Sitting of 3 July 2002

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  The Deputy Prime Minister and First Secretary of State was asked—
  DEPUTY PRIME MINISTER

    Local Government
    David Taylor: What assessment he has made of the impact on the membership of North-West Leicestershire parish councils of the implementation of the new codes of conduct and registers of interest. [64154]
    The Parliamentary Under-Secretary of State for the Office of the Deputy Prime Minister(Mr. Christopher Leslie): Local government at all levels, including parishes, will be strengthened by the new code of conduct and register of interests that we are introducing. By aiming for higher standards in local councils, the Government hope that public confidence in and respect for the valuable work of councillors will be increased.
    David Taylor: Although the Government's policies for parish councils appear broadly well-intentioned, their requirements on registration of interests seem over the top for smaller authorities. Where, for example, parish councillors such as my fellow parish councillors in Appleby Magna, Kegworth, Measham, Snarestone and Swannington decline to sign and resign, are we not losing a wealth of experience and commitment? Does my hon. Friend agree that the present code is more rigorous for councillors in communities of 600 with a budget of £4,000 than it is for Ministers in a country of 60 million with Government budgets of more than £400,000 million? Is that not rather perverse for those of us who are parish councillors and unaccountably not yet Ministers?
    Mr. Leslie: I am not sure that my hon. Friend has interpreted the code of conduct and the register of interests requirements accurately. I believe that it is a fundamental principle of democratic accountability that elected positions should carry a requirement to adhere to standing lists of registers of interests. That is fundamental for local communities that are concerned about where their elected representatives make decisions, and it is the
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    right and proper step to take, not least because it came out of a recommendation from the Committee on Standards in Public Life.
    Mr. Geoffrey Clifton-Brown: I welcome the Minister to his new post. Like everyone else, he is well aware that this disproportionate code will affect not only the parish councillors in North-West Leicestershire but all parish councillors, whose financial interests and those of their wives, of their children—even of their nephews' wives—will have to be declared. That is wholly disproportionate, and a monstrous slur on our fellow citizens who give of their time voluntarily to help their communities. Will the Minister, even at this stage, exempt small parish councils with a precept of under £5,000 from these excessively burdensome proposals?
    Mr. Leslie: No, because I believe that the requirements in the code of conduct and the ethical framework for councillors and those holding elected offices, which I am slightly surprised the hon. Gentleman is opposing. are perfectly fair and not at all onerous. I recommend him to read the details again. They affect only those matters relating to official duties. I seriously believe that, as a fundamental democratic principle of accountability, we need a system whereby relevant interests are declared and a register is available for communities to see. It is important that that should apply to councillors at all levels when making decisions that affect local communities.

    Area-based Studies
    Dr. Phyllis Starkey: How area-based studies are being used in the social exclusion unit's inquiries. [64155]
    The Deputy Prime Minister and First Secretary of State(Mr. John Prescott): Area-based studies are currently being used in two social exclusion unit projects to identify examples of good practice and gaps in local services; to analyse the likely impact of policies at community level; and to include front-line workers and local people in that policy process.
    Dr. Starkey: Does the Deputy Prime Minister agree that, although absolute poverty is a good indicator of social exclusion, it is also important to consider inequity within an area? May I draw his attention to the fact that Woughton ward in Milton Keynes, which is one of the 10 per cent. most deprived wards in England, has an index of multiple deprivation of 6.8 and is adjacent to a ward with an index of 66? Does he agree that such inequities deepen the sense of social exclusion? Will he assure me that his Department will take that into account in further studies on social exclusion?
    The Deputy Prime Minister and First Secretary of State:My hon. Friend makes a good point. The index of multiple deprivation identifies the problem at ward level. We are working on a new neighbourhood statistics programme at sub-ward level, which will be helpful. We constantly review the position, and the identification of poverty and deprivation is an essential concern.
    Sir Sydney Chapman: Has the Deputy Prime Minister had time to study the new research

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    paper issued by the Institute for Fiscal Studies, which claims that the decline in child poverty is much less than has been confidently expected? In the light of that, will he look into what we believe to be an exaggerated statement in the Budget Red Book last year? It said that 1.2 million children have been taken out of poverty, whereas the figure is probably less than half that.
    The Deputy Prime Minister and First Secretary of State:No, I have not had chance to read that article, but I shall do so.
    Mr. Andy Reed: In the light of what my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) said, is the Deputy Prime Minister aware that we have a similar problem in Loughborough, where two of the richest wards in the county are adjacent to two of the poorest. That causes enormous difficulty in getting Government programmes into those areas, although we welcome the impact of the sure start programme on local areas. The Deputy Prime Minister has already referred to sub-ward levels. Will he give further details on that and say how it would impact on constituencies such as mine?
    The Deputy Prime Minister and First Secretary of State:Again, I very much agree with my hon. Friend. The Government are concerned to look at the issue with some urgency, and as soon as the information becomes available to us, we will make it available. However, we have to enter into a lot of consultations about this. We are consulting on how to measure child poverty, which is a real problem in this country, and the Government's record shows that we have done a great deal to reduce it.
    Mr. Andrew Robathan: Are not the homeless some of the most socially excluded people in this country? How does the Deputy Prime Minister justify keeping his flat in Clapham—
    Mr. Speaker: Order. There is no need for the Deputy Prime Minister to answer.

    Social Exclusion
    Kevin Brennan: What progress has been made by the social exclusion unit towards reducing the number of people classed as socially excluded since June 2001. [64156]
    The Minister for Social Exclusion and Deputy Minister for Women(Mrs. Barbara Roche): The social exclusion unit delivers long-term strategies for tackling specific aspects of social exclusion. It is not possible to get comparative figures for June 2001, but good progress has been made. For example, there has been a 71 per cent. reduction in the number of people sleeping rough since June 1998, and the proportion of teenage parents in Great Britain who are in education, employment or training rose to 29 per cent. in 2001, compared with 18 per cent. in 1997.
    Kevin Brennan: I thank my hon. Friend for that reply. In relation to the social exclusion unit's work with ex-prisoners, 58 per cent. of whom reoffend after their release, is she sure that, having been tough on crime by
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    putting people in prison, we are tough enough on one of the main causes of crime, namely social exclusion, when they come out?
    Mrs. Roche: My hon. Friend is absolutely right. We need to tackle reoffending rates. Figures show that something like I million crimes a year are committed by those coming out of prison after serving sentences, which is why we need to do something with prisoners from the moment they start their sentence. This is what the new plan is all about, and we will come back with detailed proposals shortly.
    Mr. Gary Streeter: I am sure that the Minister agrees that one of the most socially excluded groups of people are young people who have been excluded from school, many of whom drift into crime, drug dependency and underachievement. Does she agree that until we have a clear and coherent strategy on what to do with excluded young people, we will never get to the heart of the problem? What is the Minister's strategy, and how is it progressing?
    Mrs. Roche: The hon. Gentleman is right to mention those who have been excluded from school, who might give in to the temptations of crime or become very vulnerable. That is why we have pupil referral units, which are very successful. There are also programmes in schools which have seen a drop in the number of pupils who are excluded permanently. However, there is clearly a lot more that we want to do, which is why the Department for Education and Skills is taking forward this strategy.
    Mr. Bob Blizzard: Regarding the social exclusion unit's study into transport obstacles faced in trying to get unemployed people back into work, will my hon. Friend look at ways of incentivising employers to lay on coaches to get people to work? That form of transport is an efficient means of getting people to work; it is also flexible and possibly the only means of getting people in rural areas to work. Will she consider that possibility?
    Mrs. Roche: We will certainly look at that very important matter. There is no doubt that in looking to regenerate communities, whether urban or rural, which have high levels of unemployment among certain groups of people, particularly the young, transport is a factor. We will discuss the issue with employers and consider my hon. Friend's comments.
    Annabelle Ewing: What involvement has the Deputy Prime Minister's Office had in discussions on tackling social exclusion in Scotland where, under a Labour Government, one in three children continues to be brought up in poverty and one in four of our pensioners lives in poverty?
    Mrs. Roche: The hon. Lady is right to talk about the problems of social exclusion. That is exactly why we have the social exclusion unit in England, and why the Welsh Assembly and the Scottish Parliament have been active in

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    this area. They have made a number of proposals and my officials in the unit are in close contact with others in the Scottish Parliament and Welsh Assembly.
    Ms Karen Buck: London has the highest rate of child poverty in England and two thirds of the most deprived council estates in England. To the Government's considerable credit, child poverty has been cut in all regions of the United Kingdom but, in London in the late 1990s, child poverty remained constant. Will my hon. Friend assure me that, in terms of tackling social exclusion, London will get its fair share of resources in the comprehensive spending review and the standard spending assessment calculations to be announced shortly?
    Mrs. Roche: As a London Member of Parliament, I understand the picture that my hon. Friend presents, but the Government have moved a long way to tackle those issues. I will certainly pass on her views to my right hon. Friend the Chancellor.

    Regional Government
    Mr. Graham Brady: If he will make a statement on his methods for assessing levels of demand in each English region for the introduction of regional Government. [64157]
    The Minister for Local Government and the Regions(Mr. Nick Raynsford): We plan to say more about this in the next few weeks, but I can say now that we will strongly encourage people in all the regions to come forward with their views about the level of interest in holding a referendum in their region during this Parliament. This will be the main factor in our decision on where referendums should be held first.
    Mr. Brady: The White Paper said that the Government would explicitly seek the views of key stakeholders on this issue. I do not know whether the Government include Members of Parliament in that category, but perhaps I can start the ball rolling, as an elected representative from the north-west of England, by telling the Minister that, in the last five years, I have never met a single member of the public—[Laughter]—a single member of the public who believes that we should have regional government in the north-west of England. Furthermore, most people in the north-west of England would regard a referendum on regional government as a ludicrous distraction from the real challenges of improving standards in public services for the people whom we are meant to represent.
    Mr. Raynsford: The hon. Gentleman's admission of his lack of contact with the public is an interesting indication of the extent to which he is in touch with public opinion. We recognise that there are variations between individual regions in their appetite for an elected regional assembly. That is exactly why we are setting up a permissive framework, under which those regions with the greatest appetite will be able to move quickest to holding referendums. That is a policy based on choice and
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    I advise the hon. Gentleman to wait and see the views of the British people in each of the regions when the choice is put to them. He might be in for a surprise.
    Mr. Gordon Prentice: Does my right hon. Friend appreciate that the last thing people want is yet another layer of salaried politicians and a hugely disruptive local government reorganisation? But if we go down this path—I do not think there is a demand out there for it—does my right hon. Friend agree that the number of Members of Parliament here in this House would have to be reduced drastically, perhaps by 40 per cent.?
    Mr. Raynsford: We believe that if a regional tier of government is introduced, there should be a rationalisation of two-tier local government so that there is not an unnecessary number of tiers. That is a logical approach and we are adopting a pragmatic way forward because we accept entirely my hon. Friend's concern that a wholesale reorganisation of local government, as undertaken by the previous Government, is unnecessarily disruptive; we do not wish to repeat the experience of the Banham years. We want efficient government working well at a regional level as well as at the local level.
    Mr. Don Foster: Will not the level of demand for regional government be weakened significantly by the inexplicable linking of the referendum question on regional government with plans to reorganise local government? Does not the Minister accept that the democratisation of the plethora of regional quangos demonstrates that we have regional governance already? We are not adding an additional tier. Whatever the merits of the reorganisation of local government, it will weaken his proposal to get regional government on to the statute book. Does he really want to win this one, or not?
    Mr. Raynsford: We certainly do not accept the hon. Gentleman's first premise. In the delightful environment of the Liberal Democrats' party the proliferation of tiers of government may seem a welcome activity, but we take a rather more sensible view. We believe that three separate tiers of government below the national and European level would be one too many. That is why we say that, where an appetite for regional government exists, there should be a rationalisation of the existing two tiers of local government. That sensible framework is set out in the White Paper, and will guide the way forward. Most people who are concerned about efficiency and effectiveness will welcome that, although I understand that the Liberal Democrats are far away from that position.
    Mrs. Anne Campbell: Does my right hon. Friend agree that it is quite difficult to secure support among local councillors while a degree of uncertainty exists about the structure of councils under regional government? That issue is likely to reduce support for regional governance, if he cannot get local councillors on his side.
    Mr. Raynsford: I have had discussions with councillors and advocates of regional government in all parts of the country, and my experience is that those who understand the importance of introducing regional government will remain wholly supportive of our

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    proposals. I fully accept that there are concerns—no councillor will welcome the prospect of their council perhaps ceasing to exist—but we must take a broader view and recognise that, in the interests of efficient administration and of the public, there is a need to avoid a proliferation of local government tiers where a regional tier of government is introduced. That is the basis of our proposals.
    Mr. John Redwood: Does the Minister accept that not a single one of the many thousands of representations from constituents that I have received in the past two years asked for more expensive government at a south-east level? Is he not merely trying to carry out the will of Brussels against that of the British people?
    Mr. Raynsford: The right hon. Gentleman was interestingly quiet when the county of Berkshire was abolished by the Administration in which he served, so I am not sure that many people would regard him as a suitable guide of public opinion. However, we recognise that variation exists between different regions in the appetite for regional government, and we accept that there is a lot less enthusiasm in the south-east than in some other regions, such as the north-east. That is exactly why we are introducing the permissive framework, which will allow the introduction of elected regional assemblies in regions that wish to have them, but not in others.

    Local Government
    Mr. Stephen McCabe: What proposals he has to give more financial autonomy to local authorities. [64158]
    The Parliamentary Under-Secretary of State for the Office of the Deputy Prime Minister(Mr. Christopher Leslie): Our comprehensive agenda for reform of the local government finance system was set out in last December's White Paper. Our finance reforms will give councils more space to innovate, and to respond in ways that are appropriate to local circumstances, by providing local authorities with significant new freedoms to borrow, invest, trade, charge and set their own spending priorities.
    Mr. McCabe: My hon. Friend is doubtless aware that one constant criticism of local authorities is the rising level of ring-fenced grants. Will he take an early look at that difficulty, which impacts on local authorities' room for manoeuvre and on local working partnerships? Will he try to introduce some early proposals to address that problem?
    Mr. Leslie: My hon. Friend raises an extremely important point, and the Government are discussing this very matter with the Local Government Association—not least in the context of the forthcoming spending review. The local government White Paper spells out clearly our aim gradually to restrict ring-fenced grants to genuinely high-priority areas.
    Mr. Mark Francois: The Minister will be aware that the review of standard spending assessments is reportedly reaching a conclusion. As the Government prepare to issue a consultation document on their findings, I ask them to ensure that authorities that are part of the
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    town and country finance issues group—they include Rochford district council, which is in my constituency—are not disadvantaged by the Government's proposals. Many of those councils suffered under the old regime, but they are hoping to do better under the new proposals.
    Mr. Leslie: The hon. Gentleman is right and consultations are due to begin shortly. On the question of the grant distribution, there are no easy solutions. Many difficult and competing pressures from local authorities must be faced, but I will take his comments as an early submission.
    Mr. Neil Turner: Can my hon. Friend confirm that when the review comes out it will be based on the principles of transparency and, more importantly, fairness, to take account of the needs of local authorities and their abilities to raise resources from all sources?
    Mr. Leslie: My hon. Friend makes an important point. I believe that the fairness and simplicity of any grant formula is crucial. Competing pressures include deprivation and the recruitment and retention of staff, and all those matters will be addressed in the options for the future consultation document.

    Regional Government
    Hugh Robertson: If he will make a statement on the position of county councils within the proposals in the regional government White Paper. [64159]
    The Deputy Prime Minister and First Secretary of State(Mr. John Prescott): Before a referendum on whether a region wants an elected assembly, the Boundary Committee will carry out an independent review. The review will consider how those parts of the region with county and district boundaries can be restructured on a unitary basis. It will be for the committee to decide whether unitary authorities will he based on existing counties.
    Hugh Robertson: Will the Deputy Prime Minister accept that some areas have strong regional ties but that in some, such as my own, local links are much more important? What estimate has been made of the cost of reorganisation and the annual running costs of the new regional assemblies?
    The Deputy Prime Minister and First Secretary of State:The estimates that have been made for the establishment of the authorities are for some £20 million to begin with, which is similar to the sum for the new London authority. We will make further estimates as the process continues. The judgments about the powers and resources of the authorities have been spelled out in the White Paper and the committee that will consider the boundaries will take them into account.
    Mr. David Clelland: Is my right hon. Friend aware that a recent BBC opinion poll showed that 54 per cent. of people of England and 65 per cent. of people in the north-east want regional government regardless of its effect on local government? Does he agree that the best way to assess public opinion is to have

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    a referendum? Whether people are in favour of or against regional government, they should join forces to call for a referendum and settle the matter once and for all.
    The Deputy Prime Minister and First Secretary of State:I agree very much with my hon. Friend and indeed, the White Paper is entitled "Your Choice". It is the people's choice. We will have a referendum and the people will make the decision.
    Mr. Eric Pickles: I welcome the Deputy Prime Minister back to the redoubt of his once mighty empire. We will try to make his stay as comfortable as possible. If the people of Kent reject regional government in a referendum, why will he impose a system of regional government on them?
    The Deputy Prime Minister and First Secretary of State:I welcome the hon. Gentleman to his role as shadow spokesman for local government, housing and the regions, although the Leader of the Opposition has not seen fit to make him shadow deputy Leader of the Opposition. Perhaps the right hon. Gentleman does not wish to suggest who should succeed him.
    A decision will be made in the referendum and, alongside that decision, we will have the report on unitary authorities from the Boundary Committee. People will have a choice about their local authority and what sort of regional authority they wish to have.
    Mr. Pickles: So if the people of Kent say no, the right hon. Gentleman will say yes. Can he demonstrate the homogenous nature of the south-east by naming three things that Aylesbury and Folkestone have in common?
    The Deputy Prime Minister and First Secretary of State:I do not understand what the hon. Gentleman means. If the referendum result is a rejection of regional government, the local government structure will stay exactly as it is. It is the people's choice, and that is what we will observe.

    Travellers
    Mr. Anthony D. Wright: If he will make a statement on travellers and unauthorised encampments. [64160]
    The Parliamentary Under-Secretary of State for the Office of the Deputy Prime Minister(Mr. Tony McNulty): I fully appreciate the concerns of my hon. Friend and his constituents regarding unauthorised encampments over the last few years. The Office of the Deputy Prime Minister is working closely with other Government agencies to develop policies and initiatives on the management of unauthorised encampments by travellers. The Department is issuing new guidance jointly with the Home Office on managing unauthorised camping in the very near future.
    Mr. Wright: I thank my hon. Friend for that answer. The guidance will certainly be warmly welcomed by my constituents and, indeed, in the many villages in my
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    constituency, but may I ask for an assurance that he will consult those parish councils that are involved before he issues the guidance?
    Mr. McNulty: I do not think that we will be able to consult parish councils before the guidance is issued because it is imminent, but I assure my hon. Friend that we very much welcome and encourage the views of parish councils, along with a range of other stakeholders, because we want to get the whole issue of travellers and unauthorised encampments right.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Mr. David Heathcoat-Amory: If he will list his official engagements for Wednesday 3 July.
    The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
    On behalf of the House, Mr. Speaker, may I wish you a very happy birthday?
    Mr. Heathcoat-Amory: How does the Prime Minister reconcile his professed belief in devolution with what the Government are doing to local parish and town councils by imposing a highly bureaucratic and intrusive code of conduct and register of interests on those voluntary councils? In my own constituency alone, that has caused the resignation of two entire councils and many individual councillors. The Prime Minister should be aware of that policy, since he sacked the Secretary of State and the junior Minister responsible for it last month; so will he use the opportunity to withdraw those measures, or is it the aim—(Interruption.]
    Mr. Speaker: Order.
    The Prime Minister: No, I understand that there were extensive consultations before those proposals were introduced, and we believe in greater openness and transparency in parish and local councils.
    Laura Moffatt: Does the Prime Minister agree—I am sure he does—that the new £70 million investment in linear accelerators, which, incidentally, are manufactured in my constituency, is a fantastic contribution to our cancer plan and will ensure that we reach our target? Will he make sure that we redouble our efforts so that we have enough trained people to get the best from that equipment?
    The Prime Minister: Of course it is true that the number of linear accelerators has increased by more than 20 per cent. By 2004, it will have increased by more than 40 per cent. That will, of course, dramatically improve cancer treatment, and it is in addition to the recruitment of extra staff, extra specialists, extra nurses and the extra

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    beds in the national health service. There is one big difference: we are in favour of that money and investment going in; the Conservative party would take it out.
    Mr. Iain Duncan Smith: May I join the Prime Minister in wishing you many happy returns today, Mr. Speaker?
    A year after the launch of the Brixton scheme to decriminalise drug possession, the Commissioner of Police of the Metropolis says:
    "I do not think that anything that exposes children to more contact with drugs should be tolerated."
    He clearly thinks that the scheme has failed. Does the Prime Minister agree with him?
    The Prime Minister: What is important is that we assess the experiment that has taken place; we need to ensure that it is right. I do not think it right to give a firm opinion until we have studied all the available evidence. Of course we will listen very carefully to what the Commissioner says.
    Mr. Duncan Smith: Community leaders in the area are all complaining about the scheme, and one of them has said:
    "The police have abandoned the streets to the dealers. If we can see it, why can't the police?"
    A year ago, the Prime Minister promised
    "to make Britain the hardest and toughest place to be a drug dealer in the western world."—[Official Report, 27 June 2001; Vol. 370, c. 631.]
    Will he stop the scheme now?
    The Prime Minister: It is surely important that we learn the lessons and, of course, discuss the scheme with local community leaders. My right hon. Friend the Home Secretary has just indicated to me that what the right hon. Gentleman said a moment or two ago is not correct. There are differences of opinion about whether or not the scheme has worked, but I can assure him that, if sensible people come to the view that it is not working, of course we shall not do it.
    It is important that we consider this on the basis of all the available evidence. We will take into account the views of community leaders, the views of the police, and the views of the experts on the ground. I would have thought that we both want to make sure that any such experiment is considered on the basis of the evidence. That is what we will do.
    Mr. Duncan Smith: The police figures are absolutely clear already. They show that drug trafficking has doubled and total drug offences have trebled in Lambeth over the last year.
    The Secretary of State for the Home Department(Mr. David Blunkett)indicated dissent.
    Mr. Duncan Smith: It is absolutely true. It is absolutely clear that the Home Secretary has indicated that he is minded to extend the pilot nation wide. If one of the Prime Minister's hon. Friends, the hon. Member for Vauxhall (Kate Hoey), has said that he should stand up for local people, should he not make absolutely clear now who will be responsible for assessing and making the
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    decision as to whether to go ahead and extend the pilot? If he has now made himself the chief of the nation's police, why does he not say, "We are going to stop it now"?
    The Prime Minister: This is a pointless line of questioning, as we must evaluate the evidence carefully. That is what the right hon. Gentleman would want to do, and what we want to do. His point that the pilot has resulted in increases in the number of offences is disputed by what my right hon. Friend the Home Secretary has just told me in relation to category A offences. What we must do is evaluate the pilot properly to see whether it works or not. Of course, if it does not work, we will not extend it, but it is important that we take into account all the relevant views that are put to us.
    If we are talking about how to deal with the issue of drugs, however, may I make one plea to the right hon. Gentleman? The Conservative party is holding up the progress of the Proceeds of Crime Bill, which is the single most important measure to confiscate the assets of drug dealers in this country. It is supported by the police and by everyone who has considered the procedure objectively. Even at this late stage, I ask the Conservative party to give its support to the Bill. If we are to deal with the drugs menace, being able to tackle the proceeds of crime—the assets of drugs dealers—is an important part of our strategy.
    Mr. Frank Roy: I know that the Prime Minister sets great store by being able to identify with the needs, aspirations and fears of ordinary families throughout the United Kingdom. Nearly 10,000 of those families in and around my constituency have contacted me saying, "Enough is enough. We are fed up with the fear and misery that is caused by the misuse of fireworks." That fear and misery is felt by young people, by the elderly and even by household pets. Will the Prime Minister agree to consider an early measure to fight the misuse of fireworks throughout the United Kingdom?
    The Prime Minister: As my hon. Friend may know, as a result of the representations that we have received we are examining this urgently with the industry, consumer groups and safety groups, to see what more can be done. We are not proposing additional legislation at present, but we are giving urgent consideration to the problem. Perhaps I can respond further to my hon. Friend when the outcome of those discussions is known.
    Mr. Charles Kennedy: Does the Prime Minister agree that the single European currency debate deserves better than being reduced to gross caricature, playing on people's fears and prejudices, of the type that we have seen in the already notorious broadcast issued today by the no campaign?
    The Prime Minister: A joke is a joke, but in so far as a serious point lay behind the broadcast, it is a shame if the anti-euro campaign wants to base itself on a view of Europe that is more than half a century out of date. I am

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    sure that, if the economic tests are passed and there is a referendum, the debate will be conducted on a better and higher level.
    Mr. Kennedy: The Prime Minister may dismiss the matter lightly, saying that a joke is a joke, but the fact is that, for many communities in this country, this broadcast has generated considerable offence. What action will he take to sanction the Labour MPs who lent their names and their presence to this deplorable piece of advertising?
    The Prime Minister: The best response to this or any other campaign of that nature is to mount an argument as to why it is right in principle in terms of industry, jobs and investment to be in favour of the single currency. That is why we have taken the position that we have, which is to be in favour of the single currency in principle and to say that, in practice, the economic tests are going to be met. In the end, the issue will not be decided by celebrities, pop stars, comedians or anyone else; it will be decided on the basis of what is right for British jobs, British industry, British investment and the British economy.
    James Purnell: Does my right hon. Friend agree that it is utterly insensitive of ITV to broadcast next week a programme on Harold Shipman—the very same week when 500 families will find out whether he murdered their relatives?
    The Prime Minister: I entirely understand the concern that my hon. Friend has expressed on behalf of his constituents. Very sensitive and difficult issues are involved, and I hope that those broadcasting material about the Shipman case will take account of them.
    I know that my hon. Friend will join me in the following sentiment. We set up an inquiry to learn the lessons of the Shipman case, but it was a wholly exceptional case. I would therefore like to take the opportunity to say that, although it is necessary that the inquiry goes ahead and that we learn the lessons of the case, the vast majority of GPs and doctors in this country do a wonderful job on behalf of their patients. I hope very much that those commenting on the Shipman case will do so after taking account of the sensitivities of his victims.
    Mr. Alan Duncan: If the Prime Minister were to visit Somerby in my constituency, he would probably be roasted on a spit. Like the characters in "The Archers", the people there are furious at the closure of their local doctor's surgery. Notwithstanding the important lessons that must be learned from the issue that has just been raised. may I draw the Prime Minister's attention to an increasing failure in the structure—not the financing—of the health service? His policy of not wanting single doctor practices is, in fact, making people in rural areas travel miles when they are ill. What initiative might he introduce to alleviate this growing problem?
    The Prime Minister: Obviously, I do not know, and cannot comment on, the individual circumstances in the hon. Gentleman's constituency. There has been a move over time away from single-handed practices so as to improve the quality of care that people receive. That has been based on a great deal of evidence over a long time.
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    Of course, the move has to be done sensitively, and as I said, I do not know enough about the circumstances of this particular case. However, let us be clear. Overall, we are increasing the number of doctors, we are increasing investment in the health service and we are increasing investment in primary care. Whenever Conservative Members want more resources for the health service in particular, we must point out that they are opposed to them in general.
    Mr. Andrew Miller: In my constituency, there has been £14 million of investment in mental health and we have a new day-case surgery unit. Nightingale wards are being removed and today we have had the wonderful announcement that Clatterbridge will be part of the linear accelerator programme. Whom should my constituents believe—Ian Bogle and his statement that this is part of the sustained investment until 2020, or those people who suffer from Conservative amnesia?
    The Prime Minister: I simply point out that the most important thing for us is to get the investment going into the health service year on year on year. In the Budget, we put additional resources into our health care system and that will allow us to sustain that investment over many, many years. That means more nurses, more doctors, more equipment for cancer and better treatment for heart patients. It will take time, but the only answer is to increase capacity through investment. We are in favour of that investment; the Conservative party is opposed to it.
    Mr. Lain Duncan Smith: Since the Prime Minister took office, what proportion of care homes for the elderly have closed?
    The Prime Minister: Since we took office, it is correct to say that the number of care homes is down by a net amount in the hundreds and that the net number of beds down is somewhere in the region of 19,000. However, it is also correct to say that there are more than 40,000 additional home care packages since we came to power; and of course we are now increasing substantially the investment in social services.
    Mr. Duncan Smith: The figure that the Prime Minister never gives is that 50,000 beds have been lost since the Government came to power. The answer is that nearly one in six of all homes have now closed. That means that 250 frail and vulnerable people are shunted from one place to another because their home is closing. Does he accept that the burden of regulation that the Government have imposed since they came to power has resulted in this terrible crisis?
    The Prime Minister: Let me deal first with the figures. The right hon. Gentleman is wrong. The net figure is the one that I gave—19,000 beds.
    On the other points, there are two essential explanations to consider. Care homes have expressed worries about regulations on wheelchair access, room size, lifts and so on. I simply point out that those do not come into force until 2007 and it is correct that the National Care Standards Commission is looking at how they will be implemented.

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    The single biggest reason for closures is, frankly, the level of fees in homes. As a result of the additional money, which again the Conservatives oppose, the majority of local authorities have agreed to fee rises this year, so I am told, of more than 3 per cent., and 35 per cent. have agreed to 10 per cent. or more. We have set aside from the Budget a 6 per cent. real-terms increase in social services spending. That is our commitment to the social services sector. I ask the right hon. Gentleman again: if he wants to help that sector, why does he oppose the extra money?
    Mr. Duncan Smith: The Prime Minister carefully does not explain to his less intelligent colleagues that the money he plans to give from the last Budget is dwarfed by the extra costs from the increased regulation. It is an absolute clear fact. All independent inquiries show that the majority of care homes are closing because of the burden of regulation, not because of the levels of money—[Interruption.] Yes, they do. The worst aspect of that is that two thirds of the homes that have closed have done so with reports that have found them to be excellent or good. So the Prime Minister is losing not the bad ones, but the good ones, which is the tragedy. Will he admit that the Government's policy for the past five years of imposing extra regulations, which has forced homes to think about closing, has resulted in this crisis?
    The Prime Minister: Again, let me repeat that the regulations that are complained of do not come into effect until 2007. That is why it is important to take some account at least of the fact that the real complaint of many care homes has been about the level of fees, especially when those homes are situated on very high-value property areas, such as in London and the south.
    The only way we will increase the provision—[Interruption.] If the right hon. Gentleman will listen for a moment, the only way we will increase provision is to put more money into the care home sector. It is a cruel deceit, based on opportunism, for him to suggest that he can stop all care home closures not by giving more money to the sector, but simply by removing the prospect of regulations that do not even come into effect until 2007. The fact is that the best way to secure that sector is to put in the extra investment. I repeat my challenge to the right hon. Gentleman: if he wants extra money to go into that social care sector, why has he opposed the Budget, the precise purpose of which is to put that money in?
    Ms Oona King: Is the Prime Minister aware that there are families in this country that have been living in temporary accommodation for 16 years? Does he share my anguish at the case of a 23-year-old woman who has shared a bedroom with her father her entire life because the family has been on the council waiting list for years and cannot possibly afford to rent or buy in London? While commending the Government for trebling the money available for social housing—we will not hear a word from the Conservatives, who left people on council estates to rot—[Interruption.] If they realise what their legacy was, I do not know how they can sleep at night. Can I ask—
    Mr. Speaker: Order. The Prime Minister will be able to answer.
    The Prime Minister: I think I got the point, Mr. Speaker.
    My hon. Friend is right: it is important that we provide for social housing. It is also important to look at how we can increase the provision of housing in London. If we manage to ensure, as we are trying to do, an increase in the housing stock, in particular to provide for key workers in London, that will alleviate some of the pressure. But we are obviously looking urgently at what more can be done.
    Mr. Geoffrey Clifton-Brown: The Prime Minister may be interested to learn that the independent mayor of Northleach in my constituency said in a recent letter to me:
    "I am writing to you on behalf of Northleach Town Council to express our profound dismay at the impact of the new Care Standards Act, which has now led directly to the closure of the Glebe Care Home in Northleach."
    Does the Prime Minister agree that the mark of a civilised society is its treatment of its elderly people? If so, will he now launch an inquiry into how that Act has led directly to the closure of 47,000 beds in our nursing home sector since his Government came to power?
    The Prime Minister: It is also a mark of a civilised society that we have proper standards of care for those people who are in a home. I point out to the hon. Gentleman and to the Conservative party that when the Bill passed through the House of Commons, my understanding is that they did not oppose its Second or Third Reading. I simply ask them to understand that the vast bulk of the regulations are intended to improve the quality of life for people in homes, and they would probably be supported by most people. As I said, many of those about which there is controversy will not be introduced for five years.
    It really is pointless to ignore the issues of funding and fee levels for homes, and if the hon. Gentleman talks to people in the care home sector, he will find that they too are deeply concerned about them. I point out to him, as I did to his leader a few moments ago, that it is utter opportunism on the part of the Conservatives to complain about this matter but to oppose the extra funding necessary to deal with it.
    Dr. Howard Stoate: My right hon. Friend will be aware that this week the British Medical Association is holding its annual conference, and he may have seen some of the comments of its leader, Dr. Ian Bogle, broadly supporting what the Government are doing to improve health services. Given that health is still a No. 1 priority for people, particularly in my constituency, what plans does he have to ensure that they see real improvements in health services on a day-to-day basis?
    The Prime Minister: There are of course real changes taking place, and it was heartening to hear people in cancer services saying today that although there is still a great deal to do, genuine improvements are being made. With the additional nurses and consultants, the hospital building programme and the additional equipment, people can see that even though there is still much to do, a lot of progress is being made. However, none of that can work

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    without increased capacity in the health service financed by investment. I say to my hon. Friend and his constituents that the best way to preserve that investment is to keep on supporting the party that advocates it, not the party that opposes it.
    Mr. David Trimble: May I refer the Prime Minister to his reply today to the letter written to him yesterday by the Leader of the Opposition, and incidentally thank him for the belated concession to common sense signalled in the other place on the Justice (Northern Ireland) Bill?
    That letter was a response to the continuing violence in Northern Ireland and to the continuing evidence of activity by paramilitary groups. The Prime Minister's reply said:
    "There needs to be clearer evidence that the transition away from paramilitarism is proceeding. A half way house will not be sustainable."
    Does it not strike him, as it strikes me, that his response is remarkably passive? Does not he realise that there is a clear obligation on him, as the Prime Minister of the United Kingdom, to address this situation?
    How does the Prime Minister think the inhabitants of Cluan Place in east Belfast, where five people have recently been shot and wounded by republicans, houses have been burned out and the majority of people have been driven away in deliberate attacks, will respond to that passivity? Is it not now time for him to ensure that his Government get control of the situation in Belfast?
    The Prime Minister: I utterly condemn paramilitary violence, whether it is from republicans or loyalists. Indeed, as the right hon. Gentleman knows, there has been violence from both quarters over the past few months, and that is unacceptable. I do not mean to be passive about the situation at all. As he knows, the reason I will engage in talks with people about how we make progress is that it is not acceptable to have a halfway house in which paramilitaries of whatever description believe that there is a tolerated level of violence; there is no level of violence that can be tolerated.
    That is why, with the right hon. Gentleman and the other partners in the peace process in Northern Ireland, we have to construct a way forward to make sure that that halfway house is not merely considered unacceptable but made unacceptable, and that we continue the transition to a peaceful and democratic Northern Ireland where we bank the gains that have been made. I urge him to accept—in truth I know that he does—that major gains have been made by the peace process in Northern Ireland. However, I totally agree with him that we cannot have a situation in which paramilitary organisations believe that there will be tolerance for continuing a certain level of violence. We must disabuse them of that belief, and if that requires action, action there will be.
    Mrs. Alice Mahon: Does the Prime Minister agree that the latest tragic killings at the wedding in Afghanistan could further alienate Muslim opinion and weaken the coalition that he worked so hard to put
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    together? Will he use his influence with the Americans to persuade them that that sort of warfare only causes more suffering to an already suffering nation?
    The Prime Minister: The facts of the incident are still being debated and are not yet fully known, but if innocent civilians have died, that is a tragedy and deeply regrettable. However, let me point out two things to my hon. Friend. First, most people in Afghanistan, whatever their concerns about the continuing campaign, feel a profound sense of liberation from the Taliban who were in power before. They have greater freedom and greater potential for prosperity than they had even a year ago.
    Secondly, I urge my hon. Friend and all hon. Members to bear in mind the reason why the campaign continues. The al-Qaeda network continues to be a threat not only in Afghanistan, but in the rest of the world. There is a real danger that as 11 September becomes a more distant memory, people will forget that there are terrorist networks out there that are absolutely determined to wreak destruction. The reason why we have to continue to pursue them in Afghanistan and elsewhere is to protect the security not only of people in Afghanistan, but of people here in this country.
    Mr. Alistair Carmichael: May I bring to the Prime Minister's attention the situation of my constituent Mrs. Biz Ivol, who is being prosecuted for the cultivation of cannabis which she uses to get some relief from the pain that she suffers as a result of having multiple sclerosis? Does the Prime Minister really believe that the war against drugs will be won by making a criminal of a 54-year-old woman who has led an otherwise blameless life and who is now confined to a wheelchair? When will the Government act to legalise the medicinal use of cannabis and bring an end to the nonsense of prosecutions such as the one facing my constituent?
    The Prime Minister: I understand the concerns that the hon. Gentleman raises and those of his constituent. As he probably knows, we are currently reviewing the issue of cannabis and people with diseases such as multiple sclerosis. We are not yet in a position to state the findings of that review, but we are giving it urgent consideration. We understand that there is potentially a distinction between those who need cannabis for medicinal purposes and those who do not. I am sure that people will take a sympathetic view of the position of the hon. Gentleman's constituent, although that must remain a matter for the authorities, not the Government.
    Mr. Russell Brown: Like my hon. Friend the Member for Dartford (Dr. Stoate), I welcome the statements made earlier this week by Ian Bogle. He recognises that there will be significant investment in the national health service in the next five years. Although there will be investment in bricks and mortar, what we really need are additional doctors and nurses, not more managers. Will the Prime Minister give an assurance on that?
    The Prime Minister: We have increased enormously the number of nurses in the health service, and the numbers of doctors and consultants are rising too. It is also important that the national health service be properly

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    managed. The most important point that Ian Bogle made is that five years ago there had been such cuts in investment, beds and nurses—such flagrant dereliction of duty by the previous Government in respect of the health service—that part of the investment we made in our first few years in government was used to make good the deficit that we had inherited. However, people can see the effects of much of the investment that is now being made in increased provision in their constituencies. That increased provision is real delivery, on the ground, for people, and if we continue it year on year on year, we will have the health service that we need in this country.
    Ann Winterton: The Prime Minister's recent difficulty at Seville was due to his being unable to gain the unanimous agreement of all 15 member states. Does he therefore accept that unanimity is necessary—and indeed essential—for any future direction changes to European Union treaties that would, for example, return more powers to nation states? Does he accept that that will become more difficult to achieve after enlargement, when there may be 28 members?
    The Prime Minister: I could not quite follow that train of thought. If the hon. Lady is saying that she wants to retain unanimity at all levels, I point out that it was precisely because we had to take the unanimity route that we were unable to make the progress that we wanted at Seville, even though we were in the majority. That is why the previous Conservative Government—the Conservative party had a slightly more sensible position on Europe in those days—supported the largest extension of qualified majority voting that this country has ever seen.
    The point that the hon. Lady made at the end of her question was absolutely right: of course, once the European Union is enlarged and an extra 10 countries come in in 2004, it will be necessary to have more qualified majority voting to make Europe work more effectively and, most importantly of all, to allow this country to get its own way. I do not know whether she has had a Damascene conversion, but I urge her to try to adopt a more sensible attitude to Europe and to have greater confidence that we can get our way, because I believe that this country's future is at the heart of Europe and that, if we follow that through, we will get the best out of Europe for Britain.

Entitlement Cards
3.31 pm
The Secretary of State for the Home Department(Mr. David Blunkett): With permission, Mr. Speaker, I wish to make a statement in launching a consultation exercise on entitlement cards and identity fraud. Copies of the consultation paper will be placed in the Vote Office.
Since the terrorist atrocities in the United States, I have been asked a number of times whether the Government would introduce identity cards. I have made it clear that any debate must not focus on issues of national security alone. Of equal importance are the issues of citizenship and entitlement to services. The focus should therefore be on whether entitlement cards would be genuinely useful to people in their daily lives and in affirming their identity. That will be the acid test of any scheme.
In a parliamentary answer on 5 February, I ruled out a compulsory card scheme—compulsory in the sense that the card would have to be carried by each individual at all times. As I made clear, any scheme that was eventually approved would not entail police officers or other officials stopping people in the street to demand their card. We are not, therefore, consulting on that option.
Instead, we would welcome views on a universal entitlement card. Everyone would register for and be issued with such a card, which would be required for the purpose of gaining access to services or employment. We also consider in the consultation paper the pros and cons of a voluntary card, in respect of which people could choose to opt into the scheme. That would be based primarily on their wish for secure and verifiable identification.
The key issue is the use to which a card might be put, so a genuine consultation exercise is aimed at hearing from the public what services people would like to be linked to a card. We wish to hear from organisations in the public and private sectors about whether they would take advantage of the card to help them with delivering and providing access to their services. We have set out for illustration examples of some areas in which a card might be helpful. In each of them, we demonstrate the cons as well as the pros, to ensure that people understand the downside as well as the gains that can he made.
I have already mentioned the use of a card to help to provide better and more appropriate access to services. It could also act as a convenient travel document and as a proof of age card, and could help to promote new ways of voting.
Crucially, an entitlement card could help us to tackle illegal working. Illegal working undermines the minimum wage and the rights and conditions of the lowest paid. An entitlement card could give businesses and employees a simple, straightforward and verifiable way of establishing the right to work legally. It could thereby assist us in tackling the sub-economy.
Although we have an open mind on how a card scheme could operate, we have set out a possible scheme for comment. Most people already possess some form of photo-id such as a passport or photocard driving licence. Many have already said that they would like fewer cards in their purse or wallet, and some have suggested that a scheme might incorporate both the driving licence and the recently announced passport card. Entitlement cards for
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those not covered by existing documents would be provided in the form of a non-driving licence card, which would be similar to those issued in many states in the United States. Existing powers to require proof of identity would reflect those used for the purposes of driving and travel.
The consultation paper asks whether existing passport and driving licence checks are sufficiently secure, given the increasing sophistication of fraud. We would welcome views on whether biometric information such as fingerprints or iris images should be recorded. That would ensure that people could not establish multiple or false identities, which allow the personal fraud with which public and private services are bedevilled.
Any scheme will have costs, which we spell out for the different options that are given in the paper. We are not talking about large bids to the Treasury that would displace investment in public services. The entitlement card scheme could be made self-financing by increasing charges for more secure passports and driving licences, discounted over the lifetime of the card, and by charging a lower card fee for those who do not have either a driving licence or a passport.
There is always a danger of bureaucracy in such areas. We spell out that possible downside and illustrate potential ways of dealing with it. However, by building on existing systems and expertise we should be able to reduce the risk and costs inherent in an undertaking of this size. [Interruption.]
Mr. Ronnie Campbell: This is a vote winner for us.
Mr. Blunkett: I am grateful for my hon. Friend's humour, especially given that 38 million people hold a driving licence and 44 million people, including young people, hold a passport. Technological advance is already projecting major change.
As I said earlier, we recognise that there are inevitably real worries about the infringement of personal freedoms and historic concerns as regards the legal requirement to carry a card. The paper sets out the way in which a scheme would comply with the Data Protection Act 1998. The amount of data required and its accessibility or relevance would be determined by Parliament; the use of a chip would he determined by individuals.
I hope that my comments will reassure all hon. Members that we painfully understand the genuine need to protect privacy. However, we are asking the following question: given that to drive a car, move freely in and out of the country, open a bank account or obtain credit, we need to identify ourselves correctly, would it be easier or harder if there was one entitlement card to assist the process?
In addition, each year, thousands of people have their identities stolen by criminals, often without their knowing about it. Bank accounts are raided, and goods and services bought in their name. Identity fraud now amounts to £1.3 billion a year. For good reason, there is genuine concern among the public about that growing criminal activity. A universal entitlement card would be a powerful weapon in the fight against identity fraud. However, it would take time for a card to make its full impact. We are therefore also using the consultation exercise to seek

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views on several other projects that could provide rapid gains. Today, we are publishing a separate paper on identity fraud, which I have placed in the Library.
I thank my right hon. Friend the Secretary of State for Work and Pensions for the work that he undertook on the matter when he was Chief Secretary.
No one should fear correct identification. There is nothing to fear from the proper acknowledgement and recognition of our identity. There is everything to fear from wrongful identification, or the acquisition of our identity for fraudulent purposes.
Freedom from intrusion into our private lives by public or private organisations is crucial. Freedom to avoid abuse and ease of access to our identity is an essential part of the consultation process. I commend it to the House.
Mr. Oliver Letwin: I am grateful to the Home Secretary for his statement and for his courtesy in letting me have an early copy.
If the Home Secretary is asking the country to debate a strictly defined benefit entitlement card, the purpose of which is to prevent fraud, the Conservative party will strongly welcome it. Indeed, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) proposed it when he was Secretary of State for Social Security. He began to implement the mechanism for such a card because he was hugely determined to cut fraud. Ironically, the current Government aborted that implementation.
However, is the item about which the Home Secretary seeks to consult a strictly defined benefit entitlement card? I confess that, having read through the paper and listened to his statement, I am still not clear.
In the first paragraph of the consultative paper, the Home Secretary states:
"A universal entitlement card scheme would…establish for official purposes a person's identity so that there is one definitive record of an identity which all Government departments can use if they wish".
What, if anything, does that opaque and gnomic sentence mean? What does the Home Secretary mean when he suggests that the card is one,
"which all Government departments can use if they wish"?
Does the Home Secretary recognise the real and widespread scepticism and anxiety engendered by such utterances when they come from a Government and a Department, which, under his stewardship and in the past few months have sought to introduce vast new powers for Departments of State and other public agencies to interrogate aspects of people's lives? Those proposals have been withdrawn only under a hail of parliamentary and public protest.
Does the Home Secretary realise that these opaque utterances are bound to be read in a certain way by a public who have come to understand that the language of liberty is usually far from his lips, and to understand also his intense suspicion of the judiciary and judicial processes? Does he realise that such opaque statements are bound to be worrying when they come from a Government who, in discussing the double jeopardy rule, and advancing the European arrest warrant, have paid scant attention to the significance that most of us in the House still attach to the presumption of innocence in English law?
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If these are unreal fears, why is the Home Office in the lead on this matter? Why is a benefit entitlement card the proper pre-occupation of a Department that is not responsible for administering the benefit system? How will an entitlement card that is genuinely an entitlement card improve the criminal justice system for which the right hon. Gentleman's Department is largely responsible? If the police will not be able to demand production of this card—as the Home Secretary's paper and statement suggest—what effect can the card possibly have on street crime, or any other crime apart from fraud?
I fear that neither the Home Secretary's statement nor his paper present to the British public a clear proposition that can foster a rational debate. In place of clarity and definition, we have obscurity and spin. This issue is too important an area of our national life, too central to the protection of society against fraud, and too fundamental to the preservation of our liberties, for us to accept such obscurity and spin. Will the Home Secretary assure the House that in the coming days and weeks he will make it clear what he is actually asking us to debate?
Mr. Blunkett: There appears to be a presumption by the Opposition that if they mention the word "spin", the whole world will believe that someone has been spinning. Although I specifically instructed all those around me not to spin, appeared on no programmes—unlike the right hon. Gentleman—and kept away from saying anything about this over the last few days, I am accused of spin. I will tell the House what I am spinning. I am spinning the right of the British people to decide over the next six months whether they want a sensible way of confirming their own identity. I am putting forward a long-term debate about what is happening in the world around us.
The right hon. Gentleman mentioned the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who consulted only on benefits. His proposals were not linked to the organisation and distribution of identity for driving or for passport purposes; they would therefore have involved the establishment of a wholly separate bureaucracy and technical system, and concentrated only on those in receipt of benefits. I did not mention benefits once this afternoon.
Mr. Eric Forth: Why not?
Mr. Blunkett: Because benefit fraud is only a tiny part of the problem in the benefit system, whereas identity fraud is a substantial drain on the economy as a whole. The right hon. Member for West Dorset (Mr. Letwin) asked why the Home Office was involved. It is because the Home Office has responsibility for identity fraud, and for organised crime, and because on the streets at this very moment people are committing credit card fraud and automatic teller machine fraud to defraud individuals and businesses of large sums of money. Such people are often linked to criminal gangs involved in people smuggling. I have responsibility for people smuggling, illegal working and ensuring that people do not get into the country clandestinely.
That is why the Home Office is in charge of this policy—[Interruption.] If Opposition Members were not so ignorant as to talk while I am speaking, they might learn a thing or two, such as why we need to consider this measure in the long term. It is because other developed countries are considering how to use biometrics to secure

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against fraud and multiple identity replication; because in France, the level of credit card fraud is one sixth the level in this country, as a result of the technology used there; and because the United States is considering new ways of accrediting identification, and, if we do not match them, it will reintroduce visas for UK citizens visiting the US. It is also because, as part of the Schengen information system, which some parties in the House support, the rest of the European Union will be introducing new biometric recognition for identification. If we are left behind, if we do not have a debate, and if, over the next two years, the House is not prepared to decide which way we will go, not only will we be left behind, but organised fraudsters across the world will know one thing: we will be the weakest link.
Mr. Chris Mullin: I welcome the Home Secretary's assurance that there will be no compulsion, and acknowledge that there are some obvious benefits. May I ask my right hon. Friend, first, whether he accepts that it is for those who are in favour of the card to make out the case for it, not the other way round? Secondly, will he confirm that the card will be little or no use in combating terrorism? Thirdly, given the unhappy history—I put this as gently as I can—of Government information technology projects, are we not entitled to be sceptical about some of the claims made for the card?
Mr. Blunkett: I can say yes to all three. Yes, I agree that those who wish to develop an alternative and simpler system to the multiplicity of cards must make the case. Yes, I agree that it is important to recognise the past failures of Government technology systems, which is why the massive update of the UK Passport Service and now of the Driver and Vehicle Licensing Agency currently taking place should take account of any potential for the future. Yes, I accept that it is important that we do not pretend that an entitlement card would be an overwhelming factor in combating international terrorism. That is precisely what I said three times on the radio within a fortnight of 11 September, and I reiterated it this afternoon.
Simon Hughes: The Liberal Democrats are happy to have a consultation. We have had consultations in our party over many years and have always come to the view that, on balance, such cards are a very bad idea. Does the Home Secretary accept that although superficially the proposal is potentially a good idea and popular, the more one considers the issues, the more complex it becomes and the more problems arise?
Does the right hon. Gentleman understand the scepticism and suspicion that many, including the Liberal Democrats, will feel arising from the fact that the Government do not have a record—to put it gently—over the past five years of increasing the liberty of the subject, as against the state? The Home Office in particular has a record of taking liberties and increasing the powers of the state. The Government have said that they are so far neutral on the issue. Will the Home Secretary do us the courtesy of telling us what his personal position is? From all that I have heard him say, it appears that he has a strong presumption in favour the proposal. It would be helpful if he shared that with the House.
Those of us who do not have a conspiracy view may none the less agree with the Chairman of the Select Committee on Home Affairs, the hon. Member for Sunderland, South
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(Mr. Mullin), that of all the Departments of Government, the Home Office has been most susceptible to cock-up over the years. What guarantees are there that information given into a system run by the Home Office will not be misused or transferred without the individual's consent?
If the card is voluntary, how will it stop illegal working?
Mr. Tony Banks: How can we stop you?
Simon Hughes: On this issue, our party will not be stopped easily. That is the answer to the hon. Member for West Ham (Mr. Banks). If the card is compulsory, like the one that the French have had, how has it been so unsuccessful at stopping illegal working in France, where huge numbers of people work illegally, even though under the system there, they must have cards and produce them? In relation to the police, surely the problem in Britain is not that the police, when they catch people, cannot identify them, but that they cannot catch them in the first place.
Lastly, will not the proposal be another way of dividing our society? Those who are less well off will have to have the cards. It will be the only way that they can use the social security system, the national health service and other public services. Those who are well off, who do not receive benefits, who do not have to use the NHS and who opt for private education will not have to have these cards. For them it will be an optional extra and available only if they want one. Is not that the real indictment? This is a system for the unfortunate many, and the elite few will be able to be comfortably exempt from it.
Mr. Blunkett: I am disappointed, because this is degenerating into a contest with intellectual pygmies. I did the hon. Gentleman and the right hon. Member for West Dorset (Mr. Letwin) the courtesy of ensuring that they had the document first thing today—not an hour or two ago. The hon. Gentleman will therefore have read it, and will know that, far from the worst-off being penalised, there is a presumption that those who travel abroad and own and run a car, which is well over 40 million people, will automatically pick up the card, because they will need it to show that they are able and have permission to drive a car or are free to travel abroad.
The reason why I am so annoyed with the hon. Gentleman is that the Liberal Democrats are totally committed to the Schengen system. They want us to join it.
Simon Hughes: We do not.
Mr. Blunkett: I am glad that we have clarified that. There is logic in not wanting to belong to the Schengen information system if the Liberal Democrats do not want to share information on the ability to travel. A difficulty will occur with travel to the United States if we do not align what we are doing with the changes that are taking place around us.
The French do not pick up their illegal workers because they have what is called tolerated illegal presence. Back in February, we spent a whole day debating that at the behest of the shadow Home Secretary. I had hoped that the spokesman for the Liberal Democrats, the hon. Member for Southwark, North and Bermondsey (Simon Hughes), had picked up on that. I made it clear that an

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entitlement card would have to be used if we are to enforce section 8 of the Asylum and Immigration Act 1996, which is about stopping illegal working but without the means to do so. That is why the CBI welcomes this consultation. It knows, even if the hon. Gentleman does not, that this will be a valuable card in our pack in dealing with an activity that exploits individuals and defrauds the nation.
Mr. George Howarth: I welcome my right hon. Friend's statement. In view of the potential benefits for the criminal justice system and for policing, I urge him not entirely to close his mind to the possibility of a compulsory scheme. May I make a suggestion put to me by a constituent? Will my right hon. Friend talk to colleagues in the Department of Health to see whether people could voluntarily include information about medical conditions, such as epilepsy or diabetes, that could be accessed by ambulance crews, which would be helpful?
Mr. Blunkett: I must disappoint my hon. Friend on the first point. It is not the Government's intention to go down the road of compulsion to carry. I agree that, should Parliament determine in the future that we move to a smart card, it would be possible for individuals to choose what went into the chip. It would not be for Government to decide, whatever has been said this afternoon, and whatever sneers have been made. Individuals could decide to have additional information on the chip to be used in certain circumstances.
I responded to my hon. Friend the Member for Sunderland, South (Mr. Mullin) by acknowledging that the history on technology has been poor. That is why we are proposing to go through the passports system and the Driver and Vehicle Licensing Agency. I do not accept that my Department, now or in the past, has deliberately passed people's information to other agencies or has undermined their freedom. If Members have information to the contrary, they should bring it forward, rather than make such allegations.
Mr. Douglas Hogg: May I address that part of the concept which implied that the production of the entitlement card will be a necessary precondition to services, benefits and perhaps work? Does the right hon. Gentleman accept that if we are to go down that road, it is essential that in the event of a genuine holder losing a card, there should be a rapid and effective way of verifying the possession of such a card in the past? If that is not the case, genuine cardholders will be deprived of their ability to obtain goods, services, benefits and perhaps work. Why should we accept that the technology, which so far the Government have been minded to apply in the case of passports, will produce such a rapid and effective solution?
Mr. Blunkett: Because the United Kingdom Passport Service now turns applications around in 24 hours. I am proud that we have made considerable progress on this front. We need to be able to replicate what happens with lost credit cards—people have their cards cancelled and a new dated reissue provided very quickly. That is what is intended—[Interruption.] However, on a lighter note,
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my hon. Friends suggest that I should give the right hon. and learned Gentleman a card. We all have a card so that we can get in and out of the House.
David Winnick: Is my right hon. Friend aware that despite what he has said, there is a real fear among many people that the card would become compulsory and antagonise many law-abiding people, as happened in the immediate post-war years? It is interesting that the term "entitlement" rather than "identity" card is used, because the latter is such a discredited term.
Is my right hon. Friend also aware that there is considerable doubt whether any card such as he has described would deal effectively with criminality, hence the reason why there are many objections? Finally, may I say to him in all friendliness that the sooner this idea is buried as quickly and decently as possible, the better?
Mr. Blunkett: I am always pleased to have friendly advice from behind me. We will see what the British people decide—that is why we are providing a six-month consultation period, which is what will matter. We are not back in 1952; we are not in the business of pretending that somehow Parliament will be taken over by those who will take away people's liberty. One reason why Governments who respond, who listen and who sometimes acknowledge that they have made mistakes should be applauded rather than ridiculed is that the British people can get rid of us.
Mr. Peter Lilley: Is the Home Secretary aware that when the Labour Government in Australia consulted on a similar measure, it was, as I am sure this will be initially, extremely popular? However, as the argument progressed and the implications became increasingly apparent, opposition grew until some 90 per cent. of the population of Australia were opposed to the idea of an identity card, and it contributed to the fall of the Australian Government—an outcome that I wish to see here. Will the right hon. Gentleman tell us how long it will be before this proposal joins those for e-mail snoopers and asylum vouchers in the graveyard for illiberal measures that the Government have introduced?
Mr. Blunkett: I loved the right hon. Gentleman's concluding words. After all, we are coming up to the 10th anniversary of his "little list". If anybody should give us lectures about liberality, it is certainly not the right hon. Gentleman.
I met the leader of the Australian Opposition yesterday and talked to him about the card. I said that there was a great deal to learn from the Australian experience, and he said that it was quite likely that the present Government, whose outlook is very close to the right hon. Gentleman's heart, might well seek to reintroduce it.
Fiona Mactaggart: I welcome the Home Secretary's assurance that people might be able to choose what information was put on the cards. Does he accept, however, that while some of us might see a role for a card that proved identity and did no more, there is deep anxiety about the privacy implications of data sharing and the fact that people would carry data around with them on the cards? Will he ensure that that issue is highlighted during consultation?
Mr. Blunkett: Yes, and in fact it is highlighted in the consultation paper. This is to do with smart card

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technology; it is nothing to do with biometrics or the avoidance of forgery. We are talking about how the chip can be used and the way in which additional data can be put on it. Scotland has an interchange with the births and deaths register, and we, too, have an interchange for specific purposes with the DVLA, which has signed a contract relating to cross-checks between those who have registered vehicles and those who have taken out licences to drive them. I think that even my most vehement critic would consider that acceptable. What is not acceptable is the transfer of data that are on a chip for specific purposes to other agencies, and we have made it clear this afternoon that we are not in that business.
Mr. Andrew MacKay: May I put it to the Home Secretary that his statement has hardly helped the case of those of us who are broadly in favour of the introduction of an identity card at some time? I suggest that the introduction of a benefit entitlement card would be the best move initially. My constituents see no reason why that should not be done, and feel that it would be feared only by those trying to defraud us.
Mr. Blunkett: But if it is good enough for benefit recipients, it is good enough for all of us. As I said earlier, in tackling benefit fraud we must recognise the existence of a range of organised fraudulent activities on an unprecedented scale that could not have been envisaged 10 years ago. Organised gangs are moving in on credit card and smart card technology with the aim of defrauding us all. That was why it was thought appropriate to discuss which services should be accessible by card and how we should protect ourselves against fraud.
I am sorry if I have not made the case terribly well. I would welcome the right hon. Gentleman's assistance during the next six months.
Mr. Tam Dalyell: Is the issue of identity cards devolved? I have an awful suspicion that many Members of the Scottish Parliament will jump up and down and say that it is a matter for them rather than for the House of Commons.
What would the Home Secretary say to the senior, and thoughtful, Scottish police officer who, when I said I was broadly in favour of identity cards, replied "Hang on a moment. Identity cards might make the job of the police not less but more difficult, because of assumptions about those holding such cards"? I repeat, is this a devolved issue?
Mr. Blunkett: I should be happy to hear from the individual to whom my hon. Friend spoke, because the Association of Chief Police Officers, the Police Superintendents Association and the Police Federation are all in favour and welcome the debate—and, in varying guises, they cover Scotland as well.
I look forward to seeing everyone jump up and down, but also to a sensible and rational debate. As I said a moment ago, the Scottish Executive have moved further than we have in England, in that the facility is devolved in terms of administration but not in terms of policy.
Sir Teddy Taylor: I would not question the Home Secretary's sincerity in any way, but will he promise to study over the next six months
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the experience of nearly every other European country in which either voluntary or compulsory identity cards have been introduced? In those countries expectations have not been realised, but enormous cost has been incurred. In particular, will the Home Secretary give us some idea of the anticipated cost? Will he also tell us how he expects to deal with the enormous problem, as it has been elsewhere, of forged and lost cards—5 million were lost when we last used them here—and with the problems posed for elderly people having to obtain cards?
Mr. Blunkett: The hon. Gentleman asks three questions. On his first, I am happy to do as he asks, including studying the Swedes' move towards the use of such a card, having experienced a more informal system. I agree that forgery is an issue, which is why the question of biometrics is so important. It is virtually impossible—nothing is entirely impossible—to forge the iris, which is why people across the world are moving towards that system. I accept that massive claims for cards have been made that have not been reaped, but I have not made such claims, including ruling out their substantial contribution to countering terrorism.
We estimate that a plastic card would cost an additional £10, and a smart card some £14 to £15, which includes the interchange at the point of swipe. We also estimate that, over a 13-year period—the discount period in terms of set-up and replacement costs—putting through some 67.5 million cards would cost £1.5 billion. The £10 to £15 charge is predicated on that 13-year discount.
Dr. Nick Palmer: My right hon. Friend is aware that I have pursued this issue for some months. There was much debate about the information that could be held on the card, and I welcome point 6.12 of the consultation paper, which suggests that it is possible to have a basic card just for identification purposes. Does he accept the view of many in the information technology industry that the way forward is indeed a basic identification card that gives access to a wide variety of databases of the individual's choice? Does he also accept that although he—like me—is attracted to the proposals, it would be sensible to have a voluntary pilot phase, so that the scheme can be shaken down before we establish full national coverage?
Mr. Blunkett: I accept all those points, including the latter one. It is perfectly feasible, as people have their driving licence or passport renewed at a pilot stage, to experiment. If we decide to go ahead, it would be sensible to proceed on that basis.
I did not answer the earlier question about my predilection. I do have a predilection for arguing that we should seriously consider the proposal, but like most Government Members I would not stake the Government's future on it.
Annabelle Ewing: The SNP-Plaid Cymru group has serious concerns about the proposal. If everyone will be required to register for a card, surely that makes having a card—as opposed merely to carrying one physically—compulsory in anyone's language. Does the Home Secretary agree that in legislating for Scotland on this clearly devolved matter, Westminster is once again acting in breach of the Scotland Act 1998?
Mr. Blunkett: I sincerely hope that we can lift the debate a little above that level. There is a requirement to

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register for the census—in fact, one can be fined for not doing so. The issuing of a card does not force anyone to use it, although in terms of drivers or passport users, or if services—whether public or private—required some proof of identity before expenditure was laid out, without proof of identity and therefore entitlement to do it I doubt whether non-use of it would last very long. I am not sure that this is an issue specifically for Scotland, England, Wales or Northern Ireland; it is an issue wherever one lives. Accent and geographical location do not change the issue one iota.
Mr. Tony Banks: I entirely support my right hon. Friend's proposal for entitlement cards and the associated consultation process, and I should like to think that we can have a full consultation process on compulsory ID cards for all our citizens. Society has become less honest and more violent, and the issue is one on which I have changed my mind. When circumstances change, it is right that we change our policies and perhaps our minds. Will he tell the House whether his mind is still open on the matter of compulsory ID cards for all our citizens?
Mr. Blunkett: I said in February, and I repeat today, that the Government are not in favour of compelling people to carry the card with them, which has historic connotations. The consultation will be about the development of the sensible use of the card. In this country, we have got used to adversarial politics on a grand scale on every issue—as we saw earlier this afternoon—and if one launches a consultation and asks people to respond, teeth are bared and the knives come out immediately. I genuinely think that we should ask the British people and see what they think.
Mr. Nick Gibb: The Home Secretary will he aware that the asylum seekers entitlement card contains 30 different records, including photographs, fingerprints, employment status and number of child dependants. He will also be aware that the information on the card can be read by officials using a quick-check reader, but the details cannot be read by the holder of the card. In his statement, he gave the example of passports, but all the information on a passport can be read by the holder, despite the fact that it can be passed through a quick-check reader at passport control.
Can the Home Secretary assure the House that if identity cards are to be introduced, individuals will have full and easy access to the information contained on their own cards? What personal information will be contained on a card of the type for which he has a predilection?
Mr. Blunkett: I indicated that the information would be that sought already for driving licences and passports. It is correct that people should know what is on the card, either because they have submitted it or it has been submitted in their name, and they should have access to it. Under the Data Protection Act 1998, the Data Protection Registrar would need to be assured that that was the case.
Mr. Mark Todd: While I welcome the consultation, I hope that it will focus substantially on some of the practical issues, which include, first, whether
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it will yield benefits to our citizens and, secondly—and my question for my right hon. Friend—whether it can be instituted within a reasonable time scale and at a sensible cost. He gave the example of the Passport Service and its markedly improved performance. That was a project with a single aim, but the new scheme would have several different purposes. One can imagine the complexities of such a project, especially when thrust into the hands of the British civil service.
Mr. Blunkett: I think that I have conceded defeat on the last point three times already, but I will concede it again. It is difficult for the Government to implement a complex scheme, which is why it would need to be based on the existing technology developments that have been put in place by the DVLA and UKPS. I accept entirely that the British people will have to feel that it will be of value to them in their day-to-day lives to have a single card that they can use for identification that will be accepted by all the agencies, including the private agencies that currently demand that we show such identification.
We should have a manageable time scale. Discounting the next two or three years—because if we decided to go ahead we would have to legislate—it would take five or possibly seven years to get a fully fledged scheme up and running. That is why I indicated earlier that we were trying to look forward and see where the world would be in 10 years' time and whether we would be alongside it or way behind.
Norman Baker: Does the Home Secretary accept that there are dangers as well as advantages from the accumulation of data on such a card? In particular, does he accept that it is right in principle that if an element of the state wishes to have access to information about an individual, that should be narrowly defined? However, access to information on the card will be wide access. He is right to say that he wishes to tackle identity fraud, which is a big problem, but if someone were to gain access to such a card, he would gain access to a range of information about an individual—even if he could not use it directly because of the biometric measures that are proposed—that at the moment would have to be pieced together.
Mr. Blunkett: The latter point applies when people have sophisticated chips on smart cards; it is nothing to do with biometrics, as I said earlier. Biometrics are about whether the card can be forged and therefore whether the identity is correct. As I said earlier, no one has anything to fear from being correctly identified, unless he or she is a fraudster who is seeking deliberately to deceive those delivering a service or the state as a whole.
I do not disagree with the points made. Of course, it would be wrong for people to gain access to information for other purposes, which is why I have stressed that I and the Government envisage in the consultation paper that the information already sought and held would be precisely that which would be needed to operate such a card.
Martin Linton: Does my right hon. Friend agree that entitlement cards will not only help in checking people's entitlement to public services and in combating fraud, but assist asylum seekers and others who have

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recently entered this country to establish their right to public services, which can often be very difficult at the moment? Does he accept that the idea of consulting on entitlement cards was unanimously suggested last year by the Home Affairs Committee, on which hon. Members from all three parties serve, including my hon. Friend the Member for Walsall, North (David Winnick), who chaired the meeting at which that was suggested; the hon. Member for Colchester (Bob Russell), who is a Liberal Democrat; and the hon. Member for Woking (Mr. Malins), who speaks on asylum for the Opposition?
Mr. Blunkett: One of the privileges of politics and democracy is that people have the right to change their mind, as I discovered a couple of weeks ago, so we are all in this boat together. I am very happy to welcome new converts to the fold if they are at least prepared to consult on the issue, and I appeal to those who have changed their minds the other way that at least thinking about it would be a good idea. I agree that it would be a very positive way to welcome and embrace people's right to gain access to services, to develop their citizenship and to be part of the mutuality that we share.
Dr. Julian Lewis: Does the Home Secretary accept that if he were coming to the House at the height of a major terrorist campaign and recommending a compulsory identity card for the security of the community, his proposal would be seriously considered on both sides of the House? However, he is now trying to sell as a convenience card something that seeks to combine the functions of several separate existing cards but may well incorporate technology that would allow an indefinite number of functions to be added in future. Does he not realise that, in doubting his proposals, we face the old problem of capability versus intentions? He has stated his honourable intentions, but surely he should realise that people are worried about the capability of what he proposes to be indefinitely extended?
Mr. Blunkett: I do not even take offence at the idea of impugning my intentions; I simply say that there is much greater security in ensuring that Parliament's will is enforced under my proposals than there is in the smart card technology that already exists and is used by private enterprise. There is a two-way street in relation to privacy and avoiding intrusion, and it does not simply depend on protection from the state.
The hon. Gentleman's first question was about why I did not introduce such a proposal in the aftermath of the events of 11 September. I reject the suggestion that we would have been able to deal with such a proposal intelligently and thoughtfully. It would have been seen, quite rightly, as a railroad and as something introduced on the back of a terrible tragedy, and it would have been irrational. That is why I rejected such a notion on the "Today" programme three times within a fortnight of 11 September. We must consider the issue coldly in the light of day—either it is worth having in 10, 15 or 20 years' time, or it is not worth having at all.
Shona McIsaac: Is my right hon. Friend aware that a television poll revealed this lunchtime that 84 per cent. of people have no problem whatever with the concept of identity cards? Does he think that that is because we all have an array of cards that identify us in
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our purses and pockets? We have cash cards, credit cards and store cards that track our shopping habits and allow us to have coupons that tie in with those shopping habits. All hon. Members have passes to come in and out of the House and record our movements around the House. Frankly, I do not understand why people fear entitlement cards.
Mr. Blunkett: My hon. Friend will be pleased to hear that I agree. I have four cards in my possession—
Shona McIsaac: I have 17.
Mr. Blunkett: My hon. Friend has an extremely heavy purse or handbag, and I shall avoid being handbagged by it.
Mr. John Wilkinson: Having just completed a report for the Parliamentary Assembly of the Council of Europe on clandestine migration, may I warmly applaud the objective of the Home Secretary but regret his pusillanimity in not seeing his consultative proposals through to their logical conclusion? Would not any law-abiding person be perfectly happy to carry an identity card or an entitlement card if doing so will improve the likelihood that only those people who are entitled to work do so and only those who are entitled to be in Britain are in Britain, and if doing so will diminish the likelihood of individuals carrying out terrorist offences or impersonations? If, in the consultation, the public express the desire for the compulsory carriage of such cards, cannot the Home Secretary accede to their wish?
Mr. Blunkett: I welcome very much the spirit of the hon. Gentleman's remarks and, having examined the issues, I respect greatly his understanding of them. I shall resist the temptation to be overwhelmed by the feeling of the British people wanting to have to carry them. That is not least because the reason for the decision on the card in 1952, other than the tragic refusal of the Labour Government to get rid of rationing in time and the link that was made in people's minds, was a cause celebre court case in relation to someone who had left their card at home. If we go ahead, I have every intention of carrying my card. I do not want to be accused of breaking the law, however, if I have left it in the wrong jacket.
David Cairns: Given that the issuing of passports, driving licences, national insurance numbers, Home Office reference numbers and entitlement to benefit are all administered on a UK-wide basis, does my right hon. Friend accept that it would be utterly illogical and perverse to deal with this matter on anything other than a UK-wide basis? May I clarify a technical point? Is my right hon. Friend saying that he does not envisage any new technology being involved, but that existing tried-and-tested technology will be used? If so, that will go some way to allay the fears of those of us who, although we have no civil libertarian objections, are very concerned about the ability to advance from a standing start to 44 million or 60 million cards in a very short period.
Mr. Blunkett: We accept fully in the document that we could not proceed from a standing start, and that identity cards would have to be introduced on the back of

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the issuing of the photocard driving licence and photocard passport, which are both now being introduced. Additional technology would be necessary to expand the potential for the development of the card. We estimate the cost of that to be £107 million. Again, that is part of the document. I accept entirely the first part of my hon. Friend's question. I suggest to him, however—I am sure that he will articulate this north of the border—that were we able to introduce a card that dealt substantially with organised fraud, and were Scotland not to have such a card, Scotland would become an absolute haven for fraudsters. Not even the Scottish National party would want that.
Mr. Harry Barnes: My right hon. Friend said in his statement that it would be possible to use the identity card in connection with new voting methods. Is he aware that it could he used in connection with the established, traditional and very good voting methods that already exist in this country? It would aid considerably electoral registration as, despite rolling electoral registration, probably 1 million or more people are still missing from electoral registers who could be placed on them using identity card techniques. It could also be used as a voter identity card. A move in that direction has been made in Northern Ireland, but a United Kingdom identity card provision for voting would probably be a great advance in stopping fraud, not just in Northern Ireland but on a wider basis.
Mr. Blunkett: I congratulate my hon. Friend on his long campaign on this important issue. I represent a constituency that has more than 10 per cent. under-registration, so I also feel strongly about this issue. He is entirely right to want to avoid fraudulent voting, and registering to vote has the real potential to increase the right to vote.

Points of Order
4.31 pm
Mrs. Angela Browning: On a point of order, Mr. Speaker. At Home Office questions on 10 June I raised the case of a paedophile who, having served a prison sentence, changed his name by deed poll and reoffended. The Minister for Policing, Crime Reduction and Community Safety advised me that, if I sent him the information, he would deal with the case as a matter of urgency. Such were his words that the next day our local paper, the Express & Echo, reported it as a pledge on his part.
However, in trying to follow up the case, I now find that the Minister has passed the paperwork to his Under-Secretary and, despite several telephone calls from my office, the Under-Secretary's office has been unable to identify where the paperwork is or tell me what is happening. Next week, the Police Reform Bill will give us a window of opportunity to deal with a matter that the Minister promised would be dealt with urgently. We might be able to close the loophole by tabling an amendment to that Bill.
On the day that I raised the matter, I hand delivered the necessary information to the Home Office, because I took the Minister at his word. The way in which the case has been handled is not just a contempt of the House but will come as a great disappointment to the victims. Therefore, can you assist me, Mr. Speaker? When such matters are raised on the Floor of the House, hon. Members should have every expectation that a Minister's word is his bond.
Mr. Speaker: I regret that this has happened to the hon. Lady in seeking to represent her constituents. I hope that the appropriate Ministers will see the record of today's proceedings and look into the matter urgently.
Mr. Tam Dalyell: On a point of order, Mr. Speaker, about which I gave your office brief notice. Following his good fortune in the private Member's ballot, the hon. Member for Uxbridge (Mr. Randall) used his time extremely well, in the view of many of us, to introduce the Marine Wildlife Conservation Bill on Friday 26 October. He received strong support from both sides of the House and from all who were present. He cannot, for understandable personal reasons, be here at the moment, but he knows that I am raising the issue.
After a number of successful pleas, the Bill went into Committee on Wednesday 21 November and members of the Department for Environment, Food and Rural Affairs—Ministers, in particular the Minister for the Environment, my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher), and civil servants—worked extremely hard and put in a great deal of effort. The Bill then received its Third Reading in the House of Commons, and has now gone to the other place.
For a number of complicated reasons, it seems that certain Members of the other place want to bury the issue. Is it acceptable that a Bill that was introduced by an Opposition Member with strong departmental support from the Government and with the strong support of Labour Members, all of whom are interested in the issue, should suddenly evaporate for what might be termed a bit of skulduggery in the other place? It is unacceptable that a private Member's Bill introduced in the House of

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Commons should be allowed to fail in the other place, which has not considered it in anything like the depth that this House has.
Mr. Speaker: I understand the hon. Gentleman's concern, and, although I do my best to control this place, I have no control over the other place. I am afraid that I cannot help him.

BILL PRESENTED
  SHOPS
  Mr. Jimmy Hood presented a Bill to make provision about the number of people allowed on shop premises; and for related purposes: And the same was read the First time; and ordered to be read a Second time on 19 July 2002, and to be printed [Bill 160].

Food Safety (Amendment)
4.34 pm
Mr. David Drew: I beg to move,
That leave be given to bring in a Bill to make provision in respect of inedible items embedded within foodstuffs.
The Bill is not a radical measure. It is based on common sense and would reduce the risks faced by young children from a most unlikely source—chocolate.
Chocolate eggs containing toys are popular sweets with many young children. Although some hon. Members may not be familiar with those products, I am sure that many are. Inside the egg is a plastic capsule containing a toy, usually in small component parts. The combination of chocolate and toys can be a dangerous one for small children, and some accidents have resulted in fatalities. The manufacturing process involves heat, which means that the capsule often smells of chocolate. In addition, the way in which a child typically breaks open one of the eggs pushes the chocolate into contact with the toy container. A small child will be inclined to put the toy into his or her mouth and will not automatically distinguish the edible chocolate from the inedible toy.
When my hon. Friend the Member for Pontypridd (Dr. Howells) was Minister with responsibility for consumer affairs, he was invited to break open one of the eggs, and he could clearly smell and see the chocolate on the capsule. As my right hon. Friend the Member for Sheffield, Central (Mr. Caborn) conceded during an Adjournment debate on the subject when he was a Minister at the Department of Trade and Industry, toddlers are inclined to put all sorts of things in their mouths, and what could be more tempting than a small toy part from a container smelling of chocolate?
Many doctors and consumer bodies have confirmed that the capsule can smell of chocolate, which encourages children to put the capsule or toy into their mouth. A senior ear, nose and throat consultant who has specialised in items swallowed by children told me:
"these incidents are rarely likely to result in hospital treatment. Most often, children place small toy components in their mouths and parents fish them out in time, but there is a very fine line between that and swallowing the part."
At least three deaths have involved choking on the capsule or on a toy part from a chocolate egg. That is an appalling fact, and it relates only to accidents in this country. There is a great deal of evidence of many such incidents in Europe. Philip Whitehead MEP has received huge support for changes in the European directive which are based on medical experience across Europe, from Greece and Germany in particular. In addition, I have been in contact with the National Federation of Retail Newsagents, which is concerned about its members' liability at law. It also realises that they need assistance in ensuring that consumers are aware of the dangers of such products.
For every fatality there have no doubt been hundreds of choking incidents from the products, and I have been notified of several other cases of near misses. Let me give two examples. A constituent who wrote to me said:
"My eldest son came rushing in and shouted that his younger brother couldn't breathe. I found him turning blue with his eyes bulging. I opened his mouth and saw half of a Kinder Egg capsule blocking his air passage. I performed the Heimlich manoeuvre. I dread to think what might have happened if my son had been by himself, he may not have been with us now."

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Another letter was forwarded to me by a doctor. It said:
"Last week we bought our daughter a Kinder Egg. Like most parents, we let her unwrap and break open the egg. My attention was distracted only for a moment when I found that she had put a small part from the toy into her mouth and was about to swallow it. I extracted it just in time. A few seconds more and our child would have choked. With hindsight it is obvious that if the toy and container smell of chocolate a child might try to put it in their mouth."
If we asked any parent whether toys embedded in chocolate were different from other toys, they would think it obvious that children would be likely to place such toys in their mouths. The risk has been recognised in the United States for many years, so much so that since the 1930s, it has been illegal to place or embed non-food items inside foodstuffs.
Regulators take a different approach in the United Kingdom and Europe. They simply require that the products carry a warning that they might be swallowed and are unsuitable for children under 36 months. However, the three UK fatalities and the subjects of the incidents I just mentioned were all older than that. As one of the parents stated:
"none of our friends, who also have small children, were aware of the warning. You have to look hard to find it, let alone be able to read it on crumpled foil. Obviously young children cannot possibly comprehend such warnings."

The eggs have to carry safety labelling, but the labels often ignore several of the most important guidelines on warning labels published by the Department of Trade and Industry. I recently received a report from a leading body that assesses the clarity of such warnings. It examined these products and concluded:
"Many of the warnings were illegible to the naked eye due to the size of text and the creases or folds in the foil wrapper."
The testers found:
"The capsule and the toy smell strongly of chocolate, inviting a small child to put them in its mouth",
which endorses the point that I have just made.
The DTI has done nothing to secure compliance with its guidelines. It says that it is a matter for trading standards officers, and I hope that they will now look at breaches
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of the labelling guidelines and remove products from the shelves if they do not comply. I hope that they will be fortified by the report's unambiguous finding that the labelling on the leading brands is inadequate.
Many hon. Members have young children, and I hope that they share my concern that unnecessary risk to them should be avoided. I have met some of the parents whose children choked to death and I do not want others to suffer as they have. More than 40 MPs have already written to me calling for action. A number of Members joined me at a meeting in the House of Commons with Ferrero, the makers of Kinder Eggs. Ferrero refused to accept that there was a problem or to consider modifying its product. That is grossly irresponsible.
This Bill therefore proposes two simple changes based on the responsible lead taken by Nestlé and Mars, which have withdrawn products of this kind, and Cadbury, which adapted its Yowie product for the UK market after listening to concerns about safety. The Bill would impose a requirement that toys contained within foodstuffs be in one piece rather than in small parts, and it specifies a minimum size for the capsule to reduce the risk of ingestion. Just doing that would, in the view of doctors, significantly reduce the chances of small children choking on these items.
The changes have the backing of the Consumers Association and the Royal Society for the Prevention of Accidents. I hope that the House will add its support. If not, when the next child dies from this cause, we will know that we had the power to prevent it.
Question put and agreed to.
Bill ordered to be brought in by Mr. David Drew, Mr. David Amess, Mr. Hilton Dawson, Mrs. Janet Dean, Ms Julia Drown, Andrew George, Mr. Gordon Marsden, Dr. Doug Naysmith, Diana Organ, Ms Gisela Stuart, Ms Joan Walley and Mrs. Ann Winterton.

Food Safety (Amendment)
  FOOD SAFETY (AMENDMENT)
  Mr. David Drew accordingly presented a Bill to make provision in respect of inedible items embedded within foodstuffs: 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 161].
Orders of the Day
  Finance Bill
    1ST ALLOTTED DAY
    Not amended in the Committee and as amended in the Standing Committee, considered.
    New Clause 20

      STAMP DUTY AND STAMP DUTY RESERVE TAX: POWER TO EXTEND EXCEPTIONS RELATING TO RECOGNISED EXCHANGES
      '(1) The Treasury may by regulations extend the application of the provisions mentioned in subsection (2) to any market (specified by name or by description) that is not a recognised exchange but is prescribed by order under section 118(3) of the Financial Services and Markets Act 2000 (c.8).
      (2) The provisions referred to in subsection (1) are—

      sections 80A and 80C of the Finance Act 1986 (c. 41) (stamp duty: exceptions for sales to intermediaries and for repurchases and stock lending); and

      sections 88A and 89AA of that Act (stamp duty reserve tax: exceptions for intermediaries and for repurchases and stock lending).

      (3) In subsection (1) "recognised exchange" means an EEA exchange, a recognised foreign exchange or a recognised foreign options exchange within the meaning of the provisions mentioned in subsection (2).
      (4) Regulations under this section may provide for the application of the provisions mentioned in subsection (2) subject to any adaptations appearing to the Treasury to be necessary or expedient.
      (5) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.'.—[Ruth Kelly.]
      Brought up, and read the First time.
      4.43 pm
      The Financial Secretary to the Treasury(Ruth Kelly): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker(Sir Alan Haselhurst): With this it will be convenient to discuss the following: Government amendments Nos. 19 to 24.
      Government new schedule 1—Stamp duty: contracts chargeable as conveyances: supplementary provisions.
      Ruth Kelly: New clause 20, amendments Nos. 19 to 24 and new schedule I all extend existing stamp duty exemptions and reliefs. New clause 20 extends the exemption from stamp duty and stamp duty reserve tax for recognised intermediaries and for stock lending while the amendments and the new schedule ensure that subsale relief applies to contracts brought into charge under clause 114.
      At present, the stamp duty and stamp duty reserve tax exemptions for intermediaries and for repurchases and stock lending are available only to European Economic Area exchanges that run regulated markets listed under the investment services directive. That requirement excludes exchanges such as OFEX, which specialises in smaller companies but is not listed under the investment services directive. None the less, OFEX is regulated as a service company by the Financial Services Authority
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      under the Financial Services and Markets Act 2000, and it is a prescribed market under the provisions to discourage market abuse contained in that Act.
      The purpose of the stamp duty and stamp duty reserve tax exemptions is to encourage liquidity in well-regulated markets. We have therefore decided to extend the scope of the exemption to exchanges that are prescribed by the Treasury under the provisions to discourage market abuse in the Act. The extension of the exemptions in new clause 20 will help smaller companies that are seeking to raise capital, and investors in such companies. I am sure that the measure will be welcomed by Conservative Members, and I commend the new clause to the House.
      4.45 pm
      New schedule 1 and amendments Nos. 19 to 24 relate to clause 114 and respond to representations made to us about subsale relief. They meet the commitment I made during the Standing Committee debate to table measures to ensure that subsale relief continues to apply to contracts brought into charge under clause 114. The new schedule provides that subsales will continue to receive the benefit of relief where stamp duty has been paid on a contract under the clause and there is either a subsequent subsale or a subsequent conveyance. In those circumstances, stamp duty will be payable only if the subsequent subsale or conveyance is for a higher amount. The end result will be to ensure that the total amount of stamp duty paid for a deal that involves one or more subsales is equivalent to the duty that is payable under the current rules for subsale relief.
      As I said in Committee, we did not intend that clause 114 should take away the benefits associated with subsale relief, and the new schedule and consequential amendments that we have tabled put that beyond doubt. There is no similar requirement to amend the clause to ensure that subsale relief continues to apply where no payment has been made on a contract under clause 114. We are content that subsection (2) already provides relief in the situation in which a property is conveyed directly to a sub-purchaser, as we regard that as a conveyance or transfer that is made in conformity with the original contract.
      I should mention that the Inland Revenue will shortly publish guidance setting out how both clause 114 and the new schedule will be administered in practice. In many instances, it will be possible to make an application to the Stamp Office to extend the statutory 90-day period. That will apply both to an initial contract and to any subsequent subsales. In that way, stamp duty can be paid in due course on the conveyance in line with the commercial reality of the transaction.
      The new schedule addresses the representations that called for subsale relief to continue to be available to contracts brought into charge by clause 114. I therefore commend it and the consequential amendments, Nos. 19 to 24, to the House.
      Mr. Howard Flight: We are pleased to welcome the Government's new clause, new schedule and amendments. Both of the territories with which they deal were raised by the Opposition in Committee, as the Minister will recollect. It was unreasonable that market makers on OFEX, which is of growing value to the British economy, did not have the

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      same stamp duty exemption as other exchanges. We are pleased to see that the Government have introduced a belt and braces to ensure that subsale relief will continue, and that it will still apply to the sale of interests in land, which was the specific issue that we raised. We are pleased to see both provisions clearly dealt with in the Bill.
      Mr. Edward Davey: I welcome the new clause and the related new schedule and amendments. I had discussions with OFEX prior to the Standing Committee—OFEX clearly did its job well by speaking to all the parties and the Government. It had a very strong case that there should be equal treatment of exchanges in terms of the granting of stamp duty exemptions. I am delighted that the Government have listened and acted so promptly.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 21

      FILMS: RESTRICTION OF RELIEF TO FILMS GENUINELY INTENDED FOR THEATRICAL RELEASE
      '(1) Relief under the following provisions is available only for a film that is genuinely intended for theatrical release—

      (a) section 40D of the Finance (No. 2) Act 1992 (c. 48) (election to claim capital allowances for production or acquisition expenditure);

      (b) section 41 of that Act (relief for pre-production expenditure);

      (c) section 42 of that Act (three year write-off for production or acquisition expenditure);

      (d) section 48 of the Finance (No. 2) Act 1997 (c. 58) (relief for expenditure on production or acquisition of film with total production expenditure of £15 million or less).

      (2) For the purposes of subsection (1)—

      (a) the relevant intention is the intention at the time the film is completed of the person then entitled to determine how the film is to be exploited;

      (b) "theatrical release" means exhibition to the paying public at the commercial cinema; and

      (c) a film is not regarded as genuinely intended for theatrical release unless it is intended that a significant proportion of the earnings from the film should be obtained by such exhibition.

      (3) Subject to the following provisions, this section applies to any film—

      (a) completed on or after 17th April 2002, or

      (b) completed before 1st January 2002 but not certified by the Secretary of State before 17th April 2002,

      unless an application for certification was received by the Secretary of State before 17th April 2002.

      Refrences in this subsection to certification are to certification of the master version of the film under Schedule 1 to the Films Act 1985 (c. 21) as a qualifying film, tape or disc.

      (4) This section does not apply to a film completed on or after 17th April 2002 if—

      (a) it is a drama with an average production expenditure per hour of running time of the completed film greater than £500,000, and

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      (b) it was commissioned on or before 17th April 2002 and the first day of principal photography was on or before 30th June 2002.

      (5) For the purposes of subsection (4) "drama" does not include—

      (a) anything in the nature of—

      (i) an advertisement or promotional film,

      (ii) a discussion programme, news or current affairs programme, quiz show, panel show, variety show or similar entertainment, or

      (iii) a training film, or

      (b) a film of a live event or of a theatrical or artistic performance given otherwise than for the purpose of being filmed;

      but it includes a documentary involving the dramatic reconstruction of events if the dramatic content forms 50% or more of the running time.
      (6) For the purposes of this section—

      (a) a film is completed at the time when it is first in a form in which it can reasonably be regarded as ready for copies of it to be made and distributed for presentation to the general public;

      (b) the production expenditure on a film means the total of all expenditure on the production of the film, whenever incurred and whether or not incurred by the person claiming relief; and

      (c) subsections (6A) and (7) of section 48 of the Finance (No. 2) Act 1997 (c. 58) (production expenditure: exclusion of deferments and treatment of transactions not at arm's length) apply as they apply for the purposes of that section.'.—[Dawn Primarolo.]

      Brought up, and read the First time.
      The Paymaster General(Dawn Primarolo): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government new clause 22—Films: restriction of relief for successive acquisitions of the same film.
      Government amendment No. 13.
      Dawn Primarolo: The amendments respond to a detailed Standing Committee debate on clause 99 and representations made by the British film industry. I promised in Committee that I would reconsider two issues: relief for high-value television drama, and the possibility of introducing transitional relief where filming has already commenced. I explained to the Committee the difficulties of finding a secure means of providing for those two principles while returning the film relief to its original intention.
      The new clauses and the amendment make changes to the proposals for film relief. On high-value television drama, as I said in Committee, it was not clear to us from the evidence presented by the industry that television production companies were subject to the same structural problems and risks as those faced by British film makers. We have subsequently received further evidence from the industry, which indicates that, although television production companies often incur some risk of budget shortfall, such risks are generally not comparable to those taken by British film makers.
      Making films for the cinema remains a very high-risk venture. The typical British film is still made by a small, one-off production company. The producer has to stitch

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      together a complex web of funding and the company is at considerable risk of not getting the film screened and recovering its costs. Some 60 per cent. of British feature films completed in 2000 have yet to achieve theatrical release.
      In contrast, high-value TV drama—drama costing more than £1 million an hour to make—is usually made by major broadcasters and production companies or combinations thereof. We accept that those companies often fund individual productions with some degree of deficit. In other words, they take some risk in making sufficient overseas sales to cover their budget and make profits. However, they are guaranteed television broadcasting and can usually spread the risk over a wider slate of other productions and commercial interests. Classically, such producers have more than one film in production and make their profit from a range of products.
      In considering the further evidence, therefore, the Government do not accept that the industry has made a case for suggesting that television drama of any value should benefit from the special incentives intended to counter the very particular problems of making films for the cinema, so we do not intend to make any changes to the Bill in respect of high-value drama.
      Adam Price: Does the Paymaster General accept that that decision could not have come at a worse time for the independent television sector? Commercial revenue is down by 25 per cent. in the wake of problems in the media and advertising, so is this not the worse possible time to edge television production out of support under section 48 of the Finance (No. 2) Act 1997?
      Dawn Primarolo: Television drama was never intended to be covered by the relief, which was specifically provided for the British film industry, in which there is very high risk. It was intended neither for television drama nor game shows, soaps or any of the other productions in respect of which claims were made. The cost to the Exchequer of the use that was made of the relief, even though everybody in the industry knew that such use was not intended, rose hugely last year and this year. In 2001, the cost was £180 million, and it is estimated to rise to £290 million in this financial year. The cost rose very steeply, very quickly for two reasons. First, there was a time-lag between production completion and claiming the relief and, secondly, there was a piling in of those who wanted to make use of it. Although I accept the hon. Gentleman's point about the difficulties faced by some in the industry, the Government had to make a judgment on whether they should allow a relief that was not intended for TV drama to be used for that purpose and on whether that was a good use of taxpayers' money. For the reasons that I gave on Second Reading and in Committee, we do not accept that that massively growing cost represents a sensible use of taxpayers' money. However, we accept the need to secure the film relief for its intended beneficiaries—British films—and we are trying to achieve that.
      I turn to the transitional relief. We were not prepared to cross the boundary to say that the relief is now for films and for high-value drama. If that issue needs to be addressed, there is another place to do that—it is not the purpose of the relief. The Government announced the returning of the relief to its original intended use with
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      effect from 17 April, Budget day. Some companies were in production and therefore faced quite serious financial hardship whereby they had committed to sell the product for a price that assumed a tax relief that was no longer there. Whether they should have done that is another matter. The question then arose, and was discussed in Committee, as to whether the Government had an obligation to say that they had noted the situation and that transitional protection would be given. As I explained in Committee, the problem is that the normal way of trying to determine whether transitional relief is applied is the existence of a contract. No contracts were in place. The whole point of the misuse of the relief—if I may put it that way—was that the contract was always drawn up at the end of the process. The producers took the risk in between times because they wanted to maximise the amount of relief that was ultimately available.
      The Government accept that there is an obligation to try to deal with the issue of transitional relief. In Committee, I promised to look again at the practical difficulties of devising a relief that could be targeted to those instances for which we have sympathy. I am pleased to report to the House that, following further constructive discussions with the industry, we have found a way of protecting the position of the vast majority of the projects concerned. New clause 21—which, by virtue of amendment No. 13, will replace clause 99—will protect the position of drama series costing more than £500,000 an hour to make, provided that shooting on the production began by 30 June 2002.
      Mr. Mark Field: The Paymaster General says that the vast majority of projects will be saved by new clause 21. Can she quantify the precise proportion of projects that will be thus saved, given the representations that she has received and the statistical analysis on which she is no doubt relying in making that statement?
      Dawn Primarolo: Yes, approximately 50 production companies would have experienced severe difficulties. We settled on £500,000 as the break point because I was keen to ensure that the game shows, soaps and other productions that were clearly not even drama did not fall within the scope of the transitional relief. Perhaps hon. Members believe that I have been rather stubborn, but including a transitional relief to protect soaps, however enjoyable they may be, was not the intention.
      5 pm
      I understand that we are considering approximately 80 per cent. of the productions of the 50 companies. The problem when we devised the relief was that the costs became astronomical if the transitional relief was extended further down, in a way in which the House did not want. That was also clear in Committee.
      The monetary limit excludes continuous productions that are below budget, for example, soaps. We have used the principal photography device to try to identify the contractual start of the drama. It would risk abuse to base the relief entirely on contractual arrangements. It would also be too complicated to operate.
      The proposed transitional relief is sensible and a fair solution to a complex matter. It will be simple to administer and will provide certainty. It will not allow

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      further abuse; that is important. It will cost £50 million in 2003–04. Hon. Members must understand the scale of misuse that was beginning to build up. I stress that the relief is transitional and that the commitment will therefore not be continuing.
      New clause 21 clarifies whose intention is relevant for determining whether a film is intended for theatrical release. Clause 99 provided that the relevant intention was that of the film maker, as defined in the Films Act 1985 and copyright law. On reflection, that provision would restrict relief beyond our intention. We were therefore happy to adopt the industry's suggestion and change it.
      I mentioned new clause 22, which is an anti-avoidance provision, in Committee. Film makers generally have access to relief under section 48 of the Finance (No. 2) Act 1997 via sale and lease-back arrangements with film partnerships. The partnership claims relief on an amount that is equivalent to the total production expenditure on the film and passes part of it on to the film maker. There is nothing wrong with that and the new clause will not affect it.
      Let me simplify complex arrangements for hon. Members. The abuse that the new clause tries to prevent consists of the film partnership subsequently selling the film to another partnership for no commercial purpose, solely so that the second partnership can claim relief on the total production expenditure. The chain is far more complicated than that, and means that the first partnership is able to avoid tax liability on disposal. Through a long chain, the ownership of the film is passed on to prevent the application of the final tax liability on disposal. In theory, the chain could go on for ever.
      We spotted that possibility early, and realised that such schemes were beginning to be marketed. We have taken the opportunity of today's debate to introduce an anti-avoidance mechanism.
      The Government remain committed to supporting the British film industry, recognising the real challenges that British producers face, and the high risks that they take in producing British films. We are also, however, sending a clear, firm message to the industry—it is regrettable that it has to be done through legislation—which is that, when we intend a relief to be used for films, we shall make sure that that is precisely how it is used in the industry.
      I hope that the House is satisfied with my explanation of why we are unable to make any concessions or arrangements in relation to high-value television dramas. I also hope that hon. Members will accept that we have made a fair and proportionate response on the question of transitional relief, and that they will agree with the Government that this relief should be returned to the use for which it was originally intended.
      Mr. John Bercow: I would like briefly to comment on what the Paymaster General has helpfully told us this afternoon. Just before I do, however, and with your indulgence, Mr. Deputy Speaker, I would like to congratulate you—four days in advance of the event—not only on my own behalf but, I hope, on behalf of the House, on the forthcoming 25th anniversary of your election as the Member of Parliament for Saffron Walden, following your four years' service in another constituency. You have given great service to the House
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      and to your constituents, and I am cheekily taking this opportunity to congratulate you before anybody else does so. Moving on—
      Mr. Deputy Speaker: Order. I am extremely grateful to the hon. Gentleman for that completely unexpected intervention. I therefore feel that I can be cheeky enough to congratulate him on his engagement.
      Hon. Members: Hear, hear!
      Mr. Bercow: Well, this is as good as it gets. All good things come to an end, and I fear that I must enjoy this while it lasts.
      Dawn Primarolo: If I am allowed to be cheeky just for a moment, Mr. Deputy Speaker, may I say that you must have entered the House at a very young age? May I say, too, how much we value your attention? I also congratulate the hon. Member for Buckingham (Mr. Bercow) on the recent announcement of his engagement. What a lucky man he is! I congratulate him on behalf of all my colleagues, and we look forward to the wedding celebrations—
      Mr. Deputy Speaker: Order. I thank the right hon. Lady, but I think that we had better get back to business.
      Mr. Bercow: We had certainly better do that, Mr. Deputy Speaker. I thank you for your kindness, and I warmly thank the Paymaster General for what she has just said.
      Mr. Deputy Speaker, I am about to astonish you, the Paymaster General and all right hon. and hon. Members present in the Chamber by making the shortest speech that I have ever made since 1 May 1997, when I was elected. The new clauses give a partial transitional relief to certain TV productions that meet cinematic standards. As the right hon. Lady acknowledged, we raised these issues in Committee, and my hon. Friends tabled two amendments that offered some protection, although it is only fair for me to say that, in financial terms, our proposals were more generous.
      Nevertheless, it is encouraging that the Paymaster General has listened. She was slightly stung—perhaps legitimately so—towards the end of our deliberations in Committee, when her word appeared to be questioned. In fact, on one occasion, I think that I appeared to question the reliability of her word. Certainly, in this case, she has come up with the goods. She said that she would look at the matter, and she has done so. We understand the rationale behind the Government's position, and some relief is certainly much to be preferred to none. On that, I will rest my case.
      Mr. Chris Smith: In contributing to this brief debate on new clause 21 and other new clauses and amendments, I should perhaps remind the House of the interests that I have recorded in the Register of Members' Interests.
      When the Chancellor introduced the relief for investment in the production of films in the UK, in his first Budget five years ago, it was widely and warmly welcomed by the film community. I very much hope that the decisions that the Government have taken over recent

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      months will not endanger the warmth of that reception. In one important respect, the Government have moved to acknowledge some of the difficulties that the decisions announced in the Budget were likely to cause. New clause 21 contains a scheme for transitional relief, which I welcome.
      I know that particularly in the independent film and television programme-making sector in the UK, there is a feeling that the Government have recognised the problems of natural justice that arose where commitments had already been entered into, but the relief was on the point of immediate withdrawal. The Government have now tackled that. Yes, they have circumscribed the transitional arrangements, but they have done so in a reasonably fair way, and there will be a welcome across the industry and across the House for the transitional measures included in new clause 21.
      However, I am deeply disappointed that the Government did not move on the other issue which they committed themselves to consider—the withdrawal of relief for high value mini-television series, especially those made with inward investment money in the UK. Those are usually major undertakings costing many millions of pounds to make. They have all the features of a movie-making exercise—the amount of money, the scale of the operation, the kind of skills required and the type of film used to make the movie. All are akin to the making of a film for theatrical distribution, rather than to the making of a run-of-the-mill television series.
      With those high-value television series, there are major employment and skill benefits for us here in the UK. In the past year, for example, £173 million-worth of inward investment came into the UK to assist the making of such major television series. A large segment of that was the HBO series "Band of Brothers", but there were other major series as well. The employment consequences of that inward investment were substantial, as were the opportunities that were given to people in the UK to learn the process of making film and television programmes, to develop their skills, and to find employment not just directly on the movie sets, but in all the ancillary occupations around the making of television programmes and movies. I fear that as a result of the decisions that the Government have taken, we will lose such opportunities in the future.
      When the Government made their announcements in the Budget, they rightly drew attention to the fact that the original intention of the relief was to provide support for the British film industry, and not the British television industry. They stated in their Budget press release that they were trying to
      "refocus the reliefs on the original intention of stimulating the production of films in the UK and to promote growth, employment, investment and opportunities in the British film industry".
      I would argue that the making of major television series of high value—very often well over £1 million per hour in terms of the cost of making the programme—do precisely that. They are films in all but name.
      5.15 pm
      Undoubtedly, there have been abuses of the system, as the Paymaster General rightly said, in that soaps, game shows and even the weather forecast have been eligible for tax relief. It was not the intention of the original relief to assist such programmes, and it is right that the
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      Government have taken action to restrict relief so as to prevent such abuse. However, I fear that, in seeking to catch the abuses of the system, they are eliminating genuine, major investment in British employment in the making of major series.
      My right hon. Friend said that the makers of television mini-series are not subject to the same risk as film makers. Yes, that is true in the majority of cases. Most major mini-series, especially those reliant on inward investment, are made by substantial companies, which usually have some guaranteed outlet for distribution before they start to make the series. If that were the only test to be used, the conclusion that the Government have reached would be the right one. However, that is not the only test to be applied.
      I put three arguments to the Government. First, they are in danger of losing substantial amounts of valuable inward investment as a result of this decision. Secondly, the makers of mini-series may not be faced with the same risks as the movie maker, but they have the same temptation to make their mini-series elsewhere around the world where they can get tax relief, he it Canada, Ireland, Australia or anywhere else. That temptation is still there. The removal of the relief in the United Kingdom makes other environments more attractive to the makers of mini-series.
      Thirdly, the making of these mini-series has helped to sustain the infrastructure of the film industry, especially in the past year and a half when times have been difficult for parts of the industry. By damaging the television mini-series potential in the UK, the Government are in danger of damaging the film infrastructure. I urge them to reconsider that point.
      I realise that, for the time being, the Government's mind is made up. I would warmly welcome a proposal from the Paymaster General that she will come to tomorrow's proceedings in the House with a draft amendment to put this matter right, but I suspect that she will not do that. I am sad about that, but I hope that she will commit herself to reconsidering this question over the next year or so to see how in broad terms the new restricted relief is working in practice, and whether damage to inward investment is occurring as I fear it might. If that is what the analysis shows, she should introduce measures, perhaps in next year's Finance Bill, to put right the damage caused.
      I hope that a review of what is happening on this relief will be put in place. I shall listen with great interest to hear whether my right hon. Friend is able to assist in this matter.
      Mr. Edward Davey: I fear that I am about to strike a discordant note in the debate, but before I do, may I join in the congratulations to the hon. Member for Buckingham (Mr. Bercow)? We will be looking at the Conservatives' policy on the married couples allowance to see whether there are any changes in the future. [Interruption.] The Paymaster General has just mentioned the child tax credit as well. Perhaps there are other announcements that I have not yet heard.
      On new clause 21, it is always nice when Ministers tell us that they have listened and introduced changes in consultation with the industry. However, bearing in mind the general interests of the taxpayer, I am concerned when the Minister says that the industry is very happy with this

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      measure. I have great respect for the right hon. Member for Islington, South and Finsbury (Mr. Smith), who made a powerful and informed speech. However, many industries and individuals across the country would like a bit of tax relief, given half the chance. Is this tax relief necessary and are the provisions sensible? Let me deal with the details before discussing the principles.
      New clause 21 contains an attempt to prevent tax avoidance. As the Minister said, when the relief was originally introduced, it was not intended that it could be abused in the way that it has been. My concern is whether new clause 21 will be sufficient. I predict that we will be back here, perhaps not next year but the year after, discussing other anti-avoidance measures to stop the abuse of this tax relief. That is what happens when reliefs are provided in this way.
      Proposed subsection (2)(c) provides that
      "a significant proportion of the earnings from the film should be obtained by such exhibition."
      Making a judgment will be extremely difficult. When one is making a film and looking at a business case, presumably one looks at the future revenue projections, such as sales of videos, DVDs, television rights, and so on. The business case might not be disclosed to the tax authorities if the film makers wanted to ensure that they obtained the tax relief. There will still be many ways in which to get round these provisions.
      I do not know whether this is the first time in tax legislation that the words "quiz show" have appeared. The new clause refers to a range of different types of programmes; it has to be extremely specific to ensure that abuse does not take place. I am worried that the tax commissioners will determine whether something is a film or a quiz show. Will there be case law on that? I can see the policing costs mushrooming in the future. So although the Government are quite right to want to tighten up the provisions, I am worried that they have not gone far enough.
      When the Paymaster General was discussing new clause 22 she said, almost as an aside, that although the new clause restricts relief, providing transitional relief in the process, the costs in the coming year will be about £50 million. That is an awful lot of money. The right hon. Lady says that it will not reoccur because it is transitional, but let us imagine what £50 million could have done for an endowment for a higher education institution, providing training and education for the skills that people need in the industry.
      We will still be spending significant sums on giving the industry tax relief. The question that the House should really address is whether those sums, directed in a different way, would help the wider industry, the individuals who work in it, and UK plc overall. Should we be giving tax relief to those who are effectively the companies' shareholders, although they may be few in number, rather than investing in the skills and talents of British people who would work in the United Kingdom and abroad? I fear that we may be choosing the wrong method to support the industry by investing in shareholders rather than the skills and talents of British people.
      Adam Price: Does the hon. Gentleman accept the point made by the right hon. Member for Islington, South and
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      Finsbury (Mr. Smith), that the reality of the industry is that there is strong tax competition and there simply will not be a film industry in the UK unless we offer tax relief to support it?
      Mr. Davey: My concern with that argument is that the logic of it is that the UK Government should respond to every tax relief given by every other country and should engage in a competition of tax reliefs across the world. We live in a global economy and globalisation affects many industries, not just the film industry. If this is the first example of the Government and the country giving in to such pressures, it is a severe mistake. Rather than getting into that battle, we should invest in our people; that is the best way to secure our future.
      As the Paymaster General said, one of the reasons why the Government gave the relief was because they believed that the risks faced by the particular type of companies involved were significant and that there were higher risks than in other industries. That creates a disturbing principle. Will the Government give a series of reliefs to industries involved in high risk? Should we have a tax relief for impresarios who take on the risk of a theatre production? Should we have tax reliefs for the risks involved in developing a new record, and for all high-risk industries?
      Should we have tax relief for North sea oil companies, who are clearly engaged in risky ventures and do not appear to be enjoying the generosity of the Government tonight? If we are going to give tax relief because an industry happens to be particularly risky—in this case, the film industry—how far do we extend that principle? It is a worrying principle.
      Mr. Chris Smith: The hon. Gentleman dismisses the point about global competition far too lightly. This industry is far more mobile than virtually any other industry across the world. The industry is ready to move a major investment in production from one tax environment to another, depending on the relative attractions of those tax environments; much more so than virtually any other industrial activity.
      Mr. Davey: The right hon. Gentleman accentuates my concern. Will we have a new principle, concerning mobility of capital? There are many other industries that, arguably, are even more mobile than the film industry; for example the IT sector—later we will discuss IR35—in which we have seen the mobility of capital and labour. If we decide our tax policy simply and purely on that basis, we will be handing tax relief after tax relief to industry after industry. We have to be exceedingly careful.
      The Government were ill-advised to go down this route in the first place. We will be coming back and passing further anti-avoidance legislation for this relief year after year until a future Government have the courage to say that enough is enough. If we are going to promote the industry, we should do so by investing in the training and education of the people who work in it, and not a few shareholders who may not be United Kingdom citizens.
      Mr. Mark Field: I agree in part with some of the well-made points of the hon. Member for Kingston and Surbiton (Mr. Davey), particularly in relation to the worry that we may come back in years to come to try to correct other sorts of tax avoidance. Of course, that is the very nature of the tax advice given in all industries.

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      5.30 pm
      I represent the constituency in which the home of the British film industry—Soho—is located. Unlike the right hon. Member for Islington, South and Finsbury (Mr. Smith), I have no other declarations to make. I must confess that the Government have got things just about right. Because such relief was widely regarded as open to abuse, the film business's great worry was that it would be scrapped entirely, in the way that the hon. Member for Kingston and Surbiton suggests it should be in future years.
      Mr. Iain Luke: The hon. Gentleman mentions, as he did in Committee, that the film industry is located in Soho, but does he not accept that many small production companies in Scotland and elsewhere benefit from this relief, given the efforts of the Scottish Executive—and, indeed, of the Welsh Assembly—to encourage filming and film production as a means of stimulating the economy in areas outwith London?
      Mr. Field: I was not trying to claim exclusivity for my constituency, and as we speak, new film businesses are doubtless springing up in every last suburb of Dundee.
      As I said, the Government have more or less got the matter right, and the film industry's great worry was that, if widespread abuse were perceived, the relief would be scrapped entirely. I am glad that the Government took on board several of the issues concerning transitional relief that Opposition Members raised in Committee, and I am encouraged by the Paymaster General's comment that roughly 80 per cent. of film projects will be saved under her proposals. I take on board the comments of the right hon. Member for Islington, South and Finsbury, who knows a great deal about this subject. It is clear that the matter will have to be re-examined, and if evidence were to come to light that we were losing significant business, the Government would doubtless want to do so during the course of a future Finance Bill. The original intention was to ring-fence tax benefits for the film industry, and although one might argue that the film industry is part of a global communications world that includes television and the like, that intention has clearly been open to abuse.
      I hope that the Paymaster General is comfortable with the amendments. We will have to see how things pan out in future, and I shall continue to look towards the interests of a film industry that, hopefully, will remain strong in the years to come.
      Chris Grayling: I begin by thanking the Paymaster General, and congratulating her on listening to the discussions in Committee, and to the other representations that she received. Through these measures, the Government have addressed the transitional issues in an admirable way, and I am grateful to her for that. I am also particularly grateful for the reference in new clause 21 to documentary programmes in which the dramatic content is substantial. There is an increasingly grey area in production, in terms of programmes with a substantial mix of documentary and drama, so that measure is especially welcome.
      However, I retain two anxieties about the provisions in the clause, which were reflected in the comments of the right hon. Member for Islington, South and Finsbury (Mr. Smith). The Paymaster General said that the relief is
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      used by large companies to gain financial benefit, but I remind her of what I said in Committee. It is not simply the majors that invest in and produce such programmes; we also have a thriving independent sector. Television mini-series, major television dramas and cinematic films are often made by the same companies. My anxiety is that we may lose some of the higher-quality international productions. More to the point, we could put our own industry at a disadvantage in competing in substantial markets—in which it is much easier to get major productions off the ground, as in the United States—and in those that offer tax incentives to their own industries.
      I accept the Paymaster General's decision, but I ask the Treasury to keep the matter under review, and to be receptive to representations from the industry, in case there is a significant adverse effect on the production of major dramas in the United Kingdom. Should that happen, I hope that she will remain sufficiently open-minded to revisit the issue.
      I would be grateful if the Minister would also give a commitment to keep the issue of different distribution channels under review. I mentioned the issue in Committee, because it is far from clear that cinema will continue to be the sole driving outlet for independent producers. I gave the Minister examples of the development of online technology, which may lead to theatrical productions being produced not for the cinema but for an environment in which the same risks are taken—perhaps pay per view or as part of a subscription service, but not the conventional linear television channels that we have known for many years.
      I hope that the Minister will keep under consideration the changing nature of outlets and seek to be sure that the restriction of the relief to productions destined for a theatrical release is not stifling creativity in the independent sector. That sector is seeking new outlets and opportunities to develop its talents.
      I am grateful to the Minister for what she has done, but I hope that she will keep those two points in mind.
      Dawn Primarolo: A great misunderstanding has arisen about what we are discussing today. We are discussing a relief that was introduced following the Middleton report on film finance in 1996, which focused especially on the long-standing structural problems of the British film industry. The main relief sought to redress market failure and respond to the fact that British film-makers are denied access to the market and can make films only at considerable risk. That is because of the structure of the industry and, in particular, the distribution of films.
      The main relief, which we are attempting to return to its original intention, is intended to stimulate the production of low-budget British films for distribution in the cinema. If the House wishes to have a discussion on whether to have a tax relief for high-value drama on television, that should be a separate discussion. The issue before us is the relief and whether it should be returned to its original intention, as the Government have sought to achieve.
      The UK is not unique in using the tax system to overcome those specific problems. Many other countries do the same, including Australia, Canada and Ireland. Increasingly, eastern Europe is introducing similar reliefs for the same reasons.

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      We do not need to have a long debate about the value of encouraging the British film industry and, especially, the production of low-budget films. The relief was never intended to help to subsidise American companies' inward investment in making dramas for television. The hon. Member for Kingston and Surbiton (Mr. Davey) thought that the £50 million cost of the transition to 2003–04 was enough. However, if the Government had decided to allow relief to the production of high-value television drama, which is what attracts the inward investment, and had put a figure of £1 million per hour on that, the cost to the Exchequer would have been £100 million-plus a year. That investment by the Exchequer for £150 million of inward investment from film production and financing companies would not be a good deal for the taxpayer.
      We have to consider whether the United Kingdom has the skills and critical mass to attract the production of those films—we do—and whether we have a structure that helps. We are talking about films costing £15 million. That is what we call a low-budget film. We are trying to encourage those films and help the industry to blossom and grow.
      Mr. Chris Smith: Will my right hon. Friend also take into account the economic impact on the Exchequer and our whole economy of the 60,000 working weeks of employment that such investment would generate?
      Dawn Primarolo: I considered the employment question very carefully, and I have to tell my right hon. Friend that, regrettably, although the relief is claimed on the full production expenditure of those dramas, sometimes as little as 20 per cent. of the expenditure occurs in the United Kingdom. When we look at the industry's structure, we see that people are employed in many different parts of the industry and that they move around. The industry is not wholly dependent on such inward investment.
      I also have to tell my right hon. Friend that I have considered the inward investment issues very carefully. I have not ignored them, but the difficulty is that we have to consider whether any contribution would be made to the industry's development if a British company made a television drama costing £800,000 and did not receive the relief, but a high-value drama did—or, vice versa, whether a wholly British company should not receive the relief and, for example, American finance company should.
      Mr. Edward Davey: I congratulate the Paymaster General on not listening to those voices and on saving the taxpayer £100 million. Although the relief will be restricted under the Bill, what will the ongoing cost be to the taxpayer?
      Dawn Primarolo: I had that figure to hand a moment ago because I thought the hon. Gentleman might ask me about it, but I have put it down. I believe that the ongoing cost of the relief is about £70 million, but I will certainly check that figure, and I will write to the hon. Gentleman if it is incorrect.
      This is not a "push me, pull you", "congratulate you on listening, congratulate you on not listening" game. As a Treasury Minister, I have sought to consider the
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      arguments put before us on the relief's importance to the industry, on the impact on low-budget films in particular and on the industry's structure and employment. I have considered whether it was fair to allow the relief to be used in a way that was never intended, whether it represented a good investment for the taxpayer and whether the Government were behaving fairly in relation to taxpayers' legitimate expectations.
      The Government's underlying view, which is not shared by the hon. Member for Kingston and Surbiton, is that we are committed to the British film industry, and we intend to continue to be committed to it. However, we will not allow parts of the industry that do not require the relief to get it, thus bringing into disrepute a relief that was intended for small producers, as I have said.
      My right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and the hon. Members for Epsom and Ewell (Chris Grayling) and for Kingston and Surbiton asked whether the Government would continue to review this issue. First, there is no question but that the Government will keep a very close eye on how this relief is used, the costs, and whether it is stretched beyond what is intended. In response to the hon. Member for Kingston and Surbiton, I am as confident as I can be that the Government have made the necessary corrections, but there are some very clever tax planners, who work very long hours for very high fees, and I am not in a position to say that they will never find a way around this provision. That is a fact of life, and that is true of any relief.
      I will confirm, however, that this relief expires in 2005. Clearly, the Government and the House will need to take a view at that stage about whether it is the best way to continue to give encouragement and support to the British film industry. I will also bear in mind the comments of the hon. Member for Epsom and Ewell with regard to the different distribution channels, online developments and so on. To return to my point about £1 million per hour allowing access to relief, when I examined which categories of companies might gain as a result, I saw—looking at the development and movement of the industry—that they were not start-up companies or those to which the hon. Gentleman referred. Those companies are at the other end of the chain, where the low-budget British films are made. We must strike a balance in relation to whom we support in the industry.
      I assure the House that I will consider this issue very carefully, now, throughout the rest of the year, and, if I am still the Minister responsible, when it is up for review in 2005—I would have considered it very closely by then. I assure the House that whoever has responsibility for this relief would have done so, and that those issues that hon. Members have raised will be considered in the round. However, I cannot give any hope at this stage—it would mislead the House were I to do so—that we will change our minds on the question of high-value television drama. I do not have a closed mind on the matter, but I have not been convinced, and there is no substantive evidence to justify providing that relief. I could not therefore recommend it to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 22

      FILMS: RESTRICTION OF RELIEF FOR SUCCESSIVE ACQUISITIONS OF THE SAME FILM
      '(1) Relief under section 48 of the Finance (No. 2) Act 1997 (c. 58) (relief for expenditure on production or acquisition of film with total production expenditure of £15 million or less) in respect of acquisition expenditure is available only in relation to an acquisition—

      (a) by the producer, or

      (b) directly from the producer,

      and not in relation to any subsequent acquisition (or in relation to any acquisition within paragraph (a) or (b) other than the first).
      (2) For this purpose—

      (a) "acquisition expenditure" means expenditure to which subsection (3) of section 42 of the Finance (No. 2) Act 1992 (c. 48) applies (relief for acquisition expenditure);

      (b) "acquisition" means acquisition of the master negative of a film, or any master tape or master disc of a film, within the meaning of that section; and

      (c) "the producer" means the person who commissions the making of the film and is entitled to control its exploitation.

      (3) This section applies to acquisition expenditure incurred on or after 30th June 2002.
      For this purpose when expenditure is incurred shall be determined as for the purposes of section 48 of the Finance (No. 2) Act 1997 (c. 58,) (see subsection (9) of that section).'.—/Dawn Primarolo.]
      Brought up, read the First and Second time, and added to the Bill.

    Clause 99
      FILMS: RESTRICTION OF RELIEF TO FILMS GENUINELY INTENDED FOR THEATRICAL RELEASE
      Amendment made: No. 13, in page 76, line 13, leave out Clause 99.—[Dawn Primarolo.]
    New Clause 1

      SUPPLEMENTARY CHARGE IN RESPECT OF RING FENCE TRADES: FINANCING COSTS
      '. After section 501A of the Taxes Act 1988 insert—
      "501AA Supplementary charge in respect of ring fence trades: financing costs
      The adjusted ring fence profits of a company shall be computed without regard to the assumptions in section 501A(3) to the extent that the financing costs are incurred for the purposes specified in section 494 (2)(a)(i) and (ii) of this Act.".'.—[Mr. Flight.]
      Brought up, and read the First time.
      5.45 pm
      Mr. Flight: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: New clause 2—Termination of supplementary charge
      '. After section 501 B of the Taxes Act 1988 insert—
      "501BA Termination of supplementary charge
      The provisions of section 501A shall cease to have effect for accounting periods beginning on or after 31st March 2005.".'.
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      New clause 3—Supplementary charge: termination—
      '. Section 92 above shall have effect for a terminal straddling period beginning before 31st March 2005 and ending after that date.'.
      New clause 4—Ring fence trades: capital allowance supplement—
      '. After section 501AA of the Taxes Act 1988 insert—
      "501AB Ring fence trades: capital allowance supplement
      (1) A company's adjusted ring fence profits for an accounting period shall be subject to a deduction for the capital allowance supplement.
      (2) For the purposes of subsection (1) above the capital allowance supplement is the amount A + B where A and B are as calculated below—

      (a) A = 10% x C, where C is the written down value at the end of the immediately preceding accounting period of the separate plant and machinery pool of expenditure required pursuant to section 162 of the Capital Allowances Act 2001; and

      (b) B = 10% x D, where D is the written down value at the end of the immediately preceding accounting period of expenditure qualifying for allowances under Part 5 of the Capital Allowances Act 2001.

      (3) For the purposes of computing the capital allowances supplement only, any expenditure incurred on or after 1st January 2003 qualifying for capital allowances under the provisions of Part 2 or Part 5 of the Capital Allowances Act 2001 shall be ignored.
      (4) For the avoidance of doubt, the capital allowances supplement for an accounting period shall not reduce the amount of unrelieved qualifying expenditure carried forward into the following accounting period for the purposes of any provision in the Capital Allowances Act 2001.
      (5) Where an accounting period is less than twelve months the capital allowances supplement shall be restricted to the amount given by the following formula—
      (A + B) x E/365
      where E is the number of days in the accounting period.
      (6) The provisions of this section shall have effect for the company's first accounting period ending on or after 1st January 2003.".'.
      Amendment No. 42, in clause 63, page 41, leave out lines 13 to 27.
      Amendment No. 43, in clause 91, page 64, leave out from beginning of line 34 to end of line 33 on page 68.
      Amendment No. 44, in schedule 21, page 252, leave out from beginning of line 5 to end of line 30 on page 257.
      Mr. Flight: I add my congratulations on your coming silver celebration, Mr. Deputy Speaker, although I seem to remember that you were first elected to the House nearly 32 years ago.
      These four new clauses, and the Scottish nationalist amendments, are self-evidently about what we view as the Government's unwise and excessive taxation of the North sea industry. The Scottish nationalist amendments simply propose to reverse both the taxation and the new capital allowances. Our new clauses, which are supported by the Liberal Democrats and the Scottish nationalists, seek to alleviate the effect of those measures.
      Somewhat typically, when the Chancellor of the Exchequer responded to my hon. Friend the Member for Epsom and Ewell (Chris Grayling) on 20 June, he candidly displayed an arrogant and unwise attitude to this issue. He commented that he hoped that Members would not fall for the industry's propaganda and he argued that the 100 per cent. investment allowance would
      "make it more profitable to develop new oil fields".

