakeholder pension scheme has been revealed as a great tax break, but it is certainly not a contribution to a comprehensive pensions policy.
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There has been a massive increase in means-testing, to which reference has been made. The 1998 Green Paper rightly inveighed against it, but as a result of the Government's policy, nearly 70 per cent. of pensioners are subject to means-testing.
I want to be reasonably constructive and take up the injunction of the right hon. Member for Birkenhead (Mr. Field). My advice to the Government is to recognise those problems and to do something about them. Let us consider the effect of defined benefit schemes closing down. The unions responded long before the Government. As my hon. Friend the Member for Gosport (Mr. Viggers) said, employees' contributions to either defined benefit or defined contribution schemes are estimated to be around 5 per cent., but employers' contributions are expected to reduce from 20 per cent. to 8 per cent. The long-term effects of that for tomorrow's pensioners are absolutely awful, and the Government would do well to listen to the advice of the Association of British Insurers and the TUC about ways of encouraging defined benefit schemes to continue and, if anything, to be enhanced.
My right hon. Friend the Member for North-East Hampshire said that he was a fan of the pension-plus scheme, which the outgoing Conservative Government launched in 1997. I too am a fan, having been a Minister in the Department responsible at that time. I want more funded pensions. If I were starting out in the labour market today, I would not want to place my trust in the words of feckless politicians when it came to my security in old age. I would want to put my trust in a tangible pot of money, which I owned and could see grow throughout my lifetime.
I hope that the Government will introduce a defined benefit scheme for all, which, effectively, they will guarantee. I shall describe a proposed scheme that has seven parts to it. It would be a simple national system, under which we all had ownership of our own fund. Everyone under the age of 25 would join it. On retirement, it would pay out, say, 50 per cent. of the national average wage. A schedule would be published each year by the Government Actuary to determine how much and at what age each individual should contribute. A national insurance rebate would be paid into the funds. There would be 40 per cent. tax relief for everyone involved in the scheme. It could be an annuity. There would be no selling fees. Funds would be approved and registered, and have trustees. Those over the age of 25 could transfer into the scheme and the Government would enhance such funds with an uplift of, say, 10 per cent. as an incentive.
Such a scheme is designed to help those who are currently doing nothing for the sake of their retirement funding. It seeks to answer the question of how we get the mass of our fellow citizens into a defined benefit scheme. It would be a personal fund and could therefore possibly be used for life events such as unemployment or care in old age.
I do not suggest for a moment that what I have described is a perfect scheme—much cleverer brains than mine could work on it—but it meets our concern that our fellow citizens should across the board be able to enjoy some of the advantages that we as MPs enjoy. It is critical that we address the issue. The Government will pay a very heavy price for their neglect of this important area of policy. As the difficulties have mounted over recent weeks, I have been staggered at the Government's

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inability to grasp some of the concepts, let alone take action. That is why I am particularly grateful to my hon. Friend the Member for Havant for launching this debate.
6.56 pm
Mr. Jim Cunningham: This debate is part of a larger debate, although I realise that we cannot talk about the wider issues. However, the general public tend to look at the value of pensions and ask what other assistance they might get in their old age with, for example, the funding of care. We should also bear it in mind that people in some parts of the country get free bus passes, but pensioners in others do not. There is a catalogue of such examples.
We must recognise that the Government have done a lot, particularly for poorer pensioners. It would be churlish to say that they have not done so. However, I think that the Government would accept from the Back Benches that we still have a long way to go in considering the welfare of future pensioners.
Kali Mountford: Has my hon. Friend seen the statement by the Institute for Fiscal Studies, which in congratulating the Government says that pension credit is the most progressive action that it has seen from a Government, and that the income of the poorest of the pensioner population will rise by 8.1 per cent., while the richest will gain only by 0.5 per cent? Is not that the sort of action on poverty that we need?
Mr. Cunningham: I am perfectly aware of the statement to which my hon. Friend is drawing my attention, but I will move on.
Most politicians in the 1970s and 1980s knew that we would have a problem in the 1990s and beyond because of an ageing population and early retirement. I remember the big desire of people many years ago to retire in their 50s because they wanted to enjoy leisure and pleasure having come through the war years. Therefore, the problem with funding pensions should he nothing new to the House. Politicians over the years, particularly in the 1980s, did not do very much about it. In fact, instead of helping the situation, they created an aggressive climate.
The hon. Member for Sutton Coldfield (Mr. Mitchell) said that he would not put his trust in state schemes. Considering recent events and the history of the private sector, I am not so sure that I would place too much trust in private schemes either. The issue is very much about striking a balance.
Some of my hon. Friends have said that, on the one hand, the Opposition have accused the Chancellor of taking £5 billion a year out of pension funds, but on the other hand have omitted to say that that was in taxes on dividends. Opposition Members should also remember that the public have a big grievance over privatisation of the water industry, for example. They have seen exorbitant profits made and previous Governments did nothing about it. The Chancellor used that money to fund a number of social schemes, including the fight against drugs, better education to get kids off the streets, and better social services, which were welcomed by many people outside the House. The money was therefore put to good use—it should have been spent in the 18 years in which the Tories were in power.
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Employers gained pensions holidays and the £18.5 billion that one of my hon. Friends mentioned earlier. We have not discussed this, but employers in the 1980s were virtually allowed to do what they liked with pension surpluses—contributors did not have much of a say. Some years ago, I introduced a private Member's Bill that would have given pensioner trustees a say in how such money was spent by companies. Indeed, in some areas, people did not receive a pension—they lost it because companies plundered pension schemes, then went bankrupt. I am sure that hon. Members remember some of those companies.
There was also what I call a big sell in the mid to late 80s, when some of the largest companies in the country encouraged the labour force to leave the state scheme and go into a private one. In the past two or three years, people have retired only to find that they have not got the pensions that they thought they would get. The Opposition may attack us, but I have not heard them propose anything—I may be interpreting them wrongly—except for privatising the state scheme. That may be why the hon. Member for Sutton Coldfield does not trust the state scheme—that is all part of the Opposition's psychology.
The Liberal Democrat spokesman drew attention to the fact, slipped in by the Conservative spokesman, that the Conservatives would reduce the number of benefits for pensioners from three to two. Which one will go? Will it be housing benefit? Will it be amalgamated with another benefit and then reduced? The Opposition owe the House an explanation of exactly what they intend to do. The Opposition agree with certain things that the Government are going to do, but they have not spelt out their policy to us or the country. It is no good them criticising us if all that they can say is, "Well, we are only two or three years away from a general election. We are just working up our policies." I am afraid that that does not wash.
In the west midlands, new employees at a number of companies—including the Caparo Group, which has already been mentioned, and Peugeot—are not allowed to enter the company scheme. Moreover, existing occupational schemes are being changed—I know that trade unions are involved in negotiations on that. We can see the trend that major companies are following—they want to ditch occupational pension schemes which, by the way, were a component of wage deals many years ago. When the Opposition talk about the proportion paid by the employer and the employee, they should remember that that calculation came into wage deals. Someone would ask for an increase of 7 or 8 per cent., but would settle for 4 or 5 per cent. On that basis, they would either get extra holiday or a decent occupational pension. The Opposition tend to forget that.
In conclusion, our debate has been worth while. It could have been part of a broader debate, but no doubt we shall return to these issues when we discuss the general welfare of pensioners and proper packages for them, which I touched on earlier. However, I welcome this Opposition debate. Usually, when someone calls for a debate, they have some policies that they would like to introduce but we have not heard anything apart from agreement, and minor disagreements, with the Government. All in all, the debate was long overdue and well worth while. I hope that the Government take note of what Back Benchers have said, although I do not expect them to introduce changes overnight. However, I hope that my colleagues

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realise that we can offer all sorts of pension schemes, whether private or state, but people want a decent pension to live on.
7.4 pm
Paul Holmes: We have heard a great deal about the Government's overall pensions policy and its failings. By contrast, I want to focus on a specific aspect of pensions policy—what happens to company pension schemes when a company hits financial difficulties and perhaps goes into receivership? How transparent are those schemes and are they adequately regulated? I shall give two examples from my Chesterfield constituency, which are relevant to every individual who pays into a company pension scheme anywhere in the country. They are also relevant to Government policy, which aims to encourage greater reliance on private pensions while running down the inadequate basic state pension.
The Minister for Pensions, for example, told Parliament on 12 November:
"We are committed to encouraging private saving to meet the long-term demographic challenge of an ageing population."—[Official Report, 12 November 2001; Vol. 374, c. 568.]
The Minister said that that would be achieved with a package of measures, better information for current and future pensioners and better regulation of the pensions industry. The experience of United Engineering Forgings and Dema Glass in my constituency, however, shows that at the moment, company pension schemes are not transparent enough and are not adequately protected. If those examples are added to the scandalous mis-selling of pensions in place of SERPS, the mis-selling of endowment mortgages and the failures of Equitable Life, it is clear that people's private investments and savings for their retirement are not adequately protected. How can the Government expect private individuals to invest more and rely more on private schemes?
At UEF and Dema Glass in Chesterfield, the final salary pension schemes were initially in surplus—by 120 per cent. in UEF's case—and were used to fund early retirement with an enhanced pension as a way of streamlining the work force. When the companies began to experience economic difficulties, causing a shortfall in the pension funds, the work force were persuaded, through misleading information, to continue and even increase their payment into the funds, with assurances that that would safeguard the schemes for the future. When the companies closed or went into receivership, the funds were inadequate to pay pensioners the money that they were owed from pensions that they had paid into—in some cases, for nearly 40 years. To add insult to injury, the administrators of the respective schemes took their extensive fees and costs from the dwindling and inadequate pension funds.
I shall give some examples of the way in which people in Chesterfield were hurt by those scandals. On 11 September 2001, I visited a constituent on her 60th birthday. She was not celebrating, however, as she had discovered that far from retiring at 60 with a lump sum from the Dema Glass pension scheme, she would not be paid that money and would only be paid a reduced pension after she reached the age of 65. She told me:
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"The Government preaches, 'Take out a private pension,' but they have failed to put into place legislation that prevents the employer from taking the employee's money. After the Maxwell shock, the employer should never again be allowed to do this."
My constituent's daughter was also present at our meeting. She is in her early 20s—exactly the person, we are constantly told, who is being targeted by the Government to save for retirement. She was about to start paying into a company pension scheme run by the reputable international retail firm for which she worked in Chesterfield. However, she asked me what was the point—the company, which seemed successful, might not be able to pay out in 30 years' time, just as Dema Glass, once a major Chesterfield company, had seemed a safe bet for many years, but was now bankrupt and could not pay out from the pension funds. So much for the Government encouraging more private pension savings, especially among the young.
An employee at UEF Chesterfield Cylinders wrote to me:
"The loss of pension will cost my family, based on the last company pension statement I received, thousands of pounds per annum at sixty-five. These figures apply to most people approaching thirty years' service. How can it all disappear? We wait to see what the final figure will be, but estimates vary widely between 50 and 70 pence in the pound … We hear all the time that people must stand on their own feet and make provision for their retirement, which is totally opposed in my view to the actions of the same Government who seem bent on destroying the whole system of company pensions."
Finally, another employee of UEF Chesterfield Cylinders branch—a Labour councillor, by the way, which shows that this is not a partisan issue—told me of his disillusionment at the fact that after nearly 40 years of paying into the company pension scheme to guarantee a secure retirement, he had effectively been robbed, when it was too late in his working life for him to do anything about it.
I have raised these matters in detail on a number of occasions. For example, I wrote at length to the Minister for Pensions on 26 November, and I asked him a question on the Floor of the House on 28 January. On those and other occasions, I have simply received assurances from the Government that measures already existed to protect such pension schemes.
The Minister for Pensions (Mr. Ian McCartney): I would not normally intervene in the debate, but the hon. Gentleman should be absolutely honest in his remarks. I held a debate in the House, met the workers and met a group of Members of Parliament who are working on behalf of the workers. The hon. Gentleman never turned up to the debate. When he raised the issue on the Floor of the House, I offered to co-operate with him on these matters, and I do so now. I received a letter from the work force thanking me for the work that I am trying to do on behalf of them and their Members of Parliament in an extremely difficult situation. I do not mind the hon. Gentleman backing up what he is trying to do in support of his constituents, but he should not do so by misrepresenting what I am trying to do on their behalf and on behalf of the other Members of Parliament who have raised the matter with me.
Paul Holmes: The Minister speaks of misrepresentation. If he is referring to the debate in Westminster Hall, I was there and I took part.

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On the occasions to which I referred, and others, and in several letters to two Ministers, I received assurances—which I can read out word for word, if the right hon. Gentleman wishes, as I have them with me—that measures already existed to protect such pension schemes. However, the point that has been made repeatedly by me and by other Members of Parliament who have UEF-owned firms in constituencies from Scotland to Lincoln to London is that no law was broken in either the UEF case or the Dema Glass case.
In both cases, clever use of existing regulations allowed the company pension schemes to be legally plundered. That was legalised robbery. The regulation and public transparency of such schemes must be improved. Again, I ask the Secretary of State or the Minister for Pensions to consider the suggestions and questions that I put to them, for example on 26 November. What action do the Government intend to take to ensure that company work forces receive much clearer guidance on the dangers, as well as the attractions, of final salary pension schemes?
In both the Chesterfield cases quoted, the work force were persuaded to keep the schemes going last year, and even to increase their payments into the scheme in the case of UEF. Had they known the real business position and financial situation of their companies, they probably would not have agreed to that. What action will the Government take to ensure that work forces are provided with all relevant financial information in similar situations?
Should the actuary for a company pension scheme provide annual reviews, rather than just three-year forecasts? In the UEF case and the Dema Glass case, the forecasts seemed to suggest that if workers continued to pay into the scheme or increased payments by 2 per cent., the scheme would be safeguarded. When the figures finally became available, after the firm went into receivership or closed down, it became apparent that that was not the case.
Should actuaries be required to make new forecasts whenever a new issue arises that could seriously affect the viability of the pension fund for example, when a company faces financial problems, when a company encourages workers to take early retirement as an easy form of redundancy, and so on?
Following the Maxwell affair, the mis-selling of endowment policies, the Equitable Life problems and now the examples related to company pensions, it is imperative that the Government undertake a major review of the financial services industry, if they are to restore public confidence in the schemes on which the Government insist people should rely to look after them in their old age.
7.14 pm
Sandra Osborne: I welcome many of the positive measures that the Government have taken for pensioners, particularly poorer pensioners, but I shall concentrate my remarks on final salary pension schemes, largely based on a tragic situation in my constituency. In that regard, the hon. Member for Chesterfield (Paul Holmes) has rather stolen my thunder, as the case also involves United Engineering Forgings, which is located in my constituency, his constituency and four others throughout the United Kingdom.
I shall not dwell on the comments that have been made about the possible reasons for the current problems with final salary pension schemes. I am worried that, with
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constant talk of crisis, an atmosphere is developing in which employers may feel vindicated and even encouraged to walk away from long-term commitments and responsibilities that were entered into in good faith, as part of the terms and conditions of employment based on a short-term view.
For those who have benefited from occupational schemes, they can be said to be one of the most positive social developments in the post-war years, encompassing a partnership in retirement between the private sector, employees and the state. That is why the Government must take steps to ensure not only that final salary schemes are preserved, but that the millions who do not currently benefit are brought into an effective, workable and fair system. As other hon. Members have said, if it is good enough for Members of Parliament, it is good enough for the rest of the work force. I echo the comments in relation to compulsion that have been made this evening. That is well worth serious consideration.
I shall elaborate on my constituency problem, on which I have been working for some time. My right hon. Friend the former Secretary of State for Work and Pensions, who has taken on the task of sorting out the transport system, often said that occupational pensions are part of the remuneration package agreed by employers and their employees or their representatives. It should therefore be seen as part of a contract that one party cannot just abandon at will.
I have previously raised the matter in a Westminster Hall debate, to which my right hon. Friend the Minister for Pensions referred. I have a copy of the debate, and I do not see any record of a contribution from the hon. Member for Chesterfield (Paul Holmes), and he certainly did not raise with me the possibility of taking part. It is unfortunate that he has failed to recognise the efforts of other hon. Members in that regard. I make no apology for raising the issue again this evening, as it is extremely important and involves more than 1,000 people. As was obvious from his intervention, my right hon. Friend is well aware of the situation. I thank him for meeting me and other hon. Members, and for his helpful response so far.
The UEF workers had a final salary scheme introduced in 1974 as part of the annual wage award. As my hon. Friend the Member for Braclford, North (Mr. Rooney) said, many people regard their contributions to their occupational pension as part of their terms and conditions. The workers from UEF in my constituency call it their wages for retirement.
The work force include many long-term employees who believed that they were following the advice of successive Governments in making provision for their retirement. That has not come about in the past couple of years; it has been on the go for 20, 30 or 40 years. People have faithfully contributed over that time, but as matters stand, they will not get their expected pension from their accrued final salary scheme when they most need it, as they enter retirement and old age.
As the hon. Member for Chesterfield stated, it was not until the company went into administration in June 2001 that a shortfall of £12 million was identified by the independent trustee and the pension scheme was wound up immediately. Time does not allow me to recount the whole sorry tale, but a number of aspects are relevant to the debate and have wider application. I shall try not to repeat what he has already said.

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The majority shareholder was Prudential Portfolio Management Ventures Limited, a member of the Prudential Group that, as hon. Members know, has a major involvement in pensions. It is rather strange that the hon. Member for Chesterfield did not even mention the role of Prudential. I can assure him that the work force feel that it is crucial. I would have welcomed him, had he joined me at the various meetings with Prudential management and at the protests outside the company to try to get it to live up to its moral responsibility to the work force. If he wants to join the campaign in future, he is more than welcome to do so.
The company took short-term decisions to benefit its shareholders and, I believe, had a conflict of interests that meant that it did not take responsibility for the proper management of the pension scheme, as it should have done even under current regulation. As the hon. Gentleman said, an important factor in the demise of the UEF pension scheme was the abuse of early retirement benefits as a carrot for voluntary redundancies, which ensured that many employees of 55 years and more received their fully accrued pension when they accepted redundancy. Many hon. Members have commented on the added pressures on pension funds that are caused by increasing life expectancy. We are all aware of that issue, but the problem is made worse if the number of people who receive their full pension at a lower age is greatly expanded, even if there is no health reason for them to retire early, and if the fund does not have sufficient assets to withstand the extra pressure.
The final decision in the UEF case lay not with the Government, but with the company, as it decided to allow people to go for early retirement in order to cut its wages bill—and that is exactly what happened. The misuse of funds is deterred by restrictions on the amount that can be invested from the fund to the employer's business, but what if the fund is over-burdened and due account is not taken of future requirements? As things stand, it appears that that is not illegal. The bottom line is that, after paying in all their working lives, the former UEF workers will be entitled to a greatly reduced amount and may have to rely on state benefits. Despite all [that has happened, and much to the surprise and consternation of those who will suffer, there is nothing illegal about that.
I and representatives of the work force from throughout the UK met Mr. Jonathan Bloomer, group chief executive of Prudential, on 13 March to try to salvage something from the situation and get Prudential to face up to its moral obligations. I received a very timeous reply—I do not think—on 19 June. Mr. Bloomer stated that Prudential could not redress the shortfall in the pension fund by drawing on the assets of policyholders of Prudential products, which is fairly obvious. He has apologised for the fact that PPMV did not manage its relationship with the union as he would have expected. I do not know how all that squares with the reputed £18 million bonus that Mr. Bloomer will receive over three years, but I can tell the House that it is of scant consolation to my constituents, who will continue to campaign for justice. We will welcome anyone who wants to join us in that campaign.
I await with eager anticipation the publication of the various pension reviews that are currently under way. I hope that they will encourage the retention and
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development of occupational schemes, which are far better than the available alternatives, and that they will point to early legislation. I hope also that the Minister will give an indication as to when we can expect legislation to be introduced to ensure that what has happened to the UEF workers will never happen again to other workers.
7.22 pm
Andrew Selous: Many Opposition Members fully support the Government in their intention to try to shift the balance of pension provision so that 60 per cent. of pensions are provided by the private sector and 40 per cent. by the public sector. We give that support not because there is any magic in a particular ratio, as the hon. Member for Northavon (Mr. Webb) pointed out, but because we want as many pensioners as possible to benefit from the independence and security that they have built up through their own provision. We also want sufficient money to be left over to allow Governments of years to come to concentrate on the genuine fight against pensioner poverty and to fund all our other public services.
There is much support on the Opposition Benches for the general direction in which the Government have set out, but we must recognise the startling situation in our country today. Most social conditions have improved for the people of this country over the years: their pay has gone up and their working conditions and other entitlements have improved. The next generation of pensioners who retire with the benefit of occupational schemes will be in a very much worse position than the generation that is retiring now.
I do not feel that the Government have fully grasped that situation. Indeed, I am afraid to say that there is an element of complacency on their part—they have given us a 70 per cent. overstatement of the funds going into occupational schemes. One would have thought that someone had conducted a reasonableness test, but it appears that the conclusion drawn was that everything in the garden was rosy. We have also heard from the Government the assertion that the stock market is massively up on 1997 levels, but, again, we know that that is not the case. The Opposition are genuinely concerned that the scale and depth of the problem have not fully been appreciated.
In particular, I point to the demise of defined benefit schemes. Many hon. Members have said that it is outrageous that we, as Members of this House, are privileged enough to be members of an extremely generous and excellent scheme, while others face serious difficulties. We should want the benefits of similar schemes to be as widely available as possible to our constituents.
I take issue with an assertion made by my hon. Friend the Member for Gosport (Mr. Viggers), who suggested that we may not need to be too concerned about the demise of defined benefit schemes because the world of work is changing, people have a portfolio of careers and so on. Indeed, the Government have sometimes given a similar impression in recent years. According to research from the Economic and Social Research Council, however, the average job tenure is increasing, and did so by almost 20 per cent. in the 1990s. The evidence, which is quoted in the current issue of Pensions World, suggests that people are not necessarily moving from job to job,

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but are spending longer in one job than in the past. Defined benefit schemes are, therefore, as relevant today as they ever have been and provide a tremendous advantage to employees who are lucky enough to be members.
It would be churlish not to accept that two of the major factors in the pensions crisis are wholly outside the Government's control. We all know that people are living longer—it is a worldwide phenomenon for which we are all grateful—and that the effect on pension funds is severe. We also know that we are currently in a period of extreme market volatility; I do not think that there has been a similar example of the stock market falling for two and a half years, as it has done for the past 30 months or so. Market volatility and increased life expectancy cannot be blamed on the Government.
There are other factors, however, for which the Government must take some responsibility: the complexity faced by the pensions industry today, the tax situation and the failure to get to grips with encouraging people to save. Labour Members have criticised the Opposition on the basis that they have not heard us give any positive policy proposals, but I intend to devote the rest of my speech to what I think should be done about the pensions crisis. I should like to raise four different areas in which I think that we can make strides to deal with the problem.
First, we should help employers whose costs have risen because of extra tax on pension funds and extra national insurance contributions. The cost to employers of employing people and providing pension schemes has gone up, so, like the hon. Member for Northavon, I think that there is great merit in the scheme proposed by the Association of British Insurers, which has suggested the introduction of a pension contribution tax credit. The ABI also proposes certain requirements in that regard. It suggests that employers should make a contribution of at least 5 per cent.—I hope that Labour Members will welcome that—and that the schemes should have a membership of at least two thirds of all eligible employees.
To recognise the cost to employers of providing pensions in a competitive market by introducing a form of tax credit would be a step in the right direction, and the expression on Ministers' faces suggests that they are not wholly ruling out that idea. I hope that it will be given serious consideration as a way of recognising the difficulties that employers face. As we are a responsible Opposition who realise that a tax credit will have a corresponding reduction in expenditure, my proposals for recouping that cost are an increase in VAT and perhaps a reduction in parts of the DTI budget. We heard no suggestions from the Liberal Democrats about where the money should come from. As the Government in waiting, the Conservatives always cost their proposals carefully, and will continue to do so.
David Taylor: Will the hon. Gentleman give way?
Andrew Selous: I cannot resist doing so just once, very briefly.
David Taylor: I am reluctant to interrupt such a thoughtful and non-partisan speech, but perhaps I can help the hon. Gentleman by describing the faces of his two Front-Bench colleagues, the hon. Members for Daventry (Mr. Boswell) and for Hertsmere (Mr. Clappison). "Stony" would imply too much warmth.
Andrew Selous: One of the advantages of not being a Front Bencher is that Back Benchers have slightly more freedom to expand thoughts that may or may not be taken up by the Front Bench. I will of course abide by my party's decisions as and when they are made, but I hope to contribute to debate on them.
My second proposal is for a reduction in complexity. When the National Association of Pension Funds asked its members what single factor would most help the industry, they said "Simplicity". Friends of mine who work in the industry say that they would go into meetings a few years ago with a slim A4 ring binder; now they must take several lever-arch files full of regulations and so forth. Those of us who are not involved in the industry probably cannot fully appreciate the demands that MPs have made on it. Of course we want regulation—good regulation, to ensure that employees are not ripped off—but we must consider all its consequences. It must be effective, but it must not reduce supply and make employees worse off.
My third proposal is to help those near retirement to bridge the gap between the world of work and the world of retirement. There is no reason, for example, why such people should not be able to take part of their pension in advance while continuing to work part-time.
It is also ridiculous that someone who has worked for Tesco all his or her life cannot push trolleys there in retirement. The same does not apply at Sainsburys. Why is there a rule preventing pensioners from working for their former employers? The Minister for Pensions nods; perhaps progress will now be made.
Mr. McCartney rose—
Andrew Selous: I am afraid I cannot give way. I have only one minute left.
My fourth proposal is intended to encourage saving, which is vital. I support the statutory money purchase illustration that will be produced from next year, but why should it not apply to all types of saving? Let us look seriously at inheritability. Young people in particular should have a real sense of ownership of their pension savings.
We should ensure that it always pays to save. Elements of pension credit, unfortunately, prevent that from being the case. Steve Bee, Scottish Life's pension chief, said recently on Radio 4 that about 1 million people might not be better off because of means-tested benefits.

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Improvements could be made in stakeholder pension regulation. We should also ensure that those looking for pensions receive the best possible advice. Independent financial advisers are having a tough time at present because of polarisation in their industry, and there is a desperate need for good advice for employees. This is a complicated area. Employees need much more impartial advice that they can trust, and I hope the Government will take account of that.
7.34 pm
John Robertson: I am pleased to have an opportunity to contribute to this excellent debate. Let me first congratulate the Government—surprisingly—on the measures they have introduced to help pensioners. As my constituency contains a higher percentage of over-60s than any other part of Europe, pensions have a special meaning for me. I congratulate the Government on the minimum income guarantee, the pension credit and free eye tests, to name but three of many useful measures.
The hon. Member for Gosport (Mr. Viggers), who is unfortunately not here now, said that he wanted to be part of a reforming party. Perhaps he should cross the Floor, for he will certainly not achieve that on the Conservative Benches.
What concerns me, however, is ensuring that the pensioners of the future do not fall into poverty. For the benefit of those who have heard part of this speech before, I shall concentrate on final salary pension schemes, and discuss ways in which the Government can try to protect employees as more and more companies—sadly—end such schemes.
A final salary pension scheme is a defined benefit scheme guaranteed to pay a person who retires a pension based on that person's final salary. It allows people to plan for the future: they know exactly how much money they will have, where it will come from and, if it is index-linked, by how much it will increase. Membership of such schemes has declined in recent years, but final salary pensions are still the dominant type of occupational pension. The problem is that the schemes have become more expensive for employers, for a number of reasons. As has been said, there are demographic factors such as the increase in life expectancy. Other factors are policy changes, such as the introduction of the minimum funding requirement and FRS 17, and economic events such as the fall in stock market returns.
Those economic conditions and policy changes have had an enormous impact on employers who used to offer final salary schemes. We need to consider how the Government can instigate policy changes to remove some of the pressure. I fear that if we do not remedy the problem now, the full impact will not be felt for 20 or 30 years.
The alternative being adopted by companies is a defined contribution or money purchase scheme that transfers any investment risk to the individual and away from the company. If the stock market underperforms, the employee's pension is likely to be smaller than it would have been under a final salary scheme. Pensioners in my constituency, and those approaching pension age, will
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want to know exactly what they will receive. They do not want to be involved in a gamble or a lottery, in which they buy the right ticket on a Saturday if they are lucky.
The TUC has conducted some interesting research whose compelling results illustrate the difference in employer contribution rates between the two types of scheme. For example, in the case of someone earning the average wage, the difference accrued in one year is more than £2,000—or £40 a week. Nearly half the companies running defined contribution pension schemes put in 5 per cent. or less of employees' salaries. In a typical final salary scheme, companies contribute 10 per cent. or more. According to the National Association of Pension Funds, the long-term average employer contribution to a final salary scheme is 15 per cent., while the average employer contribution in a defined contribution scheme is a mere 6 per cent. 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. BT closed its pension scheme—as a member of that scheme, I declare an interest—to new employees on 1 April. I do not know whether the fact that it was April Fool's day was a coincidence. Many others, such as HSBC, Marks and Spencer, Abbey National and Barclays—all reputable companies—have also closed their schemes. Some companies, notably Iceland, the Caparo Group, and Ernst & Young, have even closed their schemes to existing employees, and I fear that that may become commonplace. I will say more about Ernst and Young later.
Bob Spink: Does the hon. Gentleman accept that the suspension of final salary schemes by companies has been caused in part by the £5 billion tax that was imposed by the Labour Government, which caused the returns on those companies' investments to fall?
John Robertson: I thank the hon. Gentleman for that contribution. I shall completely ignore it, as I should. I will say, however, that many withdrawals of money and opt-outs happened when his party was in power.
David Taylor: Will not my hon. Friend be relieved when that particular example being used by the Opposition crawls out of the Chamber and dies? It is a very minor matter compared with the cost to 10 million pensioners of the breaking of the link by Mrs. Thatcher in 1980, which costs them a minimum £15 billion a year. Does my hon. Friend agree that the hon. Member for Castle Point (Bob Spink) should be ashamed of that?
John Robertson: If the hon. Gentleman is not ashamed, he certainly should be.
With money purchase schemes, the size of an individual's pension pot on retirement determines the size of the pension. If the individual has not put in enough, or if investment returns have been poor, there may not be enough to fund a decent pension. At the moment, that situation is made immeasurably worse by the very high price of annuities. The law currently obliges people to use their pension fund to buy an annuity.
If we look up annuity rates in the financial pages of the newspapers, we find that, to buy a half-decent pension at the moment, someone would need an absolutely huge pot

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of money. For example, for someone to obtain a retirement income of £10,000 a year, and a half pension for their partner should they die first, plus inflation-proofing of up to 5 per cent. a year, they would need a pension pot of at least £250,000. For the vast majority of people, that is a non-starter. The pension industry is currently saying that, to ensure a reasonably decent pension, we need to save between 20 and 25 per cent. of our salary for the whole of our working life. For all but the very rich, that is just not feasible.
There are also implications for employee relations in the closure of final salary schemes. While it may not be a breach of contract to close a final salary scheme, it could be regarded as the breaking of 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 contributions may increase wage demands as employees seek to maximise their pensions. A disturbing tendency is also emerging—directors are keeping their own final salary schemes while removing them from their employees. That must be stopped. I ask the Minister to ensure that, if there is no law to cover this, there will be in future. There cannot be one law for directors and no law for employees.
The unions are very concerned about the dangers of closing final salary schemes, and I pay tribute to Amicus and Connect, the union for professionals in communications—I draw to the House's attention the disclosure of my membership of Connect in the Register of Members' Interests—for the work that they have been doing to inform people of why final salary schemes are needed and must be brought back. Earlier, I mentioned that Ernst and Young was one of the employers who had closed the scheme to existing employees. This company has now been forced to reopen the scheme owing to the sheer pressure that it faced from its employees. Do we really want to go down the industrial action road? Who would win in those circumstances? I also have to ask how the company can go back into a final salary scheme once it has come out of it.
The problem with the minimum funding requirement is twofold. First, the test for the schemes is too onerous. Secondly, a scheme that is fully funded under the MFR rules—one that can meet its pension obligations—is in fact overfunded. In other words, the MFR is too cautious. It might seem absurd to make that statement, but actually it is not. Under the MFR rules, schemes have to be returned to fully funded status within a fairly short time—now 10 years. The only way that that can happen is through employers making sizeable payments to their pension schemes. That is the nature of the second problem, because it places the onus on employers to make up the shortfall, although in many cases the shortfall is really nothing of the kind.
Another problem is FRS17. This is a new accounting convention, designed to force companies to show any shortfall in their pension scheme funding as a liability on their balance sheet. I disagree with some of my colleagues on this, because I do not agree with the measure. We should either modify it or get rid of it. It is supposed to aid transparency in company accounts, but all it does is add the money in one fell swoop to the liability of a company. That can drastically affect the company's share price, which can also have a knock-on effect.
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Funded pensions are important to every person, not only in the Chamber but in the whole of Britain. This is not an issue to be taken lightly, and it is certainly not an issue on which to score points. I have tried not to do that. The Government are trying hard, and they have gone a long way, but—as my colleagues have said—there is still a lot to do.
7.46 pm
Hywel Williams: As we have heard, the funded pension system is in considerable difficulties. The amount already saved is unclear, as is the amount being saved, and employers are opting out of occupational pension schemes. Pensioners and future pensioners are uncertain as to their future pension incomes, and many people are uncertain about their entitlement, not least because the system for income maintenance in retirement is so complicated.
Conservative Members have referred several times to the complicated nature of the pension system. Last Friday, I had the daunting task, as a relatively new MP, of trying to explain part of the pension system to a puzzled constituent. I will certainly not go into it again today, except to list some of the features that I was trying to explain: the state retirement pension; the minimum income guarantee; the state second pension; the stakeholder pension; occupational pensions; private pensions; and the pension credit. That was without going into disability or housing benefits. Many pensioners are bemused—as, occasionally, are Members of Parliament, when trying to explain all these various provisions.
Final salary schemes are in considerable difficulties. The TUC estimates that there are 1.8 million fewer people in such schemes today than there were 10 years ago. Only 200,000 of those people are likely to have transferred to money purchase schemes. What has happened to the other 1.6 million? The assumption must be that they now have no form of occupational pension. The Association of Consulting Actuaries estimates that only 37 per cent. of final salary schemes now remain open to new members.
The hon. Member for Glasgow, Anniesland (John Robertson) referred to the case of BT, which closed its scheme some 14 months ago. New workers will now be lucky to have a pension worth 25 per cent. of their final salary. Since the scheme closed, about 3,000 workers have joined BT, and a Communication Workers Union official has estimated that the average contribution of new joiners to their pension was 4.7 per cent. in that period, matched by 4.7 per cent. from BT. That represents a considerable saving to the company, and, as the hon. Member for Stalybridge and Hyde (James Purnell) said, it means a pay cut in the future.
That is the situation for new entrants, but people who are already in the scheme are worried that it will be closed, forcing them, too, into a money purchase scheme. The hon. Member for Glasgow, Anniesland mentioned that the average employer contribution into final salary schemes was 15 per cent.—I understand that it was actually 15.4 per cent.—whereas the contribution to a money purchase scheme is 6 per cent.
The Government have a policy of changing the ratio of state to private pensions from 60 per cent. state and 40 per cent private to 40 per cent. state and 60 per cent. private by 2050. There must be serious concerns about that. Future pensioners are suspicious, not least because of the pensions mis-selling scandal, the Maxwell scandal and now the Equitable Life debacle.

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A change in the ratio is not guaranteed to provide pensioners with a decent income in retirement, which must be our aim. There are particular difficulties for people in areas such as my own and throughout Wales, where incomes are lower and the ability to save is much more restricted. There are difficulties for individuals, and a difficulty for Welsh society as a whole. We have an employment structure that is skewed towards lower paid jobs, which are much more common. The difficulty in the pensions system is a difficulty for the community in general.
The Government make great play of the stakeholder pension. The Welsh economy is overwhelmingly made up of small businesses with fewer than five employees, so those employees will not necessarily get access to stakeholder pensions. Take-up may be a problem in Wales, especially among the lower end of the target group—those on incomes of £10,000 up to about £18,000. We in Plaid Cymru look forward with great interest to the publication of the comprehensive take-up figures in October.
We need a better system of funded second pensions that will reach the lower paid, especially those in small enterprises such as those I have mentioned in Wales. We also need a proper retirement pension, and a redistributive rise in that pension is essential.
7.52 pm
Mr. Tom Levitt: We began the debate with a contribution from the hon. Member for Havant (Mr. Willetts), who is back in his place. He had a packed audience on his side of the Chamber, and there was an air of expectation. I think that Conservative Members were looking for the man to put "fun" back in "FUN-ded" pensions, but his contribution fell flat and it was more like putting the "dead" back in "fun-DED" pensions. He gloated about what is happening in the stock market. In the last two Prime Minister's Question Times, the Leader of the Opposition—once in person and once by proxy—gloated over what has happened to the stock market. As many of my hon. Friends have said, it is what has happened to the stock market that has most damaged funded pensions in recent times, not the actions of the Government.
Andrew Selous: Will the hon. Gentleman give way?
Mr. Levitt: May I make a little progress, and if I have time at the end I shall come back to the hon. Gentleman?
The irony is that, according to Tory philosophy, everyone's pension entitlement should be dependent on the casino of the stock market. That is how private pensions work. The hon. Member for Havant said that his party's vision is that older people should not be dependent on state benefits. If they should be independent of state benefits, presumably that means that they should be totally dependent on benefits from other sources, so they would be dependent on the whims of the stock market
As the hon. Gentleman knows, the formula of private funded pensions plus the element of compulsion that some of his colleagues have called for would enable the providers of private schemes to have a field day. Many tears were shed by Conservative Members for the
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actuaries and investment managers, whereas little was said—in the hon. Gentleman's opening speech nothing was said—about pensioners, their living standards and their expectations.
Private funded schemes have suffered because the value of the stock market has gone down. It has gone down so far that a few days ago it was back to 1997 levels. That has been painted as a tragedy, but in another context the economic situation of 1997 was described by Conservative Members as a golden legacy. If we are starting off with a golden legacy at worst, with the stock market already improving, it is to be hoped that this hiccup is almost over.
The stock market fell in recent days not because of actions by Governments, but largely because of fear in the markets as a result of the signals that have been sent from WorldCom, Enron, Xerox and others, from a sky darkened with greedy, fat cat chickens coming home to roost—if I may mix my metaphors. [Interruption.] One takes a risk when mixing metaphors.
The reason why we in this country need not be so concerned as people elsewhere—although we should not be complacent—is because our economy is not a free for all. We have regulated our economy, successfully combated inflation with a healthy target of 2.5 per cent., reduced interest rates to a manageable level, and stabilised the economy. We have recognised that unbalanced distribution of income and wealth is destabilising, and we have combated the forces, such as unemployment, that feed economic instability. The actions that we have taken in the past five years have put us well on the way to conquering poverty at home and in the developing world.
The Conservative party does not want to talk about the economy. The reasons for that are obvious. We have created a situation in which investing in enterprise is safe, because interest rates are reliable, the stock market can operate fairly, and savings can grow faster than inflation. We remember the days of 15 per cent. interest rates, 4 million unemployed, and the scandal of pensions mis-selling, which was worth £34 billion to pension holders and was too long ignored. That exploitation of the gullible by the greedy, connived at by the friends of the Conservative party, damaged people not just for today but for the rest of their lives, especially for their retirement. We remember Black Wednesday, Black Monday, black every day of the week, when the Tories were running our economy.
Bob Spink: Will the hon. Gentleman give way?
Mr. Levitt: I am on a wave, so if the hon. Gentleman does not mind, I may come back to him later as well.
The Tory years were not bad for everyone. It has to be said that there were some winners. Between 1979 and 1997, the average net income of pensioners rose by 64 per cent., compared with the rise in real average earnings of 36 per cent. That sounds good for pensioners, but whereas the top fifth of pensioners saw their incomes rise by 80 per cent. in that period, the bottom fifth saw theirs go up by just 34 per cent. Eighty per cent. of a lot is much more than 34 per cent. on the income of the poorest, which is very little. In 1997, the richest fifth of our pensioners had three times the income of the poorest fifth. Rich pensioners got richer under the Tories, and poorer pensioners got poorer.

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Occupational pensions are only part of the story. We must consider the background, pensioner incomes and pensioner needs in general. Pensioners get income from six different sources: state retirement pension; income from investment; occupational funded pensions; income-related benefits; disability benefits; and earnings. Ninety-eight per cent. of all pensioners receive the state retirement pension. I believe that the Government's policy for the state retirement pension and the undertakings that have been given are right. I would not favour the restoration of the link with the rise in earnings, because we have done more since 1998—£3 billion more—for the poorest pensioners than a simple restoration of the link with earnings would have done.
In 1997, after 18 years of Tory government, four workers in 10 were still making no voluntary provision for their entitlement over and above the state pension, which was then only £68 a week. Two million pensioners were living in poverty. In the past two years alone, we have increased the state retirement pension by £8 for a single pensioner and £12.80 for a couple. Many over-75s claim a free television licence, which is worth £2 a week, and the winter fuel allowance for all pensioner households and men over 60 brings in an extra £200, which is equivalent to £4 a week, at a time of the year when fuel costs are highest.
The second category was investments. In 2000–01, 70 per cent. of pensioners had income from investments. That sounds great. It sounds as though they are looking after themselves. They are playing the market, taking the risk and investing in their future. Or are they? Of those people who had income from investments, 57 per cent. had incomes from investment of less than £10 a week, so presumably those investments are largely post office and building society accounts. They are exactly the people who were penalised by the benefits system. For every £1 that they received, they lost £1 in benefit entitlement—in marginal cases, they would lose more than £1 for every extra £1 from their investments. But not any more. Many have been picked up and helped by the minimum income guarantee, and 5 million people will get help of around £8 per week—up to £13.80 per week—from the pension credit when it is introduced next year. Nobody will have to live on less than £100 a week when the pension credit comes into effect.
I was interested to hear the speech of the hon. Member for Sutton Coldfield (Mr. Mitchell), because one of his predecessors said in another place that pension credit
"is long overdue, and my hope is that it will provide support for some of the most deserving people in this country."—[Official Report, House of Lords, 18 December 2001; Vol. 630, c. 165.]
That was Norman Fowler, the former Secretary of State for Social Services. It is worth adding, as regards investment income, that 5 per cent. of pensioners—those who need no help, and should expect no help, from the state—have investment income of more than £200 per week.
On the third category, 60 per cent. of pensioners receive income from occupational pensions. Of those, more than half had an income from occupational pensions of more than £50 a week, and one in six had an income from occupational pensions of more than £200 a week. Clearly, those pensions have taken a long time to build up, with a lot of money put into them as an investment. Not everyone is offered or can afford occupational pensions. So we introduced stakeholder pensions, of which 815,000
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have been sold so far. Stakeholder is holding its own in the market and is clearly going to be a success, as even Conservative Front-Bench Members have conceded in unguarded moments.
About a third of pensioners received income-related benefits in 2000–01. Many, but not all, of those would formerly have been on income support, but can now get the minimum income guarantee. I should say for the record, "Telephone 0800 028 11 11 for more information, and get your claim in now." Some 800,000 people claimed the minimum income guarantee last year, and the Department for Work and Pensions has details of another 100,000 who did not qualify then, but qualify now because of the relaxation of capital rules. That is very welcome for them.
Income-related benefits are necessary because the system as it stands fails too many people, particularly: women who paid a reduced married women's stamp, often because they had been wrongly advised to do so over the years; women with broken contribution records owing to their commitments as parents; 2 million disabled people unable to work full time or permanently; 2 million carers—often women—dedicated to family members, but unable to care for themselves; and 4.5 million workers—again, often women—who do the dirtiest, most miserable and often most thankless jobs on full-time incomes of less than £10,800 a year. Since April, those people have had available the state second pension, which will build on the experience of the state earnings-related pension scheme—SERPS—in the past. For the categories that I mentioned, we will assume an income of at least £9,500 a year and credit them as such into the state second pension to ensure that they will have more then they could expect under the previous system.
The fifth category of income is disability benefits, which are received by about one fifth of pensioner households. They will not be taken into account as they are supposed to meet the added costs of dealing with disability.
Between 1979 and 1997, investment income rose by 103 per cent.—
Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman has had his allocation.
8.4 pm
Mr. Hugo Swire: I am left with the almost impossible task of following the high oratory of the hon. Member for High Peak (Mr. Levitt), but I shall attempt to do my level best. Indeed, I wish to emulate the hon. Member for Glasgow, Anniesland (John Robertson), who at the commencement of my speech vacated the Chamber. Were he here, I would point out to him that my constituency, East Devon, is also home to many pensioners. I think that it has one of the greatest concentrations of pensioners in the country—that is, of course, of those who are not in Glasgow, Anniesland.
It is perhaps worth remembering the hopeful words of the 1997 Labour manifesto, which stated:
"We believe that all pensioners should share fairly in the increasing prosperity of the nation. Everyone is entitled to dignity in retirement."
That is a lofty aspiration, but alas, like so many other Labour promises, it has remained just an aspiration—although I begin to doubt even that.

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For pensioners, the problem with pensions is that they are too complicated. According to Government estimates, 1.7 million pensioners receive payments under the minimum income guarantee, but Help the Aged estimates that some 2.5 million pensioners are entitled to such support. In other words, only one in five of those eligible claim the minimum income guarantee. Some suggest that that equates to as many as 770,000 people, all of whom are losing an average of £22 a week, thereby saving the Government nearly £900 million a year. That is a poor reflection on a flawed system.
Mr. Andrew Love: Will the hon. Gentleman give way?
Mr. Swire: I am afraid that I will not.
Pensioners are, rightly, proud. Many do not wish to be in receipt of benefits when they would be satisfied with what they regard as an entitlement. That is often at the root of it all. The minimum income guarantee claim system, which is designed to overcome the stigma of means-testing pensioners, is not working. It has cost more than £50 million to date, with no significant increase in the number of pensioners taking up their entitlement. The introduction of the pension credit is expected further to add to the complexity of the means test, and will bring more than 50 per cent. of pensioner households into the claims-led process of the minimum income guarantee or the pension credit. How does that square with the Department for Work and Pensions information sheet, which clearly states:
"The dependency culture in social services needs to end. They should be refocused to promote independence, helping people to live in their own homes and do as much as possible for themselves"?
That statement is all about the independence of pensioners, yet the Government's strategy is seemingly to make them ever more dependent. Far better the alternative that was well articulated by my hon. Friend the Member for Havant (Mr. Willetts) at the start of the debate. He suggested, among other moves, arresting the spread of means-testing by putting the cost of the pension credit into a higher-rate pension for older pensioners. That would be welcomed by many of my constituents. The elderly feel very let down by the Government. Many of them are people who have saved all their lives and were brought up in a perhaps more frugal—certainly a more responsible—age, when they were taught to be accountable for their own behaviour and certainly for their own retirement. That is the attitude that gave rise to the maxim, "Look after the pennies and the pounds will look after themselves."
This afternoon, the Secretary of State said that the Government have a responsibility to those who save. Dead right they do, but there is precious little evidence of their practising what they preach. What about those who saved all their working lives to take out private medical insurance and not be a burden on the state, only to see the tax benefit swept away, forcing many of them back on to an already overstretched national health service? That was one of the incoming acts of a pernicious Government. What about those who have suffered as a result of being forced to purchase annuities at the age of 75? It has taken a Conservative Member, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), to introduce a Bill to reform that requirement.
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In my constituency I have many pensioners and many pensioner activists, not least Mr. Venison and Mr. Applebee, whom I warmly congratulate on their forming of the Devon and Cornwall pensioners convention and the Devon action forum. A Minister promised some time ago on a radio phone-in programme that he would go to visit them, but they are still waiting.
Mr. McCartney: I promised not only a visit, which I will make, but a further interview on local radio, which has now been arranged.
Mr. Swire: I am extremely grateful to the Minister; as usual one must wait for a public announcement, rather than a response to a private letter. None the less, I am grateful for an answer for which the pensioners to whom I referred have been waiting for a year and a half or two years.
The Minister will be aware of the grey power of these pensioner conventions and forums. They are getting increasingly fed up with not being listened to and, as they see it, with being preached at. They are no longer happy to remain a silent minority.
At the end of the conference on better government for older people, the Prime Minister said:
"We can make a real difference to the lives of older people by engaging them in strategic planning and policy making. We can ensure that our services are delivered in the right way by consulting with and listening to them."
Those are Empty words to the tens of thousands of pensioners who now live in a state of heightened anxiety.
Help the Aged has said that the Government's approach to pensioners reflected widespread discrimination against older people in public policy. Research has shown that one in two Britons believe that older people are treated as if they were on the scrap heap. That is not exactly a ringing endorsement of the Prime Minister's approach and I suspect that that is a sentiment shared by his father-in-law, who is active in these matters.
Another worrying factor is the crisis of confidence that the Government have now created. There was the derisory 75p rise in the pension and, as we have heard this afternoon, the £5 billion a year raid on pensions resulting from the reforms to advance corporation tax. We have also seen the acceleration in closures of final salary pension schemes resulting from that short-sighted act. The Prime Minister has argued that the market has compensated because the stock market is now doing so well. My belief is that the stock market has come off another 130 points today, so that argument now rings rather hollow.
Yesterday, we had the most recent admission: that the Government have been working on grossly over-estimated figures for the level of contribution to funded pension arrangements. All these factors are making the savers of today—the pensioners of tomorrow—deeply cynical about the idea of a pension at all.
When that is combined with the worrying drop in the savings ratio—which is at its lowest since records began in 1963—we begin to get some idea of the scale of the problem. There is a very real possibility that millions of people will retire without enough money to live on.
It is not just the pensioners whom the Government must now seek to convince. It is all those people in work who are thinking about their retirement and do not wish to be dependent on the state, which, to my way of thinking, is always an unreliable source of largesse.

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It is perhaps timely to remember what the last great Liberal, David Lloyd George—
Mr. George Osborne: The only great Liberal.
Mr. Swire: My hon. Friend corrects me; the only and last great Liberal. When introducing old age pensions in 1909, Lloyd George said:
"How we treat old people is a crucial test of our national quality. A nation that lacks gratitude for those that have honestly worked for her in the past whilst they had the strength to do so does not deserve a future for she has lost her sense of justice and her instinct for mercy."
We are a prosperous country, but today's pensioners are not sharing in that prosperity. The Government must, as a matter of urgency, look at ways of rectifying that.
The value of assets in our pension funds is falling. The proportion of recently retired pensioners with occupational pensions has declined from 67 per cent. to 59 per cent. between 1997–98 and 2001. The proportion of workers without a funded pension has risen from 40 per cent. to 44 per cent. in the last two years.
Of course we understand the demographic problems and the fact that people are living longer. Of course we appreciate that radical solutions are now needed. I am interested in the possibility of raising the age of retirement and being more flexible about the dividing line between being in work and being retired. But this crisis is a crisis of the Government's own making and solving it requires a commitment that, to date, has been sadly lacking.
8.14 pm
Mr. Barry Gardiner: Thank you, Mr. Deputy Speaker.
"Means-tested benefits for the poorest have rarely if ever been more generous. With the introduction of the pension credit next year they will become more so. Serps, the state earnings related pension scheme, is paying out the most generous second-tier pensions that the state will ever provide. And millions of pensioners are benefiting from the mighty growth in occupational pension schemes that happened in the 1950s and 1960s.
There are still plenty of troubling cases of poverty among pensioners—not least the failure of all those entitled to means-tested help to claim it. But average pensioner incomes have risen faster than the rest of society in recent years, and the average newly retired pensioner has never had it so good."
Mr. Swire indicated dissent.
Mr. Gardiner: The hon. Gentleman shakes his head, but those are not my words; they are the words of Nicholas Timmins in yesterday's Financial Times.
The present growth in pensioner incomes, partly from the Government, has come on the back of a beast of burden that is rapidly becoming extinct. I refer to the occupational pension schemes that give defined benefits in relation to final salary. We have heard that those schemes are closing and the hon. Member for Havant (Mr. Willetts) has provided two clear reasons why he considers that to be so; one for each of his brains, perhaps.
First, the hon. Gentleman blames the reforms to advance corporation tax by this Government and the £5 billion a year taken in tax. This, he says, has inevitably damaged the value of defined-benefit funded schemes. The Secretary of State has already explained that the advance corporation tax reform levelled the playing field
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to encourage better investment decisions by removing the distortions of the asymmetry of the tax burden between retained profits and dividends paid. The point is that money previously paid as dividend is now being reinvested in the company to increase productivity. Previously, the tax concession distorted that decision.
Mr. Tim Boswell: Will the hon. Gentleman give way?
Mr. Gardiner: Not at the moment.
The current policy, by putting reinvestment on a level with shareholder dividend, actually enhances shareholder value in the long run and serves to eliminate distorting red tape, as the Opposition motion demands. A shareholder can always realise any future dividend stream in a capitalist market simply by selling their shares.
It may surprise the House to know that a company such as Microsoft has not issued a dividend in 15 years. Indeed, its official policy is:
"Microsoft does not currently issue dividends on common stock or have a direct stock purchase plan, choosing instead to reinvest profits into operations. Although our Board of Directors periodically reviews this policy, Microsoft has announced no plans to change the policy."
Yet no fund would think on that basis that it was unwise to hold Microsoft stock. Indeed, most fund managers would say that they cannot afford not to hold Microsoft.
Conservative Members like to use ACT as a stick to beat the Government. The fact is that they fail to understand the workings of the market and how shareholder value is measured in more ways than dividend income.
The real test that the hon. Member for Havant needs to apply to ACT is the integrity test; would he abolish it? He would not, and he will not. As such, his two brains may blame it for the demise in occupational schemes, but his two faces want to retain it for the revenue that it brings to the Exchequer. That is a fundamentally dishonest position to adopt before this House.
The second accusation that the hon. Gentleman made is that the savings ratio is too low. I agree with that. What he did not do was explain what he saw as the causal link between Government action and that low savings ratio. He did not do so because he could not. The report by Oliver Wyman and Co., entitled "Targeting the Savings Gap", has identified a £27 billion gap in the savings provision that we as a nation require to fund a comfortable retirement.
The hon. Gentleman was gracious enough to accept that the provision by Nigel Lawson in the Finance Act 1986 to cap occupational schemes at 105 per cent. of value was a disastrous measure that led to employers taking superannuation holidays that the hon. Gentleman calculated at £1.4 billion per year. Over the intervening period, that is £21 billion that employers have taken from their employees. He will, I am sure, accept that that is £21 billion at 1984 values. The compound effect on occupational schemes has been simply enormous.
There are real problems facing our pensions system. Demographic shift is real, with males living on average eight years longer than they did 20 years ago. That brings increased liabilities for pension funds and tends to lower annuity rates. The demography is a critical problem,

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but real incomes have far outstripped the rate of growth in life expectancy, so it is not that the money is not there, simply that it is being spent on different priorities and, I might conjecture, different savings vehicles that members of the public are now choosing to use rather than putting their money into pension schemes.
The hon. Member for Sutton Coldfield (Mr. Mitchell) was good enough to absolve the Government of responsibility for the demographic shift. I would have said that if there is one thing that it is possible to lay at the Government's door it is the fact that people now live longer, given the improvements in public health, employment and social conditions. However, I wonder whether he will join me in blaming those employers who are using the ending of final salary schemes to reduce their contributions to their workers' new money purchase schemes. The House will be appalled to find that, typically, workers now see only between 6 and 11 per cent. of their pay going into their defined contribution scheme, where previously it was 15 to 20 per cent. going into a defined benefit scheme.
Much is made of the savings ratio, but I am surprised that more hon. Members have not spoken about the savings distribution across the population. Within limits, I would far rather that we had a lower savings ratio that comprised a much wider distribution across the population, showing more people saving for a comfortable and adequate retirement rather than fewer people saving for a wealthy and luxurious retirement.
The savings ratio is of course important, and statistics show that in this country we put about 5.5 per cent. into our pensions savings, while in other countries in Europe the figure is up to 16.5 per cent. Even if we made up the full £27 billion, we would not catch those countries up, so much more needs to be done on the savings ratio, but equally we must see the effect of the distribution pattern.
The savings ratio is important, but the savings distribution is what addresses the real evil faced by our constituents: poverty in old age. I welcome the steps that the Government have taken to tackle poverty in old age: the reduction of VAT on fuel; the £200 winter payment; the minimum income guarantee; the stakeholder pension; and the introduction, when it comes, of the pensioner credit. Those are real and valuable changes that target £6 billion of resources on the many who are not well off, rather than the few who are.
I want to look forward to the future changes for which the Pickering and Sandler reports may call. Flexibility is a requirement of any pension system that is to meet a labour market that now expects to have mobility to a new employer at least every decade of one's working life. Flexibility and portability must be built into pension products.
I warmly welcome the courageous and thoughtful speech of the hon. Member for South-West Bedfordshire (Andrew Selous). I am happy to agree with him that incentives to employers would capture positive externalities for the Government by encouraging more people to save for retirement. I urge him to be more radical, however, and to embrace compulsion. I urge Ministers to consider making tax concessions available only to those employers who contribute double their employees' contributions, up to a combined maximum of
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15 per cent., so rewarding employers who encourage their workers to save up to 5 per cent. of their wages by topping that up with 10 per cent. employers' contribution.
Clarity and transparency are vital, and are sadly lacking throughout the financial services industry. That is nowhere more so than in pensions, where the financial benefits are so long deferred and mature only at a time when, by definition, other earned income has largely ceased. If people's pensions fail, they are vulnerable in a way that they are not at any other time of their life. That is why the disaster that is Equitable Life has had such a dramatic effect on public confidence in the industry.
In today's Financial Times, we read of yet another increase in Equitable's market value adjustment—the penalty that members must pay to take their own money elsewhere. The article says:
"Equitable has no fat at all. It is now cutting into the flesh and will eventually get to the bone. They are looking down the back of the sofa for 50p bits to put in the meter to keep the lights on."
The problems at Equitable were complex, but at heart they relate to actuarial failure properly to represent the company's liabilities. In such an environment, I find it disturbing and distasteful that some Opposition Members have criticised measures such as FRS 17 that will force companies to record properly in their accounts the full liabilities that they face. I welcome the better regulation that is being brought to the financial services industry and look forward to reading both the Pickering and Sandler reports.
One of the most important recommendations in the Oliver Wyman report about the savings gap is that provision of personalised financial advice is absolutely essential if we are to encourage people to save. I commend to Ministers the suggestion that a nationwide system of financial advice bureaux should be inaugurated, along the lines of citizens advice bureaux throughout the country, to ensure that people have access to advice as recommended by the Financial Services Authority's consumer panel.
My time is up, but I am grateful for the opportunity to speak to the House on a most important issue.
8.26 pm
Mr. George Osborne: I apologise for not having been here for the whole debate. I feel a little cautious about contributing, partly because I have been preceded by a host of former Conservative pensions Ministers, as well as the distinguished former Minister, the right hon. Member for Birkenhead (Mr. Field). Collectively, they have forgotten more than I ever knew about pensions. I was preceded also by my hon. Friend the Member for East Devon (Mr. Swire), who made an excellent speech. I am also cautious because, as the youngest member of the Conservative parliamentary party, and one who has been here only a year, I am uneasy about talking about retirement—but I suppose that that is one of the hazards of politics.
I have great respect for the right hon. Member for Birkenhead, and even more so now that I sit next to him on the Public Accounts Committee. He talked about the need for consensus. Among the party political brickbats of this debate, there has been much consensus, as expressed in the opening speeches my hon. Friend the Member for Havant (Mr. Willetts) and the Secretary of State.

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One consensus is that, whatever our good intentions as politicians, we cannot rely on the state indefinitely to provide a secure income in retirement. On all the polling evidence, that consensus is shared by most people of my age or younger. It is even questionable whether the amount provided now is adequate.
The second point of consensus for most people, including most Government Members, is that the answer is to increase the contribution of the private sector—by how much is an issue that I will return to later. The Opposition support the Government's target, stated in their 1998 Green Paper, to increase private sector contributions to the nation's pensions from 40 per cent. to 60 per cent.
I hope that we can also agree that, sadly, progress towards that target has hit choppy waters in recent years, although we may disagree about the causes. The evidence is there. The right hon. Member for Birkenhead was right to say that there is a sense of urgency among our constituents about the pensions crisis, which now appears every day in our newspapers, and a feeling that the people whom they elect need to tackle it urgently.
The evidence is clear. The Association of Consulting Actuaries produced figures showing that fewer than four in 10 of final salary pension schemes are still open to new members. The parliamentary scheme is an exception—as I can say as a new Member. The Department for Work and Pensions' own long-term prediction for the pension credit suggests that 65 per cent. of pensioners could be receiving it by 2050. That is hardly evidence of that Department's confidence that we are moving in the right direction in terms of reducing dependence on state provision.
As I have said, I suspect that the consensus starts to break down when we consider the causes of the crisis in funded pensions. Although hon. Members do not all agree on those causes, there is a great deal of agreement within the pensions industry. Some of the causes are outside the Government's control. The hon. Member for Brent, North (Mr. Gardiner), my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) and others talked about growing life expectancy, but life expectancy is increasing at only about one year per decade. In terms of the existing £1,000 billion-worth of pension liabilities, that represents an extra liability of only some £3 billion—a large sum, but not that impossible to deal with in relative terms.
Of course, we must also consider the recent problems in the stock market, and the double whammy—to use a very good phrase—of a falling stock market and low gilt yields. As a result, people have not only smaller final pension funds but low annuities. However, they are not the only factors. Earlier this year, the Minister for Pensions himself conceded in Personnel Today—a publication of which we are all doubtless avid readers—that the
"layers of regulations have been loaded on to the pension regime resulting in too much red tape".
I welcome the Government's efforts to deal with that. As Conservative Members have pointed out, almost everyone accepts that the pension tax, which was introduced in 1997, has impacted on pension funds. The accountancy firm Chantry Vellacott calculated that someone of my age needs to save an extra £200 a year to make up for that tax.
If Labour Members are a little suspicious of Chantry Vellacott, they should at least take note of Tesco, which gave the pension tax as the reason for increasing
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contributions to its final salary scheme by 15 per cent. As Peter Thompson, chairman of the National Association of Pension Funds, said last month, the Government's actions since 1997 have
"led to a scenario where employers can be forgiven for taking a view that the Government is at best neutral about whether they make pension provision for their employees".
What can be done to make the Government better than neutral—or, as some have suggested today, not hostile—about expanding personal provision? How can they be helped to meet their 1998 target of a 60 per cent. contribution to pensions from the private sector? Several suggestions have been made today, including some particularly bold ones from my hon. Friend the Member for South-West Bedfordshire. I am not entirely convinced that I want to enter the next election campaigning for an increase in VAT, but I am happy to listen to his arguments in the coming years. The hon. Member for Brent, North—another member of the Public Accounts Committee—also came up with some interesting ideas.
The consensus is that we need to look again at the FRS 17 rule, which has clearly damaged company confidence in pension schemes, particularly in the current financial market. As the Minister accepted, we need to reduce red tape dramatically, and to clear the current mine field of Government pension schemes that almost no one—except perhaps my hon. Friend the Member for Havant—can understand. The Government also need to acknowledge the impact of changes such as the 1997 pension tax, and to see what can be done to address it. Conservative Members believe that the annuity rule also needs to be dealt with. In that regard, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) has introduced an excellent Bill, which has consistently been voted for at various stages during its legislative passage.
Those important steps would go a long way towards tackling the current crisis, but I wonder whether we should think more boldly than that. This is the point at which the young Back Bencher usually gets into trouble, but there we go. One of the greatest divisions in our society is between those who have capital and the security and confidence that that brings, and those who do not and who, as a result, lack security and are exposed to some of the cold winds of life. The Government talk about raising people out of poverty, but all their measures are directed at increasing people's weekly income. Important though that is, it does not address their lack of capital—by which I mean property, savings, a private pension and the resulting security and confidence. The introduction of the right to buy council houses was a massive boon to those people, as even Labour Members now accept. It gave many thousands of people a chance to own their own home, and we can see the difference on visiting most council estates. We can tell almost with the naked eye which properties are owned by people and which remain owned by the council, because people often take a lot more pride into property that they own. That is a visible example of the pride and some of the benefits that ownership brings.
However, that policy is more than two decades old, and precious few new policies have been introduced to address capital poverty since then. The Government's now forgotten, half-hearted and ill-conceived baby bonds scheme was originally intended to address precisely the problem that poorer people do not have a capital base to help them as they start out in life. Is it not time that we

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turned to personal pensions as we consider how we can give everyone a stake in the future and the security of a decent income in retirement?
Mr. Love: The motion before us calls for
"better incentives for people to save".
Given what the hon. Gentleman has said so far, does he think that, in line with the comments of my hon. Friend the Member for Brent, North (Mr. Gardiner), those incentives should be concentrated at the lower end of the market, where savings are least?
Mr. Osborne: I certainly want to increase savings among the poorest in society, but how we do that is another matter. Although it became lost in the election battle, the Conservative party had the very good idea of taking all savings out of tax, so that people are taxed only once on their saved income.
Before the 1997 general election, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), as Secretary of State for Social Security, produced a breathtakingly innovative scheme that was of course misrepresented in the party political battle. I suppose that that is just a hazard of democratic politics, but the scheme showed us the way forward. Indeed, my hon. Friend the Member for Havant came up with a voluntary version of it at the last general election.
Given that the political consensus has moved on and there is now recognition that a problem exists with pension provision, it is time to look again at how to provide a personal pension for all, without preconceptions and accusations of privatisation. We need to give people real security in retirement, the confidence that comes with capital ownership, and a real stake in society. The Government once said that they were prepared to think the unthinkable on welfare reform, but they have not had the courage to match that early rhetoric. The greatest prize of all in welfare reform is giving everyone a funded personal pension. That prize is within our grasp, and we should reach out and take it.
8.38 pm
Ian Lucas: I am glad to have this opportunity to discuss pensions, for two reasons. First, the issue is raised increasingly by my constituents and has always been very important to them. Secondly, as my hon. Friend the Member for Colne Valley (Kali Mountford) said, it heightens the distinction between the Labour and Conservative parties. When we discuss pensions in the House, Conservative Members always talk about advance corporation tax, stocks and shares, annuities and equities, while Labour Members talk about relieving poverty and supporting the weakest in our society.
We need to concentrate on the gaps in the speeches of Conservative Members. I listened carefully to the detailed proposals of the hon. Member for Sutton Coldfield (Mr. Mitchell). I tried to intervene on him, but—because of lack of time, I am sure—he did not give way. I wanted to ask whether his proposed scheme would replace the state pension scheme. That is the hole that exists in everything that has been said by Conservative Members.
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I would like a clear statement from the Opposition about whether the pension schemes that they are discussing would replace a state-funded pension scheme.
Mr. Arbuthnot: If a scheme were to be additional to the state-funded pension scheme along the lines of the original Beveridge vision that there should be a good funded pension scheme for everybody, with a basic state pension, would the hon. Gentleman accept it?
Ian Lucas: I would certainly accept that, but I am not convinced that that is what the Conservative party is proposing—quite the contrary, in fact.
This is a vital issue. I believe that the pensioners in my constituency who voted Labour in the last general election did so because they were pleased with the pensions policies that had been pursued between 1997 and 2001. By the time the last Conservative Government left office in 1997, a single pensioner was supposed to live on £68 a week. Pensioners recognised that substantial steps had been made by this Government in improving the lot of the poorest pensioners and of pensioners in general. They did not like the Conservative proposals at both the 1997 and 2001 elections for privatisation of the state pension scheme.
My voters had experienced the private sector before with regard to pensions. I make no apology for returning to the record of the Conservative Government in the 1980s when they presided over the most appalling shambles in the pensions industry. First, they removed the link between earnings and the basic state pension. Secondly, they allowed a completely unregulated private sector to persuade people who were involved in defined benefit schemes to switch over to defined contribution schemes. That was commission-driven, and poor advice was given to individuals at the time that the transactions were made. As a result, it was necessary for the Labour party, when it came to power in 1997, to put together a scheme to solve the pensions mis-selling problem. That cost the pensions industry £34 billion in total. That is the scale of the Conservative party's incompetence. It will have had a substantial effect on the viability of the pension funds that we are discussing today.
We have heard a lot today about advance corporation tax. I genuinely believe that any scheme that encourages long-term investment rather than the short-term swapping or selling of shares is a good thing. One of the weakest aspects of the British economy over many years is that we have invested in the short term far too much and in the long term far too little.
The Chancellor's proposal in 1997 and the action that he took was right. We must remember what he did with that money. He supported the poorest pensioners in our society and increased their income. That was the right thing to do; it was perceived by the public as the right thing to do, and it is why the Government were returned to office in 2001.
It is no good for the Conservatives to try to blame the Government for the present difficulties with final salary pension schemes. Most companies involved in, or terminating their involvement in, such schemes do not seem to understand that the scheme imposes obligations on them. The companies promised to pay their employees a decent pension and they should honour that promise. That means making consistent payments to pension funds—not taking contributions holidays that last for years.

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My constituents have been affected by the actions of Iceland and the Caparo group. In the 1990s, both companies took substantial contributions holidays that greatly affected their pension funds. During this debate, I have not heard one criticism from Opposition Members of individual companies which have acted in that way.
Kali Mountford: I am grateful to my hon. Friend for pointing out to the House the folly of drawing out funds too soon. Is he as horrified as I am at the current scam—recently revealed on television—which has affected some of my constituents? People are being encouraged to give up their pension rights by selling them on to another company which gives them a lump sum but they receive a smaller pension later. People do not realise that they can ill afford to do that. Should not such loopholes be covered by regulations?
Ian Lucas: I agree with my hon. Friend, and I am certain that my right hon. Friend the Minister for Pensions will look into that matter if she gives him the details.
Mr. McCartney: Yes.
Ian Lucas: I have heard no condemnation from the Conservatives of companies that have taken long contributions holidays. Individual employees are being heavily penalised. Companies are merely notifying their employees that the schemes are ending. There is no consultation and no discussion—no partnership at all. That is where blame really lies for the shortfall in pension funds.
As we all know, pensions are complex and difficult. The debate has been interesting—I have sat through all of it—and there have been shafts of light and some consensus on both sides of the House. We all agree that, if possible, pensions should be simplified and we are looking forward to the proposals of the Pickering inquiry in that regard.
I am sure that my right hon. Friend the Minister will take note of the general feeling that is developing that compulsion is a coming idea in the pensions sector. Choice was the mantra in the 1980s, but that did not lead to a happy outcome. We have to accept that there should be compulsion on employers and employees alike to support individuals in their old age. If individuals are not supported in old age by contributions that they made earlier in life, the state will end up footing the bill. Although encouragement is always more popular with our constituents, the time is right for us to listen to the calls on both sides of the House for the introduction of compulsion. It should start with those companies that promised to pay into pension funds and failed to do so.
Mr. Arbuthnot: I am listening with attention to the sensible things that the hon. Gentleman is saying. Does he agree that it is not a question of whether there should be compulsion—it already exists—but of how much that compulsion should be extended?
Ian Lucas: Everything I say is sensible. [HON. MEMBERS: "Hear, hear".l
I am certain that the Minister has listened to all that I have said. The debate has been interesting and I am certain that he will have seen the shafts of light that have
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been thrown on the subject—although there have been some dark clouds. I am certain that he will take on board the fact that a consensus is developing on a serious issue that we must all address.
8.49 pm
Mr. Julian Brazier: Over the years, I have been privileged to have the opportunity to speak on this subject on several occasions, both in the Chamber and in various Bill Committees. I have also written papers on it. I shall not follow the hon. Member for Wrexham (Ian Lucas) very far: sadly, I do not think that a consensus is emerging at all—far from it—although there is consensus that something needs to be done.
What I found very sad about the Secretary of State's speech was an absolute unwillingness to come to terms with two desperately serious crises—arguably, they are alternative sides of one coin—that have happened on his watch. I shall not try to pretend that either is wholly the Government's fault, although both are partially the Government's fault—my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) split what is the fault of the market from what is the fault of the Government rather neatly. Both these crises have happened on the Government's watch, however, and, before the Government can seek to address them, they must acknowledge that they are happening.
The first crisis is the collapse—not the fall, but the collapse—in the savings ratio. When I intervened on the Secretary of State to ask him how he accounted for the fact that the ratio was 9.5 per cent. when the Government took office and that it is now 3.75 per cent., he brushed it off as a cyclical factor. As for the current state of the economy, it has a modest growth rate and a relatively low unemployment rate—[Laughter.] Almost a quarter of children in Britain live in households in which there is no wage earner, so there are question marks over the unemployment rate. Even if one were to accept that the economy were booming, which no commentator suggests, how is it that at no point since records began almost 40 years ago has this ratio ever been down at the level of 3.75 per cent.? Surely, it should be manifestly clear that we cannot continue in that way.
The second crisis, which is very much the other side of the coin, is the deterioration—which is sliding quickly into what may become a collapse—in the pension expectations of middle-aged and younger people across a wide spectrum of earnings. The hon. Member for Wrexham made the point, which I think has been raised by every Member who has spoken today—I was absent during the middle of the debate—about pension mis-selling. Whatever mis-selling may have taken place—there is no doubt that it existed to a degree—the last Government left behind two immensely powerful statistics. First, more than two thirds of all people on the cusp of retirement had private or occupational pensions. Secondly, we had more pension assets saved than all the other countries in the EU put together. The contrast between that and the position today could hardly be greater.
Already, in just five years, the first of those figures—67 per cent.—has fallen to between 59 per cent. and 60 per cent. The figures for comparability of pension assets are not available because the Government cannot even provide information about our own pension assets at

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the moment. The hon. Member for Brent, North (Mr. Gardiner), who made an interesting speech, quoted figures that were undoubtedly wrong. Had they been true, however, they would have been a damning indictment of how that comparability has slipped. When we do have some real figures, we will no doubt see how badly that comparability with the rest of Europe is slipping.
When the Conservative party was last in government, the one area of our pension provision that, as an occasionally rebellious Back Bencher, I sought to attack, was the changes that we introduced in 1988 that combined a more generous income support arrangement for the poorest pensioners with stringent capital testing for their counterparts who had managed to save a little. [Interruption.] I see the Minister nodding—
Mr. McCartney indicated dissent.
John Robertson: The hon. Gentleman obviously needs glasses.
Mr. Brazier: We all have problems with eyesight. It is one of the signs that we are approaching pension age. The Minister and I still have some way to go.
Although our record on pensions across most of the earnings spectrum was by far the best of any Government, the message was that we had a problem at the bottom with a rapid growth—about a sixth—in the proportion of people who became dependent on income support within three years when they saw the penalties for having a bit of capital and the extra rewards for not. What is extraordinary is that the Government seized on the only big mistake that the last Conservative Government made: they introduced the minimum income guarantee, a greatly expanded version of income support, that relies heavily on means-testing and on which the new structure of the pension credit is built. At the same time, they introduced a range of measures, listed by one of my hon. Friends after another, that undermined occupational and private pensions.
Of course the markets have slipped, for a variety of international reasons, but £5 billion a year in tax removal capitalises at about £100 billion, an enormous sum to take from the capital value of our pension funds. Other of hon. Friends, including my hon. Friend the Member for Havant (Mr. Willetts) in his excellent speech, referred to the progressive squeeze on the contracted-out rates for those choosing to contract out of state pensions. That is an extraordinary measure for a Government who say that they want to reverse state dependence from 40:60 to 60:40.
We have to step back when we consider policy and look at the bigger picture. My hon. Friend the Member for Havant was right to the allude to the bold policy proposal, encased in an amendment taken on the Floor of the House which had the support of the Liberal Democrats and the right hon. Member for Birkenhead (Mr. Field), to scrub the plan for the means-tested pension credit. Under the Government's measure, pensioners face not only a combined tax and withdrawal rate of 40 per cent., but extremely intrusive forms and a complicated set of conditions. For example, people who go abroad for more than four weeks lose the credit and have to start again.
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The measure also penalises people who want to work, which brings me to the second policy point outlined so clearly by my hon. Friend. We have to find ways to encourage people to work longer. Labour Members poured a great deal of scorn on the annuity measure introduced by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry). The Government's great mistake is that they have focused on the relatively small percentage of people on whom their measure would have an impact now. As people live longer and those of working age become more prosperous, it is inevitable that the percentage who could benefit from liberalisation—who could do more to provide for themselves—will rise. My father has just celebrated his 75th birthday. He continues to run his own small business and provides full-time employment for three young men, all with young families. He is livid that some bureaucrat has forced him to take out an annuity when he had continued to make pension contributions year after year.
I mentioned that great legacy of the last Conservative Government—the 67 per cent. rate of those retiring with pensions of their own provided by occupational or private schemes—which has fallen seven or eight points, an average of one and a half points for each year of this Labour Government. I also mentioned the collapse in the savings ratio. The markets may well recover. I do not know; I am not a pundit. What I am certain of is that the crisis in the collapse in the savings ratio, and the crisis in the fall in the proportion of people who are members of pension schemes and of people who retire each year as members of pension schemes, will not reverse on its own unless three broad areas of policy change. Let me remind the House of those. They have all figured in my speech.
First, we have to get away from means-testing. The most elegant and simple method is the one that was encapsulated in our amendment to the State Pension Credit Bill: instead of a creating another means-tested benefit, we should put the money into a better basic pension and focus it on the over-75s.
Secondly, we have to stop penalising those who wish to work. For goodness' sake, we need people to work longer, and the present annuity arrangements penalise those who do, as indeed does the pension credit, by the back door.
Finally, above all, the Government have got to get the figures right. We have had enough debate, and I am not going to attack the Government again for getting their figures wrong. But until we have proper, accurate statistics that reveal what is going on, it will be almost impossible to formulate decent policies, and the Government owe it to the House to straighten that out. Pensions matter, not only to the generation coming up to retirement but to the whole generation behind them.
9.1 pm
Mr. Bill Tynan: I apologise for being absent for some of the debate because I was at a meeting in the House. This has been an interesting debate, and there has been much consensus between Members on both sides of the House, which is important.
The title of the Opposition motion is "Funded Pensions", but we will miss a wonderful opportunity if we talk only about funded pensions. The TUC calculated that 5.8 million people were in funded pension schemes in 1991, but it is vital that we recognise that a vast number

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of people have no funded pension at all and no opportunity to join an occupational pension scheme. If we are to move towards compulsion, it has to operate with the aim that, in the long term, everyone will have a pension on which they can survive. If that is not the case, compulsion will not be accepted.
All previous Governments have failed the pensioners of this country because they have not created the conditions in which people do not need the likes of the pension tax credit or the minimum income guarantee. There are poor pensioners who, without the minimum income guarantee, would find themselves in abject poverty. I sincerely believe that this Government should be applauded, not denigrated, for having targeted those people. I believe also that the pension tax credit will make a difference to people in small occupational pension schemes, many of whom are excluded from housing benefit and council tax benefit.
It is unfortunate that people think about retirement only towards the end of their working life. We do not encourage young people to think about the funds that they will want when they retire. We have to find a way to convince them that there is a need to save for retirement because it is only when they find that they have no pension that they will realise that their standard of living will dramatically reduce and that they must depend on state benefits.
Occupational final salary schemes are the best, whether the pension is based on a 60th, an 80th or a 100th of the salary. Benefits are defined, so people understand that for every year that they work for the company, they will receive a 60th, an 80th or a 100th. We should tell companies that are considering abolishing their occupational pension scheme that if they need to make a move, it should be to a scheme based on 80ths or 100ths, but they should continue to provide a final salary scheme.
I worked in a company a long time ago. People say that I was only employed in that company, but I worked at times. I was a full-time union convenor. We were aware that there were two different forms of provision for staff and manual workers in that company: one group paid 2.5 per cent. and the other 5 per cent. We set up a pensions advisory committee, sat down and discussed how we could best rectify the problems and arrive at a common scheme. We were successful.
Horrifically, the women in that company were not allowed to join the pension scheme unless they had 10 years' service. The equal pay legislation allowed us to tackle and eliminate the belief that women should not be part of a pension scheme because they were not providers. It is important that we understand that women have been neglected. The hon. Member for Northavon (Mr. Webb) made that point tonight. We have to do something to improve the lot of women who, because of their circumstances or bad advice paid the small stamp and found themselves living in poverty.
Recent events are not unique. British Airways decided to close its final salary scheme in 1984, and an 18-year battle to establish who owned the surplus ensued. The question of who owns a surplus is always an issue with any pension scheme. The company claims that it owns it, but employees say that it represents deferred earnings and that they should have a say. Last month the Court of Appeal ruled:
"the situation in which the whole of the surplus can be said to be permanent is likely to be exceptional and may only occur when the fund is close to dissolution".
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In effect, the court said that no pension surplus can be considered sufficiently permanent to warrant its removal during the life of the fund; it can be removed only when the fund is being wound up, because it cannot be clearly identified before then.
The Finance Act 1986 made a difference to final salary schemes. It was decided that 5 per cent. overfunding would lead to any surplus in excess of that being taxed at, I think, 35 per cent. or more. The overfunding had to be got rid of within five years. The company I worked for told us that there was a £270 million surplus in the scheme and that it intended to take out £150 million. We argued strongly that benefits should be improved instead—and they were, to such an extent that we moved to a 60th scheme and introduced early retirement for people who were seriously ill. Such people's pensions were calculated as though they had reached 65 and were beneficiaries of the scheme. We also made the scheme non-contributory, so everyone who was a member of the scheme prior to 1987 became a free member of the scheme.
It was a very good scheme. Now, however, the company realises that the position is serious. It has decided that all employees—even those who were members of the scheme before 1987—will have to contribute 6 per cent. of their salary. There will be no new pensioners with a minimum 3 per cent. annual increase in their pension, and there are to be changes to all forms of early retirement. Active employees and deferred pensioners will now be subject to actuarial valuation reductions—they were not when we negotiated the scheme.
In the current circumstances, some schemes are in trouble, but I believe that by deciding not to take the easy option of closing the final salary scheme, but instead looking for ways to solve the problems, the company I worked for has shown the way forward. We have to protect this country's final salary schemes. If we do not, people who are currently middle aged may well lose out and face great difficulties when they reach pension age, and the Government at that time will have to support them. It would be better to remedy the problems now than to allow them to continue. That is why I have been critical of all previous Governments. We have taken our eye off the ball, and we seem to be doing the same thing tonight by concentrating solely on funded schemes.
Many issues have been raised in respect of how we might do business in future. It is true that an overwhelming number of companies decided that they would take contribution holidays. When the sun shone on the stock market, that was the right way to go as far as they were concerned. When taking those contribution holidays, companies often did not apply them to their employees. Employees have suffered a double whammy—they have not had the pension scheme that they should have had, and they did not enjoy a contribution holiday. They have been badly affected. One of the saddest and most distasteful aspects of the episode of closures of final salary schemes has been the retention of the schemes by top-level management. We must address that. What is good for the employee is good for the employer.
That behaviour is another example of the corporate greed that seems to be infesting our economic system at the moment. According to the TUC, between 1987–88 and 2000, employers took contribution holidays—reductions in the value of pensions—worth £19 billion.

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That might not mean a lot on a yearly basis, but if that money had been invested and used properly, we would not be in the position we are today. The TUC has also said that the scrapping of final salary schemes has saved employers £4 billion since 1995, as contributions to money purchase schemes are on average 9 per cent. lower.
There is no doubt that we have tried to address some of the problems through the stakeholder pension scheme, but I do not think that those pensions will be sufficient for employees when they become pensioners. We must consider the question of compulsion and how we can maintain and continue to develop final salary schemes. If we do that, we will have success.
9.12 pm
Rob Marris: Much of the debate has focused on the word "crisis". I dispute that there is a crisis in pensions in the United Kingdom—and that is partly because of the steps taken by the Government in the past five years.
We have heard much in this debate—I will not go into detail—about the state second pension, which is being introduced to give better provision to the 18 million people who have been unable to build up pension rights, particularly those who have been unable to work because they are caring for others or have disabilities. The state second pension is skewed towards the low-paid.
The pension credit will also assist pensioners of modest means. We have the minimum income guarantee, which has vastly raised the living standards of a certain section of our poorest pensioners. We have the winter fuel allowance and free television licences for the over-75s. The Government have restored free eye tests for pensioners, too.
There has also been a massive increase in national health service funding. I have been present for almost all the debate, but I do not recall hearing the point—it is often overlooked—that two thirds of NHS spending is on pensioners. The more money that the Government put into the NHS, the more they help pensioners.
Stakeholder pensions have been introduced. I do not accept the Opposition's suggestion that they have been a complete failure. These things take time to build. More than 800,000 people who did not have a pension vehicle a year ago now have one. More than 90 per cent. of employers who did not provide access to a pension scheme now do so.
Mr. Butterfill: Does the hon. Gentleman accept that an awful lot of those 800,000 people have transferred money from other schemes? The investment is not new money. An awful lot of them were buying stakeholder pensions for their grandchildren. The number of those in the target audience that the Government want to reach is very small.
Rob Marris: I am not sure that that was a brief intervention, but I do not accept that the position is as the hon. Gentleman described.
The hon. Member for Canterbury (Mr. Brazier) mentioned the situation in the European Union. Certain organisations often spread the canard that the United
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Kingdom has the worst pension provision in the European Union. I shall cite statistics, which, for the benefit of the Opposition, are not from the Office for National Statistics, but from Eurostat. They show that for expenditure on social benefits for old age in European Union countries in 1999—the position in the United Kingdom has undoubtedly since improved—we were above the EU average and were the fifth highest of all EU members.
Mr. Brazier: I said that there were more savings in the rest of the EU put together when the Government took office. According to the unreliable figures available, the position has since deteriorated substantially.
Rob Marris: I do not accept that the position has deteriorated, although it may have a changed a bit. My understanding is that the UK still has more provision than the rest combined because of the way in which pensions are structured in this country.
On the Conservatives' record, past performance is not always a good indication of future performance, but in this case it just may be. The Conservatives want to get rid of state provision. The Leader of the Opposition said:
"Basic pension provision should become a function of the private sector."
In a letter to the hon. Member for Sutton Coldfield (Mr. Mitchell), the hon. Member for Havant (Mr. Willetts), who opened the debate for the Opposition, said:
"The vision of moving to a funded alternative to the basic state pension is a powerful and compelling one which you and I share."
At the general election a year ago, the Conservatives floated the idea of getting all young people to have a private pension, and receive nothing from the basic state system. We need to be aware of the direction that the Conservatives are taking on pensions.
The hon. Member for East Devon (Mr. Swire) talked about a crisis of the Government's making. I do not accept that there is a crisis and I certainly do not accept that it is of the Government's making. Someone who entered the labour force, as many did, aged 14 in 1951, and retired at 60 in 1997, when the Government came to office, would have had only 11 years under a Labour Government but about 35 years under a Conservative one. In many cases, their pension provision came from the Conservatives or, sadly, did not come from them. In the mid-1980s, the Conservative Government removed the requirement that employees should join an employer's occupational pension scheme if they had one, and there was a free-for-all. Ironically, some Conservative Members are now asking for compulsion in pension provision.
In the mid-1980s, as has been said, the scandal of pensions mis-selling was building up. The bottom line is that it cost billions of pounds to put that affair right, but we have not seen the end of its confidence-destroying aspects. Many people, especially the young, are reluctant to save for old age because their parents, aunts and uncles were ripped off. Many of the 2 million who were reimbursed had to go through hell and high water to get compensation and only got it after pressure from the Labour Government.
A national bus company was ripping off its workers by taking their surplus—that problem was only sorted out under the Labour Government. Conservative Members have spoken about people working longer and retirement

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being phased in. I fully support that. Ironically, however, the Conservative Government were busy getting everybody to retire early so that they could fiddle the unemployment figures, whereas there are more than 1 million more jobs under Labour, and it is a realistic prospect for people over 65 to continue working, perhaps part-time, because jobs are available.
I shall turn to an issue that has featured in our debate—the stock market—and the remarks of the right hon. Member for Wokingham (Mr. Redwood). He said that he had been a pension fund manager in the City, so his economics may be better than mine, but I am not so sure. He seemed to suggest that the decline in the sale values of stocks had adversely affected people's pensions. It does not. What affects people's pensions from stocks is the dividends that they get from those stocks. The key issue is whether the dividends have gone down. He was speaking about the absolute value of those stocks, not simply about the taxing of them. I do not accept that the stock market has gone down because of Government policies.
The other issue is much more important in terms of the regulation of the pension industry. FRS 17 has been mentioned repeatedly in the debate. Many, many companies took pensions holidays, particularly with the 105 per cent. rule about which we have heard. They took the money in the good times, but they do not want to pay it up now that the bad times are here.
It is clear from the way in which those companies have operated that their propaganda has been extremely successful. The propaganda machine of those large, greedy corporations suggests that FRS 17 was already compulsory, but it will not be compulsory until 2003 or 2004. The companies suggest that the reason for the difficulties with their pensions was that crazy Government regulation, but the regulation was not crazy, and it was not in force as a compulsory measure.
I accept the need to simplify the regulation of pensions, but I do not accept the flavour of the Conservative Opposition's argument about lessening the burden of those regulations. That leads us back to the Maxwell saga. Also, lessening the burden of regulation would mean, to the Conservative Opposition, that we are out of step with our friends in America, who are going the opposite way.
A Standard and Poor's report released recently shows that for many years many big corporations in America have not had transparency at all. They have been fudging the figures and some, like WorldCom and Enron, have been lying. They have been boosting their profit figures by including income from their pension funds, ironically, by adding back charges when they are buying companies, and by not allowing for the cost of share option plans. Some of those big companies are household names now, such as Enron and WorldCom, but they also include Microsoft, General Electric, The Gap, Apple, Yahoo! and IBM.
If General Electric's profits are correctly reported, for example, they come down by $1.93 billion from $2.23 billion in 2000. That is a huge drop. Cisco Corporation is another example. We must be careful with funded pension schemes and with the transparency of their figures. That requires tight Government regulation. I hope that Ministers will assure me that we will continue to have tight Government regulation of pension funds, in spite of the exhortations from the Opposition.
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Finally, I hope that Ministers can reassure me that the intersection of pensions and the Transfer of Undertakings (Protection of Employment) Regulations will be looked at. Pensions are excluded from the acquired rights directive, but that does not mean that the United Kingdom must exclude them. I hope that we can consider that issue again.
9.24 pm
Mr. Tim Boswell: We have had an interesting debate characterised by 24 Back-Bench speeches, on my count. The great majority of them were thoughtful, though not demonstrative. In their totality they show a degree of concern about the growing problems in relation to pensions that is eloquent in itself.
There are basically two reasons why Government policies, and ultimately Governments, can fail. The first is when they are caught out in malice. Under new Labour, markets are supposed to be accepted. The euthanasia of the rentier is out of fashion, and we have not heard too much about it today. Under the surface, however, in some of the contributions made by Labour Members—for the avoidance of doubt, I stress that they came from the Back Benches—there was a certain return to the mean and a distrust of the capitalist system that far exceeded any of its measurable excesses.
Nevertheless, much more common than that especially pathological characteristic of left-wing Governments is the reluctance of Governments of all colours and times to face reality, arising from a mixture of what may be complacency and may well be arrogance. The proposition of Her Majesty's Opposition in our motion is not about Government malice. Indeed, we open the motion with a generous and specific endorsement of the Government's own aim, as stated in their 1998 Green Paper and repeated thereafter,
"of increasing from 40 per cent. to 60 per cent. the proportion of pensioners' incomes that comes from the private sector".
I should perhaps add in parenthesis that that still leaves the 40 per cent. that comes from the public sector, which is entirely relevant to the position that we will develop in future, despite some of the hares that have been started from the Government Back Benches.
James Purnell: The hon. Gentleman referred to hares being started; he can kill one off straight away. Can he guarantee that the state second pension and SERPS will remain part of his party's plans and that he will not allow it to be raided to pay for the priorities of the other spending Departments represented on his Front Bench?
Mr. Boswell: I have already dealt with the generality and made it clear that, on the specifics, we shall consider the best measure of approach. That is why we have been taking the advice of all parties that have a contribution to make. Sadly, I was not present to hear the hon. Gentleman's speech, but I am quite ready to read it in Hansard. Of course, we take advice from the TUC, just as we do from the CBI. Indeed, I shall refer to them later.
This debate is in ample measure directly about this Government's complacency and arrogance in the face of a "deepening crisis" on pensions. If Ministers object to our using that phrase, I hope that they will reflect that it is not ours, but that of the TUC. In the Government's first term, the only pensions crisis that they wanted to

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acknowledge was the conveniently soft target of those who had mis-sold pensions. Today. however, the boot is on the other foot. Yesterday, when the new Secretary of State—we wish him well—came to the Dispatch Box, his first public act was to admit to mis-statement of pensions statistics on a truly heroic scale.
I may say that responsibility for the matter is still being argued in the briefing battle between the Office for National Statistics and the Department. It is an internal matter for the Government, but it might never have come to light without the assiduity of my hon. Friend the Member for Havant (Mr. Willetts). At any rate, as this Secretary of State is new to his post, he has the chance to make a fresh start and leave his unfortunate legacy behind. The position on funded pensions, although it is indeed serious, as hon. Members in all parts of the House have acknowledged, is not irretrievably hopeless, provided that Ministers drop their complacency and take positive action now.
In a thoughtful article published this week, which has already been mentioned, Nicholas Timmins pointed out that many of those retiring today on occupational schemes may still be relatively well off. That colours our view of the situation, but I doubt whether the same could be said for those with final salary or personal pensions who are trying to secure an annuity at today's low rates with their pension pot, unless they were safeguarded by a timely switch to a bond-based fund—although all pensions have sadly been battered by the slide in stock markets.
The real crisis, however, is not for today's pensioners, but for those of tomorrow. I gather that I am not the only member of my generation—those of a certain age—who remembers the famous Pearl Assurance advertisement concerning the desirability of having a pension. For the sake of greater accuracy, I have procured a copy. The advertisement gave five age-based viewpoints covering four decades, beginning with that of a sleek 25-year-old: "They tell me the job is not pensionable." And so it went on—the same person reporting every 10 years, with fewer hairs and more worry. At 45, he was saying, "How I wish I could look forward to a pension."
That advertisement appeared from my childhood until my early working years, from 1951 until it was last used in 1970. That is 32 years ago, I am ashamed to say, but I remember it vividly. It long pre-dated the introduction of personal pensions, and even the explosion of company schemes that took place in the 1950s; but if a warning bell was required then for entrants to the labour force who I hope now enjoy the fruits of their retirement, it is required no less now for the labour force entrants of the 2000s, who must also be looking forward at least 50 years.
Mr. Gardiner: Will the hon. Gentleman enlighten us as to whether the advertisement worked, and whether he took out a pension with the company?
Mr. Boswell: I have made reasonably adequate provision, although like most of us, I think it is not as much as I might have hoped, and it is certainly not worth as much as it was a week or two ago.
As responsible Members of Parliament on both sides of the House, we recognise that pensions, as the longest term of all businesses, need the greatest possible consensus. It
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is quite unlikely that the present Government will continue for the next 50 years, as I think that even they would acknowledge. That is why we have been willing to involve all interests in our policy building. My simple request to the Government is this: drop the soundbite in favour of sound policies for the future.
The debate has already documented the decline in occupational pension schemes and in the overall savings ratio. So far, Ministers have gone around oozing complacency and even suggesting that such schemes have been on the slide since 1967, but it is clear that only now, after a long period of relative stability, are there real and evident signs of decline. The number of schemes being closed to new members, as reported to the NAPF, rocketed from 18 to 46 in one year. Other studies have shown that up to half the remaining companies are contemplating closure. The debate has revealed widespread concern about the implications of the new accounting standards for the viability of future schemes—not least for their acceptability to financially hard-pressed companies.
One aspect of the current situation that is often overlooked is the growing disparity in size and even interests between the existing labour force and former pensioned employees. That may be one reason why until recently the TUC and member unions did not engage as assiduously as did the hon. Member for Hamilton, South (Mr. Tynan)—as was clear from his account—in negotiations on behalf of staff.
One well known company that briefed me for the debate has 900 employees contributing to its pension scheme; yet it has 2,000 members with deferred benefits, and 2,500 pensioners receiving payments. It described its action to repair an estimated £30 million deficiency in its scheme as a draconian recovery programme involving annual lump sum payments by shareholders, increased employee contributions and/or reduced benefits, and a shift in future investment policy away from the United Kingdom stock market to bonds, or even abroad. Some companies, of course, cannot do that.
Conservative Members do not mind the Prime Minister's reference to the stock market going up or down, but we do object to Ministers' using it as a yo-yo. One minute it is a justification for the tax raid on pension funds when markets were booming; the next minute they lapse into silence because, as has happened now, the markets have fallen below their original level.
The one clear discretionary policy intervention by Labour Ministers has been the withdrawal of advance corporation tax relief on pension funds. At the time, they thought that no one had noticed. Modestly, I have been re-reading some of the speeches that I made in the Standing Committee of that five-year-old Finance Bill, in 1997; in one of them, I said:
"The guts of the issue is that the Government have been sold a package to raise £5 billion through a device that they believe will not hurt individuals. They believe that it is sufficiently obscure and difficult to pin down that nobody will notice what damage they are doing … It will damage the interests of investors and, therefore, in the long term, those of Great Britain."—[Official Report, Standing Committee A, 21 July 1997; c. 270.]
We warned people, and now, after the longest fuse in history has been lit, the hand grenade is going off in the hands of the Ministers who wanted to throw it. Our pensioners are suffering collateral damage, and the low savings ratio that has resulted is a desperate threat to

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future prosperity. All this has been compounded by the regulatory complexity that the Government must urgently and fully address in the light of the various reports—those of Pickering, Sandler, and the Inland Revenue—and the other reviews now in place. In the present circumstances, it is hardly surprising that the Government have admitted that half of all working-age people have no more than a "patchy knowledge" of pensions. Perhaps the fact that their knowledge is patchy suggests that they are the luckier ones.
The Government are on their own in claiming that their flagship stakeholder scheme is a success. In fact, they have even overtaken their new Secretary of State on that matter. In an intervention today, he was asked what advice he could give to younger people. He did not say that he would tell them to take out a stakeholder pension; he said that he would tell them to take out a PEP or an ISA. Even now, six months after the legal requirement came into force, an estimated 10 per cent. of employers have not designated the scheme. With fewer than 1 million pensions sold in the first year—not all, by any means, to new investors—the Government are experiencing the same stock and flow problem in which they entrapped themselves over the overall pension savings figures: they are simply failing to hit the target.
This debate cannot be separated from that on the Government's own state pension provision. I would like to make it clear that I have given the Opposition's commitment to the principle of a public involvement in pension policy. It is amazing, however, that Ministers who came in with a pathological aversion to means-testing have ended up as its greatest advocates.
Mr. Levitt: I was fascinated by the hon. Gentleman's rather condescending reference to public involvement in pension policy. Is that distinct from public involvement in the provision of pensions—which is quite different—because that is not what he said?
Mr. Boswell: The hon. Gentleman should not judge me by the standards of spin that apply to his own Ministers.
Ministers are already preparing to put more than half the pensioner population on to the pension credit. If, however, the recent experience highlighted in the Help the Aged survey on benefit helplines is realistic, and I fear that it is, pensioners may have a long wait for service. The new pension service—to which, for the avoidance of doubt, we wish no ill—is going to have its work cut out to serve them adequately. The prospect of 5.5 million pensioners on means-tested benefits is an administratively challenging one.
On some estimates—or assumptions, because the Government have still not disclosed their final hand—the combination of basic and state second pension and pension credit will land two out of three pensioners on means-tested benefits by the time today's entrants retire. It was interesting that, when my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) invited the Secretary of State today to tell us how big a pot would be required to avoid losing out by saving, he declined to give us a figure.
What we know, because these are Government estimates, is that the total cost of the pension credit by mid-century will be anything up to £26 billion a year. By deterring adequate self-funded provision, and by offering
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the possibility of an overall outcome as generous for those who do not save as for those who do, we run the risk of pauperising future generations. That will be so particularly if the state's financial obligations cannot be met. Many young people fear that that will be the case. That alone demands an urgent root-and-branch rethink of the Government's whole approach to pension provision.
In that famous Pearl Assurance advertisement to which I referred, at age 65 the pensionless retiree—he is a little greyer and his hair is a little thinner than it was when he was 25—says:
"Without a pension, I really don't know what I shall do."
With any pension failure, whether it is mis-selling, the Maxwell scandal, the closure of a fund or the removal of expectations, whatever goes wrong with a pension is a disaster for the individual. That is why it is incumbent on the Government to bestir themselves and to take the necessary action. If they fail, they will not be forgiven.
9.41 pm
The Minister for Pensions (Mr. Ian McCartney): I sat through the whole of the debate, and listened not only to the speeches of Front-Bench spokesmen for the Conservatives and the Liberal Democrats, but to the other 24 contributions—11 from Opposition Members and 13 from my Labour colleagues. I say that not to curry favour, but because we are serious about what my right hon. Friend the Secretary of State said to the Trades Union Congress and what we were saying before he arrived at the Department. Following publication of the Sandler review and the Inland Revenue tax simplification review, the Government intend to engage in a wide-ranging debate about the future strategy and partnership arrangements between the state, the private sector, employers and employees. I assure my colleagues that I shall take seriously what has been said in the debate and the ideas that have been suggested. I shall encourage my right hon. Friend to take them into account when we respond to the review later this year with the publication of a document.
I grew to like the hon. Member for South-West Bedfordshire (Andrew Selous) during my travails with him on the State Pension Credit Bill. I hope that that does not do him any harm. He commented on value added tax. The last time that the Conservative party put up value added tax it caused a great deal of fuel poverty among pensioners, and it took this Government to reduce it and introduce a winter fuel payment, which we are continuing to provide. Conservative Members may want to get rid of that if they get their hands on power again.
The ABI tax credit is an idea worth considering, and I give the hon. Gentleman an assurance that we will do so. My right hon. Friend and I have a long record on flexible retirement and age-positive issues in opposition and in various positions in government. I am glad that the Liberal Democrats and some in the Conservative party now see the sense of an age-positive strategy not just for pensions and employment, but for goods and services across the whole spectrum of society to ensure that we have a positive image of older people and their contribution to society. Older people are not a burden: they are an asset. We need to enhance and engage with that asset. I give the hon. Gentleman that commitment. I tried to intervene on him to say that his proposal was in the Government's last manifesto.

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The hon. Member for Northavon (Mr. Webb) and I have had many debates in the past few months. Indeed, he may be fed up with looking at me. I do not want to over-rehearse our debates of the past few months. However, one of the basic divides between us is that the Liberal party is extremely simplistic in remaining wedded to the principle that poverty is age-related, because it is overwhelmingly income-related. Liberal Democrat policies are flawed as regards putting investment into helping poor pensioners. Someone who is poor and 60 cannot wait until they are 75 to get income-related benefits and support from the Government.
The Tories had 18 years in government and have had five years in opposition—almost a quarter of a century of paralysing incompetence. During the debate, the hon. Member for Havant (Mr. Willetts) showed no recognition of the harm caused, no understanding of the need for partnership and consensus, and no long-term vision. He represented simple short-term opportunism.
We are not a Government of crisis or complacency. We are a Government who have tackled the incompetence of the Tory years, attacked pensioner poverty and begun to improve state pension income for millions of pensioners through the minimum income guarantee, the pension credit, the state second pension and changes to tax and capital rules, ending the "give with one hand, take away with the other" approach of the Tories. Yet Conservative Front-Bench and Back-Bench Members clearly indicated that if they ever got their hands on power they would get rid of all those reforms that have benefited millions of pensioners.
Mr. Redwood: Will the Minister give way?
Mr. McCartney: Can the right hon. Gentleman wait? I am not quite warmed up yet. I know that he is always warmed up; I am not so certain whether that is good for him. [Interruption.] Perhaps I might as well get it over with.
Mr. Redwood: Can the Minister explain why it is that of all the final salary pension schemes offering good terms to people in 1979, more than half are now closed to new members and are thinking of worsening the pensions of those already in the schemes? Why has that happened under Labour?
Mr. McCartney: There has been a trend in that matter, but under this Government, millions of pensioners who were not in a defined benefit scheme and had no second pension are getting benefit. Under the Conservatives, 2 million pensioners were in poverty; under this Government they are receiving additional income. Under the Conservatives, 14 million low-paid workers had no opportunity to get access to a second pension; under this Government, they are getting that access. This Government, through their simplification review and other measures that we are taking in partnership with employers, are challenging employers to invest in their employees by improving pension opportunities and contribution schemes. I hope that the right hon. Gentleman will play an active part in the simplification review by ensuring that the companies that he is involved
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in start to introduce better pensions for their employees who do not have them at the moment. I take no lessons from him when it comes to delivering pensions.
The Government have acted on the modernisation and simplification of second-tier pensions. We have introduced measures to improve access to pensions and to assist employers to retain or introduce pension products in their workplace—for example, a stakeholder pension. Again, the Conservatives are silent. Are they going to get rid of the stakeholder pension? Are they going to abandon, as did their previous Administration, millions of employees who had no access to a second pension opportunity? Silence. Silence is golden. The hon. Member for Havant should give us an answer. He wants a debate about pension policy—is he going to scrap stakeholder pensions?
Mrs. Browning: The Minister said that the stakeholder pension offers opportunities to millions of people, but the reality is that millions of people have not taken it up. His Government's target is 3 million but the figure has not yet reached even 1 million. Why has this wonderful opportunity been rejected by the people out there? What is wrong with it?
Mr. McCartney: The position is that after just one year, from a standing start, 815,000 employees who under the Tories would never have got a second pension have got a second pension. There is still much to do, but at that rate of investment over the next four or five years, millions of people who did not have access to an additional second pension will get that from this Government.
What was the Tory party's record on mis-selling? The hon. Member for Havant and his colleagues have tried to brush aside mis-selling this afternoon, saying that it did not really matter, as there were only a few victims. They allowed pensions to be mis-sold to over 1 million people and it took this Government to pay back £11.5 billion in compensation. However, the Tories destroyed people's confidence in the marketplace. That was down to the hon. Member for Havant, who sits there smugly.
In addition, the Tories stole the pensions of workers in the privatised sector, including hundreds of millions of pounds from bus workers. It took this Government to get that money back. The Tories weakened the employment rights of people who were transferred to the private sector, who were not given the right to continue to enjoy pension entitlement. Many of them were women workers and low paid. It has taken this Government to rectify that situation by amendments to TUPE.
The Tories halved the value of SERPS, and they tell us that they are now a party of compassion towards pensioners. The fact is that, after a quarter of a century, today's debate has been no more than a smokescreen to hide the fact that they have one simple policy: to privatise the state pension. The hon. Member for Havant can twist and turn. He can smirk and dissemble as much as he likes. He cannot hide from the truth. We have the letter. Like Chamberlain before him, his letter surrenders the basic state pension. Millions of pensioners in the future will be left to market forces under the Tories.
The hon. Member for Havant cannot run and hide from his letter, which says:
"Dear Andrew … Yours ever, David."

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Perhaps the hon. Gentleman can answer some questions. I shall quote from the letter.
"Andrew, here is the material I promised you about a funded alternative to the basic state pension."
I wonder whether, to help the debate, the hon. Gentleman would be prepared to share this material and put it in the Library so we could all read what he provided to his hon. Friend the Member for Sutton Coldfield (Mr. Mitchell)?
Mr. Boswell: Will the Minister give way?
Mr. Butterfill: Will the Minister give way?
Mr. McCartney: I shall give way in a second.
The letter continues:
"I was wondering if you'd like to prepare a short note on some of these issues then perhaps lead a discussion of the matter at one or more of our team meetings …?"
Will the hon. Gentleman confirm whether this meeting has taken place? Perhaps he will share the minutes with us—perhaps by placing them in the Library—so we can all have a debate about privatising the basic state pension.
The letter then says:
"Would you be willing to have a go at this?"
It sounds as if he is asking his hon. Friend to fill out a clue in The Times crossword. In fact, he is being asked to prepare a plan in secret to privatise the basic state pension.
Mr. Boswell: I do not often claim particular associations for our side, and I do not do so on this occasion. But bearing it in mind that 1.8 million people no longer have an occupational pension—a TUC statistic—will the Minister tell the House whether he was proud when the basic state pension was increased by 75p a week?
Mr. McCartney: If it had been left to the Tories, 12 million pensioners would he without a basic state pension. The Government introduced the minimum income guarantee. Will the Tories scrap it? They are against it. We introduced winter fuel payments. Will they scrap them? Every anti-poverty measure introduced by the Government has been opposed by the Tories. The hon. Member for Havant has had three opportunities now to share with the House and the nation his views, and those of the hon. Member for Sutton Coldfield, of their plans to privatise the state pension. Silence is not golden. It means that he is not prepared to tell the British people the truth about Tory policy.
Mr. Butterfill: Will the Minister give way?
Mr. McCartney: The hon. Gentleman has been in and out of the Chamber and wants to speak when it suits him. I am sorry, but I am not giving way to him.
The hon. Member for Sutton Coldfield made some amazing claims about those Tory proposals. I make a commitment to study them to see what they really mean about the future of state pensions and the cost, not only in monetary terms but in terms of leaving people to the vagaries of the marketplace.
Mr. Boswell: It is the same speech every time.
Mr. McCartney: And we hear the same arguments from the Tories every time. They do not seem to accept
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it when we say that we are the party that wants to end pensioner poverty, the party that will support the basic state pension and will create a second state pension to protect 14 million low-paid workers, 2 million carers and 2 million people with disabilities. The one time we ask them a simple question about privatisation of the state pension, they lose their voice and can do nothing but smirk and catcall. A smirk and a catcall are no answer to a serious question on behalf of the pensioners of Britain.
We have a strategy. It is about getting the balance between private and state provision right. We are well on the way to ensuring that all pensioners have a decent income, but we are not complacent—far from it. The area of private pensions needs looking at, and that is why we have various reviews on the go: the Pickering, Sandler and Inland Revenue reviews, as well as the quinquennial review of the Occupational Pensions Regulatory Authority.
When those reviews produce their reports in the coming weeks and months, we will engage in a debate across the nation, based on facts—on reality. The reality is that 89 per cent. of employees work for an employer with some form of pension provision; 53 per cent. of employees in companies with more than 20 staff have access to a final salary scheme; a quarter of employees in such companies are active members; and 45 per cent. have an employer who sponsors provision.
The position is not as the Tories said, completely dead and buried. We are building a position of strength. That is why partnership and the simplification process are important. Final salary schemes are important to employers, too. They meet their employees' needs in a better way and cost the company less in the long term, because they control long-term investment policy. They avoid the problem of a scheme that is not under control, as well as the problem of running a closed final salary scheme against an open direct contributions scheme. They also provide an important part of a company's remuneration package, investing in pensions to retain, recruit and better reward staff. Defined benefit schemes should be argued for, and we are a Government who will provide a background to ensure that they can continue.
The Government tackled the legacy of pensioner poverty. The Tories refused to give a commitment tonight that, if they ever got to power, they would continue an anti-poverty strategy. All that we can think is that they do not give a damn about millions of pensioners who cannot provide for themselves. They left us in a mess with SERPS. Millions of people were affected and it took this Government to put billions of pounds in over the next few years to put right that inherited mess.
We have ensured that compensation will be paid to those who were conned in the mis-selling scandal. According to the hon. Member for Havant, the £13.5 billion is just chickenfeed—an accident that just happened. It was no accident: it was the incompetence of his policies.
The meanest blow of all was when the Tories started to charge pensioners for eye tests. Who would have expected, at the end of the 20th century, to have had a Government who would charge pensioners for eye tests while saying that they were serious about improving their health and social care?
David Maclean rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 140, Noes 381.

