Sitting of 27 November 2002

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

    Police Service of Northern Ireland
    Helen Jackson: If he will make a statement on recent reforms to the Police Service of Northern Ireland. [81599]
    The Minister of State, Northern Ireland Office (Jane Kennedy): I refer my hon. Friend to the statement that my right hon. Friend the Secretary of State for Northern Ireland made on 25 November. The Government remain committed to the new beginning to policing, building on the implementation of the recommendations of the independent commission on policing for Northern Ireland. Working with the police and the Policing Board, we continue to make steady progress across a range of areas.
    Helen Jackson: Does the Minister agree that we now have a unique opportunity—while the Assembly is in recession, so to speak—to ensure that, through policing, we put in place the final, difficult ingredients? Is it not the case that any party that wants to play a constitutional role in the government of Northern Ireland must play a role in its civil police service, and must recognise that that is part of politics—
    Mr. Speaker: Order. I think that the Minister gets the drift.
    Jane Kennedy: I am grateful to my hon. Friend for making that point. The Government's aim is to develop a modern police service that is both effective and widely accepted throughout the society that it serves. As my right hon. Friend the Prime Minister said on 17 October, the concept of republicans being on the Policing Board while maintaining an active paramilitary organisation outside of the law is an absurdity.
    Mr.Lembit Öpik: Given the evident need for good, well-qualified police officers in Northern Ireland, of whatever religion, will the Minister please explain the consequences if a police recruit from one
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    religious denomination or another pulls out during the qualification process? Is there any pressure for a reciprocal withdrawal to maintain the 50:50 ratio?
    Jane Kennedy: The hon. Gentleman knows the detail of the arrangements that bring into effect the 50:50 recruitment of Catholics and Protestants to the Northern Ireland police service. He also understands that our efforts are directed towards achieving a more accountable, representative and effective police force. It is worth noting that 35 per cent. of those applying to join PSNI over the last year have come from the Catholic community. I look forward to that trend continuing over the coming years.
    Mr. Seamus Mallon: I know that the Minister is convinced that policing is a crucial part of the creation of peace and political stability in Northern Ireland. I note with more than a little pleasure that 14 of the amendments that have been made will be instantly recognised by those who sat on the last police Bill Committee. Will she give an assurance that, this time, nobody will be allowed to play political games with the very important issue of policing, and that no party or Government will be allowed to use it as a bargaining chip for political reasons?
    Jane Kennedy: The forthcoming Bill will cover the commitments, to which the hon. Gentleman refers, to legislative change that we made in the updated Patten implementation plan that we published in August last year, and other issues that have arisen during the review.
    Lady Hermon: Given that the Patten report specifically warned against the balkanisation of policing in Northern Ireland, can the Minister assure me that the new policing proposals announced this week will not lead to any such balkanisation?
    Jane Kennedy: The hon. Lady knows that we are in the early stages of discussing the detail of the Bill. Her specific point would not be any part of our intention in developing the new proposals surrounding the accountability of policing in Northern Ireland. We will debate the detail as we proceed through the parliamentary stages of the Bill, and I hope that we can thrash out all those details in debate in time-honoured fashion.
    Mr. Gregory Campbell: Does the Minister accept that further concessions on policing, such as permitting terrorists to sit on district policing partnerships, will be viewed across the community in Northern Ireland, in Unionist and nationalist areas, as totally unacceptable?
    Jane Kennedy: The clauses that we have published, which we hope will form part of the Bill, give effect to the commitments that we made at the Weston Park talks last year. Those commitments, once enacted, will fully reflect the Patten recommendations. Had the Government contemplated further concessions, however, they would have been included in those clauses.
    Mr. John Taylor: As a precondition of convicted terrorists sitting as independent members of

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    district policing partnerships, the Secretary of State has said that there must be "acts of completion" by the IRA. Will the Minister confirm that these "acts of completion" must include decommissioning and, crucially, disbandment?
    Jane Kennedy: We gave a commitment to consider in the context of the policing review the disqualification rules for membership of DPPs and, indeed, the powers of the Belfast DPP sub-groups to which the hon. Member for North Down (Lady Hermon) referred. However, we are not yet persuaded that the time is right to introduce changes in these areas, so they will not be included in the Bill. It is our view that the removal of the disqualification of ex-prisoners could happen only in the context of acts of completion as envisaged by my right hon. Friend the Prime Minister in his speech in Belfast last month. I could not improve on his words.

    Northern Ireland Assembly
    Simon Hughes: What the preconditions are for the ending of the suspension of the Northern Ireland Assembly; and if he will make a statement. [81600]
    The Secretary of State for Northern Ireland (Mr. Paul Murphy): The devolved institutions can operate only if there is trust that all parties to the Belfast agreement are committed to fulfilling their obligations, including the commitment to exclusively democratic and peaceful means. Rebuilding trust was a key focus of the talks at Parliament buildings last Thursday. We are urgently seeking with the Irish Government and the parties in Northern Ireland the basis on which that trust can be restored.
    Simon Hughes: The House will accept entirely the premise that the Secretary of State set out. Does he agree that it would therefore be timely for the Government to initiate in this context a complete review of the Good Friday agreement as provided for under paragraph 8 of the agreement? Does he accept that, to see a good way forward, one has to predict all the foreseeable difficulties, and they must include how Members of the Northern Ireland Assembly are designated? That was a major stumbling block a year ago.
    Mr. Murphy: As the hon. Gentleman knows, we will conduct the review under paragraph 7 of the agreement. That review gives all parties in the Assembly—those that choose to turn up to the meetings in Parliament buildings, such as the one that we held last week and that we will hold tomorrow—the opportunity to put their cards on the table and to make the points that they want to make.
    The hon. Gentleman referred specifically to designation. He will know that his colleagues in the Alliance party raised this issue last week. Of course, it is important that all of us get round the table, talk about the issues and resolve the current impasse.
    Mr. John Hume: Given that for the first time in history the people of Ireland, north and south, have overwhelmingly, by voting for the agreement, stated how they wish to live together, it is therefore the duty of
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    all true democrats to implement the will of the people. That sends a message to certain people on both sides. It sends a message to the paramilitaries such as the IRA, which since its foundation has always said that it is acting in the name of the Irish people. If it is now truly acting in the name of the Irish people, it should not only cease the violence but cease its existence as an organisation. It also sends a message to certain people—
    Mr. Speaker: Order. It is a supplementary question. I cannot allow the hon. Gentleman to continue. [Interruption.] Order. The hon. Gentleman must sit down. Will the Secretary of State reply?
    Mr. Murphy: My hon. Friend is right in terms of the fact that the people of Ireland, north and south, agreed to the Belfast agreement in a referendum after the Good Friday agreement was signed. Some 90 per cent. of the people of the island of Ireland and 70 per cent. of the people of Northern Ireland agreed with it. That means—I am sure that he agrees with this—that there is an onus on everyone in Northern Ireland to understand that the only way that we can achieve progress is to do what the people of Ireland have voted upon.
    Mr. David Trimble: In recalling the circumstances that led to the suspension, I am sure that the Secretary of State has seen the statement by the police in Northern Ireland that the criminal conspiracy that they uncovered went to the very heart of the republican movement. Their inquiries are continuing. In the light of that, would it not be wise to wait until we have seen the full extent of that conspiracy and who was involved in it? Should we therefore not wait until the inquiries have been completed? While doing that, would it not also be wise to have a thorough public inquiry into how the Northern Ireland Office conducted itself while the spy ring was operating in its own offices?
    Mr. Murphy: The right hon. Gentleman is aware that a thorough investigation is being undertaken by the security services as to why these events took place. He is also right to remind the House that this series of events finally led to the loss of confidence and trust between the parties in Stormont and to the suspension of the Assembly. It is important to discuss these issues in the political context. I am sure that that will happen tomorrow; it certainly happened last week.
    Mr. Kevin McNamara: Will my right hon. Friend confirm that if it is not possible for the Assembly to be reinstated immediately or in the near future, the proposed elections to it will go ahead next year as planned?
    Mr. Murphy: We have no plans to change the dates of the elections to the Northern Ireland Assembly, set for 1 May next year. I sincerely hope, as I am sure every hon.. Member does, that we resolve the difficulties before then.
    Mr. Quentin Davies: Does the right hon. Gentleman's less than precise first answer to the question—I am putting it kindly—mean that the

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    completion of decommissioning and disbandment will be a precondition for Sinn Fein resuming its place in a revived power-sharing Executive?
    Mr. Murphy: The hon. Gentleman is right in saying that that is a precondition in the sense that, as my right hon. Friend the Prime Minister said, republicans
    "must make the commitment to exclusively peaceful means, real, total and permanent".
    My right hon. Friend went on to say:
    "We cannot carry on with the IRA half in and half out of this process."
    That is clear to me. Those issues will be discussed at the beginning of the meeting tomorrow in Belfast and doubtless they will be at the heart of discussions in meetings to come.
    Mr. Davies: I am grateful for the clear assurance at the beginning of that answer. It is enormously important. To put minds at rest in Northern Ireland and elsewhere, will the right hon. Gentleman give another assurance? He has made it clear in his handling of the police Bill that he has gone some way to understanding the error of unilateral concessions and the importance of linkage and of enforcing compliance. Will he therefore deny the rumour in the Northern Ireland press yesterday that the Government are again contemplating an amnesty for on-the-run terrorists?
    Mr. Murphy: The hon. Gentleman knows that those issues were discussed at Weston Park. We all know that those issues are particularly painful to victims in Northern Ireland on both sides of the community. I repeat what I said: as my right hon. Friend the Prime Minister made clear, the Government will only contemplate steps on all issues, including the ones to which the hon. Gentleman referred, in the context of acts of completion.
    Huw Irranca-Davies: Despite the tortuous nature of current negotiations on police reform and the peace process, will my right hon. Friend commend the words and actions of all those politicians who are working towards peace? Will he also commend the words of Martin Luther King:
    "Peace is not merely a distant goal…but a means by which we arrive at that goal"?
    Mr. Murphy: Of course I echo my hon. Friend's eloquent comments. When I recently took on this job after an absence of three years, I was struck by the fact that the streets of Belfast and Northern Ireland are still very peaceful by comparison with the situation a decade ago. We cannot take for granted the progress that has been made, but we understand that much still needs to be done.

    Irish Fertilizer Industries
    Dr. Vincent Cable: If he will make a statement on the employment impact of the closure of Irish Fertilizer Industries' factory in north Belfast. [81601]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson): The loss of 207 jobs and some £11 million to the local economy has obviously had a devastating effect on employees and their families. I have asked Invest Northern Ireland to work with the liquidator to try to identify an investor for the Belfast factory, and the Department for Employment and Learning is advising the work force on employment and training opportunities and on social security matters.
    Dr. Cable: Is the Minister aware of the problem arising from the fact that the workers have lost not just their jobs, but 60 per cent. of their pensions because the owners—the Irish Government and ICI—chronically underfunded the pension scheme? Will he and his colleagues approach the Irish Government on behalf of the workers who have lobbied us in London and appeal to them to honour their moral obligations to the work force?
    Mr. Pearson: I met trade union representatives from the company and the local management last month. I have been in contact with both shareholders, the Irish Government and ICI, and I am seeing the chief executive of ICI tomorrow. I take a close interest in the issue. It strikes me that four pension funds are involved and the position remains unclear. I am committed to doing all that I can to ensure that the work force get their full entitlement.
    Mr. Nigel Dodds: I welcome what the Minister is doing to deal with the problem. The workers have been treated in a shabby and despicable way by a blue-chip British company and the Irish Government, with whom there is supposed to be a special relationship. May I urge him to do everything in his power to ensure that pension rights and other rights of workers, and the rights of creditors, are protected?
    Mr. Pearson: The Irish Government and ICI have put together a funding package of some €24.5 million for severance payments, and they have agreed to subordinate loans to ensure that creditors are paid. The important thing is that if jobs can be saved and a new investor can be found, we should be doing that. We must also make sure that the work force receive their full entitlement through pension arrangements and that the money owing to them in redundancy is paid out.

    Grammar Schools
    Sir Teddy Taylor: If he will make a statement on the future of grammar schools in Northern Ireland. [81602]
    The Minister of State, Northern Ireland Office (Jane Kennedy): The consultation on the Burns proposals indicated an emerging consensus for the ending of the transfer tests, which the hon. Gentleman and I would

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    recognise as the 11-plus, and I will be taking forward the review and working to abolish the transfer tests as soon as practical.
    Sir Teddy Taylor: Does not the Minister seek to abandon—[Interruption.]
    Mr. Speaker: Order. The House is far too noisy and it is unfair to those who are interested in these questions.
    Sir Teddy Taylor: Does not the Minister seek to abandon the shameful and destructive policy, initiated by Martin McGuinness, of abolishing the selection test? Does she agree that the absence of a clear judgment in these matters will undermine a facility that provides opportunities for able children from working-class homes to break through class barriers and ensures that Northern Ireland has better A-level results than England, Scotland or Wales?
    Jane Kennedy: The hon. Gentleman is right in that the education system does well for certain very able pupils in Northern Ireland. I assure him that no decisions have been taken about academic selection or new post-primary arrangements. In the consultation, various suggestions were made for future arrangements, including options involving academic selection. My officials have been discussing those proposals with the education partners and parents' representatives, and they will continue to do so over the coming weeks.
    Mr. Roy Beggs: Will the Minister give us a commitment that she will continue to support our grammar schools in Northern Ireland, just as her Government support the remaining grammar schools here in Great Britain? Will she acknowledge that it is now being acknowledged here that the comprehensive system has been failing pupils for far too long?
    Jane Kennedy: The hon. Gentleman makes a forceful point, but he will know that the consultation on the Burns report indicated an emerging consensus, which, I hope he will accept, included political parties, on an end to the transfer test. I am confident that by working with our education partners and by keeping our focus on the interests of the child, we can develop a modern, fair education system that enables all children to fulfil their potential.

    Economy
    Mr. Ben Chapman: If he will make a statement on the Northern Ireland economy. [81603]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson): The Northern Ireland economy has witnessed significant improvements in recent years. Employment growth has been sustained with some 656,000 employees now in employment, the highest figure on record. Unemployment has also fallen considerably, now standing at 6.3 per cent., well below the European Union average. Forecasts for the local economy remain optimistic for the coming year.
    Mr. Chapman: Does my hon. Friend agree that in manufacturing, traditionally a weak area of the Northern Ireland economy, dramatic improvements in productivity have taken place, making Northern Ireland an ever more attractive market for inward investment? Does he agree also that that could not have been achieved without the stability and confidence provided by the Good Friday agreement, and that further progress in that direction may be hindered without its full implementation?
    Mr. Pearson: I totally agree. Manufacturing throughout the UK and Europe has been having a tough time in recent years, but in Northern Ireland it has been holding up very well. Over the last four years, manufacturing output went up by over 10 per cent., compared with a 5 per cent. decline in the UK. Business research and development increased by 40 per cent. last year, and productivity, which was 10 per cent. lower than in the UK, is now reaching UK levels. Those are all promising signs, and we must ensure that we continue to move forward and sustain, and improve on, that impressive track record.
    David Burnside: The Minister must agree that economic progress depends on stability in the institutions of government, whether across the United Kingdom or in the regions. What are he and his colleagues doing to ensure that we have stable devolved government that is not under the constant veto of a paramilitary terrorist organisation, Sinn Fein, and that we are rewarded with accountable government at Stormont to help in the economic promotion of the Province?
    Mr. Pearson: My right hon. Friend the Secretary of State and others are doing all they can to make sure that we get the Assembly and the Executive back up and running as soon as possible. In the meantime, while we are asked to perform the job of Ministers, we will do so to the best of our ability to ensure that we have a stable economic climate in Northern Ireland, which is crucial to future business prosperity and success.
    Andrew Mackinlay: Will the Minister discuss with the Secretary of State for Trade and Industry the possibility of introducing legislation to prevent the market distortion affecting the Northern Ireland economy whereby offers of retail products, life insurance and car insurance are restricted to the United Kingdom, excluding Northern Ireland? It is neither fair nor appropriate to a market economy that such discrimination is allowed to endure.
    Mr. Pearson: I thank my hon. Friend for that question. On a number of issues, the interests of Northern Ireland's economy are different and diverge from those of the United Kingdom. He mentions one of those issues; others include cross-border smuggling. They are all matters on which one would expect representations to be made to the UK Government, and they are.
    Michael Fabricant: We now learn that the Chancellor of the Exchequer has had to borrow £10 billion in the past six months and that corporation

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    tax has fallen by 14 per cent. Does the Minister agree that the worst thing that could happen to the fragile Northern Ireland economy would be a rise in taxes on corporations?
    Mr. Pearson: I dispute that. The simple fact is that the Northern Ireland economy is not in a fragile state. Manufacturing businesses are doing well, and we have a young, well-educated and highly committed work force. Northern Ireland is a great place for inward investment and we are holding our market share in that respect. There is every reason to believe that the prospects for Northern Ireland's economy are good and will remain good in future.

    Northern Ireland Assembly
    Mr. Eric Illsley: If he will make a statement on the prospects for establishing the Northern Ireland Assembly. [81604]
    The Secretary of State for Northern Ireland (Mr. Paul Murphy): As I said in my reply to the hon. Member for Southwark, North and Bermondsey (Simon Hughes), we are working urgently with others to find a basis to restore the devolved institutions. I believe that doing so is of the utmost importance to the future of Northern Ireland.
    Mr. Illsley: Given the progress that has been made since the signing of the Good Friday agreement—progress to which my right hon. Friend has already referred—does he agree that it is essential that the Assembly is re-established as quickly as possible?
    Mr. Murphy: Indeed I do. One of the great changes for the better in Northern Ireland in the past few years is that Northern Ireland people are taking decisions on behalf of other Northern Ireland people. The quicker we restore devolution in Northern Ireland, the better for everyone.
    Sir Patrick Cormack: Does the Secretary of State—and the Prime Minister—accept that the trust and confidence, the re-establishment of which he says is so necessary, would be re-established more quickly if he gave the House a categorical assurance that there was no question of giving fugitive terrorists an amnesty?
    Mr. Murphy: I think that the best thing that can happen is that, when we talk—as we will tomorrow in Belfast and in the weeks ahead—the parties in Northern Ireland can reassure each other of the importance of settling those issues that are in front of us. That is a matter not only for the Governments, but for the political parties as well.
    Mr. Eddie McGrady: Does the Secretary of State agree that the permanent re-establishment of devolved government in Northern Ireland can be achieved only by the complete fulfilment of the Good Friday agreement, endorsed by all participating parties. Does he agree that the current
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    round of negotiations should refer only to matters as yet to be implemented under the Good Friday agreement, including those to be implemented by Government?
    Mr. Murphy: My hon. Friend is right that the chief reason why those talks have been held is that the institutions have been suspended because of lack of trust. At the end of the day, however, that trust can be restored by referring all the time to the Good Friday agreement itself and its implementation. That is a duty upon our Government, the Irish Government and all the parties working together.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Paul Goggins: If he will list his official engagements for 27 November.
    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 will have further such meetings later today.
    Paul Goggins: Has my right hon. Friend seen this week's report from UNICEF, which shows that in reading, maths and science this country is now one of the best-performing countries in the world? Does he recognise, however, that in many disadvantaged areas pupils and teachers still face substantial difficulties? What further action will he take to back his Government's commitment to raise standards for all pupils?
    The Prime Minister: It is correct that the UNICEF report found that Britain was seventh in the world for academic skills, above the United States of America. I shall quote briefly from the report:
    "The United Kingdom, where hand-wringing over educational failures is a national pastime, fares better than all other countries in the European Union except Finland and Austria".
    The reason for that is the investment now going into schools in every single part of our communities. It is important, therefore, that we keep the investment programme moving forward, not cut it back, as some would have us do.
    Mr. Iain Duncan Smith: Tomorrow, tube drivers will hold a strike ballot arising from the fire strike. Does the Prime Minister agree that such a strike would be secondary action?
    The Prime Minister: I agree that there is absolutely no cause for a strike because the Health and Safety Executive has made it clear that the tube is safe operating under London Transport's terms and conditions. It therefore follows that any strike, in my judgment, would be totally unjustified.
    Mr. Duncan Smith: The Prime Minister never said whether he felt that it was secondary action or not,

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    which is critical. The whole of London's underground is likely to grind a halt, but he has not given a straight opinion. He knows that the Government own London Underground and that every member of its board is appointed by the Secretary of State. Will he now tell us whether the Transport Secretary, under his instructions, has told London Underground that it should use every available trade union law to stop the strike going ahead? In short, has it been told to get an injunction?
    The Prime Minister: First, it is for the court to decide whether it is illegal or not; it is not a matter for me or my right hon. Friend. However, as a result of the action already taken by London Underground, the total number not working normally is, I think, three. It is important that London Underground makes every effort to ensure that that is right. Of course, ultimately it is a decision for London Underground, but I am sure that it will enforce the law in whatever way it needs to.
    Mr. Duncan Smith: There are 8,000 people about to have a ballot, but the Prime Minister has given them no clear signal that if they take strike action it will be considered secondary action. Thousands of teachers and council workers have been on strike this week. Tube drivers and power station workers are now threatening secondary action that would paralyse the country, but the Prime Minister cannot say whether it is secondary action or not. After his answers today, does he not think that that will give a green light to all those who believe that they should have a right to strike? He made a promise in his manifesto that there would be no return to secondary action, but does he not think that people will believe that that was not true?
    The Prime Minister: There must indeed be no return to secondary action, secondary picketing or anything that is unlawful. All that I was pointing out to the right hon. Gentleman is that it is ultimately for the court to decide whether something is unlawful. I have just told him that the ballot on action tomorrow would be totally unjustified and that London Transport should do everything it can to enforce the law, so I hardly think that he can say that I have thereby given a green light to secondary action. That is a slightly extraordinary thing to say.
    Let me repeat the position: I do not believe that any action is justified. London Transport should use all the powers at its disposal, including those under the law, to enforce the law. I should have thought that that was plain enough even for the right hon. Gentleman.
    Helen Jackson: I am not a killjoy—[Interruption.]I am sure that my right hon. Friend is not one either, but is it not time that we stopped treating fireworks like a toy that children can play with when the nights are getting dark in September and October, thereby terrifying people in the community, and saw them as the fairly dangerous explosives that they are? Will he ensure that action on this issue is included in the antisocial behaviour order, on which we are legislating this Session?
    The Prime Minister: It is obviously important that we use the antisocial behaviour legislation to try to bear down on that problem. In the areas where we are
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    piloting antisocial behaviour fixed penalty notices, such provision is already being made available to deal with the unlawful use of fireworks. If we were to use the fixed penalty notice route and some exemplary fines were meted out to those engaging in the practice, it would be stamped out fairly quickly. We keep all legislation closely under review; I am sure that the Home Secretary will have heard my hon. Friend's point. I know that it will be echoed by many hon. Members on both sides of the House.
    Mr. Charles Kennedy: For a Government who promised economic stability, how embarrassed does the Prime Minister feel that we have had the longest period of manufacturing recession since the second world war and that business investment levels are now lower than during the Tory recessions of the 1980s and 1990s?
    The Prime Minister: It is correct that manufacturing has had an extremely difficult time, but if we look at the economy as a whole, we can see that there has been immensely strong growth. We have the lowest unemployment, inflation and mortgage rates for decades. Were we to follow the spending programmes of the Liberal Democrats, that would all be put at risk.
    Mr. Kennedy: The fact is that the percentage of investment in the European Union that comes to Britain was 28 per cent. four years ago, 20 per cent. last year and currently stands at 16 per cent. How low must it go before the Prime Minister takes action, particularly by setting a timetable for a referendum on entry into the single currency?
    The Prime Minister: I thought that we might get to that issue eventually. The position on the euro remains as it is: it has to be right for the economy as a whole. The right hon. Gentleman is right to say that there has been some falling off of investment in this country. Of course, it is mainly going to many of the accession countries such as Poland and Czech Republic, which obviously offer very low labour costs indeed. Overall, however, I hope that he recognises that the performance of this economy in the past five to six years has been an extraordinary one of high growth and employment, and low unemployment, inflation and mortgage rates. That is what we must and will preserve.
    Mr. Hilton Dawson: Does my right hon. Friend share my grave concern that, at a time when we have seen real progress in children's services, we have also seen the tragic deaths of 13 children in young offenders institutions? Will he assure me that the work currently being done to develop policy for children will reflect the fact that prison is no place for children to be?
    The Prime Minister: Obviously, what my hon. Friend says about the need to improve conditions in some young offenders institutions is right. We must do two things. First, over the past couple of years various changes have been piloted in the institutions, including in Feltham in particular, where I think there has been most concern. Secondly, we are setting aside several tens of millions of pounds for a strategy of improving the

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    services for young people in young offenders institutions. At the same time, my hon. Friend will agree that, unfortunately, there are young offenders—often very young people—who need to be in young offenders institutions or secure accommodation to protect the public from their behaviour.
    Rev. Ian Paisley: The Prime Minister is aware that in the past two days my party has met the Minister with responsibility for security in Northern Ireland and the Secretary of State for Northern Ireland. We put one question to both: what is an act of completion? Does it consist of IRA-Sinn Fein repudiating and ceasing violence and being disbanded, or does it simply mean that they make a statement that they will give up violence? Can the Prime Minister tell us what he believes it means?
    The Prime Minister: I can. It is not merely a statement, a declaration or words. It means giving up violence completely in a way that satisfies everyone and gives them confidence that the IRA has ceased its campaign, and enables us to move the democratic process forward, with every party that wants to be in government abiding by the same democratic rules.
    Mr. Eric Illsley: Is my right hon. Friend aware that the mere suggestion of university top-up fees is already causing anxiety in areas such as mine, which has a historically low take-up of university and higher education places? If collective provision is the right model for the national health service, should not it also apply to our education service?
    The Prime Minister: I am aware of the anxiety, which has been expressed in many quarters. My hon. Friend is right to express his concern. He knows that we will publish a review in January next year, but we do not intend to do anything that will put people off going to university. The Government have a proud record. In the past few years, we have increased the number of people who go to university by almost 100,000.
    However, our universities have a serious funding problem. Provided that everyone agrees that the status quo—the huge backlog of repairs to infrastructure and university lecturers' pay increasing by only 5 per cent. in the past 20 years, when the figure for the rest of the economy is 45 per cent.—is not an option, we should work out the right basis on which to change matters. That is fully consistent with the need to get more people into our universities.
    Mr. Crispin Blunt: Why is the Prime Minister using the armed forces to break the firefighters' strike when he could have used the courts?
    The Prime Minister: That sums up the Conservative party in its current state. Is the hon. Gentleman seriously suggesting that we should not have made preparations for the armed forces to take over? What a ridiculous question to ask me! When the firefighters cannot provide fire service cover because they are on strike, it is right that our armed forces, who do a fantastic job, should stand in. If we refused to have the
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    armed forces standing by, Conservative Members would be on their feet, accusing us of incompetence and chaos.
    Mr. Colin Challen: I am sure that my right hon. Friend knows that I have organised a meeting on Friday evening for the residents of Tingley to consider policing and antisocial behaviour. They will be pleased that we have almost achieved our target of 130,000 police officers—a record number—four months in advance, but they will not be so happy that the distribution of officers does not appear to be equal throughout the country. Will my right hon. Friend take steps to ensure that everywhere, including West Yorkshire, gets its fair share?
    The Prime Minister: I am sure that the meeting in Tingley is one of many throughout the country to consider such serious issues. We are increasing police numbers throughout the country, but my hon. Friend's point is important. We need to ensure that they increase in areas such as West Yorkshire. I understand that, as well as the additional 250 police who were recently recruited to West Yorkshire police authority, more than 400 extra are on their way.
    I pay tribute to police officers in West Yorkshire. Their work has meant that street crime in the county has fallen by 45 per cent. in the past six months.
    Mr. Iain Duncan Smith: The Prime Minister said that stakeholder pensions
    "would transform the landscape of private provision".
    There are a third of a million company stakeholder schemes. How many of those schemes have any members?
    The Prime Minister: I assume that the right hon. Gentleman has the figures before him, but I can tell him that there are 50,000 additional stakeholder pensioners a month.
    Mr. Duncan Smith: The answer to the question is that of 330,000 company stakeholder schemes, 300,000 have no members and no money. It is no good the Prime Minister weaselling his way out. Will he tell us what proportion of occupational pension schemes are open to new pensioners?
    The Prime Minister: Again, I assume that the right hon. Gentleman is about to tell me. More than 1 million people have taken out stakeholder pensions. There are, as I said, around 50,000 a month. If that stretches over the next few years, it will amount to several million. I should have thought that that is a good record for stakeholder pensions.
    Mr. Duncan Smith: I do not think that the Prime Minister knows what a company pension scheme is, as he has given the wrong answer. More than half of those pension schemes are now closed to new members, and the latest evidence shows that the rate of closures has doubled in the past year. So occupational schemes are closing, stakeholder schemes are failing, and every year under Labour the number of people retiring without an

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    occupational pension has risen. Given that his Chancellor's £25 billion tax hike has damaged pensioners, when the Chancellor of the Exchequer rises to speak today will the Prime Minister tell him to apologise for destroying pensions?
    The Prime Minister: No. It is correct that many pension schemes have had difficulties, for all the reasons that we know, not just in this country but in other parts of the world. However, when stakeholder pension schemes are attracting some 50,000 people a month, it is absurd to say that they have failed. It is correct that changes are necessary. They will be set out in the pensions Green Paper later this year, but in the end the single best guarantee for today's pensioners and tomorrow's pensioners is a strong economy. That is the economy that we have produced, but it is not the economy that the right hon. Gentleman's party produced when it was in power.
    Gareth Thomas: May I draw the Prime Minister's attention to continuing concerns in my constituency, particularly in the lovely market town of Ruthin in Denbighshire, about the adequacy of flood prevention measures and flood defence? I seek my right hon. Friend's assurance that the Government are committed to long-term investment in flood defence and protection.
    The Prime Minister: We are committed to long-term investment in flood protection. Several hundred million pounds are going into it over the next few years. In addition, as my hon. Friend knows—I know that this is of concern in Ruthin and other places that have suffered from heavy flooding—we are working with the insurance industry to make sure that it provides proper cover for people. There are many difficulties that we need to sort out, and we are working closely with the industry in doing so. I can assure my hon. Friend that part of the investment in the comprehensive spending review was investment against the problems caused by flooding. There is one other thing with which I am sure that he and his constituents would agree: we also need to take action on climate change, for the benefit of Britain and the world more generally.
    Mr. Adrian Flook: In a recent poll conducted by the Somerset County Gazette,88 per cent. of respondents said that they wanted to keep Somerset county council. Will the Prime Minister confirm that if every voter in Somerset wanted to keep the county council, every urban voter in a unitary authority such as Bristol or Swindon could outvote them?
    The Prime Minister: As we have said, it is for people in the region to decide how their future is governed. The campaign that the Conservatives have been mounting about county councils is simply wrong.
    Mr. John Robertson: As my right hon. Friend knows, 50 per cent. of calls to 999 centres are hoax calls. Will he make
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    sure that the courts treat hoax callers in the manner that they deserve, and ensure that human life is preserved? Will he ensure that the punishment fits the crime?
    The Prime Minister: I entirely agree with my hon. Friend's strong condemnation of hoax callers. The figure for the country as a whole is about 7 per cent., which is still far too high. Hoax callers should know that they are liable not only to be disconnected but to be imprisoned. Several people have been arrested over the past couple of weeks in connection with hoax calls, and I hope that anyone who engages in this appalling practice will be treated with the utmost severity by the courts.
    Peter Bottomley: In his first four years as Prime Minister, did the right hon. Gentleman notice the state of the universities and the pay of university lecturers?
    The Prime Minister: Yes, of course I did. That is one of the reasons that we introduced the first tranche of university reforms, following the Dearing report. If the hon. Gentleman is trying to say that we need to do even more, because of the rising number of people going to university, he is absolutely right. That is why I hope that, when we publish our review in January, the Conservative party will have the courage to make its own proposals if it does not agree with ours.
    Ms Debra Shipley: Given the Catholic Church's use of the Nolan guidelines to keep an abusive priest in office, does my right hon. Friend agree that the time has come for the Catholic Church, as an employer, to be required by law to remove such priests? Does he further agree that it is simply not good enough to hide behind risk assessment and forgiveness, as that does not protect children?
    The Prime Minister: Obviously, the law has to take its course. In my view, this is a matter for the Church, and the decisions that the Church takes should be taken only after the closest investigation of the facts.
    Mr. Geoffrey Clifton-Brown: In view of the fact that lives are being lost in the fire dispute, and of the spreading of secondary action, is it not high time that the Government became personally involved in the negotiations, and asked the firemen to postpone their industrial action and evidence to the Bain inquiry on the modernisation of working practices in the run-up to Christmas? Will the Prime Minister now become personally involved to ensure that they postpone their industrial action until they have given their evidence to the Bain inquiry?
    The Prime Minister: The attempts by some sections of the Conservative party to try to squeeze every little bit of political capital that they can from this dispute are absolutely extraordinary. If the hon. Gentleman is suggesting that the firefighters are somehow under some misapprehension about our wanting them to call off the strike—well, I would have thought that they would have got that message by now. As for their giving evidence to the Bain inquiry, we have been saying throughout that that is what they should do. The only way in which this

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    dispute is going to be settled is by the employers and unions agreeing to debate in detail the prospects for modernisation, giving a better deal over and above the 4 per cent. That has been the position throughout, and it is absolutely right that it should remain the position. It is for the employers and the unions to negotiate around it.
    Mr. John Lyons: It has been 28 years since the Turkish army invaded Cyprus. Over that period, 1,500 people, including children, have gone missing. Will my right hon. Friend take up this issue as a matter of urgency with the new Turkish Government? Mothers and fathers need to know what has happened to their loved ones. Have they been murdered or tortured? Have they been imprisoned? Will my right hon. Friend please do something about this?
    The Prime Minister: My hon. Friend raises a serious issue. There is every possibility of trying to resolve it in the context of an agreement on Cyprus. I genuinely believe that the United Nations plan that has been put forward offers the greatest prospect for a final settlement of the Cyprus issue than we have had for many decades, and if that can been agreed by the parties involved some of the traumatic and difficult issues that my hon. Friend has raised could be resolved. Obviously, we raise individual cases all the time, but the best way of dealing with the matter comprehensively will be in the context of an agreement to that settlement.
    Mrs. Marion Roe: As my constituency is close to Stansted airport, will the Prime Minister explain to my constituents whether the Government's consultation on future airport expansion is essential and balanced, as Ministers claim, or irrational and unfair, as the High Court concluded yesterday?
    The Prime Minister: The High Court decision, I think, was on the exclusion of Gatwick and the reason for that is quite simple: we had an agreement that we would not put Gatwick in the consultation. However, the court's decision rules otherwise.
    In relation to the airport proposals, of course I understand why the hon. Lady's constituents are concerned. It is always difficult when there is a consultation process and everything has to be put into it, but that does not mean that decisions have been taken. However, as the High Court decision showed, if we were to exclude certain things, we would be accused of conducting an unfair process too. It is important that we continue with the consultation process in the way that I have described—we look at absolutely every option—but her constituents should not think that we have made up our minds on it, because we have not.
    Mr. Andrew Dismore: My right hon. Friend has referred to the UN settlement plan for Cyprus, which has been welcomed by the Greek Cypriots as the basis for further negotiation and in relation to which the Turkish Cypriots have yet to make a judgment. Will he
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    assure the Greek Cypriots, who are very concerned, that that delay will not in any way prevent their entry to the European Union at the Copenhagen summit?
    The Prime Minister: It was partly as a result of the representations of this Government that we made it absolutely clear that Cyprus should be able to join the EU, even if there is not a final settlement. However, it is important, obviously, that we want there to be such a settlement. I have had good conversations with the new leadership in Turkey about that issue. I hope that the UN proposals can at least be a basis for concluding these negotiations reasonably quickly. If that happens, the Cyprus issue would be resolved—Cyprus, in any event, will join the EU—and relations between Greece and Turkey could improve. That would be of enormous benefit to the whole region.
    Mr. John Taylor: Will the Prime Minister confirm that modernisation means 10,000 firefighters losing their jobs?
    The Prime Minister: No, I will not confirm that. The truth is that 20 per cent. of the firefighters are due for retirement for demographic reasons in any event. That allows us to sit down and talk about those who are necessary to give the proper manpower for the fire service. Of course, there will be people retiring from all public services. For example, some 12,000 people have retired from the police and 30,000 have retired from the teaching profession, but there are more police officers and more teachers in employment today. So, the Deputy Prime Minister was saying—we know this; indeed, it was published by the Government Actuary's Department last year—that 20 per cent. will retire for demographic reasons, but that is simply one more opportunity to sit down and get the essential modernisation that the fire service needs.
    Margaret Moran: Is my right hon. Friend aware that Monday was international day for the elimination of violence against women? In that context, may I thank him for his personal commitment and that of this Government to introduce the first comprehensive legislation on domestic violence in this country? However, is he aware that, although legal protection is vital, so too are support and advocacy services for women and children? Is he aware that most Government initiatives do not fund outreach, helplines or children's services and that 40 per cent. of local authorities—
    Mr. Speaker: Order. That was the fourth question.
    The Prime Minister: I am grateful for what my hon. Friend says about the measures that we are taking on domestic violence. It is a real problem, and she rightly draws attention to it. We are not simply taking measures; we are also investing, I think, almost £11 million specifically in programmes to try to diminish domestic violence. I entirely agree that it is important that we carefully measure any forthcoming legislation to see how it bears on that appalling problem.

    Stansted Airport
    Mr. Mark Prisk: What representations he has received concerning the Government's proposals for Stansted airport.
    The Prime Minister: The Government continue to receive a large number of responses to the consultation document, "The Future Development of Air Transport in the United Kingdom". Ministers and officials in the Department for Transport have also met a wide range of organisations as part of the consultation.
    Mr. Prisk: Given the High Court's decision that the Government's consultation is indeed irrational and unjust, will the Prime Minister clarify for my constituents and for the House why his Transport Ministers specifically overrode the advice that they were given, which was that they should include Gatwick in the first place? That was the advice; why did they ignore it?
    The Prime Minister: We excluded Gatwick because we had given an undertaking to exclude Gatwick. Yesterday's court hearing found that, in any event and
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    despite that, we should include Gatwick. The Secretary of State for Transport has said that that will be done, and that is of course right. The hon. Gentleman says that it was decided that it was unfair, arbitrary and irrational; the reason is the one that I gave. Many people around Gatwick will feel aggrieved that it has gone back in when we had given a specific undertaking that it would not. However, the court has decreed that it should go back in, and that is what will happen.

    Engagements
    Mr Vernon Coaker: Will my right hon. Friend look at the number of youth workers in our communities? Many of us feel that an enhanced and improved youth service would do much to tackle antisocial behaviour in our communities.
    The Prime Minister: It would. One reason the Government are putting a huge investment into the Connexions partnerships, which give proper guidance and career advice to young people, is precisely because we know that, along with increased investment in education and sure start, such investment is not just in young people but in a more secure, safer and fairer Britain. That is the Britain that we shall continue to fight for.

Speaker's Statement
3.31 pm
Mr. Speaker: I have a brief statement to make to the House. I have to inform Members that I have received the following letter from the Clerk of the House:
"Dear Mr. Speaker,
I am writing to let you know formally of my desire to resign as Clerk of the House at the end of the year.
I entered the service of the House in September 1961, and I first sat at the Table of the House in 1977. By the time I resign, I shall have been Clerk of the House for exactly five years. Two years ago, I had the further privilege of being appointed the First Chief Executive of the House Service.
It has been an honour and a unique privilege to serve the House of Commons over these 41 years, and especially to do so as its principal adviser on privilege and procedure. I shall always be grateful to the occupants of the Chair and Members in all parts of the House, past and present, for their courtesy and friendship over that long period.
For at least the past decade, the House's procedures and services have adapted to meet new demands and challenges at a pace which would have startled my colleagues in 1961. I hope we have been generally successful in coping with change while maintaining the traditional high standard of service. If so, the credit must go to all those men and women in the six departments of the House on whose loyal service so much depends. It has been a privilege for me to be associated with them.
I shall leave the service of the House with regret, but I shall do so in the knowledge that no other career could possibly have provided as much satisfaction and opportunity for service.
Yours sincerely,
William McKay"
The Leader of the House of Commons (Mr. Robin Cook): Members on both sides of the House who have benefited from the sound and impartial advice of Sir William McKay over four decades will regret the announcement that you, Mr. Speaker, have just made to the House. I realise that Members on both sides will wish to express their appreciation of his service, and therefore we shall shortly table a motion on his retirement, which will give Members the opportunity to pay tribute to him.

Pre-Budget Report
3.33 pm
The Chancellor of the Exchequer (Mr. Gordon Brown): Last year, of the major economies, the British economy was the fastest growing. This year, 2002, amid the worst global slowdown for almost 30 years, the British and north American economies will grow faster than all other major economies. I can report that next year, in 2003, Britain and north America are now forecast, even in a still uncertain and unstable world, to continue to be the fastest growing of all the major economies.
Today, as I examine in turn world and British growth, the balance of the economy, including the housing market and the position of manufacturing, and the fiscal figures now and for the future, I will report that with the lowest inflation for 40 years and long-term interest rates also the lowest for 40 years, Britain's monetary and fiscal framework is meeting the challenges of each stage of the economic cycle, and we will tolerate nothing that will put that hard-won stability at risk.
As Britain meets the challenges of the wider global economy, the pre-Budget report will also outline further labour market, capital market and product market reforms to improve British science, skills and enterprise, and I will outline proposals for continuing public service reform and tax and benefit modernisation showing that, both in Britain and abroad, strong economies and fair societies advance together.
I start with the international economic outlook. Twenty of the world's biggest economies, accounting for 60 per cent. of the world's output—the United States, Japan, much of Europe and Latin America—have been or are in recession after what has been the sharpest slowdown in global economic activity for almost 30 years, indeed the biggest contraction in industrial output in the world's major economies since 1975. World trade growth, which held up through both world recessions of the early 1980s and 1990s, fell 12 percentage points last year, and while trade growth resumed early this year, it has faltered yet again. It is one of the many reasons why, at an international level, the British Government are working for an early resumption of the world trade talks and why, at a European level, we must curb industrial and agricultural protectionism.
While the present political and economic uncertainties—the continuing aftermath of 11 September, unfolding events in Iraq, the impact on oil prices, concerns about equities and corporate standards, continuing trouble in the IT sector and current account imbalances—have all caused business
investment to fall sharply since 2000 in every major continent, the challenge for the British economy in this more uncertain and unstable world has been to steer a stable course, combining low and stable inflation with sustained demand growth and with high levels of employment.
I can report that 175,000 more people are in employment in the British economy this year than last year and in total 1½ million more work force jobs have been created since 1997. Our unemployment rate is lower than in Japan, America and the euro area for the first time for 50 years.

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Our monetary and fiscal foundation, which is based on the independence of the Bank of England, imposes a symmetrical target for inflation, requires debt at low levels, holds to tough fiscal rules over the economic cycle and is thus designed not just for times of high growth, but for a global contraction with all its attendant difficulties. It is because the Bank of England has established credibility through year after year meeting our 2½ per cent. symmetrical inflation target that it has been able, supported by fiscal policy, to sustain growth in our economy. It is that same symmetrical inflation target, which was designed to prevent both deflation and inflation, that explains why the Bank of England is rightly vigilant not only about the continuing weaknesses of equities, trade and investment and of G7 current account imbalances, but about domestic risks, including the need for a sustainable housing market and for affordable pay settlements across the economy—public and private sector alike. We will continue to give steadfast backing to the Bank of England and the Governor, Sir Eddie George, who retires next June, in all the difficult decisions that have to be made.
It is because we are determined both to have stability and value for money in reformed public services that, just as in the private sector, public sector pay rises must be set at a sustainable rate a nd justified by productivity. When inflation is around 2 per cent., we should not put our hard-won stability at risk by yielding to inflationary and unaffordable pay settlements, whether in the private or public sector. That would put low inflation and low interest rates in jeopardy and damage the whole economy. To continue to steer a steady course, we must hold firm in our demand for discipline in pay setting across the economy.
Let me give the full detail of the economic forecasts. I can report that inflation will meet our target of 2½ per cent. this year. We now forecast inflation to be 2¼ per cent. next year and 2½ per cent. from 2003 for every subsequent year of our forecast period—having met our inflation target in each of the past five years, we will continue to do so in the future.

With that platform of domestic stability and an expected world trade recovery, to rise next year by an estimated 5½ per cent., we can forecast consumption to grow in 2003 at a sustainable pace of 2¼to 2½ per cent. with the housing market slowing. We forecast manufacturing output rising by 1¾ to 2¼ per cent., and business investment by 2¾ to 3¼ per cent. to make for more balanced economic growth.
Across the industrialised world, including in Britain, since the further slowdown since this spring forecasts for growth this year have been downgraded. In the euro area, gross domestic product growth is forecast to be 0.8 per cent.; in France, 1 per cent.; in Italy, 0.4 per cent.; in Germany just 0.4 per cent., and in Japan it will be minus 0.9 per cent.
For the UK, GDP growth is forecast to increase by 1.6 per cent. this year. It will rise to 2½ per cent. to 3 per cent next year, rising again to 3 to 3½ per cent. in 2004. Some have argued that Britain is least well placed to cope with global slowdown. In fact, taking growth last year, this year and next year together, Britain is not the
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weakest but the strongest of the major economies. And while Japan, America and Germany have all been in recession, Britain has now grown consistently in every quarter for the past five and a half years.
As with monetary policy, so our fiscal policy is designed to help sustain growth at every stage in the economic cycle. Our fiscal rules are set for the long term and based on deliberately cautious assumptions, including for revenues. These assumptions, which are independently audited by the National Audit Office, mean that when stock market values fall we take that fully into account, and not just in assessments of this year's current revenues from stamp duty, capital gains tax and corporate tax—we also build such falls fully into revenue projections for future years. The assumptions include not only a cautious view of tax receipts from growth, of oil prices, and of the impact of revenue gains from, for example, anti-fraud strategies, but cautious assumptions about unemployment, where we claim no social security savings when unemployment is forecast to fall.
From 1997, we also took decisions to freeze spending for the first two years, achieving surpluses of £30 billion; to cut debt from 44 per cent. of GDP to 36 per cent., and then to use the £22 billion spectrum auction to repay even more debt; and regularly to achieve not just a current balance but a large surplus. In each year since 1997, we have met our two fiscal rules, with current surpluses worth a cumulative £58 billion, and debt far below 40 per cent. of national income. With debt interest payments £7 billion a year lower than in 1997, debt interest consumes a smaller share of national income, this year as last year, than at any time since 1915. So while some have, in the past, criticised this long-term and deliberately cautious approach, we are, with current surpluses and historically low debt, able at every stage of the economic cycle to meet our fiscal rules, including in the cautious case.
Let me provide the detailed figures. Figures for our current Budget for this year, 2002–03, and for the five years to 2007–08 are minus £6 billion, minus £5 billion, plus £3 billion, plus £5 billion, plus £8 billion and plus £10 billion. So we meet our golden rule over the cycle—not just achieving a balance but with an estimated surplus at £46 billion. We meet the golden rule on the cautious case, too. Taking the full economic cycle into account, the current surplus for each year is forecast to be 0.2 per cent. of GDP this year, 0.3 per cent. next year, then 0.6 per cent.. 0.5 per cent., 0.6 per cent. and 0.7 per cent. in the four years to follow.
Our second rule is the sustainable investment rule—that over the cycle net debt should be kept below 40 per cent. of national income. Debt this year is 41 per cent. of GDP in the US. It is rising to 43 per cent. in France, to 45 per cent. in Germany, to 54 per cent. in the euro area, to 70 per cent. in Japan and it is almost 100 per cent. in Italy. I can report to the House that, in Britain, net debt this year and in future years will be at 31 per cent. this year, then 32.1 per cent., 32.4 per cent., 32.6 per cent., 32.7 per cent. and 33 per cent. So we will comfortably meet our sustainable investment rule, and we shall do so over the cycle, and in every year.
Our commitment to meeting these fiscal rules is not just for this year and this economic cycle, but for the long term, so I am also publishing today a report that examines the sustainability of Britain's fiscal position

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decade by decade, and compare our position with those of other countries. It shows that if we take account of population change, and the cost of ageing to public spending, the British fiscal position in this period is sustainable, and in a strong long-term position compared with those in other countries.
I have said that our fiscal framework is designed not only so that we make the right decisions when the world economy is growing, but so that it is robust so that at all times we meet our fiscal rules. An alternative approach has been put: that, instead of our holding firm to this long-term course, this stage of the economic cycle would be the time to cut spending and borrowing. I have examined such an approach. It would lead directly to depressed demand, rising unemployment, and the old familiar boom-and-bust approach—[Interruption.] Oh yes. It would lead to the old familiar boom-and-bust approach of capital investment in infrastructure that is vitally needed being slashed, and hard-won stability would be put at risk.
In the last world downturn 10 years ago, Britain was bound into such a position, when inflation was high, debt was rising fast and the fiscal disciplines were not being met. But today, in this world downturn, with a foundation of historically low levels of inflation and debt, such an option would be neither competent nor prudent—because, after the decisions we have made, we can comfortably meet our fiscal rules, we can fulfil our spending plans, and we can borrow for investment across the economic cycle.
Figures for net borrowing for this year and for future years are £20 billion, £24 billion, £19 billion, £19 billion and £20 billion—that is, 1.9 per cent., 2.2 per cent., 1.6 per cent., 1.6 per cent., 1.5 per cent. and 1.5 per cent. of gross domestic product. That compares with a deficit 10 years ago of 8 per cent., equivalent to an £80 billion deficit today, and to an average deficit of 6 per cent. in the early 1990s.
I can confirm that this year, and each year in our forecast period, we are well within the Maastricht criteria, and that the Treasury will publish the assessment of the five tests on the euro by June next year.
If we take the full economic cycle into account, net borrowing—which is forecast this year, cyclically adjusted, to be 2.7 per cent. in the United States, 2½. per cent. in France, nearly 3 per cent. in Germany and 7 per cent. in Japan—is, in Britain, just 1.2 per cent. this year, and per cent., 1.3 per cent. and 11 per cent. for the next three years.
So, in both monetary and fiscal policy, with the lowest inflation and the lowest long-term interest rates for 40 years, as well as the lowest unemployment for 25 years—and we are able to meet our spending plans in full—the right approach is to hold firm to our long-term course.
As I conclude this section on monetary and fiscal policy, I wish to thank Sir Edward George, whose period of office as Governor of the Bank of England ends in June next year, for the steady hand he has consistently shown in the leadership of the Monetary Policy Committee since we made the Bank of England independent in 1997. In welcoming the announcement this afternoon of the appointment by Her Majesty the Queen of the new Governor of the Bank of England—the deputy Governor for the last five years, Mr. Mervyn King—I can assure the House that the same steady grip
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will continue. It is that steady hand—that long-term strength of purpose in monetary and fiscal policy—that, in testing times, is keeping our economy stable and growing to meet our long-term goal of prosperity for all, and we will do nothing to put that steady approach and our hard-won stability at risk.
If stability is the precondition for economic progress, enterprise is its driving force. And Britain today is challenged by a long-term global restructuring of industry—low value-added production shifting from the highly industrialised to the industrialising countries; competitive advantage in manufacturing and services increasingly coming from high value-added technology-driven products.
In the next wave of globalisation, which is now upon us, it is the flexibility of our product, capital and labour markets, the strength of our science base, the level of British research and development and the scale and dynamism of knowledge transfer from our universities to business that will drive our productivity growth and thus future prosperity.
Building on the independence of our competition authorities, the surest route to British companies becoming global champions is to extend competition and open up new markets at home. The public sector must also meet this test, and the investment that we make must be matched by continuing reform. First, in central Government contracts worth £14 billion a year, the Office of Government Commerce will maximise competition and encourage bids from the widest range of companies, small as well as large. Secondly, the Office of Fair Trading will scrutinise proposed public sector regulations to assess their competitive effects. Thirdly, we will use the discipline of the market to deliver value for money through private finance initiative projects worth £30 billion, which will include large-scale regeneration projects, while recognising the limits of markets in areas such as health care, education, defence and policing. Fourthly, to maximise efficiency in dealing with the Government's own businesses, we are announcing today the creation of a new shareholder executive.
In January, we will receive and respond to the Higgs report on the role of non-executive directors.
Having cut corporation tax to 30p and having consulted business on further corporate tax reform, we are considering detailed proposals to reform the tax treatment of capital assets, the use of losses and of trading and investment companies. To stop tax avoidance, measures announced today will root out abuse of the VAT regime, and we will be tightening rules governing employee benefit trusts, industrial building allowances and profits on sales of extended warranties.
I turn to measures to help small and medium-sized businesses. Following our cut in small business corporation tax to 19 per cent:. and the cut in the starting rate from 10 per cent. to zero, the Secretary of State for Trade and Industry is today announcing the extension of eligibility to the small firms loan guarantee scheme to include businesses with turnovers of up to £3 million a year in a wider range of sectors. Some 400,000 businesses in all are now eligible.
Following our deregulatory measures for flat-rate payment of VAT—under which, from April, 650,000 small businesses are no longer required to report on each

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VAT transaction—the pre-Budget report will consult small businesses on extending the scheme. Following the exemption of 200,000 firms from the requirement of a statutory audit, we will consult next year on the same deregulation for medium-sized firms.
To help small and medium-sized firms export and build modern manufacturing strength, the Secretary of State for Trade and Industry is also ensuring that from today the Manufacturing Advisory Service will extend to every region of the country; and in response to concerns about rising insurance costs, the Secretary of State for Work and Pensions is undertaking a formal review of the operation of employers' liability insurance.
To build stronger local economies in each region and to devolve decision making out of Whitehall, in the north-west, east midlands and west midlands we are devolving business support services from Whitehall to the regions, and in the north-east, north-west, southeast and east, we are devolving to the regions management of the skills budgets.
Because the enterprise culture that we want to see starts in our classrooms, the Secretary of State for Education and Skills is following the Davies report, announcing, over three years, £75 million to promote education in enterprise in our schools and colleges. To encourage local initiatives in enterprise, we are consulting on allowing local authorities to keep additional rates income from the creation of new businesses in their area.
To match the proposed greater flexibility in the planning system with measures to increase the affordability and numbers of houses, the Deputy Prime Minister is publishing the communities plan in January.
For high unemployment areas, where the answer is more economic activity and more enterprise as the route to more jobs, we are today, jointly with the Small Business Service, publishing details of 2,000 new enterprise areas, in which, following state aids clearance which we expect in January, not only will we abolish from Budget day stamp duty for all business property transactions in these areas and, with the 25 per cent. community investment tax credit, cut the cost of investing in these areas, but we will give local authorities powers to relax requirements for detailed planning permission. In pilot projects in high unemployment areas, we will test a more intensive approach, estate by estate, of interviews, training and job search services, matched by benefit sanctions so that we can help the long-term unemployed back into work.
I have two further announcements on business taxes. From 1 January, we will abolish all royalty taxes on North sea oil and gas. Following the consultation that I began in my last Budget on the future of bingo tax on player stakes and whether to replace it with a tax simply on bingo companies' profits, I am sure that my decision℄having covered all the numbers in this area—to abolish in the Budget bingo duty will be welcomed on both sides of the House.
Our charity tax reliefs are worth an additional £2 billion a year, and I can announce today that we will extend for one more year the Government supplement on payroll giving. To match our initiatives on giving with initiatives encouraging volunteering, the Home
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Secretary and I will consult business on a new corporate volunteering initiative. Based on the success of the United States Americorps, we will pilot a financial scheme to help British young volunteers from lower-income backgrounds take a year out after school to undertake community service.
We also have a commitment to protect the environment for future generations, so we are publishing today a detailed paper setting out our approach to the environment. We will consult on what will be a revenue-neutral proposal to raise the landfill levy by £3 per tonne per year from 2005–06. On environmentally based fuels, I can also announce that, for bioethanol road fuel, we will reduce the duty rate by 20p per litre.
The modern route to competitiveness also demands that Britain's most innovative companies work ever more closely with Britain's enterprising research universities. Today, the Secretary of State for Trade and Industry is beginning a review of Government support for innovation, and she and I have asked the former editor of the Financial Times, Mr. Richard Lambert, to examine how, building on our research and development tax credit and the university challenge and higher education innovation funds, the long-term links between British business and British universities can be strengthened to the benefit of the whole British economy.
Since 1997, the new deal has been helping the young, lone parents and many disabled people back into work. The priority now is to focus, too, on how we help young people and adults to move up the skills ladder. I can therefore announce that we will use the remaining surplus from the windfall tax and, at a cost of £130 million, extend to a quarter of local learning and skills council areas the new employer training pilots, in which the Government support wage and training costs in return for employers providing time off so that employees can get proper training.
To spearhead what I believe the whole country wants—the expansion of modern apprenticeships so that nearly a third of young people are covered by 2004—a new modern apprenticeship taskforce will be headed by someone who knows a great deal about training and skills, the chairman of Manchester United football club and chief executive of Centrica, Sir Roy Gardner. In addition, following the success of our new university for industry, with half a million students already, and talks with the banks, we are now going to consult in detail on how we expand training and management courses for small businesses.
We will also continue the expansion of work permits for managed migration, which was begun by the Home Secretary. He and I are extending the highly skilled migrant programme, and through a new unit we will help small firms seeking to recruit skilled workers from overseas.
Our policy is to combine enterprise with fairness. To continue to make work pay more than benefits, we are, from April, extending the principle of the working families tax credit to single adults and couples aged 25 and over without children. Couples with wages of less than £280 a week, or £14,000 a year, and single people with wages of less than £10,500 a year will stand

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to receive more money from the new working tax credit, taking forward our belief that an enterprising economy and a fair society advance together.
A flexible, efficient labour market must not only promote employment but be fair to parents. Next month, in a joint Department of Trade and Industry-Treasury report, we will publish new proposals for enabling parents to make real and effective choices on balancing work and family life.
Building on our rise, from April, in maternity pay to £100 a week, the first ever paternity and adoption pay, the new tax credits that we are introducing and the first ever national child care strategy, we will consider further reforms: first, new tax and national insurance incentives so that we can expand employer supported child care; secondly, paying the child care credit for approved home child care by carers who are not already childminders; and, thirdly, increasing flexibility in parental time off, including giving fathers time off to attend antenatal care.
Our goal—stability and prosperity for all—means also fulfilling our goals to tackle child and pensioner poverty. Following last week's social security uprating, the starting level for the new child tax credit, taken with child benefit and now to be paid direct to the mother, will be £1,400 a year for those with incomes below £50,000; between £800 and £1,400 a year, for those with incomes of £50,000 to £58,000; and for 2 million of our lower income families, £2,800 for the first child and £4,800 for a two-child family as the child tax credit, based on support for all and most support for those who need it most, becomes the most powerful weapon for tackling family poverty.
That same progressive principle underlines our proposal that all children have a child trust fund that builds up year by year to be drawn upon at the age of 18. We are now proceeding to detailed discussions with a range of providers—the banks, building societies and friendly societies.
Now that the Secretary of State for Work and Pensions has also announced the pension rise next April from £75.50 to £77.45, and to £79.40 at least by 2004, the Government can also announce the levels of the new pension credit. From next October, instead of penalising modest savings and small work pensions, it will reward savings.
In the typical constituency of Members of the House, 7,000 pensioner households will benefit. That is couples with total incomes of £200 a week or less, and single elderly people with £139 a week or less. They stand to benefit from what is £2 billion extra that is being paid out in pensions. Let me give the House the figures: a pensioner couple with income of £150 a week will receive £21.50 a week extra. That is £1,100 more a year. On an income of £ 160 a week, it is £17.50 a week or £900 a year. With an income of £170 a week, it is £13.50 a week or £700 a year. A single pensioner with £110 a week will receive £11.60 a week, or £600 a year on top of their pension rises. For 5 million pensioners, this will be the biggest increase in pensions since the old age pension was introduced. I can also announce that the minimum income guarantee for single pensioners will be £102.10 a week as we seek security and dignity in retirement for every single pensioner in our country.
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When, next month, the Secretary of State for Work and Pensions publishes the Government's Green Paper on pensions, this will include our proposals to simplify the tax treatment of pensions. I can confirm that the tax-free lump sum payment to retirees will remain. Existing tax reliefs for pension contributions for employees, the self-employed and employers will also remain.
I have two more announcements to make. Because we have built sound foundations of low debt and low inflation and are today meeting our fiscal rules, we have rejected the view that we should cut back our spending plans at home and abroad. So I can not only confirm that we will fund our planned investments: by 2006, there will be £8 billion more a year for local authorities; £15 billion more a year for education; £63 billion more a year for public services; and by 2008, for health alone, there will be £41 billion more a year to be paid for by our national insurance rise—all to be matched with reform.
But we can also, amid global uncertainty, do more to meet our international obligations. It is right in the new figures presented today, consistent with past Treasury practice, to set aside to meet our international defence responsibilities a provision of £1 billion to be drawn on if necessary. We must not only meet the global security challenge; there is today not only a new imperative but, 1 believe, a new opportunity to meet the global poverty challenge.
In the last five years, through the Prime Minister's Africa initiative and the tireless work of the International Development Secretary, Britain has spearheaded the fight for debt relief and social justice for the poorest countries. I can tell the House that having already agreed $62 billion of debt relief for 26 countries, our aim is now $100 billion for the 38 countries in total that stand to benefit from the cancellation of debt. I thank all Members on both sides of the House and all churches, faith groups and non-governmental organisations in our constituencies for their tremendous work.
But because at this critical moment we must move forward, I have held discussions over recent days with Finance Ministers from America, France, Germany, Italy and other European countries, as well as with the heads of the International Monetary Fund and the World Bank. I can inform the House that Britain is now proposing a new international development finance facility, with public finance leveraged up by long-term international commitments, so that we can raise the amount of development aid for the years to 2015, with a step change from $50 billion a year to $100 billion a year, so that we can meet by 2015 the millennium development goals, including that poverty be halved, that child mortality be reduced by two thirds, and that every single child has the right to primary education.
Having written as chairman of the International Monetary and Finance Committee to all fellow Finance Ministers, and to the World Bank and the United Nations, I can tell the House that we will, as a Government, be prepared to provide a British commitment to help underpin that plan. The Secretary of State for International Development and I are now asking other countries to join with us. I believe that all parties in this House will wish to support this British initiative for global justice, so that we not only win the fight against terrorism, but win the peace.

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In conclusion, we have been tested by world events and have resolved to steer a steady course. That steady strength of purpose will continue, and we will honour our commitments to invest in public services, to advance enterprise and fairness and to meet and master the global challenges. I commend this statement to the House.
Mr. Michael Howard: I begin by drawing attention to my declaration in the register and express my gratitude to the Chancellor for advance sight of part of his statement, blank pages and all—a total of eight minutes of it.
I start on a note of consensus. I welcome what the Chancellor said in his closing remarks about the relief of global poverty. He said that he welcomed the support that that would receive from all quarters of the House, and he was absolutely right. We support those measures.
I must congratulate the Chancellor on something else. Up to now, he has been overshadowed by the Prime Minister, but at last he has come into his own. He is being paid the supreme accolade of having a song dedicated entirely to him. It is written by Kenny Jones and Robert Hart. [Interruption.] The song is released later this week, and I can give the House a preview. [Interruption.] It is called "Mr. Brown, You're Robbing Me" and its lyrics include the lines:
"Giving with one hand, taking with the other.
Shatter your dreams. Then you run for cover".
But the Chancellor has not been able to run for cover today. This is a moment of humiliation for him. [Interruption.]
Mr. Speaker: Order. The Chancellor was heard and the right hon. and learned Gentleman has to be heard.
Mr. Howard: I quite understand, Mr. Speaker, if Labour Members do not want to listen to this.
The Chancellor was forced to admit that his forecasts on growth were wrong; his forecasts on revenue were wrong; his forecasts on borrowing were wrong; and his forecasts on his deficit were wrong. These are the downgraded forecasts of a downgraded Chancellor. For weeks on end, he and his spin doctors have been trawling around looking for alibis. In the words of the Financial Times, he has been "rehearsing his excuses".
Everyone is to blame for the fact that the Chancellor got his forecasts wrong except the Chancellor himself. In Thursday's Financial Times he blamed it on the fall in world trade between 2000 and 2001, but in his Red Book, at the time of his Budget forecasts, he said that world trade was estimated to have contracted in 2001 and grown only slowly in 2002. At the CBI and in the House last week he said that we are seeing the sharpest contraction in world economic growth since 1974, and he is wrong about that too. We had world growth of 2.2 per cent. in 2001, and the rate is expected to be 2.8 per cent. in 2002, but in the early 1990s we had three years when world growth averaged just 1 per cent. a year.
The Red Book made it clear that independent forecasters took a much more realistic view of prospects than did the Chancellor. His central forecast for 2002
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was for growth of 2.¼ per cent., but independent forecasters said that it would be 1.9 per cent., and so did the OECD just eight days after the Budget. What were those independent forecasters telling the Chancellor at the time?
"Economists were surprised by the strength of the forecasts",
noted The Independent. Growth projections in the next year or two were "very ambitious", said Deutsche Bank. "It is not prudent," said HSBC economists. Everyone knew about this—except, apparently, the Chancellor. Indeed, far from heeding any of that independent advice, the Chancellor increased his forecast for growth in 2003 and for longer term trend growth. He thought that everyone else was wrong and he was right.
Today the Chancellor announced a borrowing figure of £20 billion for next year. Does not that demonstrate how dramatic is the deterioration in the public finances? His forecasts for borrowing over five years have risen from £30 billion in last year's Budget, to £66 billion in last year's pre-Budget report, to £72 billion in this year's Budget and to over £100 billion for the next five years.
The Prime Minister looks surprised; the figures obviously take him unawares. We know that the Red Book is not his favourite reading but he ought to take a little more interest. There they sit—what a shambles, what a shower. "Brown and Blair, the posturing pair." They are very good at taxing the people of this country; they are very good at spending the people's money; they are very good at wasting the people's money and they are very bad at delivering the improvements that the people want.
The Chancellor said that none of that matters as long as borrowing balances over the cycle, but will he comment on the view of the Ernst and Young item club that half the expected revenue shortfall for this year could be structural rather than cyclical? Will he comment on the view of the Financial Times that he took "the most unusual years" as the basis of his calculations, something that the newspaper says "seems daft"? What is more, he cannot even say when his much vaunted cycle starts and ends. When I ask him about that he refers me to the Red Book, but the Red Book says that these things are very difficult to judge. It says that the start date for the cycle is provisional and that it is an assumption. Why on earth has the Chancellor spent the past five years claiming that his fiscal rules are rock solid when he cannot even tell us the start date of the cycle on which they depend?
Is not the end of the cycle even harder to predict, and is not that rather convenient for the Chancellor? Does he agree with the National Institute of Economic and Social Research that the current cycle will end early next year or early in 2004 and that he will not then be able to balance future deficits against past surpluses? That seemed to be the Treasury's view in the spring.
Is the Chancellor planning to do what has been suggested and try to make the cycle last longer? Why did the Treasury brief the press, first, that the cycle was about to end and then that it would end as late as March 2005? He told the House last week that the Government's fiscal policy
"can adjust to the economic cycle".—[Official Report, 18 November 2002; Vol. 394, c. 388.]

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Is not the truth that he is trying to adjust the economic cycle to suit his fiscal policy? What does he say to the national institute, which said of his golden rule:
"You can already smell the fudge being cooked up in Great George Street"?

What of the Chancellor's sustainable investment rule? If he had not, Enron-style, put £100 billion of his liabilities off the balance sheet, public sector debt would already have reached the 40 per cent. limit in his own rule. Will he confirm that the extra borrowing he has announced today takes us over that limit? Is not a black hole now emerging in the public accounts—a hole entirely of the making of this Chancellor of the Exchequer?
As we have constantly pointed out, the growth of public spending under the present Government is far faster than the growth in the economy. Is not the heart of the problem that the Chancellor is following his present course because without reform, his spending is not leading to the improvements to the public services that we all want? His only answer now is to spend more. How far he has come from his view in 1997, when Labour's manifesto stated:
"The level of public spending is no longer the best measure of the effectiveness of government".

By spending more without reform, he has locked himself on an unsustainable course, and if spending keeps rising faster than the growth rate of the economy, he will have to put up taxes again.
There were, as usual, plenty of promises on the public services in the Chancellor's statement, but every year he makes those promises and every year he breaks them. The Government are already taking almost £40 a week more in tax for every man, woman and child in the country. Yet while spending is indeed up on the NHS, patients are waiting longer in accident and emergency departments, and now, for the first time, there are more bureaucrats than beds. Although spending on law and order is up, crime and the fear of crime are on the increase—street crime has gone up by 31 per cent. in the past year. Although spending is indeed up on education, we were told yesterday that reading standards in our primary schools have actually declined in the past two years, and one in every four children leaves primary school unable to read, to write or to count properly. In fact, the Government have failed or are failing 40 per cent. of the targets that the Chancellor set in 1998, and 75 per cent. of those he set two years later. Every year he makes those promises and every year he breaks them.
We shall study with care what the Chancellor said about pensions, but it is a great pity that he did not answer the questions which my right hon. Friend the Leader of the Opposition put to the Prime Minister, but which the Prime Minister was so palpably unable to answer. Why does the Chancellor not start by getting the basics right—by encouraging people to save for their pensions, rather than discouraging them? How has his £5 billion a year pensions tax helped those who want to save for their retirement?
Mr. Ronnie Campbell: Pay for the rich and the gap will get bigger.
Mr. Howard: Will the Chancellor say also whether any provision has been made for—[Interruption.]
Mr. Speaker: Order. Mr. Campbell, please be quiet.
Mr. Howard: Will the Chancellor say what provision he has made for public sector pay rises? Is it not the case that the Government have been in a complete mess and muddle on that issue, with the Chancellor, the Deputy Prime Minister and other Ministers all contradicting each other by the hour? This week, the Prime Minister entered the fray. On Monday, he was indulging his thespian fantasies, trying to play Margaret Thatcher. Well, I know Margaret Thatcher, and this Prime Minister is no Margaret Thatcher. [HoN. MEMBERS: "Hear, hearr]
In the statement, where was the announcement of action to reduce the burdens on business that the Government have imposed? Are not those burdens stifling the wealth creation on which we all depend? Does not yesterday's news that business investment has suffered the sharpest fall for 35 years—a fall significantly greater than that in Germany or the United States—represent a devastating vote of no confidence in the Chancellor and his policies?
What does the Chancellor have to say about the causes for concern in the UK economy, such as savings? We are now saving less than we have practically ever saved before. Borrowing is at record levels, and house prices are rising at an unsustainable rate. The newly appointed Governor of the Bank of England is now warning of the risk of a large negative demand shock at some point in the future. There are concerns about the world scoreboard of competitiveness, where we have been relegated from the top 10; about productivity growth, which has halved; about business investment, which has now fallen for seven quarters in a row; about the trade deficit, which we have run nearly every single month for five years; about manufacturing, where 15,000 jobs were lost in September alone and half a million since Labour came to office; and about the stock market, which has fallen disproportionately in comparison with the United States, hitting people with savings, pensions and mortgages. Does the Chancellor agree with The Independent, which said last week that he should face up to the severe imbalances in the economy? We have seen no sign of that today.
This is a Chancellor who clung like King Canute to his economic forecasts in the face of all the evidence. Today's statement shows him to have been wrong on all counts. His fiscal rules are not as rigorous as he claimed, and he has missed the very targets that he described as cautious and prudent. How mortifying that he, of all Chancellors, should have got it so badly wrong. On top of all that, we have still not seen the improvements in public services that he promised. Has not the time come for an end to the policy of taxing and spending and failing? Does the Chancellor not think that the people of this country deserve better?
Mr. Gordon Brown: The shadow Chancellor is making exactly the same economic policy mistakes as those made by the Conservative Government and every previous shadow Chancellor. He said that our spending is unsustainable and tried to say that the national insurance tax rise should not go ahead. He refuses to match our spending on the public services, but his solution is to cut spending this year, next year and in future years. Cutting spending during a world downturn would depress demand, put up unemployment and put stability at risk. His colleagues have said that he would

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continue to spend on the Home Office and on defence, so the major spending cuts that he proposed would hit the health service and education. He must tell us which schools and hospitals, and how many teachers, nurses and doctors would lose out as a result. Like his party, he is making exactly the same economic policy mistakes that the Conservatives made in the early 1990s.
We will take no lectures from a shadow Chancellor who was Employment Secretary in the early 1990s. Inflation is 2 per cent. in this country, but under him, it was 10 per cent. Interest rates are 4 per cent., but under him, they were 15 per cent. The deficit is 1 per cent., but under him it was 8 per cent. Unemployment is below 1 million but, worst of all, during his term as Employment Secretary, it was above 2 million. We will therefore take no lectures from the Conservative party.
It is not only me who is criticising the shadow Chancellor's record, but the current leader of the Conservative party. In The Sunday Telegraph, 6 October 2002, the leader of the Conservative party talked about the economic mistakes of the shadow Chancellor when in government in the 1990s. "Businesses," he said,
"went to the wall. We broke our pledge on taxes, there was negative equity in homes."
This is the current leader of the Conservative party talking about the work of the current shadow Chancellor. He continued:
"The public felt hurt. Then we lectured them, and we seemed a rrogant."—
[Interruption.]
The Opposition do not like it because it is true.
Mr. Speaker: Order. I do not like it either. The Chancellor must answer the questions that he was asked—[Interruption.] Order. Divisions within the Conservative party are nothing to do with me and nothing to do with the Chancellor in the Chamber.
Mr. Brown: When the shadow Chancellor refers to his record in the early 1990s, let us look at what he is proposing today. First, on—[Interruption.]
Hon. Members: Sit down.
Mr. Speaker: Order. I have called the Chancellor back to the Dispatch Box. There is only one Speaker in the Chamber.
Mr. Brown: First of all, the right hon. and learned Gentleman says that we should not have gone ahead with the ACT dividend tax credit. Let me remind the Conservative party that it cut it by half during its period in office. Then he said that we should be concerned about burdens on business. I have the report of the World Economic Forum from which he was quoting. It says that the improvement in the UK's position is particularly remarkable with its jump from seventh to third this year. It is the Conservatives who must look at their record on regulation.

As for the burden on small business, we are removing the burden on small businesses of having to account for every item of VAT. We are removing the audit
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requirement, and the right hon. and learned Gentleman should have noticed in the pre-Budget report the consultation that is now being carried out on all the other items.
On the question of public services, which the right hon. and learned Gentleman also raised, does he not know that literacy and numeracy results, A-level results and the numbers of people who are able to go to university are the best that have been recorded in this country?
As for the right hon. and learned Gentleman's other points—[HoN. MEMBERS: "More, morel As for his other points—[Interruption.]
Mr. Speaker: Order. We must have order in the House.
Mr. Brown: As for the right hon. and learned Gentleman's other points about manufacturing, it is growing in the third quarter of this year and business investment is 25 per cent. up on 1997, but we are facing exactly the same problems that businesses are facing around the world.
As for the right hon. and learned Gentleman's further point on crime, he should recognise that crime is down under this Government. As for his point on savings ratios, he should understand that we have the lowest savings ratio—[HoN. MEMBERS: "Yes."] The lowest savings ratio was recorded in 1988, under the last Conservative Government.
As for the right hon. and learned Gentleman's points about the downturn in world activity, let me point out to him that in 1991, the world economy was growing by 0.9 per cent. in the G7 countries and in 2001, unfortunately, it was growing by 0.6 per cent. That is the point—in far worse world conditions, Britain was first in and last out in the last recession. It is now growing and has a stable economy, and we can meet our public spending plans and have the lowest inflation and interest rates for 25 years and the lowest unemployment. That is a record that Labour Members are proud of.
Matthew Taylor: At least the Chancellor, unlike the Conservative party, knows how much he wants to tax and spend. The problem for him is that he is running out of money and ideas. It is noticeable that while he used to claim credit for everything that was going right, he now ducks any blame for anything that is going wrong.
The announcement made today involved the Chancellor in doubling borrowing to more than £100 billion over the next five years, compared to his plans in the Budget. His borrowing to cover a short-term problem is one thing—the right response to a temporary setback—but his Budget will go bust in the long term unless he tackles the collapse in British industry and stops relying on an unsustainable boom in consumer debt to keep his growth figures up.
Does the Chancellor even recognise that UK business investment has now crashed faster than in Japan, the United States, France, Italy and even, on the latest figures, Germany? It has crashed faster than at any time since records began and his latest figures today predict that it will stay lower. Even the Government's own investment in schools and hospitals is 25 per cent. below the level that they planned.

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Those are not world problems. Does he know that our share of inward investment into Europe has collapsed from 28 per cent. to only 16 per cent. in a mere four years? Those are not the problems of the world economy.
Is the Chancellor proud of a manufacturing recession that is the deepest since 1981 and the longest since 1945? Is he proud of the fact that 500,000 people have lost manufacturing jobs in this country when such employment has increased in the European Union? Those are not world problems.
Is it not true that record household debt is the only reason that UK growth has held up? Does the Chancellor agree with the Bank of England that increasing debt and booming house prices are not sustainable? They are not the basis for sustainable longterm plans for investment in education and health.
Today, the Chancellor has again provided further tax complication and red tape for business. He has no new ideas for tackling the exchange rate problem that British business faces, the recession in manufacturing and the collapse of investment in this country that is far greater than that of our competitors.
What exactly is the Chancellor's assessment of the additional risk from any war with Iraq? He said that he would have to make such an assessment. We are not simply considering a world downturn. The scale of our manufacturing problems is unique to Britain and it has been engineered in 11 Downing street by meddling, red tape, tax complication and a lack of action on the exchange rate.
Unlike the Conservatives, we do not believe that the Government should cut education and health spending. [Interruption.] The Conservative party does not believe in anything. It has no policy on tax or on spending. Indeed, it has no policies at all, so we will take no nonsense from Conservative Members.
The Chancellor needs to mend his ways and stop passing the buck. He must cut red tape and simplify the tax system. He has to tackle the exchange rate issue or devise an alternative solution. If he does not, his longterm plans for investment in health and education cannot be realised. He risks that today with his complacent approach of refusing to accept that a single problem in the British economy can be laid at his door.
Mr. Brown: I am grateful to the hon. Gentleman for asking about the direction and balance of the economy. However, he must bear it in mind that our economy is stable and growing, while other economies have been in recession. He cannot claim that manufacturing job losses have not hit the German, French, Italian and other economies in Europe. Unemployment in Germany has again increased beyond 4 million, and the German economy is barely growing.
The hon. Gentleman cannot disguise the fact that the slowdown and contraction of industrial activity have been happening throughout the G7 countries. A feature of that is the IT slowdown that has occurred in America and Japan as well as in Europe. That is a major reason for our difficulties because business investment in IT was a critical factor in the late 1990s. He cannot therefore ignore the world factors and the global restructuring of industrial activity.
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On the balance of the UK economy, as I said earlier, we expect industrial production and manufacturing output to increase and business investment to recover next year when the housing market slows down and the pace of consumer demand is sustainable. However, I remind the hon. Gentleman that business investment is 25 per cent. higher than in 1997, and that it increased from 11 per cent. to 14 per cent. of GDP. That was partly because we changed the dividend tax credit, cut corporation tax and rewarded corporations for their investments.

The hon. Gentleman complained about the domestic balance of the British economy. We are taking steps to consult about more investment incentives for business. We shall continue to do that, and he should support us.
Mr. John McFall: I associate myself with the Chancellor's congratulations to Sir Edward George, the Governor of the Bank of England, on his wise stewardship of the Bank and the Monetary Policy Committee over the years. I also welcome his worthy successor, Mervyn King.
We accept that this country cannot escape the consequences of a downturn in a global economy. My right hon. Friend should not listen to the Jeremiahs in the Conservative party. The shadow Chancellor not only knew Margaret Thatcher, but, like a lap dog, implemented her disastrous policies. May I suggest that the Chancellor stands fast on the macro-economic objectives that have provided high employment, low mortgage rates, a stable environment and, more than anything, have utilised the previously unused talents of young people?
Mr. Brown: I agree about using the talents of young people. I hope that my hon. Friend will welcome the work that we are doing, especially my right hon. Friend the Secretary of State for Education and Skills, on modern apprenticeships and training, not just college and university training, but industrial and workplace training for young people.
On the monetary and fiscal rules, I hope that hon. Members in all parts of the House will agree that the monetary and fiscal rules that were established after 1997—rules that apply over the cycle, but rules that are disciplined and which must be met—are the best rules for the British economy. I hope that the House will agree that by keeping to those rules, not only shall we establish credibility, but we shall be able to keep interest rates lower than they would otherwise be.
Mr. Kenneth Clarke: I add my congratulations to Sir Eddie George and welcome the appointment of Mervyn King.
Will the Chancellor stop pretending that his present situation is the result of some careful Keynesian counter-cyclical planning on his part, when in fact he has come to the House to talk his way through the collapse of those absurd forecasts that he gave us only six months ago, at the time of his Budget? When he looks back, as he keeps doing, will he realise that he runs the risk of adding his name to the list of Chancellors who, first of all, gave way to political pressure to increase public spending, then claimed that it would all be affordable by making ridiculous estimates of future

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growth of the economy, then pretended that there was no problem when unexpected borrowing suddenly surged, and claimed that that could all be accommodated, and then did nothing effective on fiscal policy until the problem turned into a crisis?
The mistakes of which the Chancellor speaks are the mistakes made by Chancellors in the 1960s, the 1970s and the 1980s, and not repeated by the Major Government, which is why he inherited a stable economy already achieving growth with low inflation. That economy is now being sustained by a housing boom, household debt and public spending at an unsustainable rate. Will he come back to the House, recognising the existence of the problems to which he pretends to be blind, and present some substantial measures that might tackle them and restore stability to the British economy?
Mr. Brown: I am always interested to hear the words of the former Chancellor, but they would carry more weight if he had not left debt at 44 per cent. of GDP and forced us to cut it, and if he had not left an inflationary problem that had to be dealt with by raising interest rates in the first days after we came into government. I must therefore look at his record in the context of high debt, his failure to make the Bank of England independent, and the high inflation that he left us. [Interruption.] That rising inflation had to be met by rising interest rates when we came into government.
On the right hon. and learned Gentleman's comments about forecasts, our forecast was 2 to 2.5 per cent. The eventual outcome that we are forecasting now is 1.6 per cent. That is a long way from Conservative Governments in the early 1990s saying that there was no recession, when there was a recession.
Mr. Martin O'Neill: I congratulate my right hon. Friend on his statement. Many of us who have been in the House for a wee while remember the conditions in which other economic difficulties were confronted by Governments. Given the present state of our economy and the health of our public finances, we do not need to take any lectures from the Opposition. However, I point out to my right hon. Friend that manufacturing industry looks for more assistance than it has received this afternoon. I should like to think that by the time of the Budget we will have had a proper review of the climate change levy, and I look towards an indication of a more rational form of carbon taxation in relation to energy. Finally, will my right hon. Friend try and hurry up some of the officials in his Department so that they complete the long-awaited review of the taxation of foreign nationals in this country?
Mr. Brown: I am grateful to my hon. Friend. The review on foreign nationals is continuing and we shall publish the documentation later.
On my hon. Friend's main points about manufacturing—I understand his long-term interest in the matter as Chairman of the Select Committee on Trade and Industry, and his constituency interest as well—the measures that we have taken include a research and development tax credit to help future manufacturing, 100 per cent. capital allowances, and
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venture capital funds in the regions, which are of assistance to manufacturing and therefore to investment. The main contribution that we can make with regard to the costs of investment for industry is to keep interest rates and inflation low.
The issue for us is not that we stand by and do nothing when manufacturing is in difficulty; we have done what we can in terms of capital allowances and investment allowances, and of providing a stable macro-economic environment to help manufacturing industry. Of course, the changes in manufacturing industry are taking place right across the industrial world. So far as the climate change levy is concerned, we froze it this year.
Mr. Michael Fallon: The Chancellor announced the endorsement of his pre-Budget assumptions by the Comptroller and Auditor General. Will he confirm that this is the same Comptroller and Auditor General who threw out his claim that Network Rail was a private sector company? Is it not typically disingenuous of the right hon. Gentleman to take credit for the former but to take no account of the latter?
Mr. Brown: The Office for National Statistics—
Mr. Fallon: The Auditor General.
Mr. Brown: Yes, but the Office for National Statistics makes the recommendations about off and on-balance-sheet matters. We have operated in exactly the same way as the previous Conservative Government did. If the shadow Chancellor is accusing us of Enron-style activity, which is a suggestion of corruption rather than of getting things wrong—[Interruption.] He is saying that Enron is not an example in which corruption was involved. If he is accusing us of such activity, he must also accuse his own Government, because we are operating under exactly the same rules. With regard to Network Rail—the case in point regarding the National Audit Office—we rigorously pursued the recommendations of the Office for National Statistics. Those are the same as the recommendations of the EUROSTAT office, and we have acted in accordance with all those rules. The same rules applied under the last Government.
Mr. Tam Dalyell: The Chancellor will hardly be astonished if I press him on what he said in his opening statement about the unfolding events in Iraq. What exactly are the assumptions about oil prices? Will he also clarify the reference that he made towards the end of his statement to £1 billion for terrorist contingencies? Is that supposed to cover a military operation against Iraq? Are there not two jokers in this pack? The lesser may be the cost of the war; the greater will be the consequence for oil prices of the middle east going up in flames. It would be sheer folly—in terms of all sorts of things, not least the economy—to set the middle east on fire.
Mr. Brown: The setting aside of £1 billion in the reserve is in line with previous practice, and it is to deal with eventualities if or when they arise. I know that my hon. Friend takes a detailed interest in what is happening in the middle east. As he will know, oil prices have risen partly as a result of the uncertainty. They rose

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quite high, then they came down a bit. A great deal of the activity surrounding oil prices is related to that uncertainty. Our assessments of what oil prices are likely to be are independently audited by the National Audit Office. The price that we assume for oil tax revenues, for example, as well as for economic activity, is the one that is audited by the NAO. I will send my hon. Friend details of that.
Sir Peter Tapsell: Does the Chancellor deny that, at the time of his Budget last April, many Conservative Members told him that his growth forecasts were over-optimistic and unreliable? Does he also deny that we have been proved right, and that he has been proved wrong? Why should we now believe his projections for future years? Is it not the case that he has now reverted to his political ancestry of spend, tax and borrow, that he is frantically trying to weaken the European stability pact, and that he has thrown away his capacity to dominate monetary policy? In these circumstances, would it be helpful if I sent him an e-mail giving him an up-to-date telephone number on which he can get in touch with the International Monetary Fund?
Mr. Brown: I thought that the hon. Gentleman was one of the few Keynesians left on the Conservative Benches. Clearly that is not the role that he is playing today. So far as the changes since the Budget in April are concerned, I think that he would agree with me that a stock market fall of 25 per cent. in Britain, and a 40 per cent. fall in France and Germany, are significant events that not even he, with his prescience, could have predicted in April. He must realise that those events have a bearing not only on the value—[Interruption.] The shadow Chancellor says that the hon. Gentleman did predict this; I would be very surprised if he had actually done so in practice.
A 25 per cent. stock market devaluation must be taken into account in our calculations of corporate tax, capital gains tax, stamp duty and other matters. That is one change that has taken place since April. On other changes since April, I do not think that the hon. Gentleman would have seen the German forecast at that time. Germany was forecasting far higher growth, but growth is now only 0.4 per cent.
Mr. Mark Hendrick: I commend my right hon. Friend's plans to devolve the training and skills budget down to regional level, which will be welcomed in the north-west. I also commend his plans to ensure that a third of young people go into modern apprenticeships. May I bring to his attention the excellent schemes going ahead at the BAE Systems training plant in Preston whereby 300 young apprentices are getting excellent apprenticeships, which have recently received an award for excellence? That can act as a model for training and apprenticeships throughout the north-west.
Mr. Brown: I am grateful to my hon. Friend. I know that he takes an interest in the BAE development and the work being done on industrial training. Apprenticeships were virtually dead a few years ago, but there are now 200,000 modern apprenticeships, and that number will continue to rise to 300,000. We believe that
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it can rise substantially further, but we need to invest in modern apprenticeships and we need to encourage small firms in particular to take an interest. That is the purpose of the modern apprenticeships taskforce, which I hope will have a regional representation, which he seeks.
Mr. David Trimble: Among the papers published by the Chancellor today is one on protecting indirect tax revenues. I welcome the fact that it includes detailed information on the extent of oil fraud in Northern Ireland, and I hope that it conveys to Members and the general public here the extent of the revenue loss, which is given as £370 million in 2001.
I draw the Chancellor's attention to the Northern Ireland Affairs Committee report published today, entitled "The Impact in Northern Ireland of Cross-Border Road Fuel Price Differentials". Will he look carefully at the report and, in particular, consider the fact that it urges the Government to study and
"implement a separate lower rate of fuel…duty in Northern Ireland, by derogation if necessary"?
Will he consider also corporation tax rates and the significant cross-border differential between Northern Ireland and the Republic of Ireland, which has a distorting effect on investment in Northern Ireland and limits significantly our ability to attract inward investment?
Mr. Brown: I am grateful to the right hon. Gentleman. We have discussed that a number of times, and he kindly brought a delegation to see me and other Ministers on the matter. We understand the scale of the problems of oil fraud in Northern Ireland, cross-border fraud and trafficking, which is why the report has been published today. I look forward to discussing with him what it says and what we can do to take things forward. We share his aim of reducing the revenues that are lost and we are looking for solutions, which we shall discuss with him and the Northern Ireland Administration, once reestablished.
On the question of corporation tax relief, I visited Northern Ireland with the Prime Minister and we made a number of proposals to inject additional resources into the Northern Ireland economy. We recognise that there is a long way to go for business to grasp the opportunities that are potentially available, but we shall continue to do what we can. The right hon. Gentleman should consider some of our proposals—for example, the extension of the business loan guarantee scheme—and I look forward to talking to him again about how we can help to expand take-up of some of those schemes in Northern Ireland.
Mr. George Mudie: I congratulate the Chancellor on the pension credit. He knows that the minimum income guarantee was much resented by those who had worked hard but received only a small pension that took them above pension credit level. Therefore, they did not get the benefit.
I should like to do the shadow Chancellor's job on that issue, because strangely he left the figures alone. I must press my right hon. Friend on the figures in his speech, because they are too good to be true. I seemed to catch him saying that 5 million people—almost half

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the pensioners in the land—will get about £2 billion between them under that benefit. Why did the shadow Chancellor leave those figures alone—out of generosity to my right hon. Friend or because my right hon. Friend deserves double congratulations on those acts?
Mr. Brown: I am grateful to my hon. Friend for mentioning the importance of the pension credit. The figures are indeed accurate. We shall ensure that pensioners throughout the country are aware of the benefits available to them, just as we shall make people aware of the child tax credit. I believe that the take-up will be high once people realise the benefits that will flow from this measure. The figure is indeed large-5 million pensioners.
I agree with my hon. Friend about the minimum income guarantee for pensioners, but our first job was to ensure that we did all that we could to eliminate or reduce pensioner poverty. That is why we tried to lift the poorest pensioners, particularly widows in their 80s or over, out of the income support system that existed under the previous Government, with a far higher minimum income guarantee. I am pleased that it is now £102; it has risen by 30 per cent. in real terms since we came into office.
We can now build further. This measure rewards savings—the works pensions and the modest savings that people have. Given that 7,000 households will benefit from the measure, I am sure that hon. Members will want to make all those pensioners who can benefit aware of it.
Sir Nicholas Winterton: I compliment the Chancellor on his robust presentation. However, he would expect me to say that I am rather suspicious of its content. He failed to respond properly to the question put by his hon. Friend who chairs the Trade and Industry Committee, the hon. Member for Ochil (Mr. O'Neill), about the impact of Government policy on manufacturing industry in particular. The hon. Gentleman also mentioned the climate change levy, which damages industry even if it might assist banks, insurance companies and building societies.
Will the Chancellor direct his attention at the red tape, bureaucracy and regulation that he has imposed on British manufacturing industry, because it is making matters harder and harder? He will appreciate my lifelong commitment in this place to manufacturing industry. The Confederation of British Industry, the chambers of commerce and the Institute of Directors are not enamoured with much of what he has done.
Mr. Brown: I am grateful for the first set of remarks from the hon. Gentleman. He is indeed a supporter and defender of manufacturing industry, and throughout the time in which we have been in the House together, he has spoken up for the needs of manufacturing.
The hon. Gentleman must remember that the climate change levy was a revenue-neutral measure as far as business was concerned. We froze the levy this year. We want to meet our environmental commitments nationally and internationally in the long term.
On business taxes, as the hon. Gentleman should know, we reduced corporation tax from 33p to 30p. Small businesses will benefit from that even more this
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year, with the 19 per cent. rate and the 10 per cent. rate abolished so that the first £10,000 of profit are exempt from tax, so we are doing our best to encourage small businesses.
On manufacturing industry, the research and development credit has been widely welcomed. Equally, the measures that we announced today to expand the advisory service for manufacturing industry in every region, are welcomed too. The hon. Gentleman knows that what manufacturing industry wants most are favourable trading conditions, low interest rates and low inflation. We have low inflation and low interest rates; we want to create favourable trading conditions for that industry.
Mr. Tom Clarke: Does my right hon. Friend accept that the Government's achievements and objectives in international development are outstanding in every sense? Could that be why the shadow Chancellor and the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), did not say a word about the Government's policies?
Will my right hon. Friend, based on his successes and those of my right hon. Friend the Secretary of State for International Development, continue with those policies, particularly in debt relief, humanitarian aid and fair trading? Will they find themselves in a position, if not today then later, to tell us when we might achieve the United Nations targets?
Mr. Brown: I am grateful to my right hon. Friend. He has been a lifelong proponent of greater aid and investment in the poorest countries of the world so that we can tackle their poverty. The whole House knows his contribution.
I believe that we can have the support of all parties in the House for the policies that we are now pursuing, and I appreciate the fact that all Opposition parties have said that they wish to support that initiative. Our aim is 0.7 per cent. The initial measures that we are putting forward for a £50 billion increase to £100 billion of development aid by the developed world involves a compact whereby, in return for the developed countries insisting on corruption-free policies for stability, better conditions for trade, which require the Doha talks to have been successful, and a more conducive environment for investment, we should in return be prepared to put in the additional development aid. That is why we are proposing the new international finance facility. I believe that the response from other countries will encourage us to move ahead. I chose to end the pre-Budget statement with international development aid. If we are to tackle the insecurities and inequalities of globalisation, we as developed nations will have to do far more.
Sir Michael Spicer: Why has the enterprise culture, which the Chancellor inherited, been replaced by one that is dominated by trade union activity, regulations and high taxation, and why in particular has investment collapsed?
Mr. Brown: The enterprise culture is being encouraged in the schools with the measures that we are putting forward today, in high unemployment communities with the 2,000 new enterprise communities, in our work with Young Enterprise, the inner city 100 and all the enterprise agencies, which we have tried to encourage over the past few years. The hon. Gentleman should recognise that, if an enterprise culture can be built in each region and in each community, from the school classroom to the boardroom, it can make a huge difference to the chances of creating businesses and jobs. I should have thought that he would have been at one with us on that.
Mr. Nigel Beard: I congratulate my right hon. Friend on the robust strength of the economy, despite the uncertainties and difficulties in the rest of the world. What steps have been taken to encourage business investment and innovation, particularly in manufacturing industry?
Mr. Brown: I am grateful to my hon. Friend, who is a member of the Treasury Committee and is extremely interested in that matter. As he knows, the main measures that have been taken over the past few years are the research and development tax credit and the raising of capital allowances for small and medium businesses, but in addition the creation of regional venture capital funds, where the European Union has given approval to go ahead, provides additional funds that are put at the service of business. The university challenge fund and the higher education innovation fund are a means by which to link ideas coming out of universities to the creation of new businesses. In each region, we can see more opportunities for business to benefit from new ideas and new insights. If we are to win in respect of the high value-added, technology-driven products of the future, it must be part of the Government's job to encourage science, innovation and research, and to put that more at the service of successful businesses.
Mr. Alex Salmond: The Chancellor knows that he will get support from these Benches on international aid initiatives, but can he confirm that his growth forecasts are down, his borrowing forecasts are up, he has created a bust out of boom in the oil industry and is now trying to repair the damage, and he has scuppered a settlement in the firefighters' dispute because of pressure on the public finances? Given that for five years in a benign international environment he claimed the credit for every single success, is there any measure—even one—that, on reflection, he will want to point to that may have contributed to him being blown off course?
Mr. Brown: On the oil industry, we were right to raise the supplementary corporation tax for an industry that had made very substantial profits, but in return for that we increased investment allowances to 100 per cent. and we have now abolished North sea royalties. The hon. Gentleman's political party opposes the tax rise for North sea oil but has no means of raising revenues for the measures that it is proposing in every other sector. On the economy, I think that he would agree that the
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Scottish National party could never deliver low inflation, low interest rates, high employment, stable growth and continuing investment in public services.
Alan Simpson: I congratulate the Chancellor on being open about the downturn in the global economy and the dangers of accelerating the problems were we to cut public spending. I come back to some of the key points in his statement. There are dangers in cutting benefits to the young unemployed who are most marginalized—it is more likely to turn them towards drugs and crime than jobs and prospects. The schemes that have worked have stuck with the most marginalised long term, rather than sought to penalise them short term.
For the past 20 years, the problem for public services has been the absence of real structural investment, rather than a shortage of private tendering. We must be careful about going down that path, and trying to sell to the electorate the virtues of a tax credit in exchange for a pay cut. In relation to the £20 billion of borrowing—
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman must conclude his remarks.
Mr. Brown: Long-term youth unemployment reached nearly 500,000 at one stage in the 1980s, but is now around 5,000. My hon. Friend will acknowledge that that is a singular achievement, which was made by giving young people rights, responsibilities and opportunities. Those opportunities involved a lot of expense in training and advisory services, and young people had an obligation to take them up. I hope that my hon. Friend will agree that that is the right way to proceed.
My hon. Friend the Member for Nottingham, South is right to say in connection with the PFI that there has been a low level of public investment in our vital public services. We are trying to correct that. However, the need to ensure better value for money and more investment in the short term in our hospitals and schools has required us to use the private finance initiative.
Mr. John Maples: According to figures from the House of Commons Library, the tax burden next year will be £153,000 million more than it was when Labour came to power. If my calculations are right, that means that on average every man, woman and child in the country will pay £2,600 a year more in tax. Are those figures correct?
Mr. Brown: The figures that we are publishing today show that the tax burden is 37.1 per cent. of national income, which compares with the peak under the Conservatives of 38.9 per cent.
Dr. Nick Palmer: The House will have enjoyed the shadow Chancellor's efforts at singing, and will wish him a great career on "Pop Idol". He criticised my right hon. Friend the Chancellor for excessive public spending, but the Governor of the Bank of England told the Treasury Committee yesterday that the contribution of public spending to the economy at this point is very important to stability and growth in Britain. Does my right hon. Friend agree?
Mr. Brown: I am grateful to my hon. Friend for reminding us of that. Like the rest of us, the shadow Chancellor may wish to thank the Governor of the Bank of England for the work that he has done. However, the Governor pointed out yesterday that the best way forward for the economy is borrowing. That contrasts with the policy of cutting public spending put forward by the shadow Chancellor, who has absented himself from the House.
Mr. John Bercow: Why have the Government failed to meet 40 per cent. of the public service agreement targets set in 1998? Why does the Chancellor not recognise that, while failing to meet targets set by independent experts would be disappointing, failing to meet his own requires incompetence on a truly spectacular scale?
Mr. Brown: We met 87 per cent. of the targets in time. Subsequently, we have met another 6 per cent., which means that we have met 93 per cent. of our targets. The hon. Gentleman should congratulate us.
Several hon. Members rose
Madam Deputy Speaker: Order. In the time remaining, I intend to try and call all hon. Members who want to contribute to the debate. However, I urge hon. Members to ask short questions and, perhaps, offer short answers.
David Taylor: In response to my hon. Friend the Member for Nottingham, South (Alan Simpson), my right hon. Friend the Chancellor mentioned the benefits of PFI. However, are they not rather short term and illusory? In the medium and long terms, will not PFI be shown to be prohibitive in cost, flawed in concept and intolerable in consequence for taxpayers, citizens and workers in our country? The figures that my right hon. Friend published in the House today show that public projects could be financed in a traditional way. We do not need the PFI. It does not wipe off figures from the public balance sheet.
Mr. Brown: My hon. Friend, who takes an interest in these matters, should look at some of the public sector projects undertaken without PFI projects. For example, the Jubilee line was two years late and 50 per cent. over budget. That was one example of the many public sector projects that did not work as well as they should have. The lesson that we learn is that it makes sense to use the private sector when one seeks to combine the transferred risk with management expertise in transport, infrastructure and the building of hospitals and schools. After all, private sector companies construct the buildings. The means by which we bind them in and ensure that the buildings are well constructed and managed is the means by which we have secured greater value for money in the public sector.
Mr. Michael Jack: With falling investment in both manufacturing and, equally worrying, the service sector, it is evident that a number of the fiscal measures enunciated by the Chancellor a few moments ago, which were said to benefit business, have not been working.
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May I inquire, in the interests of transparency, whether the Chancellor would be willing to ask the National Audit Office to evaluate the effect that his fiscal measures for business have had, so that we might at least on that occasion see the wood from the trees?
Mr. Brown: We are continuously evaluating the effect of our measures. That is what the pre-Budget and Budget processes are for. But is the right hon. Gentleman against the 30 per cent. corporation tax? Is he against the 3 per cent. cut that we introduced? Is he against the cut in small business tax from 23p to 19p? Is he against the capital gains tax cut from 40p in the pound to 10 per cent., which is helping many companies with business assets? Is he against those measures? [HON. MEMBERS: "Answer."] Well, if he thinks they should be evaluated he must have some doubts about their effectiveness. I believe we have proved that those are the right tax cuts for British business.
Alan Howarth: As he surveys the circumambient economic gloom, does my right hon. Friend share my relief that we in this country have been prudent enough not to go into the euro, and not to subject the United Kingdom economy to the deflationary pressures of the growth and stability pact? Does he endorse the calls made this week by the Governor of the Bank of England and the United States Treasury Secretary for the European Commission and the Eurozone countries to buck up, reform the system and make the contribution that they should make to economic growth?
Mr. Brown: My hon. Friend has strong views on these matters. I can remind him of what I said: the assessment of the euro will be made by June next year, and will take all such factors into account.
Tim Loughton: Earlier this week, the Chancellor berated the Confederation of British Industry and told it to stop whingeing about the likely impact of the extra £8 billion in national insurance contributions. He said that it was the CBI's duty to make its contribution to the NHS, because healthy workers helped their businesses. What has he to say to employers who already fund more than 2 million employees with private medical insurance, which in turn is contributing £390 million in benefit-in-kind taxation to his Exchequer this year? Is it right that they should suffer a double whammy, paying to keep people away from the NHS while at the same time paying tax in the form of additional national insurance payments?
Mr. Brown: But private insurance schemes need the national health service—for accident and emergency treatment, for the training of doctors, for public health and for so many of employees' health needs.
As for business costs in health care, in America many employees cost their employers about $100 a week in health insurance charges. In France the figure is about £60 a week, and in Germany it is about £30 a week. Those are the average social insurance costs. In every industrial country employers are paying in one way or another, while health care costs are going up. I believe

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that the national insurance charge for employers is less than anything being paid in France, Germany or America to cover employees for health insurance.
Mr. Tony McWalter: I welcome the Chancellor's statement, which I saw as—in the words of the right hon. and learned Member for Rushcliffe (Mr. Clarke)—a cunning Keynesian plot to counter the effects of the economic cycle. I admire my right hon. Friend's surefootedness in responding quickly to pressures on huge increases in companies' insurance costs, and look forward to learning the details; but may I contrast that with the absence of any comment on the crisis in university funding? If we do not act quickly, we will further erode the science base, to which my right hon. Friend made an important reference.
Mr. Brown: The inquiry into employers' liability insurance will go ahead under my right hon. Friend the Secretary of State for Work and Pensions. I recognise, as he does, the concern that is felt.
As for universities' finance, under the spending review a considerable extra sum, about £1.25 billion—some in association with the Wellcome Trust—is being put into science in the universities, and the rebuilding and modernising of the science base. And as for university funding in general, my hon. Friend may not know that in the spending review we allocated considerable sums to education. The specific allocation for universities will be made in due course.
Mr. Crispin Blunt: From 1 May 1997 until yesterday, the British stock market underperformed the American stock market by 30.24 per cent. Why?
Mr. Brown: The hon. Gentleman knows that the balance between the companies involved in the British stock market is quite different from the American stock market. Most of what has happened has been effect of what has been happening to the IT sector. The hon.
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Gentleman should also know—and this is in reply to the shadow Chancellor's point—that since April there has been a 25 per cent. in the British stock market but a 40 per cent. fall in Germany and France.
Mr. Nick Gibb: The Chancellor gave a figure of 37 per cent. for the proportion of GDP taken in tax. Does expenditure on working families tax credit, which used to be called family credit, count as public spending, or does it reduce the figure? If it is the latter, does that not make nonsense of all the right hon. Gentleman's figures?
Mr. Brown: We use all the internationally agreed assumptions about this. The position adopted by the previous Conservative Government on mortgage tax relief was at odds with the international conventions. I have given a report on this matter to the Treasury Committee and I am happy to pass it to the hon. Gentleman.
Chris Grayling: Can the Chancellor rule out further rises in personal or business taxation during this Parliament?
Mr. Brown: We made our commitments in our manifesto at the general election that we would not raise the basic rate of tax or the top rate of tax, and we stand by those commitments.
Adam Price: The part of the Chancellor's statement dealing with public investment contained a tantalising reference to the importance of recognising the limits of markets in areas such as health care. Can the right hon. Gentleman tell us what he meant by that statement, and has he told the Secretary of State for Health or the Prime Minister?
Mr. Brown: We believe in the national health service, as I hope all right hon. and hon. Members do. That is what I mean about the limits of markets in health care.

Points of Order
5.11 pm
Mr. Simon Thomas: On a point of order, Madam Deputy Speaker. We are shortly to discuss the Health (Wales) Bill, and the Order Paper says that the third report from the Welsh Affairs Committee and the Government's response thereto are relevant. I am sure that they are, but it is also relevant that the Bill has been subject to considerable pre-legislative scrutiny by the Welsh Grand Committee, which consists entirely of Welsh Members, whereas, in theory, members of the Welsh Affairs Committee may be from any part of the United Kingdom and not from Wales. If future Bills relating to Wales are subject to pre-legislative scrutiny by the Welsh Grand Committee, can that be referred to on the Order Paper? It is important that right hon. and hon. Members know that the Welsh Grand Committee plays an important role in the pre-legislative scrutiny of legislation that relates only to Wales.
Madam Deputy Speaker (Sylvia Heal): The reference is usually to Select Committees, but if there has been an error on this occasion, the matter will be looked into.
Miss Anne McIntosh: On a point of order, Madam Deputy Speaker. You will be aware of the need for Members of Parliament to respect each other's parliamentary boundaries. You will also be aware of "Erskine May", page 123, which says that to intimidate a Member in his parliamentary duties by threats is a contempt. Mr. Speaker has been helpful
Madam Deputy Speaker: Order. I apologise for interrupting the hon. Lady, but this kind of complaint must be issued in writing, so it would be most helpful if she could do that.
Miss McIntosh: Further to that point of order, Madam Deputy Speaker.
Madam Deputy Speaker: Is it a different point of order?
Miss McIntosh: May I request that following the written response to the hon. Member for Harrogate and Knaresborough (Mr. Willis), the Speaker will take into account all instances going back to 1997?
Madam Deputy Speaker: I have no doubt that the Speaker will take the necessary steps when he responds to the hon. Member.

Orders of the Day

  Health (Wales) Bill
  [Relevant documents: The Third Report from the Welsh Affairs Committee, Session 2001/02, on The draft National Health Service (Wales) Bill, HC 959, and the Government's Response thereto, HC 1215, Session 2001/02.]
  Order for Second Reading read.
  5.14 pm
  The Secretary of State for Wales (Peter Hain): I beg to move, That the Bill be now read a Second time.
  May I say what a pleasure it is having you in the Chair, Madam Deputy Speaker, as you are a Welsh girl yourself?
  The Health (Wales) Bill builds on the reforms introduced in the Government's National Health Service Reform and Health Care Professions Act 2002. In bringing it forward, the Government are supporting the efforts made by the Welsh Assembly to improve the health and well-being of the people of Wales and to strengthen patient power in the health service. It is the first Wales-only Bill to be brought before this House, fresh from and improved by the process of pre-legislative scrutiny carried out not just by Members of this House but by Welsh Assembly Members, as well as by health professionals and patients. As such, it is an historic measure that marks another chapter in the process of constitutional change initiated by the Government with the establishment of the National Assembly for Wales.
  The Bill achieves three purposes—
  Llew Smith: May I refer to a general issue that is not in the Bill but relates to the Secretary of State's comment that this is all about patient power? Is he willing to think back to the time when he and others were heading the referendum campaign for a Welsh Assembly? They were saying that, in order to have patient power, they would have a bonfire of the quangos. Can he tell me when that bonfire will happen, as I have not noticed it yet?
  Peter Hain: My hon. Friend feels very strongly on these matters, as we all do. As he knows, a number of quangos have been abolished—
  Llew Smith: Will the Secretary of State give way?
  Peter Hain: I will give way in a minute, but I want to answer my hon. Friend's point by explaining how the Bill achieves the purposes that I set out—including a reference to independent public bodies—with which I do not think he would disagree.
  Let us consider, for example, the proposals, first, to establish an independent Wales Centre for Health to disseminate research and provide multi-disciplinary advice and evidence to support decision making, and, secondly to establish Health Professions Wales, a body to quality-assure the training and education of health care professionals. I am sure that my hon. Friend does not think that those two bodies should not be established. I am sure that he supports an independent

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  Wales Centre for Health providing the necessary research into health needs in his constituency and mine. I am sure that he also agrees with Health Professions Wales, and that he does not think that quality assurance of the training and education of health care professionals should be conducted by a body other than one that has the confidence of those professionals.
  Llew Smith: The Secretary of State referred to the abolition of many quangos. Will he accept that there are as many quangos in Wales now as there were when the Welsh Assembly was first set up? Will he also accept that, under the new proposals, there will be even more quangos in the health service than previously?
  Peter Hain: I think that my hon. Friend will recall that, when there was tremendous public opposition to quangos in Wales, it was partly because—I would argue that it was exclusively because—they were packed with Conservative place people. Because of that, they were not accountable in any way.
  Two independent institutions will be established by the Bill. My hon. Friend has not told me yet whether he agrees with the establishment of a Wales Centre for Health or Health Professions Wales. I am sure that the whole House agrees with that, as all the pre-legislative procedures have endorsed precisely those new independent agencies, because they strengthen the health service in Wales and provide us with a platform for creating a genuinely world-class health service in Wales.
  The third purpose—other than establishing an independent Wales Centre for Health, and the Health Professions Wales body—is to reform and strengthen community health councils in Wales and establish a statutory association that will support community health councils and have a performance management role. I am pleased to say that the Bill implements a commitment made in our Welsh manifesto last year to reform the CHCs in Wales to strengthen their role as community watchdogs.
  Mr. John Bercow: I congratulate the right hon. Gentleman on his appointment, and I have placed a bet on him to become a future leader of his party—but that is enough niceness for one day. Can he tell the House what is the total number of public service agreement targets set for the health service in Wales; how many have been met; how many have been missed; and what is he doing about the latter?
  Peter Hain: I welcome the hon. Gentleman to the debate on Wales. He is an articulate parliamentary performer.
  Mr. Nigel Evans: And he is on your campaign team.
  Peter Hain: Indeed, he is on my campaign team. However, his bet is not very welcome, as I am happy doing this job and will do any other job that my right hon. Friend the Prime Minister would like me to do. The hon. Gentleman is a talented youngster, and it is a shame that the Conservative Front-Bench team is all the less talented for his absence. The Bill does not cover the specific matter that he raised.
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  In our manifesto, we also pledged to build on the already successful legislative partnership with the Assembly and to continue to enact specific legislation for Wales where appropriate. That is precisely what the Bill does. It is yet another example of a Labour Government working in partnership with a Labour-led Assembly to deliver the means by which the national health service in Wales can be modernised and improved for the benefit of the people of Wales.
  Mr. Simon Thomas: The Secretary of State visited the National Assembly on Monday or Tuesday and he heard the complaints from all parties about the narrow gap for Welsh legislation. He has just talked about partnership, but why can we get through only one Welsh Bill a Session? This Bill is the one for this Session. Will the right hon. Gentleman work harder to see whether he can widen the gap and will he work with institutions in this Parliament, such as the Welsh Grand Committee, so that we can fast-track legislation and create an even better partnership between the National Assembly and the House of Commons?
  Peter Hain: We do not need to measure the extent of Welsh legislation by the number of Welsh-only Bills in the Queen's Speech. A whole number of pieces of legislation have Wales-specific clauses in them—on planning, local government and several other matters. I am sure that the hon. Gentleman will welcome the Licensing Bill, which deals with the costly and mischievous referendums that are called even though Sunday drinking and Sunday licensing are widely supported across Wales. He is a diligent Back Bencher, so I urge him to look at the clauses in all the Bills that have been drafted at the request of the Assembly. With the support of my right hon. Friend the Secretary of State for Northern Ireland, who was the previous holder of my post, and the excellent assistance of my hon. Friend the Parliamentary Under-Secretary of State for Wales, they design into a raft of Bills coming before Parliament this Session provisions that cover the need that Wales has for Welsh-only clauses in general Bills that also apply to England. In this case, we have a Welsh-only Bill. I ask him to consider the facts rather than stick to the dogma.
  When we came to office, the health service was crying out for a programme of sustained investment. The hospital-building programme had almost ground to a halt, and nursing shortages had resulted from cuts in training in the mid-1990s. The budget recently published by the Assembly, which draws on resources made available by the outcome of the Government's spending review and confirmed by my right hon. Friend the Chancellor of the Exchequer this afternoon, will see the health budget in Wales rise next year to £3.8 billion. That is nearly £1,300 for every man, woman and child in Wales, and an increase of more than 70 per cent. since we came to power in 1997.
  The number of staff employed by NHS Wales has risen by more than 12 per cent. since 1997, and the Assembly has announced plans for 6,000 extra nurses, 700 more consultants and GPs and 2,000 more health care professionals over the corning years. During the last five years, the number of medical students in training has increased from about 970 to 1,104. By 2004—in a couple of years' time—the number will have increased to

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  1,385. They are all important increases in staffing in the health service in Wales and compare with the background of Conservative rule when there were cuts, after cuts, after cuts.
  Mr. Jon Owen Jones: Will my right hon. Friend acknowledge that, given the impressive list of inputs in the health service that he has mentioned, it is all the more important that we have a rigorous and independent audit structure so that we measure outputs and ensure that they are commensurate with the input that the management of our economy under a Labour Government has managed to provide for the health service?
  Peter Hain: I very much agree, and the proposals provide for an independent inspection audit. I acknowledge my hon. Friend's contribution towards creating the foundations of the success on which the Assembly is now building when he was Minister for health in the then Welsh Office, succeeding another good Welsh health Minister, my hon. Friend the Member for Bridgend (Mr. Griffiths).
  The recent opening of the Swansea clinical school, the proposal for clinical schools in north Wales and at the Royal Gwent hospital, together with a graduate entry scheme to medicine also planned for Swansea, are significant stages in the Assembly's plans to increase the number of doctors in Wales. There are 700 specialist registrar training posts in Wales and there will be 60 extra posts by next year, with particular emphasis being placed on areas with shortages. We have also pioneered innovative ideas to improve services for the public. That includes NHS Direct Wales, a 24-hour helpline staffed by nurses which is available throughout Wales. It took nearly 239,000 calls in the 12 months to September 2002, an increase of more than 40 per cent. on the previous 12 months.
  The NHS in Wales is treating more patients than ever before, and I salute the dedication of NHS staff in Wales—doctors, nurses and many others—as they cope with the ever-increasing demand for treatment and care. After decades of underinvestment, there can be no quick fixes on waiting times. Significant progress has been made, however. The target to reduce waits for cardiac surgery to a maximum of 12 months has been met in full and the challenging target of reducing waits for orthopaedic surgery to a maximum of 18 months has been broadly met. The latter target is especially important for those of us who represent constituencies in Wales with a long legacy of industrial disease. The waiting lists for people who need hip or knee operations, for instance, are coming down, and they are on target to reduce even further.
  Mr. Evans: The Secretary of State pays a glowing tribute to the reduction in waiting lists. In 1997, 378 people waited for more than 12 months for out-patient treatment. The figure for 2002 stands at 36,302. How does he account for that enormous increase?
  Peter Hain: I do not gloss over the fact that the waiting list situation in Wales is not as good as it should be. The hon. Gentleman is right to draw attention
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  to that. Two factors primarily account for the difference. The first is the increased demand for the use of the NHS in Wales. That is a sign of increasing excellence in our hospitals and health services in Wales. The second factor is best demonstrated by the example of turning an oil tanker around. That tanker was going in wrong direction under his Government, and it takes time to change its direction.
  Waiting lists for orthopaedics fell by more than 36 per cent. last month. That is good news for patients because most trusts in Wales now have no one waiting for more than 18 months for orthopaedic operations. Progress has also been made on cataract waiting times, with the number of people waiting for more than four months falling by more than 10 per cent. The waiting time target for cardiac surgery has been sustained with no patients waiting more than 12 months.
  The hon. Gentleman made an important point. One of the greatest health challenges facing the Assembly is the length of time that many patients have to wait to receive treatment or to see a consultant. We all recognise that too many people have to wait far too long. There are no quick fixes. The reasons behind that are complex. They relate to the legacy that we inherited from the hon. Gentleman's Government and to increasing demands on the system. There is no doubt, however, that substantial progress has been made, especially in the priority areas targeted by the Assembly. We are on target to improve the quality of health care in respect of waiting times and other matters.
  Mr. Bill Wiggin: Does the Secretary of State agree that the level of funding for the NHS in Wales is already at a European level, where there are no waiting lists, and that the over-18-month waiting list has increased by more than 1,800 people since the pledge was made when the Assembly was established?
  Peter Hain: I have partly answered that point. I do not think that we have yet reached European average levels. Getting there will take time, and the money to achieve that objective is being made available. Turning the NHS around from its state when we inherited it a little over five and a half years ago will be a long job.
  The difference between us is that we are willing to put in the investment while the Conservative party would cut that investment. Indeed, its Front-Bench spokesmen have repeatedly said that they oppose our public spending plans, and they have confirmed that this afternoon. We are able to maintain public investment at record levels and, in the health service, to increase it every year until 2008. Those are long-term plans enabling hospital managers, consultants, doctors and nurses to plan ahead. The quality of care, with the NHS treating more people all the time, is steadily going up.
  The NHS in Wales is treating more patients than ever before, and I salute the dedication of all its staff. In contrast to the Conservatives, who closed 17 hospitals between 1979 and 1997, we promised in our general election manifesto last year to open 10 new hospitals in Wales over 10 years. The latest steps in the capital programme were announced in the Assembly budget last month and include a replacement for the cottage hospital in Tenby and new community hospitals in Merthyr and in Ebbw Vale, in the constituency of my

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  hon. Friend the Member for Blaenau Gwent (Llew Smith). I am sure that he endorses that decision by the Assembly, if few others.
  Both the Government at Westminster and the Welsh Assembly Government in Cardiff believe that the future of the health service in Wales depends on a process of investment and reform. That is why the Bill builds on the measures in the National Health Service Reform and Health Care Professions Act 2002 which remove an unnecessary tier of bureaucracy in the health service in Wales and introduce greater local accountability, placing local decision making in the hands of local communities, health professionals and patients. The proposals build on earlier restructuring by the Welsh Office, which reduced the number of NHS trusts—they might be described as quangos—from 26 to 15.
  The Assembly has been working hard to increase the responsiveness of the NHS to patients and the public and to strengthen the public's influence over the running of the health service. Proposals in the Bill will involve the people of Wales in their health service more fully than ever before. Already, strong relationships are being built between health and social care, and the Assembly has been at the forefront of bringing the patient's voice into decision making. The strengthening of that voice through the enhanced community health council structure, which is largely co-terminous with the local authority and local health board structures, will give the people of Wales an unparalleled, strong and meaningful local structure that will deliver for them, provided that the investment continues as we intend it should.
  Alan Howarth: Does my right hon. Friend agree that the continuing existence of community health councils in Wales will be of great assistance to the new health boards, enabling them to fulfil their remit of developing health, social care and well-being strategies for their communities, thereby enabling Wales to make progress in preventive health care strategies? It will also enable the health service to play the part that it ought to play with the crime and disorder reduction partnerships. In those respects, Wales will be leading the United Kingdom.
  Peter Hain: And not for the first time. I agree with my right hon. Friend that the retention of community health councils in Wales provides the bedrock for community involvement. Wales is leading England in that matter just as it is leading England by introducing free bus passes for pensioners and disabled people and by introducing Assembly learning grants, and so on.
  Further evidence of the importance of the reform process in Wales and of our commitment to ensure that the extra resources allocated to health in Wales are spent in the most effective way came with the welcome recent announcement by the Assembly Finance Minister, Edwina Hart, that Derek Wanless, who advised the Chancellor on the funding of the NHS at a UK level, has agreed to act as an advisor to a review of health and social care in Wales.
  Mr. Simon Thomas: I thank the right hon. Gentleman for his generosity in giving way. He will recall that the Wanless report stated clearly that public investment in health care was the best and most effective and efficient way forward, and I am sure that he, like me, supports
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  that. Will he therefore take this opportunity to support all those in the National Assembly who want to rule out the introduction of foundation hospitals in Wales?
  Peter Hain: I welcome the hon. Gentleman's support for the stance adopted by Derek Wanless. It was on the back of his report to the Chancellor that we as a Government made a clear decision earlier this year that we would go for increased publicly funded health investment—
  Mr. Thomas: We voted for it.
  Peter Hain: It is good to know that, for once, the nationalists voted for a socialist measure. The more that happens, the better for us—if not for them.
  Returning to the Wanless report and the application to Wales of foundation hospitals, the National Assembly has made it clear that it sees Wales' needs as being completely different from those elsewhere in the United Kingdom; therefore it will not introduce foundation hospitals. I support the National Assembly in that decision. That is precisely what devolution is about—it was so that different decisions could be made according to different circumstances and different needs that we established the National Assembly for Wales, and a far better model for decision making it is than an independent Wales, which the hon. Gentleman's party supports. An independent Wales under the nationalists—Mr. Speaker, IL will not go too far down this road—would be stricken with poverty, and there would be health service cuts as well as all the other difficulties that the nationalists would bring to Wales.
  The Wanless report that the Assembly will commission will both help to guide the reform and modernisation agenda for the NHS in Wales, and provide valuable evidence in allocating resources beyond the end of the next financial year. There are now clear dividing lines between the Government and the Opposition, between Labour and the Conservatives, on health. Labour stands for investment and reform, the Conservatives for cuts and privatisation. Earlier this year the Opposition voted against the Budget that released the extra resources that the Assembly is now investing in the health service in Wales. They toured the world in search of a policy on the health service, only to come up with the same old Conservative nostrums of privatisation, making patients pay for their own health care, and subsiding those who are able to pay for treatment.
  As for Plaid Cymru, it would not introduce the necessary reform and it could not afford the necessary investment. I make no apology for again asking the question that Plaid Cymru Members never want to answer: in an independent or self-governing Wales, how would they finance the record levels of public investment in the national health service that we are delivering? The answer is they would not, because an independent Wales could not.
  Mrs. Jackie Lawrence: Does my right hon. Friend agree that the nationalists have never satisfactorily answered this question about separatism: where would the money come from, bearing in mind that there is a significant difference between

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  taxes raised in Wales and public spending in Wales—a difference that could mean a 30 per cent. cut in public services, or a 50 per cent. tax increase?
  Peter Hain: My hon. Friend makes a valid and wholly convincing argument. If the nationalists ever got their way, health services in Wales would be cut and hospitals would be closed, because they do not have the ability to finance the health investment that we are providing in record amounts, which the Bill is designed to underpin.
  Part of the Bill can be traced back to the policy document "Better Health—Better Wales" issued by the Welsh Office in 1998, under the leadership of the then Welsh health Minister, my hon. Friend the Member for 13ridgend (Mr. Griffiths), and to the Assembly's ambitious and wide-ranging national plan "Improving Health in Wales—A Plan for the NHS with its partners", which was issued in 2001 and which set out a 10-year programme of renewal.
  Last year, we announced our intention to introduce legislation to reform the provision of health services in Wales by establishing local health boards, strategic health partnerships, the Wales Centre for Health and Health Professions Wales. I am pleased that we have been able to establish local health boards and strategic partnerships through the National Health Service Reform and Health Care Professions Act 2002, which went on the statute book on 25 June this year. That Act is important, as it provides the Assembly with a foundation on which to begin delivering the reform agenda that it and the Government want to carry through.
  However, we still needed to reform and strengthen community health councils and establish the Wales Centre for Health and Health Professions Wales. We therefore published the draft National Health Service (Wales) Bill—now called the Health (Wales) Bill, which we are considering this evening—on 17 May this year, to include those remaining three elements. Publication of the draft Bill signalled the beginning of an intense three-part scrutiny—by Parliament, the National Assembly for Wales and the public and those with a direct professional interest in the Bill. Pre-legislative scrutiny is an innovation introduced by the Government to elevate the quality of draft Bills, obtain greater involvement by people likely to be affected by proposed legislation, and improve the planning of the legislative process. The Health (Wales) Bill is one of the first measures to benefit from that innovation, and has been much improved and refined by the valuable contributions of a range of institutions, professional bodies and individuals. I pay special tribute to the Select Committee on Welsh Affairs and its Chairman, my hon. Friend the Member for Clwyd, South (Mr. Jones), for their contribution, and to hon. Members from all parties, but especially my own, representing Welsh constituencies.
  Mr. Wiggin: And me, I hope.
  Peter Hain: I am not sure that the hon. Gentleman made a valuable contribution, but as I am a generous soul, I will take it on trust.
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  So thorough was the process of refinement that not even the title of the Bill remained untouched. We therefore have before us today not the National Health Service (Wales) Bill but the Health (Wales) Bill. Pre-legislative scrutiny involved three parallel activities. Parliamentary scrutiny in the House was conducted by the Welsh Affairs Committee, and its report was debated by the Welsh Grand Committee. In the other place, Members were briefed on the Bill by both Government and Assembly Ministers and invited to register any concerns. The Assembly's Health and Social Services Committee undertook scrutiny of the draft Bill on behalf of the Assembly and there was also a public consultation.
  It is a testament to the robustness of the original policy that the draft Bill attracted widespread support. Indeed, the process of pre-legislative scrutiny revealed no significant concerns about the policy. In all, 45 recommendations for change to the draft Bill were made—some to remedy omissions, some to clarify the powers both of bodies dealt with in the Bill and the Welsh Assembly, and others to extend its scope. We decided to consider 17 recommendations further. In only one instance did we find that there were legal or technical reasons why it was not necessary or possible to amend the Bill as suggested. In the remaining 16 instances, it was appropriate to amend the draft Bill to achieve what was intended, and we did so.
  The changes have definitely improved the Bill. Some acknowledged omissions have been rectified and the powers and independence of community health councils, to which my right hon. Friend the Member for Newport, East (Alan Howarth) referred, the Wales Centre for Health and Health Professions Wales have been clarified. By retaining CHCs and making their membership a better reflection of the people whom they represent, by providing complaints advocacy services independent of the NHS in Wales, and by giving CHCs powers to inspect premises providing NHS services, we will build on the strong local relationships, which already exist within the health service in Wales. By establishing a statutory association of Welsh CHCs that will not only advise and assist CHCs but have a performance management role, we will guarantee the people of Wales a consistent service of the highest standard across Wales.
  By establishing the Wales Centre for Health as an independent body, we shall ensure that the people of Wales have the best multidisciplinary advice on health hazards, that risks to health are properly assessed and that research and other evidence is made available to support effective policy making and decision taking. By establishing Health Professions Wales as an Assembly-sponsored public body, we shall provide quality assurance for the training and education of those in the health care professions in Wales. Its remit will be extended to cover not just nurses, midwives and health visitors, but allied health professionals and clinical scientists.
  By 2004, there will be more than 4,300 nurses in training in Wales. That is more than double the number in 1997, when 2,029 were in training. The annual allied health professions training intake has been increased from 494 in 1999–2000 to 649 in 2001–02, and will have been increased by a further 681 by 2003–04. Among the increases in recent years, the occupational therapy

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  intake has risen from 161 when we came to office in 1997 to 219 this year. In physiotherapy, there has been a rise from 168 in 1997, when the Conservatives left office, to 288 this year.
  Mr. Elfyn Llwyd: The right hon. Gentleman is right to say that there has been an increase in the number of occupational therapists, but unfortunately, it is not sufficient. Will he please look again at the provision of bilingual occupational therapists, which is important in relation to speech therapy and so on? Furthermore, what will the Bill do about the dental crisis in Wales?
  Peter Hain: I shall certainly look at the hon. Gentleman's question, because I agree that that is an important aspect of providing a high-quality health service for all the people of Wales.
  The Bill is designed to improve the health care targets and areas that it is explicitly set up to deal with. Health Professions Wales will set clear standards at an all-Wales level for the continuing personal and professional development of all sectors of the work force. The Bill will give the body a proper statutory footing. It is an enabling Bill that devolves powers to the Assembly to determine through its own secondary legislation the detail of the new arrangements. That is another example of the truism that the Assembly is a powerful body. It has enormous powers to influence and shape policies as it determines they should be for the needs of Wales.
  That is as it should be. The devolved Assembly will work in partnership with the health service in Wales and the people of Wales to determine what is right for Wales. That demonstrates once again that, through the devolution settlement, we can deliver policies adapted to the particular needs of Wales. The Bill follows previous legislation such as the Learning and Skills Act 2000, the Children's Commissioner for Wales Act 2001 and the National Health Service Reform and Health Care Professions Act 2002, all of which had specific Welsh clauses. It represents devolution in action and progress through partnership.
  Mr. Bercow: I am grateful to the Secretary of State for generously giving way again. Given that health inequalities are often income related—to put it bluntly, poorer people are more likely to become and remain ill—will he point to what provision there is in the Bill or will appear subsequently in secondary legislation to tackle that disturbing phenomenon?
  Peter Hain: The hon. Gentleman is absolutely right that income inequalities are a tremendous source of health inequality and are a particular problem in Wales. In valley constituencies such as those that I and the Under-Secretary, my hon. Friend the Member for Islwyn (Mr. Touhig), represent, that is a curse and a legacy of our industrial history. On the help provided by the Bill, the Wales Centre for Health will ensure that those inequalities are monitored and that the policies that are designed by the Assembly and, where necessary, implemented through primary legislation here are tailored to deal with them. Health Professions Wales will also ensure that the professions in Wales are trained to a standard that is sufficiently high to address those inequalities.
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  Before I gave way to the hon. Member for Buckingham (Mr. Bercow), I was about to say that I commend the Bill to the House.
  5.49 pm
  Mr. Nigel Evans: The debate is important because it gives hon. Members an opportunity to discuss issues that relate to the national health service in Wales. Post-devolution, the ability to ask questions on health is somewhat constrained. That is a pity. Members of Parliament with an interest in Welsh affairs must be aghast at what the NHS has become for far too many people in Wales.
  I welcome the fact that the Bill was published in draft. As the Secretary of State said, many observations and comments were received before it appeared in its current form. I believe that we have fewer opportunities to debate issues fully now than when I was first elected 10 short years ago. Most of that change has occurred in the past five long years.
  The Bill is another stepping stone in the troubled waters of the NHS that leads to yet more change.
  "The National Health Service is safe in our hands."
  "You only have 24 hours to save the national health service."
  Those statements must ring loud and hollow in Wales. I have used the NHS in Wales. I lived in Swansea for 33 years; my brother worked as an electrician on Singleton hospital when it was built, and my other brother, Anthony, had an operation for cancer at that hospital in January 1998. I cannot pay great enough tribute to the staff at every level who gave my brother back his health. I pay tribute generally to the hardworking staff of the NHS. They work under enormous pressure and constant change.
  Our health service has genuine problems, despite the extra revenue that has been earmarked for the service and that the Secretary of State mentioned. Sadly, for far too many people, the extra expenditure is not reaching the right parts to ensure an improved service. Some of the biggest complainers about that miserable fact are those who work in the NHS.
  I want to make several points about improving the service for our patients. The retained community health councils, which the Bill covers, will want to consider many deficiencies. Do hon. Members remember the following pledges:
  "By the end of a Labour Assembly's first term no one will wait more than 18 months for inpatient treatment";
  "By the end of a Labour Assembly's first term no one will wait more than 6 months for outpatient treatment"?
  What has gone wrong?
  The Labour party could state that the Administration in Cardiff are not technically Labour; they are a Lib-Lab Administration. Technically, that would be correct. The Labour party could therefore try to blame the Liberal Democrats for the awful state of waiting lists in the NHS in Wales. Much as I dislike the Liberal Democrats, that would be dishonest. Although they will have to take their fair share of the blame, the Labour party would not have behaved differently if it had been able to muster sufficient votes to avoid having to rely on the Liberal Democrats to retain power.
  Let us consider the size of the problem: 4,335 people have been on the in-patient waiting list for more than 18 months—1,810 more than when the pledge was

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  made. In 1999, when the pledge on out-patients was made, 25,676 people were on the waiting list. Today, the figure is 83,443. When we left office in 1997, the figure was 5,956. What would Labour Members say if we had presided over that appalling state of affairs? It is a scandal.
  Mark Tami: Does the hon. Gentleman agree that the 18 years of total under-investment in the health service led to the current waiting lists? We do not have sufficient doctors and consultants because it takes time to train them, and the Conservative Government were not prepared to do that.
  Mr. Evans: I wonder how many more years the hon. Gentleman and his colleagues—
  Madam Deputy Speaker (Sylvia Heal): Order. I remind hon. Members that we are not holding a general debate on the health service in Wales; we are discussing the Bill. It would be appropriate if hon. Members confined their remarks to that.
  Mr. Evans: I am answering the Secretary of State's points. I listened to him carefully. The CHCs, which the Bill will retain, will also consider aspects of his speech.
  For how many more years must we listen to excuses? The hon. Member for Alyn and Deeside (Mark Tami) has to accept that the Labour party has been in power for more than five years. The statements that the Labour party made during the 1997 and 2001 general election campaigns—
  Madam Deputy Speaker: Order. Again, I remind the hon. Gentleman of the parameters of the debate. We are considering the Health (Wales) Bill.
  Mr. Evans: Yes, Madam Deputy Speaker. As you know, the Bill deals with the retention of the community health councils, which will consider the aspects that we are discussing. We want to ensure their independence so that they can expose the issues that many hon. Members will doubtless raise today.
  Huw Irranca-Davies: The hon. Gentleman mentioned five years. How long does it take to train a consultant?
  Mr. Evans: Part of the problem is retention after training. I have spoken to the Royal College of Nursing, which states that there are 30,000 registered nurses, but that more than 8,000 do not stay in the NHS The hon. Gentleman also knows that the Government have scoured the world for extra nurses and consultants, yet shortages remain. They must accept that there is a problem.
  Mr. Wiggin: My hon. Friend knows that consultants, especially in Wales, have not agreed a settlement with the Government. There is no point in Labour Members shouting abuse when the Government have failed to agree a deal with consultants on funding.
  Mr. Evans: My hon. Friend is right. The statistics that we use in today's debate have a genuine impact on patients in Wales. People are suffering because of the deficiencies. That is the real problem.
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  When I mentioned waiting lists to the Secretary of State earlier, he compared the NHS with an oil tanker and said that it had to be turned around. The right hon. Member for Holborn and St. Pancras (Mr. Dobson) once described the NHS as an oil tanker when he was Secretary of State for Health. Many Secretaries of State have passed under the bridge since then. The NHS now resembles the Spanish oil tanker that has sadly run aground and is currently spilling oil. Something must be done about the waiting list problem in Wales for the sake of all the patients in Wales.
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): The hon. Gentleman must acknowledge the distance that we have had to travel in rebuilding the health service. Does he recall that under the Conservative Administration, 70 hospitals were closed, 8,000 general beds were removed from use and there was a 25 per cent. cut in nursing and midwifery training? We have had to travel that distance to start putting things right.
  Madam Deputy Speaker: Order. Again, I remind hon. Members that we are discussing the Health (Wales) Bill, not the national health service in Wales.
  Mr. Evans: In that case, I shall respond to the Under-Secretary only briefly. Many people will look back on 1997, when waiting lists were much shorter, and wish that the Conservatives were still in power.
  Gareth Thomas: Will the hon. Gentleman give way?
  Mr. Evans: No. I have given way often, and I want to move on.
  Community health councils will want to consider in detail the issues that we are discussing and expose some of the problems. I therefore believe that we should examine carefully CHCs' independence from the Assembly.
  I spoke about the professions that the Bill covers, including GPs. Let us consider some of the comments of Dr. John Chisolm, chairman of the BMA practitioner committee, who published a book entitled "Crisis in Care: A GP dossier". I heartily recommend it to all hon. Members who are present. They should examine the Welsh sections if nothing else. It is a harrowing read. He comments on some of the GPs who work in Wales and will be covered by the CHCs. One is Andrew Dearden, a doctor from Cardiff. He says that some people wait as long as six years for hip replacement operations.
  He states:
  "I have many patients who are crippled by arthritis and need hip replacements. The word 'crippled' is not an exaggeration for many of them—some are completely housebound and do not go out of the house except to attend hospital appointments. They are often on multiple painkillers, none of which are controlling most of the pain."
  While we debate the Bill today, let us keep in mind the people to whom it relates: the patients facing lengthy waiting lists with GPs. The GPs are hugely frustrated by that.
  Gareth Thomas: Can the hon. Gentleman tell us whether his party supports the Bill? Does he agree that rather than embarking on a regurgitated rant, he would do the House a greater service if he told us whether he supports the technicalities of the Bill—yes or no—and why?
  Mr. Evans: The hon. Gentleman will have to be a little more patient. We support some aspects of the Bill, and we will wish to improve some aspects of it when it reaches Committee. I hope that the hon. Gentleman will serve on that Committee. No doubt we will then be able to debate at length improvements to the Bill. The hon. Gentleman may be surprised to find that amendments are tabled even by his hon. Friends.
  The Secretary of State said that the Opposition did not want a national health service, and that under the Conservatives only the rich would get treatment and those who were poor would not. It is a chilling fact that 250,000 people last year used their own money to have operations. That is the figure for the whole of the United Kingdom, and some of those cases would have been in Wales. People withdrew their life savings or borrowed money because they were in pain and the waiting lists were far too long.
  We must focus carefully on what the Bill is about. We all want an improvement to the service provided to the people of Wales. That is why we want to ensure that the Bill is improved in Committee.
  Mr. Bercow: Is my hon. Friend aware that a cursory study of the Bill suggests that it contains no fewer than 18 references to orders and regulations, rendering it something of a parliamentary eunuch? Does he agree that it is therefore essential that we are told tonight by the Government whether the regulations will be subject to the negative or to the affirmative procedure, and that the National Assembly for Wales publishes draft intentions of what it plans to introduce?
  Mr. Evans: I agree with my hon. Friend. That would be an informed position for the Assembly to take. As we see from the Bill, many powers are to be devolved to the Assembly. I want to know what consultation the Assembly will have with various bodies before it introduces regulations that will impact on the whole of Wales.
  I read the second report of the so-called First Minister, Rhodri Morgan, for 2001–02. I wanted to see what he had to say about the NHS, because it is devolved through secondary legislation. Only three of the 35 pages are devoted to the NHS. The First Minister sets out some of the targets. One of those strangely and boldly states:
  "In the main, the maximum waiting times for orthopaedics have been reduced to 18 months."
  I do not know what is meant by "in the main". I do not see that as a target, but there we go. I then looked at the statistics made available by the NHS in relation to orthopaedics. It is clear that in most of the health authority areas, the waiting time for orthopaedics is more than 18 months—that is, more than 72 weeks.
  Mark Tami: Does the hon. Gentleman agree that all his arguments show the need for investment in the health service—investment that his party opposes?
  Mr. Evans: I agree that investment is needed in the health service, but it must be investment in the right
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  areas. Clearly, the investment is not going into the right areas at present. I hope that with his interest in the health service in Wales, the hon. Gentleman would want to ensure that the extra national insurance—the extra taxation—that everyone is paying goes into the right areas. When people are taxed to the hilt and receive the sort of service that we are discussing, they feel aggrieved.
  Lembit Öpik: Which areas of the health service would the hon. Gentleman not invest in? Out of which areas would he take money?
  Mr. Evans: The hon. Gentleman, as a Liberal Democrat, is part of the coalition, or the official irritation, as I prefer to call it. His party is just a poodle for the Labour party in the Assembly, and Labour's little helpers at Westminster. When there are more managers than nurses in the NHS, we must refocus on where the money should go.
  Huw Irranca-Davies: Will the hon. Gentleman give way?
  Mr. Evans: No. I must make progress.
  Will the Secretary of State please look again at the waiting lists for orthopaedics and see how many people have been waiting for way over 18 months? That is a real problem, which must receive the proper attention. It is pointless having targets if they are not likely to be met. Why does the Assembly promise what it cannot deliver, and why does it claim credit for what it cannot achieve?
  Why did Rhodri's second report, if it was to be honest and transparent, not give us all the figures for waiting times so that everyone could judge what the Administration had promised and what they had achieved? The document is spin. Unless the Administration are fully truthful about the position next year, I suggest that they do not bother to produce a report next year, and instead put the money saved towards employing an extra nurse. I suggest an extra nurse because, despite all that the Secretary of State said earlier, there are still 700 vacancies in the NHS for nurses, even though there are 1,000 Filipino nurses working in the health service in Wales. Thank goodness for the job they are doing, but there are still almost 750 vacancies.
  Mr. Roger Williams: Has the hon. Gentleman's party estimated how much money would be saved by cutting the administration of the NHS in Wales?
  Mr. Evans: The hon. Gentleman should know that we would at least examine the areas in which the bureaucracy has grown, where the number of managers has grown and where there are inefficiencies, instead of making excuses all the time to explain why more money has to be pumped in while services are deteriorating. The sad thing for him and his constituents is that they are getting a worse service at the same time as they are paying extra taxes.
  Huw Irranca-Davies rose—
  Mr. Evans: No. I must make a little more progress. I know that other hon. Members want to take part in the debate.

