Sitting of 9 April 2003

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

    TRANSAS GROUP BILL (BY ORDER)
    Order for Second Reading read.
    To be read a Second time on Wednesday 30 April.

Oral Answers to Questions
  NORTHERN IRELAND
  The Secretary of State was asked—
  NORTHERN IRELAND

    Small Business
    Mr. Henry Bellingham: When he next expects to meet representatives of small firms to discuss administrative burdens on business. [107067]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson): I have met representatives of small business on several occasions recently to discuss various issues of mutual interest. I shall be happy to meet them again in the future, but I am sure that we all hope that it will be a local Minister for Enterprise, Trade and Investment who does that shortly.
    Mr. Bellingham: I am grateful for that reply. Small business is obviously vital to job and wealth creation in Northern Ireland, and what it needs at the moment is fewer burdens and less red tape. Does the Minister agree with CBI Northern Ireland and the Federation of Small Businesses in Northern Ireland, which are very concerned about the job-destroying agency workers directive? What will he do to try to stop the implementation of that directive?
    Mr. Pearson: On red tape, I will not apologise for the Government introducing the minimum wage, improving maternity leave and paternity leave, giving millions of employees the right, for the first time, to paid holidays, and tackling discrimination against the disabled. On the agency workers draft directive, the hon. Gentleman will be aware that we have concerns about it, which are shared by CBI Northern Ireland and
    252
    throughout Great Britain. We want to make sure that it does not propose disproportionate costs on business, and our negotiating strategy certainly reflects that.
    Mr. Peter Pike: Has my hon. Friend considered the use of the existing regulatory reform procedure for the removal of any genuinely unnecessary and unhelpful burdens?
    Mr. Pearson: I thank my hon. Friend for that question. The Northern Ireland better regulation strategy seeks to reduce burdens on business and, as part of that strategy, the regulatory impact assessment has been revised completely. A number of other measures have also been introduced that seek genuinely to reduce administrative burdens on business.
    David Burnside: Only yesterday, CBI Northern Ireland informed me that the Northern Ireland Office was considering a new administrative burden on business, under the single equality legislation, to increase compulsory work force monitoring. Will the Minister go further than merely talking to local business people in Northern Ireland, and set up a taskforce to report to him within six months, representing the CBI, the Institute of Directors, chambers of commerce and the small business sector, under the subject heading, "Reducing the burden on business of all sizes"? Let us reduce the burden rather than increase it.
    Mr. Pearson: My Department is in regular discussions with the Economic Development Forum on a range of issues that affect business. I would like to pay tribute to the former Administration for setting up effective partnership structures in Northern Ireland, which have ensured that there is already close dialogue between the CBI and Government. I am sure that that will continue in the future.

    Devolution
    Mr. Adrian Bailey: What recent discussions he has held with the Northern Ireland party leaders about the future of the devolved institutions. [107068]
    Mr. John Robertson: If he will make a statement on the restoration of devolution in Northern Ireland. [107070]
    Mr. Michael Connarty: What recent discussions he has had on the prospects for re-establishing the Northern Ireland Assembly. [107072]
    The Secretary of State for Northern Ireland (Mr. Paul Murphy): Before I answer, I know that the whole House will want to join me in paying tribute to the vital contribution made by soldiers from Northern Ireland and from the island of Ireland—notably in the Irish Guards and the Royal Irish Regiment—in Basra and southern Iraq. Our thoughts are with their families, and our sympathies and prayers are with the family of Lance Corporal Malone and those who have sacrificed their lives in Iraq.

    253
    We had intensive discussions with the parties last month in Hillsborough, and yesterday between President Bush, the Prime Minister and the Taoiseach. Those discussions have confirmed our belief that there is now a large measure of shared understanding among pro-agreement parties—[Interruption.]
    Mr. Speaker: Order. It is unfair to the Secretary of State that so many conversations are going on in the House. I know that hon. Members have other things on their minds, but those who wish to take part in Northern Ireland questions want to be heard, and they want to hear the Secretary of State.
    Mr. Murphy: Thank you, Mr. Speaker. Perhaps I should repeat my last sentence. We had intensive discussions with the parties last month in Hillsborough, and yesterday between President Bush, the Prime Minister and the Taoiseach. Those discussions have confirmed our belief that there is now a large measure of shared understanding among pro-agreement parties on the way forward in Northern Ireland.
    Mr. Bailey: I thank the Secretary of State for his reply. I agree that building trust between the parties is an essential ingredient in any way forward. Can he say what contribution the visit of President Bush has made to accelerate that process?
    Mr. Murphy: Yesterday's meeting at Hillsborough was extremely important, and reflects the United States Administration's commitment—previous Administrations were similarly committed—to ensuring that they encourage all the pro-agreement parties to come to an agreement. The President spent quite a lot of time talking to individual parties and their leaders in Northern Ireland, and takes a personal interest in these matters. The most important thing is that the President, the Prime Minister and the Taoiseach—the Heads of the Governments most involved in making peace in Northern Ireland were in Belfast during what is the most important week, I believe, since the Good Friday agreement was signed.
    John Robertson: Does my right hon. Friend agree that devolution has been a success in Northern Ireland, as a recent poll has shown, and that the majority of people are for devolution? Does he also agree that we need to restore trust and confidence between the political parties in Northern Ireland? What is he doing to ensure that the political parties are part of the process to restore the required institutions and to achieve lasting devolution in Northern Ireland?
    Mr. Murphy: I very much agree with my hon. Friend about the importance of devolution in Northern Ireland. Part of the Good Friday agreement was that people in Northern Ireland would be governed by people from Northern Ireland who, because they lived and worked there, had a huge interest in the decisions that they made. I believe that devolution will be restored in time, but what my hon. Friend said about trust and confidence are vital. None of this will work unless trust and confidence are built up between the political parties themselves. The only way in which we can achieve success in the process before us is for the parties
    254
    themselves to engage with each other and restore that trust. That is what this week is about, and I obviously hope that success is in front of us.
    Mr. Connarty: I warmly welcome the engagement of the United States Government in the problems of Northern Ireland, but does my right hon. Friend agree that without demilitarisation we can never have proper rule of law and a proper democracy in Northern Ireland? What progress has been made on the demilitarisation and the decommissioning that was promised by the IRA?
    Mr. Murphy: My hon. Friend is right that a vital part of the Good Friday agreement is that there will be what is termed "normalisation", so that Northern Ireland becomes just like Scotland, Wales or parts of England in terms of military presence, and that that is predicated on a stable, peaceful society. That is why decommissioning too is a vital part of the Good Friday agreement.
    Mr. David Trimble: The Secretary of State knows that the Prime Minister and the Taoiseach are planning to go to Northern Ireland tomorrow. Reference has been made to a joint declaration that, I understand, indicates the sort of things that the Government might do in the event of acts of completion from the Irish republican movement. Does the Secretary of State agree that, in that case, it would be extremely ill-advised of the Government to publish a joint declaration unless they were absolutely sure that the republican movement would deliver genuine acts of completion both on demilitarisation and disbandment that would be convincing for the public of Northern Ireland?
    Mr. Murphy: The right hon. Gentleman is absolutely right that none of this will work unless there is a commitment from the IRA and paramilitaries in general to ensure that we live in a peaceful and democratic Northern Ireland. He knows too that there must be a cessation of paramilitary activity—real, total and permanent—and that the picture would not be complete unless the Government's declarations and statements from the IRA indicated that there was no longer paramilitary activity. In both cases, we would have to go forward, because acts of completion apply right across the board.
    Lembit Öpik: First, within that anticipated joint declaration, will the Government address the sectarian voting system that operates in the Assembly and serves to reinforce divisions rather than to resolve them? Secondly, can the Secretary of State confirm what the Under-Secretary, the hon. Member for Basildon (Angela Smith), promised yesterday: while the Assembly is suspended, from now on we will get the chance to table amendments to statutory instruments rather than having to vote on each one on a take-it-or-leave-it basis?
    Mr. Murphy: On the last point, I shall obviously have to look into that. The question of secondary legislation clearly depends on the success of the discussions and negotiations, and the sooner devolution is restored in Northern Ireland and the Northern Ireland Assembly

    255
    takes its own decisions, the better. As for the first part of the hon. Gentleman's question, the way in which Members of the Assembly vote in the Assembly is a matter for a paragraph 8 review, which is due in the autumn.
    Mr. Quentin Davies: May I echo, on behalf of the Opposition, the right hon. Gentleman's words of tribute to the gallantry and brilliant professionalism of the Irish Guards and the Royal Irish Regiment? We are all extremely proud of them. May I also echo his words of condolence to the families of the fallen?
    Does the right hon. Gentleman accept that we warmly welcome yesterday's joint British-Irish-US statement on the peace process? On the understanding that the words really do mean that the Government will settle for nothing less than 100 per cent. completion of decommissioning and disbandment, we strongly endorse that declaration. Does he agree that, if decommissioning is to meet the criteria in the IRA's own undertaking of 6 May 2000 that IRA weapons should be put beyond use
    "in such a way as to … ensure maximum public confidence",
    a greater degree of transparency will be required in that process in future?
    Mr. Murphy: The hon. Gentleman is right to echo the point made by the right hon. Member for Upper Bann (Mr. Trimble) that no agreement is possible and no deal can be reached unless there are acts of completion right across the board, including the activities of the IRA. To that extent, the hon. Gentleman is absolutely right. May I also thank him for his tribute to the soldiers who have fought and died in Iraq?
    Mr. Davies: If, as the whole House hopes, an important statement is made on Thursday by the two Governments and by other parties to the process, will the right hon. Gentleman take the earliest opportunity—and I mean the earliest opportunity—to come before the House to make a statement? Parliament, as well as the media, has a right to hear an authoritative account of what has gone on, to ask questions and to consider the matter. If that statement were delayed beyond 24 hours at the very latest, it would be a real abuse of Parliament, which we are all hoping to avoid, because we sincerely want to do everything possible to support the Government in these important negotiations.
    Mr. Murphy: I agree with the hon. Gentleman that it is hugely important that the House is kept informed of developments in Northern Ireland, and that as soon as possible a statement would be made to the House with regard to the declaration and to other matters that we are discussing in that respect.

    Assets Recovery Agency
    Helen Jackson: What assessment he has made of the likely impact of the Assets Recovery Agency in Northern Ireland. [107069]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Desmond Browne): The Assets
    256
    Recovery Agency came into operation on 24 February, in both Belfast and London. The formidable powers of the agency to recover criminal assets will help to reduce crime and disrupt criminal enterprises. That will help to alleviate the impact of crime on communities in Northern Ireland as well as in the rest of the United Kingdom.
    Helen Jackson: I am grateful to my hon. Friend for his reply, but will the agency be able finally to expose many of those in Northern Ireland who use the term "paramilitary" as a cover for what they really are—vicious criminal activists?
    Mr. Browne: I thank my hon. Friend for her question. The selection of cases to be pursued by the agency is entirely a matter for its director, supported by the assistant director for Northern Ireland, who must act in accordance with their statutory duty to use their powers in a way that they consider will best reduce crime in Northern Ireland and throughout the United Kingdom. The reality is that, in Northern Ireland, a significant proportion of organised crime is related to paramilitary organisations. In fact, it is estimated that about half the organised crime networks are linked to paramilitarism. I would, of course, expect the agency's annual plan to take that into account.
    Lady Hermon: Can the Minister tell the House what discussions he has had with the Assets Recovery Agency on bringing its important activities within the remit of the new chief inspector of criminal justice, with which he is very familiar?
    Mr. Browne: I am grateful to the hon. Lady for her specific question. I have not as yet had the opportunity to have discussions with the assistant director for Northern Ireland, or the director, in relation to that matter, but I will be in touch with the hon. Lady when I do.
    Mr. Bill Tynan: My hon. Friend will be aware of the concern expressed by the Northern Ireland Affairs Committee as regards the manning of the Assets Recovery Agency, so I am delighted to hear that we are making progress on its activities. Will he continue to monitor the situation to ensure that the organisation is effective and look at the success of southern Ireland's assets recovery agency?
    Mr. Browne: My hon. Friend is right to point out that the success of the Criminal Assets Bureau in Dublin greatly assisted the development of the policy relating to the Assets Recovery Agency. I can reassure him, and the other members of the Select Committee, that they need have no concerns on resources. The agency is adequately funded, and the initial budget for the United Kingdom for this financial year is £13 million. Of course, that and other matters will be kept under review. There are about 90 staff, including the Belfast branch, and the number is likely to grow in respect of case load and success. The Assets Recovery Agency will play a full part in Northern

    257
    Ireland in the work of the organised crime taskforce, which has had significant success and is chaired by my hon. Friend the Minister of State.
    Mr. John Taylor: Does the Minister agree that, even if the peace process makes great strides forward this week, which we all hope, there will still be an enduring threat from organised crime? We want an end not only to terrorism, but to the racketeering that has been so hideously linked with it.
    Mr. Browne: Of course, I agree with the hon. Gentleman's assertion. If his question is about whether we will ensure that the Assets Recovery Agency and the organised crime taskforce target those very circumstances, he has my assurance.

    Public Services
    Mr. Bill O'Brien: What plans he has to allow local authorities in Northern Ireland more powers to provide services demanded by local communities; and if he will make a statement. [107071]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson): Last year, the Northern Ireland Executive initiated a review of public administration. That review is undertaking a comprehensive examination of the roles and responsibilities of all parts of the public sector in Northern Ireland, including local government. Decisions arising from the review will be a matter for the Northern Ireland Executive.
    Mr. O'Brien: Does my hon. Friend agree that, in the interests of the community and the people of Northern Ireland, good, efficient and democratic local government is essential to allow decision making, which impacts on the destiny of local people, to be nearer to the people? Will he ensure that any decision that is taken is in the best interests of those people so that we can have peace and loyalty in Northern Ireland?
    Mr. Pearson: I agree with my hon. Friend that good, efficient local administration is what we all want, whether it be in Northern Ireland or Great Britain. A lot of good work is already being done in local government in Northern Ireland and by the local strategy partnerships. Decisions on the review of public administration will inevitably be long term, and we hope that a restored Executive will be taking them in due course.
    Mr. Roy Beggs: I declare a registered interest. When is the review of public administration likely to be completed and will transfer of greater responsibility be delayed until that happens? When did the Minister or the Secretary of State last meet representatives of the Northern Ireland Local Government Association to discuss those issues?
    Mr. Pearson: The Under-Secretary, my hon. Friend the Member for Basildon (Angela Smith), regularly meets local government representatives. As the hon. Gentleman will be aware, the original timetable for the report on the review of public administration was for
    258
    December this year. Given suspension, it is unlikely to be achieved, but I hope that, with an early restoration of devolution, it will be possible to carry out the necessary public consultation that everybody wants so that decisions can be taken, probably in 2004.

    Paramilitary Activity
    Andrew Selous: How many (a) punishment beatings and (b) forced exclusions there have been in Northern Ireland in the year to 31 March 2003; and if he will make a statement. [107073]
    The Minister of State, Northern Ireland Office (Jane Kennedy): Between 1 April 2002 and 31 March this year—[Interruption.]
    Mr. Speaker: Order. The House is still far too noisy. Allow the Minister to be heard.
    Jane Kennedy: There have been 300 paramilitary-style attacks: 137 assaults and 163 shootings. There are no figures available that indicate the number of persons who may have been forced to leave Northern Ireland through paramilitary intimidation. We call on those with influence over paramilitary groups to call a complete end to those barbaric attacks and acts of intimidation.
    Andrew Selous: Does the Minister agree that true peace in Northern Ireland will be established not just by the absence of bombs and bullets on the streets of Northern Ireland but by the complete ending of exclusions and punishment beatings by the paramilitaries, which so scar the communities affected?
    Jane Kennedy: Yes, I do. I utterly deplore and condemn those vicious attacks, in many cases upon teenagers who, as a result, are often maimed for life. There is no place for such activity in a modern democratic society.
    Rev. Martin Smyth: Does the Minister agree that our thanks should be given to those in England, Scotland and Wales who have helped bona fide exiles? At the same time, is it beyond the capacity of the Government to perceive the difference between those who have an influence but do not use it and those who have encouraged people to come back to Northern Ireland and then ordered their murder? Surely we can no longer trust such people, even in negotiations.
    Jane Kennedy: I agree with a lot of what the hon. Gentleman says. There is clearly no place for such paramilitary activity, the brutality and cruelty of it, and it should cease completely. We look to those with influence to ensure that that happens.
    Mr. Harry Barnes: Will my hon. Friend challenge the myth that is perpetuated by paramilitary groups that exiles have invariably been involved in antisocial activity such as drug-running, whereas, in fact, many have been those paramilitaries'

    259
    opponents, a number have been informers who have saved people's lives and others have just run into trouble on a personal basis with paramilitary groups?
    Jane Kennedy: I absolutely agree and endorse what my hon. Friend has said and pay tribute to him for the many occasions on which he has campaigned for the return of exiles and for an end to such activity.

    Republican Exiles
    Mr. Hugo Swire: What discussions he has had with Sinn Fein/IRA about the early return of exiles to Northern Ireland. [107074]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Desmond Browne): The Government have consistently made their position clear. The exiling of individuals is a despicable practice that we wholly condemn. It must end and those exiles must feel free to return in safety.
    Mr. Swire: Will the Minister say whether the issue of exiles from Northern Ireland was on the agenda of discussions between the President of the United States and the Prime Minister at Hillsborough over the past few days? If it was, can the Minister say what advice he is giving to those families who wish to return to Northern Ireland? What practical assistance can be offered to them about their security should they return? Can he confirm that the return of exiles to Northern Ireland must take place before any concessions are made to so-called on-the-run prisoners?
    Mr. Browne: I am unable to answer the detail of the first part of the hon. Gentleman's question at this stage. What I can say is that through the forces of law and order in Northern Ireland, the Government offer security to those who wish to return. As for the third part of his question, of course, it is clear that all aspects of the current discussions are interlinked and they can be considered only in the context of acts of completion. The practice of exiling must end and those who have been exiled must feel able to return to Northern Ireland.
    Mr. Jeffrey M. Donaldson: Echoing the comments by my hon. Friend the Member for East Devon (Mr. Swire), many people in Northern Ireland are appalled at the prospect of a deal for on-the-run terrorists, many of whom have committed serious atrocities. People see that as a serious injustice. Will the Minister assure us that priority will be given to the exiles, many of whom are innocent and have not been found guilty of any wrongdoing?
    Mr. Browne: I entirely agree with what the hon. Gentleman says about those in the unfortunate position of having been exiled. I have been working with, among others, the Maranatha community in trying to establish support for such people and to develop a suitable policy.
    As for the hon. Gentleman's main point, he knows that the British and Irish Governments recognised at the Weston Park talks that the issue of terrorists on the run needed to be dealt with, and that steps should be taken for the purpose. As the Prime Minister made clear in his
    260
    speech in Belfast, the Government will only contemplate such steps, and difficult issues such as on-the-runs, in the context of acts of completion.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Mr. Michael Jack: If he will list his official engagements for Wednesday 9 April.
    The Prime Minister (Mr. Tony Blair): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.
    I am sure that the whole House would once again like to express its deep condolences to the families of the servicemen and others who have lost their lives during the last week of the conflict in Iraq. Again we salute their courage, and give our heartfelt gratitude for their sacrifice.
    Mr. Jack: May I associate myself with the Prime Minister's words about those who have fallen in battle in Iraq?
    May I ask the Prime Minister, however, whether he is aware of another battle—the battle to save Britain's pharmacies in the light of the Office of Fair Trading report? Will he assure me that his Government will not introduce any policies that would fundamentally threaten the future of Britain's pharmacy network, and the remarkable job that pharmacies do for people throughout Britain?
    The Prime Minister: Of course it is vitally important that we maintain the pharmacy network. It is also important, however, that we pay due attention to reports that are given to us about the virtues of competition. I am sure that we will strike the right balance between those two objectives.
    Mr. Kevin Hughes: As the coalition forces move deeper into the Iraqi cities, they are uncovering, being guided towards and being shown torture chambers, rape rooms and other horrifying evidence of the brutalities committed by Saddam and his henchmen—a sickening picture of the killing inflicted on innocent people. Will my right hon. Friend ensure that this evil is eradicated from Iraq by ordering the hunting down of these people-butchers?
    The Prime Minister: I think we would also want to express our deep regret at any loss of innocent civilian life during the conflict, It is, I am afraid, the unfortunate consequence of war, but my hon. Friend is absolutely right to draw attention to the plight of people in Iraq under Saddam—not just the torture chambers and the routine barbarity, but the literally thousands of people killed and brutalised every year by Saddam's regime. According to recent estimates from some of the non-governmental organisations, some 1 million children are suffering from malnutrition as a result of the way in

    261
    which the country is run. I hope that when we assess the humanitarian picture, for all the difficulties that naturally exist there at the moment, people will understand that for the vast majority of people in Iraq the absolute humanitarian priority was to be rid of the regime of Saddam Hussein.
    Mr. Iain Duncan Smith: In the last three weeks, British and American troops have defeated Iraqi forces and taken Basra, and it now seems that the regime is fast losing its grip on Baghdad. Even as we speak, Iraqi people are celebrating in the streets. This has been one of the most brilliantly executed campaigns of recent history. May I join the Prime Minister in paying heartfelt tribute to the professionalism and bravery of British troops in Iraq, and in remembering those who have given their lives for this country?
    I congratulate the Prime Minister on the role that he has played, standing together with our American allies, in liberating the Iraqi people and ousting this evil dictator. He will recall, however, that at the end of the last Gulf war Iraqi generals signed a document of surrender on behalf of the Iraqi regime. The current regime is in complete collapse, it appears, and we all want to prevent further unnecessary loss of life. Given that, from whom do the Prime Minister believe—or from whom do his advisers believe—the coalition can now accept an unconditional surrender?
    The Prime Minister: First of all, in respect of our troops and what they have done in the past few weeks, I wish to record once again our pride in their enormous courage, professionalism and skill, and to pay tribute, in fact, to the coalition troops as a whole, because the American troops, in that remarkable advance on Baghdad, also showed their professionalism and skill. Indeed, I pay tribute—because it is not always possible to do this—to the Australian and other special forces, and to other support staff, who have played their part, too.
    In relation to who we would take a surrender from, it is extremely difficult, as we speak, to know what is left of the governing higher ranks of Saddam's regime. I think that the best way of answering that would be that we must be clear that whoever we accept a final declaration from to the effect that, so far as Saddam's regime is concerned, the war is over, whoever it is has that proper authority. I cannot at the moment make a judgment as to who that may be, but one thing that we must—
    David Winnick: Galloway! [Laughter.]
    The Prime Minister: I will resist all temptation at this point. So we will have to wait and see.
    Mr. Duncan Smith: On Monday, certain reports indicated that the Defence Secretary appeared to make light of some of the looting in Basra. However, this morning, as looting spread to Baghdad, the aid agency said that it would not deliver aid to Basra until security was ensured. I also understand that there are now reports that members of the regime are using the disorder to cover themselves while they remove evidence
    262
    from government buildings. Will the Prime Minister confirm that British troops are now policing the streets in Basra and arresting looters? Given that British commanders have recently said that their forces are thinly stretched, does he believe that policing in Iraq will require reinforcements either from the UK, or perhaps from some other countries?
    The Prime Minister: The answer to the latter point is that it may do; again, we just cannot be sure at the moment. However, in respect of Basra, our armed forces are doing their very best in what is a difficult situation. I think that there is bound to be a certain amount of disorder, and probably a certain amount of lawlessness, in the aftermath of the collapse of Saddam's regime in places such as Basra. But the troops are doing their level best to restore order. There is an inhibition on them, however. This is what I think would be called in military jargon a semi-permissive environment: in other words, it is not yet fully secure for our troops.
    Obviously, our military commanders want to make sure that, in employing whatever troops they employ, as it were almost on policing duties, they do not put their lives at risk. Subject to that, they do believe that the situation is more under control today than it was yesterday. They are also meeting local officials to try to make sure that, within the local community, order is restored. Just before I came to the House, I was briefed on the fact that some of the local leaders are now coming forward and offering their assistance in making sure that this policing happens. Indeed, some of those people who looted and took property yesterday are returning it.
    Mr. Duncan Smith: Returning to the weapons of mass destruction, there have been potential finds of illegal missiles, chemicals and suspect warheads. Does the Prime Minister agree with me that there should be an independent verification by UN weapons inspectors, and what steps are being taken to ensure that this should happen?
    The Prime Minister: We are in discussion with the United Nations about this. Plainly, it would be a good idea from every perspective to make sure that there is some sort of objective verification of any potential weapons of mass destruction that are seized. As we speak, there is obviously an investigation going on into certain of those weapons that were taken a few days ago, and tests are being carried out. However, it is important, I think, for the international community as a whole that, as we establish control—and, indeed, as people working on these programmes are free to come forward and speak to us—we make sure that a legitimacy is given to this, so that there can be some objective assessment of the truth of the situation. Certainly, so far as we are concerned—perhaps this allows me to say this once again—we have no doubt at all that these weapons of mass destruction exist. I say to people who sometimes say, "Why haven't you been finding them as you've gone through the country?" that the truth is that there has been a six-month campaign of concealment. It is not

    263
    surprising that we have not found them. We need the evidence of the experts and scientists, but we are convinced that we will get it.
    Mr. Duncan Smith: Over the past few weeks, the war of words between Syria and the United States has escalated. Does the Prime Minister share US concerns about Syria, and what does he believe that Syria must do now to ease those concerns?
    The Prime Minister: There are two issues, the most immediate of which is the suggestion that Syria was supplying arms or equipment to the Iraqi regime for the war. Syria has assured us that that is not the case, and I made it clear in a recent conversation with President Bashar that it would be unacceptable. Secondly, there is a longer-term issue, which is the need to make sure—especially if we are moving forward with a process of peace in the middle east—that all support by countries such as Syria for terrorist organisations and those who want to destroy any prospect of peace in the middle east ceases, and ceases entirely.
    Mr. Duncan Smith: The whole House would agree that the reconstruction of Iraq must be run by the Iraqis. However, there must be an interim authority, which is to be run by General Garner. Will the Prime Minister confirm whether that interim authority will have the specific endorsement of the United Nations?
    The Prime Minister: Two processes are involved. One is the office that will be run by General Garner and others, including British people, in the immediate post-conflict situation. Then, as soon as possible, the interim authority should be an Iraqi interim authority and we should develop that as soon as we can. That is why we are suggesting a series of ways to ensure that we find out who are the proper representatives from the different groupings in different parts of the country and bring them all together. In that process, the coalition forces will have a role and the United Nations should have a role. I see no reason why, if we approach the problem sensibly and given that Kofi Annan has now appointed a special adviser, we cannot do that in a collaborative way. If we do so, the interim authority is likely to have the legitimacy that it needs. It is important that it has that legitimacy and is seen to have it in the outside world. If, as we said yesterday, the United Nations has a vital role in that process, it will make the task all the more easy to do.
    Mr. Duncan Smith: I note the Prime Minister's remarks. He will be aware of President Chirac's unhelpful remarks yesterday saying almost exactly the opposite, which means, in a sense, that we may not be able to achieve such a resolution. However, the International Development Secretary has said that, without a UN resolution, coalition troops will represent "an occupying army" with no legal right to reconstruct Iraq. Does the Prime Minister share her view?
    The Prime Minister: In respect of President Chirac's remarks, it is important to look also at the remarks of the German Chancellor and of the spokesman of Kofi Annan, the UN Secretary-General, who gave a broad welcome to what was said yesterday. There will
    264
    obviously be many negotiations and discussions about the problem. In the end, it depends on whether people want to reach an agreement or not. If they want to reach an agreement, it is perfectly easy to do so. Yesterday, President Bush could not have been clearer in saying that the UN should have a vital role, not just in humanitarian aid, but in relation to the reconstruction of the country. I believe that we should wait and see how it develops. We are in constant discussion with the countries concerned. Indeed, I am due to speak to President Chirac later today, and, with good will, we will reach a way through.
    Mr. Kevin McNamara: One of the reasons for going into Iraq was to establish the rule of law. Can my right hon. Friend give an undertaking that none of the prisoners taken by Her Majesty's forces will be transferred out of their custody until their position has been properly established by independent tribunals, and that they will not be sent to Guantanamo Bay without there being a proper reason for it?
    The Prime Minister: I can certainly assure my hon. Friend that any of our prisoners of war will be treated fully in accordance with international law, which lays down strict rules in respect of that matter and we shall abide by them.
    Mr. Charles Kennedy: In paying tribute to the courage and professionalism of our armed forces, does the Prime Minister agree that we owe it to them—[Interruption.]
    Mr. Speaker: Order. Allow the right hon. Gentleman to be heard.
    Mr. Kennedy: Does the Prime Minister agree that we owe it to them as much to the innocent Iraqi civilians to win the peace, having successfully prosecuted the war? Does he agree that it will be vital that relationships with Russia and our European allies are properly re-established so that we can get into Iraq the funding that will be central to the reconstruction?
    The Prime Minister: It is obviously vital that we do all we can to make sure that Iraq gets the future that we have set out for it. I hope that Russia and other countries will co-operate with us in that regard. In the end, the critical thing will be to make sure that we deal with the immediate humanitarian situation and that the Iraqi interim authority is run by Iraqis who are genuinely representative of the whole country. We set out a process yesterday that allows us to get there and I hope that Russia and other countries co-operate with us in it.
    Mr. Kennedy: When the Prime Minister met the American President, was the President able to indicate whether the American Administration would accept the Israeli Government's interpretation of the middle east road map—that it is all subject to possible amendment at a future stage?
    The Prime Minister: The road map is not just a set of steps in a process, but a set of very clear undertakings that must be entered into by both sides. The road map

    265
    has been drawn up by the United States, the EU, Russia and the UN. I do not doubt that there will be all sorts of representations made about it. However, the fact is that the road map is there as a way through. Therefore, in its essential particulars, we must abide by it and make sure that it is implemented. That is why the right hon. Gentleman will have heard the United States President say, once again, that we are committed not just to publishing the road map, but to implementing it. Of course people will make representations—they are bound to—but implementing the road map means exactly what it says.
    Mr. George Foulkes: Does my right hon. Friend agree that the reconstruction of Iraq, particularly following the decades of neglect by Saddam Hussein, needs the involvement not just of the UN and all its agencies, but the World Bank, the IMF and the G8 countries? Should not our main concern be that once the media spotlight is off Iraq, we maintain our commitment to the restoration of prosperity and democracy?
    The Prime Minister: I agree entirely. However, I should point out that the conflict is not yet over, and there are still difficult things to do. As we speak, there is still intense resistance—not broad spread among the Iraqi people, but among those parts of Saddam's regime that want to cling to power. It is not over yet, but I agree with my right hon. Friend that it is essential that we make sure that we commit to the reconstruction of Iraq. It is fair to point out that Iraq—unlike Afghanistan, where we had to deal with a country with few immediate resources—is potentially a wealthy country. The tragedy of Iraq is that its wealth has not been used for the Iraqi people. When we read that Saddam Hussein's wealth appears to be $3 billion, while his people live in poverty—60 per cent. are dependent on food aid—we can see just how much there is to be done. However, with the natural wealth that there is in Iraq, that is work that can be done.
    Mr. Don Foster: Notwithstanding the tremendous success of our troops, sadly there have been large numbers of civilian casualties. Hospitals in Baghdad are crying out for urgent assistance. Can the Prime Minister assure the House that coalition forces will do all they possibly can to get that assistance there as soon as possible?
    The Prime Minister: Of course we will do that and, as we speak, teams are working alongside American troops in order to do so. I should point out two particular problems. One is that, as parts of Saddam's regime have moved out of areas, they have cut the power, harming our ability to provide humanitarian assistance and power, particularly to hospitals and other necessary areas. The second is that it cannot be pointed out too often that we make every effort to avoid civilian casualties, but there is a problem because of Saddam basing the headquarters of some of his special republican guard and local security services in the most densely populated residential areas. That makes it all the more difficult for us to act in a way that preserves as
    266
    much civilian life as we possibly can. That said, probably more care has been taken with targeting in this military conflict than any in recent times.
    Ms Oona King: Is the Prime Minister aware of the reported deaths of almost 1,000 civilians in one day last week? Those deaths were not televised; they took place in Africa, in the Democratic Republic of Congo, in a conflict that has claimed almost 4 million lives, making it the deadliest war since world war two. Will the Prime Minister use his influence to use the upcoming G8 meeting to increase the numbers of UN observers and peacekeepers? Will he ensure that just because those deaths were not televised, the victims will not be forgotten?
    The Prime Minister: My hon. Friend makes an entirely justified point. I assure her that we are working closely with the UN and other troop-contributing countries to ensure the deployment of what was supposed to be almost 9,000 UN peacekeepers. They were mandated by the UN last December and we are trying to insert them into the situation there. Once again, we exhort all parties to abide by UN Security Council resolution 1468, which condemns violations of human rights and international humanitarian law and calls on all parties to cease their hostilities immediately. I assure my hon. Friend that, even with public attention naturally focused on Iraq, we continue to be as active as we possibly can on this issue.
    Bob Spink: Is the Prime Minister pleased or saddened by reports that the tests for the UK joining the euro have not been met?
    The Prime Minister: I am afraid that the hon. Gentleman will have to wait until the assessment is made.
    Dr. Stephen Ladyman: My right hon. Friend will be aware that Thanet council, working closely with the Government, has worked wonders in regenerating the district, creating business parks and even a new university campus. However, we still have great difficulty in getting developers to prefer to work on brownfield sites and the renovation of existing houses over developing greenfield sites. Will my right hon. Friend ensure that we focus attention on making sure that arrangements are in place that will encourage people to develop our old Victorian towns?
    The Prime Minister: I entirely agree with my hon. Friend on the issue that he raises. It is extremely important that we make every effort to develop brownfield sites and to make sure also that we take back into use homes that have been empty for a long time. Without in any way previewing what my right hon. Friend the Chancellor of the Exchequer is going to say later, I hope that my hon. Friend stays around for the Budget statement.
    Sir Patrick Cormack: In considering precisely what role the UN will have in postwar Iraq, will the Prime Minister reflect on the record of the UK and the US in building durable democracies in

    267
    Germany and Japan? Does he not think that that record compares rather favourably with the UN's record in Somalia?
    The Prime Minister: The reality is that there are examples of the UN working well, and of its working less well. What is clear is that the UN does not want the sole responsibility in the matter, and in any event that is simply not practical. What is important, however, is that the UN is involved and, as we said yesterday, that it has a vital role. We will be the occupying forces. If we set up the Iraqi interim authority in the right way, working with the UN, we will get a representative body that can then take charge of its own country. The key thing is to make sure—perhaps through joint commissions, as happened in Afghanistan and elsewhere—that we get a broadly representative Government. As I said a moment or two ago, I believe that this is a situation where, if people want to find a proper solution, they can. The fact that Kofi Annan has appointed a special adviser is important, as it allows us to work with him. With good will, we will get this job done in the best way for the Iraqi people. This matter should not be a diplomatic wrangle: it should be about what is best for the Iraqi people for the future.
    Mr. Malcolm Savidge: In the USA, prominent proponents of war with Iraq are now demanding regime change in Iran and Syria. Does my right hon. Friend recognise the consternation that is caused by the conjunction of that with comments about those countries made by Rumsfeld, Rice and even Powell, and the aggressive strategic theories of the Bush Administration? Will the Prime Minister impress on our US allies that a precedent has not been set for further pre-emptive wars without international consensus, in the middle east or elsewhere?
    The Prime Minister: What is actually being said by the US Administration and ourselves is that any actions being taken by Syria and Iran at the moment should not interfere with the proper progress of the military conflict, nor with building Iraq properly for the future when the conflict is over. That is why we have said to both Syria and Iran that it is important that they do not provide military help to people who are engaged in action against coalition forces. I think that that is a perfectly reasonable position, and I respectfully say to my hon. Friend that I would not read any more into it than that.
    Mr. John Baron: Given the growing importance of humanitarian aid in the war against Iraq, and given the fact that we send nearly £1 billion to the EU overseas aid package—money that is largely spent by Brussels for political purposes, as evidenced by the fact that the top 10 recipients are all countries bordering the EU—will the Prime Minister now override his Secretary of State for International Development and divert that money to Iraq, which is where it is far more desperately needed?
    The Prime Minister: The debate over humanitarian aid in the EU is of long standing. In fact, my right hon.
    268
    Friend is one of many Secretaries of State in different parts of the European Union who have been asking for changes in that regard.
    I have to say two other things to the hon. Gentleman. First, the aid that we give to those surrounding European countries is still important, because they are countries that are undergoing a process of reconstruction. Secondly, I have no doubt at all that the European Union—we will be able to discuss this further next week—will want to give full humanitarian assistance to Iraq. The EU naturally has a role to play in that, and can play it very well.
    Ms Meg Munn: Given the vital importance of the small business sector to the well-being of our economy, and given that many small businesses tell me that their staff are their greatest asset, will the Prime Minister explain the benefits to the small business sector of the new rights for working people?
    The Prime Minister: That is an important issue. We have changed the rules to enable more small employers to claim back 100 per cent. of maternity, paternity and adoption payments, so we are improving the situation for them. We are also significantly increasing maternity pay and the length of time that people can take in unpaid leave, and taking measures on flexible working. That will give more and more people the opportunity to balance work and family life. It is also good for employers because, as my hon. Friend rightly says, staff are their main asset.
    Rev. Martin Smyth: The Prime Minister will be aware that a great deal of discussion is going on about a new police college in Northern Ireland. Does he share my concern that strand 1 of the agreement has been breached by the offer of the Republic of Ireland Government to fund some £30 million if it is built in Ebrington in Londonderry, which would support only one political party? On Budget day, would we be right in assuming that perhaps the 30 pieces of silver is now $30 million?
    The Prime Minister: If the hon. Gentleman will forgive me, I will not give him an answer off the top of my head: I will have to correspond with him about that.
    Linda Gilroy: Does the Prime Minister share the pleasure that pupils, teachers, governors and parents must feel on the publication of the international study yesterday showing that English primary school pupils are among the best readers in the world; and will he go on working with his right hon. Friend the Chancellor to ensure that the strong and stable economy, which underpins the investment that helps to achieve that success, continues?
    The Prime Minister: We certainly will continue that work. For England to be third behind Sweden and the Netherlands out of 35 countries, ahead of France, Germany, the United States and many other countries,

    269
    is a tremendous tribute to what has happened in our primary schools over the past few years. It has happened because of reform through the national literacy and numeracy strategy and investment that represents the largest-ever increase in education funding that this country has ever seen. That is why it is very important to continue that investment, not cut it by 20 per cent.
    Miss Anne McIntosh: Is the Prime Minister aware of the desperate state of farming in this country, which is borne out by the latest news that Brandons turkey factory went into receivership yesterday? Will he ensure that common
    270
    agricultural policy reform does not work entirely to the disadvantage of British farmers and to please French and German farmers?
    The Prime Minister: Of course we will. We also recognise that the farming industry has been undergoing a huge period of structural change, which it has been undertaking for several years. The best way to proceed is through the Curry commission, which we established some time ago. I am sorry for the hon. Lady's constituents whose jobs will be lost as a result of the changes that have been announced, but I assure her that we will continue to try to get the best deal we can out of the Agriculture Council.

Orders of the Day
  WAYS AND MEANS

    Budget Statement
    Mr. Deputy Speaker (Sir Alan Haselhurst): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that, at the end of the Chancellor's speech, copies of the Budget resolutions will be available to hon. Members in the Vote Office.
    12.30 pm
    The Chancellor of the Exchequer (Mr. Gordon Brown): It is half a century since a Budget has been presented with Britain engaged in large-scale military conflict. On 10 April 1951, the then Chancellor told the House of Commons that, heavy as the burdens may seem at times, they were small set against the cause, which is great, and the courage of our armed forces, which is even greater. And even as we look forward to the end of the conflict in Iraq, my first Budget decision is to ensure proper provision for our military, for our domestic security and for international development and reconstruction.
    I can confirm that I have set aside £3 billion in a special reserve available to the Ministry of Defence, so that our troops continue to be properly equipped and given the resources that they deserve and have a right to expect.
    I believe that the whole House will wish to join me in expressing our gratitude and support to our armed forces for the zeal, bravery and resilience with which they carry out their duties and for their outstanding achievements.
    And I believe that we owe a debt of gratitude to the strong leadership in a difficult time of our Prime Minister.
    At home, our responsibility is to safeguard our communities from terrorist threats and here our resolve again is absolute. It is therefore right also to set aside in this Budget an extra £330 million for additional domestic counter-terrorism measures. The Home Secretary will therefore take forward measures to improve detection work at our ports and enhance our response to a range of terrorist threats. The House of Commons will again be united in taking every step to preserve and protect the security of the people of this United Kingdom.
    Looking forward, there are three long-term challenges to which the international community must rise and which will require additional financial support: reconstruction in Iraq; a lasting middle east peace settlement; and, a new and urgent effort, going beyond debt relief, to combat the injustice and instability caused by world poverty.
    To contribute to the United Nations appeal and to carry out humanitarian work in Iraq, for which we owe special thanks to the Red Cross and international aid organisations, the Government will contribute £240 million, including, for the United Nations, $100 million. And to back up the UN and the work of reconstruction and development, I will today set aside an additional $100 million.
    272
    Just as it is right for Britain and America to lead action in Iraq, it is now right for Britain and America to lead action against the hopelessness of poverty in the poorest countries. This Saturday in Washington, at the G7 and then International Monetary Fund and World Bank meetings, Britain will—with all-party support for which I am grateful—table our plan for a $50 billion a year international finance facility to fund primary education for the 115 million children without it, and to fund health care and life-saving drugs to tackle AIDS, malaria and tuberculosis at prices that poor countries can afford.
    I believe that the whole House will also support our proposal to overhaul the European Union aid budget and redirect EU aid so that instead of 60 per cent bypassing the poorest countries, more European aid will be targeted at reducing world poverty by half by 2015. It is now time for the world's richest countries in word and in deed to fulfil their obligations to the world's poorest.
    I will report today that Britain—even in difficult world conditions—is able to meet our military and security costs abroad and at home, to meet the costs of building peace, and to do so while maintaining in full our record investment in schools, hospitals, transport and policing and providing new help in this Budget today also for British business, industry and commerce.
    And, Mr. Deputy Speaker, as the major economies look forward to the opportunity, if the right decisions are taken, for a global upturn, Britain starts from the foundation of low inflation: the lowest inflation for 30 years; the lowest interest rates for 40 years; the highest levels of employment in our history; and I can report today that Britain has now experienced the longest period of sustained economic growth and the longest period of growth in living standards in half a century.
    I can tell the House that—unlike America, Japan and Germany—the British economy has grown uninterrupted, free of recession, in every single quarter over the past six years.
    Having reformed the economy since 1997, the Budget marks the next stage; it is to achieve, in our time, a more flexible, more enterprising, full employment Britain: a Britain of economic strength and social justice.
    Because our economy will have to be better equipped for the global upturn, this Budget's detailed economic reforms will seek, for each region and nation, greater flexibility in capital markets, in product markets and thus prices for goods and services; greater flexibility in our housing and planning, in mortgages and in labour markets.
    Britain is closer than we have been for three decades to full employment and so today, with social security, housing benefit and employment reforms, I will announce, to encourage greater flexibility and fairness, this Budget will advance our goal of full employment in every region and nation of the United Kingdom.
    Because it is a Britain of economic strength and social justice we seek, we now plan—paid for by the national insurance tax rise—by 2008, 80,000 more nurses than 1997 and 25,000 more doctors, and this Budget will further reform and secure public services and the NHS we believe in: free at the point of need.
    And as the first Government for three decades with clear goals to reduce poverty among children and the elderly, the House will want to know that in this Budget

    273
    I will introduce a new guarantee with immediate effect for every new-born child in this country and a new guarantee with immediate effect for every pensioner in this country.
    Let me first give the detail of the economic outlook. I can report that inflation has averaged 2.3 per cent in the last year, is expected to be at 2¾ per cent. in the fourth quarter of this year and will be 2½ per cent. next year, for every one of the following years.
    Before Bank of England independence, the pre-1997 inflation target was 2½ per cent. or less but market expectations of UK inflation five, 10 and 20 years ahead were around 4½ per cent., almost double the target.
    Today in 2003 because of the success of the monetary regime we introduced in 1997—and I pay tribute to the retiring Governor of the Bank of England, Sir Edward George, and the Monetary Policy Committee—we have a symmetric inflation target of 2½ per cent. and on a five, 10 and 20 year perspective the markets expect inflation to be exactly that—2½per cent.
    And it is because since 1997 the monetary policy and the Bank of England have established credibility that, in a particularly uncertain period for the global economy, monetary policy has been able, supported by fiscal policy, to steer a course between deflation and inflation: cautious about domestic risks, including affordable pay settlements and the housing market; and vigilant to global risks in equities, in trade and in investment.
    And it is for these reasons that while under the old regime, 30-year British interest rates were higher than those of Germany and America—in 1997, nearly 8 per cent. compared with 7 per cent. in the USA and 6½ per cent. in Germany—our hard-won stability now means that these long-term British interest rates—at just 4.7 per cent.—are today below those of Germany, below those of the euro area and below those of America.
    So British monetary and fiscal policy has been able to respond to the world downturn and keep the British economy stable and growing. And it is that steady economic leadership, vigilant to risk, resolute in our commitment to stability, that is essential for a post-conflict world economy that while still fragile has the potential for renewed growth.
    I am required to set the inflation target in each Budget.
    In 1997, I spoke of the case over time for moving to a new domestic measure of inflation.
    The advantages of the current indicator of inflation—RPIX—is that it is known, well understood and has served us well.
    The advantages, however, of the internationally recognised index of consumer prices—HICP—is that it is in line with best international practice and is used by every other G7 nation but Japan, and by our neighbours in Europe.
    So there is a case in principle for adopting for Britain this index of consumer prices and the Treasury will continue to examine the detailed implications of such a change.
    Today, I am reaffirming our symmetrical inflation target based on the current RPIX measure. Our target for the financial year will be 2½ per cent.
    274
    I can now report that, since the last Budget, there are 253,000 more jobs in the UK. In the last quarter of 2002 alone, 150,000 new jobs were created. There are now 1.5 million more people in work than in 1997. Unemployment in Germany, France and Italy is around 9 per cent., in the euro area as a whole it is 9 per cent. In Britain, it is 5 per cent. British unemployment today is lower than in the euro area, Japan and America together for the first time for nearly 50 years.
    Over the same period that a total of 3 million jobs were lost in America, employment has risen in Britain by ½ million, and the number of unemployed claiming benefit has fallen below 1 million for the first time since 1974.
    So of all the major global economies Britain is now alone in combining inflation with the lowest unemployment for a generation.
    In recent months, the oil price has fluctuated between $23 and $33 per barrel.
    Among the continuing risks is, as everyone knows, the volatility of global equity markets, which have come down, though there have been sharp movements in recent days. Even in the world downturn of the early 1990s, world trade continued to grow at nearly 5 per cent. a year. But world trade grew by just 0.1 per cent. in 2001, and while it recovered to 4 per cent. growth in the first half of 2002, it slowed again to just 1.7 per cent. in the second half of the year. And so I understand the concerns and the difficulties of manufacturers and exporters, and all those trading across the world.
    That is why—in the interests of Britain, Europe and the poorest countries—the world trade talks, now stalled on agriculture, pharmaceuticals and services, should be moved forward with urgency.
    We now know that in 2001 and 2002 economic growth in Germany has averaged 0.4 per cent; in Japan 0.4 per cent; the euro area 1.1 per cent.; America, taking the two years together, just 1.4 per cent. And here in Britain, with growth in 2001 of 2.1 per cent. and then, in 2002, 1.8 per cent., we have averaged 2 per cent.—higher therefore than America; much higher than Japan; much higher than the euro area.
    Looking forward, the largest repercussions for the British economy arise from the further fall in growth prospects for the euro area to around 1 per cent. in 2003.
    German growth, expected at the time of the pre-Budget report to be 1.3 per cent. in 2003, is now expected to be just 0.4 per cent. Here in Britain, I now expect that growth this year will be 2 to 2½per cent.—double the euro area and Japan, and about the same level as America.
    So, just as the record shows that, in 2001 and 2002, Britain, with north America, outperformed the rest of the G7 industrialised countries and were the fastest growing economies, so, again, with all the risks, we are expected, with north America, to be the fastest growing G7 economies in 2003.
    In the previous two world downturns, in both the early 1980s and in the early 1990s, the British economy was in recession and output contracted for five whole quarters in a row—but this time in a world downturn, it has grown in every single quarter. Employment, which fell by 1.3 million in the early 80s and 1.6 million in the early 90s downturn, this time has not fallen but risen by

    275
    ½ million. Inflation, which rose to 20 per cent. in the 80s downturn and 10 per cent. in the early 90s, has this time averaged just 2.3 per cent. Interest rates, which peaked at 16 per cent. in the 80s downturn and at 15 per cent. in the 90s downturn, are today 3.75 per cent. And mortgage rates, which rose to 15 per cent. in both the early 80s and early 90s, are under 5 per cent today.
    So, unlike the early downturns of the 1980s and 1990s, when others were in charge and when Britain was first into the downturn and suffered most and longest, I can report to the House that this time, on growth, employment, inflation, interest rates—and also for debt and deficits, where I remind the House in 1993 borrowing peaked at 8 per cent. in today's money, £83 billion of borrowing in just one year—this time Britain, even amidst global uncertainty, is not only doing better than in the past but also doing better when we make the comparison with these other countries.
    Fixed investment, which has fallen, just as business investment has fallen round the world—and is in the euro area still falling—is expected to grow in Britain this year by 4¼ to 4¾4 per cent.—with business investment moving up from the second half—and then 4¾ to 5¼ per cent. next year.
    Manufacturing output, which has fallen in every major industrialised country in the last year, with difficulties for the whole sector, is expected to grow in Britain by ¼ per cent. to ¾ per cent. this year, and then 2¼ to ¾ per cent. next year.
    With the housing market and consumer spending now moderating, we expect domestic demand to grow by 3 to 3½ per cent. this year and in 2004.
    Risks remain and are real, but with inflation and interest rates low, with fiscal policy in Britain supporting monetary policy, and with the world—particularly America—poised to make what we believe will be a steady recovery over the course of this year and next, we expect British growth overall to rise in both 2004 and 2005 by 3 to 3½ per cent. as the economy returns to trend.
    Private consumption as a whole is expected to grow by ¾ to 3 per cent. this year and by 2½ to 2¾ per cent. next year; building on six years from 1997 in which the typical British household has each year seen an average 3½ per cent. real terms rise in their income.
    Throughout the post-war period, Britain has faced a productivity gap with our competitors and in particular now a substantial gap with the USA.
    The latest productivity figures from the independent Office for National Statistics, and now updated from the census of 2001, are published in full in today's Budget report.
    The most recent data show that the productivity gap per head with Germany has narrowed to just 4 per cent.; with France that gap is 16 per cent. but has fallen significantly, and the productivity gap with Japan has been eliminated with Britain now 7 per cent. higher.
    But despite the progress made, Britain and the rest of Europe still have a productivity gap—between 20 and 30 per cent.—with the US and so, with rates of corporation tax, small business tax and capital gains tax already among the lowest of the major economies, our Budget reforms will learn from American innovation,
    276
    competition and enterprise and that is why we will introduce new flexibilities in our economy; reforms that will be important for our future prospects in Europe.
    Two thirds of the productivity gap with America is due to the poorer quantity and quality of innovation. So it is a priority to raise research and development from today's 1.9 per cent. of GDP toward America's 2.8 per cent.
    Having launched the successful R and D tax credits last year, we are, following representations from the CBI and others, announcing improvements today in the credits' scope and value and that we will consult with business to improve the definition of qualifying research to ensure that it keeps pace with technological developments. Because two thirds of the R and D credit is paid to manufacturing, this is of special help to manufacturers in our regions.
    To back up our extra £1.25 billion investment in science itself—not least the £40 million over two years we are investing as a world leader in stem cell research—I have asked the Inland Revenue to report on further help for already tax exempt research and technology organisations so that Britain, with these changes, can lead the world in new discoveries, and then new industries and jobs.
    One third of overall productivity gains comes from new entrants to markets: start-up and then growing businesses whose dynamism transforms commerce, challenges existing businesses to do better, and when we have flexibility increases our competitiveness.
    For small firms that are looking for capital of between £250,000 and £1 million, there is evidence of an equity gap that prevents them from realising their full growth potential. Small business investment companies backed by Government incentives now make almost 60 per cent. of all venture capital investments in American small business—and they helped finance the early growth of now large companies such as Intel, Apple and FedEx.
    To match this success I am publishing proposals for the creation of British small business investment companies—and these will be private sector vehicles to inject new capital into small and medium-sized firms.
    Because of the importance I attach to creating the best environment for investment, even when under pressure to meet the costs of war and reconstruction, I will today back up the cut to 19p in small business tax by funding three tax reliefs and incentives that will help companies in industrial and in rural areas make the most of the opportunities of the upturn.
    By raising the qualifying threshold for small and medium-sized businesses to the maximum possible under EU law—that is £20 million—a total of 3.7 million businesses will be eligible for 40 per cent. investment allowances. A total of more than 3 million businesses will now also qualify for 100 per cent. allowances for investment in IT, which I am extending for a further year to April 2004.
    Sectors that include 400,000 firms will now be eligible to borrow from the reformed small firms loan guarantee scheme, including catering, retail and vehicle repairs.
    Each of our constituencies has thousands of small businesses, self-employed and sole traders—indeed, there is an average of 5,000 per constituency.

    277
    From tomorrow, firms with turnovers of £56,000 or less will not have to register for VAT—and that is the most generous VAT threshold in Europe. From tomorrow we will also abolish automatic fines for late payment of VAT for 200,000 more small businesses. In 2000, we released 150,000 companies with turnovers under £1 million from burdensome audit requirements and, subject to a consultative review this summer, we propose to release many thousands more.
    Ten years ago it took 28 regulations and certificates to form a business in Britain. Even today in mainland Europe it takes around four weeks and an average £600. Today, in a Britain more flexible, it takes just one week and only £20. And to cut costs further and enhance that flexibility, from tomorrow, 650,000 firms will no longer have to account for every VAT transaction and can now opt for automatic flat-rate VAT payments, cutting out unnecessary paperwork.
    Next month the Home Secretary will designate, for reform or abolition, 40 additional regulations and procedures, making a total of over 500 regulations and procedures—500 introduced by previous Governments—that are now identified for reform or abolition.
    Where we find local enforcement of regulations uneven and unpredictable, we will consider using our reserve power to introduce statutory codes of enforcement practice and we have invited the CBI, Institute of Directors and others to second their experts to join us to remove unnecessary regulations starting with construction, transport and environmental services.
    To meet concerns raised by business, I can announce that the Information Commissioner will produce revised and simplified guidance on the Data Protection Act 1998; the national statistician will review exempting more firms from statistical requirements; and new procedures will make it easier and simpler from this year for small firms to compete for Government contracts.
    Because flexibility at a UK level should be matched by flexibility in Europe, we are proposing that Europe's competition authorities proactively investigate barriers to competition, starting with financial services; and we have now agreed to submit to the EU jobs review our employment strategy that could help Europe's 15 million unemployed. Britain does lead in job creation, in tax credits that make work pay, and this week—learning from Europe—we have introduced new maternity rights and the first ever paternity pay; and in striking the balance between dynamism and social standards, our position is that no change to European regulations, like the working time directive, should risk British job creation.
    To break down the trade barriers between Europe and the USA, and to build a stronger transatlantic economic partnership, we will propose to the Commission and to the US Government liberalisation in services and the faster removal of tariffs between our countries.
    I have examined rates of corporation tax, small business corporation tax and capital gains tax, and I propose to freeze them. On air passenger duty, I propose
    278
    to freeze rates. On insurance premium tax, I propose to freeze rates. On the climate change levy, I propose to freeze rates.
    I propose, from Monday, the annual inflation rise of 1p on a pint of beer, 4p on a bottle of wine. I will freeze duties on cider and sparkling wine. Because past Governments set higher taxes on the alcohol content of spirits than on beer and wine, I will for the sixth Budget in a row, freeze all spirits duties—that is the longest freeze in duty for 50 years and it will benefit whisky producers in all parts of the United Kingdom.
    I turn now to bingo. I will abolish the bingo tax on 4 August, just as I have abolished direct taxes on the pools and on betting on horse racing. The tax on bingo players' stakes and the tax on bingo prizes will be replaced in the same way as the tax on betting and the pools. So I can tell the House it will be a gross tax on company profits for bingo at one and five—15 per cent.
    I have also to make a decision on fuel duties. Owing to the recent high and volatile level of oil prices as a result of military conflict in Iraq, I have decided to defer the 1.28p a litre annual revalorisation of fuel duties until six months from now—1 October—and I will legislate to this effect. And if the current international uncertainties and volatility remain, I will not proceed with the change at all.
    I will also freeze vehicle excise duty rates for lorries and for motor cycles and raise excise duty rates from 1 May on cars and vans only by the normal inflation rise of £5. But to encourage the development of the least polluting cars I will offer a new rate, £110 lower than the standard rate for a licence.
    Bioethanol fuel reduces air pollution and greenhouse gas emissions substantially. To encourage its development I can announce that when the industry is ready on 1 January 2005, we will reduce bioethanol duty by 20p per litre.
    Enhanced capital allowances designed to encourage energy-saving technologies are set out in detail by the Inland Revenue today.
    In January this year we abolished royalty payments from the North sea. I can now announce that from 1 January next year, and for all contracts completed from today, we will abolish petroleum revenue tax on new tariffing business in the North sea.
    My decision on cigarettes is, for public health reasons, to go ahead with a rise—the annual inflation rise of 8p per packet of 20.
    Last year I raised the exemption for inheritance tax to £250,000. I propose now to raise the exemption to £255,000. Ninety-five per cent. of estates will pay no tax.
    All income tax rates and tax allowances will remain as set out in last year's Budget and the pre-Budget report.
    The Inland Revenue's discussion document on residence and domicile is published today.
    I want to say something about the housing market. I can now report that since 1997 an additional 1.1 million British families have become homeowners for the first time—home ownership, benefiting from the lowest mortgage rates for 40 years, is rising in all parts of the UK to 70 per cent of all households. It is the highest level in our history, and it is higher now than in America and Europe.

    279
    But while most mortgages elsewhere are fixed rate, most UK mortgages—64 per cent. of new mortgages—are at short-term variable rates with most of the rest fixed for just one to five years. And with housing demand at historically high levels, housing supply has remained low. And this has contributed not just to, over 30 years, a greater growth in house prices, three times that of Europe, but to the volatility and inflexibility of the housing market—an issue on which we will publish a background study as part of the Treasury's five tests assessment on the euro.
    Most stop-go problems that Britain has suffered in the last 50 years have been led or influenced by the more highly cyclical and often more volatile nature of our housing market.
    Housing finance needs to become more certain and planning more flexible. I have asked David Miles, professor of finance at Imperial College, to examine the case for, and how, Britain can develop a market for long-term fixed-rate mortgages—something that is important to the UK in or out of the euro, and certainly more important in a single currency area.
    The Deputy Prime Minister and I are asking Kate Barker, formerly of the CBI, to examine and report on how we can reduce barriers to increased housing supply. Backing up his decision to double public investment in new homes and in the renovation of housing estates, the Deputy Prime Minister is announcing today that he will intervene where planning authorities fail to prepare proper plans or deliver an adequate supply of new housing; if necessary call in proposed major housing developments; and consider the case for binding local plans to increase certainty and ensure the stability of the housing market.
    I will freeze stamp duty on homes and business property purchases.
    As a result of tax avoidance, only half of all commercial property transactions—worth £10 billion a year—are paying the stamp duty owed.
    As I announced in the last Budget, the Finance Bill will introduce new tax avoidance powers to close these loopholes.
    In addition, because tax avoidance and distortions could take the form of leasing, the Finance Bill will make provision to restructure the stamp duty currently paid on the rental value of all new leases, at a proposed rate of 1 per cent.—four times lower than the usual stamp duty rate on which we consulted.
    To provide time for further consultation with business and commerce on how to promote a more level playing field between leases and transfers, I propose to trigger this reform only on 1 December. I will do so only if, after consultation with the industry, there is no effective alternative for tackling avoidance. If I have to trigger the change, I will increase the exemption from stamp duty for commercial property from £60,000 to £150,000, and exempt leases up to £150,000. Therefore, in any event, there will be no duty on 60 per cent. of commercial rental contracts.
    We are also reforming the tax treatment of home purchases funded by alternative mortgage products, including Islamic mortgages, where, in the past, home buyers have been charged stamp duty twice.
    280
    Anti-avoidance measures on VAT fraud, share-based remuneration, loan relationships and derivative contracts are set out in detail by the Inland Revenue today.
    I now turn to policies that will benefit specifically the economies of our regions and the nations of the United Kingdom.
    Past civil service relocation reviews have included the Fleming review, and, more recently, the Hardman review, which led to more than 10,000 civil service jobs transferred out of London. The Deputy Prime Minister and I propose now that we examine not only the civil service but non-departmental bodies and other public services with the aim of achieving best value for money.
    Successful relocation out of London by private sector companies suggests that public sector jobs transferred to regions and nations could exceed 20,000, to the benefit of the whole country.
    Today, therefore, we are asking Departments to submit updated work force development plans and asking Sir Michael Lyons of Birmingham university to advise with a view to decisions on relocation by the next spending review.
    The more each of the UK's regions, and Scotland, Wales and Northern Ireland, enter into global competition, the more we must encourage and help them harness their distinctive strengths, overcome economic weaknesses and, with a modern, locally led regional policy, rise to the challenge of making their skills, innovation and enterprise world-class.
    To meet the needs of manufacturers investing in our regions, who now receive two thirds of both the R and D tax credit and permanent capital allowances, regional venture capital funds are now investing £270 million in high-growth businesses.
    While business research and development in the south-east is £450 per head, it is just £50 per head in the north-east, and small business creation rates in the poorest areas are unacceptably low at one sixth of the most prosperous.
    The Secretary of State for Trade and Industry is therefore asking Sir Tom McKillop of AstraZeneca to advise on the extension of regional science and industry councils. We will devolve more responsibility for small business services and training to the regions. In partnership with the banks, we are offering a new online service to give small business advice on training. In addition, today, we are adding to the incentives for small business creation in the 2,000 places in the UK with the most deprivation, which we have designated enterprise areas: to speed up development, fast-track planning approval; to cut the cost of property purchases, stamp duty is abolished; to cut the cost of initial investment, access to the Phoenix fund with the prospect of enhanced capital allowances; to cut the cost of risk capital, community investment tax relief; and to encourage entrepreneurship, enterprise advisers for local schools.
    In the past, the more new business local authorities have encouraged, the more rateable income has flowed to the Treasury with no benefit to them. We will therefore legislate to ensure that from April 2005 local authorities and central Government share the receipts that result from new business creation to the benefit of local citizens.

    281
    The modern route—indeed, I believe, the only route—to full employment for all regions and nations is to combine flexibility with fairness.
    Six years of reform have moved Britain to a new system in which, instead of just signing on for benefit at a local social security office, the first requirement is signing up at a Jobcentre for active job search and help with training, and 2 million people have benefited from the new deal.
    Some parts of our country, however, still have twice the unemployment of others and, too often, national rules in employment policy do not encourage local initiative and innovation. It is therefore time to give local Jobcentres discretionary powers, so that, in ways that are targeted, distinctive and flexible, they can fill local vacancies, help the long-term unemployed respond to local employment and skill needs, in industries from tourism and the rural economy to IT and manufacturing, and develop their local plan for their area for full employment. In place of Whitehall-controlled ring-fencing, the Secretary of State for Work and Pensions is announcing local discretion to award grants for training, travel to interviews, and direct cash support to bridge the transition to work. There will be new powers to provide intensive job preparation courses and early entry into the new deal. In addition, drawing on a new ethnic minorities fund, Jobcentre staff will be able to tackle the particular barriers facing those who too often miss out on jobs. In return for local discretion, a new performance regime will accord higher rewards to top managers with provision to change the management of the worst performing.
    Too often, unemployed men and women say that when they lose housing benefit, working is not worth while. Therefore, the Secretary of State for Work and Pensions is also announcing today that, from next April, men and women taking up jobs will no longer be required to submit a new claim for housing benefit but simply inform local housing benefit offices, and until benefits are recalculated they will continue to be paid the out-of-work rate.
    In addition to requiring the long-term unemployed in 40 areas of the UK to take jobs on offer, we now propose: for those unemployed for 13 weeks, widening the area of job search to within one and a half hours of home and a new six-week period of weekly rather than fortnightly signing on; for all unemployed, an increase in the number of job applications and other requirements in return for benefit; and for the partners of benefit claimants, work-focused interviews and help to support the search for a job.
    Some of the hardest to help into work are young offenders, 70 per cent. of whom reoffend.
    The Home Secretary and the Minister for Work are therefore now considering how we can apply nationwide, under the leadership of Sir John Parker of Transco, the successful Reading training for work programme. We will offer young offenders training and work while in prison and, with good behaviour, a job when they are released: a programme with a 78 per cent. success rate so far. We will be tough on the causes of crime and tough on crime.
    282
    One million disabled men and women desperately want jobs. As a first step for men and women on incapacity benefit who wish to work, there will be an extra £19 a week as we raise the guaranteed minimum income to £194.
    Welfare to work is only the first stage, however. Just as in past years we have helped people move from unemployment to employment, the next challenge—the new agenda—is to help people move from low-skilled work to higher-skilled work.
    Because nobody wishes Britain to compete on the basis of low pay but on high skills, the right to education to 16 must be complemented by the right to lifelong learning: a classic case of social justice building economic strength.
    While it is in the national economic interest that every adult has the basic NVQ2 qualifications, 8 million adults in Britain today do not have them.
    The radical way forward that we propose is that, in return for employers giving staff time off for basic training, Government will contribute towards training and wage costs, and employees themselves can then move up the skills ladder.
    The Education Secretary is therefore doubling the already successful employer training pilots, naming a further six areas of Britain today at a total overall cost of £170 million.
    We will also review, for 16 to 17-year-olds, training, pay and employment needs, including the case for 16 and 17-year-olds having a minimum wage, and today the modern apprenticeship taskforce meets for the first time as apprenticeships, once withering away, are to rise to 320,000 by 2006.
    Moving beyond the old voluntarism of the past in this national effort for skills, everyone—government, employers, employees and trade unions has a responsibility and a part to play, and we will extend the trade union learning fund by £3 million extra in 2005.
    Expanding the skills that we need requires not only new investment and training but a modern approach to the economic and social benefits of legal immigration, so important to the past success of the US economy and now to ours.
    UK work permits have risen from 47,000 to 140,000, and so the Home Secretary will now expand the highly skilled migrant programme and introduce measures for younger applicants and partners; he will encourage foreign nationals graduating in maths, science and engineering in the UK to seek a career in the UK; and he will expand the work permit scheme for industries like construction which face skills shortages.
    While meeting the challenge of combating illegal immigration, we are supporting legal immigration which contributes to economic strength and social justice.
    There are 200,000 more lone parents in work than in 1997. Lone parent employment has risen to 54 per cent as we advance to our 2010 goal of 70 per cent of lone parents in work. Following the report submitted yesterday by BT chief executive Ben Verwaayen and published yesterday, employers—starting in London with BT and including, initially, Glasgow, Liverpool, Manchester, Leeds and Newcastle— will provide for lone parents work preparation courses, and offer flexible terms backed up by help with childcare.