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      That is absolutely not the case for the new operators that have no profits. He also argued that the British tax regime would be
      "more favourable than that of other countries."—[Official Report, 20 June 2002; Vol. 387, c. 400.]
      As I will show later, that is also not the case.
      I respect the noble efforts of the Paymaster General to put the Government's economic case, but the essence of our case is that these taxes will cause serious damage to North sea oil recovery in the coming years. As everyone knows, the North sea field is at a very mature phase, and most subsequent recovery will depend on smaller, newer companies. Many of them will not have the profits to qualify for the 100 per cent. allowance.
      Have the Government even considered the fact that the projected average fall in North sea oil production is 1.5 billion barrels a day, which is the equivalent of a cost of £12 billion to the current account deficit, which is already at the highest real figure on record? According to the Government's own assessment, it is calculated that the measures will lose 50,000 jobs by 2010 and £10 billion-worth of capital investment. If we add up the loss of income tax and national insurance revenues and the potential welfare costs, it is unlikely that the Government will see more than half the tax take projected for the measures.
      The Government were extremely unwise to act in bad faith in relation to the substantial £4 billion—a figure much higher than in previous years—of new investment that resulted from the PILOT collaboration. The former Secretary of State for Trade and Industry—yet again, the right hon. Member for Tyneside, North (Mr. Byers)—assured investors of the future stability of the tax regime that prevailed. However, investors have been zapped with an extra 30 per cent. of taxation without even being able to benefit from the capital allowances on the new investment that they have made.
      The Government try to argue that they have warned the industry since 1997 that they were going to raise taxation, so I place the Chancellor of the Exchequer's remarks on the record again. He said:
      "It has been put to me that the North sea oil companies earning higher profits from higher oil prices should be subject to special taxes, but I can tell the House that I am determined not to make short-term decisions based on short-term factors. The key issue is the level of long-term investment in the North sea. This will be the approach that guides tax decisions in future."—[Official Report, 8 November 2000; Vol. 356, c. 317.]
      We would argue that the Chancellor has stood his promise on its head and introduced tax measures that will clearly reduce investment in the North sea.
      The Government have based their arguments for extra tax on the excessive returns that have been made, and they have quoted the return of 34 per cent. achieved in 2000 at the top of the cycle. The industry has responded by quoting returns on investment since 1996, and those figures are most relevant for the future. They show a return of only 7.2 per cent., reducing to 5.9 per cent. after tax. In the whole decade of the 1990s, the average return was 14 per cent. before the new tax was introduced.
      I turn to the fundamental reason why it is economically unwise to increase North sea taxation at this point in the oil price cycle given that the North sea field is in its
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      mature phase. Taxation of oil and gas provinces needs to reflect the relevant basin's geological realities as well as their maturity. The average UK continental shelf discoveries now contain only 25 million to 30 million barrels of oil equivalent. By comparison, the figure is 100 million barrels in Norway, 150 million in the gulf of Mexico and 350 million in Angola. The UK continental shelf is virtually the most expensive province in the world in which to engage in activity. Development costs average $4 a barrel; operating costs add another $4 a barrel; and exploration and appraisal costs add a further $4 a barrel.
      According to the recent Wood Mackenzie study, of 59 recent developments, only one province—the east coast of Canada—is more expensive than the UK continental shelf. The study ranked the UK continental shelf as 31st out of 51 countries in terms of exploration attractiveness and concluded categorically that there was no room to extract additional fiscal rent from the UK continental shelf.
      Those findings reflect the fact that the North sea field has entered its most difficult phase as it declines and enters maturity. Average discovery sites are likely to be much smaller than in the past, and discoveries will be more difficult to make and more expensive to develop. In short, North sea activity is far riskier than it has been and the fiscal regime needs to reflect that fact and compensate for the high costs and geological realities. It should not add extra penalties in the way that it is now doing.
      The Government will argue that some UK continental shelf fields have been very profitable in the past and have been highly taxed. However, in reality, it was only the hope of discovering such profitable fields that provided the incentive to future activity and to overcoming technical barriers. Indeed, there has been far greater extraction from the North sea than was previously predicted. There is little hope of discovering such profitable fields in the future if success is to be excessively penalised on the rare occasions that a profitable field is discovered.
      Some have argued that our fiscal regime is generous. However, the facts, when properly analysed, do not support that view. Allowance must be made for geological realities and, even before the Budget, taxes imposed on the UK continental shelf ranged from 30 to 69 per cent. depending on a field's age and profitability. Those taxes have now gone up to between 40 and 74 per cent. They are high tax rates for a province that has high costs, poor prospects and small fields.
      The Government have relied on analysis that assumes much larger fields than are found in the North sea and lower development costs. If allowances are made for the differences, the British tax regime is considerably less attractive than appears on a shallow analysis. Other basins in other countries are more attractive. For example—comparing like with like—the top rate of tax in the gulf of Mexico is 44 per cent., in Norway 78 per cent. and in Angola 68 per cent. Those are some of the UK continental shelf's main competitors, so the Chancellor's comment that the UK has one of the most attractive tax regimes does not stand up.
      Chris Grayling: Does my hon. Friend agree that one of the most fascinating elements of the Chancellor's reply to my question of 20 June was that, although he said that he was creating a wonderfully attractive environment in

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      the North sea, he admitted that he was taking £500 million out of the industry? It beggars belief that any Chancellor of the Exchequer could believe that one could take £500 million out of an industry and benefit it.
      Mr. Flight: I thank my hon. Friend for making that point clear. However, the Chancellor was wrong even on this issue. The leading expert, Professor Kemp, has estimated an additional tax bill of £7.6 billion for the industry as a whole up to 2010. That is considerably more than the £500 million per annum quoted. I repeat that although the tax revenues are greater than the Government are letting on, the tax losses will be significant as a result.
      6 pm
      New clause 1 would allow the financing costs incurred for the purpose of the ring-fenced trade to be deducted to reduce the profits on which the supplementary charge is levied. Hon. Members will know that the supplementary charge of 10 per cent. on the profits of UK companies arising from oil and gas extractions is levied without deducting the costs of financing the trade. In addition to being charged on profits that do not reflect the commercial reality of the businesses, because companies have to finance the investment in the expensive plant and machinery required for oil and gas extraction, the supplementary charge denies a deduction for financing costs. That will make the UK much less attractive, especially to overseas investors and smaller investors who are crucial to further exploitation of the North sea.
      For overseas-based businesses, the interaction of UK and overseas tax on profits will be such that the United States of America and France in particular will allow only their residents to credit the foreign tax paid if financing costs have been deducted when calculating taxable profits. In other words, the effect of the financing costs not being tax deductible and the newly defined additional taxation not being a straightforward corporation tax will be the loss of double taxation treaty benefits.
      No doubt the Government will respond by saying, "Hard luck", because they think that the interest deductions from which the industry has benefited have been too great. No doubt they also believe that although the costs will not qualify for double taxation, they might qualify as an expense. Those are not the fundamental issues at stake on the double taxation arrangements, however. The Revenue has received no response from the IRS to its inquiry about the new charge. However, the tax counsel to Mobil Oil advised definitively that the result will be unfavourable and the new cost will not be allowed.
      Malcolm Bruce: The hon. Gentleman makes an important point. Does he find it extraordinary that the Government are so willing to acknowledge the problem that they have written to the IRS, the tax authority in the United States, asking it to consider reviewing its tax policies as a result of changes to UK tax? Do they really think that that is likely? How would the Inland Revenue respond to America trying to change our taxes?
      Mr. Flight: I thank the hon. Gentleman for his common-sense comment. It underlines the fact that the costs will not be allowable under double taxation treaties and, according to all the tax advice that I have received, I am afraid that the Government and the Revenue will get a response from the IRS to that end.
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      New clauses 2 and 3 address a separate territory. They would bring the supplementary charge to an end by 31 March 2005 and negate it if the price of oil falls significantly in the meantime. That is designed to give the industry an idea of how long the windfall tax will apply and could help to encourage investment today in fields that are expected to be profitable in a few years' time.
      The interaction between accounting requirements and tax arrangements is an important consideration. The key result would be that the 2002 earnings of oil companies will not be hit as dramatically. I am sure the Government would not welcome further downward spirals in share prices if pension schemes are unable to pay the pensions to which they are committed when the measure makes its way through to oil prices. The Government's response is likely to be that they want a stable regime, but it is self-evidently a disaster to have the stable regime that this Finance Bill institutes if it is no good for the industry, the country or our external overseas accounting position.
      New clause 4 would allow accelerated capital allowances on new assets used in a ring-fenced trade. As we debated in Standing Committee, we want to take a cash flow advantage approach, which does not reduce the total tax payable over the life of the project or improve accounting profits. The new clause would allow an extra 10 per cent. deduction over and above normal capital allowances in 2003. It would apply only to assets acquired before 1 January 2003 on which normal non-accelerated allowances were claimed.
      We want to reduce some of the bad faith evidenced in the PILOT encouragements. The Government have been stonewalling by denying that there is bad faith. For the past 20 years, transitional arrangements have been available when significant changes have been made to the tax regime. If the Government argue that there is the odd historic case of a retroactive tax, measures have been designed to offset those. The key problem for the oil extraction industry is that it perceives two major risks: first, the operating risk of the oil price; and, secondly, the operating risk of a Government who have a regime that lacks fiscal integrity in terms of what the future will hold. If the risks increase, the returns have to increase to justify the same investment by having a higher risk:reward ratio.
      I pay tribute to the efforts of the hon. Member for Waveney (Mr. Blizzard) for his attempts to get the Government to see sense. I am aware that Scottish MPs have been involved in significant lobbying behind the scenes, but they have been feeble in not defending their homeland in public. The industry employs 6 per cent. of the labour force in Scotland.
      Mr. Alex Salmond: The hon. Gentleman puts at risk his cross-party support. I take it that when he says "feeble" he is referring to Scottish Labour MPs.
      Mr. Flight: Indeed I was. I thought I made that clear. However, I am sure that anyone who appreciates what is at risk would have wanted more Scottish Labour MPs to join the Scottish nationalist MPs, the Liberal MPs and Conservative MPs in speaking out against the wanton damage that will be caused, and the wanton reduction of the prospects for recovery in the North sea. No doubt they would also have wanted them to speak out against

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      measures that will reduce investments substantially, destroy jobs and boost an already vulnerable current account deficit to the extent of £12 billion per annum.
      Mr. Bob Blizzard: As I said on Second Reading, I very much welcome efforts to raise more money for the NHS, but I am concerned about the Bill's effect on future investment in the United Kingdom oil and gas industry. That is important not only to local economies in many parts of the country, such as my own, but to the country generally, because investment in the industry has amounted to about 16 per cent. of total industrial investment over many years, which means that it has generated a lot of employment.
      Having listened to debates on this subject throughout the Bill's proceedings, I still find it hard to see how a big increase in tax cannot have some effect on that investment, whether it be a reduction in the cash flow from the existing fields which is available for reinvestment or an impact on the psychology of investors who have just taken a hit, perhaps shaking confidence in investment.
      Behind the measure lies the argument that the oil and gas companies make big profits. They certainly do in bumper years such as 2001, when we had high oil prices, but they do not make big profits all the time, as we can see by looking at returns over the full cycle or over the full lifetime of individual projects. The return on capital employed over those periods is not greatly different from that in other industries.
      The hon. Member for Arundel and South Downs (Mr. Flight) quoted a figure of 14 per cent. over time, before corporation tax is taken into account. That compares with returns of between 11 and 13 per cent. for other companies in non-financial sectors over, say, a decade. That has to be the case, or everybody investing in stocks and shares would just plunge all their money into oil and gas. It would be the only game in town and those companies would constantly be at the top of the stock market. No one would need to engage a financial adviser.
      Oil exploration and production is a risky business, and companies find many expensive dry wells or uneconomic fields in an area before they discover the successful ones that make money. Fiscal stability is therefore an important factor when companies are making plans, and it has been seen as one of this country's great strengths. As we know, the industry is arguing that that fiscal stability is now at an end, so it has to factor a fiscal risk into its calculations for future investment, which adds to the overall risk.
      The Treasury argues that fiscal stability has now been achieved and that the review started in 1997 and halted in 1998 has now concluded. The essence of its case is the argument that although it is unquestionably taking more money out of existing developments, the fiscal position for new developments is improved by the combination of 100 per cent. first-year capital allowances and the supplementary charge. The industry's figures, which I have seen and which have, I know, been presented to the Treasury, also show that to be the case, on paper. The argument is about whether the reality is more complicated.
      The industry's figures also show, however, what happens if fiscal risk is factored in and corporation tax of 40 or 50 per cent. applies. In that analysis, the fields do
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      not work at all. The Treasury says that it would never set the tax at 50 per cent. because that would kill everything off, but at 40 per cent, the fields still work.
      6.15 pm
      Notwithstanding that argument, we have to consider now the key question of how we can maximise investment in what will clearly be a new regime of a 10 per cent. supplementary charge and 100 per cent. capital allowances. The key issue, which is the subject of one of the amendments, is financing costs. We know that, over the years, companies have normally been allowed to offset them against corporation tax, but it is proposed to change that so that they will not be creditable against the supplementary charge. That is absolutely relevant to new development, and we have to be extremely careful that it does not act as a disincentive that will undermine the incentive given by the Treasury in the 100 per cent. capital allowances.
      I have been asking why the measure is necessary. The answer given in the Committee of the whole House was that it is important if the supplementary charge is to work; otherwise there would be scope for companies to manipulate their financing costs so that they could offset more than is justified against the new charge. The industry maintains that that is not possible under the existing regulations and the close scrutiny by the Revenue.
      Will the Financial Secretary tell us exactly what loopholes the measure is designed to plug, and will she deposit that information in the Library? I realise that it is not normally the business of the Treasury to broadcast the existence of loopholes, but if the Government are introducing measures to plug loopholes, it would be helpful to know what they are. We would then be able to see clearly whether there is a need for a measure preventing financing costs from being offset against the supplementary charge.
      I fear that if we have got this wrong, it will create unnecessary problems, even within the new regime, for certain types of company whose continued investment in the North sea is desperately needed. The first type is smaller companies, for which financing costs assume a greater proportion of their costs. They have a vital part to play in the development of the North sea. The experience in other mature provinces around the world is that smaller independent companies—the experts who get stuck in—are the appropriate ones to go after smaller reserves and make money by extracting them. We want to ensure that those small companies, which the Government accept have a part to play in future, are not put off by the measure.
      That is particularly the case with new entrants. We have managed to attract 23 new entrants to the North sea since 1997. We know that they will not get the real benefit of the 100 per cent. capital allowances because they have no profit in the first year against which to offset them. I know that they can roll them over, but they would then have, for example, 25 per cent. allowances for four years, which is what they already have. Financing costs are an important consideration if we are to encourage new entrants.
      Another reason for considering the measure carefully concerns the origin of much of the investment—parent companies or venture capitalists in the USA. There are issues of double taxation which are not yet clear. I know

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      that the Government have written to the IRS in the hope of clearing up the matter through double taxation treaty agreements. I fear, however, that until that agreement is confirmed by the IRS, investors will not go ahead in case they are caught by the measure. Furthermore, I am told that if the financing costs are not creditable but companies take them as an expense, the measure will still make a difference of about 6.5 per cent., which might make the difference between investing here or in another country.
      I ask Ministers to try to find an alternative way of protecting the supplementary charge—the Treasury introduced it, so it will want to protect it—that does not have the negative effects on smaller companies and new entrants that I have described. In addition, it would be helpful if the measure and the reasons why it is needed were set out clearly for us to see.
      At the core of the issue are the integrated companies that have both upstream and downstream activities, and the fear that money might be moved between the two spheres of activity. However, new entrants, smaller companies and independents are not downstream companies; they are only upstream companies. If we carry on as we are, those companies will be hit by a measure that is presumably not designed to hit them, so we must make sure that it does not. Those who have been bitten by the supplementary charge might—rightly or wrongly; it depends on what view one takes of the argument about fiscal stability—be shy of further investment, but we cannot afford to deter new and smaller companies.
      Royalty is part of the package, and it is important that we proceed quickly with the consultation that will lead to its abolition. Everyone seems to agree that it need not take long as it is a technical consultation, not a full public consultation. I worry that the longer we leave the position on royalty unattended, the longer we will hold back the investment we need, even under the new regime. It will therefore be helpful if the Minister says something about royalty tonight and confirms that once the consultation is over, the Chancellor can abolish royalty without further legislation, and can fix whatever operative date he wants—even today, if he were so minded.
      Malcolm Bruce: I am pleased to follow the hon. Member for Waveney (Mr. Blizzard), who made a characteristically well-argued and consistent contribution. He spoke about real issues that are clearly affecting the industry. Although the Government have to some extent acknowledged those issues, they have not yet answered them. All of the participants in the debate would like to know how the Government can acknowledge the problems, but leave them unaddressed.
      The impact of the changes is real and perceptible, not theoretical. As I said in the Committee of the whole House, I have been indirectly or closely involved with the industry for more than 30 years. Thirty years ago, oil and gas was a boom industry—a crazy industry. Everyone was scrambling to get the stuff out and money was almost no object. There was an OPEC-induced oil crisis and the Government were interested only in getting the oil out and resolving the balance of payments position; they would worry about the regime later.
      Now, the position is completely different. The North sea is, in the precise term used by the industry, a mature province, which means that marginal rates of return are being squeezed and the risks are higher in a high-cost
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      area. The Government appear to have picked precisely that moment to create a new pressure on an industry which already has enough pressures on it simply because of where it operates. I urge the Government not to discount the actual and the psychological effects of the change.
      The industry believed that it had established a relationship with the Government that was based on a recognition that it should be treated as an industry, not merely a source of revenue, and provided with a regime that created a climate conducive to long-term investment. The least it should have been able to expect is not that there would never be any tax changes, but that changes would not be introduced without proper consultation, transitional arrangements, and a willingness to hear the industry's explanations of how Government proposals might adversely affect investment. In reality, however, the industry has had to make that case after the Government have made their decision. In the past five years, the industry has invested £23 billion on the presumption that either the existing regime would continue, or any change would, first, be negotiated, and, secondly, allow for transition. Companies that have made investments on the basis of the pre-Budget regime are understandably extremely miffed that they have been treated in such a fashion.
      Companies that made calculations based on assumptions about the oil price that were not borne out have also been hit. The Government can say, perfectly reasonably, that the risk in the industry is that the oil price fluctuates; the industry has to calculate that fluctuation and build it into its risk assessments. However, I should have thought the Government understood that an industry that has to deal with an extremely volatile fluctuating commodity price could do without a similarly volatile fluctuating fiscal regime. The combination of those two factors substantially increases risk.
      The Government seriously underestimate the damage that is being done to this country's reputation for promoting inward investment and industry. The new tax regime wholly contradicts the very rhetoric that the Chancellor placed at the heart of his Budget. He expressed his desire to create a stable, predictable corporation tax regime for business in general in the United Kingdom, so as to make the UK an investor-friendly, business-friendly economy. If that is what he wants for every other sector of the economy, why has the oil industry been singled out as not entitled to benefit? We can legitimately seek an answer to that question.
      The new clauses deal with the specific concerns that have been identified by the industry as "addressable". The industry wants the Government to rethink its approach to those matters. The hon. Member for Waveney stated well the Government's argument that they cannot allow financing costs to be offset against the windfall 10 per cent. The implication of that argument is that they do not trust the industry. They will allow the industry to fiddle the other 30 per cent., but not the 10 per cent. margin. However, as the hon. Gentleman said, the Inland Revenue is perfectly well aware of the regulations, so it would be interesting to hear precisely how much abuse the Government think is going on. Much more to the point, many of the smaller companies, by definition, finance their projects by going to the market to secure finance. They have real, not theoretical, financing costs which they

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      assumed they would be allowed to offset in a proper way that, in the case of American and French companies, conformed to double taxation agreements.
      In the previous debate, the Government acknowledged that problem and said that they have taken up the matter with the American tax authority, the IRS. As I said in my intervention on the hon. Member for Arundel and South Downs (Mr. Flight), if the Government admit that the problem is severe enough for them to ask the American IRS to consider changing the regime, are they prepared to revisit the issue if the IRS declines to do so? Alternatively—or additionally—are the Government prepared at least to engage, or to allow the Inland Revenue to engage, in negotiations with individual companies that can demonstrate that the offset is crucial to the viability of their project and that the project will not happen without it? That would reassure us—and the Department of Trade and Industry—that the Government genuinely want to ensure that they do not seriously reduce the amount of investment that would otherwise take place.
      I suspect that here we have a point of argument between Ministers, the industry and the Opposition. We genuinely believe that some investment—possibly a significant amount—is at risk and may not happen. The Government do not appear to accept that argument. At the heart of our concern is our genuine belief that investment will be prejudiced, further jobs will be lost, and some oil and gas that would have been recovered will not be recovered, at least in the short run, and possibly not at all. I therefore ask Ministers whether they are prepared to consider case-by-case representations rather than merely shut the door.
      6.30 pm
      Ministers have stressed that there is a package. Part of it is the capital uplift, which is a contribution for some companies, but not all, and does not quite offset the windfall. The other part is the abolition of royalties. I am told that £2 billion of investment is proposed in respect of fields that are paying royalties, but are clearly on hold. No company is going to commit itself to investing in a royalty-paying field until it knows whether, when and how the royalties will be abolished, so the £2 billion of investment is on hold until the consultation paper is published, all the consultation is concluded and the Chancellor makes his decision. I hope that Ministers will understand that speed is of the essence if that £2 billion is not to be lost or its investment is not to be unduly delayed.
      The proposal for a three-year limit has genuine merit. First, it would close off what Professor Kemp has identified as the very high potential return to Government and cost to the industry in the later years, which are difficult to predict at this stage. As a number of industry representatives have said, such provision would enable them to say that the regime will either end or be continued, but only following further debate and consultation. There is genuine merit in the proposal, especially if the new arrangement is a windfall tax that is being imposed because of the high oil price. What the Government have said about that is contradictory. Is this a windfall tax or a permanent increase that makes the tax regime less attractive at a time when the industry is having
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      more difficulty squeezing out marginal oil at higher costs and greater risk? Now does not seem the right moment to make a permanent change of that sort.
      Chris Grayling: Like me, the hon. Gentleman will have seen the many references made by commentators in recent weeks to the potential problems that the Chancellor still faces in raising revenue for the latter years of this Parliament. Clearly, any fall in growth rates will also have implications for the Chancellor. Does he share my opinion that it is extremely unlikely that the tax is a windfall tax, as we cannot be sure that the Chancellor will be able to afford to give the money back?
      Malcolm Bruce: That is a fair point, but Chancellors always have to consider the dynamic of their tax changes. I have drawn the following analogy before. When the previous Government's plans to introduce VAT on fuel were frustrated by the will of the House, they decided that they would further tax whisky, perhaps as a slightly spiteful revenge. As a result, demand for whisky fell so much that the following year, their net revenue from the spirits industry was reduced. The hon. Gentleman puts his finger on an important point: if the Government try to squeeze more taxes out of an industry that is marginal and mature when the economy is struggling, their actions will become almost counter-productive. They will depress the industry, the investment and the profits that they are trying to tax, and finish up promoting reduced revenue. That is a genuine issue that the Treasury will, of course, find impossible to quantify until after the event. Surely, it must bear that in mind.
      It is certainly not possible to look at the North sea and say that the industry is booming and therefore deserves to have some money clawed back from its windfall profits. I understand that 11 rigs are currently stacked in the Moray firth. It is forecast that by the autumn, that number will have risen to 18. Nobody is suggesting that that is a direct result of the tax changes, but it is nevertheless an indication of reducing activity, and the tax change that we are considering will not stimulate new activity.
      It is interesting to note two points made in the briefing circulated by BP. First, although the 100 per cent. capital uplift effectively reduces the tax burden in the first year, the whole package increases the tax take and reduces the return over the lifetime of the field. The Government know perfectly well that any analyst will consider the life of an investment and not only its first year. Although a contribution is made to that overall calculation, the net effect is negative.
      BP, which is the biggest operator and UK company, is also saying that the North sea taxation regime now needs to be changed further. The industry is therefore saying not only that it needs concessions on the financing costs and the immediate abolition of royalties, but that further tax inducements may be necessary to ensure that it maintains its long-term commitment. It is often said, and it bears repeating, that the oil industry is a worldwide industry and that the North sea and the UK continental shelf are by no means the most attractive prospect for it. All the major companies operate worldwide and it is not that difficult for them to switch their investment to more attractive areas.
      This debate started on the day of the Budget announcement, was conducted in Committee on the Floor of the House and has returned several weeks later, but a

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      number of concerns remain on which the Government have acknowledged that there is a problem, but they are not prepared to address it. I ask Ministers to acknowledge the concerns that are being expressed by the industry, Opposition Members and, indeed, some Labour Members on the basis of a genuine commitment to ensuring that the North sea continues to be a major source of investment, employment and technical innovation. We are concerned that the Government, through the Budget, are encouraging the industry to take much of that activity outside the United Kingdom, which will damage employment, investment and technical innovation in the UK economy. I cannot believe that that was the Government's intention, but I urge them to recognise that it may be the consequence of what they are doing.
      Mr. Frank Doran: I must confess to being one of those feeble Scottish Members of Parliament who have been doing all their lobbying behind the scenes. The comment that was made from the Opposition Front Bench either shows just how long it is since the hon. Member for Arundel and South Downs (Mr. Flight) was in government or, as I cannot recall exactly when he came into the House, demonstrates that he has not experienced government at all. Full-frontal attack is not always the best way of dealing with issues. The ability to sit down and talk directly to Ministers is more important, and I am very pleased about the access that Ministers at every level have provided for Scottish Members who are interested in discussing the issue. [Interruption.] The hon. Member for Gordon (Malcolm Bruce) comments from a sedentary position, but I can excuse him, as he has never experienced government and is never likely to do so, so such a way of operating will be completely alien to him.
      The presentations from those on both Opposition Front Benches reveal one of the difficulties about this debate. On one side, it is clear—I am very clear about this—that the complaints made by the oil industry are wholly expected. I have listened carefully to the arguments and have engaged in debate with those involved, who are doing what is appropriate for them to do. However, the doom and gloom scenario does not reflect the debate in the industry, which is not unified on the issue. Certain companies, including one of the major ones, have been pressing the case very hard directly and through the United Kingdom Offshore Operators Association, but there is a much livelier debate below the surface.
      The discussion is about the balance in the budgetary measures that affect the North sea. It is often conveniently ignored in public statements that the measure is not only about extra tax, although that is important, but about the balancing measure of the tax reliefs that have been provided. Yes, there are concerns about how those provisions will operate in practice, but the bulk of the industry is sitting down to see how particular companies will be affected by the new taxes. It is important to get that on record. The oil industry has a diversity of views on this as on every subject, but the only views that we are hearing at the moment are those of the Private Frazers—the doom and gloom merchants.
      Sir Robert Smith: Does the hon. Gentleman recognise that some of the people expressing doom and gloom might be those who saw the royalties relief that was promised by the
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      Chancellor as an important part of the upside? Even now, as we reach the final stages of the Finance Bill, the consultation paper on the abolition of royalties has yet to be published. Does the hon. Gentleman think that if the Chancellor is serious about that commitment, he should ensure that the paper is published?
      Mr. Doran: I shall make my own contribution to that debate shortly. The hon. Gentleman makes an important point, but I may express it slightly differently.
      In their new clauses, the Conservatives are trimming around the edges somewhat in that there is no direct attack on the 10 per cent. increase. The SNP amendments would simply wipe everything out to return to the status quo.
      The allegation that I have heard most frequently in every debate on this matter concerns the stability of the tax regime, and Conservative Members mentioned it again today. In fact, the hon. Member for Arundel and South Downs went a lot further in his comments. He said, to quote him verbatim, "The UK tax regime lacks fiscal integrity as a result of this Budget measure." That is an extreme statement, and I find it difficult to see how he has reached that judgment.
      Mr. Flight rose—
      Mr. Doran: The hon. Gentleman is anxious to leap to his feet. Before he does so, it is important to say that although we need to have a debate, it must be conducted in a measured way, and his comment was a long way from reality.
      Mr. Flight: With respect, I think that I made the point straightforwardly. In the past, Governments have always observed the principle that if the tax regime is changed, it does not affect existing arrangements. Even in the one or two instances where that was not so, compensation was made in other ways. That is not the case as regards this provision, which is why I, and many in the industry, believe that it does not have tax integrity. Moreover, it follows the Secretary of State for Trade and Industry having encouraged substantially higher levels of investment through the PILOT scheme and having implied that the existing tax regime was going to continue. It is a pity if the hon. Gentleman—
      Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman's intervention is starting to become a speech.
      Mr. Doran: I agree with you, Mr. Deputy Speaker. Methinks the hon. Gentleman protests overmuch. I shall remind him of some history. He may not have been around at the time of the 1993 Budget, when the Conservative Government did exactly what he is accusing this Government of doing. They introduced tactics of which the industry—at least, the bulk of the industry—had no advance warning. One company—I think that it was Texaco—signed a deal on the day before the Budget. On the following day, as a result of the Chancellor's statement, that deal lost it several million pounds. The company did not anticipate what was going to be in the Budget, and there was no consultation. That is exactly

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      what the hon. Member for Arundel and South Downs is accusing the Government of, yet nobody compensated Texaco.
      Chris Grayling: I, too, had not entered the House in 1993. Did the hon. Gentleman oppose the changes in the 1993 Budget, and, if so, how can he support those in this Budget?
      Mr. Doran: Unfortunately, due to a little disagreement with the electorate, I was not here in 1993 either. However, I was acting as a consultant to one or two of the people involved and contributed to the discussions.
      On stability, it is difficult to know what the oil industry wants. I understand why PILOT has been mentioned, but PILOT has a completely different focus. The Chancellor's words were clear. In 1998, when he dropped the review of the oil tax regime, he made it clear to the industry that the decision to do so was a decision for the duration of the Parliament. He made it equally clear in this year's Budget that he was giving us a tax regime for the oil industry for this Parliament. I know of no other area of the economy with that level of stability—a guarantee that that is it for the entire Parliament.
      6.45 pm
      There are three high watermarks in the history of oil taxation. In 1975, the then Labour Government established the modern petroleum tax regime with the introduction of royalties, petroleum revenue tax, and so on. That, with some changes around the edges, remained the position until 1993. This year, a further substantial change is being introduced. That is a considerable degree of stability for any industry, and it should be noted and recorded.
      Mr. Salmond: The hon. Gentleman is being somewhat disingenuous. He may recall that in a Scottish Grand Committee last year, the hon. Member for Aberdeen, South (Miss Begg) said:
      "The oil industry in the North sea is doing so well because this Government have provided a stable fiscal regime. When they came to power, my right hon. Friend the Chancellor considered the fiscal regime and took advice from the industry, and those of us in the north-east who advocated leaving well alone."—[Official Report, Scottish Grand Committee, 28 March 2001; c. 26.]
      Did the hon. Gentleman agree with his hon. Friend, or has he since changed his mind?
      Mr. Doran: I am not sure what the hon. Gentleman's question is. He is right that in 1997 and 1998 I lobbied the Chancellor—not publicly, but privately—to leave well alone. As the hon. Gentleman well knows, at that time, the industry was experiencing a sustained period of low oil prices. This year, the Chancellor is reacting to a sustained period of nearly three years of high oil prices.
      Mr. Salmond indicated dissent.
      Mr. Doran: The hon. Gentleman took part in the debate and he knows exactly what I said. He is twisting words; he is very good at that. At that time, in 1997 and 1998, leaving well alone was the approach that both he and I took.
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      I have already spoken for longer than I intended, but I want to make a couple more points. Despite the support that I have given to the Chancellor's measures, two issues need to be addressed. The first of those—royalties—was mentioned by the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith). It is important to get an early decision from the Treasury on royalties, and I know that the intention is to publish a consultation paper. From the industry's point of view, and from my perspective as a Member of Parliament with an interest in the industry and a constituency that houses part of the capital of the industry—the city of Aberdeen—an early decision on royalties would be extremely welcome. There is a genuine fear in the industry that the Chancellor intends to delay the introduction of any reliefs until the next financial year. I would be disappointed by that. The oil industry sees the royalties relief as part of the package, and would appreciate it if it were part of the package for this year, starting on 17 April when the new supplementary tax was introduced.
      The second point concerns financing costs, the most important aspect of which is to deal with the uncertainty that has arisen. My hon. Friend the Member for Waveney (Mr. Blizzard) has already made the position fairly clear. I do not go the whole way with him, but the industry needs to know as soon as possible exactly what the position is.
      With those two qualifications, this is an important measure. The industry will learn to live with the new arrangements. When they are properly examined, the tax allowances provided in the Budget will be welcomed and will take the industry forward into the new era. That is inevitable. It is a maturing province, which remains the most important part of our economy—not only in the north-east of Scotland, but in the whole of the UK. Last year, a little under £4 billion was invested, and the hon. Member for Gordon mentioned the five-year figure of £23 billion. That is a massive amount of investment in one part of our economy, and it should be supported.
      Mr. Salmond: I did not quote the hon. Member for Aberdeen, South (Miss Begg) to play with words or twist phrases. The quote was from the proceedings of the Scottish Grand Committee in March 2001. It matched the general understanding that the idea of an unannounced tax change, made without consulting the industry, had been seen off. The oil industry was not labouring under an illusion; it had not simply forgotten about the change. The belief that no such change would be made was widely shared throughout the industry and among Members of Parliament, including the hon. Member for Aberdeen, South.
      The hon. Lady went on to claim the credit for, as she put it,
      "those of us from the north-east",
      who persuaded the Government to "leave well alone". I doubt whether she would have been foolish enough to say that unless it was a general perception among Labour Members of Parliament from the north-east of Scotland.
      I well remember the Scottish Grand Committee last year. The debate was optimistic. Perhaps the hon. Member for Aberdeen, Central (Mr. Doran) also remembers it. I could quote other passages from it. However, the theme that the industry would advance from a base of stability because the Chancellor had abandoned the idea of a sharp change in the tax regime was shared by all Committee members.

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      The industry did not sleepwalk into a tax change. The shock of it is therefore all the greater. I do not oppose changes to the fiscal regime. The Government are entitled, in the public interest, to change a fiscal regime if they choose. However, there are two absolute requirements for such a change to be in the public interest. The first is consultation. That is especially true of the industry, with which a framework of consultation has been established. In all conscience, one cannot establish a PILOT initiative based on consultation to extract more, necessary investment in the industry, yet proceed with an unexpected tax change without consulting the institution that was set up to deal with such matters.
      I am open to contradiction from the Financial Secretary, but I believe that not only was the tax change not discussed with the industry through PILOT, but that there was no prior discussion with the Minister for Energy or the Secretary of State for Scotland. I believe that they found out about the tax change only a short time before the rest of us—probably on the morning of the Budget. If the Financial Secretary does not agree, perhaps she can tell us when Treasury Ministers consulted the Secretary of State for Scotland—who had a huge interest in the matter because of the employment implications of the change—and the Minister for Energy and Construction—who is responsible for general oil policy—about the tax change. I believe that they were not in a position to anticipate events. I base that strong belief on watching their reaction at the time. [Interruption.] The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) agrees with that. He was also present and he, too, saw their reactions.
      The second requirement is minimising the impact on jobs and investment. It is in the public interest to minimise the effect on jobs. Minimising the impact on investment is in the long-term interests of the Treasury, let alone the rest of us. It is vital that the North sea oil show is kept on the road through investment. With the right approach to fiscal policy and the industry, we are only halfway through the North sea oil and gas story. It is reasonable to assume that there is as much to be extracted in future as in the past 30 years. Deciding that now is the time for a short-term, smash-and-grab raid to maximise revenue in the next few years is a fundamental error, not only for the public interest but for the Treasury and economic interest.
      In previous debates in the Chamber and in Committee, the Financial Secretary outlined the model that she had followed, probably without sharing it with her colleagues in the Department of Trade and Industry. The model was based on the change being good for the industry. Indeed, she claimed that it would be a boost for the industry. However, on the previous day, in the Scottish Grand Committee, the Secretary of State for Scotland said that the Government were trying to minimise the impact on jobs. If the Treasury had shared the wonderful news of a boost for the industry, why was the Secretary of State trying to minimise its impact? The Secretary of State for Scotland was simply acknowledging the reality that the overall impact of a tax change that means, in five or six years, taking £1 billion out of the industry, will be negative, regardless of the skill with which the effects are distributed.
      We are simply debating the extent of the negative impact. Will it mean the loss of 50,000 jobs, as the United Kingdom Offshore Operators Association suggested, or less, as other sources have predicted? The Government
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      have criticised the industry for the estimate of 50,000 jobs. It will be jeopardised in the longer term by a decline in investment. Surely the Government's argument that a £1 billion tax raid is a boost to jobs and investment is far more fantastic than the argument about the extent of the negative impact. The Financial Secretary owes us a reasonable explanation of the exact basis for the Treasury's belief that the Government can take so much out of the industry yet have a positive impact on jobs and investment. That is daft, without credibility and ignores the substantial anxieties of hon. Members who represent those who work in the industry about the impact of the tax change.
      Earlier, I said that there were arguments for the Government changing oil taxation, but with consultation. Key issues must be tackled. The hon. Member for Waveney (Mr. Blizzard) raised one: the well-rehearsed question of financing charges and the way in which a new entrant, who will not qualify for the full capital allowance relief, can be protected. How will such a company be protected so that it can exploit opportunities? Bringing in new, smaller operators to exploit and increase the overall extraction from the North sea is meant to be Government policy. That matter has not been properly tackled.
      I was pleased to read in today's edition of The Press & Journal that the hon. Member for Aberdeen, Central acknowledges exploration drilling as a serious concern. That has been a theme of every speech that I have made about the matter in the past few weeks. Any reasonable Government would be worried about the downturn in drilling activity in the North sea in the past few years. In 1996 there were 112 exploration and appraisal wells; last year the figure was 51.
      Exploration is largely financed from cash flow. It is therefore difficult to conceive that the measure will do anything other than further depress an already declining statistic. Now would be the moment to introduce a further uplift for exploration and probably appraisal drilling. There are mechanisms and means to do that. I suggested such a method in an amendment. However, for technical reasons, the proposal might be considered a subsidy, and the amendment was not selected. However, providing an uplift can and should be done. If exploration drilling continues to decline at the same rate, we will mortgage the future of a possible further 50 years of substantial oil and gas activity to gain an extra few billion pounds to add to the £160 billion—more than £30,000 for every man, woman and child in Scotland—that successive Chancellors have already extracted from the North sea.
      It would be common sense for the Financial Secretary to answer the points about financing charges and the impact of the tax change on exploration drilling. She should also answer the genuine worries about the provision, which has not been thought through, has caught the industry by surprise, is likely to have a huge impact on jobs and investment, and will mortgage the future of an enormous industry that is responsible for a huge amount of overall capital investment in the United Kingdom. It will sacrifice jobs in Scotland and elsewhere for short-term gain by the Chancellor of the Exchequer.
      7 pm
      The hon. Member for Aberdeen, Central talked about the past and about Budgets in which there had been unexpected tax rises. Hon. Members—not he or I, because

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      we were not here—can go right back to the early 1980s, when one of the first actions of the Thatcher Government was to increase oil taxation. Given that the previous Secretary of State for Energy had been Anthony Wedgwood Benn, it was interesting that the Thatcher Government wanted to levy taxes at a higher rate than Tony Benn had done.
      The accusation that was always levelled at people who had doubts about the approach to the industry was not just about individual tax rises, because they could sometimes be justified, given the shape of the industry, the price of oil and the windfall profits being made. It involved the underlying assumption—in relation to many of the moves and manoeuvres taking place—by the Treasury and the then Department of Energy that North sea oil and gas was a short-term story and that it would be there for 10, 15 or 20 years, then it would all be over bar the shouting. Many of the tax changes of that period and later were predicated on that short-term assumption.
      Many people in the industry believed—as did the hon. Member for Aberdeen, South and I—that over the last few years there had been a realisation, through the PILOT initiative and other schemes, that this was a long-term game, worth playing over the long term because there was huge potential for maximising jobs and investment over the next few generations. More than anything else, this foolish tax change has damaged the credibility of the notion that, at last, some long-term thinking and planning was going into the industry, to maximise the benefits over a long period of time.
      This is not a matter of passing an amendment or getting a tax measure into a Finance Bill, although I know that the Minister will be focusing on that at the moment. This is much more than that. It is about the future of the whole industry and about the jobs of many of our constituents.
      Mr. Luke: I rise, as I did in Committee, to make a contribution to this debate. I say to the hon. Member for Arundel and South Downs (Mr. Flight) that I am one of those Scotsmen who is happy to stand up and defend the implementation of the 10 per cent. supplement proposed in the Budget. I take my daily dose of Irn Bru, so I might not be as soft as some of the more feeble Scots in the House.
      Contrary to what has been trailed through the press by some of the major companies, I do not believe that the current changes have had any effect on jobs in the North sea oil industry to date; nor, perhaps, will they in the near future.
      Chris Grayling: Surely the hon. Gentleman does not believe that the kind of business changes that would inevitably lead to job cuts would have taken place in the eight weeks since the Budget. The impact of these measures will be long term, and they will result in fewer jobs and a lack of investment in the years ahead, not just in the short term.
      Mr. Luke: I am happy to come back to the hon. Gentleman on that, because that was exactly the point I was making. People in the press and in multinational companies are already talking about job losses. Indeed, an hon. Member remarked in Committee that he had heard
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      from another hon. Member that there had already been job losses because of these changes. I accept the point made by the hon. Member for Epsom and Ewell (Chris Grayling), but I do not believe that that is the case or that it will be the case in the short and medium term.
      As many hon. Members have already said, we need to ensure that the future of the oil industry is safeguarded. We have to do that against the changing scenario in the North sea, in which different types of company are becoming involved in exploration and in the production of oil. The hon. Gentleman makes a worthwhile point, along the lines of other points that I shall make in my speech.
      I do not believe—as was suggested by the hon. Member for Arundel and South Downs—that we are attacking the integrity of the tax regime. This is the first major change in tax to be introduced in this area in the last five years. Although it has been talked about as a short-term smash and grab, I believe that the Government's proposals will create a pool of revenue that hon. Members across the House have argued should have been put in place a long time ago. There has been constant talk of a windfall tax, to make sure that the massive profits made over many years were taken into account and used for the benefit of the taxpayer.
      Mr. Flight: The hon. Member for Aberdeen, Central (Mr. Doran) referred to the last major change, introduced in 1993, when the Minister responsible was, I think, my right hon. Friend the Member for Fylde (Mr. Jack), who served on our Committee. This can be checked with my right hon. Friend directly, but I believe that those changes, though significant, did not have a retroactive impact on the new fields that had previously been invested in; they were changes for the future. There was, therefore, a major difference between what happened in 1993 and the changes that are now being proposed.
      Mr. Luke: I take the hon. Gentleman's point. He has made many illuminating points during this debate. I was trying to suggest that this measure does not represent an attack on the integrity of the tax regime. If the change in 1993 was the last major change to the North sea oil tax regime, one tax change nine years later is not a big change. We are setting up a scenario which we hope the companies and organisations involved in the North sea will be able to live with and adapt to in the future.
      Sir Robert Smith: The hon. Gentleman has to accept that a dangerous signal is being sent—not just to the oil and gas industries, but to others such as the biotechnology industry—about the integrity of the tax system. The oil and gas industries feel that they were lured, through the operation of the PILOT scheme, into making major investments last year, and that they are now being hit by a tax that they cannot escape. They feel trapped by it, because they were lured into making investments in the first place. Had they steered clear of the United Kingdom, they would not have been hit by these taxes.
      Mr. Luke: Many large multinational oil companies have already taken the decision to move out of the North sea. That is part of a corporate plan, given the maturity of the oilfields there. The issue is how we encourage the smaller companies to break in and take on the mantle of the large multinationals. Given that those smaller

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      companies are not arguing against the changes in the supplementary charges—or at least, not shouting as loudly about them as others—I believe that they will see the opportunities available.
      There have been recent examples of small companies taking on that mantle, and making finds left in parcels of the North sea left by the multinationals, such as the Buzzard field. The large reserve of oil discovered there—1.1 billion barrels has been proposed—was obviously one that the multinationals had walked away from, leaving the smaller companies to carry out the exploration and make the connection with those reserves.
      Changes in the companies working in North sea oil involve the bigger companies—because of their corporate nature—planning to move their corporate investment to other, more profitable, less difficult, lower-cost investment options, because of the nature of oil production. The hon. Member for Gordon (Malcolm Bruce) said that it was not difficult for those companies to do so. My response is that it is inevitable that they will do so, given the maturity of the field and their own corporate plans.
      We need to ensure that we create the conditions to encourage newer, leaner companies that are more innovative, enterprising and cost-effective, and more willing to take risks, to take up these opportunities and to become more fully involved in this area. There is a history of 20 or so newer, smaller companies becoming involved in the North sea, making finds and carrying on the tradition of employment and production that the big companies started.
      That activity has been mirrored in other fields. There has been evidence of that kind of change in the gulf of Mexico, and there are indications that the trend will continue. Last week, a bumper find was announced in the Buzzard field. That had recently been abandoned by one of the bigger multinationals, which moved on to more profitable fields, given the higher costs that such companies carry, and was explored by a smaller company. The potential of 1.1 billion barrels of good oil over the next 10 to 15 years was an opportunity spurned by bigger companies taking easier options elsewhere.
      The hon. Member for Banff and Buchan (Mr. Salmond) mentioned that we are only halfway through the life of North sea oil. I believe that there will be more finds like the one that I described. A common theme of hon. Members' contributions is the need for the Government to ensure that all the areas that need to be investigated are investigated, in view of the number of jobs and livelihoods that depend on the industry. Much useful information has been provided by UKOOA—the United Kingdom Offshore Operators Association—including a recent update on employment. Because of history and the traditional view of Dundee's role in the economy, my area spurned many chances to be involved early on in North sea oil, but many people in Dundee are nevertheless involved in servicing the rigs and in innovative engineering to provide access to the difficult fields.
      We must allow smaller companies to become involved. Like many hon. Members, I have had discussions with the industry. The big fear is that companies that hope to become more involved in exploration will not be able to do so because of the costs. In a recent article in Scotland on Sunday, the American head of a European investment company was quoted as saying that there was great
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      potential for smaller companies to become involved in the North sea. The problem was the financing cost. Like many other hon. Members, I believe that the Government should consider offsetting the financing costs against the supplementary increases, to provide more impetus for companies to become involved. That possibility was raised in the newspaper article, which was supplied to my hon. Friend the Economic Secretary at the time.
      The Government must provide incentives to ensure that the interests of North sea oil and employment there are maintained, and that investment and production are stimulated. Although I believe that the Chancellor is justified in his revenue-raising initiatives, he should not jeopardise the good work undertaken—I have been involved in several discussions through the all-party oil and gas group—by the Department of Trade and Industry and its work with the industry. The PILOT programme was a means of encouraging future exploration, and I hope that that work is not wasted.
      I congratulate my hon. Friend the Member for Waveney (Mr. Blizzard) who, is in his role in the all-party group, has been discussing with the Minister the future role of the group, and asking questions about the tax issue. I hope that we can get together to make sure that the work of PILOT is progressed. At the next meeting of the group, we will consider the way ahead for PILOT. That is a discussion topic that deserves to be taken further.
      Hon. Members in all parts of the House have urged the Government to confirm that they are taking seriously the need to nurture the industry by ensuring that the issue of the abolition of royalties is moved up the agenda. I hope that they will soon announce the date on which deliberations will begin and when the abolition of royalties will come about. That would send a clear signal that the Government want to engage with the industry on a joint agenda.
      The situation in the North sea is changing, and the Government should be monitoring it. There is a movement away from the larger multinationals being involved—they are being replaced by smaller, more investment-oriented companies. As someone who comes from a city that used to be known as Juteopolis—in other words, a one-industry city—I and the other citizens of Dundee know the problems and the despair that ensue when an industry disappears. It is inevitable that North sea oil will eventually be exhausted. We must encourage smaller companies that want to make the investment to start planning the future for energy and energy renewals in the UK.
      In Committee, the Government gave a commitment to listen, to take comments on board and to respond positively. I look forward to the Minister's reply. I hope that the Government will make it a top priority in our economic agenda to prolong the life of the North sea industry and the livelihoods connected with it.
      7.15 pm
      Mr. Mark Hoban: Even those of us who have not had a long association with the oil industry, unlike many hon. Members who have spoken today, have learned a great deal from the discussions about taxation of North sea oil during the progress of the Bill. The matter has dominated discussions both on the Floor of the House and in Committee, on which I had the good fortune to serve.

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      Two key facts emerged from the discussions of oil taxation. The first was the high preponderance of international companies that are based in the North sea—two thirds of the companies operating on the UK continental shelf are foreign-owned. The second was the great flexibility and mobility of assets in the North sea. The UK continental shelf is perceived as having a highly liquid market for its assets. As a consequence, foreign companies investing in that market can adopt a portfolio approach to the way in which they manage assets across the world, and move in and out of oil-producing areas, depending on the costs that they would incur by doing business in those areas. Clearly, tax costs must be taken into account in that equation.
      It is interesting to compare the present debate with the one that we had on the previous new clause, where we were rightly concerned about subsidising an industry that was footloose in the way in which it moved its operations around the world. In this case, we are discussing a change in the taxation regime which acts as an incentive for companies to leave this country and conduct their operations elsewhere. That is a quite different situation from the one that we discussed a little earlier.
      Given the extent to which many independent companies are dependent upon debt finance to exploit oil reserves, my concern is that the way in which the supplementary charge is structured—excluding debt finance from costs that are allowable to offset the liability—means that we are penalising companies that invest in the market. New clause 1, which gives the opportunity to offset those debt finance costs against the revenues that companies earn and which are covered by the supplementary charge, is a valuable amendment to the Bill.
      Coupled with that, companies paying the supplementary charge will have difficulty in getting credit for the additional supplementary charge in tax computations submitted in the United States or France. Ensuring that interest is deductible from the computation of the supplementary charge will make the process of deducting the tax in the companies' home country's tax computations much easier.
      It is disappointing for the industry that the Government did not seek advice from the Internal Revenue Service much earlier in the process. Before they introduced a charge in the UK, they should have thought in much greater depth about the international impact of that charge, and obtained clearance from the US.
      An interesting aspect of the rationale for the supplementary charge was identified by the hon. Member for Aberdeen, Central (Mr. Doran), when he mentioned that a few years ago it was inappropriate to introduce a windfall tax because oil prices were low, but now that they are high, it is okay to do that. That is a convenient justification. It reinforces the argument for a sunset clause on the supplementary charge that is the subject of other new clauses.
      The new clauses would limit the timing of the operation of the supplementary charge, and would bring it to an end when oil prices are low, and when the good times that North sea oil companies are apparently enjoying at the moment have come to an end. We could then consider afresh the impact of the supplementary charge. In the meantime, we could see whether the United Kingdom
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      Offshore Operators Association was right when it said that this tax will have a negative impact on jobs, or whether the more optimistic forecasts by the Government and the hon. Member for Dundee, East (Mr. Luke) are correct and that, miraculously, a tax that takes £0.5 billion out of our economy every year will be neutral and will create jobs.
      The new clauses address some of the issues at the heart of the supplementary charge. The Government would do well to listen to the concerns that we have raised, reflect on them and consider whether the new clauses are the right measures for us to take to ensure the future vitality of the North sea oil industry.
      Chris Grayling: I support these amendments and new clauses with slight misgivings, because although they will take the sting out of a thoroughly unwelcome measure, I still believe that this new taxation is ill-thought-out, and I would much rather that it was not in the Bill.
      My biggest concern about and lack of understanding of what the Government are trying to do involve the impact that this tax will have on the manufacturing sector. This industry employs 300,000 people across the United Kingdom, and it represents 6 per cent. of Scotland's work force alone. The new tax is being introduced at a time when manufacturing in Scotland is at an historically low level, and when manufacturing across the UK has been through a number of years of extremely difficult business circumstances. The industry has suffered from the adverse value of the pound and a deluge of regulation and ill-thought-out measures from central Government, and it operates in a world in which it is increasingly easy for manufacturing companies to relocate to other parts of the globe where the cost bases are fundamentally different from those in the UK.
      Malcolm Bruce: What the hon. Gentleman is saying is obviously true, but it is even easier than he suggested, because many of these companies have already relocated to other parts of the globe. It does not take much to switch the investment. It does not require a major switch of funds. It is merely a matter of redeploying their existing assets.
      Chris Grayling: The hon. Gentleman is right.
      Mr. Luke: Not only is it easy to redeploy assets, but many of the companies in the North sea oil industry took corporate decisions well before the Budget to shift to much more profitable fields where the higher costs are covered by the larger profits that they will make out of fields that are easier to access.
      Chris Grayling: The point that I was making about manufacturing is that, as well as the oil operators, there is in the UK a substantial industrial sector that provides the industry with components, support and other services and products. Inevitably, the consequence of levying a charge on the industry of hundreds of millions, if not billions, of pounds, thus reducing its margins and making business ventures less viable and less economic for companies to pursue, is that they will seek ways to cut their costs. One way to do that is to source the components that they use from other parts of the world where the cost bases are lower. That will have an adverse effect on employment and manufacturing businesses across the UK.

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      Hon. Members should not take my word for it. The chief executive of the Aberdeen and Grampian chamber of commerce said:
      "There is no doubt that there will be a knock on effect on jobs. These changes will not just affect the oil majors but the countless small businesses operating in the supply chain."
      This is not merely about the major companies operating in the North sea: it is also about the huge industrial sector that supports them. As a result of the combination of this and other Budget measures, such as the increase in employers' national insurance contributions, there is no realistic way in which this levy of a huge amount of money on the industry can avoid having a serious effect on jobs in Scotland.
      The Government's approach in levying this new tax is ill-thought-out. I fear that the consequences will be far greater than they pretend. I listened to Labour Members who defended the tax, and realised that they do not understand the consequences of what is happening. It is simple maths. They cannot levy hundreds of millions of pounds on an industry, reduce its margins, as will happen as a result of this tax, and expect that not to have an effect on investment and jobs. That is basic business arithmetic. Our manufacturing sectors have suffered badly in the past few years, and many companies are under pressure, so this is precisely the wrong moment to take such an adverse tax step.
      Sadly, I am certain that the Government will not change their approach, but I hope that at the very least they will take note of these new clauses and amendments, which would take the sting out of this measure. They would put a time limit on the effects of the taxation, so investment decisions over the long term could be taken in the context of a point of termination. I urge the Minister, for the sake of manufacturing industry in different areas of the country, not just in Scotland, to accept the new clauses and take the sting out of what is otherwise a thoroughly unwelcome measure.
      Sir Robert Smith: I welcome a chance to take part in the debate. These new clauses have allowed us to return to this subject on Report. It was discussed in Committee on the Floor of the House and in the Standing Committee, and this is a welcome opportunity to see how the debate has moved on. The vocal support of Labour Members at the start of the Budget debates seems to have melted away on Report. We have heard far more thoughtful contributions, and even those who support the Government's general approach seem ready to recognise that some of these amendments make serious points and raise serious issues.
      The hon. Member for Epsom and Ewell (Chris Grayling) made a valid point about the importance of the supply chain to the North sea oil industry—the manufacturing that is supported by it and the onshore jobs not just in Scotland but throughout the United Kingdom. Some companies are finding life difficult. They do not necessarily want to be named, but some companies in my constituency are already concerned. When orders are cancelled, the cash flow of manufacturing companies is hit.
      The Treasury needs to understand more about the structure of the industry. When major companies are hit by indecision and uncertainty about whether royalties will be abolished, investment decisions are put on hold. For those companies, that is a nuisance, an irritation,
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      a frustration and a worry, and it affects their bottom line but they survive because their cash flow can take such a hit. Down below them in the supply chain are many companies whose everyday cash flow is crucial. They cannot switch off the business for a few months while the Government sort out the tax regime and the major investors decide whether to invest. The Government must consider the knock-on effect on the many small businesses that supply the industry. There has been much more outsourcing of functions. Investment houses are much more involved, and the supply chain is much more dependent on a continued flow of business.
      Many hon. Members have referred to the fact that this measure has been a surprise and a shock to the industry. The Treasury still seem to be under the illusion that that is a fiction or an elaborate hoax, and that it was not a shock or a surprise because the industry saw it coming and understood what was happening. I assure the Treasury that there could not be that many well-paid actors giving such a consistent message from many levels of management and from many different businesses in the industry. Many people have worked closely with PILOT, with Logic and with the taskforce. There is genuine shock and surprise, and it would be helpful if the Treasury recognised that. Whether it intended to surprise the industry, or whether it thought that it had surprised the industry, the reality is that it has surprised it.
      There must now be some damage limitation, and some undoing of that damage. That is what these new clauses would do. New clauses 2 and 3 on termination and new clause 4 on transition would relieve the shock and the sense of betrayal. They would also deal with the fiscal instability by getting the message across that if companies made the investment last year because of what they got out of PILOT, this year they can get some of the relief on that investment against the new tax. Similarly, a three-year period gives a chance for further consultation with the industry, a chance to address these concerns and not to have hit the immediate Red Book figures. My hon. Friend the Member for Gordon (Malcolm Bruce) made a very valid comparison with whisky, in that overtaxing can kill the goose that lays the golden egg.
      7.30 pm
      Given the surprise felt by the industry, we need an explanation from the Treasury on when it chooses to consult and when it does not. When debating the timing of the Finance Bill and the business motion relating to it, the Leader of the House said:
      "I think that two full days in total to consider the remaining stages is perfectly adequate provision. It is adequate partly because this Finance Bill has already been through more consultation with industry, outside bodies and financial services than any previous one. Many of the clauses were seen in draft form by the industry, which may partly explain why the Opposition ran out of things to say in Committee."—[Official Report, 24 June 2002; Vol. 387, c. 710.]
      The oil and gas clauses were not seen by the industry before the Finance Bill was published. It might be helpful if the Financial Secretary would outline the Treasury's thinking in consulting some sectors and industries prior to the Budget to allow them to understand the measures. Why were there no draft clauses on which the oil and gas industry could consult? Will she put in the Library what percentage of the Finance Bill honoured what the Leader of the House told us only the Monday before last?

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      When it comes to sending strange signals and conflicting messages, the industry is entitled to argue that PILOT psychologically sent a message that this was its way of engaging with Government and that it was engaging with the whole of Government, not just a part. The Government pride themselves on encouraging joined-up government, but the signals from PILOT were about the need to obtain investment and deal with fallow fields. There was a response, and the PILOT objectives were being met, so the shock felt is quite understandable. That is reinforced by what the Secretary of State for Scotland said in Scottish questions on 11 June in answer to a question from the hon. Member for Banff and Buchan (Mr. Salmond):
      "As part of that review, the Treasury was represented on the oil and gas industry taskforce and on Pilot, which I chaired for about two years, by no less a figure than Sir Steve Robson. At that time, very few Treasury officials were ranked higher than him. It was the discussions within Pilot that led us to reach a decision on the North sea fiscal regime that is designed to help companies which are investing in the North sea."—[Official Report, 11 June 2002: Vol. 386, c. 707.]
      If the Secretary of State for Scotland was under the impression that PILOT and the Treasury were closely linked and that there was a link between what PILOT was up to and the fiscal regime, it is little wonder that the industry thought that messages were coming from that engagement.
      Previous speakers have alluded to what was said last year about the tax regime and the messages sent out in the north-cast of Scotland. The Press & Journal—the voice of the north—serves the north-east of Scotland. It serves Aberdeen, the capital of the oil industry for Europe. The paper wrote in its editorial about the Prime Minister's visit to Aberdeen in May 2001, in the run-up to the election. It said that the Prime Minister made it clear in his speech in Aberdeen, South that there were
      "no plans for a windfall tax on the oil companies, and accepted the offshore industry's need for a stable tax regime.
      He said:
      "We have been strongly supportive of the oil industry and oil production and I'm well aware of the fact it is of crucial importance to Aberdeen."
      The Press & Journal said in its editorial:
      "His insistence that there will be no windfall tax on North Sea oil operators is a major relief not just to the multinationals, but to all whose prosperity and services depend on a healthy oil trade."
      If, just before the general election, the Prime Minister promises that there will be no windfall tax, and then within the year the Chancellor introduces a new tax regime that is even worse than a windfall tax because it is for ever, regardless of the price of oil, what kind of industrial policy are the Government pursuing? What is their long-term fiscal strategy for encouraging inward investment and a thriving investment potential for this economy?
      It was the Government's declared aim to lay to rest the fears that a new Labour Government would damage industry, but if every sector suddenly finds that the rug is pulled out from under it, and that promises are made just before elections and reneged on within the year, that does not create an investment climate that is conducive to long-term fiscal stability.
      Mr. Salmond: Let us dwell on that point for a moment. If we assume that the Prime Minister was telling the truth
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      before the election last year, that would destroy the Treasury argument that this was part of a continuous process from 1997, culminating in this tax change. Or we could conclude that the Prime Minister was not telling the truth, but even Treasury Ministers would not want to go down that road, would they?
      Sir Robert Smith: It would be extremely helpful if the Treasury could clarify the Secretary of State's view of PILOT and the Prime Minister's comments in the run-up to the election. Or was the right hon. Gentleman's speech simply a message designed to be heard in the north of Scotland where votes were important so that Labour Members could be re-elected in marginal seats? That is not the way to deliver a stable, long-term economic environment, but it is a dangerous way to mislead people. Once people feel misled, the damage must be undone, which is, I hope, what the Treasury is looking to do. However, its response so far to the debate seems to be to put pressure on the industry. The Treasury seems to be saying that if the industry complains, it will drag its heels on the other half of the package.
      If this proposal was thought out on day one and abolishing royalties comprised part of the package, why on earth has the consultation not started? Why on earth is there no consultation paper on the abolition of royalties? It was something that the Chancellor promised, to dress up the presentation of the Budget, yet we still hear nothing about it.
      The most frightening thing about the Treasury's lack of understanding is how it thinks that someone can make investment decisions about a field that is subject to royalty tax when he does not know what is happening to royalties. It beggars belief that the Treasury believes that it can sit on this measure without it doing any damage. Every day is a delay when a decision needs to be made. The longer the wait, the worse the situation becomes as people find other places to make their financial investments.
      Amendments Nos. 42, 43 and 44, tabled by the hon. Member for Banff and Buchan, provide a chance to undo the damage completely. It would be impressive if, when those votes take place tomorrow, the House could reject this part of the Finance Bill. We could go back to square one, have a proper consultation with the industry, with proper draft clauses, as the Leader of the House thought that the Government were doing with other sectors of industry. In that way, we could have a long-term, stable, clearly thought-out policy for the future of oil and gas.
      This does not matter so much at the very top. The middle and senior managers whose job it is to manage an asset in the North sea are the ones who have been betrayed. They have been telling their bosses in France or America that they are a good bet, they have a good climate, a taskforce and PILOT. They have been saying that they have engaged with each other, that a logical way of working has been established, that they have tried to get the industry to work together, that they have learned a lot of lessons and that much good has come out of 1997. As the hon. Member for Banff and Buchan said, only a year ago many of us were praising the Government for what they had done. The middle and senior managers feel betrayed because their bosses in France, America or elsewhere in the UK are saying, "You got the money out of us under false pretences. You said that there was no fiscal risk and that the bet was long term. We backed your judgment and you have let us down because you have not

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      delivered." That delivery is the Government's failure—it has sent the wrong signals. In fact, those people probably regret ever becoming involved in PILOT and changing the culture of the industry. It would have been better if they had remained isolated and carried on as before because they would not have exposed themselves.
      It will be a sad outcome if the Treasury does not find a way of engaging in the debate on financing costs, royalties and long-term stability. PILOT requires the commitment of individuals and industry money to make it work. It is quite difficult to motivate people after such a bad hit. Anything the Financial Secretary can do to smooth the waters and rebuild confidence will be most welcome, but she must realise that there has been a genuine shock. The new clauses provide a chance for the Government to show that they are listening and willing to address that shock. They provide an opportunity for the Government to address the point about financing costs, which has been raised on both sides of the House.
      The Treasury must look at the smaller companies who look to lease assets to exploit smaller fields and ensure that the tax system is not a straight hit on those companies, with no compensation to encourage them to maintain their projects. We have real potential in terms of the technology of floating production, which is an exportable technology. If we can develop that expertise, nurture it and maintain it, we can take it elsewhere.
      There has been talk about major companies walking away. However, the crucial thing about major companies being here as long as possible is that they often own the central asset to which many small fields are tied back, and the tax regime and Government stability must maintain those central core assets if we are to maximise the exploitation of the North sea. I urge the House to back the amendments and new clauses tabled in the names of Conservative and Liberal Democrat Members, which address what is a tax too far.
      Ruth Kelly: This has been an interesting debate. The hon. Member for Arundel and South Downs (Mr. Flight) has accused the Government of unwise and unnecessary taxation. He attacked the good faith of my right hon. Friend the Chancellor, when he warned the Opposition not to fall for the propaganda of the oil industry. However, it seems to me that the hon. Gentleman, who speaks for the Opposition, has fallen hook, line and sinker for that propaganda. In the process, he has accused the Government of undermining the integrity of the tax system.
      Last year—even after investing £4 billion—oil companies generated net cash flow of £10 billion from the North sea, after all the taxes that they paid. I do not accept the argument that an additional annual tax burden of, say, £600 million must reduce investment in the UK because there are no longer sufficient funds to maintain it.
      The hon. Member for Banff and Buchan (Mr. Salmond) accused the Government of a short-term smash and grab raid. I tell him, as I tell other hon. Members, that the Government have consistently made it clear that the North sea tax regime needs to strike the right balance between securing a fair share of profits for the nation and encouraging investment.
      North sea oil and gas is a limited national resource. Oil companies produce oil and gas under Government licence, and the returns generated from that often exceed a normal
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      commercial rate of return. Furthermore, at times, producers make large profits simply due to movements in the world oil price. But the key point is that underlying rates of return are high, even when adjusted for short-term oil price movements. Every single major oil-producing country has a special tax regime to reflect the economics of the oil industry and to ensure that their country shares in the benefits.
      7.45 pm
      Mr. Salmond: When the Prime Minister told people in the north-east of Scotland immediately before the last election last year not to expect any windfall tax, was he unaware of the arguments that the Economic Secretary has just outlined or was he purely misleading people for electoral purposes?
      Ruth Kelly: The hon. Gentleman's proposal would result in a windfall tax on oil companies; a time-limited specific additional tax on oil companies. It is the Government who are committed to a long-term stable regime for the oil industry that is based on securing a fair share of the industry's resources for the UK citizen while making sure that there is a favourable climate for investment.
      Several hon. Members, including the hon. Member for Banff and Buchan, have difficulty in understanding the relatively simple concept that we can design a tax measure so as to promote future investment, while securing more revenue from the oil industry.
      Mr. Salmond rose—
      Ruth Kelly: If the hon. Gentleman will allow me to continue, I will explain how it works. There are two elements. The first is the investment allowance. That means that even with the supplementary charge, companies investing in new products will have higher post-tax rates of return than under previous rules. Secondly, in net present value terms, the benefit of the 100 per cent. allowance outweighs the additional tax for marginal projects. It is the effect on marginal projects that determines the effect on investment. Marginal projects will be encouraged by this change; the increased tax reduces the net present value of more profitable fields, as it is designed to do. But these are likely to go ahead in any event, so the combined package increases the incentive for oil companies to invest in marginal fields.
      Mr. Salmond: We need a bit of humility from the hon. Lady; some of us were working in the industry on these matters even before she was a Minister. Can we get back to the Prime Minister and the explicit undertaking that he gave to people in the north-east of Scotland that no such change was envisaged? Was he, at that stage, aware of the arguments that the Financial Secretary is making just now, or was he merely misleading people last year for electoral purposes? Can we have an answer this time, instead of a lecture?
      Ruth Kelly: The hon. Gentleman accuses the Government of imposing a windfall tax on the oil companies. We are determined not to do that; that is why we have carefully designed a package that promotes investment while securing a fair share of resources for the country's citizens. The package is designed to promote a

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      long-term stable fiscal regime for oil companies to operate in. I shall return to the perceptions of the oil companies in due course. I have spelled out in considerable detail to the House the investment criteria and the criteria that we took into consideration when designing these tax measures.
      Sir Robert Smith: Will the Financial Secretary explain why the Treasury chose not to consult on draft clauses and engage with the industry on them—as it has done, according to the Leader of the House, for other businesses—and instead chose to surprise the industry?
      Ruth Kelly: I will come on to deal with the element of fiscal risk, the perceptions in the oil industry and why we did not consider PILOT to be an appropriate forum to discuss those issues before the new regime was introduced.
      I was on the point of explaining the analysis behind our tax changes. A full analysis has been made of the impact on investment, and I have spelled it out in great detail to this House, including the criteria behind the analysis. The analysis has been open thereafter to public scrutiny and scrutiny by oil companies. I will not run through all the criteria used for the analysis again today.
      We looked, for example, at 108 new fields that were potentially commencing development over the next five years. We applied all the investment criteria that companies used to establish whether projects will proceed. We used the long-term oil and gas prices typically used by the industry when calculating those rates of return. The conclusion of all of our work—particularly that on new fields and incremental investment—was that, on average, the impact on marginal investment projects was positive.
      The oil industry broadly accepts that analysis. The industry differs over specifics, but broadly accepts that if we have a 100 per cent. capital allowance—which makes new investment in marginal fields more profitable—and combine that with a supplementary charge, there can be a positive impact on investment. The industry differs on the impact on fiscal risk and the stability of the long-term regime. We have heard interesting and thoughtful points made by hon. Members on that precise subject.
      I disagree fundamentally with the projections that the oil industry is now claiming to attach to the impact of our regime change. The hon. Member for Arundel and South Downs quoted industry figures for the fall in production, a forecast of 1.5 million barrels a day by 2010. He quoted figures on investment and jobs. The problem is that the industry was forecasting those figures before the tax changes. It is very difficult to say that the impact on jobs and investment is as a result of the tax changes when those forecasts were produced, apparently, before the industry had any idea of what those tax changes were to be.
      Chris Grayling: In April, Lord Browne said of the changes in the Budget:
      "Taken together those steps are likely to reduce investment and to hasten the decline of production."
      294
      Is the Financial Secretary suggesting that Lord Browne, whom I believe to be a man of integrity, is not giving an accurate picture of the truth?
      Ruth Kelly: I was saying that the oil industry was forecasting an impact on jobs and investment before the results of the tax changes had even been announced. It is completely inappropriate to tie that analysis to subsequent tax changes.
      Malcolm Bruce: If the industry is predicting a reduction in jobs, production and investment, why do the Government believe that increasing the tax burden on it will halt or reverse that process?
      Ruth Kelly: I have just been through the analysis supporting our conclusion that, taken as a whole, the tax package will promote marginal investment in new fields. In fact the industry is blaming decline—which was forecast—on tax changes that were designed to help investments with less attractive returns. That analysis is completely disingenuous, and I am surprised at those hon. Members who have fallen for it.
      I do not accept that the North sea regime is uncompetitive; on the contrary, tax rates for new fields remain lower than for all other major oil and gas producers. Combined with generous allowances, the low rate means that the United Kingdom will remain an attractive place to invest. All companies have their own hurdle rates of return and other criteria for investment. If they were prepared to invest here before the tax changes, there is no logical reason why they should not be prepared to do so now. In general, the tax changes should not reduce any returns below companies' own thresholds for investment; indeed, as I have explained, in some cases the changes may raise returns from marginal projects, so that they will be above the required thresholds in future.
      I am aware of the arguments, put forward after the Budget announcements, concerning the tax changes' impact on the fiscal regime. I am also aware of the argument—made by, among others, the hon. Members for Arundel and South Downs, and for Gordon (Malcolm Bruce), and my hon. Friends the Members for Aberdeen, Central (Mr. Doran) and for Waveney (Mr. Blizzard)—concerning the impact of any tax change on the perception of fiscal risk in the United Kingdom. I intend to deal with that specific issue in as much detail as I can. The industry is claiming that the fiscal risk has somehow increased since the Budget changes, and that although the changes would in principle lead to greater investment and more jobs, changing the perception of fiscal risk could impact on jobs and investment. Indeed, the industry is putting great stress on a predicted hypothetical 20 per cent. supplementary charge for future projects.
      Labour Members have discussed such issues with me, and they are fully aware that that is the industry's projection, and that it is using those figures to back its analysis of the impact on investment and jobs. However, the regime that we have introduced is a regime for the long term, combining a 10 per cent. supplementary charge with 100 per cent. relief for capital expenditure. That is the regime that we are debating today—not some hypothetical future regime. In fact, as far as is practical, fiscal risk has now been eliminated. Before the Budget, a substantial element of fiscal risk was clearly attached to North sea investment. The Government reviewed the

      295
      position in 1997–98, and when the review ended, we gave no commitment to maintaining an unchanged North sea regime. Indeed, as the 2001 Budget Red Book states, the Chancellor made it clear that he was considering "the next steps" on North sea taxation. We have made the changes required—
      Sir Robert Smith: Will the hon. Lady give way?
      Ruth Kelly: If the hon. Gentleman will allow me, I want to make a little progress. We have made the changes required to put the regime on a sustainable, long-term footing. It now provides a fair share of profits for the nation, and helps to encourage long-term investment. We introduced these changes only after careful analysis, and we are being absolutely clear in our commitments. Before this year's Budget, we gave no indication that we considered the North sea fiscal regime sustainable in the long term. We are now putting it on the record that, with the Budget changes, we have a stable regime into the next Parliament. We cannot be any clearer than that.
      Chris Grayling: The industry has not got the message. Lord Browne also said the following about those changes:
      "Their direct impact will be compounded by the fact that a change made in this way reduces confidence in the stability of the regime going forward and imposes an added element of risk on all future decisions."
      Ruth Kelly: I have set out what the oil industry is claiming, and our response to it. This is a long-term fiscal regime that is stable into the next Parliament—we cannot be clearer about that. As far as we are concerned, fiscal risk has reduced. Of course, it is up to individual companies to argue and decide, and to set their own fiscal risk criteria. We could never challenge an individual company's subjective assessment of fiscal risk, but if it is irrational and inappropriate, other companies will come in and make profits where profitable opportunities exist.
      Sir Robert Smith: Will the hon. Lady help to restore fiscal stability by explaining why the Government chose not to consult on the draft clauses before the Budget, and why the sector was not given the same opportunity to consult as other sectors? There must be some explanation as to why the proposal was sprung on people. Will she also recognise that, whether or not it was rational, the people involved were genuinely surprised?
      Ruth Kelly: We have already debated these matters at length. It was clear that, in the late 1990s—when the matter was first put out for consultation—two different regimes might apply, and we consulted on that basis. It became increasingly obvious that one of the policies was inappropriate, because of the time that had elapsed. The hon. Gentleman might agree that it is slightly odd to consult on the basis of one possible remaining regime. We have designed a regime that clearly takes into account investment needs, jobs and growth in the North sea, Scotland and the rest of the United Kingdom. Moreover, we have planned for the future with a long-term, stable fiscal regime. We cannot be any clearer about our intentions.
      Mr. Salmond: On the question of people being taken by surprise and the careful analysis of the impact on jobs,
      296
      did the Treasury consult the Minister for Energy and the Secretary of State for Scotland on this matter before the Budget, or on the morning of the Budget?
      Ruth Kelly: Of course, Ministers and officials from different Departments have regular conversations about the oil industry, but I hope that the hon. Gentleman will agree that tax matters and tax changes are a matter for the Chancellor. The real issue that has rightly been raised today by my hon. Friends is the question of why we did not consult within the framework of PILOT, an organisation that was set up to encourage investment in the North sea. The Government accept that PILOT has a very valuable role to play in discussing issues of concern to the industry, but it—
      Mr. Salmond: Will the hon. Lady give way?
      Ruth Kelly: I have given way to the hon. Gentleman many times, and I must make progress. I will doubtless give way to him later on in my speech.
      PILOT is not, and never has been, the appropriate forum for discussing tax; indeed, the position has been clearly set out. I think that it was the hon. Member for Arundel and South Downs who mentioned Steve Robson, who was present at the very first meeting of the oil and gas industry taskforce, which became PILOT in due course. At that meeting, Steve Robson made it clear that taxation was a Budget issue, and was not for consideration by the taskforce. PILOT, and the taskforce, always operated within that framework. PILOT's terms of reference refer explicitly to working within the parameters set by Government policy. Of course, PILOT sometimes deals with administration and the efficient operation of the tax system, but it was explicitly made clear that it was not for PILOT to consider the quantum of taxation of the oil industry.
      Sir Robert Smith: The chair of PILOT for two years is now Secretary of Scotland, and she made it clear at Scottish questions that it was from PILOT that the tax regime was developed.
      8 pm
      Ruth Kelly: PILOT has always been concerned with legitimate questions of tax administration and implementation, but it was made clear in its terms of reference and set out at its first meeting that it was not the forum for discussing the quantum of taxation, which was an issue for the Chancellor that should be taken forward with the industry in the normal way.
      I wish now to deal with some specific concerns that have been raised in this debate. In particular, many hon. Members raised the issue of financing costs. New clause I would allow financing costs to be taken into account in the calculation of the profits base for the supplementary charge. The new clause says that the costs would be allowed to the extent that the existing provisions referred to—section 494—permit them to be allowed. That is on the false assumption that that resolves the problem of manipulation of borrowings to minimise the effect of the charge. It does not.
      My hon. Friend the Member for Waveney asked whether I would be able to put on record the precise arrangements that companies use to take advantage of the

      297
      ring fence and the current disallowing of finance costs, and why we could not also apply that to the supplementary charge. I shall do my best to make the position clear, although I shall of course be willing to follow up later if he feels that I have not made the position sufficiently explicit tonight.
      Section 494 restricts interest deductions against profits arising inside the ring fence to the extent that the money borrowed has been used to meet expenditure incurred by the company in carrying on its trade of producing oil or gas in the North sea. So the borrowing cannot be for downstream operations or some activity overseas. That is of course wholly sensible.
      Essentially, what section 494 does is to set an upper limit on borrowing inside the ring fence based on the amount of spending in the North sea. What it does not do is to prevent the company from choosing to borrow for North sea purposes rather than other purposes. What it does not do—and neither do any of the transfer pricing rules that apply to finance costs—is to prevent a company from borrowing heavily, or even exclusively, to fund its ring fence activities, leaving other activities of the company, or the group of which it is a member, to be financed in other ways.
      It is accepted that some groups, which are profitable in the North sea and unprofitable outside, will have already borrowed up to the limit allowed by the present rules. However, others will not have exercised that capacity and would be able to increase their borrowing further. With a higher rate of tax inside the North sea ring fence than outside, there will be a considerable additional incentive for companies to arrange their borrowing in that way. However, it is not just the potential for further shifting of borrowing that is of concern: it is also the current uneven distribution of debt within companies and groups.
      It is clear that if new clause 1 were to be accepted the yield from the supplementary charge would be significantly eroded and the North Sea regime would fail to give a fair return to the nation from profits derived from a national resource.
      Malcolm Bruce: The Minister is giving a fair explanation of why the Government would apply that regime to companies that have a wide range of interests nationally and internationally, upstream and downstream. It does not however answer the issue for those companies that do not have any of those offsets and that are investing by means of finance for marginal projects in the North sea. Those companies have no downstream and no offset, and they cannot even benefit from the full capital outlet. Cannot the Minister accept the case for varying the provisions in the Bill for those companies?
      Ruth Kelly: I accept that finance costs are a cause of concern, especially to smaller companies. However, it is not possible to distinguish, company by company, those companies for which it is a real concern and those that might use the additional latitude to rearrange their borrowings. What is clear is that the solution cannot be just to allow all finance costs in computing the new supplementary charge. Any alternative approach would need to ensure that the overall yield from the North sea—both ring-fence corporation tax and the supplementary charge—is maintained.
      298
      There are alternatives to allowing finance costs to be set completely against the supplementary charge that the Government are willing to discuss with oil companies. For example, we could try a system of apportioning finance costs so that those used for North sea purposes would be allowable against the extra charge. However, we must have a fair system that does not penalise those companies with least scope to manipulate their borrowings and does not lead to a reduction in the overall yield. We have already contacted oil companies with certain proposals that they may wish to discuss with us. I hope that that gives some comfort to my hon. Friends and other hon. Members that we take the issues very seriously.
      New clauses 2 and 3 would bring the supplementary charge to an end after just three years. That is totally unacceptable. I shall not rerun the argument that that would be a windfall tax on oil companies, not the long-term fiscal regime that the oil industry needs.
      Mr. Salmond rose—
      Ruth Kelly: I will not give way to the hon. Gentleman, because I must make some progress.
      I cannot accept new clause 4 because it would do nothing to increase investment in the North sea, but would simply hand money back to companies that have made very good returns from the sector in recent years and, as I said in Committee, will continue to do so when the changes in the Bill are enacted. It seems to have been forgotten that this tax is not like petroleum revenue tax. It is not a tax on individual fields. It is a tax that applies to company profits in the North sea—profits that have been shown to have far exceeded those of other industries since petroleum revenue tax was abolished for future fields in 1993, even with the effect of oil prices stripped out.
      Several hon. Members have questioned our relationship with the US tax authorities and whether the supplementary charge will be allowable under double taxation treaties. The Inland Revenue has written to the Internal Revenue Service in the US to ask for its view on whether the supplementary charge will be creditable. That is, of course, an issue for the US. It was the industry which asked us to do that, and it was then up to the Revenue to contact the IRS and deal with the issue in the usual way.
      Sir Robert Smith: Does that mean that until the industry raised the issue as a concern the Inland Revenue was not aware of it? Does the Inland Revenue think that it is a genuine concern or did it miss it completely?
      Ruth Kelly: It clearly is of concern to certain companies and it needs to be sorted out one way or the other. It is not clear, however, that companies will be significantly disadvantaged if the supplementary charge were not to be completely allowable under the double taxation treaties. I urge those companies for which that is a real issue to approach the Government and the Inland Revenue and set out their concerns. We will then liaise with those companies and address their concerns. If the hon. Gentleman has evidence that the issue is of real concern, I will also of course be willing to listen to him.

      299
      Several other hon. Members raised the question of royalties. Many views have already been expressed to the Government about the abolition of royalties and several dates have been suggested. I expect the Department of Trade and Industry to issue a consultation document in the near future. I can certainly confirm that it remains our intention to abolish royalties subject to that consultation.
      The Government have considered the returns on capital employed in the North sea. We have found that, since the tax changes made by the Conservative Government in 1993, the rate of return has risen from 10.5 per cent. to 34 per cent. last year. In comparison, the rate of return for other non-financial industries was, on average, 11 per cent. last year, and the difference was not caused by temporarily high oil prices. In fact, the rate of return in the North sea was higher than that for other industries in every one of the past nine years—even in 1998, when the oil price fell sharply.
      It is only right that we take a fair share of revenue from the North sea for the United Kingdom taxpayer. Our reforms promote investment, jobs and development in the North sea. They are right; they are for the long term. I urge hon. Members to reject the Opposition's new clause and to support the Government.
      Mr. Flight: I will be brief.
      The economic life of the North sea in the 1990s was enormously better than expected, which has been largely reflected in a sensible tax regime since 1993. The Government clearly have a windfall strategy: oil prices have gone up, so it is appropriate to charge more tax. Indeed, the Financial Secretary said so. I warn her that, with the economic outlook facing the world today, and as the European Bank for Reconstruction and Development is funding the installation of a new pipeline from Russia, it is highly questionable whether higher prices will be sustained.
      The Opposition have won the argument overwhelmingly. This tax grab will put at risk the maximum future exploitation of the North sea. I commend the Financial Secretary on doing her best to defend the indefensible. I am slightly saddened that someone as bright as she is has swallowed the spin that the Treasury has fed her. We have already made the point that the 34 per cent. return figure is nonsense. It represents the top return for 2001, compared with the 14 per cent. average. Indeed, the figure is only 7 per cent. for investments since 1996.
      The Financial Secretary will come to eat her words. The leading oil industry economist, Wood Mackenzie, has made it absolutely clear that the Government's case is rubbish and that the industry cannot sustain any further marginal taxation without a major loss of investment and employment. The Government will regret what they are doing. They have misled the industry by their lack of consultation, but they then try to tell the industry, "Trust us. This is another long-term regime." Pull the other one, mate. When confidence has been broken, people do not give their trust. Britain will suffer; the current account will suffer; jobs will suffer; and investment will suffer. This additional taxation is very unwise.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 177, Noes 303.

      Division No. 288]

      [8.12 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Heath, David

      Allan, Richard

      Heathcoat—Amory, Rt Hon David

      Amess, David

      Hermon, Lady

      Ancram, Rt Hon Michael

      Hoban, Mark

      Arbuthnot, Rt Hon James

      Hogg, Rt Hon Douglas

      Atkinson, David (Bour'mth E)

      Holmes, Paul

      Atkinson, Peter (Hexham)

      Horam, John

      Bacon, Richard

      Howard, Rt Hon Michael

      Baron, John

      Howarth, Gerald (Aldershot)

      Barrett, John

      Hughes, Simon (Southwark N)

      Beggs, Roy

      Hunter, Andrew

      Beith, Rt Hon A J

      Jack, Rt Hon Michael

      Bellingham. Henry

      Jackson, Robert (Wantage)

      Bercow, John

      Johnson, Boris (Henley)

      Beresford, Sir Paul

      Jones. Nigel (Cheltenham)

      Blunt, Crispin

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

      Boswell, Tim

      Bottomley, Peter (Worthing W)

      Kirikbride, Miss Julie

      Bottomley, Rt Hon Virginia

      Knight, Rt Hon Greg (E Yorkshire)

      Brady, Graham

      Laing, Mrs Eleanor

      Brazier, Julian

      Lait, Mrs Jacqui

      Brooke, Mrs Annette L

      Lamb, Norman

      Browning, Mrs Angela

      Laws, David

      Bruce, Malcolm

      Leigh, Edward

      Burnett, John

      Letwin, Oliver

      Burns, Simon

      Lewis. Dr Julian (New Forest E)

      Bumside, David

      Liddell-Grainger, Ian

      Butterfill, John

      Lidington, David

      Cable, Dr Vincent

      Lilley, Rt Hon Peter

      Calton, Mrs Patsy

      Liwyd, Elfyn

      Cameron, David

      Loughton. Tim

      Campbell, Rt Hon Menzies (NE Fife)

      Luff, Peter

      MacKay, Rt Hon Andrew

      Carmichael, Alistair

      McLoughlin, Patrick

      Cash, William

      Mains, Humfrey

      Chapman, Sir Sydney (Chipping Barnet)

      Maples, John

      Marsden, Paul (Shrewsbury)

      Chidgey, David

      Mates, Michael

      Chope, Christopher

      Mawhinney, Rt Hon Sir Brian

      Clappison, James

      May, Mrs Theresa

      Clifton—Brown, Geoffrey

      Mercer. Patrick

      Cotter, Brian

      Mitchell, Andrew (Sutton Goldfield)

      Cran, James

      Moore, Michael

      Davey, Edward (Kingston)

      Moss, Malcolm

      Davies, Quentin (Grantham)

      Murrison, Dr Andrew

      Djanogly, Jonathan

      Norman, Archie

      Donaldson, Jeffrey M

      Osborne, George (Tatton)

      Dorrell, Rt Hon Stephen

      Page, Richard

      Doughty, Sue

      Paice, James

      Duncan, Peter (Galloway)

      Paterson, Owen

      Evans, Nigel

      Price, Adam

      Ewing, Annabelle

      Prisk, Mark

      Field, Mark (Cities of London)

      Redwood, Rt Hon John

      Flight, Howard

      Reid, Alan (Argyll & Bute)

      Flook, Adrian

      Rendel, David

      Forth, Rt Hon Eric

      Robathan, Andrew

      Foster, Don (Bath)

      Robertson, Hugh (Faversham)

      Francois, Mark

      Robertson, Laurence (Tewk'b'ry)

      Garnier, Edward

      Roe, Mrs Marion

      George, Andrew (St Ives)

      Rosindell, Andrew

      Gibb, Nick

      Ruffley, David

      Gillan, Mrs Cheryl

      Russell. Bob (Colchester)

      Goodman, Paul

      Salmond, Alex

      Grayling, Chris

      Sanders, Adrian

      Green, Matthew (Ludlow)

      Sayeed. Jonathan

      Greenway, John

      Selous, Andrew

      Grieve, Dominic

      Shephard, Rt Hon Mrs Gillian

      Hague, Rt Hon William

      Simmonds, Mark

      Hammond, Philip

      Simpson, Keith (Mid—Norfolk)

      Hancock, Mike

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

      Harris, Dr Evan (Oxford W)

      Smyth, Rev Martin (Belfast S)

      Hawkins, Nick

      Spelman, Mrs Caroline

      Heald, Oliver

      Spicer, Sir Michael

      301

      Spink, Bob

      Walter, Robert

      Spring, Richard

      Watkinson, Angela

      Stanley, Rt Hon Sir John

      Webb, Steve

      Steen, Anthony

      Weir, Michael

      Streeter, Gary

      Widdecombe, Rt Hon Miss Ann

      Stunell, Andrew

      Wiggin. Bill

      Swayne, Desmond

      Wilkinson, John

      Swire, Hugo

      Willetts, David

      Williams, Hywel (Caernarfon)

      Syms. Robert

      Williams, Roger (Brecon)

      Tapsell Sir Peter

      Winterton, Ann (Congleton)

      Taylor, John (Solihull)

      Winterton, Sir Nicholas (Macclesfield)

      Taylor, Matthew (Truro)

      Taylor, Sir Teddy

      Yeo, Tim

      Thomas, Simon (Ceredigion)

      Young, Rt Hon Sir George

      Thurso, John

      Younger-Ross, Richard

      Tonge, Dr Jenny

      Tumer, Andrew (Isle of Wight)

      Tellers for the Ayes:

      Tyler, Paul

      Mr. Charles Hendry and

      Tyrie, Andrew

      Mr. David Wilshire.

      NOES

      Abbott, Ms Diane

      Coffey, Ms Ann

      Adams, Mrs Irene (Paisley N)

      Cohen, Harry

      Ainsworth, Bob (Cov'try NE)

      Colman, Tony

      Allen, Graham

      Cook. Rt Hon Robin (Livingston)

      Anderson, Rt Hon Donald (Swansea E)

      Cousins. Jim

      Cox, Tom

      Anderson, Janet (Rossendale)

      Cranston, Ross

      Armstrong, Rt Hon Ms Hilary

      Crausby, David

      Atkins, Charlotte

      Cruddas, Jon

      Austin, John

      Cryer, John (Hornchurch)

      Bailey, Adrian

      Cummings, John

      Baird, Vera

      Cunningham, Jim (Cov'try S)

      Banks, Tony

      Cunningham, Tony (Workington)

      Barnes, Harry

      Curtis—Thomas, Mrs Claire

      Battle, John

      Darling, Rt Hon Alistair

      Beard, Nigel

      Davey, Valerie (Bristol W)

      Beckett, Rt Hon Margaret

      David, Wayne

      Begg, Miss Anne

      Davidson, Ian

      Benn, Hilary

      Davies, Geraint (Croydon C)

      Bennett, Andrew

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

      Berry, Roger

      Best. Harold

      Dawson, Hilton

      Betts, Clive

      Denham, Rt Hon John

      Blackman, Liz

      Dhanda, Parmjit

      Blizzard, Bob

      Dobbin, Jim

      Borrow, David

      Donohoe, Brian H

      Bradley, Rt Hon Keith (Withington)

      Doran, Frank

      Bradley, Peter (The Wrekin)

      Dowd, Jim

      Brennan, Kevin

      Drew, David

      Browne, Desmond

      Eagle, Angela (Wallasey)

      Bryant, Chris

      Eagle, Maria (L'pool Garston)

      Burden, Richard

      Edwards, Huw

      Burgon, Colin

      Efford, Clive

      Burnham, Andy

      Ennis, Jeff

      Cairns, David

      Etherington, Bill

      Campbell, Alan (Tynemouth)

      Field, Rt Hon Frank (Birkenhead)

      Campbell, Mrs Anne (C'bridge)

      Fisher, Mark

      Campbell, Ronnie (Blyth V)

      Fitzpatrick, Jim

      Caplin, Ivor

      Flint, Caroline

      Casale, Roger

      Flynn, Paul

      Caton, Martin

      Follett, Barbara

      Cawsey, Ian

      Foster, Rt Hon Derek

      Challen, Colin

      Foster, Michael (Worcester)

      Chapman. Ben (Wirral S)

      Foster, Michael Jabez (Hastings)

      Chaytor, David

      Francis. Dr Hywel

      Clapham, Michael

      Gapes, Mike

      Clark, Paul (Gillingham)

      George, Rt Hon Bruce (Walsall S)

      Clarke, Rt Hon Charles (Norwich S)

      Gerrard, Neil

      Gibson, Dr Ian

      Clarke, Rt Hon Tom (Coatbridge)

      Godsiff. Roger

      Clarke, Tony (Northampton S)

      Goggins, Paul

      Clelland, David

      Griffiths, Win (Bridgend)

      Clwyd, Ann

      Hall. Mike (Weaver Vale)

      Coaker, Vernon

      Hall. Patrick (Bedford)

      302

      Hamilton, David (Midlothian)

      Mann, John

      Hanson, David

      Marris, Rob

      Hams, Tom (Glasgow Cathcart)

      Marsden, Gordon (Blackpool S)

      Healey, John

      Marshall, David (Shettleston)

      Henderson, Doug (Newcastle N)

      Marshall, Jim (Leicester S)

      Henderson, Ivan (Harwich)

      Martlew, Eric

      Hendrick, Mark

      Meacher, Rt Hon Michael

      Hepburn, Stephen

      Meale, Alan

      Hesford, Stephen

      Merron, Gillian

      Heyes, David

      Michael. Rt Hon Alun

      Hill, Keith

      Miliband, David

      Hinchliffe, David

      Miller, Andrew

      Hodge, Margaret

      Mitchell, Austin (Gt Grimsby)

      Hood, Jimmy

      Moffatt, Laura

      Hopkins, Kelvin

      Mole, Chris

      Howarth, Rt Hon Alan (Newport E)

      Moran, Margaret

      Howarth, George (Knowsley N)

      Morgan. Julie

      Hoyle. Lindsay

      Morley, Elliot

      Hughes, Beverley (Stretford)

      Mountford, Kali

      Hughes, Kevin (Doncaster N)

      Mudie, George

      Humble, Mrs Joan

      Mullin, Chris

      Hurst, Alan

      Munn, Ms Meg

      Hutton, Rt Hon John

      Murphy, Denis (Wansbeck)

      Iddon. Dr Brian

      Murphy, Jim (Eastwood)

      Illsley, Eric

      Murphy, Rt Hon Paul (Torfaen)

      Irranca—Davies, Huw

      Naysmith, Dr Doug

      Jamieson, David

      O'Hara, Edward

      Jenkins, Brian

      Olner, Bill

      Jones, Helen (Warrington N)

      O'Neill, Martin

      Jones, Kevan (N Durham)

      Organ, Diana

      Jones, Lynne (Selly Oak)

      Palmer. Dr Nick

      Jones, Martyn (Clwyd S)

      Pearson, Ian

      Joyce, Eric

      Perham, Linda

      Kaufman, Rt Hon Gerald

      Picking, Anne

      Keen, Alan (Feltham & Heston)

      Pickthall, Colin

      Keen, Ann (Brentford & Isleworth)

      Pike, Peter

      Kelly, Ruth

      Plaskitt, James

      Kemp, Fraser

      Pollard, Kerry

      Khabra, Piara S

      Pond, Chris

      Kidney, David

      Pope, Greg

      Kilfoyle, Peter

      Pound. Stephen

      King, Andy (Rugby & Kenilworth)

      Prentice, Ms Bridget (Lewisham E)

      King, Ms Oona (Bethnal Green)

      Prentice, Gordon (Pendle)

      Knight, Jim (S Dorset)

      Prescott, Rt Hon John

      Kumar, Dr Ashok

      Primarolo, Dawn

      Ladyman, Dr Stephen

      Purchase, Ken

      Lawrence, Mrs Jackie

      Purnell, James

      Laxton, Bob

      Quin, Rt Hon Joyce

      Lazarowicz, Mark

      Quinn, Lawrie

      Lepper, David

      Rammell, Bill

      Leslie, Christopher

      Rapson, Syd

      Levitt Tom

      Reed, Andy (Loughborough)

      Lewis, Ivan (Bury S)

      Reid, Rt Hon Dr John (Hamilton N)

      Lewis, Terry (Worsley)

      Robertson, John (Glasgow Anniesland)

      Linton, Martin

      Lloyd, Tony

      Robinson, Geoffrey (Cov'try NW)

      Love, Andrew

      Roche, Mrs Barbara

      Lucas, Ian

      Rooney, Terry

      Luke, lain

      Ross, Ernie

      Lyons, John

      Roy, Frank

      McAvoy, Thomas

      Ruane, Chris

      McCafferty, Chris

      Ruddock, Joan

      McCartney, Rt Hon Ian

      Ryan, Joan

      McDonagh, Siobhain

      Sarwar, Mohammad

      McDonnell, John

      Savidge, Malcolm

      McIsaac, Shona

      Sawford, Phil

      McKechin, Ann

      Sedgemore, Brian

      Mackinlay, Andrew

      Sheerman, Barry

      MacShane, Denis

      Sheridan, Jim

      Mactaggart, Fiona

      Shipley, Ms Debra

      McWalter, Tony

      Simon, Siôn

      McWilliam, John

      Simpson, Alan (Nottingham S)

      Mahmood, Khalid

      Singh, Marsha

      Mahon, Mrs Alice

      Skinner, Dennis

      Mallaber, Judy

      Smith, Angela (Basildon)

      Mendelson, Rt Hon Peter

      Smith, Rt Hon Chris (Islington S)

      303

      Smith, Geraldine (Morecambe)

      Twigg, Stephen (Enfield)

      Smith, John (Glamorgan)

      Tynan, Bill

      Smith, Llew (Blaenau Gwent)

      Vaz, Keith

      Southworth, Helen

      Vis, Dr Rudi

      Speller, Rt Hon John

      Walley, Ms Joan

      Starkey, Dr Phyllis

      Ward, Claire

      Steinberg, Gerry

      Wareing, Robert N

      Stewart, Ian (Eccles)

      Watson, Tom

      Stinchcombe, Paul

      Watts, David

      Stoate, Dr Howard

      Whitehead, Dr Alan

      Stuart, Ms Gisela

      Williams, Rt Hon Alan (Swansea W)

      Sutcliffe, Gerry

      Tami, Mark

      Williams, Mrs Betty (Conwy)

      Taylor, Rt Hon Ann (Dewsbury)

      Wilson, Brian

      Taylor, Ms Dari (Stockton S)

      Winnick, David

      Taylor, David (NW Leics)

      Winterton, Ms Rosie (Doncaster C)

      Thomas, Gareth (Clwyd W)

      Woodward, Shaun

      Thomas, Gareth (Harrow W)

      Worthington, Tony

      Tipping, Paddy

      Wray, James

      Todd, Mark

      Wright, Anthony D (Gt Yarmouth)

      Touhig, Don

      Wright, David (Telford)

      Trickett, Jon

      Wright, Tony (Cannock)

      Turner, Dennis (Wolyerh'ton SE)

      Turner, Dr Desmond (Kemptown)

      Tellers for the Noes:

      Turner, Neil (Wigan)

      Mr. Nick Ainger and

      Twigg, Derek (Halton)

      Mr. John Heppell.

      Question accordingly negatived.

    New Clause 5

      CONTINGENT LIABILITIES UNDER THE PRIVATE FINANCE INITIATIVE
      '.—(1) Section 156 of the Finance Act 1998 (c. 36) is amended as follows.
      (2) At the end of subsection (4) insert "and to generally accepted accounting practice.".
      (3) After subsection (4) insert—
      "(4A) The Financial Statement and Budget Report shall include a statement of the aggregate amount of all financial liabilities, actual and contingent, to those persons who are or who will become the owners of assets which are to be made available to or for the benefit of any Department of State and which are to be financed through the Private Finance Initiative.".'.—[Mr. Flight.]
      Brought up, and read the First time.
      Mr. Flight: I beg to move, That the clause be read a Second time.
      This is an important new clause because it addresses growing concerns expressed by the various authorities and professional bodies involved, by the City of London, and by citizens up and down the land. It calls for amendment to the Finance Act 1988 requiring a statement of the aggregate of all contingent potential liabilities as well as actual liabilities relating to private finance initiative and public-private partnership deals.
      A variety of issues are raised by the new clause. The Opposition continue to support the broad principles of PFI under which the private sector is brought in to do things, and often to do them better than the public sector. Under that initiative efficiencies can be achieved in funding and trade union Spanish practices can be addressed. It operates according to the principle of transferring operational risk. We have greater concerns about PPP, when that risk is often not transferred. When such arrangements are made, under PPP and under PFI, it is axiomatic that financial matters should be transparent. Because of the Government's unique
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      position in terms of being able to issue letters of comfort and guarantees that can be rolled over, the accounting standards should be more demanding, if anything, than those in the private sector.
      This Government—I do not include those Members with whom we have been debating this Finance Bill—have crafted a web of deceit and an Enron-style system in which there is a lack of accounting and a lack of disclosure. There has been a desperate determination to move investment in the public sector off balance sheet, and, as far as possible, to do so without describing it fully or accurately in the Red Book.
      Rob Marris: Will the hon. Gentleman give way?
      Mr. Flight: I shall do so in due course.
      The Government have been incurring contingent liabilities in relation to PPP deals, and, to some extent, PFI deals, which are recorded nowhere in the Red Book. The total extent of those liabilities is unknowable, but I have identified £25 billion alone relating to transport. That comprises a £2.67 billion guarantee for London and Continental; the Government undertaking through the Strategic Rail Authority to repay the £9 billion of commercial borrowings by Network Rail within three years if those are not refinanced; and the Government's letters of comfort in respect of 95 per cent. of the borrowings of the tube PPP contractors—their total borrowings over the first two phases are expected to be £15 billion. Sizeable potential contingent liabilities also relate to defence PFI deals, and there may be contingent liabilities in relation to other PFI deals.
      With regard to those contingent liabilities, the Government have interpreted the Accounting Standards Board's FRS12 directive and structured vehicles in a way designed to avoid disclosure. The principle of FRS12 is that, unless a contingent liability is remote, it should be disclosed, except when it is immaterial. In assessing remoteness—the key issue—the potential ability to roll over liabilities must not be taken into account until after a roll-over has been implemented. On 11 April, I asked the then Chief Secretary to the Treasury whether the Government guarantee via the Strategic Rail Authority of Network Rail's £9 billion commercial borrowings would be treated as a public sector liability. He responded that, although that would not really be the case, the contingent liability would not score as, given the unlikely event of alternative private sector refinancing not being obtained, it was unlikely to be called.
      If that is the case, which is questionable, it is because the Strategic Rail Authority's liabilities can be rolled over for a further three years to enable commercial refinancing. Indeed, they can be rolled over for ever. A brilliant little wheeze has been invented giving a guarantee against which the private sector happily lends, and each time the end of the three-year period comes near the liabilities can be rolled over again. That is very clever and fits a narrow definition of the remoteness rules, but does not fit the roll-over rules. Given the Government's power on this matter, common sense suggests that materiality should be a major factor in determining their policy on the disclosure of contingent liabilities.
      8.30 pm
      Chris Grayling: My hon. Friend may not be aware that, yesterday evening, the chief executive of Network Rail confirmed at a meeting of the all-party railways group that Network Rail will be treated, for accounting purposes, as a subsidiary of the Strategic Rail Authority. However, the debts and liabilities built up by Network Rail will not manifest themselves in the Government's accounts.
      Mr. Flight: I thank my hon. Friend for those comments. I shall come to that issue and to the tortuous structure that has been crafted by some of the best legal brains in the City of London to achieve that end.
      Mr. Edward Davey: Further to that point, is the hon. Gentleman aware that the second footnote of the minutes that the Secretary of State for Transport issued on 20 June says:
      "Direct rights would be exercised under a 'Put option' whereby, in certain specific circumstances, commercial lenders can require the SRA to purchase all amounts due to them from Network Rail Group"?
      Does the hon. Gentleman agree that that suggests that, far from the debts being able to be rolled over, the Government and the Government agency—namely the SRA—could be forced by the lenders to repay them? Therefore, those debts should be on the Government's balance sheet.
      Mr. Flight: Indeed, I accept that point, but another issue is relevant. The Government could be forced to repay the debts but, because the money is lent by the private sector against the undertaking from the SRA, the Government have relied on the remoteness argument that it is unlikely they would ever be called upon to disclose them. At best, that is a questionable interpretation of FRS12. At worst, it is downright deceitful hiding of the true position of the public finances.
      A different accounting issue relates to PFI. Note F, which was crafted by the Treasury PFI taskforce, lays down that liability for PFI projects should be based on the risk attached to them. For example, a £100 million hospital could be ignored and disclosure could be made in relation to the basic ownership element that is deemed at 10 per cent. The Accounting Standards Board had initially advised that a much clearer and more transparent practice would have been to look at who was liable for the debt. In the case of such a £100 million hospital project, the risk is placed off balance sheet because the Government argue that 90 per cent. does not count and that the private sector is responsible for 55 per cent. of the remaining 10 per cent. However, in reality, the Government are liable for 94.5 per cent. of the entire hospital. As the senior partner of one of our leading accounting firms commented:
      "The Government is effectively fiddling the figures by using a mechanism to disguise its liabilities and that a major danger of disguising the figures is that projects may not be scrutinised effectively."
      The Government have also insisted on public sector capital projects being financed off balance sheet by PFI and PPP deals. The total package is, "Make them happen. Get them done by PFI and PPP, and get them off balance sheet". The projects are not then on balance sheet for the
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      purposes of the EU rules in relation to membership of the euro, and public finances appear to be very much better than they are in reality.
      So here we have the second scam that has already been exposed. To get the deals through the best value comparator process, there has been what can only be described as a rigged approach. Many crucial details are hidden from public view by the blanket ban on disclosure under commercial confidentiality requirements, and the public sector comparator, which is supposed to show a fair measure of whether privately financed schemes offer better value than conventional public funding, contains many rigged elements. Jeremy Colman, the auditor-general at the National Audit Office, recently described some of the comparators as "utter rubbish". Public service managers are engaging in the sham because they have to show that their PFI plans are cost-effective to get the investment.
      Aspects of the rigging that have been exposed include what is widely known as risk costing, under which private operators are allowed to claim a special 12.5 per cent. of costs risk element. That constitutes a key component of the fair value-for-money calculation and knocks down the calculation for the PFI deal. It compares with an average cost overrun on, for example, hospital-building projects of 7 per cent. So even if we accept the principle, the cost is too high.
      The British Medical Journal recently published a paper showing how risk costing has been used to distort results to a major extent and to swing projects that qualify marginally which would not have otherwise done so. There is a point of principle to consider. Even if the risk was assessed realistically, the entire exercise is questionable. Would the Government allow a major public service to collapse, as illustrated by Railtrack or the Channel Tunnel Group?
      In addition, the Association of Chartered Certified Accountants explains that the Government allow public bodies to reclaim VAT on privately funded projects but not on publicly backed schemes, thereby favouring private finance by 17.5 per cent. National health service trusts have to pay the Treasury a 60 per cent. capital charge on buildings they own, but private builders have no such obligations. The Government also give local authorities an annual grant of 11.5 per cent. of the value of PFI schemes they commission, but that is not the case for publicly funded projects. Although subcontracted private sector projects and managements may be much better than public schemes, in many cases the best value justifying comparators are being rigged when they should be dealt with on a transparent and straightforward basis.
      The Office for National Statistics recently confirmed that the Government managed to craft in Network Rail a legal entity with debts that will not be included in public sector borrowing requirements, unlike Consignia. That is at odds with it being billed as a renationalisation and also constitutes a legal model vehicle that could accommodate even more public sector off balance sheet borrowing. Very bright lawyers crafted that. When I approached their firm for information, I was told that they could not assist because it would be a conflict of interest and they were working for the Government to design such a scheme. That is an answer to a maiden's prayer if one wants to keep public-private partnership liabilities off balance sheet.

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      The Red Book includes PFI payment liabilities for 25 years, through to 2027–28. I wonder whether hon. Members have looked at those because they already amount to £98 billion. That contrasts with the initial capital value of the projects of £20 billion at the time of the deal and reflects a total of about 450 PFI deals. Another 300 PFI deals are in the pipeline and expected to sign up in the next two years. Their current capital value is assessed at £25 billion. Presumably, that will add another £100 billion over 25 years of PFI liabilities. Those are recorded in the Red Book and are material to the public sector accounts.
      I participated in the Standing Committee on the Government Resources and Accounts Bill. The Conservative Opposition expressed grave doubts because they felt that it increased the scope of the Treasury to cook the books. We thought that it allowed the Treasury to incur expenditure in respect of the formation of Partnerships UK and to provide it with financial assistance, including, again, substantial Government guarantees on the discharge of financial obligations. So we have yet another conduit through which contingent liabilities can be built up but not recorded.
      One of the inimitable results of this complex and devious structure, designed to keep PFI and PPP liabilities off balance sheet, has been horrific mounting legal and other transactional costs.
      Rob Marris: I understand that PFI started in 1994 under a Conservative Government. Is the hon. Gentleman saying that in the unlikely event that the Conservatives were ever in government again they would abandon PFI, or would they continue the scheme and show everything on the balance sheet? Is he also saying that when the Conservatives were in government, they showed all these costs on the Government's balance sheet and in the Red Book?
      Mr. Flight: With respect, I would have expected a better question from such a pleasant Member of Parliament. The hon. Gentleman will be aware that the PH deals done before 1997 were few and, in the main, very straightforward, concerning the building of bridges or roads. We poor, feeble creatures did not get up to all the sophisticated trickery indulged in by his colleagues. He asked a question about principle, but I have already given him the answer: if things are properly done and transparently accounted, there is a great deal of scope for subcontracting to the private sector. There is a question as to whether one can do that safely for 30 years, but we support the principle of PFI; indeed we gave birth to it, and it is utterly usable. Unlike the present Government, this party does not stand for non-transparent and deliberately misleading accounting. If we were in power, we would get the thing cleaned up pretty quickly.
      I return to the mounting legal costs. As hon. Members will know, in 1998 the upgrading of the west coast main line was priced at £2.1 billion. The cost of the scaled-down version has gone up to £13 billion this year, over twice the cost of the equivalent French new TGV investment, and much of it arises from the huge legal and transactional processing costs, reflecting the complexity of the legal structure.
      The first major project being promoted by Partnerships UK is Project Aquatrine, a PFI deal to modernise the drains at the Ministry of Defence. How pathetic that the
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      Government could not come up with something more worth doing. That deal is worth between £300 million and £400 million, and £37 million has already been spent, mostly on legal fees, without a single drain having been cleaned or improved.
      When we introduced PFI, we employed it for much simpler projects such as building bridges and roads. However, PFI and PPP have been the magic solution for this Government, enabling them to keep major public sector investment costs and commitments off balance sheet. The complex structures involved avoid both the Eurostat requirements on what should be included as a public sector liability and British law and conventions on local authority liabilities, which are also to be viewed as central Government liabilities.
      The Office for National Statistics is also ducking responsibility for what is happening, although it makes noises of displeasure. However, it comments that, on the question of whether a cost should be included in Government accounts, it takes the advice of others who are specialists. The Treasury ducks the issue by saying that the classification is up to the ONS. The Paymaster General will know that the hon. Member for Dumbarton (Mr. McFall), the Labour Chairman of the Treasury Committee, has advised, thank goodness, that he intends that the Committee should examine these Enron-style Government accounting practices.
      At the crudest level, if the initial capital element of PFI debt alone were brought back on balance sheet it would add £35 billion to the public sector borrowing requirement—excuse my using the old-fashioned term, but it is clear. A further £30 billion would probably be added over the next two years as PFI projects in the pipeline were signed up.
      8.45 pm
      Transparent treatment of PPP and PFI contingent liabilities would have serious repercussions for an application to join the euro. That is one of the main issues driving the web of deceit hiding the commitments, or at least the lack of transparency about them. The treatment of contingent liabilities is absolutely central to the new Network Rail legal structure. In principle, Network Rail is a legal structure whose borrowings are not part of Government debt. They could be rolled over and over, increasing private sector borrowing against a Government guarantee renewed every three years via the Strategic Rail Authority. That would be a nonsensical example of hiding behind the remoteness element of the FRS12 principle relating to disclosure.
      It is ironic that in the wake of the private sector accounting problems in the United States the British Government are applying to contingent liabilities certain accounting practices that would be questionable in the private sector. They are certainly not practising the degree of transparency appropriate to the public sector. What is needed is full and clear disclosure of contingent liabilities and where they truly fall, accounting practices for PFI and PPP deals that make that clear, and a speedy end to the practices that have developed—practices that, if the Government are not careful, will run PFI and PPP amok and cast into ill repute principles that are workable and good for making projects happen.
      We want clarity and transparency. At the very least, we want all contingent liabilities listed in the Red Book. To be candid, saying that a £9 billion contingent liability does not matter because we have a clever little deal that makes it remote is a disgrace.
      Mr. Edward Davey: I welcome the new clause and congratulate the hon. Member for Arundel and South Downs (Mr. Flight) on his ingenuity in enabling us to debate the issue—it is not before time.
      I agree with the point implicit in the hon. Gentleman's argument. There is not necessarily a problem with off balance accounting or with having contingent liabilities. What is key is that they are transparent and reported properly, and that if off balance accounting is the chosen method, it is chosen for the right reasons and makes economic sense.
      Those are not theoretical issues. Off balance accounting is more expensive. The Government guaranteed a bond to finance the channel tunnel rail link rather than use gilt financing, and it ended up costing the taxpayer more. The National Audit Office said that that decision cost the taxpayer an extra £80 million, for no benefit other than to keep the transaction off balance. Going off balance has to be justified because it carries a higher cost.
      There is concern that the desire to drive projects off balance has become the sole reason for projects. In other words, decision making in Whitehall is being distorted. If the Minister doubts that, my first exhibit is a letter to my hon. Friend the Member for Truro and St. Austell (Matthew Taylor) from the Under-Secretary of State at the former Department for Transport, Local Government and the Regions. Dated 8 January 2002, the letter, which relates to the debate on what was then called Renewco, states:
      "It was clearly understood by both sides that for RenewCo to deliver its objectives and be established successfully it could not be classified as part of either the Government's or Railtrack's balance sheet."
      In other words, the negotiations surrounding Renewco were driven by the need to take the vehicle off balance. The driving force was not that that was the best way to run the railways but the desire to move the structure off balance. That is the wrong way to decide how to structure an industry as important as the railways. Policy cannot be driven by accounting definitions.
      The Government have sometimes tried in their various discussions on Network Rail and the PFI in general to justify why they are taking things off balance. As far as I have been able to tell, however, the main justification boiled down to a rather obscure economic notion, which I never came across in my studies at university—reputational externalities. These are rather bizarre things and we have again had to go to the National Audit Office to find out what they amount to. The NAO takes the view that the Treasury considers that increasing public borrowing has an external cost in terms of the Government's reputation for prudence and that reputational externality is a calculation to reflect that assumed cost.
      That is a bizarrely theoretical reason for promoting off balance accounting. It seems to involve the assumption that the private sector and financial markets are daft and will not
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      notice it. I suggest that when a ratings agency considers Network Rail, it will take those factors into account. Indeed, if the Government continue to follow such a practice, they might be punished when the credit and ratings agencies consider their debt in the next few years. The reputational externalities will seem theoretical nonsense. They are a very thin reed to be used to justify taking so much borrowing off balance. My concern is why the Government are doing that, as they seem to have no clear and good economic rationale.
      Rob Marris: May I address the hon. Gentleman in terms of reputational long shots and ask whether, if the Liberal Democrats were ever to form a national Government, they would support PFIs?
      Mr. Davey: We support PFIs. I do not think that there is anything wrong in such methods of financing projects. However, we are debating not whether we support PFIs, but how capital assets that are bought through PFI deals and the contingent liabilities that could fall to the taxpayer are accounted for. That is the problem.
      I am grateful to the hon. Gentleman for his intervention, because it takes me to my next point: we could accept off balance accounting if we knew what was happening, but I am afraid that the efforts that my hon. Friends and I have had to make to uncover the process on which the Government are embarking have been so detailed and have required so many letters and parliamentary questions that they do not suggest much transparency.
      One must ask what the tests are for moving something off balance. As far as I can see, the Government have been using the commercial, private sector test: statement of standard accounting practice 21, which is about whether a deal is a financial lease or an operating lease. If it is a financial lease, it is deemed another form of borrowing and therefore has to go on to the balance sheet, but if it is deemed an operating lease, it can go off balance.
      That creates a few problems. In preparing my speech, I visited the Accounting Standards Board website and looked at statement of standard accounting practice 21. Interestingly, we are told that that practice is currently under review because it is felt that it is not precise enough and that in its own terms, there is some uncertainty about its effects. It is also suggested that transactions that are carried out by private sector firms, but are effectively the same as those in question, are being accounted for in different ways. The private sector admits that there is a problem, as does the Accounting Standards Board, but the Government do not seem worried. That should be a particular cause for concern, given the huge amounts involved.
      Although statement of standard accounting practice 21 is not specific in its definition of operating and financial leases, I have spoken to practising accountants to find out what the basic practice is and what they do to make the decision. I am told that although it is not written down, in practice they say that if 90 per cent. of the capital value of an asset is recouped by the lessor out of the capital element of the lease payments over the lifetime of a contract, it is normally deemed to be a financing lease and should therefore count as borrowing. In January, my hon. Friend the Member for Truro and St. Austell asked the

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      then Secretary of State about what proportion of PFI contracts would have been affected by the rule that is used by the private sector. He received the following reply:
      "No such estimate has been made. The existing PH contracts in the Departments are for the provision of a service in return for a unitary payment, the payment of which is dependent on satisfactory performance. The unitary payment is not broken down into constituent parts."—[Official Report, 18 January 2002; Vol. 378, c. 514W.]
      That suggests that the Government are not operating the test under statement of standard accounting practice 21, because they do not know which elements of the unitary payment are capital and which are not. Although the Government have been telling us that they have been doing what the private sector do, in practice they have not. That should give us real cause for concern.
      Mr. Flight: The hon. Gentleman did a better job than I did of explaining the PFI in relation to standard 21. Standard 21 deals with PFI and what is used to hide liabilities in that context, but contingent liabilities are covered by a separate rule, FRS12, which is the doctrine of remoteness. Under that rule, roll-over cannot be used as a justification for believing that a liability may be remote.
      Mr. Davey: I am grateful to the hon. Gentleman. He anticipates me. as I was about to come to that point, specifically to pick up his example of Network Rail, where the remoteness test is the fig leaf that the Government are hiding behind.
      The Secretary of State for Transport did not dwell on the matter in his statement of 27 June. He referred Members who asked him about contingent liabilities to the minute that he had just published, suggesting that we went to the Library, put towels round our heads, and studied it. I have not put a towel round my head, but I have indeed studied it. Interestingly, it reveals that in making their decision the Government seem to have leaned heavily on the advice of the Office for National Statistics. Paragraph 19 of the minute, which deals with non-statutory contingent liabilities, refers to the confirmation by the Office for National Statistics that
      "Network Rail would not be classified as a public sector organisation and its expenditure and liabilities would not score against public sector expenditure and net debt."
      So the Government are relying on the ONS.
      On 28 June, the day after the statement and the publication of the minute, the Comptroller and Auditor General, the main watchdog that the House relies on, published a press release entitled "Comptroller and Auditor General's view on the appropriate accounting treatment for Network Rail". Hon. Members should look at it, because it suggests that he is in complete disagreement with the Office for National Statistics. I quote:
      "Sir John Bourn, the Comptroller and Auditor General, has concluded that Network Rail should be accounted for as a subsidiary of the Strategic Rail Authority"—
      the point made by the hon. Member for Epsom and Ewell (Chris Grayling)—
      "and should be consolidated in the SRA's accounts. He makes this judgement in his capacity as statutory auditor of the SRA.
      Sir John's view is that the Government's interest in Network Rail is akin to an equity shareholder's interest. The Government is effectively providing security for the providers of debt finance to
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      Network Rail and is acting as a lender of last resort in the event of financial difficulties. Therefore the Government is the party bearing the risk that would normally be borne by equity capital."
      That is pretty clear. It goes on:
      "Financial reporting standards look at the substance of transactions as well as legal form and on that basis Sir John has advised that the assets and liabilities of Network Rail should be accounted for on the balance sheet of the SRA."
      Sir John is therefore saying that, in substance, there is a liability to the public sector. The Government may use rules that the Office for National Statistics dreamed up for them, but they refuse to accept the point on substance, about which, as Sir John points out, we should be worried.
      9 pm
      Mr. Michael Jack: The hon. Gentleman is speaking with great clarity. Does he agree that our focus on rules may not enable us to examine reality? When Railtrack experienced problems, the Government believed that they were the only body that could sort out the liabilities that are associated with the railway system. If Network Rail ran into unforeseen problems and was in commercial difficulties, who would be there to pick up the pieces? The Government of the day.
      Mr. Davey: The right hon. Gentleman is right, and reaches the core of the debate. The political point is that hon. Members cannot be clear that the Government's finances are being soundly run. We are elected to make those judgments and ensure that the taxpayer is not being saddled with debts that will result in higher taxes or cuts in public expenditure down the line. That lies behind this welcome and important debate.
      I was discussing the difference between the focus of the Comptroller and Auditor General on substance and that of the ONS on rules. A report in The Times on 29 June states:
      "The Times has learnt that the Statistics Commission, the watchdog appointed by the Chancellor to police the national accounts, is to investigate the ONS's view and may seek to overturn it."
      I have no confirmation of that quote; I am sure that The Times had its information on good authority.
      The Government appear to be structuring Network Rail on guidance that the ONS has accepted. However, the ONS watchdog is examining the information and is worried about it. The National Audit Office has made a public statement to express its concern. Hon. Members should take serious note of that, and the Government should provide a proper, full debate in their time so that we can ensure that we know what is going on.
      Rob Marris: The hon. Gentleman has been generous in giving way. His comments suggest a difference of opinion between various watchdog bodies. Against that background, how could the new clause be implemented, when such a range of opinion exists about the way in which figures can be drawn up?
      Mr. Davey: I am not sure whether I understand the hon. Gentleman. The new clause would help matters because it would flush out the issue so that it was in the public domain. That needs to be done. The issue needs greater public debate by Select Committees, including the Public Accounts Committee. If we are to put the future of

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      rail, not simply an individual PFI, into the financial structure, we need greater clarity and transparency. I welcome the new clause because it would help to achieve that.
      Mr. Hoban: The new clause appears to change the rules of accounting for Government liabilities to bring them in line with generally accepted UK accounting practice. I believe that the Comptroller and Auditor General is relying on that practice to state that Network Rail is Government controlled and the liabilities should therefore be on the Government's balance sheet.
      Mr. Davey: The hon. Gentleman is right. I believe that when the Statistics Commission examines the actions of the ONS, it will agree with him and the NAO. That is why the new clause is so welcome.
      Let us consider the debate between the various bodies. The Government have been trying to say, "Well, the ONS has told us that that's okay." Yet the ONS is acting simply in an advisory capacity; it is not making decisions for the Government. It is up to the Government to decide, the ONS to advise and the NAO to audit the decisions. The Government cannot try to escape responsibility by relying on the words of others. The spirit of the Government's rules, to which they presumably try to keep when making such important decisions, is being broken.
      Two key documents cover this matter. One is "Government Accounting", and chapter 26 is the relevant section, for those hon. Members who want to wade through that heavy document. Technical note 1 deals with accounting for PFI transactions. In the case of Network Rail, as was the case for London Underground, the whole framework seems to rest on the edifice of letters of comfort. What does chapter 26.3.1 of "Government Accounting" have to say about letters of comfort? It says:
      "Departments should approach any request for a letter of comfort … with a strong predisposition to reject it."
      If that is the basis for the Government's rules, under which they are setting up the new structure for the rail industry, we should be really worried. The Government's own rules say that they should not do this. The paragraph goes on:
      "Proposals to issue a letter of comfort should therefore be exceptional".
      They should not be the basis for the whole railway industry. The Government seem, effectively, to be breaking their own rules. They know exactly what they are doing, and they are trying to hide this.
      My hon. Friend the Member for Truro and St. Austell anticipated the Government's thinking on this. In November last year, he asked a parliamentary question of the then Under-Secretary at the then Department for Transport, Local Government and the Regions. My hon. Friend asked:
      "what representations he has received from potential financiers of the successor body to Railtrack for non-legally binding assurances from the Government on their support for Railtrack's successor body".
      The answer was:
      "The Government are not anticipating having to provide any non-legally binding assurances on their support. If contingent liabilities are required to be entered into, they will be notified to Parliament as part of the standard procedure."—[Official Report, 23 November 2001; Vol. 375, c. 497W.]
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      In other words, in November, the Government were not intending to go down that route, because they knew that it should be used only in exceptional circumstances. Unfortunately, they have been forced back because of their failure to structure the organisation properly.
      Is it any wonder that people are concerned about this matter? The process is neither transparent nor clear. The Government are not keeping to their own rules and guidance, and Parliament's main watchdog is not happy. The Government must think again, and promote a much wider debate on this issue. If they do not, their whole financial framework for the public finances will be undermined. They must tell us why they favour these off balance sheet approaches.
      Mr. Flight: "Off balance sheet" can mean two different things, but, at least, if these matters are not part of the national balance sheet, the notes to the balance sheet should clearly record everything that is in place. That is what transparency is about.
      Mr. Davey: The hon. Gentleman is right, and if the Government do not do what he is asking, and do not respond to this kind of debate more fully, the Treasury will be acting as the Andersen to the Department for Transport's Enron.
      Mr. Mark Field: With great respect to the hon. Members who spoke earlier, this is the most important debate on Report. I appreciate that we need to move on, so I shall make just a few comments. I entirely agreed with the contribution of my hon. Friend the Member for Arundel and South Downs (Mr. Flight). I share his grave concerns about the Government's off balance sheet approach, and about the way in which, as a result, headline public expenditure is reduced for the purposes of the public accounts.
      I might be able to pre-empt the hon. Member for Wolverhampton, South-West (Rob Marris) by saying that, while I shall not pledge to scrap PFI—in the highly unlikely event that I ever hold office in this place—I have always had grave reservations on the subject, going back to the early 1990s, when I practised as a lawyer in the City of London. The whole PFI project—now superseded by PPP and enhanced, specifically in the last five years, by a considerable number of projects that are now in train and will be for some years to come—was made highly attractive to public sector investors, the construction industry, and the vast number of advisers in the City of London, many of whom I represented, in a pastoral way, at least. Often there has been little evidence of a substantial risk being transferred. That is one of the concerns mentioned by both the previous contributors to the debate. The real test, and the cost to the taxpayer in the longer term, may become apparent only in the second decade of this century, as the projects come to an end.
      My great fear is that we will find that many of the PFI projects have not been well structured and are not good value to the taxpayer. That may become evident, as I said, only in the second decade of the century, which may unfortunately also be a time when, for whatever reason, we are going through a recession. If, in those circumstances, we suddenly have significant expenditure from the public purse, it would be a nightmare.
      I entirely agree with my hon. Friend the Member for Arundel and South Downs that we need greater transparency. I also agree with the hon. Member for

      315
      Kingston and Surbiton (Mr. Davey) that we must ensure that substance, rather than legal form, is the test of any transaction.
      Rob Marris: Will the hon. Gentleman give way?
      Mr. Field: I hope that the hon. Gentleman will forgive me; I know that others want to speak. I hoped that I had pre-empted at least one of his questions.
      I hope that the Minister will make a statement in relation to the new clause. It is unlikely that the clause will win through today, but it is at the core of the grave concerns that have been expressed about the manner in which the Government seek to present their finances. If Government finances and finances generally are to be trusted, it is crucial that they are accompanied by increasing transparency, security and trust. It is clear from the events of recent months around the world that we need a greater degree of trust. It is incumbent on the Government to ensure that the finances and accounts that they present to the country warrant full trust.
      Mr. Hoban: We are fortunate to have the example of Network Rail to illustrate the arguments in favour of the new clause moved by my hon. Friend the Member for Arundel and South Downs (Mr. Flight). As someone who has practised as an accountant in the past, it is clear to me that the Government are exploiting the difference between accounting standards to create a transaction and a structure that get them off the hook in terms of accounting for the liabilities of Network Rail as a debt on their balance sheet.
      As the hon. Member for Kingston and Surbiton (Mr. Davey) observed, the Comptroller and Auditor General recognised that Network Rail was a subsidiary of the Strategic Rail Authority and should therefore be included on the SRA's balance sheet, and on the Government's balance sheet as a public body that should be counted as such. Of course, the Comptroller and Auditor General is not the first to identify that. There was an article in the Financial Times on 20 June, I believe, which reported that the SRA's own auditors, PricewaterhouseCoopers—the firm for which I used to work—had also identified that the debt should be on the SRA's balance sheet and therefore be counted as part of public sector borrowing, and that the Department for Transport had confirmed that.
      Transactions are being deliberately structured to ensure that they are not counted as part of the public borrowing, by ensuring that the Office for National Statistics uses the European standards of accounts 1995. The art form of structuring transactions to meet the form of regulation, rather than ensuring the substance of the transaction that is being accounted, underpins the problems that we have witnessed in the US with Enron. We have seen a rules-driven approach trying to ensure that liabilities are kept off the balance sheet.
      It is important for the Government to recognise that if we require, rightly, the accounts of private companies to present a true and fair view of their assets and liabilities, it is right that the Government's accounts show the very same thing. They should recognise that the definitions used in UK general accounting practices should be used to determine their own liabilities. It is the view of both the CAG and PricewaterhouseCoopers that the SRA has
      316
      dominant control or influence over Network Rail. In its report, the ONS tried to justify this accounting treatment. The SRA is a strategic partner and funder of Network Rail, and its influence is clear. Cleverly structuring transactions so that the majority of board members are from the private sector is not the right way to go about accounting for a £9 billion liability.
      9.15 pm
      We need to accept and recognise the reality of this transaction, which is that the SRA controls Network Rail through its funding and its role as a strategic partner. That is how the transaction is structured at the moment. However, we should also recognise, as the Government did last year, that if things go wrong they will pick up the bill. The Government will act as the lender of last resort, so it is clear that there is a real liability to the taxpayer. That may be seen to be contingent now, but it could well be actual, and the public accounts should recognise that fact.
      This debate is well timed. The example of Network Rail is highly appropriate. The transaction has been structured in such a way as to focus on its form and to get the liability off the public sector balance sheet. That is not the way in which accounting should be done for these transactions. We should ensure that our public accounts are honest, transparent and open.
      Ruth Kelly: It was interesting to listen to this debate, especially to the impassioned defence of the new clause by the hon. Member for Arundel and South Downs (Mr. Flight). I was slightly surprised by the colourful and, dare I say it, slightly intemperate language that he used to describe Government accounting. I am sure that many hon. Members agree with me that the accounting issues that Enron and WorldCom have exposed in the United States are extremely serious and should be dealt with across the globe as well as in the US. They could have serious consequences for investor confidence and for ordinary people working in and around those companies. I do not think that such language is appropriate to describe genuine differences in the United Kingdom in the accounting treatment of various liabilities, some of which have to do with the PFI, but many of which have absolutely nothing to do with it or with the words of the new clause.
      Mr. Flight: I hope that the Minister heard what my hon. Friend the Member for Fareham (Mr. Hoban) said. He is a qualified accountant, and he made the point that the approach that is being followed, which is to exploit the rules rather than the substance, is precisely what Enron off balance sheet accounting was about.
      Ruth Kelly: That is absolutely not the case. I found much of this debate confused. When the hon. Gentleman considers the arguments as I respond to the debate, perhaps he will withdraw this completely unnecessary and muddled new clause.
      The new clause would require the Government to follow generally accepted accounting practice in preparing the Red Book in addition to the code of fiscal stability. It would also require us to publish an aggregate figure for liabilities under the PFI I intend to deal with each of those points in turn.

      317
      First, I should like to point out to hon. Members, especially Opposition Members, that the Government already follow GAAP. Spending data in the Red Book, including commitments under the PFI, come from Departments' accounts. We are one of the few Governments in the world to require by law Departments' accounts to follow GAAP.
      I am also surprised that the hon. Gentleman has suddenly decided to retreat from the Bill that was introduced with bipartisan agreement—now the Government Resources and Accounts Act 2000—which was part of a process that started in 1994 and was described by the then Chancellor and the Conservative Government as the most important financial reform since Gladstone. I am delighted to see that the hon. Member for Kingston and Surbiton (Mr. Davey) accepts that fact.
      Mr. Edward Davey: May I say how much I agree with that statement? It was an extremely important reform. However, as the hon. Member for Arundel and South Downs (Mr. Flight) said, in Committee we debated the way in which the Government treat contingent liabilities. Neither Conservative nor Liberal Democrat Members were happy about the way in which contingent liabilities were being treated under resource accounting and budgeting. This is not a new point, therefore—we have been arguing this for some time.
      Ruth Kelly: I accept the point made in good faith by the hon. Gentleman, and will deal with the treatment of contingent liabilities under PFI projects in due course.
      The Government Resources and Accounts Act 2000 was passed as a result of the transformation of public accounts under resource accounting and budgeting. Section 5(3)(b) provides that a Department's accounts must
      "conform to generally accepted accounting practice subject to such adaptations as are necessary in the context of departmental accounts".
      The adaptations are necessary because GAAP, desired in the main for the private sector, does not have to deal with issues such as military assets or nuclear decommissioning liabilities that we have to deal with in the public sector.
      We have an independent statutory advisory board—the financial reporting advisory board—to advise us on the application of GAAP to the public sector. It was this Government who put that independent advisory board on a statutory basis, and we have never rejected its advice in the five years of its existence. We have a system for public sector financial reporting that is among the most advanced and transparent in the world. I believe that this part of the new clause is therefore superfluous, but it is also confused.
      There is a wealth of data in the Red Book not covered by GAAP, because GAAP cannot say anything about unemployment assumptions, for example, or oil revenues. Instead, under the very Finance Act that the new clause seeks to amend, we subject changes to these assumptions to the audit by the independent National Audit Office. In practice, the new clause would require these numbers to conform to GAAP, which is silent on these issues.
      The second part of the new clause would require the Government to publish an aggregate figure for all financial liabilities actual and contingent under the PFI.
      318
      Again, I believe that that is misleading. First, the Opposition should look at table C19 of the latest Red Book, in which the Government published their estimated payments under the PFI going up to 2028, consistent with the audited data in Departments' accounts.
      Mr. Flight: I readily acknowledge that the totals add up to £98 billion, as I mentioned.
      Ruth Kelly: The new clause wants a figure for possible liabilities, but PFI rarely gives rise to contingent liabilities. PFI deals are contracts for the provision of a service. We pay only for the services received. In the event of a default, the financiers are required to look for alternative service providers. If that fails, which would be very rare, termination proceedings would begin. That is the course of normal business—it does not give rise to a contingent liability in any proper sense of the term.
      In a small number of specific cases involving public-private partnerships, we have provided for some sort of public formal guarantee to the financiers. One example is London Underground, where a letter of comfort sets out different sets of circumstances whereby the Government would underwrite some of the financiers' commitments. That letter was of course put before Parliament, as we are required to do and as happens in the normal course of events. The Government report to Parliament all such letters of comfort and all contingent liabilities that arise which account for more than £100,000.
      Mr. Jack: If a PFI hospital deal ran into trouble and there was a gap between the originator of the project and the successor body taking over that required some degree of financing, would that not be a liability? If so, how do the Government account for it?
      Ruth Kelly: If a genuine contingent liability exists, the Government publish that contingent liability as part of the supplementary statement to the Consolidated Fund accounts. Details by Department are available in the notes to Departments' audited accounts, which, again, are laid before the House. It is hard to see how the system could be any more transparent than it is at the moment.
      Mr. Flight: How on earth could the Minister say to me earlier that a £9 billion guarantee on Network Rail would not need to be disclosed as a contingent liability?
      Ruth Kelly: I will come to the treatment of Network Rail in a moment, but I should point out that Network Rail does not actually count as a PFI and, strictly speaking, is not within the terms of the debate. However, I shall be happy to deal with it in a moment.
      Opposition Members have charged us with using the PFI and the PPP as a ruse to keep numbers off the balance sheet so that they do not show up in the Government's accounts. That is utterly untrue and complete nonsense. Balance sheet treatment in this country has to be confirmed by independent audit. Recent PFIs and PPPs—including the London Underground, prisons and the second Severn river crossing—are all on the balance sheet; the trend increasingly is to put them on the balance sheet. The issue of whether or not there is a transfer of risk is decided independently. We take independent

      319
      advice from our advisory body, which we put on a statutory basis. We could not have a more transparent system.
      Adam Price: Are the devolved Administrations free to enter into their own contingent liabilities, or must they seek Treasury approval?
      Ruth Kelly: I will have to check that point and write to the hon. Gentleman. If contingent liabilities arise in UK Departments, they have to be reported to Parliament, as is clear in the treatment of those liabilities in Departments' accounts.
      Rob Marris: I confess that I used to be a solicitor before entering this House, and not an accountant—[HON. MEMBERS: "Oh!"] I am quite proud of that, although others may not be. There are differences of opinion, so could my hon. Friend explain what the Government understand by the term "contingent liability"? I confess that I do not exactly understand it. I thought I did before the debate began, but I am not sure now whether it has to do with the probability of a risk occurring, a possibility or a tiny possibility. Could my hon. Friend elucidate?
      Ruth Kelly: The word "contingent" has different meanings in different contexts and contingent liability for a PFI is slightly different from contingent liabilities arising in other contexts. We have consistent treatment, in which if a liability is possible or likely, it is reported to Parliament. If a liability is remote, it is treated differently, as the hon. Member for Arundel and South Downs has said.
      The important thing is that we have a statutory independent financial reporting advisory board, and a framework within which the decisions are taken. In considering the case of Network Rail, we have an independent statistical body—the Office for National Statistics—which applies internationally recognised national accounting standards that are used to compare economies internationally.
      Clearly, in the treatment of complex statistical issues other bodies and individuals will take different views in certain circumstances. That is precisely what has happened in the case of Network Rail. The National Audit Office made a different judgment about how liabilities arising should be treated. Do hon. Members really want me to say that we should go against the recommendation of the Office for National Statistics and use a system for Network Rail that does not apply internationally recognised accounting standards, and which treats the matter in a different way?
      To reassure the House that we take this issue seriously, we have set up an independent statistics commission that examines our treatment of accounting and whether we treat these issues in an unbiased, objective and professional way. In due course, it will reach a conclusion on whether the treatment of Network Rail is the appropriate one. I suggest that we wait for the commission's review before jumping to a premature conclusion that is based on what Opposition Members have said today.
      9.30 pm
      This country has one of the most transparent accounting frameworks in the world. Under this Government, we
      320
      have taken an enormous step forward in the treatment of accounting. We have introduced resource accounting legislation and put the financial reporting advisory board, which advises us, on a statutory basis. As I said, we have also set up a statistics commission, which can take an independent view of our accounting and of our statistical processes and treatment. Hon. Members should give the Government some credit for taking this process forward. They should acknowledge the reforms introduced by this Government to ensure that our public sector financial statements are among the most sophisticated and transparent in the world. Those statements fully accord with generally accepted accounting practice and with some of the highest standards in the private or public sector anywhere in the world. On that basis, Opposition Members should withdraw the new clause.
      Mr. Flight: I was surprised at the Financial Secretary's sticking to the official line. The City of London and the markets are focusing on the growing totals of contingent liabilities and private finance initiative contracted payments. In particular, they are asking about defence—an area on which there is no information at all. It is well known that the Treasury went to great trouble to establish the Network Rail structure in such a way that the view could be expressed that borrowings would not count as a public sector liability.
      The new clause is self-evidently a probing one; it is about substance and getting the substance right, rather than using rules for convenience. The Financial Secretary did not discuss the other side of the coin—the manifest rigging of the public sector comparator to justify PFI deals in the first place. On putting together the different pieces of the jigsaw, virtually all public sector capital investment is off balance sheet via PFIs or public-private partnerships. The precise substance of the Government's liability in relation to PPP and PFI deals is simply not known.
      We want a transparent, whiter-than-white system that is more demanding than that applying to the private sector, which it manifestly is not. It is extremely difficult to get information, as the hon. Member for Kingston and Surbiton (Mr. Davey) has discovered. The Government will pay the price if they do not clean up this area quickly.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 176, Noes 296.

      Division No. 289]

      [9.34 pm

      AYES

      Allan, Richard

      Brady, Graham

      Amess, David

      Brazier, Julian

      Ancram. Rt Hon Michael

      Brooke, Mrs Annette L

      Arbuthnot, Rt Hon James

      Browning, Mrs Angela

      Atkinson, David (Boutinth E)

      Bruce, Malcolm

      Atkinson, Peter (Hexham)

      Burnett, John

      Bacon, Richard

      Burns, Simon

      Baron, John

      Burnside, David

      Barrett, John

      Butterfill, John

      Beggs, Roy

      Cable, Dr Vincent

      Beith, Rt Hon A J

      Calton, Mrs Patsy

      Bellingham, Henry

      Cameron, David

      Bercow, John

      Campbell, Rt Hon Menzies (NE Fife)

      Beresford, Sir Paul

      Blunt, Crispin

      Carmichael, Alistair

      Boswell, Tim

      Cash, William

      Bottomley, Peter (Worthing W)

      Chapman, Sir Sydney (Chipping Barnet)

      Bottomley, Rt Hon Virginia

      321

      Chidgey, David

      Moore, Michael

      Chope, Christopher

      Moss, Malcolm

      Clappison, James

      Murrison, Dr Andrew

      Clifton—Brown, Geoffrey

      Norman. Archie

      Cotter, Brian

      Osborne, George (Tatton)

      Gran, James

      Page, Richard

      Davey, Edward (Kingston)

      Paice, James

      Davies, Quentin (Grantham)

      Paterson, Owen

      Davis, Rt Hon David (Haltemprice)

      Price. Adam

      Djanogly, Jonathan

      Prisk, Mark

      Dorrell, Rt Hon Stephen

      Redwood, Rt Hon John

      Duncan, Peter (Galloway)

      Reid, Alan (Argyll & Bute)

      Evans, Nigel

      Render, David

      Ewing, Annabelle

      Robathan, Andrew

      Field, Mark (Cities of London)

      Robertson, Hugh (Faversham)

      Flight, Howard

      Robertson, Laurence (Tewk'b'ry)

      Flook, Adrian

      Roe, Mrs Marion

      Forth, Rt Hon Eric

      Rosindell, Andrew

      Foster, Don (Bath)

      Ruffley, David

      Francois, Mark

      Russell, Bob (Colchester)

      Garnier, Edward

      Salmond, Alex

      George, Andrew (St Ives)

      Sanders, Adrian

      Gibb, Nick

      Sayeed, Jonathan

      Goodman, Paul

      Selous, Andrew

      Grayling, Chris

      Shephard, Rt Hon Mrs Gillian

      Green, Matthew (Ludlow)

      Simmonds, Mark

      Greenway, John

      Simpson, Keith (Mid-Norfolk)

      Grieve, Dominic

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

      Hague, Rt Hon William

      Smyth, Rev Martin (Belfast S)

      Hammond, Philip

      Spelman, Mrs Caroline

      Hancock, Mike

      Spicer, Sir Michael

      Harvey, Nick

      Spink, Bob

      Hawkins, Nick

      Spring, Richard

      Heald, Oliver

      Stanley, Rt Hon Sir John

      Heath, David

      Steen, Anthony

      Heathcoat—Amory, Rt Hon David

      Streeter, Gary

      Hermon, Lady

      Stunell, Andrew

      Hoban, Mark

      Swayne, Desmond

      Hogg, Rt Hon Douglas

      Swire, Hugo

      Holmes, Paul

      Syms, Robert

      Horam, John

      Tapsell, Sir Peter

      Howard, Rt Hon Michael

      Taylor, John (Solihull)

      Howarth. Gerald (Aldershot)

      Taylor, Matthew (Truro)

      Hunter, Andrew

      Taylor, Sir Teddy

      Jack, Rt Hon Michael

      Thomas, Simon (Ceredigion)

      Jackson, Robert (Wantage)

      Thurso, John

      Jenkin, Bernard

      Tonge, Dr Jenny

      Johnson, Boris (Henley)

      Turner, Andrew (Isle of Wight)

      Jones, Nigel (Cheltenham)

      Tyler, Paul

      Kirkbride, Miss Julie

      Tyrie, Andrew

      Knight, Rt Hon Greg (E Yorkshire)

      Walter, Robert

      Laing, Mrs Eleanor

      Waterson. Nigel

      Lait, Mrs Jacqui

      Watkinson. Angela

      Lamb, Norman

      Webb, Steve

      Laws, David

      Weir, Michael

      Letwin, Oliver

      Widdecombe, Rt Hon Miss Ann

      Lewis, Dr Julian (New Forest E)

      Wiggin, Bill

      Liddell—Grainger, Ian

      Wilkinson, John

      Lidington, David

      Willetts, David

      Lilley, Rt Hon Peter

      Williams, Hywel (Caernarfon)

      Llwyd, Elfyn

      Williams, Roger (Brecon)

      Loughton, Tim

      Willis, Phil

      Luff, Peter

      Wilshire, David

      MacKay, Rt Hon Andrew

      Winterton, Ann (Congleton)

      Maclean, Rt Hon David

      Winterton, Sir Nicholas (Macclesfield)

      McLoughlin, Patrick

      Malins, Humfrey

      Yeo, Tim

      Maples, John

      Young, Rt Hon Sir George

      Mates, Michael

      Younger-Ross, Richard

      Mawhinney, Rt Hon Sir Brian

      May. Mrs Theresa

      Tellers for the Ayes:

      Mercer, Patrick

      Mr. Charles Hendry and

      Mitchell, Andrew (Sutton Coldfield)

      Mrs. Cheryl Gillan.

      322

      NOES

      Abbott, Ms Diane

      Davies, Geraint (Croydon C)

      Adams, Mrs Irene (Paisley N)

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

      Ainger, Nick

      Ainsworth, Bob (Cov'try NE)

      Dawson, Hilton

      Allen, Graham

      Denham, Rt Hon John

      Anderson, Rt Hon Donald (Swansea E)

      Dhanda, Parmjit

      Dobbin, Jim

      Anderson, Janet (Rossendale)

      Donohoe, Brian H

      Armstrong, Rt Hon Ms Hilary

      Doran, Frank

      Atkins, Charlotte

      Dowd, Jim

      Austin, John

      Drew, David

      Bailey, Adrian

      Eagle. Angela (Wallasey)

      Baird, Vera

      Eagle. Maria (L'pool Garston)

      Banks, Tony

      Edwards, Huw

      Barnes, Harry

      Efford. Clive

      Battle, John

      Ennis, Jeff

      Beckett. Rt Hon Margaret

      Etherington, Bill

      Begg, Miss Anne

      Field, Rt Hon Frank (Birkenhead)

      Benn, Hilary

      Fisher, Mark

      Bennett, Andrew

      Fitzpatrick, Jim

      Berry, Roger

      Flint, Caroline

      Best, Harold

      Flynn, Paul

      Betts, Clive

      Follett, Barbara

      Blackman, Liz

      Foster, Rt Hon Derek

      Blizzard, Bob

      Foster, Michael (Worcester)

      Borrow, David

      Foster, Michael Jabez (Hastings)

      Bradley, Rt Hon Keith (Wrthington)

      Francis, Dr Hywel

      Bradley, Peter (The Wrekin)

      Gapes, Mike

      Brennan, Kevin

      Gerrard, Neil

      Brown, Russell (Dumfries)

      Gibson, Dr Ian

      Browne, Desmond

      Godsiff, Roger

      Bryant, Chris

      Goggins, Paul

      Burden. Richard

      Griffiths, Win (Bridgend)

      Burgon. Colin

      Grogan, John

      Burnham, Andy

      Hall, Patrick (Bedford)

      Campbell, Alan (Tynemouth)

      Hamilton, David (Midlothian)

      Campbell, Mrs Anne (C'bridge)

      Hanson, David

      Campbell, Ronnie (Blyth V)

      Harris. Tom (Glasgow Cathcart)

      Caplin, Ivor

      Healey, John

      Casale, Roger

      Henderson, Doug (Newcastle N)

      Caton, Martin

      Henderson, Ivan (Harwich)

      Cawsey. Ian

      Hendrick, Mark

      Challen, Colin

      Hepburn, Stephen

      Chapman, Ben (Wirral S)

      Heppell, John

      Chaytor, David

      Heyes, David

      Clapham, Michael

      Hill, Keith

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hinchliffe, David

      Hodge, Margaret

      Clark, Paul (Gillingham)

      Hood, Jimmy

      Clarke, Rt Hon Charles (Norwich S)

      Hope, Phil

      Hopkins, Kelvin

      Clarke, Rt Hon Tom (Coatbridge)

      Howarth, Rt Hon Alan (Newport E)

      Clarke, Tony (Northampton S)

      Howarth, George (Knowsley N)

      Clelland, David

      Hoyle. Lindsay

      Clwyd, Ann

      Hughes, Kevin (Doncaster N)

      Coaker. Vernon

      Humble, Mrs Joan

      Coffey, Ms Ann

      Hurst, Alan

      Colman, Tony

      Hutton, Rt Hon John

      Connarty, Michael

      Illsley, Eric

      Cook, Frank (Stockton N)

      Irranca-Davies, Huw

      Cook, Rt Hon Robin (Livingston)

      Jamieson, David

      Cousins, Jim

      Jenkins, Brian

      Cox, Tom

      Jones, Helen (Warrington N)

      Cranston, Ross

      Jones, Kevan (N Durham)

      Crausby. David

      Jones, Lynne (Selly Oak)

      Cruddas, Jon

      Jones, Martyn (Clwyd S)

      Cryer, John (Hornchurch)

      Joyce, Eric

      Cummings, John

      Kaufman, Rt Hon Gerald

      Cunningham, Jim (Cov'try S)

      Keen. Alan (Feltham & Heston)

      Cunningham, Tony (Workington)

      Keen, Ann (Brentford & lsleworth)

      Curtis—Thomas, Mrs Claire

      Kelly, Ruth

      Darling, Rt Hon Alistair

      Kidney, David

      Davey, Valerie (Bristol W)

      Kilfoyle, Peter

      David, Wayne

      King, Andy (Rugby & Kenilworth)

      Davies, Rt Hon Denzil (Llanelli)

      King, Ms Oona (Bethnal Green)

      323

      Knight, Jim (S Dorset)

      Pound, Stephen

      Kumar, Dr Ashok

      Prentice, Ms Bridget (Lewisham E)

      Ladyman, Dr Stephen

      Prentice, Gordon (Pendle)

      Lawrence. Mrs Jackie

      Prescott, Rt Hon John

      Laxton, Bob

      Primarolo, Dawn

      Lazarowicz, Mark

      Purchase, Ken

      Lepper, David

      Purnell, James

      Leslie, Christopher

      Quin, Rt Hon Joyce

      Levitt, Tom

      Quinn, Lawrie

      Lewis, Ivan (Bury S)

      Rammell, Bill

      Lewis, Terry (Worsley)

      Rapson, Syd

      Reed, Andy (Loughborough)

      Linton Martin

      Reid, Rt Hon Dr John (Hamilton N)

      Lloyd, Tony

      Reed, Andy Loughborough)

      Linton, Martin

      Reid, Rt Hon Dr John (Hamilton N)

      Love, Andrew

      Robertson, John (Glasgow Anniesland)

      Lucas, Ian

      Roche, Mrs Barbara

      Luke, lain

      Rooney, Terry

      McAvoy, Thomas

      Ross, Ernie

      McCafferty, Chris

      Roy, Frank

      McCartney, Rt Hon Ian

      Ruane, Chris

      McDonnell, John

      Ruddock, Joan

      McFall, John

      Ryan, Joan

      McIsaac, Shona

      Sarwar, Mohammad

      McKechin, Ann

      Savidge, Malcolm

      McKenna, Rosemary

      Sawford, Phil

      Mackinlay, Andrew

      Sedgemore, Brian

      MacShane, Denis

      Sheerman, Barry

      McWalter, Tony

      Sheridan, Jim

      McWilliam, John

      Simon, Siôn

      Mahnnood, Khalid

      Simpson, Alan (Nottingham S)

      Mahon, Mrs Alice

      Singh, Marsha

      Mallaber, Judy

      Skinner, Dennis

      Hon Rt, Hon Peter

      Smith, Rt Hon Chris (Islington S)

      Mann John

      Smith, Geraldine (Morecambe)

      Marris, Rob

      Smith, Llew (Blaenau Gwent)

      Marsden, Gordon (Blackpool S)

      Southworth, Helen

      Marshall, David (Shettleston)

      Spellar, Rt Hon John

      Steinberg, Gerry

      Marshall, Jim (Leicester S)

      Stewart, Ian (Eccles)

      Martlew. Eric

      Stinchcombe, Paul

      Meacher, Rt Hon Michael

      Stoate, Dr Howard

      Marron, Gillian

      Strang, Rt Hon Dr Gavin

      Michael, Rt Hon Alun

      Stuart, Ms Gisela

      Miliband, David

      Sutcliffe, Gerry

      Miller, Andrew

      Tami, Mark

      Mitchell, Austin (Gt Grimsby)

      Taylor, Rt Hon Ann (Dewsbury)

      Moffatt, Laura

      Taylor, Ms Dari (Stockton S)

      Mole, Chris

      Taylor, David (NW Leics)

      Moran, Margaret

      Thomas, Gareth (Clwyd W)

      Morgan, Julie

      Thomas, Gareth (Harrow W)

      Morley, Elliot

      Tipping, Paddy

      Morris, Rt Hon Estelle

      Todd, Mark

      Mountford, Kali

      Touhig, Don

      Mudie, George

      Trickett, Jon

      Mullin, Chris

      Turner, Dennis (Wolverh'lon SE)

      Munn, Ms Meg

      Turner, Neil (Wigan)

      Murphy, Denis (Wansbeck)

      Twigg, Derek (Halton)

      Murphy, Jim (Eastwood)

      Twigg, Stephen (Enfield)

      Murphy, Rt Hon Paul (Torfaen)

      Tynan, Bill

      Vaz, Keith

      Naysmith, Dr Doug

      O'Hara, Edward

      Vis, Dr Rudi

      Olner, Bill

      Walley, Ms Joan

      Ward, Claire

      O'Neill, Martin

      Wareing, Robert N

      Organ, Diana

      Watson, Tom

      Osborne, Sandra (Ayr)

      Watts, David

      Palmer, Dr Nick

      White, Brian

      Pearson, Ian

      Whitehead, Dr Alan

      Perham, Linda

      Williams, Rt Hon Alan (Swansea W)

      Picking, Anne

      Pickthall, Colin

      Williams, Mrs Betty (Convey)

      Pike, Peter

      Wilson. Brian

      Plaskitt, James

      Winnick, David

      Pollard, Kerry

      Winterton, Ms Rosie (Doncaster C)

      Pond, Chris

      Woodward, Shaun

      Pope, Greg

      Wray, James

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      Wright, Anthony D (Gt Yarmouth)

      Tellers for the Noes:

      Wright, David (Telford)

      Angela Smith and

      Wright, Tony (Cannock)

      Mr. Fraser Kemp.