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  Part of the Bill deals with Health Professions Wales and the directions that the Assembly may give to health workers, including nurses. Part of its function must be to ascertain that newly qualified nurses earning £15,000 feel properly valued in their roles. How can we retain them when they are qualified, and how can we encourage more of the newly qualified nurses to go into nursing? Pay is vital, and we all await the outcome of the Agenda for Change at the end of the year, and the impact of Health Professions Wales in ensuring training for our nurses, and ensuring that the training will come to something. It must be a matter of deep concern that so many of those who are trained do not go intro nursing at the end of their training.
  All of us who read the Western Mail today saw with great delight that £14,000 has just been spent on a new logo for the Welsh Assembly—£14,000 on a new dragon. What a waste of money. The patients waiting for operations could not care a jot about such expensive trivia. If a new logo costs £14,000, and a nurse costs £15,000 a year, on what would hon. Members prefer the money to be spent?
  We all want an improved national health service in Wales. Will the Bill deliver that? It contains no reference to foundation hospitals, which were mentioned by Plaid Cymru Members earlier. The Government believe that foundation hospitals are the answer for England, but not a mention of them for Wales. I wonder why. The retention of community health councils is to be welcomed, as are their enhanced powers, but the power given to the Assembly to decide whether they could be abolished in the future—indeed, the very name could be changed by the whim of the Assembly—is over the top and unacceptable.
  Yes, it is right to ensure that the whole of Wales is covered by CHCs, but we need to examine ways of giving the CHCs greater autonomy, away from the Welsh Assembly. They could fall foul of the Assembly by exposing many of the deficiencies in the health service in Wales, some of which I have highlighted. The CHCs could then face the bullet; they could be abolished, just as has happened in England. Many hon. Members here today helped to bring that about by not supporting the retention of English CHCs. Only one Member from a Welsh constituency voted against their abolition.
  Part of the CHCs' remit is to be the patients' champion. When the newly reformed national health service in Wales gets off the ground in April of next year, we know that it is going to be hugely bureaucratic. We also know that it is going to be expensive. Even a former Welsh Office Minister has termed it "unworkable". A leaked report presented to Rhodri Morgan, Jane Hutt and the Secretary of State for Wales by the senior civil servant, Bryan Mitchell—the man overseeing the reform—stated that there were major risks involved in the reorganisation. We were told that it was going to be cost-neutral; we now know that it is going to cost £15 million. The Secretary of State for Wales assured me in the Welsh Grand Committee that this was a one-off payment. We will compare the costs after the 22 local health boards are up and running, to see whether the change has been cost-neutral. People should have this kind of information before they vote these measures through. There are also a number of other concerns
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  relating to the reforms. Let us suppose that the CHCs blow the whistle on all this, when the new organisations are up and running. What protection will there be for them?
  We know that Jane Hutt receives a lot of criticism—all of it fair, in my book, yet she hates it. She has stated that
  "people don't want to hear the media bashing politicians. They want to know about us driving waiting lists down".
  Well, there is not much chance of that, is there? What she fails to recognise is that the reason she is being bashed is that she is signally failing to do as she promised. No doubt the Assembly would like to have the same powers over the media as they are being given over the CHCs. In the Bill, it can decide the membership of the councils, the means by which the chairman is elected, the proceedings of the councils, and the discharge of any function of the councils by a committee of the councils. The Assembly will also be able to decide who consults the councils, the payment of councils, the preparation and publication of reports by councils, matters to be included in any report, what the councils may receive from health authorities, local health boards, strategic health authorities, primary care trusts or NHS trusts, what sort of information they can give out to other people or other councils, and anything else that takes its fancy.
  Gosh! If only the Assembly had such powers over the media! It could appoint editors and journalists, decide what goes into the newspapers, what information the public could and could not read, and who that information went to. What sort of far-reaching, searching publication would that produce? Well, it would be a bit like Rhodri Morgan's report to the Welsh Assembly and the people of Wales: wholly spun, wholly disinfected, wholly engineered and wholly useless. Anyone who believes that the Assembly would not use its powers unreasonably should remember that it abused its powers by delaying the local elections from 2003 to 2004 so that they did not coincide with the Assembly elections. That was a complete disgrace, but it is going to happen.
  We need much more protection and independence for the CHCs. If we want them to be a whistleblower and a champion for the people of Wales, let us give them some independence from the body that might well be on the receiving end of some of their criticism. I want the CHCs to be empowered to check on all the organisations giving health services to patients in Wales, but I want them also to liaise with other bodies in England, Scotland and Northern Ireland, so that complaints may be taken up from any patients receiving care in facilities in Wales. I would like similar rights to be afforded to Welsh patients receiving care in institutions in other parts of the United Kingdom.
  I also wish the CHCs to be consulted and involved in any name changes, abolitions or mergers. More autonomy and independence for CHCs will be important. It is also important that CHCs should consult the people of Wales and issue an annual report on the people's views on the service that they are receiving. Those views will be positive in many regards relating to the people working in the NHS, but I receive letters on a regular basis about the state of health provision in my own area, and it is not always so

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  positive. Only if we encourage this sort of publication will we all learn about any deficiencies, and I am sure that best practice would lead to fundamental changes being made throughout the whole of the NHS.
  The Wales Centre for Health has been widely welcomed, and we will be looking for ways in which it can engage in a constructive dialogue with comparable bodies elsewhere in the UK. One of its remits is to keep people in Wales informed on matters that affect their health. That is right, but much of the information gathering and research could well be carried out elsewhere. Furthermore, it could be pioneering an area of health concern and be way ahead of what someone else is doing—on certain aspects of drug abuse, for example—and, in such circumstances, it would only be right for the information involved to be shared and for collaboration to take place, to give any information campaigns the greatest effect.
  I see that the Assembly is to give itself the power to appoint the chairman of the Wales Centre for Health. I hope that that will be done in an open and transparent way, and we will look for ways of ensuring that that is the case. Evaluation of the centre's work will also be important, in terms of assessing how effective it is in getting positive health messages across. We will examine how that can best be achieved. I see that the Auditor General for Wales has responsibility for this provision in the Bill. There will be budgetary implications for this body.
  Today's report that parents in Neath, Port Talbot and Swansea are shunning the measles, mumps and rubella jab in increasing numbers must be of concern to the Government. More than 25 per cent. of children have no immunisation at all, and the fear is that this could lead to an outbreak of measles, mumps and rubella. The Wales Centre for Health may well be involved in research into the fears of a growing number of parents about autism. Indeed, it may wish to make recommendations on single jabs being made available.
  Health Professions Wales will work closely in liaison with a number of other bodies. We will wish to see that it works closely in consultation with the bodies and professions that it covers, especially nurses. I have a concern about the training and qualifications necessary to work in the Welsh health service, and I would like to see training and regulations there that are very similar to those that exist in the rest of the UK. Wales is a small country, and nurses might find themselves unavailable for work in Wales if they had been trained in England or, for example, if they were agency nurses who could not get work in Wales if they lived in Bristol, because a wholly different system was operating in Wales. Given the nursing shortage to which I referred earlier, I would have thought that flexibility and ease of working in Wales would be the byword, as opposed to seeing how different from England or Scotland we can make the system.
  I wish to see a world-class health service in Wales, with our dedicated staff receiving the best support and our patients receiving the best care. I am angry that this is not happening after more than five years of a Labour Government and three years of a Welsh Assembly. The number of promises was high. The criticism of the NHS under the previous Conservative Government was constant, but I do not remember Labour Members ever
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  rebuking themselves in those days for talking down the NHS by making constant criticisms or by pointing out where things were going wrong.
  The Government are embarking on further change, on top of other changes, and this constant change cannot be good for the system. After all the changes that have been made—and with the differences from other parts of the country—it will not be a case of not knowing where the buck stops for most people; it will be impossible to work out where it starts. We have massive fears about the changes contained in the recent health reform legislation, as it affects Wales. I believe that they are going to cost a fortune and will be unworkable. Mergers will be almost inevitable as local health boards find that they have to join up with others to make a go of the new provisions. The changes mentioned in the Health (Wales) Bill could lead to progress, so long as we can ensure that these bodies have some independence from the Assembly and are given teeth.
  We want to see a better health service. The people of Wales were promised that, and they do not deserve what they currently have. Jane Hutt, the Health Minister in the Welsh Assembly, is drinking at the last chance saloon, and—even with the prospect of licensing reform and the possibility of 24-hour drinking—the bell for last orders should be ringing long and loud in her ears.
  6.19 pm
  Mr. Martyn Jones: I would be grateful if I could take some time to discuss the background of the Bill, before considering the principle that we are discussing on Second Reading. I would like to do so because it was the Welsh Affairs Committee, of which I am proud to be Chair, that was charged with the responsibility of providing the main pre-legislative scrutiny on behalf of the House. Likewise, the mirrored responsibility from the perspective of the devolved National Assembly for Wales fell to the Health and Social Services Committee of the Assembly in Cardiff.
  There was, of course, an input to the draft Bill process from the Welsh Grand Committee, under the excellent stewardship of my hon. Friend the Member for Bridgend (Mr. Griffiths), and that provided a useful Third Reading-style stage of the pre-legislative process, throughout which, I believe, only one voice expressed concern that the scrutiny by the Welsh Affairs Committee was somehow a bad precedent to set. The reason given was that not all members of the Committee represent Welsh constituencies. That is a fact, but it is hardly the fault of the House that the Welsh people do not elect a single Welsh Conservative Member. In any case, that is no excuse for precluding the Welsh Affairs Committee from repeating its scrutiny role and the process would be fundamentally flawed if the official Opposition were effectively excluded.
  Mr. Jon Owen Jones: Although I was not named, I must speak in my defence. I believe that we have set a bad precedent, because in the event of another Government—possibly a Tory Government—being elected, the Select Committee could have a majority of members from outside Wales. We have set a poor precedent, because it will be used against us when we have another Government. I do not believe that the Labour party will be in power constantly.
  Mr. Martyn Jones: I am shocked by that suggestion, but I must point out to my hon. Friend that, in any case,

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  the Standing Orders of the House say that every Committee of the House will have a Government majority. Whatever Committee considered such a matter, it would, dare I say it, have a Tory majority were the Tories to be elected.
  Mr. Jon Owen Jones: I am thankful to be allowed a second go. To correct my hon. Friend, Standing Order No. 86, which we must set aside at the end of the debate, allows Bills exclusively about Wales to be debated by a Committee whose members are all Welsh Members. That is in the existing Standing Orders.
  Mr. Martyn Jones: A Government who are not a Labour Government could change that Standing Order overnight, as my hon. Friend is well aware. Yes, that Standing Order exists, but if a new Select Committee were set up to discuss Welsh business it would have a majority from another party should such circumstances arise. I am sorry, but that has to be the case, as no Government will ever set up a Committee with a majority of Opposition Members.
  By the way, my hon. Friend may not be aware that another Member made such a suggestion in the debate, so the cap that he takes up may not fit him. He may recall that a Member on the other side of the House said something along similar lines about the Welsh Grand Committee. That said, if the cap fits Members on either side of the House, whoever wants to can wear it. I sincerely believe that the Select Committee represents the best process under the rules of the House.
  My hon. Friend may or may not agree with what I shall say next: a better change may be to alter the Standing Orders to allow joint working with Assembly Committees.
  Mr. Roger Williams: I compliment the hon. Gentleman on his work with the Welsh Affairs Committee. Does he agree that one benefit arising from the process is the enhanced legislative understanding and trust that developed between the Assembly and Westminster?
  Mr. Martyn Jones: Absolutely. I am sure that the hon. Gentleman, who is a valuable member of my Committee, endorses the process, which I have adopted since becoming Chairman of the Committee and since the Assembly was established, of keeping Assembly Members on board at all stages and at no stage, I hope, treading on their legislative toes. That is a self-denying ordinance, but one on which there is general consensus in our Committee.
  The Select Committee greatly welcomed the opportunity to take the lead on the draft Bill, which, from a public consultation perspective, was a huge success. In total, 307 organisations and individuals were consulted and, as the Wales Office website rightly boasts:
  "This is the first piece of Wales-specific legislation to be subject to public consultation in draft form and pre-legislative scrutiny by Parliament and the National Assembly."
  I can assure the House that the process was extremely successful, and I am therefore delighted that the Queen's Speech contains the pledge that the Government intend
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  to publish even more draft Bills to give Parliament and the wider public a greater opportunity to scrutinise proposals before the more formal legislative process takes place in the House.
  I thank the previous Secretary of State and the Under-Secretary for their work and, indeed, the spirit with which they entered into the draft Bill process. I also place on record my sincere appreciation of Jane Hutt, the Minister for Health and Social Services in the Welsh Assembly Government in Cardiff, who provided leadership in making the draft Bill process the success for Wales that it has proved to be. However, I add one general suggestion, which I hope is helpful, on the legislative process in relation to the Bill and, indeed, future draft Bills: why does not the House consider holding truncated debates on Second Reading? Members will probably fill the time allotted tonight, in good old Parkinson tradition. However, given that we have had one crack of the whip, perhaps we should cut down debates on Second and Third Reading.
  The Government have accepted most of the technical amendments proposed by the Select Committee and the Welsh Assembly during deliberations on the draft Bill, so we should be discussing only parts of the Bill on which amendments were not accepted. In the light of the Government's promise in the Queen's Speech to present further Bills in draft before the formal legislative process begins, I urge them to re-examine the necessity for full Second Reading debates so as to save valuable time in the House. Briefer consideration in Committee will come naturally, but perhaps debates on Third Reading could also be shorter.
  When the draft Bill was published in May, it was a good day not just for health in Wales, but for Wales's democracy and parliamentary accountability. I am proud of the Government's commitment in creating that groundbreaking precedent. The real benefits of presenting the Bill in draft have come to fruition, as it offers legislation for Wales that was consulted on and debated in Wales before the House began its deliberations on the details. This is truly "home-grown" legislation. Importantly, the Bill is also testimony to the fact that devolution in Wales and the relationship between this place and the National Assembly in Cardiff have come of age. The Bill proves, conclusively in my mind, that London and Cardiff can and will work together for the benefit of the people of Wales.
  The Bill will deliver huge benefits for patients in Wales by giving them a much stronger voice, not only in improving the NHS in Wales, but in running the health service. Patients will be empowered, and I am proud that it took this reforming and imaginative Government to find the way to enable patient power to come into being. They are to be congratulated on that.
  The Bill is an important step in the revitalisation of the NHS and it cannot be viewed in isolation from the massive increase in investment that has been injected into the NHS in Wales over recent years. I believe that, today, an extra £1 million has been allocated for the ambulance service in Wales. I hope that the Under-Secretary mentions that in his winding-up speech, as it needs to be put to the public.
  When the Government talk of reform, they mean reform, and the Bill is an intrinsic part of that strategy in Wales. It is designed to ensure that the patient's voice

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  is central in the creation of improved services right across the board, and in accepting pre-legislative responsibility the Committee recognised and, I hope, built on that important factor.
  Underpinning that empowerment of the patient is the progressive transformation of community health councils across Wales. That crucial strand of reform is to be enhanced by their taking on the new role of being responsible for nursing homes and primary care. CHCs across Wales perform excellent and dedicated work, not just in terms of their quasi-inspectorate role, but through advocacy. The Welsh Affairs Committee wanted CHC members to have a statutory right to take time off work to attend CHC meetings and formal visits. I would like the Government to return to the matter and amend the Employment Rights Act 1996 to include CHCs in the list of approved public bodies.
  Another recommendation that the Government did not accept in their response relates to a review in respect of Welsh CHCs not being constrained by the borders of Wales when acting on behalf of Welsh patients who are receiving treatment outside Wales. Wales is in a unique position, particularly the more rural parts of mid and north Wales, where many patients have to travel to Shrewsbury, Oswestry, Telford and even Manchester for treatment. I would have liked to see this uniqueness addressed. Again, I would ask the Government to reconsider this matter in Committee.
  The Bill also advances the setting up of a brand new and encompassing health professions body for Wales, which would in future include health specialities such as physiotherapy and speech therapy. Health Professions Wales—HPW—will also replace the functions previously carried out by the Welsh National Board for Nursing Midwifery and Health Visiting, which is to be abolished in the near future.
  In evidence sessions, the Select Committee quickly formed the view that the proposal to set up Health Professions Wales has been broadly welcomed. However, the Committee expressed concern about the independence of HPW in relation to staff and funding issues. We are pleased that the Government clarified the extent of the powers in their response to the Committee and in the Bill.
  The Bill offers to Wales a bold change of emphasis from just treating disease to looking at the "big picture" of setting out to improve the general health of people in Wales. I believe that that will be greatly helped by the establishment of the Wales Centre for Health, which will offer support training and share advances in cutting-edge medical research throughout Wales. On the independence of the WCH, I am pleased that the Government accepted the Select Committee's recommendation that the Assembly's powers of direction over the WCH should be limited to
  "the exercise of its administrative or financial functions"
  and that the Bill is specific on that matter.
  In the evidence sessions, the Select Committee highlighted, but did not submit as a specific recommendation, the evidence of some witnesses who wanted the WHC's remit widened to enable it to be more proactive in offering advice and information to the public. Again, we are pleased that the Government recognised the matter and elaborated in the Bill on the WCH's role in relation to that function. The
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  Government also responded positively to the National Audit Office query about the role of the Auditor General for Wales to carry out value-for-money investigations into the WHC's work. That is now included within the Bill.
  The Bill, which was brought to the House via the route of pre-legislative scrutiny, has been a resounding success. Not only has that process marked a progressive and organic approach to drafting legislation but, more importantly, as the Bill demonstrates, it has delivered good legislation. In this case, that is good news not just for the NHS in Wales, but for the standing and reputation of this House.
  6.32 pm
  Lembit Öpik: The Secretary of State correctly said that many hon. Members would welcome this Second Reading debate. It is always pleasing to see people from all over the world celebrating our deliberations on what I like to think is, by and large, a Bill arrived at by consensus. As the hon. Member for Clwyd, South (Mr. Jones) said, it is a credit to the pre-legislative scrutiny that so many people have been involved—Members of this House, Members of the Assembly and health professionals. In the past, we have not always realised the importance of working closely with the Assembly. Let us hope that this useful precedent will lead us towards more effective representation of the people of Wales in the future.
  The Secretary of State also said that the Bill is about patient power. Actually, I think that it is about patient health. We must make sure that we do not become obsessed with process. All four parties present want to ensure that we maximise the effectiveness and value for money that the public get from the system. In that sense, the consultation process has, one hopes, been all to the good, because it has made stakeholders out of individuals who are on the front line trying to deliver the service.
  I was, as ever, entertained by, and delighted to listen to, the hon. Member for Ribble Valley (Mr. Evans). Most Welsh Liberal Democrats were grateful that he did not put all the blame on us for the problems of the health service. He is a very nice man—most Liberal Democrats think that, with the possible exception of Michael Carr. The hon. Gentleman got some considerable heat for the 18 years of underfunding which many believe were instrumental in causing the problems in the run-up to 1997. I noticed the relief on his face when Madam Deputy Speaker intervened to protect him, giving him a lucky escape, lest people were reminded of the 70 closed hospitals and the 8,000 lost beds. I agree that the hon. Gentleman's swingeing attack on the Government had about as much relevance to this debate as improving standards in the Estonian health service. In fact, those improvements are impressive and I would recommend that hon. Members go to Estonia to see how it is dealing with its outstanding health problems.
  Mr. Wiggin: Is the hon. Gentleman proud of the current state of the NHS in Wales?
  Lembit Öpik: I can honestly say that I am. I think that the health service does a damn good job. I shall return to that matter in a moment. We must all celebrate the

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  fact that the United Kingdom is extremely fortunate that, despite all the issues, we still enjoy some of the highest health standards enjoyed by any society at any time in the history of the planet.
  Huw Irranca-Davies: I would join the hon. Gentleman in celebrating the standards in the national health service. When my mother was taken into Morriston hospital in an emergency last weekend, the quality of care that she received was first class. She spent two days there and now, thank goodness, she is back home. That was not the first time that she had been taken into hospital; it was the third occasion. Each time, she has been dealt with admirably, so let us not slate health service in the way that it is so often slated.
  Mr. Deputy Speaker (Sir Michael Lord): Order. Before the hon. Member for Montgomeryshire (Lembit Öpik) responds to that, may I say that this is not a general debate about the health service in England or Wales, and I should be grateful if hon. Members would confine their remarks specifically to the Bill before the House.
  Lembit Öpik: I certainly will, Mr. Deputy Speaker, and I apologise for bringing Estonia into the debate as well.
  As I listened to the hon. Member for Ribble Valley discussing the Bill, I became increasingly nervous because I simply did not know whether the Conservatives were supporting the Bill tonight. At one point, I almost intervened on a point of order to ask whether it was in order for the hon. Gentleman to expose us to such stress. In waiting for the answer, we may have developed some stress-related disorders.
  The hon. Gentleman explained on behalf of the Conservatives where the money should come from to improve the health service. In answer to my question to him, we received only one figure: he would save £14,000 by abandoning the logo project. That would pay for almost a year's worth of nursing—[Interruption.]
  Mr. Evans: Will the hon. Gentleman give way?
  Lembit Öpik: I believe that my point is almost in order, Mr. Deputy Speaker, so on that basis I shall give way.
  Mr. Evans: I said that £14,000 was being wasted on the logo. I could have gone on to give a whole list of ways in which the Welsh Assembly is mis-spending the money, including the new Assembly building, but I did not mention that in case Madam Deputy Speaker ruled me out of order.
  Mr. Deputy Speaker: Order. I fear that hon. Members are starting to stray again and I must insist that they do not.
  Lembit Öpik: The point just made by the hon. Member for Ribble Valley brings me right back to the research paper published on 20 November to explain various aspects of the Bill. It says on page 16:
  "The draft Regulatory Impact Assessment, published by the Wales Office to accompany the draft NHS (Wales) Bill, estimated that CHCs' enhanced visiting rights would cost around £100
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  million a year across Wales, while the enhanced advocacy role would cost £480 million per year. The cost of putting the AWCHC on a statutory footing and increasing its responsibility and powers was estimated at £10 million per year in additional rates and rents and £70 million a year in additional staffing."
  The estimate for the cost of all the measures in the Bill therefore comes to a substantial £660 million a year.
  We did some investigation in the House, however, and it transpired that it comes to £660,000 a year, so in one fell swoop the Welsh Liberal Democrats have saved Wales £659,340,000 already, while the Conservatives could come up with only £14,000.
  Mr. Wayne David: Does the hon. Gentleman therefore welcome the fact that the National Assembly Government have already publicly announced an extra allocation of £550,000 for the enhanced role of CHCs in Wales?
  Lembit Öpik: Indeed, that shows that we are quite close to the estimate within the research document.
  The Bill has attracted an encouraging degree of consensus in the Chamber, because much of it has been fashioned on a cross-party basis. Crucially, it has been fashioned with outcomes in mind. The proof of the pudding will be in how it is implemented but in my judgment this is an evolutionary step. Those who were in favour of devolution wanted the Assembly to have greater autonomy in defining how the many different elements of health were provided in Wales.
  One of the Bill's crucial elements is the Wales Centre for Health. If it is handled correctly, it could provide a powerful strategic drive to the work and thinking of the Assembly in defining what the Secretary of State said he wanted: a health service specifically tailored to Wales. He mentioned plans for thousands of extra nurses and hundreds of other staff in the health service in Wales, which is to be welcomed. It is a credit to the Welsh Liberal Democrat-led coalition with Labour in the Cardiff Assembly that so much has been achieved.
  Mr. Jon Owen Jones: Will the hon. Gentleman give way?
  Lembit Öpik: I knew I would not get away with that.
  Mr. Jones: If the Liberal Democrats claim so much credit for leading the Welsh Assembly on so much, why is it that the Welsh Assembly intends to renege on a commitment to rebuild Cardiff royal infirmary in my constituency and that of the former deputy leader of the Welsh Assembly, Jenny Randerson? Although Ms Randerson, the Member for Cardiff, Central in the Assembly, has condemned that decision, she apparently is powerless to do anything about it. The Liberal Democrats cannot have it both ways.
  Lembit Öpik: I shall save you the bother, Mr. Deputy Speaker, of ruling me out of order for attempting to reply to that intervention. I will be happy to discuss that matter with the hon. Gentleman later. I assure him that, as the Secretary of State said—I think that it was a sincerely held point, made in the spirit of the debate—there are still lots of problems in the health service in Wales.

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  To be a little more serious about the coalition, what is interesting is that the Welsh Liberal Democrat-Labour coalition is working hard to achieve the consensus out of which this Bill has been born. What is even more interesting is that there has been constructive input on the Bill from four parties. As I have said—I will not dwell on it particularly—the kind of new politics that we promised a few years ago when we were campaigning for a Welsh Assembly has probably led to a Bill of this sort coming before us now. I am greatly encouraged by that.
  There is one risk associated with the Wales Centre for Health. If, in working and offering guidance to the Welsh Assembly, it becomes the strategic driving force that I believe it can be, it is likely that there will be increasing divergence between what happens in Westminster for the English health service and what happens in Wales. That would be a healthy development for Wales but I imagine that it could cause strains between what we discuss here for England and what is discussed in the Assembly for Wales. I hope that the potential resistance of the Government in Westminster, who could be uncomfortable about the guidance given by the centre, will not come about.
  For that part of the Bill to work, there must be some tolerance in terms of the divergence, which could put a strain on other health-related debates here. There must be an acceptance that we are trying to find, to use the sort of language that the Secretary of State used before he left the Chamber, Welsh solutions to Welsh health issues.
  If the Wales Centre for Health does its job well enough, current best practice could be imported from Wales to England. Again, it requires a new kind of politics, enabling Ministers to take the opportunity, without loss of face, to look at the devolved institutions and to say that the Westminster Government can learn something useful from what has happened elsewhere.
  The issue of foundation hospitals and whether they should have been included in the Bill is a good example of divergence. I am not convinced by some of the statements by the Government for England with regard to health provision. I agree with what the hon. Member for Ribble Valley said about divergence.
  The Government's language on the health service now seems to include creeping terminology about failing institutions. That sort of psychology has done a lot of damage in the education sector. The Bill may help to protect us from the same danger creeping into Wales.
  Certain specific points relate to cardiac and orthopaedic services. While I am very happy with the service that I and my mother, who has had various health problems, have received, again, the strategic approach that the Wales Centre for Health and the community health councils could provide across Wales could deal with the issues that we are all concerned about. Waiting lists concern me—I think that they concern us all—but by working together we can perhaps get those down.
  I was heartened by the fact that the Conservatives have travelled around various parts of Europe to see best practice. It is ironic that they are so pro Europe in that respect but not quite so keen on other aspects of harmonisation.
  On the question whether the Bill can save money, we need to be honest. It is very difficult to save money in the health service because, ultimately, when people feel
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  better, they live longer. The quality of life improves but the health bill does not reduce. The NHS was originally set up in the belief that it would save money for the Government by reducing illness. It has improved life expectancy and the quality of life of individuals but that has come with a large price tag, not least because technology costs a lot more. Often, technology costs increase at a higher rate than the underlying inflation rate in the health service. This is not the place to discuss that but we should not pretend to anyone that by supporting and passing the Bill anyone will save a significant amount of money in the health service.
  The hon. Member for Cardiff, Central (Mr. Jones) said, with insight, that he did not believe Labour would always be in power. How right he is. He knows that the Liberal Democrat Government are just round the corner and already operating effectively in Wales.
  Mr. Peter Luff (Mid-Worcestershire): Round the bend.
  Lembit Öpik: That was quite good.
  Since we intend to govern responsibly, we need to pave the way now so that we do not have to pick up problems.
  On other key points, we need to understand exactly the role of the community health councils. That is fairly clearly laid out in the document but there is a side issue about boundaries and co-terminosity. Kirsty Williams, the Welsh Liberal Democrat Assembly Member, who has done a lot of work to help to construct a modern health service in Wales, has pointed out that, although we should respect natural boundaries for local authorities, there may be occasions when having more than one community health council will be effective in the Wales environment. Being parochial for a moment, Powys, for example, has two community health councils; one would be unmanageably big and it probably would not be reasonable to expect one individual community health council to do the work.
  Many of the figures cited have come from independent advocacy services. A rough figure of £500,000 has been mentioned, but we must be careful to recognise that the costs are estimates and while those estimates sound okay, it would be a great shame if the intention of the Bill were thwarted by the fact that the community health councils did not have the necessary resources. Even £1 million is not a huge proportion of the Welsh health budget. We back the principles in the Bill, based on an acceptance of flexibility. We should work reasonably with the Assembly, ensuring that it does not end up in an impossible position by trying to fund something from its existing budget that is unfundable, given that it is primarily a Welsh Assembly responsibility.
  It may sound like a detail but it was suggested by the Select Committee on Welsh Affairs that prisons be transferred into the ambit of the Bill. Hon. Members will correct me if I am wrong, but I do not believe that that has been done. I think that it is unfinished business. It would be strategically more sensible to do that now, rather than to return to it in future.
  The next steps are fairly clear. We will need a constructive Committee stage but, as has been noted, it is likely that our proceedings will be relatively uncontroversial, as many big issues have been resolved. However, various amendments will have to be tabled.

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  The Welsh Liberal Democrats in particular will want to deal with matters that might fall outside the Bill. We have talked about free, long-term personal care for many reasons. Lloyd George said that the measure of a civilised society is how it treats its elderly. My hon. Friend the Member for Sutton and Cheam (Mr. Burstow) has worked in that sector, and has suggested that tomorrow's debate on community care might be a better opportunity to discuss legislation to achieve that goal. However, I raise the point now as these matters are interrelated.
  Much research suggests that the introduction of free dental and eye tests—
  Mr. Deputy Speaker: Order. Perhaps the hon. Gentleman can return to the Bill.
  Lembit Öpik: I apologise, Mr. Deputy Speaker, if I was deviating. I recognise that, to include provision such as free dental and eye tests, the long title of the Bill would have to be changed. That is unlikely to happen in Standing Committee, but it is ironic that the matters to which I have referred could come back to the Floor of the House for discussion, given the advice that I imagine that the Wales Centre for Health will come up with once it is established.
  The constructive debate tonight has been encouraging, and I think that the Standing Committee deliberations will be constructive too. I hope to hear the useful and ever friendly criticisms from Tory Members.
  Mr. Evans: Earlier, the hon. Gentleman mentioned orthopaedics, for which waiting lists are way above the 72-week target. Does the hon. Gentleman consider that a useful role for CHCs could be the production of annual reports detailing the views of patients in each area? That would highlight where the real problems are, and thus enable a focus on solutions to reduce waiting lists.
  Lembit Öpik: That sounds like the sensible sort of role envisaged in the Bill. I am concerned about tying CHCs into too much repeating bureaucracy, as I believe that they will operate best on an ongoing and proactive basis. They should identify and deal with local issues, without having to go through an eternal cycle of preparing reports. However, that is an important matter for consideration in Committee.
  Another such matter is whether CHCs should be authorised to go into private health providers, even when there are no NHS patients in them. There is no point in rehearsing the various principles at stake, but I hope that we can discuss the possibility. More encouraging is the way in which the CHCs will have pretty wide powers to investigate the general quality of provision. If we work on the basis of success rather than failure, the CHCs could be critical friends for the institutions that they inspect.
  I hope that a reasoned debate in Committee will help build relations between Westminster and Cardiff. After a slow start, that relationship is fast improving. It could also help create a healthier health service. If that leads to a healthier Wales, it would be a credit to the Bill and all those involved in it.
  6.54 pm
  Huw Irranca-Davies: I am pleased to contribute to this debate, as I was when the Bill was discussed in the Welsh Grand Committee in the summer. I have read the extensive work done by the Select Committee on Welsh Affairs on the Bill, and I pay tribute to that.
  The Bill is a modest but important step towards increasing joint scrutiny of draft legislation by the National Assembly for Wales and this House. Such parallel scrutiny sets a good precedent, and I am glad that the Government are committed to ensuring that more Bills are handled in that way.
  The diversity to which devolution has led is relevant to the Bill. For those who, like me, are powerful supporters of devolution, it is a recognition that different solutions may apply in England and Wales, and that there may be learning experiences to be derived from both. That is to be celebrated, not scorned. We are aiming to secure good health care provision for all communities on either side of the border. If a different approach is adopted in Wales, so be it: results are what matter.
  The Bill will establish the Wales Centre for Health, which will gather and disseminate information on health provision in Wales. That is a vital and long overdue function. The Assembly has made great strides in that direction already, especially in recognising the problems of prevention as well as repair when it comes to health. A great tragedy of many Welsh communities—especially where there are high indices of multiple deprivation—is that chronic and long-term health problems are exacerbated by poor housing, low aspirations and so on. That is something to which the Wales Centre for Health can turn its attention and for which it can work proactively to find solutions.
  I also welcome the proposed centre's ability to undertake and commission research. It is right that, under the devolution settlement, that research should be passed down to the Wales Centre for Health. The centre will look at where research is needed, seek solutions and put forward proposals, instead of everything being steered by Westminster. That shows a level of trust in the Assembly and the process of joint scrutiny. The centre will also provide Welsh solutions in matters such as the development and provision of training in the health sector, and that is to be greatly welcomed.
  The Welsh Centre for Health will face great challenges. In many of our communities, health problems are huge, long-term and entrenched. In Bro Morgannwyg, for example, heart disease affects more than 20 per cent. of the community. The figures for respiratory diseases, asthma and arthritis are 25 per cent., 12 per cent. and 26 per cent., respectively. Mental illness, the constant Cinderella of health care, affects 13.7 per cent. of the people in my area.
  The Welsh focus that a Welsh Centre for Health will provide can really tackle such problems, by developing research and making good proposals that tackle local needs.
  Mr. Evans: The hon. Gentleman has mentioned a number of problems, but was he alarmed to read today that people with Alzheimer's disease in certain parts of

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  Wales are not getting access to drugs that may help them and which are more readily available elsewhere in the UK?
  Huw lrranca-Davies: The hon. Gentleman makes a good point. That is exactly the sort of problem that the Welsh Centre for Health can tackle. However, we must be realistic. As has been noted already, once a problem has been identified, the necessary resources must be made available to ensure that it is rectified. We are committed to putting in the necessary resources. I share the hon. Gentleman's anxiety about the problem that he identified. It needs to be tackled, but that can happen only when effective resources are made available.
  There are major lifestyle problems in Wales. It would be a failure not to accept that. In Bro Morgannwyg, 32 per cent. of the population are heavy smokers, and 21.3 per cent. consume more than the recommended levels of alcohol. Only a quarter of the population undertake regular exercise, and 53.8 per cent. of people are overweight or obese. Those are staggering figures. This Bill, which has been worked out jointly, gives us a chance to identify and tackle the problems involved.
  Hywel Williams: Would the hon. Gentleman have welcomed a provision banning smoking in public places?
  Huw Irranca-Davies: I certainly think the issue should be tackled. I was going to mention a report that came out recently, of which the hon. Gentleman may know. It examines the regularity of drug use by youngsters, comparing that with the way in which alcohol has already entrenched itself in our societies.
  My hon. Friend the Member for Vale of Clwyd (Chris Ruane) mentioned research on a ward-by-ward basis. The WCH should consider that. I am thinking of the way in which the "communities first" analysis was carried out, and the way in which we have looked at communities in terms of multiple deprivation. We should consider wards as well as the bigger county, borough and health authority areas. We need to pinpoint the evidence that will enable us to tackle some of the problems.
  Julie Morgan: Is my hon. Friend aware of the Townsend report, produced by the Welsh Assembly? It gives details of inequalities in health authority areas.
  Huw Irranca-Davies: I know of the report, and I think that we should adopt the same approach. It is no good simply looking at one area. My constituency contains areas of relative prosperity and good health, but the picture is different when it is broken down into not just individual towns and villages, but parts of those towns and villages. The contrasts are stark. I hope the WCH will extend the Townsend approach.
  Brynawel house, an institution funded by charitable donations, is the only residential completely "dry" house in Wales that will tackle drug and alcohol abuse. It is the only institution with a policy forbidding any consumption of alcohol or drugs, and it is in my constituency. I suspect that the WCH will also increasingly consider that approach. How can Welsh solutions deal with such problems?
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  I have mentioned lifestyle problems. We should adopt a more innovative attitude to issues such as GP referrals and exercise on prescription. Not everyone wants to trot along to the leisure centre rather than being prescribed a bottle of pills, but exercise is not only good for physical health; time and again, it has been shown to have an impact on mental health. I have quoted some worrying figures in that context. We should end reliance on drugs, and turn to prescriptions that tackle lifestyle issues.
  We need to get the balance right between repair and prevention. The Assembly is already starting to lead the way in devoting resources and talents to the prevention of illness rather than NHS repair costs.
  Health Professions Wales should be broadly welcomed. I expect it to have an impact on standards of nursing, midwifery and radiography. I should declare an interest: my wife works as a radiographer. I see colleagues representing mid-Wales constituencies on the Opposition Benches. They will have their own constituency problems relating to midwifery provision in remote rural communities that are some distance from district general hospitals. Unique circumstances require different solutions.
  I want to ask some questions. I am concerned about overall standards, particularly in regard to recruitment from overseas. I was pleased with what I took to be an Opposition welcome for the current recruitment, and a wish for the problems to be eased along with maintaining the appropriate standards. HPW could have a major input. I recently went to Madrid with a number of colleagues, and observed some very good schemes enabling British hospitals to recruit well-trained Spanish nurses directly. The problem is ensuring that they meet our standards and deal with our problems as quickly as possible. One of our problems, of course, is the number of vacancies that we cannot fill. As an Opposition Member pointed out in the Welsh Grand Committee, that reflects the investment that we are making; but we must fill those vacancies.
  Mr. Evans: I welcomed the fact that the vacancies were being filled, but was alarmed by the fact that there were still 750 in Wales.
  Perhaps HPW should also consider the problem of retaining nurses. When I discussed it with the Royal College of Nursing, I was disturbed to learn that so many people, after three years of training, ended up earning £15.000 a year as staff nurses when they could earn more as managers in McDonalds.
  Huw Irranca-Davies: I do not think that the long-term solution to the staff shortages that exist in many areas is recruitment from overseas, although it may be part of the solution. You are right: we need to develop in-house training, and the Spanish example I gave is relevant here. Those people were experiencing the reverse of our circumstances. They invested for a long time, and now have a glut of staff. Oh that we were in that position! Anyway, you are right. We must look at retention, training—
  Mr. Deputy Speaker: Order. May I remind the hon. Gentleman to use the correct parliamentary language?
  Huw Irranca-Davies: Thank you, Mr. Deputy Speaker. I am still learning on my feet, as it were.

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  The same approach by HPW might help us to deal with the shortages of NHS dentists, and, amazingly, with the shortages of GPs. In Pencoed in my constituency, which has a large population, it is impossible to recruit more than one GP per surgery rather than the four who are needed. That seems absurd, given that the area is part of the M4 corridor. HPW could play a pivotal role in pinpointing shortages and trying to deal with them.
  Let me say something about community health councils. I am glad that local patients and other local people are to be given a democratic voice. I do not agree that the proposals will lead to confusion; I strongly suspect that people will know exactly where to turn.
  My hon. Friend the Member for Clwyd, South (Mr. Jones) mentioned time off for public bodies. I hope that the Government will clarify that in their response to the Committee. They have already said
  "Further consideration will be given to approaching the relevant Secretary of State to make an order"
  which would extend the power, but I should like more clarification. We must not discourage people from becoming members of CHCs by failing to give them enough time off. I think that the Government have a will to make the system work.
  I acknowledge the extension of powers allowing CHCs to inspect local authority premises, primary care premises and, to a degree, nursing homes, but I want to know why that does not apply to prisons and young offenders' units. As I said in the Committee, that would not replace lay visits, but it would constitute a welcome extension of medical expertise and of patients' rights.
  I want to say a little about cross-border co-operation—crossing Offa's dyke, if you will. The Government have said that no review is necessary and have given their opinion, but are they adamant that their proposals will work? I am not in the same position as the hon. Member for Montgomeryshire (Lembit Öpik) and his neighbour in Powys, the hon. Member for Vale of Clwyd, but constituents of mine certainly travel not to Bristol but all the way to Hammersmith for cardiac surgery. So it is a matter of concern, and I seek the Government's reassurance that what they said in response to the Committee's recommendations will work.
  Mr. Roger Williams: The hon. Gentleman raises the interesting point of people accessing district general hospitals outside their CHC area. We have experienced differential waiting lists, with people in Wales having to wait longer for treatment for the same condition than people in England. We believe that CHCs could play a vital part in resolving that problem.
  Huw Irranca-Davies: I welcome those comments. I am sure that the Minister is listening avidly and hope that he will give a suitable response that reassures the hon. Gentleman.
  I welcome the schedule 7A changes on CHCs which allow the National Assembly for Wales to determine the membership regulations. I do not agree that that will mean that the CHCs are hidebound by what the
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  Assembly tells them. The Assembly is setting the rules by which they work, but the CHCs have great independence within those: they will make their own representations and investigations; they will represent the views of their patients and committee, as opposed to saying what the Assembly tells them to say. There have to be some rules and regulations, but the CHCs still have a great deal of independence.
  In conclusion, I welcome the Bill, not only in terms of the beneficial impact that it will have for health provision in Wales but for the precedent that it sets for co-operative working between the Assembly, Westminster and other partners.
  7.11 pm
  Mr. Bill Wiggin: I begin by paying tribute to the Chairman of the Welsh Affairs Committee who has guided us through the proceedings on the Bill so far with great skill and diplomacy.
  I am sorry that the Government's response to the Committee's proposals have been less positive about the CHCs than other issues. On time off, for example, the Government stated that it could be done by order—which is not in dispute—but that does not mean that it can be done only by order, as might happen under the Bill. The Government's reply on coterminosity seemed to address the case against exact coterminosity, which the Committee did not recommend. Instead, it recommended a statutory duty to have regard to the local health board and other boundaries that could readily be achieved.
  The Government's reply regarding other bodies states simply that the current proposals strike the right balance. The Committee did not suggest that they did not, but that the National Assembly for Wales should he empowered to extend CHC remits if it wished to in the future rather than have to return to Westminster to seek such powers.
  The Government agreed to the Committee's recommendations on clarity—what it called the
  "arcane language in sub-paragraphs (g) and (h)".
  However, that remains.
  The Committee wanted to ensure that the National Assembly would be free to allow CHCs to commission others to carry out the independent advocacy services. The Government's reply does not make it clear whether the Bill allows that, or whether they wish it to do so. The Government agreed to review the terms of the schedule to ensure that the Association of Welsh Community Health Councils provided a system for CHCs to report to the AWCHC, but not to limit the functions that the Assembly could give the AWCHC. Again, nothing seems to have changed.
  The Government accepted the principal point that the independence of the Wales Centre for Health should be more apparent on the face of the Bill, although no equivalent to the Food Standards Agency was suggested. The bald power of the Assembly to direct the WCH has been replaced in paragraphs 6 and 7 of schedule 2, which allows the National Assembly to give directions where it believes that there has been a serious failure by the WCH to perform any function that it considers should have been performed. That presumably applies to things that have not been done rather than those that have been done, but the distinction may be unclear.

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  Finally, the Government seem to have accepted the thrust of the Committee's concern that the ambit of Health Professions Wales should not be allowed to spread. However, clause 4(2) and (3) does not make it clear whether the functions to be confirmed by the Assembly order are to be restricted to health care staff. I will come to possible amendments at the appropriate stage. By and large, the Bill is benign, but one or two amendments on these subjects in line with the Committee's recommendations might be helpful.
  The Bill could have addressed the excessive bureaucracy involved in the reform of the NHS in Wales. I have heard it said that Wales will have the most bureaucratic health service in western Europe. In addition, an NHS Confederation survey found that 80 per cent. of NHS managers did not believe that the Government's reforms of the Welsh health system would work. Nick Bourne, the leader of the Conservative party in the Welsh Assembly, in his speech entitled "Making Life Better in Wales" said that we should be reducing the unnecessary layers of bureaucracy building up in our health service.
  To some extent, the Bill defeats the purpose of the national health service, which is supposed to be a nationwide public service. For example, Amicus, a manufacturing trade union, is of the firm belief that
  "professional standards should be centrally determined to ensure that the standard of healthcare provision is of the same quality across the whole of the UK."
  The Bill gives authoritarian and highly centralised powers to the National Assembly for Wales to abolish or alter the CHCs, to abolish or assume the functions of the Wales Centre for Health as well as to appoint its members and chairman, and to abolish Health Professions Wales. That is a great shame.
  In the Queen's Speech of June 2001, allusions were made to legislation that would decentralise power and direct resources to NHS staff. Such National Assembly authoritarianism centralises powers and allows for measures of uncertainty and unpredictability in the Welsh health system. In addition, questions have been raised about the degree of independence from the National Assembly enjoyed by the Wales Centre for Health and Health Professions Wales. The Royal College of Nursing questions HPW's independence from the Assembly. We believe that the National Assembly should restrict itself to setting strategic objectives for the NHS, which would be more helpful.
  The Bill further illustrates the authoritarian and centralised powers of the Assembly with regard to its powers over the CHCs. Proposed schedule 7A gives the Assembly powers to make regulations concerning CHCs' proceedings, staff, premises, expenses, the discharge of functions of a council by a committee and the appointment of persons who are not members of the council to such committees.
  Lembit Öpik: Does the hon. Gentleman accept that that is less centralised than having all those decisions made at Westminster in the sense that the Assembly is closer to the people being served by the health service in Wales, which is one of the Bill's intentions?
  Mr. Wiggin: The hon. Gentleman makes a useful point, but the Bill's wording does not achieve that.
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  I should like to welcome the retention of the CHCs and the close link between the public and health service, but some of the Bill's wording is more authoritarian than it need be.
  It is regrettable that the Bill does not make provision for the creation of foundation hospitals. Another opportunity missed is that there is no provision for the creation or construction of a much needed children's hospital in Wales. I am sure that right hon. and hon. Members on both sides of the House would like to see that.
  Julie Morgan: Is the hon. Gentleman aware that a children's hospital is going ahead in the University Hospital of Wales in my constituency and that the Assembly has given it considerable funding?
  Mr. Wiggin: I was not aware of that—[Interruption.] I think that I heard one hon. Member say "Obviously not" from a sedentary position. I am delighted to hear that progress is being made, however, and perhaps at a later date the hon. Lady might fill me in on why all the money has not been forthcoming.
  We would have liked the Bill to include more powers for CHCs to provide patient support services, perhaps by making patient support officers employees of the CHCs. Another of my concerns is the representation of Welsh patients receiving treatment in England, which the hon. Member for Ogmore (Huw Irranca-Davies) mentioned. In Hereford hospital, next to my constituency, at least 10 per cent., and sometimes as many as 15 per cent. of the patients are Welsh. As there are shortages of funding for Welsh patients seeking treatment in England, and as waiting lists are so long in Wales, it may be necessary for Welsh patients to keep crossing the border to be treated in England, so funding must be provided.
  The Bill contains no provision for the use of the private or independent sector in reforming the NHS in Wales, or for the use of the private finance initiative, for example. Private and independent sector involvement might be used—and might be needed—to address such problems as the funding of Welsh patients seeking care in England, reducing waiting lists, dealing with the care home crisis, the problem of delayed discharges and reducing GP shortages.
  Another major criticism of the Bill is that it fails to address the real crises and issues in the Welsh health service that affect ordinary patients. Assembly Member David Melding said on 18 July 2002 that
  "the draft Bill is substantially different to that anticipated in June 2001 and much reduced in scope."
  Among the problems that the Bill fails to address are waiting lists for both in-patients and out-patients, which increased dramatically between 31 March 1997 and 30 September 2002: in-patients by 7.1 per cent. and outpatients by 135.1 per cent. In that regard, the Government may have broken their manifesto pledge. Before the 1999 Welsh Assembly elections, they said that no one would wait more than 18 months for inpatient treatment. Given that 4,335 people have been on that waiting list for more than 18 months—1,810 people more than when the original pledge was made—it sounds as if they have broken that pledge.

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  Another promise that has been broken is that regarding out-patient waiting lists. The Labour party said that, by the end of its first term in the Assembly, no one would wait more than six months for out-patient treatment. However, more than 83,443 people are now waiting six months or more for out-patient treatment, compared with 25,676 in May 1999. Indeed, the South Wales Evening Post ran a story on unacceptable waiting lists for patients with regard to ear, nose and throat treatment. Adults needing nasal surgery will have to wait for between nine and 70 weeks—
  Mr. Deputy Speaker: Order. The hon. Gentleman is straying a little from the Bill. I know that he is talking about what is not in the Bill, but he should address his remarks specifically to the Bill.
  Mr. Wiggin: I apologise for straying.
  Mr. Desmond Swayne: It is very tempting.
  Mr. Wiggin: Indeed.
  Rather than focusing on reforming bureaucratic elements of the Welsh health service, the Bill will perhaps have less direct benefit to patients than I would have hoped. It is true that we are not overtly critical of the substance of the Bill, but it would have been better had some of the failures—on which I should have liked to continue—in relation to some of the promises made by the Government to patients in Wales been aired.
  Huw Irranca-Davies: Does the hon. Gentleman agree that one aspect of the Bill might not only look at the failures but at things that have worked, to promote best practice, in which CHCs would have a role? For instance, in Bro Morgannwg, the number of nursing and dental staff has increased and administration has been reduced.
  Mr. Wiggin: That sounds very positive, and I agree with the hon. Gentleman. By and large, we all want the same thing from the Bill—better care for patients. We have to identify the best way of going forward. Some of the proposals are exceptionally positive. Having sat through the Select Committee's review of what the Bill was going to contain, the hon. Gentleman will know that I have been very supportive. It would have been better, however, had one or two of the items on which I touched in my speech been included. A Conservative Assembly Member argued that for devolution to be meaningful, major reform in the public services for Wales should be achieved in Wales-only Bills. Much of the content of this Bill should therefore have been included in the National Health Service Reform and Health Care Professions Act 2002 applying to Wales. The extra part of the Bill should not have been necessary.
  The Bill's intention is to reform patient services in the Welsh health service, but it fails to address some of the most important issues to patients in Wales, such as GP shortages and massive waiting lists. By and large, however, the Bill is well-intentioned, and I am grateful that I was able to sit on the Welsh Affairs Committee.
  7.25 pm
  Mr. Jon Owen Jones: The Bill has already been described as benign, modest and consensual. I agree with all those adjectives, which is why I must disagree with the conclusions of the Select Committee Chairman, who has unfortunately just left his place. Early in his speech, he suggested that the Second Reading debate on this Bill, and on other Bills, could be curtailed. It is dangerous to generalise from the particular. It is probably true that this Bill could be speeded through the House, as could any consensual Bill, but it does not follow that simply because this Bill is one with which we largely agree, any Bill introduced through this procedure would command similar levels of agreement. I would therefore caution against the Government taking the Select Committee Chairman's word that the House agrees with rushing through all such Wales Bills.
  The philosophy that appears to be emerging in the provision of health care in Wales, as compared with the provision of health care in England, seems something of a diversion in terms of how patient empowerment is to take place. I am sure that all Members will say that they want patients to be given more power over their health care needs. It does not follow, however, that that goal can be achieved in only one way.
  This Bill and other proposals made in the Welsh Assembly attempt to empower patients by creating committees—in this case, community health councils—that are as representative as possible to give patients greater power. I interpret what is happening in England as an attempt to give patients more power to choose their health care by giving hospitals greater independence, and by giving patients greater opportunity to choose where they seek their health care. There are arguments to be made in favour of both systems—I put it no more strongly than that, as I am being loyal—but we must try to make sure that both systems work as well as possible.
  I am in favour of community health councils being made as independent as possible in Wales, because their role in Wales will be extremely important in ensuring that patients are given health care that is adequate to their needs and what they desire, and because it should be seen to be independent of the role of Government. I therefore approve of the measures in the Bill, and I might wish to strengthen them to give independence to the community health councils.
  I would like the CHCs to be given possibly greater powers than those provided in the Bill. We need to do more than simply look forward to the role that they should have in relation to what used to be available. Tomorrow, the House will debate a Bill for England and Wales that deals with delayed discharges and the problem of bed blocking. CHCs exist in Wales, but not in England, and they could be given an important role in determining what constitutes bed blocking and whether beds have unnecessarily been taken up by people who should be discharged from acute hospitals. They could also determine at what point charges should be laid on local government to pay for the beds that are being occupied.
  That issue is extremely important in Wales, and more important there than it is in England. On any one day in England, 5,000 beds are taken up inappropriately because social care cannot, for one reason or another,

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  be provided. On any one day in Wales, 806 beds are taken up. I calculate that, per capita, the problem is at least two to three times worse in Wales than in it is England. That fact alone explains in large part why waiting lists figures in Wales are so much worse than they are in England.
  Lembit Öpik: Does the hon. Gentleman agree that CHCs will be able to make a positive impact on the difficulties that he has rightly described if, and only if, there is a degree of homogenisation and shared responsibility between local authority budgets and health budgets?
  Mr. Jones: In effect, the Bill dealing with delayed discharges will do that. When people are lying in bed in a hospital, their care is being paid for from the health service budget. When they are lying in bed in a nursing home or a community home, their care is being paid for by the local authority budget. There is a vested interest—I put it no higher than that—for local authorities to be not too quick in moving someone out of a bed for which they do not pay and into one for which they pay. The delayed discharges Bill will allow the budget to be transferred if the bed is used for social service rather than acute health care reasons.
  Julie Morgan: Does my hon. Friend agree that the mechanisms for dealing with this problem have already been set up by the Welsh Assembly in the partnership arrangement that has been created between local authorities and health bodies, which looks to solving the problem jointly rather than to considering penalties on one or other of the bodies?
  Mr. Jones: I do not agree. I hope that that might happen, but we must accept that, if the partnership agreement had been effective, it would already hopefully have had some effect. I have already explained that the position in Wales is two to three times worse than in England—so it appears that, so far at least, partnership has not delivered. It may deliver in the future, but the legislation for England and Wales will enable provision to be made on both sides of the Severn.
  Julie Morgan: I agree with my hon. Friend that the Bill coming before the House tomorrow will enable the Welsh Assembly to take advantage of what exists. However, the Assembly and local authorities have not been working in partnership for long enough to enable us to judge whether we should penalise local authorities when beds are blocked. Enough time has not yet been spent on the partnership solution.
  Mr. Jones: Local authorities are not automatically penalised. They are penalised only if they do not deliver. If the partnership arrangement works, they will deliver and will not be penalised. Everyone will be happy, and waiting lists will fall considerably.
  Ian Lucas: Is not the great hope that local health boards will create a closer working relationship between local authorities and the health service and that that will address the problem that my hon. Friend has so eloquently described?
  Mr. Jones: I agree that we should all live in hope to some extent. The provisions will be there in case hope is
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  insufficient, but they are important. The CHCs will also have a valuable role, especially if my hon. Friend the Member for Cardiff, North (Julie Morgan), who may be well informed about the view of the Welsh Assembly, is correct. If Wales and England take a different view of delayed discharges and if delayed discharges are not penalised in Wales, the CHCs will have a particular role to play. I can imagine the interesting and difficult issues that will need to be sorted out if the Welsh Assembly chooses not to invoke the procedure. An English hospital, such as that in Shrewsbury, which treats many patients from mid-Wales, will be able to charge local authorities in Powys and Montgomeryshire, while a Welsh hospital such as the Royal Gwent will be unable to charge English local authorities such as Gloucestershire for delayed discharge. CHCs will have much explaining to do to their patients about why such a position has arisen.
  I welcome the role that the CHCs will play. I look to them to be as independent as possible and to take on new powers as they become available in the legislative programme before us for the rest of this Session. I hope that the CHCs will be able to ensure that there is the patient empowerment that we all want and that they will do such a good job that Welsh patients will not feel the need for choices that may be available in England but not in Wales.
  7.38 pm
  Hywel Williams: We are having an interesting and constructive debate. I commend the remarks of the hon. Member for Cardiff, Central (Mr. Jones) and his support for the CHCs. I also commend the remarks of the hon. Member for Ogmore (Huw Irranca-Davies) about the effect of mental ill health and the relative neglect that that subject has received.
  Referring to the Bill in his press release for the Queen's Speech, the Secretary of State said:
  "Patient power will be our watchword in the future."
  Patient power—or rather patient power, carer power and community power—has for many years been the watchword of the most progressive elements in the health service, but they have often been frustrated by the centralisation and hierarchical structure of the system and by the strongly hierarchical nature of medical power.
  There is a glaring and long-standing need to reduce health inequalities in Wales. As page 9 of the recent Welsh Assembly document "Well Being in Wales" notes:
  "Average life expectancy in some parts of Wales is five years less than in others".
  That is a startling geographical difference. The document goes on to state that there are marked differences between different social groups. We have known about those class differences for many years and they have often been neglected. Discussion about them has sometimes been thwarted, as notoriously happened under the tenure of the right hon. Member for Wokingham (Mr. Redwood) when he served in the Conservative Government.
  A cross-cutting approach is sorely needed in Wales. It needs to consider poverty, housing and other issues, such as smoking and the consumption of alcohol. I hope

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  that the Bill will help to expose those differences and to keep them in the minds of people who make and implement policy, irrespective of the long waiting lists and the lack of dental treatment that other hon. Members have mentioned.
  It has been said that the Bill is largely uncontroversial. Even the House of Commons Library research paper says that. Some hon. Members will recall King Vidor's 1938 film "The Citadel". I am sure the previous Secretary of State will. In that film, part of the answer to a public health problem was the selective use of high explosives. The Bill may be largely uncontroversial, but the proper implementation of patient, carer and community power is the metaphorical high explosive we need to attack the historical inequalities of health in our country and to provide Wales with the world-class health service that the Secretary of State says it is his ambition to achieve.
  Patient power has to be enabled. We will look for a practical demonstration of the growth of that following the implementation of the Bill and other measures. We welcome the provisions that will extend the roles of CHCs to the primary sector and nursing homes. That will provide a statutory basis for the patient advocacy service and will establish a Welsh body for CHCs. We welcome the intention to create the Wales Centre for Health, which will provide public health advice, research and training support, and Health Professions Wales, which will discharge the Assembly's functions on the education and training of health care professionals and health care support workers. We also welcome the education and training functions of the Nursing and Midwifery Council and the Health Professions Council in Wales. All that is to the good.
  We hoped that the Bill would contain other proposals, such as the banning of smoking in public places, which would have made a substantial contribution to the improvement of public health. I was glad to hear the hon. Member for Ogmore agree with that. We were also keen for the Bill to contain provisions on free personal care for older people, which would create a simpler and more coherent structure, to say the least.
  However, we welcome the Bill as a specific Welsh Bill, with its process of discussion and scrutiny in both Cardiff and the Welsh Affairs Committee. We look to the fulfilment of the Assembly's pledge to provide draft regulations by the Standing Committee stage. We trust that that entire process will demonstrate clearly that the representatives of the people of Wales are well able to handle the legislative affairs of our country.
  On the particular proposals for CHCs, we are very supportive of the retention and strengthening of CHCs in Wales. We are glad that that course has been taken for our country—as glad as some hon. Members from England are envious of us and unhappy about the course set for their CHCs. The CHCs will hopefully be independent of vested interests, which relates to a point made by the hon. Member for Cardiff, Central (Mr. Jones). That is essential. We trust that the independence will not be diluted by the proposed changes in the organisation of CHC membership.
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  I know from the case of my own CHC in North Gwynedd that the local authority representatives are wholly committed and valuable members. Perhaps they will join the CHC by other means. However, in rural and dispersed areas there is a limited number of such individuals. We cannot afford to ignore those public-spirited and committed people. The hon. Member for Clwyd, South (Mr. Jones) referred to the importance of taking time off work. I agree entirely.
  The extension of CHCs' role to the primary sector and to nursing homes is welcome. Clearly, CHC visits to NHS premises where care is being provided will be a valuable addition to the important professional inspection. We will look with interest at the draft regulations produced by the Welsh Assembly Government for the Report Stage on matters such as unannounced visits, but obviously those are to be welcomed as a development of patient and carer power. I do not share the concern expressed by the hon. Member for Ribble Valley (Mr. Evans) on the Assembly's power to draft the regulations and the powers given to it throughout the Bill. Irrespective of the value or virtue—or otherwise—of the Labour-Liberal pact in Cardiff, we are happy for those decisions to be taken in Wales.
  Hon. Members have mentioned the fact that some Welsh patients receive their care in England. The names Gobowen, Christie, Alder Hey and Clatterbridge are familiar to patients from north Wales and their carers, who are also familiar with the high standard of care provided by those institutions and the difficulties that arise from accessing care in them. Only the other day I was made aware of a case in which a referral of a child from a specialist unit at Alder Hey to a local hospital for occupational therapy was refused because the list was closed, not because it was long. CHCs should have information about care from establishments over the border so that they can perform their duties well.
  A particular concern is the availability in English establishments of people who can speak Welsh, especially in cases that involve children, people with chronic conditions or brain injury, and the terminally ill. We particularly welcome the proposed statutory basis for the role of CHCs as patient advocates. Some CHCs already have a discrete patient advocacy service, but others do not. The welcome extra funding announced the other day will be used in my area to employ a patient advocate for the first time. I hope that that will lead to a substantial improvement in the service provided.
  I particularly look to the work that I expect the CHCs to undertake as part of patient advocacy to push for the extension and development of services through the medium of Welsh—and, for that matter, through the medium of languages other than Welsh and English—in our locality and throughout Wales. The establishment of proper and good communication between the patient and the health care worker is essential, and that means that communication needs to take place in all the languages used widely in Wales.
  If patient power is to mean just that, there must be a sustained effort over an extended period to recruit people with the appropriate language skills. Being able to converse with patients in the language that they find most congenial is a core skill for some staff in some areas and for the majority of staff in others, especially if the patient is young or elderly or has suffered a stroke or

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  brain injury. I know that some hon. Members have family experiences of the health service's deficiencies in that respect, and I trust that they will support the CHCs in pressing for change, as I sincerely hope the CHCs will do.
  The establishment of a national body for CHCs has been welcomed by the CHC representatives whom I consulted before the debate. The relationship with individual CHCs in respect of the performance management function will have to be approached in a supportive manner, and I understand that that is the standpoint of the new body. I note from the research brief that the Welsh Affairs Committee called for greater clarity as to how the new body's powers would be strengthened, and that the Government agreed that the wording of the schedule would be reviewed, but no change has resulted. Clearly the House may turn to that topic on Report.
  On a lighter note, I understand that the body is to be known as the Association of Welsh Community Health Councils, or AWCHC, an acronym already used by an hon. Member on these Benches. The health world is blessed with many and varied acronyms, which exclude and sometimes confuse even those who are used to them, let alone the patients. I had a brief look at the back of the report by the Welsh Affairs Committee, and saw the WCCPH, or Welsh Combined Centres for Public Health, the WCH, or Wales Centre for Health, and the ATM, After Today Management. I always thought that ATM stood for automated transaction machine.
  May I suggest, therefore, that the Welsh title of the new body is to be preferred, in acronym form at least, in that it yields an acronym that combines accuracy with at least a suggestion of the function of the new body? Welsh-speaking Members will realise that Cymdeithas Cynghorau Iechyd Cymuned Cymru becomes CCICC, or CIC—an essential attribute for a patient advocate. I hope that the CHCs, and the national body, will have CIC.
  On the Wales Centre for Health, we welcome the establishment of a Welsh body to act as a multidisciplinary advice forum. Hopefully it will draw attention to the many causes of ill health and the many ways of tackling issues of health, poverty and housing. The body will also disseminate research, particularly Welsh data, the lack of which has, for many years, been a problem to many people working in health and social services. It will support training in sustainable health and liaise with UK and international professional groups. We have much to learn from professional groups over the border and in other European countries. Sometimes we look with too narrow a focus for comparators. In addition, as we develop Welsh models of health provision and for the prevention of ill health, we will have much to teach the world.
  We are glad that the centre's independence is assured and that it will take an active role. It will be a virtual as well as an actual centre. Some years ago, I had the experience of setting up a national centre for training and education in social work. I regret that we invested so much in bricks and mortar and much less in the networks of people throughout Wales that would have supported that centre in the future. Unfortunately, the money went into the building.
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  Equally, we welcome the establishment of Health Professions Wales, which is an ambitious move. The body will carry out the functions of the Health Professions Council in Wales relating to the continuing education and training and the clinical experience of nurses, midwives, health visitors and other health care professionals and support workers. Fears have been expressed about the loss to Wales of having new and different arrangements for the health professions, compared with England. I trust that those will be allayed by the operation of the new body.
  As I said, I come from a background of education and training of social workers. In 1985, the body responsible for that, the Central Council for Education and Training in Social Work, consisted in Wales of one person coming over from Bristol to work half a day a week, sitting by the phone waiting for a call. As Members can imagine, he had very little business. The CCETSW developed into a fully fledged body, and when it was wound up, it had its own policy documents and publication programme. It also had professional staff and a training agenda complementary to that in the UK. That agenda covered all aspects of training, including, importantly, Welsh-medium training. After 17 years we see the value of that sustained development for the CCETSW, because we have a Welsh body for social care that is a fully fledged, separate entity. That was a process—a long one—and not an event. I therefore value the role of Health Professions Wales in developing high-quality training, Welsh careers information and senior practitioner posts.
  On the retention of staff, we have to make sure that we recruit people who fully understand the profession, and we should be careful to promote work-based learning. I note from the research document provided by the Library that the acting chief executive of HPW sets out, as a function to be developed, advice on work-based learning. That is essential if we are to foster a climate in favour of training. People must be able to take up training while they are working. That will be important for the retention of staff.
  The use of Welsh practice as a model for developments throughout the UK is also important. I referred earlier to developing medium and practice in Welsh and other languages. We have a great deal to teach other parts of the UK and the world. We have an opportunity to experiment and to develop proper practice to give the user of the service the power to choose the language. We should be confident that we can do the research and development work and that we have something to boast about.
  I spoke earlier about the metaphorical high explosive that we need in order to attack the historical inequalities in health in our country and to provide Wales with the world-class health service that it needs. That will be hugely difficult and, no doubt, controversial. I also mentioned the widely held view that the Bill is uncontroversial. If it leads only to uncontroversial change, it will not have contributed sufficiently to the change that is needed if we are to achieve a healthier future for all the people of Wales.
  7.57 pm
  Julie Morgan: I am pleased to be given the opportunity to speak on this Second Reading. I am pleased that there is a Wales-only Bill in the

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  Queen's Speech, following the Children's Commissioner for Wales Bill in an earlier Queen's Speech. Taking into account the Welsh clauses in other Bills, we can see that the devolution settlement is working, as many hon. Members have said tonight.
  It is interesting that the Bill, along with the Welsh clauses introducing reform of the health authorities and the creation of local health boards in an earlier Bill for England and Wales, is helping to develop a distinctive way forward for the NHS in Wales. The first parts of both the Wales-only Bills, on the children's commissioner and on health, were initially included in legislation for England and Wales.
  The children's commissioner began in the Welsh clauses of the Care Standards Bill, and the reform of the health service began in the National Health Service Reform and Health Care Professionals Bill. In both cases, that allowed the proposals for Wales to start moving. The children's commissioner was able to begin work before the full powers were finally conferred on the post by the Wales-only Bill, and the health boards were included in earlier legislation so that they could be set up and staffed by April 2003. I understand that they are on course to achieve that.
  The Health (Wales) Bill has already had pre-legislative scrutiny by the Welsh Affairs Committee—the first time that that has happened—and by the Health and Social Services Committee of the National Assembly. I attended a sitting of the Health and Social Services Committee, which I found an interesting and unique experience. In that sitting, members of the Committee raised the issue of smoking, saying that a ban on smoking on public places must be part of the Bill. Everyone in the room—every member of the Committee and those who were there observing it—strongly agreed that we all wanted a ban on smoking in public places, but it was also agreed that that did not lie within the scope of the Bill. None the less, I want to register my hope that we will get a ban on smoking in public places and that it will be dealt with as a priority. The emphasis in health should be on prevention, and smoking causes such a huge bill for the health service and such misery in people's lives that we have a duty to do what we can about it. I accept that it is not within the scope of the Bill, but I am glad that we have marked up the fact that we must do something about smoking.
  The Bill is short and generally uncontroversial. There has been some controversy in England about the removal of the community health councils, and it is good that we in Wales have avoided that controversy by aiming to strengthen and build on the existing CHCs and increase their advocacy role. The performance of that role has varied throughout Wales. The CHC in Cardiff has played a strong advocacy role—many people who have come to my surgery to discuss problems in the health service have been helped to an enormous extent by the CHC. Cardiff CHC has had special funding to help it in its advocacy and complaints role in respect of individuals, but that does not extend throughout Wales. CHCs in other parts of Wales have not been so well funded for advocacy and complaints functions, so I am pleased that the Bill will ensure more uniform provision for CRCs and that they will be strengthened throughout Wales.
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  It is interesting that England decided not to keep, change and strengthen CHCs. There seems to be a divide between attitudes in England and in Wales to CHCs. In Wales, CHCs have been thinly staffed, but there has always been a good standard of advocacy and their existence has never been questioned. As other hon. Members have said, the difference in this respect between England and Wales shows how devolution produces different outcomes. It is easy to live with the fact of different outcomes—there is no tension about Wales taking one course and England taking another. That is what devolution is and what the Bill emphasises.
  CHCs, with patients and local representatives, will work with local health boards and local authorities to create a service in which the primary aim is prevention, and the emphasis is on health, not ill health. That is the message that has been coming from the Assembly in its development of health policy: we are talking not about ill health but about health and how to create a healthy society, and that change of focus is a positive aim. Many people, especially in later life, experience health problems because of their style of living in youth—smoking is a prime example. CHCs and the health boards will play a vital role in spreading information, for example, about healthy living and ways to avoid ill health in later life. The Assembly has already done a lot of work on health promotion. If those efforts are successful, Welsh society as a whole will be healthier, which will help the health service by lessening the drain on health service resources and on the community caused by people who become ill later in life as a result of their lifestyle choices. I do not criticise those choices, but that is what happens and we have to tackle the problem.
  It is important that CHCs reflect the society they serve. I was pleased to see in their response to the Welsh Affairs Committee's report on the draft Bill that the Government acknowledge the need to ensure that CHCs appoint members who
  "bring … a wide range of skills and experience, drawn from a variety of backgrounds."
  Until now, local authority representatives have made up half, and the voluntary sector one third, of the membership of CHCs, with the other members drawn from various sources. Now, it will be up to the Assembly to decide the composition of CHCs. I hope that a strong effort will be made to encourage people from a wide range of backgrounds to come forward, in particular people from less privileged backgrounds, so that we will have input from the whole spectrum of Welsh society. I hope that there will be representation from the black community and other ethnic minority communities.
  I strongly believe that young people's voices should also be heard. I do not know precisely how that will be achieved, but we must get young people involved in CHCs and their advocacy role. We have had a huge problem with advocacy services for children in Wales since the loss of the Children's Society and the advocacy services it provided. Somehow, we must find a way to ensure that CHCs can speak for young people and children. The Children's Commissioner can work to determine what young people want from the health service—in fact, the commissioner has already done some work in that respect, by examining what sort of health service provision certain groups of patients want, but I think that the CHCs should take on that role in relation to young people.

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  It is important that work on a CHC be recognised as a public duty. In their response, the Government say that
  "the list of public bodies can be amended by Order"
  to include CHCs, but we could do that here and now, via the Bill, and perhaps we should consider doing so.
  As hon. Members have said, in Wales the link between ill health and deprivation is clear for all to see. People in areas of severe deprivation suffer from bad health. In recognition of that, the Townsend report, commissioned by the National Assembly, suggested a funding formula that placed particular emphasis on funding, within as well as between health authorities. It is important to recognise that in a time of growth in health spending, it is possible to redistribute money. The Assembly is implementing the formula changes in the Townsend report—the formula needs some refinement, but the broad thrust of the Townsend report is being implemented. As the health budget grows, every area gets an increase, but the most deprived areas get a bigger increase, and the main beneficiaries are the areas where need is greatest. I applaud the Assembly for taking that step to tackle the health inequalities that are so obvious in Wales.
  I hope that the Wales Centre for Health, when it has been set up, will take the Townsend proposals further and work towards ensuring that tackling health inequalities is seen to be the way forward in Wales. The huge differences in the health of the people in different parts of Wales are key issues that must be addressed. The Townsend report addressed the problem, and its recommendations are being implemented, but the creation of the Wales Centre for Health will be of enormous help.
  The Townsend report set out two strategies: first, the change in the formula—the redistribution of money; and, secondly, tackling the causes of ill health, which involves all the other services that contribute to the wellbeing of the population. Because health is linked so strongly with poverty and the vital services that local authorities provide, I strongly support the proposals in previous legislation to make the health boards coterminous with local authorities. That is absolutely right. There has been some criticism that the authorities are too small, but if they are, it is because of what the previous Government did when they reorganised local government and that is what we have to work with.
  Lembit Öpik: In Powys, it is the other way round—the local authority area is too large. While I agree with the sentiment expressed by the hon. Lady, does she agree that we must bear in mind the size of local authorities to try to avoid complicated cross-cutting for community health councils?
  Julie Morgan: Yes, I agree.
  If we look at inequalities which cause ill health, housing and access to leisure facilities have more of an impact on the health of the nation than, for example, the prescribing of drugs. I wonder whether hon. Members read press reports yesterday of a study which showed that pensioners in Japan live longer if they live near parks and tree-lined streets in cities? The study showed that less noise and more natural light in houses were associated with long life. The more active an older person, the longer they tend to live. We should look at
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  those crucial points when we provide health care. A huge benefit of free bus travel for pensioners in Wales is that they will live longer because they are getting out and about—that is a vital impact on the health of people in Wales.
  The provision of public parks is important. In Cardiff, we have wonderful parks. Bute park is adjacent to my constituency of Cardiff, North, and the Taff trail passes through it. Those opportunities for leisure and health are as important as the services provided by the NHS. The two issues are closely linked. I am therefore pleased that existing legislation makes provision for local authorities and health boards to work together closely—on the boards themselves, of course, there will be local authority representation. In our pre-legislative examination of CHCs, we discussed whether their boundaries should be strictly coterminous with those of the health boards. The Select Committee's conclusion was that that was best left to regulations by the Assembly, following consultation. There were strong views about not restricting boundaries too much, with which I agree. It is best to consult, as CHCs have already gone through reorganisation and uncertainty, and different issues arise in different parts of the country, as the hon. Member for Montgomeryshire (Lembit Öpik) mentioned. We should not be prescriptive, so I support the view that the Assembly should make a decision and introduce regulations.
  The Bill plans to extend the CHCs' remit to primary care nursing homes, which is a good move. The Prison Service issue needs to be looked at again. I am concerned about the provision of health care in prisons, and an overseeing body is needed to look at standards. I support the creation of the Wales Centre for Health and Health Professions Wales. I welcome the fact that Wales will take the lead on the inclusion of health support staff. The Select Committee on Welsh Affairs discussed the way in which such an inclusion would be different from practice in the rest of the UK, and we in Wales should be pleased that we have acknowledged the importance of health support staff.
  The Welsh health agenda is preventive and radical. Measures already introduced, such as the freezing of prescription charges and free prescriptions for the under-25s, by the Assembly will result in long-term benefits. We do not know what the long-term effect of such measures will be—perhaps the Wales Centre for Health can analyse the effect of their early introduction. For example, if young people have access to free prescriptions, that may have long-term benefits. I am pleased that the Minister for Health and Social Services in the Assembly has said that there is no intention to go down the route of foundation hospitals, which were included in the Queen's Speech.
  One of my concerns about foundation hospitals is the fact that they could choose to pay their staff more. We would get into a situation where one hospital would be out-bidding another, and I fear that health would suffer generally as a result. It would be unfortunate if an auction were to take place between different types of hospitals. I am therefore glad that the NHS in Wales is not going down the route of foundation hospitals.

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  It is important to retain a national pay scheme for nurses in England and Wales—if there was a variation in Wales, we would end up being out-bid. Also—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady must resume her seat if I am standing. She is now roving rather wider than the terms of the Bill and must come back to order.
  Julie Morgan: Thank you, Mr. Deputy Speaker. I am sorry if I roamed from the Bill.
  In conclusion, the Bill is a small step towards achieving the Assembly's goals of prevention and a healthy Wales. The pre-legislative scrutiny was a beneficial process, and I look forward to the Bill's remaining stages.
  8.15 pm
  Mr. Roger Williams: It is a great honour to follow the hon. Member for Cardiff, North (Julie Morgan), who has done a great deal of good work on behalf of children in Wales. I noted her remarks about the membership of CHCs and the way in which we could better reflect the needs of children. I shall return to that later.
  We support the Bill wholeheartedly. It is a small and devolved step towards a better national health service in Wales. Those of us who want a thoroughly improved NHS in Wales know that that cannot be achieved at a stroke, but step by step, inch by inch. Waiting lists have been mentioned, but they are an inappropriate measure of the success of a health service. The Bill is about patients and patient power, but it does not matter to the patient whether he is first on the list or 10,000th. What matters is when he is going to get his treatment—that is the key issue for individual patients. We are in danger of sinking into a morass of statistics about the NHS and losing sight of the fact that it should provide a personal service—people desperately want to achieve that.
  I was going to give another accolade to the hon. Member for Clwyd, South (Mr. Jones) who was in danger of receiving so many that it would be impossible for him to leave the Chamber. However, he has left—probably because he is afraid of having so many accolades. It was a privilege to serve on the Select Committee on Welsh Affairs, which undertook pre-legislative scrutiny of the Bill. Particularly impressive was the way in which the public and health professional in Wales were involved in that process. As a result, many of the Select Committee's recommendations were accepted and the Bill has achieved its Second Reading. The hon. Member for Clwyd, South said that we could have a truncated Second Reading because many issues had been teased out and put to bed. One that springs to mind is the title of the Bill. It started off as the National Health Service (Wales) Bill, but it quickly became apparent that CHCs, the Wales Centre for Health and Health Professions Wales could deal with health care delivered by agencies outside the NHS. Quite rightly, the title has been changed, and the Bill is now the Health (Wales) Bill. That is a minor issue, but it demonstrates the way in which problems were identified at an early stage and rectified.
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  Turning to issues raised by the Bill, I wholeheartedly agree with the hon. Member for Cardiff, North that it is appropriate that the Welsh Assembly should have a say in the way in which members of community health councils should be identified and appointed—that should be a devolved matter. Under the old appointments system, local authorities could nominate members for community health councils. We all know of local authority members who have played leading and very significant parts in the work of community health councils, as well as some who see such work as another part of their overall role and cannot give the amount of time and effort that is needed because of the responsibilities that they have in their local authority. Perhaps the Assembly will take that into consideration when deciding on membership.
  I also take on board the point made by the hon. Member for Cardiff, North about including on CHCs people from ethnic minorities and younger people. That is desperately important.
  The Bill's extension of the powers and roles of CHCs will also involve the training that members receive. The duties and expertise that they will need in carrying out the inspections and dealing with problems raised by individuals will be much greater than in the previous CHC system. When we look at the amount allocated for setting up the councils, I hope that there will be enough resources to ensure that those involved do not go out on their visits and inspections unprepared for the duties and responsibilities that will be expected of them.
  I also value the advocacy role that CHCs have exercised in the past and the greater advocacy that will be expected of them in future. I am especially interested in the work that they have done for people suffering from mental health problems. In rural areas, the importance of mental health issues is especially acute, because people tend to live in isolated locations where they do not get the family and community support that is sometimes available in more densely populated areas. Voluntary bodies are also involved in that advocacy work. Great skill will be needed when the CHCs and voluntary bodies decide between them how such work will be done to best effect for the patient.
  Mention has been made of the possible extension of the work of CHCs to prisons and young offenders institutions. That issue has been teased out in this debate and we will perhaps see more of it in future. Schools are another area in which health provision is made. Not only are there emergencies such as accidents or sudden illnesses—lay people are often asked to administer medication to children who may need it during the school day—but children in school are given advice and counselling on health issues, and the quality of that counselling and advice is important in health delivery for young people.
  I should like to mention a particular initiative that my local CHC has just undertaken: the setting up of a first responder scheme in which a group of volunteers is trained to attend when somebody has suffered heart failure or a heart attack and to use defibrillators to restart heart activity. As the volunteers are based locally, such action can often be more quickly carried out than by the ambulance service. The initiative has already been set up in one area and is about to be set up in another. It is an example of how CHCs can take initiatives and drive forward service improvements,

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  rather than merely inspect or wait for people to make complaints. Figures show that where first responders are in place, recovery from heart attacks is 10 times more likely than elsewhere. That is a very good example of how CHCs can work.
  Lembit Öpik: Does my hon. Friend agree that the Bill presents an especially important opportunity in that regard? He and I have both known people such as the late Hugh Taylor, who would have been alive today if such a scheme had been in place and the community health councils had had the power to implement the very important service to which he refers, especially in rural areas.
  Mr. Williams: I take the point that my hon. Friend makes; we both know the gentleman whom he mentioned. We have an opportunity in Wales to show what the powers and scope of CHCs can be in improving the health and well-being of people in such areas.
  I would like us to keep the name "community health councils", as access to these bodies is so important. A change of name merely makes it that much more difficult for somebody to find their way in getting the help and support that they need. We have already a successful organisation and we are going to make it better by introducing the Bill, but we should not make access to it more difficult by changing names.
  The Bill is about devolution and getting the right solutions for Wales. My hon. Friend the Member for Montgomeryshire (Lembit Öpik) and I have certain difficulties in respect of community hospitals that have always delivered various medical operations and activities that are now being phased out because royal colleges believe that those hospitals do not have the appropriate facilities. That is happening despite the very good safety record on delivering those services. Indeed, the population to whom the services are delivered are very satisfied with them and hope that they will continue. In the Wales Centre for Health, which could give advice on those matters, and also Health Professions Wales, which could train people to operate in such ways, we will now have the facilities in Wales to reconsider those matters and see whether such services could be delivered locally in community hospitals by doctors who want to provide them and to patients who would benefit greatly.
  A local example is Brecon hospital, which had a GP-led maternity service. Not only low-risk, but medium-risk, mothers could be delivered. However, because of advice given by a London-based organisation, that has now changed to a midwife-led maternity service of which only mothers who have been classified as low risk can take advantage. The service was very well thought of by local mothers, many of whom wanted it to be delivered locally. In some cases, however, they now have to travel 20 or 30 miles to get the level of service that they want. I hope that we can have Welsh solutions to Welsh medical issues, and I am sure that the Bill goes a long way towards achieving that.
  My hon. Friend the Member for Montgomeryshire mentioned several matters over which we would like the Assembly to have power. The first is free eye tests for everyone in Wales. In 1989, the Conservative Government introduced charges for eye tests, but the
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  current thrust of health policy in Wales is prevention and primary health care. Free eye tests for everyone would mean the early diagnosis of the symptoms of some diseases and therefore the use of preventive medicine.
  We also support free dental checks—
  Mr. Deputy Speaker: Order. The hon. Gentleman is losing sight of the Bill.
  Mr. Williams: I thank you, Mr. Deputy Speaker, for your advice. Free dental checks are such an important aspiration for us that we sometimes get carried away when we advance it.
  The Bill will improve the health service in Wales. We thoroughly support it.
  8.29 pm
  Mr. Martin Caton: It is a great pleasure to follow the hon. Member for Brecon and Radnorshire (Mr. Williams). Like him, I am a member of the Select Committee on Welsh Affairs, which was involved in the pre-legislative scrutiny of the draft Bill.
  It became clear as we took evidence that the Bill is uncontentious and has wide support across the professional and political spectrums. That was confirmed in our debate in the Welsh Grand Committee on 16 July and in the debate in the National Assembly a couple of days later. It received further confirmation this evening, at least when we focused on the Bill.
  I do not deny the importance of the Bill's three key objectives, but the different method of dealing with the measure so far and its impact on the Bill's passage is equally important. In the current instance, process may be as significant as the event. I therefore want to consider briefly what the process has achieved and whether we can learn lessons from our approach that will help in future.
  It has already been said that this is the first occasion on which a Wales-only Bill has been subject to pre-legislative scrutiny that involved Back-Bench Members in Westminster and our colleagues in the Assembly. The Welsh Affairs Committee was given the job of initially examining the draft Bill on behalf of the Commons.
  Some hon. Members, especially Labour Members, have argued that the Select Committee was not the appropriate forum for the task. Perhaps their strongest argument is that although a Select Committee is normally the best body for undertaking pre-legislative scrutiny, the Welsh Affairs Committee is different. Most Select Committees cover specific aspects of policy such as education, health and defence. The members have therefore developed expertise and have a special interest in their subject. It is argued that that does not apply to the Welsh Affairs Committee or any of the other territorial Committees, and that we need to find a different way forward for Bills that apply only to Wales.
  Although that argument contains a kernel of validity, Select Committees have greater strengths than a collegiate expertise and experience. The approach and culture that established Select Committees are more important. We proceed through investigation, seek objectivity and try to reach consensus. All Select

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  Committees, even those that cover specific policy matters, look outside to those who give evidence and to special advisers for expertise and special interest.
  The Welsh Affairs Committee did a good job in considering the draft Bill. It would be difficult to establish an alternative body on an ad-hoc basis that could do a better job in future. The Welsh Grand Committee is too large and too party political to undertake that function.
  I was impressed by the partnership approach that developed between the Government in Whitehall and the Government in Cardiff bay in devising the measure. That was reflected in the joint session when my hon. Friend the Under-Secretary and Assembly Minister Jane Hutt gave evidence together.
  We did not achieve the same partnership between our Committee and the Health and Social Services Commit tee in the Assembly in scrutinising the measure. However, we made some progress and, as my hon. Friend the Member for Cardiff, North (Julie Morgan) pointed out, Assembly Members attended some of our Committee's meetings and vice versa. I am sure that we can build on that. Surely we can maintain our separate responsibilities as Members of Parliament and Assembly Members and our separate decision-making processes, but co-operate far more effectively in evidence gathering.
  Julie Morgan: Does my hon. Friend agree that it would be a good idea to have joint committees comprising Westminster Members and Assembly Members, as the Chairman of the Select Committee suggested?
  Mr. Caton: I thank my hon. Friend for that suggestion. I think that we are a little way away from that, but it is an objective that I would seek. We could probably do that only in the evidence-gathering stage, as I suggested. For pre-legislative scrutiny, the Assembly needs to come to its own decisions separate from us, whichever forum is used to represent the Commons. Similarly, the Commons, whether in the form of a Select Committee or another body, would have to come to a decision about its recommendations independently. However, in the evidence-gathering stage, there could be much better, more effective co-operation. I hope that we will move towards that.
  The pre-legislative scrutiny at both levels of Welsh government has already proved its worth. Even on a short and uncontentious Bill such as this, we have identified scope for real improvement at the draft stage. I congratulate the Government on taking on board many of the proposals. In some cases the Government, in responding to recommendations from various parties, including the Select Committee, made a fair case for sticking to their guns. In one or two other cases, they should be pressed a little further.
  I want to return to the concerns that I raised in the Welsh Grand Committee back in July, and look at how they have been addressed in the Bill. I warmly support each of the three purposes of the Bill. I remain convinced that reformed and enhanced community councils will be the right people's watchdogs for the health service in
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  Wales. I am sure that the Wales Centre for Health, with its advice, training and research remit, will provide independent assessment and support that will form a hub for partnership between the various sectors that provide or utilise information or evidence on health issues.
  I am equally confident that Health Professions Wales is a step forward, building on the remit of the old Welsh National Board for Nursing, Midwifery and Health Visiting to include care support workers, and allowing the inclusion of other health care professions over time.
  In July, we considered various issues that came out of the Select Committee inquiry. I welcome the fact that the short and long titles of the Bill now properly reflect the contents of the Bill. I welcome also the clarification of languages in some clauses and schedules, although I suspect that there is still more scope for improving the plain speaking part of the Bill; the inclusion of the promised reference to the rights of CHCs to receive information from health service providers; and the tightening of the wording to protect the independence and the perceived independence of the Wales Centre for Health, although again there may be further steps that we can take in that regard.
  The Government have made a broadly rational case for maintaining their and the Assembly's approach to the co-terminosity of CHC boundaries and local health boards; to some extent on the adequacy of current drafting to enable CHCs to undertake independent advocacy services; and on the powers and functions of the Association of Welsh Community Health Councils.
  I now also accept that the National Assembly's powers of direction to Health Professions Wales on functions carried out by that body on behalf of the Health Professions Council or the Nursing and Midwifery Council are already constrained by the agreements that established those functions. A requirement in the Bill for prior consultation, as we suggested, would therefore be superfluous.
  Although we in the Welsh Affairs Committee did not address the matter in our report, the National Audit Office rightly drew attention to the lack of provision for the Auditor General for Wales to carry out value-for-money investigations into the work of the Wales Centre for Health. I am delighted that the Government have provided for that in the Bill.
  That leaves me with three ongoing worries about the Bill—two that I raised in the Grand Committee, and one that the Royal College of Nursing Wales raised subsequently. First, I still believe that it would be useful if the Bill went even further in empowering the Assembly to extend the remit of community health councils to include the inspection of and the requirement for information from anyone involved in the provision of publicly funded health care.
  I still believe that the scope of CHCs should extend to prisons and young offender institutions, as has been mentioned several times today. Medical assessment and care, especially psychiatric assessment and care, in our prisons is a real issue. Although I appreciate that prisons have their own inspection and lay visitor systems, I believe that inspections by a group of informed lay people who could make direct comparison between health provision in prison and outside would be extremely valuable.

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  That brings me to my other on-going concern: the fact that the Bill still does not give CHC members a statutory right of time off work for their public duties. Frankly, this remains an anomaly. Representatives of CHCs across Wales told the Select Committee that provision of this right was probably the best way of getting CHCs better to reflect the communities that they are supposed to represent. At present, younger working people feel unable to participate in the work of CHCs because they cannot get time off work or cannot afford to take that time off.
  I was a member of the old Swansea and Lliw Valley community health council for some years, and this was a real issue even then, in particular for hospital and other institutional visits, some of which, sensibly, had to be made in the daytime. During my time on the council, anyone who went to one of our regular monthly meetings in an evening would have seen a body of people who broadly reflected Swansea and Lliw Valley society in terms of gender balance, age range and—to a lesser extent, sadly—ethnic origin. If they went on one of our inspection visits in the daytime, however, they would have got a very different picture. Mostly, it was only retired members who were able to take part. We are now talking about extending the responsibilities of CHCs to deal with private homes and primary care providers as well as hospitals and other institutions, and the problem is likely to get worse if we do not address it. Perhaps the Bill is not the right way to provide a statutory right—it might be more appropriate to use an order—but this change is essential, however we achieve it.
  The Royal College of Nursing Wales has raised an issue worth considering, in the briefing that it has sent to us all. It is worried about how major health service reconfigurations proposed by local health boards or the NHS Wales Department will be dealt with in practice. It foresees that, due to the small size of local health boards, big changes—the closure of an accident and emergency department is the example that it cites—could be devised jointly between the local health board and the regional offices of the NHS Wales Department, which is part of the Welsh Assembly Government. In such circumstances, if a CHC exercised its right of appeal against that reconfiguration to the Assembly Health Minister, that Minister would be sitting in judgment on a proposal that had come, at least partly, from her own officials. The RCN believes that this would constitute a conflict of interest, and proposes the creation in the Bill of an independent configuration panel for Wales, to provide independent advice to the Minister. I understand that that is what happens in England. I would be interested to hear the Minister's thoughts on that proposal when he winds up. Perhaps we could return to the matter in Committee.
  This was a good draft Bill; it is a better Bill now. Who knows—perhaps it will be better still when it comes back on Third Reading.
  8.42 pm
  Dr. Hywel Francis: I warmly welcome the Bill for several reasons, not least because it makes a major contribution to Welsh constitutional history, Welsh social history and—dare I say it?—Welsh socialist history. Most important of all, it makes a contribution to the future and well-being of the Welsh people. As a fervent campaigner for democratic
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  devolution in Wales, I am proud to say that this is the first Wales-only Bill that has undergone pre-legislative scrutiny by the National Assembly for Wales and by this House, and as a member of the Welsh Affairs Committee, I am very proud to have participated in that process. What better first Wales-only Bill could there be than one that addresses the quality of life of our people and the health of our nation? It is also constitutionally important because it shows the benefits for Wales of the devolved and central Administrations working in partnership rather than engaging in confrontation and conflict.
  The Bill is also important because it is the logical consequence of recent social history in Wales. The retention, democratising and strengthening of Welsh community health councils is the logical conclusion of our own recent struggles, particularly in relation to democracy and advocacy. We all know that the national health service was modelled on the democratic, socialist and grass-roots principles of the Tredegar Medical Aid Society by the founder of the NHS, Aneurin Bevan, rooted as it was in all the struggles of all the valleys of south Wales and, indeed, the whole of Wales.
  More recently, that advocacy and those democratic principles have been carried forward by such pioneers as the late Dr. Alistair Wilson and his Cynon valley patients committees and by Dr. Julian Tudor Hart of Glyncorrwg in my constituency. Dr. Hart's document "Going for Gold" inspired so much of the thinking behind the Welsh Office document "Better Health, Better Wales", which, like Dr. Hart's publication, addressed improving primary health care, democratising the health service and giving patients a voice.
  It is a tribute to the Welsh Assembly Government's Minister for Health and Social Services, Jane Hutt, her deputy, Dr. Brian Gibbons, who was at one time a partner of Dr. Julian Tudor Hart, and my hon. Friend the Under-Secretary that the Bill, which has a consensual and sensible nature, has progressed with wide public support. It addresses the central questions of NHS reform, not only in Wales but more widely. I refer in particular to the nature of local democratic accountability and ensuring that we move from what Dr. Julian Tudor Hart once described as a "body repair service" and a "national disease service" to a genuinely democratic and effective NHS for the 21st century.
  I commend two aspects of the Bill, the first of which is the continuation and strengthening of the community health councils in Wales. That welcome development is very much in the social justice tradition of Wales, and it is thoroughly appropriate that the CHCs have a strong democratic element that is achieved through local authority and other representation. That is a major local democratic reaffirmation and a return to the best values of the Tredegar Medical Aid Society and other similar voluntary health organisations of the past.
  The CHCs will have a significant additional advocacy role in the complaints process. We do not need a confrontational complaints procedure. The new complaints system can also provide useful feedback to service providers. We know to our cost how stressful some of those procedures can be. For example, a Gower doctor tragically committed suicide after a complaint was lodged against him last year.

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  When matters proceed to a formal complaints stage, patients need assistance through a complex and difficult process that they might go through only once in their lives. I welcome the fact that CHCs will be able to have a remit on nursing and residential homes. May I make a final observation on CHCs? The public do not find that name easy to establish in their thinking as that of an NHS watchdog. No doubt the Welsh Assembly Government will address that matter through their own local consultation processes.
  The second aspect that I wish to address is the creation of the Wales Centre for Health, which will promote well-informed public health policies across Wales and from which I am sure the whole UK will benefit. Of course, we need good, reactive health services, particularly for those parts of the UK that suffer disproportionately from serious ill health, such as the south Wales valleys and certain parts of rural Wales. However, we also need informed public health policies that take on board the wider agenda of identifying the causes and determinants of good and bad health, so that people can live healthier lives in the first place.
  The A.J. Cronin novel "The Citadel", which is based on a south Wales mining valley, has already been mentioned. Its hero performed an extreme act in taking a public health initiative and blowing up a defective sewer system. A more benign and peaceful, but nevertheless powerful purpose of the new centre is to provide independent public health information to community health groups that are concerned about the health implications of public policy. We have noticed in recent times, for example, the deep concern at Nantygwyddon Tip in the Rhondda and Crymlyn Burrows in my constituency.
  I understand that the Welsh Health Minister has pledged that the CHCs will have a statutory right to consult on major local changes in NHS provision and that she will address that matter in regulations. I believe that she is correct in doing that, as those issues should be addressed by the devolved Administration.
  The health service is entering a bright new era in Wales. Next Saturday, I shall visit a new hospital in my constituency at Baglan Moors and I am reliably informed that my first visit may coincide with the birth of the first baby at the hospital—Labour delivering once again for Wales.
  The two developments within the Bill—the strengthened, democratised CHCs and the new Wales Centre for Health—encapsulate democratic devolution in practice. They are policies made in Wales in partnership with Welsh representatives here in the House. I hope that we have been true to the needs and aspirations of the Welsh people in our deliberations. The representative and advocatory nature of the CHCs and the WCH is very much in accordance with the spirit and aspirations of the Welsh founder of the national health service, Aneurin Bevan.
  I end with Aneurin Bevan's prophetic words, quoted in Dai Smith's admirable book, "Aneurin Bevan and the World of South Wales":
  "The first function of a political leader is advocacy. It is he who must make articulate the wants, the frustration and the aspiration of the masses. Their hearts must be moved by his words, and so
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  his words must be attuned to their realities … A representative person is one who will act in a given situation in much the same way as those he represents would act in that same situation. In short, he must be of their kind … Thus a political party which begins to pick its personnel from unrepresentative types is in for trouble. Confidence declines."
  I believe that that applies equally to public bodies, and for that reason the Bill enhances confidence. That is why I commend it to the House.
  8.52 pm
  Mr. Wayne David: Like other hon. Members, I welcome the Bill. Although it is short, it is very significant. Unfortunately, some Members—perhaps not those who are here tonight—have been somewhat dismissive of it. I believe that the Bill will make a big difference, because the health service is one of the biggest, if not the biggest, issue in Wales today. My hon. Friend the Member for Aberavon (Dr. Francis) quoted from Aneurin Bevan's "In Place of Fear". If something is to be put in place of fear, it should be a society with a proper health service, so that people do not have to be unduly concerned about their health.
  The Bill is important in two very real senses. First, it has constitutional significance: this is the first time that a Wales-only Bill has passed through the process of pre-legislative scrutiny. It is therefore very much a product of a constructive partnership—not just a consensual partnership in this House, but a partnership between this House and the National Assembly for Wales. Others have described the Bill's long gestation process: it was discussed in the National Assembly—the genesis of the idea came from the Assembly; it has been discussed by the Under-Secretary of State for Wales in this House and by the Minister for Health and Social Services in the National Assembly; and it has been deliberated on by Members of both places. It was also discussed in some detail in the Select Committee on Welsh Affairs, which produced an excellent report on it. It was the subject of a major debate in the Welsh Grand Committee, which I am pleased I participated in. If we look back at the process to date, we can honestly say that it has provided a good model. I sincerely hope that its lessons will be learned and similar processes will be put in train.
  There is a wider debate to be had about how the House co-operates with the National Assembly for Wales. We must seek and promote greater dialogue between individual Members. We need mechanisms that bring our two institutions together. I pay tribute to my hon. Friend the Member for Wrexham (Ian Lucas) for the suggestions that he has made.
  It is worth noting that there has been a debate about co-operation with another institution, namely in the European Scrutiny Committee. The suggestion has been made that there should be a European Grand Committee, which would pull together Members of the European Parliament and hon. Members to debate issues of common interest. Perhaps we should consider inviting Assembly Members to the Welsh Grand Committee, so that they could deliberate on legislation at a pre-legislative stage. That is one of the constitutional debates that must be held and arises from dealing with the Bill.
  Lembit Öpik: Does the hon. Gentleman agree that the strength of the Bill and the relatively uncontroversial

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  nature of the debate tonight is a direct consequence of stakeholders in the Assembly, together with health professionals, having exactly the opportunity that he describes?
  Mr. David: There is something in that point of view. However, the material that we are debating is perhaps intrinsically uncontroversial. Nevertheless, if we are concerned about achieving a new form of politics in Wales, as has often been said, it must be done on the basis of partnership. The experience of this Bill has provided a good model to develop in future.
  The Bill, which is important for the people of Wales, essentially contains three proposals relating to community health councils, the Wales Centre for Health and Health Professions Wales. Although it is good legislation, it is not always easy to comprehend and certainly during the later stages of the Bill consideration could be given to how it could be simplified and more straightforward language could be employed.
  I should like to concentrate on the proposals with regard to community health councils. In my time as the Member of Parliament for Caerphilly over the past year and a half, I have had a positive relationship with my local community health council, Gwent community health council. Some 60 members bring to that CHC a wide range of experience. I have been very impressed with the range and quality of the work that they are engaged in. Extensive consultations are taking place on a range of services, and the CHC frequently takes up individual issues in a sensitive and responsive way for members of the public. My constituency office has developed a good and productive relationship with Gwent community health council.
  I am pleased that the Bill recognises the worth of community health councils and points the way forward but significantly the Bill is not so much about defending what we have and maintaining the status quo; it is about looking positively at how we can build on the base that we have already. That is why I warmly welcome the fact that there is scope for making our CHCs more representative than they are already. There is scope to bring a wider still cross-section of society into CHCs to make them more effective. There is a need to extend the powers of CHCs.
  I welcome the fact that there will be a more comprehensive advocacy service, covering, I hope, the whole of Wales. That network of CHCs will need to co-operate closely with other advocacy services, not least the Children's Commissioner for Wales, a post that has recently been established and has proven to be a success.
  I think, too, that we must welcome the new powers in the Bill to oversee primary care facilities. The National Assembly for Wales will be empowered to introduce regulations to allow inspections of private health premises where NHS services are deployed. I certainly welcome that: it is a small measure in terms of the relationship with the private care sector, but I am very concerned about the standard of private nursing homes in my constituency. I could cite many examples of appalling standards in those homes that would be a disgrace in any civilised society. Modest as it is, the proposed introduction of CHCs into that context will be warmly welcomed by many people.
  I share with other hon. Members the view that there remains scope to extend CHCs' role. There is a logical argument that they should be involved in prisons and
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  institutions for young offenders. It is also worth noting that, although the allocation of extra resources of some £550,000 from the National Assembly is welcome, that amount will not be sufficient to secure true democratic accountability and effective CHCs. For that, we will need even more resources in the future, and I urge the Assembly to allocate them.
  In conclusion, the Bill is significant, both in constitutional terms and in terms of the development of the NHS in Wales. I hope that my hon. Friend the Minister will respond positively to the constructive points that have been made by hon. Members of all parties, and that the Bill will receive the House's warm endorsement in its later stages.
  9.2 pm
  Mr. Dai Havard: I, too, welcome the Bill. I do not intend to deal with technicalities and cover ground that many hon. Members have covered already, but I am especially interested in the scrutiny process that has taken place. Many useful comments have been made about how the process has increased the number of people able to express a view.
  I share the concern about prisons and institutions for young offenders, and think that the involvement of CHCs could be a good idea. A long time ago, in a former life, I was a trade union official representing prison governors. I have seen some consequences of bad health provision in prisons. That provision would certainly benefit from having another pair of eyes look at it from outside.
  The cross-border problem associated with the work of CHCs has been mentioned, and I shall return to it later, as it has some important aspects. First, however, I want to say something about investment, process and patient involvement. The latter is the most important element of the Bill.
  I have different tests for the Bill. Is it really about patient empowerment? Is it really going to be a way of providing engines of change? What I require in the health service is step change as well as incremental change. There has been massive investment in the health service in Wales. By April 2004, spending on health provision in Wales will be £3.8 billion, 50 per cent. more than when the Assembly was created in 1999.
  There has been investment also in people. That is continuing, and the Bill contributes to that growth. I welcome that. Investment is going not simply to clinicians, but to the other professionals in the health team, right the way through to the ancillary workers. That is necessary, because health provision requires a team approach.
  Investment is also being made in knowledge and information, and I hope that that will allow the health service to be proactive rather than reactive. I intend to concentrate on the role of CHCs in that context. The structures of health service provision in Wales have been subject to many changes, and that process is continuing. We now have local health boards and strategic partnerships involving local authorities. They are fundamental to a holistic approach to health. I pay tribute to the managers of all those institutions in my area. They even involve themselves in crime and disorder partnerships. I celebrate the development of that strategic holistic view.

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  My local CHCs do a lot of good work, but, as my hon. Friend the Member for Caerphilly (Mr. David) has said, we should do more than defend what we have; we should develop it for the future. Advocacy is important in that context. In the valleys, people often put up with services that the articulate middle classes in other parts of the United Kingdom would not tolerate, because they do not have the right aspirations. I need others to help them identify their requirements. Studies are in progress, although I understand that developing the advocacy role is proving slightly more problematic than was expected. The patient support officer schemes that are being trialled are exactly what we need.
  If we are to live up to the standard we have required from the Welsh Assembly—sustainability in all things, but particularly in terms of improving health, and a holistic view—we need helpers. The voluntary sector is very important in my constituency. A charity called Cancer Aid Merthyr provides not only transport but counselling, and other services that would not otherwise be available. Macmillan nurses are also important, and they are to become part of the facilities provided by hospitals—oncological facilities, for example. I hope those voluntary workers will be integrated in the makeup of the institutions that we are creating—or the Welsh Assembly is creating.
  Perhaps other parts of the UK can learn from the various ways of managing this process in Wales. My local trust now has public involvement liaison groups. It is a horrible title, but its intentions are good. It has already accepted the principle of extending involvement and bringing in more people—not the "usual suspects", as my research assistant said to me the other day, but people beyond that definition. My hon. Friend the Member for Cardiff, North (Julie Morgan) made a good point about the need to involve younger people and previously disenfranchised groups.
  The Minister referred to the new community hospital that we are to have in Merthyr. The principles I have mentioned are being applied in the plans for that hospital. I am also very pleased that it is being financed publicly rather than through the private finance initiative—but that is another story for another day.
  I want to say something about patient involvement—not what is planned, but how it could be used. The incidence of cancer in my constituency is very high. Wales already has a cancer champion, a care strategy including a palliative care strategy, investment in specialist centres and a cancer co-ordinator. Many useful things are happening. The problem is the standards being applied, and the major frustrations encountered by those who try to make changes. As I have said, I want to test the ability of the new institutions to make such changes.
  My current worry is that cancer patients often suffer badly from fatigue as a result of anaemia, and need blood transfusions. Having investigated, I think they would benefit from alternatives to transfusion. Bed-blocking was mentioned earlier, and it is certainly one of the major problems in the health service. If patients were not having transfusions they would not be taking up hospital beds, and according to my calculations 250,000 hospital beds would be become available.
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  How can I ensure that such standards operate? If change is to happen, there must be ways of seeing that. I need agents to help me. The blood service in Wales is run by the Welsh blood service in the south, while what is known as the national blood service but is actually based in England deals with north Wales. It will be interesting for the CHCs responsible for the area to deal with that problem by considering the remit of those blood service institutions. Another serious issue, as we have heard, is that some patients have to go to Alder Hey or other hospitals in England, and I ask the Minister to give further consideration to that arrangement.
  Mr. Jon Owen Jones: My hon. Friend makes an interesting point about how effective specialist care could be best managed in different areas. I am sure that community health councils will be able to play a role, but surely the most effective way to develop that is to have a national audit across the United Kingdom comparing best systems and how they work. An independent database helps local people know what is the best available care.
  Mr. Havard: I share some of my hon. Friend's views on the audit process, but I shall not go into detail about it. He has made the point that he wanted to make.
  Setting up the Wales Centre for Health is a very important step. It will have to work alongside and co-operate with many other health institutions, for example, the National Institute for Clinical Excellence, whose remit will still apply in Wales. It will be important to judge how that arrangement works.
  I have a problem that I am trying to resolve. I have decided that I may be banging my head against the existing bureaucracy, even though I have the Chancellor of the Exchequer on my side, apparently, in doing so. So, I have turned the problem the other way around and said that what is really important is what the patients understand. I welcome the CHCs and the advocacy services. I want the informed debate that I am told should take place between clinicians and patients regarding what is the standard and the care that they should expect. I hope that these bodies will help empower patients so that they know what to ask for—very often they do not know unless someone tells them what care is available.
  I am involved with a free magazine for cancer patients. It is in the Library of the House, and it provides a forum for debate so that patients can understand what could and should be available to them. In that way, they are empowered and can make the health service their health service. If these proposals help that process, I shall be very pleased—if they do not, I shall be less pleased, because those are my tests to measure their success.
  I once saw a campaigner wearing a huge badge that said, "Wearing badges is not enough"; nor is changing institutions. We have to have the right intentions; we have to listen to the response when it comes, and act on it. We will confront the issue about money at some point, although it will not be in our gift here at Westminster, of course, because we will have given that opportunity away. It is called devolution. Nevertheless, we will have an important view and there need be no worry that it will be properly put.