Division No. 286]

[10 pm

AYES

Ainsworth, Peter (E Surrey)

Hogg, Rt Hon Douglas

Amess, David

Horam, John

Ancram, Rt Hon Michael

Howard, Rt Hon Michael

Arbuthnot, Rt Hon James

Jack, Rt Hon Michael

Atkinson, David (Bour'mth E)

Jackson, Robert (Wantage)

Atkinson, Peter (Hexham)

Jenkin, Bernard

Bacon, Richard

Johnson, Boris (Henley)

Baldry, Tony

Key, Robert

Barker, Gregory

Knight, Rt Hon Greg (E Yorkshire)

Baron, John

Laing, Mrs Eleanor

Bellingham, Henry

Lait, Mrs Jacqui

Bercow, John

Lansley, Andrew

Beresford, Sir Paul

Letwin, Oliver

Blunt, Crispin

Liddell-Grainger, Ian

Boswell, Tim

Loughton, Tim

Bottomley, Peter (Worthing W)

Luff, Peter

Bottomley, Rt Hon Virginia

Mclntosh, Miss Anne

Brady, Graham

Maclean, Rt Hon David

Brazier, Julian

McLoughlin, Patrick

Browning, Mrs Angela

Malins, Humfrey

Bums, Simon

Maples, John

Burt, Alistair

Mates, Michael

Butterfill, John

Mawhinney, Rt Hon Sir Brian

Cameron, David

May, Mrs Theresa

Cash, William

Mercer, Patrick

Chapman, Sir Sydney (Chipping Bamet)

Mitchell, Andrew (Sutton Coldfield)

Moss, Malcolm

Chope, Christopher

Murrison, Dr Andrew

Clappison, James

Norman, Archie

Collins, Tim

O'Brien, Stephen (Eddisbury)

Cran, James

Osborne, George (Tatton)

Curry, Rt Hon David

Ottaway, Richard

Davies, Quentin (Grantham)

Page, Richard

Djanogly, Jonathan

Paterson, Owen

Dorrell, Rt Hon Stephen

Pickles, Eric

Duncan, Alan (Rutland & Melton)

Prisk, Mark

Duncan, Peter (Galloway)

Randall, John

Duncan Smith, Rt Hon lain

Redwood, Rt Hon John

Evans, Nigel

Robathan, Andrew

Fabricant, Michael

Robertson, Hugh (Faversham)

Fallon, Michael

Robertson, Laurence (Tewk'b'ry)

Field, Mark (Cities of London)

Roe, Mrs Marion

Flight, Howard

Rosindell, Andrew

Flook, Adrian

Ruffley, David

Forth, Rt Hon Eric

Sayeed, Jonathan

Francois, Mark

Selous, Andrew

Gale, Roger

Shephard, Rt Hon Mrs Gillian

Garnier, Edward

Simmonds, Mark

Gibb, Nick

Simpson, Keith (Mid-Norfolk)

Goodman, Paul

Spelman, Mrs Caroline

Gray, James

Spicer, Sir Michael

Grayling, Chris

Spink, Bob

Green, Damian (Ashford)

Spring, Richard

Greenway, John

Stanley, Rt Hon Sir John

Grieve, Dominic

Steen, Anthony

Gummer, Rt Hon John

Streeter, Gary

Hague, Rt Hon William

Swayne, Desmond

Hammond, Philip

Swire, Hugo

Hawkins, Nick

Syms, Robert

Hayes, John

Tapsell, Sir Peter

Heald, Oliver

Taylor, John (Solihull)

Hendry, Charles

Taylor, Sir Teddy

Hoban, Mark

Trend, Michael

190

Turner, Andrew (Isle of Wight)

Wilshire, David

Tyrie, Andrew

Winterton, Ann (Congleton)

Viggers, Peter

Winterton, Sir Nicholas (Macclesfield)

Walter, Robert

Waterson, Nigel

Yeo, Tim

Watkinson, Angela

Young, Rt Hon Sir George

Whittingdale, John

Widdecombe, Rt Hon Miss Ann

Tellers for the Ayes:

Wilkinson, John

Mrs. Cheryl Gillan and

Willetts, David

Dr. Julian Lewis.

NOES

Abbott, Ms Diane

Cawsey, Ian

Adams, Mrs Irene (Paisley N)

Challen, Colin

Ainsworth, Bob (Cov'tryNE)

Chapman, Ben (Wirral S)

Alexander, Douglas

Chaytor, David

Allan, Richard

Clapham, Michael

Allen, Graham

Clark, Dr Lynda (Edinburgh Pentlands)

Anderson, Rt Hon Donald (Swansea E)

Clark, Paul (Gillingham)

Anderson, Janet (Rossendale)

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

Banks, Tony

Coleman, lain

Barnes, Harry

Colman, Tony

Barrett, John

Connarty, Michael

Battle, John

Cook, Frank (Stockton N)

Bayley, Hugh

Corbyn, Jeremy

Beard, Nigel

Corston, Jean

Beckett, Rt Hon Margaret

Cotter, Brian

Begg, Miss Anne

Cousins, Jim

Beggs, Roy

Cox, Tom

Beith, Rt Hon AJ

Cranston, Ross

Bell, Stuart

Crausby, David

Benn, Hilary

Cruddas, Jon

Bennett, Andrew

Cryer, Mrs Ann (Keighley)

Benton, Joe

Cummings, John

Berry, Roger

Cunningham, Rt Hon Dr Jack (Copeland)

Best, Harold

Betts, Clive

Cunningham, Jim (Cov'try S)

Blackman, Liz

Cunningham, Tony (Workington)

Blears, Ms Hazel

Curtis-Thomas, Mrs Claire

Blizzard, Bob

Dalyell, Tam

Borrow, David

Davey, Edward (Kingston)

Bradley, Peter (The Wrekin)

Davey, Valerie (Bristol W)

Bradshaw, Ben

David, Wayne

Brake, Tom

Davidson, Ian

Breed, Colin

Davies, Rt Hon Denzil (Llanelli)

Brennan, Kevin

Davies, Geraint (Croydon C)

Brooke, Mrs Annette L

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

Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

Dawson, Hilton

Brown, Russell (Dumfries)

Dhanda, Parmjit

Bruce, Malcolm

Dismore, Andrew

Bryant, Chris

Dobbin, Jim

Buck, Ms Karen

Donohoe, Brian H

Burden, Richard

Doughty, Sue

Burgon, Colin

Dowd, Jim

Burnett, John

Drew, David

Burnham, Andy

Dunwoody, Mrs Gwyneth

Burstow, Paul

Eagle, Angela (Wallasey)

Cable, Dr Vincent

Eagle, Maria (L'pool Garston)

Caborn, Rt Hon Richard

Edwards, Huw

Cairns, David

Efford, Clive

Calton, Mrs Patsy

Ellman, Mrs Louise

Campbell, Alan (Tynemouth)

Ennis, Jeff

Campbell, Rt Hon Menzies (NE Fife)

Etherington, Bill

Ewing, Annabelle

Campbell, Ronnie (Blyth V)

Farrelly, Paul

Caplin, Ivor

Field, Rt Hon Frank (Birkenhead)

Carmichael, Alistair

Fisher, Mark

Caton, Martin

Fitzpatrick, Jim

191

Flynn, Paul

Lawrence, Mrs Jackie

Foster, Rt Hon Derek

Laws, David

Foster, Don (Bath)

Laxton, Bob

Foster, Michael (Worcester)

Lazarowicz, Mark

Foster, Michael Jabez (Hastings)

Lepper, David

Francis, Dr Hywel

Leslie, Christopher

Gapes, Mike

Levitt, Tom

Gardiner, Barry

Lewis, Terry (Worsley)

George, Andrew (St Ives)

Linton, Martin

George, Rt Hon Bruce (Walsall S)

Lloyd, Tony

Gerard, Neil

Llwyd, Elfyn

Gibson, Dr Ian

Love, Andrew

Godsiff, Roger

Lucas, Ian

Goggins, Paul

Luke, lain

Green, Matthew (Ludlow)

Lyons, John

Griffiths, Jane (Reading E)

McAvoy, Thomas

Griffiths, Nigel (Edinburgh S)

McCabe, Stephen

Griffiths, Win (Bridgend)

McCafferty, Chris

Grogan, John

McCartney, Rt Hon Ian

Hall, Mike (Weaver Vale)

McDonagh, Siobhain

Hall, Patrick (Bedford)

MacDonald, Calum

Hamilton, David (Midlothian)

McDonnell, John

Hancock, Mike

McFall, John

Hanson, David

McGuire, Mrs Anne

Harris, Tom (Glasgow Cathcart)

McIsaac, Shona

Harvey, Nick

McKechin, Ann

Healey, John

McKenna, Rosemary

Heath, David

Mackinlay, Andrew

Henderson, Ivan (Harwich)

McNamara, Kevin

Hendrick, Mark

Mactaggart, Fiona

Heppell, John

McWilliam, John

Hermon, Lady

Mahmood, Khalid

Hesford, Stephen

Mahon, Mrs Alice

Heyes, David

Mallaber, Judy

Hill, Keith

Mandelson, Rt Hon Peter

Hinchliffe, David

Mann, John

Hodge, Margaret

Marris, Rob

Hoey, Kate

Marsden, Gordon (Blackpool S)

Holmes, Paul

Marsden, Paul (Shrewsbury)

Hood, Jimmy

Marshall, David (Shettleston)

Hopkins, Kelvin

Marshall, Jim (Leicester S)

Howarth, Rt Hon Alan (Newport E)

Martlew, Eric

Howarth, George (Knowsley N)

Meacher, Rt Hon Michael

Howells, Dr Kim

Meale, Alan

Hoyle, Lindsay

Merron, Gillian

Hughes, Kevin (Doncaster N)

Miliband, David

Hughes, Simon (Southwark N)

Miller, Andrew

Humble, Mrs Joan

Mitchell, Austin (Gt Grimsby)

Hurst, Alan

Moffatt, Laura

Hutton, Rt Hon John

Moore, Michael

Iddon, Dr Brian

Moran, Margaret

Illsley, Eric

Morgan, Julie

Ingram, Rt Hon Adam

Moriey, Elliot

Irranca-Davies, Huw

Morris, Rt Hon Estelle

Jackson, Helen (Hillsborough)

Mountford, Kali

Jamieson, David

Mudie, George

Jenkins, Brian

Mullin, Chris

Jones, Helen (Warrington N)

Munn, Ms Meg

Jones, Jon Owen (Cardiff C)

Murphy, Denis (Wansbeck)

Jones, Kevan (N Durham)

Naysmith, Dr Doug

Jones, Lynne (Selly Oak)

O'Brien, Bill (Normanton)

Jones, Martyn (Clwyd S)

O'Hara, Edward

Joyce, Eric

Olner, Bill

Keen, Alan (Feltham & Heston)

O'Neill, Martin

Keen, Ann (Brentford & Isleworth)

Organ, Diana

Kemp. Fraser

Osborne, Sandra (Ayr)

Khabra, Piara S

Owen, Albert

Kidney, David

Palmer, Dr Nick

Kilfoyle, Peter

Pearson, Ian

King, Ms Oona (Bethnal Green)

Perham, Linda

Kirkwood, Archy

Picking, Anne

Knight, Jim (S Dorset)

Pickthall, Colin

Kumar, Dr Ashok

Pike, Peter

Ladyman, Dr Stephen

Plaskitt, James

Lamb, Norman

Pond, Chris

Lammy, David

Pope, Greg

192

Pound, Stephen

Strang, Rt Hon Dr Gavin

Prentice, Ms Bridget (Lewisham E)

Stuart, Ms Gisela

Prentice, Gordon (Pendle)

Stunell, Andrew

Price, Adam

Sutcliffe, Gerry

Primarolo, Dawn

Tami, Mark

Prosser, Gwyn

Taylor, Ms Dari (Stockton S)

Pugh, Dr John

Taylor, David (NWLeics)

Purchase, Ken

Taylor, Matthew (Truro)

Pumell, James

Taylor, Dr Richard (Wyre F)

Quin, Rt Hon Joyce

Thomas, Gareth (Clwyd W)

Quinn, Lawrie

Thomas, Gareth (Harrow W)

Rammell, Bill

Thomas, Simon (Ceredigion)

Rapson, Syd

Timms, Stephen

Reed, Andy (Loughborough)

Tipping, Paddy

Reid, Alan (Argyll & Bute)

Todd, Mark

Rendel, David

Tonge, Dr Jenny

Robertson, John (Glasgow Anniesland)

Touhig, Don

Trickett, Jon

Robinson, Geoffrey (Cov'tryNW)

Truswell, Paul

Roche, Mrs Barbara

Turner, Dennis (Wolverh'ton SE)

Rooney, Terry

Turner, Dr Desmond (Kemptown)

Ross, Ernie

Turner, Neil (Wigan)

Roy, Frank

Twigg, Derek (Halton)

Ruane, Chris

Twigg, Stephen (Enfield)

Ruddock, Joan

Tyler, Paul

Russell, Bob (Colchester)

Tynan, Bill

Russell, Ms Christine (Chester)

Vaz, Keith

Ryan, Joan

Vis, Dr Rudi

Sanders, Adrian

Walley, Ms Joan

Sarwar, Mohammad

Watson, Tom

Savidae Malcolm

Watts, David

Sawford, Phil

Webb, Steve

Weir, Michael

Sedgemore, Brian

White, Brian

Shaw, Jonathan

Whitehead, Dr Alan

Sheerman, Barry

Wicks, Malcolm

Sheridan, Jim

Williams, Rt Hon Alan (Swansea W)

Simpson, Alan (Nottingham S)

Singh, Marsha

Williams, Mrs Betty (Conwy)

Skinner, Dennis

Williams, Hywel (Caernarfon)

Smith, Rt Hon Andrew (Oxford E)

Williams, Roger (Brecon)

Smith, Angela (Basildon)

Willis, Phil

Smith, Rt Hon Chris (Islington S)

Wilson, Brian

Smith, Geraldine (Morecambe)

Winnick, David

Smith, Jacqui (Redditch)

Winterton, Ms Rosie (Doncaster C)

Smith, John (Glamorgan)

Wishart, Pete

Smith, Llew (Blaenau Gwent)

Worthington, Tony

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

Wray, James

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

Stewart, David (Inverness E)

Tellers for the Noes:

Stewart, Ian (Eccles)

Mr. Nick Ainger and

Stoate, Dr Howard

Mr. Jim Murphy.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
The House divided: Ayes 327, Noes 188.

Division No. 287]

[10.14 pm

AYES

Abbott, Ms Diane

Armstrong, Rt Hon Ms Hilary

Adams, Mrs Irene (Paisley N)

Atherton, Ms Candy

Ainsworth, Bob (Cov'try NE)

Atkins, Charlotte

Alexander, Douglas

Austin, John

Allen, Graham

Bailey, Adrian

Anderson, Rt Hon Donald (Swansea E)

Baird, Vera

Banks, Tony

Anderson, Janet (Rossendale)

Barnes, Harry

193

Battle, John

Dhanda, Parmjit

Bayley, Hugh

Dismore, Andrew

Beard, Nigel

Dobbin, Jim

Beckett, Rt Hon Margaret

Donohoe, Brian H

Begg, Miss Anne

Dowd, Jim

Beggs, Roy

Drew, David

Bell, Stuart

Eagle, Angela (Wallasey)

Benn, Hilary

Eagle, Maria (L'pool Garston)

Bennett, Andrew

Edwards, Huw

Benton, Joe

Efford, Clive

Berry, Roger

Ellman, Mrs Louise

Best, Harold

Ennis, Jeff

Betts, Clive

Etherington, Bill

Blackman, Liz

Farrelly, Paul

Blears, Ms Hazel

Field, Rt Hon Frank (Birkenhead)

Blizzard, Bob

Fisher, Mark

Borrow, David

Fitzpatrick, Jim

Bradley, Peter (The Wrekin)

Flynn, Paul

Bradshaw, Ben

Foster, Rt Hon Derek

Brennan, Kevin

Foster, Michael (Worcester)

Brown, Rt Hon Nicholas (Newcastle E& Wallsend)

Foster, Michael Jabez (Hastings)

Francis, Dr Hywel

Brown, Russell (Dumfries)

Gapes, Mike

Bryant, Chris

Gardiner, Barry

Buck, Ms Karen

George, Rt Hon Bruce (Walsall S)

Burden, Richard

Gerrard, Neil

Burgon, Colin

Gibson, Dr Ian

Burnham, Andy

Godsiff, Roger

Caborn, Rt Hon Richard

Goggins, Paul

Cairns, David

Griffiths, Nigel (Edinburgh S)

Campbell, Alan (Tynemouth)

Griffiths, Win (Bridgend)

Campbell, Ronnie (Blyth V)

Grogan, John

Caplin, Ivor

Hall, Mike (Weaver Vale)

Caton, Martin

Hall, Patrick (Bedford)

Cawsey, Ian

Hamilton, David (Midlothian)

Challen, Colin

Hanson, David

Chapman, Ben (Wirral S)

Harris, Tom (Glasgow Cathcart)

Chaytor, David

Healey, John

Clapham, Michael

Henderson, Ivan (Harwich)

Clark, Dr Lynda (Edinburgh Pentlands)

Hendrick, Mark

Heppell, John

Clark, Paul (Gillingham)

Hermon, Lady

Clarke, Rt Hon Tom (Coalbridge)

Hesford, Stephen

Clarke, Tony (Northampton S)

Heyes, David

Clelland, David

Hill, Keith

Clwyd, Ann

Hinchliffe, David

Coaker, Vernon

Hodge, Margaret

Coffey, Ms Ann

Hoey, Kate

Cohen, Harry

Hood, Jimmy

Coleman, lain

Hopkins, Kelvin

Colman, Tony

Howarth, Rt Hon Alan (Newport E)

Connarty, Michael

Howarth, George (Knowsley N)

Cook, Frank (Stockton N)

Howells, Dr Kim

Corbyn, Jeremy

Hoyle, Lindsay

Corston, Jean

Hughes, Kevin (Doncaster N)

Cousins, Jim

Humble, Mrs Joan

Cox, Tom

Hurst, Alan

Cranston, Ross

Hutton, Rt Hon John

Crausby, David

Iddon, Dr Brian

Cruddas, Jon

Illsley, Eric

Cryer, Mrs Ann (Keighley)

Ingram, Rt Hon Adam

Cummings, John

Irranca-Davies, Huw

Cunningham, Rt Hon Dr Jack (Copeland)

Jackson, Helen (Hillsborough)

Jamieson, David

Cunningham, Jim (Cov'try S)

Jenkins, Brian

Cunningham, Tony (Workington)

Jones, Helen (Warrington N)

Curtis-Thomas, Mrs Claire

Jones, Jon Owen (Cardiff C)

Dalyell, Tarn

Jones, Kevan (N Durham)

Davey, Valerie (Bristol W)

Jones, Lynne (Selly Oak)

David, Wayne

Jones, Martyn (Clwyd S)

Davidson, Ian

Joyce, Eric

Davies, Rt Hon Denzil (Llanelli)

Keen, Alan (Feltham & Heston)

Davies, Geraint (Croydon C)

Keen, Ann (Brentford & Isleworth)

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

Kemp, Fraser

Khabra, Piara S

Dawson, Hilton

Kidney, David

194

Kilfoyle, Peter

Pond, Chris

King, Ms Oona (Bethnal Green)

Pope, Greg

Knight, Jim (S Dorset)

Pound, Stephen

Kumar, Dr Ashok

Prentice, Ms Bridget (Lewisham E)

Ladyman, Dr Stephen

Prentice, Gordon (Pendle)

Lammy, David

Primarolo, Dawn

Lawrence, Mrs Jackie

Prosser, Gwyn

Laxton, Bob

Purchase, Ken

Lazarowicz, Mark

Pumell, James

Lepper, David

Quin, Rt Hon Joyce

Leslie, Christopher

Quinn, Lawrie

Levitt, Tom

Rammell, Bill

Lewis, Terry (Worsley)

Rapson, Syd

Linton, Martin

Reed, Andy (Loughborough)

Lloyd, Tony

Robertson, John (Glasgow Anniesland)

Love, Andrew

Lucas, Ian

Robinson, Geoffrey (Cov'try NW)

Luke, lain

Roche, Mrs Barbara

Lyons, John

Rooney, Terry

McAvoy, Thomas

Ross, Ernie

McCabe, Stephen

Roy, Frank

McCafferty, Chris

Ruane, Chris

McCartney, Rt Hon Ian

Ruddock, Joan

McDonagh, Siobhain

Russell, Ms Christine (Chester)

MacDonald, Calum

Ryan, Joan

McDonnell, John

Sarwar, Mohammad

McFall, John

Savidge, Malcolm

McGuire, Mrs Anne

Sawford, Phil

McIsaac, Shona

Sedgemore, Brian

McKechin, Ann

Shaw, Jonathan

McKenna, Rosemary

Sheerman, Barry

Mackinlay, Andrew

Sheridan, Jim

McNamara, Kevin

Simpson, Alan (Nottingham S)

Mactaggart, Fiona

Singh, Marsha

McWilliam, John

Skinner, Dennis

Mahmood, Khalid

Smith, Rt Hon Andrew (Oxford E)

Mahon, Mrs Alice

Smith, Angela (Basildon)

Mallaber, Judy

Smith, Rt Hon Chris (Islington S)

Mandelson, Rt Hon Peter

Smith, Geraldine (Morecambe)

Mann, John

Smith, Jacqui (Redditch)

Marris, Rob

Smith, John (Glamorgan)

Marsden, Gordon (Blackpool S)

Smith, Llew (Blaenau Gwent)

Marshall, David (Shettleston)

Soley, Clive

Marshall, Jim (Leicester S)

Southworth, Helen

Martlew, Eric

Spellar, Rt Hon John

Meacher, Rt Hon Michael

Squire, Rachel

Meale, Alan

Starkey, Dr Phyllis

Merron, Gillian

Steinberg, Gerry

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

Moran, Margaret

Stuart, Ms Gisela

Morgan, Julie

Sutcliffe, Gerry

Morley, Elliot

Tami, Mark

Morris, Rt Hon Estelle

Taylor, Ms Dari (Stockton S)

Mountford, Kali

Taylor, David (NW Leics)

Mudie, George

Thomas, Gareth (Clwyd W)

Mullin, Chris

Thomas, Gareth (Harrow W)

Munn, Ms Meg

Timms, Stephen

Murphy, Denis (Wansbeck)

Tipping, Paddy

Naysmith, Dr Doug

Todd, Mark

O'Brien, Bill (Normanton)

Touhig, Don

O'Hara, Edward

Trickett, Jon

Olner, Bill

Truswell, Paul

O'Neill, Martin

Turner, Dennis (Wolverh'ton SE)

Organ, Diana

Turner, Dr Desmond (Kemptown)

Osborne, Sandra (Ayr)

Turner, Neil (Wigan)

Owen, Albert

Twigg, Derek (Halton)

Palmer, Dr Nick

Twigg, Stephen (Enfield)

Pearson, Ian

Tynan, Bill

Perham, Linda

Vaz, Keith

Picking, Anne

Vis, Dr Rudi

Pickthall, Colin

Walley, Ms Joan

Pike, Peter

Watson, Tom

Plaskitt James

Watts, David

195

White, Brian

Wray, James

Whitehead, Dr Alan

Wright, Anthony D (Gt Yarmouth)

Wicks, Malcolm

Wright, David (Telford)

Williams, Rt Hon Alan (Swansea W)

Wright, Tony (Cannock)

Wyatt, Derek

Williams, Mrs Betty (Conwy)

Wilson, Brian

Tellers for the Ayes:

Winnick, David

Mr. Nick Ainger and

Worthington, Tony

Mr. Jim Murphy.

NOES

Ainsworth, Peter (E Surrey)

Gale, Roger

Allan, Richard

Garnier, Edward

Amess, David

George, Andrew (St Ives)

Ancram, Rt Hon Michael

Gibb, Nick

Arbuthnot, Rt Hon James

Goodman, Paul

Atkinson, David (Bour'mth E)

Gray, James

Atkinson, Peter (Hexham)

Grayling, Chris

Bacon, Richard

Green, Damian (Ashford)

Baldry, Tony

Green, Matthew (Ludlow)

Barker, Gregory

Greenway, John

Baron, John

Grieve, Dominic

Barrett, John

Gummer, Rt Hon John

Beith, Rt Hon A J

Hague, Rt Hon William

Bellingham, Henry

Hammond, Philip

Bercow, John

Hancock, Mike

Beresford, Sir Paul

Harvey, Nick

Blunt, Crispin

Hawkins, Nick

Boswell, Tim

Hayes, John

Bottomley, Peter (Worthing W)

Heald, Oliver

Bottomley, Rt Hon Virginia

Heath, David

Brady, Graham

Hendry, Charles

Brake, Tom

Hoban, Mark

Brazier, Julian

Hogg, Rt Hon Douglas

Breed, Colin

Horam, John

Brooke, Mrs Annette L

Howard, Rt Hon Michael

Browning, Mrs Angela

Hughes, Simon (Southwark N)

Bruce, Malcolm

Jack, Rt Hon Michael

Burnett, John

Jackson, Robert (Wantage)

Bums, Simon

Jenkin, Bernard

Burstow, Paul

Johnson, Boris (Henley)

Burt, Alistair

Key, Robert

Butterfill, John

Kirkwood, Archy

Cable, Dr Vincent

Knight, Rt Hon Greg (E Yorkshire)

Calton, Mrs Patsy

Laing, Mrs Eleanor

Cameron, David

Lait, Mrs Jacqui

Campbell, Rt Hon Menzies (NE Fife)

Lamb, Norman

Lansley, Andrew

Carmichael, Alistair

Laws, David

Cash, William

Letwin, Oliver

Chapman, Sir Sydney (Chipping Barnet)

Liddell-Grainger, Ian

Llwyd, Elfyn

Chope, Christopher

Loughton, Tim

Clappison, James

Luff, Peter

Collins, Tim

Mclntosh, Miss Anne

Cotter, Brian

Maclean, Rt Hon David

Cran, James

McLoughlin, Patrick

Curry, Rt Hon David

Malins, Humfrey

Davey, Edward (Kingston)

Maples, John

Davies, Quentin (Grantham)

Mawhinney, Rt Hon Sir Brian

Djanogly, Jonathan

May, Mrs Theresa

Dorrell, Rt Hon Stephen

Mercer, Patrick

Doughty, Sue

Mitchell, Andrew (Sutton Coldfield)

Duncan, Alan (Rutland & Melton)

Moore, Michael

Duncan, Peter (Galloway)

Moss, Malcolm

Duncan Smith, Rt Hon lain

Murrison, Dr Andrew

Evans, Nigel

Norman, Archie

Ewing, Annabelle

O'Brien, Stephen (Eddisbury)

Fabricant, Michael

Osborne, George (Tatton)

Fallon, Michael

Ottaway, Richard

Field, Mark (Cities of London)

Page, Richard

Flight, Howard

Paterson, Owen

Flook, Adrian

Pickles, Eric

Forth, Rt Hon Eric

Price, Adam

Foster, Don (Bath)

Prisk, Mark:

Francois, Mark

Pugh, Dr John

196

Randall, John

Taylor, Dr Richard (Wyre F)

Redwood, Rt Hon John

Taylor, Sir Teddy

Reid, Alan (Argyll & Bute)

Thomas, Simon (Ceredigion)

Rendel, David

Tonge, Dr Jenny

Robathan, Andrew

Trend, Michael

Robertson, Hugh (Faversham)

Turner, Andrew (Isle of Wight)

Robertson, Laurence (Tewk'b'ry)

Tyler, Paul

Roe, Mrs Marion

Tyrie, Andrew

Rosindell, Andrew

Viggers, Peter

Ruffley, David

Walter, Robert

Russell, Bob (Colchester)

Waterson, Nigel

Sanders, Adrian

Watkinson, Angela

Sayeed, Jonathan

Webb, Steve

Selous, Andrew

Weir, Michael

Shephard, Rt Hon Mrs Gillian

Whittingdale, John

Simmonds, Mark

Widdecombe, Rt Hon Miss Ann

Simpson, Keith (Mid-Norfolk)

Wilkinson, John

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

Willetts, David

Williams, Hywel (Caemarfon)

Spelman, Mrs Caroline

Williams, Roger (Brecon)

Spicer, Sir Michael

Willis, Phil

Spink, Bob

Wilshire, David

Spring, Richard

Winterton, Ann (Congleton)

Stanley, Rt Hon Sir John

Winterton, Sir Nicholas (Macdesfield)

Steen, Anthony

Streeter, Gary

Wishart, Pete

Stunell, Andrew

Yeo, Tim

Swayne, Desmond

Young, Rt Hon Sir George

Swire, Hugo

Younger-Ross, Richard

Syms, Robert

Tapsell, Sir Peter

Tellers for the Noes:

Taylor, John (Solihull)

Mrs. Cheryl Gillan and

Taylor, Matthew (Truro)

Dr. Julian Lewis.

Question accordingly agreed to.
Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the Government's framework for pensions which will reduce pensioner poverty and encourage saving; recognises that pensions are best provided on the firm foundation of the sound economy the Government has put in place, with partnership between employees and employers, pension providers and Government; congratulates the Government on the extra £6 billion paid to pensioners from April of this year and its intention to bring in the Pension Credit which will increase the incomes of around half of all pensioners; further welcomes the introduction and progress of stakeholder pensions; recognises that there is still more to do and looks forward to receiving the Pickering and Sandier Reviews and consulting on proposals for reform in the Autumn.
10.26 pm
Mr. Don Foster: On a point of order, Mr. Speaker. I wonder whether you are aware that it is anticipated that tomorrow morning the "Today" programme and a number of national newspapers will be commenting on a report on planning by the Select Committee on Transport, Local Government and the Regions. I understand that there is to be a press conference at 10.30 am, but that the report is embargoed until midnight tonight. Will you advise me and other Members where it may be possible for us to obtain a copy of the report by midnight?
Mr. Speaker: I inform the hon. Gentleman that it is up to Select Committees to enforce their own embargoes, but he has put this complaint on the record and I hope that note will be taken.

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

SOCIAL SECURITY
That the draft Social Security (Electronic Communications) (Child Benefit) Order 2002, which was laid before this House on 17th June, be approved.—[Mr. Pearson.]
Question agreed to.
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

HOUSING
That the draft Homelessness (Priority Need for Accommodation) (England) Order 2002, which was laid before this House on 18th June, be approved.—[Mr. Pearson.]
Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS
Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

THIRD COUNTRY NATIONALS
That this House takes note of European Union Documents No. 8237/01, draft Council Directive concerning the status of third-country nationals who are long term residents, and No. 11803/01, draft Council directive on the conditions of entry and residence of third-country nationals for the purpose of paid employment and self-employed activities; supports the Government's position on these measures; and takes note that the Government has not opted into them but intends to maintain a constructive approach and will consider whether to opt in once their final shape is clear.—[Mr. Pearson.]
Question agreed to.

SECTION 5 OF THE EUROPEAN COMMUNITIES (AMENDMENT) ACT 1993
Motion made,
That, for the purposes of their approval under section 5 of the European Communities (Amendment) Act 1993, the Financial Statement and Budget Report 2002–03 and the Economic and Fiscal Strategy Report 2002–03 shall be treated as if they were instruments subject to the provisions of Standing Order No. 118 (Standing Committees on Delegated Legislation).—[Mr. Pearson.]
Hon. Members: Object.

PETITIONS

  Further Education Funding
  10.27 pm
  Mr. Patrick Hall: I am pleased to present this petition of more than 800 signatures of staff and students at Bedford college of further education, organised by the Bedford college branch of the National Association of Teachers in Further and Higher Education.
  I add my personal support for the petition and my thanks to the staff, students and governors of Bedford college for their hard work and for the important part that they play in the social and economic life of Bedford and Kempston.
  The branch:
  Declares that it believes that the Government must invest more resources into further education and provide earmarked funding for the following purposes:
  to provide fair pay and conditions for all college staff and to end low pay,
  to bring lecturers' pay into line with that of teachers in schools and sixth form colleges,
  to bring the pay of support staff into line with that of comparable groups
  and to ensure equal pay for work of equal value.
  The Petitioners therefore request that the House of Commons urges the Secretary of State for Education and Skills to review the Government's present policy on the funding of further education.
  And the Petitioners remain, etc.
  To lie upon the Table.

  Electric Dog Collars
  10.29 pm
  Mr. Bob Laxton: I wish to present to the House a petition of 312 residents of Derby. The petition states:
  To the House of Commons
  The Petition of Residents of Derby
  Declares that the use of electric collars in dog training is cruel, liable to misuse, and unnecessary, especially with the many different forms of reward training that are currently available.
  The Petitioners therefore request that the House of Commons urge the Government to introduce legislation that will ban the sale of electric collars, which are at present freely available from Retail Outlets throughout the UK.
  And the Petitioners remain
  To lie upon the Table

  Elderly Care (Devon)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pearson.]
  10.30 pm
  Richard Younger-Ross: First, I declare an interest: my wife is an employee of Devon county social services department.
  There is all-party support for the debate. I requested it because on 10 January a delegation of all four party leaders in Devon came to meet all the Devon Members. They explained that there was a funding crisis in social services, and in detailed and fairly graphic terms they described the effect that it was having on elderly people in the county.
  Before going into the details, I shall sketch the broader picture. At the end of last year, directors of social services from across the country met and produced a document that stated their estimate that £1 billion of funding was required for social services departments. Since then, the Government have given two tranches of money totalling some £700 million, which still leaves social services departments across the country short of at least £300 million. However, months have passed since that estimate was made; costs have increased, and the Chancellor has levied national insurance charges on employers that add to those costs.
  Recent research published last month by the Joseph Rowntree Foundation states that there is a shortfall in social services funding, and estimates that £1 billion is now needed to counter the shortfall in fees for care homes.
  Mr. Adrian Sanders: That report suggested that the £1 billion funding should be provided and linked to care homes and nursing homes meeting the new required standards, so that the new required standards and new money going into the system would be achieved at the same time. Should not the Government now consider that proposal?
  Richard Younger-Ross: My hon. Friend makes an excellent point—I could not have put it better myself.
  Last year. 75 per cent. of social services departments overspent, but for the elderly of Devon, the picture is bleaker still. The pot for social services departments is too small, but Devon does not even get a fair share from that pot. The standard spending assessment per head of population for the south-west is the lowest in the UK: it is about £114 per head short of the UK average, and more than £200 less than the SSA for some other parts of the country. Devon now has the fourth lowest SSA of the 15 local authorities comprising the south-west.
  The House should not be lulled into thinking that "glorious Devon" does not get as much money as other parts of the country because it is so nice there. That picture postcard image of the county is inaccurate. There is real poverty and deprivation in Devon. Between those comber and vales, from the moors to the sea, are people who live in poverty and find it hard to make ends meet. The two counties of Cornwall and Devon have the highest levels of poverty of any county area in the country.
  Why is there so much overspend among social services departments? Among those departments that have overspent, 65 per cent. of the overspend is on child
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  services. That is certainly so in the south-west, and it is diverting resources that are required for elderly people. In a report published by the 15 directors of social services last year, they said that they were all having to divert money from elderly services to meet their legal requirements on child services.
  I raised that point with the Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears), in the social care debate in January, and she stated that that was not right and that there would be an investigation. I hope that the Minister responding to this debate can say how far that investigation has gone and what his Department is doing to look at that problem. County councils spend between 50 and 100 per cent. over their SSAs. In the south-west, £79 million is spent over the SSA—some £10 million above the budget, because costs have continued to rise.
  All that represents a triple whammy for elderly people: social services departments across the country receive inadequate funds; there is a low standard spending assessment for Devon and the south-west; and there is a diversion of funds to child services to meet legal requirements such as child protection. The result is misery for elderly people in the county of Devon: it is 572 bed losses and the closure of 32 care homes in the past year.
  Is it any wonder that, when I visited my local hospital in Teignmouth recently, I found elderly people who were fit and able to go to a care or nursing home for whom a place could not be found? The term used for that is bed blocking, but this is bed locking. Effectively, lack of funding is chaining those people to a hospital bed, in which they do not wish to be and which is desperately needed by others in the national health service.
  Today we can see the sad result of such home closures. It has been reported in the national press that one lady who was over 100 years old decided to go on a hunger strike because she had been forced to move from the care home where she lived, and as a result she died.
  The outcome is not always as dramatic, but when a home closes and elderly people are forced to move, they can be put under considerable stress. When a local authority decides that it needs to close homes, and it manages the closures, scales down the facilities and speaks to people, it causes some, minimal, stress. However, what does it do to elderly people and their stress levels when a home is going bankrupt, when they can see that around them and when the certainty about how long they can stay disappears? There is no question but that that can lead to illness and premature death.
  What do we do? I ask the Minister to consider how we can find adequate funding for social services departments across the country. Bluntly, there is not enough money being put into social care and social services at the moment. The situation is even worse when one considers the Government's refusal to fund all the social care provision required, such as the personal care that people need when in homes. Scotland has led the way, as it said yesterday that personal care would be funded, although I am sure that the Minister will say that money is being diverted from something else. A lot of money is available to the Government and I urge them to look at giving some of it to the elderly. They should comply with the full details of the report, which says that personal care ought to be funded.

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  We need a fair deal for Devon and the south-west. I appreciate that the Government are looking at reviewing SSAs, but please can they make sure that the south-west does not lose out again? There is poverty, as I have described, and there are problems that cannot be ignored.
  Mrs. Angela Browning: Does the hon. Gentleman agree that it is iniquitous that we get less per capita for our elderly population than to other parts of the country? I cannot understand why their needs are deemed to be less than those of people elsewhere.
  Richard Younger-Ross: I agree. It does not make sense that it costs more to look after an elderly person in one part of the country than in another. In fact, the reverse is the case. In rural Devon, where there are large spaces and communities are far apart, it is more expensive to look after elderly people and provide services.
  The Government need to look not only at a long-term solution to the problem and but at what they can do now. There is a crisis and elderly people are suffering. I will not go so far as to beg or plead with the Minister, but I ask him to look at what can be done this year to provide emergency funding for social services departments in Devon and the south-west. Will he ask the Secretary of State to meet representatives of social services departments across the south-west who have got together and worked co-operatively? That is not party political point-scoring because those people serve on Labour, Liberal Democrat and Conservative councils, as well as those with no overall control. There is a consensus in the south-west that there is a crisis and a problem that needs to be put right. I urge the Minister to arrange that meeting and see what can be done to stop the elderly people of Devon and the south-west suffering any further.
  10.43 pm
  Mr. Anthony Steen: I congratulate the hon. Member for Teignbridge (Richard Younger-Ross) on securing one of the most important debates in the House for some time. I thank him for his generosity in allowing me to say a few words.
  All parties must back our concern about the elderly in Devon. Our concern is genuine because more elderly people probably live in Devon than anywhere else in the country, yet social services do not get the resources that they need. I am not sure how the Government are going to deal with the problem. They will have to give more money to social services to care for elderly people in their own homes, which I favour, as provided for by the Community Care Act 1990, and provide more hot meals. At the moment, there are virtually no hot meals for the elderly in Devon. They get block deep-frozen meals, which last them a month. They have a special deep-freeze where they put that frozen food, and are supposed to live on it for a month. Nobody comes to see them, as people from the old meals on wheels did.
  The home help service is no longer strong, and neither is the chiropody service or the shopping service. There are no services any longer, and elderly people understandably cannot look after themselves in their own homes, so they are forced into residential homes. However, 50,000 residential places have closed all over Britain. If we do
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  not look after old people in their own homes by providing the support services, we must provide residential and nursing homes to look after them instead. That has not happened.
  I am not necessarily asking the Minister for more money, although a little more would be useful—we all need more money. The main point is to make sure that the social services have the resources to provide the services that keep old people in their own homes. If we fail to do that, we force them into hospital because there are not the residential homes to look after them.
  That is a serious indictment of the Government. The comments of the hon. Member for Teignbridge reflect the unanimous view of all the councils in the area that we face a crisis. The only reason that the crisis has not spilled into the street is that the hospitals are shoring up the gaps, but they can do that for only so long. The hon. Gentleman rightly asks that something be done about the matter.
  Not only are there fewer residential homes, but the elderly have to sell their own homes and pay all the money over to the residential or nursing home, so they die impoverished, rather than passing their money on to their family. The matter transcends all parties and worries us deeply. I pay tribute again to the hon. Gentleman for raising an issue that is of great concern to everyone in Devon.
  10.46 pm
  The Parliamentary Under-Secretary of State for Health (Mr. David Lammy): I begin by congratulating the hon. Member for Teignbridge (Richard Younger-Ross) on securing the debate. I can see the strength of support in the south-west on the issue, as he is joined by so many colleagues from that area. I am pleased to say that I am going to Devon on Thursday, so I am sure that I shall be able to see part of the situation first-hand. I shall ensure that my office writes to hon. Members to alert them to where I am going.
  In the time available, I want to make clear the investment that is going in and our provisions for elderly people in the community and in hospital. My officials have reported positively on the ways in which the authority plans to develop services for elderly people in Devon, and the work of its senior staff, where I understand that the hon. Gentleman has some personal interest, which he drew to our attention. Care of the elderly is a most important subject, and it is timely that we should discuss it now.
  The Government are committed to improving access to health and social care services for older people and to ensuring that standards of both health and social services are as high as possible, and that variations in levels and quality of services throughout the country are minimised. To take this commitment forward, the national service framework for older people was published on 27 March 2001. The national service framework will help to tackle age discrimination, and will raise standards and reduce inconsistency in the health and social care of older people in England. That will be backed by huge investment.
  The Government have made unprecedented investments in social services. Between 1996–97 and 2002–03, personal social services resources increased by more than 20 per cent. in real terms. That is an average real-terms increase of more than 3 per cent. a year. It compares with average annual real-terms growth of only

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  0.1 per cent. per annum between 1992–93 and 1996–97 under the previous Government. That is important and it should be borne in mind.
  We acknowledge the need for continuing investment in social services. PSS resources will increase by an average of 6 per cent. a year in real terms over the next three years. Those new resources will enable further significant improvements to be made to social care, including services for older people who need support so that they can continue to live in their own homes in the community. The hon. Member for Totnes (Mr. Steen) drew attention to provision in the home, which is a core part of the Government's policy. The task for the Government and local government in places such as Devon is to make the best possible use of those funds so that we can deliver the services that the public deserve.
  I believe that Devon and other councils in the south-west have received a share of those substantial increases in resources. In 2002, Devon's PSS standard spending assessment—its Government allocation of general revenue funding—is £114.6 million. I think that the hon. Member for Teignbridge referred to a lower figure, so I want to be clear on the numbers. On a like-with-like comparison, the county's standard spending assessment has increased this year by 5.2 per cent., in comparison with the national average of 4.9 per cent. That follows increases of 4.1 per cent. for 2001–02 and 5 per cent. for the previous year. Furthermore, those year-on-year increases in general revenue funding are well above the rate of inflation.
  Nick Harvey: Is the Minister aware that in the last year in which places in residential homes for the elderly were paid for by the Department of Social Security, Devon had more than 16 per cent. of England's national spend? Currently, we have less than 4 per cent. of the national spend on elderly residential places, yet we still have the same number of elderly people in residential homes as we had under the old system. Does he understand the specific difficulties that Devon has had in coping with that enormous disparity?
  Mr. Lammy: I understand that there are particular problems in Devon because of its size, its population make-up and its share of the SSA in comparison with other areas. None the less, there have been significant increases and the £114 million to which I referred is a lot of money, and I want to go on to speak about the review and the other particular issues if I can be allowed the time to do so. It is important when talking about provision for the elderly to recognise that other issues also affect capacity and that the Government are dealing with them. That relates to provision in some of the hospitals and modernisation. We have embarked on a very strong modernisation agenda and it has to bed down in Devon, as elsewhere, to ensure that some of the capacity issues are dealt with.
  In addition to the general revenue funding, Devon has received large increases in the specific ring-fenced grants made available by the Department. In particular, its carers grant has increased this year by 22 per cent. to £1.1 million and its children's services grant has increased by 15 per cent. to £4 million. Those increases follow significant increases for last year—for example, they include a 40 per cent. increase in the carers grant and a 13 per cent. increase in the mental health grant.
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  The hon. Gentleman was right to draw attention to the review that is under way. Of course, my colleagues in another Department are considering that review, and Devon, like all other local authorities, will make its submissions and views known. Indeed, Ministers in the south-west will continue to lobby on this very important issue. The difficulty with all formulae is that those at the margins can lose out. I recognise the serious concerns of Devon Members, which is why I am very pleased to be visiting the area, but it is wrong to say that money is not going in.
  Richard Younger-Ross: I hope that we can welcome the Minister to Devon, wherever he is going. I am sure that he will tell us.
  The Minister has referred to small percentage increases in what the Government have provided. According to the figure that I quoted, county councils are spending between 50 and 100 per cent. above SSA. That is not 3 per cent., 4 per cent. or 6 per cent.; it is a massive sum, and it needs to be addressed.
  Mr. Lammy: One must be careful in comparing SSAs per capita. Allocations are based on the weighted proportion of the population, which is different in different areas. It is up to councils to make their own assessments and choose where to allocate their funds according to the nature of the formula and how it affects their areas. That is the same throughout the country. But I note what the hon. Gentleman has said, and of course Hansard is available to those in other Departments.
  Mrs. Browning: Devon's difficulty is that it has had to put more money into children's services because it must fulfil its statutory obligations first.
  Mr. Lammy: I note what the hon. Lady says, but I need to make some progress. As I have said, we have had a formula for some time based on particular groups in the area. It is up to individual councils to decide where to allocate their money, but a review is in progress and we must await its outcome.
  The Government's policy is to promote independence for older people wherever we can, and to enable them to remain in their own homes whenever possible. That is what the people concerned and their families tell us they want. The number of people receiving intensive care and support in their own homes has increased by 6 per cent. in the last year, which is an excellent achievement.
  Clearly we continue to need residential accommodation, but we must not make the mistake of judging the success of Government policy simply by looking at the number of people in residential care and nursing homes. Our policies are designed to ensure that people can live in their own homes with the appropriate support. The Government aim to provide that support whenever possible, balancing it with good, effective, high-quality residential accommodation where necessary. It is a matter of getting the balance right for local communities.
  The care-home sector is very important. There is a real need for the authorities to do some long-term, sustainable planning. It is important for local-authority commissioners—with their partners, including providers—

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  to have a joint and transparent strategy that is clear about how it is intended to provide care and support for local people in future.
  Last October, the Government announced that they would give local councils an extra £300 million over two years to tackle delayed discharges from hospital—or, as the hon. Member for Teignbridge described it, bed-blocking.
  Richard Younger-Ross: Bed-locking.
  Mr. Lammy: I am sorry—bed-locking.
  The extra money was targeted at the councils that needed it most. The first £100 million has been given to local councils, and we have been monitoring how they have been choosing to spend it. More than half the money has been spent on care home places, but it is noticeable that that is not the only way in which those on the front line have chosen to spend it.
  Some councils are increasing intermediate care to enable more people to leave hospital and regain their independence in their own homes. Many have increased the provision of intensive home care support, so that more
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  people can be supported in their own homes and do not need to enter residential care. Each of the schemes not only allows councils to exceed their targets for reductions in delays and enables people to leave hospital when they are ready to do so, but highlights the scope that exists within social care for supporting those who cannot live independently.
  As Members will know, there has been a small loss of care home beds since 1997. Although 50,000 were deregistered, during the same period over 33,000 beds entered the care home market, making a loss of just 17,000. That is, of course, still a loss, but what is more important is that there is still spare capacity. The carehome market peaked in 1996, when there were too many beds to be sustainable in the long term. Indeed, the recent report by the Joseph Rowntree Foundation goes as far as to suggest that the decline in care home capacity should be welcomed.
  The debate has given the House a welcome opportunity to discuss an important issue—
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Eleven o'clock.

Preamble
[SYLVIA HEAL in the Chair]

Air Services (Scotland)
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Ainger.]
9.30 am
Mr. David Marshall: It is a matter of great sorrow, following the tragic loss of life in the air crash in Germany, that we should be debating aviation this morning. I am sure that we all deeply sympathise with the victims and their families.
Today's debate is about the role of the Scotland Office in promoting air services to and from Scotland. It should allow a meaningful exchange of views on a matter of great importance to the Scottish economy and to Scotland's future well-being. Furthermore, it comes at an appropriate time, as we await publication of the Government's consultation document, which I hope will set out options for the long-term development of Scotland's airports and, as a consequence, have a substantial effect on what services there will be and from where they will operate.
I welcome our new Minister to her first Adjournment debate and I look forward to her reply to the points that will be raised, although I realise that the imminent publication of the consultation document means that her comments may be somewhat limited.
I intend to concentrate on the three central Scotland airports. In alphabetical order, not in order of importance, they are Edinburgh, Glasgow and Prestwick. I also intend to consider where we are today, what may happen in the short term and what I believe should happen for the long-term benefit of Scotland as a whole. If we were to start again with a clean sheet, I have no doubt that there would be only one airport, not three, and that it would be located between Edinburgh and Glasgow, where it would be adjacent to the motorways and the main line railway links—but more about that later.
The Parliamentary Under-Secretary of State, Scotland Office (Mrs. Anne McGuire): Why not have it at Stirling?
Mr. Marshall: Well, why not have that airport at Stirling? The existing provision may serve local needs quite well, but does it do the nation a service or a disservice? Prestwick airport exists for historical and outdated technological reasons. Edinburgh and Glasgow, however, are there for reasons of municipal rivalry, parochialism and civic pride. There is nothing wrong with that.
Mrs. Irene Adams: It may surprise my hon. Friend to know that I am quite happy with Glasgow airport being where it is, but I remind him that it is in Glasgow in name only. It is sited at Paisley.
Mr. Marshall: I am grateful to my hon. Friend for that correction. I remember when it was called Abbotsinch, but she may not, as she is younger than me.
We assume that those three airports are all competing with each other, but are they? If so, are they competing on a level playing field? In the 1979–83 Parliament, I served on the Scottish Affairs Committee, which in 1981–82 investigated the future of Prestwick airport. The inquiry's main recommendations were that high-speed railway links and motorways should be constructed between Prestwick and Glasgow, but the Government of the day chose to do nothing and Prestwick went into rapid decline.
In 1988–89, I was Chairman of the Transport Committee when it conducted an inquiry into air traffic control safety and runway capacity in the United Kingdom. One of the Committee's many recommendations, which I pushed strongly, was that transatlantic gateway status be extended to airports such as Birmingham and Glasgow. I campaigned for that with Alan Stewart, the then Member for Eastwood—happily, my hon. Friend the Member for Eastwood (Mr. Murphy) now holds the seat—and Glasgow achieved gateway status.
I became involved in that campaign because I sincerely believed that the airline that operated transatlantic services from Prestwick was on the verge of moving to Manchester, which was marketing itself aggressively as Scotland's gateway, as was Amsterdam's Schipol airport. Twelve years later, a similar situation is looming for transatlantic services from Glasgow. The transfer of transatlantic services to Glasagow was a blow to Prestwick, but it fought back well, although to be fair, BAA handed over more than £1 million of assets for a pittance when it sold the airport. Substantial sums of additional public money were invested in Prestwick, and I am sure that some of that money became part of the large profit that investors made when Prestwick was resold.
I am pleased to note that, at 36 per cent., Prestwick's growth last year was the largest of any regional airport, but it was from a low base. The trick is to sustain that growth, but that will be much more difficult this year and in future years.
Yet again, we are seeing an industry drift from west to east. In the tobacco, sugar and aviation industries, the emphasis has moved from trade with the Americas to trade with Europe, and the establishment of the Scottish Parliament in Edinburgh has added to that trend. The west of Scotland needs compensatory action if the east-west divide is not to worsen and people are not to move east en masse in search of employment. Edinburgh could well become the London of Scotland.
When the British Airports Authority—now BAA plc—was privatised in the 1980s, I joined a delegation of Labour Members who went to see the Secretary of State for Trade and Industry, Lord Young. We argued that BAA should be privatised en bloc, and that Heathrow, Gatwick, Stansted, Aberdeen, Edinburgh, Glasgow and Prestwick should all remain part of BAA. I now believe that that was a great mistake, because we simply exchanged a public monopoly for a private one.

3WH
It has been alleged, and denied, that BAA is pro or anti one or another airport.
Mrs. Adams: I am sorry to keep intervening, but is my hon. Friend aware that Prestwick is no longer part of BAA?
Mr. Marshall: I am sure that my hon. Friend heard me say that Prestwick has been sold and resold, and that BAA gave it away with more than £1 million of assets, so I am well aware of the position.
It has been alleged, and denied, that BAA is either pro or anti one or another of the airports in its ownership. It is possible to argue that BAA—perhaps in conjunction with some of the airlines—could control and manipulate the competition and where services at its six airports fly to or from. Has the Scotland Office considered the matter, and should it be referred to the Competition Commission? Would it be better for Edinburgh and Glasgow airports to have different owners?
Edinburgh airport has rapidly and substantially increased its passenger traffic over the past few years to approximately 6.3 million, although it is open to question whether that happened naturally or as a result of manipulation. In a short time, Edinburgh will probably overtake Glasgow's 7.3 million passengers to become Scotland's No. 1 airport. Some may say that that is fair enough, but where will that leave Glasgow and the west of Scotland?
The Minister is well aware of Glasgow airport's importance to the economy of the west of Scotland, and more than 5,000 jobs depend on it. Is she also aware of serious concerns that Glasgow is about to be downgraded, and transatlantic services moved to Edinburgh? There are fears that a second runway and a rail link will soon be announced for Edinburgh, while there will be nothing for Glasgow. Is she aware of concerns that more business class passengers will be encouraged, persuaded or forced to use Edinburgh, and that all European scheduled services will operate from that city, with only domestic feeder and charter flights from Glasgow?
The lessons of Prestwick's demise in the 1980s have not been learned, and we have delayed for years the completion of the M74 in my constituency. That project will relieve the pressure on the Kingston bridge and some gridlock in Glasgow. It will also allow much faster and better access to the airport, although it will be some years before it is completed. The Scottish Executive's decision to complete it is welcome, however.
We still have no decision on the airport rail link from Glasgow city centre. Strathclyde passenger transport authority has waged an excellent campaign in support of the link, and we must end the uncertainty as soon as possible. Has the Scotland Office discussed the issue with the Scottish Executive, who are responsible for making the decision? When do the Scottish Executive hope to make an announcement about their decision? Will the Minister seek a guarantee that Glasgow will not be downgraded and sacrificed for Edinburgh's benefit?
Will the Minister also consider the assessments that are being made of future trends in aviation, such as the possible construction of 600-seater aircraft? Will such
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planes, if they are ever built, be able to use Edinburgh and Glasgow airports? What terminal facilities will be needed to cope with a fleet of them, and how will they ever be filled with passengers from Scotland? Will such planes operate only from Manchester, London and the big European airports, relegating Scottish airports to providing only feeder services?
The substantial add-on costs of charter flights south from Scotland are a sore point with most Scots who go on holiday by air and yet another example of how consumers are ripped off in the UK. As far as I am aware, there is no corresponding reduction for Scots on the cost of charter flights going north, whether they originate in England or in Scotland. It is a case of win-win for the operators. My hon. Friend the Member for Motherwell and Wishaw (Mr. Roy), in conjunction with the Daily Record,has waged a vigorous campaign to have action taken on the matter. Will the Minister raise the subject with her ministerial colleagues?
When the Minister does that, will she consider the high cost of business-class fares on Anglo-Scottish services, which must be a disincentive to business and jobs? Why should such fares cost approximately the same as some transatlantic flights? Where is the price competition between airlines in business-class fares? They all seem to charge the same. It is probably a coincidence, but those of us who do not believe in coincidences think otherwise.
There have been numerous suggestions and some attempts to make a success of air cargo operations, but again we have the problems of inadequate road and rail links and the lack of air services to further forwarding destinations, which prevent them from being a great success. Will the Minister say whether cargo will be included in the consultation document?
We could not have a full debate without referring to low-cost carriers, which are a mixed blessing. There is no doubt that the increased competition has forced some airlines to lower costs, but, again, is the competition on a level playing field? Do some airports not offer low-cost carriers substantially reduced landing fees, or even none at all? Surely there may be a case for charging identical landing charges for identical aircraft, or identical per-head landing charges throughout the United Kingdom.
I am also concerned at the misleading advertisements and hidden costs for passengers on some routes operated by low-cost carriers. It must come as quite a shock to many passengers to find that the airport at which they land is 25, 40 or even 60 miles from their destination—substantial additional expense and time are necessary before they get to where they want to be. Such information and costs should be made clear to prospective passengers before they book their tickets.
Mr. Peter Duncan: The growth in low-cost operators suggests that people are willing to accept a somewhat inconvenient destination if they get the price that they want to pay. Surely the issue is competition.
Mr. Marshall: I am grateful to the hon. Gentleman for his intervention, but people who feel conned have complained to me. A classic example is a friend of a friend who went from London to what they thought was Glasgow airport. Instead, they arrived at Prestwick,

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took a taxi and asked for the city centre only to find that taxis cost £40 each way. Many passengers who use low-cost airlines do not appreciate the additional costs that could be involved until it is too late. That is why it is a good idea that they be provided with such information before they book their tickets.
So far as I am aware, none of the low-cost carriers has much of an operating base in Scotland. We could have a case of here today, gone tomorrow, and that has already happened to some carriers. We do not know how long term the low-cost carriers are—they operate on extremely low overheads and hire space, and they do not have the overheads of regular scheduled multinational carriers. Time will tell who wins the battle between the types of carrier.
Angus Robertson: Bearing it in mind that Ryanair now has a higher market capitalisation than British Airways, will the hon. Gentleman concede that its long-term prospects are probably not bad?
Mr. Marshall: We have seen a lot of allegedly global giant companies descend to the ashes as quickly as they rose. Who can tell what will happen? Some were of much greater value than the company that the hon. Gentleman refers to.
What efforts has the Scotland Office made to establish any maintenance and repair organisations or call-centre activities for low-cost airlines in Scotland? Has any assessment been made as to whether low-cost operations result in a net loss of inward investment? That is an important point. Do the carriers not take many more people out of Scotland, and bring them back, than they bring to Scotland from other destinations? The figure could be two or three times as many. People who might otherwise spend their money in the Scottish economy spend it abroad, because they are encouraged to take the low-cost fares.
Is it just a coincidence or is the increase in low-cost air travel linked to a substantial reduction in the number of tourists spending their holidays and their money in Scotland? Our tourist industry must draw up a strategy to combat that. Will the Minister say whether any studies have been carried out on that point? I believe that low-cost carriers' operations are causing a drain of money from Scotland, and I want people to spend their money in the beautiful parts of Scotland rather than on travelling to other European countries. I make no apologies for making that point.
I compliment my right hon. Friend the Secretary of State for Scotland for participating in the post-11 September aviation summit in Edinburgh with 14 different airlines. Will the Minister say what discussions took place with a view to encouraging more direct international flights to and from Scotland? A common complaint from airlines is that they cannot get business passengers to travel directly from Scotland, because most want to travel via London. Have any surveys been carried out to discover why that is so? Why go through a busy, overcrowded airport such as Heathrow when one can travel from Glasgow or Edinburgh? If no surveys have been carried out, will the Scotland Office consider whether one should be?
I must raise two important issues with the Minister. First, bilateral UK-US agreements, or the Bermuda 2 talks, as they are known, are important and they could
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affect services to and from Scotland. Has the Scotland Office been involved in those talks at any stage? As the Minister is aware, the Advocate General of the European Court of Justice has issued an opinion that such bilateral agreements are likely to be illegal. It is expected that the court will uphold that opinion later this year and that the European Union will then be involved in the process. Will the Scotland Office have an input to any such EU discussions?
Secondly, EU enlargement will cause eastern Europe—the east again—to open up, especially as a tourist destination. Charles de Gaulle, Frankfurt and Schiphol airports may overtake Heathrow as destinations for Americans, with a consequential loss of tourists to Scotland. Will that be taken into account in future plans and policies?
Finally, as a Glasgow MP, I have been parochial and argued Glasgow's case. Having done so on the basis of having to work with what is, I would argue that to accept the long-term economic consequences of the existing situation is to sell Scotland short. I accept that we are a relatively small nation with a small population and that, as such, we will never be able to sustain a large airline hub, meaning an airport with hundreds of onward connections—
Angus Robertson: What about Copenhagen?
Mr. Marshall: The hon. Gentleman could also cite Schiphol. Copenhagen is certainly doing very well. None the less, if we genuinely have Scotland's interests at heart, we should seriously consider investing no more in the status quo than is necessary to keep up standards in the short term.
The three existing airports could eventually fill a number of niche markets, enabling them to survive for a considerable time. Instead of continuing as at present, we should draw up a long-term airports plan for the rest of the century, encompassing Scotland's employment, export market, inward investment and tourism needs, and anything else that is relevant.
We should bite the bullet and go for a brand new central Scotland airport, located between Edinburgh and Glasgow and adjacent to motorway and rail links. Such an airport, according to present-day figures, could have 15 million passengers a year—the combined total for all three existing airports. If we allow for growth in air travel and new businesses as a result of having such an airport, by the time it is built it could have 20 million passengers a year. That would make a tremendous economic difference to our country, safeguarding existing aviation jobs that otherwise may wither away and creating many new ones. If such an airport should ever be built, please let the state operate and benefit from the car parks—they are licences to make money, with next to no liability to the customer.
I am grateful for the good attendance and interest in the debate, and I look forward to the other contributions.
9.49 am
Mr. Peter Duncan: I commend the hon. Member for Glasgow, Shettleston (Mr. Marshall) for his good judgment and good fortune

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in securing the debate. The subject is an important one, and it is ripe for discussion as the consultation gets under way.
Scotland faces challenges, because it is peripheral to the United Kingdom and to Europe, which makes air travel all the more appropriate for discussion. The world is becoming smaller and air travel is growing accordingly; passenger traffic throughout the United Kingdom is increasing annually by 5 per cent., with freight traffic growing at 7 per cent. I agree with the hon. Gentleman on freight traffic, which is often neglected in discussions on air travel. Freight provides a significant opportunity for Scotland, as we have learned from the experience of Prestwick.
This is a new era for air traffic. I understand that the hon. Gentleman has what he calls a parochial interest in Glasgow, but given that the city has two airports—Glasgow Prestwick and Glasgow Abbotsinch—some of his comments could have been better balanced. He would have done better to reflect the market as it is today, because air travel is fuelled by marketing demand, whereas a few years ago it was fuelled by manipulating supply.
No-frills operators are making air travel ever more accessible to people who, 10 years ago, would not have thought it to be in their reach. I commend those operators for their part in that. Some may question how substantial those companies are, but I would say that they are substantial, given the market capitalisation of Ryanair and the growth of easyJet. We may compare that with the relative instability of some major air traffic operators in the United Kingdom—British Airways' share price is not what it was a few years ago, for example.
There is more outgoing air traffic than incoming air traffic through those no-frills airlines, but that is a commercial matter. It is up to companies to make the most of the market opportunity, and they seem to be among the most dynamic, flexible and innovative operators in the travel industry. However, every time I arrive at airports in Glasgow, it strikes me that we do not make enough of arriving passengers. For example, there is little marketing for people who arrive at Prestwick who happen to have got on the plane at Frankfurt because the flight is cheap. When they arrive, they could be anywhere, but there is no marketing of the gem that is Galloway, which is only an hour's drive away, and only limited marketing of the fantastic golf courses within 10 miles of Prestwick. We do not make the most of the potential for incoming air travellers.
I must address accessibility. Air travel has become more accessible to a vast proportion of the population, but that should be matched by airport accessibility. That is a major lesson that Prestwick can teach other Scottish airports. Its rail-air link was opened in 1994 at a cost of £2.3 million, of which £1 million was given as Government support. That came about as a result of imaginative marketing by the Strathclyde passenger transport executive and ScotRail. An incredible 30 per cent. of those who arrive at or depart from Glasgow Prestwick do so by rail.
That is a significant lesson that other airports in Glasgow and Edinburgh could learn. Putting party politics to one side and irrespective of the history of the
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past 30 years, is it not a tragedy that Scotland's two major airports do not have a direct rail link? Whatever the rights and wrongs of that situation, it is a missed opportunity. As the statistics from Prestwick show, many people can be tempted into using public transport.
I was delighted to meet people from SPTE in Perth at one of the many packed fringe events at our Scottish party conference and delighted to hear of the executive's plans and of the excellent marketing of its proposals for the Glasgow rail-air link. I travelled on the sleeper last night, having left my car at Glasgow airport, as one has to take a bus to get from Glasgow airport to the city centre.
Mrs. Adams Mrs. Adams: Did not a certain Mr. Beeching close some links to the airports that might have been used?
Mr. Duncan: The hon. Lady's petty party politics never cease to amaze me, or to disappoint me at moments when we could rise above such argument. The hon. Member for Glasgow, Shettleston is correct: whatever the rights and wrongs, and however it has happened, we have reached a stage at which two of Scotland's major airports do not have direct rail-air links. That is a matter of considerable regret.
I should like to consider the part that the Scotland Office can play in adding to Scotland's infrastructure. Air travel is a matter not only for the central belt—it is of significant interest to the peripheral areas of Scotland, but by no means do I say that pejoratively. My constituency is an example, as it is in one of the parts of Scotland that is least accessible by air. Of all hon. Members present, I have one of the longest commutes, even though I do not travel as far north as some.
Although my constituency is an inaccessible corner, we have a significant air asset in our Ministry of Defence airfield. There have been proposals over many years to develop it for civilian air traffic, and those for another airstrip between Perth and Stirling are under consideration. We must soon reach the stage at which the procedure for opening up civilian airfields and MOD airstrips becomes much more straightforward—the rewards for doing so are much more significant.
I am one of the greatest supporters of the MOD, which serves us fantastically well, but it is sitting on a huge resource of airfields, airstrips and structural assets around the UK that could be used for commercial gain and to the great benefit of Scotland's peripheral communities. I urge the Scotland Office to consider carefully how it can work with the MOD to that end. Something is preventing operators from unlocking the potential as easily as they might, and the Scotland Office can help them to do so.
I hope that some productive long-term planning emerges from the consultation, but if air travel changes as much in the next 20 years as it has in the past 10, any planning must be done carefully.
9.58 am
Mrs. Irene Adams: First, I apologise for the fact that I have to leave early, having Chairman's duties in another part of the House. However, I look forward to reading colleagues' contributions and the Minister's reply.

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I, too, congratulate my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) on having secured the debate. He has always taken a keen interest in all transport matters and has a great knowledge of them. I add my sympathies to his for the overnight air crash. However, I cannot entirely agree with some of his comments, particularly those about one large airport for central Scotland. One of the joys of landing at and leaving from Glasgow, Edinburgh and Prestwick is the fact that there is not the hustle and bustle of Heathrow or Gatwick. That is a great attraction of Scottish airports.
I also congratulate my hon. Friend the Member for Ayr (Sandra Osborne), who has played a great part in keeping Prestwick airport open. Unlike my hon. Friend the Member for Glasgow, Shettleston, I think that there is a place for Prestwick and Glasgow airports in the west of Scotland. I recently travelled from Prestwick, and it was a relaxing experience. The airport is quiet, and the flight departed and landed on time.
My hon. Friend the Member for Ayr has played a great part in assisting that airport, but given that Glasgow international airport is entirely within the constituency of Paisley, North, and is arguably the biggest employer in my constituency, I hope that I will be forgiven if I confine my comments to that airport.
I cannot over-emphasise the importance of Glasgow airport to me and to the area that I am fortunate to represent. As I am in fairly regular contact with BAA management and workers' representatives at Glasgow airport, I have been taken aback by recent suggestions, albeit from an apparently anonymous source, that Glasgow airport is in decline. Reports of its decline are not only greatly exaggerated, but completely unfounded.
By way of background information, it might be helpful for hon. Members to know that, during the 1980s and early 1990s, the Paisley post code area lost more than 90 per cent. of its manufacturing jobs. Paisley was a mill town, where some 10,000 women were employed in the manufacture of thread. At the beginning of the 1980s, the mills closed and the jobs virtually disappeared overnight, taking with them the small to medium-sized light engineering factories that served the mills. Unfortunately, that was just the beginning of what almost became death by a thousand cuts as, over the ensuing decade, we lost the heavy engineering jobs that had, in some cases, been part of that constituency not only for decades, but for centuries. Some 7,000 jobs were lost at Babcock in Renfrew and 10,000 at Rolls-Royce in Hillington. All in all, by the mid-1990s, the Paisley area had lost 30,000 manufacturing jobs, which sent unemployment there to a high of 16.9 per cent., with pockets of 40 per cent. male unemployment.
During those dark days, we had a lifeline in Glasgow airport. In the early 1960s, it became apparent that Renfrew airport, which was also in the Paisley, North constituency, would no longer be able to cope with the growth in air traffic. As that site did not prove suitable for expansion, the move was made some three miles west to what was then the royal naval airbase HMS Sanderling at Abbotsinch in Paisley—incidentally, about half a mile from where I was born.
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First, Glasgow airport emerged, and I could not know then how much time I would spend going through that airport. By the early 1990s, some 4 million passengers a year were passing through it. Today, that figure has risen to 7.3 million. In the year to May 2002, there was a 5.7 per cent. growth in traffic, and in May 2002 alone, the figure was 11 per cent. That is hardly the sign of an airport in decline. In fact, those figures come when there is a UK downturn in passenger traffic. Glasgow is outperforming England's key airports.
John Robertson: Does my hon. Friend agree that the loss or downgrading of such an airport would decimate not only her constituency, but the whole Greater Glasgow area?
Mrs. Adams: I do indeed agree with that, but given the figures that I have just quoted and what I am about to say, I do not think that it will happen.
Mrs. Jacqui Lait: I sympathise with the hon. Lady's comments because I, too, was born close to what is now Paisley airport. I am aware, however, from flying up and down from London City airport, that the Glasgow service has been withdrawn. Given her comments about how busy Heathrow and Gatwick are, with which I completely agree, I wonder how often she and her colleagues from the west coast travelled through London City airport.
Mrs. Adams: Indeed, I did travel through London City airport, and many of my colleagues joined me on those flights. Unfortunately, it is true that business flights to Glasgow are not as frequent as those to Edinburgh. Business accounts for some 80 per cent. of Edinburgh's traffic, whereas the figure is only 50 per cent. for Glasgow. The excuse given is that there are not enough daily travellers on such flights. Even if my colleagues travelled all or most of the time by air, flights on Monday afternoons and Thursday evenings would not be enough to maintain a link to Glasgow.
Regional airports such as Manchester, Birmingham and Newcastle are being out-performed by Glasgow. I should like to thank everyone concerned with the operation in Glasgow, from BAA management to ancillary staff; they deserve a huge pat on the back for a job well done. In the past year, they have literally flown in the face of adversity, and won. I firmly believe that BAA has shown its commitment to Glasgow airport by investing some £200 million since 1990, and only two weeks ago, at a cost of £9 million, it opened a new car park, which arrives ahead of demand and shows great confidence in a secure future for the airport.
Glasgow is Scotland's biggest and busiest airport, with in excess of 200 flights every day to and from 80 destinations. It is Scotland's No. 1 charter airport with flights throughout the year. It is the only airport in Scotland to have direct transatlantic flights from Continental Airways, American Airlines and Air Canada; Icelandair has flights to the United States with a stop-over in Reykjavik. At the budget end of the market, 50 no-frills flights operate out of Glasgow daily. The Secretary of State has taken great interest in air traffic and has worked hard to attract direct flights into Glasgow and the rest of Scotland's airports.

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The greatest boost to Glasgow airport will be the completion of the M74 motorway. I agree with my hon. Friend the Member for Glasgow, Shettleston that one of the biggest blights on Glasgow's horizon is the difficulty in getting through the city and over the Kingston bridge at peak hours. That has proved detrimental to Glasgow, so the completion of the road link will improve figures for the city.
The Government have supported airports and businesses in Scotland and employment for my constituents. The grim figure that I spoke of earlier has, I am glad to say, fallen to less than 4 per cent. My firm belief is that Glasgow airport is flourishing. Information, or misinformation, from anonymous sources must be consigned to the dustbin lest it becomes a self-fulfilling prophecy, which is always a danger. As long as we stick to the facts, the only way for air traffic in Glasgow to go is up.
Mr. Deputy Speaker (Sir Nicholas Winterton): The winding-up speeches will begin at 10.30 am. Three hon. Members still wish to speak and, if they keep their remarks to about seven minutes, they will all have time.
10.8 am
Angus Robertson: I begin by commending the hon. Member for Glasgow, Shettleston (Mr. Marshall) for securing the debate, and I associate myself with his comments about the tragedy in Öberlingen. I also welcome the Minister to this, her first Adjournment debate in her new role. I wish her success.
It is clear to all observers that aviation is vital to Scotland. For a nation that is geographically distant from many of its markets, and which contains numerous communities that are distant and isolated from the country's social and economic centres, affordable and accessible air links are a necessity, not a luxury. Aviation is not a luxury for the rich but vital both domestically and internationally. It is the external method by which we can make our country easily and cheaply accessible to visiting tourists.
I shall give examples of conversations that I have recently had with travellers who share the regular flight that I take from Inverness airport to Gatwick. Other Members from the north of Scotland will be aware of such comments, which are oft repeated. One conversation that I had was with a regular business traveller who works in the fabrication industry. He is one of the many who, no longer able to work in fabrication in the north of Scotland, have to commute as far as Sakhalin island on the east coast of the Russian Federation. The frequency of flights from Inverness—and, I suspect, from other airports in Scotland—is not everything that he, or his many colleagues who take regular business flights, would wish.
A second group of travellers that I meet regularly in the lounge at Inverness airport is service men and women, thousands of whom serve in my constituency of Moray at RAF Lossiemouth or RAF Kinloss. The overwhelming majority come from England, and many need, in urgent circumstances, to fly down to be with family members. I mention that because some Members might be unaware of how much it costs to fly from
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Inverness to London. I checked this morning with the travel office how much my flight will cost this evening, as I have to return on urgent constituency business. A return flight costs £379. A return flight to New York with British Airways, the same airline, is £248. It is cheaper to fly to New York than to fly from one city in the UK to another.
Another example of the experience of someone in the north of Scotland is that of a local hotelier. He is very proactive, flying to the United States and other markets to try to bring people to Scotland. He quite rightly complains that the lack of direct international flights to the majority of our airports is a disincentive to tourists who would like to come and enjoy what Scotland has to offer. Those are the complaints of ordinary business people, travellers and people involved in tourism. They are not the complaints of one political party or another.
I should like to associate myself with the comments made by the hon. Member for Glasgow, Shettleston on the monopoly status of the main airports in Scotland. That is an issue because 85 per cent. of flights within the UK go through BAA airports, and 87 per cent. of flights within Scotland go through BAA airports there. There is clearly an incentive for BAA, in conjunction with the airlines, to route flights through the major London airports. That is a disincentive to establishing direct flights to and from Scottish airports, which means that many people coming to our country or leaving it, for whatever reason, have to be funnelled through airports in and around London. That cannot be a good thing.
Other small countries do not find themselves in that situation. The hon. Gentleman suggested that we might never be able to compete with some other airports. I am not sure why we cannot compete, for example, with Denmark—an independent country with 5 million people, peripheral to the European continent, with a vastly larger choice of air links. Similarly, Finland, also a small independent country of 5 million people on the periphery of northern Europe, seems to do far better than Scotland. BAA has a budget of £12 million for route development at the moment. How will that help to attract people to Scotland, compared with the £3.8 billion investment that we are likely to see at Heathrow 5? The hon. Gentleman was absolutely right to highlight the monopoly. It must be looked at. We need to examine imaginatively the idea of a route development fund for marketing.
I have a number of specific issues to raise. One, concerning the flight from Inverness to Gatwick and the application for a public service obligation, is particularly important to the north of Scotland. The application for a PSO was made last autumn. It has cross-party support and the support of the overwhelming majority of public bodies in the north of Scotland. Members representing all parties and I have repeatedly asked for information about when the announcement will be made. I note with interest that there is no mention of the PSO on the Scotland Office website. Will the Minister tell us in her winding-up speech when the announcement will be made, whether there have been objections from British Airways and the BAA to a PSO and what response the Government are making?
I should be interested to hear the Minister talk about the proposal that the Ministry of Defence should widen the inquiry by Strike Command into the use of RAF

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Kinross as an alternative to Inverness airport if the discussions between Ryanair and Highlands and Islands Airport Ltd. are successful. I wrote to Ryanair and the MOD at the same time, and I am glad that Ryanair was able to write back to me; unfortunately the MOD has been unable to do so. Will the Minister tell me the exact view of the Scotland Office and the MOD on the proposal?
Lastly, the long title of today's debate refers to the role of the Scotland Office, which is a mystery to me because I am unsure what role it plays. We have had no word on the PSO, which is probably the biggest current issue in Scottish aviation, and we have had no confirmation of the situation from the MOD. While we are on the subject of launching reviews and new papers, a press release on 12 December 2000 stated that the Government were to issue a consultation document on UK air services for the next 30 years, which is a subject that we discussed earlier. How many reviews will it take before the issue is taken as seriously as it should be? I should be interested to know what role the Scotland Office plays in aviation in Scotland.
10.16 am
John Robertson: I begin by congratulating my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) on securing the debate. I add my condolences to those families who suffered a great loss earlier today.
It will be no surprise that I am going to concentrate on the Glasgow area and the central belt of Scotland. Nearly one quarter of Scotland's population lives in the Greater Glasgow area, and Glasgow is still the main employment area in Scotland. It has been said of Scotland's success, or failure, that if Glasgow fails, Scotland fails.
The world is getting smaller as transportation becomes quicker. A first-class gateway is essential to the future prosperity of not only Glasgow but the whole country. Airports are only as good as their accessibility, and concern has been voiced regularly, especially in the central belt, about accessibility to Glasgow and Edinburgh airports. As roads become more congested, transport becomes more important for the continued survival of Scottish airports. Cost, which is the primary factor in choosing an airport, is another area that needs to be looked in relation to attracting passengers.
As my hon. Friend said, the M8 link has become congested particularly around the Kingston bridge, which is now one of the busiest bridges in the world. The M74 extension to the south side of the city was started late and is long overdue. Road access is not, however, the only transport that is needed. We need a rail link from the city centre to the airport not only in Glasgow but in Edinburgh if we are to compete with other main airports in Britain and to promote services in Scotland. There are problems because rivalry between Glasgow city council and Renfrewshire council over where the link should go has clouded the issue. One solution would be to put the councils in a padded room, throw away the key and not let them out until they reach a common-sense compromise.
There is some good news. I want to congratulate Strathclyde passenger transport authority's decision to commit £500,000 to preparatory work for those rail
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links, but that must be done in agreement with all those concerned. The controversy surrounding the rail links to Glasgow and Edinburgh airports must be overcome to help both airports to realise their ambitions, which are to be the best in their field. There is room for both airports, and given a level playing field both will continue to grow. To that end, I welcome both the cross-party support and the cross-Parliament support that we are receiving for both airports. I also congratulate the Evening Times and The Herald on their help and support for Glasgow airport. They have both done excellent work in informing the public of the present situation and the need for a gateway airport in the west of Scotland, while still supporting Edinburgh in its aspirations for its airport.
I raised with BAA Scottish Airports and BAA plc the problems of pitting Glasgow airport against Edinburgh airport. Although I have been more than satisfied with the reply from Scottish Airports, I am somewhat disappointed by the refusal of BAA plc to speak to the Glasgow group of MPs of which I am secretary. Although I am happy with Scottish Airports' insistence that it supports both airports, I am unhappy that landing costs in Glasgow exceed those in English airports. I have not received a satisfactory answer as to why that is. I can understand why Scottish Airports may not want to answer the question, but the silence from BAA plc is deafening.
On 1 May I asked the Prime Minister whether he would ensure that airport costs were the same throughout the country, and for his assurance that the links to Glasgow and Edinburgh airports, which are vital to Scotland's growth, will be started and completed quickly. In his answer, he mentioned the aviation White Paper, which he said would be published shortly, and he went on to say:
"We are urgently looking at the matter with not just the British Airports Authority, but the Scottish Executive and the Strategic Rail Authority, and I hope that we will have some news to announce shortly."—[Official Report,1 May 2002; Vol. 384, c. 939.]
Will the Minister enlighten us as to when the White Paper will be published, and tell me when those announcements will take place?
I sent the letter to the then Secretary of State for Transport, Local Government and the Regions and in his reply he also mentioned the White Paper that was about to be published, and the work with the Scottish Executive and the Scotland Office. However, there was nothing tangible about what was actually being done. Will the Minister tell us what consultation she has had with the Secretary of State for Transport and the Scottish Executive?
I feel that there is a great deal to discuss concerning air services for holidaymakers. Why should holidaymakers in Scotland pay more than those in England? In most cases, the difference in distance to the resort that they are going to is nil or less, so why the extra cost? The holiday firms are ripping off the people of Scotland. Their answer that the market can support the cost is no excuse for ripping people off and taking money from the holidaymakers of Scotland. What incentive is there for people south of the border to come to Glasgow or Edinburgh airports now that millions of pounds have been spent to upgrade transport to both airports if it costs more once they are there? There is no

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incentive for people from the north of England, who would probably find it a lot easier to get to Glasgow or Edinburgh than to airports in England.
We need the incentive of an even playing field for the people of Scotland, and not what we have at present. Scotland is one of the most beautiful countries in the world—in my opinion it is the most beautiful. It is certainly the best country in the world, but we need to improve our transport infrastructure to a level that others already have. We only want a fair deal. And if it could be arranged, could we also have some better weather?
10.23 am
John Barrett: I congratulate the hon. Member for Glasgow, Shettleston (Mr. Marshall) on securing the debate, and the Minister on her new appointment, on what is a sad day for the airline industry.
Today's debate allows us to focus on two important issues: air services in Scotland and the role of the Scotland Office. I disagree with the plan of the hon. Member for Glasgow, Shettleston for one central Scotland airport. He did not explain fully whether that would involve the closure or reduction in importance of any of the other airports. With Edinburgh airport in my constituency, I should perhaps declare an interest—it is Scotland's fastest growing airport. In May, the number of passengers passing through Edinburgh soared by 16.2 per cent. to 6.42 million, just behind Glasgow at 7.4 million. In the same year, Heathrow increased its numbers by just 1.4 per cent. In what has been described as the toughest decade for the industry, it has had the toughest year following 11 September.
The Scotland Office could assist in a number of ways to promote air services from Scotland to the rest of the United Kingdom and abroad, and to restore confidence in the industry. It could promote Scotland so that visitors and businesses want to go to Scotland; it could ensure that the good track record of safety at Scottish airports and in the air is not compromised; and it could work with the Scottish Executive to ensure that links exist on the ground when passengers land in Scotland. Visitors to Edinburgh airport who experienced the taxi wars and the shambles of the system that followed did not receive the welcome that a capital city should provide.
Reference has been made to rapid links to city centres. They are vital and we must keep up the pressure to ensure that they are delivered. Whether that is the responsibility of the Scottish Parliament or of local authorities, people must work together or there will be a price to pay. That price will be businesses choosing to go elsewhere or falling tourist numbers. Businesses and tourists have a choice. No one is forced to go to Scotland, although it is the most beautiful country and people should want to go to it. However, we must have the necessary links and we must compete and win.
Edinburgh provides an example of the potential close to airports—the Royal Bank of Scotland is considering building its new world headquarters there. It would employ 3,000 people, but the bank is being tempted by offers from elsewhere in the United Kingdom where the
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infrastructure is in place and offices are ready. It would be a disaster if Scotland did not see off threats from elsewhere, and the possibility of flying more often and more cheaply to Scotland would encourage others to join the Royal Bank and to succeed in Scotland.
One reason for the relatively good percentage increase in the figures for those flying in and out of Scotland is that we have relatively few transatlantic flights. Because of that, we have avoided the recent downturn, but we are not best placed to benefit from any recovery in international flight numbers. The Secretary of State has done good work to help to promote Scotland abroad. She has flown to Malaysia and to China, and the Advocate-General has flown to Canada, but where did they fly from? Probably the south of England.
Promoting flights from Scotland makes sense in several ways. It is quicker and, therefore, more attractive. It makes no sense to fly to the USA via Schiphol and to fly over Scotland twice. It would be more environmentally friendly, but, as the hon. Member for Moray (Angus Robertson) said, it can be cheaper to fly to New York than to Inverness. It would take the pressure off the many over-heated airports in the south, which would be popular around airports that are bursting at the seams and with holidaymakers who must spend as much time on the ground travelling to airports such as Manchester as they do travelling to their two weeks in the sun.
I hope that the Minister comments on the concerns that I and other hon. Members have raised about the £7 security charge levied by many tour companies, as airport baggage handling companies charge about 20p a bag. Is the charge necessary, is it having an effect on the industry and where does the money go?
Reference has been made to surcharges on Scots flying abroad on holiday flights. Low-cost carriers advertise very cheap flights, as the hon. Member for Glasgow, Shettleston said, but it costs more to get from the train station at Gatwick to central London, for example, than to fly from Edinburgh to Gatwick. That must be more fully explained so that customers are not left in the dark.
In December last year, the Secretary of State hosted an aviation summit in Edinburgh and we look forward to positive results from that. I also look forward to hearing from the Minister exactly what those results are. We have direct links to about 15 countries, and we must push for more. There is a demand for more direct flights in Scotland for tourists and the business sector, and we must compete with those who can provide the flights and quick links at the end of flights. We must compete globally and we must encourage inward investment. There have been some positive moves. BA is heading in the right direction with its discounts on landing charges, and its plans to reduce airport charges and to give marketing support to airlines using Scottish airports. That is welcome, but there has been criticism of landing charges in Scotland.
Another issue, which I understand the Scottish National party is also pursuing, is the cost to the public purse of the tartan day trip to New York. No doubt that visit, which included Members of the Scottish Parliament from all parties, would have cost less had there been more flights from Edinburgh to New York
10.29 am
John Thurso: I begin by echoing the sentiments expressed by many Members about the tragedy that occurred yesterday. I add my condolences to the bereaved.
I congratulate the hon. Member for Glasgow, Shettleston (Mr. Marshall) on securing the debate. It has been stimulating and there has been a remarkable degree of cross-party consensus about the problems, even if there has been divergence as to what should be done about them. We await the forthcoming report, but I hope that the Minister ensures that remarks made in the debate are taken into account.
All transport is vital, particularly for business travel, and transport is the oil that makes the business engine turn, but transport issues are nowhere more important than in the outlying areas of the country. Some hon. Members have been somewhat parochial in their remarks, and I shall be exactly the same. I begin not quite in my constituency, but in Inverness.
It is interesting to note the improvements in the economy of the highlands—and particularly in the Inverness drive-to-work area—that have taken place in the past decade. Those improvements have been hugely facilitated by, and are mirrored in, the number of air passengers coming to Inverness airport. For example, in 1991, 199,000 air travellers came to Inverness, but that figure had risen to 332,000 by 1999. Those numbers mirror the expansion in business as well as the improvements in air links.
As the hon. Member for Moray (Angus Robertson) said, there is considerable worry about the frequency and the availability of flights. We went through a period in the mid-1990s when flights were moved from the Inverness-Heathrow link to the Inverness-Gatwick link. There was a tremendous campaign to save the Heathrow link, but it is impossible to say how many more overseas visitors would have come north because of the simplicity of transit through Heathrow had it been maintained. They may have stayed in London and not bothered to come to Inverness, but it is certain that the removal or the substantial reduction of the Gatwick link would have a very negative effect on business and tourism in the highlands and the Inverness area.
In that regard, I associate myself with the hon. Gentleman's questions on the public service obligation. It is incredible that the Government cannot secure such a vital link and ensure that it continues at least at the current level. Expansion may come as a result of market forces. On the public service obligation, I should also point out that the links from the islands to central Scotland are vital. The Government should properly consider all such issues.
Nowhere are air links more important than in the tourism industry. The United Kingdom tourism industry delivers about 7 per cent. of gross domestic product and is responsible for approximately 7 per cent. of jobs. The direct spend by overseas visitors only is estimated by the Department for Culture, Media and Sport to be about £13 billion. In 2000, there were 17,829,000 overseas visits by air to the United Kingdom.
Tourism is even more important for the highlands, as it accounts for about 20 per cent. of its GDP and about 25 per cent. of jobs. It is an absolutely critical industry and one that has been growing and enjoying
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considerable success. Against that, we must balance the fact that 75 per cent. of overseas visitors use Heathrow as their gateway airport. In 2000, all the Scottish airports that have been mentioned received only 2.6 per cent. of overseas visitors, which shows what a mountain that we have to climb.
VisitScotland and the British Tourist Authority have two sales to make when they market the UK to the overseas visitor: they must encourage people to come to the United Kingdom and then, having got here, to come up to Scotland. Therefore, the availability of flights is crucial in helping to drive the future of our tourism industry in Scotland.
In my career in the industry, I have met many visitors to the UK who simply never considered the possibility of visiting Scotland because they wanted to take one flight from America, the far east or Europe, arrive in the UK and then enjoy their holiday. They did not want to go through the difficulty of taking a second flight. For that reason, I was pleased when the hon. Member for Glasgow, Shettleston mentioned Prestwick. I had a small part to play in the current ownership of Prestwick airport. In 2000, I took part in a mission to Pierce airport, which is just outside Boston, in conjunction with the people who are now the owners to persuade them to allow an air link to operate from Prestwick to that airport. I hasten to add that I received no financial reward for that, but they did put me up in a very nice hotel.
The hon. Gentleman also mentioned the three main airports, and I fully understand why he chose Glasgow, Edinburgh and Prestwick. However, if any of my hon. Friends from the Aberdeen area were here, they would want Aberdeen airport to be included, as it provides a growing and important air link with much of Europe. He mentioned how much we are beginning to look east rather than west, and the importance of Aberdeen airport's links with the continent will grow significantly in future years.
I shall now be completely parochial and mention one of the smallest airports in the United Kingdom—Wick, which is in my constituency. Unfortunately, the story at that airport has not been as good as elsewhere. In fact, over the past decade, the number of air passengers at Wick has dropped from some 32,000 to 22,000, not only because of the improvements at Inverness, but because of the many difficulties that Wick continues to face. However, there is a note of success in general aviation at Wick.
We should not forget the possibilities that general aviation offers. Mr. Andrew Bruce, who runs Far North Aviation in Wick, has had tremendous success in persuading people who want to fly to America in small planes to use Wick airport as the starting point for their voyage. As result, there were 600 air movements last year, and, according to him, 60 per cent. of those people stayed in Wick. However, that economic benefit is threatened by the fact that the cross runway, which is vital in our very windy climate, is no longer available to passenger aircraft other than those involved in general aviation, and £1 million is needed to repair it. Highlands and Islands Airports Ltd. has provided only £300,000, and I hope that the Minister will bring some weight to bear so that the cross runway can be made available, as that would be a tremendous benefit to Wick.

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Finally, I wish to make a rather larger point about integrated transport. Notwithstanding the comments made by other hon. Members, the hon. Member for Glasgow, Shettleston makes a valid point in saying that one airport in central Scotland, serviced by an extremely good rail link, is the ideal way forward. Of course, an extremely good rail link is the key. Looking 20, 30 or 40 years into the future, thinking strategically and considering the environmental damage done by air transport, we must reserve it for intercontinental and island-to-mainland flights. The UK mainland needs a good, fast bullet-type train, which is why I question the future of the budget airlines.
The best way to judge a company is not by its market capitalisation, but by its business model, especially if one considers Enron, WorldCom and various others. Given the way that environmental issues are going, I wonder whether the budget airline business model will be sustainable in 10 years. I believe that the people involved are great entrepreneurs, so they will surmount the problem and continue to offer us good value, but it will be a different value in future.
Many issues have been raised, and I hope that the Minister gives answers on some of them. Also, I hope that she takes away the excellent contributions and points that have been made, and sees that the proper authorities in Westminster and Holyrood understand them.
10.39 am
Mrs. Jacqui Lait: I add my condolences to the families of those who have been affected by the tragic crash in Germany. I also congratulate the hon. Member for Glasgow, Shettleston (Mr. Marshall) on securing the debate. Although it is not the first time that we have crossed swords, I, too, welcome the new Scotland Office Minister to her first Adjournment debate.
I was interested to read the title of the debate in the Order Paper:
"Role of the Scotland Office in promoting air services to and from Scotland".
More than anything else, we have seen a concentration on a plea that goes back at least 40 years. When I worked in the Scottish Office, a major inquiry into the role of an airport in the central belt was defeated largely because of fog. I know that technology has moved on, but I have travelled from Heathrow, Gatwick and London City in the autumn, and on many occasions the flights were cancelled or delayed because of fog in Scotland. Those airports are relatively fog free, although the central belt is still as foggy as ever.
Despite improved technology, with the best will in the world, the suggestion made by the hon. Member for Glasgow, Shettleston—that there should be a mega airport in the central belt—would probably not work on a technical basis. I am sorry if I have completely destroyed his argument, but even with global warming we have not seen significant changes in the fogginess of central Scotland.
I am most interested in the role of the Scotland Office. When I first read the title of the debate in the Order Paper, I thought that the hon. Gentleman would talk
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about the role of the Scottish Executive, although the role of the Scotland Office is much more intriguing Several contributors have asked questions of the Minister that I sincerely hope receive serious answers Most of us are fairly frustrated when we ask questions of Scotland Office Ministers, because the standard answer is that they have regular meetings with members of the Scottish Executive, the Treasury, the Department for Work and Pensions or whichever Department is relevant to the subject under debate. We never receive information as to the content of the meetings, what the representations contain and how effective those consultations are. I hope that the Minister, in her first contribution to an Adjournment debate in this role, affords us some enlightenment on the role of the Scotland Office on the issue.
The hon. Member for Moray (Angus Robertson) first brought up, thank goodness, the issue of Inverness airport. At present, that airport is entirely subsidised. It is owned by Scottish Executive Ministers and it has put in a bid for a public service obligation order.
John Thurso: I believe that Inverness airport itself makes a profit. It is Highlands and Islands Airports Ltd. that is subsidised.
Mrs. Lait: The hon. Gentleman is right, and I apologise for that error. There is a need for a PSO because of the subsidies, and it is the existence of the subsidies that causes difficulties in negotiations with Ryanair. Having been briefed by the managing director of the company before the negotiations with Ryanair last week, I am glad to see that they are continuing, as that means that opportunities to travel will be afforded to people in the north of Scotland.
I am disappointed that the hon. Member for Glasgow, Shettleston said that people should stay in Scotland, implying that they should not take advantage of low-cost airlines and the expansion in air travel that people in the rest of the UK and throughout the world are enjoying. Although. I agree that Scotland is a beautiful country, there should be every opportunity for people to travel, and it would be advantageous to everyone in the north of Scotland to be able to avail themselves of the services of airlines such as Ryanair, so I welcome the fact that negotiations are continuing in Scotland. It would be helpful, however, if the Minister told us what representations she has made, if any, either to the Scottish Executive or to the Department of Trade and Industry, on the whole issue of the PSO and on trying to change the structure of HIAL, so that Ryanair can negotiate a sensible deal with the company.
It would also be useful if the Minister untangled the role of the Scotland Office for us and explained what contribution it will make to the Scottish air transport consultation paper to which hon. Members have referred and which is to be published this summer. How will the feedback from that exercise be fed into the UK air transport White Paper, which I understand is due at the end of the year, and what role will the Scotland Office have in ensuring that the DTI takes the results of that consultation into account? Queries often arise about the role of the Scotland Office, and this is an opportunity for her, in her first Adjournment debate, to enlighten us on the positive role that it could play.

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The Minister could also clarify what role the Scotland Office has played in the debate on airport security charges. Apart from the fact that BAA or the security companies are benefiting from the income from all the pairs of nail and needlework scissors that they claim from me every time I go through the security system, it would be enlightening to know what discussions she has had with the DTI on the Scotland Office's role in ensuring that Scottish airports are as competitive as possible.
On BAA's alleged monopoly in Scotland, I understand that BAA spent about £500 million on the infrastructure of Scottish airports, which is more than the profits it gains from them, so it is committed to delivering good services to those who use Scottish airports. Does the Scotland Office have any input to any discussions that the DTI may be having with BAA about any monopoly issues raised by hon. Members?
This is an opportunity for the Minister to enlighten us on the practical work of the Scotland Office in representing the views of people in Scotland to UK Departments. It is also an opportunity for her to enlighten us on the role of the Scotland Office vis-a-vis the Scottish Executive, who have internal responsibilities for transport in Scotland.
I am grateful to the hon. Member for Glasgow, Shettleston for giving us the opportunity to try to glean further information from the Minister on the role of the Scotland Office, because we are concerned that there is little evidence that it does anything at all.
10.49 am
The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): First, I offer my congratulations on your new honour, Mr. Deputy Speaker. I feel as though I should curtsey, as well as showing you the usual due deference.
I associate myself with the comments made about yesterday's air crash. Those of us who remember Lockerbie feel for the inhabitants of that village in Germany, who did not know what was coming out of the sky. When such things happen, those of us who travel regularly by air say to ourselves, "There but for the grace of God go I."
I should inform the hon. Member for Beckenham (Mrs. Lait) that I have made it my life's mission to enlighten the Conservative party on any subject.
Mr. Peter Duncan: Not on the Scotland Office.
Mrs. McGuire: Usually on everything. In a previous existence, the hon. Lady compiled a review on Scottish airports in the fog. I assure her that the fog lifted on 1 May 1997 and that the sky got even brighter on 7 June 2001.
I congratulate my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) on encouraging us all to be in the Chamber for half-past 9 to discuss this important issue. I congratulate, too, the hon. Members who have contributed to the debate. Remarkable woman though I am, I doubt that I shall be able to answer every question specifically, given that my hon. Friend asked at least 12 and other hon. Members added their tuppence-worth. If hon. Members will allow me to
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do a tour of the points that have been raised, I shall deal with anything left over outwith the confines of the debate.
There are areas of agreement and we all agree on the importance of air services, not only to the Scottish economy, but to the United Kingdom economy as a whole. It is hard for us to imagine life without air travel, but I should point out to my hon. Friend that when I first flew out of Abbotsinch airport in 1957 as a wee lassie, I was given a leather helmet and I was told that my parachute was under my seat. Even then, however, I was able to fly from Glasgow to Hamburg. I was fair taken with the idea of being away up a'ky in a plane—I shall translate that later for Hansard.
The 1998 White Papers, "A New Deal for Transport" and "Travel Choices for Scotland" emphasised our intention to develop a strategy for UK airports and air services by looking 30 years into the future. My hon. Friend the Member for Paisley, North (Mrs. Adams) made a point about Beeching. Had we looked 30 years ahead in the 1960s, we might not have suffered such difficulties in our railway system, which we are now forced to review and redevelop.
Our strategy will be set out in a White Paper, which we hope to publish at the turn of the year. In that respect, the hon. Member for Beckenham is correct. The air transport White Paper will consider the effects of aviation, both on passengers and on those whose lives are affected by airports and aviation—the industry provides some 15,000 jobs in the Scottish economy. We must examine the effects of aviation on the economy, the environment and regional economic development, and consider how aviation can integrate with surface modes of transport. That process requires careful in-depth analysis.
In Scotland, the necessary work was undertaken jointly with the Scottish Office and, subsequently, with the Scottish Executive and their own agencies, including the Scotland Office. Discussions are also being held with airports, airlines and other key stakeholders. The intention is to look forward over 30 years as far as possible and to forecast air passenger and freight traffic in a wide range of different growth and policy scenarios. We must examine the infrastructure required to address those demand forecasts and assess the economic, environmental, social and safety implications of doing so. A UK consultation paper was published in December 2000, and its results have been fed into the development process for the White Paper.
As an aside, although the point is relevant, my hon. Friend the Member for Glasgow, Shettleston mentioned the ownership of Glasgow and Edinburgh airports. Glasgow city council has referred the matter to the Office of Fair Trading, and the Director General of Fair Trading will now deal with it. Furthermore, the consultation documents that are to be published later this year will examine all the issues relevant to the development of Scotland's airports, which obviously include ownership.
I hope that I can assist the hon. Member for Beckenham by saying that the regional consultation documents are the next stage in the process. A series of

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documents will shortly be published simultaneously for each of the UK's main nations and regions. That includes a separate Scottish document, which the Government and the Scottish Executive have jointly developed and will jointly publish. I hope that we all agree that that is a sensible approach, given that responsibility for aviation policy and security is a reserved function, while responsibility for planning and economic development is devolved under the Scotland Act 1998.
The consultation documents will examine several issues, including regional access in Scotland and to and from the main international and national hubs, the scope for developing more services from Scotland, how to manage and develop airport capacity and the impact of the growth in air travel on our economy. I can give the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) an assurance that they will also examine opening up military airfields—an issue that the MOD is seriously considering.
The development of air services is too important to leave it solely to the usual suspects—representative bodies and pressure groups—to comment on the issue. This is a once-in-a-generation opportunity to engage in serious debate on the development of a major economic, social and environmental factor for Scotland. The Scotland Office has been closely involved in the development of the Scottish consultation document and in formulating wider UK policy, and that involvement will carry on into the management of the consultation process. Working jointly with the Scottish Executive and the Department for Transport, we will hold consultation events in Scotland, including full conferences.
Let me deal quickly with direct flights and the Scotland Office's specific role in the issue. As my hon. Friend the Member for Glasgow, Shettleston and, I am pleased to say, the hon. Member for Edinburgh, West (John Barrett) noted, my right hon. Friend the Secretary of State has been involved in promoting direct air
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services from Scotland. [Interruption.]It is nice to get a compliment from Opposition Members, and I want to pay true tribute to them.
Mr. Duncan: They are not in the Opposition.
Mrs. McGuire: That is a cheap shot.
The period since the tragic events of 11 September in New York and Washington has been difficult for the airline industry, and some companies have undergone a retrenchment, which has obviously affected Scotland. Progress is still being made, however, and we should not underestimate the advances that Scottish air links have made.
Services, including charter services, now fly direct to 33 destinations. On indirect services, I often wonder why people complain about making a single stop, when such things are taken as a natural part of visiting foreign countries and moving around them. Scotland's airports run practical services, with a single stop, to more than 100 destinations in more than 25 countries.
At this point, I should mention the Friends of Scotland initiative, which my right hon. Friend the Secretary of State has promoted. People can fly from Scottish airports to Reykjavik, Toronto, New York, Paris, Copenhagen and Bergen. They can also fly to Brussels-Charleroi from Prestwick, and I pay tribute to my hon. Friend the Member for Ayr (Sandra Osborne) in that regard. I assure my hon. Friend the Member for Glasgow, Shettleston that more tourists use that route to come to Scotland than to leave it.
In my final 30 seconds or so, I shall deal with one or two other issues. I sometimes think that we talk down the advantages of Scotland. [Interruption.]I will deal with the PSO and the high cost. One of the SNP's great attributes is that it never compares like with like. Had the hon. Member for Moray (Angus Robertson) asked the travel office about the cost of a business-class ticket from Scotland to New York, he would have been told that it is £3,900, not £254. That is the figure that he should have compared with the Inverness fare.
There are issues related to Inverness that I do not have time to discuss, but I assure hon. Members that the Government and Scottish Executive Ministers are conferring on the matter as we speak. There are many opportunities out there, and the Scotland Office will continue to work in the Government and with others to ensure that they are seized for the benefit of the whole of Scotland.

Maritime Pollution
11 am
Mr. Alistair Carmichael: It seems just hours—in fact it is a week—since we were all last gathered here for a debate, which my hon. Friend the Member for St. Ives (Andrew George) then observed was the first time that we had had an opportunity to discuss merchant shipping since 15 July 1998. It was therefore a particular pleasure for me to find that I had been successful in the ballot and secured this debate. I hope that a weekly debate on shipping matters will now be a feature of Westminster Hall. No doubt such debates will be answered by the Minister with special responsibility for Westminster Hall, the Parliamentary Under-Secretary of State for Transport. I am pleased to see him in his place today.
This week's debate is something of a natural progression from last week's very useful debate. There is a close relationship between issues of safety and of pollution. Safe vessels that are well staffed with well-trained personnel never cause pollution; vessels that cut corners and do not adhere to proper standards tend to be responsible. We cannot ignore the fact that the bulk of such vessels are sailing under flags of convenience, so there is a great deal of overlap between last week's debate and this one.
It is my privilege to represent a constituency that relies greatly upon having, in reality and in perception, a very clean maritime environment. In Shetland in particular, the local economy relies tremendously on fishing and fish farming of all sorts. Increasingly, throughout Orkney and Shetland, there is a reliance on tourism, which includes marine tourism operations such as the excellent Bressaboats, and a number of diving companies in the Scapa Flow in Orkney.
One of the truly remarkable achievements of the oil and gas industry in Shetland and in Orkney is the way in which it has minimised its environmental impact on the region. There have been some significant departures from that in the past, but none of them have been related to the operation of Sullom Voe or Flotta or any related operations. Many of my constituents have a history of working in the merchant navy and some of the older ones worked in the south Atlantic whaling industry. They look with dismay at the state of the merchant fleet today.
Few constituencies know better than mine what can happen when it all goes wrong. It all went wrong for Shetland about nine and a half years ago, on 5 January 1993, when the motor tanker Braer ran aground off the south end of the island. It is a matter of record that the Braer was carrying 84,700 tonnes of Norwegian Gullfax crude oil. The tanker ran aground and all that oil was vented into the sea and blown on to the land. The extent of the devastation was unimaginable. Constituents described it to me as "apocalyptic". From all that I have heard and from the pictures that I have seen, that is no overstatement.
That is one of the most extreme examples of pollution from ships at sea in recent times, and, regrettably, a few issues arising from it still need to be resolved. The first will make the Minister's heart sink, and that is the position with asbestos roof claims in the south end of Shetland, which I last raised in the House on 24 May.
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The Minister was very kind and prompt in answering by letter the points that I raised during that debate. I shall not repeat all the details. In essence, claimants for damage to asbestos roofs in the south of Shetland took an unsuccessful action against the international oil pollution compensation fund. I have previously asked the Minister whether he will intervene with the IOPC to obtain a copy of a report that my constituents still believe was crucial to their claim, but which was denied to them in the course of litigation. They now feel that, the litigation having been dealt with, the report should be made available both on moral grounds and on those of openness and accountability. The Minister wrote to me on 19 June, stating:
"I do not think that it would reflect well on the UK if we sought to press the Fund Director, its Executive Committee or other Member States on this issue"—
that is, the release of the report. The Minister continued:
"We would be seeking to set a very poor precedent for the future administration of the Fund. It is not an approach we could support if the same circumstances applied elsewhere."
I find that response disappointing and I hope that the Minister will be prepared to revisit it. The question of compensation and litigation having been resolved, matters have moved on, and we are now considering rather more than asbestos roofs in the south end of Shetland. This is about how the international oil pollution compensation fund is seen to conduct its business, and the confidence that hon. Members can have about how their constituents would be treated if, heaven forbid, anything like this should happen in their constituencies. I would hope that hon. Members could feel that they would be treated fairly and openly, but that is not how my constituents feel that they have been treated. The IOPC might tell the Government that it will not release the report, but I ask the Minister to accept that there is a moral imperative involved. Even if his efforts are ultimately unsuccessful, we should press the IOPC, which is a quasi-public body with much appreciated Government input, to conduct its business in a way that is seen to be fair, open and transparent.
I am delighted that the Minister is to visit Shetland in August in response to a longstanding invitation. I have no doubt that he will enjoy a fine stay and what I have described in the past as notorious Shetland hospitality—with his Shetland roots, he has the genetics to survive it. Despite his busy schedule during that visit, will he consider meeting the asbestos roof claimants, even for half an hour? Such a gesture would be greatly appreciated by all in the islands.
The inquiry into the grounding of the Braer concluded that two factors were involved. The first was bad weather and the second poor seamanship. In the past year, evidence has been produced to suggest that that might not be the whole story. A constituent of mine, Dr. Jonathan Wills, who has not always been remarkable for his support of liberal democracy in the Northern Isles—in the past, he has been more associated with the Minister's party, although I am pleased to say that he has recently been cured of that—found in his boat a package that contained various papers. He refers to it as a whistleblower's package. It contained various pieces of evidence, including the logbook from the Braer. He examined it and concluded that it raised new evidence. He had previously written a definitive book on the Braer and its grounding.

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The conclusion of Admiral Lang of the marine accident investigation branch was that the evidence disclosed to Dr. Wills was not new or important. With all due respect to Admiral Lang—I hold great respect for him—I find that difficult to understand. The MAIB inquiry into the loss of the Braer did not see the evidence, which consists of several pages of manuscript shift log at the Mongstad oil terminal in Norway, and Statoil's letter of protest, signed for by the master of the Braer. All that evidence showed that the Braer's main steam line had burst on arrival at Mongstad on new year's eve in 1992.
I do not understand how Admiral Lang can conclude that that evidence is not new. It is clear from the terms of the MAIB inquiry that the MAIB did not consider it. He may not have been aware of it—I do not see how that could have been the case—but as it was not considered it must surely be new.
The evidence is important. It is clear that there were significant problems with the Braer's engines. The bunker report on the Braer's arrival in Norway showed that, during the passage from New York to Mongstad, she used three times as much diesel as usual. It looks as if she had to burn diesel in the auxiliary boiler to make enough steam to heat the fuel oil. There was a leak in the water pipe feeding the boiler three days before arrival in Mongstad. There appears to have been some confusion in the mind of MAIB inspectors between that fault and another that occurred after the Braer docked at jetty one during the last hour of Hogmanay in 1992.
Thereafter, in the early hours of the new year, the Braer tried to use a steam-driven pump to empty her ballast water tanks. The main steam pipe between the boilers and the manifold burst at 16 times atmospheric pressure and at a temperature of 345 deg C. De-ballasting and loading were delayed 19 hours for repairs.
The Braer's owners and managers were in contact with the ship and must have known about that, because Statoil, the Mongstad terminal operators, launched a formal protest about the delays in loading. The repair was under the direction of the owner's shore-based superintendent engineer, who boarded the ship on new year's day with a riding crew of four Polish fitters. He wanted to familiarise himself with the vessel, tackle what was described then as a backlog of repairs and maintenance, and prepare the ship for five days in a repair yard.
Was the Braer in class? Was it unseaworthy, and as a result not covered by the terms of its insurance, when it sailed from Mongstad? That would have been determined by inspectors from Det Norske Veritas, but there is no record of anyone from it boarding the ship to supervise or certify that crucial operation. Significantly, the MAIB said in January 1994 that all the ship's certificates were in order and fully up to date. I understand that there is no record of such an inspection, so we cannot say whether the MAIB knows that Det Norske Veritas approved the repair. DNV's approach has been somewhat unhelpful. It believes that there is a continuing duty of confidentiality to the Braer Corporation of Monrovia, notwithstanding that it was a one-ship company and ceased to exist some eight years
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ago. It is questionable whether any duty is still owed or could be thought to outweigh the public interest in the case.
It is clear that the Braer steam boilers were badly corroded and that their water supply was dangerously contaminated. As a result, the engineers could not warm up heavy fuel oil to burn in the main engine and the auxiliary boiler as they usually did, and they used diesel. When the diesel became contaminated, the ship stopped and was blown ashore. Even if water had not got into the fuel tank, the Braer risked running out of diesel and steam long before she reached the refinery in Quebec where she was destined.
In the light of my comments this morning, will the Minister reconsider his assessment that the Braer was seaworthy when she left Mongstad and my request for an independent assessment of the evidence presented by Dr. Wills? One could ask whether the case still matters. It is tempting to say, "It happened nine and a half years ago, the bulk of the claims have been settled and most of the damage that was done to the south end of Shetland has been repaired." However, it is still important. The reputation of the master has continued to be impugned, perhaps unjustly, and the owners of the Braer have effectively been allowed to pull a fast one. It matters not only because of the question of right and wrong: if an accident happens and people get away with it, they and others like them sailing under flags of convenience will be tempted to try to get away with it again. That is why it is important. We are no longer dealing with questions of compensation or reputations within the MAIB; we are trying to get to the truth. If we genuinely know what happened, we may be able to prevent it from happening again.
I wanted to cover several other issues today, but time is against me so I will mention only a couple. The first is the green award incentive, which makes a considerable contribution to the standard of shipping. It is an international standard and if shipping can meet it, the ships are classified under the incentive and entitled to benefits such as discounts on harbour fees—a significant sum. Ports in Spain, South Africa, Rotterdam and northern Germany use the incentive, but only one in the United Kingdom—Sella Ness in the north of Shetland, which takes all the tanker traffic in and out of Sullom Voe. Carrot and stick approaches such as that one offer significant benefits to improve shipping standards and get to the root of difficulties such as pollution. They are a sensible means of proceeding. Will the Minister tell us what his Department is doing to encourage the adoption of standards such as the green award incentive?
The other matter that I want to bring to the attention of the House is the excellent report from the National Audit Office dealing with pollution from ships by the Comptroller and Auditor General, which was published on 12 June. I commend it to the House as a thoroughly comprehensive work on the subject that puts forward several proposals and deals carefully with the different issues that have arisen on a case study basis. I open it at random and it refers to the multitanker Ascania, which was a boat that threatened to blow away part of the Caithness coastline and possibly some of the southernmost parts of Orkney just a few years ago. The report makes several recommendations. I wonder if the Minister would tell us what consideration his Department has given to the report and when he might expect to have a response.