      Question accordingly negatived.

    New Clause 6

      STATEMENT OF LIABILITY TO INCOME TAX
      '. After section 59B of the Taxes Management Act 1970 insert— "59BA Statement of liability to income tax
      (1) This section applies to any person (the taxpayer) who is liable to pay income tax.
      (2) The Board shall provide to each taxpayer, following the agreement of his assessment to income tax, a statement showing for the year of assessment—

      (a) the taxpayer's total liability to income tax ('income tax liability') for that year;

      (b) the contribution of income tax expressed as a percentage of the total annual tax take for the United Kingdom for the same year of assessment ('the income tax percentage');

      (c) the proportion expressed as a percentage of the total annual tax take for the United Kingdom for the same year of assessment that was allocated to each of the Departments of State listed in subsection (2) below ('the departmental percentage'); and

      (d) the amount in pounds sterling of the taxpayer's income tax liability that is represented for each of the Departments of State listed in subsection (2) below calculated as follows—

      Income tax liability x the income tax percentage x the department percentage.
      (2) A department percentage shall be provided for each of the following—

      (a) the Department of Health;

      (b) the Department for Transport;

      (c) the Department for Education and Skills;

      (d) the Home Office;

      (e) the Department for Work and Pensions;

      (f) the Department of Trade and Industry;

      (g) the Department for the Environment, Food and Rural Affairs; and

      (h) the Department for Culture, Media and Sport.".'.—[Mr. Bercow.]

      Brought up, and read the First time.
      Mr. Bercow: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to discuss new clause 18—Timing of announcement of all income tax allowances—
      'In section 257C(3) of the Taxes Act 1988, at the end—
      "The order shall be made by 31st December following the preceding September referred to in subsection (1).".'.
      Mr. Bercow: I have a sense that the patience of the House might soon be exhausted if hon. Members are inclined to dilate excessively on the remaining new clauses for our consideration. I am conscious of the patience threshold of Members, as you will testify, Mr. Speaker, and I shall therefore keep my remarks

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      genuinely brief. Labour Members should savour that consciousness while it lasts, as it may not be reproduced very soon.
      Dawn Primarolo: May I say how much engagement suits the hon. Gentleman? His new-found brevity is no doubt a product of his haste to spend his time—as we would all like to do occasionally—with loved ones and family.
      Mr. Bercow: As the Paymaster General can easily discern, I am thirsting for the company of my beloved, who said to me, although she is a keen supporter of mine, "Why, dear, do you always think it necessary to avoid using one word when a hundred would do?" She might not admit it, but that is what she said.
      The subject matter in question is the statement of liability to income tax. The thrust of the new clause, which is tabled in the names of the shadow Chancellor, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), other of my hon. Friends and I, is to make explicit what people pay, the effect of their contributions, and how resources are divided between the areas of Government responsibility. Specifically, people pay their taxes and, in return, they want decent health care, a quality transport system, adequate education, the best possible protection against crime, a guarantee of financial security and proper but minimum interference in the affairs of industry and commerce. If they live in rural areas, they are concerned about the rural environment. In addition, the Department for Culture, Media and Sport is mentioned in subsection (2)(h) of the new clause. It has responsibilities and money goes to it. Therefore, we need to know what we receive in return.
      The thrust of the new clause is an attempt to move towards more open government, requiring transparency about where Government money is spent and an easy-to-follow format for the lay person. It is not, however, a move towards hypothecation of tax. The Government publish all the information in other formats, but the new clause would merely make it easier for individuals to understand Government spending.
      As hon. Members can testify from their experience, a number of councils provide similar information on the council tax bills sent to each household. Conservative Members do not understand why the Government cannot operate on a similar principle in relation to the payment proceeds and purposes of income tax. It should not be costly to follow the spirit and content of the new clause, because the same calculations could apply to each taxpayer. A uniform system could operate, and it would not create a great administrative burden. It should be relatively straightforward to make computer-produced statements, about which we know the Government are very keen.
      The new clause takes the form of a probing amendment. It does not make an explicit commitment on the part of the Opposition, but it would require the Revenue to produce a statement of an individual's income tax liability and the proportion of that liability that would be spent in each Department. It is a straightforward and eminently reasonable proposal.
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      I feel almost 100 per cent. confident that the Paymaster General, if she is in one of her more eminently reasonable moods, will eschew the opportunity of a long reply and make it clear that no Labour Member has any intention of objecting to the new clause. With the hoped for—although not guaranteed—support of the Liberal Democrats, I trust that we can be unanimous on the subject and dance round the mulberry bush together in support of new clause 6.
      Mr. Edward Davey: The reputation of the hon. Member for Buckingham (Mr. Bercow) for speaking without hesitation, repetition or deviation once drove me to suggest that he was a suitable candidate for "Just a Minute". That point may not apply today, because he has been brief and witty.
      I assure him that the Liberal Democrats support the new clause. We have advocated such a proposal, under what we describe as our citizens' tax contract, since 1993. Therefore, it would be odd if we did not support the new clause. However, I have one or two concerns about its detail. Perhaps I did not hear the hon. Gentleman clearly, but he did not appear to explain why the Ministry of Defence was not covered by subsection (2).
      Rob Morris: And the Foreign Office.
      Mr. Davey: The Foreign Office, and one or two other relevant agencies. I do not want to provoke the hon. Member for Buckingham, because I want to move on.
      Mr. Bercow rose—
      Mr. Davey: The hon. Gentleman has been provoked.
      Mr. Bercow: I am easily provoked, as you will be aware, Mr. Speaker. I was being selective and illustrative about the new clause rather than pedantic and exhaustive. As a person of generous spirit, I always thought that the hon. Gentleman preferred the former combination to the latter. I hope that he will not now disabuse me.
      Mr. Davey: Although it is tempting to indulge in a little banter with the hon. Gentleman, I am sure that hon. Members would prefer me to discuss new clause 18.
      The new clause is similar to a new clause that I tabled to the Finance Bill 2000. I will not rehearse the speech that I gave then, but hon. Members who are interested can read it at columns 268–69 of Hansard for 18 July 2000. It is also on our website.
      The new clauses have the same purpose: to avoid unnecessary bureaucracy, expense and anxiety among vulnerable people. Let me explain. Relatively recently the Government changed the way in which they send out pay-as-you-earn notices of coding. I raised that in 2000 because of the Government's practice of announcing personal allowances for the following year for most employees in the pre-Budget report, but their failure to announce the allowances for pensioners. That caused confusion among pensioners who received a notice of coding in the spring and another one after the Budget. They wondered what was going on because the coding had changed following the Budget, and between April and May they effectively gave a tax-free loan to the Government because their tax position had been based on non-indexed allowances.

      327
      We argued that the Government should amend the Taxes Act 1988. They did not accept that, but changed the practice by administrative decision, which was welcome. They were clearly moved by the strength of the argument, especially the case put forward by the Low Incomes Tax Reform Group, and this is my first opportunity to salute them for that. However, in making the change and announcing the age-related allowances in the pre-Budget report, the Government did not announce the allowances for the following year for blind people. Although pensioners escaped the double tax code notification and related problems, blind people did not. So the Government need to go a little further.
      The problem also suggests that, rather than making the change by administrative decision, it might be better to put it beyond doubt by including it in law. That would allow us to avoid the problems that arise for blind or elderly people if someone in a Department is forgetful and they receive two coding notices. That situation is confusing and people end up giving an interest-free loan to the Government. It is a small but important point because some of our vulnerable citizens experience unnecessary anxiety. I hope that if the Government do not accept the new clause, they will make that administrative decision now and table an amendment to that effect to next year's Finance Bill.
      Dawn Primarolo: New clauses 6 and 18 are aimed at giving greater information and clarity to the taxpayer. I regret that I cannot accept either new clause, but I will outline some of the problems that arise and the issues that need to be settled.
      New clause 6 attempts to provide every taxpayer with a statement to show how their income tax liability is allocated in spending terms. Telling taxpayers how their taxes are spent is something that the Government take seriously. We are doing that in a number of ways, but always want to improve on such practices. I want to explain why new clause 6 does not provide the best method. I listened very carefully to the points made by the hon. Member for Buckingham (Mr. Bercow), and I shall continue to reflect on them, but I shall briefly put to him the major difficulties with the new clause.
      10 pm
      First, the new clause runs counter to the principle underlying the Consolidated Fund because it asks us to track £1 of tax from a taxpayer into the Consolidated Fund and then back out to a particular Department. I accept the principle being put forward by the hon. Gentleman about giving indications of how taxpayers' money is spent, and we do our best to do that, but this route would be bureaucratic and difficult.
      In addition, the apportionment calculation in the new clause simply will not work. I appreciate the point that is being made, but by multiplying an individual's income tax liability by the percentage of the total UK tax take that the income represents, the apportionment proposed in subsection (2)(d) can never add up to 100 per cent. of the individual's income tax liability. Other hon. Members pointed out that the list of Departments is not exhaustive and perhaps that is where the 100 per cent. is made up. However, that runs counter to the point that the hon. Member for Buckingham was trying to make about people understanding where their money goes.
      There is a second problem with the new clause. Many of those who are not in self-assessment, such as employees taxed under PAYE, currently have no reason to provide the Inland Revenue with details of investment income taxed at source, unless they are liable to be taxed at the higher rate or are due a repayment. To provide such taxpayers with a statement of their total liability to income tax, the Inland Revenue would be required to obtain details of the total tax paid by each individual, and that would effectively bring millions of taxpayers into self-assessment, not for the purposes of collecting tax, but merely to provide them with a statement of their share of income tax liability, notionally apportioned. I do not think that the hon. Gentleman wanted to achieve that.
      To be fair to the hon. Gentleman, what he is asking in his new clause is that the total tax paid by an individual over a tax year should be calculated, but that information, which would have to be accurate, is not held in one source. The new clause would require a statement to be issued annually to every one of the 26 million income tax payers, showing their total tax liability for the year, including PAYE. That would be a huge task, and it is a costly way of trying to achieve the hon. Gentleman's aim.
      In speaking to the new clause, the hon. Gentleman was good enough to say that it was a probing amendment, and that he wanted to push the Government and, presumably, to hear me say that we will continue to look for ways to improve our method of accounting to the taxpayer for the spending of tax moneys. Although the hon. Gentleman will want to return to the matter, I hope that he accepts that the intention is shared across the House but this particular method is not the best way of fulfilling it. I should be grateful if he would allow me to consider the matter for a little longer.
      Mr. Bercow: The right hon. Lady's tones are mellifluous and her forensic parliamentary skill was on display for all to see, but I suggest that the speech that she has just delivered represents the triumph, the ultimate victory, of the Treasury anorak. If ever there were a case of a Minister being guided by those whom we cannot name, but whom we can see if we look fairly carefully, to such an extent as to offer the House an extraordinarily over-zealous interpretation of what a rather humble hon. Member had in mind, this was such a case. The Minister knows that I am a very straightforward sort of bloke. I do not go in for the high-powered stuff—
      Madam Deputy Speaker (Sylvia Heal): Order. That is rather long for an intervention.
      Mr. Bercow: With the greatest respect, Madam Deputy Speaker, I was not under the impression that I was making an intervention. I thought that the Minister had finished her speech.
      Dawn Primarolo indicated dissent.
      Mr. Bercow: I beg your pardon, Madam Deputy Speaker, and I beg the Minister's pardon. In that case, let me simply say that the Minister is guilty of over-literal interpretation. What my hon. Friends, the taxpayer and I want to know is how money is divided between different areas of responsibility. I rest my case.
      Dawn Primarolo: I hope that I did not unintentionally contribute to the hon. Gentleman's misunderstanding. I was giving way to him before responding to new clause 18.

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      Perhaps it is a mistake for a Minister to do this, but I was trying to give a considered response detailing why a particular mechanism would not work. I sometimes feel that I cannot win: if I brush an amendment aside without explanation, I have not dealt with it properly, and if I make an honest attempt to explain the real difficulties, I am accused of being an anorak. Oh well, never mind.
      Around the time of the pre-Budget report and the Budget, the Government provide summary leaflets that provide a breakdown of the total revenue raised and the expenditure divided by Government Departments, as well as a breakdown of the sources of tax income. I thought—perhaps mistakenly—that that information was available to every taxpayer. It is certainly on the internet. I assumed that new clause 6 was designed to tease out whether that provision could be refined to an individual basis, so I was trying to explain some of the hurdles to the hon. Gentleman. I understand his impatience. I am sure that I would feel the same way if I were in opposition and he were the Minister making this speech.
      New clause 18, to which the hon. Member for Kingston and Surbiton (Mr. Davey) spoke, deals with the timing of the announcements on income tax allowances. I regard it as a reasonable proposal, but for the reasons that I shall outline, I am not prepared to adopt it as an amendment to the Bill.
      Indexation orders specify the level of allowances that should apply if they were to increase in line with inflation, but Parliament may determine otherwise. The orders do not set the level of the allowance or the rate bands. In effect, they provide formal confirmation of what the amount would be if indexation were to apply, which means that they are made even if statutory indexation is to be overridden—as it was during discussions on the Budget. For example, in clause 29 we set the level of the personal allowances for those aged 65 to 74 at £6,610 for 2003–04, which on current forecasts is £390 over indexation. We debated in Committee why it was necessary to do that. In any event, we published the indexed allowances in the pre-Budget report, in table 2 of the tax ready reckoner. The actual figures have not been pre-announced, but the information is available on the Treasury website. As part of our obligation under legislation, we also covered most of the allowances in the Treasury order that was made on the day of the pre-Budget report's publication. In the past two years, we have announced the level of pensioner allowances in the pre-Budget report. For 2003–04, we have already set the policy on the pensioner allowance and we should be able to confirm the figures once we know the value of the retail price index.
      However, the crux of the matter—I will be perfectly straightforward with the hon. Member for Kingston and Surbiton in putting the Government's view—is that it is wrong to commit Governments for ever to announcing all allowances in the pre-Budget report. Chancellors must retain flexibility in the timing of decisions, so that they can mesh with the timetable of other policies or take account of the overall fiscal position on the basis of the latest available economic data. Current legislation ensures that indexation orders can be made at any time up to the start of the next year, once the retail prices index is known. In our view, it is better to make the order giving the theoretical indexation figure when the announcement
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      is made on the actual level of allowances. That allows people to compare the two, which follows on from the principle to which the hon. Member for Buckingham referred in relation to information.
      The Government have developed a policy of pre-announcement, in the context of the Chancellor taking the decision, of other strategies in the Budget or pre-Budget report. However, although we follow that practice at this time, we do not wish to formalise it as a permanent arrangement. I point out to the hon. Member for Kingston and Surbiton—this point lay behind many of his comments, and especially his reference to the Low Incomes Tax Reform Group—that the Government continue to take a very active interest in listening not only to him and other hon. Members, but to lobby groups, about how we can make contact with the tax system less frequent, especially for the vulnerable sections of our community, and how such contact can be made far less arduous than people sometimes find it when it does occur. I hope that he will accept that, although the Government may act on the principle at this time, we are not prepared to concede its formalisation into the Budget.
      Mr. Edward Davey rose—
      Dawn Primarolo: That was my last point, but I am happy to give way before I sit down.
      Mr. Davey: I am grateful to the Paymaster General for showing her usual generosity.
      The Paymaster General's words are very welcome and I understand her argument, but will she reassure me on the point that I made about blind people's allowances? The Government have moved by administrative decision to the pre-announcement of personal income tax allowances and age-related allowances, but will she give me some reassurance that she and her Department intend to do the same thing for the blind people's allowance?
      Dawn Primarolo: I hope that the hon. Gentleman will forgive me if I assure him only that I will go away and consider the position of the allowances to which he refers. I do not think that I can give him the commitment that he seeks, and it would be unfair of me to do so without having properly considered the matter, but I will certainly take it away and consider it very carefully.
      Mr. Bercow: I apologise profusely once again to you, Madam Deputy Speaker, and to the Paymaster General, because I genuinely misheard her in thinking that she had finished her speech.
      The hon. Member for Kingston and Surbiton (Mr. Davey) can certainly fight his corner, and that he has eloquently done. Of course, I am saddened and mildly surprised that the Paymaster General did not respond to my exhortations. I had hoped that my hon. Friends and I would persuade her of the merits of new clause 6, and I am a sadder man for having been unable to do so. Nevertheless, I am genuinely encouraged by the Minister's willingness to consider the issues and by her comments about the Government's commitment to tax transparency and therefore, presumably, to the intelligibility principle.

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      10.15 pm
      Perhaps I can conclude by asking the very busy, very senior, very distinguished, very important, very influential Minister, who has many commitments and a very full diary, whether, in one of her lighter and lazier moments, she would do me the signal honour in my parliamentary career of studying my Taxation (Right to Know) Bill, which I introduced as a ten-minute Bill on 6 June 2000. In that Bill, and in my speech commending it, I suggested several ways in which we could make the tax system more transparent to the people who have to foot the bills. In line with the principles of new clause 6, I particularly ask the Minister to consider the combined impact of direct and indirect taxes on people in various income deciles. The Minister is now extremely experienced in the Treasury, and she will be aware—although it may not suit her book to cite the fact—that for 15 successive years between 1981 and 1996, Conservative Governments published their assessments of the impact of direct and indirect taxes on the various income deciles.
      The Minister, despite her professed and genuine loyalty to her boss, the Chancellor of the Exchequer, will know that he has been excoriated on several occasions by the Select Committee on the Treasury for his lack of transparency. I hope that she will not find it too painful if, in support of the principles of new clause 6, I remind her that in March 2000 her right hon. Friend was chastised by the Committee for his consistent failure to publish such an assessment. If the eloquently and sincerely expressed commitment to glasnost in matters of taxation that we have received from the Government tonight is to be taken at face value, it can only be a short time before the Chancellor admits that he was wrong, prays in aid the advice of his Paymaster General, and publishes the statement that is long awaited and much overdue.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 7

      TAXATION OF COMMUNITY AMATEUR SPORTS CLUBS
      '. After section 508 of the Taxes Act 1988 insert—
      "Community amateur sports clubs
      508ZA (1) Where—

      (a) a club which has as its object the promotion within the community of amateur sport, physical education or the provision of sports facilities is approved for the purposes of this section by the Secretary of State; and

      (b) the memorandum of association or other similar instrument regulating the functions of the club precludes the direct or indirect payment or transfer to any of its members of any of its income or property by way of dividend, gift, division, bonus or otherwise howsoever by way of profit:

      there shall, on a claim in that behalf to the Board, be allowed in the case of the club such exemption from tax as falls to be allowed under section 505 in the case of a charity the whole income of which is applied to charitable purposes.
      (2) The condition specified in paragraph (b) of subsection (1) above shall not be deemed not to be complied with in the case of any club by reason only that the memorandum or other similar instrument regulating its functions does not prevent the payment to its members of reasonable remuneration for goods, labour or power supplied, or for services rendered, of reasonable interest for money lent, or for reasonable rent for any premises.
      (3) The Secretary of State may by regulations made by statutory instrument specify those classes of amateur sport, physical education and the provision of sports facilities to which the provisions of this section shall apply.".'.—[Mr. Flight.]
      Brought up, and read the First time.
      Mr. Flight: I beg to move, That the clause be read a Second time.
      Madam Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 5, in schedule 18, page 242, leave out from beginning of line 24 to the end of line 37 on page 243 and insert—
      '4 Section 505 of the Taxes Act 1988 (charities: general) applies to registered clubs and qualifying purposes as it does to charities and charitable purposes.
      5 Section 25(10) of the Finance Act 1990 (c. 29) (gift aid) applies to a registered club in respect of any gift received by it as it applies to a charity in receipt of any qualifying donation.'.
      No. 6, in page 243, leave out from beginning of line 42 to end of line 5 on page 245.
      No. 7, in page 245, leave out lines 7 to 31 and insert—
      '9 In respect of all gifts and transfers to a registered club, which for the purposes of this Schedule include membership fees, the donor may make such claims and elections as would be available under any enactment if that registered club were a charity.'.
      Mr. Flight: For some time there has been cross-party support for the view that qualifying amateur sports clubs should either be able to qualify as charities or to have a tax relief parallel to charities. What has happened is a dog's breakfast in that last November, the Charity Commission decided that some amateur sports clubs could qualify on the basis of contribution to health and fitness, but others could not. Consequently, angling, crossbow, flying, motor sports, pistol shooting and various others do not qualify. The Government had made certain promises, going back to the last election, on tax reliefs for qualifying amateur sports clubs, not expecting them to qualify as charities, and those are introduced by the Bill. However, they are slightly less generous than those which would obtain if an amateur sports club became a charity.
      The duties of charitable status are not hugely onerous, but they entail work, and some smaller clubs that would qualify as charities may not want to make the effort to become a charity. In essence, the new clause states that it is ridiculous to have two sets of slightly different rules when the amounts of money are not material, and suggests that it would be more sensible for qualifying amateur sports clubs to enjoy the same tax reliefs as charities.
      Under the Revenue rules in the Bill, gifting is permitted only from individuals, not companies. There will be misunderstandings about that and rows about claims. There are differences in the rules for trading income and stamp duty. Above all, there could be a difference in rates. Before the election, the Government suggested that they expected to put in place measures that would give 80 per cent. relief. They cannot be part of the Bill because they are not financial, but the figure was miraculously reduced to 50 per cent. That is important for many amateur sports clubs.
      The cost of the relevant provisions is £5 million—not a huge sum. The modest, small new clause would tidy up the Bill. Amendments Nos. 5, 6 and 7 would allow membership fees to qualify for gift aid on an equal basis with charities. Is there a material difference between

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      membership of a qualifying, virtuous sports club, which makes people healthy and saves the national health service money and membership of Save the Whale? We believe that it would be sensible for all membership fees to qualify.
      We raised the issue in Committee and discussed various aspects of it. However, the fundamental point was not tackled. We hope that the Government have had second thoughts. Instead of making everything even more complex, let us have a clean, simple arrangement.
      Mr. Edward Davey: I support the new clause. The relevant issues were debated in Committee, when my hon. Friend the Member for Southport (Dr. Pugh) put our position on the record. The matter was discussed in two sittings and I therefore do not wish to detain the House at length. The Government have offered sports clubs a choice between the route set out in the Charity Commissioners' recent ruling and the provision in the Bill. That is a welcome improvement, but as the hon. Member for Arundel and South Downs suggested, it creates some untidiness and means that the decision is difficult.
      People who do not have much expertise in the matter because their core aim is to run a sports club, with all the attendant benefits for communities throughout the country, are being asked to make difficult decisions. Should they decide to become a charity, with the various duties, responsibilities and possible change in the club's ethos that that entails and get the available reliefs? Or should they go down the route that the Government propose, and obtain slightly different reliefs? It is a complicated decision. It is therefore not sensible simply to say that it is wonderful that sports clubs have a choice. It would be better to align the choices so that they are identical for tax purposes.
      The new clause is sensible and I believe that the Government would agree with its spirit. Perhaps they wish that they had thought of it. The Economic Secretary is unlikely to accept the new clause, but I hope that he will show that the Treasury is open minded and that we can look forward in due course to changes that the Government have drafted.
      Mr. John Greenway: It is often the way in the House that, if there is something that an hon. Member has wanted to talk about for a long time, they only get the opportunity to do so very late at night, when they have no wish to detain the House unnecessarily. I do, however, want to speak to the new clause and the associated amendments.
      There are 110,000 community and amateur sports clubs in this country. They are run by volunteers, and they provide the biggest resource to grass-roots sport participation in the entire United Kingdom. As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) said, in last year's Budget, the Chancellor of the Exchequer proposed the introduction of a tax package, and Ministers in both the Treasury and the Department for Culture, Media and Sport heightened expectations that that package would include mandatory rate relief.
      That perception was encouraged at the general election. I well recall, two days before polling day, an argumentative joint interview with the hon. Member for
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      Vauxhall (Kate Hoey)—then the Minister for Sport—not about whether the Government wanted to provide mandatory rate relief but about how that should be done. The sense that mandatory rate relief was the Government's plan was, therefore, certainly heightened at the election.
      When the Government were about to publish their White Paper on this tax package, however, the Charity Commissioners produced a rabbit out of the hat by suggesting that they were prepared to amend their definition of "social purposes" so as to include many of these sports clubs. Ministers have been very enthusiastic that charitable status would deliver mandatory rate relief—as, indeed, it would. We find, however, that the mandatory rate relief proposal has been dropped from the Treasury's own tax package. Yet, on the very day that the White Paper was published—30 November—the Treasury issued a press release that stated that its tax package would include 80 per cent. mandatory rate relief. I take that as an indication that this idea was dropped at the last minute, because there was an alternative route.
      My hon. Friend the Member for Arundel and South Downs and the hon. Member for Kingston and Surbiton (Mr. Davey) have made the point that this is not a popular choice for those who run the many amateur sports clubs to have to make. They are volunteers, this is a complex matter, and they cannot understand why Ministers are saying, "Yes, we think you should have mandatory rate relief, but you can only have it by going down the charitable route. You can't have it through our tax package." That shows a very strange sense of priorities.
      For that reason, my hon. Friend the Member for Arundel and South Downs felt it sensible to raise this issue in Committee and on the Floor of the House. Where is the logic in saying, "You can have mandatory rate relief by one route, but not by the other"? That is subject, of course, to the caveat that the purposes of the club must be clearly defined, and relief restricted to genuine community and amateur sports clubs.
      Earlier today, here at the Palace of Westminster, the Central Council of Physical Recreation launched its latest initiative on the value to health of sports participation. Those colleagues who attended the launch were told that the Government spend £1,100 per capita on health, but only £1.34 on sport, and any sensible interpretation of a written answer that I received from the Secretary of State for Culture, Media and Sport last week would be that half that £1.34 is spent on administration and regional bodies.
      Nobody in the House can be proud of this situation. It is time to begin to redress the balance of priorities. At the most recent Department for Culture, Media and Sport Question Time, the Minister for Sport said that the Government were looking to see how they could extend their relief to provide this rate relief, but I would say to the House that it really is time to give these community and amateur sports clubs the support that they deserve. I urge hon. Members on both sides of the House to do what their constituents, and the sports clubs in their constituencies, want, which is to vote for this measure.
      The Economic Secretary to the Treasury (John Healey): I welcome the cross-party support expressed by the hon. Members for Arundel and South Downs (Mr. Flight) and for Kingston and Surbiton (Mr. Davey) for the general increase in support for community and amateur sports clubs.

      335
      The provisions that the Government, together with the Charity Commission, have put in place offer the scope for local sports clubs to become charities if they choose and if they are eligible, and they offer significant support for clubs that are not able or not willing to become a charity. What the hon. Member for Arundel and South Downs proposes does not tidy up the provisions that the Government propose; it does not reduce the complexity; and it does not reduce the inequity that the hon. Gentleman thinks he sees in what we are proposing. I shall explain why in a moment.
      10.30 pm
      The hon. Member for Ryedale (Mr. Greenway) said that he had wanted to speak about these matters for a long time. Indeed, he has a long-standing interest in local sports and is heavily involved in his local area. I know of his activities and I know the area well, and the hon. Gentleman spoke knowledgeably on the subject.
      On business rate relief, that was not part of the tax package that was the subject of the consultation that led to the provisions in the Bill. Discretionary rate relief, as the hon. Gentleman rightly points out, is a matter for local authorities. The Office of the Deputy Prime Minister has issued a consultation paper on revising the guidance on rate relief for charities and other non-profit-making bodies. The aim is to provide a more consistent basis for and approach to decision making in local authorities on these matters. The issue that the hon. Gentleman raises is a matter for the Office of the Deputy Prime Minister, not for a Finance Bill. The measures contained in the Bill and in the tax package are generous by any measure and they are widely welcomed.
      New clause 7, as the hon. Member for Arundel and South Downs briefly explained, seeks to extend all the exemptions that charities enjoy on their income to clubs which have as their object the promotion within the community of amateur sport, physical education or the provision of sports facilities. The Opposition claim that the new clause would give sports clubs parity with charity, which clubs have sought, as least as regards the exemptions on their income.
      Clubs can already achieve parity by becoming charities, following the Charity Commission's decision to relax its approach, announced alongside the pre-Budget report in November last year. If a sports club wants to be treated as a charity, it can now be treated as a charity, and it should become a charity.
      Mr. Flight: I thank the Minister for allowing me to intervene. My understanding, as I mentioned, is that the Charity Commission has made it clear that not all amateur sports clubs can become charities. They must be able to meet the Charity Commissioners' designation of health and fitness. I read out an illustrative list showing that there are various kinds of amateur sports clubs that would qualify for the measures in the Bill, but cannot become charities.
      John Healey: The hon. Gentleman is perfectly right. The broadening of the definition of charitable purposes that the Charity Commission confirmed in November last year included two activities that it will now recognise as charitable: first,
      "the promotion of community participation in healthy recreation by the provision of facilities for the playing of particular sports"
      336
      and secondly,
      "the advancement of the physical education of young people not undergoing formal education".
      That leaves certain sports which Sport England would recognise as a sport, such as angling, pool, billiards and snooker, outside the definition. Hence, we are bringing in tax provisions in the Bill so that clubs that cannot qualify as a charity may nevertheless benefit to a significant extent from the support that we want to put in place to back their activities.
      Amendment No. 5 would give sports clubs access to all the reliefs that charities enjoy on various sources of income, including the right to reclaim tax on payments made under gift aid. Amendment No. 6 would remove the restriction of reliefs where a sports club spends its funds on non-qualifying purposes—that is, not in providing facilities for or promoting participation in an eligible sport.
      Amendment No. 7 would give donors to sports clubs access to all the incentives that donors to charities enjoy. It would also allow members of sports clubs to use gift aid for their membership fees. That is not charity parity, but charity plus, and it is not justified.
      It would be misconceived to allow any organisation not prepared to meet the requirements or the responsibilities of becoming a charity to enjoy the full range of exemptions available to charities. It is not our intention to put community and amateur sports clubs in a better position than charities or other businesses.
      Furthermore, including membership subscriptions in the gift aid scheme would not be appropriate. Gift aid is intended to increase the value of gifts to charity by allowing taxpayers to add to their donation the basic rate of tax that they have paid. It is not meant to subsidise the payments that people make to purchase their use of leisure and sporting facilities.
      The principal purpose of the provision in the Bill is to support local sports clubs, which pay an important role in all our communities. Every Member could cite a number of local clubs in their constituency that could benefit from this support. They play such an important role that we want to support them. In my own area, next door to where we live in Rawmarsh, is the Upper Haugh cricket club and the St. Joseph's junior football club. Those clubs allow people to participate in sport, and are run by people who give up their time willingly and voluntarily, and have often done so for many years. This is the first time that the Government are putting in place through the tax system support and recognition for their contribution to their communities.
      Our proposals, as set out in clause 57 and schedule 18, provide alternative support for clubs that cannot or do not want to become registered charities. We received more than 2,500 responses to the consultation. The sector told us that it wanted a scheme with less regulatory requirements than the Charity Commission that was administered by the Inland Revenue. That is what they have got. If clubs meet the criteria in schedule 18, they will be able to enjoy most of the reliefs and exemptions usually associated with charitable status, including many reliefs for donors. The package is targeted in particular at helping the smallest sports clubs without triggering the level of regulation required of charities.

      337
      I shall show the strength of support for this provision. After the proposals were first set out in the pre-Budget report in November last year, Elsa Davies, director of the National Playing Fields Association, said in December:
      "We have criticised the Government in the past for its record on supporting sport … and we had begun to believe that this change was unattainable, but the Charity Commissioners and the Treasury have provided a magnificent Christmas present for sport."
      In response to the Budget on 17 April, the chairman of the Central Council of Physical Recreation said:
      "This is a great day for British sport. We are delighted that Government is listening to the views of sport, and is recognising its contribution to society through the tax system."
      The new clause would introduce a more complicated regime, not a tidier one. It would require the Secretary of State to decide what activities should qualify for this relief, and to set up additional procedures for approving individual clubs. It would require clubs to apply to the Inland Revenue for exemptions.
      Our proposals would define qualifying sports by reference to the list of recognised activities maintained by the Sports Council, to which I have already referred. It seems to us to be best placed to make such decisions. That would allow clubs to register with the Inland Revenue, which would be responsible for administering the exemptions.
      These provisions have been the subject of wide consultation and the object of equally wide welcome. I hope that I have explained to the House why the Government's proposals, not those in the new clause or the amendments, should be the basis for the Bill's support for community sports clubs. On that basis, I encourage the hon. Member for Arundel and South Downs to withdraw the new clause. If he will not, I urge my right hon. and hon. Friends to vote it down.
      Mr. Flight: Half a pint is better than no pint, but our new clause and amendments are clear. They simply ask why on earth we should have slightly different rules under this mechanism. Instead, we should have a system under which amateur sports clubs get the same tax breaks either under the Bill or as charities. There will be confusion as a result of the difference, and I am afraid that there is some disappointment.
      Our lawyers advise us that there is nothing more in what we propose, although I have specifically raised the issue of membership. Our proposals seem to us by far the better solution. The Treasury is proving that it can do it as it wishes, as it is already doing, but that is simply to avoid what is called the golf club problem. We think that what we propose is right, and we are not satisfied with the Government's measures—welcome though they are as half a pint. Sports clubs could easily have been treated the same as charities.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 179, Noes 296.

      Division No. 290]

      [10.41 pm

      AYES

      Allan, Richard

      Atkinson, David (Bour'mth E)

      Amess, David

      Atkinson, Peter (Hexham)

      Ancram, Rt Hon Michael

      Bacon, Richard

      Arbuthnot, Rt Hon James

      Baron, John

      338

      Barrett, John

      Hughes, Simon (Southwark N)

      Beggs, Roy

      Hunter, Andrew

      Beith, Rt Hon A J

      Jack, Rt Hon Michael

      Bellingham, Henry

      Jackson, Robert (Wantage)

      Bercow, John

      Jenkin, Bernard

      Beresford, Sir Paul

      Johnson, Boris (Henley)

      Blunt, Crispin

      Kirkbride, Miss Julie

      Boswell, Tim

      Knight, Rt Hon Greg (E Yorkshire)

      Bottomley, Peter (Worthing)

      Laing, Mrs Eleanor

      Bottomley, Rt Hon Virginia

      Lait, Mrs Jacqui

      Brady, Graham

      Lamb, Norman

      Brazier, Julian

      Laws, David

      Brooke, Mrs Annette L

      Letwin, Oliver

      Browning, Mrs Angela

      Lewis, Dr Julian (New Forest E)

      Bruce, Malcolm

      Liddell-Grainger, Ian

      Burnett, John

      Lidington, David

      Burns, Simon

      Llwyd, Elfyn

      Burnside. David

      Loughton, Tim

      Butterfill, John

      Luff, Peter

      Cable, Dr Vincent

      MacKay, Rt Hon Andrew

      Calton, Mrs Patsy

      Maclean, Rt Hon David

      Cameron, David

      McLoughlin, Patrick

      Campbell, Rt Hon Menzies (NE Fife)

      Malins, Humfrey

      Maples, John

      Carmichael, Alistair

      Mates, Michael

      Cash, William

      Mawhinney, Rt Hon Sir Brian

      Chapman, Sir Sydney (Chipping Barnet)

      May, Mrs Theresa

      Mercer, Patrick

      Chidgey, David

      Mitchell, Andrew (Sutton Coldfield)

      Chope, Christopher

      Moore, Michael

      Clappison, James

      Moss, Malcolm

      Clifton-Brown, Geoffrey

      Murrison, Dr Andrew

      Cotter, Brian

      Norman, Archie

      Cran, James

      Osborne, George (Talton)

      Davey, Edward (Kingston)

      Page, Richard

      Davies, Quentin (Grantham)

      Paice, James

      Davis, Rt Hon David (Haltemprice)

      Paterson, Owen

      Djanogly, Jonathan

      Price, Adam

      Dorrell, Rt Hon Stephen

      Prisk, Mark

      Doughty, Sue

      Redwood, Rt Hon John

      Duncan, Peter (Galloway)

      Reid, Alan (Argyll & Bute)

      Duncan Smith, Rt Hon lain

      Rendel, David

      Evans, Nigel

      Robathan, Andrew

      Ewing, Annabelle

      Robertson, Hugh (Faversham)

      Fallon, Michael

      Robertson, Laurence (Tewkb'ry)

      Field, Mark (Cities of London)

      Roe, Mrs Marion

      Flight, Howard

      Rosindell, Andrew

      Flook, Adrian

      Ruffley, David

      Forth, Rt Hon Eric

      Russell, Bob (Colchester)

      Foster, Don (Bath)

      Salmond, Alex

      Francois, Mark

      Sanders, Adrian

      Garnier, Edward

      Sayeed, Jonathan

      George, Andrew (St Ives)

      Selous, Andrew

      Gibb, Nick

      Shephard, Rt Hon Mrs Gillian

      Goodman, Paul

      Simmonds, Mark

      Grayling, Chris

      Simpson, Keith (Mid-Norfolk)

      Green, Darnian (Ashford)

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

      Green, Matthew (Ludlow)

      Smyth, Rev Martin (Belfast S)

      Greenway, John

      Spelman, Mrs Caroline

      Grieve, Dominic

      Spicer, Sir Michael

      Hague, Rt Hon William

      Spink, Bob

      Hammond, Philip

      Spring, Richard

      Hancock. Mike

      Stanley, Rt Hon Sir John

      Harvey, Nick

      Steen, Anthony

      Hawkins, Nick

      Streeter, Gary

      Hayes, John

      Stunell, Andrew

      Heald, Oliver

      Swayne, Desmond

      Heath, David

      Swire, Hugo

      Heathcoat-Amory, Rt Hon David

      Syms, Robert

      Hermon, Lady

      Tapsell, Sir Peter

      Hoban, Mark

      Taylor, John (Solihull)

      Hogg, Rt Hon Douglas

      Taylor, Matthew (Truro)

      Holmes, Paul

      Taylor, Sir Teddy

      Horam, John

      Thomas, Simon (Ceredigion)

      Howard, Rt Hon Michael

      Thurso, John

      Howarth, Gerald (Aldershot)

      Turner, Andrew (Isle of Wight)

      339

      Tyler, Paul

      Williams, Roger (Brecon)

      Tyrie, Andrew

      Willis, Phil

      Walter, Robert

      Wilshire, David

      Waterson, Nigel

      Winterton, Ann (Congleton)

      Watkinson. Angela

      Winterton, Sir Nicholas (Macclesfield)

      Webb, Steve

      Weir, Michael

      Yeo, Tim

      Whittingdale, John

      Young, Rt Hon Sir George

      Widdecombe, Rt Hon Miss Ann

      Younger-Ross, Richard

      Wiggin, Bill

      Wilkinson, John

      Tellers for the Ayes:

      Willetts, David

      Mr. Charles Hendry and

      Williams. Hywel (Caernarfon)

      Mrs. Cheryl Gillan

      NOES

      Abbott, Ms Diane

      Cook, Rt Hon Robin (Livingston)

      Adams, Mrs Irene (Paisley N)

      Corbyn, Jeremy

      Ainger, Nick

      Cousins, Jim

      Ainsworth, Bob (Cov'try NE)

      Cox, Tom

      Allen, Graham

      Cranston, Ross

      Anderson, Rt Hon Donald (Swansea E)

      Crausby, David

      Cruddas, Jon

      Armstrong, Rt Hon Ms Hilary

      Cryer, John (Hornchurch)

      Atkins, Charlotte

      Cummings, John

      Austin, John

      Cunningham. Jim (Covtry S)

      Bailey, Adrian

      Cunningham, Tony (Workington)

      Baird, Vera

      Curtis-Thomas, Mrs Claire

      Banks, Tony

      Davey, Valerie (Bristol W)

      Barnes, Harry

      David, Wayne

      Battle, John

      Davies, Rt Hon Denzil (Llanelli)

      Bayley, Hugh

      Davies, Geraint (Croydon C)

      Beckett, Rt Hon Margaret

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

      Begg, Miss Anne

      Benn, Hilary

      Dawson, Hilton

      Bennett, Andrew

      Denham, Rt Hon John

      Berry, Roger

      Dhanda, Parmjit

      Best, Harold

      Dobbin, Jim

      Betts, Clive

      Donohoe, Brian H

      Blackman, Liz

      Doran, Frank

      Blizzard, Bob

      Dowd, Jim

      Borrow, David

      Drew, David

      Bradley, Rt Hon Keith (Withington)

      Eagle, Angela (Wallasey)

      Bradley, Peter (The Wrekin)

      Eagle, Maria (L'pool Garston)

      Brennan, Kevin

      Edwards, Huw

      Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

      Efford, Clive

      Ennis, Jeff

      Brown, Russell (Dumfries)

      Field, Rt Hon Frank (Birkenhead)

      Browne, Desmond

      Fisher, Mark

      Bryant, Chris

      Fitzpatrick, Jim

      Burden, Richard

      Flint, Caroline

      Burgon, Colin

      Flynn, Paul

      Burnham, Andy

      Follett, Barbara

      Cairns, David

      Foster, Rt Hon Derek

      Campbell, Alan (Tynemouth)

      Foster, Michael (Worcester)

      Campbell, Mrs Anne (C'bridge)

      Foster, Michael Jabez (Hastings)

      Campbell, Ronnie (Blyth V)

      Francis, Dr Hywel

      Caplin, Ivor

      George, Rt Hon Bruce (Walsall S)

      Casale, Roger

      Gerrard, Neil

      Caton, Martin

      Gibson, Dr Ian

      Cawsey, Ian

      Goggins, Paul

      Challen, Colin

      Griffiths, Win (Bridgend)

      Chapman, Ben (Wirral S)

      Grogan, John

      Chaytor, David

      Hall, Mike (Weaver Vale)

      Clapham, Michael

      Hall, Patrick (Bedford)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hamilton, David (Midlothian)

      Hanson, David

      Clark, Paul (Gillingham)

      Harris, Tom (Glasgow Cathcart)

      Clarke, Rt Hon Tom (Coatbridge)

      Healey, John

      Clarke, Tony (Northampton S)

      Henderson, Doug (Newcastle N)

      Clelland, David

      Henderson, Ivan (Harwich)

      Clwyd. Ann

      Hendrick, Mark

      Coaker, Vernon

      Hepburn, Stephen

      Coffey, Ms Ann

      Heppell, John

      Cohen, Harry

      Hesford, Stephen

      Colman, Tony

      Heyes, David

      Connarty, Michael

      Hill, Keith

      340

      Hinchliffe, David

      Mole, Chris

      Hood, Jimmy

      Moran, Margaret

      Hope. Phil

      Morgan, Julie

      Hopkins, Kelvin

      Morley, Elliot

      Howarth, Rt Hon Alan (Newport E)

      Mountford, Kali

      Howarth, George (Knowsley N)

      Mudie, George

      Hoyle, Lindsay

      Mullin, Chris

      Hughes, Beverley (Stretford)

      Munn, Ms Meg

      Hughes, Kevin (Doncaster N)

      Murphy, Denis (Wansbeck)

      Humble, Mrs Joan

      Murphy, Jim (Eastwood)

      Hurst, Alan

      Murphy, Rt Hon Paul (Torfaen)

      Hutton, Rt Hon John

      Naysmith, Dr Doug

      Iddon, Dr Brian

      O'Hara, Edward

      Illsley, Eric

      Olner. Bill

      Ingram, Rt Hon Adam

      O'Neill, Martin

      Irranca-Davies, Huw

      Organ, Diana

      Jamieson, David

      Osborne, Sandra (Ayr)

      Jenkins, Brian

      Palmer, Dr Nick

      Jones, Helen (Warrington N)

      Pearson, Ian

      Jones, Kevan (N Durham)

      Perham, Linda

      Jones, Lynne (Selly Oak)

      Picking, Anne

      Jones, Martyn (Clwyd S)

      Pickthall, Colin

      Joyce, Eric

      Pike, Peter

      Kaufman, Rt Hon Gerald

      Plaskitt, James

      Keen, Alan (Feltham & Heston)

      Pollard, Kerry

      Keen, Ann (Brentford & Isleworth)

      Pond, Chris

      Kelly, Ruth

      Pope, Greg

      Kidney, David

      Pound, Stephen

      Kilfoyle, Peter

      Prentice, Ms Bridget (Lewisham E)

      King, Andy (Rugby & Kenilworth)

      Prentice, Gordon (Pendle)

      King, Ms Oona (Bethnal Green)

      Primarolo, Dawn

      Knight, Jim (S Dorset)

      Purchase, Ken

      Kumar, Dr Ashok

      Purnell, James

      Ladyman, Dr Stephen

      Quin, Rt Hon Joyce

      Lawrence, Mrs Jackie

      Quinn, Lawrie

      Laxton, Bob

      Rammell, Bill

      Lazarowicz, Mark

      Rapson, Syd

      Lepper, David

      Reed, Andy (Loughborough)

      Leslie, Christopher

      Reid, Rt Hon Dr John (Hamilton N)

      Levitt, Tom

      Robertson, John (Glasgow Anniesland)

      Lewis, Ivan (Bury S)

      Lewis, Terry (Worsley)

      Roche, Mrs Barbara

      Linton, Martin

      Rooney, Terry

      Lloyd, Tony

      Ross, Ernie

      Love, Andrew

      Roy, Frank

      Lucas, Ian

      Ruane, Chris

      Luke, lain

      Ruddock, Joan

      McAvoy, Thomas

      Ryan, Joan

      McCartney, Rt Hon Ian

      Savidge, Malcolm

      McDonagh, Siobhain

      Sawford, Phil

      MacDonald, Calum

      Sedgemore, Brian

      McDonnell, John

      Sheerman, Barry

      McFall, John

      Sheridan, Jim

      McKechin, Ann

      Simon, Siôn

      McKenna, Rosemary

      Simpson, Alan (Nottingham S)

      Mackinlay, Andrew

      Singh, Marsha

      MacShane, Denis

      Skinner, Dennis

      Mc Walter, Tony

      Smith, Rt Hon Chris (Islington S)

      McWilliam, John

      Smith, Geraldine (Morecambe)

      Mahmood, Khalid

      Smith, John (Glamorgan)

      Mahon, Mrs Alice

      Smith, Llew (Blaenau Gwent)

      Mallaber, Judy

      Southworth, Helen

      Mendelson, Rt Hon Peter

      Speller, Rt Hon John

      Mann, John

      Starkey, Dr Phyllis

      Marris, Rob

      Steinberg, Gerry

      Marsden, Gordon (Blackpool S)

      Stewart, Ian (Eccles)

      Marshall, David (Shettleston)

      Stinchcombe, Paul

      Marshall, Jim (Leicester S)

      Stoate, Dr Howard

      Martlew, Eric

      Strang, Rt Hon Dr Gavin

      Meacher, Rt Hon Michael

      Stuart, Ms Gisela

      Merron, Gillian

      Sutcliffe, Gerry

      Michael, Rt Hon Alun

      Tami, Mark

      Miliband, David

      Taylor, Ms Dari (Stockton S)

      Miller, Andrew

      Taylor, David (NW Leics)

      Mitchell, Austin (Gt Grimsby)

      Thomas, Gareth (Clwyd W)

      Moffatt, Laura

      Thomas, Gareth (Harrow W)

      341

      Todd, Mark

      White, Brian

      Touhig, Don

      Whitehead, Dr Alan

      Trickett, Jon

      Williams, Rt Hon Alan (Swansea W)

      Turner, Dennis (Wolyerhlon SE)

      Turner, Dr Desmond (Kemptown)

      Williams, Mrs Betty (Conwy)

      Turner, Neil (Wigan)

      Winnick, David

      Twigg, Derek (Halton)

      Woodward, Shaun

      Twigg, Stephen (Enfield)

      Worthington, Tony

      Tynan, Bill

      Wray, James

      Vaz, Keith

      Wright, Anthony D (Gt Yarmouth)

      Vis, Dr Rudi

      Wright, David (Telford)

      Walley, Ms Joan

      Wright, Tony (Cannock)

      Ward, Claire

      Wareing, Robert N

      Tellers for the Noes:

      Watson, Tom

      Angela Smith and

      Watts, David

      Mr. Fraser Kemp.

      Question accordingly negatived.

    New Clause 8

      IR35
      '.—(1) Schedule 12 to the Finance Act 2000 (c. 17) (provision of services through an intermediary) is amended as follows.
      (2) In Part 2 (the deemed Schedule E payments), after paragraph 7B insert—
      "Training Costs
      7C (1) The reference in Step Three of the calculation in paragraph 7 to expenses that would have been deductible from the emoluments of the employment includes expenses incurred where the worker attends an external training course relating to his work.
      (2) This section has effect for the year 2002–03 and subsequent years of assessment.".'.—[Mr Bercow.]
      Brought up, and read the First time.
      Mr. Bercow: I beg to move, That the clause be read a Second time.
      In common with all the new clauses that my hon. Friends and I have tabled, new clause 8 is so manifestly reasonable that only an extraordinarily unreasonable Government could resist it. That is the yardstick by which the Paymaster General will be judged when she replies. As she and the House know, IR35 provisions apply to individuals who are employed by their own service company, but whom the Government consider as employees of the business to which they are contracted. They are taxed as if they were employees, hence they cannot benefit from the ability to defer tax liabilities via dividends, and so on. That is to say, they cannot enjoy the normal benefits of incorporated businesses.
      My hon. Friends and I believe that the costs of vocational training should be deductible for an IR35 individual—if I may so describe him or her—who is both employee and employer, in the same way that those costs would be deductible for any other employer.
      In order to anticipate the charge that will be lobbed at us, I say in advance that the Conservatives are not advocating tax avoidance. It is merely a case of bringing employees and employers subject to IR35 provisions into line with other employees and employers. Since the Paymaster General has said that IR35 individuals can get all the tax benefits of being employed—that was what she said in Committee—we think that it is reasonable for them to get relief for eligible and relevant training costs.
      The idea contained in the new clause would be valid even if it were merely the product of a back of a cigarette packet calculation by my hon. Friend the Member for
      342
      Arundel and South Downs (Mr. Flight), because any such calculations that he makes are invariably cogent. However, the new clause has the added benefit of being derived from the grass roots. It is the result of representations and the consequence of us going around the country and hearing what people who are faced with Government imposts say about the inequity of the treatment that they currently suffer.
      It is a modest request, made with my characteristic modesty and self-effacement. I am sucking up to the Minister in the hope that, at almost 11 pm, she will give an even more favourable reply than she was otherwise disposed to do. Exceeding even my own now established reputation for brevity, I commend the new clause to the House.
      Mr. John Burnett: The changes to bring IR35 into being, and bring the self-employed—in this case, invariably computer specialists—into the employees' national insurance contributions network, were unfair for numerous reasons. First, those people got no enhanced benefits. Secondly, the companies deemed to employ them, which were often large multinational companies, did not have to pay employers' NICs. Thirdly, the nature of the change was deeply prejudicial.
      The businesses in question are knowledge businesses. Their principal or main assets are the individuals who work so hard for them. The individuals do not have a choice about how they trade—that is dictated by their employers. We have always called for a wholesale review of the IR35 system. It is unsatisfactory, partial and prejudicial. Nevertheless, we agree that in the meantime the costs of vocational training should be deductible and we support the new clause.
      Chris Grayling: I shall follow the example set by my hon. Friend the Member for Buckingham (Mr. Bercow) and be brief. The Minister needs to understand that the status of someone who is encompassed by IR35 is very different from that of the conventional employee. Employers do not provide the infrastructure of support to them that employees normally enjoy, including training. Such individuals have a very different status in the organisations. Leaving aside the short-lived—or at least time-limited—nature of their contracts, they do not receive training and other support. The new clause is an admirable proposal that would certainly make the life of many IR35 people much easier and I hope that the Minister will accept it.
      Dawn Primarolo: I shall not accept new clause 8 and I am sorry to disappoint the hon. Member for Buckingham again. I intend to put forcefully the Government's arguments on the issue. The hon. Members for Buckingham, for Torridge and West Devon (Mr. Burnett) and for Epsom and Ewell (Chris Grayling) are labouring under a misconception. The new clause would not bring IR35 employees in line with others in the tax system. Indeed, it would do the reverse. It would give them an advantageous position that no one else in the tax system possesses.
      I need to remind the House what the legislation on service companies was intended to do. It is called IR35 because it appeared in Inland Revenue press release 35. In the tax system, individuals are dealt with according to

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      whether they are self-employed or employees, and the reliefs given are within the tax system. I shall leave partnerships aside.
      11 pm
      What happened was that a large number of people who use a service company structure sought to give themselves the benefits of the reliefs that employees gain and those that the companies would receive. They then undertook contracts within a company as allegedly self-employed subcontractors, but the control of the hours worked, the tasks of the job and the work undertaken were completely identical in every other sense to those of the people whom they worked alongside, who were employees of the company.
      A huge amount of tax was lost through national insurance and income tax because those individuals did not pay the correct amount, even though case law determined that they were employees. The Government introduced legislation that said that, where the service company sought to disguise the fact that there was only one person in the company and that person was really employed in another company and he or she worked alongside an employee and, by every test, was an employee, that person therefore had to be designated as an employee of that service company. Our legislation was indeed repeatedly challenged in the courts, and the Government's position was repeatedly supported by the courts as following case law. That is the purpose of the IR35 legislation.
      Where someone is in a service company and he or she is not caught by the provisions that say, "You are working alongside someone else and your job is exactly the same, so you are not self-employed because your job is controlled. You are an employee. You pay through PAYE", that person is genuinely self-employed and genuinely working through a service company, and the Government's legislation does not impinge on him or her.
      I shall remind hon. Members how training is treated under the tax system. The employer receives the tax relief to pay for the training of their employees. The new clause would allow the service company, as the employer, to gain access to the tax relief and then give it 5 per cent. on top for no earthly reason whatever. It would allow the company to claim the employee's tax relief and the employer's tax relief for the same person. That is simply not fair. It is not fair on the other taxpayers, and there is no justification for special treatment in that way.
      I would go further. I am interested to hear the hon. Member for Buckingham say that he has been heavily lobbied on this issue, because the organisation that represents service companies—the Professional Contractors Group, the lobby and professional group which has worked with the Government for the past few years—has been totally silent on this issue. In fact, it has been totally silent on every issue over the last 12 months. Its website no longer carries the frequent information and demands that it used to have. When the Government introduced the legislation, we said, "This is what we believe to be the case; we are standing by this legislation. However, we will work with you. If you can clearly demonstrate to us that we have made an error in how we treat you in relation to either your training costs or the 5 per cent. that we already allow—which nobody else
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      gets, and which can be paid on training costs or on administration costs—talk to us about it." There has been no discussion; there has been radio silence.
      I understand and applaud the hon. Gentleman's declaration that he merely wants to ensure that those in service companies are not disadvantaged because of the IR35 legislation and do not receive unequal or different treatment from everybody else in the tax system. That is what the status quo provides. Under his new clause, those who seek extra reliefs with no justification to reduce their tax liability would have an unfair position with regard to all other taxpayers. I would therefore ask him to withdraw it.
      The Government continue to be prepared to discuss these issues if evidence of a problem can be supplied to us. If the hon. Gentleman prefers to press the new clause to a vote, however, I shall have to advise my hon. Friends to oppose it in the name of fairness and justice to the 26 million taxpayers who work in the tax system and get a fair deal from it as it is. They would rightly be outraged if a small proportion of taxpayers were to receive a greater advantage than them.
      Mr. Flight: I have received complaints, inevitably, from those in the software industry that, because they have fallen within the IR35 legislation and they face considerable training costs to keep their skills up-to-date, they are tax-disadvantaged. The new clause does not seek a tax privilege for those people. As the Paymaster General has said that the Government are entirely open to addressing any problems, however, I should like to pursue, outside the Chamber, what problems might exist and whether they need to be addressed, or whether the body of people who have approached me have misunderstood their position under IR35.
      The basic principle of the new clause is that people should not be disadvantaged with regard to skill training—everybody wants to ensure that the country is more skilled and that productivity rises—just because they fall under IR35. On the basis that the issue will be investigated further, given what the Paymaster General has said, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 10

      ATTRIBUTION OF GAINS TO MEMBERS OF NON-RESIDENT COMPANIES
      '.—() In section 13 of the Taxation of Chargeable Gains Act 1992 (attribution of gains to members of non-resident companies) in subsection (5) omit the word "or" immediately preceding paragraph (d) and at the end of that paragraph insert "; or
      (e) a chargeable gain accruing on the disposal of an asset held by a company which complies with subsection (2) of section 13A of the Taxes Act 1988 (close investment-holding companies).", —[Mr. Flight.]
      Brought up, and read the First time.
      Mr. Flight: I beg to move, That the clause be read a Second time.
      I regret that, at this late hour, I raise for the third year running what I believe to be a continuing injustice in the tax system. However, I accept that this injustice occurs in very limited circumstances.

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      Section 13 of the Taxation of Chargeable Gains Act 1992 prevents UK residents avoiding tax on capital gains by arranging for gains to arise in closely controlled offshore companies, namely companies owned by a few individuals. Section 13 counters any abuse by taxing UK residents on their corresponding share of such gains. It is widely drawn and contains only limited exemptions, principally for gains made by overseas trading companies.
      A particular difficulty arises when commercial activities do not amount to trading, and a later new clause will explore the trading versus investment issue and the outdated approach that is sometimes used. The result of the difficulty is that a UK family-controlled business can find that it is taxed on gains made in overseas subsidiaries whether or not those gains can be remitted back to the UK and to the family who make up the controlling body. In some cases, the gains may not even represent real profits, but only exchange rate fluctuations.
      The particular problem is for property investment businesses. Section 13 places a considerable compliance burden on such companies and can result in anomalous tax charges, putting privately owned British groups at a considerable disadvantage compared with public companies and non-British businesses.
      The new clause seeks to address the issue by extending the gains that will not be subject to the section 13 charge to gains arising to groups of companies that invest in property on a commercial basis. It would do that by using an existing definition in subsection (2) of section 13A of the Taxes Act 1988 to distinguish trading and property investment companies from pure investment activities. That would ensure that ordinary equity and similar investments could not be packaged into UK companies to avoid capital gains tax.
      The Grosvenor Group of companies feels with some justice that it is being persecuted under the law as it stands. In one case, it owns indirectly 25 per cent. of an EU-resident property investment company and the remaining shares are controlled by EU residents. The European group's strategy is to create a property fund and it will sell 49 per cent. of the shares to a new company established to hold a group of companies that own established retail investment properties in Europe. The price to incoming new investors is determined and the company uses the cash to reduce external debt and finance new property investments.
      The company is not controlled by Grosvenor, although Grosvenor can have a place on the board. It is difficult to argue against such a compelling commercial strategy simply on the ground of a domestic UK tax difficulty. Even if Grosvenor objected to the transaction, it would not have any power to prevent it.
      Grosvenor has incomplete information from the company in question and has difficulty complying with the reporting requirements for the European company's investments, and little UK tax is payable as a result of the historic structure of the European company. The equivalent UK section 13 base case cost is negligible because the underlying company is to be sold or financed by loans rather than share capital. Therefore, Grosvenor picks up a large UK capital gains tax bill of £10 million and corporation tax at 30 per cent. works out on a euro basis at £10.7 million.
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      11.15 pm
      From the point of view of Grosvenor, the UK holding company, the gain is unrealised because the European company is not making any distribution to shareholders and the cash realised simply pays down debts. The £10 million tax is payable, but no cash flows through to pay it. If Grosvenor sells its interest in the European company to release funds to pay it, there is no credit for the section 13 tax to be set against the tax on the gains of the sale of the European company, which is a double taxation situation.
      The problem has been recognised in negotiations to date, but it is a low priority. Aside from general policy objections, the Government might be concerned that the arrangements in the new clause could allow UK residents to shelter gains on UK investment properties by holding them in non-UK resident companies. If so, we could exclude the holding of land in the UK from the qualifying activities.
      The bottom line is that the law as it stands can create a double capital gains taxation charge. If the Government do not like our proposal for addressing it, will they produce one of their own?
      Mr. Burnett: Do I understand the hon. Gentleman correctly? Is he saying that private companies are merely seeking the same tax treatment as public companies?
      Mr. Flight: In essence that is the case, but the arrangement is sparked by the problem that arises when a private group is controlled by a family trust.
      Rob Marris: I think that I understand the hon. Gentleman's argument, but it sounds as though he wants to change the law to give a tax break to property speculators who engaged in a tax avoidance vehicle that failed to deliver.
      Mr. Flight: With respect, I expected better from the hon. Gentleman, who is a lawyer. That is not the case in the slightest. A UK company that owns minority investments in, for example, European property companies gets a look-through tax treatment and does not suffer double taxation. If the holding is controlled not by individual shareholders but by a trust, it gets exposed to double taxation. I cannot think that the hon. Gentleman, as a man of principle, would want our tax law to impose double taxation on normal commercial investment activities. I would be pleased to take him through the details at another time, but the new clause is not about speculation and tax sheltering. It is merely designed to achieve fair taxation in line with publicly owned companies that have shareholders.
      Rob Marris: I am grateful to the hon. Gentleman for his offer of an explanation at a later date, which I may take him up on. Most, if not all, hon. Members would not be in favour of double taxation, but can he explain why a trust exists rather than a regular company in the example that he gave? Is not the trust a tax avoidance measure?
      Mr. Flight: No. The hon. Gentleman associates trusts, for some good reasons, with tax avoidance schemes, but many companies—especially family companies—prefer the old-fashioned bona fide use of a trust, and the new

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      clause is aimed at them. The legislation was designed to abolish a tax avoidance scheme, which I named the Belgian wheeze. Inadvertently, however, it catches one or two bona fide situations. Some relief has been afforded, but we leave open an unfair double taxation charge.
      Mr. Burnett: I assure hon. Members that trusts do not exist solely for the purpose of tax avoidance; in fact, many are set up for the sensible family reasons that have been given.
      Rob Marris: I was not trying to suggest that every trust is set up as a tax avoidance vehicle. I was referring specifically to the Grosvenor trust, which, from what was being said, sounded like such a vehicle.
      Mr. Burnett: I am not aware of the intricacies of the Grosvenor trust or trusts. All I can tell the hon. Gentleman is that in my time as a practitioner I have set up a great many trusts, invariably for bona fide family reasons such as ensuring succession in a business and, often, the prudent running of a business.
      In Committee, we referred to "investment bad, trading good", and I note that the matter will come up later. Investment companies are very important. They employ many individuals, and they facilitate jobs, trading and industry. In an intervention on the hon. Member for Arundel and South Downs (Mr. Flight), I asked why the Bill should prejudice private companies. If the Paymaster General has an explanation for that, I look forward to hearing it.
      Dawn Primarolo: I shall deal first with the last point, which is the claim that the Bill discriminates unfairly against private companies compared with public companies in otherwise identical circumstances. It counters the avoidance of UK tax by UK residents who invest through closely controlled companies. Any closely controlled public company will fall within the scope of the Bill, and a private company that is not closely controlled will fall outside it. The Bill draws no distinction between companies according to whether they are public or private; it is the fact that the company is closely controlled that is crucial.
      Mr. Burnett: Will the Paymaster General explain whether there is different tax treatment, in the same circumstances, for a closely controlled company and another company, let us say a public one? If so, will she justify it?
      Dawn Primarolo: Perhaps my remarks on the new clause, specifically on anti-avoidance legislation, will answer the hon. Gentleman's questions.
      Unfortunately, one of the simplest ways to avoid capital gains tax on the sale of assets, such as shares in a UK company, is to hold them in an offshore company, which then realises the assets outside the UK tax jurisdiction. Specific anti-avoidance rules introduced in 1965 counter that. They apply to companies that are closely controlled, and it is whether or not they are closely controlled that determines the attribution of the gain. The new clause would amend the key provisions.
      Reference has been made by some hon. Members to whether the new clause concerns a particular company. I want to state on the record that I do not know whether
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      that is the case. I shall refer not to that company but to the principles in the Bill and to what we seek to achieve. There have been discussions and representations on this matter, as there are on every aspect of the tax system. However, I would be extremely grateful—it would be most helpful—if hon. Members who want to contribute further to the debate did so without referring to any particular company.
      Key provisions would prevent UK residents from disposing of investments tax-free through an overseas company that is closely controlled. That anti-avoidance rule ensures that UK resident participants in the company are taxed on their share of the gains. I cannot support new clause 10, but it will be helpful to set it in context and give a brief account of the current position.
      The hon. Member for Arundel and South Downs (Mr. Flight) has returned to this issue on several occasions. In the Finance Act 2000, we tightened a series of regulations to remove a loophole that enabled people to exploit provisions in some of our double taxation treaties. The problem was the result of the interaction between a number of aspects of the tax system. Following a constructive debate in Committee on that legislation, led by the hon. Gentleman, and another on Report, we agreed to look again at the legislation to see whether we could remove some of the rougher edges that inevitably occur.
      We made a series of changes to improve the position. We also looked long and hard at various proposals on how to ease the position of property investment companies, and the House debated those proposals at length. One of the proposals would have excluded companies that had been resident outside the UK for more than five years. That was not acceptable because it would have given the green light to long-term tax avoidance—it would be crazy to say, "Okay, do it for five years." Another proposal would have raised the 10 per cent. threshold to 25 per cent. That was not acceptable because it would have let out people who were in a position to exercise a degree of control over the actions of the company.
      Another proposal would have imposed a motive test and excluded companies that invest in land commercially from the scope of the anti-avoidance rule. We could not accept that because we could not see how it would operate in practice. Regardless of the motive for establishing the non-resident company, if the effect is to enable a UK resident to enjoy the benefits of gains without paying tax, those arrangements have to be considered in the same light as those constructed with a clear avoidance motive.
      The whole point of our system is to ensure that UK residents who enjoy the benefits of the gain do not escape the tax that they should pay in the UK. That is perfectly reasonable. It is what every Member of Parliament does and what we expect every citizen of this country to do. If we all pay our fair share, we will not be asked to pay more than our fair share. Those who do not pay their fair share ensure either that there is less money to invest in public services, or that the rest of us pay more. That is the heart of the provisions.
      New clause 10 would exclude gains on property investment except where the property in question is let to a person connected with the company. We are not attracted to that proposal because we are firmly wedded to the principle that gains should be taxed if the person who gains is a UK resident. That is not unreasonable. The previous Government were also firmly wedded to that principle, and quite rightly. It is a question of fairness.

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      The holding and letting of property is an investment activity. We accept that there is a wide range of property investment, stretching from the holding and active management of a wide portfolio of properties to passive investment in a single residence. However, it is difficult to see how a provision could be devised that drew a clear distinction between the one and the other without giving rise to serious problems at the boundary. That is precisely the difficulty in determining the matter, as, in fairness, the hon. Member for Arundel and South Downs recognises.
      11.30 pm
      The new clause does not even attempt to address those problems. It would allow United Kingdom residents to escape tax on their property investment by holding the properties in an overseas company, which is simply unacceptable. However, the problems with the new clause do not stop there. It would also allow gains on shares in trading or property investment companies to escape UK tax where the shares are held through an overseas company that is closely controlled by a UK resident. I assume that the hon. Gentleman does not intend that to happen, but the clause would achieve that result as well.
      That makes my point—the boundary issue is extremely complex and difficult. The Government have struck the best balance that they could. Even though the hon. Gentleman is very good at identifying problems and has tabled some amendments to this Bill in which he found solutions that we were prepared to accept, he has not found such a solution on this occasion and the new clause does not work. However, I do not complain to the House about his persistence in trying to find a way through the matter and I hope that it will eventually result in success. I wish him luck in his attempt, and if he manages to achieve his purpose before we do, I will graciously accept his proposals. However, I regret that, on this occasion, his new clause makes matters worse, so I ask him not to press it to a vote.
      Mr. Flight: I thank the Paymaster General for her comments and her implicit assurance that she understands the complicated point that I have been banging on about all this time, even at this time of night. I said that I did not think that the new clause would necessarily work. As she will be aware, other attempts have been made to find a way through, and it is important that there is an issue that should, in justice, be addressed. I gained the impression that because it was a difficult issue, it had fallen to the bottom of the pile, so I have been endeavouring to ensure that it moves up towards the top. If this attempt does not work, I will not pursue it, but I may wish to return to the matter informally if the tax barrister who assisted me in drafting the proposal has a way of making it work. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 11

      EXPENSIVE CARS
      '.—(1) In the Capital Allowances Act 2001:

      (a) in section 74(2)(b), for "£12,000", substitute "£24,000";

      (b) in section 75(1), for "£3,000", substitute "£6,000";

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      (c) in section 76(2) and section 76(4), for "£3,000" substitute "£6,000";

      (c) in section 76(3)(a), for "£12,000", substitute "£24,000".

      (2) In section 578A of the Income and Corporation Taxes Act 1988, in subsections (2)(b) and (3), for "£12,000", substitute "£24,000".
      (3) This section has effect for accounting periods commencing on or after 1st April 2002.'.—[Mr. Flight.]
      Brought up, and read the First time.
      Mr. Flight: I beg to move, That the clause be read a Second time.
      This is an especially dry clause to deal with when the time is getting on for midnight, but it represents proposals made by the Chartered Institute of Taxation in one of its "quick wins" papers on tax simplification, going back to last autumn. I thought that the proposals had been discussed with the Inland Revenue, which had welcomed them. The new clause is intended simply to update some definitions that have become rather out of date. The net effect is not a tax cost and may even be a tax gain.
      For capital allowance purposes, there are different rules for so-called expensive and non-expensive cars. An expensive car is one that costs more than £12,000. The limit was last raised in 1992 from £8,500 to £12,000. When a car is expensive, instead of being able to claim 25 per cent. of the balance of expenditure every year, the allowance is restricted to £3,000. Separate tax records must be kept for all expensive cars; that can lead to a tedious amount of administration.
      Since 1992, car prices have increased in nominal money terms and it is unrealistic to define an expensive car as one that costs more than £12,000. I suggest that £24,000 is a more realistic definition of what is supposed to be an expensive car. The Capital Allowances Act 2001, which replaces the 1990 measure, describes the cars as over the cost threshold rather than expensive. That is an example of a bit of spin, which has confused the original intention.
      The tax system does not allow any deductions for depreciations or amortisation. Instead, capital allowances—the tax man's equivalent of depreciation—are given. The system requires careful consideration of whether expenditure falls into qualifying categories and precise calculations of the allowances that are due.
      The capital allowance computed replaces depreciation in the tax computation as a deduction from profits in calculating tax. Whether the process is efficient and whether it achieves anything is a wider question. In the past, there have been restrictions on what is allowable. In many ways, capital allowances have been used as investment incentives. However, the system is being improved, notably in the Finance Bill, with a system of reliefs, not via capital allowances but through generally permitting a deduction for whatever is charged in the accounts for intangibles.
      Surely we are approaching a stage where businesses should simply be allowed to deduct depreciation. That happens in, for example, Germany in computing taxable profits. If there is a need to give special incentives, for example, for computer equipment that small businesses buy, they can be provided through an enhanced deduction in the same way as research and development relief.

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      Plant and machinery constitute key allowances for business. In general, all purchases that fall into that category are pooled and written down en bloc at a rate of 25 per cent. on a reducing balance basis. There are some exceptions for long-life items.
      The new clause deals with a limited simplification of the system and is aimed at administrative savings. It has been tabled for efficiency and applies to cars that are bought or leased by businesses for use in their activities. They are treated as plant and machinery. A requirement to run a pool for cars that is distinct from the general pool was abolished in 2000.
      The capital allowances system continues to restrict allowances on so-called expensive cars. The system operates by requiring the business that holds any expensive cars to write them down separately, with separate records, as I have described. Given that the majority of cars that businesses run cost more than £12,000, the restriction causes substantial extra administration, to which I referred. The new clause would double the limit for an expensive car for current accounting periods.
      The Inland Revenue might argue that it needs some protection against chairmen deciding to run Rolls-Royces on the business. Although the business may regard that as a legitimate expense, it could be questioned. However, the new clause would remove, at a stroke, the need for a great deal of record keeping; the argument against the new clause is that would cost the Exchequer significant sums of money. That is unlikely—it may even make money for the Exchequer given the interaction in the change of methods in the sale of a vehicle.
      It is perhaps necessary to appreciate what happens when a business disposes of an expensive car. The disposal proceeds are compared with tax value that is written down. That will normally produce a balancing item and an extra allowance for the business. If the new clause is accepted, the business would get a modest allowance on the car in the first year and so on thereafter. There would be no balancing allowance because the expenditure would be lost in the pool of plant and machinery assets.
      The bottom line is that the use of company cars is declining dramatically anyway. There is a complexity in the rules that incurs costs to administer and, in terms of tax gains or losses to the Revenue, this measure would probably produce a tax gain. There is a generally accepted case for simplification and, while we certainly would not press this matter to a vote, we hope that the Minister will respond that the Revenue is looking at this measure or a variant of it—we understand this to be the case—to simplify something that can easily be simplified at low tax loss.
      John Healey: The new clause deals with capital allowances for expensive cars. This is, as the hon. Member for Arundel and South Downs (Mr. Flight) has said, a misnomer now, because cars costing more than £12,000 are not generally considered expensive these days, although I still think so. More significantly, the term is not used in the rewritten Capital Allowances Act 2001. It is, therefore, something of a misnomer and, as the hon. Gentleman said, the provision is somewhat complex to administer.
      We have a developing strategy for the use of fiscal and economic instruments to encourage the use of cleaner, more environmentally friendly cars. The rules for taxing
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      employee company cars and fuel, vehicle excise duty and the new capital allowances for cars with low emissions of carbon dioxide all work within this framework. Raising the £12,000 limit for cars generally would work against this environmental aim because it could benefit the purchasers and users of larger and more expensive cars, which tend to be more environmentally polluting. Encouraging investment in such cars would be both expensive and counter-productive to our environmental aims.
      I am aware of the submissions made by the Chartered Institute of Taxation. My right hon. Friend met representatives of the institute earlier this year, and we have invited them to submit the detailed workings that led them to suggest that there may be a gain to the Treasury from this measure. Our calculations suggest that the cost to the Exchequer of the proposals to raise the limit would be significant.
      We are aware of the concerns that some businesses have about the cost of administering the rules. This is a hardy perennial in Budget representations. However, as many businesses recognise, there are no clear alternatives that do not raise other significant issues that are difficult to deal with. So, while I recognise that the rules can add significantly to the administration of businesses, there are no easy solutions that fit with our environmental aims, avoid introducing perverse incentives and provide good value for money for the country and the Exchequer.
      I can tell the hon. Gentleman, however, that the Inland Revenue and my colleagues and I are keeping—and will keep—these rules under close review. We will consider suggestions for simplifying them in ways that do not compromise our other objectives, but his new clause is not compatible with those objectives. If the hon. Gentleman presses the matter to a vote, I will have to advise the House to reject it.
      Mr. Flight: This is not the time of night to spend more time on this matter. The new clause was intended to be dealt with in Committee, but time ran out. The CIOT feels that it has an argument, and the Minister has made it clear that the door is open for dialogue. I do not think that the proposal necessarily conflicts with the Government's environmental objectives, and I hope that this brief discussion will enable us to begin the process of considering how a sensible simplification might be administered. On that basis, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 12

      INVESTMENT COMPANIES AND TRADING COMPANIES
      '.—(1) Schedule A1 to the Taxation of Chargeable Gains Act 1992 shall be amended as follows—
      (2) In paragraph 6, subparagraphs (1)(a), (1A), (2)(a), (2A), (3)(a), (4), (5) and (6) shall cease to have effect.
      (3) In paragraph 6(7), the words in brackets shall cease to have effect.
      (4) In paragraph 22(1), the definitions of "trade", "trading company" and "trading group" shall cease to have effect.
      (5) For paragraph 6A there shall be substituted—
      "6A(1) A company does not rank as a qualifying company for the purposes of paragraph 6 by reference to an individual at any time when it is his Private Investment Company;

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      (2) A Private Investment Company is a company as a whole, or substantially the whole, of whose share capital is held by an individual or persons connected with him;
      (3) A company is not a Private Investment Company if, notwithstanding the previous subparagraph, it has five or more full time employees other than the individual concerned in subparagraph (1)."
      (6) This section shall have effect from 6th April 2002.'.—[Mr. Flight.]
      Brought up, and read the First time.
      11.45 pm
      Mr. Flight: I beg to move, That the clause be read a Second time.
      The clause is another Chartered Institute of Taxation proposal, which raises an issue of rather greater fundamental importance. For many years, the tax law has contained an in-built and assumed bias against investment companies. There are many provisions in which privileges given to trading companies are not available to investment companies. In simple terms, the tax code operates on the basis of trading: good; investment: bad. The distinction is much less appropriate now than it may have been in the past.
      Paul Flynn: It may be helpful to the House if the hon. Gentleman explained to us whether he intends to withdraw all the new clauses that he is moving, and which he admits are more suitable for discussion in Committee than in the House. Is his refusal to press them to a Division intended to disguise the fact that there are only two Tories in the Chamber?
      Mr. Flight: I am disappointed that such an able Member of Parliament should raise an entirely spurious point. The clauses were intended to be dealt with in Committee. The Committee's obsession with some other territory—I forget what, specifically—meant that we ran out of time. They are part of an agenda to try to simplify our tax system. It is right and proper that they should be put on the record. I assure the hon. Gentleman that I would prefer to be home in my bed and doing my duty, so I shall waste no more time.
      Rob Marris: Having driven home in a big car?
      Mr. Flight: No, a little car—a little Clio.
      The distinction between investment and trading is out of date, and the clause seeks to probe the subject in one specific area, rather than attempting to change the whole tax system. Specifically, it focuses on the distinction within the capital gains tax tapering relief rules. That has been chosen as there have already been changes in the legislation in that area.
      There is a much better taper for business assets than for non-business assets. Business assets are carefully defined and include trading activities, investments in unquoted trading companies and employee investments in their employing company in all cases. In respect of the latter point, there has been a modest development in the investment trading rules, with the changes in the Finance Act 2001 to extend employee shareholding to situations where the individual works for an investment company. It is suggested that that shows that the Revenue and the Government have recognised the underlying point of principle that we raise.
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      Surely the focus now should be on active companies versus passive companies. In such a situation, there may well be a legitimate reason to protect the Exchequer against manoeuvres by individuals holding private investments through passive company corporate shells. It is suggested that all companies should qualify for the enhanced taper relief that is on offer for trading companies, but there should be a restriction against private investment companies.
      The definition in the clause is an attempt to prevent the private investor from trying to manipulate the tax rules, although even here there would be an argument for not preventing such a person taking advantage, if they were so minded. It would mean that any investments held through a corporate shell would pay capital gains tax twice—within the company and again when the individual sells the shares in the company—rather than once for a direct holding. Any advantage gained through the increased tapering at one level would be negated to all intents and purposes at other levels.
      The impact of the change would be limited. It would simply open up to the higher taper relief a number of investments by individuals in unquoted investment companies that were of a significant size. The crux of the matter and the reason for the clause is to allow a probe into the rationale for the continuing distinction. In this day and age, surely the aim should be to encourage all active businesses, and if there is a need to discriminate against certain businesses, to do that in as limited a way as possible.
      Ruth Kelly: I am afraid that I cannot support new clause 12. It aims to allow shares and securities in non-trading companies to qualify as business assets for capital gains tax taper relief on the same footing as shares and securities in trading companies. That would mean that shares in an unlisted non-trading company, such as a property investment company, would qualify for business assets taper relief. There would be no distinction between trading and non-trading companies.
      I should remind the House why we have this distinction between trading and non-trading companies for taper relief. Business asset taper relief supports productivity improvements by focusing on trading companies. There is a long-standing view that productivity gains are likely to be greater in trading companies, such as manufacturers, than in investment companies, such as property landlords.
      That is not to say that the Government do not recognise that a range of investment companies could contribute positively to the UK economy. That is why we announced in the Budget that there would be consultation on further reforms of the corporate tax system, including a review of the scope for greater alignment between the treatment of investment and trading companies. A consultation document will be issued later in the summer. The outcome of that review will have implications for other parts of the tax system in addition to how companies are taxed. One such area could be the capital gains tax treatment of shares in companies.
      That is also why we announced in the Budget that we shall continue to review the case for further changes to the non-business asset capital gains tax regime for taper relief. However, we need to be persuaded of the case for change in those areas by evidence of economic benefit and value for money. Without evidence, the new clause seems premature.

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      Until we know the outcome of the two reviews that we are carrying out, we believe that the distinction between trading and non-trading companies should remain as it is for taper relief purposes. The introduction of new clause 12 would create fresh tensions at the margins by moving the boundary between qualifying and non-qualifying companies. Therefore, I must ask the House to reject the new clause.
      Mr. Flight: I am glad to hear that the Minister has established processes to examine this territory to try to make sensible modernising reforms. She knows that the CIOT is not seeking beneficial tax avoidance schemes, but rather the modernisation of our tax regime. I trust that whatever makes sense in this area will be advanced in due course. I still think that active versus passive will become the main difference for the future. On the basis of what the Minister has said, I beg to ask leave to withdraw the motion.
      Paul Flynn: No.
      Question, That the clause be read a Second time, put and negatived.

    New Clause 13

      EXEMPTIONS FROM STAMP DUTY ON THE DISPOSAL OF A SUBSTANTIAL SHAREHOLDING
      '.—(1) This section applies where a company ("the transferor company") disposes of shares or an interest in shares ("the transferred shares") in another company ("the second company").
      (2) If the first, second and third conditions (as defined below) are fulfilled, stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) shall not be chargeable on an instrument executed for the purposes of or in connection with the transfer of the transferred shares.
      (3) An instrument on which stamp duty is not chargeable by virtue only of subsection (2) above shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for that subsection or it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with any duty.
      (4) The first condition is that the transferor company satisfies the requirements relating to an investing company, and the second company satisfies the requirements relating to the company invested in, set out in Part 3 of Schedule 7AC to the Taxation of Chargeable Gains Act 1992 ("the 1992 Act").
      (5) The second condition is that, were the disposal of the transferred shares to give rise to a gain, that gain would not be a chargeable gain by virtue of the terms of Schedule 7AC to the 1992 Act.
      (6) The third condition is that the disposal is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to stamp duty, income tax, corporation tax or capital gains tax.
      (7) This section applies to any instrument which is executed after the day this Act comes into force, unless it is executed in pursuance of an unconditional contract made on or before that day.'.—[Mr. Flight.]
      Brought up, and read the First time.
      Mr. Flight: I beg to move, That the clause be read a Second time.
      New clause 13 introduces stamp duty exemption to mirror the Government's new capital gains tax exemption for the disposal of substantial shareholdings. One of the main obstacles preventing companies from acquiring the
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      shares of another company is the cost of stamp duty reserve tax at 0.5 per cent. of the value of the shares. The Government said, when they introduced the substantial shareholding legislation in March, that they wanted to move to a system under which tax was not the driver in commercial decisions. Hence an exemption from tax has been introduced on the disposal of qualifying shares. However, tax is still a driver in the form of stamp duty. If a company makes a disposal of an asset that the Government accept is free from corporation tax—[Interruption.]
      Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman. Could hon. Members who are not taking part in this debate withdraw from the Chamber or resume their seats? We are discussing the Finance Bill.
      Mr. Flight: Thank you, Mr. Deputy Speaker.
      If a company makes a disposal of an asset that the Government accept is free from corporation tax, surely there is an argument for the asset being exempted from SDRT. The Government may respond that 0.5 per cent. SDRT is cheaper than 4 per cent. stamp duty on assets. However, since this Finance Bill, stamp duty is levied only on land and buildings. Therefore, acquiring assets used in a trade would cost the acquirer 4 per cent. of the value of the land and buildings. This may be significantly lower than the cost of 0.5 per cent. levied on the value of the whole of the trade if the shares are acquired, particularly if the company trades from rented premises.
      Ruth Kelly: The Bill contains the new corporation tax exemption regime for gains and losses made when groups dispose of substantial shareholdings. A substantial shareholding broadly means 10 per cent. or more of the ordinary share capital of the company being disposed of. There are a number of other conditions that have to be satisfied before the new exemption applies and which ensure that it is properly targeted.
      The purpose of the new clause is to make the disposal of a substantial shareholding also exempt from stamp duty. Corporation tax on gains and stamp duty are quite different in nature. Corporation tax on capital gains is a tax on the gain made when an asset is disposed of. In contrast, stamp duty is paid at a much lower rate, on the consideration given when an asset is transferred. Corporation tax on capital gains is paid by the seller of an asset, stamp duty is paid by the purchaser.
      The purpose of the new substantial shareholdings exemption is to facilitate corporate restructuring by, for example, removing a cost for trading companies that wish to restructure by disposing of part of their business by way of a disposal of shares. However, there is no reason why the acquiring group should be given a stamp duty exemption based upon the extent of the previous owner's investment. Such an exemption would be unfair to persons investing in other companies which were not substantially owned. Indeed, in its recent paper on stamp duty on shares, the Institute for Fiscal Studies recommends against an exemption for acquisitions activity.
      I can see no reason to make transactions that benefit from the new substantial shareholdings exemption also exempt from stamp duty, and I urge the hon. Member for Arundel and South Downs (Mr. Flight) to withdraw the new clause.

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      12 midnight
      Mr. Flight: The essence of the argument is that the new exemption on substantial disposals in relation to capital gains tax is to stop tax driving commercial decisions, as, in nearly all cases, capital gains will be involved. We are making the point that, in group restructuring—which we are looking to encourage—there is still the drive in the form of stamp duty. This is an issue of principle, depending on what the Government are seeking to achieve.
      Rob Marris: Is this not the fourth new clause in a row proposed by the hon. Gentleman that seeks simply to institute a tax break for the rich and to benefit the economy and society not at all?
      Mr. Flight: These clauses have been proposed by the non-political and unbiased Chartered Institute of Taxation, which meets regularly with Labour, Liberal Democrat and Conservative Members of Parliament. The institute seeks to support the efforts to simplify the tax system where material costs are not involved, one way or the other. It is the proper role of the House on Report to consider reforming proposals from such neutral tax bodies. It is entirely proper and sensible to hear whether there are issues that the Government—whoever is in power—feel it makes sense to address. With the greatest of respect, the hon. Gentleman's comment is entirely off-beam as to the new clauses.
      This issue is not appropriate for a vote, and we have moved the new clause as a probing measure in the context that I have just described. There may be further discussions between the Revenue and the Chartered Institute of Taxation.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 17

      INVESTMENT INCOME OF SINKING FUNDS AND SERVICE CHARGE FUNDS (No. 2)
      '.—Profits comprising investment income accrued on funds held on trust—

      (a) under section 42 of the Landlord and Tenant Act 1987 (c. 31), or

      (b) exclusively for the purpose of repair and refurbishment of property in the interests of tenants by registered social landlords or other exempt landlords under section 58 of that Act,

      are not chargeable to income tax or to corporation tax.'.—[Mr. Heath.]
      Brought up, and read the First time.
      Mr. David Heath: I beg to move, That the clause be read a Second time.
      I hasten to assure the House, after the comments made during the previous speech, that this new clause seeks to deal with the interests of those on very low pay, rather than the rich. The matter was drawn to my attention by constituents who live in sheltered accommodation. They live in what was Royal British Legion sheltered accommodation, but is now run by a housing agency at Mow Barton in Martock. The issue was raised by my
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      constituent Commander Barkaway, who was very concerned by what he had construed as a change in tax law that was affecting him and fellow residents.
      My constituent is concerned about the taxation of the money that residents are required to pay into a trust to deal with repairs and dilapidation; what is known as a sinking fund. Residents are required, as part of their tenancy agreement, to pay a set amount into a fund that is used for running costs, cleaning and minor repairs, and is set aside for more major repairs such as to roofs.
      The problem is that the income accruing on that fund is taxed at a rate of 34 per cent., which, the residents put to me, is a punitive rate for those on low incomes. They had assumed that there had been a change in the law of which they had been unaware. I am not an expert in this area and I assumed that there must have been a change in the law that I had not noticed. In fact, it was a change in interpretation of the law by the Inland Revenue that gave rise to the concerns. The Inland Revenue issued guidance in October 1998, because although some trusts were apparently applying the law—the unified 34 per cent. tax rate—correctly, others were not, and were continuing to charge a rate equivalent to the basic standard rate. The guidance suggested that that was an incorrect interpretation of the law, and needed to be amended.
      There was also some confusion because, under section 42 of the Landlord and Tenant Act 1987, the money must be held in a trust, and must therefore be taxed as if it were a trust. However, there are housing schemes that are outside the requirements of the 1987 Act, as well as registered social landlords and other exempt landlords. The Inland Revenue again issued guidance, in August 2000, suggesting that even those trusts that did not fall within the precise terms of the 1987 Act would also comprise a trust, and must be taxed on the same basis.
      As I said, this has given rise to considerable concern. It is not surprising that lay people, myself included, felt that there had been a change in the tax situation. Even those who are supposed to advise us on these matters made the same mistake in the newspapers. According to a November 1998 edition of The Sunday Times:
      "People who own leasehold flats could face a big increase in service charges after a decision to change the way the money they set aside for repairs is taxed. Many leaseholders will now have to pay tax at 34 per cent., nearly half as much again as house-owners."
      The article goes on to discuss a new tax rate.
      I ask the Minister not to dwell on the detail of the new clause. I readily accept that it is a vehicle for debate, not a proposal that is necessarily complete. I made two attempts to table the original new clause 15—it, too, was on the original amendment paper, but it was not selected for debate—and I also attempted a slightly more complex version. The new clause before us is not perfect. First, it does not identify the specific groups that I am seeking to help; secondly, it removes them from tax altogether, rather than returning them to the basic tax rate. That would be a more appropriate position, but it would require a much more complex new clause.
      I hope that the new clause stimulates debate—not only here but within the Treasury—on how we might deal with this anomaly. I do not argue with the fact that trusts have been used as a means of avoiding tax in several ways, and I have no doubt that a trust such as this was equally capable of being abused in that way. As I understand it, the unified tax rate was introduced to establish an

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      approximation of the rate that might apply to a range of beneficiaries to the trust—some paying the basic rate, others paying the higher rate, and others still falling outside the tax rate altogether.
      The problem is that the taxation of trusts is not linked to the circumstances or tax position of any particular beneficiary—in this case, the tenant. I cannot believe that the Government or the law intend that people whose income falls below the tax thresholds, or who would normally pay the basic rate—and who, if they owned their own property, could put the money aside on that taxable basis to pay for repairs—should, because they are required by this legislation to put the money into a sinking fund that forms a trust, be taxed at a much higher rate. I ask the Minister to give serious consideration to finding a way to help such people, who are often pensioners in reduced circumstances, so that they can avoid paying excessive tax for a purpose—keeping a roof over their heads—that is wholly beneficial to them and to society.
      Ruth Kelly: As the hon. Member for Somerton and Frome (Mr. Heath) has set out, the new clause aims to remove the investment income of certain sinking funds and service charge funds from income tax or corporation tax. Those funds do not pay corporation tax but they pay income tax at the special rate that is applicable to trusts.
      I understand the hon. Gentleman's motivation and, as requested, I shall not dwell on the detail of his proposals. However, there is no rationale for exempting that type of income from tax or for taxing it purely at the lower rate. If the funds were held by individuals in a bank or building society account, the interest arising on that investment would be taxed in the normal way. The fact that funds are held in trust is no reason to exclude them from tax.
      The income from the funds is taxed in the normal way for that type of trust, which can be used for a wide variety of purposes. The new clause refers to the Landlord and Tenant Act 1987, which covers such funds whether they are set up for people living in low-cost housing association flats or in leasehold apartments in very well-to-do areas. The rate at which trustees pay tax on income is set to take into account the wide variety of circumstances of those who put funds into the trust or who otherwise benefit from the trust, as the hon. Gentleman pointed out. Those funds are not just for poor tenants. They can be found across all types of housing.
      The hon. Gentleman appears to propose that we try to identify those trusts that serve poorer tenants and separate them from those that serve wealthier tenants. That is impractical. In any event, the 34 per cent. rate, which the hon. Gentleman mentioned, is charged on the trustee, not the person who pays money into the trust or the beneficiary. It is set at a rate that takes into account the fact that beneficiaries of the trust may pay tax at the basic or higher rates, and that others might even be non-taxpayers. The rate is set at a level that minimises the opportunities for trusts to be used to avoid tax, because that cannot be right.
      The hon. Gentleman suggests that there has been a change in the tax law, but there has not. The Inland Revenue issued guidance because some people were misapplying the tax rates and returning the income incorrectly.
      Mr. Burnett: Perhaps the Minister could have a word with her colleagues in whichever Department deals with
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      housing these days to see whether the law could be amended to allow sinking funds to fall under the aegis of a limited company.
      Ruth Kelly: I shall pass on the hon. Gentleman's suggestion, but as I understand the issue, it would be impractical to change the terms under which the trusts are taxed. For that reason and the others that I have given, I urge hon. Members not to accept the new clause.
      Mr. Heath: I am grateful to the Minister for giving her attention to a serious attempt to assist a particular category of people. I understand the point that she makes about the difficulties in identifying such people in legal terms. My hon. Friend the Member for Torridge and West Devon (Mr. Burnett) has made a suggestion of some merit and another method might be to put some limit on the size of the sinking funds, so that those below that limit—which would normally apply to a smaller scheme and lower value properties—might fall outside the unified rate and have a lower rate applied to them.
      I ask the Minister to give serious consideration to my case. It is not logical for someone who would not normally pay tax, or would pay tax at the basic rate, to be taxed at a much higher rate because by law they have to pay part of their income into a sinking fund. That is an anomaly that deserves closer attention. This is not the right time or place to pursue the matter further, but perhaps the Minister would write to me on the issue. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 19

      SIMPLER TAX ASSESSMENTS FOR LOW-INCOME PENSIONERS
      '.—(1) Section 8 of the Taxes Management Act 1970 shall be amended in accordance with the following provisions of this section.
      (2) The following shall be inserted after subsection (1C)—
      "(ID) A person whose total income for a year of assessment does not exceed £5,000 may be required, by a notice given to him by an inspector for the purpose of assessing him to income tax—

      (a) to make and deliver to the inspector, on or before the day mentioned in subsection (1A) above, a statement of his income and gains for the year, and

      (b) to deliver with the statement such information as may be required in pursuance of the notice.

      (1E) A person who duly complies with a notice served on him in accordance with subsection (ID) above in relation to a year of assessment is not obliged in addition to comply with any notice served on him under subsection (1) above in relation to the same year of assessment.".
      (3) In subsection (2), after "return under this section" there shall be inserted "or statement under subsection (ID) above".
      (4) This section shall have effect for the year 2002–03 and subsequent years of assessment.'.—[Mr Edward Davey.]
      Brought up, and read the First time.
      12.15 am
      Mr. Edward Davey: I beg to move, That the clause be read a Second time.
      New clause 19 is intended to remove the anxiety felt by many people, especially pensioners, on low incomes when they are sent the full monty, the full self-assessment

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      tax return. They are caused great distress when those returns drop through their letter boxes on to their doormats.
      I raised this issue during the debates on a previous Finance Bill, back in 1999. I gave concrete examples to show that many elderly people have been worried sick by receiving those forms. They often have no liability to income tax, but the forms are sent to them because they are triggered by automatic thresholds in the Inland Revenue computers.
      I refer hon. Members to my speech, as reported in column 755 of the Official Report for 5 July 1999. [Interruption.] I suggest that hon. Members take that reference and pocket it; or I could repeat that speech at length. By making that reference, I hope to ensure that my remarks are brief.
      I shall move from the examples that I cited in that debate to the substance of the point that I wish to make. At the moment, if there is no convenient PAYE source, it is impossible for Revenue officials to assess an individual for tax purposes other than through the self-assessment process. It is ludicrous that those very detailed tax returns, which cover sources of revenue from unit trusts, bonds and a range of different sources, should be filled in by those people on low incomes who would be affected by the new clause.
      Using previous legislation from the Taxes Management Act 1970, the new clause would, in effect, give Revenue officials the power to make very simple, back-of-the-envelope assessments, as they used to do under similar legal provisions. That would help the Revenue by cutting its costs and—this is the important point—it would remove a lot of the anxiety felt by those people.
      When I raised this issue with the Paymaster General during an Adjournment debate that I initiated in June 2000, she said that she would look at the matter, and I wish to give her and her colleagues another chance to do so.
      I should say that, in drafting the new clause, I have been grateful to people from the Chartered Institute of Taxation for their assistance. The hon. Member for Arundel and South Downs (Mr. Flight) referred to that institute. I should also say that the new clause came from the Low Incomes Tax Reform Group, which was set up by the Chartered Institute of Taxation. For the record, I should like to say that that institute promotes the interests of people on low incomes and has been running a very effective campaign.
      Because such a responsible and respectable group is behind the technicalities of the new clause and because the Government have indicated their willingness to consider such a measure, I recommend the new clause to the Paymaster General, and I hope that she will be able to accept it.
      Dawn Primarolo: I shall be brief.
      The hon. Member for Kingston and Surbiton (Mr. Davey) campaigns tirelessly on the way that the tax system affects low-income pensioners. He wants to make the requirement to comply with their obligations as easy as possible—an objective that I, the Government and all Labour Members share.
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      The new clause would set a £5,000 limit for people in self-assessment and give an alternative way to check the income of those on low income. In 2002–03, the personal allowance for those aged 65 to 74 is £6,100. If a retired person's previous income is less than their personal allowance, they should not be in the self-assessment system anyway, except in absolutely exceptional circumstances.
      When we have debated this previously, I have referred repeatedly, as I share the hon. Gentleman's concerns, to the work that the Government have been undertaking and the amendments that we have been making to the operation of the self-assessment form.
      First, we want to remove people from the self-assessment system if they should not be there in the first place, and to look very carefully for pensioners in particular.
      Secondly, for those who remain in the self-assessment system whose tax affairs are relatively straightforward but require them to be there, we want to make it as simple as possible.
      The problem with the new clause is that it brings more pensioners into the tax system, even if the calculation is simple and quick—one that can be made on the back of a fag packet, as I think the hon. Gentleman said—which is not the direction in which he or I would want the tax system to move. We need to make sure that we require only those people who have information that is pertinent to their tax levels in submitting forms. In fact, the hon. Gentleman's requirements for the £5,000 limit have an unintended side-effect: those who are self-employed who may make a loss would find that the Revenue was now investigating, and will be required to check their position. I am sure that the hon. Gentleman did not intend that.
      We, too, want to reduce the requirements of self-assessment on all taxpayers. Despite the changes that we have made to date, I have asked the Revenue to examine the whole system again to see whether further steps can be taken to make it easier for people to meet their obligations under self-assessment, and, whenever possible, remove from the self-assessment system those who find themselves caught in it but who do not need to be there. I am very grateful for the work that is being carried out with groups such as TaxAid, the Low Incomes Tax Reform Group, the working together group and the professional associations that are actively involved in that discussion with the Revenue. Like the hon. Gentleman, I thank those organisations for the constructive way in which they engage with the Government on this issue.
      I hope that the hon. Gentleman sees that he is pushing an open door and that he has made progress with his persistence. A proper and full discussion is taking place with all those groups to produce workable solutions. I hope that, now that he has put on record again—about which I am not complaining—his commitment to pursuing this project, he will withdraw the new clause and await the outcome of the work undertaken by all those groups in collaboration with the Revenue.
      Mr. Davey: At this late hour, it is a joy to be able to welcome the Paymaster General's positive assurances on this point. I shall, in a moment, seek the leave of the

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      House to withdraw the new clause, as she has given such a positive reply— [interruption.] The House gives its blessings to the hon. Member for Arundel and South Downs (Mr. Flight).
      I am sure that members of the Low Incomes Tax Reform Group, for example, will read the Paymaster General's words with pleasure. If they can assist her officials in any way, I am sure that they would be delighted to do so.
      Dawn Primarolo indicated assent.
      Mr. Davey: I am grateful to the Paymaster General for nodding her assent. Because of her warm words and promises, I will not quibble with the points that she made against the new clause. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.
      Further consideration adjourned.—[Derek Twigg.]
      Bill, not amended in the Committee and as amended in the Standing Committee, to be further considered tontorrow.

    ADJOURNMENT (SUMMER)
    Ordered,
    That this House, at its rising on Wednesday 24th July, do adjourn till Tuesday 15th October.—[Derek Twigg.]

    SECTION 5 OF THE EUROPEAN COMMUNITIES (AMENDMENT) ACT 1993
    Ordered.
    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).—[Derek Twigg.]

    PETITIONS

      Fireworks
      12.25 am
      Mr. William Cash: I have the honour to present a petition on behalf of no fewer than 1,500 residents of Cheadle, Staffordshire. The petition, which is signed by Bill Allan of the Cheadle Conservative club and Councillor Stephen Ellis, declares that the
      residents are opposed to the sale of powerful and harmful fireworks to those who are not prepared to obtain them for responsible entertainment use such as organised displays.
      The Petitioners therefore request that the House of Commons legislates to regulate and license the sale of powerful and potentially harmful fireworks in the interests of public health and safety.
      The petitioners remain etc.
      To lie upon the Table.

      Rush Green Surgery
      Mr. Andrew Rosindell: I wish to present a petition on behalf of my constituents in the Rush Green district of Romford who are desperately concerned at the proposal to close a local doctor's surgery.
      The petition states:
      The residents declare that the Rush Green Surgery in Romford is an essential part of the local community, and that they are opposed to its proposed closure.
      The Petitioners therefore request that the House of Commons urge the Secretary of State for Health to take all appropriate measures to ensure that the surgery is permitted to remain open to serve the residents of Rush Green.
      The petitioners remain etc.
      To lie upon the Table.

      Biobank
      Motion made, and Question proposed, That this House do now adjourn.—[Derek Twigg.]
      12.27 am
      Dr. Ian Gibson: The research proposal called Biobank seeks to make available the DNA of 500,000 volunteers to researchers in the United Kingdom who want to investigate disease processes. It represents the concerted effort of the Medical Research Council, the Wellcome Trust and the Department of Health to apply the knowledge gained through the human genome project to concrete insights into human health and illness.
      The discussion about Biobank resembles many other debates about science in general. On one side of the controversy are the enthusiasts who get carried away by their admiration for and excitement about new scientific findings. I guess that I would put myself on that side of the argument. On the other side of the divide are those who often get immensely worried about the implications that this new knowledge has for society. Hearing the word "genetics" makes them think of exploitation, commercialisation and discrimination.
      It is worth while reminding ourselves of the words of my right hon. Friend the Prime Minister in his much-reviewed recent "science speech". He said:
      "Science is just knowledge. And knowledge can be used by evil people for evil ends. Science doesn't replace moral judgment. It just extends the context of knowledge within which moral judgments are made. It allows us to do more, but it doesn't tell us whether doing more is right or wrong."
      I take issue with some of the assumptions that were expressed in his speech—his blurring of science and business and his misconception of the crisis of trust—but his general insistence that scientific knowledge is not good or bad per se is spot on and right.
      Biobank is an example of what the Prime Minister was referring to. It will help us to increase knowledge and we, as politicians, must make sure that the framework is right for the use of this knowledge. We have to make sure that "evil people"—in the Prime Minister's terminology—cannot use it for "evil ends" or that—this is more likely—well-meaning, decent people do not end up doing damaging things because they have not done enough to think through the consequences of their actions.
      The debate should be about a framework to safeguard the proper and secure use of all the new knowledge that Biobank generates. I am sure the Minister will clarify some of the thinking on the issues that I raise. I think that the Department of Health is considering them, but nothing has been decided. We need public and parliamentary dialogue on what the Department is thinking. It is putting much money into Biobank and will recruit its volunteers through GP surgeries. The findings based in Biobank will have profound implications for the national health service, and thus for the Department and all of us.
      The project needs to be conducted and organised by experts, but such an important and unprecedented step must not be taken without parliamentary scrutiny and a wider public debate. Scientific knowledge, and the knowledge generated through Biobank is one example of that, is not gained in a vacuum. The insights that scientists have, and even more so their application, depend on the
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      institutional framework and the regulatory regime under which science takes place. We need to get the framework right to achieve the benefits from Biobank that we all hope for and to prevent abuses and negative consequences.
      I do not have time to go through all the detailed discussions, so I shall tackle one or two of the major issues. Once Biobank is launched, GPs will recruit 500,000 volunteers aged between 45 and 69. That group has been chosen because people in it are most likely to come down with serious and/or chronic diseases. The problem with the sample is, however, that those people and their bodies are already the outcome of a complicated interaction between genetic make-up and environmental factors. If Biobank is really about investigating the genetic versus the environmental impact on health outcomes, the chosen sample will lead to dubious methodology.
      The problem with taking on an older group is that we have to rely on their recollection of what risk factors they might have been exposed to. It seems dubious methodology to ask 50-year-olds what they had for dinner in their childhood or whether their mums were overweight when they were young. Similarly, relying on patient records can be difficult, especially with older records. For example, the viral infection someone had as a child might not be included in a patient's record. Some epidemiologists believe that Biobank should have tried to recruit newborns, which would lead to more problems of consent and confidentiality.
      Sampling adults and using their genetic information vis à vis their patchy recollections of past behaviour and exposure to environmental risks will make it difficult to disentangle genetic and environmental factors, which will have important implications for the findings of Biobank. I think it will skew towards over-emphasising the genetic influence on disease processes because it is the only thing on which Biobank will provide hard data. Biobank will facilitate a comparison between detailed genetic data and crude environmental information, and genetic factors will probably seem more important for disease processes as their influence can be shown more clearly. That bias will have important consequences for public health policies.
      If the data that flow from Biobank over-emphasise the genetic influence on health outcomes, then public health policy might over-emphasise individualised rather than population-based approaches to public health. The World Health Organisation said:
      "It is vital that the more conventional approaches of epidemiology and public health … continue to be pursued with vigour. This is particularly important as there are still major uncertainties about the predictive role and cost of genomics for controlling common diseases."
      Let us take the example of obesity. Nearly two thirds of men and more than half the women in England are overweight or obese, and obesity is continuing to rise faster here than in most other European countries. At the current rate of increase, more than one in four adults will be obese by 2010 and they will be at a higher risk of a range of major health problems, including heart disease and adult-onset diabetes. That is obviously not due to an increase in the genes responsible for obesity, but unhealthy diets and lack of exercise, problems that the Government are tackling. Too much emphasis on susceptibility genes for obesity could lead to the underlying causes of the epidemic being ignored and to the growing sale of diet or anti-cholesterol pills to the genetically susceptible instead.

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      The data that flow from Biobank need to be balanced with a clear commitment to population-based public health approaches and a strong emphasis on tackling health inequalities; otherwise the genetic tests that flow from Biobank research will increase, not decrease, health inequalities. That would make most of us less, not more, healthy.
      We hear that there is a crisis too in the public trust in scientific knowledge and expertise. Indeed, the Prime Minister picked up on that point in his dramatic speech. The success of research, and in particular of Biobank, greatly depends on that public trust. Trust can only stem from knowledge, transparency and democratic control. That is why it is so important that we publicly discuss and make decisions on the many legal and political implications of Biobank before we run into the first major controversy. If we have learned one thing from any of the past science scare stories, it is that we must disengage the conflict and disagreement about the direction and use of research.
      We must address questions of consent, for example. What do volunteers participating in Biobank consent to? Does their consent embrace any type of research? Should the use of Biobank be limited to research into serious disease processes? Should the participants have a say in what they want their DNA sample to be used for?
      There is, of course, the pressing problem of confidentiality. Is it wise to leave the collecting, encoding and researching of DNA samples in the hands of those who are keen on doing research? Should the encoding of data to render them anonymous be done by an independent third party? What about conflicting interests? Do not we need to make sure that those who approach possible volunteers do not have an interest in the research, and that those who do the research do not turn out to have commercial interests in the application of these biosciences?
      That leads me to commercialisation. The founders of Biobank make it clear that no one will have exclusive access to the material stored at Biobank. But what about the findings published through the research? Will companies be able to apply for patents? Do volunteers know that their DNA might lead to a patent? Several models could be used. Companies could be charged for using Biobank and then they could keep whatever money they might make on the basis of Biobank; or companies could not be charged, or they could be charged less, and Biobank would get a share of whatever profits are generated on the basis of its resources. If Biobank got a share of people's profits, it might lose its independence and have a vested interest in a certain type of commercially targeted research.
      Either way, private companies will certainly try to capitalise on the knowledge established through Biobank. The likely outcome of the research, at least in some cases, will be the development of drugs or tests for individuals with certain genetic problems. Again, that has public health and cost implications. The NHS has to decide whether to make those new technologies available.
      The current set-up of Biobank means that the NHS will be bounced into focusing on new health technologies rather than on public health messages that might come from such a large-scale study. The notion of knowledge transfer must not only apply to commercially applicable bits of genetic information, but must be used in a
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      politically intelligent way. Knowledge established through Biobank must lead not only to patents and drugs, but to better health policies.
      To address all those problems, we need to establish a solid and trusted framework of regulation, control and ownership of Biobank. So far we have learned from the three funding partners of Biobank—the MRC, the Wellcome Trust and the Department of Health—that there will be an independent oversight body that will steer and control the use of Biobank as a resource for researchers in the UK. I cannot stress enough how important it is that we get that structure right.
      One thing has to be clear from the outset: we will not be able to establish trust behind closed doors. The discussions about the design of Biobank have to come out of the closet and into the open. We need an open-ended, democratic debate about how to conduct this research and about how to make it safe. That may include strict rules about what to do when things go wrong. What if a leak occurs and highly personal data end up in places where they should not? We need methods of redress and clear accountability structures. We may also need legal protection against genetic discrimination. That may be particularly important if Biobank is a pilot project for a national genetic database or an NHS-wide patient records system.
      The participants in Biobank should have a high degree of ownership over the project. There could be participants' panels, probably at each of the regional centres. The panels should be independent of parties that have an interest in performing the research, and of the funding bodies for Biobank. They could make decisions about general guidelines and individual research proposals, and investigate consent procedures and secure the confidentiality of all those concerned. There should be an overall majority of so-called lay people, or at least people without vested interests, on that oversight body.
      To some extent, that would mean that the Wellcome Trust and other bodies that finance the research would have to let go. If that happened, Biobank could become a model for regulation and participation in medical research. So far, the Department of Health has not come clean about those issues, but if we do not get the framework right, there will be no benefit to science, the project could be harmed, and the relationship between science and the public could be ruined even further. We can do better than that, and I hope that the Minister will not duck the issues. He must start to engage with Parliament and the wider public and tell us how we will take forward what I believe will be an exciting piece of research.
      12.40 am
      The Minister of State, Department of Health (Mr. John Hutton): I am grateful to my hon. Friend the Member for Norwich, North (Dr. Gibson) for giving me the opportunity to confirm the Government's commitment to the UK Biobank project and answer the important points that he has raised during this short debate. He has extensive knowledge of the issues raised by the research project, and he has demonstrated that expertise very ably and effectively tonight.
      My hon. Friend has asked specific questions and thrown down the gauntlet to the Department of Health and the Government over the conduct of the project, which,

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      as he says, has tremendous potential to benefit millions of people in this country and elsewhere. I strongly agree with his overall argument about openness and transparency: that is precisely how we want to conduct the project. I agree absolutely that Biobank must be used intelligently and in a politically intelligent way: it will be. Furthermore, I agree that, in general terms, science must be the servant of society and never its master. That dictum clearly applies to Biobank and its potential.
      My hon. Friend has accurately explained many of the details of the project and I do not intend to go over them again. Biobank is a flagship project for the UK. As I am sure he understands, it will take time and significant investment before the potential benefits are realised, but I have absolutely no doubt that the project is in a crucial area of research that holds out the prospect of real advances in medical science. Many devastating disorders including heart disease, cancer, diabetes and Alzheimer's disease are caused by complex interactions between genes, environment and lifestyle. Information from the Biobank study could ultimately lead to improved diagnosis, treatment and prevention strategies for those disorders, thus benefiting millions of people in the UK and around the world.
      The UK Biobank project is to be jointly funded by the Department of Health, the Medical Research Council and the Wellcome Trust. The initial cost of the project will be £45 million, of which more than half will be provided by the Government. Biobank is a major scientific research programme. For the reasons spelled out by my hon. Friend, it is probably one of the most exciting and potentially significant projects to be commenced in the UK for many years.
      The project itself has been through a long planning process which started in 1998; the final funding decisions were taken in April this year. I accept that the process has been lengthy, but that is in large part due to the number of necessary consultations undertaken with both the scientific community who will use the resource and the general public. I understand from his arguments that my hon. Friend is generally in favour of such consultation. I hope that the process followed will help to establish a consensus on the future direction of the project. Such a consensus is important and will be of genuine benefit to the research project as a whole. None the less, concerns have rightly and properly been expressed about the project by several organisations, as well as by my hon. Friend tonight. I assure him that the Government will continue to work positively to address those concerns.
      My hon. Friend raised concerns about the project design and methodology, and in particular about the selection criteria for volunteers. He asked that a clear framework for the project should be worked out in consultation with all the experts. I can tell him that that has been done. A committee of experts under the chairmanship of Professor Tom Meade produced the final project protocol, which was made widely available to the scientific community for it to comment on during its development. The protocol was then extensively and independently reviewed by a number of international experts—not politicians—some of whom were from abroad, but all of whom had no prior involvement in the development of the protocol. That peer group judged the
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      protocol to be strong and scientifically sound. The protocol has been published on the Medical Research Council website at www.mrc.ac.uk
      My hon. Friend asked for clear leadership from the Department of Health in taking the project forward. I can certainly confirm that that will be provided. The Department of Health has been actively engaged in the creation of the UK Biobank and in shaping its programme. We will also maintain general management oversight of the project as one of its key hinders.
      There are at least two areas in which we have a major interest. They relate to the concerns already mentioned by my hon. Friend regarding the need to protect people who provide DNA samples and to maintain the public's confidence in the project itself. As he said, recruitment to the Biobank will be co-ordinated mainly through GP practices and, as he knows, it will be entirely voluntary. Participants will be free to withdraw from the study at any time. If a person wants to withdraw from the research programme, all their personal information and samples will be removed from the database.
      I should like to make one point very clear to my hon. Friend. The Biobank will be used for research purposes only. Any data released to research workers will be properly anonymised and free of any identifiable markers. The Biobank will operate according to the relevant ethical and legal guidelines regarding the use of human tissue, biological samples and genetic information. It will also operate in accordance with the Human Rights Act 1998, the Data Protection Act 1998 and the Council of Europe's recommendations on the protection of medical data.
      Those are important safeguards, but security and confidentiality of data are key issues that are rightly a matter of continuing concern. The Human Genetics Commission, the Government's independent advisory body on human genetics, has rightly taken a close interest in the project and has indicated that it will continue to do so. We welcome its continued involvement. As my hon. Friend will be aware, the commission has recently undertaken an investigation into the use of personal genetic information and how security and confidentiality of data held within databases can be properly maintained. It recommended that genetic research databases that are established for health research should not be used for any purpose other than that research, and also that that should be put beyond doubt, by legislation if necessary. The Government are considering very carefully the implications of that recommendation and will respond later this year.
      Providing independent oversight of the project by a trusted third party offers a further way not only of providing protection for people taking part in the study, but of gaining the public's trust in the project. An organisation that has a clear legal identity will be needed to achieve that. The current thinking is that that should be provided through the creation of a new limited company with a power of veto over the research conducted using the Biobank resource that is enshrined in its articles of association and incorporation. I agree with my hon. Friend that the chairman of the board will need to be someone who can command the public's full trust and confidence. It is planned to appoint the chairman and all other board members in a transparent way using the full Nolan procedures and principles.

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      My hon. Friend asked about the role of the proposed monitoring body. It will be responsible for the development, application and monitoring of policies on access to data and samples, in accordance with the consent obtained from the participants. It will also be responsible for ensuring that the samples and data are all held securely and that all procedures to protect confidentiality are strictly adhered to. It will not provide ethical review of the initiative or its constituent projects, as that will be done through the system provided by multi-centre research ethics committees. Equally, it will not scrutinise the scientific quality of the research that is being undertaken, as that will be the remit of a separate scientific management committee. The monitoring body will exist solely to represent and protect the interests of the participants and the general public. We perceive its independence, authority and credibility as crucial to the success of the Biobank. We place the highest importance on that success.
      The more general management of the project will involve creating a separate organisation responsible for establishing and using the database. Like the monitoring body, that organisation will need to have a separate legal identity and will again be incorporated as a company limited by guarantee. It will control the operation of the regionally distributed groups that will be recruited to collect the baseline dataset from participants and carry out the initial processing of blood samples.
      The ability efficiently to link a participant's medical records with genetic and lifestyle data is clearly an important part of the study. That will necessitate developing both the infrastructure and the methodology needed to obtain access to NHS records. I acknowledge that that will be a significant challenge, and we do not underestimate it.
      The information technology requirements for the UK Biobank will need to be fully integrated into the overall NHS information systems that are being developed. The method for doing that has not been finalised but the Biobank project offers an opportunity to pilot new methodologies whereby valuable clinical data held by the NHS in patient records can be utilised effectively to support wider, essential public health research.
      My hon. Friend asked for a full public and parliamentary debate to discuss the issues raised by the UK Biobank project. As he would acknowledge, that is a matter for others to determine, but of course it is proper for Parliament to consider the issue. Ministers and officials in the Department of Health would want to play a full and positive role in such a process. However, two public consultation exercises on the project have already taken place. One was conducted in 2000 by Cragg Ross
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      Dawson, and the other earlier this year by People Science and Policy Ltd. Again, I refer my hon. Friend to the Medical Research Council's website, where those documents have been published. I am sure that he has already seen them. I assure him that other consultations will be held as the project develops.
      The project's success ultimately depends on the good will of the participants. That can be achieved only if there are opportunities, such as tonight, openly to debate the project and the many issues that it raises. As I said, my Department will continue to encourage that.
      The benefits of the UK Biobank need to be set out clearly and unequivocally to ensure that public acceptability and confidence in the study is maintained. We need to be especially clear that it is not a big brother exercise. Nothing could be further from the truth. The study will help facilitate the translation of the new genetic knowledge into new ways of preventing and treating common illnesses. As my hon. Friend said, the benefits to individuals and society are clear. They are potentially enormous. We therefore have a precious opportunity to advance our understanding of illness and disease, and we must take full advantage of it. We intend to do that. We shall not squander that unique opportunity.
      As I said earlier, we are considering a long-term research project, and there will be no instant results. Participants will gift their samples and data for the benefit of future generations, not necessarily their own.
      We know that the research supported via the Biobank project will help us better to understand the causes of many common diseases that have such a devastating effect on our society. They include cancer, heart disease and stroke. That will lead, in turn, to the development of better, more effective, treatments and, more important, to the identification of methods of prevention. There is enormous potential to improve the health and quality of life of every member of our society. That is why we must rise to the challenges and the opportunities before us.
      In summary, the Government welcome the creation of the UK Biobank and are committed to its success. I believe that adequate safeguards are being built into the project to ensure the maintenance of public trust and confidence. There will be further debate and consultation on the project as it develops, and adequate independent oversight from the start. As I said, it is an important flagship project, which will establish the UK as a world leader in translating advances in genetic research into real benefits for health.
      Question put and agreed to.
      Adjourned accordingly at seven minutes to One o'clock.

Preamble
[SIR MICHAEL LORD in the Chair]

Sikhs
Motion made, and Question proposed, That the sitting be now adjourned.—[Jim Murphy.]
9.30 am
Mr. John Randall: Perhaps I should start with the Punjabi greeting "Sat Sri Akal". It is a great privilege to have been able to secure this debate in Westminster Hall. I should declare my interest as the vice-chairman of the all-party group on Punjabis in Britain.
This is the third Adjournment debate that the group has initiated and it is almost exactly a year since the last one. The previous two debates were initiated by my constituency neighbour, the hon. Member for Hayes and Harlington (John McDonnell), who is an acknowledged expert in the subject. In introducing the debate, I pay tribute to him for setting up the group in the first place, and for his continuing hard work. We hope that an annual debate will be held to report on the state of play of the status of Punjabis and the problems affecting them in Britain. I also thank the researcher for the group, Iqbal Singh.
A month or so ago, we held an event next door in the Jubilee Room to celebrate Vaisakhi. Several hon. Members from both sides of the House attended. It was agreed that because so many people attended and it was such a crush, an alternative venue would have to be found in future years to cater for its popularity. It was a wonderful opportunity to discuss problems and reasons to celebrate. This year, we were privileged to see a memorable folk dance performed by some girls from the Guru Gobind Singh Khalsa college in Essex. We were also addressed by Inderjit Singh, who many people hear giving his thought for the day on the "Today" programme. When I drive in from Uxbridge and listen to his words, I find them inspirational as I set out for another day in this place.
A privilege and advantage of becoming a Member of Parliament is the opportunity to find out more about one's community. In Uxbridge and the London borough of Hillingdon, we have a large and diverse community. I find it instructional and enjoyable to find out about my area and the people who share my community. With particular reference to Punjabis and Sikhism, I have been able to learn out about my fascinating community under the tutelage of the hon. Member for Hayes and Harlington—I very nearly said my hon. Friend, and I would certainly like to be considered a friend outside the immediate confines of the Chamber.
The Vaisakhi celebrations commemorate the event in 1699 when Guru Gobind Singh declared the Khalsa nation in the Punjab. The Sikhs have always managed to combine the spiritual and the political while living in harmony with the groups that surround them. The Indian sub-continent is as diverse an area as any in the
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world, so that has not always been easy. Sadly, to this day it is a very difficult and complicated situation, which is why it is important for anyone dealing with such matters to tread carefully and ensure that all sensibilities and sensitivities are understood.
It is not to be questioned that for many years Sikhs and Punjabis in general have played a leading role in the economic life of this country. I say rather flippantly that as someone who has been in a family business for a long time, and sports a beard—unusual in the Conservative ranks—I find myself greatly at ease in the Punjabi community. However, there are questions, and I am delighted to see other members of the all-party group present in the Chamber. I am sure that they will raise some of them if they can catch your eye, Mr. Deputy Speaker. There are some pressing issues that need to be aired.
I am delighted that the Under-Secretary of State for the Home Department, the hon. Member for Leeds, Central (Hilary Benn), is here to reply to the debate. This might be his initial debate in Westminster Hall, and I am delighted to be here. This debate is primarily about Sikhs in Britain, and I will not dwell on internal matters in the sub-continent. However, there is one issue. The British Government have arranged for a consular office to be opened in the Punjab, but we are still awaiting clearance from the Indian Government to go ahead with that. That move was widely welcomed by the Punjabi community in this country.
The principle concern of many people is that although Sikhs have been accepted as a religious group, they have not been granted the status of an ethnic grouping. That matter is beginning to cause a certain amount of irritation and anxiety—perhaps that is the fairest way to put it. One problem is that until that is recognised it is impossible to know how many Sikhs are living in the United Kingdom. In response to a parliamentary question from my hon. Friend the Member for Beaconsfield (Mr. Grieve), the Minister for Citizenship and Immigration said that there were no accurate data available. The Government can give estimates, but without a clearer picture it is difficult to find out how much—if any—discrimination is taking place, or how successful the community is in public life.
Since 11 September, sadly, attacks and hate crimes have been committed, not exclusively against Sikhs, but against Muslims and Hindus too. In fact, they have been committed against anyone who seems to look little different from those who committed those horrendous crimes, which we all condemn. I am not saying that any of those crimes are less or more terrible whether they are committed against Hindus, Muslims or Sikhs, but it would be useful to have some idea of the incidents to provide an estimate of the level of them. Various assurances have been given over time, but, unfortunately, it has not so far been possible to make progress.
There are sensitivities and there is a debate in the community, but the time has come to push the matter forward, notwithstanding the need for wide consultation within Sikh communities in Britain and elsewhere. We must not leave it in the long grass for ever.
Bob Spink: I thank my hon. Friend for bringing this important debate to the Palace of

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Westminster. It is long overdue and I welcome it. Perhaps because he did so, I received a letter today from the Commission for Racial Equality dated 2 July, which states that the
"CRE recognises Sikhs as an ethnic, as well as religious group and obviously so does the law".
Does my hon. Friend welcome that?
Mr. Randall: I certainly do. That is why we are trying to advance the case and to ensure that any muddied waters are cleared. However, as I said, we must be aware of the sensitivities.
The Sikh community, because of its nature, has always been able to assimilate easily and to merge into its community. I know, as do other hon. Members from their constituencies, that it is a positive force in this country and that it is asking only for a level playing field—a request that we often hear in this Chamber. It does not want positive discrimination or to be regarded as a special case. It wants equality and I hope that we can move towards that today.
9.43 am
John McDonnell: There are three Sikh salutations. The first is "Sat Sri Akal". The second, which is usually used in the Gurdwara, is "Waheguru Ji Ka Khalsa", to which the response is "Waheguru Ji Ki Fateh". The third is a cheer, "Bole So Nihal", which usually follows a speech—
Mr. Deputy Speaker: Order. For interest, hon. Members should not quote in foreign languages unless a translation is given immediately afterwards.
John McDonnell: Certainly, Mr. Deputy Speaker. That is exactly what I was coming to.
"Bole So Nihal" is a cheer, which normally comes from the congregation, the Sangat, in support of the speech made by the previous speaker. It is a cheer with a sense of solidarity and a renewal of the congregation's commitment to the statements made by the previous speaker. I am sure that many Sikhs throughout the country who listened to the speech of the hon. Member for Uxbridge (Mr. Randall) will be saying, "Bole So Nihal" and will respond with "Sat Sri Akal".
It is a statement that was needed because each year we have sought a debate on the Sikh community—the Punjabi community—in Britain and each year we have been able to provide a progress report in that debate on the work of the all-party group on the Punjabi community in Britain. The first debate was on 7 March 2000, and we established the all-party group from that debate. That was on the advice of many organisations in the Sikh community that were seeking a clearer voice in Parliament, which they felt could work on their behalf.
I pay tribute to the many hon. Members in previous Parliaments who have spoken up on behalf of the Sikh community, in particular the current Minister for Transport and my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) who continuously through previous Parliaments raised issues affecting the Sikh community and gained positive responses from Governments of both parties.
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In July 2001, we secured the second Adjournment debate on the Punjabi community and took stock of the progress that we had made. At that point, we felt that, in general, there was still an outstanding issue of recognition. We raised the issue of status during that debate, and I echo the view expressed by the hon. Member for Uxbridge: there is a sense of frustration at the lack of movement on that subject. That is the issue that I should like to address.
Sikhs make up the largest section of the Punjabi community in Britain and we must clearly address the status of Sikhs in law and, more importantly, in the practice of government and public bodies. By status, I mean not just formal status but standing generally. The first issue to be addressed is identification, and what formal status is awarded Sikhs in the legal, governmental and administrative systems of this country. The path to the formal recognition of Sikhs in this country and internationally has been difficult and tortuous. Race legislation in this country and elsewhere has for a long time been fixated on a definition of race, racism and racial discrimination based predominantly on skin colour and descent.
Mr. Dominic Grieve: Does the hon. Gentleman agree that apart from skin colour and descent, when one actually looks at the categorisations used, they are almost an imperial relic in some cases, simply categorising individuals according to the geographical dominion or country from which they came during the time of the empire?
John McDonnell: I agree with the hon. Gentleman entirely. The whole debate about racism and race definitions in this country is based around that colonial legacy.
Race and racism have become biological issues, rather than ones of cultural identity. In addition, there has been some confusion because the identity of many groups was often narrowly defined as based on religion rather than cultural identity. That has meant that legislation in Britain and internationally did not necessarily afford Sikhs the protection necessary to maintain their cultural identity and practices, free from discrimination. Sikhs have often remained invisible in law and therefore slipped between the cracks of legislation intended to protect people against racism and racial discrimination in this country.
In Britain, a House of Lords decision in the Mandla v. Dowell Lee case addressed how the term ethnic was to be interpreted in section 3 of the Race Relations Act 1976. The view of the noble Lords Fraser and Teampleman was to advocate a broad construction to include cultural and historical identity. Lord Fraser said,
"I recognise that 'ethnic' conveys a flavour of race but it cannot, in my opinion, have been used in the 1976 Act in a strict racial or biological sense. For one thing it would be absurd to suppose that Parliament can have intended that membership of a particular racial group should depend on scientific proof that a person possessed the relevant distinctive biological characteristic. For another thing, the briefest glance at evidence in this case is enough to show that, within the human race, there are very few, if any distinctions which are scientifically recognised as racial."
Lord Fraser and Lord Templeman went on to define an ethnic group as based on a range of references to cultural identity and, therefore, brought the Sikhs into the scope of the 1976 Act.

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The problem so far has been the practical implementation of that interpretation of the 1976 Act. The issue causes frustration in the community and, I believe, in the House as well. I welcome the letter from the CRE that has been received today, which includes an explicit interpretation of the judgment, but we must move forward to practical implementation of the law.
We should congratulate the Sikh groups in this country and in Canada. They raised the question at international level and raised the status of Sikhs in the run-up to the United Nations world conference against racism, racial discrimination, xenophobia and related intolerance, which took place in Durban, South Africa last year. The conference was the culmination of two years of preparations, regional meetings, expert seminars, non-governmental organisation representations and conventions, which were held in Europe, Asia, Africa and the Americas. Sikh groups in this country participated thoroughly in the preparatory work.
The concentration of the UN initiative on the sources, causes, forms and contemporary manifestations of racism gave the Sikh community the opportunity to challenge the narrowness of the traditional biological definition of racism—the post-colonial definition—and to try to gain an acceptance of their cultural identity. Many Sikh organisations from this country and elsewhere laid bare the forms of discrimination that Sikhs faced, especially in employment practices and partly in education. Article 67 of the final conference declaration sought to encompass Sikhs in the development of international and national anti-racist policies and programmes. It states:
"We recognize that members of certain groups with a distinct cultural identity face barriers arising from a complex interplay of ethnic, religious and other factors as well as their traditions and customs and call upon States to ensure that measures, policies and programmes aimed at eradicating racism, racial discrimination, xenophobia and related intolerance address the barriers that this interplay of factors creates."
A breakthrough was made at international level to arrive at a definition that would include the Sikh community.
Mr. Oliver Heald: Obviously, it is important that the Sikh community should be treated equally with other racial and religious groups. Does the hon. Gentleman believe that the UN decision means that that will happen?
John McDonnell: A process of practical implementation at national and international levels is required. I want to make several recommendations on the sort of programme of practical implementation that the Government could assist in introducing.
Where do the developments in British law and in international discourse leave Sikhs in our community, and what are the next steps that we should take in this country to implement the general thrust of the decisions by the Law Lords and the UN? First, we should recognise that Britain has a real opportunity now to lead in the debate in the European Union on reviewing existing national and EU legislation, policies and practices to consider whether and to what extent they fail to provide adequate protection for the rights of Sikhs and to ensure their full and effective participation in all spheres of life. I would welcome the British
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Government's raising at the EU level how the UN article will be implemented, and I would welcome a joint ministerial initiative with the European Commission to prepare a report in response to the article in the UN declaration and then to consider what changes in international and national legislation may be required.
Secondly, following on from the point of the hon. Member for Uxbridge about the sensitivities of the issue, consultation must be undertaken in a prompt, effective and inclusive way with Sikh organisations in Britain to determine the development of the national action plan resulting from the UN conference. That would enable us not only to raise the profile and understanding of the issue, but to agree a detailed programme of action.
Thirdly, a key element of the action plan is the development of ethnic monitoring. We have learnt this morning from parliamentary questions about the inadequacy of existing monitoring systems. It is important that we monitor the policy programmes of central and local government and other public bodies in their relationships with the Sikh community. That includes employment, appointments to public bodies, the practices and policies of public bodies towards Sikhism and an understanding of Sikhism by public bodies in the interpretation of policies.
Fourthly, later this year the all-party group is planning to launch an annual consultative conference with the Sikh community in Britain. The aim is to bring together the widest range of Sikh community organisations in the history of this country to ask them what issues they want the all-party group, Parliament and the Government to address, and to work with them on a detailed programme. I ask the Government to lend their support to that initiative by providing Ministers to speak to the consultative conference and, maybe more importantly, sending their civil servants to listen to the debate in the conference.
Finally, the all-party group has an excellent track record of success on issues raised on behalf of the Sikh community. They have included, for example, the reintroduction of visa appeals, the establishment of visa facilities in the Punjab—there are some difficulties, but the matter has been agreed in principle and will come about—opposition to appeal charges and the development of the Guru Nanak Sikh school as the first state-funded Sikh school in the country. We have supported the campaign for the right to wear the kirpan—I thank the Minister for Transport for his help in overcoming the problems at airports—raised human rights issues in India, supported the protection of Sikh heritage and supported the work of Susan Strong at the Victoria and Albert museum. We have lobbied Governments on peace in the Punjab, the militarisation of the Punjab, the landmines issue and the nuclear threat. The group has had many successes and we aim to continue that work and to energise the debate on the future of the Sikh community in Britain. There is so much more for us to do, but there have been many Sikh successes to celebrate in politics, law, business, sport and the arts in this country.
I ask Members to go and see "Bend it Like Beckham", which was directed by Gurinder Chadha. It was filmed in my constituency at Yeading football club and celebrates both modernity and tradition in the Sikh community. Our role is to protect Sikhs against

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discrimination and unfair treatment, but it is also positively to celebrate the strength of a society in which cultural identity is protected, respected and celebrated.
9.57 am
Mr. Peter Luff: It is a great privilege and pleasure to follow two speeches with which I agree completely. I congratulate my hon. Friend the Member for Uxbridge (Mr. Randall) on initiating the debate and pay tribute to the hon. Member for Hayes and Harlington (John McDonnell). This is one of those rare and happy occasions on which hon. Members can be in almost total harmony, which is good.
I must declare my interest as chairman of the Conservative parliamentary friends of India, a group that seeks to represent all the diverse groups from the sub-continent. In the middle of the jubilee year, it is worth recalling that one of the Queen's greatest treasures is the Koh-i-noor diamond, which is a Sikh artefact. That issue was raised by the hon. Member for Hayes and Harlington in his speech in July last year, but we do not want to get into an Elgin-like discussion about the diamond's future. He said last year that Punjabi is the second most widely spoken language in the United Kingdom, which indicates the scale of the presence of the Punjabi and Sikh community. I look forward to joining representatives of the Sikh community later today when they present a petition to Downing street about the issue that we are debating today.
I do not regard myself as an expert on Sikhism, which my hon. Friend the Member for Uxbridge and the hon. Member for Hayes and Harlington clearly are, and I do not know very much about the law, but I know something about natural justice. Given what the hon. Member for Hayes and Harlington said about the 1983 judgment, the time has come for natural justice to take priority.
The 1983 judgment, about which I shall say more towards the end of my remarks if I have time, accepted that Sikhs are a definable ethnic group under the Race Relations Act 1976. That was the unanimous judgment of the five judges participating in the hearing. It is important to remember that we do not need a debate on that. British law has already been decided. The challenge nearly 20 years on is to make sure that it is fully implemented. In some ways, that is difficult because the actions of the British Government can be interpreted in different ways. I am in favour of proper recognition of Sikhs to enable such discrimination to be dealt with effectively by British society and its law.
There are separate states in India, but the Government's decisions do not apply across the board. If the Minister were told by his colleagues in the Foreign and Commonwealth Office to be cautious on those grounds, I hope that he would dismiss such fears. We want to give effect to natural justice for British citizens. As my hon. Friend the Member for Uxbridge said, matters have become more acute since 11 September. Yesterday, a leading member of the Sikh community told me of the many upsetting and disturbing incidents that he has experienced since then.
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We must face up to the fact that the British do not know a great deal about faith and religion these days. We are a secular society. The average British citizen does not know much about his historic Christian faith, never mind being able to distinguish between Hindus, Muslims and Sikhs. We face a challenge. People who have clearly defined visual characteristics—as practising Sikhs have—are likely to be a target for particular hostility. That is the experience of the Sikh community. In the post-11 September environment, we have to do even more to address its worries.
I welcome early-day motion 1464, which was tabled by my hon. Friend the Member for Beaconsfield (Mr. Grieve) who is to respond to the debate on behalf of the official Opposition. It wants British law to recognise Sikhs as a separate ethnic group. The best estimate of the number of Sikhs that their community can come up with is 700,000. Sadly, we do not have an accurate figure. The early-day motion urges the Government to give guidance so that public authorities are left in no doubt that Sikhs should be monitored separately to avoid unnecessary discrimination under the Race Relations (Amendment) Act 2000. I agree strongly with spirit of the early-day motion, which was why I was happy to add my signature to it.
The problem came to a head during the census last year, when Sikhs were not identified as a separate ethnic category on the form. To be fair to the Office for National Statistics, the pressure for the inclusion of Sikhs grew a little late in the day to enable them to be accommodated. However, the ONS ought to have realised that the 1983 judgment meant that Sikhs should have been defined separately. I hope that the next census form will do that, and that the ONS can make such a commitment early on.
The census form included a write-in campaign and respondents were allowed to identify separate categories. I believe that a significant number of members of the Sikh community took advantage of such an opportunity. I have been told that the Office for National Statistics may have to re-examine the forms with the possible view of listing the Sikh community separately after the event, because of the many write-in identifiers. If that takes place, it would be an interesting development. I hope that the Sikh community will be identified separately at the next census, as a result of which we shall have an accurate idea of the size of the community.
Given that other hon. Members wish to speak, I shall not labour the House of Lords judgment, but it is tremendously important that people understand how clear cut it was. A headmaster refused to admit a Sikh boy to his school unless the boy removed his turban and cut his hair. Not surprisingly, that was unacceptable to the boy and his father. A court action failed, and an appeal failed. Rightly, the Commission for Racial Equality took the case to the House of Lords, and was, in effect, the appellant. The judgment of Lord Fraser of Tullybelton stands most careful reading today. I recommend it to hon. Members. I have the website address for the full judgment if they require it. As the hon. Member for Hayes and Harlington highlighted, Lord Fraser said:
"I recognise that 'ethnic' conveys a flavour of race but it cannot in my opinion have been used in the 1976 Act in a strict racial or biological sense."