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  I welcome the fact that some of the institutions in the Bill will help make change. They will test one or two of the old boys' clubs current in the bureaucracy surrounding the health service. If we say what standards we require, people will say exactly what they want. Wales is the appropriate place for those institutions to carry out the Government's intentions in practice, given that it was the place that designed and achieved the national health service, as my hon. Friend the Member for Aberavon (Dr. Francis) articulated earlier.
  9.13 pm
  Ian Lucas: This has been a long and interesting debate. Right hon. and hon. Members have been almost unanimous in welcoming the Bill. Part of the reason that the Bill has been so widely welcomed is the procedure that has been followed to bring us to this point. The scrutiny that has taken place has ironed out some of the differences between the various parties and the Government have in many respects already addressed the smaller issues that were raised during the process. However, the Bill is largely uncontroversial and I therefore caution against the inference that the procedure that has been followed for this Bill is the best possible when considering legislation for Wales.
  I want to say, at the outset, that the onset of draft legislation—a tremendous innovation by the Government—gives us a great opportunity to forge a working relationship with the National Assembly for Wales. Within the context of draft legislation, we can begin to deal with the major constitutional challenges brought by the establishment of the Assembly.
  The Government decided that a draft Bill for Wales should first be looked at by the Welsh Affairs Committee. That was a useful experiment, but I am not a member of the Welsh Affairs Committee, and I have an interest in, and experience of, the health field, and I should have liked to contribute to the Bill at an earlier stage than now. The fact that the Welsh Affairs Committee is a territorial Committee is relevant in the context of draft legislation. One of the great benefits of the Select Committee system is that it enables Members to develop specific expertise, which they can bring to bear in consideration of any Bill that relates to the individual topic. The Welsh Affairs Committee does not have the same merits as a departmental Select Committee in that respect.
  My view is that a special Committee should be set up to look at draft legislation of this type. As I have said before, I believe that that Committee should be made up of Members of this House and Members of the National Assembly for Wales. I am pleased that, today, the Chairman of the Welsh Affairs Committee has adopted my suggestion and appears to be following the course that I have set out previously. It is important that we follow that course for two main reasons. First, it would mean that a thread would run from the inception of any policy in the Assembly through to the passing of the Bill in the UK Parliament. Assembly Members would be present at the beginning of the Bill when the ideas were brought forward, and, at the onset of draft legislation, they would become members of a Committee with Members of this House and would work together to improve the Bill.
  At that stage, once the preliminary consideration of the draft legislation had taken place, the Bill would be shifted up to Westminster, and the Committee members
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  from Westminster who had been looking at the Bill could pass on the information, experience and arguments of Assembly Members to this House. That would ensure a rigorous line of scrutiny from inception of ideas through to passing of legislation. That is a sensible framework that at least deserves to be tried. The test will come when we have a contentious piece of legislation. The Select Committee format is very positive, and as a new Member I have been impressed by the way in which Select Committees operate and relationships develop, even with Members from Opposition parties.
  Mr. Deputy Speaker: Order. I am not sure that this is the most apt occasion for a constitutional essay. I hope that the hon. Gentleman will come to the Bill in a moment.
  Ian Lucas: I am obliged, Mr. Deputy Speaker. I am coming to the Bill now.
  The issue on which I want to focus is the retention of community health councils. My experience of community health councils comes from a different perspective, which has not been mentioned in the debate so far. Before I came to the House, between 1997 and 2001, I was a non-executive director of the Robert Jones and Agnes Hunt hospital at Gobowen. It is an unusual hospital. It is two miles from the border with Wales and provides a great deal of help, expertise and care to people from north Wales, mid-Wales, Shropshire and the surrounding area.
  In my role as a non-executive director, I was also complaints convenor and had much experience of dealing with members of the CHC. It played an extremely valuable role in putting together submissions on behalf of people who would not usually be able to put together submissions themselves. It presented complaints in a NHS procedure that is, in my experience, the most complex one that anyone making a complaint could encounter. The procedure is bedazzling to all those who deal with it, including me as a trained lawyer.
  Gareth Thomas: I know that my hon. Friend has an interest in this subject. He has not only been involved in health service management but is a lawyer who has experience of clinical negligence claims. He will recall that I chaired a seminar on clinical negligence in the House. Does he think that there is a role for CHCs and the Wales Centre for Health in trying to bring about a more effective complaints system? Such a complaints system would offer the patient a quicker and more transparent explanation of what had gone on in an adverse incident, as it is termed by doctors. It would also have the ability and power to make small awards and compensation without recourse to the long-winded procedure in the courts.
  Ian Lucas: There is, indeed, an essential role for the CHCs. In my role as a member of the board of a hospital that provided health care to people in north Wales, I knew that the submissions and complaints made by patients were a valuable management tool for the hospital. They helped to improve the standard of care that was delivered. One of the major challenges that the NHS faces is to find a system that responds to the

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  concerns and complaints of patients and does so in an environment that does not threaten the providers of the care—whether they are doctors or nurses. The CHCs need to develop a partnership role with hospitals so that information can be presented in a uniform way as far as possible. That information would then be a valuable management tool for the hospital.
  I must confess that another aspect of the Bill causes me concern, and it relates to cross-border care. I represent Wrexham, which is a border town. Health care is supplied to it by the Countess of Chester hospital, Wrexham Maelor hospital and the Robert Jones and Agnes Hunt hospital near Oswestry that I have already mentioned. More specialist care is provided in Liverpool and Manchester. However, the Bill does not appear to be clear on the important question of whether the CHCs in north Wales, which will continue, will have the investigatory powers to examine matters in England. I hope that my hon. Friend the Minister will clarify that point when he winds up. Many of my constituents who see me about health care problems tell me that they have been treated across the border and want to pursue their case just as readily as they could if the hospital were in Wales.
  Lembit Öpik: My personal experience of Gobowen hospital has always been positive and just as the hon. Gentleman describes. Does he agree that we may want to explore the important matter that he raises in Committee? There will unquestionably be issues on jurisdiction to deal with and it may be the case that the CHC will need to have the authority to act on a non-statutory basis across the border.
  Ian Lucas: I agree. The issue has not been raised sufficiently. Most hon. Members who have contributed to the debate do not have the same cross-border services as those of us who work in north-east Wales.
  Huw Irranca-Davies: Does my hon. Friend also agree that because the issue is long standing, the Bill gives us the opportunity to address it? One way or another, we have to ensure that we satisfy the requirement for accountability on cross-border issues.
  Ian Lucas: My hon. Friend is also correct. We must be conscious of the fact that we are in an era in which health care and the experts are becoming more specialised. It is simply not the case that every district hospital can provide expertise of the highest quality. Although the mantra "Welsh solutions for Welsh problems" is appealing, when my constituents come to me for good quality health care, they do not mind whether that is supplied in Chester or Wrexham. What they want is a decent service and a good standard of care.
  Mr. Evans: Would not the hon. Gentleman prefer it if the CHCs in his area were in discussions with the sister organisation in Chester, for instance, so that it could investigate the problem? After all, part of the problem is that his Government abolished CHCs in England and we are trying to preserve them for Wales. Does he not have faith in the sister organisations in England?
  Ian Lucas: I know from close discussions with health professionals, health consumers and patients in
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  north-east Wales that there are close working relationships of all types between people who work on different sides of the border. Indeed, many health professionals are employed by more than one hospital spending, for example, 50 per cent. of their time in Chester and 50 per cent. in Wrexham. Areas such as north-east Wales recognise that the services must be provided on both sides of the border. The care needs to be of a high quality. I am sure that good relationships will be developed in due course.
  Another aspect that I greatly welcome is the extension of the CHCs' powers on primary care and the inspection of private facilities that offer NHS services. Will that inspection extend to voluntary organisations that provide health care? I have in mind the Nightingale House hospice in Wrexham. It provides an excellent standard of care and would have nothing to fear from an inspection regime. Will CHCs be able to inspect hospices?
  For once I take issue with my hon. Friend the Member for Caerphilly (Mr. David). There are excellent nursing homes in the private sector that provide high-quality care. I have inspected the Pendine Park nursing home in my constituency. It is a high-quality home that provides an excellent service. Private nursing homes have nothing to fear from the system of assessment, but it is good that the CHCs have that additional power.
  I welcome the Bill. The substance is good, but the procedure by which we reached this point could be improved. The Bill is positive for Wales, and although it may need some refinement in Committee, I am sure that it will be a good step in the right direction for my constituents in Wrexham and I am pleased to support it.
  9.30 pm
  Chris Grayling: This has been an interesting and wide-ranging debate—sometimes a little too wide-ranging for the Chair. In some ways, however, it has not been as wide-ranging as it might have been because, as some hon. Members have said, this is not quite the Bill that was anticipated, so much of the Government's planned reforms for Wales having already been handled in the National Health Service Reform and Health Care Professions Act 2002.
  The debate began with the Secretary of State making a strong defence of the Bill and of the NHS in Wales. However, he failed to explain why such high levels of spending per head of population have not led to better health outcomes, and he admitted that not all was well with waiting lists. During his speech there was a noteworthy intervention by the hon. Member for Blaenau Gwent (Llew Smith), who basically asked, "Whatever happened to our bon fire of quangos?" I got the impression from the Secretary of State's response that he believed that the only problem in the past was that we had the wrong kind of quango.
  My hon. Friend the Member for Ribble Valley (Mr. Evans) made a telling attack on the failures of the current Administration to deliver improvement. He warned that the Bill risked putting too much control into the hands of politicians. He also pointed out that it delivers more change to a service that is already struggling with very considerable change.
  We have had numerous contributions, including many from members of the Select Committee. Those speeches addressed the measure itself but they also

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  strayed—as I said, sometimes rather too far for the comfort of the Chair—on to wider Welsh health issues ranging from the health benefits of free bus passes to a call for free eye tests, and even, in the case of the hon. Member for Aberavon (Dr. Francis), making a foray into the labour wards.
  The Bill is not directly about the treatment of patients, but it is about the creation of new organisations designed to improve the quality of health care in Wales. The key question that needs to be asked tonight and in Committee is, "Will these changes ultimately make a difference to patients in Wales?" That is the criterion by which any change of this kind must be judged.
  Conservative Members do not take issue with the overall nature of the organisations, but we think that important modifications need to be made to the detail of the Government's plans. The Bill concentrates too many powers in the hands of the Assembly and too few in the hands of communities and health care professionals. In Committee, we will want to put forward different ideas about how the organisations should operate. We also question whether the Bill risks creating unnecessary duplication at a time when the NHS in Wales has many other pressing priorities.
  At the heart of the Bill are the community health councils. The Bill marks an astonishing U-turn by Ministers, who are tonight heading in a direction diametrically opposed to the one that they took in the House only a few months ago. We Conservatives have always supported the role of the CHCs in providing a proper link between Focal communities and the NHS and in monitoring the effectiveness of the service that it provides, and until recently so did the Prime Minister. In 2000, his office wrote to his local CHC, praising its work and that of its counterparts. The letter said:
  "Tony would certainly like to add his congratulations to the work the CHCs have done over the last 25 years, and wishes them every success in the future."
  Only two years after that letter, CHCs have been abolished in England.
  We opposed the changes put forward by the Government earlier this year in the same way that we support tonight the retention of CHCs in Wales. Earlier this year, however, the Government told us that we were wrong. Indeed, we were lectured by the Parliamentary Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears), who said on 15 January:
  "We are all tempted to stick with what we know because it is comfortable and we have seen it in practice, but we must now push forward the boundaries and consider new ways of working to empower the public, too."—[Official Report, 15 January 2002; Vol. 378, c. 226.]
  How is it necessary to push forward the boundaries in England and not in Wales? The Secretary of State for Health put it even more strongly, telling the House:
  "No organisation has a God-given right to exist. Governments do not have a God-given right to exist. Community health councils do not have a God-given right to exist. MPs do not have a God-given right to exist."—[Official Report, 10 January 2001; Vol. 360, c. 1089.]
  Have Ministers had a vision on the road to Damascus? Here they are, a matter of months later, telling us that CHCs are the right way forward for Wales. Ten months ago, the Under-Secretary of State for Wales voted against Conservative amendments to
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  the National Health Service Reform and Health Care Professions Bill that would have retained community health councils in England. Tonight, he will vote in favour of community health councils. He cannot have it both ways—either CHCs are a good idea or they are not; they cannot be both.
  We welcome the U-turn and the plan to retain CHCs in Wales. Our concerns about the Bill centre on the provisions that allow the Assembly extensive controls over Welsh CHCs.
  Huw Irranca-Davies: Does the hon. Gentleman recognise that he has just paid a magnificent back-handed tribute to the good common sense of Welsh elected representatives? Furthermore, he might like to realise that we now have devolution.
  Chris Grayling: If the hon. Gentleman believes so strongly in CHCs, why have he and his colleagues deprived English patients of the right of representation by CHCs?
  To be effective, CHCs must be independent—that telling point was made by my hon. Friend the Member for Leominster (Mr. Wiggin). CHCs must be free to represent the interests of the communities and patients in the areas they cover. They do not exist to be controlled by politicians. The Government should not put as many powers into the hands of the Assembly as they are giving it in the Bill. The Assembly cannot be both provider and monitor of services—it cannot be both poacher and gamekeeper. During debates on these measures, our Conservative colleagues in the Assembly argued for a strong, independent organisation to co-ordinate the work of CHCs and to remove some of the prescriptive powers that the Bill would give to the Assembly.
  Lembit Öpik: Surely politics is different. Politicians who do not do a good job will lose their seats. We are talking not about trying to sell a service to the public but about being judged on the outcomes, so the poacher-gamekeeper analogy is not entirely valid.
  Chris Grayling: The Conservatives believe that the role of CHCs is to challenge what is happening within the NHS, and that, by definition, means challenging decisions taken by politicians who control the NHS. That is why it is so important that CHCs are a truly independent voice, not subject to undue controls placed on them by central Government.
  We need to ensure that Welsh CHCs are properly independent of political manipulation, which was mentioned by the hon. Member for Cardiff, Central (Mr. Jones). In Committee, we will table amendments to strengthen the role of CHCs and their independence from politicians. In an intervention, the hon. Gentleman called for better auditing of the outputs of the NHS in Wales. Given its poor performance, his words are especially important. They go to the nub of why we must ensure that CHCs have a powerful voice in the communities they seek to represent.
  Any assessment of NHS performance in Wales today does not make happy reading. The Secretary of State is right to say that spending per head in Wales has been much higher than the national average in recent years,

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  and the Wanless report highlighted the fact that Wales has more doctors per head of population than England, as well as shorter GP lists and higher prescribing rates. Despite that, by any objective judgment, the NHS in Wales is not delivering for patients what it should be delivering. That must be a priority for CHCs as they examine what is happening within the service. That is why it is important that the Bill gives them the freedom to do so.
  In reality, things are getting worse. In the past three years, waiting lists have been rising by 1,000 people a month. In the past five years, the number of people waiting more than 12 months for in-patient treatment has increased by 82 per cent. The number of people waiting more than 12 months for out-patient treatment has increased from just 378 five years ago to more than 36,000 today. In 1997, no one waited more than 18 months for such treatment; today, more than 16,000 people are waiting. That is nothing short of a scandal. Having heard the comments of the hon. Member for Brecon and Radnorshire (Mr. Williams), I say to him that those are real figures about real people waiting for real treatments, and those people deserve better. I would tell the hon. Member for Montgomeryshire (Lembit Öpik) that no hon. Member should feel proud of that situation, still less one who represents a party that is part of the Administration in Cardiff. We want CHCs to address those issues. As the hon. Member for Caernarfon (Hywel Williams) pointed out, they need to serve as metaphorical high explosive to make sure that there is real change for the benefit of patients.
  Lembit Öpik: I am sorry to interrupt the hon. Gentleman a second time, but I hope he agrees with other hon. Members that we are lucky to have a national health service at all. For all the difficulties that people experience in the NHS, surely he is not suggesting that we are not privileged in our standard of living and health provision.
  Chris Grayling: I find it distressing that at a time when more and more money is being spent on the service it is getting worse. None of us should be proud of that.
  Turning to the implementation of the proposals, we are concerned about the ability of the NHS in Wales to tackle a further round of organisational change when clinical targets are not being met and organisational plans appear to be in chaos, despite the fact that the NHS has been hiring administrators three times faster than doctors. In Committee, we must ensure that we do not add to the burdens that NHS management are already facing. My hon. Friend the Member for Ribble Valley (Mr. Evans) spoke about the problems caused by the latest set of Government reforms in Wales, the establishment of 22 health boards and the document leaked to the BBC a month ago questioning whether they would work at all. We are told that the cost of the changeover and the future operation of the system is still unknown; that the changeover may not happen on time; that the NHS in Wales cannot find enough applicants to fill key posts in organisations; and that there are real fears that the system for funding health care in Wales after April will be launched in chaos. All that will make the implementation of the Bill more difficult, so the
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  changes outlined and discussed tonight must be seen against the background of a system that is not working for patients and the dedicated staff who work long hours. That is the true priority for Welsh health Ministers.
  Turning briefly to other bodies covered by the Bill, we are concerned about possible duplication between the new Welsh bodies set up by the Bill and existing organisations elsewhere in the United Kingdom. For example, we are uncertain about the provision for the Wales Centre for Health to commission research into health matters in its own right. It would be foolish in the extreme to have a service commissioning research that is duplicated elsewhere in the United Kingdom.
  Mr. John Smith: Will the hon. Gentleman please recognise that some health issues are of greater concern in Wales than in other parts of the country? One group in Wales that will welcome the creation of the centre consists of the victims and families of victims of flight-related deep vein thrombosis. A higher proportion of people die and develop serious injury from that disease in Wales than anywhere else in the United Kingdom.
  Chris Grayling: The hon. Gentleman should realise that that condition affects people throughout the UK, which is precisely why we should ensure that resources in different parts of Britain are pooled for the maximum benefit of patients.
  We are also concerned about possible duplication between Health Professions Wales and organisations that the Government have established for the UK as a whole. Ministers need to ensure that those organisations work together effectively. In particular, they should not create different training and registration criteria for our health care professionals, thus making it difficult for them to work in one part of the UK after working in another. I hope very much that Ministers will exercise great caution on that score.
  The Bill is not controversial in itself, but it comes at a time when the NHS in Wales is in turmoil. It is failing to meet its clinical goals and, far from getting better, it is getting worse. It is tangled up in a major reform process that is also in turmoil, and huge amounts of work remain to be done if the transition next April is to occur without causing real problems to the people who work in the service. Welcome as some of the Bill's provisions are, welcome as the retention of CHCs is, the Bill will not help to tackle those problems. Too much of its detail leaves power in the hands of politicians, not communities and professionals. Conservative Members have argued for years that the reason why the NHS is not delivering the first-rate health care that patients deserve is that it is too centralised and prescriptive. Too many of the provisions before the House fall into the same trap and we will work to change them as the Bill continues its passage.
  The Government simply do not seem to understand that that centralised approach will not deliver the improvements that people want and need. Wales is the living example of what is wrong with their health policies. Spending in Wales is already much higher than the national average, but the NHS in Wales is heading backwards, and until the Government take on board the

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  real lessons from this situation, nothing that we discuss in the House will make the difference that people in Wales and elsewhere in the United Kingdom are hoping for.
  9.45 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): We have had a very good and constructive debate on the Bill.
  In summary, the Bill has three key elements: it provides a new role for reformed community health councils as the main vehicle for giving patients a greater say; it establishes the Wales Centre for Health to provide independent training, advice and research in health care; and it establishes Health Professions Wales to provide education and training to the health care professions.
  We have heard in the debate that the pre-legislative scrutiny process in which we have been involved has been very successful. Publication of the Bill in draft, including on our Wales Office website, has allowed thorough consideration in all policy areas. Here in the Commons, the Bill was considered by the Select Committee on Welsh Affairs and debated in the Welsh Grand Committee. In another place, peers met the Assembly's Minister for Health and Social Services, Jane Hutt, and me, and in the Assembly, the Bill was discussed in the Health and Social Services Committee and in plenary session. The extensive public consultation on the draft Bill has ensured that the most important people—the people who will be affected by the legislation; the people of Wales—have had an opportunity to contribute.
  Eighty-seven groups and organisations were invited to comment on the Bill, which was extensively scrutinised. We also published the Bill on the Wales Office website, which produced 15 responses, including an e-mail from a Mr. Liu Lieu, who runs a company in China and offered to sell us an excellent forging hammer. I think that something was lost in the translation.
  In total, that process produced 45 recommendations for changes to the draft Bill. It says much for the effort that was put into the original drafting that the Bill received widespread support from stakeholders and that none of the pre-legislative scrutiny revealed any major concerns about the principles of what was proposed. The amendments made to the Bill following the pre-legislative scrutiny were all minor and of a technical nature.
  The Bill has been in preparation for a long time in the sense that the proposals for reforming and retaining community health councils were first mooted by my hon. Friend the Member for Bridgend (Mr. Griffiths) in his first week after being appointed Minister with responsibility for health in Wales following the 1997 election of a Labour Government. Our reform agenda has been to reinvigorate and change community health councils in Wales. Thai has been universally accepted throughout the country, and the Welsh Affairs Committee helpfully contributed to that debate and expressed its support.
  What the Bill proposes for community health councils in Wales is an essential element for the Assembly's wider strategy of involving the public in health service planning and delivery and listening to their views and
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  concerns. The independence of community health councils in Wales is rightly cherished and we will ensure through the mechanisms in the Bill that they are independent and can deliver the services required by their communities.
  The establishment of the Wales Centre for Health originated in the "Better Health—Better Wales" document produced by the Wales Office in 1998. The foundations for creating the Wales Centre for Health were laid before devolution. The Government are now carrying them forward in partnership with the Assembly. In addition, the creation of the body that will oversee training and so on, Health Professions Wales, has been well-received and widely welcomed and will make an important contribution.
  The Government were unable to take on board some aspects of the recommendations. As hon. Members have referred to a couple of those issues, I think that I should also mention them. The seventh recommendation of the Welsh Affairs Committee was that the Bill be amended to allow community health council members a statutory right to time off work for public duties. Other respondents made the same comment. While the Government strongly sympathise and understand and fully support people's opportunity to serve on community health councils, after having reflected, we did not consider that the Bill was the appropriate measure or vehicle in that regard. The Employment Rights Act 1996 contains a list of bodies whose membership attracts statutory time off. It could be amended by order and we will give further consideration to approaching the relevant Secretary of State with that in mind.
  A ban on smoking in public places was a further suggestion from the Welsh Affairs Committee that we could not accept. After considering the proposal, we decided that such a measure was beyond the scope of the Bill and would entail creating a new public offence. A health Bill is not the proper vehicle for that.
  I want to comment briefly on the remarks made by as many hon. Members as possible. The hon. Member for Ribble Valley (Mr. Evans), who led for the official Opposition, welcomed the draft Bill but provided his usual litany of all the woes that he perceives in the NHS in Wales. He quoted two statements:
  "You have 24 hours to save the national health service",
  and
  "The National Health Service is safe in our hands".
  I accept ownership of the first on behalf of my party. We said that to the people of Britain, and they elected a Labour Government. However, the second statement was originally made by Baroness Thatcher when she was Prime Minister. She said that the NHS was safe in Tory hands. My right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) responded by saying that that was as encouraging as putting King Herod on the board of Mothercare.
  The hon. Gentleman also referred to the National Assembly's powers to make regulations. They will be exercised in the way prescribed by Assembly Standing Orders. Public consultation will take place before any regulations are made and I shall be happy to convey the Assembly's intention on each of the orders when we discuss the Bill in Committee, if that is helpful.

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  The hon. Gentleman spoke with some passion about nurse training. The Conservative Government cut the number of nurses and midwives in training by 25 per cent. in the mid-1990s and I am therefore not surprised that he is passionate about the matter. Those cuts led directly to the shortage of nurses that we inherited.
  I thank my hon. Friend the Member for Clwyd, South (Mr. Jones) for all the work that he and Welsh Affairs Committee undertook on pre-legislative scrutiny. He welcomed the Bill as a progressive measure and spoke about the opportunities that it would provide through its CHC provisions to respond to patients' voices in the health service.
  The hon. Member for Montgomeryshire (Lembit Őpik) said that the pre-legislative consultation had been successful. I thank him for correcting some of the points in the research paper that was produced in the House on the costs of the proposed reorganisation. He was worried about co-terminosity with regard to CHCs. There is provision for CHCs to work in federations. However, I understand that that would not work in his large constituency. The Bill and the Assembly's regulation-making powers have sufficient flexibility to deal with those points.
  My hon. Friend the Member for Ogmore (Huw lrranca-Davies) asked several questions to which I shall try to respond. He asked whether Health Professions Wales would have an input into the standards on overseas recruitment to ease assimilation. It may adopt functions from the Nursing and Midwifery Council only with the agreement of that body. That is a matter for Health Professions Wales when it is established.
  My hon. Friend also asked about extending the role of CHCs to examining health provision in prisons. The National Health Service Reform and Health Care Professions Act 2002 requires the Prison Service and prescribed NHS bodies to co-operate with the view of improving health care in prisons. We do not believe that CHCs have a role in that and the Bill does not make such provision.
  My hon. Friend and several other hon. Members raised matters about CHCs' cross-border operation. Powers for CHCs, including those to require information and undertake inspections, will be the same for CHCs in Wales as those that we gave patient forums in England in the National Health Service Reform and Health Care Professions Act 2002. The Bill's language will mirror that of the 2002 Act. That reciprocal arrangement is sensible and will work beneficially for all of us.
  The hon. Member for Leominster (Mr. Wiggin) said that he was disappointed that the Government had not responded more positively to the Welsh Affairs Committee report. It was debated thoroughly in the Welsh Grand Committee. We carefully considered the comments of the Welsh Affairs Committee and adopted several although not all their proposals. There was widespread consultation and the hon. Gentleman and anyone else who felt strongly about our responses could have contributed at the pre-legislative scrutiny stage.
  My hon. Friend the Member for Cardiff, Central (Mr. Jones), a former Wales Office Minister with responsibility for health, made important points about
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  choice, which underpins the aims of our NHS reforms. I share my hon. Friend's views about the independence of CHCs. Any monitoring, appraisal and inspection of the health service must be open and transparent and must be seen to be fully transparent.
  My hon. Friend referred to delayed discharges and bed blocking. I shall leave that to my colleagues who are dealing with the Community Care (Delayed Discharges etc.) Bill tomorrow. In response to the question whether the Bill could be amended to enable community health councils to investigate delayed discharges, I can tell my hon. Friend that I believe that the powers in the Bill are sufficient. Under paragraph 1(a) of schedule 7A, it is the duty of a CHC
  "to represent the interests in the health service of the public in its district".
  The powers that we will confer on CHCs will cover the point that my hon. Friend raised.
  The hon. Member for Caernarfon (Hywel Williams) said that patient power must be enabling. I agree. The thrust of our CHC reforms is intended to enable patients to exercise more power and influence on the health service. We must make sure that that works.
  My hon. Friend the Member for Cardiff, North (Julie Morgan) spoke about the developing roles of community health councils and put forward some interesting perspectives. I do not know whether she will serve on the Committee, but we can explore there the perspectives that she outlined in her comments this evening.
  The hon. Member for Brecon and Radnorshire (Mr. Williams) gave his wholehearted support to the Bill. I welcome that. The fact that he was able to do so stems from the fact that we had wide-ranging pre-legislative scrutiny, which enabled members of all political parties or of none to make a contribution to the way in which the reform should be structured. That is reflected in the Bill.
  My hon. Friend the Member for Gower (Mr. Caton) believed that the Welsh Affairs Committee did a good job on the pre-legislative scrutiny, and I agree. The Committee did an excellent job, which is a model for future pre-legislative scrutiny. He welcomed the partnership approach between the Government and the National Assembly for Wales. I have had the closest working partnership with my colleague Jane Hutt, the Assembly Minister for Health and Social Services. We have had the closest collaboration between my officials and hers, which is reflected in the strong support that we received throughout the pre-legislative scrutiny. This is how we are trying to take the agenda forward in Wales: the Government working in partnership with the Labour-led Assembly—the hon. Member for Montgomeryshire might care to note that—the Labour-led Assembly. That is proving beneficial for the people of Wales.
  My hon. Friend the Member for Aberavon (Dr. Francis) also welcomed the reforms to CHCs and gave some interesting and important historical

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  perspectives on how we had developed a democratic and a socialist health service as a result of the work of Aneurin Bevan.
  Mr. Roger Williams: The hon. Member for Aberavon (Dr. Francis) waxed lyrical about the support that the NHS was given by socialists, but does the Minister agree that it was conceived by a Liberal—Beveridge?
  Mr. Touhig: Nye Bevan was certainly no Liberal, and he was the architect of the national health service. We share that honour with no one.
  My hon. Friend the Member for Caerphilly (Mr. David) said that although the Bill was short, it was important and it would make a difference. I certainly agree. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) said CHCs in his area did good work and he wished to see their role develop, especially the advocacy role. We will see that develop, following the introduction of the Bill. My hon. Friend the Member for Wrexham (Ian Lucas) welcomed the pre-legislative scrutiny procedure and wondered whether it could he improved. I am sure that we will return to the matter later in our discussions. CHCs will have the power to inspect hospices, where they are delivering primary care. That is an important point to make.
  I thank all hon. Members who have taken part in the debate. I thank those who took part in the pre-legislative scrutiny, those in the Welsh Affairs Committee, the Welsh Grand Committee and colleagues in the National Assembly, who made an important contribution to our discussions in formulating the policy. As a result of the pre-legislative scrutiny, we have a better Bill now than we would otherwise have had, and that is a lesson for all of us. I remember a time when I had a private Member's Bill soon after coming to the House. If we had had pre-legislative scrutiny at that time, that piece of legislation might well have been improved.
  The Bill builds on the strategic framework put in place by the NHS Reform and Health Care Professions Act 2002, which was passed in the last Session. It gives patients in Wales a stronger role and a voice in the improvement, development and running of the health service in Wales, to which we are all committed, and changes the emphasis from treating disease to improving health in Wales. It supports the Welsh Assembly's drive to improve the health and well-being of people of Wales and delivers key elements of the Assembly's 10-year plan for the health service in Wales.
  This is an excellent example of the partnership that exists between the Government and the National Assembly. We have already achieved a great deal by working together, and I commend the Bill to the House and ask hon. Members to support its being given a Second Reading.
  Question put and agreed to.
  Bill read a Second time.

  HEALTH (WALES) BILL (PROGRAMME)
  Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 29 October 2002],
  That the following provisions shall apply to the Health (Wales) Bill:

  HEALTH (WALES) BILL (PROGRAMME)

    Committal
    1. The Bill shall be committed to a Standing Committee.
    2. The proviso in paragraph (2)(ii) of Standing Order No. 86 (Nomination of Standing Committees) shall not apply to the Bill.

    Proceedings in Standing Committee
    3. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 12th December.
    4. The Standing Committee shall have leave to sit twice on the first day on which it meets.

    Consideration and Third Reading
    5. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
    6. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the day on which proceedings on consideration are commenced.
    7. Sessional Order B (programming committees) made on 28th June 2001 shall not apply to proceedings on consideration and Third Reading.

    Other proceedings
    8. Any other proceedings on the Bill (including any proceedings on consideration of Lords amendments or any further messages from the Lords) may be programmed.—[Mr. Jim Murphy.]
    The House divided: Ayes 240, Noes 72.

    Division No. 10]

    [9:59 pm

    AYES

    Abbott, Diane

    Bryant, Chris

    Ainger, Nick

    Buck, Karen

    Ainsworth, Bob

    Burden, Richard

    Allen, Graham

    Burgon, Colin

    Anderson, Janet

    Burnham, Andy

    Armstrong, Hilary

    Byers, Stephen

    Atherton, Candy

    Caborn, Richard

    Austin, John

    Cairns, David

    Bailey, Adrian

    Calton, Patsy

    Baird, Vera

    Campbell, Alan

    Barnes, Harry

    Campbell, Ronnie

    Barron, Kevin

    Caplin, Ivor

    Battle, John

    Carmichael, Alistair

    Bayley, Hugh

    Casale, Roger

    Beard, Nigel

    Caton, Martin

    Beckett, Margaret

    Cawsey, Ian

    Begg, Anne

    Challen, Colin

    Benn, Hilary

    Chapman, Ben

    Bennett, Andrew

    Chidgey, David

    Benton, Joe

    Clapham, Michael

    Berry, Roger

    Clark, Lynda

    Best, Harold

    Clarke, Charles

    Betts, Clive

    Clarke, Tom

    Blears, Hazel

    Clarke, Tony

    Blizzard, Bob

    Clelland, David

    Borrow, David

    Clwyd, Ann

    Bradley, Keith

    Coaker, Vernon

    Bradley, Peter

    Cohen, Harry

    Bradshaw, Ben

    Colman, Tony

    Brake, Tom

    Connarty, Michael

    Brennan, Kevin

    Cook, Robin

    Brooke, Annette L.

    Corbyn, Jeremy

    Brown, Nicholas

    Cousins, Jim

    Brown, Russell

    Cranston, Ross

    423

    Crausby, David

    Humble, Joan

    Cruddas, Jon

    Iddon, Brian

    Cummings, John

    Illsley, Eric

    Cunningham, Jim

    Ingram, Adam

    Cunningham, Tony

    Irranca-Davies, Huw

    Davey, Valerie

    Jackson, Helen

    David, Wayne

    Jenkins, Brian

    Davidson, Ian

    Johnson, Alan

    Davis, Terry

    Jones, Helen

    Dawson, Hilton

    Jones, Jon Owen

    Dean, Janet

    Jones, Kevan

    Denham, John

    Jones, Martyn

    Dhanda, Parmjit

    Joyce, Eric

    Dismore, Andrew

    Kaufman, Gerald

    Dobbin, Jim

    Keen, Alan

    Dobson, Frank

    Keetch, Paul

    Doran, Frank

    Kemp, Fraser

    Doughty, Sue

    Khabra, Piara S.

    Drew, David

    Kidney, David

    Drown, Julia

    Kilfoyle, Peter

    Eagle, Angela

    King, Andy

    Eagle, Maria

    Kirkwood, Archy

    Ellman, Louise

    Kumar, Ashok

    Ennis, Jeff

    Ladyman, Stephen

    Etherington, Bill

    Lamb, Norman

    Fisher, Mark

    Lammy, David

    Fitzpatrick, Jim

    Lawrence, Jackie

    Flint, Caroline

    Laws, David

    Follett, Barbara

    Laxton, Bob

    Foster, Derek

    Lazarowicz, Mark

    Foster, Michael

    Lepper, David

    Foster, Michael Jabez

    Leslie, Christopher

    Francis, Hywel

    Levitt, Tom

    Gardiner, Barry

    Lewis, Ivan

    George, Bruce

    Lewis, Terry

    Gerrard, Neil

    Liddell, Helen

    Gibson, Ian

    Linton, Martin

    Gidley, Sandra

    Lloyd, Tony

    Gilroy, Linda

    Llwyd, Elfyn

    Godsiff, Roger

    Love, Andrew

    Goggins, Paul

    Lucas, Ian

    Griffiths, Jane

    Luke, Iain

    Griffiths, Nigel

    Lyons, John

    Griffiths, Win

    McAvoy, Thomas

    Grogan, John

    McCabe, Stephen

    Hain, Peter

    McCartney, Ian

    Hall, Mike

    McDonagh, Siobhain

    Hall, Patrick

    MacDonald, Calum

    Hamilton, David

    McDonnell, John

    Hamilton, Fabian

    MacDougall, John

    Hanson, David

    McFall, John

    Harris, Evan

    McIsaac, Shona

    Harris, Tom

    McKechin, Ann

    Harvey, Nick

    McKenna, Rosemary

    Havard, Dai

    Mackinlay, Andrew

    Healey, John

    McNamara, Kevin

    Henderson, Doug

    McNulty, Tony

    Henderson, Ivan

    Mactaggart, Fiona

    Hendrick, Mark

    McWilliam, John

    Hepburn, Stephen

    Mahmood, Khalid

    Heppell, John

    Mallaber, Judy

    Hesford, Stephen

    Marris, Rob

    Heyes, David

    Marsden, Gordon

    Hill, Keith

    Marshall, David

    Hinchliffe, David

    Marshall, Jim

    Hodge, Margaret

    Marshall-Andrews, Robert

    Holmes, Paul

    Martlew, Eric

    Hoon, Geoffrey

    Meacher, Michael

    Hope, Phil

    Meale, Alan

    Hopkins, Kelvin

    Merron, Gillian

    Howarth, Alan

    Miller, Andrew

    Howarth, George

    Mitchell, Austin

    Howells, Kim

    Moffatt, Laura

    Hoyle, Lindsay

    Mole, Chris

    Hughes, Beverley

    Moonie, Lewis

    Hughes, Kevin

    Moran, Margaret

    424

    Morgan, Julie

    Smith, Andrew

    Mountford, Kali

    Smith, Chris

    Mudie, George

    Smith, Geraldine

    Mullin, Chris

    Smith, Jacqui

    Munn, Meg

    Smith, John

    Murphy, Denis

    Smith, Robert

    Murphy, Paul

    Soley, Clive

    Naysmith, Doug

    Southworth, Helen

    Norris, Dan

    Spellar, John

    O'Brien, Bill

    Squire, Rachel

    O'Hara, Edward

    Starkey, Phyllis

    Olner, Bill

    Steinberg, Gerry

    O'Neill, Martin

    Stevenson, George

    Őpik, Lembit

    Stewart, David

    Osborne, Sandra

    Stewart, Ian

    Palmer, Nick

    Stinchcombe, Paul

    Pearson, Ian

    Stoate, Howard

    Picking, Anne

    Stuart, Gisela

    Pickthall, Colin

    Stunell, Andrew

    Pike, Peter

    Sutcliffe, Gerry

    Plaskitt, James

    Tami, Mark

    Pollard, Kerry

    Taylor, Dari

    Pond, Chris

    Taylor, David

    Pound, Stephen

    Taylor, Richard

    Prentice, Bridget

    Thomas, Gareth

    Prentice, Gordon

    Thomas, Gareth

    Prescott, John

    Thomas, Simon

    Price, Adam

    Thurso, John

    Primarolo, Dawn

    Timms, Stephen

    Prosser, Gwyn

    Tipping, Paddy

    Pugh, John

    Todd, Mark

    Purchase, Ken

    Touhig, Don

    Purnell, James

    Trickett, Jon

    Quin, Joyce

    Truswell, Paul

    Rammell, Bill

    Turner, Desmond

    Rapson, Syd

    Turner, Neil

    Reed, Andy

    Twigg, Derek

    Reid, Alan

    Twigg, Stephen

    Rendel, David

    Tyler, Paul

    Robertson, John

    Tynan, Bill

    Robinson, Geoffrey

    Vaz, Keith

    Walley, Joan

    Roche, Barbara

    Ward, Claire

    Rooney, Terry

    Wareing, Robert N.

    Ross, Ernie

    Watts, David

    Roy, Frank

    White, Brian

    Ruane, Chris

    Wicks, Malcolm

    Ruddock, Joan

    Williams, Alan

    Russell, Bob

    Williams, Hywel

    Russell, Christine

    Williams, Roger

    Ryan, Joan

    Wilson, Brian

    Sanders, Adrian

    Winnick, David

    Sarwar, Mohammad

    Woodward, Shaun

    Savidge, Malcolm

    Woolas, Phil

    Sawford, Phil

    Worthington, Tony

    Sedgemore, Brian

    Wray, James

    Shaw, Jonathan

    Wright, Anthony D.

    Sheerman, Barry

    Wright, Tony

    Sheridan, Jim

    Wyatt, Derek

    Short, Clare

    Simon, Siôn

    Tellers for the Ayes:

    Simpson, Alan

    Mr. Jim Murphy and

    Skinner, Dennis

    Charlotte Atkins

    NOES

    Atkinson, Peter

    Chope, Christopher

    Bacon, Richard

    Clarke, Kenneth

    Baldry, Tony

    Clifton-Brown, Geoffrey

    Beggs, Roy

    Davis, David

    Bercow, John

    Dodds, Nigel

    Blunt, Crispin

    Donaldson, Jeffrey M.

    Boswell, Tim

    Dorrell, Stephen

    Burnett, John

    Evans, Nigel

    Burt, Alistair

    Flight, Howard

    Cameron, David

    Flook, Adrian

    Campbell, Gregory

    Forth, Eric

    425

    Fox, Liam

    O'Brien, Stephen

    Gillan, Cheryl

    Ottaway, Richard

    Goodman, Paul

    Page, Richard

    Gray, James

    Paisley, Ian

    Grayling, Chris

    Pickles, Eric

    Green, Damian

    Robertson, Hugh

    Grieve, Dominic

    Robertson, Laurence

    Gummer, John

    Robinson, Iris

    Hammond, Philip

    Robinson, Peter

    Hayes, John

    Rosindell, Andrew

    Heald, Oliver

    Sayeed, Jonathan

    Hermon, Lady

    Simpson, Keith

    Hogg, Douglas

    Smyth, Martin

    Howard, Michael

    Spring, Richard

    Howarth, Gerald

    Swayne, Desmond

    Knight Greg

    Syms, Robert

    Lewis, Julian

    Trend, Michael

    Liddell-Grainger, Ian

    Tyrie, Andrew

    Lidington, David

    Watkinson, Angela

    Lilley, Peter

    Whittingdale, John

    Luff, Peter

    Wiggin, Bill

    McIntosh, Anne

    Yeo, Tim

    Maclean, David

    Young, George

    McLoughlin, Patrick

    Mates, Michael

    Tellers for the Noes:

    Mercer, Patrick

    Mr. David Wilshire and

    Murrison, Andrew

    Mr. Mark Francois

    Question accordingly agreed to.
    10.13 pm
    Dr. Julian Lewis: On a point of order, Mr. Speaker. Did you notice, during the vote, a senior Cabinet Minister walking the length of the Chamber, presumably on her way to vote, clutching a mobile phone to her ear? Is that appropriate behaviour from any hon. Member, let alone a senior Cabinet Minister?
    Mr. Desmond Swayne: Further to that point of order, Mr. Speaker. You will recall, because I wrote to you a fortnight ago, that on Friday a couple of weeks ago an hon. Member entered the Chamber, sat just below the Gangway and sought to be called wearing a pair of jeans. Surely there must be a limit to modernisation.
    Mr. Speaker: That matter did not arise today. The hon. Gentleman wrote to me, and when hon. Members write to me I deal with their complaints. So I have dealt with that matter.
    I say to the hon. Member for New Forest, East (Dr. Lewis) that no hon. Member should come into the Chamber with their mobile phone. All mobile phones should be switched off before they come into the Chamber and no one should be in conversation on a mobile phone. I certainly hope that note is taken of the hon. Gentleman's complaint.

  HEALTH (WALES) BILL [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with Bills),
  That, for the purposes of any Act resulting from the Health (Wales) Bill, it is expedient to authorise the payment out of money
  426
  provided by Parliament of any increase attributable to the Act in the sums payable by virtue of any other Act out of money so provided.—[Derek Twigg.]
  Question agreed to.

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

    CONTRACTING OUT
    That the draft Contracting Out (Functions in Relation to Applications for Patents) Order 2002, which was laid before this House on 5th November, in the last Session of Parliament, be approved.—[Derek Twigg.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118 (6)(Standing Committees on Delegated Legislation),

    LEGAL SERVICES
    That the draft Access to Justice Act 1999 (Solicitors' Practising Certificates) Order 2002, which was laid before this House on 13th November, be approved.—[Derek Twigg.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6)(Standing Committees on Delegated Legislation),

    HEALTH CARE AND ASSOCIATED PROFESSIONS
    That the draft Medical Act 1983 (Amendment) Order 2002, which was laid before this House on 14th November, be approved.—[Derek Twigg.]
    Question agreed to.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

    NORTHERN IRELAND
    That the draft Local Government (Miscellaneous Provisions) (Northern Ireland) Order 2002, which was laid before this House on 15th November, be approved.—[Derek Twigg.]
    Question agreed to.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at the sitting on Monday 2nd December,

  (1) proceedings on the Motion in the name of the Reverend Ian Paisley shall lapse, if not previously concluded, at Seven o'clock or three hours after they have been entered upon, whichever is the later, and paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to them as if the day were an Opposition Day; and

  (2) the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of the Prime Minister relating to the Convention on the Future of Europe not later than three hours after they have been entered upon, and the proceedings may continue after the moment of interruption.—[Derek Twigg.]

  PETITIONS

    Israel
    10.16 pm
    Fiona Mactaggart: It is a privilege to present to the House a petition signed by more than 700 residents of Slough. In the letter that accompanies the petition, the organiser, Mr. Baig, urges us to change what he calls
    "the immoral and inappropriate stance the Government has taken by not coming out clearly to condemn the continuous Israeli occupation and its failure to support the oppressed people of Palestine with any practical means beyond futile rhetoric".
    The petition states:
    The petition of residents of Slough and others
    Declares that Palestinians are victims of brutalities committed by Israeli security forces and that the British Government is a silent bystander in the face of such war crimes.
    The Petitioners therefore request that the House of Commons urge the Government to take steps to prevent war crimes against innocent and defenceless Palestinians.
    To lie upon the Table.

    Consumers for Health Choice
    10.17 pm
    Ian Stewart: This petition is presented by Mr. Michael Grace of the Village Health Food store in Eccles and his customers. I have been a customer of that store for many years.
    The petition states:
    The petition of—Consumers for Health Choice and its supporters,
    Declares that—consumers in the United Kingdom have for many years maintained good health by choosing to take safe vitamin and mineral supplements and herbal remedies; and fears that the European Food Supplements Directive and the proposed European Directive on Traditional Herbal Medicinal Products would severely restrict the number and range of such products on general retail sale in the future.
    The petitioners therefore request that the House of Commons—requires that the Secretary of State for Health does all in his power to protect the rights of UK consumers by ensuring that such European legislation does not unnecessarily and unacceptably restrict the availability of natural health products.
    To lie upon the table.
    10.18 pm
    Mr. David Cameron: I have great pleasure in presenting two petitions. The first follows on exactly from the previous one. It has been given to me by Mr. Brigh of the Bean Bag health store in Witney.
    The petition has 1,100 signatures. The petition states:
    428
    Consumers in the United Kingdom have for many years maintained good health by choosing to take safe vitamin and mineral supplements and herbal remedies; and fears that the European Food Supplements Directive and the proposed European Directive on Traditional Herbal Medicinal Products would severely restrict the number and range of such products … in the future.
    The petitioners therefore request that the House of Commons requires the Secretary of State for Health does all in his power to protect the rights of UK consumers by ensuring that such European legislation does not unnecessarily and unacceptably restrict the availability of natural health products.
    To lie upon the Table.

    Cotswold Railway
    10.19 pm
    Mr. David Cameron: The second petition that I have to present was put together by Frances Short on behalf of residents of west Oxfordshire and it calls for improvements to the Cotswold railway line, a subject close to my heart.
    The petition states:
    To the House of Commons:
    The petition of residents of West Oxfordshire declares that an infrastructure upgrade is required to reduce delays and produce and hourly service on the Cotswold Railway line.
    The petitioners therefore request that the House of Commons requires the Strategic Rail Authority, the train operating companies and the local councils to fund an infrastructure upgrade on the Cotswold line.
    And the petitioners remain, etc.
    To lie upon the Table.

    Consumers for Health Choice
    10.20 pm
    Mr. Paul Tyler: The petition that I have the pleasure to present is on behalf of 320 constituents in and around the comparatively small town of Bude. It is a relatively small community, and that is why the number is very significant.
    The petition states:
    To the House of Commons
    The Petition of Consumers for Health Choice and its supporters declares that consumers in the United Kingdom have for many years maintained good health by choosing to take safe vitamin and mineral supplements and herbal remedies; and fears that the European Food Supplements Directive and the proposed European Directive on Traditional Herbal Medicinal Products would severely restrict the number and range of such products on general sale in the future.
    The petitioners therefore request that the House of Commons requires that the Secretary of State for Health does all in his power to protect the rights of UK consumers by ensuring that such European legislation does not unnecessarily and unacceptably restrict the availability of natural health products.
    And the petitioners remain, etc.
    To lie upon the Table.

  Pre-schools
  Motion made, and Question proposed, That this House do now adjourn.—[Derek Twigg.]
  10.21 pm
  Mr. David Cameron: I am delighted to have this opportunity to raise an issue of growing concern in my constituency, and I expect in the constituencies of many other hon. Members.
  I was slightly surprised to be told that the Minister responding to the debate on behalf of the Government would be the Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle). I mean no disrespect to her, as I know that she is diligent and effective—and I am looking forward to hearing her response. However, I am raising the problem of the huge bureaucratic burdens faced by pre-schools, many of which are imposed by the Department for Education and Skills. How can a Minister who does not sit in that Department really help to put that right?
  I am talking about children under five, and some of them are as young as two. Even in this Prime Minister's Britain, none of them works and certainly none of them has a pension. There are five Education Ministers in the House of Commons. One of them, the Minister for School Standards, the hon. Member for South Shields (Mr. Miliband), is meant to have a brain the size of a football pitch. Surely he could dedicate just one part of it to pre-schools. However, although I look forward to the answer, I suspect that it will be that this is "partnership working between Departments" or even, heaven help us, "joined-up Government". If it is, I am not sure yet that I am in favour of it.
  Pre-schools and nurseries in my west Oxfordshire constituency provide a magnificent service for children, parents and the wider community. The Government often talk about the need for diversity and choice. This is the one area in education where we already have it. There are, as it were, a thousand points of light—some provided by the state, some are private and some voluntary, and many are collaborations between parents and supervisors.
  As Sue Harrison, of the fabulously named Blackditch Bunnies pre-school in Stanton Harcourt, explained:
  "The culture of pre-schools is rooted in parental involvement and community spirit, not central control."
  I have been hugely impressed by what I have seen in Witney, North Leigh and elsewhere in my constituency—dedicated staff, contented parents and children getting a first-class foundation to their education.
  So why the need for this short debate? I want to raise two important concerns. First, it is quite clear that the pre-school sector is suffering from over-regulation. Some of the best providers are in danger of being strangled by the red tape. Angela Buckingham of North Leigh nursery told me that she comes close to
  "spending more time with the paper than with the children."
  Linda Trigg of Cherubs in the Wychwoods says that she is too often
  "taken away from childcare because I am filling in the forms".
  430
  Sue Moore, from the Farm House nursery in Witney, told me that eight and half years ago, when she set up her nursery, she spent two hours a week on paperwork. Now it is every day, and sometimes all day. As she put it:
  "They want you to justify every time you sneeze."
  There are a number of specific areas that are causing this problem. Ofsted inspections have replaced social service inspections. They are much more paper based and they take place, in most cases, every year. Primary schools, by contrast, are not inspected so frequently. The response can take months. One pre-school inspected this January has still not received a written response.
  Mr. Richard Bacon: I wonder whether it will surprise my hon. Friend to learn what happened to my constituent Anne Beckwith, proprietor of the Discovery nursery in Diss, when she was trying to set up the nursery. Several months after she had completed all the paperwork that Ofsted had asked her to complete, several months after she had answered all the questions and, indeed, several months after being told by Ofsted that she had fulfilled all its requirements, she still could not get the go-ahead. Will my hon. Friend join me in urging the Government to look seriously at Ofsted's procedures, which are clearly too bureaucratic?
  Mr. Cameron: I am delighted to hear my hon. Friend say that, because it accords with the thrust of what I am saying. It is all taking too long, the burden is too heavy, and as a result we are in danger of losing some very good pre-school facilities.
  Pre-schools have to draw up dozens of policies and procedures. Although some may have only 20 or so children, they are required to have—at the last count—20 policies and four procedures, including policies on record keeping, equal opportunities, behaviour management and much else.
  Another subject that arises time and again in conversation with supervisors and staff at pre-schools is child profiles. I know that they are necessary, but they currently run to 16 pages per child, and some pre-schools do not find them particularly useful. The preschool in Stanton Harcourt that I mentioned runs its own system alongside the official one. Every supervisor to whom I have spoken agrees that all the profiles could be slimmed down without child safety or protection being affected. Of course pre-schools must be equal opportunities employers, and of course they must have regard to such things as safety, but would not a single brief statement outlining the position be sufficient, rather than a myriad? I ask the Minister to tell the Department to consider its own role in creating much of all that paper.
  There is also a degree of doubling up. Much of the form filling is so that pre-schools can become accredited. Many of the smaller pre-schools want that status because they do not want to be seen as second class; but they ask whether, if they are inspected by Ofsted, that is not enough. I would be grateful if the Minister could look at that specifically.

  431
  Sue Harrison wrote a very good letter to The Independent. I do not always read The Independent, so I do not know whether it was published, but this is what she said:
  "The new accreditation process has just been one huge paper chase to prove ourselves in print. And we have to endure annual inspections when schools only have one every five years. My committee, all of whom are unpaid and are busy working mums, can't cope with it all. The staff are the only people trained to deal with it but I am paid £3,500 a year to work 12 hours a week, not the 24 which I am working at the moment to keep all those forms filled in … Just how has this paper mountain improved the children's learning and well being? I can't think of one instance. Our Ofsted health and safety check was a pale shadow of the disbanded Social Services one. The inspector seemed only interested in the contents of our bulging documents cupboard."
  The supervisors to whom I spoke singled out Ofsted for its habit of using four pages when just one would do. Adrienne Willsdon, the supervisor of Kiddiwinks nursery in Charlbury, said that the registration forms from Ofsted were like booklets, when in fact the name, address, contact details and basic information about the child were all that was really required. The paperwork is not just a burden on staff; it has a knock-on effect on funding and on governing bodies or parents' committees.
  Many pre-schools have no funds for a computer, but how can they be expected to draw up policies, operational plans and the like without one? What happens is that that is done by the supervisor or the committee secretary on his or her own computer at home. If, by some unhappy chance, they leave, much of the information may be lost for good. All that is deterring parents from taking part. One supervisor told me:
  "The nature of meetings has totally changed. It used to be discussing the rota for the cake stall and whether the hall needed painting, now it is composing policies and forms for which the committee don't see the need."
  The types of paperwork, the forms and the bureaucracy keep changing. The principal teacher of St Hugh of Lincoln nursery school in Curbridge told me:
  "We fill in the forms, get it all organised … and then we have to start all over again."
  The second issue I want to raise is the concern that has been expressed about a proposal that all four-year-olds should go to primary school at a single point of entry. Although the proposal comes from the Oxfordshire local education authority, I understand that it is in line with Government thinking on the foundation stage. The LEA, which has, as ever, been helpful in answering my questions, listed a number of advantages, including the belief that the approach would
  "give greater parity of entitlement to all children in the reception year."
  Having listened to the views of many pre-schools, I fear that it could have harmful effects, particularly for provision in my very rural constituency.
  Many of the pre-schools in west Oxfordshire are small. Without the four-year-olds, the pre-schools in some villages may not survive. If that happens, valuable provision for children of two and a half and three would be lost altogether. One pre-school representative was quite frank, saying that if four-year-olds were absorbed
  432
  into the school, the loss of funding would kill the pre-school without any doubt. Another pointed out that had the policy been in place last year, 20 out of the 30 children would have left in one go, threatening the viability of the pre-school. The Farm House nursery in Witney said that it might lose half of its 28 children. It said that there simply are not enough children of two and a half and three to go round. Pre-schools and nurseries could close. That could have knock-on effects on other provision in our villages.
  A letter from the Finstock village hall committee makes the point about the Woodpecker pre-school, which shares its facilities:
  "Insufficient consideration has been given to the viability of pre-school groups and the income of village halls, once children are admitted to the school from the age of four."
  I accept that pre-schools are not unanimous about this. Some that I have spoken to, particularly in one or two of the larger villages, believe that they will be able to cope with the change. There is also the question of whether the smaller village primary schools will be able to manage with the change once it has taken place.
  As a briefing note sent to me by David Smith, the private sector representative on Oxfordshire's early years development and child care partnership puts it, these schools
  "are unlikely to be able to make specific provision for younger four year olds either due to the limitations of their premises or because the number of children would not justify it. If younger four year olds are admitted to such schools they are likely to be taught in a mixed age reception class totally unsuited to their needs."
  He concludes that
  "children in rural areas will be further disadvantaged and admission to quality provision will become a lottery."
  The LEA is clear that
  "a change in admissions policy would create greater choice for parents, and create capacity for children to have their full entitlement in communities where there is currently insufficient provision."
  I fear that in rural areas the exact opposite might happen and that there will be less choice and less capacity. The LEA says that such a change will
  "end the long standing problem of Oxfordshire's primary admission arrangements being out of line with its geographical neighbours".
  Arguments in favour of tidiness are never the strongest.
  I know that it will be argued that parents have a choice. Yes, they do—no child has to go to school before the age of five. However, in the case of popular village schools, parents will always be nervous that if they do not take what is on offer when their child is four, they will miss the boat altogether. That point was made by one of the governors of the ACE centre at Chipping Norton during the public consultation.
  I urge caution in this area and look forward to what the Minister has to say about the Government's view on the difficult issue of the age at which it is right for children to go to school. The proposal for the single point of entry for four-year-olds opens up the debate on what sort of provision is right for children. I tread carefully here—I am no expert. I have just the one child, and he is only seven months old. However, the points that have been made to me about whether the quality of provision in primary schools will be as good as what is on offer in dedicated pre-schools are worth making.

  433
  Sue Gibson from the Daffodil nursery in Long Hanborough, among others, expressed some concerns. The first is over staffing levels. In pre-schools, the supervisor-to-child ratio tends to be 8:1; in primary schools it is more like 13:1, with classes of 26 run by a teacher with a learning support assistant.
  The second concern is over content. Pre-schools are experts in learning through play. Of course, primary schools that do not have early years provision will be able to develop it. However, there is a danger of reinventing the wheel or—to mix my metaphors and find a more appropriate one—throwing the baby out with the bath water.
  The third concern is whether primary schools can cope with all the needs of four-year-olds. As many supervisors have told me, some four-year-olds are ready for school, while others still need nurturing more than teaching. Maggie McClay, from St. Peter's nursery in Filkins in my constituency, made this point with real concern. In small schools, will they have to share classes with older children? How will that work? Will children be moved too quickly into years one, two and three?
  Another need that most pre-schools and nurseries can provide, but not all primary schools do, is access to outside space. A meeting was held in Witney on 8 October by the LEA to consult about this. I have a copy of the minutes. One pre-school supervisor who was there told me that, interestingly, none of the primary school representatives from west Oxfordshire who attended the meeting welcomed the change, and the minutes seem to bear that out. I know that this is a difficult issue and the LEA is still thinking about it. From what I have heard—and I have spoken to as many pre-schools and nurseries as possible in the past two days—the case for change is still to be made.
  I would like to end with one further plea. Although pre-schools and nurseries do a wonderful job, as I hope I have demonstrated, they are often short of money for buildings. The LEA has told me that Oxfordshire received £220,000, this year and next, to increase capacity for the whole county. That is only likely to be enough for one project in each area. Clearly, if we are to embark on the huge change of providing a single point of access for all four-year-olds, there will be an enormous need for new facilities. That is why I say that it may be better not to change.
  Many pre-schools still have to move heaven and earth to raise funds. One project with which I have been helping, the Little Oak pre-school in Witney, has a temporary classroom that is rotting away. We have had no help from anybody, but we have managed to find a construction company, Persimmon, which has given us another second-hand building. I thank it for its generosity; it is great that a company is doing something for a community like that.
  The building is just the start, however. It must be transported, made ready and kitted out. The parents and teachers working on this project have shown incredible dedication. Their reward, and the reward of all who work in this vital sector, should be congratulation and support from both central Government and the LEA. I fear that, at present, those involved in pre-schools are instead suffering from over-regulation and change that may not only be unnecessary but damaging.
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  I want to end by quoting again from Sue Harrison's letter about her experience in the Blackditch Bunnies pre-school in Stanton Harcourt:
  "Many fellow supervisors have left the profession to work at something better paid (like shelf stacking) and less hard work … and who in their right mind would volunteer to be on a committee now? Soon rural pre-schools will implode and leave millions of young children and their mums with nowhere to play and no one to talk to."
  I beg the Minister to recognise that when we have a sector that demonstrates such diversity, such inventiveness and such a high standard of care, we should do what we can to nurture it rather than damage it.
  10.37 pm
  The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): First, I want to congratulate the hon. Member for Witney (Mr. Cameron) on securing this debate on the important issue, as his speech demonstrated, of how we provide best for our young children before they have to attend school.
  The hon. Gentleman started his remarks with a gentle suggestion that I might not be the appropriate Minister to deal with these issues. I want to start by assuring him that he is not being short-changed by having me answering his debate. I am not doing any of my colleagues from the Department for Education and Skills a favour of any kind. I am the Minister in the House of Commons who deals with sure start, early years and child care. That recent change was announced at the time of the spending review, along with many other announcements, so I do not criticise him for not spotting it.
  The hon. Gentleman may be aware of the review across Government into this subject, which took a year, the results of which were published on 6 November. He may have seen those results, but, if not, I commend them to him. One of the findings of the review in terms of machinery of government was that it would be more sensible to join up—that hideous phrase—some of the work that is done across Departments in respect of the early years, early development and health of young children. As a consequence, my noble Friend Baroness Ashton was asked to lead an inter-departmental unit dealing with all of those issues. She is the lead Minister—she is a Minister in both the Department for Education and Skills and the Department for Work and Pensions—but, as she is in another place, she cannot answer debates in this place. Consequently, somebody else must answer in this place, and I am that person.
  The hon. Gentleman made two major points, and he illustrated, partly through their wonderful names, the diversity of the nurseries and pre-schools in his constituency.
  The hon. Gentleman's first point was about what he described as over-regulation in the pre-school sector. He quoted some of his constituents who work in that sector and who have complained about spending more time with paper than with children. We obviously take that concern seriously. It is not the aim of Government to bury teachers or pre-school staff in paperwork. That is not the main job that they seek to do or the main job that we want them to do. They have a legitimate concern that

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  paperwork will take them away from their primary function of caring for and looking after the development and needs of young children, but it is not in the Government's interest to increase the amount of paperwork and restrict the teaching and child care that take place.
  We are sympathetic to such concerns. Although we cannot control every piece of paper that the staff might be expected to fill in, we have responsibility for some of it. However, the hon. Gentleman must bear in mind that the regulatory processes of registration and inspection operated by Ofsted require some form filling. The Government do their best to ensure that that is simplified and that the forms deal with what is necessary. We do not want their number to expand just for the sake of it.
  The hon. Gentleman referred to child profiles that were 16 pages long and that had to be filled in for every child. There is certainly no requirement for profiles to be of a particular length, but pre-schools must keep records on their children's progress. I hope that he does not think that such a requirement is unnecessarily bureaucratic. The profiles can be simple and straightforward, and 16 pages seem to be excessive. However, there is no requirement for the profiles to be of that length, so I hope that the example that he cited did not arise out of a central Government diktat that meant that the profiles had to be of a particular length and overly burdensome.
  The regulatory processes are there to ensure quality and safety, so there must be a proper balance between the amount of the paperwork required and its purposes. If we get the balance right, I hope that no one will complain about having to do some paperwork. It is not the Government's intention that excessive paperwork should drive people out of the business of looking after children or providing pre-school care.
  Mr. Bacon: No one would dispute the need for balance. However, does the Minister accept that, when proprietors have filled in all the paperwork, have been told that they have met all the requirements but still cannot get the go-ahead for their plans, there is something about the bureaucratic processes of Ofsted that must be seriously examined?
  Maria Eagle: I shall say something about Ofsted. It has a role in regulation and in ensuring that children are safe and well looked after and that the premises are safe and suitable. It provides the quality checks that parents require before they decide to leave their children in particular places or under the care of particular organisations. Parents must be sure that the places where they leave their children are safe and have proper standards. Taxpayers' money is used to fund elements of early-years provision so it is right for the House to expect the money to be properly used and accounted for so that we obtain value for money and proper quality and care. That is why the regulations exist.
  As I have said, there must be a proper balance. Ofsted took over responsibility for child care registration and inspection from local authorities only last September. That has some advantages in the sense that pre-schools
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  now have to work to only one set of standards. Before that, there were 150 sets of standards that varied from local authority to local authority and their interpretation of the requirements differed. We are bringing together the requirements into a national standard that should make it clearer and easier to meet them. The system is settling down but I say to the hon. Member for Witney and to those who take an interest in the subject that we want to ensure that it settles down properly. We certainly do not intend to impose more regulatory burdens, red tape and form filling than is absolutely necessary to meet the legitimate concerns of Government, parents and taxpayers.
  The hon. Gentleman said that it was a requirement that all four-year-olds should go to primary schools at a single point of entry. He also made it clear that some of the changes considered in Oxfordshire have been proposed by the LEA. That is therefore a matter for the LEA, not the Government. If we told each LEA what to do, he would no doubt raise that in a debate on how Whitehall is trying to micro-manage bits of his constituency.
  I am aware of the fact that the hon. Gentleman's LEA proposes to change admission arrangements for primary schools. He gave some of its reasons for that and he is rightly attending constituency meetings about it. The LEA proposes to move from a three-point entry of admission to a reception class to a single point of entry. It wants to do that for various reasons, some of which the hon. Gentleman mentioned. The Government do not have a preferred best way of doing that. We laid the schools admission code of practice before the House on, I think, 15 November. The hon. Gentleman will find it useful for discussions with his LEA because it sets out the Government's suggestions.
  It is for the admissions authority in the first instance to produce policies and it must consult. The consultation process in Oxfordshire has been going on for, I think, a couple of years. No one could argue that the authority is jumping to conclusions. There has been an extensive consultation, which is how it should be, and I understand that it will reach some conclusions in the new year.
  The Government are fully committed to parental choice in early-years education. We are not telling authorities like the LEA in the hon. Gentleman's area that it should have a single point of admission. That is a matter for the local area to decide on after consultation. If a single point of admission is accepted, I do not deny that some parents will feel under pressure to transfer their children from pre-schools to schools, as the hon. Gentleman said.
  The schools admission code of practice encourages admission authorities to allow parents to secure a place at a school of their choice and to defer entry. That should deal with some of the problems raised. Some authorities already do that. I am sure that Oxfordshire will consider all the issues before it comes to its conclusions. The policy suggested in the code of practice should alleviate some of the pressures on parents to get their children into a particular nursery at a particular time rather than leaving them in the pre-school.

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  Our aim is to ensure that provision enables local parents to choose what is best for their child. What is good for one child might not be good for the child next door, and we are trying to ensure that local authorities provide diversity.
  Mr. Cameron: I am listening carefully. Does the hon. Lady accept the link between over-regulation, which is driving some of the small voluntary pre-schools to the wall, and the move to send more four-year-olds to primary schools, which are better able to cope with the regulatory burden? Perhaps she would like to visit one of those voluntary pre-schools with me to see the paperwork. My plea is that the Government do not crush those wonderful little gems because we will very much regret losing them.
  Maria Eagle: The Government are certainly not interested in crushing gems. We are trying to promote and nurture diversity and choice for parents. I do not accept that the regulatory burden is driving schools to close. I hope that the hon. Gentleman accepts that the Government have an obligation to ensure safety and quality. These are, after all, places where parents leave their very young children; they need assurance about these issues and it is the Government's responsibility to make sure that they get it. Of course we are always willing to try to reduce the volume of paper. As I said, I think that there are misconceptions about what is
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  required because the Ofsted regime is relatively new, and is bedding in, and we all need to learn lessons about that.
  The hon. Gentleman referred to struggling preschools. I shall not deny that some pre-schools have struggled to exist, and some have closed, for a variety of reasons. We have, as the hon. Gentleman said, seen a steady shift in the balance of child care provision, away from playgroups and pre-schools towards the full day-care that parents want when they work full-time. We are encouraging pre-schools and playgroups to expand their services wherever possible and to provide child care over extended hours.
  We have allocated £6 million of capital funding to help with such conversion—£3 million this year and £3 million next year. The additional funding from the spending review doubled provision for child care and early-years education. Overall then, funding in this field is increasing. I hope that the hon. Gentleman will accept that although that does not always trickle down into every little school in every little village, we are doing our best to ensure that there is diversity and choice.
  We have no interest in trying to squeeze all pre-school and early-years provision into one nationally recognised and Government-preferred option, and we are not doing so. We are trying to encourage diversity and choice because that is what parents want and, in the end, that is what is best for our children.
  Question put and agreed to.
  Adjourned accordingly at nine minutes to Eleven o'clock.

Preamble
[SIR ALAN HASELHURST in the Chair]

Equitable Life
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Jim Murphy.]
9.30 am
Dr. Vincent Cable: I am grateful for the opportunity to introduce this debate on Equitable Life. Today's debate is the third on the subject, but I make no apologies for returning to it. The company has about 800,000 policyholders, many of whom have suffered severe loss—and many of them are my constituents. I return to the subject not simply to rehearse the old arguments but because there are good reasons to believe that the society's position is deteriorating badly and that the future of the society may be in doubt. I am not financially qualified to judge whether that is the case, but those who read the financial pages of the national newspapers will know that there is a great deal of speculation about the society's basic solvency.
I welcome the fact that the Financial Secretary to the Treasury is here. When she had her well deserved promotion a few months ago, she took this portfolio with her. I do not know whether that was an act of gallantry on her part, or whether her colleagues believed that she was the only person who understood financial services matters, but I am glad that we have a Minister here who understands what Equitable Life is about.
Mr. Stephen O'Brien: None of the other Ministers wanted to touch it.
Dr. Cable: That is a plausible explanation.
Because we have debated the subject before, I do not need to rehearse its history. Much of the information is available in the report of the Select Committee on the Treasury and the Baird report as it applies to the work of the Financial Services Authority. It will be useful to start by chronicling the key episode that led to the crisis three years ago—the House of Lords ruling and the realisation that the society had liabilities to its guaranteed annuity holders of £1.5 billion for which it had put aside only £50 million, later raised to £200 million. The society was hopelessly ill-prepared.
It quickly became apparent that it was not simply a stroke of bad luck but that it involved an extreme degree of negligence and mismanagement. Much of the subsequent debate, including today's debate, revolved around who was responsible. The current management rather graphically summed up the problem a few days ago, when the chief executive said that Equitable Life was a high-risk company operating in a high-risk manner but that no one seemed to have noticed. It certainly was not noticed by the management, who led it into that crisis. Nor was it noticed by the auditors Ernst and Young, who cheerfully signed off accounts that bore a passing resemblance to Alice in Wonderland.
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It does not appear to have been noticed either by the regulators—the Department of Trade and Industry until the beginning of 1999, then the Treasury and lastly the Financial Services Authority.
The reason for returning to the subject is that the position has deteriorated. That is partly because financial markets generally have deteriorated. There has been a fall at the stock exchange, and all those who have investments in money purchase schemes or endowments will be painfully aware of the cuts in terminal bonuses. However, the position in Equitable Life is significantly worse than in other societies. Its with-profits fund has lost about half its value. It is not only that people have lost their bonuses; they are locked into the society through exit penalties.
Within the last few weeks, we have heard several indications that the position is even worse than was hitherto realised. The first major indication, which came at the time of the interim statement, was the big cut in the payments made to about 50,000 of the society's annuitants. That is especially significant because annuitants, unlike other policyholders, cannot leave. They are trapped in the society. They face a situation in which they will lose up to 30 per cent. of their pensions, and many of them are pensioners in their 70s. A pensioner who received £500 a month on an Equitable annuity may in future take home only £375, which shows what a big cut there could be in people's income.
On top of that, there has been growing speculation about the basic solvency of the company. I talked to the management of the present company after the changes in December 2000 when it was closed to new entrants and the current rescue operation was under way. I was told that insolvency was hard to achieve in an insurance company, unlike in manufacturing companies. It is rather difficult to get into a position where one's liabilities are fundamentally greater than one's assets, because insurance companies have the option—in this case, the company has already taken it—of cutting bonus payments more or less indefinitely. In addition, they can resort to the measures that Equitable Life has already taken, such as moving most of their assets from equities into securities.
None the less, it was argued explicitly in The Sunday Times a few weeks ago, although Equitable Life subsequently disowned the article, that the company had breached its capital adequacy ratios as set down by the FSA—the 4 per cent. margin over solvency—at least once. The society has denied that, but it acknowledges that its insolvency margin is "uncomfortably thin". That is a matter of concern in itself but it is compounded by the fact that a great deal of risk still hangs over the company. Risk on liabilities results from the fact that there are many—about 800,000, but that number could rise—claims on the company from mis-selling. There are also risks on the asset side, partly because the company still has equities, but also because of what might happen this afternoon when the Chancellor speaks.
Most of us expect that the Chancellor will tell us that the Budget position is nothing like as healthy as it was and that there will be substantial additional Government borrowing. If the Government borrow heavily in the gilts market, bond yields are likely to rise and gilt prices will fall. The portfolio that Equitable Life has assumed, now heavily laden with bonds, will deteriorate in value, which will pile an asset risk on the

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other risks run by the company. The policyholders are confronted with an openly discussed and debated possibility of insolvency, perhaps leading to the company's going into administration.
We benefit from having recent comments from the Financial Services Authority as to what administration might mean in the case of Equitable Life, and they are pretty grim. To some extent the territory is uncharted, but it could be exceedingly messy. There is enormous uncertainty about it, but there could be large legal fees. The prospect is very grim for policyholders. At least theoretically, they are protected by an insurance policy protection scheme run by the industry, but that is pretty minimal and would strip away most, if not all, of the bonuses that they have acquired. Annuitants would find that they were no longer paid. Life cover would cease. Savings contracts would be terminated. Those people with savings in Equitable Life would almost certainly lose most of them. That is clearly a fate to be avoided.
I now come to the two questions of what should be done and who is responsible for the mess. Is it possible, even at this late stage, to contemplate rescuing Equitable Life—that is, heading off the risk of insolvency. When, 18 months ago, I raised the possibility of a lifeboat operation to rescue Equitable Life, the industry and, I think, Ministers contemptuously dismissed it as something that was beyond consideration. I think that the situation is now sufficiently serious for serious people in the City to consider that option, although I do not know whether they will do it. However, we should think about the issues involved in that and whether it should be openly advocated.
The reasons why there is a wider interest in saving Equitable Life and not treating the case as that of an unfortunate company without implications for others are as follows. The industry's reputation has been terribly damaged by Equitable Life. It was the oldest and most venerated company in the industry. Many people put their money into Equitable Life, not as a high-risk, speculative investment, but because it was considered fundamentally sound. Those people have been terribly disappointed, and people's confidence in investment products, particularly pensions, has generally been undermined by Equitable Life.
Richard Ottaway: The hon. Gentleman has spent the last 10 minutes talking about the grim outlook. I draw his attention to matters that relate to the Government and to how they can get involved. The industry was regulated, the Department of Trade and Industry and the Treasury were involved, and there was guidance from the Treasury saying that the Equitable was conducting itself acceptably. Despite that, however, in three days the House of Lords reached the conclusion that its practice was not acceptable. If the Government, as a regulatory authority, take such a stance, surely they have some degree of responsibility in the matter.
Dr. Cable: I am coming to that point. The purpose of the Penrose inquiry is to investigate such matters, but the hon. Gentleman's key point must be right. In the period up to 1999, when it was clear that inflation rates
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were falling and that many of the assumptions on which guaranteed annuities were based were being undermined, at no point, it would appear, did the regulators advise Equitable Life that it had to make much greater provision for those guaranteed annuities. Prima facie, serious negligence was involved.
From the industry point of view, there is clearly an interest in preventing Equitable Life from going bust. There is probably also an interest from the Government's standpoint. I believe that we shall get the response to the Pickering report in a few days' time. The Government's pension policy hinges on millions of people being able to provide for themselves. From experiences in our constituencies, we know that hundreds of thousands of people are losing their defined benefit final salary schemes. In many cases, their only option is to go for a money purchase scheme like the Equitable Life products, which have been terribly undermined. Any coherent attempt by the Government to plan a savings strategy for the future has to confront the loss of confidence that the episode under discussion has entailed.
When I first raised the issue of a lifeboat operation, the City and insurance industry response was, "Why should we bail out one of our competitors?" Equitable Life is of course no longer a competitor, because it is not taking new policyholders. There was also concern that there were large black holes in the company. Most of those have been identified, however, if not finally plugged. Also, there have been precedents. Some 15 years ago, a company called Iala was bought by the insurance industry as a way of heading off an insolvency situation.
I am not necessarily suggesting that the Government bail out the company. Having chastised the Secretary of State for Trade and Industry for finding £660 million for British Energy, I am not about to suggest that the Financial Secretary do the same thing for the insurance industry. None the less, I think that the Government have a responsibility to orchestrate an attempt by the industry to provide what would probably be very limited amounts of lines of credit or guarantees, in order to prevent the insolvency ratios from being breached. I hope that the Minister will respond a bit more constructively than she has in the past.
I now come to the issue of the responsibility of the Treasury and other Departments in this matter. The hon. Member for Croydon, South (Richard Ottaway) has made the point that, prima facie, during the long periods in which the economic basis of annuities was being undermined by lower inflation, the regulator failed in its duty—it did not recognise that a risk arose from guaranteed annuities and it allowed the company to continue to sell unguaranteed annuities without giving a clear warning about the risk that that entailed for the company.
The Government's response was to set up the Penrose inquiry. Some of us welcomed that at the time, but everybody concerned has been disillusioned by the exercise.
Mrs. Annette L. Brooke: Does my hon. Friend agree that the reasons for the delays to date should be clearly published and that, for the future, deadlines and milestones should be

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imposed? If those are missed, the reasons for that, too, should be published so that those who are suffering as a result of the debacle know what is going on.
Dr. Cable: My colleague makes a good point. It is unfortunate that deadlines and milestones were not included when the inquiry was established. I understand that Lord Penrose is still deeply immersed in his work. He has been given 500,000 pages to read by Equitable Life. I have no doubt that he is a speed reader, but people who have talked to him believe that he might well take at least another year to complete the work. That is hopeless from the point of view of the policyholders. What is emerging is an epic PhD thesis, not a snappy investigation into the fundamental causes of the problem, as far as the Government are concerned.
Will the Minister clarify where Penrose is leading? When the inquiry was launched she received credit for producing a rabbit from a hat, but it is becoming a nightmare. It is not producing results within any reasonable time frame. It is not even independent— although it is being conducted in an independent way, when material comes back to the Minister, she is not obliged to publish it. Will she at least give us some indication that an interim report will be published as soon as possible?
The other agency involved in the matter is the Financial Services Authority. Its record as a regulator has already been exhumed by the Baird report. I was intrigued by a reference to it in a recent press statement, which said:
"The City watchdog has announced it is backing troubled insurer Equitable Life and will not be asking for the firm to be wound up."
What is meant by the FSA backing Equitable Life? Presumably it is not backing it with money, so what backing is it giving? It is a regulator and has ongoing responsibility. What is it doing in that role?
My last point concerns the parliamentary ombudsman. Her function is not the direct responsibility of the Minister, but it provides hope to many constituents. What is happening? Some 250 cases have been referred to her office, probably by all of us here. One of them has been being investigated as a test case for the best part of a year and we are not yet close to seeing a resolution to that inquiry.
I am in correspondence with the Minister about whether the ombudsman's inquiries are being retarded or undermined by the delays in the Penrose inquiry. However, we seem to be at cross-purposes: the Minister asserts, rightly, that the investigation now being undertaken by the ombudsman into a case relating to mismanagement in the period 1999–2000 is not being impeded—it is not clear why it is delayed, but it is not due to the delay in Penrose. My point is more fundamental. The ombudsman cannot pursue the many cases before her without understanding the whole pre-1999 period, and it is clear that the delays to the Penrose report are seriously obstructing investigations.
Mr. Mark Field: I entirely endorse what the hon. Gentleman says. My understanding is, however, that the ombudsman's
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inquiries have been stayed pending the resolution, in any form, of the Penrose inquiry. What does the hon. Gentleman say about that?
Dr. Cable: I think that I have partly answered the point. The fact that the Penrose report is not available is a serious impediment to the progress in the bulk of the ombudsman's inquiries.
Richard Ottaway: Let me take up the excellent point made by my hon. Friend the Member for Cities of London and Westminster (Mr. Field). Is not the important point that the ombudsman reports to Parliament, while Penrose reports to the Government? If the reports that we have heard are true, it would be utterly inappropriate for the ombudsman to hold back from reporting to Parliament while she waited for a report to be made to the Government.
Dr. Cable: Well, it would certainly be very unfortunate for those of our constituents who are waiting for her report. Perhaps the best way of answering the hon. Gentleman is simply to quote what the previous ombudsman said a few weeks ago. He was very explicit:
"As far as events before 1 January 1999 are concerned, the position remains that the Ombudsman intends to await the outcome of Lord Penrose's Inquiry before deciding whether intervention would be useful."
That is very clear, and the implication is that the ombudsman can do absolutely nothing for at least a year and possibly longer.
To conclude, I want to draw further on the former ombudsman's statement, because it raises issues for which the Minister is accountable and for which she will have to answer. Before he retired, Sir Michael Buckley was under attack for not acting more expeditiously on the cases that we are discussing. In a press notice, he was quoted as saying:
"I do not agree with the critics. It seems to me plainly inefficient, and potentially unfair, to have two simultaneous but separate investigations covering much the same ground and taking evidence from much the same sources."
The press notice continued:
"The Ombudsman added that he had drawn the attention of the Select Committee on Public Administration to what he saw as the root cause of the problem".
I shall read the next sentence carefully because the Minister must answer the point that it raises. The press notice added that the then ombudsman identified the root cause as
"the failure of the authorities to establish at the outset a single inquiry with terms of reference covering all aspects of the Equitable Life affair."
It is clear that he meant the Treasury and the Minister when he referred to "the authorities". I hope that the Minister will give an effective response to that strong rebuke, because the ombudsman acts on our behalf and that of our constituents.
9.52 am
Mr. Mark Lazarowicz: I congratulate the hon. Member for Twickenham (Dr. Cable) on securing the debate. The subject is of deep concern to many constituents who have contacted me over the past year.

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I must declare an interest, although it is fairly marginal. I have a term life policy with Equitable Life that has only a couple of years left to run. The irony is that I probably would not have had to declare it a year ago, when the issue was the with-profits fund. Now, however, the problem extends from the fund's viability and the interests of fund policyholders to the viability of the whole company. I now have an at least theoretical interest in the issue, which demonstrates how the problem has grown from one that could have been managed, albeit with difficulty, to one with much wider ramifications. The extension of the problem demonstrates the seriousness of the situation and the need for action even at what might be described as the eleventh hour.
I shall make only a brief contribution. I agree with most of the comments made by the hon. Member for Twickenham. The failure of the regulatory agencies to take action at an early stage has created a crisis. If the governmental and non-governmental bodies that have a role in regulating the financial services industry had taken a more proactive role earlier in the crisis, it would have been easier to manage; now it will be much harder.
I endorse the view that although a rescue package of some sort may now be much harder to put together, there is a strong case for such a package and for the agencies involved, including the Government, to take an active role in putting it together. That rescue package, or lifeboat, is needed now. We cannot simply wait for the conclusion of the Penrose inquiry. I agree with the hon. Member for Twickenham that it may take several months for that inquiry to come to a conclusion. In the meantime, the possibility of insolvency becomes greater, and not only will policyholders lose out but there will be a knock-on effect on the pensions and savings industry as a whole. The entire culture that encourages people to save and invest in their pensions will be seriously jeopardised. The hundreds of thousands of people who work in the financial services industry will also be affected. Many of them live in my constituency, where the industry is the biggest private sector employer.
For all those reasons, I ask the Minister to assure us that the Government will take a proactive role in resolving the crisis, even at this late stage, and to encourage the establishment of some form of rescue package, as the hon. Member for Twickenham suggested.
9.56 am
Mr. Mark Field: I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this important debate, the third that we have had on the matter. Next to me sits my hon. Friend the Member for Christchurch (Mr. Chope), who introduced a debate on the subject this year. I fear that we shall need to debate the matter again in the months and years ahead.
Pensions are a highly technical matter, but the problems surrounding Equitable Life and other pension schemes are human. The hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) rightly pointed out that a significant number of jobs are at stake in his constituency. My constituency contains the City of
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London, where the pensions and insurance industry has an important part to play. All hon. Members must have received letters on the subject of Equitable Life, which may not exactly have filled our mailbags but have come in a drip-drip approach over the past year or so. Several of my constituents are in desperate straits. That especially applies to elderly folk, from whom I have received a great number of impassioned pleas regarding the uncertainty about Equitable Life.
Like the hon. Member for Twickenham, I was especially concerned by recent announcements. We seem to have reached a crossroads. The fact that existing rather than simply future pensioners find that there are cuts of 30 per cent. in their annuities shows that we have reached a fateful point in the history of Equitable Life. It comes as no surprise that the business pages of last weekend's newspapers talked about the stampede to the exit in Equitable Life. I shall return to the issue of confidence in a moment.
Last June, shortly after my election, I wrote an article in the national press, saying that the real fear was that the crisis in Equitable Life might be the first of many similar high-profile crises in the sector. Some issues may be specific to Equitable Life, but I fear that they may not be quite as unusual as we have been led to believe. The problem has all the ingredients for a major collapse in confidence in the savings industry.
The sorry tale of what happened in Equitable Life has been well documented, but I know that my hon. Friend the Member for Eddisbury (Mr. O'Brien) will go into some detail later, but before the Financial Services Authority took over responsibility for insurance industry regulation in January 1999, those duties rested with the Treasury and, before that time, with the DTI.
During the crucial period to the end of 1998, Equitable Life advertised and sold annuities without adequate reserves and without informing new savers of the vast pre-existing liabilities. That continued after January 1999, under the auspices, by that stage, of the FSA, until December 2000, when the House of Lords decided that Equitable was obliged to honour its guaranteed annuities in full. I have great sympathy with the Financial Secretary given the situation in which she and the Government find themselves, but they cannot wash their hands of responsibility for the fate of many of those with-profits policyholders who are now trapped.
The way forward is to end the obfuscation and delay that have been integral to the developments of the past 16 months, since the launch of the Penrose inquiry. The Treasury must now be open and honest about its role in the Equitable crisis. I have submitted many of the 253 outstanding ombudsman inquiry notifications, all of which have been stayed since August last year and the launch of the inquiry. I hope that the Financial Secretary will be able to suggest a timetable today. Her protestations in the national newspapers earlier in the year, when she said that Lord Penrose's investigations should be conducted in the due course of time, will fail to inspire confidence, and that will have an effect well beyond the issue of Equitable Life. That is one of the main concerns: the problems in the pensions industry as a whole are crucial to the way in which we proceed. The issue goes beyond the issues that relate specifically to Equitable.

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Several of my constituents who are with-profits annuitants put their case succinctly. First, the Government have forced pensioners to take out annuities by the age of 75, which is yet another reason why the Conservatives are keen to end the strict rule. Secondly, Equitable Life annuitants were unaware, in taking out their policies before December 1998, that there was any potential problem. Thirdly, to save the company, those very annuitants, who are often relying on relatively small incomes to enable them to live happily in retirement, voted for the compromise agreement a year or so ago, thus depriving themselves of any right to sue for mis-selling. Yet those same annuitants are now unable to transfer to another provider, and their income is therefore reduced dramatically—perhaps even terminally. Many of them are worried sick. Realistically, they will be unable to build another pot of capital for their retirement. The sheer uncertainty over what is to come in the months and years ahead is the killer.
There is clearly a crisis of confidence in the entire pensions industry. I do not necessarily blame the present Government more than others for that, although, if I dare talk in such terms, £5 billion raids in 1997 clearly did not help. However, the issue should be beyond party politics. What message will the Government now put out to young folk who might want to save for the future? Most people of my generation, and the Financial Secretary's—she is at least two or three years younger than I am—take the view that there is little point in buying shares, given the depressed stock market, or investing at this stage in any sort of pension. In London the property market is overheated, and that is where most young and middle-aged folk are putting much of their money. There is a real reason for the Government to try to restore confidence.
The Government must grasp the nettle and take responsibility in relation to Equitable. There is little doubt that they will have to pick up the pieces in the end anyway, so why not do so now instead of delaying? The hon. Member for Twickenham rightly used as an analogy the secondary banking crisis in 1974, which required the Treasury to lead the way with a lifeboat-type rescue. My fear is that failure to act now will do great damage to the whole pensions and insurance sector, and that that damage could take a decade or more to rectify. There is little doubt that the Financial Services Authority lacks the authority shown by the Bank of England, for example, in its work almost three decades ago during the secondary banking crisis to which I referred. The Government now need to act in the national interest, because the problem extends well beyond the business of insurance and pensions, to ensure that we get the matter right.
10.5 am
Annabelle Ewing: I, too, congratulate the hon. Member for Twickenham (Dr. Cable) on securing this important debate. The number of hon. Members attending the debate shows the importance that we attach to the debacle that is the Equitable Life saga. I want to declare an interest, although I am not entirely sure whether I am any longer required to do so, because I did have an Equitable Life pension plan, but I recently transferred its dwindling value to another pension fund.
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Many of my constituents, however, remain policyholders with Equitable Life. Their bonuses have been eliminated, their policies have been substantially reduced in value and they are facing an extremely uncertain retirement. The key fact that my constituents want to know is whether there was a regulatory failure. If there was, that would constitute a failure by the Government, because the DTI was the previous regulator, followed by the Treasury, and now the regulator is the FSA. Furthermore, if there was a regulatory failure, are my constituents entitled to compensation as a result?
My constituents are also extremely unhappy about the way in which the investigation is being carried out. As the hon. Member for Twickenham mentioned, the inquiry by the parliamentary ombudsman into the complaints that have been raised has been put on hold pending the outcome of the inquiry set up by Lord Penrose. My constituents are dismayed by the continuing delay in the reporting of that inquiry, and I hope that the Minister will shed some light this morning on what on earth is happening. Will the Minister give us a ballpark estimate of when we may expect the inquiry to report? I understand that the report will be submitted to the Treasury, but will she also say whether the full report will be made public? Equitable Life policyholders have a direct interest in knowing whether they will be able to see and consider the report, when they have had to wait for so many years for any action to be taken.
I should also like to comment on the remit of the parliamentary ombudsman. I do not want to revisit history and cover the background to the decision regarding the period from January 1999 to December 2000, but I understand that there have recently been calls for the Government to consider whether the remit is too narrowly drawn, in the light of the regulatory history of Equitable Life.
I should also like to say something about the role of the prudential regulator. A regulator is not subject to some sort of best efforts standard. A regulator in the financial services industry is subject to various legal requirements. Have those legal requirements been met? It is not totally clear on what basis Equitable Life has been authorised, in terms of how the EC law regime applies to it. Either it falls within direct EC single-market financial services directives or it falls within the general EC treaty regime. In either case there are implications for the United Kingdom Government as regulator. Will the Minister tell us her understanding of the implications for Equitable Life of EC financial services law? I suspect that that angle has been overlooked, and therein lie potential remedies for policyholders who feel that the Government, as prime regulator, have not properly protected their interests.
As to recent developments, I wonder how long Equitable Life will be allowed to continue to trade when it is failing to meet the solvency requirements that are legally incumbent upon it. Presumably, the fact that it can continue to trade although it is not currently meeting some solvency requirements means that it has a transitional exceptional derogation from the general rules. However, by definition, a transitional exceptional derogation cannot go on ad infinitum. What will the Financial Services Authority be required to do should Equitable Life continue to be in breach of the solvency rules applicable to it in the medium to longer term?

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The situation is getting worse daily and is deeply damaging to the reputation of UK-authorised financial institutions, including, as the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) said, the excellent Scottish-based institutions in major cities in Scotland. It is in no one's interests for this debacle to drag on and on and for the Government to allow it do so. I hope that the Minister will reply to the questions that I and other hon. Members have asked in the debate because our constituents want answers to those questions.
With respect to Government policy, I wonder how the Government handling of this matter squares with their stated objective of encouraging people to plan for their retirement. Is there not a danger that the longer the situation drags on, the less attractive it will be to take out a pension? That cannot be in the Government's interests as it would defeat their approach to pensions policy.
10.12 am
Mr. Christopher Chope: It is a pleasure to follow the hon. Member for Perth (Annabelle Ewing). I hope that the Minister will give an unequivocal answer to her key question: when the Penrose report is eventually published, will it be published in full? If the Government were to give such an assurance, it would allay some of the concerns of a public who are increasingly sceptical on the issue. A subsidiary point about an interim report was made by the hon. Member for Twickenham (Dr. Cable), whom I congratulate on raising the matter again. Penrose has taken a lot longer than the Minister expected. I remind her that last year she said:
"I expect Lord Penrose to report as soon as he thinks that he is able to, which I hope will be some time next year."—[Official Report, Westminster Hall, 17 October 2001; Vol. 372, c. 258WH.]
That refers to 2002. We now know that the report will be much delayed—beyond this year—and I hope that in light of the Minister's earlier hopes she will say that it would be sensible and prudent to have an interim report from Lord Penrose. That would enable people who are waiting for the outcome of the report to know the present position.
I want to comment on the ombudsman's report because it was a great relief that the ombudsman, having initially decided that he was not going to start an investigation until after Penrose, relented in October 2001 and said that he would start an investigation into the two years 1999 and 2000. We are much concerned by the delay in the publication of that report and hon. Members have had correspondence with the ombudsman about the reasons for that delay. On 24 October I received a letter from the deputy parliamentary ombudsman stating that the investigative fieldwork—the examination of papers, interviews with officials and so on—had been completed but he still had to analyse the information obtained to establish precisely what took place, as opposed to what should have taken place, and then translate the result into findings for the ombudsman's report. He said that the change of ombudsman from Sir Michael Buckley to Ann Abraham might cause some delay. I wrote to Ann
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Abraham to congratulate her on her appointment and to ask her to update me on progress, but I have yet to receive a substantive answer. Let us hope for an early resolution of this part of the inquiry. A clear finding from the ombudsman would encourage the Government to respond positively to recommendations, which would then free up the ombudsman and her staff to start the inquiry into the wider period of regulatory failure.
I drew the ombudsman's attention to another matter—the more than anecdotal evidence that Treasury and other officials had blocked the inquiry's progress. I felt that Members should know the response of the deputy parliamentary ombudsman to those allegations, but he wrote:
"It also would not be helpful for me to comment on rumours related to the other matters you raised."
That is hardly the rejection of the rumours that might have been expected from the deputy parliamentary ombudsman. Are the rumours wholly unfounded? We are worried that the Treasury never wanted the ombudsman to start an investigation parallel with Penrose and has blocked the progress of the inquiry.
Another important issue is the role of the Select Committee on the Treasury, which has an important part to play. An inquiry was started, but then stalled to wait for the outcome of Lord Penrose's report. I tabled early-day motion 1053, which was signed by well over 100 colleagues from all political parties. Published on 21 March 2002, it drew attention to fears that Penrose would take much longer and that the report would drag on into next year. I argued that that was why the Treasury Committee, with its considerable powers, should immediately resume its investigation into regulatory failure.
The Chairman of the Treasury Committee tabled an amendment to the early-day motion, stating that his Committee
"would be concerned if Lord Penrose was unable to complete his report in 2002; and notes that the Treasury Committee decided in January 2002 to continue its inquiry when Lord Penrose has reported."
We now know that Lord Penrose will not report in 2002 and that the Treasury Committee Chairman is worried about it, so I hope that that Committee will immediately resume its investigation into this matter. It has tremendous power to call witnesses and it should not sit back, waiting another year before Penrose produces the report. The Minister will doubtless encourage the Treasury Committee to reopen its inquiry and will cooperate with it in respect of any decisions that it takes.
In today's press—I am looking at page 56 of Money Mail—an article states:
"While policyholders suffer death by a thousand cuts, the Government and regulators both shrug their shoulders in a 'Not me, guy' fashion … Equitable policyholders are right to be angry with a Government that splurges money on any politically correct cause, yet refuses even to consider engineering a rescue package for them … Equitable's policyholders are victims of mismanagement, lies, mis-selling, misinformation, financial manipulation and downright incompetence. It's time the Government and the Financial Services Authority organised a rescue."
I could not have put it better myself.
10.19 am
Dr. Richard Taylor: Like other hon. Members, I am grateful to the hon. Member for Twickenham (Dr. Cable) for giving us a chance to debate this subject. From the figures, each hon. Member can expect about one per 1,000 of their constituents to be affected; certainly, we have all received several letters. I am also glad that the hon. Member for Cities of London and Westminster (Mr. Field) said that the subject was complicated. To a mere retired doctor, it is almost unfathomable. I have therefore come to listen and learn, to ask questions and to stress those that have already been asked by constituents who are annuitants—the elderly, the desperate and the hopeless who have hardly dared write to me because they cannot see a way through.
I want particularly to refer to a retired chartered accountant whom I know well. He has been a respected member of his profession, and has been involved in looking after people's financial affairs and giving them advice. He chose Equitable Life as it was the market leader at the time. His gross pension, which is his main income, has dropped from £14,547 by £3,000. Other people have lost similar amounts. The problem is huge, and the ordinary person is short of weapons to fight it.
Please do not think that I am criticising the parliamentary ombudsman, Mr. Deputy Speaker, but the cases that I have tried to refer to him, which have covered several different issues, often fall outside his remit because of certain restrictions. In this case, he is allowed to examine only cases that fall between 1 January 1999 and 8 December 2000.
Enough has been said about the Penrose report, so I shall wait to hear the Minister's comments on it. There was some confusion in a recent House of Lords Question Time about that report and its influence on the ombudsman.
I shall ask a few specific questions, some of which have been asked before but need re-emphasis. What redress has the ordinary annuitant against the company and the Financial Services Authority, which, in the words of one of my constituents, must have been asleep at the wheel? Are such annuitants like the unfortunate employees of a large engineering firm in my constituency that recently went into receivership? The members of the pension fund will find themselves right at the bottom of the list of those who receive payment if the company is wound up. Small points that rankle tremendously are the bonuses that the executives received earlier this year and the generous pay-off for the finance director, who recently resigned.
Yesterday, The Guardian referred to the fact that Norwich Union had held talks with the Inland Revenue about the potential transfer of individuals to its books. I quote:
"But Norwich Union said yesterday that although technically possible, any transfer would only be beneficial to policyholders if there were a change in revenue rules to allow it to offer better terms to Equitable's annuitants."
I hope that the Minister can tell us that hope exists there. Can the Government give any other hope to the annuitants?
10.23 am
Norman Lamb: I add my congratulations to my hon. Friend the Member for Twickenham (Dr. Cable) on securing the debate. He presented a clear and lucid analysis of the key issues that have caused so much concern to so many people.
Before I continue, like the hon. Member for Perth (Annabelle Ewing) I should declare an interest. I, too, have just completed the transfer of a pension policy from Equitable Life—
Mr. Deputy Speaker (Mr. John McWilliam): Order. I doubt very much that more than one or two Members of Parliament would, because of their dealings with Equitable Life, have to declare an interest in it.
Norman Lamb: Thank you, Mr. Deputy Speaker. I was going on to say that in a sense I have suffered the same dilemma as many others over the past two years. I have been one of the fortunate ones, however, in that I do not have all my eggs in one basket. The scale of my loss has not been as great as for many others. However, as the hon. Member for Wyre Forest (Dr. Taylor) pointed out, those who put all their eggs in that one basket face disaster. We must keep in the forefront of our minds the extent of the distress and hardship that has been caused to so many people as the scandal has unfolded.
Anxiety is now being increased by speculation about insolvency. The company continues to stress that it remains solvent and that at present it does not appear likely to become insolvent. However, that could change. If the with-profits fund shrinks further, the company's room for manoeuvre could disappear and we would then be in uncharted waters. There is great uncertainty as to how the liquidation of a life company the size of Equitable Life would work, and there is no reason to believe that insolvency would in any sense lead to stability.
The case of the life company Oak Life may be instructive. It had just 5,000 policyholders, compared with Equitable Life's 800,000. It went into liquidation in 1993. Almost 10 years later the liquidation continues, and 600 policyholders have still not received their policies. When their compensation eventually arrives, it will be based on policy values frozen way back in 1993. That is a deeply unattractive scenario.
Perhaps the most immediate and serious problem would be for those annuitants currently in receipt of payments. The liquidators could stop all payments until it could be determined who was entitled to what share of the assets. That would spell disaster for many pensioners who rely absolutely on such payments.
Clearly, if Equitable's board decides at some stage to go into administration, the consequences would also be deeply damaging for policyholders. There would obviously be competing claims on the fund, and the administrator would have to be careful to avoid paying out too much to, for example, annuitants. The costs of administration would be vast. The company estimated them at some £100 million, which inevitably would come out of policyholders' funds.
At present, some independent financial advisers appear to be indulging in some fairly disreputable activities, thereby increasing and exploiting the anxieties

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of policyholders. They seek to pull policyholders away from Equitable Life by tactics such as using papers that appear to come from Equitable Life. Such activities must be investigated. There is no reason why IFAs should not seek to persuade people to invest in particular products, but it is important that they do so in a reputable way.
I am conscious that there are several current and potential legal actions; for example, actions by Equitable Life against former directors and against its former auditors, Ernst and Young. Both routes appear to have considerable merit, given the clear warning bells ringing loudly in the late 1990s. As my hon. Friend the Member for Twickenham said in a debate in October last year, there is a massive question mark over the clean bill of health given to the company by Ernst and Young in 1999 after so much discussion in the City during the previous financial year.
Indeed, the storm clouds had been gathering for a considerable time. There was a growing body of evidence that the whole structure was unsustainable. Interest rates had been falling, and it was clear that the assumptions on which the guaranteed annuities were based were unsustainable. In 1994, Michael Heseltine—now Lord Heseltine—when President of the Board of Trade and Secretary of State for Trade and Industry, was responsible for the actions, or inaction, of the regulators, who failed to notice from annual returns the differential final bonus policy for guaranteed annuities, which was concealed from policyholders and led directly to the present mess. The potential culpability goes back a long way.
Then there are the 2,500 complaints submitted to the financial services ombudsman, mainly from former policyholders who withdrew before the introduction of the compromise scheme earlier this year. Those complaints allege mis-selling. If the ombudsman finds Equitable Life liable for mis-selling in the lead test cases that he is investigating, he must award full compensation—not partial compensation as part of any compromise deal—for the loss suffered. The consequences of that for the other affected group—those who remain with Equitable Life, including those receiving payments from annuities in retirement—could be very serious. As we have heard, those annuitants have already lost about 30 per cent. of their income. That is the awful reality for everyone caught up in this mess. If one group benefits, another loses out massively.
That brings me to the role of the regulator—initially the Department of Trade and Industry, then the Financial Services Authority—and what the Government are doing in the face of the crisis. One is left with a sense of staggering inertia and complacency. The Baird report on the role of the FSA was flawed from the start because it lacked independence. Even so, its criticism of the FSA, together with concerns about its role as regards split capital trusts, hardly provides reassurance about its ability to regulate the industry in future.
The analysis of the earlier period before the FSA took over from the DTI was left to the Penrose inquiry. It had been hoped that the report would be ready for publication this summer—two or three months ago— but nothing has emerged and nothing is expected until
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well into next year. We have heard that it could take at least another year. That is disastrous and completely unacceptable for those left in a state of anxiety awaiting the outcome. The Government cannot stand by, doing nothing, while we wait for the inquiry to report. It is imperative that urgent progress be made. As was suggested this morning, there should be an interim report. That should be published as soon as possible, and the Government should be responsible for setting a timetable to ensure that we get news of the outcome quickly.
I join other hon. Members in pressing the Minister on the confusion surrounding the parliamentary ombudsman's investigation. In March 2002, the then parliamentary ombudsman, Michael Buckley, stated in a letter to Members:
"I have made it clear that I intend to await the outcome of the independent inquiry set up under the Chairmanship of Lord Penrose … before deciding whether I might usefully consider other aspects of this matter, including events before January, 1999."
I appreciate that the core remit of the parliamentary ombudsman's investigation might not be delayed by the Penrose inquiry, but it is unacceptable that other matters that are properly to be considered by the ombudsman will be stayed for possibly more than another year. The Minister has indicated that she does not believe that the investigation by the parliamentary ombudsman has been delayed owing to the Penrose inquiry. We need clarity as to the precise situation, and I should be grateful if she would explain what further steps she proposes to take to expedite matters.
Finally, I want to raise concerns about the state of the insurance and pensions industry in general. Although Equitable may be the worst example, many companies have out-of-date management structures, inadequate computer systems and a reliance on actuarial assessments that have not been independently assessed. Does the Minister share those concerns about the state of the industry in general and the confidence, or lack of it, that that inspires in many ordinary people who simply want to protect their position for their future retirement? Does she consider that a broader inquiry into the industry is needed, given the extent to which people rely on the companies for security in old age? I believe that that is absolutely essential to re-establish confidence in the industry.
10.34 am
Mr. Stephen O'Brien: I shall leave my declaration of interests under the blanket declaration that you mentioned earlier, Mr. Deputy Speaker.
I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this exceptionally timely and important debate. It builds on previous debates, but as these matters, of desperate concern to all our constituents, have deteriorated, I am glad that the hon. Gentleman could secure this debate now.
We have heard a good selection of speeches and points today from Members on both sides of the Chamber, reflecting the deep anxiety of constituents across the United Kingdom. This debate is timely not only because our constituents have rightly appealed to us in their time of concern, but because it is right and fair to pay proper tribute to the Equitable action groups

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now under the E7 banner. I had the opportunity to meet those groups when they came to Westminster to continue making their case, which they did very palpably, on 29 October. They have always been serious and compelling, and it is only right that we all work together to fight for the justice of their cause. I salute them and, in particular, Paul Braithwaite, who has shown such leadership.
There is no need to take the House's time by rehearsing the background facts. All hon. Members are very familiar with the consequences of the affair, and the misery visited on policyholders and affected people in all our constituencies. It is right, however, to start by saying that for almost all Equitable members, policy values and annuities have been cut by about one third and that the society's solvency is today in doubt. Annuitants are especially hard hit because, under Equitable's internal rules, common across the industry, they cannot transfer to another pension provider. Other policyholders can transfer, but at the cost of a significant exit fee.
Who is responsible? In my view, the old board and its advising actuaries were reckless and misguided. I understand that legal action against the former directors is being considered but unless they were well insured, there may be nothing worthwhile to gain there. It can be claimed that, over many years, the accounts gave no indication of the scale of the contingent liabilities. The current board has instigated legal action against the accountants, but that will no doubt be contested over a very long period—far too long for the suffering Equitable policyholders. As the hon. Member for Wyre Forest (Dr. Taylor) just mentioned, Mr. Bellringer's departure on Monday with an extraordinarily large and insensitive pay-off after only six months in the job of finance director hardly inspires confidence.
I turn to the responsibility of the regulators. Until 1999, the prudential supervision of the Equitable was exercised directly by the DTI and the Treasury. They are open to a charge of maladministration. First, they allowed the society to sell unguaranteed policies without ring-fencing the funding of GAR policies and without disclosing that those prior guaranteed policies existed and represented huge contingent liabilities.
Secondly, as evidenced by the letter issued by Martin Roberts, director of insurance at the Treasury on 18 December 1998, which was on its website until July 2000, those Departments endorsed the society's attempt to redress the balance to cover the under-reserved costs of GAR policies by paying differential bonuses. That was later ruled illegal by the House of Lords. Thirdly, they allowed the society to trade with totally inadequate reserves and to claim throughout that it was selling a low-risk product coupled with prudent management and the benefits of mutuality. All Members of this House must feel that the shades of Maxwell come to mind. The issue of negligence must be examined urgently. That is not currently being properly investigated—certainly not with the necessary urgency.
The Government have not only encouraged saving in personal pension schemes, but required those schemes to be converted into annuities from which there was and is no escape. Yet the Government are now standing by while pensioners have their current and future incomes slashed.
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Since 1999 regulation has been in the hands of the FSA. One might have thought that when the scale of the collapse became apparent, the Government would have mobilised resources from the industry to underwrite the Equitable for a period to stem the flow of funds and to rebuild reserves in an orderly way. After all, if the society becomes insolvent, the industry will meet the cost of whatever compensation is awarded, and the damage to the savings industry and the Government's plans will be enormous. That is the sort of response that the Bank of England and, notably, the present Governor, no less, employed successfully during the secondary banking crisis in 1974 under Denis Healey's Chancellorship. At the very least, the Government should now devise and publish a contingency plan in the event that Equitable becomes insolvent, and I urge the Minister to give a clear answer on that today.
What needs to be done now? First, I urge the Treasury Committee—I am pleased to see the Chairman in his place—to reactivate its inquiry into Equitable.
Mr. John McFall: For the record, the Select Committee has acted unanimously on every decision that it has taken on this matter. We accepted that Lord Penrose was inquiring into the matter, but two weeks ago I raised the matter in the Committee and we decided to write to the Treasury, the FSA, Lord Penrose and others to assess the situation. We shall then look at the matter again and take it forward.
Mr. Stephen O'Brien: I am most grateful to the Chairman of the Treasury Committee and I am sure that all those with a concern in the matter heard what he had to say. We wish him well in his determinations following the responses, or absence of satisfactory responses, that he receives. Given the importance of the Select Committee's work and its powers to command evidence and people to appear before it, it has a real opportunity to advance the cause if that is the right course to take.
I return to what needs to be done. Policyholders and annuitants believe, rightly, that they have been victims of mis-selling and are looking for redress, either through industry support or compensation, especially from the regulators, or both. So far, it is right and fair to say that no one has exercised any leadership to deal with the situation. Given the flight of funds, coupled with today's more litigious environment, the opportunity may already have been lost to mobilise support, a point that has been mentioned by the hon. Member for Twickenham and others. Today we have the added difficulty, compared with 1974. of the fact that an increasing proportion of the relevant parts of the industry is in non-UK domestic ownership. We want mobilisation of that support, if it is still possible, in restoring Equitable to an even keel and salvaging confidence in the UK savings industry generally. If that is not done, it is likely to prove a big mistake because any other solution would be messy, long drawn out and costly.
What is certainly needed is a proper inquiry into the actions of the regulators, but there has been little progress, especially by the Government. The FSA set up an internal audit of its activities after it took over responsibility in 1999. The resulting Baird report was highly critical of the FSA's inactivity but acknowledged that most of the damage had already been done before it came on the scene. The die had been cast.

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In August 2001 the Treasury appointed Lord Penrose with the following terms of reference:
"To inquire into the circumstances leading to the current situation … taking account of relevant life market background; to identify any lessons to be learnt for the conduct, administration and regulation of life assurance business; and to give a report thereon to Treasury Ministers."
That is a huge remit.
Looking at other necessary key action, I and other hon. Members wanted the matter to be examined by the parliamentary ombudsman. After considerable, admirable and persistent effort by colleagues in the former shadow Treasury team—my hon. Friends the Members for Croydon, South (Richard Ottaway), for Christchurch (Mr. Chope) and for Hertsmere (Mr. Clappison)—I am delighted that their efforts, coupled with those of many other hon. Members on the Opposition Benches and 253 MP referrals from throughout the House, persuaded the parliamentary ombudsman to undertake an inquiry into the limited area covered by the Baird report. The then parliamentary ombudsman refused to look more widely at charges of maladministration by earlier regulators—the DTI and the Treasury—on the grounds that that would be a wasteful duplication of effort, pending the outcome of Lord Penrose's inquiry. That is a depressingly subordinate position to take. It effectively relegates the interests of Parliament and Equitable policyholders to those of the Government. Lord Penrose has been appointed, and given terms of reference, by the Government. He reports to Treasury Ministers, whose Department is one of the regulators under scrutiny. Who has the incentive to internalise this matter? Surely not the regulators for the relevant applicable time: the Treasury and the Department of Trade and Industry.
Lord Penrose has no powers to compel witnesses to attend or give evidence. His report may or may not be published, in part or in full, and the Government are free to accept or reject his recommendations. His inquiry will take, we all believe, at least another year and perhaps years. We can all urge speed as much as we like and the Minister's refrain will be, "The inquiry is independent. It's up to Lord Penrose." That is not good enough. Today's victims need the Penrose inquiry quickly. At the very least, they need the interim report that has been properly called for during the debate.
The new parliamentary ombudsman—she has just taken up her role and I wish her well—is an Officer of the House and reports to Parliament, independent of Government. Her remit is narrow: the inquiry is into allegations of maladministration and is intended to pinpoint responsibility. Parliament can ensure that her report is published and that she receives co-operation from witnesses. Of course, there will be some overlap with the Penrose inquiry, but there is no reason why the Government's wide-ranging inquiry should take precedence over, and necessarily compromise, Parliament's own inquiry. The new ombudsman has fresh eyes and has an opportunity to accelerate her inquiry, to extend it back to the period before 1999 and to publish before Lord Penrose. I urge her to do that and to have the matter at the top of her in-tray.
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It is now well over two years since the House of Lords' decision pulled the rug from under the Equitable. Policyholders and annuitants, many of them elderly and vulnerable, have suffered a series of hammer blows through no fault of their own and when they were doing the right thing. The regulators certainly have much to answer for, yet the upshot of the action so far has been to kick the whole subject into the long grass. There is widespread suspicion that the Treasury is playing for a goal beyond the next general election. This is a shameful episode and a continuing major injustice, which the Treasury is allowing to drift. On behalf of the policyholders and the annuitants, I say that, at this woefully late stage, it is time for the Government to get a grip. Will the Treasury Minister with responsibility for this area now commit herself to doing that today?
10.47 am
The Financial Secretary to the Treasury (Ruth Kelly): I add my congratulations to the hon. Member for Twickenham (Dr. Cable) on securing this important debate. I know of his long-standing interest in these issues on behalf of his constituents and I congratulate him on that.
I will attempt to give as many answers as I can to the individual points that have been raised. First, I should like to express my personal sympathies for those policyholders at Equitable Life who have been affected by difficulties in the society and, in particular, for the 50,000 men and women who have worked hard to save for their retirement and who put their faith in Equitable Life and recently received news that their with-profit annuities would also be the subject of cuts. As a Member of Parliament, I am certainly not alone in receiving many letters on this subject—that is aside from being the Minister with responsibility for this area. I understand the concerns, and even anger, of policyholders at the current state of affairs. I add my congratulations to the action groups on their sterling efforts to draw attention to the issues.
As many hon. Members have recognised, the difficulties at Equitable Life stem at least in part from the guaranteed annuity rates that it, along with other life insurers, offered to with-profit policyholders between the late 1950s and 1988. As the hon. Member for North Norfolk (Norman Lamb) lucidly pointed out, the problems arising from those guarantees began to have a material effect in the early 1990s, when, for the first time, movements in interest rates meant that the guaranteed annuity rates were higher than the rates available in the market. In response, Equitable cut the terminal bonuses given to those members who opted for higher annuity rates. In effect, in order to achieve what it saw as fairness between all its members, Equitable gave those members who opted for a guaranteed rate annuity a smaller pot with which to purchase an annuity. Those members who opted for an annuity at the lower, open-market rate had a larger pot. The result of that policy was that savers with similar funds received the same income regardless of whether they had purchased a guarantee.
The society agreed to take to court a test case, in which policyholders argued that the guarantee entitled them to both a terminal bonus at the same level as other members and an annuity at the guaranteed rate. In July 2000, the House of Lords finally ruled in favour of their claim, and in doing so ruled against both the society's

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previous policy and any ring-fencing of the liability among the guaranteed annuity option policyholders as proposed by the Court of Appeal.
The financial consequence of that decision exposed the society to unquantified costs for which it had not made provision. The Equitable put itself up for sale, but it was unable to find a buyer and closed to new business in December 2000. A compromise between policyholders was agreed earlier this year. Non-GAR policyholders agreed not to sue over mis-selling in return for GAR policyholders' giving up their guarantees. However, policyholders who had already left can still sue the society, and the Equitable faces considerable claims for compensation. The society is a mutual and has no source of funds other than its policyholders. As the hon. Member for Twickenham has outlined, companies of that kind are currently operating in very difficult market conditions.
I now want to address the points that have been raised about trust in the pensions industry and the possibility of a lifeboat being organised. This Government have done more than any other Government to try to put in place a framework to establish a basis for trust in the financial services industry. On coming to power in the late 1990s, the Government established the inquiry into the mis-selling of pensions, which has refunded £11 billion to policyholders. We set up the Financial Services Authority, which brought together nine separate sectoral regulators. For the first time, it includes a single ombudsman scheme and a single financial services compensation scheme, which is easy for people to use in gaining compensation in the event of insolvency. We are currently working on proposals to extend advice on financial services products to the mass market. We will be developing those proposals and plan to encourage people to save for their pensions, but Members will have to wait for the details in the pensions Green Paper later this year.
On the specific subject of a lifeboat, I understand the point made by the hon. Member for Twickenham on the general situation in the life insurance and pensions industry. In his view, a lifeboat would be desirable, but the key point is that the financial services compensation scheme already provides for 90 per cent. of policy values to be paid out in the event of the insolvency of a life insurance company. There is the possibility of the industry choosing to come together before a life insurance company reaches insolvency in order to take advantage of those provisions and provide a lifeboat, if it deems it to be appropriate in a given situation.
Annabelle Ewing: Is there a ceiling on compensation provided by the scheme? Is there a ceiling on the amount per payment?
Ruth Kelly: No. Compensation is 100 per cent. of the first small amount and 90 per cent. of any subsequent amount up to whatever total is required. The industry could come together and decide that a lifeboat was needed. In fact, the Equitable and other life insurance companies are closely monitored by the FSA, particularly in these difficult times. The hon. Member for Twickenham asked what the FSA was doing to help; it is working extremely closely with the Equitable to help it to quantify any liabilities that it has for mis-selling and decide on future courses of action. If the FSA thought
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it appropriate, it would approach the industry for those sorts of talks. That is where the responsibility for that sort of action lies.
Mr. Mark Field: May I reiterate my concern that the FSA does not have the authority within the City to take lifeboat action, if lifeboat action were deemed to be the right thing to do? The Bank of England, and therefore the Government, needs to take a more important role in the matter. The FSA's role, and its credibility within the City, is insufficient to take action of that sort.
Ruth Kelly: I might have agreed with the hon. Gentleman if he were referring to the period before the full independence of the FSA. However, the fact of the matter is that the FSA is the only authority with a detailed knowledge of the solvency position of the Equitable, and it is monitoring events intimately. Other than the industry itself, which can take its own view, it is the only authority in a position to come up with and proactively pursue such a course of action if it thought it advisable. At present, the FSA believes that Equitable Life is a solvent going concern; I hope that that view will remain.
I turn now to Penrose and the ombudsman. We understand the concerns of policyholders, hon. Members and the general public about the state of affairs at Equitable, which was why we set up the independent inquiry. Lord Penrose's terms of reference are:
"To inquire into the circumstances leading to the current situation of the Equitable Life Assurance Society, taking account of relevant life market background; to identify any lessons to be learnt for the conduct, administration and regulation of life assurance business; and to give a report thereon to Treasury Ministers."
The terms of reference have deliberately been drawn wide in order to allow thorough consideration of the root causes of the problem. I wish to stress, however, that Lord Penrose is operating entirely independently of the Government. He is a senior Scottish commercial judge. He has an accountancy background and he was the ideal candidate to lead the inquiry. We listened clearly to his views when asking him to undertake such an inquiry. He thought that it was much better for him immediately to read the background of Equitable without the artificial restrictions that a deadline would impose, for example.
Lord Penrose said that he would produce his findings as quickly as possible and that they would be consistent with a thorough and authoritative account of the events of Equitable Life. He assures us that that is still the case. I look forward to reading the results of his inquiry. The idea of imposing an artificial deadline for the first time would be counter-productive.
Mr. Mark Field: What about an interim report?
Ruth Kelly: I was about to touch on that point. The idea of imposing a deadline and saying, "Yes, come up

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with an interim report within the next few months," would be counter-productive, given that Lord Penrose is intent on producing his full report as quickly as possible.
Dr. Cable: Given that the Minister has underlined the independence of Lord Penrose, will she give us an assurance that the authoritative report will be published in full?
Ruth Kelly: I am glad that the hon. Gentleman asked me that question. It is my presumption and that of Lord Penrose that the report will be published in full. However, I must point out to hon. Members that we cannot break the law if certain legal confidentiality restrictions emerge when the final version of the report is shown to our lawyers. I presume that it will be published in full. It will be made clear to people whether that is the case. They can decide whether the report is fully independent or whether some passages have been removed.
The ombudsman is also entirely independent of the Government. It is for her to decide which of the complaints that are referred to her within her jurisdiction she wishes to investigate. The Treasury and the FSA are co-operating fully with the ombudsman. We have not received any complaint that we are not so operating. It has been suggested that her investigation has been delayed until after Lord Penrose has reported. That is not the case. Indeed, the ombudsman made that clear in a press notice on 29 October, which stated that the current investigation's
"finalisation does not depend on the conclusion of Lord Penrose's Inquiry".
The ombudsman has said that no decision will be taken on whether to undertake a further investigation into the period prior to 1 January 1999 until after Lord Penrose has reported. There is no bar to prevent the ombudsman from deciding to conduct a more widespread inquiry that goes further back into the history of events: that is totally within her remit. Lord Penrose's remit is wider than the ombudsman's. That is why we asked him to look at the actions of Equitable during the period. Our main concern is that, during this course of affairs, we learn every lesson possible for future regulation.
Mr. Deputy Speaker: Order. Time is up. Will hon. Members who are not staying for the next debate please leave quickly and quietly?

European Constitution
11 am
Mr. Graham Allen: Good morning, Mr. Deputy Speaker. This morning I raise the important issue of the European constitution. If we are not careful, history will pass this Parliament by. In less than two years' time, there will be a European constitution and we will either surf that wave or be drowned by it. The European constitution will change for ever the power and status of Parliament as well as the way in which our citizens are governed.
I am glad that hon. Members on both sides of the House have helped to secure this debate on the outline of the European constitution. Five hon. Members requested it with the agreement that we would share the time if one of us were lucky. I send the apologies of the hon. Member for North Norfolk (Norman Lamb) who is attending a Select Committee and those of the hon. Member for Moray (Angus Robertson) who is—appropriately—involved in a sitting of the European Scrutiny Committee.
I am glad to welcome the right hon. Member for Wokingham (Mr. Redwood). His view on the subject may be very different from mine, but I respect it just as I respect his often equally impenetrable spin bowling for the House of Commons cricket team.
The fifth person who co-operated in securing the debate is my hon. Friend the Member for Dundee, West (Mr. Ross). It is a pleasure and a privilege for me to participate in a debate with him: I regard him as my mentor in Parliament. All my mistakes are my own, but my hon. Friend has been a great friend and support to me over many years.
As usual, I shall try to make my remarks as non-partisan as possible. There is a surprising amount of common ground between what may at first sight appear to be disparate views on the European question, and there may be consensus about the way in which the European constitution should be framed. It will happen, so let us concede that, deal with the reality and make the constitution as effective as possible for British and European democracy.
A great many problems must be tackled in relation to the balance between the executive and legislative arms in Britain and Europe. Currently, some members of the Executives meet, often in Brussels, and carve things up between them. They decide what they want to do and the elected and legislative arms are an afterthought, as is so often the case with European scrutiny in this Parliament. That is a fundamental problem. Perhaps hon. Members have something to bring to the party—our sense of democracy and of involving our people and legislatures rather than decisions merely being left to people who know better because they happen to be in the Government of the day.
Why should we be so concerned about what is in the constitution? It will preserve and entrench the power currently vested in our European institutions and will decide how we participate effectively in future decisions that affect us all. It should also enable us to call to account those who make the decisions and, above all, to change those decisions, if we wish, democratically by voting in elections. I am examining the matter not purely

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as a question of Executive power with Presidents and Prime Ministers getting together and working late into the night to cook up a deal that suits them, but as a question of democratic power and how we can involve a wider range of people so that the European project interests and excites people in the UK and throughout Europe.
It is not a matter of not trusting our Prime Ministers or Presidents. In the old communist days in East Germany, when there were riots the Government issued a statement saying that the people had forfeited the Government's confidence—in other words that the people should have somehow tried harder to understand the Executive's difficulties. We should look at things the other way round and ensure that the peoples and electorates of Europe participate in an exciting and potentially ground-breaking project to push Europe further toward consolidating gains that have been made.
There is also a question of defining relationships. Nation states—I say this with an eye to my Conservative colleagues—should be clearly defined in the constitution. If we did that, we could eliminate the fear of federalism that is promoted, especially by centre and centre-right parties in this country, by use of the F-word, as it is called. If we defined what federalism is and what it is not, we could eliminate some of the fear in British politics.
We could place insurmountable roadblocks in the way of the minority who want a superstate by defining the role of the nation state. That minority frightens people, and people at large should he reassured that that is not the concept of Europe in which we want to participate. None of us should fear clarity in a constitution. Clarity will prevent the executive creep that we have at present. The phrase "ever-closer union" implies dynamism and that certain people can decide the direction in which we go, although we might not be consulted. Replacing that executive creep with the concept of a contract between individual nations and a clear, transparent set of rules that bind the nations together would represent real progress.
I hope that we can agree that the European constitution should entrench the doctrine of subsidiarity. That depressing piece of eurobabble conceals one of the most beautiful concepts in democracy: the fundamentally important principle that power should be exercised at the level of democracy that is closest to the people. If my hon. Friend the Minister for Europe, whose brilliance in words and print is known to all of us, came up with a different word from subsidiarity, it would no doubt be emblazoned on his grave, but many of us would appreciate it. A beautiful concept hides behind that horrible word, and that concept should be at the head and heart of the new European constitution.
Subsidiarity is often thought of as protecting the rights of national Governments and Parliaments against those of European institutions, but it should also protect the rights of our devolved assemblies, regional assemblies and local government. Although subsidiarity is part of the treaties of the European Union, they have been completely ineffective and inadequate at enforcing the concept. A lower authority has never used subsidiarity to challenge successfully the power or decision of a higher authority in the EU. Several of us
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will continue to doubt the efficacy of subsidiarity, as it is currently defined, until that happens. In a European constitution, we will require that subsidiarity can be used effectively at many institutional levels in the European Community. The new constitution must bring the concept of subsidiarity to life; otherwise, it will be worthless. The first draft by ex-President Giscard d'Estaing may be an improvement on present treaties but I am afraid that it still falls far short of the clarity and precision that would allow the European courts to arrest and reverse any drift of power from local to regional, from regional to national, or from national to European.
The exercise of framing the European constitution has been likened to that of framing the American constitution several centuries ago by the founding fathers. However, I fear that we have a little further to go before we are in the same league as Jefferson, Hamilton, Madison and Washington. None the less, we should not stop trying. The Americans, of course, had an advantage: they created their constitution before they created a common currency and before they committed themselves to expansion into new territories—I am comparing that with the enlargement of the European Union—whereas the Europeans created a common currency, then decided to expand their territory, and only then, as an afterthought, decided to create a constitution.
We in Europe have an Executive-led, top-down process. Perhaps it had to be that way. We could not start in the same way as the United States of America, and I am not suggesting that, before we start with a clean sheet, we should eliminate all indigenous peoples, as was done in America. In the USA, there was a grass-roots movement. The constitution was a response to Executive over-mightiness rather than a product of Executive over-mightiness. It was an attempt to ensure that the Executive did not dominate and that the legislature and the people had a voice that was taken into account. Only they could create that Executive. The Americans did things the right way round; perhaps we will struggle. However, we can get there, despite the fact that we are doing things differently. The Americans knew that they needed a constitution to secure the will of their people behind the changes that were necessary not only to run a common currency and take in new states, but to provide an agreed system for resolving conflicts of interest between states and local and national interests.
There is one way in which we should draw on the American experience and try to replicate it. When the Americans were drafting their constitution, it was without question the most exciting time in American politics and probably global politics. It provoked a nationwide debate—led by a Briton, Thomas Paine—that engaged almost every American citizen with a vote. I have to admit that, in the pubs and clubs of Nottingham, North, people rarely debate the core competencies of the respective authorities. If you mentioned subsidiarity in Nottingham, most people would think that it was something nasty, related to previous coalmining, that might damage their house.