    283
    And for lone parents who voluntarily attend regular work-focused interviews and undertake job search, we will offer an extra £20 a week to cover job search costs, rising to—and topping up wages for a year—£40 extra a week when they move into work.
    While the minimum wage today is £147 for a 35-hour week, tax credits raise the minimum family income for a lone parent with two children to £276 even after tax—almost twice as much as the minimum wage. And tax credits are the modern route to eradicating poverty by making work pay.
    For lone parents who want work, but want to work part-time, we will now do more with a new housing benefit disregard. For lone parents on a typical rent of £50 a week, part time work will pay £213 a week—more than £10 an hour—making them far better off working part time than not working at all. Last month, we showed our confidence in the future by announcing a rise in the minimum wage for this year and next. And with the new tax credit system in place, a couple, both earning, with two children, now have their tax bill cancelled out until their income, including child benefit, is just under £20,000 a year. The same couple with three children will have their tax bill effectively cut to zero until their total income including child benefit is £22,500. That same couple, with help for typical child care costs, will have their tax cancelled out until they earn just under £30,000.
    Our reforms in the tax system guarantee that work pays. And whichever part of the country you live in, and even if you change to a job which pays less, for low earners, for every £10 lost in pay, up to £7 is made up through the new system.
    With this national framework for fairness set in place, I can tell the House that the British economy is now better placed to recognise local and regional conditions in pay, such as the extra costs for retention and recruitment that arise in London and the south-east, especially for the low-paid. In future, therefore, we plan regional price indexes showing differences in regional inflation rates; remits for pay review bodies and for public sector workers, including the civil service, will include a stronger local and regional dimension; and with the new housing benefit pathfinder scheme offering a flat rate in the private rented sector based on location and household circumstances, it makes sense not only to roll out this pilot nation wide but to develop a similar flat rate housing benefit system in the social sector. In these ways, we will make housing benefit work more effectively, more sensitively and more fairly in each area of the country, removing the barriers to work.
    So the flexibility that I propose—in employment, in pay, in the liberalisation of capital, labour and product markets, flexibilities important for competitiveness in the global economy and our engagement in Europe—is not bought at the cost of fairness for families but is underwritten by policies for full employment, tackling poverty through tax credits, and more investment in public services.
    And these are measures that combine the flexibility, too often undervalued in Europe, that is essential for enterprise with the fairness, too often undervalued in the USA, that is essential for social cohesion: it makes Britain a leader for those who see enterprise and fairness advancing together.
    284
    It is because from 1997 we took decisions to freeze spending; to cut debt; to use the spectrum auction to repay even more debt; and it is because we have cut unemployment and debt interest payments that we have been able to raise public expenditure on health, education and our anti-poverty programmes. We have been able to meet the additional commitments on employment, industry and support for families that I am announcing today. And yet at every stage of the economic cycle and including in the cautious case we have been able to meet all our fiscal rules.
    Let me provide the detailed figures.
    Figures for our current Budget for last year, 2002–03, and for the five years to 2007–08 are minus 12 billion, minus 8 billion, minus 1 billion, plus 2 billion, plus 6 billion and plus 9 billion.
    So we meet our golden rule over the cycle. We will not only achieve a balance—[Interruption.] That is the golden rule over the cycle. We will not only achieve a balance but achieve an estimated surplus at £32 billion, showing that it is right and prudent to borrow at this, the right time in the economic cycle. And adjusted for the cycle we meet the golden rule this year and we meet it every year to 2006.
    Our second rule—the sustainable investment rule—is that debt should be kept below 40 per cent of national income. Debt this year is actually rising to 42 per cent in France, 46 per cent in the USA—[Interruption.] The wrong country, Mr. Deputy Speaker. It is rising to 49 per cent in Germany, 55 per cent in the euro area, 76 per cent in Japan, but I can tell the House that in Britain debt this year and in future years will be at 32.2, 32.7, 33.2, 33.5 and 33.8 per cent, comfortably meeting our sustainable investment rule, doing so over the cycle and in every year.
    We are within the Maastricht criteria on deficits and debt and, as planned, I will present the Government's statement on the assessment on the euro by the first week of June.
    The House will have before it all 18 of our background studies as well as our assessment of the five economic tests.
    It is because of the tough decisions that have led to the low debt that I have just described that I can, in the financial year which has just ended, make the full £3 billion allocation to the costs of military action in Iraq, contribute to humanitarian aid and improved national security at home, and with borrowing at £24 billions, 2.3 per cent of GDP, still have a debt ratio this year as low as 30.9 per cent, the lowest debt GDP ratio of all our major competitors. And we have not been, and will not be, diverted from increasing investment in our health and public services at a faster rate than in any post-war period.
    Indeed, compared with a deficit of 8 per cent. of GDP 10 years ago, and an average of 6 per cent over the early nineties, the figures for net borrowing for this year and future years are just 2.5, 2.1, 1.9, 1.7 and 1.6 per cent.
    Net borrowing for this year and future years is therefore £27 billion, £24 billion, £23 billion, £22 billion and £22 billion.
    Cyclically adjusted net borrowing, which is forecast this year at 2.5 per cent in America, higher at 2.6 per cent in France, 2.3 per cent in Germany, and 7 per cent in

    285
    Japan, is in Britain just 1.7 per cent last year and this year, and in future years 1.5, 1.5, 1.7, 1.7 and 1.6 per cent of GDP.
    With these figures showing that we meet both fiscal rules comfortably, I can therefore confirm to the House all the decisions of our spending review: by 2006 over £1 billion more a year for housing; £5 billion more a year for transport; £15 billion a year more for education; £40 billion more a year by 2008 for health; in total, by 2006, £61 billion more a year for public services. And at the same time, I can build in extra caution for future years by prudently setting aside new resources in the reserve margin for annually managed expenditure, showing that Britain can combine economic stability and rising employment with faster rising investment in hospitals and schools than in all other major countries—Britain showing that economic strength and social justice can advance together.
    As we now plan the coming spending review, I want to make announcements about the next steps forward that we propose to take. Both economic strength and social justice are advanced when parents can balance work and family life and are able to make real and effective choices. So we have asked the spending review to examine the future of child care and family-friendly policies, and I propose a dialogue with family and parent groups and voluntary associations. For the first time from this month, 5 million families with incomes below £58,000 a year will receive the new child tax credit, with most receiving £26.45 for the first child, rising to £54 a week for the poorest. This is the best and fairest support for our nation's children in our nation's history and, together with record investment in our schools, the best investment in our nation's future.
    We are on track to meet our 2004 target for a 25 per cent. reduction in child poverty. And for the next Budget and the next spending review, I have asked for a report on both the public service and welfare reforms we need to reach our goal of a 50 per cent. cut in child poverty by 2010, on the road to abolishing child poverty in a generation. In preparing the coming spending review, we also propose that work be taken forward with Britain's charitable, voluntary and community organisations, so that they can play a fuller part in renewing the social fabric of our local communities. The review will also encompass challenges too long neglected: helping children at risk, led by the Chief Secretary; and also tackling domestic violence, on which the Home Secretary will issue a consultation document shortly.
    The pre-Budget report announced our support in principle for the creation of a gap year volunteer corps, supporting financially low income school leavers who give a year of their time to community service. I can announce that, so strong is the interest from the voluntary sector, the Home Secretary is announcing that the first pilot for the new volunteer corps will start next month. To back up free entry to the main national museums and galleries which has raised admissions by 70 per cent., with 5 million more visitors, I now propose to review the incentives, reliefs and exemptions available to help national and regional museums and galleries to
    286
    make acquisitions of works of art and culture, which should not be lost to the nation but, instead, should be accessible to the people of Britain.
    The Secretary of State for Work and Pensions will report on the consultation on the pensions review and our proposed tax reforms shortly. The next spending review will also seek to maximise regional and local discretion in service delivery, matching national standards with local performance standards, reduced ring fencing, greater transparency, more timely performance data—overall greater freedoms and flexibilities for local authorities and other education, health, and social service providers.
    The modernisation of the welfare state is not just about improving income and services, but about ensuring that all have a stake in the wealth of the nation. A child trust fund, established for each child at birth, endowed during their childhood years and available at age 18—to which Britain as a nation contributes—expresses our shared belief that in our country every child should have the best possible start in life. So I can tell the House that for every child born from today, we will establish in their name a child trust fund. Seven hundred thousand children are born every year, and we will fund from this year and every year in future, for each new-born child, an initial endowment of at least £250—£500 for the poorest one third of children—a reform which is progressive and universal, benefiting every child and with more to those who need help most. And we will report shortly on the proposal that during primary and secondary school years, each child receive additional payments into their child trust fund. Parents and grandparents will also be able to contribute to the fund.
    The child trust fund symbolises the difference between those who believe in modernising the welfare state and those who wish it to wither away. At age 18, on the basis of historic rates of return, the child trust fund will accumulate assets that will enable all young people to have more of the choices that were once available only to some. This shows what we mean by putting power, wealth and opportunity in the hands of the many and not the few. So that every child in the same class at school will, in future, have a trust fund, I will align the payments to school years and backdate these initial endowments to September last year, so that every child born since September 2002 will have their own child trust fund.
    Our country faces a great challenge—to overcome inequalities of income and wealth and to build a Britain that is not just a property owning democracy but a wealth-owning, asset-owning democracy open to all. And today's announcement is the foundation on which the Government will build in future Budgets and spending reviews. None of this would be possible if we listened to representations to cut public spending by 20 per cent.
    There is no section of our society who have contributed more to our national health service and who now depend on it more than Britain's elderly. We have always believed in a national health service free at the point of need. It is a commitment to which this Government, while in power, will hold steadfast. But there is an unfairness which undermines that commitment and which has unfortunately existed since 1948 when the NHS was first created. Thousands of

    287
    pensioners in hospitals are effectively charged a payment, with, from six weeks, cash deducted from their weekly pension to pay for meals and accommodation. It is a hotel charge imposed on one of the most vulnerable groups in society. For everyone else in our country, other than those on pensions and benefits, hospital care is entirely free of charge. It is therefore wrong that the elderly, who have saved all their working lives for their retirement through their national insurance contributions, should now suffer the reduction of their pension entitlement to pay for hospital care. So for pensioners, even if they stay in hospital for up to a whole year, I am today announcing that we will abolish this charge. The charge will be abolished with immediate effect for pensioners going into hospital from today. To those opposite who have advocated vouchers, fees, or new health charges for medical services or basic accommodation, this is the Government's answer: we have not only rejected those charges but are abolishing hospital accommodation charges, not just for pensioners, but for all who have charges imposed on them through the social security system.
    I have one further announcement to make. Starting next month, we will be writing to every pensioner in Britain, telling them that from October all single pensioners with income below £139 a week and all pensioner couples with total income below £203 a week—that is, the millions of pensioners in our country who have modest savings and modest works pensions—stand to benefit from our new pension credit. In total, in the typical constituency of hon. Members, 7,000 pensioners. Many couples will benefit by £20 a week, and many single pensioners by up to £15 a week. The average additional payment will be £7 a week extra for single pensioners on the credit, and £9 extra a week for couples on the credit.
    At the age of 80, pensioners receive an addition of just 25p a week to cover the costs that getting older involves. At just 25p extra per week, it has rightly been criticised as inadequate, and I have had many representations from MPs on all sides of the House. To double or
    288
    quadruple such a small allowance would not be a sufficient recognition of the needs of the very elderly over 80, or of the contribution that they have made to the life of our country and its success. The winter fuel payment of £200 has not, I regret, been supported by all parties in this House. But I hope that there will now be all-party support for my proposal that for every household where a pensioner reaches the age of 80, or is over 80, we will add to the winter allowance of £200 an extra payment of £100—a total of £300 that will be paid each and every year to almost 2 million elderly men and women over 80.
    A Budget meeting our responsibilities abroad and at home; steadfast for stability, enterprise and full employment; tackling inequality; building an NHS free at the point of need. A Britain of economic strength and social justice. I commend this Budget to the House.

    Budget Statement

      PROVISIONAL, COLLECTION OF TAXES
      Motion made, and Question,
      That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—

      (a) Rates of tobacco products duty (motion No. 2);

      (b) Rate of duty on beer (motion No. 3);

      (c) Rate of duty on wine and made-wine (motion No. 4);

      (d) Hydrocarbon oil duties (rebates) (motion No. 6);

      (e) Vehicle excise duty (tractive units) (motion No. 12);

      (f) Value added tax (requirement of evidence or security) (motion No. 13);

      (g) Joint and several liability for unpaid VAT of another trader (motion No. 14);

      (h) Value added tax (face-value vouchers) (motion No. 15);

      (i) Employment income (provision of services through intermediary) (motion No. 28);

      (j) Personal pension schemes (limits on contributions) (motion No. 45).—[Mr. Gordon Brown.]

      put forthwith, pursuant to Standing Order No. 51 (Ways and means motions), and agreed to.

  Budget Resolutions

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

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

    (b) for refunding an amount of tax;

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

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

    (ii) so far as it is applicable to services, applies to services of every description.—[Mr. Gorden Brown.]

    1.32 pm
    Mr. Iain Duncan Smith: On behalf of the House, I start by congratulating the Chancellor of the Exchequer and his wife, Sarah, on their happy announcement this weekend. I can assure him that children are a great blessing despite some of the trials.
    I welcome some of the measures in the right hon. Gentleman's Budget, particularly those to counter terrorism and to combat world poverty and poor education in deprived areas. We shall certainly give them welcome and support in as far as we possibly can.
    During the past six years we have come to learn that the Chancellor's Budget speeches are characterised as much by what they conceal as by what they disclose. The right hon. Gentleman has made it clear that he prefers to let the damaging detail—the fine print—leak out over the days and weeks that follow, his Budgets. Today, despite all the Chancellor's bombast and bravado, we learned a great deal.
    We learned that the Chancellor has got his forecasts wrong again, we learned from the Red Book that his borrowing is up again, and we learned that taxes are up and will stay up. From this week, a typical family will be another £568 a year worse off. We also learned that the Chancellor has no intention of being candid with the House or with the British people.
    Let us consider some of the figures that have been announced already in the Chancellor's Red Book. On page 235, we see that the savings ratio this year is forecast to be even lower than it was last year. On page 241, we see that manufacturing output fell last year by 4 per cent., and that the Chancellor's forecast for this year has been slashed as well. On page 238, we see that business investment, forecast last April by the right hon. Gentleman to grow this year by up to 6 per cent., is now forecast to fall. We did not get any of those details from the right hon. Gentleman's speech today. This is a Chancellor who promised us prudence, but has now given us higher borrowing and higher taxes at the same time.
    The Chancellor's message to the British people is clear: higher taxes, which is pain today, and higher borrowing, which is more pain tomorrow. The Chancellor has increased taxes on pay, jobs, homes,
    290
    home owners, mortgages, marriages, petrol and pensions. The Government are taking an extra £5,500 per household per year. That is an extra £44 per week for every man, woman and child. The Chancellor's great excuse was that this money would make our public services world class. Instead, we have a million people on hospital waiting lists, a crime is committed every five seconds, and thousands of children are leaving school without one GCSE to their name. It is the same old story: more tax, more spend and more waste. That is the sum of the Chancellor's approach.
    That is from the Government who promised:
    "We have no plans to increase tax at all."
    They added:
    "Our proposals do not involve raising taxes."
    They even said:
    "We want people to pay lower taxes."
    Now, 53 tax rises later, when people receive their pay packets this week they will find that their take-home pay has fallen for the first time in 20 years. Now they know what the Chancellor really stands for—promises, promises, promises. Every year he makes them and every year he breaks them.
    Just as he has broken his promises to individuals, so he has broken his promises to business. In 1998, the Chancellor promised major changes to help business. In 1999, he promised tax cuts for business. In 2000, he promised incentives for business. In 2001, he promised more good news for business. Today, he even promised new help for business.
    Today, we also see what the Chancellor's promises are worth. There will be an £8 billion tax on jobs. That is the cost of national insurance, which he has raised. That is hitting business, and it will hit it hard. The British chambers of commerce say that it will hit it so hard that one in five firms will cut jobs directly as a result of the Chancellor's new tax. The Chancellor has been so hard on business that, since 1997, he has taken an extra £47 billion from it in tax. No wonder that the right hon. Gentleman did not tell the House today about the real cost of his policies.
    The Chancellor did not say, for example—although the figures are now clear—that insolvencies are at their worst level for a decade, or that analysts say that 70,000 firms will go bust over the next three years. He did not say that manufacturing has lost 300 jobs every day since Labour has been in power, or that manufacturing output and investment are now lower than when he delivered his first Budget in 1997.
    Just as the Chancellor has broken his promises to business, so he has broken his promises to hard-working families. Since 1997, council tax has increased by 60 per cent., adding more than £400 to a typical bill. Just look at the Red Book—council tax is up by £8 billion since Labour came to power. Stamp duty increases have added £5,000 to the cost of purchasing an average home in the south-east. The abolition of mortgage tax relief has cost home owners £200 a year. The abolition of the married couples' allowance has cost families £300 a year. Higher petrol taxes have cost the average motorist about £300 extra every year. In short, the Government's tax take has risen by more than 50 per cent. since the right hon. Gentleman became the Chancellor.

    291
    Of all those who have been hit by the Chancellor, there is one group that will be hurt more than most. The savers of today are the pensioners of tomorrow. [Interruption.] Labour Members may laugh, but they are laughing at those who are saving for their futures, whom they are damaging. They laugh while the Chancellor is busy blighting those people's old age by damaging their retirement. It is worth reminding all of them who want to laugh that in 1997 he said that he would "encourage personal savings". In 2001, he said that he would
    "reward savers, pensioners and hard-working families".—[Official Report, 7 March 2001; Vol. 364, c. 307.]
    Again today, he gave us all the same guff that he usually gives about helping them—promises, promises, promises, but under him savings have halved.
    When Labour took office in 1997, the savings ratio was 10 per cent. Today, it has fallen to 4¾ per cent. It is all there in the Red Book. The Chancellor is destroying savings, and his so-called pension reforms include a pension tax, worth £5 billion a year, which has hit every single future pensioner. He has also created a pensions crisis. Someone retiring today will retire on half the income that they would have retired on in 1997. He should apologise to all those people whose lives he has damaged.
    The Chancellor has not only let down those who wish to retire in the future. He is the man who promised the end to the means test for pensioners, but, under him, the proportion of pensioner households subject to a means test has risen by 50 per cent. Every single one will remember his words. Today, after two years and three consultations, reannouncements and re-reannouncements, the Chancellor decided to announce his child trust fund again. We have more overcomplicated proposals that will do little to help future long-term saving, but they will extend means-testing to even more people. There is only one thing to say about this little scheme of the Chancellor's—[Interruption.]—if the Home Secretary will keep quiet for a second: all the money that the Chancellor is offering to those children will have to go towards paying their tuition fees or their top-up fees.
    I come now to the financial impact of the war with Iraq. We support the Government in their waging of this war, and we naturally support its full and proper funding, so, as I said earlier, and I repeat, we welcome the extra money that the Chancellor has announced today. But he should be warned; he cannot get away with using the war to get him off the hook for his long-term mismanagement of the economy. Nor can he get away with blaming Europe for all his problems. He just cannot blame all his flawed forecasts on world events.
    Last April, the Chancellor delivered his forecasts to the House for the corning year, and he got them wrong. He got his forecasts for growth wrong. He got his forecasts for tax revenues wrong. He got his forecasts for borrowing wrong. So, in November, he admitted that his central growth forecast for 2002—2¼ per cent.—was wrong. He conceded that tax revenues had failed to meet his projections, and he announced that borrowing would have to rise by £20 billion in just two years. Then, he went on to blame all that on the fact that world trade and world gross domestic product growth had not been as fast as he had forecast.
    292
    The Chancellor's excuse, in other words, was not that he had failed Britain, but that the world had failed him. That is a serious charge to make, so I went back to last year's Red Book to check how those figures stack up. We find that when he delivered his pre-Budget report in November, the only forecasts that he got right were those for world trade and world growth. He blames the world, not himself, for getting it wrong, and we heard it again today, although he sits there grimacing. He blamed the world one more time: it is the world's fault that growth is running in such a way.
    The Chancellor wants us to believe that the world economy has experienced the most rapid slowdown for 30 years. In the early 1990s, we had three years of world growth averaging just 1 per cent. Last year, according to the European Commission report, in which he places so much credit, world growth was 2.9 per cent. This year, the same group forecasts growth of 3.2 per cent. So, the Chancellor is inventing a series of problems that do not exist.
    Today, the Chancellor has to admit one more time that he got his growth forecasts wrong again. They are down by 0.5 per cent., so they are wrong and his assumptions on tax revenues are wrong as well. The result is that his borrowing projections are also wrong. He sprinted through his borrowing figures, so let me recap. Last April, he predicted that he would have to borrow £13 billion this financial year. Today, he admitted that he would have to borrow £27 billion. That takes us only to the end of the financial year.
    Just two Budgets ago, the Chancellor told the House that he would need to borrow £35 billion between 2002 and 2006. Today, he admitted that the true figure for borrowing over the period is not £35 billion, but £98 billion. In just two years, his medium-term borrowing requirement has risen by £63 billion. That is not just invented money; it amounts to £2,600 extra for every single household in Britain. He cannot borrow indefinitely, however. Surely even he, with his fiddled figures, understands that. More and more borrowing will mean higher and higher taxes.
    Independent forecasters have long been warning the Chancellor that he was being far too optimistic. They questioned his revised predictions. Some called them "overly optimistic" and "rose tinted". We know what the independent experts think now: 78 per cent. think that by 2006 the Chancellor will have to raise taxes by between £5 billion and £8 billion, and those are the experts who sit on his own Treasury panel, although we do not hear any of that from the Chancellor.
    The point is that the Chancellor's broken promises and missed forecasts might have been palatable if we were seeing real reform of our public services, but the facts speak for themselves. Take health: 1 million people are on NHS waiting lists, hospital admissions are down, not up, and last year 300,000 people were forced to pay for their own operations—a figure that has trebled since 1997.
    On education, 50,000 children play truant every day, one in four leaves primary school unable to read, write or count properly, and every year more than 30,000 children leave school without a single qualification. This Government have tested to destruction the theory that more and more money alone can transform our public services. They have talked about reform, but delivered

    293
    none. Six years of spin and spending cannot hide the fact that our public services are just not good enough. They need not simply more money, which is the Chancellor's prescription, but a new approach altogether. Our public services need an approach based on giving power back to people so that they are in control of their own lives, whether they are nurses, doctors, teachers, patients or parents.
    The Chancellor has delivered his seventh Budget: six years, seven speeches and all promises, promises, promises. He promised prudent Budgets, fair Budgets, Budgets for enterprise and Budgets for the public services, but he has not delivered any of it. He has got it wrong, because he puts systems and initiatives, targets and schemes, in which he has great faith, before real people and real results. He has got it wrong because he thinks that he knows better than the British people how they should be living their lives. He has also got it wrong because he is driven not by the facts, which are staring him in the face, but by an ideology that has gripped him and will not let go. His sole mission in this Parliament is to prove that the old ways still work—never mind the evidence, never mind the consequences, just more failing policies and more downgraded forecasts from a discredited Chancellor.
    Last week, before it was too late, the Chancellor could have scrapped his tax on jobs and pay. He could have stopped punishing people who work hard and save hard. Today, he could have delivered security and independence for the young, for the old, for hard-working families and individuals, for those who create jobs and those who need them, for those who pay for public services and those who rely on them. He could have delivered a fair deal for all those people, but he did not and he never will. It is the British people who will pay the price: more taxes, more spending and public services that simply are not good enough. The message of the Budget is clear for the British people—it is pain today from the Chancellor and, as borrowing spirals and he blocks any real reform, more pain tomorrow.
    1.51 pm
    Mr. Charles Kennedy: I begin by extending my personal congratulations to the Chancellor and to his wife Sarah and wish them good luck. Their news is very good indeed.
    This has been an example of not only a buck-passing Budget but a cross your fingers and hope for the best Budget. That is the reality of what the Chancellor has been up to. When we look at all the problems that we all encounter as constituency MPs, the jobs that are being lost and the sectors of the economy that are in difficulty, not least manufacturing, there is a sense of denial in the Chancellor's amazing account of how every indicator puts us well ahead of the pack internationally. He should stop blaming the rest of the world and feel chastened this year, because the British people are paying the price for mistakes and they deserve more than excuses. The current problems are not simply due to the inevitable downturn that has taken place in the world economy, because the British economy has been doing significantly worse than those of many of our principal competitors. That is proved by some key facts.
    294
    Business investment has fallen at record rates. In 2002 it fell faster than in any major economy, unless one counts Iceland as a major economy. All the other countries have faced the same economic downturn as we have, but all are investing more than the UK in their long-term recovery. One cannot pay for the future if one does not invest now. That has to be a central criticism of the Chancellor's approach.
    Manufacturing employment has fallen by more than 500,000 since 1997. Manufacturing has been in the longest recession since the second world war and output has fallen in seven of the past eight quarters. The Chancellor is now presiding over the biggest deficit and lowest growth rate since the Conservative Government lost office.
    The Chancellor has announced some measures that may help, not least the reductions in red tape and bureaucracy for the business sector. We have all had serious and sustained representations to that effect. We welcome those proposals and will obviously study them in detail as the Finance Bill progresses. We certainly want to see greater simplification in tax. This is the Chancellor's seventh Budget and, as in each of the other six, more and more complication and detail is being built into the system as he unveils the various schemes and initiatives. That will have to be examined carefully, too.
    As a country, we should be doing more to prepare our way for entry into the euro. We certainly look forward with considerable interest to the statement at the beginning of June to see whether white smoke emanates from No. 10 or No. 11, depending on what is going to happen—
    Lembit Öpik: Or both.
    Mr. Kennedy: Indeed.
    The Chancellor is right to press ahead with his spending plans, which, as he knows, we support. We were critical of the Government in the earlier years for not investing more sooner. There is much to be done and no time to waste. It is sound to borrow more when there is a downturn, so long as the economy remains in balance over an entire economic cycle. On that, we are with the Government in the broad parameters. We certainly reject the Conservative alternative, whatever it proves to be. It is difficult to have a debate with the Conservatives at the moment because we do not know the basis for their plans.
    The Government's pension credit comes in this autumn. It may be well intentioned but it is something of a bureaucratic nightmare. It is estimated that 1 million older people who are eligible will end up not claiming. That is not good enough. It would be better to scrap that and rely instead on a £5 increase in the basic pension, plus big increases in the age additions: £10 for the over-75s and £15 more for the over-80s. All the indicators demonstrate that the poorest pensioners are inevitably the oldest pensioners. That is where we should be front-loading our support with a view to the future.

    295
    What about council tax rises? It is now estimated, on the basis of figures that have come out today, that this year the overall increase in council tax that families pay will be £2 billion. That is a gigantic increase to spread across the economy at a time like this.
    Matthew Taylor: A stealth tax.
    Mr. Kennedy: As my hon. Friend points out, it is a stealth tax.
    Mr. Jon Owen Jones: Can the right hon. Gentleman confirm that the cost of getting rid of council tax would, on average, be a 3 per cent. rise in income tax—at least that is what it says in an internal Liberal Democrat document that has come into my hands? Will he refute the section of that document that says:
    "However, we don't want to be drawn extensively into this"?
    Mr. Kennedy: My answer is that what we have proposed at the time of this Budget is—[Interruption.] I will answer the point directly. It was a fair question and I will give a fair and full answer. We are proposing for this Budget that our priority would be for the top rate of tax to go from 40p to 50p for every pound earned above £100,000 per year. That would generate—these are the official figures—£4.5 billion, which one could put into the economy as a whole. What could one do with that money? One could do a number of socially progressive things. First and foremost, one could introduce a flat-rate reduction of £100 for each and every council tax payer in the country. That is a fairer, more egalitarian approach. With the additional resources, one could also, as we have already achieved in Scotland, abolish tuition fees and not go down the route of introducing top-up fees.
    The best of those costed policies contributes that bit more. After all, that group of earners constitutes only 1 per cent. of the tax-paying public. One could have a fairer system of local government funding and greater student opportunity than we have at the moment. Those will find a positive echo with people between now and 1 May.
    Mr. John McFall: The right hon. Gentleman mentions tuition fees in Scotland, but he knows as well as I that tuition fees are delayed in Scotland. Indeed, in my household this week, we had a notice for the tuition fees for two years' education for my youngest son, so let the right hon. Gentleman talk on the real planet.
    Mr. Kennedy: I do not agree with the hon. Gentleman's interpretation of the policy to which his own party has been a signatory in Scotland. If this is the argument that the Labour party in the House of Commons is advancing, I suggest that the hon. Gentleman have a word with someone called Jack McConnell, because that is certainly not what he is arguing in Scotland. [Interruption.]
    Mr. Deputy Speaker: Order. I hope that the debate can be conducted in a more orderly manner than this.
    Mr. Kennedy: I shall try to behave, Mr. Deputy Speaker.
    296
    This is a disappointing Budget on four counts. It is a buck-passing Budget, and it is a Budget that invites unfavourable comparisons with the past and will undermine many people's hopes for the future. People want a more transparent system of fair taxation. They want it to be devoted—properly and efficiently, through more local accountability—to vital public services, and they want less of the smoke and mirrors that has been such a defining feature of the last six years.
    That is the approach taken by the Liberal Democrats. We are willing to confront people with the fact that one cannot get something for nothing in life, and that the days of the apotheosis of Thatcherism are over. The idea that it is possible to reduce taxation steadily while magically delivering improved public services just does not add up. We have continued to present that argument, but the Government have yet to respond to it—and they certainly have not done so adequately in what we have heard today.
    Several hon. Members rose—
    Mr. Deputy Speaker: Order. I must inform the House that Budget resolution No. 28, entitled "Employment income (provision of services through intermediary)", is incorrectly printed. The correct version will shortly be available in the Vote Office, and will appear in tomorrow's order of business.
    2.1 pm
    Mr. John McFall: I congratulate the Chancellor on presenting his Budget against a delicate international and national background—a background of which Opposition speeches have made no mention. The real problem internationally is a weakening of demand in both the United States and Asia. We are mindful of the fact that the US has been the leading world economy since the early 1990s, but already the labour market statistics for February and March show a big fall in not just employment but consumer confidence and industrial output expectations. As for Asia, a severe lack of confidence has been caused by both the stand-off with North Korea and the severe acute respiratory syndrome affecting Hong Kong and other areas.
    As the Chancellor suggested, the background in Europe is sclerotic. Europe is lagging behind Japan for the second year running, Germany has the worst unemployment on record, and the economic reforms required by the Lisbon agenda have made little progress. In the eurozone, economic growth rates are now down to 1 per cent. There is cause for alarm, because the eurozone is the largest market for the United Kingdom: 60 per cent. of our manufacturing exports go to those countries, and just over 40 per cent. of our total trade is with Europe. The European Union forecasts a fall in eurozone growth from 1.7 to 1 per cent., which would reduce gross domestic product in the United Kingdom by a quarter of 1 per cent. and add £2 billion or £3 billion to next year's public sector net borrowing.
    There are also a number of domestic threats. Retail sales have been weakening, and are now at their weakest for 10 years. Industrial investment is nearing a 20-year low, and the finance industry is still recovering from the dotcom crash famously described by Alan Greenspan as "infectious greed".

    297
    That, however, must be balanced against the macroeconomic essentials, which are sound: the UK has the lowest inflation for 50 years and the lowest interest rates. It is also comforting that we have the lowest unemployment among the G7 countries. It is forecast that next year the United Kingdom will be the top country, possibly overtaking America.
    Notwithstanding the criticisms levelled at the Government, this is the time for fiscal loosening. There is a sound economic case for extra borrowing when the risks are all on the downside. When interest rates are low, inflationary pressures are almost non-existent and the national debt is, as the Chancellor pointed out, very modest, we do not want the imposition of a fiscal straitjacket on a cyclically depressed economy. We need the Budget deficit announced by the Chancellor for investment, and for general support for the economy. Let us take advantage of automatic stabilisers, which ensure that borrowing takes the strain when the economy weakens and we need not raise taxes or cut public spending. The Chancellor has remained faithful to that idea.
    There are a number of things about which we can be optimistic. We have cheap money, and we have the lowest interest rates. Interest rates are negative in the United States, and barely positive in the eurozone and the UK. We have cheaper oil. One positive aspect of the conflict over the past few weeks—not much is positive in terms of damage and injuries—is the fact that the oil price has not zoomed up. I think that its highest level has been about $30 a barrel. The link between oil and GDP, and economic growth, is important.
    Lynne Jones: My hon. Friend has mentioned investment. Is there not a case for additional borrowing for investment in infrastructure, especially housing and transport infrastructure, to help get the economy moving? Is my hon. Friend disappointed that the Chancellor did not do more in that direction, and also omitted to make capital available in lieu of private finance initiative credits in order to speed capital expenditure?
    Mr. McFall: I agree that it is important for us to stick to our public spending targets, but, as I have said, the international background is fragile. In the last Budget we committed ourselves to an extra £61 billion of public expenditure. If we can spend all that, and spend it wisely, we will do a service. I think the civil service has yet to learn how to spend it: I believe that the undershoot this year is about £2 billion. I want the measures on public services to be implemented, but they must be realistic given the background.
    In the last 11 months of the financial year, total central Government receipts were 1.5 per cent. higher than in the corresponding months last year. That is less than the 2.2 per cent. increase implied in the pre-Budget report, and well below the 4.2 per cent. anticipated in the April 2002 Budget. In the context of the medium-term financial forecasts, we are not meeting the targets that we have set ourselves in a number of areas, which is worrying. Corporation tax forecasts have been cut on three consecutive occasions, but the Treasury is confident that its forecasts are correct. I hope that in this instance they are.
    298
    Martin Weale of the National Institute of Economic and Social Research has said:
    "My worry is not about deficits in the short term. The problems arise in two or three years' time".
    Although I accept what the Chancellor said: namely that, over the Treasury's estimated economic cycle from 1999 to 2005, there will be a £46 billion surplus, serious questions about our borrowing and our commitments to public expenditure will have to be answered at the end of that economic cycle.
    The Chancellor mentioned productivity. We are still disappointed about that. In the next few months, my Committee will look at productivity. Every year since 1996, productivity has increased by 1.25 per cent., compared with the historical average of 2.25 per cent. The latest Bank of England inflation report states:
    "The growth of labour productivity per person has been below its long-run average".
    In its annual assessment, the International Monetary Fund states:
    "Raising productivity remains a key challenge".
    We are well behind the United States in output per worker—some 45 per cent. behind. Even if we factor out the longer hours worked in the US, there remains an output gap of 25 per cent., and we are still below France and Germany. That is the big issue. Those countries have sclerotic growth, yet their productivity remains higher. We have yet to crack that issue in this country.
    Lembit Öpik: The hon. Gentleman mentioned tuition fees and, by implication, top-up fees. Given that, as we know, education makes a big difference to productivity, and given that the Welsh Liberal Democrats—should they get back in government in Wales—will promise to try to abolish tuition fees and not to introduce top-up fees, what advice would the hon. Gentleman give to his Labour colleagues in the Welsh Assembly? Would he advise them to seek a partnership with the Liberal Democrats in order to find that solution?
    Mr. McFall: If I spoke to my Labour colleagues in Wales, they would tell me to take with a pinch of salt anything that the Liberal Democrats in Wales say about that. However, we are at one on productivity. My intervention on the leader of the Liberal Democrats was for the sake of honesty and clarity, which are important in terms of economic issues.
    Rev. Martin Smyth: It is argued that education improves productivity, but is it not a fact that productivity in India and China is even better than ours in some respects, despite our level of education?
    Mr. McFall: Yes, but I accept the basic point that education and skills are extremely important. One reason given for the disappointing productivity results is that an extra 1.5 million people have been employed in this country since 1997. Generally speaking, such people have less skills and no work ethic, so it is a matter of training them. Raising productivity is a long-term objective, not a short-term one.
    Mr. John Redwood: Has the hon. Gentleman noticed the terrible trend of productivity in the public services? We have put 25 per cent. more real

    299
    resources into the health service, and got nothing more out. Is not the core of the problem the fact that too much is going into public services without getting the benefits?
    Mr. McFall: I cannot accept what the right hon. Gentleman says on face value, without looking into the figures; however, the biggest growth has occurred in the public services. In terms of investment in the past year in the general international environment, where the economy is in decline, jobs in the public services have been very important. I agree with the right hon. Gentleman that there are reasons for concern in the public services, wage costs being an example. Last year, wage costs in the public services were 5 per cent., whereas in the private sector they were 3.5 per cent. So there are issues that we need to address, and I think that we can have an intelligent debate on them across the divide.
    Mr. John Bercow: It has become clear in recent minutes that the stance of the leader of the Liberal Democrats is that, on receiving a bill, he will in each case simply say that he disagrees with the interpretation of it. On the subject of the euro, and given the Government's clear, if mistaken, commitment in principle to joining the single currency, is the position of the hon. Gentleman that this country should do so at exchange rate mechanism mid-rates?
    Mr. McFall: The hon. Gentleman anticipates my speech—I shall come to that point in due time. In any event, he is too disparaging of the leader of the Liberal Democrats. The right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) and I have been friends for many years, and I respect his integrity. His politics are wonky, but he is a good guy.
    The Chancellor has come up with productivity-related initiatives every year since 1997. He has focused on competition, capital gains, tax credits for research and development, raising corporation tax and dividend payments, and on skills training. In addition, new enterprise legislation will be enacted in June. However, we still have a long way to go on productivity, and I give the Chancellor and the Treasury notice that my Committee will be looking at this issue.
    The National Institute of Economic and Social Research has suggested that we try something new by joining the euro. It suggests that removing the exchange rate and interest rate volatility through the eurozone could, in the long run, raise UK capital stock by 10 per cent., adding 4 per cent. to the gross domestic product. In addition, trade competition would help productivity.
    That leads me to the wider aspect of the euro. Throughout the Chancellor's speech, references were made to labour market flexibility, convergence and other related issues. The decision that the Government must take before the first week in June will be extremely important. During the past three months, my Committee has taken evidence on the UK and the euro; in fact, we have had two evidence sessions every week since the beginning of January. I think that ours is the only body in the country that is making such a fundamental examination of the UK and the euro. To date, the debate in the country has been superficial, irrelevant to people's lives and largely arcane. Ask any member of the public —or even of the Government—to
    300
    name the five tests, and one would struggle to get the answer; in fact, the question would probably be met with a blank look.
    The Chancellor says that the economic case must be "clear and unambiguous", but can that be the case? During our Committee hearing, I asked the Chancellor whether he had ever met an economist who thought that any such case was clear and unambiguous, but he declined to answer. In my view, a clear and unambiguous case cannot be made. People will not be convinced by the Chancellor or his advisers' saying that the economic tests have been met, so we are going in. All that can be made in respect of the economic tests is an economic judgment, but the real judgment is political.
    I applaud the Chancellor for the thoroughness with which he has approached this economic analysis. The history of sterling through the 20th century, as far back as 1924, when we re-joined the gold standard, shows that there was no such economic analysis. The history books show that when Winston Churchill was sitting at the table in No. 10 Downing street with Montagu Norman, the then Governor of the Bank of England, he was offered a cursory appreciation of what was happening. He then turned to Montague Norman and said, "Well, will we go in, Montagu?" Montagu replied "Yes". We were back in the gold standard, and disaster followed as a result. So we must have a thorough economic analysis.
    Malcolm Bruce: I agree very much with the hon. Gentleman's approach, but does he accept that, even in an economic sense, common sense tells us that, with 10 new members about to join the EU, all of which are committed to joining the euro, both British and foreign investors are likely to consider the idea of investing in low-cost areas inside the eurozone more attractive than risking investing in the UK, given that there is no clear idea of whether we will be in or out?
    Mr. McFall: Inward investment and the window of opportunity are very important issues, and our Committee has heard witnesses from the UK and elsewhere in Europe comment on them. Our debates and inquiries to date show that Europe is a complex issue, not a simple one, and that the economic case cannot be clear and unambiguous. The Government could put their best judgment, in economic terms, on the line; then, the decision will be a political one. Hopefully, our report will indicate the complexity of the argument and point out to people that there are dangers if we go in and dangers if we stay out; there are arguments on both sides. We want to establish the core issues, and inward investment is one of them for people such as the hon. Member for Gordon (Malcolm Bruce), who is on the pro-side. However, there are other core issues, such as interest rates and the one-size-fits-all approach, for those on the anti-side.
    Mr. Andrew Love: Does my hon. Friend agree that if the previous Conservative Government had set five economic tests before joining the exchange rate mechanism, they might have made a better job of it?
    Mr. McFall: That comment stands for itself and I have no need to add to it. We can pay a heavy price for the absence of proper economic analysis.

    301
    The tests and the core issues are important. If I were to read out all the tests, it would bore us all, but they point to the importance of certain issues—for example, on convergence, whether the business cycles and economic structures are compatible so that we can live comfortably with euro interest rates. Is our economy similar to the economies in economic and monetary union? Does it have the same underlying behaviour, and does it move in harmony with them?
    One of the issues that the Chancellor tackled was the housing market. We are told that the UK housing market is vastly different from that in the rest of Europe, particularly in respect of the variable-interest mortgages in this country. The Chancellor will assess whether fixed-interest mortgage rates would help to bring about greater stability in this country and also whether that would be beneficial if we decided to join the euro at a later date.
    The second test is flexibility: how rapidly prices and wages adjust to changes in demand, particularly in view of our one-size-fits-all interest rates. I accept that there could be dangers in that, and that our current macro-economic model—with the Bank of England and the Monetary Policy Committee—is good. Opponents of the euro will be asking the serious question of whether we should trade in the superior model of the Monetary Policy Committee for the inferior model of the European Central Bank. That is a big issue.
    The third test is whether euro membership will improve conditions for long-term investment. That is hotly debated. As an observer, I believe that business does not like risks and joining might mean fewer risks.
    The fourth aspect is the competitive position of the UK financial services industry. I believe that, irrespective of where it is based, it will prosper because it is twice the size of anything else in Europe—Frankfurt is the next largest. Some people ask why the test involves the state of our financial services industry, rather than manufacturing or other industries. It is not the most important test, but I am sure that it will be passed.
    Lastly, there is a catch-all question that summarises the others: will our membership promote higher growth, stability and jobs? Will UK investment dry up if we are not in the euro? With the candidate countries joining the eurozone over the next couple of years, what about the window of opportunity to influence the governance of the European Central Bank? What about changing the stability and growth pact? On our visits to Frankfurt, Paris and elsewhere, some people have suggested that it is almost all about stability, and only a little about growth. What we need in the eurozone and elsewhere is growth. The Chancellor's fiscal loosening is important, but it does not apply to the same extent in the rest of Europe due to the stability and growth pact. If we do not join, will we sacrifice our leadership role in Europe?
    Lembit mpik: I am sorry to intervene twice, but does the hon. Gentleman agree that we have a great opportunity to be proactive partners in business with potential new members? Obviously, I know Estonia particularly well. If we take the strategic approach along
    302
    the lines that he describes, by being in at the start, we could help our own economy by investing in those developing economies.
    Mr. McFall: I would like to relate the hon. Gentleman's point to my account of the Treasury Committee's inquiry. We visited the Republic of Ireland, Poland and Hungary, the latter two being among the candidate countries. They see Britain as one of the large countries with a leadership role, they like how we do things and they want to increase business links with us. It is an important issue to go into the main pot for discussion. There is no doubt that the smaller countries look to Britain as a leader.
    One issue that the Chancellor did not much touch on is pensions. The hon. Member for Roxburgh and Berwickshire (Sir A. Kirkwood) and myself are considering the issue, which is a long-term problem that should be examined on a cross-party basis. When interest rates are low and equity markets are tumbling, an enormous gap develops—currently estimated at £85 billion—between the value of UK pension fund assets and liabilities. In some cases, the deficits are almost as large as the company itself. For example, Rolls-Royce has a deficit of £1.12 billion, whereas its market capitalisation is £1.24 billion. That presents a real danger to the firm and to its employees.
    If we want to, we can get involved in the blame game: we can blame the actuaries for an optimistic forecast and for keeping us in equities for too long; we can blame FRS 17, the new accounting practice standard; and we can blame the Government for removing tax reliefs on dividends and for imposing legislation. However, we must sort the problem out on a consensual, cross-party basis. Only this week, I met the chief executive of a major United Kingdom company, who said that the private sector must get more involved in the problem. We see little coming from the private sector, but we really need some initiatives from that direction. As I said, the hon. Member for Roxburgh and Berwickshire and I will work on the problem during the recess.
    One example from the private sector is Sainsbury's, which has a final salary scheme and has increased the contributions of its employees from 4.25 per cent. to 7 per cent.—that amounts to a pay cut. The employees have a choice: they can pay the extra, or stay at the 4.25 per cent. rate and end up with a career average salary pension. Employees and employers have a choice. One of the biggest problems with pensions is that young people up to the age of 35 or 40 simply do not think about them, believing that there is no tomorrow. We have to educate younger people to start saving money at an earlier age.
    I shall say this sotto voce: perhaps the problems will become so considerable that we will have to think about introducing a form of compulsion. I know that the Government do not want to know about that, but it must be on the medium and long-term agenda for the pensions industry. I certainly do not want companies to follow the Boots' route. I have nothing against Boots, but it had a 100 per cent. flight from equities into bonds. When the stock market is fragile, we do not want a further flight from equities, which would make things even more problematic.

    303
    I put the call out today, on a cross-party basis, that we must all—not just the Government, who have not taken it as seriously as they should have—do something about the problem. We all have responsibilities in that respect.
    Lynne Jones: Is it not vital for the Government to examine more carefully the interaction between state benefits and personal and private pensions? My hon. Friend commends Sainsbury's, but it effectively charged its workers more for a less generous pension. That may not necessarily be wrong, but it is difficult for low-income workers who, if they make contributions only to be penalised by their state benefits, will be little better off. The interaction between the two is vital.
    Mr. McFall: I do not commend Sainsbury's; I simply highlight it as an example because the company is trying to deal with the problem. The public-private divide has not been adequately debated and we need more clarity on the issue. The Government are attempting to deal with the problem partly through pension credit. My hon. Friend may disagree, but Sainsbury's is making an effort. We have a long way to go on the issue.
    I shall finish by referring to something that the Chancellor mentioned at the beginning of his speech: international development, which he cited as one of the three long-term challenges. I commend the Government for tabling, this Saturday in Washington, a $50 billion international financial facility initiative to deal with the 115 million young people around the developing world who do not have primary education, and also the health needs of people in Africa and elsewhere who are suffering from AIDS, tuberculosis and malaria. Against that background, the real disgrace is the continued protection of farmers by almost the entire developed world. The EU, Japan, and the United States are in the dock.
    On 31 March, the Doha trade agreement on agricultural subsidies collapsed. That followed the collapse of the agreement on pharmaceuticals, which followed the collapse of the trade terms of developing countries. From a multilateral point of view, that is extremely worrying. It is important that we get the WTO on track at the September ministerial meeting in Cancun.
    We must also request early agriculture reforms in the EU. It is vital for the EU to initiate a process of eliminating its export subsidies. The world economy is facing the first synchronised downturn since the 1970s, and we will not achieve the worthy aims of debt relief if that is not resolved. Rich countries are subsidising their agriculture to the tune of £365 billion a year, putting farmers in developing countries out of business and creating a dependence on imports to survive. In the next month, along with one of the development charities, I shall be visiting Zambia to look at development issues. Two million people are going hungry in that country and some 300,000 Africans live on less than 65p a day. We all make a great fuss, rightly, about Comic Relief, which raised £40 million for Africa through its last initiative, yet every day Africa pays more than £26 million in debt repayments. There is something grotesquely wrong in that relationship and I suggest to the Government that debt must be cancelled without preconditions such as trade liberalisation measures. Debt cancellation would release funds to tackle mass
    304
    poverty and meet the millennium development goals. We must look at what the rich countries are doing because, daily, we are punishing the poorer countries.
    For years I have suggested that the Government work towards the 0.7 per cent. target for international development. I commend the Chancellor and the Secretary of State for International Development for their work in this area. but meeting the target would be hugely symbolic around the world. An additional £50 billion a year could be given to the international community if we met that target, because others would follow. This country contributes and we have all-party support for doing so, but it is against a background of impoverishment of the developing nations.
    Norman Lamb: Does the hon. Gentleman agree that it is essential that the US ends its block on TRIPS—trade-related aspects of intellectual property rights—reform, so that countries such as Zambia and others in sub-Saharan Africa can get low-cost drugs to address the awful plague of HIV/AIDS?
    Mr. McFall: I agree entirely, and I mentioned that the Doha round collapsed on the issue of pharmaceuticals. That needs to be revived. We will not make progress against such a background.
    We are kidding ourselves if we feel that what we will put on the table on Saturday will complete our task. It will not, and I know that the Chancellor and others are aware of that. The big issue is the EU subsidies. We must ensure that multilateral organisations are put back on track after the disasters of the past few months. That is extremely important for us all. It is important for us economically, but also for our brothers and sisters in developing countries.
    2.34 pm
    Mr. John Redwood: I have declared my interests in the register.
    This Budget takes the breath away in terms of the things that the Chancellor did not admit to and the things that he would not say. This was a Budget by a Chancellor of tax and waste who has perfected the techniques of taxing, taxing and taxing again. He taxes when you are not watching and when you are. He taxes money that many people did not know they had and taxes the money that they desperately need.
    If only the money were being well spent; if only hospitals were suddenly full of beds and waiting lists were suddenly reduced; if only all schools offered places of high quality that parents would wish their children to go to; if only we had a transport system of which we could be proud. If so, some of us might say that although we would not have raised as much tax ourselves, at least we have something worthwhile.
    We know that our transport system is a disgrace by international standards and by the standards of the past in this country. We know that the health service is groaning, with too many managers, middle-ranking executives, spin doctors and others. It does not have enough real doctors and is short of beds by a large margin. We know that our education service is extremely patchy and is still letting down many children in the most deprived areas of the country, as the Government remain wedded to intervening on local

    305
    government and sending out directives and circulars by the dozen, the hundred and the thousand over its years in office so far.
    The Government still have not learnt that one cannot teach children by circular from Whitehall. They still have not learnt that the system needs the power of better management, better direction and more parental choice, district by district and borough by borough.
    The Budget is also a demonstration that we have a Chancellor of fiddled figures and failed forecasts. He tried to disguise the enormous surge in borrowing that he will impose on the long-suffering taxpayers of this country over the next few years. Had he been more honest and spelt out the figures—as he had to do in the Red Book today—he would have told us that there is to be a £166 billion surge in borrowing between 2001–02 and 2007–08, a relatively short period. My guess is that just as his forecasts last year went lamentably astray, these forecasts are again going to err. The error will be on the side of the Chancellor disguising the true extent of the black hole in his Budget figures, and underestimating the true extent of the borrowing that he will have to incur.
    Mr. James Plaskitt: On the subject of borrowing, does the right hon. Gentleman recall that the total borrowed under the previous Conservative Government surged, to use his word, by £304 billion?
    Mr. Redwood: I remember a policy called the exchange rate mechanism; it was warmly recommended by the Labour and Liberal Democrat parties and was the only consensus economic policy that the Conservatives ever followed. I remember that that caused high borrowing. The hon. Gentleman obviously thinks that high borrowing was a bad thing at that time. I hope that he will join me in condemning the Chancellor's wish to try to emulate that surge in borrowing over the next few years. Just as surely as that borrowing did damage in the early 1990s, so will this borrowing damage our economy today.
    Borrowing is not a cheap or easy option; it is not a cop out. The borrowing all has to be repaid with interest. It means that one pays not just once, but twice, because the law of compound arithmetic is very cruel on those who do the borrowing and need to do the repaying. It is not the Chancellor who will repay all that money, but my constituents and his. Very often it is the poorest of this country who get sandbagged by the Chancellor's taxes.
    Lembit Öpik: By implication, the right hon. Gentleman criticises the Government for not putting more money into public services. Is he for or against an increase in finance for Welsh public services, including free social care, bearing in mind that he gave money back to the Treasury from the Welsh budget when he was Secretary of State for Wales?
    Mr. Redwood: I remember increasing the things that mattered in Wales and keeping open hospitals that others might well have closed. My case is not that I want more spending, but that I want the money properly
    306
    spent. I do not want it spent on the army of spin doctors, quangos, middle managers, pen-pushers and directive-seekers. I want it spent on nurses, doctors and beds, with some left over so that we have less borrowing and less taxation. What this Government have also got to learn is that the higher the tax, the worse the economy performs. The bigger the increases in taxes, the more businesses are damaged. As the businesses are damaged, the revenues go down and the spending goes up. The Chancellor is in danger of being locked in a vicious cycle. As happened last year, he could discover that his revenues fall short and that his expenditures surge. That is the price and penalty of a bad economic policy.
    Mr. Love: The right hon. Gentleman mentioned earlier that there would be some money left over. The hon. Member for Arundel and South Downs (Mr. Flight) has suggested that that might be as much as 20 per cent. Does the right hon. Gentleman agree with that figure? If not, what figure would he supply?
    Mr. Redwood: I seem to remember my hon. Friend the Member for Arundel and South Downs (Mr. Flight) saying that elements of the overhead could be cut by 20 per cent. I thought that that was a very modest estimate of what could be done. I should like to cut 100 per cent. of the overhead of regional government in England. On cue, my right hon. Friend the Member for Haltemprice and Howden (David Davis) has arrived in the Chamber. He knows about these matters, and I wish him every success in his campaign.
    We want regional government to be taken from the map of England. I do not want England balkanised, and I do not want the bill for balkanisation sent to me. I want to be represented locally by councillors in a unitary council—as I am now—and I want to be represented nationally through the high court of Parliament. I believe that there should be direct communication between the leaders of major councils and Ministers, and between senior council officers and officials in Whitehall. There is no need for the hundreds and thousands of people in regional offices tucked away in towns and cities. Many people have never even heard of them, but they cost us far too much money.
    I am afraid that the hon. Member for Edmonton (Mr. Love) walked right into a massive trap, because 20 per cent. off the overhead is not enough. That proposal shows the modesty of my hon. Friend the Member for Arundel and South Downs and my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Chancellor, who supervises such matters. I would urge them to be even bolder, and to identify those overheads where we can sweep the whole lot away. However, the hon. Gentleman is leading me down tempting paths not central to my case today.
    The Chancellor is also the Chancellor of boom and bust. It was interesting to note that he did not even have the gall today to mention boom and bust. This is a Chancellor with a record, who now stands arraigned in the high court of Parliament for having created too many busts after all those booms. He is a man who knows all too much about the bust.
    We have only to look at what has happened to the stock market under this Chancellor. It soared in the first three years. Why? It was because the Chancellor stuck to

    307
    Conservative economic plans—lower taxes and lighter regulation. What has happened to the stock market since the Chancellor's policies were truly unrolled? Of course, it plunged.
    Labour Members are giggling away, and they would probably ask whether I had noticed that other stock markets around the world had fallen as well. I have noticed that, but the London market fell further and faster and harder than many of its competitor stock markets. The difference in the rate and extent of the fall is the price of the Chancellor.
    Mr. Plaskitt: I appreciate the right hon. Gentleman giving way a second time. It is kind of him, but I think that I should correct his view of stock markets. The UK stock market is down 44 per cent. from its high point, but the French market is down 58 per cent., the German 65 per cent. and the Japanese 61 per cent. The right hon. Gentleman is not right.
    Mr. Redwood: The problem with the hon. Gentleman's figures is that he is not taking the right time periods or markets. If he compares London with New York, he will see that my case is entirely made—that the American economy is run with lower levels of taxation and regulation. If he takes the time period that I mentioned, beginning from the point when the Chancellor's policies started to take effect in this country, he will see that the rate of fall is faster in Britain than in the other major markets.
    Rob Marris: Will the right hon. Gentleman give way?
    Mr. Redwood: I want to make a little progress before taking more meaningless interventions, which are great fun to shoot down.
    The Chancellor of the Exchequer seems to believe that there can be taxes that do not do damage. Let us look at his great experiment with the telecoms tax—the £22 thousand million that was taken out of the pockets of the telecoms industry in this country. He told us that he was proud of it, and I shall give him this—he certainly found a way to maximise the take. He had a very senior mathematician advising him, and he got the sums absolutely right. He found the perfect way to mug the telecoms industry for a huge sum of money.
    However, we must look at the damage that tax did, especially when the Germans followed it up with a very similar system based on the same idea. The fallout in telecoms and high tech that was beginning in Wall street and the US was multiplied many fold in Europe because the Chancellor had led the way by taking far too much money out of the lead sector that was powering the growth, generating the productivity gains and transforming the economy. The Chancellor did the most damaging thing possible at the most damaging time. The result was carnage—cancelled investment programmes and bankruptcies, with people fighting for their lives even in great companies such as BT.
    Rob Marris: I am grateful to the right hon. Gentleman for giving way. I shall not be drawn into commenting on the telecommunications licences. They were bought by private companies, and were not taxation. However, the
    308
    right hon. Gentleman rather pooh-poohed the point made by my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt). As I recall, the American stock market fell about 41 per cent. It is a bit less than the UK fall, but only a little bit.
    Mr. Redwood: Again, the hon. Gentleman is not looking at the time period that I am talking about, when the Chancellor exacted a price. I can give the sums. The Chancellor decided to take £5 billion out of pension funds at a time when the market was trading on a multiple of 20. Simple arithmetic shows that stocks would fall by £100 billion as a result of the £5 billion taken in tax. That money was taken from companies, pensions and savers. It was put somewhere else, and quite a lot was wasted.
    David Davis: There was also the cost of regulation.
    Mr. Redwood: From a sedentary position, my right hon. Friend the Member for Haltemprice and Howden says that there was also the cost of regulation. In addition, the costs of the specific taxes and of the general business taxes came to around £50 billion. Even Labour must understand that taking £50 billion away from productive and enterprising companies means that there will be fewer jobs, less investment and a big fall in the stock values of the companies losing the money. One cannot take all that money away and expect it to have no impact.
    That brings me to the pensions disaster. The Chancellor thought his second most clever tax was the pensions tax. For a year or two, it did its stealthy business and the money came in. Many Labour Members really believed the Chancellor and the Prime Minister when they said, "It won't have any impact. The stock market will go on up, there will be magic money, and you needn't worry."
    However, the stock market did adjust as the money went out of pension funds. Moreover, the problem compounded: the capital collapse in share values led to the collapse in the values of pension funds, and the pension funds had less income to reinvest. As a result, the black holes in the pension funds got bigger and bigger.
    I was delighted that the hon. Member for Dumbarton (Mr. McFall), the Chairman of the Treasury Select Committee, was a big enough man to admit that there is a very serious problem in pension funds in this country. The £5 billion pensions tax is at the bottom of it.
    It is not the only cause. The international collapse in stock markets, which happened in parallel with the process that I have described, has done damage as well, but there is a very big "made in Britain" component in the pensions crash. One of the most obvious solutions is to try and find a way to reduce spending without damaging public services, so that some of the money can be given back to the pension funds. Unless that happens, it will be almost impossible for the funds to narrow the gap between assets and liabilities, and for the stock market to make the full recovery that we desperately need it to make if our great pensions success is to be preserved for another generation.
    I should have thought that the Chancellor of the Exchequer would be deeply ashamed of the single fact that my right hon. Friend the Member for Chingford

    309
    and Woodford Green (Mr. Duncan Smith), the Leader of the Opposition, brought forward on this issue. That is, that many people will now retire on half the pension that they expected, and on half the pension that they would have earned from their pension fund if they had retired in the final year of a Conservative Government.
    That too is the price of this Chancellor of the Exchequer. He has been on watch for almost six years, and in the latter part of that period the pensions funds have collapsed. That has the real and immediate consequence that many people retiring now are not getting as much pension as previously. The even worse consequence for members of many of the schemes that continue is that they are being told that they will either have to pay a higher contribution or get smaller benefits. However, in probably as many as half the total number of cases, people are being told that their pension fund is being shut down, and that they no longer have the opportunity afforded to the previous generation to make a contribution, to receive an employer's contribution, and to look forward to a decent pension in the future.
    After the two disasters of the telecoms tax and the telecoms boom and bust, and the pensions tax and the pensions boom and bust, it is heroic of the Chancellor to settle this time on a tax on jobs. Labour Members must understand that the imposition of a very large tax on jobs in the form of the increases in employer and employee contributions, hitting this month, will have a serious impact on the number of surviving jobs. One would have thought that the 300 jobs a day that have gone in manufacturing for every day of this Government so far would have warned the Chancellor, but no. The jobs that are most vulnerable to the Chancellor's jobs tax are those in companies that are not earning good margins, are struggling, are loss-making, or do not pay particularly good wages. Those companies cannot afford such an imposition. The biggest danger of the tax on jobs is that it will destroy many more jobs in manufacturing. I hope that jobs will be created elsewhere to offset some of that impact, as has happened in recent months. However, most of the jobs that are being generated at the moment are in the public sector. The Government are destroying the productive jobs in companies that used to pay their way and pay taxes, and creating jobs in the public sector that unfortunately do not reach the right areas or deliver the improved services that we all desperately want.
    The hon. Member for Dumbarton rightly said that we have a big productivity problem. The Chancellor has spent six years lecturing the private sector on how it should raise productivity. He has spent six years imposing targets, interventions, directives, warm words and cold words on the public service, but he has not yet got anywhere near to creating higher productivity in the public service. We have a productivity-destroying machine called taxation and public spending. We take money away from the productive sectors that could invest and create new jobs if they kept it, and tip it down the drain on the wrong kind of public service spending, even succeeding in lowering productivity there in the process. On both sides of the account, we are doing damage to our productivity record at a time when the Chancellor rightly points out that we are still well
    310
    behind some of our leading competitors, particularly the United States of America, and when we should be reinforcing success by leaving the money to a greater extent in the private sector, which could invest in the new technologies and new jobs that we need.
    Mr. Bercow: My right hon. Friend referred to the inadequacy and deterioration of public services. Does he agree that for the Government to fail to meet targets for the public services that were set by independent experts would be disappointing, but for them to fail to meet their own targets—notably, but not exclusively, on literacy, numeracy and truancy—requires incompetence on a truly spectacular scale?
    Mr. Redwood: My hon. Friend is absolutely right. Meeting targets for numeracy clearly challenges the Chancellor himself, because practically all the numbers that he put into last year's Budget documents were works of fiction. He will need a refresher course in numeracy, and I hope that the Education Secretary is working on that as a priority. Having had a quick look at the Chancellor's Red Book today, I suspect that he still has not learnt to be as numerate as he should be, and I have a nasty feeling that his productivity figures and growth figures will prove too optimistic, and that therefore his borrowing figures and tax revenue figures will prove too optimistic. This Chancellor of 53 tax increases will prove that the more one taxes, the less one raises.
    Mr. Stephen O'Brien: My right hon. Friend may not have had a chance to see all the associated documents that go with the Red Book, which include a so-called discussion document entitled "Public services: meeting the productivity challenge". It seems that the Chancellor has just woken up to the fact that he has spent the money, but did not get the reform, and that no wonder productivity is collapsing.
    Mr. Redwood: My hon. Friend moves me on to the penultimate section of my speech. What should be done about the dilemma in which the Chancellor finds himself? The vital issue is that of public service reform. My right hon. Friend the Leader of the Opposition is right: we do not begrudge money if it is well spent in the public services, but we think that it is absurd to take so much money and tip it into the wrong areas without first reforming the services to ensure that it is likely to be well spent.
    Hon. Members will be pleased to know that I cannot go into detail on all the services today. However, the general theme that I would recommend to the Chancellor is one that is more beloved of the Prime Minister than of his own Treasury—that is, that he should trust local management and the choices made by users of services rather more, and that he should start to dismantle the huge bureaucracy that he has created nationally, regionally and in the principal councils to try to monitor, regulate, overrule and interfere in public service management on the ground. Extra money needs to be spent in hospitals on nurses and doctors and in schools on teachers and the equipment that they need to teach; far less needs to be spent on all the intermediate levels between Ministers and those operating units; and we need to trust patients and parents far more by giving them real choice.