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Lord Fraser then defined separate characteristics, and it is worth putting them on record:
"For a group to constitute an ethnic group in the sense of the 1976 Act, it must, in my opinion, regard itself, and be regarded by others, as a distinct community by virtue of certain characteristics."
He defined the characteristics of such a community as: a long shared history; a cultural tradition of its own; a common geographical origin or descent from a small number of common ancestors; a common language, not necessarily peculiar to the group; a common literature peculiar to the group; or a common religion different to that of neighbouring groups. Interestingly, he includes
"being a minority or being an oppressed or a dominant group within a larger community, for example a conquered people (say, the inhabitants of England shortly after the Norman conquest) and their conquerors might both be ethnic groups."
He drew heavily on British history, which is right and proper given the thorough integration of the Sikh community into British life.
Lord Fraser quoted the opinion of a county court judge, who said:
"The evidence in my judgment shows that Sikhs are a distinctive and self-conscious community. They have a history going back to the fifteenth century. They have a written language which a small proportion of Sikhs can read but which can be read by a much higher proportion of Sikhs than of Hindus. They were at one time politically supreme in the Punjab."
Lord Fraser then concluded, crucially:
"The result is, in my opinion, that Sikhs are a group defined by a reference to ethnic origins for the purpose of the 1976 Act, although they are not biologically distinguishable from the other peoples living in the Punjab. That is true whether one is considering the position before the partition of 1947, when the Sikhs lived mainly in that part of Punjab that is now Pakistan, or after 1947, since when most of them have moved into India."
That clear and categorical judgment was supported by Lord Edmund-Davies, Lord Roskill, Lord Brandon and Lord Templeman. The latter gave a thoughtful judgment of his own in response to the issues raised during the case. I hope that the Government will now move to ensure that Sikhs get the recognition and status that they deserve, and that any doubts that Sikhs may have are properly addressed. That is not a criticism of the Government, because my party was in power for a long period after that judgment.
I conclude by agreeing with the sentiments expressed by the hon. Member for Hayes and Harlington. I am afraid that I have not yet seen "Bend it Like Beckham"; I was too busy to catch it at the cinema. However, my wife tells me it is an absolutely brilliant film—although she resented going to see it on her own—and I look forward to seeing it on video. The Sikh community has contributed so much to British life and society, and to the economy, law and industry. Wherever we look, there is huge success to celebrate. If Sikhs want legal recognition, we should give it to them.
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Fiona Mactaggart: I am grateful for the opportunity to participate in the debate. Some of my constituents want to lobby me about the Sikh agenda this afternoon; I am disappointed that I will not be able
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to join them, as I have secured an important meeting with the Prime Minister about the lack of housing in south-east England. I am afraid that, on this occasion, he trumps them. I am therefore glad to put my views on record, and I hope that those colleagues who will be able to speak to my constituents can share those views with them. Many of our constituents will be here this afternoon to press the issue of the ethnic monitoring of the Sikh community and the effective representation of Sikhs in public life in Britain.
I shall address colleagues—I refer to all hon. Members who have spoken, even those who have not yet seen "Bend it Like Beckham", although they should—on three crucial issues, but there are many others that I could raise. Those issues are Sikh identity, the Punjabi language and the tension between India and Pakistan. The latter is having a dangerous impact on the Punjab, and is a real problem for that part of the world. It is incumbent on those of us who could do something to reduce tension between those countries to do our best to do so.
The Punjab is being littered with mines because of the tension between India and Pakistan, and that means that the lives of children and farmers who have nothing to do the conflict and are not engaged with either side are at risk. Although I do not believe that Britain can leave the 50-year conflict to reach a conclusion, we may be able to use our good offices to ensure that our old friends India and Pakistan work together, rather than against each other.
I have many Punjabis in my constituency. The majority are probably Sikh, but a substantial minority are Muslim. Both Sikhs and Muslims are concerned about the future of the Punjab. That is an issue for which we all have a particular responsibility, because of our particular responsibility for peace.
I shall discuss the issue of Sikh identity, because we have reached a good moment to make progress. As many hon. Members know, I have pressed for more effective legislation to deal with religious, as well as racial, discrimination. It is a failure of United Kingdom law that to date it has not dealt with religious discrimination. The consequence has been that various different forms of religious discrimination persist.
The Sikh community is in some ways uniquely privileged, because of the House of Lords judgment, to which many hon. Members referred, which recognises that Sikhs should be regarded as an ethnic group. They can therefore secure protection for religious practices under the Race Relations Act—although, as the debate has highlighted, sometimes the practice has not sufficiently underpinned proper protection from discrimination.
With the changes happening in Europe and the wider global community, now is the time to confront the range of discrimination more intelligently. I welcome the current consultation on new mechanisms for dealing with discrimination. Issues raised in the debate should feed into that. The forms of discrimination that the Sikh community faces include not only discrimination on the basis of race or issues such as we have heard about recently, relating to how Sikhs have been targeted for racial attack following 11 September for wearing turbans, for example. The discrimination also includes specific limitations on religious practices by employers

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who prohibit turbans or the wearing of a kirpan, and other institutions that do not allow faith practices that are essential for the Sikh community to operate properly. We need to recognise that, do the ethnic monitoring that all hon. Members who have spoken so far support, and work in a way that can more effectively challenge those forms of discrimination.
Racists understand the situation. I remember vividly a racial attack on a schoolboy in my constituency that consisted of having his hair cut off. The consequence of that for an adherent of the Sikh faith is much more significant than it would be for anyone else, and the racists who attacked him knew it. To date, we have muttered good-will noises but have not delivered. The time has come for us to do so.
I focus finally on the Punjabi language. The hon. Member for Mid-Worcestershire (Mr. Luff) said that the Punjabi language is the second most spoken language in England. On Friday, just after I had cracked my elbow, which is now in a sling, I was privileged to attend a jubilee celebration in the Milan centre in my constituency. It was a day of music, dancing and poetry led by Sikh residents and other members of the community in Slough. I also had the privilege of making a speech although, because I had just cracked my elbow and had not been able to get to accident and emergency, it did not feel like a privilege at the time.
As I looked around the audience, I said, "I cannot do something that you can all do. I can only speak one language and all of you speak two, three or even four." When I heard all the languages that my constituents could speak, I realised some of the richness of the south Asian cultures that we celebrate today.
The Punjabi language has a wonderful tradition of poetry and communication that I am glad continues to be celebrated. There is an essential action that the Government should take to assist in that celebration—they should allow more community radio stations to broadcast in Punjabi. I want to use the platform offered by this debate to press the case for that language to be broadcast. Temporary licences are often granted to Apna Punjab radio to coincide with Vaisakhi in Slough. That is one example of how broadcasting in Punjabi can strengthen a community and grant access to vital cultural, health and other information to people who do not have fluent access to English. It can bring a community together.
Britain's great strength is its diversity. It is the joy of our country that we have learned to celebrate and include the diversity of other cultures. As hon. Members commented, during the recent sad events following the death of the Queen Mother, we saw the Koh-i-noor gleaming in the Hall next door. Although there are issues about where that diamond should rest, our national culture celebrates the cultures of many countries around the world. The Koh-i-noor is an example of how we do that. We must ensure that that continuing celebration includes reflecting those many cultures in our broadcast media as well as in events such as the jubilee celebration that I was able to attend in Slough.
10.17 am
Mr. Khalid Mahmood: I agree with much of what has been said by hon. Members this morning, especially my hon. Friend the Member for Slough (Fiona Mactaggart) who mentioned the Punjab and Punjabis in relation to the current tension between India and Pakistan.
As we all recognise and understand, Sikhs are predominantly a proud race and have been involved in the military for a long time. Their presence in the armed forces in India—they are also present in the British armed forces—means that they suffer in two ways in any dispute: because they serve in the front line as soldiers and, as my hon. Friend said, because of the way that the geographic area that crosses both countries is divided. It was divided when we drew the lines that separated the majority of the religious sites that are now in Pakistani Punjab away from more than 2.5 million people going back to India. Those are some of the issues that link us with the heritage and people of the Sikh community in this country that we must address.
The current conflict raises issues to do with the Sikh community in Kashmir, and they must also be addressed. President Clinton visited the region a few years ago; at that time more than 30 Sikhs were massacred. When such atrocities take place, independent human rights organisations must be allowed to go there and verify what has happened. It is important for the Sikh community that such things are addressed.
I turn to softer issues. Many hon. Members have looked clinically at matters such as law and the Sikh community, and its legal standing. There are 19 million Sikhs in the world, and more than 700,000 of them live in this country. The Sikh religion has existed for more than 700 years. It has a long heritage in the Indian sub-continent, and a unique tradition and culture. It also has its own language. Such facts must be recognised.
We are debating the recognition of the Sikh community. Unfortunately, I will not support early-day motion 1464; I will amend it slightly. It rightly calls for protection from discrimination, but the provision of services for the Sikh community must also be addressed. Discrimination is an important issue, but the idea behind monitoring by local authorities is that the communities that are being monitored are catered for. Certain things must be provided to the Sikh community, particularly with regard to Sikh men, elderly care homes and the religious needs of elderly people who reside in them, and education for young Sikhs. Therefore, although negative subjects such as discrimination must be addressed, a positive approach should also be adopted so that we can address how better to service the Sikh community. That is the agenda that should be promoted.
I support this debate because I want the Sikh community to be integrated into this society. If young Sikh men and women are to feel a part of society, it is important that they are first proud of their own heritage, culture and religion. Once they feel at ease with their own identity, it will be easier for them to play a role in the society that they live in, and are very much a part of.

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Sikhs play an important role in all walks of life; they work for local authorities, the police and the armed forces.
Mr. Dennis Turner: I rise to emphasise my hon. Friend's point. I assure him that the Sikh community is already playing an important role in this country. That is certainly the case in my city of Wolverhampton, where Sikhs play an important practical role in ensuring good cultural and race relations: they make a considerable contribution to the inter-faith group, and they work with the local authority and other organisations throughout the city. Therefore, we are already achieving my hon. Friend's objectives.
Mr. Mahmood: I thank my hon. Friend for that timely intervention, and I acknowledge the tremendous amount of work that he has done in conjunction with the Sikh community in his constituency. He might also have wished to point out that Gurbux Singh, the chairman of the Commission for Racial Equality, hails from Wolverhampton. I am sure that both of my hon. Friends from Wolverhampton will be proud of that fact.
The young in the Sikh community must be proud of who they are, what they are and how they exist. They have a visual presence—their religion and wearing of the turban and beard makes them easily identified—that has led to mistaken identification by several people who are illiterate about religion post-11 September. That has caused the Sikh community to be subjected to religious abuse, which is totally the wrong sentiment and demonstrates the ignorance of some people. We must clarify the issues.
If the young people understand their own heritage and culture, they may integrate further into society and play a better part in building up the multiracial and multi-religious country that the United Kingdom has become. I would support that.
It has been said—I go back to matters relating to the CRE—that the Sikh community has already been recognised as a visible community under race relations legislation. We must take forward recognition by national Government, local government and public bodies that deliver services for the Sikh community. Services must be delivered equally. Once it is defined that a community must be addressed through the census, we must find out how many Sikh people live in this country and decide how we can address their issues and fulfil their needs.
Rob Marris: Does my hon. Friend agree that there is a need for language teaching in the Sikh community? It is important to foster that not only for that community, but for the country as a whole. People who speak two languages are often quicker at adapting to an additional language than people who speak only one. If we encouraged language teaching, it would help our society as well as Sikhs within it.
Mr. Mahmood: I welcome my hon. Friend's contribution. I agree that speaking mother-tongue languages is essential for allowing anyone in this country to grasp the context of their history, culture and
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identity, and to play a better role in the society that we have developed. We must take forward the positive aspects of the society, and the Sikh community has done that with regard to the Vaisakhi festivals. We have a fantastic Vaisakhi festival in Birmingham—
Mr. Dennis Turner: And Wolverhampton.
Mr. Mahmood: And Wolverhampton, of course. I am sure that there is such a festival in Slough.
The way in which the Sikh community has projected itself is of credit. I wish all those who worked hard to secure the debate and hon. Members who work together on the issue well. I hope that we can continue to move forward. I tabled the amendment to the early-day motion purely because it is important to recognise such issues as delivery of services to the community. We should look not only at the negatives of discrimination, although I agree that that needs to be addressed, but, more importantly, the delivery of services to the Sikh community as a whole.
10.29 am
Simon Hughes: I join other hon. Members in thanking the hon. Member for Uxbridge (Mr. Randall) for ensuring that we debate these matters at this time of year. Obviously, he and the hon. Member for Hayes and Harlington (John McDonnell) come to the debate with huge constituency experience for which we are very grateful. I also thank the hon. Member for Hayes and Harlington, who has been persistent and insistent in ensuring that the agenda is pursued more widely. It has indeed been pursued very effectively.
All of us who have spoken acknowledge our gratitude to the Sikhs for their contribution over many years and at all levels of society and in the public and private sectors. They have made it in teaching and business, and, as was said earlier, in the armed forces. They have also contributed with huge distinction to the public service more widely, and to education and culture. I have shared in many Sikh cultural events. I have not yet made my visit to the cinema, but it is on my list, so I shall have to join the queue.
The Sikhs have contributed in another way as well. They have led much of the religious and moral debate recently. Sikhism has made a huge contribution in that respect. Those of us who turn on our radios at 7.50 am often hear Inderjit Singh, but the Sikh community has contributed more generally, both by putting its religious perspective in a multi-faith context and by organising its own events.
Let me also thank the community for all the hospitality it has offered my colleagues and me over the years. I was privileged to attend the great festival event that took place at the Albert hall a couple of years ago, and also the great festival event in Birmingham, so I have seen the community at its proudest and best.
The debate is particularly well timed because of the lobby organised by the Sikh community that will take place later today. Like others, I shall talk to friends, colleagues and constituents during the day. I pay tribute to the hon. Member for Beaconsfield (Mr. Grieve), who prepared for the debate by tabling a series of questions. I shall let him pursue them at greater length, as I expect

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he may wish to; but I hope that the Minister realises that the answers given so far have been inadequate and that following the change of personnel in the Department we shall hear better answers.
A statutory instrument has been tabled. My colleagues and I have prayed against it, and are hoping to debate it shortly. It concerns the implementation of the Commission for Racial Equality code of practice. I prayed against it not because I oppose it—indeed, I promoted it, and organised events in the House to ensure that the consultation worked well—but in order to secure a debate about its effective operation at local level. I hope that we can discuss it with various ethnic groups in the next few days, before Parliament rises for the summer recess.
A number of points have been made by members of other parties, including the hon. Member for Mid-Worcestershire (Mr. Luff), some of which I do not disagree with. I certainly agree with the hon. Member for Slough (Fiona Mactaggart) that until peace and justice exist in the Punjab, there will not be happy Punjabi communities here or anywhere else. It makes me sad that, more than half a century after the partition of the Indian sub-continent, the international community has still not seen fit to use diplomatic and other pressures to resolve the problem. We seem to react only when tension mounts in India and Pakistan. The world gets excited then; but when the tension lessens, it seems to lose interest. I hope that we do much better in the near future, so that there can be a fair resolution.
I hope that the Minister will take seriously the criticism that at present we have no adequate information about the Sikh community here. The questions asked by the hon. Member for Beaconsfield, among others, could be answered if the Government set their mind to it. It is not possible to plan services and respond to the needs of a community without knowing the facts and figures—not just how many people there are, but where they are in terms of, for instance, different areas of public services.
The hon. Member for Hayes and Harlington and I were involved—he more than I—in ensuring that the Irish were included in the last census as a separate ethnic category. Hon. Members may remember that under the categories of ethnic group, there were only three in the white section, of which Irish is one. In the Asian-British section at the moment one has to be Indian, Pakistani, Bangladeshi, or of any other Asian background in a generalised way, and people can write in their own descriptions. I do not think that the census is anything like adequate yet because, if we think about the situation in our cities and local authorities, it does not give us the authoritative breakdown that we need to be able to plan services and respond to communities. There is no other authoritative local government census. For a 10-year period that is the only census we have, and it does not suffice. Although I realise that it is not his Department, I hope that, when the last census figures are produced later this year, the Minister will work with other Departments in ensuring that the next time we plan the census we have a more comprehensive set of options, which would include Sikh as an option in the Asian community section.
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The CRE is being helpful, and encouraging local authorities to conduct ethnic monitoring that goes beyond the census. I hope that all local authorities will sign up to that. I am sure that is the general wish. Of course, they can do that, but in the interim before the next census they may have to make their own calculation of the number of adults, retired people and young people, so that planning and provision can be arranged.
May I add to what the hon. Member for Slough said about the urgent need to get on with the second half of the equality agenda? We have at last updated the Race Relations Act 1976. I was privileged to be part of that process and to be involved in deliberations on the Race Relations (Amendment) Act 2000. That is all good and proper, but we have not yet returned to the separate, but holistic consideration of religious discrimination. Some of us did not want that to be part of the anti-terrorism legislation. I think we were right to remove it from the legislation. Terrorism and discrimination should not be seen as related issues, but religious discrimination does need to return to the agenda. Guarantees against religious discrimination are hugely important.
It is very important that we allow people to learn and speak Punjabi when they want to. There is a big danger. We had a debate some years ago in Committee under the Conservative Government about second languages in schools. We must retain the view that was canvassed then that it is perfectly acceptable for one's second or third school language to be an Asian language rather than a European one. It is much more practically useful for many people—white people as well as those of Asian origin—for their immediate second language to be the one that many in their community use so that they can trade, work and have good community relations. I hope that we can look again at the way in which we increase language teaching and give that an equal priority.
I end with the point that my Sikh friends make to me most often. The importance of recognition is not just to end discrimination, but to ensure that there can be full participation of Sikhs in the community. Whether one keeps the five Ks; whether one wears a turban; whether one wears a kirpan; whether one wears a tunic; whether one wears a bangle; all those things may produce a difference of perception. At worst, they can produce overt racism and antagonism, but unless we allow people who are sometimes second or third generation, or mixed race by background, to have as strong a link with their cultural hinterland as they do with their adopted country, they will feel driven back into a cultural ghetto. We want to share the benefits of the Sikh faith and tradition. To do that, all Sikhs in this country have to participate fully and feel proud and able to do that. That is why the issue is important, and the demands of the community must be heeded. They are not unreasonable; the community makes them persistently, but with good cause.
10.39 am
Mr. Dominic Grieve: First, I thank my hon. Friend the Member for Uxbridge (Mr. Randall) for having raised this matter. It will perhaps come as no surprise to note that, looking around the Chamber, there is a geographical concentration of Members of Parliament from the west of London. The hon. Members for Slough (Fiona Mactaggart) and for Hayes

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and Harlington (John McDonnell) are here, as is my hon. Friend the Member for Uxbridge. Earlier, I think that my hon. Friend the Member for Maidenhead (Mrs. May) was also present.
My constituency has a growing Sikh community, which is a reflection of Sikhs' economic success. They are now spread throughout the country and, through that, my interest in the matter has been awakened as I become aware of some of the issues that they face. I hope that today will provide an opportunity for the Minister to reply to some of the concerns that have been raised.
I am a lawyer and I started by looking at the Mandla case. As my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) so rightly summarised—I shall not repeat his words—the Mandla case said in the clearest and most unequivocal terms not that the Sikhs are a religious group but that they are an ethnic minority. I take that, therefore, as my starting point, because it means that Sikhs should be the full beneficiaries of all the provisions of the 1976 Act. There is a separate issue about the extent to which religious discrimination should be tackled in this country and I endorse what the hon. Member for Slough said on that point. We are going to wish to tackle that subject, but I want for a moment to concentrate on the here and now—the extent to which that protection, which was perhaps not expected or anticipated when the Act was passed in 1976 but which the courts quite clearly spelled out, has been made use of in practice.
From looking at what the CRE and the Government have said—I make this point with no hostility to the Minister, because the subject goes back to long before the Labour Government came into office in 1997, although I think that it has continued since—it seems that although recognition of Sikhs as a distinct ethnic minority group has been granted, the issue has always been slightly brushed under the carpet. That has happened on the basis that people can avail themselves of that recognition if they wish, but the Government and those there to promote good race relations do not seem to be very concerned about looking at the issue in great detail.
The hon. Member for Southwark, North and Bermondsey (Simon Hughes) was correct when he said that I was going to turn to my parliamentary questions. They were the next thing at which I looked. The answers that I have obtained during the past fortnight have been very illuminating—or not, as the case may be. First, although I acknowledge that a wide variety of people consider themselves to be Sikhs, some of them fulfilling all the criteria of the group and others not wishing to do so, which is one of the elements of diversity in our society, it is clear that the Sikh community in this country is very distinctive and has an ethnic and religious cohesion. Nevertheless, the Government have very little idea of how many Sikhs are in the United Kingdom. The Sikh community believes that there are about 700,000. If that is correct, it makes them one of the largest ethnic minority groups—not a group so small that it cannot be monitored adequately. Even if the Government are right with their figure of between 350,000 and 500,000 Sikhs, that still suggests a woolliness that will affect awareness of what the problems confronting them might be. That needs to be addressed.
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Even more telling was the response to the question that I asked the Cabinet Office on how many public appointments are held by Sikhs. The answer, from the Minister in that Department, was:
"My Department does not collect data on the number of Sikhs appointed to public appointments. It collects diversity data for public appointments on the following criteria: Bangladeshi; Black-African; Black-Caribbean; Black-any other; Indian; Pakistani; Chinese; mixed ethnic background; any other Asian; White; or any other ethnic background."—[Official Report, 25 June 2002; Vol. 387, c. 835W.]
I must say that when I read that, the point that the Sikh community is making immediately struck me. Looking back to my own past, I have Jewish forebears. The Jewish community in this country has never asked for monitoring, for reasons connected with their extraordinarily successful integration into this country's life. However, if my forebears who came to this country from eastern Europe in the 1830s had found a similar regime to help them as exists now, they might have been a little surprised if the then Government had decided to collect information on ethnic diversity on the basis of whether they were Ukrainian, Austro-Hungarian or from the Russian empire. That highlights the extent to which the Sikhs have been rather airbrushed out of existence by the Cabinet Office process. They see themselves as a distinctive community, and they are recognised as such under the race relations legislation. I believe that we could do better.
Many of the Sikhs whom I have met in the past few weeks have said that they sometimes feel that the categorisations derived from the colonial past mean that they do not enjoy the distinctive identity, monitoring and recognition that they merit. After all, they say, there are many hundreds of thousands of Sikhs, not just a few thousand, even if the Government do not have accurate statistical evidence. They say also that they are British Sikhs. One has only to meet members of the Sikh community to see the extent to which that is correct. Therefore, the classifications given by the Government—I am sure for the best historical reasons—no longer match the reality of the Sikhs' position in this country.
Hon. Members have made the point this morning, in their very helpful contributions, that the events of 11 September have meant that the Sikh community has been the target of acts of racial violence. I think that five gurdwaras were attacked, and there were other instances of violence against Sikhs and members of other ethnic minority communities in this country.
Clearly, that heightens the sense of concern. I do not want to be confrontational, because the Government's intentions are benevolent, but can we not move matters along a little? I should be grateful for an assurance from the Minister that the Government will look at the issue again, and get rid of the increasingly untenable definitions with which Departments are working with regard to ethnic minority issues.
I also hope that the CRE will show more flexibility. It also has been somewhat sclerotic and worried that greater concessions would open floodgates elsewhere. I do not understand that argument: in a pluralist society, communities that are large enough and have a separate identity ought to get the recognition and monitoring that they need, precisely because they need services.

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I can tell the hon. Member for Birmingham, Perry Barr (Mr. Mahmood) that I fully understand his criticism of the early-day motion, but I worded it very carefully. I wanted to concentrate on the legal issue that I believe to be untenable in terms of the race relations legislation. I share his desire that service provision should be better targeted.
Mr. Mahmood: I agree with what the hon. Gentleman has said, but might it not be possible to table another early-day motion that we can both support?
Mr. Grieve: I am sure that, if the hon. Gentleman were to table another early-day motion, I should be happy to consider it.
I want to hear from the Minister, so I shall take up no more of the short time left. Will the Minister say when the Government will meet representatives of the Sikh community? We hoped that that would happen a week or two ago, but the meeting seems to have been put off until 31 July. Will the Minister assure us that the meeting will take place and that the needs and representations of Sikhs will be addressed properly?
I look forward to a positive response from the Minister.
10.49 am
The Parliamentary Under-Secretary of State for the Home Department (Hilary Benn): First, I join other hon. Members in congratulating the hon. Member for Uxbridge (Mr. Randall) on initiating the debate and on the thoughtful speech with which he kicked off the discussion this morning. I also wish to associate myself with the expressions of appreciation for the work of the all-party group on the Punjabi community in Britain, and for the work of my hon. Friend the Member for Hayes and Harlington (John McDonnell) in establishing the group. He follows in a long tradition of hon. Members who have taken an interest in the position of the Sikh community, including someone whom I knew for many years, Sid Bidwell, the former hon. Member for Southall, who was especially distinguished in that regard.
The hon. Member for Mid-Worcestershire (Mr. Luff) described this debate as one of those all too rare occasions in Westminster Hall when there is a large degree of consensus. In my own relatively limited experience, that is not such a rare occurrence. I have often said that it is as if we enter a parallel universe when we come through the door of this Chamber.
Fiona Mactaggart: No, it is normal.
Hilary Benn: Indeed. We enter a parallel universe in which reason, knowledge and understanding predominate, rather than struggle to make themselves heard, which is what tends to happen in the main Chamber. As this debate demonstrates, it is reason, knowledge and understanding that underpin the diversity mentioned by so many hon. Members, and are the best protection against the type of ignorance that led to the attacks on members of the Sikh community in the wake of 11 September and will help us to grapple with our attempt to understand the nature of our society.
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The hon. Member for Beaconsfield (Mr. Grieve) made a good point. We are struggling to make the categories that we use to try and understand more about the nature of our society match the reality of its increasing diversity. It goes to the heart of answering the question, "What is our identity?" and it becomes more difficult to answer that question as we become more diverse. We must recognise that we are developing a process.
The Sikhs are a people with a long and proud history. That history led them to fight against the British, to fight alongside us in two world wars, and to continue to serve in armed forces around the world, as my hon. Friend the Member for Birmingham, Perry Barr (Mr. Mahmood) mentioned. I too have seen "Bend it Like Beckham" and it is wonderful, but, since we are in cultural mode, I would like to mention an interesting photographic exhibition currently run at Wellington Arch, on the history of service by the Sikh community in the armed forces.
The estimates of how many Sikhs are in Britain vary From 350,000 to 700,000, as the hon. Member for Beaconsfield suggested. Their history has led a large number of Sikhs to make their home in Britain and become an established part of our increasingly diverse society. That history led the historian J.S. Grewal to say:
"The Sikh people subscribe to the idea of cultural coexistence. They can live in other cultures and don't really entertain hostility towards any people at all. This is the contribution they have made to world civilisation."
In every walk of life, Sikhs have contributed immensely to this country's social and economic well-being. It is especially appropriate that today we have an opportunity to celebrate and value that economic, cultural and social contribution to the stability and prosperity of British society as a whole.
Our relations—in the collective sense—with the Sikh community are extremely important, and all of us will continue to strive to improve them. Indeed, my right hon. Friend the Home Secretary may have had the example of British Sikhs in mind in a recent speech when he spoke about
"providing a warm and lasting welcome to people who then become part of the country, have a sense of belonging, take on citizenship and work as we all should to ensure that that citizenship leads to mutuality and inter dependence."
All of us have a great deal to learn from the Sikh faith's teachings of the values of tolerance, equality and concern for others. Those are values that all hon. Members share.
I will now turn to specific points made in the course of the debate by the hon. Member for Uxbridge and others. My hon. Friend the Member for Hayes and Harlington referred to previous debates acknowledging progress that is being made. Many of the questions legitimately asked in this debate about our lack of information about the nature, make-up and number of the Sikh community will shortly be answered when we get the results of the 2001 census because, as hon. Members will be aware, that census was the first to include a question on religion. The religious categories are as follows: "none"—interestingly—at the top;

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Christian; Buddhist; Jewish; Muslim; Sikh; and "others". Therefore, we will have the most complete data that there has ever been on the nature and make-up of the Sikh community.
That is the most significant single step that has been taken to learn more about the nature of that community. It will give us information about the size of the Sikh population—which will be measured by how many people identify themselves as Sikhs by ticking the appropriate box in answer to the religious question—as well as about household structure, type of accommodation, health, educational attainment, and employment. Those are the kinds of information that national Government and local government need to ensure that the services that are provided meet the needs of that community, in all its shape and forms.
As several hon. Members have said, there is also a write-in opportunity under the ethnic group category. I was lobbied by the substantial Kashmiri community in my constituency; it wanted to have separate recognition within the ethnic group classification. There was also a campaign to get a write-in in that section so that the word Sikh could be written under the Asian or Asian-British category. The ONS has said that it will look at all of the write-ins and endeavour to produce information based on what they provide. That will give us more of the sort of detailed information that we all want.
The listing of Sikh as a religion in the census will put the Sikh community in a very different position from all the other groups that were campaigning for separate recognition within the census, because it will provide us with many figures that we do not currently have. I hope that the next time we discuss this matter, I will be able to give the answers that are sought by the hon. Member for Beaconsfield—to whom I am about to give way.
Mr. Grieve: I am grateful to the Minister for giving way. I want to spare his blushes. Even at the Home Office, the ethnicity data currently use the 2001 categories of ethnic groups. As an effort should be made
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to keep one's one house in order, are steps going to be taken on that, so that Sikhs who are working in the Home Office can be identified properly?
Hilary Benn: That question points to an important issue that must be addressed by this society. The CRE code gives Sikhs the same status as other ethnic and racial groups. The hon. Member for Castle Point (Bob Spink)—who is no longer present—quoted from a letter from the CRE chairman. That letter confirms the legal recognition of Sikhs as both an ethnic and a religious group. Several hon. Members have referred to the Mandla v. Dowell Lee case. Therefore, Sikhs have the same status as all other ethnic and racial groups within the statutory code of practice, with regard to the duty to promote race equality under the Race Relations (Amendment) Act 2000 that came into force by order on 31 May.
The CRE produced the code and the related non-statutory guidance. It shares the view that the fact that case law has established Sikhs as an ethnic group for the purposes of the Race Relations Act 1976 does not of itself justify it receiving different treatment from the many other ethnic and racial groups in the UK. However, the statutory code of practice encourages authorities, in using the same classification system as used in the 2001 census, to recognise, as the code does, that authorities may choose to collect more detailed information to reflect local circumstances. Indeed. I would expect them to do that.
I confirm that Lord Filkin will meet representatives of several Sikh organisations on 31 July to discuss these and other matters, and I hope that that will give an opportunity for people to respond to many of the other points that have been raised in the debate, including those that were made by my hon. Friend the Member for Hayes and Harlington on the UN declaration and the ways in which its principles can be taken forward. I will ensure that Lord Filkin has a chance to read the debate before he takes part in that important meeting.

Trade Unions
11 am
Anne Picking: Thank you, Mr. Cook, for the opportunity to begin this Adjournment debate on the relationship between the Government and trade unions. I have been a Member of this place for a little more than a year, Mr. Cook—
Mr. Deputy Speaker (Mr. Frank Cook): Order. I would be remiss in my duties were I not to remind hon. Members that the House, in its wisdom or otherwise, decided when establishing the parallel Chamber that the four senior members of the Chairmen's Panel would be addressed as Mr. Deputy Speaker when they occupied the Chair.
Anne Picking: Forgive me, Mr. Deputy Speaker. I did not know that because I have been in this place for only a little more than a year and this is my first Adjournment debate. Whoever advised me on the issue will feel my wrath later.
My securing the debate is poetic justice, because I would not be here to represent the good people of East Lothian were it not for the trade union movement. I come from a solid, committed and staunch trade union background. My family is steeped in the history of the principles of trade unionism, and I come from the dynasty of Moffats who founded the Scottish National Union of Mineworkers. Before I started work, my dad's advice was to join the union. The importance of those words strikes me only now. Then, I simply did as I was told—people did what their dads told them—without realising the significance of the advice.
My dad knew, but I did not, that if I joined a union I would have protection, a safety net, pals, workmates and, most importantly, support. When someone becomes a worker, with no knowledge of the real world, they enter a new situation in life and become part of a new regime. They look for a friendly face and want to be part of something. They want to belong, so they join a club called a trade union. Then they learn about a collective voice and how it can influence change. All I want is a commitment from the Government to utilise the sheer effectiveness of that powerful and positive part of today's work force.
I dissociate myself from elements in the trade union movement, and the Labour movement as a whole, who choose to play games, refuse to move on and want to relinquish meaningful dialogue with the Government. However, I expect the Government to uphold the values of the trade union movement, the spirit in which it was formed and the fundamental role that it has achieved to influence society and government.
This place is the heartland of democracy, and it is bulging at the seams with the likes of lawyers and members of the intelligentsia. There is a place for such people here but, equally and arguably even more so, there should be a place for trade unionists such as me who have lived in the harsh front line. I was a nurse and I had to make decisions that affected people's lives. I have worked in Scotland, England and Northern Ireland, the majority of those years during the Thatcher reign. I use that word because she reigned supreme, with contempt and no regard for the workers and their representatives, the trade unions.
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I joined the Confederation of Health Service Employees as opposed to other unions because it represented all health workers, not only the supposed elite—the clinicians. All the workers were equally important in my union. I could not do my job effectively as a nurse if the wards were dirty or the patients were not fed, and the team element is crucial. We had to work collectively to succeed, and we did so during the dark days of Thatcher, who tried systematically to dismantle and destroy our movement.
It was divide and conquer, and Thatcher picked a few of us off, but she could never shut down the movement. The miners and steelworkers are almost gone, but their legacy remains intact. The workers still have rights, and employers and Governments must respect that. They should nurture and value the work force, who are their greatest commodity. It should not matter whether someone is a high flier with degrees and qualifications that they could paper the wall with; all members of working teams should be valued equally. It is unthinkable that workers under this Government should be treated differently or unfairly because of the job they do, and any two-tier work force scenario is unacceptable.
I applaud the concept of people being paid the right rate for the job, and it is just that they have the right to be rewarded for specialist knowledge, ability and skills. When workers' rights are determined by the job that they do, however, those responsible are guilty of gross discrimination. I hope that my hon. Friend the Minister will lay my concerns to rest in the interests of working together, true partnership and healthy relationships.
The trade union movement is at the core of this Government, and it founded the Labour party. As a member and past president of Unison, I ask the Government for fairness, not favours, and for an open door, and that they do not simply forget where they came from.
11.6 am
Mr. Andrew Robathan: First, I congratulate the hon. Member for East Lothian (Anne Picking) on securing the debate. This is a fortuitous time to discuss the partnership between Governments and trade unions, and I hope that few hon. Members think that there is no place for decent representation of the work force or for trade unions that look after their workers without becoming politically motivated. Similarly, I hope that we value everyone in the workplace. Whatever job they do—however menial or high-powered—everyone in society has a role, and I think that I speak for every member of my party when I say that.
There has been a long and fruitful partnership between the Government and the trade unions. Indeed, as hon. Members will know, yesterday's edition of The Times notes that
"it was in order to protect railway workers that the Labour Party had been established…It was the railwaymen of those days who took the lead at the Farringdon Hall meeting of February 1900"—
102 years ago—
"in the effort to set up a Labour Representation Committee".
Sadly, the long and fruitful partnership between the Government and the trade unions ended this week. The National Union of Rail, Maritime and Transport

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Workers—the railway workers' heirs—broke its link with the Government, and I am sure that we all share the grief of those involved.
I want to focus on the links between the Deputy Prime Minister and the RMT, which go back 47 years—almost half the life of the Labour party. Sadly, he resigned from the RMT last week because he was furious that it had attempted to dictate how MPs voted. It is reasonable, however, to ask how long it has been attempting to do that.
Jimmy Knapp, now sadly deceased, was head of the RMT for 15 years, and was very vocal in leading strikes on the railways in the 1980s. He was also very politically motivated against the Thatcher Government. He once wrote to me—I do not know why, because I was not even a member of the Conservative party at the time—that it was important to have guards on trains. That was a union issue, and there are good reasons for having guards on trains. I had travelled to Kent the previous day, and the guard spent the entire journey with his feet up, reading the Beano. When I asked for his help, he looked at me as if I was mad, and went back to reading the Beano. Leaving that to one side, however—[Interruption.] Labour Members' mutterings perhaps reflect their sympathies for the people with their feet up reading the Beano, which I have not read for many years.
I return to the close relationship between the Government and the RMT. In 1970, the Deputy Prime Minister moved into his flat at Clapham common. Naturally, the union wanted to support its sponsored Members and gave them subsidised accommodation in what is now Maritime house—it was then National Union of Seaman house.
Jim Sheridan: Does the hon. Gentleman agree that the relationship between the RMT and the Deputy Prime Minister and the question of who receives money and who does not has come to light only because of legislation introduced by this Government? Tory Governments never introduced legislation to bring transparency and show who influenced the Tory party.
Mr. Robathan: I am glad that the hon. Gentleman raises that point about legislation, because he is factually incorrect. The requirement for declarations under the Register of Members' Interests goes back long before 1997. That is one of the points that I wish to discuss.
On the subject of legislation, the hon. Gentleman may be interested to hear that newspaper reports say that the Deputy Prime Minister stands to benefit by some £15,000 under the Rent Acts (Maximum Fair Rent) Order 1999. That is not bad for a relationship between the Deputy Prime Minister and the union that is supposed to have ended.
In 1974, the Deputy Prime Minister moved from the flat that he took in 1970. He has a controlled tenancy that costs £220 a month. He does not use that flat, but he retains it. I wonder sometimes, when Labour Members go on about homelessness, whether they think that someone who has grace and favour homes in Admiralty arch and in Dorneywood in Buckinghamshire—
John McDonnell: On a point of order, Mr. Deputy Speaker. It is the normal practice
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of the House that a Member who raises another Member's personal circumstances or even mentions his name in the House gives notice to that Member so that he can respond. Will you clarify whether that practice has been followed in this case?
Mr. Deputy Speaker: That practice is the normal courtesy, but there is no rule in Standing Orders or in "Erskine May" requiring a Member so to do. It would be most unusual for reference to be made without prior notice being given, but it is not necessary for the Member to be present to hear that reference.
Mr. Tony Lloyd: Further to that point of order, Mr. Deputy Speaker. Your ruling is informative, but may we ascertain from the hon. Member for Blaby (Mr. Robathan) whether he took that step, which you describe as not obligatory, but usually followed as a matter of courtesy?
Mr. Deputy Speaker: I must inform the House that it is not up to the Speaker or Deputy Speaker to tell Members what to say. However, I am sure that note has been taken of hon. Members' comments and that, if they are patient, they will hear something to that effect.
Mr. Robathan: I am happy to answer. On many occasions, I have let the Deputy Prime Minister know that I am raising the issue, but he has not attended when I have done so. When I met him in a corridor recently and said, "Good morning, John," his only response was to say, "You—" I shall not say exactly what he said, because he was not particularly polite. In fact, I do not think that he is particularly interested in the fact that I have raised the issue. It is in the public domain, however, and it was in yesterday's newspapers—and, I suspect, today's. The person involved is not a menial Back Bencher, but the Deputy Prime Minister. The issue is one of national interest.
John McDonnell: Are we to understand from what the hon. Gentleman says that he did not inform the Deputy Prime Minister that he would raise the issue in debate?
Mr. Robathan: I do not have to answer that question, but the hon. Gentleman is right to suggest that I have not done that. It is interesting that Labour Members are so sensitive to the issue. Perhaps they, too, feel extraordinary guilt—
John McDonnell rose—
Mr. Robathan: Sit down. Perhaps Labour Members feel guilty that, while they rabbit on about homelessness, one among their number earns more than £100,000 a year, has two grace-and-favour residences and his own house in Hull, but still sees fit to accept a controlled tenancy from a trade union worth £15,000 a year.
John Robertson: Will the hon. Gentleman give way?
Mr. Robathan: Go on, I'll let you have a go as well.
John Robertson: Does the hon. Gentleman agree that his contribution, which, so far, has lasted eight minutes, is a personal attack on the Deputy Prime Minister and has nothing to do with trade unions?
Mr. Robathan: I am sure that if I were out of order, the Deputy Speaker would have pulled me up. Labour

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Members keep raising points of order and I have given way to them. I have nothing against the Deputy Prime Minister. [Laughter.] Hon. Members laugh, but perhaps they should try to justify the situation in which house prices are rocketing because of shortages. Indeed, they have referred to that.
John Robertson: Is it a trade union matter?
Mr. Robathan: I shall return to the matter in hand—the relationship between trade unions and the Government.
Mr. Deputy Speaker: I am most grateful.
Mr. Robathan: The Deputy Prime Minister, the Leader of the House and others have resigned from the RMT because, they say, they were put under pressure to abide by rules dictated by Mr. Crow, the new leader of that union. What did Mr. Crow expect, when he asked them to pledge support on four issues: renationalising the railways, repeal of anti-union laws, scrapping of the part-privatisation of the London underground and actions to halt job losses in the shipping industry? He said that he would support 14 left wingers who pledged support for the RMT's manifesto, although I do not know whether any are present. Perhaps the hon. Member for Hayes and Harlington is one.
John McDonnell: If the hon. Gentleman is about to distort the process of the RMT's discussions with the Labour party and Labour MPs, I am happy to intervene and explain what went on. That might take a few minutes, if you are happy for me to do so, Mr. Deputy Speaker. The relationship is not one in which any Member of Parliament has been browbeaten, threatened or bribed in any way. I also suggest that, as a matter of courtesy, the hon. Gentleman should have informed the RMT members who are part of that group that he wanted to raise the matter, so that they could be present and respond.
Mr. Robathan: I would have spent the past week writing to members of the Labour party. That is an absurd comment, and I look forward to the hon. Gentleman telling us in his speech whether he has received RMT sponsorship.
In responding to interventions, I have made all my points except to say that it is extraordinary and bizarre that, under this particular Government, with their partnership with trade unions, a man who is paid well over £100,000 a year is able to accept such a benefit and that the Labour movement is not appalled by such behaviour.
I draw the analogy with the Conservative Government allowing people to buy council houses. What would have been the response if the Minister involved lived in a council house and was able to buy it at a knockdown price? Yet, the Rent Acts (Maximum Fair Rent) Order 1999, introduced by the Deputy Prime Minister, has allowed him to benefit from the controlled tenancy of his flat to the tune of some £15,000 per year. One or two Labour Members look a little wry. Perhaps
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they are thinking about the Labour movement's long partnership, since 1900, with railway workers, trade unions and the Labour party—now the Government—and wondering whether that is what is was all set up for.
Several hon. Members rose—
Mr. Deputy Speaker: Order. I have no wish to restrict the tone or the extent of the debate, so long as comments are kept within its title. However, a number of hon. Members have written in about catching my eye. Time is limited. It is now 19 minutes after 11 o'clock and we normally allow the three Front Benchers 30 minutes before we conclude. I ask all hon. Members to restrict their comments and make them pertinent, and to resist the urge to allow meaningless interventions, although, as they will not know that an intervention is meaningless until they hear it, they should resist taking any.
11.19 am
Mr. John Lyons: I welcome this Adjournment debate, and I thank my hon. Friend the Member for East Lothian (Anne Picking) for introducing it. I want to focus on partnership working in the United Kingdom in the private and public sectors; it is more relevant to employees than the partnership between the leaders of the Labour party and of the trade unions. People are interested in what partnership means to them in their place of work and they want to know how effective it can be.
Partnership has brought positive achievements in industrial relations: it has been very successful in such a short time, its strength lies in the fact that it embraces employers and employees, it has mutuality at its centre, It relies on trust and it is embraced by employers' organisations as well as the Trades Union Congress, the Scottish Trades Union Congress and the Wales Trades Union Congress, so it has the broad support of trade unions and industry.
The objective of partnership working is to improve industrial relations, and we would all welcome that, irrespective of where it happened. Partnership is about trying to develop a workplace culture; it is about learning and about facing issues jointly rather than trade unions and employers working against each other. I compliment the Department for Trade and Industry on its efforts to encourage employers and trade unions to work together on the many issues faced by British workers in the private and public sectors. People want to discuss the issues that affect them—the balance between work and life, flexible working, hours of work, pay, and everything else that would normally be on the agenda for discussion between trade unions and employers. They welcome the fact that the Department of Trade and Industry is prepared to fund employer and trade union efforts to confront such issues.
Partnership working is a step change from the industrial relationships of the 1980s and 1990s, and it has allowed us to move away from the struggle and mayhem that characterised industrial relations in the 1980s. I welcome that change.
Mr. Gareth Thomas: My hon. Friend refers to the difficult industrial relations climate of the 1980s, and he may be aware of a throwback to that time

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in a case that came before the European Court or Human Rights—a number of trade unionists claimed that their employers discriminated against them. Does he welcome the court's ruling, which was made yesterday, that they were discriminated against for refusing to sign individual contracts or to give up collective bargaining? Does he share my view that the Government must urgently consider what action needs to be taken to prevent further discrimination against trade unionists?
Mr. Lyons: I welcome that decision, and I welcome the fact that trade unions can challenge such infringements throughout the UK, and not only legally Yesterday, in a debate in this Chamber, we heard about workers being forced against their religious or individual beliefs to work on Sundays. It is important that we counter that in parallel, both in legal terms and in the workplace.
I am interested in partnership working because it moves on from the jargon of human resource management and the agenda of the 1980s and 1990s. It secures mutuality between trade unions and employers—each should recognise the other, which is the key to partnership working. The evidence so far confirms that major benefits will be available in the private and public sectors for those who use partnership working. It can be used in the private sector, and a range of public sector employers are involved, such as local government, the health service and even the voluntary sector. That is to be encouraged.
I would never come to such a debate claiming that partnership working faces no problems. The opposite is true. A new system of industrial relations will of course have problems, but it should not be rejected because or them. The problems should be examined and investigated to clarify how systems can be improved.
A survey on partnership working in the health service was conducted in the Greater Glasgow area at a hospital in a constituency neighbouring my own. A lot of my constituents work there and it is probably typical or large acute hospitals in major UK towns and cities. The survey found several positive features: it confirmed that staff enjoy working in the health service, that they like the work that they do and that they enjoy the atmosphere of the hospital. It also confirmed that they are happy, overall, with communication, which is the key to partnership working.
We must not fall into the trap of working from the top down and saying to people, "That's your instruction, now get on with it." Managers must listen to employees—there needs to be a reverse system through which information can flow from the bottom to the top, so that managers can be told where things go right and where they go wrong. It is good that that has been highlighted and that there is a focus on it.
Staff referred to partnership working, as they do not just want memos every other day about what the employer would like to happen. They want face to face meetings with managers so that there can be a two-way process and genuine dialogue between employees and employers and between trade unions and employers Through such dialogue, managers can listen to the views of those who are to some extent the experts—the people who deliver the service or the product. That must be taken on board.
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The health service is in good fettle, because partnership working is increasing every day, every week and every month and there is a secure work force situation. However, the survey points not just to successes, but to difficulties. Staff are critical, saying that there is not enough training and development in most hospitals, and that training and development seem to revolve around people's expertise and knowledge of a particular job. The survey confirms that people want a much broader approach to education in the work force. They believe that lifelong learning should be not just jargon for managers, but realistic for everyone in the health service.
Partnership working is being employed across the UK in every part of the health service and of local government and in major parts of the private sector. People want greater awareness of it. There is no point establishing forums in either the public or the private sector and expecting people to sign up to them. People have an expectation, which they want confirmed by their employer, that partnership is essentially about listening and mutuality between employer and employee.
Under partnership working, nothing is imposed—there is discussion and agreement. People will feel much safer in that situation. The fact that the TUC, the STUC and the WTUC have signed up to partnership working is its greatest strength, and I shall continue to support it. The DTI should come to the House and brief Members about partnership working so that they can tell their constituents how important and valuable it is.
Several hon. Members rose—
Mr. Deputy Speaker: At the risk of displaying my anxiety, I remind the House that there are only 32 minutes left before I must move to the Front-Bench winding-up speeches. Hon. Members should bear that in mind in determining the length of their contributions and the number of interventions that they permit.
11.28 am
Hywel Williams: Thank you, Mr. Deputy Speaker. I will try to be brief. I begin by declaring an interest, as a former member of the National and Local Government Officers Association, the National Union of Public Employees and Undeb Cenedlaethol Athrawon Cymru—I must make that clear for Hansard. My family has a tradition of union membership. My grandfather was a shop steward at the quarry of Chwarel Carregy Llam, and, in the way that we do such things in Wales, he was known not by his proper name of John Williams, but as John yr Undeb—John the Union. I take particular pride in that.
During this and other debates, we shall hear hon. Members sitting to my right say that new Labour is in hock to the unions. May I leap to new Labour's defence and make it completely clear that new Labour is in no way the unions' special friend? That was confirmed by no lesser a personage than the Chancellor, when he spoke about vested interests on the Today programme on 26 June. He said that he would take on
"vested interests…whether it's the unions themselves or the other restrictive practices that exist in our economy".

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I find it odd that the Chancellor groups unions with other restrictive practices, but I am sure that he can explain himself. I hope that those few points have put an end to the reprehensible accusation that new Labour is the friend of the unions, and I now turn to more serious matters.
To illustrate my argument, I shall refer briefly to new Labour's Employment Relations Act 1999 and its operation in respect of an industrial dispute at Friction Dynamex in my constituency. I understand that this is the first time that new and welcome provisions in the Act relating to the protection of employees in a legitimate dispute have been put to a practical test. I say "welcome", and that is entirely the case in general, but the particular issue here, which the sacked workers have had to face, is the rule in the 1999 Act that allows an employer to sack workers in dispute after eight weeks—the so-called eight-week rule.
I do not intend to go into detail about the case, especially as it is the subject of investigation by an industrial tribunal, but after lengthy, fruitless and, some would say, pointless negotiation with the employer, the workers went on a legal strike—one week out, one week in. The workers are not hot-headed extremists. I know many of them personally and they are responsible people, some of whom have been employed at the factory for as long as 35 years. The union was always ready to negotiate seriously, but when the workers returned to work—I accompanied them early that morning when they decided to go back—the employer came to the gate to lock them out personally. The strike continued and the union continued to press the case and tried to negotiate, but got no serious response, and the workers were all sacked after eight weeks. That is how the situation stands after 63 weeks on the picket line.
The workers are out. They have the overwhelming support of the community and of others from trade unions and political parties far and wide. They are waiting for their case to be heard by the tribunal, but that will not happen until October, so the practical effect of the eight-week rule, introduced by new Labour, is 63 weeks on the picket line and a wait until October.
The question for us to consider is how the eight-week rule came about. The aim of the Act, according to the Secretary of State in the White Paper, is to
"promote the best of modern employment relationships in all our companies, encouraging a culture of fairness and trust in the workplace."
Like previous speakers, I commend that aim. According to the Prime Minister, the Act was introduced to
"replace the notion of conflict between employers and employees with the promotion of partnership—"
Another laudable aim. At paragraph 4.22, the White Paper states:
"Government believes that in general employees dismissed for taking part in lawful organised official industrial action should have the right to complain of unfair dismissal to a tribunal."
However, it contains no mention of a timeframe for dismissal.
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The Government called for views to be expressed. The opinion of the Confederation of British Industry is direct, as it specifically suggested that
"any legislation in this area must specify that the fairness of dismissal should be assessed solely against established criteria, and not in light of whether the industrial action itself was justified."
In other words, the particular circumstances of the case should not be taken into account. The CBI proposed that employers should be able to put their employees on notice of, say, 28 days, but that further participation in the strike would lead to dismissal. That proposal is the first mention of a time limit in relation to industrial action. The TUC, however, argued that dismissing a striking employee should be automatically unfair. Which side prevailed?
In a letter to the CBI and the TUC, the Secretary of State for Trade and Industry said:
"We will also provide protection for those engaged in lawfully organised official industrial action. It will be automatically unfair to dismiss employees for the first eight weeks of the action."
The period was not 28 days, but it certainly was not unlimited. The Secretary of State continued:
"Thereafter dismissal will be fair provided that the employer has taken all reasonable procedural steps to resolve the dispute."
That is how the situation lies for the Friction Dynamex workers.
The Secretary of State's statement is the first available confirmation that we have found that the Government have adopted the eight-week timetable for unfair dismissal. Although he gave no reasons for their decision, and although there was little debate in the Chamber or in the other place in 1998, the timetable is one component of the White Paper on which the Government requested views. As I have outlined, we knew who was in favour of a time limit, and it was certainly not the unions.
I should make it clear, however, that there has been much criticism of the eight-week rule from some Labour Members, and I commend them for their consistency and their commitment to a just system.
I end my brief contribution with a quote from Bill Morris, general secretary of the Transport and General Workers Union:
"It is regrettable that the employers' amendments, clearly designed to wreck the principles of fairness and social justice in the workplace, have been accommodated."
They were accommodated by a new Labour Government and by the former Secretary of State, the right hon. Member for Hartlepool (Mr. Mandelson), who is the architect of the new Labour project.
11.36 am
David Hamilton: I, too, shall be brief. I may be one of the 16 Labour Members mentioned by the RMT, but I still have not been informed about that and, like most people, I have only read about recent events in the papers. The differences between various trade unions and the leadership of the Labour party and the Government will continue, because that is how things will be. The unions are there to a do a job and to protect the interests of the people they represent, and that is as it should be. Let us go back a bit, however, and think about the trade union movement.

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I come from a mining background, and I spent 20 years in the coal industry. I came through a national dispute and was sacked for my troubles. It is laughable for Opposition Members to talk about trade unions being political, because the Conservatives took political decisions to take out trade unions. When the Conservatives were in opposition in 1979, the Ridley report said that they would have to take one or two trade unions out to defeat the trade union movement, and they knew that opposition in the House would not be enough. They had to take the trade union and labour movements out because they saw them as the real offenders.
The Ridley report made it clear that the dockers' union posed a problem because it could stifle the country, and the Conservatives realised that legislation would have to be changed so that it could not do so. The miners were identified as the vanguard of the movement, and unfortunately for me—or perhaps not, given that I am here in this place—I was one of the casualties.
Mr. Robathan: Will the hon. Gentleman give way?
David Hamilton: I might come back to the hon. Gentleman later.
In fact, the hon. Member for Blaby (Mr. Robathan), or perhaps it is Blabby—[HON. MEMBERS: "Blaby."] Perhaps it is Blether, but never mind. The hon. Gentleman said that trade unions should deal with the workplace and nothing else. Let us consider four issues—health and safety, wages, better hours and better pensions, and workers' rights. With the exception of wages, every one has been and must be debated in the House. Indeed, some hon. Members used yesterday's pensions debate to focus on workers' rights, workplace pensions, wages and conditions. The House will always be inextricably linked with the rights of ordinary working people.
On health and safety, hon. Members may recall the Samuel commission of 1926. The House had to legislate for miners to work shifts of seven and a quarter hours, because employers were making them work much longer. Even in the 1970s, however, miners were killed at Markham Main colliery. They were not even being paid a penny some of the time, because their terms and conditions made it clear that the walking time and winding time involved in going down the pit belonged to the employer, not the employee.
Health and safety legislation must be passed by the House, and it exists to protect workers who are not protected by trade union rights.
Mr. Robathan: I entirely agree that trade unions should have a role in representing their members on matters such as health and safety, but the hon. Gentleman seemed to defend a position in which dockers could stifle the country and override a democratically elected Government. That is a strange position to take.
David Hamilton: It is not a strange position, and the matter is clear. Employees are entitled to be represented, and the people they elect represent their interests. If the conditions that they work under are so bad that they feel it necessary to go into dispute, that is their right. The
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hon. Gentleman and some Governments would have that right withdrawn, but this Government would not. Like many Labour Members, I would fight tenaciously against the imposition of any such changes.
I have mentioned better hours, conditions and pensions, but workers' rights are instrumental in establishing how fast the movement can work. The Government still have a long way to go, although they are showing signs that they will consider other necessary changes. The relationship between trade unions and the Government will survive, even though trade union leaders and Ministers come and go, as will politicians, sometimes quicker than they think. The 6 million trade unionists in the movement are what matter. We should never forget that Labour Members at least are here to represent those people's interests outside the workplace, which are as important as their rights in it.
Mr. Deputy Speaker: I advise hon. Members to disregard the times on the Annunciator, which I understand are normally controlled by radio signals from Rugby. For some reason, those Rugby signals must be offside, so we should go by the times on the other clock.
11.41 am
Mr. Tony Lloyd: I always assumed that the times were controlled by radio signals from the Deputy Speaker.
I congratulate my hon. Friend the Member for East Lothian (Anne Picking) on initiating this important debate. Many issues in our society come down to the basic rights of individuals to be members of trade unions, and to work collectively with their fellow workers.
Before I come to the meat and drink of my speech, I want to say to the hon. Member for Blaby (Mr. Robathan) that his constituency has a rather appropriate name, as it could be pronounced "Blabby". I do not think that it would be out of order for me to say that his speech was contemptible—but that will be a matter of opinion.
My hon. Friend the Member for Harrow, West (Mr. Thomas) referred to yesterday's decision of the European Court of Human Rights. I hope that the Minister will reflect on that judgment in his winding-up speech. The court held that it was an erosion and a breach of the human rights of individual workers for employers to insist on negotiating individually and buying out the right to collective bargaining.
That judgment is important, as it establishes at the highest legal level the legitimacy of collective bargaining as a way to promote the rights of individuals. They are better served not by negotiating on an individual basis, but by operating collectively. I hope that the Minister will suggest what the Government intend to do about that, as legislation is needed if we are to bring our law into shape to match the judgment.
I want to pick up part of the good speech made by my hon. Friend the Member for Midlothian (David Hamilton). It is absolutely legitimate for trade unions and trade unionists to campaign politically. It would be an outrageous abuse of their rights in a free society if that position were eroded. It is right and proper that everything that the trade union movement does that

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reflects on the needs of its members is translated, where necessary, through collective action that brings matters to the House of Commons, and a legislative conclusion.
Health and safety is a fundamental example of why that has to happen. A Labour Government introduced the Health and Safety at Work, etc. Act 1974, which was a pioneering piece of legislation. It established a basis for partnership and the roles of the safety representative and the safety committee. Where it has been put into operation, it has been possible to measure the reduction in accidents and injuries in the workplace as a result of that partnership working. In a company that has both safety representatives and a safety committee, the accident rate is something like half of that in equivalent organisations without such a system.
Partnership works. When trade unions are trusted and are seen as part of the process, not only health and safety but many other areas become manageable. Work-related injury and illness cost the country some £19 billion. We have a huge motivation to make sure that the health and safety partnership works not just well—as it does in many cases—but better, so that we can reduce both the human tragedy and the economic cost.
Other hon. Members want to speak, so I shall curtail my remarks. The Government have introduced a statutory role for union learning representatives. That sensible decision was resisted by the official Opposition, which saw it as a terrible thing. The brutal truth is that unless trade unions are part of the process of upskilling the country, we shall suffer from the malaise of a low-skilled work force. One in five of the British work force have serious problems in that they lack basic educational skills. Previous Conservative Governments deserve a lot of condemnation for the way in which they eroded standards in our schools, and more for the fact that they are not prepared to support the role of the union learning representative in upskilling and building the educational skills base of the work force.
Mr. Philip Hammond: Will the hon. Gentleman give way?
Mr. Lloyd: If the intervention is very brief.
Mr. Hammond: To be fair, the hon. Gentleman should remind the Chamber that the position of the official Opposition is that we acknowledge the value of union learning representatives where they are appointed by consensus between the employer and the unions. What we doubt is the efficacy of imposing them by legislation.
Mr. Lloyd: Those are weasel words. Opposition Members pretend to use the language of co-operation, but will do everything they can do to prevent it from operating in practice.
The Government still have a lot to do if they are to provide a level playing field for employers and employees. The review of the Employment Relations Act 1999 and the implementation of the draft directive on information and consultation must be meaningful and give real rights to people at work. If they do not, the Government will be failing people who deserve better
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from us—those who have supported us for many years through the trade union movement. They need our help and it is legitimate for us to give it.
11.48 am
Jim Sheridan: I congratulate my hon. Friend the Member for East Lothian (Anne Picking) on having secured this important debate. We have a track record of representing workers in the workplace, particularly in difficult times. Trade unions are like democratically elected Governments—they are the legitimate voice of workers in Britain. If we did not have trade unions, we should be looking for a way of inventing them. I am proud to say, as a member of the Transport and General Workers Union—
Mr. Hammond: Will the hon. Gentleman remind us what percentage of workers in Britain are members of trade unions?
Jim Sheridan: I do not have those figures. [Interruption.] There are about 6.6 million people. I shall cover that point later in my contribution.
I am proud to say, as a member of the TGWU, that no organisation other than the trade union movement would have survived the pernicious attacks on it by the Conservative Government, which are the reason why there are only 6.6 million union members in Britain.
I, too, come from a manufacturing background, and I am proud of it. I was fortunate to work for a company that recognised the benefits of working with a responsible trade union. That company came through difficult times and worked along with the trade union to ensure its long-term security, and I am proud to say that it still exists and is growing.
The benefits of trade unions are collectiveness and, most importantly, unity in strength and numbers. After the pernicious attacks by Conservative Governments, even today there is anecdotal evidence of companies continuing to discourage people from joining a legitimate trade union. Current employment legislation is welcome, but it should be enhanced.
The hon. Member for Caernarfon (Hywel Williams) mentioned the case of Friction Dynamex. That is a disgraceful dispute; what those workers have been put through should be highlighted at every opportunity, and I hope that my hon. Friend the Minister will take that on board.
Mr. Alistair Carmichael: Is the hon. Gentleman aware of the situation on many merchant ships that are coming under the red ensign as a result of the tax benefits that the Government have introduced? Workers on merchant ships and ferries work under contracts that exclude the right to join a union. Does he not think it ironic that a Labour Government should give tax breaks to bring in shipping, but not protect workers' rights?
Jim Sheridan: To be honest, I am not aware of that situation, but I am sure that the Minister will consider the question.
I return to the point about employers discouraging employees from joining trade unions. There is anecdotal evidence in my constituency of trade unionists handing

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out leaflets outside the factory gates, only for the director or supervisor to tell employees, when they go inside the factory gates, that if they want to join a particular union the management will help them fill in the forms—and then give them their jackets on their way out. That is why only 6.6 million people have joined trade unions in Great Britain—they are actively discouraged from joining a trade union because of the fear of being sacked.
The Government have created an environment in which people are happy to join a trade union provided that they do not get the sack for doing so, but it is still important that the Government give some thought to what the trade unions are saying. Trade unions should influence the Government by argument, not through how much money they give the Government, the party or individual Members of Parliament.
11.52 am
Mr. Bill Tynan: Thank you for calling me, Mr. Deputy Speaker; I was beginning to think that I was going to miss the opportunity to say what a pleasure it was to participate in the debate. Now that I have that opportunity, I congratulate my hon. Friend the Member for East Lothian (Anne Picking) on securing this important debate, The Official Report record of the debate should be essential reading for every trade unionist in the country, because it puts into context the difference in viewpoint between the Opposition parties and the Labour party.
There is a need for partnership between the trade unions and the Government. I make no apologies for having been a member of the Amalgamated Engineering and Electrical Union, as it then was—it is now Amicus—since 1964. During that time I have been a shop steward, a convenor of a large factory and a full-time union official. I know better than most the need for trade unionism for the people of this country. I was a full-time union official during the dark years of Thatcherism, and I welcome the fact that the Labour Government treat workers with fairness, after the vindictiveness with which Tory Governments treated them. Conservative Members may smirk, but I can give them an example.
I remember a small factory called Craven Tasker Trailers in Cumbernauld, in which the union had many members—I sympathise with the constituents of the hon. Member for Caernarfon (Hywel Williams) in this regard. Most employees in the plant had worked there for 30 to 35 years. They were affected by the legislation passed by the Tory Government. I do not blame Thatcher, I blame the Tory Government for the legislation, because it was very vindictive towards ordinary people—not the union leaders, as was alleged. It affected the conditions in which ordinary people worked. They often found themselves under pressure to accept a standstill in wages or a deterioration in conditions. They also had to accept, if they were trade union representatives, that they could be targeted by the Government or their employer. That was the tragedy and unfairness of that time.
The employees of that small company decided to go for a wage increase, and were put in a position where they had no alternative but to take strike action. We went through the tortuous process of giving the name of
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every individual employee, letting the company examine that list and then seeking agreement from the trade union executive for the strike to take place. That is what had to happen. The employees then decided to take strike action. Within two days, every one of them was dismissed—35 years of service down the tube. I was so upset as a union official that I asked to meet the managing director. I met him and his answer was, "They betrayed the company."
The employees were on strike for 12 months. I went to the picket line every day and I remember the despair in their faces. We should think about that when we consider the fairness of the relationship between work forces and the Government. I am delighted with what has been done, and with the progress that this Government have delivered; I have a list of 19 points, but I do not have time to go through them all. However, it is important to recognise what has been done. My hon. Friend the Member for East Lothian said that there was more to be done to ensure that the people of this country and their conditions of work are protected, and I think that we can do that.
However, I do not believe that any trade union has the right to dictate to Members of Parliament what they should support. Unions should have the right to campaign on their issues, on wages and conditions—but to tell an MP that he or she must support a particular line is the wrong way for a trade union to act, and I deplore it.
There is a need for partnership between the Government and trade unions, and in the workplace. That happens in many workplaces, but there are still bad employers who abuse their work forces. Those work forces need our support and our help. It is essential that we recognise that fact, and that trade unions are given an opportunity to defend their members and the weapons to do so, because they need weapons on occasion.
It is essential for those on the Front Bench to make it clear exactly where the Labour party stands on this issue. We need to go further with trade union legislation, but that should be done on a fair basis, recognising people's need for membership of trade unions and the potential for partnership.
11.58 am
Dr. Vincent Cable: I add my congratulations to the hon. Member for East Lothian (Anne Picking), not merely on introducing an important subject but on the way in which she did so. I have sat through many debates in this Chamber in which the opening speaker has gone on for 35 or 40 minutes. She said what she had to say in six minutes, which is an example to us all.
There are two debates going on here. One is a practical debate about modern trade unionism and employment rights, which is where we should be concentrating our energy. The other is a separate, parallel debate about the politics of the matter, and what I think is still called the Labour movement. The British structure has been in place for a century, since the break up of the Liberal party in the first part of the 20th century. The unique link between the trade union movement and one political party is very odd. That is not how unions operate in the rest of Europe, where

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there is a multiplicity of political associations and links with the Church, or no links with any parties at all. It is an odd relationship, which, frankly, is becoming embarrassing and out of date on both sides. I shall leave that to Labour Members to resolve because I want to return to the essentially practical issues relating to modern trade unionism.
The trade union movement has changed out of all recognition during the past 20 years, for two basic reasons: first, as a result of a process of legislative reform, which started under the late Barbara Castle and was carried through by Conservative Governments. As in many other areas, the Conservatives went to excess, but many of the reforms had to happen—as most trade unionists privately acknowledge. Secondly, and probably more important than legislative reform, is the change in the economy. Less than 20 per cent of the labour force is now employed in manufacturing industry and mining, and most people now work in the service sector. There is hardly any manufacturing in my constituency. Everyone works in services, especially information-based services, so trade unions have had to come to terms with a very different environment and make themselves relevant in that environment. The more forward-looking trade unions and the TUC are doing that.
Trade unions now perform three key roles. The first, which was mentioned by the hon. Member for Strathkelvin and Bearsden (Mr. Lyons), is the development of the concept of partnership working, initiated in the 1980s by the engineering unions, when they were trying to make sense of conflicts in the car industry and other engineering industries by trying to adopt a more positive approach to productivity improvements. That helped to turn round the car industry. It is the new philosophy on the manufacturing side of the trade union movement, and it is very welcome.
Trade unions are also beginning to realise that their real role is defending individuals in the workplace, because in most companies, even fairly well-managed companies, there will be unfair dismissal, abuse and discrimination. At my surgery last Friday I heard about a typical case, in which the employer at an American-owned factory in the nearby constituency of Brentford and Isleworth disowned its final salary pension scheme. It closed the scheme to existing members and then, when they retired, their entitlements were halved. That basically amounts to stealing, and it is an appalling situation, but the employees were not unionised. They were relying on their trustees, who were ineffective. That is precisely the sort of situation in which a trade union, with proper professional back-up, can help workers.
The third positive advance, which has been led by the TUC, is understanding—this was not understood 20 years ago—that economic stability and a low inflation environment are in the interests of trade unions. We now have lower unemployment than we have had for a generation, partly because we have low and predictable inflation. The trade unions have supported the policies that produced that situation. They have also supported the principle of Britain being part of an open economy within Europe and the rest of the world. That is very different from the attitude of many French or American
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trade unions, which have led the protest against international trade. In all those respects, the British trade union movement has played a constructive role, although often in very quiet ways.
In certain areas, trade unions have achieved significant advances in the past few years. The most important of those is the introduction of the minimum wage. I admit that I was critical of that concept, having seen how it operates in other countries, such as France, where a high minimum wage is applied rigidly, undoubtedly causing relatively high rates of unemployment, especially among younger workers. Many of us feared that if that system were transplanted to Britain, it would cause considerable damage, but the minimum wage has been introduced in a consensual way, taking into account the economic consequences, and has been positive. We want the minimum wage to be extended to younger workers, but the way in which it has been introduced is a credit to all the three partners involved.
There has also been a welcome advance in relation to parental leave and recognition of the need for flexibility for families. I welcome that change. As the hon. Member for Manchester, Central (Mr. Lloyd) emphasised, the trade unions have been increasingly involved in learning and skills activities, which is also welcome. Evidence shows that trade union officials are now much more actively involved in supporting individuals with grievance procedures. They now have that right, which is an important advance.
In several respects, the Liberal Democrats would like employment rights to be enhanced. The first, which the hon. Gentleman also touched on, is consultation. Many of us were shocked last year by how the Vauxhall redundancies were announced. There was no warning or consultation, and people heard about losing their jobs over the radio. That was unacceptable. Clearly, we have to fashion a British solution, not merely some Europe-imposed general practice. An entitlement to consultation seems an essential employment right, and we strongly support that principle.
Similarly, more can be done to enhance labour rights in connection with work flexibility. That may come through in statutory instruments following the Enterprise Bill, but the principle of workers being entitled to flexibility and being able to pursue through an arbitration procedure cases in which an employer is unreasonable seems a necessary extension of workers' rights.
The old unionism is still around, and it is a problem in two regards. We experienced the first last year—it has now died down—through the action taken in public services, especially on the railways. I do not apportion blame to Stagecoach or the RMT—they were probably both responsible—but the action almost brought the rail system to a halt. The fact that a relatively small group of people can bring the infrastructure of the country to a halt is wrong. I support the principle of legislation to deal with public sector strikes through compulsory arbitration. That would not lean to one side or the other, but would prevent such disruption on a large scale. On that issue, we disagree with some of the more militant trade unions.
My final point relates to the politics of the subject, and to what I said earlier about the trade union movement. A situation in which one political party

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relies on heavy funding from one interest group is becoming increasingly obsolete, just as it is wrong for a party to rely on big business donations. One of the reasons why the Government pursued business donations was that they did not want to become overdependent on the trade unions—and they had got themselves into bed with some questionable business people.
That is not in the interests of the Government or the public. We want comprehensive reform of the system of political donations, so that parties are state funded, topped up by small private donations without any vested interests involved. If that system was cleaned up, there would be an end to the acrimonious and unhelpful debate about political influence, and the trade unions could get on better with the job of defending their members, which they are increasingly showing that they can do in a modern economy.
12.8 pm
Mr. Philip Hammond: I too congratulate the hon. Member for East Lothian (Anne Picking) on securing the debate—but I am not entirely sure that her success will have been greeted with such glee in the Treasury, the Department of Trade and Industry and No. 10.
Some of the debate has struck me as taking place in a time warp. The hon. Lady spoke of the Government having the trade union movement at their very core, and the hon. Member for Caernarfon (Hywel Williams) regaled us with stories of picket lines. However, it has been an interesting debate. At first glance, there is a temptation for the Opposition to treat the debate as a bit of private grief between the Labour party and the trade unions—a lovers' tiff, as the Labour party tries to face both ways at once, with the Liberal Democrats snapping at its heels, hoping perhaps to pick up some titbits.
The Government have performed a rather cynical balancing act as they have attempted to extract money from both sides, but that has inevitably started to alienate both sides. The trade unions, unsurprisingly, feel that they have substantially funded the Labour party's remarkable electoral success, and they expect a commensurate influence on policy. Business people believe that they have bent over backwards to nurture a relationship with the Government over the past five years, but they have finally realised that there is nothing in it for them. That was illustrated by the Chancellor's lack of consultation with business before the Budget blow on national insurance contributions was announced.
We could treat this matter as a private grief, and I could recite the litany of embarrassments that the Government have suffered recently. My hon. Friend the Member for Blaby (Mr. Robathan) has already referred to the Deputy Prime Minister's problems, and to the RMT's blatant attempts to control the behaviour of Members whose constituency parties are receiving financial support. A few days ago, even the secretary general of the TUC described the Prime Minister as "bloody stupid"—a view that Conservative Members share. Something is afoot when even a moderate TUC secretary general makes such a comment about a Labour Prime Minister.
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People who take £9 million of funding from an organisation to fight an election, and win it, should, if they are sensible, expect the organisation to come knocking at their door—and also expect that, whatever they do, it will be hard to satisfy entirely.
Mr. Lloyd: The relationship between the trade union movement and the Labour party has always been crystal clear, because it has always been published. The unions take part in Labour's conference and any money given is recorded. In the context of his example, can the hon. Gentleman tell us what the Conservative Government gave to the foreign shipowners, or to others whose records have never been published, who contributed to the Tory party when it was in government? Does he agree that we should publish those records to answer that question?
Mr. Hammond: I do not think that the fact that the situation is transparent and open makes it right—[Interruption.]. I shall deal with the issue of business contributions in a moment.
Mr. Robathan: The hon. Member for Manchester, Central (Mr. Lloyd) is incorrect: agreements between constituency parties and trade unions do not have to be declared. That is how the Deputy Prime Minister managed not to declare his links with RMT even while he was Transport Secretary.
Mr. Hammond: I am grateful to my hon. Friend for that information.
My point is that a party that takes £9 million from an organisation to win an election, which it then wins, should expect the organisation to have demands and to want to influence policy. One can also expect that one demand will lead to another. The Communication Workers Union forced the Government to back down on the threshold value for liberalisation of postal services after a confrontation at the 1999 Labour party conference. Earlier this year, a disenchanted CWU worker wrote to the The Guardian:
"I object to the claim that Tony Blair has done favours for anyone who makes a large donation…Our union, the CWU, has donated more than £1m in the last year and he has done sod all for us."
The Labour party has sought and procured donations from business, but they have come from individuals in business, not organisations; the party has not secured donations from representative business organisations. In scandal after scandal in recent years, we have seen how the Labour Government repay their debts to individual business donors—through specific favours to individual companies or entrepreneurs, such as through exemptions from legislation, clearance of takeovers, public sector contracts, peerages and jobs in public and quasi-public bodies.
Unfortunately, we cannot treat the matter simply as private grief because when the Labour party decides, for whatever reason, to bend to the demands of its trade union paymasters, British business and British working people will pay Labour's election debts. As the support for the Labour party from business and the middle England floating voter erodes, Labour will clearly be driven back into the arms of its traditional supporters in the trade unions.
Jim Sheridan: I hope that the hon. Gentleman will address the problem that workers are concerned about in Britain. In the unlikely event of a Tory Government being re-elected, what changes would he make to current employment legislation? Would he change it or would he keep it?
Mr. Hammond: That is an interesting point. If the hon. Gentleman had been a member of the Committee considering the Employment Bill and had listened to what employer and business organisations are saying, he would have a sense that the measures that have been introduced are just about tolerable for business to carry on functioning effectively and competitively with our European neighbours. We have reached the point at which the imposition of further inflexibilities in the labour market will take us down a route that leads to a substantial loss of competitiveness, which will ultimately lead to job losses. That would not do anybody in this country any good.
I want to step back and talk about the two distinct groups that I perceive in the trade union movement. We often talk about the unions, but it seems to me that there are two distinct groups. I am happy to agree with the hon. Member for Manchester, Central (Mr. Lloyd), who said that private sector unions have, for the most part, changed the way in which they operate. They engage constructively with employers in most cases, and play a constructive and important role in the workplace on issues such as education and health and safely. That part of the equation is generally working well. Nowadays, private sector unions seek to create, through pressure in Brussels and Westminster, a legislative and regulatory environment that moves the framework within which they negotiate at workplace level with employers further and further in their favour. That is a legitimate political objective for organised labour and that is the way in which they go about it. The problem, as the hon. Member for Twickenham (Dr. Cable) said, is that that movement is associated with a single political party in this country.
The Employment Relations Act 1999 has barely bedded in. The Employment Bill, which gives further concessions to the trade union agenda, has not even finished its passage through the House, yet the Government are trumpeting their review of workers' rights. We need to know whether that is simply a sham to silence dissent from the Government's trade union supporters, whether the Government are simply stalling for time, or whether their serious intention is to impose further burdens on business that will have long-term damaging effects on the UK economy. Given the Government's position, I was not surprised to hear John Monks saying that the unions were back in business.
I would never suggest that unions do not have a legitimate role to play, and I have had that debate with the hon. Member for Manchester, Central, who is an expert on those matters, during the progress of the Employment Bill. I should also like to state, for the record, that abuse does go on in the workplace I have said to the hon. Gentleman before that where abuse is taking place we will support measures to deal with it. We are not in the business of defending abuse, but we are in the business of defending British business—and, ultimately, British workers' jobs—against the
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imposition of further inflexibility that will reduce competitiveness and our opportunity to compete in world markets.
It will be said, and has been said, that many of the measures that have been introduced are simply "catching us up" with the situation in our European competitor countries. Labour practices are quite different in many European countries, and Germany has 4 million people unemployed. The hon. Member for Midlothian (David Hamilton) spoke about miners and dockers, but where are those jobs now? They have gone, because they were priced out of the market by uncompetitive practices and labour inflexibility.
Mr. Tynan: Will the hon. Gentleman give way?
Mr. Hammond: No I will not, because I only have one minute left and I want to give the Minister plenty of time.
By contrast, the public sector unions have a different agenda, of attempting direct control of Government policy. Having got the Government elected in 2001, while keeping very quiet during the election campaign, they immediately popped up demanding what was, effectively, a veto over Government policy. I do not know which is more serious, the threat to British business and jobs from the relentless pressure to pursue the unions' costly agenda of employment protection legislation, or the threat to British democracy posed by their demands to have a veto over the policy of an elected democratic Government. What is certainly true beyond doubt is that as the Government's honeymoon with the middle England floating voter and with the business community comes to an end, they will be driven increasingly back into the arms of their traditional paymasters in the trades unions.
I shall finish with a short quotation that I heard on Radio 4 last week. Mr. Crow of the RMT said of the Labour party:
"We set it up; we paid for it."
the trade union movement continues to pay for the Labour party. It paid for the election victory in 2001, and now British business, consumers, public service users—and, ultimately, workers—will pay Labour's election debts.
12.21 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): Does that speech not make you feel nostalgic, Mr. Deputy Speaker?
I congratulate my hon. Friend the Member for East Lothian (Anne Picking) and pay tribute to her work in the public sector, which underpins so much of the quality of life that we enjoy in this country. She set a high standard with her contribution, which my hon. Friends followed. They spoke with deep knowledge, experience and conviction on this important issue. I am a lifelong trade unionist and a member of the T and G and of Union of Shop, Distributive and Allied Workers, and I welcome the many constructive comments made by my hon. Friends and other hon. Members.
The job of Government is to govern in the interests of the whole country, and to build a strong, stable economy and inclusive society that spreads prosperity

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and provides opportunities for all. Partnerships are vital to such work, in helping to make policy, deliver change and understand needs. By working together, we have proved that we can achieve more than we ever could have achieved by operating in isolation. By sharing work, ideas, responsibility, burdens and benefits, we can resolve difficulties and disagreements and strengthen and broaden relationships.
The Government need good, effective and mature partnerships. We must work effectively with all our stakeholders if we are to work effectively for them. The fruits of co-operation are the 1.5 million jobs that have been created since 1997. The casualties of conflict were the 3 million-plus people unemployed in the 1980s. As my hon. Friend pointed out in her opening remarks, partnerships are emphatically not about favours to friends or to any of the stakeholders, but about fairness; otherwise, partnerships will not work.
Our vision at the Department of Trade and Industry is prosperity for all through successful business, world-class science and innovation and labour markets that promote fairness and flexibility. Every month, I visit world-class UK firms. Last week I was at the Institution of Mechanical Engineers awards presentation. I gave a keynote speech and met the winners of the manufacturing excellence awards for 2002. We work in partnership with business, employees and consumers to make the UK the most prosperous place in the world.
We already have the fastest growing economy of the G8 countries. To achieve our economic prosperity, we must drive up UK productivity and competitiveness and close the gap with our international competitors. Only in that way can we create more of the high-wage, high-skill, value-added jobs that we want. We know that that is a big task, because we know that our competitors are not standing still.
There are ever more challenges in the world in which we work. It is changing faster and more, with new technologies, ways of working, competitors and ideas. I saw new exciting ideas at Elvingston science centre in East Lothian, which I visited with my hon. Friend a short time ago. It is a showcase science park for micro businesses.
If we are to succeed in our aim of improving prosperity for all, we must face the challenge in partnership with business, workers, trade unions, investors, educators and many others. In that way, the partnerships can benefit all of us. They all have a crucial role in raising productivity and competitiveness individually and collectively. As a Department, we must focus on areas where we can make the greatest difference.
My hon. Friend spoke of her concern about a two-tier work force, and I am informed that if staff must transfer, the national health service private finance initiative schemes will not be approved unless the Transfer of Undertakings (Protection of Employment) Regulations 1981 are fully applied and staff are offered broadly comparable pension terms, which must be approved and certified by the Government Actuary's Department. The Department of Health is involved in discussions about the possible wider effects of contracting out, and a work programme to take that forward has been agreed by the Government.
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My hon. Friend the Member for Manchester, Central (Mr. Lloyd) and other colleagues referred to the judgment of the European Court of Human Rights. The initial reading of the judgment suggests that it does little direct damage to the law on union recognition, but it strongly suggests that the law providing protection against detriment on grounds of trade union membership needs to be tightened. The Secretary of State will shortly launch a review of the Employment Relations Act 1999, which will allow us to consult on the appropriate response to that judgment.
We the DTI realise that we must ensure that there is fairness in the workplace. Trade unions, business and other stakeholders realise that we must raise our game. We must work harder at the key relationships, including those with trade unions, to deliver the increased productivity and competitiveness to which I referred earlier. That does not mean handing the DTI over to business interests. It means ensuring that everyone who can make a positive contribution is given the chance to do so.
Improvements in productivity and competitiveness are not an arid, mechanical exercise to raise industrial efficiency. We know that people's lives are improved by providing social and economic opportunities. For the Labour Government, the labour market is the point where our two overriding ambitions meet most starkly: our ambition for a dynamic, successful economy and our quest—indeed, our passion—for social justice.
The Government are often accused of being obsessed with the work ethic. As a Scot, I make no apology for that. The Labour party was created, with no small help from the trade union movement, to lift people out of poverty through the provision of work. I have seen at first hand in my constituency, as have other hon. Members, how unemployment destroys people's health, undermines their families and destroys community cohesion. I have no doubt that jobs are vital to social inclusion and social justice.
When we came into government, we were clear about our policy towards the unions. It was not to turn the clock back to the 1970s. We knew, and I believe that most unions knew, that some of the reforms of the 1980s were necessary. The unions had to modernise and reform to meet the challenges of a changing economic environment, just as individuals in business had to change. Some of the key reforms—for example, pre-strike ballots and the outlawing of secondary action—were supported in the trade union movement, and some unions had the option of a pre-strike ballot written into their rule books before legislation was introduced. However, we all know about aspects of the Conservatives' reforms that were vindictive and counter-productive. Some of my hon. Friends have spoken with deep and personal knowledge about them.
The Conservatives sought to marginalise the unions and to deny legitimate workplace representation. This Government recognise that unions have a valuable role to play in the economy and in society. That is why this Government have done more in five years to protect workers' rights through legislation than any other Government. We restored the right to join a trade union

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at GCHQ within 13 days of coming to office. We introduced statutory procedures enabling unions to obtain recognition in organisations with more than 20 employees. With measures such as our landmark minimum wage, which has helped 1.5 million people and is now supported by all parties, the automatic entitlement to four weeks' paid leave, and help for the 400,000 part-time workers who now directly benefit, we have shown that our commitment is to working people—
Mr. Eric Illsley (in the Chair): Order. We must now move to the next debate.

Cancer
12.30 pm
Mrs. Marion Roe: As a former Chairman of the Select Committee on Health—I chaired it for five years, during which time we undertook an inquiry into breast cancer services—and as a current chairman of the all-party group on breast cancer, I am pleased to have an opportunity to speak about the important subject of cancer prevention. It is an issue that is often neglected, and remains in the shadow of treatment and care for cancer patients. Unfortunately even the medical profession does not always give it much thought, yet it is probably the factor that could have the largest impact on the lives of the British public if more people knew how to reduce their risk of developing cancer.
People are increasingly concerned about cancer, taking a fatalistic "que sera sera" attitude. Recent press discussion about genetic links' making cancer more likely in some families than in others has added to the fear surrounding the disease. In fact, only about 2 per cent. of cancers have any genetic link. It is more likely that common lifestyles and diets in families lead to higher incidences in some families than in others.
Although it is true that cancer is the biggest cause of death in the world, with more than 10 million new cases and 6 million deaths every year, it is not as out of control as we think. According to the World Cancer Research Fund, up to 40 per cent. of cancers are preventable through diet and lifestyle alone, and the figure rises to 70 per cent. if giving up smoking is included. In global terms, that means that appropriate diets could prevent more than 4 million cases of cancer each year. Keeping alcoholic intake within the recommended limits would prevent up to 20 per cent. of cases of cancer of the aerodigestive tract, colon, rectum and breast. So this is by no means a disease to which we must resign ourselves, although currently many people do not have an opportunity to reduce their risk because they have no access to the relevant information.
An expert report called "Food, Nutrition and the Prevention of Cancer: a global perspective" reviewed more than 4,500 leading research studies from around the world in the field of diet, nutrition and cancer. It was commissioned by the World Cancer Research Fund to provide up-to-date, reliable advice for individuals on how to make the changes that can protect them from cancer. The report is currently being updated, and is an ideal source of information for policy makers and opinion formers. Unfortunately there is a surplus of inaccurate information all around us, from a variety of ill-informed sources, about healthy eating and eating for health. The public feel inundated with information but are unaware of the health benefits of eating a diet rich in vegetables and fruits and low in fat and salt.
Here is an example of good promotional practice. Cancer Research UK has teamed up with Tesco, the supermarket chain, whose headquarters are in my constituency, to promote the "five a day" campaign to the chain's 16 million customers. By actively promoting the "five a day" message, we can encourage people to improve their diet and protect the long-term health of their families. The Government and other organisations are also involved in major "five a day" initiatives.

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However, how often do we see people who have given up smoking because they are afraid that they may develop cancer, but who still pile salt on their food and eat a diet high in red meat and fat or low in fresh vegetables and fruit?
Prevention is the only sensible approach to cancer. It benefits not only individuals but families, communities and national economies. The nation's health needs to improve and we can improve only if everyone, including the Government, co-operates to broadcast information such as that in the expert report to as wide an audience as possible.
As a result of the report's conclusions, the World Cancer Research Fund drew up a set of recommendations for cancer prevention that are straightforward to understand and are used by people who are concerned to reduce their risk of cancer. Many health professionals also find the recommendations an invaluable guide for advising patients on cancer prevention.
Nurses' close relationship with communities and patients means that they are ideally placed to promote healthy living. Their work ranges from that of the school nurse who gives advice on healthy eating to that of the public health nurse who explains to men in pubs about testicular cancer. Nurses work with minority groups to raise awareness of specific cancers and practice nurses play an essential role in early detection by screening and monitoring.
The trouble is that although the World Cancer Research Fund runs an extensive education and communications programme, it cannot possibly provide information to the whole population. It needs Government support in the cancer prevention arena to make progress. Its recommendations are:
"Choose predominantly plant-based diets rich in a variety of vegetables and fruits, pulses and minimally processed, starchy staple foods.
Avoid being underweight or overweight and limit weight gain during adulthood to less than 5 kg (11 pounds).
If occupational activity is low or moderate, take an hour's brisk walk or similar exercise daily, and also exercise vigorously for a total of at least one hour in a week.
Eat 400–800 grams (15–30 ounces) or five or more portions a day of a variety of vegetables and fruits, all year round.
Eat 600–800 grams (20–30 ounces) or seven or more portions a day of a variety of cereals, pulses, roots, tubers and plantains. Choose minimally processed foods and limit the amount of refined sugar you eat or drink.
Alcohol consumption is not recommended. If consumed at all, limit alcoholic drinks to less than two drinks a day for men and one for women.
If eaten at all, limit intake of red meat to less than 80 grams (3 ounces) daily. It is preferable to choose fish, poultry or meat from non-domesticated animals in place of red meat.
Limit consumption of fatty foods, particularly those of animal origin. Choose modest amounts of appropriate vegetable oils.
Limit consumption of salted foods and use of cooking and table salt. Use herbs and spices to season foods.
Do not eat food which, as a result of prolonged storage at ambient temperatures, is liable to contamination with mycotoxins.
Use refrigeration and other appropriate methods to preserve perishable food.
When levels of additives, contaminants and other residues are properly regulated, their presence in food and drink is not known to be harmful. However, unregulated or improper use can be a health hazard, and this applies particularly in economically developing countries.
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Do not eat charred food. For meat and fish eaters, avoid burning of meat juices. Consume the following only occasionally: meat and fish grilled in direct flame, cured and smoked meats."
For those who follow the recommendations, dietary supplements are probably unnecessary and possibly unhelpful for reducing cancer risk. The recommendations are consistent with guidelines for preventing other major diseases such as heart disease and strokes, and if followed will provide a healthy diet and lifestyle that will not just prevent cancer, but make people feel much better.
There is a consistent pattern showing that diets high in fruit and vegetables decrease the risk of many cancers. There is also conclusive evidence showing a link between being being overweight and higher cancer risk. In particular kidney, endometrium, colon, prostate, gall bladder, and postmenopausal breast cancers are all linked to being overweight. More than 90 per cent. of cancers have a hormonal link, and levels of hormones are all affected by overeating and being overweight. Changes in diet could prevent up to half of all cases of breast cancer and three out of four cases of stomach cancer.
The European prospective investigation into cancer and nutrition is the largest study of diet and health ever undertaken and is aimed at providing reliable information on dietary factors and cancer risk. Researchers in 10 European countries have together recruited a total of half a million men and women to the study. Cancer Research UK is providing core support for the UK arm of EPIC, which is being co-ordinated by two centres, located in Oxford and Cambridge.
In conclusion, my questions to the Minister are simple and straightforward. What are the Government's intentions with regard to cancer prevention education? Do the Government agree that cancer prevention is an important area to promote, and how do they plan to do that? How do the Government plan to make prevention of cancer a more integrated part of health service policy? I look forward to the Minister's reply.
12.42 pm
The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): I am very grateful to the hon. Member for Broxbourne (Mrs. Roe) for raising the extremely important issue of cancer prevention, and for focusing on the links between a healthy, nutritious diet and the cancers that she mentioned.
The area is very important and does not always receive the attention that it should, but I have a sense that it is becoming increasingly important and increasingly well known amongst the general public. We have an opportunity today to put some of those issues on the record and raise them even higher in the general consciousness.
As the hon. Lady said, cancer is clearly a major cause of mortality and morbidity in England. Every year, 200,000 people are diagnosed with cancer and 130,000 of those people lose their life to the disease. It is a major issue for us in this country, as it is internationally and globally. More than half of the deaths occur to people under the age of 75, so we are not just talking about elderly people approaching the end of their life. This is clearly an issue for many in the prime of life.

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There are also very wide inequalities in who gets cancer. People from deprived and less affluent backgrounds are more likely to get some types of cancer, and are more likely to die from them once they have been diagnosed. It is a very important issue for all of us. Since 1997, the Government have pledged to cut the death rate from cancer in people under 75 by at least a fifth by 2010. That is a very challenging target for us to meet. For all the families concerned, it is an incredibly important priority. In particular, we are aiming to improve the health of the worst-off, because they are more likely to suffer.
In the NHS cancer plan, we set out a comprehensive strategy to bring together prevention, screening, diagnosis and treatment, so that the whole service would be outlined within the plan. We shall try to set standards for each of those elements, because all parts of the process are equally important. It is pointless to have the most wonderful treatment in the world if we do not also focus on prevention and on getting to the causes of cancer, as the hon. Lady so ably outlined.
Preventing cancer is a key component of our approach to meeting the target for reductions. We recognise that unless we get prevention right we shall not reach the targets that we have set. Engaging the public and the professionals is absolutely key. I strongly feel that, in addition to getting the message across and dealing with health promotion, we must engage people in wanting to change their eating habits, in stopping smoking and in changing their whole lifestyle. Evidence has shown that it is not enough for Ministers to issue edicts and good advice. We need to engage people in realising why they need to change, and what they can achieve for themselves, so that they have a sense of being in control and taking responsibility for their health.
The hon. Lady rightly raised the role of smoking in causing cancer. That is pretty widely understood now. Smoking causes about a third of cancer deaths, and half of all lifelong smokers will die from their habit. Those are astounding figures. We have set tough targets on tackling smoking, and we have put a particular emphasis on trying to reduce smoking among the less affluent groups, and particularly among manual workers. Smoking has, in recent years, been more prevalent among such people than among professional groups, who have reduced smoking to a greater extent.
We have backed up the targets with pretty impressive investment. It is acknowledged in this country that we are world leaders in helping people to give up smoking. We do so through clinics, helplines, and one-to-one counselling sessions, which are incredibly popular across the country. Research shows that some 80 per cent. of smokers want to give up; only a small proportion of people want to continue. We therefore have a real responsibility to help people to give up.
We have put £46 million into public education about smoking to try to keep the message in the public consciousness. We also introduced a Bill to ban tobacco advertising, which is making its way through the House and the other place. The Bill will make good our manifesto commitment to ban tobacco advertising. Our action on tobacco is bringing about results. Between April and December last year, smoker services helped
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nearly 80,000 people give up smoking. That is a pretty impressive figure. Those people were followed up four weeks after they quit, and they were still not smoking then. Sometimes people relapse, and it is important that we give them a second, third and fourth chance to give up smoking, as that seems to be working.
The hon. Lady focused on the less-known relationship between cancer and diet. The link between cancer and smoking is now pretty well established in the public consciousness; another task is to get the link between cancer and diet equally well known in the wider community. There is good evidence to show that dietary factors account for about a quarter of all deaths from cancer. Dietary changes could prevent up to a third of cancers from occurring. Increasing consumption of fruit and vegetables is the most effective prevention strategy for cancer after reducing smoking. People who do not regularly eat fruit and vegetables are at greater risk of several common cancers, including colorectal and stomach cancers, as the hon. Lady said.
Eating at least five portions of fruit and vegetables a day could lead to reductions of up to 20 per cent. in deaths from chronic diseases, including heart disease and strokes as well as cancer. That is good news all the way. If we can get people to have a much better diet, not only will we strike at cancer, but we will make big inroads into heart disease and strokes. There are also less tangible benefits, including the fact that people will feel better in themselves. We need to get that message across.
Consumption of fruit and vegetables in the United Kingdom is pretty low. It is among the lowest in Europe. Although we recommend that people eat five portions of fresh fruit and vegetables a day, average consumption is just three portions a day for adults and two for children. We therefore have a long way to go. One in five children—20 per cent.—eat no fruit at all in an average week. That is a pretty damning statistic, but we are doing something about it, and I am optimistic for the future.
As in the case of smoking, there are wide class differences in people's access to fresh fruit and vegetables. Better-off professional groups eat about 50 per cent. more fresh fruit and vegetables than those in unskilled social groups. A big inequality issue is involved in this case, too, but we are making progress.
We have set up the "five a day" programme to improve access to and consumption of fruit and vegetables. The programme has several different strands. Like the hon. Lady, I was recently in a supermarket and was pleased to see that supermarkets are beginning to market their goods in relation to "five a day", trying to connect fresh fruit with processed foods and trying to give the idea that people can make a healthier meal than they have in the past. Encouraging manufacturers to be imaginative in making the programme attractive to people is important. Simply giving worthy advice will not be effective, but it is possible to affect people's shopping habits.
The new opportunities fund has made available £10 million to build on the success of the pilots that we launched in disadvantaged communities. Primary care trusts have introduced 66 new programmes in local neighbourhoods to try to make it easier for people who live in poorer areas to access fresh fruit and vegetables.

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At one pilot site, in Sandwell, it was revealed that few shops in the area sold fruit and vegetables. A home delivery service was therefore set up. It attracted 200 regular customers and within about seven months average monthly household spending on fruit and vegetables more than doubled, to more than £10 a month. There was an increase in average daily consumption for everyone, from one and a half portions to three portions. That delivery service worked. People wanted to eat fresh fruit and veg, but had no shops in their local neighbourhood, and if they did not have a car, found it difficult to travel. We shall build on such pilots as we roll out the new opportunities fund resources.
We are also trying to introduce a good communications programme to spread the message and promote health. We have a "five a day" logo, which people can easily recognise when out shopping and making choices.
The big push is the free fruit in schools scheme. As I said, one in five children eat no fruit in a week, which is why we decided to concentrate on that. We started with pilots and are achieving incredibly good results. Teachers have said that the children talk about the fruit and look forward to it. There was some scepticism at first about whether children would want to eat fruit, but more than 80 per cent. are taking it up and enjoying it.
The scheme has challenged misconceptions about the way in which children view fruit. Given the opportunity, in an attractive setting, with good quality fruit, they want to take part. In virtually all the schools, teachers have welcomed the scheme as supporting their teaching and learning materials. Concerns were expressed about whether it would be an extra administrative burden on teachers, but teachers have welcomed it and incorporated it into much of their health education for children.
The national school fruit scheme is being expanded on a region-by-region basis. It has £42 million from the new opportunities fund. In the current school term, the entire west midlands region is coming on line, which will mean that about 250,000 children in almost 2,000 schools will have free fruit. From the autumn, the next regional push will be in London.
In a new innovation, we are testing the inclusion of vegetables in the scheme. From this week, 7,000 children in Sheffield and Merseyside will eat carrots or tomatoes—little cherry tomatoes, I believe, which are quite attractive—one day a week. If that goes down well, we shall consider whether vegetables can be introduced more widely. There is a widespread conception that children do not like vegetables, but if they are well presented and easy to eat, we have a real chance to change attitudes in the longer term.
The direct support of providing fruit is backed up with curriculum and teaching materials designed to encourage lifelong habits of eating fruit and vegetables in young children. It is not a one-off or just something that they do at school; they take it home with them and, I hope, influence the wider family.
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The national healthy school scheme is a big programme. It is aimed at young people, in particular. It emphasises the need to consider a healthy lifestyle as a whole—not only diet, but smoking and the other issues raised by the hon. Lady, such as alcohol consumption. It is important to get across to adults the message about safe levels of alcohol consumption, too.
Regular physical activity is a key issue. It can reduce the risk of certain cancers, particularly colon cancer. We have recently announced that, with Sport England and the Countryside Agency, we shall be setting up nine physical activity community pilot schemes—one in each region—to test innovative ways to involve people in sport and active recreation, so that they can benefit from physical activity. One pilot scheme will focus on free swimming for young people. I am looking forward to when the bids come in and if hon. Members have imaginative ideas for their regions, I encourage them to ensure that they are submitted. Obesity can contribute to postmenopausal breast cancer, as the hon. Lady said, and endometrial cancer. A low-fat and low-energy diet with plenty of fruit and vegetables can lower the risk of such cancers and, together with physical activity, can make a major impact on obesity.
The hon. Lady mentioned alcohol. Its misuse is thought to be a major cause of about 3 per cent. of all cancers, especially cancer of the mouth, the larynx and the oesophagus. As the hon. Lady knows, our alcohol strategy is on track and it will be implemented by 2004. The cancer plan has brought our work together. It provided a commitment to ensure that we considered skin cancer, too, because that is all too common in the United Kingdom. Each year, there are 40,000 cases of skin cancer and about 2,500 people die from malignant melanomas. We must get the right message across to the community. Prevention is central to our strategy, in respect of not only cancer, but coronary heart disease and strokes—all those avoidable deaths, which are such a tragedy for the families involved.
It is difficult to persuade people to change the way that they live. We are all creatures of habit and, when we get into bad habits, it is difficult to get out of them. The public are well educated and they ask us for information. We must supply it. We must ensure that patients and young people—indeed, the whole community—feel that they are partners in their own care and share responsibility for it. They can make a difference to their health. That will have huge spin-offs; it will not only have a direct effect on diseases, but give people a sense of ownership of their own health condition. If people take control, that will provide health benefits. Such an agenda is becoming increasingly important to us all.
I encourage hon. Members to convey strong messages to their communities. We should take every opportunity to carry out health promotion work on public platforms and work with partners, in supermarkets, in manufacturing, or when we visit schools and talk to young people. The average daily consumption of fruit and vegetables in Greece is nine portions a day, yet our average is three portions for adults and two for children. The task before us is considerable. If the standard of our diet can reach some of the better standards of European countries, perhaps we shall experience their sunshine and that might do us some good, too. People in this country will benefit enormously from improving their

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diet. The Government are determined to do everything that we can to invest in such areas, and in exhortation and persuasion. I hope that it will make a significant difference in cancer cases and the whole range of avoidable diseases.
Mr. Eric Illsley (in the Chair): Before commencing the next debate, I should like to point out that the annunciators have broken down. Hon. Members should not rely on them for timings. The digital clock on the wall is still working.

Traffic Calming
12.59 pm
John Mann: Time may have stopped here, but the debate about road humps is only just beginning to gather pace. I note from Hansard that in the past 10 years there has been virtually no debate on the issue in the House of Commons or the other place. Road humps have spread like a plague across the estates and mining villages of Britain, and I assure the Minister that residents throughout the country are increasingly up in arms about that.
I tabled a parliamentary question yesterday and was referred to the "Road Safety Compendium" on the internet and in the Library. I am extremely familiar with every document in that compendium in relation to road humps—I have a copy of each document and have read and analysed them all. One interesting factor is how little research has been done on the issue over the years, in this country or abroad.
I wish to make it clear that I do not oppose traffic calming or the reduction of speeds—far from it. I have campaigned vigorously in my constituency for the introduction of speed cameras on the A361, for example, where, sadly, a significant number of people have died in car crashes. One irony is that the county council that introduced road humps in my area and other parts of Nottinghamshire is the one that refuses to bring in speed cameras because it does not believe in their effectiveness or that the case for them has been proven. I hope that the Government will make it impossible for local authorities to opt out. When the local community and the police want speed cameras, they should have them on death roads such as the A631. However, that is not the purpose of this debate.
The compendium to which I referred makes great play throughout of the requirement for consultation on the effectiveness of any traffic-calming method. I congratulate the Minister and the Government on their home zones initiative, which takes the concept of consultation far further by involving the community in the design of road safety. It is noticeable that home zones are both popular and effective and I would welcome them in my area. Sadly, that is not what we have.
I did a poll of the residents of Manton village and 1,836 households responded. Of those, 97.7 per cent. were in favour of the removal of the road humps and 1.8 per cent. were against. Such majorities are unheard of these days, even in North Korea or Cuba. The view of the local people is clear and goes beyond the advice given to me by officials in the Department for Transport, who tell me that they would normally expect approximately a third of the population to be hostile to traffic calming. In my constituency, in essence, three thirds are opposed.
Road humps are not only a local problem. On 30 April, The Times reported on the front page that the social exclusion unit was going to introduce road humps specifically on council estates throughout Britain. Following that report, I invited the social exclusion unit to my constituency, and its members were in the Manton estate on Friday. They witnessed the problem. One hundred and twenty different sets of road humps were put into one mining village in 1995.

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I have analysed the statistics on accidents, which show only that statistics can be used in many ways. More than a quarter of accidents happened not in the village but on the main road, which does not surprise me. I especially like to see road safety on main roads. More than a quarter of the accidents happened on one main road, not inside the village, but the statistics were used as the rationale for introducing road humps.
Sleeping policemen were used. The Royal Automobile Club wrote to me this morning and it is interesting that it does not differentiate between sleeping policemen and cushion humps, but I shall for the purpose of this debate because there is a crucial difference. People in Manton do not demand sleeping policemen everywhere, but they are comfortable enough with them. On one road with sleeping policemen, the number of accidents reduced from seven to one. That is the most effective reduction on any street in the entire village.
I oppose speed cushions rather than other forms of road hump. They were developed in Germany and introduced in 1992. They were meant to assist the emergency services while reducing vehicle speeds. In other words, they are especially designed to allow emergency service vehicles to pass down main roads quickly. Transport advisory leaflets Nos. 498 and 198 specifically relate to the fact that such vehicles can straddle the humps.
Let me outline my objections, the first of which is discomfort. In mining villages such as Manton, which has been plagued by road humps, a disproportionate number of people have back complaints because people who have worked down the pit are more likely to have a back complaint. The irony in Manton is that the pensioner bungalows are at the top end of the estate, and pensioners who do not drive and must use the bus are those who are most vigorous in leading the campaign against speed humps, rather than motorists. The question of discomfort is not to be taken lightly, especially in mining villages and estates throughout the country.
I have raised my second objection with the county council. Why do these humps get stuck in mining villages and estates? I do not find them in private housing estates in my area, which are the wealthier estates. My objection is precisely to the attempt to dump more of them in working-class areas, which the social exclusion unit allegedly—according to The Times—attempted to pursue. That exacerbates local opposition.
Mr. Anthony Steen: Will the hon. Gentleman give way?
John Mann: May I make further progress?
My third objection relates to cars' ability to straddle speed humps. Not only emergency service vehicles straddle them; cars also do. Cars go to the centre of the road or drive around the humps. Bollards must be put on pavements and cyclists cannot get through. The plague on estates today is motor cycles. What do motor cycles do? They go through the middle of cushion humps or use them as take-off ramps. The key point is that the humps do not work.
The speed humps are not intended to be sited at pedestrian crossing points. However, their built-in design features mean that the most vulnerable
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pedestrians use them as crossing points because they often create a central reservation. Consequently, pensioners and young children use them as a halfway point when crossing the road. People not only go against the Government's advice to cross at the humps, but are attracted to crossing there. Indeed, the question whether pensioners could sue if they trip over the humps might be more important as they start to take action against the authorities that put the humps in.
All the guidance fails to incorporate the fact that there are fewer people with garages on these estates. Therefore, there is more on-street parking, but the guidance makes virtually no reference to that. Officials visit the Manton estate to make their reports on vehicle speed during the day when no cars are parked on the streets. They should see the streets in the evening when they are packed full of cars. Motorists cannot take the humps as they are meant to because of parked cars throughout the estate. That is a fundamental design flaw of the speed cushions. Owing to the guidelines, more speed cushions are required than other forms of traffic calming, such as chicanes or sleeping policemen.
I mentioned motor cycles because drivers of stolen vehicles are not keen to slow down for speed humps. Indeed, if such obstacles are in the way, they add to excitement, which has been a particular problem. The damage that the humps cause to cars is not high in terms of road safety considerations, but I tell hon. Members that many of the people who live on these estates cannot afford to repair broken exhausts, but they get two or three of them because they have to cross those humps. The speed at which they cross the humps does not alter the risk of their exhausts breaking. That is my contention—and that of many local people. Indeed, some people suggest that cars are more likely to be damaged if they go over them at slow speeds—for example, 10 mph. That is another design flaw. No research has been done on that, but it should be done.
My next objection is based on empirical evidence. It is more comfortable to drive over these cushion humps at a higher speed. I demonstrated that—although I did not drive faster than 30 mph, because I am an elected politician. I drove over the humps at 10, 15, 20 and 30 mph with people from the social exclusion unit. They may reach their own conclusions, but they, like me, were able to make comparisons, and it is more uncomfortable to drive over those humps at 15 than at 20 mph, and at 20 than at 30 mph: and yet they are meant to reduce speed. On Manton, there is no evidence that the speedsters slow down. It is the pensioners and other safer drivers who reduce their speed and get maximum discomfort, but they were going slowly in the first place.
I shall now discuss noise and emissions. Those are not major considerations, but the stop-go of traffic that is caused by the humps leads to people objecting to the noise, and to emissions, which is an important factor when we bear in mind the Kyoto emission targets. People ask, "Why should we have to put up with all this, when the wealthier private estates do not have any cushion humps?" Such factors reinforce local public opinion.
The humps were designed for the emergency services. In my area, those services—such as the ambulance service—submitted letters objecting to the scheme because it slows down emergency vehicles; it makes them travel at an average speed of about 15 mph. There

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are 17 road humps on the journey from the top of the estate to the bottom, where the pensioners are, and there are 17 of them on the journey back. That adds about eight and a half minutes to the journey time of emergency service vehicles. Some of my constituents are seriously affected by that—such as a woman with a broken back who has to go over those 17 road humps to get to hospital. In the light of such situations, it is hard for the authorities to win their case on this particular type of traffic-calming scheme.
Not only the ambulance service is hostile to that scheme. In Nottinghamshire, we have the absurdity that the wheel axis of the fire engines is too small for them to be able to straddle these road humps, so that, in our authority, the humps fail to do what they are designed to do. Therefore, the fire service is also delayed—and, consequently, it also objects. The police are hostile too, because of the effect of the humps on their response times.
Having driven the people from the social exclusion unit over 500 humps in a car, I thought I had better make sure that they fully appreciated the situation, so I took them on a bus. Therefore, they enjoyed the pleasures of travelling on the bus routes of Manton. It is not for me to speak on their behalf about whether they were convinced of my case, but they have a full picture of how uncomfortable it is to sit on the back seat of a Stagecoach Mini-hopper as it goes over the humps on that estate. Local people who have to use the buses because they do not have cars are particularly angry.
The people from the social exclusion unit also witnessed the beautiful irony that the buses could not pass along all the roads because cars park next to the road humps and use them as a safety protector, and because of the bollards that have been put up to stop people driving around them. Bus drivers have to knock on doors to ask the owners of cars to move them so that the buses can get through. That is not funny for someone who is driving an ambulance to an emergency.
The final indignity is the one that has got people going the most. There are 20 road humps on the journey from St. Paul's church to the cemetery in Worksop. I imagine that the person who is being carried in the hearse is no longer able to complain about that, but the families in the cortege also have to cross those humps. Some funeral directors are now refusing to allow their limousines to take people from Manton, because the vehicles suffer the same kind of damage that the ambulance and fire services have reported to me that their vehicles suffer. That makes the funeral directors the most hostile people to this scheme.
There are alternatives. I have proposed a 20 mph zone, I should like to see the use of sleeping policemen where necessary and I should be happy with chicanes, as used in Manchester and recommended in the United States by the emergency services. Crucially, I should like to see consultation on and expansion of the home zone concept, which is currently only an option for local authorities.
My recommendations are that 20 mph zones must be more easily available and that school governors should have the power to incorporate them into their school travel plans. That would be a major breakthrough.
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School travel plans are currently voluntary. Let us make them compulsory so that road safety is enforced on schools, not optional. It is often in schools on estates that school governors—some of whom might not be in place—have not had the time or the inclination to bring in school travel plans, unlike in more middle-class schools. Let us make those compulsory.
Let us have home zones as the recommended form of traffic calming. Let us have the powers of the emergency services strengthened in any consultation. Let us make funeral directors statutory consultees. Let us have the question of on-street parking re-examined and its impact reassessed in the departmental advice notes. That is a fundamental flaw in the current position. Finally, I suggest that the notorious and hated cushion hump be banned forthwith from every council estate and every mining village in Britain. That is what the people want, and if we have the people on our side, road safety will go forward.
1.16 pm
Mr. Anthony Steen rose—
Mr. Eric Illsley (in the Chair): Order. I can only call the hon. Gentleman if he has obtained the permission of the initiator of the debate.
Mr. Steen: Of course I have done that. It would be wrong of me to stand up without the normal courtesies. I am most grateful to you, Mr. Illsley, and to the hon. Member for Bassetlaw (John Mann). I thought that he put his case brilliantly and I am delighted that he secured the debate. I support everything that he said, and have just one or two points to add.
My personal life is bedevilled by road humps, bumps, rumble strips, raised ribs in the road and signs in south Devon that say it is 300 yd before the 30 mph speed limit, then 200 yd before the 30 mph speed limit and then 100 yd before the 30 mph speed limit. Speed restrictions are increasingly encroaching into the countryside. There are mini-roundabouts, maxi-roundabouts, road widening schemes and road narrowing schemes. You name, Devon has it.
There are different types of hump, different sizes, different shapes, different angles, different widths and different elevations. Some are as steep as Everest, some deceptively slow in their angle. Cars can keel over like a boat in a force 8 gale, and being in a maritime constituency, one constantly thinks one is in a boat rather than a car when one hits traffic bumps.
There is an enormous cost to the council tax payer. Each hump or bump costs about £1,000—money that could be spent on social services. Instead of having hot meals on wheels, elderly people now have deep-frozen meals sent to them on one day of the month, which they have to store and go on eating for the whole month, to save money. What is that money being spent on? Traffic humps at £1,000 a time. I am totally opposed to the traffic hump. It is destructive to the vehicle, noisy for people living nearby and of no consequence in stopping traffic. The situation is like that of King Canute. We cannot hold back the traffic by putting in traffic humps or bumps.
I shall briefly mention Totnes, the central town in my constituency. Quite simply, our planners in Devon have too much money and too much time. They spend their

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time devising new planning schemes to slow down or reverse the traffic. At the moment, the traffic goes up Fore street, as it has for about 300 years. Now there is a plan to turn the traffic and have it going down the street with rumble strips, and little flower-beds in the middle of the main road. The planners want there to be various places for cars to park. They want to reverse traffic flows and hold exhibitions to explain matters to everyone. Very simply, market towns do not need traffic bumps. They need a hopper bus that goes round and round the town every five minutes and a big field to park cars in. Instead, there is an attempt to spend more and more public money on slowing down the traffic.
As the Minister comes from Devon, he will know that in Devon the planners are doing everything that they can to slow down traffic so that one day they will create one huge jam 100 miles long of solid metal overheating in the sun.
I look forward to the Minister's response to what has been an excellent debate. I have much more to say, but I will say it to him in private. In the meantime, will he please relieve constituents of these menacing humps? If they were in a piece of science fiction, they would not stop growing.
1.19 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I too congratulate my hon. Friend the Member for Bassetlaw (John Mann), not only on securing the debate but on the forceful way in which he made his points. I must say that I would not like to get on the wrong side of him.
Mr. Steen: You are.
Mr. Jamieson: Well, hon. Members have not yet heard what I have to say. Anyway, my hon. Friend is a doughty fighter for his constituents and, as always, proved it today on behalf of Manton.
My hon. Friend tabled a question for yesterday's Question Time, but unfortunately it was not reached. If it had been, we might have been able to rehearse some arguments for today. He says that in his area road humps have spread like a plague, but I think the biggest plague on the roads is death. Each day an average of nine people die on the roads, and about 10 times as many are seriously injured.
The debate eventually turned into what was almost an attack on local authorities, which are responsible for introducing traffic-calming measures. The hon. Member for Totnes (Mr. Steen) said that his authority was getting too much money. I made a note of that: I am sure that members of all parties in his local authority will be interested to learn of his view, and we shall certainly take account of it in the next spending round relating to local transport plans. My Plymouth constituents will be very pleased to receive some of the money that the hon. Gentleman thinks should not be spent in his area.
My hon. Friend said that road humps got stuck on housing estates. The fact is that it is on such estates that most accidents occur, especially those involving young children. Analysis of road casualty figures shows that the poorer and more disadvantaged people are—especially elderly people and children—the more likely they are to be killed or seriously injured on the roads.
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I do not know my hon. Friend's constituency very well, but I have some knowledge of it, and I believe that it contains some very poor areas. Middle-class children are involved in such accidents less often than poorer children, who are injured in collisions while travelling to and from school.
I accept that road humps are sometimes inconvenient. My hon. Friend, who made some good points, says that the local authority has not taken proper cognisance of local people's wishes.
John Mann: Will the Minister give way?
Mr. Jamieson: Certainly.
John Mann: According to statistics, all child deaths in the area have occurred on major roads. The biggest irony is that on Retford road—the main road that runs alongside the Manton estate, the road on which the estate was built, the road to the pit—there is no traffic calming, but that is the road on which young people have died. There have been no child deaths on the estate. I have no objection to road-safety and traffic-calming measures on estates or main roads, but the main problem is the absence of local support—and that is partly because all the humps are dumped in the side streets rather than on the main roads.
Mr. Jamieson: My hon. Friend and I are in agreement: road-safety and traffic-calming measures should be introduced where there is a need for them. Where children and other vulnerable people are seen to be at risk, traffic-calming measures of whatever kind should be established. Speed safety cameras, for instance, should be installed in areas where there is excess speeding leading to casualties, rather than being put just anywhere on our roads. That too is a determined policy of this Government.
The experience of my hon. Friend is not shared across the country, although I am sure that it is the experience of people in his area. I can speak of my constituency and the many other areas that I have visited in my capacity as the Minister responsible for road safety. In my area, one of the worst roads through a council estate that was built in the post-war years, in the 1950s and 1960s, had a horrendous accident record. Again, mainly elderly people and youngsters were affected. Traffic-calming measures—humps and chicanes—have been installed on that road. If I proposed that they should be removed, there would be a riot in that area, because people know that there would be a return to the deaths and injuries of some eight or nine years ago, before the measures were put in place.
My hon. Friend also mentioned vehicle damage and discomfort. He said that claims had been made that road humps caused damage to vehicles and injury to vehicle occupants, especially professional drivers and the disabled. Complaints of that type have been made many times since road humps were first introduced, but no firm evidence has emerged. As a result, the Department has commissioned research by the Transport Research Laboratory into vehicle damage and the possible creation of physical problems. The project is due for completion in September 2003, and I am sure that my hon. Friend will be interested in its outcome.

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Combating excessive and inappropriate speed is a complex issue that does not have just one solution. I believe that my hon. Friend and I agree about that. The Department undertook and published a fundamental review of speed policy two years ago. Its recommendations were accepted by the Government and incorporated into the road safety strategy. The speed review concluded that speed limits should be set at levels that are safe, suitable for the road function and at levels most likely to be respected by drivers. Motorists are less willing to comply with limits set at inappropriate levels. We are working on improving information and guidance to local authorities on setting local speed limits.
Obviously, we would like drivers voluntarily to stick to the speed limit. Unfortunately, experience shows that the majority are reluctant to do so unless there are proven traffic-calming measures in place that persuade them that a lower speed is appropriate.
Mr. Steen: Will the hon. Gentleman give way on that point?
Mr. Jamieson: No, I will not. The hon. Gentleman has had long enough, and I need time to respond.
We accept that traffic calming—road humps, speed cushions and speed tables—is not a panacea or the only answer to the problem. However, the clear evidence that we have from around the country, from people in local areas and on local councils, is that they are successful and effective safety measures for reducing vehicle speeds in some areas. Their effectiveness is more prevalent in the urban areas to which my hon. Friend the Member for Bassetlaw referred. However, I accept his point that it is not just a matter of setting a speed limit. Local
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authorities can bring in 20 mph zones, which may be humped or subject to other measures. Such zones may be far more acceptable to the people who live in the area.
My hon. Friend mentioned home zones. I am sorry that he does not have one in his area. I had the pleasure of opening one in my constituency on Friday that, I must admit, involved certain changes to the road surface. It is now extremely difficult to drive at more than 10 mph in that area, and the zone has the total, absolute support of the whole of that community, because they do not want their road used as a rat run, nor do they want people coming from outside using their roads and putting them and their children at risk and in danger.
The Government have operated several pilot projects. We have put £30 million into the home zone scheme for this year. I suggest that my hon. Friend do some lobbying to get one in his area. The beauty of the home zone concept is that it is very much led by the community. In my area, the people of the community decided what they wanted. The number of flower-beds has increased, and the improvements to the area are substantial. I remind my hon. Friend and the hon. Member for Totnes that the local authority must decide on road humps, although I accept my hon. Friend's point that they can be inappropriate. If they are inappropriate, he needs to beat a path to the door of the local council in that area and make those points very forcefully. The good news is that his local authority has had a very substantial increase in funds through the local transport plan. It has received about £15.3 million in the year 2001–02, which is an increase of 120 per cent. That will give Nottinghamshire county council the opportunity to use some of that money to create the sort of zones that people want and accept.
Mr. Eric Illsley (in the Chair): We now come to the next debate.

Gypsy Sites (Kent)
1.30 pm
Hugh Robertson: May I start by thanking you, Mr. Illsley, for sparing the time to preside over the debate this afternoon, and through you, thank the Speaker's Office for granting me the debate? I also thank the Minister for taking the time this afternoon to respond on behalf of the Government.
I greatly regret that it was necessary to bring you here this afternoon, Mr. Illsley. The issues that will be raised were raised in a letter that I wrote to the relevant Secretary of State, enclosing the arguments from Maidstone borough council. One letter was sent on 30 April, and the second was sent on 19 June. I greatly regret that neither letter has been acknowledged or responded to. That is the reason why we are here this afternoon.
The aim of the debate is to correct an injustice, which has been caused by a change in the Planning Inspectorate's attitude to gypsies. It is important to start with one qualification. I am not in any way against gypsies, nor are the overwhelming majority of ordinary people. It is quite right that they should enjoy the same rights and protection under English law as anyone else. However, they now have a de facto range of rights under planning law that is simply denied to ordinary residents, which has been caused directly by the actions of the Planning Inspectorate.
I raise the matter as a constituency MP. I do so on behalf of the residents of Lenham road in Headcorn, the residents of Sutton Valence and Chart Sutton, and several councillors who have come to see me, deeply concerned about the issue. However, it is not simply a problem in Faversham and Mid-Kent. It is a problem throughout Kent, and is just rearing its head on the Isle of Sheppey in the northern part of my constituency. Since the debate has been tabled, several of my colleagues in the House have seen me about the issue to point out that it is a problem across large areas of the south-east. I have been asked to raise it by all levels of government in Kent.
The leader of Kent county council wrote to me last week and said:
"I am deeply aware of the public's growing concern about gypsies in Kent."
The director of development services and the deputy chief executive of Maidstone borough council—not a Conservative council—wrote to me and said:
"I can only presume that advice which the Inspectorate is now receiving from the Government is leading to the very lenient approach…Local residents are being severely disadvantaged."
A representative of the parish council in the area in my constituency most affected, Headcorn, wrote and said:
"My council"—
that is Headcorn—
"is very concerned that it is the Government Department which is causing the increasing problem of the concentration of gypsy sites. My council is dismayed at what appears to be a change in planning policies by the Inspectorate in favour of those with gypsy origins. There is clear discrimination against other residents."
So what is the background to the problem? Kent has traditionally been an area popular with gypsies. It is largely rural, or was in the past. It has beautiful
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Countryside—after all, it is the garden of England—and has plentiful casual labour, particularly in the seasonal fruit-picking industry. There has therefore always been enormous pressure for sites, particularly across the Weald. One can see that in areas like Yalding, Headcorn, Sutton Valence and Chart Sutton. As a result, Maidstone borough council, which only covers a small part of the Weald, has 44 per cent. of the private gypsy site provision in the county of Kent—a staggeringly large proportion.
These days Kent is, of course, no longer a predominantly rural county supported by an agricultural economy. Furthermore, Government policy is encouraging housebuilding across Kent. It is now less easy to support the lifestyles of the gypsy community and far less easy to explain to existing householders why gypsies should be a special case.
Maidstone borough council, which has 44 per cent. of the gypsy site provision across Kent, only covers a small part of the Weald. Its particular problem is further exacerbated by the fact that the whole of the northern part of the borough, in effect the north downs, is an area of outstanding natural beauty. Government policy specifically discourages the provision of gypsy sites in such areas, and there is enormous pressure on the very fragile environment on the Weald. Despite that, Maidstone borough council has fulfilled the requirements of Government circular No. 1/94. In the 1993 local plan and the December 2000 borough-wide local plan, it set out criteria-based policies to indicate how it would provide for gypsy sites.
The problems in the last couple of years are threefold. First, gypsies have started to buy land, move on to it illegally and gain planning permission. They have been able to do that because the Government planning inspector is now granting permission and overturning the borough council's decisions.
Secondly, a large number of gypsy caravans are moving on to land owned by a gypsy who has permission for only one caravan. One can see that problem at the moment in places such as Redhill stables on the Lenham road in Headcorn and Pear orchard in Yalding. The lives of residents in those areas are being made a misery.
Thirdly, large numbers of gypsy caravans, often numbering 30 or 40, are moving to Kent and camping illegally on private land. The High Court is not allocating enough time for urgent hearings to allow local borough councils to evict illegal occupiers of private land.
I want to focus on the first of those problems this afternoon, the consequences of which are obvious. The countryside where gypsies stay is ruined. Remember that that part of the country is well known as the garden of England. The quality of life for existing residents declines very quickly. I have constituents who are unable to open their windows during the summer because a gypsy site across the road burns tyres all day long. House prices in those areas suffer and fall very quickly, for the obvious reason that people do not want to buy houses with gypsy sites around them.

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I regret to say this, but there has been a certain amount of low-level intimidation of residents. An old-age pensioner, who is just over 90, objected to a gypsy site next door to his house and found a knife on his doorstep the next morning. Two old-age pensioners live just off the Lenham road, opposite a gypsy site that allows two rottweilers to roam free. The rottweilers came across the road and through the hedge, and nearly killed the pensioners' pet terrier. The pensioners are now afraid to go out in their garden during the summer. Also, of course, the crime rate has risen.
The cause of those problems, which is very clear to me as the constituency MP and to local parish councillors, the borough council and Kent county council, is simply the actions of the Planning Inspectorate. We have reached a stage at which Maidstone borough council is unwilling to take any form of enforcement action against gypsies because it knows that it will lose on appeal.
The evidence for that is not only in the letters, about which I have talked this afternoon, that have been written to me, but in a parliamentary written answer from the Department for Transport, Local Government and the Regions, which disclosed that in 1996 only 19 per cent. of appeals were allowed by the inspectorate. In 2001, that figure had risen to 57 per cent. The reason why the figure increased is clear: the inspectors are accepting planning policy arguments against the granting of permission, but are allowing planning appeals for reasons such as the Human Rights Act 1998 or personal circumstances relating to individual gypsies.
An extremely good example of that is the recent appeal decision in the case of Greengates, Lenham road, Headcorn, Kent. The inspector, Miss Katie Peerless, states:
"Therefore, I consider that, on balance, the proposed development conflicts both with Development Plan policies designed to protect the countryside and Special Landscape Area and also those aimed at providing suitable sites for gypsy caravans. If no other material consideration were found to outweigh the presumption against the proposals, then the appeal would be dismissed."
However, she goes on to allow the appeal.
That flies in the face of Government planning policy guidance notes, which indicate that personal circumstances will seldom be such as to set aside development plan policies. Furthermore, I very much doubt that the Human Rights Act was ever intended to set aside planning policies that have evolved through the full democratic process, or to provide for what amounts to positive discrimination in favour of an ethnic group.
I therefore ask the Minister to accept that the change in the actions of the Planning Inspectorate over the past three or four years has favoured gypsies. Evidence of that is in the findings of Kent county council, borough councils throughout the Weald, parish councils and in my observations as a constituency MP. If that is not enough, it has also been proved in a parliamentary written answer. I ask the Minister to accept that that situation is unfair to existing local residents. There can be no reason why gypsies should be allowed to develop housing in a manner denied to non-gypsy people. That must be unjust.
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Has there been any change in the Government guidelines given to the Planning Inspectorate? If there has, when was it announced? If there has not, I ask the Minister to undertake to write to the inspectorate and ensure that the correct guidelines are properly interpreted in future. That will place both gypsies and local residents on an equal and fair footing under planning law.
1.42 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): I congratulate the hon. Member for Faversham and Mid-Kent (Hugh Robertson) on securing the debate, and on raising some important issues about gypsies and the planning system, particularly in relation to Kent. I hope to deal with many of his points.
The Government recognise that gypsies have a right to pursue their lifestyle and are committed to ensuring that the planning system treats members of that community as fairly as everybody else. The notion, spurious or otherwise, that the planning system provides de facto rights to any particular group, or that such rights exist for the gypsy community, is a nonsense. At best, the hon. Gentleman has offered casual empiricism as evidence of that; at worst, he has provided one parliamentary answer, which I suspect has been taken wholly out of context. He would have been better served to have gone through each and every case covered by the parliamentary answer to find some substance to give me, but substance came there none.
I repeat that no de facto rights have emerged over recent years in relation to the treatment of gypsies or anybody else under the law. The hon. Gentleman himself alluded to the fact that the root of much of our current planning policy is in Government circular No. 1/94 on gypsy sites and planning, with the emphasis very much on the "94". The legal and statutory framework for dealing with gypsies in this country under the planning system has been, and remains, that outlined in the 1994 circular.
I am not disparaging of the experience faced by the hon. Gentleman's constituents—I have heard of similar cases on numerous occasions and have experienced them in my own constituency. However, I was almost waiting to hear mention of the lone gunman on the grassy knoll in what became a nasty, over-politicised conspiracy theory about everything shifting since Labour came to office. From what I know of the hon. Gentleman, that is utterly unworthy of him. If there are difficulties with the reaction of the communities in his area of Kent to what prevails under the planning system, there are better ways of raising them than the way in which he did so, which was wholly and utterly unworthy.
Hugh Robertson: Will the Minister give way on that point?
Mr. McNulty: Once.
Hugh Robertson: The Minister should accept—he almost said so, but not quite—that at no stage did I say that that had occurred as a result of the 1997 election. I merely gave the figures that the Minister's own

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Department had produced, showing that in 1996 19 per cent. of appeals were allowed and in 2001 that figure had risen to 57 per cent. I went on to say that I had been asked to raise the matter by parish councils, borough councils and Kent county council. If the Minister thinks that I dreamt it up last night as a clever political scam, he is simply mistaken.
Mr. McNulty: I do not want to be overly contentious, but if that is the best the hon. Gentleman can do, he is, at best, naive and, at worst, duplicitous—
Mr. Deputy Speaker (Mr. John McWilliam): Order.
Mr. McNulty: I beg your pardon, Mr. Deputy Speaker. The hon. Gentleman is, at worst, misguided. He cannot quote at length from Headcorn parish council saying that it is a huge conspiracy and has changed since Labour came to office, and then quote from Maidstone borough council, which said in a totally and utterly disreputable way—I shall check up on that when I leave the debate—that it is not bothering with enforcement any more. Is that supposed to be serving the community in the Maidstone borough? The council, not the Planning Inspectorate or the Office of the Deputy Prime Minister, should be ashamed of itself. It has fiduciary, public policy and other duties, and the letter of the law to carry out and should do so. I shall check in Hansard to see what the hon. Gentleman said. If Maidstone borough council's policy, explicit or otherwise, when it should be enforcing eviction powers is that it cannot be bothered because it might lose on appeal, that is to its shame. It is irrelevant to me what its political persuasion is.
Mr. John Baron: Will the Minister give way?
Mr. McNulty: No. I will not. It is common courtesy in this place when intervening during a 30-minute debate to give notice to both sides in advance. I have had no such notice from the hon. Gentleman, so I shall not give way.
Mr. Deputy Speaker: Order. It is actually common courtesy to give notice to the hon. Member introducing the debate, the Minister and the Chair.
Mr. McNulty: Absolutely, and that has not been forthcoming, so I will not give way.
The key point is that the regulatory framework remains as it always has been. There is no positive discrimination towards any group in the planning process and to say so with such flimsy and casually empirical evidence undermines not only the hon. Gentleman, but the Planning Inspectorate. I had the great pleasure, as one of my first duties only last week, of visiting the Planning Inspectorate and I looked deep into the bowels of the machine to see what it does. I have nothing but the highest regard for it.
There are three key elements in our policy on gypsies and travellers. All are about to come to fruition and one that has already done so is the announcement of this year's round of the three-year plan for gypsy site refurbishment grants, because we are keen to obviate the
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need for anyone to move on to unauthorised and illegal encampments. Secondly, because it has been less than clear what provision is required for the community, two bodies of research will probably be published before the summer, which we hope will inform not just local government but central Government. Thirdly, in the very near future, as part of the three prongs of policy on travellers, we shall issue renewed and updated guidance, which the hon. Gentleman should read at his leisure with great care and attention. I hope that within that new guidance the notion of rights and responsibilities for all parties will be clear and explicit.
Those three elements will not only inform how we go forward but enable us, working with responsible local government, to deal with the issue with a degree of parity all round. I am very pleased that the hon. Gentleman started from the premise that he has no objection, violent or otherwise, to the gypsy community. Implicit in his remarks was the recognition that it has the same rights as every other community. However, the issues of illegal, unauthorised encampments and of where some members of the community buy land are very real.
The Planning Inspectorate's powers are determined in accordance with the requirements of section 54A of the Town and Country Planning Act 1990, as amended, which states that applications and appeals should be determined in accordance with the development plan unless material considerations indicate otherwise.
If planning permission is refused by the local planning authority or an enforcement notice is served in order to remedy a breach of planning control, there is a right of appeal to the First Secretary of State. That right of appeal is an integral and long-established part of the planning system. Given that, by definition, someone always has to lose an appeal, there will always be aggrieved parties. However, having had 11 years' experience on a planning committee, I would suggest that planning authorities and everyone involved would like the world to be as clear cut as the hon. Gentleman seems to suggest it should be.
The vast majority of appeals are transferred to inspectors to determine on the First Secretary of State's behalf. When inspectors are instructed to hold inquiries on behalf of the First Secretary of State, or appointed to determine appeals, they stand in the shoes of the First Secretary of State and must have regard to his policies. Each inspector, in exercising the duty of making a recommendation or determining an appeal, is technically a tribunal.
It is a basic principle that in an appeal or other case in which an inspector is instructed or appointed, there should be no evidence or policy advice relevant to the case before the inspector that is not also available to all the parties.
The Planning Inspectorate has an impressive reputation in its handling of planning appeals. The integrity, impartiality and fairness with which each appeal is handled are widely acknowledged. Every issue that is a material consideration in assessing a proposal, whether of local or national importance, is taken into account by an inspector at appeal stage. As I said, the hon. Gentleman knows that I cannot refer specifically to any of the cases that he has outlined.