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I look again to the qualities of my hon. Friend the Minister: we must seek to excite people and involve them in this process. The Minister is well qualified, as is the Secretary of State for Wales and the Foreign Secretary. When they choose to be, all three are powerful advocates. We must not allow this debate to he dry and sterile, dealt with in eurospeak somewhere in Brussels. We should also involve this Parliament. I pay tribute to my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) and to the right hon. Member for Wells (Mr. Heathcoat-Amory) who have represented the House so well in the European Convention. However, they were selected by the Executive and not by the House, and, although they have done an extremely good job so far, that cannot be the full extent of parliamentary involvement. Parliament must come along with and understand the process. Should it have to give anything up, Parliament must agree to what it is to give up. We need to think very carefully about how the process is managed, otherwise, if Parliament or the public feel that something is being imposed on them, they will reject and resent it. That would be wholly unnecessary.
I hope that we could perhaps use pre-legislative scrutiny, which is coming into fashion in the House—that is very welcome. We could hold sessions to debate the issue while allowing people to view our debates online and to e-mail their comments, which could be filtered through to hon. Members. Instead of having 40 or 50 eminent founding fathers as the United States constitution had, we could have several million founding fathers and mothers of a British input into a European constitution. That is a great prize indeed. I hope that my hon. Friend the Minister will take away that idea and other ideas about how we might involve Parliament and the wider public.
With regard to the American constitution, the founding fathers decided to make their constitution memorable and portable: something that would fit into the hearts, brains and pockets of every American schoolchild. The founding fathers wrote their constitution in clear, uplifting, elegant language to inspire loyalty and sacrifice among their citizens. They created a constitution that people have been prepared to die for. I would be delighted if we in this place were able to contribute to making a European constitution of that nature.
I am afraid that the draft outline that was prepared by ex-President Giscard d'Estaing has all the inspiration of the EU sheep meat directive, with which I know all hon. Members are familiar. The draft outline is dense, opaque and full of eurolocutions that have already brought high levels of stress to readers and listeners throughout Europe. Some will blame the translators for the tortured language, but that is unfair. That document loses a lot in the original.
My right hon. Friend the Secretary of State for Wales has a way with words, but his touch must have deserted him, or perhaps he was absent, when the Convention drafted article 14:
"this structure shall ensure the consistency and continuity of the policies and activities carried out in order to attain the Union's objectives—activities both in the areas of competence allocated
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wholly or partly to the Union and in those areas in which competence belongs to the Member States and is jointly exercised by them"
—and that is one of the highlights.
Mr. Deputy Speaker (Mr. John McWilliam): Order. Standing Orders require that a Chairman understands what is said and they also deal with the language that hon. Members use. I am having trouble.
Mr. Allen: Mr. Deputy Speaker, you make the point far more eloquently than I do. One thing that I hope my hon. Friend the Minister will take away from the debate is—seriously—the need to look for a poet. We need someone like Madison who, after 40 or 50 people had decided what was needed at the heart of the constitution, was sent away to write it. The founding fathers said, "James, go away and write the draft"—and he did—
Mr. Richard Spring: What about Alistair Campbell?
Mr. Allen: I am already hearing suggestions about who that individual might be. None the less, in all seriousness, I hope that my hon. Friend will find someone somewhere in Europe who can put together with coherence, elegance and inspiration some of the things that are currently being talked about.
I have to compare the language of the draft constitution with the preamble to the United States constitution:
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
Those are words that ring down the centuries.
The Minister for Europe (Mr. Denis MacShane): The preamble of the American constitution is written in beautiful English, but if my hon. Friend delves deeper into its articles he will find exactly the lawyers' gobbledegook that was put into it in order to protect government from attacks by its citizens via the courts. All constitutions must, at some stage, have the precision and complex clarity that the constitutional lawyers always insist on. I invite him to read further; if he does so, he will find that a lot of that poetry disappears.
Mr. Allen: I will resist the temptation to read further. Although the functions are defined, the language in which that is done might be thought of in terms of the mists of history. However, as my hon. Friend the Minister is a highly literate person who is very well read, I hope that he will agree that even the worst parts of the American constitution read better than the best parts of the eurobabble draft that Giscard d'Estaing has put together.

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I wish to make another point about the elegance of language and the American Declaration of Independence. We are going to sign a declaration of dependence. There is nothing wrong with that, and I hope that in doing sa—in subsuming some of our powers within a broader European context—we might consider a form of words such as:
"We hold these truths to be self-evident:
That all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness; that, to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed".
If we employ words not only of that beauty, but of that precision, there would not be a European citizen—regardless of whether they were a president or a pauper—who could mistake the intent that the people in Brussels and elsewhere derive their just powers from the consent of the governed. I hope that that sentiment will be expressed in the constitution.
Democracy, subsidiarity and inspiration—rather than process—should be the guiding principles of the European constitution. The first draft has been started and it is going in the right direction, but it has not gone far enough to meet the needs of the peoples of Europe. There is now a great risk that the European constitution will become more fudged, obscure and remote from its citizens, as member states seek forms of words to resolve their differences.
What is to be done? When you want a job to be done, you must do it yourself. In my spare time, I have written a 20-article constitution that is two and a half pages long; I will leave it with my hon. Friend at the end of the debate. It sets out the principles of subsidiarity, democracy and human rights. I tried to imagine how the founding fathers in America might have undertaken their task, and my draft deliberately mimics their language, and directly borrows several of their provisions. I hope that the Europeans will not be too vain to deny themselves the benefit of American constitution making, the results of which have endured successfully for more than 200 years. My hon. Friend the Minister has a copy of those fundamental articles, and they can also be found on the YouGov website, which has a growing and creative list of comments from respondents.
I mention my own modest effort because it illustrates what our Parliament could collectively do—all our citizens could participate in that through e-democracy. The House could generate that debate and thereby excite and involve young people who want to have a stake in our future and say what they want our institutions to look like and how our powers should be exercised in our society. This House should not monopolise the process of constitution making, but it should at least have a stake in that process, and then involve all our citizens in it.
My hon. Friend the Minister is making great efforts to involve the regions, academics, business people, trade unionists, students and many other people, but the Government must go one step further. They must get the British Parliament involved in a serious way—rather than in a nominal way by selecting the people who will represent us at the European Convention, or by having a bit of scrutiny at the European level, or even by having a debate on the Floor of the House on Monday.
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However, it is commendable that that debate is taking place, and I pay tribute to my hon. Friend the Minister for having pressed for and achieved it.
Those are welcome steps, but they are only small steps; they do not involve Parliament and people as of right in their own constitution making. We must get this right, or people will turn against the whole concept of the European constitution, which would be totally unnecessary. We must start to see our Parliament and our people as partners in the political process, rather than as threats to it.
Once we have reached the conclusion of a process of national consensus, I hope that the European constitution will be put to a referendum in Britain. If the process has been conducted properly, it will sail through, because we will all have bought into it and put in the safeguards and roadblocks necessary to reassure those who—possibly with good reason in certain circumstances—are sceptical. I think of the right hon. Member for Wokingham. They need to be reassured, just as other people need to be inspired by the European vision. Their views are as valid as those of any pro-European and they need to be taken into account in the process of constitution making. Otherwise, a referendum, which I believe is essential, will fail. Were we to have a referendum today, a European constitution would not be accepted. I should like us to reach a position in which we have convinced people that a European constitution will not only be accepted but will have the support of all hon. Members.
Mr. Andrew Tyrie: Is reassurance needed because people believe that a constitution will slowly suck us into a position in which one day people wake up and find that their country has gone? Does the hon. Gentleman think that it might be a step in the right direction to add an exit clause to the constitution? That would provide reassurance. Most treaties, NATO, the European Council and the Council of Europe have exit clauses.
Mr. Allen: I very much agree. Having said that we have to learn from other constitution makers, not least the Americans, we should also learn from the experience of the United States during the civil war. Although I hope that we shall never repeat the difficulties of the last century, when European nations were at war, that is why I have included an exit clause in my draft. It cannot be done casually; it has to be worked on carefully. I know that the hon. Member for Chichester (Mr. Tyrie) takes great care to think such matters through, as do his Conservative colleagues. If we cannot reassure open minded, thoughtful colleagues in all parties about the true intent of a European constitution, we should not have one, because it is designed to help them just as much as to further a concept of the European project.
I shall conclude my remarks, Mr. Deputy Speaker, as I know that my hon. Friend the Member for Dundee, West wishes to catch your eye, as does the right hon. Member for Wokingham, who assisted me in convening the debate. I hope that they will be successful. Governments should not regard debate and scrutiny as a threat, but as an opportunity to strengthen the British contribution to the European Union.
We do not want to arrive late again, being churlish and criticising at the edge because a Franco-German alliance has already sorted something out. We should

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get in there now and put some British constitutional sense into the drafting. Above all, we should make common cause with the peoples of Europe, whose interest in democracy and human rights and in clear inspirational language is as important as ours. If we do that, we will carry not only the majority in the House, who should be partners in the process, but a majority in the country. We will have a constitution that suits not only our nation, but all European peoples, the awful tragedies that afflicted our continent in the last century will not be repeated and in future we shall be able to live together in peace.
11.28 am
Mr. John Redwood: I congratulate the hon. Member for Nottingham, North (Mr. Allen) on having secured the debate and on the spirit in which he made his contribution. He was exaggerating in his flattery of my spin bowling. I have never claimed to be a great bowler. I see that I share the problem with some who play for the England team, although they have achieved more in cricket than I have.
I wish to be a voice for democracy—for making decisions in the United Kingdom that make sense for the people whom we represent. I particularly enjoyed the passages in the hon. Gentleman's speech that stressed the need to carry people with us on this massive journey, to explain matters in language that they understand and to ensure that the politicians acting on their behalf do not over-reach or go further than people want, and that they surrender powers to a European Government only when that makes sense and can be sold to the British people as just.
I also enjoyed the fact that the hon. Gentleman introduced executive creep—an interesting character—into the debate. I am particularly worried about this character because it is working away in Brussels day by day. Often, I wake up to discover that Brussels has taken decisions on our behalf, yet we knew little or nothing about them and may not have agreed to them. Our Government may have been alert but lost the argument, or the decision may have gone through because the Commission, which is a very active executive body, with a lot of work to do, was in a hurry and did not carry all elected politicians with it. Equally, our Ministers have many other roles to perform.
Successive Prime Ministers of different persuasions have told us very similar things about Europe, and there is a surprising continuity in our debates with our partners in Brussels. Prime Ministers tell us that Europe is coming our way. They therefore accept that it was not in line with what we wanted when they took office, although they add that, thanks to their negotiating skills, it is definitely coming our way. That is not a party political point; the same thing has happened under Conservative and Labour Prime Ministers.
My worry is that Europe is far from coming our way. What is our way? Again, there is surprising continuity. Prime Ministers right, left and centre nearly always say that they want a Europe of nations and that the most important decisions must be taken in the United Kingdom through a democratic process. They are happy to co-operate with our partners in several
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respects and to pool sovereignty in other, very modest ways. They want free trade, friendship and, where possible, agreement, but they want the big, life-and-death decisions about military and economic affairs to be taken in Britain.
The draft constitution makes it clear, however, that Europe is far from coming our way. Indeed, many of the big decisions are sliding under European control. It is our duty in the House to expose that process and to cross-examine the Executive, who represent our interests, to find out how they will resist it. How will they deliver the Europe of nations that they say they want? How can they go on claiming that we have a Europe of nations when a group of dedicated men and women are settling on a constitution that goes a long way towards creating a united states of Europe? Indeed, one of the Convention's suggested titles for the EU is the United States of Europe. The phrase is credible, and a united states of Europe would be much more centralised and have a much more powerful Government than the free-trade friendly Europe that is corning our way, according to the euro myth in Britain.
The second argument that we hear from successive Prime Ministers is that our sovereignty is not at risk. What is sovereignty? It sounds like a rather abstract concept. Does it really matter? Of course it does. Sovereignty is the right to make our own decisions, to be boss of our own house and decide how we paint the front door, when we shut it and when we open it. If we are not careful, we will discover that all too many decisions that affect our daily lives are no longer made by a democratically elected Government in Britain, as we had thought.
As a British democrat, I would far rather live under an elected Labour Government, with a majority in the House of Commons, in the belief that I could criticise them, push them, influence them and, one day, I hope, get rid of them. That would be preferable to living under an unelected or indirectly elected Government in Brussels, whom I could scarcely ever influence, get at, cross-examine or throw out of office. Losing our sovereignty is that fundamental, It means that instead of being able to use our vote and our voice to influence those who govern us or to remove them when things go wrong, we are left almost powerless and are governed by people whom we scarcely know, can rarely influence and cannot throw out if they make a mess.
The third argument—in some ways it contradicts the idea that our sovereignty is never at risk—is that pooling sovereignty is "good for you". That is based on people confusing sovereignty with power. It is self-evidently true that if 12 or 15 countries are put together and governed as one, that unit will be more powerful than any of the individual participants that predated it. However, that is not the same as pooled sovereignty, with individual countries being more powerful because they have joined a union. Each country has only one fifteenth of the influence, or a slightly higher proportion for larger countries, on the decisions of the much bigger grouping.
I would compare that to having a bank account with the neighbours. It would give someone more spending power if he and his neighbours had a single bank account. If he were clever at influencing it, it might even give him more direct power. However, people do not do that because they could not guarantee that they could

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spend the money in the account when they wanted to. They could not guarantee that they would be able to get their hands on their neighbours' money, or that the neighbour could not gel his hands on their money.
Even though people like their neighbours, want to cooperate with them and go to drinks parties with them, they do not have bank accounts with them. Ultimately, people know that that would be confusing power with sovereignty. When it comes to people's own affairs, they would rather be sovereign than potentially more powerful.
Mr. Ernie Ross: The right hon. Gentleman is wrong about that. The growth of credit unions in this country shows that ordinary people are putting their money together. I am sure that there is a growth of credit unions in his area. Debates on the need to support such unions take place in the House all the time.
Mr. Redwood: The hon. Gentleman makes my case for me. People volunteer to join a credit union, can leave it at any time, and always have access to their own contribution. I am happy with that kind of Europe. If everything is done by unanimity—if this great House of Commons can decide whether or not it wants to enter into an arrangement, and in future can decide that it no longer wants to continue with such an arrangement—that is wonderful.
I want a Europe of nations in which we co-operate. That means many more decisions taken by unanimity and, I accept, that we would do fewer things and make fewer decisions together. On many occasions, the British view will be different from that of France and Germany, and why should that not be so? The credit union is a perfect analogy. By working together with unanimous agreement on occasions, we will have more power in the world as a whole. We want to do that, but we should not be forced to do it against our will. No hon. Member would join a credit union if it reserved the right to take his money and not give it back.
Mr. Kelvin Hopkins: I am following the right hon. Gentleman's argument with great interest. Does he agree that the best example of a powerful group of nations in which sovereignty was not voluntarily pooled was the Soviet Union? The first thing that happened after the break-up of the Soviet Union was that the countries established their own sovereignty, with their own currencies.
Mr. Redwood: That is a powerful point. If a common currency was so good, would not those countries have kept the rouble? They could not wait to get out of it because they associated it with tyranny. I do not say that the tyranny of the EU will be as massive as that of the Soviet Union, but if we surrender the right of veto, we surrender the right to make our own decisions and have control over our own affairs, and we will come to rue the day. The British people will not thank us for it. At some point in future, an issue will become massive—who knows what it will be? The British people will say to their elected representatives, "How dare you give away our power to sort this matter out? Why did this happen? Why did it take place by stealth? Why weren't we told at the time? Why didn't we have a referendum?"
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How right the hon. Member for Nottingham, North was to say that if the Government want to sign away more of our powers in the future constitution—I fear that they do—they should at least have the decency to put the matter not only to the House of Commons to debate and vote, but to the people at large. Too much power has been given away already without their express permission. It is high time that we had a full national debate on the issue, so that we could see where strength of opinion lay. Then we would see whether the Minister was right about what people wanted. He might get his endorsement, and I as a good democrat might have to admit that I had lost the case. However, if I am right—I suspect that I am and that most people are with me—[Interruption.]
Mr. Deputy Speaker: Order. Hon. Members must not squabble across the Chamber while the right hon. Member is making his speech.
Mr. Redwood: I am grateful for your protection, Mr. Deputy Speaker. If, as I suspect, I am right, we will have our three weeks in court during the referendum campaign and we will have settled the issue and reconnected the views of the British people to the views of the elected Government.
Mr. MacShane: The right hon. Gentleman's argument is not with me. The draft constitution was drafted by my hon. Friend the Member for Nottingham, North (Mr. Allen)—he is the one who wants a constitution. The right hon. Gentleman should address his remarks to—
Mr. Redwood: Much as I admire the hon. Member for Nottingham, North as a fine democrat in the House, my argument is with the Government because it is they who will sign the real constitution for Europe. I have not heard the Government say that they would veto a single thing in the draft constitution and I have not said that the Government will take their bat away and refuse to play the game. My view is that the Government want to get us into the constitution by stealth. They will then say that the constitution is perfect for us, having played no real part in influencing, fashioning and shaping it. Then they will say that there is no need to put it to the British people because the Government judge that it does not represent much of a change. I think that it will represent a substantial further change.
I want briefly to raise a series of issues that arise under the constitution—
Mr. Allen: I intervene to help the right hon. Member for Wokingham and my hon. Friend the Minister. Reference was made to my European constitution and I am flattered that it has even impinged on my hon. Friend's busy schedule. It may assist the Committee if I quote from article 2, which states:
"Membership of the European Union shall be reserved to nations which guarantee and provide for all their citizens the rights established in this constitution and the European Convention on Human Rights, and whose Governments are chosen in free and fair elections."
On secession, which I hope will never be on the agenda but must be there as a safeguard, it states:

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"A nation may secede from the Union only at the wish of its people, expressed in an election or referendum held for that purpose."
So there is a way out, although I hope that it will never be necessary. It is there just in case. I hope that the right hon. Gentleman will continue in the constructive vein in which he made his points because he sometimes makes the intellectual mistake of some colleagues who are opposed in principle to the European Union and who imagine that everything in the garden is lovely at the moment and that the British Parliament is sovereign and can deal with these matters. Subsidiarity will help him to make—
Mr. Deputy Speaker: Order. Interventions are supposed to be just that. The hon. Gentleman's intervention is turning into a speech.
Mr. Redwood: Thank you, Mr. Deputy Speaker. I must crack on as other hon. Members wish to speak.
I have some questions for the Minister. Have the Government signed up to the idea of five overarching, educational targets? When they do so, will not that mean that we are circumscribed in the education policy that we can follow in the United Kingdom, because our spending priorities and educational priorities will have to be geared to those five targets? Is that another sphere that will move from British national control to European control? Is it true that we have been requested by the European Union to denounce the open-skies agreement that this country successfully negotiated with the United States? I have confirmation in written answers that the EU is not yet empowered to negotiate a Europe-wide open-skies agreement on behalf of all 15 member states, but I have been advised by people who follow the matter carefully that the EU thinks that our open-skies agreement as a separate nation was wrong and is beginning to make moves to get us to rescind it? Why do we have to go through this process? Is not that a power too far for the European Union?
Many of the architects of the new constitution believe that the next big advance to be made by the EU, following in its view the successful introduction of the euro for most member states, is to have more common taxation. It wishes to have common rates of business taxation and to create VAT as the first truly Europe-wide tax collected by Europe and distributed from the European Government back to the member states on a formula of Europe's choosing rather than our own. Proposals for other independent EU taxes are also well advanced. How far will the process go? Will the Minister give an assurance that the Government will veto every proposal that wishes to take away the sovereign right of the House of Commons over taxation and give it in part to influences and control from Brussels?
The European Union is well advanced in wishing to take over what was the third pillar--home affairs and criminal justice. The 32 offences under the European arrest warrant represent a significant advance towards an EU criminal jurisdiction. Will the Minister give us an assurance that we will resist the imploding of the third pillar into EU competence—the takeover by the EU of important parts of our criminal justice system? Or are
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we to say that the House of Commons and House of Lords are no longer capable of making important decisions about criminal justice in Britain?
Mr. Allen: Does the right hon. Gentleman accept that if we define subsidiarity accurately in a European constitution, and it is justiciable, the very examples that he has just given would be illegal? In addition, were a euro state to seek such competences, we could take it to court, either as a nation state, or as a region or as a local government unit? That would be our strongest defence in retaining the integrity of all those subsidiary bodies.
Mr. Redwood: I have some sympathy, but I do not think that I am in favour of subsidiarity. I want to look at it the other way up and ask what powers we, as a sovereign nation, are prepared to entrust for the time being to the European Union. I would be happy to clarify and define those powers, but I would want unanimity. I would like us to propose that qualified majority voting should be rescinded. I see no need for Europe to go on legislating at the current pace. The argument for QMV is that it speeds up legislation, but Britain should now want to slow the pace down. The most obvious way of doing that would be to say, "Let us go back to a system where, if all members do not want a piece of legislation, it will not be rushed through—we will wait until we can get our ducks in a row."
Mr. Tyrie: Will my right hon. Friend give way?
Mr. Redwood: I really must not, because other hon. Members wish to speak.
Do the Government plan to repatriate our much-maligned and damaged fishing grounds? The only solution is for the British fishing industry to take them back under British control and to have our own regime, so that we can try to nurse our stocks back to former levels. We will have to impose limits, but fishing should benefit the British fishing industry. Have we not been too generous? It is particularly unfair that there is no common fishery in the Mediterranean sea but that there is in the North sea. Why do we not harmonise and standardise by bringing policy for the North sea into line with that for the Mediterranean, and reassert our claim to our own territorial waters? I would trust the Government to manage it better than the EU—no greater praise could I possibly lavish on the Government—although, of course, I am sure that a Conservative Government could do it even better, but we will have to wait a while for that opportunity.
All parties agree that the common agricultural policy should be reformed. All seem to agree with the proposition, which I strongly support, that the common agricultural policy is an affront to the developing world and is not good for consumers or even for farmers in Britain. It achieves the triple whammy of doing damage to our legitimate competitors overseas, doing damage to our farming interests through its regulatory powers and doing damage to our customers by overcharging. It should be possible to design something better. Will the Minister assure us that the Government intend to do that? That should form an important part of negotiations on the convention. Will the Minister agree to veto any further moves towards a common defence

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system and a European army? Will he agree that we need unanimity on decisions over common foreign and security policy?
What should the UK do? In the negotiations, we should put forward a positive and forward-looking set of proposals that give reality to the fine words of a Europe of nations. We should say that we want true devolution of power. We would give Europe only those things that we think would make sense. We should base decisions on unanimity, not on qualified majority voting. We should strengthen the democratic checks on the exercise of EU government power. We should slow down the legislative process and open up that process to the press and public. We should be the voice of democracy and ensure that power is exercised where it truly belongs: in countries where people relate to that authority and feel part of that democratic system. Of course, we will need a referendum on such mighty issues, but will the Government not just talk the talk, but walk the walk, by proposing a constitution that creates a proper, open, democratic and fair Europe of nations?
11.49 am
Mr. Ernie Ross: First, I pay tribute to my very good friend, my hon. Friend the Member for Nottingham, North (Mr. Allen). We have known each other for more than 24 years. Let me tell my hon. Friend the Minister to "watch this space". When the former Member for Kilmarnock and Loudoun and I were seeking to redefine the parliamentary Labour party, my hon. Friend the Member for Nottingham, North was our secret agent. We were two lone, small voices, with that large person behind us. We bought the parliamentary Labour party to its current point. It now has a constitution and standing orders. The sort of meeting that is taking place right now—and that we are missing—did not take place before we forced it on to the agenda. My hon. Friend has a very good track record on such matters. I would not simply put the proposed constitution on one side; I would look at it very seriously. I am sure that it will contain elements that my hon. Friend the Minister will want to use some time in the future.
It is always difficult—even frightening—to enter a debate on something such as article 14. I agree with the right hon. Member for Wokingham (Mr. Redwood) that we need to explain ourselves better. I would certainly recommend to everyone the tour undertaken by my right hon. Friends the Foreign Secretary and the Secretary of State for Wales, who was then Minister for Europe. They went round the country explaining what the European Union was about and what they were hoping to achieve. I would ask everyone from Scotland to read the speech that the Foreign Secretary made in Edinburgh on 27 August. It is a powerful speech and gives good reasons why the people in Scotland—polls demonstrate that they are not afraid of Europe—should want to be involved in the European Union. It reflected the fact that as Scots we are proud of our nation. However, that does not make us insular or inward looking. We have always had the advantage of feeling that, as a small country, we need to express ourselves on a wider stage. Whether that is in the Government or in Europe, we have never been afraid to take on those challenges and to look at where Scotland should go. That should not be understood in a narrow,
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nationalistic or xenophobic sense. The feeling is integrationist, in that we see the benefits of Scotland in Europe. We see the benefits of Scotland in Britain. That is why we argued for a Scottish Parliament in the United Kingdom.
However, we need to reassure the public. Even in Scotland, many members of the public want to know what Europe is about. They want to hear our agenda and to know that the dramatic decline in Britain's standing in Europe that was witnessed during the Labour party's 18 years in opposition has been reversed. As the Prime Minister said, we are now
"a leading partner in shaping the Europe of the future, not following reluctantly the shape moulded by others."
That is important.
If the right hon. Member for Wokingham genuinely wants to take part in the debate, he should join us in going round the country, saying how he thinks that there are difficulties and problems. He says that he is doing that, and I do not doubt it, though I do not hear people in Scotland saying, "We had John Redwood up last week. That's us opposed to Europe." That just does not happen. However, they do say, "We had the Foreign Secretary up, and we agree with a lot of what he said. We see the purpose and reason behind it, and we see it's in Scotland's interest." The Foreign Secretary demonstrated that we have used our own experience in the way in which we have tackled inflation and created jobs. The Labour Government have been good for Scotland.
Mr. Hopkins: My hon. Friend is quite right. The Government have achieved great things economically. Does that not stand in great contrast to the terrible problems that Germany now faces as a result of the eurozone, which the Governor of the Bank of England has today highlighted?
Mr. Ross: The target is to create 20 million new jobs throughout Europe. In the first couple of years, we have not done as well as we should, but that does not mean that we should give in and become more protectionist. It simply means that we must argue our agenda for lighter regulation within the economy to help to create those jobs. That is what the Foreign Secretary said in Edinburgh. We need to argue that our model is a good one, which we could not do under the last Conservative Government because they only wanted the table. We can argue our case, saying "Here is our experience, learn from our experience because it is not a bad one." Of course, we have made mistakes and there have been moments when people did not agree with our policy. However, we can now look back and see that we have created 300,000 jobs.
Mr. Redwood: The present Government are no more at the table on eurozone matters than were the last Conservative Government. Does the hon. Gentleman think that that is a huge mistake? Would he urge his Front Bench to hold a referendum immediately to solve the problem?
Mr. Ross: Obviously not. The Government have laid down clearly the conditions under which we would hold a referendum on the euro. We are not stupid—we know

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that there is work to do and at least we admit that. At least we are at the table with our partners, setting objectives and telling them about the experiences that we have had, which they could learn from and use in their countries.
None the less, the right hon. Member for Wokingham raised concerns that also concern us. The common agricultural policy is probably the issue that causes people most concern. At the recent world summit, with reference to our programme of sustainable development throughout the world, we had to accept that the common agricultural policy was a problem. Interim reform proposals were in the pipeline, and I wonder how far they have progressed and where they are. Are we any closer to those interim proposals, which would help us to do what we want to do in the world?
I part company with my hon. Friend the Member for Nottingham, North, good friend that he is, on the word subsidiarity. He thinks that we need to find a new word, but that is always dangerous. I remember the first time that the word was used in Scotland. A member of the Scottish National party challenged one of my colleagues, on a television programme, to tell people what it meant. My Labour party colleague did not have a clue, and he stumbled and trawled around in trying to find out what it meant. That is not surprising, however, as the word was not generally understood then. I believe that it was first used in the Catholic Church. The religious persuasion of our candidate in Govan is not important, but he had clearly never heard of it. I might have heard of it at that time, but I did not really understand what it meant. It certainly floored my colleague on the television programme, and he never really recovered.
So, we have subsidiarity, and we now understand what it means. The Government have launched the most radical overhaul of our constitution since the Reform Act 1832. Unlike the right hon. Member for Wokingham, who voted against the Regional Assemblies (Preparation) Bill last night, we have given Scotland a Parliament, and Northern Ireland and Wales an Assembly each. We are preparing to give people in English regions assemblies as well, if they wish it.
Mr. Allen: It seems that however consensual one tries to be, there will always be colleagues who stretch the elastic to get back to their partisan positions. Subsidiarity is not an especially appropriate word, as it is confusing and people often do not know what it means—they would have to be in the know to know what it meant. Perhaps the word democracy would be sufficient, but it has been so abused over the years that I shall leave it in the capable hands of my literate hon. Friend the Minister for Europe to provide something that will sparkle and excite the British people.
Mr. Ross: I was about to ask a specific question. In his Edinburgh speech, the Foreign Secretary drew attention to the need for a mechanism to ensure that subsidiarity works, but have we yet found that mechanism? He said that
"the lack of an enforcement mechanism for subsidiarity has meant that the principle can be ignored."
I do wonder whether we have found the mechanism.
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When I tried the marvellous exercise of weeding through all this stuff, I just gave up. I realised that if I started to read through it all, I would miss the whole point. Surely a few simple points could be made. Currently, EU treaties are long, complicated, confused and overlapping, but we need clear and concise treaties to clarify what the EU is, what it does and how it does it. That would help to bridge the gap of understanding between Europe and its citizens. A better organised European Union would then be in a better position to deliver practical benefits.
Unlike my hon. Friend, I welcome the draft text. At least we have something to work with and to provide the basis for debate over the next six months. We must build the text up. I do not want to get into name changes. We do not need a united states of Europe or a federal superstate. Let us stick with what we have—dual citizenships—and try to keep it as simple as we can. The Minister should watch this space because whatever my hon. Friend the Member for Nottingham, North says will happen on day one is likely to arrive on day 10.
12.1 pm
Mr. Kelvin Hopkins: I am grateful for the opportunity to speak. I shall be brief because other hon. Members want to contribute to the debate.
I congratulate my hon. Friend the Member for Nottingham, North (Mr. Allen) on securing the debate and I applaud his democratic sentiments. I share them entirely, but I am unsure whether the European Union shares them. I also applaud the statement made many times by the former Minister for Europe, now Secretary of State for Wales, that the British Government support an association of independent democratic states in the EU—precisely what I support. I agree strongly with my hon. Friend the Member for Nottingham, North that if we cannot achieve a democratic constitution for Europe, we should not have a constitution at all. The detail is important.
Parliament was founded—long before it was democratic—to keep control of spending. It was all about the barons trying to control the King's spending. If Governments do not have control over their economies, they are undemocratic and illegitimate. That is the problem with the European Union. We have already' seen the problems that have arisen when sovereignty over economic matters has been taken away from members of the eurozone—not yet, one hopes not at all, from our own democratic Parliament.
The European Central Bank—appointed for eight years and outside political control—currently controls interest rates. It was set up at the insistence of the Germans, who have recently tried to press that bank to bring down interest rates, which are too high for their economy. However, they are too low for the Spanish and Irish economies, which causes serious problems. The growth and stability pact represents another attempt to shift power away from democratic Governments towards an agreement that will, through the Commission, automatically control the fiscal stance of member states. Once again, it is a move away from democracy. Some democracy is maintained through the Council of Ministers. I support a strong Council because it allows democratic Governments a major say about what happens in Europe, and I base most of my hope there for the time being.

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What of the European Parliament? Today I read a report by a Liberal Democrat MEP, suggesting that the legitimacy of the European Parliament needs to be questioned. Indeed, during the most recent European election when we had for the first time the list system of proportional representation, which I deeply oppose, there was in my constituency an 18 per cent. turnout for a Parliament that is supposed to have a major role in democratic government.
I have seen the European Parliament in operation and believe that it is a farce. There are no thriving, live debates in which hon. Members can intervene on each other and debate the issues in depth. Instead there are three-minute statements by hundreds of Members of the European Parliament from all over Europe who get views and small globules of information on the record but have no real power. The democratic institutions of the European Union are deeply flawed.
I am being signalled that I should conclude my remarks. I have made most of the major points. This very day, Germany is in economic crisis. It wants to reduce interest rates to relax its fiscal policy, but it cannot do so—it has been told to do the opposite. As I mentioned earlier, the Governor of the Bank of England said in The Times today that Germany's problems arise from its membership of the eurozone. As long as we have the eurozone and members still joining it, the democratic legitimacy of the European Union will he in question. I suggest that the looser association of member states that should be the future of the European Union will result eventually in the abandonment of the euro and economic and monetary union, and in much more relaxed economic management so that democratic governments can control their economies.
12.6 pm
Mr. Michael Moore: I congratulate, as others have, the hon. Member for Nottingham, North (Mr. Allen) on securing the debate, along with a consortium of other hon. Members who are interested in the issue. Clearly, he has not lost his whipping ability of recent time. I also commend him on his recent accolade by The Spectator as Back-Bencher of the year. I am sure that he was pleased to receive it and that it is not an embarrassment to him.
We have heard a range of views. Much of the analysis can be shared among and within parties, although perhaps at times aspirations are different. The hon. Member for Luton, North (Mr. Hopkins) specifically agreed with the proposition that any constitution that is put in place must be democratic. I absolutely endorse that view although I also point out that not having a constitution does not necessarily lead to democracy. What we have at present is certainly open to legitimate challenge on the lack of democracy across the EU and its institutions.
The central themes that we are discussing are founded on the basis that the EU is often remote, bossy and unaccountable and that the democratic settlement between the EU and its citizens is deficient. As we contemplate enlargement in the next couple of years, it is vitally important that we address such issues. The future of the European Convention is very significant in that respect. I hope that we will have an opportunity to
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debate the issues at length in the Chamber before long, because we have had no opportunity since the last discussion before the Seville summit earlier in the year.
It is clear that the Convention's work is gathering momentum and is being taken seriously. Any doubts about that are dispelled by the fact that the German and French Foreign Ministers have become delegates to the convention. I wonder whether our Foreign Secretary has any plans to follow suit. Britain certainly must not miss another opportunity, in the grand British tradition within Europe.
A constitution is undoubtedly necessary because at present we have a series of complex treaties with truckloads of supporting legislation. It is surely questionable whether the experts understand all the documentation, and there is no question of ordinary people doing so. I believe that the Convention's first draft is worth while but rather thin on detail. What we must hope for when it finalises its work is a clear statement of what the European Union is and how its various institutions and member states fit together. That must be the first stage of reconnecting the EU with its citizens. Recognising the rights of EU citizens will be important, too, and in that respect we would support the incorporation of the charter of fundamental rights into the constitution.
Apart from setting out those rights, the most important challenge will be to clarify the competencies of the EU as opposed to member states. There has been a debate about the elegance of the word subsidiarity, but no question about the need for the principle to be at the heart of the EU's activities. Decisions affecting the lives of citizens throughout Europe must be made at the most appropriate level. Lip service is paid to that principle, but too little scrutiny occurs and too much goes by default. There must be not only a clear restatement of subsidiarity, but adequate scrutiny of the reality by Parliaments at national and European levels.
We may not disagree on the nature of the road map to a new European constitution, but we must be absolutely clear that the constitution-building process is a great opportunity for us, not the worrying threat that some portray it to be.
12.10 pm
Mr. Richard Spring: I warmly congratulate the hon. Member for Nottingham, North (Mr. Allen) on his highly original, interesting and well-prepared speech. I thank my right hon. Friend the Member for Wokingham (Mr. Redwood) for making some excellent points that reflected great originality. Several good speeches were made, but I particularly applaud the hon. Member for Dundee, West (Mr. Ross) for his work over a number of years as chairman of the Westminster Foundation for Democracy.
Valéry Giscard d'Estaing's draft constitutional treaty is the result of a considerable amount of hard work and effort by several distinguished European politicians. It is thoughtful and imaginative, but in many ways fundamentally misses the point. The main challenge in Europe is how to address the democratic deficit, and we minimise that challenge at our peril. Europe stands on the brink of a new era. Within the next two years, substantial enlargement will take place. To make the European Union viable for the long term, its structures

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must reflect a decentralised and more flexible union that is much quicker to respond to people's wishes and to respect their national differences. All hon. Members would accept that there is a dangerous disconnection between the peoples of Europe and the architecture and institutions of the European Union. Re-engaging people with that process must be at the heart of whatever we do.
That will require a revision of the treaties, but it does not require a new constitution that, for the first time, would explicitly give the EU an autonomous authority of its own, thus changing the very basis of the structure of relationships that has existed between its members. It was frankly absurd for the Foreign Secretary to compare a European constitution with that of a golf club. A constitution would vastly increase the authority of European Union institutions. He called for a simpler statement of principles, but, as we know, constitutions have a great ability to snowball, gathering more importance over time. Accountability and democracy must be the standards by which we judge any new treaty. Although I am pleased that under article 8 any new competency that is not conferred on the EU by member states remains with member states, the principles of subsidiarity and proportionality must lie at the heart of our thinking. In considering the architecture of the European Union, it is important that national Parliaments play the key role. However imperfect, they are the expression of a country's democratic will, and to override that with a supranational written constitution would be to go in entirely the wrong direction.
There needs to be a clarification of the EU's powers, including a clear set of competencies. That would certainly make the EU more accountable and comprehensible, but I do not believe that a treaty of competencies needs to be reinforced on a constitutional treaty basis.
The EU's proper direction is clear: it must be more accountable, involve national Parliaments and clarify its rules. It does not need a supranational structure, which is the implication of many articles in the draft constitution. As my right hon. Friend the Member for Wokingham pointed out, there are also provisions for joint citizenship and the abolition of the EU's three-pillar structure. Could anything more absurd be conceived than having our foreign policy governed by qualified majority voting? That would certainly increase the unelected Commission's authority over justice and home affairs, and make the Union more distant and less democratic.
The draft constitution anticipates the incorporation of the charter of fundamental rights, which would represent a vast increase of the EU's competencies and of judge-led law. Nothing alienates people in this country from the institutions of the European Union more than judge-led law, and the incorporation of the charter in any constitution would see a massive extension of that, exacerbating the question of the democratic deficit.
Since the EU's inception and during its evolution, much has been accomplished, and much of that has been wholly desirable and good for the people of Europe. We are now at a crossroads. We must re-engage people and find an architecture to do that. The idea of a supranational authority in the form of a written
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constitution, which is constantly tested by judges and to which is attached a charter of fundamental rights, is entirely wrong. The urgency is I o bring Europe back to the people and give them a sense of ownership, not create a centralised authority, which would become a bean feast for judges and endanger the precious relationship between acceptability and accountability that links the peoples of Europe with the institutions of the European Union.
12.16 pm
The Minister for Europe (Mr. Denis MacShane): This has been an enjoyable debate and I join in congratulating my hon. Friend the Member for Nottingham, North (Mr. Allen)—a very good friend, mentor and adviser over many years—on securing the debate. He pooled his independent sovereignty as an MP with other right hon. and hon. Members to command an hour and a half of debating time. On Monday, we will return to this matter in a major debate on the Convention.
Yesterday, the Lords Scrutiny Committee asked me some of the questions that have been raised today. I should love to find another word for subsidiarity, and I promise my hon. Friend that I shall open the Foreign Office thesaurus to find one, but it may be difficult. I invite him to read the Bill of Rights, which is the closest that we have to a constitution. There, he will find language, beyond its rather flowery opening, that is as deeply impenetrable as only an English constitutional lawyer can produce.
Before we drifted back into the dreary swamp of Conservative euro-hostility, which slightly diminished the rarefied quality of the debate, we had been exploring interesting conceptual ideas. A couple of nights ago in the House, I faced 40 or 50 giggling, hysterical Opposition Members chortling about the plight of Gibraltar. I am glad to say that today's debate is being conducted in a more serious and mature fashion.
Several hon. Members referred to the American constitution, which was drawn up by 52 men meeting in secret, which is not a privilege—if that is the right word—that we can grant ourselves in the 21st century. I note that no hon. Lady Members have taken part in this debate, and I am constantly worried that when we set about our business of putting Europe together in a better way we are ignoring the half of Europe's population that is not male.
There is a theory that Britain does not have a constitution. With next Monday's debate in mind, I commend "The English Constitution" by Walter Bagehot to hon. Members. He specifically understood the nature of the British constitution, and he contrasted it—I put this point to my hon. Friend the Member for Nottingham, North, who is, like me, a great friend and fan of things American—with the American constitution. Mr. Bagehot wrote:
"You have got a Congress elected for one fixed period, going out perhaps by fixed instalments, which cannot be accelerated or retarded—you have a President chosen for a fixed period, and immovable during that period: all the arrangements are for stated times. There is no elastic element, everything is rigid, specified, dated. Come what may, you can quicken nothing, and can retard nothing."
Of course, the American constitution did not protect the United States from its dreadful civil war.

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Speaking personally and as a Minister, I think that whatever arrangement we come to in Europe, a European constitution should not be static, fixed or immovable. It has to be elastic and able to change because Europe is an organic process and there is no ultimate European finality.
Mr. Redwood: Will the Minister confirm that the British Government will either negotiate out or veto any proposal that would give the EU power over taxation, criminal justice or the way in which we run our Army?
Mr. MacShane: In the brief time available, I should like to discuss the general issue of a constitution. It is well known that the British Government, along with a number of other Governments, do not favour qualified majority voting and wish to keep the unanimity principle on matters of taxation; of course, that also applies to common foreign and security policies. I shall go on to some of the points that the right hon. Gentleman made in his very interesting speech. He is a distinguished intellectual and a quondam fellow of All Souls.
Mr. Allen: Before my hon. Friend the Minister moves on to further points raised by the right hon. Member for Wokingham, I want to make two points. First, does he accept that a constitution is not static? A constitution is subject to endless interpretation, as the American constitution, the French constitution and others have been. A constitution like a boxing ring in that it provides a framework in which political, social or judicial conflicts can be played out. The American constitution both permitted and abolished slavery; it moves with the times. Secondly, will he consider starting a competition to find a better word for subsidiarity? We have got to get over to people that subsidiarity is a great boost for democracy, and not a problem for democracy.
Mr. MacShane: I entirely agree with my hon. Friend, and if he wants to join with me in launching such a competition I would be delighted. He is of course right that constitutions are living things, and judges interpret them all the time. The concluding comment from the Opposition spokesman, the hon. Member for West Suffolk (Mr. Spring), however, was that we are against judge-led law. I am sorry, but the Supreme Court of the United States is the essence of judge-led interpretive law, and any constitutional arrangements will require checks and balances.
In the short time available to me, I cannot go into all the comments that hon. Members have made. Returning briefly to the right hon. Member for Wokingham, he denounced the notion of sharing sovereignty, but we share it in NATO, the World Trade Organisation and, above all, the United Nations. When the UN orders Britain to do something, we do it and oppose those in breach of UN orders. The right hon. Gentleman's vision was, I have to say, Hobbesian—all against all, each in his individual garden. My hon. Friend the Member for Dundee, West (Mr. Ross) was right in his comments about people acting together, pooling their rights and their money.
The biggest derogations of national sovereignty in the European Union were those imposed by the Government of which the right hon. Gentleman was a
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member. The single market was the moment when the harmonisation of directives occurred and pages of new laws exploded into being, which was at the demand of the Confederation of British Industry and British business—and rightly so. We have just obtained the end of national sovereignty over control of energy markets—and rightly so. I want to see similar progress on financial services. Another hon. Member referred to a commitment to educational targets. Those were inserted in the voluntary Lisbon programme, as it is called, for accelerating economic reform in Europe. That was intended precisely to deal with the problems faced by Germany. It would be strange for us now to resile from targets that every British business man then supported.
My hon. Friend the Member for Luton, North (Mr. Hopkins), with whom I have exchanged many a friendly word on these and other matters, should look a little at history. The 4 million unemployed in Germany were inherited from the conservative Government of Chancellor Kohl. Interest rates in the eurozone are 1 percentage point lower than ours. There is no great desire in Germany, a country that I know well, for Japanese-level interest rates, which have not helped move the Japanese economy forward. There is a need to break through the structures of vested interests, many of which are on the business side as well as on the employers side and the church side, or connected with subsidiarity—the vested interest of some regional governments that will not accept a compromise with the wider national interests of the German nation. However, if people want to know who was responsible for the disaster in Germany, they should look at its previous right-wing Government. Electing a right-wing conservative Government is always a disaster for any European country.
My hon. Friend the Member for Dundee, West was absolutely right to say that people want to know. They want facts not fiction, but all they ever hear from the Conservative party—we heard it again this morning and we shall hear it again next Monday—are fictions about Europe. I am happy to paint the European Union, warts and all.
It was very clear from the closing remarks of the hon. Member for West Suffolk and the tone of the remarks of the right hon. Member for Wokingham that they do not want a certain kind of European constitution. They do not want the type suggested by my hon. Friend the Member for Nottingham, North; they do not want a Bill of Rights; they do not want the excellent proposals that my right hon. Friend the Foreign Secretary set out in his article in The Economist entitled "A Constitution for Europe", which had a marvellous image of him as Thomas Jefferson Straw. They do not want any constitution at all, because they are fundamentally opposed to Europe. That is the real division on which this country will have to make a decision at the next election. The party that stands against the interests of the British people in Europe will be defeated again and again and again.
Of course I support reform of the common agricultural policy. So does the Socialist Worker. So does the Daily Mail. So does every bishop. So does every Tory—well, at least every Labour Member. However, the reason that we have this common agricultural policy, with its common fisheries policy, is that we were

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not there in shaping it. The Conservatives want to ensure that we are out of Europe, not in there making it effective.
I think that the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) was discussing the dignified elements of a putative constitution. I want a constitution that is effective and efficient. Europe does not need more pretty words. We want a Europe that delivers for its people and that is what the Government and, I hope, my hon. Friend the Member for Nottingham, North will work towards during the next few months.

Mr. Peter Bleach
12.30 pm
Sir Teddy Taylor: I am glad to have the opportunity to raise a matter this morning. These Adjournment debates provide a unique opportunity for hon. Members to raise matters about which they feel strongly. We enjoy that, but I am always sympathetic to Ministers, because I know that Foreign Office Ministers are extremely busy and have to work morning, afternoon and evening, so it must be a problem for them to have to come to these debates. However, in Parliament it is important that if we feel strongly about a matter, we should have the opportunity of raising it and seeking guidance from Ministers.
I want to discuss the case of Mr. Peter Bleach. I apologise to the Minister for the massive volume of correspondence I have sent to the Foreign Office and the many questions I have asked about him. The reason is simply that I believe that a great injustice has been done, and I am seriously concerned and alarmed about the health and security problems which Peter is having in prison in Calcutta. My object in raising the matter in this debate is to try to persuade the Minister and his Department to do all they can to secure Mr. Bleach's release.
In fairness, I would like to express my gratitude for the way in which Ministers have endeavoured to assist so far. As I was writing this short speech yesterday, a letter was delivered to me from the Prime Minister—I am sure that the Minister has seen it—saying that he has written to the Prime Minister of India, Mr. Vajpayee, raising his concerns about Mr. Bleach's poor health and continued detention. He added that he had also asked Mr. Vajpayee to intervene and recommend that Mr. Bleach be released in the near future.
That is not the only initiative that has been taken, and I should mention that the Foreign Secretary raised the case with the Indian Deputy Prime Minister on 22 August. I was also advised that another Foreign Office Minister—I believe that it was the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North Warwickshire (Mr. O'Brien)—had discussed the matter with the Indian Foreign Secretary on 16 October. To that extent, I cannot complain about Government inaction. They seem to have gone out of their way to try to persuade the Indian Government that there is an injustice and something needs to be done. It is rather unusual for the Prime Minister to take so much trouble over the case of one individual in prison, and I am very grateful that he has done so.
In short, the Government have taken a major initiative to secure the release of Mr. Bleach, but sadly, the Government of India—who, in fairness, I must say I have always found to be more responsive and responsible than most foreign Governments—have so far declined to respond. I hope that the Prime Minister's latest initiative will persuade them to respond meaningfully, but in view of the seriousness of Mr. Bleach's health problem, I thought it right to raise the case today.
My first point is that Peter Bleach is a person with a record of high standards. When he was living in Southend, I always found him to be a person of honesty and integrity. When he advised me of the complex and

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difficult security operations in which he was involved, he always talked about events in terms of the benefits that they would bring to the community. When he was engaged in a security matter involving pharmaceutical companies in Cyprus, he received a commendation from the police for putting his life at risk to bring criminals to justice. It is only fair to say that Mr. Bleach has been involved in many such interesting events. He has always tried to play fair and straight and to tell things as they are.
I emphasise that Mr. Bleach has advised me time and time again that everything he did in relation to the dropping of arms in Bengal, from the first approach that he received, was notified to the authorities. To protect himself during the preparations for the arms drop, he prudently recorded every word said to him on the telephone by officials. However, as I reported to the House on 2 March 1999, his home and that of a disabled lady in London were raided, and all but one of the tapes disappeared. One of the raids involved 10 constables. Over many years, I have tried to find out the reason why the constables seized the tapes and the evidence was removed. I have never been given a proper explanation. However, it happened: there is no denying that. I do not want to bore the Chamber with the many complaints that have been made about the unusual events of which the raids are just a part, or with details of the unusual activities of Sergeant Etlock. The Minister is well aware that I have given full details of the evidence that that gentleman gave, and the ways in which it seemed to be adjusted.
It would save a lot of time if the Government would simply confirm that officials were advised by Mr. Bleach of the issues relating to the arms drop and it would help even more if they would confirm that the Government of India were advised, too. Mr. Bleach was advised not to get involved. That is the usual practice in such matters. However, the plain fact is that someone who tries to do something of this order and gives all the information about all the events to the Government is rather different from someone who seeks to do the same thing in a secret or malicious way.
Another significant issue relates to the seizure of Mr. Bleach and his five colleagues from Latvia after the Indian air force obliged them to bring down their plane following the arms drop. The Indian authorities carried out that seizure with their usual efficiency, and Peter and his colleagues were seized as they came down the steps of the plane. However, there was one astonishing omission: Mr. Kim Davey—also known by his proper name of Mr. Niels Nielsen—who is a citizen of Denmark, and was the acknowledged and clear leader and organiser of the venture, was permitted to walk away from the plane. He succeeded in travelling out of India and back to Denmark. Of course, I would fully understand someone escaping if they were coming out of a train or a lorry, but when it is case of a plane coming down in an airfield, it is difficult to comprehend how one of the passengers could escape being seized. I have tried to find out from the Indian Government why that happened. Why was that person permitted to get away, particularly as he was the leader of the outfit? I have never been given any explanation at all. The matter seems to get more and more mysterious.
Mr. Davey is alleged to have stayed in Denmark and to have protection there. I have been advised that Interpol has been looking for him. I have also been
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advised that he has been travelling around quite a bit—he has been particularly active in Sudan—and that he was quite recently in London at Smith's hotel, where he was allegedly in the company of some rather official and well dressed people who are often seen at that excellent establishment. It was there that he allegedly sought to persuade one of my constituents, who resides in Great Wakering and whose details I would be glad to give to the Minister, to engage in some interesting work in Bosnia.
Obviously, I do not expect the Minister to comment on these unusual events, but I would like him to say whether the Government regard Mr. Kim Davey as a person who should be seized and questioned by the authorities, and whether approaches have been made to the Danish Government. The issue is of some significance. It seems unusual that although everyone says that they want to seize this gentleman, nothing seems to happen and he travels around doing rather interesting things.
I would also be grateful if the Minister would raise with the authorities in India the clear injustice of their having agreed to the release of the group of Latvians who were on the plane, although they were all charged with the same offence as Peter Bleach and were all given the same sentence as him. That seems unfair and unjust. There were a number of people on that plane: Mr. Kim Davey, who somehow walked away, even though he was in charge of the whole operation, the Latvians and Peter Bleach. When Mr. Putin, the President of Russia, made representations, the Indian authorities gladly released the Latvians, but Peter Bleach is still in prison.
Will the Minister comment on Peter Bleach's health? I have received many letters from Peter, which I can show the Minister. Peter told me that he had contracted tuberculosis, and that that serious disease had had a severe impact on his health. It is sometimes possible to receive a host of reports from a foreign jail that are misleading and contradictory. However, I know that the high commission staff have kept in close touch. Is the situation serious and have the Government of India been fully advised of the situation? I get the impression from Peter that he is a seriously ill man and that the matter deserves attention. The facts are crucial, and if the Minister can tell us whether Peter Bleach is an ill man, that will help.
I also want advice from the Minister about the alarming reports that I have received from Mr. Bleach, and several of his friends who visited him, about his being viciously attacked and injured in the prison. I know that things are rather difficult in India, but I get the impression that its prisons are pretty well managed compared with those of other countries in the area. None the less, there seems to have been a nasty incident in this specific case. It should be relatively easy to establish whether the reports are true. Mr. Bleach is in the high security block of the jail in Calcutta. There is a group of single cells in the block, numbered 1 to 23. Peter is in cell No. 11, which is in the exact middle of the row. The cells on either side are occupied by people who are accused of the American Centre attack. It is alleged that Mr. Bleach was assaulted seriously in an especially vicious attack at the beginning of this month. Has the Foreign Office heard about the problem, and can it secure any assurances for the future?

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I believe that the case of Peter Bleach is a great tragedy. If he were simply a rascal who had conspired with others to create strife and suffering by arms dropping, I would have no sympathy for him whatever. However, his case is totally different, for the reasons that I have explained to the Foreign Office time and time again. I am sure that the Minister is aware of all the circumstances. I thank the Minister and Foreign Office for their endeavours, but I ask them to keep up their pressure and to try to persuade the Indian authorities to put right a great injustice.
If the Foreign Office pursues a case too rigorously or too toughly, I know that that can sometimes interfere with relationships between the two countries involved. The Minister is aware that India has been a special case over the years. It has preserved democracy as other nations have not. It has managed to keep such issues as theft and corruption down to a minimum, while other countries appear to be full of such problems. India is a country that has high standards, good education and high principles.
I understand the Indian point of view—that India wants to do something about a person who has been accused of a crime. However. I believe that there has been an injustice in this case. There was an injustice in the original claim, it is an injustice that Peter is kept there although the others were released, and it is an injustice that a person who is suffering severe illness seems to be neglected, and has apparently been attacked in prison in unusual circumstances.
I apologise again to the Foreign Office for the fact that I seem to be harping on this issue time and time again. I am well aware that it has tried hard and put its resources behind the operation. I simply say that the cause is good. I hope that the Foreign Office will keep at it, and manage to persuade the Government of India to put right a grave injustice. I am glad to have had the opportunity to raise the issue. I was told that I had been allocated 15 minutes, but I have used only 14 of them, so I am pleased to give the Minister the bonus of an extra minute for what I hope will be his good reply.
12.44 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): I congratulate the hon. Member for Rochford and Southend, East (Sir Teddy Taylor) on securing this debate on the case of Peter Bleach, who has been imprisoned in India since 1995. I also congratulate him on the assiduousness with which he has pursued this case. We share a historical county boundary, and although it is no longer a local government boundary, I know the way in which the hon. Gentleman normally pursues issues of constituency concern. I pay tribute to him for that.
For the record, I should say that my hon. Friend the Member for Scarborough and Whitby (Lawrie Quinn) has also made strong representations to me about this case and expressed his concerns, as Mr. Bleach's mother resides in his constituency. In response to those representations, and to the comments of the hon. Member for Rochford and Southend, East, I shall set out in detail the actions that we have taken thus far.
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As the hon. Gentleman made clear, Peter Bleach was arrested for his involvement in an illegal arms drop over the Purulia district of West Bengal in India in December 1995. As a result, he was arrested on 22 December, along with five Latvians—who subsequently became Russian citizens—after the Indian authorities had forced their plane to land in Bombay. Peter Bleach has consistently alleged that the principal organiser of the arms drop, Kim Davey, managed to evade arrest. The hon. Gentleman referred to that in some detail.
Mr. Bleach was convicted, along with his five Russian co-accused, on 31 January 2000. He was convicted of conspiracy to commit offences against the state of India and offences under the Explosives Act, the Explosive Substances Act and the Arms Act. All six individuals—the five Russians and Mr. Bleach—were given the same sentence of life imprisonment. All six lodged appeals against their conviction in February 2000. Subsequently, the Indian President authorised the release of the Russian nationals in July 2000 following diplomatic pressure from the Russian Government. Since the release of the Russians, we have made strong representations to the Indian Government, questioning what we believe to be the discriminatory treatment of Mr. Bleach. We believe that he should have been released, on the grounds of fair and equal treatment with his Russian co-accused. In court each case was presented and dealt with in exactly the same way, and the charges were the same. I therefore feel that there is a very strong case, based on the need for fair and equal treatment, that Mr. Bleach should be treated in exactly the same way as the five Russians.
Having said that, I would like to make it clear that we are not contesting Mr. Bleach's conviction. However, we believe that we have a duty to ensure that he is not being discriminated against. We are also worried, as the hon. Gentleman is, about Mr. Bleach's health. He was diagnosed in February as having tuberculosis. He is very ill, and I understand that he is at risk of developing the drug-resistant strain of the disease, which has the potential to kill him. We have raised our concerns about Mr. Bleach's health with the Indian Government, asking them to take it into account when considering his case.
The hon. Gentleman acknowledged that we have been extremely active in Mr. Bleach's case. Over the past 18 months we have raised it repeatedly with the Indian Government. It has been raised at every available opportunity at the highest levels—by my right hon. Friends the Prime Minister and the Foreign Secretary, and by my ministerial colleague the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North Warwickshire (Mr. O'Brien). Unfortunately, my hon. Friend cannot be here today, but he would have wanted me to make his involvement clear. Since January, the case has been raised with Indian Ministers on no fewer than 10 separate occasions.
Let me give hon. Members some details about those representations. My right hon. Friend the Foreign Secretary has raised the case four times this year with the Indian Government. He raised our concerns about Mr. Bleach—including concerns about his poor health—with the Indian Deputy Prime Minister, Mr. Advani, on 17 February and 29 May. He also wrote to Mr. Advani on 8 July and, when he visited India on 19 July, he raised

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the case with Foreign Minister Sinha. Most recently, he raised the case again with Mr. Advani on 22 August. In addition, the Prime Minister has raised Mr. Bleach's case with the Indian Government twice this year. He raised it with Deputy Prime Minister Advani during a visit to India in January 2002 and, most recently, on 4 November he wrote to Prime Minister Vajpayee reiterating our real concern about Mr. Bleach's ill health, and his continued detention, and asking for his release in the near future. In addition to those ministerial representations, our high commission in New Delhi has frequently raised the matter with the Indian Government.
Despite all those efforts, and although we have been working hard on Mr. Bleach's case, the Indian Government have given no indication that they will release him. They have given a number of reasons for their stance; one is that his release will undermine their case against the alleged ringleader of the arms drop, Kim Davey. We understand that the Indian Government are currently trying to extradite Mr. Davey from Denmark, but that the Danish Government have thus far refused that request. We have, however, made it clear to the Indian Government that the investigation of Kim Davey does not affect our strong argument that Mr. Bleach is being discriminated against. The key, fundamental point is that equal judgment by the court must necessarily imply equal treatment for Mr. Bleach and his Russian co-accused. That is the point that we have been making from the beginning of the process, and we will continue to make it.
As I listened carefully to the hon. Gentleman's speech, I was also interested to hear that he thought that one of his constituents had met Mr. Davey recently in a hotel in the United Kingdom. We have looked into that matter. Interpol in London has advised us that it has received no indication that Mr. Davey is in the United Kingdom. The hon. Gentleman's constituent should report the incident to the police and request that the information be forwarded to the Interpol bureau in London. That body will notify the appropriate United Kingdom department that deals with extradition matters. For the record, we have not made approaches to the Danish Government concerning the extradition of Kim Davey. That is clearly a matter for the Danish and Indian Governments.
Mr. Bleach has also been pursuing his discrimination case with the Indian courts. He filed a discrimination petition with the Calcutta high court on 5 October 2001, which was dismissed on 20 September 2001. However, his appeal against his conviction and the legality of the charges against him, which began in September 2001, continues. Our deputy high commission in Calcutta has sent representatives to the court hearings and we are monitoring those court hearings and developments very closely indeed.
Mr. Bleach is representing himself at his appeal. I should make it clear that we offered him the services of a British lawyer from our pro bono panel of lawyers to assist him, as is our normal practice. We put prisoners in touch with such lawyers if we have concerns about their access to legal advice, or if there are particular human rights concerns about their cases. Mr. Bleach, however, decided not to accept our offer. That is why he is pursuing his own case. I take this opportunity to comment on the circumstances surrounding the raid on
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Mr. Bleach's home in the United Kingdom, to which the hon. Gentleman has referred. I say simply and firmly that we have investigated that matter and the raids were carried out strictly in accordance with United Kingdom law.
We are aware of Mr. Bleach's concerns about the evidence that was provided by a North Yorkshire police officer during his trial. My right hon. Friend the Foreign Secretary, in his former capacity as Home Secretary, met the hon. Gentleman to discuss this and other allegations against North Yorkshire police. As Foreign Secretary he wrote to the hon. Gentleman on 5 December 2001 concerning the matter. The actions of the police officers during the course of their duties is, as I am sure that the hon. Gentleman is aware, the operational responsibility of the chief officer of the force concerned. North Yorkshire police and the officer concerned have been aware for some time about the allegations that have been made by Mr. Bleach and they completely refute them. For the record, Mr. Bleach has been advised on several occasions that he can make a complaint if he is unhappy with the conduct of police officers, and he has been notified of the procedures for so doing. That course is also open to the hon. Gentleman. However, no such formal complaint has been received, and we have yet to see any evidence of wrongdoing by the North Yorkshire police.
The hon. Gentleman also asked whether Mr. Bleach advised officials of issues relating to the arms drop. I can confirm that he provided details to North Yorkshire police about the arms drop during interviews on three separate occasions—on 14 September, 22 September and 8 December 1995. On 22 September and 8 December the police strongly advised Mr. Bleach to withdraw from the deal and not to go to India. The information given by Mr. Bleach was passed on to the Indian authorities on three separate occasions—10 November, 17 November and 15 December 1995.
We remain very concerned about Mr. Bleach's health. Our deputy high commission in Calcutta is providing full consular support to Mr. Bleach and is doing all that it can to ensure that prison authorities meet his welfare requirements. On learning that his health had deteriorated in February this year, it arranged for an independent doctor to visit him. The tests recommended by the doctor confirmed that Mr. Bleach was suffering from tuberculosis, and as a result, consular staff in Calcutta have visited him more regularly since February—usually twice a month—to monitor his condition. They have also arranged for further visits by an independent doctor.
Consular staff in London have sought advice on Mr. Bleach's treatment from a tuberculosis specialist in the United Kingdom. They have discussed the doctor's recommendations with the prison authorities and have done their utmost to try to ensure that Mr. Bleach receives the medication that he needs. In addition to regular visits by consular staff in Calcutta, Mr. Bleach has also been visited by our high commissioner to India on 3 September this year.
Mr. Bleach has, understandably, become increasingly frustrated about his continued detention, and went on hunger strike for approximately 36 hours in August. We were also concerned to learn at the beginning of October that he had decided to stop taking his medication in protest at the Indian authorities' handling of his case.

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Unfortunately, our efforts to persuade him to resume his medication have failed. However, we continue to monitor his welfare carefully, and Mr. Bleach has been visited three times this month, most recently by our deputy high commissioner in Calcutta on 21 November.
A consular representative from our high commission in Calcutta was concerned to learn during a visit on 8 November that, as the hon. Gentleman mentioned, other inmates had tried to attack Mr. Bleach, and that he had not received his fruit and vegetable ration. The representative immediately reported the problem to the superintendent of the prison, in the presence of Mr. Bleach, and the superintendent said that he would investigate the matter and guarantee Mr. Bleach's safety.
Mr. Bleach contacted our deputy high commission in Calcutta on 14 November to request a further urgent consular visit, and a representative visited him that afternoon. Mr. Bleach reported that the prisoners who had tried to attack him had been put in charge of his yard, and he feared that his life was at risk. We naturally took his concerns seriously. Our deputy high commissioner visited the prison and met the superintendent to discuss the matter again on 21 November. He also handed him a letter expressing our concern about Mr. Bleach's safety, and the non-receipt of some of his food rations. Our deputy high commissioner visited Mr. Bleach the same day to check on his welfare and keep him informed of our actions in his case. He also subsequently raised the matter with the West Bengal Chief Secretary.
We will continue to do all that we can to help Mr. Bleach and are in close contact with his family in the UK. We will also raise our concerns about his health with the Indian Government, and ask for his release on the grounds of fair and equal treatment with the Russian co-accused. As a result of the Prime Minister's letter of 4 November to Prime Minister Vajpayee, we hope that Mr. Bleach will be released in the near future. Finally, I again pay tribute to the way in which the hon. Gentleman has put forward his concerns.

Reusable Carrier Bags
1 pm
Mr. Tom Harris: Thank you, Mr. Benton, for giving me the opportunity to speak in this debate. I have spoken before in Adjournment debates in Westminster Hall, but this is the first time I have spoken on a subject of my own choosing.
I approached this subject with an open mind—which is, I accept, unusual for a politician. It presents a challenge to any Government who are genuinely concerned about the environment, particularly as it is estimated that as many as 10 billion plastic carrier bags are used every year by consumers in this country. I am sure that we can all agree about one thing—that it is important to encourage consumers to reuse those bags.
The key question is: how do we do that? Since the beginning of April 2002, the Irish Government have pursued the very radical—and, in some quarters, very popular—policy of imposing a 15 cent tax, which is 9p in real money, on every plastic carrier bag issued by the supermarkets. That tax cannot be absorbed by the supermarkets; it must be passed on to the consumer, or there would be no point in levying it in the first place. The United Kingdom Government have suggested that they might consider imposing a similar tax.
In response to a question posed by my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz), who is present today, my right hon. Friend the Minister for the Environment described the 90 per cent. reduction in the usage of plastic carrier bags in Ireland as quite daunting, although he went on to say that there might be other 'ways to reduce the consumption of plastic carrier bags. Five days later, my hon. Friend the Economic Secretary to the Treasury said:
"The Government currently have no plans to introduce a plastic bag tax."—[Official Report, 22 October 2002; Vol. 391, c. 212W.]
The purpose of this debate is to give the Government the opportunity to clarify their position. I do not expect the Minister to say today that they will or will not impose such a tax, but I hope that they will use this opportunity to explain where we are now, and whether we are considering imposing one. Depending on one's point of view, today might be either a good day or a bad day to raise this issue, as my right hon. Friend the Chancellor will be making his pre-Budget statement in the Chamber later, and he might address this subject.
I approach the issue from the point of view of someone who is concerned about jobs not only in my constituency but throughout the United Kingdom. Last week at business questions I raised a matter concerning a company in my constituency called Simpak. Its managing director, Neil Young, first brought this matter to my attention. In this country, private industry is never slow in coming forward to express reservations or to imply that there might be job losses in response to almost any regulation or taxation proposed by any Government, but we must take industry's view seriously, or at least listen to it in the first place.
Simpak manufactures paper bags but imports large quantities of plastic bags from Asia—which is where the vast majority of plastic bags used in this country are made. The threat is credible; Simpak's concern that a

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significant decrease in the use of plastic bags on the same scale as in Ireland could result in a loss of jobs in my constituency is credible.
Mr. Mark Lazarowicz: I am grateful to my hon. Friend for giving way, and also to the Minister for allowing me to intervene. Given his constituency interest, I recognise my hon. Friend's sincerity in relation to such issues; I also understand why manufacturers involved in the production of plastic carrier bags do not believe that a ban would be a good idea. Does my hon. Friend accept that the problem is based not only on the amount of plastic used in the production of bags, but on how the bags are disposed of, and the contribution that such action can make to combating litter and the throwaway society? Given the public support for the early-day motion that I tabled in our previous Session, does he not think that the industry, rather than simply opposing the innovation of carrier bag tax, should look for a way of diversifying its production?
Mr. Harris: I accept that my hon. Friend's views are genuine, and I agree with many of them. He has been a strong supporter of the measure for a long time, and I shall deal with some of his arguments. We must consider whether the sacrifice that may have to be made in terms of the number of jobs throughout the country would be justified by what I consider to be the dubious environmental advantages. I have taken a peculiar—some would say unhealthy—interest in the litter on the streets of my constituency. Far from there being large quantities of used plastic carrier bags, the main culprits are discarded cans that once contained lemonade, and plastic and polystyrene food containers. It is estimated that only 1 per cent. of the litter dropped on the streets of the United Kingdom, and only 1 per cent. of landfill, is taken up by plastic carrier bags. That is because many people already reuse plastic carrier bags. A National Opinion Poll survey in October 2000 found that four out of five consumers already regularly reused the carrier bags that they were given free at supermarkets.
One consequence of the new tax in Ireland is a 90 per cent. reduction in the use of plastic carrier bags, but there has also been a 300 per cent. increase in the number of black plastic bin liners sold in shops. Such bin liners are rarely reused, as the smaller carrier bags are. Furthermore—and we must learn from what has happened—there has been a massive shift in Ireland away from plastic carrier bags to paper carrier bags. Environmentalists will welcome that, because paper bags degrade far more quickly than plastic carrier bags.
However, the environmental disadvantage of that practice is that a paper carrier bag is six times the weight of a modern plastic carrier bag. It also takes up 10 times the storage space of a plastic carrier bag, which has consequences for the transporting of paper bags. In other words, for the number of plastic bags that could be transported in one lorry, it would take 10 lorries to transport the same number of paper bags. I hope that the Government will take that serious point into account when considering the way ahead.
We are politicians and we must be careful not to raise expectations. If only 1 per cent. of landfill and I per cent. of street litter is plastic carrier bags, even a decrease of 100 per cent. in the number of plastic bags used would
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result in a mere 1 per cent. decrease in landfill and a 1 per cent. decrease in litter. Is such a negligible improvement in the environment worth the opprobrium that we would surely suffer from consumers and electors if the tax were to go ahead?
We should acknowledge the hard work done by the industry in recognising that it has environmental responsibilities. The best example of that hard work is the fact that a plastic carrier bag today uses 70 per cent. less plastic than it did 20 years ago. The industry should be congratulated on that achievement, not penalised for it.
As with all consumer taxes, my main anxiety is that a plastic carrier bag tax would be regressive. When I go to the supermarket with my wife to do the monthly shopping, we use as many plastic carrier bags as we need to carry our shopping to the car park. If the tax were introduced, I suspect that my habits would not change, and nor would the behaviour of many other people who are lucky enough to earn a good income. However, such a tax would affect the poorest people in my constituency, who are already living at or below the poverty line. Supermarkets are already planned around the car culture, and the proposed measure would only help to penalise people who do not own a car and already suffer from supermarkets' lack of accessibility.
I shall finish by making what some would consider a cynical point, but one that I consider realistic. All politicians want their political party to benefit and prosper electorally. I accept that taxes are unavoidable, but introducing the proposed tax would hand our opponents a ready-made, custom-built manifesto commitment to abolish the tax. Such a commitment would be popular among the millions of swing voters that the Labour party has been courting assiduously in the last 10 years, and our opponents would seize upon it. The tax would probably be the most unpopular since the poll tax, and we do not have to think back too far to remember the consequences of that tax for the Conservative Government.
I am not one of those Labour Members of Parliament who instinctively welcome all taxes and think that we should raise them left, right and centre; I believe that if we can abolish or reduce a tax we should do so. We only have to think about what happened in 1997 to see the consequences for the Conservative Government of raising taxes that the electorate were not convinced were justified. I approached the matter with an open mind, but the more I learn about the subject, the more I am convinced that imposing the tax would mean the worst of both worlds. We would reap a negligible benefit to the environment, and the unpopularity of imposing an unfair tax on the people whom we were elected to represent.
1.13 pm
Mr. John MacDougall: I begin by congratulating my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) on securing the debate. We all agree that meaningful and effective steps must be taken to improve the environment. We are required to work within the terms of European directives or pay the penalty for not doing so. I therefore understand the Government's position in taking steps on environmental issues where they can make a significant

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difference, and they have been successful in doing so. I have an open mind, and my right hon. Friend the Minister's argument may well convince me. However, at present I share some of my hon. Friend's concerns.
I had not given a great deal of attention to the subject until I had read some of the relevant documentation. Certain questions remain unanswered—for example, how effective a tax of this nature would be in making a significant change to environmental pollution. My information is that only about 2 per cent. of all the oil consumed in Europe is used for plastic film, and plastic carriers represent a small part of that percentage. The vast bulk of oil—nearly 85 per cent.—is burned as fuel in cars and lorries, or for power and heating. A carrier bag tax will make no real difference to global oil consumption. Such questions need to be answered if anyone is to be convinced that such a tax will make a significant difference.
My hon. Friend outlined some of the issues regarding the purpose of carrier bags. We all take for granted the plastic bags that we are given by the supermarkets every weekend. I do not know what the reaction would be if they were not available, nor how the public would be expected to cope without them. They are a part of people's way of life now, and such a change would lead to questions about why that practice had changed. Any increase in tax would therefore have to be weighed against the benefit to the public, and a clear argument would have to be presented to justify such a measure.
In general, I believe that if taxation is to make a difference it should be as little as possible, yet effective; in this case, it should be applied across industry, so that no particular industry is unfairly targeted. Industries that cause pollution should pay the penalty for that pollution; either a tax should be imposed across the board, or it should relate to the scale of the pollution. We should resist taxation unless it can be shown that polluting industries would make a significant contribution; in that case, taxation would be easily justified, and I am sure that the public would be on board.
I remain to be convinced that putting a tax on carrier bags will be seen as effective. The Minister may have an effective argument against me; he may say that I am wrong and that my fears will not be realised. I hope that he will consider the points raised by my hon. Friend, and I hope that he can reassure me that if taxation is to be applied, it will be done for credible reasons. If not, perhaps the matter should be reconsidered—if it is not too late. No one knows whether my right hon. Friend the Chancellor of the Exchequer will make a contribution to this debate this afternoon; we wait with bated breath, but other issues may figure higher on his agenda. I do not want to take time unnecessarily, so I shall let the matter rest there.
1.18 pm
The Minister for the Environment (Mr. Michael Meacher): The three contributions by my hon. Friends the Members for Glasgow, Cathcart (Mr. Harris), for Edinburgh, North and Leith (Mr. Lazarowicz) and for Central Fife (Mr. MacDougall) were well made. Before such new measures are introduced, there should be a
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proper public debate and a general understanding of the rationale behind them. As a result of a leak, information was passed to the media, which ran with the story in a particular way. That is a classic example of a hare being started when the information was largely inaccurate. That is not the best way to conduct a public debate. I am therefore grateful for the opportunity to respond to this debate.
As my hon. Friend the Member for Central Fife said, it is somewhat ironic that this debate is being held only a few hours before my right hon. Friend the Chancellor of the Exchequer presents his pre-Budget report. I cannot disclose any of its contents that might be relevant to the debate, but clearly, we shall look both to that and to the strategy unit's waste report, which are both highly relevant.
What I can talk about is why this has become an issue. I receive many letters about packaging, which is probably the issue that most concerns the public in terms of the unnecessary frivolous waste of resources. The Government are taking action to reduce the tonnage that retailers use in packaging by introducing certain measures that will give them incentives to do so. However, in 2001 there were 1.7 million tonnes of plastic packaging in the waste stream—an increase from 1.6 million tonnes in 2000. The figure is slowly rising. Point one is that the proposal would be a way of reducing the use of a form of packaging that many members of the public find unacceptable.
The second point concerns sheer quantity. Research conducted in September 2000 indicated that UK consumers used about 8 billion plastic carrier bags per year—an average of about 134 bags per person. That is a huge number, and it is difficult to justify the use of all of them. My hon. Friend the Member for Glasgow, Cathcart made a reasoned case from the sceptical side. He suggested that the amount going to landfill might be no more than 1 per cent. and asked what happened to the other 99 per cent.
It is true that if we assume a 20 per cent. replacement of conventional plastic packaging with bioplastics—one solution is to replace non-biodegradable bags with biodegradable ones—the estimated landfill space saving due to the degradation of plastic will be less than 1 per cent. of the volume taken up by municipal sustainable waste each year. Of course we have to take account of the other 99 per cent.—and we are doing so with strict landfill targets, the increase in statutory recycling targets and trading permits in the Bill that we are introducing this year. However, even the 1 per cent. that goes to landfill could still, if all plastic bags ended up there, be about 68,000 tonnes—not an insignificant quantity.
Litter is the issue that concerns most members of the public. The perceived plastic bag disposal problem is based on the view that most go to landfill. Litter is the more obvious issue because discarded bags are very visual, and very unsightly when they blow about in hedgerows or on the street, as they do in my constituency—and, I am sure, everywhere else.
My hon. Friend the Member for Glasgow, Cathcart raised a couple of points that I shall try to deal with immediately. I was puzzled by his saying that the measure could be unpopular. I entirely agree that nothing should be done without a much better public understanding of the rationale behind it. However, if the

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measure is as popular in Ireland as it appears to be, and has led to an enormous reduction—about 95 per cent.—in the use of plastic bags, I find it difficult to understand why it should be so unpopular in England. We are not exactly the same as the Irish, but I should have thought that there would be a similar reaction here. My hon. Friend also said that there could well be, as has happened in Ireland, a 300 per cent. increase in the number of bin liners. I am sure that there would be a substantial increase in their use. That is a fair point, but I would suggest that those bin liners would actually be used for transporting waste, whereas the litter issue with so many plastic bags is that although once they are brought home they might be used as bin liners, many find their way to other destinations, where they blow about in the street looking unsightly.
Mr. Harris: I am grateful to my right hon. Friend for giving way to me, and giving me a second bite at the cherry. Is he not perhaps confusing popularity with acceptance? Despite the non-payment campaigns, 90 per cent. of people paid the poll tax, but that did not mean that it was popular. I have no doubt that the tax in Ireland has been successful, but whether it is popular is another matter.
Mr. Meacher: Of course I understand that. No one likes paying taxes, and there is no such thing as a popular tax; that is a bit of an oxymoron. To take up the point about acceptability, however, there could be a good reason for us to pay a tax, and it could help us to achieve objectives with which we all agree. That is perhaps as far as I would press the point.
There are alternatives, and the Government want to consider them all before proceeding. We are assessing the extent of the problems created by plastic bags, as well as the possibility of a tax, although my hon. Friends know that tax is a matter for my right hon. Friend the Chancellor, not for me. The results of our work will be considered alongside the report of the Government's strategy unit, which will be published shortly.
I would be the first to recognise that there are disadvantages to a plastic bag tax, and there is the issue of increased unemployment. Some of my hon. Friends may have plastic bag manufacturers in or near their constituencies, and that is a significant issue. A tax could lead to companies going out of business, although my experience suggests that they are good at finding ways to adjust, provided that they have a sufficient transition period. I also understand the point about there being no conventional plastic manufacturers in Ireland. That is significant.
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Several food retailers have introduced "bags for life" schemes, and we are probably all familiar with them from doing our shopping. They all follow the same basic pattern. A charge is made for a strong and durable plastic bag, which is replaced each time it wears out. It takes a long time for the bags to wear out, but when they do, the plastic from them is recycled. Some supermarket schemes have had considerable success; for commercial reasons, I probably should not name the supermarkets involved, although I think that they are familiar to us all. However, those schemes have yet to take off in a major way across the whole retail sector.
I readily admit that retailers see "bags for life". schemes as a better way forward than a tax. Although they recognise the schemes' overall lack of success, they have, through the British Retail Consortium, shown an interest in introducing a well publicised, voluntary national "bags for life" scheme, as advocated by the curator of the Science Museum. Such a scheme would involve putting a national logo and strapline on all bags, which would be customised for all supermarket chains and types of retail outlet, and designed to be as environmentally friendly as possible. Advocates of that approach take the view that what is missing at present is a properly promoted and co-ordinated scheme to cover all retailers throughout the country. They also recognise that it is crucial to motivate consumers if we are to encourage the reuse of bags. Once again, it is important that we carry the public with us.
There is no doubt that a tax-based policy moves consumer behaviour in the right direction. However, it may also encourage consumers to reuse bags for the negative reason of avoiding tax, and it would be much better if they were incentivised for the right reasons. If consumers are to have positive reasons for changing their behaviour, we must raise awareness and convince them of the environmental benefits of reducing waste and recycling used bags.
Finally, the Wales Environmental Trust and Asda have set up a project to encourage the reuse of plastic carrier bags. Its objective is to find an effective means of reducing the number of single-trip plastic supermarket carrier bags used in Wales. It tries to answer two questions in a two-part project over 10 weeks. The first question is whether the attitudes of the general public on the reuse of supermarket carrier bags can change without the introduction of a tax or some other charge, and the second is what is the best reusable option to provide for consumers. For a trial period of six weeks, single-trip carrier bags will be removed from all Asda stores in Wales, and bags for life will be issued free in their place. That is the type of measure that we will consider before we take a final decision.

Local Authority Funding (South-East)
1.30 pm
Chris Grayling: I am grateful to the Minister for attending to take part in the debate. I am a Surrey Member of Parliament, but the concerns that I want to raise are shared by Members across the south-east of England. That is why I gave the debate its specific title. Across the political spectrum, we are all profoundly anxious about the implications for our local services of the planned funding review that the Government are undertaking. About 10 days ago, the leaders of Surrey, Kent and Hampshire county councils held a press conference to raise their concerns about the potential impact on the services that they offer.
All 11 Members of Parliament, irrespective of party, who represent the constituencies in Surrey are today sending a joint letter to the Prime Minister, urging him to pay attention to the risks inherent in the Government's proposed funding changes. I want to take advantage of this opportunity to set out some of our concerns. I will speak briefly, so that my hon. Friend the Member for Fareham (Mr. Hoban) can raise issues on behalf of his county, Hampshire.
The fundamental issue in the south-east is that we are under pressure in a variety of ways. In the past generation, there has been a huge migration of economic activity and population into the south-east—a trend that is continuing relentlessly year by year. Public services across the different counties in the area are already significantly overstretched, for various reasons. We have a substantial elderly population. Parts of Kent face a significant influx of asylum seekers, who need support within the communities to which they move.
Our police force is under pressure as a result of the increase of resources in London, especially the higher rates of pay offered there. There has been a migration of experienced officers into London and other areas. Our social services face a distinct shortage of care home beds. Against that background, all our public services operate in an environment in which the cost of maintaining them is rising relentlessly.
Mr. Julian Brazier: I am grateful to my hon. Friend for giving way so early in his speech. Does he not think it disgraceful that in care homes in my patch in Kent—and, I imagine, in his as well—an elderly person can have two and a half times as much local authority funding as the person in the neighbouring bed? The amount paid depends on whether the person comes from the privileged boroughs of London or from our constituencies.
Chris Grayling: My hon. Friend makes a good point. The Minister must be aware that the shortage of beds that has resulted throughout the south-east—in London and outside—as homes have disappeared means that London boroughs with deeper wallets are taking up care home places further out. That means that there is less choice available to the social services departments that try to meet the needs of our constituents. There is a shortage not only of care home places but of carers. People in my constituencies are blocking hospital beds
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simply because the people are not there to deliver the home-based services that the hospitals and social services believe they require.
Against that backdrop, the review threatens at least to engender a drip-by-drip bleed of finance from our services over the next few years. Several scenarios have been suggested. At worst, my county could lose £60 million in funding. I accept that the Government have said that there will be a floor at zero per cent., so there may not be cash cuts in funding, but even if there are increases, if those increases are significantly below inflation, over several years the consequences for services will be devastating. That is because local authority services do not simply operate according to inflation. For example, there are teachers' pay settlements that are higher than inflation and need fully funding. There are increased pension costs and above-inflation increases in care home costs. There is a whole raft of additional pressures that require additional resources, especially for housing for those who are homeless in our areas, because affordable housing is not available for all those who need it. Such pressures make it almost impossible for local authorities to do their job properly. If they lose significant funding over the next few years, even in a drip-by-drip way, our services will become poorer. The consequences will be damaging both for our region and for the nation as a whole.
My area generates a significant contribution in tax revenues to support the things that the Government are doing in the rest of the country. If we undermine the ability of the south-east to function as an effective economic unit, and we do not have good public services in the parts of the country that create the most wealth, we shall lose business, investment and good people, not to other parts of the country but to continental Europe. If the south-east loses, the country loses. I urge the Minister to take that into account as he and his colleagues work on the review in the weeks ahead.
The policing situation is of particular concern. I refer to the proposed changes in police funding in Surrey, which has recently been a weak receiver of funds. In terms of the funding from central Government, Surrey's police budget has been reduced by 14 per cent. in real terms over the past five years. That funding has had to be made up by increases well above inflation in the police precept.
The force is already underfunded, and it now faces further cuts as a result of Government reviews. Review options vary from Surrey losing a bit to Surrey losing a lot, at a time when the force cannot afford to lose anything at all. The Minister may not be aware of the fact, but varying pay structures in the public sector mean that police in London receive £6,000 a year more than those in Surrey. That structure is repeated in teaching and many other public services, but nowhere is it more acute than in policing.
Mr. Mark Oaten: In addition to the problem of the difference in salary, is the Minister aware that the Metropolitan police offer incentives such as paying police officers for travelling from many of the home counties into London?
Chris Grayling: The hon. Gentleman makes a good point, and there are further benefits on top of that, such

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as pension rights and fringe benefits, which make the case for moving to London all the more compelling. As a result, forces outside London are often staffed by newly qualified officers. Forces have lost the bulk of their experienced officers, who have moved a short distance up the road to earn significantly more money—and who can blame them? Consequently, we cannot deliver the effective policing that we would want.
The chief constable of Surrey has said publicly that his force is in crisis because of the tendency that I have just described, and that he is not confident that Surrey police forces will be retained in their current form if funding changes are made according to the formulae that the Government have proposed. That is a profound worry in a busy part of the country, which may have less crime than London but is none the less vulnerable to increases in criminality. Policing is needed there, not only for major inquiries such as the tragic Milly Dowler case, but for additional security at Heathrow and Gatwick, and for the M25.
Our schools are the greatest concern, however. One of the infant school heads in my constituency has written a very spontaneous letter, which says:
"Surrey schools are among the best in the country and the loss of funding could have a disastrous effect on standards and morale. You will be aware of the difficulties we face in recruiting and retaining staff, especially teachers. Much of this is due to the high cost of housing and a large increase in Council Tax would make an already difficult situation worse."
There's the rub, because council tax increases—if, indeed, we must have them in Surrey and other parts of the south-east—disproportionately affect those on low and fixed incomes, such as pensioners who have been retired for a long time and who do not have above-inflation pay increases to enable them to pay above-inflation council tax increases. Teachers and other public servants struggling to buy their first houses in the south-east cannot afford significant increases in their council tax.
If the Government cut away funding from Surrey and other counties in the south-east so they have to maintain statutory services through big increases in council tax, ultimately we shall lose more of the people who find it a struggle to get by in the south-east, and our public services will deteriorate still further. The Minister must take into account circumstances in the south-east before he takes steps that will do lasting damage not just to the region but to the economy and the rest of the nation.
1.40 pm
Mr. Mark Hoban: I congratulate my hon. Friend the Member for Epsom and Ewell (Chris Grayling) on securing the debate, and I concur with many of the points that he made. I shall focus on the impact on Hampshire in particular. Hampshire county council has estimated that in a worst-case scenario it would lose £80 million, which is equivalent to 9 per cent. of its budget. That would lead to a 32.6 per cent. council tax increase, equivalent to an increase of £170 for band D. Even with a mid-point change Hampshire would lose £35 million, which equates to a £98 increase in band D council tax.
Of course, that is only one aspect of the changes facing council tax payers in Hampshire. Changes in police authority funding will affect them too, and in
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Fareham there is particular concern that the merging of the rate support grant and the non-domestic business rate will lead to a loss of funding; in Fareham that will be about £75,000. When the Minister's colleague gave a seminar before this parliamentary Session, he said that an announcement would be made very shortly about that funding change. I hope that the Minister will suggest when that announcement will be made, and what might be in it.
A 9 per cent. cut in the budget for Hampshire county council would be equivalent to losing 900 teachers—that is, two teachers from every school. That would add to the pressure being placed on schools by the increasing demands made of them by central Government. Social services budgets are already under pressure, and that is already causing beds to be blocked in Hampshire. On one day earlier this month, 60 patients were waiting to be discharged from hospital, with nowhere to go. A 10 per cent. cut in funding for the elderly would lead to a loss of 400 places in residential homes. That would reinforce the pressure that hospitals are under from the closure of nursing home places and the lack of domiciliary care.
It is clear to me from talking to county councillors that the cuts in services that would arise from the shift in funding that the Government have been talking about would hit the most vulnerable people the hardest. Even if a transitional arrangement softened the blow in year one, the cuts would work their way through the system.
My hon. Friend referred to council tax increases. Earlier in the month the Government announced the uprating of pensions for married couples by £160 a year. A 32 per cent. increase in council tax in Hampshire would wipe that out straight away. I have had many letters from constituents—as, I am sure, have many other hon. Members. Mr. and Mrs. Bradshaw, who live in central Fareham, wrote to me:
"As pensioners living in a small two bedroomed bungalow, we already pay £820 per annum in council tax and we dread any excessive increase in the future."
They are not alone in that. People on low and fixed incomes fear the effect of the increase in council tax on their income.
Even if the cuts are mitigated by transitional arrangements, even a 15 per cent. cut in funding this year could lead to a £2 a week increase in council tax, which works out at £100 a year—almost two thirds of the Government's uprating in the married couples allowance. Will the Minister think again?
The shift in spending will affect many people in Hampshire—the elderly, children who are reliant on services provided by the county council, schools, old people's homes and children's homes. Council tax increases will also impinge on the incomes of the elderly and others on low or fixed incomes. The consultation period is ending and time is running out for people in Hampshire. Please Minister, think again about the impact on the most vulnerable people in the community, whether they are in Hampshire, Surrey or Kent.
1.45 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): I join in congratulating the hon. Member for Epsom and Ewell (Chris Grayling) on calling today's debate on an

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important matter, about which he spoke with passion and conviction. I appreciate that local authority funding, though sometimes quite technical, is the foundation on which many public services are built. It is a matter of concern to his constituents, as it is to all Members in this House, but I can assure the hon. Gentleman that we are assessing all the relevant points carefully before we take final decisions for the next financial year. I am aware that the hon. Gentleman, like the other Members who spoke, is particularly concerned about the high cost of services in the south-east, and I acknowledge the strong feelings on that subject.
At this stage, it would be useful to examine the important formula grant review process, which is about fundamentally examining the formulae according to which we distribute grants to local councils throughout the country. We want a fair distribution of grant; that is our overriding priority in responding to the widespread consultation exercise. The review is also about how best to deal with a fixed pot of money; any changes will mean that some gain more than others. In total, however, more money is available for local authorities overall, with the 2002 spending review providing good increases in council grants for the next three years. That builds on the grant increases—real increases of about 20 per cent., compared with a 7 per cent. reduction in the last three years of the previous Administration—that we have found since we came to office.
The hon. Gentleman worries about the south-east losing out; that is obviously his prime consideration in calling for the debate. Some council leaders in the southeast have made wild claims that funding will be taken away from their authority and given to others purely on the basis of geographical location. That is simply not true. There is no question of shifting resources according to crude political geography. It would be stretching the powers of Machiavelli to discern any such motivation. We want a grant distribution system that takes account of each authority's circumstances and puts the money where it is most needed. We are trying to balance all the different pressures, which is never easy. Evidence and representations have been coming in, including submissions from councils in the south-east, as we move towards taking the final decisions.
The hon. Member for Fareham (Mr. Hoban) talked about Hampshire council losing significant amounts of grant. Some authorities have spent time speculating that the grant review will mean large cuts. To dispel that myth, let me make it absolutely clear that we have already guaranteed that on a like-for-like basis, no authority will receive less money in the next settlement than they received this year. Counties in the south-east will not get less grant from the Government next year. The figure of 9 per cent. is wrong; it is not on the cards. The hon. Gentleman's speculation about 32 per cent. increases in council tax is no part of our plans, either.
Mr. Hoban: County councillors are concerned about that. Even assuming, as the Minister has, a zero per cent. floor and no reduction of grant in cash terms, that would
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still translate into a £2 a week increase in council tax, largely because of other funding pressures placed on Hampshire county council by the Government.
Mr. Leslie: I appreciate the fact that the hon. Gentleman has neatly moved me on in my argument about our guarantee of no cuts on a like-for-like basis. Obviously we hope to do much better than that, but at this stage, when we are calculating all the formulae and seeing how they pan out, it is the baseline on which we hope and intend to build. We have talked about the concept of floors and ceilings, which will ensure that a level of protection is part of the new system, and that will feature in the local government financial settlement for at least two years. The system is intended to damp the effects of the introduction of any new methodology by smoothing any volatility caused by data changes.
Fears about council tax increases have been raised, but those concerns are premature. In the spending review for the next three years, we have provided increases in funds, which local authorities will be able to use to ensure that they can improve the delivery of key services while setting reasonable tax levels. Of course, decisions on levels of council tax are for local authorities to take. Local authorities are responsible to council tax payers, and they should be talking to them about the level of council tax that they will bear, and where the money is spent.
Chris Grayling: The Minister made a point about operating by formulae, but he needs to understand the background provided by the Government's statement that one of the criteria being used in the review is the ability to increase the tax take. In areas where the tax take is already high—in Surrey it is 45 per cent., compared with a national average of 25 per cent.—there are concerns that the Government sees those areas as milch cows.
Mr. Leslie: I think that the hon. Gentleman is alluding to a part of the equation called resource equalisation. It is a technical term that does not mean cuts in grants for local authorities—in the south-east or anywhere else. We have already guaranteed that no authority will lose out on a like-for-like basis, and resource equalisation is already part of the current system. Resource equalisation involves looking at a council's relative ability to raise resources from council tax, by examining the tax base, and it is right and fair that it remain part of the new system. The question is the extent to which we take the ability to raise council tax into account. Resource equalisation is another part of the system on which we are consulting, and our decision on it will be made alongside other decisions. I can reassure the hon. Gentleman that the no grant loss guarantee applies to that area of the formula in the same way as it applies to others.
Mr. Oaten: Can the Minister confirm that the consultation and the proposed new formula will take the most recent census data into account?
Mr. Leslie: The Government certainly want to use the most up-to-date evidence on need that we have. We have to make sure that the census information is incorporated, and that the floors and ceilings

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arrangements will apply if there are significant changes, because obviously there will be peaks and troughs in crude formula applications, which, if they were taken on their own, could mean significant changes for authorities. One has to bear in mind that the floors and ceilings will kick in after some of those factors have occurred.
Mr. Nick Hawkins: I am grateful to the Minister, and I must apologise for my earlier absence, which was due to a shadow ministerial commitment. I heard him talking about counties not losing out on a like-for-like basis, but I am always a little suspicious when such conditions are attached. Precisely, does that mean that next year each county in the south-east will have the same amount of cash as it has had this year, but uprated for inflation: yes or no?
Mr. Leslie: The hon. Gentleman is almost there. Every county will have the same level of cash for the coming year as for this year. When I say "on a like-for-like basis", I am talking about the composition of an authority, its size and whether new functions have been added to it. Of course, if an authority suddenly found that it had acquired a social services function, for example, the amount of grant would change. However, if a council's structure and services remain the same, it will get that level of cash increase. That is the minimum guarantee that we are giving for now, but we hope to do much better. So far, we have been able to make sure that we give a real-terms increase for education, which is the largest part of most councils' budgets. The spending review envelope will prove to give significant sums to councils as a whole.
I know that Members are concerned about area cost adjustment. There have been several research programmes and projects to examine that over the years. It affects the south-east considerably. In the studies that have taken place, about 21 variant models of area cost adjustment have been devised, and authorities have not agreed on the merits of each option. There is much strong feeling about the matter. The vast majority of people recognise that pay costs should be recognised in the system. We agree, but the question is how much weighting there should be. The options in the consultation document suggest redesigning and trying to remove something of the existing cliff-edge effect. All I can say now is that we are carefully considering the responses to the consultation.
On education, a very significant issue, I shall give a broader description of where we stand at present. The options for the education formula reflect the fact that for the next three years, the spending review will include significantly more investment. We want a clearer fairer system justified by the educational needs of children and based on more up-to-date evidence of costs and need. Any formula must include an element to allow for deprivation, and for enhancement in areas where schools need to pay more to recruit and retain staff. I appreciate the extra costs faced by authorities in London and the south-east, including Surrey, because of the higher costs of recruiting and retaining staff there. It costs more to live in London and the south-east, and earnings differentials there are higher.
The options set out in the consultation paper are based on evidence that suggests that authorities with significant deprivation and additional staff costs need to
136WH
spend significantly more to achieve the same results for their children. The four options reflect the scope for different judgments to be made about weighting.
The hon. Member for Epsom and Ewell mentioned his concerns about the police. The aim of the police formula review is to develop a more robust mechanism for the fairer and simpler distribution of grant to ensure that it addresses policing needs in all parts of England. We are aware of differing pressures on policing, especially between rural and metropolitan areas, and of the need to allocate resources as fairly as possible to address varying needs in different areas. There has been a genuine consultation process and the responses are being taken into account. That has taken place against the background of a substantial increase in police resources. By 2005–06, the total provision for policing will be about £1.5 billion higher than in this financial year.
Chris Grayling: Not in Surrey.
Mr. Leslie: Nationally, significant funds will come through from the spending review and filter through to local authorities.
This financial year has seen education spending rise by 8.8 per cent., personal social services spending rise by 3.6 per cent. in real terms, and total police funding increase by 6.1 per cent. During the next three years, local authorities will benefit. Under the spending review, social services funding will increase by a further 6 per cent. in real terms on average, education funding will increase by 6 per cent. and policing funding, as I said before, will also rise.
In Surrey, whereas under the previous Administration the standard spending assessment grant went up by only 2.7 per cent. on average, this Administration have managed to increase the standard spending assessment by 4.8 per cent. As for social services, children's grant has increased by 12.8 per cent. this financial year, and carers grant by 21 per cent. Education spending has increased by £121 million—almost 39 per cent.—over five years, with the capital expenditure allocation rising this year to £38 million. An extra £24 million has so far been allocated for next year.
We have consulted at length on the formula grant review. The no cuts guarantee is there, on a like-for-like basis. I urge hon. Members to wait for and listen to the announcement before speculating and scaring too many people about the future. We want a more transparent formula. We know that we must try to strike the right balance between the competing arguments, and the involvement of not only councillors but Members of Parliament in the debate on the new formula is extremely important. My principle is to give local authorities a decent grant, which matters for the improvement of public services, and I hear the arguments that hon. Members on both sides of the House are making on the subject.
Question put and agreed to.
Adjourned accordingly at one minute to Two o'clock.

CULTURE, MEDIA AND SPORT

  BBC
  Mr. Whittingdale
  To ask the Secretary of State for Culture, Media and Sport if she will list the organisations that have made representations to her about the commercial effect on their business of the BBC's activities. [80434]

  Dr. Howells
  A number of organisations have made representations, as part of the consultation process on new BBC public services and on an ad hoc basis, including broadcasters, educational software publishers, independent producers and platform operators.

  BBC Freeview
  Mr. Gibb
  To ask the Secretary of State for Culture, Media and Sport how many advertisements for Freeview have been broadcast on(a) BBC television and (b) BBC radio; and if she will make a statement. [81778]

  Dr. Howells
  The BBC has not broadcast any advertisements for Freeview on either its radio or television services, but between 4 November and 20 November, it broadcast 70 information trails about its digital services on BBC One and BBC Two and around 170 on its five national radio networks. These trails inform viewers that the BBC's digital services can be accessed on Freeview, but also make clear that they are available on the digital satellite and digital cable platforms.

  Correspondence
  Tony Cunningham
  To ask the Secretary of State for Culture, Media and Sport, when she will reply to letters from Mr. Borthwick of Workington and the hon. Member for Workington to the Department of 13 April, 12 June, 26 July and 20 September. [80695]

  Dr. Howells
  My right hon. Friend the Minister for the Arts (Baroness Blackstone) has today replied to the letter of 26 July from the hon. Member for Workington which covered those of 13 April and 12 June from his constituent Mr Borthwick.

  I apologise for the delay in the handling of correspondence both from Mr. Borthwick and the hon. Member for Workington. My Department aims to reply to Members' correspondence and correspondence from the public within 18 working days of receipt. I regret that this did not happen here.

  Creative Industries
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport what recent assessment 262W
  she has made of her Department's involvement in facilitating and promoting competitiveness of British creative industries (a) at home and (b) abroad; and if she will make a statement. [83745]

  Dr. Howells
  The Department is working in partnership with other Government Departments and representatives of the creative industries to enhance their economic performance at home and overseas. More recent figures from official sources suggest that in 2000 the creative industries:

  generated revenues of £76.6 billion

  provided jobs for 1.95 million

  account for 7.9 per cent. of GDP

  Film Council
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made of the objectives of the Film Council; and if she will make a statement. [83757]

  Dr. Howells
  When the Film Council was established in April 2000, it was set 13 goals for film which had been identified in the course of the Film Policy Review (1998). These goals have formed the basis of the funding agreement with my Department. Progress against the funding agreement is reviewed regularly.

  Lottery
  Nick Harvey
  To ask the Secretary of State for Culture, Media and Sport what assessment she has made of(a) the effectiveness of her Department's transfer of functions from the Director General of the Office for National Lottery to the National Lottery Commission and (b) the relationship between her Department and the National Lottery Commission; and if she will make a statement. [83781]

  Dr. Howells
  The National Lottery Act 1998 made provision for the replacement of the office of Director General of the National Lottery by the National Lottery Commission; and I am satisfied that Parliament made the right decision in approving this change. Schedule 1 to the 1998 Act set out the transitional arrangements for the transfer of functions, which worked as intended. The relationship between the commission and the Department is as it should be. However, we published earlier this year a consultation document reviewing the way in which the National Lottery is now licensed and regulated, and seeking views on options for further change. We will announce our conclusions in due course.

  Sports Funding
  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport if she will list Sport England's Exchequer and Lottery-funded programmes and initiatives. [80965]

  Mr. Caborn
  Sport England's current programmes are as follows:

  Space for Sport and Arts

  New Opportunities Fund PE and Sport

  Club Development—not started

  Community Capital Fund

  Governing Bodies Facilities strategies

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  Quest

  Benchmarking

  PPP and PFI

  Best Value

  Talent camps

  Clubmark

  Sporting Champions

  Sports Sponsorship Advisory Service

  Sports Gateway

  Sport England Direct

  Sports Aid

  Governing Bodies Awards

  English Institute of Sport Services

  Sports Science/Medicine

  World Class programmes

  Commonwealth Games

  National Centres

  English Institute of Sport facilities funding and development

  Active Communities Development Fund

  Sport Action Zones

  Awards for All

  Positive Futures

  Active Communities Projects

  Active Communities Infrastructure Posts-regional

  British Heart Foundation,

  National Association of Clubs for Young People

  Kids Club Network

  Local Exercise Action Pilots (LEAP)

  Football Foundation

  National Strategy for Education and Training

  Step Into Sport

  Volunteer Investment Programme (VIP)

  Coaching Development

  National Association for Sports Development—funding and liaison

  National Sports Development Seminar—funding and liaison

  Sport Development Professionals Regional Induction initiative

  Sport Development Professionals Supporting Infrastructure—Regional Training Units

  Running Sport

  Active Sports

  Child Protection in Sport Unit

  School Sport Coordinators

  Sportsmark and Activemark

  Sportsearch

  Panathlon

  Education infrastructure and Sport Alliances

  Coaching for teachers

  Adults other than Teachers

  Playing Fields and Green Spaces

  Statutory Planning

  Strategic Planning—Facility Planning Model

  Safer Sports Ground

  National projects

  Sportsmatch

  CCPR Funding

  Football Youth Development

  As part of its modernisation process, Sport England is reviewing all the programmes that it funds based on its new business strategy; it expects the review to be completed by the end of the year.

  Sustainability Strategy
  Sue Doughty
  To ask the Secretary of State for Culture, Media and Sport what the sustainability strategy is for her Department; and if she will make a statement on how it has changed since the World Summit on Sustainable Development in Johannesburg. [83496]

  Dr. Howells
  As part of our long-term objective to maximise the Department's contribution to the Government's agenda on sustainable development and regeneration policy, we promised last April at a conference for our sectors held at the Science Museum to produce a sustainable development strategy. We are on target to fulfil this obligation.

  Since the World Summit, my Department has identified among its strategic priorities; the aim of enhancing access to a fuller cultural and sporting life of children and young people, giving them the opportunity to develop their talents to the full; and of improving the productivity of the tourism, creative and leisure industries. These are in line with one of the main programmes for activity agreed at the World Summit, that of eradicating poverty.

  Travel Budget
  Mr. Chope
  To ask the Secretary of State for Culture, Media and Sport what the total budget is for(a) her Department and (b) its agencies for official travelling in 2002–03. [83030]

  Dr. Howells
  [holding answer 25 November 2002]: The DCMS budget for official travelling and subsistence for 2002–03 is £934,894. In addition, the budget for the Royal Parks Agency is £37,700.

  Works of Art (Restitution)
  Mr. Dismore
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on progress concerning the restitution of works of art looted by the Nazis. [82955]

  Dr. Howells
  The Spoliation Advisory Panel received two new claims this year, following its Report on the first claim which was published in January 2001. The Panel met in October 2002 to consider these new claims and will meet again in early 2003 to continue its discussions, when other claims which have been intimated may also be considered.

INTERNATIONAL DEVELOPMENT

  Aid (Poorest Countries)
  Mr. Paul Marsden
  To ask the Secretary of State for International Development what steps she is taking to press other EU countries to(a) apply the EU Procurement Directive regarding tied aid and (b) increase the proportion of aid given to the poorest countries. [83192]

  Clare Short
  We support the Commission's efforts to ensure that member states' aid programmes comply with Community law. The Commission has recently presented to the Council of Ministers a Communication
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  on Untying which reiterates member states' obligation to apply the Procurement Directives to their bilateral programmes.

  Poverty elimination is the stated objective of EU development programmes. Nine of the fifteen member states provide more than 70 per cent. of their aid to the poorest countries. The record for Commission-managed aid is much less poverty focused and is 45 per cent. We continue to press in the Council and in annual budget discussions with the European Parliament for higher priority to be given to poor countries in allocating EC development funds.

  Developing Countries
  Phil Sawford
  To ask the Secretary of State for International Development what action she is taking to help Governments in poorer countries in their efforts to provide targeted support and protection for local producers. [82911]

  Clare Short
  My Department provides support to Governments of developing countries that are designed to meet the different circumstances and needs of a broad range of producers living in those countries. These include efforts to make Government policy more responsive to the demands of poor producers, activities to strengthen the operation of local institutions, interventions designed to improve food security as well as support designed to lead to improved delivery of rural goods and services. We also provide support to a range of international organisations that work closely with Governments in developing countries and seeks to enhance the effectiveness of any interventions agreed between these parties.

  East Timor
  Mrs. Spelman
  To ask the Secretary of State for International Development (1) what discussions her Department has had with(a) the Government of Indonesia, (b) the Government of East Timor and (c) the UNHCR to ensure the return of children being held illegally in West Java to their families in East Timor; [80569]

  (2) what assessment her Department has made of the number of East Timorese children being held illegally in West Java; and what assessment her Department has made of the number of children that have been returned to their families in East Timor. [80568]

  Mr. Mike O'Brien
  I have been asked to reply.

  The violence and confusion surrounding the 1999 referendum on East Timor's status and the subsequent Indonesian withdrawal led to some children becoming separated from their families. There are no reliable figures for the number of children that were separated but the UNHCR estimates around 800 cases remain unresolved, mostly in West Timor.

  We are in regular contact with the UN Mission in East Timor and UNHCR on this sensitive issue, most recently, on 4 October 2002. We have also encouraged the Governments of Indonesia and East Timor to find a solution to this problem.

  Ethiopia
  Mr. Laurence Robertson
  To ask the Secretary of State for International Development what recent discussions she has had with(a) the Prime Minister and (b) international organizations about providing debt relief to Ethiopia. [83155]

  Clare Short
  We support international efforts to reduce Ethiopia's debt burden. Ethiopia qualified for interim debt relief under the Highly Indebted Poor Countries Initiative (HIPC) at Decision Point (DP) in November 2001. Irrevocable relief will be provided at HIPC Completion Point, which is expected within the next two years. Savings resulting from HIPC assistance will amount to around US$ 96 million per year on average until 2021. Ethiopia owes the UK £15.4 million. Provided Ethiopia remains on track with its programme of economic reform, Ethiopia will not be required to make any further payments on its debt to the UK after DP.

  Mr. Laurence Robertson
  To ask the Secretary of State for International Development what long term plans she has to provide Ethiopia with development aid to help that country develop(a) irrigation system and (b) food storage facilities; and if she will make a statement. [83158]

  Clare Short
  An important component of our long-term development assistance to Ethiopia is work on improving food security. As one aspect of their food security strategy the Government of Ethiopia plans to increase access to irrigation and so help boost agricultural productivity. DFID is supporting the establishment of the Eastern Nile Technical Regional Office in Addis Ababa, which in coordination with Sudan and Egypt, plans to improve use of Nile waters for a range of users including irrigation. We have funded improvements in the food storage facilities of the Ethiopian Food Security Reserve Administration, which now has expanded capacity and a more efficient stock management regime. The EFSRA plays a vital role in ensuring the stability of food supplies to organisations distributing food relief to those in need.

  Good Governance
  Mr. Caton: Mr. Martin Caton
  To ask the Secretary of State for International Development what criteria her Department employs in assuring good governance in other countries. [83364]

  Clare Short
  Our strategy to support developing and transitional countries build the institutions of an effective, inclusive, modern state is outlined in the document "Making Government Work for Poor People", which was published in September 2001 and placed in the Libraries of both Houses.

  We encourage poor countries to take the lead in improving the quality of governance in developing countries. To this end we have helped the development of the governance assessments that will form part of the peer reviews of African countries in the New Partnership for Africa's Development (NEPAD). We are also working with the World Bank and other international development agencies to ensure that

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  governance issues are properly reflected in poverty reduction strategies beingprepared for decisions on debt relief and for World Bank and IMF lending.

  These objectives and indicators are included in DFID's Service Delivery Agreement of its Public Service Agreement.

  Sustainability Strategy
  Sue Doughty
  To ask the Secretary of State for International Development what the sustainability strategy is for her Department; and how it has changed since the Earth Summit in Johannesburg. [83445]

  Clare Short
  I refer the hon. Member to the answer I gave the hon. Member for Meriden (Mrs. Spelman) on 15 October 2002,Official Report, column 651W.

  My Department does not have a free-standing sustainability strategy. We focus on improving the effectiveness of the international development effort to reduce poverty and achieve the Millennium Development Goals, including the goal of ensuring environmental sustainability. This continues to be our focus following the World Summit on Sustainable Development.

  My Department works to promote economic growth that is equitable and environmentally sustainable, and works with developing countries to ensure that their poverty reduction strategies reflect the need to manage environmental resources sustainably. The World Summit gave an impetus to this work by integrating sustainability into the international agenda agreed at the Doha meeting of the World Trade Organisation and the Monterrey Conference on Financing for Development.

TRANSPORT

  No-fly Zone (Scotland)
  Pete Wishart
  To ask the Secretary of State for Transport (1) what process is required to introduce a no-fly zone of(a) commercial and (b) military flights over towns and cities in Scotland; [83528]

  (2) if he will assess the no-fly zone status of commercial and military flights over areas in Scotland that contain petro-chemical plants; [83527]

  (3) what plans there are to review the no-fly zone status for both commercial and military flights over towns in Scotland; [83526]

  (4) what (a) commercial and (b) military no-fly zones have been in operation in Scotland since (i) January 2001 and (ii) 11 September 2001; and what locations have been covered. [83529]

  Mr. Spellar
  Following a request from the appropriate Government Department or, in some cases, the local police force, the Civil Aviation Authority drafts a Statutory Instrument (SI). This is ratified by the Department for Transport before being notified to the entire aviation community by means of a Notice to Airmen (NOTAM). The SI, which may be temporary or 268W
  permanent in effect, is binding on civil aircraft only, but military aircraft will normally comply. This process applies to all UK airspace.

  Towns and cities or petro-chemical plants do not have specific 'no-fly zones' unless already in the vicinity of restricted airspace. The Rules of the Air Regulations 1996 prohibit flying by civil aircraft below a height 1,500 feet above any town or city (unless landing or taking off). Military regulations in Volume 3, Part 1 (UK Military Low Flying System) of the UK Military Aeronautical Information Publication (AIP) introduce avoidance criteria for military aircraft.

  From January 2001 to 10 September 2001 there was no change to airspace restrictions in Scottish airspace currently published as permanent in the UK Air Navigation Order (ANO) and Aeronautical Information (AIP). These include the Highlands Restricted Area (HRA) and sites such as Dounreay, Faslane, Rosyth and Chapelcross.

  From September 2001 the following temporary airspace restrictions have been in operation for the periods and reasons shown:
  11 September to 12 September 2001, Entire Scottish Flight Information Region, in response to events of 11 September.
  11 September to 12 September 2001, Entire Scottish Upper Flight Information Region, in response to events of 11 September.
  11 September 2001 to 12 September 2001, Hebrides Upper Airspace Control Area, in response to events of 11 September.
  22 February 2002 to 24 February 2002, Perth—Scottish Labour Party Conference.
  13 September 2002 to 14 September 2002, RAF Leuchars—Air Show.

  In addition, temporary restrictions were imposed around Hunterston and Torness Nuclear Power Stations from 3 November 2001, which were made permanent as from 5 September 2002.

  The Government continue to monitor the number and extent of no-fly zones across the UK.

  Portland Helicopter Rescue Operation
  Mr. Collins
  To ask the Secretary of State for Transport if he will make a statement on the planned consolidation of the Portland sea helicopter rescue operation to Lee-on-Solent. [81654]

  Mr. Jamieson
  No decision has yet been made on the consolidation (relocation) of the Portland area helicopter to Lee-on-Solent.

  Mr. Collins
  To ask the Secretary of State for Transport what estimates he has made regarding the changes to recovery times if the possible consolidation of the Portland sea helicopter rescue operation to Lee-on-Solent goes ahead. [81655]

  Mr. Jamieson
  A risk assessment has been made on the effect of relocating the Portland area helicopter to Lee-on-Solent which indicates that the national criteria for UK Search and Rescue helicopters will continue to be met both in terms of response and recovery times.
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  Mr. Collins
  To ask the Secretary of State for Transport if he will allow a private company to purchase and lease back to the Maritime and Coastguard Agency the hangar for the Portland Sea helicopter rescue operation. [81656]

  Mr. Jamieson
  A range of options for the future of the hanger at Portland are being considered by the Maritime and Coastguard Agency (MCA) appropriate to operational requirements for now and in the future.

  Rescue Times
  Mr. Collins
  To ask the Secretary of State for Transport what estimate he has made of the risk to lives caused by the changes to a 60 minute limit on rescue times in medium to high risk areas. [81658]

  Mr. Jamieson
  The national criteria for UK Search and Rescue helicopters, which includes the response to incidents in medium to high risk areas was established by the UK Search and Rescue Operators Group under the aegis of the UK Search and Rescue Strategic Committee and implemented in April this year following the endorsement of Ministers. The operators group has experienced representatives from all UK Search and Rescue providers including the Department for Transport (DfT), Maritime and Coastguard Agency (MCA), Ministry of Defence (MOD), Home Office, Royal National Lifeboat Institution (RNLI), Police, Fire, Ambulance and Mountain Rescue, together with the Association of Lowland Search and Rescue, teams in England, Wales, Northern Ireland and Scotland. The group considered an operational analysis of the risk assessment which introduced the national criteria.

  Roadworks
  Mr. Laws
  To ask the Secretary of State for Transport what action he is taking to reduce the time taken by utility companies to complete roadworks; and if he will make a statement. [83147]

  Mr. Jamieson
  We are taking a range of measures to deal with this problem.

  Regulations under section 74 of the New Road and Street Works Act came into force in April 2001. These allow highway authorities to charge utilities up to £2000 a day for works which overrun an agreed deadline. Over 120 authorities in England are using these powers which should encourage utilities to carry out their works more quickly and reduce disruption. We have appointed consultants (Halcrow) to monitor the effectiveness of these powers.

  Further "lane rental" powers under the Act are also being tested in pilot schemes. These allow authorities to charge utility companies "lane rental" charges of up to £750 for each of their works, regardless of whether these overrun or not. These pilots are running in Middlesbrough and Camden and Halcrow are also monitoring their results in order to decide whether these powers should be applied throughout England.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Planning
  Mr. Hunter
  To ask the Secretary of State for Environment, Food and Rural Affairs, (1) what assessment she has made of the workings and implementation of the sections of PPG8 which relate to telecommunications operators consulting with the public; and if she will make a statement; [82676]

  (2) if she will take measures to ensure that the sections of PPG8 which relate to telecommunications operators consulting with the public are consistently implemented; and if she will make a statement. [82677]

  Mr. McNulty
  I have been asked to reply.

  In August 2001 the Office of the Deputy Prime Minister introduced improved planning arrangements for telecommunications development. These included improved requirements for consulting local people, backed by tougher guidance in Planning Policy Guidance Note 8. The mobile phone network operators also published last year their Ten Commitments to best siting practice for new development. A key objective is to improve dialogue and consultation with local communities in developing mobile phone networks.

  A Code of Best Practice on Mobile Phone Network Development, produced jointly by representatives of central and local government and the mobile phone industry, was published on 11 November 2002. Copies of which can be found in the House Library. It builds on Government guidance and operators' commitments and provides clear and practical advice to ensure the delivery of significantly better and more effective communication and consultation between operators, local authorities and local people. Standardised practice will promote greater consistency of approach and aid the transparency of the process for all concerned.

  The Federation of the electronics industry has commissioned a review by Deloitte and Touche to thoroughly assess the implementation of the ten commitments including the commitment related to improved consultation with local communities. The review has not yet been completed, but we expect to see the results by the end of 2002.

  Abandoned Cars
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs how many abandoned cars each local authority in England and Wales stated in their submissions to the Municipal Waste Survey in each year since 1997. [82500]

  Alun Michael
  As indicated in the reply on 22 October 2002,Official Report, column 176W, to the hon. Member for Gordon (Malcolm Bruce), the question on abandoned vehicles was asked for the first time in the 2000–01 Municipal Waste Management Survey. Figures from the survey show that 288 local authorities in England and Wales, out of a total of 376, responded

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  to the number of abandoned vehicles question. The authorities and the numbers of abandoned vehicles removed and destroyed reported are listed as follows:

  Authority

  No. of vehicles

  Adur

  793

  Alnwick

  54

  Amber Valley

  147

  Arun

  590

  Ashford

  612

  Aylesbury Vale

  507

  Babergh

  391

  Barking and Dagenham

  2,761

  Barnet

  3,287

  Barnsley

  248

  Basildon

  1,529

  Basingstoke and Deane

  780

  Bassetlaw

  92

  Bath and NE Somerset

  796

  Bedford

  876

  Bexley

  1,356

  Birmingham

  5,466

  Blaby

  113

  Blaenau Gwent

  960

  Blyth Valley

  110

  Bolsover

  249

  Boston

  65

  Bournemouth

  878

  Bracknell Forest

  707

  Bradford

  2,600

  Braintree

  554

  Breckland

  238

  Brent

  3,471

  Brentwood

  400

  Bridgnorth

  37

  Brighton and Hove

  4,000

  Bromley

  3,895

  Bromsgrove

  119

  Broxbourne

  1,393

  Broxtowe

  171

  Caerphilly

  1,800

  Calderdale

  441

  Cambridge

  261

  Camden

  1,629

  Cannock Chase

  30

  Canterbury

  809

  Caradon

  108

  Carmarthenshire

  120

  Carrick

  174

  Castle Point

  450

  Ceredigion

  150

  Charnwood

  153

  Chelmsford

  800

  Chesterfield

  45

  Chester-le-Street

  18

  Chichester

  600

  Chiltern

  195

  Christchurch

  73

  City of Bristol

  2,590

  City of Kingston-upon-Hull

  717

  City of London

  0

  Colchester

  319

  Conwy

  250

  Corby

  504

  Cotswold

  67

  County of Herefordshire

  368

  Craven

  0

  Crawley

  1,145

  Croydon

  2,878

  Dacorum

  1,150

  Darlington

  98

  Dartford

  483

  Daventry

  388

  Derby

  579

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  Authority

  No. of vehicles

  Derbyshire Dales

  40

  Derwentside

  15

  Doncaster

  410

  Dover

  469

  Dudley

  234

  Durham City

  39

  Ealing

  3,754

  Easington

  14

  East Cambridgeshire

  330

  East Devon

  288

  East Dorset

  279

  East Hampshire

  209

  East Hertfordshire

  355

  East Lindsey

  226

  East Northamptonshire

  191

  East Riding of Yorkshire

  227

  East Staffordshire

  164

  Eastbourne

  631

  Eastleigh

  200

  Enfield

  4,711

  Epping Forest

  1,838

  Epsom and Ewell

  360

  Erewash

  270

  Fenland

  176

  Flintshire

  100

  Forest Heath

  145

  Forest of Dean

  186

  Gateshead

  149

  Gloucester

  700

  Gosport

  496

  Gravesham

  884

  Great Yarmouth

  255

  Greenwich

  3,120

  Guildford

  724

  Gwynedd

  619

  Hackney

  2,700

  Hambleton

  96

  Hammersmith and Fulham

  1,430

  Harborough

  550

  Haringey

  6,500

  Harlow

  1,240

  Harrogate

  143

  Harrow

  1,914

  Hart

  256

  Hartlepool

  55

  Hastings

  1,100

  Havant

  897

  Havering

  1,250

  Hertsmere

  534

  High Peak

  87

  Hillingdon

  2,286

  Hinckley and Bosworth

  353

  Horsham

  173

  Hounslow

  2,247

  Ipswich

  785

  Isles of Scilly

  0

  Islington

  2,619

  Kennet

  54

  Kensington and Chelsea

  195

  Kerrier

  232

  Kettering

  350

  King's Lynn and West Norfolk

  271

  Kingston upon Thames

  739

  Kirklees

  287

  Lambeth

  3,308

  Leeds

  877

  Leicester

  1,416

  Lewes

  470

  Lewisham

  5,000

  Lichfield

  271

  Lincoln

  136

  Luton

  2,403

  Maidstone

  1,015

  Mansfield

  650

  273W

  Authority

  No. of vehicles

  Medway

  1,157

  Melton

  30

  Mendip

  250

  Merthyr Tydfil

  482

  Merton

  1,683

  Mid Bedfordshire

  584

  Mid Devon

  376

  Mid Suffolk

  145

  Mid Sussex

  347

  Mole Valley

  621

  Monmouthshire

  244

  New Forest

  474

  Newark and Sherwood

  289

  Newcastle-under-Lyme

  150

  Newham

  6,704

  Newport

  789

  North Cornwall

  266

  North Devon

  33

  North Dorset

  60

  North East Derbyshire

  70

  North East Lincolnshire

  267

  North Hertfordshire

  332

  North Kesteven

  101

  North Lincolnshire

  135

  North Norfolk

  66

  North Somerset

  570

  North Tyneside

  451

  North Warwickshire

  133

  North West Leicestershire

  267

  Northampton

  1,682

  Norwich

  351

  Nottingham

  586

  Nuneaton and Bedworth

  183

  Oadby and Wigston

  58

  Oswestry

  129

  Oxford

  1,455

  Pembrokeshire

  487

  Plymouth

  1,779

  Poole

  649

  Portsmouth

  826

  Powys

  606

  Purbeck

  89

  Reading

  1,090

  Redbridge

  1,562

  Reigate and Banstead

  718

  Restormel

  266

  Richmond upon Thames

  1,201

  Richmondshire

  9

  Rother

  336

  Rotherham

  150

  Runnymede

  609

  Rushcliffe

  181

  Rushmoor

  375

  Rutland

  100

  Ryedale

  45

  Salisbury

  354

  Sandwell

  6,639

  Scarborough

  543

  Sedgefield

  80

  Sedgemoor

  377

  Selby

  120

  Sevenoaks

  498

  Sheffield

  100

  Shepway

  733

  Shrewsbury and Atcham

  86

  Slough

  669

  Solihull

  275

  South Bedfordshire

  500

  South Cambridgeshire

  100

  South Derbyshire

  154

  South Gloucestershire

  987

  South Kesteven

  148

  South Norfolk

  116

  South Northamptonshire

  140

  274W

  Authority

  No. of vehicles

  South Oxfordshire

  418

  South Shropshire

  7

  South Somerset

  356

  South Staffordshire

  48

  South Tyneside

  415

  Southampton

  1,132

  Southend-on-Sea

  1,132

  Southwark

  1,934

  Spelthorne

  596

  St. Albans

  486

  St. Edmundsbury

  760

  Stafford

  37

  Staffordshire Moorlands

  26

  Stevenage

  598

  Stockton-on-Tees

  39

  Stoke-on-Trent

  250

  Stratford-on-Avon

  43

  Stroud

  51

  Suffolk Coastal

  165

  Sunderland

  197

  Surrey Heath

  226

  Sutton

  1,651

  Swale

  738

  Swindon

  440

  Tamworth

  60

  Tandridge

  500

  Taunton Deane

  248

  Teesdale

  17

  Teignbridge

  741

  Telford and Wrekin

  1,332

  Tendring

  835

  Test Valley

  406

  Tewkesbury

  115

  Thanet

  950

  The Vale of Glamorgan

  264

  Three Rivers

  351

  Tonbridge and Malling

  557

  Torbay

  354

  Torfaen

  668

  Torridge

  111

  Tunbridge Wells

  688

  Tynedale

  29

  Uttlesford

  250

  Vale of White Horse

  464

  Walsall

  976

  Waltham Forest

  2,716

  Wandsworth

  2,571

  Warwick

  137

  Watford

  822

  Waveney

  115

  Waverley

  343

  Wealden

  483

  Wear Valley

  40

  Wellingborough

  290

  Welwyn Hatfield

  1,000

  West Berkshire

  697

  West Dorset

  232

  West Oxfordshire

  290

  West Somerset

  64

  West Wiltshire

  113

  Westminster

  496

  Weymouth and Portland

  85

  Winchester

  263

  Windsor and Maidenhead

  488

  Woking

  352

  Wolverhampton

  381

  Worcester

  316

  Worthing

  310

  Wrexham

  231

  Wychavon

  90

  Wycombe

  1,155

  275W
  A total of 238,000 abandoned vehicles were estimated for England and Wales in 2000–01, which includes an estimation for the non-responding authorities.