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The Government have started to tackle several issues in the area of maritime shipping, and I give them credit for trying to improve standards in the shipping industry. However, a great deal more needs to be done. I hope that if the Government can improve the standard of our shipping, along with other countries in the International Maritime Organisation, no other Member of Parliament will ever have to stand here discussing such issues about nine and a half years after an incident like the grounding of the Braer. That surely is something on which all Members can agree.
11.21 am
Mr. Desmond Swayne: First, I thank the hon. Member for Orkney and Shetland (Mr. Carmichael) for seeking the debate, and congratulate him on securing it and on the command of the subject that he demonstrated in his speech. I thought that it was an excellent summary of the issues involved and I look forward to the Minister's response to the points raised. I have a constituency interest of my own. I represent the western part of the New forest, which has the western Solent as its seafront: an environmentally sensitive area, which includes the Lymington marshes and Hurst spit. I also go to Pembrokeshire every year for my holidays and the Pembrokeshire national park coastline around Fishguard is close to Milford Haven, so I am concerned about the pollution issues raised by the debate.
I will begin by asking the Minister a question that I hope he will be able to answer. A satellite tracking system for identifying oil spills was trialled between August 2000 and August 2001 by the Maritime and Coastguard Agency. It considered the trial to be a success and intended to let a contract for its implementation. Will the Minister tell us what has happened since August of last year concerning that trial?
Satellite tracking systems are one of several measures that could be used in the fight against oil pollution of maritime habitats and the consequent damage to biodiversity. That system has been developed over several years and is used successfully in other parts of the European Union—I understand that it is used by the Danish Admiralty. The Department of Trade and Industry and the MCA are aware of those developments. The company that provided that technology believes that as well as allowing for oil spills to be swiftly tracked and dealt with, there would also be a significant deterrent value, if it were combined with potential prosecution, in the maritime industries if we were prepared to use such technology quickly to punish culprits.
Oil pollution can have a very serious impact on marine biodiversity. After the oil spill from the motor tanker Braer, to which the hon. Member for Orkney and Shetland referred, 1,538 corpses of 26 different species of bird were washed up in January alone, including 857 shags, 203 black guillemots arid 96 long-tailed ducks. Similarly, following the spill from the Sea Empress in mid-February 1996, 6,900 oiled birds of 28 species were collected up to 1 June that year, including approximately 3,495 that were dead or that subsequently died. Those included 1,818 dead common scoters and 1,416 dead auks, predominantly guillemots or razorbills.
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The implementation of marine environmental high-risk areas would allow controls to be placed on tanker traffic. Routeing tankers and other vessels carrying dangerous cargoes away from those environmentally sensitive areas or treacherous shipping lanes can reduce the risk of chronic pollution from shipping and from major oil incidents. Approved shipping routes would make it less likely for ships to collide with each other, run aground or get into other difficulties. Environmental sensitivity in the classification of those marine environmental high-risk areas would be based on a number of criteria, including wildlife, landscape, geology, fishing and the economy.
It is worth bearing in mind that operational pollution—day-to-day operational incidents or illegal discharges—accounts for more than 73 per cent., almost three quarters, of incidents, compared with the large, headline-hitting oil spills. Most of those day-to-day incidents occur in harbour and estuarine areas, most of which are environmentally very sensitive. That more insidious form of pollution is in effect as damaging as, if not more damaging than, the large incidents that stick in the headlines.
The old Department of the Environment, Transport and the Regions commissioned a report on the identification of marine environmental high-risk areas in December 1999. I understand that there was some controversy over the methodology used for identifying such areas and that the Royal Society for the Protection of Birds had some reservations about that, but I do not want to get into that controversy. What we need is significant action to expedite the implementation of such marine environmental high-risk areas. It is now eight years since Donaldson recommended the setting-up of those areas. How far along the time scale for their establishment are we? I understand that a new consultation is shortly to begin. Can the Minister say something about that and the methodology to be used in determining the areas concerned?
I conclude by putting in a plea for the Bill of my hon. Friend the Member for Uxbridge (Mr. Randall), which has completed its stages in this House but awaits consideration in the other place. The Marine Wildlife Conservation Bill would help to fill the gaps, which mean that nationally important wildlife sites in the marine environment in the territorial waters of England and Wales do not receive the protection that they need. At present, significant areas around the United Kingdom coast are not covered by the Merchant Shipping (Prevention of Oil Pollution) Regulations 1996 because they lie within the baseline of our 12-nautical-mile territorial zone. If the Marine Wildlife Conservation Bill were enacted, it would highlight marine areas of national importance and could help to deal with pollution issues. Perhaps the Minister will state his estimate of the likely progress in the other place of the Bill promoted by my hon. Friend.
11.30 am
Mr. Michael Weir: I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing the debate.
It is certainly no surprise that the debate has revolved around the Braer disaster. Indeed, it would have been more of a surprise if it had not done so given his

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constituents' feelings about the matter. Spookily, when I came to London last night I switched on my television and watched an old episode of "Drop the Dead Donkey" that was originally shown at the time of the Braer disaster. The characters were debating whether to send a TV crew to Shetland to obtain film of double-headed lambs being born. Obviously, that is over-the-top satire, but it shows the real and potential impact on our environment and traditional industries of disasters around our coastline such as that involving the Braer.
Indeed, the hon. Member for Orkney and Shetland made a point about Shetland salmon farmers. They enjoyed a premium for their product until the Braer disaster that they have been unable to reclaim since. That situation worries many in Scotland's traditional industries such as farming, fishing and tourism, which take place in rural areas such as Angus. In promoting those industries we rely heavily on Scotland's reputation for a clean natural environment. Every time that that is brought into doubt, it can impact heavily on those industries. To be fair, that effect is not confined to Scotland. In west Wales, for example, very similar concerns are felt in Ceredigion and other areas. Indeed, Alaska was badly damaged following the Exxon Valdez disaster.
Unfortunately, the potential for disaster is real, and the Braer was not a one-off. The hon. Member for New Forest, West (Mr. Swayne) reminded us of the Sea Empress incident at Milford Haven and the hon. Member for Orkney and Shetland briefly referred to the multitanker Ascania incident. That incident, which took place in the Pentland Firth, was potentially extremely serious. A chemical tanker caught fire in its engine room, 200 people in Caithness had to be evacuated and a no-fly zone had to be established because of the danger of an explosion. The tanker was eventually towed to Scapa Flow—it is strange how everything ends up in the constituency of the hon. Member for Orkney and Shetland. In that case, it was lucky that an environmental disaster did not occur, but it could have been catastrophic.
Given that 90 per cent. of the UK's overseas trade and 7 per cent. of our internal trade is carried by sea, a huge number of ships are plying our waters and it is not surprising that there is potential for a disaster. Add to that our position astride the world trade routes from America to Europe, and it is obvious that a huge amount of shipping passes through Scottish and UK waters.
Pollution in our waters has long been a problem. There was the notorious dumping of munitions at Beaufort's dyke off the south-west coast and the recent example of German nerve agents, which were dumped off the Danish coast after the last war, leaking into the sea. To be fair to the Government, action has been taken after incidents involving tankers such as the introduction of the port marine safety code after the Sea Empress incident. In the United States, the Oil Pollution Act 1990, which specifies that all oil tankers must have a double hull, was introduced following the Exxon Valdez disaster. In the European Union, single-hulled ships will be outlawed by 2015.
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There is a problem with pollution once it reaches the coast. A key recommendation of both the Donaldson inquiry into the Braer and the inquiry into the Sea Empress was for local authorities to have a statutory duty to plan for and undertake shoreline clean-ups following marine pollution incidents. That was mentioned in the National Audit Office report to which the hon. Member for Orkney and Shetland referred. It states that the Government
"should consider the case for taking powers to require all coastal local authorities to have up to date oil spill contingency plans consistent with the National Contingency Plans, so that the United Kingdom as a whole is properly prepared to deal with maritime pollution incidents in compliance with international conventions."
The Convention of Scottish Local Authorities supported that recommendation. What thought has the Minister's Department given to it? What discussions have been held with the devolved authorities, which will obviously have a say in what happens in Wales and Scotland? A critical question relates to the likely resources that will be forthcoming to allow local authorities to develop contingency plans. It is no good putting an onus on local authorities without providing funding to take plans forward.
The problem is not only that oil is a potential pollutant to seas. Only this morning, there was a story on the radio about a dispute between Greenpeace and the Environment Agency about the categorisation of nuclear waste that is being transported by ship from Japan to Sellafield. Because the agency does not consider rejected MOX plutonium to be waste, fewer controls apply to it, even though it is the first time that such material has been shipped since 11 September.
In addition, there is concern about the state of the ships that transport waste to Sellafield. There are particular worries about corrosion on one of the ships of the Pacific Nuclear Transport Ltd. fleet, which is largely owned by British Nuclear Fuels. That raises yet further concerns about accidents happening on our coastline. On Greenpeace's website, a copy of a letter sent to the Secretary of State for Transport refers to the alleged corrosion on ships:
"It is apparent that the cause of the corrosion was poor initial design of the refrigeration … and condensation removal systems. In house BNFL studies were subsequently initiated on the remaining Pacific Nuclear Fleet … and the European Shearwater … Surveys in particular of the Pacific Pintail and Pacific Teal, according to the Lloyds Register Classification Survey Dates Supplement, took place in November 2001 after the steel plate corrosion problems in the Pacific Crane were identified. It is understood that initial results of these tests indicate similar corrosion problems on all vessels."
Clearly, serious concern exists about the seaworthiness of ships that carry very dangerous cargos around our coast.
Mr. Carmichael: Does the hon. Gentleman agree that the compelling evidence, to which he refers, on the state of ships that transport nuclear waste from Japan to Sellafield makes it all the more important that there should be no consideration of a northern passage, which was spoken of some time ago, to take nuclear waste from Japan around the north coast of Russia down the west coast of Norway to the United Kingdom? That would be particularly hazardous.
Mr. Deputy Speaker (Sir Nicholas Winterton): Order. Before the hon. Member for Angus (Mr. Weir) replies,

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I point out that he has not spoken for an hour and eight minutes—the digital clock is in error and I hope that it will be corrected.
Mr. Weir: If Mr. Deputy Speaker insists, I shall try to keep going for an hour and thirty minutes, but the Chamber might get a bit bored.
I totally agree with the point made by the hon. Member for Orkney and Shetland. A northern route, going through the Arctic, Norway and the scenic parts of northern and western Scotland, would be disastrous. An accident on any part of that route would have catastrophic effects for the whole of the northern hemisphere.
As the hon. Gentleman said, the effects of oil pollution are a disaster for traditional industry, wildlife and the environment. However, what would be the effects of an accident with a ship carrying nuclear waste to Sellafield? They are too horrible to contemplate and would dwarf the effects of the Braer. I ask the Minister, what investigation has been made into the ships that will carry the nuclear waste from Japan to Sellafield? Can he confirm that corrosion has been found on those ships, and does he consider them suitable to carry such material? I urge him seriously to consider stopping those ships sailing into United Kingdom waters.
The hon. Member for Orkney and Shetland referred to the northern route, but these ships would take the southern route and pass the coasts of west Wales and Cornwall, where there are many sites of special scientific interest. A disaster near either of those coasts would be a national and international disaster. The Government of Ireland have already expressed their opposition to the continuing operation of Sellafield. If ships carry nuclear waste up the Irish sea to Sellafield, that problem will get worse. Any disaster would affect Scotland, Ireland, Wales and England, as well as places further afield. I urge the Minister to take immediate action to stop the trade before there is a great disaster.
Will the Minister examine the powers that the authorities in port have if they consider that a ship is dangerous or unseaworthy? Earlier this year, the Public Accounts Committee noted that the number of ships' surveyors had fallen to just 159 from a figure of 194 in 1992, and that puts an extra burden on the Maritime and Coastguard Agency. The Committee also recommended that surveyors should carry out inspections at sea, so will the Minister tell us whether any thought has been given to strengthening the inspection regime either for ships that visits ports in the UK or for those at sea?
Given the prospect of ships carrying nuclear cargos, has the Minister given any thought to the information that should be provided to ports, coastguards and the Maritime and Coastguard Agency in respect of ships carrying dangerous cargos through channels in UK waters? The hon. Member for Orkney and Shetland has already called for such information to be made available about the ships travelling through the Pentland Firth and Fair Isles channels, but it is important that information is available about the ships travelling through the channels off the coasts of Wales and between Scotland and Ireland. My main point, however—I stress it again—is that we should not allow ships carrying nuclear cargos to travel through UK waters to Sellafield.
11.42 am
Andrew George: I am pleased to have the opportunity to take part once again in our now regular Tuesday morning debate on shipping matters. Perhaps it should become as regular as the shipping forecast.
I congratulate my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) on securing the debate and on taking the opportunity to raise residual matters regarding the sinking of the Braer nine and a half years ago. I shall listen carefully to the Minister's reply to the important questions that have been asked.
The hon. Member for New Forest, West (Mr. Swayne) also raised some important issues. I am glad that he emphasised the importance of encouraging the Government to introduce proposals for marine environmental high-risk areas, MEHRAs. As he rightly said, they were recommended in the Donaldson report in 1994. I know that many of us are anxious for the Government to introduce such proposals.
The hon. Member for Angus (Mr. Weir) rightly emphasised the importance not only of the proper monitoring of the nuclear waste and materials that are taken by sea—we heard this morning of a potential new shipment coming to this country from Japan—but of protecting the coastline. Coastline protection is crucial, because pollution at sea too often washes up on the shore. I come from a part of the world that, arguably—perhaps not even arguably—has the most beautiful coastline in the country and includes the Isles of Scilly and the far west of Cornwall. I know from regular visits to the shoreline that the vast bulk of pollution comes from shipping and not from beach users. Only last year I joined volunteers at Praa Sands in my constituency who were collecting rubbish as part of the "Keep Britain Tidy" campaign beach-clean week. The vast bulk of the rubbish collected on the beach came from the sea and not from beach users, which emphasises the importance of recognising that oil pollution is not the only issue. Many sea users use the sea as a rubbish ground and everything goes over the side. Spillage of oil, whether deliberate or accidental, is not the only hazard to wildlife because many other forms of pollution are a threat.
The hon. Member for Angus referred to one of the recommendations from the research into the foundering of the Erika on the Brittany coast in 1999 and the importance of introducing double-hull oil tankers. Many of us believe that the deadline, which has been put back to 2015, is worryingly far distant. What progress has the Minister and his Department made in ensuring that Britain takes a full and responsible role in meeting that deadline and working in the international sphere to ensure that the timetable is met?
As the hon. Member for New Forest, West rightly said, MEHRAs were recommended in the Donaldson report. The hon. Gentleman also said that the Government set up consultation on that in December 1999 and closed it in April 2000, but the result of that consultation has still not been published. We have been informed that there will be further consultation this summer, if we ever get a summer, and I should be grateful if the Minister would provide information in his reply on the timetable for implementation. Furthermore, in relation to MEHRAs, the hon. Member for New Forest, West gave the impression that

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he was sure that powers and sanctions would be attached to the designations. Many areas around the United Kingdom want powers and sanctions to go hand in hand with the designations and I would be grateful if the Minister would indicate what sanctions, regulations and powers there are likely to be. Many local authorities are anxious to ensure that MEHRAs are backed up with the sort of sanctions and powers that can ensure that the environment is not simply noted but properly protected.
On compensation, I acknowledge that both internationally and in the United Kingdom, compensation arrangements and safeguards have certainly been improved and increased for oil spillages. That subject has already been adequately covered, but not all noxious or hazardous pollution at sea comes within the orbit of regulations on oil spillage. For instance, on 26 March 1997, when the MV Cita sank on the east coast of St. Mary's on the Isles of Scilly, it was carrying 145 containers; it also had 95 tonnes of fuel oil on board. The ship was German owned, registered in Antigua and insured by a Hamburg company that was not a member of a shipping insurance protection and indemnity club. In fact many of the containers were owned and insured by various people in different countries.
The pollution effect on the Isles of Scilly was such that the Government Departments responsible had to bear a bill of at least £200,000. Five years later, the Isles of Scilly council still has to find in excess of £80,000, which it had to borrow from reserves. Given that the council has a turnover of £2.5 million per annum, that had a significant impact. Although we all support and wish to uphold the principle of the polluter pays, it is too often the case that ships are owned by one nation and registered in another and that responsibility for the cargo is spread among several. As a result of the grounding of the Cita, the Government and the Isles of Scilly council have been chasing compensation in the German courts for the past three years, but without success. Will the Minister say what action can be taken to ensure that such irresponsibility—it is effectively piracy at sea—is brought to book?
I draw the Minister's attention to a point raised last week—the mention in the Queen's Speech of May 2001 of a proposed safety Bill. The Government announced their intention to increase the number of parties who would be liable in the event of a marine pollution incident in order to improve claimants' access to compensation Since then, we have heard no more. Will the Minister say when the Government plan to introduce such legislation?
My hon. Friend the Member for Orkney and Shetland drew attention to the National Audit Office report published last month. That report introduced a number of measures—I hope that the Minister will respond to them—including the establishment of appropriate contingency plans. I also raised another matter last week in relation to sea safety. It was the suggestion of sharing resources—in this case, surveillance aircraft—with other regulatory bodies; I am certain that the Ministry of Defence and the Department of the Environment, Food and Rural Affairs will have the opportunity to share resources in
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relation to fisheries protection. Another of the Committee's recommendations was to bring protocols on hazardous and noxious substances into UK law.
We should give the Minister ample opportunity to respond to the many matters that have been mentioned, so I shall not say much more except to give the House some good news. In my experience, it is not always necessary for the Government to introduce further regulation to drag a reluctant industry in the direction of taking more responsibility for the marine environment. I commend BRITMEPA, a voluntary organisation known as the British Marine Environment Protection Association, which is a division of the Sea Safety Group. I have been in touch with Captain A. P. Starling Lark, who is largely responsible for establishing that new, voluntary organisation and hopes that similar organisations will be established in other maritime countries. I am sure that the Minister is aware of that. It wants to work with the Government and throughout the industry by establishing the highest possible environmental standards in maritime industries.
11.55 am
Mr. Jonathan Sayeed: First, I congratulate you, Mr. Deputy Speaker, on your award of a knighthood—once a knight, and at your age.
The hon. Member for Orkney and Shetland (Mr. Carmichael) is to be congratulated on having secured the debate. It follows very neatly last week's on maritime safety, because those who offend against maritime safety are usually the same people who offend in terms of pollution. Pollution at sea is no respecter of sovereign jurisdiction. It can affect some 950 million people who rely upon the marine environment for their primary source of protein. Half the UK's biodiversity may be found in our seas and the UK economy relies on shipping for 95 per cent. of its visible trade.
Shipping is an international industry requiring international regulation. Accidental or deliberate discharge can damage a local area both environmentally and economically. Therefore, the reconciliation of sustainable marine discipline with the market freedom of global trade is both a national and an international imperative. Ships can constitute an environmental hazard to the marine environment in three ways—through operational pollution, accidental pollution and physical damage.
Operational pollution can occur through oil and oil wastes, chemicals and noxious liquid substances, sewage, garbage, anti-fouling paints, foreign organisms and even engine transmissions and noise. The majority of those discharges are governed by the International Maritime Organisation's international convention for the prevention of pollution from ships, which covers both accidental and operational pollution. It also provides for the designation of special areas where even tighter standards apply. All waters around the United Kingdom, including the North sea and the English channel are designated in that way.
Accidents such as collision and grounding can result in large quantities of pollutant being released into the marine environment. A vessel going aground, anchors and propellers, certain trawling activities and the operation of ships have the potential physically to damage and disturb reefs, banks, coastline, marine habitats and marine life.

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The international convention on oil pollution preparedness, response and co-operation of 1990 provides a global framework for international co-operation in combating major incidents or threats of marine pollution. The international safety management code applies to most international shipping companies and trading vessels and obliges shipping companies to establish an environmental protection policy, which must be periodically audited both internally and externally. Both are useful and valuable measures, which must be made to work, but we should also remember that the IMO has no power to make Governments or industry take the necessary action. It operates by way of agreement and consensus, which gives rise to accusations of tardiness, but those accusations are misplaced.
The principal responsibility for enforcing regulations lies with flag states, whose efforts are supplemented by port state control. There are doubts about whether UK port state control inspections of foreign flagged vessels are adequately enforcing compliance with international standards, as well as doubts about whether we are doing enough to reduce operational discharges from ships by detecting and deterring through the prosecution and fining of those who continue to discharge illegally.
The evidence is clear. In 2000 alone, a total of 743 discharges from vessels and offshore installations were identified in the UK pollution control zone and national waters. In 2000, the annual total of 34 oil discharges from oil and chemical tankers was 89 per cent. greater than the 1996–99 mean annual figure of 18 discharges. I recognise that aircraft surveillance plays a significant role in spotting infringements, that we share satellite information with other states that are contracting parties to the Bonn agreement, and that the Maritime and Coastguard Agency is also conducting research into the tagging of oil-contaminated discharges to help identify those responsible. I am sorry to say, however, that the figures clearly show that matters are getting worse, so I welcome the Government's declared commitment to reducing the risk of marine pollution by taking pre-emptive action through international and domestic forums, as well as the emphasis on an ecosystem-based approach and integrated stewardship. Those are grand words, but what, specifically, are the Government going to do?
Two national initiatives are especially positive. They arose from Lord Donaldson's recommendations in 1994, following the inquiry into the Braer oil tanker incident in 1993, about which the hon. Member for Orkney and Shetland spoke knowledgably. The first is the computer assisted shipping traffic database, released in March 1996, on ship routeing in UK waters, and the second is identification of marine environmental high-risk areas, based on a dual assessment of shipping pollution risk and environmental sensitivity.
I urge the Government to expand the provision of year-round emergency tugging vessels for UK coasts. Although I acknowledge that things have improved, four emergency tugs for the whole of the UK, where some 300,000 major ship movements occur each year, is still too few. Will the Minister explain why the COAST database has not been expanded to include non-routine traffic, such as naval vessels, fishing vessels and offshore traffic to mobile drilling units?
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The UK's national contingency plan, published in 2000, set out how the relevant local, national, harbour and offshore authorities in the UK will respond to marine incidents. I ask the Minister to comment, however, on the criticisms from the National Audit Office on 12th June 2002. The Comptroller and Auditor General highlighted structural flaws in the contingency planning of some coastal local authorities, in particular in Wales. There, local authorities struggled to deal with the aftermath of the release of 72,000 tonnes of oil from the grounded Sea Empress in February 1996. The NAO noted that no statutory duty is placed on local authorities to plan for and undertake shoreline clean-ups following marine incidents. May I suggest, perhaps oversuspiciously, that that may be because the Government would then have to fund an additional responsibility of local authorities?
Is the Minister aware that a gap is likely to ensue between provisions for contingency plans for oil pollution and the ever-increasing danger of chemical pollution? Have the National Audit Office's cost-saving recommendations for the sharing of counter-pollution equipment or the contracting out proposals been considered by Government? If so, what answers have the Government reached?
Turning to the harmonisation of international standards, will the Minister confirm that the anti-foulant organotin will not be used after 1 January 2008? If that is the case, why is it still being marketed as a biocide for ships? Will the convention for the control and management of ships' ballast water and sediment be adopted in 2003? Can the Minister explain why the international convention on civil liability for pollution damage caused by bunker oil, adopted in 2001, is still awaiting implementation? Is he confident that all single-hulled tankers will be eliminated completely by 2015, which is already an extended date?
The Exxon Valdez in Alaska and the devastation of the Galapagos Islands hit the headlines and caused a global environmental shockwave. However, it is the small daily incidents, minor accidents and regular discharges by those who flout the law that we need particularly to address and avoid. That is especially true in the UK, which is on some of the world's busiest waterways, the pollution of which would impact directly upon our biodiversity.
Accidents are a product of human fallibility and error and are not subject to absolute prediction or guaranteed prevention. Yet measures can be taken to limit the likelihood of occurrence and to mitigate the degrading environmental consequences. Preventive action is the only option for a disease that has no cure. It is all very well for a national authority to look outwards beyond its frontiers to international agreements, but such agreements will count for little unless local authorities are able to act effectively. Global thinking and effective local implementation are the key to safer seas and sustainable development.
12.07 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): First, I add my congratulations to the former occupant of the Chair, Sir Nicholas Winterton, on his knighthood. I look forward to you, Mr. Deputy Speaker, receiving a similar award for the outstanding work that you, too, have done for this House.

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I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) not only on raising the matter but on doing so in his usual well-studied and courteous manner, which always goes down well in the House and will probably guarantee him good, proper and fair answers to his questions. He referred to this being a weekly debate, although unlike the hon. Member for St. Ives (Andrew George) he did not propose that it should be as regular as the weather forecast. However, we seem to be covering some ground and I welcome that, because maritime-related issues have received little attention from the House during the past 10 years.
The hon. Member for Orkney and Shetland raised the importance of clean seas, particularly in his constituency. He mentioned fishing and tourism, diving and sea farming and the hon. Member for New Forest, West (Mr. Swayne) talked about sea birds in some depth and those are all very important matters. He also mentioned the two aspects of maritime pollution—chronic problems and acute problems. The acute problems, such as major sinkings and oil spillages, tend to attract most public attention, but it is perhaps the chronic problems that need the most careful attention. As the hon. Gentleman said, they play a greater role in the scheme of things over the longer term.
The hon. Member for Orkney and Shetland referred in some detail to the Braer, which is important to his part of the country and his constituency. The Government have learned many lessons from that incident and the hon. Gentleman gave us credit for that. Much action is being undertaken and I shall run through some of our measures if I have time.
Some time ago, the hon. Gentleman kindly invited me to the Shetlands. I can now confirm that, all being well, it will be my considerable pleasure to enjoy the customary hospitality of the Shetland Isles in August. I have heard the hon. Gentleman's request for a meeting, and we shall see what we can do on that front.
The hon. Gentleman mentioned the Braer investigation and said that new evidence had come to light as regards the logbook. The marine accident investigation branch carefully examined the new allegations and drew two conclusions. It said that at least some of the new evidence presented by Dr. Wills was already known to it and that none of his evidence challenged the version of events that was revealed during the investigation.
The basis of Dr. Wills's argument was that he had obtained copies of the logbook that was kept by the loading terminal, not the ship, while the Braer was embarking her cargo of light crude oil. The logbook referred to steam line problems on board, and the marine accident investigation branch examined the issue carefully. It concluded, however, that despite that entry in the logbook ashore, the overwhelming evidence from other sources suggested that the problem lay with the feed water system. The difference between those two findings was crucial.
I shall now run through some of the questions that hon. Members have raised, and if I have time, I shall make some more general points about maritime pollution. The hon. Member for Orkney and Shetland
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asked the Government to reconsider pressing the international oil pollution compensation funds to release the Tulloch report, but it would not be wise to do so. We must remember that the UK is not only a claimant, but a contributor to the funds, and a precedent set in this case could have ongoing repercussions for future cases. In other words, I have heard what the hon. Gentleman has said on the matter.
Mr. Carmichael: There is a distinction to be drawn Here. If this case sets a precedent, it might not be a bad one. All the litigation and claims have been dealt with, but there is still a lingering doubt about whether the IOPC acted properly. It is surely in everyone's interests—not least the IOPC's —that doubts about its conduct are removed and that can be done only by releasing the Tulloch report.
Mr. Jamieson: I have heard what the hon. Gentleman says, but we perhaps differ on the issue.
The hon. Gentleman also asked about a further Independent inquiry into the Braer incident. The MAIB is independent of my Department and the chief inspector reports directly to the Secretary of State. The hon. Gentleman holds Admiral John Lang in high regard and I am satisfied that his advice to us is entirely independent, and I accept and very much appreciate it.
The hon. Gentleman asked about the green award and we are interested in any scheme that encourages higher environmental standards. The port waste reception directive, which we are in the process of implementing, enables ports to apply lower charges to ships on the grounds of good environmental management.
I started by talking about the difference between chronic and acute problems, and it as well to put the issue in context. The most up-to-date information that we have was published by the joint group of experts on the scientific aspects of marine environmental protection. That report gives the following figures for maritime pollution: land-based discharges plus atmospheric inputs from land industry sources contribute something like 77 per cent. of all pollution in the sea; dumping from land is responsible for another 10 per cent.; and 12 or 13 per cent. derives from maritime transport.
The hon. Member for St. Ives is pulling a quizzical face, as if he had actually learned something today. When he visited the beaches in his constituency, he may have seen fluttering copies of "Focus" rather than things coming in from the sea. He was talking not about pollution but flotsam; it may be that that flotsam was sea based, but there are more insidious things contained within the sea than on the surface. I hope that those statistics are of assistance.
The hon. Member for New Forest, West referred to the Marine Wildlife Conservation Bill. The question of prosecution for oil pollution landward of the UNCLOS—United Nations convention on the law of the sea—baseline will be addressed through amendment of the legislation. The Bill is not relevant to the issue, as it is not designed to perform such a function—the solution lies with the relevant merchant legislation.
The hon. Gentleman also mentioned satellite tracking. The Maritime and Coastguard Agency's trials of satellite monitoring have been successful and it

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intends to offer a contract for satellite sensing over key areas of the sea, both inside and outside the United Kingdom counter-pollution zone.
The hon. Gentleman made a further point about the areas in which prosecution could take place. There seems to be some misunderstanding of that matter. The Merchant Shipping (Prevention of Oil Pollution) Regulations 1996 apply in areas seaward of the baseline out to the full extent of the United Kingdom pollution control zone, which is 200 miles beyond that baseline. Illegal discharges of oil in the internal waters landward of the baseline, including estuaries, can be prosecuted under section 131 of the Merchant Shipping Act 1995. I hope that that clears up the confusion.
Mr. Sayeed: The Minister may remember that last week I asked him a question about the Maritime and Coastguard Agency, which he was unable or unwilling to answer. There is not a single master mariner in a senior position in the MCA, which is run by people whose expertise is shore based rather than former practitioners at sea. Does the Minister think that the MCA would be assisted if it employed people who had been master mariners and who know what happens at sea?
Mr. Jamieson: I am grateful to the hon. Gentleman for raising that issue. In the debate last week, he cast doubt on the competence of the MCA. This House is the place in which to ask such questions and when we make a robust attack on any organisation, we must make an equally robust check of the facts.
The hon. Gentleman said that there was not one master mariner among the MCA senior management, but I am informed that one of the senior managers in that organisation is Captain John Garner, who holds a master mariner certificate. He has commanded container ships and ferries and has considerable experience at sea. In addition, Maurice Storey, the chief executive, has spent a total of 45 years in the industry, both landward and at sea. Alan Cubbin is a qualified naval architect and has been in charge of the safety operation and policy role for more than 20 years. John Astbury has been all the way through the shipping industry, from the very bottom to the very top. That shows that the MCA has within it enormous competence and experience, which is borne out by my day-to-day experience and contact with such an excellent organisation. The hon. Gentleman has clearly not done his homework and I now give him an opportunity to withdraw his comment that no master mariner is involved in the management of the MCA.
Mr. Sayeed: Although I had checked the details about Captain John Garner, I accept what the Minister has said and, on that basis, I withdraw my remarks. Mr Storey, however, worked for Stena for many years, but he was shore based.
Mr. Jamieson: I am pleased that the hon. Gentleman has withdrawn his comment. He will be interested to know that Maurice Storey spent some time at sea, too I recommend that he visits the MCA, as I have done. I am sure that he will find Maurice Storey most welcoming and helpful. Such a visit would increase the hon. Gentleman's knowledge and experience substantially.
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The hon. Member for Angus (Mr. Weir) drew attention to the transport of nuclear material around our coasts. It is most important that all such transportations comply with the International Maritime Organisation's requirements. We are sure that the joint IMO and International Atomic Energy Agency code for irradiated nuclear fuels is happening. It is a matter to which my Department attaches great importance.
The hon. Gentleman referred to local authority clean-ups. We have not had discussions with the devolved Administrations, but we have with local authorities in general, which already have the powers to prepare such plans. We know that, of the 170 coastal local authorities, all but one either have plans or are currently reviewing them.
Mr. Weir: The Minister referred to the transport of nuclear waste, but he did not answer my specific question—whether the Department is looking into the claims regarding the ships that will be travelling to Sellafield next month. Furthermore, has he held discussions with local authorities about the financing of such schemes?
Mr. Jamieson: Individual ships would be involved in any implementation of the regulations. A considerable amount of money goes to local authorities in respect of their civil contingency plans. Such planning matters are the responsibility of what is now another Department and that is probably discussing them as we speak.
The hon. Member for St. Ives has a nice chunk of coastline in his constituency. I have holidayed there regularly and it is a fine coastline—perhaps it compares fairly well with the coastline in Devon. He asked about double hulls. I am sure that he is relieved that the United Kingdom is doing its part in phasing out single hulls in line with the timetable set by the IMO. The hon. Gentleman also asked about the safety Bill. We are seeking parliamentary time in which to introduce it and we are currently bidding for the third Session. We welcomed the report of the National Audit Office. We considered it well founded and soundly thought through and we are now looking carefully at its recommendations.
Pollution from ships is another important matter.
Andrew George: The Minister is moving on from some of my questions. The hon. Member for New Forest, West (Mr. Swayne) and I referred to the timetable for MEHRAs and the likely plans for the powers and sanctions to support them, and I should be grateful to the Minister for any information that he could give about that.
Mr. Jamieson: Yes. Perhaps I can deal with that a little later, but I can tell the hon. Gentleman that we will issue a consultation paper this autumn on that matter to discuss potential protective measures, including the routeing measures that he mentions.
I should say again that the pollution that we suffer in the sea is, in fact, largely land based and not from ships. Nevertheless, when shipping causes pollution, the effects can be acute and absolutely devastating. The hon. Gentleman is probably too young to remember the

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Torrey Canyon incident. [Interruption.]He says that he does remember it; he is rather older than he looks. I certainly remember what happened in March 1967. As the hon. Member for Orkney and Shetland said, the Braer incident occurred in January 1993, and the Sea Empress incident took place in February 1996.
The United Kingdom has about 10,000 miles of coastline and we are adjacent to some of the world's busiest sea lanes, such as the English channel, which adjoins my constituency and that of the hon. Member for St. Ives. It is estimated that there are about 400 vessel movements a day through the Dover straits. Consequently, we have made preventing and deterring pollution one of our highest priorities.
I shall list some of the things that we are doing. First, we are very active internationally. Shipping, by its very nature, is an international industry and international controls are required to regulate it. That is best achieved through the International Maritime Organisation. We ensure that we play an active and influential role in the IMO. We work vigorously in the IMO to achieve tighter rules and standards that apply to discharges from ships under the major international convention controlling marine pollution—the international convention for the prevention of pollution from ships, which is commonly known as MARPOL.
We played a leading role in persuading the IMO to agree to designate the north-western European waters, including the North sea, English channel, the Irish sea and other UK waters, as a special area under the MARPOL annexe that covers the prevention of oil pollution. We also played a leading role in persuading the IMO to designate the North sea as a special area under the MARPOL annexe that covers the prevention of pollution by ship's garbage—an issue raised by several hon. Members. In that way, the disposal into the sea of oil and garbage is governed by much more stringent limits than those for other marine areas under international law. That recognises the fact that our waters deserve greater protection from pollution.
We are also a party to the international oil pollution compensation regime. It is worth remembering that, at the time of the Braer and Sea Empress incidents, the limit under that regime was approximately £51 million,
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which was increased to its present level of approximately £118 million in 1996. In October 2000, we secured a further rise to approximately £180 million from November 2003 and we are doing more. We are preparing a draft protocol that will provide states with the option to join an additional supplementary fund, with a view to reducing still further the likelihood of claims being deferred in part until it can be shown that the total claim is met in full.
The UK took a high profile during the 1996 IMO diplomatic conference, which successfully adopted the hazardous and noxious substances convention, under which a compensation fund similar to that applying to oil tanker pollution will be introduced.
Mr. Sayeed: rose—
Mr. Jamieson: I will not give way again. I have given way to the hon. Gentleman, and I want to make some general remarks.
The hazardous and noxious substances convention will require compulsory insurance and provide a right to take direct action against the insurer, making it much easier for claimants to recover their losses.
On the domestic front, we have taken steps to deal with the risks of shipping polluting our seas and coasts on a statutory and a non-statutory basis. We know only too well from the Braer, Sea Empress and Erika incidents how much damage can be done to the marine environment in a major accident. In his review of salvage intervention held in the wake of the Sea Empress incident, Lord Donaldson recommended that ultimate control of any salvage operation involving a threat to the environment must be exercised by the Secretary of State's representative for maritime salvage and intervention.
This has been a very helpful debate with some excellent contributions. I hope that we will have further opportunities to unpick and unfold some of the very important issues concerned.
Mr. Sayeed: Can the Minister explain—
Mr. Deputy Speaker (Mr. Edward O'Hara): Order. The Minister has concluded. We will proceed with the next debate.

Sunday Working (Scotland)
12.30 pm
Mr. Malcolm Savidge: On 20 June the Leader of the House said, in response to my business question, that this matter was
"a very serious issue of principle … of immediate concern to his constituents."—[Official Report,20 June 2002; Vol. 387, c. 429.]
I would add that the subject is of immediate concern to the constituents of MPs across Scotland—and, as the question asked last Thursday by the hon. Member for East Antrim (Mr. Beggs) so amply illustrated, across the United Kingdom. Equal rights for employees throughout the UK should be a concern of all Members of the British Parliament.
The company Argos is exploiting a loophole in the law whereby a protection afforded to shop workers in the rest of the UK does not at present apply to Scotland. That is the protection that makes Sunday working voluntary. Argos is offering staff the stark alternative of doing compulsory Sunday working or facing the sack. The anomaly in the law probably goes back to the time of Stanley Baldwin and the Shops Act 1936, which extended only to England and Wales, probably because Sabbatarianism was so strong in Scotland at the time that it was not felt that protection was needed there.
Whatever the reason, when the Shops Act 1950 went through, it too applied to England and Wales, and so did the Sunday Trading Act 1994 and the Employment Rights Act 1996, although there was separate legislation that applied to Northern Ireland. In the mid-1990s, the Conservative Government had the support of Opposition parties in passing those two Acts. They intended to ensure that shops had the flexibility to trade on Sundays and shoppers had the flexibility to shop on Sundays, but that shop workers had protection so that those who objected in principle to working on Sunday would not be forced to do so.
I shall spell out the present legal protection. Shop workers employed on contracts that do not oblige them to work on a Sunday should be allowed to refuse to work on a Sunday without fear of dismissal, redundancy or any kind of detriment. Indeed, the law goes much further, and says that shop workers on a contract that expects them to work on a Sunday should be able at any time to give the firm three months' notice that they wish to opt out of that, and refuse to work on Sundays in future, without any detriment.
That is the legal situation in England, Wales and Northern Ireland. As the Leader of the House said,
"Although that is not the law in Scotland"—[Official Report,20 June 2002; Vol. 387, c. 429.],
trading companies have accepted that, as an "issue of principle", they should apply the spirit of that law to their employees in Scotland. Argos did precisely that in the mid-1990s, allowing its staff to sign an opt-out clause of the kind permitted under the 1994 and 1996 legislation.
Why, then, is Argos now rewarding staff who between them have given many years of loyal service to the company with an ultimatum of compulsory working or the sack? First, that is appalling staff relations. Secondly, it is an affront to freedom of religion at a time when, I am glad to say, we accept far more the right of
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people of non-Christian religions to have their religious observance recognised. Surely we should not be seeing people persecuted for Christian beliefs.
It is probably true to say that people's deep feelings about Sunday are best shown in films such as "Chariots of Fire", which represented the deep feelings that Eric Liddell had about running on Sunday. Although such feelings are less common in Scotland now than they used to be, they still exist and the rights of the people who hold them deserve to be respected.
However, even people with more liberal opinions object to the idea of being forced to work on Sundays, when that means days and times of the company's choosing. Other groups, too, have the right to enjoy Sunday in the way that they wish. For example, couples often find that it is the one day when they are both off work together. That is particularly true for families, as it is the day that children are most likely to be off school. In our society, carers and those with family responsibility tend to be women, so I would argue that the company's proposal is sexually discriminatory. Indeed, the Union of Shop, Distributive and Allied Workers tells me that almost all, if not all, the staff who have made complaints about the move are female.
The company's proposal is discriminatory in another way. It clearly discriminates against people simply because they live in Scotland; it could not be introduced anywhere else in the United Kingdom. It is also a denial of human rights. The legislation was passed between 1994 and 1996 under a Conservative Government, with the support of other parties, and the company's proposal is surely against all this Government's core beliefs—our beliefs that we should support faith communities, be family-friendly, oppose discrimination and uphold human rights.
Not only I but many other Members of Parliament, Church leaders and people in the media have all contacted Argos, and I want to say something about its response. First, the company said that it had made the move because it needed more workers on Sundays. Internal monitoring and comments from customers had suggested that those working on Sundays were less experienced, and therefore gave a less good service than the Monday to Friday staff. Does that apply only in Scotland, or has the move been made just because of a legal loophole in Scotland?
Mr. Russell Brown: My hon. Friend, like me, has been in contact with the company and with USDAW. Does he agree that the underlying fact is nothing more than a desire to cut costs for Sunday working? The company has not been short of staff in any of its 37 stores in Scotland, and it has always had quality staff. This move is penny pinching. By manipulating the contractual system, Argos will achieve small savings at the end of the day.
Mr. Savidge: My hon. Friend is absolutely right, and I will expand on that point later. Is not the threat of the sack an extraordinary reward for the people whom the company says are its best staff?
Argos has also said that in some of its stores, people will be expected to work only one Sunday in nine. However, in another store, people will be expected to work one Sunday in two. If staff are confronted with a

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press-gang attitude and decide to leave the company—I am told that that could happen—what guarantees are there that there will not be a greater need to push other staff into working on Sunday more and more regularly? What protection will they have from a company that is prepared to alter their contracts arbitrarily? What will protect them from working more frequently on Sunday, or from alterations to the number of hours that they are expected to work?
Argos claims that other companies have introduced similar measures. USDAW says that it knows of no other company that has tried to force existing staff, on pain of dismissal, into compulsory Sunday working. Argos claims to respect the religious observances of its staff, but does not say how it proposes to do that.
Argos says that it has gone in for consultation but, contrary to its agreement with the union, it engaged in no prior consultation with USDAW. Argos claims that 97 per cent. of staff are accepting its proposal on a voluntary basis. That figure sounds rather like those votes that used to occur in communist dictatorships, does it not? Such dictatorships would claim that 97 per cent. voted yes, which was usually the result of a mixture of coercion and imagination. I suspect that is what applies in this case.
To use the word "voluntary", when one actually means compulsory Sunday working or the sack, is to use that word in a way that would fit fairly well into Orwell's "Nineteen Eighty-Four". USDAW has a collective grievance from 69 of the staff who objected totally. If we work out the arithmetic based on that, the company would have to employ more than double the staff it actually has in Scotland for the 97 per cent. figure to be remotely possible. Leaving aside the fanciful arithmetic, and pretending that the 97 per cent. figure is not an arbitrary invention, we must ask why on earth, if 97 per cent. of the staff were prepared to work voluntarily, the company is threatening hundreds of their best and most experienced staff with the sack? Surely, as my hon. Friend the Member for Dumfries (Mr. Brown) suggested, a very slight increase in financial reward would resolve the problem immediately. I gather that Argos only offer time and a half, whereas the wages councils used to recommend double time for Sundays. Possibly a very slight adjustment to their additional payment might resolve the problem.
Mr. Terry Duddy, the chief executive of the company, wrote to me in moving terms:
"We pride ourselves on dealing with staff with fairness and respect, and believe our actions have shown this."
However, the company document that deals with this matter speaks of "week 22 to week 34", which refers to giving staff notice on week 22 and having all matters resolved by week 34. That makes precisely 12 weeks—a period that has been chosen for a reason. Under present contractual notice, staff who have worked for less than four years for the company can be dismissed in four weeks. Staff who have worked for over 14 years—who may have given decades of loyal service to the company—have to be given 12 weeks. The company is saying—in its caring fashion—that it wants to ensure that the staff who have worked longest for the company are out at the end of the 12 weeks, without further consideration.
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Steve Farndale, the Scottish area manager, sent an intranet message to his store managers concerning the changeover:
"Bring your … problems in a big bag … and I'll bring a big "
Let us consider the treatment of individual staff. A mother who wanted to spend time with her daughter was told, "You can find someone else to watch over her." A daughter who wanted to give respite care to an aged and very infirm parent was told, "That can be done any day." Having read several such comments, I find the company's attitude callous and outrageous. The basic human decencies such as maternal affection, care for sick parents or personal convictions are treated as if they are sins against the corporate greed of the company. Although the company claims that in truly exceptional circumstances it may give a temporary stay of execution to staff not wanting to work compulsorily on Sundays, it makes it clear that such individuals should be brought back in every month so that their personal circumstances could be reviewed, to see whether the company finds them acceptable, and obviously it can continue to put pressure on them.
I find it appalling that staff who have given faithful Monday to Friday service for years should have that sort of intrusion into their personal lives. It is not really "Nineteen Eighty-Four"; it is a more a reminder of the 19th century. If not actually slavery, the atmosphere is similar to that of Victorian domestic service. I was going to say it was Dickensian, but that would be unfair. Even Scrooge at his worst allowed Bob Cratchit time off without making intrusive personal enquiries into his family circumstances and demanding a regular update on whether Tiny Tim was really all that ill.
Argos says:
"We pride ourselves on dealing with staff with fairness and respect",
but the message to the managers said:
"Bring your … problems in a big bag … and I'll bring a big bin."
Argos says that it prides itself on treating its staff with fairness and respect, yet it treats them worse than the firm of Scrooge and Marley.
If Argos persists, we will need to change the law. Perhaps we should change it in any case, to bring Scotland in line with England, Wales and Northern Ireland. If the company does persist, we will not need to take retrospective action to resolve the problem because the law in England and Wales, if extended to Scotland, would give staff on Sunday contracts the right to opt out within three months. We may nevertheless want additional clauses stating that the right to opt out should be immediate where coercion has taken place, and that there should be a right to reinstatement. However, I hope that that will not be necessary.
Even at this late stage, I appeal to Terry Duddy to consider whether he really wants to nurture the public image of a cheating bully who has worse staff relations than Ebenezer Scrooge. I ask him and his senior management to listen to Church leaders, the Government, Parliament and all parties. Already, early-day motion 1498 has been signed by 150 hon. Members, and I suspect that it will receive the support of many more. I ask him to think about his staff, the level of morale that press-ganging creates and how many

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experienced staff may feel forced to leave. He must think of the good will of his customers and the public. The whole group of Great Universal Stores—which includes Kays, Marshall Ward, Choice, Innovations, Home Free and Burberry's—must ask itself whether it is worth losing public good will through being associated with discrimination against families, carers, women, Christians, Scots and those that work in Scotland, and through infringing human rights.
Compulsory Sunday working is objectionable to the British Parliament and the British people. It is illegal in the UK, except in Scotland. Perhaps we need to extend that legal protection to Scotland but, in the meantime, we urge and expect all companies throughout the United Kingdom to abide by the spirit of the law.
12.46 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): I congratulate the hon. Member for Aberdeen, North (Mr. Savidge) on securing the debate. It was also a great pleasure to arrive early enough to hear the Under-Secretary of State for Transport give an eloquent and clear exposition of Government policy in the previous debate.
I am a member of USDAW and I acknowledge and record the support that it gives to my constituency. I share the concern that the hon. Member for Aberdeen. North has for the interests of retail workers. We have introduced several measures to protect the rights of workers that were neglected in the past. We are a Government who always encourage employers to treat employees fairly and in a spirit of partnership. Indeed, we have made available £5 million to support projects that promote partnerships between employers and their employees.
Employers who fail to heed the needs and wishes of their employees are unlikely to be able to recruit and retain a committed work force, which is so essential in these days of fierce competition. I always deplore any attempt to coerce employees to adapt to unwelcome work practices and patterns, particularly when it involves Sunday working. We recognise that many people do not wish to work on Sundays, whether it be for religious reasons or so that they can spend time with family and friends. Good employers will always respect that.
The hon. Member for Aberdeen, North represents a part of the United Kingdom that has a tradition of respecting the Sabbath. When the Olympic committee ordered Eric Liddell to compete on a Sunday, he refused. What makes Argos think that it can compel his spiritual successors to work on a Sunday, against the Christian convictions that they hold so dear? Almost every other national chain of stores has avoided doing that and has secured the voluntary co-operation of workers who do not object to Sunday working. Why is Argos—a reputable company—acting in such an insensitive way?
Of course we recognise that many people want to go shopping on Sundays. Many people have such busy lives that Sunday may be the only day on which it is possible for them to shop. Employers want to cater for that, and the law does not stand in their way.
Sunday shop opening was deregulated in England and Wales in 1994. Parliament responded to the public's wish to shop on Sundays and the desire of employers to
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meet the public's needs, but declared that that should not be at the cost of the third group in the partnership, people who work in shops. The law is clear on Sunday work. Although there is no general protection against having to work on Sundays, as with other general terms and conditions of employment, whether employees can be asked to work on Sundays will depend in most cases on what has been negotiated in their contracts of employment by themselves or by their representatives. That is equally true whether employees work in England, Scotland or Wales, and is true in most sectors of the labour market.
The Government have done more in five years to protect workers' rights, through legislation and a 21st-century partnership with employers, than any previous Government. We restored trade union rights at GCHQ within 13 days of coming to power and we brought in statutory procedures for trade unions to obtain recognition in organisations with more than 20 employees.
The hon. Member for Dumfries (Mr. Brown) praised the quality of shop staff in his constituency and I join him in praising the dedicated work by shop workers throughout the United Kingdom. It may help hon. Members if I spell out the rights of workers in more detail and set them against any attempt to coerce them to work on Sundays. Our landmark national minimum wage, which is now supported by all parties, has benefited 1.5 million workers; the automatic entitlement to four weeks' paid annual leave under the working time regulations has transformed the rights of more than 3 million people; and 400,000 part-time workers now benefit directly from fair treatment for part-time work. I hate discrimination, and at a stroke we abolished discrimination against part-time workers. To support the weak against the strong, from September 2000 we have given a worker attending a grievance or disciplinary hearing the right to be accompanied by a colleague or trade union official. Since 1 June 1999, the qualifying period for making a claim against an employer has been increased from one year to two.
Protection for whistleblowers came into force on 2 July 1999. Agreements to waive the right to claim unfair dismissal in fixed-term contracts were abolished on 25 October 1999. We increased maternity leave to 18 weeks on 15 December 1999, and next year we are taking that up to 26 weeks, when standard maternity pay will also go up to £100 a week. Fathers will also get an automatic right to two weeks' paid paternity leave at the same rate. Last year, we shortened the qualifying period from two years to one.
Sunday shop opening has been legal in Scotland for many years and is widely accepted. Sensitive employers have respected the diverse traditions of various Scottish communities and various religious beliefs. Such citizens do not expect to be asked to work on Sundays, and their contracts do not provide for Sunday work. The hon. Member for Aberdeen, North explained that USDAW reached an understanding with a number of large retailers in Scotland, including Argos, when Sunday shop opening was legalised in England and Wales in 1994. The understanding was that those employers would honour the spirit of the special protection given to shop workers in England and Wales. It is greatly to be regretted that Argos appears to have changed its stance.

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I warn any employer that seeks to change employees' contracts unilaterally that whether employees can be required to work on Sundays depends on what has been negotiated and agreed in their contracts of employment. Once those contracts have been agreed employers are not free to vary their terms whenever they feel like doing so. A contract is legally binding on both employer and employee. If an employer changes the terms and conditions of a contract without an employee's consent, that employee can consider making a breach of contract claim.
Mr. Michael Weir: I appreciate what the Minister is saying. Does he realise that many Argos workers are simply not in a position to reject unilateral changes, because their stores are in areas in which it would be difficult to find alternative employment? They are in a weak economic position, so will he not consider legislation to solve the problem?
Nigel Griffiths: I have every sympathy with the hon. Gentleman's comments and he is right. We must protect the weak against the strong, but there is not time to protect the Argos workers who are facing problems now with legislation, which, as he knows, takes months and sometimes years to take through Parliament. There is no tap to turn on legislation at a click of the fingers. We are discussing today the sensible proposals put forward to see whether that company, and any other company that is considering taking the same path—I know of none—will see sense and recognise that when workers are represented and have legal rights, which I have spelled out, it may face legal action on the contracts that it wants to vary. If employees are dismissed for refusing to accept a variation of contract or simply for refusing to work on Sundays if their existing contract does not require that, they can make a claim under our unfair dismissal legislation.
Mr. Russell Brown: Because of my contacts with USDAW, I have been pressing that point. Employees will be able to make a claim for unfair dismissal, but it is strongly suspected that the company will merely give
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the excuse—it is an excuse and nothing more—of overriding business considerations or a changing business environment. Those considerations and that environment have not changed, and there is something more underlying the issue.
Nigel Griffiths: My hon. Friend makes a good point. The evidence for a change has not convinced him, the non. Member for Aberdeen, North or USDAW. I would have thought that that would severely weaken the position of a company seeking to change the terms of contracts, and lead to a possible legal challenge. That is why I hope that it will be possible for Argos to sit down in a spirit of conciliation with representatives of its work force and hon. Members of all parties who are concerned for their constituents, and reach a sensible agreement.
Existing legislation provides an essential framework to ensure that employees are decently treated. Any shop worker in Scotland who is dismissed for refusing to work on Sundays, if they have worked for a year, can go straight to an employment tribunal under the unfair dismissal legislation, thus avoiding court action—although that door will not be closed. In addition, all employers would do well to note that the 1998 working time regulations provide for all employees to have a rest period of at least one day a week or two days a fortnight and limit the number of hours that they can require employees to work to an average of 48 in any week. That ensures that everyone can have the minimum break from working necessary to protect their health and safety, and enables them to spend time with their family.
I want to make it clear that the Government deplore my attempt to coerce employees into Sunday working. I hope that the employer whose actions prompted this debate will listen to the hon. Members who have spoken today, to Church leaders in Scotland, to the mood of local communities and to its work force. I warn the company that shop workers in Scotland are not defenceless or without possible redress if they are ill treated by employers for refusing to work on Sundays. I join the hon. Member for Aberdeen, North in asking Argos to seek an amicable solution and uphold the traditions of a company that was much respected hitherto.

Health Services (Oxfordshire)
12.59 pm
Mr. Boris Johnson: I am pleased that time has been found for this debate, although I am sorry that no other Oxfordshire Members of Parliament have seen fit to attend the proceedings. Perhaps they will join us in due course.
Adjournment debates tend to begin with a whinge about health care, develop into a wail and wind up with a general howl of protest. Let me vary the routine and start with an unrivalled success story which I hope the Minister will appreciate. In about a month's time, the first brick will be laid of the new Watlington hospital in my constituency. It will be marvellous—the type of place in which all hon. Members might hope to wind up, spending our last days gently pottering around in its gardens, looking at the lovely flowers of south Oxfordshire.
There will be 60 beds—some national health service, some private. A quarter will be for the use of mental patients, a quarter for convalescence, a quarter for long stay elderly patients and a quarter for respite care—to give a break to disabled children's parents who are at the end of their tether. There will also be a brand new NHS GP surgery.
The whole project has NHS approval. I am sure that the Minister will be especially pleased to know that the project has so far been accomplished without spending' a penny of public money. Two and a half years ago, the Government closed the small cottage hospital in Watlington—a move bitterly resented by the local population. They have responded magnificently, thanks to the tireless work of Sir Charles Farrell and many others. Donations have been collected, both large and small, and the people of Oxfordshire have raised £1.5 million to reverse an ill-judged closure by the Government. I am sure that the Minister will want to join me in congratulating all those responsible for that achievement. At the risk of tempting him into a departure from Labour's approved ideology, I invite him to agree that it shows what private enterprise can do in the field of health care.
The real question is why the people of Oxfordshire felt so ill-served by their hospitals that they wanted to rebuild one at their own expense. I firmly believe that Westminster Hall debates are not a time for scoring party political points. I do not want to attack of undermine the many health care professionals in my constituency who do a fantastic job in difficult circumstances. However, one reason why it was necessary to build again at Watlington was the shortage of care home beds. We all know that care homes are closing throughout the country at a prodigious rate, thanks in large part to the detailed provisions of the Care Standards Act 2000. In Oxfordshire, half the care homes are predicted to close by 2007.
The closure of care homes is producing the phenomenon of bed blocking in our hospitals, when elderly patients cannot leave and impede the arrival of other patients. At the John Radcliffe hospital, the biggest and most important in Oxfordshire, 46 beds are currently blocked. A further 36 or so are blocked in Oxfordshire's various local hospitals.
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There are currently 80 beds in the John Radcliffe that are closed altogether, making it difficult to get in. One GP in my constituency told me yesterday that she had a patient with jaundice whom she could not get into the John Radcliffe. Although he was not, as far as she could tell, in imminent danger, he was in pain and distress and she wanted him to be seen. She could have put him on the cancer list because, according to Government rules, people with cancer must be seen within two weeks—if not actually treated, because one might have to wait a lot longer for that. However, she was not sure that he had cancer, so he had to wait and wait.
Another Oxfordshire GP, Dr. Tony Vernon of Wallingford, recently revealed that he had been unable to get patients into the John Radcliffe because the ambulances meant to be taking them there were not available—they were queuing up outside the hospital supplying trolleys because there was a shortage at the accident and emergency department. From January to March, 84 patients had to wait more than 12 hours in A&E at the John Radcliffe. Sometimes that service is closed, and people cannot get into A&E at the hospital—the biggest hospital serving Oxfordshire—because it is on what is called a divert. People are diverted to as far away as Stoke Mandeville.
When people like me make such criticisms of dedicated health care professionals, it is important that we take account of the problems that they face. A single explanation for the problems of the John Radcliffe may tell us why beds are not only blocked, but closed. We talk about a shortage of beds; the bed is physically there, but it is unavailable for use. The explanation is a shortage of nurses.
There is a 13.6 per cent. shortfall in the nursing strength at the John Radcliffe hospital. That is about 300 nurses short in a crucial hospital that serves many people in my constituency. Of the 1,250 nursing posts in Oxfordshire, 377 are unfilled. That is why beds are not only blocked, but closed. That is why general practitioners find maddening delays in putting patients into secondary care, and broadly why one in 20 planned operations is cancelled on the day of the operation. It is why the A&E seems to be in such a crisis.
The problem of recruitment is at its worst in the south-east, and retention of nurses is also difficult. One in eight registered nurses left the national health service in the year to March 2001 in the south-east region, the area most badly afflicted by wastage. Why is it so difficult to recruit and retain nurses in the south-east? Why is it necessary to try to recruit nurses from the Philippines and other countries, as the Radcliffe has been forced to do? As the Minister will have seen, that has prompted protests from some third-world countries, which have said that they are being denuded of health care workers.
The pat answer is the cost of housing. It is certainly difficult to live on a nurse's wage in Oxfordshire. Does the Minister agree that there is not only too little pay, but too little flexibility in pay? The south-east region has a discretionary weighting of between £400 and £600. That hardly competes with the London weighting of £3,000 for a nurse.
Oxfordshire certainly needs more money. In 2001, the Department of Health instructed Oxfordshire to make cuts in its hospital budget of £7 million. The cuts that we

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are all aware of in Oxfordshire social services have a knock-on effect on our hospitals, as I have tried to explain. Is it not also true that the NHS trust could be given more freedom to recruit and reward nurses without having to use the "one size fits all" national pay scales?
Does the Minister agree that, in a diverse economy, with house prices fluctuating wildly between Oxfordshire and Renfrewshire, it does not make sense to give nurses the same basic pay across the board? Does he agree that it is time to start to move away from national pay scales? I hope so. It is unfair to impose consumerist disciplines on the NHS without giving it the freedom to respond. For instance, Tesco has answered the housing crisis in the south of England and Oxfordshire by building housing for its workers. Should the NHS also have such freedom?
Funding is a problem in Oxfordshire, but it is not the only problem. The John Radcliffe has been told by the Government that it is officially a failing hospital on their Egon Ronay or Michelin-style survey of performance indicators. It scored nul points—it got nought. That was demoralising for the people working in the hospital. Whatever the failings of the John Radcliffe, it does not make sense to stigmatise a hospital in that way and to blame its managers, unless they have the freedom to solve the problem. They should have more freedom to recruit nurses, and more flexibility in pay.
I conclude with an angry correspondence between a GP and a consultant. The consultant is a constituent of mine, the GP is not, and I shall keep their identities private. The GP has written a furious letter about a patient who suffers from osteoarthritis. I shall quote long extracts from the exchange, because they give a flavour of what is going on in the NHS in my constituency. The GP wrote:
"I would be grateful if you would urgently look into the case of this now 60 year old man, and explain to me why progress in his care has been so slow. I referred him to you on 10 April 2001. He had significant osteoarthritis affecting both hips, 'unusual for a man of this age'. He was offered his first appointment with you in March 2002. That is 11 months after the original referral and well outside I believe any reasonable guidelines. As I was so concerned by this I wrote to you on 15 June last year and he was seen by your physiotherapist in December. She confirmed my findings, noted his 'considerable disability', and agreed with me that he 'warrants surgical intervention'. He has heard nothing more. In summary therefore I have a relatively young man with major bilateral hip disease, barely able now to walk, and seen in the 13 months since I referred him by a person who, whilst extremely skilled in her field, was only able to confirm my initial view, that he requires surgery. Such patient management makes a mockery of NHS waiting list guidelines and I would be grateful if you and your Chief Executive could explain to me what has happened. For the sake of my patient, I would be grateful if he could be called in immediately for your assessment and that he waits no longer for his surgery than as if he had been seen in Outpatients after no more than the usual delay."
That is a stinging letter for a GP to write to a consultant, and the consultant was very wounded. He wrote a long reply, defending the delay and trying to explain what went wrong. It would be to our advantage to hear his concluding paragraph:
"I cannot tell you how depressing it is replying to letters such as yours. You state, 'Such patient management makes a mockery of NHS waiting list guidelines and I would be grateful if you and
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your chief executive could explain to me what has happened'. Surely you must realise that 'NHS waiting list guidelines' make a mockery of patient management. Ridiculous and unachievable 'targets' set for political gain place an unsustainable strain on everybody involved in patient care in this Trust. In that I include not only all those who interface directly with patients but also our excellent management team who have to produce figures showing that we have met the 'Targets', or face dismissal. You must appreciate that meeting 'Targets' diminishes clinical flexibility. The harder we are driven to meet 'Targets' the less able I am to treat someone such as your patient quickly because we cannot risk not treating someone else within a specified time."
There we have two angry health care professionals—a GP blaming the consultant for the delay in seeing his patient and the consultant blaming the system of targets and quotas that gets in his way and prevents him from dealing with patients according to need.
If we are to improve health care services in Oxfordshire, we cannot rely on the charity and beneficence shown by the people of Watlington in rebuilding their own hospital at their own expense. We also need a fairer spending assessment for south Oxfordshire and we should stop castigating health care professionals, such as those in the John Radcliffe, without giving them more freedom to run their own lives, to recruit nurses as they see fit and to treat patients according to need, not according to some Whitehall-imposed system of targets and quotas. I thank the Minister for listening to me so patiently and in such splendid isolation this afternoon. In the absence of any other Oxfordshire Members to make the case for health care in my constituency, I look forward to hearing his response.
1.15 pm
The Parliamentary Under-Secretary of State for Health (Mr. David Lammy): I congratulate the hon. Member for Henley (Mr. Johnson) on securing today's debate, during which he has brought his usual robust and avuncular style to the Chamber.
The issue of health provision in Oxfordshire is vital to the hon. Gentleman and his constituents. I am pleased to be here today to put on record the developments in the Oxfordshire health system and improvements that have been made since the Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears), last debated this subject in February, on which occasion I know that the hon. Gentleman also contributed to the debate.
As the hon. Gentleman will be aware, this Government introduced the NHS plan and the initiative "Shifting the Balance of Power". Our policy of devolution has positioned the NHS, for the first time since its inception, in such a way as to allow local service providers to meet local needs and demands without unnecessary interference from centralising agencies. The hon. Gentleman should acknowledge that initiative, as well as the fact that we are devolving power to local primary care trusts, as some of his comments give the impression that there is nothing but central diktat from Richmond house. That is not the case, and I encourage the hon. Gentleman to look at the documents, if he has not already done so.
PCT management teams have specific local knowledge and expertise, and are now responsible for improving health, securing the provision of all health

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services and integrating health and social care. They will become the cornerstone of the NHS—local organisations that are best placed to ensure that the local health service really reflects the needs of the local community. I hope that the hon. Gentleman will agree that that amounts to a considerable shift from the days when, if a bedpan fell on the floor in an NHS hospital, its echo could be heard in the corridors of Whitehall.
I understand the hon. Gentleman's eagerness to ensure that there is continued support for the John Radcliffe hospital in Oxford, and I am keen to echo his sentiments. He raised the issue of spending, and one would have thought that he would have voted for increased investment in the NHS in Oxfordshire during the passage of the National Insurance Contributions Bill. However, when I checked this morning, I was surprised that the hon. Gentleman voted against extra investment for the NHS in Oxford.
Mr. Johnson: Perhaps I should clarify my remarks on spending, because the Minister may not have been attending as closely as he should have been. My point is that Oxfordshire has been ill-served compared with other parts of the country. The spending on health in Scotland is about £1,100 a head, compared with £450 a head in Oxfordshire. That is gross discrimination against the people of south Oxfordshire. I am not necessarily calling for a vast increase in public spending. I am merely saying that there is bias against an area that is unjustly perceived as well-heeled. The area includes many pockets of deprivation, but the standard spending assessment is skewed against Oxfordshire.
Mr. Lammy: The hon. Gentleman nevertheless raises the issue of investment and shows that he does not believe in extra spending on public services in his constituency. That is important, because when the Government came to power in 1997, spending in the Oxfordshire health authority was set at £236 million. The figure for 2002–03 was £445 million, which represents a massive estimated real-terms increase of 77 per cent. The per capita figure in 1997 was £449 Spending is now £805 per head of population in the area
I accept what the hon. Gentleman said about regional variations in funding, but it is important to the people of Oxfordshire that extra money should be made available year on year. Over time, and with the necessary reform, that will alleviate some of the problems that he mentioned.
I return to the John Radcliffe hospital in Oxford. I appreciate that people living in Oxfordshire would have felt alarmed when they saw their local hospital receiving, a zero rating in September last year. I accept that in some cases that may have been demoralising for the staff. I understand why the hon. Gentleman raised that issue, but the Government feel that it is important that patients know the manner in which their local acute hospital is performing and where there is room for improvement. I do not believe that it is some form of Michelin or Ronay restaurant guide; it is much more important than that. I want to take the opportunity to reassure the hon. Gentleman that the Government an committed to supporting the Radcliffe through increased funding and with the advice and support of
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Government organisations such as the NHS Modernisation Agency in tackling the specific areas identified for improvement. This is not just rhetoric. We have backed our statements with real increases in funding specific to that hospital, which has seen an increase from £167 million to £312 million.
Mr. Johnson: I am terribly grateful to the Minister for giving way, but since there is no one else to whom to give way I hope that he will not mind too much if I intervene. It is common ground that there is a case for more health care spending in Oxfordshire. Will he say whether he thinks it is a good idea to allow flexibility in nurses' pay and will he answer the consultant's complaint about targets and the unreasonable way in which his clinical priorities are being distorted?
Mr. Lammy: The hon. Gentleman raises the issue of targets, and I understand much of what was said in that letter, but I repeat that it is democratically important that the people of Oxfordshire should know about the state of local services and whether there is room for improvement. Establishing that a hospital has a zero rating can be done only by assessing the various services, and that sometimes includes setting targets. That assessment shows us where the hospital needs to go; it helps the Government, the local health authority and the primary care trust to assess need, and I therefore believe that it is democratically necessary.
It is important when talking about health provision in that area to mention the good things that are going on, and I know that the hon. Gentleman would have done so if he had had more time. For instance, the hospital's A&E department has been redeveloped at a cost of £9.5 million, and it is due to reopen in April 2003. The hospital has purchased a new magnetic resonance imaging scanner, which is due to be operational this summer. We have expanded the hospital's capacity. There is a new trauma unit, and £7.5 million has been invested to provide an extra eight beds for trauma services. Another £1.8 million has been spent on the intensive care and high dependency units. It is important to raise issues specific to that hospital.
We need also to mention the other things that are going on there, including the private finance initiatives. For instance, the Nuffield orthopaedic centre has a PFI of £23.6 million, and the Radcliffe infirmary another of £25 million. They should be on track by 2007, along with the £8.5 million physical disability unit at the Nuffield orthopaedic centre. That is happening in the area surrounding the hon. Gentleman's constituency in west Oxfordshire, alongside the problems that exist in the hospital.
Mr. Johnson: My constituents in Watlington would be very cross with me if I did not extract some word of congratulation from the Minister. He spoke of the many wonderful scanners and the new A&E that were provided by the NHS. All hon. Members would support those. Might he not thank the people of Watlington for having overturned the Government's senseless decision to close its cottage hospital, and rebuilt it at their own expense?
Mr. Lammy: The hon. Gentleman does that very convincingly. It supports the principle of shifting the balance, giving local people the freedom to make decisions. It is not for me, as a Minister in Whitehall, to—
Mr. Johnson: Congratulate them?
Mr. Lammy: To dabble too much in such decisions. If the local people have chosen to have a hospital in that area, I wish them the best of medical services in the years ahead.
The hon. Gentleman raised the important issue of the recruitment and retention of nursing staff. I am aware of the challenges faced by local health systems and—ultimately—the Government in that regard, especially in the more prosperous south-east. It is not all doom and gloom. Between September 1999 and September 2001 there was a net increase of 20,740 nurses working in the NHS, which met the NHS plan target three years ahead of schedule.
The hon. Gentleman condemns targets. Only by introducing targets can we ensure that nurses are recruited and sent to places that need them. Between September 2000 and September 2001, the number of qualified nurses working in the NHS rose by 4.3 per cent., the biggest increase on record, and the number of qualified allied health professionals rose by 4 per cent., a higher increase than in the previous year. The number of NHS consultants has risen by 5.7 per cent., the largest increase on record.
Under the NHS plan every member of staff in the NHS is entitled to work for an organisation that can provide and demonstrate its commitment to a range of flexible working conditions, including flexible working patterns, team-based self-rostering, annual hours and
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flexitime. The "Improving Working Lives" standard, launched in October 2000, sets out a model of good human resource practice against which NHS employers will be kite-marked. The Oxford Radcliffe Hospitals NHS trust is confident of reaching that standard within the next few months.
Working within departmental guidelines, steps have been taken by the trust to recruit nursing staff from the Philippines and other parts of south Asia. Since February 2001, 320 nurses have been recruited from overseas and a further 100 are expected from the Philippines later this year. Those nurses have needed time to adapt to life in this country and the trust rightly offers additional language support. The extra nurses will be an invaluable resource to help to reduce the pressures faced by the local health system. They have proved to be a huge success and many are progressing—
Mr. Johnson: Will the Minister address the question of moving away from national pay scales, which are such a bar to flexibility?
Mr. Lammy: I have made it clear to the hon. Gentleman that this is about local arrangements. It is about shifting the balance to local need and it is right that such decisions are made locally by primary care trusts and the strategic health authority, not by central diktat from Richmond house. That is the thrust of Government policy, and as the nurses come in and settle down, the hon. Gentleman will find that there are improvements in his constituency.
The Government recognise—in turn, the hon. Gentleman must recognise that we do so—that the high cost of living in the south impacts on the ability of NHS organisations to recruit and retain staff. That is why we introduced the "cost of living" supplement, which nurses in Oxfordshire have received since April 2001. Other innovative schemes are in place to give health professionals better access to housing, and a great deal of work has been done to support family-friendly policies and flexible working.

Foreign Language Teaching
1.30 pm
Mr. Chris Bryant: It is a delight to serve under your chairmanship for the second day in a row. Mr. Deputy Speaker. I think that today I shall do so for slightly longer than yesterday, but only just.
I am delighted to have secured the debate—it looks as though it may not be much of a debate, however, as so few other Members are here—not least because I believe that modern foreign languages are essential to our economic and cultural future. The global economy in which we live requires global people who can speak foreign languages as well as their mother tongue. International trade provides 30 per cent. of the gross domestic product of the United Kingdom. If we are to be a successful economy, English, Welsh, Scottish and Irish people must be able to speak more than English alone. Of businesses in the UK, 44 per cent. say that the lack of the ability to speak a foreign language dramatically affects their chances of securing exports.
I also believe that a modern language can dramatically improve job prospects for young people. I am concerned that the job prospects of young people in my constituency who grow up unable to speak a foreign language will be affected by that. Learning a foreign language early in life gave my father and me opportunities, in Spain and Belgium as well as in the UK, that changed the fortunes of our family.
We need to get away from the myth that teacher and translator are the only jobs that speaking foreign languages enables people to get. The truth is that most hotels in Cardiff need people who speak the mother tongues of visitors to the city. We should be able to greet people who come to the UK even if they do not happen to speak English. Manufacturing, sales and marketing are affected as well. In a range of jobs, the ability to engage in a decent business conversation in a second language—the language of the host country that one is visiting—can only assist our economic chances.
Having spent two years working in Brussels, the European Union and the BBC, and having seen Members of the European Parliament at work, I believe that a political class that speaks a variety of modern languages can be far more effective in Europe than one that speaks only its mother tongue. In the past, the UK delegation has been able to say only "Kall ispera", or a couple of words of French or Spanish. That has meant that it has not been able to bat as well on behalf of Britain as it might have done had it had mastery of another language.
Lest we become too utilitarian in the analysis of the importance of modern foreign languages, it is important to remember that many world languages have come to the UK during the past 40 or 50 years. Our country now has many people who speak the languages of south Asia fluently as a second or even a first tongue, which has provided us with another economic advantage. Also, the exposure to other cultures that being able to speak a foreign language can bring can only enhance one's understanding and enjoyment of life. The ability to read "Don Quixote" in Spanish, "Madame Bovary" in French or great works in Arabic or Mandarin can only add to the rich tapestry of life.
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We have a problem in the United Kingdom because not enough people learn modern foreign languages, and it is a crying shame that we come last in the European table of those who speak them. It is also a problem that only one in 10 people continues to study foreign languages after the age of 16, and that few 14-year-olds have the required ability in languages.
There are many reasons for those problems, not least the fact that English has become the world language and, in many cases, the language of business. There is undoubtedly a feeling around the world and in this country that English is enough. We are not exposed enough to foreign cultures, and we mainly encounter American culture—in English, even though Spanish is a significant language in large parts of the United States.
We have remarkably few role models who speak or make a point of speaking foreign languages. I know that Kylie Minogue is Australian, not British—
Hywel Williams: She is Welsh.
Mr. Bryant: Her mother may be from Maesteg, but that does not quite make her Welsh. She was also nominated for Welsh woman of the year two years ago, but that was a bit of an overstatement. Kylie tried to speak French in one of her recent songs, but I do not think that the words "Votre disco a besoin de vous" will be enough to encourage young people in Britain to start studying a modern foreign language.
We need role models in the political class, and it would be interesting to know how many Cabinet Ministers and shadow Cabinet Ministers could engage in a full business meeting in a second or third language. We also need cultural leaders who can express themselves in foreign languages, and who make a point of doing so. They could give that expertise to schools and colleges throughout the country and increase the profile of modern foreign languages.
We have another problem in that historically, we have focused on French to the exclusion of all other languages. I have French friends who maintain that it is the most precise language in the world, which is why it is still the language of diplomacy. When one reminds them that the French words for "worms", "glass", "green" and "towards" all sound the same, however, their argument falls apart. Of course, French is still useful in some parts of the world, but we must surely diversify the modern foreign languages taught in the United Kingdom.
Spanish has become one of the great world languages, and it provides enormous opportunities in Latin America and other parts of the world. I suspect that one reason why British trade with Latin America over the past 50 years has not followed the same pattern as that of France, Italy and Spain is that remarkably few British people still speak Spanish. That is despite the fact that one in four Britons goes on holiday to Spain every year—although ordering fish and chips in Spanish is remarkably difficult. Surely, we should also pursue a deliberate strategy of ensuring that more of our young people learn Japanese, Arabic and German. We must make those languages common currency in the United Kingdom.
We also have a problem because there are not enough foreign language teachers at primary and secondary school level. That is particularly important at primary

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school level, because many teachers have a genuine interest in languages, and with a bit of work, could be brought on enough to start teaching Spanish, German or other languages. Historically, however, that work has not been done, and we have tended to start teaching languages quite late in children's school lives.
That brings me to another problem. Across the UK, the style of teaching modern languages is not quite right. When I was at school, we used "La Langue d'Aujourd'hui" to learn French—a very dull book that bore no resemblance to modern life. My French teacher had, I think, only just heard of Edith Piaf, and when he played Edith Piaf records to us, that was him exposing us to modern French culture. That was not the 1960s; I was at school in the late 1970s and early 1980s, when Edith Piaf was long dead. Similarly, in Spanish language teaching it sometimes seems that the teachers have heard of Julio Iglesias but not Enrique.
There is a task still to be done in changing the way in which we teach modern languages, so that learning them is about being able to communicate with people, not acquiring a set of statistics and learning a set of rules about the way in which another language works. Learning languages should be seen as having a use in life.
There are problems if we start language learning too late. It is clear that until the age of about seven or eight, we all have a remarkable ability to pick up language. We are then remarkably "sticky", and it will stick to us.
Hywel Williams: I agree entirely with the drift of the hon. Gentleman's remarks. Does he agree that we do not have an inherent inability to learn language, and that the statement that we are bad at languages in Britain is entirely wrong? The case in point is the half a million people in Wales who speak Welsh and English, and live their daily lives through the medium of a second language.
Apart from the problems that the hon. Gentleman has already identified, such as role models and an emphasis on poor teaching methods, does he agree that there is a more fundamental issue concerning the power relationships between languages—power that is propped up by Governments, broadcasting, the media, business and so on? We need to be much more aware of such things.
Mr. Bryant: The power of language is an issue, and a further issue is the complacency that we who speak English feel about the need to speak other languages because we see so many people, such as Dutch and German people, who seem to speak better English than we do. It is important for us to recognise that the future of the English language probably lies more in the hands of those who do not speak it as a first language than in our own hands. Americans have changed the English language far more than we have, and I suspect that Hispanics speaking English will dramatically change English, just as Chaucer changed it, and as the Normans who came to England before him dramatically changed it, when it was their second language.
A problem across the whole of the United Kingdom is that by the age of 14, many young people seem to see languages as a subject only for the most able students, or
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only for girls. That again involves issues of power. The Government have already looked at that problem in some depth, but I think that we need to focus on it in the future, too.
We have some specific problems in Wales, not least because the figures for the learning of modern foreign languages in Wales are even worse than those for England. During the past five years there has been a dramatic fall in the number of students in Wales studying modern foreign languages of any kind at GCSE—from 49 per cent. to 39 per cent. That is worse in Welsh-medium than in English-medium schools. In English-medium schools, 41 per cent. of pupils do such subjects at GCSE, but in Welsh-medium schools, the figure is only 33 per cent. If only one in three students at a Welsh-medium school is learning a modern language other than English and Welsh, we are providing ourselves with a long-term problem.
Furthermore, we should also think about languages outside the normal run of European languages: 11,600 people in the UK studied for a GCSE or an A-level in one of the four major south Asian languages last year, but of that 11,600, only 72 were in Wales. There may be all sorts of reasons for that, not least the ethnic diversity and make-up of communities elsewhere in the UK compared with those in Wales. None the less, in a global economy, that will give us a long-term problem.
The university of Glamorgan no longer has a modern languages department at all. We are now producing a vicious circle in Wales whereby fewer students do GCSEs, fewer do A-levels, fewer go on to universities because there are fewer opportunities to do so, and so fewer will become modern language teachers, which is a long-term problem in the making. A particular danger for Wales is that we may become a nation that is very good at speaking to itself, but not good at speaking to the rest of the world.
Although I wholeheartedly support the campaign to ensure that everybody has a choice of language in which to conduct their daily life and be educated, and I generally support the Welsh language, it is a worry to me that we are currently unable to capitalise on the natural benefit provided by bilingualism, and fewer of our bilingual students are learning a language that they can use outside Wales.
Hywel Williams: Will the hon. Gentleman give way?
Mr. Bryant: If the hon. Gentleman is quick.
Hywel Williams: There might be a problem in terms of the percentage of people learning a foreign language, but the quality of that learning varies. It is undoubtedly the case that if one has two languages it is easier to acquire a third one. Does the hon. Gentleman agree with that?
Mr. Bryant: I am afraid that that flies in the face of the figures. Whereas people in England seem to have decided that English is enough, the figures show that many young people in Wales have decided, perhaps for economic reasons, that English and Welsh are enough. I am arguing that a nation that can speak only to itself is setting itself terrible economic problems for the future. I do not want to undermine the support for the Welsh

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language, but I do want to encourage greater support for other modern languages. If foreign languages become a poor relation in Wales, our economic future will be bleak.
I shall look at some of the solutions before the Minister replies. It is clear that we need to raise the profile of modern foreign languages. I know that the Government have worked to do that, but we have further to go. We need to get across the belief that English is not enough—and in Wales, that English and Welsh are not enough. One route that we could investigate is having a single figurehead to bring coherence to our strategy across the UK. Somebody in every local authority could back up such a UK languages tsar. No local authority in Wales has anybody dealing specifically and solely with modern foreign languages.
We need to build on initiatives such as the Spanish language officer who has been appointed in Wales to help schools, and is paid by the Spanish Government, as a means of increasing co-operation between countries. We need to increase the number of exchange programmes to allow young people to be exposed to other cultures. It is only by immersion in another language that one has an opportunity to acquire it as a working language.
Broadcasters have an important role to play. I remember trying, not very successfully, to learn Russian many years ago, thanks to the BBC programme "Dosvidanya Lyeta"—one can tell how poorly I got on.
Mr. Deputy Speaker (Mr. Edward O'Hara): Order. At this point I must remind the hon. Gentleman that foreign quotations should be translated into English. There may be people present who can translate, but others may not be able to do so.
Mr. Bryant: "Dosvidanya Lyeta" means "Goodbye Summer", and it was the name of a series of programmes aimed at enabling people to learn Russian.
We have remarkably few foreign language films on television. It would be excellent if Welsh language films such as "Soloman and Gaynor'', which was part Yiddish, part English and part Welsh, were shown not only on S4C but to a wider market.
We need to start earlier. The recent experiments in Welsh primary schools were not all that successful, and they need to be followed up and examined to find ways of extending the diversity of the languages taught in primary schools to ensure that every young person has the opportunity to learn foreign languages by 2012—a goal to which the Government aspire.
Specifically, we need to capitalise on bilingualism in Wales. English and Welsh are not enough, and we need to ensure that more of our business leaders speak modern foreign languages in Wales. I wonder whether some objective 1 money should be specifically targeted at increasing the number of business leaders, especially in small and medium-sized enterprises, who have modern European languages.
My final point is a simple one. We need to capitalise on the resources that we have throughout the whole United Kingdom. Three institutions that have served us extremely well across the years in terms of modern foreign languages are under-utilised. First, the Defence
66WH
School of Languages has an extremely strong record in giving defence personnel and others ability in foreign languages, which is vital in all the peacekeeping roles that we play throughout the world. Secondly, there is the diplomatic service's languages centre, and thirdly, there is the World Service. We could capitalise better on all three of those institutions, and give Britain a stronger future as a multilingual nation.
1.50 pm
The Minister for Lifelong Learning and Higher Education (Margaret Hodge): I congratulate my hon. Friend the Member for Rhondda (Mr. Bryant) on securing time for a debate on language teaching and learning in the United Kingdom. I have to say that I am personally passionate about the importance of language learning. I was fortunate enough to have learned four languages by the time I was five years old. That has stood me in very good stead; one never forgets them, and can then build an ear for languages. I dare not try too much after what has been said, but I can even manage the odd Arabic sentence. One is something along the lines of, "Bukara ei mish mish", which means "Tomorrow we shall have apricots". That underpins the debate, in a sense, because one puts off all decisions until the next day.
I came to Britain with my family when I was young, so I know the importance of being able to communicate across linguistic and cultural barriers. That is not just about promoting economic prosperity, as my hon. Friend said, but also allows one to make oneself understood and promotes intercultural understanding, tolerance and international citizenship. I think that that is crucial.
We have made a lot of progress in Britain since the development of a national strategy for languages, which arose out of the Nuffield report and inquiry in May 2000. We have now set out some of our ambitions to improve this country's performance at languages over the next decade. Alongside our Green Paper on the agenda for 14 to 19-year-olds, we published a paper about language learning. Some of the issues that my hon. Friend raised related to higher education, but higher education and the training of teachers cannot lie in a vacuum; they have to be built from the blocks underneath. That means establishing, as he said, a culture and lifelong interest in language learning right through from primary school and into secondary school.
We have set out our ambitions in the pamphlet "Language Learning". At present, we estimate that something like one in five primary schools have some sort of language provision. We want all primary school children to be entitled to study a language by 2012. We have started putting the building blocks in place. The Teacher Training Agency is now funding specific places for primary French initial teacher training.
Hywel Williams: Will the Minister give way?
Margaret Hodge: I will, but I am very short of time.
Hywel Williams: Would the Minister agree that having two languages is an aid to learning a third, or does she agree with the hon. Member for Rhondda that two at one time is quite enough?
Margaret Hodge: My personal experience was that I was not muddled by having four. Very young children

67WH
can adapt quickly to language learning, so I am keen that they do so as early as they can. I support the initiative of our Department to base it in the primary curriculum. There are also 141 specialist language secondary schools. Each secondary specialist school will be expected to link with another five schools as part of the functions for which it receives its additional resources.
We are developing virtual links with schools in other countries through the use of the information and communication technology to which my hon. Friend the Member for Rhondda referred. In Europe we have signed an agreement with the Spanish to try to develop an internet link for schools and the teaching of language to facilitate some of the deficits in our ability to provide a cohort of language teachers. We are trying to address the issue of transition from primary to secondary. We want to increase the number of people studying languages in further and higher education and in work-based training, and we want to increase the number of people who teach languages.
I shall pick up one point made by my hon. Friend. He said that the university of Glamorgan had closed its modern foreign languages department—but it has adopted a new approach. My hon. Friend said that we should look at innovative ways in which languages can be taught. What the university has done is interesting. It has established a unilang centre in which it has invested substantially in a state-of-the-art, self-assessment, tutor-supported language-learning facility which is open to all students, whatever they are studying, to learn at their own pace and at a variety of levels. Students can have assessments and gain credits for language studies, but without the pressure of working to specific deadlines. I hope that my hon. Friend will support such initiatives.
Mr. Bryant: My biggest worry about the unilang proposal and the general route of providing a little modern language teaching alongside another course, which many universities are taking, is that it will not provide teachers in the long term.
Margaret Hodge: I accept that unilang will not provide teachers, but it will provide the facility for individuals to learn a language that they can use in their jobs and in the wider cultural community.
The difficulty that we face in the United Kingdom is that English is, to some extent, the lingua franca of the 21st century. My hon. Friend referred to that fact, and I accept that it is true. To give one instance, students from outside Europe who are studying in France may take
68WH
their degrees in English. The purpose of that is to attract international students and compete with British universities. Although the French would not like to admit to that, it is the reality, and it shows the strength of English. That is why United Kingdom students are reluctant to study modern foreign languages at degree level. They simply do not need them to the same extent as in the past. It would be wonderful if more of our students could quote freely from Moliére to Goethe, and from Dante to Cervantes, but they must be convinced that it is important.
My hon. Friend referred to the research by the Languages National Training Organisation last year which revealed the important fact that 20 per cent. of employers said that they had lost business because of a deficit in language skills, and 45 per cent. reported that language or cultural issues were a barrier to international trade. We must build on that as we try to encourage more young British people to learn a whole range of modern foreign languages.
I have recently reviewed the Socrates Erasmus programme, and we import twice as many people to study here as we export to study in foreign universities. I hope that simplifying the fees and student support arrangements, talking to some of the agencies and so on will help to increase mobility.
There is a shortage of language teachers. In January 2002 there were 190 vacant modern language posts in secondary schools in England—about 1.2 per cent., down from 1.5 per cent. We are trying to tackle that with training bursaries and golden hellos, which have led to an increase, but we are also finding that students who undertake a modern languages degree, whether that is a single or joint honours degree or part of a joint degree with another subject, do not necessarily move into language teaching. We must be constantly vigilant and take whatever initiatives we can to encourage more and more people to do that.
I hope that in my very brief response I have demonstrated to my hon. Friend and to the Chamber the importance that we place on learning modern foreign languages. A huge range of challenges must be addressed. There are exemplars of good practice and achievement throughout the education system, but there is also evidence of pupils losing interest and dropping languages at key stage 4. We must work to keep young people engaged in language learning from an early age, and we must demonstrate the value of language competence, not least the future employability benefits that are open to language graduates. We must look at flexible and innovative ways of delivering language in the curriculum. That is the reason for the action we have taken to date—
It being Two o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

PRIME MINISTER

  Elections
  Richard Burden
  To ask the Prime Minister if he will list the responsibilities of Ministers and Government Departments for electoral systems and electoral arrangements relating to elections for(a) councils, (b) the Scottish Parliament and Welsh Assembly, (c) the European Parliament, (d) the London Assembly and future English regional assemblies and (e) the House of Commons, with particular reference to consideration of proposals for review and reform. [62958]

  The Prime Minister
  Ministerial responsibility for policy, including for reform and modernisation, on election matters is for:the Lord Chancellor for House of Commons and European Parliament elections in England and Wales, and for co-ordination on UK-wide electoral matters;
  the Deputy Prime Minister for elections to English, and to the extent issues are not devolved Welsh, councils, the Greater London Authority, and any future English regional assembly;
  the Secretary of State for Scotland for all elections in Scotland. other than those for councils, which is a devolved matter;
  the Secretary of State for Northern Ireland for all elections in Northern Ireland; for all elections in Northern Ireland;
  the Secretary of State for Wales for Welsh Assembly elections.

  All these responsibilities are exercised in consultation with the Electoral Commission, which is accountable through the Speaker's Committee to the House of Commons.

  Intelligence Services
  Norman Baker
  To ask the Prime Minister for what reason the Ministerial Committee on the Intelligence Services has not been asked to endorse the UK's Requirements and Priorities for Secret Intelligence. [65152]

  The Prime Minister
  The UK's requirements for secret intelligence are submitted to the Ministerial Committee on the Intelligence Services each year for endorsement.

  Interception of Communications Commissioner
  Norman Baker
  To ask the Prime Minister if he will make a statement on paragraph 30 of the Intelligence and Security Committee annual report 2001–02 with specific reference to the resources available to the Interception of Communications Commissioner. [65151]

  The Prime Minister
  As stated in the Government Response to the Intelligence and Security Committee's annual report for 2001–02, officials are discussing with the Commissioner what extra resources would be required to deal with the anticipated increase in work. The Government will make available to the Commissioner an appropriate level of resources to enable him to carry out his responsibilities.

  National Energy Research Centre
  Mr. Dalyell
  To ask the Prime Minister what proposals he has for a national energy research centre. [65093]

  The Prime Minister
  The Department for Trade and Industry has lead responsibility on this issue.

  The establishment of a national energy research centre was a key recommendation of the review of Government support for energy research led by the Chief Scientific Adviser last autumn. Like all the other recommendations of that review, it was incorporated into the report of the Performance and Innovation Unit's wider review of energy policy published on 14 February. The Government intend to set out their response to that report in a White Paper around the turn of the year.

  In the meantime, the Research Councils are developing detailed proposals for an energy research centre in consultation with the Chief Scientific Adviser and other interested parties. These would form part of a broader proposal for sustainable energy research.

TRANSPORT

  Rail Services (West Cornwall)
  Andrew George
  To ask the Secretary of State for Transport what recent assessment he has made of the reliability of rail services to west Cornwall. [63721]

  Mr. Spellar
  The Strategic Rail Authority produces performance figures for each of the train operating companies in its publication 'On Track'. The latest version was published on 6 June and has been placed in the Libraries of the House.

  Rail and LRT Services
  Mr. Pickthall
  To ask the Secretary of State for Transport what plans he has to provide(a) rail and (b) LRT services to towns that have neither. [63723]

  Mr. Jamieson
  The Strategic Rail Authority's Strategic Plan sets out priorities for development of the national rail network. In addition to national strategic priorities it includes increased funding for the Rail Passenger Partnership scheme, which is available to support local schemes. It is for local authorities to promote, through the Local Transport Plan process, the public transport modes best suited to their area.

  Bus Travel (Worcester)
  Mr. Michael Foster
  To ask the Secretary of State for Transport what plans he has to encourage the greater use of bus travel within Worcester. [63724]

  Mr. Spellar
  The Secretary of State provides funding to Worcestershire County Council to implement its Local Transport Plan. The first annual progress report on the Local Transport Plan includes a draft bus strategy which provides more detail on how the Council will be developing their bus services. Recent initiatives which have been implemented in Worcester include:

  Park and Ride—the first of three proposed sites opened in May 2001,

  Bus access scheme—Angel Street, and

  Bus quality partnership—Worcester to Eckington.

  199W
  In addition the Council has received bursaries which have allowed them to appoint school and workplace travel co-ordinators. These co-ordinators are dedicated to encouraging sustainable transport, including the use of buses, across the county.

  Fuel Duty Rebate
  Mr. Kidney
  To ask the Secretary of State for Transport what progress he has made in his review of fuel duty rebate for providers of bus passenger services. [63725]

  Mr. Spellar
  Work is under way on the review of bus subsidies, including fuel duty rebate, announced in the April Budget. We will take this forward over the coming months. It will build on ongoing work by the Commission for Integrated Transport, due to conclude in the autumn, and other related studies. It will also invite views from other interested bodies.

  Judy Mallaber
  To ask the Secretary of State for Transport what assessment he has made of the likely impact of the fuel duty rebate introduced in May for community transport services. [63744]

  Mr. Jamieson
  Over 320 community transport organisations have already applied for eligibility to receive fuel duty rebate. Eligible organisations will be making their first claims for payment this autumn. This funding will enable the improvement and expansion of services which have an important role in improving accessibility and combating social exclusion.

  Speed Controls
  John Mann
  To ask the Secretary of State for Transport what alternatives to speed cushions his Department is investigating. [63726]

  Mr. Jamieson
  The Department has an extensive programme of road safety research covering a wide range of topics including development and evaluation of a variety of road humps and traffic calming works designed to reduce road accidents and encourage improved driving styles. Full details of current research and summaries of results of completed research are provided in a Road Safety Research Compendium, which is available on the Department's website and in the Library of the House.

  Mr. Pike
  To ask the Secretary of State for Transport what plans he has to change the policy in relation to the use of speed limit repeater signs; and if he will make a statement. [65781]

  Mr. Jamieson
  Local authorities are required to sign all speed limits where the speed limit has been created by way of a speed limit order. The exemptions are where the road is a restricted road (30mph indicated by a system of street lighting) where repeater signs are strictly prohibited, or on roads where the national speed limit applies.

  However, we are looking at signing as part of the overall package on developing improved speed management. The issue of speed limit repeater signs will form part of our considerations.

  Mr. Pike
  To ask the Secretary of State for Transport what guidance he gives on the visibility of speed cameras. [65780]
  200W
  Mr.Jamieson
  Visibility rules for those areas participating in the safety camera netting off scheme were announced on 3 December 2001. These state that fixed site camera housings should be clearly signed and made visible by being painted or marked in yellow. Mobile enforcement units should also be clearly marked and visible to drivers. Areas currently outside the netting off scheme would need to comply with all the visibility requirements as a condition of joining.

  Railways (Trespass and Vandalism)
  Mr. Burstow
  To ask the Secretary of State for Transport if he will make a statement on incidences of trespass and vandalism on the railways. [63729]

  Mr. Jamieson
  Trespass and vandalism is a serious problem for the railways.

  It is very disappointing that over half of all train incidents are due to vandalism. The Government are pleased that all sections of the rail industry recently came together in the National Route Crime Group to examine and promote ways of tackling trespass and vandalism on the railways.

  School Run (Congestion)
  Fiona Mactaggart
  To ask the Secretary of State for Transport what his assessment is of the impact on congestion of children being driven to school. [63730]

  Mr. Jamieson
  16 per cent. of cars on urban roads at 8.50 am in term time in 1998–2000 were taking children to school. This is a reduction from 20 per cent. in 1995–97. We have asked local authorities to include strategies for further reductions in their local transport plans and have increased funding for associated measures.

  Gourock Station (Redevelopment)
  David Cairns
  To ask the Secretary of State for Transport what recent discussions he has had with Railtrack concerning the redevelopment of the transport interchange at Gourock station. [63731]

  Mr. Jamieson
  None. I understand that the Scottish Executive is working with the promoting authorities for the scheme to try to find the way forward. Signal design and engineering resources remain at a premium within the rail industry although Railtrack and the Strategic Rail Authority are taking steps to address the shortage.

  Airport Capacity
  Mr. John Smith
  To ask the Secretary of State for Transport what assessment he has made of the ability of current airport capacity to meet demand for air travel over the next 10 years. [63732]

  Mr. Spellar
  We are currently finalising a series of regional consultation documents on airports and air services, between them covering the whole of the UK, which we intend to publish shortly. These consultation documents include an assessment of current airport capacity to meet demand for air travel up to 2030, and identify the capacity enhancements which might be required over that period under a range of policy scenarios.

  Train Punctuality
  Mr. Baron
  To ask the Secretary of State for Transport if he will make a statement on the trends in train punctuality over the last five years. [63733]

  Mr. Spellar
  Between 1997 and 2000 the rolling annual average Public Performance Measure (PPM). which measures punctuality and reliability, slowly declined from about 90 per cent. to 86 per cent. as the number of train kilometres ran (passengers and freight) increased by some 20 per cent. Punctuality and reliability fell sharply after Hatfield due, in large part, to the temporary speed restrictions imposed to deal with gauge corner cracking and other rail defects. The rolling annual average PPM fell to 75 per cent. though it is now rising. The Strategic Rail Authority is working with the rail industry to achieve substantial, lasting improvements in performance.

  Train Services (London)
  Roger Casale
  To ask the Secretary of State for Transport what plans he has to improve the reliability of train services in London. [63734]

  Mr. Jamieson
  It is a primary objective for the Strategic Rail Authority to work with the rail industry to achieve substantial lasting improvements in performance. £400 million has been allocated to a new Rail Performance Fund set up to co-invest with rail companies in short-term schemes to improve reliability for passengers.

  Rail Stops (Leeds)
  Colin Burgon
  To ask the Secretary of State for Transport what plans he has to encourage the opening of new suburban rail stops in the Leeds area. [63735]

  Mr. Spellar
  The Rail Passenger Partnership scheme administered by the Strategic Rail Authority helps fund new or enhanced rail services or facilities, including stations.

  I understand that the West Yorkshire Passenger Transport Executive (PTE) has commissioned a study into five potential new stations as part of the proposed new Northern franchise.

  High Speed Rail Links
  Mr. Foulkes
  To ask the Secretary of State for Transport when he next expects to meet the chairman of the Strategic Rail Authority to discuss the development of high speed rail links. [63736]

  Mr. Spellar
  The Strategic Rail Authority's study into the need for and viability of a high speed line running between London and the North of England and Scotland is due to be completed later this year. The Chairman of the Authority will report the findings to Ministers at that time.

  Freight (Railways)
  Sir Teddy Taylor
  To ask the Secretary of State for Transport what progress has been made in transferring freight traffic to railways in the past five years. [63737]

  Mr. Jamieson
  Our policy is to help establish an integrated, sustainable freight distribution system to support economic growth and bring social and environmental 202W
  benefits. In the past five years, the amount of rail freight moved has grown by 30 per cent., including 9 per cent. in the past year.

  Transatlantic Air Services
  Mr. Ben Chapman
  To ask the Secretary of State for Transport if he will make a statement on transatlantic air services. [63738]

  Mr. Spellar
  The UK Government is keen to liberalise the UK-US Air Services Agreement as we would like consumers to benefit from increased competition and airlines to benefit from improved access to the world's largest market. But that competition has to be on fair terms. We are currently reviewing a range of options that are open to us.

  Road User Charging
  Richard Ottaway
  To ask the Secretary of State for Transport what recent representations he has received regarding road user charging. [63739]

  Mr. Jamieson
  We have received various representations, reflecting various points of view.

  A303 (Safety)
  Mr. Heath
  To ask the Secretary of State for Transport if he will make a statement on safety improvements to the A303. [63740]

  Mr. Jamieson
  A number of safety improvement schemes have recently been undertaken on the A303. The Highways Agency continues to monitor the safety record of this and other trunk roads and, if further improvements are needed, they will be added to the Agency's programme.

  Railways (Private Finance)
  Mr. Robathan
  To ask the Secretary of State for Transport what assessment he has made of the railways' ability to raise private finance. [63741]

  Mr. Spellar
  The 10-Year Plan for Transport and the SRA Strategic Plan have projected a total amount of private sector investment in rail of around £34 billion over the 10 years to March 2011. This investment will be supported and levered in by £33.5 billion of public sector funding for rail.

  We remain confident that this level of private investment will be delivered, indeed over £7 billion has already been committed.

  Airports (Consultation)
  Mr. Jim Cunningham
  To ask the Secretary of State for Transport what plans he has to consult on the future of airports in Great Britain. [63742]

  Mr. Spellar
  We are currently finalising a series of regional consultation documents on airports and air services between them covering the whole of the UK, which we intend to publish shortly; these documents will seek views on the future development of airports and air services in each region over the next 30 years.

  Light Railway and Tram Schemes
  Mr. George Howarth
  To ask the Secretary of State for Transport what plans he has to expand light railway and tram schemes. [63743]

  Mr. Jamieson
  Our 10-Year Plan reflects our commitment to light rail in major cities. However, whether light rail offers the most appropriate and cost-effective response to local transport needs is a matter, in the first instance, for the local authorities concerned, to consider while formulating and reviewing their Local Transport Plans. Thereafter, any light rail scheme or other major transport project would need to undergo rigorous appraisal, and examination under any relevant statutory procedures, before funding approval could be considered.

  Buses (Pupil Overcrowding)
  31. Mr. Edwards
  To ask the Secretary of State for Transport what recent representations he has received about changing the law on pupil overcrowding on scheduled bus services. [63745]

  Mr. Spellar
  We have received no recent representations, other than the parliamentary questions tabled by my hon. Friend the Member for Monmouth at the end of last year, which dealt with overcrowding on a bus route in Monmouth and related matters.

  Fire Safety
  Mrs. May
  To ask the Secretary of State for Transport what(a) statutory duty and (b) guidelines have been given to fire authorities on giving fire safety advice to the public. [60439]

  Mr. Raynsford
  I have been asked to reply.

  Fire authorities have a statutory duty under The Fire Services Act 1947 1(1)(f) to secure efficient arrangements for the giving, when requested, of advice in respect of buildings and other property in the area of the fire authority as to fire prevention, restricting the spread of fires, and means of escape in case of fire.

  In addition to this, we intend to introduce a duty on fire authorities to secure efficient arrangements for providing advice, assistance and encouragement in respect of the steps to be taken to prevent fires in their area and to prevent the death of, or injury to, any person being caused by such a fire. This will form part of a Regulatory Reform Order, which will be out for consultation shortly.

  The National Community Fire Safety Centre was established in 1998 to provide a resource for brigades in community fire safety work, whose toolbox gives guidance on advising the public on fire safety issues as well as examples of best practice.

  Authority

  Scheme

  Type

  1998

  West Yorkshire PTA

  East Leeds Quality Bus Project

  Guided

  1999

  Bradford

  A641 Manchester Road Quality Bus Project

  Guided

  West Midlands PTA

  Town Centre Strategy

  Infrastructure

  Illegal Fuel
  John Barrett
  To ask the Secretary of State for Transport what action the Government are taking to tackle fuel fraud; and how much has been allocated to this task in the last three years. [62944]

  John Healey
  I have been asked to reply.

  Following consultation in the November 2001 pre-Budget report, the Chancellor announced in the Budget a comprehensive strategy to tackle the rising problem of oils fraud including the release of additional resources in 2002–03 to enable the effective enforcement of these new controls, involving the deployment of more staff and investment in new technology. Details of this are contained in the Budget 2002 Press Notice, HMG 2, published on 17 April.

  Customs' estimate of officers wholly dedicated to the oils sector over the last three complete financial years is:

  Dedicated oils officers

  1999–2000

  172

  2000–01

  253

  2001–02

  285

  These officers assure and assist compliant traders and also tackle those who seek to evade revenue through fraudulent activities.

  In addition, multi-functional Customs officers undertake a range of activities in their areas of responsibility including work in the oils sector. It is not possible to separate the time spent by these officers on oils work alone.

  Motoring Costs
  Mr. Cox
  To ask the Secretary of State for Transport what research his Department has carried out as to the cost of running a private motor car within the Greater London area. [65053]

  Mr. Jamieson
  The average expenditure on motoring per car per week for people living in Greater London, averaged over the period 1998–99 to 2000–01, was £54.30.

  Bus Priority Schemes
  Mrs. May
  To ask the Secretary of State for Transport what bus priority schemes have been introduced since 1997, giving(a) the date of introduction of the scheme and (b) the body introducing and responsible for the scheme, distinguishing between (i) guided bus systems, (ii) infrastructure improvements and (iii) other schemes. [64967]

  Mr. Spellar
  [holding answer 27 June 2002]: Since 1997 we have approved or provisionally approved the following bus-based major local transport schemes in England outside London. The table lists the schemes, their type, the local authority and the year of approval.
  205W

  Authority

  Scheme

  Type

  2000

  Bradford

  South Bradford Integrated Transport Improvements

  Infrastructure

  Bradford

  City Centre Integrated Transport Scheme

  Infrastructure

  Cheshire

  Chester-Deeside Transport Scheme

  Guided

  Derby

  Connecting Derby

  Infrastructure

  Doncaster

  A638 Great North Road Quality Bus Corridor

  Infrastructure

  Greater Manchester PTA

  Urban Traffic Management Scheme

  Other

  Newcastle

  Quayside Public Transport Project

  Infrastructure

  Warwickshire

  Nuneaton Development Project

  Infrastructure

  Plymouth

  Northern Corridor Scheme

  Infrastructure

  Wiltshire

  Salisbury Integrated Transport Measures

  Infrastructure

  Southend

  Al3 Transport Corridor

  Infrastructure

  Tyne and Wear PTA

  Centrelink

  Infrastructure

  Tyne and Wear PTA

  Stephensons Corridor Joblink

  Infrastructure

  Walsall

  Integrated Transport Strategy

  Infrastructure

  Warrington

  Urban Traffic Management Scheme

  Other

  West Midlands PTA

  Hagley Road Bus Showcase

  Infrastructure

  West Midlands PTA

  Outer Circle Bus Showcase

  Infrastructure

  West Sussex

  Fastway

  Guided

  Wolverhampton

  Centre Access Scheme

  Infrastructure

  2001

  Barnsley

  Barnsley Interchange

  Infrastructure

  Durham

  Belmont Interchange

  Infrastructure

  Greater Manchester PTA

  Northern Orbital QualityBus Corridor

  Infrastructure

  Kent

  Fastrack

  Guided

  Leeds

  A65 Quality Bus Project

  Guided

  Surrey

  School Bus Initiative

  Other

  Tyne and Wear PTA

  Four Lane Ends Interchange

  Infrastructure

  West Midlands PTA

  Masshouse Circus

  Infrastructure

  2002

  Greater Manchester PTA

  South East Manchester Quality Bus Corridor

  Infrastructure

  Allocation of road space is a matter for the local highway authority. In addition to the major schemes, local authorities outside London indicate that they proposed to implement over 100 smaller scale bus priority schemes in both the last and present financial years.

  In London, since 3 July 2000 the implementation of bus priority measures has been the responsibility of the London local authorities and Transport for London (which reports to the Mayor). They are taking forward the London Bus Initiative, which is a strategic initiative to improve the service on London's key bus routes and includes priority measures. This £60 million initiative is being funded by the Government, including £50 million from the Capital Modernisation Fund.

  Before 3 July 2000, bus priority measures in London were taken forward by the London local authorities through the London Bus Priority Network initiative.

  Details about schemes in London and specific smaller schemes outside, including their timetable for introduction and detailed cost break-down, are not kept centrally.

  Network Rail
  Chris Grayling
  To ask the Secretary of State for Transport who is selecting the initial non-executive board members of Network Rail; and who has selected the member organisations of Network Rail. [66053]

  Mr. Jamieson
  The appointments of directors and members are for Network Rail to determine.

  Mr. Austin Mitchell
  To ask the Secretary of State for Transport for what reason the bridging loan to Network Rail is shown on the balance sheet of the Strategic Rail 206W
  Authority; what assets the Strategic Rail Authority has to back the loan; what consultations took place with the European Commission about whether this loan should be included in Government accounts; and to whom the loss is charged if there is default on the loan. [65486]

  Mr. Jamieson
  The Comptroller and Auditor General. in his capacity as statutory auditor of the Strategic Rail Authority (SRA), has concluded that Network Rail should be accounted for as a subsidiary of the SRA. At the same time, the Office for National Statistics has confirmed that Network Rail—once its board has been confirmed by its members—would not be classified as a public sector organisation. The ONS classification is based upon the European System of Accounts 1995.

  The contingent credit facility has been notified as a potential state aid to the European Commission, and it set out in the statutory contingent liability minute laid before Parliament on 27 June. As a contingent liability, the credit facility would only score as public expenditure in the extremely unlikely event of it being drawn.

  The assets of the SRA were outlined in its 2000–01 annual report and will be updated in its 2001–02 annual report to be published shortly.

  Road Accidents
  Mr. Hancock
  To ask the Secretary of State for Transport how many deaths and serious injuries there were in road accidents in 2001; and if he will make a statement. [66466]
  207W
  Mr. Jamieson
  Provisional figures, published in June, show that there were 3,443 people killed and 37,094 seriously injured on the public roads in Great Britain in 2001.

  This year, despite our firm commitment to improving road safety, it is sad to see an increase in the number of road deaths when both serious and slight injuries have continued to fall. We will he looking to see if there are identifiable reasons for this year's increase in the number of road deaths.

  Delay Indicator Maps
  Mr. Don Foster
  To ask the Secretary of State for Transport if he will place copies of the Highways Agency delay indicator maps in the Library; and if he will make a statement. [66213]

  Mr. Jamieson
  The Highways Agency's annual report for 2000–01 contains on page 39 the latest version of a map depicting stress levels on the trunk road network. The annual report was published on 31 January 2002 and copies were placed in the Libraries of the House.

  Road Schemes
  Mr. Don Foster
  To ask the Secretary of State for Transport (1) what road schemes will be proposed in the next round of local transport plan annual progress reports; and if he will make a statement; [66301]

  (2) when the next set of local transport plan annual progress reports will be published; and if he will make a statement. [66300]

  Mr. Jamieson
  Our guidance to authorities makes clear that local transport plan annual progress reports for 2001–02 should be made available to the public and easily obtainable at a reasonable cost. The reports are required to be submitted to my Department by English local authorities outside London by 31 July 2002 as are any proposals for new major local transport schemes. When received, both the reports and any bids for new major schemes will be considered as part of the determination of local transport capital settlement for 2003–04.

  Ladbroke Grove Rail Inquiry
  Mr. Don Foster
  To ask the Secretary of State for Transport when the next progress report on the Ladbroke Grove rail inquiry part I will be published; and if he will make a statement.[66307]

  Mr. Jamieson
  On 29 April 2002, the Health and Safety Commission (HSC) stated that in future it will report progress on all 295 public inquiry recommendations in a single report under eight broad headings. This will include the Southall inquiry, so far as it is still relevant, the joint inquiry into Train Protection Systems, and the two Ladbroke Grove inquiries. The HSC plan to publish this report in November 2002.

  The HSC and the Health and Safety Executive (HSE) will continue to track action on each recommendation to ensure that none are overlooked. The HSC believes that presenting the information in this format will help everyone involved to gain a better appreciation of the overall safety benefits being delivered as well as sharpening focus on the key issues.

  Bus Services
  Mr. Don Foster
  To ask the Secretary of State for Transport what(a) guidance has been given to local authorities and (b) legislation is in place covering (i) uncompetitive practices, (ii) improving integration and timetabling, (iii) regulation and de-regulation and (iv) quality partnerships for local bus services; and if he will make a statement. [66004]

  Mr. Jamieson
  My Department's guidance to local authorities on Local Transport Plans covers many of these matters. It emphasises the need for bus policies and provision to be integrated with other transport policies and encourages through-ticketing, better connections and co-ordination of services. Good practice guidance partnerships and on public transport interchange have been produced on our behalf by consultants. The Office of Fair Trading will shortly be issuing guidance on the ticketing schemes block exemption and the application of the competition test contained in the Transport Act 2000, for the benefit of both local government and bus operators.

  The relevant legislation is Part II of the Transport Act 2000. chapter I of Part I of the Competition Act 1998 and the Competition Act 1998 (Public Transport Ticketing Schemes Block Exemption) Order 2001 (SI 2001 No. 319). Other legislation on the regulation of buses is in the Public Passenger Vehicles Act 1981 and the Transport Act 1985.