    311
    If I could sum it up in a single phrase that should certainly appeal to Blairites in the Labour party, if not to other members, we need to back choices for people who cannot afford choices. I do not want to live in a world where those who are very rich can buy themselves all the best possible health care, when they need it and of the kind that they want, and can pay for a really superb school at a very high price out of their taxed income, but where everyone else has nothing like that degree of choice in getting the health care that they need, when they need it, or schooling of the quality that they want.
    I want people in my constituency who are on more modest incomes than those who send their sons to Eton or go to the best private hospital to have a real chance of access to a high-quality school of their choice, where all or most of the money is supplied by the state—all of it if they want a free place, or most of it if they are prepared to pay a top-up fee. I want real choice, and I want it to give those who live in the middle of London or the middle of Birmingham the same life chances as those who live in the better suburbs and shires where there are really good schools and hospitals—they do exist in some places.
    We all need that greater choice and we all need far more capacity in the health and transport systems. Transport is a good example of where we could achieve a great deal in expanding rail capacity and road capacity if we really used the private sector. People are used to paying for their transport, and it can be financed entirely privately. We do not want expensive public-private partnerships and private finance initiatives, which deliver too much risk to the taxpayer and too little money to the service itself. The Government should have the courage of some of their convictions and let the private sector do far more to relieve the taxpayer of the enormous burden of tipping huge sums of money down the drain on to Network Rail and finding that the railway system is worse a year after the partial renationalisation than it was before.
    My final point is that the Government's overall economic strategy is going disastrously wrong. The course that they must adopt is one that reins in wasteful spending so that they have to borrow less, and starts to deal with the very damaging tax rises that they have imposed, which are now reaching the point whereby they will stop the growth in revenue that the country so desperately needs. It will be difficult, because the well-managed and strongly performing economy of the late 1990s has been badly gummed up by too much tax, too much regulation and some very foolish public spending priorities, but not impossible. Billions of pounds are being wasted on areas such as Network Rail, the quango world and regional government. A civil service of 500,000-plus is far too big. The Government should get a grip and start to reduce those expenditures so that they have some leeway.
    If the Government decide not to bother about that and to believe the bizarre and over-optimistic forecasts and figures in the Chancellor's Budget documents, we will get into a difficult pickle. Productivity will not grow in the way that is wanted; public services will not respond to the patient or the parent, because they will not be allowed to; there will not be the improvements that we want; and there will be no real choice. Public services will get a lot dearer, but will not deliver. The private sector will be starved of more and more cash and
    312
    will not be able to make the investment that is required, which will limit the growth of the productive economy. That, in turn, will cut the tax base in future. "Fifty-three tax rises" will be written on the tomb of this Chancellor unless he stays in office for long enough to impose the extra ones that his Budget will require when the money runs out in the not-too-distant future. This is a Chancellor of tax and waste; a Chancellor of boom and bust; a Chancellor of fiddled figures. This is a Budget that we should vote against.
    2.59 pm
    Mr. James Plaskitt: It all sounds very woeful in Wokingham; the situation feels very different in my constituency.
    In the run-up to the Budget I have spent a fair amount of time taking the pulse of the Warwick, Leamington and south Warwickshire area. In the past three months, I have visited more than 20 companies in my constituency. I have spoken at length with the chambers of commerce, the Federation of Small Businesses, the Engineering Employers Federation and some of the intermediate bodies that the right hon. Member for Wokingham (Mr. Redwood) mentioned and disparaged so much—for example, Advantage West Midlands, our regional development agency, and the local learning and skills council. Between them, I have been sounding out a good cross-section of business opinion.
    I have spoken to sole traders, small and medium-sized enterprises, medium-sized firms and local firms that are part of global companies. I have also spoken to a mix of manufacturing and service companies. Within manufacturing, I have spoken to different types of businesses—lower as well as higher technology. In my constituency, the car industry is a strong presence—both design and build and also component supply. By taking all that on board, I have had a good opportunity to take the pulse of the economy in the west midlands. It has given me a platform from which to assess whether the Chancellor's handling of the economy in general and the particular measures he described today are responding to the needs of the business sector as I hear them in my constituency.
    In my discussions with those companies, three main issues have emerged as important to them. First, they stress the importance of maintaining underlying economic stability. They made an extensive number of points on the tax and red-tape issues that are of great importance to Conservative Members—they are also important to companies in my constituency and I shall deal with them in a moment. All the companies said, however, that tax and red-tape grumbles and issues pale into insignificance when set alongside the damage that would be done if the economy turned into recession. They recall previous recessions and the damage that they did to their companies. Recessions drove companies out of existence in my constituency and caused unemployment to soar—today, it is running at 1.5 per cent. which is a different story from what it was 10, 15 or 20 years ago.
    All my companies say that the most important thing that the Government can do is to maintain economic stability. They say that they will have arguments with us about other things that are happening, but above all, they tell us to maintain economic stability. So they are

    313
    impressed with the Government's record on that central point—the fact that we have had positive gross domestic product growth for every quarter since the Labour Government have been responsible for managing the economy.
    Last year, our growth was bettered only by the United States and Canada. Our growth forecasts are now running well ahead of those in Euroland. As an economy, we are well placed to cope with the global slowdown. We have low interest rates, low inflation and stable public finance. Given that background and in those circumstances, it is prudent and sensible now to borrow to support economic activity; not to borrow at irrational or dangerous levels—we are not going anywhere near the 8 per cent. of GDP recorded under the Conservative Government—and the borrowing levels envisaged in the Chancellor's statement do not even reach 3 per cent. of GDP.
    Businesses recognise that that is a sensible way to manage public finances. It is the right posture to adopt towards public finances during this global dip. They are telling me and the Government, "Maintain that economic stability." It is crucial for maintaining the United Kingdom's favourable performance against so many other countries—many of the crucial investment decisions made for companies in my constituency, which affect my constituents, are made abroad, not in this country, by the foreign owners of those companies. The United Kingdom as a place for investment is judged against rival locations and capital is now highly mobile. Therefore maintaining the competitiveness and strength of our economy is important.
    Norman Lamb: I wonder whether those companies have said anything to the hon. Gentleman about why the United Kingdom's share of inward investment into Europe has fallen so substantially as compared with the rest of Europe.
    Mr. Plaskitt: Of course, we have had extensive discussions on that subject, but as I think the hon. Gentleman knows from our examinations of it on the Treasury Committee, those figures are largely influenced by the flows of merger and acquisition activity, which can be very volatile. He is right to say that there has been a dip in the proportion of foreign development investment that has come to the United Kingdom in the past two years. The figures change erratically from year to year. It would not be wise to draw inferences from two years' figures; we should look at the wider picture.
    It is worth reminding the House of the recent report published by the Society of Motor Manufacturers and Traders Limited, "Strengthening the Supply Chain", which reminds us of the importance of the auto supply chain to the economy: 7,000 businesses, 140,000 jobs and half the businesses are small and medium-sized enterprises. The report points out that that sector is going through tough trading conditions at the moment because of the global downturn. It also emphasises the strength of the car industry in the United Kingdom. Each year during the 1980s, 1 million cars were built here on average, 1.5 million were built here in 2001, and
    314
    the industry confidently expects that 2 million will be constructed here by 2005. It is worth quoting the report, which says:
    "The comparatively strong performance of the UK economy and its relative stability provide an advantage for UK based operations and continues to offer an attractive proposition for potential inward investors."
    That statement is also backed up by the latest KPMG study, "Competitive Alternatives", which ranks the United Kingdom as the second lowest cost base after Canada and 13 per cent. better than the United States of America. That study is based on labour costs, business taxes and transport, energy, land, construction and leasing costs. It is the most comprehensive assessment of all the costs that business faces. KPMG is pointing out that the United Kingdom is the second best country among all those that it has surveyed. That is extremely important for the auto component industry.
    The report also mentions some significant challenges that the industry faces. It looks to Government for a response on three challenges in particular: the need to do more to support apprenticeships; a single entry port for Government business support programmes; and more progress in achieving a low-carbon economy. I shall deal with all those in a moment, but the report also places great emphasis on, and calls the Government to do something about, ending the uncertainty over the euro. When I discussed that subject with businesses in my constituency, I found that their opinions were mixed. Some are not particularly interested in being in or out, some are desperately keen for us to get in, and some are opposed to entry. Irrespective of their position, however, they are all saying, "For goodness' sake, let's know where we are going on this." The SMMT report has this to say on the subject:
    "uncertainty about UK entry into the single currency also increases the risks associated with new investment. The government must move speedily towards a decision on membership of the single currency".
    So I was pleased to hear the Chancellor say that he will be pronouncing on the five tests before the beginning of June. For many companies in my constituency, that statement may be more important than anything else he said in his Budget speech. I look forward to hearing that announcement.
    The second important area that companies in my constituency have been raising with me is the need to drive up productivity and close the skills gap. The Chancellor mentioned that in his statement today. There are disappointing factors in the UK's productivity performance, but it is encouraging to hear that the gaps are narrowing between us and some of our competitors, although there is still a significant gap between us and the United States.
    I have asked many of my local companies for their views on productivity. Interestingly, many of them feel that their own company is doing all right and that there is no problem. They think that the fundamentals for eventual productivity improvement are in place. As my hon. Friend the Member for Dumbarton (Mr. McFall) said earlier, there is no doubt that our success in bringing more people into economic activity and in reaching historically high levels of such activity means that the improvement in productivity will be delayed. When the labour force is enlarged, increased

    315
    productivity tends to follow. That was the experience in the United States and it is likely to be the same in this country.
    There are also significant productivity gaps between the UK regions. The Treasury Committee, on which I serve, is investigating that and I hope that we can contribute to a fuller understanding of why those regional variations exist and why they have been so persistent. However, those variations confirm the need for an adaptive policy response in the regions, so I welcome what the Chancellor said about devolving some decisions on the local economy further down the scale and giving regional development agencies more freedoms. Those agencies are themselves devolving some matters to sub-regions, which is an important development.
    I welcome the Chancellor's statement that there will be greater access to capital, new investment vehicles for small companies and further improvements to the research and development tax credit. Devolving employment policies to local job centres is also extremely good news.
    Some of my local companies mentioned the skills problem. Many local firms have considerable difficulty with recruitment. The labour market is tight throughout Warwickshire; unemployment is 1.5 per cent. in my constituency so, unsurprisingly, recruitment is a problem. That is especially true for manufacturing companies where, to some extent, there is an image problem. School leavers and people in further and higher education tend not to be drawn to engineering careers.
    Schools and further and higher education institutions should strengthen their links with engineering and manufacturing companies. Both sides should come together to make young people aware of the exciting and innovative things that are happening in our many successful manufacturing and engineering enterprises. Young people are not aware of them, so it is not surprising that they are not drawn to a career in that sector. The introduction of entrepreneurship in the curriculum is welcome and I hope that it will include advocacy of our remarkable engineering successes and the stimulating career opportunities that exist.
    Companies want an expansion of modern apprenticeships. I am pleased that the Chancellor envisages that 320,000 of them will be up and running by 2006. Strong links with universities are important for manufacturing companies. They work well in my area, where many local companies have good links with both Warwick and Coventry universities. There is strong collaboration in terms of courses run by the universities and in the products manufactured by the companies.
    Tax and red tape issues are certainly raised by companies in my constituency, but the particular points they make are of interest. Of course, no one would expect companies to be enthusiastic about the increase in national insurance that they faced and which is now in place, but they recognise that the overall corporate tax burden is reasonable. It is instructive to note the latest figures from the Organisation for Economic Co-operation and Development on that point. Total business taxes as a percentage of UK gross domestic product are 7.2 per cent.—the third best in the European Union. The comparable figure for Germany is 9.1 per
    316
    cent. and in France it is 14.5 per cent. Total business taxes as a percentage of total taxation are 19.2 per cent. in the UK, making us the second best in the EU. Furthermore, the figure is lower than that for the United States of America.
    Mr. Andrew Tyrie: Does the hon. Gentleman agree that it is more important to look at the total tax burden? After all, directly or indirectly, firms end up paying for that and it is reflected in labour costs.
    Mr. Plaskitt: But the firms I talked to look at the overall picture, as the hon. Gentleman encourages me to do. I talked to them about the impact of national insurance and the overall level of business tax in the economy and the comparisons with our competitor countries—the comparisons are favourable. They point out that although there are some tax increases for business there are also some offsetting benefits owing to our success in managing the economy. They enjoy the benefits of lower interest rates and of the reforms that we introduced to VAT and accounting. Indeed, today, my right hon. Friend the Chancellor has added more benefits and more cost reductions for small firms.
    Most companies were prepared to accept that the higher level of national insurance would be okay provided it was spent well—a point that we heard from the Opposition. Firms realise that the costs to employers of either private or social insurance-based systems are rising much more steeply elsewhere; for example, the cost burden imposed on French or German companies as they grapple with their public service problems is rising much faster than in this country. Firms that are part of a global operation are very aware of that.
    I am pleased that firms do not consider only the tax bill; they are also asking what they are getting for their taxes—rightly so. Firms which have problems with recruitment and the skills base welcome the fact that we are investing extra money in the education system as that will help them to address the skills shortfall. They welcome the extra investment in transport. The right hon. Member for Wokingham denounced our transport system, but there have been significant improvements in the local transport network in and around my constituency. There are major road schemes and distinct improvements have been made to the rail link with London. Those significant investments are all welcomed by businesses in my constituency. They realise that there can be no extra funding for the transport system unless they contribute through taxation.
    Companies also acknowledge the benefits to them of higher Government capital investment under the Labour Administration. Many of them have won contracts related to that investment. They are watching how the Government spend the money and assessing the degree to which it benefits industry, and they see that it does.
    Companies frequently raise the issue of red tape—frequently. [Interruption.] I am not surprised to hear approving murmurs from the Opposition Benches. When companies raise the issue of red tape, however, they are not talking about the 4,000 or 5,000 new regulations introduced each year to which Opposition Members often refer. In fact, only 3 per cent. of those regulations attract any business costs; most of them are local transport or electoral measures and have nothing to do with companies.

    317
    What are the red tape issues that firms raise with me? At the top of the list are employment tribunals. Companies face increasing costs and time commitments and sharply increased lawyers' bills as they wrestle with increased numbers of tribunal cases. They want reform of the employment tribunal system and are anxious to know what will result from the Government's recent statements on the matter. They agree with the thrust of the reforms that the Government are trying to initiate: encouraging the resolution of disputes within firms before they even reach a tribunal; trying to spread the cost of liabilities so that they do not fall exclusively on companies; and discouraging frivolous claims. I believe that we should expect further Government announcements on the current investigations into the reform of tribunals, and the companies in my constituency are anxious to find out whether that reform will be the sort that they would like to see.
    Another red tape issue raised is the regulations coming from the Financial Services Authority. Many of the companies in my constituency take the view that the FSA is now producing over-elaborate regulations, and they want us to get the balance right. Again, we will be happy to take up that challenge in the Treasury Committee, and we look forward to putting some of those points to the FSA's new chief executive to find out whether the response is the one that business would like to hear.
    The difficulty of gaining access to Government business support schemes also appears under the heading of red tape. Undoubtedly, business would very much welcome it if we could evolve a single port of entry for the array of schemes that exist. Companies that have managed to gain access to the schemes have greatly appreciated them. They have done a number of very good things for a large number of companies in my constituency, but the time commitment in gaining access to them and understanding their criteria and complexity has deterred many businesses from coming forward and taking up the advantages that undoubtedly exist. So I urge the Government to consider creating a single access port for many of those schemes.
    Finally, insurance costs come under the red tape heading. There is no doubt at all that many companies face a very steep increase in insurance costs, especially for liability insurance. Again, they are pleased that the Office of Fair Trading and the Department for Work and Pensions are looking into the workings of the insurance industry, and they eagerly await the outcome of those investigations. Those costs are undoubtedly rising sharply, and companies are looking to us to respond and to try to help them.
    In summary, that survey of businesses in my constituency shows that they very much welcome the way that the economy has been managed and the Government's responsiveness. They have additional needs and problems, which they are putting to us, and I look forward to the Government's response to those issues in due course. As I say, top of their list is their appreciation of the fact that we remain one of the best performing economies in the G7. They appreciate the fact that we are managing public finances very soundly. They, along with my constituents, appreciate that we are on track to deliver both a strong economy and social
    318
    justice; and they, as companies, have just as much interest in that as any of my constituents, so I commend the Budget statement.
    3.22 pm
    Mr. Stephen Dorrell: I begin by declaring an interest as a director and shareholder of a manufacturing business—a subject that has cropped up during the debate.
    The big story about the Budget and the Chancellor's record in office is that he has been an almost unprecedentedly lucky Chancellor whose luck is now clearly and demonstrably running out. The reason why I think that he was lucky is that he inherited a set of circumstances in 1997 that he himself described today as being a key element in the record for which he is responsible. After all, he stressed in his Budget statement today the importance of the fact that he has been able to build his record as Chancellor on—to use his words—the foundation of low inflation.
    I concede, of course, that the establishment of the independent MPC was a decision taken by Labour in 1997, but what the MPC has done is to consolidate the essential discipline of low inflation that was put in place despite huge opposition from Labour during the Conservative years. So the Chancellor was right to stress the importance of low inflation as the essential foundation on which economic success can be built.
    Later in the Budget statement, the Chancellor also stressed the importance of flexible markets. He lovingly went through the importance of flexible labour markets, flexible markets for goods, flexible markets for services and markets able to respond to customers. He made the point that our markets in this country are more flexible than most equivalent markets elsewhere in Europe, and he made the point further that we are still less flexible than the United States.
    I look forward to the day when a British Chancellor and his supporters, instead of saying, "Well, of course we are not as good as the United States, but we're better than Europe", will start to say, "We're well ahead of Europe and our objective is to make our markets as flexible, as competitive and as successful as the American domestic and international markets." All of that was clear in the Chancellor's rhetoric today. If we are to build a successful economy in this country, we have to recognise the importance of those essential disciplines—sound money and flexible markets.
    The problem with the Chancellor's record and the reason why I believe that his luck is now demonstrably running out is that, whereas the importance of those messages is increasingly understood elsewhere in Europe, where the drive is to lower taxes and to make markets more flexible, we in this country are marching resolutely in the other direction. The Government use the rhetoric of the importance of flexible markets, but they make decisions at every step to introduce new elements of red tape and new regulatory burdens, furring up the flexible markets to which they claim to attach importance.
    Furthermore, the central problem with the Budget is that the Government are not only re-imposing regulation on the economy when our European competitors are looking for ways to remove it, but increasing the tax burden when our European

    319
    competitors are understanding the importance of the excessive tax burden that they suffer, which is holding back their economies. So the core problem with the Budget as the Chancellor presented it today is that the public finances that he is asking the House to endorse for the years ahead demonstrate the fact that, although he recognises all the stuff about flexible markets, disciplined public finances and so forth, he is undermining by his actions precisely the thing to which he says he attaches great importance.
    To highlight the central problem of the public finances, I want to draw the attention of the House to two aspects of the borrowing figures that the Chancellor announced today. First, I remind the House that, two years ago, when the Chancellor projected borrowing for the financial year just started, he said that it would be £10 billion. Since then, he has imposed an extra £8 billion in tax this year, so the equivalent figure should have been £2 billion. He was projecting that the figure for this year would be £10 billion, but he has since put an extra £8 billion into the revenue side of the account for this year. So. everything else unchanged, his projected borrowing for the current year would have been £2 billion. His actual figure is £27 billion—so two years and £25 billion out. That is material mistake.
    Mr. Howard Flight: £35 billion.
    Mr. Dorrell: Sorry, £35 billion. That is also a material mistake. The Chancellor is £35 billion out.
    Mr. Redwood: My right hon. Friend was right first time.
    Mr. Peter Luff: I think that he was, too.
    Mr. Dorrell: Yes, I was right first time.
    I want to draw the attention of the House to a second set of figures. The House will remember that the Chancellor read out a string of numbers that he clearly did not want us to understand the significance of. The string of numbers was for projected borrowing over the next five years. I am not absolutely certain of the numbers because he read them so fast that I could not write them down—I do not do shorthand—but I think that they were 27, 24, 23, 22 and 22. The important point that the House was supposed to take on board was that they showed a downward trend, albeit a marginal one. The House's reaction to the numbers might have been slightly different if the Chancellor had instead read out the Institute for Fiscal Studies' figures for the same period. Its projected figures are 25, 28, 31 and 35. If independent forecasters suggest—
    Mr. Plaskitt: One of them.
    Mr. Dorrell: It is the consensus of independent forecasters. If the hon. Gentleman wants to set himself up as an expert witness to argue the case against the IFS before some committee, I shall be in the audience. I would want to witness such a blood sport. The Chancellor is engaging in wishful thinking.
    Mr. Barry Gardiner: Does the right hon. Gentleman acknowledge that the IFS goes on to say that it expects
    "the government to overachieve the golden rule over the current cycle by around £31 billion"?
    Mr. Dorrell: I am trying to focus the minds of hon. Members on the question of whether borrowing will go down, as the Chancellor projects, or up, as the IFS projects. Given the Chancellor's track record on forecasting and the fact that one of his forecasts was £25 billion out over two years, it is likely that he will not deliver his objective of achieving a declining trend in total cash borrowing during the period of the forecast unless he takes further action. I shall explain why that is likely in a moment.
    Mr. David Laws: Does the right hon. Gentleman agree that we need not rely on only the IFS? We could rely on the Treasury's published average of all independent forecasts, which forecasts £31 billion of borrowing in 2004–05.
    Mr. Dorrell: The hon. Gentleman is entirely right. I thought about using that figure when I was considering what to say because it is an independent figure. I wanted to draw the House's attention to figures from the IFS because it has published a run of forecasts over four years, which is comparable with that reported by the Chancellor today. The consensus and the IFS forecast suggest that the underlying position of the public finances is unstable and that borrowing continues to have an upward trend, despite the Chancellor's attempt to give the opposite impression this afternoon.
    Mr. Love: Assuming that the figures produced by the IFS are correct—a big assumption given the difficulties of forecasting—does the right hon. Gentleman believe that we must take corrective action, and should that be to increase taxes or to reduce public expenditure? What level of public expenditure does he believe to be consequent on getting public finances back on to a reasonable path to the future?
    Mr. Dorrell: That brings me neatly to an attempt to identify why the public finances are unstable and, by implication, what should be done, as the hon. Gentleman asked. No one should be surprised that independent forecasters think that public finances are unstable, because the Chancellor published figures in the pre-Budget report that show that, in the first three years that he was Chancellor, public expenditure—measured in funny money of constant value pounds—decreased fractionally as a total level of spending. In those three years, expenditure fell by 1 per cent., went up by 0.2 per cent. and then went up by 0.7 per cent. The growth of public expenditure was securely slower than that of the rate of the economy as a whole. In the next two years for which the funny-money number is published, public expenditure started to grow by 4.5 per cent. a year. As we know, the projected figures for the current year and the out years suggest an 8 per cent. cash growth of public expenditure. If the brakes are let off public expenditure to such an extent against the background of slow world trade and disappointing

    321
    growth compared with what was expected, it is hardly surprising that the public finances turn into a deep black hole. That is precisely what is happening.
    The figures that my right hon. Friend the Leader of the Opposition cited in his reply to the Chancellor about growth forecasts might have seemed to be rather dry statistics, but it is not dry statistics to point out that if public expenditure grows by 4.5 per cent. in a year when the economy grows by 1.8 per cent., sooner or later taxes will have to rise. That is simple arithmetic.
    Mr. Flight: Surely the point is that not only is borrowing rising, but, as this year's Red Book shows, taxation is going up by £27 billion.
    Mr. Dorrell: Borrowing is rising despite the huge increase in tax revenues. Some of that can be attributed to the national insurance increase—the £8 billion extra tax on jobs—that started at the beginning of this financial year. Incidentally, that increase was justified in last year's Budget as being necessary to fund health expenditure and we were invited to debate the benefits of spending extra tax revenue on health. Hon. Members should remember that only £2.4 billion of the £8 billion is for the national health service, while £5.6 billion is for elsewhere. The debate about health was not relevant to the debate about the £8 billion tax increase that was announced last year.
    The fact of the matter is that expenditure is rising faster than any likely outturn from economic growth, which is why the Chancellor is playing fast and loose with the projections of growth that he publishes annually. He told us today that the outlook for growth in 2003 is 2.25 per cent.—between 2 and 2.5 per cent. That is a whole percentage point less than he predicted at this time last year. For what it is worth, the consensus forecast is that even the reduced level will not be met. We are being asked to believe that the forecast that the Chancellor published a year ago for next year was too cautious, so he has improved it for 2004. Why? Because if he did not, he would be unable to publish the figures of projected declines in borrowing.
    The Chancellor is grappling with an economy that is not growing fast enough to meet the public expenditure ambitions to which he has committed himself before his colleagues, and he is trying to assure the electorate that they can be delivered without increases in taxation. That is why I describe the situation as unstable. In truth, we have gone back to planning the public finances on the basis of a wish list.
    I started by drawing attention to some of the disciplines that the Chancellor praises—disciplines without which he will never deliver successful economic management. One of the most basic disciplines is that one draws up the forecast before deciding the expenditure plan; it is not possible to draw up the expenditure plan and make the forecast fit. I do not often agree with much of what the leader of the Liberal Democrats says, but I agreed strongly with his opening comment. He said that on this Budget the Chancellor had shut his eyes and hoped for the best. That is exactly right. We are committing ourselves to a set of spending
    322
    plans and the only way in which they can be made to work is by making the forecasts fit the plans rather than making the plans fit the forecasts.
    It is right to remind ourselves of the claim that new Labour made to be different from old Labour. We were asked to believe that the old ways of tax and spend were no longer the instinct of the Labour party—that somehow things in the future would be different. But the Government are reverting to type. We do not need to look into a crystal ball to see what the effects of that will be on the economy. Prudence is dead and has been replaced by Heath Robinson improvisation. The situation will continue to get worse, as it has over the past 12 months, unless there is an outbreak of realism in Great George street.
    3.40 pm
    Rob Marris: It is interesting to follow the right hon. Member for Charnwood (Mr. Dorrell), because I too want to begin with borrowing, as several right hon. and hon. Members have done. Many hon. Members may know that I lived in Canada for a number of years and I follow events there quite closely. The debate in Canada on the federal Government's level of borrowing started 10 years ago and has largely worked its way through the system. I am delighted that we are discussing it, but I note that the approach of Opposition Members is to look for doom and gloom. I appreciate that that is the official Opposition's role, but given that average household income has increased by 3.5 per cent. in real terms every year for six years, it is surprising to hear them talk about the economy as though it is in rack and ruin.
    Mr. Tyrie: I got a bit of a shock when the hon. Gentleman began by suggesting that we should look to Canada. Its level of borrowing, both at provincial and national level, has been out of control for ages. Partly as a consequence of that, the gap between its GDP per capita and that of the United States has widened markedly over the past decade.
    Rob Marris: We are here to debate matters relating to the United Kingdom. However, the hon. Gentleman is not correct. The forecast for economic growth in Canada is higher than in other G7 countries apart from the UK. All economists in Canada would agree that its federal debt has been markedly reduced and is well under control. He would not find a single reputable Canadian economist who would say that federal Government debt was out of control. Economists might have said that five years ago, but they would not say it now.
    The right hon. Member for Charnwood implied that the Chancellor fudged the figures on borrowing. Of course borrowing will increase. Table C5 on page 254 of the Red Book sets out the end-of-year public sector net debt as a percentage of GDP. It will be 32.2 per cent. in 2004; 32.7 per cent. in 2005; 33.2 per cent. in 2006; and 33.5 per cent. in 2007. That trend is rising very slowly. It is not a fast rise or fudge. It is right that the Government should engage in counter-cyclical spending.

    323
    We must also consider the history of the official Opposition. On public borrowing, the national debt doubled in the five years of the Conservative Government between 1992 and 1997. When Labour took over in 1997, national debt as a proportion of GDP was, from memory, about 46 per cent. The figures that I quoted are in the low 30s and not climbing markedly. Labour Members need take no lessons from Conservative Members about the difficulties of borrowing and the public debt.
    Mr. Tyrie: If the hon. Gentleman looks up the figures for the 18 years of Conservative government, he will find that the British economy was just about the only one that succeeded in reducing its debt stock as a proportion of GDP. All other major industrialised countries saw sharp rises, which was a remarkable achievement. Only by picking the arbitrary period of the last five years can he make his point.
    Rob Marris: I am afraid that I must again disagree with the hon. Gentleman. It was not an arbitrary period. What happened was that, for their first 13 years in office, the Conservative Government sold the family silver to cook the books. When they ran out of silver, they had to borrow massive sums to try to balance the books. That is the history, and it is why borrowing doubled.
    David Taylor: I am listening carefully to my hon. Friend's analysis of the trend in Government borrowing. Does he accept that one of the Major Government's responses when their public borrowing got out of control was to introduce the concept of the private finance initiative and the public-private partnership? Given the borrowing levels under the current Government, does he agree that further expansion of PFI and PPP is not only wrong and flawed but absolutely unnecessary?
    Rob Marris: I would not agree with all the adjectives that my hon. Friend uses, but I do have grave concerns about the PFI, as he knows. Public borrowing, in which the Government continue to engage—and rightly so, as it is counter-cyclical—is quite reasonable. The Organisation for Economic Co-operation and Development estimates show that the United States of America, France and Germany have public debt of around 60 per cent. of GDP, and Italy and Japan have public debt of more than 100 per cent. of GDP, while we are talking about public debt of 33 per cent. in round terms—32.2 per cent., I think, in this financial year. It is not exactly a cascade of debt.
    Mr. Flight: In focusing on the level of Government borrowing, does the hon. Gentleman agree that everyone should be aware that something of the order of £100 billion is off balance sheet, covering all the PFI liabilities, Network Rail and other obligations?
    Rob Marris: I am aware of that figure, as are all right hon. and hon. Members. Interestingly, that brings me neatly to my next point, which is based on something that the hon. Member for Arundel and South Downs (Mr. Flight) has rightly and widely been quoted on: the 20 per cent. cut, which Labour Members often say the official Opposition are considering. Last Thursday in a
    324
    Statutory Instrument Committee, I raised the issue in response to a comment by the hon. Member for North Wiltshire (Mr. Gray):
    "His party talks about a 20 per cent. cut in spending across Government, but he has put forward three points, and adverts to a fourth, all of which would involve increased spending."
    The hon. Gentleman, who is a Conservative Front-Bench spokesman, intervened on me and, in his usual rapid way, which Members may well know, said:
    "He is also wrong about the Conservative party's proposals. We propose a cut in taxation. At no stage have we proposed a cut in public spending. The two are quite different."—[Official Report, Standing Committee, 3 April 2003; c. 9–10]
    To me, as a non-mathematician, it seems fairly obvious that if there were a cut in taxation but no cut in public spending, borrowing would increase even more under the official Opposition.
    Mr. Flight: If the hon. Gentleman cared to read the interview in The Daily Telegraph on 26 November, he would be entirely clear that the figure of 20 per cent. referred to the scope to cut waste in government. He may he aware of certain reports by his Government as to a scope of some 20 per cent. to cut excessive administrative costs in health care. I am therefore surprised that he should be misled by his party's propaganda. The issue is how much can be saved by more efficient government. Whether that should be spent on better and more front-line delivery or on cutting taxes is a separate judgment.
    Rob Marris: It is no surprise that the hon. Gentleman thinks that I have been misled: I might even use that verb in relation to the remarks of the right hon. Member for Wokingham (Mr. Redwood), who talked about the hon. Gentleman wishing to cut overheads; now we hear that it is about cutting waste. I hope that the official Opposition make up their minds about what 20 per cent. is being cut from and when, so that we can have a clearer public debate. As ever, the Opposition are all over the map on this issue. It is time that they got their act together.
    Mr. Laws: Does the hon. Gentleman support or oppose cutting capital expenditure now?
    Rob Marris: It is not wise to get into what we should do with capital expenditure but, as I said before, counter-cyclical measures are needed. I would certainly wish to maintain capital spending.
    Mr. Laws: If that is the hon. Gentleman's position, can he explain why the Chancellor, without apparently announcing it in the Budget statement, has decided to abolish the capital modernisation fund, thereby cutting capital expenditure by more than £3 billion?
    Rob Marris: I am not the Chancellor of the Exchequer, and have no aspirations to hold that post. In my right hon. Friend the Member for Dunfermline, East (Mr. Brown) we have a Chancellor of the Exchequer who is doing an excellent job, and I suggest that the hon. Gentleman put that question to him.
    As for public spending, we must acknowledge that business wants infrastructural spending. It is simply not true that the agenda of business is all about cutting taxes

    325
    and being lean and mean in the public sector. In a document produced for the west midlands, my own region, the CBI—the voice of business—says:
    "And then there is our infrastructure … From hospitals to roads to rail to schools, what business sees is inadequate infrastructure that fails to deliver what a 21st century economy needs … the UK really has little excuse—all it needs is the will and the money."
    That is right—the money has to come from somewhere. It comes from taxpayers and, counter-cyclically, some of it will come from borrowing.
    Lynne Jones: It does not come from just those sources. Surely, it comes from increased revenue, charges that can be made as a result of investment in infrastructure, and other revenue streams such as congestion charges. There is every case for increasing capital expenditure, which is about half what it was in 1992–93 and a fifth of what it was under previous Labour Governments.
    Rob Marris: I agree that revenue-raising measures such as those that my hon. Friend mentions come into the equation, but they are relatively small. I am sure that she would not want to raise revenue, as some in the House would, by imposing charges for the use of hospitals and so on. The money that the Government spend comes principally from taxation.
    I would like to make a few remarks about taxation on business. If cuts in corporation tax are included and if the windfall tax on utilities and pension fund dividend taxation is excluded—I appreciate that those are fairly big ifs—on the CBI's own figures, the total net increase in business tax between 1997 and 2004 is just £3 billion, including national insurance increases. In fact, British business has had £25 billion-worth of tax cuts and tax breaks since 1997, and cuts in corporation tax alone are expected to cost £20 billion by the next financial year, 2004–05.
    To assess what we are getting in return, we have to look at the business tax scenario. We have cut business taxes, but what is the relative position of the United Kingdom and its G7 competitors? I am sure that you have heard many figures today, Mr. Deputy Speaker, and, with your indulgence, I shall take you through some more. In the United States, the top corporate tax rate is 45.2 per cent.; in France, it is 41.7 per cent.; in Japan, 40.9 per cent.; in Germany, 38.9 per cent.; in Canada, 38.6 per cent.; in Italy, 37 per cent.; and in the UK, 30 per cent. Payroll taxes in the United States are 21 per cent.; in France, 32.1 per cent.; in Japan, 16 per cent.; in Germany, 24.4 per cent.; in Canada, 16.4 per cent.; in Italy, 29.9 per cent.; and in the UK, 12.9 per cent. Thus as a percentage of hourly costs, payroll taxes, too, are lower in this country, even with the 1 per cent. national insurance rise that comes into effect this week—my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) adverted to that fact when discussing comparative costs in his thoughtful speech.
    One of the largest private sector employers in my constituency is the American company, Caterpillar, which is based in Peoria, Illinois and owns Turner Powertrain Systems Ltd. The managing director of Turner Powertrain, a wonderful man called Dennis
    326
    Mott, is Caterpillar through and through—his father worked for Caterpillar, Dennis grew up with the company and has worked for it throughout his working life. I asked him what he thought about the 1 per cent. national insurance increase to raise money for the health service. He said, "Well, it doesn't worry me too much. Of course I wish we didn't have it; it is another cost to the business, but when I look at what goes on in the American operation, where we have health care plans and so on for our Caterpillar employees, it is far higher there."
    It might not show up on the inward investment figures, but Turner Powertrain Systems in Wolverhampton, as part of the Caterpillar worldwide empire, is actually getting business in from the plant in North Carolina—I am sure you will forgive me if it is in fact South Carolina, Mr. Deputy Speaker—because, when we look at the totality of labour costs, it is cheaper to do the work in Wolverhampton and the labour force there is more skilled. That is not direct inward investment, but it is jobs coming to my constituency, and investment in the constituency.
    Mr. Dorrell: I would just like to remind the hon. Gentleman that the Chancellor of the Exchequer said today that the American economy was still significantly more flexible, and therefore more competitive, than the British economy. Is the hon. Gentleman now arguing the opposite?
    Rob Marris: The American economy is huge, as all hon. Members know, and there are different flexibilities. The American economy embraces 52 jurisdictions: the 50 states, the District of Columbia, and the Federal Government, who have their own mechanisms, depending on whether something comes under the federal constitution or not. It is a huge and complex economy that is more liberal in some parts and tighter in others, depending on which part one focuses on. All that I would say to the right hon. Gentleman is what the managing director of Turner Powertrain Systems in Wolverhampton tells me, which is that the overall package is better in the United Kingdom for some production—for example, the banana transmission for Caterpillar products—than it is in North Carolina.
    I was quoting some statistics at you a moment ago, Mr. Deputy Speaker. They were taken from the OECD tax database for 2002, the OECD figures for 2002, the US Bureau of Labour statistics for 2002, the Office for National Statistics data for 2002, the European Commission, and the European Union structural indicators for 2002. Those figures relate, so far as they can in terms of comparability between different countries, to the years 2000 and 2001.
    I should like to move on to the point made by my hon. Friend the Member for Warwick and Leamington about red tape. It is a shibboleth of most politicians to say "We want to get rid of red tape", but what counts as red tape varies from one commentator to another. In February, the British Chambers of Commerce put out a report that stated that the cost of new regulations to UK business had "soared" to £20 billion. That is a very large figure in anybody's money, even today, but it is a question of what we call red tape.
    There is a difference between the red tape involved in filling out forms, ticking boxes and so on—which we would very much like to cut down on where we can while

    327
    retaining accountability—and the cost of compliance with regulations, many of which improve the quality of life of working people. Examples of such provisions include extended maternity leave and pay, paid paternity leave, and the minimum wage. If we are to do as the British Chambers of Commerce do and characterise those provisions as red tape, then I am in favour of them. In terms of administrative burdens and form-filling, I have a predisposition to say, "Do we need this?", and we often do, for reasons of accountability.
    Before Bills go through Parliament, the Government produce regulatory impact assessments. The British Chambers of Commerce calculates its figures by looking at those regulatory impact assessments, not at the figures that would be applicable once the Bill has become an Act of Parliament, often having been simplified—as in the case of the legislation on the minimum wage and the working time regulations—so as to cost businesses less. The BCC is not comparing like with like.
    The Department of Trade and Industry has commissioned some research from Kingston university's small business research centre on the effect of the fear of red tape on businesses. It focused particularly on small businesses, which tend to have fewer staff and therefore find such tasks more difficult, often filling in their tax returns round the kitchen table on a Sunday evening, and that sort of thing. The university asked a carefully structured sample of small businesses to list the most important factors affecting their business performance. Only one in six—that is 17 per cent. in round terms—cited regulation. A third of the businesses said that the most important factor that affected their businesses was competition, and a half of them referred to financial issues. Interestingly, about a third of respondents said that employment rights had had a positive effect on running their businesses.
    I salute what my right hon. Friend the Chancellor and his ministerial colleagues, particularly in the Department of Trade and Industry, have been trying to do to encourage manufacturing, which is of particular interest to any west midlands Member, as was evidenced earlier by the speech of my hon. Friend the Member for Warwick and Leamington.
    The Government set up the Manufacturing Advisory Service, which has helped more than 200 companies by giving in-depth consultancy advice. The average added value for those companies is £85,000 a year, and there has been an average improvement in stock turnover of 90 per cent. There has been a work productivity improvement of 30 per cent. and a scrap or wastage reduction of 37 per cent. The service has dealt with 8,500 inquiries to regional centres and has completed more than 1,000 free health checks. Its training events have been attended by 5,500 manufacturing companies.
    Nationally, with £30 million of funding—£15 million from the DTI and £15 million from the regional development agencies—the service has started positively to push forward. It is not epoch making—it is not changing the structure of the economy by having 5,500 companies participating in training events—but it is pushing things forward. I say again that that is particularly important in the west midlands, where about 30 per cent. of the economy depends on manufacturing as opposed to about 17 per cent. in the rest of the United Kingdom.
    328
    The black country chambers of commerce have put out a manufacturing support campaign booklet, which was officially launched at College green, Westminster, two weeks ago today. They wish to put out the message, especially to young people, that manufacturing can be a positive work experience and something to which they should aspire. I am delighted that the Government are redoubling their efforts to increase the number of young people who take up modern apprenticeships. Commission figures indicate that between 1998–2000, the UK manufacturing sector received less direct support than that of any other EU state with the exception of Portugal. The EU index is 100, and Ireland was top with 219. Portugal was at the bottom with 25. The UK stood at 36. Our position has undoubtedly improved since then, but we have a long way to go when it comes to support for manufacturing.
    I am pleased by the announcements in the Budget that the Government will try to foster even more innovation with the British small business investment companies. Venture capital will be put forward and the qualifying threshold will be increased to £20 million, so that 3.7 million businesses will be eligible for 40 per cent. investment allowances. There is the extension by one year of the IT 100 per cent. tax relief until April 2004 and the threshold of £56,000 for value added tax registration.
    I was interested in the amount of paperwork that needs to be completed to set up a business. I hope that we shall be given more detail during the debate, or perhaps it can be found in the hefty bundle of documents with which we have been supplied. My right hon. Friend the Chancellor said this afternoon that 10 years ago an individual needed 28 certificates or pieces of paper to set up a company. He added that the process now takes one week and costs £20. In the rest of the EU, the average times and figures are four weeks and £600, so we have made a step forward. My right hon. Friend the Chancellor is talking about reforming or abolishing 500 regulations, which is a great step forward.
    Business, with the assistance of the Government, should encourage training. It is crazy that there are skills gaps in many constituencies. Jobs are going unfilled and yet there are stubborn pockets of unemployment. I was pleased that my right hon. Friend talked about putting more support into skills training, especially for those who do not have skills at the basic level of GNVQ 2.
    According to a 2002 Department for Education and Skills labour force survey, 29.2 per cent. of employees are never offered training by their employer, but the figure rises to 53.8 per cent. for those with no qualifications. That is an appalling indictment of our system, and the Government must continue to press employers to come on board and increase skills levels. Only by doing so can we increase productivity, which is vital to our economic future.
    4.5 pm
    Tony Baldry: In reference to the last comment from the hon. Member for Wolverhampton, South-West (Rob Marris), a number of other supposed initiatives in relation to training were announced in today's Budget, but I am interested to know how many employers in his constituency have had any contact from the Learning and Skills Council. The Government

    329
    keep introducing more and more initiatives in these areas, but that is no satisfactory replacement for action and delivery on the ground.
    Rob Marris: Will the hon. Gentleman give way?
    Tony Baldry: No, no. I have only just started.
    Rob Marris: The hon. Gentleman asked me a question.
    Tony Baldry: I responded to make it clear that I listened to what the hon. Gentleman had to say and to observe the courtesies of the House.
    I offer a limited welcome to but one part of the Budget—that which relates to international development—and everyone concerned with it would welcome the Government's further contributions to humanitarian aid and reconstruction in Iraq as well as the Chancellor's commitment to the international financing facility in the hope that it will lever in $50 billion a year to finance development. I also welcome his comments on the need to reform the European Union's development budget. However, I express these cautions to him on each of those items.
    On the money for Iraq, we have seen with Afghanistan that the amount required for humanitarian needs has far outstripped earlier estimates. Much of the money pledged by the international community at the Tokyo conference for funding reconstruction in Afghanistan has simply gone on meeting basic humanitarian needs. I suspect that the demands for humanitarian assistance and for reconstructing Iraq are far greater than anyone, including the Chancellor, has contemplated.
    Indeed, during the Select Committee's visit to New York the other day, the United Nations announced a $2.2 billion request for food and non-food aid for Iraq just to get that country through the next six months. That is the largest request ever made by the UN in that regard, and that is before one gets to any question of reconstruction in Iraq. Those who think that that country may be oil rich and that it can meet all those costs itself should remember that, because of the policies of Saddam Hussein and others, Iraq is substantially in debt. So, the Chancellor and the Government must recognise the fact that if Iraq's needs are to be met, that will require the united efforts of the whole international community. I suspect that those efforts would be better harnessed through the co-operation and endorsement of the UN.
    The international financing facility is a brave initiative by the Chancellor, and he is to be congratulated. I genuinely think that he has committed himself to supporting international development, but I caution him that he has yet to persuade many in the G7 and the World Bank that the initiative will work and that it is not just a well-meaning project that will rob Peter to pay Paul. I hope that, this coming weekend, he can convince G7 colleagues not only that the initiative is worth supporting, but that it will work. Unless he can do
    330
    so, it will simply be worked up and used as a line to take, thereby giving the impression that something is being done when things are not being done.
    Lynne Jones: Of course, I agree with the hon. Gentleman that everything that is done to increase investment in developing countries is to be applauded, but has he made an assessment of the international loan facility and how that may differ if rich countries increased the amount of aid that they give to developing countries to the 0.7 per cent. of GDP target?
    Tony Baldry: I do not want to turn this into a debate on financing for development. The reason why the Chancellor made the suggestion is that, as a consequence of the financing for development conference at Monterey, the international community, primarily the United States and the European Union, are committing an extra $12 billion a year for international development. It is welcome as far as it goes but clearly it is not enough and the Chancellor is seeking ways to plug the gap. Even that which is pledged from the United States under the millennium challenge account is pretty conditional. Under good governance rules, not even countries such as India will qualify. The Chancellor's proposal is a worthwhile initiative but the test will come when he tries to convince his colleagues that it is workable. Unless he can convince them that it is, it is simply an initiative, a line to take that gives the impression of doing something but does not deliver. We will have to see this weekend.
    If I were given £1 every time I heard Ministers talking about reforming the common agricultural policy and reforming European Union development policy, I would be a very wealthy man. I continually hear the Secretary of State for International Development and other Ministers, including the Chancellor, talking about reform of European Union development assistance. It is a disgrace that more money goes to a single eastern European country such as Hungary under EU development assistance than goes to the whole of Asia under EU development assistance. It is fine the Chancellor and other Ministers continually mouthing this but there needs to be action. Otherwise, it simply becomes a rather boring catechism.
    It is a Budget of blame, of borrowing, of failed forecasts, of high taxes today and higher borrowing tomorrow. Higher borrowing tomorrow will inevitably lead to even higher taxes the day after tomorrow. The Chancellor tended to blame the military conflict for the UK economy's performance. He seemed to blame quite a lot of people, yet United States companies such as the General Electric Company, which are a barometer for economic performance and Borders, which has many outlets in the UK, suggest that blaming events elsewhere only masks deeper economic problems here. The problem is demonstrated by the Chancellor making up this country's difficulties by more and more borrowing.
    The Chancellor has also blamed the eurozone countries' slower economic growth for today's substantial additions to public borrowing, yet UK productivity is falling further behind not only the United States but Germany and France. Since the Government came to office in 1997, annual growth in productivity as measured by output per worker has averaged just 1.3 per cent., whereas between 1979 and 1997 it averaged 2 per cent.—almost double.

    331
    The Chancellor's Budgets downgrade forecasts time and again. His forecast on UK GDP growth for 2003 was downgraded today for the second time in less than five months. He predicted growth of 3 to 3.5 per cent. in last year's Budget, 2.5 to 3 per cent. in November's pre-Budget report and today it is down to 2 to 2.5 per cent. His central forecast is therefore down by nearly a third from the central 2002 Budget forecast.
    Again, business investment forecasts have been downgraded. In last year's Budget, the Chancellor said that business investment would grow by 5.5 to 6.25 per cent. in 2003. Today the same forecast has been revised down and stands at minus 1.5 per cent. to minus 1 per cent. Today's Budget also confirms that business investment fell by 8 per cent. in 2002. Those figures are all clearly in the Budget statement.
    Manufacturing output has been downgraded again. In last year's Budget statement, the Chancellor said that it would increase by between 2¼ and 2¾ per cent. in 2003. Today the forecast has been revised downwards to between a quarter and three quarters of 1 per cent. The Budget also confirms that manufacturing output fell by 4 per cent. in 2002.
    What we see is the Chancellor seeking to blame others, and a number of failed forecasts. In fact I do not think my constituents, or indeed people anywhere in the country, are particularly interested in who is to blame, and I do not think they now place any trust in the Chancellor's or the Government's forecasts. They rely on what is happening currently. They are concerned about who will help them through the effects of the United Kingdom's increasingly poor productivity and economic performance—and today's Budget does not suggest that it will be the Chancellor.
    Last week The Sunday Times featured an article entitled "Ten ways to safeguard your finances from future attack". We were told
    "Savers are suffering because of the low level of interest rates: even house prices are beginning to look shaky. Today's rise in National Insurance contributions from 10 per cent. to 11 per cent. could not have come at a worse time. The National Insurance bill for someone earning £30,000 a year will rise by £253.72 a year to £2,790.92 … The average Council Tax bill has also risen nearly 13 per cent., taking the typical annual cost above £1,000 for the first time."
    Such stark facts give little comfort to my constituents. They know that they and their neighbours are paying more and more tax, and from this week a typical family will be £568 a year worse off. In areas such as mine there are further difficulties for the average family, who know not just that taxes are increasing but that they face higher house prices. House prices are still rising in Oxfordshire. I was told by two local estate agents yesterday that prices were not falling in the area. That is entirely consistent with the Halifax's survey for the last quarter of 2002, which found that they had risen by an average of £26,000 in Oxfordshire, as against a £4,000 rise in London.
    The consequences are considerable in terms of the delivery of public services, and the impact on those working in the public sector—nurses, teachers and police officers. Many public-sector and low-paid people in north Oxfordshire find it extremely difficult to afford homes, and, ironically, those who have been able to buy them cannot afford even a slight fall in house prices if
    332
    they are not to find themselves with negative equity especially when low interest rates have provided neither group with substantial savings.
    The Budget talks of local pay negotiations in the public sector and the civil service. We shall just have to see how that works out. For years, along with other Oxfordshire Members, I have called for sensible local cost-of-living allowances for public-sector workers. The test will be how much real help the Budget gives nurses, teachers and police officers when it comes to local pay negotiations.
    There was talk in the Budget of 80,000 more nurses. If true, that is welcome news. The Chancellor has made much of investment in the national health service, but I can describe the reality of the NHS in Oxfordshire. The main hospital trust, the Oxford Radcliffe NHS trust—which includes the John Radcliffe in Oxford and the Horton hospital in my constituency—is so overdrawn that it will not admit to the figure, but it is somewhere between £22 million and £50 million this year. Why? Largely because of the cost of employing agency nurses at the John Radcliffe. Nurses cannot afford to work for the NHS in Oxford, and the only way in which the John Radcliffe can recruit them is through agencies. The only way that nurses can afford to work in hospitals is to be employed by agencies. Increasingly, groups of nurses are setting up their own freelance agencies simply so that they can be paid higher rates.
    The result is not better treatment at the John Radcliffe or through the Oxford Radcliffe NHS trust, but the hospital's continually having to dip into the red to afford the nurses that it currently has. I shall be extremely interested to discover how many of these 80,000 so-called extra nurses the Chancellor is able to deliver to hospitals in Oxfordshire in the next few years. However, whether he achieves that will largely depend on whether he has at last woken up to the fact that in counties such as Oxfordshire, where it is expensive to live, a sensible cost-of-living increment is required if people such as nurses, teachers and police officers are to be attracted.
    Not only are people being hit by higher taxes and difficulties with house prices; homeowners and tenants alike are having to pay 12.8 per cent. more in council tax in Oxfordshire, or an extra £100 for a band D house in Cherwell because of a stitched-up local government finance settlement. It could have been worse for residents if Oxfordshire county councillors had not cut investment in roads, transport, fire engine replacement and training budgets.
    This is the background to the Chancellor's Budget—a background against which the article in The Sunday Times to which I have referred proceeded to give people advice on how to prevent their pockets from being drained even further by today's Budget. Each of its 10 tips, however, has caveats that are reinforced by the Chancellor's announcements. I should like to look at three of them.
    Mr. Bercow: Given that the Government's resource allocation formula is the vehicle through which they are effectively draining resources from the south-east of England in order to prop up their feckless and profligate friends in the north, does that not underline the importance of the ten-minute Bill that my hon. Friend

    333
    himself introduced to ensure that, in future, there is an independent body whose function it will be to allocate resources to local authorities across the country?
    Tony Baldry: I was very grateful to my hon. Friend for his support for that Bill, and for the support of many other Members of Parliament with constituencies in Oxfordshire, Buckinghamshire and elsewhere. The fact is that it is not us who are saying that money is being taken away and given to Labour's friends in the north. Organisations such as the Chartered Institute of Public Finance and Accountancy, by simply looking at the funds for this year's grant allocation, can see that local authorities in the south of England are being raided, and that the money is going elsewhere.
    The Chancellor has given us a lot of froth today about assistance for pensioners, but pensioners in my constituency are not concerned about his latest gimmick; they are concerned about how they are going to pay the increase in their council tax bills. [Interruption.] Labour Members may scoff, but pensioners in my constituency are much more concerned about the bills that land on their doormats today than about the Chancellor's promises of benefits tomorrow, because bills on the doormat are the reality. People have now rumbled the fact that the increase in council tax bills is a consequence of this Government's fiddled figures and unfair treatment of the local government finance settlement.
    Top of the list of the suggestions in The Sunday Times is:
    "Reduce your National Insurance Bill".
    It is not surprising that people should consider how to reduce their national insurance bills. Given the higher national insurance contributions that came into effect on 6 April, people are now faced with the triple whammy of frozen personal allowances, frozen national insurance thresholds, and the 1p/10 per cent. increase in the rate of NICs. The Sunday Times advised:
    "You can cut your NICs through 'salary sacrifice' whereby you give up some of your salary and your employer increases your pension contributions by the same amount … However, you can only sacrifice future increases".
    However, future increases do not account for the higher cost of living that today's Budget will create for many people. They will not reduce council tax burdens, which have to be paid now. Nor do they equate with the pensions crisis, which has caused a yearly £5 billion hole in pension provision, and has led Age Concern to point out that Government proposals on pensions require
    "fairness, security, clarity and flexibility".
    After today's announcements, elderly people in my constituency will be faced by 23 means-tested benefits, which are so opaque that many pensioners will end up not claiming them. All that elderly people want is a simple and straightforward pension.
    Indeed, everyone wants a straightforward pension system, but the Labour Government have made the benefit system much more complex and the Chancellor's meddling with tax credits has made the system impossible even for experts to understand. Coupled with that, changes to the payments system in April have been poorly promoted and the Government need to do much
    334
    more to ensure that people get the benefits to which they are entitled. I am not surprised that the Chancellor feels it necessary to write to pensioners about the increase in the winter fuel allowance, but I wish he would write to them all in an endeavour to ensure that they all receive every penny to which they are entitled.
    Mr. Bill Tynan: Does the hon. Gentleman accept that the constant reference to means-tested benefits affects pensioners' attitudes to the minimum income guarantee, which is a right and is not means-tested? If we continue to talk about means-tested benefits, it will detract from people's ability to benefit from the minimum income guarantee and the pension tax credit.
    Tony Baldry: I have no quarrel with the hon. Gentleman, but the fact of the matter is that those benefits are means-tested. I hope that every Member of Parliament wants to ensure that every pensioner receives every penny of benefit to which they are entitled. However, year on year, the Chancellor makes the system more complicated, more difficult and harder for people to understand. Today's Budget provides yet a further example.
    To return to the article, under the heading "Offset your Savings", people are advised to
    "combine mortgages—and sometimes credit cards and personal loans—and savings schemes. They deduct your savings from your debts and only charge interest on the balance … but you need sizeable savings to really benefit".
    What about my constituents who do not have sizeable savings because of the high house prices encouraged by the Chancellor's Budget? What of those who do not have such savings because the Chancellor has encouraged low interest rates, which have partly resulted in higher credit card bills and personal loans? And what about those who simply do not have the capacity to play piggy banks and would benefit much more from straightforward and direct measures that help people to save their money, but are penalised by the Budget?
    The final piece of advice in the article is to "Claim your Tax Credits". The Chancellor has made a lot of noise today about new tax credits, but, as with the minimum income guarantee for the elderly, they prove more elusive when people try to claim them. Nevertheless, The Sunday Times notes:
    "If you have children you can offset some of the increase in National Insurance by claiming the new child tax credit".
    But not everyone in my constituency has children—[Interruption.] Well, it is an important observation. Some people can benefit in certain ways, but we should recognise that much of the credit will be clawed back in national insurance contributions—the Budget's biggest caveat. Some of today's initiatives—we have had a lot of them—may look good, but few people qualify for them. Every year, the Chancellor introduces more gimmicks in a great wodge of paper, but on further analysis the next day—or even the same day—one recognises that not many people will benefit.
    Other initiatives may seem helpful, but they have to be viewed in relation to all the Treasury's taxes. Most will be too late to help businesses raise productivity, but a rise is needed now. Of course more help for research

    335
    and development is helpful and the proposals for the British small business investment companies are worth investigating, but they are not what business wants. Businesses in my constituency are concerned about increases in national insurance contributions, further burdens in taxation such as the increase in petrol duty in recent years, and increasing amounts of red tape.
    It may come as a surprise that, for 2003—04, a Treasury document claims that the Government will be able to
    "raise the rate of sustainable growth and achieve rising prosperity and a better quality of life, with economic and employment opportunities for all."
    But that does not seem to chime with what is happening in my area, which I suspect is one of the more prosperous in the United Kingdom.
    I will turn to the Budget's impact on productivity in a moment, but I wish to refer to the assertion of opportunities for all. Many who will have a chance of concentrating on today's Budget, and on previous announcements that start to impact today, will see it as an attack on middle England. They can hardly be wrong when almost 1 million more people have been dragged into paying tax at the 40 per cent. top rate following the Chancellor's 26 alterations to the tax system since 1997, changes that have cost these taxpayers more than £47 million.
    No one in my constituency, whatever their tax bracket, benefits from higher council taxes, higher stamp duty or higher house prices. No one is helped by insecure pensions, which the Budget—like last year's—fails to address.
    On productivity, there is simply not a scrap of evidence that the UK is experiencing sustainable growth. No one benefits from low productivity. Business productivity is low simply because the so-called initiatives by the Chancellor that were meant to avoid low productivity are overly complicated, irrelevant or counter-productive. That was the central concern of the local business community when I conducted a survey of the small and medium-sized businesses in my constituency last year. They were concerned about corporation tax, capital gains tax, the petrol tax, stamp duty and national insurance contributions. These were the measures that were of concern to them, as were business rates. It is difficult to see what the Chancellor has done today that helps in any of those areas, or significantly addresses productivity.
    Mr. Flight: On productivity, does my hon. Friend accept that one of the key problems has been that productivity in the public sector is, if anything, negative and the more resources shift from the private to the public sector, the lower our productivity growth becomes? Indeed, it has halved in comparison with what it was before 1997. Moreover, the consensus view of economists is that the overall growth rate—the achievable sustainable level—has been reduced to about 2 per cent. as a result of the same factors.
    Tony Baldry: My hon. Friend makes an extremely good point, echoing what my right hon. Friend the Member for Charnwood (Mr. Dorrell) said about
    336
    public expenditure racing ahead of the private sector. Not only is that a matter of concern; we will inevitably see higher taxes. The Government seem to be making little attempt to get to grips with that.
    In the past, we have seen attempted reforms to the competition regime, designed to make markets more competitive by stamping out abuses of power. They did not. We have seen complicated changes to capital gains taxes that sought to encourage investment for the longer term. They did not. The Treasury justified raising corporate taxes on dividend payments on the basis that it might encourage companies to retain profits. It did not.
    Tax credits for research and development spending aimed to correct a potential market failure: that companies under-invest in research and development because their competitors would also gain from their innovations. However, that has resulted in an imbalance in research and development, which I doubt can be addressed by today's announcement, welcome and limited though it might be.
    Today, sadly, with the Government halfway through their second term, the UK's productivity performance shows little discernible improvement. If anything, it has deteriorated since the Government came to power and is now at a 10-year low. That is not my judgment; it is the assessment of the Bank of England's latest inflation report, which notes:
    "The growth of labour productivity per person has been below its long-run average".
    The IMF, in its recent annual assessment, stresses that, for the United Kingdom:
    "Raising productivity remains a key challenge."
    Much the same is said by the CBI and the British Chambers of Commerce, echoing the concerns of local businesses in north Oxfordshire.
    An article in the Financial Times this week observed that
    "there appears little appetite left for more government-directed measures to remedy the shortcomings. The City is preoccupied with the immediate economic outlook and the health of public finances. Business is in a lather about rising taxes and national insurance contributions. And employees are growing fearful that their private-sector pensions will not provide the retirement income they had expected."
    On that final point, it is not surprising that employees are growing fearful about their pensions, given that the Chancellor's £5 billion-a-year pension grab tax has cost 12 million people an average of around £400 a year. It is disgraceful that pensioners retiring now will receive half of what they would have got five years ago.
    What would have happened if, during the 1997 general election, I had knocked on doors in Banbury and Bicester and told people, "Hey guys, I've got news for you. By 2003, under a Labour Government pensions for people retiring will be worth half of what they are today"? I wonder how many people would have voted Labour in that election.
    Rob Marris: On that point, the principle reason that pensioners are getting less is that annuity rates have

    337
    come down considerably. That has happened because, under a Labour Government, interest rates have more than halved from their levels under the previous Conservative Government. Does the hon. Gentleman support low interest rates, or not?
    Tony Baldry: When they start knocking on doors, Labour Members will have to face the fact that the various stealth taxes introduced by this Government, including the raid on pension funds, are less stealthy now. People—pensioners, and those in business—appreciate the impact of those taxes, and the damage that they are doing. Sooner or later, a tax will have an impact. The Government's chickens are coming home to roost.
    Mr. James Wray: Was not the hon. Gentleman embarrassed, when he was knocking on doors at the general election before the one that he mentioned, about the fact that the previous Prime Minister advised old people to have equity? They got their houses at a knock-down rate of 6 per cent. but, after 18 months, the interest rate had risen to 18 per cent. Thousands of houses were repossessed, and local councils had to rehouse the old people who were thrown out of them.
    Tony Baldry: Clearly, the hon. Gentleman was not listening to what I said earlier about people's concerns about negative equity. In my constituency, those concerns remain alive today. People who can afford to buy houses are concerned about them losing value and about falling into negative equity as a result.
    I am sure that, in the coming year, we will witness higher growth in the US, France and Germany, where people worry a lot less about higher taxes and lower personal savings. Nothing in today's Budget changes that outlook. The reality is that Labour is taxing, spending and failing. From this week, people are working for less as a result of the Chancellor's national insurance increase. It is a tax on jobs and on pay. Given increased council tax bills, a typical family in my constituency and in every constituency will find itself £568 worse off this year.
    Understandably, all my constituents are anxious about their futures, and concerned about their jobs, savings and pensions. Meanwhile, our public services are just not good enough. This Government have brought us more taxes, more spending, more borrowing, more promises, more failure and more excuses—and still no results.
    Mr. Deputy Speaker (Sir Michael Lord): Order. Before I call the next speaker, may I tell the House that a considerable number of hon. Members are seeking to catch my eye. Unless contributions are considerably shorter, a very large number of hon. Members will be disappointed.
    I call Mr. John McFall.
    4.39 pm
    John McDonnell: I hope, Mr. Deputy Speaker, that you meant to say John McDonnell. There is some similarity between me and my hon. Friend the Member for Dumbarton (Mr. McFall)—although not necessarily politically.
    A reference was made earlier to Labour's old ways. That shows that I listened to some of the other speeches that have been made. I want to try to tempt my right hon. Friend the Chancellor and the House to consider some of the old ways, and to see whether we can go a little way down that path today.
    I concur with many of the descriptions of the budgetary environment in which we are working. It is clouded with risks, in terms of the international situation—there is international deflation, and stagnation within the eurozone. We face different risks in our constituencies. In mine, there is a problem of house prices overheating, but also of job losses at Marks and Spencer, Safeway, the Ministry of Defence and in the aviation industry, where, as a result of the war, 3,000 jobs are at risk at British Airways. I therefore understand the problems that some northern constituencies have experienced in recent years as a result of loss of employment. I also understand the implications of what has happened elsewhere in the country as a result of recession in the manufacturing industry, which I balance with the south-east's problems of house price increases and the concern that some people have about falling into negative equity. There is an edginess about national economic prospects, set in the context, I have to say, of overall growth in recent years from which many people have gained a lot—both through direct income and the benefits of public services.
    My main concern is the lack of robustness in the public finances. In my view—returning to what some describe as the old way— that is the result of a failure to introduce at a sufficiently early stage more redistributive, fair and just tax reforms, which means that we are now having to increase our borrowing. I support that, because our borrowing is minimal by comparison with other countries, and we could borrow more if necessary. Because we did not introduce soon enough adequately redistributive tax improvements or reforms, we have not built up sufficient critical mass in terms of our tax base or tax take to fund all the public service reforms that we wanted. The failure to face up squarely to redistribution through general taxation—on wealthy individuals and on tax-avoiding elements of the corporate sector—has resulted not only in the lateness of the delivery of public service investment and the lack of impact of that investment for some communities in terms of visible improvements, but in large sections of the community missing out on the full benefits of the increasing wealth of the country that has been generated by a relatively successful Government.
    I reiterate what my hon. Friends said earlier. We need to remind ourselves that we live in a very wealthy country and that we can afford to provide excellent, high-standard public services and to give all our people a decent standard of living and a decent quality of life. We can certainly afford to eliminate the worst effects of poverty that many of us experience in our constituencies. The Chancellor mentioned the war against Iraq and referred to the amount that has been

    339
    spent so far, with £3 billion set aside. What I find interesting about the economics of this war is that the Chancellor was so easily and readily able to find £3 billion for military expenditure. That takes into account neither ongoing military expenditure nor the humanitarian aid that will be required to rebuild Iraq's infrastructure, which has been devastated by sanctions and coalition bombs. The facility with which the Chancellor found that £3 billion led some of us to the conclusion that if he can so readily find £3 billion to pay for a war on Iraq, it should be equally easy for him to find £3 billion to pay for a war on some of the worst aspects of poverty and inequality in our own country. Hon. Members are bound to guess what is to follow. I will set out a limited number of priority spending initiatives that have been promoted for discussion by me and several hon. Friends in the socialist Campaign group. They amount to approximately £3 billion.
    Let me start with the largest group of people in poverty, who over the past 25 years, under successive Governments, have not fully shared in this country's growing wealth—namely, the pensioners.
    I am an admirer of what the Chancellor has done on investment in services for pensioners and of his attempt to bring pensioners out of poverty. However, many of us have received briefings from Help the Aged, Age Concern and others in the past few weeks and we must all admit that to a large extent successive Governments have failed pensioners. Twenty-five per cent. of pensioners live below the Government's official poverty line—the same number as in 1995–96. In the past decade, 17 per cent. have lived in what is described as "persistent poverty", which means that in three out of the previous four years they have been in that poor condition, and 44 per cent. live in accommodation that is in need of repair and what is described as "thermally inefficient". In other words, they are poor and cold. As a result, as we all know, more than 20,000 of them each winter will die from cold-related diseases. Contrasted with some of the coldest countries, such as Finland, we have a very poor record.
    The state pension is the main income that we provide to pensioners, but that has declined by 15 per cent. as a proportion of average earnings in the past decade or so—we predict that it will be only 7 per cent. by 2050. It is lower than the rest of Europe in terms of gross domestic product.
    Mr. Tynan: I accept the figures on the basic state pension. Does my hon. Friend accept that the minimum income guarantee is dealing with the problems of the poorest pensioners, and that the heating allowance, which it has been announced today will increase from £200 to £300, will make a tremendous difference and, hopefully, save many of the lives that have been lost in the past?
    John McDonnell: I was about to deal with that. The Government's anti-poverty strategy, much of which I support, is based on what I can only describe as means-tested benefits. I would like to find another way to encourage take-up. I am happy to explore the use of the minimum income guarantee.
    I do not think that anyone has worked harder in their constituencies than a number of Labour Members to encourage take-up. We have held surgeries and there
    340
    have been all sorts of stunts to advertise the means-tested benefits. The reality is that, as the Public Accounts Committee report that was published at one minute past midnight last night demonstrated, between one fifth and one third of pensioners do not take up the MIG. Nearly £2 billion worth is not claimed every year.
    I refer my hon. Friend to the report. Basically, it sets out in an objective way that
    "2 million pensioners live in low-income households",
    and that
    "£1.86 billion of the main benefits remain unclaimed".
    Mr. Wray: Will my hon. Friend give way?
    John McDonnell: May I finish this point because I do not want to lose track of it?
    I refer my hon. Friend the Member for Hamilton, South (Mr. Tynan) to the report, which states:
    "Many pensioners and those that advise them consider the systems and administrative procedures for claiming benefits to be too complex. In all there are 23 potential entitlements for pensioners, with 36 different linkages between 16 of them".
    The report goes on to describe, using graphics, the system of linkages, which is a nightmare maze for many pensioners when they are claiming benefits.
    Mr. Wray: My hon. Friend mentioned poverty. According to the last survey, four of the 11 most deprived areas were in Glasgow. Does he agree that there should be a deadline and that all the benefits that are not taken up should be ring-fenced and put into deprived areas?
    John McDonnell: My hon. Friend makes an interesting suggestion. The Public Accounts Committee report examines every method that has been used to encourage take-up. Some have worked, but many have not. Now, we need to consider how we reassess the take-up levels and the impact of promotional campaigns and whether we should target some of the resources strategically.
    According to PAC analysis before the report was produced, the administration of means-tested benefits is six times more costly than the administration of a universal benefit. Some of the campaigning agencies say that it is 12 times more costly to administer a means-tested benefit than a universal benefit. That must be of concern.
    We need urgently to do something for pensioners. We should listen to what the pensioner organisations are telling us. Last week, 150 pensioners from the Greater London Pensioners Association visited the House of Commons to meet the Financial Secretary to the Treasury. Their basic demand was the restoration of the link between pensions and earnings. They want to continue to share in the wealth of this country as it grows in future years—as I am sure it will under the Government. It would cost £530 million to re-establish that link this year. That money could be found from the Budget. If we can draw down £3 billion for the war from contingency funds, we should be able to find £530 million to restore the link between earnings and pensions, so that pensioners do not lose out from the growth of incomes and wealth in this country.