139WH
Through the inspectorate's work, disputes between individuals and public authorities are resolved taking into account the provisions of the Town and Country Planning Act 1990, as amended, any other legislation relevant to the inspectorate's casework, the First Secretary of State's policies and, where relevant, the development plan.
Government policies on relevant areas of environmental concern—not just those directly related to town and country planning matters—may also be taken into account. It is for the inspector to weigh up often conflicting considerations and to make a decision. It is very much a balancing exercise and one that the Planning Inspectorate carries out in an extremely fair and robust fashion.
Inspectors bring their own experience, expertise and common sense to bear in interpreting and weighing the evidence before them. Like the decisions of judicial tribunals, inspectors' decisions or recommendations must flow from the evidence before them, not from any external source. In all cases planning inspectors are fully briefed on the circumstances of the appeal proposal and will visit the site to familiarise themselves with its location and surroundings. Each decision is reached, therefore, only after careful consideration of all the relevant planning issues, including the likely effect of the proposed development on the surrounding area, and taking into account the views of the local planning authority and local residents.
The Planning Inspectorate aims for the highest quality in the way that it handles casework and in the speed and quality of its decisions. The Franks principles of openness, fairness and impartiality continue to be the watchwords under which all decisions are taken. However, as nearly all decisions go against at least one of the parties involved in the appeal, the inspectorate knows that it will also receive complaints.
I have explained my absolute confidence in the integrity of the planning inspectors and the way in which the inspectorate handles planning cases. I do not feel, therefore, that there is any need to write to them in the terms suggested by the hon. Gentleman. I say that as someone who has been on the wrong end of what I
140WH
considered to be perverse decisions during my 11 years as a councillor on a planning committee. I do not, even as a Minister, speak out of any great love for the inspectorate—I simply recognise its objectivity, integrity and, above all, professionalism.
As the hon. Gentleman may know, the Advisory Panel on Standards in the Planning Inspectorate—APOS—is an independent body that advises the First Secretary of State on the maintenance and enhancement of professional standards in the Planning Inspectorate. Members are volunteers drawn from the legal, surveying, planning, architectural, engineering and other relevant professions.
In advising the First Secretary of State, the panel investigates issues that may impinge on the quality of Planning Inspectorate decisions, such as the number of planning inspectors and their training and administrative support. The latest annual report to the First Secretary of State confirmed that the ministerial target on quality for the year 2000–01 had been met. It concluded that the inspectorate
"demonstrated to us their commitment to maintaining, and where possible, improving their standard of service across the very wide range of activities—99 per cent. of their casework was free from justified complaint."
To answer the hon. Gentleman's suggestions, therefore, I do not believe that various de facto rights have been merged, and there is no legal context in which that could happen because of inspectorate decisions. The inspectorate does not exercise positive discrimination on behalf of the Government or of its own volition, and, given the flimsy evidence presented in the debate, I see no virtue in writing to it in any capacity.
As I said at the beginning, I fully recognise the gypsy community's concerns about site provision, with all that flows from that, and the real dislocation and hardship that illegal and unauthorised encampments can cause.
In conclusion, I suggest that the hon. Gentleman looks to his own lights and to the assorted authorities—from Headcorn and Maidstone to Kent county council—that serve the same area that he does. He should remonstrate with them, and get them to use their powers under the law as effectively as they can.
Question put and agreed to.
Adjourned accordingly at four minutes to Two o'clock.

INTERNATIONAL DEVELOPMENT

  Refugees
  Mr. Wray
  To ask the Secretary of State for International Development(a) how much and (b) what forms of aid have been provided by her Department to help refugees and displaced persons in (i) Armenia,(ii) Azerbaijan and (iii) Georgia. [66353]

  Clare Short
  The table sets out, by country and by purpose, the support my Department has provided to help refugees in the south Caucasus since 1999 (the first year in which direct assistance with the refugee problem was provided).

  £

  Humanitarian

  Naturalisation Community development

  Conflict prevention

  Armenia

  2000

  —

  660,000

  —

  2001

  —

  —

  18,150

  Azerbaijan

  1999

  208,500

  —

  —

  2000

  240,000

  70,000

  2001

  —

  —

  18,150

  Georgia

  1999

  97,850

  —

  250,620

  2000

  100,000

  100,000

  124,145

  2001

  —

  —

  180,000

  My Department also provided block funding to UNHCR totalling £9.46 million in 2000–01 (the latest year for which figures are available). It is not possible to make a direct attribution, but a proportion of this funding will have supported the UNHCR refugee programmes in the south Caucasus.

  Mr. Wray
  To ask the Secretary of State for International Development what discussions she has had with(a) UN, (b) Russian and (c) EU representatives regarding the refugee situation in (i) Armenia, (ii) Azerbaijan and (iii) Georgia. [66355]

  Clare Short
  Regular discussions are held with UNDP, UNHCR and UNFPA about the progress of south Caucasus refugee programmes to which my Department has contributed. My Department also responds to appeals made by those agencies on a case-by-case basis.

  There has been no discussion of the issue with representatives from the Russian Federation, nor any substantive discussion with the European Union.

  Mr. Wray
  To ask the Secretary of State for International Development what discussions she has had with(a) Armenian, (b) Azeri and (c) Georgian authorities regarding (i) the refugee situation, (ii) the return of people to their homes and (iii) improving living conditions in the refugee camps. [66354]
  314W
  Clare Short
  My Department's assistance towards alleviating the refugee problem in Armenia, Azerbaijan and Georgia is directed through the Red Cross, UN agencies and non-governmental organisations.

  Discussions with the Governments of the region are therefore wholly concerned with reviewing the progress of those programmes to which my Department has contributed.

CULTURE, MEDIA AND SPORT

  National Stadium
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport (1) if she will place in the Library a copy of correspondence between Ministers and officials in her Department and Mr. Ken Bates on the subject of(a) Wembley National Stadium Ltd. and (b) an English national stadium since 1 May 1997; [58115]

  (2) if she will place in the Library a copy of correspondence between Ministers and officials in her Department and the (a) chairman and (b) directors of Wembley National Stadium Ltd. since 1 May 1997. [58114]

  Mr. Caborn
  [holding answer 21 May 2002]No. Such correspondence is covered by the exemptions set out in Part II of the Code of Practice on Access to Government Information which cover third party commercial confidences and information given in confidence. This is in line with the practice observed by previous Governments. My right hon. Friend the Secretary of State has already placed in the Library of the House an exchange of correspondence between herself and Sir Rodney Walker, the then chairman of Wembley National Stadium Ltd., in answer to a question from my hon. Friend the Member for Brentford and Isleworth (Ann Keen) on 14 February 2002,Official Report, columns 597–98W. This exchange contained an explanation of the Government's commitment to the project for the benefit of WNSL's then bankers and others who were or might become involved in the Football Association's project. Given it was essentially a public commitment, my right hon. Friend considered it important that Parliament should see its contents. This was done with the consent of Wembley National Stadium Ltd.

  Historic Buildings (Public Access)
  Mr. Gareth Thomas
  To ask the Secretary of State for Culture, Media and Sport (1) what action the Government are taking to link receipt of funding to improve buildings of historical interest to increased access for members of the public; and if she will make a statement; [63938]

  (2) which properties in London have received funding from (a) English Heritage and (b) the Heritage lottery fund in each of the last 10 years for improvement works; and how many of these properties allow access to members of the public for (a) one day a year, (b) one week a year and (c) more than one week a year. [63937]

  Dr. Howells
  [holding answer 24 June 2002]Over the last 10 years English Heritage has grant-aided 295 properties in London. Of these 166 were administered under the Historic Buildings and Monuments Act 1953. These grants are conditional on the provision of public
  315W
  access. The level of access depends on the circumstances of the case and the size of the grant. Opening arrangements for the properties which receive grants are available on English Heritage's website at www.english-heritage.org.uk and in "Hudson's Historic Houses and Gardens" directory.

  Grants to the remaining 129 properties were administered under the Town and Country Planning Act 1990 and the Local Government Act 1985 for exterior work and essential structural repairs. These grants were to Grade II listed buildings or buildings in conservation areas. There is no automatic access requirement, although some of these properties are open to the public.

  Since 1994 the Heritage lottery fund has made 238 awards to historic buildings in London. Public access is an important consideration in awarding grants. The Heritage lottery fund recognises the central role of access in achieving its overall aim to use heritage funding to improve people's quality of life. The organisation is committed to developing the widest possible constituency for heritage, and to promoting access, equality of opportunity and inclusion in all activities.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport if she will list the EU directives relating to her Department which have been(a) amended and (b) repealed in 2002. [64944]

  Dr. Howells
  Council directive 93/7/EEC on the return of cultural objects unlawfully removed from the territory of a member state was amended by directive 2001/38/EC of the European Parliament and of the Council.

  Council Regulation (EEC) No. 3911–92 on the export of cultural goods was amended by Council Regulation (EC) No. 974–2001.

  No EU directives relating specifically to my Department have been repealed in 2002.

  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport 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. [64994]

  Dr. Howells
  Directive 2001/38/EC of the European Parliament and of the Council, which amended Council directive 93/7/EEC on the return of cultural objects unlawfully removed from the territory of a member state, was implemented by SI 3972–2001 which came into force on 1 January 2002. There was no cost to public funds.

  Ice Rinks
  Mr. Alan Campbell
  To ask the Secretary of State for Culture, Media and Sport how many ice rinks have(a) closed and (b) opened since 1995. [65528]

  Mr. Caborn
  Three ice rinks have closed since 1995, one each in Sunderland, Stevenage and Richmond. The ice rink in Altrincham is due to close in April 2003.
  316W
  Three ice rinks have also opened since 1995, one each in Nottingham (National Ice Centre), Coventry and Birmingham. A fourth ice rink is due to open in Sheffield in May 2003.

  National Lottery
  Miss McIntosh
  To ask the Secretary of State for Culture, Media and Sport when she will make a statement on the review of procedures for the allocation of the operating licence for the National Lottery provider. [65742]

  Mr. Caborn
  We published last week a consultation document setting out a number of possible changes to the future licensing and regulation of the Lottery which is available on the DCMS website at www.culture.gov.uk Copies may also be obtained, free of charge, from the Department.

  Tourism (Lancashire)
  Mr. Pike
  To ask the Secretary of State for Culture, Media and Sport how many tourists visited Lancashire in the last year. [65609]

  Dr. Howells
  Provisional figures from the Office for National Statistics show that in 2001 210,000 visits were made to Lancashire. Overnight stays in the county are shown as 1.4 million and visitor spend is £56 million.

  Digital Television
  Mr. Yeo
  To ask the Secretary of State for Culture, Media and Sport if she will make an assessment of the benefits to the consumer of a digital terrestrial television service being(a) wholly free to air and (b) partly free to air and partly pay. [65463]

  Dr. Howells
  [holding answer 1 July 2002]The licences surrendered by ITV digital have been re-advertised by the Independent Television Commission. I understand that the ITC have received six applications. Some of the applicants propose a wholly free to air service, other a mix of free to air and pay channels. Decisions on the licence awards are not a matter for the government but for the ITC which aims to announce the new licensees by 4 July.

  Clarence House
  Norman Baker
  To ask the Secretary of State for Culture, Media and Sport what the projected cost is to public funds of the refurbishment of Clarence House; on what works public funds will be spent; and if she will make a statement. [65652]

  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.

  Broadband
  Mr. Connarty
  To ask the Secretary of State for Culture, Media and Sport what steps she is taking to publicise the benefits of access to broadband services. [61804]

  Mr. Timms
  I have been asked to reply.

  I am convinced that broadband services have an important role to play in increasing the competitiveness of the UK economy. I have therefore taken several opportunities to promote the benefits of broadband including by supporting the 'Demand: Broadband' campaign run by the Communications Workers Union.

  The UK Online Annual Report 2001 sets out the Government's broadband strategy. To stimulate demand for current broadband content and applications the Government will:
  work with the broadband supply industry to facilitate an industry-wide collaborative campaign to promote the benefits of broadband and give impartial advice on the different technological options available.
  provide more encouragement to small and medium enterprises (SMEs) to adopt e-commerce solutions. The DTI are now expanding the £66 million 'UK online for business' programme to:
  provide more effective advice to businesses on the introduction and setting up of e-business solutions, with particular emphasis on the benefits of broadband; and
  introduce a web-based guide to broadband availability for SMEs and a network of demonstrators of practical applications.

  We have also established a £30 million fund to help the Regional Development Agencies (RDAs) and devolved Administrations develop innovative schemes to extend broadband networks. Using this fund, some of the RDAs and devolved Administrations are carrying forward work which demonstrates the benefits of broadband.

  Estimate table

  £ million

  US

  UK

  Total

  Hybrid

  Previous estimate (2001) at 2000–01 economic conditions (£1:%1.6086)

  2,859

  6,904

  9,764

  Real changes

  +18

  +8

  +25

  Price inflation on unspent balance

  0

  +3

  +3

  Exchange rate variation on unspent balance

  +8

  n/a

  +8

  Revised estimate at 2001–02 economic conditions (£1:%1.46)

  2,884

  6,916

  9,800

  Non-hybrid

  Previous estimate (2001) at 2000–01 economic conditions (£1:%1.6806)

  3,604

  10,058

  13,662

  Real changes

  +18

  +8

  +25

  Price inflation

  +62

  +252

  +313

  Exchange rate variation

  +375

  n/a

  +375

  Revised estimate at 2001–02 economic conditions (£1:%1.46)

  4,059

  10,318

  14,376

  Note:

  Figures rounded to nearest £1 million hence any apparent imbalances.

  Ministerial Salaries
  Mr. Bercow
  To ask the Secretary of State for Defence what the annual cost was of ministerial salaries in his Department in(a) 1997–98 and (b) 2001–02. [60937]

  Mr. Ingram
  The level of ministerial salaries are recommended by the Senior Salaries Review Body. From May 1997, in the Ministry of Defence there was one

DEFENCE

  Trident Acquisition Programme
  Mr. Beard
  To ask the Secretary of State for Defence what the latest estimate is of the cost of the Trident Acquisition Programme; and if he will make a statement. [67206]

  Mr. Hoon
  The current estimate of the total acquisition cost of the Trident programme, with payments already made expressed at the prices and exchange rates actually incurred and future spend at the current financial year rate (the hybrid) estimate, is now £9,800 million. Since the 2001 estimate and leaving aside the effects of price inflation and exchange rate variation (+£11 million), there has been a real cost increase of £25 million. This increase derives principally from additional costs associated with dockyard projects and with missiles and related equipment, offset by a reduced acquisition cost for the four submarines. Expenditure on the Trident acquisition programme to 30 September 2001 represented over 98 per cent. of the total estimate. If all expenditure, past and projected, is brought up to this current year's economic conditions (the non-hybrid estimate) the estimate is £14,376 million.

  The programme continues to show an overall reduction in real terms on its original 1982 estimate. This reduction, including the savings resulting from the decision to process missiles at the United States facility at Kings Bay, Georgia, now stands at over £3.7 billion at current prices.

  The proportion of the estimate for work undertaken in the United Kingdom continues to be around 70 per cent.

  Three in-service Vanguard class submarines are successfully maintained for continuous at-sea deterrence, with the fourth, HMS Vanguard, now undergoing a planned major overhaul.

  Cabinet Minister, at an annual salary of £43,991; two Ministers of State, at a total annual salary of £82,963; and one Parliamentary Under-Secretary, at an annual salary of £23,623. From June 2001, there was one Cabinet Minister, at an annual salary of £68,157; one Minister of State, at an annual salary of £35,356; and two Parliamentary Under-Secretaries, at a total annual salary of £87,796.

  SA80A2 Rifle
  Mr. Jenkin
  To ask the Secretary of State for Defence if he will make a statement on the performance of the SA80A2 rifle in Afghanistan; and what faults have been reported. [66017]

  Mr. Ingram
  The SA80-A2 is operating in a very difficult environment in Afghanistan with both dusty conditions and extremes of temperature. To date, three formal equipment failure reports have been filed from Afghanistan; this under a 100 per cent. fault reporting regime. In an operational environment any concerns are treated very seriously and a specialist team on the ground in Afghanistan is investigating these reports as a matter of urgency.

  1997

  1998

  1999

  2000

  2001

  Unit

  F wing

  R wing

  F wing

  R wing

  F wing

  R wing

  F wing

  R wing

  F wing

  R wing

  Barkston Heath

  158.4

  0.2

  173.3

  0.1

  161.3

  0.1

  151.3

  0.3

  129.8

  0.1

  Benson

  103.4

  11.7

  106.3

  28.5

  112.9

  31.0

  74.8

  28.1

  70.6

  35.0

  Brize Norton

  102.4

  4.6

  95.1

  5.0

  93.5

  4.7

  87.5

  4.0

  81.7

  4.5

  Chetwynd

  0.1

  53.0

  0.0

  79.0

  0.0

  82.2

  0.0

  74.4

  0.0

  77.8

  Church Fenton

  75.0

  3.0

  128.6

  1.9

  139.6

  2.1

  150.2

  1.7

  156.8

  1.0

  Coltishall

  50.2

  2.2

  67.4

  1.3

  64.4

  1.1

  57.1

  1.2

  75.0

  1.3

  Coningsby

  128.0

  0.4

  122.5

  1.0

  101.4

  0.3

  83.6

  0.3

  80.3

  0.5

  Cosford

  77.5

  4.9

  58.6

  5.0

  64.7

  6.4

  69.2

  7.2

  61.2

  7.1

  Cottesmore

  87.1

  1.3

  107.7

  0.7

  50.7

  0.8

  56.7

  0.8

  69.1

  0.7

  Cranwell

  145.2

  0.7

  181.8

  0.7

  164.8

  0.8

  168.2

  0.8

  173.2

  0.5

  Culdrose

  25.9

  111.5

  24.4

  73.0

  24.9

  83.8

  21.4

  42.2

  24.5

  68.3

  Fairford

  —

  —

  0.5

  0.0

  0.0

  0.0

  0.0

  0.0

  0.4

  0.0

  Kinloss

  94.6

  3.1

  95.1

  3.4

  92.5

  3.3

  102.0

  3.2

  100.0

  2.5

  Lakenheath

  97.6

  0.5

  96.2

  0.3

  81.5

  0.4

  85.1

  0.0

  86.3

  0.0

  Leeming

  118.9

  4.7

  117.7

  5.0

  129.8

  4.0

  114.3

  4.1

  108.1

  3.4

  Leuchars

  98.3

  4.7

  93.9

  6.1

  92.9

  6.7

  89.5

  6.1

  85.6

  6.2

  Linton-on-Ouse

  125.0

  2.1

  122.8

  2.4

  157.8

  2.5

  139.6

  1.8

  145.5

  1.6

  Lossiemouth

  89.1

  5.2

  88.2

  5.6

  92.2

  4.8

  83.3

  4.6

  78.2

  5.2

  Lyneham

  122.8

  4.8

  131.4

  5.6

  134.1

  4.1

  107.1

  3.8

  95.0

  4.2

  Manston

  111.0

  5.2

  100.8

  4.1

  16.1

  1.4

  —

  —

  1.6

  7.6

  Marham

  47.9

  1.3

  49.2

  1.2

  46.3

  1.0

  45.5

  1.0

  46.9

  0.8

  Mildenhall

  —

  —

  —

  —

  —

  —

  62.8

  7.7

  60.2

  8.7

  Mona

  58.0

  0.8

  74.2

  0.9

  89.4

  0.3

  100.4

  3.3

  89.0

  0.2

  Northolt

  33.5

  5.9

  32.6

  5.4

  32.2

  5.0

  31.7

  5.0

  31.1

  5.0

  Odiham

  1.6

  50.3

  2.1

  40.7

  1.0

  38.2

  2.9

  41.8

  3.2

  49.4

  Scampton

  0.4

  0.0

  0.8

  0.0

  1.0

  0.0

  1.0

  0.0

  28.6

  0.1

  Shawbury

  3.7

  108.0

  4.1

  154.2

  3.8

  176.4

  3.8

  154.0

  4.3

  152.7

  St. Athan

  39.6

  0.6

  5.1

  0.8

  59.3

  0.5

  54.5

  0.7

  49.9

  0.8

  St. Mawgan

  42.6

  30.9

  41.1

  26.4

  44.2

  27.4

  44.9

  28.2

  45.4

  31.6

  Ternhill

  0.0

  72.6

  0.0

  105.0

  0.0

  95.4

  0.0

  80.8

  0.0

  77.8

  Topcliffe

  60.5

  0.4

  71.6

  0.7

  104.4

  1.4

  92.9

  1.1

  89.0

  1.0

  Valley

  138.1

  9.9

  143.7

  15.2

  162.7

  17.4

  143.1

  14.4

  170.7

  18.5

  Waddington

  60.0

  3.2

  58.6

  4.3

  58.5

  4.8

  63.0

  3.9

  59.2

  5.4

  Wittering

  72.3

  0.7

  83.8

  0.5

  73.2

  0.7

  62.9

  0.6

  63.4

  0.5

  Woodvale

  89.8

  0.2

  75.9

  0.6

  71.6

  0.5

  90.2

  0.6

  100.7

  1.8

  Wyton

  —

  —

  —

  —

  —

  —

  82.3

  1.9

  107.8

  2.3

  An aircraft movement can be a landing or a take-off and an aircraft may record a number of movements in any one sortie.

  Meteor Missile Programme
  Mr. Jenkin
  To ask the Secretary of State for Defence what recent representations he has received from Governments of the partner countries regarding the Meteor missile programme. [66022]

  Dr. Moonie
  My right hon. Friend the Secretary of State for Defence has not recently received any formal representations from the Governments of the partner

  RAF
  Angus Robertson
  To ask the Secretary of State for Defence what the daily average number of RAF aircraft movements was for each RAF base in the United Kingdom over the last five years; and if he will make a statement. [65200]

  Mr. Ingram
  The information in the format requested is not held centrally and could be provided only at disproportionate cost. The table details the daily average number of fixed wing and rotary wing aircraft movements over the last five years at current RAF stations. A number of the movements may have been aircraft belonging to the other services. At RAF Brize Norton, RAF Lyneham, RAF Northolt and RAF St. Mawgan, commercial aircraft movements are also included.

  countries regarding the Meteor missile programme. He has, however, taken every opportunity to discuss the project with his counterparts in the partner countries as the occasion has arisen.

  Mr. Jenkin
  To ask the Secretary of State for Defence on how many occasions the German Government have made representations to the British Government regarding the Meteor missile project. [66023]

  Dr. Moonie
  The German Government have made no formal representations to the UK Government since the United Kingdom selection of Meteor in May 2000, to salsify the requirement for a Beyond Visual Range Air
  321W
  to Air Missile for Eurofighter. There has, however, been regular dialogue between UK Ministers and officials and their German counterparts regarding the Meteor missile project.

  Mr. Jenkin
  To ask the Secretary of State for Defence (1) when he expects the Meteor missile programme to move into its development phase; [66021]

  (2) if he will make a statement on the future of the Meteor missile programme; [66020]

  (3) if he will make a statement on the Meteor missile programme; and if he expects them to be in service on time. [66040]

  Dr. Moonie
  A draft contract for the development and production of the Meteor missile was sent to our partner nations at the end of April following the conclusion of negotiations with the prime contractor MBDA. A revised and final draft contract was passed to our partners earlier this month. We very much hope that all partner nations will confirm within the next few weeks that they are content for the contract to be signed. Germany will need also to sign the Meteor Memorandum of Understanding, which has already been signed by the other five partner nations.

  Although negotiation of the Meteor contract has taken longer than expected, we assess that Meteor can achieve its planned in-service date with the RAF if the contract is awarded in the near future.

  Infantry
  Mr. Jenkin
  To ask the Secretary of State for Defence how many trained infantry there were in the Army in each year since 1997. [66028]

  Mr. Ingram
  The number of trained infantry in the Army in each year since 1997 are detailed in the table:

  Date of strength

  Officer

  Soldier

  Total

  1 January 1997

  2,673

  22,683

  25,356

  1 January 1998

  2,726

  22,741

  25,467

  1 January 1999

  2,748

  22,232

  24,980

  1 January 2000

  2,753

  22,385

  25,138

  1 January 2001

  2,783

  22,606

  25,389

  1 January 2002

  2,837

  22,619

  25,456

  Eurofighter
  Mr. Jenkin
  To ask the Secretary of State for Defence where the spare parts for Eurofighter will be stored; and if he will make a statement. [66018]

  Dr. Moonie
  Spare parts for the Royal Air Force Eurofighter fleet are essential to operations and many are classified as RESTRICTED and above and disclosure of their location could be prejudicial to national security. Therefore, 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.

  Armoured Regiments
  Mr. Jenkin
  To ask the Secretary of State for Defence which armoured regiments have been at(a) high readiness, (b) training year and (c) other tasks in each of the past three years. [66027]

  Mr. Ingram
  It is assumed that reference to armoured regiments refers to Royal Armoured Corps (RAC) tank regiments and not Armoured Infantry (IA) Battalions. Those regiments that have been at(a) high readiness, (b) training year and (c) other tasks in each of the past three years are shown in the tables:

  Formation readiness cycle(FRC)

  Armoured tank regiment

  2002

  High readiness

  The Royal Dragoon Guards (RDG)King's Royal Hussars (KRH)

  Training

  Royal Scots Dragoon Guards (SCOTS DG) Queen's Royal Lancers (QRL)

  Other tasks

  The Queen's Royal Hussars (QRH) 2 Royal Tank Regiment(2 RTR)

  2001

  High Rediness

  The Queen's Royal Hussars (QRH) 2 Royal Tank Regiment (2 RTR)

  Training

  The Royal Dragoon Guards (RDG)King's Royal Hussars (KRH)

  Other tasks

  Royal Scots Dragoon Guards (SCOTS DG) Queen's Royal Lancers (QRL)

  20011

  High Readiness

  Royal Scots Dragoon Guards (SCOTS DG)

  Training

  The Queen's Royal Hussars (QRH)

  1 The Formation Readiness Cycle (FRC) as a mechanism to deliver these units at readiness was in its infancy in 2000, hence the declaration of just two armoured regiments, rather than the full six.

  Mr. Jenkin
  To ask the Secretary of State for Defence if the Royal Armoured Corps is at establishment strength in personnel. [66026]

  Mr. Ingram
  The establishment and strength of the Royal Armoured Corps (RAC) and the Household Cavalry (HCAV) as at 1 May 2002 is detailed in the table:

  Trained strength against liability for HCAV/RAC as at 1 May 2002

  Officer

  Soldier

  Total

  Liability

  855

  5,023

  5,878

  Strength

  835

  4,940

  5,775

  Difference

  –20

  –83

  –103

  Difference (percentage)

  –2.3

  –1.7

  –1.8

  Manning statistics for the RAC are currently grouped with the HCAV. Work is in progress to provide separate totals for the HCAV and the RAC. I will write to the hon. Member when these figures are available and a copy of my letter will be placed in the Library of the House.

  Armoured Vehicles
  Mr. Jenkin
  To ask the Secretary of State for Defence how many(a) MBTs and (b) AFVs are held in reserve. [66025]

  Mr. Ingram
  There are no Challenger 2 main battle tanks nor other armoured fighting vehicles specifically designated as reserve stock. The greater proportion of the vehicles that make up the fleets are held on the
  323W
  war-fighting establishment. The remainder are either held for training and trials or are undergoing planned maintenance programmes.

  Mr. Jenkin
  To ask the Secretary of State for Defence what the recommended establishment number of main battle tanks is for an armoured regiment. [66024]

  Mr. Ingram
  The establishment of main battle tanks in an armoured regiment is 58, although the number allocated to each regiment at any given time is dictated by its role in any one year.

  Fishing Patrols
  Mr. Jenkin
  To ask the Secretary of State for Defence (1) what agreements his Department has with DEFRA in relation to the number of days per year Royal Navy fishery protection vessels must be on patrol; and if he will make a statement; [66037]

  (2) how many days on fishery patrol naval vessels have undertaken for MAFF/DEFRA in each of the past five years; [66038]

  (3) when HMS Shetland completed her last fishery protection patrol; and when she will be paid off; [66036]

  (4) when HMS Tyne will carry out her first operational fishery patrol. [66039]

  Mr. Ingram
  The Royal Navy carry out fishery protection duties under an agreement with the Department for Environment, Food and Rural Affairs. The current arrangements run from April 2002 until March 2008. For the current year the Royal Navy has agreed to provide a total of 950 days of fishery protection. This figure is reviewed and agreed annually.

  In each of the last five years the Royal Navy carried out the following number of patrol days:

  Number

  2001–02

  957

  2000–01

  977

  1999–2000

  979

  1998–99

  1,104

  1997–98

  1,130

  HMS Shetland completed her final fishery protection patrol on 28 June 2002. She will be paid off at the end of July. On current plans, HMS Tyne will carry out her first operational fishery protection patrol in January or February 2003.

  Lynx
  Mr. Jenkin
  To ask the Secretary of State for Defence how many Lynx Mk 8 are operational. [66034]

  Mr. Ingram
  As of 2 July 2002, there are 24 operational Lynx Mk 8 helicopters.

  Harrier
  Mr. Jenkin
  To ask the Secretary of State for Defence what evaluation his Department has made of the Harrier II plus programme; and for what reasons he has proceeded with an upgrade of the Harrier GR7 to GR9 specification rather than capabilities offered by Harrier II plus. [66031]
  324W
  Mr. Ingram
  As I made clear in my answer on 28 February 2002,Official Report, columns 1451–52W to the hon. Member for Broxtowe (Dr. Palmer), the Harrier GR7 is being upgraded to GR9 standard as this best meets our capability requirements. The Ministry of Defence has not conducted a formal evaluation of the capabilities offered by the Harrier II plus programme, but understands that the main capability difference between the Harrier GR9 and the Harrier II plus is in the latter's nose-mounted radar.

  While it would, in theory, be possible to mount a radar in the nose of the GR9, we currently have no requirement to do so. Therefore, no detailed work has been undertaken by the MOD into the practicality and cost-effectiveness of such a modification.

  Such a programme would be at least as complex, lengthy and costly as the Sea Harrier Blue Vixen/ AMRAAM update in the mid-90s. Given the likely considerable cost, time scale and technical risk involved, and the planned entry into service of the Future Joint Combat Aircraft in 2012, the benefits of integrating a radar on to the GR9 Harrier would be of limited duration and utility. Such a programme would also delay the integration of the smart weapons on to the Harrier GR9 required to enable it to continue to conduct its primary role of the delivery of offensive air power from land and sea.

  Munitions Depots
  Mr. Key
  To ask the Secretary of State for Defence what the anticipated remediation costs will be, including munitions and chemical retrieval, prior to the market sale of Dean Hill munitions depot; and when he expects to put it on the market. [65734]

  Mr. Ingram
  Defence Munition (DM) Dean Hill's primary task is (and has been) the storage of munitions. The limited (compared to other Defence Munitions sites) processing facilities at the Dean Hill site have primarily been used for maintenance of munitions and associated stores. There has been no explosives manufacturing on site and hence little anticipated contamination to remediate. This has been confirmed by Land Quality Assessment action and a sum of £216,000 has been included in the Investment Appraisal to cover any "industrial site" remediation identified as necessary during run down and closure activities.

  It is anticipated that Defence Estates will market the sale of the Dean Hill site in 2004–05 once all closure activities have been completed.

  Mr. Key
  To ask the Secretary of State for Defence how many Ministry of Defence police are employed at West Dean Munitions Depot; and how they will be deployed following the closure of the depot. [65706]

  Mr. Ingram
  There are currently 21 MDP officers stationed at Defence Munitions (DM) Dean Hill. DM Dean Hill is scheduled for closure by 1 April 2004 and the MDP officers stationed there will be subject to redeployment procedures. We do not envisage any compulsory redundancies of MDP officers.
  325W
  Mr. Key
  To ask the Secretary of State for Defence how many of the employees at the West Dean Munitions Depot are(a) under 25, (b) under 45, (c) under 60 and (d) over 60 in each category, broken down by sex. [65707]

  Mr. Ingram
  The age profile and gender of the bearing of 57 Defence Munitions civilian staff currently employed at DM Dean Hill near West Dean village in south Wiltshire is as follows:

  Age

  Male

  Female

  Total

  Under 25

  4

  1

  5

  26 to 45

  119

  4

  23

  46 to 60

  18

  6

  24

  Over 60

  5

  —

  5

  Total

  46

  11

  57

  1Includes two members of civilian staff on long term detached duty due to return to DM Dean Hill.

  Golden Jubilee
  Hywel Williams
  To ask the Secretary of State for Defence what the estimated cost is of the tri-service Jubilee celebrations held on 27 June. [66164]

  Mr. Ingram
  In accordance with the wishes of Buckingham Palace and the direction of the Government it was agreed that there would be no undue expenditure from public funds. The sum of £1.5 million was allocated from the budget of the Royal Naval Base Commander, Portsmouth, towards core project costs and any additional costs will lie where they fell. It will be some months before an accurate assessment of this expenditure could be made, but it will consist primarily of additional travel and subsistence costs.

  Defence Assistance
  Dr. Cable
  To ask the Secretary of State for Defence which countries received expenditure under the(a) defence military assistance fund and (b) the defence assistance fund in (i) 1997–98, (ii) 1998–99, (iii) 1999–2000, (iv) 2000–01 and (v) 2001–02; how much each country received in each year from (A) the defence military assistance fund and (B) the defence assistance fund; how much was used to support defence sales in each case; and if he will make a statement. [66553]

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

  Sudan
  Mr. Dawson
  To ask the Secretary of State for Defence how many personnel his Department has contributed to monitoring the Nuba ceasefire in Sudan. (65659]

  Mr. Ingram
  One British colonel was deployed to Sudan in May of this year to act as deputy vice chairman of the joint military mission monitoring the Nuba mountain ceasefire.

  Medical Treatment
  Mr. Keetch
  To ask the Secretary of State for Defence, pursuant to the answer of 21 June 2002,Official Report, column 597W, on medical treatment, on what date the Army Training and Recruitment Agency secondary health
  326W
  care initiative commenced and with what budget; by what criteria personnel are treated under the scheme; how many personnel in (a) the Army, (b) the Navy and (c) the RAF have been treated under the initiative and at what cost to his Department in each month since commencement; which health care providers have been used under the scheme; and if he will make a statement. [65569]

  Mr. Ingram
  The Army Training and Recruiting Agency's (ATRA) secondary health care initiative was formally introduced on 1 April 2001 and the Budgetary sum allocated for the financial year 2001–02 was £1.3 million. Personnel eligible for treatment under the scheme are ATRA trainers or trainees who are referred by their unit general practitioner for investigation, opinion and/or treatment for a condition which is preventing them from continuing with their employment/training. Personnel are referred only when waiting lists at the local Ministry of Defence hospital unit or NHS hospital are deemed excessive. The vast majority of these are Army personnel; a small number of RN and RAF personnel might have been included who were posted to ATRA units, either as trainers or trainees, but these cannot be readily identified. Records held do not allow for numbers treated per month to be easily identified, as an individual may well be treated over a period and therefore feature in more than one month's figures. The costs per month since inception are as follows:

  Month

  Numbers treated

  Cost (£)

  April 2001

  —

  35,035

  May 2001

  —

  61,201

  June 2001

  —

  88,289

  July 2001

  —

  77,286

  August 2001

  —

  97,995

  September 2001

  —

  93,581

  October 2001

  —

  129,601

  November 2001

  —

  79,544

  December 2001

  —

  100,397

  January 2002

  —

  136,503

  February 2002

  —

  159,605

  March 2002

  —

  150,262

  Total financial year 2001–02

  1,351

  1,209,299

  April 2002

  —

  169,047

  May 2002

  —

  129,788

  June 20021

  —

  42,701

  Total financial year 2002–031

  435

  341,435

  1To 15 June

  The healthcare providers utilised under this scheme have been:

  BMI

  BUPA

  Nuffield Trust

  Caprio

  Independent

  NHS.

  The initiative has proved successful in reducing the average waiting time for both consultation and treatment, enabling trainers and trainees to return to work or training more quickly. The scheme is kept under constant review.

  RAF Fylingdales
  Dr. Tonge
  To ask the Secretary of State for Defence what new agreements have been reached regarding the Ballistic Missile Early Warning Station at RAF Fylingdales following the end of the 1972 ABM Treaty. [66684]

  Mr. Ingram
  None.

  Bereaved Services Families
  Mr. Wray
  To ask the Secretary of State for Defence what support is given to the widows and families of servicemen who have died. [66362]

  Mr. Ingram
  The Ministry of Defence operates a comprehensive Casualty and Compassionate Reporting Policy that extends from the moment of casualty notification all the way through to making arrangements for stress counselling for partners, offering advice on eligibility for pensions, compensation or other financial support and helping with relocation arrangements for surviving dependants.

  The MOD also provides an annual Grant-in-Aid to the Remembrance Travel Department of The Royal British Legion in respect of the War Widows Pilgrimage Scheme. The scheme provides financial assistance to any Service widow, whose husband died and was buried overseas between 1914 and 1967, to visit her husband's grave. The Grant contributes 7/8ths of the cost of a pilgrimage organised by Remembrance Travel and to date has benefited over 4,000 widows. The scheme has recently been extended to 31 March 2005.

  Support to the bereaved partners and family of ex-service personnel also comes from the Soldiers, Sailors, Airmen and Families Association—Forces Help (SSAFA-FH) and the Armed ForceBenevolent organisations for whom the MOD has the utmost appreciation. We are very conscious of the tireless and highly professional way these organisations assist their former colleagues and know how greatly their efforts are valued both by the present Service community and by ex-Servicemen and women.

  Ex-servicemen
  Mr. Wray
  To ask the Secretary of State for Defence what support the Government are giving to voluntary organisations that help ex-servicemen. [66363]

  Mr. Ingram
  In keeping with the practice that central Government do not provide funding in direct support of charities' core activities, the Ministry of Defence does not provide any direct financial support to the ex-Service voluntary organisations as they are independent ofgovernment and responsible for raising their own funding through private donations.

  Nevertheless, the MOD does provide annual Grants-in-Aid to The Royal British Legion's Benevolent Department to assist with the welfare they provide to distressed Polish ex-Servicemen and also to Remembrance Travel, the Pilgrimage Department of The Royal British Legion. This money is used to fund the War Widows Pilgrimage Scheme which enables Service widows to visit the graves of their husbands who were buried overseas between 1914 and 1967. Finally, a
  328W
  Grant-in-Aid is given to the Victoria Cross and George Cross Association every two years to assist with the travel costs associated with their biennial reunion.

  Balkans
  Mr. Jenkin
  To ask the Secretary of State for Defence what representations he has received from the US Administration concerning the International Criminal Court and the continued deployment of US forces in the Balkans. [64814]

  Mr. Straw
  I have been asked to reply.

  I have been and continue to be in close touch with my US counterpart on this issue, and in particular in respect of draft UN Security Council resolutions renewing the UNMIBH/SFOR mandate for UN peacekeeping forces in Bosnia. My hon. Friend the Member for Rotherham (Mr. MacShane) also discussed the issue with representatives of the State Department and the National Security Council in Washington last week.

  The Government are committed to an effective International Criminal Court. We understand US concerns for their peacekeepers but do not share them. We believe that the Rome statute contains effective safeguards which make it inconceivable that peacekeepers will be, investigated or prosecuted by the Court when national investigations or procedures are being carried out. We are working hard with the US and other members of the Security Council to achieve a mutually acceptable solution.

SOLICITOR-GENERAL

  Crown Prosecution Service
  Mrs. Curtis-Thomas
  To ask the Solicitor-General how many(a) lawyers, (b) caseworkers and (c) administrative staff were recruited in (i) 1999–2000, (ii) 2000–01 and (iii) 2001–02; and how many (A) lawyers, (b) caseworkers and (C) administrative staff were employed in the same period in each CPS region. [59656]

  The Solicitor-General
  The information requested is in tables, copies of which have been placed in the Library.

  Mrs. Curtis-Thomas
  To ask the Solicitor-General if she will make a statement on the inappropriate attribution of agents' costs to the CPS non-cash limited vote. [60214]

  The Solicitor-General: The CPS is responsible for the payment of fees to counsel agents engaged to prosecute in magistrates courts. Counsel agents attend magistrates courts to undertake routine prosecution work to supplement advocacy by CPS prosecutors. This work is paid for from the cash limited administrative costs budget. In some cases, where specialist advocacy is required, or exceptional preparation time is needed or a case is likely to be lengthy, a special fee is negotiated with counsel and paid from the non-cash limited prosecution costs provision.

  In their quarterly report to the Law Officers for July to September 2001, HM CPS Inspectorate commented on the inappropriate attribution of costs to the non-cash limited prosecution costs provision by some areas. Following receipt of that report, further guidance was issued to area business managers in December 2001.
  329W
  Mrs. Curtis-Thomas
  To ask the Solicitor-General what action is being taken in each CPS region to develop qualitative and quantitative performance indicators. [60215]

  The Solicitor-General: The Crown Prosecution Service maintains qualitative performance indicators, both locally and nationally, consisting of records of case outcomes and a measure of attrition within the CPS case load. Procedures are under development to provide local area managers with a standard to measure the quality of case work against which will mirror, to an extent, those used by HM CPS Inspectorate. The CPS also maintains a range of quantitative performance indicators showing the timeliness of key functions such as the delivery of briefs to counsel, the service of committal papers, witness expense payments, the payment of invoices, replies to complaints, and replies to MPs' correspondence.

  The implementation of the Compass Case Management system from December 2003 will enable an important expansion of the Department's range of information.

  Mrs. Curtis-Thomas
  To ask the Solicitor-General what externally approved quality standards have been gained by each CPS region, with specific reference to BS5750 ISO 9000. [60206]

  The Solicitor-General
  ISO 9000 is not one of the `Quality Schemes' used by the Crown Prosecution Service to measure the quality of its processes in meeting the needs and expectations of its customers. The Crown Prosecution Service is using the European Foundation for Quality Management (EFQM) Excellence Model. This is a comprehensive framework used by a large number of organisations from across Europe both in the public and private sector to assess the strengths and areas of improvement across all its business activities.

PRIME MINISTER

  Belfast, South
  Rev. Martin Smyth
  To ask the Prime Minister when he next plans to visit Belfast, South. [64197]

  The Prime Minister
  I have no plans to visit the hon. Gentleman's particular constituency in the near future.

  No. 10 Downing Street
  Mr. Collins
  To ask the Prime Minister what expenditure was incurred by(a) the No 10 Press Office, (b) the Strategic Communications Unit and (c) the Research and Information Unit (i) in the latest available year and (ii) in 1997. [63583]

  The Prime Minister
  For the No. 10 Press Office, I refer the hon. Member to the answer I gave the hon. Member for West Chelmsford (Mr. Burns) on 10 April 2002,Official Report, column 11W.

  For the Strategic Communications Unit (SCU), I refer the hon. Member to the answer I gave the hon. Member for Lewes (Norman Baker) on 23 October 2001, Official Report, column 142W. SCU did not exist in 1996–97.

  The total cost of running the Research and Information Unit (R&I) for the financial year 2000–01 was £432,556. Research and Information provides a single information
  330W
  resource at No. 10, providing policy briefing, library resources and reference material for the Prime Minister and No. 10 staff. R&I did not exist in 1996–97.

  Mr. Collins
  To ask the Prime Minister how many staff (full-time equivalents) were employed by(a) the No. 10 Press Office, (b) the Strategic Communications Unit, (c) the Research and Information Unit, (d) the GICS Development Centre, (e) the Media Monitoring Unit and (f) the News Co-ordination Centre (i) in the latest available year and (ii) in 1996–97. [63581]

  The Prime Minister
  For information on the No. 10 Press Office, I refer the hon. Member to the answer I gave the hon. Member for West Chelmsford (Mr. Burns) on 10 April 2002,Official Report, column 11W.

  As at 1 April 2002, there were eight members of staff in the Strategic Communications Unit. The unit did not exist in 1996–97.

  As at 1 April 2002, there were eight members of staff in the Research and Information Unit. The unit did not exist in 1996–97.

  Staff numbers in the GICS Development Centre have fluctuated. As at 1 April 2002, there were 16 members of staff. On 1 April 1996 there were 16 members of staff; by 1 April 1997, following cutbacks in its marketing activities and the training and development support it provided to GICS members, the unit had been reduced to eight members of staff.

  Following the Mountfield review of the GICS in 1997, which stressed the importance of high quality staffing, training and development and the exchange of best practice across the service,the unit has gradually returned to its previous staffing level as it has expanded its services to meet this wider remit.

  As at 1 April 2002, there were 12 members of staff in the Media Monitoring Unit. The unit did not exist in 1996–97.

  The News Co-ordination Centre has members of staff drawn from the Civil Contingencies Secretariat in the Cabinet Office. It is activated in an emergency or crisis, to provide a support and co-ordination role for the lead Government Department, when it is augmented by staff from other Departments. The NCC did not exist in 1996–97.

  Annual Leave
  Mr. Bercow
  To ask the Prime Minister what the average annual leave entitlement is for staff in his Office in 2002. [64647]

  The Prime Minister
  I refer the hon. Member to the answer given to him by my hon. Friend the Minister for the Cabinet Office today, Official Report, column 388W.

  Summits (UK Delegations)
  Dr. Tonge
  To ask the Prime Minister how many people attended the G8 meeting in Calgary in June from UK Government Departments; and what the total cost of the visit was. [66225]

  The Prime Minister
  I was accompanied by my noble Friend Baroness Amos and 25 officials. It was one of the smallest delegations.
  331W
  Since 1999 the Government have published an annual list of all overseas visits undertaken by Cabinet Ministers costing £500 or more during each financial year. The list for the period 1 April 2002 to 31 March 2003 will be published as soon as possible after the end of the current financial year.

  Dr. Tonge
  To ask the Prime Minister how many people attended the Commonwealth Heads of Government meeting in March from UK Government Departments; and what the total cost of the visit was. [66226]

  The Prime Minister
  Since 1999 the Government have published an annual list of all overseas visits undertaken by Cabinet Ministers costing £500 or more during each financial year. The list for the period 1 April 2001 to 31 March 2002, including the information requested, will be published as soon as possible.

  Official Histories
  Mr. Watts
  To ask the Prime Minister what further official histories are planned. [67112]

  The Prime Minister
  I have appointed Professor Rodney Lowe of Bristol University as the official historian to write the official history of the Civil Service since Fulton. I have also agreed to a list of topics for future official histories, as follows:

  Privatisation

  The Criminal Justice System

  Chevaline

  Devolution

  Policy towards the former Yugoslavia

  The D Notice System

  A Biography of Desmond Morton.

  Sir David Omand
  Mr. Beith
  To ask the Prime Minister who will exercise day-to-day ministerial responsibility for the work to be designated to Sir David Omand in the fields of propriety, ethics and constitutional affairs; and whether he will report to(a) the Cabinet Secretary and (b) other Ministers on these matters. [65568]

  The Prime Minister
  On Sir Richard Wilson's retirement, Sir David Omand will lead on propriety, ethics and constitutional issues for which he will be responsible to the next Secretary of the Cabinet and Head of the Home Civil Service, Sir Andrew Turnbull, who will report to the Prime Minister.

DEPUTY PRIME MINISTER

  Local Government
  Lynne Jones
  To ask the Deputy Prime Minister and First Secretary of State what Government sources of funding can be used for local government services. [64161]

  Mr. Leslie
  There are several sources of funding which Government provide for local government services. Revenue grants fund day-to-day running costs other than housing. The Government have increased such Government grants by some 20 per cent. in real terms 332W
  since taking office. Housing is funded through Housing Revenue Account Subsidy and housing grants. Capital expenditure for both housing and other needs is supported through borrowing and credit arrangements and through capital grants provided by central Government.

  Mr. Neil Turner
  To ask the Deputy Prime Minister and First Secretary of State what progress is being made on a replacement formula for funding of local government; and if he will make a statement. [64166]

  Mr. Leslie
  As announced by my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) to Parliament earlier this month, we intend to consult on detailed options for a new system by mid July. We will then implement the new system in time for financial year 2003–04.

  Mr. Soley
  To ask the Deputy Prime Minister and First Secretary of State what plans he has to introduce proposals to increase the powers and responsibilities of local authorities. [64175]

  Mr. Leslie
  The Local Government Act 2000 already empowers local authorities to do anything likely to promote or improve the economic, social or environmental well-being of their area. Proposals from the local government White Paper are included in the draft Local Government Bill which my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) launched for consultation earlier this month. For example, it includes powers to trade and to charge for discretionary services.

  Social Housing
  Dr. Evan Harris
  To ask the Deputy Prime Minister and First Secretary of State what assessment he has made of the reasonableness of limits on the prices of houses that can be bought by local authorities for use for social housing in high house price areas. [64162]

  Mr. McNulty
  The Government impose no limit on the prices of houses that can be bought by local authorities for social housing purposes. The hon. Gentleman may be referring to a system of total cost indicators, which the Housing Corporation operates as a benchmark for assessing the value for money of social housing development schemes funded through social housing grant.

  Single Equality Commission
  Paddy Tipping
  To ask the Deputy Prime Minister and First Secretary of State what plans he has to establish a single equality commission. [64163]

  Mrs. Roche
  I recently announced the start of a project to consider the feasibility of, and options for, a single equality body in Great Britain. I refer my hon. Friend to the reply I gave to my hon. Friend the Member for Bristol, East (Jean Corston) on 14 May 2002,Official Report, column 566W.

  Asylum Accommodation
  Mr. Luff
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on his Department's policy on the planning process in relation to the establishment of asylum accommodation centres. [64164]
  333W
  Mr. McNulty
  The Deputy Prime Minister's policy is to adhere to the procedures set out in part IV of the memorandum to DoE circular 18/84. These require the developing Department to serve a notice of proposed development on the local planning authority.

  Regional Government
  Mrs. Anne Campbell
  To ask the Deputy Prime Minister and First Secretary of State what representations he has received from local government leaders on his White Paper on regional governance. [64165]

  The Deputy Prime Minister and First Secretary of State
  I have received a number of representations from local government, many of them welcoming our White Paper, "Your Region, Your Choice".

  Mr. Liddell-Grainger
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on the role counties will have in regional government. [64167]

  The Deputy Prime Minister and First Secretary of State
  I refer the hon. Gentleman to my answer in response to the hon. Member for Faversham and Mid-Kent (Hugh Robertson).

  Mr. Chope
  To ask the Deputy Prime Minister and First Secretary of State when he will bring forward legislation to allow for referendums on the Government's proposals for regional government in England. [64174]

  The Deputy Prime Minister and First Secretary of State
  I cannot pre-empt future Queen's Speeches. But we intend to introduce a Bill to provide for referendums when parliamentary time allows, so that the first assembly referendum(s) can be held during this Parliament.

  Mr. Laurence Robertson
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on his plans to create regional assemblies. [64178]

  The Deputy Prime Minister and First Secretary of State
  I refer the hon. Member to the statement I made on 9 May 2002,Official Report, columns 275–78. The full detail of our plans to create elected regional assemblies can be found in the White Paper "Your Region, Your Choice", which is in the Library of the House. We are now working to take these plans forward.

  Dr. Murrison
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on the future of county councils in the Government's plans for regional government in England. [64179]

  The Deputy Prime Minister and First Secretary of State
  I refer the hon. Gentleman to my earlier answer in response to the hon. Member for Faversham and Mid Kent (Hugh Robertson).

  Mr. Prisk
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on his Department's proposals for regional government affecting Hertfordshire. [64180]

  Mr. Leslie
  Our proposals for regional government and how this will affect all areas of England are set out in the White Paper "Your Region, Your Choice". Copies are in the Library of the House.
  334W
  Mr. Andrew Mitchell
  To ask the Deputy Prime Minister and First Secretary of State what proposals he has for a west midlands regional assembly. [64182]

  The Deputy Prime Minister and First Secretary of State: Our proposals for elected assemblies in all the regions of England are set out in the White Paper "Your Region, Your Choice". Copies are in the Library of the House.

  Business Improvement Districts
  Ross Cranston
  To ask the Deputy Prime Minister and First Secretary of State what steps he is taking to implement business improvement districts. [64168]

  Mrs. Roche
  In the White Paper, "Strong Local Leadership—Quality Public Services", published in December, we detailed our scheme for enabling those places which want to introduce business improvement district arrangements to do so. Implementation requires legislation and the draft Local Government Bill, published on 12 June, contains the necessary primary legislation.

  Corporate Governance Inspection Reports
  Mr. Sanders
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on corporate governance inspection reports. [64169]

  Mr. Leslie
  Corporate governance inspection is a powerful diagnostic tool in determining the corporate and managerial capabilities of a council. A total of 15 corporate governance inspections have taken place since April 2000, and their findings reported to the authorities. These inspections have helped inform the corporate assessment model introduced as part of the comprehensive performance assessment.

  Housing Market Renewal Fund
  Ian Stewart
  To ask the Deputy Prime Minister and First Secretary of State what progress has been made in setting up a housing market renewal fund. [64170]

  Mr. McNulty
  The idea of a housing market renewal fund was proposed last autumn by the National Housing Federation, Key Cities Housing Group and the Northern Housing Forums, against a backdrop of severe housing market failure in parts of the country. We are considering the proposal in the context of the current spending review.

  However, we are in no doubt that we must address the problem of low demand housing, which underlies the fund proposal. That is why we have invited nine areas, where the problems are most acute, to work with Government establishing pathfinder projects to tackle low demand. We are making available £25 million from the Capital Modernisation Fund to assist the pathfinder projects in vital preparatory work.

  Urban Poverty
  Gillian Merron
  To ask the Deputy Prime Minister and First Secretary of State what role his Department has in tackling urban poverty. [64171]

  Mrs. Roche
  The Government are committed to tackling poverty wherever it is found. Within the Office of the Deputy Prime Minister, the Social Exclusion Unit, the Urban Policy Unit, the Neighbourhood Renewal Unit
  335W
  and Government Offices play a crucial role in the Government's work to tackle poverty, both in urban areas and elsewhere. The Department's work on local government, regional policy and housing and planning also makes a critical contribution in this area.

  Housing
  Sue Doughty
  To ask the Deputy Prime Minister and First Secretary of State how many new affordable homes were built in the UK in the past 12 months. [641721

  Mr. McNulty
  I refer the hon. Member to the answer given by my right hon. Friend the Member for Tyneside, North (Mr. Byers) to the hon. Member for Newbury (Mr. Rendel) on 21 May 2002,Official Report, column 137.

  Rent Restructuring
  Mr. Coleman
  To ask the Deputy Prime Minister and First Secretary of State what discussions he has had with local authorities and registered social landlords regarding the Government's future plans for rent restructuring implementation; and if he will make a statement. [64173]

  Mr. McNulty
  The Government have consulted fully with local authorities and housing associations at all stages in the development of rent restructuring and will continue to do so.

  In particular, we have recently issued a consultation paper on further changes to the Housing Revenue Account subsidy system to support rent restructuring.

  Planning
  Dr. Julian Lewis
  To ask the Deputy Prime Minister and First Secretary of State Minister if he will make a statement on the future role of county councils in planning decisions. [64176]

  Mr. McNulty
  In our consultation paper 'Planning: delivering a fundamental change', published last December, we set out proposals for abolishing structure plans as an unnecessary tier of planning. We invited views on the future role that the counties might play in the planning system in addition to their transport, minerals and waste responsibilities. We are considering the responses made and hope to make a statement this summer. These proposals do not alter the role of the county councils in determining county matter planning applications.

  Mr. Hoban
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on the operation of the planned local planning advisory service. [64181]

  Mr. McNulty
  The idea of a local planning advisory service was mooted in the Planning Green Paper—"Planning: delivering a fundamental change". We will be making a statement on progress with implementing the Planning Green Paper in due course.

  Mr. Andrew Turner
  To ask the Deputy Prime Minister and First Secretary of State if he will make a statement on responses to the Government's proposals for planning. [64183]
  336W
  Mr. McNulty
  The Government have received over 16,000 responses to the consultation on the Green Paper "Planning—delivering a fundamental change". We will be making a statement on the outcome of the consultation in due course.

  Homelessness
  Richard Ottaway
  To ask the Deputy Prime Minister and First Secretary of State what steps he is taking to alleviate homelessness; and if he will make a statement. [64177]

  Mrs. Roche
  We have adopted a new approach which focuses as much on the problems homeless people face as the places they live. Our specific measures include £125 million investment this year to tackle homelessness, and new legislation to strengthen the assistance to people who are homeless or at risk of being homeless.

  Franchise
  Mr. Martlew
  To ask the Deputy Prime Minister and First Secretary of State what his plans are for reducing the voting age to 16; and if he will make a statement. [62690]

  Yvette Cooper
  I have been asked to reply.

  We have no plans to propose legislation to lower the voting age. We would, however, welcome a public debate on the issue. It is also open to the Electoral Commission to consider it and make recommendations for future policy.

  Bed-and-Breakfast Accommodation
  Mr. Pickles
  To ask the Deputy Prime Minister and First Secretary of State what progress has been made on achieving the Government's objective that no child should be living in bed-and-breakfast accommodation by 2004; and if he will make a statement. [65993]

  Mr. McNulty
  In March 2002 a £35 million programme was launched to help local authorities ensure that by March 2004 no homeless family with children is in bed-and-breakfast hotels (B&B) other than in an emergency, and even then for no more than six weeks.

  The 44 authorities with the highest number of families with children in B&B were required to submit bed-and-breakfast action plans showing how they will meet the March 2004 commitment. On 17 June £25 million was allocated to these authorities to help them implement their B&B plans. We will now be working with the next 40 highest using authorities to see how we can help them reduce B&B numbers. We will be monitoring closely the progress of all authorities.

  All local authorities will benefit from recent changes to housing benefit subsidy levels, worth up to £10 million. which provide an incentive to lease private sector homes as a better quality alternative to B&B hotels. Authorities have also been sent a 10–point check list of good practice outlining the key 'building blocks' we expect every authority to have in place to deliver reductions in B&B hotel use. Regional B&B 'Good Practice' seminars have been held and examples of good practice have been shared through a newsletter and are posted on the ODPM website.

  Mobile Phone Masts
  Mr. Norman
  To ask the Deputy Prime Minister and First Secretary of State who is on the Working Group established to take forward and monitor the operation of the revised Code of Best Practice on Mobile Phone Masts. [66444]

  Mr. McNulty
  The Telecommunications Working Group is chaired by the Head of the Department's Development Control Policy Division and comprises representatives of the mobile phone network industry and of central and local government.

  Renewal Fund
  Mr. Kidney
  To ask the Deputy Prime Minister and First Secretary of State what guidance his Department gives to participants in projects involving funding from the(a) Neighbourhood Renewal Fund. (b) New Deal for Communities and (c) Housing Market Renewal Fund relating to private renting. [63911]

  Mr. McNulty
  The Office of the Deputy Prime Minister issues guidance relating to the use of grant from the Neighbourhood Renewal Fund in the form of a Special Grant report, one of which is specifically drafted and laid before Parliament for debate and approval prior to each financial year throughout the lifetime of the fund. Special Grant report No. 78 specifies the purpose and allocations of funding and the conditions for use of the grant in 2001–02 and Special Grant report No. 93 sets out the corresponding purpose, allocations and conditions in 2002–03. Copies of the reports are placed in the House of Commons Library, sent to Neighbourhood Renewal Fund grant recipients and made available on the Office of the Deputy Prime Minister's website.

  The New Deal for Communities grant is provided under section 126 of the Housing Grants, Construction and Regeneration Act 1996 and section 2 of the Employment and Training Act 1973. The Office of the Deputy Prime Minister makes NDC guidance available on its website, including:

  Learning Lessons: Pathfinders' Experiences of NDC Phase 1

  Phase 1 Proposals Guidance for Applicants

  Developing Delivery Plans

  Finance Guidance

  Developing and Testing Ideas

  Gathering Baseline Information

  Outcomes and Milestones

  Support and Advice

  New Deal for Communities and the Single Regeneration Budget-Project Appraisal and Approval

  New Deal for Communities Annual Review 2000–01

  NDC Project Appraisal and Approval Guidance

  Forward Strategies

  Delivering Change

  Monitoring. Review and Evaluation

  Race Equality Guidance.

  The idea of a housing market renewal fund was proposed last autumn by the National Housing Federation, Key Cities Housing Group and the Northern Housing forums, against a backdrop of severe housing market failure in parts of the country. We are considering the proposal in the context of the current spending review.
  338W
  However, we are in no doubt that we must address the problem of low demand housing, which underlies the fund proposal. That is why we have invited nine areas, where the problems are most acute, to work with Government establishing pathfinder projects to tackle low demand. We are making available £25 million from the Capital Modernisation Fund to assist the pathfinder projects in vital preparatory work. We have not issued guidance in relation to this funding, but limited criteria must be met before it can be drawn down.

TREASURY

  Private Pension Funds
  Mr. Hoban
  To ask the Chancellor of the Exchequer if he will estimate the total value of private pension funds. [63398]

  Ruth Kelly
  [holding answer 1 July 2002]The information requested falls within the responsibility of the National Statistician.I have asked him to reply.

  Letter from John Pullinger to Mr. Mark Hoban, dated 3 July 2002:
  The National Statistician has been asked to reply to your parliamentary question on the total value of private pension funds. I am replying in his absence. [63398]
  The market value of the funds held by self-administered pension funds was £765 billion at the end of 2000. These are occupational pension funds where the funds are invested in one or more managed schemes or unit trusts.
  The total value of private pension funds is not available. Private pension funds held by long-term insurance companies are not distinguished from other funds, such as life assurance, within the total long-term fund of the insurance sector on which data are collected by the Office for National Statistics.

  Mortgage Tax Relief
  Mr. Steen
  To ask the Chancellor of the Exchequer if he will introduce mortgage tax relief for first-time buyers in rural areas. [66151]

  Ruth Kelly
  The Government have no plans to reintroduce mortgage interest tax relief.

  VAT
  Brian Cotter
  To ask the Chancellor of the Exchequer what the average time taken was to issue a VAT number for a new business once an application has been filed over the last 12 months. [65718]

  John Healey
  Customs does not maintain statistics on the average time taken to issue a VAT number and it would involve disproportionate cost to produce this information.

  Customs work to a Charter Standard for the processing of applications for VAT registration, requiring 95 per cent. of properly completed applications to be processed within 15 working days of receipt. For 2001–02 Customs received over 180,000 applications for registration and achieved the Charter Standard.

  Green Minister
  Sue Doughty
  To ask the Chancellor of the Exchequer who his Department's Green Minister is; when they
  339W
  (a) have attended and (b) plan to 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. [65983]

  John Healey
  I am HM Treasury's Green Minister. I was appointed to the ENV(G) committee in June this year.

  Following the general election in June 2001, the previously informal Green Ministers Committee was upgraded to a Cabinet Sub-Committee of ENV and it is established practice under exemption 2 of Part II of the Code of Practice on Access to Government Information not to disclose information relating to the proceedings of Cabinet Committees. Therefore I cannot relate progress or outcomes by my Department to anything that has been discussed.

  Cancer
  Mr. Bruce George
  To ask the Chancellor of the Exchequer if he will list the incidence rates of cancers for the last five years. [66660]

  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 3 July 2002:
  As National Statistician, I have been asked to reply to your Parliamentary Question on the incidence rates of cancers for the last five years. (66660).
  The latest available information on trends in the incidence rates of cancers for England was published in table 10 in "Cancer Statistics: registrations 1998" Series MB1 No.29, a copy of which is available in the House of Commons Library.

  Buildings Value
  Mr. Bercow
  To ask the Chancellor of the Exchequer if he will list the buildings owned by his Department and estimate the market value of each of them. [66948]

  Mr. Boateng
  The National Asset Register, published in July 2001 (Cm5221), lists assets owned by each Department and their valuation.

  Statutory Instruments
  Mr. Bercow
  To ask the Chancellor of the Exchequer 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. [64629]

  Dawn Primarolo
  HM Treasury, HM Customs and Excise and the Inland Revenue have introduced 44 statutory instruments; removed none and introduced 22 amendment instruments since 1 January 2002. Many of the instruments concerned were of a routine nature, for example approving annual fee increases.

  The HMSO SI Registrar Siregistrar@cabinet-office.x.gsi.gov.uk can provide a list of statutory instruments which have been issued by individual Government Departments. SIs which have been originated by Departments but eventually made by the Privy Council are only listed under the Privy Council Office.
  340W
  The costs associated with regulatory proposals are considered at the policy development stage. A Regulatory Impact Assessment is completed for regulatory proposals unless there are no or negligible costs. HM Treasury, HM Customs and HM Inland Revenue have produced 13 final RIAs in this period: Implementation of the E-Commerce Directive; Financial Services and Markets Act 2000 Administration Orders Relating to Insurers Order 2002 ("the Order"); Implementation of the electronic money directive; National Insurance Contributions Bill; Fuel Scale Charge; Reform of Intangible Assets; Construction Industry Scheme; R&D Tax Credits for large companies/ vaccines research relief; Exemptions for gains and losses on substantial shareholdings; Reform of theCorporate Debt, Financial Instruments and Foreign Exchange gains and losses regimes; community amateur sports club; VAT: Introduction of a Flat Rate Scheme and Changes to the Annual Accounting Scheme and Oils Fraud Strategy. These are available in the House Libraries and are availableon departmental websites.

  National Insurance (Reduced Rate)
  Mr. Webb
  To ask the Chancellor of the Exchequer how much was paid in aggregate in national insurance contributions by married women paying at the reduced rate in each of the last 30 years. [65744]

  Dawn Primarolo
  Available estimates of the amount of reduced rate contributions paid by married women over the last 27 years are in the table.

  Contributions paid by women paying at the reduced rate (£ million)

  1975–76

  90

  1976–77

  100

  1977–78

  110

  1978–79

  110

  1979–80

  120

  1980–81

  130

  1981–82

  190

  1982–83

  220

  1983–84

  60

  1984–85

  260

  1985–86

  260

  1986–87

  260

  1987–88

  250

  1988–89

  250

  1989–90

  240

  1990–91

  230

  1991–92

  220

  1992–93

  200

  1993–94

  170

  1994–95

  160

  1995–96

  140

  1996–97

  120

  1997–98

  100

  1998–99

  90

  1999–2000

  60

  2000–01

  50

  2001–02

  25

  Estimates for 1975–76 to 2000–01 are based on a 3 per cent. sample of the National Insurance Recording System and are rounded to the nearest £10 million.The estimate for 2001–02 was provided by the Government Actuary's Department and has been rounded to the nearest £5 million.

  Recycled Paper
  Sue Doughty
  To ask the Chancellor of the Exchequer what proportion of(a) paper and (b) other goods purchased by his 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 he will make a statement. [65769]

  Ruth Kelly
  The Treasury in all cases purchases on a best value for money basis. Until recently the cost and quality of recycled paper did not provide this compared to virgin paper from sustainable sources and therefore only limited amounts were purchased.

  Recycled paper appears to have improved in both quality and price. It is now the intention of the Department to look again at this issue. If recycled paper currently offers best value for money overall, Treasury will purchase this as the main source of its paper.

  Asthma
  Mrs. Brooke
  To ask the Chancellor of the Exchequer how many deaths due to asthma occurred in each primary care trust in each of the last three years; and if he will make a statement. [66264]

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

  Letter from Len Cook to Ms Brooke, dated 3 July 2002:
  As National Statistician, I have been asked to reply to your question on how many deaths due to asthma occurred in each Primary Care Trust (PCT) in each of the last three years. (66264)
  PCTs took over the responsibilities of Health Authorities on 1st April 2002, but the geographical definition of all PCT areas has not yet been completed. Mortality statistics for PCT areas are not available at present. The figures requested are available for Health Authorities, the three most recent years being 1998–2000, and these have been placed in the House of Commons Library.

  Deaths from asthma by health authority, 1998–2000

  Number

  Health authority

  1998

  1999

  2000

  Avon

  42

  52

  28

  Barking and Havering

  16

  16

  20

  Barnet, Enfield and Haringey

  30

  34

  34

  Barnsley

  30

  32

  10

  Bedfordshire

  20

  46

  28

  Berkshire

  32

  28

  36

  Bexley. Bromley and Greenwich

  40

  34

  32

  Birmingham

  66

  62

  60

  Bradford

  32

  24

  32

  Brent and Harrow

  12

  30

  20

  Buckinghamshire

  32

  20

  30

  Bury and Rochdale

  20

  14

  16

  Calderdale and Kirklees

  50

  32

  20

  Cambridgeshire

  20

  22

  30

  Camden and Islington

  12

  16

  14

  Cornwall and Isles of Scilly

  22

  20

  24

  County Durham and Darlington

  44

  24

  54

  Coventry

  18

  18

  32

  Croydon

  20

  14

  22

  Doncaster

  30

  24

  10

  Dorset

  38

  26

  40

  Dudley

  30

  14

  6

  Ealing, Hammersmith and Hounslow

  34

  30

  34

  East Kent

  50

  46

  18

  East Lancashire

  18

  30

  24

  East London and The City

  34

  22

  38

  East Riding and Hull

  46

  42

  32

  East Surrey

  20

  20

  28

  342W

  Deaths from asthma by health authority, 1998–2000

  Number

  Health authority

  1998

  1999

  2000

  East Sussex, Brighton and Hove

  40

  52

  36

  Gateshead and South Tyneside1

  12

  20

  16

  Gloucestershire

  26

  20

  32

  Herefordshire

  20

  14

  8

  Hertfordshire

  42

  48

  40

  Hillingdon

  8

  12

  24

  Isle of Wight, Portsmouth and South-East Hampshire

  48

  48

  30

  Kensington and Chelsea and Westminster

  6

  26

  10

  Kingston and Richmond

  30

  24

  24

  Lambeth, Southwark and Lewisham

  34

  22

  32

  Leeds

  18

  24

  30

  Leicestershire

  34

  32

  16

  Lincolnshire

  14

  34

  36

  Liverpool

  22

  38

  16

  Manchester

  18

  10

  22

  Merton, Sutton and Wandsworth

  44

  32

  38

  Morecambe Bay

  16

  16

  20

  Newcastle and North Tyneside

  16

  16

  28

  Norfolk

  50

  34

  26

  North and East Devon

  26

  20

  28

  North and Mid Hampshire

  30

  32

  14

  North Cheshire

  12

  6

  14

  North Cumbria

  28

  16

  12

  North Derbyshire

  16

  12

  10

  North Essex

  50

  64

  46

  North Nottinghamshire

  16

  36

  20

  North Staffordshire

  16

  20

  32

  North-West Lancashire

  30

  64

  20

  North Yorkshire

  32

  28

  38

  Northamptonshire

  32

  26

  40

  Northumberland

  26

  22

  22

  Nottingham

  48

  26

  26

  Oxfordshire

  30

  32

  34

  Redbridge and Waltham Forest

  6

  16

  26

  Rotherham

  10

  4

  14

  Salford and Trafford

  22

  24

  30

  Sandwell

  16

  14

  24

  Sefton

  12

  20

  16

  Sheffield

  24

  18

  44

  Shropshire

  26

  14

  6

  Solihull

  4

  16

  8

  Somerset

  32

  8

  24

  South and West Devon

  46

  26

  44

  South Cheshire

  36

  22

  18

  South Essex

  30

  30

  38

  South Humber

  12

  46

  16

  South Lancashire

  12

  10

  12

  South Staffordshire

  26

  14

  30

  Southampton and South West Hampshire

  32

  28

  32

  Southern Derbyshire

  26

  52

  24

  St. Helens and Knowsley

  8

  24

  14

  Stockport

  14

  24

  12

  Suffolk

  30

  26

  22

  Sunderland1

  8

  20

  —

  Tees

  30

  26

  14

  Wakefield

  26

  52

  28

  Walsall

  26

  18

  24

  Warwickshire

  20

  36

  32

  West Kent

  34

  24

  26

  West Pennine

  36

  20

  20

  West Surrey

  42

  18

  10

  West Sussex

  22

  34

  42

  Wigan and Bolton

  28

  24

  24

  Wiltshire

  30

  26

  38

  Wirral

  20

  12

  14

  Wolverhampton

  24

  24

  16

  Worcestershire

  20

  36

  16

  ———

  ———

  ———

  England

  2,538

  2,524

  2,372

  1 Figures for Sunderland in 2000 have been combined with Gateshead and South Tyneside because of small numbers.

  Source:

  Department of Health Compendium of Clinical and Health Indicators 1999–2001, based on data provided by the Office for National Statistics.

TRADE AND INDUSTRY

  Arms Exports
  Gregory Barker
  To ask the Secretary of State for Trade and Industry what her Department's policy was towards arms sales to(a) Pakistan and (b) India between December 2001 and June 2002. [65436]

  Nigel Griffiths
  I refer the hon. Member to the statements made by my hon. Friend the then Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs on 15 March 2002,Official Report, columns 1296–98W and by my noble Friend the Lord Sainsbury of Turville in another place on 28 May 2002, Official Report, House of Lords, columns 1147–49.

  Gregory Barker
  To ask the Secretary of State for Trade and Industry what discussions she has held since December 2001 with the Secretary of State for Defence regarding arms export licence grants to(a) India and (b) Pakistan. [65443]

  Nigel Griffiths
  I refer to the reply given by my right hon. Friend the Secretary of State for Defence on 2 July 2002,Official Report, column 230W.

  Gregory Barker
  To ask the Secretary of State for Trade and Industry what representations she has received regarding her Department's arms export application process and legal criteria for such exports to(a) India and (b) Pakistan in each month from December 2001 to June 2002. [65434]

  Nigel Griffiths
  My right hon. Friend the Secretary of State for Trade and Industry, the Department's Export Control Organisation and I have received representations regarding arms exports to India and Pakistan from a number of different sources, including Members of Parliament, exporters and the general public.

  The information requested is not held centrally and could be provided only at disproportionate cost.

  Green Minister
  Sue Doughty
  To ask the Secretary of State for Trade and Industry who her Department's Green Minister is; when they(a) have attended and (b) plan to attend meetings of the Green Ministers' Committee; what the outcomes of meetings were for her Department's activities; and if she will make a statement. [65988]

  Mr. Wilson
  I am DTI's Green Minister.

  Following the General Election in June 2001, the previously informal Green Ministers Committee was upgraded to a Cabinet Sub-Committee of ENV, and it is established practice under exemption two of Part II of the Code of Practice on Access to Government Information not to disclose information relating to the proceedings of Cabinet Committees.

  LPG Fuel
  Mr. Peter Duncan
  To ask the Secretary of State for Trade and Industry what steps she is taking to widen the availability of LPG fuel for motor vehicles. [65250]
  344W
  Mr. Wilson
  At the opening of the 1,000th LPG filling station in February this year I announced LPG Boost, a £1 million DTI funded programme over two years to boost the uptake of LPG as a vehicular fuel. This programme (in conjunction with DTLR funded PowerShift) is aimed at increasing awareness of LPG in rural areas and encouraging local specialist conversion workshops. I will be making a further announcement shortly.

  Military Equipment (Licences)
  Norman Lamb
  To ask the Secretary of State for Trade and Industry what licences have been granted in each of the last five years for equipment on the military list to(a) African countries, (b) Bolivia, (c) Guyana, (d) Honduras, (e) Nicaragua, (f) Laos, (g) Vietnam, (h) Myanmar and (i) Yemen, in receipt of aid; what equipment is covered under these licences; and if she will make a statement. [65258]

  Nigel Griffiths
  Details of all export licences for items on the military list issued since 2 May 1997 are published by destination in the Government's Annual Reports on Strategic Export Controls. Copies of the 1997,1998,1999 and 2000 Annual Reports are available in the Libraries of the House. The 2001 Annual Report will be published soon.

  In addition, items on the military list might have been exported under certain Open General Export Licences; copies of all Open General Export Licences are also placed in the Libraries of the House.

  Housing Associations
  Mr. Martlew
  To ask the Secretary of State for Trade and Industry what plans she has to change insolvency rules covering housing associations. [63949]

  Miss Melanie Johnson
  The Enterprise Bill proposes changes to insolvency regulation, which will affect housing associations to the extent that they fall within its scope.

  However, as announced by my noble Friend yesterday during the second reading of the Enterprise Bill, we will he bringing forward express exclusions to ensure that the provisions of the Bill will not extend to registered social landlords.

  Postal Services
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry if she will make a statement on the(a) statutory and (b) commercial status of Royal Mail; and to which (i) Ministers and (ii) other persons it will be accountable. [65072]

  Mr. Timms
  Consignia Holdings plc is a company formed and registered under the Companies Act 1985. The shares in the company are owned by the Government. On 26 March 2001, all the property, rights and liabilities of the Post Office were transferred to this company. Consignia Holdings has one wholly owned subsidiary, Consignia plc, which is also a company formed and registered under the Companies Act 1985. This subsidiary is licensed to provide a universal postal service in the UK.
  345W
  Under the Government's reform of postal services, Consignia Holdings plc and its subsidiary have been given greater commercial freedom than that enjoyed by the Post Office. My right hon. Friend the Secretary of State for Trade and Industry holds a special share in Consignia Holdings plc and the Memorandum and Articles of Association sets out the areas where the special shareholder's consent is required by the company.

  As a public limited company, Consignia Holdings plc is accountable to its shareholders. My right hon. Friend the Secretary of State for Trade and Industry (49,999 shares) and the Treasury Solicitor (as nominee of the Treasury) ( 1 share).

  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry what limit of(a) value and (b) weight is set for Consignia's monopoly status; for how long this status extends and under which legal provision; what recent discussions she has had concerning the move to unregulated and competitive postal services; when the change to open competition will take place; and under what statutory requirements. [65073]

  Mr. Timms
  Under the Postal Services Act (2000), the Postal Services Commission (known as Postcomm) was created, as an independent regulatory authority for the licensing of postal services. Postcomm administers a licensed area, broadly equivalent to the former Post Office statutory monopoly for letters weighing less than 350g and costing less than El. In March 2001, Postcomm granted Consignia a licence to provide services in the licensed area.

  Under the Act, it is for Postcomm to further the interests of users of postal services, wherever appropriate by promoting effective competition between postal operators, subject to its primary responsibility to ensure the provision of a universal postal service at a uniform tariff. Under its statutory powers Postcomm may introduce competition by issuing licenses or by recommending "further exemptions" or reductions to the licensed area.

  In April 2001, Postcomm initially established an interim licensing policy pending a wideranging consultation exercise on how to introduce competition into the market. Postcomm has issued 10 other licences for niche services under this policy. Following the conclusion of its consultation Postcomm announced its decision on competition on 29 May 2002. The effect of that decision is to extend Postcomm's licensing policy to open the postal market to competition in three stages over four years. The first stage to open one third of the market will take effect from January 2003 with increased opportunities for competition in the licensed area and progression to full market opening by 1 April 2007.

  Consignia
  Mr. Wray
  To ask the Secretary of State for Trade and Industry what recent discussions the Government have had with Consignia in relation to keeping open rural post offices. [66638]

  Mr. Timms
  The Government are committed to the maintenance of a nationwide network of post offices and placed a formal requirement on the Post Office in November 2000 to maintain the network and to prevent 346W
  any avoidable closures of rural post offices. We are in regular contact with Post Office Limited about a range of issues relating to the future of the network.

  The Government have invested £480 million in a modernisation programme to computerise the whole of the post office network. We have made available a £2 million fund to support volunteer and community initiatives to maintain or re-open post office facilities in rural areas where traditional services would otherwise close. Figures for end May 2002 showed that 64 applications—to a value of £500,000—had been assessed and approved and to that date payments of £231,000 had also been made.

  In addition, we have received advice from the Postal Services Commission on transitional financial assistance for the rural network and proposals are being developed in the context of that advice.

  Post Offices
  Mr. Wilshire
  To ask the Secretary of State for Trade and Industry which post offices in the Spelthorne constituency Consignia is planning to close. [66494]

  Mr. Timms
  [holding answer 2 July 2002]The programme to restructure the urban post office network has not yet started and I am advised by Post Office Limited that, until it does, there are no specific plans for post office closures in the Spelthorne constituency. When the programme starts it will be taken forward in consultation with individual subpostmasters, the community, local stakeholders and Postwatch. Under the Code of Practice, Post Office Limited is required to consult Postwatch on individual changes and is briefing it on the process envisaged for reaching decisions.

  The objective of the urban network restructuring programme is to provide modernised and improved facilities which meet customers' needs and expectations and are in the right location for the local community.

  Public Houses (Drink Measurement)
  Mr. Laurence Robertson
  To ask the Secretary of State for Trade and Industry if she will make a statement on her policy towards full pints of beer being served in pubs. [66522]

  Miss Melanie Johnson
  [holding answer 2 July 2002]In March the Department issued a consultation paper on revised proposals to tighten consumer protection against short measure draught beer and cider. The period for submitting comments on the proposals ended on 1 July and a statement will be made in due course.

  Post Office Closures
  Chris Grayling
  To ask the Secretary of State for Trade and Industry if she will list the post offices in the(a) Epsom and Ewell constituency and (b) United Kingdom which Consignia is proposing to close. [65703]

  Mr. Timms
  I am advised by Post Office Limited that no such lists exist. The programme to restructure the urban post office network has not yet started. When it does it will be taken forward in consultation with individual sub-postmasters, the community, local stakeholders and Postwatch. Under the Code of Practice, Post Office Limited
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  is required to consult Postwatch on individual changes and is briefing it on the process envisaged for reaching decisions.

  The objective of the urban network restructuring programme is to provide modernised and improved facilities which meet customers' needs and expectations and are in the right location for the local community.

  Nuclear Power Stations
  Mr. Jenkin
  To ask the Secretary of State for Trade and Industry what provision has been made for the evacuation of Mersea Island in the event of an emergency at Bradwell Power Station; and what estimate has been made about how long this would take. [64959]

  Mr. Wilson
  As with all UK civil nuclear sites, well developed and regularly tested arrangements for responding to an emergency at Bradwell Power Station are in place as part of the licensing requirements imposed by HSE's nuclear installations inspectorate. Detailed emergency plans are prepared for an area within the 2.4 km detailed emergency planning zone for Bradwell. Mersea Island is outside the detailed emergency planning zone for Bradwell; the boundary of this zone is defined in relation to the most significant release of radiation from an accident which can be seen through reasonably foreseeable scenarios and is derived from the safety case established for the site. Beyond this, plans must be capable of being extended to deal with larger, less likely events. This principle of extendibility is an important part of civil nuclear emergency response arrangements. Use is made of the general plans prepared by the police, local authority and other agencies for a wide range of events. These do not provide for the detailed estimation of evacuation times which would need to take into account the circumstances at the time: ie time of day, prevailing weather conditions and the state of the tide.

  Bradwell Power Station ceased generating electricity on 31 March 2002 and will be decommissioned over the next few years. This process will reduce the radiological hazard.

  Ms Shipley
  To ask the Secretary of State for Trade and Industry what the Government's policy is on the closure of nuclear power stations; and if they will pay for the disposal of nuclear waste from nuclear power stations. [66097]

  Mr. Wilson
  The operation of a nuclear power station is a matter for the relevant operator, subject to meeting the necessary regulatory requirements. The Government have already announced that, through the proposed Liabilities Management Authority, it will take on direct financial responsibility for the decommissioning and clean-up of BNFL's Magnox stations. Financial responsibility for the decommissioning of private sector nuclear power stations and the management of spent fuel and all associated wastes and materials is a matter for the operator concerned.

  Ms Shipley
  To ask the Secretary of State for Trade and Industry whether, when the liabilities of a nuclear power station exceed its assets, the Government will allow it to continue in business. [66102]
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  Mr. Wilson
  If the liabilities of any company exceed its assets, it is a matter for the directors of that company to decide whether the company should continue trading. In addition, in the case of a nuclear power company operating on sites licensed under the Nuclear Installations Act 1965, the Health and Safety Executive's nuclear installations inspectorate would continue to monitor closely the company's activities to ensure it continued to maintain its safety performance.

  Ms Shipley
  To ask the Secretary of State for Trade and Industry if she will make a statement on the Government's policy regarding building new nuclear power stations. [66105]

  Mr. Wilson
  In common with all generation options, the initiative for bringing forward proposals to construct new plant lies with the market and the generating companies. British Energy and BNFL have said they have no current plans for such proposals.

  Office for Civil Nuclear Security
  Llew Smith
  To ask the Secretary of State for Trade and Industry at which sites her Office for Civil Nuclear Security and HM Nuclear Installations Inspectorate have jointly conducted audits of plant security; and on what dates, involving how many personnel the audits were conducted. [63844]

  Mr. Wilson
  The Office for Civil Nuclear Security (OCNS), the independent security regulator and HSE's Nuclear Installations Inspectorate (NII), the safety regulator have a close working relationship and undertook an immediate joint review of security and safety issues of all UK civil nuclear sites in the light of the terrorist attacks in the United States last September. In the light of that review, sites were visited either jointly or by the relevant Regulator depending on the functions of the site concerned, its complexity, and other relevant factors. Since 11 September inspectors from both regulatory bodies have undertaken joint reviews at Capenhurst, Dounreay, Sellafield and Springfields.

  Liabilities Management
  Ms Shipley
  To ask the Secretary of State for Trade and Industry if she will make a statement on the work of the Liabilities Management Authority. [66103]

  Mr. Wilson
  The Government's plans for the LMA will be set out in a White Paper to be published shortly.

  BNFL
  Ms Shipley
  To ask the Secretary of State for Trade and Industry if she will make a statement on the transfer of BNFL assets to LMA. [66104]

  Mr. Wilson
  The Government's plans for the transfer of BNFL's assets to LMA will be set out in a White Paper to be published shortly.

  Draft Takeovers Directive
  Mr. Spring
  To ask the Secretary of State for Trade and Industry what proposals the Government have for the European Union Takeovers Directive; if she will make a statement on the current state of the draft Takeovers Directive; and if she will make a statement. [65712]
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  Miss Melanie Johnson
  The Government are presently awaiting a new proposal from the European Commission.

  Cefn Croes Wind Farm
  Mr. Simon Thomas
  To ask the Secretary of State for Trade and Industry if she will place in the Library(a) reports and (b) advice she received relating to the Cefn Croes wind farm application in Ceredigion. [65515]

  Mr. Wilson
  The advice of the National Assembly for Wales has already been placed in the Libraries of the House. Under Exemption 2—internal discussion and advice—of the Code of Practice on Access to Government Information, I do not intend to publish the advice from the DTI officials to Ministers.

  Renewable Energy Investment
  Mr. Weir
  To ask the Secretary of State for Trade and Industry what proportion of the promised £260 million in renewable energy investment has been made; to which projects it has been allocated; and how much electricity is expected to be produced by the projects by 2010. [65115]

  Mr. Wilson
  £260 million has been allocated to the following projects:

  £55.5 million per annum for research and development

  £74 million for Offshore Wind Capital Grants

  £81.5 million for Bioenergy Capital Grants

  £20 million for Photovoltaics

  £10 million for Community and Household Capital Grants

  £2.5 million for Planning Facilitation work

  £10 million for Blue Skies Research

  £5 million for Wave and Tidal development

  £4 million for Net Metering, Storage and Control Technologies

  £6 million for Photovoltaic Field Trials.

  Of these projects, all are up and running except the Community and Household Capital Grants Scheme, which is in the design stage. It is expected that we will spend this year's £19 million on research and development and approximately £10 million on capital grants.

  Most of the programmes are intended to support research, development and pre-commercial demonstration of renewable technologies. Only the Offshore Wind and Bioenergy Capital Grants programmes are expected to contribute to the 2010 target. These programmes will result in approximately 1,300 megawatts of capacity or 1.5 per cent. of electricity supply.

  Copyright
  Mr. Wyatt
  To ask the Secretary of State for Trade and Industry if she will review the laws of copyright, with special reference to(a) the position in North America, (b) the implications of the new EU directive and (c) the impact of the internet; and if she will make a statement. [65593]

  Miss Melanie Johnson
  [holding answer 1 July 2002]UK copyright law (the Copyright, Designs and Patents Act 1988) has proved remarkably "future-proof' as regards the challenges of the internet and electronic commerce but some modifications will be needed to implement EU Directive 2001/29/EC on copyright and related rights in the 350W
  information society. The directive is required to be transposed into national laws by 22 December 2002. There will be consultation as part of the process with interested parties.

  Domestic Subsidies
  Lynne Jones
  To ask the Secretary of State for Trade and Industry, pursuant to her answer of 26 February 2002,Official Report, column 1128W, on domestic subsidies, by what date after the final date for the conclusions of negotiations her Department estimates export and trade distorting domestic subsidies will be phased out. [63429]

  Mr. Morley
  It is as yet too early in the WTO negotiations to forecast the likely scale and timing of reductions in these subsidies. The Government will continue to press for full and prompt implementation of the commitments made at Doha.

  United Kingdom Petrol Stations
  Mr. Peter Duncan
  To ask the Secretary of State for Trade and Industry how many United Kingdom petrol stations are exempt from vapour recovery regulations by way of annual turnover falling below the exemption limit. [65247]

  Mr. Meacher
  I have been asked to reply.

  In accordance with Directive 94/63/EC Stage I, petrol vapour recovery has been rolled out in the UK over the past seven years. The final stage in the implementation of the Directive is 31 December 2004. The controls will then apply to all petrol stations in the UK with an annual throughput greater than 100m3. In 1998 it was estimated that this derogation would exempt approximately 136 sites in the UK. However, the total number of petrol stations in the UK since 1998 has decreased, from 13,758 to 13,043 in 2000. As petrol station closures often have a disproportionate impact on the smaller sites, it is likely that the number of petrol stations covered by the derogation has decreased since the data were gathered.

  The directive also contains an option for member states to exempt larger sites, those with an annual throughput of less than 500m3, if located in an area where vapour emissions are unlikely to contribute significantly to environmental or health problems. My Department and the devolved Administrations are currently looking at applying the derogation in the UK.

TRANSPORT

  Railtrack
  Mrs. May
  To ask the Secretary of State for Transport (1) when previous network management statements were published by Railtrack; [60649]

  (2) what (a) statutory responsibility and (b) other responsibility Railtrack has to produce a network management statement. [60648]

  Mr. Darling
  Under condition 7 of its network licence as amended in September 1997. Railtrack is required to prepare and publish on or before 31 March in each year—
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  or such other date as the Rail Regulator may specify—a statement detailing its plans for the maintenance, renewal and development of the network in Great Britain.

  Entertainment Costs
  Mr. Bercow
  To ask the Secretary of State for Transport what the cost was of the Department's 2001 staff Christmas Party; and how many people attended. [61664]

  Mr. Jamieson
  The former Department for Transport, Local Government and the Regions held no departmental Christmas party.

  Rail Franchises
  Mr. Don Foster
  To ask the Secretary of State for Transport what has been spent by(a) his Department and (b) the Strategic Rail Authority in relation to (i) the re-letting of Chiltern railways franchise, (ii) the GNER Franchise Extension, (iii) the Island Line extension, (iv) the Midland Mainline Extension, (v) other franchise re-negotiations and (vi) all franchise renegotiations and extensions; and if he will make a statement. [64144]

  Mr. Jamieson
  The total so far spent by the Strategic Rail Authority on franchise renegotiations and extensions is approximately £10 million. A breakdown of that figure is not readily available.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for Transport if he will list the EU directives relating to his Department which have been(a) amended and (b) repealed in 2002. [64946]

  Mr. Jamieson
  The following EU Directives have been amended:"96/49/EC"—Directive on the approximation of the laws of member states with regard to the transport of dangerous goods by rail [Amended by Directive 2001/6/EC]
  "94/55/EC"—Directive on the approximation of the laws of member states with regard to the transport of dangerous goods by road [Amended by Directive 2001/7/EC]
  "96/96/EC"—Directive on the approximation of the laws of member states relating to roadworthiness tests for motor vehicles and their trailers. [Amended by Directive 2001/9/EC]
  "96/98/EC"—Directive on Marine Equipment [Amended by Directive 2001/53/EC]
  "97/68/EC"—Directive on the approximation of measures against the emission of gaseous and particulate pollutants from internal combustion engines to be installed in non-road mobile machinery. [Amended by Directive 2001/63/EC].

  No EU Directives have been repealed.

  Mr. Bercow
  To ask the Secretary of State for Transport 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. [64972]
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  Mr. Jamieson
  The following Directives have been transposed, in full or in part, this year:96/48—Directive of the European Parliament and of the Council on the interoperability of the trans-European rail system.
  2000/30—Directive of the European Parliament and of the Council on technical roadside inspection of the roadworthiness of commercial vehicles circulating in the Community.
  2000/39—Commission Directive 2000/39/EC of 8 June 2000 establishing a first list of indicative occupational exposure limit values in the implementation of Council Directive 98/24/EC on the protection of the health and safety of workers from the risks related to chemical agents at work.
  2001/6—Directive 2001/6/EC of 29 January 2001. adapting for the third time to technical progress Council Directive 96/49/EC on the approximation of the laws of the member states with regard to transportation of dangerous goods by rail.
  2001/7—Commission Directive 2001/7/EC of 29 January 2001 adapting for the third time to technical progress Council Directive 94/55/EC on the approximation of the laws of the member states with regard to transportation of dangerous goods by road.
  2001/09—Commission Directive 2001/9/EC adapting to technical progress Commission Directive 96/96/EC on the approximation of the laws of member states relating to roadworthiness tests for motor vehicles and their trailers.
  2001/53—Commission Directive 2001/531/EC amending Directive 96/98/EC on marine equipment.
  2001/63—Commission Directive 2001/63/EC adapting to technical progress Directive 97/68/EC of the Parliament and of the Council on the approximation of measures against the emission of gaseous and particulate pollutants from internal combustion engines to be installed in non-road mobile machinery.

  We have no central record of domestic legislation made in support of EU Regulations. Such information could be assembled only at disproportionate cost. Similarly, information about the costs of implementation is not readily available.

  Mr. Don Foster
  To ask the Secretary of State for Transport how many people are employed in his Department(a) full-time and (b) part-time to (i) monitor and (ii) liaise on European Directives; and if he will make a statement. [66314]

  Mr. Jamieson
  A number of areas of the Department are engaged at different times in monitoring and liaison of EU Directives. The number of staff involved therefore varies considerably, as does the amount of time individuals spend on EU business. One division of the Department, at present comprising 22 posts, is responsible for overall advice on European arid international business.

  Statutory Instruments
  Mr. Bercow
  To ask the Secretary of State for Transport 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. [64635]

  Mr. Jamieson
  In the period from 1 January 2002 to 31 May 2002, my Department's predecessor (the Department for Transport, Local Government and the Regions) was responsible for making 80 general statutory instruments. A list identifying these has been placed in the Libraries of the House. Endorsed on each instrument is an Explanatory Note, which identifies any legislation revoked or amended by the instrument. The remainder of
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  the information requested is not held centrally in a form which would enable it to be provided by my Department without incurring disproportionate costs.

  Cycle Lanes
  Mr. Cox
  To ask the Secretary of State for Transport what the average cost is of the provision is of a mile of a cycle lane. [65051]

  Mr. Jamieson
  Average costs are not available, but since cycle lanes use the existing carriageway of a road and are identified by markings and signs, costs are not high. The limitation in providing more cycle lanes on the carriageway will often be lack of sufficient road space to accommodate them.

  Contractor

  Research

  (i) Hatfield

  Trimac Ltd.

  Specialist Photographic Support

  AEA Technology Rail

  Assistance with investigation including on-site derailment investigation, track profile measurements and examination of vehicles.

  AEA Consultancy

  Advice on non-destructive testing.

  Serco Rail-test

  Practical non-destructive testing of rails.

  Sheffield Testing Labs

  Chemical analysis of steel samples. Machine and tensile test of rails.

  (ii) Ladbroke Grove

  Grant Fire Consultants

  Review of existing fire standards and a review of the literature in respect of the behaviour of fires on porous ground.

  Interek Testing

  Testing of gas/oil samples.

  Forensic Science Services

  Paint analysis.

  Astra Zeneca

  Auto ignition temperature test of samples of gas/oil.

  University of Sheffield

  ICP analysis.

  Garvic Development

  Design advice related to fuel tank impact test.

  IC Consultants

  Technical support in respect of the failure of fuel tanks and of the collision dynamics.

  (iii) Potters Bar

  AEA Technology Rail

  Assistance with investigations.

  This information relates to the principal contractors only. A complete list of all the contractors involved could be provided only at disproportionate cost.

  Live Firing Exercises (Aircraft Activities)
  Mr. Key
  To ask the Secretary of State for Transport at what(a) height, (b) latitude and (c) longitude the KLM Fokker 70 aircraft was flying on 19 June when the MoD ordered a ceasefire during a live firing exercise on Salisbury Plain below it; and if he will make a statement. [65197]

  Mr. Jamieson
  I am advised by National Air Traffic Services (NATS) that the KLM Fokker 70 aircraft, en route from Amsterdam to Bristol on 19 June, was at a height of 17,000 feet, and was at latitude 51" 17' north and longitude 001" 51' west when the incident occurred. NATS has assured us that at no time was safety compromised or the aircraft in danger. Nevertheless, NATS are carrying out a full investigation into the incident as are the Civil Aviation Authority, the Government's safety regulator, in order to establish what happened and what lessons may be learned for the future.

  Mr. Key
  To ask the Secretary of State for Transport at what time on 19 June National Air Traffic Services at Swanwick was first informed that a KLM Fokker 70

  Rail Accident Investigation
  Mr. Don Foster
  To ask the Secretary of State for Transport what work has been conducted under HSE supervision for(a) Railtrack, (b) British Transport Police and (c) other rail industry companies and bodies in relation to accident investigation into the (i) Hatfield rail crash, (ii) Ladbroke Grove rail crash and (iii) Potter's Bar rail crash; who the contractor was in each case; what the nature of the work was; and if he will make a statement. [65368]

  Mr. Jamieson
  In addition to work undertaken by the Health and Safety Executive's (HSE) internal laboratory, HSE commissioned the following work from external contractors:

  aircraft flying from Amsterdam to Bristol passing over a live Army artillery exercise on Salisbury Plain; and what action they took. [65198]

  Mr. Jamieson
  The incident occurred at 10:30 hrs BST on 19 June. The Fokker 70 was detected by the MOD's Boscombe radar. On detection, Boscombe immediately invoked the Clear Range Procedure to ensure that activity in the Danger Area ceased before the aircraft penetrated the airspace, and informed NATS. As the aircraft was approaching its Bristol destination, and firing in the Danger Areas had been suspended, NATS permitted the aircraft to complete its journey. NATS subsequently initiated a full investigation into the incident which is also being examined by the CAA.

  Mr. Key
  To ask the Secretary of State for Transport what procedures are in place to ensure that National Air Traffic Services are informed of(a) military flying exercises and (b) artillery firing exercises in the vicinity of Salisbury Plain. [651951

  Mr. Jamieson
  Civil/military co-ordination is well established in the UK: major military flying and artillery firing exercises at Army ranges such as those on the Salisbury Plain are pre-planned with involvement from National Air Traffic Services. Such exercises are notified to airspace users by means of Airspace Co-ordination Notices issued by the Civil Aviation Authority (CAA). The CAA also convey information about the activation
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  of Danger Areas through the issue of British Islands Daily Nav Warnings. The two particular Danger Areas penetrated by the KLM Fokker 70 are active 24 hours a day and hence no notice of activation would be required. All Danger Areas are promulgated in the UK Aeronautical Information Publication and are shown on the aeronautical charts.

  Departmental Waste
  Sue Doughty
  To ask the Secretary of State for Transport what proportion of waste produced in his Department was(a) recycled, (b) composted and (c) re-used, broken down into (i) paper, (ii) plastics, (iii) aluminium cans and (iv) other in each year since 1997; what plans there are to increase these proportions; and if he will make a statement. [65692]

  Mr. Jamieson
  My Department was formed on 29 May. Prior to 1999–2000, waste data were only available for DTLR headquarters and some other main sites. More comprehensive data have been available since.

  Percentage recycled

  1997–98

  —

  1998–99

  —

  1999–2000

  44

  2000–01

  42

  2001–02

  51

  Our policy aim is to achieve 70 per cent. rate of recovery or recycling by 2003–04.

  Detailed information on waste streams is not available for the Department as a whole.

  Recycling
  Sue Doughty
  To ask the Secretary of State for Transport what proportion of(a) paper and (b) other goods purchased by his 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 he will make a statement. [657631

  Mr. Jamieson
  My Department was formed on 29 May. Our policy is to buy recycled paper for all work not requiring specialist papers. The proportion of paper bought by DTLR that met the policy in respect of recycled content was:

  Percentage recycled

  1997–98

  44

  1998–99

  50

  1999–2000

  52

  2000–01

  85

  2001–02

  94

  Information on other recycled goods and cost is not available.

  Press Releases
  Mr. Don Foster
  To ask the Secretary of State for Transport on what occasions press releases have been released on behalf of the Department by the Government offices for the regions since 7 June 2001; and if he will place copies of these in the Library. [66319]
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  Mr. Jamieson
  The Government offices for the regions do not issue press releases on behalf of the Department for Transport, or previously for the former Department for Transport, Local Government and the Regions.

  European Transport White Paper
  Mr. Don Foster
  To ask the Secretary of State for Transport what discussions he has had with(a) European Commissioners and (b) the European Parliament on the European transport White Paper; and if he will make a statement. [66313]

  Mr. Jamieson
  The European Commission published its European transport policy White Paper in September 2001. The White Paper itself has no legislative or executive force at this stage, but it indicates areas where the Commission intends to initiate action over the next few years.

  There have been discussions on this White Paper at the Transport Council on several occasions, but neither I nor other departmental Ministers have had specific discussions with the European Commission or the European Parliament.

  Multi-modal Studies
  Mr. Don Foster
  To ask the Secretary of State for Transport how he will expedite the implementation of the findings of the 21 multi-modal studies set out in the 10-year transport plan to ensure that the infrastructure improvements identified therein are operational by 2010. [66009]

  Mr. Jamieson
  The multi-modal studies are developing strategies which go well beyond 2010. We will consider the recommendations of each study and agree an integrated programme of measures to be taken forward by the Highways Agency, Strategic Rail Authorities and local authorities.

  Track Bed Maintenance
  Mr. Don Foster
  To ask the Secretary of State for Transport what recent changes have been made to the(a) practice and (b) regularity of track bed maintenance on the railways; and if he will make a statement. [66309]

  Mr. Jamieson
  This is an operational matter for Railtrack. However, I understand from Railtrack that there have been no recent changes.

  Variable Speed Limits
  Mr. Don Foster
  To ask the Secretary of State for Transport what(a) guidance has been given by his Department to (i) the Highways Agency and (ii) local authorities and (b) legislation is in place covering variable speed limits; and if he will make a statement. [66007]

  Mr. Jamieson
  Section 84 of the Road Traffic Regulation Act 1984 as amended by section 45 of the Road Traffic Act 1991 provides for local authorities to create variable speed limits.

  Similarly, sections 17(2) and (3) of the Road Traffic Regulation Act 1984 provides for the Highways Agency to create variable speed limits on special roads.
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  Guidance on variable speed limits is contained in Circular Roads 2–92.

  EU Public Service Requirements Regulation
  Mr. Don Foster
  To ask the Secretary of State for Transport what discussions he has had with the European Commission on the EU Public Service Requirements Regulation; and if he will make a statement. [66315]

  Mr. Jamieson
  In July 2000 the European Commission published a proposal for a regulation concerning public service requirements and the award of public service contracts in passenger transport by rail, road and inland waterway. An amended proposal was published in February 2002. This proposal is intended to stimulate more efficient and attractive public transport through the use of regulated competition and other measures and to promote legal certainty for authorities and operators.

  There have been discussions at, and progress reports to, the Transport Council on several occasions, but neither I nor other departmental Ministers have had specific discussions with the European Commission regarding this proposal.

  Road Deterioration
  Mr. Don Foster
  To ask the Secretary of State for Transport what proposals he will put in place to ensure that local authorities(a) halt the deterioration of the local road network by 2004 and (b) eliminate the backlog by 2010. [66011]

  Mr. Jamieson
  The Government are providing over £30 billion for local road maintenance over the period of the 10-year Transport Plan, an extra £9 billion (23 per cent. in real terms) above the funding levels in the previous 10 years.

  Local authority road condition is monitored annually by Best Value Performance Indicators. DfT is also working with local authorities to develop more efficient management systems for carriageways, bridges and street lighting.

  Road Pricing
  Chris Grayling
  To ask the Secretary of State for Transport whether he intends to implement road pricing in south-east England following the recent publication of the London Orbital multi-modal study. [66057]

  Mr. Jamieson
  There are no plans to do so.

  Rural Transport
  Mrs. May
  To ask the Secretary of State for Transport (1) what support for(a) rural transport partnerships and (b) community based projects in rural areas he has given in the last two years; and if he will make a statement; [66569]

  (2) what support he has given to flexible transport in rural communities; and if he will make a statement. [66568]

  Mr. Jamieson
  Specific funding for flexible transport services in rural areas, such as demand responsive buses, dial-a-ride schemes and shared taxis, is available through my Department's Rural Bus Challenge and the Countryside Agency's Rural Transport Partnership and Parish Transport 358W
  Fund programmes. The Rural White Paper published in November 2000 announced that £60 million, £32 million, and £15 million would be made available for these three programmes respectively over the period 2001–02 to 2003–04. Local authorities can also use their revenue support grant to fund flexible transport services.

  Total spending on rural transport partnerships and other community-based transport projects in rural areas through the Rural Bus Challenge and Rural Transport Partnership programme in the last two financial years are as follows.

  £ million

  Rural bus challenge

  Rural transport partnership

  2000–01

  6.17

  4.80

  2001–02

  11.03

  6.96

  The 2000–01 rural transport partnership figure includes funding for the Countryside Agency's rural transport development fund, which merged with its rural transport partnership programme in April 2001.

  London Underground
  Mr. Austin Mitchell
  To ask the Secretary of State for Transport (1) for what reason a 95 per cent. public sector guarantee was given to the London Underground PPP; who will finance this guarantee, if invoked; and whether the guarantee constitutes a form of state aid to the PPP; [65487]

  (2) what risk transfer to the public sector has occurred over the period of negotiations on the London Underground PPP; and for what proportion of responsibility for debt (a) the public sector and (b) the contractors are liable. [65483]

  Mr. Jamieson
  Negotiation of the contracts is a matter for London Underground. However, in general, it is common for the terms of a contract to change as a result of negotiation. Office of Government Commerce guidance states that the principle governing risk transfer is not to transfer all possible risks, but rather to allocate risk to whomever from the public or private sector is able to manage it at least cost. London Transport has sought to act in line with this guidance in the course of its negotiations with bidders for the London Underground PPPs.

  I understand the contracts provide that, in certain circumstances where a private sector infrastructure company persistently breaches the contract and no alternative contractor can be found, London Underground can take control of the infrastructure company at a price that allows for 95 per cent. of approved third-party bank and bond debt to be repaid. None of the finance provided by the shareholders would be repaid. London Transport considers these contract provisions to be in line with its aim of optimising value for money overall, balancing the cost of raising finance against the need to provide the private sector

  359W
  with a strong incentive to meet contractual obligations to improve performance. London Underground's obligations under the PPP contracts will initially be backed by a guarantee from London Regional Transport. It is the Government's intention to transfer London Underground to Transport for London in line with the provisions of the GLA Act 1999, and London Regional Transport's guarantee will be transferred to Transport for London at the same time.

  The Secretary of State also intends 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 in respect of London Underground. This letter of comfort was reported to Parliament using the Minute procedure on 20 March 2002.

  Whether these arrangements constitute state aid is a matter for the European Commission in the context of the Government's notification to the Commission on 12 April.

  Mr. Austin Mitchell
  To ask the Secretary of State for Transport (1) what estimate he has made of the public subsidy which will be necessary each year to fund the improvements made to the London Underground under the PPP; [65495]

  (2) what estimate he has made of the shortfall over the first seven and-a-half years of the London Underground PPP contract; and how this funding gap is to be met. [65481]

  Mr. Jamieson
  The Government will ensure that London Underground has sustained and secured funding to meet its contractual obligations to the infrastructure companies for delivering the massive increase in investment expected under the tube modernisation plans. I refer the hon. Member to the proposed letter of comfort that was reported to Parliament using the Minute procedure on 20 March 2002.

  National Air Traffic Control Services
  Mrs. Gillan
  To ask the Secretary of State for Transport what estimates he has made of the losses to British airlines and businesses caused by failures of the computer system at the new National Air Traffic Control Services. [64560]
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  Mr. Jamieson
  No such estimate has been made of the losses caused to airlines and other businesses.

  There have been three failures of computer systems at NATS' Air Traffic Control Centres this year. Two have occurred to the Flight Data Processing System at West Drayton and one was attributable to a faulty work station at the new centre at Swanwick.

  A number of immediate actions have been taken, including a successful upgrade to the software in the system at West Drayton. NATS are confident that the problems that have caused these three system failures have been addressed.

  Electoral Registration
  Harry Cohen
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has to amend electoral registration forms issued by electoral registration officers to ensure that voters are informed that the details they provide may be recorded on police computers and other public sector databases. [59170]

  Harry Cohen
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement about the impact of wider statutory disclosures of name and address details from the electoral roll on the willingness of individuals from(a) ethnic, (b) religious and (c) other minority groupings to register for the vote. [59171]

  Yvette Cooper
  I have been asked to reply.

  The Government published on 13 May a policy paper and draft regulations on access to, and sale and supply of, electoral registers which proposes to restrict, rather than widen, such access, sale and supply. The draft regulations include a new specimen registration form and guidance notes which clearly state who may receive copies of the electoral registers and the purposes for which the information obtained will be used. The Regulations were laid on 27 June 2002. In addition, I understand The Electoral Commission intends to produce a leaflet explaining the effect of the regulations in more detail. It is important that all individuals are able to exercise their right to vote and can be reassured that appropriate procedures are in place to handle the information provided for registration.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Rio-Earth Summit (Implementation)
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps have been taken by the Government since the Rio Earth Summit in 1992 to(a) set goals on environmental protection and (b) improve eco-efficiency and resource productivity relating to sanitation issues; and what these (i) goals and (ii) improvements have been. [44365]

  Mr. Meacher
  The Government has set goals and secured improvements in the protection of the environment and the sustainable use of natural resources for both water supply and waste water disposal, both through international and European agreement and domestic regulatory requirements since 1992.

  The measures under which this has been done include:

  (i) the Drinking Water Directive, which sets minimum standards for the wholesomeness of drinking water supplies; this has been transposed into national legislation by the Water Supply (Water Quality) Regulations 2000 which include some additional national standards;

  (ii) The Environment Agency has published "Water Resources for the Future", which plans reductions in existing abstractions in England and wales of water totalling some 700MI/day to reduce unsustainable abstraction by 2010;

  (iii) the Urban Waste Water Treatment (England and Wales) Regulations 1994 set standards and deadlines for the treatment of sewage; I announced in March 1999 a further goal that all significant sewage discharges in England and Wales should receive at least secondary treatment by 2005; and

  (iv) the Bathing Water Directive, under which a goal has been set for English beaches to achieve at least 97 per cent. compliance with the Directive's main mandatory standards by 2005.

  Among the improvements achieved are:

  (i) the level of compliance with standards in public drinking water supplies rose from 98.65 per cent. in 1992 to 99.83 per cent. in 2000;

  (ii) in England, between 1990 and 2000, there has been a 10 per cent. increase in river lengths classified as good or fair chemical quality and an 8 per cent. increase in rivers of good or fair biological quality;

  (iii) secondary treatment is now provided at 99 per cent. of sewage treatment works in England which serve population greater than 15,000; and

  (iv) compliance with the Bathing Water Directive's main mandatory standards for beaches increased from 79 per cent. in 1992 to 98 per cent. in 2001.

  Summary forward programmes of the measures required of water and sewerage companies to meet environmental and resource use goals in their operations and investment are set out once every five years in Ministers' guidance on the programmes of quality improvements for Ofwat's periodic review of water price limits. The guidance for the period 2000–05 was published in "Raising the Quality" in 1998.

  Flood Defences
  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs, pursuant to the answer of 25 March,Official Report, column 728W, on flood defences, if she will make a statement on Article 33 of Council Regulation (EC) No 1257/99 of 17 May 1999 and its applicability to flood management in the UK. [51466]

  Mr. Morley
  The Rural Enterprise Scheme, which forms part of the England Rural Development Programme, implements rural development measures under Article 33 of Council Regulation 1257–99. That Article includes, among its 13 measures, scope for restoring agricultural production potential damaged by natural disasters (which could include some, not all, flood incidents) and introducing appropriate prevention measures.

  Given the small scale of the EU Rural Development funds allocated to the UK, and the fact that the UK taxpayer would have to fund a significant proportion of the costs, careful targeting of the ERDP was necessary. The measures adopted under the Rural Enterprise Scheme reflect the range of regional priorities and targets identified following close consultation with statutory partners and stakeholders. They are wide-ranging in nature but also reflect the scheme's primary aim of helping farmers to adapt to changing markets and develop new business opportunities. The measure referred to above was not identified as a priority for support and therefore is not included in the scheme. The hon. Member will know from answers to previous questions, including that given to him on 15 November 2001, Official Report, columns 890–91W, the substantial investment in flood and costal defence made by the Government.

  Correspondence
  Mr. Andrew Turner
  To ask the Secretary of State for Environment, Food and Rural Affairs how many items of incoming mail(a) from hon. Members and (b) in total in each month since June 2001 have been (i) received, (ii) fully responded to, (iii) are held pending for response and (iv) are untraceable. [58116]

  Mr. Morley
  [holding answer 21 May 2002]: The total number of letters received from hon. Members since June 2001 (as at 30 June 2002) stood at 11,393. We have responded in full to 9,609 letters and 1,784 letters are awaiting a response.

  The breakdown by month of letters from hon. Members awaiting a response is:

  Month

  Received

  Fully responded to

  Pending a response

  November 2001

  846

  770

  76

  December 2001

  527

  464

  63

  January 2002

  1053

  959

  94

  February 2002

  1105

  1011

  94

  March 2002

  1377

  1210

  167

  April 2002

  1115

  861

  254

  May 2002

  1022

  629

  393

  June 2002

  737

  94

  643

  363W
  Our database records details of all letters received from honourable Members. We are therefore unable to provide details of untraceable mail.

  Providing similar information for all items of mail received in the department would only be available at disproportionate cost.

  Tuna Fishing
  Ms Walley
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to ensure that fishing for tuna does not endanger the lives of other sea creatures. [60781]

  Mr. Morley
  During the United Kingdom's Presidency of the EU in 1998 we achieved the adoption of a ban on the use of drift nets in the tuna fishery. The ban came into effect on 1 January of this year. We look carefully at information relating to cetacean by catch in various fisheries. Research sponsored by DEFRA into the new designs of trawl nets to allow the escape of marine mammals may have benefits for the tuna trawl fishery in due course.

  Departmental Grants
  Mr. Andrew Turner
  To ask the Secretary of State for Environment, Food and Rural Affairs which organisations which were in receipt of a grant from her in 1997–98 no longer are; what the annual saving is; which organisations which were not in receipt of a grant in 1997–98 now are; and what the annual cost is. [61394]

  Mr. Morley
  The aggregate figure for government grants to private organisations and individuals was £28.6 billion in 2000–01 (the last year for which full outturn data is available) compared with £24.8 billion in 1997–98. This includes Lottery grants, but excludes social security payments classified as grants in the national accounts.

  The Department has only been in existence since June 2001, so does not have such historical information itself. Constructing it retrospectively would involve disproportionate cost.

  Departmental Expenditure Limit
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs how much and what proportion of the departmental expenditure limit for 2002–03 had been spent by 31 May; what the figures were for 2001–02; and if she will make a statement. [61016]

  Mr. Morley
  I refer the hon. Member to the answer given on 17 June 2002, Official Report, column 130W.

  Staff Training
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs how much the Department has spent on staff training and development in each of the last five years. [61054]

  Mr. Morley
  Since the formation of this Department in June 2001 1.89 per cent. of annual running costs has been spent on staff training and development.

  Ministerial Salaries
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what the annual cost was of Ministerial salaries in her Department in(a) 1997–98 and (b) 2001–02. [60942]

  Mr. Morley
  The level of Ministerial salaries are recommended by the Senior Salaries Review Body. From May 1997, in this department there was 1 Cabinet Minister, at an annual salary of £43,991; 1 Minister of State, at an annual salary of £31,125; and 2 Parliamentary Under-Secretaries of State, at an annual salary of £23,623 (Commons) and £43,632 (Lords). From June 2001, there was 1 Cabinet Minister, at an annual salary of £68,157; 2 Ministers of State, each at an annual salary of £35,356; and 2 Parliamentary Under-Secretaries of State at an annual salary of £26,835 (Commons) and £60,961 (Lords).

  Committee Mandates
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what the mandate of the Advisory Committee on Livestock Products 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. [61718]

  Mr. Morley
  The mandate of the Advisory Committee on Livestock Products 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 socioeconomic 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 has 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.

  Free Range Eggs
  David Wright
  To ask the Secretary of State for Environment, Food and Rural Affairs what action her Department is taking to promote the production of free range eggs in the United Kingdom. [62903]

  Mr. Morley
  The Department recognises the importance of free range egg systems both in terms of consumer demand and as part of a general policy on the
  365W
  welfare of laying hens. However, the department is not currently involved in any direct promotion of free range eggs.

  Noise Forum
  Bob Russell
  To ask the Secretary of State for Environment, Food and Rural Affairs what action she intends to take on the conclusions contained in publications issued by the Government and on behalf of the Government which were distributed at the United Kingdom Noise Forum's inaugural conference held on 20 May; and if she will make a statement. [62571]

  Mr. Meacher
  The 'Noise Incidence Study' (NIS) and `Noise Attitudes Survey' (NAS), are the latest in a time-series of data on the levels of noise, and people's perception of noise.

  The key finding from NIS is that the average noise levels measured during the daytime and evening have decreased to some extent.

  The environmental (road, rail and air traffic) noise issues identified within NIS and NAS, will be addressed during the development of the National Ambient Noise Strategy currently being developed. Moreover, the highlighted problem of neighbour noise will be jointly targeted with the planned amendments to the Noise Act 1996, which will make it easier for councils to use additional powers to control domestic noise, and with the 'Neighbour Noise Communications Plan'. This will involve the characterisation of both noisemakers and noise sufferers so that a hard-hitting publicity campaign can communicate both how to deal with noise nuisance, and how toavoid creating it.

  Additionally, the 'Review of European Legislation and Practices (2002)', has identified a variety of enforcement and control measures that my officials will be exploring in more detail. These include:
  Integration of local authority efforts—the Amsterdam example given in the report appears to offer benefits
  Mediation—mediation in Norway is cited as a model service
  Education—further research is recommended into the effectiveness of education programmes, particularly in schools.

  Frozen Peas
  Bob Russell
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will take steps to support the frozen peas industry and pea producers in East Anglia; and if she will make a statement. [62270]

  Mr. Morley
  [holding answer 17 June 2002]: The production and processing of peas are undertaken in response to market demand. I have no plans to provide specific support either to producers or to processors.

  Recycling
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs how many applications the Environment Agency has received for further fixed plant recycling sites in the UK in 2002. [62635]

  Mr. Meacher
  The Environment Agency has received applications from ten companies for licences for the recycling of refrigerators and freezers.
  366W
  Other plant for general recycling operate at sites across the range of the waste industry, including landfill sites, scrap yards, transfer stations, composting sites and other treatment sites. It is not possible to readily identify which applications have a component in respect of recycling plant.

  Wild Fauna and Flora
  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) when the EU Committee for the protection of species of wild fauna and flora by regulating trade 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; [64829]

  (2) when the EU scientific review group for the protection of species of wild fauna and flora by regulating trade 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. [64884]

  Mr. Meacher
  The next meeting of the Committee on Trade in Wild Fauna and Flora is on 30 July 2002. The Scottish Executive is not represented on the Committee, or the related Scientific Review Group, as the Convention on International Trade in Endangered Species (CITES) is not a devolved matter. The July meeting will focus on agreeing a common position on proposals for the next Conference of CITES Parties, which takes place in Santiago, Chile in November. We are currently seeking views from our overseas territories and other interested parties on the merits of these proposals.

  The next Scientific Review Group meeting is on 5 September 2002. The UK is represented on the Committee by scientific advisers from the Joint Nature Conservation Committee (fauna) and the Royal Botanic Gardens at Kew (flora). The Scientific Review Group was set up to examine scientific questions relating to the implementation of CITES within the EU. The meeting in September is likely to focus on preparations for the next CITES Conference.

  EU Management Committee
  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Management Committees of the common organisations of agricultural markets for natural fibres 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. [63932]

  Mr. Morley
  The Management Committee for Natural Fibres assists the European Commission in the operation of the common organisation of the market in flax, hemp, cotton and silkworms. It has met seven times over the last 12 months. The date for the next meeting has not been fixed. UK representation depends on the agenda items under discussion. Officials 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 Committee for the adaptation to scientific and technical progress of the Directive on water intended for human
  367W
  consumption is next due to meet; how many times it has met over the last 12 months; and if she will make a statement. [63948]

  Mr. Meacher
  I refer the hon. Member to the written answer given to the hon. Member for Buckingham (Mr. John Bercow) on 10 June 2002,Official Report, column 915W–16W.

  The Committee established under Article 12 of the Drinking Water Directive 1998 expects to meet again in November. During the past 12 months the Committee met in November 2001 and in April 2002.

  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Joint Meetings of Management and/or Regulatory Committee in the field of agriculture—agrimonetary questions 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. [64897]

  Mr. Morley
  There are no meetings scheduled for the Agrimonetary Management Committee.

  UK representation on the committee is led by DEFRA although members of the devolved administrations are entitled to attend. Members of the Scottish Executive have not attended past meetings.

  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 Live Plants and Floriculture Products 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. [64896]

  Mr. Morley
  I refer the hon. Member to written answer given to the hon. Member for Buckingham (Mr. Bercow) on 10 June 2002,Official Report, column 913W.

  There is no set schedule of meetings for the Management Committee for Live Plants and Floriculture Products. UK representation on this management committee depends on the agenda items under discussion. No representative of the Scottish Executive has attended.

  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Committee on the Conservation of Natural Habitats and of Wild Fauna and Flora (habitat) is next due to meet; what the UK representation is on it; whether experts nominated by the Scottish Executive(a) have been and (b) are members of it; and if she will make a statement. [648281

  Mr. Meacher
  The Habitats Committee last met on 14 March 2002, and at that meeting it was decided the committee would next meet at a date to be arranged in November 2002. UK representation ordinarily consists of an official from my Department together with a scientific adviser from the Joint Nature Conservation Committee. However, wider representation on the committee depends on the agenda items under discussion. Officials from the devolved administrations attend as necessary in accordance with their interests. Officials from the Scottish Executive have attended all recent Habitats Committee meetings.
  368W
  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 Oils and Fats 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. [64886]

  Mr. Morley
  The EU Management Committee for Oils and Fats is next due to meet on 5 July 2002. UK representation on this management committee depends on the agenda items under discussion. Officials from the Scottish Executive and other devolved administrations attend as necessary in accordance with their interests. However, no representative of the Scottish Executive has attended the Management Committee for Oils and Fats.

  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Committee on Certificates of Specific Character for Agricultural Products and Foodstuffs 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. [64892]

  Mr. Morley
  The date of the next EU Regulatory Committee on Certificates of Specific Character for Agricultural Produce and Foodstuffs is unknown at this stage.

  UK representation varies according to the agenda for each meeting and may include members of the Scottish Executive and other devolved administrations where there are items of sufficient interest. If Scottish Executive colleagues do not attend, they work closely with DEFRA officials to ensure that Scottish interests are fully taken into account.

  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Committee for the Adaptation to Technical and Scientific Progress of the Directive on Conservation of Wild Birds 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. [64911]

  Mr. Meacher
  The ORNIS Committee (the Committee for the Adaptation to Technical and Scientific Progress of the Directive on Conservation of Wild Birds) last met on 14 June 2002. No date has yet been fixed for the next meeting. The committee consists of representatives of the EU member states. UK representation depends on the items under discussion, but usually includes an official from my Department together with a scientific adviser from the Joint Nature Conservation Committee.

  Officials of my Department involve the devolved administrations as fully as possible in discussions about the formulation of the UK's policy position on all EU and international issues which touch on devolved matters. In this respect officials from the devolved administrations attend relevant meetings of the ORNIS Committee, as necessary, to support and advance the UK negotiating line that they will have played a part in developing. Officials from the Scottish Executive attended the last two meetings of the ORNIS Committee on 15 June 2001 and 14 June 2002.

  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Management Committee of the Common Organisations of
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  Agricultural Markets for Seeds 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. [64895]

  Mr. Morley
  No date has been fixed for the next meeting of the EU Management Committee for Seeds. The committee consists of representatives of the member states. UK representation depends upon the agenda for each meeting and can include members of the Scottish Executive and other devolved administrations where they consider that there are items of sufficient interest. The Scottish Executive has chosen not to attend this committee in recent years.

  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 products processed from fruit and vegetables 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. [64893]

  Mr. Morley
  I refer the hon. Member to the written answer given to the hon. Member for Buckingham (Mr. Bercow), on 10 June,Official Report, column 911–12W.

  The next meeting of the Processed Fruit and Vegetables Management Committee is scheduled for 16 July 2002. UK representation on this Committee depends on the agenda items under discussion. No representative of the Scottish Executive has attended.

  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 pigmeat 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. [64887]

  Mr. Morley
  The EU Management Committee of the common organisation of agricultural markets for pigmeat is next due to meet on the 9 July 2002.

  UK representation on the EU's Pigmeat Management Committee depends on the agenda items under discussion. Officials 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 hops 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. [64894]

  Mr. Morley
  I refer the hon. Member to the written answer given to the hon. Member for Buckingham on 10 June 2002,Official Report, column 916W.

  There is no set schedule of meetings for the Management Committee for Hops. UK representation on this Management Committee depends on the agenda items under discussion. No representative of the Scottish Executive has attended.

  Fishing
  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on the devolution of greater control of fisheries management within the 12 mile limits of the UK to the UK Government, the Scottish Parliament and the Northern Ireland Assembly. [64502]

  Mr. Morley
  The United Kingdom Government has devolved fisheries management within the whole of the Scottish Fisheries Zone to the Scottish Executive. The National Assembly of Wales has assumed responsibility for the territorial sea off Wales and the Department of Agriculture and Rural Development is responsible for management of the territorial sea off Northern Ireland. In England the territorial sea remains the responsibility of Westminster. The 0–6 mile band off England and Wales continues to be managed by local authority Sea Fisheries Committees.

  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what her policy is on the Commission's proposal that there should be a 40 per cent. cut in the EU fishing fleet; [64538]

  (2) if she will release the funds available from the EU for compensating UK fishermen when they are forced to reduce their effort through tie-ups and a reduction in days at sea. [64503]

  Mr. Morley
  We recognise that EU fleets are too large and that what is needed is a permanent reduction in tonnage. We therefore believe that where further cuts are needed, the priority must be to decommission vessels rather than to tie them up temporarily. If we return to present levels of fishing effort once stocks have recovered, we will simply recreate current problems of overfishing.

  We have not yet however had the opportunity to question the Commission about the detail of their calculations. Nonetheless, they have made clear that they do not seek to impose cuts in fleet capacity on Member States. Their figures which detail fleet cuts by Member States are to be taken as purely illustrative. It will be for Member States to decide what measures to introduce in response to the decisions taken by the Council on reducing fishing effort. The scale of decommissioning will also depend on the decisions taken by fishermen in the light of the impact of these measures. Fisheries Departments in the UK have however already been running decommissioning schemes this year and we would want these taken account of in any necessary reductions which are ultimately agreed.

  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs what action she is taking to prevent the over—exploitation of fisheries in international waters and in the waters of third countries outside the EU where EU vessels are fishing. [64507]

  Mr. Morley
  We shall press for the EU to adopt a more sustainable and responsible approach to international fisheries as part of the reform of the common fisheries policy. In particular we shall be seeking improvements to the way the EU negotiates fishing agreements with third countries, in order to ensure the sustainable management of stocks.
  371W
  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs what action she intends to take to prevent the killing of dolphins and porpoises as a by—catch in UK waters. [64510]

  Mr. Morley
  Dolphin and porpoise by-catch around the UK occurs in waters where vessels from other member states fish extensively, so action is required at EU level to resolve the problem. This is why I have been pressing the Commission to take action on this issue, particularly now that observations we have commissioned have demonstrated a dolphin by-catch problem in the pair trawl fishery for bass off south-west England. I was pleased to see recently that the Commission proposals for the reform of the CFP refer to the introduction by the end of 2002 of measures to reduce cetacean by-catch. We shall be looking for positive action on this in the course of the reform negotiations: we also intend to continue funding trials of adaptations to fishing gear that could reduce dolphin and porpoise by-catch.

  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make it her policy that no public aid will be used for building new vessels and modernising existing ones other than in the case of safety improvements and quality production. [64504]

  Mr. Morley
  It is already Government policy that grants should not be paid for building new vessels or for modernisation that increases fishing effort. In the UK vessel grants are only paid for the adoption of sustainable catching methods and improvements to the quality of fish on board and working conditions.

  EU Fisheries Scientific Research Centre
  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs whether she expects the EU Fisheries Scientific Research Centre to be located within the UK. [64508]

  Mr. Morley
  The UK welcomes the importance placed on improving the quality of scientific advice for fisheries management in the Commission's recent communication on the reform of the common fisheries policy. In particular, we look forward to seeing the detailed action plan due to be published before the end of 2002. At this stage the proposal to develop a European Centre for Fisheries Assessment and Management is a long-term aim, one of many ideas to be explored during the course of the review. We feel confident, however, that the UK's fisheries scientists will continue to play a leading role in improving the quality of scientific advice available to fisheries managers.

  EU Standing Forestry Committee
  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Standing Forestry Committee 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. [64900]

  Mr. Morley
  The EU Standing Forestry Committee meets as and when business arises; the date of its next meeting has not been fixed as yet. The UK is represented on the committee by an official from the Forestry Commission, which reports to the forestry Ministers in England, Scotland and Wales.

  EU Standing Committee on Agricultural Research
  Angus Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the EU Standing Committee on Agricultural Research 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. [64891]

  Mr. Morley
  The European Commission has not yet set a date for the next meeting of SCAR. Experts from the Scottish Executive have not attended recent meetings of SCAR (which have been relatively infrequent), though officials in DEFRA liaise with their Scottish counterparts. There is no bar to their attending as part of the UK delegation as their needs and interests arise.

  Reservoirs
  Mr. Llwyd
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the pending applications for reservoirs in(a) England, (b) Wales and (c) Scotland, with the proposed nation to which the water will be supplied where different from the source; and if she will make a statement. [64710]

  Mr. Meacher
  In England and Wales, the Environment Agency is the statutory body with a duty to secure the proper use of water resources. The agency is not aware of any pending applications for new reservoirs in England or Wales. Nor are there any applications pending with the Scottish Executive, which presently has the same responsibility in Scotland.

  Waste Disposal
  Mr. Chaytor
  To ask the Secretary of State for Environment, Food and Rural Affairs what advice her Department is giving to local authorities about signing long-term contracts for waste disposal services during the period when her Department is reviewing its waste strategy; and if the advice warns against signing contracts which could prevent meeting(a) future recycling targets being developed as part of the Government's waste strategy review and (b) future targets being discussed in the European Union as part of the revision of the Packaging Directive. [63818]

  Mr. Meacher
  [holding answer 26 June 2002]: Government guidance on local authority waste targets and how they should plan to achieve them is set out in `Guidance on Municipal Waste Management Strategies', published by DETR in March 2001. However, it is for local authorities to decide on the nature and timing of any waste disposal contracts. I would expect such contracts to be designed to provide sufficient flexibility to be able to take account of, and respond to, changed circumstances during the lifetime of the contracts, including any future statutory performance standards or new opportunities for increasing recycling and composting. The Government have issued no specific guidance on future targets in the context of the current review of its waste strategy or the revision of the Packaging Directive.

  Trees
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps(a) have

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  been taken and (b) are planned by her Department to increase the number of trees planted in the United Kingdom; and if she will make a statement. [64786]

  Mr. Morley
  Forestry is a devolved matter. Our Forestry Strategy sets out our strategic priorities and programmes for forestry in England. Achieving a re-expansion of woodland cover is a key aim of that strategy, and is also one of our indicators of sustainable development.

  We give grants for planting new woodland under the farm woodland premium scheme and the Forestry Commission's woodland grant scheme. We also provide support for new planting in the National Forest and the Community Forests. Over the seven year period of the England Rural Development Programme our target is to create 30,000 hectares of new woodland.

  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what discussions she has had with Trees for London; and if she will make a statement. [64794]

  Mr. Morley
  I have not had any discussions with Trees for London.

  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs what financial support for tree planting has been given by her Department in each year since 1997; and if she will make a statement. [64785]

  Mr. Morley
  Financial support for tree planting is made under the farm woodland premium scheme (FWPS) and its predecessor the farm woodland scheme (FWS); the Forestry Commission's woodland grant scheme (WGS): and the National Forest company (NFC) tender scheme.

  Payments are as follows:

  £ million

  FWPS/FWS

  WGS

  NFC

  1997–98

  4.726

  8.985

  1.418

  1998–99

  5.368

  10.921

  1.365

  1999–2000

  5.856

  11.596

  1.869

  2000–01

  6.060

  10.821

  1.994

  2001–02

  7.659

  10.833

  2.237

  Department/EU Liaison
  Malcolm Bruce
  To ask the Secretary of State for Environment, Food and Rural Affairs how many employees there are who(a) monitor and (b) liaise with EU commissioners and parliamentarians in (i) her Department and (ii) the Environment Agency,
  broken down into those who focus on these issues as their (a) main and (b) partial roles; and if she will make a statement. [64787]

  Mr. Morley
  The information requested is not held centrally by the Department for Environment, Food and Rural Affairs, and could be provided only at disproportionate cost.

  Lamb
  Mr. Weir
  To ask the Secretary of State for Environment, Food and Rural Affairs how much Scottish lamb has been exported to each member country of the European Union in each of the last five years. [65116]
  374W
  Mr. Morley
  The Overseas Trade Statistics for the UK do not separately identify exports of Scottish lamb. The table gives the volume and value of exports of total UK sheep meat to the rest of the EU in each of the last five years.

  '000 tonnes

  £ million

  1997

  106

  252

  1998

  107

  213

  1999

  108

  203

  2000

  97

  198

  20011

  30

  77

  1Data is provisional and subject to amendment.

  Source:

  HM Customs and Excise

  Data prepared by Statistics (Commodities and Food) Accounts and

  Trade, ESD, DEFRA

  2001 data is provisional and subject to amendment.

  Public Buildings
  Ms Shipley
  To ask the Secretary of State for Environment, Food and Rural Affairs how her Department is meeting the objectives of the Better Public Buildings Initiative. [65071]

  Mr. Morley
  DEFRA has demonstrated commitment to the Better Public Buildings initiative by publishing an Action Plan on the Departmental intranet. The quality of the Department's limited programme of new projects is benchmarked against the objectives and commitments set out within it.

  I have personally sponsored two projects, one of which has been entered for the Prime Minister's Better Public Building Award. Another recent project has been commended for its design by the Commission for Architecture and the Built Environment.

  DEFRA will keep its Better Public Buildings Action Plan under review and proposes to adopt the Design Quality Indicator System for the measurement of overall design standards.

  Animal Welfare
  Mr. Prosser
  To ask the Secretary of State for Environment, Food and Rural Affairs what inspections her officials have made of the motor vessel Kalifeh 1 to assess its suitability for the transport of live farm animals; when inspections were made; what the outcome was of the inspections; and what such inspections her officials will conduct. [65406]

  Mr. Morley
  The vessel my Kalifeh 1 has been inspected twice by DEFRA officials to assess its suitability for the transport of live animals:September 2001—Preliminary partial inspection at the request of and in conjunction with officials from the Department of Agriculture and Rural Development, Northern Ireland, found some modification and repair was required in order to comply with legislative requirements
  April 2002—Joint inspection with representatives of the French veterinary authority found that it was in compliance with EU and GB animal welfare in transport legislation.

  The vessel was also inspected by the Department of Agriculture and Rural Development, Northern Ireland before it was allowed to transport sheep from Northern Ireland in December 2001.
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  All specialist livestock vessels are inspected for their suitability to transport animals prior to the first transport of animals from GB. Additional spot checks are made as appropriate to the continued use of the vessel.

  TB Infected Reactors
  Mr. Drew
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the(a) minimum, (b) maximum and (c) average lengths of time it has taken to remove TB infected reactors from each county that has had a breakdown over the last year. [65010]

  Mr. Morley
  [holding answer 27 June 2002]: The data requested are given in the table.

  The(a) minimum, (b) maximum and (c) average lengths of time it has taken to remove TB-infected reactors from farms in each county that has had a breakdown, between 21 June 2001 and 20 June 2002

  Time2(days)

  Region1 and county

  Number of observations

  Minimum

  Maximum

  Average

  West

  Avon

  33

  13

  3251

  68.1

  Cornwall

  226

  6

  48

  20.9

  Devon

  259

  4

  3320

  16.2

  Dorset

  18

  8

  26

  15.4

  Gloucestershire

  102

  14

  3174

  53.6

  Hereford and Worcester

  189

  1

  3188

  25.9

  Shropshire

  20

  6

  53

  20.0

  Somerset

  61

  6

  3186

  20.5

  Wiltshire

  60

  5

  3181

  33.0

  East

  East Sussex

  11

  10

  26

  13.1

  Leicestershire

  5

  12

  12

  12.0

  Northamptonshire

  4

  5

  8

  7.2

  Oxfordshire

  1

  20

  20

  20.0

  North

  Cumbria

  1

  10

  10

  10.0

  Derbyshire

  13

  5

  13

  8.2

  North Yorkshire

  4

  6

  15

  8.5

  Northumberland

  13

  10

  10

  10.0

  Staffordshire

  61

  4

  25

  11.9

  Wales

  Clwyd

  1

  13

  13

  13.0

  Dyfed

  188

  5

  49

  20.0

  Gwent

  64

  2

  3107

  19.4

  Gwynedd

  3

  26

  27

  26.7

  Powys

  103

  1

  3121

  21.9

  West Glamorgan

  2

  25

  90

  57.5

  Scotland

  Aberdeenshire

  2

  6

  6

  6.0

  Ayrshire

  1

  13

  13

  13.0

  Fife

  1

  5

  5

  5.0

  Inverness-shire

  1

  7

  7

  7.0

  Kirkcudbright

  2

  6

  8

  7.0

  Wigtown

  7

  3

  25

  17.7

  1Geographical boundaries are as used for bovine TB control.

  2Time between date of reading the tuberculin test and date of slaughter.

  3These figures represent cases where animals became reactors in the month before the disruption of normal TB control procedures caused by foot and mouth disease.

  Notes:

  The TB-infected reactors reported are animals with a reaction to the tuberculin test that were compulsorily slaughtered and had samples submitted to VLA for microbiology. Provided that they (a) had lesions of TB visible at the slaughterhouse, and/or (b) VLA found the TB organism in the sample.
  376W
  The time reported represents the number of days between reading the skin test and removing an animal from the farm. During this time, animals are valued and arrangements are made for transport, slaughter at an abattoir, etc.

  Village Halls (Disabled Access)
  Mr. Drew
  To ask the Secretary of State for Environment, Food and Rural Affairs what discussions she has had with(a) the Association for Communities in Rural England and (b) rural community councils on the subject of the impact of disability legislation on village halls. [65027]

  Alun Michael
  I have not been asked for such discussions. I am sure that individual rural community councils and their Association, with which 1 have regular contact, are well aware of the legislation which was put in place some seven years ago. The direct responsibility will be with the owners of specific facilities which will include independent village hall committees or, in some cases, parish or town councils or local authorities.