  Agricultural Employees
  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps are being taken by her Department to measure the number of agricultural employees per hectare on(a) organic farms and (b) non-organic farms within the United Kingdom. [81902]

  Mr. Meacher
  Information is not currently available to enable such a comparison to be made. But additional information to be collected when the EC Farm Structure Survey is next run, in 2003, is expected to provide a basis for doing so.

  Animal Diseases (EU Finances)
  Mr. Weir
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her Answer of 19 November 2002,Official Report, column 40W, on animal diseases (EU Finances), what estimate she has made of the sums of money that would have been received in (a) Scotland, (b) Wales, (c) Northern Ireland and (d) England, had the application been lodged in time. [83694]

  Mr. Morley
  [holding answer 26 November 2002]: Applications totalled some £5.5 million and covered UK TSE surveillance and Northern Ireland TB and Brucella, although not all of this would have been approved. No money would have been received in Scotland, Wales or Northern Ireland because receipts are held centrally. The Commission have now confirmed that it is not legally possible for payments to be made.

  Arable Crops
  Mr. Hurst
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will state the gross value of non-food use of arable crops for the production of energy in 2001. [80478]

  Mr. Meacher
  Information is not collected on the value of arable crops grown specifically for the production of energy. Figures are available which give an indication of the cultivated area of such crops. Oilseed rape, which can be used to produce biodiesel, is the only arable crop commonly grown for the production of energy. Most of the rape destined for biodiesel is grown on set-aside land and in 2001; there were approximately 38,000 hectares grown on set-aside. However, not all of this rape will have been used for biodiesel.

  BABFO
  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs what discussions she has had with BABFO, the trade association for the liquid biofuels industry, on what research and development work is required to drive this new industry forward. [81963]

  Mr. Meacher
  The Department has held a number of discussions with BABFO on research and development work. The views of industry, including BABFO, are 276W
  taken into account when research and development is commissioned and will be particularly helpful when the Department considers future research needs as part of the planned review of the bio-energy programme in early 2003.

  Bat Colonies (Rabies)
  Mr. Paul Marsden
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment has been carried out on the likelihood of rabies affecting bat colonies. [82751]

  Mr. Morley
  For the last 15 years Defra has undertaken a survey for the rabies virus in bats found dead or ill. About 200 bats a year have been examined and the rabies related virus, European Bat Lyssavirus, has been found in only two Daubenton's bats.

  In 2003, when bats have stopped hibernating, we intend to increase our surveillance and visit bat roosts and take blood samples from live bats for testing for European Bat Lyssavirus.

  Biomass
  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs if regional funds have been made available in Yorkshire following the insolvency of the ARBRE biomass power station. [81833]

  Mr. Meacher
  I understand that Yorkshire Forward, the regional development agency for Yorkshire and Humber, has been actively considering the future of the ARBRE biomass power station with the Renewable Energy Development and Deployment Team at the Department of Trade and Industry and the Energy and Transport Directorate of the European Commission. Yorkshire Forward is examining potential and appropriate funding opportunities while discussions with possible future operators continue.

  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent representations her Department has received concerning research into biomass; and what assessment she has made of the value for money of the research funded to date. [81899]

  Mr. Meacher
  The Department receives regular representations on research through meetings, correspondence and applications from industry for LINK research funding. All the Department's agricultural research programmes are subject to formal evaluation on a four-year cycle. The bio-energy programme was last reviewed in 1999, and will be reviewed again in early 2003. At the 1999 review, the value for money of the five programme areas was assessed by external assessors. One programme area was assessed as excellent value for money, three were assessed as good, and one could not be assessed because of the early stage of work at the time. The programme is also subject to on-going evaluation by all Government funders under the Interdepartmental Group on Energy Crop Research, which is chaired by this Department.

  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the findings of research undertaken by the Government into biomass. [81900]
  277W
  Mr. Meacher
  The purpose of the Department's biomass research and development programme is to provide industry with the basic knowledge to achieve an increase in crop yields, with these higher yielding crops ideally being protected using host resistance and biological techniques rather than conventional pesticides. Research has established that miscanthus is the highest yielding biomass crop in the UK. An industry-supported commercial breeding programme has been set up for short rotation coppice willow. This includes the use of varieties to control fungal diseases and pests. Studies have identified and quantified the environmental impact of bio-energy cropping, including the potential for soil carbon sequestration and the effect on water resources.

  BSE
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the welfare of those sheep inoculated intracerebrally with cattle BSE brain homogenate; and what measures are in place to ensure minimal suffering by those animals. [83378]

  Mr. Morley
  The use of animals in scientific procedures is regulated by the Animals (Scientific Procedures) Act 1986, which is widely viewed as the most rigorous piece of legislation of its type in the world. It puts into effect, and in some ways exceeds, European Union Directive 86/609/EEC (regarding the protection of animals used for experimental and other scientific purposes) and offers a high level of protection to animals while recognising the need to use animals in medical research, the development of new medicines and scientific testing.

  Under the 1986 Act, both personal and project licences are required. These ensure that those doing the work are qualified and suitable; that alternatives to animals are used wherever possible; that the number of animals used is minimised; and that suffering or other harmful effects experienced by the animals have been weighed against the potential benefits (to humans or animals). In addition work can only be carried out at designated establishments which meet high standards and which have suitable veterinary and animal welfare personnel.

  The sheep inoculated intracerebrally with cattle BSE brain homogenate at the Institute for Animal Health were no exception to the above legislation. All animals were sedated during intracerebral injection of cattle brain material. Inoculated animals were maintained under exceptionally high standards of animal husbandry practice and their health and welfare conditions continually monitored by the highly trained staff at the Institute for Animal Health. Any animal showing definite signs of clinical disease was euthanased immediately, in order to minimise any suffering.

  Cetaceans
  Mr. Sanders
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent scientific advice on cetacean bycatch she has received; and if she will raise this advice at the forthcoming Council of Fisheries Ministers. [83371]
  278W
  Mr. Morley
  The Sea Mammal Research Unit (SMRU) is continuing to advise this Department on the levels of cetacean bycatch in the fisheries on which it observes, and on mitigation measures. SMRU will shortly be restarting trials in the south west bass fishery to establish whether suitably modified separator trawls can reduce the bycatch of small cetaceans. I have already drawn this work to the attention of Commissioner Fischler and the French Government. I will share the full results with them and other EU Ministers when the results are available.

  Cloned Animals
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs how much her Department and its predecessors have spent on research into the possible use of cloned animals in agriculture. [82858]

  Mr. Morley
  Research to the value of £2.22 million was funded by the Department at Roslin Institute between 1990 and 1999 to understand the causes of Large Offspring Syndrome, a welfare problem in cattle and sheep bred using in vitro fertilisation and embryo transfer. The technology that led to cloning by nuclear transfer resulted from these studies. Research aimed at improving the efficiency of livestock cloning has not been supported by the Department since 1999, although the studies on Large Offspring Syndrome have continued and have identified ways by which the problem can be avoided.

  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs with whom she has had discussions, and from whom she has received representations, in respect of the possible use of cloned animals in agriculture. [82859]

  Mr. Morley
  While there have been no formal discussions and no direct representations received on the use of cloned livestock, the Government have sought advice on the welfare implications of cloning farm animals from the independent Farm Animal Welfare Council (FAWC). FAWC's 1998 report made a number of recommendations, and the Government's response to it can be found on Defra's website (http//defraweb/animalh/welfare/farmed/cloning-resp.htm). In addition, the Agriculture and Environment Biotechnology Commission (AEBC) published a report in September this year on how well current and likely future questions about animals and biotechnology, including cloning, could be answered by the current regulatory and advisory machinery. The Government are currently considering the recommendations in the AEBC report and will respond shortly.

  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to prevent the use in the UK of cloned animals for agricultural purposes; and if she will make a statement. [82860]

  Mr. Morley
  There is legislation in place to protect farm livestock from any welfare concerns arising from both natural and artificial breeding procedures. Consideration is also being given to whether the misuse of biotechnology in animal breeding should be included in the proposed Animal Welfare Bill.

  CO2
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will estimate the CO2 emissions from the aviation sector in each year since 1990; and what the projected figures are for each year to 2010. [80844]

  Mr. Meacher
  [holding answer 20 November 2002]: The UK greenhouse gas inventory and the corresponding projections distinguish between domestic aviation (flights within the UK, the Channel Islands and the Isle of Man) and international aviation (emissions from fuel loaded within this area onto flights with destinations outside it). The table shows the most recent emissions inventory data on carbon dioxide emissions for these two categories from 1990 to 2000, expressed as thousand tonnes of carbon dioxide (ktCO2) per year.

  Year

  Domestic

  International

  Total

  1990

  2,160

  14,791

  16,951

  1991

  2,119

  14,570

  16,689

  1992

  2,222

  16,121

  18,343

  1993

  2,281

  17,241

  19,522

  1994

  2,325

  17,856

  20,181

  1995

  2,449

  19,012

  21,461

  1996

  2,552

  20,238

  22,790

  1997

  2,640

  21,552

  24,192

  1998

  2,765

  24,122

  26,887

  1999

  2,827

  26,424

  29,251

  2000

  2,867

  28,544

  31,411

  Projections on the same basis as the inventory data are available at five yearly intervals from the model of the UK energy economy maintained by the Department of Trade and Industry. This model suggests that, on central assumptions, carbon dioxide emissions from domestic aviation will be 3177 and 3483 kt CO2 per year in 2005 and 2010 respectively, and corresponding projections for international aviation emissions are 31533 and 37583 ktCO2 per year. The projected total emissions are 34710 and 41066 kT CO2 per year in 2005 and 2010 respectively.

  Complaints
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how many complaints were received against her Department in(a) 2001–02 and (b) 2002–03; and what proportion were investigated and concluded in (i) under 14 days, (ii) 15 days to four weeks, (iii) 29 days to eight weeks, (iv) 57 days to 12 weeks and (v) 12 weeks or more. [83150]

  Alun Michael
  15 complaints about standards of service were made to the Department's Complaint Adjudicator during the 2001–02 financial year, and five have so far been made during 2002–03. There is no central statistical record of less formal complaints.

  Defra aims to investigate service standard complaints within 15 working days wherever possible. However, due to the complexity of some cases it was not feasible to investigate them fully within that time. In all such cases, a holding reply was sent explaining the reasons for the delay and when the complainant could expect a full response.
  280W
  The length of time taken to investigate and conclude the complaints was as follows:

  Year

  Under 14 days

  15 days to four weeks

  29 days to eight weeks

  57 days to 12 weeks

  12 weeks or more

  Total complaints

  2001–02

  0

  4

  5

  5

  1

  15

  2002–03

  0

  1

  4

  0

  0

  5

  Correspondence
  Mr. Arbuthnot
  To ask the Secretary of State for Environment, Food and Rural Affairs when she will reply to the letter from the right hon. Member for North East Hampshire of 10 May regarding Mr. Lloyd, a constituent. [83025]

  Alun Michael
  My right hon. Friend, the Secretary of State, replied on 25 November.

  Deer (Forestry Damage)
  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs what studies her Department has(a) commissioned and (b) evaluated into the economic damage caused by the deer population to forestry. [80830]

  Mr. Morley
  The Forestry Commission has not recently commissioned any work on the economic implications of deer. It has however undertaken various related studies, such as an assessment of wildlife damage in forests and a review of damage by mammals in north temperate forests.

  Drinking Water
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the adequacy of(a) controls and (b) the enforcement regime relating to drinking water from private suppliers. [83380]

  Mr. Morley
  Drinking water quality standards of private water supplies and requirements for sampling and analysis of supplies are set out in the Private Water Supplies Regulations 1991. The 1998 Drinking Water Directive (98/83/EC) introduced some new and some revised standards for drinking water quality. My Department will be consulting next year on draft proposals to implement the new and revised standards for the purposes of private water supplies.

  Local authorities are responsible for monitoring at the frequencies set out in the Regulations and, where necessary, enforcement of regulatory standards. Local authorities have powers in primary legislation to serve formal notice, requiring specified remedial action where a private supply is unwholesome, or is insufficient for the domestic purposes of people living in a house. Where a private supply is, or may become, so polluted that it is prejudicial to health, an authority may also apply to the court for an order for steps be taken to prevent injury or danger to health.
  281W
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what percentage of domestic customers it is estimated rely on lead pipes for connections to company supplies of drinking water. [83381]

  Mr. Morley
  In England and Wales, there are an estimated 21 million properties. Information provided by water companies recently indicates an estimated total of some 7.5 million lead communication pipes connecting properties to water mains.

  Food (Local Production)
  Mr. Steinberg
  To ask the Secretary of State for Environment, Food and Rural Affairs what percentage of UK food was locally produced in the last 12 months; and what the projection is for the next(a) five and (b) 10 years. [82898]

  Mr. Morley
  This information is not available. The local food sector is highly diverse and any attempt to assess its size and impact is very difficult. In addition, as the Policy Commission on the Future of Food and Farming has recognised, there is no commonly accepted definition of locally produced food.

  Future of Farming and Food Report
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what the timetable is for the implementation of the recommendations outlined in the Report on the Future of Farming and Food. [81156]

  Mr. Morley
  The Government have already made significant progress delivering action identified in the Policy Commission's Report. A new strategy for sustainable farming and food in England will be published shortly. This will include a formal response to each of the Policy Commission's recommendations.

  An Implementation Group of independent members, chaired by former Policy Commission chair Sir Don Curry, will oversee delivery of the new strategy.

  Illegal Imports
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how many illegal imports by type in passenger baggage and freight were identified at Heathrow(a) from 1 April 2001 to 16 September 2002 and (b) since 16 September. [82412]

  Mr. Morley
  [holding answer 21 November 2002]: The seizures of illegal imports through Heathrow airport as notified to the Illegal Animal Products Seizures database are as follows:

  1 April 2001 to 15 September 2002

  16 September 2002 to 19 November 2002

  Number of seizures

  Weight (kgs)

  Number of seizures

  Weight (kgs)

  Commercial

  Meat

  19

  1,916

  1

  165

  Fish

  35

  1,496

  10

  657

  Dairy

  15

  2,459

  1

  11

  Multiple

  29

  3,333

  5

  714

  Personal

  Meat

  493

  2,762

  167

  821

  282W

  1 April 2001 to 15 September 2002

  16 September 2002 to 19 November 2002

  Number of seizures

  Weight (kgs)

  Number of seizures

  Weight (kgs)

  Fish

  170

  1,932

  84

  653

  Dairy

  51

  319

  60

  355

  Multiple

  226

  4,645

  114

  1,485

  Kerbside Recycling
  Tim Loughton
  To ask the Secretary of State for Environment, Food and Rural Affairs how many local authorities which undertook kerbside recycling schemes have carried out a continuous scheme for longer than six months. [83298]

  Mr. Meacher
  [holding answer 25 November 2002]: We do not have information on how long schemes have been in operation. This information is not held centrally.

  Kyoto Agreement
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on the extent to which emissions from the aviation sector are covered by the Kyoto agreement [83377]

  Mr. Meacher
  The Kyoto Protocol when it comes into effect will cover emissions from domestic aviation for all Parties who ratify the Protocol, although only Annex I Parties to the UN Framework Convention on Climate Change (developed countries) have emission limitation or reduction targets. Emissions from international aviation are not included in the targets that Annex I countries who have ratified the Kyoto Protocol will have to meet. Article 2.2 of the Protocol requests Annex I Parties to limit or reduce emissions from international aviation, working through the International Civil Aviation Organisation.

  Liquid Biofuels
  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs what proportion of funds spent on researching fuel from farmland has been directed to liquid biofuels in the past five years. [81962]

  Mr. Meacher
  With the exception of a small number of projects evaluating the environmental and socio-economic impacts of using oilseed rape for biodiesel, Defra does not fund research and development work on liquid biofuels. Such research is largely covered by the programmes of the Department of Trade and Industry and the Department for Transport. This Department does have programmes supporting the sustainable development of arable crops that are used for liquid biofuels, both biodiesel and bioethanol, and food. Over the past five years, such research amounted to £10 million for wheat and £4 million for oilseed rape out of total expenditure of £513 million for agricultural, food chain, agri-environmental and non-food research.

  Paper Dyes
  Dr. Murrison
  To ask the Secretary of State for Environment, Food and Rural Affairs what discussions she has had with representatives of the paper industry on moderating the use of dyes in paper that render material unsuitable for recycling. [82718]

  Mr. Meacher
  I am planning to have such discussions in the near future.

  Pelagic Trawls
  Mr. Sanders
  To ask the Secretary of State for Environment, Food and Rural Affairs which pelagic trawl fisheries in the Celtic Sea/Biscay/Channel area UK fishing vessels are active in; how many UK vessels are involved in each; and how many of these fisheries are subject to observer monitoring. [83372]

  Mr. Morley
  There are normally less than 10 UK vessels active in the pelagic trawl fisheries in the south western approaches, which may pursue any of the individual fisheries. Observers have been on vessels engaged in the anchovy, bass, herring, mackerel, pilchard, smelt and sprat fisheries.

  Mr. Sanders
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what discussions she has had within the Council of Fisheries Ministers on an observer programme to monitor cetacean bycatch on pelagic trawl vessels in the Celtic Sea/Biscay/Channel area; [83373]

  (2) what discussions she has had with her European counterparts about cetacean bycatch in pelagic trawl fisheries south and west of Britain; and if she will make a statement. [83376]

  Mr. Morley
  The European Commission intends to bring forward proposals to reduce cetacean bycatch as part of its proposals for reform of the Common Fisheries Policy. Detailed discussions within the Council on the nature of such a strategy will follow

  Waste recycling rates, glass, 1990–97

  Percentage of apparent consumption

  Year

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  1997

  Canada

  —

  —

  17

  —

  —

  —

  —

  —

  Mexico

  —

  4

  4

  4

  4

  4

  4

  4

  USA

  20

  20

  22

  22

  23

  24

  —

  —

  Japan

  48

  52

  56

  —

  —

  —

  —

  —

  Korea

  46

  45

  43

  44

  46

  57

  60

  68

  Australia

  —

  —

  36

  —

  —

  42

  —

  —

  N. Zealand

  —

  —

  —

  —

  36

  —

  —

  —

  Austria

  60

  60

  64

  68

  76

  —

  —

  88

  Belgium

  —

  55

  54

  55

  67

  67

  66

  75

  Czech R.

  —

  —

  —

  —

  —

  —

  —

  —

  Denmark

  —

  35

  48

  64

  67

  63

  66

  70

  Finland

  36

  31

  44

  46

  50

  50

  63

  62

  France

  —

  41

  44

  46

  48

  50

  50

  52

  Germany

  54

  61

  60

  65

  75

  75

  79

  79

  Greece

  15

  22

  20

  27

  29

  35

  29

  26

  Hungary

  —

  —

  —

  —

  —

  —

  —

  —

  Iceland

  70

  75

  75

  —

  —

  —

  —

  —

  Ireland

  23

  23

  27

  29

  31

  39

  46

  38

  Italy

  —

  53

  53

  52

  54

  53

  53

  34

  Luxembourg

  —

  —

  —

  —

  —

  —

  —

  —

  Netherlands

  67

  70

  73

  76

  77

  80

  81

  82

  Norway

  —

  22

  44

  67

  72

  75

  75

  76

  Poland

  —

  —

  —

  —

  —

  —

  —

  —

  284W
  publication of the Commission's proposals. I have written to Commissioner Fischler and to the French Minister pressing the need for action in this area and will continue to raise the issue with EU Ministers as opportunities arise to do so. We are already funding UK observer programmes in relation to cetacean bycatch on pelagic vessels.

  Mr. Sanders
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) what funding her Department has allocated to trialling marine mammal excludes devices for pelagic trawls; and what alternative mitigation measures she is investigating; [83374]

  (2) what measures she is undertaking to curb cetacean bycatch in pelagic trawl fisheries south and west of Britain. [83375]

  Mr. Morley
  This Department has allocated approximately £140,000 for trials into the use of exclusion devices to reduce the bycatch of cetaceans in pelagic trawl fisheries. If these trials are not successful, we will look at other measures. I do not rule out any approach at this stage including arguing for restrictions on fishing, gear or seasonal closures.

  Recycling
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what information she has collated on recycling rates within the OECD for(a) glass, (b) plastic and (c) total waste stream in each year since 1990. [81591]

  Mr. Meacher
  [holding answer 20 November 2002]: The United Kingdom contributes statistics on waste arisings and recycling rates to the OECD every two years. These are published in "OECD Environmental Data". The most recent publication detailing these figures for OECD countries is 1999. The Department for Environment, Food and Rural Affairs has contributed more recent figures but these have not yet been published. The relevant pages for glass are detailed in the table. Figures are not available for plastic or total waste recycled.
  285W

  Waste recycling rates, glass, 1990–97

  Percentage of apparent consumption

  Year

  1990

  1991

  1992

  1993

  1994

  1995

  1996

  1997

  Portugal

  27

  29

  31

  29

  32

  42

  42

  44

  Spain

  27

  27

  27

  29

  31

  32

  35

  37

  Sweden

  —

  44

  58

  59

  56

  61

  72

  76

  Switzerland

  65

  71

  72

  78

  84

  85

  89

  91

  Turkey

  31

  28

  25

  23

  22

  12

  13

  20

  UK

  21

  21

  25

  27

  27

  26

  26

  26

  Slovak R.

  —

  —

  —

  —

  —

  —

  —

  40

  Notes:

  Recycling is defined as reuse of material in a production process that diverts it from the waste stream, except for recycling within industrial plants and the reuse of material as fuel. The recyling rate is the ration of the quantity collected for recycling to the apparent consumption (domestic production + imports—exports).

  CAN Packaging glass only.

  MEX Recycling rates are based on amounts of waste generated and refer to municipal waste only.

  USA Data refer to the material diverted from the municipal waste stream; recycling rates are based on amounts of waste generated.

  JPN Returnable bottles are excluded; data refer to reuse of glass as cullet compared to national production of glass bottles.

  NZL Packaging glass only.

  FRA Amounts collected as a percentage of apparent consumption (FEVE)

  DEU 1990:Western Germany only; 1991 onwards: total Germany; recycling is based on total sales.

  NLD Glass collected in bottle banks as percentage of sale of products in disposable glass on domestic market.

  NOR Excludes considerable amounts of glass recovered before entering the waste stream (deposits/reuse of bottles).

  UKD Great Britain only; glass collected in bottle banks and from industrial sources (bottlers and packers) and flat glass.

  Source:

  "OECD Environmental Data, Compendium 1999", OECD 1999

  Refrigerator Disposal
  Paddy Tipping
  To ask the Secretary of State for Environment, Food and Rural Affairs how much financial support each local authority will receive during the current financial year to help with the disposal of refrigerators. [83045]

  Mr. Meacher
  [holding answer 26 November 2002]: My written statement of 14 November related to the special grant report (No. 109) laid in Parliament that day (Col 2WS). The draft report, which is subject to the agreement of the House, details the proposed allocation to the relevant receiving authorities of the £40 million allocated this year to assist with the disposal of refrigerators. We propose that the amount payable to an authority will be allocated according to the formula used for county services within the Environmental, Protective and Cultural Services SSA block.

  Scrapie
  Mr. Roger Williams
  To ask the Secretary of State for Environment, Food and Rural Affairs what measures she is taking to ensure the selective breeding of scrapie-resistant sheep; and how much her Department has spent on research into scrapie in each of the last five years. [83149]

  Mr. Morley
  The national scrapie plan has been in operation since July 2001. The aim of the plan is to eradicate TSEs from sheep by breeding genetic resistance into the national flock. So far, over 260,000 sheep have been genotyped. In addition, 25,000 ewes have been genotyped in Wales through the Welsh ewe genotyping scheme.

  The table gives expenditure on research into sheep TSEs (covering both scrapie and BSE research). The figures include expenditure on the development of TSE diagnostic tests.
  286W

  Expenditure on development of TSE diagnostic tests

  (£)

  1997 to 1998

  3.7

  1998 to 1999

  5.1

  1999 to 2000

  6.9

  2000 to 2001

  8.4

  2001 to 2002

  10.4

  Sellafield (Radiological Leaks)
  Llew Smith
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the radiological leaks from Sellafield; when they took place; and what and how much radioactive material was leaked to the environment. [83251]

  Mr. Meacher
  The Environment Agency conducts monitoring of the local surface waters around the Sellafield site and springs of groundwater found on the Sellafield beach. I understand that, to date, the Agency has identified two sources which result in detectable levels of radioactivity off the Sellafield site, albeit at very low levels.

  These involved seepage of tritium from on-site burial trenches from the 1950s to the present day, resulting in off-site radioactivity levels of 119—353 Becquerels/litre; and seepage of technetium-99 from the B241 waste storage tanks from around 1978 to the present day, resulting in off-site radioactivity levels of <0.2 Becquerels/litre.

  The radiological and environmental impact of the leakage of low levels of tritium and technetium-99 is assessed by the Environment Agency to be trivial.

  Sustainability Strategy
  Sue Doughty
  To ask the Secretary of State for Environment, Food and Rural Affairs what the
  287W
  sustainability strategy is for her Department; and how it has changed since the Earth Summit in Johannesburg. [83443]

  Mr. Meacher
  The Defra sustainable development strategy, "Foundations For Our Future", was published in June 2002, it provides a framework for how Defra will develop policies and identifies a set of indicators which will be used to monitor Defra's progress. The strategy will be reviewed in June 2003 taking into account the outcome of the World Summit on Sustainable Development.

  Travel Budget
  Mr. Chope
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total budget is of(a) her Department and (b) its agencies for official travelling in 2002–03. [83031]

  Alun Michael
  The total 2002–03 travel and subsistence budget for Defra and its executive agencies, is as follows:

  £ million

  Total for Defra

  16.193

  of which agencies

  3.662

  TSE Surveillance
  Mr. Michael Weir
  To ask the Secretary of State for Environment, Food and Rural Affairs what funding has been allocated for TSE surveillance in 2003 in(a) Scotland, (b) Wales and (c) Northern Ireland. [83695]

  Mr. Morley
  For 2003/2004, estimated funding allocated for TSE surveillance and associated costs in GB amounts to around £44 million. The testing programme is administered by Defra, in close consultation with the devolved administrations and FSA, so costs are not broken down by country. The estimated allocation of funding for TSE surveillance and associated costs in Northern Ireland is £3.5 million.

  Water Supplies
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs how many domestic customers are reliant on water supplies from private water suppliers. [83379]

  Mr. Morley
  Local authorities in England and Wales are required to maintain public registers of private water supplies in their areas. On the basis of the information provided by local authorities, we estimate that about one per cent. of the population in England and Wales use water from private supplies.

FOREIGN AND COMMONWEALTH AFFAIRS

  Biological and Chemical Attacks
  Mr. Gordon Prentice
  To ask the Secretary of State for Foreign and Commonwealth Affairs which countries in the middle east have purchased from the UK in the last 12 months protective clothing to guard against biological and chemical attack. [82549]
  288W
  Nigel Griffiths
  I have been asked to reply.

  Such equipment may not be licensable, and since sales can fall through, even after a licence has been granted, the DTI does not hold records of such purchases.

  Grants
  Mr. McLoughlin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the grants funded by his Department for which individual members of the public and organisations may apply; and if he will make a statement as to(a) the total of such funding in the last financial year, (b) the total number of awards and (c) their administrative costs. [82196]

  Mr. Rammell
  The FCO funds grants for Education, the Environment, Human Resources and other projects. The total funding in 2001/02 was £58 million.

  The administration of grant programmes is carried out by a number of different units within the department to which a range of staff make a contribution. It is not possible to provide an accurate estimate of these costs centrally.

  Tibet
  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment he has made of the human rights situation in Tibet. [82498]

  Mr. Rammell
  We continue to have serious concerns about the human rights situation in Tibet. We welcome, however, the releases this year of several Tibetan prisoners, including Ngawang Choepel, Chadrel Rinpoche, Jigme Zangpo and Ngawang Sangdrol. All of these were on the list of individual cases of concern that we have raised with the Chinese Government. We have also welcomed, along with EU partners, the recent visit of the Dalai Lama's representatives to China. We encourage both sides to continue to use dialogue to find a peaceful resolution to the Tibetan issue.

  Norman Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to encourage the European Union to achieve the early appointment of a special co-ordinator in Tibet. [82499]

  Mr. Rammell
  The EU discussed the appointment of a special representative for Tibetan issues in April. After careful consideration, and bearing in mind the US experience, the EU decided against such an appointment. The EU presidency informed the Dalai Lama's representative accordingly.

CABINET OFFICE

  Civil Contingencies
  Miss Anne McIntosh
  To ask the Minister for the Cabinet Office what recent review of civil contingencies procedures there has been. [82223]

  Mr. Alexander
  The Civil Contingencies Committee (CCC) has conducted a wide-ranging review of the United Kingdom's contingencies procedures and infrastructure. In conducting the review, the
  289W
  CCC worked systematically through Government Departments, the emergency services, local authorities and the devolved Administrations. The arrangements are revised and tested through exercises to encourage continual improvement of our response arrangements.

  Contingency plans for civil emergencies are reviewed by the departmental owners of those plans and exercises are carried out on a routine basis to test their effectiveness and identify areas for improvement. This process is co-ordinated by a Cabinet Committee (DOP(IT)(R), chaired by the Home Secretary, with support from officials in the Cabinet Office.

  The Civil Contingencies Secretariat (CCS) is currently co-ordinating a rewrite of the third edition of "Dealing with Disaster", which is the core guidance document on planning for, responding to, and recovering from a major disruptive incident. The Government have also sponsored a review of emergency planning. The recommendations are being incorporated into the programme of work leading towards a civil contingencies Bill.

  Firefighters' Pay
  Mr. Paul Marsden
  To ask the Minister for the Cabinet Office what advice his Department has given to the Fire Service's employers on pay increases for firefighters in the past 12 months. [82689]

  Mr. Alexander
  None.

PRIME MINISTER

  Royal Prerogative (War Decisions)
  Norman Baker
  To ask the Prime Minister if he will bring forward proposals to make it a requirement for Parliament to be consulted prior to each exercise of the power under Royal Prerogative to take the country to war. [82853]

  The Prime Minister
  I refer the hon. Member to the answer I gave my hon. Friend the Member for Nottingham, North (Mr Allen) on 21 October 2002,Official Report, column 78W.

NORTHERN IRELAND

  Research Funding (Universities)
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland what plans he has to increase research funding for universities in Northern Ireland. [81605]

  Jane Kennedy
  The draft Budget approved by the Executive prior to suspension contained an increase in line with inflation for university research funding. The final Budget proposals will be published in December. Until then I am not in a position to comment on the matter.

  Crime Victims
  Mr. Barnes
  To ask the Secretary of State for Northern Ireland what action he has taken to help the victims of crime in Northern Ireland; and if he will make a statement. [81606]

  Mr. Browne
  The Government remain committed to improving access to justice for victims of crime in Northern Ireland. The recommendations of the Criminal Justice Review sets out specific recommendations which are currently being implemented.

  We have invested almost £2 million in Victim Support (Northern Ireland) and the establishment of court witness schemes in this financial year.

  Belfast Agreement
  Mr. Tom Harris
  To ask the Secretary of State for Northern Ireland what progress the Government have made in implementing the Good Friday Agreement. [81607]

  John Robertson
  To ask the Secretary of State for Northern Ireland what progress has been made on the implementation of the Good Friday Agreement. [81618]

  Mr. Paul Murphy
  Implementation for the agreement is well advanced. But progress now, including restoration of the institutions, can only happen if there is trust that all parties remain committed to fulfilling their obligations, including the commitment to exclusively democratic and peaceful means. If we can secure that we can complete implementation rapidly.

  Criminal Justice Review
  Brian White
  To ask the Secretary of State for Northern Ireland if he will make a statement on the implementation of the criminal justice review. [81608]

  Mr. Browne
  The Criminal Justice Review aims to create a more modern, effective, transparent and accountable criminal justice system for Northern Ireland. The Government intend to publish a revised Implementation Plan for the Review in early 2003. The revised plan will provide details of progress made against its 294 recommendations. Good progress is already being made in a number of areas, supported by the Justice (Northern Ireland) Act 2002. The revised plan represents another significant step towards the full implementation of the Belfast Agreement.

  Devolved Institutions
  Tony Wright
  To ask the Secretary of State for Northern Ireland what plans he has to ensure that only those people and parties committed to exclusively peaceful methods may participate in the devolved institutions when they resume. [81609]

  Mr. Paul Murphy
  I do not believe restoration of the institutions would be possible on any other basis.

  Mike Gapes
  To ask the Secretary of State for Northern Ireland if he will make a statement on the prospects for restoration of devolved government. [81616]
  291W
  Mr. Paul Murphy
  I refer my hon. Friend to the response I gave earlier to my hon. Friend the Member for Barnsley, Central (Mr. Illsley).

  Decommissioning
  Sir Nicholas Winterton
  To ask the Secretary of State for Northern Ireland if he will list by quantity and type the illegally held weapons and explosives decommissioned under the Good Friday Agreement. [81610]

  Jane Kennedy
  There have been three acts of decommissioning carried out by paramilitary organisations.

  The Loyalist Volunteer Force decommissioned:2 Madsen 9 mm sub-machine guns; 1 Sten 9 mm Mark 2 sub-machine gun; 1 modified Lanchester 9 mm Mark 1 sub-machine gun; 1 Steyr 7 mm rifle [1904]; 1 homemade.22 caliber rifle; 1 sawn-off double-barrelled 12 gauge shotgun; 1 FN Browning 9 mm semi-automatic pistol; 1 FN 7.65 mm semi-automatic pistol; 31 12-gauge magnum 00 buckshot shotgun shells; 23.38 caliber semi wad-cutter cartridges; 45.556 caliber cartridges; 280 9 mm cartridges; 5 electrical detonators; 2 pipe bombs; 2 weapons stocks and 5 assorted magazines.

  The IRA have carried out two acts of decommissioning. On 23 October 2001 the Commission reported that they had witnessed an event which they regarded as significant in which the IRA had put a quantity of arms completely beyond use. The material in question included arms, ammunition and explosives. On 8 April 2002 the Commission again reported that the IRA had put a varied and substantial quantity of ammunition, arms and explosive material beyond use. When the task is completed an inventory of the arms will be provided to the British and Irish governments.

  Mr. Baron
  To ask the Secretary of State for Northern Ireland if he will make a statement on timetables set for the completion of IRA decommissioning and disbandment. [81625]

  Jane Kennedy
  Following the suspension of the devolved institutions in Northern Ireland the IRA issued a statement suspending contact with the Independent International Commission for Decommissioning. During his visit to Northern Ireland on 17 October 2002, the Prime Minister stated categorically that Republicans have to make the commitment to exclusively peaceful means, real, total and permanent as should all paramilitary organisations.

  Secondary School Admissions
  Mr. Andrew Turner
  To ask the Secretary of State for Northern Ireland if he will make a statement on the reform of the secondary school admissions process. [81611]

  Jane Kennedy
  The recommendations of an independent Post Primary Review Body, chaired by Mr. Gerry Burns, were published for consultation in October 2001. The consultation, which was extensive, inclusive and transparent, ended on 28 June 2002 and a report on the responses was published on 8 October 292W
  2002. The responses indicated a widespread demand for change and an emerging consensus, including among political parties, for the ending of the transfer tests.

  I am determined to take the review forward and to continue to work towards the abolition of the transfer tests as soon as practical. No decisions have been taken about academic selection or new post-primary arrangements. In the responses to consultation a range of suggestions were made for future post-primary arrangements, including options involving academic selection, and Department of Education officials will be discussing these issues with key education partners and representatives of parents in the coming weeks. My aim is to develop a modern and fair education system which addresses the weaknesses of our current arrangements and enables all children to fulfil their potential.

  Multi-party Talks
  Huw Irranca-Davies
  To ask the Secretary of State for Northern Ireland if he will make a statement on progress with the multi-party talks. [81612]

  Mr. Paul Murphy
  The two Governments and the political parties met last Thursday to discuss the key issues related to political advance, including how to implement the Belfast Agreement in full and how to address the difficulties caused by paramilitary activity. We plan a further meeting tomorrow.

  Ann McKechin
  To ask the Secretary of State for Northern Ireland what meetings he has had with other political parties on restoring powers to the Northern Ireland Executive. [81614]

  Mr. Paul Murphy
  In recent weeks I have held bilateral meetings with all the parties in the Northern Ireland Assembly. Last Thursday the two Governments met a number of the parties to discuss the way forward. We shall meet them again tomorrow.

  Peace Plan
  Dr. Palmer
  To ask the Secretary of State for Northern Ireland if he will make a statement on the progress of the peace plan. [81613]

  Mr. Paul Murphy
  I refer my hon. Friend to the answer I gave today to my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris).

  Minimum Income Guarantee
  Kali Mountford
  To ask the Secretary of State for Northern Ireland how many pensioners receive the minimum income guarantee in Northern Ireland. [81615]

  Mr. Paul Murphy
  77,720 pensioners in Northern Ireland are receiving minimum income guarantee.

  Organised Crime
  Chris Ruane
  To ask the Secretary of State for Northern Ireland what progress has been made in combating organised crime. [81617]

  Jane Kennedy
  The Organised Crime Task Force (OCTF) which I chair has a clear strategy in place to tackle organised criminal activity. This is laid out in the OCTF threat and strategy documents, which were published on 23 May 2002.
  293W
  Following on from the successes of the 2001–02 financial year when 57 criminal networks were subject to detailed law enforcement investigation and 43 had members arrested, the law enforcement agencies continue to score many notable successes against the organised criminals.

  For example, in May 2002, during a series of joint search and arrest operations, the Police and Inland Revenue successfully uncovered widespread misuse of tax certificates in the construction industry, estimated to cost the Exchequer in the region of £10 million. In this operation, four people were arrested.

  In October 2002 one man was arrested following the detection of two fuel laundering plants. In the same operation, 30,000 litres of fuel and equipment used in the laundering process were seized by Customs Officers, assisted by PSNI. There have been many such seizures.

  Also in October 2002 the police smashed a loyalist extortion racket in the construction industry. Three individuals, allegedly involved in obtaining money by the use of threats, were arrested in north Belfast.

  The Task Force recognises that public support for the work of the law enforcement agencies is an essential ingredient for overall success against organised criminals. In September this year an OCTF website was launched. This is an important development, which will open a "shop window" for the OCTF and permit two way communications between the Task Force and the public. In October I hosted an OCTF awareness evening for the business community in Armagh and I plan to host a second awareness evening early in the new year in Ballymena.

  Official Document Theft (Security Implications)
  Dr. Julian Lewis
  To ask the Secretary of State for Northern Ireland what assessment he has made of the security implications of the theft of documents from police and Government offices. [81619]

  Mr. Paul Murphy
  The Government take the break-in at Castlereagh and the alleged terrorist intelligence-gathering operation at Stormont very seriously.

  Sir John Chilcot has been asked to conduct a review of the national security implications of the break-in at Castlereagh. A progress report has been received from Sir John, but as you will understand, the nature of the material it contains means that it is not appropriate to make it public.

  A team from the Security Service is currently undertaking a review of security procedures in the Northern Ireland Office, and I look forward to reading their report. Progress on their recommendations may be made within weeks as improvements are identified, but the review cannot be concluded until after the related police investigations are concluded.

  Community Policing
  Ian Lucas
  To ask the Secretary of State for Northern Ireland if he will make a statement on the role of the Police Service of Northern Ireland in community policing. [81620]
  294W
  Jane Kennedy
  It is the policy of the Police Service of Northern Ireland to promote community policing as a core function of all policing activity by gearing its service towards meeting locally identified priorities and needs. The Police Service has recently published a policy document, "Policing with the Community in Northern Ireland", which they are arranging to place on their website. I have placed a copy in the Library.

  The Government have made clear its intention, through the coming policing legislation, to clarify the centrality of community policing in the work of PSNI and the Board's role in monitoring this.

  Violence
  Sir Sydney Chapman
  To ask the Secretary of State for Northern Ireland if he will make a statement on the recent level of violence in Northern Ireland. [81621]

  Jane Kennedy
  The recent outbreak of renewed violence at the interface in East Belfast is disappointing and is to be condemned. There is evidence that this was clearly orchestrated with the intent of stirring up again sectarian tensions within the area. The sight of a gunman on the streets cannot be tolerated.

  It is time for republican and loyalist paramilitary groups to make a commitment to end all forms of violence.

  Aggregates Levy
  Mr. Tynan
  To ask the Secretary of State for Northern Ireland what research his Department has carried out in the last six months regarding the impact of the introduction of the aggregates levy in Northern Ireland. [81622]

  Mr. Pearson
  None. Responsibility for policy regarding the aggregates levy rests with HM Treasury/Customs and Excise.

  Security
  Mr. Goodman
  To ask the Secretary of State for Northern Ireland if he will make a statement on the security situation. [81623]

  Jane Kennedy
  Dissident Republicans remain a threat to the peace process but for the most part their activities have been thwarted, intercepted or nullified by good policing operations. Sectarian violence continues to blight both communities in interface areas in Northern Ireland.

  Recent activities by paramilitary groups on ceasefire have given cause for concern and the Secretary of State will continue to make judgments as set out in legislation under the Sentences Act 1998, particularly section 3(9).

  However, ceasefires in themselves are not enough and we must now see a real and permanent end to the activities of all paramilitary organisations.

  Schools (Religious Division)
  Mr. Allen
  To ask the Secretary of State for Northern Ireland what proposals he has to end religious division in schools. [81624]
  295W
  Jane Kennedy
  The Government do not seek to impose any particular type of education. The policy in Northern Ireland is that children should be educated in accordance with the wishes of their parents providing this does not involve unreasonable public expenditure.

  All schools are open to all pupils regardless of religion. All schools should further understanding of the diversity of national, religious and ethnic identities, and the need for mutual respect and tolerance.

  Employment Equality
  Fiona Mactaggart
  To ask the Secretary of State for Northern Ireland if he will make a statement on progress towards equality in employment between women and men in Northern Ireland. [81626]

  Mr. Browne
  The Programme for Government contains a commitment to bring forward a cross-Departmental gender equality strategy during 2003. This will strengthen work being done under section 75 of the Northern Ireland Act 1998.

  September 1997

  September 2002

  Increase

  Count

  WTE1

  Count

  WTE

  Count

  WTE

  Qualified nurses2

  12,994

  11,085.22

  14,137

  11,933.85

  1,143

  848.63

  Unqualified nurses

  3,799

  3,253.37

  4,506

  3,902.51

  707

  649.14

  Bank nurses3

  1,356

  n/a

  3,048

  n/a

  1,692

  n/a

  Total

  18,149

  n/a

  21,691

  n/a

  3,542

  n/a

  1 Whole Time Equivalent

  2 Figures for qualified nurses include health visitors, district nurses, midwives, school nurses, community psychiatric nurses, student health visitors, student midwives and other qualified nurses.

  3 Bank nurses maintain service delivery by covering staffing shortfalls and fluctuating workloads. Due to the variable nature of their employment it is not possible to obtain accurate whole time equivalent data with which to measure their input to the service.

  Source:

  Human Resource Management System

TRADE AND INDUSTRY

  Agency Workers
  Mr. Brian Jenkins
  To ask the Secretary of State for Trade and Industry (1) what recent discussions she has had with (a) employment agencies and (b) trade unions regarding the impact of the proposed Directive on Temporary Agency Work; [82948]

  (2) what research her Department has carried out on (a) the number of agency workers as a percentage of the population and (b) the impact of the proposed EU Directive on Temporary Agency Work in (i) the UK and (ii) other European countries. [82949]

  Alan Johnson
  The DTI commissioned a survey of employment agencies which was conducted by the Bostock Marketing Group (BMG) in 1999. This reported an estimate for the number of temporary agency workers in the UK.

  The DTI produced a regulatory impact assessment (RIA) in 2002 which estimate the impact of the proposed EU Directive on Temporary Agency Work. Copies of the RIA are in the Libraries of the House.
  296W
  The strategy, including baseline indicators, is being developed in consultation with the Equality Commission and voluntary and community sector groups.

  Parades Commission
  Lady Hermon
  To ask the Secretary of State for Northern Ireland if he will make a statement on the Quigley Report into the Parades Commission. [81627]

  Jane Kennedy
  Sir George Quigley's Report into the Parades Commission was issued for consultation on 7 November 2002. The consultation period will last until the end of January next year and the Secretary of State is keen to get a broad cross-section of opinion.

  Nurses
  Sandra Osborne
  To ask the Secretary of State for Northern Ireland how many nurses were employed in Northern Ireland in 1997; and how many now are employed. [81628]

  Mr. Browne
  Figures for nurses employed in September 1997 and September 2002, along with the corresponding increase in numbers, are given in the following table:

  To estimate the number of temporary agency workers, the number reported in the BMG survey was adjusted to reflect the rate of growth in the sector as reported by the Labour Force Survey. We estimated the number of agency workers to be 700,000, around 2.5 per cent. of total employment.

  The DTI has not conducted any research as to the possible impact of the EU Directive on Temporary Agency Work in other EU countries.

  Arms Exports (India)
  Mr. Menzies Campbell
  To ask the Secretary of State for Trade and Industry what shipments of military aircraft components to India were granted export licences in(a) 2000, (b) 2001 and (c) 2002; and what end-user agreements were reached with the Indian Government in relation to them. [81726]

  Nigel Griffiths
  The export of military aircraft components is controlled under entries ML2, ML5, ML10, ML11, ML16, ML17, ML21, ML22 and PL5017 in Part III of Schedule 1 of the Export of Goods (Control) Order 1994 as amended.
  297W
  It would entail disproportionate cost to carry out a search of all export licences issued in 2000, 2001 and 2002 with the above ratings, to establish which covered the proposed export of components for military aircraft, where the end users were in India.

  Details of all export licences issued are published by destination in the Government's annual reports on Strategic Export Controls. Copies of the 2000 and 2001 annual reports are available in the Libraries of the House.

  The granting of a licence does not necessarily translate into an actual export.

  In almost all cases an application for a standard individual export licence, for the proposed permanent export of items controlled for strategic reasons, must be accompanied by an end user undertaking which is consistent with the model format published on the Department of Trade and Industry's Export Control Organisation website. The website address is www.dti.gov.uk/export.control.

  Combined Heat and Power
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry how much electricity was generated from combined heat and power in each year since 1990. [82792]

  Mr. Wilson
  The available information is shown in the following table.

  TWh

  1991

  11.0

  1993

  14.2

  1994

  12.2

  1995

  14.8

  1996

  16.1

  1997

  16.8

  1998

  18.7

  1999

  20.2

  2000

  26.8

  Declared net plant capacity

  MW

  Conventional steam stations Major power producers

  End year1

  Nuclear sources

  Renewable sources

  Combined cycle gas turbine stations

  Total conventional steam

  Coal fired

  Oil fired

  Mixed or dual fired

  Other generators

  Combined Heat and Power2

  1990

  10,373

  1,235

  76

  55,712

  34,583

  12,487

  5,434

  3,208

  —

  1991

  10,373

  1,573

  76

  54,644

  34,298

  11,895

  5,172

  3,279

  2,312

  1992

  10,373

  1,645

  331

  51,520

  32,686

  10,817

  4,806

  3,211

  —

  1993

  10,373

  1,743

  1,279

  47,897

  30,523

  8,556

  5,781

  3,037

  2,893

  1994

  11,274

  1,795

  5,613

  44,239

  29,132

  6,317

  5,694

  3,096

  3,141

  1995

  11,649

  1,831

  8,517

  41,710

  27,774

  5,145

  5,534

  3,257

  3,390

  1996

  12,916

  1,962

  12,660

  41,459

  25,796

  3,989

  8,445

  3,229

  3,301

  1997

  12,946

  2,040

  13,009

  40,635

  25,796

  4,069

  7,530

  3,240

  3,388

  1998

  12,956

  2,171

  15,640

  38,332

  25,324

  2,829

  6,928

  3,251

  3,680

  1999

  12,956

  2,273

  17,351

  38,744

  25,581

  2,829

  7,017

  3,317

  3,919

  2000

  12,486

  2,449

  21,138

  38,149

  24,835

  2,933

  6,872

  3,509

  4,763

  2001

  12,486

  2,519

  22,293

  38,144

  24,835

  2,933

  6,872

  3,504

  4,801

  1 Before 1997 figures relate to end March.

  2 Prior to 1993 CHP data were not collected annually.

  298W

  TWh

  2001

  22.2

  Note:

  Before 1993 CHP data were not collected annually.

  Source:

  Department of Trade and Industry

  Dounreay
  Mr. Peter Duncan
  To ask the Secretary of State for Trade and Industry what the value is of the contracts awarded in decommissioning Dounreay Nuclear Reprocessing Plant during each of the past five years to companies with their registered office in(a) the Highlands and Islands region, (b) Scotland and (c) UK. [80142]

  Mr. Wilson
  I understand from UKAEA that this information is only available from 1998–99.

  Value of contracts awarded in decommissioning Dounreay

  £million

  Registered office of company

  1998–99

  2000–01

  2001–02

  Highlands and Islands

  32

  35

  36

  Scotland (including Highlands and Islands)

  37

  41

  44

  UK (including whole of Scotland)

  61

  77

  89

  Electricity Generation
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry (1) what the total installed capacity of(a) renewable energy generation, (b) generation from each fossil fuel type, and (c) combined heat and power generation in the UK has been in each year since 1990; [82794]

  (2) what the total installed capacity of nuclear generators in the UK was in each year since 1990. [82799]

  Mr. Wilson
  The available information is shown in the following table and covers declared net capacities.
  299W
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what proportion of electricity generated in the UK was generated from(a) combined heat and power, (b) each fossil fuel type, (c) renewable sources and (d) UK-based renewable sources in each year since 1990. [82797]

  Proportion (percentage) generated from

  Fossil Fuels

  Total electricity generated (TWh)

  Combined heat and power1

  Coal

  Oil

  Gas

  Other2

  Renewable sources

  1995

  337.3

  4.4

  46.4

  3.7

  19.1

  1.4

  2.2

  1996

  350.9

  4.6

  41.4

  4.3

  24.0

  1.2

  1.7

  1997

  350.7

  4.8

  34.1

  2.5

  31.6

  1.2

  2.1

  1998

  362.7

  5.2

  33.9

  2.0

  32.5

  1.2

  2.5

  1999

  368.2

  5.5

  28.8

  1.8

  38.8

  1.2

  2.8

  2000

  377.3

  7.1

  31.8

  1.7

  39.3

  1.2

  2.8

  2001

  385.8

  5.8

  34.1

  1.3

  37.0

  1.1

  2.6

  1 The fossil fuels and renewables percentages include the use of these fuels in CHP plants.

  2 Other sources include coke oven gas, blast furnace gas and waste products from chemical processes.

  Source:

  Department of Trade and Industry

  At the moment, all renewables used for UK generation are UK based renewable sources. Most of the electricity imported into the UK is from French nuclear sources but in 2001 1.7 TWh was certified as being from renewable sources.

  Energy Sector (Government Support)
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry how much Government financial support was given to the nuclear industry in each year since 1990, broken down by(a) research grants, (b) transfer of debt from privatised utilities, (c) non-fossil fuel levy, (d) investment in BNFL facilities, (e) running costs of UKAEA and NIREX and (f) other sources. [82801]

  Mr. Wilson
  I refer the Honourable Gentlemen to the answer I gave on 14 November 2001,Official Report, column 757W.

  Figures for the United Kingdom Atomic Energy Authority for the period FY 01/02 are as follows:

  £ million

  Year

  Grant and grant in aid

  Fusion

  Other nuclear

  2001–02

  253.2

  14.3

  0.2

  Female Workers
  Stephen Hesford
  To ask the Secretary of State for Trade and Industry what she is doing to encourage regional development agencies to improve women's participation in the labour market. [83431]

  Alan Johnson
  RDAs are required to take an integrated and sustainable approach to the economic
  300W
  Mr. Wilson
  The available information is shown in the table. Prior to 1995, figures were not compiled on a "fuel used" basis but by type of station.

  development of their regions, tackling competitiveness and productivity issues and also the underlying problems, including inequalities.

  All RDAs have led the development of Frameworks for Regional Employment and Skills Action (FRESAs). These bring together key regional and local bodies to produce a shared analysis of the region's labour market, and an action plan for meeting the region's skills and employment needs and for giving individuals the opportunity and skills to find and progress in employment. The FRESAs enable regional partners together to identify and address key issues for the regional labour market and agree partners who will take responsibility for equal opportunity, including increasing female participation rates where necessary.

  We are also working with the RDAs and interested Government Departments to identify and develop a role for the RDAs in encouraging and co-ordinating provision of childcare in their regions.

  Fireworks
  Mr. Doug Henderson
  To ask the Secretary of State for Trade and Industry what new measures her Department proposes to introduce in respect of fireworks. [80895]

  Miss Melanie Johnson
  I would refer my hon. Friend to the answer I gave to my hon. Friend the Member for Preston on 17 October 2002,Official Report columns 889–90, announcing a package of measures to address problems caused by fireworks.

  Foreign Direct Investment
  Keith Vaz
  To ask the Secretary of State for Trade and Industry what measures are being taken to increase foreign direct investment to the UK. [83662]
  301W
  Nigel Griffiths
  Invest-UK in London and overseas promotes the UK as the top inward investment location in Europe and works in partnership with all of the UK's Development Agencies to attract the maximum level of inward investment.

  In the first three weeks of November Invest-UK has spearheaded initiatives at several events to promote the UK overseas, including:

  UK(5)IT Bangalore—28 October to 1 November

  Israel Telecoms Exhibition 2002—4 to 7 November

  BioScandinavia in Copenhagen to promote the UK as the place for R&D—14 November

  UK@Comdex, Las Vegas—15 to 22 November.

  Investment conditions are challenging but Invest-UK helped with 123 successes in the first half of 2002, slightly more than in the first half of 2001. In order to boost our effort, we are taking on further staff and improving our client presentations and communication systems.

  Fossil Fuels
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry how much electricity was generated from fossil fuel sources in the UK in each year since 1990, broken down by fossil fuel type. [82793]

  Mr. Wilson
  The available information is shown in the following table. Prior to 1995, figures were not compiled on a "fuel used" basis but by type of station.

  Electricity generated from fossil fuels

  TWh

  Coal

  Oil

  Gas

  Other1

  1995

  156.4

  12.6

  64.3

  4.6

  1996

  145.2

  15.0

  84.1

  4.3

  1997

  119.7

  8.7

  111.0

  4.2

  1998

  123.0

  7.4

  117.8

  4.2

  1999

  106.2

  6.5

  142.9

  4.3

  2000

  120.0

  6.5

  148.2

  4.4

  2001

  131.5

  5.2

  142.6

  4.1

  1 Other sources include coke oven gas, blast furnace gas and waste products from chemical processes

  Source:

  Department of Trade and Industry

  Hawk Aircraft
  Norman Lamb
  To ask the Secretary of State for Trade and Industry, pursuant to her answer of 20 November 2002, Ref 81322,Official Report column 151W, whether an export licence was granted in respect of spare parts for Hawk aircraft for export to a country other than Zimbabwe, which have subsequently been exported to Zimbabwe. [83035]

  Nigel Griffiths
  Since the introduction of the UK arms embargo on 12 May 2000, no Standard Individual Export Licences or Open Individual Export Licences have been issued, which would authorise the export of spare parts for Hawk aircraft to Zimbabwe.

  The Government rigorously assess all export licence applications to determine the risk of the proposed export being misused, diverted or re-exported under undesirable conditions in contravention of the consolidated EU and national arms export licensing criteria.
  302W

  Industrial Disputes
  Mr. Borrow
  To ask the Secretary of State for Trade and Industry how many industrial disputes lasted for longer than eight weeks in the most recently available figures. [83538]

  Alan Johnson
  Detailed information is not collected on the duration of industrial disputes, only the number of days lost to strike action. However, from the data available it is estimated that in the period January to September 2002, 12 industrial disputes (around 1 in 10 of all disputes) lasted more than eight weeks (counted from the first day of industrial action onwards).

  Inward Investment
  Lynne Jones
  To ask the Secretary of State for Trade and Industry what estimates she has made of the level of inward investment into(a) Birmingham, (b) the West Midlands region and (c) the London region in the period 1998 to 2002. [82867]

  Alan Johnson
  The figures in the table are based on information provided by companies at the time of the announcement of the decision to invest in the UK. There is no requirement to notify Invest-UK of such decisions to invest, and so these figures include only those projects where Invest-UK and its regional partners were involved or which have come to their notice.

  Invest-UK does not hold inward investment data relating to sub-regional level. However, the number of inward investment projects successes recorded in London and the West Midlands regions during the financial years 1998–2002 are as follows:

  Region

  1998–99

  1999–2000

  2000–01

  2001–02

  West Midlands

  72

  99

  103

  98

  London

  105

  159

  227

  215

  Office of Fair Trading
  Keith Vaz
  To ask the Secretary of State for Trade and Industry when she last met the Director-General of the Office of Fair Trading. [83667]

  Miss Melanie Johnson
  My right hon. Friend last met the Director-General of the Office of Fair Trading in November 2001 and the next meeting is arranged for December.

  In addition, I have regular meetings with the Director-General of the Office of Fair Trading, as do DTI officials.

  Nuclear Energy
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry how much electricity was generated from nuclear generators in the UK, and what proportion of all electricity used in the UK was generated from(a) nuclear generation and (b) UK-based nuclear generation, in each year since 1990. [82800]
  303W
  Mr. Wilson
  The available information is shown in the following table and covers electricity supplied from nuclear sources.

  Percentage of UK electricity supplied from

  Electricity supplied from UK based nuclear generators

  UK based nuclear generators

  Imports1

  1990

  58.7

  19.0

  3.8

  1991

  62.8

  19.8

  5.2

  1992

  69.1

  21.9

  5.3

  1993

  81.0

  25.4

  5.2

  1994

  80.0

  24.7

  5.2

  1995

  80.6

  24.1

  4.9

  1996

  85.8

  24.6

  4.8

  1997

  89.3

  25.7

  4.8

  1998

  90.6

  25.5

  3.5

  1999

  87.7

  24.2

  4.0

  Electricity generated from renewable sources

  GWh

  Hydro

  Biofuels and wastes

  Wind and wave

  Solar photo-voltaics

  Small scale

  Large scale

  Landfill gas

  Sewage sludge digestion

  Municipal solid waste combustion

  Other biofuels

  Wastes

  Total biofuels and wastes

  Total

  1990

  9

  —

  127

  5,080

  139

  316

  140

  —

  83

  678

  5,894

  1991

  9

  —

  142

  4,482

  208

  328

  151

  1

  88

  776

  5,409

  1992

  33

  —

  149

  5,282

  377

  328

  177

  52

  104

  1,038

  6,502

  1993

  217

  —

  159

  4,143

  447

  378

  251

  122

  165

  1,363

  5,883

  1994

  344

  —

  159

  4,935

  517

  361

  449

  192

  352

  1,870

  7,307

  1995

  392

  —

  166

  4,672

  562

  410

  471

  199

  412

  2,053

  7,283

  1996

  488

  —

  118

  3,275

  708

  410

  490

  197

  417

  2,221

  6,101

  1997

  667

  —

  164

  4,005

  918

  408

  585

  199

  483

  2,593

  7,428

  1998

  877

  —

  206

  4,911

  1,185

  386

  849

  234

  583

  3,237

  9,231

  1999

  850

  1

  207

  5,128

  1,703

  410

  856

  460

  558

  3,987

  10,174

  2000

  947

  1

  214

  4,871

  2,188

  367

  862

  473

  532

  4,422

  10,454

  2001

  967

  2

  210

  3,845

  2,507

  363

  948

  770

  488

  5,076

  10,099

  Source:

  Department of Trade and Industry

  Temporary Workers
  Mr. Jenkins
  To ask the Secretary of State for Trade and Industry what her Department's policy is on the proposed six weeks qualifying period for temporary workers to have the same rights as permanent workers, as part of the proposed EU Directive on Temporary Agency Work. [82950]

  Alan Johnson
  The Department of Trade and Industry supports the principle of a qualifying period before temporary agency workers have the same rights as permanent staff but believe the period should be much longer than 6 weeks. We have proposed 12 months.

  Turkey
  Keith Vaz
  To ask the Secretary of State for Trade and Industry what the level of bilateral trade with Turkey was in 2001–02. [83697]

  Nigel Griffiths
  The information is in the following table.

  UK trade with Turkey: current prices, balance of payments basis

  £ million

  UK exports

  UK imports

  Total trade

  Trade in goods and services 2001

  1,519

  2,193

  3,712

  January to September 2002

  n/a

  n/a

  n/a

  304W

  Percentage of UK electricity supplied from

  Electricity supplied from UK based nuclear generators

  UK based nuclear generators

  Imports1

  2000

  78.3

  21.1

  3.8

  2001

  83.0

  22.1

  2.3

  1 It is assumed that all electricity imported from France is from nuclear sources, except in 2001 when 1.7 TWh was certified as being from renewable sources.

  Renewable Energy
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry how much electricity was generated from renewable sources in the UK in each year since 1990. [82796]

  Mr. Wilson
  The available information is shown in the table.

  UK trade with Turkey: current prices, balance of payments basis

  £ million

  UK exports

  UK imports

  Total trade

  Trade in goods

  2001

  1,179

  1,692

  2,871

  January to September 2002

  938

  1,523

  2,461

  Trade in services

  2001

  340

  501

  841

  January to September 2002

  n/a

  n/a

  n/a

  Note:

  Figures for trade in services are only available on an annual basis.

  Source:

  Monthly Review of External Trade Statistics (MRETS), ONS United Kingdom Balance of Payments (The Pink Book), ONS

  Vehicle Recycling and Disposal
  Dr. Vincent Cable
  To ask the Secretary of State for Trade and Industry what percentage of scrap cars were valorised in 2001; if she estimates that the Automotive Consortium on Recycling and Disposal is on schedule to valorise 95 per cent. of all scrap cars by 2015; and if she will make a statement. [83648]

  Mr. Wilson
  The ACORD industry group report for 2001 estimated that 80 per cent. of the weight of vehicles scrapped in the year 2000 was re-used or recovered. The End-of-Life Vehicles Directive (2000/53/EC) requires
  305W
  member states to re-use or recover 95 per cent. by the beginning of 2015. The Government is presently considering the design of a system which will achieve that target. Draft regulations will be published early in 2003. Their final form will depend upon member states agreeing a common method for calculating ELV recovery rates, yet to be proposed by the European Commission.

EDUCATION AND SKILLS

  Drugs
  John Mann
  To ask the Secretary of State for Education and Skills what steps his Department is taking to ensure the provision of a minimum standard of drugs education in secondary schools. [82934]

  Mr. Stephen Twigg
  We are determined to ensure that the quality of drug education provision in all schools is of high quality. Funding is made available through the standards fund (£15.5 million in 2002–03) to all local education authorities to facilitate this. It will help schools deliver drug education programmes tailor made to the needs of young people, train teachers, and fund school drug adviser posts to work directly with schools to address gaps in the quality of drug education and help ensure drug education and incident management polices are in line with DfES guidance.

  There are a number of other measures in place to drive up the quality of drug education including the drug, alcohol and tobacco education package to improve teaching and learning and classroom practice and QCA curriculum materials which provide exemplar teaching and learning activities for key stages 1–4.

  The latest Office for Standards in Education (Ofsted) survey of drug education published in November 2002 indicated that at key stages 3 and 4 the quality of teaching about drugs is at least adequate in all but a few lessons and good or better in 40 per cent. of lessons. We will be working with Ofsted to strengthen current arrangements for inspecting drug education. This might include specific training for Ofsted inspectors.

  Stephen Hesford
  To ask the Secretary of State for Education and Skills what percentage of additional post-threshold pay progression for teachers will be met by additional central Government funding; and whether this extra money will recur in future financial years. [83430]

  Mr. Miliband
  Movement to point two of the upper pay scale for post-threshold teachers is by performance points awarded on a discretionary basis by school governors. The Department is contributing £90 million to fund progression on the upper pay scale for teachers. The percentage of awards that the £90 million will fully fund depends on the number of discretionary points that governing bodies decide to award.

  Schools are also able to use their general budgets to fund moving teachers to point two should they wish to do so. Schools have benefited from a £1.3 billion increase in education standard spending assessments this financial year.
  306W
  The exact mechanisms for future funding have yet to be finalised. However, we have already said that funding for post-threshold and leadership performance points next year will not be less than the £150 million already announced.

  Adult Learning
  Dr. Francis
  To ask the Secretary of State for Education and Skills what progress he has made towards the targets for adult learning announced in March 1999 as part of the national learning targets for 2002 [82889]

  Mr. Miliband
  On November 13 this year, we announced that the National learning target for adult participation had been met. The announcement was made on the occasion of the publication of the Annual Local Area Labour Force Survey (ALALFS)2001–02.

  In 1999, the government set a target of increasing adult participation in learning (as measured by the National Audit Learning Survey (NALS) from 74 per cent. in 1997 to 76 per cent. in 2002.

  The NALS 2002 survey found that 76.4 per cent. of adults had taken part in learning activities recognised by NALS over the last three years. Thus the target has been met; and it is confirmed by this year's Annual Local Area Labour Force Survey. The target applies to adults living in England aged 16–69 outside continuous full-time education.

  The following table summarises the findings from recent surveys of learning which used the NALS definition. The same questions were asked in the NAL did not accept proxy interviews and had a lower response rate.

  Survey name

  Date of fieldwork

  Learning participation Per cent

  NALS 2002

  January 2002-June 2002

  76.4

  ELLFS 2001

  March 2001-February 2002

  76.0

  NALS 2001

  January 2001-May 2001

  75.6

  ELLFS 2000

  March 2000-February 2001

  74.2

  NALS 1997

  March 1997-April 1997

  73.8

  Arson
  Paul Holmes
  To ask the Secretary of State for Education and Skills how many incidents of arson there were in, and what the cost of the damage was to(i) state primary schools, (ii) state secondary schools, (iii) all state schools, (iv) further education colleges and (v) higher education institutions, in each county in each year since 1992. [83137]

  Mr. Miliband
  The Department does not collect these figures.

  Class Sizes
  Mr. Willis
  To ask the Secretary of State for Education and Skills which local education authorities have classes of more than 30 pupils for five, six or seven-year-olds. [81084]
  307W
  Mr. Miliband
  [holding answer 18 November 2002]: The information requested is shown in the following table.

  Local education authorities with classes of 30 or more pupils—January 2002

  Total all classes

  Of which: number of classes with more than 30 pupils1

  Barnsley

  278

  4

  Bedfordshire

  531

  7

  Birmingham

  1,341

  7

  Bolton

  354

  2

  Bracknell Forest

  124

  1

  Bradford

  627

  9

  Brent

  291

  1

  Buckinghamshire

  606

  7

  Bury

  245

  3

  Cambridgeshire

  660

  11

  Camden

  130

  1

  Cheshire

  863

  9

  Cornwall

  526

  5

  Coventry

  398

  1

  Croydon

  384

  1

  Darlington

  128

  1

  Derbyshire

  964

  14

  Doncaster

  405

  4

  Dorset

  462

  1

  Dudley

  389

  2

  East Riding of Yorkshire

  391

  5

  East Sussex

  521

  2

  Enfield

  344

  1

  Essex

  1,622

  25

  Gateshead

  234

  1

  Gloucestershire

  665

  1

  Greenwich

  272

  1

  Hackney

  209

  4

  Hammersmith and Fulham

  107

  1

  Hampshire

  1,543

  7

  Haringey

  266

  1

  Havering

  294

  2

  Herefordshire

  222

  2

  Hertfordshire

  1,285

  9

  Hillingdon

  329

  4

  Hounslow

  252

  1

  Islington

  189

  4

  Kensington and Chelsea

  85

  2

  Kent

  1,707

  4

  Kingston upon Thames

  151

  1

  Knowsley

  245

  1

  Lancashire

  1,456

  4

  Leeds

  889

  4

  Leicester

  386

  3

  Leicestershire

  811

  9

  Lewisham

  291

  2

  Liverpool

  595

  5

  Luton

  257

  2

  Manchester

  566

  1

  Milton Keynes

  283

  8

  Newcastle upon Tyne

  293

  1

  Norfolk

  979

  3

  North East Lincolnshire

  213

  6

  North Lincolnshire

  189

  1

  North Yorkshire

  768

  5

  Northamptonshire

  914

  3

  Northumberland

  367

  11

  Oldham

  319

  2

  Peterborough

  232

  3

  Reading

  134

  1

  Redbridge

  288

  2

  Redcar and Cleveland

  199

  1

  Richmond upon Thames

  177

  1

  Rotherham

  354

  2

  Salford

  294

  1

  308W

  Local education authorities with classes of 30 or more pupils—January 2002

  Total all classes

  Of which: number of classes with more than 30 pupils1

  Sandwell

  403

  1

  Sheffield

  605

  3

  Shropshire

  322

  1

  Solihull

  292

  1

  Somerset

  603

  2

  South Gloucestershire

  354

  1

  Southampton

  254

  1

  Southwark

  340

  2

  Staffordshire

  1,122

  8

  Stockport

  354

  1

  Stockton-on-Tees

  260

  2

  Stoke-on-Trent

  311

  2

  Surrey

  1,177

  4

  Sutton

  174

  1

  Swindon

  255

  4

  Telford and Wrekin

  217

  1

  Tower Hamlets

  231

  2

  Trafford

  269

  1

  Wakefield

  392

  7

  Wandsworth

  216

  1

  Warrington

  278

  3

  Warwickshire

  624

  6

  West Berkshire

  173

  2

  West Sussex

  881

  5

  Westminster

  103

  1

  Wiltshire

  551

  6

  Windsor and Maidenhead

  127

  1

  Wirral

  455

  2

  Wolverhampton

  321

  2

  Total

  43,557

  325

  1 About 70 per cent. of these classes included pupils that were admitted as "excepted" pupils under the Education (Infant Class Size) Regulations 1998. Exceptions include classes with pupils admitted outside the normal admission round, after an admission appeal or because of a statement of Special Educational Needs. Also, classes where pupils are temporarily present from a special unit and classes for other teaching sessions such as games, music or drama.

  Source:

  Annual Schools' Census

  Infant class size information for September 2002 was published on 20 November 2002 in the statistical first release entitled, "Infant Class Sizes in England: September 2002". This showed that nationally there were 307 classes of more than 30 pupils of which 288 were recorded as acceptable under the Education (Infant Class Sizes) Regulations 1998. These September figures are not directly comparable with those in January, because of seasonal effects such as pupils entering school in January. Corresponding local education authority level figures are not yet available but will be published in due course on the DfES statistical website www.dfes.gov.uk/statistics

  Education Review Body
  Mr. Watts
  To ask the Secretary of State for Education and Skills if he will set up a review body to look at under-achievement and deprivation, and the funding system for education. [82429]

  Mr. Miliband
  The Education Funding Strategy Group (EFSG) and its technical sub group was set up in February 2001, to oversee the production of proposals for a new LEA funding system, building on the proposals in the September 2000 Local Government
  309W
  Finance Green Paper. The group considered papers on underachievement and deprivation at a number of their meetings. Its report was published in May 2002, and copies have already been placed in the Library of the House.

  Education Spending
  Mrs. Dean
  To ask the Secretary of State for Education and Skills what the(a) average spending per pupil and (b) pupil teacher ratios are in (i) primary and (ii) secondary schools in (A) Staffordshire and (B) England in 2001–02. [80595]

  Mr. Miliband
  The following tables contain information from 2000–01, the latest year for which data are available:

  NIE per pupil: 2000–01

  £

  Primary

  Secondary

  Staffordshire

  2,060

  2,620

  England

  2,210

  2,830

  Pupil teacher ratios: 2000–01

  £

  Primary

  Secondary

  Staffordshire

  23.7

  17.6

  England

  22.9

  17.1

  We do not yet have information on spending in 2001–02.

  Mrs. Dean
  To ask the Secretary of State for Education and Skills what the average spending per pupil is in(a) primary and (b) secondary schools in (i) each shire education authority area in England and (ii) England. [80596]

  Mr. Miliband
  The following table provides the latest available information:

  LEA

  Primary

  NIE per pupil Secondary

  Bedfordshire

  2,280

  2,590

  Buckinghamshire

  1,820

  2,480

  Cambridgeshire

  2,040

  2,650

  Cheshire

  1,920

  2,220

  Cornwall

  2,100

  2,590

  Cumbria

  2,240

  2,820

  Derbyshire

  2,010

  2,570

  Devon

  2,040

  2,650

  Dorset

  2,180

  2,690

  Durham

  2,300

  2,780

  East Sussex

  2,120

  2,760

  Essex

  2,270

  2,860

  Gloucestershire

  2,220

  2,560

  Hampshire

  2,150

  2,670

  Hertfordshire

  2,150

  2,790

  Kent

  2,250

  2,790

  Lancashire

  2,180

  2,800

  Leicestershire

  2,080

  2,710

  Lincolnshire

  2,010

  2,630

  Norfolk

  2,010

  2,580

  North Yorkshire

  2,110

  2,750

  Northamptonshire

  2,220

  2,800

  Northumberland

  2,180

  2,490

  310W

  LEA

  Primary

  NIE per pupil Secondary

  Nottinghamshire

  2,200

  2,730

  Oxfordshire

  2,230

  2,750

  Shropshire

  1,990

  2,630

  Somerset

  2,160

  2,710

  Staffordshire

  2,060

  2,620

  Suffolk

  2,230

  2,630

  Surrey

  2,210

  2,710

  Warwickshire

  1,980

  2,620

  West Sussex

  2,210

  2,770

  Wiltshire

  1,940

  2,480

  Worcestershire

  2,090

  2,530

  England

  2,210

  2,830

  Notes:

  1. All figures are provided on a cash basis and rounded to the nearest £10.

  2. NIE is the net institutional expenditure, which is the money spent within schools. It does not include central LEA expenditure.

  Source:

  1. Financial data are drawn from local education authorities section 52 financial statements (outturn) relating to the 2000–01 financial year.

  2. Pupil data are derived from the Annual Schools Census adjusted to a financial year basis.

  Educational Attainment
  Mr. Redwood
  To ask the Secretary of State for Education and Skills what percentages of 15-year-olds were low-achieving in(a) reading, (b) mathematical and (c) scientific literacy in England in the last year for which figures are available. [83198]

  Mr. Miliband
  [holding answer 25 November 2002]: The nearest equivalent information, relating to the percentage of 14-year-olds at or below level 3 in the Key Stage 3 tests in 2002 is given in the table.

  Percentage at or below level 3 Key Stage 3, 2002

  Subject

  English

  10

  Mathematics

  11

  Science

  9

  Funding (Cheshire)
  Mr. Stephen O'Brien
  To ask the Secretary of State for Education and Skills what was the level of central funding from his Department to(a) Cheshire county council, (b) Chester city council, (c) Vale Royal borough council and (d) Crewe and Nantwich borough council in each of the last five years; and what the average funding of county, city and borough councils in England was in those years. [81262]

  Mr. Miliband
  No departmental funding has been made to Chester city council, Vale Royal borough council, or Crewe and Nantwich borough council. The table shows the Department's total recurrent and capital funding for the financial years 1997–98 to 2001–02 to Cheshire Local Education Authority.

  £

  Recurrent funding1

  Capital funding2

  1997–98

  16,006,000

  8,373,000

  1998–99

  7,906,000

  9,784,000

  1999–2000

  7,878,000

  15,337,000

  311W

  £

  Recurrent funding1

  Capital funding2

  2000–01

  25,115,000

  27,812,000

  2001–02

  35,664,000

  34,124,000

  1 Funding comprised of Standards Fund Grant (departmental contribution), School Standards Grant, School Budget Support Grant, Education Budget Support Grant, Teachers Pay Reform Grant, Nursery Education Grant, Childcare Grant, Education Action Zone Grant and Grant Maintained Transitional Funding Grant. Reductions in 1998–99 and 1999–2000 are due to local government reorganisation and the transfer of Nursery Education Grant for four year-olds to Education Standard Spending.

  2 Funding includes Basic Need (ACG), Standards Fund Grant (departmental contribution), Voluntary Aided School Grant, Schools Access Initiative and New Deal for Schools.

  Note:

  Figures are rounded to the nearest £1,000.

  The Department provides support to each local authority in England which is a local education authority, including all county councils. The main determinant of each local education authority's level of funding is the number of pupils it educates.

  House Prices (Windsor, Maidenhead and Wokingham)
  Mrs. May
  To ask the Secretary of State for Education and Skills what assessment he has made of the impact on house prices in(a) The Royal borough of Windsor and Maidenhead and (b) Wokingham district following the statement made by the Deputy Prime Minister on 18 July, Official Report column 438; and what changes he expects to make to teacher funding levels in the area. [81760]

  Mr. Miliband
  My right hon. Friend has made no assessment of the impact of the effect on house prices following the statement made by the Deputy Prime Minister on 18 July, and will not be making any changes to funding levels in the area as a result.

  Intervention
  Mr. Andrew Turner
  To ask the Secretary of State for Education and Skills what reviews have been undertaken of the effectiveness of different methods of intervention in failing local government authorities; and what proposals he has to undertake further reviews. [81956]

  Mr. Miliband
  Ofsted reinspection reports on 27 LEAs previously found to be failing have so far shown that 26 had improved, with 21 now satisfactory.

  The Audit Commission, in their report, "A force for change central government intervention in failing local government services", which examined interventions in education and social services, found that "effective interventions work by tackling the fundamental causes of service failure: poor political and managerial leadership and poor systems and culture". In addition, in an NOP survey of local councils that had been subject to intervention, 72 per cent. of respondents thought that their councils had made substantial progress, while 75 per cent. said they had found intervention "fairly" or "very" helpful.
  312W
  The Department has commissioned independent consultants to evaluate new organisational models in local education authorities, including those resulting from intervention. The consultants will report on organisational robustness, performance, value for money and sustainability, as well as identifying the local circumstances under which it would be appropriate to adopt one model rather than another. They will also advise on a process whereby the different models can be further evaluated in two years' time. The consultants' report and guidance will be published by March 2003.

  Non-teaching Staff
  Mr. Redwood
  To ask the Secretary of State for Education and Skills what the ratio is of non-teaching staff employed by local education authorities, his Department and educational quangos to the numbers of teachers teaching in state schools. [81261]

  Mr. Miliband
  The requested information is not collated centrally.

  Pupil Exclusions
  Mr. Paul Marsden
  To ask the Secretary of State for Education and Skills if he will make a statement on the support available to children with mental health problems excluded from school. [82745]

  Mr. Stephen Twigg
  In November 2001 the Government published statutory guidance, "Access to education for children and young people with medical needs", which covers mental health as well as other medical needs. And in June 2001 the Department also published jointly with the Department of Health guidance on "Promoting Children's Mental Health within Early Years and School Settings". The guidance is designed to help teachers and others working alongside mental health professionals, to promote children's mental health and to intervene effectively with those children experiencing problems. Children and Adolescent Mental Health Services (CAHMS) are available to offer a range of professional support and help for individual children, their families and schools. They can provide early identification of problems, assessment, specialist advice, outreach work and treatment. We have implemented a robust policy to ensure that all pupils permanently excluded from schools receive a suitable full-time education. All pupils should continue to have access to as much education as their mental health condition allows so that they are able to maintain the momentum of their education and keep up with their studies.

  School Buildings
  John Mann
  To ask the Secretary of State for Education and Skills what the level of capital investment in school buildings in coalfield areas was in each year since 1997; and how this compares with the national average. [82252]

  Mr. Miliband
  We do not have this information. The Department currently allocates most capital funding for schools to local education authorities (LEAs), based on needs-related formulae, and it is for the authorities to assess and prioritise the capital needs of their school buildings in line with their local asset management
  313W
  plans. Individual LEAs will, therefore, hold information on how much capital investment has been allocated to schools within coalfield areas.

  The table shows the level of central Government support for capital investment in school buildings in England for each financial year from 1996–97 to 2003–04.

  £ billion

  Year

  Capital allocation

  1996–97

  0.7

  1997–98

  0.8

  1998–99

  1.1

  1999–2000

  1.4

  2000–01

  2.1

  2001–02

  2.2

  2002–03

  3.0

  2003–04

  3.8

  Total

  15.1

  School Places (Sittingbourne and Sheppey)
  Mr. Wyatt
  To ask the Secretary of State for Education and Skills (1) how many pupils and students in Sittingbourne and Sheppey do not have places in schools; and if he will make a statement; [82111]

  (2) how many schools in Sittingbourne and Sheppey have refused access to children on grounds of the health and safety legislation since the beginning of the school year. [82112]

  Mr. Miliband
  [holding answer 21 November 2002]: The Department does not collect this information. LEAs have a statutory duty to ensure that sufficient school places are available for pupils of compulsory school age and it is for them to monitor local needs and plan provision accordingly. LEAs in general, or boards of governors in foundation schools, have a statutory duty under health and safety legislation to take all reasonably practicable steps to ensure the health and safety of pupils and staff.

  School Playing Fields
  Mr. Greenway
  To ask the Secretary of State for Education and Skills (1) how many school playing fields have been(a) leased and (b) sold under the Private Finance Initiative, broken down by education authority; [82361]

  (2) how many applications (a) to sell and (b) to change the use of school playing fields have fallen under the General Consent Orders of Section 77 (5) of the School Standards and Framework Act 1998 in (i) 1999–2000, (ii) 2000–01 and (iii) 2001–02; who determines whether an application falls under the Orders, and what checks his Department carries out on such applications; [82362]

  (3) how many applications were made to dispose of school playing fields larger than 2,000 metres square in (a) 1999–2000, (b) 2000–01 and (c) 2001–02. [82363]

  Mr. Miliband
  The information requested has been placed in the Lbraries.

  School Standards Grant
  Mr. Brady
  To ask the Secretary of State for Education and Skills pursuant to his answer of 18 November,Official Report, column 310, on school standards grant, what adjustments have been made to the amount of standards fund grant payable to each local education authority as a result of changes in the number of pupils in schools within each LEA area. [82719]

  Mr. Miliband
  The information can be provided only at disproportionate cost.

  Schools Funding (Buckinghamshire)
  Mrs. Gillan
  To ask the Secretary of State for Education and Skills what(a) the formula grant and (b) the spending per head in (i) primary and (ii) secondary schools in Buckinghamshire is in the year 2002–03. [81180]

  Mr. Miliband
  [holding answer 19 November 2002]: Funding for Buckinghamshire in 2002–03 is shown in the following table. We will not know actual spending until the autumn of 2003.

  £

  SSA

  Grants

  Total

  Primary

  2,660

  460

  3,120

  Secondary

  3,410

  330

  3,740

  Notes:

  1. Figures reflect education SSA settlement figures (primary and secondary sub-blocks respectively), plus all revenue grants in DfES's Departmental expenditure limits relevant to primary and secondary pupils (excluding EMA and a handful of others where it is not possible to get figures on a comparable basis over time).

  2. The pupil numbers used to convert £ million figures £ to per pupil are the maintained pupils und settlement calculations.

  3. Status:2002–03 grants (and hence total) figures are provisional.

  4. Price Base: cash.

  5. Rounding:figures are rounded to the nearest £10. Totals may not sum due to rounding.

  Specialist Schools Programme
  Mr. Simon Thomas
  To ask the Secretary of State for Education and Skills if he will list the engineering colleges that have been created under the Specialist Schools Programme, stating in each case the date of establishment. [82150]

  Mr. Miliband
  Four schools have been designated engineering colleges, following the first competition for the new specialism, and became operational in September 2002. They are:

  Devonport High School, Plymouth

  Eckington School, Derbyshire

  St. Benedict's Catholic High School, Cumbria

  Woodchurch High School, Wirral

  Teachers' Pay
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what provision is made in his Departmental budget for funding the upper pay scale for teachers. [82957]
  315W
  Mr. Miliband
  [holding answer 25 November 2002]: We are currently funding 185,000 full time equivalent teachers for their threshold money, which this year is 2,148. The threshold is point 1 of the upper pay scale.

  We have also allocated an extra 90 million this financial year for the costs of promoting teachers to point two of the upper pay scale. Schools are also able to use their general budgets to fund moving teachers to point two should they wish to do so.

TREASURY

  Child Tax Credit
  Martin Linton
  To ask the Chancellor of the Exchequer what estimate he has made of the percentage of families in the Battersea constituency who will benefit from the child tax credit from April. [83798]

  Dawn Primarolo
  Nine out of 10 families with children will be eligible for the child tax credit, to be introduced in April 2003.

  Estimates of the number of families with children in the Battersea constituency that will benefit from the child tax credit are not available; however, an estimated 700,000 families with children in London are expected to benefit from the child tax credit.

  CR74
  Mr. Webb
  To ask the Chancellor of the Exchequer if he will publish the results of the CR74 record management exercise. [83206]

  Dawn Primarolo
  CR74 was an Inland Revenue exercise in support of its day-to-day record management process. It involved a systematic check, over a six-month period earlier this year, of national insurance numbers held on Inland Revenue records. Updated records have been kept separate and the Department has introduced better processes to help ensure that its records stay up to date.

  CR74 identified about 3.5 million records as no longer needed. The exercise also identified around 1.3 million records as requiring further checking, and the Inland Revenue will be working through them over the next few months.

  Landfill Tax Credit
  Norman Baker
  To ask Mr. Chancellor of the Exchequer how much has been spent on promoting the landfill tax credit scheme in each year since its inception. [82850]

  John Healey
  It is not possible to give a precise figure for each year, however from the introduction of the landfill tax credit scheme to the year 2000 Entrust, the scheme's regulator, spent £606,000 on information, communication and promotion. Under its Terms of Approval, Entrust no longer promotes the scheme. To date the scheme has received £588 million in contributions.

  National Insurance
  Mr. O'Hara
  To ask the Chancellor of the Exchequer how much was expended from national insurance contributions on(a) contributory benefits and (b) the NHS in each year since 1991–92; and what the forecasted expenditure is for each of the next 10 years. [80825]

  Dawn Primarolo
  Available estimates and outturn of benefit expenditure, 1991–92 to 2005–06, are published on the DWP website "http://www.dwp.gov.uk/asd/asd4/Table1.xls

  The amount of the NHS allocation from national insurance contributions is published in the accounts of the national insurance fund each year, copies of which are held in the House of Commons Library.

  The Government Actuary's Department's estimates for the NHS allocation from NIC receipts for 2001–02 to 2005–06 are shown in the table:

  £million

  Great Britain

  2001–02

  2002–03

  2003–04

  2004–05

  2005–06

  NHS allocation of NIC receipts

  7,240

  7,560

  15,570

  17,840

  18,780

WORK AND PENSIONS

  Adviser Discretion Fund
  Mr. Willetts
  To ask the Secretary of State for Work and Pensions what information is kept on the uses of money paid out from the Adviser Discretion Fund; and what checks are made to ensure that the money is spent on the things for which it is assigned. [81793]

  Mr. Nicholas Brown
  We have introduced the Adviser Discretion Fund to give personal advisers more flexibility in the help they can offer their New Deal clients.

  The fund has been a success. Over 61,000 of the people who have received an award have moved into work. On 18 November we announced that we will be extending access to the Adviser Discretion Fund to all incapacity benefit clients working with Jobcentre Plus advisers in areas piloting the changes recommended in the 'Pathways to Work' consultation document.

  We maintain records of: the number of awards; the monetary value of awards (case by case and in total); the type of goods and services being purchased; and the number of people who, having received an award, subsequently find work.

  Confirmation of the goods and services purchased and their cost is provided through either an invoice where the supplier is paid direct or a receipt (from the supplier) provided by the individual customer.

  Attendance Allowance
  Mr. Steve Webb
  To ask the Secretary of State for Work and Pensions if he will make a statement on the basis on which his Department collects data on the number of pensioners who had attendance allowance
  317W
  withdrawn during a stay in hospital; and how many pensioners were affected by these rules in the past three years for which figures are available. [84124]

  Maria Eagle
  The Department collects data on people in receipt of attendance allowance (and other disability and carer benefits) by means of a quarterly statistical inquiry. This allows analysis-on a sample basis-of the numbers of recipients whose awards are suspended at the date of the inquiry because they have been in hospital more than 28 days. Because periods of suspension may be completed between two quarterly inquiries or span more than one inquiry, this information does not provide a basis for calculating cumulative figures for people who have had their AA or DLA suspended after spending 28 days in hospital.

  Numbers of attendance allowance cases at 31 May of each year in the period 2000 to 2002 and numbers of cases in which payments were recorded as suspended because the recipient was in hospital

  Attendance allowance

  Total cases

  Cases with payment suspended while recipient in hospital

  2000

  1,249,600

  13,300

  2001

  1,290,000

  14,400

  2002

  1,288,200

  15,500

  Notes:

  1. Figures are rounded to the nearest hundred.

  2. Figures for suspensions refer only to cases where the reason is known.

  3. Information is collected at the end of February, May, August and November each year. Figures in the table vary from those given in the written answer on 11 July 2002, Official Report, column 1146W, which date back from November 2001.

  Source:

  Analytical Services Division Information Centre:5 per cent. data.

  Child Support Agency
  Mr. Peter Duncan
  To ask the Secretary of State for Work and Pensions when he expects to implement the new assessment procedures at the Child Support Agency for(a) existing and (b) new clients. [82571]

  Malcolm Wicks
  I refer the hon. Member to the letter sent to hon. Members on 19 September 2002 by my right hon. Friend, the Secretary of State for Work and Pensions, a copy of which was placed in the Library. The new scheme will commence for existing clients when we are satisfied that it is working well. We expect this to be about a year later.

  Civil Service Pensioners
  Mr. Randall
  To ask the Secretary of State for Work and Pensions how many people in receipt of a civil service pension started their service prior to 1949. [82047]

  Mr. Alexander
  I have been asked to reply.

  This information is not held centrally and could be obtained only at disproportionate cost. Arrangements for the extraction of information from the civil service pensioner payroll database and subsequent investigation of individual pensioner files by former employing Departments would be necessary to identify those with pre-1949 service, including those whose service was in an unestablished (ie temporary) capacity.
  318W

  Corporate Responsibility
  Helen Jones
  To ask the Secretary of State for Work and Pensions how many HSE investigations into the deaths of(a) people at work and (b) members of the public have resulted in the prosecution of a company director or senior manager in each of the last five years. [82054]

  Mr. Nicholas Brown
  [holding answer 21 November 2002]: HSE's validated prosecution statistics do not identify cases against individual directors and senior managers following fatal incident investigations. HSE have already recognised the need to address this shortfall in their information systems. They set up a new system in April 2002 that will enable them to accurately capture and provide this information for future years.

  Employment Action Teams
  Mr. Cousins
  To ask the Secretary of State for Work and Pensions what criteria are used by each Employment Action Team to define the areas of special employment action. [83244]

  Mr. Nicholas Brown
  [holding answer 26 November 2002]: We launched the first phase of the Action Teams for Jobs initiative in 2000. The locations of the 40 teams were selected on the basis of their low levels of employment, high levels of unemployment, high proportions of people from ethnic minority backgrounds; or their being in existing Employment Zone or European Social Fund Objective One areas. These teams were able to choose where they worked within the area, subject to the approval of an inter-Departmental Project Steering Group.

  In 2001 the Action Team initiative was extended. Some new teams were introduced and some teams in large urban areas were divided to ensure a strong local presence was retained. The focus of the teams was sharpened to ensure they targeted only the most disadvantaged people in the most employment deprived wards. Wards covered by the new Action Teams and additional wards covered by existing teams were selected because their working age employment rate was 58.5 per cent., or below in April 2001 when selection took place. Within these wards, teams can work with people from specified disadvantaged groups.

  Jobcentre Plus
  Mr. Heald
  To ask the Secretary of State for Work and Pensions (1) which local authority areas have been selected to receive additional points in respect of the Jobcentre Plus Job Entry Target set by his Department; what criteria were applied when selecting the areas; whom he consulted in respect of the selection; and if he will make a statement; [82508]

  (2) what the criteria are by which additional points are scored in relation to the Jobcentre Plus Job Entry Target scheme; and if he will make a statement; [82511]

  (3) what criteria he applied when determining the Jobcentre Plus Job Entry Target points score to be given to each type of priority client; and what guidance has been given to Jobcentre Plus staff on the way in which such clients should be prioritised in relation to (a) other priority client groups and (b) other clients. [82513]
  319W
  Mr. Nicholas Brown
  [holding answer 25 November 2002]: The Jobcentre Plus job entry targets help focus the agency's efforts and resources on helping those people on whom we want to target more support to move from welfare into work. They include lone parents, disabled people and those living in the most disadvantaged areas of the country.

  The way in which job entry and additional point scores have been allocated sends clear signals about our priorities to all Jobcentre Plus managers and staff who have been informed about them in writing.

  The 60 local authority areas attracting additional job entry point scores are in the table. These local authorities were chosen because they either have the highest unemployment rates or the highest minority ethnic populations. We consulted other Government Departments, the National Employment Panel and key stakeholders in deciding on these criteria.

  Local Authorities with highest unemployment rates

  Local Authorities with highest minority ethnic population

  Blaenau Gwent

  Barnet

  Caerphilly

  Birmingham

  Dundee City

  Bradford

  Easington

  Brent

  East Ayrshire

  Camden

  Glasgow City

  Coventry

  Hackney

  Croydon

  Halton

  Ealing

  Hartlepool

  Enfield

  Islington

  Greenwich

  Kingston upon Hull

  Hammersmith and Fulham

  Knowsley

  Hariney

  Liverpool

  Harrow

  Manchester

  Hillingdon

  Merthyr Tydfil

  Hounslow

  Middlesbrough

  Kensington and Chelsea

  Neath Port Talbot

  Kirklees

  Newcastle-upon-Tyne

  Lambeth

  Newham

  Leeds

  North Lanarkshire

  Leicester City

  Nottingham

  Lewisham

  Pembrokeshire

  Luton

  Redcar and Cleveland

  Merton

  Rhondda, Cynon, Taff

  Redbridge

  Salford

  Sandwell

  South Tyneside

  Sheffield

  Southwark

  Waltham Forest

  Sunderland

  Wandsworth

  Tower Hamlets

  City of Westminster

  West Dunbartonshire

  Wolverhampton

  Ken Willis (European Judgment)
  Mr. Russell Brown
  To ask the Secretary of State for Work and Pensions if he will make a statement on the implications of the judgment of the European Court of Human Rights in the case of Ken Willis-application No. 36042/97; and if he will make a statement. [83036]

  Malcolm Wicks
  In June 2002 the European Court of Human Rights found that the UK Government had violated the Convention in respect of Mr. Ken Willis by not paying him the Widowed Mother's Allowance and Widow's Payment that he would have been entitled to had he been a woman in the same circumstances. The Court ordered a payment equivalent to the benefit that 320W
  he would have received had he been a woman and an amount in respect of interest. The Government is not contesting that judgement.

  Litigation remains before the domestic and Strasbourg Courts. The Court of Appeal heard arguments in the domestic cases during week commencing 7 October and judgment was reserved. The European Court of Human Rights has postponed further hearings of applications by widowers until the completion of the domestic litigation.

  The Government never speculates about the outcomes of cases or the decisions that it may take.

  Literacy
  John Mann
  To ask the Secretary of State for Work and Pensions what the literacy levels of long-term unemployed people in coalfield areas were in each year since 1997; and how this compared with the national average. [82253]

  Mr. Nicholas Brown
  Information on the literacy-levels among long-term unemployed people in coalfield areas is not available. It is estimated that around one third of unemployed people have literacy levels below Level 1 (the level expected of an 11 year old) in England1.

  We are committed to helping unemployed people improve their literacy and numeracy skills so they can find and stay in work. Jobcentre Plus has comprehensive arrangements in place to identify clients who need help with their basic skills, and refer them to high quality learning opportunities. Around 15,000 clients are screened for literacy and numeracy needs by Jobcentre Plus every week.

  We are currently introducing a number of measures to enhance our basic skills provision even further. For example, each Jobcentre Plus district now has a basic skills champion to drive forward work and support front line staff in this important area, and in October we introduced a more intensive and work-focused basic skills training programme. Between September 2001 and March 2002 we piloted different ways of encouraging people to take up literacy and numeracy help. One of these pilots was in my hon. Friend's constituency. Evaluation of the pilots will help us determine the future strategy for helping unemployed people improve their basic skills. The final evaluation report will be available next summer.

  1 Source

  "Skills for Life: the National Strategy for Improving Adult Literacy and Numeracy Skills" (March 2001).

  New Deal (Disabled People)
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions if he will make a statement on the number of beneficiaries of the New Deal for Disabled People. [81675]

  Mr. Nicholas Brown
  Since the national extension of the New Deal for Disabled People programme began, it has helped over 6,000 people into jobs and almost 28,000 have registered with Job Brokers to actively pursue employment.

  Retirement Ages
  Mr. Willetts
  To ask the Secretary of State for Work and Pensions what the average age of retirement is for(a) his Department's employees and (b) people who work in each of the executive agencies within his Department. [81951]

  Mr. McCartney
  The average age of staff retiring from the Department and from each of the executive agencies within the Department is shown in the following table:

  Average age (years)

  DWP

  61.4

  Jobcentre Plus

  61.1

  The Pension Service

  61.2

  Child Support Agency

  61.9

  Appeals Service

  62.7

  Stakeholder Pensions
  Miss McIntosh
  To ask the Secretary of State for Work and Pensions what take-up there has been of stakeholder pensions. [82222]

  Mr. McCartney
  Figures from the Association of British Insurers (ABI) show that up to the end of September 2002, 1,151,371 stakeholder pensions had been sold. A detailed breakdown of sales will not be available until next year. Sales of over a million in their first 18 months on the market represents a very encouraging start.

  In addition, the ABI figures show that 335,717 employers had designated a scheme for their work force. This means more people have the chance to save for a decent income in retirement through the work place.

  Widow's Benefits
  Mr. Russell Brown
  To ask the Secretary of State for Work and Pensions how many UK citizens have cases before the European Court of Human Rights and the domestic courts challenging the UK Government for failing to pay men widow's benefits prior to the introduction of the new bereavement benefits in April 2001. [83037]

  Malcolm Wicks
  At present the European Court of Human Rights has notified the UK Government of 73 applications from widowers in Great Britain relating to challenges for failing to pay men widow's benefit before April 2001. Further consideration of these cases has been postponed by the Court pending the outcome of the domestic litigation. Any Northern Ireland cases are a matter for my right hon. Friend the Secretary of State for Northern Ireland.

  Before the Court of Appeal, whose judgment was reserved following a hearing in October, there are four cases.

DEFENCE

  A400M
  Mr. Allan
  To ask the Secretary of State for Defence what advice was(a) sought from and (b) given by the
  322W
  Cultural Property Unit of the Department of Culture, Media and Sport to his Department in connection with the proposed partnering agreement between the Government and Marine Odyssey Exploration Inc. to salvage antiquities from a wreck believed to be that of the 17th century warship, Sussex. [82980]

  Dr. Moonie
  Advice was sought from the Department for National Heritage, now part of the Department for Culture, Media and Sport (DCMS), from an early stage on the implications of the agreement with Odyssey Marine Exploration Inc, and DCMS has been represented on an inter departmental Project Board which has given consideration to all aspects of the project.

  Mr. Allan
  To ask the Secretary of State for Defence whether a UK Government archaeological observer will be on board vessels deployed by Marine Odyssey Exploration Inc. to monitor their operation in relation to salvaging from the wreck believed to be that of the 17th century warship, Sussex. [82981]

  Dr. Moonie
  The licence agreement provides for officially appointed observers to be on board the vessel during the whole exploration and recovery process at sea

  Mr. Allan
  To ask the Secretary of State for Defence what provision has been made to terminate the contract with Marine Odyssey Exploration Inc. if the salvage operation on the wreck believed to be that of the 17th century warship fails to meet established standards of archaeological research. [82982]

  Dr. Moonie
  The licence agreement requires that Odyssey Marine Exploration Inc produce a detailed project plan, covering all aspects of the project, which must be approved by the Government Departments involved before any excavation can take place. The project plan will be subject to scrutiny by an independent archaeological review group, to be chaired by English Heritage, to ensure that it complies with appropriate standards of archaeological research. If, following further discussion with the company, these standards cannot be guaranteed at the review stage, the Ministry of Defence has the option to terminate the agreement. The licence agreement also includes provision for termination in the event of any serious breach by Odyssey of any of its obligations that has not been remedied as soon as reasonably practicable upon receipt of written notification of such a breach.

  Mr. Allan
  To ask the Secretary of State for Defence if he will place in the Library the contract between the Government and Marine Odyssey Exploration Inc. for salvage operations on the wreck believed to be that of the 17th century warship Sussex. [82984]

  Dr. Moonie
  I am unable to place a copy of the Licence Agreement in the Library in accordance with Exemption 13 of the Code of Practice on Access to Government Information which relates to a Third Party's commercial confidences. I will, however, place in the Library of the House a copy of The Partnering Agreement Memorandum and a synopsis of the archaeological requirements of the agreement.

  Mr. Allan
  To ask the Secretary of State for Defence which body will be responsible for assessing artefacts recovered from the wreck believed to be that of the
  323W
  17th century warship Sussex to establish (a) their archaeological significance and (b) the most appropriate means of retention or disposal under the terms of the partnering agreement between Marine Odyssey Exploration Inc. and the UK Government. [82985]

  Dr. Moonie
  The Department for Culture, Media and Sport and English Heritage will be consulted prior to any final decision on retention and disposal of items recovered from the wreck. We are committed to ensuring that every effort is made to consult public museums with relevant collecting interests.

  Mr. Allan
  To ask the Secretary of State for Defence when his Department first entered into discussion with Marine Odyssey Exploration Inc. in relation to proposals to salvage antiquities from the historic wreck believed to be that of the 17th century warship Sussex. [82986]

  Dr. Moonie
  The company first expressed an interest in locating the wreck and salvaging its cargo in 1995. The company requested permission to search for the wreck in 1998, and was informed that the Ministry of Defence had no objection to this. The MOD's position throughout has been that no agreement of any sort could be considered unless and until the wreck had been located and identified. Detailed discussions began, following the location of the wreck, in September 2002.

  Anti-tank Missiles
  Mr. Liddell-Grainger
  To ask the Secretary of State for Defence what the combined explosive force is of 20 anti-tank missiles of the type lost in the Bristol channel recently. [83391]

  Dr. Moonie
  The total explosive force of 20 Swingfire warheads is equivalent to 64.2Kg of TNT.

  Mr Liddell-Grainger
  To ask the Secretary of State for Defence when the report on the lost anti-tank missiles in the Bristol channel will be put in the Library. [83393]

  Dr. Moonie
  The summary of the Board of Inquiry report will be placed in the Library of the House on 28 November.

  Armed Forces (Home Owning)
  Mr. Keetch
  To ask the Secretary of State for Defence how many members of the armed forces(a) own their own home and (b) cite a wish to own their own home as a reason for leaving the forces; and if he will make a statement. [82473]

  Dr. Moonie
  Continuous Attitude Surveys (CAS) are undertaken to ascertain the attitudes of personnel towards a range of service conditions and the results used to inform personnel policies, by identifying those aspects of service life which are causes of both satisfaction and dissatisfaction to personnel. The last Naval Service CAS was in September 2002. Surveys were sent to 2000 individuals and 957 (48 per cent.) responded. Respondents represented 2.5 per cent. of the trained strength (excluding FTRS personnel). The latest Army CAS was sent out in March/April 2002. The surveys were sent to 3,978 individuals and 1,897 responded in time for the analysis work. Respondents represented 1.9 per cent. of the trained strength (excluding FTRS and Gurkhas). The latest RAF report 324W
  was published in March 2002 and covered surveys sent out in May and August 2001. Surveys were sent out to 4,000 individuals and 2,400 responded.

  The numbers of those who responded to the CAS that own their own home or cite the wish to own their own home as a reason for leaving each service are as follows:

  Navy

  The RN has for many years encouraged homeownership through its policy of freedom of choice over mobility and stability. The Long Service Advance of Pay (LSAP) is an £8,500 low interest rate loan available to all RN/RM personnel over 23-years-old with more than 10 years to serve and is designed to assist in house purchase. This is very popular and the latest Service Continuous Attitude Survey (SCAS) records 82 per cent. married personnel as homeowners and 72.2 per cent. living in their own home. LSAP is available to non-married personnel and the number of single homeowners is increasing. Definitive figures on ownership are not available but there is a 66 per cent. take up of LSAP among those unmarried personnel eligible to LSAP.

  Army

  Based on responses to the Army's most recent Continuous Attitude Survey, 38 per cent. of Army personnel own their own home. When questioned about the degree to which an intention to stay or leave was affected by the prospects of buying or renting their own home, 30 per cent. stated that it would increase their intention to stay, 55 per cent. stated that it would have no effect and 15 per cent. stated that it would increase their intention to leave.

  RAF

  Based on responses to a question in the RAF Continuous General Attitude Survey (GCAS) around 47 per cent. of RAF personnel own their own home (66 per cent. of officers and 42 per cent. of other ranks).

  The questions in the GCAS do not make it possible to determine whether an individual's wish to own a home is a factor that encourages them to leave, or remain in the service. However, officers who make an active decision to leave the RAF (by applying for PVR or exercising their right to leave at an option point), and airmen leaving, whether at the end of an engagement, by giving notice, or through PVR, are invited to complete a leavers' survey in which they are asked the importance of various factors on their decision to leave.

  Analysis of recent surveys show that there is no single reason for individuals deciding to leave the RAF and compared to other issues, accommodation factors do not rate highly for either officers or airmen. Job satisfaction, career opportunities outside the service, family stability and promotion prospects are among the main concerns.

  Armed Services (Fatalities)
  Mr. Paul Stinchcombe
  To ask the Secretary of State for Defence how many 16 to 18-year-olds in the armed services have died in service since 1982; how many died as a result of firearms accidents; and if he will specify the other causes of death. [83232]
  325W
  Dr. Moonie
  Since 1 January 1982 there have been 332 deaths among 16 to 18-year-olds serving in the armed forces. Of these, 50 deaths have been due to firearm discharge, 12 of which were due to accidents and 38 were due to other causes (including hostile action and suicides). Of the non-firearm discharge deaths, 156 were due to road traffic accidents, 48 were due to natural causes, and 78 were due to other injuries.

  Army Recruitment
  Mr. Keetch
  To ask the Secretary of State for Defence what changes that would make Army life more attractive to new recruits were most commonly cited by Army personnel, when last questioned. [82474]

  Dr. Moonie
  The Army has been conducting the Continuous Attitude Survey (CAS) for over 20 years. It is a valuable tool in understanding the current thinking of Army personnel and is used to help manage retention, exercise duty of care and report on progress with Army and wider departmental initiatives.

  The latest survey was undertaken in March/April 2002 and sent to a 4 per cent. random sample of the trained Army (excluding Gurkhas and Full Time Reserve Service personnel); 3,978 questionnaires were sent out.

  The following changes were most commonly cited by personnel as having the potential to make Army life more attractive to recruits:

  Higher pay/better pension

  Better standards of single accommodation/accommodation in general

  Date of sale

  Description of auction

  Lot numbers

  8 September 2000

  Books and maps

  69–73, 286–295

  9 October 2000

  Printed books, atlases and maps

  248–275

  4 September 2000

  Furniture, carpets and works of art

  163–164, 180–182

  2 October 2000

  Furniture, carpets and works of art

  194

  5 February 2001

  Furniture, carpets and works of art

  96, 98, 248–250

  14 May 2001

  Furniture, carpets and works of art, clocks and watches

  452–455

  25 June 2001

  Furniture, carpets and works of art

  100

  5 November 2001

  Furniture, carpets and works of art, clocks and watches

  476–484

  2 November 2000

  Arms and armour, aeronautical automobilia

  1246

  5 December 2000

  Blenheim sale

  577

  16 May 2001

  Good continental ceramics and glass

  96–98

  21 November 2001

  Good continental and ceramics and glass

  1 85–86

  17 December 2001

  Silver and plated wares

  37

  26 June 2001

  Clocks and watches

  266–270, 279–282

  14 July 2001

  Traditional rivercraft and maritime

  123

  15 August 2002

  The maritime sale

  2 l–52

  9 September 2002

  Musical instruments

  51–105

  1 Could not sell, when by private sale

  2 Ships' bells, etc

  Total number between 2000–02 = 17

  Defence Fire Service
  Mr. Wray
  To ask the Secretary of State for Defence what measures he will introduce to modernise the Defence Fire Service; if he will make a statement on their capabilities; how many DFS establishments there are in the UK; how many fire engines and specialist teams are available; and what proposals he has to increase these levels. [83228]
  326W

  More civilian recognised qualifications

  More adventure training

  Challenger Tanks
  Mr. Keith Simpson
  To ask the Secretary of State for Defence how many spare Challenger tank engines are held in stock by(a) his Department and (b) the UK defence industry. [82912]

  Mr. Ingram
  The Ministry of Defence holds 105 Challenger 2 Main Battle Tank (CR2 MBT) engines in stock. We are not aware of any CR2 MBT engines held in stock by the United Kingdom defence industry.

  Defence Disposal Agency
  Mr. Allan
  To ask the Secretary of State for Defence if he will list the archaeological, historic and cultural heritage assets being disposed of by the Defence Disposal Agency; and what the(a) means and (b) mode of disposal are in each case. [82983]

  Dr. Moonie
  Items of historical interest declared surplus to the Disposal Services Agency (DSA) include ships' bells, musical instruments with insignia and official gifts. These are sold by public auction through Bonhams Auctioneers & Valuers who have conducted 17 sales since 2000 and following is a table detailing the dates of these auctions and the type of items sold. These sales were promoted by Bonhams Auctioneers & Valuers and the DSA to ensure maximum awareness.

  In 1999, the DSA conducted the disposal of wood and copper, recovered from HMS Victory during refurbishment, by competitive tender.

  Mr. Ingram
  A major review of the Defence Fire Services, known as the Ministry of Defence Fire Study 2000, has been under way for the past two years. This study, tasked to make recommendations on the most effective fire service for the future has recently been completed and the final report is imminent. It is expected to identify a number of modernisation initiatives for the organization of the Defence Fire Services. In parallel to this study, the Airfield Support Services Project (ASSP), encompassing the Defence Fire
  327W
  Services, is seeking to achieve the most viable and cost-effective solution for the provision of airfield support, with options that include both public-private partnership and in-house solutions. The result of Fire Study 2000 efficiencies will be used to inform the Public Sector Comparator for the ASSP.

  The Defence Fire Services, including the civilian and military components, are fully capable of meeting their defence role and are equipped with the latest state of the art technology. There are 71 establishments in the United Kingdom with 169 fire engines and there are no plans at present to increase these numbers. There are no specialist teams within the Defence Fire Services, with all personnel being trained to the same standard.

  (FTE)

  Executive Agencies1

  Civil Servants2

  Non departmental public bodies3

  April 1997

  October 2002

  April 1997

  October 2002

  April 1998

  October 2002

  Scotland

  6,401

  5,296

  3,223

  3,148

  0

  0

  Not Scotland

  54,649

  43,436

  42,611

  35,038

  344

  387

  Total

  61,050

  48,732

  45,834

  38,186

  344

  387

  Percentage Scotland

  10.5

  10.9

  7.0

  8.2

  0.0

  0.0

  Notes:

  1 The Ministry of Defence does not centrally hold information on the number of jobs or posts within its organisation and the equivalent number of people is shown as the nearest comparator.

  2 Figures include foil time equivalent numbers for individuals working part time.

  3 Figures are individually rounded and may not sum precisely to the totals shown.

  Eurofighter Typhoon
  Mr. Jack
  To ask the Secretary of State for Defence when he expects to be able to make a statement on the recent crash of a pre-production Eurofighter Typhoon in Spain. [83366]

  Dr. Moonie
  [holding answer 26 November 2002]We very much regret the accident involving a Typhoon Development (not pre-production) aircraft last week but are relieved that both aircrew survived. It is too early to speculate on the cause or implications of the accident.

  Fire Service Cover
  Mr. Jenkin
  To ask the Secretary of State for Defence what special training has been given to civilian firefighters to work with the armed services in the event of chemical, biological or radiological attack against the United Kingdom; and whether such skills are shared by service personnel substituting for civilian firefighters on strike. [82903]

  Mr. Ingram
  The Ministry of Defence has no responsibility for the training given to civilian firefighters.

  During periods of industrial action, armed forces personnel will provide emergency fire and rescue cover. This will include a capability to handle hazardous materials and decontamination. Other contingency plans are in place for responding to a chemical, biological or radiological attack.

  Departmental Jobs (Scotland)
  Annabelle Ewing
  To ask the Secretary of State for Defence how many, and what percentage, of(a) civil service, (b) executive agencies and (c) non-departmental public body jobs under the remit of his Department are located in Scotland; and how many of each have been relocated to Scotland since May 1997. [83580]

  Dr. Moonie
  The information for the civil servants and the executive agencies is shown below as at October 2002 and April 1997 (closest data available to May 1997). The non-departmental public bodies data is shown as at October 2002 and April 1998 (closest data available to May 1997). Information on relocations is not held centrally and could only be provided at disproportionate cost.

  Mr. Jenkin
  To ask the Secretary of State for Defence (1) what assessment he made after 11 September 2001 of the role of civilian firefighters in the event of terrorist attack against military targets in the United Kingdom; [82902]

  (2) what discussions there have been between his Department and firefighters' leaders on action to be taken by striking firefighters in the event of a terrorist attack against military installations in the United Kingdom; [82904]

  (3)what estimate he has made of the impact of industrial action by firefighters on their response times in the event of a terrorist attack against military targets in the United Kingdom. [82905]

  Mr. Ingram
  [holding answer 25 November 2002]: Civil firefighters clearly have a role to play in responding to terrorist attacks in the United Kingdom, whether the attack is against a civil or military target. The nature of their response and arrangements during industrial action is a matter for the FBU, local authorities and the Office of the Deputy Prime Minister, who have responsibility for fire services. The Ministry of Defence welcomes the protocol agreed between these parties relating to the response to a terrorist incident during periods of industrial action.

  Mr. Jenkin
  To ask the Secretary of State for Defence (1) how many military personnel manning Green Goddess applicances have been drawn from units usually employed on security duties at military bases in the United Kingdom; [82906]
  329W
  (2) what overall assessment he has made of the implications of industrial action by firefighters on the safety and security of military installations in the United Kingdom. [82907]

  Mr. Ingram
  [holding answer 25 November 2002]: Security at military establishments is provided by trained military personnel based there, the Ministry of Defence Guard Service, the MOD Police (MDP) or a combination of the three. Neither the MOD Guard Service nor the MDP personnel are involved in providing emergency fire and rescue cover (Operation FRESCO) during the firemen's strike. Military personnel engaged in providing security do so as part of their normal daily duties and tasking is done on a rotational basis. There are no military units dedicated to providing security at military establishments.

  Armed forces personnel engaged in Operation FRESCO have been drawn from many different units and from all three Services. This has been done to help minimise the effect of withdrawing forces from their normal duties and to ensure that military core business can continue, including the provision of security at military establishments. Security at those establishments has not been compromised.

  HMNLS Rotterdam
  Mr. Gerald Howarth
  To ask the Secretary of State for Defence what UK operations and training exercises HMNLS Rotterdam has participated in the past two years; and which British personnel were embarked on the ship. [82212]

  Mr. Ingram
  The United Kingdom/Netherlands Amphibious Group, formed 29 years ago, enjoys a unique, close and historic working relationship in NATO and the European Amphibious Initiative, and regularly shares assets and a unified command.

  In the past two years HNLMS ROTTERDAM has participated in the routine training deployments ARGONAUT 00 and ARGONAUT 02 which took place between mid-September to late-November 2000 and early-September to early- November 2002 respectively. HNLMS ROTTERDAM'S participation in the former was curtailed when she was called to undertake national tasking. For completeness, HNLMS ROTTERDAM has also participated in the following NATO exercises with UK involvement and/or where UK personnel have been embarked on the ship:
  a. NATO exercise DESTINED GLORY 01 during which 845 Squadron (five x Sea King Mk4 and some 70 squadron personnel) embarked during the period October to November 2001 to provide lift for the Royal Netherlands Marine Corps (RNLMC)
  b. NATO exercise DESTINED GLORY 02, the main focus of the ARGONAUT 02 deployment. During the exercise, and in his NATO role, Commander United Kingdom Netherlands Amphibious Group (COMUKNLPHIBGRU), a RN Commodore, together with 173 UK personnel (constituting 34 per cent. of the ship's company) and four Sea King Mk4 from 845 Squadron providing lift for the RNLMC, embarked in ROTTERDAM between September to November 2002

  Iraq
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence on how many occasions(a) coalition aircraft and (b) UK aircraft patrolling the southern no-fly zone in Iraq have (i) detected violations of the no-fly zones, (ii) detected a direct threat to a coalition aircraft and (iii) released ordnance in each month since March, stating for each month the tonnage released; and if he will make a statement. [83246]

  Mr. Ingram
  The information requested is currently available only up to and including 13 November.

  (i) No-fly zone (NFZ) violations are detected in several ways. I am withholding details of detection methods in accordance with Exemption 1 of the Code of Practice on Access to Government Information. The number of violations recorded, by month, in the southern No Fly Zone, is as follows:

  Month

  Number of violations recorded

  March

  0

  April

  1

  May

  0

  June

  1

  July

  1

  August

  0

  September

  3

  October

  2

  November

  0

  (ii) Coalition aircraft recorded threats on a total of 143 occasions, as follows:

  Month

  Coalition aircraft recorded threats

  March

  0

  April

  1

  May

  20

  June

  13

  July

  30

  August

  15

  September

  41

  October

  14

  November

  9

  Note:

  We do not hold separate threat figures for individual nations' aircraft.

  (iii) (a) Coalition aircraft in the southern NFZ responded in self defence against Iraqi Air Defence targets on 41 occasions in the period from 1 March to 13 November, and released 126.4 tons of ordnance.

  Month

  Responses conducted in self defence

  Tonnage of ordnance released

  March

  0

  0

  April

  1

  0.3

  May

  5

  7.3

  June

  3

  10.4

  July

  5

  9.5

  August

  8

  14.1

  September

  10

  54.6

  October

  6

  17.7

  November

  3

  12.5

  331W
  (iii) (b) Of these totals, UK aircraft responded on 17 occasions and released 46 tons of ordnance:

  Month

  Responses conducted in self defence

  Tonnage of ordnance released

  March

  0

  0

  April

  0

  0

  May

  2

  4.9

  June

  2

  2.2

  July

  1

  3.2

  August

  2

  3.2

  September

  6

  21.1

  October

  4

  11.4

  November

  0

  0

  Kenya
  Mr. Caton
  To ask the Secretary of State for Defence what assessment his Department has made of the viability of contracting out the(a) locating and (b) clearing of unexploded ordnance at the Archers Post training ground in Kenya. [83357]

  Mr. Ingram
  While some Non-Government Organisations and firms have approached the Ministry of Defence with broad offers to assist with Explosive Ordnance Clearance operations currently carried out by the British Army in Kenya, it is considered that this task can be more competently and comprehensively conducted by specialist Royal Engineer Explosive Ordnance Disposal units. Moreover, given the testing climatic environment, there is considerable training value in such clearance operations being carried out by the units involved.

  Mr. Caton
  To ask the Secretary of State for Defence (1) what clearance techniques for removing unexploded ordnance are met at Archers Post, Kenya; [83358]

  (2) what surveying techniques are used by the Army in locating unexploded ordnance to be cleared at Archers Post, Kenya. [83361]

  Mr. Ingram
  After firing of ordnance British Army units training at Archers Post commence a visual search of the surface of the training area with the object of recording and clearing any "blind" or unexploded munitions before leaving the area. The techniques employed observe and adhere to extant British Army practices and regulations for the disposal of munitions. These procedures are applicable on all sites where the British Army trains throughout the world.

  Mr. Caton
  To ask the Secretary of State for Defence (1) what discussions his Department has held with the Kenyan Government about the future clearance of unexploded ordnance on land in Kenya made for military training by British forces; [83360]

  (2) how long the clean up of unexploded munitions at Archers Post training site in Kenya took in the spring of (a) 2000, (b) 2001 and (c) 2002 operations. [83355]

  (3) if he will place in the Library a copy of the agreement between his Department and the Kenyan Government on the clearing of unexploded ordnance at Archers Post and other training grounds in Kenya. [83359]
  332W
  Mr. Ingram
  There is no formal agreement with the Kenyan Government specifically dealing with the clearance of unexploded ordnance from areas used by the British Army for training in Kenya. To assist the Kenyan authorities Exercise PINEAPPLE, an annual Explosive Ordnance Clearance exercise, is conducted at Archers Post and other Kenyan training areas. This is a voluntary initiative of the United Kingdom Ministry of Defence, undertaken in order to provide a safe training environment. The exercise is conducted in conjunction with Kenyan Army Engineers and its requirement is assessed annually. During each of the years 2000, 2001, and 2002 some four weeks were spent conducting disposals at Archers Post. We plan to repeat this in 2003.

  Manning Control Reviews
  Mr. Keetch
  To ask the Secretary of State for Defence (1) how many members of(a) the Army, (b) the Royal Navy and (c) the Royal Air Force have been subject to a manning control review in each of the last 15 years; in which regiments of the armed forces the policy of manning control has been practised over the past 15 years; and what the (i) start and (ii) end dates of the policy were; [82128]

  (2) how many personnel who elected for premature voluntary release in each year since 1996 were issued with a manning control warning certificate beforehand. [82129]

  Mr. Ingram
  [holding answer 25 November 2002]: The Royal Navy, Army and Royal Air Force have distinctive manning policies that are designed to meet their different requirements. The hon. Member's question relates to the Army's practice for its non-commissioned personnel and can only be answered specifically for the Army. I shall, however, also outline the nearest equivalent Royal Navy and Royal Air Force procedures.

  Army

  I refer the hon Member to the answer given on 7 May 2002, (Official Report, column 41) which reported the Army figures for the last five years for those discharged following Manning Control review. The number of soldiers in the Army who have been discharged under Queen's Regulations paragraph 9.413 'Not required for a full army career in each of the last 15 calendar years and by regiment following a Manning Control Point review is summarised in Tables 1 and 2 respectively.

  Table 1:Army Manning Control Point discharges by year

  Year

  Number MCP

  1988

  492

  1989

  467

  1990

  140

  1991

  100

  1992

  331

  1993

  157

  1994

  14

  1995

  7

  1996

  202

  1997

  231

  1998

  175

  1999

  93

  2000

  66

  2001

  47

  2002

  3

  Total:

  2,525

  333W

  Table 2 Army Manning Control Point discharges by Corps and Regiments

  Regiment

  Total

  Queen's Own Hussars

  5

  Queen's Royal Irish Hussars

  5

  13th /l8th Hussars

  9

  Royal Tank Regiment

  16

  Royal Artillery

  234

  Royal Engineers

  300

  Royal Signals

  216

  Grenadier Guards

  27

  Coldstream Guards

  21

  Scots Guards

  8

  Welsh Guards

  9

  Royal Scots

  16

  Royal Highland Fusiliers

  40

  King's Own Scottish Borderers

  9

  Black Watch

  23

  Queen's Own Highlanders

  13

  The Highland Regiment

  17

  The Gordon Highlanders

  20

  Argyll and Sutherland Highlanders

  27

  Princess of Wales's Royal Regiment

  28

  The Royal Regiment of Fusiliers

  26

  Royal Anglian

  18

  King's Own Royal Border Regiment

  23

  The King's Regiment

  22

  Prince of Wales Own

  31

  Green Howards

  35

  The Royal Irish Regiment

  50

  Royal Irish (Home Service Full Time)

  27

  Queen's Lancashire Regiment

  36

  Duke of Wellington's Regiment

  22

  Devon and Dorset Regiment

  26

  The Cheshire Regiment

  21

  Royal Welsh Fusiliers

  29

  Royal Regiment of Wales

  16

  Gloucestershire Regiment

  15

  The Royal Gloucestershire, Berkshire and Wiltshire Regiment

  15

  The Worcestershire and Sherwood Foresters Regiment

  16

  The Royal Hampshire Regiment

  13

  The Staffordshire Regiment

  47

  The Light Infantry

  31

  The Royal Green Jackets

  21

  The Parachute Regiment

  12

  Army Air Corps

  24

  Royal Logistics Corps

  79

  Royal Corps of Transport

  169

  Royal Army Medical Corps

  43

  Royal Army Ordnance Corps

  78

  Royal Electrical and Mechanical Engineers

  352

  Royal Army Veterninary Corps

  7

  Royal Pioneer Corps

  11

  Intelligence Corps

  6

  Army Catering Corps

  82

  Corps of Army Music

  6

  Women's Royal Army Corps

  13

  Adjutant General's Corps (Staff and Personnel Corps)

  19

  Adjutant General's Corps (Provost)

  5

  Others

  36

  Total:

  2,525

  While it is not possible to pinpoint the start date, research of the regulations has shown that Army Manning Control policy has been extant since at least 1952. Although the policy remains in being, as the statistics show, manning control points are used infrequently in the current manning climate.

  The information requested concerning the number of Army personnel who elected for Premature Voluntary Release in each year since 1996 and who were issued with a manning control warning certificate beforehand is not held centrally and could only be provided at disproportionate cost.
  334W
  Royal Navy

  Royal Naval Ratings and RM other ranks are normally engaged on a 22-year open engagement, which may be curtailed for reasons of inadequate performance or conduct, or reduced employability for medical reasons. RN Ratings and RM other ranks may apply to extend their service beyond 22 years and will be allowed to do so when there is a service requirement. The Royal Navy does not apply a "manning control review" to ratings but its manning levels and rates of premature voluntary release are continuously monitored, and recruiting, training and promotion targets are set accordingly.

  Royal Air Force

  Non-commissioned engagements in the Royal Air Force are normally offered for an initial period of nine years. Individuals may apply to extend their service to a total of 12 or 15 years and will be allowed to do so when there is a Service requirement. Any further service above this is linked to promotion, for example service to 22 years is possible on promotion to corporal.