    341
    My second point on pensioners relates to older elderly people, who are more likely to be poor. Often, they are women, living alone and suffering from illness or disability. Today, I am pleased that the Chancellor acknowledged their plight—a real breakthrough. He added £100 to the heating allowance. Unfortunately, however, that amounts to less than £2 a week. Help the Aged and others have been campaigning for a £5 increase. The 25p a week increase was derisory, as the Chancellor accepted. Indeed, last week, one pensioner said that it would not even pay for a phone call to the Chancellor to tell him where to stuff it.
    I should like the increase to be more than £5; the Liberal Democrats want a £15 increase. A £5 increase would cost about £550 million—not a lot in the context of overall public expenditure, but it would address real needs.
    The concessionary travel schemes that have been introduced in some local government areas are one of the most welcome benefits for pensioners. When I was a member of the Greater London council, I—like other hon. Members who are present—supported the introduction of the concessionary fare scheme in London. Free public transport in London dramatically improved the quality of life for older people. It has allowed them to enjoy travel in London and visits to their relatives. It has brought about an overall improvement in their social lives.
    The funding was extended and there is now free travel in London, Scotland and Wales, but only 20 per cent. of England is covered by a concessionary scheme. It simply depends on where one lives—[Interruption.]As my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) says, there is an excellent scheme in the west midlands.
    The Government have introduced a wonderful initiative to extend the concessionary fare scheme throughout the country, but only for half-price fares. One of the simplest ways of improving the quality of life for pensioners throughout the country would be to introduce free travel nationally. It would cost £300 million, according to the Minister of State, Department of Transport, whom I am quoting faithfully. Those initiatives for pensioners would increase the credibility of the Government's claim that they are tackling poverty among the poorest.
    A great deal has been said about the need to attract young people into education and employment. However, students have not been treated particularly well by successive Governments. The removal of grants by the previous Conservative Government and the introduction of tuition fees by the Labour Government have undoubtedly resulted in hardship. Barclays Bank estimated that the average debt for students graduating in 2002 was £12,000, a 28 per cent. increase on the previous year. The National Union of Students and other lobbying bodies have examined student loans and other forms of student debt, including credit card debt. In some cases, students have accumulated debts of £25,000.
    That is a disincentive to study or to stay in education. The drop-out rate for higher education is 20 per cent. People get into financial difficulty, which undermines
    342
    their motivation. When the Department for Education and Skills held a consultation to find out why students were dropping out, financial difficulties were the major factor. In one survey, a third of the students cited finances as a factor when considering dropping out of higher education.
    Mr. Bercow: I do not dissent from what the hon. Gentleman has just said. Does he recall that, as long ago as 14 April 1997, the Prime Minister was quoted in the national press as saying that Labour had no plan to introduce tuition fees and that that commitment was underlined and reinforced 10 days later by the right hon. Member for Livingston (Mr. Cook)? I accept the legitimacy of the hon. Gentleman's concern about the impact of tuition fees on students, but may I put it to him that the Government would do well to reconsider their capricious and arbitrary target of 50 per cent. participation in higher education?
    John McDonnell: I do not believe that that target is capricious; I want the largest number of pupils, particularly from working-class backgrounds, to enter higher education. I would like a higher target to be set, and achieved.
    On student debt, we should remove any barrier that we can that prevents people from entering higher education or dropping out of it. Financial hardship is increasing that pressure, and it is causing stress. All hon. Members whose constituencies contain universities have had experience of the increasing mental health problems among students, even including breakdowns. We should lift that burden from young people and restore the incentives to study, so that they gain the skills needed to go into industry, creating the industrial development that has been discussed today.
    Our communities and economy need those skills, so I recommend that we abolish tuition fees. That would cost £1.4 billion—a minimal amount. Today the Chancellor introduced something that I welcome—the baby bond—but as has been said, it seems as though the baby bond will only amass a sufficient amount of money to pay the tuition fee in future. Let us at least look again at tuition fees, and remove that disincentive to continued study.
    I welcome the continued investment in public services, but I have some anxieties about school budgets in the current year. A number of my local schools have reported to me that the national insurance change has had an impact on recruitment and that we are returning to the days when some teaching posts were frozen. I would welcome an urgent and immediate review of school budgets. The Chancellor has moved in some areas and an additional sum—£38 million, I believe—has been put into some local education authorities to cope with some of the problems that have occurred, but the problems extend well beyond those areas, and we need an urgent review to avoid returning to a growth and cuts situation in education.
    One public service has dogged the Government in the past 18 months—the fire service. The wage settlement for the fire service is in desperate need of resolution, to avoid the Deputy Prime Minister imposing a settlement and undermining the atmosphere in the fire service and trade union rights. So I urge the Government to set aside a sum to settle the fire service dispute as quickly as possible.

    343
    I have met firefighters at two local fire stations in the past week, and they have just been invited into what is described as new dimension training. The Chancellor has set aside a sum today to fund some of that training, which is about tackling the biological and chemical weapons threat from terrorism in this country. As well as calling on our firefighters to tackle that threat, we should acknowledge their commitment and professional skills by paying them appropriately. That is why we should set aside a sum—it would cost £240 million—to settle the firefighters dispute at the 16 per cent. wage offer, as proffered last November, but payable immediately. That is not a large sum of money to pay for a dedicated team of workers, whom we are now asking to risk their lives against a new and very dangerous peril.
    In conclusion, I wish to say that, surprisingly and coincidentally, the total cost of those Budget proposals comes to about £3 billion—give or take £200,000. This alternative Budget will afford modest expenditure in priority areas and significant improvements for Britain's pensioners, students and firefighters.
    Since 1997, new Labour has alienated key groups that have traditionally supported us through thick and thin in difficult years. They have worked for us and voted for us, and we need to address their concerns. They think that we have not always done that, which has resulted in some alienation. The invasion of Iraq has provoked massive opposition among many Labour supporters and voters. We need a Budget that addresses those concerns and transforms that disillusionment into recommitment. By giving back to those people who have invested so much in this country their hopes and their dreams, we will mobilise a large amount of support not just for the Government, but for the public services that we are trying to provide.
    5 pm
    Sir Archy Kirkwood: I am keen to keep within the 15-minute deadline. The debate has been interesting, but we need to pick up the pace if all those hon. Members who wish to speak are to be able to do so.
    I am pleased to follow the hon. Member for Hayes and Harlington (John McDonnell) whose comments relate to the first of three points that I will make. The budgetary process—how we explain what is going on and what we want to achieve—gets lost in the charade and showbiz circus that follows Budget presentations. I have felt for some time that these annual jamborees do more harm than good. We should have a statement of income tax rates followed by a more measured series of debates, separating out some of the more technical aspects for the Treasury anoraks to address. That would allow the rest of us to discuss those things that ordinary people can properly understand.
    I enjoyed the hon. Gentleman's speech because he took the time to explain what he wanted to do and how he was going to raise the money. More of us should take the time to argue a case when additional resources are needed. We should have the courage of our convictions and argue with the public for that change to substantiate and support our policy proposals. If we did that, politics would be held in better regard.
    My first point is that there is a gap between the reality of the experience of my constituents and what we have heard today. I think that the Chancellor has been
    344
    relatively successful. Much of what he has done has promoted positive change. The hon. Member for Wolverhampton, South-West (Rob Marris) was right to say that we in the UK have enjoyed, on average, household income increases. They have been beneficial and were hard won. The first two years after the Chancellor came into office in 1997 were particularly difficult.
    There are, however, wider dimensions to the argument than personal household income. Collectively, public services have not received the expenditure and capital investment that we would all want. I am in favour of politicians having ambitious targets, but talking about the economy in grand terms, as if everything is either a total success or total gloom, does not match the reality of our constituents. I know intellectually that £6 billion has been put into the pension system, but the hon. Member for Hayes and Harlington is right: we all meet pensioners all the time who feel hard pressed. Council tax increases are part of that. We have to bridge the gap between the way in which people live and their everyday experiences in the high streets and in their homes with what we are talking about and trying to achieve in this place.
    I have been an MP for 20 years—although it feels longer—and I am desperately worried about the increasing level of alienation in our society. That is apparent even in my constituency, which is very different from Wolverhampton and Hayes. People are becoming turned off from public policy making and the political process. We should all be concerned about that because it leads to divided communities. Regional economies are vastly different, north and south. That is true in Scotland and it must true in places such as Wolverhampton when compared with the home counties. The policy does not always appear to address that. I support the Chancellor in saying that we need to examine regional policy post-2006 when the European Union structural funds regime changes. I support the decentralisation of the promotion of regional policy, which is important, and, incidentally, I agree with the Jobcentre Plus discretion being devolved.
    All those initiatives are helpful, but we have a serious problem. I was struck by a figure produced by the Institute for Public Policy Research, which I read about in The Independent yesterday, in relation to the assets gap that has emerged over the last 10 to 15 years. It reminded us that between 1988 and 1999,
    "the top 1 per cent of the population increased its share of personal wealth from 17 to 23 per cent."
    That does not sound much, but according to the next sentence:
    "The richest 2.4 million households control wealth of about £1,300bn, while the combined wealth of the poorest 12 million households is about £150m."
    I am no left-wing loony socialist, although I may have been in my student days—[Interruption.] That was the hon. Member for Hayes and Harlington. There comes a point, however, when the issue of lack of fairness becomes a corrosive factor. The Chancellor is right to talk about equality and fairness—he mentions lots of buzz words. I know him well and I am always suspicious when he talks as fast as he was talking this afternoon—it means that he has something to hide. I have experienced that before, to my cost, although we will not

    345
    go into that, as we do not have time. We must all work harder at explaining, using transparent figures to argue our case. If we think that there is a case for spending more public money, we should say so, and we should say from where the money is coming.
    Secondly, on social policy—I do not have time to develop these points as much as I would like—I am concerned about the increasing complexity of our social support systems. Experts struggle to understand them. I try to specialise in the area, and I struggle to understand the interrelationship between certain policy areas. The Inland Revenue has now taken over responsibility for the administration of the new tax credits, and I can see the validity of the change in principle. I am receiving worrying reports, however, about the inability of the computer systems available to the Inland Revenue to deal with current demand. I a m worried about the apparent inability to get to grips with some of these complicated computer systems.
    I am also concerned about housing benefit payments being turned into flat rate housing tax credits and added to the list, and anyone who thinks that the working tax credit is complicated will under stand why that is. The hon. Member for Hayes and Harlington will be among the first to learn about it, as it will hit people in London much harder than it will anywhere else. A flat rate housing tax credit for public sector and social rented housing causes me real concern. We will need to return to such issues in more detail in the immediate future.
    I am also worried about the extent of the increase in the informal economy, which I now detect, mainly in urban, deprived areas. The Grabiner report, commissioned by the Inland Revenue in 2000, did sensible work, but it has been gathering dust. Estimates at the time were that a £50 billion to £80 billion informal economy existed. One of the consequences of the increasing complexity of the welfare support system is that people slip out of it: they do not want anything to do with it, as it is too complicated for them. What they therefore do is to work "on the side". That is not in anyone's interests. What we should do is have an amnesty: the Inland Revenue should say that, for the next six months, it will come to some arrangement with anyone who comes clean and declares what they have been doing. We would therefore be able to get those people on board, take them into the system, and have them paying taxes like the rest of us. That is a growing problem, the extent of which is underestimated. There is a lot of entrepreneurial activity in urban centres below the line, which is a real concern.
    On unemployment figures, we should look at the group of people who are classed as economically inactive. I welcome the Government's changes to incapacity benefit and the pilots that will take place in the autumn, as that is a problem area that we do need to address. Useful work is being done in trying to get people into welfare-to-work programmes, which I support. The Grabiner report, however, deserves further study, and we should consider implementing its conclusions rather quickly. Knowing the Chancellor as well as I do, I recognise that he is infatuated, if that is not too strong a word, with American systems, of which
    346
    there are some good examples in the world of social enterprise. Companies get tax breaks and people promote mutual activity, almost old-fashioned co-operative activity along the lines of the New Lanark mills and so on. Social enterprise could be much more aggressively promoted, supported by tax breaks, to help deprived communities work their way out of multiple deprivation.
    I shall deal quickly with two other social policy issues. The Government's child poverty targets are ambitious. The Chancellor of the Exchequer skated over it, but the report by the Institute for Fiscal Studies on the green budget suggests that we need another £1 billion to be sure of reaching the target of reducing child poverty by a quarter by 2004. I was interested to learn that all that the Chancellor is doing in the hope of achieving that target is leaving the per-child element of the child tax credit at £27.75, indexing it with earnings for the rest of this Parliament. The IFS report thinks that that will leave the Government £1 billion short of the target—a £3 a week increase in the per child element of child tax credit would be needed to achieve that. I noticed that the Chancellor did not say anything about that.
    I do not have time to develop this argument but, briefly, the question of pensions, which other hon. Members have raised, is one to which the House will need to return as it will cause major long-term problems. The Government have genuinely, and in good faith, tried to address pensioner poverty, but there are longer-term questions about means testing, which is more pernicious than people may imagine. One of the main indicators in the indexes of multiple deprivation by which funding allocations are made is means-tested benefit take-up. If people are not getting a benefit, not only do they not receive that assistance but their areas do not get the benefit of the multiple deprivation index subventions. We need to be extremely careful about that possibility of double jeopardy.
    On pensions, the problem it is not just the state retirement pension or pension provision but the whole policy on ageing. Government Departments across the board need to turn their attention now to demographic changes that will take place between 2020 and 2050. They need to look at the change in the age profile of the working population compared with the current age profile of people who, hopefully, will have retired by then. The Government are not spending enough time on that issue or giving it enough priority.
    In the final three minutes available to me, I shall make one or two points about local issues that are worth making as they have a wider salience. I was pleased that the biofuels issue was addressed, but we still have not gone far enough. Biofuels have a double benefit—they are something that our agricultural community can grow which might make them a welcome profit for a change, and they reduce carbon emissions. This afternoon's announcement would introduce changes by 1 January 2005, but by that time other European Union countries will be well ahead of us in the biofuels department. I accept that the Chancellor did not want to introduce change immediately—because we do not have capacity nationally, biofuels would have to come in from outside. I understand why there is some delay, but

    347
    I do not understand why we are not going further and faster in trying to level the playing field and get the 4.5 p per litre that the biofuel generating industry thinks is a necessary incentive to make the initiative profitable.
    I shall conclude with the problems of public insurance liability, which was mentioned earlier. Some businesses in my constituency have been subject to 500 and 600 per cent. increases in public liability insurance, which do not fairly reflect the risks that they face. They are, for example, small steel construction companies with a flawless safety record. They are family businesses; they have had no trouble and are very careful about how they conduct their business, yet they are now struggling to find insurance cover of any kind. It would be perverse in the extreme if such high-quality businesses were put out of business and their profitability extinguished simply because of the changes in the insurance industry. I know that the Department for Work and Pensions is conducting a review on this matter. That review needs to reach its conclusions very quickly—before the summer—and I hope that it will come up with recommendations that the Government will quickly and urgently implement to take some of the pressure off those businesses, because if they do not, those businesses will disappear in very short order.
    The manufacturing sector in my constituency is taking a real pounding. We have lost £29 million in exports from the Scottish Borders in the last year, mainly in textiles but also in electronics. Manufacturing is taking a real hammering there. Knowing the Chancellor as I do—and knowing his provenance as a politician—I am surprised that he is not spending much more time and energy on this issue. That makes it sound as though I am his best buddy. I am not really, but I sometimes meet him in aeroplanes at 37,000 ft without his advisers. That is a really good opportunity to talk to him, and I have been known to spoil his breakfast. I get the impression, however, that manufacturing is just another issue for him and that he is not as focused on it as I think that he should be. The announcement of 100 per cent. capital allowance for information technology equipment is very welcome, but some of our manufacturing industries, such as textiles, are competing against huge global market pressures, and they need further consideration of that kind.
    I heard some warm words from the Chancellor on apprenticeships, although he spoke them at such a rate that I could not properly understand them. I am finding it very difficult to get small family businesses to take on joiners as apprentices, because the construction industry training board regulations mean that the apprentices have to go off for 20 weeks before they can come back. A small business in a place such as Kelso or Hawick in south-east Scotland simply cannot carry that cost and responsibility. There is an endless amount of work available, with very good rates of pay. We could encourage lots of young people to come into the industry, and they want to do so, but the businesses just cannot carry the on-cost. I understand that we need excellent standards, and that we do not want gas fitters going round causing explosions all over the country, but we seriously need to do something to get better provision for small-scale businesses so that they can take on and train skilled journeymen.
    348
    This is a high-risk Budget. The Chancellor is taking a gamble on growth rates if he thinks that those forecasts are going to be robust. I wish him luck; he has been lucky in the past, but it will be, a very good trick if he can do it.
    5.17 pm
    Mr. Bill Tynan: This is the first Budget speech that I have made. I went through feelings of elation as the Chancellor spoke to depression when Opposition Members were speaking, and I must now try to find my way round the reality of the situation. I shall begin with a unique contribution: I congratulate the Chancellor on a Budget that improves the lives of my constituents. I am sure that most of the country—I will not say the whole country—will congratulate him. People who smoke will say that they do not like the Budget. Those who drink whisky will be quite happy; those who drink wine and beer might be less so.
    The Budget shows the Labour Government's clear determination to maintain the economic strategy and foundations that they have developed over the past six years. It will protect the least fortunate in our society, as the Government have done during that time. They have also delivered effective public services. The hospital-building programme in Scotland has been substantial over the last six years, and without the public-private partnerships, we would not have a new hospital being built on the border of my constituency. We have to understand what is being done and appreciate what can be done if the political will is there.
    I understand the concerns that have been expressed about business. We must ensure that business has the best possible opportunities to enable it to thrive and to enable us to pay for the benefits that we would like to see. Since 1997, my right hon. Friend the Chancellor has been delivering for the country, for business and for the people.
    We did not have economic stability during previous Governments. That was the position during the 18 years that I served as a full-time union official. I am well aware of the difficulties that those 18 years created for the people whom I represented. I believe that the previous seven Budgets have set the foundations for the well-being of the UK.
    We must remember that we have low interest rates, low mortgage rates and low inflation rates, and the highest employment level ever. We should continue strongly to push that message. I welcome my right hon. Friend the Chancellor's commitment to the continuing crusade to create full employment. Many years ago, we could only dream about that. Delegates at Labour conferences spoke about full employment, but never thought that it could be achieved. I think that we are on the brink of something that is extremely important and worth while for the people of this country.
    I apologise for having left the Chamber to attend a Select Committee hearing, but I have listened to Opposition Members' responses to the Budget statement. I exempt the hon. Member for Roxburgh and Berwickshire (Sir A. Kirkwood) from the remarks that I am about to make. He made a constructive speech, but some of the other responses were pathetic. Opposition Members' speeches were depressing because they referred to all the problems in their constituencies without recognising any of the solutions that have been created by my right hon. Friend the Chancellor over the years.

    349
    We must have regard to the results. We talk about blighting old age, and I am asked whether the minimum income guarantee is important. If we had a flat-rate increase in the basic state pension., I do not think that we could reach the levels achieved by the MIG, which is crucial if we are to get those who need and deserve support out of poverty.
    When I was campaigning in the 2001 election, some people were clearly concerned that those on the MIG were receiving benefits that others were not getting. Some people told me that they were on a small pension but were excluded from housing benefit and the MIG. In those circumstances, they felt hard done by. That is why the pension tax credit is a wonderful opportunity. I recognise that there may be take-up problems, but it is something that we must fight for in the House in a united fashion. If we do that, we can make a difference to each and every pensioner in our constituencies.
    Last Sunday morning, I listened to "The Frost Programme"—I am a sad person, and perhaps there are other sad people in this place—on which it was said that nearly 5 million people or families were losing out by more than £10 a week. Last week, I attended a meeting of the Institute for Fiscal Studies, at which it was said that 5.8 million families would see few changes as a result of the pre-announced tax, tax credits and benefit changes that would take place during 2003–04. It was said also that 6.7 million families would gain between £1 and £10, and that 3.7 million families would gain more than £10 a week. So we should tell the whole story when we are talking about the changes that are taking place. I welcome that redistribution, because that is what it is. I can afford to pay more in national insurance contributions and I can afford to pay more to create the opportunity for people to benefit. The 1 per cent. increase should be seen in the context of benefits for the national health service and for the community. If we look at it in that way, we will put it in perspective.
    It is time that we looked at the question of the entitlement to tax benefits. It is also time to stop exploiting the situation, which we do to a degree. In talking about tax credits, we are in a position to say clearly, "This is a means-tested benefit." I recognise what was said as regards how we deliver, but the means-testing of the 1930s would be unacceptable to me. It was an attempt to take money from people, not to give money to them. If we make that distinction on tax credit, we will take the stigma away from it. We are looking at people's standard of living as well as what they desire, and we should move forward by saying, "This is what you are going to get." We have to take that message out to the country. We have different points of view and different philosophies, so we tend to exploit the wording that is used, but we should stop doing that as it tends to play on the political divisions between us and it impacts badly on the people whom we want to benefit.
    We should welcome in particular the extra £100 for older people. We have been arguing that a 25p increase is rubbish and unacceptable. This increase may not mean £5 or £10 a week, but it is £100 a year for those over 85. That should be welcomed. In Scotland, there is an increase for 135,000 people, aged over 80, so an incredible number are being affected. On the extension involving 52 weeks, how many Members in the
    350
    Chamber have found themselves talking to a pensioner's family who say, "This is ridiculous. We are having money taken off because my mother is in hospital."? We should be pushing hard and saying more and more that the benefit is absolutely superb.
    I also want to mention the intensive support that we are giving for lone parents and partners. We speak about child poverty, but unless people have suffered it they do not know what it is like. Living in a tenement close where three families shared an outside toilet was real poverty. Today, we have a system that no longer stigmatises lone parents, which was the problem at one time. I have a daughter who has two young children, and she is a nurse at Hairmyres hospital. I know the benefits that have been created—the working families tax credit and the child tax credit—and I have just discovered that she will get about £10 a week more. That is a real benefit for my daughter in those circumstances, and I hope that people understand that. I do not mind paying the additional 1 per cent. in national insurance.
    If someone from a different planet dropped in here today, they would think that things had never been any different, but we should look at what happened as regards this country's manufacturing base. I worked in a large factory—Hoover in Cambuslang. When I went there in 1972, there were 4,500 manual workers and about 1,700 staff. It has one of the best pension schemes in the UK, and I am delighted to say that it is still a final salary scheme. Due to competition from the likes of China, Japan and the far east, that factory found itself unable to produce motors at the price that they could be bought from abroad. That is a problem. Unless factories and workplaces continue to invest in research and development to bring about new products that can be delivered for the people who work there, we will lose out.
    We have a major problem. In 1972, Robert Carr was Secretary of State for Employment in a Conservative Government. He said that we no longer needed a training incentive to develop apprentices, as employers were too wise and knowledgeable to allow apprenticeships not to exist. At that time, large factories had to pay a levy grant of 2.5 per cent. to develop their own apprentices. Small workshops fed off those large factories and took the apprentices once they had been trained. Therefore, I appreciate the point that has been made about apprenticeships, but we must ensure that people are trained properly if we are to deliver the type of employment that we are looking for.
    We cannot compete with the likes of the far east. In my constituency I have a company called Philips, which used to produce about 300 million bulbs a year. The work went to Poland Pila, which now produces about 450 million lamps a year. Philips produces only specialist lamps. We still have employment there, but it will be threatened unless we continue to develop new processes and new job opportunities.
    I am conscious of the time and I understand that other hon. Members want to speak, but let me make the following points about the Budget. It is essential that we continue to invest in the health service, education and transport. If that means borrowing more money, we must face that crisis. We must face any issue in order to maintain the stability that we have at present.

    351
    We talk about national insurance contribution increases of 1 per cent. Workplace absences cost companies an estimated £11.6 billion in 2001. The CBI has called on the Government to guarantee that by 2010, all young people will have mastered the basics of literacy and numeracy, to create clear paths into employment and higher education for young people who have vocational qualifications, and to improve intermediate skills by extending entitlement to a publicly funded—note that: a publicly funded—level-three qualification from age 19 to 25.
    Even the CBI recognises the difficulties that this country faces internationally as a result of the war in Iraq, but we can move forward if we continue to push as we have done. We have a sound economy and we are creating opportunities for business. In those circumstances, I believe that we will make the progress that is desired.
    5.33 pm
    Mr. Andrew Mitchell: I greatly respect the sincerity of the hon. Member for Hamilton, South (Mr. Tynan), although he will understand that I intend to take a rather different view of the impact of the Budget. I draw the House's attention to my interests, which appear in the Register of Members' Interests.
    There are aspects of the Budget that all hon. Members and indeed everyone in the country should welcome. I particularly welcome what the Chancellor has done for overseas aid, his announcement today about the United Nations fund, which will get extra support, and his attack on illiteracy and poverty in Africa. Those are good measures from a Chancellor who has consistently driven forward the frontiers on those matters and has always been good enough to pay tribute to John Major for his work when he occupied the same office. Therefore, there are many good things in this Budget. The baby bond is an interesting idea. It sounds like a bit of a gimmick but I would be interested to know from Ministers in due course whether it will be a funded baby bond in discrete accounts. Those matters will no doubt be explained and be of interest.
    A lot of things were not in the Budget that should have been. Although the Chancellor made it clear that he was going to take measures to help the poorest pensioners in our society, he did not say anything about the grave pension crisis that is affecting many of our fellow citizens. I hoped that he might say something about the failure of stakeholder pensions. They are manifestly a failure now, and a bit of humble pie would have been nice—an admission that his idea had not worked, and an assurance that there would be measures to help.
    We heard nothing about the chaos on the interface between state provision and private saving for pensions. We also heard nothing about the confusion caused to independent financial advisers trying to advise less well-off people how much private provision to make: they are in an impossible position.
    I was amazed that the Chancellor said nothing about individual savings accounts—ISAs—as the Government rebranded the personal equity plans, or PEPs, set up by the Conservatives. What a pity that he did not double the amount that people could save, which would have sent a clear signal. ISAs were meant
    352
    to be a way of allowing the Treasury to forgo tax, the profit being retained by those investing in them. During a time of falling markets, however, the Government have been saving money that they would otherwise have had to pay out in capital losses. The lack of encouragement to savers represents a big missed opportunity.
    I can do no better than quote a former pensions Minister, the right hon. Member for Birkenhead (Mr. Field). In an article in The Sunday Telegraph, he said:
    "All too many families stand on the brink of financial disaster as they see their pensions snatched away from them. Failure to act will be punished by voters as surely as markets punish cuts in dividends. The Government cannot continue to hide behind the claim it is consulting; it has been doing that for the past six years. What is now desperately required is action."
    That was said not by a Tory, but by a former Minister in this Government. The Government would be well advised to heed his words if they will not listen to Conservatives who are saying exactly the same.
    I noted the Chancellor's full and staunch defence of expenditure on the war. Defence is undoubtedly one of the areas in which he will have to spend more. We are now spending a lower percentage of GDP on defence than we have spent at any time since the 1930s. It is the Government's first duty to defend the realm, but it is hard to believe that, in the uncertain and insecure world that we currently inhabit, we can get away with spending only 2.3 per cent. of GDP—half of what we spent in 1979. There will be no more peace dividend; we will have to spend a great deal on homeland security. The Chancellor muttered that he would increase that budget by £200 million, but we shall have to spend far more. We shall need to beef up our reserve forces to deal with new threats and uncertainties. The United States is having to spend a huge amount on the high-technology weaponry that must now be developed, and its example should be heeded. The Government must pay more attention to what is happening in our own country and economy.
    Let me return briefly to my point about the omission of pension measures. It is typical of the Government that they saw fit to replace the chairman of the Labour party immediately, but have not yet seen fit to replace the Minister for Pensions. At a time when the pensions industry is in crisis, the Prime Minister cannot even be bothered to appoint a Minister. That is pretty disgraceful. I also greatly regret the Chancellor's failure to take the advice of many people, including Conservative Members, and suspend the £5 billion a year raid on pension funds. By doing that he could have sent a signal that he understood the industry's current difficulties.
    We have heard many cerebral speeches, especially from my right hon. and hon. Friends. My main point is this. My constituents have paid a huge amount of extra tax. They took the Prime Minister at his word when he said "If you pay more tax, you will get world-class public services". However, my constituents have been comprehensively deceived by this Government. They have paid more tax, but the result has been no improvement at all in the quality of public services, as I shall explain.
    The truth is that the Government have been spending the hard-earned money of taxpayers such as my hard-working constituents and other hard-working people throughout the country by the billions; however, there

    353
    has been no improvement in public services. There have been 53 tax rises and a clear breach of faith in the raising of national insurance, which was announced last year but is coming in now. Let Ministers square that with their promise not to raise income tax. This is mere sophistry; everyone will be able to tell from this month's pay packets that this is nothing other than the equivalent of a rise in income tax. As hard-working families lugubriously study their April payslips and their greatly increased council tax charges, they will see that the rise in national insurance and council tax is the equivalent of about 7p on income tax. Tax, as a percentage of gross domestic product, has gone up: it was 34.9 per cent. under the Conservative Government, and now it is 37 per cent. Not only have taxes increased; they will continue to increase. A group of independent forecasters, blessed by the Treasury, agrees that taxes will need to increase yet further, but it also points out that tax money is being spent inefficiently—a point to which I shall return.
    Business has warned the Chancellor about the impact of these measures. I listened with increasing incredulity to the hon. Member for Warwick and Leamington (Mr. Plaskitt), who told us that businesses in his constituency understand the increase in national insurance and hope that the money will be spent well. I surveyed 1,200 businesses in Sutton Coldfield,and I read the results of that survey with great interest, as any Member would. Not one of the respondents said what businessmen are apparently saying in Warwick. Company profits are at their lowest point for 10 years, yet the Government are loading business with their jobs tax—a £4 billion increase in taxation. The Chancellor boasts about having fuller employment, but as my right hon. Friend the Member for Wokingham (Mr. Redwood) said, there is every conceivable danger that as a result of this jobs tax, Britain will have a very different employment market in the next 18 months.
    The CBI has spoken of the "dire consequences" of this Government's policy towards businesses, and it warns of a total cost in tax and red tape of about £15 billion. The director general said:
    "Businesses gave the Chancellor the benefit of the doubt in 2001 and have withdrawn their support in droves."
    The head of the Engineering Employers Federation spoke of the
    "terrible mistakes by the Chancellor",
    and the director general of the British Chambers of Commerce warned of the terrible timing of these national insurance rises. On top of that, the International Monetary Fund has criticised the Chancellor's forecasting, and there has been criticism from the European Union. So there is no doubt that there has been a tremendous increase in the level of tax and red tape on businesses, as well as increases in tax for hard-working families.
    Things might not be so bad it the Chancellor got his forecasts right. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) said, the Chancellor has a lamentable forecasting record. In 2001, he said that public sector net borrowing during this year would be £1 billion; in March 2002, his estimate had risen to £11 billion; by last November, it was £20 billion. In the 10
    354
    months to February of this year, Government revenue rose by 1.5 per cent., compared with an earlier forecast by the Chancellor of 4.2 per cent. Last March, he predicted that the FT all-share index would grow in line with money GDP—in other words, at 4 per cent. Of course, since then, as we know, it has done nothing of the sort; rather, it has lost a third of its value.
    There have been massive rises in tax for hard-working families and businesses, along with huge increases in regulation and red tape, but no delivery on the Prime Minister's much-vaunted promise of world-class public services.
    A relatively new, non-party-political academic think-tank called Reform, which is establishing itself as Britain's leading body in the field, set up a commission on the reform of public services under the highly respected Sir Steve Robson. The commission concluded:
    "Britain has some of the worst public services of any advanced country in the world. The Government's answer is to spend more money on them and to increase taxes. In the nine years to 2005/06, public spending is being increased by £203 billion to £512 billion—equivalent to an extra £100 every week for every household. This approach is programmed to fail."
    That is the conclusion, and failing it certainly is.
    Let us consider the health service, whose budget is up by 20 per cent., whereas its activity is up by less than 2 per cent. For the first time in NHS history, we have more bureaucrats than beds. There is a glimmer of hope in the Government's policy on foundation hospitals. The Secretary of State for Health and the Prime Minister understand why such structural reform is essential, but their party certainly does not. It may be, as with the war, that an alliance will develop between this side of the House and the Prime Minister and some of his Blairite colleagues to help to deliver the foundation hospital policy, but if they do so, it will be without the support, or even the passive acquiescence, of Labour Back Benchers.
    Mr. Dorrell: My hon. Friend touches on an important point about foundation hospitals. They will provide an opportunity for the Secretary of State for Health and the Prime Minister—who have clearly been persuaded of an argument that they rejected in the 1990s—to ally with the Conservative party to carry forward a programme of health service reform that goes even further than what was planned by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) in the early 1990s. That is where the logic of the Government's policy is taking them.
    Mr. Mitchell: My right hon. Friend is right. When he was Secretary of State for Health, he wrestled with many of the problems and reached fairly similar conclusions to those of the current Secretary of State. The difference is that in those days the Labour Front Bench did not support him, whereas today Opposition Members are offering help and assistance. We are the only developed country in the world with waiting lists of 1 million, so the huge increase in health expenditure is clearly not working.
    On education, the picture is more mixed, but it remains true that, although we currently spend £4,900 per pupil, 17 per cent. of children leave school functionally illiterate and 23 per cent. leave functionally

    355
    innumerate. So much for education, education, education! Worse, we now hear that one in five teachers are so demotivated that they want to quit the profession in the next few years. The same applies to law and order, another area in which the Prime Minister has promised so much. Next to Sweden, the UK is now the most crime-ridden society in Europe, and London is more violent than New York. As the Audit Commission has made clear, there is no link between the level of resources and the performance of our police.
    We have been comprehensively let down. My constituents in Sutton Coldfield, who work hard and pay their taxes, have been let down by a Prime Minister who promised so much, but has not delivered. Labour Ministers have raised billions on a false prospectus. They have failed to live up to their promises and spending has not improved the performance of those services. Meanwhile, national prosperity is driven by productivity, which is damaged by continuous increases in tax and Government spending. The next election will be won not on the battlefields of Iraq and Basra, but on the Government's performance on public services. Labour has blown billions earned by hard-working families; ordinary people who have been fleeced by a bunch of Labour Ministers, greedy for political success at the expense of those self-same hard-working families. There is virtually nothing to show for that. Public services are still not delivering. The Government are deeply divided over reform, without which they will continue to pour good money after bad.
    The Chancellor has squandered the golden legacy of sound public finances bequeathed to him by my right hon. and learned Friend the Member for Rushcliffe. The Budget today, and the other tax measures over the last year, demonstrates that old Labour is back. That probably brings joy to the hon. Member for Hayes and Harlington (John McDonnell), but it is not in accordance with Labour's last manifesto. Instead of low taxation, reduced state intervention, reduced red tape and greater personal responsibility, all those hard-won gains that Labour inherited have been frittered away and destroyed in an orgy of spending other people's money.
    5.50 pm
    Alan Simpson: The hon. Member for Roxburgh and Berwickshire (Sir A. Kirkwood) said in his enlightening speech that he was no left-wing socialist. However, there is hope for him yet. There is considerable support for his comments about the New Lanark experiment by Robert Owen; the principles of mutuality and common ownership have a great deal of resonance on some of these Benches. The hon. Gentleman raised a number of points and it is important for us to address them within the context of a Budget debate. I shall attempt to do so.
    I want to begin with a recognition of where the Chancellor started from. It seems absolutely right that the Chancellor spent a considerable amount of time looking at the state of the world economy, the European economy and the influence of the war. Having said that, it is clear that the next general election will be determined by the way our constituents see us tackling the economic war on poverty in the UK, rather than the military war on the poor of Iraq. That may be unfortunate, but that is how it is.
    356
    In respect of the Chancellor's projections, there is a gloomier scenario that we need to try to build into our projections. Frankly, the world economy is in a mess. We are living in the aftermath of asset price bubbles that have burst. We have seen a number of the major industrial countries with serious external imbalances in their budgets. We see within the EU and Japan serious structural weaknesses and high levels of unemployment. The picture is getting worse.
    After the distractions of the war on Iraq, we will be faced with some serious short-term consequences that will make the global picture much gloomier. In the United States, the net external liabilities that the Bush Administration have built into their own budget will see current external liabilities—which stand at 25 per cent. of the US GDP—increasing to up to two thirds of GDP within the decade. The trade deficit that the United States faces will possibly rise to 7 per cent. of GDP. By the middle of the summer, there will be a further depreciation in the value of the dollar of between 10 and 15 per cent.
    Within the EU, there is a picture of chronically weak demand and growth, a hopelessly tight economic corset imposed by the European Central Bank and high and rising unemployment. When the Chancellor set that out, the only thing that he did not say was that that drives us to a fairly logical conclusion: that there is not a case for joining the euro. I suspect that he may have to have further discussions with the Prime Minister before the House is able to face the reality of that.
    It is important for us to recognise the real value of things such as the increase in winter fuel payments, the abolition of hotel charges in hospitals and the continuing programme of NHS improvements. They are to be welcomed in any economic scenario projected for the future. My cautionary warning is that those projections built into the Budget are based on some dangerous assumptions about what will happen in the future. It is always dangerous to build in Budget projections based on high rates of growth in the future that are never delivered in the present. For only so long can one promise jam tomorrow that never materialises today. We therefore need to be extremely cautious about the scope and extent of a global upturn, and about the extent to which it will boost Exchequer revenues.
    We also need to be more honest about the scope of future borrowing likely to be required to underpin the investment programmes that a Labour Government would, rightly, wish to pursue. We must begin to question more rigorously the effectiveness of the investment planning built into some of the Budget projections. Labour Members need to view with some caution the extent to which we are becoming dependent on tax credits as a mechanism for wealth redistribution in the UK.
    However one dresses them up, tax credits are a form of means testing. As my hon. Friend the Member for Hayes and Harlington (John McDonnell), my colleague in the socialist Campaign group, rightly pointed out, the whole House would be well advised to look at the Public Accounts Committee report on pensioner poverty, which was published today. It describes the extent to which those means-tested benefits are under-claimed. In itself, the sheer complexity of the claim process is a massively socially divisive process. We need to look again at cash savings in the delivery mechanisms for

    357
    universal entitlements, but we must recognise too that a real sense of social solidarity comes out of those universal presumptions. At some stage, we will have to go back to that.
    We must also recognise that the £3 billion set aside by my right hon. Friend the Chancellor to pay for a war in which most people in this country did not want us to participate was a provision of missed opportunities. I want to identify myself strongly with the very modest proposals made by the socialist Campaign group, setting out the very different ways in which that £3 billion might have been spent. For example, that money could have been spent on restoring the link between pensions and earnings. It could have delivered £5 a week extra for the over-80s. It could have extended the national concessionary travel scheme and made it a free entitlement to all pensioners. It could have paid the firefighters' claims in full, and abolished tuition fees for students.
    Those are the alternatives that we must consider if we are to take seriously the responsibilities of Budget allocations. They are the opportunities that we missed to pay for this wretched war.
    The picture gets worse. We have just been told that there is a compelling case for increasing capital investment in relation to defence, but it is worth considering the slice of the Government's capital expenditure that already goes on defence. In the current allocations, the figure for direct capital expenditure by the Government on defence is £5.5 billion. That amount is the same as the combined capital expenditure on education and health, and it is 15 times what the Government are investing directly in local government.
    We must ask ourselves where, in the scheme of our constituents' priorities, the Government's capital investment in new defence expenditure lies. The Government's investment in defence takes priority over fighting the war on poverty in our towns and cities.
    We must also take account of the questions arising out of the pensions crisis. I have no doubt that the issue will come back and chase this Government and this Parliament for years, until we cease to consult and begin to act in ways that genuinely address the scale of the crisis.
    My right hon. Friend the Chancellor announced that public borrowing this year will reach £27 billion, to pay for investment and the programmes of wealth redistribution. However, much of the investment that the Chancellor talked about is now off-balance sheet—it is what some people unkindly. but perhaps accurately, call Enron accounting. As far as we are concerned, that ties a Labour Government into an increasing dependence on PFI schemes and PPP programmes. It is clear from the Budget booklet that some 60 per cent. of the Government investment that is mentioned comes through the mechanisms of PFI schemes. We then create a legacy of poor direct public investment as a result of moneys being raised by the Government and put directly into those infrastructure programmes. Many of the Chancellor's problems stem from the legacy of the failure of privatisation and of precisely the kinds of PFI schemes that we are now struggling to make work. Given the freedom to invest under the years of Tory
    358
    Governments, the one lesson that we should have learnt is that the private sector is not willing to invest in that infrastructure provision unless it is paid handsomely and given Government guarantees that the risk will remain with the public sector, with the private sector taking only the assets and profits.
    The scale and folly of those presumptions is best illustrated by the complete collapse of the stock market over the past three years. The disaster that that will bring to private pension provision will be of awesome proportions. I offer the Chancellor and the House the possibility of a way out of that mess. I shall not feign false modesty when I suggest that hon. Members should attempt to read a pamphlet entitled "People's Pensions", which was recently published by the New Economics Foundation. The reason why I shall feign no false modesty is that it was written by me, Richard Murphy and Colin Hines, who brought to bear their experience and expertise in pension provision. The pamphlet examines where the theft of public money has gone in recent years. When Conservative Members talk about the Chancellor's £5 billion raid on pension funds, we should set that in the context of the market's raid on pension funds over the past three years—£350 billion has been wiped off the value of people's pensions as a result of speculation against this bubble economy.
    Workers put about £50 billion a year into their pension funds. Eighty-five per cent. of that money has gone into share speculation, and 43 per cent. of the value of those funds has been wiped out in the past three years. Less than 1 per cent. of share speculation has gone into new share issues—the rest of the money has been spun round. The shares are dead shares, in that they were issued long ago and the buyer pays the last bank that owned them. People may think that they are buying shares in ICI or Courtaulds, but they are not. That generated no new capital investment, but locked us into a speculative economy that span wildly out of control and has now collapsed around our heels. The outcome is that there has been no structural investment, and for many people there are no bloody pensions either. They have been left in that situation as a result not of the Chancellor's theft, but of theft by the market.
    In 1962, 51 per cent. of pension fund assets went into Government bonds. By 1993, that had fallen to 7 per cent., driven by the presumption that the free market and speculation represented the answer. Our framework for people's pensions proposed new mechanisms for putting workers' savings into public investment to improve the quality of services and to give them a secure pension, none of which would disappear in the bursting of a dotcom bubble or anything else that followed. Going down that path would profoundly change the whole framework within which the Chancellor can construct the Budget. If only half of today's pension fund savings went into that sort of people's pension fund, we would have massive savings on which the Chancellor and society could draw. If those had been in place, we could have paid for the entirety of the Government's public investment programme for the past five years and have reduced the national debt by £18 billion a year. We would not have needed a single Mickey Mouse PFI scheme. We would have had no need to pay for any increase in public sector borrowing over

    359
    the next five years. That would have allowed us to pay for the restoration of the state pension and its link with earnings.
    Mr. Tyrie: Could the hon. Gentleman explain why he thinks the Government did not do so?
    Alan Simpson: I spent a few months working on the idea and I realise that all Governments have to catch up. Part of the problem has been the crazy flirtation with speculative free market economics, which has got us into precisely the mess that we inherited from the Conservatives when we came to government. Breaking from that set of economic blinkers is the biggest challenge that we now face as a Labour Government.
    If we were to do so, all those elements that I just set out are within the Chancellor's reach, but he has to make a choice. It is a political choice. He can side with the savers, but in doing so he must challenge the speculators. He can deliver the schools, hospitals, houses and public transport services that the public want, but he has to do it by ending the private casino that has been allowed to play with your and my deferred wages, which have gone into those pension funds, Mr. Deputy Speaker. He can restore and secure pensions on the basis of an investment programme that he longs for, but only by ending the love affair with the free market economics that have dragged us into the various crises that we now face.
    This is not a poor country, but we have become poor in vision and poor in political conviction. That is the challenge that I want the Chancellor to rise to.
    6.7 pm
    Rev. Martin Smyth: We have heard an interesting speech from the hon. Member for Nottingham, South (Alan Simpson). It reminded me of a contribution from one of his predecessors. The former leader of the Labour party, Neil Kinnock, asked why more money from our national insurance contributions had not been invested in pensions. Perhaps no money was ever invested because Chancellors were frightened of speculative investment. The reality was that one generation's contributions paid for their fathers' pensions. It was living from hand to mouth.
    The hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) made a valuable contribution. Following the hon. Member for Hayes and Harlington (John McDonnell), he said that at least the issues were being examined seriously in this debate. That sentiment was endorsed by the hon. Member for Nottingham, South when he referred to his hon. Friend the Member for Hayes and Harlington.
    As I understood it, the Chancellor's contribution to the Iraq war came from the contingency fund. I did a little calculation as the hon. Member for Hayes and Harlington was adding up the sums. He estimated that there was about £3 billion, not for contingency reserves but for regular allocation. That is one of the issues that every Government will have to face as they try to produce a Budget that will deal with day-to-day issues, but will also have something in the contingency reserve.
    The contributions to the debate have been useful and stimulate our thinking. Budgets must always be treated with caution, particularly given the modern trend of
    360
    spin. They are prone to contamination by gimmickry and re-announcement, as was demonstrated with the introduction again today of child trust funds, which the Government made known some time ago. People out there, however, who might have missed such an announcements will think that the proposal is a new one. It is not fair to create that impression. Against that background, our reaction must be guarded. Budget announcements tend to unravel in the fullness of time as the facts emerge from beneath the spin.
    The Budget is less dramatic and more anaemic than others from the Chancellor, but some of its contents are certainly welcome. I agree with those who have already welcomed such things as abolishing the penalisation of elderly people through deductions from their pension while they are in hospital. That change is long overdue.
    I welcome the extra £100 for the heating allowance for people aged over 80. However, I should have liked a greater increase for all pensioners, although we need further examination of how that could best be achieved. Means-testing may be the best way to target the less well-off, but it might be simpler to make benefits universal as the money can be clawed back in taxes from those who are well off. I am not sure that means-testing is the answer.
    Mr. Kelvin Hopkins: I am following the hon. Gentleman's speech with interest. If the minimum income guarantee was the basic state pension, would that not solve the problem that he describes? In that way, we could get rid of means-testing and link pensions with earnings
    Rev. Martin Smyth: That is a worthwhile suggestion. However, it is argued that the minimum income guarantee is the only way to ensure that money goes to the people who really need it. I disagree, but that is the argument that we shall have to face. I hope that Ministers on the Treasury Bench have heard the hon. Gentleman's point.
    Many of the usual targets raided by the Chancellor have been frozen or held to rises in inflation. I am especially glad that air passenger duty has been frozen and that fuel duty has been frozen until October. Even so, any increase in the duties is unfavourable to Northern Ireland, which is the only part of the United Kingdom that has a land border. We suffer from the aviation tax, although it will, sooner or later, affect everyone.
    I am pleased about the moves to help small businesses by reducing some of the regulation and red tape that burden them. Small businesses are essential in most of our constituencies, and certainly in south Belfast where we do not have many large industries. Local communities will benefit from the changes.
    I have long advocated more Government help for small businesses through economic and rating policy. We are suffering a complete revamp of rating in Belfast and throughout Northern Ireland. One nursery found that its rates bill rose from £1,000 to £20,000. That had nothing to do with the value of the property; the valuers had estimated that if it was let as offices, it would raise more money. But what will happen to the young married couples who are paying for child care while they continue their professional careers, as the Government,

    361
    in other ways, encourage them to do? Some of those couples will find it extremely difficult to meet the increased nursery charges and that will result in another downturn in our economy.
    As the hon. Member for Roxburgh and Berwickshire pointed out, the Government will have to look into the whole insurance business, which has gone haywire throughout the kingdom. In Northern Ireland, only four insurance firms provide cover for the construction industry and other industries. Small charities and community and voluntary organisations are under extreme pressure, mainly because insurance companies say that 9/11 made such a difference. Others say that the problem has been caused by the downturn in investment in stocks and shares. Whatever the reason, I suspect that insurance companies are ensuring that they cream off money from people irrespective of the hardship that that causes them in carrying on their business.
    On the international stage. I welcome the £240 million in humanitarian aid for Iraq. That announcement is particularly apt on the day when the Iraqi people are joyously reacting on the streets of Baghdad, as the realisation sinks in that the days of Saddam's reign are over. However, although I welcome what the Chancellor has been trying to do and rejoice in some of his successes in international aid. along with those of the Secretary of State for International Development, I would press him to do more on the concept of trade justice. The larger countries are erecting barriers or trying to break them down to suit themselves, but they are hindering the development of small countries and developing countries that cannot meet the tariffs so often imposed on them.
    I would argue that trade justice is one of the best ways to help people and to allow them to produce goods in a way that develops their economies, rather than simply protecting our own. I hesitate to say that the United States is a nation that should think a little bit more about lowering some of the tariffs so that the rest of the world can compete. I do not join those who talk about a level playing field, for I have never played on a level playing field, but trade justice would make things a little more equitable and help those emerging countries.
    I trust that we shall follow the argument of the hon. Member for Dumbarton (Mr. McFall) on that score, but we got into a little contretemps about productivity. There are those who think that training and education will improve productivity. It ought to —I would encourage it—and I regret the fact that so few people go beyond even NVQ1 and that others stop at NVQ2. Individuals and businesses must be encouraged to increase their knowledge, but having said that, we have to re-establish in our country the concept of a work ethic. It has been put to me, quite seriously, that some firms are moving their production to developing countries not because labour is cheaper there, but because people have jobs and are in work.
    As I said jocularly to a colleague near me on the Bench in an aside, the tragedy is that many in our work force today spend more time discussing the results of the Manchester United-Real Madrid match last night—or perhaps for the younger folk, what happened on their latest date—than doing the work for which they are paid. Dare I mention the presence of mobile phones?
    362
    People receive phone calls during their working time—there is no difficulty about taking those calls—but they are not paid to do their private business in working time. If we are to increase our productivity, we certainly have to raise the skills of our people, but we also have to remember the work ethic.
    In 1983, I visited Taiwan and Hong Kong. I came back amazed because I discovered that people in Taiwan had turned round a firm that manufactured televisions in England and made it a productive entity. I discovered that firms in Hong Kong were using computer-aided design technology when our firms were still labouring in the old style. We have to improve all that, and I trust that the Chancellor's decision to try to spread technology through the regions will develop because I speak for a region that has been put down often as the poorest. I have often thought that we would love to be like the south-east region, which gets Government subsidies for research and development, Government buildings and so on. We would much prefer to have such things in our constituencies, rather than handouts and people not getting jobs.
    6.20 pm
    Mr. Barry Gardiner: It is always worth rereading speeches made by the shadow Chancellor and the Leader of the Opposition if one wants a good laugh. I perused the speeches that they made during last year's Budget debate, and I was not disappointed. The Leader of the Opposition recycled much of them verbatim today, but last year he said:
    "The NHS should, as we all agree, offer people the best treatment regardless of their ability to pay.—[Official Report. 17 April 2002; Vol. 383, c. 596.]
    The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) said last year:
    "Of course, we acknowledge that more resources are required for the NHS"—[Official Report, 23 April 2002; Vol. 384, c. 243.]
    By opposing the measures that my right hon. Friend the Chancellor set out today, they have set their party against the 7.5 per cent. real-terms rise in the national health service budget year on year through to 2008. They have set their party against the 80,000 extra nurses, health visitors and therapists, and the 25,000 extra doctors that the Labour Government will have delivered since 1997. And they have set their party against the wish of the British people to see real investment in their public services.
    I am sorry that the Chamber is now denuded of Conservative Members, except for one honourable exception on the Front Bench, because had I made my speech earlier, Conservative Members would no doubt have protested at this point. That happened when my hon. Friends suggested that the Conservative party was vulnerable on its desire to cut back on our national health service. I cannot understand why Conservative Members did that, because we can read the words of the hon. Member for Arundel and South Downs (Mr. Flight). He said in a memo:
    "We remain vulnerable to the irritating attack that we are the party who will be cutting back on health care expenditure to reduce taxation."
    He continued:
    "The reforms which we will be proposing will end the NHS monopoly…and will entail those who can afford it making some payment for health care services".

    363
    Of course, Conservative Members have jumped to the aid of the hon. Gentleman during today's debate and attacked Labour Members who suggested that the official Opposition plan to cut up to 20 per cent. from expenditure on public services. However, we have that on record, too. The hon. Member for Arundel and South Downs was quoted in The Daily Telegraph of 28 December 2002 as saying:
    "I am digging through current spending, finding opportunities for cuts. It's too early to say how much, but it could be up to 20 per cent."
    Conservative Members said earlier that there was a misunderstanding and that Labour Members had got it all wrong. They said that the hon. Gentleman was talking not about 20 per cent. cuts to public expenditure as a whole, but about tackling waste—something that we would all want to do. They tried to add finesse to his words by saying that he was looking simply at cutting overheads.
    I always believe that if one cannot get sense out of the monkey, one should go to the organ grinder, so I shall quote what the Leader of the Opposition said on "The World at One" on 30 December 2002. He did not talk about waste or overheads. He said:
    "They're looking at the target of 20 per cent. savings across the board in Government spending … That's what we're looking at and we're beginning to come up with figures that will build towards that total."
    It is quite plain: the Conservatives have made a commitment—although they are trying to retreat from it as fast as the Iraqi tanks—to cut spending on the health service by 20 per cent. That is why they oppose the Budget.
    Perhaps the most instructive line from the Leader of the Opposition in his speech last year was:
    "The Chancellor's record speaks more eloquently than his rhetoric ever can."—[Official Report, 17 April 2002; Vol. 383, c. 597.]
    For once, I agree with the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith). Let us examine that record. The underlying rate of inflation—just 2.9 per cent. in the year to January 2003—has stayed comfortably within the target range that the Chancellor set of between 1.5 and 3.5 per cent. since January 1997. I remember what it was like running a company in the City when the right hon. and learned Member for Folkestone and Hythe was at the Treasury and inflation was in double figures. I assure him that the Chancellor's record does indeed speak more eloquently.
    Mr. Tyrie: My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) was never in the Treasury.
    Mr. Gardiner: The hon. Gentleman is right, but the right hon. and learned Gentleman was a member of the Government when inflation was in double figures.
    The success has been largely achieved by the Chancellor's initiative back in 1997 to pass control of monetary policy to an independent Bank of England. In turn, that has led to historically low interest rates helping to foster investment and to stimulate and sustain demand during difficult economic periods. Currently at 3.75 per cent. and at 4 per cent. for 14 consecutive months up to February this year, we are a
    364
    far cry from the days of interest rates at 15 per cent., when more than 300,000 families had their homes repossessed. So on that, too, the Chancellor's record is eloquent. The saving in mortgage payments to the average family calculated over the term of this Government compared with the previous Government is now more than £2,500 in each and every year.
    Britain's economy has grown at a steady rate of 2 to 3 per cent. over the economic cycle. It did not overheat during the dotcom boom. Between 1998 and 2000, average growth in the UK was 2.8 per cent., whereas in the US it ran at 4 per cent. and in the eurozone at 3.1 per cent. But it did not fall away in the aftermath, when average growth between 2001 and 2002 stayed steady at 2.1 per cent. while it plummeted to 1.5 per cent. in the US and the eurozone. That resilience should not be underestimated. Twenty countries, making up half the world's output, are in recession or have been so in the past two years, while the UK has sustained a small but steady growth. That shows that, although we cannot get rid of the economic cycle, we can iron out the boom and bust that were its excesses. The Chancellor's success is that recessions do not cut us so deep. The problem that he faces, of course, is that the good times do not come quite so high.
    Let us consider another aspect of the Chancellor's record. Unemployment, currently at almost 5 per cent., has seen a steady and stable decline from the 7.2 per cent. at which it stood in 1997, with the new deal specifically tackling long-term unemployment. Unemployment is now 13 per cent. lower than it is in the US, 35 per cent. lower than in the G7 and more than 50 per cent. lower than in the eurozone economies—and that is after introducing the national minimum wage, which the Opposition said would scrap 2 million jobs.
    The OECD forecasts that the UK economy will maintain its position ahead of the other economies and predicts that unemployment in Britain will fall to 4.9 per cent., while it remains high in the eurozone at 8.3 per cent. of its work force.
    I want to point out in passing to those who are rightly concerned about the UK's productivity levels, including the right hon. Member for Wokingham (Mr. Redwood), who is unfortunately not in his place and whose speech displayed particular ignorance of the causes of low productivity—[Interruption.] I was in the Chamber when he spoke. It is comparatively easy to improve productivity by allowing high unemployment levels in the economy. It is precisely the least productive part of the population that, by definition, is most difficult to get into work. As one does so, productivity falls.
    It is therefore always important to consider productivity against the context of levels of employment and economic growth to arrive at a true picture. When set against the stable and steady growth figures, and the historically high numbers of people in work, the problem of productivity does not go away, but it certainly diminishes within our economy.
    In July 1998, the Chancellor outlined two fiscal rules to guide his policy making to ensure transparency, sustainability and credibility. He attempted to create a framework similar to that in relation to monetary policy and the Bank of England, moving away from short-term political cycles and using a mechanism of pre-commitment to make his decision making open and

    365
    accountable. The golden rule states that the Government will borrow only to Fund investment, not to fund current expenditure. That aims to ensure that future generations will repay only debt, the accumulation of which will have benefited them through the stock of capital that it financed. The sustainable investment rule states that public sector debt should remain at a stable and prudent level, interpreted by the Chancellor as no more than 40 per cent. of national income. By constraining the total level of debt allowable, the long-term sustainability of the public finances is ensured.
    Those rules have been key to restoring credibility to the UK as having a Government who are responsible with their finances. That demonstration has required both courage and a belief in social objectives that lie beyond elections and the artificial cycles that they foster. The Chancellor's current commitment to meet those rules across the economic cycle remains intact. Those rules have set the tone for this Government, demanding greater value from public services, no new money without increased performance, and engendering confidence in the future throughout the financial markets, industry and the consumer sectors. Taming the public sector borrowing requirement has been one of the Government's single greatest achievements.
    Again, that has not been the result of favourable macro-economic conditions, as the GDP figures that I outlined above demonstrate. From 1998 to 2002, the Exchequer has run repeated and consecutive surpluses, bringing public sector net debt down from 44 per cent. of GDP in 1997 to 31.3 per cent. in 2002. The Opposition frequently challenge those figures by pointing to the amount of off-balance sheet accounting that the Chancellor has done through the private finance initiative. That is simply inaccurate. If PFI deals are included in that figure, debt as a percentage of GDP increases by another 3.8 per cent., according to the Institute for Fiscal Studies. That means that even at the peak of Treasury debt to GDP forecasts, in 2007–08, the total including PFI would not exceed 36.8 per cent, which is comfortably within the Chancellor's target of 40 per cent. and a whole 7.2 per cent. lower than this Government inherited from the Conservatives. When it comes to records, therefore, the Chancellor's is eloquent.
    If we compare the present tax and benefit system with the one that Labour inherited in 1997, we see that the Chancellor has introduced approximately £51.7 billion of revenue-raising measures, but against that he has introduced £53.3 billion of revenue-reducing measures: a net benefit to the British public of £1.6 billion a year. More importantly, the redistributive effect of changes in the tax and benefit structure has been to boost the incomes of the poorest decile of the population by more than 15 per cent., while the loss to the richest decile is approximately 3 per cent. In summary, the outlook for the UK economy, as the International Monetary Fund points out, is better than for every other comparator country.
    One feature of a balanced economy is that individuals have to compete for jobs, but unemployment is low; consumer demand is strong, but inflation remains under control. One of the costs of stability is that the highs are
    366
    never that high. Indeed, the factor that often delivers the greatest high—wage inflation—has been a firm target for the Government, and has been restricted in both the private and the public sectors. The doctrine that wages rise only in response to improvements in output and not as a career right is gradually being accepted, but it is important to realise that that has an adverse effect on short-term confidence. In short, as the economic environment is better understood, the fundamentals of the current situation will be viewed as business as usual.
    Nothing could disrupt that business as usual quite as much as the decision that my right hon. Friend the Chancellor has to take within the next two months. If the UK joins the euro, it will be subject to the further constraints of the stability and growth pact and the excessive deficits procedure in the Maastricht treaty. In particular, the Chancellor will be concerned that the balanced budget rule would make it difficult to lay down investment that will benefit future generations. The European Commission now suggests that that rule be considered in the context of the position in the economic cycle and that provision be made to spread the cost of beneficial investment that passes benefits down the generations. If Europe is learning from the Chancellor's golden rule, all well and good, but I counsel caution when assessing whether the five economic tests have been met.
    Let me immediately set aside the tests where joining the euro would hold no dangers for our economy. Investment will almost certainly rise as inflation, interest rate and exchange rate risks are removed, and the costs of trading with Europe fall—no problem there. As for the impact on the City, the factors that have led to the trade of financial products being located in London are wider issues of liquidity, access to capital, the skills base, the communications infrastructure and a sound regulatory environment. Those issues are broadly independent of currency, so there too I foresee no dangers.
    On jobs and prosperity, investment may produce a short-term increase in employment, but Europe's labour markets are far more restrictive than the UK's. Ultimately, that may present problems, but it might be worth making that call. As for convergence with the eurozone economy, GDP growth, unemployment and the output gap are not aligned, although they are closer than they were in 1997. Addressing that is difficult, because on all those indicators Europe is lagging behind us—we have to wait for it to catch up with us. Equally, if we wish to join in the near future, the economy cannot afford to grow too much. Growth of even 2.5 per cent. while Europe is in recession will result in large gaps opening up and causing real problems in meeting the criteria. Convergence of cycles is about more than just having the same vital signs at the point of entry; it means having the same cycle, and experiencing and responding to the same shocks and stimuli thereafter.
    If the Chancellor decides to take us into Europe, my assessment is that he might have needed to use the Budget to push us closer to European taxation and labour laws and bring spending and borrowing more closely into line with European norms. I am not saying that that is desirable; I am simply saying that it might have featured in today's Budget if the Chancellor were to be able to meet his criterion on convergence.

    367
    The final test of flexibility poses the greatest challenge. I doubt whether our economy is flexible enough at present to lose the shock absorber of its own exchange rate. The pound is too strong to join the euro—Goldman Sachs estimates an entry level of €1.37, but the pound is presently at €1.47. Moreover, fiscal constraint to stop the public sector borrowing requirement running at more than 3 per cent. of GDP will severely restrict the Chancellor, irrespective of the overall level of debt. I suspect that that loss of flexibility, so necessary to our economy as set by the Red Book figures on the public sector net cash requirement released today, means that the UK economy must continue to hoe its own row outside the euro for some time longer.
    This is a modest Budget. By the Chancellor's previous standards, it is certainly undramatic. That is why much of the hyperbole coming from the Opposition today is implausible. This Budget is sensible and maintains the investment promised last year for our public services. Those investments are, in themselves, extremely dramatic, but they were announced last year. What is impressive today is that they can be maintained despite an adverse global economy and within the Chancellor's own rules. The fundamentals are good.
    Madam Deputy Speaker (Sylvia Heal): Order. A number of Members are hoping to catch my eye. If those who speak can be concise in their remarks, all might be successful.
    6.40 pm
    Malcolm Bruce: I shall not comment on the speech made by the hon. Member for Brent, North (Mr. Gardiner), but I think that it is more valuable if people who contribute to the debate have actually taken part in it, rather than just turning up halfway through, or even three quarters of the way through.
    Mr. Gardiner: Will the hon. Gentleman give way?
    Malcolm Bruce: No, I will not.
    Those of us who have been here have taken part in a good debate, in which the general consensus from both sides of the House has been that the Chancellor has produced a Budget of extreme modesty in terms of its material content and the extent to which it has changed the background situation. Indeed, one of my colleagues has said that, in spite of the fact that the Chancellor spoke for an hour, the content of his speech was less substantive than some written answers.
    The problem that the Chancellor faces is that he is presiding over a severely imbalanced economy in which, although the overall macro-indicators look good, there are fundamental weaknesses and a very fragile foundation to economic confidence. Manufacturing is in serious recession, and has been for a significant amount of time. We also have a serious balance of payments deficit, which has become the dog that does not bark, in current economic terms, but nevertheless ought to be recognised as a constraint. That deficit also illustrates that, wherever one might be coming from in the argument over the euro, there is something artificial about the exchange rate for sterling, because if the
    368
    balance of payments is an indication of the overall performance of the British economy, the sterling rate should clearly be lower.
    We now face a situation in which the EU is likely to enlarge in circumstances that will aggravate that position. In an intervention on the hon. Member for Dumbarton (Mr. McFall), I made the point that it does not require rocket science to understand—indeed, it is common sense—that, with 10 new members coming into the EU, all of which are committed to signing up for the euro and have very low labour costs, the reality will be that much of the new investment generated within the new, enlarged EU is likely to go to those countries in almost any circumstances. The United Kingdom will also become the most disadvantaged member of the European Union if we do not resolve the uncertainty about our future relationship with the EU. This will involve not only a failure to attract inward investment but British investment relocating to more competitive parts of the European market.
    As is traditional with the Chancellor, the Budget was full of all kinds of complex initiatives and undertakings on which he will report back in due course. Some might yield positive results; some will probably be little more than gimmicks that might never be heard of again. We must accept, however, that consumer spending, which has sustained the economy and kept the UK growth rate performing relatively well, is fundamentally based on the inflation of our internal property values. There are two problems with that. One involves the extent to which our trading partners will indefinitely allow us to trade with the world on the basis of simply rebasing our own property values. The second involves the extent to which internal confidence will be maintained. People might have borrowed against the increased value of their property and, in the situation that we are approaching, in which the property market is levelling off or might turn down, that confidence will no longer be there.
    Two further problems will result from that. People who have borrowed in that way will find it difficult to maintain their payments, and people who would have borrowed will be discouraged from doing so. That will take some of the growth pressure away from the economy. All of that could lead to what everyone agrees are rather optimistic forecasts by the Chancellor being proved to be extremely optimistic. We could then find ourselves in difficulties. We are not there yet, which is why my right hon. and hon. Friends acknowledge that the level of borrowing has had to be increased compared with the previous forecast. That is significant and the trend is worrying, but we accept that in the current year it is legitimate to operate on that basis. It may be more difficult to do so in the years that follow.
    The Chancellor mentioned regional policy. He listed a number of initiatives but they did not seem to be radical or substantive. He said that he would try to persuade public agencies to disperse jobs from London. He talked of the potential of 20,000 jobs. He was clearly indicating that there is no darned way in which Government Departments will do that, so he will try to persuade the next line of public agencies to take that course.
    We need a dynamic, within the United Kingdom to encourage private investment to go to the regions. I think that the methods of the 1960s would be

    369
    unacceptable to Members on both sides of the House. We need no directions and no penalties, but a positive dynamic that encourages investment in the nations and regions.
    I say as a Scottish Member that when we examine the forecast for Scotland we see with considerable alarm that the population projections are falling extremely sharply. Many of us who live in Scotland and represent Scottish constituencies feel that the quality of life is extremely good. However, it seems to many of us that the more that we train people in Scotland, the faster they leave. We are looking to the Government to provide a dynamic. Devolution is part of the process, but there are United Kingdom policies that are necessary, especially investment in infrastructure and communications, which in a small island can enable people to operate effectively and can encourage growth.
    The idea of regional cost indices seems to be rather odd. Presumably it is the precursor to regional weightings based on local costs, which means that market forces will effectively be nullified. That may well meet the social needs of communities but it will discourage redistribution.
    In many ways, the home counties are overheated and under enormous pressure. Regions of England, Scotland and Wales are under-invested and do not have constraints. It seems logical for everybody that if we can take away the pressure from London and the home counties and provide dynamic growth in the regions, we shall liberate the entire economy. It behoves the Chancellor to lead that debate in a way that I fear he has not.
    I welcome the Chancellor's proposals on petroleum revenue tax, which I think will help to promote investment in the oil and gas industries and offset the damage that the right hon. Gentleman did last year by imposing additional taxes on them. I welcome also the freeze on spirits duty. I remind the House that Scotland produces not only whisky but the majority of gin that is distilled in the United Kingdom. The Chancellor has been confronted by necessity. He knows that extra tax will result in a loss of revenue.
    The Chancellor has had a run of luck, and he may still have a further run of luck. All of us wish the economy to succeed, so we do not wish the Chancellor to fail. However, he needs to come clean and to recognise that there are imbalances and structural weaknesses in the economy that he cannot get away with indefinitely. He would be better advised to act now to ensure that we maintain investment and to address the imbalance. If not, he will find that he has an economy that is struggling and will not provide the revenue to fund health, education and public service improvements and the redistribution that all of us want. It is a warning. The Chancellor must do more than he did today to show that he understands that.
    6.49 pm
    Mr. Andrew Tyrie: The key question is whether the economy is better placed or less well placed than it was in 1997 to weather what could be quite a bumpy international economic ride, with a lot of macro-economic adjustments that need to take place in the
    370
    American economy over the next few years. American consumption as a proportion of disposable income is more than 100 per cent. There is a need to retrench and consolidate, and the American economy may not be such a great engine of growth for the next year or two as it was in the 1990s.
    It is clear that the economy is in much worse shape than in 1997. Borrowing is rising, and it will more than double in the projections for 2003–04: an increase from £13 billion to £24 billion. Spending is high, rising and probably running at unsustainable levels. Most significantly of all, taxes and the tax burden will continue to rise throughout the planning period, which will erode incentives for wealth creation.
    I am particularly struck by an absolutely crucial graph on page 261 of the Red Book, which for the first time shows that Labour intends to increase the tax burden year on year throughout the planning period for the seven years to the end of the decade. Every other Red Book that Labour has published showed that there would be a blip up, arguably to pay for a little extra investment in the public services, and that that would plateau and then start to fall. This time, Labour has been unable to use that trick; this time, it has to admit, as the whole British public will get to know, that the tax burden is to rise every year. Labour has told us so, and now we know.
    The story of how we reached this state of affairs, which although not quite disastrous represents a much weaker position, can be told in three phases. The first was the new Labour phase—the first two years of the Chancellor's Budgets when he kept public expenditure under control, the only major tax grab being the abolition of advance corporation tax, and when monetary policy was farmed out to the Bank of England.
    We also had a lot of plausible-sounding economics with the golden rule and the sustainable investment rule, which we all now know are virtually meaningless. The golden rule is meaningless because, of course, it is impossible to distinguish between current and capital spending in the public sector. How can capital spending be defined in an area in which no income stream is secured? The sustainable investment rule has been rendered virtually meaningless by the fact that a huge amount of off-balance-sheet finance is taking place. The private finance initiative is running at massive levels and there are also huge contingency liabilities off balance sheet in the back of the Red Book. The last plank of the original phase 1 economics put forward by the Chancellor was the "neoclassical endogenous growth" theory. The language has disappeared, but the policy is still with us. Successive Budgets have contained one micro-management measure after another, which tried to achieve a bit of research and development here and a bit of internet investment there. That absolutely crazy policy is exactly the way to waste public money and, in the end, burden businesses rather than set them free.
    Phase 2 was the two years after the 2000 Budget, which brought about a huge spending increase. It seemed that taxes did not have to rise. That was because the tax yield unexpectedly rose very quickly. There were also windfall gains from sales in the spectrum and one or two other areas. That was a nirvana for Labour. Middle

    371
    England was happy because taxes were not rising and Labour heartlands were happy because the Government were able to spend more money.
    Of course, that did not last. The spending will turn out to be unsustainable, as everything was based on overoptimistic growth assumptions. Even a slight blip in the growth forecast leads exactly to the content of phase 3, which started last year. Phase 3 is the national insurance contributions increase and the decision sharply to raise taxation, which has been continued in this Budget. Allowances have been frozen. That has not been mentioned much in the debate, although it represents another sharp increase in taxation. There is a graph sitting in the Red Book that tells us that, year on year, the tax burden will go up. Who will pay for that? Middle England.
    Those three phases of the Chancellor's economics amount to a move from new Labour economics to old Labour economics. We used to have new Labour; now we just have the Labour party. We have what we have always had in this country: a spending binge, which is paid for initially by a bit of taxation, and then, when things do not work out as expected because there is so much complacency about growth, a collapse in revenues as growth tails off. Finally, there have to be massive increases in borrowing. That is what we could be on the edge of now.
    The next few months or possibly year or two will be determined by the relationship between No. 10 and No. 11. As far as I am aware, No. 10 still thinks that there is something called new Labour economic policy. The Prime Minister even said a few years ago that he wanted to get taxes down. There is a war on of course, so he probably has not looked at page 261 of the Red Book. Whether new Labour eventually prevails and the Chancellor ends up being put back in his box or moved to some other post, or whether the Chancellor prevails from No. 11 and imposes that new policy on a longer-term basis, will determine not only the prosperity of the country, which will go down the tubes if these policies are maintained, but British politics in the years ahead.
    6.55 pm
    Mr. John Baron: I welcome certain aspects of the Budget, certainly the efforts to combat world poverty, but it will be a disappointment to both businesses and residents in my constituency, as there is little in it that helps them. Businesses in particular will be disappointed because they have been increasingly burdened with red tape and taxes since the Government came to power in 1997. The Government have produced about 15 new regulations every working day, a significant increase on before. There is little in the Budget that offers relief from that torrent of regulation and taxes.
    In the House we are apt to quote august bodies to reinforce our points but what is perhaps more important is to get the views of those at the coal face, those creating wealth in our society. To that end, I sent all businesses in my constituency a pre-Budget survey seeking their views. Despite the views of Labour Members, the overwhelming response was that businesses are wasting much more time than previously on dealing with Government regulations and that those regulations and new taxes are costing them dearly and proving to be a
    372
    real handicap in the running of their businesses. They were particularly scornful of the rise in national insurance contributions, many believing that that would adversely impact on employment prospects.
    Time and again, entrepreneurs are saying that the weight of Government regulation and taxes is slowing growth and in some cases forcing them to downsize. Various statistics bear that out. For example, there were 16,000 insolvencies in 2002, the highest number since 1994, according to the Department of Trade and Industry. Those may be abstract figures to many but they illustrate a growing problem: our decreasing competitiveness. No wonder Digby Jones, director general of the CBI, said last month that the UK's reputation as the place to do business has never been under greater threat.
    What Governments tend to forget is that the burden of red tape always falls disproportionately on small firms, which is particularly worrying as they are the lifeblood of our economy. Small companies simply do not have the departments or personnel to deal with increased regulations. It is often the entrepreneur who deals with the paperwork, when he or she would be better employed running the business and creating wealth.
    That is the central point. Budgets should be about improving the country's economic performance and wealth creation. We would then be in a better position to give help to those who need it. The relief of poverty should be one of the main objectives of politics but that can be better brought about if we foster personal freedoms within the rule of law, encourage enterprise and allow businesses, especially small businesses, to breathe and thrive. Such an approach will create a more prosperous economy and more wealth from which the Government can take their rightful share to help the truly disadvantaged in society. That will not happen, however, if the Government pile regulations and costs on to businesses because that will hinder enterprise and in turn our ability to help those most in need. The Government have continued to make life difficult for entrepreneurs and the Budget does little to put that right.
    It is not only businesses that will be disappointed by the Budget but the millions of taxpayers who have seen many tax increases and very little for it. The Prime Minister said before he became Prime Minister:
    "We've no plans to increase tax at all".
    We have had 53 tax increases under Labour. The Chancellor seems to have forgotten that spending alone does not solve problems. It is the quality of the investment rather than the amount spent that determines whether extra spending is translated into better quality services.
    My constituents, having paid much more in taxes, are now rightly asking certain questions. Commuters are asking why the punctuality and reliability of our trains have declined each year under Labour. Patients are asking why accident and emergency waits are so bad and why they are short of general practitioners. Parents are asking why teacher vacancies almost doubled under Labour, and assaults on—
    Debate adjourned.—[Mr. Kemp.]
    Debate to be resumed tomorrow.