  Secure Stations Scheme
  Mr. Don Foster
  To ask the Secretary of State for Transport if he will list the stations which are not accredited under the secure stations scheme, indicating the total number of passengers using those stations used by more than 100,000 passengers each year; and if he will make a statement. [66003]

  Mr. Jamieson
  The secure stations scheme is voluntary.

  Currently 143 stations are accredited under the scheme. Approximately one third of annual national rail passenger journeys involve these stations. Some TOCs are committed to seeking accreditation for all their stations.

  Quiet Lanes
  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002, Official Report, column 775W, on quiet lanes, what the total length of roads designated as quiet lanes is for each local authority; and what proportion of these roads is within each road classification. [66065]

  Mr. Jamieson
  The information required to answer the question is not recorded centrally.

  London Underground
  Mr. Austin Mitchell
  To ask the Secretary of State for Transport for what reason preferred bidder status was conceded to contractors for the London Underground PPP before closing major parts of the deal; and if he will assess the costs and benefits of reducing competition before final agreements were reached. [65480]
  209W
  Mr. Jamieson
  The negotiation of the PPP contracts is a matter for London Underground. However, I understand that, in line with guidance from the Office of Government Commerce, preferred bidder decisions were taken at the time they were because it was judged that the advantages to be gained from maintaining competitive tension were outweighed by the disadvantages of higher procurement costs and an increased risk of bids being withdrawn.

  Mr. Austin Mitchell
  To ask the Secretary of State for Transport (1) whether the seven-and-a-half-year review of the 30-year PPP contract for the London Underground is an upwards only review; and what extra costs may fall on his Department for cost overruns; [65482]

  (2) what price protection London Underground Ltd has for the 22.5 years for which pricing is not yet established under the PPP; and what the cost is of contract termination provisions of periodic review. [65587]

  Mr. Jamieson
  In line with the provisions of the GLA Act 1999, the Secretary of State for Transport intends to appoint an independent arbiter. At periodic reviews, the arbiter has the power to set prices at a level appropriate for an economic and efficient infrastructure company. Prices set by the arbiter at these reviews could be either higher or lower than those currently expected. At this stage, it is not possible to say either by how much or in which direction they might vary.

  Mr. Austin Mitchell
  To ask the Secretary of State for Transport how much will be invested in the tube under the London Underground PPP; how much of this comes from the private sector; and how much of the private sector contribution the Government have guaranteed to pay back. [65484]

  Mr. Jamieson
  Under our plans for modernising the London Underground, private sector infrastructure companies will carry out an investment and maintenance programme that is expected to amount to at least £16 billion over the first 15 years of the contracts. This will be funded through a combination of private finance and payments from London Underground. The payments London Underground make will vary in line with the level of performance the infrastructure companies deliver. In total, we expect some £6.2 billion in private finance to be raised in the first 15 years.

  The Government will not guarantee any private sector finance. However, the Secretary of State does intend to issue a letter of comfort in relation to the London Underground PPPs. This is intended to clarify his role in relation to the Greater London Authority and Transport for London, including his intentions towards providing funding for London Underground. This letter of comfort was reported to Parliament using the Minute procedure on 20 March 2002.

  Mr. Austin Mitchel
  To ask the Secretary of State for Transport what estimate he has made of the rate of return the private consortia will earn on the London Underground PPP; and what assessment he has made of the fees earned by the financial and legal consultants engaged on developing the PPP. [65485]

  Mr. Jamieson
  I refer my hon. Friend to the answers given to the hon. Member for Carshalton and Wallington (Tom Brake) on 14 May 2002,Official Report, columns 522–23W.
  210W
  Tom Brake
  To ask the Secretary of State for Transport which business men advised the Government to adopt the structure chosen for the tube PPP; which companies they worked for; and who they work for now. [66495]

  Mr. Jamieson
  The Government sought a wide range of views before deciding to proceed with the manifesto commitment to modernise the underground through a Public Private Partnership.

  Public Transport (Safety)
  Mr. Redwood
  To ask the Secretary of State for Transport what safety requirements are imposed on(a) bus operators and (b) train operators to secure luggage to avoid it hitting passengers when (i) braking and (ii) cornering. [65634]

  Mr. Spellar
  [holding answer 1 July 2002]: (a) Regulation 100 of the Road Vehicles (Construction and Use) Regulations 1986 requires that the load carried by a motor vehicle shall at all times be so secured, if necessary by physical restraint other than its own weight, and be in such a position, that neither danger nor nuisance is likely to be caused to any person or property by reason of the load or any part thereof falling from that vehicle.

  The Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 require that anyone taking a cumbersome or bulky article or one that may cause an annoyance to another passenger shall place it on the vehicle where either the driver, inspector or conductor recommend.

  (b) The Health and Safety Executive's (HSE) Railway Safety Principles and Guidance includes guidance on railway construction to ensure that luggage is sufficiently secured to avoid hitting passengers when braking and cornering.

  Mr. Redwood
  To ask the Secretary of State for Transport what assessment his Department has made of evidence received as to whether seat belts would(a) save lives and (b) limit injuries in (i) train and (ii) bus crashes. [65638]

  Mr. Spellar
  [holding answer 1 July 2002]: The use of seat belts in buses for non-urban operation is estimated by the Department to reduce fatal and serious injuries to seated passengers by 30– cent.

  The Department has made no such assessment on the fitting of seat belts to trains. However, the Health and Safety Executive (HSE), which is responsible for monitoring and enforcing safety on the railways, advises that although the use of properly fitting seat belts could in certain circumstances protect passengers in a train accident, it is not persuaded that the fitting of seat belts in trains is a reasonably practicable safety precaution. While some passengers may use seat belts voluntarily, there would be little point in fitting them without reasonable expectation that they would be relatively widely used.

  Drug and Alcohol Screening
  Mr. Steinberg
  To ask the Secretary of State for Transport what statutory requirements there are for drug and alcohol screening tests for employees of transport companies. [65789]
  211W
  Mr. Jamieson
  There are no statutory screening tests for employees of transport companies.

  The Government are aware that many transport operators already have strict policies that may include screening programmes.

  Mr. Steinberg
  To ask the Secretary of State for Transport what plans he has to introduce drug screening tests alongside breathalysers for traffic offences. [65790]

  Mr. Jamieson
  Drug screening is already used by the majority of police forces who have trained officers in the techniques of drug recognition and tests of impairment. Devices that detect the presence of drugs chemically are being developed and tested by a number of commercial companies. If these prove successful and appropriate, they may be used to assist the police at the roadside. Under current legislation the police do not have the same power to test drivers at the roadside for possible drugs as they do for alcohol. It is the Government's intention to amend the legislation to enable this.

  Railtrack Group
  Mr. Chope
  To ask the Secretary of State for Transport, (1) pursuant to his statement of 27 June, what his estimate is of the value of the relief to be offered to Railtrack Group PLC in respect of corporation tax on capital gains; [66508]

  (2) pursuant to his statement of 27 June, whether Railtrack employees with shares in Railtrack Group will be exempt from capital gains tax on the realisation of their shares, pursuant to the proposals from Network Rail. [66507]

  Mr. Jamieson
  The Government have been advised that Railtrack Group should be able to take advantage of the exemptions referred to in paragraphs 24 and 25 of the Non-Statutory Contingent Liability minute laid before the House of Commons on 27 June. This would ensure that, in all likelihood, Railtrack Group incurs no tax liability as a result of the Railtrack plc disposal.

  Mrs. May
  To ask the Secretary of State for Transport if he will list the projects given in Railtrack's Network Management Statement 2001 that, by the end of March 2002, had(a) been completed, (b) been started but not completed, indicating the expected completion date and (c) not been started, indicating the expected start date. [66601]

  Mr. Jamieson
  Railtrack advise that details of the work identified in the 2001 Network Management Statement (NMS) against details of work that has been completed, started but not completed, and of work that has not been started, will form a paper to be published as part of an update to the 2001 NMS. It is expected that this will be published in the summer of 2002.

  Mrs. May
  To ask the Secretary of State for Transport what duty is placed on the administrators of Railtrack PLC to provide accurate and timely information to Railtrack Group. [66529]

  Mr. Jamieson
  This is a matter for the Administrators who are Officers of the High Court.

  Asset Maintenance Plan
  Mrs. May
  To ask the Secretary of State for Transport if he will make a statement on(a) the timing, (b) the responsibility for and (c) the basis of preparation of the asset maintenance plan. [66534]

  Mr. Jamieson
  Railtrack's duties in respect of asset maintenance are primarily those set out in its network licence, in particular Conditions 7 and 24. Railtrack also has duties set out in regulated track access agreements with train operating companies. Railtrack produced asset maintenance plans for civil engineering (track and structures) in 1998 and for signalling assets in 1999. These formed critical inputs to the Rail Regulator's periodic review of access charges which concluded in October 2000. Railtrack also must produce a Network Management Statement (NMS) annually, in compliance with Condition 7 of its network licence. The NMS sets out how the company will manage the operation, efficiency and capability of its assets to meet the reasonable requirements of its customers.

  Night Flights
  Mrs. May
  To ask the Secretary of State for Transport when the Government's appeal against the decision of the European Court of Human Rights on the banning of night flights will be heard; and if he will make a statement. [65565]

  Mr. Jamieson
  I refer the hon. Member to the answer that I gave to the hon. Member for Loughborough (Mr. Reed) on 19 December 2001,Official Report, columns 519–20W. The Judgment of the Third Section of the Court, issued on 2 October 2001, would not require a ban on night flights. The hearing before the Grand Chamber of the Court in the case of Hatton and Others v. the United Kingdom is scheduled for 9 October 2002.

  Mrs. May
  To ask the Secretary of State for Transport what recent representations he has received on noise relating to night flights at East Midlands airport. [65563]

  Mr. Jamieson
  I and my Department received over recent months a substantial number of personal and written representations on this subject, some advocating and others opposing designation of the airport for the purpose of imposing night restrictions.

  Pedestrian Environment
  Mrs. May
  To ask the Secretary of State for Transport what research he has conducted into improving the pedestrian environment for the disabled; if he will place a copy of results in the Library; and if he will list schemes introduced in the last two years to improve the pedestrian environment for the disabled. [66613]

  Mr. Jamieson
  My Department has carried out a wide range of research over a number of years aimed at improving access to the pedestrian environment for disabled people. Research findings have been disseminated in the form of guidance for local authorities and others.

  We are currently finalising a comprehensive guidance document based on research to establish best practice in providing for disabled people both in the pedestrian environment and in transport infrastructure. "Inclusive Mobility—A Guide to Best Practice on Pedestrian and Transport Infrastructure" has been produced by my

  213W
  Department with support from Transport for London, the Institution of Highways and Transportation, the County Surveyor's Society, the Association of Transport Co-ordinating Officers and the Passenger Transport Executive Group. The guidance will help local authorities and transport providers to understand and fulfil their duties under Part III of the Disability Discrimination Act 1985. I will place a copy in the Library when it is published.

  We do not hold details of individual schemes that have been introduced by local authorities.

  Heathrow Terminal 5
  Mrs. May
  To ask the Secretary of State for Transport, pursuant to the statement by the right hon. Member for Tyneside, North (Mr. Byers),Official Report, 20 November 2001, column 178, on Heathrow Terminal 5, when he will open the consultation on extending the night quota period; and if he will make a statement. [65567]

  Mr. Jamieson
  We aim to commence consultation on all aspects of the next night noise regime for the BAA London airports before the end of this year. It is likely to be a two stage process.

  Mrs. May
  To ask the Secretary of State for Transport, pursuant to the statement by the right hon. Member for North Tyneside,Official Report, 20 November 2001, column 178, on Heathrow Terminal 5, if he will make a statement on Government policy on the limit on the number of flights at Heathrow when Terminal 5 at Heathrow is built. [65566]

  Mr. Jamieson
  The Secretary of State for Transport, Local Government and the Regions imposed a condition on the planning consent for Heathrow Terminal 5, requiring that from the date the core terminal building opens for public use, the number of occasions on which aircraft may take-off or land at Heathrow shall not exceed 480,000 during any period of one year.

  Company name

  Activity

  Issued share capital

  Percentage SRA control

  BRB (Residuary) Ltd.

  Custodian of property, rights and liabilities previously belonging to the British Railways Board.

  1

  100

  Rail Documentation and Drawing Services Ltd.

  Custodian of rolling stock drawing and documents.

  1

  100

  DoA Ltd.

  DoA Ltd. was acquired by SRA Investment Company Ltd. on 1 October 2001 for £1 from the former DTLR. DoA Ltd. holds deeds of assumption with passenger transport executives (PTEs) requiring the repayment of capital sums and interest to the PTEs.

  1

  100

  SRA Investment Company Ltd.

  On 1 July 2001, the authority acquired SRA Investment Company Ltd.for the purpose of holding shares in new ventures in which the authority has an interest. It currently has a 100 per cent. holding in DoA Ltd. and a 50 per cent. holding in Cross London Rail Links Ltd.

  100

  100

  Cross London Rail Links Ltd.

  On 1 August 2001. the SRA Investment Company. together with Transport Trading Ltd. acquired Cross London Rail Links Ltd. This is a joint venture for the purpose of undertaking development and design work for two new train routes across London.

  100

  50

  Bridge Rail Ltd.

  Dormant

  1

  100

  British Rail Engineering Ltd.

  Dormant

  1.000.000

  100

  British Rail Ltd.

  Dormant

  1

  100

  British Railways Board Ltd.

  Dormant

  1

  100

  British Transport Hotels Ltd.

  Dormant

  9.582,537

  100

  Britravel Nominees Ltd.

  Dormant

  100

  100

  Cross Channel Catering Ltd.

  Dormant

  100

  100

  Crossrail Ltd.

  Dormant

  2

  100

  Goldings Rail Ltd.

  Dormant

  1

  100

  West Coast Main Line
  Mrs. May
  To ask the Secretary of State for Transport if he will estimate the cost of the West Coast Main Line upgrade; and if he will make a statement. [66549]

  Mr. Jamieson
  I refer the hon. Member to my answer of 8 May 2002,Official Report, column 2 I 6W, to the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan).

  East Midlands Airport
  Mrs. May
  To ask the Secretary of State for Transport what criteria he used to determine that East Midlands Airport should not be designated under section 78 of the Civil Aviation Act 1982 in relation to night flights. [65564]

  Mr. Jamieson
  The decision not to designate the airport is explained in my letter of 18 June to North West Leicestershire district council. I have placed a copy of that letter in the Library of the House.

  Mrs. May
  To ask the Secretary of State for Transport what meetings he or his predecessor had with representatives of North West Leicestershire district council prior to his decision not to designate East Midlands airport under section 78 of the Civil Aviation Act 1982 in relation to night flights. [65562]

  Mr. Jamieson
  I met representatives of North West Leicestershire district council, along with others, on 13 November last, to discuss this matter. Subsequently the Department also received further written representations from the council.

  Strategic Rail Authority
  Mrs. May
  To ask the Secretary of State for Transport if he will list the(a) subsidiary companies, (b) agencies and (c) other boards to the Strategic Rail Authority, giving their (i) responsibilities, (ii) powers and (iii) current turnovers. [66596]

  Mr. Jamieson
  The Strategic Rail Authority has the following subsidiaries:
  215W

  Company name

  Activity

  Issued share capital

  Percentage SRA control

  Hays Rail Ltd.

  Dormant

  1

  100

  OQS Rail Ltd.

  Dormant

  1

  100

  Pullman Car Company Ltd.

  Dormant

  1.244,000

  100

  Rail Property Ltd.

  Dormant

  1

  100

  RailDirect Ltd.

  Dormant

  1

  100

  RFD (Channel Tunnel) Ltd.

  Dormant

  10.100

  100

  SRA Company Ltd.

  Dormant

  100

  100

  SRA Transport Ltd.

  Dormant

  5,000

  100

  Thameslink 2000 Ltd.

  Dormant

  2

  100

  Tower Rail Ltd.

  Dormant

  2

  100

  Notes:

  1. No current turnover figures are available for the dormant companies or the recently formed companies.

  2. The latest available figure for BRB (Residuary) Ltd. is £4.7 million for the two months following formation of the subsidiary to the end of March 2001.

  East London Line
  Joan Ruddock
  To ask the Secretary of State for Transport when he expects the start of construction works on the southern extension of the East London Line. [64294]

  Mr. Jamieson
  London Underground are currently undertaking advance works on the northern extension. The Strategic Rail Authority, together with Transport for London and London Underground, is looking at the programme for the project as a whole, including the southern extension, as part of a project review. The review should be completed in the autumn.

  Public Transport (West Sussex)
  Mr. Soames
  To ask the Secretary of State for Transport what steps he is taking to improve co-ordination between local bus and rail services in West Sussex. [66146]

  Mr. Spellar
  As part of the Government's Local Transport Plan process, West Sussex county council are introducing a number of initiatives through their plan to improve links between bus and rail services. These include the upgrade of 6 interchange stations (at Worthing, Chichester, Three Bridges, Haywards Heath, Crawley and Horsham), improvements to Railbus links, particularly with new housing developments, and the introduction and improvement of Passenger Information Terminals and freephone telephone links to the County's travel information line.

  Coastal Emergency Planning
  Mr. Simon Thomas
  To ask the Secretary of State for Transport what recent discussions he has held with local authorities regarding a new statutory duty for coastal emergency planning. [63748]

  Mr. Jamieson
  As part of the review process which culminated in the publication of the revised "National Contingency Plan for Marine Pollution from Shipping and Offshore Installations" in January 2000, officials of my Department engaged in discussions, in a working group which included representatives of local authorities, on the subject of a statutory duty to plan for shoreline clean-up and to implement such plans following marine pollution incidents.

  More recently, the issue of emergency planning has been addressed in the Government's Emergency Planning Review. In the event of a generic statutory emergency
  216W
  planning duty being introduced under new legislation following that Review, the question would arise as to whether such a duty should apply to coastal local authorities' preparation of contingency plans for shoreline clean-up.

  Road Safety
  Gillian Merron
  To ask the Secretary of State for Transport what plans he has to promote safer driving. [63727]

  Mr. Jamieson
  One of our key road safety goals is to improve the standard of driving and our road safety strategy sets out a number of measures to achieve this. In particular we want to ensure that drivers obtain better skills and gain more experience before they take the driving test.

  Quiet Road Surfacing
  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002,Official Report, column 776W, on quiet road surfacing, if he will list the proportion of quiet road surfacing in each case according to road classification. [66066]

  Mr. Jamieson
  The information required to answer the question is not recorded centrally.

  Rural Bus Challenge
  Mrs. May
  To ask the Secretary of State for Transport (1) if he will list the wards served by the projects that are supported by the Rural Bus Challenge; [66566]

  (2) when he will announce the results of the latest Rural Bus Challenge. [66565]

  Mr. Jamieson
  The results of the Rural Bus Challenge 2001 competition were announced in January this year, and we anticipate the results of the 2002 competition to be announced early next year.

  A list of the projects that have been awarded Rural Bus Challenge funding in each of the four competitions since it was introduced in 1998 is deposited in the Library of the House. A total of £69.8 million has been awarded to 213 schemes.

  Variable Speed Limits
  Mr. Don Foster
  To ask the Secretary of State for Transport what research has been conducted(a) by and (b) for his Department on the effect of variable speed limits; and if he will make a statement. [66005]

  Mr. Jamieson
  The Transport Research Laboratory (TRL) monitored trials on the effectiveness of variable speed limits outside schools. Variable message signs were installed outside schools that reduced the speed limit typically one hour around school arrival and leaving times. The results showed very little reduction in vehicle speeds and the report concluded that as a speed reducing feature they were ineffective.

  Road Maintenance Backlog
  Mr. Don Foster
  To ask the Secretary of State for Transport how he will ensure that funds allocated to local authorities to clear the road maintenance backlog are used for this purpose. [66010]

  Light rail scheme

  Start date

  Tyne and Wear Metro

  Original system opened between 1980 and 1984

  Newcastle airport extension opened 1991

  Extension to Sunderland and South Hylton opened on 31 March 2002

  Docklands Light Railway (London)

  First phase opened 1987

  Bank extension opened 1991

  Beckton extension opened 1994

  Lewisham extension opened 1999

  Manchester Metrolink

  Altrincham-Bury opened 1992

  Extension to Salford Quays and Eccles opened in 1999 and 2000 respectively

  South Yorkshire Supertram (Sheffield)

  Opened in stages during 1994–95

  Midland Metro

  Opened in 1999

  Croydon Tramlink

  Opened in June 2000

  Mrs. May
  To ask the Secretary of State for Transport how many light rail passengers there have been in each of the last five years. [66570]

  Mr. Jamieson
  The following is the most recent information available:

  Million

  Year

  Number of light rail Year passenger journeys

  1996–97

  73

  1997–98

  79

  1998–99

  85

  1999–2000

  94

  2000–01

  120

  Mrs. May
  To ask the Secretary of State for Transport if he will make a statement on each proposed light rail scheme under consideration. [66578]

  Mr. Jamieson
  The light rail schemes currently being appraised by the Department for Transport on which
  218W
  Mr. Jamieson
  The Best Value regime, introduced by the Local Government Act 1999, requires continuous improvement in highway maintenance. Authorities are required to report annually against Best Value indicators, which measure carriageway condition on all classes of local authority roads.

  DfT is working with local authorities to develop highway management systems which will lead to more consistent standards and a better system for effective targeting of resources.

  Light Transport Schemes
  Mrs. May
  To ask the Secretary of State for Transport if he will list the light rail schemes in operation, giving(a) the start date of operation and (b) the Government body responsible for oversight. 1665771

  Mr. Jamieson
  There are currently six light rail schemes in operation, as listed in the table. The Health and Safety Executive is responsible for the regulation of tram and light rail systems and tram drivers must also comply with certain highways legislation, enforced by the police.

  promoters are seeking a provisional view before possible Transport and Works Act applications, are as follows:

  Merseytram Line 1

  Manchester Metrolink—Stockport Extension.

  In addition, my officials are also appraising the proposed upgrade to the Blackpool Tramway.

  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002, Official Report, column 773W, on light transport schemes, if he will(a) list the occasions on which his Department has met the promoters of individual schemes, giving the scheme and promoter in each case, (b) list the schemes to which information, support and guidance has been given and (c) list the occasions on which workshops on light rail and guided bus schemes have taken place, giving the scheme on each occasion, since 7 June 2001. [66046]

  Mr. Jamieson
  The following charts contain the available information on meetings and workshops. In
  219W
  addition, information, support and guidance has been provided by my Department and the relevant Government

  List A—Meetings held with promoters of light rail schemes since 7 June 2001

  Scheme and Promoter

  Number of meetings

  Blackpool Tram—Blackpool borough council

  2

  Bristol and South Gloucestershire Tram Scheme—Bristol city council and South Gloucester council

  3

  Croydon Tramlink

  2

  Docklands LR

  1

  Hull LRT—Hull city council

  1

  Leeds Supertram—West Yorkshire Passenger Transport Executive

  3

  Manchester Metrolink Extensions—Greater Manchester Passenger Transport Executive

  9

  Merseytram—Merseytravel

  5

  Midland Metro—Centro

  1

  Nottingham Express Transit—Nottingham city council

  3

  South Hampshire Rapid Transit—Hampshire county council

  2

  South Yorkshire Supertram Extensions—South Yorkshire Passenger Transport Executive

  3

  Meetings held with promoters of guided bus schemes since 7 June 2001

  Barnsley Interchange and Busway—South Yorkshire Passenger Transport Executive

  1

  South Bradford Integrated Transport Scheme—Bradford city council

  1

  Cambridge Guided Bus—Cambridge county council

  1

  Cambridge Guided Bus—Cambridge Rapid Transport System (Commercial)

  1

  Chester Deeside Transport Scheme—Chester city council

  2

  Doncaster Bus—South Yorkshire Passenger Transport Executive

  4

  Crawley Fastway—West Sussex county council

  3

  Kent Fastrack—Kent county council

  2

  Leeds A65—West Yorkshire Passenger Transport Executive

  1

  Luton-Dunstable Translink—Bedfordshire county council and Luton borough council

  5

  List B—Workshops

  Workshops

  Workshop on monitoring processes for light rail schemes in operation

  29 June 2001

  Approximately 45 attended from various promoters.

  Workshop on light rail appraisal

  21 February 2002

  Approximately 45 attended from various promoters.

  Workshop on other major public transport schemes including guided bus

  1 March 2002

  Approximately 50 attended from various promoters.

  'Surgery' on funding/appraisal issues before submission of annual progress reports (31 July 2002)

  19 and 20 June 2002

  Attendance included one guided bus scheme.

  Road Widening
  Mr. Don Foster
  To ask the Secretary of State for Transport what schemes for road widening under the 10-year plan have been(a) proposed, (b) accepted and (c) started; what the location and length of road is in each case; what research has been conducted into the effects on (i) traffic, (ii) safety, (iii) congestion, (iv) social and environmental impacts and (v) economic effects in each case; and if he will make a statement. [663101

  Mr. Jamieson
  There are currently 15 on-line widening schemes in our targeted programme of improvements (TPI). As with all such schemes a substantial amount of assessment work is undertaken which looks at the current situation and the impact of the proposals. This is published during the statutory procedures and may be debated at a public inquiry, if one is necessary, and then by the Secretary of State when deciding whether to authorise the making of the necessary orders.

  The following such schemes are under construction:

  AI Willowburn to Denwick Improvement (Northumberland4.2km)

  A 11 Roudham Heath to Attleborough Dualling (Norfolk-9.9km)

  A43 M40 to B4031 Dualling (Oxfordshire-6.5km)

  A46 Newark to Lincoln Improvement (Lincolnshire-28km).

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  Office to the promoter of every scheme to the extent requested, by telephone, email or post.

  Construction on the following will start in the next financial year:

  M25 J12–15 Widening (Surrey–10.9km)

  M60 J5–8 (Greater Manchester–7.4km).

  And statutory procedures have still to be completed on the following schemes:

  A74(M) Carlisle to Guardsmill upgrading to motorway (Cumbria–9km)

  AI Bramham to Wetherby (N. Yorkshire–9km)

  Al Dishforth to Leeming (N. Yorkshire–22km)

  Al Leeming to Barton (N. Yorkshire—l6km)

  A2 Bean to Cobham Widening Phase 1 (Kent–4.lkm)

  A2 Bean to Cobham Widening Phase 2 (Kent–6.5km)

  A11 Fiveways to Thetford Improvement (Suffolk–14.9km)

  A11 Attleborough Bypass Improvement (Norfolk–5.5km)

  A46 Newark to Widmerpool Improvement (Nottinghamshire28km).

  Other widening schemes have been proposed as possible solutions to transport problems being investigated under the programme of multi-modal (MMS) and road based studies. So far the only widening scheme which the Secretary of State has accepted coming out of an MMS is the proposal to widen the Al4 between Cambridge and Huntingdon and the Cambridge Northern Bypass. The Highways Agency are now undertaking more detailed work on the scheme

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  design than was possible during the study with a view to it being added to the TPI in the near future. Again substantial work will be undertaken on all the effects of the scheme during future statutory processes.

  Journey Times
  Mr. Don Foster
  To ask the Secretary of State for Transport what recent research has been conducted(a) for and (b) by his Department on predicting journey times for (i) freight, (ii) passengers and (iii) car journeys; and if he will make a statement [66312]

  Mr. Jamieson
  The Highways Agency has carried out research to investigate the feasibility of providing road users with predictions of journey times to selected local destinations, such as airports, for display on variable message signs.

  The Highways Agency has recently completed a study of journey times experienced around motorways in the west midlands and is presently considering options for wider promulgation of the results of the study.

  The Highways Agency is also analysing the suitability of journey time data collected by a number of systems both within the Agency and developed by the private sector, for the purposes of scheme evaluation by the Agency.

  The Department is undertaking research at present to provide a better understanding of the causes of journey time variability in congested conditions on motorways.

  EU Working Time Directive
  Mr. Don Foster
  To ask the Secretary of State for Transport what(a) guidance and (b) legislation (i) has been given or is in place and (ii) is planned by his Department on the EU Working Time Directive; and if he will make a statement. [66321]

  Mr. Jamieson
  My Department is responsible for implementing the EU directive on the organisation of the working time of persons performing mobile road transport activities (2002/15/EC). This directive was published in the Official Journal of the European Communities on 23 March 2002, and is scheduled to come into force in the UK by 23 March 2005.

  No formal guidance on the directive has been produced at this stage. However, we are currently consulting with key representatives from both sides of industry on the transposition of the directive.

  My right hon. Friend the Secretary of State for Trade and Industry is responsible for guidance on and the implementation of domestic legislation relating to the original working time directive (93/104/EC) and the horizontal amending directive (2000/34/EC).

  Channel Tunnel
  Miss McIntosh
  To ask the Secretary of State for Transport, pursuant to the answer of 11 June 2002, Official Report, column 1 133W, on the Channel Tunnel, for what reason Government policy towards payment for security measures at the Channel Tunnel has changed; and for what reason the SRA will be asked to contribute to such costs. [66581]
  222W
  Mr. Jamieson
  There has been no change in policy. The SRA originally offered assistance, which is for security at the Frethun freight yard, not the tunnel itself, in December last year. The objective is to bring forward to the earliest possible date the resumption of full and reliable international rail freight services.

  Cycling
  Mrs. May
  To ask the Secretary of State for Transport how many cycling trips were made and what the total distance travelled by cyclists was in each of the last four years. [66571]

  Mr. Jamieson
  Figures for Great Britain from the national Travel Survey are as follows:

  1997

  1998

  1999

  2000

  Trips per person per year

  18

  15

  17

  16

  Stages per person per year

  18

  15

  17

  17

  Distance per person per year

  41

  36

  42

  37

  Note:

  Figures for 2001 are not yet available. Stages include all travel by bicycle but trips only include those where cycling was the main mode of travel. Averages are taken over all the population living in households, not just cyclists. The volatility of the single year figures is likely to be a result of the relatively small sample sizes and the geographical clustering of the sample. Cycling patterns over individual years are also very dependent on the weather.

  Mrs. May
  To ask the Secretary of State for Transport what research he has commissioned into making(a) cycling and (b) walking routes safer; if he will place a copy in the Library; and if he will list those schemes introduced in the last two years in order to make these routes safer. [66579]

  Mr. Jamieson
  Details of a number of current research projects on cycling and walking are listed in the "Road Safety Research, Compendium of Research Projects 2001–02" and in "Roads and Local Transport Research Programme Compendium of Research Projects 2000–01". The compendia are updated at regular intervals, deposited at the House of Commons Library, and are available on the Department's website. A list of schemes to make walking and cycling routes safer is not recorded centrally.

  Mrs. May
  To ask the Secretary of State for Transport (1) what Government funding was provided directly for cycle lanes in each of the last four years; and if he will make a statement; [66575]

  (2) how much money was allocated to local authorities in each of the last four years for the provision of cycle lanes. [66574]

  Mr. Jamieson
  The Department has not funded any cycle lanes in the last four years. Since December 1999 local transport capital allocations have been provided to English local authorities outside London through the local transport plan system. Apart from major local transport schemes (those with a gross cost exceeding £5 million) funding is allocated in the form of a single block allocation the use of which is at the authorities discretion. Such funds can be used to implement cycle lanes but it is for authorities to decide their local priorities.
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  In the first three years of local transport plan system, total single block allocations were as follows:

  £ million

  2002–03

  1,200

  2003–04

  1,100

  2004–05

  514

  Comparable figures for 1999–2000 are not available.

  Mrs. May
  To ask the Secretary of State for Transport what the total length of cycle lanes is in the UK; and what percentage of these are(a) on the side of the carriageway, (b) on the pavement and (c) independent of a road or pavement. [665731]

  Mr. Jamieson
  This information is not held centrally. Local cycling strategies contain plans for up to 4,300 km of new cycle routes in England by 2005, but it is for individual local traffic authorities to monitor and hold the details of cycle lane provision in the area they control.

  Multi-modal Studies
  Mr. Don Foster
  To ask the Secretary of State for Transport what(a) guidance has been given by his Department and (b) legislation is in place with regard to the methodology for multi-modal studies (i) proposals and (ii) assessment; and if he will make a statement. [66311]

  Mr. Jamieson
  The Department issued Guidance on the Methodology for Multi-Modal Studies (GOMMMS) in March 2000. In addition one errata; two supplementary pieces of GOMMMS guidance; and a report commissioned by the Department on 'Soft Factors Likely To Affect Travel Demand' have been published since that date. All of these documents can be found on the Departmental website at: http://www.roads.dft.gov.uk/roadnetworldheta/hetapubs.htm

  There is no legislation in place relating to the methodology for multi-modal studies.

  Mr. Don Foster
  To ask the Secretary of State for Transport (1) pursuant to his answer of 25 June 2002,Official Report, columns 769–70W, on multi-modal studies, if he will list the (a) number, (b) type, (c) length,(d) expected impact on the numbers of passengers and journeys and (e) expected impacts on congestion and pollution of bus schemes (i) proposed, (ii) accepted and(iii) under way for each of the multi-modal studies that have reported; [66069]

  (2) pursuant to his answer of 25 June 2002, Official Report, columns 769–70W, on multi-modal studies, if he will list the (a) number, (b) type, (c) length, (d) expected impact on the numbers of passengers and journeys and freight volume and (e) expected impacts on congestion and pollution of rail schemes (i) proposed, (ii) accepted and (iii) underway for each of the multi-modal studies that have reported. [66073]

  Mr. Jamieson
  The multi-modal studies are strategic transport studies which examine the contribution that combinations of measures, covering, among other things, roads, rail, public transport and behavioural change initiatives, could make to resolving the transport problems in the study areas. Information about specific measures in isolation is not available in the detail requested and could be obtained only at disproportionate cost.
  224W
  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002,Official Report, columns 769–70W, on multi-modal studies, if he will list the (a) number, (b) type, (c) length, (d) expected impact on the number of road journeys and freight volumes and (e) expected impacts on congestion and pollution of road building schemes (i) proposed, (ii) accepted and (iii) underway for each of the multi-modal studies that have reported. [66074]

  Mr. Jamieson
  The Multi-Modal Studies are strategic transport studies which examine the contribution that combinations of measures, covering, among other things, roads, rail, public transport and behavioural change initiatives, could make to resolving the transport problems in the study areas. Information about specific measures in isolation is not available in the detail requested and could only be obtained at disproportionate cost.

  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002,Official Report, columns 769–70W, on multi-modal studies, if he will list the (a) number, (b) type, (c) length, (d) expected impact on the numbers of passengers and journeys and freight volume and (e) expected impacts on congestion and pollution of rail schemes (i) proposed, (ii) accepted and (iii) underway for each of the multi-modal studies that have reported. [66071]

  Mr. Jamieson
  The Multi-Modal Studies are strategic transport studies which examine the contribution that combinations of measures, covering, among other things, roads, rail, public transport and behavioural change initiatives, could make to resolving the transport problems in the study areas. Information about specific measures in isolation is not available in the detail requested and could only be obtained at disproportionate cost.

  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002,Official Report, columns 769–70W, on multi-modal studies, if he will list the (a) number, (b) type, (c) length, (d) expected impact on the numbers of passengers and journeys and (e) expected impacts on congestion and pollution of light rail, tram and guided busway schemes (i) proposed, (ii) accepted and (iii) underway for each of the multi-modal studies that have reported. [66072]

  Mr. Jamieson
  The Multi-Modal Studies are strategic transport studies which examine the contribution that combinations of measures, covering, among other things, roads, rail, public transport and behavioural change initiatives, could make to resolving the transport problems in the study areas. Information about specific measures in isolation is not available in the detail requested and could only be obtained at disproportionate cost.

  Mr. Don Foster
  To ask the Secretary of State for Transport, pursuant to his answer of 25 June 2002,Official Report, columns 769–70W, on multi-modal studies, if he will list the (a) number, (b) type, (c) length, (d) expected impact on the numbers of journeys and (e) expected impacts on congestion and pollution of cycle lane and footpath schemes (i) proposed, (ii) accepted and (iii) under way for each of the multi-modal studies that have reported. [66070]

  Mr. Jamieson
  The Multi-Modal Studies are strategic transport studies which examine the contribution that combinations of measures, covering, among other things,
  225W
  roads, rail, public transport and behavioural change initiatives, could make to resolving the transport problems in the study areas. Information about specific measures in isolation is not available in the detail requested and could only be obtained at disproportionate cost.

CABINET OFFICE

  Regulatory Impact Assessments
  Dr. Cable
  To ask the Minister for the Cabinet Office what steps he is taking to ensure that regulatory impact assessments are consistent between Government Departments. [63751]

  Mr.Alexander
  The Cabinet Office issues guidance to Departments on producing regulatory impact assessments. This guidance follows the methodology set out in the Treasury publication "Appraisal and Evaluation in Central Government", and it is currently being updated and reviewed. It will be subject to a public consultation starting in the summer. The final version will he issued by the end of 2002.

  Emergency Planning Procedures
  Tom Brake
  To ask the Minister for the Cabinet Office if he will make a statement on changes to emergency planning procedures implemented since June 2001. [63752]

  Mr. Alexander
  Since June 2001, the Government has carefully reviewed civil protection arrangements across the UK. As a result, measures have been taken by Government Departments, the emergency services and local authorities to improve assessment, detection, protection, planning and response to a wide range of threats.

  Deregulation
  Paul Flynn
  To ask the Minister for the Cabinet Office what new proposals he has to improve the efficiency of Government Departments by means of deregulation. [63754]

  Mr. Alexander
  The Office of Public Service Reform (OPSR) is working on several projects that aim to reform the workings of Central Government. They include:The Departmental Change Programme is designed to ensure that Government Departments and services are equipped to achieve a step change in delivery of outcomes, consistent with the four principles of public service reform.
  Improving Programme and Project Delivery to improve the civil service's capability and capacity to deliver efficient Government.
  The Regulatory Impact Unit has developed collaboratively with other Departments the Policy effects framework; a strategy for avoiding unnecessary bureaucratic from new policy.

  Performance and Innovation Unit
  Ms Dari Taylor
  To ask the Minister for the Cabinet Office if he will list his Department's responsibilities with regard to the Performance and Innovation Unit. [63755]
  226W
  Mr. Alexander
  As announced on 24 June, the Performance and Innovation Unitwill be brought together with the Forward Strategy Unit to form a single unit called the Strategy Unit.

  The Strategy Unit will carry out long-term strategic reviews and policy analysis which can take several forms:
  long-term strategic reviews of major areas of policy;
  studies of cross-cutting policy issues;
  strategic audit, (eg where do the Government stand in relation to their main objectives?); and
  working with Departments to promote strategic thinking and improve policy making across Whitehall.

  I will support the Prime Minister by taking on a ministerial sponsorship role in relation to the work of the Strategy Unit. Lord Macdonald of Tradeston is the sponsor Minister for the current PIU project on risk and uncertainty.

  Committee on Standards in Public Life
  Mr. Neil Turner
  To ask the Minister for the Cabinet Office if the Government plan to submit written evidence to the Committee on Standards in Public Life as a part of its inquiry defining the boundaries within the Executive. [66804]

  Mr. Alexander
  The Government have today submitted written evidence to the Committee on Standards in Public Life as part of its inquiry into 'Defining the Boundaries within the Executive'. Copies of the submission have been placed in the Libraries of the House.

DEFENCE

  Ministerial Meetings (NATO)
  Mr. Vaz
  To ask the Secretary of State for Defence when he last met the Secretary-General of NATO; and if he will make a statement. [62185]

  Mr. Hoon
  I met Lord Robertson on 6–7 June at the NATO Defence Ministers Meeting in Brussels.

  The meeting was an important step in the Alliance's preparation for the NATO Prague Summit in November. Alliance Defence Ministers agreed on the need to: improve capabilities, including defence against the threat of terrorism; enlarge in a way that enhances collective security; build on the new security relationship with Russia; develop a more substantive relationship with partners; and adapt to modernise NATO's structures and processes.

  Gulf War Syndrome
  Mr. Laws
  To ask the Secretary of State for Defence whether his Department recognises Gulf War Syndrome as a medical condition; and if he will make a statement. [60333]

  Mr. Ingram
  [holding answer 13 June 2002]: My Department does not recognise "Gulf War Syndrome" as a medical condition. It accepts that some veterans of the 1990–91 Gulf conflict have become ill and that many attribute this ill health to their Gulf experience. A large number of multi-system, multi-organ, non-specific, medically unexplained symptoms have been reported by

  227W
  some Gulf veterans as well as recognised medical conditions. The overwhelming consensus of the scientific and medical community is that there is insufficient evidence to enable this ill-health to be characterised as a unique illness or "syndrome".

  Military Sites (Wales)
  Mr. Simon Thomas
  To ask the Secretary of State for Defence if he will provide a list of active military sites in Wales. [63196]

  Mr. Ingram
  The Ministry of Defence has the following active military establishments in Wales. The list excludes housing and Territorial Army and Cadet sites not owned by MOD.

  Flintshire

  Army Rifle Range

  RAF Sealand

  Moel-Y-Parc Army Training Camp, Nr. Denbigh, Denbighshire/

  Flintshire Hawarden Weather Station, Hawarden Airport,

  Hawarden

  Conwy

  Capel Curig, Army Camp

  Weather Station Garth farm

  Joint Training Centre—Tal-y-Bont Road, Llanrwst

  Denbighshire

  Craigy-Ddualt-Army Radio Station—Nr. Llangollen

  Gwaenysgor-Army Radio Station, Gwaenysgor

  Rhyl, Army Camp (Kinmel Park), Bodelwyddan, Rhyl

  Gwynedd

  Bethesda Mountain Rescue Post, Bethesda

  Fairbourne, RAF Training Centre, Plas yr Antur, Waverley Road,

  Fairbourne, Llanuwchlyn-Seismic Research Station, Llanuwchlyn

  Mynydd Rhiw-Army Radio Station

  Tywyn-JSMTC (Morfa Camp), Tywyn

  Uwchmynydd-Weather Station, Nr. Aberdaron

  Isle of Anglesey

  Almwch-Hi-Fix Station. Llam Carw, Amlwch

  Holyhead-RAF Radio Station, Ilaingoch, Holyhead

  Llanddona-Army Radio Station, BBC Radio Transmitting Station

  Llanfair P. G—JSMTC, Plas Llanfair, Llanfair P. G

  Menai Bridge Army Camp, Ynys Gaint, Menai Bridge

  RAF Mona Airfield, Nr. Llangefni

  Ty-Croes RAF Radar Site, Ty Croes

  RAF Valley

  Powys

  Llansilin Army Rifle Range, Llansilin

  The Barracks, Brecon

  Dering Lines Camp

  Cwrty-Gollen Camp

  Radio Station, Newton

  Sennybridge, Camp and Army Training Area

  Training Area, Pentwyn Farm, Llywel (Nr. Sennybridge)

  HMS Excellent, Training Centre, Panty-Rhiw (Nr. Brecon)

  Automatic Weather Stations, Llandulas and Lake Vyrnwy

  Wrexham

  Hightown Barracks

  Tri-Service CIO, Halkyn House, 21 Rhosddu Road

  228W
  Monmouthshire

  Army Training Area, North Caerwent Village

  Army Training Area, Sudbrook, Portskewitt

  Seven Tunnel, Rifle Range, Caldicott

  Training Area, Pwllholm and Vauxhall Camps

  Base Camp, Ty-Isaf (Nr. Abergavenny)

  Newport

  Raglan Barracks

  ACIO, 4–5 Kingsway Shopping Centre

  Pembrokeshire

  Cawdor Barracks (including radio sites) Brawdy

  Range facilities, Old Castle Head

  Misc sites, Pembroke Dock

  Penally Camp and Rifle Range, Penally

  Army Training Area, Templeton Airfield, Nr. Tenby

  Marine Salvage Depot, Fort Road

  Marine Craft Unit, Masonry Pier (part) Tenby

  Armament Depot, Llanfair-nanty-gof, Letterston

  ATC Accommodation, Victoria Road

  ATC Accommodation, Tenby Railway Station

  East Blockhouse (Nr. Milford)

  Swansea

  AFCIO,17–19 Castle Street

  DSDC Llangennech

  ATC HQ Gliding School, Swansea Airport

  ATC Accommodation, 2nd floor, 10 Caer Street

  Cardiff

  AFC() and Met Office, Southgate House

  RNR Training Centre, HMS Cambria, Bute Docks,

  Barry Airfield

  AWE Cardiff, Llanishen, Caerphilly Road

  Museum, Tower and Portcullis Chamber

  Carmarthenshire

  AWE Siesmic site, Nr. Lampeter

  Range facilities Peny-wayn (Nr. Carmarthen)

  Bombing Ranger, Nr. Llanelli

  Training Area and Ranges, Maesbwlch Farm, Llandovery

  Vale of Glamorgan

  RAF St. Athan,

  HMS Cambria (Mooring facilities No.2 Dock)

  ACIO, 8 Gelliwasted Road, Rhondda

  Dock Fortifications, Port and Harbour, Neath/Port Talbot

  ATC Accommodation, Nr. Merthyr Tydfil

  Pendine, Carmarthenshire

  Llanbedr-Gwynedd.

  Aberport Main Site, Pendine and Llanbedr are all operated by QinetiQ on behalf of MOD which retains ownership. There are a number of minor observation posts of insignificant size associated with these operations.

  In addition, there are various radio masts.

  Kenley Airfield
  Richard Ottaway
  To ask the Secretary of State for Defence if he plans to change the use of Kenley airfield, Croydon; and if he will make a statement. [63684]
  229W
  Mr. Ingram
  Kenley airfield is currently used by the Air Cadets Voluntary Gliding School. There are no plans to change this usage for the foreseeable future.

  Chinook
  Norman Lamb
  To ask the Secretary of State for Defence for what reasons flight data and cockpit voice recorders were not fitted to the RAF Chinook HC2 fleet upon its entry into service. [64561]

  Mr. Ingram
  The Chinook was introduced into RAF service in 1980 at a time when it was not the Ministry of Defence's policy to install flight data recorders into military aircraft. Since then the policy has changed and such equipment is now installed in all new aircraft.

  The decision on retrofitting existing aircraft is considered carefully against a number of factors, such as the type's remaining in-service life, flight safety record, cost and operational considerations. As a result of such considerations, a decision was taken (before the Mull of Kintyre accident) to install an accident data recorder and a cockpit voice recorder, as part of the helicopter health and usage monitoring system modification. This modification has now been installed in the entire in—service Chinook fleet.

  Asymmetric Surface Threats
  Mr. Jenkin
  To ask the Secretary of State for Defence if he will make a statement on his Department's work to increase the protection for Royal Navy warships against asymmetric surface threats operating in the littoral; what trials his Department has conducted to evaluate current and future warship weaponry against such threats; and when such trials were begun. [64809]

  Mr. Ingram
  It is not our policy to comment on the specific details of measures taken to protect fleet units against asymmetric attack, and I am withholding this information in accordance with Exemption I of the Code of Practice on Access to Government Information which relates to defence, security and international relations. The Royal Navy keeps tactics and measures in this area under constant review. Trials and training are conducted on a regular basis.

  Balkans
  Mr. Jenkin
  To ask the Secretary of State for Defence if he will make a statement on the future of the UK military commitment to the Balkans. [64813]

  Mr. Ingram
  I refer the hon. Member to the answer given by my right hon. Friend the Secretary of State for Defence on 13 June 2002, Official Report, columns 1343–44, to my hon. Friend the Member for Broxtowe (Dr. Palmer).

  Discussions are continuing on how we will adjust our troop contributions in light of the Joint Operational Area Review.

  Helicopters
  Mr. Ben Chapman
  To ask the Secretary of State for Defence what plans he has for the replacement of(a) Lynx, (b) Gazelle and (c) Sea King helicopters at RNAS Yeovilton. [64618]
  230W
  Mr. Ingram
  The Battlefield Light Utility Helicopter project, planned to enter service from the middle of this decade, is intended to replace the capability provided by the Lynx Marks 7 and 9 and the Gazelle. The Surface Combatant Maritime Rotorcraft (SCMR) project will replace the capability currently provided by the Maritime Lynx Marks 3 and 8. SCMR is currently planned to enter service towards the end of this decade. A number of existing helicopter designs are potentially able to meet these requirements, including the Future Lynx proposal from Westlands Helicopter Ltd., and these will be considered further in the assessment phases of these projects.

  The Support Amphibious and Battlefield Rotorcraft programme is designed to replace the capability provided by the Sea King Mk4 early in the next decade. The project is in its early stages and we have yet to decide on how the capability requirement will best be met.

  On current plans the Lynx, Gazelle and Sea King helicopters (and their replacements) currently based at RNAS Yeovilton will continue to be based there. The planning assumption for naval helicopters to remain at Yeovilton will be reviewed when the Harrier force departs in 2006.

  Amber Fox
  Mr. Jenkin
  To ask the Secretary of State for Defence what plans there are for the EU to take over the operation Amber Fox; and if he will make a statement. [64812]

  Mr. Ingram
  NATO has been invited by the Macedonian Government to extend the mandate of Operation Amber Fox for a further four months until 26 October 2002. The Netherlands took over from Germany as lead nation on 26 June 2002.

  At its recent meeting in Seville, the European Council expressed the European Union's willingness to take over from NATO in Macedonia at the end of NATO's current mandate provided that the permanent arrangements between the EU and NATO are in place by then.

  Any follow-on mission would be at the invitation of the Macedonian Government.

  Sub-continent (Weapons Capability)
  Gregory Barker
  To ask the Secretary of State for Defence what representations his Department has received concerning the acquisition by India of Hawk aircrew training simulators. [65427]

  Mr. Hoon
  I am not aware of any such representations.

  Gregory Barker
  To ask the Secretary of State for Defence (1) what discussions he has held with the Secretary of State for Trade and Industry since December 2001 regarding arms export licence grants to(a) India and (b) Pakistan; [65448]

  (2) what licence applications his Department has examined for arms exports to (a) Pakistan and (b) India since January 2000; and how many his Department (i) supported and (ii) opposed. [65425]

  Mr. Hoon
  I am withholding this information in accordance with Exemption 2 (Internal Discussions and Advice) of Part II of the Government's Code of Practice on Access to Government information.
  231W
  Chris Grayling
  To ask the Secretary of State for Defence what his policy is on arms sales to India and Pakistan. [65404]

  Mr. Hoon
  All relevant export licence applications for India and Pakistan are considered on a case by case basis against the Consolidated EU and national arms export licensing criteria, in the light of the answer given on 15 March 2002,Official Report, columns 1296–98W by my hon. Friend the then Parliamentary Under-Secretary of State for Foreign Affairs (Mr. Bradshaw) to my hon. Friend the Member for Edmonton (Mr. Love). The Government are keeping a very close eye on developments in the region and continue to apply the Consolidated EU and national arms export licensing criteria carefully and rigorously.

  DECS PPP
  Mr. Gray
  To ask the Secretary of State for Defence what savings he expects to achieve for the DECS PPP(a) as a result of changes in management practice and (b) as a result of inventory effectiveness; and what savings the DECS PPP has achieved so far. [64801]

  Mr. Ingram
  The Defence Electronic Commerce Services (DECS) Public Private Partnership (PPP) provides an electronic portal and associated infrastructure through which we can do business more effectively with our industrial partners. DECS hosts software applications, each of which are contracted individually. The first service, covering e-purchasing, has already enabled the DLO's Non-Project Procurement Office to generate savings of over £350,000 and the savings for May 2002 alone were estimated to exceed £100,000 when compared to the cost of transacting business in the traditional manner. We expect further savings to be generated as the DECS applications are developed and become more widely used across the Department. However, because DECS is designed to enable the defence acquisition community to operate more effectively, savings are not broken out and attributed directly to the system itself, or to management practise or inventory effectiveness.

  Defence Attaches
  Lynne Jones
  To ask the Secretary of State for Defence what the overall cost was of defence attaches in each financial year since 1999–2000. [65271]

  Mr. Ingram
  The overall cost of defence attaches in each financial year since 1999–2000 is as follows:

  £millian

  Financial year

  Cost

  1999–2000

  23.895

  2000–01

  25.455

  2001–02

  28.704

  The Queen Mother
  Mr. Gordon Prentice
  To ask the Secretary of State for Defence, pursuant to his letter of 25 June to the hon. Member for Pendle, how many service personnel were involved in the funeral of HM Queen Elizabeth the Queen Mother. [65255]
  232W
  Mr. Ingram
  2,922 service personnel, including Commonwealth troops and service chiefs, were involved in the funeral of Her Majesty Queen Elizabeth the Queen Mother.

  Merlin
  Mr. Jenkin
  To ask the Secretary of State for Defence what plans he has to give the Merlin helicopter an air to surface capability. [66032]

  Mr. Ingram
  There are no current plans to equip the Merlin helicopter with an air to surface capability. This is being kept under review.

  Colchester Garrison
  Mr. Jenkin
  To ask the Secretary of State for Defence if the Investment Advisory Board has given consideration to the Colchester garrison PFI; and if he will make a statement. [66255]

  Mr. Ingram
  The Ministry of Defence's Investment Approvals Board advises Ministers on major defence investment projects. The Board expects to consider this project again in the near future.

  NATO Defence Ministers' Meeting
  Mr. Jenkin
  To ask the Secretary of State for Defence what proposals were made by the US Administration prior to the recent NATO Defence Ministers' meeting; and if he will place the relevant papers and letters from the US Administration in the Library. [66256]

  Mr. Hoon
  This is a matter for the United States Administration.

  Royal Navy Bases
  David Cairns
  To ask the Secretary of State for Defence if he will make a statement on the future basing of Royal Navy ships and submarines and the future requirement for three naval bases. [66801]

  Mr. Ingram
  A joint Royal Navy/Warship Support Agency study team has recently completed a wide—ranging review of the base porting arrangements for Royal Navy warships and Royal Fleet Auxiliaries, and the infrastructure required to support them. Their recommendations have been endorsed by Ministers, and will be implemented subject to trade union consultation.

  The three existing naval bases at Portsmouth, Devonport and Clyde are able to provide sufficient capacity to support the ships and submarines that are in-service, on order or planned.

  The future aircraft carrier—the CVF—will be based at HM naval base Portsmouth. While it should be possible to berth two CVFs in Portsmouth simultaneously, for military reasons this may not be desirable. Options are therefore being considered to make use of an occasional stand—by berth for the high—readiness CVF. Further work on the design, operating patterns and manning are needed before a final decision can be made, although initial indications who show that Southampton could provide such a facility if required.
  233W
  As has been previously announced on 26 June 2002, Official Report, column 908W the batches one and two of Astute Class submarines will be based at HM naval base Clyde, and the Trafalgar Class will remain at Devonport.

  With regard to the remainder of the fleet, the T45 Destroyers will progressively replace the T42 Destroyers based at Portsmouth. The two new amphibious ships, HMS Albion and HMS Bulwark, will join HMS Ocean at Devonport creating an amphibious shipping centre of expertise. The current arrangements for the Vanguard Class nuclear powered ballistic missile Submarines, Frigates, Survey Ships and Minor War Vessels work well and will not be changed.

  Type 45 Procurement
  Mike Gapes
  To ask the Secretary of State for Defence if the RAND report on type 45 procurement options has been published; and if he will make a statement. [66802]

  Mr. Ingram
  The RAND report on acquisition options for the type 45 destroyer has now been published. A copy has been placed in the Library of the House.

  RAND is a very experienced and influential organisation and has been conducting analyses of military shipbuilding, the industrial base, and competition issues for two decades. The Ministry of Defence commissioned RAND last year to carry out an independent study into a range of alternative procurement strategies for our future warship programme over the next 15–20 years, with particular reference to options for type 45 destroyers. This followed receipt of an unsolicited bid from BAES Marine proposing that they should build all 12 ships planned for the class. This differed from the type 45 shipbuilding procurement strategy at that time which envisaged Vosper Thornycroft building one of the first batch of three ships and competing with BAES Marine for later batches.

  Initial results from the study were used to help inform the MOD's decision to proceed with a revised procurement strategy for the type 45, in which each of the two shipbuilders, BAES Marine and Vosper Thornycroft. will be allocated modules (or blocks) of the ship to build. The revised strategy was announced by my right hon. Friend the Secretary of State for Defence on 10 July 2001, Official Report, columns 675–85.

  RAND's analysis indicated that there would be roughly an even chance that competitive production of the type 45 by two shipbuilders would yield about the same overall cost as sole—source production. Noting that a competitive strategy could lead to one shipbuilder building most of the ships, RAND also investigated alternative strategies to direct work to each of the two shipbuilders to keep both involved in building warships.
  234W
  The RAND results also suggested that, for strategies that directed type 45 work to a number of shipyards, allocation of blocks is more cost—effective than the allocation of whole ships, because the work force increases productivity as it gains experience of building the same blocks. Such a strategy will also have the advantage of keeping both shipbuilders in the type 45 programme and potentially available to compete for future warship programmes. In addition, the revised strategy is likely to provide better value for money in the longer term than the unsolicited proposal, if it enables competition to be pursued on other warship programmes.

  Following the type 45 decision, RAND continued their study, taking a broader look at the foreseeable balance of demand and supply in the warship building sector, and the potential effects of different procurement approaches. The report does not make specific recommendations concerning procurement strategies for future programmes, although it has helped clarify issues regarding block production (which is likely to be employed for the future carrier). It also provides an indication of the size of work force that will be required to sustain the future programme.

  RAND's work has already helped the MOD to arrive at a pragmatic solution for the type 45. The report will also provide a valuable source of information for further study of the warship building sector.

  Amphibious Assault Capability
  Mr. Jenkin
  To ask the Secretary of State for Defence which warships capable of providing an amphibious assault capability will be available in(a) 2002 and (b) 2003; and if he will make a statement. [64819]

  Mr. Ingram
  I refer the hon. Member to the answer I gave on 7 March 2002, Official Report, column 474W, to my hon. Friend the Member for West Bromwich, West (Mr. Bailey). The amphibious assault capability is currently provided by the Landing Platform Helicopter (LPH) HMS Ocean and four Landing Ships Logistic (LSL). Following a series of highly successful operational deployments, HMS Ocean will shortly enter a docking period to conduct essential maintenance and planned capability enhancement, and will be unavailable for tasking until the autumn. During this period the amphibious assault capability could, if required, be provided by HMS Ark Royal in the LPH role and other platforms as may be required.

  In 2003, as well as HMS Ocean and four LSLs, the LPD replacement ship, HMS Albion, will become available to provide our amphibious assault capability. The new ship will be significantly more capable than her predecessor, HMS Fearless, able to deploy embarked forces much more quickly—by air and by sea—and will use new landing craft with 20 per cent. more landing capability and a Ro—Ro type configuration for rapid embarkation of vehicles.

EDUCATION AND SKILLS

  Secondary School Pupils
  Helen Jones
  To ask the Secretary of State for Education and Skills if she will make a statement on her plans to widen the options for study available to secondary school pupils. [65171]

  Mr. Miliband
  [holding answer 1 July 2002]: The Green Paper "14–19: extending opportunities, raising standards", proposed increasing curriculum choice for young people from the age of 14. We aim to make sure that there is sufficient flexibility to allow students to pursue their talents and aspirations while maintaining a strong focus on the basics.

  The consultation on the Green Paper only closed on 31 May. We are reflecting carefully on the views expressed during the consultation before reaching any decisions. We have indicated in the Green Paper that curriculum changes would be subject to further consultation before their introduction.

  In September 2002 we will be introducing eight new vocational GCSEs in some schools. Also, the "Increased Flexibility for 14 to 16-year-olds" programme will enable over 30,000 pupils to undertake part-time vocational courses at further education colleges from September 2002.

  Hampshire
  Mr. Hoban
  To ask the Secretary of State for Education and Skills (1) if she will list the activities pursued by her Department that have had a particular impact on Hampshire since 7 June 2001; [63617]

  (2) if she will list those initiatives of her Department which have been applied in Hampshire since June 2001, indicating the level of financial support provided in each case. [63616]

  Mr. Stephen Twigg
  [holding answer 21 June 2002]: The information requested has been placed in the Libraries.

  School Ethnicity (Portsmouth, South)
  Mr. Hancock
  To ask the Secretary of State for Education and Skills what the ethnic ratio is for schools in the Portsmouth, South constituency; and if she will make a statement. [64479]

  Mr. Stephen Twigg
  The information requested is shown in the table.

  Percentage of pupils by ethnic group1 in maintained primary and secondary schools in the Portsmouth, South constituency as at January 2001

  Primary

  Secondary

  White

  92.6

  94.3

  Black Caribbean

  0.2

  0.1

  Black African

  0.3

  0.1

  Black Other

  0.4

  0.2

  Indian

  0.6

  0.7

  Pakistani

  0.1

  0.1

  Bangladeshi

  4.3

  2.6

  Chinese

  0.5

  0.6

  236W

  Percentage of pupils by ethnic group1 in maintained primary and secondary schools in the Portsmouth, South constituency as at January 2001

  Primary

  Secondary

  Other

  1.0

  1.2

  All pupils: per cent.

  100.0

  100.0

  Number of pupils

  5,735

  5,380

  1Only pupils of compulsory school age and above were classified according to ethnic group.

  Source:

  Annual Schools Census

  Data for 2002 are not yet available by parliamentary constituency.

  Annual Leave
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the average annual leave entitlement is for staff in her Department in 2002. [64659]

  Mr. Stephen Twigg
  The annual leave entitlement of staff outside of the senior civil service is 25 days on entry, rising to 30 days after 10 years service. Entitlement for members of the senior civil service is currently set by the Cabinet Office at 30 days.

  Records of annual leave entitlement are not kept centrally and therefore information about average entitlement could be provided only at disproportionate cost.

  Special School Budgets
  Mr. Willis
  To ask the Secretary of State for Education and Skills what calculations she has made about the impact on special school budgets of the introduction of the(a) upper pay spine and (b) management pay spine. [65535]

  Mr. Miliband
  [holding answer 1 July 2002]: The threshold constitutes point 1 of the upper pay scale and all threshold payments made to teachers by maintained schools are fully reimbursed by the Department. The rate of subsequent progression along the upper pay scale is for schools to determine in the light of teacher performance and in accordance with the School Teachers Pay and Conditions Document. The Department is contributing a grant of £90 million to schools in 2002–03, largely to support such progression.

  Progress along the leadership group pay scale in maintained schools is also by performance points awarded at the discretion of the governing body. Here, the Department is contributing a further grant worth 60 per cent. of the cost in 2002–03 and schools are contributing 40 per cent.

  The grants will support special schools in the same way that they do other maintained schools. The impact on their budgets will depend on the decisions taken by individual schools.

  Teachers (Contracts)
  Helen Jones
  To ask the Secretary of State for Education and Skills what proportion of teachers in(a) primary and (b) secondary schools were employed on temporary and short-term contracts at the latest date for which figures are available. [65172]
  237W
  Mr. Miliband
  [holding answer 1 July 2002]: In maintained nursery and nursery and primary schools in England. teachers on contracts of less than one month, working for the whole full-time equivalent teachers. These data are provisional.

  In maintained secondary schools in England, teachers on contracts of less than one month. working for the whole day on the third Thursday in January 2002, constituted 3 per cent. of all full-time equivalent teachers. These data are provisional.

  Bob Russell
  To ask the Secretary of State for Education and Skills how long it is taking the Criminal Records Bureau to process clearance applications by new teachers; if she estimates that all new teachers due to start in September will have clearance in time; if she has contingency plans should applications not be cleared in time; and if she will make a statement. [65776]

  Mr. Miliband
  [holding answer 1 July 2002]: The Criminal Records Bureau estimate that it is currently taking, on average, approximately six weeks to produce Disclosures.

  The CRB is striving hard to improve the situation. A recovery programme has been introduced, and the Bureau's current expectation is that, by August, the present backlog of applications will have been cleared, and the Bureau will be achieving its previously published service standards of providing 90 per cent. of Enhanced Disclosures within three weeks, and 95 per cent. of Standard Disclosures within one week.

  My Department has already put in place contingency arrangements with the CRB. Under those arrangements, CRB staff are trawling the backlog of applications, and checking new applications, to identify those in respect of teachers and other key staff for schools. For those applications the CRB is performing checks of my Departments List 99. If that check is satisfactory the employer or agency will be able to appoint the person provisionally. The full criminal record and police check will be performed and the relevant Disclosure issued by the CRB as soon as possible after that. Those interim arrangements will stay in place until the CRB is fully up to date and meeting its performance standards.

  Table T1b: Participation of under-represented groups in higher education, Young full-time undergraduate entrants 1999–20001

  From Social Class IIIM, IV. V

  Institution

  Total entrants

  Number of young entrants

  Percentage entrants who are young

  Percentage with known data

  Number with known data

  Number from group

  Percentage from group

  Percentage benchmark2

  Number benchmark2

  Percentage Std der

  UK

  All UK institutions

  328,646

  244,018

  74

  83

  —

  —

  26

  —

  —

  —

  England

  All English institutions

  268,853

  197,984

  74

  84

  —

  —

  26

  —

  —

  —

  Aspiration funding institutions

  —

  —

  —

  —

  45,025

  7,070

  16

  19

  8,484

  —

  University of Birmingham

  3,941

  3,569

  91

  95

  3,391

  644

  19

  20

  678

  0.7

  University of Bristol

  2,936

  2,695

  92

  84

  2,264

  249

  11

  16

  362

  0.8

  University of Cambridge

  2,895

  2,744

  95

  98

  2,689

  242

  9

  12

  323

  0.7

  City University

  1,410

  944

  67

  80

  755

  211

  28

  25

  189

  1.6

  University of Durham

  2,739

  2,496

  91

  95

  2,371

  308

  13

  18

  427

  0.8

  University of Exeter

  2,119

  1,904

  90

  95

  1,809

  271

  15

  21

  380

  0.9

  Imperial College

  1,473

  1,386

  94

  95

  1,317

  224

  17

  17

  224

  1.1

  King's College London

  2,829

  2,164

  76

  87

  1,883

  358

  19

  19

  358

  0.9

  University of Leeds

  5,128

  4,696

  92

  91

  4,273

  684

  16

  20

  855

  0.6

  School Absenteeism
  Diana Organ
  To ask the Secretary of State for Education and Skills what the rate of absenteeism among pupils at(a) primary level and (b) secondary level during the days of SATS tests has been in this academic year; and what differences there were between these rates and dates before and after the SATS tests. [63622]

  Mr. Stephen Twigg
  [holding answer 24 June 2002]: Statistics for this academic year's Key Stage tests are not yet available. The following table shows the percentage of pupils recorded as absent in the (a) Key Stage 2 tests and (b) Key Stage 3 test in all schools in England in 2001:

  Percentage

  Subject

  (a)Key stage 2

  (b)Key stage 3

  English

  1

  4

  Mathematics

  1

  4

  Science

  2

  5

  Data on rates of absence rates before and after the Key Stage tests are not available.

  Information from the pupil absence survey for 2000–01 showed that 6.5 per cent. of half days were missed due to authorised absences and 0.7 per cent. due to unauthorised absences in all schools in England.

  Higher Education
  Lynne Jones
  To ask the Secretary of State for Education and Skills, pursuant to her answer, Ref 38091, of 5 March 2002, if she will amalgamate information for performance indicators in higher education in the UK to allow comparison to be made of the socio-economic background of students entering all high ranking universities with those entering all other universities. [41953]

  Margaret Hodge
  The entry requirements of higher education institutions will vary from course to course and from year to year. Nevertheless, I have set out data which shows the Performance Indicators for the entry of young people by social class to undergraduate courses. The Government introduced aspirational funding for high ranking universities to support their efforts to recruit more young people from state schools. Institutions which currently receive this funding are listed first, followed by other institutions.
  239W

  Table T lb: Participation of under-represented groups in higher education, Young full-time undergraduate entrants 1999–20001

  From Social Class 111M, IV, V

  Institution

  Total entrants

  Number of young entrants

  Percentage entrants who are young

  Percentage with known data

  Number with known data

  Number from group

  Percentage from group

  Percentage benchmark2

  Number benchmark2

  Percentage Std dev

  University of Liverpool

  3,356

  3,004

  90

  93

  2,794

  615

  22

  22

  615

  0.8

  London School of Economics and Political Science

  562

  532

  95

  95

  505

  66

  13

  15

  76

  1.7

  University of Manchester

  4,762

  3,937

  83

  89

  3,504

  631

  18

  20

  701

  0.7

  University of Newcastle

  2,641

  2,469

  93

  95

  2,346

  375

  16

  20

  469

  0.8

  University of Nottingham

  4,035

  3,380

  84

  90

  3,042

  456

  15

  17

  517

  0.7

  School of oriental and African Studies

  425

  247

  58

  87

  215

  39

  18

  21

  45

  2.8

  University of Oxford

  3,055

  2,933

  96

  97

  2,845

  256

  9

  13

  370

  0.7

  Oxford Brookes University

  2,579

  1,846

  72

  95

  1,754

  333

  19

  29

  509

  1.0

  University of Reading

  2,189

  1,922

  88

  92

  1,768

  301

  17

  22

  389

  1.0

  Royal Holloway, University of London

  1,190

  1,081

  91

  97

  1,049

  189

  18

  22

  231

  1.3

  Royal Veterinary College

  124

  117

  94

  97

  113

  11

  10

  12

  14

  3.5

  St. George's Hospital Medical School

  259

  209

  81

  95

  199

  28

  14

  16

  32

  2.7

  University College London

  2,453

  2,120

  86

  93

  1,972

  276

  14

  18

  355

  0.9

  University of Warwick

  2,395

  2,259

  94

  96

  2,169

  304

  14

  17

  369

  0.8

  Non-Aspiration funding Institutions

  —

  —

  —

  —

  120,731

  35,849

  30

  29

  34,

  788

  —

  Anglia Polytechnic University

  3,579

  1,965

  55

  68

  1,336

  441

  33

  32

  428

  1.2

  Aston University

  1,168

  1,067

  91

  93

  992

  327

  33

  24

  238

  1.4

  University of Bath

  1,654

  1,513

  91

  93

  1,407

  267

  19

  21

  295

  1.1

  Bath Spa University College

  1,010

  616

  61

  89

  548

  164

  30

  29

  159

  1.9

  Bishop Grosseteste College

  234

  197

  84

  94

  185

  56

  30

  30

  56

  3.2

  Bolton Institute of Higher Education

  1,323

  649

  49

  62

  402

  165

  41

  33

  133

  2.3

  Bournemouth University

  2,758

  2,041

  74

  82

  1,674

  351

  21

  29

  485

  1.0

  University of Bradford

  1,706

  1,318

  77

  83

  1,094

  361

  33

  27

  295

  1.3

  Bretton Hall

  553

  421

  76

  92

  387

  128

  33

  27

  105

  2.2

  University of Brighton

  3,658

  2,118

  58

  86

  1,821

  437

  24

  30

  546

  1.0

  Brunel University

  2,763

  2,104

  76

  90

  1,894

  568

  30

  27

  511

  1.0

  Buckinghamshire Chiltems University College

  2,239

  1,458

  65

  64

  933

  299

  32

  33

  308

  1.5

  Canterbury Christ Church University College

  1,678

  1,015

  60

  82

  832

  225

  27

  31

  258

  1.5

  University of Central England in Birmingham

  3,872

  2,455

  63

  63

  1,547

  603

  39

  31

  479

  1.2

  University of Central Lancashire

  5,128

  3,228

  63

  64

  2,066

  702

  34

  31

  640

  1.0

  Central School of Speech and Drama

  131

  96

  73

  89

  85

  15

  18

  25

  21

  4.4

  Chester College of Higher Education

  1,480

  1,025

  69

  78

  800

  248

  31

  29

  232

  1.6

  University College Chichester

  1,147

  646

  56

  89

  575

  172

  30

  31

  178

  1.8

  Coventry University

  3,307

  2,470

  75

  85

  2,100

  777

  37

  32

  672

  1.0

  Cranfield University

  228

  189

  83

  59

  112

  23

  21

  30

  33

  3.8

  Cumbria College of Art and Design

  230

  167

  73

  84

  140

  55

  39

  33

  46

  3.8

  Darlington College of Arts

  156

  99

  63

  88

  87

  20

  23

  29

  25

  4.5

  De Montfort University

  5,351

  4,036

  75

  80

  3,229

  1,162

  36

  31

  1,001

  0.8

  University of Derby

  3,223

  2,202

  68

  77

  1,696

  576

  34

  32

  543

  1.1

  University of East Anglia

  1,972

  1,490

  76

  90

  1,341

  268

  20

  23

  308

  1.1

  University of East London

  2,891

  1,369

  47

  67

  917

  367

  40

  34

  312

  1.5

  Edge Hill College of Higher Education

  1,638

  1,015

  62

  78

  792

  277

  35

  31

  245

  1.6

  University of Essex

  1,104

  920

  83

  93

  856

  205

  24

  26

  222

  1.5

  Falmouth College of Arts

  365

  266

  73

  90

  239

  55

  23

  28

  67

  2.7

  University of Gloucestershire

  2,140

  1,587

  74

  88

  1,397

  377

  27

  31

  433

  1.2

  Goldsmiths College

  1,118

  701

  63

  90

  631

  126

  20

  24

  151

  1.6

  University of Greenwich

  3,353

  2,049

  61

  71

  1,455

  495

  34

  33

  480

  1.2

  Harper Adams University College

  388

  321

  83

  83

  266

  43

  16

  24

  64

  2.3

  University of Hertfordshire

  3,934

  2,711

  69

  78

  2,115

  740

  35

  32

  677

  1.0

  Homerton College, Cambridge

  400

  251

  63

  65

  163

  29

  18

  21

  34

  3.1

  University of Huddersfield

  3,556

  2,460

  69

  82

  2,017

  746

  37

  32

  646

  1.0

  University of Hull

  2,160

  1,662

  77

  89

  1,479

  355

  24

  24

  355

  1.1

  Keele University

  1,438

  1,190

  83

  88

  1,047

  230

  22

  24

  251

  1.3

  University of Kent at Canterbury

  1,766

  1,501

  85

  89

  1,336

  307

  23

  24

  321

  1.2

  Kent Institute of Art and Design

  450

  326

  72

  85

  277

  89

  32

  30

  83

  2.7

  King Alfred's College, Winchester

  1,011

  806

  80

  93

  750

  202

  27

  30

  225

  1.6

  Kingston University

  3,498

  2,417

  69

  79

  1,909

  611

  32

  31

  592

  1.0

  Lancaster University

  2,020

  1,868

  92

  94

  1,756

  386

  22

  22

  386

  1.0

  Leeds Metropolitan University

  5,050

  3,667

  73

  77

  2,824

  819

  29

  32

  904

  0.8

  University of Leicester

  2,071

  1,932

  93

  94

  1,816

  381

  21

  21

  381

  1.0

  University of Lincoln

  2,555

  1,767

  69

  87

  1,537

  553

  36

  32

  492

  1.1

  Liverpool Hope

  1,440

  1,060

  74

  70

  742

  267

  36

  31

  230

  1.6

  Liverpool John Moores University

  4,626

  3,346

  72

  73

  2,443

  830

  34

  29

  708

  0.9

  240W 241W

  Table T1 b: Participation of under-represented groups in higher education, Young full-time undergraduate entrants 1999–20001

  From Social Class WM, IV, V

  Institution

  Total entrants

  Number of young entrants

  Percentage entrants who are young

  Percentage with known data

  Number with known data

  Number from group

  Percentage from group

  Percentage benchmark2

  Number benchmark2

  Percentage Std dev

  University of London (Institutes and activities)

  66

  56

  85

  93

  52

  13

  25

  16

  8

  5.7

  London Guildhall University

  2,605

  1,487

  57

  72

  1,071

  407

  38

  33

  353

  1.4

  The London Institute

  2,029

  1,307

  64

  81

  1,059

  275

  26

  29

  307

  1.3

  Loughborough University

  2,562

  2,433

  95

  95

  2,311

  508

  22

  24

  555

  0.9

  University of Luton

  1,834

  1,129

  62

  63

  711

  277

  39

  34

  242

  1.7

  UMIST

  1,233

  1,135

  92

  91

  1,033

  248

  24

  24

  248

  1.3

  Manchester Metropolitan University

  6,398

  4,739

  74

  77

  3,649

  1,168

  32

  30

  1,095

  0.7

  Middlesex University

  4,896

  2,778

  57

  72

  2,000

  720

  36

  33

  660

  1.0

  Newman College

  349

  259

  74

  90

  233

  105

  45

  32

  75

  3.0

  University College Northampton

  2,768

  1,993

  72

  77

  1,535

  552

  36

  32

  491

  1.1

  University of North London

  3,114

  1,618

  52

  62

  1,003

  421

  42

  35

  351

  1.4

  North Riding College

  447

  298

  67

  91

  271

  89

  33

  30

  81

  2.6

  Northern School of Contemporary Dance

  36

  31

  86

  0

  —

  —

  —

  —

  —

  —

  University of Northumbria at Newcastle

  5,415

  3,690

  68

  84

  3,100

  930

  30

  30

  930

  0.8

  Norwich School of Art and Design

  245

  173

  71

  83

  144

  42

  29

  28

  40

  3.6

  Nottingham Trent University

  5,297

  3,957

  75

  88

  3,482

  940

  27

  28

  975

  0.7

  School of Pharmacy

  123

  98

  80

  91

  89

  23

  26

  23

  21

  4.5

  University of Plymouth

  5,206

  3,356

  64

  76

  2,551

  689

  27

  30

  765

  0.9

  University of Portsmouth

  3,162

  2,446

  77

  85

  2,079

  541

  26

  29

  603

  0.9

  Queen Mary, University of London

  1,886

  1,675

  89

  92

  1,541

  431

  28

  24

  370

  1.1

  Ravenshourne College

  277

  184

  66

  78

  144

  39

  27

  30

  43

  3.6

  Rose Bruford College

  171

  143

  84

  88

  126

  19

  15

  24

  30

  3.5

  Royal Academy of Music

  61

  56

  92

  0

  —

  —

  —

  —

  —

  —

  Royal College of Music

  72

  67

  93

  0

  —

  —

  —

  —

  —

  —

  Royal Northern College of Music

  104

  100

  96

  0

  —

  —

  —

  —

  —

  —

  College of St. Mark and St. John

  666

  439

  66

  90

  395

  134

  34

  32

  126

  2.2

  St. Martin's College

  1,278

  869

  68

  84

  730

  241

  33

  31

  226

  1.6

  St. Mary's College

  605

  548

  91

  93

  510

  163

  32

  28

  143

  2.0

  University of Salford

  3,849

  2,506

  65

  76

  1,905

  648

  34

  30

  571

  1.0

  University of Sheffield

  4,090

  3,315

  81

  89

  2,950

  502

  17

  18

  531

  0.7

  Sheffield Hallam University

  5,584

  4,311

  77

  88

  3,794

  1,176

  31

  30

  1,138

  0.7

  University of Southampton

  4,111

  3,326

  81

  89

  2–960

  503

  17

  22

  651

  0.7

  Southampton Institute

  3,941

  2,763

  70

  70

  1,934

  542

  28

  32

  619

  1.0

  South Bank University

  3,518

  1,544

  44

  56

  865

  303

  35

  34

  294

  1.5

  Staffordshire University

  3,889

  2,891

  74

  82

  2,371

  830

  35

  32

  759

  0.9

  University of Sunderland

  2,616

  1,878

  72

  96

  1,803

  631

  35

  32

  577

  1.1

  The Surrey Institute of Art and Design University College

  794

  656

  83

  89

  584

  158

  27

  29

  169

  1.8

  University of Surrey

  1,272

  996

  78

  84

  837

  176

  21

  25

  209

  1.4

  University of Surrey Roehampton

  1,703

  1,186

  70

  89

  1,056

  317

  30

  30

  317

  1.3

  University of Sussex

  1,667

  1,351

  81

  95

  1,283

  205

  16

  22

  282

  1.1

  University of Teesside

  2,794

  1,770

  63

  87

  1,540

  693

  45

  34

  524

  1.2

  Thames Valley University

  2,272

  850

  37

  48

  408

  143

  35

  36

  147

  2.2

  Trinity and All Saints

  655

  586

  89

  91

  533

  149

  28

  27

  144

  1.9

  Trinity College of Music

  88

  79

  90

  0

  —

  —

  —

  —

  —

  —

  University of West of England,Bristol

  5,765

  4,273

  74

  79

  3,376

  743

  22

  28

  945

  0.7

  University of Westminster

  2,986

  1,900

  64

  81

  1,539

  585

  38

  32

  492

  1.2

  Westminster College, Oxford

  69

  50

  72

  92

  46

  13

  28

  31

  14

  6.2

  Wimbledon School of Art

  119

  83

  70

  90

  75

  20

  27

  26

  19

  5.0

  University of Wolverhampton

  4,639

  2,841

  61

  71

  2,017

  948

  47

  33

  666

  1.0

  University College Worcester

  1,261

  706

  56

  87

  612

  190

  31

  33

  202

  1.8

  Writtle College

  338

  213

  63

  81

  173

  41

  24

  24

  41

  3.0

  Wye College, University of London

  126

  104

  83

  92

  96

  16

  17

  22

  21

  3.9

  University of York

  1,790

  1,526

  85

  92

  1,404

  211

  15

  18

  253

  1.1

  York St. John College

  997

  787

  79

  90

  708

  227

  32

  29

  205

  1.7

  1Source: HEFCE Performance Indicators

  2The grouped benchmark values for the two sets of institutions are estimates

  Students (Portsmouth, South)
  Mr. Hancock
  To ask the Secretary of State for Education and Skills what percentage of full-time students stayed in education in the Portsmouth, South constituency after the age of(a) 16 and (b) 18 years in (i) 1997 and (ii) 2001; and if she will make a statement. [66469]

  Mr. Stephen Twigg
  Data on the percentage of students staying on in full-time education are not calculated for areas smaller than LEAs as reliable estimates cannot be made. Participation rates at sub-national level are only available for 16 and 17-year-olds.
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  The percentage of 16 and 17-year-olds in full-time education in Portsmouth LEA, which includes the constituency of Portsmouth, South, in 1997–98 and 1999–2000, the latest year for which figures are available, is set out in the table:

  16 and 17 year olds in full-time education: Portsmouth LEA

  Age

  1997–98

  1999–2000

  16

  73

  70

  17

  55

  55

  243W
  Participation rates by LEA are published in an annual statistical bulletin, 'Participation in Education and Training by Young People Aged 16 and 17 in Each Local Area and Region, England'.

  Primary Schools
  Mr. Gihh
  To ask the Secretary of State for Education and Skills if she will make a statement on recent independent surveys regarding educational standards at primary school level in(a) maths, (b) reading, (c) science, (d) vocabulary and (e) non-verbal ability; and if she will make a statement. [65118]

  Mr. Miliband
  We are aware of the University of Durham Performance Indicators in Primary Schools (PIPS) tests. The results of the national curriculum Key Stage 2 English tests show a 12 per cent. point increase in the number of pupils achieving the expected level for their age since 1997. That increase is reflected in the reading component which shows a 14 per cent. rise. We are confident of the validity of these increases, as are schools throughout the country.

  Bilateral Ministerial Meetings
  Matthew Taylor
  To ask the Secretary of State for Education and Skills when Ministers in her Department have held meetings with Ministers and officials of the Irish Government since 1 June 2000; when and where each meeting took place; which Ministers were involved in each meeting; which Irish Government departments were involved in each meeting; and which Ministers and officials from the Irish Government attended each meeting. [63073]

  Mr. Stephen Twigg
  From 1 June 2000 there have been no meetings between Ministers in this Department and Ministers and officials from the Republic of Ireland Government.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Foot and Mouth
  Mr. Peter Ainsworth
  To ask the Secretary of State for Environment, Food and Rural Affairs how many cases there are of disputes over payment between her Department and contractors employed during the foot and mouth epidemic; and what the total value is of unpaid disputed invoices. [53248]

  Margaret Beckett
  [holding answer 29 April 2002]: The accounts of the principal contractors used by DEFRA during the FMD outbreak have been the subject of detailed examination. This has been an extensive exercise as the contractors concerned carried out work to the value of hundreds of millions of pounds involving the generation of tens of thousands of invoices.

  As part of the verification and substantiation of contractor invoices, the Department has employed forensic accountants to examine the invoices of 107 of the largest contractors. In total these 107 companies have submitted invoices worth £474 million and, to date, the Department has paid £402 million in respect of these claims. The Department is withholding payment of the
  244W
  remainder until it is satisfied that contractors have provided sufficient evidence of work commissioned and carried out.

  Wide-ranging issues have arisen on the accounts. These include legal issues such as matters of contractual interpretation, forensic accountancy issues and evidential issues involving the assessment of both a large amount of documentation and proofing of witnesses.

  Some of these disputes will inevitably result in court proceedings although DEFRA remains committed to resolving matters by mediation where appropriate.

  Committee Mandates
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what the mandate of the Advisory Committee on Rural Development is; how many times it has met over the last 12 months; what the UK representation on it is; what the annual cost of its work is to public funds; if she will list the items currently under its consideration; if she will take steps to increase its accountability and transparency to Parliament; and if she will make a statement. [61713]

  Mr. Morley
  The mandate of the Advisory Committee on Rural Development is set out in Commission Decision 98/235/EC. The UK is not formally represented on the committee; members are directly appointed by the Commission, drawn from across the EU, on the basis of their socio-economic interests.

  The Commission, together with member states, is currently conducting a review to bring existing legislation on the conduct of comitology committees into line with Council Decision 1999/468/EC, to "simplify the requirements for the exercise of implementing powers conferred on the Commission". As an obligation to this decision, the Commission undertook to publish an annual report on the working of committees. The first report was deposited in the Libraries of both Houses on 26 February (Com (2001) 783 Final). As part of the review process, the UK Government have encouraged the Commission to produce and maintain an electronic database of every comitology committee, its agendas and recent actions, to be available through its website.

  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what the mandate of the Advisory Committee on the Common Agricultural Policy is; how many times it has met over the last 12 months; what the UK representation on it is; what the annual cost of its work is to public funds; if she will list the items currently under its consideration; if she will take steps to increase its accountability and transparency to Parliament; and if she will make a statement. [61721]

  Mr. Morley
  The mandate of the Advisory Committee on the Common Agricultural Policy is set out in Commission Decision 98/235/EC. The UK is not formally represented on the committee; members are directly appointed by the Commission, drawn from across the EU, on the basis of their socio-economic interests.

  The Commission, together with member states, is currently conducting a review to bring existing legislation on the conduct of comitology committees into line with Council Decision 1999/468/EC, to "simplify the requirements for the exercise of implementing powers

  245W
  conferred on the Commission". As an obligation to this decision, the Commission undertook to publish an annual report on the working of committees. The first report was deposited in the Libraries of both Houses on 26 February (Corn (2001) 783 Final). As part of the review process, the UK Government have encouraged the Commission to produce and maintain an electronic database of every comitology committee, its agendas and recent actions, to be available through its website.

  Sheep
  Mr. Lidington
  To ask the Secretary of State for Environment, Food and Rural Affairs if she plans to make it her policy to stop sheep that are susceptible to TSEs from breeding. 161552]

  Margaret Beckett
  [holding answer 13 June 2002]: The Government launched a national scrapie plan in July 2001 after full consultation with the sheep industry and other stakeholders. The plan is a long-term programme whose aim is to increase the level of TSE-resistance in the sheep flock by means of breeding programmes which encourage the use of resistant animals. Participation by sheep breeders in the plan is at present on a purely voluntary basis, but as part of the consultation it was made clear that these measures would be made compulsory at some stage.

  Energy Efficiency
  Mr. Stunell
  To ask the Secretary of State for Environment, Food and Rural Affairs what schemes the Government have introduced since May 1997 to promote energy conservation and energy efficiency within the services sector; and what their impact has been on energy consumption per square metre within(a) commercial, (b) retail and (c) Government offices. [63373]

  Mr. Meacher
  The Government has introduced a wide range of measures to encourage energy efficiency in all sectors of the economy, including the commercial, retail and public sectors, which includes the Government Estate. The Climate Change Levy was introduced in April 2001 to encourage the more efficient use of energy. As part of the Climate Change Levy package, an Enhanced Capital Allowance scheme was introduced to provide fiscal incentives for businesses to invest in energy efficient technologies. The Carbon Trust was also set up to encourage business and the public sector to take up low carbon and energy efficient savings and measures.

  The Energy Efficiency Best Practice Programme provides free information and advice to these sectors. Since 1997, it has been delivering targeted energy efficiency briefings to boardrooms in the retail sector to raise awareness of energy efficiency, which has had a positive response. The Programme has also concentrated on providing groups within the commercial office sector with information on the business benefits of taking up energy efficiency measures.

  The Government Estate has had energy efficiency targets since 1990–91. We introduced a new 1 per cent. per year greenhouse gas reduction target in 2000–01, which will be reported on later this year. We are also developing new energy efficiency targets for the Government Estate, based on an assessment of the Estate's performance against national standards.
  246W
  The Best Practice Programme estimates its impact on annual energy efficiency improvements for the commercial and retail sectors. Actual consumption and floor space data are not collected on an annual basis, but for calendar years 1998–2000, total energy efficiency improvements stimulated by the Programme are estimated to have been 7 per cent. for the retail sector and 6 per cent. for the commercial sector.

  Annual consumption and floor space data are collected for the central Government Estate (excluding Ministry of Defence) to monitor performance against the Estate's energy efficiency target. Energy consumption in the Government Estate per square metre fell by 6 per cent. between 1997–98 and 1999–2000. Since this figure is collected on a different basis from the figures quoted above for the retail and commercial sectors, it cannot be directly compared.

  Genetic Engineering
  John Barrett
  To ask the Secretary of State for Environment, Food and Rural Affairs if he will list the sites in the UK which involve the experimental genetic engineering of plants to provide simple vaccinations; and which of these sites are in receipt of Government financial support. [63917]

  Mr. Meacher
  There are no trial sites of GM plants in the UK for the production of vaccines under the deliberate release regulations. However, my Department is funding one research project which seeks to produce transgenic plants that express GM antibodies, which will provide protection against E.coli 0157:H7 when ingested by livestock. If effective this would have the potential to reduce the level of E.coli 0157 in livestock and hence reduce the risk of zoonotic transmission. The total cost of this project over three years and nine months is £350k.

  The Health and Safety Executive (HSE) is not aware of any current programmes in the UK which involve the production of GM plants for use as vaccines. They are aware of preliminary research aimed at developing GM apples intended to protect against dental caries, which is being carried out by a dental hospital in collaboration with a horticultural research centre.

  A number of centres in the UK are investigating the potential use of GM plant viruses as human or animal vaccines. These centres include the Scottish Crop Research Institute, the John Innes Centre, and Horticulture Research International. These projects which include using Cow Pea Mosaic Virus to deliver human or animal antigens, have been notified to HSE under the Genetically Modified Organisms (Contained Use) Regulations 2000.

  Flooding
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what research has been commissioned by her Department on the likely impact of sea level rise on the land area of the United Kingdom; if a map of projected flooded areas has been produced; and if she will make a statement. [64792]

  Mr. Morley
  Flood Management is a devolved responsibility. The Department has a wide ranging programme of research related to climate change and its impacts. Recent specific research commissioned for flood management has included an assessment by HR
  247W
  Wallingford Ltd. of Coastal Vulnerability in 2075. This considered the potential impact of sea level rise and related changes for typical coastal defence structures and generally confirmed that current allowances for sea level rise recommended by the Department are reasonable. These allowances are currently being further reviewed in the light of the Climate Impact Scenarios published by the Department earlier this year.

  Climate change will increase the pressures on defences and increase the risk of flooding to defended areas, but will not significantly change the current maps of indicative coastal flood risk areas produced by the Environment Agency.

  Sites of Special Scientific Interest
  Mr. Llwyd
  To ask the Secretary of State for Environment, Food and Rural Affairs what measures the Government are taking to protect sites of special scientific interest from development. [64708]

  Mr. Meacher
  In England, Planning Policy Guidance note 9 (PPG9) advises local authorities on nature conservation issues, including the importance of sites of special scientific interest (SSSIs) and how they are to be treated in Local Plans and the planning framework. Planning authorities are required to consult English Nature before granting permission for development in, around or likely to affect SSSIs and to consider using their powers to impose conditions where necessary to avoid any damage to sites. Where a planning authority proposes to grant consent despite advice from English Nature to the effect that adverse impacts are likely to arise, the authority must inform English Nature so that it can consider whether to ask the Deputy Prime Minister to call in the application.

  Improved measures to protect SSSI s have been taken by amendments to the Wildlife and Countryside Act 1981, introduced in the Countryside and Rights of Way Act 2000. These concern both owners and occupiers and also public authorities in the exercise of their functions. Additional international nature conservation designations bring further levels of protection.

  The Government indicated in the Green Paper—"Planning: delivering a fundamental change"—that it intended to review all PPGs. The review of PPG 9 will enable it to be updated to reflect the recent legislative changes.

  In Wales, policy on planning and nature conservation is a devolved matter and is the responsibility of the National Assembly.

  EU Management Committees
  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Management Committee of the common organisations of agricultural markets for beef and veal is next due to meet; whether experts nominated by the Scottish Executive(a) have been and (b) are members of it; and if she will make a statement. [64888]

  Mr. Morley
  The EU Beef Management Committee is due to meet on 28 June and on 12 July. UK representation depends on the agenda items under discussion. Officials 248W
  from the Scottish Executive and other devolved administrations attend as necessary in accordance with their interests.

  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Management Committee of the common organisations of agricultural markets for sheep and goats is next due to meet; whether experts nominated by the Scottish Executive(a) have been and (b) are members; and if she will make a statement. [63930]

  Mr. Morley
  Under Article 25 of Council Regulation 2529–2001 on the common organisation of the market in sheepmeat and goatmeat the Commission is mandated to establish a management committee to deal with market management of the sector and any matters arising for which the Commission has competence.

  Within the previous 12 months the management committee has met on nine occasions. The Sheepmeat Management Committee is due to meet in two months time to review the market situation and the impact of the recent reforms.

  UK representation on the EU's Sheep Management Committees depends on the agenda items under discussion. Officials from the Scottish Executive and other devolved administrations attend as necessary in accordance with their interests.

  Packaging Waste Directive
  Mr. Cameron
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans her Department has to ensure that the EU packaging waste directive is fully(a) implemented and (b) complied with and that it is done so in a way that helps consumers return packaging to suppliers. [64308]

  Mr. Meacher
  The current EC directive on packaging and packaging waste is fully implemented by the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 (as amended) and the Packaging (Essential Requirements) Regulations 1998. A revision to the directive has been proposed. When this is finalised it is expected that it will be fully implemented in the UK through amendments to the existing regulations. Compliance with these regulations is monitored by the Environment Agencies. The new directive is expected to include higher targets for the recovery and recycling of packaging waste. As targets increase it will be necessary to recover more packaging material from the household waste stream, and we would therefore expect businesses and local authorities to work together closely to ensure that adequate household collection systems are set up.

  International Trade Unit
  Mr. Lidington
  To ask the Secretary of State for Environment, Food and Rural Affairs how many people are employed and at what grades in the international trade unit of her Department. [64468]

  Margaret Beckett
  On 24 June 2002 staff employed in the international trade unit (International Animal Health Division) were as follows.
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  Grade

  In post

  Vacancies

  Head of division

  1

  0

  Grade 6

  0

  2

  Head of branch

  2

  0

  Veterinary adviser

  6

  2

  Senior executive officer

  3

  0

  Higher executive officer

  9

  0

  Executive officer

  12

  4

  Administrative officer

  23

  2

  Administrative assistant

  16

  4

  Personal secretary

  2

  0

  Typist

  1

  0

  Fishing
  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) in the event that advice on aspects of fisheries management is devolved to regional advisory councils, with which EU member states the Government intends to co-operate in establishing these RACs; and what range of stakeholders she envisages holding membership of them; [64511]

  (2) whether she supports the policy of devolving advice on all aspects of fisheries management to regional advisory councils; and which fishing zones she has identified where such RACs can operate. [64512]

  Mr. Morley
  The Commission's proposals for the establishment of regional advisory councils envisage that they would have the following functions:

  (a) to submit suggestions, of their own accord or at the request of the Commission or a member state, on matters relating to fisheries management to the Commission of the member states concerned:

  (b)to give opinions on Commission or member state proposals for fisheries management;

  (c) to comment on and recommend improvements in the application of Community legislation.

  The UK is supportive of the general principle behind the establishment of regional advisory councils, but the precise role to be given to them will be one of the important matters to be addressed in the forthcoming negotiations in the Council of Ministers. Decisions as to the regions to be covered, and the range of stakeholders to be involved and the member states from which they should be drawn, will have to be considered in consultation with interested parties once the Council has established more clearly the remit of the proposed RACs.

  Refrigerators
  Mrs. Brooke
  To ask the Secretary of State for Environment, Food and Rural Affairs what assistance her Department is planning to give to local councils towards the cost of disposing of refrigerators in this financial year. [64531]

  Paddy Tipping
  To ask the Secretary of State for Environment, Food and Rural Affairs what financial aid has been made available to each local authority to help with the storage and disposal of refrigerators in(a) 2001–02 and (b) 2002–03. [64247]

  Mr. Meacher
  In December 2001, we announced a payment of £6 million to go to local authorities to cover their costs up until March 2002 for the storage and 250W
  disposal of refrigerators. We realise local authorities are in need of further funding and intend to make an announcement as soon as possible.

  Mr. Wilshire
  To ask the Secretary of State for Environment, Food and Rural Affairs how many fridges are awaiting disposal in each(a) waste collection authority and (b) waste disposal authority. [66509]

  Mr. Meacher
  The exact numbers of fridges being stored pending treatment in either waste collection authority or waste disposal authority at any one point in time are not held centrally. However, current estimates suggest there are around 900,000 units awaiting treatment.

  Illegal Meat Products
  Mr. Collins
  To ask the Secretary of State for Environment, Food and Rural Affairs what outbreaks of disease in animals in Cumbria have been linked to the imports of illegal meat products in the past five years. [64877]

  Mr. Morley
  [holding answer 27 June 2002]: The Cumbria Foot and Mouth Disease Inquiry concluded that there is a strong likelihood that the foot and mouth virus that affected the UK during 2001 may have entered the country in an imported animal product—probably illegally imported meat. Prior to 2001, we are not aware of other disease outbreaks in Cumbria that have been linked to illegal meat imports.

  The Government published an action plan on 28 March 2002 to reduce the risk of animal and plant disease entering the country and then threatening our public health, and livestock, agriculture and horticulture industries. The action plan includes undertaking a full risk assessment of the probability of illegal animal products reaching susceptible animals and causing disease, the final report of which will be delivered in the Autumn.

  Wild Animals
  Mr. Letwin
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on her policy relating to the enforcement of statutory constraints on the sale of wild animals. [64376]

  Mr. Meacher
  [holding answer 27 June 2002]: We promote the enforcement of wildlife legislation through our joint chairmanship of the Partnership for Action Against Wildlife Crime. The Partnership is a multi-agency body comprising all the main Government and voluntary bodies committed to reducing wildlife crime. One of its main objectives is to support the networks of Police Wildlife Liaison Officers and HM Customs and Excise Wildlife and Endangered Species Officers, who have statutory responsibility for enforcing the controls.

  Secondments
  Mr. Breed
  To ask the Secretary of State for Environment, Food and Rural Affairs how many secondments and exchanges of staff there have been between central and regional Government offices and organisations with a rural remit since November 2000. [65393]

  Mr. Morley
  [holding answer 1 July 2002]: There have been nine exchanges of staff between central and regional Government and 39 exchanges with organisations with a rural remit.
  251W
  23 staff have been seconded to the European Commission and eight staff to other organisations abroad and those organisations may touch on rural issues.

  Air Quality
  Malcolm Bruce
  To ask the Secretary of State for Environment Food and Rural Affairs which of the

  Site name

  Site type1

  Species measured2

  Start date

  London A3 Roadside

  Roadside

  NOx, CO, PM10,

  20 March 1997

  London Bexley

  Suburban

  03,NOx, CO, SO2, PM10,

  1 May 1994

  London Bloomsbury

  Urban Centre

  03,NOx,CO,SO2,PM0,benzene

  23 January 1992

  London Brent

  Urban Background

  03,NOx,CO,SO2,PM10,

  26 January 1996

  London Bromley

  Roadside

  NOx,CO

  11 August 1998

  Camden Roadside

  Kerbside

  NOx,PM10,

  16 May 1996

  London Cromwell Road

  Roadside

  NOx, CO,SO2,

  20 May 1998

  London Eltham

  Suburban

  03,NOx, SO2,PM10

  1 April 1996

  London Hackney

  Urban Centre

  03, NOx,CO

  6 January 1997

  Haringey Roadside

  Roadside

  NOx,PM10, benzene

  16 May 1996

  London Haringey

  Urban Centre

  03,

  16 May 1996

  London Hillingdon

  Suburban

  03, NOx, CO, SO2, PM10

  3 July 1996

  Hounslow Roadside

  Roadside

  03,NOx,CO

  16 September 1997

  London N. Kensington

  Urban Background

  03, NOx,CO,SO2,PM10,(T+G)

  1 April 1996

  London Lewisham

  Urban Centre

  03, NOx, SO2,

  16 April 1997

  London Marylebone Road'

  Roadside

  03,NOx,CO,SO2,PM10,(T+G), benzene, 1,3–butadiene

  17 July 1997

  London Southwark

  Urban Centre

  03,NOx,CO,SO2,

  14 February 1997

  Southwark Roadside

  Roadside

  NOx,CO,SO2,

  1 April 1997

  London Teddington

  Urban Background

  NOx,SO2,03,

  8 August 1996

  Tower Hamlets Roadside

  Roadside

  NOx,CO

  1 April 1996

  Thurrock

  Urban Background

  03,NOx,CO,SO2,PM10,

  15 September 1996

  London Wandsworth

  Urban Centre

  03,NOx,SO2,CO

  1 April 1996

  West London

  Urban Background

  NOx,CO

  1 January 1987

  London Westminster

  Urban Background

  03, NOx, CO,SO2,PM10,(G only)

  17 July 2001

  1Site types are described as follows:
  Kerbside: A site sampling within 1 metre of the edge of a busy road.
  Roadside: A site sampling between 1 metre of the edge of a busy road and the back of the pavement. Typically this will be within 5 metres of the road, with a sampling height of 2–3 metres.
  Urban Centre: A non-kerbside site, located in an area representative of typical population exposure in town or city centres (e.g. pedestrian precincts and shopping areas). This is likely to be strongly influenced by vehicle emissions, as well as other general urban sources of pollution. Sampling at or near breathing—zone heights (1.4–4 metres) will be applicable.
  Urban Background: An urban location distanced from sources and therefore broadly representative of city—wide background conditions e.g. elevated locations, parks and urban residential areas.
  Suburban: A location type situated in a residential area on the outskirts of a town or city. Will be influenced by several sources of pollution including traffic, commercial, space heating. regional transport. urban plume downwind of a city.

  2Pollutant species: 03—ozone; NO,—oxides of nitrogen (include nitrogen dioxide); CO-carbon monoxide: S0,—sulphur dioxide; PM,,,—particulate matter of aerodynamic diameter less than 10 micrometres. PM,0 monitoring is carried out using either the TEOM (Tapered Element Oscillating Microbalance; T in table above) or Gravimetric sampling (G in table above). Monitoring is by TEOM alone unless otherwise stated.

  3London Marylebone Road is a research site and is used for a variety of monitoring projects mostly involving measurement of airborne particulate matter.

  Food Imports
  Mr. Gale
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will bring forward proposals to ban the import of food products produced(a) under conditions and (b) using chemicals that would not be permitted in the United Kingdom. [65150]

  >Mr. Morley
  [holding answer 1 July 2002]: European Community rules require all products of animal origin imported from third countries to be produced to standards at least equivalent to those applied to Community production, and to conform to rules limiting or banning the use of certain chemicals. All consignments imported are subject to veterinary checks at an authorised border
  252W
  pollutants covered by the National air quality strategy are monitored by of the main London air quality monitoring sites.

  Mr. Meacher
  [holding answer 1 July 2002]: There are Air Quality 24 air quality monitoring sites in London reported in the National Air Quality Archive (http://www.airquality.co.uk).The pollutants measured at these sites, site type and their start Food and Rural Affairs which of the dates are given in the table.

  inspection post to ensure that import requirements have been complied with. Consignments that do not comply are rejected and will be re-exported or destroyed.

  Food which is not of animal origin, such as fruit and vegetables, entering the UK from third countries must meet the same food safety standards as apply to food produced in the UK. Under UK national regulations such imports are subject to checks on the basis of risk assessment by local food authorities at the point of entry to the UK and they can refuse entry or arrange destruction of foods that do not meet the UK's requirements.

  Food coming to the UK from other EU member states is in free circulation within the EU and is not subject to

  253W
  routine checks at UK ports. Such food can be subject to random, non-discriminatory import checks where there is information to support such action.

  From time to time the EU may make Decisions to be acted on by all member states, which require additional inspection or testing of specified foodstuffs.

  Oral Questions
  Mr. Simon Thomas
  To ask the Secretary of State for Environment, Food and Rural Affairs how many oral questions she has transferred to other departments in each of the last 18 months. [65509]

  Mr. Morley
  DEFRA was created in June 2001, and since then the number of oral questions transferred to other Government Departments in each month is shown in the following table.

  Number of oral questions transferred

  June 2001

  6

  October 2001

  7

  November 2001

  2

  December 2001

  3

  January 2002

  2

  March 2002

  2

  April 2002

  0

  May 2002

  3

  June 2002

  1

  Total

  26

INTERNATIONAL DEVELOPMENT

  G7 Finance Ministers' Meeting
  Tony Worthington
  To ask the Secretary of State for International Development what the outcome was of the G7 Finance Ministers' meeting on 14 and 15 June regarding funding for education in developing countries; and if she will make a statement. [64669]

  John Healey
  I have been asked to reply.

  At their meeting in Halifax, G7 Finance Ministers noted the World bank's Education Action Plan and strongly endorsed the expeditious implementation of a plan focused on programme quality and measurable results. They pledged that, "each of us in turn will work to support the 'Education for All' goals with countries that have credible education plans and strong policy commitments in place. We urge other donor Governments and the multilateral development banks to join us".

  Zimbabwe
  Mrs. Spelman
  To ask the Secretary of State for International Development what assessment she has made of the effectiveness of NEPAD in bringing good government to Zimbabwe. [66220]

  Clare Short
  I refer the hon. Member to the answer I gave her on 15 May 2002, Official Report, column 692W.
  254W
  Ann Clwyd
  To ask the Secretary of State for International Development what part the Crown Agents played in the(a) procurement and (b) supply of the Land—Rover Defender vehicles supplied to the Zimbabwean police as part of a DfID—funded project. [65214]

  Clare Short
  I suspended this project in May 2000 as it was no longer appropriate given the turbulent political situation and clear evidence of misuse of the vehicles for political ends. The Government of Zimbabwe placed the procurement contract directly with Land Rover Exports Ltd. The Crown Agents were not involved in the contract, but administered the grant account on behalf of the Zimbabwe Government.

  Drought (Africa)
  Mr. Paul Marsden
  To ask the Secretary of State for International Development, pursuant to the answer of 20 May,Official Report, column 14W, on Africa, what further financial assistance has been given to (a) Malawi, (b) Mozambique, (c) Zimbabwe and (d) other African countries affected by the drought; and if she will make a statement. [65042]

  Clare Short
  I refer the hon. Member to the answer given to the hon. Member for South-East Cornwall (Mr. Breed) on 17 June 2002, Official Report, column 61W.

  Arms Trade (Indian Subcontinent)
  Gregory Barker
  To ask the Secretary of State for International Development what representations her Department has received regarding the amount of GDP Pakistan spent since 1998 on(a) arms imports in general and (b) arms imports from the United Kingdom. [65451]

  Clare Short
  My Department has not received any representation since 1998 regarding the amount of GDP Pakistan spent on arms imports in general. DFID is working with the World bank and IMF to track Pakistan's reform programme, including the pattern of fiscal expenditure. Pakistan's defence budget as a percent of GDP has been broadly stable around 4 per cent. over recent years. However, Pakistan's intention to reduce defence spending is under threat given the current stand-off with India.

  The total value of UK standard individual export licences (SIEL) applications for which licences were issued in 1999 and 2000 was £11.5 million and £6 million respectively. By contrast, Pakistan's budget defence expenditure between 2000–01 was approximately £1.6 billion.

  Sudan
  Mr. Bercow
  To ask the Secretary of State for International Development if she will make a statement on the aid to be provided to non-departmental organisations to assist the people of Sudan in 2002–03. [646961

  Clare Short
  The UK provides humanitarian support to Sudan through non-Government and international organisations. We also support the peace process and the preparation for peace. We expect to spend about £8 million in 2002–3.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for International Development if she will list the EU directives and regulations that have been implemented through her Department in 2002; and what was the cost of each to public funds. [649911

  Clare Short
  No new directives relating to international development have been implemented through my Department in 2002. The question of cost does not arise.

  Mr. Bercow
  To ask the Secretary of State for International Development if she will list the EU directives relating to her Department which have been(a) amended and (b) repealed in 2002. [64941]

  Clare Short
  No EU directives relating to international development matters have been amended or repealed in 2002.

  EU Aid
  Mr. Bercow
  To ask the Secretary of State for International Development if she will make a statement on the steps she has taken to improve the quality and timeliness of EU interventions in seeking to assist the poorest countries. [64692]

  Clare Short
  My Department's detailed proposals to improve the quality, effectiveness and poverty focus of EC aid have been set out in strategy papers published in December 1998 and August 2001.

  Development
  Mr. Bercow
  To ask the Secretary of State for International Development if she will make a statement on the purposes for which the United Kingdom's annual contributions to the International Development Association are used. [64694]

  Clare Short
  Under the last three year replenishment, the UK contributed 7.3 per cent. of new donor resources for the International Development Association (IDA)—the aim of the World bank providing concessional finance to the poorest countries.

  The World bank's annual report 2001 details the use of IDA funds by country, region and sector. This report will be available in the Library of the House.

  Globalisation
  Mr. Bercow
  To ask the Secretary of State for International Development if she will make a statement on the progress of her proposals for managing the process of globalisation in a way that increases opportunities for the world's poor. [64701]

  Clare Short
  The second White Paper on International Development sets out an agenda for managing globalisation to ensure that poor people are able to share in its benefits. The White Paper sets out long term commitments for how the Government will contribute to achieving the Millennium Development Goals.

  Report on progress is contained in DFID annual reports.

DEPUTY PRIME MINISTER

  English Heritage
  Mr. Laurence Robertson
  To ask the Deputy Prime Minister if he will make a statement on the role of English Heritage in planning applications. [66516]

  Mr. McNulty
  English Heritage is a non-Departmental Public Body responsible for advising the Government on all aspects of the built heritage in England. It has a statutory role as consultee in certain planning and other heritage casework. This role is set out in the Town and Country Planning (General Development Procedure) Order 1995 and the joint DETR/DCMS Circular 01/2001.

  Ordnance Survey
  Norman Baker
  To ask the Deputy Prime Minister under what circumstances Ordnance Survey is permitted deliberately to omit information from OS maps; who is empowered to require this; and if he will make a statement. [65165]

  Mr. McNulty
  Ordnance Survey works within the guidelines of a Sensitive Site Register and discusses with the owners of the properties on the register the detail which can be shown on our mapping.

  Beacon Status
  John Austin
  To ask the Deputy Prime Minister when he will invite councils to apply for beacon status in the fourth round of the scheme. [66798]

  Mr. Raynsford
  We will publish an application brochure shortly, inviting councils to apply by 26 September 2002. Copies of the brochure will be placed in the Library of the House.

  Health and Safety
  Mr. Clifton-Brown
  To ask the Deputy Prime Minister if he will make a statement on his departmental responsibility for setting health and safety standards for new building works and on their implementation by the Health and Safety Executive. [63707]

  Mr. Leslie
  The health and safety standards which must be achieved by new building works are set by the Building Regulations and are the responsibility of the Office of the Deputy Prime Minister. These standards are enforced by local authority building control officers. The Health and Safety Executive, responsibility for which now resides with my right hon. Friend the Secretary of State for Transport, enforces the separate legislation protecting the health and safety of workers and the public from risks arising during construction work.

CULTURE, MEDIA AND SPORT

  Clarence House
  Fiona Mactaggart
  To ask the Secretary of State for Culture, Media and Sport what her estimate is of the cost of refurbishment of Clarence House; and how it will be funded. [62349]
  257W
  Dr. Howells
  Detailed surveys are currently taking place to ascertain the extent of the Clarence House refurbishment works, which include work on fire compartmentation, automatic fire detection, upgrade of electrical and mechanical services and some redecoration. It is not possible to provide a firm estimate of the cost of the refurbishment until the completion of these surveys. The refurbishment will be funded from the current level of grant in aid for the maintenance of the Occupied Royal Palaces.