  Medical Reservists
  Alan Simpson
  To ask the Secretary of State for Defence what arrangements are made by his Department to compensate the NHS for medical staff called up as reservists. [83405]

  Dr. Moonie
  Like all other employers, health trusts may apply for financial assistance to cover the additional costs they incur as a result of their employees being called out. Payments are made in accordance with the regulations set out in Statutory Instrument 1997/309.

  Naval Vessels (Refit and Repair)
  Dr. Julian Lewis
  To ask the Secretary of State for Defence if he will list those Royal Navy vessels not in service as a result of(a) refits and (b) repairs, together with their anticipated dates to re-enter service. [83585]

  Mr. Ingram
  In the majority of cases, it is not possible to separate those Royal Navy vessels undergoing repair from those in refit, other than arbitrarily, as all refits and other programmed maintenance periods contain an element of repair work. However, listed in the table are those vessels that, because they are undergoing some form of refit, maintenance or repair, are currently not available for operational tasking. Vessels that can be categorised as solely undergoing repair have been indicated.

  RN vessel

  Anticipated return to service date

  HMS Brecon

  February 2003

  HMS Campbeltown

  March 2003

  HMS Cattistock1

  2 —

  HMS Chiddingfold

  May 2003

  HMS Exploit

  December 2002

  HMS Glasgow

  January/February 2003

  HMS Gloucester

  July 2003

  HMS Illustrious

  February 2005

  HMS Invincible

  May 2003

  HMS Middleton

  February 2003

  HMS Montrose

  February 2004

  HMS Monmouth

  May 2003

  HMS Penzance

  February 2003

  HMS Ocean1

  December 2002

  335W

  RN vessel

  Anticipated return to service date

  HMS Pursuer

  December 2002

  HMS St. Albans

  January 2003

  HMS Sceptre

  Second quarter 2003

  HMS Spartan

  First quarter 2003

  HMS Tracker

  December 2002

  HMS Trafalgar

  First quarter 2004

  HMS Trenchant

  Fourth quarter 2003

  HMS Triumph1

  Fourth quarter 2002

  HMS Vanguard

  Third quarter 2004

  1 Out of service for repair.

  2 Damage sustained on 23 November still being surveyed–too soon to say how long her repairs will take.

  In addition, HMS Nottingham is currently in transit to the United Kingdom on a Heavy Lift Ship following her grounding incident off the west coast of Australia in July this year. No decision has yet been made on her future.

  Operation Sandcastle
  Ann Clwyd
  To ask the Secretary of State for Defence how many statements were taken and in which countries in connection with Operation Sandcastle; and if he will place the report of 31 March 1992 in the Library. [81327]

  Mr. Ingram
  [holding answer 18 November 2002]: According to records held by the Ministry of Defence, 1,868 potential witnesses were traced and interviewed during the course of Operation Sandcastle by the Royal Military Police. During the course of their investigation they recorded 1,056 individual questionnaires and collected a further 725 statements (including those made by British citizens held as Prisoners of War by the Iraqis).

  Our records do not detail in which countries those interviews were conducted but I understand that most were conducted in the United Kingdom and Kuwait as well as other Gulf States.

  This report contains the confidential statements of individuals who witnessed or were subject to alleged acts of Iraqi brutality during the Gulf War, and the Ministry of Defence has a duty to protect the confidentiality of those who co-operated with the Royal Military Police. I am therefore withholding the report under Exemption 14 (Information given in confidence) of the Code of Practice on Access to Government Information.

  Outreach Programmes
  Mr. Hawkins
  To ask the Secretary of State for Defence what funding from his Department has been provided for Outreach programmes run by ACFA in the financial year 2001–02; what will be provided in financial years(a) 2002–03, (b) 2003–04 and (c) 2004–05; and if he will make a statement. [82959]

  Dr. Moonie
  [holding answer 25 November 2002]: Outreach is a Youth and Community project, administered by the Army Cadet Force Association. The project receives funding from three separate Government Departments: the Ministry of Defence, the Home Office and the Department for Education and Skills. Funding for the project has been confirmed between 2001–02, 2002–03 and 2003–04. A final
  336W
  decision on the level of funding for 2004–05 has yet to be made. The funding currently allocated by these Departments is as follows:

  £000

  Financial year

  Ministry of Defence

  Home Office

  Department for Education and Skills

  2001–02

  60

  60

  20

  2002–03

  60

  60

  34

  2003–04

  60

  60

  34

  PFI Contracts
  Mr. Hancock
  To ask the Secretary of State for Defence how much has been spent on the PFI contracts for(a) the Germany white fleet, (b) MHE vehicles and (c) the RAF white fleet; when the contracts were completed; and if he will make a statement. [82258]

  Mr. Ingram
  Spend and completion dates for the specified PFI contracts are as follows:

  Germany white fleet—total spend to date £87.8 million; the contract is due for completion in March 2004.

  MHE Vehicles—total spend was £16.4 minion; the contract was completed in August 2002.

  RAF white fleet—total spend to date £65 million; the contract has been

  extended to run until negotiations for its re-let are concluded.

  Mr. Hancock
  To ask the Secretary of State for Defence how much has been spent on the PFI contracts for(a) the hazardous stores information system, (b) the Yeovilton family quarters, (c) DFTS, (d) electronic messaging service (Armymail), (e) the Hawk simulator, (f) Tidworth water and sewerage, (g) DHFS (Helicopter Flying School) and (h) TAFMIS (IT); whether the contracts are on schedule; and if he will make a statement. [82266]

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

  Self-inflicted Injuries
  Mr. Kevin McNamara
  To ask the Secretary of State for Defence how many(a) members and (b) employees of each of Her Majesty's armed forces are perceived to have died through self-inflicted injuries in (i) Great Britain, (ii) Northern Ireland, (iii) Germany and (iv) other overseas postings in each year since 1990. [80684]

  Dr. Moonie
  Between 1 January 1990 and 31 December 2001 there have been 326 coroner confirmed suicides and coroners' open verdicts recorded for serving members of the Regular Armed Forces. No information is centrally held on suicides among civilian employees of her Majesty's Armed Forces. The following table breaks these down by location and year, and includes 285 coroner confirmed suicides and 41 open verdicts. Suicide and open verdicts for 1995 and later are subject to change as outstanding coroners' verdicts are confirmed. This could lead to significant increases, particularly for 1999 and later.
  337W

  Suicides and open verdicts: Regular Armed Forces personnel by location:1 January 1990 to 31 December 20011

  Location

  Year of death

  Great Britain2

  Northern Ireland

  Germany (BAOR)

  Other

  Grand total

  1990

  32

  3

  8

  1

  44

  1991

  24

  2

  8

  5

  39

  1992

  17

  4

  9

  3

  33

  1993

  23

  2

  5

  2

  32

  1994

  19

  3

  6

  2

  30

  1995

  14

  8

  4

  3

  29

  1996

  18

  3

  2

  3

  26

  1997

  22

  1

  2

  0

  25

  1998

  12

  0

  4

  0

  16

  1999

  16

  0

  1

  0

  17

  2000

  22

  1

  1

  3

  27

  2001

  7

  0

  1

  0

  8

  Grand total

  226

  27

  51

  22

  326

  1 Figures for suicides and open verdicts are subject to revision as further coroner's verdicts are reported to DASA

  2 Great Britain included UK waters and North Atlantic

  Note:

  As at 15 November 2002

  Service Careers
  Mr. Keetch
  To ask the Secretary of State for Defence what percentage of armed forces personnel who sign on for 22 years reached the 22-year point of their service in each of the last 15 years. [82119]

  Dr. Moonie
  [holding answer 25 November 2002]: It is not possible to identify the original population who signed on for 22 years and as a result figures cannot be provided as percentages. The number of United Kingdom regular other ranks personnel who have left the armed forces having served 22 years or more are as follows.

  Financial year

  Naval1

  Service Army2

  RAF3

  1986–87

  -

  2,266

  524

  1987–88

  -

  2,316

  523

  1988–89

  -

  2,259

  518

  1989–90

  -

  1,950

  538

  1990–91

  -

  1,852

  543

  1991–92

  -

  2,134

  658

  1992–93

  -

  2,695

  698

  1993–94

  -

  2,997

  628

  1994–95

  -

  2,459

  412

  Submarine

  Class

  Commissioned date (a)

  Decommissioned date (b)

  Sold for continued operational service (c)

  Scrapped (d)

  Cachalot

  SSK

  —

  1980

  —

  1980

  Finwhale

  SSK

  —

  1988

  —

  1988

  Grampus

  SSK

  —

  1980

  —

  1980

  Narwhal

  SSK

  —

  1983

  —

  11983

  Porpoise

  SSK

  —

  1982

  —

  11985

  Sealion

  SSK

  —

  1987

  —

  1990

  Walrus

  SSK

  —

  1986

  —

  1987

  Oberon

  SSK

  —

  1986

  —

  1991

  Olympus

  SSK

  —

  1989

  21989

  —

  Orpheus

  SSK

  —

  1991

  —

  11991

  Odin

  SSK

  —

  1991

  —

  1991

  Onslaught

  SSK SSK

  —

  1991

  —

  1991

  Onyx

  SSK SSK

  —

  1991

  —

  1992

  Otter

  SSK

  —

  1992

  —

  31992

  Oracle

  SSK

  —

  1992

  —

  41992

  Osiris

  SSK

  —

  1992

  21992

  —

  338W

  Financial year

  Naval1

  Service Army2

  RAF3

  1995–96

  —

  1,935

  349

  1996–97

  73

  1,486

  373

  1997–98

  38

  1,440

  310

  1998–99

  31

  1,490

  323

  1999–2000

  45

  1,690

  346

  2000–01

  44

  1,727

  367

  2000–02

  50

  1,782

  457

  Notes:

  1. The naval service data shown include all exit reasons after the 22-year point and include five personnel who signed on for more than 22 years originally. Only six years of back data are available. These figures include RM and QARNNS.

  2. For the army the personnel involved will have joined between 1965 and 1980. During this period all soldiers signed on for a 22-year engagement. There have been some amendments to the 22-year engagement which are explained as follows:

  (a) From 1952 to 1957. The 22-year engagement was introduced on 1 May 1952. All soldiers enlisting on this engagement had the right to opt out at the end of three years' service or any subsequent period of three years. The right to premature release on repayment, which had been introduced in 1948, was continued.

  (b) From 1957. With effect from 1 October 1957, the three-year option was abolished apart for entrants into certain services and the foot guards.

  (c) From 1969. From 1 April 1969,the three-year option was reintroduced, except for certain skilled employments.

  Soldiers who signed up for 22 years but were commissioned before the end of the engagement period and have subsequently served additional years have not been included in these totals. The 22-year period has no special significance once a soldier has gained a 'Late Entry' commission.

  3. For RAF airmen the 22-year exit point is the first exit point at which they receive an immediate pension on exit. There are three further option points to which personnel can continue to serve-Age 47, Length of Service 30 and Age 55. Eligibility for further service to these points will be dependent on achieving certain ranks.

  Submarines
  Mr. Gordon Prentice
  To ask the Secretary of State for Defence when and which submarines were(a) commissioned, (b) decommissioned, (c) sold for continuing operational use and (d) scrapped since 1980. [82550]

  Dr. Moonie
  The submarines that have been commissioned, decommissioned, sold for continuing use and scrapped since 1980 are:
  339W

  Submarine

  Class

  Commissioned date (a)

  Decommissioned date (b)

  Sold for continued operational service (c)

  Scrapped (d)

  Otus

  SSK

  —

  1992

  —

  1992

  Ocelot

  SSK

  —

  1992

  —

  31992

  Opportune

  SSK

  —

  1992

  —

  1992

  Dreadnought

  SSN

  —

  51983

  —

  —

  Valiant

  SSN

  —

  51994

  —

  —

  Warspite

  SSN

  —

  51990

  —

  —

  Resolution

  SSBN

  —

  51994

  —

  —

  Repulse

  SSBN

  —

  51996

  —

  —

  Renown

  SSBN

  —

  51996

  —

  —

  Revenge

  SSBN

  —

  51992

  —

  —

  Churchill

  SSN

  —

  51990

  —

  —

  Conqueror

  SSN

  —

  51991

  —

  —

  Courageous

  SSN

  —

  61992

  —

  —

  Swiftsure

  SSN

  —

  51991

  —

  —

  Splendid

  SSN

  1981

  —

  —

  —

  Trafalgar

  SSN

  1983

  —

  —

  —

  Turbulent

  SSN

  1984

  —

  —

  —

  Tireless

  SSN

  1985

  —

  —

  —

  Torbay

  SSN

  1987

  —

  —

  —

  Trenchant

  SSN

  1989

  —

  —

  —

  Talent

  SSN

  1990

  —

  —

  —

  Upholder

  SSK

  1990

  1994

  7—

  —

  Unseen

  SSK

  1991

  1994

  2000

  —

  Unicorn

  SSK

  1993

  1994

  2001

  —

  Ursula

  SSK

  1992

  1994

  8—

  —

  Triumph

  SSN

  1991

  —

  —

  —

  Vanguard

  SSBN

  1993

  —

  —

  —

  Victorious

  SSBN

  1995

  —

  —

  —

  Vigilant

  SSBN

  1996

  —

  —

  —

  Vengeance

  SSBN

  1999

  —

  —

  —

  1 Used for target practice by MOD.

  2 Sold to Canada.

  3 Preserved in a museum.

  4 Sold for use as spares for overseas submarines.

  5 Stored afloat.

  6 Exhibit in HMNB Devonport museum.

  7 Reactivation work being carried out pending handover to Canada.

  8 Undergoing sea trials pending handover to Canada.

  Note:

  The four Swiftsure Class Submarines, HMS Sovereign, HMS Syperb, HMS Sceptre and HMS Spartan are not shown since all were commissioned prior to 1980, and are still in service with the Royal Navy.

  Timber
  Norman Baker
  To ask the Secretary of State for Defence what species of timber have been or are being procured for the accommodation and offices of the Colchester Garrison; who the suppliers of that timber were; and whether all the timber used or planned to be used meets the Government's requirement to procure timber from legal and sustainable sources. [82856]

  Mr. Ingram
  It is too early in the design development process to be specific about the materials to be used in the construction.

  However, the Ministry of Defence places a contractual obligation on its suppliers to comply with the Government's policy on the supply or consumption of timber and products containing wood.

  Norman Baker
  To ask the Secretary of State for Defence if he will list all suppliers of timber-based board products and furniture to his Department in the last 12 months; and the total value of those items procured. [82857]
  340W
  Mr. Ingram
  Information on timber procurement is not currently collected in the form requested. In August, the Ministry of Defence introduced a new condition of contract, which places an express contractual obligation on its suppliers to comply with the Government's policy on the supply or consumption of timber and products containing wood, and in addition, to supply data to verify that compliance.

  Data on timber procurement, generated as a result of the new condition of contract, will be used to inform the process of sustainability monitoring and reporting currently being developed as part of the departmental Sustainable Development Strategy.

  US Aircraft
  Mr. Letwin
  To ask the Secretary of State for Defence what representations he has made to the Pentagon about the use of US aircraft by Israel in the occupied territories. [82588]

  Mr. Ingram
  [holding answer 25 November 2002]: My right hon. Friend the Secretary of State for Defence has made no such representations.
  341W

LORD CHANCELLOR'S DEPARTMENT

  Divorce (Religious Marriages)
  Mr. Dismore
  To ask the Parliamentary Secretary, Lord Chancellor's Department when the Family Procedure Rules Committee will consider the Rules of Court required to give effect to the Divorce (Religious Marriages) Act 2002. [83352]

  Ms Rosie Winterton
  It is intended that draft rules will be considered by the Rule Committee shortly and that the provisions of the Act will be brought into force in January or February 2003.

  Drug Courts
  John Mann
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many JPs have direct experience of drug courts. [82882]
  342W
  Yvette Cooper
  The information requested is not readily available and could be obtained only at a disproportionate cost.

  Junior Barristers
  Mr. Jenkins
  To ask the Parliamentary Secretary, Lord Chancellor's Department what recent representations he has received on the effect of changes in levels of public funding on the number of junior barristers there will be in five years' time. [82131]

  Ms Rosie Winterton
  As part of the current review of the Family Graduated Fees Scheme, both the Bar Council and the Family Law Bar Association have raised concerns about the levels of fees and the potential impact on the number of future junior barristers. My officials are working closely with the Bar on these matters.

  No other such representations have been received on this issue.

HEALTH

  Child Care
  Mr. Allen
  To ask the Secretary of State for Health what proposals he has to improve the(a) pay, (b) conditions, (c) training and (d) career prospects of staff in residential care establishments for children. [80473]

  Jacqui Smith
  The Government do not have direct responsibility for pay and career progression within social care. These are the responsibility of the individual employers. However we are taking a lead in developing partnerships with employers.

  The national social care recruitment campaign aims to raise awareness about the type of work social workers and social care staff actually do and the career prospects available across all aspects of social care work, including residential child care.

  The National Minimum Standards that the National Care Standards Commission is using to register and inspect children's homes includes standards for training and qualifications for residential child care staff. These start with induction training that is to be undertaken within six weeks of commencing employment and leading through foundation training to the Level 3 Caring for Children and Young People National Vocational Qualification (NVQ).

  The standards also state that the registered manager of a children's home should have either a Level 4 Care NVQ or a Diploma in Social Work (DipSW) qualification and a Level 4 NVQ in Management. The inclusion of specific qualifications within the national minimum standards helps to raise the profile of residential child care staff and lay down a career path for them.

  Funding is available through the training support programme grant and the training strategy implementation fund to help staff undertake these various levels of training. Funding is also available to enable social workers within children's homes to undertake further specialist training in the form of a post qualification in child care award.

  Ambulance Personnel
  Mr. Jenkins
  To ask the Secretary of State for Health what the average age of retirement for ambulance personnel has been over the last five years. [82175]

  Mr. Hutton
  The information requested in not collected centrally.

  Mr. Jenkins
  To ask the Secretary of State for Health what the average pension received by an ambulance worker is; and what percentage of final salary an ambulance worker is entitled to after 30 years' service. [82178]

  Mr. Hutton
  The information requested is not collected centrally. Pension entitlement after 30 years service would normally be calculated on 30/80ths of final salary.

  Anti-TNF Alpha
  Mr. Evans
  To ask the Secretary of State for Health (1) what guidelines he has issued on the dispensing of the drug Anti-TNF Alpha; and if he will make a statement; [82206]

  (2) how many people have been prescribed the drug Anti-TNF Alpha; and how many are on waiting lists for the drug, broken down by health authority area. [82205]

  Mr. Lammy
  Guidelines on the dispensing of anti-TNF drugs were issued in March 2002 by the Iindependent National Institute for Clinical Excellence (NICE). They recommended that consultant rheumatologists, or consultant paediatric rheumatologists in the case of juvenile idiopathic arthritis, should prescribe these drugs, in accordance with the guidelines set out by the British Society for Rheumatology and British Paediatric Rheumatology Group respectively.

  We do not hold information centrally about drugs prescribed and dispensed in hospitals, which is where these drugs are supplied. Waiting list data is not collected for individual drugs.

  On 5 December 2001, the Government announced that it would meet its manifesto commitment to ensure that patients receive drugs and treatments recommended by NICE on the National Health Service if deemed appropriate by their clinicians. Directions have been issued obliging health authorities and primary care trusts to provide appropriate funding for recommended treatments.

  From 1 January 2002 the NHS will have three months from the date of publication of each technology appraisal guidance to provide funding, so that clinical decisions made by doctors involving NICE recommended treatments or drugs can be funded.

  Artificial Limbs
  Mr. Letwin
  To ask the Secretary of State for Health if he will make a statement on the provision of modern artificial limbs by the NHS to those whose arms require replacement. [82574]

  Mr. Lammy
  [holding answer 25 November 2002]: Artificial limbs are provided free of charge on the national health service. Each limb needs to be individually made and fitted for each patient. The range of NHS artificial limbs includes virtually everything that is available on the international market.

  Asthma
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many children suffered from asthma in each year since 1997. [82700]

  Jacqui Smith
  The information requested is not collected centrally. However information on the number of hospital episodes by age and sex in National Health Service hospitals where the primary diagnosis is asthma from 1996–97 to 2000–01 is shown in the tables.

  The International Classification of Disease 10 codes J45–J46 has been used.
  345W

  Ordinary admissions and day cases combined: completed episode primary diagnosis 493(ICD9 code) Diagnosis: Asthma 345–346 (ICD10)

  Age

  Male

  Female

  Not known

  Persons

  England 1996–1997

  0–4

  17,660

  8,928

  215

  26,803

  5–14

  7,449

  4,893

  129

  12,471

  15–44

  6,563

  13,549

  205

  20,317

  Unknown

  5

  13

  —

  18

  England 1997–1998

  0–4

  14,114

  6,888

  59

  21,061

  5–4

  7,733

  5,085

  67

  12,885

  15–44

  7,141

  14,017

  113

  21,271

  Unknown

  8

  4

  1

  13

  England 1998–1999

  0–4

  13,119

  6,306

  6

  19,431

  5–14

  7,190

  4,702

  4

  11,896

  15–44

  6,652

  13,590

  3

  20,245

  Unknown

  2

  7

  1

  10

  England 1999–2000

  0–4

  11,589

  5,896

  8

  17,493

  5–14

  7,091

  4,606

  6

  11,703

  15–44

  6,351

  12,424

  21

  18,796

  Unknown

  7

  13

  —

  20

  England 2000–01

  0–4

  9,676

  4,790

  114

  14,580

  5–14

  6,916

  4,184

  47

  11,147

  15–44

  6,219

  11,763

  11

  17,993

  Unknown

  22

  33

  2

  57

  Mr. Paul Marsden
  To ask the Secretary of State for Health what steps his Department is taking to promote the use of controlled medication for children with asthma; and what support is available to reduce the stress caused by the illness. [82695]

  Jacqui Smith
  The National Institute for Clinical Excellence (NICE) has produced guidance on asthma inhalers for children. In September 2000 it issued guidance on the use of inhalers for children under five. NICE also published guidance on inhaler devices for older children, age range five to 15, on 11 April 2002.

  Patients with asthma are able to access the full range of National Health Service support services in both primary and secondary care settings.

  An analysis of hospital episode statistics shows that the number of hospital admissions for asthma has been falling over the last five years.

  Year

  1996 to 1997

  1997 to 1998

  1998 to 1999

  1999 to 2000

  2000 to 2001

  Admissions

  78,036

  74,000

  69,824

  66,054

  60,376

  Business Plan
  Matthew Taylor
  To ask the Secretary of State for Health, in which document he publishes his Department's business plan targets; and if he will make a statement. [80641]

  Mr. Lammy
  The priorities and targets for the next three years for the National Health Service and social services are set out in a document entitled "Improvement, Expansion and Reform: The Next 3 Years Priorities and Planning Framework 2003–2006". This document can be found on the Department's website.

  Work is also currently under way on the development of a business plan for the Department for the three-year period 2003–06; to ensure delivery of the targets contained in the Department's public service agreement. At the end of the process a Departmental business plan detailing the Department's work programme for the three-year period will be produced.

  Care Home Staff
  Mr. Burstow
  To ask the Secretary of State for Health when he plans to lay before the House the Statutory Instrument to extend the time limit for staff who were employed in care homes immediately before 1 April for obtaining checks from the CRB. [82966]

  Jacqui Smith
  [holding answer 25 November 2002]: A Statutory Instrument will be laid before Parliament as soon as possible.

  Child Pornography
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will make a statement on increasing resources for child protection in connection with child pornography material seized by police. [83177]

  Jacqui Smith
  Between 1996–97 and 2002–03, the Government increased social services funding by more than 20 per cent. in real terms, and will make further annual average real terms increases available of 6 per cent. between 2003–4 and 2005–6. The Government is spending £11 billion on personal social services this year, 2002–03. It is, however, up to local authorities with social services responsibilities, in the light of their assessments of children's needs within their area, to decide how to allocate this money.

  Children (National Service Framework)
  Mr. Paul Marsden
  To ask the Secretary of State for Health when he expects the National Service Framework for children to be published. [83174]

  Jacqui Smith
  It is intended that the children's national service framework (NSF) will be publishing the hospital standards, as announced in response to the
  347W
  Bristol Royal Infirmary Inquiry. We will also be publishing a second document signposting the likely areas for inclusion in the final NSF to assist with local National Health Service planning.

  Children in Care (Crime)
  Mr. Paul Marsden
  To ask the Secretary of State for Health what assessment he has made of the likelihood of children in care being convicted and sent to prison as young adults. [82749]

  Jacqui Smith
  Our latest data show that 10.4 per cent. of children between 10 and 17, who have been in the care of the local authority for a year or more, have received a reprimand, final warning or conviction. This represents a rate that is three times greater than for all children. Hence, the Department has a public service agreement target to narrow the gap in offending between the looked after children and their peers.

  The achievement of this target is underpinned by the Quality Protects programme, which has been supported by a grant of £885 million over five years from 1999 to 2004. This major programme seeks to ensure that looked after children gain the maximum life chance benefits from educational opportunities, health care and social care and thus have the same opportunities as their peers to lead fulfilling lives.

  Chronic Fatigue Syndrome
  Phil Sawford
  To ask the Secretary of State for Health (1) what progress is being made into the biomedical research on chronic fatigue syndrome and ME; and when NICE will provide guidance on management and treatment for patients with ME; [80421]

  (2) when the Medical Research Council will report on their strategy for advancing biomedical and health services research on chronic fatigue syndrome and ME. [80424]

  Jacqui Smith
  The independent group, set up by the Medical Research Council (MRC) to develop a broad strategy for advancing biomedical and health services research on chronic fatigue syndrome/myalgic encephalomyelitis (CFS/ME), hope to complete their recommendations in time for submission to the MRC in March 2003. But the group has recognised that this is a tight timetable, and has agreed not to compromise the integrity and quality of their report to meet the timeframe proposed, reserving the right to extend the timescale if necessary.

  The Department endorses the view of the CFS/ME independent working group report that there should be no doubt this is a chronic illness and that health and social care professionals should recognise it as such.

  We are still considering whether to ask the National Institute for Clinical Excellence to provide guidance on management and treatment for patients with CFS/ME. In the meantime we have, through both the chief executive's bulletin and the GP Bulletin, made the National Health Service aware of the action for CFS/ME publication "Guidance on the management of CFS/ME". This is a useful summary of the issues.

  Delayed Discharges
  Mr. Amess
  To ask the Secretary of State for Health how many delayed discharges there were in(a) the first six months of 2002 and (b) 2001 at Southend General Hospital. [83586]

  Mr. Lammy
  Information on delayed discharges is collected centrally and is placed in the Library but not at trust level.

  The data relate to the number and rate of people in acute hospital beds with delayed discharge at a fixed point in time.

  Before 1 April 2002 data were collected at the old health authority level. Health authorities were disbanded on 1 April 2002 and replaced with primary care trusts. Health authority level data up to and including Quarter 4 2001–02, March 2002, is available.

  For Quarter 1 2002–03, up until the end of June 2002, primary care trust level data are available.

  Dementia (Care Homes)
  Angela Watkinson
  To ask the Secretary of State for Health what plans he has for funding the mental nursing needs of people suffering from dementia in care homes. [82483]

  Jacqui Smith
  National health service funded nursing care applies equally to care home residents, regardless of the condition they have. The important issue is the level of input into their care from a registered nurse. This applies to mental health needs as well as to the physical needs of the resident.

  Departmental Grants
  Mr. McLoughlin
  To ask the Secretary of State for Health if he will list the grants funded by his Department for which individual members of the public and organisations may apply; and if he will make a statement as to(a) the total of such funding in the last financial year, (b) the total number of awards and (c) their administrative costs. [82199]

  Mr. Lammy
  The Department makes grants to individuals and organisations but the information requested is not held centrally.

  The administration of grants is carried out by a number of different units within the Department, to which a range of staff make a contribution. It is not possible to provide an accurate estimate of these costs.

  Diabetes
  Miss McIntosh
  To ask the Secretary of State for Health (1) when he will publish the diabetes National Service Framework implementation plan; and if he will make a statement; [83338]

  (2) when a comprehensive diabetic retinopathy screening programme will be in place in England. [83339]

  Mr. Lammy
  We shall be publishing the delivery strategy for the diabetes national service framework in the next few weeks. A national target for diabetic retinopathy screening is in the planning and priorities framework, "Improvement, Expansion and Reform", which sets the priorities for the national health service for the next three years. The target requires that 80 per cent. of people with diabetes will be offered screening for the early detection, and treatment if needed, of diabetic retinopathy by 2006, rising to 100 per cent. coverage of those at risk of retinopathy by the end of 2007.

  Effective length of wait from receipt of GP written referral request to first outpatient attendance (weeks) ophthalmology, quarter 2 2002 to 2003

  Strategic Health Authority

  Proportion of first outpatient attendances seen within four weeks

  0 to 4

  4 to 13

  13 to 17

  17 to 21

  21 to 26

  over 26

  Avon, Gloucestershire and Wiltshire

  2,926

  3,744

  1,266

  663

  105

  7

  33.6

  Bedfordshire and Hertfordshire

  1,278

  1,708

  730

  555

  280

  108

  27.4

  Birmingham and the Black Country

  2,085

  4,577

  1,696

  820

  271

  54

  21.9

  Cheshire and Merseyside

  3,669

  3,798

  1,547

  929

  561

  99

  34.6

  County Durham and Tees Valley

  460

  1,537

  384

  240

  166

  55

  16.2

  Coventry, Warwickshire, Herefordshire and Worcestershire

  758

  1,842

  839

  738

  789

  50

  15.1

  Cumbria and Lancashire

  2,280

  2,757

  956

  703

  534

  23

  31.4

  Essex

  1,328

  2,540

  641

  458

  341

  69

  24.7

  Greater Manchester

  2,812

  4,298

  1,322

  1,015

  879

  64

  27.1

  Hampshire and Isle of Wight

  1,114

  2,934

  939

  480

  304

  2

  19.3

  Kent and Medway

  978

  1,779

  787

  625

  1,115

  0

  18.5

  Leicestershire, Northamptonshire and Rutland

  728

  1,492

  745

  650

  660

  55

  16.8

  Norfolk, Suffolk and Cambridgeshire

  3,247

  3,581

  1,181

  837

  562

  68

  34.3

  North and East Yorkshire and North Lincolnshire

  1,469

  2,034

  575

  506

  356

  27

  29.6

  North Central London

  2,108

  6,608

  531

  448

  360

  76

  20.8

  North East London

  735

  1,156

  484

  463

  130

  7

  24.7

  North West London

  1,279

  2,036

  259

  275

  43

  0

  32.9

  Northumberland, Tyne and Wear

  990

  3,839

  644

  224

  103

  9

  17.0

  Shropshire and Staffordshire

  1,554

  1,531

  523

  465

  861

  190

  30.3

  Somerset and Dorset

  871

  1,949

  873

  618

  164

  52

  19.2

  South East London

  950

  2,470

  800

  655

  589

  184

  16.8

  South West London

  966

  2,185

  383

  171

  143

  4

  25.1

  South West Peninsula

  1,447

  2,615

  526

  720

  784

  23

  23.7

  South Yorkshire

  2,119

  2,785

  670

  252

  67

  1

  36.0

  350W
  Mr. Beith
  To ask the Secretary of State for Health what steps he has taken to make insulin pump therapy more widely available for the treatment of diabetes in children. [83464]

  Mr. Lammy
  Insulin pump therapy is not suitable for every person who requires insulin to control their diabetes. The National Institute for Clinical Excellence has been asked to provide an appraisal of the clinical and cost effectiveness of insulin pump therapy. This is expected to be published in February 2003.

  Eye Specialists
  Mr. Paul Marsden
  To ask the Secretary of State for Health which health authorities do not offer patients an appointment to see an eye specialist within one month. [83188]

  Mr. Hutton
  Figures are not available to assertain which health authorities do not offer patients an appointment to see an eye specialist within one month.

  The table shows the effective length of wait from receipt of a general practitioner (GP) written referral request to first outpatient attendance in weeks for the specialty ophthalmology, quarter two 2002–03, by Strategic Health Authority.
  351W

  Effective length of wait from receipt of GP written referral request to first outpatient attendance (weeks) ophthalmology, quarter 2 2002 to 2003

  Strategic Health Authority

  Proportion of first outpatient attendances seen within four weeks

  Surrey and Sussex

  2,307

  4,037

  1,593

  1,055

  794

  0

  23.6

  Thames Valley

  906

  2,690

  957

  988

  286

  53

  15.4

  Trent

  2,078

  4,158

  916

  531

  406

  39

  25.6

  West Yorkshire

  1,774

  2,868

  953

  857

  394

  54

  25.7

  Foreign Nurse Recruitment
  Mr. Burstow
  To ask the Secretary of State for Health what means exist for overseas nurses recruited by agencies to report the failure of their agency to comply with the ethical foreign nurse recruitment policy. [82964]

  Mr. Hutton
  Overseas nurses are able to contact the international nurses advice line for further advice and also to report their agency if they feel that the agency is not complying to the ethical recruitment policy.

  The nurses are also able to contact Work Permits UK and the Department of Trade and Industry depending on the nature of their complaint.

  Nurses who are members of unions may also seek advice from these bodies.

  Home Care Charges
  Mr. Best
  To ask the Secretary of State for Health what action he is taking to monitor changes in home care charges. [82810]

  Jacqui Smith
  Monitoring of the implementation of this policy is being carried out by the Department's social services inspectorate as part of a wider in-year monitoring programme. Councils were asked to indicate the stage of preparation reached at 31 May 2002 in implementing the policy. This exercise was repeated in Autumn 2002 and the results are currently being processed and should be available at the end of December 2002. The process will be repeated again in Spring 2003.

  Long-term Care
  Mr. Edwards
  To ask the Secretary of State for Health if he will change his policy on free provision of long-term nursing personal care. [82264]

  Jacqui Smith
  The Government introduced national health service funded nursing care in care homes on 1 October 2001. We do not intend to make personal care free.

  In England, in our response to the Royal Commission in the NHS plan, we stressed that personal care for everyone would be costly, and would not be guaranteed to lead to service improvements. Instead, we will invest £1 billion in social care services for older people by 2006. This will improve access to social care services, expand the capacity of these services and increase the choice of services available to older people, stabilise the care home market, and ensure that delayed discharge is reduced to a minimum.

  Macular Degeneration
  Mr. Letwin
  To ask the Secretary of State for Health whether NICE has made a final decision on the suitability of PDT for the treatment of macular disease. [82597]

  Nick Harvey
  To ask the Secretary of State for Health when NICE will issue final guidance on the use of photodynamic therapy for age-related macular degeneration; and if he will make a statement. [82744]

  Mr. Lammy
  [holding answer 25 November 2002]: The National Institute for Clinical Excellence (NICE) appraisal of photodynamic therapy has been extended to allow further consideration of the draft guidance. We expect that guidance could be available to the national health service in January 2003, providing there are no appeals.

  In the meantime, guidance issued in August 1999 to all NHS bodies asked them to continue with local arrangements for the managed introduction of new technologies where guidance from NICE is not available at the time the technology first became available. These arrangements should involve an assessment of all the relevant factors including the available evidence on effect. The local introduction of photodynamic therapy under these arrangements should be funded locally.

  Meals on Wheels
  Mr. Battle
  To ask the Secretary of State for Health how many people in Leeds West were in receipt of meals on wheels in each of the last five years. [83483]

  Jacqui Smith
  In 2000–01 a reported 5,450 clients in Leeds metropolitan district received meals in their home as part of community-based services provided or commissioned by the council with social service responsibilities based on the referrals, assessments and packages of care return. Comparable data prior to 2000–01 is not readily available.

  Data for 2001–02 are not yet available.

  Mental Health
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many young remand prisoners have mental health problems; and what steps he is taking to assist them. [82750]

  Jacqui Smith
  A survey carried out by the Office for National Statistics in 1997 estimated that 95 per cent. of all young offenders in prison had some form of mental disorder. In 2000, the most recent year for which statistics are available, 96 prisoners—both remand and sentenced-between the ages of 17 and 20 were transferred to hospital on mental health grounds.
  353W
  All prisons holding juveniles or young offenders are involved in work to implement the improvements set out in Changing the Outlook, a Strategy for Developing and Modernising Mental Health Services in Prisons, published in December 2001. In addition, those prisons holding persons judged to have the greatest mental health needs will be part of the prison mental health in-reach project by March 2004.

  Dr. Evan Harris
  To ask the Secretary of State for Health when he expects to publish a mental health bill; and if he will make a statement. [83806]

  Jacqui Smith
  A draft Mental Health Bill and consultation document was published on 25 June 2002. The consultation exercise closed on 16 September and

  1998 to 1999

  1999 to 2000

  2001–2002

  2001 to 2002

  Hearing Impairment

  New specialist workers

  133

  123

  146

  195

  Other training for specialist workers

  635

  538

  468

  527

  Awareness training for generalist or non-specialist workers

  4,145

  3,294

  5,213

  5,639

  Total

  4,913

  3,955

  5,827

  6,361

  Deaf Blind Impairment

  New specialist workers

  16

  86

  81

  130

  Other training for specialist workers

  290

  143

  185

  293

  Awareness training for generalist or non-specialist workers

  1,166

  1,330

  1,811

  2,391

  Total

  1,472

  1,559

  2,077

  2,814

  Deaf Children (Mental Health)
  Mr. Paul Marsden
  To ask the Secretary of State for Health what residential care provision is available for deaf children with mental health problems. [82696]

  Jacqui Smith
  The Department does not hold this data centrally.

  NHS Purchasing
  Sandra Gidley
  To ask the Secretary of State for Health how many department civil servants and staff of NHS purchasing offices have been to conferences paid for by pharmaceutical companies in each of the last three years for which figures are available. [80546]

  Mr. Lammy
  This information is not held centrally and could be provided only at disproportionate cost.

  Nursing Student Bursaries
  Dr. Evan Harris
  To ask the Secretary of State for Health what the average value of the nursing student bursary is in terms of pounds per hour. [81684]

  Mr. Hutton
  Professional registration as a nurse is achieved following successful completion of a course of higher education at either diploma of higher education or degree level. The status of trainees during their course is that of full-time students, not employees and as such they are not contracted for a specific number of hours. Overall, students are required to complete a minimum of 4.600 curricular hours, usually over a period of three
  354W
  we are currently considering almost 2,000 replies. We intend to introduce a Bill as soon as parliamentary time allows.

  Mental Health (Deaf Children)
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many(a) sign language workers, (b) social workers, (c) psychiatrists with sign language skills and (d) specialist psychiatrists for deaf children there were in each year since 1997. [82698]

  Mr. Hutton
  The information requested is not available.

  Data collected through the training support programme grant since 1998–99 shows that the following numbers of social care workers have undertaken training to improve their skills when working with deaf and deafblind service users. It is not known whether or not they areworking with deaf children

  years. Over that period the average financial support provided for those studying at diploma level, who make up the majority of the nursing and midwifery student population, is currently around £18,600, the equivalent of over £4.00 per hour of study.

  Overseas Nurses
  Mr. Lilley
  To ask the Secretary of State for Health how many nurses working for the NHS were trained abroad, for each year since 1990. [80713]

  Mr. Hutton
  The Department does not collect data about the number of nurses working in the National Health Service who were trained abroad. However, the Nursing and Midwifery Council (NMC) publishes an annual statistical report which includes information about the number of nurses and midwives on the NMC register, including new registrations from abroad. Data about the number of admissions to the register each year for nurses and midwives who trained in the United Kingdom and European Community/Non EC countries for the period 1989–90 to 2000–02 can be found on the NMC website at www.nmc-uk.orq.uk.

  This data shows the success of the Department's policy on international recruitment based on international agreements. Overall nurse numbers in the NHS work force have increased by an estimated 39,500 between September 1997 and March 2002.

  Paedophilia (Child Protection)
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many children have been taken into protective custody in connection with paedophilia in each year since 1997. [83176]

  Jacqui Smith
  The information requested is not held centrally.

  However, information is held centrally about the number of children looked after by local councils. From the year ending 31 March 2001, this information is collected by age and category of need, which records the main reason why the child requires assistance from his/her local social services department. One of the categories of need is abuse or neglect. However, this category spans all types of abuse and neglect and provides no information about the characteristics of the alleged abusers of the children.

  Prison Health Care
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will make a statement on the minimum health care standard to which prisoners are entitled. [83175]

  Jacqui Smith
  The prison and national health services aim, in partnership, to provide prisoners with access to the same range and quality of health services as the general public receives from the national health service. The current prison service performance standard on health services for prisoners is available at www.hmprisonservice.gov.uk

  Psychiatrists
  Mr. Paul Marsden
  To ask the Secretary of State for Health how many psychiatrists there were per 100,000 people in each year since 1992. [82692]

  Mr. Hutton
  As at 31 March 2002, there were 3,090 consultants within the psychiatry group, a ratio of 6.1 per 100,000 of population. This is a 24 per cent. expansion in the number of psychiatry consultants since 1997. There were also 2,801 doctors in training as at September 2001, a ratio of 5.7 per 100,000 of population. The group comprises child and adolescent psychiatry, forensic psychiatry, general psychiatry, old age psychiatry, psychotherapy and psychiatry of learning disability.

  Population figures are due to be updated shortly following publication of results from the 2001 population census. This will include a revised set of estimates for the years 1992 to 2000, but these figures are not yet available.

  Public Health Laboratory Service
  Mr. Burstow
  To ask the Secretary of State for Health what checks he will put in place to ensure NHS trusts correctly represent data on hospital-acquired infections once the Public Health Laboratory Service is abolished. [81717]

  Mr. Lammy
  Responsibility for co-ordinating surveillance of health care associated infections transfers from the Public Health Laboratory Service to 356W
  the Health Protection Agency in April 2003, but as the national system will remain unchanged no additional checks are needed.

  Quality Protects
  Mr. Paul Burstow
  To ask the Secretary of State for Health what the ringfenced budget allocations were for(a) IT projects, (b) disabled children, (c) leaving care, (d) RDWs and (e) the main grant for Quality Protects for the last three years; and what the planned expenditure is for each of the next three years. [82767]

  Jacqui Smith
  The table below shows the amounts ring-fenced in the last three years for improving access to information technology for children in and leaving care; services for disabled children and their families, implementing the Children (Leaving Care) Act 2000; the costs of regional development workers (RDWs); and the main programme grant. The level of personal social services funding for councils for 2003–04 to 2005–06 will be announced shortly as part of the local government settlement announcements.

  All figures in £ million

  2000 to 2001

  2001 to 2002

  2002 to 2003

  IT projects

  9.5

  Disabled children

  15

  15

  Leaving Care1

  128

  298

  RDWs2

  0.75

  1

  1

  Main grant

  117.75

  147.25

  138

  Notes:

  1 The ring-fence for Leaving Care in 2001–02 covered only the second half of the year, i.e. from implementation of the Children (Leaving Care) Act 2000 on 1 October 2001. Funding to assist councils in preparing for implementation was included in the main grant.

  2 As well as the costs of employing the RDWs and their assistants, the amount shown for RDWs also covers other development work including part funding for the Education Protects implementation team, who are helping councils implement the joint Department for Education and Skills and Department of Health Guidance on the Education of Children and Young People in Public Care.

  Schizophrenia
  Mr. Paul Marsden
  To ask the Secretary of State for Health what percentage of patients with schizophrenia suffered relapses within one year of receiving treatment in each year since 1997. [82699]

  Jacqui Smith
  The Department does not hold this information centrally.

  Tim Loughton
  To ask the Secretary of State for Health what progress has been made towards implementing NICE guidance on the use of atypical antipsychotic medicine for schizophrenia; and if he will make a statement. [83304]

  Mr. Lammy
  [holding answer 25 November 2002]: Detailed assessment of the implementation of individual items of National Institute for Clinical Excellence guidance is only possible at a local level. Comprehensive information is not collected centrally.

  Silicon Cosmesis
  Dr. Julian Lewis
  To ask the Secretary of State for Health whether, out of the baseline allocation for silicon cosmesis for artificial limbs(a) in 2001–02, £418,142 and (b) in 2002–03, £1,317,159 was not spent on such provision. [82279]

  Mr. Lammy
  [holding answer 21 November 2002]: Baseline allocations of £0.5 million in 2001–02, £1.5 million in 2002–03 and £2.0 million in 2003–04 were expected to be used for the provision of silicone cosmesis for artificial limbs. Spending on silicone cosmesis through the national health service purchasing and supply agency was £81,858 for 2001–02, and £182,841 so far in 2002–03. The baseline allocation for 2002–03 was for the whole financial year; the spending recorded so far relates to the first half of that year. It will not be possible to provide full-year spending figures for 2002–03 until after the end of that year.

  Specialised Health Services
  Mr. Burstow
  To ask the Secretary of State for Health who the members are of the small oversight review group that has been convened in order to consider questions from the review on commissioning specialised services from a national perspective; and whether the group has met. [82780]

  Mr. Lammy
  [holding answer 25 November 2002]: The following organisations were invited to send representatives to the 10 September national review group meeting:

  The Academy of Royal Medical Colleges

  The Royal College of Nursing

  The Joint Consultants' Committee

  Regional specialised commissioning groups

  Strategic health authorities

  Primary care trusts

  National health service trusts

  Patients' organisations

  Observers from Scotland, Wales and Northern Ireland.

DEPUTY PRIME MINISTER

  Commonhold and Leasehold Reform Act
  Mr. John Taylor
  To ask the Deputy Prime Minister whether, in the context of the Commonhold and Leasehold Reform Act 2002, existing and properly constituted management limited companies may convert themselves into RTMs, limited by guarantee, by special resolution; and what guidance he has issued on the changes that might need to be made to their memoranda and articles: [82544]

  Mr. McNulty
  Yes.

  Section 73(2) of the Act specifies that a company is a Right To Manage (RTM) company in relation to premises if:
  it is a private company limited by guarantee, and
  its memorandum of association states that its object, or one of its objects, is the acquisition and exercise of the right to manage the premises.
  358W
  Section 74 of the Act provides a power to prescribe the Memorandum and Articles of Association for a RTM company, and we are currently consulting on the form this prescription should take.

  Once the draft regulations have been finalised and brought into force, an existing company limited by guarantee could, by special resolution under the Companies Act 1985 change its objects clause to include the RTM object and adopt the prescribed Memorandum and Articles. In addition, the regulations may provide that certain of the prescribed memorandum and articles will have effect for an RTM company irrespective of whether or not it has adopted them.

  However, in order for a RTM company to actually exercise and acquire the right to manage for a building, the membership of that company and the premises itself must meet the qualifying conditions as laid down by sections 72–75 of the Act.

  Finally, while we have yet to produce guidance on RTM this will be available when the RTM provisions come into force. It will include all aspects of exercising and acquiring RTM.

  Mr. John Taylor
  To ask the Deputy Prime Minister when he intends to introduce regulations bringing Part 2 of the Commonhold and Leasehold Reform Act 2002 into operation. [82545]

  Mr. McNulty
  The first tranche of regulations on leasehold reform came into force on 26 July this year, making it is easier for leaseholders to buy the freehold of their property, extend their leases and seek the appointment of a new manager in tripartite leases.

  The Office of the Deputy Prime Minister proposes to make and lay the remaining regulations on Leasehold Reform in two stages, in spring and autumn 2003. Regulations on right to manage, safeguards against forfeiture, new powers for leasehold valuation tribunals and changes relating to contracts and major works will be laid in spring and should be operational by summer 2003. Regulations on accounting procedures will be laid by autumn next year and operational three months later.

  Affordable Housing
  Mr. Grieve
  To ask the Deputy Prime Minister how many units of affordable housing have been built in the Beaconsfield constituency in each of the last five years; and if he will make a statement. [82382]

  Mr. McNulty
  Figures for the Beaconsfield constituency are not held centrally, and could be provided only at disproportionate cost. The number of dwellings built by Registered Social Landlords and the local authority in south Buckinghamshire district in the last five years are shown in the following table:

  Year

  Number of dwellings

  1997–98

  6

  1998–99

  0

  1999–2000

  8

  2000–01

  26

  2001–02

  11

  Arson
  Mr. Pickles
  To ask the Deputy Prime Minister if he will make a statement on reasons for which data are not available beyond 2000 for the number of malicious fires attended by local authority fire brigades. [83456]

  Mr. Leslie
  The latest annual data were published in "Fire Statistics, UK, 2000" in February 2002. The Statistical Bulletin ("Fire Statistics Estimates, UK, 2001") covering the most recent data will be published as soon as it is available, as required under the ONS Code of Practice for National Statistics.

  The data in the bulletin are compiled from statistical returns covering some 950,000 fire-related incidents, and are subject to quality control procedures before inputting. The time taken to process and publish is not unusual for complex data collection exercises of this kind.

  Civil Partnership Registration
  Mr. Key
  To ask the Deputy Prime Minister what progress he is making with his analysis of the implications of civil partnership registration and associated rights and responsibilities; and if he will make a statement. [82484]

  Ms Hewitt
  I have been asked to reply.

  Civil partnership registration and associated rights and responsibilities raise a number of complex issues, which have prompted a growing debate within society.

  These issues potentially have significant financial and administrative implications. The Government is now examining the issues in detail and DTI co-ordinates this work across all Government Departments with an interest in the issues raised by civil partnerships.

  As you will understand, the Government cannot commit itself to any changes without conducting a comprehensive analysis of the relevant rights and responsibilities, to provide a better understanding of their potential impact.

  Clinical and Medical Waste
  Dr. Murrison
  To ask the Deputy Prime Minister if he will make a statement on the definition of clinical and medical waste in the context of special collections by local authorities. [81507]

  Mr. Meacher
  I have been asked to reply.

  Clinical waste is defined in "The Controlled Waste Regulations 1992" as any waste which consists wholly or partly of human or animal tissue, blood or other body fluids, excretions, drugs or other pharmaceutical products, swabs or dressings, or syringes, needles or other sharp instruments, being waste which unless rendered safe may prove hazardous to any person coming into contact with it; and any other waste arising from medical, nursing, dental, veterinary, pharmaceutical or similar practice, investigation, treatment, care, teaching or research, or the collection of blood for transfusion, being waste which may cause infection to any person coming into contact with it.
  360W
  Under the Environmental Protection Act 1990, local authorities are obliged to collect clinical waste generated in the home where the householder asks them to do so. Local authorities may make a charge for these collections. Where someone is receiving healthcare treatment at home, it is the responsibility of the healthcare professional to assess whether waste arising from their illness and treatment poses a risk of infection and should therefore be treated as clinical waste.

  Council Housing, Cherwell
  Tony Baldry
  To ask the Deputy Prime Minister if he will meet the hon. Member for Banbury and a delegation from Cherwell district council and representatives of local tenants groups to discuss the future of council housing in Cherwell. [83023]

  Mr. McNulty
  The future of Cherwell's council housing will be decided by the tenants and the councillors of the district council who are currently looking at the large scale voluntary transfer of stock option. As with all local authorities, options available for the future management of council housing include: the council retaining ownership and management of its housing stock, large/small scale voluntary transfer, arms length management and the Private Finance Initiative. The Community Housing Task Force have been working with Cherwell district council to help advise on the option appraisal process. At present a meeting would not bring forward any alternatives that have not already been covered.

  English Committee of Regions
  Mr Liddell-Grainger
  To ask the Deputy Prime Minister who the members are of the Committee for English Regions; who funds the Committee; and who is responsible for the Campaign for the English Regions. [82893]

  Mr. Leslie
  I am not aware of any organisation called the "Committee for English Regions". There is, however, a Regional Affairs Standing Committee and a EU Committee of the Regions. The former is funded by Parliament and its members are.

  Name

  Constituency

  Party

  Candy Atherton

  Falmouth & Cambourne

  Labour

  Henry Bellingham

  North West Norfolk

  Conservative

  Karen Buck

  Regent's Park & Kensington North

  Labour

  Louise Ellman

  Liverpool Riverside

  Labour

  Nigel Evans

  Ribble Valley

  Conservative

  Andrew George

  St Ives

  Liberal Democrat

  Norman Lamb

  North Norfolk

  Liberal Democrat

  John Mann

  Bassetlaw

  Labour

  Denis Murphy

  Wansbeck

  Labour

  Ian Pearson

  Dudley South

  Labour

  Lawrie Qinn

  Scarborough & Whitby

  Labour

  Anthony Steen

  Totnes

  Conservative

  Derek Wyatt

  Sittingbourne & Sheppey

  Labour

  The Chair is selected from the Chairman's Panel and will vary from meeting to meeting.
  361W
  The EU Committee of the Regions has 16 full members from England. It is funded by the EU. The full members from England are.

  Full Members

  Region

  Authority

  Party

  Derek Boden

  North West

  Bury (Metropolitan District)

  Labour

  Michael Davey

  North East

  Northumberland (County)

  Labour

  The hon. Joan Taylor

  East Midlands

  Nottinghamshire (County)

  Labour

  Muriel Barker

  Yorkshire & Humberside

  North East Lincolnshire (Unitary)

  Labour

  Albert Bore

  West Midlands

  Birmingham (Metropolitan District)

  Labour

  Ken Bodfish QBE

  South East

  Brighton & Hove (Unitary)

  Labour

  Dame Sally Powell DBE

  London

  Hammersmith and Fulham (London)

  Labour

  Margaret Eaton

  Yorkshire and Humberside

  Bradford (Metropolitan District)

  Conservative

  Gordon Keymer

  South East

  Tandridge (District)

  Conservative

  Sir Simon Day

  South West

  Devon (County)

  Conservative

  The rt hon The Lord

  East

  Essex (County)

  Conservative

  Hanningfield DL

  The Baroness (Joan) Hanham CBE

  London

  Kensington and Chelsea (London)

  Conservative

  Ruth Coleman

  South West

  North Wiltshire (District)

  Liberal Democrat

  Lord Tope CBE

  London

  Sutton (London)

  Liberal Democrat

  Peter Moore

  Yorkshire & Humberside

  Sheffield (Metropolitan District)

  Liberal Democrat

  Milner Whiteman

  West Midlands

  Bridgnorth (District)

  Independent

  The Campaign for the English Regions is an independent body, receiving no central Government funding, which aims to secure a commitment to regional government from all political parties.

  Fire Service
  Mr. Andrew Turner
  To ask the Deputy Prime Minister which fire brigades are organised around the need to respond to fire incidents. [83253]

  Mr. Leslie
  All fire authorities have a duty under section 1(1) of the Fire Services Act 1947 to make provision for fire-fighting purposes, including securing for their area the services of a fire brigade and equipment necessary to meet efficiently all normal requirements.

  Firefighters
  Mr. Jenkins
  To ask the Deputy Prime Minister how many former firefighters are on retirement pensions; and how many firefighters there are in service. [82173]

  Mr. Leslie
  The information requested is not held centrally and could be provided only at disproportionate cost. This is a matter for each 362W
  individual fire authority. It is estimated that in England and Wales there are over 22,000 former firefighters receiving ordinary and ill-health pensions. The number of regular wholetime firefighters eligible for membership of the pension scheme on 31 March 2001, the last date for which figures are available, was 33375.

  Mr. Jenkins
  To ask the Deputy Prime Minister what the average age of retirement for firefighters has been over the last five years. [82174]

  Mr. Raynsford
  The information requested is not held centrally and could be obtained only at disproportionate cost.

  Mr. Jenkins
  To ask the Deputy Prime Minister what the average pension received by a firefighter is; what percentage of final salary a firefighter is entitled to after 30 years service; and what the average work-related pension received by a pensioner is. [82177]

  Mr. Leslie
  The information requested is not held centrally and could only be provided at disproportionate cost. This is a matter for each fire authority. An analysis of a small sample of brigades at 31 March 2002 suggests that the average ill-health pension is 9,200 per annum, and the average ordinary pension is 11,300 per annum. The percentage of final salary a firefighter is entitled to after 30 years service is 66 per cent. The median income from occupational pensions for single pensioners in 2000–01 was £2,392 per annum.

  Mr. Jenkins
  To ask the Deputy Prime Minister what percentage of the revenue of the fire service the present pension arrangements cost. [82180]

  Mr. Leslie
  Based on provisional outturn figures for fire authorities in England, the net total of payments under the firefighters' pension scheme for 2001–02 was approximately 16 per cent. of net budgeted expenditure.

  Homelessness (Leeds)
  Mr. Battle
  To ask the Deputy Prime Minister what his latest estimate of the number of street homeless in Leeds is. [81486]

  Mrs. Roche
  The latest estimate was published in September 2002 and a copy was placed in the Library of the House. It stood at eight.

  Housing Development
  Mr. Pickles
  To ask the Deputy Prime Minister how many applications have been approved for development on green-belt land in each year since June 1997 in each local authority area; and what locations were involved. [83414]

  Mr. McNulty
  I refer the hon. Member to the answer given on 6 November 2002,Official Report, column 413W.

  IT Security
  Brian White
  To ask the Deputy Prime Minister what steps he has taken to review the security of the Department's IT system; and how many digital attacks there were on the Department's system in(a) October and (b) 2002. [80779]
  363W
  Mr. Leslie
  The security of the Office of the Deputy Prime Minister's IT system is kept under constant review. Separate figures are not available for the number of "digital attacks" (such as computer viruses detected) on the Office's IT system, as the Office shares with the Department for Transport the IT network of their predecessor (the Department for Transport, Local Government, and the Regions). For that IT network, the number of computer viruses detected was(a) 18 in October and (b) 266 in 2002 up to the end of October.

  Local Government Finance
  Mr. Pickles
  To ask the Deputy Prime Minister what proportion of aggregate standard spending assessments across local authorities in England were financed by aggregate total external support in each year since 1993–94. [82811]

  Mr. Raynsford
  The information requested can be found in the table.

  Standard Total External Support Spending Assessment (SSA)

  (£) million

  (£) million

  percentage

  2002–03

  49,762

  40,323

  81.0

  2001–02

  48,792

  40,067

  82.1

  2000–01

  46,690

  38,526

  82.5

  1999–00

  44,733

  37,123

  83.0

  1998–99

  42,668

  35,575

  83.4

  1997–98

  40,563

  34,101

  84.1

  1996–97

  40,157

  34,140

  85.0

  1995–96

  38,743

  32,727

  84.5

  1994–95

  37,848

  29,444

  77.8

  1993–94

  36,622

  28,592

  78.1

  Total external support consists of revenue support grant to local authorities, redistributed national non-domestic rates, central support protection grant and SSA reduction grant. For 1995/96 onwards it also includes principal formula police grant including the Metropolitan special payment and police transitional grant. Prior to 1995/96 the Home Office funded 51 per cent. of police expenditure. Total external support excludes the City of London offset and the grant to specified bodies.

  Local Government Structures
  Ann Winterton
  To ask the Deputy Prime Minister what plans he has to change the number of(a) local authorities and (b) elected representatives in reviewing local government in England following the establishment of elected regional assemblies; and what assessment he has made of the consequential effect of regional government on devolution. [82728]

  Mr. Raynsford
  Where an elected regional assembly is established, existing two tier local government will be restructured as unitary authorities following recommendations made by the Boundary Committee. The responsibility for electoral arrangements, including the numbers of Councillors, in any new structure will be a matter for the Electoral Commission.

  Paragraph 8.9 of the White Paper on Regional Governance said that some elected regional assemblies in England may need to consider the impact of their activities on Scotland, Wales or Northern Ireland, and
  364W
  establish appropriate relationships with the devolved administrations and other relevant Scottish or Welsh bodies. My right hon. Friend the Deputy Prime Minister will have reserve powers to intervene if he or she considers that an assembly's strategies or actions are likely to have a detrimental impact on another region, Scotland, Wales, or the UK as a whole.

  Ann Winterton
  To ask the Deputy Prime Minister what the Government's policy is on the future number of tiers of local government in England; what assessment he has made of the effect of a review of local government on the stability of local authority finance and administration; and if he will make a statement. [82729]

  Mr. Raynsford
  Policy for the Office of the Deputy Prime Minister is that where an elected regional assembly is established, following a referendum in the region, there should only be a single tier of local government. The financial and administrative impact of local government reviews will depend on the structure and boundary changes proposed, and it will be for the Boundary Committee to assess this when it makes recommendation for change.

  New Towns (South-East)
  Mr. Watts
  To ask the Deputy Prime Minister what assessment he has made of the impact the creation of the proposed three new towns in the south east will have on public expenditure; what the cost will be of providing(a) transport, (b) schools, (c) housing, (d) health and (e) other infrastructure to the three towns; and what impact public funding for the new towns will have on other regions. [82600]

  Mr. McNulty
  In his statement to the House in July, the Deputy Prime Minister set out the Government's intentions for tackling the housing shortage in London and the south east. Studies of the potential for growth have been published for the Milton Keynes/South Midlands area and the London-Stansted-Cambridge area, and the Ashford study is due for publication imminently. These studies give some indication of the infrastructure that will be needed to support growth but what is needed will clearly be dependent on the scale of growth and where it is located. Over the coming months the Government, taking account of these studies, will work with regional and local partners in each of the areas to establish where, at what scale, and how quickly growth can be achieved. My right hon. Friend the Deputy Prime Minister will set out next steps when, early in the New Year, he makes a statement to the House on his comprehensive long-term programme of action for sustainable communities, as promised in his statement on 18 July.

  Right to Buy
  Mr. Pike
  To ask the Deputy Prime Minister what plans he has to review right to buy; and if he will make a statement. [83417]

  Mr. McNulty
  The Office of the Deputy Prime Minister has indicated publicly that we are concerned about the impact of right to buy sales in areas of housing pressure, and that we will act to address this. We are also concerned about exploitation of the rules of the scheme,
  365W
  and announced earlier this year that researchers at Heriot-Watt university have been commissioned to investigate the scale, nature and impact of such exploitation. The results are expected by the end of this year and will be published thereafter.

  Mr. Pickles
  To ask the Deputy Prime Minister if he will publish the sources of the anecdotal evidence he has evaluated that the right to buy rules were being exploited in some areas. [83509]

  Mr. McNulty
  No. The information requested is not held centrally, and could be provided only at disproportionate cost. The results of the research by Heriot-Watt University into the scale, nature and impact of such exploitation are expected by the end of this year, and will be published thereafter.

  Mr. Pickles
  To ask the Deputy Prime Minister what discussions Ministers and officials of his Department have held with the research team at Heriot-Watt University investigating the right to buy scheme; what was discussed at each meeting; who attended; and when each meeting took place. [83510]

  Mr. McNulty
  This research project is subject to normal project management procedures and disciplines operated by professional and policy officials. It is subject to review by a stakeholder group drawn from housing practitioners and representatives of lending institutions and local government.

  The results are expected by the end of this year, and will be published thereafter.

  Wakefield Metropolitan District
  Jon Trickett
  To ask the Deputy Prime Minister what was the percentage increase in(a) SSA, (b) expenditure (revenue and capital) and (c) government grant for Wakefield MDC in the 10 years from May 1992; and what the comparable statistics are for aggregate local government expenditure. [83159]

  Mr. Raynsford
  The information available is presented in the table.

  1992 to 93 (£) million

  2002 to 03 (£) million

  percentage increase

  Wakefield

  SSA

  207

  283

  36.8

  Revenue Expenditure

  229

  328

  43.2

  Capital Expenditure

  35

  44

  24.4

  Government Grants

  176

  252

  43.7

  All England

  SSA

  37,993

  53,570

  41.0

  Revenue

  Number of Antisocial Behaviour Orders issued, as reported to the Home Office from1 April 1999 to 30 June 2002, England and Wales

  From 1 April 1999 to 31 May 20001

  From 1 June 2000 to 31 December 2000

  From 1 January 2001 to 31 December 2001

  From 1 January 2002 to 30 June 2002

  Total

  ASBOs issued

  104

  134

  293

  123

  654

  1 Total figure only available within this period.

  We are aware that the numbers of ASBOs made locally have been consistently under-reported in
  366W

  1992 to 93 (£) million

  2002 to 03 (£) million

  percentage increase

  expenditure Capital

  41,925

  65,252

  55.6

  expenditure Government

  6,568

  10,859

  65.3

  grants

  32,859

  47970

  46.0

  Note:

  1. Figures between 1992/93 and 2002/03 and between Wakefield and England are not directly comparable for the following reasons.

  a) In 1992/93 Revenue Support Grant (RSG) and National Non-Domestic Rate (NNDR) amounts were paid only to billing authorities. Consequently, the amounts shown for Wakefield cover all services including Police and Fire. From 1993/94 onwards, support for Police and Fire was paid directly to the relevant Police and Fire Authorities. The figures for England do include Police and Fire for both 1992/92 and 2002/03.

  b) There have been changes in the responsibilities of local authorities.

  c) In 1992/93, only information on RSG, NNDR and Specific Grants inside AEF are available on a consistent basis.

  2. The revenue and capital expenditure figures for 2002/03 are budget estimates.

HOME DEPARTMENT

  Corpse Disposal
  Mr. Burns
  To ask the Secretary of State for the Home Department what arrangements have been made to deal with the disposal of corpses contaminated by a(a) chemical, (b) biological, (c) radioactive and (d) nuclear attack. [82161]

  Mr. Denham
  [holding answer 21 November 2002]: Contingency plans for managing the consequences of attacks using chemical, biological and radiological material are in place and are regularly reviewed. These plans include arrangements for the efficient and sensitive handling of contaminated corpses, although the precise response would largely depend on the circumstances and scale of the incident. The Government do not reveal details of contingency arrangements relating to potential terrorist attacks for security reason.

  Antisocial Behaviour Orders
  Mr. Malins
  To ask the Secretary of State for the Home Department how many Antisocial Behaviour Orders have been imposed in each of the last two years. [82083]

  Mr. Denham
  The table shows the number of notifications reported to the Home Office of Antisocial Behaviour Orders (ASBOs) issued up to 30 June 2002 (latest available) within England and Wales.

  returns made by magistrates courts, and are considering how reporting can be improved.
  367W
  Mr. Malins
  To ask the Secretary of State for the Home Department what assessment he has made of(a) practical and (b) procedural difficulties in relation to the imposition of Anti-social Behavioural Orders; and what remedial proposals he has. [82086]

  Mr. Denham
  Legislative changes were introduced by the Police Reform Act to improve the efficiency and effectiveness of Antisocial Behaviour Orders (ASBOs). These changes, combined with the new guidance, will help to remedy some of the problems identified in the Home Office Review of ASBOs, published in April 2002. We are also working with the Local Chancellor's Department (LCD), Crown Prosecution Service (CPS) and others to ensure that the necessary training is given to magistrates, prosecutors and others involved in the process. We will continue to review the working of ASBOs in order to make them as streamline as possible.

  Mr. Grieve
  To ask the Secretary of State for the Home Department how many antisocial behaviour orders have been issued since their introduction in the Beaconsfield constituency. [82385]

  Mr. Denham
  The table shows the number of notifications received by the Home Office of antisocial behaviour orders (ASBOs), issued within Buckinghamshire (in which the Beaconsfield constituency is situated) and by local government authority up to 30 June 2002 (latest available).

  We are aware that the numbers of ASBOs made locally have been consistently under reported in returns made by magistrates courts, and are considering how reporting can be improved.

  Number of antisocial behaviour orders reported to the Home Office which have been issued as from 1 April 1999 to 30 June 2002 for Buckinghamshire by local government authority area

  Area

  From 1 April 1999 to 31 May 20001

  From 1 June 2000 to 30 June 2002

  Total

  Police force area/MCC

  Thames Valley2

  1

  9

  10

  Local government authority, county of Buckinghamshire Milton Keynes borough council

  3—

  3

  3

  Wycombe district council

  3—

  2

  2

  1 Total figure only available for Thames Valley police force area within this period. Local government authority not known.

  2 Includes total figure for counties of Berkshire, Buckinghamshire and Oxfordshire.

  3 Not available.

  Child Curfew and Safety Orders
  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department how many(a) child curfew orders and (b) child safety orders there have been in each year since their introduction. [81004]
  368W
  Mr. Denham
  Between February 2001, when curfew orders with electronic monitoring were extended to 10 to 15-year-olds, and 31 October 2002 the courts imposed 2,704 orders on young offenders of that age.

  Two child safety orders were issued in the areas in which they were piloted between September 1998 and June 2000.

  Conviction Rates
  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department what the conviction rate in Crown courts was in each year since 1992. [81001]

  Hilary Benn
  The information requested, for the years 1992 to 2000, is as follows:

  Conviction rate1 at the Crown court in England and Wales, 1992 to 2000

  Year

  Rate

  1992

  79.9

  1993

  79.5

  1994

  78.6

  1995

  79.1

  1996

  80.4

  1997

  80.3

  1998

  75.9

  1999

  74.3

  2000

  72.9

  1 Defendants convicted as a percentage of defendants for trial.

  Notes:

  The introduction of plea before venue from 1 October 1997 caused a greater number of guilty plea cases to be heard at magistrates courts.

  Statistics for 2001 will be available in December.

  Criminal Records Bureau
  Mr. Burstow
  To ask the Secretary of State for the Home Department when he expects the Criminal Records Bureau to be able to cope with demand sufficiently to implement the criminal record checks as part of the Protection of Vulnerable Adult lists. [81721]

  Hilary Benn
  [holding answer 19 November 2002]: As my right hon. Friend the Home Secretary made clear on 4 November 2002 in response to a question from my hon. Friend the Member for Hendon (Mr. Dismore), Official Report, column 99W, we shall introduce arrangements for Criminal Records Bureau checks against the Protection of Vulnerable Adults list at the earliest opportunity.

  Illegal Camping
  Ms Drown
  To ask the Secretary of State for the Home Department when the next guidance on managing illegal camping and travellers will be released. [82140]

  Mr. McNulty
  I have been asked to reply.

  The new joint Office of the Deputy Prime Minister/Home Office guidance on managing unauthorised camping by gypsies and other travellers will be issued by the new year.
  369W
  In order for the Government to strike up a balanced approach to unauthorised camping, the new guide will consist of two documents, Framework Guidance and detailed Operational Guidance, for use by local authorities, police services and both the settled and traveller communities.

  Consultation with key stakeholders will commence shortly.

  Immigration
  Mr. Caton
  To ask the Secretary of State for the Home Department what his Department classes as purposeful activities as set out in the Nationality, Immigration and Asylum Act 2002. [83435]

  Beverley Hughes
  Section 29 of the Nationality, Immigration and Asylum Act 2002 provides the necessary powers to provide and fund purposeful activities for asylum seekers supported in accommodation centres.

  Such activities are likely to include training in English language, information technology and other skills training and volunteering. Other examples include sport, creative activities and practical activities like cookery or gardening. We do not intend to follow an unduly prescriptive approach to what constitutes a purposeful activity. The aim is to keep asylum seekers

  Recorded crime: number of offences recorded from 1997 to 2001/02

  Police force area/ offence Lancashire

  19971

  1997–982

  1998–993

  1999–2000

  2000–01

  2001–024

  Total racially aggravated offences5

  —

  —

  —

  232

  408

  1,057

  Total violent crime6

  5,550

  5,718

  12,183

  11,615

  13,870

  18,535

  Robbery of personal property7

  —

  —

  816

  866

  1,044

  1,437

  Drug offences8

  554

  529

  4,117

  3,135

  3,124

  3,169

  North West Region9

  Total racially aggravated offences5

  —

  —

  —

  1,284

  2,053

  4,746

  Total violent crime6

  46,224

  50,503

  87,033

  93,029

  95,940

  106,892

  Robbery of personal property7

  —

  —

  9,338

  10,425

  11,614

  13,656

  Drug offences8

  3,156

  3,164

  19,267

  16,106

  15,070

  14,775

  1 Recorded on a calendar year basis.

  2 The number of crimes recorded in that financial year using the coverage and rules in use until 31 March 1998.

  3 The number of crimes recorded in that financial year using the expanded offence coverage and revised counting rules which came into effect on 1 April 1998.

  4 Cumbria, Greater Manchester and Lancashire implemented the principles of the National Crime Recording Standard (NCRS) in advance of the national implementation date of April 2002. The 2000–01 and 2001–02 figures for these forces will be affected by the Standard. The NCRS and other changes to police recording practices, has had the estimated effect of increasing recorded crime statistics by at least 5 per cent. for 2001–02, which means the real increase of total recorded crime for 2001–02 is 2 per cent. compared to the published national total of 7 per cent. The impact will vary for different types of offence.

  5 Racially aggravated offences became notifiable to the police on 1 April 1999. The offences covered are; other wounding, harassment, common assault, criminal damage to a dwelling, criminal damage to a building other than a dwelling, criminal damage to a vehicle and other criminal damage.

  6 Violent crime is comprised of violence against the person, sexual offences and robbery.

  7 Robbery of personal property was recorded separately (from total robbery) as from 1 April 1998.

  8 Up until 1 April 1998, Trafficking in controlled drugs was the only drugs-related offence recorded. After this date the offence coverage was expanded to include more drugs-related offences.

  9 The North West Region comprises the following police forces; Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside.

  Police Numbers
  Mr. Llwyd
  To ask the Secretary of State for the Home Department how many police officers there were in each police authority in Wales in each of the past.
  370W
  occupied; contribute towards a positive atmosphere in the centres; make time spent in the UK productive; and provide opportunities to develop useful skills. We want to allow room for local variation and innovation.

  Offences
  Mr. Evans
  To ask the Secretary of State for the Home Department how many incidents of(a) racially aggravated offences, (b) violent crime, (c) robbery of personal property and (d) drug offences were recorded in (i) Lancashire and (ii) the North West of England in (A) 1997, (B) 1998, (C) 1999, (D) 2000 and (E) 2001. [82373]

  Mr. Denham
  The requested statistics are given in the following table.

  On 1 April 1998, there was a change in the counting rules for recorded crime, and an expansion of the offences covered. This resulted in an increase of crimes recorded by the police. Recorded crime figures before this date will therefore not be directly comparable.

  As Lancashire, Cumbria and Greater Manchester police forces implemented the principles of the National Crime Recording Standard (NCRS) in advance of its national implementation in April 2002, the recorded crime figures for these areas cannot be directly compared with those for previous years. The affects of the Standard are explained in table footnote 4.

  five years; and what the target number of police officers in each police authority was in each of those years. [82519]

  Mr. Denham
  [holding answer 25 November 2002]: The information requested about police strength has

  371W
  been set out in the table. Targets for individual force strength are not collected centrally.

  Police Officer Strength

  Year as at 31 March

  Dyfed-Powys

  Gwent

  North Wales

  South Wales

  1998

  1,002

  1,233

  1,396

  2,986

  1999

  1,026

  1,247

  1,391

  2,981

  2000

  1,040

  1,264

  1,403

  2,926

  2001

  1,055

  1,274

  1,444

  3,154

  2002

  1,132

  1,333

  1,506

  3,222

  Civilian Support Staff

  Year as at 31 March

  Dyfed-Powys

  Gwent

  North Wales

  South Wales

  1998

  341

  477

  479

  1,132

  1999

  341

  487

  508

  1,223

  2000

  359

  498

  519

  1,081

  2001

  401

  537

  498

  1,270

  372W

  Civilian Support Staff

  Year as at 31 March

  Dyfed-Powys

  Gwent

  North Wales

  South Wales

  2002

  459

  570

  645

  1,435

  Source:

  Home Office Statistical Bulletins—Police Service Strength 1998–2002

  Police Training
  Mr. Paice
  To ask the Secretary of State for the Home Department if he will list the pass marks for each police entrance exam and physical test for each batch of recruits into police training colleges during(a) 1997 and (b) 2001. [82493]

  Mr. Denham
  [holding answer 25 November 2002]: The 1997 information is no longer available. The 2001 information is not held centrally and could only be obtained at disproportionate cost.

  DEFENCE
  £1000s

  Resources

  Capital

  Change

  New DEL

  Of which: voted

  Non voted

  Change

  New DEL

  Of which: voted

  Non voted

  277,224

  19,142,668

  18,752,958

  389,710

  110,620

  5,842,145

  5,765,717

  76,428

  The change in the resource element of the DEL arises from:
  The take up of the Resource end year flexibility of £68,668,000.
  An increase in RfR2 of £208,556,000 for military operations.
  The change in the capital element of the DEL arises from:
  The take up of the Capital DEL end year flexibility of £100,000,000.
  An increase in RfR2 of £10,620,000 for military operations.
  The increases will be funded from the DEL Reserve and will not therefore add to the planned total of public expenditure.

DEPARTMENT FOR EDUCATION AND SKILLS

  Departmental Expenditure Limits
  The Secretary of State for Education and Skills (Mr. Charles Clarke)
  This Written Statement explains the

  Resources

  Capital

  Change£000

  New DEL £000

  Of which: voted £000

  Non-Voted £000

  Change £000

  New DEL £000

  Of which: voted £000

  Non-voted £000

  RfR 1

  73,808

  19,622,493

  7,212,908

  12,409,585

  84,875

  3,082,462

  1,764,003

  1,318,459

  RfR 2

  -759

  284,633

  284,633

  0

  0

  164,008

  164,008

  0

  RfR 3

  -430

  149,570

  149,570

  0

  0

  0

  0

  0

  Total change

  72,619

  20,056,696

  7,647,111

  12,409,585

  84,875

  3,246,470

  1,928,011

  1,318,459

  The £6,911,000 increase in the voted element of the resource DEL for RfR l arises from the take up of £66,000,000 of End Year Flexibility provision; the transfer from the Department of Health of £8,120,000 for Healthy Schools Partnerships and Drugs Education; the net transfer to the Department for Work and Pensions of £7,658,000 for the Disability Rights Commission, Adult Basic Skills training arranged through Jobcentre Plus, Administration Costs and the transfer of responsibility for Ranmoor Hall, Sheffield; the net transfer from the Home Office of £2,775,000 for Community Champions, Community Finance and Learning Initiative, shared premises, prison education services, the Mentor Point Initiative, the Black Training and Enterprise Group and Foyer Federation; the

  Departmental Expenditure Limits
  The Secretary of State for Defence (Mr. Geoffrey Hoon)
  Subject to Parliamentary approval of the necessary Supplementary Estimates, the Ministry of Defence Departmental Expenditure Limits will be increased by £387,844,000 from £24,596,969,000 to £24,984,813,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  changes being proposed to the Department for Education and Skills' Departmental Expenditure Limit (DEL) (including the Office for Her Majesty's Chief Inspector of Schools (OFSTED) which has a separate Estimate), which subject to Parliamentary approval of the necessary supplementary Estimate, will be increased by £157,494,000 form £23,342,872,000 to £23,500,366,000 and to the Administration Costs limits which will be changed as follows.

  Original £000

  Change £000

  Revised £000

  DfES (RfRl)

  208,726

  -1,185

  207,541

  Sure Start (RfR2)

  4,099

  +1,351

  5,450

  Children's Fund (RfR3)

  4,435

  -430

  4,005

  Within the DEL change, the impact on the resources element and the capital element are as set out in the following table:

  increase in the Appropriation in Aid by £1,800,000 to recycle rent receipts from the National College for School Leadership; the net transfer to the Office of the Deputy Prime Minister of £1,250,000 for Community Champions, Government Offices, Youth Work Activity and regional co-ordinators of Adult Basic Skills training; the transfer to the National Assembly for Wales of £557,000 for Higher Education Hardship (Access) Funds; the net transfer from the Department of Trade and Industry of £434,000 for Inward Investments, Community Finance and Learning Initiative and Engineering and Marine Training Authority Marine Skills; the transfer from the Office for National Statistics of £97,000 for the Neighbourhood Statistics programme; the virement of £59,247,000 to non-voted
  15WS
  DEL for the Learning and Skills Council; and the correction of an over allocation of funds through a return to the Invest Save Budget of £3,000.

  The £1,185,000 reduction in the Administration Costs limit for RfR 1 arises from the transfer of £871,000 to the Department for Work and Pensions for the transfer of responsibility for Ranmoor Hall, Sheffield and support for International Relations; the transfer of £411,000 to the Office of the Deputy Prime Minister for Government Offices and for regional co-ordinators for Adult Basic Skills training; and the transfer of £97,000 from the Office for National Statistics for the Neighbourhood Statistics programme.

  The reduction in the voted element of resource DEL for RfR2 arises from the transfer of £759,000 to the Office of the Deputy Prime Minister to contribute to the accommodation and the provision of central services in the Government Offices.

  The £1,351,000 increase in the Administration Costs limit for RfR2 arises from the virement from current grants.

  The reduction in the voted element of resource DEL for RfR3 arises from the transfer of £430,000 from administration costs to the Office of the Deputy Prime Minister to contribute to the accommodation and the provision of central services in the Government Offices.

  The £73,375,000 increase in the voted element of the capital DEL for RfRl arises from the draw down of £77,500,000 from the Capital Modernisation Fund for direct grants to schools; the virement of £4,000,000 to non voted DEL to the Learning and Skills Council; the transfer of £100,000 to the Department for Work and Pension for the transfer of responsibility for Ranmoor Hall, Sheffield; and the correction of an over allocation of funds through a return to the Invest Save Budget of £25,000.

  The £66,897,000 increase in the non-voted element of the resource DEL for RfRl arises from the virement of £59,247,000 from voted DEL to the Learning and Skills Council; the transfer from the Department for Work and Pensions of £3,600,000 to the Adult Learning Inspectorate for inspections of New Deal training providers; the transfer from the Home Office to the Higher Education Funding Council for England of £3,250,000 for the Active Community Fund; and the transfer from the Department for Transport of £800,000 for a project to address the training and skills in the Road Haulage Industry.

  The £11,500,000 increase in the non-voted element of the capital DEL for RfRl arises from the draw down of £7,500,000 from the Capital Modernisation Fund to the Learning and Skills Council for further education and the virement of £4,000,000 from voted DEL to the Learning and Skills Council.

  The increases will be offset by transfers or charges to the DEL Reserve and will not therefore add to the planned total of Public expenditure'.

OFFICE OF THE DEPUTY PRIME MINISTER

  Departmental Expenditure Limits
  Deputy Prime Minister and First Secretary of State (Mr. John Prescott)
  I have today announced that subject to Parliamentary approval necessary Supplementary Estimate, the Office of the Deputy Prime Minister's Departmental Expenditure Limits for 2002–03 will change as follows.

  (a) the ODPM Main Programmes DEL (previously the DTLR Main Programmes DEL) will be decreased by £8,110,064,000 from £13,542,710,000 to £5,432,646,000 and the ODPM administration costs limit (previously the DTLR administration costs limit) will be decreased by £356,671,000 from £698,802,000 to £342,131,000 and the DTLR HSE administration costs limit will be transferred to the Department for Work and Pensions. Within the DEL change, the impact on resources and capital are as set out in the following table:

  £'000

  Resources Change

  New DEL

  Capital Change

  New DEL

  Total DEL

  -3,163,065

  1,921,595

  -4,946,999

  3,511,051

  Of which Voted

  -1,876,058

  1,487,401

  -2,540,456

  1,436,553

  Non Voted

  -1,287,007

  434,194

  -2,406,543

  2,074,498

  The change in the resource element of the DEL arises from:
  (i) The changes for Request for Resources 1 are as follows:

  Take up of End Year Flexibility of £8,516,000 comprising £2,000,000 for Safer Communities Supported Housing Fund, £1, 806,000 for the Rent Service and £4,710,000 for the Planning Inspectorate administration. An increase of £43,658,000 from non-voted provision for Homelessness Strategies (£9,000,000), Bed and Breakfast (16,100,000), Priority Needs Orders (£10,000,000), Housing research and publicity (£150,000), Regeneration publicity (£350,000) and Rough Sleepers (£8,058,000). Take up from the Capital Modernisation Fund of £15,000 for the New Ventures Fund. A technical adjustment of £1,000,000 to correct the treatment of an Ordnance Survey interest payment. A net decrease of £15,919,000 arising from the following inter-departmental transfers: a reduction of £13,683,000 due to the reclassification of pneumoconiosis compensation payments to a provision and which has subsequently transferred to the Department for Work and Pensions, £2,066,000 to the Home Office for grants to the voluntary sector, £2,000,000 to the Home Office for Crime Reduction, £100,000 to the Department for Education and Skills for Community Champions, £300,000 from the Home Office for New Ventures Fund, £130,000 from the Home Office for Special Grants Programme and £1,500,000 from the Home Office for neighbourhood wardens. Take up from Invest To Save Budget of £597,000 for Ordnance Survey (£165,000) and Fire Service Projects (£432,000).
  (ii) The changes for Request for Resources 2 are as follows:

  Machinery of Government change of £1,726,236,000 to the Department for Transport.
  17WS
  (iii) The changes for Request for Resources 4 are as follows:

  A net decrease of £295,618,000 arising from machinery of government transfers to Department for Transport (£108,842,000), to the Department for Work and Pensions (£193,174,000), from the Home Office (£2,162,000), and from the Cabinet Office (£4,236,000). An increase of £107,925,000 arising from other interdepartmental transfers from the Cabinet office (£98,630,000), the Home Office (£6,104,000), the Department for Education and Skills (£2,539,000) and from the Department for Culture, Media and Sport (£652,000). A transfer of £4,000 from Requests for Resource 3 to meet costs of providing administration services.

  (iv) Provision within the non-Voted resource element of the DTLR Main Programmes Departmental Expenditure Limit will be decreased by £1,287,007,000 to reflect machinery of government transfer to Department for Transport (£1,243,279,000), a machinery of government transfer to the Department for Work and Pensions (£70,000) and a transfer to voted provision on Request for Resources 1 (£43,658,000).
  (v) As a result of the changes to Requests for Resources 1,2 and 4 the ODPM administration provision has been decreased by £364,510,000 from £707,882,000 to £343,372,000.

  The change in the capital element of the DEL arises from:
  (vi) The changes for Request for Resources 1 are as follows:

  Take up of End Year Flexibility of £25,926,000 comprising £11,809,000 for Safer Communities supported Housing Fund, £14,000,000 for Starter Homes Initiative and £117,000 for The Rent Service Invest to Save Budget. A technical adjustment of £1,121,000 for Ordnance Survey loan repayment. An increase following a transfer from Department for Transport of £30,000,000 arising from the repayment of a loan. Take up from the Capital Modernisation Fund of £74, 055,000 for The Rent Service (£1,500,000), New Dimension (£43,000,000), Choice Based lettings (£3,355,000 including take up of End Year Flexibility of £2,355,000), Housing Market Renewal Fund (£25,000,000) and Public Space Improvement (£1,200,000). Take up from Invest to Save Budget of £65,000 for Ordnance Survey (£15,000) and Fire Service Projects (£50,000). A transfer of £14,629,000 from non-voted resources for Private Sector Housing Renewal (£8,000,000), Housing Defect grants (£1,629,000) and Coalfields Regeneration Trust (£5,000,000).

  (vii) The changes for Request for Resources 2 are as follows:
  Machinery of Government change of £2,653,199,000 to the Department for Transport.

  (viii) The changes for Request for Resources 4 are as follows:

  A decrease of £33,666,000 arising from machinery of government transfers to the Department for Transport (£23,101,000), and to the Department of Work and Pensions (£10,565,000). An increase of £613,000 arising from a further interdepartmental transfer from the Cabinet Office.

  (ix) Provision within the non-Voted capital element of the DTLR Main Programmes Departmental Expenditure Limit will be decreased by £2,406,543,000 in respect of a Machinery of Government transfer to Department for Transport (£2,391,914,000) and a transfer to voted provision on Request for Resources 1 (£14,629,000).
  18WS
  (b) the DTLR Local Government DEL will be increased by £35, 136,000 from £37,649,827,000 to £37, 684,963,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Resources Change

  New DEL

  Capital Change

  New DEL

  Total DEL

  +27,967

  37,403,935

  +7,169

  281,028

  Of which Voted

  +25,767

  37,311,082

  +7169

  273,028

  Non Voted

  +2,200

  92,853

  0

  8,000

  The change in the resource element of the DEL arises from:
  (i) The changes for Request for Resources 3 are as follows:

  Take up of End Year Flexibility of £23,792,000: VOA rating services (£1,200,000), Best Value Inspectorate (£2,958,000), Local Government research (£600,000), PFI Special Grants (£5,400,000), support for local authorities (Bellwin) (£1,500,000), Local Government On-Line Resource (1,732,000), and take up from the Invest to Save Budget (£10,402,000). £2,000,000 from the DEL Reserve for Special Grants for Foot and Mouth Disease NNDR concessions. A decrease of £21,000 arising from machinery of government changes transfer to the Lord Chancellor's Department and £4,000 transfer to the Office of the Deputy Prime Minister's Request for Resources 4 in respect of costs of providing administration services.

  (ii) Provision within the non-Voted resource element of the Local Government DEL will increase by £2,200,000 to reflect the take up of End Year Flexibility for the Standards Board for England.

  The change in the capital element of the DEL arises from:
  (iii) The changes for Request for Resources 3 are as follows:

  Take up of End Year Flexibility of £4,240,000 for Local Government On-Line. Take up from the Invest to Save Budget End Year Flexibility of £2,929,000.

  The increases will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

TRANSPORT

  Departmental Expenditure Limits
  The Secretary of State for Transport (Mr. Alistair Darling)
  By convention Suplementary Estimates are published after an announcement on associated changes to the Departmental Expenditure Limit (DEL) and administration cost limit. Subject to parliamentary approval of the necessary estimate, the Department for Transport departmental expenditure limit for 2002-03 will be £8,928,473,000 and the administration costs limit will be £479,446,000.

  The departmental expenditure limit comprises £8,146,571,000 transferred from the Office of the Deputy Prime Minister, following Machinery of

  19WS
  Government changes, and a subsequent increase of £781,902,000. within the DEL change, the impact on resources and capital are as set out in the table:

  £'000

  Resources

  Capital

  Transferred from ODPM

  3,078,357

  5,068,214

  Change

  174,878

  607,024

  New DEL

  3,253,235

  5,675,238,

  Of which:

  Voted

  1,862,956

  3,362,095

  Non voted

  1,390,279

  2,313,143

  The change in the resource element of the DEL arises from:
  (i) take up of £150,800,000 of resource end year flexibility, comprising:

  (a) £139,627,000 for the Strategic Rail Authority (non-voted) to meet extra costs that have arisen on some passenger rail franchises;

  (b) £11,173,000 to increase the Road Haulage Modernisation Fund (including £800,000 that has been transferred to the Department for Education and Skills for the Learning and Skills Council's training scheme for the road haulage industry);
  (ii) take up of £13,020,000 capital end year flexibility for the Highways Agency to support resource expenditure in line with the Agency's business plan;
  (iii) a transfer of £200,000 to the Department for Environment, Food and Rural Affairs in respect of fishermen's' safety training;
  (iv) a transfer of £782,000 from the Home Office for research on dedicated vehicle identity checks;
  (v) a transfer of £3,800,000 (administration costs) to the Department for Work and Pensions in respect of contributions to the Health and Safety Commission's work on implementation of the recommendations in Lord Cullen's report on the rail accident at Ladbroke Grove;
  (vi) the transfer of £15,141,000 from the capital element of the DEL to the resource element, comprising:

  (a) £7,230,000 for aviation services;

  (b) £538,000 for London Underground PPP Advisors;

  (c) £7,373,000 for the Strategic Rail Authority (non-voted);

  (vii) an increase in receipts of £65,000 to offset capital expenditure on maintenance of the International Maritime Organization building. The change in the capital element of the DEL arises from:

  (i) a call on the DEL reserve of £643,000,000 and a transfer of £100,000,000 from departmental unallocated provision to ensure continued funding of, and increased investment in, London Underground Limited;

  (ii) a draw down of £9,100,000 from the Capital Modernisation Fund comprising:

  (a) £8,600,000 for Electronic Service Delivery of Abnormal Loads; and

  (b) £500,000 for the Vehicle Certification Agency's WIMS project;
  20WS
  (iii) a transfer of £30,000,000 to the Office of the Deputy Prime Minister to re-imburse a transfer from housing capital programmes made in 2001–02;
  (iv) a transfer of £15,141,000 from Trans European networks payments for rail and other transport industries projects to the resource element of the DEL;
  (v) a transfer from non-voted credit approvals of £28,078,000 to voted programmes in support of the Maritime and Coastguard Agency (£9,517,000), road user charging (£1,941,000), Transport Direct (£1,000,000), water freight grants (£8,247,000), local authorities requesting support for "accepted" road schemes (£6,229,000) and Promoting Sustainable Travel Initiatives1 Cycle Fund (£1,144,000);
  (vi) a transfer of £11,307,000 from voted provision for the Highways Agency to non-voted credit approvals for de-trunking programmes;
  (vii) a transfer of £38,000,000 from voted provision for the Highways Agency to the Strategic Rail Authority (non-voted) to meet additional project development costs;
  (vii) an increase of £65,000 in respect of maintenance of the International Maritime Organization building, offset by resource appropriations in aid.

  The administration costs limit comprises £483,246,000 transferred from the Office of the Deputy Prime Minister, following Machinery of Government changes, and a subsequent reduction of £3,800,000.

  All of these changes will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

CULTURE, MEDIA AND SPORT

  Contingent Liabilities
  The Secretary of State for Culture, Media and Sport (Tessa Jowell)
  The provision for the Government Indemnity Scheme is made by the National Heritage Act 1980. The scheme facilitates public access to loans of works of art and other objects for public display made to museums, galleries and other such institutions by private owners and non-national institutions. It does this by indemnifying lenders against loss or damage to their loan. Loans covered by the scheme must be for public benefit. The scheme also covers loans of such objects for study purposes within borrowing institutions, where this would contribute materially to the public's understanding or appreciation of the loan. Examples of this are: enhancing interpretation or explanation to the public of objects, or bringing into the public domain the conclusions of any study.

  In the six month period ended 30 September, the following undertakings to indemnify were given under section 16 by the relevant Departments for objects on loan to national and non-national institutions:

  Numbers

  Department for Culture, Media and Sport

  608

  Scottish Executive Education Department

  253

  The National Assembly for Wales

  184

  The value of contingent liabilities in respect of undertakings given at any time under section 16 and which remained outstanding as at 30 September is:

  21WS

  Department for Culture, Media and Sport

  £2,571,225,058

  Scottish Executive Education Department

  £493,725,877

  The National Assembly for Wales

  £57,572,660

  The value of non-statutory Government indemnities to cover loans handled by the Government Art Collection and which remained outstanding as at 30 September is:

  Value: £5,000,000

  Resource

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

  7,240

  1,167,397

  163,929

  1,003,468

  59,627

  163,376

  116,495

  46,881

  The £7,240,000 increase in the voted element of the resource DEL for RfRl arises from the transfer of £1,000,000 from the Home Office for the Spend for Sport initiative and £134,000 match funding of the Public Library Volunteer Scheme; the take up of £3,622,000 of discretionary end year flexibility provision for administrative costs; the transfer of £652,000 administration costs expenditure to the Office of the Deputy Prime Minister toward the expenses of running the regional Government Offices; and the take up of £3,136,000 of discretionary end year flexibility provision for the further development of Culture Online.

  The £4,000,000 reduction in the non-voted element of the resource DEL for RfRl arises from a transfer £4,000,000 from the Department's unallocated provision into administration costs.

  The £6,970,000 increase in the Department's Administration Costs Limit arises from a transfer of £4,000,000 from the Department's unallocated provision into administration costs; the take up of £3,622,000 of discretionary end year flexibility provision for administrative costs; and the transfer of £652,000 administration costs expenditure to the Office of the Deputy Prime Minister toward the expenses of running the regional Government Offices.

  The £59,627,000 increase in the voted element of the capital DEL for RfRl arises from the take up of £50,460,000 of discretionary capital DEL end year flexibility provision under the Space for Sport and Art initiative; the draw down of £5,000,000 from the Capital Modernisation Fund for the further development of Culture Online; the take up of £3,534,000 of discretionary capital DEL end year flexibility for the Royal Parks; and the take up £633,000 of discretionary capital DEL end year flexibility for Administration and Research.

  The increases will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the Planned total of Public Expenditure.
  22WS
  The value of non-statutory Undertakings given to Her Majesty in respect of loans from the Royal Collection and which remained outstanding as at 30 September is: Value: £216,852,270

  Winter Supplementary Estimate
  The Secretary of State for Culture, Media and Sport (Tessa Jowell)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Department for Culture, Media and Sport DEL will be increased by £66,867,000 from £1,263,906,000 to £1,330,773,000 and the Administration Costs limits will be increased by £6,970,000 from £35,196,000 to £42,166,000.

  Within the DEL change, the impact on resources and capital are as set out in the following table:

HOME DEPARTMENT

  Seasonal Agricultural Workers' Scheme
  The Secretary of State for the Home Department (Mr. David Blunkett)
  A review of the Seasonal Agricultural Workers' Scheme (SAWS) was announced on 7 February 2002 in the White Paper on Immigration and Asylum entitled "Secure Borders, Safe Haven: Integration with Diversity in Modern Britain". Officials within the Home Office have since completed a formal consultation in which the views of a wide range of organisations with an interest in the scheme have been sought.

  The Government would like to thank all those who responded to this review. The response of those contributing, many of whom were farmers and growers or their representatives, is that the SAWS plays an important role in providing an additional source of seasonal workers. We have listened to the views expressed and concluded that the scheme should be retained and developed where appropriate with the primary purpose of providing farmers and growers access to seasonal labour.

  The use of operators in administering the scheme is felt by the industry to be one of the key strengths of the current arrangements. They play a crucial role in recruiting and allocating participants to farms, overseeing their welfare, and monitoring and evaluating the scheme. Operators will therefore continue to be a feature of the revised SAWS. They will be appointed following a tendering exercise and will be in place in preparation for the revised SAWS which will operate from 2004 onwards.

  I am aware that many farmers and growers who have an unmet need for seasonal labour are not within the scope of the existing arrangements. Consequently, the period during which the SAWS operates will be extended beyond the current months of May to November to allow participation in the scheme at any time throughout the year so as to meet the demand for

  23WS
  seasonal workers. Additionally the work that SAWS participants are permitted to undertake will be extended, provided it is agricultural work and seasonal in nature. These changes will be fully implemented from January 2004. However, in recognition of the difficulties farmers and growers who are outside the scope of the current arrangements might experience in recruiting seasonal labour next year, I will bring forward these changes for the 2003 SAWS season. This is provided it is within the capacity of the existing operators to handle the additional work, and the employers wishing to benefit are able to meet the welfare needs of participants, in particular the provision of accommodation.

  In response to these changes the Government will increase the already agreed quota for SAWS 2003 from 20,200 to 25,000. Future quota levels will be determined annually on the basis of an appraisal of the scheme's performance and estimates of future demand by key stakeholders, in particular through scheme operators on behalf of the employers they represent. Although the review found no evidence to support an immediate increase in the quota to 50,000 as recommended by a recent Policy Commission report into the future of food and farming, the Government accept that subject to economic growth demand for seasonal workers will rise steadily in the coming years. It will continue to be a requirement of a revised SAWS that participants must be full-time students in their home country as the review indicated students have an incentive to return home at

  Resources

  Capital

  Change

  New DEL

  Of which: voted

  Non voted

  Change

  New DEL

  Of which: voted

  Non voted

  -3,746

  199,725

  137,401

  62,324

  33

  5,789

  5489

  300

  The change in the resource element of the DEL arises from:
  the merger, on 1 July 2002, of the National Investment and Loans Office with HM Treasury and the Debt Management Office (£192,000 net, of which administration costs is £1,975,000). NILO's DEL will be reduced from £191,000 to £0 and the administration cost limit will decrease from £2,018,000 to £0 as a result of the merger;
  draw down of £485,000 Invest to Save Budget funding;
  a transfer of £67,000 administrative costs to HM Customs and Excise for costs incurred by the Penrose Inquiry team;
  a transfer of £4,400,000 programme expenditure from the Office of Government Commerce to the Lord Chancellor's Department and the Court Service for properties transferred from the OGC's residual estate portfolio.

  The change in the capital element of the DEL arises from the merger of NILO with HM Treasury and the DMO (£33,000). NILO's capital DEL will reduce from £33,000 to £0.

  There is also an increase to non-voted DEL of £44,000 as a consequence of the NILO/HMT merger. This is for provision programme expenditure. NILO's non-voted DEL will decrease from £44,000 to £0.

  The increases will be offset by inter-departmental transfers and will not therefore add to the planned total of public expenditure.
  24WS
  the end of their time on the scheme. However, the upper age limit of 25 will be removed altogether to enable mature students to benefit from the scheme and to earn money that they can use to fund their education.

  I hope these changes will ensure the scheme can continue to make an important contribution to meeting the seasonal labour needs of the agriculture industry and in doing so provide participants with a valuable experience of working in the UK.

TREASURY

  Departmental Expenditure Limits
  The Financial Secretary to the Treasury (Ruth Kelly)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, HM Treasury's DEL will decrease by £3,713,000 from £209,227,000 to £205,514,000 and the administration costs limits will be increased by £1,908,000 from £108,296,000 to £110,204,000. The administration cost limit of £108,296 includes a correction to the figure published in the Main Estimate (£106,508). In order to prevent a negative RFR in the Main Estimate, A in A of £1,788 was switched to CFERs. This switch appeared in part II of the Main Estimate but was not reflected in the notes to the Estimate.

  Within the DEL change, the impact on resources and capital are as set out in the following table:

PRIVY COUNCIL OFFICE

  Winter supplementary Estimate
  The Leader of the House of Commons (Mr. Robin Cook)
  I am today announcing some changes to the Privy Council Office DEL and Administration Cost Limits for 2002–03. The Privy Council Office DEL will be increased by £270,000 from £2,798,000 to £3,068,000 and the Administration Costs Limits will be increased by £270,000 from £2,838,000 to £3,108,000. Within the DEL changes there is no impact on capital; the impact on resources is set out in the following table:

  Resources

  Change

  New DEL

  Of which: Voted

  Non- Voted

  + £270,000

  £3,068,000

  £3,068,000

  nil

  The changes in the resource element of the DEL arise from unexpected Privy Council Office costs attributed to accommodation and related matters and incurred in modernising the Department.

  The increase will be charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  HM Customs and Excise (Winter Supplementary Estimate)
  The Economic Secretary to the Treasury (John Healey)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the H M Customs

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non- voted

  Change

  New DEL

  Of which: voted

  Non-voted

  50,878,000

  1,074,310,000

  1,045,571,000

  28,739,000

  –

  84,418,000

  61,418,000

  23,000,000

  The change in the resource element of the DEL arises from: the take up of end year flexibility entitlement of £21,177,000 on administration costs and £29,588,000 on programme expenditure as set out in the Public Expenditure Outturn White Paper (Cm 5574); a transfer of £67,000 in administration costs from HM Treasury for setting up the Penrose Inquiry team; and a transfer of £46,000 from the Home Office on programme expenditure in respect of Cocaine Market Sizing research.

  The total administration costs change is £61,644,000, which includes a switch from non-discretionary programme expenditure to administration costs of £40,400,000. The administration costs increase will primarily provide for additional front-line operational staff and support resources, to tackle fraud in respect of Excise duties (significantly Hydrocarbon Oils).

  The increases will be offset by inter-departmental transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  Tax Ready Reckoner and Tax Relief Document
  The Chancellor of the Exchequer (Mr. Gordon Brown)
  The Government are today publishing a document containing the estimates of the effects of various illustrative tax changes on tax receipts in 2003–04 and 2004–05 (plus 2005–06 for indirect taxes) and estimates of the costs of the main tax reliefs in 2001–02. Copies are being placed in the Libraries of both Houses, and are available in the Vote Office.

  National Insurance contributions
  The Paymaster General (Dawn Primarolo)
  I have completed the annual review under section 141 of the Social Security Administration Act 1992.1 propose the following changes to take effect from 6 April 2003. These rates and limits will also apply to Northern Ireland National Insurance Contributions.

  Employers and Employees

  In line with the Social Security Contributions and Benefits Act 1992, the Lower Earnings Limit for primary Class 1 contributions is to be raised to £77 a week. It is set at the level of the basic Retirement Pension for a single person from April 2003 and rounded down to the nearest pound.

  The Primary and Secondary Thresholds for Class 1 contributions will continue to be aligned with the weekly amount of the income tax personal allowance, which will be frozen from April 2003. The Primary and
  26WS
  and Excise DEL will be increased by £50,878,000 from £1,107,850,000 to £1,158,728,000 and the administration costs limit will be increased by £61,644,000 from £956,323,000 to £1,017,967,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Secondary Thresholds will therefore remain at £89 a week. This means that no tax or Class 1 contributions will actually be paid on earnings below this level.

  The Upper Earnings Limit for primary Class 1 contributions will be raised to £595.

  The self-employed

  The rate of Class 2 contributions will be frozen at £2.00 a week.

  Self-employed people with earnings below the annual Small Earnings Exception can apply to be exempted from paying Class 2 contributions. This limit will be raised by £70 to £4,095 in line with inflation.

  The annual lower profits limit for liability to Class 4 contributions will remain at £4,615 a year (in line with the income tax personal allowance). The Upper Profits Limit will increase by £520 to £30,940, to maintain the link with employees' earnings liable to Class 1 contributions.

  Class 3

  The rate of Class 3 voluntary contributions will be increased by 10 pence to £6.95 a week.

  Share fishermen

  The special rate of Class 2 contributions for share fishermen, which allows them to build entitlement to contributory Jobseekers Allowance in addition to the other contributory benefits available to the self-employed, will remain at £2.65 a week.

  Volunteer Development Workers

  The special rate of Class 2 contributions for volunteer development workers, which entitles them to the full range of contributory benefits, will be increased by 10 pence to £3.85 in line with the statutory formula of 5 per cent of the primary Class 1 Lower Earnings Limit.

  Treasury Grant

  I need to ensure that the Fund can maintain a prudent working balance throughout the coming year. In accordance with section 2 (2) of the Social Security Act 1993, I propose to do so by prescribing that the maximum Treasury Grant which may be made available to the Fund in 2003–04 shall not exceed 2 per cent of the estimated benefit expenditure for that year. Similar provision will be made in respect of the Northern Ireland National Insurance Fund.

  I shall be laying a draft re-rating order before Parliament in due course. This will accompany a report by the Government Actuary to myself and my right hon. Friend the Secretary of State for Work and Pensions which we shall jointly present to Parliament.
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  The following table sets out the rates, earnings limits and thresholds for National Insurance Contributions proposed for 2003–04.

  National Insurance Contributions, Proposed re-rating, April 2003 Item

  2003–04

  Lower Earnings Limit, primary

  £77

  Class 1

  Upper Earnings Limit, primary

  £595

  Class 1

  Primary Threshold

  £89

  Secondary Threshold

  £89

  Employees' primary Class 1 rate

  11 per cent from £89.01 to £595

  plus 1 per cent above £595

  Employees' contracted-out rebate

  1.6 per cent

  Married women's reduced rate

  4.85 per cent from £89.01 to £595

  plus 1 per cent above £595

  Employers' secondary Class 1 rate

  12.8 per cent on earnings above

  £89

  Employers' contracted-out rebate,

  3.5 per cent

  Salary-related schemes

  Employers' contracted-out rebate,

  1 per cent

  money-purchase schemes

  Class 2 rate

  £2

  Class 2 Small Earnings Exception

  £4,095

  Special Class 2 rate for share

  £2.65

  fishermen

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non- Voted

  Change

  New DEL

  Of which: Voted

  Non- Voted

  77,954

  2,601,986

  2,252,799

  349,187

  38,531

  168,086

  0

  The change in the resource element of the DEL arises from the draw down of £78,102,000 administration costs EYF, and additional income for VOA services.

  The change in the capital element of the DEL arises from the draw down of capital EYF and non-discretionary EYF, totalling £37,631,000 as set out in the Public expenditure Outturn White Paper (CM5574). It also includes the draw down of £900,000 from the Capital Modernisation Fund.

  Resources (£) Change

  New DEL

  Of which: voted

  Non-voted

  Capital (£) Change

  New DEL

  Of which: voted

  Non-voted

  771,000

  128,236,000

  123,876,000

  4,360,000

  -1,003,000

  22,063,000

  22,063,000

  0

  The net increase in the resource element of the DEL is due to two factors. Firstly, there is an increase in Resource DEL due to the draw down of £1,021,000 in respect of Resource DEL end year flexibility arrangements. This is partially offset by a transfer of £250,000 in total to other Government Departments in relation to work to develop the Neighbourhood Statistics programme. The transfers comprise £97,000 to the Department for Education and Skills, £127,000 to the Department of Health and £26,000 to the Lord Chancellor's Department.

  The reduction in the capital element of the DEL arises from a transfer of capital costs of some £1,003,000 in total to other government departments in relation to
  28WS

  National Insurance Contributions, Proposed re-rating, April 2003 Item

  2003–04

  Special Class 2 rate for volunteer

  £3.85

  development workers

  Class 3 rate

  £6.95

  Class 4 rate

  8 per cent from £4,615 to £30,940

  plus 1 per cent above £30,940

  Class 4 Lower Profits Limit

  £4,615

  Class 4 Upper Profits Limit

  £30,940

  Inland Revenue (Departmental Expenditure Limits)
  The Paymaster General (Dawn Primarolo)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Inland Revenue Departmental Expenditure Limit will be increased by £77,954,000 from £2,524,032,000 to £2,601,986,000 and the administration costs limit will be increased by £78,102,000 from £2,566,610,000 to £2,644,712,000. The net administration costs limit is reduced by £218,000 from -£6,347,000 to -£6,565,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Office for National Statistics (Departmental Expenditure Limits)
  The Financial Secretary to the Treasury (Ruth Kelly)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Office for National Statistics Resource Departmental Expenditure Limit (DEL) will be increased by £771,000 from £127,465,000 to £128,236,000 and the administration costs limit will be increased by £771,000 from £126,666,000 to £127,437,000. The Office for National Statistics Capital DEL will decrease by £1,003,000 from £23,066,000 to £22,063,000. The impact on resources and capital are as set out in the following table:

  work to develop the Neighbourhood Statistics programme. The transfers comprise £1,000,000 to the Department for Work and Pensions and £3,000 to the. Department of Health.

NORTHERN IRELAND OFFICE

  Departmental Expenditure Limit
  The Secretary of State for Northern Ireland (Mr. Paul Murphy)
  Subject to Parliamentary approval, the Northern Ireland Office (NIO) will be taking a
  29WS
  2002–2003 Winter Supplementary Estimate. The effect this will have is to increase the NIO's DEL by £60,000,000 from £1,151,862,000 to £1,211,862,000 and the administration costs limit will be increased by

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non- Voted

  Change

  New DEL

  Of which: voted

  Non-voted

  55,000

  1,147,309

  1,147,309

  0

  5,000

  64,553

  64,553

  0

  The change in the resource element of the DEL arises from the draw down of £55,000,000 End Year Flexibility. This amount includes a total of £10,000,000 for administration costs.

  The extra resource costs cover a range of areas within the Department such as policing and security, central administration, political, criminal justice and prisons.

  The change in the capital element of the DEL arises from the draw down of £5,000,000 End Year Flexibility.

  The extra capital costs cover a range of areas within the Department such as policing and security, central administration, political, criminal justice and prisons.

  The increases will be offset by transfers charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

SCOTLAND OFFICE

  Departmental Expenditure Limits
  The Secretary of State for Scotland (Mrs. Helen Liddell)
  Subject to parliamentary approval of the necessary Supplementary Estimate, the Scotland Departmental Expenditure Limit (DEL) will be increased by £514,577,000 from £17,775,734,000 to £18,290,311,000, and the administration costs limit will be increased by £200,000 from £6,502,000 to £6,702,000.

  The DEL increase takes account of the following:
  a reclassification from AME into DEL of £5,400,000 for fire service pensions;
  an increase of £3,500,000 for safety cameras;
  an increase of £3,000,000 for the Aggregates Levy Sustainability Fund;
  the take-up of EYF by the Scotland Office amounting to £200,000; and
  the take-up of EYF by the Boundary Commission for Scotland amounting to £65,000.
  The DEL increase also includes the following transfers to and from other Government departments, amounting to a net increase of £2,412,000. These are;
  transfers of £2,763,000 from the Department for Trade and Industry;
  a transfer of £34,000 from the Home Office; and
  a transfer of £385,000 to the Department of Health.

  All of the increases add to the resource budget, and the capital budget of £100,000 is unchanged.
  30WS
  £154,716,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  The increases will be offset by interdepartmental transfers as detailed above, classifications or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

TREASURY

  Indirect Tax Revenues
  The Economic Secretary to the Treasury (John Healey)
  The Government's latest estimates of the revenue losses affecting VAT, tobacco duty and other indirect taxes, and the supporting methodologies, are set out in documents published today by HM Customs and Excise entitled 'Protecting Indirect Tax Revenues' and 'Measuring Indirect Tax Losses'. Both documents are available in the Libraries of both Houses.

DEPARTMENT OF TRADE AND INDUSTRY

  Offshore Wind Industry
  The Minister for Energy and Construction (Mr. Brian Wilson)
  I am pleased to inform hon. Members that I published on 22 November a consultation document proposing a strategic framework for the future of the offshore wind industry.

  This country is very rich in wind resources. Harnessing the wind to generate electricity means that we have a sustainable and secure long term supply of energy. An important added benefit is that generating electricity from the wind does not release carbon and other pollutants into the atmosphere. The wind energy industry is well established onshore and single turbines and larger wind farms are already generating electricity for homes and businesses.

  The wind resource out at sea is substantial and offers considerable potential for expansion of the wind energy industry. The offshore wind energy industry could make a significant contribution, perhaps as much as 50%, to meeting the Government's target that 10% of electricity supplies should be generated from renewable sources by 2010. Expansion on this scale would bring significant investment and job opportunities.

  The first step in realising this potential has already been taken when in December 2000 the Crown Estate invited the industry to apply for site leases for wind farms. The response was most encouraging. 20 wind farms are planned for various locations around the coast The first of these wind farms is expected to be constructed next year.

  Winter Supplementary Estimate
  The Secretary of State for Trade and Industry (Mrs. Patricia Hewitt)
  Subject to Parliamentary approval of

  Resources

  Capital

  Change

  New DEL

  Of Which: Voted

  Non- voted

  Change

  New DEL

  Of Which: Voted

  Non- voted

  3,707

  95,838

  95,838

  0

  0

  248

  248

  0

  The change in the resource element of the DEL arises from a transfer in resources from the Department of Trade and Industry to British Trade International of £2,000,000 in respect of the Global Partnerships programme; £156,000 in respect of the Pacific Rim Electronics Association (PREBA) and the Japan Electronics Business Association (JEBA); and take up of £1,551,000 of End Year Flexibility entitlement which is required to resource increased trade development activity in the English regions, including providing full support to new companies recruited to the Passport programme in 2002/03.

  The increase will be offset by transfers or changes to the DEL Reserves and will not therefore add to the planned total of Public expenditure.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Sustainable Development in Government
  The Minister for the Environment (Mr. Michael Meacher)
  I am delighted to announce that the "Sustainable Development in Government 1st Annual Report" has been published today. This replaces the Greening Government Annual reports of the last Parliament. The change in title reflects the Government's commitment to considering economic, environmental and social impacts of the operation of the Government Estate and in policy making processes.

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  1,100

  541

  541

  N/A

  600

  1,135

  1,135

  N/A

  The increase in the resource element of the DEL £1,100,000 arises from the take up of end of year flexibility of administration costs.

  The increase in the capital element of the DEL £600,000 arises from an investment in the development of a new financial model. This will be used in the next review of prices and will be shared with the industry and the website development costs.

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  +245,339

  1,842,196

  1,475,257

  366,939

  +77,667

  616,524

  519,141

  97,383

  32WS
  the necessary Supplementary Estimate, British Trade International's Resource DEL will be increased by £3,707,000 from £92,131,000 to £95,838,000. Within the DEL change, the impact on resources and capital are set out in the following table.

  The report is presented in two parts; Part 1 is a summary of the progress and achievements across Government against the commitments and priorities set out in the 3rd Annual Report on Greening Government last year; Part 2 of the report will be in the form of a database giving details of the performance of every department. The database will be available on the Government's Sustainable development website— www.sustainable-development.gov.uk/ar2002/ index.htm

  There is also an executive summary of the report which highlights major achievements and priorities. The information contained within Part 2 has been transferred to CD-ROM and placed alongside copies of Part 1 and the executive summary in the libraries of both Houses.

  Office of Water Services (Winter Supplementary Estimate)
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Office of Water Services DEL will be increased by £1,700,000 from £24,000 to £1,676,000 and the administration costs limits will be increased by £1,100,000 from £11,302,000 to £12,402,000.

  Within the DEL change, the impact on resources and capital are as set out in the following table:

  Department Expenditure Limits
  The Minister for Rural Affairs (Alun Michael)
  Subject to Parliamentary approval of the Supplementary Estimate, the Department for Environment, Food and Rural Affairs' DEL will be increased by £323,006,000 from £2,135,714,000 to £2,458,720,000, and the administration costs limit will be increased by £94,091,000 from £392,599,000 to £486,690,000. Within the DEL change, the impact on resources and capital are set out in the following table:
  33WS
  The change in the resource element of the DEL arises from: i) a draw down of £136,900,000 from the DEL Reserve for various Departmental priorities including FMD, ii) a take-up of our entitlement to £69,300,000 under End-Year flexibility, iii) a take-up of £2,000,000 programme resources from the November 2000 Flood Defence Package, iv) a switch of £12,100,000 programme resources to administrative resources, as agreed with Treasury, v) a transfer from RfRl to RfR2 of £128,000,000 in respect of England Rural Development Plan (ERDP), vi) a transfer of £70,000 programme resources to LCD for Countryside Rights of Way Act, vii) a transfer of £105,000 programme resources to DTI for the Farm Business Advice Service (FBAS) and, viii) to take-up transfers from ex DTLR of £37,114,000 held over from last year, ix) to take-up £200,000 programme resources from DfT for fishermen's training.

  Our EYF resource entitlement above includes £34,522,000 budget cover (non-Estimate) for the British Waterways Board (BWB), one of our Public Corporations.

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  No change

  53,598

  50,945

  2,653

  3,605

  10,855

  850

  10,005

  The increase in the capital element of the DEL arises from take up of end of year flexibility on the Capital Modernisation Fund. The increase will be charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

CABINET OFFICE

  Winter Supplementary Estimate
  The Minister of State, Cabinet Office (Mr. Douglas

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  -77,107

  206,444

  206,444

  –

  22,387

  54,715

  54,715

  –

  The change in the resource element of the DEL arises from Machinery of Government transfers of £113,301,000 to other departments; a claim on the reserve of £36,300,000 and an increase in the negative DEL of the Government Car and Despatch Agency of £106,000.

  The change in the capital element of the DEL arises from additions from the Capital Modernisation Fund of £15,000,000, transfers from the Home Office of £8,000,000 and Machinery of Government transfers to the Office of the Deputy Prime Minister of £613,000.

  The increases will be offset by inter-departmental transfers and charged to the DEL reserve and will not therefore add to the planned total of public expenditure.
  34WS
  The change in the capital element of the DEL arises from: i) a draw-down of £3,000,000 from the DEL Reserve for Departmental priorities, ii) a take-up of our entitlement to £59,667,000 under End-Year flexibility and, (iii) a take-up of £15,000,000 from the November 2000 Flood Defence Package.

  Our EYF capital entitlement above includes £8,461,000 budget cover (non-Estimate) for the BWB.

  The increase will either be offset by transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  Forestry Commission
  The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett)
  Subject to Parliamentary approval of the necessary Supplementary Estimate, the Forestry Commission's DEL will be increased by £3,605,000 from £60,848,000 to £64,453,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  Alexander)
  Subject to Parliamentary approval of the Winter Supplementary Estimate, the Cabinet Office DEL (Departmental Expenditure Limit) will be decreased by £54,720,000 from £315,879,000 to £261,159,000, the gross administration costs limit will be decreased by £75,614,000 from £240,227,000 to £164,613,000 and the net administration costs limit will be decreased by £ 106,000 from £3,028,000 to £2,922,000.

  Within the DEL change the impact on resources and capital are as set out in the table:

LORD CHANCELLOR'S DEPARTMENT

  Winter Supplementary Estimate
  The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton)
  Subject to Parliamentary approval of the necessary Supplementary Estimates, the Lord Chancellor's Departments (including Northern Ireland Court Service and Public Records Office) DEL will be increased by £67,866,000 from £2,833,287,000 to £2,901,153,000 and the administration costs limit will be increased by £20,315,000 from £695,799,000 to £716,114,000. Within the DEL change, the impact on resources and capital are as set out in the following table.
  35WS

  Resources

  Capital

  Change

  New DEL

  Of which: Voted

  Non-voted

  Change

  New DEL

  Of which: voted

  Non-voted

  TOTAL

  46,971

  2,777,230

  2,543,516

  233,714

  20,895

  123,923

  90,431

  33,492

  The change in the resource element of the DEL is the net effect of: take up of £1,000,000 administration costs from the Policy Innovation Fund; take up of £243,000 resources from the Invest to Save Budget; take up of £34,931,000 in relation to the Criminal Justice System (CIS) Reserve from the Home Office, of which £14,224,000 is administration costs; take up of transfers totalling £210,000 resources from the Home Office, of which £45,000 is administration costs; a transfer of £20,000 resources to the Home Office; a transfer of £4,322,000 resources from the Office of Government Commerce; a transfer of £26,000 resources from the Office for National Statistics; take up of Invest to Save Budget end year flexibility of £268,000 resources, of which £226,000 is administration costs; to take up end year flexibility of £3,820,000 administration costs relating to the Criminal Justice System (CIS) Reserve; and a transfer of £ 1,171,000 resources from capital grant utilising the 2 ½per cent, capital to resource allowance.

  The change in the Public Records Office resource element of DEL arises from: the take up of £1,000,000 administration costs from end year flexibility.

  The change in the capital element of the DEL is the net effect of: take up of £1,100,000 resources from the Capital Modernisation Fund for HM Land Registry; take up of £36,000 resources from the Invest to Save Budget; take up of £8,650,000 Round 1 Capital Modernisation Fund from the Home Office; take up of £8,000,000 in relation to the Criminal Justice System (CJS) Reserve from the Home Office; take up Capital Modernisation Fund end year flexibility of £4,215,000; take up of Invest to Save Budget end year flexibility of £65,000 resources; and a transfer of £1,171,000 to resource grant utilising the 2 ½ per cent, capital to resource allowance.

  The increases will be offset by inter-departmental transfers, increases to Appropriations in Aid and take up of End Year Flexibility entitlements and will therefore not add to the planned total of public expenditure.

TRANSPORT

  Airports
  The Secretary of State for Transport (Mr. Alistair Darling)
  In October, Kent County Council and Medway Council applied for a judicial review of the Government's decision not to include any options for new runways at Gatwick airport in the consultation on airport capacity. The Government had taken that decision after careful consideration of various factors, including our conclusion that it would be wrong to seek to overturn the legal agreement entered into by West Sussex County Council and BAA (then in government ownership), preventing construction of a further runway at Gatwick before 2019.
  36WS
  Yesterday, Mr Justice Maurice Kay held that the Government were wrong not to have included any options for new runways at Gatwick. However, the Court granted permission for the Government to appeal against this decision. Having considered the matter, I believe it would be wrong to extend the uncertainty that would inevitably result from a lengthy appeal process, and so I have therefore decided to accept the judgment. As a result we will include Gatwick in the consultation. This will regrettably mean that the publication of the White Paper will be delayed.

  I will make a further statement setting out how we intend to proceed shortly.

INTERNATIONAL DEVELOPMENT

  Winter Supplementary Estimate
  The Secretary of State for International Development (Clare Short)
  Subject to Parliamentary approval of the necessary Supplementary Estimate the Department for International Development DEL for 2002/2003 will be increased by £37,437,000 from £3,339,521,000 to £3,376,958,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

  The change in the resource element of the DEL arises from:
  a transfer of £40,000,000 resource from the Unallocated Subhead (RfRl: E3) to the Bilateral Subhead;
  to give effect to the transfer of £3,700,000 resource from the Central Reserve as a contribution to the Commonwealth Education Fund;
  to give effect to the take up of DEL end year flexibility of £28,757,000 resource on programme expenditure;
  a transfer of £20,000 resource to the Home Office representing a contribution to membership of the Group of States Against Corruption (GRECO);
  a transfer of £5,000,000 resource from the Foreign and Commonwealth Office to Global Conflict Prevention.

  The increase will be met by inter-departmental transfers or from the DEL Reserve and will not therefore add to the planned total of public expenditure.

  CDC
  The Secretary of State for International Development (Clare Short)
  The purpose of the public-private partnership for CDC is to maximise the creation and long-term growth of viable businesses in poorer developing countries, by making responsible investments and mobilising private capital alongside public funds. These objectives have remained constant since the 1997 and 2000 White Papers on International Development. CDC has made good progress in implementing the Investment Policy agreed in 1999, raising private finance and co-financing for investments in poorer countries, and introducing private sector
  37WS
  disciplines. This has been achieved in some of the most difficult markets and economic conditions for many years.

  In order to support CDC's progress and the mobilisation of increased private investment in poorer developing countries, I have recently approved two further proposals. Firstly, CDC's business will focus more sharply on regions (South Asia and Africa) and on sectors (power, Small and Medium Enterprises, and infrastructure) that are priorities for DFID and the achievement of the Millennium Development Goals. Following a review commissioned by the Board earlier this year, CDC is already implementing a new business plan approved by its Board, focusing on these areas. Secondly, CDC will be reorganised, separating into two corporate entities and a family of Funds:-
  an Investment Company (the existing CDC, with some amendments to its Articles), which would continue to own the cash and investment assets of CDC and its subsidiaries. The Investment Company will remain wholly-owned by the Government during the reorganisation, and will be responsible for ensuring that HMG's capital adheres to CDC's Investment Policy.
  a new Management Company will be formed during 2003, subject to regulatory and other procedures being completed. The Management Company will raise and invest capital from the Investment Company, other Development Finance Institutions and private investors, following responsible business principles and providing leadership and supervision of a family of Funds.
  The initial Funds will include Funds for Africa, South Asia, the power sector and the SME sector. Each Fund will be managed by a dedicated fund management subsidiary of the Management Company. The new Funds will be run on a commercial basis that attracts capital from private investors and Development Finance Institutions, to meet the Governments objective of increasing investment in poorer developing countries.