  PETITIONS

    South Oxhey Hostel
    7 pm
    Mr. Richard Page: I wish to present a petition on behalf of the residents of South Oxhey, an estate in my constituency, recording the objections of residents to a proposal to develop a homeless young persons' hostel in Gosforth lane, South Oxhey—on a site designated metropolitan green belt—on the basis that it might be considered dangerous, as the site is close to the road, on a bend, and off-street parking would be more appropriate.
    If I am to be strictly accurate I cannot say that the residents' objection is unanimous, but I am also accurate in saying that not one person has told me that he or she is in favour of the proposal. I must, I suppose, confine myself to saying that the vast majority oppose it. Over 1,000 signatures have been recorded in a very small area over just a few days, and even more are being collected as I speak. I join my constituents in urging the Government to take steps to prevent the development of the hostel.
    To lie upon the Table.

    Pharmacies
    7.1 pm
    Mr. Mark Francois: My petition bears more than 2,500 signatures from my constituents, who are very concerned about proposals from the Office of Fair Trading that could lead to the closure of a number of local pharmacies. Signatures were collected at pharmacies throughout my constituency, and the petition was presented to me recently at the Ferry pharmacy in Hullbridge, owned by Mr. Yogesh Patel. It reads as follows:
    To the Honourable Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
    The Humble Petition of the constituents of Rayleigh in Essex Sheweth,
    That local communities are best served by local pharmacies and that the OFT's recommendations to abolish the "control of entry" regulations could seriously damage local pharmacies.
    Wherefore your Petitioners pray that your Honourable House shall urge the Government to reject proposals that could damage the operation of local pharmacies and instead to preserve them and to safeguard their continued services to local communities.
    And your Petitioners, as in duty bound, will ever pray, etc.
    To lie upon the Table.
    7.3 pm
    Miss Anne McIntosh: It gives me great pleasure to present a petition from the residents of my constituency on a subject about which I feel passionate, and to which I give full support. The petition
    Declares that we are concerned at the Office of Fair Trading report on NHS control of entry regulations and retail pharmacy services in the UK.
    The Petitioners therefore request that the House of Commons urge the Secretary of State for Trade and Industry and the Secretary of State for Health to reject proposals that would allow
    374
    unrestricted opening of pharmacies able to dispense NHS prescriptions, and to preserve local pharmacies and safeguard their continued services to local communities.
    And the Petitioners remain etc.
    The first signature is that of Mrs. Gillian Treharne. The total number of signatures is 1,320.
    To lie upon the Table.
    7.4 pm
    Dr. Andrew Murrison: I too rise to present a petition in support of community pharmacies, and I am pleased to follow my hon. Friends the Members for Rayleigh (Mr. Francois) and for Vale of York (Miss McIntosh) in so doing.
    The petition, which is signed by 1,643 constituents and others, reads as follows:
    To the House of Commons.
    The Petition of the users of dispensing chemists in the Westbury constituency and others
    Declares that the proposals of the Office of Fair Trading to allow unrestricted opening of pharmacies would be harmful.
    The Petitioners therefore request that the House of Commons urge the Government to reject those proposals by the Office of Fair Trading, and to preserve and safeguard the services offered by local pharmacies to their communities.
    And your Petitioners remain, etc.
    To lie upon the Table.
    7.6 pm
    Mr. Christopher Chope: I, too, have pleasure in presenting a petition of users of the Parley Cross pharmacy, which is in my constituency. This is the third such petition that I have presented from users of community pharmacies in the Christchurch constituency.
    These constituents are amazed that the Government in England are still in two minds about this issue, given that we hear from a Minister in Northern Ireland that he has already decided to reject these proposals, as indeed have the Welsh Assembly and the Scottish Parliament.
    This petition, like the others, declares:
    To the House of Commons.
    The Petition of users of the Parley Cross pharmacy in the Christchurch constituency
    Declares that the proposals of the Office of Fair Trading to allow the unrestricted opening of pharmacies able to dispense NHS prescriptions will result in a decline in the availability and quality of local health care currently provided from community pharmacies.
    The Petitioners request that the House of Commons urge the Government to reject these proposals by the Office of Fair Trading, and to promote the NHS pharmacy plan to encourage and support local community pharmacies.
    To lie upon the Table.

    Health Services (Isle of Wight)
    7.7 pm
    Mr. Andrew Turner: On the Bench beside me are just some of the 60,761 signatures—almost half the population of my constituency—collected on a petition launched by June Mortlock and the townswomen's guilds, with the assistance of the Isle of Wight County Press, Isle of Wight Radio, Meridian

    375
    television and the The Southern Daily Echo (Southampton). It was also launched with the help of the leaders of the three political groups on Isle of Wight council: Island First, Labour and the Conservatives.
    The petition concerns suggestions for the future configuration of health services on the island. It states:
    To the House of Commons.
    The Petition of residents of the Isle of Wight and others declares that the Hampshire and Isle of Wight strategic health authority is suggesting the removal of accident and emergency services, some maternity services and other vital services from St. Mary's hospital, Newport to the mainland.
    The Petitioners therefore request that the House of Commons require the Secretary of State for Health to do all in his power to meet the health needs of the people of the Isle of Wight by ensuring that these essential services remain available on the island.
    And your Petitioners remain, etc.
    To lie upon the Table.

  Tourism (Exmoor)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kemp.]
  7.8 pm
  Mr. Ian Liddell-Grainger: Like many people, I have listened very carefully to the Chancellor's Budget speech. He did not have much in the way of surprises, did he? I did not hear him mention tourism once. In Somerset, however, we will give him a muted cheer for freezing excise duty on cider, which is most important as it keeps us going, but I am afraid that that was our lot. Perhaps he needs a break. So rather than waiting for the next reshuffle, may I earnestly recommend that the Chancellor take a holiday on Exmoor, and soon? I can guarantee him a warm welcome. Indeed in some parts of this beautiful corner of England, he may be the only tourist; and in many ways, that may be his fault.
  Perhaps the Minister can exert some of his legendary Welsh charm on the Chancellor. I understand that the Minister has enjoyed many happy holidays in the west country not far from Exmoor, and occasionally on Exmoor, so he is already an expert. Perhaps the Chancellor could let off some steam on the splendid west Somerset railway. What about a day-trip to Willaton—a very pretty place—which is literally the crossroads to the moors, or to Watchett, where Samuel Taylor Coleridge was inspired, as he gazed through the window of a pub, to write "The Rime of the Ancient Mariner"? Many things go on in my constituency, thanks to cider. Perhaps the Chancellor could potter out to Porlock, which has a picturesque waterfront and one of the steepest hills in the country. Perhaps he could visit the proud town of Bridgwater, home to the annual spectacular firework carnival, which is attended by 150,000 people. It is by far the best in Britain and the biggest lit carnival in the world. Eat your heart out, Rio!
  Mr. Adrian Flook: I cannot let my hon. Friend get away with mentioning only places in his constituency. He has obviously forgotten Dulverton and other beautiful villages that are well worth visiting, such as Withypool with its royal oak, and Winsford, which also has a royal oak.
  Mr. Liddell-Grainger: I thank my hon. Friend, who has worked hard on Exmoor, especially during the foot and mouth crisis, which affected us all. His attempts to help so many people on Exmoor have been exemplary.
  Although the places I have mentioned are trying hard to win back visitors for the benefit of the whole area, the problem is the simple question of money. Tourism is the only viable major trade for most of Exmoor. In Minehead, Butlins is the biggest employer, employing 2,300 people at the top of the season, serving 9,000 clients a week. Thankfully, Butlins has managed to keep its end up despite the battering that tourism in the area has received. During the foot and mouth crisis, it bussed people on to the moor and did a phenomenal job by making a video to highlight the plight of the west country.
  Tourism has been battered by a vicious double whammy. First, the area was out of bounds for months because of foot and mouth disease, and then the

  377
  Government—under pressure from their Back Benchers, who are not representative of rural Britain and certainly not of Exmoor—decided to kill off hunting. I shall not revisit the moral arguments about hunting, but it remains a fact that many people, rich and poor, young and old, regard it as a vital sport. They travel from all over Britain to hunt on Exmoor. There are stable yards, farriers and hotels that rely on that aspect of the tourist trade, and many hundreds of jobs are at risk. Some of those jobs have already vanished under the mounting threat of an outright ban.
  I could take the Chancellor to Dulverton, in the constituency of my hon. Friend the Member for Taunton (Mr. Flook), where one of the main hotels for the whole of Exmoor has shut, because of the threat to hunting. I could introduce the Chancellor to decent, honest folk who run high quality bed-and-breakfast establishments and are now slaves to their overdrafts, just so that they can keep going. They never really recovered from foot and mouth. The flood of tourism has slowed. It is not yet a trickle, but things are much more difficult. Unfortunately, the Government appear to have turned off the taps of support, now that foot and mouth has gone away.
  Scores of decent people are trying desperately to win back trade. I have been impressed by everyone employed by the national park, which covers my constituency and that of my hon. Friend. They have used their imagination well to encourage new visitors. I must also mention West Somerset district council, which is the smallest authority in England, with a budget of only £4 million. It balances its books—something of which the Chancellor would be proud—but given everything that it has to do, it cannot keep money aside to assist the vital industry of tourism. The council has looked after the moors in a forthright and heartfelt way, and it sets an example to which every council in the country should aspire. The council needs more money and that is not its fault but the Treasury's.
  The Minister will no doubt reply by describing efforts to help Exmoor in glowing terms. He may mention the input of Business Link, which has public funding to try to improve trade after foot and mouth. That is fair enough, except that so many businesses are on their last financial legs. The problem with Business Link assistance is that it can come too late in many cases, and can offer bizarre help. What is the point of telling a beleaguered café owner who has had no custom at all during foot and mouth and who has a bank manager breathing down his neck that what he really needs is a properly structured business plan? That is patently ludicrous. By the time he has got a plan together, the business will have gone.
  Public funds to alleviate foot and mouth were channelled through the South West regional development agency, which was then chaired by Sir Michael Lickiss; an accountant, picked for the job by Downing street, who has recently, and thankfully, left his job. Sir Michael's reputation in Somerset can be measured on the head of a pin, leaving room for thousands of participants in the Bridgwater carnival. I note that you can't keep a man down. He is now heading the English Tourism Council; two days a week at, I am
  378
  told, £45,000 a year. Who wants to be a millionaire? Perhaps somebody coughed when he was answering questions at his interview.
  A couple of months ago, we had a meeting with the Minister for Rural Affairs and Urban Quality of Life, attended by myself, my hon. Friend the Member for Taunton and representatives of the national park and the district council. We tried to find a fair compromise on the Hunting Bill before it was presented to the House. I and many others were approached for advice, and we were told that if Exmoor lost the legal right to hunt deer, public money would be made available.
  The Minister was not trying to buy our support, but he obviously recognised that the wide economic impact of a ban would be catastrophic. The right hon. Gentleman never gave precise figures, and because the proposal was not before Parliament, we never expected him to do so. However, the clear implication was that large sums of money could be found to help Exmoor.
  The money could have been filtered through the RDA—by then no longer under Sir Michael's control—or other bodies, but the RDA was the obvious one. It seemed to be a sensible solution to a difficult problem, as stag hunting and hare coursing were the only two activities for which the Government were seeking an outright ban. Sadly, I do not think that the money is still on offer. We saw nothing in the Bill, and neither I nor my hon. Friend the Member for Taunton have had other approaches on the matter. Will the money filter through near to Exmoor if it does come? I wonder. My constituents, and those of my hon. Friend the Member for Taunton, will feel let down on the matter. I wonder whether the Minister will shed any light on this point.
  The Minister can absolve himself of any blame on that score and deny all knowledge of negotiations conducted by his colleagues at the Department for Environment, Food and Rural Affairs. However, therein lies a fundamental mistake in the Government's attitude to tourism. I have a horrible feeling that the philosophy is, "It's not my problem, guv." Tourism is the number one industry in so many parts of the south-west; it is our lifeline. Yet, under the Government, tourism seems to be an after-thought. Luckily the Minister did not shake his head at that point; perhaps we are making ground.
  If tourism is so important, why is there not a Secretary of State for Tourism, with his own Department? Instead, it just a part of another Ministry, at the bottom—dare I say it?—of the food chain in the Department for Culture, Media and Sport. I had almost forgotten that tourism was a part of that Department. No offence was meant.
  Here we are on the eve of Easter, the normal start for the tourist trade in west Somerset, with the opening of Dunster castle, Dulverton and many other areas of the moor, which looks absolutely beautiful at the moment. If you want to get away from it all, you can always come down to Exmoor in the Easter break. But the tourists have gone away and we must get them back.
  Our constituents do not want sympathy; they want help. Almost like a petitioner, we ask the Minister, "Please give us some idea of your thoughts, as we need input." If the Chancellor is looking to kick-start rural economies—something about which he so proudly boasted—surely this is one of the most important things

  379
  that he can do. Giving money to the Eden project and others has been useful in objective 1 areas, where half the money is provided by the Government. That is fine, but in Exmoor—where little is provided by the Government because of objective 2 funding—we need help.
  Every rural strategy meeting we have had, through the Curry report, the Dearing report and others, has come up with many ideas, but we are waiting for solutions. We do what we can in our constituencies. My hon. Friend the Member for Taunton and I visited the Exmoor tourist association, where we spoke. The people there are passionate believers in the moor. There is no straight road to the national park, but it does very well and fights very hard. I know that the Minister will agree with that, given his experience with Ilfracombe. The hon. Member for North Devon (Nick Harvey) has also been a great advocate of the moor.
  On behalf of constituents, however, I plead with the Minister to give us a chance. I hope that he will give us what help he can. If he gives us the ammunition, we will fire the guns to bring people back to the moor. One more event like the foot and mouth outbreak could damage irreparably everything achieved by all the work and effort and time devoted by so many very small businesses in the area. People on Exmoor and in the surrounding areas have only one chance, and that is tourism.
  7.20 pm
  The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells): I congratulate the hon. Member for Bridgwater (Mr. Liddell-Grainger) on raising this important matter in today's Adjournment debate. The hon. Gentleman is right to talk up the virtues of Exmoor and of the coastline where the moor tumbles into the Bristol channel. It is one of the most spectacular coastlines in the country, and I confirm that it has very steep hills. I remember toiling up from Porlock Weir, which has a very good pub called "The Ship", if I remember rightly—although on that occasion remembering rightly was very difficult. There is no question but that Exmoor is a remarkable part of the world. It is one of Britain's great wildernesses.
  The hon. Gentleman is right, too, to urge people to visit Exmoor this Easter. It is a great place, and he has put his finger on something very important—that Britain's great tourist areas such as Exmoor will work their way out of the lingering effects of foot and mouth only by getting tourists to visit. I very much admire the way in which the hon. Gentleman framed his argument, but I was sorry to hear him talk so disparagingly about Sir Michael Lickiss.
  I can tell the hon. Gentleman—I have never told the House this before—that, when I was given the privilege of taking on the job of Tourism Minister, I looked around the whole of Britain for a model. I wanted to find out how we could get more value from the money going into tourism. I found that the south-west was among the best areas in that regard, if not the best. Cairns Boston and Malcolm Bell of South West Tourism had developed a working relationship with Sir Michael and the regional development agency, partly as a result of the terrible blight that was foot and mouth. I wanted that model to be replicated across Britain.
  In part, the south-west model appealed because, London aside, the area probably attracts more tourism than any other in Britain, with the possible exception of
  380
  Cumbria and the lake district. However, it is certainly one of our premier areas, for lots of reasons. I hope very much that the hon. Gentleman reassesses Sir Michael's contribution, as he was operating under very difficult circumstances.
  I took the tourism job in June 2001, right in the middle of the foot and mouth crisis. It was a terrible experience. I remember going to Exmoor for the first time. People just wanted to sit down and talk to me about what the outbreak meant for their businesses which, very often, were lifestyle businesses, as the hon. Gentleman noted. For instance, people might have put their retirement money into a bed and breakfast or a little hotel, the entire existence of which depended on the open path running alongside.
  I agree that we have learned the lessons of the period. God forbid that it ever happens again but, if it does, I hope that we would handle it better than previously. Having seen so many images of cows with their legs stuck in the air on burning pyres with black smoke crossing the landscape—not generally on Exmoor, but often in the south-west—I then went around the world trying to persuade people to come back to Britain as a great place to visit. The hon. Gentleman is right to remind us that those lessons are there to be learned and that those mistakes should not be made again.
  I shall not bore the hon. Gentleman or other hon. Members with endless statistics about the south-west, but it is a remarkable success story. Indeed, the area needs to be. The hon. Gentleman mentioned the particular difficulties of businesses on and around Exmoor, but he could have talked about the effects further down the peninsula, in Cornwall, of the decline of the mining industry. Many years ago, when I used to go down there on rugby tours, it felt like a wealthy area. When I went back in the late 1990s, I was shocked by the change that I saw in the hinterland areas that had suffered the effects of the running-down of some of their basic industries. The fact that Cornwall won objective 1 funding is in many ways a bad thing. The hon. Gentleman is right to talk about the fragility of much of the economy and the centrality of tourism. As he suggested, even in areas where we assumed that the most important industry was agriculture, tourism was more affected in terms of jobs and revenue.
  Mr. Flook: The Minister has wandered off down into Cornwall, which, as he knows, is quite a long way from Somerset. In my constituency, as in that of my hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger), we can see large parts of south Wales. I am not sure whether people in Pontypridd can see Exmoor. I am always struck by the fact that Wales has a rather munificent £8 per head spent on it in terms of tourism, whereas we in England get only 24p per head. When can the Minister speak to the Chancellor of the Exchequer to try to get that huge disparity reduced? That would help Exmoor quite remarkably, because there are only several thousand people there, and on a per head basis they get, by comparison, almost nothing to help in attracting tourism to Exmoor.
  Dr. Howells: That was a fine, if brief, speech in the form of an intervention. The hon. Gentleman makes an interesting point. It is true that divvied up, so to speak, public expenditure per tourist is much higher in Wales

  381
  and in Scotland than in England. If one looks at the reverse of that, as one must, the number of visitors to England is phenomenally higher—partly because of London, of course—and the spend is hugely more than in Scotland and Wales. The bigger spend per head of population is partly something that we have inherited as a result of the game of catch-up that those tourist boards have been playing. Despite the fact that Wales and Scotland are full of magnificent tourist attractions, they have a long way to go in terms of convincing people to visit them, wonderful though they are.
  We need to remember that the great majority of inbound tourists to this country come through London. The regions of England as well as the nations of Wales and Scotland have never worked hard enough to find out how to use London as a more productive gateway and to persuade people to visit such places as Exmoor. London has not been proactive enough in encouraging those types of gateway partnership, to use a cliché, to get people down there. However, this debate was initiated by the hon. Member for Bridgwater and I will not go into that subject now.
  The hon. Gentleman highlighted the most difficult accommodation cases. It is often a question of accommodation, but some terrific initiatives are up and running—private-public initiatives to raise the quality of accommodation. Last year, 2 million people visited Exmoor, which is a tremendous number. The businesses in the area have realised in a big way, certainly since foot and mouth, that we must make that number sustainable. We have to keep those visitors coming back and they have to want to come back.
  The hon. Gentleman was right to highlight the difficulties that some people face just to stay in business. However, as he knows, there is also some great accommodation in Exmoor—some of the best to be found anywhere in the country, not only because of the views and the location, but because of the way the staff treat people. One always gets a great welcome in the area. We cannot emphasise that enough.
  As well as looking to the Government to advertise the delights of this country and persuading visitors who go to London and the other tourist honey pots to visit the slightly more remote areas, which is a difficult job, we must ensure that when they get there they have such a good time that they want to keep going back.
  It is a Catch-22 situation in many ways. The hon. Gentleman made a joke about the way the Small Business Service might turn up to help the business. He said it was lunacy for someone from the service to come along and say, "What you need is a much better-structured business plan," or whatever. He is right. There must be more immediate help than that. I would like to think that there often is. I am sure that he would also admit that in many cases a good business plan would not come amiss. It might help the business to access the help that is available. Often, that is a mystery to such businesses and they will not try to tap the
  382
  potential help that is there for them because they see it as being too bureaucratic and involving too much red tape. Perhaps they are hostages to fortune. I do not know.
  I have become sceptical. I think that the situation often depends on the business. In some of the best cases, a personal link has been forged between the business and the agency. Sometimes, it is all down to personalities. It would be nice if we could find a formula that would avoid the necessity for personalities to become involved, but all too often that is the case.
  The Exmoor national park authority receives a total of £3.32 million from the Government, and it has been given an extra £260,000 for 2003–04—a rise of 8.5 per cent. Those figures include the sustainable development fund of £125,000 in 2002–03 and £200,000 in 2003–04.
  The hon. Gentleman has told us about some of the virtues of the park. A dedicated park authority was set up in 1997 to conserve and enhance the natural beauty, wildlife and cultural heritage of the area, and to promote opportunities for the public understanding and enjoyment of its special qualities. From my dealings with the tremendous people who are involved in the north Devon partnership, I know that they realised, long before the Government, that there were changes in the way that people take holidays nowadays and in the length of break they want. Those changes often lead to the development of niche markets.
  Exmoor has great potential for such developments; for example, cycling, although not necessarily up Porlock Weir hill. People could cycle down it, perhaps—very carefully. Other holidays could involve horse riding and walking.
  On my last visit to the area, I managed to upset a few people by saying that we need to think about families. Parents might want to do some walking on a beautiful moorland ridge, but their children might not. The right hon. Member for Haltemprice and Howden (David Davis) is a great walker and I am sure that he has enjoyed time on Exmoor, possibly walking along the coastal path, which is one of Britain's great treasures, but teenage kids might not want to do so. Teenagers might think that it was the worst possible nightmare.
  The hon. Member for Bridgwater mentioned Butlins at Minehead. That company has been extremely imaginative and has understood the need for a good mix of attractions. The national parks need to consider such ideas. The prospects are exciting. For example, there could be architecturally adventurous but discreet water centres where parents could park their kids. Parents and children could all do what they wanted, without spoiling the unique attractions of places such as Exmoor.
  I welcome the debate, and I assure the hon. Gentleman that the Government are very much aware of the pressures on businesses on Exmoor. We shall continue to do everything in our power to try to help them.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes to Eight o'clock.

Preamble
[MR. JOE BENTON in the Chair]

Council Tax
Motion made, and Question proposed, That the sitting be now adjourned.—[Jim Fitzpatrick.]
9.30 am
Mr. Patrick McLoughlin: I am grateful for the opportunity to debate council tax and pleased that so many of my colleagues are here to support me. A crisis is building: all our constituents face massively increased council taxes.
In view of the number of people present, at least on the Conservative Benches, I shall limit my remarks so that others may participate. I am delighted to see the hon. Member for High Peak (Mr. Levitt) in his place, because we share a district council. A number of his constituents live in the Derbyshire Dales district council area, which I shall mention later.
The nominations for the council in Derbyshire Dales closed last week. Of the 39 seats, 13 are not contested by any party other than the Conservative party. The hon. Gentleman could not find a single Labour candidate to stand in any seat in the part of the district that he represents. When nominations closed, there were 39 Conservative, 19 Liberal and 12 Labour candidates—a fairly dismal performance by the Labour party, perhaps owing to the fact that few Labour candidates could possibly defend the way in which the Government have treated Derbyshire Dales. We have been treated especially shoddily, and I shall explain why—or perhaps the Minister can explain why; I shall show how.
The average increase in council tax in 2003–04 is 12.9 per cent.—four times the rate of inflation—and average bills will be £908 compared with £804 for 200–03. Many people in band D will for the first time face a council tax bill of more than £1,000 a year—the highest that there has ever been. For six years in a row, council tax has risen by three times the rate of inflation. Since 1997, average council tax bills have increased by more than 60 per cent., by an average of £413 for the typical household. That is just one of the 53 tax increases that we have experienced during the lifetime of the Labour Government—all of them brought in covertly, so that the Government can argue that they have not increased taxation. They are fooling nobody. Everybody knows that the large increases in council tax are not the responsibility of the local councils; the Government are directly responsible for them.
During the period of the 60 per cent. increase, inflation has increased by 16 per cent. No wonder many of us receive letters like the one that I received today from a constituent who writes:
"I know you are only too aware of the increases we have seen in recent years in Derbyshire County Council's council tax bills. I have sent letters to various Councillors and politicians in the past but to no avail. How can they justify such increases? We are informed that inflation is running at below 3 per cent., but each year we are seeing increases in double digits. We purchased our
72WH
cottage in 1975 for a relatively small amount but yet now we face an annual council tax bill of £2,000! We are on very low incomes and have to be very careful with our budget. It seems to me that the Labour Government simply throws money at problems without looking how existing funds can be used more effectively and efficiently."
That letter speaks for many people who are thinking about the council tax bill that comes through their letter box and that they have to pay.
The Minister for Local Government and the Regions said that
"there is no reason why councils cannot continue to improve services while sticking to reasonable council tax increases."—[Official Report, 5 December 2002; Vol. 395, c. 1068.]
The Government claim to be increasing the central grant for local councils, but that increase is overshadowed by the orders from Whitehall to increase spending on schools and social services. As Sandy Bruce-Lockhart, the leader of Kent county council, said:
"Only council tax rises can fill the gap".
One reason for council tax increasing is shortfalls in education funding. I have received many complaints from schools: despite what the Government say about putting extra money into education, that money is not filtering through to schools. They are short of money, so how can the Government keep arguing that they are massively increasing spending in schools?
Bob Spink: Is my hon. Friend aware that although the Government have given schools funding for staff costs increases of about 3 per cent., the actual increase in staff costs is nearer 6 or 7 per cent., taking into account national insurance, pensions, pay spine compression and other factors? Should not the Government come clean and be honest with our constituents about how they are denying schools funds?
Mr. McLoughlin: The Government have tried to get away with that, but what has happened and what is happening in council tax is now being exposed. I am grateful to my hon. Friend for making that point.
There have also been huge rises in police bills. We knew what the new funding formula was for. It was to punish thrifty councils that had tried to keep council tax low and to move money to Labour heartlands, which is exactly what the Government have done. The new funding formula is said to be easier to understand. I look forward to the Minister's explanation of it, because not many people believe that it is easy to understand. Admittedly, the former system was not particularly easy to understand, but we had become accustomed to it. The new system has brought the Deputy Prime Minister's understanding of the English language to the council tax funding formula and the way in which it is being imposed.
Mr. Edward Davey: I have a great deal of sympathy with the hon. Gentleman's remarks about what the Government have done to the grants system. Did Conservative Governments ever use the grants system to favour individual councils? [Interruption.]
Mr. McLoughlin: My right hon. Friend the Member for Skipton and Ripon (Mr. Curry), formerly the Minister of State responsible for such matters, says yes.

73WH
In some inner-London Labour councils we saw that problems needed to be addressed through the funding system. It would be difficult to do that through a local income tax system, which the Liberal Democrats propose, although their party headquarters has told them not to talk about that too much.
I am glad that the Liberal spokesman intervened, because I must admit that his party has brought a new open vision to local government. That was demonstrated by the Liberals on Derby city council, who said openly that they were opposed to what the council was doing with council tax—they thought that the tax was too high and too great a burden on council tax payers in Derby. How did the Liberals vote in respect of the council tax-making power? They said that they were against it, so one might have hoped that their vote would follow their voice. Unfortunately, however, they abstained. [Laughter.]
Sir Paul Beresford: Surrey has had a similar problem with the Liberals. They delivered a local "Focus" pamphlet and a Surrey-wide leaflet throughout my constituency. The "Focus" said that the council tax increase was down to the Tories, and the Surrey-wide leaflet said that it was down to Labour. That is typical of the Liberals—they were trying to hit at both sides at the same time.
Mr. McLoughlin: I am grateful to my hon. Friend. We must expose the Liberals' doubletalk on these issues. We shall do that in Derby. We believed what they said; it was not too much to ask them to follow through with their vote.
Mr. Roger Gale: Does my hon. Friend agree that the Liberal party is at least consistent in its endeavours to have it both ways at once? Canterbury city council in Kent asked its chief executive to write to Members of Parliament complaining about the shortfall in Government funding for local authorities, while the leader of the council, Councillor Alex Perkins, is trying to blame the Conservatives for the increase in council tax in Kent.
Mr. McLoughlin: As my hon. Friend says, that is typical. We should not spend too much time on the Liberals, because they are irrelevant to the issue of local government funding. I want to consider other matters.
There has been a huge increase in the burden on council tax payers. In London, there has been a 29 per cent. rise in the Mayor's levy. One of the first things that the Labour Government did on taking office was raid the pension funds of £5 billion a year. Industry and the public sector are paying for that.
People on fixed incomes are especially hard hit by council tax. A third of the increase in the basic state pension since 1997 has been taken back by higher council tax alone. Conservative councils have, on the whole, attempted to keep the burden of council tax lower than other councils. They charge £81 less on band D homes than Labour councils and £99 less than Liberal Democrat councils, which helps young families. The independent Audit Commission stated that Labour
74WH
councils have dirtier streets, less recycling and higher truancy rates in schools. By contrast, local residents are more satisfied with the public services in Conservative-run councils. As I said, in my local council, 13 seats are unopposed by either of the two other parties and 13 councillors have already been appointed without election.
There can be no doubt whatever that there has been a shift of resources to Labour heartlands. I have been listening to the council tax debate for many years and I have noticed that in the past few months the Government have concentrated on Wandsworth council, which has imposed a huge increase—
Mr. David Watts: Massive.
Mr. McLoughlin: As the hon. Gentleman says, it is a massive increase. Wandsworth council tax band D will rise by £181 this year.
Mr. Watts: The hon. Gentleman talks about increases in council tax. Will he say what Wandsworth's council tax will rise to? I think he will find that it will still be lower than the national average.
Mr. McLoughlin: I am grateful to the hon. Gentleman—I was about to make that point. Wandsworth council's tax increase is 45 per cent., which translates into an increase of £181. However, in Islington council tax will rise by 21 per cent., an increase of £182. The hon. Gentleman is absolutely right: in 2003–04, Wandsworth's council tax will be £584 whereas Islington's council tax will be £1,049.
Mr. David Curry: That includes the levy.
Mr. McLoughlin: My right hon. Friend reminds me that that includes Red Ken's levy—the Livingstone levy.
I am conscious of the time, so I shall cut several of the points that I intended to make. However, I want to ask the Minister to explain how Derbyshire Dales district council's budget increase was determined. In the past month, there has been a great deal in the news about target-bombing, precision targeting and accuracy. I must say—although it gives me no pleasure to do so—that that is exactly what we in Derbyshire Dales feel has happened to us. Amber Valley borough council's budget was increased by £696,000, Bolsover's by £492,000,Chesterfield's by £635,000, Erewash's by £648,000 and High Peak's by £565,000. North East Derbyshire district council's budget increased by £528,000; and South Derbyshire's by £472,000. However, the Derbyshire Dales district council's budget was increased by £52,000 a year, £19,000 of which goes to the Peak park.
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): I am terribly sorry to disabuse the hon. Gentleman, but Derbyshire Dales' increase was not £52,000. He merely repeated that figure from a previous debate in January. The figure excludes the transfer, with which local government associations are happy, of housing benefit

75WH
and council tax administration that has been added to the £52,000 that went to Derbyshire Dales. The hon. Gentleman has given the wrong figure.
Mr. McLoughlin: The Minister is right: I did use that figure a few weeks ago. The Minister for Social Exclusion and Deputy Minister for Women, who answered that debate, made exactly the same point that the Under-Secretary has just made. However, the increase that he mentioned has gone to every other council in Derbyshire as well. Therefore the figure that 1 gave was the one that the Government announced in November. Those figures, which apply to all Derbyshire councils, were provided to me by the chief executive of the Library of the House of Commons, but they also appear in Government answers to parliamentary questions. I could find the relevant papers if I had the time.
Why will the people of Matlock get an increase of £1.91 while the people of Chesterfield get extra Government funding of £8.71? Why will the people of Tansley get an increase of £1.91 while the people of Leigh in Amber Valley get an increase of £7.50? Why will the people of Bakewell get an increase of £1.91 while the people of Buxton get an increase of £7.88? Why will the people of Tideswell, which is in the High Peak constituency, get an increase of £1.91 while the people of Buxton get an increase, as I have just said, of £7.88?
People who live in the same area are treated very differently by the Government. The argument advanced for the new funding formula was that it would be clearer and more transparent. It is not, and the problem is of the Government's making. The council tax increases that we are seeing are not acceptable. They are the fault of one Government Department—the Office of the Deputy Prime Minister.
9.48 am
Mr. David Drew: I am delighted to take part in the debate. If nothing else, the lectures on council tax give some relief from lectures on Iraq and hunting. I am sympathetic to some of the case advanced by the hon. Member for West Derbyshire (Mr. McLoughlin), but I do not draw the same conclusions. There is an argument for making council tax subject to ability to pay according to one's income. Nevertheless, the previous Government were right to look at replacing the dreaded poll tax with a property-based tax. For all its faults, the rates system had some merit, and if we could make the council tax more transparent perhaps we could gain greater support for it.
We should be looking for a relationship between the expenditure of local government and the way in which local government funds that expenditure. We should try to make it as transparent as possible and introduce an element of ability to pay. That involves property.
Sir Paul Beresford: The Minister of State with responsibility for these matters said that he was looking for transparency or simplicity and fairness in council tax, but that he latterly accepted that if it is transparent
76WH
and simple it is not fair and that if it is fair it is not transparent. How did he manage to muck up both, because it is neither transparent nor fair?
Mr. Drew: If the hon. Gentleman lets me advance my argument, I shall try to explain how we got into difficulties and what we need to do.
I do not believe that there is a better alternative to council tax for raising revenue locally. The Liberal Democrats will get on their hobby horse and talk about local income tax, but that would lead to as many problems as it would solve; likewise with the American system and the sales taxes that some European states have considered introducing.
Let us examine the nature and aims of council tax. My criticism is that it establishes too inflexible a relationship between the way in which we raise funding and spend the money. The ratio of the fixed relationship between band H and band A causes a problem in many parts of the country. It is wrong to cap at the top end and it is certainly wrong to have a limit on properties that have never been equivalent to band A. I have always campaigned to obtain a new band for park homes, but there may be other, lower priced property. The difficulty with council tax is that it is based on gearing and whatever a council receives in central Government grant is disproportionate in terms of what it must then raise from council tax.
My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) received a fascinating parliamentary answer a few days ago when she asked for a breakdown showing how gross council tax income related to the overall level of council expenditure. Surprisingly in these days when we believe that central Government grant dominates the amount that is spent by local authorities, South Oxfordshire district council raises 74.3 per cent. of its income from council tax. That is at one extreme and at the other is the City of London—I know that it is an anomaly—which raises only 2.2 per cent. of its income from council tax. Hackney borough council raises 9.6 per cent. from council tax and, just to put it on the record, Stroud district council is in fourth place, receiving 58.2 per cent. of its income from council tax.
One reason why people are being turned off by local democracy is that they see no relationship between what they spend and what they receive in services. The fundamental principle that has caused things to go wrong—it is largely the fault of the previous Government—has been the use of central Government grant to bail us out of a series of problems. In many parts of the country, that has had a wholly disproportionate effect because, if councils want to spend more, the gearing effect is at least three to one and so much more money must be raised in council tax.
Mr. Gale: Will the hon. Gentleman explain why a 3.5 per cent. rise in Government grant in Kent is described as an increase, when the increase in costs imposed on Kent by settlements from central Government is more than 6 per cent.?
Mr. Drew: I am just about to answer that point, so I am glad that the hon. Gentleman led me on to it. There is a ratchet effect because too much money is raised

77WH
through the central Exchequer. I accept that if we were to raise more locally, there would have to be a reduction in the amount that we raise in tax in other ways or there would be the usual double whammy effect. The hon. Gentleman put his finger on the problem. One of my criticisms about councils is the way in which they use base budgeting. I have always said that and did so when I was a councillor in a previous incarnation. Councils spend in the current year what they spent in the previous year with a little added on for inflation and additional responsibilities.
Councils are working at the front end of the Government's priorities—in education, policing and social services—so inevitably expectations of performance impose pressure on them to spend more resources. However, they are also doing other things. I am glad to see the right hon. Member for Skipton and Ripon (Mr. Curry) in Committee discussing the waste issue, as he is Chairman of the Select Committee on Environment, Food and Rural Affairs. The issue has come home to roost. Waste management is likely to be a very high expenditure area and, whether we like it or not, will fall to the responsibility of the local authority and then to the individual householder. If ways are found to charge people other than through council tax, it will be much more expensive, especially for those who live alone.
I am all in favour of giving older people a proper, sensible supplement, but we would still be encouraging people to live alone, and there is much evidence that waste management and other services are disproportionately more expensive for single households. Yet we still give the single person's discount. We need to examine carefully the ways in which councils not only raise but spend their money. There is a need for greater transparency and we need to ensure that councils are careful with those funds. We should also move away from the notion of cost plus, baseline budgeting, which simply ratchets up each year what councils are raising. We saw how they had to make up the additions this year by raising council tax.
I hope that the review will be a fundamental one, because there is a danger that we shall consider changing the grant formula but fail to examine the relationship between central and local government or question how we want to allocate and fund services. I hope that the Minister will consider root and branch change and that we shall return to a better ratio between what is raised locally and what is raised through the Exchequer. It will then be clear to people how they are getting value for money through their councils. At the moment, that is totally unclear. I make my usual complaint that the situation is made much worse where there are at least two tiers of government—three in rural areas—as it is difficult to break down who does what. That simply causes confusion among the electorate.
My constituency, Stroud, has done relatively well this year and has kept its council tax increase down. However, that has been blown away by the county and, in particular, the police authority. I could spend all the time available to me on that argument, but I will not. However, I will just say that the police authority has been underfunded, and I have some sympathy with it. It
78WH
has supposedly been asked to catch up with authorities that are comparable to it, which is where obfuscation arises and where it is difficult to make comparisons.
I make a plea that we consider the reality of what is being provided on the ground, rather than the spin surrounding what an average property costs in one council area compared with another.
Several hon. Members rose
Mr. Joe Benton (in the Chair): Order. Before I call the next speaker, it might be appropriate to mention that several hon. Members have indicated that they want to speak. It would obviously be most satisfactory if we can accommodate everyone and allow adequate time for the Opposition spokesman and for the Minister's reply. I therefore appeal to hon. Members to keep their contributions as brief as possible.
9.58 am
Mr. David Curry: This is the first year of a new system of local government finance. The mountain laboured for several years; the Labour Opposition promised that they would change the system, but the Labour Government found it to be much harder than they had thought and, at the end of the day, the labouring mountain has delivered a mouse of a new system.
The Government were anxious that there should be no absolute losers, so the first thing that we should do is admit that the aggregate amount of money available for the settlement is relatively generous. However, there are always relative losers and relative winners. We have already had floors and ceilings, or toppings or tailings, to enable some redistribution within the control totals, but there has been some complaint about that. The main impact of the new system is not simply the dragging of funds towards northern metropolitan authorities, although that has been a consequence, but a much more general redistribution. In London, for example, funds have been dragged away from some of the outer-London boroughs.
There has been a general change in the way in which funding is distributed. Looking at the tables that the Library helpfully produced, one sees that Merseyside is an obvious winner, although the increase is very modest in Merseyside. South Yorkshire is a winner and quite a number of the metropolitan authorities are clearly winners, but there are also widely distributed losers, as well—we are not talking purely about the larger northern metropolitan authorities. That is a preliminary point that must be made.
I have been considering what has been happening in the shires, because I represent a constituency in North Yorkshire, while it still exists—we will have to wait and see how the regional assemblies legislation progresses to know whether it will continue to do so. We have posted an 11.5 per cent. increase in council tax. I leave aside a large increase in the police grant, because that is a separate issue and I am trying to be fair to the Government. I want to arrive at my conclusion about their culpability by a rational process rather than by prejudice. We will see at the end of my speech whether I reach the same conclusion as my hon. Friend the Member for West Derbyshire (Mr. McLoughlin).

79WH
The easiest way to consider local government funding is to say that, in effect, there are three chunks of funding for a local authority. The first chunk corresponds to what the Government describe as a reasonable increase in council tax, which in North Yorkshire's case is about 5 to 6 per cent. That corresponds to inflation, national insurance contributions, teachers' pay and pensions—it is worth noting that in inner London the teachers' pay increase is 4.6 per cent., which is significantly higher than in the rest of the country—the standards fund, about which there is a debate because that is being folded into the general totals, and the demands on social services.
The Government say, "We've given you the money for those things. That's where it should end—there is no reason for any increase in council tax beyond 5 to 6 per cent. Anything above that is unreasonable." I know from my ministerial experience that the word "unreasonable" is wonderfully useful to Governments. They could not do without the words "appropriate" and "reasonable". The whole Government would collapse if those two adjectives were not available for use by Ministers.
Unfortunately, we then come to the second chunk, in relation to which we have that wonderful new invention, resource equalisation. The Government have increased the spending power of local authorities on the assumption that the council tax covers that because local authorities have been spending above what was the standard spending assessment. However, that is a false assumption because local authorities do not have the council tax cover for that increase in expenditure. However, the Government have not provided a grant for it. That is why we have that second chunk of increase in council tax, which in North Yorkshire amounts to something like 5 per cent. The new formula spending share, which replaces the SSA, falls short in that respect. We in North Yorkshire estimate that the shortfall is some £10 million. That must be found from council tax, otherwise a severe pruning of services becomes necessary.
The third chunk is the small chunk that relates to discretionary expenditure in response to local demands. In my constituency, for example, for years and years the highways authority has been the Cinderella and has spent below the SSA in order to meet the Government's demands to push passported money through into education, and to meet increasing demands on social services. Every Member of Parliament knows that the social services sector is under more pressure as more elderly people become dependent on care. If somebody goes into care as a self-funder and then is no longer able to pay, there is no Government support in respect of that person. That is a major liability. There are also increasing and entirely justified concerns about vulnerable young people: after a series of spectacular cases, every local authority in the country is desperately anxious to ensure that it has in place thorough safeguards in relation to looking after young people, so that it does not get a Victoria Climbié case or the equivalent in its area. That is a natural reaction.
Discretionary expenditure responds to local demand in relation to youth services, social services and highways. In North Yorkshire, discretionary expenditure adds another 2 per cent. to the total increase, taking it up to 11.5 per cent. Will the
80WH
Government tell me why and how such an increase is unreasonable? If they dispute the figure, what figures do they believe are correct?
Things will be worse in future. I am wearing my sheep tie in the expectation of being fleeced, as today we have the Budget, which will no doubt indicate that, for reasons with which we are all familiar, the next public expenditure rounds will be much more difficult than the current one. The Minister might not have the amount of money that he has had in the past to put into the local government settlement.
On top of that is the promise in the Local Government Bill of the division and revaluation of council tax bands. Everyone expects that band A will be subdivided, because in many cities—for example, east Lancashire towns such as Blackburn, Burnley, Rossendale and Hyndburn—the value of many properties is nowhere near £60,000. One can buy a house for half that in those towns and in others such as Newcastle and Salford. If council tax bills are cut to correspond to a minus-A band, there will be a significant revenue shortfall for local authorities, particularly those in which properties are concentrated in the bands at the bottom of the pyramid that represents the hierarchy of bands. If those authorities do not have properties at the top end to compensate, resource equalisation will become even more important in the local authority formula.
Authorities such as that of my hon. Friend the Member for West Derbyshire and mine will be hit even harder by the dragging away of funds. The settlement has been extremely unfair to my local authority. The unfairness has been made even worse by the absurd huffing and puffing of the Government about unreasonable demands. The authority has had its hands tied behind its back.
It is terribly inconvenient that the Audit Commission has just given an A for excellence to almost all the local authorities that the Government most hate. Let us take the wonderful case of Wandsworth, which the Minister loves passionately. I thought that I might make some inquiries about that excellent authority. It is, of course, matched by Westminster, which is also an A authority. Wandsworth decreased its council tax last year because it realised a significant number of assets in pursuit of Government policy; for example, in the rationalisation of schools and the disposal of the related assets. The Government have been pressing local authorities to realise the best price for assets—that is a Treasury rule. The council was able to reduce its reserves and hand money back to the taxpayer. As a Conservative, I think that that is always an extremely good plan.
Mr. Leslie: The right hon. Gentleman makes an interesting case. He said that he would be rational rather than prejudicial. From his assessment of Wandsworth, does he think that the fact that there is no election this year might have something to do with the council tax rate?
Mr. Curry: No, I do not. As my hon. Friend the Member for West Derbyshire said, Wandsworth can hold up its head, as it is still charging one of the lowest council taxes in London, despite the increases. We

81WH
should consider why the increases have been necessary. A former leader of Wandsworth council is in the Chamber. I am doing his work for him.
Sir Paul Beresford: Is my right hon. Friend aware of the Government's rather mixed feelings about Wandsworth? The Minister's colleagues are busy telling Wandsworth to cuts its council tax increase at the same time that Education Ministers are telling it to increase taxes to put more money in schools.
Mr. Curry: The Government make a great thing of getting rid of ring-fenced grants. They have finally accepted that far too much money is ring-fenced, that it should be put back into the kitty and that local authorities should be given more responsibility. However, no one passed that message to the Department for Education and Skills, so while the Office of the Deputy Prime Minister says one thing, the Department for Education and Skills, in its usual Stalinist style, tells local authorities that they have to pass the money straight through, even local authorities in which total spending on education was more than the grant. The Government are actually taking money from other functions such as social services and insisting that it be directed to the education service.
This year, the Government grant to Wandsworth was increased by 3.5 per cent. However, the teachers' pay increase in inner London was 4.6 per cent. and there will be associated pension increases for teachers and local authority workers, as well as the 1 per cent. increase in national insurance contributions. The council has prudently made provision against a shortfall of some £70 million in the interim valuation of its pension funds—prudence dictates that more and more local authorities will have to do that in future.
Finally, there is the great Livingstone levy—£50 out of £181 going straight to Ken. That levy has gone up by 82 per cent. in three years. Do not blame me—I did not give levy powers to the Mayor of London. We all knew what would happen, so there is no point in complaining. It has happened entirely as forecast.
I wish I lived in Wandsworth. I live in Lambeth, which is a great pain. It is convenient, but, by gosh, it is financially punishing. I wish I lived in Much street, which is divided between Lambeth and Wandsworth, because I could live on the Wandsworth side and think how fortunate I am and how much I am saving.
I promised the Minister that I would come to a rational conclusion. All Governments need to modify and amend the local government formula. It is entirely true that efforts to make a formula fairer make it more complicated. Groups of local authorities used to come to see Ministers. Ministers do not meet local authority delegations any more, but in the old days they used to come in delegations. Representatives of local authorities such as those of the Webber-Craig group in south Yorkshire and Lancashire used to argue a case based on certain social indicators. Sometimes Ministers said that the case made sense, but that the situation might be that little bit more complicated.
The Government say that by creating a new system they have achieved simplicity and fairness, but that is manifestly not the case. They have to defend a system
82WH
that has their finger and thumbprints all over it, in which the winners and losers are perfectly clear. The sensible thing for Government to do is just shut up and stop making idiotic threats. They should sit in the hole and not dig, but not get out of it because they might get hit by the flak. The sensible thing for the Minister to do is to tell the Deputy Prime Minister to stop talking about unreasonable increases or nasty things that he might do in future years. He must realise that he cannot win on this matter—he does not deserve to win, but, for heaven's sake, do not let him lose even more badly than he is already doing.
10.11 am
Matthew Green: I congratulate the hon. Member for West Derbyshire (Mr. McLoughlin) on securing the debate. It was very brave, perhaps foolhardy, for him to do so because we should not forget that council tax is, after all, a Conservative tax. I was going to be even harsher on the Conservatives until the right hon. Member for Skipton and Ripon (Mr. Curry) gave a superb exposition of the changes to the formula. It is a shame that some of his colleagues on the Front Bench do not follow his example.
If we consider council tax, we can see some fundamental problems with it. The first is that it is one of the few taxes that has no natural buoyancy. Each year, the revenues coming in do not increase with the growth of the economy. Revenues from most other taxes, such as income tax, national insurance and even VAT, will increase as the economy grows. The Government receive more money and can meet inflationary costs as a result of that increase. Revenues from council tax will always be the same as last year, unless one makes an increase and passes it on to the electorate.
Every year, council tax will have to be raised to meet inflationary costs. There will be variations throughout the country. Some councils will set a zero increase one year, and others will set huge increases, but the reality is that council tax must be raised in line with inflation to cover inflationary costs, without all the extra burdens that the right hon. Member for Skipton and Ripon so eloquently described.
Council tax is a completely unfair tax; it is not based on ability to pay. If we take the example of a pensioner on a modest income of £150 a week, that person will have a family income of about £7,500 a year, but will probably pay at least £1,000 a year in council tax. That is a huge slice of their income. MPs pay a proportionately much smaller part of their income in council tax. The reality is that those who defend council tax are effectively saying that pensioners should pay more as a proportion of their income than MPs should—that pensioners should bear the burden, not us.
The other problem with council tax is that the variation between the top and lowest band is a ratio of 3:1. Those living in the very smallest properties—a single person living in a tiny flat, for example—will pay three times as much as people living in the largest properties. The largest properties may have many rooms, and many people may live in them—a large family, or many different families. That in itself is an iniquity, and as a small step we should see an increased number of bands to deal with it, but that is tinkering with the problem.

83WH
The right hon. Member for Skipton and Ripon was correct about the effects of resource equalisation. The Government have, with their change this year, effectively assumed that every council throughout the country will set the same rate of council tax. We realise that there will be variations, but if the formula works its way through over a number of years, virtually every council in the country will set the same rate of council tax. The annual banter between the parties about who has the highest rate for the average band D property, among other things, will disappear because everyone will be setting broadly the same rate of council tax. The effect of resource equalisation will be that to all intents and purposes we shall have a national council tax rate.
One problem with the existing system is that everyone quotes band D; the rate at which that is set depends on the type of property in an area. If there are many low-value properties—those in band A and B—as there are in many northern areas, band D would need to be set at a high rate, because the amount of money coming from the low-value properties would need to be geared up. If, however, the council was in London or the south-east—perhaps Westminster or Wandsworth—where property values are high and there are many high band properties, a relatively low band could be set because there would be a higher rate of tax from which to get the income. In fact, despite all the argument about Westminster and Wandsworth setting low council tax, if one considers the average council tax per household, those councils have just about the highest rate in the country. That is the effect of the high-value properties. Neither Labour nor the Conservatives would like us to talk about such figures, because they do not suit their reasoning.
Every year a huge set of spurious statistics is bounced around by the other two parties and the reality is that neither party addresses the fundamental problem, which is that the tax itself must go; it needs to be scrapped. The tax must be replaced with one based on the ability to pay—yes, we favour a local income tax. The Conservatives, especially, jump up and down and say, "Well, that is completely ridiculous. It would not work and it would be really expensive." However, that system is used in America and most of Europe and it is not that difficult; in fact, it is quite simple. I understand that Treasury computers even have spare fields left to take into account the one piece of information that they would need—where someone lives—and deal with local income tax. The Treasury has been prepared for it for years. We must move on to a tax based on the ability to pay and there is probably more than one way of doing so.
As we go into the next set of local elections—or any local elections, or the general election—the clear message on council tax is not, "We shall vote for this lot of councillors or that lot." Whoever people elect to be councillors in the local elections, those will make only a tiny difference to the council tax. Fundamentally, the overall rises are largely dictated by what happens in central Government, whichever party is in power. When people go to the ballot box they should be deciding whether they want council tax to be kept.
The Government do not seem to have made up their mind, although they are undertaking a review, so I will give them the benefit of the doubt at the moment. However, let us hope that they decide to change the tax
84WH
to something based on the ability to pay. Let us give them the benefit of the doubt while they are thinking about that. Nevertheless, let us be clear that every time that someone goes to the ballot box and votes for the Conservatives, they are voting to keep council tax and to keep year-on-year above-inflation increases. Every time that people vote Liberal Democrat, however, they are voting to scrap council tax and replace it with one based on the ability to pay.
10.18 am
Mr. David Watts: I am grateful to be able to take part in this important debate. I congratulate the Government on introducing a fairer system that increases resources to local authorities and gives them a secure future. The funding system should lead to no cuts in public service, reasonable tax increases and a stable funding base for local government.
I am pleased to see so many members of the Pol Pot party here—those who believe that the world started in 1997 and want to forget the events that brought us to the election of the Labour Government. I should like to take them back to some of the problems that we faced and the reasons why we needed change. Many of my hon. Friends, and certainly a lot of Labour councillors in the north-west, are fed up to the back teeth of hearing whingeing Tories and Tory councils.
One accusation made against the present Government is that they have fiddled the system. May I take hon. Members back to 1989, when a fiddle took place under the Tory Government? My own local authority lost £10 million that year. Millions of pounds were transferred from Labour to Tory authorities in one year in what must have been the biggest fiddle of local government funding. Not prepared to deal with the fact that they had caused the closure of the coal mining industry in my constituency and created mass unemployment, the Tory Government savaged council taxes by transferring resources away from areas such as St. Helens. The poorest councils had the poorest grants and the highest council tax. There was a real need for change.
We have heard about Wandsworth and Westminster. I used to say that if my local authority in St. Helens had received the same grant per head as Westminster, there would have been no council tax at all, there would have been no cuts in public services and every constituent could have been sent to Spain for a holiday. That gives Members some indication of the scale of the fiddle that went on to achieve the aims of the last Tory Government, one of which was to demonstrate that Tory councils were far more efficient than Labour councils.
Sir Paul Beresford: Does the hon. Gentleman accept that Tony Travers and Rita Hale are two so-called independent experts?
Mr. Watts: No.
Sir Paul Beresford: Well, most people do, including the Government and Select Committees who have taken advice from them. During the last Tory Government, both of them said independently that the means of distribution using verifiable needs indices was the fairest

85WH
method possible. They have been significantly silent this time round, except that Rita Hale helped the Select Committee with their condemnatory report on this procedure.
Mr. Watts: One can find consultants who will say anything. The best way of describing a consultant is someone who borrows a person's watch to tell them the time. To be frank, I would not take too much notice of any individual pieces of research conducted by a consultant.
The system is not perfect. As my hon. Friend the Minister knows, I am opposed to floors and ceilings, as they ensure that local authorities such as mine, which have been desperately looking forward to a change in the system, are prevented from receiving resources to which they are entitled. It is a fact that Westminster will continue to receive £30 million more than it should under the new system—the figure for Wandsworth is something like £17 million. Those two local authorities have since 1989, been receiving millions of pounds of public money to which they are not entitled, and the Labour Government have built in a system that will maintain that indefinitely.
I do not believe that everything in the garden is rosy. I ask the Government, once again, to consider changing the floors and ceilings system as quickly as possible. The present system means that Westminster, Wandsworth and similar councils are still managing to maintain very good services at a low cost to the taxpayer. At the same time, areas such as St. Helens are facing undue levels of council tax, while the council is not able to provide the sorts of services that people need.
Turning to individual grants, we have all made cases for our own individual constituencies, but I remind Members that my local authority, even with the change, receives £85 per head less than the national average, despite the fact that it covers an objective 1 and single regeneration budget area and that we still have high levels of unemployment and poverty. That cannot be right. The sooner the floors and ceilings are changed to move resources to areas such as St. Helens, the better.
Tory councils have been whingeing regularly for the past few months, but I have always thought that such councils were featherbedded by the 1989 system, and that they are inefficient, ineffective and wasteful. I would like massive changes to make them more accountable to their local taxpayers. The present system introduced and advocated by the Government does not mean that high council tax increases or cuts in public service are inevitable. Local authorities will have to deal with problems in the same way as my local authority has done for many years. They should ensure that they are as efficient as mine is.
The second point on which I take issue with my Government is that of the grading of local authorities. We have heard from Opposition Members about the performance of Westminster and Wandsworth councils and that the Government have classified them as grade I local authorities, and I take that on board. However, if councils are receiving £30 million or £17 million more than they should, it is no wonder that they provide grade 1 services. I suspect that if resources
86WH
were removed from those local authorities, they would not do as well as they have done in the past. Although my local authority was given a very good grade, it would probably achieve grade I status if it received the same level of funding as Westminster or Wandsworth receive, or if it received the funding available after the floors and ceilings were removed.
Mr. Curry: Given that one of the local authorities that received the largest amount of money in the country is Hackney and that whenever we categorise local authorities we always have to create a special category at the bottom labelled "Hackney", does the hon. Gentleman believe that his correlation between service and money is holds true in all circumstances?
Mr. Watts: I do not believe that it is true in all circumstances. There are examples of poor Labour local authorities, but Hackney has some severe problems that most local authorities do not have to face. There are underlying reasons why Hackney has particular problems, and I would not like resources to be moved away from areas in which there are proven high levels of deprivation.
The 1989 system that was introduced by some of the architects on the Conservative Benches meant that the poorest local authorities with the biggest problems had massive resources taken away from them and given to some of the richest local authorities. I ask right hon. and hon. Members to think about the fact that if they examine the average council tax in most areas, they will find that the highest council taxes are still being levied in the poorest areas. Far from the new system being unfair to councils such as the ones represented by Conservative Members, there is still some way to go before we deal with the deprivation in our areas.
I congratulate the Government, who have devised a system that means that there should be no cuts or massive increases in rates. If there are, they will be the responsibility of the Tory councils and not the Labour Government.
Several hon. Members rose ߞ
Mr. Joe Benton (in the Chair): Order. For order's sake, I shall call one more speaker and then move on to the winding-up speeches.
10.28 am
Mr. Keith Simpson: I congratulate my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) on initiating this debate. I also congratulate the hon. Member for St. Helens, North (Mr. Watts). I pass to the hon. Gentleman our praise—which the Whips should notice—for calling many councils whingers. That will go down incredibly well and all of the Labour councillors seeking re-election in my area will be very grateful to the hon. Gentleman, who has a great career ahead of him.
I will make only two points, because my right hon. and hon. Friends have already laid out the Conservatives' concerns. First, the Government cannot escape the fact that many councils have lost out under the new formula, which is seen by voters of whatever political party in the shire counties as being

87WH
demonstrably unfair. They recognise that, which is a major political problem for the Government. Norfolk, my own county council, has demonstrably lost out.
My second point has already been mentioned. The public have finally recognised the enormous loading of costs on councils and many parts of the public sector. My hon. Friend the Member for West Derbyshire referred to what has happened in education. The Secretary of State for Education and Skills came a cropper in Norfolk about that when he gave an interview in the Eastern Daily Press in which he said that schools had received new money. He was blasted away by hundreds of teachers, parents and governors who said that there had been extra money, but that all the extra costs for schools meant that they were seriously negatively affected. The right hon. Gentleman had to do a massive U-turn.
A similar problem will happen in the May elections because of the consequences for Norfolk and other areas that have had money taken away in an unfair council settlement combined with what the voter now recognises as extra costs. I shall explain briefly what that will mean for Norfolk county council, although I am sure that many hon. Members representing other local authority areas face similar problems. National insurance will cost the council, as an employer, an extra £2.8 million, landfill tax will cost £400,000, and preserved rights relating to social services will cost an extra £400,000. Fridge storage will cost £570,000, to compensate for the Government's underfunding; abandoned cars will cost £300,000, and aggregate tax £350,000. Fairer charging relating to social services will cost £1.3 million for both phases 1 and 2.
The position is unfair, even for those councils that have received extra money. The Government have loaded costs on to them, but I disagree with my hon. Friend the Member for West Derbyshire: I do not believe that that is the fault of the Minister and his Department. The Minister has little ability to do anything. The real power in the Government is the Chancellor of the Exchequer: with his Napoleonic, almost Stalinist, ability to control everything in Whitehall and at national and local levels, the blame stops with him. In two hours, the Budget will be announced. This morning, the BBC described the Budget as a being like a cup of espresso coffee, "dark and very bitter". The bitterness will be played out in the May elections, when voters will rebel against the council tax, underfunding and the national insurance. Despite wasting all that money, the Government have failed to deliver.
10.32 am
Mr. Edward Davey: This is an important debate. The reason why council tax levels are becoming such a hot political issue is not that we are facing local elections in May. In fact, council tax levels in previous years have not been such a big issue. However, they are now beginning to bite. The unfair design of the council tax as a tax is becoming even more apparent. That was obvious to many of us before, but now that it is reaching such a level, that unfairness is becoming apparent to council tax payers.
The council tax was designed as an unfair tax. It replaced the most unfair tax imaginable. When the Conservative Government replaced the poll tax, they
88WH
thought of the next most unfair tax imaginable, and that was the council tax. There is not a tax anywhere in the world that is more unfair than the council tax, other than the poll tax, which no country now has. VAT, national insurance and income tax are far more progressive.
The fundamental problem will not go away this year; each year from now on, people will feel the pain of the council tax because of its unfairness. I shall give some statistics to show its inequity. The poorest 20 per cent. in our society pay more than three times as much in council tax as a proportion of their income than the richest 20 per cent. of people do. No other tax has that profile: it is an incredibly unfair tax. Even though most people pay far more in VAT, excise duty, national insurance and income tax, there are not as many complaints about them as there are about council tax because those taxes are largely progressive. Even VAT is progressive: the more you spend the more you pay, and the richest spend more so they pay more. The inbuilt unfairness of the council tax is what makes the debate important, and the debate will continue until this flawed tax is abolished.
I want to outline how this year's problems evolved. These are record rises in council tax—12.9 per cent. on average, which is appalling. Pain is really being felt out there. The Government's figures assumed a council tax rise of 6 per cent. However, councils are spending 2 per cent. more than the Government assumed in the formula spending share that they would. There are several reasons for that: salaries are increasing at an above-inflation rate, national insurance and council insurance premiums are higher, and there are greater pressures on social care. Those are the main service pressures that have led councils to spend, on average, 2 per cent. more than the Government assumed that they would.
If the council tax rise is assumed at 6 per cent. and spending is 2 per cent. more than was assumed, how do we end up at 12.9 per cent.? As has been said, there is a gearing effect of just over 3 to 1, so a 2 per cent. rise above the assumed figure for spending produces a 7 per cent. increase in council tax. There you have it: very simply, that is why there is a 13 per cent. increase in council tax.
Given that analysis, are the council or the Government to blame? The answer is very clear. The blame lies with the Government; there is no doubt about that. It arithmetically follows from the cost pressures that they put on local authorities and the grant levels that they set. I should be interested to learn from the Minister whether studies have been conducted in the Office of the Deputy Prime Minister, but only one conclusion can be drawn from whatever studies are conducted, and that is that the Government are to blame.
The Government have made things even worse. Sometimes, councils can try to manage things with a bit of wriggle room and flexibility. However, because of passporting—which is, effectively, a form of ring-fencing—and because of ring-fencing on top of that, the Government have prevented the councils from having any wriggle room, so they have had to go along with the cost pressures on spending. When one talks to council officers and councillors, it becomes clear that things have been even worse than that: because of the controls

89WH
that are now in place—the reserve powers to set minimum reserves—many councils are ensuring that their reserves are built up, so they are no longer trying to reduce the council tax by raiding the reserves in particularly bad years. That is another reason why there has been a lack of flexibility and wriggle room.
Another reason is the comprehensive performance assessments. Through those, the Audit Commission has made it clear that it is looking at the performance of council services, and a premium is put on performance rather than the tax base. Because of that regulatory pressure, councillors have said, "We must ensure that the Audit Commission deems us to be performing well. so we must put money into front-line services, even if that means higher taxes." All these pressures, which are coming from Whitehall, are the reasons why we have ended up with such a high tax this year. It is central Government's fault.
Central Government have set up a balance of funding review, and we welcome that. It has a wide remit. Suggestions have been made of possible ways to reform council tax, such as the addition of bands at both ends of the scale. However, those proposals do not grasp the nettle, which is the council tax. Because that is so unfair, one will never be able to shift the balance of funding from central to local government or to get away from the appalling gearing effect. Only if local authorities have a fair tax to levy will it be possible to shift the balance of funding down to the local level. That is why local income tax is so significant.
Mr. Mark Francois: I have a point to make about fairness. For many years the Liberal Democrats have run Chelmsford borough council, part of which comes under the aegis of my constituency. My constituents in South Woodham Ferrers pay the second highest precept in the borough. They pay a great deal of money to Chelmsford, which is largely spent in Chelmsford, so my constituents hardly get anything back from the council that the Liberals run. What is fair about that?
Mr. Davey: It is interesting that the hon. Gentleman talks about fairness, as it was his Government who introduced the tax. Previous Conservative speakers in the debate have claimed that Liberal Democrats are trying to have it both ways by blaming the Government on one hand and the local Tory council on the other. Here we have a Conservative doing the same thing. First he blamed the Government for the council tax rise; now he is trying to blame the Liberal Democrat council in Chelmsford. The fact that Conservatives make such claims shows up their hypocrisy.
Mr. Francois: What is the answer to my question?
Mr. Joe Benton (in the Chair): Order. The hon. Gentleman should lower his tone, direct his remarks through the Chair, or use the normal form of intervention.
Mr. Davey: Thank you, Mr. Benton. It is clear that in the May elections, a vote for either the Tory or the Labour party will be a vote to keep the council tax—the
90WH
most unfair tax in Britain's tax system. One can understand why the Tories are in favour of it; they introduced it, so it would look odd if they wanted to get rid of it. What is very odd is that the Labour Government have kept this Tory tax. That is astonishing. One would have thought that Labour Back Benchers, who see how it hits those on the lowest incomes, would campaign to get rid of this iniquitous, unfair tax. I make this prediction: over the next two or three years, many more Labour MPs will face up to the problem and will call for their Government to abolish this appalling tax.
10.41 am
Mr. Eric Pickles: I congratulate my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) on initiating a debate on an issue that affects so many of our constituents. The concern among Conservatives is demonstrated by the number of our right hon. and hon. Friends who are present. It is clear that the large increases have also caused great disenchantment among Labour councillors: the Labour party can fight barely 65 per cent of the local council vacancies, compared with nearly 84 per cent. fought by the Tory party. The Liberal Democrats account for a pitiful 65 per cent.—1 per cent. fewer candidates than last time.
The hon. Member for St. Helens, North (Mr. Watts) did the Chamber a service in demonstrating the difference between Wandsworth and Islington. Wandsworth is a well-run authority that kept council tax down for several years until the Government's fiddled figures forced it, against its better judgment and its natural inclination, to increase its council tax, which remains lower than that almost anywhere else in London or, for that matter, the rest of the country.
Mr. Watts: Does the hon. Gentleman share my surprise that Wandsworth and Westminster have to charge any council tax, given the size of their grants?
Mr. Pickles: I thought that the hon. Gentleman's argument was that the Tories had stuck it to him, so he was now going to stick it to the Tories. I used to represent a very deprived area: every time Wandsworth received additional money, so did we, because our areas suffered similar amounts of deprivation. Distributing funds on the basis of hatred and class warfare is not sensible.
My right hon. Friend the Member for Skipton and Ripon (Mr. Curry), in a marvellous explanation of the way in which the grant operates, demonstrated the significant shift from the countryside to the town. He exposed how fiddled the figures are and made clear a point that does not seem to have been grasped by most people: this is merely the first wave of increases. They will be higher next year and even higher the year after. Record increases will continue. My hon. Friend the Member for Mid-Norfolk (Mr. Simpson) spoke most persuasively about the burdens placed on his county council.
Mr. Davey: Will the hon. Gentleman give way?
Mr. Pickles: I am just about to mention the hon. Gentleman, so I suspect that he will want to say one or two things after that. I think that his speech deserves the most attention.