  Royal Palaces
  Fiona Mactaggart
  To ask the Secretary of State for Culture, Media and Sport what profit has been made from admission charges to(a) Windsor Castle and (b) Buckingham Palace in each year since 1992. [62350]

  Dr. Howells
  The net surplus from admission charges to Windsor Castle and Buckingham Palace for the years requested1 are presented in the following tables:

  1Figures for 2001–02 not available.

  Windsor Castle—year ended 31 March

  Year

  £

  1992–93

  0

  1993–94

  100

  1994–95

  1,605

  1995–96

  1,908

  1996–97

  2,257

  1997–98

  2,381

  1998–99

  3,416

  1999–2000

  2,386

  2000–01

  2,096

  Buckingham Palace—year ended 31 March

  Year

  £000

  1992–93

  0

  1993–94

  1,090

  1994–95

  1,336

  1995–96

  1,615

  1996–97

  1,630

  1997–98

  1,023

  1998–99

  996

  1999–2000

  782

  2000–01

  604

  Queen Mother
  Mr. Gordon Prentice
  To ask the Secretary of State for Culture, Media and Sport whether special payments were made to Westminster City council to offset the costs it incurred in preparing for the funeral of Her Majesty the Queen Mother. [65590]

  Dr. Howells
  Costs incurred by Westminster City council in preparing the processional route for the funeral of Queen Elizabeth the Queen Mother will be met by the Government. They will shortly submit their claim to the Department for approval.

  Interior and Garden Design
  Miss McIntosh
  To ask the Secretary of Stae for Culture, Media and Sport what estimate she has made of the contribution to the UK economy of British interior and garden design in the last 12 months. [64491]
  258W
  Dr. Howells
  Responsibility for the sponsorship of design rests with the Department of Trade and Industry. The Creative Industries Mapping Document 2001, published by my Department in March 2001, estimated that the size of design related activity within the UK economy as a whole at £26.7 billion. No separate estimates were made for interior and garden design.

  Royal Parks Agency
  Dr. Tonge
  To ask the Secretary of State for Culture, Media and Sport what discussions she has had with the Royal Parks Agency concerning the pay award to employees for April 2001–02 formalised in September 2001. [64671]

  Dr. Howells
  My right hon. Friend the Secretary of State has had no discussions with the Royal Parks Agency concerning the pay award to employees for 2001–02. I understand that the Royal Parks management and the trade unions are currently discussing the 2001–02 pay award.

  Television Licences
  Mr. Oaten
  To ask the Secretary of State for Culture, Media and Sport when she expects to introduce measures to preserve the rights of beneficiaries of the Accommodation for Residential Care concessionary television licence scheme when the (a) social mix and (b) level of warden cover in their sheltered housing changes. [64743]

  Dr. Howells
  [holding answer 27 June 2002]: Consultations between officials and the BBC about the necessary amendments to the television licence fee regulations to introduce the proposed changes are currently under way. We intend to bring forward these amendments as soon as we can, but it is important that in doing so we do not create any new anomalies or unnecessary administrative burdens.

  Mr. Hancock
  To ask the Secretary of State for Culture, Media and Sport how many households are entitled to free TV licences in Portsmouth; and if she will make a statement. [65376]

  Dr. Howells
  TV Licensing, which administers the free television licence scheme for the BBC as Licensing Authority, is not able to provide geographical breakdowns of the number of free licences issued. However, estimates based on the 1991 Census indicate that there were approximately 14,600 people aged 75 or over in Portsmouth.

  Radio Stations
  Mr. Weir
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made of the start up costs for access radio stations. [65109]

  Dr. Howells
  The Radio Authority has appointed a consultant to carry out an independent evaluation looking at a number of issues including start—up and on—going costs for each station. The Radio Authority's report will be sent to the Secretary of State early next year.
  259W
  Mr. Weir
  To ask the Secretary of State for Culture, Media and Sport what recent discussions she has had with representatives of small independent local radio stations on accessibility to digital radio multiplexes; and if she will make a statement. [65117]

  Dr. Howells
  None.

  Film Classification
  Mr. Letwin
  To ask the Secretary of State for Culture, Media and Sport if the British Board of Film Classification is able to change the criteria against which it determines classification of films. [64374]

  Dr. Howells
  [holding answer 27 June 2002]: Yes. The British Board of Film Classification is an independent body. The guidelines it has established reflect the law, but they also take into account public consultation and research, and are reviewed periodically to reflect changes in public tastes, attitudes and concerns.

  Public Inquiries
  Mr. Randall
  To ask the secretary of State of Culture, Media and Sport what her policy is on using 0870 telephone numbers for inquiries by the public to the Department and its agencies.

  Dr. Howells
  My Department does not currently use 0870 telephone numbers to handle public inquiries or for any other purpose.

  Digital Television
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the different standards of definition used in digital television broadcasting. [65458]

  Dr. Howells
  [holding answer 1 July 2002]: Standards for definition used in broadcasting are set out in the Independent Television Commission's Community Digital Standards, which are to be adopted by all licenced services. These can be found at http://www.itc.org.uk/ itcpublications/codesguidance/DigitalCommunityStandards/ The BBC follow the specifications agreed by broadcasters in the D-book issued by the Digital Television Group.

  OFCOM
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on progress in appointing a Chairman of Ofcom. [65464]

  Dr. Howells
  [holding answer 1 July 2002]: Advertisements for the position of Chairman of OFCOM have appeared in the national press and newspapers in Scotland, Wales and Northern Ireland. A panel, including two independent members, will interview short-listed candidates shortly and we hope to announce the name of the successful person towards the end of July or early in August.

  National Lottery
  Sue Doughty
  To ask the Secretary of State for Culture, Media and Sport what guidelines have been put in place by the Secretary of State to guarantee that lottery 260W
  money distributors transfer funds to grant recipients as quickly as possible; and what measures are in place to monitor the efficacy of these guidelines. [65599]

  Mr. Caborn
  While the Government wishes to see Lottery funds benefit individuals and communities as quickly as possible, Financial Directions to Lottery distributing bodies do prevent them from drawing down money from the National Lottery Distribution Fund until that money is needed to meet the costs and expenditure incurred by grant recipients.

  We have asked distributors to explore fully what they can do, within their existing financial directions, to transfer committed funds more quickly to grant recipients. We are also considering, with distributors, how the financial directions might be amended to accelerate the transfer of committed funds, and whether any amendments might usefully be supplemented by guidance from my Department.

  Recycling
  Sue Doughty
  To ask the Secretary of State of Culture, Media and Sport what proportion of(a)paper and (b) other goods purchased by her Department was recycled paper in each year since 1997; what the annual total cost of these purchases was; what plans there are to increase these proportions; and if she will make a statement. [65765]

  Dr. Howells
  All paper purchased for use in photocopiers, printers and Fax machines is recycled paper. Where the quality of the end product allows, all print orders also specify recycled paper is to be used. Paper is purchased as part of general stationery and that commodity before 2000–2001 was not recorded as a separate cost. In year 2000–2001 expenditure on paper was £27,450. In it 2001–2002 it was £29,363. The DCMS has in place, an Environmental Management System, one aspect of which is sustainable procurement, and central to which is the requirement for continuous improvement in environmental performance.

  Swimming Pools
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport how many(a) indoor and (b) outdoor Olympic standard swimming pools there are in England. [65466]

  Mr. Caborn
  [holding answer 1 July 2002]: We have contacted Sport England to request this information and I will write to the hon. Member as soon as it is available, placing copies of my letter in the Libraries of both Houses.

  School Sport
  Sue Doughty
  To ask the Secretary of State for Culture, Media and Sport when she will implement plans to invest in school sports as announced by the Prime Minister on 11 January 2001 and 9 June. [65598]

  Mr. Caborn
  DCMS/DfES are working together to deliver the PE school sport and club links project outlined by the PM in his announcements. Already 1.8 million primary pupils are benefiting from our investment in the school sports coordinators (SSCo) programme. Where SSCo partnerships have been established,
  261W
  pupils are enjoying increased: extra-curricular provision; opportunities for competitive sport; links with secondary schools easing the transition between Key Stages Two and Three; access to qualified sports coaches; and opportunities to access training in sports leadership. By September this year there will be 142 specialist sports colleges supporting 742 SSCos and 3,576 primary link teachers. SSCOs will be key in delivering the entitlement for all 5 to 16-year-olds to two hours a week of high quality school sport and physical education within and beyond the curriculum. We will extend the SSCo programme to reach all primary pupils by 2006 (subject to spending review decisions).

  Tennis Courts
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport how many(a) indoor, (b) outdoor with lighting and (c) outdoor without lighting tennis courts there are in England. [65465]

  Mr. Caborn
  [holding answer 1 July 2002]: We have contacted Sport England to request the information, and I will write to the hon. Member as soon as it is available, placing copies of my letter in the Libraries of both Houses.

  PFI Projects
  Ms Shipley
  To ask the Secretary of State for Culture, Media and Sport which PFI projects fall under the responsibility of the Department's NDPBs. [65070]

  Dr. Howells
  I refer my hon. Friend to the reply I gave her on 10 June 2002,Official Report, columns 1014–15W, which refers to the PFI projects under the responsibility of the Department's NDPBs.

  Tourism
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport (1) if she will make a statement on the impact on the English Tourism Council of her plans to change the marketing of tourism in England; [65457]

  (2) what effect her plans to change the marketing of tourism in England would have on visitengland.org.uk; [65454]

  (3) if she will make a statement on her plans to change the marketing of tourism in England; and what progress has been made; [65462]

  (4) if she will make a statement on the long-term future of the English Tourism Council; [65456]

  (5) if her plans to change the marketing of tourism in England would transfer functions of the English Tourism Council to (a) her Department, (b) the regional tourist boards, (c) the regional development agencies and (d) other companies or organisations; [65455]

  (6) if she will list those who were consulted about her plans to change the marketing of tourism in England prior to their announcement; [65461]

  (7) if she will make a statement on the marketing of tourism in England. [65453]

  Dr. Howells
  [holding answer 1 July 2002]: My right hon. Friend the Secretary of State's announcement on 13 May of a programme of modernisation and radical change followed a full day seminar in October 2001,
  262W
  discussion at the Tourism Summit of Ministers in March 2002 and a Tourism Forum meeting in April 2002. In addition, there has been close consultation with Alan Britten (chairman of the English Tourism Council) and with chairs of regional development agencies as well as informal discussion with many people in the tourism industry over the last year.

  Since that announcement, good progress has been made in developing plans for the domestic marketing of English tourism. I have chaired two meetings of a small steering group, comprising senior representatives of the English Tourism Council, British Tourist Authority, Tourism Alliance, regional development agencies, regional tourist boards, Local Government Association and the private sector. We have considered a model for public-private coalition for domestic marketing and made an intital assessment of priorities for strategic develivery of other support to the industry, including considering the roles to be played by the regional development agencies, regional tourist boards and local government.

  In due course, we will make a further statement on the marketing of English tourism within the UK, a role which is not currently carried out at national level. However, the events of 2001 illustrated its huge potential and we intend to respond to that opportunity, since it will increase the long-term growth potential and sustainability of the industry. The industry is fully in support of this strategic change and key areas that the new organisation (a radically reformed English Tourism Council) is likely to consider are: the development of a national marketing strategy (including e-tourism and the usefulness and appropriateness of websites such as visitengland.org.uk); thematic marketing of England within the UK along the lines of what the British Tourist Authority does successfully abroad; engagement of the private sector (including match funding); and more efficient coordination of the huge expenditure on tourism marketing that already takes place at regional, sub-regional and local level.

  The English Tourism Council has worked effectively to take forward much of what was set out in the Government's 1999 strategy, Tomorrow's Tourism; it has also engaged the regional tourist boards to work efficiently together, including piloting new ideas and disseminating the results of those projects. I am pleased with this progress and we now want to increase the emphasis on delivery and results. The regional development agencies are best placed, working in partnership with the regional tourist boards, to do much of this. Accordingly, we will radically change the English Tourism Council into a body that focuses on marketing and associated activities such as e-tourism and relevant research. We have not yet decided on any transfer of functions to the bodies referred to in the question and no changes are planned to visitengland.org.uk. We will make a fuller announcement once we have completed our deliberations.

HOME DEPARTMENT

  Retail Crime
  Bob Spink
  To ask the Secretary of State for the Home Department what the annual cost of retail crime to(a) business, (b) local authorities and (c) the police has been in the past three years. [54564]
  263W
  Mr. Denham
  I refer the hon. Member to the answer I gave to the hon. Member for Weston-Super-Mare (Brian Cotter) on 14 May 2002, Official Report, column 606W.

  European Legislation
  Mr. Rosindell
  To ask the Secretary of State for the Home Department, pursuant to his answer of 13 March 2002,Official Report, column 1100W, on European Documents, if he will make a statement on the nature of legislation under discussion in the fields of (a) visa policy, (b) information exchange and analysis, (c) pre-frontier measures, (d) border management, (e) improvement and co-ordination at operational level, (f) work of Europol and (g) aliens and criminals law and readmission and return. [57887]

  Beverley Hughes
  The Action Plan on illegal immigration was adopted at the Justice and Home Affairs Council on 28 February 2002. Measures within the plan are to be implemented in the short and medium term, with short-term measures to be implemented as soon as possible and in principle within one year of adoption of the Action Plan. Outlined below are the short term measures—both legislative and operative—in the six areas of the plan:

  Visa policy
  To improve document security on the basis of new technologies.To run a pilot project on using joint infrastructures and to strengthen consular co-operation.To conduct a feasibility study to determine the main features of the common visa identification system.
  Information Exchange and Analysis
  To draft an annual report consisting of a statistical overview and data analysis.To conduct a feasibility study with a view to developing a European system for exchanging information.To implement and appraise the existing Early Warning System.
  Pre frontier Measures
  To step up co-operation via the liaison officer network.To continue to implement the action of the High Level Working Group on Asylum and Migration.
  Measures relating to Border Management
  To put into practice a risk assessment.To conduct a feasibility study on improving sea border controls.To analyse the possible contribution from police college (CEPOL) towards improving training.To step up co-operation with the operational services in the member states.To analyse the feasibility of a joint external borders service.
  Readmission and Return Policy
  To improve practical co-operation between the competent services.
  To determine appropriate criteria and practical arrangements for the compensation between member states of costs resulting from the enforcement of expulsion decisions.
  To analyse the actions and measures that may be envisaged on the basis of the Commission's Green Paper on return.
  To conclude outstanding readmission agreements with third countries.
  To further identify third countries with which readmission agreements need to be negotiated.
  To establish standards for the transit of returnees.
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  Europol
  No short term measures.

  Penalties
  To put into practise the new Community instruments aimed at combating illegal trafficking of human beings.
  To determine the possibility of granting certain benefits/assistance to victims of trafficking of human beings.
  To conduct a study of the laws of the member states.
  To analyse the possibility of adopting provisions on confiscation of financial gains and on confiscation of means, in particular means of transport used in criminal activities relating to illegal immigration.
  To consider follow up to the Directive on carrier liability.

  Correspondence
  Mr. Kaufman
  To ask the Secretary of State for the Home Department (1) when he will reply to the letter to him dated 18 March from the right hon. Member for Manchester, Gorton with regard to Afghan asylum-seeker ref DEV/00/1506; [61681]

  (2) when he will reply to the letter to him dated 25 April from the right hon. Member for Manchester, Gorton with regard to Mrs. Amina Mdalem Fadem; [61685]

  (3) when he will reply to the letter to him dated 22 April from the right hon. Member for Manchester, Gorton with regard to Mr. Ahmad Rezak [61683]

  Mr. Blunkett
  I wrote to my right hon. Friend on 1 July 2002.

  Social Exclusion
  Paul Flynn
  To ask the Secretary of State for the Home Department what assessment he has made of the level of social exclusion in the city of Newport; and how his recently announced programme will measure a change in social exclusion. [63336]

  Mr. Denham
  [holding answer 20 June 2002]: The Newport Community Safety Partnership undertook a very thorough audit of crime and disorder in the city which informed their 'Strategy to Reduce Crime and Disorder in Newport 2002–05', which I launched publicly on 17 June 2002. Many people and groups were consulted during the audit process including councillors, MPs, interest groups and minority groups.

  The new strategy provides not only a clear direction for combating crime and disorder, but also addresses social inclusion issues. The strategy sets out clear objectives, performance indicators and targets for its key aims and progress against these will be the measure of its effectiveness. The strategy aims to: encourage good citizenship among young people; reduce the number of violent crimes; reduce the level of property crime; reduce the impact of drugs and alcohol and make Newport a safer place. Change will also be evinced by the Welsh Assembly Government's own social inclusion programme, which includes the Communities First initiative.

  Serious Fraud Office
  Mr. Vaz
  To ask the Secretary of State for the Home Department when he last met the Director of the Serious Fraud Office. [64229]
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  Mr. Bob Ainsworth
  My right hon. Friend, the Home Secretary, has not had any meetings with the Director of the Serious Fraud Office since he became Home Secretary. However, the Home Department maintains close relations with the Serious Fraud Office and I attended an inter-departmental meeting on his behalf on 10 June at which the Director. Rosalind Wright, was also present.

  Immigration and Nationality Directorate
  Mr. Vaz
  To ask the Secretary of State for the Home Department when he last met(a) the Director of Public Prosecutions, (b) the President of the Law Society and (c)the Chairman of the Bar; where he has advertised the post of Director-General of IND; when he will appoint the Director-General of IND; and how many civil servants are employed in IND. [64230]

  Beverley Hughes
  My right hon. Friend the Home Secretary (Mr. Blunkett) last met the Director of Public Prosecutions on 10 June 2002 and the Chairman of the Bar Council on 8 March 2002. The Secretary of State has not yet met the current President of the Law Society.

  The post of Director-General of the Immigration and Nationality Directorate (IND) was advertised in the media as follows:

  21 April 2002—The Sunday Times Public

  22 April 2002—The Voice

  23 April 2002—Ethnic Media Group

  24 April 2002—The Guardian

  25 April 2002—The Times (repeated from the Sunday Times).

  It is expected that an announcement about the appointment of a new Director-General of IND will be made during July.

  There are 11,253 civil servants employed by IND.

  Animal Research
  Mrs. Helen Clark
  To ask the Secretary of State for the Home Department (1) what assessment he has made of the reporting of the methods used in research on primates at Cambridge University; [64259]

  (2) what assessment he has made of progress made in research on primates at Cambridge University in the past five years; [64258]

  (3) what investigation he has made of non-animal alternatives to the research on marmoset brain research at Cambridge University; [64256]

  (4) what plans he has to review research into primates at Cambridge University; [64260]

  (5) what factors he took into account in assessing marmoset brain research at Cambridge University in order to evaluate (a) the potential benefits to be derived from the research and (b) the suffering likely to be experienced by the marmosets; [64254]

  (6) what assessment he has made of (a) the housing conditions and (b) the post-operative care of marmosets involved in research at Cambridge University; [64257]

  (7) if he will refer the research into primates at Cambridge University to the Animal Procedures Committee; [64261]
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  (8) what factors informed his decision to give each of the project licences for marmoset brain research at Cambridge University a moderate severity band. [64255]

  Mr. Bob Ainsworth
  We have received a copy of a report of an investigation carried out by the British Union for the Abolition of Vivisection into primate research at Cambridge university, and we are in the process of giving it careful consideration.

  As part of that, the Chief Inspector of the Animal (Scientific Procedures) Inspectorate has been commissioned to report on the documentation, analysis and advice underpinning the original severity limits and severity bands on the relevant project licences. In addition he will advise on whether the licensing decisions were sound and defensible, and will review compliance with the relevant licence authorities.

  The Animals Procedure Committee (APC) may advise the Secretary of State about any issues relating to the Animals (Scientific Procedures) Act 1986. The APC has been made aware of the concerns recently raised about the research in question, but the Secretary of State does not plan at this stage to refer the matter to the Committee, pending receipt of the Chief Inspector's report.

  The general factors taken into account in assessing the applications for licences to conduct the research are as set out in the Guidance on the Operation of the Animals (Scientific Procedures) Act 1986, and in the Chief Inspector's paper on the cost/benefit assessment published as part of the Animal Procedures Committee annual report of 1997 (both are available in the Library). In determining whether and on what terms to grant a project licence, section 5 (4) of the 1986 Act requires that the likely adverse effect on the animals concerned must be weighed against the benefit likely to accrue as a result of the programme specified in the licence.

  The severity bands assigned were determined according to the principles set out in the relevant sections of the Home Office Guidance on the Operation of the 1986 Act. The assessment of the severity band for the project as a whole reflects the number of animals used on each protocol and actual suffering likely to be caused as result. It is based on the overall level of cumulative suffering to be experienced by each animal, not just the worst possible case. It takes into account the proportion of animals expected to reach the severity limit of the protocol and the duration of the exposure to that severity limit, the nature and intensity of the adverse effects, and the actions taken to relieve the suffering. Professional judgment must be applied by the Animals (Scientific Procedures) Inspectorate (ASPI) on a case-by-case basis.

  Under the provisions of the 1986 Act, animals can only be used in scientific procedures when there is no alternative way to achieve the objective concerned, such as using computer models, cell cultures and other in vitro methods. This condition applies to the research conducted at Cambridge university and (ASPI) challenged, verified and advised this is the case. ASPI is composed of medical and veterinary graduates with a wide range of experience and expertise in the biomedical sciences, including research methods not involving the use of living animals. All establishments designated under the 1986 Act are required to provide standards of care and accommodation complying with the provisions of the Home Office Code

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  of Practice for the Housing and Care of Animals used in Scientific Procedures. This is required through conditions of issue attached to the Certificates of Designation and is monitored through the inspection programme. The required standards of post-operative care in this case were prescribed through the terms and conditions of the relevant certificate of designation, project licence and personal licences.

  Progress and conduct of the research has been monitored by ASPI in the normal way through announced and unannounced inspections, supplementary information obtained when licence amendments were sought, and from publications resulting from the programme of work.

  We will consider what further action may be appropriate when we have received the Chief Inspector's report.

  Norman Baker
  To ask the Secretary of State for the Home Department when the statistics of Scientific Procedures on Living Animals in 2001 will be published. [64742]

  Mr. Bob Ainsworth
  [holding answer 23 June 2002]: It is expected that these statistics will be published in the second half of July 2002.

  Yarl's Wood
  Mr. Patrick Hall
  To ask the Secretary of State for the Home Department how many detainees who were present at Yar l's Wood Immigration Detention Centre on the evening of 14 February had been removed from Britain as of Tuesday 21 May. [59254]

  Beverley Hughes
  Information about the number of detainees who have been removed is not readily available and could be obtained only at disproportionate cost by an examination of individual case files.

  CRE (Annual Report)
  Mike Gapes
  To ask the Secretary of State for the Home Department when he plans to make available the Commission for Racial Equality 2001 annual report. [66703]

  Mr. Blunkett
  The Commission for Racial Equality's Annual Report 2001 is published today.

  I have arranged for copies to be placed in the Library and for copies to be sent to the Scottish Parliament and the National Assembly for Wales.

  Police
  Harry Cohen
  To ask the Secretary of State for the Home Department what influence the funders of the British Transport police have over its policies, operational matters and personnel; and if he will make a statement. [66446]

  Mr. Jamieson
  I have been asked to reply.

  The duties and responsibilities regarding the organisation, control and governance of the BTP are set out in the British Transport Police Force Scheme ("the scheme"). The current text of the scheme can be found in the Schedule to Statutory Instrument 1994–609. The scheme provides that the British Transport police (BTP) is under the direction and control of the chief constable. The chief constable, who is appointed by the BTP
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  Committee, is responsible for the administration of the BTP in accordance with the directions given to him by the BTP Committee.

  The scheme provides that it shall be a duty of the BTP Committee to, among other things:

  (i) supervise the administration of the force by the chief constable on such lines as it may from time to time determine, following consultation with the SRA and others, to give him such directions as may from time to time be necessary for that purpose;

  (ii) secure the maintenance of an adequate and efficient police service by the force;

  (iii) determine the number of persons of each rank in the force; and

  (iv) provide and maintain such buildings, structures, premises, vehicles, apparatus, clothing and other equipment as may be required for the purposes of the force.

  The scheme also prescribes the composition of the BTP Committee, which is currently nine members including the chairman. The scheme provides that the BTP Committee shall consist of a chairman appointed by the Strategic Rail Authority (SRA), not more than six other members appointed by the SRA and one member each appointed by the operator of the national rail network and London Regional Transport. The scheme further provides that among the six SRA appointed members certain interests must be represented. These are:
  at least one member who has wide experience of, or who has shown capacity in, the control or administration of police; and
  a member appointed after consultation with the Rail Passengers' Committee and who has wide experience of the interests and concerns of users of railway services and facilities.

  In addition to these two specified required representatives, the SRA has currently appointed two independent members and two representatives of the train operating companies.

NORTHERN IRELAND

  Certified Timber
  Ms Walley
  To ask the Secretary of State for Northern Ireland if he will list the refurbishment projects that(a) are in progress and (b) will start within the next six months; and what action is being taken to ensure that these will procure certified timber. [59762]

  Jane Kennedy
  The refurbishment projects currently being completed or due to start within the Northern Ireland Office are as follows:Compensation Agency—Refurbishing new accommodation for the Criminal Injuries Compensation Appeals Panel. In progress.
  Criminal Justice Division—Refurbishment work at Rathgael. In progress.
  Criminal Justice Division—Refurbishment of new offices for the Youth Justice Agency. Likely to start within the next eight weeks.

  Refurbishment contracts are procured for the Northern Ireland Office by the Department of Finance and Personnel Construction Service. No reference is made to the use of certified timber in any contract documents or specifications given to contractors.

  Performance Targets
  Mr. Bercow
  To ask the Secretary of State for Northern Ireland what has been the(a) cost and (b)saving from the pursuit of the Department's Public Service Agreement targets in each year since they were introduced. [61044]

  Jane Kennedy
  The NIO's Public Service Agreement (PSA) was first published in October 2000 to cover the three-year period 2001–02 to 2003–04. As the PSA targets effectively embrace virtually all of our departmental activities, the cost of seeking to meet our PSA objectives is essentially the same as our total departmental expenditure. For 2001–02 (the first year of our PSA) this is currently estimated at £1.052 billion.

  The efficiency elements within our current PSA are already reflected in the profiling of the budget set for the Department whereby anticipated reductions in spending in one area are redirected to offset emerging pressures in other areas.

HOUSE OF COMMONS

  Television Monitors
  Mr. Stunell
  To ask the Chairman of the Administration Committee what the estimated number of television monitors on the parliamentary estate is. [65727]

  Mrs. Roe
  It is estimated that there are 2,300 television monitors on the Parliamentary Estate.

FOREIGN AND COMMONWEALTH AFFAIRS

  Ministerial Salaries
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the annual cost was of ministerial salaries in his Department in(a) 1997–98 and (b) 2001–02. [609341

  Mr. Mike O'Brien
  The level of ministerial salaries is recommended by the Senior Salaries Review Body. From May 1997, there were at the FCO one Cabinet Minister, at an annual salary cost of £43,991; three Ministers of State, at annual salaries totalling 1 14,088; and two Parliamentary Under-Secretaries of State, at annual salaries totalling £67,255. Since June 2001, the FCO has had one Cabinet Minister, at an annual salary cost of £68,157; three Ministers of State, at annual salaries totalling £140,995; and two Parliamentary Under-Secretaries of State, at annual salaries totalling £87,796.

  Those Ministers who are Members of the House of Commons also receive the full parliamentary salary, in recognition of their continuing constituency duties.

  Afghanistan
  Mr. Blunt
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many prisoners were taken during coalition operations in Afghanistan; and how many of these are thought to be Chechen. [64455]
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  Mr. Mike O'Brien
  We do not hold the information requested which would need to take into account prisoners taken by British forces as well as other coalition partners.

  Liberia (Timber Trade)
  Ms Walley
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the UK Government will support the extension of the United Nations sanction against Liberia to cover the Liberian timber trade; and if he will make a statement. [64354]

  Mr. MacShane
  The UK supports UN Security Council resolution (UNSCR) 1408 (2002), which calls on Liberia to establish a transparent and internationally verifiable audit regime to ensure that revenue derived from the Liberian timber industry is used for legitimate social, humanitarian and development purposes, and not for purchasing arms.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the EU directives and regulations that have been implemented through his Department in 2002; and what was the cost of each to public funds. [64970]

  Peter Hain
  The Foreign and Commonwealth Office plays a co-ordinating role in the United Kingdom's EU policy, and so rarely implements EU directives. Regulations are directly applicable in the member states without the need for further incorporation into national law.

  I am not aware of any directives on which the Foreign and Commonwealth Office has led on implementation this year.

  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the EU directives relating to his Department which have been(a) amended and (b) repealed in 2002. [64950]

  Peter Hain
  The Foreign and Commonwealth Office plays a Co-ordinating role in the United Kingdom's EU policy, and so rarely leads on the amendment or repeal of EU directives and regulations.

  I am not aware of the amendment or repeal of any directives or regulations on which the Foreign and Commonwealth Office has led this year.

  Statutory Instruments
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many statutory instruments have been(a) introduced, (b) removed and (c) amended by his Department since 1 January; and what the (i) cost and (ii) saving has been in each case. [64637]

  Mr. Straw
  A list of statutory instruments which have originated from the Foreign and Commonwealth Office since January 2002 are listed as follows. To provide an assessment would incur disproportionate costs.

  As from 1 March 2002 explanatory memorandums have been provided for all affirmative instruments as announced by the Leader of the House on Friday 1 February 2002.
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  S.l. title

  Number

  The Territorial Sea Act 1987 (Jersey) (Amendment) Order 2002

  2002/250

  United Nations The Al-Qa'ida and Taliban (United Nations Measures) Order 2002

  2002/111

  United Nations The Al-Qa'ida and Taliban (United Nations Measures) (Overseas Territories) Order 2002

  2002/112

  The Pitcairn Court of Appeal Order 2000 (Amendment) Order 2002

  2002/249

  The Al-Qa'ida and Taliban (United Nations Measures) (Amendment) Order 2002

  2002/266

  The Al-Qa'ida and Taliban (United Nations Measures) (Overseas Territories) (Amendment) Order 2002

  2002/251

  The Overseas Territories (Zimbabwe) (Restrictive Measures) Order 2002.

  2002/1077

  The Geneva Conventions (Amendments) Act (Overseas Territories) Order 2002

  2002/1076

  British Nationality the British Overseas Territories Act 2002 (Commencement) Order 2002

  2002/1752(c.34)

  The Consular Fees Act 1980 (Fees) Order 2002

  2002/1618

  Annual Leave
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the average annual leave entitlement is for staff in his Department in 2002. [64646]

  Mr. Mike O'Brien
  I refer the hon. Member to the answer given him by the then Parliamentary Under-Secretary my hon. Friend the Member for Exeter (Mr. Bradshaw) on 6 February 2002,Official Report, column 950W. Leave entitlements have not changed since then. Average leave entitlements could be provided only at disproportionate cost.

  Nuba Mountains Ceasefire
  Mr. Alan Duncan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the effectiveness of the Nuba Mountains ceasefire agreement; and if he will make a statement. [64807]

  Mr. MacShane
  The Nuba Mountains ceasefire agreement is working well. Both the Government of Sudan and the SPLM/A have participated fully in the Joint Military Commission. This has resulted in redeployment of Government troops out of the relevant sectors and of the SPLM/A forces into agreed positions. Humanitarian assistance is being delivered to a region to which access had been denied for a considerable period. The population of the area now enjoys freedom of movement and the ability to cultivate on a wider scale than has proved possible in recent years. The agreement runs out next month. We hope that the ceasefire will be extended and have called on the parties to agree to this outcome.

  Sudan
  Mr. Alan Duncan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many staff in the unit headed by the Special Representative to Sudan are(a) his Department's staff and (b) DFID staff; and what proportion, in (i) cash and (ii) percentage terms, of the budget of the office is provided by his Department. [64806]

  Mr. MacShane
  The Sudan Unit's full-time complement is currently one DFID and three FCO officials. This is in addition to the UK Special Representative and the part-time legal adviser. The unit's staff costs are paid by the officers' parent Departments. The unit can also make recommendations about the use of FCO and DFID programme funds in support of peace, human rights and humanitarian assistance.
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  Mr. Alan Duncan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the(a) dates and (b) venues of meetings between the Sudanese ambassador in London and Ministers in his Department in (a) April, (b) May and (c) June. [64808]

  Mr. MacShane
  The Sudanese ambassador accompanied the Sudanese presidential peace adviser when he met my noble Friend Baroness Amos at the FCO on 7 May.

  United Nations Commission on Human Rights
  John McDonnell
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reason Her Majesty's Government's representative on the United Nations Commission on Human Rights abstained on resolution 2002–11, passed on 2 June. [64958]

  Mr. MacShane
  The resolution, dated 19 April and sponsored by the African Group, proposed termination of the mandate of the UN Special Representative on Equatorial Guinea. The EU unsuccessfully proposed an amendment to permit continuation of a monitoring mechanism. The EU decided by consensus to abstain on the resolution, together with its associates, Canada, Japan, Republic of Korea, most of the Latin American and Caribbean countries. In our statement we expressed deep disappointment at the African Group's refusal to negotiate on the text of the resolution, appreciation for the work of the UN Special Representative, profound concern over human rights violations in Equatorial Guinea, and deep regret at the absence of any monitoring mechanism.

  The EU remains concerned at human rights violations in Equatorial Guinea. In the context of the recent trials of alleged coup plotters, the EU issued a Declaration urging the Government to respect their rights.

  Political Union
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's understanding of the meaning of the phrase "political union" in the Laeken declaration; and if he will cite the previous occurrences of that phrase in documents agreed upon by the European Council. [64704]

  Peter Hain
  The term "political union" has been used at several European Councils to describe the unique political relationship that exists between members of the European Union, as set out in the European treaties. It has no formal definition, accepted by all, whether in Council meetings or elsewhere.

  The term has appeared in a number of documents agreed by the European Council in the past: annexe I of the presidency conclusions of the Vienna European

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  Council 11–12 December 1998; and in conclusions to the Dublin, Rome and Maastricht European Councils in April and December 1990 and December 1991 respectively.

  Western Sahara
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with his EU colleagues regarding the referendum plan for western Sahara; and if he will make a statement. [64598]

  Mr. Mike O'Brien
  UK officials are in regular contact with our EU colleagues. We continue to support the efforts of the UN in trying to find a just and durable resolution to the western Sahara dispute.

  Turkey
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Turkish Government regarding the treatment of members of the Kurdish Rights and Freedom party in(a) Dujaibakin and (b) other cities. [64605]

  Peter Hain
  On 19–20 June, a senior official from the Foreign and Commonwealth Office led a UK delegation at the first formal UK/Turkey Human Rights Dialogue, in Ankara. There was a frank and constructive discussion of the human rights situation in Turkey, the measures recently taken to improve it and what remains to be done to ensure the rights of all, including the Kurds.

  Morocco
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Morocco regarding their treatment of mourners at the funeral of Fadel Ismail. [645991

  Mr. Mike O'Brien
  I have not received any reports of a Moroccan presence at Fadel Ismail's funeral, which took place near Tindouf in Algeria. There were reports of some disturbance at events in western Sahara after the funeral.

  As neither representatives of Mr. Ismail's family nor the Polisario nor the Algerian Government raised this matter with us, we have made no representations to the Government of Morocco regarding their treatment of mourners at the funeral of Fadel Ismail.

  Seville
  Keith Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the size was of the delegation from the UK for the European Council meeting in Seville. [64821]

  Peter Hain
  The delegation from the UK comprised 18 from No. 10 and the Cabinet Office (including the Prime Minister); 13 from the FCO (including the Foreign Secretary and me); one HM Treasury; and nine security staff.

  Taiwan
  Mr. Hoyle
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support he has provided to the Government of Taiwan in support of Taiwan's application for observer status at the World Health Organisation. [652171
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  Mr. MacShane
  Taiwan's relationship to the World Health Organisation was discussed at the World Health Assembly General Committee in May 2002. There was no consensus in the committee for the matter to be discussed in the main assembly session and the matter did not come to a vote.

  Belarus
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he will make to the Belarusian Government concerning the convictions of Mikola Markevich and Pavel Mazheiko for libelling the President; what further action he has planned to ensure that human rights are respected in this case; what action the European Union will be taking; and if he will make a statement. [65386]

  Mr. Mike O'Brien
  The court decision to sentence Nikolai Markevich and Pavel Mozheiko to "restricted freedom" for defaming President Lukashenko is the latest example of the disregard for international standards of human rights in Belarus. Our ambassador at Minsk has already made clear our concerns about the case during informal discussions with the authorities there.

  Representatives from our embassy in Minsk have, together with other like-minded partners (including from the EU, US & OSCE missions) regularly attended the trial. Both defendants have expressed their gratitude for this support, and made it clear that they believed it played a significant part in their not being sentenced to full custodial terms. Both of those concerned are expected to lodge an appeal in the next few days.

  Our embassy in Minsk will continue to monitor the case closely, and we shall continue to consult with our EU and other partners.

  Business Ambassadors
  Keith Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria he adopts in his appointment of business ambassadors. [65367]

  Mr. MacShane
  The ambassadors for British business are selected to represent a wide cross-section of British commercial success. They are people who frequently go abroad on working visits and have a wealth of specialist knowledge backed up by excellent contacts. They include the chairmen and executives of multinationals as well as smaller concerns.

  Keith Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the answer of 21 June 2002,Official Report, column 637W, how many official visits each business ambassador has undertaken, on what date and to which countries. [65366]

  Mr. MacShane
  I will write to my hon. Friend with these details, and copies will be placed in the Libraries of the House.

  Green Minister
  Sue Doughty
  To ask the Secretary of State for Foreign and Commonwealth Affairs who his Department's Green Minister is; when they(a) have attended and (b) plan to

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  attend meetings of the Green Ministers' Committee; what the outcomes of meetings were for his Department's activities; and if he will make a statement. [65981]

  Mr. MacShane
  I am the FCO's Green Minister and attended meetings of the Cabinet sub-committee in February and March this year. I will attend future meetings whenever possible. The committee has helped the KO and other Departments to consider how Government policies can best contribute to sustainable development.

  World Service
  Miss McIntosh
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions his officials have had with HM Treasury as part of the spending review with regard to funding for the BBC World Service. [65753]

  Mr. MacShane
  The BBC World Service's bid was submitted in February to HM Treasury in full, as part of the FCO's bid for additional funding in the Spending Review. Since then, my officials have been actively discussing the merits of the FCO's bid, including the BBC World Service, with Treasury officials. The BBC World Service has also made its own presentation to Treasury.

  EU Enlargement
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment the Government have made of the effect of the membership in the European Union of(a) Poland, (b) The Czech Republic, (c) Slovakia, (d) Estonia, (e) Latvia, (f) Lithuania, (g) Hungary, (h) Slovenia, (i) Cyprus and (j) Malta on the European Union's budget. [65710]

  Peter Hain
  The Berlin European Council (March 1999) set a ceiling of 35 billion euro in payments for new member states for 2004–06. Based on its proposals for phasing in EU policies to new member states, the Commission estimates the cost to the EU budget of up to ten new member states acceding in 2004 to be 28 billion euro for the period 2004–06. This can be financed well within the ceiling on Own Resources (which will remain at 1.27 per cent. of GNP). The Commission's proposals remain the subject of negotiation and no estimate of the cost for individual applicants is given. The Government's view is that the final package must respect the overall financial ceilings agreed at Berlin.

  Gibraltar
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the results of his discussions on Gibraltar with the Spanish Foreign Secretary on 26 June; what deadline exists for the negotiations with Spain on the future of Gibraltar; and if he will make a statement. [65711]

  Peter Hain
  My right hon. Friend the Foreign Secretary and the Spanish Foreign Minister met informally in London on 26 June to continue discussions on Gibraltar. They had a friendly and constructive exchange of views. They agreed that we have made good progress since talks were restarted last year. The two Governments have found a considerable degree of consensus. They underlined their belief that it is sensible and right and in the interests of 276W
  Britain, Spain and the people of Gibraltar to make this effort to resolve the dispute. They agreed to convene a formal Brussels Process meeting on 12 July in Madrid.

  UK-USA Security Agreement
  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the(a) purpose and (b) accountability of the 1948 UK-USA security agreement. 165155]

  Mr. Straw
  It is a long-standing practice of this Government and previous Administrations not to comment on the detail of confidential arrangements which might exist between the UK and the US for the UK's national security.

  M16
  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs what mechanism exists to ensure that the exchange of information undertaken between(a) MI6 and (b) GCHQ and sister organisations within friendly countries, and to which Ministers do not have access, is conducted in a manner consistent with the national interest. [65159]

  Mr. Straw
  Both SIS and GCHQ carry out their functions under the Intelligence Services Act (ISA) 1994. Section 2(2) and 4(2) of the ISA require that the Chief of the SIS and the Director of GCHQ put in place arrangements for ensuring that no information is obtained by SIS or GCHQ respectively and disclosed by them except in the interests of national security; for the purposes of the prevention and detection of serious crime; in the interests of economic well-being of the UK; or for the purpose of any criminal proceedings. The arrangements must also ensure that GCHQ and SIS do not take any action to further the interests of any United Kingdom political party. I am satisfied that the arrangements are in place to meet those requirements.

TRADE AND INDUSTRY

  Exhibitions and Seminars Abroad Scheme
  Mr. Sheerman
  To ask the Secretary of State for Trade and Industry what changes her Department plans to make in the support for the Exhibitions and Seminars Abroad Scheme. 160769]

  Ms Hewitt
  A review of certain rules and procedures for the Exhibitions and Seminars Abroad (SESA) Scheme was concluded in March this year. This put forward a number of options for change which were subsequently refined into a set of recommendations. A wider ranging review of the needs of British Trade International's customers is currently under way. This is a strategic review to develop a simpler, more coherent and effective portfolio of services and it is sensible that the outcome of the work on SESA should now feed into this wider review. We shall not therefore be making significant changes to the SESA terms and conditions at this time, although one change is being made. This is the removal of the requirement for a minimum group size when groups of companies attend events with SESA support and therefore the removal of the need for a separate "niche" category for support.

  Departmental Grants
  Mr. Andrew Turner
  To ask the Secretary of State for Trade and Industry which organisations and outside bodies which were in receipt of grant in 1997–98 no longer are; what the annual saving is (i) individually and (ii) in aggregate; which organisations and outside bodies which were not in receipt of grant in 1997–98 now are; and what the annual cost is (A) individually and (B) in aggregate. [62247]

  Ms Hewitt
  I refer the hon. Member to the reply given by my right hon. Friend, the Chief Secretary on 17 June 2002, Official Report, columns 136–37W.

  Western Sahara
  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what advice is given to United Kingdom companies wishing to operate in western Sahara. [64604]

  Ms Hewitt
  The British embassies in Rabat and Algiers are able to offer appropriate advice on a case-by-case basis to UK companies wishing to operate in western Sahara. More generally we advise companies wishing to operate in that territory to seek the advice and agreement of both parties to the dispute (the Moroccans and the Algerians/Polisario, who are all represented in London) as part of their business planning.

  Carbon Emissions
  Mr. Simon Thomas
  To ask the Secretary of State for Trade and Industry what the (a) current total annual carbon emissions and(b) expected total annual emissions from installed capacity for all projects in the power sector fuelled by coal, oil or gas that have received assistance from the ECGD are since 1997. [65193]

  Ms Hewitt
  Since ECGD does not have readily available information on the completion dates and operating schedules of all the power projects that the Department has supported, it is not possible easily to calculate actual total carbon emissions since 1997.

  However, for power projects for which a guarantee has been issued since 1997 it is estimated that upon completion of these projects total annual carbon emissions will be of the order of 13.3 million tonnes. This is based on the following assumptions:

  Fuel Type

  ECGD Estimated capacity (MW)

  CO2(tonnes per year)million

  Carbon (tonnes per year)million

  Coal

  11,260

  40.6

  11.1

  Oil

  492

  1.1

  0.3

  Gas

  4,367

  7.1

  1.9

  Total

  16,139

  48.8

  13.3

  It has been assumed the plants operate for 60 per cent. of the time (5,256 hours per year). CO2, emissions are calculated using the following conversion factors—Coal: 0.687 tonnes of CO2, per MW per hour, Oil 0.417, Gas: 0.309. These are taken from the Greenhouse Gas Protocol website, www.ghgprotocol.org, and are the 1999 average values for power plants in "Economies In Transition". These are the markets where ECGD most commonly provide guarantees.
  278W
  Carbon emissions are calculated by assuming that carbon makes up 27.3 per cent. of the atomic mass of CO2.

  It should be noted that for most large power projects ECGD is only one of several finance providers. Scaling the carbon emissions by the proportion of finance guaranteed by ECGD would give a figure of less than 6 million tonnes per year of carbon, or less than 21 tonnes per year of CO2, that is directly attributable to ECGD's participation.

  Arms Exports
  Gregory Barker
  To ask the Secretary of State for Trade and Industry what the value was of ECGD support relating to arms exports to(a) Pakistan and (b) India since February 2000; and what payments have been made under the ECGD scheme. [65407]

  Ms Hewitt
  ECGD has not supported any defence exports to either Pakistan or India since February 2000.

  Nuclear Power Stations
  Mr. Jenkin
  To ask the Secretary of State for Trade and Industry if he will list the infringements of the no-fly zones around nuclear power stations that have been reported since inception, giving(a) the date, (b) the location and (c) an account of each incident; what action was taken to follow up each incident; and if she will make a statement. [64960]

  Mr. Jamieson
  I have been asked to reply.

  There have been no confirmed infringements of flying restrictions around civil nuclear power stations since 1991. Information on earlier incidents is not readily available.

  Construction Industry
  Mr. Sheerman
  To ask the Secretary of State for Trade and Industry what action she is taking to eliminate bogus self-employment claims in the construction industry. [63052]

  Dawn Primarolo
  I have been asked to reply to my hon. Friend.

  The Inland Revenue aims to ensure that the law on employment status is applied even-handedly across all sectors of industry, and that includes the construction industry sector. As part of its ongoing compliance strategy, the Inland Revenue's local employer compliance review teams consider employment status issues to ensure employers and contractors are compliant with the tax and National Insurance laws generally.

  Motor Vehicles (LPG Conversions)
  Mr. Peter Duncan
  To ask the Secretary of State for Trade and Industry how many grants in respect of LPG conversions of motor vehicles have been given in each of the last five years. [65254]

  Mr. Jamieson
  I have been asked to reply.

  The table gives the number of LPG vehicles benefiting from PowerShift grants in the last five years.
  279W

  Financial year

  Number of LPG vehicles receiving Powershift grants

  1997–98

  195

  1998–99

  637

  1999–2000

  1,674

  2000–01

  4,246

  2001–02

  3,967

  LPG Fuel
  Mr. Peter Duncan
  To ask the Secretary of State for

  1997

  1998

  1999

  2000

  2001

  2002

  Private and Light Goods

  6,715

  10,121

  14,421

  21,098

  23,916

  24,308

  Buses

  31

  53

  97

  121

  139

  153

  Goods vehicles

  75

  93

  141

  171

  237

  236

  Special vehicles

  1,327

  1,281

  1,310

  1,394

  1,408

  1,417

  Exempt vehicles

  698

  733

  774

  903

  1,103

  1,115

  Other vehicles

  241

  253

  267

  281

  303

  331

  Total

  9,087

  12,534

  17,010

  23,968

  27,106

  27,560

  These figures actually understate the number of vehicles because not all conversions to alternative fuelling are notified to DVLA and motorists are converting to LPG at an increasing rate. The total is expected to increase by about 25,000 per year over the next two years, prompted by the Government grants available, and the fact that low-cost LPG fuel is now available in all areas of the country.

  All vehicles used on public roads in the UK have to be licensed annually. Generally such licensing includes payment of a duty of excise (Vehicle Excise Duty) on the licence but a number of vehicles are exempt from payment of duty. All of the vehicles included in the table as PLG, buses, goods, and special vehicles are subject to payment of VED. The category "other vehicles" includes motorcycles and other miscellaneous vehicles.

WORK AND PENSIONS

  Blind and Partially-sighted People
  Mr. Tom Clarke
  To ask the Secretary of State for Work and Pensions what plans he has to consult organisations representing blind and partially-sighted people including the Royal National Institute for the Blind in developing the next UK Employment National Action Plan. [40417]

  Mr. Nicholas Brown
  The current UK Employment Action Plan—for 2002–has been completed and deposited in the Library. It highlights the Government's employment strategy that seeks to ensure that the most help is given to those who face the greatest difficulty finding work, of which disabled people are a key group. The Department liaises with organisations like the Royal National Institute for the Blind (RNIB) on these policies, which are already in place or are being developed, at various stages.

  In addition to that consultation, the UK Disability Forum for Europe, to which the RNIB belongs, contributed to the 2002 plan. This contact will be continued when the next plan, for 2003, is being prepared.
  280W
  Trade and Industry how many vehicles subject to vehicle excise duty are capable of using LPG fuel. [65249]

  Mr. Jamieson
  I have been asked to reply.

  DVLA statistics do not distinguish between liquefied petroleum gas (LPG) and, say, natural gas vehicles; only between vehicles that are dedicated gas or petrol/gas combinations. Generally, however, cars and light commercial vehicles tend to use LPG, while heavier vehicles use natural gas. The table shows the last five years for which figures are available:

  Officials will be discussing with RNIB how best that organisation might continue to the preparation of the 2003 plan.

  Mr. Tom Clarke
  To ask the Secretary of State for Work and Pensions what measures he intends to include in the next UK Employment National Action Plan to improve job opportunities and job retention for blind and partially-sighted people. [40418]

  Mr. Nicholas Brown
  The current UK Employment Action Plan—for 2002—has been completed and deposited in the Library. It highlights the Government's employment strategy that seeks to ensure that the most help is given to those who face the greatest difficulty finding work. In this context, the plan covers policies such as the New Deal for Disabled People, which extend to blind and partially-sighted people, as well as other people with disabilities.

  The exact content of the 2003 plan can only be decided when the European Employment Guidelines—to be proposed this November—have been agreed. However, integrating into the labour market all those with a disadvantage will remain a priority for the UK and for Europe. Therefore, measures in this area are likely to be reported on in the next and future Employment Action Plans.

  Foster Carers
  Alistair Burt
  To ask the Secretary of State for Work and Pensions what plans he has to extend home responsibilities protection to all foster carers to cover the period over which they have fostered children. [54810]

  Mr. McCartney
  Foster carers whose allowance contains a reward element may be liable for national insurance contributions on a self-employed basis. Where there is no liability, they may choose to pay voluntary contributions to assist in qualifying for state retirement pension. Foster carers who receive child benefit for their own children aged under 16 will be eligible for home responsibilities protection. We will keep these arrangements under review as we do with all rules relating to benefits.

  Regional Organisations
  Mr. Andrew Turner
  To ask the Secretary of State for Work and Pensions which of the agencies and NDPBs sponsored by his Department have a regional organisation; and if he will list the counties and unitary authorities in each region in(a) 1997 and (b) 2002. [58953]

  Mr. Nicholas Brown
  I refer the hon. Member to the answer I gave him on 19 June 2002,Official Report, column 406W.

  Ministerial Visits (Wales)
  Mr. Llwyd
  To ask the Secretary of State for Work and Pensions what the(a) date, (b) location and (c) purpose was of visits by Ministers in his Department to Wales since 1997; and when he next intends to visit Wales. [62078]

  Mr. McCartney
  [holding answer 17 June 2002]: Since 1999 this Government have published an annual list of all visits undertaken by Cabinet Ministers costing £500 or more during each financial year. This Government have also published, on an annual basis, the cost of all Ministers' visits overseas. Information in respect of UK travel is not held centrally and could be provided only at disproportionate cost.

  However my right hon. Friend the former Secretary of State (Alistair Darling) visited Swansea and Bridgend on the 12 February 2002, where he visited one of our new Pension Centres and a Jobcentreplus Office. My right hon. Friend the Secretary of State (Andrew Smith) has no immediate plans to visit Wales, however my hon. Friend the Parliamentary Under-Secretary of State (Malcolm Wicks) is planning to visit Wales in the next month.

  Benefits and Pensions
  Mr. Jenkins
  To ask the Secretary of State for Work and Pensions what has been the cost of(a) unemployment benefit and (b) pensions as a percentage of the total services budget, in each year since 1997. [63171]

  Mr. Nicholas Brown
  Information is not held in the precise form requested. The Department accounts for its administrative and programme expenditure in accordance with its key objectives, which are published in the Department's Public Service Agreement (PSA), and the individual Requests for Resources (RfRs), which are published in the Main Estimate. Details of the total consumption of resources from 1998–99 onwards by areas now included within the Department for Work and Pensions, and of the amounts specific to people of working age and pensioners, are published in Table 1 of the DWP Departmental Report 2002–03 to 2003–04 (Cm 5424) which is available in the Library. Directly comparable figures for 1997–98 are not available.

  Early Retirement
  Mr. Drew
  To ask the Secretary of State for Work and Pensions if he will make a statement on the impact of early retirement on pension provision. [65017]

  Mr. McCartney
  [holding answer 27 June 2002]: If people choose to retire early, they must save more over the years that they are working to achieve the same retirement income.
  282W
  The Government believe that people should be able to make an informed choice when they plan their retirement, so that they have accumulated sufficient pension savings to provide the income they wish to receive. Our pension forecasting programme will help to achieve this by showing savers how much they can expect on retirement at state pension age.

  The Government are also committed to active ageing. We are tackling age discrimination in employment, not least so that older people have increased opportunities to retain or find work, and are not forced into early retirement. Our Age Positive campaign promotes to employers the business benefits of an age-diverse work force, including the recruitment and retention of older workers. We are encouraging employers to adopt more flexible approaches to retirement for the benefits it can offer businesses and the increased choice and opportunities it offers individuals for a later more active retirement. The report 'Flexible Retirement—a snapshot of large employers' initiatives', published on 17 June, showed that some larger companies are indeed adopting more flexible retirement policies. There are also signs nationally that approaches to early retirement have been changing, as each year for the last four years the employment rate of people aged 50 to state pension age has increased faster than the overall employment rate.

LORD CHANCELLOR'S DEPARTMENT

  Third Parties—Rights Against Insurers
  Mr. Gerrard
  To ask the Parliamentary Secretary, Lord Chancellor's Department if the Government accept the recommendations made by the Law Commission and the Scottish Law Commission in their report on Third Parties—Rights Against Insurers. [66800]

  Ms Rosie Winterton
  The Government have carefully considered this report, and accept the Law Commissions' recommendations. A consultation paper will be issued shortly on implementing the proposals by way of a Regulatory Reform Order.

  Land Registration Act
  Dr. Ladyman
  To ask the Parliamentary Secretary, Lord Chancellor's Department when the Lord Chancellor will implement the Land Registration Act 2002. [66799]

  Ms Rosie Winterton
  The Land Registration Act 2002 will be brought into force on Monday 13 October 2003. This will allow sufficient time to consult on and make the necessary secondary legislation; to develop new office procedures to accommodate the new legislation and to carry out a thorough programme of education and training both within the Land Registry and across the wider conveyancing community.

PRIVY COUNCIL

  Li Ruihuan
  Dr. Gibson
  To ask the President of the Council what representations concerning the situation in Tibet he made
  283W
  to Li Ruihuan, Chairman of the Chinese People's Political Consultative Conference, during Chairman Li's recent visit to the UK; and what response he received. [63863]

  Mr. Robin Cook
  My noble friend the Lord Chancellor met Mr. Li and raised Tibet and other human rights concerns with him.

  I hosted a large reception and banquet for Mr. Li, attended mainly by representatives of Scottish universities and businesses to celebrate their links with their counterparts in China. This occasion did not lend itself to exploring detailed issues of our diplomatic relations.

  I have raised Tibet many times with representatives of the Chinese Government and it figures prominently in the bilateral dialogue between our two Governments on human rights. In May the UK side visited a Tibetan community in Gansu Province, expressed concern at repression of monastic communities and raised the cases of 52 prisoners including Tibetans.

  Parliamentary Questions
  Mr. Beith
  To ask the President of the Council what recent assessment he has made of the performance of Government Departments in providing timely answers to written parliamentary questions; and if he will make a statement. [65561]

  Mr. Robin Cook
  No recent assessment has been made.

  However, I refer the right hon. Member to the reply I gave to the hon. Member for South Suffolk (Mr. Yeo) on 2 May 2002, Official Report, column 949W.

TREASURY

  Monarch (Taxation)
  Norman Baker
  To ask the Chancellor of the Exchequer with reference to the 1993 Memorandum of Understanding, if he will list the categories of taxation where(a) the treatment of the monarch is indistinguishable from that of other citizens, (b) the monarch is exempt and(c) the monarch is exempt but chooses to make voluntary contributions. [65154]

  Mr. Gordon Brown
  The position is fully set out in the memorandum, a copy of which is available in the House of Commons Library.

  Civil List
  Norman Baker
  To ask the Chancellor of the Exchequer if he will make a statement on the implications for Civil List annuity payments of the death of Her Majesty Queen Elizabeth the Queen Mother. [65158]

  Mr. Gordon Brown
  The parliamentary annuity paid to Her Majesty Queen Elizabeth the Queen Mother ceased upon her death.

  Norman Baker
  To ask the Chancellor of the Exchequer whether requirement procedures for notification of the death of recipients of Civil List annuity payments upon the death of those recipients are the same as those for recipients of state pension payments. [65163]
  284W
  Mr. Gordon Brown
  Parliamentary annuities are paid under the Civil List Acts, and the legislation lays down no specific requirement for the notification of death of an annuitant.

  Payments of annuities cease upon the death of the annuitant.

  Norman Baker
  To ask the Chancellor of the Exchequer what the present level is of the Civil List Reserve. [65162]

  Mr. Gordon Brown
  As at 31 December 2001 the Civil List Reserve stands at £37,079,000.

  Climate Change Levy
  Mr. Hancock
  To ask the Chancellor of the Exchequer how many(a) private sector and (b) public sector enterprises are eligible to pay the climate change levy in the Portsmouth, South constituency; and if he will make a statement. [65372]

  John Healey
  This information is not readily available and could be obtained only at disproportionate cost.

  Oral Questions
  Mr. Simon Thomas
  To ask the Chancellor of the Exchequer how many oral questions he has transferred to other Departments in each of the last 18 months. [65513]

  John Healey
  Since January 2001, 16 of the 480 oral questions tabled to Treasury Ministers have been transferred, in each case because they were more appropriate to other Departments. The breakdown sought by the hon. Gentleman is as follows:

  Date of oral questions

  Number transferred

  25 January 2001

  —

  1 March 2001

  —

  29 March 2001

  1

  10 May 2001

  —

  19 July 2001

  1

  8 November 2001

  5

  6 December 2001

  2

  24 January 2002

  2

  28 February 2002

  1

  11 April 2002

  1

  9 May 2002

  —

  20 June 2002

  3

  Company Car Tax
  John Mann
  To ask the Chancellor of the Exchequer if he will make a statement on his plans for company car tax. [65536]

  John Healey
  The new company car tax system linking the charge on the benefit of a company car to the level of its CO2 emissions came into effect April this year.

  The Inland Revenue will be undertaking an extensive evaluation exercise to capture the effects of the reforms.

  Any changes to the system will be made in the context of the Chancellor's Budget decisions in future years.

  Red Diesel
  Mr. Peter Duncan
  To ask the Chancellor of the Exchequer how many random inspections for red diesel were conducted during each of the last five years. [65246]

  John Healey
  To detect misuse of red diesel Customs are increasingly moving to risk-assessed inspections made at premises. Roadside checks of vehicles tend to be less targeted and in some cases have a random element.

  I therefore refer the hon. Gentleman to the answer I gave to the hon. Member for Edinburgh, West (John Barrett) on 20 June 2002, Official Report, column 516W, concerning the number of roadside tests conducted.

  Tax Law Rewrite Project
  Barbara Follett
  To ask the Chancellor of the Exchequer if he will make a statement on the work of the Tax Law Rewrite project. [66803]

  Dawn Primarolo
  I am pleased to tell the House that the Tax Law Rewrite project will soon reach another major milestone. The Inland Revenue will shortly publish the project's second draft Bill, on employment income, pensions and taxable social security benefits, for a final round of consultation. The Bill will be ready for introduction in Parliament by the end of the year.

  Earlier versions of this rewritten legislation have been extensively revised in the light of comments and suggestions from tax professionals and other interested parties. This continuous dialogue between the project team and business interests, tax practitioners, the legal profession and Inland Revenue specialists is a key feature contributing to the success of the project.

  Community Development Venture Fund
  Mr. Don Foster
  To ask the Chancellor of the Exchequer, pursuant to his answer of 7 May 2002,Official Report, column 33W, on the Community Development Venture Fund, if he will place in the Library the performance indicators and targets that will be used for Bridges Community Ventures to measure performance. [61815]

  Nigel Griffiths
  I have been asked to reply.

  The Fund Manager's performance will be primarily measured against:

  (i) Commitment of the Fund within the seven year investment period, with at least 70 per cent. fully invested and the remainder committed to related follow on investment deals.

  (ii) At least a 10 per cent. IRR across a portfolio of between 50 to 60 investment deals.

  (iii) Investment deals being made in businesses located in the 25 per cent. most deprived qualifying wards in England, the business plans of which aim to:

  (a) Create/safeguard that at least 35 per cent. of the employees of such businesses are from qualifying wards, or,

  (b) Stimulate other businesses (e.g. supply chain) with at least 50 per cent. of non-salary expenditure going to local businesses in qualifying wards, or,

  (c) Serve local people and businesses in qualifying wards—i.e. core target for services and products.

  286W
  The Government, along with the other investors in this pilot Fund, expects the Fund to achieve social, as well as investment, returns. An independent specialist will be engaged to evaluate social impact and assess the Fund's performance in helping achieve:-
  Wealth creation in deprived areas:-
  Creation of good jobs in fast growing businesses
  Developing entrepreneurial role models and,
  Encouraging others in the venture capital supply market to spread their investments into the more deprived areas.

  Mr. Don Foster
  To ask the Chancellor of the Exchequer. pursuant to his answer of 7 May 2002,Official Report, column 33W, on the Community Development Venture Capital Fund, if he will place in the Library (a) the criteria used for the tendering process and (b) a list of the companies who applied to administer the fund. [61675]

  Nigel Griffiths
  I have been asked to reply.

  The Community Development Venture Fund (CDVF) is not a Government administered or contracted out Fund, so (a) and (b) do not apply. I also refer the hon. Member to parliamentary question No. 61674 answered today.

  It is a private sector initiative led by Sir Ronald Cohen, in his pro bono role as chairman of the Social Investment Task Force. In order to ensure that public investment in the Fund represents good value for money in promoting the Government's objective of boosting entrepreneurial business in disadvantaged communities, agreement was negotiated based on its experience with the Regional Venture Capital Funds.

  Mr. Don Foster
  To ask the Chancellor of the Exchequer, pursuant to his answer of 7 May 2002,Official Report, column 33W, on the Community Development Venture Capital Fund, if he will list (a) public and (b) private investors in Bridges Community Ventures. [61672]

  Nigel Griffiths
  I have been asked to reply.

  The public investor is the Government through the Phoenix Fund of the Small Business Service.

  The institutional and major individual private sector investors are listed on the Fund Manager's website at: www.bridgesventures.com and are:
  Doughty Hanson & Co; HSBC; Lehman Brothers; Lloyds TSB (Scotland); Merrill Lynch;
  Reuters; Royal Bank of Scotland: Schroder Salomon Smith Barney (partners in Citigroup);
  West Midlands Pension Fund; Sir Ronald Cohen and Tom Singh.

  Mr. Don Foster
  To ask the Chancellor of the Exchequer, pursuant to his answer of 7 May 2002,Official Report, column 33W, on the Community Development Venture Fund, which Government Department will provide the funding announced in the last Budget for Bridges Community Ventures Ltd. [61673]

  Nigel Griffiths
  I have been asked to reply.

  The funding for the Government's investment in the Community Development Venture Fund is being provided by the Small Business Service (Department of Trade and Industry), through its Phoenix Fund.
  287W
  Mr. Don Foster
  To ask the Chancellor of the Exchequer, pursuant to his answer of 7 May 2002,Official Report, column 33W, on the Community Development Venture Fund, if he will place in the Library the invitation to tender for the Community Development Venture Fund; and if he will make a statement on how the information was made available. [61674]

  Nigel Griffiths
  I have been asked to reply.

  The Community Development Venture Fund (CDVF) is not a Government fund but a private sector led venture capital initiative, in which the Government are an investor alongside other private sector investors. As such, the issue of invitation to tender does not arise in this case.

  Number of pensioners paying tax at lower1 rate (000s)

  Percentage of all pensioners2

  Number of pensioners paying tax at starting3 rate (000s)

  Percentage of all pensioners2

  Number of pensioners paying tax at 'sovers' rate4 (000s)

  Percentage of all pensioners2

  Number of pensioners paying tax at basic rate5 (000s)

  Percentage of all pensioners2

  Number of pensioners paying tax at higher rate6 (000s)

  Percentage of all pensioners2

  1992–93

  1,160

  11

  —

  —

  —

  —

  2,190

  21

  130

  1

  1993–94

  1,520

  14

  —

  —

  —

  —

  1,920

  18

  130

  1

  1994–95

  1,390

  13

  —

  —

  —

  —

  2,310

  22

  160

  2

  1995–96

  1,680

  16

  —

  —

  —

  —

  2,110

  20

  180

  2

  1996–97

  2,270

  21

  —

  —

  —

  —

  1,430

  13

  160

  1

  1997–98

  1,840

  17

  —

  —

  —

  —

  1,980

  19

  180

  2

  1998–99

  1,950

  18

  —

  —

  —

  —

  2,200

  21

  190

  2

  1999–2000

  —

  —

  720

  7

  610

  6

  2,650

  25

  220

  2

  2000–01

  —

  —

  760

  7

  610

  6

  2,750

  25

  230

  2

  2001–02'

  —

  —

  920

  9

  580

  5

  2,750

  25

  230

  2

  1 From 1993–94 until 1998–99 a number of taxpayers with taxable income in excess of the lower rate limit only paid tax at the lower rate. This was because it was only their dividend income and (from 1996–97) their savings income which took their taxable income above the lower rate limit, and such income was chargeable to tax at the lower rate and not the basic rate.

  2 Source: Government Actuary's Department.

  3 In 1999–2000 the starting rate replaced the lower rate. Taxpayers with a marginal rate at the 10 per cent. starting rate from an extra £1 of earnings.

  4 Taxpayers with a marginal rate at the 20 per cent. lower rate for savings income or the 10 per cent. ordinary dividend rate from an extra £1 of earnings. Before 1999–2000 these people would have been classified as lower rate taxpayers.

  5 Taxpayers with a marginal rate at the basic rate from an extra £1 of earnings.

  6 Taxpayers with taxable income above the higher rate threshold.

  7 Provisional.

  Pensioners are defined as women aged 60 and over and men aged 65 and over. This information is based on the Survey of Personal Incomes.

  Tax Evasion
  Mr. Hancock
  To ask the Chancellor of the Exchequer what amounts are involved in the prosecutions for taxevasion in the financial year 2001–02; and if he will make a statement. [64249]

  Dawn Primarolo
  The amount involved in the prosecution cases for tax evasion in the financial year 2001–02 is £12,791,736.

  Mr. Hancocky
  To ask the Chancellor of the Exchequer how many prosecutions there have been for tax evasion in each year since 1997; and if he will make a statement. [64250]

  Dawn Primaroloy
  In the years since 1997, the numbers of prosecutions have been as follows.
  288W
  As is common practice in the UK venture capital industry, the fund manager (Bridges Community Ventures Ltd) held discussions with a number of potential investors in the industry.

  Income Tax
  Mr. Willetts
  To ask the Chancellor of the Exchequer, pursuant to his answer to the hon. Member for Tooting (Mr. Cox) of 10 May 2002,Official Report, column 396W, on income tax, (a) how many and (b) what proportion of pensioners paid income tax in each year since 1992 broken down into figures for each tax bracket. [62579]

  Dawn Primarolo
  Estimates of the number and proportion of pensioner taxpayers by tax bracket are shown in the table.

  Total

  Including internal cases of

  1997–98

  83

  13

  1998–99

  57

  8

  1999–2000

  55

  2

  2000–01

  68

  24

  Plus tax credit cases

  2

  —

  Total

  70

  The internal cases detailed include those cases of Inland Revenue employees who were prosecuted. They also include external accomplices.

  The 2000–01 figure of 70 prosecutions includes two cases of tax credit fraud.

  Mr. Hancock
  To ask the Chancellor of the Exchequer how much funding has been given to investigating tax evasion in each year since 1997; and if he will make a statement. [64251]

  Dawn Primarolo
  The amounts of funding given to investigating tax evasion are not recorded in this way by the Inland Revenue.
  289W
  The annual report of the Inland Revenue records figures for the resources allocated to each of its departmental objectives. A copy of this report is in the House of Commons Library.

  One such objective is
  "bringing into the Exchequer the taxes, national insurance contributions and other receipts, maintaining contributory records and disbursing tax reliefs and credits, for which the Revenue are responsible".

  The resources attributed to the meeting of this objective include those which will be used in the investigation of tax evasion, together with other activities aimed at tackling non-compliance more generally. For example, there are some sections of offices and even some individuals, involved in a spread of compliance activities and it is not practical to isolate the funding figures in the way this question has been asked.

  Public Service Monitoring
  Matthew Taylor
  To ask the Chancellor of the Exchequer, pursuant to his answer of 21 June 2002,Official Report, column 586W, on public service monitoring, if he will place the value for money scores for each financial year since 1999–2000 for each Government Department in the Library; and if he will make a statement. [65181]

  Mr. Boateng
  I refer the hon. Member to the answer given to him on 21 June 2002, Official Report, column 586W.

  Land Decontamination
  Ms Shipley
  To ask the Chancellor of the Exchequer what level of tax relief has been provided for land decontamination in each(a) nation and (b) region of the UK. [65067]

  John Healey
  Where qualifying conditions are met, waste arising from the reclamation of contaminated land is exempted from landfill tax wherever in the United Kingdom it is landfilled.

  Companies can also claim a 150 per cent. payable tax credit for the costs incurred in cleaning up contaminated land sites. No estimates of the take-up of this measure are yet available.

  Inheritance Tax
  Mrs. Anne Campbell
  To ask the Chancellor of the Exchequer what plans the Government have to extend inheritance tax provisions to all people in the UK. [65596]

  Dawn Primarolo
  Inheritance tax is payable on the world-wide estate of those who die domiciled in the UK, or are treated as domiciled here by virtue of their length of residence.

  New Businesses
  Vernon Coaker
  To ask the Chancellor of the Exchequer what representations he has received about the requirement for new businesses, including the self-employed, to register with the Inland Revenue within three months of setting up; what steps he has taken to inform businesses of this new requirement; and if he will make a statement. [65704]
  290W
  Dawn Primarolo
  Newly self-employed people who are liable to pay Class 2 National Insurance contributions are required by law to register with Inland Revenue "immediately" but this term was not further defined. Following public consultation, we have established a set time-limit for registration. At its introduction in January 2001 the modified requirement was advertised through the national, regional and ethnic press and on local radio stations. The requirement is clearly stated in all the Inland Revenue leaflets and guidance on starting up in business. Inland Revenue is evaluating the effectiveness of the new requirement and a report will be issued later this year. In 2001, the first year that the new requirement was in force, the number of self-employed people registering with Inland Revenue increased by 19 per cent. over the number registering in the year 2000.

  Treasury Building (Refurbishment)
  Michael Fabricant
  To ask the Chancellor of the Exchequer what plans his Department has to restore the parts of the facade of the Treasury main building not recently cleaned. [65560]

  Ruth Kelly
  Under the terms of the Treasury's PFI deal with Exchequer Partnership plc, it is their responsibility to clean the facade. The remaining parts will be cleaned in the next phase of the project.

  National Insurance (Reduced Rate)
  Mr. Webb
  To ask the Chancellor of the Exchequer on what basis the contribution rate of married women paying national insurance contributions at the reduced rate is set. [65292]

  Ruth Kelly
  [holding answer 1 July 2002]: All National Insurance contribution rates, including those for married women who chose to pay reduced rate contributions, are set to provide for contributory benefit expenditure and for an allocation towards national health service funding.

  Cancer
  Mr. Bruce George
  To ask the Chancellor of the Exchequer what the mortality rate was for skin cancer in the last year for which figures are available. [66682]

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

  Letter from Len Cook to Mr. Bruce George, dated 2 July 2002:
  As National Statistician I have been asked to reply to your question concerning skin cancer mortality rates for the last year for which figures are available. (66682)
  The latest available information is for deaths occurring in 2000. In that year, the death rate in England and Wales for malignant melanoma of the skin (International classification of Diseases Ninth Revision code 172) was 28 per million population for males and 21 per million population for females (directly age-standardised to the European Standard Population).1
  1Source: Office for National Statistics. "Mortality Statistics: Cause. Review of the Registrar General on deaths by cause, sex and age, in England and Wales 2000". Series DH2, Number 27. The Stationery Office (London: 2001).

  HEALTH
  The "Action On" programmes have been established by the Government as part of the modernisation of the national health service. They are led by the modernisation agency service improvement team. Their aim is to significantly encourage and disseminate best practice, improve access to care and to reduce variations in waiting times in the four specialties with the longest waiting times: cataracts, orthopaedics, ear, nose and throat and dermatology.

  Milk
  Gillian Merron
  To ask the Secretary of State for Health what plans he has to ensure that all primary school children receive subsidised milk. [650331

  Mr. Miliband
  I have been asked to reply.

  There are no plans to ensure that all primary school children receive subsided milk. Milk provision policies are decided locally by local education authorities, or the governing bodies of former grant maintained schools and former grant maintained special schools.

  Air Pollutants
  Mr. Swayne
  To ask the Secretary of State for Health, pursuant to his answer of 15 May 2002,Official Report, column 678W, on air pollutants, what plans he has to make and assess measurements of concentrations of aldehydes in the air in localised environments; and if he will make a statement. [61527]

  Mr. Meacher
  I have been asked to reply.

  An assessment of ambient formaldehyde concentrations was carried out by the former Department of Environment, Transport and the Regions in January to March 2000 to help inform the deliberations of the Department of Health's Committee on the Medical Effects of Air Pollutants. Formaldehyde was assessed as a marker for aldehydes. Monitoring sites were located at Teddington, London Marylebone Road, Southampton, Rochester, an industrial site near Hull and a coal burning site near Rotherham. Short-term concentrations (measured over 4 to 7 days) at all locations were low in comparison with concentrations that have been shown to produce irritation (see Table). Thresholds for sensory irritation in the majority of subjects are reported as 0.6–1.2 milligrams per cubic metre for formaldehyde and the World Health Organisation guideline is 0.1 milligrams per cubic metre. The highest concentrations were observed at the traffic dominated site at London Marylebone Road and the industrial site at Hull. No indoor measurements were taken. My Department does not have plans for further measurements of aldehydes.

  Location and site type

  Mean formaldehyde concentration(micrograms per cubic metre1) Minimum and maximum concentrations in parentheses

  Teddington (suburban)

  3.2 (0.25–9.1)

  London Marylebone Road (kerbside)

  13.4 (2–33.6)

  Southampton (urban background)

  2.3 (0.1–20.9)

  Rochester (rural)

  1.2 (0.2–4.0)

  Hull (industrial)

  4.4 (0.15–45.0)

  Rotherham (coal burning area)

  0.6 (0.1–2.5)

  1One microgram per cubic metre is one thousandth of a milligram per cubic metre.

  National Care Standards
  Mr. Andrew Turner
  To ask the Secretary of State for Health (1) what assessment he has made of the accuracy of the national care standards full regulatory impact assessment's annexe A paragraph 7 relating to the cost of upgrading a 24-bed unit; and if he will make a statement; [408871]
  292W
  (2) for what reason the national care standards full regulatory impact assessment placed in the Library between 23 and 31 January did not contain figures in line with a commitment made by his officials to the Leonard Cheshire Foundation on 3 August 2001; if he will publish a corrected version: and how the regulatory impact assessment would need to be amended in the light of this correction. [41269]

  Jacqui Smith
  [holding answer 7 March 2002]: A factual inaccuracy in the regulatory impact assessment has been brought to my attention. I will be making a correction to the regulatory impact assessment so that it accurately represents information provided by the Leonard Cheshire organisation.

  Vaccines
  Dr. Gibson
  To ask the Secretary of State for Health if the Government plan to set up their own vaccine production organisation. [53894]

  Mr. Hutton
  [holding answer 2 May 2002]: There are no plans for the Government to set up their own vaccine production organisation.

  Norman Baker
  To ask the Secretary of State for Health what consideration his Department gave to tests on the(a) Lister and (b) New York strains in smallpox vaccines; and what conclusion they drew, with particular reference to the superiority or otherwise in relation to other strains in vaccines. [54657]

  Mr. Hutton
  [holding answer 8 May 2002]: The choice of new vaccine was made on the basis of advice from the scientific community and from across Government. The advice of experts under the auspices of a specially convened sub-group of the Joint Committee on Vaccination and Immunisation was sought specifically in relation to strain type and vaccine efficacy. Their advice was that there was no significant difference between the two strains on scientific grounds. Vaccines based on both strains were considered to have been effective in the past, and both strains are expected to produce effective new vaccines for the future.

  Though vaccines based upon both strains were used as part of the World Health Organisation's eradication campaign, there was a greater body of evidence to demonstrate the efficacy of the Lister strain vaccine than for the New York City board of health (NYCBH) strain. The Lister based smallpox vaccine, preferred by the UK Government, has been challenged in the field more often by the more severe form of smallpox (variola major) than the NYCBH strain.

  A dual approach, using a different strain for UK vaccine to that preferred by the US Government,as in the past, is considered to offer the best scope for successful new vaccine production,and provides a fall back mechanism if difficulties arise with the production of either vaccine.

  Maladministration
  Annabelle Ewing
  To ask the Secretary of State for Health how many findings there have been of maladministration by ombudsmen with responsibility for agencies under the remit of his Department since 1997. [563091
  293W
  Mr. Lammy
  Information on the handling of complaints is set out in tabular form by the parliamentary ombudsman each year as an attachment to his annual report. For those complaints where there was evidence of maladministration which warranted a full investigation, the table sets out how many complaints were upheld as being fully or partially justified. Copies of the parliamentary ombudsman's annual reports for the period 1997–98 to 2000–01 inclusive can be viewed in the Library, or on the parliamentary ombudsman's website at www.ombudsman.org.uk/publications.

  In addition, the pensions ombudsman has made 21 findings of maladministration with respect to the National Health Service Pensions Agency since 1997.

  Disclosure of Interests
  Mr. Paul Marsden
  To ask the Secretary of State for Health what rules apply to the disclosure of interests on the part of those serving on public bodies which are responsible to his Department. [56459]

  Mr. Lammy
  Government policy on disclosure of interests by members of public bodies was set out in "Quangos—opening the doors" (1998). This policy is reflected in model codes of practice issued by the Cabinet Office for adoption by these bodies. Bodies' codes require that board members should declare in a register for the purpose any personal or business interest which may, or may be perceived to, influence their judgment, and that the register should be kept up-to-date and open to the public. The codes also state that board members should not participate in the discussion or determination of matters in which they have an interest and should normally withdraw from the meeting if their interest is direct and pecuniary.

  Staff Numbers
  Mr. Lansley
  To ask the Secretary of State for Health how many staff were employed in the Medicines Control Agency at 1 April; and what proportion of those staff have clinical contact with NHS patients. [56855]

  Mr. Lammy
  The MCA have employed 517 full-2013;time equivalent staff as at 1 April 2002 of which 12 (2.3 per cent.) have clinical contact with national health service patients.

  General Practitioners
  Dr. Evan Harris
  To ask the Secretary of State for Health what he estimates will be the average cost to general practitioners of opting out of 24-hour responsibility. [65575]

  Mr. Hutton
  This will be addressed as part of the process for pricing the new general practitioners contract which is being negotiated by the National Health Service Confederation and British Medical Association.

  Mr. Hunter
  To ask the Secretary of State for Health if it is his policy to exempt from the recommendation that providers of out-of-hours services put in place appropriate systems for call abandonment, call recording and the recording of clinical consultations those general practitioners who wish to carry out their own out-of-hours cover. [55051]
  294W
  Mr. Hutton
  [holding answer 16 May 2002]: The Government are committed to modernising primary care out-of-hours services in line with the recommendations of the Carson report, "Raising Standards for Patients: New Partnerships in Out-of-hours Care". These improvements include quality standards which all service providers, individual general practitioners (GPs) as well as organised providers, will be required to meet. These standards do however include some easements for individual GPs on reporting requirements and telephony standards for call abandonment, which it would be inappropriate to apply to GPs who choose to provide out-of-hours services themselves until the calls are routed through NHS Direct.

  EC Decisions
  Mr. Rosindell
  To ask the Secretary of State for Health if he will make a statement on the effects of Commission Decision 179 of 18 April 2000, 2002/154/EC, OJ L54 25 February 2002, on current practice; and what reasons underlie the delay in enactment. [57898]

  Mr. Hutton
  The Administrative Commission on Social Security for Migrant Workers oversees the application of regulations (EEC) 1408–71 and 574–72 on co-ordination of the social security and health care schemes of the member states. Administrative Commission Decision 179 concerned technical amendments to a number of European Union forms used for the application of various aspects of the regulations as a consequence of minor changes to the regulations themselves.

  The position on each of the EU forms concerned is as follows:
  El11 has been changed to afford extra health rights for students in some member states; there are no practical effects for UK students. UK El I Is will be amended during the next reprint of the Department's leaflet, "Health Advice for Travellers", in late summer;
  El11B is issued only by Belgium;

  E113 and El14 are not issued by, nor required by, the UK;
  E115–118 are concerned with claims for cash incapacity benefits and are being reprinted;
  El25–127 are used between member states' health administrations on reimbursement of health care costs; UK-issued forms are produced electronically and the computer system is being updated.

  National Institute for Clinical Excellence
  Matthew Green
  To ask the Secretary of State for Health what plans he has to ensure that health care professionals are informed of the direction his Department has given to support the implementation of NICE guidance; and if he will make a statement. [59858]

  Mr. Hutton
  Chief executives of national health service bodies in England were told about the directions in a bulletin to them dated 14 December 2001. They were asked to cascade the information to all relevant staff.

  The directions came into force on 1 January 2002, and place statutory obligations on NHS bodies to provide funding for clinical decisions within recommendations from National Institute for Clinical Excellence within three months of their appraisal guidance being issued. The text of the directions has been placed on three websites:

  www.doh.gov.uldpricare/pcts.htm

  www.doh.gov.uk/finman.htm

  www.psu.ppa.nhs.uk

  Commission for Healthcare Audit and Inspection
  Dr. Evan Harris
  To ask the Secretary of State for Health if the Audit Commission will retain a role in assessing the operational efficiency at the NHS when the Commission for Healthcare Audit and Inspection has been established. [59868]

  Mr. Lammy
  Responsibility for assessing operational efficiency of National Health Service bodies will transfer from the Audit Commission to the new health inspectorate once it has been established. The Audit Commission will retain its core financial function of appointing auditors and undertaking financial audit.

  Capital Projects
  Ms Shipley
  To ask the Secretary of State for Health what recent speeches he has made on design quality within his Department's capital building programme. [59833]

  Mr. Lammy
  My right hon. Friend, the Secretary of State launched the Department's design programme in November 2001 at a joint conference with HRH the Prince of Wales. He recently appointed my noble Friend, the Lord Hunt of Kingsheath as the Ministerial Design Champion. My noble Friend addressed a number of conferences highlighting the Department's design programme 'Achieving Excellence in Healthcare Design', including:

  'Design and Primary Care conference', on 1 May 2002 hosted by the Kings Fund and the commission for architecture and the built environment (CABE). My noble Friend announced the NHS Estates and CABE joint framework agreement to contribute to the programme of delivering design excellence and thereby producing high quality environments for patients and staff. 'Championing Design Excellence in Healthcare Buildings', breakfast meeting at the NHS Confederation on 23 May 2002. My noble Friend addressed some of the recently appointed NHS Trust Design Champions and key decision-makers. `Health Estates Facilities Management Association (HEFMA) conference' on the afternoon of the 23 May 2002. My noble Friend addressed an audience of estates and facilities directors outlining the Departments design programme.

  Future events are planned.

  Correspondence
  Mr. Cran
  To ask the Secretary of State for Health when a substantive reply will be given to Mrs. D. F. Hay's letter of 26 January, concerning the state of the NHS. [59225]

  Mr. Lammy
  [holding answer 24 May 2002]: The Department has no record of receiving this correspondence. The Department's Ministerial Correspondence Unit is seeking a copy of this correspondence.

  Mr. Page
  To ask the Secretary of State for Health when he will respond to the letter of the hon. Member for South-west Hertfordshire of 14 March, Ref 1005934. [662541

  Ms Blears
  A reply was sent on 1 July.

  Mr. Peter Atkinson
  To ask the Secretary of State for Health when he will respond to the letter of the hon. Member for Hexham of 20 February on diabetes and isley research. [65649]
  296W
  Jacqui Smith
  A reply was sent on 8 April.

  Mr. Peter Atkinson
  To ask the Secretary of State for Health when he will respond to the letter of the hon. Member for Hexham of 30 April on NHS dental treatment. [65648]

  Mr. Lammy
  A reply was sent on 1 July.

  Mr. Peter Atkinson
  To ask the Secretary of State for Health when he will respond to the hon. Member for Hexham's letter of 18 March on food security in the UK, ref. MCHANH001761. [65650]

  Ms Blears
  A reply was sent on 24 June.

  Age Discrimination
  Mr. Andrew Turner
  To ask the Secretary of State for Health if(a) his Department and (b) its agencies have a policy of not considering applications for employment by persons over a particular age. [59582]

  Mr. Lammy
  [holding answer 24 May 2002]: At present the Department and its executive agencies have a normal staff retirement age of 60 and do not consider applications for employment from those over that age. However, the Department is now involved in a centrally led initiative, winning the generation game, which will examine age-related issues such as flexible retirement beyond the normal retiring age of 60.

  The Department is committed to ensuring that older people are never unfairly discriminated against and complies with the rules and requirements of the `Minister's Rules for Selection', 'The Civil Service Order Council', Her Majesty's Treasury requirements for recruitment and equal opportunity and employment protection legislation.

  Drug Side-effects
  Mr. Weir
  To ask the Secretary of State for Health what assessment he has made of the structures in place to ensure that adverse drug reactions in patients are picked up at the earliest possible stage in situations where there are concerns about potential side-effects of a drug. [60788]

  Ms Blears
  The Medicines Control Agency (MCA) is responsible for monitoring the safety of medicines on the UK market, and has well-developed procedures in place for pharmacovigilance, enabling early identification and prompt action in relation to drug safety issues.

  The yellow card scheme, introduced in 1964 after the thalidomide tragedy, has a world-wide reputation for effectiveness in detecting previously unidentified drug safety hazards. All newly introduced medicines are monitored intensively for at least two years, during which time the safety profile of the medicine is frequently reviewed to ensure that it is appropriately reflected in the product information for health professionals and patients. In addition to spontaneous reports of suspected adverse reactions, the MCA evaluates data on drug safety from a range of sources. In 1999, MCA acquired the general practice research database and its post-licensing division is now evaluating its potential in contributing to effective pharmacovigilance.
  297W
  The capability for early action on emerging safety issues is reflected in the MCA's high level and operational targets. These measure performance in terms of the time taken to make newly received spontaneous adverse reaction reports available for review and analysis by pharmacovigilance assessors. MCA's performance against targets is published annually and in 2001–02 all targets were met or exceeded, against a background of a 55 per cent. increase in spontaneous adverse reaction reports.

  The committee on safety of medicines (CSM) has a statutory role in advising the licensing authority on promotion of the collection and investigation of adverse reactions. CSM regularly reviews the effectiveness of the yellow card scheme, and on advice of the CSM in 1999 the scheme was widened to include pharmacists. Following a successful pilot in relation to the meningitis C vaccination programme, the CSM has advised that the scheme should be extended to nurses.

  Advertising Campaigns
  Mr. Bercow
  To ask the Secretary of State for Health how much was spent on press and advertising campaigns in 2001–02; and what the planned expenditure is for 2002–03. [60913]

  Mr. Lammy
  In 2001–02 the Department spent £21.146 million on press and media advertising. The Department's current forecast for expenditure on press and media advertising in 2002–03 is £20.494 million.

  PSS budget allocated to children and families per head of population aged under 18

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  Barking and Dagenham

  192

  210

  234

  278

  330

  Barnet

  167

  237

  242

  217

  253

  Barnsley

  159

  193

  197

  216

  245

  Bath and North East Somerset UA

  140

  152

  176

  186

  216

  Bedfordshire

  145

  151

  166

  185

  201

  Berkshire

  165

  1—

  1—

  1—

  1—

  Bexley

  132

  168

  227

  214

  224

  Birmingham

  227

  245

  234

  258

  329

  Blackburn with Darwen UA

  1—

  211

  245

  249

  305

  Blackpool UA

  1—

  218

  254

  306

  390

  Bolton

  186

  188

  200

  211

  231

  Bournemouth UA

  226

  244

  282

  339

  383

  Bracknell Forest UA

  1—

  181

  183

  184

  224

  Bradford

  185

  186

  195

  219

  247

  Brent

  319

  388

  521

  462

  349

  Brighton and Hove UA

  245

  303

  323

  331

  361

  Bristol UA

  277

  299

  322

  295

  311

  Bromley

  192

  205

  273

  298

  286

  Buckinghamshire

  127

  127

  130

  142

  147

  Bury

  139

  149

  186

  212

  219

  Calderdale

  195

  210

  219

  231

  241

  Cambridgeshire (old)

  189

  1—

  1—

  1—

  1—

  Cambridgeshire (remaining)

  1—

  176

  189

  179

  180

  Camden

  483

  549

  712

  581

  620

  Cheshire (old)

  122

  1—

  1—

  1—

  1—

  Cheshire (remaining)

  1—

  120

  123

  133

  161

  City of London

  763

  726

  732

  1.130

  1,135

  Cornwall

  133

  140

  155

  200

  223

  Coventry

  200

  201

  227

  266

  299

  Croydon

  241

  225

  267

  265

  298

  Cumbria

  158

  158

  162

  183

  208

  Darlington UA

  148

  151

  192

  201

  262

  Derby UA

  236

  257

  286

  280

  295

  Derbyshire

  113

  120

  131

  163

  169

  Devon (old)

  143

  1—

  1—

  1—

  1—

  Devon (remaining)

  1—

  126

  129

  180

  200

  Doncaster

  125

  153

  173

  196

  229

  Dorset

  128

  145

  138

  153

  95

  Doctors (Recruitment)
  Dr. Fox
  To ask the Secretary of State for Health if he will list those countries from which his Department will not recruit doctors. [61418]

  Mr. Hutton
  National health service employers should not target developing countries for recruitment of health care personnel unless the Government of that country has reached Government to Government agreements with the UK. In these circumstances, individuals may be appointed to a structured programme aimed at enhancing clinical practice in order for them to return home after an agreed period.

  The only other exception supported under the code of practice is the long-standing tradition of providing health care professionals with formal training and education.

  Children in Care
  Mr. Burstow
  To ask the Secretary of State for Health what the funding was for each of the last five years for children in care in England (a) broken down by health authority and (b) expressed as an average per head. [61365]

  Jacqui Smith
  [holding answer 17 June 2002]: Data on the funding specifically of children in care are not available centrally. Data on the funding of caring services for children are also unavailable broken down by health authority. The table shows the budgets, per head of population aged 18 and over for England, allocated by each local authority for children and family.
  299W

  PSS budget allocated to children and families per head of population aged under 18

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  Dudley

  131

  153

  162

  184

  186

  Durham

  147

  157

  167

  162

  199

  Ealing

  253

  247

  290

  312

  326

  East Riding of Yorkshire UA

  105

  103

  115

  125

  141

  East Sussex

  177

  181

  189

  214

  216

  Enfield

  189

  237

  263

  302

  286

  Essex (old)

  164

  1—

  1—

  1—

  1—

  Essex (remaining)

  1—

  169

  178

  191

  210

  Gateshead

  225

  235

  254

  295

  305

  Gloucestershire

  133

  133

  165

  174

  189

  Greenwich

  334

  349

  443

  516

  515

  Hackney

  564

  599

  646

  618

  601

  Halton UA

  1—

  132

  148

  204

  223

  Hammersmith and Fulham

  627

  663

  848

  837

  547

  Hampshire

  89

  87

  129

  143

  167

  Haringey

  340

  349

  371

  387

  482

  Harrow

  201

  200

  197

  208

  240

  Hartlepool UA

  183

  183

  195

  259

  276

  Havering

  165

  166

  174

  195

  206

  Hereford and Worcester

  162

  1—

  1—

  1—

  1—

  Herefordshire UA

  1—

  158

  165

  192

  214

  Hertfordshire

  146

  154

  161

  192

  203

  Hillingdon

  157

  203

  226

  241

  278

  Hounslow

  255

  250

  264

  296

  390

  Isle of Wight UA

  153

  189

  187

  212

  255

  Isles of Scilly

  33

  22

  25

  38

  76

  Islington

  693

  742

  599

  758

  713

  Kensington and Chelsea

  604

  674

  699

  749

  626

  Kent (old)

  166

  1—

  1—

  1—

  1—

  Kent (remaining)

  1—

  159

  179

  244

  208

  Kingston Upon Hull UA

  280

  317

  375

  445

  480

  Kingston Upon Thames

  182

  200

  241

  209

  237

  Kirklees

  160

  180

  180

  204

  224

  Knowsley

  209

  213

  307

  265

  281

  Lambeth

  426

  456

  486

  558

  599

  Lancashire (old)

  157

  1—

  1—

  1—

  1—

  Lancashire (remaining)

  1—

  155

  167

  182

  210

  Leeds

  241

  256

  296

  315

  339

  Leicester UA

  250

  266

  275

  318

  347

  Leicestershire

  91

  97

  101

  113

  128

  Lewisham

  317

  385

  513

  594

  513

  Lincolnshire

  150

  160

  189

  198

  207

  Liverpool

  268

  277

  290

  309

  394

  Luton UA

  155

  198

  228

  226

  249

  Manchester

  297

  311

  371

  392

  429

  Medway Towns UA

  1—

  180

  196

  210

  213

  Merton

  205

  198

  233

  296

  287

  Middlesbrough UA

  207

  221

  243

  280

  301

  Milton Keynes

  197

  254

  252

  254

  266

  Newcastle Upon Tyne

  282

  248

  324

  363

  394

  Newham

  337

  448

  518

  568

  417

  Norfolk

  123

  133

  153

  205

  215

  North East Lincolnshire UA

  170

  199

  226

  252

  300

  North Lincolnshire UA

  202

  220

  229

  242

  253

  North Somerset UA

  109

  160

  165

  175

  193

  North Tyneside

  291

  303

  357

  299

  300

  North Yorkshire

  110

  110

  115

  119

  127

  Northamptonshire

  145

  152

  166

  199

  191

  Northumberland

  178

  184

  201

  232

  258

  Nottingham UA

  1—

  355

  416

  451

  454

  Nottinghamshire(old)

  189

  1—

  1—

  1—

  1—

  Nottinghamshire (remaining)

  1—

  142

  159

  173

  195

  Oldham

  171

  171

  175

  208

  199

  Oxfordshire

  115

  120

  135

  132

  155

  Peterborough UA

  1—

  277

  336

  356

  389

  Plymouth UA

  1—

  241

  273

  319

  380

  Poole UA

  112

  171

  178

  210

  220

  Portsmouth UA

  184

  225

  220

  278

  299

  Reading UA

  1—

  235

  273

  280

  315

  Redbridge

  170

  176

  178

  195

  201

  Redcar and Cleveland UA

  197

  201

  216

  230

  237

  Richmond Upon Thames

  158

  153

  159

  186

  196

  Rochdale

  198

  205

  218

  225

  201

  Rotherham

  159

  166

  198

  212

  234

  Rutland UA

  41

  49

  59

  66

  87

  Salford

  231

  216

  233

  359

  398

  Sandwell

  205

  216

  241

  260

  288

  300W 301W

  PSS budget allocated to children and families per head of population aged under 18

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  Sefton

  169

  181

  206

  220

  241

  Sheffield

  184

  189

  223

  261

  268

  Shropshire (old)

  132

  1—

  1—

  1—

  1—

  Shropshire (remaining)

  1—

  94

  116

  131

  152

  Slough UA

  1—

  246

  203

  279

  247

  Solihull

  156

  166

  176

  191

  224

  Somerset

  116

  130

  128

  149

  157

  South Gloucestershire UA

  72

  94

  110

  121

  140

  South Tyneside

  232

  257

  285

  302

  343

  Southampton UA

  241

  252

  268

  286

  342

  Southend UA

  1—

  213

  257

  290

  304

  Southwark

  515

  498

  517

  730

  629

  St. Helens

  178

  200

  229

  249

  279

  Staffordshire

  113

  126

  136

  168

  183

  Stockport

  194

  210

  220

  245

  258

  Stockton on Tees UA

  138

  143

  159

  179

  224

  Stoke-on-Trent UA

  193

  212

  314

  252

  266

  Suffolk

  99

  108

  123

  139

  154

  Sunderland

  220

  220

  244

  286

  325

  Surrey

  140

  139

  149

  170

  180

  Sutton

  168

  181

  199

  231

  239

  Swindon UA

  137

  122

  164

  176

  183

  Tameside

  218

  231

  244

  250

  285

  Telford and Wrekin UA

  1—

  230

  189

  200

  241

  Thurrock UA

  1—

  190

  204

  219

  235

  Torbay UA

  1—

  247

  291

  302

  410

  Tower Hamlets

  377

  403

  413

  467

  456

  Trafford

  147

  154

  159

  174

  187

  Wakefield

  208

  212

  234

  215

  216

  Walsall

  153

  160

  205

  272

  339

  Waltham Forest

  222

  257

  297

  305

  344

  Wandsworth

  554

  570

  553

  601

  540

  Warrington UA

  1—

  137

  122

  145

  160

  Warwickshire

  136

  145

  167

  177

  184

  West Berkshire UA

  1—

  149

  166

  196

  207

  West Sussex

  154

  160

  182

  202

  217

  Westminster

  737

  696

  657

  971

  701

  Wigan

  139

  159

  177

  193

  238

  Wiltshire

  118

  116

  132

  145

  157

  Windsor and Maidenhead UA

  1—

  156

  182

  177

  178

  Wirral

  176

  189

  203

  218

  276

  Wokingham UA

  1—

  168

  175

  179

  188

  Wolverhampton

  232

  240

  262

  297

  312

  Worcestershire

  1—

  177

  197

  189

  206

  York UA

  146

  152

  174

  181

  193

  England

  185

  198

  219

  241

  255

  1Not available as the council did not exist in that financial year.

  Notes:

  Budget figures are taken from form RA as recorded by the council's chief financial officer at the start of the financial year and divided by the population aged under 18 at 30 June.

  The population figure used in 2001–02 is the population at 30 June 2000.

  Budget figures shown in this table do not lake account any subsequent revisions made during the financial year.

  Mr. Burstow
  To ask the Secretary of State for Health how many children in care have been found to be illegal substance users in each of the last five years; and if he will make a statement. [64519]

  Jacqui Smith
  The information requested is not held centrally. The Office of National Statistics is currently conducting a survey for the Department of the mental health of children looked after by local authorities in England. The survey questionnaire includes a range of questions about drug use. The Office of National Statistics plans to publish a report of the findings in spring 2003.

  Mutual Organisations
  Mr. Drew
  To ask the Secretary of State for Health if he will make a statement on what support his Department has made available to those wishing to set up mutual organisations in the field of health and social care. [62986]
  302W
  Mr. Lammy
  [holding answer 19 June 2002]: The Department is considering a range of options for the legal status of foundation trusts and a form of mutual organisation may be considered. A new organisational form—the public interest company—may be considered. To date, the Department has not offered specific support available for either option.

  MS Patients
  Bob Spink
  To ask the Secretary of State for Health (1) what assessment he has made of the establishment of the structures necessary to assess MS patients in respect of their suitability for the use of beta interferon; [63147]

  (2) how many MS patients have commenced assessment for eligibility for beta interferon in the first

  303W
  four weeks since the scheme was launched on 6 May in each regional health authority; and if he will make a statement. [63145]

  Mr. Lammy
  It has been estimated that up to 9,000 multiple sclerosis patients in England and Wales may be eligible to receive treatment under the risk-sharing scheme, which started on 6 May 2002. Some centres have now started prescribing under the scheme, though the guidance in Health Service Circular 2002–004 recognises that appropriate national health service infrastructure may not yet be in place in some localities. The scheme co-ordinator will collect information on progress and activity under the scheme, but as yet such details are not available centrally.

  Empty Properties
  Mr. Cox
  To ask the Secretary of State for Health what empty properties in the London borough of Wandsworth are owned by (a) his Department and (b) other public bodies for which he has responsibility. [63590]

  Mr. Lammy
  There are no empty properties owned by this Department within the London borough of Wandsworth.

  There are five former residential cottages on the edge of the Springfield Hospital site currently empty which are part of the national health service estate (owned by my right hon. Friend, the Secretary of State). They are known locally as Burntwood Villas (two), and Myrtle Cottages (three) all of which are situated on Burntwood Lane.

  These properties are currently in the process of being transferred to the local South-West London and St. George's Mental Health NHS Trust, who plan to turn Burntwood Villas into staff accommodation and to redevelop Myrtle Cottages into new general practitioner property.

  These developments are part of the continuing expansion of health care activity on the Springfield Hospital site.

  Enzyme Potential Desensitisatia
  Mrs. Gillan
  To ask the Secretary of State for Health if he will list the health authorities which provide enzyme potential desensitisatia on the national health service. [63531]

  Mr. Lammy
  Information is not held centrally on the types of treatment available to patients on the national health service by health authority.

  Cane Hill
  Richard Ottaway
  To ask the Secretary of State for Health, pursuant to the answer of 10 June 2002,Official Report, column 1088W, on Cane Hill, Coulsdon, which part of his Department is responsible for (a) the day to day management of Cane Hill and (b) making decisions as to its future. [63791]

  Ms Blears
  The day to day management of the non-operational areas of the Cane Hill site is carried out by NHS Estates. The operational areas are managed by South London and Maudsley National Health Service Trust.
  304W
  Similarly, decisions on the future of the surplus areas of the site are made by NHS Estates following discussions with South London and Maudsley NHS Trust and any other relevant parties, and decisions for the future of the operational areas of the site are made by the trust.

  Remploy
  Dr. Murrison
  To ask the Secretary of State for Health what the value is of Remploy products purchased by his Department in each year since 1995. [63824]

  Mr. Lammy
  Payments by the Department to Remploy for goods and services in the last five financial years are £76,005 (1997–98), £14,962 (1998–99), £33,819 (1999–2000), £19,473 (2000–01) and £1003 (2001–2).

  Information prior to 1997–98 is not available. This answer does not include the national health service.

  Crèche Provision (NHS Employees)
  Dr. Murrison
  To ask the Secretary of State for Health what assessment he has made of the adequacy of crèche provision for NHS employees. [63821]

  Mr. Hutton
  A national survey of national health service provision, undertaken early in 2001, found that 114 NHS trusts provided nursery facilities for their staff. The Government recognise that there is a need to provide support for parents working in the NHS in order to be a good employer, to improve the working (and home) lives of staff, and to recruit, retain and return key staff. For this reason, we have made over £70 million available for the NHS child care strategy, to develop an additional 150 further on-site nursery schemes by 2004. 60 new nursery schemes were funded last year and a further 30 have had funding allocated already this year. In addition, we expect all new build hospitals to include an on-site nursery in its plans.

  We are expanding the NHS child care strategy to cover other forms of child care and to ensure that all staff groups are included. We have pledged additional funding for the NHS child care, building up to £100 million, to do this.

  Director of International Recruitment
  Mr. Burstow
  To ask the Secretary of State for Health (1) what the proposed budget is for the Director of International Recruitment for Health Services in the next two years; [63874]

  (2) who will be the next Director of International Recruitment for Health Services; [63875]

  (3) if he will (a) set out the targets set out for the Director of International Recruitment and (b) list the performance against targets of the international recruitment for health for 2001–02. [63876]

  Mr. Hutton
  [holding answer 24 June 2002]: The Department currently has no plans to recruit a Director of International Recruitment.

  Hospitals (Zero Stars)
  Mr. Hoban
  To ask the Secretary of State for Health if he will make a statement on the progress of franchising the management of those hospitals with zero stars. [64326]
  305W
  Mr. Hutton
  Five zero-rated national health service trusts appointed new chief executives under franchise arrangements in May and June. The hospital trusts concerned are: Dartford and Gravesham National Health Service Trust, Ashford and St. Peters Hospital National Health Service Trust, Portsmouth Hospitals National Health Service Trust, Barnet and Chase Farm Hospitals National Health Service Trust, and University Hospitals of Coventry and Warwickshire National Health Service Trust.

  A sixth trust, East and North Hertfordshire National Health Service Trust is in the process of being franchised. The remaining six hospital trusts which received a zero-star rating in September 2001 have been making progress under existing management arrangements and continue to be monitored closely.

  Bed-blocking
  Miss McIntosh
  To ask the Secretary of State for Health whether, with regard to bed blocking, local authority social service departments will be penalised if a patient in hospital is awaiting a place in a home of their choice. [64458]

  Jacqui Smith
  The new approach we have proposed is about putting in place the right incentives to ensure people are able to leave hospital as soon as treatment is completed and it is safe for them to do so. Local authorities and the national health service will need to develop more appropriate settings than an acute hospital ward for patients to await a place in a home of their choice. We will be consulting on the details of the charging system later in the summer.

  Beta Interferon
  Miss McIntosh
  To ask the Secretary of State for Health what progress is being made to make beta interferon available for MS sufferers by (a) primary care trusts and (b) hospital trusts serving North Yorkshire. [64457]

  Ms Blears
  On 4 February 2002, Health Service Circular 2002/004. was issued to the national health service announcing the risk-sharing scheme for drug treatments for multiple sclerosis (MS). The scheme makes provision for an estimated 9,000 MS patients to be eligible for treatment on the NHS.

  In total 49 patients from North Yorkshire were receiving beta interferon therapy by March 2002. Following the implementation of the risk sharing scheme it is expected that the number of North Yorkshire residents receiving treatment will double to over 100.

  Given the potential number of patients who may be eligible, representatives from all four North Yorkshire primary care trusts and the North and East Yorkshire and North Lincolnshire health authority met with clinicians and managers from York Health National Health Service Trust in May 2002 to discuss local implementation of the guidance. The trust prepared an initial assessment of introducing the scheme. An agreed action plan and the timetable for implementing the guidance will be available by the end of July 2002.
  306W
  For North Yorkshire residents who will not use the York assessment service, the following actions are being undertaken:0
  Leeds Teaching Hospitals National Health Service Trust will be in a position to implement from July 2002.
  Hull and East Yorkshire Hospitals NHS Trust has set up a steering group which met on 27 June 2002.
  South Tees Acute Hospitals National Health Service Trust has identified a designated specialist consultant neurologist and a list of patients requesting treatment is being drawn up. A plan for the delivery of the service is being drawn up and is due for completion in August 2002.

  Performance Targets
  Mr. Mullin
  To ask the Secretary of State for Health how many performance targets he has set for his Department; and how many that were included last year have been dropped this year. [642741

  Mr. Lammy
  The Department is committed to six standards for the delivery of public services to meet the needs of citizens. These standards are called Service First and include:

  1. Answering correspondence (includes letters, faxes and e-mails) within 20 working days;

  2. Seeing callers with an appointment within 10 minutes of that appointment time; and seeing callers without an appointment within 20 minutes;

  3. Answering telephone calls quickly and helpfully within 10 rings;

  4. Provide clear and straightforward information about its services and those of related providers;

  5. Have a complaints procedure; and

  6. Do everything reasonably possible to make its services available to everyone.

  We expect these standards to remain in place throughout this year.

  Back Pain
  Mr. Laurence Robertson
  To ask the Secretary of State for Health what the average wait is for a GP referral to a hospital specialist for a back pain appointment in (a) England and (b) Gloucestershire; what steps he is taking to reduce this waiting time; and if he will make a statement. [64445]

  Mr. Hutton
  The information requested is not collected. Waiting times are not collected by diagnostic group. General practitioners referrals to out-patient attendance are collected by medical consultant specialty. A patient with back pain may be seen by any one of a number of medical consultants in different specialties, though often to rheumatology or orthopaedics. Within these specialties, we have no further breakdown by diagnostic group.

  The NHS Plan sets out the progress we want to make on waiting times over the coming years. Each year these will fall, by the end of 2005 the maximum out-patient waiting time for a first out-patient appointment will be cut to three months. Urgent cases will continue to be treated much faster.

  As a step towards achieving the NHS Plan targets, from 1 April a new maximum waiting time of six months has been established for patients waiting for their first out-patient appointments with a medical consultant.

  Delayed Discharges
  Mr. Burstow
  To ask the Secretary of State for Health how many psychiatric patients have had their discharge delayed in each quarter in the last year for which figures are available. [64518]

  Jacqui Smith
  The Department does not hold this information centrally.

  Fertility Treatment
  Mr. Hancock
  To ask the Secretary of State for Health how many infertile couples were seen by specialists in Portsmouth, South in the last three years; how much was spent on fertility treatment in that time; and if he will make a statement. [64729]

  Ms Blears
  The information requested on the funding of fertility treatments and the numbers of couples seen by specialists in the Portsmouth, South constituency is not collected centrally.

  Medical Malpractice
  Mr. Hancock
  To ask the Secretary of State for Health how many people have been awarded lump sum damages payouts for medical malpractice in the last three years, broken down by constituency; how much money has been awarded in each of these years, broken down by constituency; and if he will make a statement. [64724]

  Mr. Lammy
  Information on the numbers of people awarded lump sum damages payments and how much money has been awarded for medical malpractice broken down by constituency is not collected centrally.

  Eye Tests (Children)
  Bob Russell
  To ask the Secretary of State for Health what arrangements exist to provide eye tests for children of school age; what plans he has to change them; and if he will make a statement. [64716]

  Mr. Lammy
  All children are entitled to free annual national health service sight tests provided by community based optometrists under the general ophthalmic services scheme. Children with spectacle prescriptions that are altering as they grow, are receiving treatment or who become symptomatic between examinations. may be seen at intervals of less than one year. In some areas health visitors and school nurses undertake sight checks when screening the health of young children. The eye care professions have been reviewing this practice and their report is expected to be available shortly.

  Henoch Schonlein Purpura
  Mr. Keith Bradley
  To ask the Secretary of State for Health how much money his Department will provide in 2002–03 for research into Henoch Schonlein Purpura; and to which research centres it is allocated. [648491

  Ms Blears
  [holding answer 27 June 2002]: A multi-centre, randomised, double blind, placebo controlled study to determine whether steroids reduce the development and severity of nephropathy in HenochSchonlein Purpura is being funded by the Wales office of research and development for health and social care of the Welsh Assembly Government. The lead researcher is based at the University Hospital of Wales, which is receiving £91,949 over three years including £19,460 in 2002–03. There are 19 other hospitals involved throughout Wales and the south-west of England.

  Nursing Care
  Mr. Drew
  To ask the Secretary of State for Health when a report is expected on the evaluation of the impact of covering nursing care costs. [650111

  Jacqui Smith
  [holding answer 27 June 2002]: We have already commissioned a full evaluation of the implementation of free nursing care. This will cover the first six to eight months of implementation and report in autumn 2002, so that lessons from the evaluation can be used in the implementation of national health service funded nursing care for all nursing home residents from April 2003.

  Minimum Data Sets
  Mr. Drew
  To ask the Secretary of State for Health what progress is being made on the application of minimum data sets. [65012]

  Mr. Lammy
  [holding answer 27 June 2002]: To date. national minimum data sets have been developed for use in the national health service as follows:

  Admitted patient care (in-patients and day cases) Elective admission (waiting) lists

  Out-patient attendances

  Accident and Emergency attendances.

  Collection of admitted patient care and outpatient minimum data sets for transmission via the NHS-wide clearing service is mandatory. Currently it is not mandatory for NHS trusts to exchange elective admission list or Accident and Emergency data sets via the clearing service.