  Mr. Drew
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on what help is being made available to village hall committees to cope with the implications of new disability legislation. [65026]

  Alun Michael
  The relevant legislation is not new and it is some seven years since the passage of the Disability Discrimination Act 1995. Time was allowed for organisations to meet the requirements of the Act.

  Since December 1996 it has been unlawful for service providers to treat disabled people less favourably for a reason related to their disability. And from 1 October 1999 service providers have been required to make reasonable adjustments to account for disabled people's needs such as providing extra help or changing the way they provide their services.

  From 2004 organisations such as village halls will have to make "reasonable adjustments" to ensure access for disabled people. In any proceedings under the Act, the costs and practicability of any adjustments would be considered in relation to a service provider's ability to pay. The extent to which the adjustment actually improves access to the service and the importance of the service to disabled people would also be taken into account.

  A large number of village halls in England already have access and facilities for disabled people although there are older halls that fall short of the requirements of the Act.

  There are a number of funds which can assist where appropriate, in addition to the community's own resources, fund raising and any assistance from the parish or town council. Local authorities that can help will include district, county and unitary authorities, depending on the arrangements in a particular locality. The Countryside Agency's Village Hall Loan Fund, administered by Action with Communities in Rural England can provide loans towards improvements for village halls. Loans are available over a period of up to five or eight years but may be longer in special cases where the need for an extended period is substantiated.

  The Countryside Agency also can offer assistance to village halls through the community service grants scheme delivered through the Vital Villages programme.

  377W
  It can help fund an alteration/extension of a village hall or other community building where this provides a new or extended service to the community.

  Other sources of public funding include regional development agencies, the Community Fund and the Sports Council. Many organisations achieve the necessary improvements through a mixture of funds including fund raising, commercial or personal sponsorship, parish council and local authority funding and contributions from other public funds as a result of expanding the activities available if improvements expand the suitability and use of the facilities, for instance for sport, or education or training for young people.

  Wter Courses
  Mr. Gale
  To ask the Secretary of State for Environment, Food and Rural Affairs if he will extend the remit of the Environment Agency to include responsibility for critical ordinary water courses to main rivers. [64804]

  Mr. Morley
  [holding answer 27 June 2002]We recently consulted on a Review of Flood and Coastal Defence Funding including a number of options for streamlining the service. These included the possibility of transferring to the EA responsibility for watercourses presenting the most significant flood risk. We have received nearly 300 responses to the consultation, and will be considering these and our conclusions through the summer and autumn.

  Chrysotile Asbestos
  Mr. Cox
  To ask the Secretary of State for Environment, Food and Rural Affairs what the policy of her Department is on the use of chrysotile asbestos in environmental projects for which her Department is responsible. [65054]

  Mr. Meacher
  The Asbestos Prohibitions Regulations 1985 were amended in 1999 to ban the marketing, supply and use of chrysotile from 24 November 1999, with a few limited exceptions where there is no substitute material. Directive I 999/77/EC requires the marketing, supply and use of chrysotile to be completely banned from 1 January 2005. Therefore all derogations/exemptions issued for chrysotile under the 1985 Regulations will cease to apply from that date, apart from a general exemption for research and analysis for all types of asbestos. This Department's policy on the use of chrysotile is in accordance with these legal requirements.

  Refrigerators
  Mr. Cox
  To ask the Secretary of State for Environment, Food and Rural Affairs how many refrigerators have been dumped at rubbish disposal centres in the United Kingdom in the last 12 months. [65052]

  Mr. Meacher
  The figures for refrigerators left at civic amenity sites are not held centrally.

  Bovine TB
  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs what the payment structure is for the Government's compensation scheme for dead bovine TB-infected cattle; and what the time scale is for payment of the compensation. [65687]
  378W
  Mr. Morley
  It is Government policy to pay 100 per cent. of market value, with no upper limit, for cattle that are compulsorily slaughtered under TB control measures.

  The Government recognise that compensation for animals slaughtered should be paid promptly. We are aware of some delays in payment, in some areas, due to the priority given by Animal Health Offices to clearing the backlog of TB testing after the foot and mouth disease outbreak.

  Mr. Wiggin
  To ask the Secretary of State for Environment, Food and Rural Affairs how many confirmed TB herd incidents there have been in 2002, broken down by month, in(a) England, (b) Wales, (c) Herefordshire and (d) Worcestershire. [65686]

  Mr. Morley
  The information is not available in the format requested. The figures for the Hereford and Worcester Animal Health Region are given as a total. Individual totals for the separate counties are not yet available. The table details the information requested.

  Confirmed new TB incidents

  England

  Wales

  Hereford/Worcester

  January

  46

  7

  8

  February

  101

  27

  12

  March

  177

  35

  32

  April

  108

  29

  15

  May

  114

  17

  10

  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs how much money has been spent on(a) testing and (b) investigating TB in cattle in (i) Gloucestershire and (ii) the UK in each of the last four years for which figures are available; and if she will make a statement. [66510]

  Mr. Morley
  [holdinganswer 2 July 2002]The information requested is not available on a UK-wide basis. Total expenditure on TB controls, including testing, and research in GB between 1998–99 and 2000–01 is set out in the table. The information is not available by county.

  Prior to 1998–99 a different method was used to collate the statistics. Therefore we are unable to provide expenditure for four years except at disproportionate cost.

  Figures for 2001–02 are not yet finalised.

  Breakdown of the Government's expenditure on tackling TB in cattle

  £ million

  Expenditure category

  1998–99

  1999–2000

  2000–01

  TB controls, including TB testing

  16.8

  27.1

  20.8

  Research including badger culling trial,other research and Veterinary Laboratory Agency contracts

  8.0

  11.1

  15.1

  Total

  24.8

  38.2

  35.9

  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs how long, on average, it has taken in the last year for which figures
  379W
  are available to compensate a farmer whose cattle have contracted bovine TB in (a) Gloucestershire and (b) England; and if she will make a statement. [66512]

  Mr. Morley
  [holdinganswer 2 July 2002]The average time taken to pay compensation to a random sample of farmers whose cattle have contracted bovine TB in Gloucestershire is approximately ten and a half weeks. The same information for all TB breakdowns in Gloucestershire, or for England as a whole, is not readily available and could be produced only at disproportionate cost.

  The Government believe that compensation for animals slaughtered should be paid promptly. We are aware of payment delays in some areas due to pressure of work generated by increased bovine TB testing in order to reduce the backlog.

  Are You Doing Your Bit? campaign
  Mr. Stunell
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the effectiveness of the Are You Doing Your Bit? campaign. [65728]

  Mr. Meacher
  The effectiveness of the "Are You Doing Your Bit?" campaign has been assessed by surveys of public awareness and attitudes before and after periods of advertising. As "Are You Doing Your Bit?" funds were contributed last year to rural support during the foot and mouth disease outbreak, no advertising or assessment has been carried out by the Department.

  Abandoned Cars
  Mr. Paul Marsden
  To ask the Secretary of State for Environment, Food and Rural Affairs how many abandoned cars there have been in each year since 1997; and if she will make a statement. [65640]

  Mr. Meacher
  Local authorities are responsible for dealing with abandoned vehicles and the Department currently holds no central records of the number of vehicles abandoned each year. However, we estimate that some 350,000 were abandoned in the United Kingdom in 2000.

  Information on the number of abandoned vehicles removed by local authorities has been collected for the first time in the Department's 2000–01 Municipal Waste Management Survey which will be published this summer.

  Regulatory Impact Unit
  Dr. Cable
  To ask the Secretary of State for Environment, Food and Rural Affairs how many members of her Department have been employed in its regulatory impact unit in the past five years; and if she will make a statement. [65967]

  Mr. Morley
  Since the creation of DEFRA on 8 June 2001 there have been four people working full time in the Better Regulation Unit. The unit is supervised by a member of the senior civil service who is also engaged on other duties.

  It is the job of Departmental Regulatory Impact Units to establish and promote the principles of good regulation in their Departments. The staff in each unit work closely
  380W
  with the officials responsible for developing policies within their Department and the Regulatory Impact Unit within Cabinet Office. They focus on those regulations that impact on business, charities, and the voluntary sector.

  Curry Report
  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what representations she has received from interested parties regarding the implementation of the proposals contained in the Curry report; and if she will make a statement. [66520]

  Mr. Morley
  [holding answer 2 July 2002]The Government's discussion document "Sustainable Food and Farming: Working Together" invited views on how to take forward issues identified in the Policy Commission's report on the future of farming and food. Approximately 250 responses have been submitted, supplementing representations made during the extensive process of stakeholder engagement conducted recently. These responses are being analysed and will help inform the construction of a Strategy for Food and Farming in England, to be published this autumn.

  Animals Diseases (North and South Korea)
  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what checks are carried out on(a) people and (b) animals travelling from (i) North and (ii) South Korea to test for diseases related to animals. [66514]

  Mr. Morley
  [holding answer 2 July 2002]Targeted checks on passengers are determined by risk. We alerted enforcement officers to the outbreak of foot and mouth disease in South Korea. We received veterinary advice that there was no significant risk of travellers bringing back the virus provided rules on personal imports of animal products were observed. We hold central information on products seized. We do not hold central information on all checks that are undertaken.

  Veterinary checks and tests are carried out in accordance with EU legislation on imports of registered horses from South Korea and for captive birds from North and South Korea. Imports of non-registered horses from South Korea and all horses from North Korea are not permitted. Imports of all other animals from North and South Korea are not permitted.

  CAP (Support Payments)
  Mr. Kirkwood
  To ask the Secretary of State for Environment, Food and Rural Affairs how many farms in the Scottish Borders receive(a) available support payments and (b) livestock support payments from CAP schemes in excess of £200,000 per year. [66047]

  Mr. Morley
  [holding answer 2 July 2002]The payment of Common Agricultural Policy subsidies to farmers is a devolved matter and hence information in relation to such payments to farms in the Scottish Borders is a matter for the Scottish Executive.

  Kyoto Protocol
  Mr. Wray
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress the UK has made with regard to the Kyoto Protocol. [66642]
  381W
  Mr. Meacher
  The UK completed ratification of the Kyoto Protocol with all other EU member states on 31 May. In order for the Kyoto Protocol to enter into force, it must be ratified by at least 55 countries, including developed countries accounting for at least 55 per cent. of this industrialised group's emissions in 1990. We hope it will enter into force as soon as possible although in practice this is now unlikely before early 2003. The UK remains committed to the Kyoto Protocol as the framework for taking forward global action to tackle climate change. Our target under Kyoto is to reduce our greenhouse gas emissions by 12.5 per cent. below 1990 levels by 2008–12. UK emissions were returned to 1990 levels by 2000 and we are well on course to meet our Kyoto target.

  EU Directive 1999/74/EC
  Mr. Breed
  To ask the Secretary of State for Environment, Food and Rural Affairs what economic assessment she has made of recent proposals to bring forward implementation of EU Directive 1999/74/EC. [66349]

  Mr. Morley
  A full regulatory impact assessment concerning implementation of council directive 1999/74/EC into domestic legislation has already been laid before the House. A partial regulatory impact assessment will form part of the forthcoming consultation on the proposal to ban enriched cages from 2012.

  Mr. Breed
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent discussions and representations she has had regarding implementation of EU Directive 1999/74/EC. [66350]

  Mr. Morley
  Since the public consultation on implementation of EU Directive 1999/74/EC into English legislation, Ministers and officials have regularly met with stakeholders to discuss the way forward and will continue to do so.

  Nitrate Vulnerable Zones
  Mr. Breed
  To ask the Secretary of State for Environment, Food and Rural Affairs what economic assessment she has made of her proposals regarding the establishment of nitrate vulnerable zones in England; and what estimates she has made of the cost of the implementation of an(a) 100 per cent., (b) 80 per cent. and (c) 55 per cent. nitrate vulnerable zone in England. [66351]

  Mr. Meacher
  A partial regulatory impact assessment (RIA) was published in the consultation document "How should England implement the 1991 Nitrates Directive?" in December 2001. This estimated the net annual cost to the agricultural industry of applying action programme measures as £32 million for the whole country approach and £23 million for the discrete area nitrate vulnerable zone approach.

  As the Secretary of State announced on 27 June, the Government have decided to pursue the discrete area nitrate vulnerable zone approach. Since the consultation we have refined the map to identify more precisely the land draining into each nitrate-polluted or eutrophic water. We also published a revised regulatory impact assessment, which reworked the implementation costs for
  382W
  the refined NVZ area and also took into account comments made in response to the consultation. The revised estimate is £20 million per year.

  Foot and Mouth
  Dr. Gibson
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent changes have been made to the European Union's policy on vaccination-to-live relating to foot and mouth; and what research she has recently commissioned on tests to differentiate between vaccinated and infected animals. [66149]

  Mr. Morley
  [holding answer 2 July 2002]No recent changes have been made to the European Union's policy on vaccination in relation to foot and mouth disease.

  DEFRA are currently in the process of approving a project to develop a test using non-structural proteins to distinguish between vaccinated and infected animals, and are examining its feasibility for use on a herd basis to detect exposed animals. Following on from this, a study will be undertaken to examine what would be an appropriate sampling regime to detect infection in vaccinated herds exposed to infection. However, at present, the test is not internationally recognised as a validated test.

  Mr. Drew
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) if she will make a statement on her Department's involvement with the European Parliament's foot and mouth investigation; [65030]

  (2) what liaison there has been with representatives of the EU during the Parliament's investigation into the foot and mouth outbreak in the United Kingdom. [65008]

  Mr. Morley
  [holding answer 27 June 2002]DEFRA Ministers and officials have already met the European Parliament Temporary Committee into Foot and Mouth Disease. Nick Brown and Jim Scudamore met the Committee on 25 and 26 March and Lord Whitty and myself met the Committee on 8 April. The Secretary of State plans to meet the Committee on 12 September 2002.

  The DEFRA Inquiry Liaison Unit has maintained contact with and supported the Secretariat of the European Parliament Temporary Committee throughout.

  Energy
  Mr. Stunell
  To ask the Secretary of State for Environment, Food and Rural Affairs what the estimated(a) level and (b) cost of energy use in her Department and associated agencies was in each year since 1997; what proportion of energy was generated from renewable sources; and if she will make a statement. [65949]

  Alun Michael
  For details of the breakdown of costs of energy purchases for each English Government Department for the years 1997–98 to 1999–2000, I refer the hon. Member to the answer I gave to the hon. Member for Buckingham (Mr. Bercow) on 19 March 2002,Official Report, column 268W. However, for convenience the data, without the footnotes, and supplemented by the respective level of energy consumption, are reproduced herein.
  383W
  The Government are keen to encourage the use of renewable energy on its estate and a significant step forward was made with the agreement, in May 2001, of the following renewable energy target across Government:
  "All Departments will ensure that, by 31 March 2003, at least 5 per cent. of their electricity comes from renewable sources that are exempt from the climate change levy, or from self-generation, provided this does not entail excessive cost. This will rise to at least 10 per cent. supply from such sources by 31 March 2008, but will be reviewed after 31 March 2003 to take account of market conditions following the introduction of renewables obligation.
  The review of 2003 will include consideration of increasing or bringing forward the target."

  Energy consumption and expenditure by Government Departments 1997–98 to 1999–2000

  1997–98

  1998–99

  1999–2000

  Energy use(GWh)

  Expenditure(£)

  Energy use(GWh)

  Expenditure(£)

  Energy use(GWh)

  Expenditure(£)

  MAFF

  39.1

  1,196,306

  42.1

  1,270,719

  39.7

  1,155,485

  MAFF Labs

  86.8

  2,010,656

  84.9

  1,877,991

  93.5

  1,880,441

  Cabinet Office

  21.7

  693,234

  20.2

  717,622

  21.0

  767,895

  DCMS

  3.1

  121,916

  2.4

  106,634

  2.0

  122,991

  HM Customs and Excise

  84.3

  2,414,356

  84.8

  2,370,071

  89.4

  2,431,032

  DfEE

  31.3

  1,347,403

  29.1

  1,056,810

  29.5

  1,111,660

  Employment Service

  171

  4,848,133

  177

  4,946,793

  190

  4,960,622

  DETR

  116

  4,099,099

  113

  3,993,520

  109

  3,473,024

  H&SE

  19.2

  668,883

  18.7

  582,679

  18.6

  570,336

  QE2 Conf. Centre

  10.4

  347,200

  12.8

  324,614

  11.8

  305,739

  FCO

  37.7

  990,362

  34.8

  921,380

  31.7

  1,033,203

  DoH

  18.3

  738,355

  21.6

  786,383

  21.8

  758,908

  Home Office

  65.4

  1,792,543

  69.0

  1,911,139

  80.5

  2,378,335

  HM Prison Service

  1,410

  23,868,557

  1,120

  20,016,907

  1,260

  22,310,050

  Inland Revenue

  245

  8,192,613

  275

  8,138,451

  269

  8,772,679

  DflD

  6.2

  225,513

  6.5

  209,602

  6.9

  183,574

  Lord Chancellors Department

  182

  5,258,187

  187

  5,282,774

  167

  5,021,175

  DSS

  519

  13,805,000

  468

  11,474,213

  472

  11,327,417

  DTI

  51.6

  2,312,915

  51.5

  1,847,819

  55.7

  2,117,249

  HM Treasury

  17,0

  336,547

  16.3

  316,314

  20.3

  337,396

  Note:

  In a few cases figures were revised from one report to another. The figures here are the latest published. The energy consumption figures are as purchased; therefore they are unadjusted for weather and floor area changes. The energy use figures in the table consist of a mix of electricity and heating fuels which have very different unit prices. Total expenditure will, therefore, depend on the total mix of fuels as well as individual prices.

  Purchases of electricity from renewable sources 1998–99 and 1999–2000

  1999–2000

  Department

  1998–99

  Renewable sources that are exempt from the Climate Change Levy (percentage of electricity)

  Other "green" electricity sources (percentage)

  Total(percentage)

  CO

  25 per cent. of No. 10 and 70 Whitehall electricity

  3.5

  0

  3.5

  C&E

  5 per cent. of total monitored electricity

  26

  0

  26

  DETR

  0 per cent.

  10

  0

  20

  DFEE

  10 per cent. of electricity

  10

  110

  20

  DH

  0 per cent.

  0

  NHS PASA: 142

  NHS PASA: 42

  DSS

  31 sites have all electricity supplied from renewable sources, totalling 15.2 per cent. of all DSS electricity consumption

  15.2

  10.38

  15.58

  DTI

  26 per cent. HQ consumption from renewable sources

  13.3

  12

  15.3

  HO

  0 per cent.

  3

  0

  3

  MAFF

  0 per cent.

  3

  0

  3

  MOD

  0 per cent.

  less than 1

  1less than 1

  less than 1

  1 Percentage of electricity is from other "green" sources.

  384W
  Progress by individual Departments is partly dependent upon the expiry date for their current energy contracts. However, all central Government Departments in England report that they are in the process of considering how they will go about purchasing renewable energy or are considering self-generation options.

  Details of renewable energy purchases can be found in the Green Ministers Reports, copies of which are in the Library of the House, or through http://www.defra.gov.uk/ environment/greening/minister/grmin.htm. However, for convenience the relevant data are reproduced in the tables.

  Energy costs and details of renewable energy purchases for 2000–01 and 2001–02 will be published in the next Green Ministers Report in autumn 2002.

CABINET OFFICE

  EU Directives
  Mr. Bercow
  To ask the Minister for the Cabinet Office 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. [64998]

  Mr. Alexander
  The Cabinet Office has not been responsible for implementing any EU Directives or Regulations in 2002.

  Mr. Bercow
  To ask the Minister for the Cabinet Office if he will list the EU directives relating to his Department which have been(a) amended and (b) repealed in 2002. [64949]

  Mr. Alexander
  Cabinet Office Ministers were responsible for negotiating a Directive to amend the Equal Treatment Directive (76/207EC) which was undertaken by co-decision and was settled in Council on 13 June. The Cabinet Office has not been responsible for repealing any EU Directives in 2002.

  Consultation Guidance
  Lynne Jones
  To ask the Minister for the Cabinet Office what evaluation has been made of the impact of the How to Consult your Users guide; and if he will make a statement. [65796]

  Mr. Alexander
  The Cabinet Office has no plans to evaluate the impact of 'How to Consult Your Users'. Improving service delivery and policy making through consultation with users continues to be an important priority for the Government. The Office for Public Services Reform works with and encourages Government Departments and public agencies to conduct and act upon customer satisfaction surveys to ensure that the voice of the customer is central to service delivery. The Centre for Management and Policy Studies is also developing a `consultation toolkit' to help policy makers across Government to consult more effectively on policy. The impact of the Code of Practice on Written Consultation will he evaluated from the end of this year.

  Regulatory Impact Unit
  Dr. Cable
  To ask the Minister for the Cabinet Office how many members of his Department have been employed in its Regulatory Impact Unit in the past five years; and if he will make a statement. [65963]

  Mr. Alexander
  I have been asked to reply.

  The Cabinet Office's Regulatory Impact Unit had the following complement of staff over the last five years:

  Year1

  Number of staff2

  1997–98

  50

  1998–99

  53

  1999–2000

  53

  2000–01

  58

  2001–02

  65

  1 April to 31 March.

  2 Employed at 31 March.

  The Regulatory Impact Unit in the Cabinet Office also works closely with departmental Regulatory Impact Units.
  386W
  It is the job of departmental Regulatory Impact Units to establish and promote the principles of good regulation in their Departments. The staff in each unit works closely with the officials responsible for developing policies within their Department. They focus on those regulations that impact on business, charities, and the voluntary sector.

  Castle Award
  Mr. Tynan
  To ask the Minister for the Cabinet Office if his Department has applied for a Castle award for equal pay. [65221]

  Mr. Alexander
  The Cabinet Office has applied for a Castle award for producing a comprehensive Equal Pay Guide for Departments and agencies. The guide will help towards meeting the Government's commitment that all Departments and agencies would undertake an equal pay review and have in place any necessary action plans by April 2003. It draws on best practice in the public and private sectors.

  Annual Leave
  Mr. Bercow
  To ask the Minister for the Cabinet Office what the average annual leave entitlement is for staff in his Department in 2002. [64648]

  Mr. Alexander
  I refer the hon. Member to the answer given by my hon. Friend the Member for Shipley (Mr. Leslie) on 4 February 2002,Official Report, column 708W.

  Information about average leave entitlements could be provided only at disproportionate cost.

  Nuclear Waste
  Mr. Weir
  To ask the Minister for the Cabinet Office what discussions he has had on emergency planning with local authorities along the route from Dounreay to Drigg regarding the dangers posed by moving nuclear waste by road. 165112]

  Mr. Jamieson
  I have been asked to reply.

  Specific requirements concerning emergency planning are contained in The Radioactive Material (Road Transport) Regulations 2002. These place duties on consignors and carriers to have appropriate emergency procedures in place. The nuclear operators have in place an emergency response scheme, RADSAFE, which is regularly exercised in co-operation with the emergency services and local authorities.

  Mr. Weir
  To ask the Minister for the Cabinet Office what assessment he has made of the implication of moving nuclear waste from Dounreay to Drigg by(a) road and (b) rail. [65110]

  Mr. Jamieson
  I have been asked to reply.

  Such transport would be subject to stringent safety requirements, based upon the international "Atomic Energy Agency's Regulations for the Safe Transport of Radioactive Material" as required by (a) The Radioactive Material (Road Transport) Regulations 2002 and (b) The Packaging, Labelling and Carriage of Radioactive Material by Rail Regulations 1996.
  387W
  Mr. Weir
  To ask the Minister for the Cabinet Office what discussions he has had on emergency planning with the Scottish Executive regarding the dangers posed by moving nuclear waste by(a) road and (b) rail from Dounreay to Drigg. [65111]

  Mr. Jamieson
  I have been asked to reply.

  Specific requirements concerning emergency planning are contained in (a) The Radioactive Material (Road Transport) Regulations 2002 and (b) The Packaging, Labelling and Carriage of Radioactive Material by Rail Regulations 1996. These place duties on (a) consignors and carriers and (b) train operators, facility owners and rail infrastructure controllers, to have appropriate emergency procedures in place. The nuclear operators have in place an emergency response scheme, RADSAFE, which is regularly exercised in
  co-operation with the emergency services and local authorities.

EDUCATION AND SKILLS

  Disclosure of Interests
  Mr. Paul Marsden
  To ask the Secretary of State for Education and Skills what rules apply to the disclosure of interests on the part of those serving on public bodies which are responsible to her Department. [56453]

  Mr. Stephen Twigg
  All advisory and executive non-departmental public bodies are required to adopt a board members' code, based on guidance produced by Cabinet Office, and they should have registers of interests. The definition of interests is ultimately for individual Departments since they are best placed to decide what might be thought to influence members on their NDPBs. The following list shows the NDPBs sponsored by this department and in each case indicates the relevant Code.The Adult Learning Inspectorate (ALI) "Code of Practice for Board and Committee Members" is available on request from ALI and will shortly be available on the body's website.
  The British Educational Communications and Technology Agency (Becta) "Board Members Code of Practice" is available on request from the Chief Executive's Office.
  The Construction Industry Training Board (CITE) "Code of Best Practice for Board Members of CITB" is available on request from the CITB Board Secretary.
  The Engineering Construction Industry Training Board (ECITB) "Code of Best Practice for Board Members of ECITB" is available on request from the ECITB Board Secretary.
  The Higher Education Funding Council for England (HEFCE) "Code of Best Practice for Board Members of the HEFCE" is available on the HEFCE website.
  Investors in People UK Ltd (IiP UK) have adopted the Cabinet Office model Board Members' Code.
  The Learning and Skills Council (LSC) "Code of Conduct" can be viewed at the Council's Coventry office.
  The National College for School Leadership (NCSL) have adopted the Cabinet Office model Board Members' Code.
  The Qualifications and Curriculum Authority (QCA) "Code of Practice for Members of the QCA" is available on request and will shortly be placed on the body's website.
  The School Teachers' Review Body (STRB) "Code of Conduct" is held by the Secretary.

  388W

  The Sector Skills Development Agency (SSDA) is a newly formed NDPB established from 1 April 2002, it currently has a draft "Code of Practice for Board Members".
  The Student Loans Company (SLC) "Code of Best Practice for Board Members" is held by the Company Secretary.
  The Teacher Training Agency (TTA) "Conduct of the TTA's Business" is available on request, a synopsis is available on the TTA website.

  Departmental Expenditure Limit
  Mr. Bercow
  To ask the Secretary of State for Education and Skills how much and what proportion of the departmental expenditure limit for 2002–03 will be accounted for by staff costs; what the figures were for 2001–02; and if she will make a statement. [61024]

  Estelle Morris
  Figures for 2002–03 are unavailable because staff costs are dependent on pay negotiations that are currently under way. The figures for 2001–02 including OFSTED (taken from the 2002 Departmental Report—Cm 5402) are:

  staff costs, £140 million;

  Departmental Expenditure Limit (DEL), £19,471 million;

  staff costs as a proportion of DEL, 0.7 per cent.

  Primary Schools
  Mr. Gardiner
  To ask the Secretary of State for Education and Skills if she will investigate the effects on primary schools league tables resulting from children who have been registered for year 6 SATS being subsequently unable to sit them through(a) illness and (b) unauthorised absence. [65204]

  Mr. Stephen Twigg
  I refer my hon. Friend to the reply given on 24 May 2002, Official Report, column 662W.

  Nationally, in 2001, the percentage of pupils absent from the Key Stage 2 tests for each subject was:

  Subject

  Percentage

  English

  1

  mathematics

  1

  science

  2

  School Visits
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills (1) if she will list the schools she has visited since she became Secretary of State; [65086]

  (2) how many of the schools she has visited in England and Wales are unsatisfactory; [65087]

  (3) what criteria she has used to decide which of the schools she has visited are unsatisfactory; [65088]

  (4) if she will list the schools she has visited that are unsatisfactory; [65089]

  (5) what her estimate is of the total number of schools in England and Wales that are unsatisfactory. [65090]

  Mr. Willis
  To ask the Secretary of State for Education and Skills which secondary comprehensive schools she has visited since 1997; and which were unsatisfactory. [65399]
  389W
  Mr. Miliband
  [holding answer 1 July 2002]My right hon. Friend has visited 33 schools in England since becoming Secretary of State last year. These schools are as listed. She also visited many schools in her previous ministerial posts between 1997 and 2001. Two of the schools she has visited as Secretary of State were designated by Ofsted as requiring special measures because they were failing to provide pupils with an acceptable standard of education. Just under 300 schools in England—less than 1.3 per cent. of the total—are currently designated by Ofsted as requiring special measures. A further 2.4 per cent. of schools are designated by Ofsted as having serious weaknesses.

  2001

  1. 12 June—Henry Compton school, London, SW6 6SN

  2. 15 June—Mapledene junior school, Birmingham

  3. 15 June—Whittington Oval school, Birmingham

  4. 21 June—St. Paul's Way community school, London E3 4AN

  5. 22 June—Cottesbrooke junior school, Birmingham

  6. 13 July—Redhill primary school, Birmingham

  7. 5 September—Swanlea school, London. El 5DJ

  8. 10 September—Hamilton special school, Birmingham

  9. 17 September—Blatchington Mill school, East Sussex

  10. 20 September—Golden Hillock school. Birmingham

  11. 24 September—St. Thomas More school, Birmingham

  12. 9 October—Langdon school, London E6 2PS

  13. 19 October—Corpus Christi Catholic primary school, Birmingham

  14. 2 November—Shaw Hill primary school, Birmingham

  15. 15 November—Sheldon Heath school, Birmingham

  16. 21 November—Lammas school, London, EIO 7LZ

  17. 26 November—Whalley Range high school, Manchester

  18. 10 December—Greensward college, Essex

  2002

  19. 18 January—Blakenhale infant school, Birmingham

  20. 13 March—Stanley Technical high school, London, SE25 6AD

  21. 14 March—Fawkham primary school, Kent

  22. 20 March—Oaklands school, Tower Hamlets, London

  23. 22 March—St. Bernadette's school, Birmingham

  24. 10 April—Charles Edward Brooke primary school, London. SW9 6UL

  25. 15 April—Norton primary school, Stoke

  26. 15 April—Blurton primary school, Stoke

  27. 19 April—Hall Green primary school, Birmingham

  28. 13 May—St. Monica's primary school, London, N14 7HE

  29. 21 May—Beacon Hill special school, Ipswich

  30. 31 May—Yardley infant school, Birmingham

  31. 10 June—Millennium school, London, SE 10 OBG

  32. 14 June—Acock's Green infant school, Birmingham

  33. 26 June—Oliver Goldsmith primary school, Camberwell, London.

  Extended School Programme
  Mr. Frank Field
  To ask the Secretary of State for Education and Skills what progress has been made with her Department's extended school programme. [66166]

  Mr. Stephen Twigg
  We are encouraging all schools to extend the services they offer for the benefit of pupils, their families and the wider community. The Education
  390W
  Bill, currently before Parliament, will establish a clear legal framework for schools wanting to provide extended services. We intend to publish guidance later this year to help schools and their partners develop this approach. We also intend to support a number of pathfinder projects to demonstrate a range of patterns in different settings. We will evaluate these projects and disseminate good practice.

  Overseas Trained Teachers
  Mr. Drew
  To ask the Secretary of State for Education and Skills (1) what investigation she carries out into those agencies which are supplying overseas trained teachers for employment in British schools; [66629]

  (2) what help is available to overseas trained teachers who have found employment in British schools for familiarisation with the education system; and for what period this lasts; [66630]

  (3) if she will make a statement on whether overseas trained teachers are subject to normal qualified teacher status procedures; 166631]

  (4) what the cost has been to the British education system of employing overseas trained teachers in each year since 1999. [66632]

  Mr. Miliband
  Employment agencies in Great Britain are regulated under the Employment Agencies Act 1973 and associated regulations, which are the responsibility of my right hon. Friend the Secretary of State for Trade and Industry. The DTI Employment Agency Standards Inspectorate enforces the legislation and investigates complaints about the conduct of agencies.

  Induction arrangements for new teachers are the responsibility of the recruiting school or local education authority. Many provide such training and support networks. Those in London will, in future, be further supported by the new Recruitment and Retention Unit in the Government office for London.

  In order to teach in a maintained school in England it is generally necessary to hold Qualified Teacher Status (QTS). Current regulations do not allow for the automatic recognition of teaching qualifications gained abroad, unless the teacher is a national of a member state of the European Economic Area (EEA). The Education (Teachers) Qualifications and Health Standards Regulations 1999 (as amended) allow schools to appoint overseas trained teachers without QTS in three circumstances: as trainees on an employment based route; as a temporary teacher in a school or a number of schools for up to four years without QTS; as 'instructors'—persons offering particular skills who may he appointed when no qualified teacher with such skills is available.

  The information about costs is not collected centrally.

NORTHERN IRELAND

  Competitive Tendering
  Mr. Collins
  To ask the Secretary of State for Northern Ireland on how many occasions in the last 12 months the requirement to engage in a competitive tendering process
  391W
  has been waived by his Department due to national security obligations under paragraph 6(h) of the supply regulations. [62821]

  Jane Kennedy
  None.

  North Belfast
  Mr. Dodds
  To ask the Secretary of State for Northern Ireland how many juveniles have been prosecuted since 1 July 2001 arising out of disturbances in North Belfast. [62643]

  Jane Kennedy
  The information requested is not available at this time due to a database upgrading exercise being undertaken which should be concluded by late summer 2002.

  Regulatory Impact Unit
  Dr. Cable
  To ask the Secretary of State for Northern Ireland how many members of his Department have been employed in its regulatory impact unit in the past five years; and if he will make a statement. [659731

  Jane Kennedy
  None.

  Organised Crime Task Force
  David Taylor
  To ask the Secretary of State for Northern Ireland if he will make a statement on the Organised Crime Task Force's second annual threat assessment. [65737]

  Jane Kennedy
  I congratulate the Organised Crime Task Force, on their first year's work. Much has been achieved—the figures in the second annual threat assessment and strategy documents speak for themselves—but we are under no illusions that there is much more to be done. Fighting organised crime will be a long and hard struggle. This year, as it was last year, the priority areas for concerted multi-agency effort are extortion, drugs, oils-related fraud, tobacco and alcohol duty evasion and money laundering. In addition, we have added two new strategic priority areas: the trade in counterfeit goods, as this has an on—going potential to affect investment in Northern Ireland; and armed robbery, which is on the increase here, while declining elsewhere in the United Kingdom.

  No one should doubt that we have the resources and determination to pursue it to the utmost. The publication of the threat assessment and strategy for dealing with organised crime in Northern Ireland, shows that the agencies involved have made an impressive start.

  Ministerial Accommodation
  Mr. Evans
  To ask the Secretary of State for Northern Ireland what publicly owned accommodation is made available to him in his official role; how many nights he has been in residence at each of these properties in the last 12 months; and what the total cost is of maintaining each of these properties. [55103]

  Dr. John Reid
  Accommodation in Hillsborough Castle is made available to me as a residence while in Northern Ireland. The Castle is also Her Majesty the Queen's residence in the province, is used as a conference centre, hosts charity fund raising events and is open to the public.
  392W
  Between April 2001 and March 2002 I stayed there for 144 nights and between March 2002 and May 2002 I have stayed for 29 nights.

  The total running costs for Hillsborough Castle for the last financial year were £1.1 million.

FOREIGN AND COMMONWEALTH AFFAIRS

  Diversity Agenda
  Keith Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what initiatives he has undertaken since 7 June concerning the Diversity Agenda at his Department. [64823]

  Mr. Mike O'Brien
  The FCO continues to work on the implementation of its diversity strategy, "Investing for Tomorrow", a copy of which is in the Library of the House. The strategy was refreshed earlier this year and incorporates duties under the Race Relations (Amendment) Act 2000. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, also discussed diversity issues when he met Trade Union representatives on 24 June.

  Zimbabwean Police
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the end use monitoring undertaken by his Department of the use of the Land Rover Defender vehicles provided to the Zimbabwean Police as part of a DfID funded project. [65036]

  Mr. MacShane
  This Department has taken a close interest in the use made by the Zimbabwe Republic Police of Land Rovers partly funded by HMG. Prior to the general elections in early 2000, we registered our strong concern with the Zimbabwean Home Minister that they were being used for political ends. The lack of a satisfactory response led to the decision taken by my right hon. Friend, the Secretary of State for International Development, to suspend further deliveries in May 2000.

  Gujarat
  Chris Grayling
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent disturbances in the Gujarat region of India. [65405]

  Mr. Mike O'Brien
  We share my hon. Friends' concerns over the recent communal violence and deaths in Gujarat. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has been in regular contact with the Governnment of India on the situation in Gujarat, including during his most recent visit to India on 29 May, when he raised this with Mr. Advani, the then Indian Minister for Home Affairs. He raised the case of the four British nationals who were attacked by a mob on 28 February and urged that those responsible be brought to justice. The Government of India have themselves strongly condemned the violence in Gujarat, and have given assurances, which we welcome, that they will take action to bring to justice perpetrators of all the killings and violence. My right hon. Friend has also met the
  393W
  families of the four British nationals who were attacked during the violence, and raised their cases with the Government of India during his 29 May visit.

  Poland
  Mr. David
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about German land claims in that part of Poland ceded by Germany in 1945. [65591]

  Peter Hain
  The administrative borders between Poland and Germany were drawn up as part of the Potsdam Agreement in 1945 pending a final delimitation of borders at a peace settlement. No peace settlement was ever concluded. The borders between Poland and the Federal Republic of Germany were confirmed by the 1990 Treaty of Final Settlement with Respect to Germany signed by the Allied powers and the then two German states. They were confirmed in bilateral treaties agreed by Poland and the Federal Republic of Germany in November 1990 and June 1991.

  Carpathian Initiative
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support the Government are providing to the Carpathian Initiative; and if he will make a statement. [65709]

  Peter Hain
  The Department for International Development has contributed £180,000 to a project in Miercurea Ciuc, Romania to promote sustainable economic regeneration through public/private partnerships. The implementing agencies for this project are the Romanian Environmental Partnership Foundation and the Polish Environmental Partnership Foundation, both of which have links with the Carpathian Initiative. However, HMG provides no direct funding support to the Carpathian Initiative.

  MI6
  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs at what level, and under what circumstances, it can be decided within MI6 that information held may not be seen by Ministers. [65153]

  Mr. Straw
  [holdinganswer 2 July. 2002]The Secret Intelligence Service carries out its functions under the Intelligence Services Act 1994 under my authority. The Act provides for the Chief of SIS to be appointed by the Secretary of State and imposes a duty on the Chief to ensure that there are arrangements, which I approve, for securing that no information is obtained by SIS except so far as is necessary for the proper discharge of its functions. I can foresee no circumstances in which information could be withheld from Ministers given these statutory responsibilities.

  Communications (Interception)
  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy that, where a foreign security agency is asked by a UK body authorised to carry out interception of communications on its behalf relating to a UK citizen,394W
  there shall be a requirement for permission to be sought as if the interception were to be carried out by the UK body itself. [65157]

  Mr. Straw
  [holdinganswer 2 July 2002]In so far as the agencies for which I have responsibility undertake interception activities, this is consistent with the requirements of the Regulation of Investigatory Powers Act 2000 and the Intelligence Services Act 1994. It is not government policy to comment on any intelligence arrangements that might exist between the UK and other countries.

  Government Communications Headquarters
  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs under what circumstances GCHQ facilities are used to(a) monitor and (b) intercept communications involving United Kingdom nationals where the communication originates or terminates outside the United Kingdom. [65651]

  Mr. Straw
  It is a long-standing practice of this Government and previous Administrations not to comment on the activities of the intelligence services. The interception of communications is governed by the Regulation of Investigatory Powers Act 2000 and overseen by the Interception of Communications Commissioner. GCHQ, like any other Government agency empowered to apply for a warrant under the Act, may intercept "external communications" (as defined by the Act) if the conditions required for the issuing of a warrant set out in Sections 5, 8 and 15 and 16 are met.

  Kenya
  Mr. Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has collated about the Government of Kenya's proposals to change the law allowing an extension of the term of the Kenyan Parliament. [66050]

  Mr. MacShane
  On 18 June some KANU MPs called for extension of the current Parliament to allow time for the constitutional review to be completed and for the new constitution to be passed into law before the next general election. An extension would require Parliament to pass a constitutional amendment. To date Parliament has not debated the issue.

  Mr. Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Kenya about the need for free and fair parliamentary elections there. [66049]

  Mr. MacShane
  The need for free and fair elections features regularly in our contacts with the Kenyan Government and officials.

  Visa Applications
  Mr. Simon Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many visa applications from Arab countries have been rejected in each month since September 1999. [65233]

  Mr. Mike O'Brien
  Figures for the number of applications refused between September 1999 and May 2002 in Arab countries are listed in the table.
  395W

  Number of refusals at Arab posts

  Country

  Post

  January

  February

  March

  April

  May

  June

  1999

  UAE

  Abu Dhabi and Dubai

  —

  —

  —

  —

  —

  —

  Jordan

  Amman

  —

  —

  —

  —

  —

  —

  Bahrain

  Bahrain

  —

  —

  —

  —

  —

  —

  Lebanon

  Beirut

  —

  —

  —

  —

  —

  —

  Egypt

  Cairo

  —

  —

  —

  —

  —

  —

  Morocco

  Casablanca

  —

  —

  —

  —

  —

  —

  Syria

  Damascus

  —

  —

  —

  —

  —

  —

  Qatar

  Doha

  —

  —

  —

  —

  —

  —

  Kuwait

  Kuwait

  —

  —

  —

  —

  —

  —

  Oman

  Muscat

  —

  —

  —

  —

  —

  —

  Saudi Arabia

  Riyadh and Jedda

  —

  —

  —

  —

  —

  —

  Yemen

  Sana'a

  —

  —

  —

  —

  —

  —

  Tunisia

  Tunis

  —

  —

  —

  —

  —

  —

  Total

  —

  —

  —

  —

  —

  —

  2000

  UAE

  Abu Dhabi and Dubai

  135

  123

  123

  77

  164

  153

  Jordan

  Amman

  4

  17

  15

  18

  24

  9

  Bahrain

  Bahrain

  2

  4

  1

  5

  7

  17

  Lebanon

  Beirut

  10

  6

  9

  4

  13

  6

  Egypt

  Cairo

  52

  39

  29

  42

  63

  60

  Morocco

  Casablanca

  19

  22

  44

  20

  37

  37

  Syria

  Damascus

  22

  24

  74

  26

  65

  58

  Qatar

  Doha

  9

  10

  11

  8

  21

  41

  Kuwait

  Kuwait

  72

  57

  38

  47

  62

  69

  Oman

  Muscat

  8

  5

  11

  9

  11

  7

  Saudi Arabia

  Riyadh and Jedda

  44

  79

  63

  32

  102

  168

  Yemen

  Sana'a

  18

  71

  38

  67

  86

  70

  Tunisia

  Tunis

  52

  69

  68

  65

  87

  92

  Total

  447

  526

  524

  420

  742

  787

  2001

  UAE

  Abu Dhabi and Dubai

  84

  133

  84

  68

  200

  258

  Algeria

  Algiers

  0

  0

  0

  0

  0

  0

  Jordan

  Amman

  16

  20

  19

  16

  4

  9

  Bahrain

  Bahrain

  1

  1

  3

  3

  4

  8

  Lebanon

  Beirut

  12

  2

  3

  4

  5

  2

  Egypt

  Cairo

  98

  65

  72

  35

  112

  78

  Morocco

  Casablanca

  14

  19

  14

  13

  14

  11

  Syria

  Damascus

  26

  53

  50

  69

  53

  57

  Qatar

  Doha

  16

  19

  12

  10

  29

  33

  Saudi Arabia

  Riyadh and Jedda

  53

  49

  48

  43

  69

  79

  Kuwait

  Kuwait

  57

  19

  32

  31

  30

  74

  Oman

  Muscat

  10

  12

  7

  11

  15

  15

  Yemen

  Sana'a

  56

  33

  16

  36

  22

  46

  Libya

  Tripoli

  28

  30

  44

  53

  102

  20

  Tunisia

  Tunis

  98

  45

  57

  81

  55

  60

  Total

  569

  500

  461

  473

  714

  750

  2002

  UAE

  Abu Dhabi and Dubai

  171

  137

  112

  206

  193

  —

  Algeria

  Algiers

  0

  0

  0

  0

  0

  —

  Jordan

  Amman

  13

  24

  18

  32

  15

  —

  Bahrain

  Bahrain

  6

  4

  11

  3

  12

  —

  Lebanon

  Beirut

  1

  3

  16

  22

  10

  —

  Egypt

  Cairo

  107

  102

  101

  99

  147

  —

  Morocco

  Casablanca and Rabat1

  23

  23

  26

  31

  25

  —

  Syria

  Damascus

  29

  69

  83

  66

  58

  —

  Qatar

  Doha

  9

  21

  21

  25

  30

  —

  Saudi Arabia

  Jedda

  101

  69

  47

  46

  62

  —

  Kuwait

  Kuwait

  31

  36

  33

  53

  50

  —

  Oman

  Muscat

  5

  13

  10

  17

  25

  —

  Yemen

  Sana'a

  37

  49

  47

  70

  51

  —

  Libya

  Tripoli

  138

  131

  70

  72

  142

  —

  Tunisia

  Tunis

  90

  77

  97

  70

  91

  —

  Total

  761

  758

  692

  812

  911

  —

  1 From April 2002

  Note:

  We are awaiting figures for May 2002
  396W 397W

  Number of refusals at Arab posts

  Country

  Post

  July

  August

  September

  October

  November

  December

  1999

  UAE

  Abu Dhabi and Dubai

  —

  —

  95

  64

  148

  48

  Jordan

  Amman

  —

  —

  39

  24

  20

  12

  Bahrain

  Bahrain

  —

  —

  11

  3

  7

  2

  Lebanon

  Beirut

  —

  —

  29

  13

  22

  12

  Egypt

  Cairo

  —

  —

  80

  44

  42

  20

  Morocco

  Casablanca

  —

  —

  39

  36

  22

  57

  Syria

  Damascus

  —

  —

  55

  48

  22

  12

  Qatar

  Doha

  —

  —

  17

  17

  17

  10

  Kuwait

  Kuwait

  —

  —

  24

  28

  47

  52

  Oman

  Muscat

  —

  —

  8

  4

  8

  5

  Saudi Arabia

  Riyadh and Jedda

  —

  —

  142

  103

  101

  92

  Yemen

  Sana'a

  —

  —

  9

  10

  32

  35

  Tunisia

  Tunis

  —

  —

  115

  75

  98

  56

  Total

  —

  —

  663

  469

  586

  413

  UAE

  Abu Dhabi and Dubai

  164

  132

  119

  143

  111

  55

  Jordan

  Amman

  14

  20

  14

  7

  22

  8

  Bahrain

  Bahrain

  42

  8

  6

  6

  6

  3

  Lebanon

  Beirut

  21

  13

  27

  3

  5

  5

  Egypt

  Cairo

  63

  80

  57

  50

  78

  77

  Morocco

  Casablanca

  60

  54

  44

  27

  25

  37

  Syria

  Damascus

  79

  34

  43

  52

  73

  35

  Qatar

  Doha

  71

  49

  16

  16

  13

  13

  Kuwait

  Kuwait

  60

  54

  40

  50

  55

  57

  Oman

  Muscat

  24

  22

  10

  8

  6

  6

  Saudi Arabia

  Riyadh and Jedda

  181

  168

  101

  66

  60

  44

  Yemen

  Sana'a

  57

  74

  87

  40

  43

  30

  Tunisia

  Tunis

  89

  123

  115

  106

  117

  66

  Total

  925

  831

  679

  574

  614

  436

  2001

  UAE

  Abu Dhabi and Dubai

  346

  239

  198

  226

  110

  53

  Algeria

  Algiers

  0

  0

  0

  0

  0

  0

  Jordan

  Amman

  20

  27

  29

  5

  10

  4

  Bahrain

  Bahrain

  9

  9

  12

  4

  2

  2

  Lebanon

  Beirut

  7

  6

  9

  3

  3

  1

  Egypt

  Cairo

  83

  147

  136

  97

  81

  14

  Morocco

  Casablanca

  28

  28

  19

  12

  11

  15

  Syria

  Damascus

  96

  77

  54

  92

  53

  23

  Qatar

  Doha

  52

  34

  18

  10

  10

  6

  Saudi Arabia

  Riyadh and Jedda

  83

  92

  26

  59

  35

  21

  Kuwait

  Kuwait

  85

  65

  46

  28

  24

  16

  Oman

  Muscat

  15

  16

  9

  9

  7

  5

  Yemen

  Sana'a

  27

  15

  28

  25

  45

  20

  Libya

  Tripoli

  40

  169

  185

  122

  84

  40

  Tunisia

  Tunis

  77

  89

  83

  55

  29

  26

  Total

  968

  1,013

  852

  747

  504

  246

  Child Abduction
  Mr. Wray
  To ask the Secretary of State for Foreign and Commonwealth Affairs what agreements there are with other states regarding international child abduction by a parent. [66261]

  Mr. Mike O'Brien
  The Hague Convention on the civil aspects of international child abduction seeks to return children who have been abducted abroad to their country of habitual residence, where issues of custody and contact can be resolved through the courts. Thereare prescribed criteria and processes for returning children under this convention. The Hague
  Convention is in force between the UK and 54 other countries world wide. The Foreign and Commonwealth Office is exploring the possibility of establishing bi-lateral agreements with countries that are not members of the Hague Convention.
  398W
  Mr. Wray
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with European and US counterparts regarding international child abduction by a parent. [66260]

  Mr. Mike O'Brien
  Member states of the European Union and the United States are all Parties to the Hague Convention on International Child Abduction. The Lord Chancellor's Department is the lead Department for cases of child abduction to and from Hague Convention countries. In March 2001, the Special Commission of the Hague Convention on International Child Abduction formally met, as it does every four years. The purpose of the Special Commission is to discuss the operation of the Convention. Representatives from the US attended the Commission, as did all EU member states.
  399W
  Mr. Wray
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance his Department provides in cases of abduction of a child by one of the parents from the UK to another country. [66259]

  Mr. MacShane
  The Hague Convention is the international instrument covering cases of child abduction. Cases of child abduction involving countries which are party to the Hague Convention are dealt with by the Lord Chancellor's Department in England and Wales. The Scottish Executive and the Northern Ireland Courts Service deal with their own cases. The FCO can become involved in Hague Convention cases where diplomatic intervention may be of assistance to families.

  The Foreign and Commonwealth Office is the lead Department for cases in countries which are not Party to the Hague Convention. In non-Hague Convention cases, there is no prescribed formula to facilitate the return of an abducted child. Therefore, parents must initiate proceedings in the local courts (and often also in the UK courts) for the return of their child. Consular staff, both in London and at our embassies and high commissions overseas, are able to assist parents in this procedure by, for example, helping them find a local lawyer, arranging welfare visits and attending court hearings as the legal process progresses.

  Senegal
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the renewal of the fisheries protocol between the European Union and Senegal. [66095]

  Mr. Morley
  I have been asked to reply.

  The new protocol on fisheries between the EU and Senegal was initialled by both parties on 25 June. The details of this protocol will not be known until the Commission has made its presentation to member states at the External Fisheries working group in Brussels on 3 and 4 of July, when we shall examine them carefully. We wish to ensure that such agreements take proper account of environmental and developmental concerns, an issue which we have raised before and which we intend to pursue as part of the reform of the common fisheries policy.

  Departmental Expenditure Limit
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs how much and what proportion of the departmental expenditure limit for 2002–03 had been spent by 31 May; what the figures were for 2001–02; and if he will make a statement. [61009]

  Mr. MacShane
  I refer the hon. Member to the answer given him by my right hon. Friend the Chief Secretary to the Treasury on 17 June 2002, Official Report. column 130W.

  Convention on the Future of Europe
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the status is of those members of the Convention on the Future of Europe who were appointed by Governments which have subsequently lost office; and if he will list the members of the Convention who were appointed as(a) representatives of
  400W
  Governments which have subsequently lost office and (b) representatives of national parliaments who have lost their seats since the Convention's membership was first established, in respect of both (i) the member states and (ii) candidate countries. [66093]

  Peter Hain
  Representatives appointed to the Convention by the governments of Member States and Accession Countries do not have to be members of their governments. It is therefore up to each government whether to keep or replace its representative. There have been four changes of government (France, Portugal, the Netherlands and Hungary) and six elections since the inauguration of the Convention.

  The French and Dutch government representatives have so far remained unchanged. Prof Ernani Lopes has succeeded Joao Vallera as the Portuguese government representative, and Laszlo Kovacs has succeeded Janos Martonyi as Hungarian government representative. One parliamentary representative to the Convention has lost his seat, Alain Barrau. It is not yet clear what decision the French Parliament will take.

  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what correspondence he has received from the International Association of Young Marianas with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66121]

  (2) what correspondence he has received from the Christian Academy for European Dialogue with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65945]

  (3) what correspondence he has received from the Free University of Urbina with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65917]

  (4) what correspondence he has received from the International Movement for Scientific Leisure with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities

  401W
  with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66136]

  (5) what correspondence he has received from the New Academy of Istropolitana with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65904]

  (6) what correspondence he has received from the Copernicus Society, Dortmund with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65882]

  (7) what correspondence he has received from the Fulda Technical College, Germany with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65887]

  (8) what correspondence he has received from the International ATD Fourth World Youth Movement with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66115]

  (9) what correspondence he has received from the Friuli European Academy, Venice with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65878]

  (10) what correspondence he has received from the Institute for Canon Law and History with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the
  402W
  requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65871]

  (11) what correspondence he has received from the Union of Young European Musicians with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66138]

  (12) what correspondence he has received from the Association of European University Students with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; 165908]

  (13) what correspondence he has received from the University of Trento with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65901]

  (14) what correspondence he has received from the European Federal Movement with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65924]

  (15) what correspondence he has received from the International Voluntary Service for Women and Education Suiluppo with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66141]

  (16) what correspondence he has received from the University of Milan with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use

  403W
  in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65902]

  (17) what correspondence he has received from the University of Messina with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65913]

  (18) what correspondence he has received from the International Centre for European Education with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66128]

  (19) what correspondence he has received from the Evangelical Academy of Vienna with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65933]

  (20) what correspondence he has received from the Committee for Christian Living with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65873]

  (21) what correspondence he has received from the Pro Asylum Movement with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65932]

  (22) what correspondence he has received from the European Council of Young Farmers with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the
  404W
  requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66143]

  (23) what correspondence he has received from the Foundation for the Rights of Future Generations with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65874]

  (24) what correspondence he has received from the Centre for European Studies of Strasbourg with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65918]

  (25) what correspondence he has received from Team Europe Rural Coordinator, Liguria with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65928]

  (26) what correspondence he has received from the Orthodox Academy of Crete with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66130]

  (27) what correspondence he has received from the Institute of European Studies, University of Valladolid, Spain with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement: [65896]

  (28) what correspondence he has received from the Europa Salzburg Educational Institute with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have

  405W
  been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65877]

  (29) what correspondence he has received from the Cultural Forum of Stuttgart with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66129]

  (30) what correspondence he has received from the Law Faculty, University of Sirona. Spain with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [659201

  (31) what correspondence he has received from the Wolfsburg Catholic Academy with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65930]

  (32) what correspondence he has received from the Honeysuckle Youth Association with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66120]

  (33) what correspondence he has received from the Thuringia European Civil Service Academy with particular reference to the Convention on the Future of Europe; when he last met representatives from that body: what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65868]

  (34) what correspondence he has received from the Free University of Brussels with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what
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  assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65890]

  (35) what correspondence he has received from the Rhineland Evangelical Church with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65867]

  (36) what correspondence he has received from the Association of Italian Builders with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66123]

  (37) what correspondence he has received from the Mediterranean Foundation, University of Almeria, with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [659071

  (38) what correspondence he has received from Young Christian Workers with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65943]

  (39) what correspondence he has received from the International European Commission for Church and School with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65936]

  (40) what correspondence he has received from the International Federation of Educational Communities with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of

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  the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66122]

  (41) what correspondence he has received from the European Institute of the Law Faculty of Lisbon with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [658841

  (42) what correspondence he has received from the University of Rome, Tor Vergata History Department with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65893]

  (43) what correspondence he has received from Rural and Environmental Development with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66135]

  (44) what correspondence he has received from the University of Milan, Department of International Affairs with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65894]

  (45) what correspondence he has received from the University of Sannoi's Economics Faculty with particular reference to the Convention on the Future of Europe; when he last met representatives from that body: what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been: what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65889]

  (46) what correspondence he has received from Trans Europe Halles with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target
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  audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66140]

  (47) what correspondence he has received from the Globetrotter Scouts with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65925]

  (48) what correspondence he has received from the International Foundation of Mediterranean Theatre with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65938]

  (49) what correspondence he has received from the Jean Monnet University, St. Etienne with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65915]

  (50) what correspondence he has received from the European Academy of Berlin with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65939]

  (51) what correspondence he has received from the Institute for Austrian and Internation, Tax Law, Vienna with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65898]

  (52) what correspondence he has received from the Complutense University of Madrid with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European

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  Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65911]

  (53) what correspondence he has received from the Joint Bureau for European Training with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66137]

  (54) what correspondence he has received from the TMC Foundation Asser Institute, The Hague with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65880]

  (55) what correspondence he has received from Women for Europe with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65942]

  (56) what correspondence he has received from Eruptions, the Intra-Mediterranean Network with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66125]

  (57) what correspondence he has received from the General Foundation of the Complutense University of Madrid with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65888]

  (58) what correspondence he has received from the European Centre for Federalism, University of Tubingen with particular reference to the Convention on the Future of Europe; when he last met representatives from that
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  body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65897]

  (59) what correspondence he has received from the European Forum of Associations for Heritage with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66116]

  (60) what correspondence he has received from the Association of Aid Workers with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65937]

  (61) what correspondence he has received from the Institute for International Political Studies with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65914]

  (62) what correspondence he has received from the University of Sallati, Romania with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65919]

  (63) what correspondence he has received from the International Federation for Educational Exchanges for Children with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66119]

  (64) what correspondence he has received from the Johanniter Accident Assistance with particular reference to the Convention on the Future of Europe; when he last

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  met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65875]

  (65) what correspondence he has received from the Ateneo School 'Jean Monnet', University of Naples with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65910]

  (66) what correspondence he has received from the European Institute of the University of Geneva with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65903]

  (67) what correspondence he has received from the Young International Rural Agricultural Movement with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; 166118]

  (68) what correspondence he has received from the Federation of Integration Centres with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65941]

  (69) what correspondence he has received from the Eurit Centre, Italy with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65934]

  (70) what correspondence he has received from The Isthmus with particular reference to the Convention on the Future of Europe; when he last met representatives from
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  that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66131]

  (71) what correspondence he has received from the National Union of Sports and Open Air Centres, France with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement. [65935]

  (72) what correspondence he has received from the Congress of Local and Regional Authorities of Europe with particular reference to the convention on the future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65946]

  (73) what correspondence he has received from the New Cologne Cultural Network with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66132]

  (74) what correspondence he has received from the European University and Research Centre, Bologna with particular reference to the Convention on the Future of Europe, when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65892]

  (75) what correspondence he has received from the Further Education Institute of the University of Pompeu Fabra with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65905]

  (76) what correspondence he has received from the Business University Luigi Bocconni, Milan with particular reference to the Convention on the Future of

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  Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [165883]

  (77) what correspondence he has received from the University of the Basque Country. with particular reference to the Convention on the Future of Europe when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; 165906]

  (78) what correspondence he has received from the Marahens Evangelical-Lutheran with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65866]

  (79) what correspondence he has received from the European Union Youth Forum with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65879]

  (80) what correspondence he has received from Cantal Europe with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; 166142]

  (81) what correspondence he has received from the European Federation of Freemasons with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65929]

  (82) what correspondence he has received from the Second University of Naples with particular reference to the Convention on the Future of Europe when he last met
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  representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65909]

  (83) what correspondence he has received from Austrian Culture with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66133]

  (84) what correspondence he has received from the Tutzing Evangelical Academy with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65870]

  (85) what correspondence he has received from the Study Group on European Integration, Bonn with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65881]

  (86) what correspondence he has received from the European Network of Young Gipsies with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66124]

  (87) what correspondence he has received from the European Association of Law Students with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement;[65900]

  (88) what correspondence he has received from the University La Sapienza of Rome's Economics faculty with particular reference to the Convention on the Future

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  of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65923]

  (89) what correspondence he has received from the Centre for European Integration Studies, Rhine Friedrich-Wilhelm University Bonn with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65899]

  (90) what correspondence he has received from the Knowledge and Politics Foundation with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66127]

  (91) what correspondence he has received from the Alexander Langer Foundation with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65940]

  (92) what correspondence he has received from the National Distance Learning University, Madrid with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; 65886]

  (93) what correspondence he has received from the Centre for European Studies, University of Alacala de Honares with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65895]
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  (94) what correspondence he has received from Euro Youth 2000 with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66126]

  (95) what correspondence he has received from the University of Cordova, Spain with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65916]

  (96) what correspondence he has received from the Aurich Europehouse with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65926]

  (97) what correspondence he has received from the Federation of Young European Ecologists with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66139]

  (98) what correspondence he has received from Fonda community life with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65927]

  (99) what correspondence he has received from the Society for Basque Studies, San Sebastian, Spain with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65922]
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  (100) what correspondence he has received from the European Citizens' Academy with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66134]

  (101) what correspondence he has received from the Forum Civilian Peace Service with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65876]

  (102) what correspondence he has received from the Wachau Europa Forum with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; arid if he will make a statement; [65869]

  (103) what correspondence he has received from the University of Ljubijana's Economics Faculty with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65891]

  (104) what correspondence he has received from Plan Continent with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65872]

  (105) what correspondence he has received from the Europass Theatre Union with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65931]

  (106) what correspondence he has received from the Study Center of Reggio Emilia with particular reference to the Convention on the Future of Europe; when he last
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  met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65944]

  (107) what correspondence he has received from the International Rainbow Week Movement with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [66117]

  (108) what correspondence he has received from the Catholic University of Leuven's Law Faculty with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement; [65912]

  (109) what correspondence he has received from the University Centre of Aziendali, Palermo with particular reference to the Convention on the Future of Europe; when he last met representatives from that body; what his policy is towards continuing funding of it by the European Union; what the target audiences of its publications have been; what assessment he has made of the compatibility of their use in schools and universities with the requirements in the Education Act 1996 for balance in the provision of information; and if he will make a statement. [65885]

  Peter Hain
  I refer the hon. Member to the reply I gave him on 27 June 2002,Official Report, column 1026W.

WORK AND PENSIONS

  Child Support
  Vernon Coaker
  To ask the Secretary of State for Work and Pensions what limit there will be on the pension contribution of a non-resident parent in calculating the assessment under the new Child Support Agency formula. [35373]

  Malcolm Wicks
  The new calculation will allow for 100 per cent. of any contributions to an Inland Revenue approved occupational, or personal pension scheme. The Inland Revenue sets limits on the percentage of income that can be contributed to a pension scheme; these depend on the contributor's earnings and the date they joined the scheme.

  Pensions
  Mr. Webb
  To ask the Secretary of State for Work and Pensions, pursuant to the answer of 20 May ref 57511 on
  419W
  pensions, what the latest years for which estimates are available on a basis consistent with that used in the 1998 Pensions Green Paper to provide estimates for 1998 are for (a) GAD and DWP data on state spending on pensions and (b) ONS estimates of the size of private pensions in payment; and what the estimates are in both cases. [588051

  Mr. McCartney
  [holding answer 23 May 2002]: Table A shows the proportion of pension income coming from the state and private sources in each year from 1997–98 to 1999–2000. State pension income corresponds to benefit income as defined in the PI Series. Private pension income corresponds to the sum of occupational pension income and investment income in the PI Series. The percentage figures in Table 1 are derived directly from the average gross income totals in Table I of the PI Series (1999–2000).

  Table A: Proportion of pension income coming from state and private sources

  Percentage

  1997–98

  1998–99

  1999–2000

  State pension income

  58

  56

  57

  Private pension income

  42

  44

  43

  Note:

  All figures rounded to nearest 1 per cent.

  State pension income corresponds to PI definition of 'Benefit Income', which includes national insurance benefits received by the elderly, income-related benefits and disability benefits.

  Private pension income corresponds to the sum of occupational pension income and investment income. The latter includes income from annuities, personal pensions, property, stocks and shares, as well as income from savings.

  For further information on PI methodology and definitions see Section 5, page 10 of Pensioners' Incomes Series (1999–2000).

  As the PI Series shows, pensioners also receive income from earnings and 'other' sources. For reference, therefore, it is also possible to estimate the proportion of retirement income comes from state and private sources. This is done in Table B. As with Table A, the proportions here are derived directly from the average gross income totals in Table 1 of the PI Series (1999–2000).

  Table B: Proportion of retirement income coming from state and private sources

  Percentage

  1997–98

  1998–99

  1999–2000

  State retirement income

  53

  51

  52

  Private retirement income

  47

  49

  48

  Note:

  All figures rounded to nearest 1 per cent.

  State retirement income corresponds to PI definition of `Benefit Income', which includes national insurance benefits received by the elderly, income-related benefits and disability benefits.

  Private retirement income corresponds to the sum of occupational pension income, earnings, 'other' income and investment income. Investment income includes income from annuities, personal pensions, property,
  420W
  stocks and shares, as well as income from savings. 'Other' income includes private benefits such as those from Friendly Societies, and the income of any dependent children, as well as other miscellaneous sources of income.For further information on PI methodology and definitions see Section 5, page 10 of Pensioners' Incomes Series (1999–2000).

  Mr. Mullin
  To ask the Secretary of State for Work and Pensions if the National Pensioners Convention is among the organisations he is proposing to consult regarding the draft National Strategy report on pensions; and when the consultation is to take place. [64673]

  Mr. McCartney
  The National Pensioners Convention is one of a range of organisations which the Department for Work and Pensions has regular contact with. These organisations have been invited to a meeting in July concerning the National Strategy Report.

  Computers
  Dr. Kumar
  To ask the Secretary of State for Work and Pensions what measures are(a) in place and (b) under discussion in his Department in order to ensure compliance with the WE Directive. [60745]

  Mr. Nicholas Brown
  I refer my hon. Friend to the written answer given by my hon. Friend the Minister of State for Trade and Industry (Mr. Wilson) on 12 June 2002,Official Report, 1266W.

  Benefit Sanctions
  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions, pursuant to his answer to the hon. Member for Somerton and Frome (Mr. Heath), of 20 May 2002,Official Report, column 29W, what research has been undertaken by his Department into the effects of benefit sanctions; and if he will place a copy of each title in the Library. [63675]

  Malcolm Wicks
  The research carried out by the Department into the effects of sanctions is listed. Copies of the research reports are available in the Library.Unemployment and Jobseeking. DSS Research Report 62, TSO 1997;
  Unemployment and Jobseeking after the Introduction of Jobseeker's Allowance. DSS Research Report 99, TSO 1999;
  Understanding the Impact of Jobseeker's Allowance. DSS Research Report 11, TSO 2000;
  Evaluating Jobseeker's Allowance: A summary of the research findings. DSS Research Report 116, TSO 2000;
  Evaluation of Decision Making and Appeals. Employment Service Research Report 83, published July 2001;
  The impact of the 26 week sanctioning regime. Employment Service Research Report 100, by British Market Research Bureau, published November 2001;
  More Frequent Attendance (MFA) Post implementation Review. Employment Service Research Report 105, published January 2002.

  Staff Training
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions how much the Department has spent on staff training and development in each of the last five years. [61069]
  421W
  Mr. McCartney
  Data on expenditure on staff training and development are available only for the last three years. The Department was created in June 2001. The figures for the two earlier years have been collated from data sources in the former Employment Service and Department of Social Security.

  Expenditure (£ million)

  Percentage of running costs

  1999–2000

  81.145

  3.19

  2000–01

  90.034

  3.68

  2001–02

  97.319

  3.76

  The figures include trainee and trainer costs, management and administration overheads, and spend on external training provided through Departmental contracts. Costs for accommodation where Departmental estate has been used are not included. (In addition to formal training, staff are developed by a variety of other means.)

  The Department is committed to the principles of Investors in People. It considers that effective investment in training and development is essential in equipping staff with the skills and knowledge necessary to meet Government goals and deliver modern services.

  Housing Benefit
  Mr. Gerrard
  To ask the Secretary of State for Work and Pensions what plans he has to change the practice of allowing local authorities to make direct payment of housing benefit to registered social landlords; and if he will make a statement. [63464]

  Malcolm Wicks
  We recognise that direct payments of housing benefit to registered social landlords can be both efficient and convenient. However, it has often been argued that routinely paying benefit to the landlord rather than to the tenant whose entitlement it is, can inhibit tenants' choice and discourage personal responsibility. Therefore, although there are no immediate plans to change the current system, it is an issue that we will continue to keep under close review.

  New Deal
  Mr. Martlew
  To ask the Secretary of State for Work and Pensions what plans there are to increase the financial incentives to employers who employ and retain young people under the New Deal programme. [63757]

  Mr. Nicholas Brown
  There are no current plans to do so. However we have taken steps to increase both financial and training flexibilities for employers within the New Deal for Young People. Employers, especially small businesses, taking part in the programme have welcomed this increased flexibility.

  Employers have a direct input into the programme through the National Employment Panel. This group (formerly known as the New Deal Task Force) was formed in 1997 to ensure that employers, and other key customers, have a strong and permanent voice within the Department.
  422W
  This co-operative approach has contributed to the success of the New Deal. Nearly 95,000 employers have signed up, half of whom have never participated in an employment programme before. Many more have taken on New Dealers without formally signing up for the programme, and still more have helped to support New Deal in other ways by providing training or advice on the design of the programme.

  Incapacity Benefit
  Mr. Clappison
  To ask the Secretary of State for Work and Pensions what the average period of payment was for claimants of incapacity benefit at 31 March. [64329]

  Mr. Nicholas Brown
  Information regarding the average duration of incapacity benefit claims at 31 March 2002 will not become available until early 2003. For the latest available information, I refer the hon. Member to the written answer I gave him on 26 April 2002,Official Report, column 472W.

  Annual Leave
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions what the average annual leave entitlement is for staff in his Department in 2002. [64642]

  Mr. McCartney
  The average annual leave entitlements in the year 2002 will be:

  Staff in the grades AA to HEO 27 days per year

  Staff in grades SE0 to UG6 30 days per year.

  The annual leave allowance for members of the Senior Civil Service is set by the Cabinet Office and continues to be 30 clays.

  Winter Fuel Payment
  John Barrett
  To ask the Secretary of State for Work and Pensions how many widowed women over 60 wrongly received a reduced level of winter fuel payment for the 2001–02 winter, owing to a mistaken assessment of two people living in the household in(a) Scotland and (b) the UK; and how many are awaiting receipt of the full payment. [65377]

  Mr. McCartney
  Information available shows that 172 widows, identified through receipt of Widows Pension, had to be paid an additional £100 because they were the only eligible member of their household. One of these payments was in Scotland.

  Industrial Injuries Benefits
  Mr. Webb
  To ask the Secretary of State for Work and Pensions how many(a) men and (b) women received the principal contributory industrial injuries benefits in each year since 1972. [65293]

  Mr. Nicholas Brown
  [holding answer 1 July 2002]: The main industrial injuries benefit is Industrial Injuries Disablement Benefit. This is a tax-free, non-contributory benefit payable to people who have become disabled as a result of an accident at work or as a result of an industrial disease.
  423W
  Details of the number of recipients of this benefit by gender since 1972 are in the table.

  Industrial injuries disablement benefit (IIDB) recipients by gender

  Thousand

  Year

  All

  Males

  Females

  1971–72

  203.6

  184.6

  19.0

  1972–73

  202.4

  182.8

  19.5

  1973–74

  200.6

  181.0

  19.5

  1974–75

  201.5

  181.6

  19.9

  1975–76

  201.6

  181.9

  19.7

  1976–77

  201.8

  181.8

  19.9

  1977–78

  200.4

  180.2

  20.2

  1978–79

  198.2

  177.7

  20.5

  1979–80

  195.8

  175.3

  20.6

  1980–81

  191.6

  171.5

  20.1

  1981–82

  189.1

  169.1

  19.9

  1982–83

  188.0

  168.1

  19.9

  1983–84

  188.7

  168.8

  19.9

  1984–85

  188.2

  168.2

  20.0

  1985–86

  185.9

  165.9

  19.9

  1986–87

  185.5

  165.1

  20.4

  1987–88

  188.8

  167.9

  20.9

  1988–89

  192.6

  170.1

  22.5

  1989–90

  196.3

  172.3

  24.0

  1990–91

  200.3

  174.7

  25.6

  1991–92

  204.3

  176.8

  27.4

  1992–93

  212.4

  181.6

  30.8

  1993–94

  225.6

  191.4

  34.3

  1994–95

  235.2

  197.1

  38.1

  1995–96

  249.2

  206.6

  42.6

  1996–97

  257.8

  211.9

  45.8

  1997–98

  269.1

  221.9

  47.2

  1998–99

  278.2

  228.3

  49.8

  1999–2000

  280.8

  229.8

  50.9

  2000–01

  280.4

  229.5

  50.9

  Notes:

  I. Prior to 1986–87 annual data was collected from 1 October to 30 September. From 1986–87 data was collected by financial year.

  2. A person may be in receipt of IIDB for more than one condition.

  Source:

  Based on a 10 per cent. sample of IIDB clerical returns.

  Benefit and Tax Credit Payments
  Lynne Jones
  To ask the Secretary of State for Work and Pensions whether benefit and tax credit claimants will be allowed to choose between(a) a card account at the Post Office, (b) a basic bank account and (c) another type of bank account, in order to continue to receive their benefit and tax credit payments; and whether the information available to benefit and tax credit claimants will include clear description of each of these options and will set out their advantages and disadvantages. [65260]

  Malcolm Wicks
  Yes.

  The Department and the Inland Revenue will be providing customers with all the information they will need (including details of the respective features of each type of account) to choose the account which is most appropriate for them.

  Around 85 per cent. of our customers already have access to a suitable account for receiving payments of benefits and tax credits. While we anticipate that most people will choose to have their money paid into an existing account or open a basic bank account, no one will be prevented from opening a card account at the Post Office if they wish.

HOME DEPARTMENT

  Committee Mandates
  Mr. Bercow
  To ask the Secretary of State for the Home Department what the mandate of the Committee for the European Refugee Fund 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 he will list the items currently under its consideration; if he will take steps to increase its accountability and transparency to Parliament; and if he will make a statement. [58455]

  Beverley Hughes
  The mandate for the Committee for the European Refugee Fund is set out in the Council Decision 2000/596/EC, OJL 252, 6.10.2000, that adopted the programme, and is available in the Library. The Committee meets three times a year on average.

  The United Kingdom (UK) representation usually consists of a member of the UK representation to the European Union plus a Home Office official from the Refugee Integration Unit. The Commission refunds travel and subsistence costs for one official from the UK for each Committee meeting. Up to three additional representatives can attend, and their expenses are met from the Home Office subsistence allowance. The purpose of the Committee is to monitor the implementation of the European Refugee Fund across the member states.

  The Council decision contains a reporting mechanism under which the Commission evaluates the implementation of the European Refugee Fund and submits a report to the Council and European Parliament. The reports are publicly available on the internet. In addition, details of projects selected for funding within the UK allocation of the fund are made available in the form of a written parliamentary answer on an annual basis.

  Fingerprints/DNA Samples
  Norman Baker
  To ask the Secretary of State for the Home Department which organisations have access to(a) fingerprints and (b) DNA samples held by the police. [64245]

  Mr. Denham
  [holdinganswer 25 June 2002]Under the Police and Criminal Evidence Act 1984 (as amended) retained fingerprints and DNA samples can be used only for purposes related to the prevention or detection of crime, the investigation of an offence or the conduct of a prosecution. Fingerprints and DNA samples, and the profiles derived from them, which are held by or on behalf of police forces in the United Kingdom and Islands, may be accessed only by relevant law—enforcement authorities. Relevant law—enforcement authorities are listed in section 63A of the 1984 Act. They are:

  (a) a police force1;

  (b) the national criminal intelligence service;

  (c) the national crime squad;

  (d) a Public Authority (not falling within paragraphs (a) to (c)) with functions in any part of the British islands which consist of or include the investigation of crimes or the charging of offenders;

  425W

  (e) any person with functions in any country or territory outside the United Kingdom which

  (i) correspond to those of a police force, or

  (ii) otherwise consist of or include the investigation of conduct contrary to the law of that country or territory, or the apprehension of persons guilty of such conduct;

  (f) any person with functions under any international agreement which consist of or include the investigation of conduct which is

  (i) unlawful under the law of one or more places,

  (ii) prohibited by such an agreement, or

  (iii) contrary to international law, or the apprehension of persons guilty of such conduct.

  1The reference to a police force is a reference to any of the following:

  (a) any police force maintained under section 2 of the Police Act 1996 (c 16)(police forces in England and Wales outside London);

  (b) the Metropolitan police force;

  (c) the City of London police force;

  (d) any police force maintained under or by virtue of section 1 of the Police (Scotland) Act 1967 (c 77);

  (e) the police service of Northern Ireland;

  (f) the police service of Northern Ireland Reserve;

  (g) the Ministry of Defence police;

  (h) the Royal Navy regulating branch;

  (i) the Royal Military police;

  (j) the Royal Air Force police;

  (k) the Royal Marines police;

  (I) the British Transport police;

  (m) the States of Jersey police force;

  (n) the salaried police force of the Island of Guernsey;

  (o) the Isle of Man constabulary.

  Immigration Applications
  Kate Hoey
  To ask the Secretary of State for the Home Department if he will make a statement on progress with the processing of immigration applications made under the Regularisation of Overstayers Scheme; and if it is expected that the assessment of all applications made under that scheme will be completed by April 2003. [64565]

  Beverley Hughes
  During the last financial year (2001–02) a sift of all outstanding applications made under the Regularisation Scheme for Overstayers was successfully completed, yielding a total of 1,033 easily identifiable grants under existing policy concessions.

  During the current financial year more detailed consideration is being given to the remaining cases. To date, 282 further grants have been identified, along with 81 refusals; 10,990 cases remain to be fully considered. The team assigned to dealing with these cases is currently under expansion, and individual caseworker output is gradually increasing with experience. It is anticipated that all applications made under the scheme will be assessed by April 2003.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for the Home Department if he will list the EU directives relating to his Department which have been(a) amended and (b) repealed in 2002. [64954]
  426W
  Mr. Bob Ainsworth
  None of the European Union directives relating to the Home Office have been amended or repealed in 2002.

  Public Protection Panels
  Mr. Hancock
  To ask the Secretary of State for the Home Department by what criteria members of the public will be chosen for the strategic boards overseeing the multi-agency public protection panels; and if he will make a statement. [64589]

  Hilary Benn
  The multi-agency public protection arrangements exist to protect members of the public from potentially dangerous sexual and violent offenders in communities across England and Wales. I announced last week that the Government wanted members of the public to be represented in these arrangements.

  Adverts will be appearing in the press in the five areas which will be piloting this scheme (west Midlands, south Wales, Cumbria, Durham and Surrey), asking for members of the public to apply to sit on the strategic boards scrutinising and managing this work in their areas.

  Lay members will not be required to have formal educational qualifications but are expected to have:

  (i) an ability to understand complex information in written and numerical form;

  (ii) an interest in community and social issues with a track record of involvement in them;

  (iii) an ability to make appropriate decisions based on the available information;

  (iv) a capacity for emotional resilience, retaining sensitivity while dealing with tragic or painful situations. In particular, this includes an ability to understand the needs and feelings of victims of crime;

  (v) an ability to understand the complexity of human behaviour;

  (vi) good social skills and the ability to work effectively with people in groups and in formal meetings;

  (vii) an awareness of and commitment to equality and diversity;

  (viii) an ability to challenge constructively the views and assumptions of senior professionals; and

  (ix) an ability to maintain confidentiality appropriate to the circumstances and local protocols.

  In each of the areas in which this development is being piloted, lay members will be recruited using these criteria through a formal assessment procedure designed and administered by an occupational psychologist. Elected representatives and relevant professionals are not eligible for selection. All candidates will be subject to the usual criminal history checks and anyone who has committed a sexual or a violent offence, or any other offence not spent under the Rehabilitation of Offenders Act 1974 will also not be eligible. We hope to make the first appointments later in the summer.

  Criminal Records Bureau
  Keith Vaz
  To ask the Secretary of State for the Home Department how many persons are employed in the Criminal Records Bureau. [64835]

  Hilary Benn
  The number of staff employed by the Criminal Records Bureau is 871 with a further 117 seconded from other agencies and/or employed on contractual terms.

  Asylum Seekers
  Tony Worthington
  To ask the Secretary of State for the Home Department if he plans to increase support for asylum seekers to full income support rates; and if he will make a statement. [57997]

  Beverley Hughes
  The full national asylum support service support package is broadly equivalent to income support. Support for asylum seekers can include fully furnished accommodation. The costs of this together with associated utility bills and council tax are met centrally. Support levels for children here as part of an asylum seeking family are identical to the personal allowances for children in families on income support.

  Simon Hughes
  To ask the Secretary of State for the Home Department whether he is entitled to provide asylum support to persons who have won their asylum appeals but where the period since their asylum appeal was disposed of exceeds 28 days; and if he will make a statement. [60539]

  Beverley Hughes
  In accordance with section 94(3) of the Immigration and Asylum Act 1999 and Regulation 2 of the Asylum Support Regulations 2000 (as amended), the national asylum support service support should end 28 days after an appeal is disposed of if it is successful and 21 days if it is not.

  Asylum Seekers Accommodation Centres
  John Barrett
  To ask the Secretary of State for the Home Department what discussions his Department has had with BAA Lynton regarding the use of the former RAF Turnhouse site for an asylum seeker accommodation centre. [42733]

  Beverley Hughes
  The Home Office, through its agent, has been in discussion with the British Airport Authority Lynton regarding the former Royal Air Force Turnhouse site, initially on the availability of the site and subsequently as to the potential for using the site as an accommodation centre.

  Mr. Luff
  To ask the Secretary of State for the Home Department what voluntary activity away from the sites of asylum accommodation centres he considers appropriate for residents of such centres; and if he will make a statement. [59277]

  Beverley Hughes
  We expect most purposeful activity to take place on site at accommodation centres. Opportunities for voluntary activity away from the sites will depend upon local circumstances in exactly the same way as such voluntary activity is available to and taken up by asylum seekers who do not live in accommodation centres. Residents of accommodation centres will not be compelled to undertake voluntary work away from the sites.

  Mr. Luff
  To ask the Secretary of State for the Home Department (1) what contingency plans he has for the use of the facilities if the evaluation of the asylum accommodation centres show the centres are not performing satisfactorily; [59072]

  (2) how he will evaluate the performance of asylum accommodation centres; and how long after the opening of the centres the evaluation will be completed. [59071]
  428W
  Beverley Hughes
  We set out the likely criteria for evaluating accommodation centres in the White Paper published on 7 February 2002 (Cm. 5387). We are still considering the details of the evaluation process.

  We expect the trial centres to be successful. If in the light of the evaluation of the trial there is a need to modify any aspect of the centres, we will address that at the time.

  Mr. Luff
  To ask the Secretary of State for the Home Department what discussions he has had with the Department of the Environment, Food and Rural Affairs about compensation arrangements for residents living adjacent to Throckmorton airfield as a result of the combined impact of the foot and mouth disease burial site and the proposed asylum accommodation centre. [57345]

  Beverley Hughes
  My officials have had discussions with the Department of the Environment, Food and Rural Affairs (DEFRA) officials in connection with the proposed accommodation centre at Throckmorton airfield, near Pershore, Worcestershire. We do not anticipate grounds for compensation of this nature.

  Mr. Luff
  To ask the Secretary of State for the Home Department how many private sector sites have been offered to his Department for the proposed asylum accommodation centres; and for what reasons such sites are not being given further consideration. [57344]

  Beverley Hughes
  All sites, which have emerged as potentially suitable for accommodation centres, are being given consideration. In addition to the sties we have identified ourselves, a number have been put forward by potential bidders. We will not be putting into the public domain details of such sites unless and until they are considered to be a serious prospect for the siting of an accommodation centre.

  Mr. Luff
  To ask the Secretary of State for the Home Department, pursuant to his answer of 12 June 2002,Official Report, column 1308W, on asylum seekers accommodation centres, when he will place in the Library the documentation for the bidders conference. [66144]

  Beverley Hughes
  [holdinganswer 2 July 20021 A copy will be placed in the Library shortly.

  Marina Brookes
  John Cryer
  To ask the Secretary of State for the Home Department when he intends to take a decision on the application for indefinite leave to remain of Marina Brookes (Home Office ref: B 1099565). [56522]

  Beverley Hughes
  The application was decided on 15 May 2002 and notification sent by first class recorded delivery on the same day.

  Sex Offenders
  Mrs. Helen Clark
  To ask the Secretary of State for the Home Department (1) who is notified of plans to allocate sex offenders allocated to areas other than those of their known offending; [42190]

  (2) by what criteria and on what authority sex offenders are allocated to areas other than those of their known offending; [42189]
  429W
  (3) what arrangements are put in place to monitor the movements of known sex offenders who are allocated to areas other than those of their known offending; [42192]

  (4) when he will reply to the questions on sex offenders tabled on Wednesday 6 March, Ref. 42191. [44446]

  Hilary Benn
  I refer my hon. Friend to the answer given to her by my hon. Friend the Member for Stretford and Urmston (Beverley Hughes) on 19 March 2002,Official Report, column 285W. I apologise for the delay in responding.

  Extradition
  Jeremy Corbyn
  To ask the Secretary of State for the Home Department how many Czech citizens have been extradited over the last four years; how many of them were Roma; and for what kinds of offences. [64858]

  Mr. Bob Ainsworth
  [holdinganswer 1 June 2002]The information requested is as follows:

  Year

  Surrenders to Czech Republic

  1998

  —

  1999

  —

  2000

  1

  2001

  4

  Total

  5

  On information available, only one of those fugitives (who did not contest his extradition) was of Roma origin. Those concerned stood accused variously of theft, burglary, robbery and deception.

  Road Traffic Offences
  Mr. Drew
  To ask the Secretary of State for the Home Department what discussions he has had with(a) the police, (b) the Lord Chancellor and (c) the Crown Prosecution Service on raising the tariff for serious road traffic offences. [65023]

  Hilary Benn
  [holding answer 27 June 2002]: We are currently reviewing penalties for all road traffic offences. On 19 December 2000 we published a consultation paper. The paper dealt with the court sentencing powers for a wide range of road traffic offending including serious offending. The consultation exercise ended in March 2001. We are currently in the final stages of producing the Government's response to the consultation exercise on road traffic penalties. We hope to publish this shortly.

  This was an interdepartmental review involving officials from the Home Office, Lord Chancellor's Department, and the Department for Transport in which the views of the Lord Chancellor, the police and the Crown Prosecution Service were taken into account.

  Bail Information
  John McDonnell
  To ask the Secretary of State for the Home Department how many probation areas in England and Wales operated bail information schemes in the last year for which figures are available; in how many cases information on bail was provided to the courts, broken down by probation area; and in how many of these cases the court ordered conditional bail. [65424]
  430W
  Hilary Benn
  36 areas provided bail information schemes to courts in 2001–02, although schemes in some areas will have been targeted at specific courts or court sittings and some courts within those areas will not have benefited from access to a scheme. The National Probation Directorate is currently considering how the overall scope of bail information schemes can be extended to provide courts with greater access to a scheme and to further develop the effectiveness of the bail information process. Work to identify qualitative performance measures will begin later this year.

  A return showing the numbers of bail information reports prepared in 2001 is in the table. Consideration of a bail information report will be only one of a range of factors which courts take into consideration when considering whether to order conditional bail and records are not kept of the number of such orders where a bail information report has been presented.

  Numbers of bail information reports prepared by the Probation
  Service during 2001

  Number

  Avon

  0

  Cambridgeshire

  2

  Cheshire

  1,014

  Teesside

  111

  Cornwall

  9

  Cumbria

  131

  Derbyshire

  40

  Devon

  91

  Dorset

  302

  Durham

  6

  Essex

  3

  Gloucestershire

  0

  Hampshire

  0

  West Mercia

  338

  Hertfordshire

  28

  Humberside

  634

  Kent

  181

  Lancashire

  198

  Leicestershire

  139

  Lincolnshire

  37

  Greater Manchester

  715

  Merseyside

  306

  Norfolk

  18

  Northamptonshire

  0

  Northumbria

  101

  Nottinghamshire

  0

  Thames Valley

  401

  Somerset

  15

  Staffordshire

  346

  Suffolk

  76

  Surrey

  228

  West Sussex

  140

  Warwickshire

  230

  West Midlands

  1,302

  Wiltshire

  62

  North Yorkshire

  0

  South Yorkshire

  403

  West Yorkshire

  1,991

  Dyfed/Powys

  191

  Gwent

  0

  North Wales

  0

  West Glamorgan

  9

  Middlesex

  71

  England and Wales

  9,870

  Animal Experiments
  Mr. Gordon Marsden
  To ask the Secretary of State for the Home Department (1) what assessment his Department has made of the likely future level of scientific procedures on animals; [65081]

  (2) what estimate his Department has made from applications for licences to perform scientific procedures on animals of the level of duplication in such procedures; [65082]

  (3) what estimate his Department has made of the reduction in the number of scientific experiments on animals that has been achieved as a result of information sharing; [65080]

  (4) what targets his Department has set for reducing the number of scientific procedures performed on animals. [65079]

  Mr. Bob Ainsworth
  The use of animals in experiments and other scientific procedures is strictly regulated by the Animals (Scientific Procedures) Act 1986 which is widely regarded as the most rigorous piece of legislation of its type in the world. It offers a high level of protection to animals while recognising the need to use animals in research. It also requires the latest ideas and technology to be taken into account when deciding whether the use of animals is justified.

  The licensing system is demand led and the 1986 Act provides no mechanism by which to set absolute limits on the number of animals used. The Act requires that project proposals are assessed on a case-by-case basis and that licences are only granted where the benefits outweigh the costs and where there are no alternatives which either replace animal use entirely, reduce the number of animals needed, or refine the procedures to minimise suffering (the 3Rs). We must also be satisfied that the procedures are likely to achieve the stated objectives.

  The number of animal procedures carried out reflects the state of science and industry in the United Kingdom and developments in science rather than being an indicator of the effectiveness of the 1986 Act. The Home Office will, however, continue to implement its overall strategy to minimise the numbers of animals used by the rigorous application of the 3Rs.

  It is not possible to predict accurately the amount of scientific research and regulatory testing using animals which is likely to take place in future. However, there are indications that in most areas use of conventional animals will continue to decline, but that new molecular biology techniques are opening up new areas of genetic research which will lead to an increase in the use of genetically modified (GM) animals. In addition, new regulatory requirements, for example, the proposed European Union Chemicals Strategy, have the potential to increase the use of animals for human health and safety purposes.

  There is no information readily available to indicate the reduction in scientific procedures using animals achieved through sharing of information. The Government believe, however, that sharing of scientific research data is self-evidently in the interests of refining ad avoiding duplication of procedures, and remains committed to promoting such sharing by any practical means. To this end, in August 2000, we announced an inter-departmental concordat on data sharing. The concordat commits United
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  Kingdom regulatory authorities to help resolve legal and other obstacles and encourage data sharing between clients and thereby reduce animal tests. Progress in implementing the concordat is currently under review.

  A programme of work involving the use of animals would not be licensed under the 1986 Act if it were known that it would entail unnecessary duplication of earlier work. Apart from some cases where there is need for deliberate replication of earlier work, in order to validate the original findings, we have no evidence that duplication of animal use takes place.

  Private Finance Initiative
  Matthew Taylor
  To ask the Secretary of State for the Home Department, pursuant to his answers to the hon. Member for Yeovil (Mr. Laws) of 18 December 2001,Official Report, columns 237–38W, and 24 October 2001, Official Report, column 288W, concerning the private finance initiative, what the main areas of savings are leading to the cost savings indicated for the (a) Ryehill, (b) Dovegate, (c) Forest Bank, (d) Parc, (e) Lowndham Grange and Altcourse prisons; and if he will make a statement. [65416]

  Hilary Benn
  The same main elements in savings have been accrued from each of the seven prisons designed. constructed, managed and financed by the private sector. The main elements are threefold: construction costs, operational costs and risk transfer.

  Youth Offending
  Phil Sawford
  To ask the Secretary of State for the Home Department what action he is taking to tackle persistent youth offending. [66587]

  Hilary Benn
  We have given the courts new secure remand and tagging powers for 12 to 16-year-olds who repeatedly offend on bail. Both started in the 10 street crime priority areas on 22 April. Tagging started in the rest of the country on 1 June 2002 and secure remands will start there on 16 September 2002.

  We have also: delivered the Youth Justice Pledge by halving the time taken from arrest to sentence for persistent young offenders; funded the Youth Justice Board's intensive supervision and surveillance programmes for the most prolific offenders; and introduced the detention and training order for persistent and more serious young offenders.

  As a result of our youth justice reforms results published in June 2002 for the first group of young offenders dealt with in July 2000 show that the reconviction rate fell by 14.6 per cent. They exceeded the Public Service Arrangement target of a 5 per cent. reduction in juvenile reconviction rates by 5 per cent. by March 2004.

  Shop Crime
  Mr. Hancock
  To ask the Secretary of State for the Home Department what the estimated annual losses were to businesses in the Portsmouth, South constituency due to shop crime in the last 12 months; and if he will make a statement. [64480]
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  Mr. Denham
  The Home Department does not collect information about losses as a result of shop crime. The number of offences of theft from shops recorded by the police in Hampshire for the 12 months ended 31 March 2001 was 9,674, which is 5 per cent. less than the previous year. It is not possible to identify offences relating only to the Portsmouth, South constituency.

  The survey of crime affecting retailers and manufacturers announced by my right hon. Friend the Home Secretary on 23 April 2002 will provide up-to-date information on crimes against retailers including estimates of losses incurred. The results are expected to be available next spring.

  Yarl's Wood
  Simon Hughes
  To ask the Secretary of State for the Home Department (1) how many of those who were detained at Yarl's Wood are detained(a) in a prison and (b) in an immigration detention centre; and if he will make a statement; [66622]

  (2) how many of those who were detained at Yarl's Wood (a) have subsequently been removed from the UK and (b) have since been granted refugee status or exceptional leave to remain; and if he will make a statement. [666231

  Beverley Hughes
  [holdinganswer 2 July 2002]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.

  Simon Hughes
  To ask the Secretary of State for the Home Department whether the search of the Yarl's Wood site has been completed; and whether fatalities have been discovered. [66612]

  Beverley Hughes
  [holdinganswer 2 July 2002]Bedfordshire police completed their controlled clearance of the Yarl's Wood site on 24 May 2002. They are continuing with the forensic examination of the materials removed. To date, no evidence of fatalities has been found.

  Resignations

  White

  Black Caribbean

  Black other

  Indian

  Chinese

  Other

  All

  1999–2000

  Number of full-time equivalent (FTE) officers at 31 March 1999

  7,008.48

  110

  27

  89.67

  1

  83.63

  7,319.78

  Number of resignations 1 April 1999 to 31 March 2000

  81

  2

  0

  2

  0

  1

  86

  Officers who resigned as percentage of FTEs

  1.16

  1.82

  0

  2.23

  0

  1.2

  1.17

  Resigners1 ethnicity as percentage of total resignations

  94.19

  2.33

  0

  2.33

  0

  1.16

  —

  2000–01

  Number of FTE officers at 31 March 2000

  6,886.89

  112

  29.6

  98.38

  1

  86.63

  7,214.5

  Number of resignations 1 April 2000 to 31 March 2001

  99

  2

  1

  2

  1

  2

  107

  Officers who resigned as percentage of FTEs

  1.44

  1.79

  3.38

  2.03

  100

  2.31

  1.48

  Resigners1 ethnicity as percentage of total resignations

  92.52

  1.87

  0.93

  1.87

  0.93

  1.87

  —

  Crime and Policing (Wales)
  Mr. Llwyd
  To ask the Secretary of State for the Home Department if he will make a statement on the levels of crime and police resources in(a) North Wales, (b) Dyfed-Powys, (c) South Wales and (d) Gwent police areas in each year since 1997. [639661

  Hard Cases Fund
  Simon Hughes
  To ask the Secretary of State for the Home Department (1) how many applications have(a) been made and (b) been successful to the hard cases fund; and if he will make a statement; [66609]

  (2) whether the hard cases fund used to support asylum seekers in exceptional circumstances is cash limited; and if he will make a statement; [66610]

  (3) what a grant made under the hard cases fund consists of: and if he will make a statement. [66611]

  Beverley Hughes
  [holding answer 2 July 2002]Hard case support is provided under section 4 of the Immigration and Asylum Act 1999. This allows the Secretary of State to provide, or arrange for the provision of, facilities for the accommodation of certain classes of person. It is policy to provide full board accommodation. There is no facility to make any subsistence payments. It is open to anyone who believes they have a case for support under section 4 to apply for it.

  It is not possible to provide information on the number of applications received and accepted as this information is not routinely collected and to produce accurate figures would require a manual examination of all files held by the relevant section of the National Asylum Support Service (NASS). This could be done only at disproportionate cost.

  West Midlands Police
  Mr. John Taylor
  To ask the Secretary of State for the Home Department what proportion of police officers in each ethnic group resigned from the West Midlands police force in each of the last two years. [45328]

  Mr. Denham
  I am sorry not to have provided an earlier answer. The information in the table has been provided by the chief constable of the West Midlands police (Sir Edward Crew QPM). The force has apologised for the delay in supplying it.

  The information provided covers the last two full years for which it is available (1999–2000 and 2000–01). The table shows the number of officers from each ethnic group who resigned, the number of resignations as a proportion of the total number of officers in that ethnic group and the proportion of total resignations by ethnic group.

  Mr. Denham
  Crime in England and Wales fell by 21 per cent. between 1997 and 2000 (British Crime Survey 2001). Total recorded crime in Wales fell 16.5 per cent. between 1996–97 and 2000–01, taking account of changes in counting rules. Recorded crime in Wales since 1996–97 is set out in the table.
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  Police force area

  Number of recorded crimesy

  Percentage change from previous year

  1996–97

  Dyfed-Powys

  19,282

  –4.6

  Gwent

  38,296

  14.8

  North Wales

  41,691

  –1.8

  South Wales

  151,371

  –0.8

  1997–98

  Dyfed-Powys

  17,994

  –4.3

  Gwent

  47,043

  –0.8

  North Wales

  38,658

  –7.9

  South Wales

  128,811

  –4.2

  1998–99 (new rules)1

  Dyfed-Powys

  24,588

  –0.8

  Gwent

  58,738

  –0.7

  North Wales

  43,848

  –5.4

  South Wales

  134,820

  –6.1

  1999–2000

  Dyfed-Powys

  23,709

  –3.6

  Gwent

  60,132

  2.4

  North Wales

  44,606

  1.7

  South Wales

  127,040

  –5.8

  2000–01

  Dyfed-Powys

  22,878

  –3.5

  Gwent

  56,728

  –5.7

  North Wales

  47,708

  7.0

  South Wales

  111,131

  –12.5

  1Denotes crimes recorded using the expanded offence coverage and revised counting rules which came into effect on 1 April 1998.

  Government revenue grant for Welsh police forces since 1997 is set out in the table. This is provision for all policing activity, including crime.

  £million

  Dyfed-Powys

  Gwent

  North Wales

  South Wales

  1997–98

  42.1

  56.5

  60.8

  137.3

  1998–99

  42.4

  58.2

  61.5

  141.0

  1999–2000

  43.1

  60.7

  63.8

  143.8

  2000–01

  45.8

  63.3

  66.5

  147.3

  2001–02

  50.7

  66.7

  72.4

  156.4

  2002–03

  52.3

  68.7

  74.0

  161.9

  Provision includes Home Office principal formula police grant, crime fighting fund and rural policing grant and Department of Transport, Local Government and the Regions (DTLR) revenue support grant and national non-domestic rates.

  Under DTLR floors and ceilings arrangements, all forces were guaranteed a minimum increase in police and DTLR grants of 2.3 per cent. for 2002–03. Floors and ceilings are not applied by the National Assembly for Wales, but to ensure North Wales benefited from a minimum increase of 2.3 per cent, the Home Secretary agreed to make a special payment to North Wales police authority of £362,000. Crime fighting fund and rural policing grants are outside this arrangement.

  Figures for 2002–03 are not directly comparable with 2001–02 owing to the change in funding arrangements for the National Crime Squad/National Criminal Intelligence Service. On a like—for—like basis the comparable figures
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  in 2001–02 for Dyfed-Powys, Gwent, North Wales and South Wales are £50.2 million, £65.8 million, £71.5 million and £154.3 million respectively.

  Police Officers
  Mr. Evans
  To ask the Secretary of State for the Home Department how many police officers there are in(a) the Lancashire constabulary, and (b) the Ribble Valley constituency. [63529]

  Mr. Denham
  The information has been provided by the Chief Constable of Lancashire (Mrs. Pauline Clare, CBE). I am told that it is not possible to provide the number of police officers in the Ribble Valley as the constituency is split between the central and eastern divisions and these divisions each cover other areas as well as parts of the constituency. Police numbers for both divisions are provided.

  The table sets out police and civilian support staff strength for the force and for the central and eastern divisions for 31 January 2002. Lancashire constabulary had 69 more officers in January than in March 1997 and strength was at record levels.

  Number of police officers1

  Number of civilian support staff1

  Lancashire constabulary

  3,316

  21,409

  Central division

  47

  125

  Eastern division

  544

  179

  1Strength figures are full-time equivalents

  2Civilian staff numbers are the latest available and are as at 30 September 2001

  Keith Vaz
  To ask the Secretary of State for the Home Department how many police officers were employed in England and Wales as at 1 June. [64834]

  Mr. Denham
  The latest available information on police numbers is for 31 January 2002 when there were 128,748 officers. This is 3,066 more than in March 2001 and is a record number of police officers.

  The increase in police strength reflects the impact of the Crime Fighting Fund (CFF), which is enabling forces in England and Wales to recruit 9,000 officers over and above previous recruitment plans in the three years to March 2003.

  Belmarsh Prison
  John Austin
  To ask the Secretary of State for the Home Department what action he has taken to ensure that keys are not taken out of HMP Belmarsh; what the cost was of the recent incident when keys left the prison; and if he will make a statement. [65253]

  Hilary Benn
  The Director of High Security Prisons has instructed the governor of Belmarsh, as well as the governors of the other high security prisons, to review the operation of their key management systems including the recently introduced key fob alarm system so as to ensure they prevent the removal of any keys from their prisons. Governors have been asked to report any possible deficiencies in the system, in order to enable required remedial action to be taken as soon as possible. The governor of Belmarsh has commissioned a disciplinary investigation into the recent incident at his prison.
  437W
  The cost of replacing the locks necessary as a result of the key being taken out of Belmarsh would normally have been approximately £55,000, but as the specification for the key has been upgraded since original installation at Belmarsh, the opportunity was taken to install the upgraded key at this time. This work incurred an additional cost of approximately £18,000, bringing the total cost to £73,000.

  New Prisons
  John McDonnell
  To ask the Secretary of State for the Home Department who will pay insurance for new prisons in England and Wales. [65423]

  Hilary Benn
  Insurance for new prisons in England and Wales designed, constructed, managed and financed by the private sector will be paid for by the contractor as part of the contract price.

  Prison Building
  Mr. Wilshire
  To ask the Secretary of State for the Home Department if he will make a statement on the delay in signing the contract for the building of a privatised prison at Ashford (Middlesex). [66493]

  Hilary Benn
  [holding answer 2 July 2002]: There has been a delay in signing the contract for the new prison at Ashford due to problems arising from insurance. Discussions are continuing between the contractor and the Prison Service with a view to solving these problems.

LORD CHANCELLOR'S DEPARTMENT

  Civil Courts
  Phil Sawford
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many courts he expects will(a) close and (b) be downgraded as a result of the proposals to modernise the civil courts; and which courts will be affected. [65417]

  Yvette Cooper
  Under the Courts and Tribunals Modernisation Programme the Court Service is developing new ways of delivering services to users. The current proposals involve introducing hearings in 37 locations which currently do not have a county court and closing one county court, Shoreditch.

  The purpose of this programme is a strategic consideration of the existing network of courts to increase the number of places where cases are heard. The effect of this will be the establishment of primary hearing centres as the principle venues for hearings supported by a network of full and part-time local hearing venues ensuring access to justice across England and Wales. All those courts which will operate as local hearing venues will continue to provide hearings for their local communities. Detailed plans are still being developed, and will depend on the funding available following the Government's spending review. They will also be subject to public consultation.

  The tables included in our report on "Modernising the Civil and Family Courts", show the detail of our proposal for the civil and family court network of the future. The report was published on 23 May and copies are in the Libraries of both Houses.
  438W
  Keith Vaz
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many courts will close to the public as a result of her proposals to modernise the civil courts. [65278]

  Yvette Cooper
  Under the Courts and Tribunals Modernisation Programme the court service is developing new ways of delivering services to users. This includes a strategic consideration of the existing network of courts. Current proposals involve holding part-time hearings at 37 new venues and closure of only one county court, Shoreditch. Detailed plans are still being developed, and will depend on the funding available following the Government's spending review. They will also be subject to public consultation.

  Details of the emerging strategy for the court estate were published in the "Modernising the Civil and Family Courts" report which was published on 23 May 2002 and placed in the Libraries of both Houses.

  Criminal Justice (Timeliness Targets)
  Mrs. Curtis-Thomas
  To ask the Parliamentary Secretary, Lord Chancellor's Department what further timeliness targets have been identified; which criminal justice departments are involved in this activity; and when an announcement will be made concerning the timeliness targets. [59340]

  Yvette Cooper
  We are working with the Home Office, Crown Prosecution Service and Youth Justice Board on targets for all adult defendants in the magistrates courts and for all defendants in the youth court, charged with crime. When these are settled an announcement will be made.

  Youth Courts
  Kate Hoey
  To ask the Parliamentary Secretary, Lord Chancellor's Department what plans the Department has to reduce the number of trials in youth courts that are adjourned. [60325]

  Yvette Cooper
  The Lord Chancellor wrote to all youth panel chairs in May 1997, encouraging them to scrutinise all request for adjournment by questioning and probing the reasons advanced in support. In response to the call from Government to speed up case management in our courts the Magistrates' Association produced a training course on effective case management entitled "Can We Get On Please". The Youth Court Bench Book issued in September last year to all youth justices includes a section on case management, an adjournment guide and check list. Sample surveys of cases in the youth court suggest that the proportion of defendants who had the case against them adjourned fell from 78 per cent. in 1997 to 74 per cent. in 2001.

  Kate Hoey
  To ask the Parliamentary Secretary, Lord Chancellor's Department what plans the Department has to take measures to discourage the tactical not guilty plea in youth courts. [60328]

  Yvette Cooper
  My Department has been involved in an interagency review of measures to reduce delay in the magistrates courts generally. One of the outcomes of this review was that last year the Justices' Clerks' Society and the Law Society both reminded their members of the need to draw to the attention of defendants the fact that in
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  reaching a sentence the bench will take into account a timely plea of guilty. Further work is under way in respect to the Auld review.

  Voting Methods
  Ian Lucas
  To ask the Parliamentary Secretary, Lord Chancellor's Department what estimate she has made of the additional cost of holding an all-postal ballot in a nationwide election or referendum. [64311]

  Yvette Cooper
  No estimate has been made of the cost of holding a nationwide election or referendum by all—postal ballot.

  Queen's Counsel
  Keith Vaz
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many persons applied to take silk in the last five years; and what percentage were successful. [64831]

  Ms Rosie Winterton
  The table shows the total number of applicants for silk in the last five years and the percentage of total awards made (excluding Honorary Silk):

  1998

  1999

  2000

  2001

  2002

  Total applicants

  511

  553

  506

  456

  429

  Total award1

  60

  69

  78

  77

  113

  Percentage of applicants granted the award of Queen's Counsel

  11.74

  12.48

  15.4

  16.9

  26.3

  1Excl. Honorary Silk

  Keith Vaz
  To ask the Parliamentary Secretary, Lord Chancellor's Department when feedback is given to persons who apply for silk who are not successful. [64833]

  Ms Rosie Winterton
  Applicants who have been unsuccessful in their application for silk may receive feedback at any time following publication of the list of successful candidates.

  EU Directives
  Mr. Bercow
  To ask the Parliamentary Secretary. Lord Chancellor's Department if he will list the EU directives relating to his Department which have been(a) amended and (b) repealed in 2002. [64943]

  Yvette Cooper
  There have not been any.

  Mr. Bercow
  To ask the Parliamentary Secretary, Lord Chancellor's Department 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. [64993]

  Yvette Cooper
  The Council Regulation (EC) No. 44–2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters entered into force on 1 March 2002. Its impact on public funds is minimal.

  Freedom of Information
  Norman Baker
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement 440W
  on plans to allow access to information about the environmental activities of business; and if this will extend to state-owned interests. [61119]

  Mr. Meacher
  I have been asked to reply.

  We will shortly be consulting the public on proposals to replace the Environmental Information Regulations 1992 (51 3240) as amended in 1998 (SI 1447).

  The new regulations will apply to public authorities and to some private bodies performing public administration functions in relation to the environment. They will include exemptions for certain categories of information, including information which is commercial in confidence.

  When a public authority receives a request for information, that authority must decide whether they regard the environmental information requested as a matter of commercial confidentiality. If they are satisfied that an exemption applies, then under the new Environmental Information Regulations, they will also apply the public interest test.

  Decisions as to whether information is commercial are subject to challenge in a court of law. In accordance with the new proposals the information commissioner will be able to consider whether public authority is following good practice and examine appeals against any refusal to supply information.

  Family Proceedings (Contact Orders)
  Margaret Moran
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list each target set for his Department to increase the number of contact orders in family proceedings for each year since 1997. [66044]

  Jacqui Smith
  I have been asked to reply.

  The Department of Health has no such targets.

HEALTH

  Northwick Park Hospital
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Health what assessment he has made of improvements in service at Northwick Park hospital since 1999; and if he will make a statement. [48897]

  Mr. Hutton
  Several assessments have been made at Northwick Park recently by the winter and emergency services team (WEST), the patient environment and action team (PEAT) and the commission for health improvement (CHI).

  WEST visited the trust on 13 December last year and were pleased to see a number of developments and innovation projects. These included:
  The relocation and expansion of the medical assessment unit
  The production of a performance improvement programme with local partners over the winter period leading to increased social care and acute medical bed capacity and a revised escalation policy
  The development of rapid access specialist clinics
  Improvements to bed management and site management.
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  The trust has recently received a London modernisation award for the cardiology team as a result of the work to reduce delayed transfers.

  PEAT carried out its latest visit on 10 April this year and Northwick Park hospital has shown continued improvement in the hospital environment and now has green light status.

  The CHI completed its report on 23 October 2001 and found many areas of good practice particularly around the multidisciplinary collaborative care team and the ambulatory care and diagnostic service.

  Mount Vernon Hospital
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Health what inspections of Mount Vernon hospital have taken place by NHS agencies in the last five years; and if he will publish their conclusions. [48905]

  Mr. Hutton
  Since 1999, Mount Vernon hospital has received two visits from the patient environment and assessment team (PEAT) and a routine clinical governance review by the commission for health improvement (CHI).

  The PEAT results were published for the August 2000. March 2001 and August 2001 inspections and are available under the Hillingdon Hospitals National Health Service Trust at: http://www.cleanhospitals.com/ national_results/index.asp?menulD=nationalresults.

  The CHI report will be published shortly.

  Ambulances
  Mr. Evans
  To ask the Secretary of State for Health what the average response time for emergency ambulances was for each hospital in Lancashire in each year since 1997. [53107]

  Jacqui Smith
  Information about emergency calls to the ambulance service is not available specifically for each hospital in Lancashire. Information about Lancashire Ambulance National Health Service Trust and all other ambulance NHS trusts, about the number of emergency calls and the proportion of emergency calls resulting in an ambulance arriving at the scene of the reported incident within the Government's target response times is contained in the Department's Statistical Bulletin "Ambulance Services, England 2000–01". A copy of the bulletin is in the Library and available at www.doh.gov.uk/public/ sb0115.htm.

  EC Decisions
  Mr. Rosindell
  To ask the Secretary of State for Health if he will make a statement on the effects of Commission Decision 18 of 27 June 2001, 2002/155/EC, 0.1 L54 of 25 February 2002, on current practice. [57897]

  Mr. Hutton
  Decision 183 of the Administrative Commission on social security for migrant workers concerned the interpretation of the provisions of Regulation (EEC) 1408–71 relating to maternity care. Its effect is that health care services required in connection with pregnancy or childbirth shall be regarded as an immediately necessary benefit, provided on the basis of EU Form E111, during a temporary stay in another member state. This applies up to the beginning of the 38 week of pregnancy, provided that the reasons for the 442W
  temporary stay are other than medical. From the 38 week, EU Form El 12 concerning travel specifically for medical care, will be required.

  Current practice in the UK is to issue Form E112 for pregnant women wishing to receive ante-natal care or give birth in another member state. Guidance to this effect is contained in the Department's leaflet "Health Advice for Travellers" (available in the Library). We expect to issue a suitably revised version of the leaflet in the late summer.

  In respect of women from other member states presenting in the UK, current UK practice is already broadly in line with Decision 183 but guidance to the NHS will be amended as necessary.

  Mixed Sex Wards
  Dr. Evan Harris
  To ask the Secretary of State for Health, pursuant to his answer of 14 May 2002,Official Report, column 624W, on mixed sex wards, how many mixed sex wards there are in the NHS. [60817]

  Mr. Hutton
  The information requested is not available in this format as compliance is measured on a trust by trust basis rather than on an individual ward level.

  The reasons for measuring at the trust level is because hospital wards generally care for both men and women. To provide the required levels of privacy and dignity for patients, wards are split into single sex bays, or single rooms, or otherwise configured to provide adequate segregation of gender. It is the responsibility of each National Health Service trust to determine the most appropriate configuration to meet their specific requirements.

  The Department has set three objectives which trusts must meet to be deemed compliant. These objectives refer to single sex accommodation and not single sex wards.

  The target set is for three objectives to be achieved in 95 per cent. of trusts by December 2002.

  The three objectives are:
  To ensure that appropriate organisational arrangements are in place to secure good standards of privacy and dignity for hospital patients;
  To achieve the Patient's Charter standard for segregated washing and toilet facilities across the NHS; and
  Provide safe facilities for patients in hospitals who are mentally ill which safeguard their privacy and dignity.

  Trusts are required to re-assess and report their position annually. This information has been collected through health authorities. Separate validation programmes are undertaken to ensure that information provided is robust and reliable.

  This is a very challenging target and we are working with the NHS to provide professional and technical support to ensure progress towards meeting this target continues.

  Guidance on maintaining privacy and dignity was issued to the service in 1997.

  NHS Foundation Hospitals
  Dr. Fox
  To ask the Secretary of State for Health on what date the first NHS foundation hospitals will be identified. [61443]
  443W
  Mr. Lammy
  The first wave of foundation trusts will be selected from among the cohort of national health service acute trusts that achieve three-stars in the performance ratings to be published in July. At this time we will publish a prospectus setting out how NHS trusts can apply for foundation status and the criteria that will be used to assess applications. Decisions on the first NHS Foundation Trusts will be made in the autumn, although their establishment will be subject to legislation.

  Social Service Departments
  Mr. Sayeed
  To ask the Secretary of State for Health (1) if he will amend the terms of the capacity grant paid to social service departments so that social services departments that perform well do not receive less than those with an average or poor performance; and if he will extend the time covered by the capacity grant; [63095]

  (2) if he will review the terms of the capacity grant paid to social service departments to ease the situation with regard to delayed discharges from hospital; and if he will extend the present capacity grant from one year only. [63482]

  Jacqui Smith
  All local councils with social services responsibilities have received a share of this grant to improve services for those discharged from hospital. In 2001–2 and 2002–3 we have targeted extra resources on those councils with particularly severe problems in providing the range of services needed, and they have had more challenging targets for reducing delayed discharge. This approach has delivered over 1,000 hospital beds no longer occupied by people awaiting discharge by March 2002.

  For the future we intend to legislate to make councils responsible for meeting the costs to the national health service of delayed discharges where councils' intervention could prevent the delay, drawing on the experience of similar approaches in Scandinavia. Local councils that meet their responsibilities in reducing delayed discharges will not be disadvantaged. They will have the money to pay for patients in the NHS if they are delayed inappropriately or in the community if they are discharged appropriately.

  Intermediate Health Care Services
  Mr. Cox
  To ask the Secretary of State for Health what recent developments have taken place in the Greater London area in intermediate healthcare services. [63591]

  Mr. Hutton
  The thirty-two primary care trusts in London along with their social services departments and partner agencies are responsible for planning and commissioning intermediate care services. The local implementation teams for the older peoples national service framework are overseeing this process. Each care community in London has an intermediate care co-ordinator and most have a wide range of Intermediate care services, both beds and community places which they are working to ensure are co-ordinated to meet their local needs. A London wide network for these co-ordinators facilitates the sharing of good practise across London.

  Twelve capital projects in London have between them been allocated £10 million as part of the £66 million capital funding for intermediate care in 2002–3 and 2003–4. These schemes will be developed over the next
  444W
  two years and will by April 2004 have significantly increased the number of intermediate care beds available across London.

  NHS (Surveys)
  Mr. Hancock
  To ask the Secretary of State for Health if he plans to introduce surveys similar to the NHS inpatients' surveys conducted this year for(a) outpatients and (b) other NHS organisations; and if he will make a statement. [64482]

  Mr. Lammy
  The first inpatient survey, as announced in the NHS Plan, has been completed. It is anticipated that the roll-out programme presently being established, will be extended to cover outpatients. The programme will also provide information about the patient experience across primary care and within areas covered by national service frameworks.

  Mr. Hancock
  To ask the Secretary of State for Health how many hospital trusts have conducted NHS in-patients' surveys this year as part of the national programme outlined in the NHS Plan; what the total cost of this exercise has been; and if he will make a statement. [64483]

  Mr. Lammy
  176 hospital trusts undertook the first national health service in-patients' survey earlier this year to directly inform local service development and improvement. In line with the policy on devolution, individual trusts were responsible for running and funding their own surveys and cost of the survey will vary from trust to trust. This was a local exercise and we do not have information on the total cost of the surveys nationally.

  Mr. Hancock
  To ask the Secretary of State for Health when the results of the NHS in-patients' surveys conducted this year will be made available to the public; in what format they will be available; if patients will be able to compare ratings for their local hospital with other hospitals; and if he will make a statement. [64484]

  Mr. Lammy
  The in-patient survey results will be made available to the public over the summer. The Department is also publishing the next set of hospital performance ratings in the summer and this will enable patients to compare the performance of national health service trusts.

  The in-patient survey results will be published locally by trusts and will be one of the features covered within the new patient prospectus, which will be published by primary care trusts in the autumn and delivered to every household.

  NHS Employees
  Ian Lucas
  To ask the Secretary of State for Health how much money was received by health authorities in each year since 1988 as a consequence of agreements with financial services companies to market their products to NHS employees. [64312]

  Mr. Hutton
  This information is not held centrally.

  National Service Framework
  Mr. Burstow
  To ask the Secretary of State for Health when he will set out his proposals for the national service framework for eyes, ears, teeth and feet. [64513]
  445W
  Jacqui Smith
  The national service framework (NSF) programme currently includes frameworks for mental health (1999), coronary heart disease (2000) the (national) cancer plan (2000), older people (2001) and diabetes standards (2001). The diabetes NSF delivery strategy is due to be published in 2002 and work is in hand on NSF for renal services, children's services and long-term conditions.

  These frameworks amount to a significant programme of quality improvement across the national health service. We have no plans to amend the programme at present.

  Ashworth Hospital
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Health what the terms of reference are for the education service within rehabilitation at Ashworth Hospital; and what targets have been established for the service. [64621]

  Jacqui Smith
  The terms of reference for the patients education department are:to develop a needs led service with regular curriculum reviews focusing on content and methods of delivery
  to ensure the clinical agenda is met in education activities by strengthening its interface with the care services.

  The rehabilitation service review completed in November 2000 recommended twenty-one action points, including the three key points outlined below, all of which have been implemented.
  Integration of the rehabilitation service with the clinical service
  Extension of on-ward rehabilitation service to meet individual patient needs.
  All rehabilitation services, including the education service, to become an integral part of the care programme approach.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Health how many lecturers were retained by Ashworth Hospital in each of the last five years; and how many patients there were in Ashworth Hospital in each of the last five years. [64619]

  Jacqui Smith
  The number of lecturers retained by the hospital and numbers of patients in the hospital's care in each year for the last five years is shown in the tables. The data provided for the current year reflects the change in the lecturers' contracts, in line with National Health Service terms and conditions.

  Year

  Full time Lecturers

  Sessional Lecturers

  Patients

  1997–98

  9

  11

  440

  1998–99

  7

  13

  419

  1999–2000

  7

  10

  417

  2000–01

  5

  7

  408

  Year

  Full time Lecturers

  Part time Lecturers

  Patients

  2000–01

  5

  5

  402

  446W
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Health what the timescale is of the rehabilitation service review at Ashworth Hospital. [646201

  Jacqui Smith
  The rehabilitation service review was completed in November 2000 and its recommendations have been implemented in stages. The final stage, which brought the terms and conditions of the lecturers in the patient education department into line with the National Health Service, was implemented in December 2001.

  Prescription Pre-payment Certificates
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will estimate the cost of allowing the purchase of the prescription pre-payment certificate on a monthly basis at one twelfth of the annual cost; and if he will make a statement. [64594]

  Mr. Lammy
  If prescription pre-payment certificates were available on a monthly basis at one twelfth of the current annual cost, the monthly rate would be little more than a single prescription charge, which would be attractive to people on all levels of income. In addition to the costs of collecting the payments and pursuing payment from patients who defaulted on their payments, there would be a considerable loss of charge income and a risk of very significant additional costs to the drugs bill. There would also be additional workloads for doctors if people who currently pay individual prescription charges sought prescriptions for medicines which they currently purchase.

  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will estimate the cost of including prescription pre-payment certificates within the scope of the health benefits low income scheme; and if he will make a statement. [64595]

  Mr. Lammy
  The cost would depend on the extent of the reduction in the pre-payment certificate (PPC) fee offered through the national health service low income scheme and the number of people who currently purchase PPCs who sought and were entitled to help in this way. Additionally, there could be a loss of charge income and significant additional costs to the drugs bill if people who currently pay individual charges obtained a PPC via this route for prescriptions for medicines and other items which they currently purchase.

  Prescriptions
  Mr. Paul Marsden
  To ask the Secretary of State for Health (1) what representations he has received regarding people on low incomes and their ability to afford their prescriptions; and if he will make a statement; [64593]

  (2) if he will review the arrangements for providing financial assistance in paying for necessary medication for patients; and if he will make a statement. [64596]

  Mr. Lammy
  As a result of wide ranging exemption arrangements in England, around 50 per cent. of the population do not pay prescription charges and around 85 per cent. of prescription items are dispensed free of charge. Financial assistance in paying for medication is available to recipients of income support, income based jobseeker's allowance, many recipients of working families' tax credit and disabled person's tax credit and people who hold a national health scheme low income scheme exemption certificate for full help.
  447W
  We receive representations from time to time about the ability of people on low incomes to pay for their prescriptions, but we have no plans to change the arrangements other than in the light of changes to the tax credit arrangements.

  Care Homes
  Mr. Berry
  To ask the Secretary of State for Health when the new regulatory impact assessment for the national care standards for care homes for younger adults will be published. [65035]

  Jacqui Smith
  The regulatory impact assessment for care homes was placed in the Library on 21 January 2002.

  Carers
  Mr. Burstow
  To ask the Secretary of State for Health if he will make a statement on progress towards implementing the national carers strategy requirement that general practitioners should have procedures in place to identify carers by April. [65105]

  Jacqui Smith
  Improvements in general practitioners (GPs) computer systems completed at the end of March 2002 mean that all GPs are able to record, as part of patient records, details of whether a person is a carer. They are encouraged to do so in order to facilitate the process of sign-posting carers to relevant services.

  Mr. Burstow
  To ask the Secretary of State for Health when he plans to publish the performance framework indicator for the number of carer assessments; if he will ensure that the assessments evaluate the proportion of carers assessed at the point of hospital discharge; and if he will make a statement. [65102]

  Jacqui Smith
  The performance indicator for 2000–01 for the number of informal carers receiving an assessment as a proportion of the total number of clients and carers receiving assessments was published in October 2001. Details of where assessments took place are not available.

  Mr. Burstow
  To ask the Secretary of State for Health if he will set out the criteria against which progress in implementing the national carers strategy is monitored; by what means progress is reported to the House; and when progress was last reported. [65101]

  Jacqui Smith
  I refer the hon. Member to the reply I gave him on 9 July 2001,Official Report, column 344W. My hon. Friend the Parliamentary Under-Secretary of State for Public Health (Ms Blears) summarised recent progress on implementing the national strategy for carers in a debate on 12 June 2002, Official Report, column 273WH.

  Mr. Burstow
  To ask the Secretary of State for Health if he will set out the timetable for the establishment of a fund to support the development of carers services under the Carers and Disabled Children Act 2000. [65056]

  Jacqui Smith
  I refer the hon. Member to the reply I gave him on 17 June 2002,Official Report, column 152W.

  Primary Care Trusts
  Mr. Frank Field
  To ask the Secretary of State for Health how many primary care trusts had chief executives 448W
  in post on 1 April, who were professionally qualified as general practitioners, dentists, pharmacists or opticians. [54714]

  Mr. Hutton
  Of the primary care trust chief executives in post on 1 April 2002, 12 were professionally qualified as general practitioners, dentists, pharmacists or opticians.

  Neurology
  Mr. Burstow
  To ask the Secretary of State for Health, pursuant to the answer of 24 June 2002,Official Report, column 740W, regarding long-term health, if he will invite the (a) Neurological Alliance and (b) Association of British Neurologists to participate in the external reference group; and if he will make a statement. [65127]

  Jacqui Smith
  Nominations for membership of the external reference group (ERG) have been received from a wide range of stakeholders. We will consider these before appointing the group later this year. The multidisciplinary nature of ERGs is the key to developing national service frameworks that deliver realistic improvements in services so members of the group are expected to be drawn from health and social care professionals and managers, service users and carers, voluntary organisations and representatives from other partner agencies.

  NHS Direct
  Mr. Hancock
  To ask the Secretary of State for Health how many telephone calls have been received by NHS Direct from people living in Portsmouth; and if he will make a statement. [65369]

  Mr. Lammy
  Information about calls from people living in Portsmouth has only recently been collected. The NHS Direct Hampshire & Isle of Wight site handled around 28,000 calls from people living in Portsmouth in the six months to 1 April 2002.

  Mental Health
  Lynne Jones
  To ask the Secretary of State for Health what assessment he has made of the need for additional qualified staff to implement proposals in the draft Mental Health Bill; and what measures are being put in place to ensure that an adequate number of people with the necessary experience and qualifications are available. [65452]

  Jacqui Smith
  The financial and human resource consequences of the proposals in the draft Mental Health Bill have been estimated and are being considered as part of the spending review process.

  We are acting to increase the workforce available generally to mental health services. A workforce action team (WAT) was established to look at workforce, education and training issues of the mental health workforce. A mental health care group work force team has been established to take forward the recommendations of the WAT report.

  Now that the draft Mental Health Bill has been published, we will take forward plans to work with the professional bodies and other key national organisations on the implementation of the Bill, including workforce matters.
  449W
  Lynne Jones
  To ask the Secretary of State for Health how many lay members of mental health tribunals had previously been users of mental health services. [65795]

  Jacqui Smith
  Members of the mental health review tribunal are judicial officers appointed by my noble Friend the Lord Chancellor. No information is held on whether applicants have or have not been users of mental health services.

  Radiographers
  Bob Spink
  To ask the Secretary of State for Health ( 1 ) what plans he has to improve retention of radiographers in the NHS in London; and if he will make a statement; [60873]

  (2) what estimate he has made of the impact on the NHS of resignations of radiographers in the Greater London region in the last year. [60872]

  Mr. Hutton
  The NHS plan set targets to increase the NHS workforce. This will include radiographers throughout the country and within London. We recognise that a well-motivated workforce, able to balance their work and domestic responsibilities, will provide a better service to patients.

  The regional co-ordinator been seconded from the service since November 2000, to take forward the recruitment, retention and returner initiatives in the field of radiography and the other allied health professions (AHP).

  In 1999 Ministers launched the Improving Working Lives Standard (IWL) designed to enable staff to balance their home and work responsibilities as part of this work. A combined AHP and healthcare scientist retention campaign is currently being developed and will be launched in the summer. In addition, the HR strategy for AHPs was accompanied by a booklet called "Building Careers". The booklet illustrates the varied careers available to staff within AHP and the vital contribution they make to patient and client care.

  The Department does not collect information on the number of resignations of radiographers both in London and the rest of the country.

  Correspondence
  Mr. Kaufman
  To ask the Secretary of State for Health when he will reply to the letter to him dated 3 May from the right hon. Member for Manchester, Gorton with regard to Mr. A Starkie. [61689]

  Mr. Milburn
  A reply was sent on the 2 July.

  Mr. Kaufman
  To ask the Secretary of State for Health when he intends to reply to the letter to him dated 15 May from the right honourable Member for Manchester, Gorton with regard to Mrs. Greenhalgh. 166206]

  Mr. Milburn
  A reply was sent on 2 July.

  Mrs. May
  To ask the Secretary of State for Health when he will reply to the letters from the honourable Member for Maidenhead of 19 February and 25 April regarding a constituent, Mrs. Preston on the MMR vaccine and autism. [66346]
  450W
  Ms Blears
  [holding answer 2 July 2002]A reply was sent on 3 July.

  Free Influenza Injections
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many free influenza injections have been given to pensioners in each quarter since the scheme was launched; and if he will make a statement. [65583]

  Jacqui Smith
  Flu immunisations are carried out between October and December each year.

  In 2000–01 4,965,370 aged 65 and over received their free influenza immunisation and 5,113,036 received their immunisation in 2001–02.

  Disability Equipment Services
  Mrs. Brooke
  To ask the Secretary of State for Health what action his Department has taken in response to the recommendations made in the Audit Commission's Fully Equipped report on the provision of disability equipment services for older and disabled people; and if he will make a statement. [66263]

  Jacqui Smith
  Following up its 2000 report 'Fully Equipped', the Audit Commission published 'Fully Equipped 2002' on 27 June 2002. The latter recognises the steps the Government took in response to the first. As an initial response to the new report, I am asking the national support team for the integration of community equipment services to review its action plan in the light of the Commission's recommendations and to produce commissioning guidelines for community equipment services by the autumn. Since the first report was issued the process of modernising hearing aid services has progressed to the point that about a third of the country will be benefiting from a modernised service, including the provision of digital hearing aids, by the end of this financial year. Work is also underway to spread good practice across the country's wheelchair services.

  The report affords a welcome opportunity to: remind health and social services of the importance of orthotic, prosthetic, community equipment, wheelchair and audiology services; encourage commissioners of these services to act upon the recommendations; and highlight the importance of using appropriately the additional funding the Government made available for community equipment services.

  Work-place Health
  Dr. Tonge
  To ask the Secretary of State for Health what the role of the Health Department Agency will be with respect to workplace health. [66686]

  Ms Blears
  The health development agency (HDA) is a special health authority, working to improve the health of people and communities in England, in particular, to reduce health inequalities. In partnership with others, it gathers evidence of what works, advises on standards and develops the skills of all those working to improve people's health.

  Employment is a major health determinant. The focus for this year's work on employment and health will be exploring the evidence for the health impacts of changes in work status such as unemployment, incapacity, or retirement.
  451W
  A website for supporting standards for workplace health interventions and well-being is currently being constructed by the HDA. The site will provide a tool for employers and managers of businesses and public sector organisations to address workplace health in a sustainable manner based on the needs of staff and the capacity of the organisation. Furthermore, the site will act as a portal to other workplace health-related websites spanning human resource and general management, equality issues, occupational health, health and safety, environmental impact and corporate social responsibility. The website will go live during 'Health and Safety Week' in October 2002.

  The HDA works closely with the Department of Work and Pensions, and has been asked to act in an advisory capacity on specific projects. The HDA also advises the Department and the Health and Safety Executive as required on public health issues.

  Cancer
  Mr. Wray
  To ask the Secretary of State for Health what support is given to cancer patients during their treatment. [66359]

  Ms Blears
  As part of the implementation of the NHS Cancer Plan we are developing a supportive care strategy. The strategy will ensure that people affected by cancer are able to access the right professional support, treatment and help, from when cancer is first suspected through to death and into bereavement. As part of the strategy, the National Institute of Clinical Excellence (NICE) has been asked to develop and publish evidence-based guidance on supportive and palliative care. The initial NICE findings will be available from autumn 2002 and will include guidance on psychological and social support for patients and carers.

  University Hospital Coventry and Warwickshire NHS Trust
  Mr. Burns
  To ask the Secretary of State for Health if he will make a statement as to whether the NHS will he making an enhancement to the pension arrangements for the chief executive of the University Hospital Coventry and Warwickshire NHS Trust when he retires; and how much this will amount to. [46820]

  Mr. Lammy
  [holding answer 10 April 2002]The chief executive of the University Hospital Coventry and Warwickshire National Health Service Trust resigned voluntarily and I am advised that the trust will not be making an enhancement to the pension arrangements.

  Mr. Burns
  To ask the Secretary of State for Health whether pressure was put on the chief executive of the University Hospital Coventry and Warwickshire NHS Trust by(a) Ministers and (b) the NHS executive to resign. [46823]

  Mr. Lammy
  [holding answer 10 April 2002]I am advised by the University Hospital Coventry and Warwickshire National Health Service Trust and officials at the NHS West Midlands regional office that the chief executive of the trust resigned voluntarily.

  Mr. Burns
  To ask the Secretary of State for Health if he will make a statement as to whether the NHS will he paying(a) redundancy pay, (b) compensation and (c) an ex-gratia
  452W
  payment to the Chief Executive of the University Hospital Coventry and Warwickshire NHS Trust when he retires; and how much this will amount to. [46819]

  Mr. Lammy
  [holding answer 10 April 2002]The chief executive of the University Hospitals Coventry and Warwickshire NHS Trust is an employee of that organisation. The terms of his leaving his employment are for the trust board to determine within employment law and with regard to the Department's guidance.

  Mr. Burns
  To ask the Secretary of State for Health if he will make a statement as to whether the Chief Executive of the University Hospital Coventry and Warwickshire NHS Trust will be offered another post within the NHS following his retirement. [46821]

  Mr. Lammy
  [holding answer 10 April 2002]Executive appointments within the national health service are a matter for the employing body concerned. All appointments should be made on merit and should take into account relevant factors that might bear upon the capability of candidates.

  Mr. Burns
  To ask the Secretary of State for Health what the cost to date is in(a) salaries paid, (b) management costs and (c) other related costs arising out of the suspension of consultants at the University Hospital Coventry and Warwickshire NHS Trust. [46818]

  Mr. Lammy
  [holding answer 10 April 2002]The total cost incurred by the University Hospitals Coventry and Warwickshire NHS Trust in regard to the suspension of Mr. Barros D'Sa is £219,563. This cost includes elements relating to the salary of the suspended consultant, costs of locum cover, the setting up of an Inquiry Panel in accordance with HC(90)9, legal and court costs and mediation meeting costs.

  The approximate cost incurred by the trust in regard to the suspension of Miss Briony Ackroyd to date is £467,387 based on legal costs, locum costs and salary.

  The approximate cost incurred by the trust due to the suspension of Dr R K Mattu is £57,000 based on legal costs, locum costs and salary.

  Joint Committee on Vaccination and Immunisation
  Dr. Gibson
  To ask the Secretary of State for Health who the members of the Joint Committee on Vaccination and Immunisation are; and what their institutional and commercial affiliations are. [53896]

  Ms Blears
  [holding answer 2 May 2002]The information requested is available in the Library.

  Smallpox Vaccine
  Norman Baker
  To ask the Secretary of State for Health whether he was informed, at the time of signing the contract with Powderject, that(a) the manufacturing would be sub-contracted to a further company and (b) it would be undertaken outside the UK. [54659]

  Mr. Hutton
  [holding answer 8 May 2002]Yes. The Department knew in advance of awarding the contract that PowderJect would not be the direct manufacturer and that the vaccine would be manufactured in Germany by PowderJeces partner company, Bavarian Nordic.
  453W
  Norman Baker
  To ask the Secretary of State for Health for what reasons the Powderject contract for smallpox vaccines was handled as a matter of national security; and if he will make a statement. [54655]

  Mr. Hutton
  [holding answer 8 May 2002]I refer the hon. Member to answer I gave to my hon. Friend the Member for North Durham (Mr. Jones) on 15 May 2002,Official Report, column 727.

  Public Appointments
  Mr. Simmonds
  To ask the Secretary of State for Health what action is being taken to encourage disabled people to stand for public appointments. [56147]

  Jacqui Smith
  [holding answer 13 May 2002]The Government are committed to encouraging people from all sections of society to participate in public life, particularly those from under-represented groups. Specific goals and objectives to increase the number of disabled candidates appointed to public bodies which come under the auspices of the Department were included in Public Bodies: Opening up Public Appointments 2002–2005' a copy of which is in the Library.

  Mental Health (Young People)
  Mr. Heald
  To ask the Secretary of State for Health when he last met the Secretary of State for the Home Department to discuss child and adolescent mental health services for young offenders; and if he will make a statement on future mental health provision for young offenders. [56322]

  Jacqui Smith
  [holding answer 14 May 2002]Ministers last met to discuss child and adolescent mental health services at a bi-lateral ministerial meeting on 6 February. The main focus of provision is the ongoing programme to improve the availability and quality of child and adolescent mental health services in accordance with the national development strategy, backed by £85 million of targeted funding, 1999– 2002. The aim is for all local services to be able to respond appropriately to the range of mental health demands from young people, including those arising within the youth justice system, for example through the work of youth offending teams. Good progress is also being made to provide (by means of conversion of an existing facility) a new 24-bedded unit for young people with severe mental health problems requiring treatment in conditions of security. This is part of new arrangements for the national commissioning of adolescent forensic mental health services, including also central revenue support for the two existing national health service units and the assessment of further requirements for secure places. Mental health provision for young offenders will also be considered under the relevant strand of the planned children's national service framework on which work has recently started.