91WH
The Liberal Democrats are going to produce an elaborate system to save £100 in council tax. That was in a briefing document published as a commendable example of open government after his party's conference. We know exactly what Liberal Democrat spin doctors said that the party's representatives should do if they were pressed on local income tax. I have to say that that was in sharp contrast to the Iraqi Information Minister. They advised caution, saying: "Don't be drawn too much". But we have records, and we know that the party's current Treasury spokesman said on Valentine's day 1990 that he thought that the rate of local income tax should be somewhere between 4 and 8 per cent. Since then, local authority spending has gone up considerably.
Mr. Davey: Will the hon. Gentleman give way?
Mr. Pickles: The hon. Gentleman should be patient—I have a lot more to say.
What started as an extra 1p on income tax now looks closer to 12p on income tax. Local Liberal Democrats do not have to climb a mountain to achieve that; they have to build a mountain of red tape. I am here to help the hon. Gentleman—
Mr. McLoughlin: No.
Mr. Pickles: I am. There is an easier way to achieve that £100 cut: simply vote Conservative. On band D, the Liberal Democrats are £99 more expensive than the Conservatives. The hon. Member for Ludlow (Matthew Green) said that band D is not typical and that we should compare like with like, but by and large, the Liberal Democrats control councils very similar to those that Tories control, so the comparison is actually rather good. For band D, Labour charges £81 extra despite the fiddled figures. It seems to be something of a home goal to build one's entire campaign around reducing council tax to Conservative levels.
The hon. Member for Kingston and Surbiton (Mr. Davey) has spoken before about his support for local government. I have to say that, at a time when local government is looking for support from the Liberal Democrats, they have let local government down very badly. In the words of Lord Greaves, a Liberal Democrat peer, they have been "blackmailed, bullied and browbeaten" by the Government. Lord Greaves, a man whom many in this Chamber know and respect—he has a distinguished record in local government—has stood down from the Liberal Democrat Front Bench and is very critical of the wisdom of the party's judgment.
I hope that the hon. Member for Kingston and Surbiton will use this early opportunity to apologise to local government for what Lord Greaves calls naivety and lack of judgment. Lord Greaves said:
"Liberal Democrats will believe that they have been let down by their parliamentary representatives"—[Official Report, House of Lords, 7 April 2003; Vol. 647, c. 21.]
I give the hon. Gentleman the opportunity to apologise to the Chamber.
Mr. Davey: The deal to which the hon. Gentleman refers is something of which we are incredibly proud and
92WH
local government is celebrating. The document from which he read gives a figure of 3 per cent. for local income tax, which completely belies all the other nonsense he spouted. The Liberal Democrats have set out our policies on local income tax, and we are more than happy to talk about them—they are not hidden from anyone. In the interests of open debate, will the hon. Gentleman tell us what his party's policy on council tax is?
Mr. Pickles: I was going to say that I am grateful to the hon. Gentleman for giving way to me, but I realise that I have the Floor.
The hon. Gentleman has uttered not a word of apology. He has lost the very thing that was probably most responsible for the success of Liberal Democrats in the House and he just dismisses that loss. I have to say that Lord Greaves knows more about income tax and local income tax than the hon. Gentleman, who is a member of a party that charges more, delivers less and promises everything.
There is no doubt that this is a lousy settlement. The hon. Member for Stroud (Mr. Drew) mentioned technical issues of gearing, claw-back and ratcheting, but we are really talking about robbery. The Government have broken the consensus on local authority funding.
Sir Paul Beresford: Not everyone agrees. I understand that when the Labour leader of Bury borough council was setting the council tax, he thanked those in the south who are paying for him to set a lower level.
Mr. Pickles: I am grateful for that information. We have been searching the country to find a Labour politician who would thank the Government openly; most of them are shame-faced. I am grateful to my hon. Friend for finding that person.
The Government have punished their enemies and rewarded their friends. We know from the independent Audit Commission exactly what the position is. We know that excellent authorities are losing money and lousy, badly run authorities are receiving additional money. The people who will be hit hardest are pensioners. as hon. Members on both sides of the Chamber have said. What the Government have given with one hand through increases in the basic state pension they have taken away through their stealth tax on increased council tax. Our constituency surgeries are taken up with worried pensioners who just want the Government to understand, but the Government will not listen.
I shall let one example speak for the many. A report in the Western Morning News on 4 April stated:
"West country pensioners protesting over council tax increases have been given yet another snub by"—
Labour—
"ministers. For almost a year they have been requesting a meeting to discuss their concerns—but to no avail. Now Devon County Council has also received a letter saying that Parliamentary Under Secretary Christopher Leslie will not meet the council's chief executive to discuss the matter.
No other alternative was offered. Albert Venison, chairman of the Pensioners' Action Forum, was not surprised. 'We have been trying to get a meeting since last year … They just don't want to know.'

93WH
Mr Venison was furious when a letter from the office of Nick Raynsford, asked him to stop sending the pressure group's monthly newsletter."
A pensioner took the trouble to let the Government know what is happening, but they thought that that was a bit of an inconvenience—they did not want to know. If the Government find the truth inconvenient, they ignore it. The council tax increases cannot be ignored and I look forward to the Under-Secretary justifying the disgraceful increases to pensioners.
10.52 am
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): I am grateful for the opportunity to make a short contribution to this debate and I congratulate the hon. Member for West Derbyshire (Mr. McLoughlin) on securing it. It has been almost like peering into a Tory spring conference. Perhaps it is his role as deputy Chief Whip on the Conservative Benches that has brought a great number of people to the debate, although consistency of argument may have been sacrificed for that. There will be another opportunity on Friday to debate council tax—although it concerns East Sussex—should any hon. Member want to listen to it.
I pay tribute to my hon. Friend the Member for High Peak (Mr. Levitt) who, as a Parliamentary Private Secretary, is prevented by the normal courtesies from taking part in the debate but who made his representations about the circumstances in Derbyshire as forcefully as any other hon. Member in that area.
Some obvious matters should be stated because they were neglected by Conservative Members. Decisions on local council tax are made by locally elected councillors. That is the purpose of local democracy and why people vote in local elections. At the end of the day, the buck stops with locally elected representatives, and people throughout the country should recognise that those councillors set the council tax and must be held accountable for that.
Mr. Curry: If that is the case, will the Government renounce now—permanently—any intention to cap this year, next year or the year after that?
Mr. Leslie: Certainly, unlike the previous Administration, of which the right hon. Gentleman was a part, which operated a crude and universal capping system and under which democracy was thrown asunder by a capping policy, we reserve the right to protect the public from excessive circumstances and are studying the current figures closely. However, we do not feel that we should override democratic arrangements unless there are strong reasons to do so.
Before talking about other matters, I want to deal with the specific circumstance of Derbyshire Dales district council, which was raised by the hon. Member for West Derbyshire. The hon. Gentleman did not talk very much about the county council settlement. The county council represents by far the largest proportion of the overall council tax bill. Derbyshire county council had a very generous settlement—a 7.8 per cent. Increase
94WH
in the Government grant—and the hon. Gentleman's comments about the district council need to take that into account.
There are many explanations for the budget increases. Derbyshire Dales district council has taken a conscious decision to increase its own budget by 9.5 per cent. compared with the previous financial year. Even though I hear the hon. Gentleman's claims about extra pressures, which I think are rather dubious, it was that council's decision to make the 9.5 per cent. increase. For good or bad, those councillors must explain to their electorate why they have increased their budget by 9.5 per cent. That increase will be passed on to the council tax.
If one examines the census figures in relation to the new formula, one will see that there have been significant population changes in Derbyshire Dales. There has been a 2.9 per cent. reduction in the recorded population, which obviously has an impact given that the formula reflects population indices as well. That may well also account for some of the changes in the funding formula. If one takes into account some of those factors, the floor that we have been able to protect for Derbyshire Dales district council by giving it an above-inflation increase shows that the Government have made the right decision in this case. I appreciate that the hon. Member for West Derbyshire will have a different opinion about that.
It is important to note that the grant increases throughout the country have been extremely significant. Increases have been very great—totalling an extra £3.8 billion for this financial year. Since the Government came to power in 1997, there has been a 25 per cent. increase in the injection of investment in real terms. Every single council is getting more and, for the first time ever this year, receiving an above-inflation increase.
Mr. McLoughlin: Will the Minister give way?
Mr. Leslie: In the three minutes that I have left, I really must refer to the comments of other hon. Members.
My hon. Friend the Member for Stroud (Mr. Drew) discussed the nature and the fairness of council tax. He mentioned that the Government have announced that we have started a balance of funding review examining issues relating to gearing, local accountability for revenue generation and spending. There are no easy options on the issue, but a central-local balance is something that the Government have recognised in that review.
My hon. Friend the Member for St. Helens, North (Mr. Watts) welcomed the changes in the formula. I am glad that he saw them as an extra measure of fairness. St. Helens council will receive 8.2 per cent. extra funding. My hon. Friend questioned the use of floors and ceilings. Many hon. Members feel that there is a necessity for protection in that case, but we have not decided levels for future years, and I shall take his representations into account.
The hon. Members for Ludlow (Matthew Green) and for Kingston and Surbiton (Mr. Davey) attacked the council tax and posited the idea of a local income tax. To those hon. Members who argued that there should not

95WH
be any resource equalisation—putting to one side the fact that the balance of funding review will consider all such issues—I say that in lower-income areas the effect of a local income tax would be lower revenue for those councils. How would one deal with that? Would one make cuts in deprived areas, or would even greater resource equalisation have to take place? The hon. Member for Kingston and Surbiton said that there was not enough funding. I feel that the 5.9 per cent. increase in funding is extremely generous.
It is clear from the comments of other hon. Members that they may not have seen that Conservative councils cost most and Labour councils cost least. The average council tax for 2003–04 is more than £1,000 for Conservative-controlled councils and £818 for Labour-controlled councils. Conservative councils have introduced the biggest average increase—16.2 per cent.—in council tax from this financial year.
The issue is extremely serious. The public will judge Opposition Members and their parties at the coming elections. Unquestionably, the Government have been extremely generous in terms of the investment going into local government and I commend the figures.

Organic Beef Farming
11 am
Mr. Anthony Steen: Thank you for ensuring that this matter is debated, Mr. Benton. Even though it is Budget day, it is obviously a matter that will concern many people in the country and certainly in my constituency. It is always a pleasure to see that the Minister for the Environment is present, because that means that we shall have a high-quality debate, albeit a short one, and I know that I shall get a considered, careful and sensible response.
Organic food has become synonymous with sustaining good health, better-tasting food and food free from harmful pesticides. An increasing number of consumers believe, therefore, that buying organic will reap them personal health dividends. Astonishingly, 70 per cent. of organic food sold in our shops and supermarkets originates from outside the United Kingdom, where the Demeter label, which signifies organic, is not recognised and where the Soil Association's tough requirements cannot be enforced. As a result, how do we know that organic crops grown in the third world and south American countries have never been sprayed with chemicals or that their animals have not been fed with additives? We do not. That is why organic food produced by British farmers is extremely significant. We have the Soil Association and the Demeter label, which ensure the highest standards and that the source and quality of the food that we choose to buy and eat is clearly stated.
I am most fortunate to have in my constituency of 'Totnes a number of splendid organic enterprises. As the Minister probably knows, Cranks restaurant was founded in Totnes. There is the famous Riverford farm, which pioneered organic food several decades ago, and Tor Dean farm is another outlet. A great deal of organic food is grown on the land and we have the wonderful sight of a number of pure South Devon cattle grazing on the luscious grass on the Sharpham estate on the banks of the River Dart, surrounded by spectacular countryside. The herd of 80 organic South Devon cattle has a pedigree stretching back nearly a century. It has been totally free of any disease, whether it be BSE or foot and mouth. In fact, no foot and mouth cases were identified in my constituency, which was miraculously spared that devastating disease. The herd is in prime condition and is the pride and joy of Mr. and Mrs. Richard Smith, who own it. The cattle have been reared in an idyllic environment, which in the past has resulted in the most spectacular meat, for which there is considerable demand both locally and nationally.
Since April 2002, however, the Smiths have been faced with an insurmountable problem, which is why I brought this matter to the House. There is no abattoir within a 150-mile radius of their farm in Totnes that is able to slaughter their cattle under the beef assurance scheme—a Government-funded scheme. As a result, the animals have to be sent for incineration; they are condemned to be burned because of new rules and regulations introduced last April. Those rules compel abattoirs to slaughter beef assurance scheme cattle separately, which creates a logistical problem for most abattoirs because they are forced to stop the line to process them. That requires the abattoirs to have

97WH
separate storage space, as well as everything else. In effect, two parallel lines or abattoirs are needed for there to be sufficient space for the separation.
Before the new regulation, the Smiths had no problem at all. Langs' abattoir in Ashburton, a long-established and well regarded slaughterhouse in my constituency, was happy to take the organic cattle, but now it does not have the refrigeration space necessary to accommodate them if tests are to be carried out.
In answer to a parliamentary question that I tabled on 13 January about the position in the west country, the Minister for Rural Affairs and Urban Quality of Life stated:
"Regarding the unavailability of abattoirs to slaughter under the Beef Assurance Scheme, all licensed abattoirs are permitted to slaughter Beef Assurance Scheme over thirty month cattle, provided they are willing to facilitate their testing for BSE. On receipt of a negative test result, the carcase must be sent to a licensed cutting plant that is separately licensed to remove the vertebral column and dorsal root ganglia before the meat is released for human consumption. All licensed cutting plants are free to apply to the Food Standards Agency for an additional licence to remove vertebral column. It is a simple process, no fee is charged, and all have been encouraged to apply."
Significantly, the right hon. Gentleman continued:
"None have done so in the south west peninsula."—[Official Report, 13 January 2003; Vol. 397, c. 370W.]
EC regulation 999/2001 lays down rules for the prevention, control and eradication of certain "specified risk materials". Annex V of the regulation specifically includes within the definition of specified risk material
"the vertebral column, including dorsal ganglia, of bovine animals aged over 30 months."
Paragraph 3 of the annex states that specified material
"must be stained with a dye and, as appropriate, marked with a marker immediately on removal, and completely destroyed".
The regulations are part of EU-wide food regulations.
The Minister drew my attention to R.M. Gearing, a cutting plant in Newton Abbot Is the Minister saying that Langs' can slaughter Mr. Smith's organic cattle without separate lines and refrigeration, and that, immediately after they are killed, they can he taken to R. M. Gearing for finishing? Langs' understands that it cannot do that. Its space is confined and, more important, it does not have the money to set up two parallel lines or to provide separate refrigeration. No Government grants are available, so there is no way that Langs' can do that. What is Langs' supposed to do?
To compound all those difficulties, the Smiths are obliged to pay the Government more than £300 a year to be eligible for the beef assurance scheme, which is absolutely essential to those who breed organic cattle. To satisfy the beef assurance scheme criteria, the Smiths had to prove that they had a specialist beef herd with no dairy cattle for the past seven years—they have proven that; that their herd had been established for at least four years, unless it comprised of animals from other beef assurance scheme herds—it has been established for nearly 100 years, not four; that their herd had had no confirmed cases of BSE—no BSE or anything else for 100 years; that no feed containing mammalian meat or bonemeal had been fed to their animals during the past seven years—they have proven that; and that during the
98WH
past four years no concentrates had been fed to their animals unless from a mill that had not used mammalian meat or bonemeal, or unless home mixed with no mammalian meat and bonemeal—they have proven that. The Smiths passed all the tests with flying colours.
The beef assurance scheme is principally designed for organic farmers because it allows cattle aged over 30 months and under 42 months to be slaughtered and sold. Otherwise, any animal over 30 months would go for incineration. The scheme was set up specifically to help people in the Smiths' situation, simply because organic cattle take longer than ordinary cattle to finish—using natural methods, it takes longer for them to grow to their optimum size. The South Devon is a large breed. Cattle are finished on grass and need an extra 12 months to reach their optimum size.
I gather from the Smiths that feeding their cattle on an organic mix of cereals, maize and oats—a kind of concentrate—would help accelerate their growth. However, the cost of such organic cereal is excessive unless one can grow it on one's own land, in which case it becomes a feasible alternative for speeding up the growth of the animals.
Unfortunately, the land on the banks of the Dart has very thin soil, which makes it impossible for the organic mixture to be grown there. Buying it in is not financially viable. Animals would not be caught by the 30-month rule, but it would be totally financially unrealistic. However, the cost of feeding the animals on an imported mixture of cereals would far exceed the price that the Smiths could receive for each animal, so that is not an option either.
Where are the Smiths supposed to go if there is no local abattoir with sufficient facilities to slaughter organic cattle under the beef assurance scheme? There is an abattoir in Gloucestershire and another in Penzance, but both would require a round trip of 300 miles in a day. Not only is such a journey costly in time and fuel, not to mention man hours, but it would put a considerable strain on the animals. As Mr. Smith said, it would be physically exhausting, financially crippling and totally unfeasible, bearing in mind that the farm is small and intends to slaughter only half a dozen cattle a month.
The result is horrifying. Mr. Smith's animals are condemned to be burned for no good reason. He is disheartened, frustrated and deeply depressed. He is proud of his animals and has an enviable track record, but he has been given so much false information about what is and is not possible that time has passed and he has been unable to make any arrangements for the cattle to be slaughtered legally. The abattoir licensing system introduced last April happened so quickly that Mr. Smith does not believe that the Government understood the consequences of the regulations and the effect that they would have on farmers like him who belong to the beef assurance scheme.
Can we imagine a more appalling waste than burning outstanding organic meat and importing dubious organic meat from tens of thousands of miles away, which creates no jobs for our farmers and no work for our people? The regulations are similar to the obscene common fisheries policy, under which fishermen are

99WH
forced to throw perfectly good quality fish back into the sea dead if they inadvertently land them in excess of their quotas. To throw more fish back into the sea dead than one lands at port is an obscene abuse of nature and the food that it produces to feed us.
I am not sure why other European countries fare better than we do in the organic business. They seem to accommodate the current rules and regulations in a more acceptable way than we do. Imagine a French farmer who possesses 80 wonderful, prized animals being forced to send his herd for incineration because of EU rules and regulations. That simply would not happen. In the case that I described, a herd will be destroyed for all time. There will be few or no South Devon organic cattle left if the Minister does not find a solution to this problem. If an answer is not found, it will be another example of the Government failing to recognise the need to sustain our organic farmers, and inadvertently driving another nail into the coffin of the farming community.
What should the Government be doing? To put it simply, they should assist abattoirs to provide what is required to service organic farms in their area. More farmers would diversify into organic farming if such facilities were available. There is money in organic food. In Austria, 8 per cent. of the land is used for organic purposes. In Italy, the figure is 7 per cent. In Britain, it is less than half that. Why cannot the Government get behind farmers such as the Smiths and help them to survive? They do not want handouts; they want an opportunity to sell their wares legally.
A couple of months ago, Sir John Krebs, chairman of the Food Standards Agency, hinted that the over-30 month rule might soon be relaxed. If that is the case, presumably the distinction between organic beef assurance scheme cattle and non-organic cattle would disappear. Will the Minister say whether there is any foundation of hope about what Sir John Krebs said about the relaxation of the rule?
The Government appear by default to have allowed obstacles to emerge to prevent farmers from rearing traditional South Devon cattle for our home consumption. The beef assurance scheme in the Smiths' case is a sick joke. The Government have provided the Smiths with a great deal of information, but much of it has been misleading. Mr. Smith's 80 prized cattle, which could have attracted about £800 each if slaughtered and sold for consumption, are worth less than £350 each if they go for incineration. Instead of a herd value of £64,000, Mr. Smith would be lucky to achieve £28,000 in total because of the new rules and regulations.
Are the Government simply going to stand by and see another farmer forced into poverty because of their inability to see the direct effect of the new red tape introduced a year ago, and allow it to wreak the sort of devastation that could lead to a prized herd of organic South Devon cattle becoming a thing of the past?
11.14 am
The Minister for the Environment (Mr. Michael Meacher): I congratulate the hon. Member for Totnes (Mr. Steen) on making such a well documented, detailed and persuasive case. Mr. and Mrs. Smith, his constituents, will be proud of him. He could not have raised their problems more pointedly or more effectively.
100WH
I shall start by saying something about the viability of organic beef farming and then deal with the more detailed issues relating to Mr. and Mrs. Smith. I do not think that I can answer all the questions, but I will certainly complement in correspondence what I do say.
The United Kingdom market for organic products is generally pretty buoyant and expanding, as the hon. Gentleman said, and we all wish it to expand considerably further. The market has increased in value from £40 million in 1987 to more than £150 million in 1994, to £250 million in 1998 and to £400 million in 2000. We reckon that it is currently worth about £950 million—almost £1 billion. Imports from Europe and further afield, particularly of cereals and fresh produce, account for much of the supply.
All the available evidence therefore suggests that, for the foreseeable future, the UK organic market will continue to expand. The Government are not just watching while that happens, but taking steps to ensure that it does. There is considerable opportunity for import substitution. Incidentally, the hon. Gentleman talked about whether imported organic products necessarily met the high standards in this country. Such products must be specifically authorised on the basis of an assessment by the UK register of organic food standards—UKROFS—of the equivalence of standards. In some cases, the European Commission authorises such products, but they are not allowed into the country without checks.
We are anxious to see import substitution. Our target is for the proportion of organic food supplied by UK producers to increase from its current low level of about 30 per cent. of organic produce consumed in the UK to at least 70 per cent. by 2010. That would be broadly in line with the UK's share of conventional produce. Of course there are problems of seasonality. Some products will never be commercially developed in this country, given our climate. However, local production is fully in keeping with sustainability objectives and the wider ethos of the organic movement, and UK farmers and producers could do a good deal more to meet the demands of UK consurners.
Consumers want a wide range of safe, quality foods, produced to high animal welfare standards— the thrust of the hon. Gentleman's argument about abattoirs is relevant in this respect—with minimum artificial input, at affordable prices and with year-round availability. That is a pretty testing objective. Consumers are becoming increasingly aware of the wider benefits that organic production methods can bring to the environment in terms of soil health and fertility, biodiversity and the wider landscape. I am extremely keen that we do more to promote public awareness of those benefits through the internet and more direct Government support.
Many farmers and growers in the UK have developed profitable businesses by supplying the market with organically grown produce. Mr. and Mrs. Smith have particular problems, which I shall come to, but many farmers are doing well. Indeed, I would go so far as to say that some farmers and growers might miss a good opportunity if they do not give serious thought to organic production. That may help them to maintain or improve their incomes. When combined with other, social benefits of organic farming production, conversion can provide real economic opportunities.

101WH
The hon. Gentleman rightly asked what the Government were doing. We are committed to providing increased funds and assistance to those farmers wanting to convert through the organic farming scheme. Funding for that totals £140 million during the lifetime of the England rural development programme, which is £22 million to £23 million per year. The scheme, which is entirely voluntary, offers payments to farmers to aid them in converting to organic farming, and, from next month, to help existing organic farmers to continue farming in an environmentally beneficial way. Since the scheme was introduced in 1999, some 2,250 farmers have committed approximately 74,000 hectares under the scheme—still a relatively small amount compared with the cultivated space in this country, but it will steadily grow.
Devon, I am glad to say, has the second largest area of land in the organic farming scheme after Northumberland, with nearly 15,000 hectares and a total claim value of nearly £1 million. Organic farming is a big deal in Devon.
The number of organic beef animals slaughtered during 2002 also increased substantially, by 80 per cent., from 5,000 animals the year be fore last to 9,000 last year. The wholesale value of UK-produced organic meat increased by more than 70 per cent., from £22 million to £39 million over the same period. Those substantial increases reflect the considerable increase in the output of organic meat during the year. The organic beef price for autumn 2002 was between 220p to 230p per kg compared with a conventional beef price of about 175p. Those figures are taken from the Soil Association's report on organic Food and farming.
Organic farming is not suitable for every farm, however, and farmers must evaluate their options carefully. During conversion, output is likely to decrease without the compensation of premium prices and, as a result, the decision to convert requires detailed technical planning and financial budgeting if an organic enterprise is to succeed. It is also important to remember that not only will there be changes to husbandry techniques, but some consideration must be given to how produce will be marketed to obtain the maximum potential from organic markets and organic premiums.
In order to achieve organic status, land must be registered and have been farmed to an organic standard for a minimum of two years. Livestock can be converted either with the land—sometimes known as simultaneous conversion—or subsequently over a shorter period. However, since the animals must be fed on organic rations during conversion—that includes their forage—the conversion of a livestock enterprise is in practice finalised when sufficient land has been converted to supply the required forage.
Mr. Steen: We are talking not about conversion, but about a herd that has been in existence for 100 years.
Mr. Meacher: I appreciate that. I was addressing my remarks to the title of the hon. Gentleman's debate. I shall shortly come to his point, but I shall conclude my
102WH
initial remarks by saying that I think it important to tell farmers and producers who are looking to convert to organic beef to secure their market before beginning conversion. Many producers have had success in marketing direct to the public and building up a relationship with their consumers, and they are able to maintain a premium higher than that achieved by those selling to processors.
Farmers and producers are also advised to work with producer groups, which help to maintain prices across the sector by co-ordinating supply to ensure continuity. Basic management advice is also essential. For example, producers may need to reduce stocking rates to run an organic system, as heavily stocked land is more likely to rely on anthelmintics for worm control. Other advice might include sourcing organic feed, manure management and veterinary treatment. As part of that process, the Department for Environment, Food and Rural Affairs offers free on-farm advice delivered by the organic conversion information service. One must not forget the retailers, who have an important role. The organic action plan records that the major retailers have committed themselves to increasing the proportion of food that they source in the UK in product sectors, when it is feasible for British producers to supply at acceptable levels of quality and price. I am personally meeting the chief executives of the major retailers to try to tie them down on the commitments that each is prepared to make.
I turn now to what the hon. Gentleman said. I accept that the requirement under the beef assurance scheme to test over-30-month cattle for BSE, and to remove their vertebral columns, has caused difficulties for some members of the scheme, including, I am sorry to hear, the hon. Gentleman's constituents, Mr. and Mrs. Smith, whose farm is near Totnes. My predecessors and my hon. Friend the Under-Secretary for Environment, Food and Rural Affairs and my hon. Friend the Under-Secretary of State for Health (Ms Blears) have responded to the concerns raised by the hon. Gentleman. This is a long saga, which I am pleased to take on and address if I can.
The Government have supported the introduction of harmonised EU BSE controls, because those provide the best overall protection for UK consumers from the risk of BSE infectivity. The EU requirement to treat vertebral column from OTM cattle as specified risk material existed from October 2000, but that was not implemented in England and Wales in the hope that a derogation could be obtained. During a visit to the UK in June 2001 by Commission inspectors from the Food and Veterinary Office, who were checking compliance with BSE controls, the UK was criticised for not having implemented the requirement. Given our support for EC-wide transmissible spongiform encephalopathies measures, the only option was to implement the vertebral column requirement. That is why it is in place.
There are fewer than 50 BAS herds, which account for a tiny proportion of total slaughterings for human consumption. Most herds are small and produce only a few OTM cattle for human consumption. It is up to BAS herd owners to make their own commercial arrangements, and I appreciate that the Smiths have

103WH
tried to do that. The hon. Gentleman asked several relevant questions about the difficulties faced by the Smiths, especially on abattoir capacity. I understand that in the Devon region that capacity is adequate for current projections of increases in organic slaughtered stock. Nevertheless, to deal with 30 per cent. organic stock from Devon would require the total commitment of the two main beef and lamb plants in Devon and Cornwall licensed for organic slaughtering. That is unlikely to be commercially acceptable and I understand that that is a serious problem. I am told, however, that two cutting plants have recently been licensed in Devon and Cornwall.
Mr. Steen: It is not a question of cutting plants—Mr. and Mrs. Smith cannot get their animals slaughtered. I need the Minister to say whether Langs', which is the nearest abattoir, can slaughter the animals, rather than refrigerate them, and take them straight away to the cutting plant in Newton Abbot. We are dealing with a
104WH
crisis: in the next six months the whole herd will be burned. The Minister and his officials could deal with the matter and I hope that he will help me today.
Mr. Meacher: I certainly undertake to do so. I think that the matter is probably best pursued in correspondence, in which I will give the hon. Gentleman a detailed response.
All licensed abattoirs are free to slaughter for human consumption BAS cattle aged between 30 and 42 months and they have been encouraged to do so by the Food Standards Agency. We understand that many choose not to do so because of the testing requirement for BSE and the need for the cattle to be moved to a licensed cutting plant for the vertebral column to be removed. That is the problem.
I cannot give an instant response, but I undertake to ensure that my officials look at the matter in detail and to come back to the hon. Gentleman with a fuller response.
It being half past Eleven o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.

NORTHERN IRELAND

  Decommissioning
  David Taylor
  To ask the Secretary of State for Northern Ireland what recent progress has been made in decommissioning terrorist weapons. [107075]

  Jane Kennedy
  Currently no organisation is in contact with the IICD. I have reiterated on many occasions, and the position remains the same, it is imperative that both republican and loyalist paramilitary organisations complete the transition to exclusively peaceful means, real, total and permanent.

  Bob Spink
  To ask the Secretary of State for Northern Ireland if he will make a statement on decommissioning. [107080]

  Jane Kennedy
  I refer the hon. Member to the answer I gave today to my hon. Friend the Member for North-West Leicestershire (David Taylor).

  RUC Garden of Remembrance
  Angela Watkinson
  To ask the Secretary of State for Northern Ireland whether representatives from every bereaved family have been invited to the official opening ceremony of the RUC Garden of Remembrance. [107076]

  Jane Kennedy
  No date has been set yet for the official opening of the Garden of Remembrance. The Trustees of the RUC GC Foundation have advised me that they intend to issue invitations to all the families of murdered officers to the opening ceremony and to special events following the official opening.

  Devolution
  Ann McKechin
  To ask the Secretary of State for Northern Ireland what recent talks he has had with the political parties in Northern Ireland on the future of political institutions. [107078]

  Mr. Paul Murphy
  I refer my hon. Friend to the answer I gave earlier to my hon. Friend the Member for Glasgow, Anniesland (John Robertson).

  Colin Burgon
  To ask the Secretary of State for Northern Ireland what recent discussions he has had on the prospects for re-establishing the Northern Ireland Assembly. [107079]

  Mr. Paul Murphy
  I refer my hon. Friend to the answer I gave earlier to my hon. Friend the Member for Glasgow, Anniesland (John Robertson).

  Mike Gapes
  To ask the Secretary of State for Northern Ireland what recent talks he has had with Northern Ireland party leaders on the future of devolution in Northern Ireland. [107081]
  248W
  Mr. Paul Murphy
  I refer my hon. Friend to the answer I gave earlier to my hon. Friend the Member for Glasgow, Anniesland (Joan Robertson).

  Coleraine Fire Station
  Mr. Gregory Campbell
  To ask the Secretary of State for Northern Ireland on what dates in the past six months fire pumping appliances at Coleraine Fire Station have been found to the mechanically unsound and unsuitable for use in attending fire calls. [106999]

  Mr. Browne
  Over the past six months, the two fire appliances stationed at Coleraine Fire Station have been 'off run' due to mechanical defects on a total of five occasions. The longest of these was 37 days and a replacement vehicle was available for the period.

  Mr. Gregory Campbell
  To ask the Secretary of State for Northern Ireland whether there has been a change in policy on response levels for the Fire Brigade; and whether response times were met at Coleraine Fire Station on(a) 4 March and (b) 7 March. [107000]

  Mr. Browne
  The Northern Ireland Fire Brigade applies nationally defined standards of fire cover, categorised as A, B, C & D, where A is the highest risk.

  On 4 March 2003 fire appliances from Coleraine Fire Station were required to attend one Category C incident, which required an appliance to be at the scene within 8–10 minutes. On this occasion the response time was not met and the appliance arrived 13 minutes from the time of alert.

  On the 7 March 2003 there were a total of four incidents, all Category C requiring attendance by appliances from Coleraine Fire Station. On each occasion the first appliance arrived within 8 minutes from the time of the alert.

  Mr. Gregory Campbell
  To ask the Secretary of State for Northern Ireland what mechanical work has been undertaken to the fire pumping appliances located at Coleraine Fire Station in the six months to 7 March 2003. [107001]

  Mr. Browne
  Over the past six months to 7 March 2003, the following repairs were required to the two appliances stationed at Coleraine:

  Vehicle: PDZ 4239

  Date

  Repair

  10 September 2002

  Repairs to relay

  23 September 2002

  Air leak

  18 October 2002

  Air leak

  18 November 2002

  Brakes defective

  19 November 2002

  Service

  20 November 2002

  List from service

  21 January 2003 to 26 February 2003

  Accident damage repairs

  3 March 2003

  Wailer defective

  4 March 2003

  Fail to start

  7 March 2003

  Renew Wiring

  Vehicle: NDZ 2505

  Date

  Repair

  23 September 2002

  Wiring defective

  3 October 2002

  Hose reel blown off (nozzle)

  22 October 2002

  Defective searchlight

  29 October 2002

  Defective indicator

  249W

  Vehicle: NDZ 2505

  Date

  Repair

  9 November 2002

  Main pump defective

  15 November 2002

  Lead defective

  20 November 2002

  Searchlight and locker light defective

  4 December 2002

  Service

  5 December 2002

  List from service

  18 December 2002

  Fitted new hazard switch

  9 January 2003

  Door strap and horn defective

  29 January 2003

  Searchlight defective

  4 March 2003

  Fail to start

  Derryboy Primary School
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland when he expects work to commence on the installation of car-parking facilities adjacent to Derryboy Primary Schoool in the South Eastern Education and Library area. [106126]

  Jane Kennedy
  The South Eastern Education and Library Board are responsible for capital development at Derryboy Primary School. The Board has advised that additional land is required to enable the provision of car parking facilities at the school. The Board has identified a site and is awaiting a valuation from the Valuation and Lands Agency. When the valuation is available, the Board will be able to seek the approval of the Department of Education for the purchase of the site and to consider the project for inclusion in its minor works programme.

  Hospitals
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland how many procedures were postponed at hospitals in Northern Ireland in the last 12 months; and how many of these postponements resulted from emergency pressures. [106617]

  Mr. Browne
  Information is not readily available in the form requested and could only be provided at disproportionate cost.

  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland what criteria are used to assess the level of activity at hospitals in Northern Ireland. [106618]

  Mr. Browne
  Activity levels are assessed in terms of the number of beds and their usage, the number of sessions held and the number of attendances. Detailed definitions of all of the specific measures can be found in the DHSSPS annual Hospital Statistics publication which is available in the Library and from our website http://www.dhsspsni.gov.uk/stats&research/order.html.

  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland how many cancellations and postponements of appointments there were at Northern Ireland hospitals in each of the last three years. [106619]

  Mr. Browne
  Information is riot available in the form requested.

  Hyster (Craigavon)
  Mr. Weir
  To ask the Secretary of State for Northern Ireland what grants and other financial assistance have been made available to Hyster for the expansion of manufacturing at its Craigavon plant; and what 250W
  assessment has been made of the impact on other Hyster plants in the UK as a result of grants given to support the expansion of manufacturing at its Craigavon plant. [108117]

  Mr. Pearson
  My officials at Invest NI are in the process of finalising an agreement with NACCO Materials Handling Group, which manufactures a full range of forklift trucks under the Hyster and Yale brands. As that agreement has not yet been signed or approved by the Board of NACCO, I cannot provide you with specific financial information. I can, however, state that this project is not an expansion of current activities, but is aimed at securing and safeguarding current employment levels at Craigavon and an integral part of the appraisal process is to ensure that any proposed assistance does not disadvantage any other area of the UK.

  Lisburn Peace and Reconciliation Partnership
  Mr. Donaldson
  To ask the Secretary of State for Northern Ireland which organisations and projects have received grants from the Lisburn Peace and Reconciliation Partnership in each year since its formation. [106869]

  Mr. Pearson
  The Lisburn Peace and Reconciliation Partnership was set up to administer a range of Measures under PEACE I and PEACE II Programmes. To date it has allocated funding of £4.47 million.
  The attached Annexes details the organisations and amounts which received funding from the PEACE I (Annex A) and PEACE II (Annex B) Programmes. The detail for the PEACE I Programme is only available at organisation and amount awarded level.

  Neurosurgery Services
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland if he will make a statement on neurosurgery services in Northern Ireland, with particular reference to the availability of elective surgery. [107478]

  Mr. Browne
  Neurosurgery services in Northern Ireland are managed on a regional basis by the Royal Group of Hospitals Trust. Currently, the service is under significant pressure and limited elective neurosurgery is being carried out, the majority of cases being emergency and clinically urgent cases.

  The pressures on the Regional Neurosurgery service have arisen mainly as a result of shortages in experienced nursing staff, which is not a phenomenon particular to Northern Ireland; there are similar problems with this service throughout the NHS. Considerable efforts are being made by the Royal Group of Hospitals to address the current problems. These include the provision of additional theatre lists, the recruitment of nurses to allow additional neurosurgical beds to be opened, and treatment provided outside Northern Ireland for a small number of suitable patients. Work is also ongoing at the Royal Group of Hospitals in conjunction with the Health and Social Services Boards to consider proposals to further improve the service.

  Schools Threshold Awards
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland which schools in the South Eastern Education and Library Board area will lose funding as a result of the Department of Education's decision on the changes to payment of the threshold award; and what the shortfall will be for each of the schools affected. [106125]

  Jane Kennedy
  As the increase in schools' delegated budgets in 2003–04 is greater than in 2002–03, the South Eastern Education and Library Board provided the schools it funds with threshold figures for planning purposes only. The Board compared the actual costs of the threshold salary uplift in 2002–03 with the nominal position had the threshold budget been included in the Aggregated Schools Budget that year. However, as the Board has increased its Aggregated Schools Budget by 9 per cent. in 2003– 04, it is more appropriate for schools to consider their entire salary expenditure against their total budget before a budget shortfall can be inferred. It is also the case that the Board is proposing to its Finance and Property Services Committee to make £165,700 available to assist those schools with particular levels of threshold salary costs. In these circumstances, the final position will not be known until schools have completed their expenditure plans against their whole budget.

  Sports Funding
  Kate Hoey
  To ask the Secretary of State for Northern Ireland how much funding has gone from the Northern Ireland Sports Council to the Northern Ireland Cycling Federation in the last three years. [106363]

  Angela Smith
  The Sports Council for Northern Ireland has not allocated any funding to the Northern Ireland Cycling Federation over the last three years.

  Kate Hoey
  To ask the Secretary of State for Northern Ireland how many awards from the(a) Talented Athlete, (b) Talented Athlete Next Generation and (c) Talented Junior programmes have been made to cyclists who are members of the Northern Ireland Cycling Federation. [106364]

  Angela Smith
  One award has been made to a cyclist, who is a member of the Northern Ireland Cycling Federation, under the Talented Junior Programme in 2002–03. To date no awards from the Talented Athlete or Talented Athlete Next Generation programmes have been made directly to cyclists who are members of the Northern Ireland Cycling Federation.

  Kate Hoey
  To ask the Secretary of State for Northern Ireland in what constituencies(a) Exchequer and (b) Lottery funding goes to prepare competitions in (i) hockey, (ii) athletics, (iii) cycling, (iv) swimming and (v) equestrianism to compete against British teams. [106365]

  Angela Smith
  Information on Exchequer and Lottery funding for sport is retained in accordance with how it is distributed, i.e. to sport, to individual athletes and by programme. Exchequer and Lottery funding is not distributed on a parliamentary constituency basis and consequently the details you have requested cannot be provided except at disproportionate cost.
  252W
  Kate Hoey
  To ask the Secretary of State for Northern Ireland how much money has been allocated to(a) athletes and (b) equestrianism in Northern Ireland from (i) Lottery funding, and (ii) Exchequer funding in (a) 2000– 01, (b) 2001–02, (c) 2002– 03 and (d) 2003–04; and for which country the competitors allocated funding for the 2004 Olympic Games will be competing. [106366]

  Angela Smith
  The total amount of funding allocated to(a) athletics and (b) equestrianism in Northern Ireland from (i) Lottery Funding and (ii) Exchequer Funding in the years listed is as follows:

  (i) Lottery funding

  £

  Talented athlete

  Talented athlete next generation

  Talented junior

  (a) Athletics

  2000–01

  92,962

  20,502

  36,225

  2001–02

  25,524

  18,150

  —

  2002–03

  80,560

  11,560

  31,500

  Total

  199,046

  50,212

  67,725

  (b) Equestrianism

  2000–01

  —

  —

  —

  2001–02

  55,560

  —

  —

  2002–03

  32,800

  6,600

  —

  Total

  88,360

  6,600

  —

  All athletes and riders currently in receipt of Lottery Funding will, if selected, represent Ireland at the 2004 Olympic Games. However, as yet, selection for competition at the 2004 Olympic Games has not taken place, and it would therefore be premature to state that any of the individuals in receipt of awards will be competing. Furthermore any funding awarded is to assist towards preparation and training for major competition in general rather than specific competition such as the 2004 Olympic Games.

  (ii) Exchequer Funding

  £

  (a) Athletics

  (b) Equestrianism

  2000–01

  40,500

  4,663.41

  2001–02

  48,800

  2,000

  2002–03

  62,500

  2,874

  Total

  151,800

  9,537.41

  No awards for either Exchequer or Lottery have been issued for the period 2003–04.

  Ulster Hospital
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland what assessment he has made of the impact on the Ulster Hospital of proposed restructuring of hospital services in the province, with particular reference to capital expenditure. [106127]

  Mr. Browne
  Under Developing Better Services, the Ulster Hospital will play an integral part in the delivery of acute services for the greater Belfast area.

  A 4-phase Strategic Development Plan for the Ulster Hospital, estimated at just over £100 million, was announced in July 2001 by the Department of Health,

  253W
  Social Services and Public Safety. Phase 1 has been completed at a cost of £1.5 million. The second phase is underway and due for completion during 2005–06 at an estimated cost of £44 million Phases 3 and 4, estimated at a cost of £5 8 million will address the modernisation of the A&E Unit and the enhancement of a range of services and facilities which will help ensure that the Ulster hospital fulfils its role as an acute hospital.

  The timetable and funding of these developments will be decided when detailed proposals have been agreed with the Trust.

  Waiting Times
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland what the longest time is that any individual has been waiting for neurosurgical(a) admission and (b) initial outpatient assessment in Northern Ireland. [104733]

  Mr. Browne
  Information from the Royal Group of Hospitals indicates that at the end of January 2003 the longest time an individual has been waiting for neurosurgical admission is 3,308 days. That individual has been in regular contact with the consultant and has been receiving other treatment during that time.

  At the end of January 2003 the longest time an individual has been waiting for a first neurosurgical outpatient appointment is 749 days. That individual has cancelled their appointments on two occasions and has failed to attend on two other occasions. The first outpatient appointment was offered to the patient 183 days after the GP's referral.

DEPUTY PRIME MINISTER

  Eland House
  Norman Baker
  To ask the Deputy Prime Minister whether a building research establishment environmental assessment method document has been prepared for the refurbishment at Eland House. [96402]

  Mr. Leslie
  There are no current plans for a major refurbishment of Eland House. Eland House did have a Design Stage, the Building Research Establishment Environmental Assessment Method (BREEAM) assessment in 1995, when its fit out for the then Department of the Environment was nearing completion. A Very Good rating was achieved.

  Recent works to remodel two floors for open plan accommodation did not significantly alter the design of the building and thus did not require a specific BREEAM assessment.

  Area-based Initiatives
  Matthew Green
  To ask the Deputy Prime Minister if he will list area-based initiatives operating in(a) the West Midlands and (b) the south-east region, giving the (c) annual budget and (d) regional budget for each in each year since 2000. [106880]

  Mrs. Roche
  I refer the hon. Member to the answer given to the hon. Member for Ludlow (Matthew Green) on 12 March 2003,Official Report, column 320W.
  254W

  Conferences
  Mr. Pickles
  To ask the Deputy Prime Minister what conferences his Department has(a) sponsored and (b) been represented at since May 2002; and what was the cost of each sponsored conference since May 2002. [91621]

  Mr. Leslie
  The main conference sponsored by the Office was the November 2002 Urban Summit conference at a cost of £300,000. The Summit contributed to Government's thinking on the future urban agenda, including the Sustainable Communities Plan.

  Other significant conferences that the Office has contributed to include:

  £

  UNECE 9th Conference on Urban and Regional research

  90,000

  Six national E-local Government regional conferences

  30,000

  Major Infrastructures Conference

  26,000

  The Strategic Partnering Taskforce Conference

  22,000

  NHS Confederation "Connecting 2002" Annual Conference

  20,000

  New Economics Foundation Inner Cities 100 Forum

  20,000

  The Office has given support to a further 14 conferences, costing a total of £67,050.

  Information on conferences at which the Office has been represented is not held centrally and could be provided only at disproportionate cost.

  Council Tax
  Mr. Ruffley
  To ask the Deputy Prime Minister what estimates he has made of the cost of council tax collection and enforcement in each local authority in Suffolk. [108018]

  Mr. Leslie
  Local authorities in Suffolk reported council tax collection costs in 2002–03 as tabled as follows:

  £0001

  Babergh

  470

  Forest Heath

  494

  Ipswich

  1,173

  Mid Suffolk

  274

  St. Edmundsbury

  738

  Suffolk Coastal

  774

  Waveney

  469

  1 Budgeted figures

  Source:

  2002–03 Budget Estimate Returns

  Homebuy Scheme
  Lynne Jones
  To ask the Deputy Prime Minister what the budget is for the Homebuy scheme for(a) the current financial year and (b) 2003–04; and what his forecast is for spend as a percentage of budget by 31 March. [92785]

  Mr. McNulty
  The Housing Corporation expects to spend 100 per cent. of the £42.1 million budget for the Homebuy scheme in the current financial year (2002–03). The amount of funding for the scheme for 2003–04 has not yet been determined.
  255W

  Homeless People (Buckingham)
  Mr. Bercow
  To ask the Deputy Prime Minister how many homeless people there were in the Buckingham constituency on 31 March 2002. [107777]

  Mrs. Roche
  Aylesbury Vale District Council reported that there were 137 homeless households resident in all forms of temporary accommodation under statutory homelessness provisions on 31 March 2002. This information relates to households in the local authority area. Aylesbury Vale DC contains the entire Parliamentary constituency of Buckingham, and part of Aylesbury.

  Note:

  Includes households accommodated pending completion of enquiries by the local authority.

  Source:

  ODPM P1(E) housing returns (quarterly).

  Local Authority Employees
  Mr. Hague
  To ask the Deputy Prime Minister when he will publish a model code of conduct for employees of local authorities under section 82 of Part III of the Local Government Act 2000; and if he will make a statement. [107840]

  Mr. Leslie
  The Office of the Deputy Prime Minister intends to issue a draft code for consultation later in the year.

  Local Authority Funding
  Mr. John Bercow
  To ask the Deputy Prime Minister what representations he has received about the Local Authorities (Alteration of Requisite Calculations) (England) Regulations. [107783]

  Mr. Leslie
  No representations were received about the draft Local Authorities (Alteration of Requisite Calculations) (England) Regulations 2003, nor have any representations about those regulations been received since these regulations (S.I. 2003/195) were made.

  Local Elections
  Mr. Drew
  To ask the Deputy Prime Minister if he will make a statement on the time scale by which newly elected parish and town councillors must meet the requirements of the new Code of Practice [108116]

  Mr. Leslie
  Newly elected parish and town councillors are required to make a declaration of acceptance of office, which includes an undertaking to observe the code of conduct. The code requires that within 28 days of election or appointment to office, a member must register his financial and other interests.

  Neighbourhood Warden Schemes
  Mr. Bercow
  To ask the Deputy Prime Minister what assessment he has made of the pilot programme of neighbourhood wardens schemes across England and Wales. [107096]

  Mrs. Roche
  The evaluation of Neighbourhood Wardens is ongoing and the final report is expected in the Summer. Evaluation of the Street Warden programme is in its early stages and interim reports are not yet available. A copy of the 'Neighbourhood Wardens 256W
  Scheme Evaluation Case Studies—Preliminary Report' and the 'Implications Paper' has been placed in the in the Library of the House.

  New Housing
  Mr. Bercow
  To ask the Deputy Prime Minister what his policy is on balancing urban infill against new settlements. [107150]

  Mr. McNulty
  "Sustainable Communities: Building for the Future" underlines the Government's determination to tackle housing shortages in a way that ensures communities are sustainable. Planning Policy Guidance note 3, 'Housing', sets out the Office of the Deputy Prime Minister's policy that local planning authorities should consider redevelopment of previously developed land for housing before greenfield sites, and states that urban extensions are likely to be more sustainable than new settlements.

  Mr. Bercow
  To ask the Deputy Prime Minister if he will make a statement on his target for new social housing in urban areas. [107151]

  Mr. McNulty
  The Government have not set a target for new social housing in urban areas.

  Rateable Values (Appeals)
  Mr. Robathan
  To ask the Deputy Prime Minister what the maximum time allotment for the appeals process under the rateable values system is. [107041]

  Mr. Leslie
  Rating appeals are dealt with in accordance with programmes drawn up by the valuation officers, and the valuation tribunals which will hear the appeals. There is no statutory time limit within which an appeal must be heard, but the programme will indicate the timetable for dealing with a particular appeal. Where an appeal is successful, interest is paid on the refund.

TRANSPORT

  A59
  Mr. Evans
  To ask the Secretary of State for Transport if he will provide funding for an improvement to the junction of the A59 at the Clitheroe and Sabden junction. [107954]

  Mr. Jamieson
  The Highways Agency will shortly take forward an improvement of this junction including a prohibition of right-turns and some changes of signing and lining. Lancashire county council are due to take control of this section of road this year and it will be for them to decide whether future improvements are necessary.

  Air Travel Health Unit
  Miss McIntosh
  To ask the Secretary of State for Transport if he will make a statement on the(a) roles, (b) function and (c) staffing of the air travel health unit in his Department; and what the annual budget of the unit will be. [108009]
  257W
  Mr. Jamieson
  The Aviation Health Unit, announced on 6 March, will become a centre of expertise and the primary source of advice to the Department for Transport and the Department for Health on health issues affecting air passengers and crew.

  Based at the offices of the Civil Aviation Authority (CAA) at Gatwick, it will offer advice to air passengers and crew; handle public enquiries; investigate potential new aviation health concerns; provide technical input into international organisations; and identify the need for, and manage, future research.

  The Head of the Unit will decide on staffing requirements. Funding of up to £200,000 a year will be provided by the Department for Transport until the CAA is given statutory duties for aviation health, allowing it to fund the unit's work out of charges imposed on the aviation industry.

  Bicycle Safety
  Keith Vaz
  To ask the Secretary of State for Transport what recent representations he has received on bicycle safety in London. [107405]

  Mr. Jamieson
  My Department has received eight such representations in the financial year 02/03. Cycling safety in London is the responsibility of the Mayor of London and Transport for London.

  Departmental Staff
  Mr. Bercow
  To ask the Secretary of State for Transport how many staff were employed by his Department in(a) 2001–02 and (b) 2002–03. [106966]

  Mr. Jamieson
  I refer the hon. Member to the answer given by my hon. Friend the Minister for the Cabinet Office on 4 April 2003,Official Report, columns 891–92W.

  Expenditure on named schemes in the Tendring district of Essex

  £000

  Scheme

  1998– 99

  1999– 2000

  2000–01

  2001– 02

  2002–031

  A133 Little Clacton Bypass

  166

  381

  394

  0

  0

  Al20 Dovercourt Bypass Stage 2 Phase 1

  9

  14

  18

  0

  0

  A133 Little Clacton Bypass and Gorse Lane Link Stage 2

  95

  16

  0

  0

  0

  A136 Parkeston Bypass Stage 1

  491

  322

  207

  16

  -2

  A136 Parkeston Bypass Stage 2

  103

  0

  0

  656

  973

  B1029 Brightlingsea Bends

  0

  15

  12

  15

  296

  Jaywick Relief Road

  250

  0

  0

  0

  0

  Jaywick Spine Road Stage 2

  0

  0

  0

  341

  236

  Total

  1,114

  748

  631

  1,028

  1,503

  1 Note final

  Expenditure in Tendring district under LTP on:

  £

  £

  Integrated Transport Scheme

  409,000

  437,000

  Roads maintenance

  1,529,000

  779,000

  Note:

  Figures for earlier years are unavailable.
  258W

  Flight Time Limitations
  Mr. Pickthall
  To ask the Secretary of State for Transport what discussions he has had with the British Airline Pilots Association about EU proposals to standardise flight time limitations throughout the EU; and if he will make a statement. [107221]

  Mr. Jamieson
  [holding answer 8 April 2003]There have been several meetings between BALPA and the Civil Aviation Authority at which the European Parliament's proposal has been discussed. The CAA has reviewed the European Parliament's proposed FTL requirements. They advise that, while the requirements are not totally acceptable, with suitable amendment they could form a baseline European FTL requirement which could be supplemented by additional requirements in each Member State. We recognise the need for FTL requirements to be harmonised at a European level and should the proposal come before the Council we will work constructively with other Member States to ensure that it is appropriately amended.

  Local Transport Plan
  Mr. Ivan Henderson
  To ask the Secretary of State for Transport how much funding the Harwich constituency has received under the local transport plan since 1997. [107714]

  Mr. Jamieson
  Since year 2000, allocations under the Local Transport Plan procedures (and prior to that their predecessor Transport Policies and Programme) have been made by my Department to local transport authorities, in this case Essex county Council. LTPs identify individual schemes costing over £5 million as `major schemes'; make a block allocations for integrated transport measures each costing less than £5 million; and make an allocation for maintenance based on a common formula. Figures are kept only for the Tendring district council area as a whole and so it is possible to identify expenditure falling solely within the Harwich constituency only for major schemes, by reference to their location.

  Crossrail
  Tom Brake
  To ask the Secretary of State for Transport pursuant to his answer of 3 February 2003,Official Report, column 40W, on Crossrail, when his Department will announce its final decision on the project. [107743]

  Mr. Jamieson
  The Department is continuing to examine proposals for Crossrail. Decisions on the way
  259W
  forward and on the timing of any announcements have yet to been taken.

  M1
  Mr. Greg Knight
  To ask the Secretary of State for Transport when he expects the M1 motorway in both directions between junctions 23 and 25 to be devoid of lane closures due to roadworks. [107551]

  Mr. Spellar
  I have asked the Chief Executive of the Highways Agency, Tim Matthews, to write to the right hon. Member.

  Letter from David York to Mr. Greg Knight, dated 9 April 2003:

  Tim Matthews has been asked by the Transport Minister, John Spellar, to reply to your recent Parliamentary Question about roadworks on the M1 Motorway between Junctions 23 and 25. I am replying as Tim is currently away on Highways Agency business.

  There are two schemes currently being undertaken on the M1 north of Junction 23. which are expected to continue until Spring 2004. The first, involving major maintenance work to resurface the carriageways with low noise material and renew drainage installations between Junctions 24 and 25, began in January. That work is expected to be complete by June. (Phase 1, about which I wrote to you in March last year following a previous Parliamentary Question, was completed in early summer 2002.) The second involves upgrading the motorway communications in this area and extends from Junction 24 to Junction 27.

  Wherever practicable, the Agency seeks to combine roadworks, as is being done here, in order to minimise disruption to road users. For the resurfacing/drainage work a contraflow system is in operation with three lanes of traffic running in each direction between 6 am and 8 pm (10 pm Friday and 9 pm Sunday) and a 50 mph speed restriction applies for safety reasons. When lane closures are required, work is normally scheduled either overnight or outside peak periods, in accordance with the target set for us by ministers to ensure that at least 98.5% of running lanes are available for use during peak hours. The majority of the communications upgrading work is being carried out at night with closure of lane one and the hard shoulder.

  I should add that further minor works art planned at Junctions 23A and 24 but, due to the nature of the work and the potential disruption that would be caused to the surrounding road network, these will not go ahead until the current -major works are completed. They are programmed for completion during this financial year.

  This is a particularly heavily used length of motorway. The Agency is doing all it can to keep disruption to a minimum but I am afraid there will inevitably be some delays at peak times.

  If you would like any further information, Iftikhar Mir, the Agency's Route Manager for this length of the MI, would be pleased to help. He can he contacted at our offices at Broadway, Broad Street, Birmingham B15 1BL, or by telephone on 0121 678 8025.

  Pollution
  Mrs. Helen Clark
  To ask the Secretary of State for Transport, pursuant to his answer to the hon. Member for South-East Cambridgeshire (Mr. Paice) of 6 March 2003,Official Report, columns 1155–56W, on pollution, what sources were used to calculate the cost of abatement of pollutants. [107166]

  Mr. Jamieson
  The data presented in my answer were based on work from a number of different sources. Figures for the cost of emissions reduction from LPG 260W
  vehicles were calculated using work carried out by the Energy Saving Trust as part of the Government's Powershift programme.

  Figures for the costs of carbon reduction for biofuels were based on a range of life-cycle' CO2 values from the following published studies:
  CONCAWE (2002) Energy and Greenhouse Gas Balance for Biofuels for Europe—an update;
  L-B-Systemtechnik Consultancy (2002). Well-to-wheel analysis of energy use and the greenhouse gas emissions of advanced fuel/vehicle systems—a European Study; and
  Mortimer, N.D, Cormack, P, Elsayed, M.A, and Home, R.E. (2003). Evaluation of the Comparative Energy, Global Warming and Socio-Economic Costs and Benefits of Biodiesel. Sheffield Hallam University.

  The data on the local air quality emissions performance of bioethanol were drawn from the following research commissioned by the DfT:
  AEA Technology (2002) Ethanol Emissions testing.

  Central Railways Project
  Mr. Lidington
  To ask the Secretary of State for Transport what discussions(a) his Department and (b) the Strategic Rail Authority have had with Chiltern Rail on the impact of the proposed Central Railways project on passenger services. [107738]

  Mr. Jamieson
  The Strategic Rail Authority has commissioned studies to examine, inter alia, the impact of the Central Railways proposals on the existing rail network and services (both passenger and freight).

  Rail Services
  Mr. Lazarowicz
  To ask the Secretary of State for Transport what discussions he has had with the Strategic Rail Authority regarding the impact of its Capacity Utilisation Policy on rail services to and from Edinburgh. [107030]

  Mr. Jamieson
  The Strategic Rail Authority (SRA) has consulted widely on its Capacity Utilisation Policy and has recently published a Statement of Principles (copy in the House Library). The next stage is for the SRA to commence route by route studies of Capacity Utilisation and at this stage local stakeholders will be consulted about the possible impact of the Policy in their localities.

  Railway Safety
  Mr. Collins
  To ask the Secretary of State for Transport what assessment he has made of the adequacy of information collected on incidents affecting passenger(a) experiences and (b) perceptions of personal safety when using the railways; and if he will make a statement. [106882]

  Mr. Jamieson
  The British Transport Police records all reported crime on the railways in accordance with Home Office instructions and standards. The Strategic Rail Authority's twice yearly "National Passenger Survey" includes questions on passengers' perceptions of safety. The survey is carried out to an approved methodology in accordance with Market Research Society's codes of conduct.
  261W

  Virgin Trains
  Mr. Don Foster
  To ask the Secretary of State for Transport if he will make a statement on recent SRA directions to Virgin trains regarding their financial position. [107364]

  Mr. Jamieson
  The Strategic Rail Authority has determined franchise payments for both Virgin franchises for the year March 2003 to February 2004.

  Volatile Organic Compounds
  Alan Keen
  To ask the Secretary of State for Transport what the volatile organic compounds level is(a) in the south east region of England and (b) in the vicinity of the main airports in the south east region of England. [107010]

  Alun Michael
  I have been asked to reply.

  Volatile organic compounds are monitored at nine sites in the south east region of England. The annual mean data for benzene and 1,3-butadiene are given in tables 1 and 2. Further information for a wider range of other volatile organic compounds is available on the National Air Information Quality Archive (www.airquality.co.uk) for two of these sites.

  Defra does not undertake any volatile organic compounds measurements at the main airports in the south east region of England. BAA has undertaken measurements of benzene and 1,3-butadiene at Gatwick and Heathrow. These indicated that concentrations of both pollutants are below the levels set in the Air Quality Strategy.

  Table 1: Means of measured Benzene concentrations, in micrograms per metre cubed, (µg/m3) at UK hydrocarbon sites

  Annual mean

  Monitoring Site

  1999

  2000

  2001

  2002

  Harwell 1

  0.88

  0.53

  0.62

  0.60

  Marylebone Road 2

  10.75

  6.29

  4.55

  3.91

  Oxford Centre 3

  n/a

  n/a

  n/a

  41.40

  Reading 5

  n/a

  n/a

  n/a

  61.43

  Southampton Centre 5

  n/a

  n/a

  n/a

  1.63

  Portsmouth 5

  n/a

  n/a

  n/a

  61.17

  Hove roadside 3

  n/a

  n/a

  n/a

  41.66

  London Bloomsbury 5

  n/a

  n/a

  n/a

  61.56

  Haringey roadside 3

  n/a

  n/a

  n/a

  42.63

  Notes:

  1 Rural

  2 Kerbside

  3 Roadside

  4 Site began in February 2002

  5 Urban background

  6 Site began in May 2002

  Table 2: Means of measured 1,3-Butadiene concentrations in micrograms per metre cubed, (µg/m2) at UK automatic hydrocarbon sites

  Annual Mean

  Monitoring Site

  1999

  2000

  2001

  2002

  Harwell 1

  0.10

  0.09

  0.11

  0.40

  Marylebone Road 2

  1.87

  1.63

  1.12

  0.95

  Notes:

  1 Rural

  2 Kerbside
  262W

TRADE AND INDUSTRY

  National Minimum Wage
  Mr. Davidson
  To ask the Secretary of State for Trade and Industry if she will estimate(a) the number of people who would benefit from a rise in the national minimum wage to £6 per hour, (b) how much Government expenditure would be saved by the consequential reduction of means tested benefits and (c) what the economic consequences would be of such a rise, with a statement of how she arrived at her estimate; and if she will make a statement. [105105]

  Alan Johnson
  The information is as follows:

  (a) DTI estimates that around six million people would be directly affected by an increase in the National Minimum Wage (NMW) to £6. The balance between workers who would benefit and those who would not benefit would depend on the extent of employment reductions following such a large increase.