  Building on work done by the clinical professions, considerable progress is being made in developing data sets to support sharing information along care pathways and the production of comparative clinical information to enable services to monitor quality and clinical performance. This includes developing clinical data sets in the national service framework areas as follows:

  Cancer

  Mental health

  Coronary heart disease

  Older people, including single assessment, stroke, falls and dementia, and

  Diabetes.

  309W
  The cancer data set has been piloted and once it has been revised in the light of the pilots, decisions will be taken on phased implementation in the NHS. Services are already beginning to collect the waiting times component of the data set.

  For mental health, a programme is in place to ensure that appropriate services are collecting the mental health minimum data set by 31 March 2003. Further work to develop a comprehensive mental health data set is planned.

  And for coronary heart disease, work is in hand to standardise four existing data sets on paediatric cardiac care, acute myocardial infarction, adult surgery and angioplasty to ensure they are consistent and to develop a more comprehensive data set. The paediatric cardiac care and acute myocardial infarction data sets are being collected and used to monitor services. Collection of the adult surgery data started in April 2002 with the aim of having robust national comparative data on the clinical quality of care by 2004.

  The older people and diabetes data sets are at an earlier stage of development.

  The NHS Information Authority is responsible for the development of national data sets which can then be applied across the NHS in England through their national data set development programme. The data sets are based on national standards which are approved by the independent NHS information standards board.

  Laser Eye Treatment
  John Mann
  To ask the Secretary of State for Health if he will make a statement on entitlement to laser eye treatment. [65775]

  Mr. Lammy
  Laser treatments to overcome problems caused by ophthalmic disease are available within all large ophthalmology units. Treatments such as capsulotomies following cataract extraction, photocoagulation and focal laser for diabetic retinopathy, and laser for macular disease are available within national health service hospitals. The NHS does not provide laser surgery to correct refractive errors, which can be successfully corrected by spectacles or contact lenses.

  Free Eye Tests
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many free eye tests have been given to pensioners in each quarter since the scheme was launched; and if he will make a statement. [65584]

  Mr. Lammy
  Eligibility to national health service sight tests was extended to those aged 60 and over from 1 April 1999. The table shows the number of NHS sight tests paid for by health authorities in England from 1999–2000 for those aged 60 and over.

  million

  Number of sight tests for over-60s1

  April 1999 to September 1999

  1.51

  October 1999 to March 2000

  1.79

  April 2000 to September 2000

  1.87

  October 2000 to March 2001

  1.88

  April 2001 to September 2001

  2.01

  1Figures for England

  310W

  Nurses
  Geraldine Smith
  To ask the Secretary of State for Health what measures the Government have taken to improve nurses' pay and conditions of service since 1997. [65821]

  Mr. Hutton
  We have accepted in full and implemented the recommendations of the independent pay review body for nursing staff for the last four years without staging pay awards. From April 2002 all nursing staff will have received an above inflation increase of at least 3.6 per cent.

  Pay has increased across the board for all nurses employed in the national health service by at least 26 per cent. in cash terms since 1997.

  The introduction of nurse consultant posts has extended career opportunities for senior nurses who wish to remain in clinical roles and provided the opportunity to earn salaries of over £46,000.

  We are working with unions, professional organisations and employers to introduce a new pay system that will offer nurses and other staff working in the NHS a more attractive career structure, fairer pay and consistent conditions of service.

  The development of a child care strategy is a key element in improving working lives for staff in the NHS and plays a key role in the recruitment and retention of staff. Our child care strategy centres on providing good quality, accessible and affordable child care. The main focus of the strategy currently is the development of around 150 on-site nurseries with subsidised places. Funding available from April 2001 amounts to over £70 million. Around a further 7,500 places will be created by 2004.

  Care Homes
  Mr. Burstow
  To ask the Secretary of State for Health, pursuant to his answer of 24 June 2002,Official Report, column 733W, on care homes, when he is planning to issue guidance on qualified nursing input. [66145]

  Jacqui Smith
  The Department has commissioned the residential forum to produce further guidance on nurse staffing. Work on this is under way and due to be completed over the summer.

  Rubella Vaccines
  Miss Kirkbride
  To ask the Secretary of State for Health what instructions the Department has given to Farillon on the amount of single rubella vaccines to be issued to private clinics in the UK. [66257]

  Ms Blears
  The Department has a contract with GlaxoSmithKline to supply a fixed quantity of single vaccines for national health service use per year. These vaccines are owned by the Department. We use a private company (Farillon Ltd.) to store and distribute these vaccines to ensure that NHS needs are met. Any excess or remainder stock is made available for sale to private customers.

  We have instructed Farillon to manage orders so that the excess of vaccine stock is available equitably to all private clinics.

  National School Fruit Scheme
  Joan Ruddock
  To ask the Secretary of State for Health what proportion of apples and pears supplied to the pilots for the national school fruit scheme in (a) autumn 2000 and (b) autumn 2001 were of UK origin; and if he will list the other countries of origin of the apples and pears. [57167]

  Jacqui Smith
  [pursuant to her reply, 11 June 2002, c. 1215W]I regret that my previous reply was incorrect. It should read:
  312W
  In Autumn 2000 all apples and pears supplied to the original national school fruit scheme pilots were from the United Kingdom.

  We do not have comprehensive data on the origin of fruit in the much larger number of pilot sites in autumn 2001. We did not begin to collect such data until the regional expansion of the national school fruit scheme that started in April 2002, since when nationally contracted suppliers have routinely been providing detailed information on the origin of fruit.

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

Language Teaching
Lord Quirk: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing I should declare a modest interest as past president of two of the "other bodies" alluded to; that is, the British Academy and the Institute of Linguists.
The Question was as follows:
To ask Her Majesty's Government whether they are reconsidering their language teaching proposals (Government consultation document 14–19: extending opportunities, raising standards) in the light of the representations made by the Nuffield Steering Group and other bodies.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, the consultation on the Green Paper, 14–19: extending opportunities, raising standards, only closed on 31st May 2002. We are reflecting carefully on all the views expressed during the consultation before reaching any decisions. We have indicated in the Green Paper that curriculum changes would be subject to further consultation before their introduction.
Lord Quirk: My Lords, I thank the Minister for that encouraging reply. I wonder if it is not time for us to reconsider our position with respect to foreign languages and to think of them less as academic subjects than as practical skills. Is there not an attractive analogy in learning a musical instrument? The Associated Board tests performance at various grades, each of which is admirable in its own right; the pupil may at his own pace take up more than one instrument; and the QCA provides guidelines whereby the music grades are related to GCSE and A-level scores.
Baroness Ashton of Upholland: My Lords, I could not agree more with the noble Lord, Lord Quirk. Indeed, noble Lords will have heard me discuss in debate the issues of the national languages strategy, which I was responsible ministerially for pulling together. We have been looking at the possibility of a system similar to a music grade, equating across, as the noble Lord says, but enabling people of all ages— including Members of your Lordships' House—to learn a foreign language and to have a similar accreditation system based on the practical application of language.
Baroness Blatch: My Lords, has the noble Baroness discovered who was responsible for relaxing the national curriculum for teaching languages in secondary schools as referred to by the noble Baroness, Lady O'Neill, at the last stage of our debate on the Education Bill?
Baroness Ashton of Upholland: My Lords, indeed, and I have written to the noble Baroness in that regard. I assume that the letter has not yet arrived. I hope it will arrive this afternoon. It explains that the references to disapplication were about ensuring that disapplication was simpler in the sense of the bureaucratic machine, but not about relaxing the ability of schools to teach languages before this consultation is finished and before we have made any decisions. So the disapplication procedure has always been under review. It is not the intention of this Government to allow any schools to change what they do until we have made any decisions.
Lord Strabolgi: My Lords, I declare an interest as president of the Franco-British Society. Can my noble friend say whether, in view of the shortage of language teachers, the Government can persuade retired qualified teachers, some of whom may have retired early, to take up teaching again perhaps on a part-time basis?
Baroness Ashton of Upholland: My Lords, we are looking at all opportunities to encourage teachers back into the profession and, particularly in the case of language teachers we are discussing with our counterparts, the French and German ambassadors, ways in which we can work more closely. We want especially to revive the Assistant programme, which noble Lords may remember—I certainly do—as a way of enhancing our ability to teach languages in schools.
Lord Watson of Richmond: My Lords, I recognise that on this matter, as in many others, the Minister's heart is in the right place. Perhaps we can strengthen another part of her anatomy, namely, her elbow. Would it strengthen her elbow if Her Majesty's Government recognised that one of the results of removing modern languages from the core curriculum at 14 must be to widen inequality and privilege in the educational system? All the facts show clearly that while modern language learning has been falling in the state system, it has been rising in public schools and private education. Surely that cannot be the intention of the Government.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord, Lord Watson, for his concerns about my anatomy. I hope that my elbows are fairly strong in this regard. The consultation has just finished and we are considering its content carefully. However, I have always worried about a system that relies heavily on the compulsion of a group

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of teenagers to learn a language as being the mechanism by which we provide languages to the population. So, while taking nothing away from what the noble Lord said, I am interested in ensuring that we have a national languages strategy which is as applicable to a five year-old as it is to a 55 year-old in terms of providing the opportunity to learn one of many languages that students might wish to learn.
Baroness Howe of Idlicote: My Lords, given that the Government's language learning strategy visualises that only by 2012—10 years from now—will every primary age school child have the opportunity of learning a foreign language, is it not essential, following upon the point already made, that, while developing their long-term strategy, the Government have an emergency plan to recruit and retain the necessary foreign language teachers? Can the Minister assure the House that the Government are taking action along those lines?
Baroness Ashton of Upholland: My Lords, in reply to the noble Baroness, Lady Howe, first there is always a difficulty when putting an end date on a policy or strategy. Of course, it is the only date of reference and, therefore, it is endlessly referred to. But I would say that it is an end date and not a beginning date. That is important.
We have a language strategy group in which the Nuffield Foundation and others are deeply involved. I am extraordinarily grateful for its contribution. Our plan is to produce the strategy document by the late autumn—by the end of October or the beginning of November. It will lay out the details of how we wish to take forward languages in education right across from higher education down to primary schools. I hope that within that the noble Baroness, Lady Howe, will see a strategy that looks at recruiting, retaining and developing the ability that we have to teach languages across a wide spectrum.
Lord Pilkington of Oxenford: My Lords, I want to ask the Minister a very simple question after all the complications. Why is it that throughout the European Union they manage to teach languages from the age of eight or nine and in the United Kingdom we cannot? Can the Minister tell us why we cannot do it?
Baroness Ashton of Upholland: My Lords, the reason that we cannot do it is because we have never had a national language strategy. That is why it is so important that we begin to develop one now. That fits very well with the work we are doing with our European Union partners in thinking about the issues which are also pertinent in other parts of the European Union, such as teacher retention.

Act of Settlement 1701
2.45 p.m.
Lord Faulkner of Worcesterasked Her Majesty's Government:
Whether they plan to repeal the Act of Settlement 1701.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, we have no plans to legislate in this area.
Lord Faulkner of Worcester: My Lords, I thank my noble and learned friend the Lord Chancellor for that reply. Is he aware that in an interview with the Glasgow-based Herald newspaper shortly before the election in June last year the Prime Minister described the Act as "plainly discriminatory" and said:
"Obviously, in principle, it can't be right that Catholics are unable to succeed"?
Those views are widely shared by leaders of both the Anglican and the Roman Catholic Churches and by a number of members of the Cabinet. While I understand the pressures on parliamentary time, would it not be sensible, once the new Archbishop of Canterbury has been appointed, for the consultations with the leaders of the Commonwealth countries, which will be necessary before progress is made in this area, to be undertaken so that possibly we can have legislation in the next Parliament?
The Lord Chancellor: My Lords, I am aware of the Prime Minister's comments. The Act could be said to be discriminatory in nature, but it is not discriminatory in impact. Where legislation could have far-reaching effects on our historical constitutional arrangements, both in the United Kingdom and in the Commonwealth, it is a good principle—I would recommend to your Lordships—to consider legislative change only where it can be maintained that there is a clear and pressing need for change.
There are 20 members of the Royal Family in the line of succession after the Prince of Wales, all of whom are eligible to succeed and have been unaffected by the Act of Settlement. The Act of Settlement therefore has no present discriminatory impact. As for consultations with our Commonwealth partners, since we have no plans to legislate, such consultation would be premature.
Baroness Buscombe: My Lords, during a debate regarding Church and State in your Lordships' Chamber on 22nd May 2002, the noble and learned Lord the Lord Chancellor said that it would be an enormously complex undertaking with regard to the Church and State if he were to attempt to repeal various Acts, including the Act of Settlement 1701, without,
"damaging the tapestry of the constitution".—[Official Report, 22/5/02; col. 812.]

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Would the noble and learned Lord agree that he has already made certain parts of the constitution threadbare by his and the Government's incoherent meddling with the constitution?
The Lord Chancellor: My Lords, I certainly would not agree with that. The constitutional reform programme of the last Parliament extended to human rights, it extended to devolution for Scotland, Wales and Northern Ireland, it extended to freedom of information and it extended to reform of your Lordships' House. In all those areas there was a clear and pressing need for change. In this area there is not.
The Lord Bishop of St Albans: My Lords, is the noble and learned Lord aware that relationships between Christian denominations in this country, including those between Anglicans and Roman Catholics, are generally extremely good? Is he aware, however, that there are some significant differences between our Churches which impinge, for example, on how Anglican orders are viewed; how children in marriages between Roman Catholics and other Christians are to be brought up; and that perceptions of discrimination exist on different sides within the Church and not just one? Does he accept that the interests of those who pursue this matter may not be religious at all, but might be based upon an understanding of discrimination which in this case could be described as over simple?
The Lord Chancellor: My Lords, I am not sure that that is an over-simple question, if I may say so. What I would say is that I am aware of these matters but I do not think that there is at present any general public interest in the repeal of the Act of Settlement. To the extent that there is ongoing debate, the Government will monitor it.
Lord Alton of Liverpool: My Lords, does the noble and learned Lord accept that, short of total repeal, those parts of the Act of Settlement that are discriminatory—whether in a practical sense or by perception—could be dealt with in a rather more piecemeal way? Does he further accept that the issue does not trouble people from a Catholic tradition, or indeed from most religious traditions? Most people in this country who have religious belief are full of joy that we have so little discrimination and that there is such a pluralistic and tolerant society in which people can enjoy their religious practice according to their conscience.
The Lord Chancellor: My Lords, I agree, of course, with the second part of that question. As to the Act of Settlement, in whole or in part, I repeat that I believe that there is no clear and pressing need for repeal or reform.
Earl Russell: My Lords, the noble and learned Lord is correct to say that, at present, none of the top 20 in succession to the throne happens to be a Roman Catholic. Is there any way in which he can know that none of them will be converted in the near future?
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Did he by any chance read an article in The Times by Mary Ann Sieghart about three months ago? It stated that during the past 20 years there has been a quite remarkable change in the direction of civil and religious equality for Roman Catholics in this country. Does he agree that that change cannot be complete until the offending passage in the Act of Settlement is removed? Will he therefore initiate international consultations accordingly?
The Lord Chancellor: My Lords, first, of course I recognise that people can be converted. I am not sure that the noble Earl is ripe for conversion in any particular direction. As for the article by Mary Ann Sieghart, yes, I read it. But I repeat that, whereas it can be said that the Act of Settlement is discriminatory in nature, it has no discriminatory impact today. If it were ever likely to have, the matter would have to be addressed.
The Earl of Mar and Kellie: My Lords, the noble and learned Lord will be aware that Prince James Francis Edward Stuart should have become King in 1701 on the death of his father. Does he agree that the Act of Settlement was this Parliament's response to the Act of Security passed by the Parliament of Scotland, reserving to Scotland the right to choose their own King? Does he further agree that James Francis Edward poses no threat today and, accordingly, that the Act of Settlement—that piece of 18th century Whig paranoia, which led to parliamentary Union—can be safely laid to rest?
The Lord Chancellor: My Lords, all that I should like to say about that is that noble Lords will appreciate, as does the noble Earl, that the Act of Settlement was legislation passed by a previous administration.

Nursing and Personal Care
2.53 p.m.
Baroness Barkerasked Her Majesty's Government:
What difficulties have arisen owing to the distinction between nursing care and personal care for the purpose of funding arrangements.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, National Health Service nurses have applied the registered nursing care contribution tool to assess the needs of nursing home residents. A full evaluation of the implementation of the policy has been commissioned and is due to report this autumn.
Baroness Barker: My Lords, in this week when, as a result of devolution, which has just been mentioned, personal care in Scotland became free for older people, will the Minister comment on the report issued this March by nursing home co-ordinators and health authorities that found that six out of 10 nursing homes were passing on costs in increased fees to older people?

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At a time when older people in Scotland are receiving free personal care, what is his department doing to stop older people in England paying for what is supposed to be free nursing care by the back door?
Lord Hunt of Kings Heath: My Lords, it is the glory of devolution that Scotland can choose which way it wishes to go and that we in England can choose a different course. We chose a different course because we believed that if we instituted free personal care, we should not produce a single extra service as a result but would benefit many better-off people. We considered that the £1 billion cost of free personal care in England would be better spent on providing services such as intermediate care for all older people to enjoy and to help them rehabilitate, rather than having to enter institutionalised care.
Of course, I have read comments concerning where the money being provided for free nursing care has gone. I understand that the majority of individuals are already benefiting financially from the introduction of NHS-funded nursing care, but, in March, my honourable friend Jacqui Smith announced a package of measures designed to ensure much greater transparency, so that self-funded residents in such homes know exactly what money is being spent where.
Lord Ashley of Stoke: My Lords, does my noble friend agree that sickness and disability lead to a wide variety of needs—for surgery, for medical drugs, for physiotherapy and for wheelchairs—that are properly met by the National Health Service free of charge? By charging for the other important need arising from sickness and disability—personal care—the Government are being both illogical and unfair. The sooner that that policy is reversed, the better for disabled people.
Lord Hunt of Kings Heath: My Lords, my noble friend speaks forcefully on the matter, as he has done for many years. But the treatment of personal care and NHS services has been consistently applied for many years. When we are faced with the prospect of £1 billion extra having to be spent on free personal care in England, if we adopt the Scottish model, searching questions must be asked about whether that money would be wisely spent. As I said, the Government decided that it would be much better spent on intermediate care, which is designed to rehabilitate older people, in particular, and return them wherever possible to their own home. Surely, that is where the incentive should lie, not in institutionalised care
Lord Swinfen: My Lords, does the noble Lord agree that if personal care is neglected, that will frequently lead to expensive nursing and medical care and, in the long run, cost the country a great deal more?
Lord Hunt of Kings Heath: Yes, my Lords. That is why we announced that under the next spending
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review, personal social services will, over a three-year period, receive an increase of about 6 per cent in real terms. That recognises the noble Lord's point.
Lord Lipsey: My Lords, does my noble friend agree that any transitional problems that we may be experiencing in moving from nursing homes pale into insignificance when compared to the dog's breakfast of a policy of free personal care favoured, alas, by the Scots and by the noble Baroness, Lady Barker? Beside being unaffordable and doing nothing to improve care standards, it represents a massive transfer of money from poorer to richer people.
Lord Hunt of Kings Heath: My Lords, my noble friend speaks with authority as a member of the royal commission. What he says is surely to the point. Some propose that we spend £1 billion extra on free personal care. Many of those people are better off. Is that really where the priority should lie? The Government say no, it should lie in rehabilitation, trying to ensure that as many people as possible are kept from entering homes in the first place.
Earl Russell: My Lords, did the Minister read in today's paper a report of an old lady of 108 who committed suicide by hunger strike because she was turned out of the care home in which she had lived because she could no longer afford it? Will he consider that there may be more concerns in heaven and earth than are dreamt of in his philosophy?
Lord Hunt of Kings Heath: My Lords, it is always dangerous to rely too much on newspaper reports. I am sure that we shall want to study the results of any review led by the local authority. My understanding of the case is that the council worked closely with the family to find new accommodation for that person. Of course, one's sympathy goes out to Mrs Knight's relatives. However, I understand that the owner was retiring.
The allegation is that the regulations set by the National Care Standards Commission were at too high a level. I must make the point that the National Care Standards Commission has allowed for flexibility and has allowed more time for new standards to come into operation. It was the care homes themselves who wished to see a national system of regulation.
Baroness Masham of Ilton: My Lords, if somebody living in a care home needs physiotherapy, occupational therapy or speech therapy, would that come under personal care or nursing care?
Lord Hunt of Kings Heath: My Lords, it depends on the individual. Many people in nursing homes receive continuing care, which is provided entirely by the National Health Service. The Government's commitment is to free nursing care. The assessment is concerned with care that is either provided or supervised by a registered nurse.

Identity Cards
3.1 p.m.
Lord Marlesfordasked Her Majesty's Government:
Whether they recognise the need for the introduction of an identity card incorporating biometric details to assist in the prevention of acts of terrorism and the fight against other crime.
The Minister of State, Home Office (Lord Falconer of Thoroton): My Lords, in the period after 11th September, my right honourable friend the Home Secretary made it clear that any debate around entitlement cards should not rest solely on issues of national security. The Government do not consider that an identity card incorporating biometric details would have a significant effect in preventing acts of terrorism.
One of the potential uses of a card scheme on which we will be consulting in the near future would be to help reduce the level of identity fraud. That is a growing area of crime and is estimated to cost the economy at least £1·3 billion per annum. It will be for the British people to indicate their support or otherwise for a more comprehensive system of personal identification, including for the task of eliminating illegal working and facilitating more convenient and effective access to services.
Lord Marlesford: My Lords, I thank the noble and learned Lord for that Answer. Does he recognise that the people of this country expect the Government to fight with vigour and effectiveness at least four battles: against terrorism, against crime, against social security fraud and against the abuse of our immigration rules? Does he also recognise that, so long as it is not possible to identify individuals who might be involved in such activities, the Government are fighting those battles with one hand tied behind their back?
Does the Minister remember that the Metropolitan Police Commissioner, who knows a thing or two about such matters, has advocated identity cards with full, state-of-the-art biometric details? The Minister talked about the British people, but is he aware that, in a MORI poll conducted in September, 85 per cent of the British people said that they would like a national identity card, and 72 per cent said that such a card would not infringe personal freedom? Will the Minister please take more comprehensive action?
Lord Falconer of Thoroton: My Lords, the noble Lord referred to four fights. We must, of course, engage in those fights. Would identity cards help? There must be full, detailed consultation about every aspect. As my right honourable friend said in another place, we will shortly produce a consultation document that will permit that debate to take place.
The noble Lord also referred to the views of the Metropolitan Police Commissioner on identity cards. Those views will play a part in the debate. All the issues raised require a full debate. The noble Lord is,
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obviously, a strong supporter of identity cards; others are not. We must have a properly informed debate, before a conclusion can be reached.
Baroness Gardner of Parkes: My Lords, how does the Minister define the phrase "biometric details"? I asked the Library what biometry is and I was told that it is a calculation of the average duration and expectation of life. Can the Minister assure me that no identity card that covers the expectation of life will be used for insurance or other purposes?
Lord Falconer of Thoroton: My Lords, I did not understand the phrase to refer to expectation of life until the noble Baroness pointed that out. I understood it to refer to a means of measuring a part of one's body or anatomy that is unique to oneself and could provide a unique identifier. I do not think that life expectancy falls within that description.
Lord Hylton: My Lords, does the noble and learned Lord accept that far and away the best method of achieving the prevention mentioned in the Question is having good intelligence? Money should be spent on that, rather than on harassing law-abiding citizens with further regulations.
Lord Falconer of Thoroton: My Lords, I am not sure whether the noble Lord was referring to intelligence on unique identifiers. Intelligence is vitally important to the fight against crime, illegal immigration and benefit fraud. The question is whether other things should be available to help in that fight. That is what we must debate.
Baroness Sharpies: My Lords, is the Minister aware that each government department has a different card? Last week, I met a lady who had six different cards—all with different photographs. She had to go through a security system before she got the cards. Would not the most sensible approach be to have one card?
Lord Falconer of Thoroton: My Lords, I see the force of that argument, although that does not mean that I am expressing a view on identity cards or entitlement cards. Access to services that the Government provide through one source of identification would be of great convenience to receivers of those services. That is an important argument, and it should be considered in the debate.
The Earl of Erroll: My Lords, does the Minister think that the problem is in detecting and arresting criminals committing violent crimes or burglaries or in identifying them after they have been caught?
Lord Falconer of Thoroton: My Lords, I do not know whether that is a question about the criminal justice system or about identity cards. The role of identity cards or entitlement cards with regard to crime—organised crime, terrorist crime or any other sort of crime—must be fully examined. We must

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consider the issue from the point of view of prevention and of detection. Both factors must be considered in the debate.

National Insurance Contributions Bill
3.7 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
The National Insurance Contributions Bill will put in place the main source of funding for the Government's planned increase in investment in the National Health Service. In his Budget of 17th April, the Chancellor of the Exchequer announced the results of the Wanless review of funding for health services and set out plans for the biggest ever increase in National Health Service investment. He repeated the Government's commitment to a world-class health service for the British people that was free at the point of use and funded by general taxation.
Derek Wanless's report came at the end of a period of debate on alternative methods of funding health services. It examined in detail the alternatives of private insurance and continental-style social insurance schemes. It confirmed the Government's belief that general taxation, including national insurance contributions, remains the fairest and most efficient method of providing the resources necessary for the health service. Private health insurance would fail to help those most in need, would provide coverage that was often inadequate and would be more bureaucratic and expensive. Social insurance schemes such as those used in France, Germany and the Netherlands tend to be regionally based, do not provide full cover for everyone and often place a disproportionate burden on employers. We have rejected those alternatives.
The National Health Service has been partly funded from national insurance contributions since it was established in the 1940s. That is consistent with the principle underlying the Beveridge reforms, which was that people should contribute, when they are working, to the cost of benefits and services that they may need when they cannot work. National Insurance contributions are paid by those who work and by their employers. It is right that employers should contribute, since absence due to sickness is a major cost, amounting to around £12 billion a year according to a CBI survey in 2001. Everyone who has a stake in the National Health Service will contribute while they are in work, when they can best afford to. But there will be no additional burden on pensioners, who do not pay national insurance.
The Bill increases the contributions paid by employees, employers and the self-employed by 1 per cent. It also ensures that the additional contribution is paid on all earnings above the national insurance threshold, including earnings above the upper earnings limit and upper profits limit.
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Clause 1 increases the primary Class 1 contribution paid by employees from 10 per cent to 11 per cent on earnings between the primary threshold and the upper earnings limit, as from April 2003. It also introduces a contribution of 1 per cent on earnings above the upper earnings limit. Only the rate payable on earnings below the upper earnings limit can be amended in future by secondary legislation. Because there is separate national insurance legislation for Northern Ireland, the Bill also makes equivalent changes to the Northern Ireland legislation throughout.
Clause 2 applies a similar 1 per cent increase to secondary Class 1 contributions paid by employers so that the rate will be 12·8 per cent next year, compared with 11·8 per cent this year. Because there is no upper earnings limit for employers' contributions, the 12·8 per cent rate will apply to all earnings above the secondary threshold. The rates paid by employers on benefits in kind and PAYE settlement agreements—Class 1A and Class 1B—will also be 12·8 per cent.
Clause 3 increases the Class 4 contribution paid by the self-employed on their profits and gains, from 7 per cent this year to 8 per cent next year. As for employees, they will also pay a contribution of 1 per cent on profits and gains above the upper profits limit.
Clauses 4 and 5 ensure that the additional revenue raised from the increases will be channelled to the National Health Service rather than to the National Insurance Fund, which finances contributory benefits. The proceeds of the increased contributions are added to the existing allocation to the NHS. So, for example, this year an amount equivalent to 1·05 per cent out of the 10 per cent contribution by an employee will be allocated to the NHS. Next year, that increases to 2·05 per cent, plus the whole of any contribution payable on earnings above the upper earnings limit. Equivalent changes are made to the NHS allocation from employers' and self-employed contributions.
The schedules to the Bill contain consequential amendments and repeals. These include amendments to ensure that the changes to contributions do not affect anyone's entitlement to contributory national insurance benefits or any arrangements for contracting out of the state second pension. Contributory benefits will continue to be backed by the National Insurance Fund, which is not affected by this Bill.
The changes in the Bill, together with the freezing of the income tax and national insurance thresholds in 2003–04 announced by the Chancellor of the Exchequer in the Budget, will raise £8·6 billion next year. This makes possible an increase in spending on the NHS from £65 billion this year to £106 billion in 2007–08—an average growth of 7·4 per cent a year, in real terms, for the next five years. It will increase as a share of national income from 6·7 per cent in 1997, and 7·7 per cent this year, to 9·4 per cent in 2007–08.
That will mean 35,000 more nurses, midwives and health visitors, 15,000 more doctors and consultants, and 42 major hospital schemes to be opened by 2008. New targets have been agreed to reduce the maximum wait for an outpatient appointment to three months,

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and the maximum wait for inpatient treatment to six months by the end of 2005. By 2004, the maximum wait for emergency treatment from arrival in accident and emergency to admission, transfer or discharge will be four hours.
The new resources for investment are being matched by reform, to provide: more devolution of power to front-line organisations and new financial incentives to improve performance; increased choice for patients; improved standards of social services care for the elderly; and new independent regulators, with powers enshrined in legislation to audit and inspect local health services and scrutinise patients' complaints.
The Bill is short and simple. It delivers additional funding for the National Health Service which will allow it to deliver the standard of healthcare this country demands. It does so in a way which spreads the burden as widely and fairly as possible, using the mechanism of national insurance just as the first National Insurance Act did in 1946. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)
3.15 p.m.
The Lord Bishop of Derby: My Lords, I fully appreciate the reasoning behind the 1 per cent increase in the employer's national insurance contribution: it is designed to provide revenue for a most worthy cause; namely, the National Health Service. But I cannot help feeling that the Government may have seen it as an easy way of raising revenue. It is easily collected and businesses can set it off against corporation tax. Have Ministers really considered its implications for the voluntary sector—for charities in general and for the Churches in particular?
Here, I speak as chairman of the Churches Main Cornmittee, representing the Jewish community and some 40 Christian denominations in their dealings with the Government. Churches and the voluntary sector are being left to bear the increase without any relief. In the case of the Church of England alone, we estimate that it will cost around £2 million a year.
In the past, governments have recognised the unfairness of imposing taxes on charities' payrolls. So charities were exempted from the selective employment tax in 1968 and the national insurance surcharge in 1977—on the same grounds as make them exempt from other forms of direct taxation. In its effect, the national insurance contribution increase is just like that surcharge. Given these precedents, why impose the increase on Churches and others in the voluntary sector? I have written to the Chancellor about this but have not yet received an answer. I await with interest what the noble Lord has to say.
3.17 p.m.
Lord Newby: My Lords, we on these Benches support the Bill for two principal reasons. First, we agree that the NHS needs a substantial and sustained increase in funding from general taxation. Secondly,
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we support the principle of hypothecating tax increases to specific areas of expenditure. I shall return to both those points.
However, we have several reservations about the situation in which we now find ourselves in terms of taxation and spending and the way in which the money is being raised. The Chancellor is truly the son of the manse. He was clearly influenced in his youth by biblical descriptions of years of famine followed by years of feast. On newly entering his post, he perpetuated and intensified the famine in public expenditure which the previous government had imposed, and we saw continuing under-funding of the NHS during the majority of the previous Parliament.
The Chancellor then had something of a change of mind—a contagion which spread to the Prime Minister, who in a panic attack on a TV programme, said that we were going to bring health expenditure up to European levels. We then had a reverse panic about how on earth this was to be funded—and in the run-up to the election, and indeed in the Labour Party manifesto, it was made clear that income tax would not rise during the course of this Parliament. The implication was that taxes were unlikely to have to rise during the course of this Parliament. But, of course, this was always a mistaken perception. It is an indictment of the Chancellor and of the Government more generally that they allowed the perception to remain, during and immediately beyond the election, that it was possible to have something for nothing in the shape of substantially increased public expenditure but without substantially increased levels of taxation to go along with it. In our view it would have been much more honest to say during the election that, in order to reach the targets set by the Government for health expenditure, general taxation would have to rise. There was nothing to be ashamed of in doing that, and they should have done it.
Having had the election and, unsurprisingly, deciding that tax rises are necessary, the Chancellor is now being forced by his manifesto commitment not to increase income tax and is looking elsewhere to fund the additional health expenditure. He has chosen national insurance contributions.
National insurance contributions in their current form are a somewhat curious relic of the Beveridge report. The contribution rules are complex and opaque. Funds reach the National Insurance Fund for pensions, incapacity and other benefits—the benefits that people assume the fund is for—only after more than 10 per cent of all national insurance contributions have been siphoned off for the NHS. The Bill will move NICs further from their original purpose and will mean that a much smaller proportion of national insurance contributions find their way into the National Insurance Fund.
We also believe that it is unsatisfactory to choose NICs rather than income tax. The NIC system is much more aggressive than income tax. It does not cover unearned income or that of pensions. A pensioner with an income of £50,000 will pay no more as a result of the Bill, whereas a part-time worker earning £5,000 will do so.

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At this stage in the economic cycle, it is also disappointing that the Chancellor has chosen to place an additional burden on employers. The NIC increases will be particularly unwelcome in the manufacturing sector which has lost an incredible 500,000 employees in the past four years, and which, as we saw from Massey Ferguson's decision last week, continues to suffer because of the Government's inability to take the lead on British membership of the euro. As the right reverend Prelate the Bishop of Derby made clear, other employers, including local authorities and NGOs, will be hit by this tax increase. NIC increases may be a stealth tax to individuals, but they will certainly have severe economic consequences for many employers.
I said that we supported the Bill for two reasons. The first is the need for additional resources for health. We unreservedly support that purpose, but it is equally important that those additional resources are spent as effectively as possible. At present, the NHS is a monolithic organisation. To be more effective, there needs to be more scope for local discretion. As no hospital or primary care group operates in isolation from other parts of the health service in the region where it is based, much more strategic discretion should be exercised at regional level. The White Paper on regional government is a major missed opportunity in that respect.
The detailed health targets set in Whitehall are inappropriate for many communities. If the NHS is to be more responsive and efficient, the vice-like grip of Whitehall needs to be relaxed.
I said that we also supported the Bill because we support the principle of hypothecation of tax increases. We do so because it is more transparent and one can see where the money is going. Secondly—this is an argument that I suspect would not have been used 20 years ago—people do not trust politicians to spend money in the way that they want. Those of us who believe that additional expenditure is necessary for the health service are more likely to win the popular argument by seeking hypothecation so that people will know of the specific benefit that they will get from a tax increase. Indeed, we believe that there is now a strong argument for hypothecating a whole income stream from taxation for the NHS to give long-term certainty and transparency. I suspect that we shall return to that issue another day.
If we are to have greater hypothecation, we need to counter some of the criticisms of the concept. It is argued, for example, that people object to paying a particular tax if they do not like where it is going. People object to paying taxes for all kinds of reasons, whether or not they know where they are going. It is argued that it would be impractical to hypothecate everything; we could not have a tax for police, for defence or for every slice of Government expenditure. That is probably true, but no one is arguing that every on-going government commitment should have an earmarked tax either now or in the future.
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It is also argued that hypothecation is just a form of tokenism. It makes no difference whether one says that a certain pot of money is for a certain purpose; in reality, people would not understand how money was being spent, even if it were hypothecated. Some people may not, but hypothecation would make it much easier to explain. Within the National Insurance Fund, one can see the strengths of hypothecation. The NIF in many people's minds is still the fund into which they pay for specific purposes and out of which they draw benefits at a time of need. The on-going popularity of the national insurance principle is a strong argument for the hypothecation principle.
Possibly the most substantive argument is that hypothecation makes expenditure vulnerable to the vagaries of the business cycle. That is true to a certain extent, but no more so than for government expenditure as a whole. All taxes are linked to economic activity. Many are much more volatile than NICs and income tax. The Government smooth their expenditure by planning for the long term. In good years they build up a surplus and in bad years there is a deficit. The same could apply to hypothecated tax.
It is interesting and instructive to note that the National Insurance Fund has built up a surplus of almost £30 billion in this financial year. We should compare that with a surplus of less than £10 billion only a decade ago in order to deal with expected future drawings on the fund. The argument that one cannot make a hypothecated fund recession proof is no stronger than arguing that we cannot make government expenditure as a whole recession proof.
We support the intention behind the Bill, which is to strengthen the NHS. We support the principle of hypothecation and it is now up to the Government to show that they can spend their additional resources as effectively as they raise them.
3.28 p.m.
Lord Saatchi: My Lords, as this is the first Money Bill to come before your Lordships' House since the noble and learned Lord the Leader of the House introduced his report of the working practices group, I shall take this opportunity to thank the Leader of the House, my noble friend Lord Strathclyde, and the other members of the group for their bold new approach to Finance Bills.
Noble Lords from all sides of the House have said that there is an expertise in this House on financial matters that can help to hold the Government to account on finance and to produce better legislation as a result. The Leader of the House deserves our praise for taking this historic step in that direction.
Like the right reverend Prelate the Bishop of Derby, I am not completely sure whether the Bill has come to the House in error. It appears to have been sent to the wrong place. Would it not have been more appropriately received perhaps by a seminar of public relations consultants—perhaps in one of its sessions, entitled, "How to bury bad news"?
I shall take your Lordships back to the Chancellor's Budget speech, or even the Minister's speech a moment ago. They both described the proposed

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national insurance increases in the Bill as being intended to fund "the biggest ever increase in health spending"—I think that is what the Minister said. The Chancellor said much the same. As I hope to show, the Bill has little to do with insurance and nothing whatever to do with health.
We were all touched by the thought of higher health spending and considered it a fine and worthy use of our money. As the Minister said, the Bill aims to provide world-class care in the National Health Service, and who can possibly deny the need for that? Let us put aside all carping about the loss of income to various groups; let us not worry about the nurses, or the policemen, or anyone on average earnings who will be worse off; and let us not distress ourselves about the irony that the increase in employer's national insurance contributions, provided for in the Bill, will hit the public services hardest of all-an extra £1·2 billion cost to our public services. Let us put aside all doubts about whether more tax will give people the standard of healthcare that they deserve; let us forget that in the past five years in Scotland health spending has risen by 28 per cent in real terms, while waiting times have risen by the same amount; and let us not dwell too long on the way in which voters were misled about the Government's intention in relation to the Bill, as mentioned by the noble Lord, Lord Newby. We shall also repress the memory of the Prime Minister saying during the election campaign:
"We have not the slightest intention of hammering people in the higher income brackets",
or the Chancellor describing suggestions that he would raise the national insurance ceiling as a smear—he said:
"I utterly repudiate"—
or the Secretary of State for Trade and Industry insisting,
"We've got no plans to raise the ceiling on national insurance contributions",
and adding for effect:
"It is not going to happen".
We could forgive all that if the money were put to a good cause. But that is not the case at all.
I want to draw your Lordships' attention to table A1 in the Red Book on page 154. It is a helpful table which shows the impact of the Budget changes. In lines 1 and 3 one duly finds the increases brought about as a result of the Bill. Personal tax is up by £4·6 billion, which is fine, and we are ready to forgive, to forget and to pay the £4·6 billion for a good cause. However, where will that money go according to table Al? It will not go to the NHS. Instead in lines 18 and 19 and in note K we find that personal tax is down by £4·6 billion. As the Minister knows, that is the effect of the changes to the Government's tax credits regime. So all the money raised by this Bill will pay for tax credits and will not go to the NHS.
Perhaps we can relax. If the money is not spent on health, perhaps it will be spent on insurance. Like the noble Lord, Lord Newby, I shall reflect on the contributory principle of social insurance that underlies the National Insurance Fund. As the
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Minister has said, the essential element of the contributory principle is eligibility for certain benefits—mainly retirement and widows' pensions—based on compulsory contributions from employees, employers and the self-employed.
Looking at the latest report of the Government Actuary on the National Insurance Fund, published last May, we find a familiar figure of £58 million of receipts from national insurance contributions and £55 billion paid out in age-related benefits of one kind or another. It seems that the National Insurance Fund does not operate as insurance in the normal sense of that word; it operates on a pay-as-you-go basis, so that today's contributions by today's workers cover and finance the current outgoings paid to today's benefit recipients.
The problem is that there is little direct financial relationship between what an individual pays in over a lifetime and what an individual may or may not take out by way of benefit. That point was exposed in the fifth report of the Select Committee on Social Security in June 2000. The committee was worried about the contributory principle and what it would mean for the public in accounting terms. It was pointed out that we now have a mish-mash in respect of what is paid into the fund and what is received from it. It was said that they were not transparent transactions.
If asked about the Bill and about the contributory principle, how many voters would understand that the bulk of national insurance does not go to the National Health Service? The noble Lord, Lord Newby, raised the same point. Research undertaken by Dr Stafford in 1998 for the then Department of Social Security concluded:
"the respondents believed that through their contributions they had secured a contract with the state that gave them a 'right' to contributory benefits. In some instances, respondents thought, incorrectly, that their contributions were paid into a 'personal kitty', which was available when needed".
The TUC giving evidence to the Social Security Committee also complained about the lack of transparency in the national insurance contribution system. It was surprised by the public's complete lack of understanding about the working of the contributory system, which I believe the noble Lord, Lord Newby, called complex and opaque. The TUC's evidence spoke of,
"the complexity of national insurance and the widespread ignorance of its main features".
The Government know the situation well and plan to take full advantage of it. As the right reverend Prelate said, the Bill is merely a device for raising money painlessly because people dislike the idea of paying income tax. Although the idea of contributory benefits as a right may be popular with some members of the public, I hope that. I have shown that it does not have any basis in economic or accounting reality. Therefore, we should give up the myth that the national insurance regime is insurance and admit that it is a straightforward tax.
The Minister will say that I am being unfair or irrelevant. He will say that, "Everything goes into one pot. Who cares about the labels? We, the Government,

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take in the money and pay it out as we wish. What is in a name?" Perhaps there is not much in a name, but as the accountants at WorldCom discovered, calling an item by a different name can change the way in which that item is viewed, which means that one can change the way in which it is treated in the accounts. By changing the name one can achieve a different result, as the Government know well. They are experts at it. That is why they classify "spending" as "investment"; "means testing" as "targeting"; "benefit" as "credit"; and that is why they stop us using the phrase "tax burden" and require us to use the phrase "tax and social security contributions as a percentage of gross domestic product" instead. By calling "costs" "capital" one increases the profit; by calling "tax" "insurance" one reduces the pain, as the right reverend Prelate said.
The very existence of the Bill conforms to Professor Liekerman's views about the way in which public accounts are dealt with. He says:
"There is an enormous need for much greater clarity of presentation",
and continues:
"Reader understanding (of financial reports in the public sector) is sometimes felt by those who compile them to be a disadvantage".
He also said:
"Such reports should … not be unduly distorted"—
I draw your Lordships' attention to the phrase—
"by public relations considerations".
The entire Bill is the creation of public relations considerations.
The Institute for Fiscal Studies is in no doubt about what we are talking about in the Bill. It says that it is a back-door increase in income tax, as the right reverend Prelate said, rather than any form of contribution. It says that the increase in national insurance is,
"for somebody whose sole source of income is from paid employment exactly like increasing the starting, basic and higher rates of income tax by 1 percentage point".
The Treasury Select Committee went on to suggest:
"We note this departure from previous practice which could be viewed as a move of the national insurance contribution system towards that of general taxation".
We are moving towards a national insurance system in which there is no relationship between what individuals pay in and what it pays out. In my opinion, the Bill deliberately further blurs the distinction between general taxation and national insurance contributions.
In Committee in another place, the Financial Secretary said that the Government have given us a tax system that is like a television set—so complicated that no one understands it but that did not matter because people only had to turn the switch. That is utter nonsense. What switch has to be turned to discover that not one penny of the extra £4·6 billion of national insurance contributions will go on health?
3.40 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful for some of the contributions to this short debate. A Bill that does nothing but raise revenue from the public is not going to be the most popular Bill in the parliamentary year. The paradox is that the Chancellor's Budget has been popular because people recognise that our arguments about National Health Service funding are right. The Budget has been popular because the public recognise that if one wants a world-class NHS, one must pay for it. There are no cheap and easy ways out. As Derek Wanless has pointed out, there are no solutions in individual or social insurance alternatives.
I knew that our policy would have the support of the Liberal Democrats but I am fascinated by the silence from members of the Conservative Front Bench. I understand that the Conservative Party has been searching Europe, and perhaps the world, for alternatives to funding the NHS from general taxation. Perhaps the silence from the noble Lord, Lord Saatchi, is an indication that is about to change. I hope so. That would be most welcome.
The right reverend Prelate speaks with authority from his position in the Church of England and as a representative of Churches and faiths more generally. I acknowledge the force of his complaint that the voluntary sector, charities and Churches will be treated in the same way as businesses and individuals—which we have never sought to conceal. I am sorry that the right reverend Prelate has not received a reply after writing to the Chancellor two or three weeks ago. I shall make sure that a response is expedited. Such delay is not satisfactory in respect of anyone who writes to the Chancellor—still less someone who writes in such an important representative capacity.
The voluntary sector, charities and Churches are affected by the Bill as employers—just as all other employers are—by the problem of ill health among people of working age. We rely on the CBI estimate, not our own, of the cost of ill health to employers— including charities, the voluntary sector, charities and Churches—totalling 12 billion a year. An improved health service will bring benefits to employers, regardless of who they are.
There is general agreement that the health service is defective in many ways. The voluntary sector, charities and Churches need the service to be improved and will benefit when it is—so they will get something back for the money they pay.
The public services as a whole ought not to be treated differently from the private sector in respect of taxes from employees and employers, as that would give rise to an anomaly that would present difficulties to begin with and make things impossible as time went on. How could one distinguish between public and private services? Would private companies that supply only the public services also be exempt? No one can justify discrimination in employment taxation as between the public and private sectors. Instead, we have to ensure that the money going to public services

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and to the voluntary sector, Churches and charities is sufficient to allow them to bear the burden, which they must, together with other employers.
We need to examine the cost of public services in the wider context of increased spending on pubic services in 2003–2004, when the measure will come into force, of £19·5 billion and of £6·7 billion on the National Health Service. Under those circumstances, the relative importance of the figures takes on a different aspect.
Parts of the voluntary sector and charities do contribute to publicly funded public services. I assure the right reverend Prelate that as part of the current spending review, which will be reported later this month, there will be a cross-cutting review of the role of the voluntary sector in delivering and assisting the delivery of public services. That review will take account of the issues that the right reverend Prelate raised.
The noble Lord, Lord Newby, made an interesting speech about hypothecation—which appeared to be based in part on the thinking that the measure is hypothecation. It is no such thing. Our objection to hypothecation is as strong as ever and it stems not just from the answers that the noble Lord gave to his own questions about extending the principle to prisons, the Armed Forces or other less popular areas of public expenditure. Our objection is also that ways of raising money for public services are subject to variation, whereas the needs of the public services are not. We would not subject the National Health Service to a hypothecation that would put at risk its long-term financial planning, which must be based on a commitment to expenditure from all sources of revenue.
Lord Newby: My Lords, if the definition of hypothecation is not that one raises or earmarks a tax for a specific purpose, what is the definition?
Lord McIntosh of Haringey: My Lords, I shall explain that in the context of the Bill. In contrast to the remarks of the noble Lord, Lord Saatchi, the Bill makes it explicit that all the money it raises will go to the NHS. Clauses 4 and 5 cannot be read any other way. That is not to say it is the only money going to the NHS or that there is a fixed relationship between NHS expenditure and the Bill's provisions or any other individual form of taxation. Our commitment is for a 7—4 per cent increase in NHS expenditure in real terms over the next five years—equivalent to an increase in the service's budget from just over £60 billion to just over £100 billion between now and 2007. Over five years, that is a lot more money than will come from the Bill. Other sources of taxation are used for the NHS and the service will not be at risk if there were a reduction in employment, for example, and therefore a fall in revenue from the Bill. That is why the measure is the right approach, but it is not hypothecation.
The noble Lord, Lord Saatchi, began with a comment on the treatment in this House of the Finance Bill. He will be aware that the Bill is a money Bill, and a Bill of aids and supply. In other words, the
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Commons relies on privilege dating back not only to the Parliament Act 1911 but to resolutions of 1678— and I forget the other year. It is a well-established historical principle that it should be in that form.
I did not think that the noble Lord's use of the rhetorical device served him well. He said, "Let us not take account of this and this". I could have challenged many or all of those points. However, I do not need to do so because he said, "Let us not do so", so I shall not. However, I shall answer his claim that all the money raised by the Bill will go on tax credits and the National Insurance Fund and not a penny of it—I do not exaggerate what he said; he was extreme in his words—will go to the National Health Service. I make clear that if he reads Clauses 4 and 5 of the Bill he will see that there is no possibility of money being raised by the Bill and not going to the National Health Service. It is not all that will go to the National Health Service. In the early part of the next five year period it is probably true that money raised by the Bill and going to the National Health Service relieves pressure on other sources of taxation for the first year. But over the whole period I can assure the noble Lord without equivocation that that is what the Bill is for.
The noble Lord used the word "painless". None of this is painless. There is no way of raising taxes which is painless. But I believe that the people of this country want a world class health service. They want a health service which sets itself demanding but achievable targets and they are prepared to pay for it. The Bill is a contribution to that. I commend the Bill to the House.
On Question, Bill read a second time; Committee negatived.

Enterprise Bill
3.53 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that this Bill be now read a second time.
I am very pleased to have the opportunity to introduce this important Bill to the House. I shall start by putting the Bill into the context of the Government's overall strategy.
In our first term of government our economic priority was to establish economic stability—the essential precondition for wider prosperity and business success. In this second term, our economic priority is to build on the foundation of economic stability by promoting higher productivity and greater enterprise. To achieve this we will now match independence for our monetary authorities with independence for our competition authorities, and alongside tough rules for public finances we will put strong rules for competitive behaviour and consumer protection.
The purpose of the Bill is to strengthen the foundations of an enterprise economy—by promoting competition, protecting consumers and establishing an insolvency regime that fully supports enterprise.

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These foundations need strengthening as soon as possible if the UK is to be equipped to meet the economic challenges of the 21st century.
The Bill has been widely welcomed. For example, recently Sheila McKechnie, of the Consumers' Association said that the measures will,
"put an end to the billions lost to consumers each year from rogue traders".
And Digby Jones of the CBI said:
"We support [the Bill] in the round and we value a very tough competitive regime because it will enhance productivity".
The Federation of Small Businesses said:
"We do not see anything controversial in these proposals and would urge all party support and speedy implementation through Parliament".
There has also been support from competition, consumer and insolvency experts and other interested parties. The extent of support for the Bill reflects the fact that at every stage we have listened to the views of stakeholders. In 1999, we consulted on the measures in the consumer White Paper. In 2000, we consulted on personal bankruptcy and reform of the merger regime and last year on competition and insolvency. The responses to our consultations, along with our ongoing discussions with a range of interested parties, have been invaluable in taking forward our original proposals.
The Bill has also been improved as a result of the constructive debate that took place in another place, and I am sure it will be here as well. Honourable Members there asked about how much of a difference the proposals will make to people's lives in practice. They sought reassurance that the Bill will not create new burdens on business. They asked whether sufficient resources will be available to back up new powers given in this Bill. I believe that we were able to give convincing answers to all their questions and to persuade them of the importance of the measures in this Bill.
I shall start with the measures in the Enterprise Bill—in Parts 2 to 7—to promote competition. As a Government, we are unashamedly pro-competition. Effective competition provides opportunities for new firms to enter markets and grow. Strong, fair competition contributes to innovation and productivity growth and the diffusion of economic power. It maximises opportunities for all.
We are still behind France, Germany and the US in our productivity. Our productivity performance must improve to ensure the higher living standards that all of as want. The number one target in the DTI's Public Service Agreement is to close the productivity gap. We need a step change in domestic competitive pressures to help us both raise our productivity and compete effectively in international markets.
I believe that as our competition framework becomes more effective, markets will work more efficiently and fairly, and the less regulatory intervention will be needed in the long run.
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The Competition Act 1998 started the process. It introduced into domestic law a regime which prohibited anti-competitive behaviour and which was closely modelled on the EC counterparts in Articles 81 and 82 of the EC treaty. But other areas of competition need to be addressed; for example, to modernise the mergers and markets regimes and to do more to deter cartels.
Our reforms are based on a number of key principles set out in the competition White Paper. The first principle is that we need strong, proactive and independent competition authorities that are able to deal with anti-competitive behaviour. So we are removing Ministers from the vast majority of decisions on mergers and market investigations, thereby removing a layer of regulation and streamlining the regime. We are ensuring that decisions are taken by competition experts, free from short-term political pressures. And by ensuring that those decisions are taken on the basis of a competition test, rather than a public interest test, we are improving the clarity of the framework for decisions, and the predictability of decisions made under it. This is good news for business.
The Bill also makes important procedural improvements to the regulatory framework for mergers and market investigations, ensuring greater transparency, and it makes changes to improve the accountability of the authorities. We will ensure that the competition authorities have the extra resources needed to carry out their functions effectively. The effect of the reforms will be a regime that operates predictably, consistently and proportionately. In short, better regulation.
The second principle of our reforms is to establish a strong deterrent effect for anti-competitive behaviour. The Competition Act introduced fines for firms which engage in anti-competitive behaviour—but did not provide a deterrent for those individuals who dishonestly engage in hard-core cartels. Hard-core cartels do serious harm to consumers, businesses and to the economy by forcing up prices or keeping them artificially high, and preventing new entrants gaining access to markets. US competition authorities believe that cartels raise prices by 10 per cent on average.
Examples of recent cartels include the global vitamins cartel that fixed prices for eight years and is estimated to have doubled the prices to consumers—resulting in a record European Commission fine—the carbonless paper cartel led by a UK company, and the Sotheby's/Christies cartel. As Andreas Whittam Smith wrote in Monday's Independent:
"The crime for which the former chairman of Sotheby's was sent to jail recently in the United States may have seemed like a breach of arcane rules about collusion in auction markets. But it was stealing … in the same way as having one's wallet removed by surreptitious fingers while pushing through a crowded street is stealing".
The Director-General of Fair Trading's cartels investigation branch is uncovering evidence of cartel activity in the UK. There are currently around 40 significant cases under investigation. The possibility of fines on companies under the Competition Act does not create a real deterrent for individuals.

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Therefore, we propose to introduce a new criminal offence of dishonestly entering into cartels, backed by sanctions including the possibility of up to five years' imprisonment. The offence is tightly drawn but will create a real deterrent effect. Not only is that measure vigorously supported by consumers, it has business support too from, for example, the British Chambers of Commerce.
Our third principle is that those who have lost out through anti-competitive behaviour—whether businesses or consumers—should have a genuine opportunity to obtain redress. Where a company has been found by the Office of Fair Trading to have breached competition law, the Bill will enable harmed parties to bring claims for damages before a specialist competition body—the competition appeal tribunal. They can already go to the courts in those circumstances but the change brought about by the Bill will establish a cheaper, more streamlined route to obtain redress from companies that have broken the law.
Representative bodies will be able to bring claims for damages in front of the tribunal on behalf of named and identifiable consumers. That will help consumers bring claims where a large number of parties have suffered a relatively small level of harm. These are specific claims for damages against a company that has already been found to have breached competition law, not the much broader US-style class action. As the Consumers' Association said:
"consumer organisations are hardly likely to engage in frivolous action that will cost them time, money and reputation".
I turn now to the measures in the Bill specifically designed to protect consumers—in Parts 1 and 8. Because strong competition is the best form of consumer protection, all our competition reforms are good news for consumers. The stop now orders, introduced last year, were widely welcomed by consumer organisations. They significantly improved the powers available to enforcement authorities to stop breaches of the legislation implementing 10 consumer protection directives. The Bill will extend this regime to other areas—particularly in the service sector—where consumer interests are harmed by traders not meeting their legal obligations. It will allow effective public law enforcement action to be taken against traders who provide inadequate services—for example, cowboy builders, incompetent plumbers, and poor car servicing. By replacing Part III of the Fair Trading Act and the stop now orders regulations with a single coherent enforcement structure, the system will be clearer for businesses to understand.
We recognise the new demands that the stop now regime is placing on trading standards departments. My department has already provided additional funding for local authorities of £5 million over two years for implementing the existing stop now orders regime. We anticipate that a further transfer in the region of £10 million would be appropriate once the Bill is implemented and stop now orders are extended.
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The Bill also includes measures to enable the OFT to give formal approval to voluntary industry codes of practice. They will help consumers identify reputable traders and benefit businesses by increasing consumer confidence in their products and services.
In another place there were some calls for the Bill to include a general duty not to trade unfairly. Cases of sharp practice were cited, which were argued to be unfair but not currently unlawful. I am sure we all agree that businesses should trade fairly. However, we are not convinced that enshrining a general principle of that kind in legislation is necessarily the best way forward. We must ensure that any new policies for new laws are founded on a robust evidence base, to ensure that they address the real issues of concern and are effective. We also need to bear in mind the importance of not imposing unnecessary burdens on business.
For that reason, my honourable friend the Parliamentary Under-Secretary of State for Competition, Consumers, and Markets is inviting key stakeholders to a seminar with her to explore the case details that they hold in more detail, and to help us assess properly to what extent the practices involved are not covered by existing law. We shall then consider what further action would be appropriate. Where necessary, that will need to take account of what is happening in the European Union in respect of plans to reform the consumer protection regime.
The Bill that I present today also modernises our insolvency regime—in Part 10. If we are to build a truly enterprising economy, we must ensure that our insolvency regime is one that supports, rather than stifles, the development and growth of new businesses, and helps reduce the stigma of failure. The measures contained within the Bill aim to do that, while at the same time striking a balance between the interests of debtors, creditors, companies and the public.
Our current individual insolvency regime treats all bankrupts the same, regardless of the bankrupt's conduct. Their assets are dealt with in the same way and in most cases they are discharged after the same period of time. The result of this one-size-fits-all approach is that the stigma associated with bankruptcy is applied equally to the unfortunate, the irresponsible, the reckless and the dishonest.
We want to introduce a fairer system that takes into account individual circumstances. Therefore, we are providing early discharge for those who have failed through no fault of their own and, by way of a counterbalance, introducing a stringent regime of bankruptcy restriction orders to take action against those whose behaviour poses a threat to the public and commercial interest.
The Bill does not promote bankruptcy as an easy option; indeed, we firmly believe that bankruptcy should be seen as a last resort. That is why trustees in bankruptcy will continue to be able to realise the same assets as now. Indeed, we are making it easier for them to do so by introducing income payment agreements and amending the procedure for applying for suspension of discharge. We believe that those measures will help provide a fresh start to those who

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do not pose a threat to the public and commercial communities, take better account of the conduct of the bankrupt and reduce the stigma of failure.
In addition to those "fresh start" proposals, we want to help ensure companies facing financial difficulties do not go to the wall unnecessarily. In order to do so, we are restricting the use of administrative receivership where effective control lies in the hands of a single secured creditor, and creating a new streamlined administration procedure.
Although recognised as an effective rescue vehicle, administration has been criticised as too inflexible, too slow and too expensive. The Bill addresses that by streamlining the procedure and providing a clearer focus on company rescue and, where that is clearly not a viable option, a better return for the company's creditors as a whole. The Bill also provides clearer timescales to ensure that cases are not drawn out at the expense of the company and its creditors, and ensures that the administrator takes into account the interests of all creditors in his dealings with the company.
Following detailed discussions with a range of interested parties, we have agreed that the provisions of the Bill should not extend to registered social landlords. Therefore, we shall be tabling amendments that will provide exemption for all registered social landlords, whether they are companies or industrial and provident societies. Legislation relating to registered social landlords in Scotland is devolved and therefore we shall be consulting with the Scottish Executive with regard to any implications for Scotland.
We believe that those changes to the corporate insolvency regime will encourage wider use of the procedure as a rescue vehicle, and encourage smaller companies to make use of administration—not simply as a last resort, but before the situation becomes terminal.
Other insolvency reforms include abolishing the Crown's preferential right to recover unpaid taxes ahead of other creditors, reforming the Insolvency Service's financial regime to bring increased transparency and simplicity, and ensuring that the maximum possible investment return goes to insolvent estates. Together, those measures will make up to £115 million a year available for distribution to all creditors.
The measures contained in the Bill are radical and bold, but based on careful consultation. We have developed them to strike the right balance and to reform the existing framework of regulation for the better without creating additional regulations for business. We shall provide the necessary resources to ensure the measures are effective. Some of the measures involve complex areas of law and I am sure that noble Lords will want to scrutinise them carefully in Committee. But the objective of the measures is very clear—to make the UK a better place to do business and a better place to be a consumer.
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The Bill has attracted widespread support—support that I hope will be reflected in your Lordships' discussions today and during the Bill's passage. Much expertise on these matters resides in this House. I look forward to hearing noble Lords' thoughts and comments on the Bill today and in Committee. Together, the package of reforms will make a real difference to this nation's prosperity. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Sainsbury of Turville.)
4.10 p.m.
Baroness Miller of Hendon: My Lords, I thank the Minister for his clear introduction to this long and complex Bill. I also thank those sometimes forgotten people in the departmental back room, the authors of the excellent Explanatory Notes, which will be helpful to all those who participate in the later stages of the Bill.
Before dealing with the substance of the Bill, I have two preliminary remarks. First, this is a long and technically complex Bill, covering competition, insolvency and consumer affairs, which could have been the subjects of three separate substantial Bills. They were the subjects of three separate White Papers. It is a matter of regret that, despite the fact that the main principles of the Bill are uncontroversial and are generally welcomed by commercial interests, the consultation period has been short. Even the CBI, which supports the Bill, has complained about,
"the inadequacy of the consultation period, given the complexity and novelty of many of the proposals".
The consultation period allowed by the Government was a derisory nine weeks, including four during the August holiday season. It is also a matter of regret that the Bill should have reached your Lordships' House so late in the Session and with so little time allocated to it compared with the 18 sittings that it had in Committee in the other place. It is symptomatic of the contempt that the Government sometimes show for Parliament in general and for your Lordships' House in particular that, while as ever paying lip service to this House's unequalled reputation as a revising Chamber, they are clearly attempting to restrict the time for debate on any issues that may arise, because it is already so late in the Session.
Those of your Lordships who have not been following proceedings in the other place should know that a major section of the Bill dealing with cartels and market investigations was not debated on Report because of the operation of the guillotine. Those provisions have yet to come to the Floor of either House of Parliament.
Your Lordships will have noticed that the Bill is now 194 pages longer than as originally presented in the other place. As we have seen on other major Bills, this is an example of the Government legislating on the hoof.

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The second minor preliminary matter that I have to mention is to declare a previous interest. I was formerly a member of what was then called the Monopolies and Mergers Commission, now the Competition Commission, from which I had to retire immediately on being elevated to your Lordships' House because of an obvious potential conflict of interest.
This is a complex Bill. I am glad to tell your Lordships that we shall be receiving the invaluable and expert assistance of my noble friends Lord Kingsland, who will deal with the competition aspects, and Lord Hunt of Wirral, who will deal with the insolvency provisions.
As my honourable friend the Member for Eastbourne wrote in the Conservative press release on the publication of the Bill:
"There is much to be welcomed in this Bill. Many of the proposed reforms to consumer protection and the competition regime are particularly welcome".
However, like my honourable friend, I have to ask why the Government found it necessary to introduce the Bill so soon after the passage of the Competition Act 1998. Perhaps I should ask the question the other way round. Why did the Government take up valuable parliamentary time with the 1998 Act when the present Bill was clearly in the pipeline? The Government have already found it necessary to include amendments to that Act in this Bill.
I remind your Lordships of the claim made by the former Minister of State on Third Reading of the 1998 Bill in the other place. He said:
"Reform of the current regime is long overdue. The Bill will give us a really modern and effective competition regime at last".— [Official Report, Commons, 8/7/98; col. 1209.]
The 1998 Act, which came into effect only on 1st March 2000, introduced one of the toughest competition regimes in the developed world. In reforming their recent reforms, as my honourable friend the Member for Maldon and Chelmsford East pointed out in the other place, the Government must feel that their modern regime has not proved as effective as they had hoped. The ethos in the department seems to have been to use time somehow to legislate about something, irrespective of whether there was something to legislate about or whether that legislation was fully thought-through.
It would be useful for your Lordships to note what the Government have previously said about the Bill. On the competition aspects, they promised a much reduced role for Ministers in decisions on mergers and competition policy. We can all welcome that without qualification, especially when we bear in mind recent events, such as the ministerial approval of the takeover of the Daily Express. Strengthened competition authorities operating at arm's length from government departments are to be provided with more resources and expertise, as the Minister mentioned, and are to make decisions on the competition-based test. Where is that expertise to come from? Will it be entirely from within the occasionally changing membership of the Competition Commission, or is the commission able
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to continue to call for outside expert evidence whenever it feels that that is required? Will it be able to co-opt members for a particular inquiry?
Will the Minister define the competition-based test that the Government speak about? How does it differ from the current test, which is based on the public interest? In other words, is the public interest no longer to play any part in a decision about the acceptability of a proposed merger, or is it to be overridden by the competition-based test that the Government are creating? I have not been able to find anything in the Bill that explains the new competition test, which could mean anything. Any help that the Minister can give me on that would be appreciated.
The Government's description of the aims of the Bill included references to criminal sanctions. The Downing Street website said that they would include,
"a maximum penalty of 5 years' imprisonment to deter individuals who dishonestly operate hardcore cartels, including agreements to fix prices, share markets and rig bids".
The same website claimed that the measures would extend to individuals the provisions in the Competition Act 1998 that related to companies. That is an example of the half-thought-out nature of some of the measures in the 1998 Act. which the Government are having to tinker with only four years on. It seems that individuals or companies who fix prices, share markets and rig bids from outside the United Kingdom or outside the EC are to be subject to extra-territorial jurisdiction, which the Bill will create.
However, despite the reference to fixing share markets in the Government's website, that does not appear to be covered in Part 6, especially in Clause 183, which creates the so-called cartel offence. Have the Government dropped those proposals or have I missed them?
Finally on the competition aspect, the Government have promised greater rights for individuals to bring damages claims for losses suffered due to anticompetitive practices. That is clear enough, hut, again quoting the No. 10 website, the Government are also proposing that,
"Consumer bodies can make claims for named individuals'".
At the request of the CBI, we shall seek to look into the OFT's roaming brief to investigate markets to ensure that it does not cause firms or even whole industries unnecessary costs. It will be interesting to see how that discussion progresses.
We are also concerned about the power to be given to the OFT to disclose to overseas authorities information that it receives in confidence. Clause 208 will give the Secretary of State powers to designate the great and the good among consumer associations who, in addition to the OFT and the usual local authorities, will be given the right to enforce the consumer protection legislation. How will bodies qualify to be, in the worrying phrase of Clause 208, "a designated enforcer"? Apart from the obvious examples of the National Consumer Council or the Consumers' Association, could that include trade associations such as ABTA or manufacturers' associations such as the Engineering Employers' Federation? Could trade

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unions be included? The Government probably already have something in mind. Without committing the Government to a list of names, perhaps the Minister will tell us in general terms the sort of organisation that will be granted special powers to police the Act.
We should bear in mind that some consumer protection bodies are self-appointed and are not necessarily governed by elected members. I do not say that in any way to denigrate any of them, because they do an excellent job in creating public awareness and are not merely special interest pressure groups. My honourable friend in the other place expressed concern at the possibility of a wholly innocent company facing the expense and disruption of a series of complaints launched one after the other as each one fails. He referred to the problems of the record industry, which spent an estimated £17 million to £20 million because of the 1993 Monopolies and Mergers Commission inquiry, yet despite that had to face a further five inquiries, none of which overturned the 1993 Monopolies and Mergers Commission report. I know how detailed the inquiry was because I was involved in it as a member of the MMC. I left before the final report was issued, as I explained earlier.
I trust that in licensing organisations under Clause 208 the Secretary of State will undertake to oversee them and to revoke their licenses if they are found to be harassing legitimate businesses or acting unreasonably. Perhaps Clause 208 could be altered to cover that point.
Another major segment of the Bill contains what the Downing Street website calls "insolvency measures". We welcome the long-overdue reform of the bankruptcy laws to distinguish between cases of genuine misfortune and culpable activity such as fraudulent trading in so-called phoenix companies. We also welcome the restrictions on administrative receivership where one creditor seizes all the assets and does what he wills with them, possibly to the detriment not only of the debtor but especially of the other creditors.
The receiver's activities are often far from commercially sound if the objective is to salvage the company as a going concern. Perhaps a measure along the lines of the American Chapter 11, which has given many ailing companies a breathing space to recover from a temporary setback, is needed. But the current ethos of some lenders is that they are not interested in preserving the assets or saving the company. It seems to be a smash-and-grab raid; they go in and get what they can and that is the end of the poor company.
But the solution must be approached with caution because there is a danger that banks, for example, will be reluctant to lend on the security of debentures and will insist on charges over fixed assets to the detriment of borrowers whose assets are mostly intangible, or will increase interest charges to cover potential losses, which will be to the detriment of small businesses in particular.
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It is right that the Government should give up their iniquitous first preferential claim to taxes. The justice of that is self-explanatory. A creditor, possibly a small trader, who has supplied goods to a debtor, should not be made to watch while those goods are sold, not to pay a dividend to him along with other creditors but to be swallowed by the rapacious maw of the Treasury, which will not have contributed a penny for the benefit of that company.
We welcome the Government's intention to help those who set up in business and run into difficulties. But there is a difference between them and those who incur debt, either by reckless trading or by profligate spending. I am amazed by the adverts that appear daily on the television offering to help people to convert all their multiple debts into what they claim will be one single manageable monthly payment. As a selling point they point out that the debtor will then be able to afford a new car, a holiday, and so on, rather than learn a lesson from the feckless spending that got them into that state in the first place.
As my honourable friend John Whittingdale pointed out to the other place, it is not only the banks that suffer when a debtor goes bankrupt, but also family and friends and other small traders who may be forced into insolvency through a bad debt. The Bill does not distinguish between risk-taking entrepreneurs—albeit that the risks they take are often with other people's money—and reckless debtors. That is a point we may wish to look at later when considering Schedule 20, without detracting from the Government's good intentions. Schedule 20 seems to lack detail and emphasis between misfortune and profligacy.
Perhaps the experience in the United States of America is relevant. Relaxed bankruptcy laws encouraged a record 1·5 million personal bankruptcies in 2001, 97 per cent of which were consumer rather than business. That is due to the expanding use of credit cards, a trend which is also taking place in the United Kingdom. The losses incurred do not fall only on the banks, card issuers, and stores. It is the customers who pay their own accounts who ultimately pay for the defaulters in what in some cases is nothing more than a different form of shoplifting.
I am also concerned about the effect of the relaxation of the bankruptcy laws on the student loans scheme. Many graduates now leave university with a great burden of debt. Bankruptcy will be an easy way out if no stigma attaches and there are limited disabilities regarding the obtaining of credit in their future careers.
Downing Street's trailer of the Bill refers to "consumer measures". They include the extension of "stop now" orders, a welcome provision so that dishonest traders cannot continue with their activities while laborious legal processes are undergone. However, we will want to examine that aspect in detail to ensure that those necessary powers cannot be exercised arbitrarily on the basis of less than adequate evidence.

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The OFT will be required to respond within 90 days to "super complaints" from designated consumer bodies, which would be good if it works in practice. We would want an assurance that the OFT will not accept and act on complaints only from those designated bodies, and refuse to countenance complaints from the public, even single members when appropriate. I do not suggest it should be bound to investigate every complaint, however trivial, from every disgruntled customer, or even from crackpots, because any business dealing with the public is bound to get a number of those sooner or later. But it must not create an exclusive regime where action is taken only on the complaint of selected bodies, even though they would doubtless carry out the useful task of screening out unsuitable complaints.
The OFT is to be given the task of approving business codes of practice. The DTI has under its wing an organisation called the United Kingdom Accreditation Service, which already performs that useful function. It would be interesting to know whether that organisation is to be transferred to the OFT, or whether there will be unnecessary duplication. If the Minister cannot tell us today perhaps he could write to me.
In general terms we welcome the Bill, even though it represents a second bite of the cherry after the Competition Act 1998. However, that welcome is not without reservations shared by the CBI and experienced lawyers practising in the field. I draw your Lordships' attention to some of the comments made by these non-political sources, which have not been addressed during the Bill's progress through the other place.
Mr Digby Jones, director general of the CBI, warned, as I have done, against compelling and,
"forcing good firms to defend themselves unnecessarily when their European rivals shelter under less rigorous regimes".
The leading firm of solicitors experienced in consumer affairs warned against,
"adding to industry's costs making the then whole process more judicial, which will also add to the expense. By following the US approach Britain would be drifting away from the EU approach to competition".
In fairness, the reaction of commerce and industry has generally been welcoming, as is ours, as I have made clear. That is despite the high-flown and entirely debatable hypothetical claims by the Secretary of State on the day the Bill was published, when she said that
"Monopolistic behaviour costs the UK — around £4·5 billion-£9 billion per annum".
That is a wide range of figures and I am not sure how she came to them. She also quoted a claim by the OFT that losses from,
"defective goods, inadequate redress or poor information",
cost £8·3 billion per year.
That figure may have been plucked out of the air. I am sure that one statistician would say that it was extensive, while another would say it was inadequate. That is the problem with coming out with figures.
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There is no need for the Government to gild the lily by using theoretical figures to support a Bill that is generally acceptable in principle on all sides. Equally, it was not necessary for the Secretary of State to indulge in pejorative language when she said that,
"Those operating cartels are guilty of theft".
That is a hard word. It is not theft in any sense of the word from a legal point of view. However, it is clearly wrong, especially in the context of price fixing and market sharing, and is clearly against the public interest and must be stopped, which we hope it will be by the deterrent criminal penalties that the Bill will introduce in addition to the civil remedies available under the Competition Act 1998, although I have not seen instances of that remedy being enforced.
In her introduction of the Bill at Second Reading in the other place, the Secretary of State referred to the objectives of promoting higher productivity and greater enterprise, generation of wealth, job creation and other laudable and uncontroversial objectives. I will not take up your Lordships' time by quoting any more, nor will I repeat the quotations from the British Chambers of Commerce, the CBI or the Consumers' Association. We all share those sentiments and ambitions.
The only word of warning I want to introduce into this non-contentious subject comes from the Secretary of State's own speech, when she said,
"The United Kingdom … needs a modern, world-class competition regime and a regulatory framework that is designed to promote competition rather than perpetuate regulation".
I look forward to seeing the Government converting that fine sentiment from words to deeds in framing the secondary legislation, because their record over the past five years has been to pile on one regulation after another. I fear that that might happen; we shall see.
Incidentally, I noticed that the Secretary of State claimed in her speech that the Competition Act introduced,
"a modern, more streamlined regime that addressed — abuses of dominant position".—[Official Report, Commons, 10/4/02; cols. 44–45.]
Rather than claim the credit for that, perhaps the right honourable Lady should recall that that subject was comprehensively dealt with in the Treaty of Rome, to which the United Kingdom acceded when the Conservative Party took us into what was then known as the Common Market; it was a market, not more perfect union". We had some part in that effort.
One phrase in the Secretary of State's speech gives rise to a serious query, with which I hope the Minister will deal when he responds. In dealing with the changes to insolvency law and the priority of claims, she said, at col. 50, that they,
"will ensure that … there is more money available to the creditors, who may well include employees … because national Insurance contributions have not been paid on their behalf".
I stress the phrase,
"the creditors, who may well include employees",
and the fact that that is because of unpaid national insurance contributions.

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Will the Minister assure the House that the Government will, as hitherto, continue to bear the loss incurred when an employer fails to pay over his and the employee's national insurance contributions and any PAYE that has been deducted, and that they will not ask the employee to pay again, even in return for the welcome concession that the Government will forgo their preferential claim for unpaid taxes? At present, an employee is not a creditor—not even an ordinary or deferred creditor—for unpaid national insurance or PAYE because the Government credit employees' accounts as if the payments had been duly made.
Will the Minister assure noble Lords in unequivocal terms that the Government and not the employee will continue to bear the loss caused by a defaulting employer? That assurance is essential in view of the somewhat ambiguous but, in my view, slightly ominous and significant phrase that I quoted from the Secretary of State's speech. If the Minister cannot put that assurance on the record today—I do not see why he cannot; my honourable friend in the other place, the honourable Member for Eastbourne, made a similar point, which was not answered then—perhaps he will write to me.
I apologise for the length of this speech. As I said, this 523-page Bill is really at least three Bills in one. Going into its complex details has not been helped by the fact that there have already been substantial additions since it was first introduced in the other place. Not having the benefit of officials to help us, I hope that the Minister will understand that we have to examine it thoroughly. As I said, we will support many of its measures but we will certainly need to examine others.
4.33 p.m.
Lord Razzall: My Lords, I join the noble Baroness, Lady Miller, in thanking the Minister for the clear way in which he introduced a complex piece of legislation. I share her concerns about why the Bill has been introduced at this particular juncture and after a relatively short consultation period.
Those of us who have been involved with the Minister and trade and industry matters over the past year or two recognise that, among all of the Bills with which we have been involved, this Bill has probably received the largest amount of briefing from third parties. I shall name a few of the interested parties: the British Bankers Association, the CBI, the Consumer Credit Association, the Finance and Leasing Association, credit card issuers—not to be advertised—the National Consumer Council, the National Housing Federation and the Association of Business Recovery Professionals, let alone all of the law societies. It is of great concern that all of those bodies lobbied us strongly but often with conflicting recommendations. Dare I say, with some scepticism, that perhaps I detect the hands of the Chancellor of the Exchequer behind the Bill rather than the Department of Trade and Industry? I do not expect the Minister to rise to that point.
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However, the Bill is now before us and it will not surprise the Minister that we on these Benches accept and welcome many of its provisions. However, it is extremely complex, as have been other Bills in relation to which I have enjoyed jousting across your Lordships' House with the Minister. We have the expertise of the noble Baroness, Lady Miller, to improve the Bill; she has experience from the competition area. I hope that she will not regard her conflict of interests as preventing her from giving us her wisdom. We also have the saturnine presence behind the Minister of the noble Lord, Lord Borrie. On most topics in the Bill, nobody knows more than he. Dare I suggest, however—more in expectation than in hope on this occasion—that interventions from the experts on the subject will not take quite as long as they did on the Employment Bill?
The Bill is extremely technical and one of the longest pieces of legislation that the Minister has presented—indeed, it had to be published in two volumes. On Second Reading, I can touch on only one or two areas on which we shall probe the Government and, I hope, improve the Bill. We do so against the background that we generally welcome its provisions. I make these points with a wish to improve the Bill.
The first area relates to parliamentary accountability. We have long supported the argument—we also supported the Government when they eventually came to this conclusion—that it is a good idea to remove the political direction from competition policy. As a party, we were the first to advocate the independence of the Bank of England from political direction. We support the Government in that regard. However, we feel that, having taken that step, significant issues of parliamentary accountability ensue. For example, we argue—we shall do so in Committee—that there should be a DTI Select Committee to veto nominees to senior positions in the Office of Fair Trading and the Competition Commission. We will also argue that there should be specific reporting on each major decision by the OFT to Parliament so that it can publish the rationales behind decisions, which can be used for performance measurement.
There are many ways in which parliamentary accountability can be achieved. A Joint Select Committee of the Commons and Lords might consider those issues. There are many ways in which that can be done. The Bill needs to be improved in order to give greater parliamentary accountability for the important decisions that will be made by the OFT and the Competition Commission.
The second area in relation to which we shall probe the Government relates to the general matter of competition policy reform. Our concern, which I am sure will be shared on all sides of the House, is that the introduction of the criminal offence for cartels is in danger of crossing one line—or of not crossing the correct line—with European Union competition policy. If we are not careful, we could find ourselves in a situation in which cartels that are illegal and a criminal offence under the Bill, which we welcome, and which are domestic only are punished, whereas

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transactions that are caught under the European Union merger legislation carry only a civil offence, not a criminal offence. Bigger cartelisation would therefore not be punished with the criminal penalties that smaller cartelisation will be. We regard that as a significant issue that needs to be explored with the Government.
We will want to explore one or two other details relating to the mechanics of competition policy reform. For example, we believe that the investigation of offences should be assigned to the Serious Fraud Office rather than to the Office of Fair Trading. The noble Lord, Lord Borrie, may disagree. I look forward to hearing his views on that issue. We suspect that the SFO is better equipped for that sort of work than the OFT. We wish to explore that with the Government in Committee. We have reservations about surveillance powers which, in a cliché, can be described as a snoopers' charter. We wish to explore concerns on that matter.
We would welcome comments from the Minister when he winds up about the Government's proposals as regards what the noble Baroness described as the "Desmond issue". I understand that in the papers which are the subject for consultation on the communications Bill, the Government have indicated that they propose to put something into the Enterprise Bill to deal with the public interest element on newspaper mergers. I look forward to hearing what the Minister has to say about that. It is particularly unfortunate that this particular clause will always be named after Mr Desmond. There have been other occasions when newspaper mergers have had a public interest element, but I suspect that we shall spend the next month referring to it as the "Desmond Clause" and when the Minister explains how he proposes to deal with this issue.
Another area of concern is the proposed reform as regards corporate insolvencies. This Bill reflects a very considerable degree of amendment to the corporate insolvency provisions of our existing legislation. Concern has been expressed in a great deal of the lobbying and briefing which noble Lords will have received. There is a major concern that the Bill, as drafted, is designed to protect the company rather than the business. As the Bill goes through your Lordships' House we will argue that the Bill needs refinement to emphasise much more protection of the business rather than the company.
One example given to us in many of the briefs that noble Lords will have received is that it is not difficult to conceive of situations in which the preservation of the company itself could be achieved by a substantial debt write-off, which is prejudicial to the interests of creditors who might recover a better return from the sale of the business. In Committee we need to consider why it would be better to keep the company intact at the expense of the business and pay the creditors 20 pence in the pound whereas sale of the business would preserve jobs and the creditors could receive 60 pence in the pound. Second Reading debates are not the place to go into that degree of detail, but it is an important point which we would wish to pursue.
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We also regard the time-scale on administration of three months as entirely unrealistic. The Government seem to have accepted evidence that most administrations are dealt with in three months. That may be the case as regards small administrations, but we are all well aware that On-Digital is unlikely to be free of administration in the next three months. Another example concerns a subject closer to my heart. Loftus Road Plc only came out of administration when the Football League said that Queen's Park Rangers would not be allowed to play in the Second Division next year unless it came out of administration, which was well after a year. The time limit is too short.
As regards the personal bankruptcy area, we have a concern which the noble Baroness touched on, namely, that the proposed regime is too lax. A great deal of lobbying has been directed at the Government during the consultation process regarding personal bankruptcy. We believe that very few of the points have been taken on board by the Government. We are concerned that the personal bankruptcy amendments, as drafted, will reward the feckless at the expense of the prudent and encourage the conman and the fraudster. We are not against the general principle contained in the Bill, but we shall want to look at the detail to ensure that, as far as possible, that does not happen.
Finally and, in a sense, most importantly, we want to consider consumer protection. It is no surprise that the CBI is unhappy with large elements of the consumer protection provisions in the Bill. We would expect it to say that, would we not? We do not agree. We believe that in some ways the Bill does not go far enough in enshrining in our law more detailed protection for the consumer. In his opening speech the Minister indicated that the Government are not persuaded of the necessity to enshrine in our law a general provision to trade fairly. He said that he is not persuaded. This is a safety net approach which has been adopted in the legislation of most industrialised countries including most EU member states, certainly New Zealand, Australia and the United States of America. In the course of debate we shall endeavour to persuade Her Majesty's Government that they are wrong on this issue and that they should have enshrined in our law a duty to trade fairly.
4.47 p.m.
Lord Best: My Lords, 11 wanted to raise a problem which this otherwise excellent Bill has, I believe, unwittingly created for housing associations. It relates to Part 10 which is concerned with insolvency, and to the treatment of housing associations—so-called "Registered Social Landlords"—that get into financial difficulties. I was delighted to hear the Minister announce in his opening remarks that he understands the problem and intends to exclude housing associations from these measures.
To explain the importance of the Minister's commitment to amend the Bill as it stands, a few brief remarks may be in order. The current position on insolvency for housing associations is one with which everybody concerned is entirely comfortable,

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including the Regulator, the Housing Corporation, the National Housing Federation and the housing associations themselves, the individual lenders and the Council of Mortgage Lenders.
The Bill, as currently drafted, would include changes to permit arrangements for administration to be extended to the majority of housing associations that are industrial and provident societies. The lenders—banks, building societies and others—see this as a threat to their security. If the Bill is not amended some lenders would not want to lend to registered social landlords at all; others would charge higher interest rates to cover the additional risks that they perceive. Much administrative complexity would be added to the transactions and there is even a problem that existing loans would have to be renegotiated on less favourable terms.
I declare my interests as the chief executive of a housing association although, thankfully, one with very high levels of security for its borrowing, not least because the Joseph Rowntree Foundation stands behind it. I was also a founder director of the Housing Finance Corporation which, on a not-for-profit basis, organises loans for housing associations and would be adversely affected by the Bill.
The difference between housing associations and other not-for-profit bodies lies in the existing legislative powers given to the Housing Corporation—the regulator-by the Housing Act 1996. The corporation is able to exercise tight financial scrutiny and intervene as necessary. Indeed, one of the main aims of the Enterprise Bill—provision of a 28-day moratorium—is already met by the housing associations by specific provision of the 1996 Act.
The proof of the effectiveness of the current system is seen in the results: £25 billion has been raised from private sector lenders and the Government are expecting many billions more to be raised in the future; yet no housing association has ever been closed down by the action of any lender. So the current system works well. It is excellent therefore that the Minister announced that he will exclude housing associations that are industrial and provident societies from the new power to extend administration to such societies.
I should add that in the case of housing associations which are companies—an important minority which includes a number of those taking over council housing as part of transfer arrangements—it is sensible to preserve administrative receivership as is already provided, for example, in the case of public-private partnerships
At a time when the sector is trying hard to attract more lenders into the market, I know that the Government do not want to jeopardise this source of funds or the very competitive terms on which they are currently available. Indeed, if lenders were to pull back or raise their interest rates, fewer homes would be produced, tenants would pay more and important social objectives would be thwarted. I congratulate the noble Lord therefore on his announcement that housing associations will be excluded from the
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insolvency measures proposed and I look forward to studying the details of the new clauses he will be bringing forward.
4.52 p.m.
Lord Borrie: My Lords, it was just 25 years between the first post-war competition legislation in this country and the Fair Trading Act 1973. By a curious symmetry it was another exact quarter century from the Fair Trading Act to the Competition Act 1998, which was another radical, substantial measure. Therefore it may seem a little surprising to have this substantial, certainly heavy and lengthy Bill, coming so soon after 1998.
To my mind it is not as far-reaching or as radical as the earlier pieces of legislation; rather, it is a follow-on of the Competition Act 1998, particularly in covering the important matter of mergers which was left unaltered in 1998. It was a clear gap that needed to be filled. Further, the Bill strengthens the law on hard-core cartels and modernises the way in which markets are investigated by the competition authorities, doing away with the old-fashioned technical distinction which few people really understood between scale monopolies and complex monopolies.
In consumer protection we will have the benefit of the voice of the noble Baroness, Lady Wilcox, in due course. No doubt she will express some welcome for broadening the scope of the stop now orders, which have proved useful weapons against traders who regularly abuse consumer rights but which have so far been confined to laws deriving from the European Community and have not covered laws that are entirely domestic. In my view—and I hope that of many of your Lordships—all those changes are welcome improvements. I cannot say they are fundamental, but, sadly, it seems to need a lot of clauses and schedules to bring them about.
The changes being made in the rules on mergers, removing the role of Ministers in most cases—no doubt in Committee we shall examine the exceptions— and replacing the broad public interest test by a test based on whether or not the merger will substantially lessen competition, have been widely welcomed. It will now be for the Office of Fair Trading to decide, not the Minister on advice from the Office of Fair Trading, whether or not a merger should be referred to the Competition Commission. In practice, compared with recent years, that will not make a great deal of difference because Ministers have normally followed the advice of the Office of Fair Trading. But it will clearly reflect reality and leave no businessman in any doubt that lobbying Ministers—which has often taken place in the past—for or against a reference to the Competition Commission, or for or against the judgment of the commission, will be a waste of time.
At this point I should declare an interest, though it has been hinted at by the noble Lord, Lord Razzall. It is an interest which expired 10 years ago of being Director General of Fair Trading for many years. It will be seen why I mention that at this point.

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In the field of mergers more than in any other aspect of competition policy, swift, firm decision-making is particularly important for all concerned. It is in that context therefore that I am concerned at the changes made right at the beginning of the Bill to replace—in fact 10 abolish—the Director General of Fair Trading by a board of which he will be the chairman. If decisions to refer or not to refer mergers to the Competition Commission have to go routinely to the board, consisting in the main of part-timers and drawing on the advertisement in the Sunday Times two days ago—people normally putting in two-and-a-half days a month—I can foresee the risk of serious delays and a reduction in efficient decision-making.
I should like Ministers to reassure the House that the board of the Office of Fair Trading will not be involved in case-by-case, day-to-day decision-making with regard to mergers, cartels or market investigations, but only with strategy and broad principles. The advertisement to which I referred leaves that nicely ambiguous for the present moment.
The Competition Act, Chapter I, prohibition of cartels has been operative for just over two years. But within that relatively short period it seems to have worked well. One of the key features of it working well has been the so-called "leniency" programme whereby a whistle-blower from within the cartel may bring to light the existence of the price-fixing or market-sharing agreement, of which the Office of Fair Trading would otherwise know nothing, and the whistle-blower is able to escape the fines which would be imposed upon the other parties to the cartel.
The possibility of fines up to 10 per cent of turnover may sound like a powerful deterrent, and so perhaps it seemed to most of us at the time of the Competition Act 11998. But the key point I want to make is an obvious one. Fines only impact upon companies, not on the individual and to my mind there is a strong case, which the Government are beginning to make out in this Bill, for the criminal penalty possibly of gaol in the case of hard-core cartels to impact on those individuals who have been responsible or connived at the cartel.
Such a personal penalty, as all noble Lords will be aware, is possible in the United States. Most noble Lords again may recall the interesting sentence of a year and a day imposed not long ago on Mr Alfred Taubman, chairman of Sotheby's, in respect of a cartel agreement between what was supposedly and ostensibly rival auctioneers, Christie's and Sotheby's. The prospect of such a gaol sentence must be such a strong deterrent that the actual imposition of a gaol sentence will in practice rarely be called for.
I notice that a representative of the United States' Attorney-General's office came to a conference last month. He said:
"I have had numerous lawyers pleading with me to avoid a gaol term for their client and offering to pay any sum imaginable. I have never had anyone offering to spend another week in gaol in return for a lower fine".
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My only question to the Government is, should we not have a definition of the word "dishonestly" in the description of the new cartel offence in Clause 183? After all, this is a criminal offence. People must be entitled to know the exact ingredients of the offence.
In response to a point made by the noble Lord, Lord Razzall, I do not at present—and it will be an interesting discussion for us—have any settled view whether it would be better for the Serious Fraud Office rather than the Office of Fair Trading to have responsibility for the pursuit of a criminal investigation.
In the other place not long ago during the course of the debate in Committee on the Bill, a CBI-inspired Conservative amendment was tabled to alter the basis of a market investigation reference from the Office of Fair Trading to the Competition Commission from "reasonable suspicion" to "reasonable belief". Those of us who recall the passage of the Competition Bill four years ago may—as I did—have a sense of déjàvu on reading that. I recall the noble Lord, Lord Kingsland—he will be in his place in due course on the Bill—arguing likewise in relation to monopoly references.
To my mind, the Office of Fair Trading needs to be bold and proactive in competition matters. But, after all, it is only supposed to conduct preliminary investigations. To require it to demonstrate more than "reasonable suspicion" before it refers the question to the Competition Commission would be unduly inhibiting. It would be a "Catch 22" situation to require it to know the answer before it puts the question.
I am tempted to make Committee points. Instead I shall make what I might call a "Brightman" point. I refer to the noble and learned Lord, Lord Brightman, with, of course, proper respect. The Bill is substantial, heavy and detailed. Little of it can be understood except by reference to numerous earlier Acts, including the Fair Trading Act, the Competition Act and the Insolvency Act. Can the Government give an indication that we might look forward from this "legislation by reference"—as the noble and learned Lord, Lord Brightman, has said on many occasions of other legislation—to a comprehensive consolidation Act in this field to ease the task of businessmen, consumers and their advisers in working out their rights and duties?
Finally, I make a point which I flag up for Ministers in particular. A concern has been expressed to me by the regulator Ofgem. It deals, as your Lordships will know, with gas and electricity regulation. It believes that we should take the opportunity under Part 10 of the Bill, which deals with insolvency, to make provision for a special administrator in the event of the insolvency of a gas or an electricity network, Public safety is at risk if arrangements are not made to ensure that, in the circumstances of insolvency, the network is kept operational. In recent years the Government have made such provision in legislation for the railways and for the water industry.

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Unfortunately, the amendment, which has been shown in draft to myself and to my noble friend Lord Peston—who is unfortunately unable to be in his place today—requires seven new clauses and two new schedules. In my judgment, it is much more suitable that a government should introduce those with the aid of parliamentary draftsmen rather than for two BackBenchers to do so. If the Government will consider that, we should of course be very happy to meet with Ministers before the Committee stage and the need to table amendments.
5.5 p.m.
Lord Boardman: My Lords, I am happy to follow the noble Lord, Lord Borrie. His declaration of an interest in matters which are deeply concerned with the Bill can be distinguished from mine. I declare an interest, having been the chairman of a bank, but that was a long time ago. I express no special interest in the detail with which the noble Lord, Lord Borrie, was so familiar.
I support the Bill. Its objectives are right and ones with which most noble Lords are in agreement. There will be matters of amendment which we shall want to raise in Committee. But I hope that much of the motive for the Bill can reach the statute book with the minimum of alteration.
It is a vast Bill—three Bills. As my noble friend said, it should have been three separate Bills and it should have been considered much more carefully. It would have been appropriate for draft Bills to have been published and considered in detail by the experts before being placed before this House. The present Bill was partly considered in another place. A large part of it was put on one side by a guillotine Motion.
I wish to comment on the name of the Bill. This morning I looked up the word "enterprise" in the dictionary. It means boldness, courage and with imagination. I do not find that a good description of the Bill's objectives—insolvency, competition, consumer protection and so on. At any rate, I do not think that the restrictions that the Bill imposes on business—and there are many restrictions—make natural bedfellows with the word "enterprise".
I also refer to the costs that the Bill will incur. I know that they are relatively small against the total budget, at about £150 million, which the Government will say is nothing at all. But I wonder to what extent that question has been put into the scale. The Government have said that the costs which will fall on business are insignificant. But I believe that bureaucracy will come in as a result of the Bill. There will be people needed to look at the regulations. That will be a significant item.
Against that the Government say that the Bill will produce hundreds of millions of pounds. We shall see. But I believe that they are being unduly optimistic to think that the consequences of the Bill will produce hundreds of millions of pounds.
As I have said, the purpose of the Bill is good. It seems to be fair and reasonable. I am sure that improvements can be made in Committee. But the Bill,
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despite what I have said about it being fair and reasonable, will add to the regulation, bureaucracy and to the costs of business, which is already overburdened by regulation and bureaucracy. I regret adding to the load which business has to suffer.
The Bill may deal with internal matters, but a large part of turnover in business is foreign. We must look at where foreign competition comes in. In Europe we tend to be going a different way and with different penalties. For example, much of Europe has prison sentences available for certain offences which come under the present Bill. But I understand that prison sentences are not generally applied in Europe for those offences. I have some regrets about that. The Competition Act 1998 has been in effect for only about a year. It should have had a further run to see whether we could avoid prison sentences for breaches under that Act and the Bill. It would have been wiser to have waited, instead of effecting laws that will produce new criminals. Such penalties as heavy fines and disqualification as a director would have been adequate deterrents.
The Bill also removes Ministers' powers over competition and mergers policy. In some ways, I welcome that. We have not been happy with many decisions made by Ministers. On the other hand, we shall suffer from not being able to ask questions about decisions or being able to summon those who make decisions before Select Committees. What we gain from not having Ministers involved we lose by not being able to challenge decisions.
On the question of price fixing, I understand the benefits to consumers. But many new businesses have gained ground from being able to have a stable price as a platform from which to build. Of course, the most effective means to tackle price-fixing is competition. But to enforce competition without some form of stability, some price from which one can start, is a penalty that is difficult to invoke.
I have in mind the case of two window cleaners who operated in a village. Between them, they found that the business of the village was just about right for two and they agreed to fix a price. No doubt, that would be illegal under the Bill. A smart entrepreneur realised what was happening and decided to come to the village to undercut both, which he did successfully. That is what I call being an entrepreneur and showing enterprise. I am not sure whether two window cleaners would fall under price-fixing provisions, but the principle is the same.
Turning to the matter of insolvency, I welcome the reduction of some of the penalties for unlucky but honest bankrupts. But there is a danger of making bankruptcy an easy option. The Minister said that it would not be an easy option, but there is a danger that it will become so. It has in the United States, which has considerably relaxed its bankruptcy laws. The number of bankruptcies there has risen massively. There is an awful temptation to obtain credit with little prospect of repayment unless some speculation or gamble comes off.