  The structure of a management company and a family of Funds is an accepted norm in the international fund management industry. The advantages of adopting this structure in CDC are as follows.
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  Each Fund would have its own focus and investment strategy, target rate of return, risk profile and other characteristics. Potential private investors will be able to identify Funds that fit into their own investment strategies. The structure also enables specialised managers to be allocated to each Fund, and for incentives to be directly linked to individual Fund performance.
  Under current management arrangements, there is no competition for the management of CDC's capital. In the medium term, the Investment Company will be able to procure investment management services on a competitive basis, and to invest in Funds launched by other companies as well as by the Management Company. The reorganisation will therefore lead to a more competitive market for the management of investments in poorer developing countries.
  The Government have concluded that, under current market conditions, we cannot obtain value for money from a sale of shares in CDC Group pic as currently constituted. We are currently exploring with our advisers an appropriate corporate and shareholding structure for the Management Company and its subsidiaries, including the possible participation of private institutions and employees. In the long term, it is possible that equity in the Investment Company could also be offered for sale, when the right conditions obtain.

  The Investment Policy will remain broadly unchanged. The CDC Universe will apply to both the Investment Company and the Management Company, as will the responsible business principles. The requirements that 70 per cent, of investments should be for poorer developing countries, and 50 per cent, for sub-Saharan Africa and South Asia, will apply to the Investment Company's capital but not to third party capital. The 50 per cent, target for sub-Saharan Africa and South Asia will no longer be an "aim", but will be placed on the same mandatory basis over five-year rolling periods as the 70 per cent, target.

  I have informed the Select Committee of these proposals, which I believe will enable CDC to mobilise increased investment in the poorer developing countries, and make a stronger contribution to our goal of eliminating poverty.

Preamble
The House met at half-past two of the clock: The CHAI RMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

NHS:Work Permits
Baroness Gardner of Parkesasked Her Majesty's Government:
How many fast-track visas for skilled workers have been issued for people to work in the National Health Service and what National Health Service criteria are considered essential for such a visa.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, during the past financial year, 24,272 work permits were issued to workers employed in the United Kingdom in a shortage healthcare occupation. Those workers will be employed in both the NHS and the independent sector. A panel of healthcare representatives has been created to advise Work Permits (UK) of the latest labour market and skills gap information.
Baroness Gardner of Parkes: My Lords, I thank the Minister for that Answer. Is the noble Lord aware that there is a problem in that some skills are simply not recognised? I have in mind an endodontist—that is, a person who carries out root canal therapies and treats the bottom end of teeth—who was admitted to this country some time ago under this visa system, but who suffered an additional eight weeks' delay because no one could find out what an endodontist does. Is the Minister considering producing a list in co-ordination with the immigration department so that people can more readily recognise the shortages of such specialist skills?
Lord Hunt of Kings Heath: My Lords, I am sorry to hear about that case. If the noble Baroness would care to furnish me with further details, I should be very happy to investigate the matter. In the list of occupations that are currently covered by the scheme, there is a definition section for "Additional Dental Specialties". Judging by what the noble Baroness has said, I believe that we need to look into the matter to ensure that it specifies all the specialties that need to be covered.
Lord Walton of Detchant: My Lords, no doubt the Minister is fully aware of the serious shortage of doctors in the NHS, not just in general practice but also in hospital specialties. Doctors who are nationals of member states of the European Union and who have qualified in those countries have the full right of entry into the United Kingdom. However, can the Minister assure us that the new arrangements for the
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registration of overseas doctors from other countries include the process of removing the bureaucratic rules that have prevented a number of them coming to this country? Further, have the Government had discussions with the General Medical Council in pursuance of that objective?
Lord Hunt of Kings Heath: My Lords, there is no doubt that the NHS requires many more doctors. We have made progress in that respect. There has been an increase in the number of consultants and GPs employed over the past four to five years. But, clearly, overseas doctors have always come to the UK. They have always provided great service, and we wish to encourage that process in the future. I can respond in the affirmative to the noble Lord's final question. He will know that the Government and the GMC are currently discussing these matters. We wish to see as streamlined a process as possible, and one that is commensurate with the public interest and public safety.
Baroness Noakes: My Lords, five years after Nelson Mandela made an appeal to stop the recruitment of nurses from South Africa and despite the Government's own code of conduct, can the Minister explain why the number of nurses recruited from that country last year rose five-fold to over 2,000?
Lord Hunt of Kings Heath: My Lords, the noble Baroness is right to raise the question of our policy towards developing countries. Indeed, we are firmly committed to ensuring that National Health Service employers do not target developing countries for recruitment, and that they work only with commercial recruitment agencies that adhere to our code of practice. In the year 2001–02, I believe that over 2,000 nurses from South Africa were registered by the nurses and midwives' council. But many of those will have applied for such positions as individuals, will have responded to advertisements, or will have been recruited by the private sector.
The noble Baroness may shake her head, but we have repeatedly told the NHS that we will not allow the service to undertake proactive campaigns in South Africa. We have a code of practice. If private recruitment firms are in breach of the code of practice, we shall remove them from it. Equally, if individuals from that country apply to work for the NHS, they have the right to do so.
Lord Patel: My Lords, can the Minister say how many overseas medical specialists have been recruited thus far? Further, can the noble Lord say whether the Government will be able to meet their targets?
Lord Hunt of Kings Heath: My Lords, we are very confident that the initiatives that we are taking will enable the NHS to meet the needs and increase the capacity of the service. In terms of staff increases, there has been a large increase in training places in this country. As regards the number of consultants, there has been an overall increase from 21,370 in 1997 to

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over 26,000 this year. As for international recruitment, current figures for entrants to the GMC register from the EEA and the non-EEA show encouraging signs of increase. A number of initiatives are bringing in more doctors; for example, we have seen 23 GPs from Spain in post, with nine arriving in the new year for induction. We have also received 6,198 expressions of interest as a result of the global recruitment campaign; 2,523 firm applications have been received, 904 of which have been sifted and are felt suitable for employment in the NHS, including 822 hospital doctors and 82 general practitioners.
Baroness Thomas of Walliswood: My Lords—
Lord Haskel: My Lords—
Noble Lords: This side!
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, perhaps we should hear, first, from my noble friend Lord Haskel.
Lord Haskel: My Lords, can my noble friend say how many of these doctors and nurses who come from overseas work here for a time to develop their skills and expand their knowledge and then return to their country of origin as better doctors and better nurses?
Lord Hunt of Kings Heath: My Lords, I cannot say how many nurses and doctors have come to the UK and then returned to their own country to take up health practice; it would be very difficult indeed to quantify those figures. What is absolutely clear, however, is that it is in this country's best interest to continue to recruit and retrain people from overseas. There is a long tradition of doing so. The health connection between the NHS and countries abroad has been very effective in expanding British health goods and establishing international contacts. Long may that continue.
Baroness Thomas of Walliswood: My Lords, although one might welcome the recruitment of doctors from overseas so long as it is not a substitute for training our own doctors in this country, are there not also some dangers such as increasing competition—if that is the right word—from other advanced nations also seeking doctors in the same pool? What is the Minister's attitude to the proposed directive on mutual recognition of professional qualifications, which apparently will allow EU doctors to come to this country and practise for 16 weeks without registration?
Lord Hunt of Kings Heath: My Lords, we have some concerns on the latter point which we are discussing with other EU countries. More generally, it is true that a number of countries are seeking to recruit internationally. The NHS's success is ensuring that we have a very good recruitment campaign and that, when nurses, doctors and others come from overseas, they are treated well and supported well in the NHS.

Buses
2.44 p.m.
Baroness Scott of Needham Marketasked Her Majesty's Government:
What action they propose to take in view of the fact that, outside London, bus passenger numbers have declined by 1.5 per cent for the last year for which figures are available, while the targets set in their 10-year plan predicted an increase.
Lord McIntosh of Haringey: My Lords, bus patronage is continuing to increase nationally, following decades of decline. At this early stage in the 10-year plan, most of the growth is in London; but some other areas are also achieving significant growth, especially where Quality Partnerships are providing imaginative solutions to the problems of congestion. Projected expenditure by local authorities on bus priorities should make a substantial contribution to bus patronage over the next few years. The Government are working with local authorities and the industry to identify how to reproduce the best results more widely.
Baroness Scott of Needham Market: My Lords, are the Government actively considering proposals from the bus industry for a pump-priming fund to develop new services outside town centres? Given current levels of traffic congestion, does the Minister not agree, in principle at least, that investment in measures to reduce reliance on the private car can only be a good thing?
Lord McIntosh of Haringey: My Lords, I can answer yes to both questions. Certainly we are receptive to any suggestions from the bus industry or from local authorities—and very often from both of them together—for new ways of increasing bus ridership. The noble Baroness, Lady Scott, is of course right on her second point.
Viscount Astor: My Lords, can the Minister clarify the Secretary of State's announcement yesterday that a czar for transport is to be appointed? What will be the czar's role? How will he be more successful than all the other czars the Government have appointed in the past few years?
Lord McIntosh of Haringey: My Lords, I have a personal difficulty with the word "czar" which takes me back before 1917 and in a direction in which I would not wish to go. No, I do not have anything to add to what the Secretary of State said yesterday.
Lord Berkeley: My Lords, does my noble friend agree that the disparity between the increase in bus patronage in London and the much slower increase or even decrease elsewhere may have something to do with the fact that politicians in this House and in another place show little interest in the subject because they very rarely use buses except in London? Does he

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also agree that there is much to be said for introducing franchise services—as have operated for some years in London—across the country? Would that not increase the stability and frequency of bus services outside London?
Lord McIntosh of Haringey: My Lords, I thought that my noble friend Lord Berkeley was a cyclist, not a bus user—and very brave, too. However, one of the reasons why bus ridership is increasing in London rather than in the rest of the country is that Conservative governments privatised bus services outside London. They did not quite dare to do that inside London. Regulated bus services are indeed more efficient. There are other reasons, of course.
Lord Hogg of Cumbernauld: My Lords, I must first declare an interest. I am a consultant to the Confederation of Passenger Transport and chairman of the Bus Appeals Body, the consumer body for the bus industry in this country. Does my noble friend agree that the picture is much more patchy than is suggested by the 1.5 per cent figure and that there has been a marked growth in bus ridership in areas where there is close co-operation between local authorities and bus operators in bringing forward Quality Partnerships? Is there not a case for placing Quality Partnerships on a statutory basis so as to achieve an overall improvement in bus usage?
Lord McIntosh of Haringey: My Lords, my noble friend is entirely right. Quality Partnerships are working remarkably well in ensuring passenger growth. In Cheltenham, the five services covered have had increases of between 2 per cent and 9 per cent. In Greater Manchester, with more than 50 partnerships, there has been 8 per cent passenger growth in the Bolton-Leigh corridor. I could produce similar figures for Harlow, Nottingham, Tyne and Wear, the West Midlands and elsewhere. Although statutory procedures cannot be ruled out for ever, the voluntary arrangements are working very well at the moment. We are keen and we have the resources to extend those partnerships.
Lord Bradshaw: My Lords, Kick Start is a proposal to pump-prime the private sector during a 10-year contract to take over the running of marginally profitable bus services outside London. We must concentrate our attention on those services as they are losing passengers rapidly. Have the Government considered the proposal and is there any answer?
Lord McIntosh of Haringey: My Lords, as I said to the noble Baroness, Lady Scott, the Government are considering the proposal. Clearly, this is potentially a useful way forward. In rural areas car ownership is still rising. To that extent, bus services are, so to speak, swimming upstream.
Lord Pearson of Rannoch: My Lords, does the Minister agree that the double-decker bus is much loved, a draw to tourism and a very efficient way of
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moving people around our cities? Can the Minister give your Lordships any assurances as to its future and, if not, why not?
Lord McIntosh of Haringey: My Lords, why was the European aspect of the matter not brought out? Surely what the noble Lord, Lord Pearson, is saying is that he objects to the flexi buses that have been introduced in London that appear to be working rather well. He must object to them because they come from Europe. I am very fond of double-decker buses. As a member of the GLC transport committee in the 1980s I was instrumental in ensuring that the Routemasters were not scrapped for ever. I am glad to see that they are still with us.
Baroness Strange: My Lords, speaking as a parliamentary Cross-Bench London bus rider, does the noble Lord perhaps agree that people in the country have to carry more parcels on buses? Bus use is declining because people need cars in which to carry their parcels. In London you can do less shopping more often.
Lord McIntosh of Haringey: My Lords, I am not sure. That makes some sense. I quite see that rural bus passengers use buses for shopping, but my experience as a London bus user is that people use buses for shopping in London as well.
Lord Geddes: My Lords, is the well-known man from Clapham now a bus rider rather than a bus passenger?
Lord McIntosh of Haringey: My Lords, I used to use the word "ridership" when I was on the GLC'. I am sorry to find myself using the word "patronage". That is like talking about customers rather than passengers, which I think is deplorable.

Hong Kong
2.52 p.m.
Baroness Williams of Crosbyasked Her Majesty's Government:
What representations they have made to the People's Republic of China about the future implementation of powers under Article 23 of the Hong Kong Basic Law.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, my right honourable friend the Foreign Secretary raised the issue in July with Beijing and with the Hong Kong Special Administrative Region Government (SARG). My noble and learned friend the Lord Chancellor and my honourable friend Bill Rammell have discussed with senior members of the Special Administrative Region Government their proposals for legislation. We have

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made clear that any legislation must be compatible with the rights and freedoms set out in the Sino-British Joint Declaration on Hong Kong.
Baroness Williams of Crosby: My Lords, does the Minister agree that the United Kingdom is very much involved in the guarantees that were given to the citizens of Hong Kong with regard to their civil liberties and rights both in the Sino-British Joint Declaration of 1984 and in the Basic Law promulgated in July 1997? Is she aware that the consultative document put out by the Hong Kong Security Bureau contains a proposal that organisations banned, or whose financing is banned, on the mainland could be banned, and their financing stopped, in Hong Kong also, and that those organisations banned on the mainland include church organisations, Falun Gong, pro-democracy movements and, indeed, many newspapers and pamphlets? Does she agree with Amnesty International that the level of civil liberty detentions has increased sharply in China in the past year—that is also stated by Asia Human Rights Watch—and will the Government take any further steps to ensure that the liberties enjoyed by the people of Hong Kong, with great benefit to themselves, to us and to China, can be guaranteed effectively in the next few months?
Baroness Symons of Vernham Dean: My Lords, I agree that the British Government have very special responsibilities in this respect. I reiterated the British Government's adherence to those responsibilities when I addressed the Hong Kong Trade Development Council yesterday evening. The noble Baroness raises a particular point among the matters of concern in possible impending legislation which the British Government addressed specifically in the statement we issued only last week—on 18th November—under the name of the Consular General in Hong Kong. We now hope that the SAR Government will provide full and detailed public consultation on draft legislation. It is very important that we now see this draft legislation so that more informed comments can be made on what may be proposed.
Lord Elton: My Lords, is it not the case that what is being published is a blue Bill, not a white Bill, and that consequently amendment of it will be very restricted once the Bill is published? There will not be the opportunity to remedy any defects once it is published. Can the noble Baroness therefore say what steps Her Majesty's Government are taking to ensure that those aspects of the Bill which are clearly outside the provisions of the Joint Declaration are removed before it is published?
Baroness Symons of Vernham Dean: My Lords, we hope that we shall have opportunities for further consultation whether that is through a white Bill or some other mechanism. As I indicated, we issued a statement last week that mentioned not only the point raised by the noble Baroness in relation to proscribed organisations but also other matters of concern
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including freedom of the press and extraterritorial legislation. We have already asked the Hong Kong SAR to think again about any possible proposals with regard to those issues. We have said that we think further consultation is important.
Lord Marsh: My Lords, does the Minister agree that Hong Kong and some of the demonstrations that take place there are a matter of considerable concern to China within whose territory Hong Kong now is? Whether it be right or wrong, these propositions are highly sensitive and it really does not help to try to treat one of the world's major powers as if Hong Kong were still a colonial offshoot.
Baroness Symons of Vernham Dean: My Lords, of course these are matters of major concern to China. Her Majesty's Government recognise the sensitivities in that respect. Her Majesty's Government also recognise that it would be quite wrong not to acknowledge the importance of the agreed handover arrangements that laid down specific rights and freedoms for the people of Hong Kong. This is a matter for the Hong Kong SAR to pursue but, as with any mature relationship, the British Government have felt it necessary to register some concerns. We acknowledge that the position of China is extraordinarily important in this respect.
Lord Avebury: My Lords, do we not have a continuing obligation under the Sino-British Joint Declaration to ensure that legislation passed in the Hong Kong SAR is compatible with the international covenants and thus with the Basic Law? Will the Government therefore suggest to the Hong Kong SAR that the draft legislation be submitted for an opinion to the High Commissioner for Human Rights in Geneva before it is laid before the legislature?
Baroness Symons of Vernham Dean: My Lords, as I hope I made clear, as a co-signatory to the Sino-British Joint Declaration on Hong Kong we in this country have a responsibility to ensure that the rights and freedoms enshrined in the Joint Declaration are maintained. We take the Joint Declaration responsibilities very seriously. They include freedom of expression, freedom of assembly and freedom of speech among other issues. I reiterate that two senior Cabinet Ministers, my noble and learned friend the Lord Chancellor and my right honourable friend the Foreign Secretary, have made our concerns clear. We hope that we shall be able to resolve this matter satisfactorily in the discussions that we hope to have.
Lord Dubs: My Lords, is my noble friend aware that many people in Hong Kong will derive comfort from the representations that the British Government have made on this issue? I applaud that. Will she also ensure that we are kept informed of the outcome of further discussions with the authorities in Hong Kong and in Beijing?
Baroness Symons of Vernham Dean: My Lords, I am of course aware that many people in Hong Kong take comfort from that. That is why I made a particular point of referring to these issues yesterday evening when I made a speech that was largely about commercial issues. I felt that it was important to focus on current matters of concern.
Lord Moynihan: My Lords, pursuant to the—
Lord Williams of Mostyn: My Lords, we must move on now.

Rabies
3 p.m.
Lord Forsyth of Drumleanasked Her Majesty's Government:
What action they are taking following the reported death from rabies of an animal welfare worker in Scotland.
Lord Hunt of Kings Heath: My Lords, following the tragic death of a 55 year-old male from rabies, a review of the procedures for handling such rabies cases and of the implications for public health has been put in place. The advice of an expert group of the Advisory Committee on Dangerous Pathogens on the assessment of the risks to health is also being sought.
Lord Forsyth of Drumlean: My Lords, I am most grateful to the Minister for that reply. David McRae's tragic death is, I understand, the first recorded death in this country for more than 100 years as the result of a bite from an animal infected with the rabies virus. Does the Minister have any idea how the rabies virus came to be in a Daubenton's bat in Tayside? I understand that last month a case was recorded in which the same virus was present in a hat in Lancashire. Should there not be a comprehensive survey of all species of bat to establish the degree of infection and how it is spreading? Finally, given that hats are a protected species and that people are required to be licensed to work with them, should it not be a mandatory part of licence approval that such workers are vaccinated against the virus infection? What are the implications of those cases for our rabies-free status in the United Kingdom?
Lord Hunt of Kings Heath: My Lords, there are no implications as such for our status because the status does not relate to the particular virus affecting bats; it relates to the classic category of viruses affecting dogs and cats. There can be no room for complacency. I agree with the noble Lord that we need to step up our surveillance. DEFRA is planning to conduct a survey on live bats next year. Originally, it was going to be concentrated in the South of England but, in light of the incidents in Lancashire and Scotland, officials are now considering ways of extending that survey.
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On the issue of licence holders, I very much agree with the noble Lord's sentiments. My understanding is that that is under review by the body that issues licences in Scotland. In England, the body concerned has moved to make it mandatory.
Baroness Masham of Ilton: My Lords, is the bat population on the increase? Is it not difficult to conduct a survey when bats fly back and forth from other European countries?
Lord Hunt of Kings Heath: My Lords, my understanding is that the population of bats is estimated—it has to be an estimate—to be about 2.5 million to 3 million. It is a protected species under the Wildlife and Countryside Act. We need to establish whether we can find out more about the habits of the bat. On migration, bats may be able to fly across the Channel, and they have been found on oil rigs and put into quarantine. It is possible that they could land on a ferry coming into this country. There are a number of avenues by which bats could come from other countries to this country.
Lord Greaves: My Lords, we are dealing with the European bat lyssavirus. Some noble Lords will no doubt use that to fuel their suspicions about all things European being undesirable and rather nasty. We all very much sympathise with David McRae and his friends and family. Is it not the case that this is the first instance in the past 100 years in which anyone has caught this virus? The testing of hats has been taking place over the past 15 years, and out of 3,000 tests only two hats have been found to possess the virus. Will the Minister give us an assurance that the Government will do all that they can to dampen down any hue and cry about bats in the popular press? Bats are a protected species. They are not, by and large, a danger to human beings. Will the Government tell us what they are doing to ensure that local authorities and other local organisations know what advice to give and where to send people for advice if they ring up and say that they have found bats in their belfry, attic or wherever?
Lord Hunt of Kings Heath: My Lords, so far as advice is concerned, there is information, as ever, on the DoH website. The Public Health Laboratory Service also has advice. I would also recommend persons concerned to contact the Bat Conservation Trust. I agree with that sentiment. The risk to the general public is very low. A vaccination is available. If anyone is bitten by a bat they should seek immediate advice from their general practitioner. However, we should keep this issue in a certain degree of proportion.
Baroness Carnegy of Lour: My Lords, I live within seven miles of Guthrie, where this unfortunate man was bitten. The farm buildings by my house are full of several hundred bats. There is nothing that we can do about that. I do not know what type they are. A number come into my house every summer and I have

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to pick them up and put them out of the window. I hope that the Minister will tell me two things. First, does he know whether a leather glove is adequate protection when one does that? I believe that our neighbours should be glad to know. Secondly, does he know whether the sheep and cattle in our agricultural area are safe from this particular infection from bats?
Lord Hunt of Kings Heath: My Lords, my advice is that cross-species infection is extremely unlikely in the case of a particular virus affecting bats, although one could not absolutely rule it out. On the bats in the noble Baroness's sheds and belfries, I advise her to wear protective gloves. I shall seek advice and write to her about whether her garden gloves are sufficiently strong; I should imagine that they are. If she were bitten by a bat, she should immediately clean the wound with soap and water. Additional cleansing of the wound site with an alcohol base or other disinfectant is also recommended to the noble Baroness. She should then go and see her general practitioner.
Lord Gordon of Strathblane: My Lords—
Baroness Oppenheim-Barnes: My Lords—
Lord Williams of Mostyn: My Lords, it is too late for more bats. We must move on.

Marine Environment: "Prestige" Incident
3.8 p.m.
Lord Dubsasked Her Majesty's Government:
What action they propose to take to safeguard the marine environment in the light of the recent sinking of the oil tanker "Prestige" off the coast of Spain.
Lord McIntosh of Haringey: My Lords, following the "Braer" and "Sea Empress" oil tanker incidents in the 1990s, the Government have been active in safeguarding the United Kingdom's seas and coasts. For example, we have introduced ship routing and reporting measures. We have cover all the year round from emergency towing vessels and we have the Secretary of State's representative for maritime salvage and intervention to co-ordinate emergency action.
For the future, we are working to implement the recommendations of the National Audit Office's report Dealing with Pollution from Ships; we will soon issue a consultation document on marine environmental high-risk areas; and internationally we are working to ensure that all existing maritime pollution compensation and liability conventions come into force as soon as possible.
Lord Dubs: My Lords, I am grateful to my noble friend for his Answer. Does he agree that the sinking of the oil tanker "Prestige" represents an enormous
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environmental disaster? It is far worse than that caused by the "Exxon Valdez". Could he say a little more about the move by the Government to achieve quick and agreed standards, such as restricting access to European or British waters merely to vessels that have double hulls?
Lord McIntosh of Haringey: My Lords, certainly, the "Prestige" is a serious disaster. The quantity of oil involved—77,000 tonnes—is far greater than in earlier examples we have quoted. It is not necessarily true that all of the oil escapes. We hope that some of the oil from the two parts of the ship which are on the sea floor will not escape. As regards European initiatives, we are talking with the European Commission. As I said in my original Answer, we are keen on international action. Our own national contingency plan is based on the international convention of 1990.
Lord Mackie of Benshie: My Lords, is it not the case that all such accidents with tankers have involved vessels registered in some remote Caribbean island?
Lord McIntosh of Haringey: My Lords, no; the "Prestige" is registered in the Bahamas, which has in place a good regulatory regime. That is not true of all flags of convenience, but that is not the case for the Bahamas. I neglected to answer the part of the Question regarding single and double-hulled ships. We have been very active in accelerating the phasing out of single-hulled tankers, as agreed by the International Maritime Organization. The deadlines have been significantly speeded up.
The Lord Bishop of Portsmouth: My Lords, is not the heart of the matter that environmental crime is social crime and not some vague notion in the abstract? Should not that be the basis in international law for shipbuilding and penalties which might ensue from this regrettable incident?
Lord McIntosh of Haringey: My Lords, the first emphasis has been on seeking compensation, rather than on seeking penalties. International conventions to which both oil companies and shipowners are signatories provide liability funds. That must be the first priority. It is up to them to seek to recover their costs from the polluters; I am sure they will. This is an exact enactment of the "polluter pays" principle.
Lord Renton: My Lords, was not the disaster caused mainly by the oil tanker being much too long? Should not there be an international law which limits the length of oil tankers?
Lord McIntosh of Haringey: My Lords, I do not know whether that is the case. I am reluctant to comment on the case of the "Prestige" when investigations are ongoing.
Baroness Howarth of Breckland: My Lords, does the Minister agree that while there is a real danger from oil spillage, there are even longer-term problems for the

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environment within our seas and the deterioration that needs to be tackled along our shores? Those were well identified by English Nature in its excellent recent publication on marine life. Can the Minister tell the House what action the Government intend to take on its recommendations?
Lord McIntosh of Haringey: My Lords, I would love to do so, but the Question concerns the recent sinking of the oil tanker. We shall have to deal with the wider issue raised by the noble Baroness, Lady Howarth, on another occasion.
Lord Hardy of Wath: My Lords, can my noble friend confirm reports in the press that this tanker was found to be defective while in other ports? Given the grim reality and near regularity of such disasters, is there not a need for an international obligation to be arranged so that where a tanker is found off any state to be defective, it is not allowed to continue its voyage or to embark upon another until such defect is remedied?
Lord McIntosh of Haringey: My Lords, again I am reluctant to comment on the particular case of the "Prestige". However, the wider issue raised by my noble friend is relevant to the question asked by the noble Lord, Lord Mackie. If there are defects in the registration regime of some of the flags of convenience, the remedy lies primarily in controls at ports. We have very strong controls in our own ports, as do many other developed countries, to ensure that defective ships which come from inadequate registration regimes are detained where necessary.
Lord Wallace of Saltaire: My Lords, is it not time to consider the question of flags of convenience? We now have a financial action task force which has been successfully considering offshore financial centres. The whole system of flags of convenience appears to be a way of escaping regulation. Cannot the British Government make an initiative to have a multilateral investigation into how we might tighten up that system?
Lord McIntosh of Haringey: My Lords, I am sympathetic to that suggestion, particularly as I discovered that Cambodia has a flag of convenience but no coastline. In answer to the noble Lord, Lord Wallace, yes, of course, but he will recognise that that would be a long-term exercise. In the mean time the port controls to which I referred are perhaps the most practical way forward.
Lord Burnham: My Lords, can the Minister comment on the serious doubts which have been expressed about the qualifications of many Merchant Navy officers of various nations, including officers of
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British flagged ships?
Lord McIntosh of Haringey: My Lords, no, I cannot. I do not know to which particular case the noble Lord, Lord Burnham, refers. If he cares to let me know I shall seek an answer for him.

Business
Lord Grocott: My Lords, with the leave of the House, at a convenient time after 3.30 p.m., which I expect will be following the third speech of today's debate—the speech of the noble Lord, Lord Smith of Clifton—my noble friend Lord McIntosh will repeat a Statement on the Pre-Budget Report.

Patients' Protection Bill [H.L.]
3.16 p.m.
Baroness Knight of Collingtree: My Lords, I beg to introduce a Bill to prohibit the withdrawal or withholding of sustenance with the intention of causing the death of a patient. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time—(Baroness Knight of Collingtree.)
On Question, Bill read a first time, and to be printed.

Voting Age (Reduction to 16) Bill [H.L.]
Lord Lucas: My Lords, I beg to introduce a Bill to reduce to 16 the voting age in parliamentary and other elections. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Lucas.)
On Question, Bill read a first time, and to be printed.

University Finance
3.17 p.m.
Lord Baker of Dorking rose to call attention to the financial situation of British universities; and to move for Papers.
The noble Lord said: My Lords, I must apologise for my husky voice which will be more painful for your Lordships, having to listen to it, than it is for me in making my speech.
This House has debated universities twice in the past two years: first in December 2000 under a Motion tabled by the noble Lord, Lord Jenkins of Hillhead, who asked me to apologise on his behalf today as he is abroad; and in June 2001 under a Motion which I tabled. On both occasions Members from all sides of the House argued strongly that the Government

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should concentrate on the financial crisis that was beginning to hit universities and do something about it. It is a matter of regret that so little has been done.
I am sure that the Minister will say that in the last triennium the Government have increased expenditure in real terms. However, that is totally inadequate. Universities UK, of which the noble Baroness, Lady Warwick, is chairman, has estimated that the funding gap for universities is £10 billion. That has not been challenged by any Minister. Indeed, the new Secretary of State for Education, Mr Clarke, accepted in public that the gap for capital spending in universities is £5 billion. Independent consultants reckon it is about £7 billion or £8 billion.
There is an urgent need for universities to receive, each year for the next five years at least, an extra £3 billion. That is totally and utterly unrealistic. This debate will be interrupted by a Statement saying that the Government's finances are getting into the red and that borrowing will increase this year and next. There is not enough money in public funds, the public sector and the public kitty to meet the demands of universities.
It is regrettable that the spending review keeps being postponed. Not only has it been postponed from summer to early autumn, then to late autumn, Christmas, and now to January, but universities do not know what their budget will be for next year. That is a disgraceful situation. When it comes to universities, it is not "Education, education, education" but "Dither, dither, dither".
As a result of such underfunding, the decline in universities is now apparent. Classes get larger; there is less individual tuition; research facilities are not updated as they should be; and libraries are underfunded. Salaries are a disgrace. For a 30 year-old person to be offered a post at Oxford, Cambridge or one of the other universities, at £24,000 a year with two degrees—one a postgraduate degree—is absolutely disgraceful and should not be accepted in our country. Members of Parliament pay their secretaries more. As a result, there has been a gradual decline in academic salaries of 40 per cent. If any group in our society needs a 40 per cent rise, it is not the firemen; it is academic staff.
When universities decline, they do not suddenly drop over a precipice. It is a little like a scene from an Edwardian novel: they adjust slowly to reduced circumstance—all the little pretences of shabby gentility, of slow accommodation to a lower standard of living—always hoping that the situation will not prove quite as bad as it really is.
Where do the Government stand? In the two previous debates Front-Bench spokesmen rejected top-up fees. I am glad to see that the Government are moving on this. There is now a general debate about what one should do about the universities. The Government have published on their website a very interesting consultative document that covers the possible ranges of what can be done.
Margaret Hodge, the Minister for higher education, has said very clearly that as graduates earn substantially more—about £400,000 over their lifetimes—as a result of being graduates, it is only right that they should pay something towards their education; exactly the argument I used in 1988 when I introduced student loans. So there is some movement.
I have been rather encouraged by articles that have appeared and the interviews that Mr Clarke has given. He recognises that something has to be done. He does not mind using the word elite. That is a change. The word "elite" always stuck in the gullet of the noble Baroness, Lady Blackstone. But the Government now recognise that there are certain elite research institutions in our country and that they need attention.
Therefore, what should I say to Government? First, I urge them not to make the situation worse by having a target of 50 per cent participation by the year 2007–08. That is an absurd target. What does it mean? It means another 362,000 students. It means, as the Minister can perhaps tell us when she replies, another 17,000 academics. How—I say this directly to the Minister—is she going to attract 17,000 more academics into one of the most lowly paid professional groups in the country? It is simply not going to happen. We should recognise that.
So how should universities he funded? I am not dealing here with research; that is a quite separate matter. As regards teaching, universities should continue to get what is called the teaching grant. That is the per capita sum which universities receive for students. Currently, they get £2,800 for humanities, £5,600 for science and £12,600 for medicine. I introduced the per capita funding for students rather than the old grant because I envisaged that over the years it would develop into a student's entitlement. Therefore, when a student was qualified, he would have that entitlement to take with him to a university of his choice. I believe that that is how it should happen.
That system should please the Treasury. It has total control. It controls the amount per subject—£2,800 for humanities and £5,600 for science—and it controls the numbers that are available each year. That should continue to be the public contribution to universities. But, on top of that, I believe that universities need to charge top-up fees.
When I started advocating that system four or five years ago, I was rather a lonely voice. Now there are many people in the university world—not just from the leading universities of our country but right through the whole university body—in favour of it.
Universities are not unfamiliar with top-up fees. Overseas and post-graduate students pay top-up fees. Indeed, the universities should recognise the contribution that my noble friend Lady Thatcher made to this issue. In 1981 she was vilified for saying that overseas students should pay full rates. By that action she saved the financial position of most universities in our country, not a role that has been fully recognised in her record.
So universities are used to charging top-up fees. But so far as the Government are concerned, top-up fees start at Kuala Lumpur. So parents in Kuala Lumpur can pay top-up fees whereas parents from Kidderminster cannot. That presents an ethical and interesting position for the Government because if top-up fees are discriminatory, harsh and disruptive of social harmony, those effects would be felt in Kuala Lumpur just as they would in Kidderminster. So the Government accept top-up fees so long as the person paying is not British. But of course British postgraduates pay top-up fees.
One of the advantages of that fee relationship is that one establishes a customer-contractor relationship between the student and his or her chosen university. So the public service, which is the university, is answerable to its users. I have heard endless Ministers saying that that is what they want to do with public services. They want to make the public service answerable to its users. This is a way it could be done.
Therefore, I favour a system whereby universities are allowed to charge top-up fees. Some will say, "Well, the elite universities will charge a large amount". That in a way is an opportunity for those universities that are not elite because they will be able to charge lower fees for their own excellent and very good courses.
The question then arises: how should the fees be paid? The days of free higher education are well and truly over. I believe that the obligation should be on students to pay. The fees would accumulate as a loan over the period of three or four years. They would not be repayable until the student had graduated; and they would bear a low rate of interest. That is exactly how student loans are dealt with today. They are called "income contingency loans". As student loans operate today, a graduate will not repay any of the loan unless he earns £833 a month—£192 a week. We agree on those figures. Above that level, the employer deducts 9 per cent of the excess and pays it to the Inland Revenue, which eventually pays it to the student loan scheme operators.
That system works very well. I believe that that is how it should operate in the future. I am strongly opposed to the idea of a graduate tax, which has suddenly become the flavour of the month. First, if one has a loan, one has a set amount. A medical student knows how much has been borrowed over the seven years of one's training; an historian knows how much has been borrowed over one's three or four years. It is a set amount. A graduate tax is an open-ended obligation right through life. So those who favour a graduate tax must answer many questions. Is the graduate tax intended to cover the cost of one's education at university? The cost of educating medical students is over £20,000 because they need wonderful equipment. Today, as I passed the Marsden hospital on my way here, I saw that early next year it is to use a new clinical machine costing £2.4 million. That is the true cost of education for a medical student.
Someone who studies to be a philosopher needs lots of plain paper, a pencil and possibly a rubber. Some actually would not need the rubber. So is a graduate
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tax fair? Should someone who is of minimal cost to the system pay the same as someone of maximum cost on the system? It is clearly unfair. There are other anomalies. The woman graduate who marries a fairly rich man and decides not to work does not pay graduate tax as she has no income. Her sister who works for the NHS has to pay the graduate tax. These are the kinds of things that make a graduate tax absolutely inoperable.
What about those students who, after they graduate, work overseas? They have a free ride. No one will tax them. But if they have a loan they can be pursued for that loan. What will happen to postgraduates and late entrants in the graduate tax?
How will the universities benefit from a graduate tax? If the Chancellor is thinking favourably of introducing a graduate tax—an extraordinary development of a hypothecated tax, but never mind—how will it be paid to universities? He will say, "Trust me. I will make it up to you. It doesn't come in for 10 or 12 years". The universities should recall what he said to the museums: "Trust me", he said, "we'll do away with charging, and I'll make it up to you". There are more galleries closed in national and regional museums today than in our history. That is the deceit in the Government's promises.
Charles Clarke has said that he wants to encourage giving by alumni. Will alumni give to their university if they already have to pay a graduate tax? Of course, they will not. For all those reasons, I hope that the graduate tax will not be introduced.
Another way of covering students' loans, fees and living costs is for companies to pay off loans or part thereof. That is common practice in more and more companies. It is common practice for lawyers and accountants, and teachers now to have their loan paid off. I do not see why doctors should not have their loan, or part of their loan, paid off by the National Health Service. After all, that is the investment that has been made by the state in their education.
The last important element is that access to universities must be needs-blind. If we have a system of teaching grants and fees, we must also have an effective system of bursaries alongside it to ensure that there is proper social inclusion. I want to see more young people from the unskilled and low-skilled groups in our society going to university. We should not blame the universities for not getting them in. Only 7 per cent of the children from the unskilled and low-skilled socio-economic groups have 2 A-levels. The fault is not in the university admissions system; it is in the failure of the schools to prepare those young people for university. That is what should be addressed.
I believe strongly in social inclusion. How can we ensure it? There must be more bursaries. Our universities do not benefit from great endowment funds such as those of the American universities. The endowment fund of Harvard is 18 billion dollars; [hat is twice the amount of the total endowment funds of all our universities, built up over the past 100 years. What can we do to bridge that gap? The Government could do two things. First, access funds—now called

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scholarship funds—which I introduced now amount to £75 million a year. That money is given to universities to help students who cannot afford the fees. The amount should be at least trebled to £250 million.
Secondly, there must be a tax incentive to increase giving for scholarship funds. I can recommend a scheme that the Minister should take back to the Chancellor. If everyone was allowed to give up to £5,000 a year for three years—otherwise the erosion of Treasury income would be significant—and got a 100 per cent rebate on that, we would build up substantial endowment funds in a short time. The Minister will appreciate that that is a tax credit: the Chancellor likes those and goes on about them. That is an attractive tax credit for a good social end.
Our universities are important assets. They are among the West's oldest civil institutions. Some have lasted for centuries—as long, in some cases, as this House. It is important that we, as custodians of those institutions, do everything we can to enhance them and ensure that they make as great a contribution in the future as they have done in the past. However, the gap between them and the American universities is widening. The number of people contending for Nobel prizes has dropped dramatically since 1990. We are proud of our Nobel prize record, but the number is dropping. Why is that happening? In America, 3 per cent of the gross national product is spent on higher education; we spend half that. Half of the American spend is from the private sector. It is recognised in the United States that higher education is not just a public good but a private good. I suggest that we should also recognise that.
In all of this, I find the Government's policy confusing. Not only are the funds inadequate, but the Minister's department—the DfES—wants more students. The DTI wants world-class research. The Chancellor of the Exchequer wants laboratories for social engineering. The real trouble is that Gordon Brown treats universities as a nationalised industry—almost the last of our nationalised industries. They are underfunded, overcontrolled and bullied. I hope that Charles Clarke will wrest back from the Chancellor control over university policy.
I have put some ideas to your Lordships today—the teaching grant, fees, loans and bursaries. Unless such a pattern emerges, our universities will continue to decline. One of the great virtues of such a system is that universities would become independent again. In its 800-year history, Oxford has had state money for only 80 years—a tenth of its life. All universities—not just the Oxfords of this world, but the provincial universities too—now realise that they are interfered with and told what to do. Their admissions policies are interfered with, and there is endless measurement. Recently, I spoke to a young clinical researcher who was going to America. I asked him why he was going, and he said, "For three reasons: first, my salary will be more than doubled; secondly, the research facilities are
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better; and, thirdly, there is no government interference". Everyone in the university world wants to be free of government interference.
I hope that the Government will take the issue and act along the lines I have suggested. I know that it is politically difficult. I know that it is difficult to persuade the middle classes to pay more. Our job is to persuade the middle classes that, if they pay more, we can reinforce the excellence of our institutions and that that will be good for all bright youngsters, including theirs. That is the task, and I hope that the Government are up to it. I beg to move for Papers.
3.36 p.m.
Baroness Warwick of Undercliffe: My Lords, I declare an interest as chief executive of Universities UK. It is only a few days since I last spoke to your Lordships about the financial situation of the UK's universities. I am glad that that important subject is now receiving the attention that it deserves. I thank the noble Lord, Lord Baker of Dorking, for giving us all a chance to consider the issue in depth. It is a welcome sign of how seriously the issue is now considered that so many noble Lords wish to speak in the debate.
The most fundamental change that I have seen in recent weeks is that there now seems to be general acceptance that there is a real problem facing our universities. This week, the Economist said:
"That universities need more money is no longer controversial".
Rather than the Universities UK figure of nearly £10 billion over the next three years being seen as a sign that universities are in cloud-cuckoo-land, it is the benchmark for what is needed.
What is the problem? The starting point for any discussion is that universities have been seriously underfunded for more than 20 years. While I pay tribute to the noble Lord, Lord Baker of Dorking, for his thorough analysis of current problems, those problems certainly go back to the period of his government. Universities now face a major investment backlog. Universities UK set that out in its spending review submission, Investing for Success. The problems have not been relieved in recent years. This year, the sector faced a deficit of almost £51 million. That is now the status quo. If we are to provide the kind of university education that our young people need for the future, the status quo is no longer an option. The Secretary of State said last week, in the Independent on Sunday, that there is a backlog in capital investment alone of £5.3 billion.
I stress that it is not an issue facing England alone. Higher education throughout the UK is in a similar financial position. In Scotland, the Executive has announced new money in its spending review. That has, of course, been most welcome, but that money is concentrated on research, with not much left over for teaching. It is vital that the link between teaching and research is fully understood in Scotland, as elsewhere. Scotland, it seems, will have no new money to maintain teaching standards and no new money to

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implement the Disability Discrimination Act 1995 and the new pay arrangements. Scarce university resources will be stretched further.
In Wales, as in England, institutions do not yet know what they will get next year, let alone in the following two years. But institutions in Wales are also hindered by a plethora of competitive funding initiatives. That discourages the very collaboration that the Welsh Assembly is so actively seeking from institutions, as they have to compete against each other for scarce additional funding rather than work together, as they are being requested to do.
In Northern Ireland there is great concern about the lack of research funding in the draft Northern Ireland Budget. Today I have been in Westminster with representatives from Queen's and Ulster Universities, who have been here to meet noble Lords and Members of another place who represent Northern Ireland constituencies right across the political spectrum. They want to raise the parlous state of higher education research funding in Northern Ireland, which has been made a great deal worse by the fact that no funding whatever is available for the improved performance of both those universities as a result of the recent research assessment exercise. I hope that my noble friend will agree to pass on my concerns to the relevant Ministers in the Northern Ireland Office.
Meanwhile, in England, which falls within the direct remit of this House, we await the outcome of the Government's strategic review of higher education in, it is hoped, two months' time. What do universities need from that review? They wanted to be consulted. I am glad that the Government now have a more open approach to that issue. We now have a discussion paper. Although it contains issues on which I had hoped the department would have done some work over the past year—that probably sounds a little churlish—we very much welcome the opportunity offered by the paper to put our views.
What else do universities need? They need to know what new resources they are likely to get from the 2002 Spending Review. We had expected to know this month what the sector would get over the next three years. As the noble Lord, Lord Baker, has said, we shall not get that information until January. That places universities in a very difficult position. It is difficult for them to know how to plan activities in multi-million pound businesses when they have no idea at all of the income to be expected until only a few months in advance. It is therefore vital that there should be no further delay in the release of that information, and I hope that the Government will be able to confirm that.
Messages from the Government indicate that the £9.94 billion funding gap identified by Universities UK is not likely to be met from public funds alone. There are too many other priorities, and I respect that. Other ways of raising funds are needed. There is clearly a lively debate to be had. There is a wide range of opinions among vice-chancellors, about which the noble Lord, Lord Baker, has strong views, and I
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suspect that many options will be raised and pursued today. Indeed, Universities UK has offered advice on a range of options.
It is clear that, whatever solution is found to the funding crisis in our universities, public funding will remain at the core of the financial health of the higher education sector. No solution that places all its emphasis on private contributions can answer the needs of the whole sector. In my view, such a solution would lead to a two-tier system—the better off and the underfunded—which I and others would find wholly unacceptable. That kind of differentiated system would simply not deliver the high quality expansion opportunities that the Government clearly want.
However, rather than talk too much about what we need, perhaps I may explore the question of what the extra resources will be spent on. They are needed to maintain high quality higher education across the entire university sector. One of the less welcome aspects of recent debates on higher education has been the focus on so-called "top universities". In my opinion, that fixation cart be quite dangerous. No one would ever argue that all our universities are the same. However, that does not equate to some universities being good and others poor. Different universities offer different opportunities. Some are very involved in their communities; some are at the vanguard of efforts to widen participation to those from lower socio-economic groups; some concentrate on research. It is worth making the point that new universities produce world-class research in exactly the same way as do old universities. The noble Lord quoted the example of philosophy. I simply quote that of history at Oxford Brookes.
We need the resources to be able properly to pay those who work in universities, to adequately reward and motivate them for the hard work that they do, and to modernise pay structures. Recruitment and retention difficulties for both academic and support staff have worsened progressively over the past four years, and they continue to do so.
Were we to change the arrangements by which we award PhDs, as recently suggested in the press, we would find ourselves out of step with the rest of Europe at a time when we are setting up the European higher education area, since there are no other universities in Europe that do not award PhDs. Universities have delivered on widening participation, on research and on links with business and local communities, at the same time as funding per student has been reduced drastically by some 37 per cent.
I conclude with the words of the Secretary of State from his article in the Independent:
"We must not let our universities down and risk undermining their ability to build for the future".
We would certainly let down our universities, our students and the country if the solutions led to an entrenched two-tier system in which some institutions flourished and others withered. I therefore ask my noble friend to confirm that the results of the review will address the needs of the whole university sector, not just a part of it.
3.46 p.m.
Lord Smith of Clifton: My Lords, there has not been a coherent dialogue about British tertiary education for at least the past two decades. In congratulating the noble Lord, Lord Baker of Dorking, on initiating today's debate, it is to be hoped that it will trigger a wider public discussion on the subject. His perceptive speech should encourage that.
So I start by bewailing the absence of such a wider public debate. One looks in vain to any political party, even to the vice-chancellors or to the academic trade unions, for some glimmer of a more positive and holistic approach. Instead, all that one finds are stop-start disputations about funding. The Dearing Report of 1997 could have served to kick start a broad dialogue about the future of higher education, but it was largely ignored and now languishes in the dustbin of educational history.
In the mean time, the state of British universities has been allowed to move from bad to worse, as the two previous speakers have said, and their condition is now quite critical. No one has attempted to tackle the basic tension between, on the one hand, the pursuit of excellence and, on the other, the goal of widening access. The failure to address that question and related issues has been the root cause of the decline of our universities. It is no exaggeration to say—the noble Lord, Lord Baker, hinted at it—that the UK now lacks any multi-faculty university that can claim to be on a par with those of the Ivy League in the United States.
There are, of course, specialist institutions, such as Imperial College and the London School of Economics, that contain a large measure of international excellence, and many universities have so far managed to maintain varying amounts of research activity that can compete with the best in the world. As the noble Lord, Lord Baker, indicated, the slippage is to be seen in the decline in British Nobel Prizes for science. Thirteen were won in the 1970s, four in the 1980s, and only two in the 1990s. I repeat that there is now no multi-faculty university in Britain capable of competing with the Ivy League across the board.
Like transport, health and schooling, the universities have increasingly been underfunded for three decades. The implementation of the Robbins Report in the mid-1960s saw the last time that significant sums were injected into the universities. The present Government's new-found awareness of the crisis is to be welcomed, so far as it goes. However, they were warned about the gravity of this situation, as was stated in at least two debates in this House during the last parliament, but to no avail.
The recent realisation of how parlous the situation has become has led only to an analysis of the pros and cons of raising more money by means of big hikes in top-up fees, with more extensive loans or a graduate tax, means tested or otherwise. That is to define the debate on the future of the universities far too narrowly. A broader perspective is essential if we are to recreate a higher education system to fit us for the next 30 years, in which, of course, how it is financed is fundamental.
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Most noble Lords speaking today will concentrate on the relative merits of the different possible funding streams on offer. Clearly much more money is needed. On this particular subject, I will simply make two points. First, contrary to the views of the noble Lord, Lord Baker, which I found persuasive in certain respects, huge top-up fees and loans will seriously inhibit those from poorer homes and seriously impede wider access. Merely the perception of top-up fees of a huge kind will be enough to deter many people. Some form of means-tested graduate tax would be preferable, and at this stage of the argument I would opt for that, although I accept that there are many administrative difficulties in its implementation.
I wish to look beyond mere finance at the broader picture because that, too, has financial implications. We need to devise a more systematic approach to the future of higher education. It would be foolish as well as presumptuous of me to offer anything like a definitive blueprint. That can emerge only from a wide but urgent public dialogue. But I venture to sketch some likely items for the agenda of such a debate.
First, as I have said, must be the overall aim to square the circle between the pursuit of excellence and wider access to tertiary education. Those twin goals do not have to be mutually exclusive, as the academic Neanderthals of the Kingsley Amis school assert: more does not have to mean worse!
Secondly—and I stress this—given the limited resources of cash and staff, there must be both subject and level rationalisation, particularly in big science and technology if those are to be well founded. Universities need to specialise much more than they have already to maintain and improve research and teaching. That was done in the case of geology and materials science some years ago.
More needs to be done. If that is necessary for those two areas, it is even more necessary in the provision of business and management education. It has been a boom subject of the past two decades, it has experienced a bacterial growth and is, frankly, now in disarray. To use a football metaphor, the UK has one business school in the premier division, the London Business School, which can compete with the best in the US. We have none in the first division; three or four in contention for the second division; perhaps half a dozen in the third: with the vast majority in the bottom of the fourth, struggling not to be its Accrington Stanley. The general quality of the teaching, to say nothing of the research output of this last group, is abysmal. The better business schools should he encouraged to franchise their courses to the others, subject to adequate quality controls.
Thirdly, I referred to the level of provision. It really is highly questionable—and here I take issue with the noble Baroness, Lady Warwick—that all tertiary institutions should be able to offer the full spectrum from sub-degree courses to bachelor and masters degrees and doctorates. Other countries impose restrictions: junior colleges which offer sub-degree work and in some cases with bachelor degrees or modules that can be transferred towards such degrees

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elsewhere; intermediate institutions that offer bachelor degrees and masters; and senior institutions that are accredited to offer the full range of awards from bachelors to doctorates.
The junior and intermediate institutions are a vital driver in encouraging wider access and in that they can bat to their strengths. The senior ones should cater for excellence and they would recruit more able students both straight from school and also from the other institutions. What I have described is, of course, the Californian model, and similar systems are to be found in other states of the Union. They enable access and excellence to be pursued in tandem.
I would not recommend that such a system be incorporated wholesale into the UK, but it could be adapted. I believe that there is a case for some large-scale experimentation on a regional basis. That would, it is to be hoped, harness economies of scale. For example, in Yorkshire and the Humber, there could be created a regional tertiary education confederation. One could envisage the Universities of Hull, Leeds, Sheffield and York forming the top tier, with Bradford, Huddersfield, Sheffield Hallam and Leeds Metropolitan forming a second intermediate one, with various further education and sixth form colleges forming the third tier.
There are some embryonic prototypes already existing in the form of the research-based White Rose Partnership, consisting of Leeds, Sheffield and York, and a more inclusive regional, tertiary education forum. These could be built on. Who knows, they might even combine to form an internationally acclaimed business school for the region.
That kind of regional approach could be applied elsewhere; for example, to the North West, the North East, the East and West Midlands and the London area. The more outlying universities, without dense hinterlands, should be encourage to follow the model of the great American liberal arts colleges such as Smith, Vasser, Oberlin and Swathmore, where the finest undergraduate teaching in the world is now to be found. I confess that I do not know how to accommodate the distinguished University of Bristol in my scenario, but a solution might come from a full public debate.
There is not much time left to prevent a further rapid erosion of the university system in the UK. We need now to rehabilitate it and not shrink from the requirement for rationalisation.

Pre-Budget Report
3.55 p.m.
Lord McIntosh of Haringey: My Lords, with the leave of the House, I will now repeat a Statement which is being made in another place by the Chancellor of the Exchequer. The Statement is as follows:
"Last year, of the major economies the British economy was the fastest growing. This year, 2002, amid the worst global slowdown for nearly 30 years, the British and North American economies will grow faster than all other major economies.
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"I can report that next year, in 2003, Britain and North America are now forecast, even in an uncertain and unstable world, to continue to be the fastest growing of all the major economies.
"And today as I examine, in turn, world and British growth, the balance of the economy, including the housing market and the position of manufacturing, and the fiscal figures now and for the future, I will report that with inflation the lowest for 40 years and long-term interest rates also the lowest for 40 years, Britain's monetary and fiscal framework is meeting the challenges of each stage of the economic cycle, and we will tolerate nothing that will put our hard-won stability at risk.
"And as Britain meets the challenges of the wider global economy, the Pre-Budget Report will also outline further labour, capital and product market reforms to improve British science, skills and entrepreneurship; and proposals for continuing public sector reform and tax and benefit modernisation showing that both in Britain and abroad strong economies and fair societies move forward together.
"I start with the international economic outlook. Twenty of the world's biggest economies accounting for 60 per cent of the world's output—the United States, Japan, much of Europe and Latin America—have been in or are in recession after the sharpest slowdown in global economic activity for almost 30 years; indeed, the biggest contraction in industrial output in the world's major economies since 1975.
"World trade growth, which held up throughout both world recessions of the early 1980s and 1990s, fell 12 percentage points last year. And while trade growth resumed early this year, it has faltered yet again; one of the many reasons why at an international level the British Government are working for the early resumption of the world trade talks and why at a European level we must curb industrial and agricultural protectionism.
"While the present political and economic uncertainties—from the continuing aftermath of the September 11 tragedy; unfolding events in Iraq; the impact of oil prices; concerns about equities and corporate standards; continuing trouble in information technology; and current account imbalances—have caused business investment to fall sharply since 2000 in every major continent, the challenge for the British economy in this more uncertain and unstable world has been to steer a stable course, combining low and stable inflation with sustained demand growth and high levels of employment. With 175,000 more in employment in the British economy over the past year, and in total 1.5 million more workforce jobs since 1997. I can report that our unemployment rate this year is lower than in Japan, America and the euro area for the first time for 50 years.
"Our monetary and fiscal foundation, based on the independence of the Bank of England, imposes a symmetrical target for inflation; requires debt at low

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levels; holds to tough fiscal rules over the cycle; and is thus designed not just for times of high growth but for a global contraction with all its attendant difficulties.
"And it is because the Bank of England has established credibility through year after year meeting our 2½ per cent symmetrical inflation target that it has been able, supported by fiscal policy, to sustain growth.
"And it is this same symmetrical inflation target, designed to prevent both deflation and inflation, which explains why the Bank of England is not only rightly vigilant about the continuing weakness of equities, trade and investment, and G7 current account imbalances, but also vigilant about domestic risks, including the need for a sustainable housing market and for affordable pay settlements across the economy—public and private sector.
"We will continue to give steadfast backing to the Bank of England and the Governor, Sir Edward George, who retires next June, in all the difficult decisions that have to be made.
"And it is because we are determined both to have stability and value for money in reformed public services that—just as in the private sector—public sector pay rises must be set at a sustainable rate and justified by productivity. When inflation is around 2 per cent, we should not put our hard won stability at risk by yielding to inflationary and unaffordable pay settlements—whether they are in the private or public sector—that would put low inflation and low interest rates in jeopardy and damage the wider economy. To continue to steer a steady course we must hold firm in our demand for discipline in pay setting across the economy.
"Let me give the detail of the economic forecasts. I can report that inflation will meet our target of 2½per cent this year, and we now forecast inflation to be 2¼ per cent next year and 2½per cent from 2003 for every subsequent year of our forecast period—having met our inflation target in each of the last five years, continuing to do so in the future.
"With this platform of domestic stability and an expected world trade recovery, rising next year by an expected 5½ per cent, we can forecast consumption to grow in 2003 at a sustainable pace of 2¼ to 2½ per cent with the housing market slowing, and we forecast manufacturing output rising by 1¾ to 2¼ per cent and business investment by 2¾ to 3¼ per cent to make for more balanced economic growth.
"Across the industrialised world, including in Britain, since the further slowdown since this spring, forecasts for growth this year have been downgraded. In the euro area GDP growth is forecast to be 0.8 per cent; in France 1 per cent; in Italy 0.4 per cent; in Germany just 0.4 per cent; and in Japan minus 0.9 per cent. For the UK, GDP
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growth is forecast to increase by 1.6 per cent this year, rising to 2½ to 3 per cent next year, rising again to 3 to 3½ per cent in 2004.
"Some have argued that Britain is least well placed to cope with global slowdown. In fact, taking growth last year, this year and next year together, Britain is not the weakest but the strongest of all the major economies. And while Japan, America and Germany have all been in recession, Britain has now grown consistently in every quarter for the last five and a half years.
"As with monetary policy, so also our fiscal policy is designed to help sustain growth at every stage in the economic cycle, with our fiscal rules set for the long term and based on deliberately cautious assumptions, including for revenues.
"These assumptions, which are independently audited by the National Audit Office, mean that when stock market values fall we take this fully into account, not just in assessments of the current year's stamp duty, capital gains tax revenues and corporate tax returns, but build these falls fully into revenue projections for future years.
"And the assumptions include not only a cautious view of tax receipts from growth, of oil prices and of the impact of revenue gains from, for example, our VAT anti-fraud strategy, but cautious assumptions about unemployment, where we claim no social security savings when unemployment is forecast to fall.
"From 1997 we also took decisions to freeze spending for the first two years, achieving surpluses of £30 billion; to cut debt from 44 per cent of GDP to 36 per cent; to then use the £22 billion spectrum auction to repay even more debt; and to regularly achieve not only a current balance but a large surplus; in each year since 1997 meeting our two fiscal rules—with surpluses worth a cumulative £58 billion—and with debt far below 40 per cent of GDP and with debt interest payments £7 billion a year lower, consuming a smaller share of national income this year as last year than at any time since 1915.
"So while some have, in the past, criticised this long-term and deliberately cautious approach, we are, with current surpluses and historically low debt, able at every stage of the economic cycle to meet our fiscal rules, including in the cautious case.
"Let me provide the detailed figures. Figures for our current budget for this year, 2002–03, and for the five years to 2007–08, are minus £6 billion, minus £5 billion, plus £3 billion, plus £5 billion, plus £8 billion, and plus £10 billion. So we meet our golden rule over the cycle—not just achieving a balance but with an estimated surplus of £46 billion. And we meet the golden rule on the cautious case. Taking the full economic cycle into account, the current surplus for each year is forecast to be 0.2 per cent of GDP this year, 0.3 per cent next year, 0.6 per cent, 0.5 per cent, 0.6 per cent and 0.7 per cent.

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"Our second rule—the sustainable investment rule—is that over the cycle net debt should be kept below 40 per cent of GDP. Debt this year is 41 per cent of GDP in the USA, rising to 43 per cent in France, 45 per cent in Germany, 54 per cent in the euro area, 68 per cent in Japan, and in Italy to almost 100 per cent. I can tell the House that in Britain net debt this year and in future years will be at 31.0 per cent, 32.1, 32.4, 32.6, 32.7 and 33.0, comfortably meeting our sustainable investment rule, doing so over the cycle and in every year.
"Our commitment to meeting our fiscal rules is not just for this year and this economic cycle but for the long term and so I am also publishing today a report which examines the sustainability of Britain's fiscal position decade by decade and compares our position with other countries. It shows that taking account of population changes and the cost of ageing on public spending the British fiscal position in this period is sustainable and in a strong long-term position compared to other countries.
"I have said that our fiscal framework is designed so that we not only make the right decisions when the world economy is growing but that it is robust so that at all times we meet our fiscal rules.
"An alternative approach has been put to us—that, instead of holding firm to our long-term course, this stage of the economic cycle would be the time to cut spending and borrowing. I have examined such an approach. It would lead directly to depressed demand, rising unemployment and the old boom and bust approach of capital investment slashed, with hard won stability put at risk.
"In the last world downturn 10 years ago, Britain was bound into such a position when inflation was high, debt rising fast and the fiscal disciplines were not being met.
"Today, in this world downturn, with a foundation of historically low levels of inflation and debt, such an option would be neither competent nor prudent because, after the decisions we have taken, we can meet our fiscal rules, fulfil our public spending plans and borrow for investment across the economic cycle.
"Figures for net borrowing for this year and future years are £20 billion, £24 billion, £19 billion, £19 billion, £19 billion and £20 billion—that is. 1.9, 2.2, 1.6, 1.6, 1.5 and 1.5 per cent of GDP. This compares with a deficit 10 years ago of 8 per cent, equivalent to an £80 billion deficit today, and to an average deficit of 6 per cent over the early nineties.
"I can confirm that this year and each year in our forecast period we are well within the Maastricht criteria and that the Treasury will publish its assessment of the five tests on the euro by June next year.
"Taking the full economic cycle into account, net borrowing which is forecast this year, cyclically adjusted, at 2.7 per cent in the USA, 2.5 per cent in France, 2.7 per cent in Germany and 7.1 per cent in
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Japan is—in Britain—just 1.2 per cent this year and in future years 1.5 per cent, 1.3 per cent, 1.5 per cent, 1.5 per cent and 1.5 per cent of GDP.
"So, in both monetary and fiscal policy, wit h the lowest inflation and long-term interest rates for 40 years, the right approach is to hold firm to our long-term course.
"And as I conclude this section on monetary and fiscal policy, I want to thank Sir Edward George, whose period of office as Governor of the Bank of England ends in June next year, for the steady hand he has consistently shown in the leadership of the Monetary Policy Committee since we made the bank independent in 1997.
"And in welcoming the announcement this afternoon of the appointment by Her Majesty the Queen of the new Governor of the Bank of England—the Deputy Governor for the last five years, Mr Mervyn King—I can assure the House that the same steady grip will continue.
"And it is that steady hand, that long-term strength of purpose in monetary and fiscal policy, that in testing times is keeping our economy stable and growing to meet our long-term goal of rising prosperity for all—and we will do nothing to put that steady approach and our hard won stability at risk.
"If stability is the precondition for economic progress, enterprise is its driving force.
"And Britain today is also challenged by a long-term global restructuring of industry—low value added production shifting from the highly industrialised to the industrialising countries, but competitive advantage in manufacturing and services increasingly coming from high value added technology driven products.
"And in this next wave of globalisation, now upon us, it is the flexibility of our product, capital and labour markets, the strength of Britain's science base, the level of British research and development, and the scale and dynamism of knowledge transfer from our universities to our businesses that will drive our productivity growth and thus future prosperity.
"Building upon the independence of the competition authorities, the surest: route to British companies becoming global champions is to extend competition and open up new markets at borne.
"The public sector must also meet the competition test and the investment we make must be matched by continuing reform. So, first, in central government contracts worth £14 billion a year, the Office of Government Commerce will maximise competition, encouraging bids from the widest range of companies, small as well as large; second, the Office of Fair Trading will now scrutinise proposed public sector regulations to assess their competitive effects; third, we will use the discipline of the market to deliver value for money through PFI projects worth £30 billion—now including large-scale regeneration projects—while

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recognising the limits to markets in areas such as healthcare, education, defence and policing; and, fourth, to maximise efficiency in dealing with the Government's own businesses, we are announcing today the creation of a new shareholder executive.
"In January, we will receive and respond to the Higgs report on the role of non-executive directors.
"Having cut corporation tax to 30p and consulted business on further corporate tax reform, we will now consider detailed proposals to reform the tax treatment of capital assets, use of losses, and trading and investment companies. To stop tax avoidance, measures announced today will root out abuse of the VAT regime and tighten rules governing employee benefit trusts, industrial building allowances and profits on sales of extended warranties.
"I turn to measures to help small and medium-sized businesses. Following our cut in small business corporation tax to 19p from April and our cut in the starting rate from 10p to zero, the Secretary of State for Trade and Industry is today announcing the extension of eligibility to the small firm loan guarantee scheme to include businesses with turnovers of up to £3 million a year in a wider range of sectors: 400,000 businesses in all.
"Following our deregulatory measure for flat rate payment of VAT, under which from April 650,000 firms are no longer required to report on each VAT transaction, the Pre-Budget Report will consult small businesses on extending and improving this scheme. And following the exemption for 200,000 firms of the requirement for a statutory audit we will consult next year on the same deregulation for medium-sized firms.
"To help small and medium-sized manufacturers export and build modern manufacturing strength, the Secretary of State for Trade and Industry is also ensuring that, from today, the special manufacturing advice service will now extend to every region of the country; and in response to concerns about rising insurance costs, the Department for Work and Pensions will also now undertake a formal review of the operation of employers' liability insurance.
"To build stronger local economies in each region and devolve decision-making out of Whitehall, in the North West, East Midlands and West Midlands we are devolving business support services from Whitehall to the regions; and in the North East, North West, South East and East, devolving management of skills budgets.
"Because the enterprise culture starts in our classrooms, the Education Secretary is, following the Davies report, announcing, over three years, £75 million to promote enterprise education in our schools and colleges.
"To encourage local initiatives in enterprise, we will consult on allowing local authorities to keep additional rates income from the creation of new businesses in their area.
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"And to match the proposed greater flexibility in the planning system with measures to increase the numbers and affordability of houses, the Deputy Prime Minister will publish his communities plan in January.
"And for high unemployment communities, where the answer is more economic activity and enterprise as the route to more jobs, we are today—jointly with the Small Business Service—publishing details of 2,000 new enterprise areas in which we will not only—following state aids clearance which we expect in January—abolish, from Budget Day, stamp duty for all business property transactions in these areas and—with the 25 per cent community investment tax credit—cut the cost of investing; but also give local authorities powers to relax requirements for detailed planning permission. And in pilot projects in high unemployment areas we will test a more intensive estate by estate approach of interviews, training and job search services, matched by benefit sanctions to help the long-term unemployed back to work.
"I have two further announcements on business taxes. From January 1st we will abolish all royalty taxes on North Sea oil and gas. And following the consultation I began in my last Budget on the future of bingo tax on player stakes and whether to replace it with a tax simply on bingo companies' profits, I am sure that my decision to abolish in the Budget bingo duty will be welcomed on all sides of this House.
"Our charity tax reliefs are worth an additional £2 billion a year and I can announce today that I will extend for one more year the government supplement on payroll giving. To match our initiatives on giving with initiatives encouraging volunteering, the Home Secretary and I will consult business on a new corporate volunteering initiative; and, based on the success of the United States' "Americorps", pilot a financial scheme to help British young volunteers from lower income backgrounds taking a year out after school to undertake community service.
"We have a commitment to protect the environment for our children and future generations and so we are publishing today a detailed paper setting out our approach to the environment. We will now consult on a revenue neutral proposal—to raise the landfill levy by £3 per tonne per year from 2005–06. And on environmentally based fuels I can announce we will, for bioethanol road fuel, reduce the duty rate by 20p per litre.
"The modern route to competitiveness also demands that Britain's most innovative companies work ever more closely with Britain's most enterprising research universities.
"Today the Secretary of State for Trade and Industry is beginning a review of government support for innovation and she and I have also asked the former editor of the Financial Times, Richard Lambert, to examine how building on the research and development tax credit and our

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successful University Challenge and Higher Education Innovation Funds, the long-term links between British business and British universities can be strengthened to the benefit of the British economy.
"While in our first five years the New Deal has been helping the young, lone parents and many disabled people move into work, the priority now is to focus also on how we help young people and adults move up the skills ladder. So I can announce that we will use the remaining surplus from the windfall tax and, at a cost of £130 million, extend to around a quarter of local learning and skills council areas the new employer training pilots: government support for wage and training costs in return for employers providing time off for training.
"To spearhead the expansion of modern apprenticeships to nearly a third of young people aged between 16 and 22 by 2004, a new modern apprenticeship task force will be headed by the chief executive of Centrica and chairman of Manchester United Football Club, Sir Roy Gardner.
"And following the success of our new University for Industry, with, already, half a million students, and talks with the banks, we will now consult in detail on how we expand training and management courses for small businesses.
"To further increase flexibility in Britain's labour markets, we will continue the expansion of work permits for managed migration begun by the Home Secretary. He and I are extending the highly skilled migrant programme, and through a new unit at Work Permits UK we will help small firms seeking to recruit skilled workers from overseas.
"Our policy is to combine enterprise with fairness. To continue to make work pay more than benefits, we arc, from April, extending the principle of the working families' tax credit to single adults and couples aged 25 and over without children. I can now state that couples with wages less than £280 a week, or £14,000 a year—and single people with wages less than £200 a week, or £10,500 a year—stand to receive more money—taking forward our belief that an enterprising economy and a fair society advance together.
"A flexible, efficient labour market must not only promote employment, but must also be fair to parents. Next month a joint Treasury-DTI report will publish proposals for enabling parents to make real and effective choices on balancing work and family life.
"Building on our rise from April in maternity pay to £100 a week and the first ever paternity and adoption pay, the new tax credits, and the first ever national childcare strategy, we will consider further reforms: new tax and national insurance incentives to expand employer-supported childcare; paying the childcare credit for approved home childcare by carers who are not already childminders; and increased flexibility in parental time off, including giving fathers time off to attend ante-natal care.
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"Our goal—stability and prosperity for all—also means fulfilling our goals to tackle child and pensioner poverty. And following last week's annual social security uprating, the starting level for the new child tax credit taken with child benefit and now paid direct to the mother will he: £1,400 a year for those with incomes below £50,000; between £800 and £1,400 a year for those with incomes of £50,000 to £58,000; and for two million lower income families, £2,800 for one child and £4,800 for a two-child family as the child tax credit based on support for all, most support for those who need it most, becomes the most powerful weapon in tackling family poverty.
"The same progressive principle underlines our proposal that all children have a child trust fund that builds up year by year to be drawn upon at age 18. We will now proceed to detailed discussions with a range of providers—banks, building societies and friendly societies—on the fund and on incentives for lower income families to save for their children's future.
"Now that the Secretary of State for Work and Pensions has announced the pension rise next April from £75.50 to £77.45, and in April 2004 by at least 2½ per cent to £79.40, the Government can also announce the levels of the new pension credit from next October that, instead of penalising modest savings and small work pensions, will reward them. In the typical Member's constituency, 7,000 pensioner households—couples with total incomes of £200 a week or less and single elderly people with £139 a week or less—stand to benefit from this £2 billion extra paid out in pensions. Let rile give the House the figures: a pensioner couple with income of £150 a week will receive £21.50 extra, £1,100 more a year. On an income of £160 a week: £17.50 extra. or £900 a year more. With an income of £170 a week: £13.50 extra, or £700 more a year. A single pensioner with £110 a week income will receive £11.60 a week, or £600 a year, more on top of their pension rise. And those on £120 will receive £7.60 extra. For 5 million pensioners, this will be the biggest increase in pensions since the old age pension was introduced. I can also announce that the minimum income guarantee for single pensioners will be £102.10 a week as we seek security and dignity in retirement for every pensioner in our country.
"When next month the Secretary of State for Work and Pensions publishes the Government's Green Paper on pensions, this will include our proposals to simplify the tax treatment on pensions. I can confirm that the tax-free lump sum payment to retirees will remain. Existing tax reliefs for pension contributions for employees, the self-employed and employers will also remain.
"I have two more announcements to make. Because we have built sound foundations of low debt and low inflation, and are today meeting our fiscal rules in every phase of the economic cycle, we have rejected the view that we should cut hack our spending plans at home and abroad. So I can not

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only confirm that we will fund our planned investments—by 2006, £8 billion more a year for local authorities; £15 billion more a year for education: £63 billion more a year for public services as a whole; and, by 2008, for health alone £41 billion more a year paid for by our national insurance rise—we can also, amid global uncertainty, do more to meet our international obligations.
"So it is right, in the new figures presented today, consistent with past Treasury practice, to set aside our international defence responsibilities, a provision of £1 billion to be drawn on if necessary. But, we must not only meet the global security challenge; there is today not only a new imperative, but also a new opportunity to meet the global poverty challenge. In the past five years, through the Prime Minister's Africa initiative, and through the tireless work of the International Development Secretary, Britain has spearheaded the fight for debt relief and social justice for the poorest countries. I can tell the House that, having already agreed 62 billion dollars of debt relief for 26 of the poorest countries, our aim is now 100 billion dollars for the 38 countries in total that stand to benefit from the cancellation of debt. I thank Members on all sides of the House, and all Churches, faith groups and non-government organisations in our constituencies for their tremendous work.
"Because at this critical time we must move forward, I have held discussions over recent days with finance Ministers from America, France, Germany, Italy and other European countries, as well as the heads of the IMF and the World Bank. I can tell the House that Britain is proposing a new international finance facility, with public finance leveraged up by long-term international commitments to raise the amount of development aid for the years until 2015, from 50 billion dollars a year to 100 billion dollars a year, so that by 2015 we can meet the millennium development goals—including that poverty be halved, that child mortality be reduced by two thirds and that every child has the right to primary education.
"Having written as chairman of the International Monetary and Finance Committee to all fellow finance Ministers, the World Bank and the United Nations, I can tell the House that, as a Government, we will he prepared to provide a British commitment to help underpin this plan. The Secretary of State for International Development and I are now asking other countries to join with us. I believe all parties in the House will wish to support this British initiative for global justice, so that we can not only win the fight against terrorism but also win the peace.
"So, in conclusion, tested by world events, resolved to steer a stable course, that steady strength of purpose will continue, honouring our commitments to invest in public services, to advance enterprise and fairness, and to meet and master the global challenges ahead. I commend this Statement to the House".
My Lords, that concludes the Statement.
4.27 p.m.
Lord Saatchi: My Lords, I am most grateful to the Minister for repeating the Chancellor's Statement in your Lordships' House and to the usual channels for arranging for us to hear it so promptly. May I be the first to echo the Minister's gratitude to Sir Edward George, and to be among the first to congratulate Professor King on his appointment as Governor? Between them, Sir Edward and Professor King have made Britain the model of central bank governance, and, as the Minister said, we all owe them a great debt.
Having heard the Statement, I wonder whether any noble Lords share the need for a translation of it into plain English. I shall offer one: the Government are running out of money. However, one would be hard pressed to notice that among the barrage of micro changes, initiatives, schemes, pilots, reports, papers, consultations, reviews, and, of course, units and task forces, all brought to bear in the service of another passionate recommitment to endlessly worthy aims and objectives.
The simple fact, admitted in the Statement, is that the Government have got their figures wrong. Fact: in April, the Chancellor of the Exchequer said about growth,
"Britain will achieve growth from 2 to 2 1/2 per cent this year".
Then he added for emphasis,
"rising in 2003 to growth of 3 to 3½ per cent".
He said that those were based on,
"cautious assumptions … the cautious case".—[Official Report, Commons, 17/4/02; cols. 578–79],
with, he said, a margin of prudence. He missed that forecast by a quarter.
Fact: in April this year he said that tax revenues this year would rise by 4.5 per cent. That has been missed by three quarters. Fact: this time last year, he said he would borrow £34 billion over the next four years. Then, in April this year, he said that he would need £72 billion. We have just heard that he now needs over £100 billion. Why? Because there is one area in which the Chancellor is hitting his targets month in. month out, and that is spending. Here, he pursues his targets with all the zeal of the convert.
Your Lordships may remember how the triumphant Labour Party manifesto for the 1997 general election condemned the myth that the solution to every problem is increased spending. It said:
"The level of public spending is no longer the best measure of the effectiveness of government action in the public interest".
Yet today, after his conversion, as we have just heard from the Minister, the Chancellor wears his spending as a badge of honour and denounces anyone too hardhearted to match it. So this year, government spending is up by 7.5 per cent on the most favourable measure that I could find from the Government's viewpoint. That is against GDP growth at the reduced level of 1.5 per cent, as we have just heard. On my maths, that means that the Chancellor has five times more money going out each month than he has coming in.

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Last week the Government admitted that they had missed 75 per cent of their departmental targets. As many of those hundreds of targets were for things like the rate of truancy among teenage mums in 2010, we did not take them very seriously and we all had a jolly good laugh. This time it is different. I see few smiles around your Lordships' House today. This time, the Government's failure to meet their target threatens us all. While wearing his heart on his sleeve about caring for schools and hospitals, the Chancellor seems to have overlooked a stubborn and inconvenient fact: caring that works costs cash. Where can he get it?
Your Lordships will remember that the Government had a foolproof method—invisible tax rises. However, the media, mainly, sniffed that out and now the pensioners are in revolt and so are the businesses. They then tried visible tax rises. "National insurance contributions for the public services" was the cry. That was too daring, particularly if half of them are on strike. Then they had the thought of reducing their outgoings by charging for things that were previously free, such as a good university education. That is a political nightmare for them, with accusations of a two-tier system and others—the subject of the debate initiated by my noble friend Lord Baker.
Then, the Government hit on the big idea. What if they could reduce their spending by making it vanish? Stealth spending from the people who brought you stealth taxes. Would your Lordships forgive me if I take you into the arcane world of PFI and PPP? I regret having to do this, but I hope your Lordships will agree that it is essential. These are items on which total spending at net present value was £8 billion when this Government came to power. Today, it is an estimated £100 billion. I say "estimated" because there are no published data on the current figure. How did that huge rise come about? I should like to put your Lordships into the position of the Government for a moment. Let us say that you wish to build a road, although the same might apply to a school or a hospital. You would go to a private company and say, "I haven't the money for this road. You build me the road and when it is finished I will pay you every year for the next 25 years". Today, that conversation accounts for £73 billion of future government liabilities. Or you might say to the private company, "If you have to borrow to build the road, I will guarantee your loans for you". That is another £27 billion, making a total of £100 billion. Bingo. The company get their profit, the Government get their road and everyone is happy. Best of all, not a penny appears on the Government's balance sheet.
I ask your Lordships to put aside questions about whether it is a good road or a bad road or, as the noble Lord, Lord Barnett, often asks, whether it would have been cheaper for the Government to have built the road themselves. Let us pause and ask ourselves how those future liabilities of £100 billion should be shown in the government accounts. The Government are currently financing, outside their balance sheet, £100 billion of public sector capital expenditure through the private finance initiative and through
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guarantees, letters of comfort, government-hacked bonds and underwritings of one kind or another in PPP schemes. The PFI liabilities are mentioned only in the hiding place of creative accountants through the ages—the notes to the accounts. The PPP obligations are not mentioned at all—not even as a note.
Here we come to a matter of the highest economic significance in relation to the Statement that your Lordships' House has just heard. In another place last week, in the Queen's Speech debate, the Chancellor said:
"countries such as ours with low levels of debt … are in a position to borrow, whereas others arc not".—[Official Report. Commons, 18/11/02; col. 390]
Did not your Lordships find it extraordinary that, in saying that again today—I think that the Minister said that the foundation is low debt—he did not mention that the single item that has changed most as a result of this Statement is government borrowing? That was not mentioned in the Statement—not a word.
If you or I went to the bank to borrow money, we would present our balance sheet, setting out our assets and liabilities so that the bank manager could determine our borrowing capacity. The hank manager would ask—as bank managers do—some pertinent questions. How much do you owe? If you revealed that you owed £100 billion, would that reduce your borrowing capacity? Of course it would. If you had also guaranteed your aunt's mortgage, the hire-purchase payments on your sister's car and your nephew's school fees for life, would the bank manager say that that reduced your borrowing capacity? Of course he would.
For our government today, the total of all such future obligations to pay is £100 billion. That is 10 per cent of GDP. By not including these sums. the Government are understating then- liabilities and misleading us all. It means that the Government have already passed their borrowing limits. Their debt is not 31 per cent of GDP, as we heard in the Statement; it is 41 per cent of GDP, which means, on the Chancellor's own rules, that he should not undertake the extra borrowing he announced today.
Your Lordships will rightly say that I am hardly an impartial observer, so perhaps my figures are wrong, too. Normally you would settle the matter by calling the auditors and asking them, but whom do you call in this case? There are three of them: the Comptroller and Auditor General, the Office for National Statistics and the Statistics Commission. That is two too many for a true and fair view. As the Minister pointed out last week, two of those three have agreed to disagree. So we are keeping two sets of books. Try that on your bank manager. As the National Institute said last week:
"You can already smell the fudge being cooked up in Great George Street".
When the Chancellor took office, he promised a clear set of national accounts. This was the first of his five principles of fiscal management, which he said would bring,
"transparency … in the publication of the public accounts".

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The mood of the times in accounts as in every other aspect of life is for openness, transparency and full disclosure. I dare to hope that in the debate following the Statement, the Government will support this call from our Benches—I choose my words carefully here—that the borrowing forecast should be subject to an independent audit by people outside the Treasury. That is not much to ask, is it? Particularly as the words that I have just used—the call for independent scrutiny—are from Hansard on 18th April 1996 and are the Chancellor's own.
4.39 p.m.
Lord Newby: My Lords, I join the noble Lord, Lord Saatchi, in congratulating Mervyn King on his appointment as the next Governor of the Bank of England. So far as I am aware, it will be the first time that a fanatical supporter of Aston Villa FC has been governor. One can only hope that he brings a greater sense of stability to the economy than his team has managed to achieve in the Premier League. We must also express our appreciation for the extraordinary success of Sir Edward George during his time as governor. He presided over a period of low inflation, the like of which we have not seen in our political lifetime.
At this point last year, I accused the Chancellor of the Exchequer of being extremely complacent. To avoid repeating myself, perhaps one could categorise this Pre-Budget Statement as being based on the principle of "steady as she goes"—a principle that I believe was first enunciated publicly by James Callaghan while serving as Chancellor of the Exchequer in 1966 immediately before the sterling crisis. My worry about the Statement is that the whiff of complacency appears not to be matched by the facts.
One aspect is clear. Given that the Chancellor of the Exchequer has been able to accumulate some £50 billion of surplus during his time in office, he can afford to spend some of it in the short term by means of borrowing without breaking his own rules. There is also the fascinating question of when cycles begin and end. It is the great advantage of being Chancellor that you can determine when cycles begin and end. Notwithstanding when this cycle ends, we shall be faced, as the figures given earlier demonstrate, with very significant cumulative borrowing a year or two down the track. Without having had the chance to study the assumptions in the Statement in any detail, I believe that there must be severe question marks over whether even the borrowing figures announced today are likely to be met.
The Chancellor of the Exchequer achieved a major surplus in his first years because of a number of issues, some of which were cyclical although others were not. The 3G Telecom licences were not cyclical benefits; they were one-off gains. Arguably, the increases in corporation tax and those in income tax that flowed from huge bonuses were both associated with the most extraordinary bull market on the Stock Exchange.
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They are not features of the economy that are likely to be replicated in the next cycle—certainly not to the same extent. Therefore, we must question whether in two or three years' time the figures produced today by the Chancellor will not look "prudent", as he will claim, but far too optimistic. That has major implications for the management of public expenditure, to which I shall turn shortly.
In the short term, the Statement is amazingly complacent about the imbalances in the economy. We have seen the most extraordinary boom in the house market. It may be coming to an end, but it has left house prices at extremely high levels and caused difficulties in terms of mobility of labour, especially as regards public service workers. In his second Statement, the Chancellor of the Exchequer said that he would deal with housing later. But then, no doubt because it was too difficult an issue, he did not refer to it at all.
The implication and the express content of the Statement is as follows: to the extent that there are difficulties, it is, frankly, because other countries are in a mess and we, who are virtuous, are having to deal with the problem. I wonder whether the Minister can explain how the global economic downturn has been responsible for an unsustainable housing boom. Can he say how it has been responsible for record and unsustainable levels of equity withdrawal, and for record levels of personal borrowing? Those are problems that have been generated at home and upon which the Chancellor of the Exchequer has been silent.
Another major problem facing the economy is the low level of business investment. Today's figures show that investment is down by 12.4 per cent on a year ago. In his Statement, the Chancellor says that he expects that the situation will only have improved at the end of the year to the extent of being 10.5 per cent down from what was already a level that needed to be improved. Yet, for next year, the Chancellor is predicting that investment will increase by between 2.75 per cent and 3.25 per cent, which, almost certainly, is spurious accuracy. As business investment fell dramatically both this and last year, can the Minister tell us what objective grounds the Treasury has for believing that it will suddenly rebound next year? All the recent conversations I have had with people in business suggest to me that that is very unlikely to be the case.
I am also rather surprised to see that manufacturing output, which fell by 2.5 per cent last year and 4 per cent this year, is due, according to the Chancellor, to increase by 1.75 per cent to 2.25 per cent next year. Again, can the Minister give the House some basis for believing that those figures are not just wishful thinking? On the issue of domestic imbalances, the Statement is very weak.
The other area where the state of the public finances raises issues which the Statement barely covers is the way in which public expenditure is delivered. One matter is absolutely clear in my mind from the Statement and from what we know about the economy in the short to medium term. Even if the Government maintain their expenditure targets, the new levels of

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public expenditure that we envisage at the end of the current spending round are likely to be the highest that we shall see for a considerable time. Therefore, questions about how more effectively public expenditure can be used to deliver public benefit are even more important.
I strongly agree with the statement by the Chancellor of the Exchequer that public sector pay must be set at sustainable rates. We have been supportive of the Government on that issue in respect of current industrial action. But if the Government were to allow greater local flexibility in terms of public sector pay, does the Minister agree with me that it would persuade staff to move and work in high-cost areas as well as filling unattractive jobs? Those are major problems that the Government's current policies are failing to address.
More specifically, noble Lords on these Benches have very serious problems with the Government's view about who takes decisions on public services. The Government are undertaking some selective devolving of decision making to the best performing schools, hospitals and councils. But, in our view, they have failed to devolve decision making to local—and, increasingly, to regional—areas on a coherent basis so that all the units that are producing educational or health services can plan at local and regional level. Instead, a few have been plucked out for special treatment, with the rest being left in the lurch.
I have a few specific questions for the Minister on this extremely detailed Statement. On PFI, the Chancellor of the Exchequer says that the Government recognise,
"the limits to markets in areas such as healthcare, education, defence and policing".
We have discussed this issue many times in the House. Can the noble Lord explain what those limits might be in the Government's view? I very much agree with what the noble Lord, Lord Saatchi, said in terms of dodgy accounting rules for PFI; indeed, we have been pressing for greater clarity in that respect. However, I am now completely confused as to whether or not the Conservative Party supports PFI. Perhaps it would prefer that the investment, which the Government believe is possible only through PFI, should not take place.
There is one aspect of the Statement that I find intriguing; it is something I have never heard of previously. I am sure that it will transform something, although I am not quite sure what that will be. I refer to the new "shareholder executive". In his Statement, the Chancellor explains that,
"to maximise efficiency in dealing with the Government's own businesses, we are announcing today the creation of a new shareholder executive".
I hope that the Minister can explain to us what the "shareholder executive" is and how it is going,
"to maximise efficiency in dealing with the Government's own businesses".
I am not sure what is meant by that.
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There is no doubt that the UK economy, and therefore the public finances, face greater challenges today than at any time since the Government carne to power. Frankly, however, there is nothing in the Statement to tackle the manufacturing recession, the strength of the pound, collapsing investment and runaway personal consumption. Nor is there anything that deals with the overwhelming problems of red tape and an unbelievably complicated tax and tax credit system. The business community and the country as a whole were looking today to the Chancellor to ex plain how he was going to tackle these problems. I fear that he has completely failed to do so.
4.50 p.m.
Lord McIntosh of Haringey: My Lords, in the light of the length of the Statement—which, however fast I read it, came to 31 minutes—I wonder whether the House will permit me to go beyond the minus three minutes which I have in theory to respond to the very valuable contributions by the noble Lords opposite. I think that I would be failing in my duty if I took advantage of the strict time limits that normally apply to Statements.
I am grateful to the noble Lords, Lord Saatchi and Lord Newby, for their appreciation for the service of Sir Edward George over such a long period and for their welcome for the appointment of Mervyn King as the new Governor of the Bank of England.
The noble Lord, Lord Saatchi, quite rightly, immediately moved on to the attack, quite justif.ably drawing attention to the contrast between the forecast which we made at the time of the Budget and the forecasts now being made. He is right that our forecasts both for the G7—in other words, largely for the global economy—and for this country have been reduced. They have, however, been reduced in parallel. The change in the forecast for this country is very largely dependent on the forecasts for the global economy.
Our forecasts at that time were very much in line with the average of independent forecasts, and they were not, as far as I remember, challenged at that time by the party opposite. I should add that all the assumptions behind these forecasts are audited by the National Audit Office which, as noble Lords will know, is not a government body. The NAO reports not to the Government but to the Public Accounts Committee in another place.
There have been very significant changes in the global economy since we last made our forecasts—particularly in a renewed decline in business investment, partly because of a lack of confidence in accounting standards in large parts of industry in the developed world. Consequently, there have been very substantial reductions in equity prices. I do not want to exaggerate the importance of equity prices in the economy, but I think that the types of forecast changes reflected in the Pre-Budget Report are very much in line with informed opinion around the world. Table 1.1 on page 4 of the Pre-Budget Report shows the extent to which it is possible to argue—as we do

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argue—that as we were long protected in the downturn, so we will be protected and helped by the recovery in the world economy in the years to come.
The noble Lord, Lord Saatchi, then moved on to the issue of tax and spending and to his description of spending as a "badge of honour". However, given the options which the Statement—let alone the Pre-Budget Report—set out of spending cuts, tax increases or borrowing, and given the Chancellor's statement that he examined the alternatives to increased borrowing, what is the position of Members of the Conservative Party? Are they in favour of spending cuts? If so, they have not said so, and they are not willing to say so. They call spending a "badge of honour" for the Government, but they are not willing to suggest that it should be changed. Are they in favour of tax increases? That is implied by what they say, but they are not willing openly to say so.
In our current position in the economic cycle, both in world macroeconomic terms and in terms of the economic health of this country, borrowing is the right thing to do, and tax increases and expenditure cuts would be the wrong thing to do. Without glorifying it with the name of John Maynard Keynes, and since we got rid of the worst excesses of monetarism, I think that that is generally accepted to be the right thing to do. I do not hear the Conservative Opposition challenging that argument. All they are willing to do is make fun of it around the edges.
I was interested when the noble Lord, Lord Saatchi, then moved on to the issue of the private finance initiative. I was also interested that the figure of £100 billion—which I have heard before—has come out into the open in his speeches. The figure of £100 billion was, of course, used in the noble Lord's press release last week advertising his speech in the debate on the humble Address, when he failed to mention that figure. As he failed actually to say the figure in his speech, there was no way in which we could respond to it.
The figure is, however, entirely bogus. It is bogus because it is not possible for the noble Lord. Lord Saatchi, or for anyone else—and I have read Mr Michael Howard's press release as well, although I have not heard his speech today—to build it up into a figure. It is bogus also because it fails to recognise that all the decisions on whether liabilities under the private finance initiative are held on or off the balance sheet are taken not by the Government but by the individual auditors of the departments commissioning those private finance initiatives. In fact, a very large and increasing number of these private finance initiatives. including many of the transport initiatives and all of the prison-building programme in England, are on the balance sheet because the auditors have decided that they should be.
We have no difficulty with that. It is in no way our position that the private finance initiative and public/ private partnerships are an attempt to get anything off the balance sheet. Even if they were off the balance sheet, they are all still declared each year in the Red Book, where all contingent liabilities over £100,000 are
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declared. The decisions on which investment under the private finance initiative is or is not on the balance sheet are taken by the National Audit Office, which is not a government-controlled body, and the Office for National Statistics, which has been given independence by this Government. Within the past few days, it has also been confirmed by the independent Statistics Commission that the arguments used by the ONS are sound.
So the Government are entirely open in all of the ways in which they undertake and report on the private finance initiative. They do so because it is valuable to have investment that is additional to—not instead of—increased public investment. They do so on the basis that everything that is done is open and available for inspection, audited independently and declared independently. Indeed, they are the first government to declare their fiscal stance not once but twice a year, using the opportunity of the Pre-Budget Report.
The noble Lord, Lord Newby, made reference to the private finance initiative but he was more concerned—I understand that—with the risks that lie behind the forecasts in the Pre-Budget Report. If the noble Lord looks at paragraph 29 on page 21 of the report—I realise that he will not have had an opportunity to do that—he will find that we have been more explicit in setting out the risks than has been the case in the past. We make clear that there are global risks of the sort that I have described, a fall in equity prices and a change in oil prices. There are risks in this country. There are risks of something other than a managed decline in house prices. But the conclusion we draw from this is that the risks are still manageable within our fiscal rules. Although there is clearly a range of forecasts, that range is justifiable in the light of our assessment of the risks.
The noble Lord referred to imbalances in the economy. There have been, and still are, imbalances in the economy. The Bank of England Monetary Committee has had to agonise over conflicting pressures such as manufacturing output and increasing house prices. Incidentally, the impact of borrowing for house purchase is a little exaggerated. Personal debt is very much higher but the much more important factor for households is the cost of servicing that debt. With lower interest rates that is by no means at an all time high.
We recognise that there has been, and still is, a two-tier economy but the Pre-Budget Report gives a reasoned argument for believing that that situation will diminish. There has been a lower level of business investment than we would like and a lower level of investment than we anticipated at the time of the Budget. Some of that is susceptible to government action and the fiscal and planning policies that we have undertaken. Some of it is concerned with confidence. That is much more difficult for us to affect directly although we believe that the macro-economic record of this Government and this country over the past five years provides the basis for a good deal of confidence in the future for business.

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When we talk about public services it is right to focus on delivery not just expenditure. I agree with the noble Lord, Lord Newby, on that point, as I agree with him in regard to keeping public and private sector pay at a sustainable level. The Chancellor made that point clear. However, I do not agree with the noble Lord as regards greater local flexibility for pay settlements. We much prefer to set outcome based targets for local authority and other public sector employers and to have a system of accountability to achieve the strength of negotiating power that public sector employers ought to have in order to protect the public interest.
The noble Lord referred finally to the shareholder executive. I have not had time to read about that. If the matter is not contained in the published documents, I shall write to the noble Lord on the subject.
5.4 p.m.
Lord Shaw of Northstead: My Lords, will the Minister confirm that there is to be 15 billion more a year for education? Does that mean what it says, that there will be £15 billion more for every future year? If not, then for how many years?
Lord McIntosh of Haringey: My Lords, I ought to make it clear that at that point in his speech the Chancellor was summarising the action that the Government have taken. We are not claiming that there is a new allocation of £15 billion for education which has never been announced before. That was announced at the time of the Comprehensive Spending Review which covers a three-year period.
Lord Palmer: My Lords, as president of the Association of British Biofuels, I tremendously welcome a 20 pence per litre reduction for biethanol road fuel. I just hope that it really will be enough to stimulate production because the industry has desperately asked for a 30 pence per litre reduction. I hope that the Minister will have the kindness to pass those key thoughts on to his right honourable friend.
Lord McIntosh of Haringey: My Lords, I certainly shall. Having engaged previously in this debate with the noble Lord, Lord Palmer, I remind him that we are still in discussion with the European Commission about coal-based methane which I know is another of his concerns and the question of whether state aid is an obstacle to further support for that.
Lord Desai: My Lords, I join other noble Lords in congratulating my friend and colleague, Mr Mervyn King, on his appointment as Governor of the Bank of England. I believe that he is the first professional economist in this country to be so appointed. I am cheerful about that.
I congratulate the Chancellor on raising the limit for third world debt relief to 100 billion dollars and on his proposal for a new international finance facility. That is a welcome measure that should be displayed much more prominently.
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The Chancellor is rightly to be congratulated on having properly rediscovered and refurbished Keynes so that we can go through a recession without spending cuts and we can borrow prudently and still maintain both equity and growth in the economy.
Lord McIntosh of Haringey: My Lords. my noble friend is entitled to a certain amount of gloating with regard to the public recognition of his economic beliefs over a lifetime of service to economics.
Lord Northbrook: My Lords, I declare an interest as an investment fund manager. To the extent that any quoted company has to disclose its contingent liabilities in its accounts, is it not possible for the Minister to let the House know, or to write to me, on the total of contingent liabilities under PFI and PPP? He said that it is not £100 billion. But what is the figure?
Further, what assumptions have been made with regard to public sector pay in the PBR? How much extra borrowing would be needed if all the public sector settled at 16 per cent? Finally, I refer to the reform of the tax treatment of capital assets. How much extra tax might that raise for the Government?
Lord McIntosh of Haringey: My Lords, on the first matter I refer the noble Lord, Lord Northbrook, to the Red Book that is published at the time of the Budget and gives the details of all contingent liabilities. On the question of public sector pay, there is a global allocation to all departments and therefore to all public services. Any pay settlements that were significantly above inflation would have to be met within those budgets. Therefore, they would be awarded at the expense of some other expenditure head. On the matter of capital assets, I believe that it would be wise to write to the noble Lord.

University Finance
Debate resumed.
5.8 p.m.
Lord Butler of Brockwell: My Lords, in resuming the debate on the financial situation of British universities I start by declaring an interest as Master of University College Oxford.
I express my thanks to the noble Lord, Lord Baker of Dorking, for initiating the debate. I also congratulate him. No one in your Lordships' House has done more than he to bring attention to the looming crisis in higher education. The Government are now recognising that he is right. But former Cabinet Secretaries like to be politically even-handed and I agree with the noble Baroness, Lady Warwick. that he was less than fair to the present Government. Unlike their predecessors, the present Government recognised the problem sufficiently to take the crucial and difficult step of introducing tuition fees in 1998. The trouble was that they capped them at too low a level and by replacing the maintenance grant by

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student loans, built in a deterrent to the very students whom they wanted to encourage: able students from poorer families.
How, then, is the policy now to be carried forward and the Government's objectives achieved? They are not going to be achieved through general taxation; that appears to be generally recognised and I shall not spend more time on it. Apart from the fiscal situation that the Chancellor's Statement revealed, and which we have just been discussing, the story of the past 30 years has been that successive governments have reduced funding per student while expanding their numbers. The present Government, by requiring a contribution from the students themselves, stabilised funding per student for a time. However, stabilising funding per student is no good when costs go inexorably up; hence our present troubles.
What can be done about the situation? Since universities make a loss on every UK and EU student. one course is to replace those UK and EU students with foreign students for whom our fee is not capped. But, of course, such a course would not help to achieve the Government's objectives.
What else can we do? The Secretary of State for Education and Skills published some commendable reflections on the choices in the Independent 10 days ago and invited a public debate; an invitation which, I note, his senior colleagues in No. 10, Downing Street and the Treasury at any rate have not been slow to take up. Let me endorse two comments in the Secretary of State's article, which were well made in the speech of the noble Baroness, Lady Warwick. First. whatever solution is adopted, it must offer a way forward for all the diverse institutions in the higher education sector and not be geared to the needs of just one type of university. Secondly, it must promote, not hinder, the aim that access to higher education should he open to all and be based entirely on merit and not on ability to pay. If the funds are not to come from general taxation, the two other sources most frequently discussed are higher fees paid by students or their parents—so-called top-up fees—or deferred payments in the form of a graduate tax.
Higher fees are criticised on the grounds that they are a deterrent to poor families and would produce a two-tier system. So they would, unless they are means-tested or accompanied by bursaries that protect families with low incomes or with many children from their effects.
I cannot see any objection to means testing, which has already been introduced for the present tuition fee. Here I disagree with the noble Lord, Lord Smith of Clifton. By protecting the poor from costs, which the richer families have to meet, fees that are accompanied either by bursaries or which are means-tested make higher education relatively more accessible, not less accessible, to the poor.
A graduate tax, by contrast, is simply a deferred liability, like a loan. In fact, it is in addition to a loan because poorer students frequently take out loans to meet living costs, which richer students or their
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families can avoid by paying up front. That seems to be more divisive than means-tested fees or higher fees accompanied by bursaries. And of course a graduate tax would not provide the funds that universities need so sorely now. As the noble Lord, Lord Baker of Dorking, said, they would take some 12 to 14 years to build up and we simply do not have that time.
In his article, the Secretary of State for Education and Skills referred to a third source of funds: gifts from alumni. He said:
"Could the Government help to get contributions from alumni, particularly as many former students would be happy to put something back?".
I believe that the culture is changing in Britain in that respect. At my college, the proportion of old members who have given to the college has been rising sharply in recent years, encouraged by incentives that the Government introduced, although they still do not reach levels in the United States. Old members who enjoyed free university education are particularly willing to help fund bursaries for today's and tomorrow's students, who do not have that advantage. With that help, my college is now giving bursaries to one in five undergraduates who joined us this year.
As the noble Lord, Lord Baker, said, one sure way to stop that progress is by the introduction of a graduate tax. I cannot believe that alumni would be willing to give funds voluntarily to their old university if they are also being forced to pay a graduate tax.
I believe that none of those measures by itself is a solution to the universities' problem. I am not in favour of a graduate tax. which seems to be a way of deferring the solution. But we will need a combination of: somewhat higher fees—not at the extreme levels that have been bandied about—with bursaries or means testing to protect students from poorer families; loans to cover living costs, which are repaid from the higher earnings that university degrees make possible; and support from alumni for those students who follow them. I hope that the Government will give some flexibility to universities, which are, after all. under the pressure of competition with each other, to combine those sources in ways that arc fair to all concerned.
I believe that the Government's help should be concentrated on those universities that take a higher proportion of students from poorer families. That help should be by means of contributions to the cost of bursaries or by increasing the "T grant" to such universities, or by a mixture of the two.
As the noble Lord. Lord Baker, said, the Prime Minister and the Secretary of State are surely right to say that we must face those choices, and do so now, and not let our universities down. If we continue to under-invest, we need look no further than the railways for a terrible example of what may happen. The problem of under-investment may create a problem that is beyond the power of any government to solve. Then our universities, now still offering a

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product that ranks high in the domestic and international marketplace, would have such a product no longer. That would indeed he a disaster.
Baroness Jeger: My Lords, I ask the noble Lord whether that will be a static—
Lord Davies of Oldham: My Lords, I am sorry but this is a timed debate and we are on very strict time limits. We really cannot take interventions when a speech has been completed.
5.17 p.m.
Lord Desai: My Lords, the only interest I have to declare is that I have been teaching for 38 years in the British higher education system. I bear witness to the steady deterioration in the physical, spiritual and moral standards in the sector. When I started, I had 15 tutees; I now have 37. When I joined, the pay of university academics was roughly in line with Civil Service pay; now it is about 40 per cent behind.
The per capita allocation that the noble Lord, Lord Baker, introduced has been cut by 37 per cent. As the noble Lord, Lord Butler, said, if we go on like that, we shall resemble not so much the railways as continental universities—people come from them to us. Why we subsidise EC students is beyond me, but I shall not go into that.
To friends of mine who want to continue the present system on the grounds that it is fairer to the poor—it is not, but I shall come to that later—I have one response to give: they must tell me exactly where the money will come from for universities to be able to meet the shortfall that was ably pointed out by my noble friend Lady Warwick. If you want us to stay like this, give us the £10 billion or shut up.
Exactly five years ago there occurred the Second Reading debate on the Teaching and Higher Education Bill. At that time we had introduced a small fee. which—again I agree with the noble Lord, Lord Butler—was inadequate. I said then, "In five years time we shall return to this matter because this will not solve the problem". What we did in 1997 was wrong in two respects: first, the fees charged for those who could afford to pay were far too low; and secondly, means testing was far too stringent so that very few ended up paying. We then made a mess of the maintenance grant. Those three factors almost simultaneously made it inevitable that we should have to return to this problem.
The US system is much more diverse, equitable and has much greater access. I would ask all noble Lords to ponder on the paradox of the US system, which is not like ours. It is very much dependent upon students paying their own way and is much fairer than our system. For 35 years I have heard the same argument: "If we change anything, the poor will not get access". The middle classes are clever; they always use the poor to justify their own subsidies. For 35 years, access to universities for working class people has not improved very much. But the middle classes have never had it so good. When I first joined the sector there were no fees
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and there were still no working class students. There were 100 per cent maintenance grants and no fees. Where were the working class students? They were not there. As the noble Lord, Lord Baker, said, that is because of our secondary school system being the way it is.
There are two problems. First, we confuse uniformity with equality, and, secondly, when we give subsidies we do not discriminate. I shall take the second point first. We give everyone a subsidy, including the very rich middle classes. That is partly because we are too afraid to implement a proper means test which would benefit only the poor, and partly because the fees are too low.
I believe we should make everyone pay the going rate—I would prefer an income-contingent loan system—and then take our entire current budget which is used for tuition fees and put it into a fund for bursaries. There should be zero subsidies. We could finance up to one-third of our students with full bursaries if we stopped the indiscriminate giving of subsidies to undeserving middle classes. We must be tough minded. The middle classes are good at political rioting. We should not pander to that.
We confuse uniformity with diversity. We think I hat "one size fits all" is a great egalitarian notion. It would be much better to allow different universities to charge different fees. We should let universities choose what they want to charge for whichever course. The state should give subsidies only to the deserving and should let them choose their university. If people want to become doctors, they can pay £12.000 because they will recoup that in future income. People's ability to pay does not depend upon their parents' income but on their future life-time income. The criterion of future life-time income is a much less unequal method by which to judge university students than is their parents' income.
The principle would be that the current funds used to subsidise students should be used only for bursaries for deserving students—deserving in terms of both their future income and their merit—and that universities charge whatever they want to charge. That means that people will make their own choices; get into whatever level of debt they choose; and pay from their future income on an income contingent basis. That would remove the problem of elitism or social class. If a university is offering a good course—he it an old or new university—it can choose the price it wants to charge and meet the demand.
What is happening now is that by charging a single price we have to ration. Such rationing results in bad education. I use the words "bad education"; I do not have the responsibility of my noble friend Lady Warwick who has to defend her patch. Who gets such bad education? People from lower income classes and ethnic minorities. They go to ghastly universities. I can say that and do not have to be diplomatic.
Research is underfunded. A little more has been done for natural sciences by my right honourable friend the Chancellor. However, research in social science and humanities is underfunded. HEECE gives

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only £10 million to English universities. If that could be increased, or even doubled to £20 million, that would be much better. It could be strictly monitored through a research assessment exercise.
Finally, I shall make one more wild spending proposal, for which I hope my noble friend will forgive me. It concerns maintenance grants. For a long time I have believed that the way to tackle maintenance grants is for every undergraduate in full-time education to be eligible for the jobseeker's allowance in term time. So, for about 30 weeks, every undergraduate can claim JSA if they so wish. That would solve the problem. With that I shall sit down.
5.27 p.m.
Lord Renfrew of Kaimsthorn: My Lords, we are grateful to my noble friend Lord Baker of Dorking for initiating the debate. We have heard some interesting speeches. I had the privilege of entering your Lordships' House at about the same time as the noble Lord, Lord Desai, and I always listen to him with great profit and interest.
It would be difficult to exaggerate the long-term gravity of the situation in higher education in Britain today, as a number of speakers have made clear. Britain's world-class universities and Britain's other universities besides have fallen into deficit through what has now become a bankrupting funding policy which, I am afraid, is of the present Government's own making, and about which many of us in this House warned when these matters were seriously debated here some five years ago, as the noble Lord, Lord Desai, remarked.
The problems were clear then, although perhaps not the solutions—I cannot claim that we all saw the solutions clearly—but they have become steadily worse. Moreover, the Government have not taken firm action in the interim: they cannot decide whether to arrange for funding by graduate tax, top-up fees or other unspecified means. Indeed, it is not unfair to say that the only decision they have taken was the purely political one to exclude top-up fees in the last election manifesto: a case of proclaim in haste and repent at leisure.
Lecturers' salaries are now so low in Britain's universities that one would certainly be better off working in transportation as an underground driver, for instance, or a lorry driver, without the six years' training on low income—often on borrowed money—which it takes to do a BA and then a PhD, which most lecturers need and, in pension terms, without the obligation to work 40 years. That is what it takes to acquire an entitlement to retire on a pension of half salary for university teachers, as the noble Lord, Lord Desai, and I both anticipate in a couple of years. I note with interest in recent disputes that the Government appropriately listened with care to the claims of workers who were to retire after 30 years' service on 60 per cent or more pension. Those matters should not be overlooked.
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Meanwhile, universities have been expecting the October statement—now the November statement indicating the funding basis for the next financial year that begins in April. How does one run a business on those terms? Instead, one Secretary of State gets the vapours, the next steps in and, with the smack of firm government, defers the statement until January and issues a "consultation paper" that is all questions and no answers.
That is not government; that is muddle. The unworkable solution of four years ago following the Dearing report, has resulted, I am afraid, in drift and decline, with no discernible improvement in access for poorer students—that is a very important point since it is one upon which the Government have rightly laid stress—with worsening underfunding, and in place of a policy we now have a consultation paper.
The noble Baroness, Lady Warwick, said that she found that encouraging. I have to say that I find it astonishing. We were told a year ago that there was to be a paper and now after a year we have the issue of a consultation paper and the deferral by three months of any announced policy by the Government. I shall be very interested if the noble Baroness who is to reply has much policy to announce this evening. I imagine that that will be difficult for her if the Secretary of State is to make his views known in January.
The Government's dilemma is clear if one reviews a few rather uncontroversial principles, which have been emphasised but with different balance by previous speakers. First, Britain needs to retain world-class universities. That is not possible if they are to be funded through the present level of tuition fees—frozen as they have been. That is beginning to lead to irreversible decline, as noble Lords who commented on the award of Nobel Prizes have already suggested.
Secondly, it is desirable to increase the proportion of students from low income backgrounds who undertake higher education and important that many of them go to world-class universities, which will mean the more expensive universities; not just a two-tier system, but a many tier system where access is not controlled by parental means but by aptitude.
Thirdly—this is a point that we should not overlook as it is borne out by experience—many students from low income families prefer to follow the principle, "Neither a borrower nor a lender be". The Government's unsuccessful experiment in social engineering over the past five years has shown clearly that student loans do not appear to be the way to improve access. That is the worry, because each solution is blocked off.
Let us in passing dismiss the myth put about by the Minister for higher education, Margaret Hodge, that university graduates earn over £400,000 more during their career than their contemporaries. That may well be true of some; it may be true of the average; but it is clearly not true of the lower paid graduates. Tell that story to a university lecturer who will have trained for at least six or seven years on a negative income. The Government have devised a system of negative incentives, which a graduate tax will do little to ameliorate.

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I suggest that there is only one evident solution if we are to promote the world-class excellence which Britain needs and the truly progressive access to which the Government pay lip service, and which our universities need if they are to recruit the best brains.
First, we need to call a pause in the headlong expansion of higher education. The notion of an intake up to 50 per cent will produce catastrophe until the funding problems are solved. It is a fine long-term objective, but really we should be stopping at 40 per cent, or roughly the current figure, until these problems can be solved.
Secondly—and the present Government are unlikely to do this—I have come to the conclusion that we should be paying for tuition out of taxation, as we all did until the Chancellor and the noble Baroness, Lady Blackstone, got their way some time ago—no top-up fees, no graduate tax and no hypothecation.
That is a difficult nettle to grasp. The noble Lord, Lord Butler, appropriately said that he thought it was not an easy solution. But where is the other solution? If we are really keen on access, the issue of student loans is a difficult one. A number of speakers have, I think rightly, made criticism of a graduate tax. If it is so much to the benefit of the country that we have a well-educated population, I do not really see why there is objection in principle to paying for it out of taxation. Of course it implies a burden. It implies either more borrowing or a higher level of taxation. But I think that it is a nettle to be grasped, simply because I do not see which alternative will work. Although I much valued the speech of the noble Lord, Lord Butler, who speaks with great authority as the Master of University College, I just do not see his view working. I am not sure that I see the American model working in this country. I regret that that is the case, but that is what I fear.
I am cynical about the present Government's commitment to higher education in the light of their performance over the past 12 to 15 months. I do not expect them to find a satisfactory way out of the present muddle. I am pessimistic about the future of higher education in this country since I think that the nettle will be a very difficult one to grasp; nor do I expect to see a world in which the decline in British academic salaries is halted.
I predict that we shall continue to hear government Ministers imply that it is " élitist" that some universities should be better and more expensive than others. Do they imagine that every university will be a world-class university in every field?
So I am pessimistic about the present situation. I expect to hear continuing disputations about top-up fees and about graduate taxes, but I think that we should all be advocating a multi-tier, multidimensional system where there is real equality of access.
I am angry that the Government have allowed this predictable situation to develop over the past five years. I do not myself see any solution other than to
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grasp the nettle and to pay for it out of direct taxation. I am very sceptical about the other solutions that have been proposed.
5.36 p.m.
Lord Watson of Richmond: My Lords, I join noble Lords in welcoming the debate and in thanking the noble Lord, Lord Baker of Dorking. It is a debate, which. like the wider one in the media and in the country, is much agitated about top-up fees at universities. I do not wish to focus on that issue other than to observe that the current kite-flying exercise—because that is what it is—on top-up fees is clear testimony that the Government, in stating a target that 50 per cent of all young people should go to university, have willed an end without willing the means. In politics, as in business, that is a dangerous way to proceed.
In truth, if we are to provide for 50 per cent of young people at our universities, we will have to create 30,000 additional university places every year until 2010, which would require at the very least over £400 million of additional resources.
It is well known, and has often been emphasised by noble Lords when this House has debated higher education—which I am glad we do quite frequently—that the funding of university education in this country is significantly below that of the best universities in the world, perhaps by a factor of 4. Yet that general. if alarming, statistic understates the specifics of the real crisis facing universities.
In one of our earlier debates—in April this year I believe—the noble Lord, Lord Moser, pointed out that by 2010, the target date for the 50 per cent objective, nearly half of all our high-quality academics will be eligible to retire or approaching that stage. They will have to be replaced. Indeed their numbers will have to be increased if rhetoric is to become reality and the Government are to raise not only hopes but also means.
Such an increase in university staff at the required level will not be easy while academic salaries, as has been pointed out, remain so low and uncompetitive. When we talk about competition. of course that is competition both against other professions in the United Kingdom and—very critically if we are not to lose our best to American universities—also with salaries paid in the United States. Those are currently double our own. While we cannot match that—and perhaps do not need to at this moment—we certainly need to start closing the gap.
Let me at this point declare two interests and briefly describe them. They illustrate vividly the challenge for universities in their financial predicament. I am patron and chairman of an appeal now being launched to endow German scholarship and teaching at Oriel College at the University of Oxford. There has been much debate—many questions have been asked in this House—about the disturbing decline of foreign language learning in Britain. The Minister knows my views well, both my hopes for what the Government may do in primary schools and my dismay that foreign

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language learning is being dropped as a compulsory subject at 14. If foreign language learning is allowed to wither at the top of the tree—at our universities—it will surely and progressively expire at the roots as well. No primary school entitlement to foreign language learning will save it if scholarship in foreign language learning expires at the apex of the system. Why and how could that happen?
The Oriel appeal at Oxford is essential because the level of government funding to Oxford and Cambridge and to other universities is now too low to secure the future, in particular, of the person-to-person tutorial system that has produced such excellence for so long. We must endow the college's teaching post in German to safeguard the teaching of a key European language in that way in Oxford and, indeed, in Britain. There are now few places in Britain—less than a handful in all—where the German language can be studied from its origins to its contemporary use. If those places disappear, the consequences will be dire for the study of German. If the same thing happens in other foreign languages, the consequences will be equally bleak.
Why do universities—in particular, Oxford and Cambridge—no longer have the resources to ensure the continuation of such person-to-person tuition? The vice-chancellor of Oxford wrote this month in the Oxford University Galette that the transparency review had demonstrated that the underfunding of higher education now stood at about £1 billion annually. He wrote that the current crisis in the public funding of university teaching resulted from the long decline of the unit of resource, which is the amount paid per student in the block T-grant to universities. That grant declined by 38 per cent between 1988 and 2000 following a previous decline of 20 per cent which started in the mid-1970s. The funding decline accelerated, and so, too, did the number of students to be taught. At Oxford, the transparency review last year reported a proven shortfall of, I believe, £23.3 million for the publicly funded teaching costs that fall on the university as such. As I understand it, the colleges must cross-subsidise the publicly funded teaching costs that fall to them. Increasingly, they cannot, burdened, as they are, by a myriad of other demands, including the maintenance of fabric—hence the appeal.
If our ability to teach languages at the highest level is important to our competitiveness as a country, our need to keep pace with the best internationally in science is self-evident. I declare a second interest: I chair the advisory board for "Chemistry at Cambridge". We have raised very large sums for "Chemistry at Cambridge", in no small part due to the generous and far-sighted contributions of British firms, notably Unilever and BP. We have increased facilities and enhanced capability, and we are right to do so because the chemistry department at Cambridge is at the cutting edge of international science. There are 11 fellows of the Royal Society active in research at the department, and the department provides an outstanding environment for inter- and multidisciplinary research.
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At the end of the day, research, even at that level, is as good as the people who undertake it. The fact is that we lack sufficient start-up grants for new staff—for the science stars of tomorrow. As a consequence, researchers spend vital early years at Cambridge raising money rather than raising their research game and establishing their research. Companies are cautious. They prefer, perhaps, the conventional sectors of chemistry, but we know that the best often comes from high-risk and inspired innovation. Thus we are trying to raise funds for next generation fellowships, providing talented scientists with £50,000 a year for five years to enable them to pursue independent "blue sky" research. It is agonisingly difficult to raise such funds for those people and that talent.
My fear is that, in pursuit of the numerical dimensions of university education, the Government are in danger of losing their sense of perspective. Their target is 50 per cent, but there is no commitment to what that will take in money and facilities. I agree with the previous speaker that, given that lack of clarity or commitment, it may be better to drop the target. After all, if the target is the thing, why be so timid? Why not 60 per cent, with 50 per cent getting firsts?
Such aspirations are, of course, unreal, but, in pursuit of such targets, we risk raising hopes without means. We risk, as a country, becoming overqualified on paper but underskilled in practice. Our failure to raise productivity in Britain is directly related to our lack of skills, not our lack of paper qualifications. My question to the Minister is this: what concrete assurances can the Government give us that, in planning the future of higher education, they will will the means as well as the ends? We do not need more kites in the sky; we need more resources on the ground.
5.45 p.m.
Baroness Warnock: My Lords, I join other noble Lords in congratulating the noble Lord, Lord Baker of Dorking, on introducing the debate and thanking him for allowing us the chance to discuss what is now agreed to be a crisis in the universities. I share with the noble Lord a certain relief that it is now recognised as a crisis on all sides and that it is agreed that it is an important matter. It matters to everybody that the universities are in decline and must be rescued. At last, universities are no longer regarded as an optional extra or as a sort of frill on the education system; they are understood to be central to the status of the country and its civilisation.
The question of funding for universities cannot be discussed separately from the issue of all education from the age of 16—even 14—onwards. There, I agree with the noble Lord, Lord Smith of Clifton. We treat the universities as a separate subject at our peril. Only in the context of all education from 16 onwards can we address the crucial question of what we want of our universities. If I concentrate on undergraduate funding, that is not because I underestimate the importance of funding for research. The two go together, and, in the best universities, research and teaching must go hand-in-hand.