  (b) The impact of an increase in the NMW was estimated by the Government and provided in the Low Pay Commission's fourth report (table 6.5, p195). The effect of a 30 pence increase in the adult rate of the NMW in 2003–04 is estimated to provide net savings to the Exchequer of £260 million for a full year. The effect on the Exchequer of a £6 per hour NMW rate for adults cannot be estimated in this way because the assumption of no behavioural change in response to the change in the NMW rates which underlies the estimate would not be plausible.

  (c) A 6 NMW would see over one-fifth of the UK workforce receiving wage increases of up to 43 per cent., without any offsetting gains in output. That is likely to sap company profitability, add significantly to price pressures and prompt employers to cut employment levels.

  The Government are determined to help the low paid, but not at the cost of damaging the economy or creating increased unemployment for the very people we want to help. Following advice from the Low Pay Commission, we recently announced substantial increases to the minimum wage to take place in October 2003 which will help between 1.3 and 1.6 million low-paid workers, more than ever before.

  Mr. Willis
  To ask the Secretary of State for Trade and Industry (1) how many(a) adults and (b) employers were on the adult development rate of the national minimum wage in (i) 2001, (ii) 2002 and (iii) 2003; [106659]

  (2) what the guidelines are for the operation of the adult development rate of the national minimum wage; [106658]

  (3) what the guidelines are for payment of the national minimum wage. [106657]

  Alan Johnson
  Around 60,000 adults were eligible for the older workers' Development Rate in both 2001 and 2002, according to data from the Labour Force Survey (LFS). There are no LFS figures for 2003 available yet.

  Use of the older workers' Development Rate remains small. According to a survey of employers in low-paying sectors by the Low Pay Commission, 4 per cent. Of

  263W
  employers said they used it. This is likely to be an overestimate of the use of the Development Rate among employers in the economy as a whole. However, the Commission recommended in their recent report that, on balance, they thought the older workers' Development Rate should remain in place for the time being.

  Guidelines on the operation of the minimum wage are contained in the booklet, "A Detailed Guide to the National Minimum Wage", which is available from the Inland Revenue's National Minimum Wage helpline 0845–6000–678, and is also available on the Department of Trade and Industry's website at: www.dti.gov.uk/er/nmw. I will send the hon. Member a copy.

  Arms Exports
  Mr. Gardiner
  To ask the Secretary of State for Trade and Industry whether the measures relating to the use of intranets in the draft Orders under the Export Control Act 2000 require that intranet servers are located in the United Kingdom. [106088]

  Nigel Griffiths
  The consultation document on the draft secondary legislation sets out how the proposed controls on the electronic transfer of information would operate in respect of the location and use of internet servers.

  Whether or not a licence is required depends on where the addressee of an electronic transfer is located, not on where the transfer may be routed in the course of the transfer.

  British Summer Time
  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what plans she has to review the application of(a) British Summer Time and (b) Greenwich Mean Time. [108007]

  Alan Johnson
  The Government have no plans to alter the present summer time arrangements, but we shall continue to listen to the arguments for and against change.

  Civil Space Aid
  Mr. Laws
  To ask the Secretary of State for Trade and Industry pursuant to her answer of 11 February,Official Report, column 660W, if she will make a statement on the value for money which has been secured from spending on civil space aid for the period from 1997 to 2003. [107196]

  Ms Hewitt
  [holding answer 8 April 2003]A comprehensive review by Technopolis Group Ltd. examined the impact and achievements of public support for UK civil space activities and was published by my Department in 2001. It concluded that it has been appropriate for the UK to contribute to the development of a global space infrastructure and the sponsorship of pioneering services. It also recommended that the Partners in the British National Space Centre explore ways in which they might improve the evidence base from which they formulate policies and evaluate opportunities. As a result, in parallel with the preparation of the new draft UK Space Strategy, my Department has commissioned researchers from SQW 264W
  and SPRU (University of Sussex) to assess the extent to which DTI funded business support programmes have generated economic benefits for the UK. The results of this study will be published.

  Commercial Confidentiality
  Rob Marris
  To ask the Secretary of State for Trade and Industry what guidance her Department issues to civil servants on how to deal with claims from organisations that the information they provide to the Department is commercially confidential. [105560]

  Ms Hewitt
  It is not standard practice to verify claims of commercial confidentiality on receiving information from organisations as this issue is normally only relevant if the question arises as to whether the information should be disclosed to another party.

  The Code of Practice on Access to Government Information and the guidance on the operation of the Code helps officials determine whether such information should be disclosed or withheld in response to an individual request. Exemption 13 of the Code of Practice specifically exempts a third party's commercial confidences. The Code and accompanying guidance is available to staff on the DTI intranet.

  While it is ultimately for my Department to determine, in accordance with the Code, whether to disclose information in response to requests we receive, third parties whose interests may be adversely affected a re normally consulted in order to inform the Department's decision.

  Similar considerations apply if the information requested is environmental information which is subject to the Environmental Information Regulations as distinct from the Code of Practice.

  Departmental Fees
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry if she will list the fees paid by her Department to(a) PricewaterhouseCoopers, (b) Deloitte & Touche, (c) KPMG and (d) Ernst & Young since January 2002. [100832]

  Miss Melanie Johnson
  Central records indicate that the following fees have been paid in the period since January 2002:

  £

  PricewaterhouseCoopers

  8,407,225

  Deloitte & Touche

  6,415,336

  KPMG

  64,625

  Ernst & Young

  1,357,586

  Document Classification
  Harry Cohen
  To ask the Secretary of State for Trade and Industry how many documents are held by her Department that are subject to security classification, broken down by category of classification. [107347]

  Ms Hewitt
  It is not possible to provide the requested statistics without incurring disproportionate cost.
  265W

  External Consultants
  Mr. Laws
  To ask the Secretary of State for Trade and Industry how much(a) her Department and (b) each agency and non-departmental public body spent on external consultancy in each year from 1995–96 to 2002–03 (planned); and if she will make a statement. [92260]

  Ms Hewitt
  I refer the hon. Member to the answer given by my Noble Friend, Lord Sainsbury on 14 January 2003,Official Report, column 26. Central records indicate that for the current financial year, 2002–03, £35 million is at present committed for consultancy.

  I have asked the Department's Executive Agencies to respond directly to the hon. Member. Information by NDPBs is not held centrally and could be produced only at disproportionate cost.

  Letter from Claire Clancy to Mr. David Laws dated 9 April 2003:
  I am responding to your recent Parliamentary Question to the Secretary of State for Trade and Industry on external consultancy expenditure on behalf of Companies House, which is an Executive Agency of the DTI.

  The expenditure incurred on external consultancy was as follows:

  Financial Year

  £000

  2002–03 1

  2,454

  2001–02

  504

  2000–01

  564

  1999–2000

  1,111

  1 Planned

  I am sorry but the data for years 1995–96 to 1998–99 is not readily available and can only be provided at disproportionate cost.

  Letter from Roger Heathcote to David Laws dated 9 April 2003:

  You tabled a Parliamentary Question on 17 January 2003 to the Secretary of State for Trade and Industry, asking how much (a) her Department and (b) each agency and non departmental public body spent on external consultancy in each year from 1995–96 to 2002–03 (planned); and if she will make a statement. I have been asked to reply in respect of the Employment Tribunals Service (ETS) which is an executive agency of the DTI.

  Central records indicate that contracts for consultancy for the Employment Tribunals Service were/will be as follows:

  Financial year

  £000

  1999–2000

  186

  2000–01

  106

  2001–02

  130

  2002–03 1

  64

  1 Estimated

  This central data is only available from 1999. Data for the three previous years are not readily available and can only be provided at disproportionate cost.

  "Consultants" is a rather imprecise term. Figures given are the totals of those entered into the Agency's accounts system under its specific consultancy categories: Estates, ICT and Human Resources.
  266W
  Letter from Caren Fullerton to Mr. David Laws dated 9 April 2003:

  I am replying to your Parliamentary Question 921 tabled on 17 January 2003, about how much (a) the Secretary of State's department and (b) each agency and non-departmental public body spent on external consultancy in each year from 1995–96 to 2002–03 (planned).

  The figures given below indicate Patent Office spending on external consultancy from 1995–96 to 2002–03:

  Year

  £000

  1995–96

  138

  1996–97

  124

  1997–98

  39

  1998–99

  8

  1999–2000

  16

  2000–01

  26

  2001–02

  53

  2002–03

  70

  Letter from Dr. J. W. Llewellyn to Mr. David Laws dated 9 April 2003:

  The Secretary for Trade and Industry has asked me to reply on behalf of the National Weights and Measures Laboratory (NWML) to your question on how much her Department and each agency and non departmental public body spent on external consultancy in each year from 1995–96 to 2002–03 (planned).

  National Weights and Measures Laboratory spent the following on external consultancy in each year from 1995–96 to 2002–2003 (planned):

  Financial Year

  Amount (£)

  1995–96

  9,000

  1996–97

  2,000

  1997–98

  11,000

  1998–99

  50,000

  1999–2000

  63,000

  2000–01

  68,000

  2001–02

  31,000

  2002–03 1

  98,000

  1 Planned

  Letter from Desmond Flynn to Right Hon. David Laws dated 9 April 2003:

  The Secretary of State for Trade and Industry has asked me to reply to your question (2002–921) requesting information on money spent on external consultancy in each year from 1995–96 to 2002–03 (planned) by the Department, its agencies and Non-Departmental Public Bodies (NDPBs).

  The Insolvency Service spent the following amounts on external consultants and advisors since 1995–96:

  Year

  £000

  1995–96

  502

  1996–97

  12

  1997–98

  Nil

  1998–99

  5

  1999–2000

  Nil

  2000–01

  Nil

  2001–02

  125

  2002–03 1

  Nil

  1 Planned

  The above costs relate to consultancy assistance in developing Agency policy.
  267W
  Letter from Martin Wyn Griffith to David Laws dated 9 April 2003:
  arliamentary Question to Mrs Hewitt asked how much her Department,
  Agencies and NDPBs spent on external consultancy, in each year from 1995/96 to 2002/3 (planned). I am replying on behalf of the Small Business Service (SBS).
  The SBS was launched as an Agency on 1 April 2000. Therefore, information on expenditure has only been available since that date.
  The value of contracts for external consultancy for the period from 1 April 2000 to 31 March 2002 is approximately as follows:
  F/Y 2000/2001—£0.8 million
  F/Y 2001/2002—£3.0 million
  Information on the value of consultancy contracts for the period 1 April 2002 to 31 December 2002 and planned contract for 1 January to 31 March 2003, could only be obtained at disproportionate cost.

  Letter from Ms R. J. R. Anderson to David Laws dated 9 April 2003:
  The Secretary of State for Trade and Industry has asked me to reply on behalf of the Radiocommunications Agency to your Parliamentary Question about expenditure on external consultants.
  Agency expenditure (ex-VAT) in each of the last eight financial years is as follows:

  Financial Year

  £

  1995–96

  256,000

  1996–97

  761,768

  1997–98

  2,478,987

  1998–99

  2,602,017

  1999–2000

  1,963,878

  2000–01

  1,947,799

  2001–02

  654,000

  2002–03

  88,713

  External Reports
  Mr. Maude
  To ask the Secretary of State for Trade and Industry if she will list(a) the title and subject, (b) the total cost to her Department and (c) the commissioned author or organisation of each external report commissioned by her Department in each year since 1997. [103724]

  Ms Hewitt
  I have understood an external report to be a report produced at the request of government by a person, group or organisation external to the department and which is publicly available. To distinguish the external reports produced by my Department, and provide their commissioned authors or organisations, could only be done at disproportionate cost, as this information is not held centrally.

  However a list of all DTI publications produced since 12 February 2002, which have been notified to my Department's Publications Unit, has been placed in the Libraries of the House. For publications produced prior to this date I refer the hon Member to the answer given to the hon Member for Buckingham on 25 February 2002, Official Report, column 849W.

  The listing includes the total production cost to the Department of each publication (where notified centrally), and excludes publications for internal use.
  268W
  The subject of each publication could not be included in the list without disproportionate cost, but the subject of most publications is clear form the title.

  Market Testing
  Mr. Bercow
  To ask the Secretary of State for Trade and Indus try what the estimated level of saving to the Department is from the use of market testing in 2002–03. [107771]

  Ms Hewitt
  The Department of Trade and Industry has not undertaken any market testing in the year 2002–03.

  Pensions/Benefits Payments
  Mr. Yeo
  To ask the Secretary of State for Trade and Industry if she will list telephone services operated by her Department in order to provide advice or services relating to changes in the method of paying pensions and benefits; and if she will place in the Library copies of the scripts used by the people answering the telephones. [107596]

  Ms Hewitt
  The customer telephone helpline services. concerning changes to the payment arrangements for benefits and pensions, are operated by the Department for Work and Pensions.

  Street Works
  Mr. Robathan
  To ask the Secretary of State for Trade and Industry what discussions her Department has had with the UK broadband industry regarding proposed changes to the legislative framework regulating street works. [107808]

  Mr. Timms
  There have been discussions with a number of telecoms operators at ministerial and official level regarding the proposed street works legislation.

MINISTER FOR WOMEN

  Document Classification
  Harry Cohen
  To ask the Minister for Women how many documents are held by her office that are subject to security classification, broken down by category of classification. [107350]

  Ms Hewitt
  It is not possible to provide the requested statistics without incurring disproportionate cost.

  EU Funding
  Miss McIntosh
  To ask the Minister for Women what recent EU funding her Department has received from the Daphne programme: and what specific projects were supported by such funding. [107517]

  Ms Hewitt
  To date, there has been no funding bid submitted to the Daphne programme by this Department. We are currently liaising with non-governmental organisations so that they are aware of the opportunities offered by the new Daphne programme.
  269W

TREASURY

  Crown Estate
  Mr. Carmichael
  To ask the Chancellor of the Exchequer pursuant to his answer of 31 March,Official Report, column 560W, on the Crown Estate, when a Minister from the Treasury last met Crown Estate representatives; and what issues were discussed. [108196]

  Mr. Boateng
  I refer the hon. Gentleman to the answer given by the Chancellor of the Exchequer on 11 February 2002 Official Report columns 114–115W.

  Mr. Carmichael
  To ask the Chancellor of the Exchequer pursuant to his Answer of 31 March,Official Report, column 560W, on the Crown Estate, what assessment has been made of the impact of Crown Estate charges levied for use of the seabed on those who pay it. [108197]

  Mr. Boateng
  Rents charged by The Crown Estate for use of the seabed are established by professional valuers in negotiation with users and where appropriate involve consultation with the relevant industry or interest groups. The rents are set at levels appropriate to the market conditions and must not take advantage of any monopoly interest. Any tenant may have the level of rent independently evaluated by the Valuation Office.

  Departmental Catering Services
  Mr. Bercow
  To ask the Chancellor of the Exchequer what the cost was of(a) the in-house canteen and (b) other catering services provided by the Department in 2002. [1042541

  Ruth Kelly
  The cost of the staff restaurant and associated facilities provided by the Treasury's caterers during 2001–02 was £156,126. The cost of other catering services was £198,048.

  Inspectorates
  Mr. Norman
  To ask the Chancellor of the Exchequer how many(a) staff and (b) staff engaged in inspection work have been employed by (i) HM Customs and Excise and (ii) the Inland Revenue in each year since 1997. [105872]

  John Healey
  The information is as follows:

  (a) Total Staff

  Details of how many staff were employed by HM Customs and Excise are contained in the HM Customs and Excise Spring 2002 Departmental Report, published in June 2002. Inland Revenue figures can he found in two publications: the "Inland Revenue Government Expenditure Plans 2000–02", published in April 2000; and the "Inland Revenue Government Expenditure Plans 2002–04", published in June 2002. Copies of these reports are available in the Library of the House.

  (b) Staff Engaged in Inspection Work

  Customs staff engage in a variety of activities which can include the inspection of goods, documents, accounts, electronic files, vehicles and premises. It is not possible to give the information requested, as the question is formulated in too general a manner—Exemption 9 of the Open Government Code applies.
  270W
  The Inland Revenue undertakes a variety of activities to monitor and ensure compliance. Chiefly, this concerns inquiries into the tax returns of individuals, businesses and companies, and reviews of employer compliance. Though figures for earlier years are not available, the number of staff engaged in this work was 12,622 in 1999–2000, 12,439 in 2000–01 and 13,130 in 2001–02. This involves staff at different levels working in local offices, the Large Business Office and the Special Compliance Office.

  Staff Taxis
  Norman Baker
  To ask the Chancellor of the Exchequer how much was spent in 2002 on providing taxis for staff. [105618]

  Ruth Kelly
  [holding answer 28 March 2003]The Treasury meets the cost of taxis necessarily used by its staff for official business. When a member of staff is required to work until after 9pm, it will also meet the cost of a taxi home. In 2002, total expenditure on the Department's taxi and courier contract was £111,000. Of this, some £3,500 was in respect of taxis home.

  Sunset Clauses
  Mr. Bercow
  To ask the Chancellor of the Exchequer if he will list the sunset clauses included in legislation from his Department since 1997. [106939]

  Ruth Kelly
  No substantive provision of post-1997 legislation for which the Chancellor's Department is responsible lapses automatically after a specified period of time or ceases to have effect on a particular date.

  However, some of the transitional provisions connected with the coming into force of the Financial Services and Markets Act 2000 cease to have effect on a certain date.

  In addition, certain provisions in legislation for which the Treasury is responsible cease to have effect on the occurrence of a particular event. For example, legislation which implements United Nations Security Council Resolutions which call on the UK to impose financial sanctions generally provide that if the United Nations Security Council cancel the operation of the relevant Resolution, the Order ceases to have effect.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Apples and Pears
  Hugh Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress is being made over proposals to amend the EC marketing standard for apples and pears. [108069]

  Mr. Morley
  [holding answer 8 April 2003]The EU Commission tabled further proposals to amend the marketing standard for apples and pears at a meeting of member states' experts on 28 March. Our Horticultural Marketing Inspectorate is consulting widely on these proposals.

  Conservation Boards
  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her
  271W
  answer of 1 April 2003, Official Report, column 641W, on conservation boards, what steps conservation boards could take to avoid paying VAT. [108005]

  Alun Michael
  As I explained in my previous reply, I am considering the options. I will write to the hon. Member in due course.

  Departmental Budget
  Mr. Laws
  To ask the Secretary of State for Environment, Food and Rural Affairs what her estimate is of the proportion of her Department's budget which is spent on food, fishing and farming and which is discretionary, rather than being passed through from the European Union; and if she will make a statement. [105082]

  Alun Michael
  Of the Department's Departmental Expenditure Limit (DEL) budget, 4.8 per cent. is allocated to the Food, Farming and Fisheries Directorate-General, and 14.8 percent. of that allocation is to cover national expenditure under various European Union (EU) schemes, that is expenditure which is additional to that provided by the European Union. No EU funds relating to this Directorate-General's budget are passed through the Department's DEL.

  Departmental Running Costs
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs what the running costs in 2002 were of(a) her Ministers' private offices, separately identifying expenditure on staff, and (b) her Department. [106005]

  Alun Michael
  The running cost of this Department's Secretariat, including Ministers' private offices, for the financial year 2001–02 (from June 2001 when the Defra was created) was £2,757,000, of which £1,907,000 was on pay. Running costs for 2002–03 are forecast to be in the region of £3,380,000 of which £2,340,000 will be on pay.

  The actual 2001–02 administrative cost budget outturn for the whole Department was £643.9 million. The departmental running cost figure for 2002–03 will be published shortly in departmental appropriation and resource accounts.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the EU Directives and Regulations which have been implemented by her Department since 17 April 2002. [106825]

  Alun Michael
  The Department for Environment, Food and Rural Affairs plays a leading role in the UK's EU policy on the environment, agriculture, fisheries, animal and plant health. Since 17 April 2002. the Department for Environment, Food and Rural Affairs has led on the implementation of 32 Directives. The attached table shows the Directives implemented during the period.
  272W
  EC regulations are, in general, directly applicable in the Member States, without the need for further incorporation into national law. However, some regulations require UK measures to make them workable and enforceable. Some regulations enact small or technical amendments. As far as we have been able to verify there have been no regulations that have needed further measures to incorporate into national law during the period.

  Horticultural Research
  Hugh Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress is being made on the review into the future of horticultural research. [108068]

  Mr. Morley
  [holding answer 8 April 20031 Following the Government response to the Quinquennial Review of Horticultural Research International (HRI) announced on 20 January, Defra has been engaged in negotiations with HRI, the University of Warwick and the East Mailing Trust to establish whether the scenarios recommended by the Quinquennial Review team are achievable and affordable and whether any further Government investment is necessary.

  Good progress has been made. All the policy, legal and financial issues which need to be addressed have been identified and action has been put in hand to take them forward. This work will underpin the business cases which will inform the Government's detailed decisions on the new bodies intended to replace HRI.

  HRI is an exceptionally complex business and it has not proved possible to conclude the initial phase of the negotiations by the end of March as we had hoped. We are still working towards the original target date of 1 April 2004 for the new bodies to be operational.

  The Department is appreciative of the positive and committed way in which all the parties engaged in these delicate negotiations are working together to achieve a successful and stable future for HRI. It is optimistic that it will be in a position to make a more definitive announcement in the near future.

  League Against Cruel Sports
  Mr. Gray
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she will take to investigate the treatment of the deer in the League Against Cruel Sports sanctuary, Baronsdown on Exmoor. [108006]

  Mr. Morley
  Veterinary Officers from my Department have visited the Baronsdown Deer Sanctuary. I have considered the report of the visit and I am satisfied that there is no evidence of the deer exhibiting signs of ill treatment or suffering.

  National Orchard
  Hugh Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what gains and
  273W
  losses in (a) actual and (b) percentage terms there have been in the size of the National Orchard in 2002. [108067]

  Mr. Morley
  [holding answer 8 April 2003]The area of the National Orchard fell by 2.4 thousand hectares (11 per cent.) between 2001 and 2002. The table as follows shows the results of the Orchard Fruit Surveys 1997–2002.

  Orchard Fruit Survey England and Wales (excluding minor holdings)

  Year

  Tree area (hectares)

  Percentage change

  1997

  23,523

  —

  1998

  21,981

  -6.6

  1999

  21,483

  -2.3

  2000

  20,823

  -3.1

  20011

  121,104

  11.4

  2002

  18,739

  -11.2

  1 2001 figures revised when 2002 results were published

  Over-30-months Scheme
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how often meat and bone meal storage facilities for material produced under the over-30-month scheme are inspected; when the last inspection for each facility took place; and if she will make a statement. [107812]

  Alun Michael
  Over-30-month scheme (OTMS) meat and bone meal storage facilities are subject to regular control visits, which are carried out by the Rural Payments Agency. The Agency undertakes quarterly Technical Inspectorate visits to such stores 10 check the integrity of the store, and that the scheme controls and paperwork are being correctly administered. In addition the Agency's OTMS operations team also carry out periodic site inspections on an ad hoc basis. This is the team responsible for the ongoing storage and disposal arrangements relating to OTMS meat and bone meal.

  In addition, when stores are either taking in or outloading material, the Agency employs the Meat and Livestock Commission as its agent to provide daily controls. These include overseeing the integrity and security of the site, accounting for every kilogram of meat and bone meal held in stock, and monitoring all activity that takes place on the storage sites. All stores are currently outloading material, but the date of the last inspection at each store is shown in the following table:

  Store name

  Location

  Date of latest inspection

  Glenrothes

  Glenrothes, Scotland

  27 March 2003

  Bonnington

  Kirknewtown, Scotland

  6 February 2003

  Blyton

  Blyton, Lincolnshire, England

  18 March 2003

  Barkston Heath

  Barkston Heath, Lincolnshire, England

  18 March 2003

  Preston

  Preston, Lancashire, England

  19 March 2003

  Longton

  Longton, Lancashire, England

  3 April 2003

  Widnes

  Widnes, Cheshire, England

  5 March 2003

  Alleena

  Prescott, Chesire, England

  17 March 2003

  Greendale

  Woodbury Salterton, Devon, England

  1 April 2003

  Wrangaton

  Wrangaton, Devon, England

  1 April 2003

  Supermix

  Newtonstewart, Northern Ireland

  25 March 2003

  274W

  Store name

  Location

  Date of lastest inspection

  Maghaberry

  Ballinderry, Northern Ireland

  28 March 2003

  Mallusk

  Newtonabbey, Northern Ireland

  20 March 2003

  Castledawson

  Castledawson, Northern Ireland

  25 March 2003

  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how old the oldest meat and bone meal produced as a result of the over-30month scheme is which is stored by her Department and its non-departmental public bodies. [107813]

  Alun Michael
  Meat and bone meal is stored in heaps and it is not possible to be precise about the age of that which remains in store. However it is likely that some of this material produced in the earliest weeks of the scheme (May 1996) remains in store pending incineration. To date the Rural Payments Agency has incinerated (for the most part with energy recovery) some 593,465 tonnes out of 736,797 tonnes of the material produced under the over-30-month scheme since its commencement in May 1996, this equates to 79 per cent. of the material produced. All of the storage sites are currently outloading the material to incineration plants.

  Pensions
  Mr. Heald
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the(a) funded and (b) unfunded public sector pension schemes for which her Department, its agencies and its non-departmental public bodies are responsible; when the last actuarial valuation was of each scheme; what the value was of the assets at the last actuarial valuation of each scheme; what deficit is disclosed by the last actuarial valuation of each scheme; and if she will make a statement. [104935]

  Alun Michael
  Staff in the Department of Environment, Food and Rural Affairs and its six agencies i.e. the Central Science Laboratory, the Veterinary Laboratories Agency, the Centre for Environmental Fisheries and Aquaculture Science, the Pesticides Safety Directorate, the Veterinary Medicines Directorate and the Rural Payments Agency are members of the unfunded Principal Civil Service Pension Scheme which is the responsibility of the Cabinet Office.

  Information on the pension arrangements for the staff of the Department's non- departmental public bodies is not held centrally and could be provided only at disproportionate cost.

  Planning
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs how many notifications the Environment Agency has received from(a) Buckinghamshire county council and (b) Aylesbury Vale district council under the requirements of the Town and Country Planning (General Development Procedure) Order 1995. [106934]

  Mr. Meacher
  The Environment Agency received 23 and 62 planning applications from Buckinghamshire county council in 2001 and 2002 respectively under the requirements of the Town and Country Planning
  275W
  (General Development Procedure) Order 1995. In the same period, the Agency received 167 and 143 applications under the same Order from Aylesbury Vale district council.

  Pollution (Buckinghamshire)
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs how many complaints have been received since 6 February 2002 by the Environment Agency concerning pollution in the Buckinghamshire constituency. [106380]

  Mr. Meacher
  The total number of complaints about pollution received during this period was 374. Of these, the Agency confirmed that 368 related to pollution incidents. This comprised of three category one (major) incidents, 11 category two (significant) incidents, 302 category three (minor) incidents, 52 Category four (no impact) incidents.

  Product Designation
  Hugh Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) how many British fruit and vegetable products are registered for Protected Designation of Origin and Protected Geographical Indication schemes; [108065]

  (2) what steps her Department is taking to encourage British products to register for Protected Designation of Origin and Protected Geographical Indication status. [108066]

  Mr. Morley
  [holding answer 8 April 2003]One British vegetable product, the Jersey Royal potato, has been registered as a Protected Designation of Origin. The UK currently has 33 products registered in total. As part of our Strategy for Sustainable Farming and Food which seeks to help our food and drink producers add value we want to encourage more applications and raise awareness about the schemes. Officials have written to trade associations and individual producers about the schemes and have had a number of meetings with potential applicants and retailers. My colleague Lord Whitty has promoted the schemes with producers at a media event in January, while the Defra stand at the International Food and Drink Exhibition in March was devoted to publicising these schemes. We will be working with Food From Britain and the Regional Food Groups over the coming months to continue to encourage applications and raise the profile of the schemes amongst consumers.

  Slaughter Payments Scheme
  Norman Lamb
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to ensure that all payments due under the Slaughter Payments Scheme in respect of 2001 are cleared and that all disputes over such payments are settled. [108037]

  Alun Michael
  Under the EC legislation' governing the bovine schemes, to be eligible for such aid payments cattle have to be properly identified and registered in accordance with Regulation (EC) No 1760/2000. This requires keepers to notify all movements (and dates of movement) to and from their holding within a fixed period of time. The Rural Payments Agency is required 276W
  by EC legislation2 to carry out cross-checks to the cattle tracing database to ensure Community aid is granted only for bovine animals for which the births, movements and deaths have been duly notified.

  Cross-check failures due to missing movements are divided into various categories. Most categories are reviewed by the Agency at the office dealing with the claim. A final category is considered by a Review Panel comprising representatives from the Rural Payments Agency and the National Farmers Union. Industry representatives on the Panel give assurance of a fair review. Agency staff are striving to complete the review so that aid payments can be finalised for eligible animals.

  For the 2001 English Adult Animal Slaughter Premium Scheme, 98.2 per cent. of claims have been authorised for payment. 97.4 per cent. of claims have had balance payments made. The claims still undergoing processing are largely those that failed cross-checks required to confirm eligibility to Community aid.

  1 Article 21 of Council Regulation (EC) No 1254/1999

  2 Article 6(2)(b) of Commission Regulation (EEC) No 3887/92

  Statutory Instruments
  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the statutory instruments issued by her Department in the last 12 months, indicating(a) the purpose of each and (b) the cost of each to (i) public funds, (ii) businesses and (iii) individuals. [106316]

  Alun Michael
  During the period 1 April 2002 and 31 March 2003 Defra issued 152 statutory instruments. All published statutory instruments are available on the HMSO website at http://www.legislation.hmso.qov.uk/stat.htm.

  Detailed information regarding purpose and costing on these instruments could be provided only at disproportionate cost, but details of Regulatory Impact Assessments (RIAs) relating to statutory instruments can be found at the Cabinet office website at: http://www.cabinet-office.gov.uk/regulation/scrutiny.

  Copies of RIAs are also placed in the Libraries of the House on the day the instrument is laid.

  Tallow
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 16 January 2003,Official Report, column 742W, on tallow, if the contract with Ulster Farm By Products forms part of the current tender exercise for the incineration of tallow arising from carcasses culled under the over-30-month scheme. [107947]

  Alun Michael
  The contract, under which the company is already purchasing over-30-month scheme tallow as it is produced, does not form part of the current tender for the sale of stored tallow from the scheme.

  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs pursuant to her answer of 16 January 2003,Official Report, column 742W, on tallow, what the end dates are for

  277W
  each of the contracts awarded for the incineration of tallow arising from carcasses culled under the over-30-month scheme; and what the annual tonnage is under each of those contracts. [107948]

  Alun Michael
  The contracts for the purchase of over30-months scheme tallow listed in my earlier reply are open-ended, on a 'take and pay' basis, with no volumes guaranteed.

ADVOCATE-GENERAL

  EU Directives
  Mr. Bercow
  To ask the Advocate General if she will list the EU Directives and Regulations which have been implemented by her Department since 17 April 2002. [106834]

  The Advocate-General for Scotland
  I refer the hon. Member to the answer given today, c.227W, by my right hon. Friend the Secretary of State for Scotland.

SCOTLAND

  Crown Estate
  Mr. Carmichael
  To ask the Secretary of State for Scotland pursuant to the answer from the Chief Secretary to the Treasury, column 560W, on the Crown Estate, when a Minister from the Scotland Office last met Crown Estate representatives; and what issues were discussed. [108195]

  Mrs. Liddell
  Ministers have meetings with a wide range of organisations and individuals. As with previous Administrations, it is not this Government's practice to provide details of all such meetings.

  EU Directives
  Mr. Bercow
  To ask the Secretary of State for Scotland if she will list the EU Directives and Regulations which have been implemented by her Department since 17April 2002. [106835]

  Mrs. Liddell
  No EU Directives or Regulations have been implemented by my Department since 17 April 2002.

  Ministerial Meetings
  John Thurso
  To ask the Secretary of State for Scotland how many times she has met the chairman of(a) British Trade International and (b) Scottish Development International in each of the last five years; and when her last meeting was. [105764]

  Mrs. Liddell
  I have regular contact with the Minister of State for Trade and Investment, who chairs British Trade International, and with the Scottish Minister responsible for Scottish Trade International. Scottish Trade International does not have an appointed chairman.
  278W

  Salmon Farming
  Mr. Carmichael
  To ask the Secretary of State for Scotland pursuant to the answer of 31 March 2003,Official Report, column 560W, on the Crown Estate, what assessment has been made of the impact on the commercial environment faced by UK salmon farmers if EU protection on salmon dumping is removed; and what plans she has to use her powers under the Crown Estate Act 1961 if the commercial environment faced by salmon farmers alters. [107888]

  Mrs. Liddell
  The Government regularly monitor the performance and the factors affecting the performance of all important industries.

  Neither my right hon. Friend the Chancellor of the Exchequer nor I have any plans to exercise the powers in question.

SOLICITOR-GENERAL

  Lenient Sentences
  Mr. Davidson
  To ask the Solicitor-General how many cases were referred to the Court of Appeal in 2002 on the grounds that the sentence was unduly lenient; if she will list the offences, broken down by type of offence; how many referrals there were, expressed as a percentage of cases dealt with for each crime; and if she will make a statement. [105418]

  The Solicitor-General
  [holding answer 1 April 2003]In 2002 the Attorney-General and I referred a total of 112 cases (with a total of 149 offenders) to the Court of Appeal as unduly lenient sentences.

  The following table lists offences referred to the Court of Appeal. These figures represent only one lead offence per case.

  The Crown Prosecution Service do not keep records broken down by type of offence and it is not therefore possible to represent the number of referrals to the Court of Appeal as a percentage of the cases dealt with for each crime.

  Offence category

  Number of cases in each offence category referred to the Court of Appeal by the Law Officers

  Abduction

  1

  ABH

  1

  Affray and threats to kill

  1

  Aggravated burglary

  6

  Arson

  2

  Assault with intent to rob

  1

  Attempt to pervert the course of justice

  1

  Attempt murder

  2

  Attempt rape, indecent assault

  1

  Attempt robbery

  1

  Blackmail

  1

  Buggery

  1

  Burglary

  2

  Conspiracy to defraud

  3

  Conspiracy to possess firearms

  1

  Conspiracy to rob

  1

  Conspiracy to steal

  1

  Death by dangerous driving

  8

  Drugs offences

  13

  Forgery and perverting the course of justice

  1

  279W

  Offence category

  Number of cases in each offence category referred to the Court of Appeal by the Law Officers

  GBH with intent

  4

  Indecent assault

  11

  Kidnap, false imprisonment

  1

  Manslaughter

  8

  Murder

  1

  Firearms offences

  4

  Possession of explosives

  1

  Rape

  3

  Robbery

  18

  Section 18 offences

  3

  Section 20

  1

  Theft

  3

  Unlawful sexual intercourse

  1

  Wounding with intent

  4

HOME DEPARTMENT

  311 Number
  Mr. Letwin
  To ask the Secretary of State for the Home Department what progress he has made towards the creation of a 311 number for the reporting of public order and vandalism-related incidents other than emergencies. [101615]

  Mr. Bob Ainsworth
  [holding answer 7 March 2003]Following a feasibility study into the provision of a dedicated national number for contacting the police on non-emergency matters, we have decided to take this work forward within the wider context of establishing national call-handling standards for the police service. This will focus not only on call routing, but more importantly on call resolution. The development of a Single Non-Emergency Number will form an important strand of this work.

  A shared non-emergency number concept demonstrator to be tested in three connecting force areas is currently being planned.

  Asylum Seekers
  Mr. Liddell-Grainger
  To ask the Secretary of State for the Home Department what help is given to district councils to help with housing asylum seekers placed in their areas. [107315]

  Beverley Hughes
  The National Asylum Support Service (NASS) has entered into contracts with the private and public sector to provide accommodation for destitute asylum seekers. Only local authorities contracted to NASS would be asked to provide accommodation for asylum seekers placed in their areas. Other district councils would not be required to provide accommodation for asylum seekers.

  Mr Liddell-Grainger
  To ask the Secretary of State for the Home Department what the length of contract is with Clearsprings Ltd to house asylum seekers. [107317]

  Beverley Hughes
  The contract between the National Asylum Support Service and Clearsprings Ltd began on 3 April 2000 and runs for five years.
  280W
  Mr. Liddell-Grainger
  To ask the Secretary of State for the Home Department what guidance the Home Office gives to companies that are looking to place asylum seekers in rural areas. [107331]

  Beverley Hughes
  Destitute asylum seekers requiring accommodation are dispersed to designated dispersal areas. The National Asylum Support Service (NASS) identified areas suitable for designation as a dispersal area. Private and public sector companies under contract to NASS to provide accommodation for asylum seekers are told which areas have been designated for dispersal and that accommodation must be located within the defined areas.

  Asylum Support Fraud
  Mr. Oliver Heald
  To ask the Secretary of State for the Home Department pursuant to his answer of 18 March,Official Report, column 698W, on asylum support fraud, if he will make a statement on the level of (a) fraud and (b) overpayment in respect of payments to (i) private sector contractors and (ii) public sector contractors for accommodation provided by the National Asylum Support Service in each year since its establishment. [106905]

  Beverley Hughes
  [holding answer 3 Apri1 2003]I refer the hon. Member to the answer I gave my hon. Friend the Member for Birmingham, Selly Oak, on 3 April 2003,Official Report, column 869W. The National Asylum Support Service (NASS) has no evidence of fraud on the part of its contracted accommodation providers. Any overpayments have been of a technical nature and the system is designed to correct any technical overpayments in subsequent months.

  British Crime Survey
  Simon Hughes
  To ask the Secretary of State for the Home Department whether data from the British Crime Survey can be broken down by police force area; and if he will make a statement. [107301]

  Mr. Peter Ainsworth
  Since the British Crime Survey moved to an annual cycle in 2001–02 the target sample size has increased to approximately 40,000 interviews a year. The larger sample size has resulted in the ability, for the first time, to analyse questions that are asked of the whole sample by police force area (subject to the statistical robustness of individual measures) and in particular has enabled better monitoring of performance indicators.

  The most recent published data for best value performance indicators 120 (risk of victimisation), 121 (fear of crime) and 122 (feelings of public safety) broken down by police for area (PFA) can be found in 'Crime in England and Wales 2001–02 Home Office statistical bulletin 07/02'. The most recent findings available by PFA for public confidence in the criminal justice system and ratings of the police have been published in 'Crime in England and Wales 2001–02: supplementary volume Home Office statistical bulletin 01/03'. A number of the indicators mentioned above were also published in the police performance monitoring 2001–02 publication. Copies of these publications can be found in the Library.
  281W

  Chief Constables
  Mr. Hoyle
  To ask the Secretary of State for the Home Department what guidance he gives to chief constables on meeting hon. Members on constituency matters. [107733]

  Mr. Bob Ainsworth
  The Secretary of State has issued no guidance to chief officers on meeting hon. Members. This is ultimately a matter for the chief officers themselves.

  However, the Secretary of State would normally expect a chief constable to extend every courtesy on issues affecting the welfare of an hon. Member's constituency and in a manner appropriate to the issue at hand.

  Command Paper 5778
  Mr. Burstow
  To ask the Secretary of State for the Home Department how many dysfunctional families his Department has identified in each of the last five years as set out in paragraph 209 of Command Paper 5778. [106780]

  Hilary Benn
  Information on the number of dysfunctional families is not held centrally.

  Correspondence
  Mr. Kaufman
  To ask the Secretary of State for the Home Department when he intends to reply to the letter to him dated 24 February from the right hon. Member for Manchester, Gorton with regard to Mr. Lawrence Wendel Gordon. [107824]

  Mr. Blunkett
  I wrote to my right hon. Friend on 7 April 2003.

  Mr. Kaufman
  To ask the Secretary of State for the Home Department when he intends to reply to the letter to him dated 25 February from the right hon. Member for Manchester, Gorton with regard to Ms Ismail Hussein. [107825]

  Mr. Blunkett
  I wrote to my right hon. Friend on 7 April 2003.

  Mr. Kaufman
  To ask the Secretary of State for the Home Department when he intends to reply to the letter dated 24 February, from the right hon. Member for Manchester, Gorton with regard to Mr. Abdul Rahman Silavipour. [107836]

  Mr. Blunkett
  I wrote to my right hon. Friend on 8 April 2003.

  Mr. Kaufman
  To ask the Secretary of State for the Home Department when he intends to reply to the letter from the right hon. Member for Manchester, Gorton with regard to Mr. Patrick Stanley. [107837]

  Mr. Blunkett
  I wrote to my right hon. Friend on 9 April 2003,

  Heart Transplants
  Norman Baker
  To ask the Secretary of State for the Home Department whether(a) the project licence application to perform heart xenotransplantation experiments submitted in 1998 and (b) the project
  282W
  licence application to perform pig-to-primate kidney xenotransplantation submitted in 1999 were personally authorised by Ministers at his Department. [107245]

  Mr. Bob Ainsworth
  Home Office records show that the grant of the relevant licence authority to perform pig to primate heart transplantation research was authorised at ministerial level. The licence authority to perform pig to primate kidney transplantation research was granted administratively, by Home Office officials, without reference to Ministers.

  Probation Service
  Mr. Liddell-Grainger
  To ask the Secretary of State for the Home Department how the closure of the West Somerset magistrates court will change the role of probation offices in West Somerset. [107333]

  Hilary Benn
  The Avon and Somerset Magistrates' Courts Committee has no current plans to close West Somerset Magistrates' Court. However, the role of probation officers would not change due to the closure of any magistrates' court. Probation officers would continue to provide services to courts wherever they were located and would continue to supervise offenders.

  Road Traffic Offences
  Mr. Hawkins
  To ask the Secretary of State for the Home Department how many speeding offences, detected by speed cameras, resulted in(a) court action, (b) the issue of a fixed penalty notice during 2002 and (c) neither of these penalties; and if he will make a statement. [107917]

  Mr. Bob Ainsworth
  [holding answer 8 April 2003]Data on the number of speeding offences detected by camera in England and Wales for 2001 (latest available) are given in the table. 2002 data will be available in the autumn.

  Prosecutions, fixed penalties and written warnings for speeding offences detected by camera, England and Wales, 2001

  Number

  Prosecutions

  137,100

  Fixed penalty1

  877,500

  Written warning2

  n/a

  n/a = Not available

  1 Paid, i.e. no further action.

  2 Data collected centrally from forces on written warnings given for speeding offences detected by camera not given as considered unreliable. A total of 17,300 written warnings for all speed limit offences were issued in 2001.

  Sessional Orders
  Andrew Mackinlay
  To ask the Secretary of State for the Home Department what assessment he has made of the performance of the Commissioner of the Police of the Metropolis in enforcing the terms of the Sessional Order of 13 November 2002. [107994]

  Mr. Bob Ainsworth
  [holding answer 8 April 2003]I understand from the Commissioner that the Metropolitan Police Service is extremely aware of the necessity to enforce the requirements of the Sessional Order. All pre-planned demonstrations take into consideration the Sessional Order during the planning
  283W
  process and subsequent implementation of the plan. Where impromptu demonstrations occur all possible steps are taken to ensure that the Sessional Order is maintained. On the limited number of occasions, when access to Parliament has not been available through the Carriage Gates, access was restored as quickly as possible.

  Staff Numbers
  Mr. Bercow
  To ask the Secretary of State for the Home Department how many staff are employed by his Department. [106295]

  Hilary Benn
  I refer the hon. Member to the reply given to him by my hon. Friend the Minister of State, Cabinet Office on 4 April 2003,Official Report, column 891W, which details the available published information across the civil service.

WALES

  Badgers
  Mr. Waterson
  To ask the Secretary of State for Wales what recent estimate he has made of how many badgers there are in Wales; and if he will make a statement. [103969]

  Peter Hain
  None.

  Departmental Annual Report
  Mr. Bercow
  To ask the Secretary of State for Wales when the annual report of his Department will be published. [107879]

  Peter Hain
  I expect the Departmental Report to be published by mid-May.

  Departmental Catering Services
  Mr. Bercow
  To ask the Secretary of State for Wales what the cost was of(a) the in-house canteen and (b) other catering services provided by the Department in 2002. [104258]

  Peter Hain
  My Department has no canteen. The only items which it provides are light refreshments (tea, coffee, soft drinks, biscuits) for meetings and chilled water for staff.

  Departmental Expenditure
  Mr. Bercow
  To ask the Secretary of State for Wales what his estimate is of the expenditure of his Department on newspapers, magazines and periodicals in 2002. [106303]

  Peter Hain
  I refer the hon. Member to the answer I gave him on 23 January 2003,Official Report, column 433W.

  Departmental Pay
  Mr. Bercow
  To ask the Secretary of State for Wales what progress has been made with the pay review in his Department, with particular reference to the gender pay gap; and if he will make a statement. [106729]
  284W
  Peter Hain
  Staff serving in my Department are all on secondment or loan from other Departments—predominantly from the National Assembly for Wales. Their pay is therefore set by their home Departments rather than by the Wales Office.

  For its staff (including those seconded or loaned to the Wales Office) the National Assembly for Wales introduced a new pay system in 2001 aimed at closing the gender pay gap.

  Departmental Website
  Mr. Yeo
  To ask the Secretary of State for Wales if he will make a statement on the(a) cost of and (b) number of visitors to each website operated by his Department is responsible in each year since its establishment. [107637]

  Peter Hain
  The total operating cost—including the start up cost which cannot be separately identified—of the Wales Office website between 1 April 1998 and 1 July 1999 was £7,867.

  The Wales Office was not charged for the running of its website between 1 July 1999 and 1 September 2000.

  The operating cost of running the website—including the development of bilingual content between 1 September 2000 and 31 August 2001 was £5,699.

  For the period between 1 September 2001 and 31 August 2002 the Wales Office was invoiced £1,600.

  The Wales Office was also invoiced £1,600 for running of the website over the period between 1 September 2002 and 31 August 2003.

  Unfortunately hits for the Welsh Office website between 1 April 1998 and 1 July 1999 are no longer available. Due to a technical fault at our service providers, we are also unable to provide hits for the Wales Office website from 1999–2000.

  In 2001, the Wales Office website received 291,212 hits and 142,966 page impressions.

  In 2002, the Wales Office website received 527,536 hits and 269,627 page impressions.

  So far in this year, for the period 1 January 2003 to 31 March 2003, the Wales Office website has received 166,473 hits and 85,499 page impressions.

  Document Classification
  Harry Cohen
  To ask the Secretary of State for Wales how many documents are held by his Department that are subject to security classification, broken down by category of classification. [107345]

  Peter Hain
  This information is not readily available and could be obtained only at disproportionate cost.

  Entertainment Costs
  Mr. Gray
  To ask the Secretary of State for Wales when he has entertained Labour hon. Members at public expense in the last 12 months; and at what cost. [106396]
  285W
  Peter Hain
  In the last 12 months my predecessor and I hosted three receptions for parliamentarians—from all parties—Peers and others. The total cost of these was about £3,000.

  Joint Ministerial Committees
  Mr. Win Griffiths
  To ask the Secretary of State for Wales how often each joint ministerial committee has met since April 2001. [103373]

  Peter Hain
  Since April 2001 the plenary Joint Ministerial Committee (JMC) has met twice; JMC (Europe) has met six times; JMC (Health) has met once; and JMC (Poverty) has met once.

  Market Research
  Mr. Bercow
  To ask the Secretary of State for Wales what expenditure has been incurred by his(a) Department, (b) agencies and (c) non-departmental bodies in 2002 on (i) opinion polling, (ii) focus groups and (iii) other forms of market research; and if he will list the surveys commissioned and the purpose of each. [106265]

  Peter Hain
  None.

  Market Testing
  Mr. Bercow
  To ask the Secretary of State for Wales what the estimated level of saving is to the Department from the use of market testing in 2002–03. [107764]

  Peter Hain
  No market testing was conducted in this year. Some support services are already provided to the Wales Office by the private sector and thus subject to regular competitive tendering; the Department is not responsible for any significant programme expenditure.

  Ministerial Transport
  Mr. Bercow
  To ask the Secretary of State for Wales what the cost of(a) ministerial cars and drivers and (b) taxis for his Department was in 2002. [101544]

  Peter Hain
  The information is as follows:

  (a) This will be addressed in a letter from Mr. Nick Matheson, Chief Executive of the Government Car and Despatch Agency, to the hon. Member.

  (b) £4,000. This figure excludes any amounts spent on taxis, black cabs and licensed hackney carriages outside of departmental contracts and reclaimed by officials as travel and subsistence expenditure. That information could be obtained only at disproportionate cost.

  National Insurance
  Mr. Bercow
  To ask the Secretary of State for Wales what the cost will be to public funds in 2003–04 of the rise in national insurance contributions on the salary bill of his Department. [107899]

  Peter Hain
  It is estimated that the changes to employers' national insurance contributions announced in the Budget will increase pay costs on average by 0.7 per cent. next year.
  286W

  Property Portfolio
  Mr. Bercow
  To ask the Secretary of State for Wales what the estimated value is of the property portfolio held by his Department. [108369]

  Peter Hain
  My Department's property portfolio has an estimated value of £1.7 million.

  Secondments
  Dr. Cable
  To ask the Secretary of State for Wales how many individuals have been seconded to his Department from(a) the private sector, (b) NGOs and (c) other, in each case listing (i) from which organisation and (ii) dates of secondments, in each year since 1999–2000. [108087]

  Peter Hain
  Since its creation in July 1999, my Department has recruited no civil servants itself but has been entirely staffed by people on loan or secondment from other organisations. These have been predominantly from the National Assembly for Wales but some staff have come from other Government departments and there has been one secondment from a local authority.

  Staff Numbers
  Mr. Bercow
  To ask the Secretary of State for Wales how many staff were employed by his Department in(a) 2001–02 and (b) 2002–03. [106970]

  Peter Hain
  The Department's Resource Accounts (HC 318) show the average number of whole-time equivalent persons employed (including senior management, Ministers, and special advisers) to have been 42 during 2001–02. The Department's Resource Accounts will be published later this year, from which a comparative figure for 2002–03 will be available.

  Sunset Clauses
  Mr. Bercow
  To ask the Secretary of State for Wales if he will list the sunset clauses included in legislation from his Department since 1997. [106936]

  Peter Hain
  Since 1997 no legislation from my Department has included clauses providing for its expiry after a defined period.

  Terrorism
  Mr. Evans
  To ask the Secretary of State for Wales what meetings he has had regarding preparation for a possible terrorist strike in Wales. [107956]

  Peter Hain
  The prevention of terrorism is primarily a matter for my right hon. Friend the Home Secretary.

  The Wales Office attends both ministerial and official level meetings of the civil contingencies committee which co-ordinates the response to major disruptions to ordinary life.

  Travel Costs
  Mr. Bercow
  To ask the Secretary of State for Wales what the cost was of travel by train by staff in his Department in 2002. [106341]
  287W
  Peter Hain
  In the financial year 2002–03 to date some £101,000 has been spent on rail travel. The hon. Member will appreciate that my staff are based in both Cardiff and London.

  Wales Office (Civil Servants)
  John Thurso
  To ask the Secretary of State for Wales how many civil servants are employed by the Wales Office at(a) senior civil service level and (b) middle management level; and what the job description is for each of these posts. [105766]

  Peter Hain
  Details of the Wales Office organisation and objectives are given annually in its departmental reports, the most recent of which is Cm 5431 published in June 2002.

  This shows (page 23) that one senior civil servant was in post at 31 March 2002 along with 26 people in the Executive Officer/Higher Executive Officer/Senior Executive Officer/Grade 7 grades. These posts are predominantly concerned with policy-related work, in particular the briefing of Wales Office Ministers.
  288W

CABINET OFFICE

  Equal Pay
  Sandra Gidley
  To ask the Minister for the Cabinet Office pursuant to the answer of 25 March 2003,Official Report, column 142W, which civil service Departments and agencies have completed pay reviews to close equal pay gaps for 2002–03. [108186]

  Mr. Alexander
  As at the 8 April, 25 Departments and agencies reported completion of their equal pay reviews. Of these organisations, the following six have submitted final action plans to the Cabinet Office:

  Organisation

  Driver and Vehicle Licensing Agency

  Veterinary Laboratories Agency

  Government Actuary's Department

  Northern Ireland Court Service

  Oftel

  Insolvency Service

  289W

EDUCATION AND SKILLS

  Children's Centres
  Caroline Flint
  To ask the Secretary of State for Education and Skills if he will estimate the impact of extending the Government's children's centres to cover 30 per cent. of the most disadvantaged wards in England by 2006. [105311]

  Maria Eagle
  The Government's long-term aim is that all young children living in the 20 per cent. most disadvantaged wards have access to children's centre services. These centres will promote the physical, intellectual and social development of young children; they will also help to reduce child poverty by enabling parents, including lone parents, to maximise their chances to work, and to build stronger, safer communities. By March 2006 we plan to reach at least 650,000 pre-school children—and to create nearly 43,000 extra child care places for them. We recognise that pockets of extreme disadvantage exist outside of these wards, and the Sure Start Unit will consider proposals from local authorities to locate children's centres in such areas.

  In the long-term, providing access to children's centre services will reach approximately one million children under five in the 20 per cent. most disadvantaged wards. Extending this provision to cover the 30 per cent. most disadvantaged wards would reach approximately 340,000 additional children. We recognise that all young children would benefit from children's centre services, and the Sure Start Unit is promoting the wider adoption of this integrated approach. However the £435 million available to meet our targets by 2006 is focused on areas where need is greatest.

  Emergency Grant Criteria
  Andrew Selous
  To ask the Secretary of State for Education and Skills what the eligibility criteria were for the £28 million emergency grant to 36 local authorities announced in the week of the 24 March. [108387]

  Mr. Miliband
  I refer the hon. Gentleman to my written statement of 26 March 2003,Official Report, column 15WS.

  Class Sizes
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if he will make a statement on average class sizes in secondary schools in Buckinghamshire LEA in(a) 2001–02 and (b) 2002–03. [107780]

  Mr. Stephen Twigg
  Provisional data for 2003 are not yet available. Therefore, information for the two most recent years is shown in the table.
  290W

  Maintained secondary schools1 in Buckinghamshire LEA: Average size of one teacher classes2

  Position in January each year

  Average class size

  2001

  21.6

  2002

  22.1

  1 Includes middle schools as deemed.

  2 Classes as taught during the one selected period in each school on the day of the census in January.

  Source:

  Annual Schools Census

  Departmental Catering Services
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost was of(a) the in-house canteen and (b) other catering services provided by the Department in 2002. [104253]

  Mr. Stephen Twigg
  My Department's cost for(a) in-house canteen and (b) other catering services for the year 2002 is as follows:

  £

  In-house

  2001–02

  99,794

  Other catering services

  2001–02

  220,913

  Note.

  The cost for In-house catering includes contract costs only

  Education Funding
  Mr. Ivan Henderson
  To ask the Secretary of State for Education and Skills how much additional funding has been given to(a) primary schools and (b) secondary schools in the Harwich constituency in addition to their SSA, since 1997. [107689]

  Mr. Miliband
  It is not possible to identify precisely how much additional funding has been given to Harwich schools since 1997. The following table shows how much recurrent and capital funding was allocated to Essex primary and secondary schools between 1998–99 and 2002–03, the years for which data are available on a like-for-like basis. The Department allocates capital funding for schools at local education authority level (LEA) level, without specifying separate amounts for primary and secondary schools.

  This is equivalent in 2002–03 to an average of £82,377 revenue for a primary school and £306,329 revenue for a secondary school, but funding for individual schools depends on decisions taken by the local education authority.

  Revenue and Capital Grant—Primary and Secondary

  £ million

  1998–99

  2002–03

  Cash change

  Total Revenue Grant (Primary)

  2.4

  40.2

  +37.8

  Total Revenue Grant (Secondary)

  1.6

  24.2

  +22.6

  291W

  Revenue and Capital Grant—Primary and Secondary

  £ million

  1998–99

  2002–03

  Cash change

  Total Capital Grant (Primary and Secondary)

  13.8

  74.6

  +60.8

  Note:

  1. Figures reflect all revenue and capital 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).

  Barnsley LEA and Doncaster LEA—Average expenditure per pupil

  Barnsley

  Doncaster

  Pre- primary and primary

  Secondary

  Pre-primary, primary and secondary

  Pre-primary and primary

  Secondary

  Pre-primary, primary and secondary

  1992–93

  2,340

  3,340

  2,720

  2,310

  3,490

  2,820

  1993–94

  2,290

  3,220

  2,650

  2,270

  3,200

  2,680

  1994–95

  2,210

  3,180

  2,590

  2,360

  3,130

  2,710

  1995–96

  2,100

  2,800

  2,370

  2,180

  2,880

  2,480

  1996–97

  2,070

  2,700

  2,310

  2,200

  3,010

  2,530

  1997–98

  2,030

  2,760

  2,310

  2,250

  2,950

  2,530

  1998–99

  2,150

  2,750

  2,380

  2,230

  2,940

  2,510

  1999–2000

  2,410

  2,870

  2,590

  2,380

  3,000

  2,640

  2000–01

  2,570

  3,040

  2,760

  2,460

  3,270

  2,810

  2001–02

  2,800

  3,220

  2,970

  2,720

  3,540

  3,080

  Notes:

  1. Net Current Expenditure (NCE) includes expenditure within schools and also that incurred centrally by LEAs.

  2. Real Terms figures are adjusted to 2001–02 prices using the March 2003 GDP deflators.

  3. Pre-primary, primary and secondary column contains the per pupil costs across all three phases of education. The figure is not a 'sum' but a weighted average of the previous two columns figures.

  4. Figures rounded to the nearest 10.

  5. 'SEN Schools' expenditure not included because it distorts the unit costs and can make meaningful comparison difficult.

  6. Financial data are drawn from the RO1 forms up to 1998–99 and from the DfES Section 52 outturn statements from 1999–2000.

  7. Pupil data are drawn from the Annual Schools Census adjusted to be on a financial year basis.

  Exhibitions
  Mr. Yeo
  To ask the Secretary of State for Education and Skills if he will list events at which his Department and each agency and non-departmental public body for which his Department is responsible have exhibited in each of the last three years, stating for each(a) the purpose of exhibiting, (b) the cost of exhibiting and (c) the number of staff attending for the exhibition. [107623]

  Mr. Stephen Twigg
  The Department organises a large number of events for different target audiences and purposes each year, ranging from small scale workshops to introduce practitioners to new procedures or initiatives, to larger scale events to promote policy initiatives or present the bigger picture of the Department's activities to external partners and opinion formers.

  Examples of these during the past three years range from a series of small local events to disseminate good practice in meeting the skills needs of employers, to major events such as the Education Show.

  Records of all such events sponsored by the Department are not held centrally and the information could be provided only at disproportionate cost.
  292W
  2. Grants relevant to more than one sector have been notionally split (on a very rough ratio 60:40 primary:secondary)

  3. Figures are rounded to the nearest 0.1m.

  Jeff Ennis
  To ask the Secretary of State for Education and Skills what the spending per head on pupils in(a) Barnsley and (b) Doncaster was in each year since 1992. [107701]

  Mr. Miliband
  The information requested is contained in the following table:

  Health Education
  Dr. Fox
  To ask the Secretary of State for Education and Skills how much his Department spent on(a) health and (b) diabetes educational materials for schools in each year since 1997. [107731]

  Mr. Miliband
  The Department does not keep a central record of expenditure on educational materials. We support a variety of programmes and initiatives to enhance education about health and healthy living. For example, with the Department of Health we have jointly funded the National Healthy Schools programme, providing £27 million since it began in 1999. We have also produced a number of good practice booklets for teachers to help them ensure the health of pupils; for example, on healthy school lunches, first aid and health and safety. The Department has not produced education materials specifically about diabetes.

  Investors in People
  Mr. Drew
  To ask the Secretary of State for Education and Skills what assessment he has made of the relationship between schools having Investors in People status and educational achievement; and if he will make a statement. [104959]

  Mr. Stephen Twigg
  There is good evidence that Investors in People supports school improvement. An NFER study in June 2000 found a clear positive link
  293W
  between achievement of the standard and Ofsted's assessment of teaching quality. For this reason, Investors enjoys the support of key national partners, including Ofsted. The great majority of schools which have achieved the standard say that it has directly contributed to raising pupil achievement, through a more focused approach to training and development. This view seems to be shared by schools of all shapes and sizes.

  Iraq (Military Action)
  Mr. Paul Marsden
  To ask the Secretary of State for Education and Skills what guidance he has given to schools in Shropshire in terms of the military action in Iraq and(a) racist incidents, (b) emotional support from teachers to pupils, (c) teachers' responses to questions by pupils, (d) how the citizenship curriculum covers the conditional legal issues of war and (e) how teachers are expected to assist children with armed forces personnel relatives. [107200]

  Mr. Stephen Twigg
  My Department has net given any specific guidance to schools about military action in Iraq because advice is already available to them through a range of relevant material from the Department, the Service Children's Education Agency (SCE), and the Qualifications and Curriculum Authority. Advice on dealing with racist incidents can be found in the updated pack "Bullying—don't suffer in silence" (first issued in December 2001) and at www.qca.org.uk/ca/inclusion/respect for all/. Citizenship coverage of issues surrounding war can be found at www.standards.dfes.gov.uk/schemes2/citizenship/cit117. The SCE provides advice to forces personnel on education issues and has recently issued a deployment pack to local education authorities in areas, including Shropshire, where there are likely to be numbers of children from service families.

  Private Finance Initiative
  Mr. Drew
  To ask the Secretary of State for Education and Skills if he will list the successful capital bids under the Private Finance Initiative; and if he will explain the rationale behind the decisions on successful bids. [107374]

  Mr. Miliband
  [holding answer 4 April 2003]I refer my hon. Friend to the Departmental Press Notice 2003/0055 issued on 31 March 2003, which set out those LEAs prioritised for support. These projects were prioritised against the criteria issued to all LEAs in September 2002, a copy of which is available via www.teachemet.gov.uk.

  Mr. Drew
  To ask the Secretary of State for Education and Skills what plans he has to hold a further round of bids for PFI Capital expenditure for(a) rebuilding and (b) redeveloping schools. [108113]

  Mr. Miliband
  I announced in a written statement on 26 February proposals for a new approach to capital investment in school buildings from 2005-06, including the use of private finance initiative (PFI) credits. The document '"Building Schools for the Future" gives further details of these proposals, which are the subject of a consultation until 31 May.
  294W
  The Government commit themselves in "Building Schools for the Future" to a programme of rebuilding and renewal to ensure that secondary education in every part of England has facilities of 21st-Century standard. The aim of this programme will be to deliver this goal successfully for every secondary pupil within 10 to 15 years from 2005–06, subject to public spending decisions. We propose to allocate PFI credits from 2005–06 as part of this wider, strategic targeting of groups of schools. I also announced on 31 March, as part of the allocation of PFI credits for 2004–05, four Building Schools for the Future pathfinder projects in Bradford, Bristol, Greenwich and Sheffield—worth £290 million in total. These will test new procurement and delivery methods.

  School Governors
  Mr. Brady
  To ask the Secretary of State for Education and Skills if he will list the Ministers in his Department who are governors of maintained schools, giving the name of the school in each case. [107110]

  Mr. Miliband
  The Under-Secretary, my hon. Friend the Minister for Enfield, Southgate (Mr. Twigg), is a governor at two schools in Enfield: Merryhills Primary School and Southgate Secondary School.

  My hon. Friend Baroness Ashton, my hon. Friend the Minister for Barking (Margaret Hodge), my hon. Friend the Minister for Bury, South (Mr. Lewis) and myself have served as school governors in the past.

  School Places
  Ann Keen
  To ask the Secretary of State for Education and Skills how many children there are in London who have moved borough and are without a school place. [103353]

  Mr. Miliband
  My Department collects information on the number of children who leave school and take up places with other authorities. As a consequence of collecting the data, the number of children who leave education within an authority, and do not take up a place elsewhere, are known. What is not known, however, is whether these children have applied for a place in London and been unsuccessful.

  In terms of ensuring sufficient school places are available, it is for each local education authority to plan and keep under review the supply of school places so as to ensure there is sufficient provision to meet demand.

  School Standards
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what the cost is to each local education authority of Raising Standards and Tackling Workload: a National Agreement, announced on 15 January 2003, in the(a) financial year 2003–04 and (b) school year 2003–04. [105569]

  Mr. Miliband
  The costs will vary from school to school, depending on how much progress they have already made on the various elements of work force reform. The phasing of the contractual changes means that the more radical provisions do not come into force until September 2005.
  295W
  In 2003–04, revenue funding for LEAs will increase. by 11.6 per cent. on average. This is greater than additional pressures, including those imposed by the Workforce Agreement.

  Specialist Schools
  Mr. Yeo
  To ask the Secretary of State for Education and Skills how many specialist schools there are in(a) Lancashire and (b) England. [107642]

  Mr. Miliband
  There are currently 26 designated specialist schools in Lancashire. Three of these will not begin operating until September 2003.

  There are currently 1,209 designated specialist schools in England. 217 of these will not begin operating until September 2003.

  Mr. Yeo
  To ask the Secretary of State for Education and Skills what plans he has to increase the number of specialist schools. [107643]

  Mr. Miliband
  Specialist schools are a key driver of the Government's plans to raise standards in the secondary education sector, as set out in the secondary strategy document, "A New Specialist System" (published in February 2003). There are currently 992 specialist schools and at least a further 217 will be in operation from September this year. We have a target of at least 2,000 specialist schools by September 2006.

  We want all secondary schools that are ready to join the programme to apply, and in the long-term we hope that all secondary schools will be specialist schools. We will, of course, continue to be rigorous in maintaining the standards of the programme, and will de-designate schools which fail to make the progress required of them.

  In November 2002, the Government lifted the cap on national funding for the programme so that any school which meets the required standard in its application can now become a specialist school.

  Teachers
  Mr. Hepburn
  To ask the Secretary of State for Education and Skills what procedures are in place to deal with teachers whose teaching performance is unsatisfactory. [107511]

  Mr. Miliband
  Schools must have capability procedures for dealing with teachers whose performance is unsatisfactory and fails to improve. Capability procedures are drawn up locally by schools and LEAs. The Secretary of State issues guidance on teacher capability to ensure that these matters are handled effectively and fairly, and will be consulting on new guidance shortly.

  Virtual Education Action Zone
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost implications are of the South of England Virtual Education Action Zone (Extension) Order. [107784]

  Mr. Miliband
  The extension to the Zone's statutory life brought about by the Order makes it eligible for additional core grant from the Department of up to 296W
  £1,100,000, and an additional matched funding grant from the Department of up to £500,000. The matched funding is payable on a pound-for-pound basis, dependent upon the amount of private sector business contributions that the Zone raises.

  Websites
  Mr. Yeo
  To ask the Secretary of State for Education and Skills if he will make a statement on the(a) cost of and (b) number of visitors to each website operated by his Department and each agency and non-departmental public body for which his Department is responsible in each year since its establishment. [107639]

  Mr. Stephen Twigg
  Core programme cost, including hosting*, for the Department for Education and Skills central website www.dfes.gov.uk (real terms figures in 2002–03 prices) were as follows:

  £

  1997–98

  44,280

  1998–99

  86,305

  1999–2000

  143,808

  2000–01

  273,265

  2001–02

  671,170

  2002–03

  1,747,000

  Site traffic figures for www.dfes.gov.uk are as follows:
  In the year to March 2003 the site received nearly 5.5 million visits and 76.3 page views.

  The only historic usage figures currently available are as follows:
  In the year to January 2001, we averaged 130,000 unique visitors per month with total annual page views of 43.7 million.
  In the year to January 2002, we averaged 175,000 unique visitors per month with total annual page views of 74.5 million.

  Figures for agencies and non-departmental public bodies are not included as collection of this information represents disproportionate costs.