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My noble friend Lady Miller referred to credit cards. These days, they are enabling young people to accumulate massive debts in the hope that something will turn up to enable them to pay them off. I am aware of one young man who managed to run up debts of £250.000. Surely it is impossible for any credit company—or series of credit companies; I think that about 20 credit card companies were involved—to allow a debt of £250,000 to be run up in that way. There is great danger unless we seriously consider that matter. Borrowing has become a habit, and the use of easy access to credit is creating a penalty that many of the young will have to face in years to come.
As I said, the United States' experience of the relaxation of bankruptcy laws is worrying. There has been a vast increase in personal bankruptcies as a result. A fear has been expressed that the Bill will lead to a 20 per cent increase in bankruptcy. That is worrying.
I welcome the release within a year from the penalties of bankruptcy for those who have not behaved badly, but I ask: what about the creditors? Awful anger is felt by a creditor who has lost his business, family fortune or whatever towards someone who has "done" him and is then declared bankrupt. It is most irritating for the poor chap whose family savings have been lost and who has ended up in hardship to see that man, within a year of being declared bankrupt, start up business again with much prosperity, as so often happens.
We should reconsider the provision for release within one year. It would be much better to leave the period at three years, with the right to apply for it to be reduced. Let people apply for a reduction from the three years to one year, so that the honest, well-meaning chap who unluckily goes bankrupt has a better chance to escape.
Overall, the provisions are reasonable. It is a fair Bill and I hope that it will secure the hoped-for improvements for business, so that business will be able to reap the benefit intended as a result.
5.17 p.m.
Baroness Maddock: My Lords, as a consumer I welcome the purpose of the Bill; as a Liberal Democrat, I obviously support of much of what my noble friend Lord Razzall said; but as someone who speaks from these Benches on housing, I do not support the corporate insolvency proposals in the Bill. As drafted, they would severely affect the ability of registered social landlords—mainly housing associations—to continue to provide affordable social housing. That is key if we are to have a flexible economy. The lack of affordable housing in the South East and London is a severe problem, as is recognised by government and others.
So, like the noble Lord, Lord Best, I especially welcomed the Minister's statement today. I am grateful to the National Housing Federation, of which I am vice-president, the Council of Mortgage Lenders and the chief executive of Western Challenge Housing Association, of which I was once a board member, for
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bringing the matter to my attention. The noble Lord, Lord Best, explained in detail how the matter rests, and I shall not repeat that, but I want to emphasise that until today, the Council of Mortgage Lenders, the National Housing Federation, the Housing Corporation and the Housing Finance Corporation had all been in touch with the Department of Trade and Industry but had not secured assurances that the Government intended to deal with the problems created by the Bill for the social housing sector.
All that they and I had heard was that the Government had undertaken to conduct consultation on whether to deal with the matter in secondary legislation. That would have been far too late. Lenders would have been able to impose floating charges the minute the Bill was enacted. By the end of the consultation period, the damage could already have been done.
To my knowledge, this is the third time that the issue has been raised in legislation. The first time that I was involved, we were considering the 1996 Housing Bill. I served on the Standing Committee in another place. That Bill contained a similar proposal; namely, that a housing corporation manager should have administration-like powers to deal with any registered social landlord in financial difficulty. I criticised that severely at the time—there was extensive lobbying, as there was today—as did Nick Raynsford, now a Minister in another place, then the Opposition spokesman on housing. I am pleased to say that that provision is not in the Housing Act 1996.
Nevertheless, in 1998, the Treasury and friendly societies issued a consultation paper that asked whether it would be appropriate to extend company insolvency procedures to registered social landlords and to industrial and provident societies. The answer from the National Housing Federation, the Council of Mortgage Lenders, a number of registered social landlords and a number of law firms was a resounding "No", and the suggestion was withdrawn. So, like the organisations referred to, I was at a loss as to why the Government had put the proposal forward yet again.
It is particularly important that we recognise the problems with house building in this country. The new Housing Minister, the noble Lord, Lord Rooker, has described chronically low house-building rates as a national disgrace. We know that new statistics on replacement levels for housing in Britain show that houses standing today would have to last for 1,500 years. Last year, we built 162,000 homes; the year before, we built 169,000. This year's figure represents the lowest number of houses completed in this country for 77 years. It is also the lowest in the European Union. That is why the situation is so serious. If the relevant parts of the Bill were enacted, it would be even more serious, as the damage would be concentrated in the affordable housing sector.
I welcome the Minister's opening comments. I shall examine carefully the amendments proposed in Committee. However, I must say to the Government that I do not want to stand here again in two years' time raising the same issue.
5.22 p.m.
Viscount Astor: My Lords, this is a large, complex Bill with mammoth schedules, but I hope to be brief in my remarks and concentrate on one area— competition policy and, in particular, the effect of the Bill on the workings of the Office of Fair Trading. I have been involved with the broadcasting industry and, in particular, digital television. One of the main reasons that digital television has so far failed is the failure of the regulators, in particular the OFT, the Independent Television Commission, the Radiocommunications Agency and the board of governors at the BBC. However, I shall concentrate on the OFT and leave the others for another day.
In the case of the OFT, it was the length of time that the regulator took to make a decision that was so damaging. That does not help either side. The OFT has a duty to protect business from unfair competition, as, ultimately, it is the consumer who will suffer. Unnecessary delay is damaging for industry and damaging for the consumer. Fair competition is about benefiting the consumer. Delays are enormously disruptive to business and undermine the ability of business to operate. In the media in particular, the value of many companies' assets has exploded in recent years, only to implode later. Some companies—and, indeed, government—became obsessed with technical achievement without understanding whether it had a sound commercial application and whether there was consumer need and demand.
I believe in competition law, but it must work not only effectively but quickly. In broadcasting, the OFT has been reviewing the situation of BskyB for two and a half years. The original complaint by ITV Digital and others was that Sky was charging too high a wholesale price for its premium sports and movie channels to television and other distributors. I shall not go into the merits or otherwise of the case or comment on what the outcome should be. However, I want the Minister to consider the length of time that the OFT took to consider the issues. That was not fair to either side. It is not just one case. In September 2000, Sky and NTL reached an agreement on distribution by cable. That required OFT approval, but it took over a year for the OFT to make the courageous decision not to make a decision. One wonders how long it would have taken them to make a decision.
I have general and specific questions for the Minister. In paragraph (7) of Schedules 5 and 6 to the Competition Act 1998, there are powers for companies to seek direction from the courts to ensure that the director general of the Office of Fair Trading reaches decisions without undue delay. Yet those provisions have not been brought into force. Can the Minister explain why not? I should be grateful if he would write if he cannot answer me today. Can the Minister say whether the Government think that the provisions are still needed? Will they be made redundant by clauses in this Bill? Does the Minister understand the concern about the delays? Will he explain how the powers in this Bill and the proposed changes to the OFT will help to speed up the process?
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The Bill will give new powers to the OFT to investigate markets and identify anti-competitive practices. We know that that can be a huge task, which often involves great expense to those in business—guilty or innocent—who get swept up in the net. What safeguards will there be to prevent the new powers from being used to drag out investigations for years? How will the OFT operate alongside the proposed new regulator, Ofcom? The Government made it clear that the best placed regulator would investigate alleged abuses and said that, in most cases, that would mean Ofcom.
The Competition Act 1998 makes it clear that only one body can use competition powers to investigate alleged abuses, so as to avoid double jeopardy. However, there is still a risk that Ofcom might use its regulatory powers to investigate supposed anticompetitive behaviour, with the OFT following up using its competition powers. How will the Government stop that double jeopardy? Do the Government consider that it will not be a problem? Concurrency between the two will not apply to mergers. The OFT will be solely responsible. Like other noble Lords, I welcome the decision by the Government to remove Ministers from the decision-making process concerned with the clearance of mergers. However, the Government should have waited before revisiting many aspects of the Competition Act 1998. After all, it has been in force for only a couple of years.
Like the curate's egg, the Bill is good in parts. However, it will place costs and burdens on business. There must be some limit on how the new powers will be exercised and how costs will be dealt with. We are all against cartels, but we must support enterprise. Can the Minister confirm that the OFT will be under a duty to act in a proportionate, transparent, accountable and timely manner? After all, those are the principles of the Government's Better Regulation Task Force. Should not those principles be set out clearly in Clause 1?
5.28 p.m.
Lord Haskel: My Lords, I thank my noble friend for explaining the Bill. We will all benefit from a more competitive economy, which will put downward pressure on prices. I welcome the intention to encourage a more enterprising economy.
I also congratulate my noble friend on the timing of the introduction of the Bill into your Lordships' House. Recent events have made our Second Reading extremely topical. The recent financial scandals in the United States have shaken people's confidence in the business world. Such fraud and dishonesty undermines our confidence and trust in business. As the Minister explained, the Bill is designed to deter and punish dishonesty. In those circumstances, the Bill is especially welcome.
The blow to our confidence in business not only raises concerns about pension schemes, savings and investments but questions the productivity gains achieved in the United States by the so-called new

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economy. The Bill borrows heavily from the experience of regulation in the United States to raise productivity. I am reliably informed that, fortunately, much of the US productivity data comes from surveys and not from company accounts. I hope that we can be reassured by that.
The troubles in the United States are all to do with share price—share price as a symbol of shareholder value. This concern has been raised several times in this House. During a debate on corporate regulation—on a Motion moved by my noble friend Lord Brennan in March—we discussed how regulation alone would not be sufficient to discourage corporate excess, and how business leadership must also provide lasting moral values. It is difficult to legislate in this area. However, we must continue to bear it in mind during our debates on the Bill.
Nevertheless, we have to keep the faith and retain our confidence in the market system. It is the pressure of competition and the greater uncertainties of the global economy that contribute to such failures. Because the Bill is about making markets work better, it is to be welcomed at this difficult time. The invisible hand of the markets is preferable to the long arm of government and regulation.
Setting these concerns aside for a moment, the Bill must be judged in the way in which we have judged business legislation since Labour came to power in 1997. Does the Bill deliver fairness with enterprise? Will the legislation stifle creativity and will it be unfair to the consumer? That is the basis on which we should judge it.
It is a big Bill. It touches many key areas of business life. Ii encourages competition, provides stiff personal penalties for operating cartels. It provides the rights for injured consumers to claim heavy damages. It addresses failure by categorising responsible and irresponsible bankrupts.
I do not share the conclusions of the noble Lord, Lord Razzall, and others. It is possible to personalise business too much. Good businesses work well because they are successful organisations, made up of customers, suppliers and employees. No one controls all the areas. It is wrong to hold good people responsible for failures and mistakes by others outside their control. Of course we need to look carefully at how the authorities will differentiate between worthy and unworthy bankrupts, but the fast-track bankruptcy approach is a move in the right direction.
The Bill also takes the politics out of competition and merger decisions and bases such decisions on economics. A public interest consideration can be slipped in—a matter that needs examination. I look forward to my noble friend's reply to the questions put by the noble Baroness, Lady Miller. Based on the experience of taking the politics out of interest rates, this approach is greatly to be welcomed.
All this means that the Bill places more work and responsibility on the shoulders of the Office of Fair Trading. It goes into considerable detail about the work of the OFT. So it must be asked whether the OFT will be able to do the job. It is, after all, responsible for
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the application of the Competition Act 1998, and only now are the provisions of that Act beginning to bed down. The Minister told us that the Office of Fair Trading was investigating 40 cartels, and the Financial Times recently reported that it was uncovering one new cartel a month. Investigating a cartel is much more complicated and difficult than simply looking at an agreement. As I understand it, the Government have increased the budget of the OFT, but it is the quality of the people there that really matters. Recruiting better people is the key. The presence of more competent people is the real deterrent. In reality, we cannot expect the OFT to uncover every cartel. Its purpose is also to deter. Therefore, pay and career prospects at the OFT are crucial.
We must ask whether the Bill will make companies unduly cautious. After all, many mergers are initially based on an arrangement for sharing out customers. But this never lasts for long unless it is artificially maintained, and that is what the OFT must concentrate on deterring. This must be taken into consideration together with the other steps in the Bill to encourage enterprise. Abolishing the Crown's preference rights and the lenient attitude towards the not dishonest bankrupt will, I believe, encourage enterprise, and I welcome these provisions. On balance, I do not think that the Bill will lead to excessive caution. It may well just mean bigger fees for lawyers.
As well as encouraging enterprise, does the Bill encourage fairness towards the consume? I believe it does. As Adam Smith pointed out, competition forces manufacturers to respond to the consumer's preferences, and in a competitive economy the benefits of great efficiency go to the consumer. The Bill allows the OFT to use fines to compensate consumers and ensures that fewer companies will fail unnecessarily. Indeed, the consumer will now have representation on the board of the OFT. Professional services will be included in the Bill. More competition in professional services is bound to help the consumer. Looking after the consumer contributes to a fairer society and I welcome that aspect of the Bill.
Shall we have to pay for these benefits with more tiresome red tape? The noble Lord, Lord Boardman, believes that we shall. Of course, one person's regulatory red tape is another person's protection. The Office of Fair Trading can approve voluntary, independent codes of practice by various industries or groups of companies, and in this way it should be able to avoid some red tape. The invisible hand of the market requires less red tape than the long arm of government. The OFT will have to produce an annual regulatory impact assessment so that each year the red tape will be under review. On balance, that will help to keep red tape to a minimum.
I return to the fraud and dishonesty to which I referred at the beginning of my remarks. It see ms to me that recent events have shaken our confidence in accountants, analysts, businessmen and bankers—in the very people needed to carry out the spirit of the Bill. That means that there are now others to whom we must look in the commercial front line and on whom

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we shall have to rely more. Trading standards officers immediately come to mind. I agree with my noble friend the Minister; they are going to have to be more alert than ever. Although they are employees of local authorities, I hope that my noble friend will encourage local authorities to raise their number and standard of training, as well as increasing their budget.
Whistle-blowers, too, become more important—a point referred to by my noble friend Lord Borrie. In 1998, he steered through the Public Interest Disclosure Act to protect whistle-blowers. With our confidence in their bosses somewhat shaken, perhaps we should be encouraging whistle-blowers to be rewarded with promotion rather than with the sack. The Enron and WorldCom frauds were exposed by whistle-blowers— incidentally, both of them women. So obviously whistle-blowers can be an effective way of detecting illegal commercial arrangements and apparently dubious accounting. Perhaps in the Bill the Minister should be paying more attention to encouraging and legitimising them.
Another ally in maintaining high standards is corporate governance. I know that my noble friend's department is looking at this matter, but surely recent events in the United States push this further up the agenda. I realise the difficulties of policing ethics, but higher standards of corporate governance go together with deterring fraud and dishonesty. I wonder whether in some way this could become part of the Bill.
In conclusion, like many other noble Lords, I welcome the Bill. I believe that together with an encouraging nod towards trading standards officers, whistle-blowers and higher standards of corporate governance, it will contribute towards a more enterprising economy and a fairer and better society.
5.40 p.m.
Lord Phillips of Sudbury: My Lords, I, too, welcome the Bill, but with less acclamation than other noble Lords. In view of the somewhat critical nature of my remarks, I should perhaps explain that I am not some blue-sky idealist about business. I have been in it all my life, having started my own business 32 years ago, which employs 100 people and goes along merrily. I sit on a number of boards as a non-executive director, which is a dangerous thing to do these days, but I thought that I should clear the decks.
It is interesting and worth mentioning en passant that only one right reverend Prelate is in his place for this debate, which says something about the way in which business has somehow retreated into a little world of its own. That strange isolation of business from life at large, or the apartheid between Monday to Friday and Saturday and Sunday is accepted by the Church itself. A great deal of social and cultural disadvantage flows from that separation.
It is ironic that the Bill is a good deal longer than the New Testament—I do not think that it is quite as good a read, or as wise. It is also worth noting the paucity of Peers sitting on the Government Benches. I wonder whether that has something to do with the fact that 20
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years ago such a Bill would have been viewed as an impossibly Thatcherite imposition at a time when those now in government were worshipping nationalisation and Clause 4 as much as they apparently now worship untrammelled free-market forces. It is all very confusing to a simple country boy.
The timing of the Bill is unlucky, as immediately preceding it we have had Enron, Arthur Andersen, Tyco, Worldcom, Merrill Lynch and now looming in the United States a series of earth-shattering litigation around laddering or initial public offerings. The first of these lawsuits, eToy v Goldman Sachs, is expected to reveal an appalling state of conspiracy by those introducing initial offerings, whereby for certainty and by contract, they cream off huge capital gains at the start of those offerings at the expense of the market and the public at large.
My first, and perhaps most important point, is to ask whether it is safe to examine the Bill on the basis of its own separate ideology. In my marriage service, I was subject to the Book of Common Prayer, which talked about marriage being "enterprised". There is not much sense of enterprise these days beyond the narrow confines of business. The Enterprise Bill refers to the Office of Fair Trading, and I wonder how rich and diverse a meaning the Bill will allow to the word "fair"—very little, I suspect. I strongly oppose eliminating the role of Ministers from the various parts of the Bill from which they have been extracted—the issue of mergers is one example.
As has already been said, the Bill is a charter for lawyers and accountants. They have largely driven it and will be the main and only certain beneficiaries of it. Indeed, big business will be a beneficiary as only big business can afford the lawyers and accountants to cope with it. That is not a trite point. The ever-increasing regulation of business represents an anticompetitive element in business life. Small and medium-sized businesses cannot get near the sort of advice necessary to understand the Aladdin's cave of complexity.
The Bill flies in the face of experience. I should have thought that we were past believing that the ills in the world of free-market capitalism can be contended with solely and simply by the passage of more and more complex laws. I am sure that I need not remind the House that two of the most crucial provisions in the whole of the already massive and ramshackle array of protections for citizens against fraudulent and dishonest trading are honoured in the breach. When did we last hear of a prosecution for insider trading, which is rampant? How often have there been prosecutions for trading while insolvent? That, too, is rampant.
Limited liability has become a scandal. We may not be touched by it, but ordinary people suffer from the regular and shameful ignoring of the provisions of limited liability in small companies. Tens of thousands of small companies go bust every month of every year. How many directors are ever called to account in the civil let alone criminal courts? I am completely unimpressed by the panoply of new powers. I should

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be much more inclined to listen to the Government if the very basic protections in business were upheld. I repeat that they are not. Perhaps the Minister will tell us when he winds up how many prosecutions have been brought for insider trading or under limited liability provisions. I am sure that we would be shocked by the figures.
Any reference to the construct of limited liability is absent from the Bill. It is a man-made privilege par excellence. The assumption is that it is an irremovable, untouchable part of the edifice of success and affluence in commerce today. If we were doing our job properly, we would undertake a major investigation into the way in which limited liability works—for ill as well as good. We all know about its beneficial effects, but a consequence has been the growth in giant companies. Without limited liability there would not be massive, multinational companies. I believe that many of the failings with which we are all contending have to do with scale. There is a breakdown of internal cohesion or culture and a lack of individual philosophy or morals in containing or constraining the activities of such corporations, of which there are many current examples.
I shall say a word about the role of non-economic considerations in some of the matters with which we are dealing. The attempt to separate economic and political issues is a farce—as much of a farce as the Government repeatedly saying that entry to the euro is a purely economic issue. They say that there are five economic tests, as if there were no non-economic considerations or consequences of entry. That separation is just as futile in the Bill.
I have no confidence in the ability of a few accountants, however well read or well bred to deal with the non-economic consequences of the matters covered by the Bill. What do I mean by non-economic consequences? We all know that free-market economics is rather like the Ritz. The equality of choice and purchasing power in the marketplace, which are upheld as two of the great aims of the Bill, are as long or as strong as the size of the purse of the person concerned. If one has no money, one has no protection. When the Bill is passed, market regulators need have no regard to issues of social divisiveness and basic social need. That makes the removal of the public interest element more than dangerous. It makes it foolhardy.
What about the role of village shops in our society? Everyone agrees that they are far more than merely economic entities. What about cultural goods? Shortly we shall consider the communications Bill. What about pornography? There is Mr Desmond's recent take-over and the fact that the Government said that they could not intervene, even under the present law. I believe that those are all examples of the need for the public interest, broadly defined, to have a role in considering, for example, mergers and take-overs.
I shall touch briefly on one or two further points. The provision of information arrangements under Clause 6 could so easily be propagandist. They speak only of informing the public about the benefits of
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competition. I believe that an excess of competition is antisocial. One cannot unleash uncontrolled aggression, uncontrolled greed, uncontrolled insatiability as a stimulant to market and competitive effectiveness and not expect it to infect the rest of our body politic and our body social. It is one of those strange misunderstandings that bedevils us. Therefore, I hope that provision of information to the public, as it is called, will be balanced by information on social responsibility, on the ethics of business and on others matters.
5.51 p.m.
Baroness Wilcox: My Lords, there is much to welcome in the Bill. Many of the proposed reforms to consumer protection and to the competition regime are particularly welcome, although, as has been expressed already, to seek legislation so soon after the 1998 Competition Act shows a depressing lack of foresight. However, we are where we are. I declare an interest as president of the National Consumer Federation and president of the Trading Standards Institute.
The noble Lord, Lord Borrie, is right to say that generally I welcome the broadening of the scope of the stop now orders. I am heartened to hear of the associated funding of which the Minister spoke and I support the comments of the noble Lord, Lord Haskel, regarding the new burdens on the service.
I am sorry that I cannot agree with the noble Lord, Lord Borrie, that a strategy board to support the Director General of Fair Trading is a bad idea. In my view, if it sticks to its intended brief, it should be an asset.
I support many of the provisions that set out to deal with a number of very significant matters in the pursuit of maintaining a fair trading environment and the promotion of a competitive market economy. Powers to outlaw rogue trading practices are vital to honest traders and to maintain consumer confidence. The ability to deal with such matters will be a key test of the Bill's effectiveness.
Of particular interest, therefore, is the Bill's stated objective of amending the law relating to the protection of the collective interests of consumers—a praiseworthy objective. So it is disappointing to note that the Bill does not seek to address a significant anomaly in the Trade Descriptions Act 1968, which has been the cause of consumer detriment since that Act came into force.
The matter to which I refer concerns the requirement to prove mens rea—guilty knowledge—in order to establish an offence in relation to mis-described services. As the Minister knows well, that Act forms the backbone of consumer protection legislation in the United Kingdom and establishes the most fundamental principles for the development of legitimate and fair practice in business dealings between traders and the public. Perhaps the most significant sections of the Act are Sections 1 and 14. Section 1 prohibits false trade descriptions in relation to goods and Section 14 deals with false statements

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made in connection with services. Section 1 does not require proof of guilty knowledge, whereas Section 14 does. The two sections of the Act are clearly inconsistent. Gathering evidence to prove mens rea is fraught with difficulty and causes significant problems for those who are tasked with enforcement.
The consumer does not readily distinguish between statements made in relation to goods and statements made in relation to the provision of services. It is as easy to be misled by one as by the other. Indeed, in an economy such as ours, which relies more and more heavily on service industries, it becomes increasingly important that appropriate sanctions are in place to deal with occasions when consumers are taken in by false statements relating to the services that they buy. Furthermore, services and goods are increasingly available for purchase remotely and electronically, so the importance of accurate descriptions is paramount. Members of the public are frequently at a loss to comprehend the reasons why the protection offered in law differs depending upon whether they are purchasing goods or services.
The 1976 review of the Trade Descriptions Act, conducted by the then Director General of Fair Trading—it could not possibly have been the noble Lord, Lord Borrie, in those far off days—reported on those deficiencies in the Act and recommended that changes were introduced to align the two sections. More recently, the DTI consumer White Paper, Modern Market: Confident Consumers, gave an indication that that was the way the Government were going. But is it?
The Enterprise Bill presents Her Majesty's Government with an ideal opportunity to address this important and relevant issue. I shall listen carefully to the Minister when he responds to my concern in this area. I believe that the Government's intentions are good, but I hope that the raft of new ideas will not distract them from putting right the underlying law which remains unsatisfactory.
5.56 p.m.
Lord Brennan: My Lords, the Bill is notable, not only because of its volumetric contribution to our law, but also because of the quality of some of its proposals. I shall praise and question some of those proposals.
First, I strongly welcome the role that the Bill gives not only to the interests of consumers, but also to organisations that exist to protect those interests. The idea of super-complaints—an inelegant word—is welcome. They can be brought by such organisations in the interests of consumers.
It will be extremely important that the designation of organisations that can so protect consumers, and the regulations and systems through which they can seek to protect the consumers are kept simple and as far as possible within the means of what are likely to be non-profit-making organisations.
I particularly welcome the 90-day response by the Office of Fair Trading. As I read the Bill, that department must respond with a decision to act, or not
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to act, with reasons, within 90 days, with no backsliding. The Bill is mandatory. That should produce an ethos of consumer protection different from that which we have experienced in the past. In addition to those enforcement measures, for consumers there is the important function of the OFT in promoting good consumer practice and the investigation and, where necessary, advice to be given on codes of good practice. Those are welcome changes.
I move to the second of my two points of welcome, which is to note the powers and the structure of the competition appeal tribunal. I hope that many disputes will be resolved without the need for reference to that tribunal. However, it is essential that the tribunal is not constituted with the same degree of formality, delay and control by lawyers that is the usual litigious process in this country. The tribunal should work as well informally as formally, seeking to mediate between competing interests to achieve quick and effective results—especially when it has to deal with consumer protection.
It is of concern that the disclosure provisions of a Bill that promotes enterprise and seeks to make it a major part of corporate and market activity are so restrictive. The Secretary of State can exclude from published documentation that which he or she considers to be inappropriate, which is a loose control. If transparency is to be encouraged, the public will want to know why action has or has not been taken. When we examine Clause 240 in Committee, it will be extremely interesting to know why material can be kept confidential from the public where the authority thinks that publication "might"—not will or be likely to—adversely affect a commercial interest. That is overprotecting the corporate system. If competition is to be promoted and rules enforced where they are abused, the public will expect to know the whole truth.
I find to my dismay as a professional man that Parliament is about to consider again legislation in which the phrase "a business" includes a professional practice. I have no hesitation pursuing my practice in a businesslike fashion but I hesitate to describe my profession as a business. My clients would feel concern if they thought that my primary motivation in giving advice and representation was making profit rather than serving them and the community.
How do my noble friends on the Front Bench envisage that part of the Bill being used towards professions? Any decent profession requires its members to be properly educated, observe decent ethics and serve the public well. That costs money. People have to contribute to their profession and must charge fees that embrace those costs. Are we to place a premium on mediocrity and conclude that people who are less educated and less ethical but cheaper should be favoured in competition practice? I think not. I hope that the definition of market concerns in Clause 126 will not subjugate professional standards to the level of mere profiteering.
This is the first legislation of its kind that can be said to be a pure competition Act. Public interest does not figure in clear terms as it has in the past, although

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under various chapters the Secretary of State will have special powers to refer where certain public interest matters may be affected. I ask rhetorically, if this needs further thought by my Front Bench colleagues, what role will public interest play in the enforcement of competition under Clause 126? Will pure market-force economics or some extraneous factors play their part in determining enforcement of competition laws that in fact go against the public interest? One can well imagine circumstances in which they might. A small sector of society providing a significant public service that does not have a substantial asset base but exists on its income may charge for its goods or services at a rate that preserves its existence, yet serves the public interest. I would be adverse to such a case resulting in the institution concerned, be it private or professional, finding that its standards and services were to be reduced at the altar of competition.
The word "competition" simply embraces an economic concept. It has no greater theological significance—as one sometimes imagines, talking to proponents of competition in Brussels. I am sure that our Ministry has its feet on the ground. This is a competition. Bill named the Enterprise Bill. I hope that its content will not become a vehicle for frustrating competition, nor for damaging matters that are properly pursued in the public interest.
I hope for reassurance that the Office of Fair Trading, with so many vitally important public objectives to achieve, will be fully financed in its ability to achieve them and will not fall down—especially when protecting consumers because of inadequate resources. Subject to all those matters, I welcome the Bill.
6.7 p.m.
Lord Hodgson of Astley Abbotts: My Lords, it is not so much the weight and length of the Bill that concerns me—though it is long and weighty enough—but its unintelligibility as a stand-alone document. It is all very well for parliamentary draftsmen to flick between different Acts of Parliament but when the Bill is enacted it will have practical implications for large and small businesses. We owe it to our fellow citizens to make legislation as comprehensible and intelligible as possible. I hope that the Government will find time for some consolidation, so that business people throughout the country who have to live with the Bill's consequences will be able to learn all its implications in one place.
There are clearly some welcome aspects, such as the plan to insulate the competition authority from political interference. It is not just that the judgments of politicians about business matters can be fallible. More important, different Secretaries of State can reach different conclusions about the same subject. Business needs above all a stable framework. Given that the average term of office of a Secretary of State is less than a couple of years, stability has been lacking in the present arrangements.
I wonder whether Members of another place have realised some of the proposal's implications. Presumably a delegation to a Minister to lobby against
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a takeover will become a thing of the past. If it does not, a critical element of the proposals will have been undermined. I hope that we are given the chance to explore in Committee how the authority's independence will be buttressed against everyday political pressures. The structure, make-up and terms of the new authority will be critical—as will Government thinking on the nature of the competition test lying behind Clause 21 and on the special public interest test in Clause 51.
One of the most useful aspects of the present regime is the ability of a firm seeking to engage in a takeover to approach the OFT for confidential guidance as to the acceptability of the course on which it is about to embark. It can prevent a huge diversion and waste of resources for both the bidding and the target companies. I hope that the: Minister will be able to say something of the Government's thinking on this matter.
Secondly, on the review of personal bankruptcy, as the White Paper points out, bankruptcy is for most people an appalling personal tragedy, not just in financial terms although that is bad enough hut, more importantly, in the loss of self confidence and self esteem. As a country we need to encourage risk takers, people who will put their financial assets including their house on the line and go through the sweaty days and nights of building up a business.
Therefore, I understand and welcome the attempts to distinguish between "good" and "bad" bankrupts. But as many noble Lords have pointed out, it is distinguishing one from the other that is so difficult. I am not sure that the provisions in the Bill do that well enough. It may be unpleasant to say this but we need to remember always that every bankruptcy—good, bad or indifferent—represents a loss to the creditors who very often are themselves small and vulnerable businesses. The relevant clauses will need careful consideration in Committee.
Reference is made in the White Paper to the Company Directors Disqualification Act 1986 as providing a mechanism or procedure for distinguishing "good" from "bad" bankrupts. From my experience—I hasten to add that it is not direct experience—the legislation has not been satisfactory except in the most obvious cases. Often it is operated by people with no real experience of business and appearing to have quotas to fill in each financial year. I do not believe that that is a happy example. I hope that the Minister is aware of the concerns among insolvency practitioners about weaknesses in structure and technical detail in this section of the Bill. No doubt we can revert to that in Committee.
On the abolition of Crown preference, while that obviously increases the fairness and equality among creditors and must be welcomed, I fear that it may have the opposite result from that which so many have anticipated. Crown preference really only impacts once the firm or individual has gone into receivership or bankruptcy. It impacts at the expense of the other creditors. But it is what happens before receivership that is equally important. The Inland Revenue and

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Customs and Excise are notoriously hard-nosed and unsympathetic to a struggling business. But from time to time they can be persuaded to help by delaying a demand for payment in the way that other trade creditors are prepared or forced to do.
I suspect that they do so safe in the knowledge that the existing Crown preference will safeguard them. If it is withdrawn, they may have no reason not to enforce their position to the day, the letter and the penny. Therefore, to make the change of real impact the Government need to find a way to encourage a fresh attitude by the Inland Revenue and Customs and Excise to struggling businesses which are taking risks. I wish the Minister well in that task.
Perhaps I may raise a number of issues on the philosophy underlying the Bill. As the noble Lord, Lord Phillips of Sudbury, said, this is a misnamed Bill. It is not an enterprise Bill. It is a regulation of competition Bill. It is a consumer Bill. It is an insolvency Bill. One of the three White Papers is entitled, Productivity and Enterprise: A World Class Competition Regime. This Bill will probably not harm productivity although it will represent another series of bricks in the regulatory burden borne by firms. But it will not do much to enhance it either. This country has a lamentable productivity record. The supply side reforms introduced by my noble friend Lady Thatcher may have had a beneficial impact, but we are now back on the familiar path. In the 12 months ending in the fourth quarter of 2001 output per job went up 0·8 per cent; unit wage costs went up 3·3 per cent. Why is that? We do not invest enough. We do not manage our enterprises well enough. We have a hideously complex tax system, as my noble friend Lord Saatchi said earlier; and we have a burden of regulation originating here but also consisting of Brussels' regulations which have been gold-plated in Whitehall. Despite the Bill's alluring title, nothing will tackle these fundamental underlying problems in any way.
Secondly, it is not clear to me how the Government will reconcile their wish to see the emergence of world class and world-leading companies based in the UK with their desire to preserve and enhance competition. The UK is a small market. To build a company within the UK strong enough to take on European and world competitors will almost certainly require a degree of dominance of the UK market at odds with the provisions of Clause 126. Let us take as an example an emerging industry, the biotechnology industry, which will be almost certainly at the leading edge of innovation and productivity over the next 25 years and which offers a richness of opportunity to mankind. Currently only 10 per cent of UK biotechnology companies have more than 50 employees. To undertake the necessary research and development these companies will need scale and in a market the size of the UK that means market dominance. What will the OFT say about that?
When the Minister replies, it is no good his praying in aid the US example as his colleagues the Chancellor of the Exchequer and the Secretary of State for Trade and Industry are inclined to do. It is a false
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comparison. The US is a market of 220 million with a GNP 10 times the size of ours. Their market can accommodate a range of specialist companies. I am not clear that ours can do so. The implications of Clause 21(2)(b) will need careful probing in Committee.
Finally, on this section there is the issue of whether the Bill brings us closer to or further away from practices on the continent of Europe. The noble Lord, Lord Razzall, raised the point in his opening remarks. There seems to be a dispute as to whether criminalisation of cartels is in line with continental Europe. What seems clear is that this will give us a competition regime which is as far-reaching on each count as every European country and, taken overall, is more stringent than any. That in turn raises issues about level playing fields in the UK's competitive position. We struggle with the implications of the prospectus directive— drawn up with the requirements of the weaker financially regulated EU member states—which, with its one size fits all, will greatly impede the access to public capital for smaller companies in the UK. Think, my Lords, about the productivity implications of that.
Meanwhile the German Government have been able successfully to stall the Takeover Directive so that the German industry continues with its old practices of poison pills, unequal voting rights and other devices which afford artificial protection to German management and deprive German shareholders of what is rightfully theirs. That is clearly an anti-competitive position.
Finally, there is the issue of resources. The Minister was keen to trumpet the advantages of criminalisation. But I am sure he will remember—I am no lawyer—that this will change the burden of proof from the balance of probabilities to beyond reasonable doubt. Reaching this standard of proof will be far from easy. The difficulties of getting convictions under the insider dealing rules, when those were criminal, come to mind. So does the poor conviction record obtained by the Serious Fraud Office.
The Government may find that they have aroused public expectations which they cannot subsequently fulfil. Most importantly, if attempts are made to obtain convictions and they fail, there is a danger that the legislation will fall into disrepute. The Government will need, therefore, to ensure the adequacy of legal resources and support to make that happen.
I make one point about consumers. I support the Government's attempt to afford greater protection and redress against rogue traders. But I am disappointed that there appears to be no effort in the Bill to deal with consumer fraud and malpractice arising from bases overseas. It is an increasingly important and difficult matter. I give a simple example. Noble Lords will have received through the post letters from the Netherlands. They look very official. They are content-security sealed, with tamperproof alert. When opened, they contain a facsimile cheque informing you that you have won the princely sum of £361,681. The catch is that in order to get it you have to send £26 transfer fee. That is fantasy.

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However, people are not mailing these just for their health. They are mailing them because they are getting £26 over and over again. It is the most gullible and vulnerable members of society that respond to those sort of entreaties. As a matter of urgency, if the Government are serious about protecting consumers they need to find a way to tackle this.
To conclude, I find parts of the Bill which are worth while, parts which are inoffensive but unnecessary, and parts which are seriously flawed. There is much work to do in Committee and I hope that the Government will approach that stage with an open mind.
6.21 p.m.
Lord Sharman: My Lords, it falls to me to wind up this debate from these Benches. I can do no better than to begin by echoing the remarks of my noble friend Lord Razzall about the clarity of the Minister's introduction to the Bill.
As many Members of your Lordships' House have said, it is a long and complex Bill. Generally, on these Benches, we welcome it. The objectives are highly laudable. Who could question the need for higher productivity? Who would question a desire for a better enterprise culture? However, it is a compendium Bill—others have referred to its title. It is a mixture of measures. I do not believe that what we call the Bill matters, although others may. What is in it and whether it will achieve those laudable objectives is the key issue.
The Minister mentioned in his introduction that the Bill has widespread support. That is true. As my noble friend Lord Razzall mentioned, we have had briefings on this from many and varied organisations. They use phrases like "support in the round" or "generally support". I hope that the Minister has not taken too much comfort from those words in the sense that there is much that we shall need to deal with in Committee.
I should also make it clear that we welcome the removal of political direction from the Office of Fair Trading. We supported it in another place and we support it here. However, that does not mean that we shall modify in any way our concern about what we perceive to be the lack of parliamentary accountability of the hugely powerful new quango that is being created by the Bill.
In Committee we want to explore whether we can find a way of exercising appropriate parliamentary scrutiny—whether that is through a joint Lords and Commons Select Committee; whether it is through the DTI Select Committee approving membership of the boards; whether it is through reports to Parliament to justify specific decisions; or whether it would be better to impose a public interest mandate, in addition to the body's other responsibilities, to which other Members of your Lordships' House have already referred.
In general, we welcome the provisions for competition policy reform, which represent a valuable and useful step forward. My noble friend Lord Razzall referred to a number of our concerns in this area. In terms of the review of decisions, we shall want to
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explore whether it is sensible to have an extension where any aggrieved party can apply for what is essentially a judicial review. I am concerned that the provisions leave far too open the decisions on mergers. Other noble Lords have referred to the need for certainty in business. It seems to go through a whole investigation, to come to a conclusion and then to say that another three months must pass before anyone, on any grounds, can ask for a review. That will create too much uncertainty.
Many noble Lords have commented on the issue of cartel offences. I share the concern of the noble Lord, Lord Borrie, about the definition of dishonesty. I believe that a definition appears in the Bill for the first time—to do something dishonestly. It worries me and we shall need to define it carefully. I worry also that the criminalisation of cartel offences in this country will catch only the small fry. I want to be assured that we shall also catch some much bigger fish. It would be a terrible shame if we ended up with the window cleaners of the noble Lord, Lord Boardman, inside, and the big fish operating under only civil penalties in Europe. We should look at that carefully.
My noble friend Lord Razzall raised the issue of whether the investigation of offences should be the remit of the Serious Fraud Office or, as is contemplated by the Bill, the Office of Fair Trading. The noble Lord, Lord Borrie, said that he had an open mind, based on his vast experience in the field. From my perspective, we are dealing with an investigation which it is hoped will lead to a criminal conviction. That requires forensic skills. Those seem to be more readily present in the SFO than in the OFT— unless the OFT is going to be equipped with new skills. We would do well to examine that in Committee.
On competition reform, we should look at the use of surveillance powers in some depth. I am not yet in a position to agree that powers introduced originally to combat serious crime and terrorism are appropriate for a competition authority. That should be looked at very carefully.
Finally, a small point. The issue of disqualification on the grounds of competition offences is very widely drawn in the Bill. If we are about encouraging enterprise and bringing back entrepreneurs into an entrepreneurial stage, we would do well to look there again. It seems that an offence of any nature in competition could lead to disqualification. We should look at that carefully.
As regards the issue of insolvency reform, it is notable that in that part of the Bill we have had more briefing from more and varied organisations than on any other issue. At the core of our concerns here is the differentiation between preserving business or dealing more fairly with business bankruptcy, and preserving the company in the case of corporate, or distinguishing between consumer—if I can use that phrase—bankruptcies, in the case of the individual.
I feel strongly that preserving the business in the case of a corporate insolvency is more important than preserving the company. I shall not repeat the remarks of my noble friend Lord Razzall in the example of how

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one can structure the preservation of a company at the expense of business and employment. However, at the core that is the key, and it is an important issue.
I echo the words of a number of noble Lords that the time scales—certainly on the corporate insolvencies—are not realistic. We need to look at those again and think about extending them. It is hoped that many will be completed sooner than the limit, but a limit that is sensible and viable is needed.
I mentioned the issues on personal bankruptcy and the distinction between personal and business bankruptcy. I believe that saving the business and helping that person back into business is more important than helping people who might want to manage their debt in a different way. That leads to the issue of the unfortunate versus the reckless bankrupt, which was mentioned by several noble Lords. The Bill does not distinguish sufficiently between the two.
I add my congratulations to the noble Lord on doing something about industrial and provident societies. That was clearly a concern. As my noble friend Lady Maddock said, I hope that we have now put this one to bed and will not come back to it.
Finally, we welcome most if not all of the procedures on consumer protection. In his introduction, the Minister explained why the Government had not seen fit to introduce a requirement not to trade unfairly. I wonder whether they have been courageous enough. I would encourage them to think again and to be courageous by considering an amendment to introduce that provision, which is sorely needed in this country.
We have had a good debate. Questions have raged long and hard and for once the accountants came in for only a mild drubbing rather than a thorough one.
Lord Razzall: Only from our side.
Lord Sharman: My Lords, I look forward to the Committee debates, which my noble friend Lord Razzall hopes will not be drawn out by experts. As one who thinks that he knows a little about some of these things, I promise not to do so.
6.31 p.m.
Lord Hunt of Wirral: My Lords, we have heard some valuable contributions in the 14 speeches so far. Substantial points have been raised that I trust the Minister will answer. I see that he is slowly going through the well written briefs that he has been given. I echo the tributes paid to his advisers. It is 23 years since I spoke from the Opposition Front Bench, but I had 16 years speaking from the Government Front Bench and I recall the outstandingly good briefs that I was given by the independent and impartial civil service of which we have every right to be proud. I am sure that some of the questions put by my noble friend Lady Miller of Hendon will be covered in the file that the Minister is going through carefully, but I anticipate that some of them will not be covered. I invite the Minister to break with tradition and give an off the cuff response to those penetrating questions.
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Since I entered this House I have never ceased to be impressed by the noble Lord, Lord McIntosh, and his mastery of so many varied briefs. He is a man of many public parts and roles, which he plays with great expertise. I pay tribute to him for that.
We have had an interesting debate about the title of the Bill. I applaud my noble friend Lord Boardman, who has consulted the Oxford English Dictionary, but I doubt that his suggestion will be taken up. He found a definition of enterprise as courage. During my period as a Minister, if any of my advisers said that a policy would be courageous or labelled any initiative as having considerable courage, it was often an argument for not going down that road.
Here we have a Bill covering now two volumes containing 277 clauses and 26 schedules. As my noble friend Lady Miller said, it is in effect three Bills. That was echoed by a number of speakers in the debate. I hope that Ministers recognise the call for the Bill to have undergone pre-legislative scrutiny. It was ideally suited for that process.
A number of points have been made about the timing of the Bill. Only the noble Lord, Lord Haskel, congratulated the Minister on the timing. He said that it was well timed because of all the financial scandals. I am not sure whether he attributes any credit to the Government for that timing, but I hope that he recognises that he was the only one who thought that July was the right moment to introduce the Bill in this House, leaving very little time for proper scrutiny.
I agree with the noble Lord, Lord Razzall, that there has been inadequate consultation. The Bill has been rushed. I hope that we shall have time to scrutinise its provisions properly. As the CBI said, it is a curate's egg. The CBI has been quoted in support of the Bill, but it also said that it failed to see how the Bill could boost enterprise.
The Minister said that the Bill was radical, that there had been proper consultation and that the provisions were bold. I echo some of the comments of noble Lords who have called that into question. First, I commend again my noble friend Lord Boardman for his criticism of the prison sentences that have suddenly leapt to prominence for those guilty of anticompetitive behaviour. The recent Competition Act—some parts of which have not yet been brought into effect—did not suggest that penalty and the rest of Europe is moving in the opposite direction. Ministers need to explain why they are introducing these provisions.
My noble friend Lord Astor made a number of key points about the need to speed up procedures. In many ways, our system works well. My noble friend made some valuable points on that. He also asked, given that some of the provisions of the Competition Act have not yet come into effect, why the Government are proceeding in this direction. He carefully laid down a good argument for not doing so.
We have all without exception welcomed the fact that Ministers are moving to put distance between the Secretary of State and decisions on mergers. My noble friend Lord Tebbit produced guidelines heading in

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that direction, so it is hardly surprising that we welcome this further step in relieving Ministers of the tendency to "block it, Beckett", or whoever the Minister might be pursuing a particular political course. It is very welcome that that will no longer be possible.
One could have expected the noble Lord, Lord Borrie, to object to the abolition of the post that he held with such distinction for many years, reappointed constantly by Conservative governments. That may send a message to him—it certainly does to me.
My noble friend Lady Wilcox, however, supported the concept of the board. In Committee we must examine how it would work. The noble Lord was right to draw our attention to the advertisement that has just appeared. I have not yet scrutinised it, but I look forward to doing so. He said it spoke of two days a month, which hardly suggests the board will move at the speed with which the noble Lord used to move in his previous capacity.
I also support what the noble Lord, Lord Razzall, said about the Desmond clause and the question of public interest in mergers of newspapers. My noble friend Lady Miller of Hendon has already referred to this key issue.
Looking generally at the consumer side, the noble Lord, Lord Razzall, asked whether there should be a duty to trade fairly. I have heard from Deirdre Hutton of the National Consumer Council that we should consider whether there should be a duty not to trade unfairly. We share some of the Government's misgivings in trying to put that statement into legislation. It would be extremely difficult and would fall foul of some of the tests that my honourable friends have been imposing on the Bill to relieve regulation.
The speech of the noble Lord, Lord Phillips of Sudbury, hears considerable scrutiny. He has a lifetime of public service and is a lawyer well known for his initiatives on pro bono work. I recall that he was a legal eagle for some time. He pointed out some deficiencies of the existing free enterprise system which we should do well to consider carefully. Although I did not agree with much of what he said, we must ensure that we consider the issues with great care.
My noble friend Lady Wilcox talked about the difference between misdescribed services and misclescribed goods. I am not sure I agree with her, but it is necessary to scrutinise the guilty knowledge element in these matters. I would not want consumers to find that it is impossible for them to pursue redress. Equally, it is important to pay attention to the good faith of those selling services.
The noble Lord, Lord Brennan, referred to a number of key points, particularly on Clause 240, to which I had not paid much attention until he pointed out its deficiencies. I found persuasive some of the principles that he enunciated, but I will need to see how he translates his suggestions into specific amendments before deciding whether we agree with him.
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The noble Lord, Lord Best, and the noble Baroness, Lady Maddock, shared with us their experience of social housing, although the Minister pointed out at the start of the debate that the Government will be tabling clauses to exclude housing associations.
I was amazed to hear the noble Lord, Lord Borrie, refer to the Bill as not being very fundamental, although wordy. I regard some of the measures as very fundamental and on this side of the House we will question their detail. He added that he would table a couple of proposed schedules and a series of clauses. We can only be taken aback by his courage and we look forward to scrutinising that additional proposed legislation.
On the provisions relating to insolvency, my noble friend Lord Hodgson rightly said that we must encourage risk takers. It will be important for us to try to find a way of differentiating between business debt and personal debt. My noble friend Lord Boardman was right to point out that borrowing has become a habit. It is a worrying development. We would not want any provisions in this legislation that suddenly released many people who often take credit beyond their means from the significance of facing up to that borrowing at some stage. We are often dealing with debts owed to small businesses in that respect.
I am not sure that we have paid enough attention to student debt. I was assured by a Minister that there was no need to worry about students seeking the new procedure to relieve themselves of student loans because the student loans legislation had already excluded such opportunities. I now discover that a further measure has put students back into potential bankruptcy proceedings. We need to think about that carefully. There have been a number of important press articles on the subject.
The Association of Business Recovery Professionals, which was referred to earlier, has highlighted the difference mentioned by several noble Lords between preserving the corporate vehicle as opposed to the economic entity. Schedule 16 states that,
"The administrator of a company must perform his functions—
(a) with the objective of rescuing the company".
I cannot understand why it does not say "rescuing the whole or part of the business", which is the existing practice. I hope that the Minister will explain why the Government have decided to refer to the company, and whether they are moving away from the definition of whole or part of the business.
As R3 points out, speed is virtually always critical to the rescue of a business, but so is flexibility. The unrealistic and arbitrary timescales imposed by the Bill to which the noble Lord, Lord Sharman, referred, will complicate the process and add to expense. With the changed definition of company rather than business the objectives may be defeated. We need to spend time on these points.
It has been an interesting debate. The House will have to spend a substantial amount of time in Committee. Clauses 205 to 228 were not considered by the other place in Committee. On Report, there was no

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debate whatever on the provisions dealing with market investigations and cartels and only a short interrupted debate on mergers. It therefore falls to this House to spend considerable time on this important but complex Bill that will certainly need extensive scrutiny. As the noble Lord, Lord Sharman, said, the Government should not be misled by the general welcome in principle, because key areas of detail remain to be scrutinised. We await the Minister's response.
6.47 p.m.
Lord McIntosh of Haringey: My Lords, I do not know whether I am more warned by the comment that the Government should not be misled by the general welcome or by the number of noble Lords who have said how much they look forward to Committee. Those seem to be threats rather than promises.
I begin with a certain amount of housekeeping, as did the noble Baroness, Lady Miller. She complained about some of the procedures, particularly the lack of consultation and the short time period for the final consultation. I hope that she will recognise that all the Bill's elements were subject to extensive consultation before the final consultation. In 1999 there was consultation in the consumer White Paper and on merger reform; in 2000 we consulted on personal bankruptcy; and last year we consulted on competition and insolvency. It has been a three-year process and there has been plenty of opportunity for people to comment, which has certainly been taken up.
In response to the comments on lack of scrutiny in the Commons, it is true that there has always been a limitation on the time allowed for scrutiny there. Whenever Bills have been guillotined in the past it has had the same effect as programming, but the division of time within the time allowed is a matter for the Opposition. If they choose not to debate certain matters, that is their responsibility, not the Government's.
If we agree to go into Committee, my understanding is that four days in Committee have been agreed. They may be long days; let us see. My experience has been—
Baroness Miller of Hendon: My Lords, perhaps I may make one more point on housekeeping. The four days were agreed on provisionally; not finally. I believe that that could be confirmed.
Lord McIntosh of Haringey: My Lords, that is news to me. But we shall have to work hard, bearing in mind the complexity of the issues before us.
I shall deal separately with competition, consumer affairs and insolvency. I want to introduce my remarks on competition with a little of my own experience. In the early 1960s I was market research manager for one of the largest lamp and lighting companies in the country. We belonged to an organisation called the Electric Lamp Industry Council. It had magnificent premises in Bedford Square with an Angelica
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Kauffmann ceiling above the magnificent staircase and a splendid boardroom where the committees met. On the mantelpiece was a motto from John Ruskin:
"There is hardly anything in the world that some men cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey".
That was the most blatant excuse for price fixing and cartelisation that I have ever known. In the electric lamp business in the 1960s the price of every single lamp was determined by agreement by all the manufacturers. There was a red book which set out the discounts which might be allowed to super wholesalers, wholesalers and small wholesalers. That went on, rampant and unchecked, and nobody did anything about it until Mr Heath did something with resale price maintenance. I am sure a lot of that still goes on and I am sure that we shall be learning more about it as the cartel provisions come into effect.
In the competition section I shall start by talking about the competition test because the noble Baroness, Lady Miller, questioned whether the competition test was the right alternative to the public interest test. I think that a competition test is more practical. I believe that the phrase, "public interest test", sounds good, and it works in some areas—for example, the Crown Prosecution Service—but in this case surely it is more realistic to be talking about competition as a principal factor in UK merger policy that should now be a legislative requirement. It is time to bring the legislation into line with practice. That is what the competition test in effect does. The test will be whether the merger is expected to result in "a substantial lessening of competition". That is the nearest to the competition analysis which is applied at present and that will be the concept which will guide the Office of Fair Trading and the Competition Commission and they will have to explain that in guidance.
Perhaps this is housekeeping, but we were criticised for not allowing the Competition Act enough time to bed in. The point here is that the Competition Act 1998 did not address merger and monopoly powers and many of those were seriously dated. My noble friend Lord Borrie gave evidence on that point. When he said that this legislation follows on naturally from the 1998 Act I think that is the correct way to look at it.
A number of comments were made about the Office of Fair Trading itself, a general welcome for it being established as it is rather than as a creature of the Director General of Fair Trading. I was asked for some assurances about that. In particular my noble friend Lord Borrie asked me to ensure that we would not have the part-time members of the Office of Fair Trading board undertaking individual investigations. I can certainly give him that assurance. The conditions for the board are very clear, although they are to be found in the "consumer" section of my briefing notes. They are that the board should focus on the OFT's strategic vision and direction, prioritisation and monitoring progress against targets. We expect the board to delegate most operational decisions to the Chairman and OFT officials. I hope that that will give my noble friend the assurance that he needs.

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The noble Viscount, Lord Astor, expressed great concern about the existing delays in the Office of Fair Trading and I hope that he will be reassured by the need for the new OFT to approve a service delivery agreement, objectives and targets on which it will have to report on a regular basis to Parliament, because of course the OFT will be a body responsible to Parliament.
I may be skipping around a little but the noble Lord, Lord Hodgson, asked whether companies would be able to continue to approach the OFT for confidential advice about mergers. The answer is that they certainly will.
The noble Viscount, Lord Astor, was concerned particularly about delays in broadcasting decisions, and I sympathise with him about that. He asked particularly about double jeopardy for sectoral regulators. The answer is that we are extending the concurrency working party agreements which have worked well under the existing Competition Act regime. The principle is that the best body to act should do so and if there is no agreement it goes to the working group to decide who should take it forward. There ought not, under those circumstances, to be a problem of double jeopardy.
There was a general welcome, although muted in the sense that it was hardly mentioned now I think about it, for the competition appeals tribunal. The noble Lord, Lord Brennan, made the valuable point that it needs to be as informal as possible. Of course, it has to be an independent tribunal and for that reason the chairman and the president will be appointed by the Lord Chancellor and appointments will be for a single longer term so that there are no issues raised by reappointment. I agree with him that the proceedings have to be informal and that is the basis on which ordinary members of the tribunal will be able to hear appeals.
Inevitably there were questions about the cost of the market provisions increasing cost to business, raised by the noble Lord, Lord Boardman, and my noble friend Lord Borrie. It is not necessarily the case that more markets will be referred to the Competition Commission than at present. The reference criteria are no more permissive than under the current monopolies regime. The Office of Fair Trading refers only when it thinks that there is a real likelihood of a serious competition problem and this is demonstrated by the fact that the Competition Commission has recommended remedies in all but one of the last 12 monopoly cases which have been sent to it.
Everybody except the noble Lord, Lord Phillips, welcomed the diminution of ministerial involvement in decisions about market investigations. We shall no doubt hear from the noble Lord, Lord Phillips, on that subject in Committee and I look forward to that. He made the only really radical speech in the whole debate, if he does not mind my saying so.
I have dealt with the issue of the competition test. There was considerable discussion on the criminal offence and the issue of dishonesty. The noble Lord, Lord Razzall, welcomed it. The noble Baroness, Lady
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Miller, was concerned that it should not be thought of as being the same thing as theft and she objected to the use of theft. I am not sure that I agree with her. The dishonesty element will ensure that only people who are entering into agreements which they know to be wrong may be charged with a criminal offence and dishonesty will be tested against standards already established in case law. Juries will ask themselves whether what was done was dishonest by the standards of reasonable people and whether the defendant understood that that was the case.
It has not been defined in existing legislation but the relevant legislation is of course the Theft Act 1968. I think there is a reasonable balance between the civil offences and the criminal offences just as I believe there is the same reasonable balance in the Financial Services and Markets Act. The working together of the OFT and the Serious Fraud Office means that the OFT will be collecting evidence to different standards for civil and criminal cases. For criminal cases it will need to follow the Police and Criminal Evidence Act criteria and procedures because it will have to hand that over to the Serious Fraud Office. Incidentally, I would say to the noble Lord, Lord Phillips, and the noble Lord, Lord Hodgson, that the SFO conviction rates, which admittedly were lower in earlier years, have risen to 87 per cent in 1997–2002. My judgment is that my noble friend Lord Borrie was right in approving the decision to have those matters dealt with by the Serious Fraud Office.
Finally on the issues involving competition, there was concern about disclosure and information. I heard what my noble friend Lord Brennan said about overprotecting the corporate system. I was interested in the fact that implicitly the noble Lord, Lord Phillips, made similar points. If that issue is raised in amendments, I shall consider them with interest.
I turn to consumer issues. I am glad to say that to some extent I have already pre-empted myself by discussing the accountability of the OFT. It will be accountable to the Secretary of State, Parliament and the public. The chairman could be summoned by Select Committees. It will have to follow the general principles of good governance for all bodies corporate. It will have to publish an annual plan and an annual report, which will inevitably cover some of the elements of a regulatory impact assessment. It may or may not decide to publish minutes. The appointments will be in accordance with Nolan principles. I must resist the idea that comes up from time to time that there should be prior approval of appointments by a Commons committee. If that is to be done, we should do so knowing what we are doing rather than introduce the practice piecemeal. However, I have said that before and I guess that it becomes less convincing each time that I say it. The noble Viscount, Lord Astor, was concerned that the OFT should act in accordance with the principles of good governance. We believe that it will do so.
I have answered the issues raised by my noble friend Lord Borrie and, to some extent, by the noble Viscount, Lord Astor, about the role of the board. The noble Baroness, Lady Miller, asked for the assurance

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that the OFT would still have to give proper consideration to complaints from members of the public, not just super-complaints. The OFT will have to consider any complaint that it receives that raises issues that are relevant to its functions. The special procedure for super-complaints does not affect that. She also asked for further information about what sort of bodies could be designated enforcers in relation to Part 8 for consumer protection purposes. The private bodies will be designated by the Secretary of State in a statutory instrument. They must have as one of their aims the protection of the collective interests of consumers and they must fulfil criteria that are set out by the Secretary of State, which will be designed to ensure that they act impartially, independently and with integrity and that they have the ability to take action under Part 8. The criteria will be based on the criteria for designation that are set out in the stop now orders, on which we will consult fully. If those bodies behave in a way that does not meet the criteria, we could take away the designation.
I did not hear many complaints about the super-complaints procedure, although there were concerns about the time of response. My noble friend Lord Brennan welcomed the 90-day period. I believe that the noble Viscount, Lord Astor, thought that it would be difficult to keep to 90 days in view of the bad experiences that he related.
On the stop now orders, the main issue is the general duty to trade fairly. The consensus, I gather, is that we should not go towards a general duty to trade fairly. The European Commission is looking into those issues. Of course we believe that businesses should trade fairly but we are targeting our new laws on the areas of real concern, which are those that should be concentrated on at the moment.
The noble Baroness, Lady Wilcox, asked about Section 14 of the Trade Descriptions Act and the issue of mens rea; the noble Lord, Lord Hodgson, raised the same point. Misdescriptions by traders in relation to goods and services will usually constitute a misleading advertisement under the Control of Misleading Advertisements Regulations. Mens rea is not a consideration under those regulations and the provisions can already be enforced by stop now orders and will be covered by Part 8. I heard the doubts of the noble Lord, Lord Hunt, on that matter and was to some extent encouraged by his comments. I also heard what the noble Lord, Lord Hodgson, said about postal scams from abroad. That is covered by the same misleading advertisements regulations. The cases that he gave would be more a matter for the Financial Services Authority than for this legislation.
There has been a considerable degree of misunderstanding about the insolvency provisions. The impression has got about that somehow bankruptcy is becoming an easy option. Our policy is and remains that if bankrupts can pay, they should pay. On entering bankruptcy, a debtor's assets are liable for sale for the benefit of creditors, just as is the case at present. Bankruptcy has a wide-ranging impact on the lives of those who enter it. They risk losing their
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homes and possessions and they face severe restrictions on their finances, such as availability of bank accounts and their ability to obtain future credit, including mortgages. If a bankrupt has earnings, he is likely to be subject to an income payment order or an income payment agreement. They will apply to all bankrupts, regardless of their culpability. They will not be affected by early discharge, and they will continue to run after discharge for the full three-year period.
The noble Lord, Lord Boardman, raised the concern that the one-year period was not long enough. I hope that he will be reassured if I repeat the fact that income payments orders will extend beyond discharge and will run for three years. That, from the creditor's point if view, is the important point.
We are introducing a new and tougher regime of bankruptcy restriction orders for those bankrupts who represent a risk to the public or commercial community. That involves those who fail to account for losses and incur a debt where there was no reasonable expectation of being able to repay it, fraud and failing to co-operate with the Official Receiver. Those orders can apply for between two and 15 years. Any previous bankruptcies will be taken into account when considering bankruptcy restriction orders. The present regime allows for criminal action against bankrupts only where there is misconduct. We believe that that regime will allow the Insolvency Service more flexibility with regard to the way in which it deals with those who represent a risk to the public, which is what really matters. That applies in relation to what a number of noble Lords, notably the noble Lord, Lord Razzall, said about rogue bankrupts. The noble Lord, Lord Hodgson, who was concerned about this, was right to suggest that the loss to creditors is the important consideration. That is still the case under the regime that we are pursuing.
There was concern about the proposed timescales in the streamlined administration procedures. One of the key points that is coming out of consultation is that administration takes too long. It does not provide any certainty for creditors about when they might get paid. We need to address that issue in order to reassure the lending community. With the changes that will be introduced elsewhere in the Bill, administration will become more accessible and attractive, particularly to smaller firms. The costs of running a lengthy administration can be a barrier to entering the existing administration procedure. Let us have more debate on timescales in Committee.
I was interested by the comments of the noble Lords, Lord Razzall and Lord Hunt, who is expert in this area, on "business against company" rescue. We would not want the administrator to rescue companies that are empty shells at the expense of rescuing viable businesses, especially when that would mean that the creditors would suffer. We want to put company rescue at the heart of insolvency procedures because we want to save companies which have a decent chance of survival so that they are not driven to the wall unnecessarily. I do not make a distinction there between business and company. If they carry on it is

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the business which does so by means of the company surviving. But I am sure that we can return again to this matter in Committee.
The noble Baroness, Lady Miller, made a point about employees' claims. Under the Employment Rights Act the Government meet, and will continue to meet, the redundancy payments of employees where the employer has become insolvent. That does not mean that the employee cannot make additional claims. It is a statutory provision and the Bill enhances the position of employees. Where the Secretary of State and the employee both have a preferential claim in insolvency proceedings, it removes the Secretary of State's priority over that employee.
I believe that noble Lords could have been a little more welcoming about the abolition of Crown preference, which is a rather important matter which has bugged many of us over a number of years. I did not hear much of the welcome which I believe we were entitled to.
Noble Lords: Hear, hear!
Lord McIntosh of Haringey: Thank you very much! I shall write to the noble Lord, Lord Borrie, about Ofgem. The Government's policy on student loans is, and always has been, that student loan debt should not be written off with bankruptcy.
I am delighted to have heard the noble Lord, Lord Best, and the noble Baroness, Lady Maddock, speak about social housing. We look forward to the necessary amendments to the Bill.
I believe that I have reached the end of the notes I have made on particular points. I am sure that I have missed a great deal. I shall write to noble Lords where necessary.
Lord Razzall: My Lords, before the noble Lord sits down, he has failed to answer one point which has caused enormous interest, and not on the technical side. What are the Government's proposals, if any, regarding newspaper mergers and do they intend to bring forward amendments to the Bill?
Lord McIntosh of Haringey: My Lords, I must have flipped over that quite unintentionally. This matter will have to be resolved between the communications Bill and this one. The House will be informed further before we go into Committee.
As I believe has been generally recognised, the intention of this Bill is to stimulate productivity improvements through stronger competition and promote enterprise. I know that people do not like the name of the Bill, but there it is. The Bill is to increase opportunities for business by opening up markets and, through the insolvency reforms, create a business environment in which companies can confidently take advantage of these new opportunities. I believe that the provisions in this Bill, disparate as they are, and though they could or should have been in three Bills
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rather than one, nevertheless, they will make a real difference to people's lives. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

American Farm Bill and Agricultural Trade
7.14 p.m.
Baroness Farrington of Ribbleton: My Lords, I understand that the noble Baroness, Lady Park of Monmouth, will not be speaking during the Unstarred Question. Because of this, the time limit for each speaker can be slightly extended to six minutes. The noble Lord, Lord Carter, will still have 10 minutes to open and the noble Lord, Lord Whitty, 12 minutes to wind up. May I remind noble Lords that as soon as the clock indicates six minutes they are over their allocated six minutes to speak.
Lord Carterrose to ask Her Majesty's Government what effect the American Farm Bill will have on proposals for the reform of trade in agricultural products.
The noble Lord said: My Lords, Whips certainly do not change, do they?
I have tabled this Question on the 2002 American Farm Bill because it seems to mark a fundamental change in apparent American attitudes towards farm support and thereby their international trade obligations. But before I turn to the Bill, as a former business manager may I say how impressed I am by a parliamentary system whereby the House discussed a Bill on 2nd May, the Senate on 8th May and the Bill became law on 13th May.
I say that there has been an apparent change because some would argue that this merely continues a policy that started in 1998, when the provisions of the 1996 Farm Bill were overturned within two years of its passing.
We all know that there is a political factor in the timing of this Bill; namely, the approaching midterm elections. This was summed up very well by a Nebraskan farmer, who said, "About the time we think we are insignificant out here, something happens to make us think we're not". That reminded me of a remark that a farmer in the Mid-West made to me some years ago when I asked him about his cropping plans for the year. He said, "It's election year, so it is soya beans wall to wall". The political point was made even more graphically by Congressman Larry Combest, Chairman of the House Agricultural Committee, who said, "This Bill is for rural America. It is not for rural Canada. It is not for rural Europe. It is for rural America".
However, it would be unfair to belabour the USA for taking electoral considerations into account when formulating policy. Such attitudes are not unknown in other countries under all electoral systems. The 1996 Farm Bill was supposed to mark a change away from

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production support and direct payments to farmers. It was part of the reaction to "big government" and increased federal spending that was associated with Newt Gingrich. In fact, the severe economic plight of American farmers in the late 1990s led to substantial emergency payments totalling some 30 billion dollars in four years. That was spending over and above the 1996 authorisation.
The Agricultural Secretary, Ann Veneman, produced a remarkable justification for the proposed increased spending in the 2002 Farm Bill. She said that statements that farm programme support had ballooned by 70 per cent were not "the whole truth". Consideration of support levels for the farm sector should add in the emergency supplemental support provided in the past four years—an additional 7·5 billion dollars each year. The new Farm Bill provides for roughly 7·4 billion dollars each year in new farm spending. Therefore, the new level of support merely adds to and codifies the amount of extra support already provided. That is moving the subsidy and the goalposts in some style.
There has been much comment on the likely effects of the Farm Bill on farm prices and on world trade in agricultural products. United States exports some 25 per cent of its agricultural products, worth about 53 billion dollars a year. It has been calculated that one-third of American planted acres are effectively for export.
It would be disingenuous to say the least that the system of support in the Farm Bill will not have an effect on prices. Crop support in the Bill takes three forms: fixed decoupled payments by which the farmer gets a set payment each year; loan deficiency payments, which are counter-cyclical since more is paid when prices are low and vice versa; new counter-cyclical payments, which make up the difference when the overall income of the farmer (for instance, the return from the market, plus the fixed, decoupled payment, plus the loan deficiency payment) falls below the target price.
The whole system bears a marked resemblance to the deficiency payment system which we abandoned in the 1970s. There are also complicated support systems for livestock products and for fruit and vegetables. Counter-cyclical payments effectively cancel market signals and they are a direct incentive to over-produce in terms of surplus and low prices. It was said—and it was correct—that one of the weaknesses of the system of deficiency payments which we had was that farmers were thereby detached from the market.
So farm support of this type in an economy where 25 per cent of the produce is exported effectively subsidies exports; it makes the US home market unattractive to potential importers and it ensures cheap raw materials for livestock feeders and food processors, and increase their competitive power.
But before we become over-critical of the American approach, it is only fair to point out the arguments which they produce in rebuttal, particularly as regards EU support policy. Their arguments come under the
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general heading of the mote in the US eye and the beam in the EU eye. They claim that their agricultural markets are relatively open with a 12 per cent average tariff on food and agricultural products. That compares with 59 per cent in Japan, 30 per cent in the Cairns Group, 30 per cent in Europe—and 62 per cent as a global average.
There are many comparisons of the level of agricultural support in America and Europe and the protagonists tend to choose the measure which suits their argument best. The US and the EU farm-gate value of agricultural production is very similar: 197 billion dollars in the EU in 2000 and 190 billion dollars in the US.
The total support estimate in 2000 was 103·5 billion dollars in the EU and 92·3 billion dollars in the US—again fairly similar figures. The total support estimate as a percentage of GDP was 1·32 per in the EU and 0·92 per cent in the US—about 50 per cent less than in Europe. The greater number of full-time farmers in the EU means that producer support averaged 14,000 dollars per farmer in the EU and 20,000 dollars per farmer in the US.
I apologise for burdening your Lordships with those figures, but they illustrate the difficulty in making comparisons, and perhaps we in the EU should go a little steadily before we are too critical of the US. As my good friend Anthony Rosen pointed out, the higher dependence of EU farmers on support is shown by the fact that producer support has ranged between 32 and 35 per cent of gross farm receipts in the EU compared with a range of 11 to 25 per cent in the US. Even with the extra emergency payments to US farmers, in the four years from 1998 to 2002 the level of support as a percentage of gross farm receipts was only two-thirds of EU levels.
Clearly those figures show that both the US and the EU provide substantial levels of support to their farmers. What has perhaps taken everyone aback is the brutally clear way that the Texan President Bush is prepared to look after the American farming interest when times are bad—indeed, reversing the Bush administration criticism of the Farm Bill only last autumn. The American separation of powers is always described in terms of the judiciary, the legislature and the executive. I wonder if there is not in fact a fourth power—the President himself and the state which is his political base.
As we all know, there is a good deal of concern as to whether the Farm Bill proposals will allow the US to keep within its WTO ceiling of 19·1 billion dollars per annum—the specified support. The US claims that it can and it will. But it is not clear how the US can negotiate for a reduction in the WTO ceiling and at the same time keep its word to its farmers. I should perhaps point out that the 19·1 billion dollar ceiling of WTO specified support compares with 62 billion dollars for the EU, even though the total value of agricultural production is approximately the same in America and in Europe. However, it would be unwise to jump to too many conclusions too quickly. I am told that increases in the wheat price in Chicago in two days last week potentially saved 1 billion dollars in support.

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The authorisation to spend the money has to be cleared through the appropriation process each year. As we know, the Americans work on autumn to autumn, which is tied to the rural economy—harvest to ha rvest—for their appropriation process. It is probable that the money for 2002–03 is safe. But the money for 2003–04 and beyond will have to be approved each year. It will be interesting to see what happens when discussions on the budget take place in 2003 it is not an election year—and the US budget deficit could be 6 per cent of GDP (with EU figures of around 3 per cent).
One veteran Washington budget watcher has pointed out that some of the funding that was easy to get could be easy to lose. In a prescient comment, Senator Tom Harkin said that the Farm Bill cannot just be open-ended, adding,
"I wonder how long it will take for supply control recommendations to surface".
We all know what that means.
The Farm Bill 2002 has been criticised by Mr Fischler for the European Union, the Cairns Group, the budget hawks on the Hill, the developing countries involved in the Doha talks and economists and commentators throughout the world. I am pleased to have provided this opportunity for my noble friend Lord Whiny to give the Government's view.
7.25 p.m.
The Duke of Montrose: My Lords, it is a great pleasure for me to be able to congratulate the noble Lord, Lord Carter, on having won the time for this debate, and particularly that he is the one who is leading your Lordships to address this timely and knotty question.
First, I declare my interest as somebody who is in agricultural production, and the trade in agricultural commodities affects my business.
Most of us had come to the perhaps erroneous conclusion that the US was driving the trade liberalisation agenda in the world, and the question which the US Farm Bill raises for us now is: why has the leopard changed its spots?
It is certainly no news to your Lordships that agriculture and the supply of food has been a story of swings and roundabouts, between plenty and hunger, between poverty and wealth. America has followed that pattern as much as any country. But in 1980 a different farm crisis hit them.
There had been a period through the 1970s of strong commodity prices and export opportunities, coupled with high inflation and low interest rates. That encouraged farmers to over-invest, so that between 1970 and 1984 farm business debt nearly quadrupled. The economic conditions reversed in the early 1980s, with contracting export markets and input prices and interest rates which rose. Suddenly farm land values dropped by 27 per cent and it was not just the farmers who were going bankrupt but the rural banks, the savings and loan companies and anybody who had put money into that industry and lent against that security.
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That shook the whole US property market and must be a pretty telling memory to anybody who is in government there. There has not been a comparable crash in any recent period in this country, unless the present combination of diseases and unfavourable exchange rates happens to trigger one.
The noble Lord, Lord Carter, drew our attention to how the American farming industry has received increased supplementary payments in each of the past three years. I do not have any figures on where the present level of farm borrowing stands. Even so, the American Bankers Association survey found that the number of farm borrowers filing for bankruptcy doubled in 1998 and 1999 to 2 per cent of borrowers. It seems to me that that provides some background to the American perspective on farm aid before even considering the pressures of an autumn mid-term election.
At the same time, it is a timely reminder of the tangled web of farm support that exists across the world and the problems of disentangling it. No doubt the greatest worry is the subject of our debate today, the reform of trade. That is particularly so when one sees the emphasis being put on assistance to exports being provided at a higher level than existed under the previous omnibus FAIR Farming Bill.
The pure market approach which the Americans often liked to promote was that, if we can produce things cheaper, we should be allowed to sell them in other people's markets. But the World Trade Organisation at its last meeting asked people to undertake to reduce export subsidies and reduce export quantities. I wonder whether the Minister in answering can give us any idea if much was achieved in that regard, before we even get into the question of what the United States will do with its present policy.
As various economists try to gain some understanding of what the likely outcome of these proposals is, there is already concern as to what any changes will mean to the rice farmers of Vietnam and Thailand. Perhaps even more vulnerable are the farmers in Japan, who are already heavily subsidised, probably up to their WTO ceiling, which is way above what anybody else receives. But I have heard that their real worry is that if their market were to be flooded with cheap rice, it would no longer be economic to maintain their traditional rice terraces and they would be faced with enormous erosion problems. So right away one is into a wholly different area than simply WTO negotiations.
It may be that we have to go an awful lot further down the road of environmental support and measures which do not lead to trade distortions before measures for freeing up trade can be truly effective.
7.29 p.m.
Lord Hooson: My Lords, I hesitated to put my name down for the debate. I rarely intervene in debates these days as there are so many able and younger people than myself. But I could not resist the temptation when I saw the Unstarred Question and realised who the questioner was. He has asked a most important

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question. The Government's reply will arouse great interest, not only in this country and in Europe but generally in the world. I remind your Lordships of the question: what effect the American Farm Bill will have on proposals for the reform of trade in agricultural products.
In many quarters in the United States the American Farm Bill is regarded as yet another manifestation of an increasingly unilateral approach by the United States of America. I think that there is a broader context to the Bill. Incidentally, the term "unilateral approach" was first used to me in reference to the American attitude by American friends of mine, not by British or European friends. They were concerned at the increasing manifestation in their own country that the United States should look at its own interests and no one else's.
The Bill's purpose is to subsidise exports from the United States. It goes a long way to making sure that the export is of such a nature that the American farmers—and no doubt the supporters of President Bush—will benefit greatly from it. If the United States does not pay regard to the effect of the Bill, it has the potential to undermine eventually the solidity of the Atlantic Alliance or the Western Alliance. It tends to undermine the progress that we have made—carefully and sometimes unsuccessfully—over the past half-century and more in the direction of a multilateral and a global approach to many of these problems.
As a hugely dominant military power it is understandable, even if regrettable, that the United States takes an increasingly unilateral approach in military matters, believing that it leads to incisive action. One can understand that approach, although one may have grave doubts about it.
As the events of the last few months, which have been underlined in the past fortnight, have shown, the USA's economic dominance is not so great. It has a vulnerable economy too. The Farm Bill can lead in the States to an accentuation of trade wars. So far as concerns grain, America is in a dominant position, which is rivalled only by countries such as Canada and so on. But we need an approach to this problem that is shared at the very least between Western Europe, the United States and Canada.
One hopes that the Prime Minister, when he meets President Bush, will seek to ensure that there are talks on the matter and on the broader implications of this move. The great danger with the Prime Minister is that he sometimes regards himself as an emissary for the United States. I believe that he should think much more deeply about the matter and about the implications for the global economy as well as for this country.
The noble Lord, Lord Carter, was absolutely right to say that we in the European Union have had our own form of protectionism. Indeed, I was one of the upholders of the common agricultural policy. Years ago it seemed to me that were it not for the common agricultural policy there would have been a great exodus from the countryside into the towns and cities,
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especially in Italy, France, Germany and so on. It probably made a major contribution in ensuring that the Communist Parties, which were so strong in those countries, did not obtain a dominant position.
The reply today will be an indication of how the Government are looking at the matter. Are they looking at it as merely a matter of American interest and they have nothing to say about it, or do they appreciate that the Bill in the United States has enormous implications for the global economy and for Europe?
7.35 p.m.
Lord Williamson of Horton: My Lords, I thank the noble Lord, Lord Carter, for raising the issue of the new US Farm Bill today. It is a significant change in United States' agricultural policy and hence, because of the possible domino effect on international trade negotiations' on US trade policy generally, I am critical of the Bill which the Washington Post described in a headline on 2nd May as, "This Terrible Farm Bill". However, I recognise some US impatience with the slow pace of change in our own agricultural policy. I shall make a brief comment on that first in order to set in perspective the battle of the giants or, worse still, the stalemate of the giants.
We do not yet know what will be the outcome of the consideration by European Union Ministers of the mid-term review of the agricultural policy which the Commission is putting forward. But what we do know is that although the pace of the reform already implemented or agreed is too slow, the direction of the reform is generally good. First, we have, to a large degree, changed the mechanism of internal market support—where it exists at all—into a safety net system rather than a rigid public intervention system, and thus the infamous butter mountains and other phenomena have long since vanished.
Secondly, we have acted directly on reducing support prices or taking decisions to reduce them in the future. Consumers have been the beneficiaries of these changes; taxpayers less so because direct grants have played a bigger role. We have moved a long way from a managed market towards a normal market system, at least within the European Union itself, although we still have substantial external protection.
Thirdly, European Union export subsidies are becoming less and less important, falling from 25 per cent of the value of farm exports in 1992 to 5 per cent today.
Fourthly, we have made an important start on conservation, environmental and rural development programmes.
I now look at the American Farm Bill. First, it is a change of direction. It reverses the market-driven reforms initiated in the 1996 Farm Bill. It is true that Congress has added extra spending to that Bill in the intervening years. But the new Bill goes a long way from the earlier objective of market-driven and declining support.

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Secondly, there is the massive scale of US agricultural support. Total direct spending in the new Bill is 273·9 billion dollars over the six years—2002–07. Of this total, 51·7 billion dollars is new spending above the March 2002 deadline. I recognise that included here is important expenditure on food and nutrition programmes which may not always be considered as agricultural support. But, none the less, direct support to US farmers is large.
The farm gate value, as we know, produced by agriculture in the US and the European Union is about the same, although the European Union has over 7 million farms and the US has about 2 million. What is the best measure of total support in the US and the EU? For myself, I find the Organisation for Economic Co-operation and Development total support estimate for the year 2000 interesting, because it was published before the present US Bill. It shows some difference favourable to the United States, but the cost per head for the citizen was 338 dollars a year in the United States of America and 276 dollars in the European Union—both are too high, of course.
Thirdly, the new US subsidies are closely related to products and are likely to encourage production. Crops are now supported by three types of subsidy: the fixed subsidy each year for each crop, which is higher than existing payments and is not decreasing; loan deficiency payments, which are in effect the difference between a fixed price—the loan rate—and the local market price; and a new subsidy that will top that up where necessary to a target price. That is broadly the system that was eliminated in the 1996 Bill. Now it returns.
Thus, for wheat, there is a fixed subsidy of 19 dollars 11 cents a tonne; a loan rate of 102 dollars 88 cents; and a target price of 141 dollars 83 cents. There are big bucks here. There will also be a new subsidy for dairy farmers dependent on price and a continuation of intervention buying for skimmed milk powder or cheese. For sugar, there is high protection against imports and a public purchasing programme will continue.
Fourthly, there is an increase in direct support for export measures. The market access promotion programme rises progressively from 90 million to 200 million dollars a year.
Fifthly, and finally, I comment on the effect on developing countries. The European Union is the world's biggest market for imports of agricultural goods from developing countries—about 75 per cent higher than developing country exports to the US. However, the US exports far more to developing countries, and will probably export even more given the impact of its export measures.
President Bush described those measures as generous. Looked at from within the USA, they probably were; looked at from here, they present an unhappy picture for British farmers and international trade.
7.42 p.m.
Lord Grenfell: My Lords, I, too, am grateful to my
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noble friend Lord Carter for initiating this debate. I shall not spend valuable time criticising the political process that led to the enactment of the Farm Bill. I want instead to discuss its impact on poor countries. Suffice it for me to cite with approbation the opening paragraph of an editorial in the Washington Post of 14th May:
"Yesterday Mr Bush signed a farm bill that represents a low point in his presidency—a wasteful corporate welfare measure that penalizes taxpayers and the world's poorest in order to bribe a few voters".
I acknowledge that some Senators and Congressmen—even some Republicans from the Midwest—said that the price tag was too high at a time of returning budget deficits and the war on terrorism, and that it was tailored more to parochial election-year interests than to the farm economy's long-range needs. Well, good for them. But as we all know, the Bill's impact ranges far beyond the interests of the American farm economy.
At Doha, poor countries agreed to negotiate in part because of promises by the Bush Administration that a top priority for the talks would be the phasing out of subsidies and other moves to increase access for poor country agricultural products in rich country markets. But this Farm Bill makes it much tougher to overcome the resistance of farmers in countries such as France to giving up their subsidies. The immediate reaction of Canada's agriculture Minister was to say that his Government was considering increasing aid to Canadian farmers to counter the new American subsidies.
US policymakers counter that, if and when they emerge from the World Trade Organisation round in 2004 with a satisfactory agreement, American farmers will be happy to exchange their new subsidies for market-opening concessions by other countries. To that, I can say only, "Oh, really?" It is more likely that this six-year Farm Bill will be renewed in one form or another whatever happens in the Doha round. Once extended, government benefits are hard to withdraw. In 1986 President Reagan tried to trim subsidies and the Republicans lost control of the Senate.
The immediate losers, of course, are the developing countries. Agricultural subsidies in developed countries are now at a worldwide level of about 350 billion dollars per year. The EU has also rightly been in the dock over that issue. As the president of the World Bank recently noted, that is seven times what countries spend on development assistance and is roughly equivalent to the entire gross domestic product of Sub-Saharan Africa. Those trade-distorting subsidies are crippling Africa's chance to export its way out of poverty.
Of course, African countries need to follow through on the New Partnership for Africa's Development agenda. In particular, internal barriers to trade and investment that limit the ability of African farmers to market their goods must be removed. But without a level international playing field, they are simply doomed.

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It is not just a matter of reducing and eventually removing those subsidies. The US collects in tariffs about half a billion dollars a year from poor country exporters, roughly 11 per cent of the value of those exports. Escalating tariffs that peak with processed agricultural goods are huge barriers to the exporting of Africa's processed products. The US has the highest tariff peaks of any major market. They are 76 times as high as the average tariff.
In Sub-Saharan Africa, the figure is only five times as high as the average. World Bank research—I am grateful to the bank for supplying me with it—shows that if the US were to eliminate tariff peaks on the exports of the 49 poorest countries, their exports would rise by about 1·1 billion dollars per annum.
The value of the EU's "Everything But Arms" proposal is, of course, diminished by delayed implementation for bananas, rice and sugar, but it is certainly a step in the right direction that goes farther than has any other rich market.
I conclude by returning to the Farm Bill and taking a typically pernicious example of its impact. Cotton production in the CFA franc zone countries of West and Central Africa has increased fourfold in the last two decades, making the region the world's second largest cotton exporter with a 13 per cent share of world exports. Cotton is the main cash crop and the largest source of export receipts and government revenues in several countries of the region. Its cultivation employs more than 2 million rural households and is hence a key factor in poverty reduction.
Removal of US subsidies on that one crop alone would increase revenues from cotton in the region by about 250 million dollars a year. But, of course, the Farm Bill increases subsidies to American cotton producers in the Republican Party's southern base. If world cotton prices were not further depressed, as they must surely be by those subsidies, the number of people living in poverty in Burkina Faso, according to the World Bank and the International Monetary Fund, could be cut in half within six years. Subsidies account for about one-third of the 35,000 dollar average annual income of US cotton farmers. The per capita income in Burkina Faso is less than a dollar a day.
That is a fair measure of the perniciousness of the Bill. The irony is that America's future farmers will suffer as subsidies push up land values and rentals, meaning higher costs for new farmers, while overproduction depresses prices. It is a short-sighted, selfish Bill that sends entirely the wrong messages and does the United States Administration and Congress no credit.
7.48 p.m.
Lord Hannay of Chiswick: My Lords, the noble Lord, Lord Carter, has done the House a service by asking this Question, which is timely. We have moved an awfully long way from the euphoria of last November's Doha meeting, which inaugurated a new
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world trade liberalisation round—proclaimed as it was as the economic response to the atrocity of the attacks on New York and Washington. Nothing has moved us further away from that euphoria than this US Farm Bill.
First, there were the protectionist measures on steel. Now we have this extension of subsidies on a wide range of agricultural products—an extension, moreover, linked to production levels, not decoupled from them, which would have been much less damaging. The rhetoric of trade liberalisation remains, as the Administration struggles to obtain fast-track negotiating authority, but of its practice and substance little is left. That is a bad prospect for all those who believe that freer trade should be the motor of the world economy.
Of course there is a quick and facile response from the other side of the Atlantic: "Who are you in Europe, with your common agricultural policy, to be pointing a finger at us?". I call that point facile not because there is no truth in it—the CAP is indeed protectionist—but because it in no way excuses a major move by the United States in the wrong direction and, further, because the Americans are pulling the rug from under the feet of those in Europe who want fundamental reform of the CAP.
Of the many tears being shed in Europe about the Farm Bill, we can be sure that plenty will be of the crocodile variety, shed by those who will soon be arguing in Brussels that the EU cannot possibly be expected to make a contribution to the new trade round when the Americans are behaving as they are. That is an additional cross that those who want to see the CAP reformed must now bear.
Does it all matter very much? It matters quite a lot. If this trade round is to succeed—if it is to reach an agreed conclusion at all—it must offer more and deliver more to developing countries than earlier rounds have done. How are we to do that, if we do not give them better access for their agricultural goods to our markets and if we do not cut back on the subsidisation of our agricultural exports, which are undermining their farmers' production? If we add to that the disillusionment of key trading partners such as Australia, Canada, New Zealand, Argentina and Brazil, which depend crucially on highly competitive agricultural exports, we will find that we have a witches' brew that could all too easily poison the Doha negotiations as a whole, and thus deeply and negatively affect the economic prospects of the whole world.
What is to be done? One answer—far and away the preferable one—is for the European Union to do what I would call taking a leaf out of its Kyoto book. By that I mean that we should not be deterred by this setback, but should work up a genuinely liberalising agricultural trade package, based on serious reform of the CAP. That should be put on the table at Geneva as our contribution, albeit a conditional one requiring reciprocity. In that way, the European Union would, for the first time, give a lead in agricultural trade

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instead of playing its usual role of reluctant and grudging participant, producing concessions only under extreme pressure.
Once such an offer is on the World Trade Organisation negotiating table, we will soon see pressure being put on the United States both by the developing countries and by major developed country agricultural exporters to remedy the damage that has been done by the Farm Bill. I hope that the Minister will say that that is our objective and our intention.
7.52 p.m.
Lord Brittan of Spennithorne: My Lords, the effect of the American Farm Bill on the proposals for reform of trade in agriculture has, simply, been devastatingly damaging. Indeed, it risks being a body blow to the whole Doha development round. I take no pleasure in saying that. I say it with great sadness, because further liberalisation of trade generally—not just in agriculture—is in the interests of the United Kingdom, the European Union and the United States. Properly handled, it is also in the interests of the developing world.
To achieve that liberalisation, the closest cooperation between the European Union and the United States is essential. I was fortunate enough to achieve that with Mickey Kantor to conclude the Uruguay round. My successor, Pascal Lamy, was able to achieve it to launch the Doha development round. Long before I took over the negotiations in the Uruguay round on behalf of the EU at the beginning of 1993, the US and the Cairns Group had orchestrated a loud chorus demanding the elimination of trade-distorting subsidies. In spite of huge resistance in certain quarters of the EU, we were, in the end, able to achieve consensus on taking a major first step in that direction.
In 1996, the EU unfurled the banner of trade liberalisation afresh and called for a comprehensive new trade round. Once again, the US focused almost exclusively on agriculture. We argued for something much broader. Two years later, at Doha, the round was finally launched, but it was a fragile launch, much assisted by the universal desire, after 11th September, to do something positive for the world economy. The developing world reluctantly set aside its doubts, as much as anything because of a belief that the barriers that its main exports—agricultural products—faced would fall significantly at last. This year, we have all been dealt not one body blow but two. First, there was steel, and then there was the Farm Bill. Both have caused deep resentment in the developed and developing worlds alike. It is not the comparative magnitude of support that matters but the direction in which the major trading blocs are going.
For crops alone, the Bill means an increase of 15 billion to 20 billion dollars a year. That is an increase of 70 to 80 per cent. Over 10 years, it will amount to 180 billion dollars. It will aid farmers in a highly production-distorting way. The loan deficiency payments change the price of exports, which will be subsidised on the world market. Changing prices at
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home will make things more difficult for exporters to the United States and destroy the competitive advantage of developing countries.
The Bill is also likely to break WTO rules. Fixed payments, loan programme payments and countercyclical payments are crop-specific payments and are limited by the WTO commitment. The US is likely to exceed the 19.1 billion dollars per annum to which it is limited for such payments. In addition, the dairy levy on imported milk is likely to score as a tariff and would be permissible only if the United States were to give other countries equivalent concessions. There is scant sign of that.
Under the Bill, the Agriculture Secretary has the power to,
"make adjustments to the maximum extent practicable"
to prevent a breach of WTO commitments. That is the fig-leaf behind which he hides. It is not, however, a credible position. How will he forecast an overshoot? Will he seriously get farmers to repay money paid to them in order to bring the US into compliance with the WTO requirements?
The sadness in all this is the irony that the Bill should have been announced just a few weeks before the EU Commission was due to come up with an unexpectedly dramatic, radical and welcome proposal for reform of CAP. There would be a massive elimination of trade-distorting subsidies. That coincidence in time is not just irony, it is a tragedy. It is a double whammy. The Farm Bill will have a devastating effect on the developing world's support for the Doha round. With the steel measures, it completely destroys the US's credibility as a joint leader in trade liberalisation and a partner whom we in the EU badly need.
As the noble Lord, Lord Hannay of Chiswick, rightly said, the Bill also makes it infinitely more difficult for Franz Fischler to get the Commission's reform proposals through. French opposition is already virulent, even before the proposals have been formally announced. Now, such opponents have a wonderful pretext for saying, "No. Why should we go through the pain of reform when the US is going in exactly the opposite direction?". We must, none the less, insist that it be done, for the reasons that the noble Lord gave.
With the Farm Bill, the US is in the process of destroying what it has striven for a generation to achieve, just when success was in sight, because the EU was going in the direction that the US had previously pointed. I hope that, ultimately, it will not be too late for wiser counsels in Washington to prevail.
7.58 p.m.
Lord Haskins: My Lords, I have spent the past several months wandering around Europe and North America—both in Canada and the United States—discussing the issues. I share all the concerns expressed by noble Lords about the alarming implications for the General Agreement on Tariffs and Trade.
I agree particularly with the noble Lord, Lord Hooson, that the issue goes wider than agriculture. It is a wider issue than steel. It concerns a sudden unilateral

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decision to make a pre-emptive strike, undermining the approach to defence and NATO that we have taken for 60 years. It relates to unilateral decisions about recognising the democratically elected leader of the Palestinian state. It relates to the unilateral refusal to sign the Kyoto treaty and the refusal to co-operate on the International Criminal Court. It is a sort of John Wayne or Wild West approach to policy making, and it will not do.
Such moves put serious pressure on America's relations with its allies and friends, never mind its adversaries. Frighteningly, such unilateralism can lead to a form of isolationism. That would be as much a disaster for the United States as it would be for the rest of the world. We must remember that only 50 per cent of Congressmen hold a passport—so their perspectives are not exactly international when it comes to these issues. But those attending the summit in Canada last week were especially horrified by this development and by the possibility of what it may do to the NAFTA agreement. The Canadian Minister of Agriculture told me that some compensation for farmers has been announced which, it is claimed, is consistent with what Mr Fischler is attempting to do in Europe.
Turning to Mr Fischler, it is tragic that this should happen when, for the first time in 40 years, we appear to be about to make a radical breakthrough in terms of the Commission's proposals on agricultural reform. I believe that Mr Fischler is moving in the right direction and the proposals must get the support of everyone in Europe. There are too many reservations, even in Britain. I recommend that when Mr Fischler's proposals are published next week the Government should give them huge and constant support. We should make sure that we do not get bogged down in the nitty-gritty. It is a vital presumption ahead of the enlargement of Europe. There are agreements in principle, and all the participant members have signed up to 25 of the 30 chapters that are outstanding on enlargement. The only chapter to which none has signed up is the one on agriculture and food. We must have the Fischler agreement in place to enable us to talk to our friends in the enlargement countries by October. Time is against us.
It follows that time is against us on Doha. We have to come to terms with an agreement in Doha next March. I plead strongly with the Government to support the Fischler recommendations when they are published. They are an essential basis for both of those great historic proposals to go forward.
We must be patient with the United States and not resort to tit-for-tat action. We do not have time for it, and it would be improper. We must hope that common sense will prevail in the United States. I have met many people in the United States who are quite ashamed of what is going on at the present time and who are looking for opportunities to change it. Oddly enough, I see the best hope in a bizarre alliance of the NGOs, who are obviously concerned about how world trade is going to develop. They are misled in some ways, but their interests are the interests of the developing world. The NGOs are coming together with the
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constitutionalists who believe that 1775 did matter. Sometimes I look at the Attorney-General in the United States and wonder whether he has read the Constitution and whether he adheres to it.
Finally, there is big business itself. Someone in a large multinational told me the other day that he trades in 121 countries. It is not in the interests of American big business to allow this isolationism to develop. I am pretty confident that American business will see the foolishness of the Administration's ways and begin to apply pressure on it.
Finally, I hope that the President himself will listen rather more to his father and to the Secretary of State, Colin Powell, and reject the populist and self-destructive jingoism of his Vice-President, his Defence Secretary and the Attorney-General in particular.
8.3 p.m.
Lord Palmer: My Lords, I too thank the noble Lord, Lord Carter, for initiating this important debate and must declare an interest as someone who tries to farm in the Scottish Borders. I am also a residual beneficiary of a banana plantation in the West Indies. After so many distinguished contributions, not surprisingly I have crossed out almost all of what I had intended to say—much, I am sure, to your Lordships' relief.
The US Government's support for this Bill is a significant change in direction, both from their policy position outlined last year and from the previous Farm Bill. It will have serious implications for farming around the world. Among others—as indeed was mentioned by the noble Lord, Lord Carter—the Cairns Group has condemned it, suggesting that the size of the subsidies will have a damaging impact world-wide on agriculture. Sadly, I fear that it will provide comfort for those WTO members which are determined to resist meaningful reform of the agricultural sector.
The Bill incorporates large increases in expenditure, with spending on commodity support up by around 70 per cent. Total funding available for farm spending was set at approximately 170 billion dollars for the next decade. However, it must not be forgotten that the original cost was calculated on the basis of overoptimistic estimates of commodity prices.
It is important to bear in mind that, by comparison, direct payment rates for wheat in the United Kingdom were worth around £35 a tonne last year. Intervention prices are currently around £70 a tonne. As such, the sum of intervention and direct payments is broadly similar to the total level of support available in the United States. However, the European Union intervention system is subject to quality requirements, so the effective level of support available for EU grain is lower than that indicated by the intervention price. In contrast, all US grain qualifies for the target price level of support, regardless of quality.
Notwithstanding the dramatic increases in the level of support brought about by the Farm Bill, the US continues, ironically, to champion free trade. It continues also to point at others, notably the

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European Union, arguing that complaints about the US Farm Bill are simply an effort to deflect attention from their own policies, or lack of.
The noble Lord, Lord Carter, mentioned this and it is worth repeating. In regard to this Bill, the chairman of the House Agricultural Committee emphasised:
''This is for rural America. This is not for rural Mexico; this is not for rural Canada and this is not for rural Europe".
As a direct descendant of an American President, albeit an assassinated one, I find these words somewhat chilling.
I am always criticising my children when they use the expression "unfair", but it really is extraordinary the difference between the US and the EU attitudes towards agriculture. Perhaps I may ask the Minister exactly what representations have been made to the US Government in respect of this Bill.
Here in the United Kingdom, our agriculture industry is in real crisis and all of us involved in it look to the Minister to give us a guiding hand. He will not be surprised that once again, I believe for the 16th time on the Floor of the House, I am asking him to look at the role that biofuels can play in helping to restore farming margins and in helping to meet Her Majesty's Government's commitment to cutting greenhouse gas emissions. It must make sense and I beg of him to seize this opportunity now before it is too late.
8.7 p.m.
Lord Linsey of Talgarth: My Lords, I congratulate the noble Lord, Lord Carter, on introducing the debate. I shall not mince my words. I believe that the American negotiators have played a lot of kidology over the years in relation to this issue. It is my belief that this Bill bucks the bronco of the markets in world trade in farmed commodities. The noble Baroness, Lady Thatcher, once said, "You can't buck the market". But that is precisely what the Bill will do. It is the Republicans who are doing it for short-term gain in the autumn elections, particularly in the Midwest. It bucks the US budget. It bucks the EU CAP and Agenda 2000. It bucks the Cairns Group in New Zealand, Australia, Canada and other countries; and it certainly bucks the third world.
The Bill ignores the crucial principles of supply and demand economics. Higher prices equal more production, which equals a surplus over demand. Through deficiency payments and target prices, without a cap on quantity and without set-aside, it will encourage larger USA farmers to produce more, with support for exports as well. It will result in the overproduction in the US of farm commodities. Secondly, it will lower farm commodity prices on world markets. Thirdly, it will undermine farm incomes in the rest of the developed world and many will have to give up farming as a result. Finally, it will decimate third world farmers and increase poverty. There will be an exodus from the land and all the consequences that that will bring.
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The alternative arguments in the United States supporting the Bill are just plain baloney—to use a good American word. The Washington Post said:
"The most likely scenario is that in two years we will be overwhelmed by surplus agricultural production, low commodity prices and excessive government payments. We will have lost cases before the World Trade Organization, and government outlays will exceed budget limits. We will be forced to cut benefits or rewrite this legislation".
That is an American comment on its own Bill.
We have heard the figures and I do not want to go over too many, but the 180 billion US dollars is equal to one third of the whole UK budget for one year. We should recognise the enormity of that. The increases in state payments by 70 per cent will inevitably lead to the breaking of the WTO rules, despite many US contrary claims.
Doha reform proposals will be undermined and the US is speaking with forked tongue on many of these issues. The contributions of the noble Lords, Lord Brittan, Lord Haskins and Lord Hoosan, show that this is a serious matter for the world at present. It undermines confidence in world trade. Of course the conservation budget will go up by 80 per cent. I could quote from the pages that I have with me, but I do not have time to do so. It will be devastating for smaller family farms in the United States.
By contrast, the Freedom to Farm Bill 1996 tried to wean farms with reduced support. As we know, prices collapsed and farmers had to be bailed out to the tune of 30 billion dollars. The basis of EU policy is much more enlightened. The reductions in production support focused on food safety and quality, rural development and environmental services. I believe that Mr Fischler has many problems and he needs maximum support at present. The question is whether this policy will be sustainable in the EU 'when confronted by the US Farm Bill. If world prices for basic commodities collapse and they cannot be sustained, production in the EU will be under threat. There is no doubt about that. The CAP reforms may not be carried through successfully and when that is addressed in relation to the enlargement of the EU, it looks like a doomwatch scenario. The impact on farming in the UK, with higher prices in the US, will cause immense problems for UK farmers whose incomes are already really low.
As the noble Lord, Lord Hoosan, said, we need to take a wider view. When we consider the current unilateral behaviour of the Americans, such as their spurning of the International Court, their threat to withdraw troops from Bosnia, the accountancy frauds, and now the impact of this Farm Bill coining over the horizon, it is vital that the Government represent our feelings to the United States and that wiser counsel prevails.
8.14 p.m.
Baroness Byford: My Lords, I, too, thank the noble Lord, Lord Carter, for giving us the opportunity to debate this important issue tonight. I am sure that he has been well rewarded by the quality and depth of the

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speeches made by all noble Lords. Before I continue, I remind noble Lords of my own family's farming interests.
This American Farm Bill is the wrong Bill at the wrong time and it sends out the wrong messages. It is deeply unfortunate as it comes at such a crucial time in the negotiating cycle that is taking place in the EU and globally.
I looked at the conservation measures that are contained in the American Farm Bill, which envisages spending 26 billion dollars over the next six years for stewardship and 254 million dollars over the next six years for grasslands. Those are both new provisions. At the same time, funding for the environmental quality incentive programme will rise from 200 million dollars to 1·35 billion dollars. Further rises are promised for the conservation reserve, the wetlands reserve and for farmland protection. I think that some of us share those objectives.
However, by far the greatest expenditure is the rise foreshadowed in the Bill—an extra 37·6 billion dollars over six years for commodity support, to which all noble Lords have referred.
Even so, we should acknowledge that despite these new financial commitments, the United States spends less in support of its farmers than we do in the EU. I mention that only because the Americans will remind us of that when we come to negotiations. Having acknowledged that fact, we are now in the position that Europe is moving away from commodity support at the very time that the US is moving back in that direction. It seems likely that in future WTO discussions the expression "creative accounting" will come to the fore. It is not welcome, and it will acquire a whole new meaning. As other noble Lords have said, stalemate must not be allowed to prevent more liberalisation of trade. Nor must we let the Americans become isolated. We all need each other and we all need to move the reform programme forward.
United States farm prices are low. Farm prices are low world-wide, including in this country. Low farm prices usually reflect low demand, so an oversupply situation arises. United States aid, tied to US supply, will be used to deliver the surplus crops to those countries whose people are hungry. Unfortunately, it has been shown that the effect of dumping low priced goods in a developing country is to price the local producer out of the market. He then stops producing altogether and the aid, which is made with the best intentions, makes the position worse.
No debate about farming would be complete without some reference to the agricultural catastrophe that is happening in Africa, where, according to the World Food Programme, more than 5 million people are starving or are about to starve in Zimbabwe alone and where 13 million people in the whole of southern Africa could need feeding. Drought is often blamed but sadly in Zimbabwe, the difficulties are man-made. It is a country that has hitherto fed itself and its African neighbours. Even if the G8 countries fulfil their Doha commitment to help African agriculture
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through improved market access and the reduction of export subsidies, the effort will be wasted unless action is taken to rebuild the essential infrastructure of good government and effective farming.
In a world where some countries such as ours are blessed with food in plenty, while in others millions die from starvation, a solution must be found urgently. Is it right that we continue to give surplus food, in what some regard as "philanthropic dumping", if there are opportunities for some of those countries to be helped to produce more food themselves? Surely that is more important than giving them our excess food.
Farming in the UK is at a crossroads, and we have had many debates in the House about where we see the future in farming. For many the outlook is bleak. Profit—a word that we have not used tonight—is something that all want to achieve. These coming months are crucial to us all, including the United Kingdom Government, the European Parliament and the WTO. The inclusion and encouragement of developing countries must be allowed to proceed.
We must not duck the basic challenge to find solutions to these world-wide problems which have been clearly identified in the debate. Much courage, persuasion and encouragement will be needed. I hope that the Government put their full weight behind the negotiations that will continue to take place at the European level and into the WTO talks that are to be held shortly. I also hope that they put the future of our own people and, more importantly, those in developing countries at the top of those talks.
8.20 p.m.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, I thank my noble friend Lord Carter for initiating this debate. It marks a change in our relationship. For five years, as Chief Whip, he told me what to do and now he asks me what the Government are to do. He has also managed to achieve a debate with a high degree of consensus in the House. Although that is general on trade issues, it is regrettably rare on agricultural issues. The Government concur with much of what has been said.
The situation is sad. As the noble Duke, the Duke of Montrose, and the noble Lord, Lord Brittan, pointed out, for many years the United States has been the advocate and the driver of liberalisation in trade, including agricultural trade. In the Uruguay round, the United States pressed the hardest for agricultural policies to be liberalised world-wide. Within the European Union, the United Kingdom has been its best supporter and began to bring the European Union along that road. No other sector of world trade is more distorted than agriculture, and therefore in greater need of liberalisation. It is clear, to answer the noble Lord, Lord Hooson, that we do not regard this as an internal US matter. It is of supreme global importance.
The Uruguay round was progress. We have made some advance. In answer to the noble Duke, the Duke of Montrose, the US has stopped its use of direct

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export subsidies, although it still uses export credits and food aid in the same direction. The EU has reduced export subsidies by a quarter, which is a start, but we need to build on that. In 1995, at the end of the Uruguay round, we committed ourselves to a continuing programme of reductions in agricultural support, which distorted trade. No country fought harder for that than the United States.
Therefore, it was with some dismay that the Government greeted the news of the Farm Bill. Yes, we know that that is probably not the American Administration's starting position, and that much internal American politics has been involved in it. Yes, we accept that the American Administration remains committed to liberalisation through the Doha round. I also accept the various points that have been made that the Americans will face budgetary problems, as my noble friend Lord Carter has said, but there is much opinion in the American media, as the noble Lords, Lord Haskins and Lord Hooson, have said. Both the noble Lords, Lord Livsey and Lord Grenfell, quoted the Washington Post.
There is much American opposition to this approach. For the moment it is damaging. It represents a reversion to old forms of production and to linked subsidies of the kind that we thought that the United States had abandoned after 1995. It will mean direct commodity support of over 50 billion dollars. It will also be counter-productive. Although as the noble Lord, Lord Williamson, indicated, there had been previous reversals of the 1995–96 position by emergency aid, that was post facto. In this case, American farmers are virtually guaranteed the money and, therefore, will make their production decisions on that basis. Precisely because American farmers are being given this form of security, as my noble friend Lord Carter said, the Bill is likely to create the very downward pressure on prices that in internal American terms it allegedly seeks to offset.
Subsidies of this kind are frankly circular and futile. The more they try to protect American farmers from falling markets, the more they contribute to further holes in those same markets. That eventually will be devastating to American farmers and, in the process, very devastating to farmers in developing countries.
However, there are some positive aspects. The noble Baroness, Lady Byford, referred to the measures on conservation. There are also measures on nutrition and on R&D that we would support and which we would wish to see reflected in European approaches. The main core of the Farm Bill is backward looking. If the United States goes down that road, it will appear to have learned nothing from the progress made since the Uruguay round. As the noble Lord, Lord Brittan, implied, there are specific positions in the Bill, such as the dairy levy, which may be directly incompatible with WTO obligations. My information is that the economists are calculating that there is a 30 per cent chance that expenditure under the Farm Bill will exceed the WTO ceilings in total. That presents us with a very real problem in relation to the United States' commitment.
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More importantly, the United States does all this in a patently beggar-my-neighbour fashion. The neighbours most beggared by this are those countries of the developing world. The noble Baroness, Lady Byford, spelt out the dire consequences and repercussions of that, as did my noble friend Lord Grenfell.
Together with other noble Lords I do not much like the Farm Bill. It has set us back a long way. However, there are some qualifications. The American subsidies, as noble Lords have said, are still lower than those in the European Union. Under the Farm Bill, as my noble friend Lord Carter has said, the PSE—the producer subsidy equivalent—which is the best measure of equivalent subsidy for the US, is forecast to rise to 60·5 billion euros in 2005. That is about two-thirds of the European level at the beginning of this period of the common agricultural policy.
It is true that in certain sectors, as the noble Lord, Lord Palmer, indicated, there is a closer equivalent and the balance possibly goes the other way, but the overall calculation is still that Europe has a bigger absolute form of subsidy for farming than does the United States. Therefore, we must hesitate before casting too many stones. Nevertheless, Europe is moving in the right direction and America is moving in the wrong direction.
All that, and the size of those subsidies as compared with the support that farming receives in developing countries and elsewhere, indicates the need for Europe and the United States to reduce production support. The European Union, and the United Kingdom in particular, has no intent ion of going down that road. The European Union has already committed itself to cuts in export subsidies, to tariffs and to cuts in domestic agricultural support. The mid-term review proposals on the reform of the CAP, to which I shall turn in a moment, also move us in that direction. Therefore, to answer the noble Lord, Lord Hannay, it is the intention of Europe as a whole, as well as the United Kingdom, to respond to the Farm Bill by taking a strong liberalising offensive in the WTO talks in Geneva.
Internally within Europe, next week Commissioner Fischler will unveil his proposals for CAP reform in the mid-term review. Although no one has seen the final paper, there have been a number of leaks, but I believe that the commissioner intends to be forward looking. I have been greatly heartened to hear the commissioner say in terms that the failings of the US Farm Bill are not an excuse for Europe to drag its heels on its own agricultural reform.
The noble Lord, Lord Williamson, had the right view, that whatever the details of that proposal, the strategy implied will certainly be in the right direction. Those who cling to the old CAP will try to seize on the Farm Bill to argue that the time is not right for Europe to be changing its own policies. Indeed, outside Europe others are already arguing that line, that we should go slow on the WTO negotiations that were launched so successfully in Doha. Developing countries throughout the world have also expressed

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their repugnance at the signal that the Farm Bill sends to them and are taking what I hope are wrong messages that the Americans have abandoned the liberalising agenda. In our own contacts with the US Government we have been firm and deplored the way in which the Farm Bill gives comfort to those who oppose reform, as was evident in the Bali discussions and the approach to the World Summit on Sustainable Development. We have also emphasised the impact on developing countries. It is true that the world is entitled to expect better from America. Nevertheless, some of the feedback from our American contacts indicates a willingness to recognise a commitment to a long-term strategy of liberalisation and to the Doha process in particular.
At Doha last year, all members of the World Trade Organisation pledged to reach a new draft agreement by March next year. That deadline remains in place and we all are actively negotiating towards it. Therefore, there is no deadlock in Geneva. That process is continuing and that target remains for America as for us.
As for Europe, the case for reaching agreement is clear. We must move away from the traditional forms of CAP and encourage others to do so. Support based on high import barriers, expensive intervention schemes and subsidised exports does not serve European consumers, farmers and the environment well. We want land management support based on developing environmental outcomes, perhaps including the aspects to which the noble Lord, Lord
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Palmer, referred for support for biofuels. We do not want a policy that continues to be based on market-distorting interventions.
The European Commission has taken a strong approach to WTO negotiations. It has tabled strong and credible proposals and is pursuing them effectively. If that is not done, we risk starting a new cycle of trade wars. We should not underestimate that danger. Nevertheless, I believe that the WTO process will succeed and that the American Administration wishes to engage once more in the liberalising process. I had discussions with J.B. Penn, the deputy agriculture secretary, only last week.
We have been firm in our contacts with the Americans. We have said that we deplore the Farm Bill and have told them that we want a change of approach by the Americans. I do not go as far as my noble friend Lord Haskins, who suggested that the Americans are moving towards a policy of total isolation, but the situation is very dangerous. We should not engage in tit for tat but must say to our American friends at all levels, "Practice what you preach. If you revert to the liberalising agenda, we will be the first in Europe to support you. If you continue down the present road, you risk not only your own liberalising agenda and principles but inflicting great harm on countries and populations that can least afford to be affected in that way".
My thanks again to my noble friend Lord Carter for initiating the debate and to all noble Lords who contributed.
House adjourned at twenty-seven minutes before nine o'clock.

Official Report of the Grand Committee on the
  Adoption and Children Bill
  Tuesday, 2nd July 2002.
  Adoption and Children Bill

    The Committee met at half-past three of the clock.
    [The Deputy Chairman of Committees (Lord Ampthill) in the Chair.]
    Clause 13 [Information concerning adoption]:
    Baroness Thomas of Walliswoodmoved Amendment No. 46:
    Page 10, line 32, at end insert "and his department or any other government agency designated by him shall produce an annual report to Parliament detailing such statistics as are deemed relevant and reviewing progress made on the previous annual report"
    The noble Baroness said: I rise to move Amendment No. 46 in the name of my noble friend Lady Barker and myself. The amendment is to subsection (5) of Clause 13, which is concerned with ensuring that statistical and other information can be obtained by the Minister from the adoption agencies themselves and the Magistrates', County and High Court officials. Subsection (5) says that the Minister may publish abstracts of this information. Our amendment adds a requirement for the department or some other agency to produce an annual report to Parliament containing relevant statistics and reviewing progress since the previous year, which, quite plainly, enlarges upon the original requirement.
    We have put down this simple amendment for four reasons. First, the Government are committed to achieve a considerable increase in the numbers adopted in any year. Parliament and the public are entitled to know how much progress is being made. Secondly, there needs to be a greater understanding of the new processes of adoption and how they are bedding down. Thirdly, there is the general principle that transparency, openness and all these wonderful things aid enormously in a practical way in that they tend to prevent people making the same mistake twice. Finally, we want to ensure that this reporting back actually occurs, and we believe that this is best achieved by putting the Government's duty in respect of the matter of reporting to Parliament on the face of the Bill. I beg to move.
    Baroness Andrews: The Government have much sympathy with the intention behind the amendment. We are all for openness, we are all for statistics being available so that progress can be monitored, and we are all for government being accountable. Under Clause 13 we already have the requirement for adoption agencies and courts to give the Minister statistical and other general information relating to adoption. The appropriate Minister can use that
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    information for statistical and other general purposes, such as for performance management. Subsection (5) enables the appropriate Minister to publish abstracts of that information.
    The intention of the amendment is, quite understandably, to enlarge the clause, as the noble Baroness said, to ensure that there is transparency and accountability, that performance management structures work and that the intention of the Bill comes to fruition.
    I would like to refer to what we have in terms of the four points that she made. In the Children Act report itself, which is an annual report, we have a section on adoption which brings together key analysis and information. It has a section relating to adoption statistics. The report for 2000 is currently available. The report for 2001 is just about to come out and includes, for example, information about the numbers and ages of children adopted from care, the time scales and the length of time taken to find adoptive placements. It also includes key judgments and messages from the inspections of councils' adoption services. So we have an annual report to Parliament which can also be used by practitioners and by people involved across the field in monitoring progress of that kind.
    It is our intention to continue to provide that information and, to pick up on what the noble Baroness said, certainly to make sure that the next annual report—the one after the Bill becomes an Act in 2004—will reflect the changes and the improvements that will have been made as a result of the Act. We are absolutely committed to that.
    One of the reasons for saying that the Children Act is a good vehicle is because it enables us to put adoption into the context of children's services as a whole and, alongside the protection of children—children in care—we can see what is being achieved through adoption. I commend that to the noble Baroness.
    In addition, there is a range of dynamic statistics available—which, if the noble Baroness so requires, I will certainly write to her about—which describe these issues. They are available to Parliament, on line, in the form of different reports and inspection agreements. In the light of the debate today I can assure the noble Baroness that the next Children Act report will take into account the points that she raised.
    Baroness Barker: On behalf of my noble friend, I thank the Minister for her answer. The reason for asking for this report in the amendment is that it has become clear throughout our debates so far that we are hampered by a lack of information about the current system of adoption. Furthermore, government policy making has been hampered to a large extent by a lack of information. For example, we talked the other day about the lack of a tracking system. As we have already noted in our debates, many of the children that we are talking about end up being a part of the statistics of a plethora of different services.

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    The intention behind the amendment is to ensure that adoption in its widest sense had a locus for one coherent analysis. My fear is that given the diffusion of services at local level—not only social services but also health and education services—somewhere along the line what is happening in the adoption processes will be lost. Were we at a different stage of the Bill we might pursue this issue. But we are not and we will of course withdraw the amendment.
    However, I urge the noble Baroness to think again about the need to look at adoption in its fullest sense and in a coherent fashion—not in a way which is distinct and apart from other services, but with a very specific analysis. As we have noted time and time again in our debates, many things happen to children which, although not unique to adopted children, happen more to adopted children than to others. We are in danger of losing that somewhere along the line.
    Lord Campbell of Alloway: I will be very brief. I am not quite sure about this amendment because the issue seems to be whether there should be a mandatory obligation on the Minister to produce an annual report to Parliament. There is no issue about anything that any noble Lord has said so far. I agree with it all. However, I cannot for the life of me see why, looking at subsections (4) and (5), it is necessary to put a mandatory obligation on the Minister to produce a report to Parliament. He can do it within his own remit and no doubt will do what he wishes.
    Baroness David: Perhaps I may ask a question which I put down as a Question for a Written Answer. I do not know whether it would come into a report of this kind. How many adopters have been rejected in each of the past five years? I hope to receive an answer from the official quarters quite soon, but I wondered whether it was the kind of thing that would be reported, or whether it was reported in the Children Act report.
    Baroness Andrews: I am grateful for the intervention of the noble Lord, Lord Campbell of Alloway, and the point is well taken. In relation to the question about information relating to adopters who are rejected, we do not have that information at present and, without taking further advice, I am unable to answer it. I see that there would be difficulties under any circumstances and systems of collecting that kind of information. Perhaps the noble Baroness will allow us to come back to her on that point.
    Baroness Thomas of Walliswood: Perhaps I may refer to an earlier discussion. The clause states:
    "Each adoption agency must give to the appropriate Minister any statistical or other general information he requires about—

    (a) its performance of all or any of its functions relating to adoption,

    (b) the children and other persons in relation to whom it has exercised those functions".

    Presumably, therefore, if the Minister requests information about the number of people who are rejected, the adoption agencies will be obliged to and will be able to provide that information.
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    We have had an interesting discussion. I will read again what the Minister said in response to my original proposal and meanwhile I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 13 agreed to.
    Clause 14 [Default power of appropriate Minister]:
    Earl Howemoved Amendment No. 47:
    Page 10, line 34, leave out subsection (1) and insert—
    "(1) If as a result of an independent review any local authority is found to have failed, without reasonable cause, to comply with any of the duties imposed on them by virtue of this Act or of section 1 or 2(4) of the Adoption (Intercountry Aspects) Act 1999 (c. 18), the appropriate Minister may make an order declaring that authority to be in default in respect of that duty."
    The noble Earl said: Amendment No. 47 modifies subsection (1) of Clause 14. Under the existing Clause 14, when a Minister determines that a local authority has failed to comply with its duties, either under the Bill or under the Adoption (Intercountry Aspects) Act 1999, he can make an order declaring the authority to be in default. That process seems to exist quite separately from the very significant independent review of determination provisions in Clause 12.
    The Bill is silent as to how the Minister might form the view that there is no requirement for him to consider the outcome of the independent review panels that he will set up. If there is to be an independent review process—and we believe, as was debated the other day, that this should be stronger and more extensive than provided for in Clause 12—it seems only logical that the review process is the best way to determine whether an authority is in default. That is what the amendment seeks to achieve.
    If the Minister is not minded to look with favour on the amendment, I hope that she will say how the Government expect the process of adoption to have failed before a default declaration is made. What other considerations will lead the Minister to such a decision? I beg to move.
    3.45 p.m.
    Lord Campbell of Alloway: I rise to support the amendment. It identifies a gap in the process and, in my opinion, fills it satisfactorily. But there is no doubt that there is such a gap.
    Baroness Andrews: Clause 14 provides default powers for the appropriate Minister which are exercisable where a local authority has failed, without reasonable excuse, to comply with any of its duties imposed by the Bill or Sections 1 or 2(4) of the Adoption (Intercountry Aspects) Act 1999.
    It introduces a specific default power for adoption, modelled on Section 84 of the Children Act 1989, and brings it into this new adoption legislation. It replaces, in relation to adoption, the general default power currently provided by Section 7D of the Local Authority Social Services Act 1970. This is an aspect of the role of consolidation the Bill plays in relation to adoption as a whole.

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    The appropriate Minister may make an order containing directions to ensure that the local authority complies with the duty within the period specified in the order.
    The noble Earl has addressed Amendments Nos. 47 and 48 to the absence of a link between the provisions in Clause 12 for the independent review mechanism and this clause. It appears that the intention is to ensure that where a failure comes to light as the result of an independent review, the appropriate Minister may make a default order.
    However, I suggest that the effect of the amendment is to narrow the scope of Clause 14. Perhaps I may explain why. Under Clause 14 the appropriate Minister may make a default order using any information that is available to him about a local authority's failure to comply with its duties. That information can come in a variety of ways. It could come through social services inspections reports, through the courts and, after April 2003, from the National Care Standards Commission which will be inspecting adoption authorities.
    We would also expect the independent review panel, which is set up under Clause 12, to inform the Minister when it becomes apparent that there is a serious failure on the part of a council. While one would not want to generalise, one could imagine a range of serious failures in relation to the process of making adoption orders that could be based on previous bad practice. It is our expectation that the review will be looking out for such matters. The appropriate Minister could use that information when making a decision about whether to make a default order.
    These amendments would therefore restrict the appropriate Minister's flexibility to draw on all forms of information. They would permit him to exercise his default powers only where, as the result of an independent review, the local authority was found to have failed, without reasonable excuse, to discharge one of its duties. Such a restriction could not be justified. It is essential for the appropriate Minister to be able to exercise his default powers where he is aware of such a failure, regardless of the way the information reaches him.
    I also suggest that the amendments might make it more difficult for the Minister to intervene. The default power is intended to be used where there have been a number of failures on the part of the local authority. Not all cases of failure would, however, result in an application being made to the independent review panel. Not everyone, for example, would want an independent review. That would mean that the Minister would be presented with other forms of evidence that would not have been reflected in a review panel determination. I do not believe that that was the intention of the amendments, but this is the effect that they would have.
    I hope that I have been able to reassure Members of the Committee that the powers in Clause 14 are broad enough in scope for the Minister to make a default order using information about a local authority's
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    failure to comply with its duties, which is made available to him through the entire independent review process.
    Baroness Thomas of Walliswood: Our Amendment No. 48 is similar to Amendment No.47. I believe there are only a couple of words that are different. I suspect that part of the motivation behind the measure is inherent in the word "independent", as opposed to something which is just done by the Minister himself. It may be that the Minister's reply, if looked at in its entirety on a sheet of paper, will satisfy us that we have the independence that we require without necessarily going ahead with the amendment. We will have another look at it before a later stage of the Bill.
    Earl Howe: That was a very helpful reply from the Minister. The amendment was really designed to tease out how this process would work, and what the link would be between the independent review process and the Minister's own powers. I quite see that the amendment, albeit unintentionally, restricts the scope for action, and that is not, of course, what we would seek to place on the face of the Bill. I also recognise what the Minister said initially, that this is designed to reflect the model first used in the Children Act 1989, and of course there is an advantage in having that consistency.
    As the Minister will be aware, we feel that the independent review process needs to be broader in its own scope, but I take her point that whether or not that happens, the Minister's own ability to act should not be fettered, and what she has said will make the whole process much clearer. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    [Amendments Nos. 48 and 49 not moved.]
    Clause 14 agreed to.
    Clause 15 agreed to.
    The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath)moved Amendment No. 50:
    After Clause 15, insert the following new clause—
    "DISTRIBUTION OF FUNCTIONS IN RELATION TO REGISTERED ADOPTION SOCIETIES
    After section 36 of the Care Standards Act 2000 there is inserted—
    "36A VOLUNTARY ADOPTION AGENCIES: DISTRIBUTION OF FUNCTIONS
    (1) This section applies to functions relating to voluntary adoption agencies conferred on the registration authority by or under this Part or under Chapter 2 of Part 1 of the Adoption and Children Act 2002.
    (2) Subject to the following provisions, functions to which this section applies are exercisable—

    (a) where the principal office of an agency is in England, by the Commission,

    (b) where the principal office of an agency is in Wales, by the Assembly.

    (3) So far as those functions relate to the imposition,variation or removal of conditions of registration, they ma) only be exercised after consultation with the Assembly or (as the case may be) the Commission.

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    (4) But—

    (a) where such a function as is mentioned in subsection (3) is exercisable by the Commission in relation to an agency which has a branch in Wales, it is exercisable only with the agreement of the Assembly,

    (b) where such a function as is mentioned in subsection (3) is exercisable by the Assembly in relation to an agency which has a branch in England, it is exercisable only with the agreement of the Commission.

    (5) The functions conferred on the registration authority by sections 31 and 32 of this Act in respect of any premises of a voluntary adoption agency are exercisable—

    (a) where the premises are in England, by the Commission,

    (b) where the premises are in Wales, by the Assembly.