  Folic Acid
  Mrs. Helen Clark
  To ask the Secretary of State for Health when the Food Standards Agency will report its findings on the results of mandatory fortification of flour with folic acid. [57822]

  Ms Blears
  [holding answer 21 May 2002]The Food Standards Agency Board considered the issue of folic acid and the prevention of disease at their open meeting on 454W
  9 May 2002. A note of the discussion has been placed on the agency website at www.food.gov.uk/multimedia/ pdfs/paperfsa020601.pdf.

  The agency will shortly write to UK health ministers with advice arising from the discussion.

  Psychiatric Care
  Tim Loughton
  To ask the Secretary of State for Health what steps his Department is taking to encourage people to train in psychiatric care. [59573]

  Jacqui Smith
  [holding answer 24 May 2002]The mental health care group work force team has set up a sub-group on recruitment and retention. The purpose of the sub-group is to encourage more people to work in mental health.

  We also encourage medical staff to develop more rounded experience, and include an element of psychiatry in their training. Psychiatry is already a core part of the training of trainee doctors. The requirements for the new social work qualification, being introduced in 2003, requires students to undertake specific learning and assessment in a number of key areas including mental health.

  Ashford and St. Peter's Hospitals NHS Trust
  Mr. Wilshire
  To ask the Secretary of State for Health (1) how much extra funding will be made available to the Ashford and St. Peter's Hospitals NHS Trust to enable it to implement its franchise plan; [66491]

  (2) how many extra (a) beds and (b) staff will be provided by the implementation of the Ashford and St. Peter's Hospitals NHS Trust franchise plan. [66490]

  Ms Blears
  [holding answer 2 July 2002]The franchise plan for Ashford and St. Peter's Hospitals National Health Service Trust does not make any commitment to extra staff and beds. The plan makes proposals for improving recruitment at the trust to ensure existing vacancies are filled. It also states that a review of the provision of services between the two sites will take place to ensure resources are used effectively.

  No additional funding will be provided centrally to the trust to implement the plan.

  Ashford (Middlesex) Hospital
  Mr. Wilshire
  To ask the Secretary of State for Health when Ashford (Middlesex) Hospital accident and emergency department was downgraded to an emergency department. [66489]

  Ms Blears
  [holding answer 2 July 2002]The merger of Ashford and St. Peter's hospitals in 1998 to create the Ashford and St. Peter's hospitals national health service trust provided an opportunity to review clinical service provision between the two hospitals. This was necessary to ensure the safe delivery of services in the light of internal and external priorities, such as junior doctors' hours, increasing sub-specialisation and clinical governance. For this reason the decision was taken, after public consultation, to treat all surgical and trauma emergencies at St. Peter's hospital and maintain an emergency unit at Ashford hospital. This came into effect on 2 October 2000.

  Teenage Pregnancy
  Mr. Pike
  To ask the Secretary of State for Health what the teenage pregnancy rate in Burnley was at the latest date for which figures are available. [65545]

  Rutth Kelly
  I have been asked to reply.

  The information requested falls within the responsibility of the National Statistician. I have asked him to reply.
  456W
  Letter from John Pullinger to Mr. Pike, dated 3 July 2002 The National Statistician has been asked to reply to your recent question asking what the teenage pregnancy rate was in Burnley at the latest date for which figures are available. I am replying in his absence.(65545)
  The latest available figures are for 2000. In that year the under 18 conception rate for Burnley CD was 49.0 per 1,000 female population aged 15–17.

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.

Customs and Excise
Earl Attlee: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I remind the House that I am president of the Heavy Transport Association.
The Question was as follows:
To ask her Majesty's Government whether Her Majesty's Customs and Excise is under parliamentary control and operates in accordance with the European Convention on Human Rights.
Lord McIntosh of Haringey: My Lords, Her Majesty's Customs and Excise is responsible to the Chancellor of the Exchequer and, in common with other public bodies, is bound under the terms of the Human Rights Act 1998 to carry out its responsibilities in a manner compatible with the European Convention on Human Rights.
Earl Attlee: My Lords, I am grateful for the Minister's somewhat optimistic reply. I fully accept the need for Customs and Excise to be able to seize a vehicle involved in smuggling. But is the Minister aware that the transport industry is becoming increasingly fed up with Customs and Excise seizing vehicles and then retaining them for considerable lengths of time without any involvement from the courts, except by means of appeal? Would not it be better if there were a requirement for a warrant to be issued by magistrates if Customs and Excise felt it necessary to retain a vehicle beyond, say, five days?
Lord McIntosh of Haringey: My Lords, I am surprised that my purely factual reply was described as optimistic. Of course, the courts are involved. An individual or company whose vehicle is seized can challenge that seizure within one month of the date of the seizure. If there is a challenge, Customs is obliged to begin magistrates' court proceedings to declare the vehicle forfeit so that it can continue to retain the vehicle. If the magistrates agree with applicant companies or individuals, they get the vehicle back. If not, then exactly what the noble Earl asks for has been achieved. In any case, there can be an appeal to the Crown Court.
Lord Campbell-Savours: My Lords, my noble friend will be aware of the case of Orchard v. Customs and Excise which was held last year before the VAT and Duties Tribunal about the confiscation of a motor vehicle arid contents in Dover. Does he know what has
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been the Government's response to the letter of formal notice that initiated an infringement procedure under Article 226 of the EC treaty issued by the Taxation Commissioner, Frits Bolkestein, on behalf of the Commission, and whether that has led to any reform of the practices at Dover?
Lord McIntosh of Haringey: My Lords, Customs and Excise replied to the letter last December, but no formal response has been received. The Commission recently decided to defer any decision on whether to act until the autumn. We are disappointed by that, because the Commission should understand that our view is fair and balanced. The provisions are aimed not at the ordinary shopper but at highly organised smugglers.
Lord Skelmersdale: My Lords, I believe that the Minister mentioned an appeal to the magistrates' court after a month. That is all very well for vehicles, but what about their perishable contents?
Lord McIntosh of Haringey: My Lords, I understand that those who have perishable contents in their vehicles are invited to take them away when the vehicle is seized.
Lord Saatchi: My Lords, have not the Government achieved the worst of all worlds with their policies in this area? They appear to have offended the hauliers represented by my noble friend Lord Attlee, the European Union and human rights groups by being too heavy handed. Yet on the other hand, they are somehow managing still to allow 17 billion cigarettes to be smuggled into the country every year.
Lord McIntosh of Haringey: My Lords, I was not aware that the noble Earl, Lord Attlee, claimed that the Freight Transport Association was offended by Customs procedures. Surely, the important consideration is that we should protect legitimate business. I should have thought that that would be the priority for the Conservative Party, just as I should have thought that it would be a priority for it not to be encouraging tax harmonisation within the European Union.
Lord Swinfen: My Lords, how many single-vehicle companies and individual owners have been put out of business by their vehicles being impounded by Customs and Excise when they ought not to have been?
Lord McIntosh of Haringey: My Lords, I do not know how many such single-vehicle companies there are, but as only 700 commercial vehicles were impounded between June last year, when the policy was introduced, and January, clearly not many of those can involve single-vehicle companies.
Lord Newby: My Lords, does the Minister accept that we have levels of smuggling into this country that we have not had since the 18th century? Does he

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further accept that, whatever one's views about tax harmonisation within the EU, such levels of smuggling are likely to continue whatever the level of seizures by Customs as long as excise duty rates differ so strongly between Britain and our continental neighbours?
Lord McIntosh of Haringey: My Lords, I am interested to hear that the Liberal Democrats are in favour of greater tax harmonisation. I should have thought that both Opposition parties would have taken account of the fact that our levels of duty on tobacco and cigarettes are justified by health reasons, quite apart from the fact that, otherwise, the cost that would have to be met by a reduction in expenditure on health, education and other worthy causes would be severe. If, for example, we were to reduce alcohol duties to the level prevailing in France, we would lose over £5 billion. That represents more than two pence on the rate of income tax.
Lord Elton: My Lords, tax harmonisation is the policy of making the taxes on any commodity the same throughout Europe. The difference that my noble friend is complaining about is a large one. Would not a level somewhere between the two be acceptable?
Lord McIntosh of Haringey: My Lords, a level somewhere between the two would be slightly less damaging to health and would take slightly less revenue away from health, education and other worthwhile causes. If the noble Lord wants to see such a compromise, he is welcome to try to persuade his party about it.

Poverty
2.44 p.m.
Earl Russellasked Her Majesty's Government:
What size of income they believe constitutes a subsistence level for (a) a single person, (b) a couple and (c) a couple with two children.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, we do not believe that it is possible to arrive at such a figure. The measurement of poverty can include not just low income but factors such as how that income is spent, on whom in a family it is spent and for how long that low income persists. That is why we issued a consultation document on measuring child poverty last April. I hope that the noble Earl will feel able to respond to it.
Earl Russell: My Lords, if it is impossible to arrive at such a figure, how come that 10 other major European countries have done so? Will the Minister attempt to put that ignorance right, or should the House regard it as invincible?
Baroness Hollis of Heigham: My Lords, the noble Earl did not, perhaps, listen with his usual care to my Answer. No one doubts that low income is part of the problem of poverty. I shall give the example of a lone parent who has a child of 10 and is on an income of £100 after housing costs. She is divorced, has her own home and is poor because she is training to be a teacher. Her poverty is short term, and the outcomes for her and her child are good. We should also consider the case of another lone parent with a similar child and a similar income who lives in a run-down council flat, has no qualifications and has lived on benefit for 10 years. Her outcomes are likely to be poor. What matters is the persistence of poverty. The poverty that scars children is the poverty that persists. That is what we must capture in our analysis.
Lord Marsh: My Lords, given that the Government do not, on the whole, approve of means-tested benefits, how do they arrive at figures for minimum benefits if they have no figure for minimum need?
Baroness Hollis of Heigham: My Lords, we inherit benefit figures, and the benefits are then targeted at those who need them. Since our Government came into office in 1997, we have seen increases well beyond the retail prices index in many benefits. We recognised that the groups that we wished to help needed our support. For example, the income support rate for those with children under 11 was £16.90 in 1997. If that figure had been RPI-ed, it would now be £18.50. In fact, it will be £37 by October. The figure will have doubled. The carers' premium on income support for those caring for people has doubled since 1997. Pensioner couples are, on average, £25 a week better off in real terms since 1997. The Sure Start maternity grant was £100 in 1997 and is now £500.
We inherit a benefits structure, we judge whether it meets the need, as we see it, and then we target our resources. We have a record of which we are proud.
Lord Morris of Manchester: My Lords, I welcome the Government's commitment to the eradication of child and pensioner poverty and congratulate my noble friend on continuing to face all corners with her customary fortitude, even on occasion perhaps what the good and noble Baroness, Lady Park of Monmouth, calls "the termites of the Treasury". But can she say what the Government believe to be the minimum income, after rent and council tax, necessary to protect expectant mothers from being at risk of giving birth to low-weight and thus highly vulnerable babies?
Baroness Hollis of Heigham: My Lords, I do not have a figure for a pregnant woman with or without children. However, in households of below average income, the 60 per cent figure—that is, the relevant poverty line for 2001 for a lone parent with two children under 11—is £147. Benefit levels for 2003–04 will be £147. The family budget unit, to which my noble friend refers, had it been RPI-ed, would be less than what we pay in benefits. That is a decent response to the issue.
Lord Higgins: My Lords, does the Minister recall that, at the general election, the Government appeared to have no problem defining child poverty? Their manifesto said that in the previous Parliament over a million children had been taken out of poverty. Subsequently, official statistics showed that claim to be wrong. Now the Government say that we must change the definitions. Will there be no definition against which to judge the Prime Minister's commitment to take children out of poverty within a generation until the inquiry is finished?
Baroness Hollis of Heigham: My Lords, I wish to make two points in response to the noble Lord. First, as a result of our policies since we came into office in 1997, 1.4 million children —not 1 million—have been taken out of poverty compared with the number that had been in poverty. I see that the noble Lord is shaking his head; I can write to him with the figures. I can assure him that they are correct. Some 1.4 million of those children who were living in poverty in 1997 are no longer living in poverty.
Secondly, we set ourselves another test, one that relates to wages rather than simply looking over and above the baseline figure from 1996–97. The test suggests that child poverty affects those children currently living below 60 per cent of median income. That means that as the wealth of the country increases, if benefits are only inflation-proofed then the gap will grow. We are one-third of the way to meeting our child poverty targets in one-third of the time. We have done very well, but we still have a long way to go. However, I am confident that our new tax credits policies will take us much further along the way.
Lord Tebbit: My Lords, do the responses of the noble Baroness to the questions put by my noble friend and by the noble Earl, Lord Russell, suggest that one cannot define poverty as a state existing below a certain level of income but that it can be defined only in relation to the incomes of other people? Surely that cannot be poverty. If the noble Lord the Leader of the House were to be given a substantial pay increase next year, that would not make me any the poorer, would it?
Baroness Hollis of Heigham: My Lords, as my noble friend has just pointed out, it may not make the noble Lord any poorer; it may simply make him envious. However, the noble Lord is right. The problem with a relative measure of poverty is that one then measures inequality as much as one measures poverty. That was why, in response to his noble friend, I sought to make a distinction between what might not exactly be termed as "absolute" poverty but the benchmark of when we came into office and what we have done since then compared with relative poverty.
Following the line of the noble Lord, Lord Tebbit, the best way for the Government to meet their child poverty targets would be for the Chancellor of the Exchequer so to mismanage the economy that national wealth reduced. As a result, therefore, the relative
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figure would rise. However, while that would be jolly good for child poverty targets, it would be jolly bad for child poverty.
Earl Russell: My Lords, without prejudice to the first Answer given by the Minister, does she accept that there can be such a thing as an income too low for subsistence?
Baroness Hollis of Heigham: My Lords, it is certainly true that, for reasons I do not fully understand, some people are living on incomes below the level of benefit income. They tend often to be self-employed people who are living off their stock. However, the noble Earl will also know that the statistics with regard to people living on very low incomes are not particularly robust—indeed, they are pretty flaky.
The noble Lord, Lord Tebbit, identified a problem. The test of measuring poverty which the Government have set themselves—the test of relative poverty—does not pick up other considerations such as the persistence of poverty. It is that persistence which scars. That is why we are consulting widely on re-measuring child poverty. I have checked that the relevant document is available in the Printed Paper Office. We have produced four ways of measuring it. At a seminar of academics and voluntary groups that I attended last week, several further methods were put forward.
We need to hold the widest possible consultation and achieve the widest possible consensus in order to arrive at a measurement of poverty that is transparent, robust and holds government to account, and, in turn, gives government proper policy levers in order to take action. If the noble Earl, Lord Russell, responds to our document, I hope that he will become a part of that way forward.

Road Safety
2.54 p.m.
Lord Bradshawasked Her Majesty's Government:
Whether they are satisfied with progress towards achieving the road safety targets in the 10-year plan.
Lord McIntosh of Haringey: My Lords, the Government remain fully committed to their road casualty reduction targets for 2010 set out in the strategy document, Tomorrow's Roads: safer for everyone, and will take all necessary measures to achieve them.
Lord Bradshaw: My Lords, I thank the Minister for that reply. In view of the fact that the recently published road safety statistics show that accidents are increasing, does he agree with the Select Committee in another place, which said that speed is a major factor in road accidents? I shall quote a phrase from the committee:
"The Government needs to give political leadership".

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What steps are the Government taking, bearing in mind that they have tightened significantly the criteria for the siting of speed cameras; they have refused to do anything about people using mobile telephones while driving; and the fact that their love affair with the extreme elements of the motoring lobby is quite contradictory to their targets set out in the 10-year road safety plan?
Lord McIntosh of Haringey: My Lords, the most recent accident statistics, as the noble Lord, Lord Bradshaw, describes them, should be taken in terms of deaths and serious injuries. That is the measure we take. While there has been a slight increase in the number of deaths, there is a continuing decline—as has been the case for many years now—in the number of deaths and serious injuries taken together.
It is quite true that the Select Committee pointed out that speed is one of the most significant elements in road accidents. We continue to keep speed limits under review. I should remind the noble Lord, Lord Bradshaw, that, under certain circumstances, local authorities are empowered, without the need to refer to central government, to reduce speed limits in their own areas. Speed cameras have formed another significant element in speed reduction. There is no doubt that speed cameras work, but it is important that they should be seen by motorists as a means of reducing accidents rather than as a means of raising money for the Treasury. That would reduce confidence in our policies in general.
Baroness Gibson of Market Rasen: My Lords, evidence shows that between 800 and 1,000 people are killed each year in work-related road accidents. Can my noble friend assure the House that the Health and Safety Commission and the Health and Safety Executive will have sufficient resources to be able to extend their activities into this area of work?
Lord McIntosh of Haringey: My Lords, we are aware of the Health and Safety Commission task force on this subject. We have received a report from the Health and Safety Commission on the matter, which has been placed in the Library of the House. We are now considering our response. I hope that there will be no significant delay in the Government's response to this important report.
Lord Roberts of Conwy: My Lords, does the noble Lord agree that a major contribution to road safety has been made by the motorways of this country? Does he further agree that what is now required in order to reduce traffic congestion and gridlock, and to increase road safety, is more motorways?
Lord McIntosh of Haringey: My Lords, I do not think that that follows at all. It is certainly true to point out that two things have happened at the same time: the first is that there has been a continuing reduction in the number of deaths and serious injuries on our roads, which is to be welcomed; secondly, accidents on
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motorways are at a lower level than is the case on other types of road, where the road area is shared by pedestrians and cyclists as well as motor vehicles. It does not follow from that at all that we should have more motorways.
Baroness Williams of Crosby: My Lords, can the Minister respond in further detail to the question raised by my noble friend with regard to the use of mobile telephones while driving? It is very troubling to see people using mobile telephones while driving at high speeds on the motorway. Do the Government have any intention to legislate in this area?
Lord McIntosh of Haringey: My Lords, I think that we have all experienced people using their mobile telephones in what appear to be dangerous situations. I have been overtaken both on the outside and on the inside by drivers carrying mobile phones. It is an offence to drive dangerously and using a hand-held mobile telephone is dangerous. However, it does not follow necessarily that it should be a specific and separate offence to drive while using a hand-held mobile telephone, although that may become necessary if we cannot persuade drivers not to do it. I remind the noble Baroness, Lady Williams, that after the wearing of seat belts was made compulsory, it took very many years for the belts actually to be used. We still think that, for the present and until we are convinced otherwise, the existing legislation covers this point.
Lord Faulkner of Worcester: My Lords, does my noble friend agree with the concern expressed by the Select Committee in the other place about the 11 per cent decline in the number of traffic police over the past four years? Can he reassure the House that the Government intend to ask police forces to make traffic policing a priority in the national policing plan?
Lord McIntosh of Haringey: My Lords, I can certainly confirm that traffic policing is a part of the general aims and objectives of police forces and is therefore a priority. I am not quite sure what are the numbers of traffic police. The work of traffic police is often integrated with crime prevention and crime discovery activities, which seems sensible. It is often difficult to tell whether a policeman is acting only as a traffic policeman. In any case, it is the use of technology which is very much helping in the reduction of traffic accidents.
Baroness Trumpington: My Lords, have the figures been split between cars and motor-bikes? The Minister concentrated on cars, but have there been more motorbike deaths and accidents recently? My experience is that motor-bike riders swish through the lumps and bumps in the road, whereas cars have to pull up and go slower.
Lord McIntosh of Haringey: My Lords, the figures I gave related to motor vehicles, including motor-bikes. It is certainly true that motor-bikes are much more dangerous for the drivers than passenger cars.
Viscount Astor: My Lords, I hope that—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, we really must go on to the next Question. I gave way to the noble Baroness, Lady Trumpington, because she kept importuning me.

Sikhs
3.1 p.m.
Baroness Anelay of St Johnsasked Her Majesty's Government:
Whether they recognise Sikhs as a distinct ethnic group.
The Parliamentary Under-Secretary of State, Home Office (Lord Filkin): My Lords, we do, in accordance with the Law Lords' judgment of 1983 in the case of Mandla v Dowell Lee, which established that Sikhs are an ethnic group for the purposes of the Race Relations Act. If memory serves me right, the noble and learned Lord the Lord Chancellor, in his former life, appeared for the successful appellant.
Baroness Anelay of St Johns: My Lords, I thank the Minister for that Answer. Is he aware that the Sikh community in this country is so disappointed with the Government's general stance over the operation of the Race Relations Act that it is lobbying Parliament today to ask the Minister to reconsider current policy to catch up with the needs of today, and to accept that public authorities must monitor Sikhs separately for racial monitoring purposes? This is to ensure that the estimated 700,000 strong British Sikh community is given proper protection, especially following the events of September 11th, from discrimination in the operation of the Race Relations (Amendment) Act. Will the Government now consider issuing guidance so that all public authorities, not only some, are left in no doubt that they must take action on this matter?
Lord Filkin: My Lords, I was aware of the lobby and its views. I look forward to discussing this issue in more detail with representatives of the Sikh community when I meet them at the end of this month. In short, the representations made did not persuade the Office for National Statistics, which consulted the CRE on this issue, that it was necessary to include Sikhs as a separate category in the 1991 or 2001 censuses. But, of course, Sikhs would have been able to put "Sikh" on the census form under the "other" category, if they so wished. They will also be identified as a religious group, which was included in the 2001 census for this purpose.
Lord Dholakia: My Lords, while accepting that the Mandla judgment identified Sikhs as a distinct ethnic
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group, it also created a number of anomalies in that other groups have been excluded from the definition. What do the Government have in mind to ensure that such groups, particularly those with religious beliefs, are included in future equality legislation?
Lord Filkin: My Lords, both in my role and more widely across government we are well aware of the sensitivity of this issue and of the importance in a multiracial and multi-ethnic society of properly reflecting the diversity that exists. Therefore, I am certain that before the next census—if it proceeds in the form of previous censuses—there will be the most careful consultation on this issue. We shall also seek proper consultation on the other circumstances in which it will arise in the future.
Lord Avebury: My Lords, is the noble Lord aware that the advice being given by the CRE to public authorities on how they should conduct ethnic monitoring in connection with their obligations to produce statements of race equality, requests them to use the ethnic categories contained in the census? Therefore public authorities will not have particular regard to the special needs of the Sikhs, or indeed of any other minority community which is not named in the census. Does the Minister agree that the advice being given by the CRE should be revised to take into consideration the diversity of ethnic groups in our society?
Lord Filkin: My Lords, the code of practice gives the advice signalled by the noble Lord, Lord Avebury—that is, that it is sensible to make it possible to compare local data with the census data. That is common sense because, without those comparisons, many other issues are difficult in policy terms. On the other hand, the code of practice also states that it is open for a local authority or police force to disaggregate, if they so wish, within a particular category to allow the finer grain detail in their monitoring that the noble Lord, Lord Avebury, advances. The code of practice, therefore, permits exactly what the noble Lord proposes.
The Lord Bishop of Wakefield: My Lords, there is a significant Sikh community in Huddersfield, which is in my diocese, and a large Muslim community. There is also a quite significant Christian Asian community. In terms of the Question, can the Minister define where he sees an "Asian Christian" community?
Lord Filkin: My Lords, shooting from the hip, I would have thought that a Christian Asian would have indicated "British Asian" under the question about ethnic origin in the census; and, under the question about religious affiliation, would have written "Christian".
The Earl of Sandwich: My Lords, given the historic commitment of the Sikh people to this country, is it not time that we had a turban in this House?
Lord Filkin: My Lords, that is an interesting and important question, which I am sure will be noted. I agree that Sikhs have made a great contribution to Britain. They are a proud race who fought the British in India and fought with the British in the last two wars. They have made many significant contributions to the social and economic life of this country.

National Insurance Contributions Bill
3.7 p.m.
Read a third time, and passed.

Consolidated Fund (Appropriation) (No. 2) Bill
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)
On Question, Bill read a second time; Committee negatived.

Education Bill
3.8 p.m.
Read a third time.
Clause 1 [Purpose and interpretation of Chapter 1]:
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)moved Amendment No. 1:
Page 2, line 1, leave out subsection (3).
The noble Baroness said: These are minor technical amendments which we should have included with our previous amendments to the clause. I apologise to the House for that omission.
The current definition of "children" is expressed to refer to subsection (1) only. Now that we have introduced references to "children" in Clause 1(2) and Clause 2(5) we need to ensure that the definition applies to the whole chapter. The amendments achieve that. I beg to move.
Baroness Blatch: My Lords, perhaps I may ask the Minister a question. A concern that has always received a great deal of sympathy in this House in relation to young people with special educational needs—"looked-after children", to invoke the reference of the noble Earl, Lord Listowel—is in relation to children between the ages of 19 and 25. What is the status of that age group when it comes to meeting their needs?
Baroness Ashton of Upholland: My Lords, we have always made sure that within legislation we define where the application of different age groups is. For the purposes of this Bill, what I have said is what would
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apply. I take the noble Baroness's point. But it would be the case that that is applicable for those particular groups in legislation as we have said throughout. So in this context, it is not applicable; but it would be applicable in legislation where we made a point of referring to that particular age group. I am happy to send an explanation to the noble Baroness and place a copy of my letter in the Library of the House, but that is the case for the purposes of this part of the Bill.
On Question, amendment agreed to.
Baroness Ashton of Upholland Baroness Ashton of Upholland moved Amendment No. 2:
Page 2, line 7, at end insert—
""children" means persons under the age of nineteen;"
On Question, amendment agreed to.
Clause 2 [Power to suspend statutory requirements etc.]:
Baroness Darcy de Knayth Baroness Darcy de Knayth moved Amendment No. 3:
Page 3, line 10, at end insert—
"(5A) Notwithstanding the provisions of subsection (5), no order under this section shall confer on the applicant exemption from any of the provisions determined by the following sections of the Education Act 1996 (c. 56)—

(a) section 321 (the duty to identify children with special educational needs as defined by section 312);

(b) section 317 (the duty on governing bodies of schools to use their best endeavours to meet the needs of pupils with special educational needs);

(c) section 323 (the duty to assess children's special educational needs, when necessary);

(d) section 324 (the duty to make and maintain statements of special educational needs, when necessary);

(e) section 331 (the duty to assess and provide for children under 2 years of age)."

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 4, which represents a fallback position designed to incorporate in regulations the list of key duties set out in Amendment No. 3; namely, duties of school governing bodies and LEAs towards children with special educational needs.
The purpose of both amendments is to secure for the future the legal safety net for children with special educational needs which was created by certain duties in the Education Act 1981 and which now form part of the Education Act 1996. I am very grateful to my noble friend Lady Warnock, the catalyst of the 1981 Act, and to the noble Baroness, Lady Blatch, the mother of the 1996 Act, for adding their names to these amendments. The proposals have the backing of the Special Educational Needs Consortium, which includes IPSEA. I should declare that I am a patron of IPSEA. These essential duties are set out in Amendment No. 3. I am encouraged that they were identified, apart from Section 331, as key duties in special education law by the Audit Commission in its recent report.
Why are they necessary? Clause 2 as it stands allows the Secretary of State or the National Assembly for Wales to exempt applicant schools and LEAs from any requirements of education legislation to allow the

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implementation of innovative projects that may, in the opinion of the Secretary of State, contribute to the raising of educational standards.
Both in Committee and on Report, several noble Lords moved and spoke to amendments supported by the SEC which were designed to remove legislation relating to children with special educational needs from the Secretary of State's power to exempt.
I shall not bore your Lordships by repeating the speech that I made in Committee on 2nd May, at cols. 845 to 846, stressing that the protection afforded by the statement of special education provision depends on the linking together of several separate duties as set out in Amendment No. 3. Paragraph (b) referring to Section 317 relates to children with special educational needs but without a statement.
As with any chain, the removal of one linkx2014;for example, an LEA being relieved of one of its legal duties by a future Secretary of Statex2014;would totally undermine a child's legal entitlement to special educational provision. One duty goes, and the safety net collapses.
No one was saying that we should not innovate, but people were concerned that the Bill as it stood threatened the legal safety net. The noble Lord, Lord Lucas, summed it up very well in our debate on 2nd May when he said that the Government must,
"find a way of making the protections sacrosanct, while leaving as much room as possible for SEN education to do better than is the case at present".—[Official Report, 2/5/02; col. 848.]
The Minister argued at both stages that our amendments would not allow innovative projects to apply to children with SEN. On Report she brought forward an amendment requiring the Secretary of State or the National Assembly for Wales to refuse to use the power to exempt if it,
"would be likely to have a detrimental effect on the education of children with special educational needs".
That requirement is now included in Clause 2(2)(5). The consortium welcomed this amendment as affording some protection from the consequences of exemption from education legislation. The noble Baroness, Lady Sharp, and my noble friend Lord Rix were satisfied that the amendment secured the protection we had been seeking.
Throughout the passage of the Bill, the Minister has been very generous with the time she has given us for meetings and discussions. I stress that I am in no way imputing an evil intention to the Minister. I know that she is fully committed to the improvement of the lot of children with SEN. During our discussions, I said that I was satisfied with the proposed amendment, but I became increasingly uneasy, as did the SEC, that nowhere does the government amendment in Clause 2(2)(5) state that the key duties are secured. It leaves it to any future Secretary of State to determine whether their suspension would have a detrimental effect on the education of children with special educational needs. I am immensely encouraged by the support of my noble friend Lady Warnock and of the noble Baroness, Lady Blatch.
Why are we so concerned about the safety net? Innovation and flexibility go hand in hand. Many noble Lords will recognise that "flexibility" can send a shiver down the spine of those who provide support and advice for the parents of children with special educational needs. Noble Lords will remember the debate about quantification of special educational provision in statements, about woolly statements—so christened by the noble Lord, Lord Lucas—being detrimental, and how the then Secretary of State, David Blunkett, agreed two hours before the Second Reading of the Special Educational Needs and Disability Bill that the provision should be specified rather than set out. During the course of that Bill, the noble Baroness, Lady Blackstone, brought forward many amendments in response to mine to plug loopholes in the 1996 Act. The noble Baroness, Lady Ashton, was rightly applauded for her courage and common sense in taking back the draft code of practice and rewriting the relevant parts—one of her first acts as a Minister. All this required pressure and vigilance.
The noble Earl, Lord Russell, is wont to say that Ministers resisting an amendment have two arguments: either that it is wrecking, or that it is unnecessary. I now understand that, while not wrecking the Bill, our previous attempts at amendments all had the effect of barring any innovation for children with special educational needs. I hope that the Minister will not argue that these amendments, pared down to the bare essentials, are unnecessary.
Amendment No. 3 would exempt only the key duties from Clause 2 and would in no way inhibit the ability of LEAs or schools to develop innovative projects aimed at better meeting the needs of all children, but it would keep the safety net in place, just in case, for those children with special educational needs. Let us remember that it is only for the few—the 2 per cent, not the 18 per cent—of those with special educational needs who need the protection of the statement where their school or nursery cannot meet their needs with provision ordinarily available.
Amendment No. 4 would enable all these duties to be specified in regulations, if the Minister agrees—although obviously it would be preferable to have that specified on the face of the Bill. What we need is to be sure that these key duties will remain the law despite exemption for innovation. I hope that the Minister will respond very positively either by accepting one of the amendments or by finding some other way of reassuring us beyond all doubt. It may be that the noble Baroness, Lady Sharp, and my noble friend Lord Rix are right and that the protection is there. But many of us are concerned, as is the SEC. We need it clearly stated that the key duties will remain in place as a matter of law and not at the discretion of the Secretary of State. I beg to move.
3.15 p.m.
Baroness Warnock: My Lords, I want to speak briefly in support of the amendment. I have in mind two points which it makes clearly. One is that the children who are most at risk of being swallowed in the

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excitement of innovations of various kinds may well be those children who fall into the so-called 18 per cent of children who will not have statements. Those are the children who are most in need of having this protection on the face of the Bill.
Secondly, in the new subsection (5A)(a) proposed by the amendment, the duty to identify children with special educational needs must be protected. I believe this to be the most important part of the amendment. A school may innovate by introducing enrichment programmes and all kinds of different ways of teaching children who may have high ability, which I greatly welcome. Nevertheless, in whatever category or class of children—I mean "class" literally—there are certain to be a number of children who will not have statements but who will be entering into, perhaps temporarily, a condition of special educational needs and who have emotional or behavioural problems or who are falling behind in one way or another. It is essential, in the spirit of previous Acts, beginning with the 1981 Act, that the protection for such children should be on the face of the Bill.
Baroness Uddin: My Lords, I hesitate to rise given that I did not take part in the Second Reading debate. This is a subject close to my heart and I would do myself no justice if I did not say a few words. I support Amendment No. 3, particularly with reference to the issues raised by the noble Baroness, Lady Warnock, concerning the need to identify children's educational needs. I echo everything said by the noble Baroness, Lady Darcy de Knayth. She paid due respect to the Government's position up to now, but it is critical that we maintain the spirit of the amendment as tabled. I look forward to the Minister's response.
For a long time parents have fought tooth and nail to have the right to statements. To leave those parents and children exposed to the flexibility of the governing body or the LEA is inappropriate and unwise, given the experience of a minority of children. I note with some concern that the amendment does not address the issue of service provision. It is all very well having grand plans for children and services, but parents are often dissatisfied with the way that statements are provided. Service delivery is important. I am disappointed that neither this amendment nor the others tabled address that issue.
Baroness Blatch: My Lords, I have added my name to the amendment. It is fair to say that there is a great deal of meeting of minds across the Chamber. The noble Baroness, Lady Darcy de Knayth, mentioned that the Minister has been sympathetic and has put forward amendments. The noble Baroness, Lady Darcy de Knayth, is equally understanding about the need to achieve the Government's ends; namely, to allow for innovation to be freely undertaken in schools.
We all agree that it should not be done at the expense of provision for young people with special educational needs. The difficulty is the distinction as to whether it should be a game of chance and left to the discretion
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the Secretary of State, or whether it should be a matter of law by removing the discretion. There could be occasions when a Secretary of State makes a judgment that is more subjective than objective and everybody else takes a different view on the provision for special educational needs.
On Report the Minister said that it was inconceivable that a decision would be taken to allow for an innovative project which, in fact, had an adverse impact on young people with special educational needs. We only ever talk about the Secretary of State who we know is in power at any given time. People often say that Secretaries of State come and they go. They vary in style and the way in which they approach making decisions. Therefore, I believe the amendment is about taking chance and discretion out and making it a matter of law that there shall be no room for allowing any project that would impact adversely on provision for young people with special educational needs.
I suspect that we may just hear something to our liking from the Minister. If not, and the noble Baroness, Lady Darcy de Knayth, wants to press the amendment, she will have my support.
Lord Campbell of Alloway: My Lords, I apologise for speaking at all. I have not spoken on this Bill. I have been involved in another Bill. The reason I am speaking is that many years ago I introduced a Private Member's Bill on special educational needs. After a considerable battle with the Government, eventually my noble friend Lady Blatch took over at Report stage and implemented the principles in the 1996 Act.
The reason I am speaking is that having really got in here by mistake and having discovered what was going on, it seems to me incredible that one should not have an effective measure of safeguard to preserve the statute of 1976 in its full efficacy. There should be no doubt about it at all. I do ask your Lordship's forgiveness for having taken the time of the House.
Lord Addington: My Lords, I feel slightly abashed at joining in this Who's Who of legislation on special educational needs. When the Minister tabled the amendment that is now Clause 2(5), I thought it provided the defence and framework that is required to ensure that we retain those rather hard-won defences for those with special educational needs. However, enough people who know enough about this subject have raised questions for me to feel that it is just that we ask the Minister to give us chapter and verse on why she believes that it does give us this. What is the legal effect of her words in her opinion? Do we have the continuous process of ensuring the Government still have a duty to find out who has a problem and to give them some assistance?
It has been pointed out before that if the chain is broken and we lose, say, two or three years, that is the destruction of a child's education. During the decade and a half that I have been in this Chamber there has been a continuous struggle to ensure that that chain is in place. We have browbeaten governments of various

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hues and various Ministers over this matter for a long time. The fact that it might be removed is a matter for genuine concern.
We must ensure that we have not wasted all that time. Can the Minister tell us what the legal process is according to the Bill as it currently stands? Can she assure us that that process will take place and that we shall have in place what we have struggled for over those years? If so, I shall be content. However, we must hear that. If further legislation—secondary or primary—is required, the Government are duty bound to legislate. If that means that we must ask the Government to accept an amendment now so that they have time to make changes, I advise my noble friends to consider that. That is an important point. It is something we must guard because it has taken a long time winning.
Lord Lucas: My Lords, I am sure that Amendment No. 3 is entirely unnecessary from a legislative point of view. I cannot see that any government will ever contemplate acting against what is in that amendment. Therefore, the Government should accept the amendment because it makes no difference to their freedom of action. However, it gives the many people involved with special educational needs the comfort of certainty. There is a great deal to be said in favour of certainty. If one knows that the Government can at a whim undermine the whole structure of special educational needs in this country, although it may not seem likely it is a constant worry. The Government know they will not do it. It would not harm them to take Amendment No. 3 on board. It would give everybody else great comfort.
3.30 p.m.
The Earl of Listowel: My Lords, during the passage of the Bill I have been particularly concerned about children in public care and their admission to schools. Such children are currently placed in schools that no one else wants, for various reasons and circumstances. I had hoped that the Bill would provide an opportunity to remedy that situation. Sadly, for technical reasons, that is not possible.
Some 26 per cent of looked-after children have statements of educational needs. If there is a serious concern that the protection for those 26 per cent may be in danger, I feel strongly that that should be avoided.
I look forward to the Minister's reply and I thank her for the great deal of time that she has spent listening to my concerns on the Bill. I very much hope that she can reassure us all. If not, I shall follow the advice of my noble friends and the noble Baroness, Lady Blatch, on the amendment.
Lord Brennan: My Lords, the critical need of parents of children with special educational needs is for clarity about what they are entitled to for the benefit of their children. It would be most unfortunate if, in that sector of needy society, a debate such as this led to division. I am sure there is no sentiment towards division, but rather a desire for agreement. I therefore invite my
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noble friend the Minister to agree with what I understand to be the principle of the Bill and to reassure us on how that principle is to be put into practice.
Under Clause 1, innovative projects will be permitted only if they may,
"contribute to the raising of educational standards"
I invite the Minister to agree that there can he no exemption from or relaxation of special needs legislation under Clause 2, on the power to suspend statutory requirements, unless the proposal would raise educational standards. In other words, such proposals must add to what is already there rather than detracting from it. That is the logical structure of Clauses 1 and 2. Innovation will better the present situation, not change it for the worse. Clause 2(5) gives additional clarity to that analysis that no exemption or relaxation will be permitted if it results in a detrimental effect on the needs of such children.
That analysis of principle seems straightforward. I cannot imagine that a statute that is designed to better things can be interpreted by invoking a power to take away good things that already exist.
How is that principle best put into practice? It is not only by my noble friend the Minister confirming what the principle is today, but also by her reassuring us that the department will issue guidance under Clause 2(6) at the earliest opportunity on how it will approach the granting of applications, having special regard to the statutory duties for children with special educational needs, which are set out in the amendment. That is necessary, because it would be most unfortunate if, with this desire for clarity, a system was introduced with no one—neither parent, nor local authority, nor child, if they are able to understand—knowing by what criteria the Secretary of State will make decisions on innovative projects that affect the special educational needs of children. I cannot see that that is too much to ask of the Government and it would confirm the requirement that I initially emphasised: the need for all those concerned with these children to have clarity.
Lord Swinfen: My Lords, I urge the Government to accept the amendment. The Minister will probably say that it is not strictly necessary, but I see it as a belt and braces amendment, although I am not a lawyer. At times of financial or other difficulty, special educational needs is the area of education that tends to come under the greatest pressure. A future government could well try to get round the amendment that the Minister introduced at an earlier stage. I urge her to accept this amendment.
Baroness Ashton of Upholland: My Lords, it is a great privilege to hear new voices raised in our debates in support of this most vulnerable group of children. I echo all that has been said about the Government's desire to ensure that we do what is best and right for these children.
I am conscious that this is a Third Reading debate, but I should like to refresh the memory of those who have not been able to participate in our debates as they

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might have wished. This power will be on the statute books for only four years. Any school or local education authority applying for the power to innovate can be granted that power for three years, with the possibility of an extension for a further three years if the circumstances are appropriate—for example, if there has not been time to assess and evaluate what has happened. Talk of future Secretaries of State is inappropriate. I am not saying that there will always be the same Secretary of State for the next four years, but this power will disappear in four years. That is important.
I intend to spend some time on this and I hope to be able to give the reassurances that noble Lords and others outside the Chamber are seeking about the effect of the amendments that the Government have already made. I had hoped that I had already made clear that the legislation as drafted already means that nothing could be done through this power that would disadvantage children with special educational needs. I am more than happy to repeat that and to spell it out in greater detail.
My officials have been in conversation with the Special Educational Consortium, which was looking for some specific reassurances. The noble Lord, Lord Addington, is looking for similar reassurances. I hope that I am now able to give those.
I hope that it is clear to all noble Lords that we are committed to the basic statutory framework that is now in place. We have recently strengthened that framework through the Special Educational Needs and Disability Act 2001. We believe that the changes we have made are good and positive. We do not want to unpick them; we wish to see them embedded.
We do not in any way begin from the position that there is something wrong with the sections referred to in Amendment No. 3, or that we expect significant proposals for change—quite the opposite. Let me be clear about the meaning of the Bill as drafted. We have made a number of amendments to the Bill, the most significant being those that now appear in Clause 1(2) and Clause 2(5). They already provide the belt and braces that the noble Lord, Lord Swinfen, seeks. Those amendments mean not only that the Secretary of State must consider the interests of every pupil affected by a project, but also that no order may be granted if there is likely to be a detrimental effect on the education of children with special educational needs.
Those tests are deliberately drawn widely. The Secretary of State must consider the likely effect of the project on all children who may be affected by it, whether present or future, at the school in question or at another school. The protection for children with special educational needs in Clause 2(5) is sufficiently strong that a project that would be beneficial to a significant number of other children but would be harmful to the interest of a single pupil with special educational needs could not be approved.
The first clear point on the effects of the law in relation to the specific sections mentioned in Amendment No. 3 is that they could not be changed if
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that change would be likely to damage the education of children with special educational needs. No change that harmed children with special educational needs would be possible. It is clear that simply abolishing the duties in any of the sections to which the amendment refers would not be lawful. It would be detrimental to children with special educational needs, for example, to have no duty to assess or to identify. Without those duties the basic provisions for children with special educational needs would not function. Therefore it must not be lawful to remove them.
As the noble Baroness, Lady Darcy de Knayth, pointed out, many of the duties in Amendment No. 3 are expressed as "when necessary". Clearly it is necessary for someone to act to secure the best interests of children with special educational needs, but it would be to the detriment of those children if they did not do so. It follows that having no duty on anyone to act when necessary must be to the detriment of children with special educational needs. Accordingly, it would not be lawful to remove any of those duties. I hope that I have made it as clear as I can that that is the meaning of the legislation as the Bill is drafted.
The Bill would permit, for example, the transfer of duties from one party to another. To take an example I have used before in your Lordships' House, if under the power to innovate the governing body of a strong school were taking on responsibility for a weak school, we would be likely to want the special educational needs duties to transfer to the strong governing body. Otherwise the residual weak governing body would be left with no powers and a duty in relation to special educational needs that it would be unable to fulfil. Meanwhile, the body with the powers would be left without the duties. That would not be in the interests of children with special educational needs and therefore I do not wish to rule it out.
It is conceivable that some adjustment to the legislation set out in the amendment could be in the interests of children with special educational needs. I have said in your Lordships' House many times that it is my strongest desire that the power to innovate should be used for these children, who may benefit from innovative approaches which cannot take place under our current legislative framework. That is why I have looked for positive approaches to innovation.
The most obvious example, as I said, would be the transfer of duties from one body to another. Similar arguments would apply to the transfer of duties between local education authorities, or from local education authorities to voluntary bodies. In looking at the issue it is not inconceivable that a school or local education authority dealing with a number of children described as low incidence highly complex special educational needs may wish to involve one of our major voluntary organisations with knowledge, insight, experience and expertise on the particular special educational needs to work with it on the assessment of these children and to ensure that they are catered for properly.

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I do not believe that any noble Lord would wish to rule out that possibility, but that is unfortunately what would happen if the amendment was passed. It would require in law that one body be exempted from the duty, as noble Lords will appreciate, in order for another body to take it on. What is not conceivable is that the duties in those sections could simply be abolished. It could not be the case that no one would have them. I can be clear, and I believe that this is the key assurance the noble Baroness is seeking, that that would not be lawful under the legislation as it stands.
I do not want to rule out the adjustments to the legislation that I have set out, which would be beneficial for children with special educational needs, in the interests of inserting a protection that, as I have described, is already there. So I do not believe that Amendments Nos. 3 and 4 are necessary in order to secure the protections that the noble Baroness rightly seeks.
But I wish to go further. In any case, if there were a proposal to transfer duties of the sort I have described, we would need to be clear not only that that was in the interests of the children, but also that the position would be absolutely clear for parents. It would not be acceptable to create a position where parents would not know where to go for help, guidance or support or would not know who to hold to account in relation to the legislation. That would not be in the interests of children with special educational needs and so that too would not be lawful.
Furthermore, any measure that left parents with no right of appeal could not be in the interests of children with special educational needs. That might be unlawful anyway for other reasons, but in any case it would not be permitted under the Bill as it stands. I can therefore be clear that the legislation as it stands satisfies the concerns raised. It also ensures that if any change were in the interests of children with special educational needs, it would be permitted. That is the goal to which I have aspired.
But in case there remains any doubt, I wish to go further still. I have already described, in moving the government amendments on Report, how we would expect applications to be dealt with and the process that we would expect to go through in order to assess proposals in relation to children with special educational needs. I have said that we will put that in guidance, to which my noble friend Lord Brennan referred. We will make clear in guidance that we would not regard as standard-raising any proposal that simply proposed to do away with those duties. We would not expect to see any such proposals in any case. But if there were any doubt about that matter, I hope that I have put it to rest by committing the Government to setting it out in guidance.
Finally, I know that the Special Education Consortium was concerned that it might be unable to police any proposals coming forward because it would not know about them in time. I know that the noble Baroness, Lady Darcy de Knayth, is concerned that proposals should not be left entirely to the Secretary of State's opinion, for all the right reasons and none of
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the wrong reasons. I will make the commitment that if the Secretary of State were to receive any application affecting the duties set out in the five sections included in the amendment, the Special Education Consortium would be informed and consulted about the proposals. That would ensure it would have an opportunity to be involved in decision making.
I believe that in what I have said I have met the concerns expressed to me both inside and outside your Lordships' House. I hope that I have made it clear that the legal position is much more secure than some might have feared. In setting out the legal position in such detail, I am conscious that I have taken your Lordships' time. But I hope that all noble Lords will recognise the importance of my having done so, the strengths of the commitments I have made, and, in particular, our involvement of the Special Education Consortium in the process as more than a belt-and-braces approach to ensuring that the needs of these children remain as paramount as they should be, but also allowing the opportunity to look for innovation in our schools and local education authorities. I hope that with those words the noble Baroness will feel able to withdraw her amendment.
3.45 p.m.
Lord Campbell of Alloway: My Lords, before the Minister sits down, is she aware of any precedent of a clause that has this power to suspend the statutory requirement other than in emergency legislation in wartime?
Baroness Ashton of Upholland: My Lords, I would not know that. As the noble Lord will know, we have debated the clauses at great length at other stages. I wish that the noble Lord had been able to put that question to me at a time when I could have written to him before another stage. I will of course commit to write to him with a definitive answer.
Baroness Darcy de Knayth: My Lords, before I thank the Minister for her reply, perhaps I may thank all noble Lords who have taken part in the debate for their fantastic support. I am overwhelmed. My noble friend Lady Warnock mentioned the important 18 per cent without the statement's protection, as did the noble Baroness, Lady Uddin, for whose informed support I am grateful. The noble Baroness, Lady Blatch, and the noble Lord, Lord Campbell of Alloway—I am delighted he is present as I remember his Private Member's Bill which resulted in the 1993 and 1996 Acts—both referred to the importance of safeguards. I am extremely grateful for the support of the noble Lord, Lord Addington. As always, he put his finger right on the question of whether what is proposed in our amendment is lawful.
I thank the noble Lord, Lord Lucas, for his unequivocal support. I thank also my noble friend Lord Listowel and the noble Lord, Lord Swinfen. I am particularly indebted to the noble Lord, Lord Brennan, for his careful analysis and informed advice, which did a great deal to set my mind at rest that anything to the detriment of children with special

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educational needs would not be lawful. I am extremely grateful to him for his suggestion that guidance would be a good idea.
I thank the Minister for her careful and long reply. That is a compliment, not a criticism. I am delighted by the clear statement with which she began; namely, that having strengthened the SEND legislation, she had every wish to keep those matters embedded and not renege on them. The amendments to Clause 1 are extremely welcome.
I am particularly grateful for the Minister's explanation that if a project adversely affects a single pupil with special educational needs, it could not be approved. However, what would happen as regards a new pupil entering the school after a project has started? Does the Minister wish to intervene?
Baroness Ashton of Upholland: My Lords, this is where I get lost in procedure as I understood that at Third Reading I could not reply to questions after I had made my main reply. As ever, I am at the mercy of noble Lords as regards procedure. However, as I said, a school would have to be able to demonstrate that a child arriving at that school would not be adversely affected by a project.
Baroness Darcy de Knayth: My Lords, I thank the Minister for that reply. It is clear that the key duties will remain and that it will not be lawful to remove any of them. A governing body or LEA that took over from a weaker LEA or governing body would still be bound by those duties.
I am most grateful to the Minister for saying that she would consult the SEC when drawing up guidance, and if someone came forward with an unusual proposal, for example. The Minister also said that parents would be informed and given a right of appeal. Our amendment consciously did not mention that. I am grateful to the Minister for making that point.
This has been a worthwhile exercise. I do not think that we have wasted the time of the House. I am glad to see that the Minister agrees. It is now clearly stated that the key duties remain. That is valuable. It is important that the Government send a clear message to service providers, especially LEAs, that they are committed to the legal framework and to the concept that children and young people should receive the special educational provision for which their needs call as a matter of legal right. Those who draft applications for innovative projects will receive the message that it is absolutely not the Secretary of State's intention to consider, let alone approve, applications which seek exemption from the key duties which LEAs have towards children with special educational needs with regard to identifying them, conducting assessments and making and maintaining statements.
I could make one or two other remarks but I think that I have spoken for long enough. Unhesitatingly, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Clause 6 [Interpretation of Chapter 2]:
Baroness Blatch Baroness Blatch moved Amendment No. 5:
Page 4, line 41, at end insert—
"() No order may be made (in relation to England) under Part 1 of this Act which includes reference to criteria prescribed under subsection (2) unless a statutory instrument containing the prescribed criteria has been laid in draft before, and approved by resolution of, each House of Parliament.
The noble Baroness said: My Lords, although we have discussed the clause to which my Amendment No. 5 refers, there remains nevertheless an important but residual issue. The Minister said on Report on 17th June:
"In Committee, I said that I would reflect further on the nature of the criteria for earned autonomy and on the number of schools that might qualify. I can now tell your Lordships' House the outcome of that reflection".—[Official Report,. 17/6/02; col. 533.]
The outcome of that reflection was welcome as we now have, instead of a predicted 10 per cent of schools qualifying for earned autonomy, the Government's own prediction; that is, 30 per cent. I have two comments to make. First, I hope that we shall get away from percentages. We are not aiming for 10, 20, 30 or any percentage. What we want are clear criteria that are well understood by schools and objective judgment in regard to those criteria. Whatever number of schools qualify, so be it.
However, it is depressing that the Government expect only 30 per cent of schools to qualify. At the same column of Hansard the noble Baroness continued:
"We have always said that we want the best led and best managed schools to qualify for earned autonomy. We now wish to align the criteria for earned autonomy with those for short inspections. That will mean that, if a school has qualified for a short inspection under the current inspection arrangement and has received a good inspection, it will be eligible for earned autonomy. However, if a school receives a good inspection of any sort, we should be prepared to consider whether it might be suitable to give it additional freedoms. It will be for the chief inspector to identify those schools, and that is why the amendments that we have tabled are needed".—[Official Report, 17/6/02; col. 533.]
Therefore, the Government have moved away from objective criteria to what the chief inspector thinks and, indeed, at the end of the day to what the Secretary of State thinks.
If there are to be criteria, as I said a moment ago they need to be clear and well understood and everyone needs to have the security and the guarantee that those criteria will pertain when any decision is taken by the Secretary of State who will—not with my support—consider every single application that comes before the department. It is possible for different judgments to be made by different Ministers at different times.
The other reason that I wish my amendment to be incorporated in the Bill is that the Government have moved—which we welcome—from a relatively small number of schools qualifying for earned autonomy to a figure of about 30 per cent. The criteria drawn up to decide how many schools qualify will be important. The House should not mistrust the Minister's comments but should endorse them. The criteria

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should not comprise just the words and the promises of the Minister but should have the endorsement of Parliament.
I have to query why it is that 70 per cent of schools are not expected to be, in the words of the Minister, "well led and managed". It cannot be that the Government themselves say that only about 30 per cent of our schools are well led and well managed. If that is the state of education at the moment, it is a good deal worse than many of us thought. That sends a negative message to schools. I believe that the relevant percentage is a good deal higher and that many more schools should qualify for earned autonomy.
I rest my case. I shall not go over the arguments that I deployed at the previous stage except to say that we welcome what has been achieved so far. We believe that the criteria will be critical in determining the number of schools that qualify. If the measure is endorsed by Parliament, it will remove the discretion that is left to the chief inspector and to the Secretary of State. I believe that it will gain the confidence of schools, teachers, parents and, of course, more significantly, children. I beg to move.
Baroness Ashton of Upholland: My Lords, I am absolutely with the noble Baroness, Lady Blatch, in wanting to get away from the concept of percentages. However, they are a useful guideline and they have helped our debates on the Bill to move forward. I refer to the response of the noble Baroness and others to our initial figure of 10 per cent. However, I make it clear that I referred to that figure as a starting point. I referred also to 30 per cent of secondary schools and 60 per cent plus of primary schools. We want to ensure that qualifying schools are well managed and well led so that all schools in the future will be able to move forward in terms of earned autonomy. It is a starting point, not an end point. It is important to have clarity with our proposals. I give an unequivocal assurance that the criteria will be clear. It is important—I am sure that the noble Baroness, Lady Blatch, agrees—for schools to know whether or not they qualify.
I turn to the amendment. I simply say to the House that the Delegated Powers and Regulatory Reform Committee looked in detail at our proposals for regulation-making powers in this regard. It was content with our proposed procedures, and I hope that, as is conventional, the House will be guided by the committee's view.
The noble Baroness suggested that the amendments made to the Bill on Report mean, in her view, that the affirmative procedure is needed. But while I certainly made it clear that our intentions in relation to what regulations would contain had changed, the changes to the scope of the regulation-making power in primary legislation were not significant. I am therefore clear—we have taken some care to examine this carefully—that there have been no changes in the primary legislation that would disturb the committee's judgment of the appropriateness of the procedure, given the extent of the powers.
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All noble Lords will know that we have been completely open throughout about our intentions for the criteria for schools qualifying for earned autonomy and their development. We made our original intentions very clear in the policy statement that was placed in the Library of your Lordships' House. We made clear our continuing intention to consult. On Report, I responded to the concerns that had been raised in Committee. I set out in some detail the Government's revised intentions in relation to the qualifying criteria under Clause 6(2).
I have given very clear commitments on the Floor of the House, which will of course be met; am sure that that is not in doubt. The powers in primary legislation were presented openly to the Delegated Powers and Regulatory Reform Committee and were not the subject of adverse comment. We have been open about our intentions through out and we remain of the view—having checked very carefully, as I said—that the procedure we propose in the Bill is the appropriate one.
Therefore, in the light of the views of the Delegated Powers and Regulatory Reform Committee in particular, I very much hope that the noble Baroness will withdraw her amendment.
4 p.m.
Baroness Blatch: My Lords, could I ask the noble Baroness two questions, in the light of what has just been said?
Lord McIntosh of Haringey: My Lords, we are at Third Reading. We have to accept that there is one speech after the Minister has spoken.
Baroness Blatch: My Lords, I have been here for some time and my understanding is that if I wanted, for clarification, to ask questions, that was in order. I shall be advised by the Clerk. If I cannot, I cannot.
Lord McIntosh of Haringey: My Lords, the noble Baroness opened her speech by asking further questions. I do not think that this is in order. If she had stood up before the Minister had sat down and had asked a question, that would have been in order. However, she is now making her wind-up speech and we must be satisfied with that.
Baroness Blatch: My Lords, I said that in the light of what the noble Baroness said, I had two questions. I shall be advised by the Clerk. If I cannot ask them, I will not ask them.
Lord McIntosh of Haringey: My Lords, paragraph 6.122 of the Companion states:
"Only the mover of an amendment or the Lord in charge of the bill"—
that is, the noble Baroness, Lady Blatch—
"speaks after the minister on report except for short questions of elucidation to the minister or where the minister speaks early to assist the House in debate".

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My understanding was that short questions could be asked by anybody but that they should be asked before the Minister sits down. However, I am sure that my noble friend Lady Ashton will answer two short questions for elucidation on this occasion.
Baroness Blatch: My Lords, I have no intention of asking the questions if that is outside the Standing Orders. I ask for the advice of the Clerk about whether I am allowed to ask questions in light of what the noble Baroness said on my amendments.
Lord McIntosh of Haringey: My Lords, the advice comes from the Clerk through me. I have read out the rules. I am sure that my noble friend the Minister will answer two short questions for elucidation.
Lord Carlisle of Bucklow: My Lords, does the Minister agree that what he said indicated that my noble friend Lady Blatch would be in order if she asked questions to clarify what the Minister had said?
Lord McIntosh of Haringey: My Lords, I have just said that. I have just said that it would have been better if the questions had been asked before the Minister had sat down but that, in these circumstances, if there is any misunderstanding or possibility of misunderstanding, I am sure that the Minister will answer two short questions for elucidation.
Baroness Blatch: My Lords, I was looking for the statement that my questions were in order. My questions were not relevant questions before the Minister had responded to the amendment; they arose from what she said. My understanding is that I am in order. If I am in order, I shall ask my questions.
The noble Baroness said that the procedure that would be put in place would suffice. My question on procedure is: what will the procedure be, and what will the authority be, for the criteria? My other question relates to the figures of 30 per cent for secondary schools and 60 per cent for primary schools. Are there to be percentages? The Minister said in her response that we were getting away from percentages.
Baroness Ashton of Upholland: My Lords, I shall take the second question first. I was trying to convey a shared desire with the noble Baroness that we did not have percentages. I believe that she made that point in Committee with great force and I listened to her with great care. She said that we would somehow be saying that once one hits the barrier of 10 per cent in that context, if one happens to be the school to which the 11 per cent figure applies, one would not be able to receive earned autonomy. That is where the noble Baroness's original problem lay in this regard. I agree with her in saying that this is not about percentages. On Report, when I referred to the figures of 30 per cent and 60 per cent plus, I sought to indicate how far we have moved in our thinking and that those were the right kinds of numbers. I am not saying that when we
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hit 30 per cent, that is the cut-off point. We are saying that when looking at the criteria that we have put together, which we have said are appropriate, we believe that there will be about 30 per cent of secondary schools and 60 per cent of primary schools which will, within that fifth wave, have that applied to them. The figure may be 32, 29 or 64 per cent; we were seeking to demonstrate how far we had moved and to address the specific point that the noble Baroness raised in Committee. I hope that that is clear.
The position on the procedure is that that is done through negative resolution.
Baroness Blatch: My Lords, I am grateful for the clear answer about the use of negative resolution. I do not see that as satisfactory for the House because it will not have a proper opportunity to consider the detail of the criteria.
Secondly, I hope that I can be forgiven for the confusion about percentages. The noble Baroness's own words were:
"Under the criteria that we propose, we expect that 30 per cent of secondary schools and 60 per cent of primary schools will qualify".—[Official Report, 17/6/02; col. 533.]
In her answer to me, she said that we wanted to get away from percentages. I was trying to ascertain from the Minister whether that was a new move, that percentages will not feature as the target and that the schools that qualify will qualify under the criteria. That is why we would like to see the criteria. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 [Powers of governing bodies to form or invest in companies to provide services etc.]:
Lord McIntosh of Haringeymoved Amendment No. 6:
Page 8, line 8, leave out from second "company" to end of line 9 and insert "registered under the Companies Act 1985 (c. 6) as a company limited by shares or a company limited by guarantee"
The noble Lord said: My Lords, we had full discussions on what are now Clauses 11, 12 and 13 in Committee and at Report. As a result of that useful debate, we have, as we promised, brought forward amendments which, I hope, deal with some of the concerns that were expressed.
Amendment No. 6 places on the face of the Bill a requirement that we originally intended to include in regulations; namely, that school companies will be required to register under the Companies Act as companies limited either by shares or by guarantee. We believe, on reflection, that that requirement is better stated on the face of the Bill to provide greater clarity. That responds to concerns that several noble Lords expressed, notably the noble Baroness, Lady Sharp. We believe that different types of company activity may be better suited to different company structures. For example, we would envisage purchasing companies being limited by guarantee, with service delivery companies more likely to be limited by shares. With service delivery companies, outside partners—I refer to the restricted definition in the Bill—might be brought in. However, we do not

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want to impose that on companies, so we have decided to give companies the freedom to decide which company structure to adopt, while ensuring that they must have limited liability status.
It is important to mention that both shares and guarantee offer limited liability status, giving companies financial protection. The size of the guarantee or the value of the shares issued will be for companies to decide, but in both cases the amount could be as little as £10. The financial liability that a governing body would have for the debt would be limited to that amount.
I reiterate the assurance I gave on Report that being limited by shares cannot invite hostile takeover; shares will be sold only if the members of a company agree. The companies will remain private companies and shares will not be publicly available. Amendments Nos. 8 and 9 are purely technical. They tighten up the requirements for companies to operate only in accordance with the requirements set out in regulations.
Amendment No. 10 places on the face of the Bill the requirement that only those specified in regulations may join companies. That was to be contained in regulations, but again we are placing that safeguard "upfront" to give a more visible degree of protection to companies and reassurance to those who were concerned. I am sure we all agree that the list of those allowed to join companies must remain in regulations. The list may need to be updated from time to time based on feedback from schools using these powers. Such amendment would have to be done by amending regulations rather than by primary legislation. I beg to move.
Baroness Blatch: My Lords, I have read and re-read the amendments and find it difficult to distinguish between "has ceased to satisfy" and "fails to satisfy", and between "any applicable requirements of regulations under subsection (3)" and "the requirements set out in subsection (3)". The notion that this is tightening up fails to convince me. I do not understand the amendments. However, I shall not oppose them. If the Minister says that this is tightening up—he clearly has had a good briefing to that effect—I have to accept that.
I have two questions. First, paragraph 8, which has been amended by the Minister, refers to "voluntary school". I assume—I do not know—that "voluntary school" subsumes "voluntary aided" and "voluntary controlled" in the interpretation of what is a main school. Secondly, I am not sure whether Amendment No. 10 was tabled because of my reference at a previous stage to undesirable characters who will see schools as an easy target to become involved in commercial activities. I gave the example of someone who was, indeed, undesirable. Had the school been unwise enough to engage in any kind of commercial activity with that person, it would have ended in tears.
I find it difficult to begin to understand how one describes the kind of person to whom we refer. By nature, confidence tricksters are manipulative,
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convincing and easy to be taken in by. How can a set of regulations specify such undesirable or unsuitable people for the purposes of becoming a member of a company? Perhaps in his reply the Minister can give examples of how the kind of person referred to in Amendment No. 10 will be described.
Baroness Sharp of Guildford: My Lords, I intervene briefly to thank the Minister. Amendment No. 6 answers queries I raised on Report concerning the identity of companies and in particular whether they would be limited by shares or guarantee. I am grateful to the Minister for tabling the amendment.
4.15 p.m.
Lord McIntosh of Haringey: My Lords, the noble Baroness, Lady Blatch, raised two points. First, she asked whether "voluntary" covers both "voluntary maintained" and "voluntary aided"; it does. Secondly, she raised the question of how to keep out undesirable characters. The noble Baroness gave examples of that at an earlier stage. There are two lines or protection here. First, there is the good sense of the schools concerned. We are talking about people from more than one school, so such a person could not be the friend of one of the governors or a friend of the head teacher of one of the schools unless the other schools involved in the company were convinced of the integrity of that friend. I do not know whether the noble Baroness reads the High Principals column in Private Eye. Some of the things which have occurred in our further education colleges would lend support to what she says.
However, we have the protection that more than one school will be involved and there will be an independent eye cast over any invitation to join. It is for the reason put forward by the noble Baroness that we are leaving the definition of "acceptable members of a company" to regulations. Clearly, that will improve with experience. We can state in regulations that the person who becomes a member of a company shall have educational objectives; or that such a person has something to contribute to the company educationally which cannot otherwise be found We can say all sorts of things of that kind but there will always be crooks.
Regulations will not be able to identify individuals who should be excluded. In the end, it is for us to indicate the type of person who might be included to the benefit of the operations of the company. It will be for the members of the company, the schools, to exercise their judgment. with the help of the local education authority as initial approver and supervisory authority, to ensure that undesirables do not come into the companies. That should accord with the experience of the noble Baroness, which she described on Report, of a company being formed by an individual school.
On Question, amendment agreed to.
Baroness Blatchmoved Amendment No. 7:
Leave out Clause 11.

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The noble Baroness said: My Lords, in moving Amendment No. 7, I shall speak also to Amendments Nos. 11 and 12. The Minister will be aware that I have serious reservations about schools becoming companies. I do not refer to schools being given the freedom to be more commercial but to the way in which the Government have set about this and the way that the provisions for such commercial activity are set out in the Bill and supporting policy papers.
In his helpful and detailed letter to me, the noble Lord offered a number of explanations. However, perhaps I may refer to a comment made by him in responding to the previous amendment. He referred to some of the incredible things which have occurred in further education colleges. I have to add that the Government took a long time to shine a light on such matters. In many cases, action was taken late in the day. The Government's own record is less than perfect when we consider their dealings with Capita. That company made a mess of Individual Learning Accounts and is still being investigated, yet has been given more work by the Government. It is even involved in the work of the Criminal Records Bureau, dealing with highly sensitive information and large sums of money. The Government's own record in that respect is not good.
In response to Amendment No. 10, which is relevant, the noble Lord said—not happily but glibly—that there will always be crooks. We know that there will always be crooks. However, we should be in the business of protecting our governors of schools. They are there not to be company chairmen, company members, or board members, but to ensure that good education takes place in schools and that schools are managed well in the interests of the education of the children within them.
When it comes to deciding who is a desirable or an undesirable person—or, indeed, a suitable or an unsuitable person—to become involved with the running of a company, the noble Lord said that help would always be available from the LEA, which is the supervisory body. However, we have been told that the latter will be very "light touch". It will be possible to carry out such duties under the law relating to these clauses—and, indeed, company law—only if the supervisory body actually knows what is going on. You cannot know what is going on without having a good deal of day-to-day information. The notion that this will not be extra-burdensome to LEAs simply is not true.
Moreover, should any of these companies go belly up, the LEA will have to pick up the tab. Thus LEAs would be well advised not to be too light a touch when complying with their duties and putting matters right. However, they should not do so when something goes wrong, as set out in the noble Lord's letter: well before something goes wrong, they should ensure that such matters are being properly managed. The letter says that the LEA,
"will only step in when it is clear that the company is running into trouble".
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That is too late, especially when there have been visible signs that the company was running into trouble.
I shall leave the question of Clause 13 to one side for the moment. I believe that the costs of establishing all the measures outlined in Clauses 11 and 12 will outweigh the benefits that the noble Lord has claimed will be there for the purposes of "acting jointly", "purchasing jointly", and so on. We have argued on a number of occasions that joint purchasing is a longstanding practice of both LEAs and of schools. The notion that contractors cannot deal with a single body that represents a number of schools is simply not true. For example, one school says, "We'll put the order in", while the other schools will decide between them what they require. The order will be delivered, and the payments made to the company. If it were a problem, contractors would not be touting for business around the schools and saying, "If you order in reasonable quantities, we can give you discounted prices". It is an age-old practice, which still continues; and, indeed, it will continue to do so. I believe that the problems outlined by the noble Lord are exaggerated.
On the question of company members, the noble Lord agreed with the points that we raised regarding protection for schools as regards allowing undesirable people to become involved. We now know that there is an amendment to that effect which goes some way to protecting company members. However, describing "unsuitable people" ahead of them turning out to be so, is something that I regard as being a real challenge. The noble Lord says in his letter that the Government will consult upon those who will be allowed to join companies. But who will be consulted? Further, in what way will it be possible to do so?
In his letter, the noble Lord refers to the exercise of LEA functions,
"to make arrangements for the provision of services for schools for other persons".
Can the noble Lord explain what is meant by the words,
"for schools for other persons"?
I believe that they can provide services for other schools and for other persons. If there are to be "other persons", can the Minister say who are these third bodies who are not other schools? For example, would schools provide catering for the local playgroup, or would they provide cleaning services for a local private company down the road? What is the definition of "other persons", if they are not to be other educational establishments?
The noble Lord continued in his letter to cover the distribution of profit. I have to tell the noble Lord that not only Members of this House but also his colleagues in another place will be most interested in his response on the distribution of profit:
"Our regulations will prescribe that school companies may pay company profit back to the members, or retain it to invest in developing the capacity of the company. We do not propose that profit must be spent solely in the interests of education".
If it is not to be spent solely in the interests of education, are we to assume that governors can indulge in forming a company and making profits and

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that those profits are not expected—indeed, not just expected but required under this Bill—to be spent in the interests of education?
I know that the noble Lord will say that there will be third party members of these companies—joint members of the companies—who will not be educationists: they will be purely third-party commercial interests. Therefore, do we expect that there will he a constraint on those who are members of governing bodies in an expectation that their profits will go back into schools? I do not refer to a "requirement", because the Bill does not specify that; there is no requirement in the legislation to spend this money on education. However, do we expect that to happen, while the profit made by the wholly-independent commercial member of the company can be used for rewarding shareholders, or spent on whatever the chairman chooses?
There are a number of questions to be answered. I have in mind private companies making a profit in a safe haven. Some commercial people will regard a school as a safe haven within which to do business, in the full knowledge that if the company fails the LEA will pick up the tab. Alternatively, if the company succeeds, it will go away with a pocket full of money.
I turn to Clause 13·I shall not press my opposition to Clause 13·I want to take in good faith the fact that a great deal of work has been carried out by the Church and by the Government. I have enormous reservations about whether or not this will work. However, I should like to give this the benefit of the doubt because I believe that the work that has been carried out at national level between the Government and the joint venture members of the company to date is such that I should not wish to stand in its way. Nevertheless, I have some very real reservations that I should like to put on the record because there may well be difficulties in the future.
The right reverend Prelate, who has also very kindly written to me, as promised, with a very detailed letter, referred to the PFI not working. I have to point out that PFI projects have been as small as building small fire stations and setting up small Probation Service projects. Therefore, the notion that such initiatives do not work at a local level and on small projects is simply not true; indeed, such initiatives have worked and, in some cases, they have worked very well. There have also been examples of more than one project being dealt with at any given time so that, taken together, they have formed a much bigger project.
The noble Lord prayed in aid of his case the fact that for the year 2003–04 the department allocated £940 million PFI credit to 21 projects. However, only £10 to £20 million went to voluntary aided schools. If I were in the place of the right reverend Prelate, I should want to challenge those figures. As the right reverend Prelate knows, 10 per cent of the schools are voluntary aided schools. Therefore, in my book, 10 per cent of £940 million is £94 million, which is a good deal more than the £10 to £20 million that has been allocated. I am not sure that I can accept the idea that, because it is an unfair allocation, we have an argument for going down this road.
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In his letter, the right reverend Prelate says:
"All three bodies"—
that is, the three bodies that are part of the joint venture company—
"will provide the funding".
I thought that this was being introduced because the Church, the LEA and the Government did not have the funding. If the funding is to be provided under the new arrangements, what is wrong with such funding being provided now? The letter continues:
"The JVCo [the joint venture company] will engage the necessary legal and technical advisers to carry out the procurement on behalf of the schools and dioceses and, with their inputs, appoint a Private Sector Partner (or Partners) who will provide the design, building, [and] finance".
So we have finance being provided by the private sector partners, and we have funding being provided by the Government, the Church and any other party to the joint venture company; but at what cost? Where will that money come from? What pot of money 'will it come from?
The letter continues:
"Furthermore as new tranches are ready to come on-line, there are potentially no bidding costs for the Private Sector Partner".
Am I to take it that competitive tendering has gone out of the window for these purposes? Some preferred bidder—some lucky chap out there who is running a company—is about to get the business for something like £40 million worth of work, which, we have been told, is the likely first tranche of spending. We are told that future contracts will simply keep going for that one contractor. Is there to be no process of competitive tendering for the business? For example, will other companies that provide such services he allowed to bid? If there are to be no bidding costs, I assume that there will be no bidding. The right reverend Prelate goes on to say that that would be a great saving to the public sector.
The next point concerns profits. It is not intended at this stage that the schools would be members of the joint venture company. If I was successful in removing Clauses 11 and 12, that would be the case; the joint venture company, at least in the initial stages, would he at one at national level with the Churches involved. As I say, I intend to leave that in the Bill.
The letter goes on to say that schools would be party to the procurement and would also gain a small share of the profits. Am I to understand that money will come from government, Church and other partners; schools will be repaired, refurbished and even newly built; that the company will make a profit (out of what, I ask); and when it makes a profit there is nothing in the Bill to say what will happen to those profits? Will the Church take them? Will the Government take them? Will the commercial partner take them? I thought the profits would go to the company doing the refurbishment work and building the schools.
My final point is on the final paragraph:
"The details of the joint venture companies are still in development, but it is thought likely that individual schools will pay the Private Sector Partner directly over the years of the

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contract with the benefit of DfES grant over the period and the proper level of local education authority contribution (for their liabilities), the governing body being responsible for the 10%".
So it is not a free option. The LEA will have to pay; the Government are going to have to pay; the Church will have to pay. But they all pay now for projects. So what is the beneficial factor in this option? I do not know.
As I said, despite my reservations which are now on the record, I want to give the right reverend Prelate and his colleagues who are making this case the benefit of the doubt and therefore I shall not oppose Clause 13. However, I intend to oppose Clauses 11 and 12. I beg to move.
4.30 p.m.
Lord Carter: My Lords, the Companion clearly states:
"The principal purposes of amendments on Third Reading are: to clarify any remaining uncertainties; to improve the drafting; and to enable the government to fulfil undertakings given at earlier stages of the bill".
Can the noble Baroness explain how amendments which remove a whole chapter from the Bill—in effect, wrecking amendments—fit the guidance in the Companion? I am sure that the noble Baroness will say that since she tabled the amendments and they were not rejected by the Public Bill Office they must be in order. But if the Opposition Front Bench and the Liberal Democrat Front Bench combine to table amendments which are completely outwith the guidance in the Companion, how are we supposed to take any notice at all of the Companion?
Baroness Blatch: My Lords, if I am out of order I will be advised and I will remove them.
Lord Carter: My Lords, the noble Baroness is not out of order because she has been allowed to table the amendments. I am asking how she feels her amendments, which remove a whole chapter from the Bill, fit the guidance in the Companion.
Baroness Blatch: My Lords, if I am in order, then I am in order. I have spoken to my amendments. I beg to move.
Lord Peston: My Lords, that is simply not acceptable. I have been sitting here, as has my noble friend Lord Carter, wondering why we bother to have the Companion. This does not apply only to these amendments; it applies also to others. For the years when I sat on the Benches opposite, I and my noble friends stuck religiously—if I may use that word standing just behind the right reverend Prelate—to the spirit of the Companion.
I am with my noble friend Lord Carter. I should like an explanation because we are not even discussing misbehaviour on the part of Back-Benchers; we are discussing what the Opposition Front Benchers are doing. This may be a new departure but the notion that one is in order is not the same as meeting the courtesies—a large part of them are courtesies—of the
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Companion. My noble friend Lord Carter is entitled to a reasoned reply to the question he put perfectly reasonably.
Baroness Blatch: My Lords, I shall be repetitive. I took advice. I believe I am in order. If I am out of order, I will be advised and will respect the advice I am given.
Secondly, I have been entirely consistent throughout this Bill, from the first day, with my concerns about these clauses. We go through a Bill at each of the stages, both reflecting on what we have said and Ministers reflecting on what they have said. We had an interesting process of letters. As I say, if I am out of order I shall withdraw my amendment; if I am within order, I beg to move.
Baroness Sharp of Guildford: My Lords, my name and that of my noble friend Lady Walmsley is attached to this amendment. We have had no indication from the Clerks that it is out of order and we must therefore proceed as planned.
We have had much discussion in Committee and on Report on these clauses. My name is attached to Amendments Nos. 7 and 11, which apply to Clauses 11 and 12 but not to Clause 13. We learn, as a result of our extensive discussions, that in fact the powers to form companies, as Chapter 3 says, are limited powers; it only applies to two or more schools who wish jointly to form a company to do things together. The governing bodies of schools, already as bodies corporate, have the power to form a company for an individual school. The problem is that they cannot form companies with two or more schools to undertake joint purchasing or the provision of joint services. That is what the two clauses involve.
So this is a misleading title, both to the chapter as a whole and to Clause 11, which says,
"Powers of governing bodies to form or invest in companies".
The power is to form and invest in joint companies.
We from these Benches have also opposed these clauses from the start. Although I have learnt more about what the companies are supposed to be about and why the Government wish to set them up, we have not changed our view that on the whole we do not wish to see these two clauses in the Bill.
Why is that so? There are four main reasons. The first is that we feel it sends out the wrong message. On the whole, from these Benches, we do not feel that the heads of schools, teachers and governors should be getting involved in companies on behalf of schools. Schools are not companies; they are community institutions. Given all the other pressures on their time, teachers, governors and head teachers should be concerned with running their schools and not running companies. So we feel that the clause sends out the wrong message.
Secondly, we are worried about the implications of these clauses for the local education authorities. We have received all kinds of assurances from the Minister about the role of local education authorities. Yes, it is

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a light touch supervisory role. But they end up having to bail out or pick up the tab if anything should go very wrong.
I worry also whether local education authorities have the competence to act as supervisory authorities for setting up companies. By and large local education authorities do not employ accountants and lawyers who have a lot of knowledge about setting up companies. Again, they are hard pressed to do the job they have to do in terms of running the schools in their local area; they do not want to have to spend time looking at the details of companies that schools are setting up and making sure that they are not doing the things they should not be doing.
So again we feel that this is not something we want our local education authorities to spend time doing. Nor do we feel it is right that money taken from local taxpayers to help pay the costs of schools should be put at risk perhaps by nefarious doings on the part of some governing bodies.
The third argument relates to the degree with which we feel there is justification for setting up the companies. Can the Government really justify a case for setting up the companies? Their answer is that they want schools to purchase jointly. As the noble Baroness. Lady Blatch, pointed out, many schools have come together to purchase jointly for many years. LEAs were set up in part to reap the economies of scale of joint purchasing and we believe that that can still be achieved. As regards the provision of joint services, we spoke a great deal about the possibility of the development of software; that is, having two teachers from different schools developing software and perhaps deciding to form a company. We argued that they may not want to set up a company for themselves because they may want the profits to go back into the schools, but the company could be limited by guarantee. The answers to those arguments do not hold true.
The Minister also said in Committee:
"As regards the examples given of schools combining to purchase jointly without this power [to form joint companies], that is perhaps a possibility".—[Official Report, 17/6/02; col. 559.]
But what about those from whom they are purchasing? Surely they will want to have someone against whom there is some comeback. We have already observed that the local education authorities have to pick up the tab if things go wrong. I repeat that schools have been purchasing, and purchasing jointly, for many a long year. Quite frankly, there is no need to have such comeback; there is no need to form a company. As regards all these issues, the argument does not ring true; there is no real justification for the provision.
Finally, we have doubts about precisely why the Government want to set up these companies. Is there perhaps some subtext? One aspect is the new contracting-out order procedure which we approved in March this year; it is the assumption that LEAs will be able to persuade schools to form companies to take on and deliver the services which LEAs no longer feel competent to provide. We have discussed at length purchasing and providing, but I ask your Lordships to
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look at Clause 11(1) regarding the power to form companies. Paragraph (a) of that subsection relates to companies being formed:
"to provide services or facilities for any schools".
Paragraph (b) reads:
"to exercise relevant local education authority functions".
Paragraph (c) reads:
"to make, or facilitate the making of, arrangements under which facilities or services are provided for any schools by other persons".
What are the local authority functions? We are most perplexed. Is there an unwritten text? Are the Government looking for a route to semi-privatisation? We on these Benches would oppose that. We do not want to see the privatisation of education. We do not understand that subsection and believe that it may contain a subtext. We had doubts as to what it was all about.
I return to our fundamental objections. Schools, teachers and governors should be concentrating on running schools, not running companies. The proposition is misguided and we believe that it should be removed from the face of the Bill.
The Lord Bishop of Blackburn: My Lords, I must intervene to express my gratitude to the noble Baroness, Lady Blatch, for saying that she will not press Amendment No. 12. However, I could wish that she had replied to my letter, which other noble Lords have not seen. It might have been helpful for them to have seen it before we had a debate about its contents. As the noble Baroness well knows, I do not have backup in the House and these are highly technical questions in relation to companies which I cannot answer. However, I am grateful to her for putting forward some of the concerns, but I have to admit to the House that I am not in a position to answer the specific points the noble Baroness made. Sometimes fact is more strange than fiction and to have the Conservative Opposition's lead speaker on the Bill opposing the establishment of companies and a diocesan Bishop speaking up for them is an extraordinary set of events.
I listened carefully to other parts of the debate and I do not want particularly to become involved in them. However, I heard what was said about LEAs by the noble Baroness, Lady Sharp, and I have concerns about that. I am not worried about the public/private partnership. I believe that that might be a way forward for some schools. However, are we not dealing with secondary education in the Bill? The White Paper was about secondary education.
I am a little troubled that we are preventing responsible governors of secondary schools from taking actions, using illustrations from higher and further education. It seems that the governors of other institutions within the public sector—and certainly the governors of independent schools—are able to do that. I may be wrong about that, but, having noted the cautions, I would want to be supportive of the enabling power. I have greater trust in the governing bodies I come across.

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There are bound to be failures—there are failures in almost any walk of life—and risks have to be taken. However, I thank the noble Baroness, Lady Blatch, for saying that she will not press her amendment. If she did so, that would cause great difficulties for us. My advice is that the provision is a way forward to help smaller schools with projects and I trust the advice I have been given.
4.45 p.m.
Lord McIntosh of Haringey: My Lords, without raising questions of procedure or of what is or is not in order—it is not my job from this Dispatch Box—I am a little surprised by the way in which the amendments come before us. In the nearly 20 years I have been in this House I have been used to the difference between Committee, Report and Third Reading. Generally speaking, in Committee we explore the areas of potential difficulty with the Bill. Each clause must positively stand part of the Bill and the debate on clause stand part is used to explore the Government's justification for any aspect of a clause. It is often difficult for Ministers to respond to that, but they must do so—it is the nature of the job.
In Opposition, one tries to refine one's objections and to pick out the points which remain objectionable after they have been explained. At Third Reading, if difficulties arise out of that debate, one tries to deal with those particular points. However, we find ourselves debating amendments, which have been accepted by the Public Bill Office, removing the whole of the clause. That is what I must respond to.
I do not believe that the noble Baroness, Lady Blatch, has and would argue that Ministers have not responded to her in great detail on the points she has raised both in speeches in the House and in detailed letters. I believe that we have addressed—I would say answered—all the points she has made so far. The question must be turned around. The noble Baroness, Lady Sharp, objects to the proposal because she believes that it is unnecessary and will not take place. I shall later deal with her point that this is perhaps some subtle plot to introduce semi-privatisation and to persuade schools to have that. I shall put that on one side for the moment.
Surely, in considering these amendments, our starting point must be the proposals which are purely voluntary. We must ask: on what basis is it the wish of anyone in Opposition parties to deny those schools—it may be a few—which have expressed a need for such facilities and which want to use them the right to take advantage of them? That must be the starting point, not the other way around.
Some schools are already forming companies on their own. The noble Baroness, Lady Blatch, gave examples. They have not found it too big a burden, so why should we prevent schools from joining together and thereby reducing the burden of forming companies? We have not plucked this policy out of the air—it is not blue-skies thinking in the Department for Education and Skills. It is a response to those who
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have come to us and indicated that they want to work together in new ways. They are confident, creative schools which want to work together in new ways to raise standards in their own schools and in others.
I repeat what I have said at each stage: the decision is entirely voluntary. I say to the noble Baroness, Lady Sharp, that they will not be forced or persuaded to form companies. They will do so only if it is for their benefit and only if, in their view—it is their view that matters—they will not be interfering with what I agree with the noble Baroness, Lady Sharp, is their main task: providing education for the pupils in their schools. Those companies are not an end in themselves; they are simply the best mechanism available to facilitate joint activity.
There are limits. A few minutes ago, I said, perhaps too broadly, that those companies are designed only for more than one school acting together. That is not quite accurate. They could be formed by a single school that wanted to provide services for other schools as well. That is presently not possible and will be made possible by this chapter. But the main users, I suspect, will be schools joining together, first, to reduce their administrative and purchasing burden. The noble Baroness, Lady Blatch, misunderstood that when she queried the phrase, "other persons". She thought that that referred to providing services for other persons. It does not. It refers to providing services for schools and only for schools by other persons. If she reads the Bill, she will see that that is right.
The second reason for using such companies is that schools may want to join together to deliver services to other schools in which they have real strength. That could result in benefits to company members and to other schools, which could receive good quality support. Let me give an example. Schools may have an educational idea but lack the distance learning or publishing skills appropriate to enable it to be made more generally available. They may therefore need to bring in outside organizations—perhaps a not-for-profit organisation, an educational institution in the field of further or higher education or a commercial publisher or distance learning skill provider. They may bring in such people as members of the company on the basis that they will take a share of the profits. And why not?
I cannot reconcile the opposition to that idea with what I understand to be the ethos of the Conservative Party. It simply does not make sense to me. If I can understand the ethos of the Liberal Democrats, their opposition does not make sense to me either. There could be real benefit to the quality of services offered to other schools through such companies by joining together private and voluntary partners with schools.
Let me make it clear that when talking about profits there is no question of governing bodies taking their share of the profits to use for anything other than the educational needs of their schools. There is no possibility of siphoning off profits, as has been suggested.
I turn to the issue of local education authorities. Again, there is an element of suspicion that is not justified by what the Bill provides. If and when such

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companies are set up, they will operate in a positive, productive partnership with their local education authority. They will have to, because local education authorities will give the go-ahead for their formation and will act as the supervisory authority thereafter. School companies will operate within a protective regime, correcting the balance between giving companies freedom to govern themselves—of course, there are some dangers, although the noble Baroness, Lady Blatch, overstated the case—to innovate and to use the fruits of that innovation for the benefit of education more generally. Much of that provision will be contained in regulations under Clause 12 and we shall listen carefully to the views expressed on that.
I am glad to hear that opposition to Clause 13 will not be pressed because the speech of the noble Baroness, Lady Blatch, contained a number of new misunderstandings. First, I can assure her that there are no changes to the tendering rules. There will be savings in bidders' costs, but they will be entirely passed on to the schools for the benefit of education and will not go outside. The amendment to leave out Clause 13 may not be pressed, but Clauses 11, 12 and 13 form a package. They enable individual schools to join in joint-venture companies to benefit from the good quality advice and support that they will acquire for use in private finance initiative schemes, if such schemes are appropriate as, for example, in the case of the proposed Church of England company.
The opposition to the clause is paradoxical. If it had been advanced by those who are opposed to entrepreneurial activity, innovation and the dissemination of good practice and new ideas, I should have understood it and handled it. But to have such opposition advanced at this stage by the party of capitalism and by the party of liberalism strikes me as strange. I hope that the amendments will not be pressed.
Baroness Blatch: My Lords, I am sorry that the noble Lord is in a state of confusion over the matter. Let me make it clear: I am for innovation and the clauses on earned autonomy. In fact, we have tabled amendments to allow more schools rather than fewer to enjoy that. I am in favour of good practice, but therein lies the rub. The provision is not good practice; it is not thought through; and we have not received good answers about culpability, liability and protection of governors. How on earth will the extra time, money and effort be spent without any impact on the primary duty of a governing body, which is to manage its school?
I can only go by the words on the page. The letter that I cited from the noble Lord states "no bidding costs", not "lower bidding costs". So I was left with the impression that either someone else would pay them or that there would be no bidding. On profit, let me read from the noble Lord's letter, rather than refer to the words that he just used. The letter states:
"Our regulations will prescribe that school companies may pay company profit back to the members, or retain it to invest in developing the capacity of the company. We do not propose that profit must be spent solely in the interests of education".
I rest my case on that point.
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When the noble Lord described third parties, what he said was not consistent with the Bill. Third parties have been described variously as third parties with an interest in educational matters and third parties that are purely commercial but which would join schools to form companies to make profits, some of which may find their way back into schools. But today every example of a third party to which the noble Lord referred had a specific link with education: further education authorities; educational publishers; and the like. While not excluding them, does that mean that any third party must be one with a link with education?
Difficulties remain. A bit of a campaign is going on today about procedure, but my concerns about the clauses remain. We have passed each stage of the Bill hoping that many of our points would be taken on board; but they have not. Here we are at the final stage of the Bill and I believe that I am procedurally within my right to refer to those concerns at this stage and, if I wish, to press the amendments to a vote.
We live at a time when there is a shortage of teachers and, in particular, a shortage of teachers teaching the subjects for which they are trained. The Government hold unprecedented sums of money centrally, denying schools the full benefit of core funding. Innumerable new burdens have been imposed on governors, Many of our schools, as yet unspecified, are the sort of school that the Secretary of State would not touch with a bargepole.
The Bill creates further pressure on schools to form companies. Having three layers of management—the schools themselves and the companies, the local education authorities and the Secretary of State—is a recipe for chaos. We are not preventing schools from joining together to save money. We are not preventing them from behaving commercially. They already do so successfully, and we hope that they will continue to do so. The right reverend Prelate asked why, if independent schools could do it, individual schools could not. Individual schools can.
This is not a secondary education Bill: would that it were. The Government talk about changes to secondary education, but there is hardly anything in the Bill that spells out the detail of reform to secondary education. I believe that colleagues on the Liberal Democrat Benches join me in this view only: we should protect our schools and the education of our children.
5.1 p.m.
On Question, Whether the said amendment (No. 7) shall be agreed to?
Their Lordships divided: Contents, 183; Not-Contents, 141.

Division No. 1

CONTENTS

Aberdare, L.

Astor, V.

Addington, L.

Astor of Hever, L

Alderdioe, L.

Attlee, E.

Anelay of St Johns, B.

Avebury, L.

Arran, E.

Bagri, L.

255

Barker, B.

Lester of Herne Hill, L.

Bell, L.

Linklater of Butterstone, B.

Blaker, L.

Livsey of Talgarth, L.

Blatch, B.

Lucas, L.

Boardman, L.

Luke, L.

Bowness, L.

Lyell, L.

Brabazon of Tara, L.

McColl of Dulwich, L.

Bradshaw, L.

MacGregor of Pulham Market, L.

Brigstocke, B.

Brougham and Vaux, L.

Mackie of Benshie, L.

Burnham, L.

MacLaurin of Knebworth, L.

Buscombe, B.

Maclennan of Rogart, L.

Byford, B.

McNally, L.

Caithness, E.

Maddock, B.

Campbell of Alloway, L.

Mancroft, L.

Carlisle of Bucklow, L.

Mar and Kellie, E.

Carnegy of Lour, B.

Marlesford, L.

Carrington, L.

Methuen, L.

Chadlington, L.

Michie of Gallanach, B.

Clark of Kempston, L.

Miller of Chilthorne Domer, B.

Clement-Jones, L.

Miller of Hendon, B.

Coe, L.

Monro of Langholm, L.

Colwyn, L.

Montagu of Beaulieu, L.

Cope of Berkeley, L.

Montrose, D.

Crickhowell, L.

Moynihan, L.

Cumberlege, B.

Murton of Lindisfarne, L.

Dean of Harptree, L.

Newby, L.

Denham, L.

Newton of Braintree, L.

Dholakia, L.

Noakes, B.

Dixon-Smith, L.

Northbrook, L.

Eden of Winton, L.

Northover, B.

Elles, B.

Norton of Louth, L.

Elliott of Morpeth, L.

O'Cathain, B.

Elton, L.

Oakeshott of Seagrove Bay, L.

Ezra, L.

Onslow, E.

Fearn, L.

Oppenheim-Barnes, B.

Feldman, L.

Park of Monmouth, B.

Ferrers, E.

Parkinson, L.

Flather, B.

Patten, L.

Fookes, B.

Peel, E.

Forsyth of Drumlean, L.

Perry of Southwark, B.

Gardner of Parkes, B.

Perry of Walton, L.

Garel-Jones, L.

Peyton of Yeovil, L.

Geraint, L.

Phillips of Sudbury, L.

Glentoran, L.

Platt of Writtle, B.

Goodhart, L.

Powell of Bayswater, L.

Goschen, V.

Razzall, L.

Gray of Contin, L.

Reay, L.

Greaves, L.

Redesdale, L.

Hambro, L.

Rees, L.

Hamwee, B.

Rennard, L.

Hanham, B.

Renton, L.

Harris of Richmond, B.

Roberts of Conwy, L.

Hayhoe, L.

Rodgers of Quarry Bank, L.

Henley, L.

Roper, L.

Higgins, L.

Rotherwick, L.

Hodgson of Astley Abbotts, L.

Russell, E.

Hogg, B.

Ryder of Wensum, L.

Holderness, L.

Sainsbury of Preston Candover, L.

Holme of Cheltenham, L.

Home, E.

St John of Fawsley, L.

Hooper, B.

Sandberg, L.

Hooson, L.

Scott of Needham Market, B.

Howe, E.

Seccombe, B. [Teller]

Howe of Aberavon, L.

Selkirk of Douglas, L.

Howell of Guildford, L.

Selsdon, L.

Hunt of Wirral, L.

Sharman, L.

Hurd of Westwell, L.

Sharp of Guildford, B. [Teller]

Jacobs, L.

Sharples, B.

James of Holland Park, B.

Shaw of Northstead, L.

Jopling, L.

Shrewsbury, E.

Kimball, L.

Skelmersdale, L.

King of Bridgwater, L.

Smith of Clifton, L.

Kirkham, L.

Steel of Aikwood, L.

Knight of Collingtree, B.

Stevens of Ludgate, L.

Lang of Monkton, L.

Stewartby, L.

256

Stoddart of Swindon, L.

Tugendhat, L.

Strathclyde, L.

Vivian, L.

Swinfen, L.

Waddington, L.

Taverne, L.

Wade of Chorlton, L.

Tebbit, L.

Wakeham, L.

Thatcher, B.

Walker of Worcester, L.

Thomas of Gwydir, L.

Wallace of Saltaire, L.

Walmsley, B.

Thomas of Walliswood, B.

Watson of Richmond, L.

Thomson of Monifieth, L.

Weatherill, L.

Trefgarne, L.

Wigoder, L.

Trumpington, B.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Haskel, L.

Ahmed, L.

Hayman, B.

Alli, L.

Hilton of Eggardon, B.

Alton of Liverpool, L.

Hogg of Cumbernauld, L.

Amos, B.

Hollis of Heigham, B.

Andrews, B.

Howe of Idlicote, B.

Archer of Sandwell, L.

Howells of St. Davids, B.

Ashton of Upholland, B.

Howie of Troon, L.

Bach, L.

Hoyle, L.

Barnett, L.

Hughes of Woodside, L.

Bassam of Brighton, L.

Hunt of Chesterton, L.

Berkeley, L.

Hunt of Kings Heath, L.

Bernstein of Craigweil, L.

Irvine of Lairg, L. (Lord Chancellor)

Billingham, B.

Blackburn, Bp.

Islwyn, L.

Blackstone, B.

Janner of Braunstone, L.

Bragg, L.

Jay of Paddington, B.

Brennan, L.

Jeger, B.

Brett, L.

Jenkins of Putney, L.

Brightman, L.

Jones, L.

Brooke of Alverthorpe, L.

Jordan, L.

Brookman, L.

Judd, L.

Brooks of Tremorfa, L.

King of West Bromwich, L.

Burlison, L.

Kirkhill, L.

Campbell-Savours, L.

Laming, L.

Carter, L.

Layard, L.

Chandos, V.

Lea of Crondall, L.

Chelmsford, Bp.

Levy, L.

Christopher, L.

Listowel, E.

Clark of Windermere, L.

Lockwood, B.

Clinton-Davis, L.

Lofthouse of Pontefract, L.

Cobbold, L.

Macdonald of Tradeston, L.

Corbett of Castle Vale, L.

McIntosh of Haringey, L. [Teller]

Craig of Radley, L.

Crawley, B.

MacKenzie of Culkein, L.

Davies of Coity, L.

Mason of Barnsley, L.

Davies of Oldham, L.

Massey of Darwen, B.

Dean of Thornton-le-Fylde, B.

Merlyn-Rees, L.

Dearing, L.

Milner of Leeds, L.

Desai, L.

Mitchell, L.

Dixon, L.

Monson, L.

Donoughue, L.

Morgan, L.

Dormand of Easington, L.

Morgan of Huyton, B.

Dubs, L.

Morris of Aberavon, L.

Elder, L.

Morris of Manchester, L.

Evans of Parkside, L.

Nicol, B.

Evans of Watford, L.

Orme, L.

Farrington of Ribbleton, B.

Parekh, L.

Faulkner of Worcester, L.

Patel, L.

Filkin, L.

Pendry, L.

Fyfe of Fairfield, L.

Peston, L.

Gale, B.

Pitkeathley, B.

Gibson of Market Rasen, B.

Plant of Highfield, L.

Gilbert, L.

Radice, L.

Golding, B.

Ramsay of Cartvale, B.

Goudie, B.

Rea, L.

Gould of Potternewton, B.

Rendell of Babergh, B.

Grenfell, L.

Richard, L.

Grocott, L. [Teller]

Roll of Ipsden, L.

Hardy of Wath, L.

Rooker, L.

Harrison, L.

Sainsbury of Turville, L.

257

Sawyer, L.

Uddin, B.

Scotland of Asthal, B.

Varley, L.

Serota, B.

Warner, L.

Sheldon, L.

Warwick of Undercliffe, B.

Simon, V.

Whitaker, B.

Strabolgi, L.

Whitty, L.

Taylor of Blackburn, L.

Wilkins, B.

Thornton, B.

Williams of Elvel, L.

Tomlinson, L.

Williams of Mostyn, L. (Lord Privy Seal)

Tumberg, L.

Turner of Camden, B.

Williamson of Horton, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.14 p.m.
Clause 12 [Limits on powers conferred by section 11]:
[Amendments Nos. 8 to 10 not moved.]
Baroness Blatchmoved Amendment No. 11:
Leave out Clause 12.
On Question, amendment agreed to.
Clause 13 [General powers of Secretary of State in relation to companies]:
[Amendment No. 12 not moved.]
Baroness Blatchmoved Amendment No. 13:
Before Clause 19, insert the following new clause—
"CONTROL OF REGULATION

(1) In relation to the conduct of education in schools and nursery schools, the Secretary of State and local education authorities shall have a duly to limit new regulation and to control the amount of material they send to governing bodies and head teachers.

(2) The Secretary of State must publish an annual report to Parliament, setting out any progress he has made in the preceding year in seeking to control or reduce the volume of regulations, circulars and codes of practice that he or his predecessors have published, and reporting any representations he has received from governing bodies, head teachers or teachers' representative bodies about the burden that regulations impose.

(3) Each set of regulations, circular or code of practice issued by the Secretary of State shall include a statement by him of the time he expects it will take for governing bodies or head teachers of schools or nursery schools, as appropriate, to read, consider and implement the regulation, circular or code of practice concerned.

(4) In making his estimate under subsection (3), the Secretary of State shall impose no additional burden on schools or nursery schools to provide him or local authorities with information."

The noble Baroness said: My Lords, I rise to address the most vexed issue of the day so far as schools are concerned. In an interview for the Evening Standard on 3rd October 1996, the then shadow Education Secretary, David Blunkett, stated:
"We will increase delegation to schools and cut down on town hall bureaucracy".
Only now are the Government talking about cutting down bureaucracy after five years of massively increasing it. While we are discussing a Bill that will generate an unprecedented amount of bureaucracy, regulations, circulars, guidance and so forth, we are also still discussing a reduction in the burden of paperwork.
Over the 12 months to March 2002, the Government issued to primary and secondary schools documents totalling 4,440 pages. That represents 17 pages of government documentation for every single working day. That information came from a parliamentary Answer from the Government. A recent report published by the National Union of Teachers found that 57.8 per cent of teachers leaving the profession cited workload as one of the most important reasons for their departure. Despite that, the Secretary of State, Estelle Morris, claimed recently that reducing paperwork would not help teachers. She stated:
"I say to the House and to head teachers that sending teachers less paper will [not] raise standards".—[Official Report, Commons, 10/1/02; col. 661.]
It is my contention that sending schools less paper would give them more time to do what they should be doing; that is, running the schools and teaching the children. I beg to move.
Baroness Sharp of Guildford: My Lords, noble Lords on these Benches very much support the spirit of this amendment. The Government have set new records for the quantity of paper that has been spewing forth from Sanctuary Buildings. The advice being given often goes into extremely fine detail covering many pages. One has only to look at the number of books and amount of detail issued in connection with the numeracy strategy. These days, central government lay down week by week what mathematics should be taught in the classroom.
We see this as part of the centralisation agenda which started not with this Government, but long before, back in the 1980s under the administration of the noble Baroness, Lady Thatcher, who I see is in her place. We have all suffered from the increased centralisation and bureaucracy that has beset our schools. We need a bonfire of regulations. However, I do not think that this is the right amendment to achieve it. My doubts relate in particular to subsection (3) of the proposed new clause. It suggests that, when sending out any circular and so forth, the Secretary of State should indicate the time that it will take to fill out the forms or deal with the information. The amendment states that the,
"Secretary of State shall include a statement by him of the time he expects it will take for governing bodies or head teachers of schools or nursery schools, as appropriate, to read, consider and implement the regulation, circular or code of practice concerned".
Even if we take only the word "read", something of a problem is created. Obviously, it takes people different lengths of time to read a document because some are fast readers and some are slow. Then, when trying to work out the time involved in a board of governors considering the impact of a document, there too will be wide variation from institution to institution. It would be extremely difficult for the Secretary of State to specify times in this regard.
Subsection (2) invites the Secretary of State simultaneously to list all the representations he receives from head teachers and governing boards concerned with bureaucracy. One can bring to mind the vast numbers of letters that will be sent stating

259
something like, "You expected us to read this material in five minutes, but it has taken us 55 minutes to do so".
As I said, in spirit we entirely support the proposed new clause, but in practice it is not the right way to seek to control bureaucracy. We need a bonfire of regulation, but what must be done is to go back to where we started. The problem lies in over-centralisation, a practice that was as much of a problem under previous Conservative administrations as it is under this Government.
Education should belong to the schools and to local education authorities. We want to go back to a time when we trusted our teachers to get on with the job, when they did not have to be told bit by bit what to do; we want to trust local education authorities to run the show. We do not want even more circulars about other circulars.
While we support the spirit of the amendment, we shall not be joining the Opposition in the Lobby.
Lord Dearing: My Lords, I recall helping a Conservative government once upon a time and being as much concerned then as I am today about the flow of paper into schools from government and local authorities. I do not believe that the amendment is an effective way of controlling it, but the intent is absolutely right. In the days when I was advising, a very senior official was appointed to control the flow of paper into schools. He did not succeed.
Teachers enjoy teaching—they enjoy the demands of their profession—but they are not administrators. They need time to prepare their lessons and to teach, and they are not getting enough of it. I said before how astonished I was to hear from a former chief inspector, a little over a year ago, that 400,000 teachers were teaching, and 400,000 qualified teachers were not teaching. That speaks a great deal about what teachers think of their profession.
They love teaching—they want to teach—and the greatest single service the Government can give to education is greatly to reduce the flow of paper into schools. I hope that the Minister will be able to give the House some real assurances on this issue.
Lord Monson: My Lords, I have not so far taken part in the debate but there is an enormous amount of force in what the noble Baroness, Lady Blatch, said. Would not the answer be to pass the amendment and then, in the other place, subsections (2), (3) and, by extension, subsection (4), to which the noble Baroness on the Liberal Democrat Benches objected, could be removed there? That would leave in subsection (1), which is the really important one. Unless the amendment is passed, that will be impossible.
Baroness Ashton of Upholland: My Lords, I have spoken to this issue at previous stages of the Bill and once again I wish to make clear that the Government wholeheartedly support the spirit of the amendment. We understand that head teachers and teachers are
260
under pressure. We are only too well aware of the importance of removing unnecessary burdens from our schools. It is something at the forefront of our minds in the continual challenge, as the noble Lord, Lord Dearing, and the noble Baroness, Lady Sharp, said, to let teachers concentrate on teaching and to create the right environment for all our pupils to succeed.
I accept that when one talks to those who should be in the teaching profession but are not, or to those who are moving out of the teaching profession, they refer to workload issues. It is very important to understand what we mean by "workload" and not simply to see it as an issue—important though it is—of the amount of paper that teachers have to deal with.
I am sure that the concept of a school system with no regulation, no information and no guidance is not realistic. I accept that the amendment of the noble Baroness, Lady Blatch, does not propose this, but we do need to be careful. Its aim is laudable but it would have damaging and obviously unintended consequences elsewhere. If we placed what would be necessarily crude and arbitrary limits on the number of regulations, we would ignore the unforeseen needs which we all know can materialise, in some cases almost out of the blue. We do not believe that it is right to surrender our ability to act swiftly and effectively to protect the rights and needs of pupils and adults working in schools simply to comply with the provisions of the amendment. Our schools need to operate within a common framework and to understand their position within it, particularly in regard to the choices open to them and the responsibilities placed on them.
Perhaps I may provide the House with some examples of what I mean. We need to be able to communicate with schools and education authorities in order to make them aware of new guidance material that we may issue. A case in point—one which is close to noble Lords' hearts—is Clause 173, which deals with the welfare of children and which the noble Baroness, Lady Blatch, supported. We surely would not want to put ourselves in the position of not being able to send out material on an issue of such importance because there was a limiting statutory duty to control material.
It is not only the need to respond immediately to particular issues that would be under threat but the regular work that goes on to try to improve provision for the most vulnerable children in our society and to enhance their life chances. For example, if we decided to revise and improve the admissions framework through a new code of practice because we found that it needed improvement for the most vulnerable, we would not want to tie the Secretary of State's hands by not allowing her to consult or communicate with schools.
I accept the point that schools do not gain from being deluged with irrelevant or poorly structured material. I emphasised at Report stage how important it is to ensure that our communications with schools are of high quality, and consistently so. But this

261
amendment would jeopardise our ability to communicate with schools and could put us in a position of not being able to explain to schools what we were trying to do.
The amendment has defects, too, in that it requires the Secretary of State to work out how much time each head needs to read, consider and implement any specific regulation or circular. This assumes the "one size fits all" approach to regulations to which we are precisely opposed. Guidance, regulations and codes of practice will often apply to different schools in differing degrees according to their individual circumstances, and they will spend different amounts of time in considering and implementing them. We would not want the Secretary of State to spend time trying to second guess to the minute how long schools will spend reading documents. Schools will decide that for themselves. If they believe it is too long, I trust that they will make recommendations to us and we will act accordingly.
The amendment is lacking in that it does not address the issue of the quality of information issued. I know from my own experience of being both responsible for issuing information and being on the receiving end as a chair of governors until last year that it is the quality equally as much as the quantity—indeed, more so—of the communication or regulation that is of paramount importance.
With this in mind, I wish to give the House an example of some of the regulations that will emanate from the Bill. On the new school governance regulations we will be "road testing" draft guidance and regulations with focus groups involving representatives from the main stakeholder groups before we formally consult. This will ensure that what is being proposed is clear and fit for purpose. We want schools to get all the information they need, but no more than is necessary, to implement the planned changes.
The new guidance and draft regulations have already been considered by our advisory group on governance, discussed with Church representatives and piloted with focus groups of governors, local education authorities and diocesan boards in Darlington, Coventry and London. The focus groups warmly welcomed the opportunity to participate and made useful suggestions, while commending the department's general approach. In all cases, schools will get only exactly what they need for their own purposes, tailored to the category of school. This is what our approach to regulation is all about—discussing our changes with stakeholders, ensuring regulation is fit for purpose and tailored to the end user.
As I have explained at previous stages, we take very seriously our responsibility to remove those burdens on schools which should not be there. I have referred to the range of measures which are in place, from greatly increasing the numbers of support staff in schools to the current programme of 32 pathfinder schools which is exploring new and better ways of tack ling teacher workload.
262
Perhaps I may explain to the House the kind of resources we are looking at for these pathfinders. We have provided additional resources, including a new laptop for every teacher, Internet access and ICT support. Noble Lords will have heard me speak many times on the issue of new technology. I believe that new technology can be absolutely fundamental in helping our teachers to reduce their workload, simply because it provides a framework in which planning and other activities which we know take teaching time can be done more effectively. It is a very useful communication tool between schools, local education authorities and the department. We want to explore very carefully ways in which we can use the technology.
We have provided additional teaching assistance and administrative support in the pathfinder areas, including bursarial staff, to help free up teachers and school leaders to focus on professional responsibilities. We have introduced training for all staff in the use of the new ICT provision. We have increased non-contact time for teachers to free them up for lesson planning and marking, professional development and school planning activities, and we have put up to seven days the professional support time to be used in helping to deliver the changes and receiving advice on a variety of approaches to reduce teacher workload.
The 32 pathfinder projects are there—this takes nothing away from the issue of ensuring that the department sends schools what they need and no more—because we recognise that we also need to look in a broader context at the issues of teacher workload. They do not all rest on the bureaucracy to which noble Lords have referred. It is within the context of examining the 32 pathfinder projects that we want to ensure that we get this right. We recognise the pressure in this House and elsewhere to ensure that we do this properly. That is why we have set up the pathfinder projects.
We are not complacent about this matter. As noble Lords will be aware, the Secretary of State is considering her response to the report of the School Teachers' Review Body on teacher workload. I believe that it would be short-sighted of us to make hasty decisions about one aspect of workload pressures without thinking through the interplay with other factors which place pressures on teachers. We are engaged in thinking of ways to reduce these in conjunction with all those who have an interest in this area. Therefore, I do not want to act now, ahead of the Secretary of State's response in the autumn to the teacher workload report. I believe that to do so would be premature and possibly counter-productive.
Our intentions are very clear. We believe in sensible regulation fit for purpose. We wish to provide essential safeguards in the education system. We are committed to providing high-quality, clear communications for schools which recognise the needs of those delivering education. We are dedicated to an approach that involves stakeholders in deciding on these issues.
Having recognised the spirit in which the amendment has been proposed, I believe that it would not assist us in completing the work that we have

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started in this area. With those commitments, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Blatch: My Lords, I believe that the amendment would assist schools and their heads and governors if there were a duty on the Secretary of State to limit regulation and to limit the flow of paper into schools to only that which is necessary or essential and which at the end of the day enhances the experience of a child in the classroom.
There is a real world out there, and then there is the Department for Education and Skills. I have listened to everything that the Minister has said. I know that she is sincere in her belief in what she is saying. But those working in schools do not say these sorts of things. They do not say that the only documents that come through the door are those which are absolutely essential, or that the only documents they receive are those that add to and enhance the educational experience of the children.
I am almost offended by the examples of essential information given by the Minister; namely, to do with the safety of children, to do with emergencies that crop up without notice. Of course there has to be communication between the department and the schools, but the Minister uses those examples against what I am arguing about— the unnecessary information and documentation that goes out to schools.
In relation to subsection (3), the noble Baroness, Lady Sharp, was concerned that some view should be taken when regulations are passed down to schools about how much time is expected for a primary school or a secondary school to interpret a document and to implement whatever measures it contains. One of the problems is that regulations are passed inexorably downwards to schools, without any thought whatever about how much time needs to be expended on interpreting them, understanding the legalese and making sure that they are implemented—knowing that down the road will come Ofsted to inspect schools to see whether they have carried out the requirements. So I believe that subsection (3) is important.
Nevertheless, I take the point made by the noble Lord, Lord Monson. If the Government believe that the thrust of the amendment is right, and if my Liberal Democrat colleagues believe that it is right and really do have sympathy with schools because they are inundated with bureaucracy, let them support this amendment. Let the Government make sense of the duty that I wish to place on the Secretary of State to limit and control the flow of paper and regulations into our schools.
Schools will not be impressed by the good will of the noble Lord, Lord Dearing, the noble Baroness, Lady Sharp, the Minister or anyone else who says: "We have sympathy with the schools. We really do think that they are overburdened with bureaucracy. We really do think that there is too much of it. We do think that there are too many regulations. But we shall
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not go into the Lobby to support the amendment". The schools will not be over-impressed with that. They will be very impressed with this House if it first of all recognises that there is a problem—everyone who has spoken today, including the Minister, agrees that there is an issue. If they came into the Lobby with me and gave the Government the opportunity suggested by the noble Lord, Lord Monson, to tidy up this amendment—so that it is not just a practical issue for schools, but in such a way that bureaucracy will be reduced and time will be freed up to do what they should be doing; namely, teaching children—then the proposal will be made more deliverable as a result of the expertise which the Minister has at her command and which I do not.
There should be a bonfire of unnecessary regulations and documents which tax the precious time of governors, heads and teachers. I wish to test the opinion of the House.
5.35 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided: Contents, 135; Not-Contents, 128.

Division No. 2

CONTENTS

Aberdare, L.

Elton, L.

Alton of Liverpool, L.

Feldman, L.

Anelay of St Johns, B.

Ferrers, E.

Arran, E.

Flather, B.

Astor, V.

Fookes, B.

Astor of Hever, L.

Forsyth of Drumlean, L.

Bagri, L.

Gardner of Parkes, B.

Black of Crossharbour, L.

Garel-Jones, L.

Blackwell, L.

Glentoran, L.

Blaker, L.

Goschen, V.

Blatch, B.

Gray of Contin, L.

Boardman, L.

Hambro, L.

Bowness, L.

Hanham, B.

Brabazon of Tara, L.

Hayhoe, L.

Brigstocke, B.

Henley, L.

Brougham and Vaux, L.

Higgins, L.

Burnham, L.

Hodgson of Astley Abbotts, L.

Buscombe, B.

Hogg, B.

Byford, B.

Holderness, L.

Caithness, E.

Home, E.

Campbell of Alloway, L.

Hooper, B.

Carlisle of Bucklow, L.

Howe, E.

Carnegy of Lour, B.

Howe of Aberavon, L.

Carrington, L.

Howe of Idlicote, B.

Chadlington, L.

Howell of Guildford, L.

Clark of Kempston, L.

Hunt of Wirral, L.

Coe, L.

Hurd of Westwell, L.

Colwyn, L.

Hylton, L.

Cope of Berkeley, L.

James of Holland Park, B.

Craigavon, V.

Jopling, L.

Crickhowell, L.

Kimball, L.

Cumberlege, B.

King of Bridgwater, L.

Darcy de Knayth, B.

Kirkham, L.

Dean of Harptree, L.

Knight of Collingtree, B.

Denham, L.

Lamont of Lerwick, L.

Dixon-Smith, L.

Lang of Monkton, L.

Eccles of Moulton, B.

Listowel, E.

Eden of Winton, L.

Lucas, L.

Elles, B.

Luke, L.

Elliott of Morpeth, L.

LyelL L.

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McColl of Dulwich, L.

Rees, L.

MacGregor of Pulham Market, L.

Renton, L.

Roberts of Conwy, L.

MacLaurin of Knebworth, L.

Rotherwick, L. [Teller]

Mancroft, L.

Sainsbury of Preston Candover, L.

Marlesford, L.

Masham of Ilton, B.

St John of Fawsley, L.

Miller of Hendon, B.

Seccombe, B.[Teller]

Monro of Langholm, L.

Sharples, B.

Monson, L.

Shaw of Northstead, L.

Montagu of Beaulieu, L.

Shrewsbury, E.

Montrose, D.

Skelmersdale, L.

Mowbray and Stourton, L.

Stevens of Ludgate, L.

Moynihan, L.

Stewartby, L.

Murton of Lindisfarne, L.

Strathclyde, L.

Newton of Braintree L

Swinfen, L.

Noakes, B.

Tebbit, L.

Thatcher, B.

Northbrook, L.

Thomas of Gwydir, L.

Norton of Louth, L.

Trefgarne, L.

O'Cathain, B.

Trumpington, B.

Onslow, E.

Tugendhat, L.

Oppenheim-Barnes, B.

Vivian, L.

Park of Monmouth, B.

Waddington, L.

Peel, E.

Wade of Chorlton, L.

Perry of Southwark, B.

Wakeham, L.

Platt of Writtle, B.

Walker of Worcester, L.

Powell of Bayswater, L.

Weatherill, L.

Reay, L.

Williamson of Horton, L.

NOT-CONTENTS

Acton, L.

Faulkner of Worcester, L.

Alli, L.

Filkin, L.

Amos, B.

Fyfe of Fairfield, L.

Andrews, B.

Gale, B.

Archer of Sandwell, L.

Gibson of Market Rasen, B.

Ashton of Upholland, B.

Gilbert, L.

Bach, L.

Golding, B.

Barnett, L.

Goudie, B.

Bassam of Brighton, L.

Gould of Potternewton, B.

Berkeley, L.

Grenfell, L.

Bernstein of Craigweil, L.

Grocott, L. [Teller]

Billingham, B.

Hardy of Wath, L.

Blackstone, B.

Harrison, L.

Bragg, L.

Haskel, L.

Brennan, L.

Hayman, B.

Brett, L.

Hilton of Eggardon, B.

Brooke of Alverthorpe, L.

Hogg of Cumbernauld, L.

Brookman, L.

Hollis of Heigham, B.

Brooks of Tremorfa, L.

Howells of St. Davids, B.

Bruce of Donington, L.

Howie of Troon, L.

Burlison, L.

Hoyle, L.

Campbell-Savours, L.

Hughes of Woodside, L

Carter, L.

Hunt of Chesterton, L.

Chandos, V.

Hunt of Kings Heath, L.

Christopher, L.

Irvine of Lairg, L. (Lord Chancellor)

Clark of Windermere, L

Clinton-Davis, L.

Islwyn, L.

Corbett of Castle Vale, L.

Janner of Braunstone, L.

Craig of Radley, L.

Jay of Paddington, B.

Crawley, B.

Jeger, B.

Davies of Coity, L.

Jones, L.

Davies of Oldham, L.

Jordan, L.

Dean of Thornton-le-Fylde, B.

Judd, L.

Dearing, L.

King of West Bromwich, L.

Desai, L.

Kirkhill, L.

Dixon, L.

Layard, L.

Donoughue, L.

Lea of Crondall, L.

Dormand of Easington, L.

Lockwood, B.

Dubs, L.

Lofthouse of Pontefract, L.

Elder, L.

Macdonald of Tradeston, L.

Elis-Thomas, L.

McIntosh of Haringey, L. [Teller]

Evans of Temple Guiting, L.

Evans of Watford, L.

MacKenzie of Culkein, L.

Farrington of Ribbleton, B.

Mason of Barnsley, L.

266

Massey of Darwen, B.

Richard, L.

Merlyn-Rees, L.

Rooker, L.

Milner of Leeds, L.

Sainsbury of Turville, L.

Mitchell, L.

Sawyer, L.

Morgan, L.

Scotland of Asthal, B.

Morgan of Huyton, B.

Serota, B.

Morris of Aberavon, L.

Sheldon, L.

Morris of Manchester, L.

Simon, V.

Nicol, B.

Taylor of Blackburn, L.

Orme, L.

Thornton, B.

Parekh, L

Tomlinson, L.

Patel, L.

Turnberg, L.

Turner of Camden, B.

Patel of Blackburn, L.

Uddin, B.

Pendry, L.

Varley, L.

Peston, L.

Walker of Doncaster, L.

Pitkeathley, B.

Whitaker, B.

Plant of Highfield, L.

Whitty, L.

Radice, L.

Wilkins, B.

Ramsay of Cartvale, B.

Williams of Elvel, L.

Rea, L.

Williams of Mostyn, L. (Lord Privy Seal)

Rendell of Babergh, B.

Resolved in the affirmative, and amendment agreed to accordingly.
5.46 p.m.
Clause 19 [Governing bodies]:
Baroness Sharp of Guildfordmoved Amendment No. 14:
Page 12, line 37, at end insert "of whom at least one shall be a teacher and, with the exception of the governing body of a small school, another shall be a member of the support staff"
The noble Baroness said: My Lords, Amendment No. 14 relates to school governors and the new stakeholder model of school governors being introduced. The amendment has had a good deal of discussion both in Committee and on Report. As has been noted, the current regulations for governors in schools were introduced in 1999. The Government are proposing to change those within two years. There has been some discussion as to whether it is necessary to change those regulations. We have given up battle on that. The Government seem to be determined to introduce the so-called stakeholder model.
In the previous rules there were separate categories for teacher and support staff governors. That was the first time that support staff governors had appeared. It was a considerable achievement on their part. A result of the stakeholder model is that that category now disappears and there is only one group. Persons will be appointed as staff governors, irrespective of whether they are teachers or support staff.
The Government are probably aware that that has caused unease among the teachers and real hurt among the support staff who felt that they had achieved a great deal on the previous occasion. They were pleased. They now feel that all that has been lost, in particular because the new regulations specify that there should be at least one teacher among the staff represented. The representation of the support staff is not mentioned.
We have tabled the amendment again because it is a just cause. On the previous occasion the Minister rejected the amendment partly because of our reference to very small schools. One of the objections

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raised in Committee was that in a village school where there is only a head, a teacher and a member of support staff, all three members of the school staff would be on the governing body. It was felt that that would be a little extreme.
That was countered on Report by suggesting that we should limit the exception to the governing body of the smallest category of schools. We were told that there was no such thing as a "smallest category of schools". We have now tabled two amendments which mention the possibility of a limitation in the case of the smallest category of schools, and include a definition of a small school in order to overcome that objection.
I hope that the Minister will look kindly on Amendment No. 14. Some hurt has been caused to support staff in schools as a result of the proposed change. It would be good to see them remembered and thought about. Therefore, I hope that the Minister will see fit to accept the amendment. I beg to move.
The Lord Bishop of Blackburn: My Lords, I shall speak to Amendment No. 15, which is in this group. On Second Reading, a number of noble Lords spoke positively in favour of the special character of voluntary-controlled Church of England schools. The Minister has been helpful on the issue at earlier stages of the Bill and has indicated the Government's intention to ensure, through regulation, that voluntary-controlled and foundation schools of a religious character have at least two foundation governors. I welcome that assurance.
So why am I bringing the issue back once more? We are concerned with the character of a particular category of schools. What does it mean to be a voluntary-controlled school? What makes such a school? In part, their governance is vital, representing a delicate balance of interests. My humble submission is that anything less than two governors, as a legal requirement in primary legislation, could destroy that balance.
The Minister has accepted that for some Church schools the foundation should be protected in primary legislation. She moved an amendment to ensure that foundation governors of voluntary-aided schools should outnumber the other governors and gave assurances that regulations would make it clear that they should outnumber other governors by two.
I am asking for similar protection to extend to voluntary-controlled and foundation Church schools, where the place of the foundation representing the interest of the Church and the particular religious characters of those schools is more precarious than in voluntary-aided schools.
Almost all these schools predate the Education Act 1944. The Church of England founded them, often in the 19th century, well before government grant was available to help with capital funding. The voluntary-controlled status was an ingenious and creative solution to a particular problem in 1944, but it has stood the test of time. It reflects visibly and practically the Church of England's understanding of itself as a folk Church serving this nation.
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Voluntary-controlled schools serve their local—often rural or inner-city—communities entirely inclusively, providing education for all who seek it on usually the same kind of admissions criteria as our community schools. However, they often have a closer link with the local community through a prized and important relationship with their parish church.
I press the issue because experience has shown that sometimes it is difficult to remind voluntary-controlled Church schools that they are Church schools of a particular kind if foundation governors are always outnumbered by the other governors.
In 1998, the Government recognised the importance to the Church of working to preserve the religious character of such schools in times that may be adverse for religious schools. The School Standards and Framework Act of that year allowed the governing body, when appointing a head for such a school, to have regard to that person's ability and fitness to preserve and develop the religious character of the school in the controlled status. I readily and gratefully acknowledge the support that the Government give to Church and other faith schools. I also acknowledge the support given by the previous government.
Our point is that, although primary legislation can be changed, it cannot be changed as easily as can regulations. The Government's present commitment may not always be reflected by their successors in office.
The amendment is modest in its demands, but would be wide in its effects. It does not in any way conflict with the stated government policy on the issue. The Minister said on Report that her door was open on the issue. A number of us went through it to discuss this. I hope that she is willing to support the amendment.
Lord Alton of Liverpool: My Lords, very briefly, I support the right reverend Prelate the Bishop of Blackburn on Amendment No. 15. He has eloquently made the arguments behind the amendment. One of them is about the autonomy of Church schools. Another is about their changing character, should there not be sufficient governors—in this case foundation governors—who are committed to the ethos of that school. At a time when the Government have signalled their willingness to allow further faith schools to be created and have seen the value of those schools and the contribution that they make to our education system, it would be ironic if the ethos of existing Church schools was diluted because insufficient protection was given to the governing body.
However, like the right reverend Prelate, I am conscious of the support that the Minister has given to Church schools throughout the Committee and Report stages and the sensitive way in which she has dealt with these issues. I hope that she will be able to tell your Lordships more about the regulations that she intends to introduce. Although the right reverend Prelate is correct that primary legislation is a greater

269
safeguard than regulations, I hope that she will be able to say enough this evening to avoid us having to press the amendment to a Division.
Lord Dearing: My Lords, I support all three amendments. I was diffident about supporting the noble Baroness, Lady Sharp, until I saw the protection clause for small schools. My experience on two governing bodies is that there is value in having staff governors.
I am conscious from some work that I have done on Church schools of the slight nature of the Church's position. The head does not have to be a practising Christian, but must have the ability and the attitude of mind to carry forward the ethos of the school. Two governors constitute a small minority on the governing body. There is no point having Church schools unless they are distinctive. Those who come from a church background can contribute most to that distinctiveness. If we are to continue to have Church schools—that has been the will of this House—it is fundamental that they should be distinctive. I hope that the Minister will be able to give us clear satisfaction that there is no doubt that that will be maintained.
Baroness Howe of Idlicote: My Lords, I shall briefly support all three amendments. It is essential that one of the partners of the environment in which those working in a school are engaged should be part of the governing body. My view is that pupils should also be represented on the governing body, but I may have to wait a little longer for that.
I support what my noble friend Lord Dearing said about Amendment No. 15. Two is not a large number. When I chaired the commission on the future of cathedrals, one or two representations were made about the over-dominance of the religious representation in schools. A lot has changed since that time. Two is a minimum. I entirely support that proposal. I hope that the Minister will be able to accept all the amendments.
6 p.m.
Baroness Ashton of Upholland: My Lords, before I respond to the amendments, it is pertinent to say a little about the legal framework that we are constructing in the Bill, given that in part the amendments would place on the face of the Bill matters that will be dealt with in regulation.
I hope that I have made clear that our approach is for matters of principle to be laid down in primary legislation and process matters to be covered in regulation. In education, we inherited a vast amount of process laid down in primary legislation. That is why we have converted a number of processes and procedures into delegated powers, in order that they can be laid out as necessary in regulations. That will enable us to create more flexibility to tailor the procedures to changing circumstances and enable us to create more freedom for the front line—if I may describe teachers and governors as such—by making those regulations less prescriptive.
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The noble Baroness, Lady Sharp, and the right reverend Prelate should bear in mind that regulations have equal force in law to provisions in primary legislation. That is important when one looks at where one wishes to position a particular element. We are looking to put the processes and procedures into regulations.
I turn to Amendment No. 14. I am aware of the concerns expressed in some quarters to see parity of representation on school governing bodies between support and teaching staff. The noble Baroness has tabled an identical amendment to that she tabled on Report, together with her further Amendment No. 16 which defines small schools. I explained then that all governing bodies will be able to choose a model which suits their needs best within a framework of guiding principles.
So there will no longer be any necessary connection between the size of a school and the size of its governing body. Even the smallest school if it wished would be able to choose the largest model. In order to increase flexibility, we are deliberately coining away from pegging representation to size of school. That is an important point because it is fundamental to our agenda of giving schools greater flexibility. But the Government's motivation could be being misinterpreted as a drawing back from the principle of support staff representation on school governing bodies. That is certainly not the case, particularly as it was the Government's 1998 legislation that first provided that opportunity, as the noble Baroness said.
I am grateful for the opportunity the amendments provide to allow me to place on the record the Government's commitment to the involvement of support staff as members of school governing bodies. Noble Lords will know only too well that support staff play a vital and increasingly important role in the life of our schools. They are being employed in greater numbers in a wide range of capacities. Life in our schools is the richer for them, and their greater involvement is of considerable benefit to other staff as well as to pupils and their parents.
The move to a single governance category to cover all staff employed to work in maintained schools is not intended to suggest that support staff are not important or that their presence on governing bodies should be regarded as an optional extra. It was previously the case that support staff could be included only if they were parents, or if the governing body decided to co-opt them, with neither option giving support staff any say in who should represent them. The Government took an important step to include them in the 1998 legislation by providing for elected non-teaching staff.
The single staff category also emphasises that all staff are part of a single stakeholder group as they are employed to work at the school and owe their livelihoods to it. I know from personal experience that support staff are making a valuable contribution to the work of governing bodies. Where the situation is working well, a governing body would be foolish

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indeed to deny itself access to individuals who, while just as intimately involved in the school, can bring a different perspective from teachers.
But we need to provide for those governing bodies which, despite strenuous efforts and much good will, have found it impossible to persuade any member of the support staff to stand for election as a staff governor. One of the benefits of the new constitutional arrangements is that governing bodies should be able to choose the size and composition that works best for them and minimise unnecessary vacancies.
There are good reasons why governing bodies may wish to have a smaller governing body, particularly for a very small school. Smaller governing bodies make provision for only two staff representatives. One of those places, as noble Lords are aware, will be designated for the head teacher and cannot be reassigned, even if the head does not wish to become a governor. A second place will be reserved for a teacher. But if no teacher chooses to stand for election and other staff wish to do so, we have decided that the school's staff will be able to elect a member of the support staff to fill that second place.
Having further considered the arguments put forward by the noble Baroness, Lady Sharp, I want to place on the record a further change that I propose to write in regulations. As noble Lords will remember from Report stage, the draft regulations already provide that at least one staff governor in addition to the head teacher must be a school teacher unless no school teacher stands for election. Where constitutional models provide at least three staff governor places, we will provide that one of those places should be reserved for a member of the support staff, unless no member of the support staff wishes to stand for election.
I hope that as governing bodies consider their options for new constitutions they will look closely at what support staff are already contributing to the work of their governing body or could in future, and, unless there are good reasons to opt for a smaller model, select a constitutional model which will allow for support staff representation.
Amendment No. 15 seeks a requirement that the regulations made under Clause 19 should provide for at least two foundation governors on the governing bodies of voluntary controlled and foundation schools with a religious character. As I said on Report when we were debating a similar amendment, I do not believe that there is any difference of opinion between us. I gave the House my absolute assurance that the regulations will indeed provide for a minimum of two foundation governor places at voluntary controlled and foundation schools. It has been a key tenet of our approach to the constitutional proposals that the primary legislation should restrict itself only to the key principles, with all the details in secondary legislation.
While it grieves me dearly to say no to the right reverend Prelate the Bishop of Blackburn, for me to agree to the amendment would mean breaking faith with all the other stakeholder groups who have a right
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to be treated equally. I understand his concern to ensure that the ethos of controlled and foundation schools with a religious character should be protected. But we are undertaking to meet his request by providing in regulations—I have explained the force of regulations in law—that foundation representation in voluntary controlled and foundation schools should provide at least two and up to and including one quarter of places.
The governing body will continue to be obliged to uphold the school's trust deed and honour the ethos statement in the school's instrument of government. If there are concerns at any time that a governing body is acting in a way which would undermine the school's religious ethos, it will be open to any person to complain to the Secretary of State under the provisions in Sections 496 or 497 of the Education Act 1996 that the governing body is acting unreasonably in exercising its powers, or that it has failed to discharge that duty.
In considering any complaint made to her, the Secretary of State is required to take account of a school's category, and therefore the requirement to conduct a school with a religious character in accordance with the school's ethos statement. All the amendments seek levels of detail that we believe are more appropriate for regulations. I hope that my assurance on our commitment to school support staff, and the changes I have proposed to the regulations, will persuade the noble Baroness, Lady Sharp, to withdraw her amendment. I also trust that the additional assurance on the preservation of the religious character of controlled and foundation schools will lead the right reverend Prelate the Bishop of Blackburn not to move his amendment.
Baroness Sharp of Guildford: My Lords, I thank the Minister greatly. She has given me most of what I wanted. It would have been nice to have it in the Bill, but I realise that that would not fit with the stakeholder model. It is the next best thing to have the provisions stated in regulations and I am delighted. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 and 16 not moved.]
Clause 24 [Federations of schools]:
The Lord Bishop of Blackburnmoved Amendment No. 17:
Page 15, line 27, at end insert—
"(3A) A school that is a Church of England school, a Church in Wales school or a Roman Catholic Church school shall not be federated without the consent of the appropriate diocesan authority, and where a federation referred to in subsection (1) includes such a school, the instrument of government for the federation shall not be changed without the consent of the appropriate diocesan authority.
(3B) In the case of a foundation school, a foundation special school or a voluntary school which has a religious character but is not a Church of England school, a Church in Wales school or a Roman Catholic Church school, the school shall not be federated without the consent of the persons who appoint the foundation governors of the school, and where a federation referred to in

273
subsection (1) includes such a school, the instrument of government for the federation shall not be changed without the consent of those persons.
(3C) Where the consent of the appropriate diocesan authority is required under subsection (3A) or the consent of the persons who appoint the foundation governors of the school is required under subsection (3B) such consent must not be withheld unless there are reasonable grounds for so doing."
The right reverend Prelate said: My Lords, although procedures forbade me from rising at that point I am grateful for the Minister's assurances on Amendment No. 15. I am also grateful for her full reply when I last raised federations on Report. However, on reading Hansard, and reflecting with others on the detail of her comments, it became clear to me that I have reluctantly to return to the matter, even at this late stage.
My support and encouragement for federations, which is on the record from previous debates, remains; that is why I rise to move this amendment. I commented in the earlier debate on the helpful note the Minister's officials prepared on the impact of federation on the religious character of a school. I raised four issues that have not been addressed adequately and to which I return now.
The note referred to voluntary aided schools with a religious character, but had nothing to say about voluntary controlled schools, whose individual religious character is particularly important to the Church of England. On Report the Minister helpfully referred to the importance of reserve teachers in such schools and how that would be preserved in the federation. I made a brief reference on another matter to the place of head teachers in such schools of a religious character, but in Section 60 of the School Standards and Framework 1998 Act the wording was introduced—a significant innovation from the Church's point of view—that the governors could appoint a head teacher for a voluntary controlled or foundation school on the basis of a candidate's,
"ability and fitness to preserve and develop the religious character of the school".
That, of course, quite rightly fell short of a religious test but did allow for the first time the choice of a head who would be positively sensitive to, and supportive of, the school as a Church school whatever his or her own religious beliefs. As I said earlier, the religious character of a voluntary-controlled school is harder to preserve than that of a voluntary-aided school. Thus, the Government accepted our innovative wording. It will be important in a federation to preserve that character. I hope to hear an assurance from the Minister that regulations will acknowledge and, indeed, allow for that in a voluntary-controlled or foundation school.
Secondly, the helpful note identified arrangements for the appointment of a head teacher where a voluntary-aided school is part of a federation, but not for a proportion of the other staff where joint staff appointments are to be made. Section 60 of the 1998 Act put positively for the first time the governing body's right in a voluntary-aided school to appoint teachers who hold the religious tenets of the school in question and who do not contravene the moral
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precepts of the religion in question. That was important, in view of the forthcoming introduction of the Human Rights Act, as a contribution to the preservation of the character of the school. It had been implicit in legislation dating back to 1944 but was made explicit for the first time in the 1998 Act.
What would be the impact, for example, on a rural voluntary-aided school federated with two other community schools in neighbouring villages, with one head and in total, say, nine teachers? I hope that the Minister can give me the assurance that in such a case there should be a means whereby the three teachers who would normally be teaching in the voluntary-aided Church school—or, in any case, three of the teachers if the teachers were appointed to work across all three schools—could be appointed under the terms of Section 60 of the 1998 Act, and that regulations will so provide.
Thirdly, I was concerned that the note referred to a situation where there was disagreement between the governing body, the LEA and the diocesan authority over a new instrument of government. I was helpfully told that in those circumstances there would be an appeal to the Secretary of State. However, it would be helpful to have some indication of the principles on which the Secretary of State might decide the case.
The Minister helpfully referred on Report to several bases for the Secretary of State's judgments. However, I would like to have heard that the Secretary of State would seek to ensure that the trust deed of the school—its purpose as a religious school—would not be contravened by the proposed federation and that she would bear that in mind as well in seeking to resolve any unfortunate dispute. I assume that it will not be difficult for the Minister to give that commitment, but it would be good to hear it and to have it on the record. The Church or other religious bodies entering a federation would not seek preferential treatment but equal opportunities and a respect for the original charitable purposes of the school.
Finally, the note outlined an exit strategy if a federation were to some minds going wrong. The final decision would rest with the governing body of the federated schools and its decision would be absolute. As I understand it, if the governors representing a religious foundation within the federation wanted, for the sake of preserving the religious character of the school, to withdraw their school from a federation, they could do so only by persuading a majority of their fellow governors to agree. I hope that the Minister shares my view that that might significantly discourage religious schools from entering the kind of federations that I should like to see them enter to the detriment of their potential role in creating inclusion and diversity particularly in the primary sector of our education service. In current proposals a majority of community school governors would decide on the future of a Church or other faith school. I predict that that might lead to unfortunate disputes.
I am sorry to have taken so much time but it would help us and other religious communities willing to entertain joining federations—for the sake of social

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inclusion and community cohesion—if the diocesan authority or the body appointing foundation governors could appeal to the Secretary of State to withdraw their school from a federation where a federated governing body was not willing for such a withdrawal to take place. If the Minister were able to give me such an assurance, I would find it perfectly possible enthusiastically to recommend federations to religious schools, at least within the Church of England, without the need for a diocesan authority to have a veto, as the amendment seeks to achieve. I beg to move.
6.15 p.m.
Lord Alton of Liverpool: My Lords, I support Amendment No. 17 which the right reverend Prelate has just laid before your Lordships. I wish particularly to underline the point he made about how the amendment could enhance the Government's laudable objective of trying to create federations. If the kind of assurances which the right reverend Prelate has sought cannot be given, many Church schools from varying religious backgrounds—the right reverend Prelate mentioned Anglican schools but from the discussions I have had with Roman Catholic authorities I believe that they hold the same views—would consider that a major disincentive to entering federated arrangements. The very proper objective of trying to encourage schools to work with often secular counterparts in the same areas so that they can properly share the assets, resources and expertise that they have and consolidate the educational opportunities within particular districts will be lost due to a fear of diluting the religious ethos and character of a school.
The right reverend Prelate was right to raise the issue of an exit strategy. Schools need to know how they can get out of federated status if those arrangements do not work out in the way that they hoped. It would do much good if the Minister were able to give assurances on those matters. I know that she would not wish to see the dilution of the religious ethos of schools; she has made that clear throughout the proceedings on the Bill. If the assurances that the right reverend Prelate has asked for can be given and placed on the record, schools could enter into sensible proposals with some degree of enthusiasm. If those assurances cannot be given, I fear that the right reverend Prelate is right and that schools will decline to take part in federated status.
Lord Dearing: My Lords, I hope that I may add a few words on the exit strategy which concerns me. Let us consider, for example, a voluntary-controlled school with only two foundation governors. The majority of the non-foundation governors could take the school into a federation. If the school is then unhappy with that and appeals to the governing body of the federation, a decision will lie with the federation. There seems to be no exit. Some federations will not work. People can be peculiar. If people behave in a peculiar fashion, federations will not work. There is
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wisdom in providing some mechanism for a participant to withdraw other than the final decision lying with the governing body of a federated institution.
Baroness Ashton of Upholland: My Lords, I agree with the noble Lord, Lord Dearing, that people can be peculiar. Of course, he is never ever peculiar!
I start by emphasising that I appreciate the concern of the right reverend Prelate the Bishop of Blackburn and that of the noble Lord, Lord Alton, that federations should in no way diminish the religious ethos of schools of a religious character. As the noble Lord, Lord Alton, rightly said, the Government are equally committed to ensuring that the religious ethos of schools with a religious character should be preserved.
As regards an exit strategy, perhaps I may provide some reassurance on the position for schools that wish to leave a federation. If any stakeholder group, including foundation interests, trustees or the diocesan interests, petition the federated governing body for their school to leave their federation, but have their petition turned down, they will be in a position to refer the matter to the Secretary of State under the provisions of Sections 496 and 497 of the Education Act 1996, if the governing body has failed to fulfil a statutory duty or acted unreasonably.
If the Secretary of State is required to arbitrate on whether a school should or should not leave a federation, she will look at each case on its merits. One of the factors she will consider is whether the religious ethos of a school, as stated in the school's trust deed, is being undermined or would be likely to be undermined by not leaving the federation. I can say clearly that we regard the preservation of the religious character of schools as an important matter. In this, as in any other, determination by the Secretary of State, we would seek to ensure that the duties to preserve and develop the character of schools are fulfilled.
It is important to note that where the religious character of a school has been adversely affected, the Secretary of State would be in a position to direct the governing body of the federation to take steps to rectify that position as they would be under a legal duty to uphold the school's religious character as set out in any trust deed and the ethos statement in the instrument of government.
I turn to staffing. I fully understand that the sharing of staff within a federation is an area of concern to the Churches. However, I emphasise that one of the major advantages of federation is the ability to facilitate the sharing of staff resources to the maximum benefit of all schools within the federation.
We will stipulate that if schools wish to have a policy to share staff within the federation, that must be included as part of the proposals on which they will consult extensively with all interested parties before any decision to federate is taken. I have previously stated that if it is proposed to share staff after schools

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have entered a mixed category federation, voluntary-aided foundation governors can decide whether the voluntary-aided school should be involved in those shared staffing appointments.
I understand the importance of voluntary-controlled and foundation schools with a religious character having the option, as the right reverend Prelate said, of utilising Section 60(4) of the School Standards and Framework Act 1998, which allows the governing body to have regard to an individual's ability and fitness to preserve and develop the religious character of the school when appointing a head. In the event of there being a "same category federation" involving only voluntary-controlled or foundation schools of a religious character, schools will indeed have open to them the option of utilising Section 60(4). However, certain difficulties could arise in the event of voluntary-controlled and foundation schools with a religious character being involved within mixed category federations with schools without a religious character. I hope that noble Lords understand that European law will not allow us to extend what would be described as religious discrimination to schools without a religious character. Therefore, the most sensible solution to me to meet the requirements of voluntary-controlled and foundation schools, while ensuring that we remain in compliance with European law, is the concession that I am about to offer.
I intend that if it is proposed that schools within a mixed category federation should appoint shared staff after federation has taken place, we will allow representatives of voluntary-controlled and foundation schools of a religious character who will sit on the federated governing body to be able to veto the involvement of their school in the appointment of any shared staff, including, of course, head teachers. If representatives take that position, they would effectively be stating that they wish to keep the staffing arrangements for their particular school separate.
I am committed to ensuring that where schools wish to keep their staffing arrangements separate, staff will continue to be appointed to each school within the federation on the same basis as they would have been if the schools had remained separate. That will ensure that voluntary-controlled and foundation schools of a religious character, within a mixed category federation, will be able to appoint a head for their school in accordance with Section 60(4). I hope and believe that that will meet the needs of the right reverend Prelate.
We will put in place arrangements to maximise benefit for schools that wish to share staff by making the process as straightforward as possible and allowing governing bodies to think strategically in terms of allocation of staff resources throughout the federation. I recognise the importance of certain safeguards being in place for the appointment of new shared staff to schools within a mixed category federation. That is why we will allow for voluntary-aided foundation governors to be able to veto the appointment of a particular individual as head to their
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school (whether shared or not), if they feel that such an appointment would be detrimental to maintaining the religious character of their school.
I hope that the right reverend Prelate—and other noble Lords—will see from the detailed nature of this reply that I am as anxious as he is to ensure that the religious character of schools within mixed category federations is maintained. I also hope that he is reassured by the safeguards.
No school will be required to join a federation. Where schools with a religious character have concerns about preserving their religious ethos, the confederation model, which will allow schools to retain their individual governing bodies, will provide an alternative model for collaboration. We will of course be consulting extensively on draft regulations and guidance on federations with all interested parties. Before that stage is reached I will ensure that officials have further discussions with the Churches It will be our firm principle that federation should not in any way undermine the religious character of schools. I hope that in the light of those assurances the right reverend Prelate will be prepared to withdraw his amendment.
Lord Alton of Liverpool: My Lords, before the Minister concludes, I point out that she has characteristically gone a very long way to try to address many of the arguments that have been advanced; many of us are grateful to her for that. Why is she opposed to the principle—or at least she has not dealt with it in her summing up—of a governing body of a school that is in a federation simply saying, following my noble friend's earlier point, "The relationships are not working and we now wish to leave the federation"? Why should not it be able to do that?
Baroness Ashton of Upholland: My Lords, it can indeed say that within the federation model. The issue is that schools that choose to adopt that model have one governing body, so the appeal is in a sense made to itself. If the body decides that it does not wish to let the school go, by whatever route is chosen—the obvious route involves a vote—I have put in place an appeal mechanism. The diocesan board or the governors involved could appeal to the Secretary of State. I have added on to the process of wishing to leave the federation an additional safeguard to ensure that that is in place.
The Lord Bishop of Blackburn: My Lords, I am immensely grateful to the noble Baroness for her detailed reply and for addressing so many of the concerns that I raised. For me, this is a matter of vision. I want federations—and confederations, for that matter—to have a variety of schools within them. That is the prize. What may appear to some to be rather nit-picking amendments about this or that—I do not much like getting into such debates—are needed in order to enable the wider vision of what might happen, particularly in rural areas, to happen. I am enormously grateful to the Minister, particularly

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for her reply on the exit strategy. That is a critical area for those of us who would like to encourage at least some pilot projects of this kind. I am grateful for the answers on staffing and the vetoes that will appear in regulations. I hope that the federations will be based on such a firm foundation of collaboration and co-operation that vetoes will not need to operate. However, putting them in place can be the basis that ensures that they do not operate because people have a security from which they might work. I am enormously grateful.
Before I withdraw the amendment—it is my last amendment—I pay tribute to and thank the Minister, her ministerial colleagues and the officers of the department for the gracious and kindly way in which they have dealt with me. I am a new boy to this process. I am particularly grateful to the Minister for her open-door policy, which has been extremely helpful in aiding us to construct a Bill which will, I hope, lead to the advancement of better education in our country. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [Limits on power to provide community facilities etc.]:
Baroness Ashton of Uphollandmoved Amendment No. 18:
Page 17, line 26, leave out from "body" to "governing" in line 27 and insert—

"(a) shall consult—

(i) the local education authority,

(ii) the staff of the school, and

(iii) the parents of registered pupils of the school,

(b) where the proposed exercise of the power would affect registered pupils of the school and the governing body consider it appropriate in view of their age and understanding to consult all or some of them, shall consult the registered pupils or such of them as the governing body consider it appropriate to consult, and

(c) shall consult such other persons as the governing body consider appropriate.