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My main point is something that has been mentioned by other speakers. Part—only part—of the cause of the present financial crisis is the Government's earlier insistence on having a target of 50 per cent of school leavers going on to higher education. As far as I know, there was no great discussion of that figure; it emerged as an aspiration, as we heard, and as a bright idea. In fact, it was not a bright idea. In the early 1960s, at the time of the Robbins expansion of the university sector, 40 per cent of pupils at school passed 0-levels with high enough grades to proceed to A-level, and 30 per cent of A-level candidates passed with high enough grades to proceed to university. That yielded a figure of roughly 12 per cent for school leavers going to university. In order to approach the figure of 50 per cent, we would need a rate of 80 per cent for passes at GCSE high enough to enable students to proceed to A-level and a rate of 60 per cent for grades at A-level good enough for entrance to university. That yields a figure of approximately 48 per cent for entry to university.
The implications for standards at GCSE and A-level are obvious. It will be said that, since the 1960s, universities have changed and multiplied. There are more numerous and more varied courses on offer than in the 1960s. Have not the polytechnics become universities? There are plenty of courses to suit even 50 per cent of school leavers, so the argument would go.
However, I believe that that is part of the cause of our crisis. All those students need to be funded; they all need to be taught; and, equally, their teachers need to be paid. If universities were permitted to charge realistic top-up fees and to administer scholarships according to aptitude in the manner of Harvard and the great American universities, then at least the hypocrisy of pretending that all universities were of equal academic standing could be allowed to wither away.
People speak with horror of a "two-tier" system of universities. But we already have a poly-tier system. That used to be more or less marked—although rather crudely—by the distinction between polytechnics and universities, which were of course differently funded. Abolishing what used to be called the "binary line" was, in my view, one of the worst mistakes ever made in educational policy and one that cannot be laid at the door of this Government.
I believe that, one way or another, we should stop filling our universities with students who displayed no interest in academic matters at school, whose talents are more practical than theoretical, and who will not change. They may proceed to university for a variety of motives: because they are very bright; because they like the idea of student life; or because they have been led to believe in what has been referred to as the "myth" that obtaining a degree will make them necessarily individually more employable and lead to a better salary. But too few of them have any interest in continuing to learn. They have no very clear idea of the point of what they are going to learn or what they
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will do with it. For many of them, their years at university will, if they stick them out, he expensive and a waste of time.
We most urgently need a system which enables far more students, on leaving school—whether at 16 or 18—to work and study at a hands-on, skill-enhancing level on day release or sandwich courses, or whatever we choose to call them, which will lead to diplomas of varying standards but will not necessarily add up to a degree.
Of course, if, as they get older, those students become more interested in theoretical, mathematical, historical or philosophical subjects, then they will be in a position to attend a more academic course on the basis of the diplomas that they already have. We need a proper emphasis on the acquisition, through apprenticeship and clay release, of recognised qualifications of a high standard. In that connection, the statement of the Chancellor of the Exchequer in another place with regard to apprenticeships is greatly to be welcomed.
We need a variety of institutions 'to provide degree courses and the qualifications of which I have just spoken. If we wish to call them all "universities'', there is no particular harm in that; there is simply a certain absurdity. But I believe that, while they are at school, some people will always become deeply interested in learning, and learning more, whether the study is science, mathematics, history or languages. I do not believe that we should fret too much if many such people come from among the children of the professional classes or whether those children are educated at maintained or independent schools.
Historically in this country, we have, on the whole, been quite good at opening the professions to new recruits. It is of crucial importance that we continue to do so through the administration of scholarships. I call them "scholarships" because I believe that these bursaries, as they have been called thus far, should be related to academic interest, academic application, and a suitability and enthusiasm for the course.
I believe that we should be able to give scholarships of varying degrees of monetary value to nearly half our students. Here, I would deploy the figure of 50 per cent because we must not forget that it is not only the poor about whom we are talking; we are also talking about middle-class people who have several children, as I believe the noble Lord, Lord Butler, has already said. To have as many as three children all at university at the same time, which is perfectly common among the professional classes, is an enormous financial burden.
Therefore, I am afraid that I believe in means-testing; I believe in bursaries being given according to aptitude; and I even believe in aptitude tests on the American model for admission to university. It must be our hope that in that way we do not make it impossible for children of less affluent parents—even of really poor parents—to work their way up through secondary schools into universities, where, through their wits and interest, they really will belong.
5.55 p.m.
Lord Morgan: My Lords, like other noble Lords, I cordially thank the noble Lord, Lord Baker, for introducing this Motion on what is clearly a very grave crisis affecting our education system.
I approach this matter from three different perspectives. I do so first, like, I believe, two previous speakers, as one who was once one of the "thin red line" of vice-chancellors. Ten years ago, one was well aware that there was a crisis. The unit of resource was falling and the investment was inadequate. That was covered up by expansion—it is a good thing to have expansion—hut it meant that the fundamental finance was unsound in universities. It was covered up by cheap money in that way. Our accounts were all basically bogus because they did not take account, for example, of the fact that our buildings were falling down and that dilapidation was a major problem. In many ways, matters have worsened since then—in particular, the mounting tide of student indebtedness, which is now a great social scandal.
Secondly, I approach the subject as one who has been, throughout almost my whole career, a university teacher. I taught in universities for 31 years—nearly all of them in Oxford. I was fortunate in that I began when the Robbins report was just coming into play. It was the only time in our history that we took higher education seriously. It was a good time to begin. Since then, things have declined. In particular, the conditions and payment of university teachers have manifestly declined. Would that university teachers were paid as much as the firemen who are currently on strike.
Would I be a university teacher now if I were 23 or 24 years old? Frankly, I do not think so. I believe that the condition of the profession has declined, and many young people are taking the same view because graduate students—the new blood, or renewal, of our profession—are falling away in many subjects.
I also approach this matter as a member of the Labour Party. This is not a political debate, but I have been a continuous member of the Labour Party since 1955. The Labour Party revered education: it considered education and higher education to be a public good. It honoured the great teachers, Tawney and Laski.
When my noble friend comes to reply I hope that she will bear in mind the very deep resistance in the Labour movement to many of the proposals that are offered—particularly top-up fees. That proposal has produced great resistance, including, I am delighted to say, within the Cabinet. The Government will no doubt bear in mind that Sir Keith Joseph retreated from the idea in 1983 in the face of very proper opposition from Conservative Members at that time. It would be the converse of social inclusion and the converse of access. It would also be the converse of the great speech, which many of us remember, by Neil Kinnock on how he was the first in his generation to attend university.
The nature of the problem is well known and other noble Lords have outlined it—that is, the continuing and deepening structural deficit in the university
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system. I welcome the fact that, in spite of the delay in the spending announcement. the Government show openness. I take some encouragement from Charles Clarke's statement. For years, universities have been insulted. They were insulted by the Thatcherites for not being wealth-creators, and they are insulted by new Labour for not being elitist. It is difficult to know which is the more absurd of those two charges. There is a more hopeful and open impression given by what Charles Clarke said, from which I take encouragement.
In my remaining time, I should like briefly to make four points. First, on university governance. there are alarming signs that, whatever is the new financial settlement, the Treasury may use the opportunity to impose yet more controls on universities as inefficient managers. University teachers have been assessed, audited and nagged to death. As my noble friend Lord Prys-Davies will know, in Wales we had four auditors coming round in a year—the hills were alive to the sound of auditors in Wales—and we suffered from it. I hope that we shall have no more of that. Universities have been remarkably efficient in managing their resources. The Dearing report said that they needed a three-year planning horizon. In my experience, they were lucky to have three months.
Secondly, other noble Lords have spoken about targets. The Government are admirably committed to access to universities. A previous debate on the subject was launched by my noble friend Lady Warwick. Universities have responded with enthusiasm, which will not be helped by a target of 50 per cent a year. That will mean either fudged accounting or money spent in the wrong way, with the whole system being diluted in quality and a further depression in the international comparative quality of our universities.
Thirdly. funding philosophy should change. In his statement, Charles Clarke said that we should note and "celebrate" diversity. So we should. Universities have different missions and different roles to play in our society. The system does not acknowledge that. That problem goes back at least 10 years since the binary line disappeared: the system has promoted uniformity and claimed that we are all the same, all doing the same thing. We are not.
The effect of that has been to impose impossible terms on some of the newer universities, many of which do the most praiseworthy work in disadvantaged parts of the country—inner London and so on—to promote access and cater for ethnic and other minority groups. At the same time, that takes funding away from Oxford, Cambridge, London and many other stronger universities. No one is served by a system that promotes uniformity in the name of diversity.
Finally, we must find a solution that promotes access and social mobility. There are admirable private initiatives. I am a graduate of Oriel College, Oxford, and respond to what the noble Lord, Lord Watson, said. Indeed, I have been involved in some such schemes myself. Much the fairest scheme would be a graduate tax. I am sure of that. It is related to the

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capacity to pay. It does not immediately deter or impose a psychological barrier. It is less onerous than an enhanced loan system, which would merely accentuate the burden of debt that students face at present.
There are many technicalities—the noble Lord, Lord Baker, mentioned them—but it is possible to deal with women being married or unmarried and the different demands of different courses. It would take time for a graduate tax to be fully operational, but the Treasury apparently supports it and the Treasury supports access, so the conclusion must be that the Treasury is prepared to make transitional arrangements.
With all respect to the distinguished speakers whom we have heard, top-up fees would be a great deterrent to poorer and middle-income students, a blow to newer universities and not supported by many of the Russell Group. Cambridge has spoken against them; the Scottish universities—in that admirable country, Scotland, cradle of' the intellect and democracy—have also spoken against it. They would be the converse of access and social inclusion.
We have heard some rather blithe and bien pensant talk about bursaries. No one has tried to quantify them. if Oxford charges £10,000 a year, given what the university and rich colleges such as mine in Oxford can offer, the figures are extraordinary. The idea that we could avoid problems for poorer students with bursaries is not sound. That could pose problems for many subjects. I have received a letter from the British Medical Association—other noble Lords may also have received it—which tells of the appalling burden that top-up fees would place on medical students, bearing in mind the great range of other demands made on them.
That would be a negation of what Labour intends to do, so I hope that a policy opposed by Clare Short, David Blunkett, Estelle Morris, Gordon Brown, Neil Kinnock—and, apparently, by Charles Clarke, who is in charge of educational policy—will he rejected; and that we shall have a graduate tax or variant of it and a new deal that will be equitable and financially robust. Otherwise, one of the glories of this country for hundreds of years—our higher education system—will simply collapse.
6.5 p.m.
Baroness Perry of Southwark: My Lords, I thank my noble friend Lord Baker for giving us an opportunity yet again to debate higher education. I make no apology for having been a vice-chancellor of one of those new universities—former polytechnics—that did an important job of increasing access to the disadvantaged people of south London, provided them with vocational education and thereby equipped them to go out into productive and useful jobs in the community. As a passionate believer in diversity, like the noble Lord, Lord Morgan, I then went to be head of a college in Cambridge, so I perhaps represent diversity in my career.
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None of us involved in higher education need the Minister for Higher Education and Lifelong Learning to tell us that university funding is in crisis. Many noble Lords have already gone into the detail of what that crisis means. The present funding system is bad for students, bad for staff and bad for universities. It is especially bad for universities because it comes. with a nightmare web of regulation, assessment, competition and all the things that are contrary to the fundamental nature of what a university is really about.
Most of us in universities are weary of the system by which we are assessed in order to be funded. In the early 1980s, the Conservative government introduced the assessment exercise as a tool to ensure that quality research was properly funded and that money was not given to departments in which no research of quality—indeed, in some cases, no research at all—was carried out. I defend the system as it was introduced. However, new Labour has taken that tool and turned it into a weapon—a nightmare of criteria on which research and teaching are assessed that have little to do with the real and unpredictable outcomes that are the result of exciting teaching and research.
For universities, assessment is now the stuff of survival. By its results are universities judged and classified in published league tables that affect student recruitment, reputation at home and overseas, and finance for research and training. When those criteria are externally and often politically determined, universities have genuinely lost their historic role as arbiters of their own mission, critics of society and challengers of received wisdom.
The pressure to conform mentioned by the noble Lord, Lord Morgan, arises powerfully from the current funding mechanism, which depends on rigid assessment criteria and the multiplicity of special programmes and initiatives that convey extra funding, for which everyone therefore feels that they must bid. We seem to be locked into a status race in which all universities are expected to climb the same ladder, regardless of their different natures and missions. ft is sad that there seems to be so little understanding of the many different roles that the universities must play if all the needs of students and society are to be met. A single set of criteria by which we are judged is helpful neither to universities nor society.
I turn for a moment to the funding of research. Of course, as the noble Baroness, Lady Warwick, said, the Government will always play a part in the funding of universities and, in particular, of research. We are grateful to the Government for having increased funding for scientific research. I suspect that, at least in its present form, the research assessment exercise has probably had its day. But I believe that the Government could be thinking seriously about ways of stimulating better links between industry and higher education in the field of research, which would bring industry into a much closer partnership.
The vice-chancellor of Surrey University—I declare an interest as its pro-chancellor—spoke recently to the Parliamentary Universities Group about ways of

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encouraging UK industry to utilise top quality, multidisciplinary university R&D to enhance industry's competitive edge. He suggested that the changes now under way in universities and industry may mean that the time has come for a new initiative with that objective in mind. He spoke of a model at Surrey University, known as the Mobile Virtual Centre of Excellence in Telecommunications, which is working well. It originated from one of the early foresight panels. That organisation brings together industry and universities and addresses mutually agreed relevant issues, but with the ability to move quickly and flexibly as opportunities appear.
The organisational model of the centre is that it is a not-for-profit company, with leading industrial players and university departments as shareholders. It has a chief executive and two other employees. The research steering group of the company is charged with formulating strategic research programmes. There is also provision for bilateral work. Crucially, funding comes primarily from the companies, although the HEFCE support costs are included and there is also support from EPSRC. The research work is performed mainly by postgraduate students and postdoctoral fellows in the universities, and industry provides steering and monitoring groups. The arrangement works well, and I commend it as a possible model that the Government may encourage.
I turn to student funding. If the Government have decided that flexible fees is the name of the game, so be it. They will have to decide whether to make that political decision. It undoubtedly will have some benefits to offset the many concerns that have been expressed; it will end the myth of uniformity; and it will bring private money into what is a creaking and exhausted system. However. my plea to the Government is that if we are to have expensive fees—not top-up but flexible fees—there must be adequate funding and adequate single system arrangements for those who cannot pay.
Others have offered their pet solutions. Let me offer mine—to offer a "Treasury level" scholarship funding per place. That would get round the problem of those universities charging £10,000, £15,000 or however many thousand pounds per year. The students who could not pay would enter the universities funded at the "Treasury level", and the universities would have to live with whatever that was.
The great advantage to the Treasury would be that it would know in advance exactly to how much it was committed. That is because the universities would have to bid in advance for a number of places, in a way similar to the system operated by the schools assisted places scheme, though on a much bigger scale, and the Treasury would fund them at £5,000, £6,000 or whatever amount per year. It would end the ridiculous dual stream from LEA and HEFCE funding for students. It would also give students from poorer backgrounds the ability to attend universities that would themselves be free to accept students on the basis of their ability to succeed academically rather than on their ability to pay. I suspect that some of the
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new universities might bid for 80 to 90 per cent of their places at the "Treasury level". Others might decide to hid for only 30 per cent, with the remaining students paying fees comparable to the high levels of our international competitors, such as Harvard and MIT.
Secondly, I would ask the Government, in any new system of funding, to get off the universities' backs. Can we have a system of funding that leaves the universities free? It seems to me ridiculous that the Government have successively moved the ratchet tighter and tighter, to the extent of—I hesitate to use the hackneyed phrase—killing the goose that lays the golden egg. Despite all their problems, the universities of the UK are a great success story, which can continue only if the dual benefit of adequate finance and adequate freedom is granted to them.
6.15 p.m.
Lord Wallace of Saltaire: My Lords, it is a great pleasure to follow the noble Baroness, Lady Perry, who has done much very useful work with the Parliamentary Universities Group. I, like many others, must declare an interest. I am a university teacher and the parent of two children who came through the state school system and have gone to Cambridge.
I strongly agree with the noble Lord, Lord Baker, that salaries are a disgrace. As I look across the Chamber, as a professor of international relations at the London School of Economics, I sometimes suspect that the London School of Economics pays its economics professors a great deal more than it pays its international relations professors.
We all agree on the situation. Twenty-five years ago university salaries were equivalent to those in the Civil Service, at roughly principal and assistant secretary level. They are now 25 per cent below. Overall funding has fallen very badly; controls are absurdly tight: the state now tries to micromanage universities. As those of my generation who joined universities in the 1960s retire, the problem of staff replacement will become very acute.
The first question that I should like to ask concerns the "world-class" issue. It is highly undesirable—I speak as a student of international politics—that the dominant universities of the world should all he in the United States. We need alternative centres of intellectual excellence. Otherwise. the intellectual agenda of economics, social policy, political philosophy and public policy will be set within the United States; and places such as the IMF and the World Bank will have a Washington consensus set only by people with PhDs from MIT, Harvard and Princeton. In Europe we need alternative sources of excellence. What we see on the Continent at present is a general deterioration in the quality of almost all European universities. In that regard, the United Kingdom could and should ensure that it continues to provide alternative centres of world-class excellence.
Secondly, internationalisation makes for many complications in this debate. It is no longer possible to have a purely domestic higher education policy. It is, of course, highly desirable to have the widest possible

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exchange of students, teachers and researchers. We know that student flows are very important to British universities. There are now many more students coming into Britain than going out. That creates a number of anomalies, particularly in the light of several judgments of the European Court of Justice, which have forced the British Government to charge the same fees to students from other EU countries as to those in Britain. We have already experienced the same anomaly in relation to Scotland. I urge the Minister to consider very seriously whether or not it is time for the British Government to challenge that succession of ECJ judgments. I have read the reports of the several cases that came before it, in which the definition of "training" in the Treaty of Rome was stretched far beyond its original intention.
We are stuck with the situation that in the federal United States the state of California charges out-of-state students more than it charges Californian students; but, in the much less federal European Union, the state of the United Kingdom is not able to charge Belgian, German or Italian students more than it charges the students of this country. We must consider that issue during this debate. I hope that the Box will be able to help Minister on this important point. Some of us have previously urged it on the Department of Education, which in the past has always flunked it.
There is a real problem with staff recruitment. My strong impression is that, as in many other areas of professional expertise, Britain at present loses bright people to the United States and, instead, recruits people from the continent and from South Asia. In other words, we take from poorer countries and lose to richer countries. The attraction to UK universities of people from the Continent depends on the lower quality of universities on the Continent. We should recognise that that is what is happening, and I hope that it will not continue for much longer.
My third point concerns access. The Government have bullied universities on the question of access. They say that the problem of access lies in inadequate action by the universities themselves. As several speakers in this debate have already said, we can all agree that the problem of access lies in the schools much more than in the universities, especially in state schools in towns and cities. We may not agree so easily among ourselves that higher spending on state primary and secondary schools should be a greater priority than more funds for universities. But we cannot ignore the major role of private schooling in the access debate. As someone who talks to undergraduate open days at the LSE, I am conscious of how difficult an issue it is. Students from private schools challenge any suggestion that my institution and others should weight applicants slightly in favour of those from state schools, whose results are not perhaps as good as those from private schools.
Public schools enable parents to buy better access to better universities. Parents spend between £50,000 and £150,000 on the education of their children between the ages of five and 18 and then want them to go to university at almost nothing. I have a vivid memory of
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an occasion when I had written a letter to the Financial Times on this subject. I received a letter from a mother which stated, "I have just worked out that I've spent £90,000 on my son to the age of 18 and he's not very grateful. I resent any suggestion that I should have to go on paying for him after the age of 18". Nt the same time, a former Conservative Cabinet Minister of my acquaintance told me he had just calculated that he had spent half a million pounds on the education of his children. It is absurd that we do not put such spending into the discussion about the future of higher education funding.
At Oxford and Cambridge half the students of many colleges come from private schools. In many instances, their parents have been paying £20,000 a year up to the age of 18. The suggestion that Oxford and Cambridge cannot therefore charge fees seems to be indefensible. There is a massive issue of inequality in the British education system which we cannot ignore.
My final point relates to diversity, about which the noble Baroness, Lady Perry, rightly said that there is a status race among British universities. There are all kinds of problems about who is better than whom and there is a myth of uniformity and equality that gets in the way of intelligent discussion. Several speakers have already said that we should not talk about a two-tier system, but that we should talk about a diverse multi-tier system of higher education. Within that system, what the University of East London does extremely well is to capture children whose parents had not been to university and who had not themselves thought of going to university. That is different from what my institution or others are doing, and these different roles are equally valuable in a different way.
We need to consider a more comprehensive approach to higher education. I am interested in the Bradford University discussions with Bradford College, which suggest a broader spread of' higher education. The American university which I attended as a graduate student had a faculty of home economics, a faculty of hotel administration, a physics department with a Nobel prize winner and a whole range of top quality departments. It did not see, as has occasionally been suggested, that courses in beer drinking and meat cutting are not proper to be taught in universities. There is nothing wrong with a full spread of comprehensive higher education.
Higher education is a mixed public and private good. It therefore needs strong continued public funding. I hope that we can also agree that it needs greater private funding. That has to include telling the English middle classes that they should be giving more to the universities from which they graduated. I have been asked to speak at the LSC presentation ceremony for our graduating students the week after next and one thing I shall be saying most firmly to them is, "As you pass £40,000 a year in three years' time, please think that that is the point at which you start giving as an alumnus, so that those who succeed you can begin to benefit as well".
6.24 p.m.
Lord Moser: My Lords, I must begin with an apology. I have a long-standing engagement this evening and I apologise especially to the closing speakers that I cannot stay to the end of the debate. I must also declare an interest: my continued involvement in the university sector, especially Oxford, LSE and Keele.
I thank the noble Lord, Lord Baker, for initiating the debate. To call it timely would be an understatement—this is the biggest crisis in my time in the sector. It is a profound crisis which is the result of decades of under-investment, coupled with excessive central government intervention.
My main reason for speaking is that my mind goes back to the Robbins report, which I had the honour to help to write. That was published 40 years ago and it reminds one of a different time. At that time, 5 per cent of the age group went to university and it seemed quite daring to us to recommend a considerable increase to of the order of 12 or 15 per cent—nothing like the present figure of close to 40 per cent. That was in 1963. It is interesting to remember that the figure remained at around 15 per cent until the late 1980s when the massive expansion took place. In my view, with great respect to all those involved, those expansion steps were both less firmly based than the Robbins expansion, which was based on a careful pool of ability analysis, and were also less firmly translated into funding requirements. That is the heart of where we are today.
I had intended to speak about the nature of the crisis, the type of decline we are witnessing and the size of the funding gap, but all of that has been addressed by noble Lords. I can therefore save several minutes. But it is a crisis and it threatens to get worse. So what do I expect, or rather hope for, from the White Paper?
Being in the hands of those clever people in the Treasury. it will undoubtedly be full of many options—probably too many—combining central funding, a graduate tax, top-up fees, grants, subsidies and so forth. My hope is that the part of the White Paper which deals with such funding options will he almost the least interesting part. I look to the White Paper—it is meant to be a strategy—as focusing on three or four key points. All of them have been stressed by your Lordships.
The first is the quality of the sector. That issue must be first because there is no point in talking about access to something that is falling in quality and likely to fall further. So, central must be a commitment to what the Government believe, with whatever consultation now follows, is essential to the quality of a great university. After all, for many years we have had, and still have, some great universities.
The funding gap must be agreed. It is good news that the Government have agreed that there is a funding gap, but the size has not been agreed. I do not feel totally convinced that the Government understand fully what the nature of the slide of standard means in terms of losing good people, in terms of poorer research and, above all, in terms of the current
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ludicrous academic salaries. All that has to be understood and accepted as crisis facts in the White Paper. The funding agreement must be there.
Secondly, as has been said by a number of your Lordships, the support needed to achieve quality must. must, must apply to all universities. Of course we all know that some universities are better than others, but we are talking about a whole system containing immense variety and diversity, all of which is a good thing. I recognise that the top research universities, members of the Russell Group, need funding to ensure that they can attract and retain the highest quality of research and teaching personnel. But, as has been said most adequately by others, we must avoid a two-tier system. I like the concept of a multi-tier system. That is what we have and I believe that any proposed financial solutions must apply to every tier. recognising variety. respective functions and responsibilities.
A sentence in the Robbins report—which contains, incidentally, probably the best discussion of what diversity in the system means—states:
"There should be no freezing of universities into established hierarchies—the organisation must allow for free development of institutions at all times".
Free development—changing roles, changing functions—is one of the joys and challenges of being in a university. The freezing to which the Russell Group refers worries me. I should like to live long enough to see the Russell Group—perhaps it should move to a different hotel—interesting itself in the remainder of the university system.
I have nothing to add to what has been said about funding. Higher education is a public good and. therefore, public funding has an essential role. I wish that I could follow the noble Lord. Lord Renfrew—he is so right that the ideal solution is central funding all round—but every time I read a new paper on the graduate tax or top-up fees I change my mind. They all have disadvantages; they are all divisive; none of them promises the universities what they really need. I shall say no more except that we shall all have to read the White Paper. I hope that it will be possible under the procedures of the House to establish some kind of an informal—or perhaps formal—group and to use the expertise here to discuss these various options.
I end by saying that I shall not approach the White Paper with the greatest interest in graduate tax versus top-up fees and the mix of bursaries, grants and so on that are on offer; I shall approach it on the following criteria. First, as the noble Baroness, Lady Warnock. said, do the Government now accept that the universities are part of the seamless web that is the education system and cannot be separated from it? Secondly, do the Government now accept that it is time to treat universities as less of a nationalised industry, with central planning confined to a benign relationship between HEFCE and the universities?
Thirdly, do the Government accept that it might be better to drop the 50 per cent target and to replace it with a specific target for the working-class population, of which at present only 14 per cent enter university? Let the target be not 50 per cent overall but, say, 30 per

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cent for the two lowest social groups. Fourthly, and finally, do the Government accept the need for the various funding arrangements that ensure quality? We want more in the White Paper than merely clever options on inadequate funding schemes.
6.33 p.m.
Lord Alexander of Weedon: My Lords, A is a privilege to follow the noble Lord, Lord Moser, who continues to make such an outstanding contribution to education. I, too, apologise to the noble Lord, Lord Baker, and to the closing speakers—particularly to the Minister—that, because of a speaking engagement, I shall unavoidably have to leave before the end of the debate.
I declare an interest as Chancellor of Exeter University, a university the finances of which are tight but which, within current restraints, are in good order. We are making a conspicuous contribution to the economic and social life of the South West with the new Peninsula Medical School, the Combined Universities in Cornwall and contributions to innovation in business. We also are enhancing international disciplines, particularly important Arabic and Islamic studies.
We are popular with students—this year alone there has been a 25 per cent increase in applications; our record for employability of graduates is high; and our campus is one of the most attractive in the country. But, for all I hat, the availability of increased funding will be, for us as for others, absolutely key if we are to deliver excellence and international competitiveness.
I share the view of other noble Lords that the treatment of our very fine academics is shameful. As the noble Lord, Lord Desai, pointed out, given that they are asked to teach ever more students for an ever diminishing salary, is it not remarkable that that has not caused a great diminution in the quality of research? But, even though it has not happened yet, it remains a very real danger of the present pressure we put on academics.
Several noble Lords commented on the pressures imposed on funding by the target placed by successive governments to get 50 per cent of school leavers into higher education. I suspect, as do others, that the target is too high. I am sure that the resulting under-funding of universities as a whole is undoubtedly far too high a price to pay. To support the higher education of extra students, we are in real danger of creating a spiral downwards into mediocrity.
I hope that it is not old-fashioned or unacceptably elitist to say that society must above all in higher education be alert to encourage its most promising talents. In saying that, I declare unequivocally my support for equality of access. My own parents—retired tradesmen—could not have paid for me to go to university. The very thought of top-up fees would have made that quite impossible. I was fortunate that I was eligible for a full state grant in those roseate, halcyon days when I. went to university.
I do not believe that the Government's dash for growth in absolute numbers is equalising access. Indeed, the evidence is the other way. In 1994, 77 per
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cent of children from the highest social class went to university and, as the noble Lord, Lord Moser, said, only 14 per cent of those from the lowest social class. In spite of the absolute growth in numbers, those figures are unchanged today.
Against that background, I believe that it is fundamental that as a society we should not contemplate any deterrent at all to bright youngsters going to university. Students are graduating already with debts of up to 15,000. I know from our own guild of students that some robustly shrug this off as a problem they will handle when they get a job; others try to minimise the debts by paid work in term time and on vacation. But some are simply frightened by the risk of debt, and students in our guild undoubtedly believe that top-up fees will be a deterrent.
As has been pointed out, they will be a deterrent to those who are sometimes called "middle classes.' when in fact we are talking about people in middle income groups—groups on which there are considerable pressures if they have a number of children; groups who are fearful about the current state of pension uncertainty and whether they will be able to find fees for their children out of taxed income. The Government have said that they will not increase the headline tax on income, but the ability of these groups to find these fees is very questionable.
I recognise that the funds have to be found from somewhere. I do not have a perfect suggestion but in Australia. as I understand it. there is a state-run loans scheme which can cover much of the cost of a degree. The graduates pay their loans back only if they have reasonably high incomes when in employment. So the students need not be put off by fears that their chosen job may be less well paid. Incidentally, as I understand it, there is no evidence from the Australian scheme that the social make-up of students has changed for the worse.
So, a sensitive scheme—a properly phased scheme for repayments—might be acceptable. But we have to be very careful to avoid the deterrence and the perception of a deterrent, as has been mentioned, by simply imposing straight top-up fees without the most sensitive ways of providing that those who have to take out loans to pay them need only repay those loans—whether from some form of graduate tax or otherwise—when they are in employment.
In a recent, typically trenchant editorial, the Economist stated:
"Britain's universities, the nurseries of the next generation's brains, are being ruined, and the government is doing nothing to stop it".
At this point, enter Mr Charles Clarke. I welcome his arrival as Secretary of State. He is someone of fine educational values and courage. I hope that he will devise a solution that is consistent with the values that he cherishes and that he will use his courage to take on the Treasury.
6.41 p.m.
Lord Livsey of Talgarth: My Lords, I bring a rather different perspective to the debate. I have admired the contributions made. My mother was widowed when I was aged three. For the rest of her career, she financed—jointly with the state—my education.
I want specifically to discuss the situation in Wales, and also the macro-problem of funding all universities. Being analytical, there are two major points to be made. First, are we sure that current output targets for the numbers of students to graduate are realistic? That point has been made by many speakers. Secondly, are we boxed in by artificial restrictions, imposed by taxation limits, which have reduced resources for education? I am sure that that is the case.
Clearly, a reduction in the numbers of students targeted for graduation would lower the overall cost of university education and a modest increase in taxation, say, of 1p or 2p in the pound, would create more resources. Both, acting together, could help to solve the funding problem in the university sector.
The 50 per cent target in terms of numbers of those of university age is unrealistic. For a start, the results of a recent survey demonstrate that only half of those in this age group know what 50 per cent actually is! Of the 50 per cent who do know, not all are university material. At least 15 per cent are better suited to technological, two-year, sandwich-type courses with hands-on practical work experience which would enable them to earn good money while they were studying instead of moonlighting, as happens at present, to pay off their student debt. A two-year course is less expensive and could in time be transferred to a full degree during a lifetime of learning if such is required later in their careers.
I have been involved in multinational industry, in managing estates and in further and higher education. I have been fortunate to have such a varied career. The courses that I taught as a senior lecturer were the two-year style courses that I mentioned. The students had no difficulty as regards employability. They have done very well on the whole.
At present, the University of Wales still has a federal structure. There are four university colleges, plus a new one, plus the University of Glamorgan—six in all. The principle of my party, the Liberal Party in the 19th century and the Liberal Democrats now, is equality of opportunity. In Wales, we have a tradition of creating our own universities. Collecting moneys from the pennies of the people to found the universities meant a much more egalitarian education system. Access for students, many from poor backgrounds, in the 20th century—by means of publicly funded grant aid—made university education affordable and accessible to many people in Wales. Our universities have achieved world-wide renown.
Responsibility for education funding in Wales was transferred from the Department of Education to the Welsh Higher Education Funding Council and is now with the National Assembly for Wales. The National Assembly government are keen to promote continuing affordable and accessible university education. They
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reject top-up fees outright, first, because they narrow participation, and, secondly, because up-front student fees deter both those who can pay and those who cannot. They deter both groups and create disincentives in the process.
The Welsh Assembly government, in which my party is a partner, believe that we now need Assembly learning grants. These have been created to provide incentives for students. The Rees committee was set up, and it too recommended the creation of learner maintenance grants. These will ultimately enable the abolition of student tuition fees in Wales. Indeed, aspects of means testing are presently being considered.
It is interesting to note that in 1997–98 in Wales expenditure per student was £4,586; in England it was £4,577 per head. By 1999–2000 it had risen in Wales to £4,728 and in England to £4,866. After three years of Assembly government, in 2001–02, expenditure per student in Wales was £5,253; in England it was £5,257—identical; we had managed to bring the figure up to that level. In Scotland, expenditure per student is £6,361–21 per cent higher than in Wales. We believe that more expenditure on research in Wales is necessary. We shall certainly have a deficit in the funding of resources for research at the present time.
In relation to the whole of the United Kingdom, I want to make two important points. The first is the position of students. Most students these days are poor. Most are in debt after taking out student loans. What a legacy from a generation who were educated for free, by means of grants, to impose on the next generation! Students are skipping lectures—many are often too tired to attend because they have been working overnight. There are ever larger lecture groups, but at the same time students are dropping out.
The staff of universities and higher education establishments are the subject of a 2.3 per cent pay increase. As many speakers have said, academic staff receive very poor pay. Before I entered the House of Commons I was a senior lecturer with a Master of Science degree and was paid only the same as a police constable. I note that the situation is precisely the same now for lecturers. They are on the kind of pay scales that I was on before entering Parliament 16 years ago. Forty-five per cent of all staff are on short-term contracts—just think of that. What does that do for their morale? At present there is little job security for them. They need a pay review urgently and a better structure in their chosen career, which is vital in ensuring that the next generation is properly educated.
To sum up, my party and I reject top-up fees. They will reduce participation. They will create disincentives and deterrents for poorer families' children to go to university and will create a two-tier education system for universities. A Cubie-style Scots system of graduate tax would ensure the abolition of tuition fees and more participation by a more mixed, diverse student population. The funding gap, which is the big problem, can be closed through higher taxation, revision of university target numbers, the introduction

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of technological degrees and HNDs and work experience. The impact of student loans must be examined. Such a programme would give quality and affordability and ensure a fair system for students.
6.51 p.m.
Lord Charley: M y Lords, I intend to restrict my comments to the single issue of pay levels, which was referred to by the previous speaker and many others, including the noble Lord, Lord Baker of Dorking, in his outstanding opening speech. My starting point is the observation made by the noble Lords, Lord Livsey and Lord Renfrew, that the top level of pay for a university lecturer is now the same as that for a Tube driver. A lecturer's starting level, perhaps six years earlier, would have been around £20,000. Before that, he would have been carrying out a postgraduate PhD or other studies, trying to eke out an existence on a grant of around £8,000 a year.
I asked an academic to whom I talked about the situation of a lecturer who has taken out a loan as a student. The answer was simple: he would not have to repay the loan because his pay level is below the minimum threshold. There he would be, in his thirties, on a terribly low salary, with a loan around his neck—it is not forgiven. How would he ever get into the housing market to secure a mortgage for his family? What a way to incentivise some of our country's best brains.
The problem with academic pay levels has a very long history of deterioration, which has been accelerating. In 1905, a professor was in the top half per cent of the population in salary terms. By about 1950, a junior professor's salary was in the top 2 per cent. In the past 10 years, professors have been in only the top quintile. It was pointed out earlier that in the 1980s academics have averaged a less than 10 per cent pay increase in real terms compared with 35 per cent for NHS doctors and teachers, for example. The Dearing report recognises the problem of decline in academic salaries. The subsequent Bett report in 1999, which has not been mentioned, covered the subject in much greater detail. It confirmed the trend and noted that pay levels of HE staff were significantly below market levels for equivalent employment in other sectors.
Comparisons are only one measure. We need to look for other indicators, even though they are often difficult to handle; for example, recruitment and retention. A report commissioned by HEFCE and Universities UK and published last May notes that recruitment and retention difficulties for both academic and support staff have continued to worsen year on year since 1988. The report quotes quantified figures as supporting evidence.
A separate report a year ago on London higher education institutions by the London Higher Education Consortium confirms this and highlights the serious problem in London. Academic wastage has averaged 16.3 per cent over the past five years. That would surely be considered a rather high figure for middle and senior management in industry. The really
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serious difficulty is recruiting in the fields of computing, IT, accountancy, finance, marketing and law. Predictably, London housing costs are a,
"huge difficulty for younger staff and a deterrent to otherwise well qualified staff outside London".
I am told that the poor career prospects for academics is reducing the number of good PhD candidates. Nor is the prevalence of short-term contracts for researchers and junior staff a satisfactory working arrangement for tenured senior staff. Life is becoming hand to mouth.
These reports must be set against an AUT estimate that the HE sector will need an extra 40,000 staff over the next eight years. The figure has been mentioned before, and I suspect that it is generally agreed. That is to meet the normal retirement wastage and to provide the teachers to meet the Government's 50 per cent target, about which we have heard so much. One wonders at what stage the Government will sit up and take notice. It seems that we have got things the wrong way round. We have chased a policy goal of student numbers—almost every other speaker made this point—and we are still chasing it, with, incidentally, little, if any, economic rationale. As a result, we have hugely damaged the institutions on which this burden has fallen. To quote the Economist:
"Since 1989, funding per student has fallen by 37% in real terms, while student numbers have increased by 90%".
I note, en passant, that, if the fashionable argument for pay increases, the only argument acknowledged by the Treasury—namely, productivity improvements—were to be advanced, the dons would have a good case. On these figures, their productivity has been prodigious since 1989. If a widget company were to achieve such figures, it would be the darling of the Stock Exchange. Noble Lords may detect a touch of sarcasm in my voice.
What is to be done? Sometimes I wonder whether there should be a pay review body for HEIs. After all, doctors and dentists, nurses and the Armed Forces have one. But the Bett report did the job anyway. Incidentally, it had many useful things to say about human resource management in universities. After all, Sir Michael Bett was the chairman of the Nurses Pay Review Body. But, I am told, very little of it has been implemented. In the 1980s, I was a member of the Top Salaries Review Body. It was a profoundly unsatisfactory experience. I was far too close to the irrational and dead hand of the Treasury, which is today far worse than it was 15 years ago. It now has an extraordinary obsession for micro-management, as the noble Lord, Lord Moser, who is not in his place, also mentioned. The closer one gets to it, the more dangerous the pay review body will be.
If we are to have decent universities, let alone world-class ones, we need either to have fewer students or to find much more money by whatever route. Having listened to this debate, my inclination would be towards top-up fees plus bursaries. I do not mind about means testing. It is not just about academic salaries; adequate human and physical infrastructure support is needed. The incomes per student at Harvard

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and Yale are, respectively, 4.5 times and 3.2 times that of Oxford. Those are huge differences. Surely we must aspire to that if we are to have world-class universities.
I end by reminding myself of the old saying, "If you pay peanuts, you are likely to get monkeys". I hope the Government take note and I look forward to a White Paper that will deliver funding.
7 p.m.
Baroness Carnegy of Lour: My Lords, I rise with diffidence; my only interest being that I have the privilege of honorary degrees from three universities, in which I take a specific interest.
Now that the funding of Scottish universities is the responsibility of the Scots Parliament, it might appear to be a separate consideration with no place in this debate. On the contrary, I do not think that I am alone in Scotland in believing that Scotland's problems cannot be separated from those south of the Border. I shall explain why and suggest that there is one feature of universities in Scotland that might be further extended south of the Border with advantage. I do not know what noble Lords will think about that.
The noble Baroness, Lady Warwick, pointed out that the hole in university finance stretches across the United Kingdom. That of course is true, but otherwise the situation in Scotland is somewhat different, as many noble Lords know. I am sure that the noble Lord, Lord Sutherland, who knows much more about the situation than I do, will address that later.
The Government's aspiration of 50 per cent already more or less exists in Scotland, for good or ill. To see the effect, noble Lords should look to Scotland to decide whether they think it is a good plan. Fees are deferred and paid after one leaves university. Some 90 per cent of Scots students go to Scots universities and only 10 per cent go south. There are more higher education institutions per head of the population than in England and more higher education courses in further education colleges. More students live at home and travel daily. The Scottish Higher Education Funding Council funds the whole of higher education, not just universities.
The black hole in finance apart, the differences in Scotland are considerable. Probably wisely, no Scots higher education institution, as far as I know, has come out publicly in favour of any particular way of raising extra non-government finance for higher education. There is, after all. a Scots Parliament election next May.
Only the Deputy First Minister, Mr Jim Wallace. on behalf of the Scottish Liberal Democrats, has said, as the noble Lord, Lord Livsey, has just said, that they will totally reject top-up fees. However, should greatly increased funding begin to flow into universities in England and Wales and not into Scotland, by way of top-up fees or any other scheme, freedom to set higher salaries south of the Border to employ more high quality academics might well start a serious academic flight southwards, at any rate from universities such as Edinburgh, Glasgow, St Andrews, Aberdeen and
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Dundee, and would make it even more difficult for those universities to compete for academics from abroad. Much depends for them on being able to do that. More Scots students attracted to better-off universities south of the Border would much resent it if they did not qualify for the higher level of loans that might be available in England because of, say, a top-up fees system. Conversely, students from south of the Border might be less willing than now to apply to universities in Scotland that would be less well equipped. That would be a tragedy for Scotland. Incoming students, many of whom stay on with us or return to work in Scotland, are hugely important to the economy and culture north of the Border.
Higher education arrangements across the United Kingdom are clearly closely interlinked. Surely the funding systems must reflect that. I want to ask the Minister a question about the vital point in a moment.
A feature of higher education in Scotland that might with advantage be given greater emphasis in England is the ease with which students can progress from further education to higher education. For the less academically able, to go to university straight from school, or indeed some years after leaving school, can be difficult. That is where a lot of the drop-out comes about. To begin with a sound further education qualification and then proceed to a degree is a much easier transition for many. The dovetailing of further education and higher education courses and the way a further education certificate or diploma can take a person into, say, the second year of a related degree course is particularly well developed in Scotland.
The Open University illustrates that. In Scotland in 2000–01, 23 per cent of all undergraduates enrolling for Open University degree courses had as their highest previous educational qualification a further education HNC or HND. Interestingly. in the United Kingdom as a whole, the figure at the Open University was only 11 per cent—less than half. The Open University in Scotland, finding the further education route such a useful way to degree study, has just produced a detailed publication showing precisely how a person's particular further education qualification can provide a head start to an Open University degree while he or she continues in work. As a cost-effective way to widen participation, reducing the numbers who drop out and increasing the numbers who do well, such further education routes surely need further development across universities in general. They would also help to solve the problem of too many graduates having difficulty finding work and, as happens in Scotland, too few really well educated people who are, say, plumbers or joiners.
I come back to my question for the Minister. Do the Government accept that, despite devolution, any decision on how to bring in increased funding in England and Wales will inevitably have massive implications for Scottish higher education? Before their proposals are published, will the Government therefore consult the Scottish Executive? It would seem extremely unfair on Scotland if the Government made devolution an excuse to pay no attention to what the Scottish Executive is thinking.
7.8 p.m.
Lord Hannay of Chiswick: My Lords, the debate is timely, if not overdue. I thank the noble Lord, Lord Baker of Dorking, for the initiative that he has taken. There is now a much wider understanding than there was some months ago, when the noble Lord, Lord Dearing, initiated a similar debate. As a number of us in the House with connections with higher education—O declare an interest as Pro-Chancellor of the University of Birmingham—have been saying, all is far from well with Britain's universities, and in particular with the lack of financial resources available to them.
I shall not try to drown the House in statistics. The universities say that if they are to play their part in the Government's agenda of widening participation, of moving to 50 per cent of the population in higher education and of maintaining world-class universities, as they would wish to do, they need £9.94 billion of additional resources in the years ahead. It is important to understand that that figure has not simply been plucked out of the sky, nor is it a compilation or padded wish list of the universities' own making. It is a figure costed with the Government's own methodology and designed to meet the Government's own targets. I should be grateful if the Minister would confirm that point when she replies to the debate.
The hard fact is that this country currently spends a fraction over 1 per cent of its gross domestic product on tertiary education, while many of our main competitors spend far more—in the case of the United States and Canada, more than twice as much. In a fiercely competitive market, where our priceless asset of the English language gives us a head start, that is no way to ensure that we continue to have world-class universities.
A fierce debate has broken out—indeed, it has surfaced a good deal in this House and during today's debate—as to how any substantial increase in resources for higher education is to be funded. Is it to be funded out of general taxation, as is the case with the health service and primary and secondary education? Alternatively, is it to be funded by top-up fees, and, if so, how does one avoid damaging the objective of widening participation? Is it to be funded by taxing graduates when their earnings begin to reflect the undoubted benefits that they derive from a university degree?
This is an uncomfortable debate for the universities, although I note that not everyone feels uncomfortable about it. But it is uncomfortable because it causes tensions in their relationship with their students and also in their relationship with their students' parents, without whose backing many will either not go to university in the first place or will not last the course. In a sense, in any case, it is not the universities' call. It is not they who have imposed constraints on the fees that can be charged. It is not they who can loosen those constraints. It is not they who can decide the level of taxation and of public spending on higher education. These are matters for the elected representatives of the people in Parliament to decide. I will not, therefore, go
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any further into that aspect other than to say than: I find it hard to believe that any one of the funding options for additional resources will provide a full, effective and equitable solution. I suspect that there will in fact need to be a judicious combination of several of these different elements.
However, I should like to make one or two other points about finance and the universities. First, we need to recognise that any radical shift will not only be contentious but it will also take time, perhaps quite a long time, to bed down after it has been introduced. During that interim period, which could be several years, the universities must not just be left to their own devices, saddled with demanding targets that they do not have the resources to achieve. There must be bridging resources to ensure that the universities, to which any new system will apply, are not bled white in the meanwhile. Perhaps the Minister can say whether the Government accept that need for a bridge to get to wherever they are going to lead us.
Secondly, we need to ensure that the widening participation agenda is not damaged by arty changes, indeed that, if possible, it is strengthened. For all the efforts in this respect so far, the results are still rather meagre. The last thing we want is for a kind of planning blight to descend on the widening participation agenda. Thirdly, we need to ensure that the burden of student debt does not become greater. The strains imposed by such debts already weigh heavily on many. Getting some work experience while a student is a laudable objective: but it must not become a primary consideration for students at the expense of their studies. Fourthly, the universities must be helped to pay their staff a fairer wage. If they do not do so, the haemorrhage as people go off to greener pastures will continue, and the universities will lose their most vital capital asset—their academics.
There is one other measure that the Government could take to help universities during this difficult period: they could reduce the burden of bureaucracy imposed upon them. When I first entered this sector, it was truly horrifying to me to find just how much highly-skilled labour—I almost said "highly paid", but that would be an oxymoron in the university field—has to be put into meeting the demands of red tape. The Research Assessment Exercise, which was completed last year, was a case in point. It took an enormous effort in order to achieve a financial benefit that left most universities precisely where they were before they started. Running hard in order to stand still did not make a lot of sense to Alice, and it does not make a lot of sense to universities.
So far, the Government's response to the problems of the universities has been, I have to say—I get no pleasure from this—dilatory and inadequate. We were first told to wait for the outcome of the Comprehensive Spending Review in July. When it carne, there was some good news for scientific research but not much else. We were then told that we should have to wait until the autumn, which the noble Baroness who is to respond to the debate defined, perhaps a little generously, as "late November". Now we are told that the 10-year strategy White Paper will be unveiled in

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January. Well, it may be worth waiting for if the new Secretary of State really has used the intervening time to bring his undoubted intellectual and political skills to bear on a part of his empire that has hitherto been somewhat neglected. But it will only be so if he also uses that intervening period to consult the universities on the way ahead. So far, such consultation has been more notable by its absence. But I was glad to hear the noble Baroness, Lady Warwick, say that that was now being remedied to some extent.
The Government and the universities are ineluctably locked into a public/private partnership, in which neither can succeed without the wholehearted co-operation of the other. It would be good if 2003 could see us both getting onto a new footing and working together for our shared objectives. But that cannot be achieved unless the universities are given access to increased financial resources.
7.16 p.m.
Lord Lucas: My Lords, I believe I am the first speaker who has no connection whatever with a university other than having attended one. Therefore, I approach this producer-dominated lecture that we have received today with great cynicism. The university sector is one with which I have a number of long-standing quarrels. Universities are totally inadequate in what they do to encourage participation from the lower social classes. Indeed, that was well illustrated today by the noble Lord, Lord Watson, who talked about the German course at Oxford. How many young people brought up in the back streets of Manchester want to learn about the origins of German? If they want to learn German, they want a practical course—something that is concentrated upon enabling them to understand Germany today.
If you want to study architecture at Cambridge, you have to read a huge pile of books on the subject before being accepted. You must have an enthusiasm for architecture. That is not required if you are studying physics: you are just asked to pass the exams. Again, that is another barrier placed in the way of young people who do not come from the sort of background from which both Oxford and Cambridge are accustomed to getting their students. There is a great deal more that can be done in that respect.
I am also extremely cynical about this wish of the universities to be freed of any kind of tie in terms of their funding. They want to be funded by the Government, but without any responsibilities to government or to the public. To my mind, universities have been very slow and extremely inadequate as regards the sort of information they supply to prospective students on what they might expect to receive in later life as a result of the degree course for which they are now being asked to pay very substantial sums of money.
I do not approach this debate as a natural friend of the universities. However, judging by what I know and what has been said today, I am totally convinced of the case that has been made for more money. It is clear
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that we have let university funding deteriorate over the past 20 years to the point where we are seriously threatening the quality of our universities and the education they provide. It does no good for the Minister, Margaret Hodge, to say that there is no danger. That is what the Government said a year ago about A-levels; and now that storm has broken. We are not far away from the storm breaking point in terms of university education, especially if we are to impose additional financial burdens on students.
It is ridiculous to quote a figure of about £440,000 in relation to what a university student gains from attending university. If that was ever true, it was so when 10 per cent of us went to university. It cannot possibly be true when 50 per cent of us attend university, and when so many profitable trades are ones that can be reached without a university education. It is a false prospectus, and one for which the Minister would be strung up in front of the authorities if it were a financial rather than an educational prospectus.
Now, when there is a great deal of ferment about what should be done and when there appears to be a good deal of chaos within government about the way forward, we need to take action. To my mind, this is a time of great opportunity. We can now settle upon something that will set universities on the right path. There is a chance for all sides in this debate to think both radically and differently. We can come to a conclusion that will suit us all and leave us in a position that I believe every speaker in this debate has wished to achieve—one where our best universities are on a par with those in the United States and where our more run-of-the-mill universities, if I may so describe them, are providing excellent education to the young people whom they are educating through the kind of courses that they require and at prices that arc not the same as those that apply to someone attending Oxford and who will subsequently gain employment as a merchant hanker or as an economist at the LSE.
Why should someone ending up as a perfectly good social worker from a very good course in social work at one of our universities have to face the same burden as someone going on to a much more highly remunerated career? That just does not seem fair. I think that we can achieve a system in which there is fairness, quality and vitality and in which the universities are much more answerable to their customers and pupils.
If we are thinking that 50 per cent of students should go to university, we are not so far away from the idea that we can provide everyone with an entitlement to a state-funded education beyond school. They could take that entitlement whenever they wanted. It would he a fund into which a 30 year-old, for example, could dip in order to climb a rung or two in plumbing or in any other profession. The facility could be provided to everyone and there would be no rush to take it at 18. It could be used at any stage in one's career. ILAs were a step in the right direction, although the programme was mismanaged. We could continue in that direction if that programme were re-established.

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We can address the issue of equality by offering the same thing to everyone at a basic level. Clearly, education is a public good at a certain level. However, it is not at all clear that educating a merchant banker is more of a public good than educating a plumber. Indeed, I have rather more use for plumbers than for merchant bankers—an occupation in which I spent a good deal of my life. It is time to embrace the need to educate everyone and to produce an education system that is basically equal. That is the function of government grants, and that is the function of access funds and of supporting those who need funding while they are being educated. Everyone should have access to that.
Beyond that, I favour a graduate tax. A graduate tax and a graduate loan are different in only one respect. One can contrive a graduate tax that looks like a graduate loan in every respect but one—the absence of debt. Although I know that I shall be paying a substantial amount of tax over the next few years, I do not think of that as a debt. If I had the same debt and had to repay it over the next three years, it would weigh much more heavily on me. That is the only natural difference between a graduate tax and a graduate loan. It is much better and much less frightening for a student to be faced with the idea that they may have to pay a little extra tax when they are doing well than to face a debt on leaving university of £10,000, £15,000 or £30,000, as they do now. I know how heavily such debt would weigh on kids struggling to get by in London on £20,000 to £25,000 while working their way up through a relatively poorly paid profession. They need to be free of this debt. None of us minds the idea of paying a hit of tax. We can cap a tax or start it at a particular level. We could make the repayment profile exactly the same as that for a loan but without the debt. That is why I like the idea of a tax.
Specifically, I would make the tax a right of the university, with the Government there merely to collect the tax. The university would be entitled to the tax only when it was collected. A university would therefore receive only its entitlement to the graduate tax based on the quality of education it had provided. The universities would, with certain restrictions, also set the terms. So an Oxford graduate tax could start from a higher level and be greater than the tax for a degree in social work from the University of Bradford. Students would see the tax as part of the overall package. I could go to Bradford and pay a 2 per cent graduate tax commencing when I was earning 14,000 annually, or I could go to Oxford and pay a 5 per cent tax commencing when I earned £30,000. The tax could be set by the university, and the university would be entitled to the money when it was collected.
As no university would want to wait all those years, universities could first ask pupils on graduating whether they wanted to buy themselves out of the tax. They might say, "We will not charge you this tax if you pay this sum now", but the graduates would still have the option to let the tax continue. Oxford could even say to investors, "Will you buy an Oxford graduate tax bond, fund us now, and receive money from the tax in future?" It would be a jolly good investment.
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That would apply to certain universities and to certain courses—as it would to some courses at the University of Hull, for example. Hull has some wonderful courses, and it has some courses which I might not rate so highly. However, pupils would clearly be willing to pay highly for its politics and drama courses. It could charge a heavy tax for those and expect to do well, whereas it might not do so well in other courses. The position could shift and change over the years. The universities could set the tax, which would he much more responsive to the market.
7.25 p.m.
The Earl of Mar and Kellie: My Lords, I am most pleased to follow the noble Baroness, Lady Carnegy of Lour, who has so admirably set the Scottish scene and thereby relieved me of the need to do so. I am intrigued by the title of the debate, on British universities, for I am also under the apprehension that universities in Scotland—like research councils in Scotland, as a footnote—are a devolved matter. However, as this is a debate and not legislation, there is probably no harm done.
Scottish university funding is influenced by a hypothecated sum in the Scottish block grant. As that is a reserved matter, the United Kingdom Government can be held to account for it. Noble Lords will be aware of the Scottish variation in the approach to student care, about which I shall say a little more later.
Scottish universities have always been different. They are retained pre-Union institutions specifically excluded from the Act of Union. More recently, at the end of the 19th century, the financing of Scottish secondary education caused the establishment of the Goschen formula. The above-average and enthusiastic take-up of secondary education by the Scots had already manifested itself in Scotland's supply of technologists to the British empire and to the world. That must have had a knock-on effect on the take-up of university places.
By the 1960s, higher education was surprisingly well supported by the state. I was a college of education student from 1968 to 1971, albeit on a social work course, receiving the minimum grant of £50. I recall paying a total of £73 a year as annual fees. I also recall that most young people did not attend higher education, with only 10 per cent, I believe, doing so. The number attending higher education has more than quadrupled since the 1960s. As has been widely remarked, the UK Government now seek to increase the number to 50 per cent. I have no objection to that goal provided that the students have the necessary ability.
It is long established in Scotland that ability and talent should be developed wherever they manifest themselves. So we have the tradition of the "lad of parts"—a youngster of humble origin with talent. Local landowners would club together to enable the education and development of the local population. So, in Alloa, for example, in the mid-18th century, Abercrombie of Tullibody, Lord Cathcart and John Francis Erskine—the restored Earl of Mar—

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clubbed together to sponsor David Allen, the portrait and landscape painter nicknamed the Scottish Hogarth and one of the sons of the harbourmaster in Alloa. They sponsored him to go to college in Italy to develop his skill and ability as a painter, benefiting not only David Allen but the whole of cultural Scotland.
Albeit limited, that was a 19th century solution. In the 21st century, we must ensure that all talent is developed in whatever home it evolves. Such an objective will always be in the interests of the individual, the family and the economy, and it will always enhance the well-being of the locality, the nation and perhaps the world. As one trying to be a Scottish internationalist, I must believe that the Scottish Enlightenment—that great legacy of the 1706 treaty, and a product of permanent peace with England—did not end in the 18th century, but must be encouraged to continue.
I have little resistance to the idea that government financial support for higher education should increase. Trying to live up to being a social democrat causes me to believe that we all benefit collectively from human individual success and thus we should not be shy of contributing towards the launch of that success, and nor should our governments.
I read the article by the noble Lord, Lord Baker, in the Daily Telegraph this morning and noticed a parent's letter below it complaining about a son who received only five hours of lectures per week and was thus left to educate himself. I think it is worth reflecting on the fact that merit, an identifiable commodity, is the marriage of intelligence and personal effort.
Finally, in Scotland we have gone our own way, as is our ongoing destiny and right. My honourable Scottish friend, Nicol Stephen, as junior Minister for higher education, has ended tuition fees for Scottish students and has brought in a graduate endowment tax. Maintenance grants in the context of hardship have also been introduced. I always preferred that Scottish approach because it views the student as an adult rather than as a dependant. The graduate endowment of £2,500 is collected as the individual begins to earn, irrespective of the financial circumstances of his or her parents. The availability of maintenance grants in the context of hardship is a recognition of an unfortunate reality but does not compromise the treatment of the student as an independent adult. The graduate endowment tax is subsequently collected and, of course, is used to make the funding of maintenance grants self-sustaining.
The most urgent issue in Scottish education is, in my view, not the take-up of further and higher education—there is a strong tradition in many families—but the attitude of other families to education, in particular to the education of boys. There is little demand for "braw laddies" and there will be even less so in the future. All families must come to see the need for their children, particularly their sons, to embrace education and training.
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A worrying symptom of this is the collapse of the school board at Clackmannan primary school, a school with 350 pupils. No parent is currently prepared to be on the school board and so the board has had to be suspended. I am somewhat aggrieved as I was a co-opted member of that board. This need for a new attitude to education among some families is not something that government can put right themselves but governments can help with change in social attitudes. This is always a slow process but, in the context of education and training for the less than brilliant, myself included, it is the most urgent of tasks. The desired knock-on effect will, of course, be greater demand for further and higher education places.
7.33 p.m.
Baroness O'Neill of Bengarve: My Lords, I, too, thank the noble Lord, Lord Baker of Dorking, for initiating this debate in every sense of the word.
I have several interests to declare. My first interest is that for the past 25 years I have taught in the British university system. On hearing the comments of several noble Lords I am not sure how much of an interest that is. I am also Principal of Newnham College, Cambridge. More relevantly in the context of this debate, I am a trustee of the Isaac Newton Trust which I believe has constructed the most extensive system of undergraduate bursaries for students with less affluent parents at any British university. We give students at present up to £1,070 a year—coincidentally, it is the same as the tuition contribution—if their parents are exempt from the tuition contribution.
In consequence of that experience I may bring to the debate a little realism with regard to the modish phrase "top-up fee" which I believe is a great obstacle to clear understanding. There was a time—I am sorry to say that it was during the Thatcher years—when universities were supposed to achieve something called "efficiency gains". At first we believed that such a thing was possible. Then it became rather bad manners in most universities not to refer to efficiency gains by their proper name, which is, of course, cuts.
Now we talk about top-up fees. I believe that most noble Lords have referred to them. It is a term of art which means a top-up from an arbitrarily set level of tuition contribution, introduced during the first term of the present Labour Government. That arbitrarily set level implied that those students who paid the top-up fee would be in receipt of a large subsidy towards the costs of their university course. Means testing conducted by local authorities decided who paid and who did not. On the basis of some revisions of the means testing, a measure that came into effect about 14 months ago, those with family incomes—that is, parental income—below £20,000 are totally exempt from making any tuition contribution. There is then a sliding scale and the full contribution—I believe that it is now about £1,070—becomes due only when parental income reaches about £28,000. Our present situation is that no fees are paid in England by those families where the parents earn less, and that very small fees are paid by families where parents earn more.

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I do not believe that anyone has produced an argument why starting from this curious and arbitrary base level should be called a "top-up fee" or should he associated with any particular sort of iniquity. The real iniquity in my view and the aspect that damaged poorer students—several noble Lords have mentioned this—was the abolition of the grant. The difference in the monetary sums involved is the crucial issue. For a three-year degree course those families who pay the full tuition contribution will contribute the sum of £3,300—or a little less. It is a very small fraction of the costs. They will also have to provide—or else their children will take out loans, which I shall come to—around £12,000 or perhaps more in maintenance costs. But those from poorer families will still have to provide £12,000 or more in maintenance costs, and both sorts of families have access to loans which are given on concessionary terms.
So the curious result of these reforms is that better-off families receive concessionary loans for maintenance. When I put my two sons through university on a university salary we did not get a maintenance grant—we were just outside that band—and there were no concessionary loans. So what has happened in the past five years has been to the benefit of better-off families as regards maintenance costs although it has required them to make the small tuition contribution. What case can there be for not having a unitary view of the costs of tuition and the costs of maintenance and for not means testing all the way through? Why are we providing loans on concessionary terms to the best-off families?
The one phrase that I have not heard in the debate yet, which I think is a crucial one, is "means blind admissions". That is the term used in the top United States universities which we should like to follow in certain respects. That does not mean that the student and the student's family make no contribution, but that a scheme is in place that enables everyone, regardless of family background, to undertake a course given willingness and effort—indeed, effort by the family as well. I believe that that would be a reasonable objective for us whatever mixture of loans or graduate tax or up-front payments by families we look to. What matters is not in some way to hamstring universities by the false assumption that it is reasonable to provide the same fractional costs for each student, and then top up with a fee grant that is a crude measure of the relative costs of courses; we need to look at means testing the whole lot.
What would that involve? We should remember several points in this regard, which will differentiate students of equal parental income. We should remember that some courses are much longer than others. which greatly alters tuition and maintenance costs. We should also remember that some very long courses lead into low-paid careers. I refer in particular to people going into the sciences—not all of them become enormously successful biotech industrialists with many patents to their name—the academic world and, more generally, the lower paid professions. Those
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courses take many years and students cannot be expected to shell out for each of them. We should means test for the whole cost.
Finally, we should do some serious means testing. At the moment, local authorities do the means testing and my impression is that that is quite patchy. I believe that I can make that judgment: out of home student numbers of fewer than 400 in my college, I have more than 100 students who are in receipt of bursaries. All of those students are from families in which means testing of the parents has indicated that there is either no tuition contribution or only a slight tuition contribution.
It has been very hard to make these points without using the fashionable but deeply misleading term "top-up fee". I hope that that term will be consigned to the same bucket to which we have consigned the term "efficiency gain". That is not what the debate is about. It has, I am sorry to say, interested certain groups to pretend that the issues about fees and about maintenance costs are one and the same; they are not. The issue about maintenance costs has been of deep concern to poorer students. The issue about the tuition contribution has been of concern only to students from better-off backgrounds. I am afraid that they have wished to wrap themselves in the mantle of poverty as they argued against the tuition contribution. In those matters, I agree wholly with the noble Lord, Lord Desai.
7.42 p.m.
Lord Patel: My Lords, I, too, thank the noble Lord, Lord Baker, for initiating this debate. I am pleased, like many other noble Lords, that there is now an acceptance by the Government that universities are in a funding crisis. I declare an interest: I hold the professorship in obstetrics at the University of Dundee and I have allegiances to several other universities.
Much has already been said, and I shall try not to repeat points. I want to highlight the problem facing medical schools and clinical academics in particular as a consequence of the general underfunding of universities. As a direct consequence of the pressures on clinical academics, which are related to their other commitments—teaching, research and clinical care—the recruitment to clinical academic positions is a serious problem. Data collected earlier this year showed that there were 79 vacant chairs, which is one-quarter of all those funded by HEFCE, and they are mostly in key specialties. Also, 145 senior lecturer positions and 177 lecturer positions are unfilled. That occurs at a time when the Government have asked for an increase of nearly 44 per cent in the number of medical students. The new medical schools have difficulties attracting good quality academics to teach and carry out research. New schools have not attracted the funding that they need to develop infrastructures for teaching and research.
I say to the noble Lord, Lord Hunt of Kings Heath, that the review of education, training and research in the NHS is welcome but I hope that any recommendations that are directed at universities will

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be adequately funded. The universities will also be looking for greater alignment between the approaches of the Department of Health and the funding council in relation to activities involving clinical and basic medical research.
The noble Lord, Lord Baker, commented on the strength of our research. Currently in clinical medicine and in the biomedical sciences, we have a very strong base. The fact that the Nobel Prize for Medicine this year and last year was won by scientists from Great Britain is not a surprise.
Much clinical research and an increasing amount of basic medical research is also funded by medical charities, which do not contribute to overheads. Means have to be found to top up those costs; in my view, those top-up costs should be funded by the Government.
Salaries is not an issue for clinical medical academics but it is for other academics, particularly those in nursing, and to other health-related academics, whose salaries are much lower than those that could be attracted outside academic institutions. Several medical schools are having to look at significant numbers of compulsory redundancies, which will have further detrimental effects on the quality of teaching. That will have an obvious impact on the Government's human resources priorities in the NHS Plan.
I turn to the use of students fees to increase university finances. Already, students are in considerable debt when they leave university. Medical students, because of their longer training period and higher costs, have fewer opportunities to undertake paid work; on average, they have debts of between £15,000 and £20,000, as has already been said. Any proposals that would further add to that burden would detract from the numbers of students applying to medical schools.
I should personally prefer students not to have to contribute to the cost of their education but I realise that increased taxation to fund a university education is unlikely. The alternative is therefore to find some way of increasing the fees income to universities. The options have already been mentioned: top-up fees, a graduate tax or loans that will be paid back. I have personal experience of the latter. Circumstances necessitated that I obtain financial assistance to go through medical school. A loan to be paid back, rather like an endowment mortgage, was the option that I took. I should therefore favour fees being paid by all, but also being the same at all universities, and for students to have to pay them back once they have graduated.
Many noble Lords have mentioned the situation in the United States. I currently have a son at Stanford University who will pay back the tuition and maintenance costs for his studies. I agree with the noble Lord, Lord Baker. For the reasons that he stated a graduate tax is not an option that I support. Furthermore, I am concerned that once the principle of hypothecated tax is introduced, it might be used in other areas.
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In conclusion, we need to address the issue of the overhead costs of research, which are considerable, if we are to continue with high quality research. I also favour the introduction of university fees to be paid back as a loan.
7.48 p.m.
Lord Norton of Louth: My Lords, I, too, very much welcome this debate and I congratulate my noble friend Lord Baker on introducing it. I also declare an interest as an academic, who spends a good deal of time trying to draw into universities students from the backgrounds to which my noble friend Lord Lucas referred.
In the few minutes available, I would like to put university finance in its broader context, as other noble Lords have done. There are several problems facing higher education. Funding is a crucial one but not the only one. Without adequate funding, universities cannot continue to provide either high-quality teaching or high-quality research. Funding is necessary but not sufficient. As has already been mentioned, it is difficult to provide high-quality research and teaching if you do not have the staff or the resources necessary to provide it. As the noble Lord, Lord Patel, has just illustrated, attracting and retaining qualified academic staff is proving increasingly difficult. It is not simply an issue of money. As I have argued before in your Lordships' House, academics are underpaid and underresourced. However, they are also undervalued and overburdened. The situation is getting worse.
The universities are carrying a growing burden without the financial resources necessary to shoulder that burden. As the noble Lord, Lord Chorley, emphasised, the unit of resource is already inadequate. Even with a small increase, it will be inadequate in future years. It is important to stress that the changes taking place in the admissions to universities are not just quantitative but also qualitative. Taking on more part-time students, mature students with family commitments and disabled students has obvious resource implications. It is not that universities are unwilling to widen participation—far from it—but rather that they are not being provided with the resources necessary to keep pace with the growing and changing nature of the demands made of them.
Furthermore, not only are universities expected to do more—much more—with less in per capita terms, they are also expected to do so against a background of excessive regulation. The noble Lord, Lord Hannay, referred to that. In a debate I initiated in your Lordships' House in March last year, I drew attention to the burden of bureaucracy on universities. About one-third of the time of academics is spent on administration and paperwork. Much of that is unproductive paperwork, not least that generated by the accountability regime that now exists. And, as I argued then, any indirect marginal benefit is far outweighed by the costs of the exercise. One study found that the accountability arrangements

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introduced in universities had cost about £250 million and concluded that the accountability regime represented,
"poor value for money for stakeholders and for institutions".
One of the costs identified by the report was what it termed behavioural costs. Those included staff stress. Academics are finding the bureaucratic regime stifling and it is taking its toll. It is doing so against a background of inadequate resources and increasing demands. It is no wonder that academics feel undervalued and insecure. I notice that according to research by the A UT, casual bar staff feel more secure in their jobs than academics. Higher education staff, apparently, are twice as likely to switch jobs as bar staff. Various speakers have referred to the fact that someone starting in the academic world would probably be paid less than someone who becomes a fireman. I would note also that firemen probably have more time to undertake research.
The accountability regime does not deliver any notable benefits. The quality of teaching has not increased significantly in recent years as a result of that regime. If anything, the accountability regime is contributing to a decline rather than an improvement. The opportunity cost of complying with the accountability regime is significant in terms of teaching and research. It takes academics away from the job they do best and which we expect them to do. One does not increase the capacity of universities to widen participation and to offer a high-quality education to the new entrants by requiring staff to complete a mass of paperwork.
When I made the case last year for a light touch in terms of bureaucracy, I drew the distinction between a light touch and a lighter touch, which the Government had promised. A lighter touch can simply mean that the regime is slightly less burdensome than before. The Minister, the noble Lord, Lord Davies of Oldham, thought that I was engaging in metaphysics in drawing the distinction. To academics it is anything but metaphysical. The bureaucratic regime is onerous and is one of the contributory factors to highly qualified academics leaving the education sector.
It is, though, but one of the contributory factors. If academics are to be retained, and if highly qualified people are to be brought into the university sector, we have to create the conditions which will allow them to do that which they do best and which they want to do: that is, to teach and to research. The motivation is there. What is lacking are the tools to do the job effectively. Salaries, to which there have been several references, are only part of the problem, albeit an important part. What academics need, like most professionals, is a working environment that enables them to do their job effectively. That is being denied them. So long as that situation persists, our universities face a critical situation. We already know the amount that Universities UK estimates is necessary to sustain the university sector.
What that means is that it is not sufficient to look at university finance in terms of the amount that can be extracted from those who take up a university
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education. Nor is it remotely acceptable for the Government to come out with some of the unsustainable claims that have been made about student finance. As my noble friend Lord Lucas stated, we are told that graduates earn £400,000 more over their lifetime than those without degrees. That is used to justify students having to contribute more to study at universities and thus fund an expansion in student numbers. However, one does not have to be dreadfully bright to realise that with the expansion in numbers, the prospect of earning £400,000 more over one's lifetime diminishes significantly.
As my noble friend pointed out, with expansion that claim can no longer be made. The more university numbers expand, the greater society itself benefits because one has a more educated workforce, but the less the individual student benefits financially because more people in the workforce have degrees. That is a fairly obvious point but one that needs emphasising in the context of today's debate. An equally obvious point is that if graduates earn much higher salaries, they already pay a higher rate of tax.
I come back to my basic point. We have to look much more broadly at the problems facing our universities. If the Government continue to pursue the mantra of 50 per cent of the 18 to 21 age cohort going to university without addressing the consequences of that and the problems already facing our universities, then, as has been mentioned in today's debate, the situation is likely to become dire. It is no use the Government telling the universities what to do and that existing resources are adequate. Quite simply and demonstrably, they are not.
In the debate in May on widening participation in universities initiated by the noble Baroness, Lady Warwick, I put two questions to the Minister, the noble Lord, Lord Davies of Oldham. He avoided answering either. I shall therefore put them again to the noble Baroness. First, what does the Minister think should be the basis on which more students are admitted to university? Should it be the achievement of a certain minimum qualification or should it be on the basis of the benefit the student will derive from higher education? It is a fundamental question and I shall listen very carefully to the Minister's answer.
Secondly, what are the Government doing to look holistically at the problems facing our universities? It is not sufficient to treat the difficulties facing universities as discrete problems, nor for Government to shuffle off responsibility to the universities and expect them to deal with the burden and the problems. The Government have to address the problems in the round and, as various noble Lords have mentioned, they must do so as a matter of urgency.
7.57 p.m.
Lord Davies of Coity: My Lords, too, thank the noble Lord, Lord Baker of Dorking, for initiating this debate. I also wish to express my appreciation to my noble friend Lord Morgan for his contribution. I. too, believe that the funding of universities is a political issue and my stance in respect of it is wholly political.

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This debate is about the financial situation of our universities. But it could easily be about the financial situation of the manufacturing industry; of the insurance and pensions industry; of the investment industry or the housing market. I say that not to exaggerate the financial problems being faced by the British people, but to emphasise the financial difficulties students leaving university will in any event have to confront.
Having said that I want to make plain that I support the Government in the way unemployment has been reduced; the way inflation has been kept low and, perhaps more importantly, the way the Government have kept this country the most stable in the face of a global economic downturn, a position reinforced by the Chancellor's Statement today.
The Government can rely on my support in the measures they take to maintain that position. However, I also want to make abundantly clear that I do not believe that the financial problems of our universities should be solved by way of top-up fees. When I came to your Lordships' House in 1997, one of the issues being debated was the question of university tuition fees. Not wanting to vote against the Government I was inclined to abstain, but was, in the end, persuaded by my noble friend Lord Richard, then Leader of the House, to go through the Government Lobby—an act I have since regretted.
I am as conscious as anyone that new Labour came to power in 1997 after 18 years in the wilderness because it shed many of the old Labour doctrines; doctrines which produced policies that failed to attract the support of the British people; and policies, which in many respects, belonged to a different time and a different people.
Throughout those 18 years I like to think that I played a part in assisting Labour's change; in helping to remove the millstone of "militant'. from Labour's ranks; in helping to make the party more democratic by the introduction of "one member, one vote"; and in supporting the changes to Clause IV of the constitution so that wholesale nationalisation was no longer Labour's goal.
In terms of economic activity, and in particular wealth creation, I have been new Labour for so long that it has sometimes been suggested that I was new Labour before the phrase was coined. But when it comes to social justice and the way that the wealth is used—in this case the funding of education—I am passionately old Labour; for which I make no apology.
My clear understanding of the distinction between new Labour and old Labour is the recognition that capitalism—the free market economy—is the most effective way of creating wealth. I have supported that for a very long time. But, equally, my understanding of the compatibility of new and old Labour is the need to maintain and advance our old Labour values in the field of social justice and social service. I firmly place education in that area.
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To move away from the clear provision of education, based on ability and need and not on the ability to pay would be, as stated by my right honourable friend David Blunkett, a betrayal of Labour's legacy. Never must a price tag be the factor that determines who does and who does not go to university, and it must not determine which university anyone goes to.
I have often been impressed by the way that my right honourable friend the Prime Minister has spoken frequently so passionately about education. I have always believed that to mean education at all levels. An education system funded by the people, all the people, for the people. That is what I believe the Government was elected to do and what they should do.
I believe that if top-up fees are introduced, it will effectively extend the element of private education. Top-up fees will create a two-tier system, with those having the greatest ability to pay going to the best universities. It will be, in my view, unjust and unfair.
Today, we have a National Health Service that the Government are striving to improve, where patients make no payment for receiving minor treatment or major surgery. Our children go to primary and secondary schools and they make no payment. So why should we then introduce further charges for the provision of higher education? That will undoubtedly be divisive and a retrograde step. It seems to me that the introduction of top-up fees would guarantee that many would-be students would be deterred from going to university. A two-tier system of education would develop whereby those with the greatest ability to pay, not necessarily the greatest ability, would go to the best universities. That must be alien to a Labour Government.
The adverse financial situation in our universities should not be solved by the students and their families, but by the nation as a whole through the Government. Students will have more than enough to worry about with their studies, without having the burden of worrying about top-up fees.
University students, when they qualify, will be an asset to the nation, either by contributing to further wealth creation or by providing greater service to the nation. If the Government want to make sure of that, I would not be averse to giving consideration to each student giving a commitment to remain in the country for a period of time after qualifying, but certainly not being made to pay top-up fees.
I believe that the answer to any adverse financial difficulties in our universities should be met by public funding by general taxation. I also believe that most people in this country share that view.
8.4 p.m.
Lord Sutherland of Houndwood: My Lords, I also congratulate the noble Lord, Lord Baker, on introducing the debate. It is, as he implied in his excellent speech, a continuation of the discussion he initiated in 1988. As he suggested, it is unfinished business. We might have had the opportunity to finish or at least move on in 1997 when the Dearing

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committee reported. Unfortunately, its recommendations on funding were cut off in peremptory and almost brutal form in the heady days of June 1997. That was a pity because we have had five years of slip and slide since then.
I must declare an interest. Over the past 17 years I have been head of three different institutions, King's College London, the University of London and the University of Edinburgh. But my real direct interest is in the health of the pension fund to which they all contribute and to which they will do healthily, I hope, for many years in the future.
Many of the points that I might have wanted to make have been made. I shall simply underline one or two before moving on. It is good that at last there is recognition of a financial problem. I have had 17 years of dealing with that. The problem is that successive governments, certainly this one, have helped create a system which is larger than what we are prepared to pay for. That is the reality. Mr Micawber eventually learned about that; we have not. Yet the suggestion is that we deal with this by further expansion. Is it a real debate, a real proposal, that is being put forward, or simply a soundbite?
I draw your Lordships' attention to what is happening elsewhere. I was commissioned by the Hong Kong Government to carry out a mini-Dearing report on higher education in Hong Kong. As I went around taking evidence, I asked systematically the students, the staff, the employers and government officials: "Do you want to expand?" They said: "Yes, but the first question is to maintain quality. if we can do that, then perhaps we can begin to expand". That has to be the due order. Unfortunately, it has not been the reality for us.
The second point I would underline—finely made by the noble Baroness, Lady Carnegy—is that this is a UK-wide problem. Much has been said about Scotland. By the way, the belief that the teaching fund formula in Scotland is more generous than in England is, I think, due for a fall. There is interesting research being carried out, but I shall not anticipate it.
I realise too that if I were to raise further questions properly directed to Scottish Ministers, they really ought to be answered there in what I take it is a "macother place". I do not know what the term of art is for the Scottish Parliament, but that is where those questions should lie.
The trouble is that instead of being given our head we have been terribly constrained. When given their head, universities have been inventive. We need only think of the money coming into the country, as well as the universities, through overseas fees. We should think of the ways in which universities have managed to begin to create scholarships designed to get the best students from overseas. They do not want to fill up their ranks simply with students who have cheques in their pockets; they are looking for the best students. Sometimes the best students are found in the countries least able to pay, but universities are finding ways of dealing with that. Given their head, universities will be innovative. Yet we have been kept on a short lead.
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The noble Lord, Lord Baker of Dorking, spoke of the universities being treated like nationalised institutions. I can tell your Lordships from within that the iron grip of the Treasury is like a one-size-fits-all corset: it is not beautiful to observe, nor comfortable to wear, nor healthy to endure for any but a short time.
There is a danger in the debate—not in this House but more broadly—of different issues being confused. There is the clear issue of funding for universities. I am passionately committed to the proper funding of universities. There is also the proximate but separate issue of how we ensure equality of opportunity and access. Each issue must he dealt with in its own terms. It will not do to say that a funding solution will not work because, somehow, it will limit access. We would then have to find a means of dealing with the access and opportunity problem, independently of funding. If it is to be flexible fees—I am grateful that the expression has been introduced—there must he scholarships also. If there is to be a graduate tax, we must find ways of ameliorating its influence. My own—not so young, now—children are trying to move in the London housing market. They are all graduates, and, if they were paying extra tax for the privilege of being graduates, they would be in even greater difficulty. We must not confuse the issues. We should deal with them one at a time, and today's debate is on the funding of higher education.
What to do? The Dearing report laid out the likely sources, if we were to identify them properly, for teaching—the public purse, students and their parents, employers and, in the end, alumni and other donors. They will all be necessary. Public funding must continue, given the public benefit derived from the system. We simply could not afford the kind of teaching and research needed in highly technical subjects if we were to rely on private sources only. We would need 100 years of the endowment of Harvard, and we cannot wait that long. The system must be more sophisticated.
Would the Minister he prepared to suggest that, if there is to be growing regionalisation in England, one of the sources of funding for universities might be based on the contribution that they make to regions? Streams of funding could be found for that contribution. That is a specific suggestion.
"Top-up fees" is a difficult and dangerous expression; "flexible fees" is much better, much healthier. Fees, for some, will be eminently affordable. In the university of which I was head most recently, students from certain backgrounds find that their parents can buy them flats in fashionable areas of Edinburgh while funding their higher education. They could perfectly well make a contribution. Not all can—clearly not. If that is the prescribed direction, there must be an adequate means-blind—to quote the noble Baroness—admissions system with proper and appropriate bursaries.
Are employers likely to help? Some do. They walked quickly off the stage when the Dearing report came out and did not contribute to that debate, but some do help. In the University of Edinburgh, the electronics

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department has raised £2 million in scholarship funds from major electronics companies who see the benefit of helping students through. That is just one example; it cannot apply to all. I confess to the noble Lord, Lord Baker of Dorking, that I am a philosopher. I do not think that many employers would have provided such a scholarship to fund my education. Perhaps my education cost less. To the noble Lord's list, I would add a waste-paper basket, as well as a rubber.
Alumni donations will grow and are growing. They will come into their own in due course, but we cannot change a culture overnight. Universities should be given every encouragement, and I welcome the changes in charitable taxation laws that went through last year. Perhaps there will be more such changes.
It is said in some dark corners, often to journalists, by "sources close to Ministers" that there is, perhaps, a reluctance in the Treasury to allow universities to move towards top-up fees because they do not have the management skills to deal with them properly. Goodness knows, we might even pay our staff. That is another unreal comment. Perhaps, the record shows otherwise. We have doubled the throughput and halved the unit cost. Any company would be proud of that, and, if it could be done in the National Health Service, the Treasury would be whooping and reeling off to the bank. Will the Minister ask the Treasury to deny those rumours, if they are untrue? If they are true, it might be willing to say where the inadequacies lie, so that we can debate them publicly.
8.13 p.m.
The Lord Bishop of Portsmouth: My Lords, the House is indebted to the noble Lord, Lord Baker, for yet again providing the opportunity to debate the issue of the proper funding of our universities. It has been a pleasure to be part of this extended seminar of noble Lords who are running, or have run. universities. I have never heard quite so many implicit declarations of interest. I tease your Lordships. For my part, I am a university governor in Portsmouth and a former chaplain and lecturer at Manchester University.
Many points have been made in the debate with which I agree wholeheartedly—not least with the noble Baroness, Lady Warwick, especially when she gently pointed out that there are, in fact, more than two universities in the country. I have no axe to grind there. If I examine a higher degree in Oxford, I have to dress up, or they dress up, and I have to go to Oxford. If it takes place in Cambridge, they have the sense to let me examine in London. There we are!
Universities are diverse. That is an important point. I want to register a slight caution. I believe that the expression "centres of excellence" is a necessary nuisance—we need to use it. But it can be used rather too much in a rather exclusive way. I am pleased that the noble Lords, Lord Wallace and Lord Moser, drew attention to the multi-tiered system that we should have.
However, it seems to me that we cannot escape the fact that the huge increase in access to further as well as higher education has not been matched uniformly by
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funding to support that growth. The funding needs of the institutions are broad-based and well researched. They include: renovation of teaching and research infrastructure; supporting wider access to, and participation in, higher education; and the retention and rewarding of university staff. The price tag of all that stands at a staggering £9.94 billion, as the noble Lord, Lord Hannay, pointed out. One cannot see that that will be immediately forthcoming from the Chancellor's purse.
Those observations are well known. But surely the point needs to be made that the one thing that we cannot do is to retain the status quo. Here, I refer again to a point raised by the noble Baroness, Lady Warwick. Only this morning I attended the Audit and Quality Committee of Portsmouth University and saw some figures: income average in HEFCE terms and funding council grants is just over 39 per cent; tuition fees are just over 24 per cent; and expenditure and staff costs are an average of 58 per cent—slightly more.
It does not take a prophet to say that those figures cannot carry on in the indefinite future. The under-funding which has been evident for two decades has not left us in a position to mark time and live off other resources. The present situation cannot be placed firmly at this Government's door. The desire to broaden access to university education, which I wholly support. the need to strengthen teaching and research, and the necessity to retain the excellent staff in universities are, I am afraid, mutually exclusive aims unless additional funding is to be found or unless we decide and face the fact that we are trying to get too many people into university.
I strongly urge this House to consider the link with an earlier phase of education—that of those between the ages of 13 and 19. At present, many of them leave education without the benefits of two, three or four additional years at university. It is often their taxes which, in part, go to fund their peers who attend university. As is widely known, on the whole, they are less likely to go on to lucrative employment.
I draw noble Lords' attention to that situation because it seems to me that we need to keep in perspective and in proportion the relative nature of the tax burden and economic hardship. We may well he concerned with the financial burden laid upon graduates, but I believe that a degree of sensitivity is needed when comparing their lifestyle and prospects with those of their peers who left school or education at an earlier age.
From a broad perspective, it would seem that if the status quo is to change, then the Government will either need to increase general taxation accordingly or top-up fees will have to be introduced where the fees charged are currently an unrealistic reflection of the true cost of university education; otherwise, a graduate tax would have to be charged until the fees were repaid. I am very glad that the noble Baroness, Lady Carnegy, spoke about the Scottish system from which I benefited as an undergraduate.

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I believe that the championing by the noble Lord, Lord Baker, of top-up fees will perhaps be less persuasive than he would like. I want to set my face resolutely against that course because I cannot believe that it would not be both divisive and discriminatory against those with little or no economic support. Whatever schemes or clever plans we devise to spread resources, I believe that it is almost inevitable that those from lower socio-economic groups will be deterred from pursuing their desired course because of the need to find additional resources, because they are being landed with even greater student loans or even because of the sheer difficulty of gaining access to bursaries. I have yet to be convinced that the rhetoric of bursaries will benefit people from that area of society. We must find another means to address the situation, and I shall probably fall in behind those advocating a graduate tax as the most equitable means—with or without some kind of judicious means testing.
What, then, of the future? I return to the strategic question posed by the noble Lord, Lord Hannay: how do we get from where we are now to where we hope to be in "n" years' time? A bit less paperwork and, to use some naval jargon, less "long screwdrivering", would help, but that is true of many walks of life—especially surrounded, as we are, by a culture of mistrust. I hope that the Government will resist the temptation, however attractive, to impose random cuts accompanied by a retreat from innovation to the nursery slopes of the familiar.
Perhaps a theological ending is not inappropriate from this Bench. It concerns the doctrine of original sin which, secularly understood—and, perhaps rather experientially watered down—is about how to face up to when things go wrong and making the best sense of the situation. Much is good about university life today. I experience that regularly whenever I have to examine or meet students, in governing Portsmouth University, or whatever. Friends and contacts also say that. But there is also much that is clearly amiss. More important than what we do is why and how we do it. The difficulties that we face, which include international economics and national demography, are not the Government's fault. None the less, a fair, just and sustainable way forward must be found.
8.21 p.m.
Lord Brooke of Sutton Mandeville: My Lords, like other noble Lords, I declare an interest—in my case, as deputy chairman and chairman elect of the Council of the University of London, although I speak entirely for myself. It is also a coincidental pleasure to follow the right reverend Prelate the Bishop of Portsmouth, so that I can do public penance for deserting him on Third Reading of the Nationality, Immigration and Asylum Act 2002 on the educational segregation of children of asylum-seekers in accommodation.
The Lord Bishop of Portsmouth: My Lords, the noble Lord is absolved.
Lord Brooke of Sutton Mandeville: My Lords, I was going to say that I genuinely thought—it is better for
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me to establish some credit with those on the Government Front Bench—that by that stage we had pressured the Government into finally producing a persuasive case. I am also happy to be following at one remove a former, distinguished vice-chancellor of London University in the noble Lord, Lord Sutherland, who made an enchanting speech.
I strongly support the comprehensive enthusiasm of my noble friend Lord Baker for untrammelli rig the universities and restoring their freedom. People behave in the way in which they are treated. If we manage them in a way that suggests that we do not trust them, they are less likely to be trustworthy. But if we confer on them the ability to manage themselves, they are likely to react responsibly. The noble Lord, Lord Sutherland, made the same point. I agree with the noble Lord and my noble friend Lord Baker about overseas student fees, and thus, on a fortiori grounds, with the noble Lords, Lord Desai and Lord Wallace of Saltaire, about European Union student fees.
I was the British Minister at the first Commonwealth conference of education ministers after the policy announcement that full fees would be charged. That was essentially a rerun of Rorkes Drift but, being within the Commonwealth, was all extremely affable. My principal assailant was the Zimbabwean Minister. Outside the plenary sessions, we were inseparably good-humoured—I must say, other times other manners—but the scars and wounds of that event were well worth wearing and winning because of the return.
I suspect that where I part company with my noble friend Lord Baker is over the consecration and elevation of polytechnics—not least because, disastrously, it enabled the Treasury to cut the unit of resource for prior universities to the level of that of the new polytechnic universities on the ground that, if they were now universities, their unit of resource was appropriate across the whole system.
The phrase, "a two-tier system", used by the noble Baroness, Lady Warwick, is dangerous because it can be ambiguous and even derogatory, but the regional groupings, of which the noble Lord, Lord Smith of Clifton, spoke, I find both attractive and with the grain of the wood, not least because even our greatest universities cannot do everything at the highest level.
Lord Baker of Dorking: My Lords—
Lord Brooke of Sutton Mandeville: My Lords, I hope that my noble friend will not take up too much of my time.
Lord Baker of Dorking: My Lords, I thank my noble friend for giving way. I would like to preserve what remnants I have of my reputation as regards the polytechnics. I was the last Secretary of State to defend the binary line because I believed that there was a distinction between such universities. My successors, who happened to be Conservative, were not as strong willed.
Lord Brooke of Sutton Mandeville: My Lords, I am not in the least surprised by my noble friend's intervention.
I do not intend to rehearse all our present ills. They would gain nothing by repetition, and the debate is already a comprehensive quarry of them. But, as other noble Lords have said, the Government's 50 per cent target has probably made them worse. I wonder whether in the late 1980s and the early 1990s the Government considered the detailed HEFCE charts, the accelerated take-up then and where the accelerators came from, before they conceived their 50 per cent aspiration. Those charts were eloquent about the difficulties of the next stage of the advance. If the Government did look at them, how did they envisage that their target would be realised? If they did not, do they appreciate that they have probably made a bad higher education position even worse? In that regard, I share the views of my noble friend Lord Alexander.
Everything else that could be said has been said. I conclude as I began, with another declaration of interest, both personal and hereditary. Several noble Lords have spoken of the Robbins report and of what the universities were like in those days. Ironically, in terms of government, they were then run by the Treasury. My late noble kinsman, who, for extraneous reasons, had a decade earlier declined his first ministerial position from Churchill as the one junior Minister in the old Ministry of Education, was in 1961 the first Chief Secretary to the Treasury and in that capacity took and announced the decisions on student finance recommended by the Anderson Committee. The second Permanent Secretary to the Treasury then responsible for public expenditure was the present Secretary of State's father.
The debate in your Lordship's House on those developments was, I think, the one in which the noble Lord, Lord Longford, who had been a contemporary colleague of my late noble kinsman in the Conservative Research Department, said of my late noble kinsman that he had the disadvantage of having almost too much moral fibre.
Unlike my late noble kinsman, I accepted as my first departmental posting a junior office under the late, great Sir Keith Joseph—later Lord Joseph—at the DES, with responsibility for higher education. My opposite number at the AUT was the noble Baroness, Lady Warwick. As she knows, my respect for the AUT's research capability was diminished by it not digging out a speech that I had made in the other place in 1978 about the poor levels of academic salaries; and at least I have been consistent on that subject over the last quarter of a century.
I mention that role because the noble Lord, Lord Butler, with whose measured speech I broadly agree, said that the government of my party had not introduced tuition fees and the noble Lord, Lord Morgan, then effectively corrected him by reminding us that in 1984 Sir Keith had in fact tried but failed.
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It is worth briefly outlining the background, because history may have been different if we had then succeeded. A year earlier, I had recommended to Sir Keith that we eliminate half the minimum grant. which, regardless of their income, all students had in those days, which seemed to me unjustified at the higher levels of income. In the following year, I recommended to him that we eliminate the second half of the minimum grant and, further, that if that went as well as could reasonably be expected, we should return the following year to consider whether we could then put our toe into the Rubicon and test the reaction to a modest tuition charge that could later be raised. That would have avoided the problem to which the noble Baroness, Lady O'Neill, referred in her speech.
However, Sir Keith was also being persuaded by the late, also great, Sir David Phillips—later Lord Phillips of Ellesmere—that the research councils must receive a financial transfusion. However, Sir Keith, who certainly suffered from an excess of moral fibre, was determined not to go back to the Treasury but, instead, to find the money from within the department. The only solution that he could find was to eliminate the final minimum grant and consider the introduction of the first tuition fee in the same year, with no opportunity for rolling the wicket—Sir Keith was a fine cricketer—before the latter step. It was, I think, the shock to the parents of the simultaneous double move—the elimination of the remaining grant and the creation of the tuition fees—which provoked the seismic reaction to which the noble Lord, Lord Morgan, referred.
After Milton Shulman had exploded as a parent in his wayside pulpit in the Evening Standard, he also came on the line when I was doing a 'phone-in programme, although I cannot recall whether he was disguised as Milton of Chelsea or Milton of Fulham. We cannot tell now whether a slower approach would have been more successful, but in the long run, the scars and wounds from this were worth wearing, too. And, on the principle that it is an ill wind, the Treasury did give us the money for the research councils.
The number of the Economist to which my noble friend Lord Alexander referred also described Adam Smith finding that teachers who were paid by their students themselves taught better. I can illustrate the logic of that from my experience in the private sector where I gave charities a 90 per cent discount from our usual fees, but also spelt that discount out on the invoice. It made them more responsible clients, but they also owned what we did for them in a way they would not have done had our services been free.
If my noble friend Lord Baker had not intervened, I should have made one final comment, but I shall take it to my grave.
8.31 p.m.
Baroness Howe of Idlicote: My Lords, I shall have to follow the noble Lord to his grave to hear what it was. I join in the congratulations that have been heaped on the head of the noble Lord, Lord Baker, for this more than timely and extremely fascinating debate. My

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somewhat modest qualifications for joining so many experts is also that for which I should declare an interest. I am the current vice-chairman of the Open University and a governor of the LSE.
Perhaps I have one other qualification. Although visibly among the older age cohort of your Lordships' House. I suspect I took my undergraduate degree somewhat later than most as a mature—indeed, some might think positively overripe—graduate of the LSE's class of 1985. So perhaps I am a little nearer to the consumer coalface in that respect.
I turn directly to the key subjects of the debate: the huge and growing gap between our objectives and the resources, or lack of them, that we are prepared to find for them. The Government's repeated delays in producing their plans all underline not one but two crucial points: first, the scale of the funding deficit; and, secondly, the difficulty of the decisions we must all take.
As others have mentioned, it is important to realise how long the problem has been building up. The noble Lord, Lord Moser, mentioned the Robbins report, which he helped write. I wish that I had been involved at that time. However, the Government's response to that report—the White Paper of November 1963—was equally interesting and I shall cite three passages from it. First, the Government's acceptance that,
"courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so".
Secondly, the Government acceptance of the commission's 10-year programme of additional expenditure of £3.5 billion, which would more than double the cost of higher education in 10 years. Finally, and most importantly,
"Plans are being put in hand and resources will be provided accordingly".
That is the pledge that has been more and more seriously disregarded. It underlines the point that others have made that it is not just this Government who can be blamed for the critical situation that we are in.
However, the huge funding deficit is only one aspect of the problem. Above all, perhaps, universities seem increasingly in danger of losing their independence if this goes on. Many would say that they have begun to lose it already. That, too, was foreseen even before the Robbins report. Some noble Lords may recall the Anderson committee on student grants which reported in 1958. But perhaps not many will recall the warning contained in the Report of the Minority, who, incidentally, were against the abolition of parental contributions. They feared,
"real dangers to university independence",
of a kind which,
"would … lead to centralised bureaucratic control".
They feared a,
"public pressure on university authorities to provide a convincing explanation of the reason for rejection of every unsuccessful student".
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How right they were. For have we not recently observed the fulfilment of that prediction in the conflict between the president of Magdalen College Oxford and the Chancellor of the Exchequer himself, and, more recently, rather ominous rumblings about universities not meeting targets of entrants from deprived backgrounds? I must admit that when I read something like that I feel a profound unease.
I hope that I am second to none in being hugely enthusiastic about the attempts that the Government are making to include all those in society who have been left behind and whose talents we have not tapped before, but surely the time when we should be doing the most that we possibly can to bring those from deprived backgrounds into the system is very early on in a child's development—and certainly within the school system. We can and must do that far more effectively.
If we are to succeed we must clearly acquire enough money to eliminate the huge deficit and set the pattern for the future—enough to pay all the academic and other staff at universities what they deserve and their market value. We also need to provide a system of per student funding as similar as possible to that in the United States.
I do not believe that we have much choice between the various proposals under consideration. We need to adopt most of them in one form or another. Higher fees for some universities and for some courses, yes; and with them, it is to be hoped, freedom from price control; a variety of repayable loan systems; extended tax relief for charitable endowments—I rather like the idea of the noble Lord, Lord Baker, of 100 per cent relief for a short period—some contribution from local as well as central government; and certainly help from businesses with scholarships and, indeed, support and time off for employees who wish—or need—to work and take a degree at the same time.
Of course there will be difficulties with all this. There is a real risk of drop-out by students reluctant or unable to take on further debt. Alas, those most likely to fall into this category will be from less affluent and deprived backgrounds.
Perhaps I may suggest one very well established way of tackling the 50 per cent target, if that is what is wanted for that particular age group. Other noble Lords have queried whether or not that is a sensible target and I shall not enter into that argument. The Open University, that brilliant sixties concept of combining quality distance learning with the communications expertise of the BBC, is one shining example of an alternative method of doing so, a point referred to by the noble Baroness, Lady Carnegy.
We should remember the considerable role played by the Open University in opening up opportunities for a large "excluded" group—that is, women at home bringing up children. It is not only women who have benefited. Many who could not afford not to enter paid employment took advantage of this new opportunity to study on their own, to the country's as well as to their own advantage.

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Today, of course, on-line opportunities for gaining academic and other qualifications are expanding very rapidly indeed. I shall not go into the details because of time, but I have in mind schemes such as the pilot "e-skills4industry" which is underway in three Tower Hamlets schools. Some of the students targeted as potential drop-outs are continuing their A-level studies and the prospects, in one way or another, for the remaining 23 look promising. Although such schemes were originally geared to helping students in further, as opposed to higher, education, they will open up one further means whereby at a later stage students can join in.
There remains the question of how best to channel into the university system the equivalent of the present level of central government funding, or a more generous amount. I should like to see that done through some kind of voucher system: a basic state grant for everyone who qualifies for higher education, to be taken—I agree 100 per cent with the noble Lord, Lord Lucas—at any stage in their life, and payable direct to the institution of their choice. A voucher system could also be favourably adjusted for disadvantaged students, for courses where there was a shortage and for courses that cost more.
Coupled with an income-contingent loan scheme, or schemes, to cover all fees and maintenance, this, it is to be hoped, would also permit the abolition of the present centralising funding councils and help to restore independence, innovation and much greater freedom to university and student alike.
Such an approach would surely be more sensitive and less authoritarian than a graduate tax. With luck, it would end the prospect of Ministers criticising universities for having made the "wrong" judgment about individual would-be students.
8.41 p.m.
Baroness Sharp of Guildford: My Lords, I join other speakers in thanking the noble Lord, Lord Baker, for initiating what has been an excellent debate. We have ranged over many topics but have returned constantly to the central theme; namely, the future financing of universities.
I declare an interest, having been an academic for much of my life. I am currently a visiting fellow at the Science Policy Research Unit at the University of Sussex. In that capacity, in the 1980s, I was a member of the executive committee of an organisation called Save British Science. We paid visits to Ministers—including, I believe, the noble Lord, Lord Baker—and were generally regarded as Jeremiahs, even by some academics, who felt that we did the universities a disservice by pointing out that science was fundamental to Britain's competitive future and that if we went on squeezing the science budget and paying miserable salaries to scientists, both as academic lecturers and as post-doctorates, we should go down a slippery slope and no longer be able to claim the high quality science that we had. Today, many of the
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arguments that we were using then are now being regularly bandied about. Indeed, they are part of the stuff of this debate.
I believe that the argument on the science budget was recognised by the Labour Government when they came to power. Thanks partly to the prompting of the Wellcome Foundation in 1998–99, we have seen a considerable amount put into the science budget, largely for infrastructure and capital and equipment spending.
The Minister will, I suspect, quote the large sums that have been spent—£1.4 billion here and £1.7 billion there. Most of that money has gone into the science budget for equipment and new buildings—which are very necessary to upgrade our science potential. But they have not gone into the regular teaching budget of universities. Today, the real argument is about the funding of teaching and the expansion of student numbers.
That argument is compounded by the objective to expand the universities to a 50 per cent participation rate of the 19 to 30 age range. Where this objective came from is not clear. It first emerged at the 1999 Labour Party conference when the Prime Minister needed a nice headline-grabbing "social inclusion thing" to announce. So it was announced—but in my view it was done without any proper thinking and certainly without any proper costing. The Labour Party has probably lived to rue the day it did so.
We Liberal Democrats have always supported the expansion of higher education. In the 1980s, when only 14 per cent of the relevant age group was participating, we argued that, given the competitive pressure upon the country, it was vital for us to expand the university population. But we have always said that it must be properly costed, properly funded and run in conjunction with further education; otherwise it would be absurd to expand higher education. We have probably a much more chronic shortage of skilled craftsmen at technician level than at graduate level. It is absurd that further education has been left out of the picture.
Many of us will have reminiscences of that era. I was amused to read George Walden's autobiography recently. I will quote what he said about the era of expansion at the end of the 1980s:
"Our policy seemed to be to replace a selective by a mass system—the opposite in many ways to what we were trying to do in the schools. And of course it was mass cultivation on the cheap. Ever more students herded into ever expanding institutions to graze, untutored, on ever thinner pastures".
That has been very much the case, has it not?
The consequence of doubling student numbers with remarkably little increase in real funding for teaching was that the unit of resource dropped from £8,000 to £7,400 by 1997. It has not been increased since then. The crisis in funding was recognised at the time of the last general election, but both major political parties chose to kick the issue into touch via the Dearing inquiry. The Labour Party was able to go into the election pledging no tuition fees and to square its

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conscience afterwards by arguing that fees were the only way that universities could get the resources they needed.
Far from implementing the Dearing report, the Government reneged on two commitments. First, Dearing recommended that maintenance grants be kept for students from low-income backgrounds because he feared that the loan regime would intimidate precisely those students. Instead, the Government went ahead and implemented an all-loan regime, which. rather than the £1,000 fee, has been the central issue of student discontent. I agree wholly with the noble Baroness, Lady O'Neill, that loans to cover residential costs are the big problem for many students from poor backgrounds, not fees, which most of them do not pay. As noble Lords may remember, it was after meeting students during the 2001 general election campaign that. Tony Blair declared that another way must be found.
Secondly, reneging on Dearing, far from giving universities the fee income for extra resources, the Treasury has neatly squeezed the HEFCE grant so that, de facto, the unit of resource remains static even though, if the student fee contribution was excluded, it continued to fall. The Government then had the gall to take credit for the fact that the total figure—fees plus the HEFCE grant—was no longer falling.
The current situation is that the unit of resource—around £4,800 per student—does not cover costs. Even for post-1992 universities the average cost per student is about £5,000. It is considerably higher in pre-1992 universities, especially those with medical schools. The entire university sector is now, by UUK figures, running at a deficit of around £50 million a year, as the noble Baroness, Lady Warwick, mentioned. It is being bailed out by overseas students. But is it right that some of our best universities restrict places to British students to keep themselves afloat? Is teaching also cross-subsidised by research in these institutions? Research income is an important constituent of income in our leading universities. It enables many universities to pay salaries that are well over the odds of the agreed pay scales for some members of staff.
A recent report suggested that overheads were not being properly covered. The Times Higher Education Supplement headline says it all: £2 billion is owed to the universities where research overheads are not being properly funded.
Exactly how much is the deficit? The noble Baroness, Lady Warwick, mentioned £10 billion. That figure has been bandied about. However, of that £10 billion £6.5 billion is capital expenditure. In these days of resource accounting, are we looking to capital expenditure as current expenditure? I hope not. The current expenditure requirement is £4.5 billion, spread over three years. We are looking at about £1.5 billion a year in recurrent costs. The key element in that, to which we shall come back time and again, is salaries. We need somewhere in the region of £1 billion a year extra to cover the extra salary costs. A number of people have mentioned the Bett report, which came
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after the Dearing report. Two factors came up in Bett. One was the institutionalised discrimination against women and ethnic minorities, which the universities have gone some way to answering but by no means the whole way. The second issue was the employment conditions of contract researchers. Fortunately, thanks to EU legislation, those shocking conditions have had to be reversed.
The conclusion is that we are looking for somewhere in the region of £1 billion to £1.5 billion a year in recurrent costs to keep the universities afloat. Much of today's discussion has been about how on earth one finds that. The DfES underspend last year was in the region of £1.7 billion. The Government's total capital underspend was £8.8 billion. There is a lot of money floating around in the system that might be harnessed to be put into the universities.
The Liberal Democrats were opposed to tuition fees and we continue to oppose flexible fees of any sort. We do so partly because we feel that it is unfair to charge the student up front. We know from experience that many parents did not pay what they were expected to pay. Our favoured solution is the Scottish solution—what might be called the Cubie solution—under which students are effectively asked to pay back something afterwards either as a lump sum or by adding the money to their loan. That is fairer in the sense that he who benefits should pay. The student benefits and should pay something back. I am uncertain how far we can go along that route in terms of keeping extra costs onto this endowment, but if one is looking at some increase in fees, the system has worked very well in Scotland and could be extended. We would like an experiment with that before we move in other directions.
To finish, I shall try to go a little beyond the narrow question of financing. It is necessary to look at these things more holistically. In many ways we live in very exciting times. We have witnessed an explosion in knowledge and in the knowledge-based economy. We know that in this highly competitive world we must live by our wits and by nourishing and nurturing them. We must also recognise that these advances are affecting the education system. The noble Baroness, Lady Howe, mentioned the Open University, the Internet and distance learning. We must recognise that these are coming together with campus-based learning. We must also recognise that many of our students who are supposedly full time are working 20 hours a week. Finally, we must recognise that 11 per cent of degrees come in the further education sector. We need a system that will bring those three things together. I very much go along with the ideas mooted by the noble Lord, Lord Baker, and the noble Baroness, Lady Howe, on an entitlement that the student carries forward. We should use the diversity of our system—the multi-university system that the noble Lord, Lord Moser, mentioned—to facilitate that. We should move towards the American system of horses for courses, with some colleges where you do a two-year degree, some where you do three years and some where you do more and the student can choose whether they wish to be full time or part time. That is

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a much more flexible system that would meet our needs for diversity and our need to look forward and provide a more flexible system for the future.
8.55 p.m.
Baroness Blatch: My Lords, I wish to associate myself with all noble Lords who have thanked my noble friend Lord Baker of Dorking for initiating this excellent debate. Not for the first time, my noble friend has brought the issue of higher education to our notice; and, not for the first time, his passion and enthusiastic support for higher education have shone through in a characteristically robust speech, for which we thank him most warmly.
We are certainly living in interesting times. One can hardly pick up a newspaper or listen to comment on television or radio programmes without noticing a reference to "higher education". Ministers, including spin-masters from the Prime Minister's Office, are hyperactive in feeding the media with lines and counter-lines on the future of higher education to the point where the only enlightenment for those of us who are interested in the outcome of the review is confusion. There is a lack of urgency, and there is very real sense of frustration.
In preparation for this debate, I went back to five specific debates on the subject that took place between June 2000 and May of this year. The Government cannot say that they have not been warned. Member after Member on all Benches in each of those debates, and again today, talked of the crisis in higher education. On each occasion came a complacent response from the Government claiming that funding for higher education had been increased and that, come what may, the target of 50 per cent would remain, irrespective of funding.
My noble friend Lady Carnegy of Lour reminded the House that the Scottish anomaly remains a live issue. I hope that the Minister will comment on the points raised. We welcome the points made by the noble Lord, Lord Sutherland, in what I believe to be a most marvellous speech; namely, that there is more to be heard about the Scottish experience.
Many noble Lords expressed their concern about the 50 per cent target, not just in relation to the cost but also in relation to other access issues—for example, social engineering through postcode only entry into university, which is very patronising. There is also concern about the quality and standards of university courses and, ultimately, the standard and quality of a university education; the detection of a seeming bias against students from private schools; the Government's increasing tendency to earmark moneys with their own priorities rather than those of the university—something which seriously intrudes upon the academic freedom of our universities; and the Government's use of excess pressure to shoehorn too many young people with questionable qualifications into university, especially those students who would
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benefit more from the choice of high quality, vocational education—preferably closer to home—through a further education college.
I agree with all those who have said, not just today but in each of our previous debates, that the Government should not have introduced the 50 percent target without thinking through the consequences. On 22nd October—over three years after the Government came to office—the then Secretary of State for Education and Skills, Miss Estelle Morris, said:
"Over the last ten to twenty years, the higher education system has seen a huge shift from being an elite to a mass system, but without anyone necessarily thinking strategically about what we want universities to be achieving. As we expand further we need to give this more thought".
Apart from this astonishing statement coming over three years into the first term of the Government, it is not true to say that the issue had not been thought about strategically during the previous 10 years.
As I have readily admitted on a number of occasions in our debates—in fact, as recently as 18th November in response to the gracious Speech—under the Conservative government the number of students rose from one-in-eight students entering university to one-in-three. During that expansion, it is true to say that the unit of funding was reduced. That is why the noble Lord, Lord Dearing, who we miss from our debates, was invited in 1996 to review higher education—a review that could have been the basis for a wider public debate and which, at that time, had all-party support. The review was published in 1997, and was available to the incoming government.
Higher education students have good reason to remember 1st May 1997. They believed the Prime Minister who had pledged that "tuition fees" would not be introduced. However, not only were tuition fees introduced within months of the Government coming to office, but all maintenance grants were abolished. That was the real rub for many of our students. It resulted in students from low-income families leaving university with greater debt than students from higher-income families—a point which was very well made by the noble Baroness, Lady O'Neill of Bengarve.
It is therefore not surprising that there is an air of scepticism about the forthcoming review. On 25th October 2001, answering a point made by my noble friend Lord Griffiths of Fforestfach in a debate on student finance, the noble Lord, Lord Davies of Oldham, replying for the Government, said:
"the noble Lord … may have identified the strategy about which the Government arc unconvinced. I refer to what is vulgarly called top-up fees, although the noble Lord used more delicate terms … The Government are not persuaded by that argument".—[Official Report, 25/10/01.]
I wonder whether the noble Lord has shared a free lunch with the Minister for Higher Education, Margaret Hodge, who appears to have a very different view. Indeed, in the Financial Times of 16th February 2000, Mr David Blunkett said:
"There will not be top-up fees while I am Secretary of State. But then I won't be Secretary of State forever".

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One argument used to support the introduction of top-up fees is that, over a lifetime, graduates earn about £400,000 more than a non-graduate. There are weaknesses in that argument. First, graduates spend at least three or four years, if not more, not earning when their non-graduate friends are in work. Secondly, many graduates working in, for example, acacleme, nursing, pathology, speech and occupational therapies and other services in the National Health Service do not earn very high salaries. Thirdly, many non-graduates earn substantially more than graduates, particularly in the media and—dare I say it—as Members of Parliament. Fourthly, as the numbers in higher education increase, and as the quality of some degrees leaves much to be desired, the number of graduates having to take jobs for which a degree is not essential is also increasing.
Like my noble friend Lord Baker, the noble Lord, Lord Patel, and others, I have very serious reservations about a graduate tax. Despite what Ministers have said time and again about higher education funding, the Government are not spending as much either in real terms or as a percentage of GDP as the previous Conservative government. That information is there for all to see in issue 6/02 of the National Statistics Bulletin, published in September 2002.
We all have to agree that there are undoubtedly problems in the funding of higher education. That was so when the Dearing report was published, and it remains the case almost six years later. Now, however, the problem is considerably more serious, and much of it is of the Government's own making. One example is the introduction of the 50 per cent target without considering the resource implications. That real policy gap has not been dealt with—to provide a wider range of high-quality vocational education at all levels which is closer to home, and especially to combat the problem of the 25 per cent of young people leaving school without adequate vocational or academic qualifications. Then, of course, there is the serious issue of higher education salaries which was addressed by the Betts report, of which the Government seem to have washed their hands.
There is much confusion at the heart of government on the issue of student finance, and the level of uncertainty is putting in doubt the futures of too many young people. It is particularly putting in doubt the future of our universities, which have to manage.
There are cogent arguments both for and against top-up fees and about by whom they should be paid. Many of those arguments were played out today. However, my plea is that a number of related issues must be settled first. The Government should abandon the 50 per cent target. In The Times of 3rd January 2001, Professor Zellick, of London University, said:
"The current pressures on universities to distort their recruitment and admissions processes are, in my view, grossly improper. It is an abuse of Government power".
In referring to the waste of money, he went on to say:
"You've got people of moderate ability doing questionable academic courses culminating in degrees, leaving university as they arrive, with inadequate literacy and numeracy".
I might add that they are also leaving in debt.
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Professor Alan Smithers agreed with Professor Zellick by saying:
"Professor Zellick has hit the nail on the head. Higher Education has been expanded as a superior form of youth training to keep down unemployment. There are a lot of courses which do not lead to a good understanding of the world or equip students for a job".
Government must stop patronising young people by social engineering; for example, allowing postcode entry into higher education.
Government must increase the quality and range of vocational education and training, especially close to home—as I said previously—to meet the real shortage in key skills. Government must cease offering financial incentives for universities to take pupils with poor A-levels but should encourage entry on merit by improving education in schools, especially in the inner cities. Government must stop passing moneys to higher education with strings attached; it only distorts priorities and interferes with academic freedom.
I have one final but crucial point. When the Government finally determine a funding system for higher education, income, if it is to come from top-up fees, must be truly additional and not simply benefit the Treasury by displacing government's contribution. I say that because the Government's record since the introduction of tuition fees, as the noble Baroness, Lady Sharp, has just said, is not good in this respect.
The aim for education is to provide what is appropriate for all abilities and aptitudes at further education and higher education levels and to free up the institutions and professionals to provide education without government interference.
My noble friend Lord Baker of Dorking can be well pleased with today's debate. Although many views have been expressed about a way forward, there has been no disagreement about the nature of the crisis and the sense of urgency that is required to see it resolved, upon which the economic and cultural well-being of our country depends. I thank my noble friend most warmly.
9.6 p.m.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, I, too, am grateful to the noble Lord, Lord Baker, for securing this debate. I agree entirely with the noble Baroness, Lady Blatch, that it could not be more timely. It has stimulated important and valuable contributions from all sides of your Lordships' House. It will be some time before I forget the corsets mentioned by the noble Lord, Lord Sutherland.
It is important to recognise the debate that is taking place outside your Lordships' House to which the noble Lord, Lord Baker, referred. It is important that we view today's debate in the context of that broader and wider debate. I wish to start by outlining the key principles behind the review that is currently taking place. None of us is in any doubt that the funding of

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higher education is an important, if not crucial, issue. It is one that presents the Government and all of us with significant challenges.
The principles behind the review are: to find means of helping institutions obtain more funding to remain internationally competitive and prevent a decline in higher education standards; and that that funding should come from some combination of those who benefit from higher education; that is, the state, students, their families and, as the noble Lord, Lord Watson, said, business and employers. I say to the noble Baroness, Lady O'Neill of Bengarve, to whom I pay tribute for the tremendous work that she does, that we should bear in mind that over half of students currently make no contribution to tuition fees.
At this stage it is right to say that nothing is ruled in and nothing is ruled out. I want to focus on what it is that I believe we are all agreed on. Good government is about more than taking steps to solve yesterday's problems. Our responsibility must be to anticipate the challenges that are to come. It is not enough to see that this sector survives. We have to look forward over the next decade and beyond and make sure that our universities and higher education colleges can flourish as strong, independent and autonomous institutions. We need them to ensure that not only our economy but also our society can continue to flourish. The noble Lord, Lord Hannay, talked of a bridge that we need to get our universities from where they are now to the 10-year strategy and vision.
It is because we start from that principle that we are working on a wide-ranging strategy for higher education that will be published in January. It is not easy. I do not believe that there is anyone in your Lordships' House who does not recognise that. If you want to reflect on a set of difficult issues, think about higher education. We cannot allow this sector to drift into complacency and mediocrity. Our international competitors are not doing that; nor can we. I confirm to my noble friend Lady Warwick and agree with the noble Lord, Lord Butler of Brockwell, that the review is for all universities. I say to the noble Lord, Lord Smith of Clifton, that it will recognise business schools.
I say to the noble Lord, Lord Norton, that we need an holistic approach to what we are trying to do. I was very pleased that the noble Lord, Lord Sutherland, raised the whole question of the role of the regions and the relationship between universities and the regions.
There were champions for each type of approach. With apologies to the noble Baroness, Lady O'Neill, we had, from the noble Lord, Lord Baker, the question of top-up fees; from my noble friend Lord Morgan we had a graduate tax; from the noble Lord, Lord Renfrew, we had direct taxation; from the noble Baroness, Lady Perry, we had differential fees; from my noble friend Lord Desai we had the jobseeker's allowance; from the noble Lord, Lord Wallace of Saltaire, we had the American state system versus the European system, which I know well because my nephew and niece are educated in the US; from the
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noble Lord, Lord Alexander, we had the Australian loan system; from the noble Baroness, Lady Howe, we had some form of voucher system; from the noble Baroness, Lady Sharp, we had the Scottish system; and—perhaps my favourite—from the noble Lord, Lord Hannay, we had the judicious combination.
Within your Lordships' House we have the full breadth of experience and knowledge; we recognise that there are many different approaches. Each has its pros and cons and each has its champions in your Lordships' House and well beyond. For that reason, last week my right honourable friend the Secretary of State published a set of issue papers, which are available on our website. They set out the challenges facing higher education today. I hope that those noble Lords who have seen them will recognise the questions and challenges that they raise. He did so in order to stimulate this wider debate, which is very important.
I say to the noble Lord, Lord Renfrew, that I personally applaud the Secretary of State's decision to wait until January; he felt the need to get on top of all of these issues. That has helped the debate in your Lordships' House and beyond.
The first of the challenges is that of enabling our universities to secure the funding they need to provide high-quality teaching and research and allow the best universities to continue to hold their own. The second challenge is to enable more able students from poorer backgrounds to go to university. That, as the noble Lord, Lord Butler, said, should be based on merit. The noble Lord, Lord Baker, talked about the role of parental payments within that system. As noble Lords will be aware, we have been looking at the question of what one is at 18; is one an adult or a dependant? The noble Baroness, Lady Sharp, has on many occasions raised the perception of debt; the issue has also been discussed by other noble Lords on the Liberal Democrat Benches in particular. Thirdly, there is the issue of the economic challenge in a globally competitive world. How do we ensure that our universities are able to cope?
No one doubts that the funding of higher education is the important issue that presents the challenges. The noble Baroness, Lady Blatch, said that the amount of funding for full-time equivalent students fell between 1989 and 1997. As the noble Lord, Lord Butler of Brockwell, said, we asked the beneficiaries of higher education—the students—to pay a contribution. We believe that we were able to secure the steady reversal of the decline in funding and that we have turned the corner. By 2003–04, publicly planned spending on higher education will have risen by 15.6 per cent after inflation, compared with the figures for 1997.
The noble Lord, Lord Hannay, directly asked: what is the backlog? We can point to a £4.7 billion teaching infrastructure backlog. If we add to that figure the research infrastructure backlog, we get closer to £7 billion. To those who asked about the £9.9 billion raised by Universities UK, the figure is based on its assumptions about where it is and where it wishes to be. I would not wish to argue with it about that. We start from a different premise. We have a good

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dialogue in relation to the figures. The noble Baroness, Lady Sharp, gave us some very important figures about the ongoing needs of universities. To use the vernacular, we are in the same ballpark, but we are considering how to develop the system so that we can continue to maintain the world-class universities that we currently have.
We have invested in research. I shall not quote the large figures that the noble Baroness, Lady Sharp, said I might. Noble Lords have pointed to our investment in science in particular. We have £500 million specifically in research to get rid of the backlog in relation to poor maintenance and refurbishment.
We believe it is important that we have invested in research and continue to do so. I shall, indeed, pass on the concerns raised by the noble Baroness, Lady Warwick, about Northern Ireland. Research funding in Northern Ireland is provided by the Department for Employment and Learning and the research element of that grant comes to £27.7 million this year.
I am pleased that the noble Baroness, Lady Perry, raised the question of the increase in funding for science research. I agree that business has an enormous role to play within that. That is a matter to which we should return. I recognise what was said by my noble friend Lord Desai on social research and the importance of looking in a broader context. I dug out what he said at the end of his speech on 11th December 1997. He stated:
"In 2002 we should have another hard look at how far we have improved the funding of higher education".—[Official Report, 11/12/97: col. 294.]
We have a prophet in our midst, for here we are doing so.
Some noble Lords raised the question of the letter from the Higher Education Funding Council and its delay. We are in constant contact with the council; we are in dialogue. We are delaying the letter, but the letter and strategy document are produced together because in a sense they are linked. However, we would not want in particular the noble Baroness, Lady Warwick and the noble Lord, Lord Baker, to feel that we are leaving them in the dark because that would not be appropriate.
The noble Baroness, Lady Blatch, spoke of the national statistics bulletin. Indeed, she is right in what she says. In GDP terms that is correct, but that is because GDP is so much better. The 2000 spending review meant that publicly planned spending on higher education rose by 18 per cent in real terms between 1997 and 2003.
Baroness Blatch: My Lords, I am grateful to the noble Baroness for giving way. I referred to funding per student. That has not gone up and is not likely to go up by 18 per cent in real terms.
Baroness Ashton of Upholland: My Lords, I shall happily come back to the noble Baroness with any further figures which we can debate.
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The funding gap has been raised. As the noble Lord, Lord Baker, said, that is important. We know that US universities find it easier to pay their academic staff attractive salaries. A professor at the top of an American university can expect to earn 150.000 dollars per year; up to twice the salary of his or her British counterpart. Despite the report by the Office for National Statistics which shows that more scientific professionals entered the UK in 2000 than left the country, a brain gain of 4,700, there is evidence to suggest—noble Lords will not be surprised at this—that that masks a brain drain at the top end. Universities, above everything, are the people they employ. If we want our universities to be first class and world class, they must be able to attract and keep the best minds.
We need to be prepared to look hard at the balance between the taxpayer and the graduate. If we do riot, our only choice will be to accept that the funding gap is too large for us to close. In the short term we might say we would not notice; there will not be a cliff edge. But in the long term, as noble Lords would rise as one to say, that would mean that our universities began a slow slide towards mediocrity. This Government are not prepared to accept a second-rate university sector; it is too important both for our economy and our society.
All that means that we cannot afford to close off radical options because we are afraid of what people might say when we examine them. Noble Lords will know from the press and from our debate tonight that the options we are considering are controversial. I make no apology for that.
I shall spend a moment or two on the issue raised in particular by the noble Lords, Lord Chorley, Lord Livsey and Lord Baker on pay, recruitment and retention. We recognise the achievement of higher education staff in upholding the high quality of teaching and research in our universities. We acknowledge that there is a real problem with recruitment and retention of staff. We believe we have made a start on helping higher education institutions to address those issues in the last spending review. However, we acknowledge that more needs to be done. We shall be looking to do so in the plans we announce for higher education in the new year. Those will include further resources for pay increases targeted on the recruitment and retention of staff in higher education where there is the greatest competition.
The Government have already announced that in this spending review further resources will be allocated to pay increases targeted on the recruitment and retention of staff in higher education where there is the greatest competition.
The noble Lord, Lord Watson, asked why do we not drop the target for access and expansion within universities. A number of noble Lords have queried that, and I shall make a few points on the issue. The forecast for employment over the coming decade predicts that there will be a need for more people with higher level skills. If we are to have the talented people to meet that need, we will need to offer the opportunity

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of higher education to people from all parts of society, whatever their background. At present 41.5 per cent of people enter higher education. But we are not succeeding in what we want to achieve. The gap between richer and poorer students in terms of access to higher education remains significant.
I accept what the noble Lord, Lord Wallace of Saltaire, and the noble Baroness, Lady Howe, said about the prior retainment of these young people and the issues for our school systems. Indeed, that is partly why the 14 to 19 strategy was so important. It is also why it is so important to get the Sure Start and the Early Years agenda fully working and integrated. It is also about working alongside the institutions in order to raise aspirations and to show young people from all backgrounds that higher education could be for them. I was pleased to hear the right reverend Prelate offer his support for widening access.
The Institute for Employment Research has forecast that 1.73 million new jobs requiring high-level skills between 1999 and 2010 are needed. That will represent 8 per cent of new jobs created over the period. At present 19 per cent of the UK's population is educated to degree level compared to 30 per cent in the US.
Perhaps I may humbly correct my noble friend Lord Morgan. Mr Kinnock actually said that he was the only person in a thousand generations that had gone to university.
Lord Morgan: My Lords, I was being polite to Mr Kinnock.
Baroness Ashton of Upholland: My Lords, the noble Baroness, Lady Sharp, hit on a very important point. She talked about diversity, as did the noble Lord, Lord Livsey, within higher education. That is not just about three-year degrees of the traditional kind, which perhaps many noble Lords remember and I certainly do, but also about foundation degrees. I was fortunate to go recently to Hemel Hempstead to launch the Early Years Foundation Degree. I saw a number of people. largely middle-aged women—I hope they will not mind my saying that—who were studying for that foundation degree. They talked about the fact that they had never considered higher education. I had a letter from them this morning, which said that I should shout about its success from the rooftops—I hope noble Lords will not mind if I do precisely that. But that applies also to HNDs and other courses.
The noble Baroness, Lady Howe, talked about Open University issues and so on. The challenge is about using different ideas and a diversity of approach. I absolutely accept the point made by the noble Baroness, Lady Carnegy, about the links between further and higher education. The noble Lord, Lord Watson, raised the question of languages. It is interesting that he focused on German, which I understand from the work that I have done this week is the language most sought after by business in this country. Inclusion has been the agenda of the noble Baroness, Lady Howe, for many years. I agree with her about the need to think of early years development.
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The noble Lord, Lord Norton of Louth. asked who benefits from higher education. Both students and society benefit. We know that the private rate of return is 17 per cent for students, which is higher than in any other OECD country. One study estimated that every pound spent on research and development is worth £1.80 to the economy. But I recognise that there are different rates of return for different students—higher for men than for women for some courses and so on.
I say to the noble Lord that we are thinking very carefully about those issues as part of the review. There is graduate premium: will more graduates mean a lower premium'? The reality is that the premium has held up, despite expansion. Therefore, at the moment we can say that most graduates will indeed bring benefits to the economy and will indeed benefit from them.
The noble Baroness, Lady Carnegy, the noble Earl, Lord Mar and Kellie, and the noble Lord, Lord Sutherland, raised the question of Scotland. I say specifically to the noble Baroness, Lady Carnegy, that we will of course consult colleagues in all the devolved administrations before publishing any strategy document. My officials are already holding informal discussions. Indeed, a senior official from the department was in Scotland last week. We will therefore ensure that we have those conversations. I take on board the points made by the noble Baroness.
I am with the noble Lord, Lord Baker, in spirit in thinking that we have to look at this matter in a slightly uncomfortable way—a point also made by the noble Lord, Lord Hannay. We believe that we have to look at the balance between the taxpayer, the graduate—the contributions that each make—and to recognise that we might be looking at a cultural shift, a shift that might be uncomfortable. But if they are the right things to do and they bring benefits to society and secure the future of higher education, then we must not let a little discomfort stand in our way. As every noble Lord will agree, we must plan for the long term, so we are taking stock.
Many of the points made in your Lordships' House will inform our thinking and will help us to develop a strategy. I am extremely grateful. However, as I said, the questions are difficult. We agree that students and institutions need certainty about their future more than anything, so it is right that we should work towards a firm government position in January. We hope that our strategy will be a clear blueprint for the future of the sector, so that we can make progress towards realising our shared ambition for a stronger, better funded higher education sector.
Lord Norton of Louth: My Lords, I am grateful to the Minister for answering a question that I did not ask. Will she answer the one that I did ask?
Baroness Ashton of Upholland: My Lords, I hope that the noble Lord will forgive me; I thought that I had answered his question. If not, I must answer it

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outside the Chamber. Perhaps he can ask it as a PQ or as a Starred Question. I will answer it properly then. I apologise.
The noble Lord, Lord Lucas, talked about fairness, quality and vitality. The right reverend Prelate the Bishop of Portsmouth spoke about a fair, just and sustainable system. I agree with both of those aims. I shall end with a quotation from a speech given by the noble Lord, Lord Baker of Dorking, to the University of Nottingham in November 2001. In his final words, he quoted someone else, and I agree with him. The noble Lord said:
"I would therefore urge those who want our universities to remain pre-eminent to follow Milton's advice: 'Strike high and adventure dangerously'".
I agree.
9.26 p.m.
Lord Baker of Dorking: My Lords, I thank the Minister for her generous and very good reply. It was an excellent reply to the debate. I thank all Members who have participated in what has been a debate of high excellence that could not be matched in the House of Commons.
I ask the Minister to take three short messages to Mr Clarke tomorrow. First, there is an overwhelming desire that the Government should abandon the 50 per cent target. It was expressed by the noble Lords, Lord Butler of Brockwell, Lord Watson of Richmond, Lord Desai, Lord Morgan, Lord Moser, Lord Alexander of Weedon, Lord Livsey of Talgarth, Lord Chorley, Lord Sutherland of Houndwood and Lord Brooke of Sutton Mandeville, and the noble Baroness, Lady Warnock. It is a difficult thing to abandon, but the way to do it is to announce a lower target for the two lowest socio-economic groups.
The second message is about graduate tax. Only the noble Lord, Lord Morgan, spoke for that. When he spoke, I realised how it could be killed. I was a Minister in a government who devised a very good system of local government taxation called the "community charge". Unfortunately, when it was announced, it was dubbed the "poll tax": it was dead in the water. The graduate tax is a poll tax on clever people. From now on, I shall call it the "graduate poll tax", to speed it on its way.
The third message is about public and private money. The public money people were the noble Lords. Lord Renfrew of Kaimsthorn, Lord Morgan, Lord Moser and Lord Davies of Coity. Mr Clarke will not provide the £2.5 billion extra that the noble Baroness, Lady Warnock, wants. I am afraid that it is
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not there. It will have to be private money—flexible fees with means tests, scholarships and bursaries, as suggested by the noble Lords, Lord Butler of Brockwell, Lord Wallace of Saltaire, Lord Sutherland of Houndwood, Lord Patel, Lord Alexander of Weedon and Lord Chorley, and by the noble Baronesses, Lady Warnock, Lady Perry of Southwark and Lady O'Neill of Bengarve. That is the message. I say to the right reverend Prelate the Bishop of Portsmouth that those fees will not deter people from lower pay backgrounds. We should consider America, where blue-collar participation is so much higher.
The Lord Bishop of Portsmouth: My Lords, with respect, I must tell the noble Lord that I have taught in America. Perhaps, we can have a conversation outside the Chamber.
Lord Baker of Dorking: My Lords, I look forward to that conversation with the right reverend Prelate.
Finally, I make a plea, but I must also blame myself as well. We interfered too much in the universities—mea culpa, mea culpa—but what we started the Government have perfected. Please let the universities run their own affairs. My old department cannot run the universities better than they can themselves. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Wild Mammals (Protection) (Amendment) Bill [H.L.]
9.28 p.m.
Lord Donoughue: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Bill be withdrawn.—(Lord Donoughue.)
On Question, Motion agreed to.

Wild Mammals (Protection) (Amendment) (No.2) Bill [H.L.]
Lord Donoughue: My Lords, I beg to introduce a Bill to amend the Wild Mammals (Protection) Act 1996. I beg to move that this Bill be now read a first time.
Moved, That the Bill he now read a first time.—(Lord Donoughue.)
On Question, Bill read a first time, and to be printed.
House adjourned at twenty-nine minutes past nine o'clock.

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