    (6) In spite of subsections (2) to (5), regulations may provide for any function to which this section applies to be exercisable by the Commission instead of the Assembly, or by the Assembly instead of the Commission, or by one concurrently with the other, or by both jointly or by either with the agreement of or after consultation with the other.
    (7) In this section, "regulations" means regulations relating to England and Wales."
    The noble Lord said: I have spoken to this amendment in a previous group. I beg to move.
    On Question, amendment agreed to.
    Clause 15, as amended, agreed to.
    Clause 16 agreed to.
    Clause 17 [Placement for adoption by agencies]:
    Lord Clement-Jonesmoved Amendment No. 51:
    Page 12, line 12, leave out "An adoption agency" and insert "Where an adoption agency is satisfied that a child ought to be placed for adoption it"
    The noble Lord said: We now come to Chapter 3 of the Bill, which is a very important and quite lengthy chapter, dealing with placement for adoption and adoption orders. I would call Amendment No. 51 a probing amendment except that, of course, in Grand Committee all amendments really by definition are probing.
    The essence of this particular amendment is to discover precisely what the duties of an adoption agency are under Clause 17. What are the qualifications for the use of their powers under subsection (1)(a), or (b), when they are making a decision about placing a child for adoption, or the use of the power to place a child for adoption with prospective adopters, or the decision to leave a child with those with whom a child has been placed as prospective adopters? What process should the agency have gone through in order to make a decision that either paragraph (a), or paragraph (b) should be invoked? That is why this particular amendment, the wording of which is as follows,
    "Where an adoption agency is satisfied that a child ought to be placed for adoption"
    is a useful way of teasing out what duties the agency should have. Indeed, it would ensure that an agency had to go through a process of decision-making. That is by no means clear from the existing wording of the
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    Bill. It is important that the process should be gone through and be susceptible to legal challenge if it is not correctly followed. I beg to move.
    Baroness Andrews: We fully appreciate the intention behind the amendment. We have moved on to Chapter 3 and this clause whets our appetite. We are getting to the heart of the process, which is where we want to see the changes which will benefit children.
    The clause does not deal with the process of decision-making leading up to placement. It is a framework clause essentially. Its purpose is to make it clear that adoption agencies may only place a child for adoption if they have the consent of the parents or, otherwise, under a placement order. I am sympathetic to what the noble Lord said. I want to reassure him that the intention is that an adoption agency should place a child for adoption only where it is satisfied that the child ought to be placed for adoption. In coming to this decision, the full range of powers and requirements under Clause I will bind the agency in that respect.
    The Bill follows the existing practice of the Adoption Act 1976. That Act did not set out on the face of the Bill any reflection on process or concepts of what ought to be considered. The process for decision-making by adoption agencies will be set out in regulations, as it is indeed in the current regulations under the 1976 Act. We have reproduced the process which has been in place for 25 years.
    As noble Lords know, the process at the moment is that where, as a result of a case review, a local authority is considering adoption for a child it is looking after, or a voluntary adoption agency is considering placing a child for adoption, the first step is to refer the case to the adoption panel, an independent panel made up of specialist and lay people. The panel makes a recommendation to the authority or to the voluntary agency as to whether adoption is indeed in the best interests of the child. It is then up to the authority to decide whether to accept that recommendation. If it does, at that point the authority is satisfied that a child ought to be placed for adoption.
    The new regulations will set out a similar process. In the context of the Bill, the decision that the agency is satisfied that the child ought to be placed for adoption should be made before a child may be placed with the consent of the birth parents. Again, that is what the regulations will provide. They will also provide requirements to consult the child directly throughout the decision-making process, to record his or her views, and to ensure that they are taken into account, for example, in panel decisions.
    Under the provisions of the Bill in Clause 1, the child's welfare is, as we have said many times already, the paramount consideration. The duty is to bear in mind the harmful effects of delay in decision-making. The welfare checklist set out in that clause will apply throughout the decision-making process.
    Where a local authority is satisfied that, as a result of this process, a child ought to be placed for adoption but the parents do not consent, the agency should

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    consider also the significant harm that might occur and that the threshold is met. Under Clause 21(1), it will be obliged to apply for a placement order. Therefore, I want to reassure Members of the Committee that our intention has been that there should be a proper decision-making process—there is no question about that—in the adoption agency that determines and to the agency's satisfaction. It is in the best interests of the child to be placed before any placement happens.
    That said, however, I can see that there is some advantage in what the noble Lord has said as regards absolute clarity. One of the things we are trying to do in this process in the new Bill is to make absolute clarity as regards process and choice for parents and children. Therefore, the Government are certainly willing to consider the points raised by the amendment. We shall look at the proposed wording in detail and any wider implications of making a change along the lines proposed with a view perhaps to returning to this issue on Report.
    4 p.m.
    Lord Northbourne: Perhaps I may widen the question and ask whether we shall have an opportunity to see the guidance before the Bill is passed, because I suspect that there are a number of points of detail that some of us may wish to look at and think about.
    I wish to raise one issue on this amendment, although it is not appropriate to it. I confess that I thought of setting down an amendment about it but could not see how to do so. There is, rightly, a great deal of emphasis on the welfare of the child. My wife sat for many years in the juvenile courts and she made the point to me that when you take a woman's child away you destroy that woman. Therefore, we ought to build somewhere into the machinery support, counselling and consideration for that woman's position.
    Baroness Andrews: The commitment of the noble Lord to the welfare of children is well known in this House, and I take entirely the points he has made. We have had discussions on the regulation-making process and I wish to assure him that there will be a full consultation process. We have two years to ensure that before the Act comes into effect the regulations are as sound and as inclusive as possible. So in that process, the concerns that he has raised will be addressed.
    As regards the seriousness of the choice which is being made by the woman or, indeed, the family giving up a child for adoption, we are very well seized of that. When we come to discuss in the next clauses the placement with consent, we shall be saying how seriously we are addressing the whole question of the negotiation which goes on with parents to ensure that they know full well what they have agreed to do and the counselling that can be provided in that process. I hope that that will satisfy the noble Lord.
    Lord Clement-Jones: I call that a splendid debut for the noble Baroness on the Bill. I know that Ministers
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    do not lightly bandy around words like "sympathetic", and I was waiting for the point where I was going to be let down. However, having taken us through a very considered view of the process which is again to be enshrined in regulations, to find that the noble Baroness still believes that there is room for improvement on the current wording is extremely heartening. That bodes well for the clarity of this chapter in the Bill, which we shall debate at greater length as regards the content. I am pleased that the Minister accepts the fact that there is room for improvement on the wording, even after 25 years of use of the Adoption Act 1976. I look forward to seeing how the Minister's considerations progress between now and Report and in the meantime I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Clement-Jonesmoved Amendment No. 51A:
    Page 12, line 17, leave out "section 18 or"
    The noble Lord said: We now come to the meat of Chapter 3 and on all sides there are a considerable number of concerns about the provisions in the Bill regarding placement orders and placement by consent, particularly in relation to potential conflict with the Children Act and the unnecessary complexity regarding the implications of parents giving consent to placement.
    I offer three examples. In circumstances where a parent consents to adoption and subsequently changes her mind, she cannot remove the child even if the child has not been placed for adoption. It may be reasonable for there to be some delay in cases where the child is placed with adopters but it is hard to see the reason for delay where the child has not even been so placed.
    In situations where a relinquishing mother consents to the adoption placement and obstructs the local authority from ascertaining the views of the father without parental responsibility and the wider family, the adoption agency faces the dilemma of whether to place with consent or insist that the father and possibly the wider family are consulted.
    The third example is where a birth parent can give consent to placement even before the child is six weeks old but could then be committing a criminal offence if she changed her mind and tried to take the child home.
    There are huge complications in this section of the Bill. Members of the Committee will remember that a chart was issued with the Explanatory Notes and most will have seen that and will appreciate the sheer complexity. This set of amendments tries to reduce that complexity. The aim of the proposed amendments is that there should be a placement order in every case, including where the placement is by consent. The advantages of this would be that the significance of the decision being made by the parents in consenting to a placement would be underlined to them. That is particularly important in view of the restrictions placed by the Bill on the parents' ability to withdraw their consent and contest the making of the adoption order.

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    The complicated provisions contained in Clauses 29 to 31 and 33 would not be needed. It would be enough to provide that the making of a placement order operated to remove the parents' right to remove the child without the leave of the court. The child and prospective adopters would have greater protection against disruption of the placement. Any outstanding issues or queries about, for instance, the involvement of fathers without parental responsibility or wider family members could be resolved by the court prior to the child's placement. Such a course is advocated by the president of the Family Division In Re H and In Re G. Under the Bill's scheme, there is no recourse open to an agency, other than invoking the inherent jurisdiction of the High Court, in addressing the dilemma facing it when a mother refuses to agree to the involvement of a father without parental responsibility in making plans for a child.
    Although on the face of it having a placement order in every case may appear to create extra delay and expense, on these Benches we do not believe that this will occur in practice for the following reasons. If the consent is genuine, the court hearing can be brief and fitted in, for example, early in the court day without unnecessary delay. Moreover, if the consent is not genuine or is confined to the mother only, but the father or members of the wider family wish to care for the child, it is appropriate that that is ascertained and adjudicated upon by the court before the placement is made, as envisaged in Clause 1. Otherwise, delays may occur at the adoption hearing, when father or wider family may be making applications for contact or residence orders.
    Issues about the extended family or father without parental responsibility being able to care for the child need to be able to be raised in order to ensure compatibility with the European Convention on Human Rights. While the agency, if it follows good practice, will consider these issues—or should have done so—a court hearing before authorisation is given to place the child will provide the opportunity for them to be raised in a judicial forum. If they are not raised until the final adoption hearing, not only will this cause delay but it will almost certainly be damaging for the child and distressing for the adopters.
    Other amendments relating to Clause 20 are designed to enable the court, in certain circumstances only, to limit the placement order to a power to place with specific adopters named in the order. The situation envisaged is one where the child is already living with the family which it is proposed should adopt him or her.
    Where a child has been placed with foster carers and, after some time, it becomes apparent that they are the most suitable permanent placement for the child, and they and the local authority wish the placement to become an adoptive one, it seems appropriate for them to be identified in the placement order. The court might be willing to endorse a plan for the existing foster carers to adopt while being reluctant to make a generalised placement order. If for some reason the adoption by the foster carers did not take place, it
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    would surely be appropriate for the court to be asked to consider the changed circumstances before making any new placement order. I beg to move.
    Earl Howe: I very much support the principle underlying this part of the Bill, which is to ensure that where a child is being considered for adoption as far as possible the question of parental wishes about the child's future is addressed prior to placement for adoption. The main point about tackling matters in that way is that once the issue of parental wishes has been dealt with, the child and the prospective adopters will enjoy reasonable security from that time on until the final adoption order is made.
    While that concept may appear to be perfectly suitable in many cases, we have to be extremely careful about it. The consequences of parents giving their formal consent are so serious that I question whether a purely administrative procedure is really sufficient to safeguard the child's welfare and the parents' rights. I say that for one principal reason. Although the noble Lord, Lord Clement-Jones, raised a number of reasons, the principal reason is the finality of the parental consent. If the parent agrees and subsequently changes his or her mind, he or she cannot remove the child even if the child has not yet been placed for adoption. As I understand it, that is a correct reading of Clause 29.
    The adoption agency will have assumed parental responsibility for the child and the agency can then restrict the ability of the parents to exercise parental responsibility. Furthermore, where parents have consented only to placement in principle but have never given their consent to the proposed adoption order, they will be unable to oppose the making of the final adoption order unless the court gives them leave to do so because of a change in circumstances, as detailed in Clause 46. In other words, the court may never have to consider whether the parents' consent to the proposed adoption has been given or should be dispensed with.
    The noble Lord, Lord Clement-Jones, helpfully went through various circumstances where the Bill, in his opinion—and, indeed, in mine—falls short in this general area. The amendments that he has tabled are an excellent way of addressing those deficiencies. I myself tabled a broad, probing amendment to leave out Clause 18, which was designed to tease out these precise points. It is better, however, if we roll the whole debate into one.
    There is an answer, and that is that, even in cases where placement is by consent, all children relinquished for adoption should be the subject of a placement order. I shall not repeat the reasons but it seems that the rather complicated provisions in the Bill at Clauses 29 to 31 would not be needed if we went down that road. As the noble Lord emphasised, the full import of the decision being made by the parents would be brought home to them in an unequivocal way.
    The European Convention on Human Rights requires that family members must be given access to a forum in which they can express their views about the

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    proposed severance of the child from his or her birth family. I think that that is yet another reason why these amendments are worthy of serious consideration.
    Baroness David: I have put my name to these amendments, and I should like to give strong support to the case made by the noble Lord, Lord Clement-Jones, which was so ably spoken to by the noble Earl, Lord Howe. We must remember how irrevocable adoption is, and the thought that a perhaps very young person can give consent to adoption and that the placement order can then go through is not good. We have to take every care that, whoever the mother is who might be relinquishing a child, a great deal of thought is given to that decision. The plans made in these amendments are very good, and I hope that the Minister will give them a very sympathetic hearing.
    4.15 p.m.
    Lord Campbell of Alloway: I support the amendments in principle. However, let there be no misunderstanding that placement does not pre-empt the situation of the parent. It does not do so in relation to adoption, as Clause 46(2)(c) makes it perfectly plain that the court must be satisfied that,
    "the parent's or guardian's consent should be dispensed with".
    That involves a full hearing, and was the subject matter of the leading authority, In Re W, to which I referred on Second Reading. I shall not refer to it again.
    It is a fully protective procedure for parents in the sense that they will be heard and their representations will be entertained. However, that is against the paramount requirement of the interests of the child and not the paramount interests of the blood tie, the parent. Subject to that, which is retained in Clause 46, one cannot say that there is no satisfactory protection at the adoption stage because of the placement. However, I support the amendments.
    Baroness Howarth of Breckland: I ask for the Minister's help as I find this a complicated process to think through from the practitioner's point of view. I am sure that other practitioners are probably struggling with this too.
    We seem to have two elements twisted together. The first is the issue of whether there should be a placement order in absolutely every situation. Despite my practice and my views about the paramountcy of the child's needs, I am not at all sure that in every single situation we should go through the full paraphernalia of court appearance. Having spent a great deal of time in court, I know that even the most sympathetic courts can be extremely distressing for even the most sophisticated families. These are not usually the most sophisticated families.
    Nevertheless, what we are trying to tease out in relation to these amendments are some of the principles throughout Chapter 3. That is why it is quite difficult to grasp one thread without considering some of the others. Although I did not manage to get to my feet to speak earlier, as there did not seem to be an opportunity, I support the previous amendment moved by the noble Lord, Lord Clement-Jones—to
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    which I think the Minister was sympathetic. I support it not so much because I think that process is always a good thing to include in a Bill, but because that particular amendment spells out the real need to look at the detail of what happens before the child is placed for adoption. That is my difficulty in relation to these amendments.
    Adoption is one point in a child's life at which there is complexity. It is part of the total childcare aspect of the child's situation. In dealing with the complexity that continues in terms of placement, we need to ensure that the needs of the child's birth family have been considered. I take the view that there are many families where one cannot continue to keep a child with the family. I have worked with women who would have liked to have kept their child had we been able to provide other services—which I think that we would provide, post-adoption, to a family who adopts a child. There are some real issues that we are not teasing out because we are not addressing them in a more global way.
    Another part of the Bill suggests that the family will not then be able to remove the child even if it is not placed for adoption. My concern is that, if we go for a placement order in every case, short of changing provision in the Children Act, we shall not be providing the opportunity for that family to have another go at looking after their child. This is where the conflict with which I am struggling arises with the Children Act. I am not a lawyer, and I find this quite difficult to tease out. As a practitioner, however, it is terribly important that we look at the situation of the child, the birth family and the adoptive family, and find a simple route through to the best solution for the child. Like most noble Lords, I find this route extraordinarily convoluted.
    Baroness Andrews: I am grateful for the thoughtful comments from all sides of the Committee. Noble Lords are quite right: this is a very serious process. Although I would dispute that it is as complex as has been described, it is truly important that we are clearer about what we intend to do. I shall take the time, if I may, to address all the amendments and look in some detail at some of the issues which have been raised. I hope that I am able to answer some of the points and concerns that have been raised in relation to, for example, consultation with the wider family and potential conflict with the ECHR.
    I shall try to explain the context of our thinking on placement. The Bill tries to achieve two objectives. The first is to put in place, for the first time in law, the concept of placement itself, which entails a clear process for involving the birth parents, the agency and the adoptive parents, as well as the child, and putting that within a clear legal framework where none has existed before. In so doing, we seek to put in place a new arrangement of rights and responsibilities which come into interaction with each other at different parts of the process, to strengthen both the rights of the birth parents in different ways, the security of the child in different ways, and the rights of the adoptive parents

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    to act as successful adoptive parents. It makes the process clearer, more deliberate, fairer and more secure.
    The second objective is to make the process of placement more appropriate and responsive to different situations. These children come from families with different family histories and different circumstances and prospects. They might have been in care, or they might have been fostered or living in situations at risk. They are all individual children with a different set of circumstances to be considered, and with a different set of responses from the family.
    We are not trying to create through the placement process a fast track or a casual track just to meet some arbitrary target. We are not seeking to do that at all. We are trying to create two processes which are equally sensitive. One is to do with parents who are consenting to the process, involving the children who are now in voluntary accommodation. For the other set of children, there is no parental consent. Their placement will involve a serious set of negotiations with many people. It is a potentially long process, but it has built-in safeguards for everyone involved.
    I hope that noble Lords will agree in due course that we struck the right balance. The amendments propose some fundamental changes to that balance. We therefore need to be clear about what we are doing. In summary, they would remove the current provisions for placement with parental consent in Clause 18. They would require that a placement order was made for every placement on adoption no matter what the family circumstances.
    Before I consider the amendment, I would like to take Members of the Committee back briefly over the history. The Bill has been in development for a decade or more. Many of the arguments have been held by practitioners in relation to successive governments. Much thought has gone into how best to improve the process after all these years. The proposals have evolved through successive consultations—and it has been a genuinely inclusive process—in 1993, 1994 and 1996 and during the passage of the Bill. The main aim is to resolve the substantive issues relating to consent. We believe—and we are informed about this; this is what the practitioner body says—that the current legal process leaves too much of the process of negotiation to the final adoption hearing. The placement system aims to improve on this in three main ways.
    First, it aims to give greater certainty and stability to children by dealing as far as possible with the bulk of issues that are really problematic for families around consent to adoption before they have been placed, so that placement occurs not at the end but a good way through the process, rather than at the beginning.
    Secondly, we aim to reduce the extent to which birth families are faced with a fait accompli at the final adoption hearing, when all they are faced with is the ability to say, "No, we have changed our minds". By that time a child will have been with adoptive parents for some time. That is a significant additional safeguard for the birth parents in current legal
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    framework. Under the Bill, parental consent must be sought before the child is placed for adoption. Either they must consent or the courts must decide to dispense with their consent in making a placement order. That arises later in the Bill and there will no doubt be animated discussion on conditions for dispensing with consent. In the context of these clauses, we are dealing with the process at this point. Either way, the issue must be addressed and resolved before the child is placed with prospective adopters.
    At present, there is no legal concept of authorisation to place dependent on parental consent. There is no requirement to seek parental consent before an adoptive placement is made. We have a situation, for example, where a child may have been in care under a care order and originally the intention might have been that that child be rehabilitated with his original parents. But circumstances change. Often the plan will move to adoption. The agency, the social workers involved, will discuss the matter with the family and they will decide that the time for rehabilitation is gone and that adoption is the only alternative.
    When that happens, however, there is no requirement that the parents have to consent to their child being placed for adoption. The local authority can simply go ahead, saying: "We have changed our minds. Circumstances have changed, therefore this child is going to be placed for adoption". No formal process is necessary.
    The result is, therefore that often the first formal opportunity the parents have to contest the issue of adoption is at the final hearing. Then they can say, to the dismay of prospective adopters and to the disruption of the child, "We have changed our minds about this. We know that it is a loving adoptive family. We know the child possibly might be better off. But I'm sorry, we've changed our minds". By that time, the child could have been with adoptive parents for many months.
    Courts in that situation can be reluctant, too. The other effect is that when the courts take the side of the adoptive parents, the birth parents feel that they have had no right, nor have they been listened to thoroughly. The danger of fait accompli was a key reason, therefore, why the Adoption Law Review recommended addressing the issue of parental consent before the child was placed. I would argue that in this way there is a significant strengthening of safeguards for birth parents and a fairer deal.
    The third aim of the provisions is that they try to reduce the uncertainty for adopters. At Second Reading, we heard very eloquently and movingly of the dilemma faced by adoptive parents who are finding it extremely difficult to conclude the process of adoption. Therefore, we are trying to reduce the uncertainty for adoptive parents who, currently, a year down the line, are suddenly faced exactly as the birth parents are with the prospect of a change.
    As a result of shifting much of the substantive question of consent earlier in the process, the process reduces the opportunity to contest. However, I would point out—and I hope this will reassure the noble

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    Lord, Lord Clement-Jones—that the parents may still contest the final hearing if they obtain leave of the court, which may be granted provided that there has been a change in circumstances. We will come on to describe what that might mean.
    Therefore, Chapter 3 provides two routes for placement. The first is placement by parental consent under Clause 18, either through a voluntary adoption agency or a local authority, or under a placement order under Clauses 20 and 21. The second route is only available to local authorities, and I shall explain why in a moment. I stress, therefore, that placement by consent is intended to be entirely voluntary. Where the parents withdraw their consent, they can do so at any point before the final order, the final application for the child to be adopted, is made and the child must be returned to them if they make that application. The only change would be if the local authority was under a duty to apply for a placement order. If the child was felt to be at risk of significant harm, or if there was a care order already on the child, that would outweigh the other considerations.
    The two placement routes are connected. Where a local authority considers a child it is accommodating ought to be placed for adoption, it must either place him with consent; or, if the parents do not consent and it considers that the child is at risk of significant harm, or the child is under a care order, it must apply for a placement order.
    That is in line with the Children Act philosophy of seeking to work with families and to get that balance right between providing for support in consent, but also providing for statutory intervention and protection when that is the right route.
    Turning now to the amendments, I shall deal first with Amendments Nos. 51A, 52A, 54 and 54A to 54C. In summary, their effect would be to remove the placement with consent route completely, and to require that there must be a placement order made by a court authorising every adoptive placement, both those where the parents have consented and those where they did not.
    Amendment No. 51A amends Clause 17 to remove the reference to Clause 18, so it would now provide that an adoption agency may place a child for adoption only under a placement order—both consequential.
    Amendment No. 52A makes a consequential change to Clause 19, so that instead of allowing parents to combine consent to placement with advance consent to adoption, they can now combine consent to a placement order with advance consent to adoption—again, a consequential amendment.
    I shall take Amendments Nos. 54, 54A, 54B and 54C in two groups. Amendments Nos. 54 and 54A to C make follow-on changes to the placement order to provide that where the parents consent to a placement order, the court can make one without the Children Act significant harm threshold being met, but where the parents do not consent, the threshold would have
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    to be met before an order could be made. That is entirely logical, in the same way as the Bill provides as currently drafted.
    Finally, Amendment No. 53A would tie a placement order to an existing placement, a specific placement, where the child was already living with prospective adopters when the placement order was made.
    I know that Members of the Committee and some of the stakeholders in the adoption process, the professional agencies, have expressed concern about the current provisions in Clause 18. I want to address those concerns and I hope to be able to do so in what I shall say next. The Government do not share the view that we should dispense with the consent route. The three main arguments of the noble Lord, Lord Clement-Jones—and of the noble Earl, Lord Howe, in some respects—were, first, that the significance of the decision taken by the parents requires the court to be involved. It is such a serious step that we need to make provision to ensure that every parent knows what he or she is contracted to do.
    Secondly this is a point made by the noble Lord, Lord Clement-Jones, particularly—it would provide an opportunity for agencies to seek the court's guidance on tricky questions where they were having difficulty deciding how to consult and involve unmarried fathers without parental responsibility or the wider family members.
    Thirdly, the use of a placement order in every case would justify recasting the provisions covering removal from adoptive placements, which are described as complex and which we will discuss later.
    I believe that the Bill is right for two main reasons. The first reason is the safeguards in the system. Indeed the strongest safeguard is the one that I described in relation to putting the birth parents' consent process early in the whole raft of options.
    In relation to the first point about the court hearing, we made it clear in the debate in the other place that it is already a key element of placement and consent provision that the adoption agency is under a duty to spell out in regulations the need to counsel the parents and to explain to them the full implications of what they are agreeing to.
    We believe that in situations where it is a consensual decision to let the child go for adoption and the parents are fully in agreement, the fullest opportunities to counsel those parents and to discuss the issue with the child will be provided. In that way, everyone will know what they have signed up to.
    A further safeguard is that the Bill provides for parents' consent to a placement to be witnessed by CAFCASS officers, who are wholly independent. Their job will be to ensure that the consent is given properly and transparently, with the full knowledge and understanding of the parents. I stress that we are willing to consult on the detail of the role that the CAFCASS officer should play at this stage. It is an important safeguard. We want to get it right. We want to know that we have the right role for the CAFCASS officer.

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    Finally, the consent itself is to be given in a prescribed form, which will spell out clearly what is being agreed to. We believe that those safeguards, together with the fact that, as I have said, the consent to placement can be withdrawn by the parents at any point up to the application of the final adoption order, will be in themselves sufficient to ensure that the parents do understand the significance.
    On a personal reflection, I believe genuinely that parents who are contemplating this step will really understand what it will mean to lose a child. I imagine that those in your Lordship's House who have experience of the adoption system would support that contention.
    The second argument in favour of requiring a placement order is that it will ensure that agencies have properly explored all the options in the wider family. I understand the significance of that. Often these children live in complex family systems; they are often placed with family members; and they have other people in their lives who need to be consulted. The argument is that a placement order in each case would provide a transparent route to seek the guidance of the court in these complex cases when they do not know whether to consult unmarried fathers or wider family members—or, for example, in cases where the mother wanted to give up the child in secret.
    It is a developing area. The noble Lord, Lord Clement-Jones, referred to the ECHR and the Human Rights Act. That legislation is bedding down. We have given a commitment that we will cover the appropriate action for agencies in full in the new adoption agencies regulations and guidance.
    It is also important to remember proposed agency decisions and the process that has led up to them and that this is not the start of the process. It is a long way through the process and we would expect the adoption panels, with all their expertise and independence, to have played a leading role in ensuring that the proper work had been done before any decision was taken that adoption was in a child's best interest.
    In addition, there is another safeguard. For those who believe that the court has to be involved, there is a route into the court. It will be open for the agencies to seek the views of the court in cases of great doubt or complexity, either by applying for a placement order if it is a local authority and the child is at risk of harm, or by applying for a ruling under the court's inherent jurisdiction, as they can do under the existing legislation. Again, we are very willing to consult on whether specific provision should be made for this alternative in the court rules. So there will be a route into court for difficult cases.
    I am grateful for the support of the noble Baroness, Lady Howarth. I do not believe that these few difficult cases justify a requirement to go to court in every case. That brings me to the other reason why we do not believe that a placement order should be applied in every case.
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    I have discussed the strong safeguards in the Bill to cover the concerns raised, but in addition let us reflect on what the Bill is trying to do. It is trying to create a simpler and speedier process for children to be placed with stable and loving families after what can be a long period in care or in a series of foster homes. We want to move to a position where when we have the consent of the parents we do not want to put increased delays and barriers in the way.
    To get an idea of what the amendments would mean, at the moment 16 per cent. of children adopted from local authority care have already been placed voluntarily—in effect, with the consent of their parents. Those are the children we are talking about. They have been placed without a court order or the involvement of the court. They can be there for many different reasons, but 430 children a year are there voluntarily. Not all these cases would be suitable for the Clause 18 route but this gives an idea of the upper limit.
    The effect of the amendment could be to require several hundred additional court cases a year; possibly over 400 and potentially 600 if we reach the target we have set of a 40 per cent. increase in the adoption of children from care. Because a child cannot be placed for adoption until the placement order is made, the result would be bound to be increased delay in placing these children while they wait for the court hearing on the placement order.
    We know that some of the agencies that are most involved and most conscientious about the future of the child are concerned about delay; they do not believe that this will occur in practice because they have suggested that these cases can be seen at the beginning of the court day when the court is free and can be dealt with relatively speedily. However, it is hard for us to agree with that because our clear advice from colleagues in the Lord Chancellor's Department is that that pre-list time is already fully occupied with other work. For example, into that slot go the urgent injunctive procedures and case-managed family business. Some Members of the Committee will know far better than I the kinds of things which can clog up the early part of the court day. The spare time in which to handle these applications with no risk of delay is not available; it would be bound to compete.
    Given that these will ostensibly be non-contested agreements, we do not believe that they would have priority over urgent cases or pressing family proceedings. The inevitable result will be increased risk of delays in adoptive placements with consent, over and above that which already occurs. Is that justified? We believe that it is not.
    The 1992 Adoption Law Review suggested that there should be a court order authorising every placement. However, when the 1993 White Paper was published, the previous administration said that many of those consulted feared that the new procedure might prove cumbersome and might in some cases unnecessarily and without clear benefit add to the length and complexity of the process. That argument has been with us for a decade and has evolved in a

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    positive sense as far as the Government are concerned. The White Paper also committed the Government to further consultation and in 1994, when we put forward the concept of placement by consent without a court order, it was strongly supported in those consultations. Those arguments hold true today.
    Amendment No. 53A will require the placement order to be made when the child is already living with the prospective adopters. We move from a placement order that can be made without any family being identified, to one that is very specific. What will happen in the regrettable, but not unpredictable, event that a placement broke down? Even in the best regulated foster-parent homes, placements break down for different reasons. The local authority would then no longer have the legal authority to place a child for adoption. If it still thought that the child ought to be placed for adoption, it would have to return to the court to obtain another placement order and this would, again, add to delay.
    Again, I shall pray in aid the consultation process. The issue of whether placement orders should be general or specific was one of the key questions posed in the public consultation in 1994. Responses were strongly in favour of general placement orders, on the grounds that they are both simpler and more flexible. I reiterate that the purpose of placement orders is for the court to decide that placement for adoption is in the best interests of the child.
    Obviously, the identity of the prospective adopter is critical. The whole process is designed to ensure that the prospective adopter is the best possible quality commitment for the child. The court is essentially being asked whether in principle the child ought to be placed for adoption. It is not being asked to select and match the child with prospective adopters. That is the task for the adoption agencies which are properly skilled and equipped to do it.
    Where a placement under a placement order has broken down, the local authority will need to review the case and consider what is the best form of action. It may be that it is no longer adoption. Other factors may have come into play. It may be time to consider possible rehabilitation with the family itself. However, the Government believe that the authority should not have to return to the court, with the inevitable associated delay, before it proceeds to place the child, whatever the decision may be. If adoption were no longer in the best interest, we would expect the authority to make use of its power under Clause 23 to discharge the placement order and make whatever other arrangements were necessary and appropriate.
    The Government believe that local authority social services departments, in their role as adoption agencies, are the bodies with the appropriate expertise to make these judgments, and that it is not the role of the courts at this level. I hope that if I have been able to convince Members of the Committee that there is an undesirable inflexibility in the amendments, they will understand why we do not think that they should be included.
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    In conclusion, the Government's aim is to reduce delay, but not to fast track at the expense of the care for the child, the quality of the placement and the prospects for the child. We are building in safeguards, not removing them. The proposal to remove the current placement with consent route and to require that there must in every case be a court order authorising placement risks doing the reverse. That is why, on balance, the Government believe that the placement with consent route under Clause 18 should remain.
    We recognise that a range of genuine concerns have been expressed today. I hope that I have set out the safeguards, but while I do not believe that it would be right rigidly to require that there should be a placement order in every case, we can see that there might potentially be some advantages in terms of extra flexibility in some of what the amendments propose; for example, enabling an agency to apply for a placement order in consent cases, and in these cases, allowing for the order to be made with consent without the significant harm threshold having to be met. We believe that those would be exceptional cases. Although we would consider that local authorities had a right to have that recourse, in no way would we want that to diminish the principle that voluntary placement by consent should be the route chosen for the vast majority of consensual cases. We are willing 10 look at this issue in consultation with stakeholders, with a view to returning to it on Report.
    I am sorry that my explanation has been so long. However, given the nature of the amendment and the fact that your Lordships have approached it in such detail, I think that it is important to spell out the Government's case in detail. I hope that, on those grounds, your Lordships will feel able to withdraw or not to press the amendments.
    4.45 p.m.
    Baroness Masham of Ilton: I should like to ask the Minister a question, if I may. She mentioned "both birth parents" several times. Would she agree with me that it is difficult sometimes to find both birth parents? The mother might be a street worker and might not know who the father was, or she might be somebody who had been on holiday abroad and had several relationships. In both cases it could be difficult to trace the father. Could the Minister talk a little more about how she sees tracing the fathers in these difficult cases? I know that some of these cases are difficult, and one does not want to delay a child being adopted if that is the best thing for that child.
    Baroness Andrews: Tracing unmarried fathers is a big issue. Under the present arrangements, at the early stages of the decision on whether the child ought to be placed for adoption, the adoption agencies would make every effort to do that. The Bill's provisions do not disturb that effort. Every effort will be made as part of the placement process to establish whether the unmarried father had a right to be consulted. Of course, it certainly reflects the nature of the relationship if the unmarried father has a continuing

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    relationship with the mother, as that puts it in a different category. By marrying the mother, he can acquire a parental responsibility and so on. Throughout the consultation on regulations, we would certainly want to ensure that those provisions are strong and that they are fair to both parents.
    Lord Clement-Jones: I thank all those who took part in this debate—which is clearly, as the Minister recognises, fundamental to the operation of the Bill. I am grateful to her for taking the trouble to go through it in such detail and to address all aspects of the amendment. She need make no apology about the length of the reply; it is extremely important that we get this right.
    The two words that I picked up on from other noble Lords during the course of the debate were "finality" and "irrevocability", posited against the Minister's "undesirable inflexibility" and the cumbersome aspects of having to go for an order every time. Of course, there are important considerations when one balances the two aspects. Those such as myself who take a view about the balance are very much influenced by the fact that Clause 51(4) contains wording that means that any withdrawal of consent prior to the adoption order being applied for is a nullity.
    Clause 51(4) states that,
    "The withdrawal of any consent to the placement of a child for adoption, or of any consent given under section 19, is ineffective if it is given after an application for an adoption order is made".
    That is fairly heady in the circumstances.
    I have to hand the chart which makes it clear that, at an adoption order hearing where there has been a placement with consent, the birth parent may oppose the adoption order only with the court's leave. Thus, there are fetters in those circumstances, all of which tends towards finality if placement by consent has taken place; hence the argument that this should be done by court order.
    I understand what the noble Baroness, Lady Howarth, said about this as a practitioner. However, there are many other practitioners among those whom the Minister has rather helpfully described as "stakeholders" in this process who feel very strongly that this is a necessary protection and that it is important to go through a very straightforward court order route for placement in order to ensure that we do not have problems at, in a sense, the back end of the process when the adoption order is made.
    I do not believe that this particular set of proposals introduces greater uncertainty; indeed, it is designed to reduce the level of uncertainty. As we may hear in debating whether the clause should stand part—it is all part of the same argument—by deleting Clauses 30, 31 and 33 and Clause 18, we would in fact simplify the procedures in the Bill.
    We probably have something of a philosophical difference in all of this. I shall very carefully read what the noble Baroness has said. Although I understand the resource issues involved, we have a very important decision to make in relation to the Bill. Regardless of
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    whether court time is available, if we decide that this is the way to proceed, court time will have to be made available. We have to make those resources available.
    I shall leave it there. The problem is that the noble Baroness, Lady Andrews, makes the case that there is no fait accompli. However, many of us believe that there is too much of a fait accompli—if it is possible to use the term relatively rather than absolutely. It is tilted too far the wrong way. Nevertheless, I am sure that we shall all go away and read the noble Baroness's words with considerable care, including her point on enabling an agency to apply for a placement order even where consent is given in certain circumstances. We shall definitely look at that to see if it is a possible way of perhaps compromising or at least curing some of the defects in the proposals currently before us. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 17 agreed to.
    5 p.m.
    Clause 18 [Placing children with parental consent]:
    Baroness Barkermoved Amendment No. 52:
    Page 12, line 40, after "of" insert ", or other persons holding parental responsibility for,"
    The noble Baroness said: In moving this amendment I shall pick up the point raised in a previous debate by the noble Baroness, Lady Masham. The issue of deciding who holds parental responsibility seems less straightforward than those who come to these matters cold might think. The issue that we are trying to get at here is about parents who hold parental responsibility, such as grandparents, and about those who are not resident but still retain parental responsibility.
    One criticism of current practice, to which the Minister alluded in speaking to the previous group of amendments, is that it is possible for parents who are not present or living with the children to be ignored in the process. These days, and for many of these children, family structures are extremely complex and somebody who in effect has parental responsibility may not be the person who in law has parental responsibility.
    In tabling the amendment, we want to ensure that thorough consideration will be taken of the wide kinship structures in which many of the children find themselves. I ask the Minister what exactly is meant, and who is meant, by the people who are named already in the clause, and whether that is wide enough. I beg to move.
    Baroness Masham of Ilton: Perhaps I may ask the noble Baroness, Lady Barker, whether the amendment would include parents in prison. There is an extra difficulty because the children stay so long with the parent, and then they are taken away and put into care. The parent might want them adopted or they might

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    not. The situation is so different if they are in prison, and the father might be in prison too. Would her amendment cover people in prison?
    Baroness Barker: That is a fine question. The noble Baroness, Lady Masham, may get more clarification from the Minister than she would from me, so I will redirect the question.
    Baroness Andrews: The answer to the point raised by the noble Baroness, Lady Marsham, is "Yes".
    Perhaps I may reply now to Amendment No. 52. I know that the noble Baroness, Lady Barker has great concern for the rights of grandparents in particular, in relation to her professional work outside this House.
    The provisions for consent to placement, like much of the Bill, follow the model of consent to adoption provision in the 1976 Act, but the people who must consent to the child being adopted are the child's parents or guardians. We have to make a distinction between parental consent, and the legal responsibility to act as a parent, and a parental responsibility. The people who must consent to the child being adopted are the child's parents or guardian. "Parents" in this case means the parent who has parental responsibility.
    In addition, one of the great virtues of the Bill is that we have created a new role: "a special guardian". Clause 139 provides that "guardian" in this instance includes a special guardian. The intention of the special guardianship order is that the special guardian is the child's primary carer and takes the day-to-day decisions concerning the child's upbringing. It is right that he or she, alongside the child's parents, should have to consent to the child being adopted or being placed for adoption. The special guardianship fits within that rubric.
    However, the effect of the amendment would be that others with parental responsibility would also need to consent to placement for adoption. That would mark a very significant departure from the position under current legislation. The largest group of people involved would be those holding residence orders, and they can be a great range of people. They can be other members of the family, they can be grandparents, but they can be people outside the family as well. They can be long-standing friends of the family who are trusted to take care of the child in certain circumstances, and who have applied for and been granted a residence order.
    Giving the holders of residence orders the ability to consent to placement for adoption would therefore be giving them a huge additional responsibility. It would be a responsibility about that key decision in the child's long-term future which might not be appropriate in all residence order cases because they are made for such different reasons.
    In practical terms, an adoption agency would not seek to place a child for adoption via the consent route at all when the child was subject to a residence order in favour of someone other than a parent with parental responsibility. The reasons for that are quite practical. If a residence order is successful, the child is living happily with that person. But the residence order
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    determines where the child is to live and, therefore, it is quite difficult for the agency to gain access to that child. How would it be able to see and talk to the child and to decide that adoption was in his or her best interests? Therefore, how could they take some of the other decisions about whether adoption was the right route or about placement?
    In a situation where there was a dispute between the parents and the holder of the residence order as to the future of a child, the parent would have to seek initially to discharge the residence order. If the local authority were concerned about the future of the child in such a situation and it wanted to quash the effect of a residence order, it would have to seek a care order. If the parents tried to take away the residence order in the course of a dispute, the local authority would have to think of the future of the child as regards the potential harm, and would have to seek a care order in those circumstances. If it was satisfied at that point that the child ought to be placed for adoption, it would also have to seek a placement order. If either a care order or a placement order were made, the residence order would be discharged.
    As regards the other people who may hold parental responsibility, such as step parents, if we look back at the provisions of Clause 1(4)(f) there is the safeguard that the court would need to consider their views about the adoption if they were people who had a significant relationship with the child. That notion of significant relationship is not confined to family members. So the provisions are wide enough to ensure that account is taken of the views of relatives and others who have a significant relationship with the child.
    Given the framework set out in the current legislation, we believe it is right that it continues to be the case that the people whose consent is required as to what happens to the child as regards a placement or adoption order, and the people on whom the court must rely and seek consent from must be the parents and the guardians of the child.
    I hope that that will reassure the noble Baroness that the relatives and others whom she is concerned about will be involved in the proper consultation processes and their views will be taken into consideration, and that under the circumstances that will be sufficient to meet her objections in the amendment.
    Lord Campbell of Alloway: I wholly accept, and I shall be brief, what has just been said by the noble Baroness. I had been thinking about it for some time before she said it. It must be the parent or the guardian; for various reasons you cannot go outside that. Furthermore, how on earth are you going to define the proposal? Who is "another person holding responsibility"? How will that be defined? Will it be by statute or by common sense? If it is common sense, what does it mean, how wide is it? If it is by some statute, it is a statute that was not designed for this purpose.
    Baroness Barker: I am grateful to the Minister for her considered answer and also to the noble Lord, Lord Campbell of Alloway, for proving that we are

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    not always in league in the Bill. In answer to the noble Lord, Lord Campbell, I believe that the phrase "parental responsibility" is well understood in family court matters.
    I take the point made by the Minister. I listened with great interest to what she said about the limitations of residence orders and I will bear those in mind when we discuss Clause 44 in greater depth.
    I take the Minister's point about the need to ensure that a limited number of family members can agree to adoption, but in withdrawing the amendment I reiterate that the reality of family life and family structures is a good deal more complex now than it was in 1976. I will go away and study her words with care, but I am not absolutely and wholly convinced that she has got it wholly right. I accept that there may be limitations to the amendment, but I still believe that there is an issue there to which I may wish to return at a later stage. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 18 agreed to.
    Clause 19 [Advance consent to adoption]:
    [Amendment No. 52A not moved.]
    Clause 19 agreed to.
    Earl Howemoved Amendment No. 53:
    After Clause 19, insert the following new clause—
    "ADOPTION AT BIRTH OR WITHIN THREE MONTHS THEREAFTER

    (1) Where an adoption agency is satisfied that each parent or guardian of a child has consented to the child being placed for adoption at birth, the adoption agency must place that child as soon as is practicable with the prospective adopters, with due regard to the birth-parents' rights to alter arrangements within time limits which shall be specified by regulations.

    (2) Subject to subsection (3), where a local authority is satisfied that the consent of the parent or guardian's consent should be dispensed with, it may place the child with the prospective adopters without first obtaining a placement order, but it shall have a duty to apply for a placement order as soon as is practicable thereafter.

    (3) Subsection (2) shall apply only to children under the age of three months."

    The noble Earl said: This new clause is designed to create a fast-track procedure for the placement and adoption of very young children. It has been remarked that the Bill is very valuable in helping to tackle the real problems of large numbers of older, looked-after children who need to be given better chances of adoption, and I am sure we all say amen to that. However, we need to remember baby adoption as well. Baby adoption has become a much smaller part of the adoption scene over the years and the traditional mother-and-baby homes, which did such a sterling job in supporting mothers whether they wished to keep their babies or to place them for adoption, are now an endangered species. There are none left in the south east of England.
    Is the Minister satisfied with the ability of local authorities and other agencies to support mothers who choose to have their children adopted after birth? The effectiveness of those services will determine how
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    quickly a baby can be placed after birth. There is no dispute that the sooner a baby is placed with prospective adoptive parents, the better that will be for the child. The problem of children moving between foster homes applies equally to babies. One study found that some infants under 12 months had four or more moves which were not at the request of the fosterers. The long-term effects of that are incalculable. It must be right to place a baby with adoptive parents as soon as possible. That is what the first subsection of the new clause seeks to do.
    The second subsection relates perhaps to a minority of cases, but it allows the local authority to dispense with the consent of the parents or guardian and place a child under three months old without having first to obtain a placement order. Clearly, that would occur only in extreme circumstances, and a placement should be obtained as soon as practicable. That will facilitate the immediate placement of the baby.
    The new clause amends the Bill in what I believe is a relatively modest way but the idea behind it is important. It would ensure that the needs of very young children are paramount. The child will be placed as rapidly as possible so that the child's life is not disfigured by one or more moves before a permanent home is found.
    I hope that the Minister will be sympathetic to the intent behind the amendment. I beg to move.
    5.15 p.m.
    Lord Northbourne: I rise briefly to support the noble Earl.
    He referred to the importance of the first year or two of a child's life. I am sure that the Minister and the Committee are aware that new research over the past decade or two based on much more powerful scanners than were ever available before has enabled neurologists to look at the development of the child's brain. To give just two statistics, at birth the child already has approximately 50 trillion synapses in the brain already developed. During the first two years of life, that increases 20 times to 1,000 trillion synapses. During that period, if the child is exposed to, for example, violence, neglect or even to seeing the violence of its parents, which cause its defence mechanisms to develop, gradually those become hardwired into the child and leave him or her with a tendency to violence, disruption, anger and an inability to control their anger. There are other things that can arise from the parenting environment in which the child lives during the first two years. I therefore enormously support the noble Earl, Lord Howe, in asking if we can devise, with due consideration of course to the rights of the parents, a way to get those baby children adopted as quickly as possible.
    Baroness Gould of Potternewton: I rise briefly to support the amendment because I am concerned about the movement of very small children. It has a seriously detrimental effect on them. However, the noble Earl, Lord Howe, said that this should only happen in extreme circumstances and I understand that, but will

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    he define what he perceives as extreme circumstances under which the consent of the parent or guardian could be dispensed with?
    Baroness Thomas of Walliswood: We, too, are very aware of the damaging effect on even very small babies of being moved from person to person and in particular the effect it has on their capacity later in life to make relationships. I am concerned about subsection (2) of the amendment. The idea of taking a child away from its parents without consent at birth resonates in people's experience in a heart-rending way. There have been many people in the past whose children for one reason or another were taken from them at birth, certainly not for any reasons that, I hope, any social worker today would remove a child. The mothers of illegitimate children, for example, had their children removed from them, in some cases even before they had been allowed to see the child. There are therefore some very sensitive issues here and I hope that the noble Earl will expand a little more on them in support of what the noble Baroness has just said. Perhaps the Minister will also be able to respond to these difficult issues.
    Lord Campbell of Alloway: I rise briefly to support this measure. It is essential and it is part of the process which is not part of the Bill. As regards subsection (2), the steps of the Temple Church have for hundreds of years been a repository for unwanted babies. We have taken them in and fed them and had them nursed. There was a special nurse who used to look after them. Then I do not quite know what happened to them, but I presume that some of them were adopted. This sort of provision would enable that to be done. We still actually get one or two babies—if the Committee is interested—on the steps of the Temple Church. No way will you find the parent. There it is.
    Earl Howe: Before the Minister replies to my amendment, perhaps I could add a few more remarks to those I made earlier in response to questions that have been raised.
    I have been asked about the circumstances in which subsection (2) would be triggered. One of the sets of circumstances would be those to which my noble friend Lord Campbell has helpfully alluded, where one has a very young child who has been abandoned and nobody can trace the parents. It seems to me that that kind of case is one where a placement should be made, albeit unofficially, as soon as possible for the child's own benefit.
    I readily concede, however, that the subsection should be expanded and enlarged. As it stands, it raises the spectre of local authorities taking babies away willy-nilly without due cause. There is no test that is specified or anything like that.
    I hope that the Minister will regard the amendment very much in the nature of a probe. Clearly, the kinds of case that I had in mind were where the child was at risk of significant harm. There is nothing final about what the subsection suggests. There is no question of
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    an adoption order being made without parental consent, or .anything like that. It is simply for the benefit of the child to be put out of harm's way.
    If, as I concede, the Minister feels that the subsection is not adequate as it stands, nevertheless, work can be done on it. I hope that it wilt provide a useful hook for debate—it already has—and that the Minister will see the merit of the intent, if not the letter.
    Baroness Andrews: It is such a relief to have someone else being quizzed on their amendment. Speaking on behalf of my noble friend Lady Gould, I thank the noble Earl very much for that description of how the subsection might be improved. I am hesitant to abandon my speaking notes because they go further than the proposed new clause.
    I say to the noble Lord, Lord Northbourne, that he mentioned an interesting matter. We know more about the brain now. We have learned more about the brain in the past five years than in the past 50 years. There is some extremely interesting research on childhood development which emphasises the importance of getting these processes absolutely right with due regard both to the welfare of the mother, but particularly to the welfare of the child.
    It has been a thoughtful and moving debate. I am grateful to the noble Earl, Lord Howe, for giving us the opportunity to have such a debate. I am sorry to hear that children are still being abandoned on the steps of the Temple Church. That is a matter for grave reflection.
    I turn to the impact of the amendment. Let me stress that absolutely nothing divides Members on any side of the Committee as regards the motivation to make the safe care, placement and adoption of very small babies as speedy and as secure as possible. That is definitely the intent of the Bill. It is an exceptionally important issue, despite the fact that the Bill has been devised to modify adoption requirements. That need has arisen due to the difficulty of placing older children who are in care, and due to changes in society which have resulted in there being fewer younger children available for adoption. However, that does not mean that they are any less important, far from it.
    The proposed new clause addresses that issue. Indeed, in the other place, the Government also tabled amendments to make provision for the cases we are discussing. If I may, I will explain how we have already strengthened the Bill in that respect in relation to some of the noble Earl's concerns.
    I want to demonstrate that the Bill's provisions allow, in a genuinely appropriate manner, bearing in mind the range of interventions that are possible, for the placement of a child after adoption. We do not know how many small children are voluntarily relinquished at birth for adoption. However, we do know that there is a change in attitude towards single motherhood and that numbers are fewer.
    Clause 51(3) provides:
    "Any consent given by the mother to the making of an adoption order is ineffective if it is given less than six weeks after the child's birth".

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    That is intended to ensure that, in the crucial period after giving birth, for the next six weeks the mother is not harassed in any way to give consent for the adoption. The mother needs time to think and to talk to supportive people around her, whether they are from family or the appropriate agencies. Medical and social work advice must be given continuously for that minimum period before the mother gives formal legal consent. We have built in that protection for the young mother.
    However, like the noble Earl, we believe that it is very important to enable babies to be placed for adoption when very young, as securely as possible, when it is in the best interests of the child. We are already taking action under current legislation to try to ensure that that happens. The National Adoption Standards set a clear timetable for finding a new family for a child under six months where a parent has requested that he or she be placed for adoption. That is a significant advance.
    We have also stated that a match with suitable prospective adopters should be identified and approved by the adoption panel within three months of the agency agreeing that adoption is in the child's best interests. It is a short timetable but, given the number of families that are looking to adopt small babies, a realistic one. The Government have made it clear to local authorities that we expect those timetables to be met by 1st April next year.
    We expect the majority of children to be matched more quickly than that. It inevitably takes longer to find an appropriate match for a child with specialist needs or a mental or physical disability. However, for other children, we expect a great deal of work to be done with the birth parent before the birth of the child. That is how it should be and that is what we expect. The draft practice guidance to support the National Adoption Standards encourages as much counselling and support as possible to be given to the birth parent before the birth. That will obviously raise questions as to whether there are people within the wider family who can adopt the child. It will ensure that the mother will know all the options and will not feel that she is being pushed into a corner where there is only one choice.
    It is important that the new legislation does what it can to support the rapid placement for adoption where that is in the child's best interest. That is exactly what the proposed new clause and the Bill's provisions seek to achieve.
    The proposed new clause seeks to tackle two situations: first, to enable baby placements where the parents consent; and, secondly, to allow for placement where there is no consent. Let me set out how we propose to address both those options. As to the first situation, we entirely agree that, notwithstanding what I said earlier about the six-week time limit for giving formal consent, it is important to provide a route for rapid placement where the parents agree and the agency agrees that it is in the interests of the child.
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    Clause 17(1) allows adoption agencies to place a child under six weeks for adoption without the formal consent given under Clause 18 for the reasons I have given. They will do so with the agreement of the parents. The arrangements for securing the agreement will be set out in regulations and guidance. As to in-depth counselling and so on, we will be able to consult with the agencies on the nature of those consultations.
    These provisions will allow young babies to be placed for adoption quickly, within that critical six-week period, provided that all the safeguards have been met. Once the six-week period is up, however, the agency has to secure formal consent and if it fails to do so the authority to place will cease unless the agency is a local authority and feels that a placement order would be justified—and there is no parental consent.
    In the meantime, such placements have to be entirely voluntary and the provisions in Clauses 25 and 26 for securing contact apply to those placements as they do in all others under Chapter 3. Adoption agencies are under the same duties in respect of these young placements as they are for everything else. The only major difference, which is a safeguard again for the birth parent, is that during that critical six weeks before formal consent is obtained, parental responsibility is not shared with the agency or with the prospective adoptive parents. We believe that it is not appropriate for that major decision of giving parental consent away in any sense to take place before the six-week period. In a way, that reinforces our problem with the present construction of subsection (2) of the new clause.
    Clauses 29 and 30 provide that the parents can request the return of the baby at any time and the agency must return the child within seven days of any request unless a placement order has been applied for. What we have tried to achieve, therefore, is both speed in terms of the situation of the child and also safeguards on the rights of the parents not to be harassed, to have the right support and to make the right decision. However, after six weeks, the proper consent has to be obtained. In the meantime, that young mother is entirely responsible for her child.
    This brings me to the second situation, which, as Members of the Committee have already indicated, is where there are considerable issues and I am grateful for the support of the noble Baroness, Lady Thomas. As I read it, local authorities can place children for adoption without parents' consent where they are satisfied it should be dispensed with, pending the resolution of a later application. That cuts across the principle set out in the Children Act, that there needs to be a clear threshold before the state intervenes in family life; before it takes such a drastic step. That should be sanctioned by a court, not left to an administrative decision. Even if it is for a short time, it still needs to be done with the sanction of the court and those processes need to be followed.
    The noble Earl's clause would enable placement against the parents' wishes purely as a result of an administrative decision by a local authority with court sanction, though there would be no guarantee that the

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    court would not reverse the authority's judgment in that. The combination of the Bill's provision and the Children Act, therefore, already provides an appropriate route in those unfortunate cases where the local authority genuinely believes that it has to take rapid action for the safety of the child after birth. Where it feels that a child is at risk, it can apply immediately for emergency protection orders, for an interim care order, and it could after six weeks, and with the consent of the parent, apply for a placement order to follow on shortly.
    In such cases, it would be aware in advance that there was a potential threat to the child. Social workers know these cases, by and large. They know the family history, the situation of siblings and the relationship, so they would, in the great majority of cases, know the situation that they were dealing with—often, sadly, because of what has happened to other children in the family. They ought therefore to be able to assemble much of their case. If they have to make an application shortly after the child is born, I know that the courts will be making every effort to resolve those issues quickly for all the reasons that Members of the Committee have given.
    I believe that the noble Earl's proposal goes too far in these cases at the moment. In addition, there may not always he an appropriate family available so we need flexibility to allow for initial short-term foster care.
    I was however very struck by the evidence about the frequent movement of those children, which is obviously not something that we want to see. It also allows time for the adoptive parents to be found—and that may take longer.
    I am grateful to the noble Earl for his offer to reconsider the clause in the light of what has been said. There is additional help available to plan concurrently for these situations, which makes it clear with very young birth parents and prospective adopters that there are parallel ways of looking at what might be done. If Members of the Committee would like further information about that, I would be very happy to provide it. I hope that under the circumstances the noble Earl will feel happy to withdraw the amendment and I am grateful to those who have spoken in this debate.
    5.30 p.m.
    Baroness Howarth of Breckland: Before the noble Baroness sits down, I should like to ask for absolute clarification on one point. Does this mean that under Clause 51(3) in no circumstances could a child be placed in a home with a view to adoption under six weeks? I think of the situations described by the noble Earl, Lord Howe, where there may be another court order under the Children Act; for example, where a mother may have failed to protect previous children from significant harm and there is a real danger for the child. Surely we would then want to prevent that child being moved from one place to another and there are
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    adoptive placements for babies under six weeks. There are very few counties where there is not a waiting list for small children.
    Baroness Andrews: No, the Bill does not prevent that happening. It simply provides that during that six-week period the relevant agency will look at what is in the best interests of the child for that period. It may be that he will be placed with a foster parent or in a care home on a temporary basis.
    Earl Howe: I thank the noble Baroness, Lady Howarth, for that helpful intervention. I also thank all Members of the Committee who have spoken in this useful debate, particularly the Minister for her gentle reply to me. She fully understands the motivation behind the amendment.
    I have my doubts about the extent of the expertise present in some, if not many, local authorities to deal with the concerns of mothers who wish to have their very young children adopted, perhaps even before the baby is born. There is a need for a service for women with unplanned pregnancies. The fact is that some women do not want to have the baby they are expecting, nor do they want to have an abortion. Baby adoptions run currently at around 200 a year from care. Most of those entries into care and adoptions will not have been planned properly or very well at all. There is very little social work expertise left in this field and it is very difficult for women to get help while they are pregnant.
    I think back particularly to an extraordinarily interesting meeting that the All Party Group on Adoption, of which I am a member, had last November when we heard from an organisation called ASIST—Adoption Support in Society Today. The representative of the organisation explained its role. It is a voluntary, independent adoption support group formed in 1993. It runs a telephone helpline and it became a registered charity last year. Its aims are to make people aware of adoption as an acceptable choice and as a successful alternative for a mother and child. Although ASIST is a very small organisation based in Somerset, calls come in from all around the country and, indeed, sometimes even from abroad. Most of the callers said that they knew nothing about the way adoption works or who to turn to for assistance in answering their questions. Those who tried to seek advice from midwives, medical social workers or GPs invariably found that those people did not know the answers, even to basic questions such as: "What happens if I decide to have my baby adopted?".
    Others reported a negative response of the kind that said: "It is very early days, you will change your mind by the time the baby is born". Many mothers may indeed change their minds but, at the time of the inquiry the response they received was probably a euphemism for, "I don't know the answer", or perhaps even indicated a judgmental attitude, which, I am sorry to say, is common to a number of healthcare and social work professionals who simply do not agree with the idea of adoption at all. It was stated to us that they knew of social services departments which

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    claimed that baby adoption was not part of their ethos, and there were others who said that there was not really a call for that kind of service, despite it being a statutory obligation to provide it.
    The number of babies being adopted from care was stated to be 200 under the age of one and 1,600 between the ages of one and four during the year 2000. That suggested to us that social workers and other professionals are over-optimistic about the ability of teenagers or other single mothers to parent. Had they been properly counselled and received support and encouragement in their decision, some infants might have been prevented from being in the care system at all. So it was against that kind of background that the amendment was tabled.
    I do not believe that it cuts across Clause 51(3) because it does not refer to an adoption order. The second subsection, at least, refers to a placement order. The first subsection, of course, refers to adoption but with the consent process built in. I understand where in that context Clause 51(3) cuts in, but I do not believe that what the noble Baroness said dealt with the issue, for example, of foundling children. Furthermore, although she referred to interim care orders, she did not fully take on board the fact that local authorities already have the power to come into a mother's hospital bedroom and take babies away at birth. They do so only for very good reason, where there is a perceived risk of significant harm, but the device of obtaining an interim care order or an emergency protection order is there.
    The point I sought to make in my earlier remarks was that putting a baby in that position and then shunting the baby from pillar to post thereafter is a deeply unsatisfactory process. Why not recognise that there are rare cases where babies need to be protected from harm and try to create stability from day one?
    A possible amendment to my amendment in subsection (2) might be to say that the procedure I suggest could take place only with the leave of the court, or something like that. However, I shall give the matter some further thought. I should like to conclude by thanking the noble Baroness, Lady Thomas, the noble Lord, Lord Northbourne, and the noble Baroness, Lady Gould, for their helpful remarks earlier on in the debate. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 20 [Placement orders]:
    [Amendments Nos. 53A to 54C not moved.]
    5.45 p.m.
    Baroness Thomas of Walliswoodmoved Amendment No. 55:
    Page 14, line 15, at end insert "and every effort has been made to inform each parent or guardian or other persons holding parental responsibility"
    The noble Baroness said: I rise to move this amendment, the meaning of which is self-evident, conscious of the fact that the Minister made some reference to this matter in reply to an earlier group of
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    amendments. I would like to make sure that we are satisfied that every parent, guardian or other person holding parental responsibility is searched for and contacted.
    This is perhaps a little beside the point, but I learned something recently which everybody else in this room may already know; namely, that in some families of African origin, but not all of them, the responsibility for the family goes down the mother's line; in others, it goes down the father's line. In many cases in such families, the natural person to take over the care of a child, if the mother's care fails, is the grandmother. My noble friend has referred previously to the importance of grandmothers.
    I realise that that is slightly beyond the point, but there is a tradition in some communities as regards who holds subsidiary parental responsibility, as it were. There is a real meaning to those words, at least in some communities, although perhaps not in all. I beg to move.
    Lord Campbell of Alloway: I support the amendment, save, of course, for the reasons I gave about other persons holding parental responsibility. But it is obviously an important addition to have in the statute that every effort should be made in this regard. I think that that is a constructive amendment.
    Lord Astor of Hever: I agree with what my noble friend Lord Campbell of Alloway has said.
    Baroness Andrews: I fully appreciate the intention behind the amendment, which we touched on in an earlier debate. The amendment aims to ensure that the court cannot make a placement order unless every effort has been made to notify the parents and everyone else with parental responsibility. The arrangements for notification are set out in Clause 136, which provides that the court rules must require certain persons to be notified of the date and place where the placement order application will be heard and of the fact that unless the person wishes or the court requires, the person need not attend. That is clear.
    The people who have to be notified are those whose consent is needed for the making of the placement order, in so far as they can be found. Under the Bill, the people whose consent is required are first, the natural parents who have parental responsibility. Under the Children Act 1989, mothers have automatic parental responsibility, as do married fathers. Unmarried fathers can acquire parental responsibility either by marrying the mother of their child, or, under Clause 4 of the Bill, by agreement with the mother or by a court order. Under Clause 108 of the Bill they will also acquire parental responsibility automatically where they jointly register the birth with the mother.
    Secondly, as we said previously, any guardian of the child. That means a guardian who may be appointed under Section 5 of the Children Act to act in the event of the parent's death. Once the Bill becomes law, this will also include a special guardian. Those are the only

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    people who can consent to the adoption of the child, as we have said, or to a placement order or to an adoption order.
    Other people may have parental responsibility, and indeed it is possible for parental responsibility to be shared. But, as we said earlier, it would not be appropriate for those people who are not the parents of the child or the guardians to consent to adoption or to a placement order.
    The sharing of responsibility comes into play, for example through a care order where a local authority has parental responsibility. But under the current legislation a local authority cannot give legal consent to the adoption, nor would it be appropriate for it to do so. The same argument that we reiterated earlier holds where the child is under a residence order made in favour of someone other than a parent.
    Clause 136—and this comes to the point which was made by the noble Baroness, Lady Thomas—provides that if none of the persons whose consent is required can be found, then any relative prescribed in the court rules who can be found should be notified instead. "Relative" is defined in Clause 139, and means in relation to a child, their grandparents, brothers, sisters, aunts and uncles, whether by full blood, half blood or by marriage. Those are the people who formally should receive notice of the placement order hearing.
    The question has been raised as regards the position where the parents are separated, or one cannot be found. The agency needs the consent of all parents with parental responsibilities to placement for adoption. If one or other of them cannot be found, the agency will have to take all reasonable steps to find the other parent. Where it cannot find the other parent, the agency will have to consider seriously if it is still in the best interests of the child to be adopted. Those would be the sorts of cases where the agency would seek the guidance of the court. If we have a situation where one or neither parent can be found, there is obviously a serious issue to be resolved on behalf of the child.
    I want to reassure the Committee that that is not the end of the story. I anticipate that the concern may be to ensure that other individuals holding parental responsibility—people who are significant in terms of the child, as we discussed earlier—are also properly involved in the adoption process. It is certainly our intention that they should be. When an adoption agency is considering whether a child ought to be placed for adoption, and therefore whether it should apply for a placement order, it will be bound by the duties set out in Clause 1. That includes, in Clause 1(4)(f), considering the child's relationship with any relatives, and with any others who may be of significance to the child.
    The agency has to consider the wishes and feelings of these people, and their ability to care for the child and offer him a stable and secure home. That is part of the process of care and identification that occurs before the issue of placement order or adoption is even considered. The process will be set out in the adoption
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    agency regulations and in the guidance. In that respect it will follow the Adoption Agency Regulations 1983 which already set out that as part of the consideration the agency must establish whether there are any holders of parental responsibility under Section 4 of the Children Act.
    In considering the placement order, the court will have access to the agency report on the recommended placement, which will in future, as the current Schedule 2 report does, cover the child's relationship with his family and others of significance to him, and report on any alternatives to adoption considered. The court will also be bound by the duties under Clause 1(4)(f)in a similar manner to the agency, and will have to consider the child's relationship with his relatives and anyone else of significance to him. The court also has to consider, under Clause 1(6), all the alternatives to adoption.
    I hope I have reassured the Committee that, while we do not consider that there needs to be formal notification given to all those with parental responsibility for the reasons given, we are clear that the views and wishes of all those with a significant relationship with the child must be considered by the court and by adoption agencies well before any court proceedings take place.
    To reiterate the point about unmarried fathers, under the 1983 adoption agency regulations the local authority must make reasonable efforts to contact the unmarried father if it thinks it is in the child's best interest. We will place a similar requirement on agencies in the new regulations to be bound by good practice in that respect.
    Baroness Thomas of Walliswood: The Minister has given a very full and sympathetic response to the amendment which has covered all the situations mentioned in our brief debate. I thank the noble Lords, Lord Campbell of Alloway and Lord Astor of Hever, for supporting the amendment. I am sorry that the noble Lord, Lord Campbell, still does not recognise legally the existence of other persons holding parental responsibility. However, I am comforted by the fact that the Minister takes a marginally different view on the matter.
    There is an issue in relation to fathers who deliberately absent themselves from a relationship on the birth of a child so as not to damage the interests of the child and may be difficult to contact for that reason. I shall look very carefully at everything the Minister has said about the various means of contacting whoever might legally have responsibilities. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Lord Astor of Hevermoved Amendment No. 56:
    Page 14, line 18, at end insert "or 34(1) or (2)"
    The noble Lord said: In moving Amendment No. 56 I shall also speak to Amendments Nos. 60, 61 and 68. Clause 20(4)(a) relates to a placement order continuing until it is revoked under Section 23. Amendment No. 56 would require that it should be revoked either

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    when a child is returned to local authority care by the prospective adoptive family or at the will of the adoption agency. This would mean that the child's case is examined closely at the revocation. Otherwise, the danger is that the child comes out of an adoptive placement and drifts in the care system without a proper plan in place.
    The very fact of the placement coming to an end means that the child will have had a very difficult time. First there was the hope of a permanent family who would love and cherish the child; then a period of deep disillusionment when those hopes were going wrong; and then the finality of the relationship breaking down to such an extent that it had to come to an end. A child cannot come out of that unscathed. It is only right that the placement order comes to an end after which the child can be properly reassessed to ensure the best planning for his or her future.
    Amendment No. 61 attempts to strengthen the right of appeal or review throughout the system. Clause 23(2) gives the right of an application to revoke a placement order to the child and the local authority but not to others—for example, the birth family or the adoptive family—without the court's leave. However, subsection (3) then cuts off the avenue of gaining the court's leave by saying that there has to have been a change in circumstances. The birth family might have wanted to revoke it from the start but would now have to prove some substantial changes in the lives of those affected. The removal of this section would allow the birth or adoptive family to ask the court's leave to revoke the placement without having to prove any change in circumstance. Amendment No. 60 is in line with Amendments Nos. 56 and 61.
    Placement orders do not specify the putting of a child into a particular family. A child can be placed with any family that the adoption agency sees fit. This could in theory mean that a child with a placement order might not be in an adoptive placement but in a temporary foster placement awaiting an adoptive placement.
    Amendment No. 68 attempts to redress that danger if—in the circumstances envisaged in Clause 34, where a child's placement for adoption breaks down—the child would return to care, and that is likely to be a fostering arrangement, and be in peril of drifting in the system. The amendment would force the authorities and the courts to examine the child's case, and if adoption still seemed appropriate for the child—it may not, as any placement breakdown is extremely damaging to all concerned—a new placement order would have to be sought.
    If adoption agencies know that they would have to establish the case for adoption again, it is more likely that they would work harder to find the right placement the first time and ensure that they support that placement to the best of their ability. It would also encourage the proper giving of information to prospective adopters. The lack of this is a huge contributor to breakdown because, if people are not forewarned of the circumstances of a child's past, there is little hope that they will be able to plan for and deal
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    with that child. All this is very much in the interests of the child. Moves, placements, broken relationships and fractured trust are thoroughly harmful and result in long-term damage. I beg to move.
    6 p.m.
    Baroness Andrews: As we have gone through this afternoon discussing the various amendments, I have been impressed by how deeply and seriously people feel about what happens to children before the process of placement, during placement and following the outcome. That is certainly reflected in this group of amendments with their expression of concern about drift and the implicit delay in what happens to children. It is to the credit of all noble Lords that we return to this issue time and again.
    These amendments concern what should happen to placement orders when an adoptive placement is terminated, and they also cover the circumstances in which orders may be revoked. We are aware of concerns that authorities might not always act in some of these situations and that they might allow children to drift on placement orders. I shall try to address some of those points.
    I shall try to describe the amendments as we understand them. Amendments Nos. 56, 60 and 68 concern what should happen in circumstances in which an adoptive placement under a placement order breaks down, either because the prospective adopters return the child, which can certainly happen, or because the local authority itself decides to remove the child from the placement.
    The amendments address a substantive issue for the reasons that many noble Lords have already given. What we are trying to achieve in the Bill is security of placement. That is why we want to bring the process of negotiation with the birth parents further forward to an early stage where everyone knows the options and what is in the best interests of the child. We would expect the local authority to review this situation very thoroughly, and, when there is a breakdown, to determine whether they still believe that the child should be placed for adoption and whether there is an alternative. There may be something in the situation itself which contributes to the breakdown and means that adoption is no longer appropriate.
    If the local authority concludes that the child should no longer be placed for adoption, it can discharge the placement order. That is a very powerful safeguard, especially when it is combined with the new independent reviewing officer system which is coming in with the amendments to the Children Act under Clause 117.
    We are also trying to avoid being too rigid in primary legislation, simply because of the variety of circumstances. That is one reason why we have advocated that there should be the concept of placement without a placement order. It comes back to the arguments we had at the beginning of the Sitting. There may be a great deal of difference between a case in which the adopters decide to return a child—it may be a very difficult child; there may be all sorts of

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    reasons—and a case in which the local authority decides to end the placement because it has made a bad judgment about the prospective adopters.
    It may be that the local authority is clear that the child should still be placed for adoption and that it is a question of finding the right family. In that case, it would be neither helpful nor in the interests of the child to require the local authority to return to the court. It is a part of the argument for delay, but it can also be argued that we need flexibility to allow the agencies to reconsider some of the options that they have which do not involve the court process.
    I take the points made earlier by the noble Earl, Lord Howe, about the variable practices in local authorities as regards the specific provision made for young mothers and so on. However, in their role as adoption agencies—the National Adoption Standards will help in this regard— properly regulated and performance-managed, with the raft of measures in Clause 1, to which my noble friend Lord Hunt referred, they will have the appropriate skills and scope to undertake the detailed management of adoptive placement and to decide what is best for the child.
    We should show some confidence in that capability and not require them to be second guessed by the courts. It will be very undermining, not to say demoralising, if at the back of every decision the local authority makes is a sense that the court will come to the rescue. It inhibits best practice, if anything.
    That balanced approach is taken in the Children Act—again, the noble Lord, Lord Clement-Jones is not in his place to hear me say the word "balanced" ߞand it is appropriate in this legislation.
    Amendment No. 56 would require that an existing placement order is automatically discharged when a child is either returned by the prospective adopters under Clause 34(1) or where the decision has been taken to remove the child. Amendment No. 60 would, in the same circumstances, require the local authority to apply for another placement order if it still considered that to be the right choice for the child. Amendment No. 68 is linked and would require any existing placement order to be discharged either when the prospective adopters decided they wished to return the child or the agency decided for itself that it was not satisfied with the adopters and it notified them that the child must be returned.
    The net effect would be that where the child was placed for adoption under a placement order and it broke down, the existing placement order would automatically be discharged and everyone would go back to the court. That would reduce the flexibility of the Bill.
    As it is currently drafted the Bill provides for local authorities to do what is in the best interests of the child and allows them to consider all the options. We would expect the agency thoroughly to review the case and to consider whether there are options other than adoption.
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    If the child has been placed for adoption under a placement order and the authority considers that that is still the best option, it can then act swiftly and use the same authority and the same placement order to place the child in another setting; it does not have to go back to the court, with the associated delay and distress. It is a very distressing business for a child to know that, whatever decision has been taken, he is once again involved in a trip back to the court. Even if the child is quite young, he will be aware of its significance. We should bear that in mind.
    The general authorisation to place, given by placement order, was widely welcomed in the detailed consultation on placement conducted by the previous administration. The responses were strongly in favour of general rather than specific placement orders because they give additional flexibility. The purpose of placement orders, therefore, is for the court to decide that placement for adoption is in the best interests of the child. The judgment is that while the quality of the placement is absolutely essential, the identity of the prospective adopters need not be absolutely satisfied, either when the child is already placed or possibly where a suitable match has provisionally been identified. The court is being asked to take a decision in principle that the child ought to be placed, not with whom the child should be placed. That is the focus of the placement order.
    These amendments create an additional, unnecessary inflexibility, and I hope that I have made the arguments clear to noble Lords.
    I turn to Amendment No. 61, which deals with the related issue of the conditions that have to be met before an application may be made by anyone other than a child or the local authority to discharge a placement order. Clause 23 provides for placement orders to be revoked on application to the court. The local authority can apply to revoke a placement order at any time. That is to allow for all eventualities which might arise when the local authority considers that the child should no longer be adopted, circumstances having changed.
    A child, or someone acting on his behalf, can also apply at any time for a placement order to be revoked. That adds considerable flexibility. Otherwise, an application to revoke a placement order may be made only with the leave of the court, and if the child is not yet placed for adoption. The court may grant leave only if there has been a significant change in the birth parents' circumstances since the order was made. Anyone may apply for leave, including the child's birth parents.
    Amendment No. 61 would obviously remove the test that there must be a significant change of circumstances before the court could grant leave to apply to discharge a placement order. The requirement that there must have been a change of circumstances before the parents or others might apply is intended precisely to prevent the court from being invited simply to repeal the deliberations that have taken place. The considerations will have been mulled over at different stages of the process.

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    It seems unfair to us to expect that decision to be reversed unless there is a significant change of circumstances to which people can point and say, "A decision is justified on those grounds".
    In making the placement order, the court will already have been obliged by Clause 1 to consider all the alternatives and to take account of the views of the child's relatives and their capacity to provide a stable and secure environment. The placement order will reflect that.
    We believe that it is right in the interests of promoting the security of the child, that the court should consider whether those circumstances have changed before it looks at whether or not to reverse that decision. The alternative would be that at any stage after the making of the order, before the child was placed for adoption, the parents or anybody else would seek leave as if nothing had changed. It would merely cater to whim.
    As we are concerned about disruption, I believe that that would be needlessly disruptive. The provision is a way not only of minimising that, but also of collectively saving time and resources, and having regard to the processes that are gone through, and particularly the impact on the child. One of the main aims of the process is to try to increase security.
    Despite the thoughtfulness of the amendments, I hope that Members of the Committee will understand why we are not minded to think that they are an improvement to the Bill in that form.
    Lord Astor of Hever: I am very grateful to the Minister for that full reply. There is a great deal to digest in her response, and we will go away and think about the issues very carefully. I was heartened by what the Minister said about wanting to avoid any drift or delay on the placement orders at all costs. That is very important. I heard what she said in the context of Amendment No. 56 in not wanting to be too rigid in primary legislation. As regards Amendment No. 68, I accept that a trip back to court is to be avoided if at all possible for a child.
    We do not accept that the amendments add a great deal of inflexibility. We would want to consider them carefully and come back at the later stages. In the meantime, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    6.15 p.m.
    Baroness Barkermoved Amendment No. 57:
    Page 14, line 19, after "adoption" insert "or special guardianship"
    The noble Baroness said: I should perhaps begin by explaining that my colleague, the noble Lord, Lord Clement-Jones, has left to keep a very longstanding engagement. Perhaps he was bowled over by the Minister's eloquence.
    Amendment No. 57 in a slightly different format was moved by my honourable friend in another place, Sandra Gidley. That was answered by the Minister in
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    another place, Jacqui Smith, but having read her words, I do not understand why a placement order should stay in force and then be revoked when an adoption order is made, but not when a special guardianship order is made.
    I realise that we have not so far in our deliberations spent much time on special guardianship and I know that we will do so later. My broad understanding of special guardianship, as I read it in the Bill, was that it was not a placement but a new form of relationship which is—I hesitate to say on a par with adoption but which has clear continuing ties to birth parents. As I read it, it was one of the clearest things in the Bill.
    I cannot therefore understand why an adoption order should lead to the revocation of a special placement order and a special guardianship order should not. I do not understand from the Minister's answer in another place why it was felt necessary that there should be recourse to the courts to revoke a placement order in the case of special guardianship, but not for adoption. Therefore, this is a probing amendment to ascertain the status of special guardianship with regard to placement. I beg to move.
    Lord Hunt of Kings Heath: I understand that this is a probing amendment and, of course, as the noble Baroness, Lady Barker, suggested, we will be debating special guardianship orders in detail later. However, it might be useful if at this stage I explain briefly what these are and how the provisions relating to them and to placement will work, before responding to the specific probing amendment that the noble Baroness has put forward. Clause 112 of the Bill makes provision for a new special guardianship order under the Children Act 1989. I stress that this is under the Children Act 1989 and not under the Adoption and Children Bill that we are now considering.
    The idea of a new status was proposed in the Performance and Innovation Unit report following the Prime Minister's Adoption Review in July 2000 and received widespread support in the public consultation that followed. The Government subsequently gave a commitment in the White Paper, Adoption: A New Approach, to develop a new legal option called special guardianship, which is aimed at meeting the needs of children for whom adoption is not appropriate, but who could still benefit from a permanent, legally secure placement.
    We know that children value the sense of legal security and permanence that can come with a court order. The intention is therefore to give the special guardian clear responsibility for all the day-to-day decisions about caring for the child or young person and for taking decisions about his or her upbringing. But unlike adoption, the order retains the basic legal link with the birth parents. They remain legally the child's parents, though their ability to exercise their parental responsibility is limited. The birth parents retain the right to consent or not to consent to the child's adoption or placement for adoption.
    The White Paper suggested that special guardianship might be appropriate for some older children who may, for example, be being looked after

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    in long-term foster placements and who do not wish to be legally separated from their birth parents but could benefit from greater legal security and permanence. It might be appropriate for some children being cared for on a permanent basis by members of their wider family. Additionally, some minority ethnic communities have religious or cultural difficulties with adoption as set out in law.
    In those circumstances at present, such children would probably be looked after either by local authority foster parents or informally. Where adoption is not appropriate, the only alternative legally secure option available is a residence order.
    The new order is intended to offer more than a residence order in terms of the security it brings and the support package that may be provided. It is designed to be flexible enough to work in a range of situations—including, for example, where there is extensive and regular contact with the birth family—and in instances where that would not be appropriate but where it is nevertheless desirable to retain the basic legal link between the child and the parent.
    The Government want to see this new order used successfully. Therefore, we are placing in the Bill a duty on local authorities to make arrangements to provide support services for special guardianship placements. We anticipate that these support services will operate in a similar manner to adoption support services.
    The new provisions have been widely welcomed as offering a positive new option for delivering permanence for children. We intend to consult widely on the rules, regulations and guidance that will accompany the implementation of these provisions.
    As for the relationship between special guardianship orders and placement orders, Clause 28(5) provides that where a placement order is in force, no special guardianship order may be made. We come to the nub of the issue raised by the noble Baroness, Lady Barker. The reason for this is that where a placement order has been made, the court has taken a decision that the child ought to be placed for adoption, having considered all the alternatives, which would include special guardianship, and having considered the views and wishes of those who have significant relationships with the child, in line with the duties set out in Clause 1.
    One of the intentions of the placement system is to increase the stability and security for prospective adopters and for children placed for adoption once the decision to place has been made by shifting the point of that decision to earlier in the adoption process. We have already discussed some aspects of that. Where that decision has been properly made—in this case by a court making a placement order—we believe that the placement should be protected. That is why we consider that applications for special guardianship orders, seeking in effect to reverse the placement decision, are not appropriate while the placement order is in force.
    If there are problems with placing the child or if the situation changes such that a placement for adoption is no longer in their best interest, the right course of
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    action would be in the first instance for an application to be made to discharge the placement order under Clause 23. We do not believe that it is appropriate for that decision to be made by default as a result of a special guardianship application.
    However, we do believe that it is appropriate that where a child is under a placement order, but where the parent or guardian of a child had the leave of the court under Clause 46 to oppose the making of a final adoption order, they are also permitted to make an application, if they wish, for a special guardianship order to be considered at the final adoption hearing as an alternative to the proposed adoption. This is provided for in Clause 28(5)(a) and (b). Others who are entitled to do so may also make application for residence orders or special guardianship orders to be considered at the final adoption order hearing as alternatives to adoption, provided that they secure the leave of the court to do so.
    The court is free, at the final adoption order hearing, to discharge the placement order if it decides not to make an adoption order, but some alternative such as a special guardianship order should be made instead. This is set out in Clause 23(4).
    I hope that I have reassured the noble Baroness, Lady Barker, that the special guardianship order needs to be considered at the appropriate place. However, once a placement order has been made, it is made in the context that the end result of that will indeed be adoption.
    Baroness Barker: I thank the Minister for that reply. I believe it was helpful not only to me but to other noble Lords as well. The status of special guardianship and adoption was perhaps not as clear as we thought.
    I understand the Minister's comment about placement orders being specifically a matter for adoption. Following what he said, I did not get the sense that a special guardianship application at the stage of the final adoption hearing is working towards the same end described earlier by the noble Baroness, Lady Andrews, in which everyone involved has an opportunity to consider options—rather than a situation in which the final adoption hearing is essentially a high noon when everyone faces a fait accompli. I understood that, although special guardianship and adoption orders are not interchangeable, they are certainly on a par in terms of their permanence.
    Lord Hunt of Kings Heath: Are there not two points here? First, when it comes to making a placement order, clearly a special guardianship order is an option that the court may consider when deciding whether to agree to a placement order. Secondly, when one reaches the final adoption hearing, if—as we know—the parent has already given consent and the court gives leave to the parent, they may come before the court to argue against an adoption order being made. At that stage, the argument may then be put that a special guardianship order might be more appropriate.
    Baroness Barker: I thank the Minister for that last bit of reassurance; it addresses some of the issues that

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    I set out to explore with the amendment. I have had some very indicative answers. I therefore beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    6.30 p.m.
    Earl Howemoved Amendment No. 58:
    Page 14, line 21, at end insert—
    "() A placement order must be reviewed by the court two years after it is issued if, at that time, it continues in force."
    The noble Earl said: Clause 20(4) envisages three sets of circumstances in which a placement order can come to an end. They are: when the order is revoked under Section 23; when an adoption order is made in respect to the child; or when the child marries or attains the age of 18 years.
    When I first read the Bill, I formed a view that the provisions for placement orders represented a significant step forward as a mechanism to replace what we have had up to now, which are freeing-up orders. The procedures surrounding placement orders are certainly a major step forward in most aspects, but in one respect I have concerns. What the Government and indeed all of us are seeking to get away from is the situation where a child might find himself in indefinite limbo, neither with his birth parents nor adopted but floating around in the care system.
    As Clause 24 reads, that undesirable situation could recur. There is no time limit to a placement order and we have to ask what happens if, despite the provisions of Clause 1, there is a delay in making an adoption order. There ought to be an automatic, in-built check in the system to ensure that children are not left in limbo, which is why my amendment proposes that there should be a review by the court at the two-year point after the placement order had been first made. Unless there is such a check, placement orders will not be seen as such a marked improvement upon the outdated freeing-up orders. I hope that the Minister can give me some reassurance on this point and I beg to move.
    Baroness Andrews: I am very glad to hear the noble Earl, Lord Howe, agreeing with us that it is good to see the end of freeing orders. He talked about the consignment of a child to limbo and there was nothing more designed to put a child in limbo than a freeing order, which left him without any legal parents whatever. The placement order is clearly an improvement upon that and the purpose of the Bill is very much to create that framework, where everyone knows what legal rights there are and what processes can be followed.
    I appreciate that the amendment is aimed at tackling the situation where after two years the child has not been placed. Indeed, we are back to tackling drift here but we ought to bear in mind that we would certainly expect the local authorities to leave no child to drift for six weeks, let alone six months, let alone two years. We would expect the local authority to be reviewing this placement regularly. We would expect it to review the plan for adoption and this starts now very early on.
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    The current regulations from the Adoption Agencies' Regulations 1983 require a review after four weeks and at six monthly intervals thereafter. We intend similar obligations to be placed on authorities through the new regulations that will be made, so we are building in this requirement under regulations for regular and early review. Where a child has not been placed after two years, we would obviously expect the authority to be asking itself whether this route into adoption was appropriate. The reasons it is difficult to place children for adoption are many and complex and it may be that there are other and better routes for that child, given its circumstances. In such a situation, therefore, we obviously go back to the overriding concern for the paramountcy of the welfare of the child and all the other provisions in Clause 1.
    However, if the authority decided that placement for adoption and the plan for adoption was no longer in the child's best interests, under Clause 23, it can apply to revoke the order at any point. If there are problems when a child is placed, we would expect the local authority to act and where it considered the problem sufficiently serious to make a change of plan, we would expect it to discharge the placement order.
    We are aware that one cannot afford, and would not want to be complacent in this situation about all authorities reaching for best practice. Authorities do not always act and we have to guard against drift. Therefore, Clause 23 allows the child, or indeed someone acting on his behalf, to apply to discharge the placement order at any point. That could be social services, a social care worker, or a range of people acting to safeguard the interests of the child.
    That we see as providing a powerful safeguard but it does not stand alone. It also stands with a new independent reviewing officer system that is introduced through our amendments to the Children Act in Clause 115. That also covers children in adoptive placement and, when we reach that clause, I am sure that we shall have a longer debate on its implications and strengths.
    Where a placement is not going well to the extent that the reviewing officer becomes concerned and the local authority does not act to rectify the situation, the reviewing officer will be able to refer the case on to CAFCASS, if it considers that the child's human rights may be at risk. CAFCASS could then apply, on behalf of the child, for the discharge of the placement order.
    Therefore, we have in place a series of safeguards; we have the regulations about regular review; we have the independent reviewing officer; we have the ability of someone acting on behalf of the child to discharge the order; and we have the reviewing officer being able to come back to CAFCASS. I therefore believe that that system of safeguards will ensure that drift will be avoided wherever possible.
    In light of the arrangements, the Government do not believe that it is appropriate to bring the court into play. I set out the reasons when I spoke to the previous amendment; that is, the relationship that the local authority has, the requirement to act in the best interests of the child and to use the courts when it absolutely needs to have the power to act.

    CWH 167
    The Children Act makes this division of responsibilities clear and we feel that the same principles should apply to adoption. However, we are determined to ensure that, in cases where the child has spent an unconscionably long time without being found an adoptive placement, we shall not tolerate drift. Therefore, I hope I have been able to offer some assurance that we have the framework in place and that the noble Earl will feel able to withdraw the amendment.
    Earl Howe: I thank the Minister for her helpful reply. I recognise the force of many of the points she has made, not least as regards the safeguards that she listed.
    My fear is still that we could have a local authority that would be reviewing the situation regularly but, despite that, there may be drift and even an absence of best practice; perhaps some political correctness creeping in about matching the child with the ideal set of adoptive parents or something of that nature. There would be supposedly good answers that the local authority would give to anyone who challenged it on why this or that child had not been placed with adoptive parents.
    The thought that the courts could act as a long stop was based on a wish, at least on my part, that the local authority should be kept up to the mark in a way with which it could not argue. However, I shall consider carefully what the noble Baroness has said between now and Report stage. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Earl Howemoved Amendment No. 59:
    Page 14, line 21, at end insert—
    "() The child shall, being of 5 years of age or more, be a party to proceedings relating to the placement orders unless the child has consented to waive his or her rights to be a party."
    The noble Earl said: I can deal with Amendment No 59 briefly. In earlier amendments, we debated the importance of ascertaining the wishes of a child during the process of decision-making relating to his or her adoption. There is nothing that appears to mirror Clause 1(4)(a) in Clause 20. Nowhere in this clause are the child's own wishes referred to. The whole process of a placement order is to be conducted apparently over the child's head.
    Obviously, for very young children, it is impractical to involve the child in the decision about the placement order, but for older children, the child's wishes and views should at least be ascertained and taken into account. That is why I have tabled this amendment. I beg to move.
    Lord Hunt of Kings Heath: I do not know if I can answer this very simply, but I draw the attention of the noble Earl to Clause 1(7)(a) which makes clear that a placement order is covered within the meaning of Clause 1(4)(a), so the child's
    "ascertainable wishes and feelings regarding the decision"
    need to be considered. I can give a long answer, but that is a quick one.
    Baroness Barker: On that basis, cart I ask the Minister the same simple question that I asked when we debated Clause 1: how would a child initiate proceedings under this measure? The Minister can give me a very simple answer.
    Lord Hunt of Kings Heath: Clearly, there are a number of ways in which that could happen In the first place, the court has to ensure throughout any of the procedures, including the placement procedures, that the child's ascertainable wishes and feelings regarding the decision are duly considered in accordance with the paramount consideration raised in Clause 1(2). Of course, the child will have access to the matter. If the child's case was being looked after by his social worker, that access could be achieved through the independent case review mechanism that we propose, or it could be achieved through an advocacy system.
    It is important to recognise that the way in which the child's views are put before the court will vary in different circumstances and in different proceedings. In some cases it would be right for the child to be a party to proceedings and, for instance, to have a CAFCASS children's guardian appointed to act on his behalf. Indeed, in the Explanatory Notes setting out the Government's thinking in October 2001, the thinking was that the child would automatically be a party in placement order proceedings and would have a CAFCASS children's guardian appointed to act on his or her behalf, in the same manner as is currently done for children in care order cases.
    We also currently envisage that a child would not automatically be made a party in adoption proceedings, although he or she would be able to apply for leave to be made a party in those proceedings. In other cases where the child is not a party, there might be other routes for the child's views to be conveyed to the court. Clause 99, for example, would allow the court to ask the CAFCASS officer to produce a general welfare report to the court on the case which could cover the child's views.
    I should say that my noble friend Lady Scotland has already written, or is writing, to noble Lords setting out some detail of our early thinking. Although we intend to consult on the issue before setting out the detail in court rules, we currently envisage that placement order proceedings will be specified within the meaning of the Children Act 1989. In other words, a child will be party to the proceedings and a CAFCASS officer and a solicitor will be appointed to act on behalf of the child. A child will not automatically be a party to adoption proceedings, although he or she may be made a party where it is

    CWH 169
    appropriate to do so. Again, the child will not automatically be a party to special guardianship proceedings, although he or she may be made a party where it is appropriate to do so.
    In both adoption and special guardianship proceedings we intend that CAFCASS will report to the court on the welfare of the child. That is in Clause 99(3)(b). This may include recommendations to the court that the child should be made a party. The court has discretion to appoint the child a party throughout proceedings.
    I conclude by saying that our views on the detail are not at all fixed. The full detail on representation and party status in proceedings will be set out in secondary legislation such as court rules and we intend to consult on these detailed proposals over 2003 and 2004. Clearly, we wish to retain flexibility in relation to secondary legislation to pick up any issues that could be raised through the consultation process.
    6.45 p.m.
    Earl Howe: I thank the Minister for that very helpful reply, which was even more helpful than his short reply earlier on, for which I have in turn to thank the noble Baroness, Lady Barker. Clearly, my amendment is unnecessary but it is helpful to have that clarification on the record. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 20 agreed to.
    Clause 21 [Applications for placement orders]:
    [Amendment No. 60 not moved.]
    Clause 21 agreed to.
    Clause 22 agreed to.
    Clause 23 [Revoking placement orders]:
    [Amendment No. 61 not moved.]
    Clause 23 agreed to.
    Clause 24 [Parental responsibility]:
    Baroness Barkermoved Amendment No. 62:
    Page 16, line 13, at end insert—
    "(5) There shall be a written procedure under which any parent or guardian or prospective adopters may apply to the panel, constituted under section 12, for a review or initiation of any determination pursuant to subsection (4)."
    The noble Baroness said: Until the start of these Committee proceedings I had never regretted not having been a Member of your Lordships' House for very long, but I increasingly regret not having been here in 1989 to sit through all the detail of the Children Act. I suspect that that matter may arise again in regard to this particular amendment because I rather suspect, old hand as I am becoming, that the Minister will talk about the Children Act. However, I shall none the less move my amendment which I believe is self-explanatory. It concerns a written procedure under which people who apply for parental responsibility and are turned down may challenge that decision. These are perhaps some of the most difficult decisions that family courts have to deal with.
    CWH 170
    In moving this amendment, I ask the Minister whether or not adoption, and parental responsibility within adoption, is a special case which perhaps merits consideration under this Bill rather than under any other legislation such as the Children Act. I beg to move.
    Lord Hunt of Kings Heath: This is an interesting amendment which suggests that adoption agencies' determinations about the exercise of parental responsibility when a child is placed for adoption should be subject to an independent review panel under Clause 12. It also appears to suggest that the review panel should in some way be able to initiate determinations in respect of parental responsibility.
    We had a very good debate on this matter on Thursday. Members of the Committee will know that my general view is that it would not be appropriate for what I consider to be the agency's day-to-day management of the adoptive placement to be subject to second guessing or micro-management by an independent review process. We have identified the two areas where we think that the independent review process is best operated; that is, first, in relation to where the agency is minded to turn down prospective adopters and, secondly, where the agency decides to exercise discretion on the release of restricted information.
    I know that we are going to come back at Report stage to debate this and I shall set aside this debate to concentrate specifically on the amendment. However, I again make the point that there has to be an element of trust as well as an element of regulation and performance management. I am concerned that some noble Lords are seeking to introduce this independent review mechanism to cover almost everything that an adoption agency does. I shall resist that. However, there is a sensible debate to be had as to which areas such an independent review mechanism should cover. Clearly there is room for discussions on those matters between the Committee and Report stages.
    As to the amendment, I come back to the point I made earlier about the purpose of placement for adoption. Either the parents have consented or the court has decided that the child shall be placed for adoption by the agency with a view to him being adopted, becoming part of an entirely new family and ceasing in law to be the child of the birth parents. The safeguards, of course, will have been gone through before the parents give consent under Clause 18. They will have been thoroughly counselled and advised by the adoption agency as to the implications of consent; their consent will be independently witnessed by a CAFCASS officer, whose job will be to ensure that the parents have a full understanding of the meaning of the consent that they are giving; and there will be a standard form that will spell out clearly what is involved.
    Once the decision is made that the child should be placed, either with consent or under a placement order, until the child is adopted the agency has the primary responsibility for the child's welfare and for overseeing the placement. This is important and

    CWH 171
    reflects back to the question raised earlier about the problems with freeing orders and the position of limbo that some children are in under those orders.
    Here the agency is the body with the skills needed to manage and oversee the placement and to prepare all parties for the final adoption. It has both expertise in adoption and detailed knowledge of the individual case. It is right that it should manage the placement and, if necessary, the extent to which others who have parental responsibility may exercise it.
    To return to safeguards, it is worth emphasising that where the placement is with consent under Clause 18, if the parents are unhappy with the placement they are, up to the point where an application for an adoption order has been made, free to withdraw their consent and bring the placement to an end.
    The Bill provides for the prospective adopters also to have parental responsibility for the child once he is placed with them. This is the crux of Clause 24, which we are debating. This is for practical reasons. Placement may last several months and, as the child settles in to what is intended to be his new family, the fact that the prospective adopters have taken on parental responsibility will enable them to take responsibility for agreeing to, for example, medical treatment, consenting to school trips and so on. Adoption UK, speaking on behalf of adopters and prospective adopters, welcomed this provision in its evidence to the Committee.
    The draft Bill of 1996, to which my noble friend referred, gave prospective adopters full parental responsibility from the point of placement. But responses suggested that some prospective adopters might not want the full burden of responsibility immediately and that it might be appropriate for the exercise of parental responsibility to be a gradual process which developed as the placement itself progressed. That is entirely consistent with the debate that we had on Thursday about the process of adoption support. That is why we want the agency to determine the extent to which the prospective adopters may exercise parental responsibility. We would expect this to be the result of discussion between the agency and the adopters. So, in that context, it is appropriate that in managing the placement the agency should be able to determine the extent to which the birth parents may exercise parental responsibility in order to ensure that the placement runs smoothly and to safeguard it from any interference.
    If the birth parents or the prospective adopters are unhappy about the manner in which the agency restricts their ability to exercise parental responsibility, we would expect them to discuss this with the agency in the first instance and, if not satisfied, to use the relevant complaints procedure as they would with any other aspect of the management of the placement with which they were not happy.
    In cases of placement with consent, ultimately it is open for the birth parents to withdraw consent and, of course, to have the child returned to their sole responsibility. I hope that, while I suspect the noble
    CWH 172
    Baroness and I do not agree as yet on the independent review mechanism, she will understand the reason for the drafting of Clause 24 as it is.
    Baroness Barker: I thank the Minister again for that full reply. I shall take the opportunity to say to the Minister that our obsession with the written procedure, and our requests for there to be independent reviews, should not always he deemed to be a criticism of the agencies. It is certainly in part a frustration about not seeing the regulations and about having to guess so much about what will happen and what will happen to people. I come to the Bill mindful that we are setting a legislative framework within which individual people make individual decisions, day in, day out, of a very tough nature.
    I would also say to the Minister that written procedures are not always a stick with which to beat social workers. They are very often a good basis for social workers to explain to people and their advocates who may have some difficulty in understanding what is happening to them in a stressful situation. Therefore, I do not necessarily buy the criticism that goes with this. However, I understand what the Minister says about the gradual transfer of parental responsibility.
    It is perhaps one of the most personal decisions in this whole business and I tend to think that decisions about harm to children are perhaps more easily demonstrable but questions about parental responsibility are often deeply subjective. It is with that in mind and with the aim of protecting some of the people involved that we moved our amendment.
    Lord Hunt of Kings Heath: I wonder whether the noble Baroness will give way, because I accept the point she makes. I really want to come back to the point she made about the independent review mechanism and the question of regulations.
    I understand that there was always a desire, when debating the framework in primary legislation, to know what would be in the regulations. We have a problem here because it is quite clear that a considerable amount of work needs to be undertaken following passage of the Bill and the enactment of the new procedures in 2004. We intend that there should be a very open debate, discussion and consultation on the regulations. I also say that I believe in relation to independent review of determination, the very fact we have regulation allows us to adopt a flexible response in future.
    As noble Lords will know, we have identified these two areas to which we believe the independent review mechanism should relate. However, as things develop, as we gain more experience about how the new procedures adapt, there may well be situations where the performance generally of adoption agencies is deemed not to be satisfactory; where the case for then extending the independent review mechanism to cover such cases will become apparent.
    So, while I understand the frustration of the noble Baroness, I would say that regulations allow us some flexibility for the future to make adjustments in the light of experience. I also understand that. she is not

    CWH 173
    seeking to criticise local authorities or adoption agencies. The point is well taken; all I would argue for is a degree of flexibility here.
    Baroness Barker: I hear what the Minister says. I would take him back to my speech at Second Reading, where I specifically spoke about the fact that there may be times when we could not seek balance because there is no balance to be had.
    I do not believe, as some people have done, that argument for independent review is argument for an indefinite appeal on the part of people who perhaps may not be suitable. I believe that there will come a point when usually social workers, or adoption panels, will come to the end of the road and will say, "No, these people are not suitable". That is a tough point to reach.
    I believe that asking for written procedures to be on the face of the Bill does not undermine that in any way at all. It is not necessarily as incorrect as it has been deemed to be.
    I cannot remember the case—and the noble Baroness, Lady Howarth, might be able to help me out—but I believe it was in Norfolk where two people went on the run with a couple of children a couple of years ago. I remember vividly that the matter came up on "Question Time" and the panel was asked to talk about it. One person, whom I believe was one of my colleagues, was absolutely right in saying, "All these social services questions are governed by confidentiality and I cannot talk about this".
    Since then I have been struck by the utter frustration that surrounds many social care matters. That is why in many cases I am a fan of written procedures; I do not believe that it is always easy for there to be written answers.
    I am sorry that we have trailed off into a slightly convoluted argument, and one which I did not intend to get into. I believe there is a need to ensure that all parties to difficult matters, which usually cannot be resolved by balance, at least have a means of coming away from them feeling that they have been justly treated under the procedures. That was part of the reason for having a go at this. I am sorry that we have meandered slightly off the point, but I believe it has been a useful debate, given that the department is so open to suggestion on these matters. With that, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 24 agreed to.
    7 p.m.
    Clause 25 [Contact]:
    Earl Howemoved Amendment No. 63:
    Page 16, line 22, leave out paragraph (b) and insert—
    "(b) the court may make an order under this section which may—

    (i) require the person with whom the child lives, or is to live, to allow the child to visit or stay with the person named in the order;

    CWH 174

    (ii) allow for the person named in the order and the child otherwise to have contact with each other;

    (iii) prohibit any form of contact between the child and the person named in the order."

    The noble Earl said: We move now to Clause 25, which deals with what is sometimes a vexed and contentious subject; that of contact. Amendment No. 63 deals with one particular aspect of the contact provisions.
    Under Clause 25(2)(b) as drafted, a court may make an order requiring visits, stays, or other forms of contact. It does not allow the court to prohibit contact.
    Clause 26 allows the court to provide for contact on certain conditions, and in limited circumstances it allows for the adoption agency to refuse to allow contact. However, those provisions fall short of the court prohibiting contact. The presumption will normally be that facilities should be made for the adoptive child to have contact with his or her birth family in the widest sense.
    However, it is a sad truth that many of the children who are looked after and are being placed for adoption come from situations of mental or physical abuse from one or more of their family. There are circumstances where it will be clear to the court that contact should be prohibited. All that the amendment does is to make it clear that the court has that power. I beg to move.
    Lord Hunt of Kings Heath: As the noble Earl suggested, the amendment concerns provisions in Clause 25 covering contact where an adoption agency is authorised to place a child for adoption. Before turning to the specific amendment, perhaps I may explain briefly the thinking behind the approach we have taken.
    Clearly, placement for adoption represents a great step change in the future plans for the child. All noble Lords have very much reinforced that point today. It is absolutely appropriate that existing contact arrangements should be revisited. That is why the clause provides that existing formal contact arrangements—in other words, contact orders made under the Children Act—cease to have effect.
    Our preferred approach is that the adoption agency, the prospective adopters and the parent should review existing arrangements and agree between themselves what contact arrangements are appropriate in the interests of the child now that the child is placed for adoption.
    However, as informal agreements may not be possible, the clause provides for the court to make an order for contact on the application from, for example, the child, its birth parents, the adoption agency and a range of others listed in subsection (3) of Clause 25—such as a guardian of the child or a person in whose favour a residence order had been made immediately before the adoption agency was authorised to place the child for adoption. Unless varied or discharged, those orders would last until an adoption order was made.

    CWH 175
    The provisions are similar to those in Section 34 of the Children Act which govern contact with children in care.
    As the noble Earl explained, Amendment No. 63 is aimed at ensuring that an order for contact under Clause 25 can include an order for non-contact. I agree with the noble Earl that it is important for the court to be able to make an order for non-contact. This might happen, for example, where the adoption agency supervising the placement becomes concerned that someone, perhaps a member of the child's family, might seek inappropriate contact with the child that might risk disrupting the adoptive placement.
    I should like to reassure noble Lords that the Bill already allows for this. The wording used in subsection (2) is deliberately modelled on that for contact orders under Section 8 of the Children Act. One advantage of this is to ensure that an order for contact may include one that provides for non-contact where that is in the best interests of the child. In addition, the court could also make a prohibited steps order under Section 8 of the Children Act directed at the person thought to be at risk of initiating harmful contact.
    There is case law which makes it clear that a Section 8 contact order can include an order for non-contact. I recognise that the wording of Section 8 does not actually include the words "non-contact". I am happy to send details to the noble Earl. The case is Nottinghamshire County Council v P in 1993.
    Earl Howe: That is a helpful reply, and I am grateful to the Minister. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Earl Howemoved Amendment No. 64:
    Page 16, line 28, at end insert "or sibling"
    The noble Earl said: In moving Amendment No. 64 I shall also speak to Amendment No. 121. As we have discussed already, Clause 25 contains very important provisions about contact. Amendment No. 64 is quite simple. It adds siblings to those who can apply for a contact order under this clause. Siblings are defined by Amendment No. 121—uncontroversially, I hope—as full or half brothers or sisters.
    The current provision in subsection (3) allows the child or an adoption agency to apply, as well as the parent or guardian of the child and some others, and the court can grant leave to others to apply. However, brothers and sisters are not mentioned.
    I am sure that the Committee will be aware that one of the difficult aspects of placing children for adoption is that brothers and sisters have to be split up. It is very often important for children that appropriate arrangements for contact should be made. Of course, I am not suggesting that responsible agencies or authorities do not have in mind the needs of full or half siblings. However, this amendment gives those siblings a little more recognition in the process leading to contact orders being made. I beg to move.
    Lord Northbourne: I support the noble Earl. This is an important amendment. As it may save time at
    CWH 176
    Report stage, may I ask the Minister, when he replies, to consider the possibility of grandparents also being allowed to apply?
    Lord Hunt of Kings Heath: I agree that this is a very important matter. Siblings are very important to the child who may be being considered for adoption.
    Amendment No. 64 would give siblings the ability to apply as of right for an order under Section 25 for contact under placement. Amendment No. 121 is consequential and provides a definition of the term "sibling" for use in the Bill.
    I want to make it clear that the Government are committed to promoting links between siblings in adoption. Indeed, the National Standards make the preferred position very clear—these are the National Standards to which I referred earlier in debate and which will very much govern the way in which adoption services are operated by local authorities and agencies—that siblings should he placed together unless this does not meet their individually assessed needs.
    We should expect that adoption agencies would make appropriate arrangements for the child to have contact with siblings where it is in the child's interest. If there were any obstacle to this, the agency could apply to the court for a contact order under Clause 25(3)(a).
    If siblings themselves wanted to seek contact, we would expect them to approach the agency and agree an arrangement with it and the prospective adopters. However, if this did not prove possible, it would be open to the sibling to seek the court's leave to apply for a contact order under Clause 25(3)(e).
    I agree that Clause 25 does not provide explicitly for siblings to apply. In this, it is the same as Section 34 of the Children Act, which makes parallel provision for contact where the child is subject to a care order under care orders. Clause 25 is modelled on Section 34. However, the noble Earl, Lord Howe, has made a very good case. I give a commitment to noble Lords to look at the issue between Committee and Report stage to see if there would be merit in being explicit about siblings. I should be happy to take that back.
    The noble Lord, Lord Northbourne, is right: the issue of contact and the role of grandparents is indeed important. It is an issue on which the adoption standards help us in some way. It is certainly a matter that needs to be fully taken into account.
    Earl Howe: I am very grateful to the Minister for what he has said. He is indeed right that my concern was that siblings should be able, as of right, rather than with the leave of the court, to make an application under this clause. I hope that we can make some progress in this area because I have heard of some quite heart-rending cases where siblings have been denied contact because of various obstructions in the system.
    7.15 p.m.
    Lord Hunt of Kings Heath: There may be certain circumstances where it is appropriate for a sibling to be denied contact. One can think of abuse cases where that decision would be made clearly in the interests of the child.
    Earl Howe: Most certainly. I recognise that fully. Nevertheless, there are equally deserving cases the other way. There is little merit in continuing this debate now. I am grateful to the Minister for his undertaking that he will give further thought to this matter. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Earl Howemoved Amendment No. 65:
    Page 16, line 37, at end insert "and at the time of making an adoption order the court shall be required to reconsider whether any such order and any other existing contact arrangements are appropriate"
    The noble Earl said: The provisions of Clause 25 focus on the placement of the child. Subsection (6) allows for an application for a contact order to be made when an application for adoption is heard. But the Bill does not appear to allow the court simply to reexamine an existing contact order when adoption is made. The issue of post adoption contact would most easily be addressed by the court in the context of the existing order for contact, which was made on placement, rather than in some separate adoption application. I hope that this amendment commends itself. I beg to move.
    Lord Hunt of Kings Heath: I hope that I can reassure the noble Earl, Lord Howe. The noble Baroness, Lady Barker, has raised before the difficulties that we all have with the interconnection between this Bill and the Children Act. Some of the answers to the questions raised by probing amendments are to be found in the continued provisions of the Children Act. I agree with the sentiment behind the noble Earl's amendment. I believe that the Bill provides what the noble Earl seeks.
    While any contact order made under Clause 25 would come to an end on the making of an adoption order because the child would no longer legally he placed for adoption, under Clause 45(6) the court, when considering making an adoption order, would have to consider whether arrangements should be made for contact and, for that purpose, review any existing or proposed arrangements to see if they are appropriate.
    As I said earlier, the starting point for any contact, whether during placement or after the final adoption, must be what is best for the child. There should be no automatic presumption that previous arrangements must continue. Our preferred approach is that the adoption agency, the prospective adopters and the parent should review existing arrangements and agree between themselves what contact arrangements are appropriate and in the interests of the child now that the child is placed for adoption.
    CWH 178
    However—I repeat what I said earlier—because informal agreement may not always he possible the Bill provides for the court to make a contact order under Section 8 of the Children Act at the final adoption hearing, either of its own motion or on the application of anyone entitled to do so, including the child's parents. This is provided for by Clause 25(5), which ensures that applications for Children Act contact orders may be made at the final adoption order hearing. I hope that in that way I can reassure the noble Earl.
    Earl Howe: That is a very helpful reply. I thank the Minister and beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Earl Howemoved Amendment No. 66:
    Page 16, line 43, at end insert—
    "() In considering any provisions for contact pursuant to this section, the court must consider the ascertainable wishes and feelings of the child (considered in the light of the child's age or understanding)."
    The noble Earl said: In moving Amendment No. 66, I shall speak also to Amendment No. 67. The thought behind Amendment No. 66 relates closely to that behind my earlier Amendment No. 59. I strongly suspect that the Minister's reply to me on that amendment makes this one entirely unnecessary. Very often when an adoption is in prospect, a child's views will be strongly in favour of contact, especially with parents or siblings. However, there may well be circumstances, especially where abuse has occurred, as the Minister indicated, where the child's views would be strongly hostile to contact. Either way, it is only right that the court should ascertain those views and take them into account. Amendment No. 66 repeats the approach adopted in Clause 1 for contact orders. I hope the Minister will tell me that the provisions in Clause 1, which he so helpfully pointed out earlier in Clause 1(7)(a), cover this point fully.
    Amendment No. 67 deals with a different aspect of the child's views. This allows a child to apply to have contact arrangements reviewed once the child has reached the age of 10. This is designed to deal with the situation where contact arrangements were made while the child was very young and most likely had no ascertainable views. The amendment would allow the child to articulate his views at a later stage and give the opportunity for the contact arrangements to be varied. I beg to move.
    Baroness Barker: Perhaps I may detain the Committee briefly to ask one question. Am I correct in making the assumption that the definition of contact here includes things like letterbox contact and that it is not just physical contact?
    Earl Howe: Yes, it does.
    Lord Hunt of Kings Heath: The noble Earl has eloquently answered his own amendments as regards Amendment No. 66. Clause 1(7)(a) explicitly provides that all the obligations in Clause I are to apply where a court is deciding whether or not to make, vary or

    CWH 179
    discharge any contact order under Clause 25. So, the welfare checklist in Clause 1 would apply to a decision to make an order under Clause 25. The court would have to take account of the child's discernible wishes and feelings concerning the proposed contact arrangements and consider them in light of the child's age and understanding.
    As regards the second amendment, which I understand is to give the child the right to apply to the court to review any contact arrangements made through orders under this section, again the sentiment is something with which I would agree. However, the Bill provides for the child to have a direct say in his or her own right. We would expect the agency, in line with its obligations under Clause 1, to discuss any proposed contact arrangements with the child and to take his views into account in making any arrangements, formal or informal. However, in Clause 25(3) the child can apply to the court to make provision concerning contact between him and anyone named in the order. So if a child were unhappy with the arrangements made for contact, he could apply to the court to make an order changing them.
    This is slightly different from what the amendment suggests, which is that the child should apply to the court for the court to conduct a review. However, it achieves the same effect in that, where a child is unhappy about how contact arrangements are going, he can take the initiative in getting them changed. In order to forestall the noble Baroness, Lady Barker,
    CWH 180
    perhaps I may say that a child with the capacity to do so could instruct a solicitor. The route is also open to the adoption agency and, if the child were very unhappy with a contact arrangement made by an order under Clause 25, it would also he open for the agency to apply or his behalf to make new arrangements rather than placing the burden on the child.
    Earl Howe: Once again, that was a very illuminating reply from the Minister for which I thank him. I believe that what he has said in relation to my Amendment No. 67 covers the point fully. However, I shall read carefully what he has said in Hansard. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    [Amendment No. 67 not moved.]
    Clause 25 agreed to.
    Clauses 26 to 28 agreed to.
    Lord Hunt of Kings Heath: We have made good progress this afternoon. This would be a convenient moment for the Committee to adjourn until Thursday at 4 p.m.
    The Deputy Chairman of Committees (Lord Dean of Harptree): The Committee stands adjourned until Thursday at 4 p.m.
    The Committee adjourned at twenty-five minutes past seven o'clock.

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  Turkish Cypriot Assets
  Type 45 Destroyer: RAND Report
  Type 45 Destroyer: RAND Report
  Royal Navy Warships: Base Porting
  Royal Navy Warships: Base Porting
  European Union: Forthcoming Council Business
  European Union: Forthcoming Council Business
  Welfare of Laying Hens
  Welfare of Laying Hens
  Research Assessment Exercise and he NHS
  Research Assessment Exercise and he NHS
  GCSE Examinations: Special Arrangements
  GCSE Examinations: Special Arrangements
  Autistic Spectrum Disorder: Data Collection in Schools
  Autistic Spectrum Disorder: Data Collection in Schools
  Temporary Use of Land
  Temporary Use of Land
  Ex-prisoners: Re-offending
  Ex-prisoners: Re-offending
  London Magistrates' Courts: Rates of Independent Prosecutors
  London Magistrates' Courts: Rates of Independent Prosecutors
  Defining the Boundaries within the Executive: Government Evidence
  Defining the Boundaries within the Executive: Government Evidence