(5) In exercising the power under section 26(1) or consulting under subsection (4), a"
The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 19.
Amendment No. 18 delivers the commitment that I made to, I believe, the noble Baroness, Lady Sharp, on Report, to extend the duty of governing bodies to consult parents and school staff as well as LEAs before providing community services and facilities on school premises.
While accepting the view of the noble Baroness and other noble Lords that parents and staff should be consulted, we think that the list of those who should be consulted should be extended to include pupils and any other persons the governing body thinks it appropriate to consult.
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Extending the ambit of consultation on the face of the Bill rather than limiting it to parents and school staff recognises the significant interest of other groups who might be involved in, or affected by, the provision of community services on school premises. We will be issuing guidance later this year to support schools and other interested parties in developing these services. The guidance will, among other things, help schools to manage the consultation process in a sensitive and unburdensome way.
Amendment No. 19 simply removes phrasing that would otherwise duplicate that in the previous amendment. I beg to move.
Baroness Walmsley: My Lords, I thank the Minister for tabling the amendment, which I believe is in response to one tabled by these Benches concerning additional consultation with appropriate people. A number of such amendments have been accepted by the Minister during the passage of the Bill, for which we are grateful. We are also grateful to the NUT and in particular Emily Evans, for the assistance given in tabling such amendments, which we believe improve the Bill.
On Question, amendment agreed to.
Baroness Ashton of Uphollandmoved Amendment No. 19:
Page 17, line 29, leave out "about the exercise of the power"
On Question, amendment agreed to.
Clause 29 [Governors' reports and other information]:
Baroness Ashton of Uphollandmoved Amendment No. 20:
Page 18, line 36, leave out subsection (3) and insert—
"(3) The governing body of a maintained school shall provide the local education authority with such reports in connection with the discharge of the functions of the governing body as the authority may require (either on a regular basis or from time to time) for the purposes of the exercise of any of the authority's functions.
(4) The head teacher of a maintained school shall provide the governing body or (as the case may be) the local education authority with such reports in connection with the discharge of his functions as the governing body or the authority may require (either on a regular basis or from time to time) for the purposes of the exercise of any of their functions.
(5) Where a requirement under subsection (4) is imposed on the head teacher by the authority—

(a) the authority shall notify the governing body of that requirement, and

(b) the head teacher shall give the governing body a copy of any report made by him in complying with it."

The noble Baroness said: My Lords, in moving Amendment No. 20 I shall speak also to Amendment No. 21. The Government have listened to concerns about their intentions expressed on Report, and I shall speak now to two government amendments tabled in response. Amendment No. 20 replaces the regulation-making power in subsection (3) of Clause 29 by the wording currently set out in Section 42(3), (4) and (5) of the School Standards and Framework Act 1998. It is clearly essential in a situation where schools have

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greater autonomy that governing bodies and local education authorities should have the necessary information they need, much of which can come only from the school, to undertake their statutory duties.
The regulation-making power currently in the Bill would have allowed the Secretary of State to specify precisely what information should be provided, which the current 1998 Act provision does not. However, we listened carefully to the points made on Report by the noble Baroness, Lady Blatch, about those provisions. As indicated on Report by my noble friend Lord Davies, we reconsidered the issue and have concluded that we do not need a regulation-making power to prescribe precisely what information governing bodies or head teachers should provide. The present legislation, which rests on the recipient party demonstrating that it needs specific information for a particular purpose to fulfil a statutory function, appears to be working well. On that basis we are content to replicate it in Clause 29. That fulfils the commitment we made on Report.
I turn to Amendment No. 21. On Report I emphasised my commitment to putting in place a range of options which will provide a spectrum for strategic collaboration between schools. That will range from governing bodies delegating some of their functions to a joint committee, ceding some of their responsibilities to an overarching body—hence the notion of a confederation—or deciding to disband their individual governing bodies and come together under a single federated governing body. It will be entirely up to governing bodies which of those alternative models of governance, if any, they use. We do not wish to nudge schools one way or the other. I am happy to reiterate that a confederation option under Clause 30 is as acceptable as schools federating under a single governing body or, indeed, for schools to pursue none of those.
I am committed to ensure that each of those options allowing for strategic collaboration is presented to schools as being of equal value and importance. It is for schools, in the light of their particular circumstances and needs, to choose which option if any best meets their needs at any one given point in time. Indeed, as the circumstances of schools change, they may wish to alter the form of strategic collaboration for which they opt. It is important that schools recognise that they have that flexibility and a range of different options open to them.
I intend to start as I mean to go on. Therefore, I shall move that Clause 30, on the collaboration of schools, shall follow on directly from those on federations. It seems entirely sensible to me that clauses allowing for strategic collaboration of schools should be placed together in the Bill and given equal importance and visibility. In the light of those explanations, I beg to move.
Baroness Blatch: My Lords, I am pleased to respond to the noble Baroness and thank her for removing a second set of regulations. I am grateful to her and hope that the amendment will be passed.
Baroness Sharp of Guildford: My Lords, I add my thanks to the noble Baroness for both amendments, which improve the Bill substantially. I am delighted by her acceptance of my concept of "confecleration" as distinct from "federation", which appeared in the Bill. I have learnt from this exercise that a clause heading can be changed without tabling an amendment. I objected to the heading of what is now Clause 30 of the Bill; that is, Arrangements for joint discharge of functions. That has been changed to Collaboration between schools, and now appears just after Clause 25 on federations. That is precisely what I wanted to happen. I thank the Minister for that.
On Question, amendment agreed to.
Clause 30 [Collaboration between schools]:
Baroness Ashton of Uphollandmoved Amendment No. 21:
Transpose Clause 30 to after Clause 25.
On Question, amendment agreed to.
Clause 40 [Determination of specified budgets of LEA]:
Baroness Walmsleymoved Amendment No. 22:
Leave out Clause 40.
The noble Baroness said: My Lords, in moving Amendment No. 22 I shall speak also to Amendments Nos. 23 and 24, which I have asked to be grouped with it. I hope that the late grouping does not inconvenience those noble Lords I was unable to notify, All three amendments concern the funding of schools and who makes decisions about that.
Amendment No. 22 refers to Clause 40, which I propose should be deleted from the Bill. Noble Lords will note that all three amendments concern deleting whole clauses from the Bill and may be subject, therefore, to the same criticism as that made by the noble Lord, Lord Carter, on Amendments Nos. 7, 11 and 12 tabled by the noble Baroness, Lady Blatch. If that is the case, I point out that had the Government notified these Benches of their intention to object to that kind of procedure, we might have changed our strategy earlier on in the Bill and perhaps even changed our normal practice of not calling Divisions in Committee.
However, the contents of this clause means that the Government would decide how much a local authority needs in order to run its centralised functions and how much should go directly to schools by the new funding arrangement of splitting the spending assessment into those two sections. Once the LEA has received the two assessments, the clause provides that the Secretary of State must be informed how much the schools budget will be for the following year, often before decisions

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have been made by the LEA about other budget areas for which the authority has responsibility. That matter gave us concern in earlier debates.
Important issues—for example, how much needs to be spent on social services and transport—may not have been decided by the time that information needs to be given. Then, the unelected schools forum will be the body which decides how much can be deducted from schools budgets for various purposes determined by regulations.
At earlier stages in the Bill we made the case that decisions of that kind on the spending of public money should be made by a locally elected body which is accountable at the ballot box. In her reply on Report the noble Baroness spoke of "funding fog" and said that it was unnecessarily difficult to judge whether an education authority's spending is too low, needlessly high or just about right, and that this measure is necessary to correct that.
We cannot accept the argument put forward by the noble Baroness. We believe that it is for the LEA to judge such matters and for voters to decide what to do about it if they think the LEA has got it wrong. The voters will certainly have enough information to make a reasoned judgment. Our schools are the most inspected and our children the most frequently and rigorously measured and assessed in the whole of the developed world. Voters have Ofsted reports, SATs, GCSE results and league tables to help them judge whether an LEA is doing a good job. We should then let them make their judgment in the ballot box.
Local authorities are having their hands tied on far too many issues under this Government. There is no trust of local government and it is time that someone said, "Stop, enough". That is what I say today. That is why we need to delete a whole clause. It is a matter of fundamental principle. We must not continue to put LEAs into a straitjacket and then blame them for the outcome. We have a choice between bureaucracy and democracy. I choose democracy.
Amendment No. 23 proposes to delete Clause 41 from the Bill. That clause gives the Secretary of State the power to intervene and insist that LEAs give a certain minimum budget to schools every year, with no regard to what they might have done the year before or even for many years before. The Minister is aware that many LEAs have for many years given a great deal more to schools than was allowed for by the standard spending assessment. Of those few which have not, a very small number have had a poor Ofsted report. As usual, the Government are taking a very large hammer to crack a very small nut.
An LEA should be free to decide that, in any one year, it needs to retain a little of the school budget for central services without interference from the Secretary of State, especially if it subsidised the school budget the year before. It boils down to this: do we want further central control of the powers of LEAs, or do we not? I think that we do not.
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Amendment No. 24 seeks to delete Clause 42 from the Bill. Clause 42 sets up unelected and unaccountable bodies called "schools forums", which would be allowed to make decisions about the deployment of public money when there is a perfectly good elected body—the LEA—which is better equipped to do it. The schools forum would be the latest in a line of costly education quangos. It would not necessarily be representative, consisting of around 50 stakeholders. Those local authorities that exhibit best practice at present do a much better job of consulting on school budgets than a schools forum, as envisaged, could ever accomplish.
On the second day of the Report stage, the Government stated that these forums would cost schools about £200 per school per annum—an amount that is not inconsiderable given the enormous pressure on school budgets. But the main reason we object to these bodies is the principle that they would be unelected and unaccountable to the electorate at the ballot box. The Minister gave a short list on Report of the matters on which the schools forums could make decisions under the provisions of the Bill. However, those are the subject of regulations that could easily be added to by more significant areas of expenditure at a later stage. This is what worries us: it could be library services today, and who runs schools tomorrow. Although the Government are still consulting on how the forums would work, to me, that is just like consulting on the arrangement of the deck chairs on the "Titanic". The whole concept of schools forums is fundamentally unsound.
There is really no reason to elaborate any further on the matter. We have made the arguments many times and in many different ways during the course of the passage of the Bill. Unfortunately, the Minister has so far not been able to counter our concerns in any satisfactory way. I beg to move.
Baroness Blatch: My Lords, I have opposed schools forums at each stage of the proceedings on the Bill. They will be the latest in a line of costly quangos. On Report on 19th June, the Minister said (at col. 808 of the Official Report) that the cost of such quangos was based on them "meeting three times a term". I have to point out that that amounts to four-and-half days per teacher per year; that 10 teachers would mean 45 days out of school; and that 20 teachers in an average-to-large LEA would mean 90 days out of school. If you multiply that by the number of LEAs, we would have yet more teachers out of school, away from the classroom, and, therefore, not teaching children. That is something that I simply cannot support.
I should add that there are those who believe that forums will in fact mean more money going into schools. In practice, I am afraid that that would not be the outcome. LEAs would need to hold money back to fund such bodies, as the Minister said. The Government could make a very real difference by not imposing yet more quangos and by releasing some of the central funding that they hold back to provide more money for schools.

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Finally, the London/Brent authority has already sent out a form asking for volunteers to sit on the schools forums. The authority has said that the forum is not a decision-making body, which is wrong. It is a decision-making body. It has said that there will be around 20 members, half of whom will be teachers—so we are talking about the numbers of days out of school to which I referred earlier. On the question of how the forum will operate, who chairs it, and how it conducts its business, the authority states that that will largely be a matter for the forum itself to decide. That is equally not true: the Bill will specify that through regulation. If the forums are allowed to decide how they operate, why cannot the same apply to governing bodies? That is a matter about which we argued at an earlier stage.
These forums are quangos. They are unnecessary. I do not believe that they will enhance the experience of children in the classroom. I support the amendment.
6.45 p.m.
Baroness Ashton of Upholland: My Lords, I take the point that both the noble Baroness, Lady Sharp, and the noble Baroness, Lady Blatch, do not like schools forums. However, I shall still endeavour to convince them.
I shall begin by speaking to Amendment No. 22. I listened most carefully to what the noble Baroness, Lady Walmsley, said in her introductory remarks. I have to say that I am still unclear as to what the noble Baroness has against the clause that leads her to wish to get rid of it in total. I understand her concerns. As the noble Baroness rightly said, she has raised the issues of the role of schools forums and the reserve power at each stage of the Bill.
Although schools forums and the reserve power make brief appearances in the clause, they are not the main purpose of the clause. Most of the clause seeks to do something that I hope we all agree is worth doing, whether or not we have the forum or the reserve power. Above all, it is about transparency. We believe that we have already achieved a great deal in this respect. LMS—the funding system that we inherited—was based on the general schools budget, which was rather narrowly defined. The financial statements that LEAs produced under LMS gave a breakdown of the general schools budget, but it was difficult to see the GSB in its wider context because the available information on LEAs' overall education budgets was contained in a return collected by what was then the Environment Department, and the two returns were not well dovetailed.
The funding system that we introduced in 1999 is based on the local schools budget, which is broader than the GSB. Each education authority now has to produce a single financial statement that sets the LSB in the context of its education revenue budget as a whole. In other words, we now have a much better basis for judging how far the money provided by government is getting through to schools. Nevertheless, we believe that there is scope to reduce still further what I have described as a "funding fog".
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The school funding system is based on the local schools budget and the LEA funding system is based on the education SSA. Both are broad in their coverage, and yet their coverage is not the same. Moreover, as noble Lords will be aware, there are concerns about the fairness and the transparency of the SSA. Part of the problem is that the SSA has perhaps been trying to assess too much at once. That is why we intend to introduce two spending needs assessments instead of the present SSA. One will relate essentially to the cost of provision for pupils, and the other will cover the essential functions of the LEA. The assessments will be introduced under local government legislation.
However, corresponding to the assessments, we shall have the separate school and LEA budgets. The key purpose of Clause 40 is to bring in these two budgets in place of the present local schools budget. LEAs' expenditure on front-line provision can then be bench-marked against a spending needs assessment that relates specifically to front-line provision.
We believe that that will make for greater clarity and make it easier for the spending plans of education authorities to be scrutinised in an informed way. I had hoped—indeed, I would have expected—that we could agree on that as something that we would all wish to achieve. I should add that, in developing such proposals, the department has worked closely with the Local Government Association and other relevant interests. There has been debate around the detail, and I have no doubt that there will be more, but the LGA welcomes the principle of separate budgets and assessments as a means of improving clarity.
Therefore, on Clause 40, I hope that noble Lords will not allow their reservations about schools forums or the reserve power to stand in the way of what the bulk of the clause is designed to achieve. There will be opportunities to address these concerns, to which I shall refer later. But to reject the whole clause on the basis of such reservations would, in a sense, be to allow the tail to wag the dog. On the basis of wanting to have greater transparency and ability for informed scrutiny, which must be a desire of Liberal Democrats, I hope that the noble Baroness will feel able to withdraw this amendment.
I turn to Amendment No. 23. I should like to make it clear that the clause is purely about the possibility of the Secretary of State setting a minimum budget for the schools budget in an area where the LEA has made very seriously inadequate proposals. Noble Lords have been sceptical about the assurances that we have given to the effect that the reserve power will be used sparingly. When the clause was debated in Committee in another place, my honourable friend the Minister for School Standards gave two assurances that I wish to repeat at this point. The first was that the reserve power would definitely not be used where an authority passed on the increase in its school funding assessment to its schools budget. That is a very clear statement, and one that I am very happy to repeat. But the second assurance was also important: even if the increase in the school funding assessment was not passed on in full, it would not necessarily follow that the reserve

287
power would be invoked. As we make clear in the Explanatory Notes to the Bill, an authority's spend relative to its funding assessment is another of the factors we would consider before exercising the reserve power. If a local education authority spent well above its funding assessment and failed to pass on only a small proportion of the increase, we would not exercise this power.
As I have previously explained, there will be a dialogue with a local education authority if we propose to set a minimum level of budget for an authority's schools: such an authority would of course be able to set out for us the full range of circumstances which led it to take a decision not to pass on the increase in school funding to its schools.
The reserve power is not about the vast majority of authorities who share the Government's desire to see schools funded properly. They will have the freedom to do that. It is about a situation we expect to arise only rarely, where an education authority has not passed on an increase to its schools and by so doing it causes those schools to spend time on managing budget cuts rather than improving standards for our school children.
I make no apology for wanting to avoid that situation. This year 18 education authorities failed to pass on the increase in education SSA to their education budgets. We would not take action against all of those authorities. Many achieved reasonable increases in their school budgets in spite of their failure to passport. But some did not: in one the increase in school budgets was only 2.4 per cent. That is not enough to meet the teachers' pay award, still less to increase school standards. It is that very specific sort of problem that we want to address with the reserve power. I urge noble Lords to withdraw this amendment; it would be a vote in these exceptional circumstances to lower school budgets.
With regard to schools forums, the consultation exercise which we launched in May has reached its end and we have been able to consider the results. There were just under 200 responses. One thing that was immediately apparent was general support for the concept behind schools forums—that of partnership and consultation on the management of the schools budget to be created under Clause 42. So we believe that we were right to put schools forums into the Bill and right to persist with them. In the words of one governing body,
"the establishment of a schools forum on a statutory basis is absolutely necessary as a part of the new framework of school funding and it would be a major breach of faith if the proposal were to be dropped".
The debate on schools forums has centred around two main issues; that is, the functions of the forums and the way in which they have been constituted. Having considered the responses to the consultation exercise, we do not believe it is necessary to make any changes to the proposed functions of the forums. Though respondents naturally had different views on the details, there was a fair measure of agreement that the four main functions we envisage—consultation on
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the school funding formula; advising on specified issues in relation to the schoolsbudget; advising on contracts; and, finally, making decisions on the delegation of a very limited number of expenditure items—are the appropriate tasks for schools forums. It is the last of those which has perhaps aroused most anxiety.
I want to repeat that this is a very limited decision-taking role: there is no intention to extend it, and I emphasise that the forum will not—I repeat, will not—have any control over the amount of expenditure on specific items or the total size of the schools budget. Many LEAs expressed reservations about this power and we shall consider carefully the details of its operation.
In considering the results of the consultation exercise we have also looked at what has been said about the way in which forums are to be constituted and are to function. It is on this that a much greater divergence of opinion is evident. Although, as I said, nearly all respondents support the principle of schools forums, about half expressed doubts about their introduction in the form envisaged in the consultation paper, with a nationally determined framework for membership.
There was considerable concern that existing local arrangements which have worked well—a point put forward by the noble Baroness, Lady Blatch—and in some cases been commended by Ofsted, would be replaced by forums and local partnership would not be helped. In some areas there is the prospect of duplicated consultative arrangements. What is wanted by a lot of respondents, including most LEAs, is much more flexibility to order schools forums in a way which suits local circumstances and takes account of existing bodies. I acknowledge that that concern has been expressed in this House, and indeed in another place.
We do not propose any amendments to the Bill in consequence. Forums will still have schools members and non-schools members. However, I am able to announce some significant changes, which respond particularly to concerns raised in this Chamber, notably by the noble Baroness, Lady Blatch. We have taken a hard look at the regulations governing the way forums are to be constituted—circulated in draft—and we now intend that when they are made they should give much more discretion to authorities. They would have to include both governors and head teachers but the balance would be at LEA discretion and the election method locally determined. The minimum size would be raised but there would be no maximum; and there would be a requirement to ensure exact proportionality between school phases. The maximum percentage of non-schools members would be reduced to 20 per cent, and that could include elected members of the LEA. The LSC would only have observer status. The quorum requirement would be relaxed a little. Costs would be charged to the schools budget but other provisions on costs would be settled locally.
We would of course wish to give guidance on a range of issues but those changes would enable many LEAs to transmute local bodies into statutory forums; where

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there is no suitable body already, it could be created to suit local circumstances. I believe that that meets the concerns of the noble Baroness, Lady Blatch, that good existing local practice is not damaged by this provision.
Finally, many LEAs have said that they are concerned about timescale. We therefore intend that the date for implementation be put back to 15th January 2003. That would still leave scope for forums to be involved in discussion of budgets for 2003–04, and in any case the changes I have outlined above will make implementation easier.
I hope that from what I have said and the changes we are proposing, that we are demonstrating that we are ready to listen and make changes. Schools forums are still an integral part of our plans for the new funding system; we want them to work and so we are taking a pragmatic view of what is needed to make them work. I hope that in the light of what I have said the noble Baroness will feel able to withdraw her amendment.
Baroness Walmsley: My Lords, I thank the Minister for her answer. On Amendment No. 22, unfortunately it is still a gross offence to suggest that the Government should be able to tell LEAs how they should divide their funding and I am still not happy with her answer. On Amendment No. 23, though the reserve powers would not often be used, unfortunately they still exist and may be used.
Turning back briefly to Amendment No. 22, though we are in favour of transparency, that is not the major issue. The involvement of schools forums at all, being unallocated, makes us unhappy with Clause 40. I am grateful to the Minister for the sweeping changes she is suggesting to the composition of the schools forums. However, she has not been able to address our fundamental problem; that is, that they are unelected and unaccountable. I shall move Amendment No. 24 when we come it. But at this point I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 41 [Power of Secretary of State to set minimum schools budgets]:
[Amendment No. 23 not moved.]
Clause 42 [Schools forums]:
Baroness Walmsley Baroness Walmsley moved Amendment No. 24:
Leave out Clause 42.
The noble Baroness said: My Lords, I wish to test the opinion of the House. I beg to move.
6.58 p.m.
On Question, Whether the said amendment (No. 24) shall be agreed to?
Their Lordships divided: Contents, 161; Not-Contents, 136.

Division No.3

CONTENTS

Aberdare, L.

Hylton, L.

Addington, L.

Jacobs, L.

Alderdice, L.

James of Holland Park, B.

Astor, V.

Jopling, L.

Attlee, E.

Kimball, L.

Avebury, L.

Knight of Collingtree, B.

Barker, B.

Laird, L.

Beaumont of Whitley, L.

Lamont of Lerwick, L.

Black of Crossharbour, L.

Lang of Monkton, L.

Blackwell, L.

Lester of Herne Hill, L.

Blaker, L.

Lindsay, E.

Blatch, B.

Linklater of Butterstone, B.

Boardman, L.

Livsey of Talgarth, L.

Bowness, L.

Lucas, L.

Bradshaw, L.

Luke, L.

Brigstocke, B.

Lyell, L.

Brougham and Vaux, L.

McColl of Dulwich, L.

Burnham, L.

MacGregor of Pulham Market L.

Buscombe, B.

Byford, B.

MacLaurin of Knebworth, L.

Campbell of Alloway, L.

McNally, L.

Carlisle of Bucklow, L.

Maddock, B.

Carnegy of Lour, B.

Mancroft, L.

Chadlington, L.

Mar and Kellie, E.

Cement-Jones, L.

Marlesford, L.

Colwyn, L.

Masham of Ilton, B.

Cope of Berkeley, L.

Methuen, L.

Craigavon, V.

Michie of Gallanach, B.

Crickhowell, L.

Miller of Chilthorne Domer, B.

Cumberlege, B.

Monro of Langholm, L.

Dahrendorf, L.

Montagu of Beaulieu, L.

Dean of Harptree, L.

Montrose, D.

Dholakia, L.

Mowbray and Stourton, L.

Dixon-Smith, L.

Moynihan, L.

Eccles of Moulton, B.

Murton of Lindisfarne, L.

Eden of Winton, L.

Newby, L.

Elles, B.

Newton of Braintree, L.

Elliott of Morpeth, L.

Noakes, B.

Elton, L.

Northbrook, L.

Falkland, V.

Northover, B.

Fearn, L.

Norton of Louth, L.

Flather, B.

O'Cathain, B.

Fookes, B.

Oakeshott of Seagrove Bay, L.

Forsyth of Drumlean, L.

Onslow, E.

Fowler, L.

Park of Monmouth, B.

Fraser of Carmyllie, L.

Parkinson, L.

Gardner of Parkes, B.

Peel, E.

Garel-Jones, L.

Perry of Southwark, B.

Geraint, L.

Phillips of Sudbury, L.

Glenarthur, L.

Pilkington of Oxenford, L.

Glentoran, L.

Platt of Writtle, B.

Goodhart, L.

Razzall, L.

Goschen, V.

Reay, L.

Greaves, L.

Redesdale, L.

Greenway, L.

Rennard, L.

Hamwee, B.

Renton, L.

Hanham, B.

Roberts of Conwy, L.

Harris of Richmond, B.

Rodgers of Quarry Bank, L.

Hayhoe, L.

Roper, L.

Henley, L.

Rotherwick, L.

Higgins, L.

Russell, E.

Hodgson of Astley Abbotts, L.

St John of Fawsley, L.

Hogg, B.

Sandberg, L.

Holderness, L.

Scott of Needham Market, B.

Home, E.

Seccombe, B.

Howe, E.

Selkirk of Douglas, L.

Howe of Aberavon, L.

Selsdon, L.

Howe of Idlicote, B.

Sharman, L.

291

Sharp of Guildford, B. [Teller]

Thomson of Monifieth, L.

Sharpies, B.

Trefgarne, L.

Shaw of Northstead, L.

Trumpington, B.

Shrewsbury, E.

Tugendhat, L.

Smith of Clifton, L.

Vivian, L.

Stevens of Ludgate, L.

Waddington, L.

Stewartby, L.

Wakeham, L.

Strange, B.

Wallace of Saltaire, L.

Strathclyde, L.

Walmsley, B. [Teller]

Swinfen, L.

Watson of Richmond, L.

Taverne, L.

Weatherill, L.

Thomas of Gwydir, L.

Wigoder, L.

Thomas of Walliswood, B.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Haskel, L.

Ahmed, L.

Hayman, B.

Alli, L.

Hilton of Eggardon, B.

Alton of Liverpool, L.

Hogg of Cumbernauld, L.

Amos, B.

Hollick, L.

Andrews, B.

Hollis of Heigham, B.

Archer of Sandwell, L.

Howells of St. Davids, B.

Ashton of Upholland, B.

Howie of Troon, L.

Bach, L.

Hoyle, L.

Barnett, L.

Hughes of Woodside, L.

Bassam of Brighton, L.

Hunt of Chesterton, L.

Berkeley, L.

Hunt of Kings Heath, L.

Bernstein of Craigweil, L.

Irvine of Lairg, L. (Lord Chancellor)

Billingham, B.

Blackburn, Bp.

Islwyn, L.

Blackstone, B.

Janner of Braunstone, L.

Bragg, L.

Jay of Paddington, B.

Brennan, L.

Jones, L.

Brett, L.

Judd, L.

Brooke of Alverthorpe, L.

King of West Bromwich, L.

Brookman, L.

Kirkhill, L.

Brooks of Tremorfa, L.

Layard, L.

Burlison, L.

Lea of Crondall, L.

Campbell-Savours, L.

Levy, L.

Carter, L.

Lipsey, L.

Chandos, V.

Listowel, E.

Christopher, L.

Lockwood, B.

Clark of Windermere, L.

Lofthouse of Pontefract, L.

Clinton-Davis, L.

Macdonald of Tradeston, L.

Corbett of Castle Vale, L.

McIntosh of Haringey, L. [Teller]

Crawley, B.

Currie of Marylebone, L.

McIntosh of Hudnall, B.

Darcy de Knayth, B.

MacKenzie of Culkein, L.

Davies of Coity, L.

Mason of Barnsley, L.

Davies of Oldham, L.

Massey of Darwen, B.

Dean of Thornton-le-Fylde, B.

Merlyn-Rees, L.

Desai, L.

Milner of Leeds, L.

Dixon, L.

Mitchell, L.

Dormand of Easington, L.

Morgan of Huyton, B.

Dubs, L.

Morris of Aberavon, L.

Eatwell, L.

Morris of Manchester, L.

Elis-Thomas, L.

Nicol, B.

Evans of Parkside, L.

Orme, L.

Evans of Temple Guiting, L.

Parekh, L.

Farrington of Ribbleton, B.

Patel, L.

Faulkner of Worcester, L.

Patel of Blackburn, L.

Filkin, L.

Pendry, L.

Fitt, L.

Peston, L.

Fyfe of Fairfield, L.

Pitkeathley, B.

Gale, B.

Plant of Highfield, L.

Gibson of Market Rasen, B.

Radice, L.

Gilbert, L.

Ramsay of Cartvale, B.

Golding, B.

Rea, L.

Goudie, B.

Rendell of Babergh, B.

Gould of Potternewton, B.

Richard, L.

Graham of Edmonton, L.

Rooker, L.

Grenfell, L.

Sainsbury of Turville, L.

Grocott, L. [Teller]

Sawyer, L.

Hardy of Wath, L.

Scotland of Asthal, B.

Harrison, L.

Serota, B.

292

Sheldon, L.

Varley, L.

Simon, V.

Warner, L.

Stone of Blackheath, L.

Warwick of Undercliffe, B.

Taylor of Blackburn, L.

Whitaker, B.

Thornton, B.

Whitty, L.

Tomlinson, L

Wilkins, B.

Turnberg, L.

Williams of Mostyn, L. (Lord Privy Seal)

Turner of Camden, B.

Williamson of Horton, L.

Uddin, B.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
7.10 p.m.
Clause 45 [Admission Forums]:
Baroness Blatch Baroness Blatch moved Amendment No. 25:
Page 30, line 9, after "shall" insert "if requested by a majority of governing bodies of maintained schools in their area".
The noble Baroness said: My Lords, I shall be brief. If admission forums are thought to be a good idea by schools in an area and a majority of schools deem that there should be a forum, they should determine whether to have one. They should not be imposed on every local authority because many already have perfectly workable and acceptable arrangements. I beg to move.
Baroness Ashton of Upholland: My Lords, we debated the amendment both in Committee and on Report. Of course, I am happy to explain our views again. We want the school admissions process to be even better for our parents and children. Our proposal for mandatory admission forums is one of the ways that we know will help to achieve that aim.
We strongly believe that every area will benefit from having a forum and that the forum's role will be valuable. I make clear to the noble Baroness, Lady Sharp, that I am here talking about admission forums. Many people have voiced the view that admission forums would have greater impact if every area had to have one and admission authorities were required to have regard to their advice. There was strong support for mandatory admission forums among local education authorities. In consultation on school admissions, 91 per cent were in favour of them to some extent. Schools were also strongly in favour—83 per cent of head teachers agreed with them to some extent.
We are building on the base established by those education authorities that have already set up successful admission forums by providing for mandatory admission forums with a clear and influential role. We believe wholeheartedly that mandatory admission forums will improve the admission process. They will ensure real discussion and consensus between the key admission partners in an education authority area, which is important. We do not want every governing body to have to debate, vote and then make a request for a forum to be set up when we have already established through

293
consultation evidence of support for them. On that basis, I hope that the noble Baroness, Lady Blatch, will decide to withdraw her amendment.
Baroness Blatch: My Lords, if the Government believe in imposition, duplication, incurring greater cost and unnecessary time and energy being used on the proposal, so be it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Ashton of Uphollandmoved Amendment No. 26:
After Clause 64, insert the following new clause—
"ARRANGEMENTS FOR THE ADMISSION OF PUPILS TO ACADEMIES
After section 85A of the School Standards and Framework Act 1998 (c. 31) there is inserted—
"85B FUNCTIONS OF ADMISSION FORUMS IN RELATION TO ACADEMIES

(1) Regulations may authorise or require an admission forum established by a local education authority under section 85A to give advice to the governing body of any Academy in the authority's area on any matter corresponding to a matter prescribed under subsection (1)(b) of that section.

(2) The governing body of an Academy shall have regard, in conducting the Academy, to any relevant advice given to them by an admission forum by virtue of subsection (1).""

The noble Baroness said: My Lords, it has always been our intention that academies should be required to take part in statutory admission forums and to have regard to their advice by their funding agreements. As I described, we have already put in place robust arrangements to ensure that academies will be inclusive schools and that they will agree their admission arrangements in partnership with education authorities and other admission authorities.
On Report, some noble Lords favoured putting those arrangements on an even more formal basis. As I said, this would in any case be covered in schools' funding arrangements, but we agreed to make the provisions more transparent and to strengthen them by introducing the amendment. It will place a statutory duty on admission forums to promulgate their advice to academies as well as to maintained schools within their area. It will also place a statutory duty on the governing body of an academy to have regard to such advice, which will be in addition to its contractual duty to have such regard through its funding agreement. I hope that noble Lords accept the amendment. I beg to move.
Baroness Sharp of Guildford: My Lords, I thank the Minister for tabling the amendment, which substantially meets our concerns about the role of academies in relation to admission forums. As she said, it makes it absolutely clear that academies will participate in admission forums and take their advice. We are delighted about that. Although we understand why, we are sorry that city technology colleges cannot also be included. We understand that they are totally independent schools, but we should have liked them to have been included. We understand that the Minister will encourage them where possible to participate in
294
local admission forums as though they were members. We are delighted by the amendment and thank the Minister very much.
On Question, amendment agreed to.
Clause 70 [Proposals relating to sixth forms]:
Lord Davies of Oldhammoved Amendment No. 27:
Page 48, leave out lines 8 and 9 and insert—
"(b) with a view to promoting one or more of the relevant objectives, or—
(c) if—

(i) they are made in addition to proposals relating to education or training other than in schools, and

(ii) the combined proposals are made with a view to promoting one or more of the relevant objectives."

The noble Lord said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 28 and 29. This group of amendments fulfils the commitment that we made during debate on Report on the Learning and Skills Council's powers in relation to school sixth forms. On Report, I explained how the powers in Clause 70 will help to support the Government's agenda for a flexible, coherent and diverse 14 to 19 phase of learning. In particular, it will ensure that a single body—the LSC in England or the National Council for Education and Training in Wales—can lead local discussion and consultation on developing local patterns of 16 to 19 provision to ensure that all young people have access to a wide range of high quality provision that meets their needs and aspirations.
On Report, I also acknowledged that the broad terms in which Clause 70 is drafted reflected too little of the Government's clear intention that the new LSC powers should be focused on improving achievement and opportunity for young people. The amendments address that concern.
Amendments Nos. 27 and 28 remove from the Bill the delegation to regulation of the circumstances under which the LSC and the NCETW can make sixth form proposals, other than in following up an area inspection. In its place, the amendments substitute a condition that proposals may be published only if, either on their own or when combined with other proposals relating to education or training, they are made with a view to promoting relevant objectives.
Amendment No. 29 specifies those objectives. They are: an improvement in achievement of 16 to 19 year-olds; an increase in 16 to 19 participation; and an expansion of the range of teaming opportunities open to 16 to 19 year-olds. Taken together, the amendments provide a description of the objectives that must underpin any proposals for local 16 to 19 provision that include reorganisation of school sixth forms in the absence of an area inspection. They meet the Government's intention of ensuring that the LSC may act to improve the quality of and access to 16 to 19 learning in an area.

295
At the same time, they also reflect the concerns of, and give a clear reassurance to, those who have feared that the power might be used primarily to pursue other purposes, for instance relating to the relative costs of otherwise effective provision or the management of surplus. I beg to move.
Baroness Sharp of Guildford: My Lords, I rise to speak to Amendments Nos. 30, 31 and 32, which are amendments to Amendments Nos. 27, 28 and 29.
The purpose of the three amendments is self-explanatory. They are intended to ensure local accountability in relation to sixth forms. The government amendments do not go quite far enough in that sense, although we are extremely grateful to the Government for the degree to which they have listened to the points that we made in Committee and, in particular, on Report. We are grateful to them for tabling the amendments but should like to tease the matter a little further.
The amendments are intended to ensure that the planning of the Learning and Skills Council or the National Council for Education and Training in Wales is consistent with locally agreed plans—in particular the education development plan and the school organisation plan. The aim is to ensure that the Learning and Skills Council will not close a school sixth form solely because of its subjective views about the quality of post-16 provision. It is also important that the voice of the sixth form is heard in discussion about future provision.
The relevant objectives in the government amendment introduce an element of subjectivity. It is a matter of judgment whether provision is improved if it is provided in a school or in a further education college. The LSC proposals must take account of locally consulted plans—plans agreed by people who know the students and their needs. Local people will know what is suitable to the requirements of post-16 students and will have already debated and agreed plans through their education development plan and school organisation plan. It is important that there is not another level of planning that is not tied into the main local education plan. Obviously, one cannot expect the Learning and Skills Council's plans to be tied all that well into local plans. They exist at a higher regional or national level. There must be a link between two such important plans, stemming from the work of teachers and the LEA. We need a little more linkage between the work going on locally and the decisions made by the LSC.
Lord Davies of Oldham: My Lords, I am sorry that the original amendments have not satisfied the noble Baroness, Lady Sharp of Guildford. I share her concern to ensure that local 16-to-19 planning is coherent and that the LSC works in partnership with LEAs, school organisation committees and other local bodies. To achieve that, it is vital that any LSC proposals for 16-to-19 provision work with the grain of existing provision and school planning, if that is the best way in which to deliver better opportunities and
296
higher achievement. There is not a great deal between the Government and the noble Baroness on that issue. I can assure your Lordships that, in the guidance and regulations that will accompany the new LSC power, we will set out a framework to guarantee that those concerns are met. We will ensure that all local interests are fully consulted in the development of LSC proposals. The noble Baroness said that that should happen.
I differ from the noble Baroness, however, inasmuch as I think that her amendments would introduce a degree of rigidity into the situation. We recognise, of course, that there should be reference to the local situation and a relationship to the school organisation plan. However, the amendments are misguided in seeking to tie the purposes for which the LSC may make proposals so closely to the plans for school provision already put in place by the LEA or the school organisation committee. That goes well beyond the obligations placed on the proposers of other types of school reorganisation and on SOCs. Our guidance to school organisation committees specifically allows proposals to differ from the school organisation plan to reflect, for instance, unexpected circumstances. It seems a little odd that the obligations on the LSC should be more restrictive and more onerous.
The Government's amendments will ensure that any proposals from the LSC must improve achievement, opportunities or participation for young people. The amendments would qualify those objectives and stifle local innovation by requiring any LSC proposal that involved school sixth forms to conform to the existing plans, no matter what changes in circumstances or fresh thinking might have taken place locally since those plans were drawn up.
My case is straightforward. I understand, of course, the noble Baroness's emphasis on local consultation. We share a view of what the LSC is meant to achieve, but her amendments to my noble friend's amendments would restrict the LSC unnecessarily. I hope that, on the basis of those assurances, the noble Baroness will decide not to press her amendments.
On Question, amendment agreed to.
Lord Davies of Oldhammoved Amendment No. 28:
Page 48, leave out lines 14 and 15 and insert—
"(b) with a view to promoting one or more of the relevant objectives, or
(c) if—

(i) they are made in addition to proposals relating to education or training other than in schools, and

(ii) the combined proposals are made with a view to promoting one or more of the relevant objectives."

On Question, amendment agreed to.
Lord Davies of Oldhammoved Amendment No. 29:
Page 48, line 15, at end insert—
"() For the purposes of this section, the following are "relevant objectives"—

(a) an improvement in the educational or training achievements of persons who are above compulsory school age but below the age of 19;

(b) an increase in the number of such persons who participate in education or training suitable to the requirements of such persons;

(c) an expansion of the range of educational or training opportunities suitable to the requirements of such persons."

The noble Lord said: My Lords, I beg to move.
Baroness Sharp of Guildfordmoved, as an amendment to Amendment No. 29, Amendment No. 30:
Line 6, at end insert "consistent with the Education Development Plan"
The noble Baroness said: My Lords, I am grateful to the Minister for listening to what I had to say. The key issue is that the matter should go down in the guidance. The Minister will recognise that the amendments probe the matter a little further than his amendment. We have no intention of pressing our amendment, but we did intend to get a more specific statement that there would be a positive link between the Learning and Skills Council and the local planning structures. It is important, and I am grateful to the Minister for the assurance that he gave. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 and 32, as amendments to Amendment No. 29, not moved.]
On Question, Amendment No. 29 agreed to.
Clause 120 [Power to prescribe pay and conditions]:
Lord Lucasmoved Amendment No. 33:
Page 76, line 2, after "teacher" insert "or a member of the management team"
The noble Lord said: My Lords, Clause 120(3) defines a school teacher for the purposes of the clause. Clause 120(4) says that a head teacher is also a school teacher. I understand that that is required because some of the conditions under Clause 120(3) may not be met in the case of a head teacher.
When we discussed the matter in Committee, I quoted the example of the head teacher with the luxury of six non-teaching deputies who was thus able to take a holiday in the middle of term. The characteristics of a head teacher that mean that he or she does not come under Clause 120(3) would also mean that non-teaching deputies did not come under that subsection. I propose the amendment to put that right or, at least, to find out that I do not need to put it right. We must make sure that non-teaching deputies qualify as teachers for the purposes of the clause. I beg to move.
Baroness Ashton of Upholland: My Lords, I must begin by apologising to the noble Lord, Lord Lucas,
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for the fact that my letter of 7th May to him did not fully cover the point that he made in Committee on 2nd May. Then, he said:
"It is not clear that the definitions in Clause 118(3)(b) and Clause 129(1) would apply to a head teacher or member of senior management who was not actually teaching."—[Official Report, 2/5/02; col.901]
The clauses in question are now Clauses 120 and 131, as the noble Lord said. My letter was written in the context of the debate at the time, which concerned a set of technical government amendments to secure consistent references in the Bill to teachers employed by schools or LEAs. I recognise that I did not address in full the point that he now raises, and I apologise to him for that. I hope that I can satisfy him about that now.
In general, a person must be paid as a teacher if he or she has qualified teacher status, is employed by the school or LEA, as appropriate, and—crucially—is required by contract to carry out the work that is to be specified under Clause 131; namely, the core teaching duties. That means that, in general, only qualified teachers who are required to carry out core teaching duties are entitled to be paid as qualified teachers. Clause 120(4) ensures that the head of a maintained school is subject to the pay and conditions provisions, whether or not he or she is contracted to carry out the core teaching duties. As the noble Lord said, the reason for the provision is that some heads do not do any teaching. If they are employed on the basis that they are not required to carry out the core teaching duties, they should still be subject to teachers' pay provisions.
I fully understand the concern that other school managers, such as deputy or assistant heads, might not meet the criteria and would therefore not be required to be paid according to national pay and conditions agreements. I hope that I can reassure the noble Lord on that point. However, the difficulty with the amendment is that, in referring to the management team, it catches bursars as well as deputy and assistant heads. That would, of course, require schools to pay their bursars under the school teachers' pay and conditions document. I know that the noble Lord would recognise that to represent an undesirable loss of flexibility. There is no simple technical means of resolving that difficulty, as bursars may have qualified teacher status even though they have given up teaching.
Having set that out, I turn to the substance of the issue. We certainly do not intend that schools should be forced to pay non-teaching deputy and assistant heads outside the pay document. That will not happen. Many deputy and assistant heads have some timetabled teaching and will automatically be caught by the provisions. All are qualified teachers and are, of course, currently employed under national pay and conditions agreements. Their contracts of employment will, in almost all cases, refer to a requirement to carry out core teaching duties, even if that is, in some cases, only occasionally.

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A deputy or assistant head who does not, in practice, carry out the core teaching duties will not be excluded from the requirement to be paid on national pay and conditions. The contractual duty to, for example, cover classes, where necessary, under the direction of the head will be sufficient to ensure that they are captured by the provisions.
We have two key objections here and in Clause 131. First, we want to ensure that, subject to specified exceptions, core teaching work is carried out by qualified teachers and that they are entitled to be paid as such. Secondly, we want to ensure that schools do not lose their flexibility to deploy staff according to local circumstances, subject to the protections that Clause 131 gives to qualified teacher status. Thus, those who are not teaching are nevertheless still required under their contracts to teach if need be, and therefore are covered.
I hope that, on the basis of my remarks, the noble Lord will feel able to withdraw his amendment.
Lord Lucas: My Lords, I am grateful for that explanation. I hope that it will work in practice. No doubt at some point in the future we shall find someone who will trip up on this technicality, but I do not suppose that it is much to worry about. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.30 p.m.
Clause 131 [Requirement to be qualified]:
Baroness Blatchmoved Amendment No. 34:
Page 82, line 1, after "teacher," insert—
"() is a teaching assistant under the direction and the direct supervision of a qualified teacher,"
The noble Baroness said: My Lords, I shall be brief. I am still fishing for a proper definition of a "teaching assistant". I am trying to work out, having read through the record and checked the correspondence, what is the difference between a teaching assistant today and a teaching assistant under the new arrangements. Furthermore, what is it that simply cannot be done now that will be facilitated by this part of the Bill?
Some confusion arose when I tabled this amendment on Report. The noble Baroness thought that I was referring to any person working under the direction and/or the direct supervision of a qualified teacher. That could include the caretaker, the groundsman and the cleaners. In fact I refer here only to "teaching assistants". Rather than be used as substitute teachers, which is one of the fears expressed by professional teachers, they should be able to work as teaching assistants under the direction and the direct supervision of a qualified teacher. I beg to move.
Baroness Ashton of Upholland: My Lords, I begin by apologising to the noble Baroness for the numbering on the new policy statement I sent to her. That numbering does not reflect the latest version of the
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Bill. References in the statement to Clauses 128, 129 and 40 should now read Clauses 130, 131 and 43. There was no intention to mislead the noble Baroness. The statement was written at Report stage and I would not want her to think that I had not picked up the error.
Perhaps I may turn first to the technical implications of the amendment and then seek to address the concerns of the noble Baroness. I think that she will accept that there are some technical difficulties because we do not want to restrict local discretion and appropriate flexibility in the use of teaching assistants in schools. The words "under the direction of" and "direct supervision of" are not as clear as perhaps we would need if we were to accept the amendment. Furthermore, as the noble Baroness herself pointed out, staff to whom she was not referring such as the caretaker right through to the deputy head teacher would be captured by the terms of the amendment.
I have checked the position very carefully. The words "direct supervision" mean, in practice, that teaching assistants would be unable to undertake any specified teaching work without the presence of a qualified teacher. I shall cite an example. The noble Baroness will be well aware that experienced teaching assistants may on occasion take a group of children out of the classroom. A visit to the library could provide some appropriate work on literacy. Many situations that currently form a part of everyday teaching in schools would become questionable if we were to accept the amendment.
Lessons prepared or devised by qualified teachers could not be delivered in any part or in any way by a teaching assistant without a qualified teacher being present. However, we know of circumstances where schools want to be able to ensure that qualified teachers set the work, although perhaps a teaching assistant would be in the classroom while the qualified teacher was outside preparing for the next part of the work. I am sure that we would not wish to interfere with those arrangements. Indeed, part of the aim of the Bill is to ensure that we understand those differences. The proposed level of supervision would not be appropriate in all cases and thus would limit the scope of teaching assistants to support qualified teachers.
The noble Baroness referred on Report to teaching assistants in special schools who over the years may have gathered a great deal of experience of working in the classroom with children with special needs; indeed, they may well be more experienced and have greater know-how than newly qualified teachers coming straight from college. We want to ensure that such experienced teaching assistants are able to work with children in an appropriate manner, even if a qualified teacher is not present in the same room.
The term "teaching assistant" is not otherwise defined in primary legislation and we believe that the amendment would create a distinction between them and other unqualified persons, to whom the noble Baroness referred. Teaching assistants are a heterogeneous group of persons, some of whom will be experienced school staff. Others may not have previous relevant experience of the learning

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environment. It is not possible comprehensively to define a "teaching assistant". Therefore, placing all teaching assistants under a direct supervision requirement would he inflexible and would leave schools in a kind of straitjacket. There would be no discretion to recognise the skills and experience of a particular individual. In addition, we do not want to tie the hands of qualified teachers by placing on them a daily function of directly supervising teaching assistants in the way specified in the amendment.
We seek to add clarity so that schools understand the position with regard to working with teachers and teaching assistants. We must recognise that in our schools there are adults who come from different backgrounds, some of whom will be qualified and some unqualified. On Report we discussed at length particular individuals, such as those from overseas, who would fall into a certain category. I hope that the policy statement reflects what we are trying to achieve here; namely, to recognise that it is difficult to put a specific definition on a teaching assistant that would not rule out one or other group that is making a real contribution to our schools. Some may be more experienced than others and some may have special skills when working with particular groups of children.
I hope that, along with the revised policy statement, I have been able to allay the fears of the noble Baroness and that in the light of these explanations she will feel able 10 withdraw her amendment.
Baroness Blatch: My Lords, I have to admit that I am still no wiser as regards what it is that cannot be done now by a teaching assistant that will be enabled by the Bill. I have to say that, out in the schools, I do not detect a concern about the use of teaching assistants. What I have detected is a sense of confusion and a suspicion with regard to exactly what it is the Government mean by "changing" the nature of teaching assistants.
However, we shall see what works out in practice. In the hope that the fears that have been expressed by teachers have been allayed, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 35 not moved.]
Clause 203 [Application of Part 5 of Education Act 1996 to nursery education]:
Baroness Blatchmoved Amendment No. 36:
Leave out Clause 203.
The noble Baroness said: My Lords, in returning to this matter I wish most warmly to thank the noble Baroness for writing to me. However, I have to say that, if representatives of the Plain English Society are listening, then I wish to read out one paragraph of the letter to them:
"Chapter 3 of the 1996 Act as originally drafted concerned religious education—one of the elements of course of the basic curriculum. So the position in 1996, as with the National Curriculum, because of section 410, was that this chapter did not apply to nursery classes and nursery schools. Chapter 3 was however largely replaced by the School Standards and Framework Act. In order to replicate section 410 in this respect
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in the Bill, we included an exemption for nursery classes at clause 76(2)(a) (nursery schools not in any case being covered by the basic curriculum as they are not 'maintained schools' for purposes of this section). We also amended the relevant parts of the School Standards and Framework Act (at paragraphs 103 and 104 of Schedule 21) to cross reference this to the definition of the basic curriculum which is now to be found at clause 78 of the Bill instead of in the 1996 Act. So religious education still does not apply to nursery classes or nursery schools".
In a sense, that paragraph encapsulates my concerns. The Government want to do one thing: they want to add a foundation stage to nursery education to make it a statutory part of the national curriculum. While no one argues with that—indeed, I believe that it has been welcomed—perhaps I may put an interesting question to the noble Baroness. Children below the age of five years are not of statutory school age, but now we are to introduce a statutory stage of the national curriculum. How will that square in law with regard to children who are not of statutory school age?
I know that we shall be discussing this in a few moments, but given that Montessori schools do not cover everything suggested by the Government at nursery school age, what impact will the foundation stage have on such schools? I have mentioned Montessori schools, but the question applies equally to any other nursery school not wishing to adopt the new system.
The whole of Part 5 of the 1996 Act has been transposed into this Bill in order to achieve one aim. A power could have been taken by the Secretary of State simply to add a foundation stage to the national curriculum for nursery school-age children. Part 5 did not have a foundation stage for the nursery school national curriculum. I find this very puzzling. As I say, the paragraph I have quoted epitomises the difficulty that not only I but teachers have with this kind of legalese and gobbledegook when these missives come down from on high. I beg to move.
Baroness Walmsley: My Lords, I confess to being similarly puzzled by this gobbledegook. Clearly some of it is nonsense. Like the noble Baroness, Lady Blatch, I cannot see why the Government have had to do it this way. I, too, am puzzled as to why there is a statutory foundation stage for a non-statutory age group for attendance at school. We live in hope that the Minister will be able to clarify the situation.
Baroness Ashton of Upholland: My Lords, the noble Baroness, Lady Blatch, has spent much longer than I have working with those who ensure that our legislation does what it is meant to do. Having had the paragraph read back to me, I apologise for it. It made sense when I read it to myself—I did of course read the letters—but I understand the difficulty that the noble Baroness has with it.
I shall try to put the issue on the record. I was concerned at the press reports that I saw over the weekend and it is important that we should be clear about this. I hope that my explanation will be in plain English. I try always to speak plain English in your Lordships' House.

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Clause 203 of the Bill does not in any way change the duties of nursery schools or nursery classes with respect to sex education and religious education or in any other substantive way except in regard to the policy objectives that we have set out in relation to the foundation stage.
My brief states that the noble Baroness will have received a letter and that it was as clear as I believed I was. I shall refrain from commenting on that. There is some doubt in the noble Baroness's mind—as there was in a fanciful newspaper report—and so I repeat that there will be no requirement for nursery-aged children to have sex education. That is completely ludicrous. The Education Act 1993 first introduced the duty for secondary-aged pupils to have sex education. That is not changed in any way by the Bill.
Nor does any school have a duty to make a statement about sex education that did not have such a duty before the Bill. The duty never applied to nursery schools; it will not do so as a result of the Bill. Nor are the duties with respect to religious education changed in any way by this legislation.
We have two main policy aims in the Bill with regard to the curriculum. First, to create the flexibility necessary to take forward the 14–19 agenda; secondly, to introduce the foundation stage as a statutory part of the national curriculum. We are also ensuring—the noble Lord, Lord Lucas, who is no longer in his place, would be pleased by this—that schools are not prevented by legislative inflexibility from accelerating pupils through key stages.
In addition, we have a technical legal aim—that is, to separate out the provisions relating to the national curriculum in England and the national curriculum in Wales in order to clarify for users of the statute book what had become quite a muddled set of sections because of the differences between Welsh and English schools. We sought no other changes to the law other than to implement these aims. The repeal of Section 410 was necessary to implement the foundation stage but, apart from enabling the implementation, we replicated its effect.
Let me set out the legal position, put it on the record and, I hope, clarify it in plain English. A great deal of Part 5 of the Education Act 1996 has already been or will be repealed by the Bill. Part 5 of the 1996 Act originally had four chapters. Chapters 1 and 2 dealt with the national curriculum, which we repeal and re-enact here. Because we are adding the foundation stage it is necessary that these re-enacted provisions now apply to nursery education.
Chapter 3 of the 1996 Act as originally drafted concerned religious education, which is one of the elements of the basic curriculum. However, Chapter 3 was replaced by the School Standards and Framework Act, so we have amended the relevant parts of that Act to ensure that religious education still does not apply to nursery classes or nursery schools.
The collective worship provisions were changed in 1998. The effect of Section 70 of the School Standards and Framework Act is that children in a nursery class
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at a primary school have to take part in an act of collective worship while children at maintained nursery schools do not. This has been the law since 1998 because we do not believe that children in a nursery class should be treated differently from the rest of the school. We have not changed that position in the Bill.
Most of the remaining provisions of Part 5 of the 1996 Act are incapable of applying to nursery education. The provisions in regard to SACRE, which noble Lords will know advises the local education authority on collective worship and RE, apply to the extent that I have explained in relation to collective worship. Public examinations are clearly irrelevant.
The provisions that prevent political indoctrination and secure balanced treatment and the provisions in relation to information and complaints apply to maintained schools and thus to nursery classes within such schools. This is consistent with wanting to treat the classes as part of the whole school. It is clearly right that if we treat the foundation stage on a par with other stages of the national curriculum these provisions should also apply.
Clause 81 of the Bill clearly sets out the six learning areas of the foundation stage curriculum and has been warmly welcomed, as the noble Baroness, Lady Blatch, said. If the government are funding it, the nurseries must provide the foundation stage. No child has to have a nursery education, but if the child is funded by the Government the nursery must provide the foundation stage.
If there had been a simple way of doing this we would have taken that course. This is the way that we had to do it. I hope that when noble Lords and others read in Hansard what does and does not apply, they will see that what we have done is exactly what the noble Baroness, Lady Blatch, wants us to do—that is, to bring in the foundation stage curriculum, which the noble Baroness said she warmly welcomed, and to ensure that inappropriate matters are not applied to it. In the light of that explanation, I hope that the noble Baroness will feel able to withdraw her amendment.
7.45 p.m.
Baroness Blatch: My Lords, the confusion has arisen because of the application of Part 5 to nursery schools. I believe that, given that the foundation stage is not included in Part 5, it would have been possible simply to insert a power to introduce it.
The Minister did not mention Montessori education. I assume that as long as the Government are not paying for Montessori education this provision will not apply.
My record in the department is fairly miserable in the sense that I was always a thorn in the side of officials and pressed them to use, where possible, plainer English. I failed miserably and nothing appears to have changed. They still get their way.
My only real success was bringing together, against incredible opposition from the department, a Peer with whom I argued vociferously on the Floor of the House and parliamentary counsel. I said, "Perhaps

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parliamentary counsel can convince you that this is the answer". Within five minutes my noble friend Lord Renton, who is not in his place, won the day and parliamentary counsel changed the legalese in the Bill. So occasionally it can be done.
Sex education is not banned in primary schools; it is compulsory only in secondary schools. Therefore the application of Part 5 to this part of the Bill leaves open the possibility of that part of the Act being applied to nursery schools. So it is not surprising that at least some people have been fairly fertile in their imagination of what the importation of Part 5 could mean.
I have taken this issue as far as I can. I hope that I have struck a blow for plainer English. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 [Admission arrangements]:
Baroness Sharp of Guildfordmoved Amendment No. 37:
Page 139, line 3, at end insert—
"() In section 90 of the 1998 Act (reference of objections to adjudicator or Secretary of State) at the end of subsection (2) insert—
"(2A) Where—

(a) the admission arrangements have been determined by an admission authority under section 89(4), but

(b) a parent wishes to make an objection about these arrangements,.

that person may refer the objection to the local education authority which, after considering the objection, may refer the objection to the adjudicator.""
The noble Baroness said: My Lords, I return to this amendment because I did not get a satisfactory answer from the Minister at Report stage and I wish to take the matter a little further. We have brought it back in a slightly amended form to take account of some of the points made.
To remind your Lordships, the amendment is about giving more parental rights over admission arrangements and not only about the admission of a particular child. The amendment would give parents the right to appeal to the adjudicator, an independent body which can uphold an appeal and require a school's admission arrangements to change to reflect the law and code of practice on school admissions.
The many years of experimentation by the Conservative government left a diversity of admissions practices, some of which were fairer than others. LEAs can appeal to the adjudicator but have been reluctant to do so in relation to the practices of particular schools because of a wish to work with schools and build a relationship with them—the schools have sometimes been grant-maintained, and therefore the LEA is anxious to build a new relationship with them, particularly after their reintroduction to the LEA framework following the 1998 Act. Parents have been left somewhere in the middle. The two cases I cited on Report—namely, of schools in Lewisham and Havering—came to light only because the parents concerned appealed to the ombudsman, because the LEA had not appealed.
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The adjudicator is preferable to the ombudsman for resolving such issues. The adjudicator has specialist knowledge of the specific area of school admission arrangements; the local government ombudsman covers all local services outside the health service. The adjudicator works to a fixed, tight timetable; the ombudsman carries out investigations over a much longer period of time. The adjudicator can direct changes to admission arrangements to bring them into line with the law; the ombudsman can only propose remedies. Neither has an appeal system except through judicial review. The adjudicator is the best way of resolving parental complaints.
It is accepted that current primary legislation allows for secondary legislation to give parents the right of appeal to the adjudicator but the Government are very reluctant to give parents such a right, and they are also reluctant to come forward with new regulations. The reason given is that there was little response from parents to the consultation on school admissions issued on 5th September 2001. In fact, the consultation did not ask directly whether parents' rights should be extended. It was noted in the consultation document that,
"parents in groups of at least 10 can already make objections to the Adjudicator where admission arrangements include selection for some places, and that selection has been in place since the school year 1997–98 or earlier. We do not presently plan to extend objection rights further, but if you think we should please say so".
The question asked—and all DfES consultation documents have constrained responses now—was Question 12:
"Do you think rights to object about proposed admission arrangements should be extended in other ways?".
The analysis of the responses to the consultation on school admissions did say that there had been little support to widen the objection further, particularly from voluntary-aided and foundation schools. But to some extent it is to be expected that both might wish to keep arrangements much as they were. In fact, 55 per cent of respondents disagreed overall with giving more parental rights—hardly an overwhelming majority. But at the start of the report it was stated that,
"the majority of those responding to this consultation have a professional interest in education".
Few responses—only 13 out of 416—were from parents. Elsewhere, the report states that the response rate,
"is too small to draw any conclusions on parents' views".
The answer, therefore, to the idea that "parents don't want it" is that very few parents have actually been asked. The meagre response rate to the constrained question to a professional audience is one of the three arguments advanced by the Government for not giving greater parental rights.
The second argument advanced was that,
"Any admission arrangements could potentially be challenged".—[Official Report, 19/6/02; col. 864.]
It indicates that the Government are possibly somewhat afraid of parents taking action to ensure that they get the best education for their children. The objection given at that time was, as I said, that some

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way was needed of sifting such a challenge from parents and of making sure that it did not go directly to the ombudsman. The amendment tries to take account of government fears by requiring the LEA to listen to parental objections and if the LEA agrees with any parental objection to refer the matter to the adjudicator. That takes account of the Lewisham case, where, if the LEA had listened to parental concerns about the school's admission arrangements, the matter could have been resolved a couple of years earlier than it was. The local authority would probably not have been found guilty of maladminstration.
The amendment may not be perfect, but it does try to take account of the Government's fears about giving parents a greater say in their local school system. It is up to the Government now to state whether they support parents in such situations. I beg to move.
Baroness Ashton of Upholland: My Lords, although I understand the intention behind the amendment, the difficulty is that it does not actually do what the noble Baroness wishes it to do. Referral of an objection to the adjudicator would be dependent upon the local education authority agreeing to do so—and it could well be that the LEA is the admission authority against whose arrangements a parent seeks to make objection. However, I hope that I can demonstrate that similar opportunities currently exist for parents to make their objections known.
Parents can already make representations to their local education authority, either directly or to their local education committee via elected members. It is then up to the local education authority to consider those representations and to decide whether an objection to a school's arrangements is justified.
As I have pointed out in previous debates, the issue of whether LEAs should take account of parents' complaints and representations was highlighted in the complaint about the Prendergast school in Lewisham and the finding that the school's practice of interviewing applicants was contrary to guidance. The ombudsman also said that the LEA was guilty of maladministration because it has neglected to object to the school's arrangements to the adjudicator, despite the fact that parents had made the school aware of this. We believe that this emphasises the greater responsibility that education authorities have to consider what is in the best interests of all children in their area.
But governing bodies of individual schools should also consider the interests of their own pupils. Schools which are their own admission authority may already object to another's admission arrangements, and the Bill extends that right to the governing bodies of community and controlled schools. This may be a benefit where, for example, children attending a particular primary school are disadvantaged by a local secondary school's admission arrangements, perhaps because their school is not a named feeder school. Under the new provision, any governing body will be
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able to refer an objection to the adjudicator on behalf of its pupils and parents—not through the local education authority but directly.
I believe that with the role of parent governors and with the governing bodies' interest in protecting and enhancing the children within their care, this is the right place to put our focus, and indeed the reason why we have brought forward the amendment. I hope, therefore, that the noble Baroness, Lady Sharp, will accept that the amendment does not do what she wishes it to do. We believe that individual governing bodies are best placed to do this. We shall, of course, look at this procedure and ensure that it is working well. My door is always open, and other Ministers' doors will be open, to further discussion after the Bill has completed its passage. I have set out the importance of the position and I hope that the noble Baroness will be able to withdraw her amendment.
Baroness Sharp of Guildford: My Lords, I am grateful to the Minister. Her response does meet completely what is required. Nevertheless, we have taken this proposal as far as we can. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 14 [Inspection of nursery education]:
Baroness Blatchmoved Amendment No. 38:
Page 174, line 27, at end insert—
"Rights to require paperwork
In paragraph 18 of Schedule 26 to the School Standards and Framework Act 1998 (c. 31) (rights of entry), in sub-paragraph (2)(b) for "which he requires" there is substituted "which he reasonably requires"."
The noble Baroness said: My Lords, among the other features of the Bill, there are two running themes: first, a massive extension of powers to regulate and control almost every aspect of school life, from the appointment of clerks to governing bodies to the setting of attendance targets for individual schools; and secondly, effective nationalisation of the nursery sector and its subjection to regulation by the department and by other public agencies. Is it any wonder that, with such a mentality running free in the department, regulators, inspectors and local authorities bombard nursery schools with demands for record-keeping and paperwork which are driving many good people to leave the profession?
I welcomed what the Minister said on Report about efforts being made by Ofsted to restrict demands for paperwork on nursery schools. We shall await the practical outcome of that. But it simply does not tally with experience in schools, where there are almost daily reports of unreasonable demands for paper inspection. Only today, I had lunch with the deputy head of a nursery school who was in the throes of preparing for an inspection. She not only applauded the amendment; she went so far as to say that unless the burden is reduced nursery education will start to lose very good people.
The Minister said that the amendment is unnecessary. Nursery schools are telling me a different story. They are crying out for some hint of

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understanding from the Government for their predicament. Even at this late stage, I hope that the Government will reconsider their resistance to the amendment. There can surely be no reason for resisting a specific reasonable test on paperwork, which, combined with incoherent, intrusive, and constantly changing departmental guidelines, is the major cause of complaint by nursery schools.
I echo the comments made by my noble friend Lord Lucas on an earlier amendment. The amendment would provide an assurance of certainty to those who currently veer between fear and despair about the weight of paperwork required. In the name of nursery school teachers up and down the land, I ask the Minister to remember that every hour spent on unreasonable paperwork—and that is what I am talking about—is an hour lost to lighting the spark of learning in a young child. Please accept the reasonable test by accepting the amendment. I beg to move.
Baroness Ashton of Upholland: My Lords, during our previous debate on Amendment No. 38 the noble Baroness, Lady Blatch, placed great emphasis on the views of nursery schools and the world of nursery education on the burden of paperwork that they feel threatened by. As the noble Baroness knows, as Minister with responsibility for nursery schools, I am always in conversation with them to ensure that I get those messages. I am hearing loud and clear the messages that the noble Baroness is putting forward.
I have taken comfort from what Ofsted has reported to me on the reductions in its demands for paperwork. However, we should not assume that more cannot be done to ease the burden of inspection. I shall continue to have a dialogue with Ofsted, as will other ministerial colleagues, on that issue.
I acknowledge the danger that each new initiative to improve quality for young people can carry with it increased demands for paperwork that perversely might detract from the improvements that were intended. I assure the House that those are matters of great concern to me. Until recently I was the chair of governors at a school and I know well how schools perceive Ofsted and its demands. That small nurseries and playgroups offering nursery education feel threatened is entirely understandable. Some of the correspondence that I receive from nurseries highlights those issues.
I reiterate that adding the word "reasonably" in this part of the legislation does not address this problem. The way forward—and this is what I am committed to in the early years and childcare part of my brief—is not to produce a law of dubious effect, but rather to engage in a dialogue that we need with the various stakeholders.
I hope that it will be helpful to repeat the explanations I have given already as to why the amendment does not make good law. As a public body, Ofsted is already under a public law duty to act reasonably in all its dealings with schools, nursery settings and childcare providers. A specific requirement to act reasonably in one aspect of its
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dealings with the customers is unnecessary and, more importantly, could cast doubt on a general duty to act reasonably. That is why we believe the law should be left as it is. The duty of reasonableness is a public law duty applying to public bodies. The noble Baroness, Lady Blatch, would be right that others might be given specific duties of reasonableness. The general duty already applies to Ofsted.
Paragraph 8(2)(b) of Schedule 26 to the School Standards and Framework Act 1998 already makes it clear that a nursery education inspector or a member of the inspectorate conducting or monitoring inspections should copy only documents that are required for the purpose of conducting or monitoring the inspection. I oppose the amendment not because I do not entirely support what the noble Baroness is seeking to do, but because we have tested the issue and found that it would be counterproductive because the duty of reasonableness already exists. The amendment would place that public duty in some doubt.
For that reason and that reason alone, while accepting entirely the sentiments behind the amendment, I invite the noble Baroness to withdraw it.
Baroness Blatch: My Lords, I have done my best by the nursery schools that have contacted me. The Government have made this pledge. Unless there is a practical outcome, I am afraid this grave mistrust will continue. I take what the Minister has said. I believe her. I trust that something practical will now happen. We expect Ofsted to behave reasonably. Indeed, we shall be watching carefully that it does. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 17 [Amendments of Part 5 of Education Act 1977]:
Baroness Blatchmoved Amendment No. 39:
Page 180, line 15, at end insert—
"(2B) In the case of maintained nursery schools or of funded nursery schools which are designated as Montessori schools, and where the principal or at least two senior teachers are holders of recognised qualifications from Montessori awarding bodies, the authority, in carrying out its functions under this section, shall do nothing that will require or advise schools or teachers to depart from principles and teaching methods that are appropriate to Montessori education and shall not insist on anything that is inappropriate to Montessori education."
The noble Baroness said: My Lords, Amendments Nos. 39, 40 and 41 are aimed at protecting the integrity of Montessori qualifications, Montessori schools and the Montessori system, against direction, or pressure to re-qualify or to modify qualifications and Montessori teaching practice in ways that are inappropriate to them.
I have studied carefully the Minister's reply on Report, which I found more positive than the response from the noble Lord, Lord Davies, at an earlier stage. Perhaps that reflects a heightened degree of personal interest and, dare I say, sympathy on the Minister's behalf. I hope so, because I am convinced that a sensible solution can be found, but fear it will happen only if the Minister gives it her personal attention.

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There have been too many instances where small bodies—though the Montessori movement, making up 6 per cent of nursery education, is not so small—were seen as inconvenient by officials and told that they must fit a departmental model. Equally, I found a crisp "just sort it out" from the Minister could work wonders and would translate all the good intentions expressed at the Dispatch Box into reality. I hope that the Minister can assure your Lordships' House that that will be done.
While I do not want to be party to negotiation across the Dispatch Box, I have five brief observations on our exchanges on Report, and ask the Minister to clarify points in those areas. First, the implication that only Montessori education in the United Kingdom is raising those matters with me is simply not true. Since I first agreed to raise those important issues I have been encouraged by support from a wide range of Montessori institutions—from national training providers to individual teachers. The Minister is being misled if she believes that concerns are confined to one body.
Certainly Montessori Education UK has made some powerful and practical suggestions. It is the national standards body for Montessori education—a membership organisation which also has on its council the national co-ordinator of the Montessori Early Years Forum. Montessori UK has also acted as co-ordinator of meetings held by Montessori awarding bodies to agree a way forward on the qualifications issue. All those bodies were represented. A consensus view has been achieved. That has reflected both the concerns I set out at earlier stages, and the possible solution proposed.
It is unacceptable to take the Montessori movement to task for saying that there have been too many awarding bodies, then, when those bodies come together with a co-ordinator, to say that Montessori UK is only one body of many. That is not the best way to engage the Montessori movement. I hope the Minister will put a stop to that prejudice from those who hold that view.
Secondly, can the Minister give the assurance I sought on Report that information on Montessori qualifications and services will be included in future official lists and publications sponsored by the DfES? That would help to allay current suspicions that the movement is being marginalised by the department and the QCA.
Thirdly, will the Minister respond specifically and unequivocally to the point that lies behind Amendment No. 40 and give an assurance that she failed to give on Report; namely, to state on the record that no Montessori qualified principal, teacher or manager, who is the holder of a Montessori diploma, will be required to re-qualify or get an additional qualification to continue their work in Montessori education? Will the Minister also confirm that in the view of the department a Montessori diploma is, and will be, full and sufficient qualification to serve as a principal, manager or teacher, in a Montessori nursery school?
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On Amendment No. 41 the Minister said on Report that there was no question of a direction to a Montessori body unless it was failing to comply with a condition of accreditation it had already agreed to. The Minister also said that,
"no Montessori organisation has submitted any qualifications for accreditation".—[Official Report, 26/6/02; col. 1473.]
With respect, that is putting the cart before the horse. The whole point of the present discussions is to explore whether a means can be found of grafting Montessori qualifications—robust, hard-won, long tried and tested as they are—to the Government's bureaucratic model without compromising their integrity and without sacrificing their principles.
It is unreasonable to expect Montessori bodies to submit a model or to agree to a direction unless they can be satisfied on that point. That is why, unless the Minister can assure your Lordships' House that she will intervene to facilitate a solution, Amendment No. 41 is both relevant and important, although it may be that the matter could be addressed outside the Bill by direction from the Minister to the QCA.
Finally in this context, on Report I referred to a possible solution in which the Montessori diploma might be linked to the Council for Awards in Children's Care and Education certificate of professional development in a way that neither compromised Montessori principles nor required the otiose study of a lower level of qualification. The Minister seemed sympathetic but said that it had to be pursued with the QCA and Ofsted. I understand that since then Ofsted has informally told the Montessori bodies that it is not within its remit to recognise individual courses or qualifications. It has passed the buck back to the department and the QCA.
With respect, this sounds a right old bureaucratic merry-go-round. Perhaps that is inherent in the unnecessarily complex bureaucracy being set up by the Government and worsened under the Bill—or perhaps not.
I return to the point at which I began. The tenor of our debates has been that the House sympathises with and respects Montessori schools, Montessori teachers and Montessori qualifications. They have gone on providing good early years teaching for generations despite the dead hand of nationalisation stepping in. When something works well, why cannot the department let it be? Can the Minister not issue a crisp, "Sort it out soon and positively", as I have suggested previously, and let these fine nursery schools and dedicated awarding bodies get on with their lives? An assurance to that effect would go a long way to easing worries in the House and outside. I beg to move.
8.15 p.m.
Baroness Ashton of Upholland: My Lords, I repeat that nothing that the department or any agency is doing threatens Montessori education in any way. The foundation stage curriculum, which, as the noble Baroness said, has been widely welcomed, is designed to be flexible enough to accommodate a wide range of approaches to early learning, including Montessori.

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I am confident that a fully satisfactory way through will be found on the inclusion of the Montessori qualification in the national qualifications framework. As the noble Baroness said, we cannot do that across the Dispatch Box. It must be secured through constructive dialogue, which I understand as of today is under way between the QCA and the relevant Montessori bodies. A promising way forward has been proposed. Whether it succeeds depends on the detail, but whether in this way or another way I am confident that a solution will be found. I shall ensure that I keep a watch over what is happening.
I repeat, we shall not do anything to endanger Montessori. A wide range of existing Montessori qualifications are acceptable to Ofsted for the regulation of day care.
The aim of Amendment No. 39 is to ensure that Montessori schools are not prevented from teaching in a way that is consistent with Montessori principles and practices. I stress that the Bill ensures that providers of early years education such as Montessori schools will retain the flexibility, built into the foundation stage curriculum guidance, to plan learning experiences that are appropriate to the needs of the children, families and communities with whom they work.
Amendment No. 40, which is the same as one tabled in Committee and on Report, is about whether Ofsted and the QCA are prepared to recognise existing Montessori qualifications from any of the Montessori awarding bodies in the UK. I recognise that some people in the Montessori world believe that the essence of their training might be lost if they had to shoehorn their provisions into the requirements of the national framework. Those fears are misplaced.
First, I reiterate my support for Montessori education in this country. It has provided a distinctive ethos that has benefited thousands if not millions of children who have passed through Montessori nurseries over the years. We welcome the contribution that Montessori nurseries bring to the early years sector. We do not want them to be excluded in any way.
Secondly, a range of Montessori qualifications have been endorsed by the Early Years National Training Organisation and are currently acceptable to Ofsted as meeting the requirements of the national standards for day care. The regulation of childcare by Ofsted is essential to ensure that parents can trust the safety and quality of provision. That regulation needs to respect the unique qualities of Montessori education. However, it is not appropriate for Montessori or any other approach to stand outside these frameworks. We have struck the right balance and by working with the Montessori sector we can continue to do so.
I have a list of 37 Montessori qualifications that have been mapped at various levels for the purpose of guiding Ofsted inspectors and day care providers on what is needed to comply with the national standards. That should reassure those who fear that their Montessori qualifications somehow do not count.
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I have said that we shall review the national standards next year when we look again at the criteria that will guide Ofsted's decisions on day care registration. We have no intention of revising the national standards in a way that would disregard the valuable experience that Montessori professionals bring to the early years sector or endanger the ethos or viability of the Montessori sector.
We are involved in a dialogue with the QCA, Ofsted and other organisations about the longer term—in particular about how to encourage a situation in which the national qualifications framework contains the comprehensive and inclusive range of early years and childcare qualifications. We are pleased that Montessori has been exploring with the QCA how best to ensure that people with its qualifications might be covered by the framework and that discussions are continuing. We want to encourage participation to achieve the outcome of a national qualifications framework that rationalises the plethora of qualifications and is acceptable to the sector as a whole. I welcome the way in which the various Montessori organisations have come together to work with the QCA. There is great value to the Montessori movement and to the early years and childcare sector in general in working together to develop qualifications that are part of a recognised framework.
In summary, I reiterate that we applaud the work of the many Montessori nurseries across the country. We welcome the work that the various Montessori groups are doing with the QCA and others to bring their qualifications into the framework. More than that, I emphasise again that under the current national standards that Ofsted applies in its early years function a range of Montessori qualifications are acceptable to meet the qualifications requirement.
Amendment No. 41 was also tabled on Report. I understand the noble Baroness's wish to ensure that the special characteristics of Montessori education are respected. The amendment is not necessary and it is not appropriate to limit QCA's power in relation to a specific awarding body in that way.
The amendment primarily addresses the new power to direct, although it also touches on the conditions under which the QCA accredits qualifications. The power to direct is concerned only with accredited qualifications. It is designed to ensure the effective delivery of qualifications and the interests of learners expecting to take them if there has been a failure or a serious risk of failure by the awarding body. The power can be exercised only if an awarding body is failing to comply with a condition of accreditation. If a qualification has been accredited, clearly the awarding body must have agreed to conditions on accreditation. The power to direct was designed simply to ensure compliance with those conditions.
It is not appropriate to tie the QCA's hands in the eventuality that at some point one or more Montessori organisations successfully seek accreditation and then fail to comply with the conditions that they have agreed to meet. For those reasons, it is important that the QCA is able to use its power. We should trust its professional and impartial judgment.

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I understand that some people in the Montessori world have worries, but they are misplaced. I am confident that the QCA will act professionally and with due regard to the unique attributes of Montessori provision in exercising its power. There is an open and constructive dialogue between the QCA, Ofsted and the Montessori awarding body, which will continue until a mutually acceptable way forward has been found. These discussions are promising. I shall write to the noble Baroness if she wants to know how they are progressing. I also commit to keep close to the issue and to keep the noble Baroness firmly in touch as we move towards what I am sure will be a satisfactory conclusion. On that basis, I hope that she will feel able to withdraw the amendment.
Baroness Blatch: My Lords, once again, I am grateful for the noble Baroness's encouraging answer. I hope that the confusion about to whom Montessori should talk—Ofsted, the QCA and/or the department—and where the right people are to further the debate will be cleared up. I do not know why the QCA should have powers over Montessori. As the noble Baroness said, only when matters have been agreed between them would Montessori bodies be tested for compliance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 40 and 41 not moved.]
8.20 p.m.
Baroness Ashton of Upholland: My Lords, I beg to move that the Bill do now pass. In moving the Motion I would like to say a few words of thanks to all noble Lords who have given so much time to the Bill and spoken during its passage through your Lordships' House. I am particularly grateful to my noble friend Lord Davies for his more or less continuous presence alongside me, his help and support throughout, his dry wit and his unerring ability to reach the heart of an argument. I am particularly grateful for his depth of knowledge and experience of the further education sector.
I am grateful also to my noble friend Lord McIntosh, whose experience has saved me from having to learn a great deal of company law. His advice throughout has been enormously helpful. Similarly, I thank my noble friend Lady Farrington, whose knowledge of Wales and Welsh education has been thoroughly appreciated. Through her I thank all colleagues in Wales for their work.
I thank my noble friends Lord Carter and Lord Grocott and all their colleagues in the Whips Office. They have each been an invaluable source of advice and support and I am grateful to them.
I turn to the Opposition Front Benches. I thank the noble Baroness, Lady Blatch, for the considerable part she has played in our consideration of the Bill. Debates have ranged far and wide and I have never failed to be impressed by the commitment and knowledge she brings to such a diverse range of issues.
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The noble Baroness, Lady Sharp, and the noble Baroness, Lady Walmsley, have been central to all our debates and I thank them for their constructive approach. It has been important to the Bill's passage that, although at times all the Front Benches have disagreed, debate has never been less than thoughtful and courteous. I am grateful to all noble Lords for that.
I should like to pay tribute to a number of noble Lords who have played an important part in our debates. Your Lordships will not be surprised that I wish to thank in particular my noble friend Lord Peston, whose contributions have never been less than stimulating and who has ensured that we have never lost sight of the importance of principle in our debates. The noble Lord, Lord Lucas, has brought his expertise to bear with such good effect. I thank the noble Lord, Lord Dearing, whose great contribution to education in this country informs and lends weight to all his contributions.
The noble Lord, Lord Alton, has throughout demonstrated his commitment to the better education of children in this country. I thank also the noble Earl, Lord Listowel, whose depth of commitment to the vulnerable and disadvantaged has kept those young people at the forefront of all our minds.
The vital issue of special educational needs has been to the fore in our debates. I am particularly grateful to the noble Lord, Lord Rix, the noble Baroness, Lady Darcy de Knayth, and the noble Lord, Lord Addington, for making it so. We have spent considerable time on those issues during the Bill's passage and I hope that all noble Lords will agree it has been to good effect.
I thank the right reverend Prelate the Bishop of Blackburn for his thoughtful and considered comments. The tone of his contributions has reflected the warm relations that exist between the department and the Church. I hope he will feel at the end of our considerations on the Bill that his glass is more than half full.
Many other noble Lords have made important contributions to our debates. I think particularly of the noble Lord, Lord Northbourne, the noble Baroness, Lady Seccombe, the noble Baroness, Lady Howe, and my noble friend Lady David. I thank them and all other noble Lords who have contributed.
This has been my first Bill as a Minister. The contributions of Members of this House more than anything have made it a fascinating and memorable experience for me. I also want to thank the Bill team that has worked with me. I have been extraordinarily blessed by such an incredible amount of talent vested in such a small group of people. It has been one of the most interesting experiences of my life to work so closely with such a talented group of people. They have steered me successfully away from many rocks.
I also want to thank parliamentary counsel. She has been excellent and worked unstintingly on the Bill. I thank her not only for her technical work but also for the quality of her advice and the approach she has taken. I give her my warmest thanks.

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Finally, I thank the doorkeepers and all the staff of the House. We have sometimes kept them here at unearthly hours, but they have never failed to be cheerful, helpful and positive. I am grateful to them.
The Bill is an important part of the Government's drive to raise standards. It signals the beginning of a second wave of reform, which we intend should be characterised by innovation and modernisation. We have now the best generation of teachers and the best ever results. Studies show that our young people are doing better than those in most other countries. We want to build on that and place greater trust in the informed professional judgment of our teachers and others on the front line. We want to support them to find new ways to innovate and raise standards.
That is at the heart of the Bill. I commend it to your Lordships' House.
Moved, That the Bill do now pass.—(Baroness Ashton of Upholland.)
Baroness Blatch: My Lords, this is the noble Baroness's first Bill, as she said. I want to put on the record my warmest congratulations and thanks to her. She has listened carefully, written copious letters of explanation, made herself available throughout the Bill and always been most courteous both in and out of the Chamber.
For the sake of time and all those noble Lords around me who are looking impatient, I do not want to name everyone the noble Baroness named. I simply wish to ask to be associated with many of the tributes she made to noble Lords around the Chamber. I would like to thank the noble Lord, Lord Davies of Oldham, and the noble Lord, Lord McIntosh of Haringey, who have been assiduous in their help to the noble Baroness.
By convention, Members of this House carry out their work assiduously. We take seriously our responsibilities to revise legislation. Individual Members on all Benches have given no quarter in their attempt to champion areas of concern, often playing devil's advocate on behalf of those on whom the legislation ultimately has an impact. Unfortunately, that cannot be said about Members of another place.
We have not made allowances for the noble Baroness, but she has risen magnificently to the challenge on her first and very major Bill. I congratulate her most warmly.
Baroness Sharp of Guildford: My Lords, when the Bill first came to this House in the spring, a number of us greeted it by asking what its purpose was. As a result of our deliberations over the past couple of months, many of us have come to understand its purpose slightly better, although it remains in many senses a portfolio Bill, as many Bills do, and at times somewhat disjointed.
I join others in paying tribute to the Minister and to the noble Lords who have been helping her: the noble Lord, Lord Davies of Oldham, and the noble Lord, Lord McIntosh of Haringey; and particularly to the Bill team. I congratulate the Minister on the spirit in
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which she has conducted proceedings. She has listened attentively to our concerns and has responded more positively than I have ever known a Minister respond by tabling many amendments taking account of the issues we raised.
It was the Minister's first Bill, and as the noble Baroness, Lady Blatch, said, she has done brilliantly. I thank all noble Lords for their help.
On Question, Bill passed, and returned to the Commons with amendments.

Football Clubs
8.27 p.m.
Lord Clark of Windermererose to ask Her Majesty's Government what proposals they have regarding the ownership of football league clubs.
The noble Lord said: My Lords, I declare an interest as a board member of the Carlisle and Cumbria United Independent Supporters Trust Limited and as the owner of a few shares in Carlisle United AFC. It is apposite that I mention Carlisle and football, because those of us from Cumbria are all aware that the first game of organised football was played on the green sward beneath the magnificent castle of Carlisle. I leave it to your Lordships' imagination to conclude what was used as the ball.
Over the past month it has become clear that there is no dispute whatever over what is the national game of England, Scotland, Wales and Northern Ireland. The fact that it could halt the rush hour in our cities and towns at 7.30 in the morning when the World Cup was being screened makes the point that our national game is football.
I would like to say how proud I was of the English football team. We did not expect much of them when they went out. They got into the last 16 and they were victims of their own success. The outcome was that the beautiful game of football was seen by millions, but there is a problem in England with the ownership of certain football clubs. Indeed, the football taskforce in its fourth report talked about football in England being damaged by scandals. Many issues are involved, but I want to concentrate on two: those of franchising and of fit and proper persons.
I wish to thank the Football Association, the Football League, Supporters Direct and the Professional Footballers Association, with whom I discussed many issues, for their co-operation in helping me to prepare for the debate. I am very much aware that they are conscious of these issues.
My locus for initiating the debate goes back to last November when Michael Knighton, the owner of my local football club, Carlisle United—he is better known as the man who nearly bought Manchester United—invited myself and the chairman of the supporters trust to help him to sell the club. We agreed to do so. Over the past eight months I have learnt much about the business of running a football club and its

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associated difficulties. I have become wise about such matters as receivership and liquidation. Carlisle United is now in voluntary administration.
I am also aware that many of the difficulties that we face in the United Kingdom emanate from the fact that we have some of the earliest football clubs. Initially that was what they were—football clubs. However, as the clubs became professional, they took advantage of the companies legislation to form limited liability companies. I sometimes wonder, if clubs had not pursued the route of the companies legislation but had instead followed the route of the industrial and provident legislation, whether they might have found it easier to tackle some of the problems with which they are faced today.
However, it is argued that football clubs are companies and therefore should be treated like any other company. Like many others, I dispute that view for many reasons. Suffice it to say that football clubs are unique and have a unique relationship with their customers, their supporters. Their supporters do not switch their support to get a better deal. We would not have many supporters at Carlisle United if that were the case. Supporters want success but that is not essential; they continue to support the same team.
In a sense that highlights the "guts" of the problem. Although football clubs are companies, they are also a community asset. That is what differentiates football clubs from other companies. It is interesting to note that when football clubs get into near terminal difficulties, communities usually rally round to save them. Whether it be Brighton or Doncaster, Bournemouth or Northampton, Portsmouth or Lincoln, fans and communities have tried to save their clubs. Indeed, one can regard ownership of a football club as 80 per cent proprietorial and 20 per cent community. Thus it follows that fans have a place in the running of football clubs. Carlisle United's trust has a handful of members—less than 1,000—who pay £3 a week into a fund to buy shares and eventually a seat on the board. That model has been followed by 56 other clubs. We are getting the message across.
But there is a further aspect of community involvement which came home to me forcefully last April. Michael Knighton rang my colleague, and later repeated to me, the devastating news that in his opinion the people of Cumbria did not deserve a Football League club and that it was his intention, unless he received an apology from the independent supporters trust and the local newspaper, News and Star, to take Carlisle United out of the Football League. He said that he would board up the ground, lock the gates and that we could all watch the weeds grow. I felt that that was wrong. I do not believe that any individual has the right to do such a thing with a community asset. I understand that a club should leave the Football League if it is not good enough or if it goes bankrupt, but a viable Football League club should not be forced to leave the League under the circumstances I have mentioned.
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I believe that it is equally wrong for people to purchase clubs to move them elsewhere. I think of Wimbledon in that regard. Only this week Clydebank was bought and will be moved to Airdrie. It will play in the Scottish League in the coming season as Airdrie United. I am delighted for the people of Airdrie. However, I am not sure that people should buy clubs and move them from one town to another. There are huge question marks in that regard. We are following an American route with which I certainly do not agree.
But perhaps the main worry of many of us who are interested in football clubs concerns the characters of a few individuals who own, or have a burning desire to own, a football club. In saying that I pay tribute to the overwhelming majority of football club chairmen, owners and directors who love their clubs and are as much fans of their clubs as those who stand on the terraces and pour their money down the drain labelled "football". However, a few individuals give cause for concern. I shall not list them as we all know who they are.
But when I read that Giovanni di Stephano is on the point of purchasing Northampton Town, I shudder. I understand that he was the right-hand man of Arcan, the Serbian warlord and indicted war criminal. He held the rank of general in the Serbian army and has been arrested on more than one occasion by the British police. He has been involved in United Nations sanction breaking and currently boasts that he is Milosevic's legal adviser and that he counts people such as Saddam Hussein as his friends. I simply pose the question: is he a fit and proper person to run a football club in the English Football League? I believe that there should be a "fit and proper" test for all Football League chairmen and directors. If it is impossible to legislate in that regard, the Football League ought to introduce such a test as a condition of membership of clubs in the league, as, indeed, does the Jockey Club.
In 1999 the owner of Doncaster Rovers, Ken Richardson, was sent to prison for four years for conspiracy to burn down the club's main stand. Following a conviction in 1984 of conspiracy to defraud in a race, the Jockey Club banned the same Mr Richardson from racing for 25 years. Doncaster Rovers might still be a member of the Football League if that league had a "fit and proper" test, as does the Jockey Club.
8.38 p.m.
Lord Henley: My Lords, like the noble Lord, Lord Clark of Windermere, I declare an interest as a supporter of Carlisle United who has followed them for many years and who lives very near to Carlisle. I believe that the first match I attended was in the 1965–66 or 1966–67 season. All I can remember is that we beat Bury 4–1.
It is a great privilege to follow the noble Lord, Lord Clark of Windermere, a fellow Cumbrian. I hope that other speakers in the debate will forgive us for taking a slightly provincial approach in raising concerns relating to our local team, Carlisle United. I

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hope that they will also recognise, as the noble Lord, Lord Clark, made clear, that the issues go much wider than Carlisle United and affect many clubs in all parts of the kingdom. Although these matters are not necessarily primarily concerns of Her Majesty's Government, they are matters that concern a large number of people up and down the country. Therefore, it is a good thing that we have found time to debate these concerns in this House.
I make it absolutely clear that, as a good Conservative, I strongly believe in the rights of property and, despite the wording of the Unstarred Question in the name of the noble Lord, Lord Clark, I do not believe that the Government should take on themselves some role involving interference in the ownership of football clubs. We have seen nationalisation in the past and we know that it does not necessarily work, and we have seen other ways of regulating ownership, which can be equally dangerous.
Having said that, I agree with the noble Lord, Lord Clark, in his use of the phrase, "a community asset". A club such as Carlisle—or any football club—is of vital importance to the people of its area and those who support it. They do so in large or smaller numbers. As we all know, the numbers of people supporting Carlisle have dropped rather dramatically of late but we hope that in due course, as the situation is resolved, the numbers will go up. They are interested in the success of their local club. When it achieves extraordinary results, that can have a much wider effect on the area itself. Many of us will remember—I believe that it was in 1973—when Sunderland won the FA Cup when it was in the Second Division. That had a knock-on effect in Sunderland and on the rest of the North East, not just in terms of general morale but also, some argued, in terms of beneficial economic effects.
A club, although it belongs to its various shareholders and sometimes to a sole owner, has a greater importance to its locality than many other—most other—businesses. That is why, although I stressed earlier my strong belief in property and the rights of property, one occasionally has to remember the words of a former leader of my party and a former Prime Minister, Mr Edward Heath, whom I do not often quote. When he referred to:
"The unpleasant and unacceptable face of capitalism",
he was making a very good point. The owners of many of these clubs must remember that they do not simply own the club for their own personal gratification and—possibly—their own enrichment. The noble Lord referred to various owners with a rather dodgy background; there are many other owners whose interest is not necessarily in football. They may be property developers, for example, and have an interest that goes beyond that of the club and involves some other end in itself. All those owners have a duty to consider the wider concerns of the community in which the club is based and from which it draws its support.
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The noble Lord, Lord Clark, discussed what has been happening at Carlisle during the past few years under the ownership of Mr Michael Knighton. He gave some idea of the strength of feeling in Carlisle about that ownership and he stressed the importance of the Carlisle United independent supporters trust, which is trying to create some support and raise money so as to buy shares in the club in due course and to get some influence over it. He also—I hope that he will not mind my mentioning this—reminded me that during the local elections earlier this year, we saw far more "Knighton Out" posters dotted around Carlisle than we did Conservative or Labour posters. That gives some idea of the strength of feeling in the area, particularly about the ownership of the club by Mr Michael Knighton and his threat to close the club. Those matters are clearly documented in the local press.
I do not wish to elaborate on that but I want to draw attention to one aspect of Mr Knighton's behaviour which bears some repetition; that is, his almost "sub-Maxwellian", if I can use that phrase, attempt to silence his critics, particularly those in the local press. A press release has recently been drawn to my attention that was issued by Carlisle United, presumably on behalf of Mr Knighton. It refers to criminal proceedings and possible legal action against Mr Knighton's detractors. Some of it deserves to be drawn to the attention of the House. I hope that noble Lords will not object if I quote one or two passages from it. It gives some idea of what I have called the sub-Maxwellian approach of Mr Knighton.
The press release is entitled:
"Criminal proceedings possible over Knighton detractors".
It goes on:
"Senior Barristers from London are pawing over reports and dossiers (five feet high)"—
I rather like the expression "pawing" over reports and dossiers five feet high—
"of the activities of those people who have tried to oust the Knighton family from the ownership of Carlisle United.
It is believed Mr Knighton has been advised by an experienced legal team that he has a strong case to bring criminal proceedings for: defamation of character, conspiracy to defraud … victimisation, false and malicious allegation, professional negligence, libel, slander",
and so on and so forth. It continues:
"Lawyers believe there may be no fewer than 13 individuals who may be named on the court petition should Michael Knighton take the lawyers advice given to him by some of the Country's leading Barristers who take on such cases".
Parts of the press release are quite laughable. It goes on to refer to:
"A new independent Owners, Chairmen and Directors Association (CDA) whose founder members include the respective Chairmen of Bristol Rovers F.C, Blackpool F.C, Southend F.C and Darlington F.C are said to be backing the case".
I should point out, as the noble Lord stated, that the former chairman of Doncaster had a criminal conviction. The chairman of Blackpool FC has recently served time for rape and the owner of Darlington FC is a convicted safebreaker.

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That is the gist of what we are hearing from Mr Knighton. As I said, it is sub-Maxwellian. It has all the feel of that other late owner of a football club, Robert Maxwell, who owned Oxford United. I refer to his use of writs and legal frighteners of a sort that many of us find particularly distasteful.
I do not suppose that Mr Knighton has any case at all; I doubt even the existence of senior lawyers offering such advice and "pawing" over dossiers some five feet high. He is simply trying to prevent legitimate criticism of his own actions as owner and former chairman by the local press and others.
I end with a brief question for the Minister. I do not expect an answer from her because I believe that it is a question for the noble Baroness's colleagues in the Department of Trade and Industry. However, I should be grateful if she would pass it on to them and arrange for an answer to be sent to me in due course.
Some years ago—I believe that it was in September 2000—Mr Knighton was disqualified from acting as a director of any company. Following that—such is the way in which such people act—he put his 24 year-old son and one other in his place as director of Carlisle United Football Club. As I understand the law—I can no doubt be corrected if I am wrong—anyone so disqualified should not be directly or, more importantly, indirectly involved in the management of a company, having been so disqualified. It seems to me, from his actions and his press release, that he has been involved, and is still actively involved, in the management of Carlisle United.
I ask the Minister to ask her colleagues in the Department of Trade and Industry—unless she has an answer tonight—how that policy is policed and what, if any, action can be taken against an individual who has been so directly or indirectly involved despite being disqualified?
8.48 p.m.
Lord Faulkner of Worcester: My Lords, football supporters everywhere will welcome this evening's debate and congratulate my noble friend Lord Clark on initiating it. As a Carlisle supporter, he is well qualified to speak about football club owners who behave in a strange way, as is the noble Lord, Lord Henley. Both noble Lords spoke effectively and with great force.
This is a most timely debate. As the euphoria of the World Cup disappears, football clubs across the country are facing the reality of worsening economic circumstances, which are caused mainly, but not entirely, by the collapse of ITV Digital. There will be many more clubs in financial difficulty as owners who have hitherto been regarded as benefactors attempt to recover the money that they put into clubs or seek to cash in on whatever assets their club possesses, whether they are players who have a value in the transfer market or—much more threatening for the club's survival—the property that it owns.
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I have two unpaid interests which I should declare in this debate. First, I am associate director of Oxford United Football Club, which plays in the third division of the Football League, and which was rescued from extinction by its present owner, Mr Firoz Kassam. I was previously a member of the board of Brighton and Hove Albion, appointed as a "public interest" director on the advice of the Football Association at a time when the club was close to disappearing and there were rival shareholder factions whose disagreements, had they continued, could have proved fatal. Secondly, I am an elected member of the Dons Trust, which was set up under the auspices of Supporters Direct, originally to give supporters of Wimbledon Football Club a stake in that club and a say in its decision-making. I say "originally" because since the Dons Trust was formed, events at the club have taken a bizarre and disgraceful turn, as I shall explain in a moment.
The three clubs with which I have been associated, Brighton, Oxford and Wimbledon, have one thing in common: each faced enormous difficulties over its grounds. Brighton's and Wimbledon's were sold by their owners, who profited immensely in the process but failed to provide or invest in a new ground. In Oxford, work started on a new stadium but was suspended with the ground half built. Once Mr Kassam took over, he got the stadium finished and that club can now face the future with confidence. The boardroom disputes at Brighton were also resolved. The club moved back into the city and in successive years won the third and second division championships. They now await the go-ahead for a new stadium and the outlook there is much more cheerful.
However, that is not so at Wimbledon. I start with a little history. Today's football club was founded in 1889 as Wimbledon Old Centrals and played on Wimbledon Common. It moved to Plough Lane in 1912, and stayed there in the heart of the local community until 1991 when it embarked on what was expected to be a temporary ground share in Crystal Palace's ground in the neighbouring borough of Croydon as it was decided—wrongly, as a recent feasibility study demonstrated—that the Plough Lane ground could not be brought up to the all-seated standards demanded by the Taylor report after the Hillsborough disaster.
During the 103 years of its existence, the club enjoyed periods of extraordinary success, including winning both the FA Amateur Cup and the FA Cup, and was elected to the Football League in 1977. Within nine years it had been promoted to the highest league, where it stayed until its relegation two years ago. During the 1980s and 1990s the principal shareholder and owner of the club was Mr Sam Hammam, a charismatic though at times controversial figure who sought, often successfully, to motivate his players by unconventional means. Mr Hammam bought the disused Plough Lane ground from the club and then, in 1994, sold it to Safeway for development for £8 million. Most football supporters believe that the

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gain which was realised, well over £7 million, should have gone back to the club and been invested in a new ground.
In 1997 Mr Hammam sold 80 per cent of his shareholding to a Norwegian company, AKER RGI, for around £25 million. It is believed that the Norwegians, Mr Rokke and Mr Gjelsten, invested in Wimbledon because they believed that the club would move to Dublin and take its Premier League membership with it. To the short-lived relief of its supporters, whose views had not been sought on any of those matters, the English and Irish football authorities blocked that move.
The next step came in April 2000 when Mr Hammam sold his remaining interest to a company in which the current club chairman, Mr Charles Koppel, is a shareholder. Relegation from the Premier League followed immediately. There then followed a campaign led by Mr Koppel backed by expensive lawyers and PR consultants to win support for the club's move from Selhurst Park, not to a ground in Wimbledon, elsewhere in Merton or, indeed, anywhere in London, but to Milton Keynes, over 60 miles away, where developers offered it a ground, effectively for nothing.
The matter was considered by a series of football authority committees and commissions and was finally resolved by a three-man team on 28th May. It received evidence and submissions from a wide range of organisations, including the Football Association, Wimbledon supporters and Merton Council, all of which were vehemently opposed to the move to Milton Keynes.
The commission's report is extraordinary. It bears reading and can be found on the FA's website. It contains these words:
"We find the cherished and fundamental principles of football in this country in relation to the pyramid structure and promotion and relegation on sporting criteria alone, admirable. Likewise we respect, value and would seek to uphold the community basis of football clubs.
We do not wish to see clubs attempting to circumvent the pyramid structure by ditching their communities and metamorphosising"—
that is not a word in my dictionary but it is in the report—
"in new, more attractive areas. Nor do we wish, any more than the football authorities or supporters, for franchise football to arrive on these shores".
Yet, despite those admirable sentiments, the commission determined by a two to one majority to approve the move to Milton Keynes. It appears that the only piece of evidence which influenced it was the threat by the owners to liquidate the club if the verdict went against it. In what is, frankly, an insult to the intelligence, the commission suggested that in perpetuity there should be a corner of Milton Keynes that would be for ever Wimbledon; that street names be changed to represent names similar to those in Wimbledon; that the area of the stadium be called "Wimbledon Park" and that special subsidised trains run from Milton Keynes, and so forth.
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The truth is that the commission is allowing the owners to steal the club from its supporters and the community of Wimbledon. It is establishing a precedent which will allow other Football League sides to be relocated by their owners anywhere in the country and the principle of a franchise is being established for league membership. There is no right of appeal against the commission's decision. The football authorities say they oppose it but can do nothing.
The one remaining hope is the Independent Football Commission, the final stage in the complaints hierarchy set up as a result of the recommendation in the fourth report of the Football Task Force, to which my noble friend referred and on which I had the honour to serve as vice-chairman. The phrase,
"the final stage in the complaints hierarchy",
comes from the chairman, Professor Derek Fraser. Professor Fraser speaks of,
"its potential for ensuring public confidence in what is our national game, a national institution and an important part of our culture and heritage".
The Wimbledon case will be its first big test and will be crucial in establishing whether self-regulation of football can really work and establish public confidence. It is that which lies at the heart of the debate tonight and in the Unstarred Question asked by my noble friend. I hope that the answer he receives will be that the Government see the real owners of football clubs as being the supporters; the people who follow the team in good times and bad over the years.
Directors and owners should see themselves primarily as guardians of a public asset, as temporary custodians of an entity in which others, such as supporters and the local community, have a genuine stake. In the case of Wimbledon, the club existed for over 100 years before the present owners took it over. It is therefore not just another investment for them to do with what they like.
The supporters, to their immense credit, are determined to keep senior football going in Wimbledon and through the Dons Trust have formed a new club, AFC Wimbledon, which won election to the Combined Counties League. While there is still uncertainty about where the other Wimbledon club will play next season—incidentally, it is now known mainly as "Franchise FC" not "Wimbledon FC"—AFC Wimbledon will start in August at Kingstonian's ground, just down the road in New Malden. I wish them well and so, I hope, do all Members of this House.
9 p.m.
Lord Burlison: My Lords, I thank my noble friend Lord Clark of Windermere for bringing this debate before the House and for giving us the opportunity to talk about football when the rest of the country is probably fed up to the back teeth with it. I agree with my noble friend's suggestion that there is a need for credible people to run football clubs. I hope that Carlisle United resolves its problems before the start of the new season. The club has a proud history and has actually played in each of the leagues. I am sure I do

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not have to tell my noble friend Lord Clark that for a very short time the club topped the whole of the Football League—a record that I wish Hartlepool could reflect on.
At this point I should declare an interest, as I am a president of Hartlepool United. At the outset of my remarks, I should stress that there are many good chairmen and directors of football clubs in this country. In fact, the great majority of people who run football clubs are honest, hard-working and care deeply about the game. I know that both Freddy Shepherd of Newcastle United and Bob Murray of Sunderland are respected for their loyalty and commitment to their own clubs, and to the North East generally. They both play a very active role in their respective communities—long may they continue to do so.
I do not wish to compare the activities of the premier league clubs with some of the things that have gone on in the lower leagues. I am clearly of the view that the problems of the premier league teams are different from those experienced by the third and fourth division teams. However, I am equally certain that all football clubs should be owned by decent people who have a responsibility to the area where they are located, as well as to the shareholders or the owners of the football club.
I should like to take a little time to talk about some of the problems that the smaller clubs have in modern-day football. It has been my experience, both as a player and as someone who has been involved in the game, to know that smaller clubs could not exist without the commitment and financial resources of the chairman and the directors. For example, in the case of Hartlepool—my association with them goes back many years; in fact, to the 1950s—I know that all the chairmen have been reputable, caring people who have wanted to do a job not only for the club but also for the town.
I also know that the club takes pride in its financial transparency. The club secretary, Maureen Smith, is always quite happy to give doubters a run-down on the system used to check the gate receipts and other aspects of the club's finances. I am also pleased to see that every payment made, whether it be to players or staff, is declared to the taxman; of course, that is how is should be in any case. I am also mindful of the role that the chairman plays and of how difficult it would be for the club to survive if Ken Hodcroft and the company for which he works—a Norwegian oil company—withdrew their support.
Ken not only runs the club with his fellow directors, Harold Hornsey and Ian Prescott, but also contributes most of his spare time to the club's affairs. I am deeply sorry that both he and the town were not rewarded last year by getting promotion, which they narrowly missed. They have now missed it for three years running. However, as the team was clearly the best side in the third division at the end of the season, I am sure that they will achieve promotion this year without the need to involve themselves in the play offs.
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I should like to make a point on crowd behaviour. Once again, perhaps I may use my own club Hartlepool to demonstrate my point. We have an excellent crowd at Hartlepool. A lot of credit for this must go to the directors, especially the manager Chris Turner who spends time on talk-ins with the supporters and has generally built up a good rapport with them.
An outstanding example of how the club views its role in this respect was seen a couple of years ago during a Sky television broadcast, which featured Halifax and Hartlepool in a league game. Unrest broke out among the Hartlepool supporters because, due to ground alternations, they had been put into a corner of the ground that was the worst area from which to see the game. That is not to blame Halifax in any way. Indeed, I am deeply sorry that Halifax lost its league status last year and has been relegated. I have many happy memories of the Shay, and I hope that the club will be back into league football very soon. However, on seeing the crowd problems arising, the then chairman of Hartlepool, Harold Hornsey, waded into the supporters to calm them down. I thought that that was an absolutely magnificent gesture. It was a clear indication of that man's love for the club, and for football. I wonder how many other chairman would do the same. I can recall watching the broadcast on Sky television on that occasion. The only comment made on the programme was, "There's an official trying to help". I thought that the chairman's efforts deserved something a little better than that simple comment.
The current crisis with television cash is a worry. I have no doubt that too many clubs have become much too reliant on their share of the money. If the issue is not satisfactorily resolved, it may have a profound effect on many clubs. I know that some of the first division clubs, especially those with heavy wage bills, will find it very difficult to keep going on the same basis. However, I believe that many of the third and fourth division clubs will manage because they have smaller wage bills; and, in general, they raise their own players—which I think is the way forward for the future.
We have just had the experience of the World Cup, which I felt we were well placed to win this time had we just been a little hungrier, say, like the Irish or the Koreans. Nevertheless, it was a good performance upon which I believe we can build for the year 2006. It may stand us in good stead for the European championships in 2004. We must have a vibrant system for producing young players for the future. The Youth Development Fund, with its supporting agencies, is an excellent way to develop young players but it needs to have substantially better funding. We should not leave this solely to the football clubs or to the colleges where they run academies. Somewhere in between, I believe that we have the right ingredients to, once again, put Britain on top of the football world. To achieve this goal we must have credible people running football. We must ensure that smaller clubs that play by the rules are helped to survive.
9.8 p.m.
Lord Addington: My Lords, we must thank the noble Lord, Lord Clark, for bringing this matter to our attention.
On the face of it, football merely looks like a professional occupation consisting of men running around and people trying to make money by attracting fans and selling TV rights. But it is not. Indeed virtually all professional sport involves a degree of emotion and time spent trying to connect with the soul of a community. What they mean to that community is one of the reasons football teams survive.
Only we have a structure where stray teams can struggle on; for instance, not so much moving up and down the league tables, but struggling on in the middle of nowhere, achieving nothing and not progressing for a long time. That is the fate of most professional sporting clubs for most of the time; it has to be.
That is why this is such an interesting subject. It is not about economics; it is about what a professional sporting activity designed to attract viewers and fans means to the community in which it finds itself. The same is true of Rugby League and other professional sports, though Rugby League is probably the only one that comes close, with the exception of one or two Rugby Union clubs in certain parts of the country.
So what happens in professional football is of great interest to government. Many of the points raised by the noble Lord, Lord Clark, are interesting, but the Government do not have much control over them. That is the problem we face. They are professional activities selling a form of entertainment.
When it comes to the idea of franchising we must be extremely careful. The Americans have proven that the best way to make money out of sport is to have a guaranteed franchise with a guaranteed feed-in of players from the selection categories. American baseball and football displays that. Once a team has achieved its status it is not relegated. So it can take the bad seasons. It will always have the right level of competition to attract the fans. That is a way that makes money out of sport. But it runs totally against our culture.
The amount of hurt that seems to come out when people do not feel that those in charge of their sporting club are putting enough into it is a flip side to the actual misbehaviour of those at the top. I come from Norwich. We had a man called Robert Chase in charge of our football team who was hounded out of that position. "Chase out" became a chant that rang throughout the city. He was running it as a professional organisation to make money and it was seen as not the thing to do. He was expected to pump money in to ensure that the team remained at the top, but he did not. Alan Sugar at Tottenham Hotspur received a similar version of that reaction; keeping the club financially stable but not spending money—I hasten to add that that information came from a Tottenham fan.
But the idea that the football club is something different goes against its legal status and the reality. Those two situations along with the amount of money
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being pumped into football have come to a head. In addition we have the withdrawal of money from ITV Digital for those clubs below the Premiership. Football may well be at a cross-roads. It is a fashionable image of late; for instance, it is now the middle class game of choice. People who 10 years ago would not be able to name their local football team now talk about it quite knowledgeably, in wine bars as opposed to pubs. It happened briefly in Rugby Union and that all went sour. Once the corporate hospitality boxes become a little more difficult to sell, one wonders what will happen. And if anything becomes fashionable, by the rules of history it will become unfashionable and something else will replace it.
So in football we seem to have a cultural position that does not respond to the laws of the market. Will the Government intervene to try to encourage the FA to ensure that we have fit and proper tests or a version of them? In theory we may think that is a good idea. Then we consider how on earth we can draw them up. Do we take into account spent convictions, convictions for certain types of activity or somebody who is simply regarded as being unpleasant? Civil rights lawyers are salivating at the thought. We could go on forever with that argument.
Lord Faulkner of Worcester: My Lords, can the noble Lord say why the Jockey Club is able to exercise rules exactly like that and keep out of racing people whom it believes are not fit and proper persons?
Lord Addington: My Lords, I wonder how many people in the Jockey Club are dealing with limited companies. These are limited companies. The Football Association will have to take that on board. The Government will not be able to. And I am sure the lawyers will get round to the Jockey Club eventually.
In calling for such changes, we must be careful about what we are trying to achieve. If the Government are prepared to say that it is part of the cultural integrity of the community and that they defend local football clubs, that is one thing. However, if they are merely letting businesses carry on, that is something else. I do not like what I am saying, but it is the reality of the situation. The economics are probably against the nature and structure of football and the many full-time professional clubs.
We must address the facts. I do not say that it is easy but we must square up to the task. I approve of promotion and relegation. It encourages people to take part in sport, especially at the highest level, but it puts a strain on the structure of smaller clubs which aspire to climb higher. It makes them vulnerable to the supposed "white knight" who comes in to make money, or for an ego boost, or because he genuinely loves the sport or the club. It is in the nature of things that they will come together.
This is a speech in which I am afraid I can offer arguments but not many answers. But the people in football are the only ones who can deal with the ownership issue. As regards moving clubs around, the Football Association must square up to the fact that if it wants the game to continue as it is, it must defend the

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smaller clubs, which realistically will not make the premier league within the lifetime of anyone here today—that is, unless some others are struck by lightning.
We must applaud the greater involvement of fans in the running of clubs. However, in professional support we have a horrible situation in that we are all heavily involved. Unless we are prepared to move in and take responsibility for the financial running of the clubs, we cannot make many rules. I can say only that we must remind the fans when they complain, "Remember that when people are making money out of your club and are buying players, you are the ones who ultimately will have to fund that either through a change in your habits or through your pockets".
9.16 p.m.
Baroness Buscombe: My Lords, I congratulate the noble Lord, Lord Clark of Windermere, on asking this Unstarred Question. I have canvassed a good number of people of all ages for their response to the question. The overwhelming response has been, "It's up to the clubs, not the Government, to run their show". That said, I quickly turn to an extract of the third report of the Football Task Force, Investing in the Community, wherein it is stated:
"The ownership of football clubs—particularly those in the lower divisions—needs reappraisal. New models of ownership, such as supporters' trusts and community trusts, could provide a means of improving increasing democracy and accountability whilst building strong community links for the long term".
In other words, reform of the structure and the running of clubs is to be encouraged and we very much support that view.
While it is important not to lose sight of the fact that football has a longstanding, deep-rooted amateur tradition, and while that must be a good thing, there is clearly a need to question whether that amateur tradition can continue to survive when focusing upon the structure and management of the clubs. I must confess to your Lordships that while researching the question, I found a paper written by Tom Cannon and Sean Hamil, which is included in a book entitled Football in the Digital Age: Who's game is it anyway?, to be particularly helpful, for which I thank the House of Lords Librarians. The chapter is entitled "Reforming football's boardrooms" and I shall quote from it briefly:
"When the structure of the clubs is examined more deeply, the amateur tradition continues to dominate, with few dedicated or qualified staff in key business areas and little dedicated training and development in leisure or sports management, marketing, customer service, media relations, finance or people management. This amateur tradition is suddenly faced with taking on new roles, which are expected of their enterprises, and of their fans … the shareholders, the directors and the employees of the businesses".
The paper goes on to state that there needs to be a clearer view or set of views at the top about the levels of professionalism and the true skills that are required to manage clubs efficiently. And the challenges facing football clubs have to be addressed at a professional and strategic level. At the core has to be a strong sense of the club's purpose.
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While individual clubs are generally small businesses and have their own sense of identity, collectively, football is now big business and as such is, as we are now witnessing, vulnerable to risk and new challenges as any other business, particularly given its recent changing environment and funding issues.
With regard to funding, will the Minister give us some reassurance today in respect of those clubs which have been so badly affected—indeed, endangered—by the failure of ITV Digital?
Although we do not believe that the Government should regulate in this area, they have a responsibility to put pressure on those responsible for the failure of ITV Digital. They should accept that responsibility and act accordingly. The desirability for those responsible for that failure to compensate, at least in part, those clubs that are now especially vulnerable is surely overwhelming. Does the Minister agree?
Many of those clubs will struggle to survive because of the loss of their income stream. In the end, football needs to negotiate new television deals. For that reason, are the Government concerned at the prospect that the new digital terrestrial service contract to be announced tomorrow will be for only free-to-air with no pay-per-view services? How can the Nationwide League clubs then be expected to exploit the commercial opportunity of negotiating a new pay-per-view contract with another broadcaster?
Free-to-air digital television only, with no option for pay-per-view, spells no competition for bidding for sports rights such as that for the Nationwide League. Nationwide League and other fixtures are clearly unsuitable for normal, analogue, free-to-air channels such as BBC 1 and Channel 3 because analogue does not have the spectrum. However, football league club matches are ideal for pay-per-view digital channels. Do the Government have a strategy for those clubs, especially in relation to their ability to resell the rights competitively?
There are also real concerns about the internal affairs of some clubs. For example, I understand that the directors of York City circumvented the rules by placing the club's assets, including the ground, into a holding company, with the result that when they sold the club they were able to sell the assets separately. The affairs of Carlisle United Football Club also make disturbing reading. I listened with great interest to what the noble Lord, Lord Clark, and my noble friend Lord Henley said about the club and its now uncertain future.
I also listened with interest to what the noble Lord, Lord Faulkner of Worcester, had to say about Wimbledon Football Club. I declare an interest as caring very much about the future of Wimbledon Football Club and the proposed move to Milton Keynes, because I was brought up near Wimbledon. Although my knowledge of the subject is not deep, I understand the geography and when decisions clearly offend both good common sense and the wish of the community—in this instance, the people of Wimbledon. After all, football clubs stem from and should surely remain at the heart of community life.

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Watching football is one of the few universally popular pastimes that brings and holds communities together. It binds generations.
We understand that some would like the Government to be given power to intervene in the running of clubs—for example, with regard to ticket pricing and corporate hospitality—on behalf of the fans. It must be said that fans are already more inconvenienced by the timing of games shown live on television.
It is reasonable to propose that the Football Association should have greater regard to the probity and overall suitability of football club directors. Frankly, events have shown that some of them are simply not up to the job—something to which several of your Lordships alluded. However, that is not something for which we should or could legislate. One cannot dictate calibre, and I suggest that strong supporter involvement in the running of clubs should, in theory at least, help to confront and expose shortcomings of directors. It should also deter those who think that ownership of a club is a route to a fast buck.
As we have heard, the Government set up Supporters Direct to help groups of fans to acquire a stake in the ownership of their club. Several such supporters' trusts have helped to rescue clubs from bankruptcy, including clubs in Lincoln and Northampton. We agree that that is a good idea and understand that, as of 20th June, 59 clubs now have established trusts; 22 trusts have board representation; trusts own shares in 26 clubs; and trusts have been agreed at a further 14 clubs for later this year.
At the end of the day, it must be for the individual club to decide, within its local community, how it will be managed. However, I shall end on an upbeat note by offering to your Lordships 10 reasons why the Football League matters. The Football League is the most watched live sporting spectacle in Europe. This season, over 15 million people watched the regular games and the play-offs. Those are the best attendance figures for 33 years. With crowds averaging over 17,000, Division One can boast attendances that are twice those of the equivalent divisions in Italy and France and are 50 per cent greater than those in Spain and Germany. Attendances in Divisions Two and Three are more than double the equivalent leagues in every other major footballing nation.
Last season, Football League matches were shown in 136 countries, including countries as diverse as Botswana, Iceland and Iraq. Twelve of England's 23-man World Cup squad and 12 of England's 22-man squad for the European under-21 championship have played in the Football League. The Football League has proved, time and again, to be one of the most innovative forces in the modern game. Promotion and relegation, the play-offs, three points for a win, the golden goal and the 10-yard rule were all seen for the first time in professional football in Football League competitions. All 72 league clubs operate youth development programmes, 19 at academy level. Over 9,000 young footballers are on the books of our clubs,
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providing English football with its next generation of talent. In 1986, in tandem with the Professional Footballers' Association, the Football League founded Football in the Community. Each year, more than 1.25 million children and 7,000 schools take part. We remain the only country to place such a level of emphasis and financial investment on nurturing relations between football clubs and their local community.
Since the Taylor report, the architecture of British football has been transformed. Today, 35 Football League clubs have all-seater stadia, and most of those grounds are capable of holding in excess of 20,000 fans. Last season, the Football League distributed £100 million of revenue to clubs. The Worthington Cup, which generates £80 million, is the most important redistributive mechanism left in professional football. Football League clubs employ over 2,500 professional footballers and thousands more full-time and part-time administrative and match-day staff.
There is plenty to be proud of. We wish the Football League well and hope that it can overcome the various challenges that it faces.
9.27 p.m.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, I am also grateful to my noble friend for asking the Unstarred Question. The ownership of professional football clubs is a subject of great interest to many in the House and far beyond. That is especially true at the moment.
As the noble Baroness, Lady Buscombe, said, many Nationwide Football League clubs are struggling to adjust to the changed broadcasting conditions that followed the collapse of ITV Digital. A great many people follow the fortunes of their chosen club, as well as supporting England in the World Cup. In professing allegiance to an individual club, most followers of the sport take a close interest in the control and direction of that club. The extent of that interest has been clear in our debate.
Many people also make considerable emotional investment in the performance of their chosen team. As every speaker has said, it is, naturally, important to them to feel confident that the teams are in hands that are competent and well intentioned. More than that, supporters require the owners of their club to conduct themselves as disinterestedly as, they imagine, they would themselves, if given the opportunity. It is a special form of disinterestedness, for, in the eyes of many supporters, the ideal controller of a football club must combine a fiercely partisan approach to the advancement of the team's sporting interests with an ability to put aside all thought of personal gain. My remarks are not intended as satire; there is a contradiction. Those who own and administer football clubs must strive to combine the roles of supporter and businessman or businesswoman.
As the noble Baroness has just remarked, football is now a big business. Last year it turned over collectively more than £1 billion for the first time. As such, the

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sport must accept the full range of social responsibilities that come with such a position. It must also accept that its business activities and its corporate behaviour are, where appropriate, subject to statutory regulatory scrutiny. In common with other business sectors of comparable size, football must meet the standards required by the Companies Acts and by competition legislation, both of which apply to businesses across the economy. That point was demonstrated in the decision reached by the Competition Commission to refuse BskyB's attempt to acquire control of Manchester United in 1998.
At this point I should say to the noble Lord, Lord Henley, that of course I shall pass his question to my colleagues in the DTI since I do not have the answer tonight. However, I agree with him and with the noble Lord, Lord Addington, about the role of government. Any discussion of this subject must begin from a recognition that the internal regulation of football is a matter for its governing bodies, not for the Government. The Football Association, the Premiership and the Nationwide Football League all have detailed regulations governing the ownership and corporate behaviour of clubs.
But that is not to say that the Government have ignored the undeniable problems of ownership which have arisen in football. Over recent years the behaviour of a small minority of club chairmen has brought the sport into some disrepute. As noble Lords have pointed out, the report of the Football Task Force on commercial issues in football recommended a role for its proposed regulator in enforcing a requirement that only "fit and proper" persons should be allowed to run clubs.
The Government considered that recommendation very carefully, as did the football authorities. "Fit and proper person" requirements exist in a number of other fields. For example, the issue of broadcasting licences is subject to such a test and the failure of individuals to pass that test has led to the revocation of radio licences in the past. But outside the wholly private sphere, such tests work only where they form part of a statutory regulatory structure.
While clubs are private businesses, they are also public companies. They are subject to the regulations of governing bodies in so far as is appropriate for the purposes of fair sporting competition. Football has concluded that it would be impossible to enforce a "fit and proper person" requirement as it would not survive legal challenge. That is not a circular argument, although I realise that it is unwelcome to some. The Government have decided that a statutory, or quasi-statutory, regulatory structure for football cannot be justified. As such, we agree with the sport's governing bodies that a "fit and proper person" requirement would not be workable in football.
The Independent Football Commission, launched by the Government and the football authorities in March of this year as part of the response to the Football Task Force, marks a significant improvement on the approach that was originally proposed. Its members are fully independent both of
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the clubs and of the governing bodies, as well as of the supporters' associations. It forms the apex of football's customer service structure, as well as considering a number of general commercial issues in football, with reviews of merchandising and ticketing arrangements as two of its first tasks.
However, the commission has no responsibility with regard to issues of club ownership; rather, it has been established to consider, where appropriate, what might be called manifestations of poor corporate governance, in particular poor levels of customer service and overcharging. The Government believe that those kinds of issues are more immediately important to football supporters than matters of ownership.
As my noble friend Lord Faulkner mentioned, the commission will consider the circumstances in which Wimbledon Football Club has been permitted to relocate to Milton Keynes. The Government are confident that the commission's consideration will be a balanced one. Notwithstanding that, this is essentially a matter for football and, in particular, for the Football League. As my noble friend said, an independent Football Association panel accepted in May that Wimbledon has no future in the London Borough of Merton. However reluctantly, the league has accepted that decision.
The FA has expressed its concern that the decision,
"should not in any way be seen as a precedent".
But there are special circumstances. The club has been homeless for 11 years and is losing £20,000 a day. The Government agree with this view and prefer to see the Wimbledon decision as a one-off and not as the beginning of a football franchise system.
My noble friends Lord Clark and Lord Faulkner are right to be concerned about the prospect of British football adopting a franchise system. In the United States, the right to compete in the National Football League—gridiron, not soccer—is, in certain circumstances, auctioned off to the city which bids the highest. The Government agree that such a system runs counter to the historic traditions of British football. We are confident that the sport's governing body shares that view.
In responding to the independent panel's decision on Wimbledon, the Football League was reluctant to override its regulations governing the location of football clubs. The Government believe that that reluctance, which is fully shared by the FA, speaks volumes. There is no appetite for a franchising system on the part of the football authorities. They see the Wimbledon case as an exceptional reaction to the very specific circumstances of an individual club, and the Government share that view.
However, I join my noble friend Lord Faulkner and add my best wishes to the many Wimbledon supporters who have helped to set up the newly-formed AFC Wimbledon, which will carry on the proud tradition of football in the London Borough of Merton.

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My noble friend Lord Clark and the noble Lord, Lord Healey, referred in some detail to the recent events at Carlisle United Football Club.
Lord Henley: My Lords, the Minister has mistaken me for the noble Lord, Lord Healey.
Baroness Blackstone: My Lords, I am sorry. Did I say, "Healey"? I do apologise.
I do not object at all to what the noble Lord, Lord Henley, said about taking a provincial approach. As a Londoner, the provinces are very important in this respect. My department is fully aware of the concerns of the club's supporters. The Minister for Sport received a substantial petition last summer as part of the "Save our Club" campaign organised by the Carlisle News and Star. My right honourable friend was delighted to accept that petition and to set out his personal concern for the club in the pages of the News and Star.
The Government remain fully aware of the important roles played by clubs such as Carlisle in their local communities, but hard cases make bad law. The special circumstances of individual clubs do not make the proposal to introduce a fit and proper person requirement either more workable or more secure in the face of a legal challenge.
The noble Baroness, Lady Buscombe, asked about Nationwide League clubs and pay-per-view broadcasting. The sale of the broadcasting rights is a matter for the league and for broadcasters. Whatever the ITC decides about the future of ITV Digital's frequencies there will still be a possibility of pay-per-view football rights. But it is not for the Government to interfere in that market.
As my noble friends Lord Clark of Windermere and Lord Burlison rightly said, most football clubs are owned and run by people whose sporting and ethical credentials are above question—including Hartlepool United. Incidentally, I wish Hartlepool better luck next year. But the Government do not underestimate
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the potential for club chairmen and owners to exploit both football teams and the communities that follow them.
Noble Lords have referred to a number of possible measures which have been suggested in the past to ensure that ill-intentioned individuals do not damage the interests of the national sport. The Government believe that there is a valid alternative approach. Rather than seeking to exclude individuals or groups from club ownership, the better solution may well be to encourage supporters to take an active role in the running of their clubs. To its great credit, the Football Task Force enthusiastically proposed such an approach and the Government have fully implemented its recommendations in this area.
I am extremely grateful for what has been said by all speakers in the debate. I should like to close on a positive note about the value of Supporters Direct. The Government underestimate neither the importance of football in our national life nor its vulnerability to financial exploitation. However, the accepted limits of government intervention in the workings of all sectors of the economy must apply to football too.
Short of outright criminality, it is right that the Government should have no role in dictating who should or should not own a football club unless competition issues are involved. But there are other approaches. The Government take some pride in their role in establishing and funding Supporters Direct. I am grateful for what the noble Lord, Lord Addington, said. The consolidation of the involvement of supporters in the ownership and running of professional football clubs is an admirable aim in itself. It also represents a possible solution to many of the historic ills of the sport.
We have had a very useful debate. Once again, I am grateful to my noble friend for raising these important issues and to all who have taken part in the debate.
House adjourned at seventeen minutes before ten o'clock.

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