  From 2002 this includes hosting costs for other online services provided by the Department.

DEFENCE

  Afghanistan
  Joan Ruddock
  To ask the Secretary of State for Defence pursuant to his answer of 27 January,Official Report, column 34W, whether a decision has been taken on UK leadership of a Provincial Reconstruction Team in Afghanistan. [106671]

  Mr. Ingram
  Ministers have recently confirmed that, in principle, the United Kingdom is interested in leading a Provincial Reconstruction Team but, as with any potential deployment, we must first complete the necessary preparatory planning work. This is in its final stages and, all being well, we hope to announce our decision to Parliament in the next few weeks.
  297W

  Iraq
  Llew Smith
  To ask the Secretary of State for Defence if he will place in the Library the guidelines adopted for deciding which targets are chosen to attack in Iraq. [106357]

  Mr. Hoon
  The military campaign is crafted around the principle of minimum use of force. We attack only military objectives and combatants subject to the constraints of proportionality. If there is any expectation that harm will be caused to civilians, this must not be excessive when set against the direct and concrete military advantage anticipated from the attack. That approach folly reflects our obligations under international law.

  It is not our practice to publish the targeting guidelines, since to do so would provide the Iraqi regime and future potential enemies with information which might jeopardise the effectiveness of this and future military operations. I am therefore withholding the information requested in accordance with Exemption 1 (Defence, security and international relations) of the Code of Practice on Access to Government Information.

  Llew Smith
  To ask the Secretary of State for Defence what the military objective is of attacking Iraqi television offices in the invasion of Iraq. [106429]

  Mr. Hoon
  Television offices and studios have not been the object of coalition attacks. The coalition has attacked, and reserves the right to continue to attack systems (such as transmitters) which are used by the regime for conveying military command and control information. Coalition attacks are designed to minimise damage to civilian infrastructure.

  Helen Jackson
  To ask the Secretary of State for Defence if he will place in the Library the material circulated by coalition forces to the civilian population in Southern Iraq. [106912]

  Dr. Moonie
  [holding answer 7 April 2003]The coalition leaflets dropped from the air are available on the CENTCOM website. I will place an example in the Library of the House.

  Norman Baker
  To ask the Secretary of State for Defence how many oil fields have been set alight in Iraq since 1st March; what estimate he has made of the(a) CO2 emissions and (b) barrels of oil lost; and how many remain alight. [107235]

  Mr. Hoon
  [holding answer 4 April 2003]Nine well heads were deliberately set alight in the Rumayla oil field in southern Iraq. Only two oil wells in Rumayla now remain alight and work continues to extinguish them. The rest have been put out.

  The Ministry of Defence has not made an assessment of the barrels of oil lost since 1 March or of the likely CO2 emissions. The Meteorological Office did, however, conduct a detailed analysis of the 610 oil wells set alight during the 1990–91 Gulf conflict. This includes an analysis of the fumes produced, which concluded that the CO2 produced had a negligible effect on the global climate.
  298W
  Harry Cohen
  To ask the Secretary of State for Defence whether cables funnelling electricity to the Wafa al-Qaed water treatment plant were cut as a consequence of the US and British bombardment on Friday 21 March; what the purpose was of the bombardment; and if he will make a statement. [107250]

  Mr. Ingram
  The electricity cables supplying the Wafa al-Qaed water treatment plant have not been targeted by United Kingdom forces. We have no reports to suggest that they were hit by any coalition air assets.

  Llew Smith
  To ask the Secretary of State for Defence how many British servicemen and women have refused to serve in the invasion of Iraq, citing their objection to the conduct of the invasion by the coalition forces; and what action is being taken against them. [107584]

  Bob Russell
  To ask the Secretary of State for Defence if he will make a statement on the return of members of HM Armed Forces to the UK for refusing to participate in the war in Iraq. [107811]

  Mr. Ingram
  [holding answer 8 April 2003]There are formal procedures to be followed by British Serviceman who have a conscientious objection to the duties they are asked to undertake. To date we are not aware of any personnel who were due to serve, or are serving, in the Gulf during OP TELIC who have initiated such procedures.

  Norman Baker
  To ask the Secretary of State for Defence what measures are in place to deal with the environmental consequences arising from any setting alight of oil wells in Iraq. [104842]

  Mr. Hoon
  One of the key military tasks in the Government's Military Campaign Objectives was that of securing Iraq's economic infrastructure to prevent its wilful destruction by the Iraqi regime. The success of Coalition forces in securing the southern Iraqi oil infrastructure intact has prevented Saddam Hussein from repeating the acts of environmental vandalism on the scale we saw during 1991. Explosive Ordnance Disposal units and specialist teams of Royal Engineers from the United Kingdom armed forces have made safe facilities in the Rumaylah oil fields, enabling the relatively small number of fires, started before Coalition forces took control, to be extinguished.

  Mr. Rosindell
  To ask the Secretary of State for Defence if he will make a statement on the system for distributing communications from Territorial Army soldiers deployed in Iraq to their dependants and families. [107734]

  Dr. Moonie
  Territorial Army (TA) personnel mobilised for operations in the Gulf are entitled to the same welfare allowances as Regular soldiers. Within the overall Operational Welfare Package there is a specific communications package to allow the soldiers in theatre to communicate with families and dependants at home. This is achieved through the use of welfare telephones and British Forces Post Office (BFPO) mail. Welfare telephones have been provided in theatre and each soldier is entitled, subject to operational constraints, to a 20 minute per week publicly funded allowance. Free BFPO letters, known as "Blueys" are available to all soldiers in theatre, with current delivery times ranging from between three to six days. Electronic versions,
  299W
  known as "E-Blueys" are also available. The chain of command passes information to families and dependants of soldiers deployed via unit rear parties or the appropriate TA regimental headquarters.

  Janet Anderson
  To ask the Secretary of State for Defence what representations he has received about the postage costs incurred by families who send parcels to relatives and friends serving in Iraq. [108111]

  Mr. Ingram
  A considerable number of representations have been received by Ministers and the Chief Executive of the British Forces Post Office, in the form of letters and telephone calls from hon. Members, and letters, e-mails and telephone calls from members of the public.

  Macedonia
  Mr. Spring
  To ask the Secretary of State for Defence how many British personnel are participating in the EUFOR as part of Operation Concordia in the former Yugoslav Republic of Macedonia. [108072]

  Mr. Ingram
  Three British personnel are participating in EUFOR's Operation Concordia in the Former Yugoslav Republic of Macedonia.

  The United Kingdom is also represented by the Director of Operations, EU Command Element in AFSouth, Naples, who is a double-hatted NATO officer.

  Mr. Spring
  To ask the Secretary of State for Defence which countries' personnel are participating in the EUFOR as part of Operation Concordia in the former Yugoslav Republic of Macedonia; and how many personnel are involved. [108073]

  Mr. Ingram
  The total complement for Operation Concordia in the former Yugoslav Republic of Macedonia is some 467 personnel. Countries contributing personnel are Austria; Belgium; Bulgaria; Czech Republic; Estonia; Finland; France; Germany; Greece; Hungary; Italy; Iceland; Latvia; Lithuania; Luxembourg; Netherlands; Norway; Poland; Portugal; Romania; Slovakia; Slovenia; Spain; Sweden; Turkey and the United Kingdom.

  Reservists
  Mr. Wiggin
  To ask the Secretary of State for Defence whether the facilities for contacting families and friends in the UK for reservists are the same as for regular armed forces serving in the Gulf. [107975]

  Dr. Moonie
  Yes. There is absolutely no distinction between members of the regular and reserve forces. Both have access to exactly the same welfare package which includes facilities for contacting friends and families such as welfare telephones, BFPO mail service and e-blueys (an email version of the bluey aerogram), access to the internet and family travel concessions.

  Type 23 Frigates
  Mr. Jenkin
  To ask the Secretary of State for Defence whether all Type 23 frigates are to be enhanced with CEC capability; and if he will make a statement. [107117]
  300W
  Mr. Ingram
  Discussions on the number of Type 23 frigates to undergo full ship fitment of United Kingdom Co-operative Engagement Capability (CEC) will be taken at Main Gate investment decision in 2005. Analysis suggests that fitment to seven Type 23s will provide the most cost-effective way to introduce the UK CEC capability at the earliest opportunity. This will provide a sufficient force to develop the usage and tactics of the system and also to provide a robust network to interact with CEC in the Type 45 Destroyer.

INTERNATIONAL DEVELOPMENT

  Afghanistan
  Mr. Key
  To ask the Secretary of State for International Development pursuant to her written statement of 1 April 2003,Official Report, column 51WS, on Afghanistan, and with reference to the Afghanistan Development Forum in March, what steps her Department are taking to encourage the fulfilment of pledges made in Tokyo and reiterated in Oslo in December 2002. [107841]

  Clare Short
  The majority of donors are performing well against the pledges they made in Tokyo in January 2002. My Department enjoys good relations with many of the donors and we take the opportunity to encourage them to fulfil their pledges whenever we are in contact, both at an official and ministerial level.

  Doha Trade Negotiations
  Mr. Key
  To ask the Secretary of State for International Development what assessment her Department has made of Doha trade negotiations with respect to the 31 March deadline; and if she will make a statement. [107545]

  Clare Short
  The Government are disappointed that the 31 March deadline to establish modalities for a new Agreement on Agriculture was not achieved. Agricultural trade reform is critical for developing countries and central to the wider Doha Development Agenda. WTO members must now redouble their efforts to reach consensus by the fifth meeting of the WTO Ministerial Conference in September this year and the UK will continue to play an active part in seeking to bring this about. Regarding the 31 March deadline for WTO members to make initial market access offers under the General Agreement on Trade in Services (GATS), we welcome the tabling so far of offers by 13 WTO members, including some developing countries, and encourage other members to follow suit. As to the EU's initial offer, the Government have been working hard within the EU to agree an offer that will be meaningful for both developed and developing countries. Although the offer has not yet been finalised, it is well advanced and we expect it to be presented to the WTO very shortly.

  Mr. Key
  To ask the Secretary of State for International Development what steps her Department is taking to put new momentum into the Doha trade round; and if she will make a statement. [107550]
  301W
  Clare Short
  We are very concerned at the lack of progress in the current round of WTO negotiations. As I explained in a speech to Chatham House on 25 March 2003, failure in Cancun would be a major set back for both the world economy and poor countries. A full copy of the speech is available on my Department's website (http://www.dfid.gov.uk).

  In order to inject political momentum into the round I am undertaking, together and in co-ordination with my ministerial colleagues. a series of activities both in public and in private to advocate the benefits of the round, push the negotiations forward, and ensure a successful outcome in Cancun.

  The Government will continue to work to ensure that the promises for a 'development round' made in Doha become a reality.

  European Working Groups
  Mr. Bercow
  To ask the Secretary of State for International Development if she will make a statement on progress with achieving transparency in respect of the European working groups for which her Department is responsible. [105736]

  Clare Short
  The Government have long been committed to greater openness in the EU Institutions. This was a key theme of the UK Presidencies in 1992 and 1998. Making it easier to gain access to non-sensitive documents is crucial to this. The Government welcomed Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents. As a result, more documents are released to the public, while genuinely sensitive documents are given the protection they need.

  Much of the council's work takes place in preparatory bodies, including working groups. Agendas and timings for the working groups can he found on http://europa.eu.int/cal/en/index.htm.

  Accountability and transparency of Council business to Parliament are ensured by the scrutiny process, to which the Government are also firmly committed.

  We strongly supported the measures agreed at the Seville European Council to make the council more open when in legislating mode. We remain committed to increasing transparency. The Future of Europe Convention is also looking at ways to make the EU more open.

  Exhibitions
  Mr. Yeo
  To ask the Secretary of State for International Development if she will list events at which her Department and each agency and non-departmental public body for which her Department is responsible have exhibited in each of the last three years, stating for each(a) the purpose of exhibiting, (b) the cost of exhibiting and (c) the number of staff attending for the exhibition. [107629]

  Clare Short
  It would not be possible to list all the events in which the Department has participated over the past three years without disproportionate effort. DFID's exhibitions and events schedule supports 302W
  DFID's Development Awareness role. The principal events in which the Department has participated in each of the past two years are:
  Education sector: BETT, the Education Show, and appropriate educational trade union conferences;
  Business and trade unions sector: CBI and British Chambers of Commerce annual conferences, TUC annual conference;
  Media sector: Sheffield International Documentary Festival.

  The Department also exhibits on an occasional basis at recruitment fairs, and at meetings on development-related themes.

  Staffing at these events is a maximum team of three.

  The total annual operating costs for DFID's events activity for each of the past three years is shown in the table. The figures include associated promotional tasks such as support for ministerial regional visits and internal staff-focused activities.

  Financial Year

  £

  2000–01

  198,058

  2001–02

  91,532

  2002–03

  203,552

  Figures for 2002–03 are subject to final auditing to take account of any end of year adjustments.

  Guatemala
  Dr. Tonge
  To ask the Secretary of State for International Development what funds her Department has allocated to Guatemala in each year since 1997. [108046]

  Clare Short
  Since 1997 my Department has spent the following funds on Guatemala:

  £ million

  Financial Year

  1 DFID programmes

  2DFID share of EC programme

  1997–98

  0.404

  2.4

  1998–99

  0.479

  3.6

  1999–2000

  0.371

  4.1

  2000–01

  0.319

  2.5

  2001–02

  0.420

  3—

  2002–03

  3—

  3—

  1 DFID programme figures by financial year

  2 DFID share of EC programme by calendar year

  3 Figures not yet available

  Iraq
  Mr. Key
  To ask the Secretary of State for International Development if she will list(a) UK and (b) non-UK NGOs with which her Department has had meetings regarding the humanitarian situation in Iraq. [107547]

  Clare Short
  DFID officials have been meeting with NGOs in London since 13 February on a weekly basis. The Save The Children Fund UK (SCF-UK) coordinates this informal group on Iraq, which is a forum for discussing latest developments. Attendance at these meetings includes Christian Aid, SCF-UK, Mines Awareness Group (MAG), Oxfam, CAFOD and Tearfund. We are also meeting with non-UK NGOs in
  303W
  Amman and Kuwait. Attendance at these meetings includes GOAL, Premiere, Enfant du Monde, Architects of People in Need (APN), Danish Church Aid, Norwegian Church Aid, SCF-US and Mercy Corps.

  Harry Cohen
  To ask the Secretary of State for International Development whether the cost(a) of humanitarian aid distributed from (i) HMS Sir Galahad and (ii) other sources associated with the UK and (b) assumed to have been incurred by the use of UK troops in distributing the aid will be charged to the UN Oil for Food Programme; and if she will make a statement. [107748]

  Clare Short
  Humanitarian supplies being provided and distributed by UK forces will not be paid for by the Oil for Food Programme (OFF). The Ministry of Defence has been allocated £30 million by HM Treasury to help it carry out its humanitarian obligations under the Geneva Convention and The Hague Regulations.

  The UK does not otherwise provide significant bilateral humanitarian assistance; our assistance is channelled mainly through UN and international aid agencies.

  National Insurance
  Mr. Bercow
  To ask the Secretary of State for International Development what the cost will be to public funds in 2003–04 of the rise in national insurance contributions on the salary bill of her Department. [107897]

  Clare Short
  It is estimated that the changes to employers' national insurance contributions announced in the Budget will increase pay costs on average by 0.7 per cent. next year.

  Southern Africa
  Mr. Key
  To ask the Secretary of State for International Development what discussions her Department has had with other donors in relation to the World Food Programme's shortfall in funds for the southern Africa food crisis; and if she will make a statement. [107548]

  Clare Short
  The World Food Programme's ․507 million appeal in July 2002 is now 76 per cent. funded. Both the Prime Minister and I have written to other donors to urge further contributions. The international communities response to the crisis has funded enough food and other supplies to avoid a major catastrophe. DFID officials meet regularly with WFP and other donors, including USAID and the EU, to monitor the food security position in southern Africa. The UK has contributed more that £106 million in humanitarian assistance to Southern Africa since September 2001. The UK share of EU assistance was over £21 million.

  Mr. Key
  To ask the Secretary of State for International Development what assessment her Department has made of the southern Africa food crisis after mid-May; and if she will make a statement. [107549]

  Clare Short
  Southern Africa has suffered a serious humanitarian crisis since late 2001. Harvests are due across the region starting in April. Early forecasts are 304W
  for variable but generally improved crops. If these forecasts are accurate, then there should be a significant reduction in the scale of the crisis in the region. There will be little need for food aid in Malawi and Zambia, but continuing pockets of need in Mozambique, Lesotho and Swaziland.

  However, there continues to be a major crisis in Zimbabwe. There is likely to be a 1 million tonne shortfall in maize production, and although the number needing food aid in the coming months may drop from the present level of 7 million, this figure is almost certain to climb again by the end of the year.

  Websites
  Mr. Yeo
  To ask the Secretary of State for International Development if she will make a statement on the(a) cost of and (b) number of visitors to each website operated by her Department and each agency and non-departmental public body for which her Department is responsible in each year since its establishment. [107634]

  Clare Short
  The Department for International Development currently operates three principal websites: the departmental site (www.dfid.gov.uk), a site providing access to development education resources (www.globaldimension.org.uk) and a site relating to DFID's quarterly magazine, 'Developments' (www.developments.org.uk). For the launch of the 2000 White Paper on International Development, DFID supported the creation of an additional site (www.globalisation.gov.uk). All sites are active, although the 2000 White Paper site is treated as dormant for the purposes of uploading new information. It would not be possible to list all start-up and annual running costs since inception without disproportionate effort. However, operating and associated costs for each of the websites for the last three financial years are as follows:

  Financial year

  2000–01

  2001–02

  2002–03

  DFID website

  37,825

  122,504

  64,677

  Global Dimension website

  37,595

  118,984

  131,268

  2000 White Paper website

  60,000

  15,000

  15,000

  Developments website

  9,272

  7,304

  17,704

  Figures for 2002–03 are subject to final auditing to take account of any end of year adjustments.

  Hits

  Page Impressions

  Unique Visitors

  DFID Website

  2001–021

  17,269,840

  14,128,707

  224,016

  2002–03

  29,298,520

  6,651,074

  424,212

  Global Dimension Website

  2001–022

  113,803

  —

  9,019

  2002–033

  393,584

  —

  30,125

  White Paper Website

  2000–014

  823,147

  283,160

  18,587

  2001–025

  1,301,670

  445,884

  36,622

  2002–036

  748,920

  217,092

  37,263

  305W

  Hits

  Page Impressions

  Unique Visitors

  Developments Website

  2000–017

  —

  214,052

  —

  2001–028

  —

  201,100

  —

  2002–039

  —

  220,976

  —

  1 Estimated figures (Hits/Unique Visitors) used for April 2001 to October 2001

  2,3 No Page Impression figures available

  4 Estimated figures (Hits, Page Impressions, Unique Visitors) used for February 2001 to March 2001

  5 Estimated figures (Hits, Page Impressions, Unique Visitors) used for April 2001, December 2001 to March 2002

  6 Estimated figures (Hits, Page Impressions, Unique Visitors) used for April 2002 to May 2002

  7,8,9 No 'Hits' or 'Unique Visitors' figures available

  World Food Programme
  Vernon Coaker
  To ask the Secretary of State for International Development what contribution her Department has made to date to the World Food Programme appeals for(a) Southern Africa and (b) Ethiopia. [108020]

  Clare Short
  DFID has contributed over £106 million since September 2001 to support humanitarian assistance and recovery programmes across six countries in southern Africa (Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe). In addition, the UK has contributed over £21 million to the European Community's response.

  Of the total bi-lateral UK contribution, £38.22 million has gone directly to the World Food Programme to support its operations and a further £30.87 million has been provided to support NGO feeding operations, which are closely coordinated with the World Food Programme.

  For Ethiopia, DFID has contributed £15 million for food aid at the end of December 2002 to the World Food Programme and in March 2003 we made a further payment of £2 million to them.

FOREIGN AND COMMONWEALTH AFFAIRS

  Turks and Caicos Islands
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department has had with the US Coast Guard regarding the exodus of Haitian immigrants to the Turks and Caicos. [107284]

  Mr. Mike O'Brien
  The Turks and Caicos Islands (TCI) Government and the FCO Overseas Territories Law Enforcement Adviser, based in Miami, are in regular contact with the US Coast Guard on policy and operational matters, including the extension of measures to combat illegal migration. The US Coast Guard on the Bahamas Island of Gt. Inagua coordinates drug interdiction operations under a tripartite agreement between the USA, TCI and the Bahamas, dating from 1990. This can include operations against vessels carrying illegal migrants. TCI law enforcement personnel participate in these operations.
  306W
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department has had with the Government of Haiti regarding Haitian immigrants in the Turks and Caicos. [107276]

  Mr. Mike O'Brien
  We have been in discussions with the Haitian authorities for some time about Haitian immigrants to the Turks and Caicos Islands (TCI). On 24 March, our ambassador to Haiti held discussions on this subject with the Haitian Foreign Minister in Port-au-Prince at which it was provisionally agreed that a Haitian Government delegation would visit the TCI later this month to continue the dialogue with the TCI authorities.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what guidance his Department gives to the Government of the Turks and Caicos Islands regarding the criteria for awarding citizenship. [107279]

  Mr. Mike O'Brien
  The criteria for British Overseas Territories Citizenship are detailed in the British Nationality Act 1981. The Home Office, which has lead responsibility for British nationality matters, has issued detailed guidance, which was transmitted in the form of an instruction manual to the Governors of the British Overseas Territories.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what figures his Department holds for the number of Haitians who have been awarded citizenship in the Turks and Caicos Islands for each year since 1992. [107280]

  Mr. Mike O'Brien
  Regrettably, we do not hold the statistics requested. The following statistics in relation to British Overseas Territories Citizenship have been provided by the Governor's Office, but they are total figures and do not include details by nationality;

  Registrations

  Naturalisations

  2000 (August to December)

  0

  9

  2001

  50

  35

  2002

  35

  42

  2003 (January to March)

  2

  9

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department has had with the government of the Turks and Caicos about illegal Haitian immigrants. [107285]

  Mr. Mike O'Brien
  We are in regular contact with Ministers and Officials of the Turks and Caicos Islands Government (TCIG) on this issue. My noble Friend Baroness Amos last raised the issue with the Chief Minister on 3 March.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions his Department has had with the government of the Turks and Caicos islands regarding the human rights of(a) Haitian immigrants and (b) naturalised Haitians. [107287]
  307W
  Mr. Mike O'Brien
  We are in regular contact with Ministers and Officials of the Turks and Caicos Islands Government (TCIG) on these issues. My noble Friend Baroness Amos last raised the issues with the Chief Minister on 3 March.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent assessment his Department has made of the internal security situation in the Turks and Caicos Islands. [107996]

  Mr. Mike O'Brien
  The Governor delegates responsibility for day to day operations to Turks and Caicos Islands (TCI) Government Ministries and law enforcement agencies. The FCO Overseas Territories Law Enforcement Adviser, based in Miami, and the regional Defence Adviser, based in Jamaica, also visit the TCI regularly and submit independent assessment reports on the internal security situation. The last visit by both was in February. The assessment process is continuous.

  Afghanistan
  Harry Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans NATO has for operations in Afghanistan; and if he will make a statement. [107745]

  Mr. Ingram
  I have been asked to reply.

  I refer my hon. Friend to the answer I gave on 7 April 2003, Official Report, columns 7–8W, to the hon. Member for North Essex (Mr. Jenkin) regarding the potential for NATO involvement in Afghanistan.

  Central Asian Nuclear Weapon-Free Zone
  Mr. Soley
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's response to the decision to create a Central Asian nuclear weapon-free zone by Kazakhstan, Kyrgystan, Tajikistan, Turkmenistan and Uzbekistan; and what implications this has for the UK as a nuclear weapon state. [107204]

  Mr. Mike O'Brien
  The UK supports the establishment of nuclear weapon free zones on the basis of arrangements freely arrived at among the states of the region concerned. Together with China, France, Russia and the United States, we have participated in formal consultations with the five Central Asian States concerning the establishment of the draft Central Asian Nuclear Weapon-Free Zone and its draft Protocol. As a nuclear weapon State the UK intends giving a negative security assurance to those States forming this zone, by becoming party to the draft protocol. This would be subject to satisfactory conclusion being reached over the language in the draft Treaty and Protocol.

  Document Classification
  Harry Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many documents are held by his Department that are subject to security classification, broken down by category of classification. [107348]
  308W
  Mr. Straw
  The Foreign and Commonwealth Office holds approximately 23 km of archived paper documents and nearly 2 million archived electronic documents; an estimated further 4 km paper files and 3 million electronic documents are held in current registries. No central record of classified documents is maintained and further breakdown could be provided only at disproportionate cost.

  Iraq
  Harry Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs pursuant to his answer of 25 March 2003,Official Report, column 120W, on Iraq, which parts of the Iraqi declaration he deems of such a nature as to be justified for non public disclosure under exemption 1 (c) of the Code of Practice on Access to Government Information. [107288]

  Mr. Mike O'Brien
  Exemption 1(c) of the Code of Practice on Access to Government Information covers documents provided in confidence by other governments, international courts and international organisations.

  The Iraqi declaration was provided to the UK Government in confidence by the United Nations. It follows, therefore, that the exemption covers that declaration in its entirety.

  Israel
  Norman Lamb
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to Israel on opening up its nuclear facilities to international inspections. [107112]

  Mr. Mike O'Brien
  We consistently urge Israel to accede to the Nuclear Non-Proliferation Treaty as a non nuclear weapons state, and to sign a full-scope safeguards agreement with the International Atomic Energy Agency (IAEA). We did this most recently during official-level talks with the Israeli Government in Tel Aviv in March 2003. Under the agreement with IAEA, Israel's nuclear facilities would be subject to regular inspection to detect and eliminate any diversion of nuclear materials for weapons production.

  Mr. Pound
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to ensure that Israel complies with United Nations Security Council resolutions in respect of Palestine. [107225]

  Mr. Mike O'Brien
  The Government constantly urges both Israel and the other Parties to the Middle East Peace Process to comply with United Nations Security Council Resolutions. This includes compliance with Resolution 1435, which calls for Israeli withdrawal from Palestinian cities, action by the Palestinian Authority to bring those responsible for acts of terror to justice and a complete cessation of violence. We fully support the Quartet Roadmap and its route to a lasting settlement based on UN Security Council Resolutions 242, 338 and 1397 and the principle of land for peace.

  Market Research
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs what expenditure has been
  309W
  incurred by his (a) Department, (b) agencies and (c) non-departmental bodies in 2002 on (i) opinion polling, (ii) focus groups and (iii) other forms of market research; and if he will list the surveys commissioned and the purpose of each. [106271]

  Mr. MacShane
  The Foreign and Commonwealth Office spent a total of £95,047 on opinion polling, focus groups and market research in the UK in 2002–03. The activity consisted of:

  a survey to research consular awareness among football supporters travelling to the World Cup in Japan and Korea

  a survey to research consular awareness among British travellers in the 16–30 age range

  one series of focus groups on attitudes of British citizens towards the EU

  one series of focus groups exploring the attitudes of British citizens towards EU enlargement.

  The FCO's non-departmental body, the British Council, undertook research into changing attitudes towards the UK among international students studying in the UK. The aim was to gain insights into how to improve the students' experience of Britain. The cost of the survey was £50,231.

  No other FCO NDPBs or its one Executive Agency conducted surveys in the UK in 2002.

  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his estimate is of the expenditure of his Department on newspapers, magazines and periodicals in 2002. [106309]

  Mr. Rammell
  For Financial Year 2002–03 the total is £608, 401. These figures are provisional and subject to final audit.

  Staff Numbers
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many staff were employed by his Department in(a) 2001–02 and (b) 2002–03. [106968]

  Mr. Rammell
  I refer the hon. Member to the answer given him by my hon. Friend the Minister of State, Cabinet Office on 4 April 2003,Official Report, column 891W.

  Vietnam
  Alistair Burt
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the Vietnamese Government concerning the persecution of Montagnard Christians in the central highlands of Vietnam; and what benchmarks are used to monitor progress in these discussions. [107367]

  Mr. Mike O'Brien
  We regularly raise the problems faced by the Montagnards in the Central Highlands with the Vietnamese Government. I discussed the issue with Vietnam's Foreign Minister Nien when I last met him in June 2002. The FCO's Asia Pacific Director raised religious freedom when she discussed human rights with senior Vietnamese officials in December 2002. We are currently working to develop a more focused approach to the group including through the development of an action plan. Our Embassy also 310W
  monitors progress by regular visits to the Central Highlands region including as part of a delegation from EU Embassies in Hanoi.

  Websites
  Mr. Yeo
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the(a) cost of and (b) number of visitors to each website operated by his Department and each agency and non-departmental public body for which his Department is responsible in each year since its establishment. [107601]

  Mr. MacShane
  I refer the hon. Member to the answers I gave to the hon. Member for Buckingham (Mr. Bercow) on 26 February 2002,Official Report, column 1157W, and 3 April 2003, Official Report, column 829W.

  Western Sahara
  Mr. Grogan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's policy towards Western Sahara. [107037]

  Mr. Mike O'Brien
  The UK—in common with most other countries—regards the sovereignty of Western Sahara as undetermined pending UN efforts to find a solution to this dispute.

  We continue to support the efforts of the United Nations Secretary General (UNSG) and James Baker, his Personal Envoy in trying to find a just and durable resolution to the dispute. We also support UN Security Council Resolution 1429 which expressed the Security Council's readiness to consider any approach that provides for self-determination that the UNSG and his Personal Envoy might propose. It commended the parties for their continuing commitment to the ceasefire.

  Zimbabwe
  Mr. Rosindell
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent developments in Zimbabwe. [106863]

  Mr. Rammell
  Politically motivated violence in Zimbabwe has increased, predominately against opposition supporters. The MDC organised a successful stayaway on 18 and 19 March. Following the stayaway there were over 500 arrests and over 250 people required hospital treatment. We joined our EU partners in condemning the violence and called on the Government to ensure that by-elections in two Harare constituencies on 29 and 30 March were free and fair. Despite violence and intimidation ahead of these elections, the MDC retained both seats.

  We welcome the Southern African Development Community's recent decision to send a task force to Zimbabwe to investigate human rights abuses and state repression. The Zimbabwean Government needs to end violence, intimidation, and the arrest of key opposition figures; and to work with the opposition and civil society to address Zimbabwe's political, humanitarian and economic crisis.
  311W

CULTURE, MEDIA AND SPORT

  Archaeology
  Mr. Oaten
  To ask the Secretary of State for Culture, Media and Sport what plans her Department has to introduce a voluntary code of conduct to cover archaeological investigations in support of Article 3 of the Valletta Convention. [107843]

  Dr. Howells
  [holding answer 8 April 2003]The Government supports the introduction of a voluntary code of conduct and has agreed with Welsh and Scottish counterparts that such a code should be developed jointly between all three countries. English Heritage has already begun work to develop a voluntary code of conduct with Historic Scotland and Cadw. This work will be undertaken in consultation with all parts of the archaeological community and it is hoped that a draft code of conduct will be available for consultation in the summer.

  Mr. Oaten
  To ask the Secretary of State for Culture, Media and Sport what plans she has to establish an interdepartmental committee on archaeology at ministerial level. [107844]

  Dr. Howells
  [holding answer 8 April 2003]There are no plans to establish an inter-departmental committee on archaeology at Ministerial level. Government Departments continue to work together on issues concerning the historic environment, including archaeology. For example, ODPM and DEFRA are closely involved in the current review of heritage protection legislation led by DCMS and are co-sponsors of English Heritage's new funding agreement.

  Departmental Pay
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport what progress has been made with the pay review in her Department, agencies and non-departmental public bodies for which she is responsible, with particular reference to the gender pay gap; and if she will make a statement. [106742]

  Dr. Howells
  In response to the Equal Opportunities Commission (EOC) Task Force 'Just Pay' Report the Government committed departments and agencies to review their pay systems and prepare any necessary action plans to close any equal pay gaps by April 2003. The Cabinet Office issued comprehensive guidance in January 2002 to assist departments and agencies in carrying out these reviews. Additional guidance on completing equal pay action plans was issued in early March 2003.

  DCMS completed its review in July 2002. No significant difference between the salaries of males and females was found. Proposals for change and other recommendations were accepted by the trade unions, subject to pay negotiations.

  The Royal Parks Agency has completed an initial review but has yet to discuss the outcome with its Trade Union Side. No particular gender pay issues have been identified.
  312W
  The Department's NDPBs have either completed equal pay reviews or are in the process of finalising them and drawing up action plans. If any equal pay issues are identified, these will be addressed through the pay negotiation process.

  English Heritage
  Mr. Hunter
  To ask the Secretary of State for Culture, Media and Sport what recent assessment she has made of whether English Heritage's Images of England project impinges on the human rights of the owners of listed buildings; and if she will make a statement. [102092]

  Dr. Howells
  Images of England is an English Heritage scheme funded by the Heritage Lottery Fund. While my right hon. Friend the Secretary of State has been consulted by English Heritage she has not been directly involved in the design or running of the project. However, my right hon. Friend has been assured by English Heritage that the project has been designed to be consistent with Human Rights legislation.

  Sport Action Zones
  Ms Walley
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement in respect of sport action zone designation for Stoke on Trent. [108146]

  Mr. Caborn
  In December 2002 Sport England announced a stock take and freeze on all completely new Lottery awards until a thorough review of its operations and business objectives has been completed as part of the process of modernising the organisation. That review is ongoing and is expected to be completed by late Summer. I understand that all applications for designation as Sport Action Zones, including the one for Stoke-on-Trent, form part of the stock take exercise.

  National Lottery
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport how many charities in the Buckingham constituency have(a) applied for and (b) claimed awards from the Heritage Lottery Fund in each year since the National Lottery began. [107778]

  Dr. Howells
  The information is as follows:

  Number of charities which applied for awards

  Number of charity projects approved

  1995–96

  1

  0

  1996–97

  2

  1

  1997–98

  2

  2

  1998–99

  2

  2

  1999–2000

  2

  1

  2000–01

  1

  1

  2001–02

  1

  1

  2002–03

  0

  0

  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport how much grant funding was located by English Heritage and the Heritage Lottery Fund for the conservation of listed buildings in Buckinghamshire in 2001–02. [106987]
  313W
  Dr. Howells
  £592,733 was allocated by English Heritage and £5,340,300 by the Heritage Lottery Fund for the conservation of listed buildings in Buckinghamshire in 2001–02.

  Portable Antiquities Scheme
  Mr. Oaten
  To ask the Secretary of State for Culture, Media and Sport what plans her Department has to provide long-term support to the network of finds liaison officers to be established under the Portable Antiquities Scheme after April 2006. [107845]

  Dr. Howells
  [holding answer 8 April 2003]DCMS is giving active consideration to the question of long-term sustainability of the Portable Antiquities Scheme. We will consider sympathetically the Scheme's future funding requirements in the course of the normal Spending Review process, as part of our analysis of all our resource needs.

  Preventive Health Care
  Mrs. Brooke
  To ask the Secretary of State for Culture, Media and Sport, what recent discussions she has had with the Secretary of State for Health on increasing the effectiveness of preventive health care through the encouragement of greater participation in sporting and fitness activities. [107064]

  Mr. Caborn
  I chair monthly cross-governmental ministerial meetings, attended by Ministers from the Department of Health, where issues relating to sport policy are discussed, including the role that greater participation in sport and physical activity can have in

  Attraction

  1996

  1997

  1998

  1999

  2000

  2001

  1.

  Blackpool Pleasure Beach

  17,500,000

  17,800,000

  17,100,000

  17,200,000

  6,800,000

  6,500,000

  2.

  Blackpool Tower

  1,200,000

  1,200,000

  1750,000

  1750,000

  Confidential

  Confidential

  3.

  Winter Gardens

  1750,000

  1750,000

  —

  750,000

  —

  —

  4.

  Beacon Fell Country Park

  —

  300,000

  —

  —

  1750,000

  750,000

  5.

  Botany Bay

  —

  —

  1500,000

  1525,000

  —

  —

  6.

  Sea Life Centre

  1497,000

  1497,000

  Confidential

  497,000

  —

  —

  7.

  Oswaldtwistle Mills

  135,000

  135,000

  1450,000

  450,000

  —

  —

  8.

  Camelot Theme Park

  1500,000

  1500,000

  1441,000

  450,000

  400,000

  380,000

  9.

  Blackpool Sandcastle

  1400,000

  1400,000

  261,000

  400,000

  —

  —

  10.

  Louis Tussauds Waxworks

  1400,000

  1400,000

  350,000

  300,000

  Confidential

  Confidential

  11.

  Blackpool Zoo

  277,172

  1200,000

  —

  1200,000

  270.000

  1275,000

  12.

  Lancaster Leisure Park

  278,000

  1250,000

  300,000

  210,000

  240,000

  Confidential

  13.

  Harris Museum and Art gallery

  1150,000

  1150,000

  1150,000

  150,000

  125,000

  125,000

  14.

  Martin Mere Wildlife

  175,262

  140,000

  132,670

  132,670

  Confidential

  Confidential

  15.

  Williamson Park

  140,000

  125,000

  98,000

  98,000

  Confidential

  Confidential

  1 Indicates the figures are estimated.

HEALTH

  AAT Deficiency
  Tim Loughton
  To ask the Secretary of State for Health whether sperm donors are tested for AAT Deficiency. [106604]

  Ms Blears
  Sperm donation is regulated by the Human Fertilisation and Embryology Authority (HFEA). The HFEA code of practice expects clinics recruiting donors to take all reasonable steps to prevent the transmission of serious genetic disorders by taking a thorough medical history from the prospective donor. Where the medical history of a prospective donor 314W
  improving health. My Department has also been working closely with the Department of Health to ensure effective co-ordination of sport and health policy.

  Public Lending Rights
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport what representations she has received about the Public Lending Right (Increase of Limit) Order. [107791]

  Dr. Howells
  To date the Department for Culture, Media and Sport, has received two representations, one from the Chairman of the Society of Authors, Philip Pullman and one from a member of the public about the Public Lending Right (Increase of Limit) Order.

  Tourism
  Mr. Evans
  To ask the Secretary of State for Culture, Media and Sport if she will list the top 15 tourist attractions in Lancashire and the attendance figures for each attraction in each of the last six years. [107953]

  Dr. Howells
  The top15 tourist attractions in Lancashire as listed by the North West Tourist Board are shown as follows. With regard to attendance figures, attractions are under no obligation to the Tourist Board to provide such figures but these are shown where available over the last six years. I should point out that in some cases figures are provided but on the understanding that they are not published hence those shown as 'confidential'. Figures for 2002 are not yet available.

  indicates there may be a risk of the transmission of alpha-antitrpsin (AAT) deficiency, screening for the disorder will usually be carried out.

  Guidelines on appropriate genetic tests for sperm donors have been produced by the British Andrology Society and incorporated into the HFEA code of practice.

  Tim Loughton
  To ask the Secretary of State for Health what research his Department has carried out into AAT Deficiency; and what funds he makes available for research. [106609]

  Ms Blears
  The main Government agency for research into the causes of and treatments for disease is the Medical Research Council (MRC), which receives its
  315W
  funding from the Department of Trade and Industry, via the Office of Science and Technology. The MRCs total expenditure in 2001–02 was £413 million. The MRC has supported a number of research projects looking into the genetics and function of alphalantitrypsin (AAT) in the past few years and is currently providing a programme grant to examine new therapies for AAT deficiency and associated diseases. This is "Strategies to prevent cirrhosis and dementia by blocking serpin polymerisation in vivo", by Professor David Lomas at the University of Cambridge.

  The Department funds research to support policy and delivery of effective practice in health and social care. The Department is not currently funding any research into AAT deficiency. The Department also provides funding to support research commissioned by the research councils and the charities that is undertaken in the National Health Service, and invested more than £500 million on research in 2001–02. The Department has a programme of research on genetics and has recently funded the creation of five genetics knowledge parks in England.

  Agency Social Workers
  Tim Loughton
  To ask the Secretary of State for Health how much was spent last year by local authorities' social services departments in London on agency social workers. [106547]

  Jacqui Smith
  The information is not collected centrally by the Department.

  Air Quality
  John Robertson
  To ask the Secretary of State for Health what assessment he has made of the effects on health of(a) passive smoking and (b) poor air quality. [105422]

  Ms Blears
  The independent Scientific Committee on Tobacco and Health concluded in its 1998 Report that:Exposure to environmental tobacco smoke is a cause of lung cancer and, in those with long-term exposure, the increased risk is in the order of 20–30 per cent.
  Exposure to environmental tobacco smoke is a cause of ischaemic heart disease and if current published estimates of magnitude of relative risk are validated, such exposures represents a substantial public hazard.
  Smoking in the presence of infants and children is a cause of serious respiratory illness and asthmatic attacks.
  Sudden infant death syndrome, the main cause of post-neonatal death in the first year of life, is associated with exposure to environmental tobacco smoke. The association is judged to be one of cause and effect.
  Middle ear disease in children is linked with parental smoking and this association is likely to be causal.

  The Committee on the Medical Effects of Air Pollutants (COMEAP) and its predecessor, the Advisory Group on the Medical Aspects of Air Pollution Episodes, has published several reports assessing the effects on health of nitrogen dioxide, sulphur dioxide, particles, pollutant mixtures. Executive summaries of these reports are on the COMEAP website at www.doh.gov.uk/comeap/index.htm
  316W
  The report on the quantification of the effects of air pollution on health in the United Kingdom, published in 1998, concluded that the levels of air pollution in 1996 contributed to the earlier deaths of up to 24,000 people. Air pollution is thought to worsen the condition of those that are already ill with heart and lung disease and to bring forward the dates of their deaths. The average loss of life expectancy is unknown but is thought to be days, weeks or months rather than years. The report also concluded that air pollution could contribute to a similar number of respiratory hospital admissions. Levels of air pollution have declined since 1996.

  In its report published in 2001, the committee concluded that it was more likely than not that a causal association exists between long-term exposure to particulate air pollution and mortality although the Committee also emphasised the uncertainties. It was also concluded that the effect of long-term exposure on life expectancy was greater than the effects of short-term exposure described in the 1998 report.

  The Department of Health has commissioned a research programme on the effects of air pollution on health. The relevant research projects are listed on the Department's website at www.doh.gov.uk/airpollution/index.htm.

  ALT Testing
  Mr. Lazarowicz
  To ask the Secretary of State for Health which Government Department or agency holds(a) reports of the Blood Transfusion Service Working Group on ALT testing, (b) minutes of meetings of regional transfusion directors, (c) minutes of meetings of the governing body of the (i) National Blood Transfusion Service and (ii) Scottish National Blood Transfusion Service, (d) minutes of meetings of the (1) National Directorate of the National Blood Transfusion Service and (ii) its National Management Committee, (e) minutes of meetings of the UK Advisory Committee on Transfusion Transmitted Diseases, (f) minutes of meetings of the Advisory Committee on the Virological Safety of Blood and (g) minutes of meetings of the National Blood Transfusion Service and Scottish National Blood Transfusion Service Liaison committees, (h) minutes of meetings of Blood Transfusion Service consultants, (i) minutes of meetings of regional health authorities, (j) minutes of meetings of the governing body of the North London Blood Transfusion Centre and (k) minutes of meetings of the Board of Directors of the National Blood Authority, for the period from 1 January 1970 to 31 December 1991 inclusive; and which of these records are available for public inspection. [100940]

  Ms Blears
  The request covers a 21 year period and would require an unreasonable diversion of resources to retrieve the information. In accordance with section 9 of the Code of Practice on Access to Government Information we are, therefore, unable to provide this information.

  Ambulances
  Dr. Evan Harris
  To ask the Secretary of State for Health what recent representations he has received on the issue of cross-infection from ambulances or
  317W
  ambulance equipment; what guidance has been issued to ambulance trusts on this issue; and if he will make a statement. [106600]

  Mr. Lammy
  I have received no representation on the issue of cross infection from ambulances or ambulance equipment.

  In 2000, the Department of Health issued advice on the management and control of hospital infection (Health Service Circular 2000/02). All National Health Service trusts, including ambulance trusts were required to take action to:
  strengthen prevention and control of infection
  secure appropriate health care services for patients with infection
  improve surveillance of infection

  Assisted Conception
  Dr. Fox
  To ask the Secretary of State for Health what investigation his Department is carrying out into procedures at Leeds General Infirmary Assisted Conception Unit; and whether the results of the inquiry will be made public. [106853]

  Ms Blears
  An independent investigation has been commissioned by the Department into events at Leeds General Infirmary. This followed reports of the birth of twins who had been conceived by in-vitro fertilisation using the wrong sperm. We are expecting to receive the report of the investigation during the summer. These matters are now the subject of proceedings in the High Court as well as an injunction preventing identification of the parties. For these reasons we have not yet made a decision about publication of the investigation report or any part of it.

  The Human Fertilisation and Embryology Authority (HFEA) is responsible for regulating and inspecting clinics that offer assisted conception treatment. The HFEA has revised its guidelines to clinics in the light of this incident to ensure that they have robust systems in place to prevent similar errors. They have issued guidance on "double witnessing", requiring licensed clinics to have in place procedures to double check the identification of the people undergoing treatment and of the sperm and eggs being used.

  Beta Interferon and Glatiramer
  Mr. Burstow
  To ask the Secretary of State for Health what information his Department collects from the

  A

  B

  C

  E

  F

  Deaths1 in England and Wales where the underlying cause of death2 was hepatitis C3

  Deaths in UK of HIV- infected individuals with

  Deaths in HIV-infected individuals who have given blood

  Deaths in UK from vCJD

  Blood donors traced by UKBS who died from vCJD

  1998

  92

  507

  5

  18

  2

  1999

  92

  467

  5

  15

  1

  2000

  125

  475

  5

  28

  3

  2001

  123

  381

  2

  20

  1

  2002

  4—

  310

  2

  17

  2

  1 These figures are likely to underestimate the true mortality related to hepatitis C for several reasons: the certifying doctor may not always know about the existence of a hepatitis C infection, contracted many years earlier, that had given rise to another fatal liver disease.
  318W
  School of Health and Related Research at the University of Sheffield regarding the risk sharing agreement for beta interferon and glatiramer. [107569]

  Mr. Lammy
  The Sheffield University School for Health and Related Research (ScHARR) is responsible for collecting and analysing information on health outcomes for patients who receive disease-modifying therapies for multiple sclerosis (MS) under the United Kingdom risk sharing scheme. Information relating to progress in setting up the network of centres who will be providing data to ScHARR is routinely provided to members of the project monitoring group representing the parties to the scheme, including professional bodies, the MS Society and MS Trust, the companies marketing the four products, and UK health departments. ScHARR is not responsible for wider aspects of implementation of the scheme.

  Blood Donors (Deaths)
  Mr. Havard
  To ask the Secretary of State for Health how many people in the UK in the last five years have died from(a) hepatitis C, (b) HIV and AIDS and (c) vCJD; and how many of them were blood donors. [103980]

  Ms Blears
  Information on the number of deaths from hepatitis C, collected by the Office for National Statistics, is shown in column A of the following table. It is not known how many of these individuals were blood donors. Every unit of blood collected by the United Kingdom Blood Services (UKBS) has been tested for hepatitis C since 1991.

  The figures shown in column B are the number of deaths in the United Kingdom in HIV-infected individuals with or without reported AIDS. Numbers for recent years will rise as further reports are received. The Health Protection Agency, formerly the Public Health Laboratory Service, collates reports on HIV and AIDS diagnoses and deaths in HIV-infected individuals.

  Column C shows the number of deaths in England and Wales of HIV-infected individuals whose infection was identified as a result of donating blood. A positive HIV test will mean that the donated blood is not used. All donated blood has been tested for HIV since 1988. The chance of being infected with HIV through blood donations is currently less than one in 10 million.

  The National CJD Surveillance Unit collects information on the number of people who have died from vCJD. The UKBS have traced how many were blood donors. These figures are shown in columns E and F.
  319W
  where several other factors (e.g. alcohol, other blood-borne viruses) contributed to fatal chronic liver disease, the certifying doctor may judge that one of the other factors is more important.

  deaths with an underlying cause of primary liver cancer are not included, even if certified as being the result of hepatitis C infection. This is because international coding rules in use at this time do not accept cancers being due to infections, except in the case of HIV/AIDS.

  2 The underlying cause of death is the disease or condition that initiates the train of morbid events leading directly to death.

  3 For the years 1997 to 2000, selected using a combination of underlying cause codes 070.4–070.5 from the International Classification of Diseases, Ninth Revision (ICD-9) and the presence of text referring to hepatitis C on the death certificate. For the year 2001 underlying cause codes B17.1 and B18.2 from the International Classification of Diseases, Tenth Revision (ICD-10) were used.

  4 Information not yet available.

  Breast Cancer
  Mrs. Anne Campbell
  To ask the Secretary of State for Health what assessment he has made of whether the two-week waiting target for breast cancer patients urgently referred to a specialist by their GP has been met. [107659]

  Ms Blears
  Very good performance has been achieved in meeting the two week outpatient waiting time standard, with 98.7 per cent. (27,572) of women with suspected breast cancer seen within two weeks of urgent referral by their general practitioner in the last quarter (October to December 2002). Since the standard was introduced in April 1999, over 340,000 women have been seen within two weeks of urgent referral.

  Child Fitness
  Mr. Gareth Thomas
  To ask the Secretary of State for Health if he will introduce a national fitness assessment for 11-year-olds; and if he will make a statement. [105599]

  Ms Blears
  While we are sympathetic to the need to identify children and young people who are insufficiently active to benefit their health and offer appropriate interventions, we have no plans to introduce a national fitness assessment for 11-year-olds.

  Our inquiries show that the benefits of a national fitness assessment for 11-year-olds would be limited and such an assessment would be difficult to implement. Fitness testing in children and young people reflects genetic and maturational factors rather than providing a meaningful measure of individual fitness. For the majority of II-year-olds, measures of physical activity behaviour are more relevant and appropriate than physical fitness assessments.

  The Government are committed to improving the fitness of our young people. To this end. the Department for Education and Skills and the Department for Culture, Media and Sport have agreed a public service agreement target with the Prime Minister's Delivery Unit to enhance the take up of sporting opportunities by five to 16-year-olds. The aim is to increase the percentage of school children in England who spend a minimum of two hours each week on high quality physical education and school sport within and beyond the curriculum to 75 per cent. by 2006.

  Complaints
  Harry Cohen
  To ask the Secretary of State for Health whether community health councils will take new complaints from individuals through the NHS complaints procedure; what arrangements he has in 320W
  place to assist individuals with such complaints until the new arrangements are in place; and if he will make a statement. [108070]

  Mr. Lammy
  There is no statutory requirement for Community Health Councils (CHCs) to provide complaints advocacy although most do provide such a service and many will continue to offer advice to patients until abolition on 1 September.

  Additional specific support is also available in those areas where independent complaints advocacy service pilots exist, 106 ICAS pilots across the country.

  In areas where it is not possible to refer new cases to ICAS pilots, CHCs and patient advice and liaison services based in most national health service trusts will provide advice or refer individuals to local advocacy services.

  From l September a national ICAS service will be in place.

  Complementary Medicine
  Chris Grayling
  To ask the Secretary of State for Health when he expects to receive the reports from the working groups on(a) herbalists and (b) acupuncturists. [106628]

  Ms Blears
  I expect both the herbal medicine and acupuncture regulatory working groups to report by the end of summer 2003. The Department will consult on the basis of their findings as soon as this is practical.

  Delayed Discharges
  Mr. Ruffley
  To ask the Secretary of State for Health if he will set target times for the length of time delayed discharge patients remain in(a) acute and (b) non acute beds in (i) the West Suffolk and (ii) the Central Suffolk PCT area. [104836]

  Jacqui Smith
  There are currently no nationally set target times for the length of time patients wait for discharge from hospital, either nationally or in local areas, in acute or non-acute beds. However there may be local agreements between health and social care partners.

  However, the Community Care (Delayed Discharges etc.) Act 2003 will introduce a system of reimbursement for delayed discharges. Where the delay is because social services have either not assessed the patient or have not provided the necessary community care services, the local authority will pay a charge to the national health service for every day of delay. This will initially apply to patients receiving acute care.
  321W

  Dental Services
  Mr. Soames
  To ask the Secretary of State for Health how many dental practices are taking on new NHS patients in(a) the constituency of mid Sussex and (b) west Sussex. [107591]

  Ms Blears
  [holding answer 7 April 2003]The number of general dental service practices recorded on the www.nhs.uk website as taking on new National Health Service patients in the constituencies of mid Sussex and west Sussex at 4 April 2003 is shown in the table.

  General Dental Service: Number of dental practices taking new NHS patients, at 4 April2003

  Mid Sussex

  1 West Sussex

  Practices accepting charge exempt adults

  2—

  52

  Practices accepting charge paying adults for NHS treatment

  2—

  7

  Practices accepting children

  2—

  83

  1 180 practices listed

  2 Nil return

  Some of these practices would provide emergency dental service, occasional NHS treatment to non-registered patients and patients on referral. In addition some other practices may be taking on some NHS patients but do not want this published on the website.

  Patients seeking to register with a dentist can access information on the dental practices taking on new patients by contacting NHS Direct, their local primary care trust or by accessing the www.nhs.uk website.

  Mr. Bercow
  To ask the Secretary of State for Health what recent assessment he has made of the provision of NHS dentistry in Buckinghamshire. [106194]

  Ms Blears
  No recent assessment of the provision of national health service dentistry has been made by the Department. However, the provision of dental services in Buckinghamshire is routinely monitored by primary care trusts (PCTs).

  In the forthcoming Health and Social Care Bill, the Government propose to legislate for far-reaching reform of NHS dental services. It is proposed that each PCT be given a duty to provide or secure the provision of primary dental services in its area to the extent that it considers reasonable to do so and be given the financial resources to do this. This will give PCTs the flexibility to address access issues in their area. Dentists who contract with a PCT will have a secure income in return for making a longer-term commitment to the NHS.

  Dietary Advice
  Chris Grayling
  To ask the Secretary of State for Health how many five a day co-ordinators have been recruited by the NHS; and what their average salary is. [106633]

  Ms Blears
  Sixty-six primary care trusts have applied to the New Opportunities Fund for grants to support five a day community initiatives; 54 have been approved so far. Each employs or will shortly be recruiting a local co-ordinator in a salary range of £23,000 to £27,000. In addition there will be 10 regional co-ordinators, three of which posts are part-time, in a salary range of £25,000 to 322W
  £30,000 pro rata; and one part-time supra-regional coordinator at a salary of £35,000 pro-rata. Eight local coordinators have been recruited so far.

  Disease Outbreak
  Mr. Keetch
  To ask the Secretary of State for Health what provisions have been made to ensure effective dissemination of public information in the event of a large-scale disease outbreak; and if he will make a statement. [103436]

  Ms Blears
  The Department ensures that the public has access to a wide range of information resources on disease and immunisations. It is available direct to the public and via health professionals. In the event of a large-scale disease outbreak, information can be disseminated through existing local and national networks.

  Essex Rivers Healthcare Trust
  Mr. Ivan Henderson
  To ask the Secretary of State for Health how many(a) general practitioners, (b) consultants and (c) nurses were employed by Essex Rivers Healthcare Trust in each year since 1997. [107708]

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

  Hospital, public health medicine and community health services (HCHS): consultants employed at Essex Rivers Healthcare Trust (RDE) 1997-March 2002 England as at 30 September1 Headcount

  Headcount

  1997

  1998

  1999

  2000

  2001

  March 2002

  Consultants

  75

  75

  83

  84

  90

  94

  Qualified nursing, midwifery and health visiting stair2

  1,056

  1,096,

  1,122

  1,077

  0,014

  3—

  Notes:

  1 Figures are as at 30 September, except for 2002, where figures as at 31 March.

  2 Figures exclude learners

  3 Denotes information unavailable.

  Source:

  Department of Health medical and dental workforce census

  Department of Health non-medical workforce census

  National health service trusts do not employ staff as general practitioners.

  Exhibitions
  Mr. Yeo
  To ask the Secretary of State for Health if he will list events at which his Department and each agency and non-departmental public body for which his Department is responsible have exhibited in each of the last three years, stating for each(a) the purpose of exhibiting, (b) the cost of exhibiting and (c) the number of staff attending for the exhibition. [107619]

  Mr. Lammy
  This information is not collected centrally and can be provided only at disproportionate cost.
  323W

  Food Poverty
  Mr. Jim Cunningham
  To ask the Secretary of State for Health what recent assessment he has made of the level of food poverty in the UK; and what criteria he uses to define food poverty. [103548]

  Ms Blears
  [holding answer 20 March 2003]Poverty is a complex multi-dimensional concept, affecting many aspects of people's lives, including their inability to access an affordable healthy diet. Diet is assessed through a series of surveys: the National Diet and Nutrition Surveys, the Expenditure and Food Survey and the Health Survey for England. For example, the results of the 2001 Health Survey for England on the consumption of fruit and vegetables were analysed by the National Statistics Socio-Economic Classification (NS-SEC), equivalised household income and area deprivation; the results are published in "Health Survey for England 2001: Fruit and vegetable consumption".

  General Medical Council (Dr. Gbinghie)
  Mr. Gardiner
  To ask the Secretary of State for Health what lessons he has drawn from the ruling by the General Medical Council in the case of Dr. Gbinghie. [105047]

  Ms Blears
  The General Medical Council's (GMC) Professional Conduct Committee has found Dr. Gbinghie guilty of serious professional misconduct and placed conditions on his registration for a period of three years.

  I understand that following publicity of this case, further allegations have been made and that these will be considered by the GMC.

  Under section 29 of the National Health Service Reform and Health Care Professions Act 2002, the newly established Council for the Regulation of Healthcare Professionals, which will become fully operational this year, will in future cases be able to refer a regulatory body's final decision on a fitness to practice case to the High Court where this is necessary for the protection of the public.

  In addition the Commission for Healthcare Improvement and the National Care Standards Commission are responsible for checking that systems are in place to ensure that all staff are trained and experienced in the type of duties they are performing.

  Health and Social Care Act
  Mr. Luff
  To ask the Secretary of State for Health what assessment he has made of the compliance of the consultations being undertaken by the South Worcestershire Primary Care Trust with the requirements of section 11 of the Health and Social Care Act 2001; and if he will make a statement. [107565]

  Mr. Lammy
  None. It would not be appropriate for Ministers to assess or comment upon public consultations while they are ongoing. The Health and Social Care Act gave new powers to the overview and scrutiny committees (OSC) of local authorities to review and scrutinise the development of health services. OSCs have the power to report to the Secretary of State in writing, on any case where the committee is not satisfied 324W
  that consultation on a proposal for substantial developments or variations to services has been adequate in relation to content or time allowed.

  Health Education
  Chris Grayling
  To ask the Secretary of State for Health if he will list the public health education campaigns carried out by his Department in the last 12 months. [106625]

  Ms Blears
  A list of the major public health campaigns run by the Department's Communications Directorate for 2002–03 is shown in the table. Also included is the purpose of each campaign.

  Name of campaign

  Purpose

  Antibiotics

  To encourage the public not to overuse antibiotics and thus reduce their effectiveness

  CALM (Campaign Against Living Miserably)

  To promote the CALM mental health helpline to young men on the onset of depression (certain regions only)

  Flu

  To advise general public that those at risk (people 65 and over and others suffering from specified illnesses) should see their GP for a free flu jab

  Immunisation

  Advertising campaign to inform parents that they could obtain advice about MMR from health professionals and get a free information pack, simply by calling NHS Direct. Ran May to October 2002 in national press. Regional press, parenting press, women's magazines and local radio

  Mind Out

  Campaign to reduce the stigma associated with all those with mental health problems

  NHS Direct

  NHS Direct Older People campaign—ran from w/c 17 June 2002 to end of October 2002. The main objective of the campaign is to increase awareness and usage of NHS Direct amongst 65 to 75-year-olds by 10 per cent. NHS Direct Online campaign—a text link advertising campaign ran throughout 2002–03 aimed at all internet users searching for health information on the web. An internet advertising campaign targeting young men aged 18–34 ran from November 2002 to January 2003 and a campaign targeted at young women aged 18–34 ran from January to March 2003, the aim of both being to raise awareness and usage of the NHS Direct Online website

  Organ donation

  To encourage the everyone to register as an organ donor and to carry an organ donation card

  R U Thinking (teenage pregnancy)

  R U Thinking's target audience is young people (boys and girls) between the ages of 11 and 18. The main purpose of the campaign is to support the teenage pregnancy strategy. The strategy's key aim is to halve the rate of teenage conceptions in England by 2010. The national campaign focuses on the key messages of taking control, choices and personal responsibility

  Sex Lottery (adult sexual health)

  The Sex Lottery's target audience is young adults between the ages of 18 and 30. The main purpose of the campaign is to raise awareness of sexually transmitted infections (STIs) and to provide information to encourage condom usage. The key objective is to reduce rates of STIs amongst the target audience

  Smoking

  The purpose of the Tobacco Information Campaign is to reduce smoking prevalence in England. The campaign's most visible presence is a TV advertising campaign

  325W
  Dr. Fox
  To ask the Secretary of State for Health how much his Department spent on(a) health and (b) diabetes educational materials for schools in each year since 1997. [107732]

  Ms Blears
  The Department does not keep a central record of specific expenditure on educational materials in schools. We support: a variety of programmes and initiatives to enhance and support education about health and healthy living. Alongside the Department for Education and Skills, we jointly fund the national healthy schools programme, which has provided a total of £27 million since it began in 1999. We have also supported a number of good practice booklets for schools and teachers to help them ensure the health and well being of their pupils. Together, these initiatives have an important role in the prevention of many conditions, including diabetes. The Department has not produced education materials exclusively about diabetes.

  Human Sperm Donor Services
  Sandra Gidley
  To ask the Secretary of State for Health (1) if he will make a statement on his Department's arrangements for monitoring companies offering human sperm donor services; [106228]

  (2) what human sperm donor services are not covered by the Human Fertilisation Embryology Authority; and if he will make a statement; [106229]

  (3) what assessment his Department has made of risks facing women who purchase human sperm over the internet. [106230]

  Ms Blears
  The Human Fertilisation and Embryology Act 1990 requires the storage of donor sperm and its use in the provision of fertility treatment services to be carried out under a licence from the Human Fertilisation and Embryology Authority (HFEA). The Act does not cover sperm donor services that provide sperm only, and not treatment, except where the sperm is stored.

  Where the HFEA becomes aware that an organisation in the United Kingdom is offering services that may be covered by the Act, a thorough investigation is made to establish the nature of the service. If licensable, the HFEA will require that activity to cease until such time as a licence may be granted.

  Women wishing to have a child using donor sperm are strongly advised by the HFEA to seek treatment from a licensed clinic, where they can be sure that the services will be provided in a safe and ethical environment. Patients obtaining fresh donor sperm from the internet for personal use, which is not subject to a licence from the HFEA, cannot be sure that the sample has undergone the same rigorous health checks to prevent the risk of transmitting HIV or serious genetics disorders.

  Mental Health
  Tim Loughton
  To ask the Secretary of State for Health pursuant to his answer of 12 March 2003,Official Report, column 343W, on mental health, what
  326W
  involvement the National Patient Safety Agency has had in the last year with serious untoward incidents by mental health patients in mental health trusts. [106551]

  Ms Blears
  The National Patient Safety Agency (NPSA) has already begun collecting and analysing key information on adverse events from local organisations, including reports from a number of mental health trusts, as well as from other sources.

  Following on from piloting of the national reporting and learning system for adverse events in 28 hospitals and primary care units, the reporting system is undergoing further testing and development prior to being implemented across the national health service from summer 2003.

  By collecting and analysing data on adverse events, the agency will be able to identify trends and patterns of avoidable adverse events, including those involving mental health patients, provide feedback to organisations to enable them to change their working practices, help develop models of good practice and systems solutions at national level and support ongoing education and learning.

  The NPSA is also providing training and support to all trusts, to enable them to develop the skills to carry out root cause analysis investigations of serious incidents, such as suicides in mental health patients, to ensure that lessons are learnt.

  Tim Loughton
  To ask the Secretary of State for Health pursuant to his answer of 12 March 2003,Official Report, column 343W, on mental health, how much funding was given to the National Confidential Inquiry into Suicide and Homicide by People with Mental Illness this financial year; and if he will make a statement on the work of the group. [106552]

  Mr. Andrew Smith
  The funding given to the National Confidential Inquiry into Suicide and Homicide (CISH) in the financial year 2002–03 was £444,407. The CISH will publish academic papers based on the findings reported in 'Safety First' and maintain the collection of statistics on suicides and homicides by people with mental health problems across the United Kingdom, explore ways to provide feedback on findings and initiate new studies.

  Mobile Phones
  Mr. Andrew Mitchell
  To ask the Secretary of State for Health what progress the Mobile Telecommunications and Health Research Programme is making; when he expects to receive its first report; and what consideration has been given to including the Wishaw mobile telecommunications mast in Sutton Coldfield in its investigations. [107391]

  Ms Blears
  The LINK mobile telecommunications and health research (MTHR) programme was set up in response to the recommendations of the Stewart report in May 2000, available on www.iegmp.org.uk

  The programme is jointly funded by industry and government to the value of £7.36 million. Decisions on funding are made by an independent programme management committee. The first 15 research projects to be funded under the first call were announced in January 2002. Two further calls for proposals have also

  327W
  been made. Two projects are nearing completion. Researchers are expected to publish in the open literature, and results will be publicised on the programme website. Twice yearly progress reports are presented to the programme funders and in November 2002, the programme ran the first of a series of annual research meetings. Details are published on the programme's website at www.mthr.org.uk

  The projects follow the research recommendations identified in the Stewart report and most relate to the use of mobile phones handsets. However, in practice many of the experimental studies will also be valuable in providing evidence on any possible effects on people of exposures from mobile phone masts. The programme includes a recently announced epidemiological study on the incidence of cancer around mobile phone base stations. The third call, issued in December 2002, included a request for proposals, which will examine the basis of symptoms attributed to exposure from base station emissions.

  The Radiocommunications Agency "audit" of mobile phone mast emissions shows that the maximum measurements taken at Wishaw Riding School was 1/13623 of the ICNIRP exposure guideline levels—www.radio.gov.uk

  Nurses (Buckinghamshire)
  Mr. Bercow
  To ask the Secretary of State for Health (1) how many nurses are employed in each of the hospitals located in the Buckinghamshire Health Authority; [106990]

  (2) how many nursing vacancies there are in the Buckinghamshire Health Authority area; and what the average figure is for each hospital trust. [106989]

  Ms Blears
  The number of nursing vacancies in the Buckinghamshire Health Authority Area is shown in table 1.

  Table 1. Department of Health Vacancies Survey, March 2002—Vacancies in NHS Trusts in the Buckinghamshire Health Authority area, by organisation, qualified nursing, midwifery and health visiting staff three month vacancy rates and numbers

  Qualified nursing, midwifery and health visiting staff—March 2002

  Three month vacancy rate (percentage)

  Three month vacancy number

  Buckinghamshire HA

  4.7

  135

  Buckinghamshire HA

  —

  —

  Buckinghamshire Mental Health NHS Trust

  0.7

  2

  Milton Keynes General Hospital NHS Trust

  7.8

  49

  Milton Keynes PCT

  2.8

  7

  South Buckinghamshire NHS Trust

  4.8

  40

  Stoke Mandeville Hospital NHS Trust

  5.9

  36

  Two Shires Ambulance NHS Trust

  0.0

  0

  Vale of Aylesbury PCT

  0.9

  2

  Three month vacancy notes:

  1. Three month vacancy information is as at 31 March 2002.

  2. Three month vacancies are vacancies which Trusts are actively trying to fill, which had lasted for three months or more (whole time equivalents).

  3. Three month Vacancy Rates are three month vacancies expressed as a percentage of three month vacancies plus staff in post.
  328W
  4. Three month Vacancy Rates for non-medical staff are calculated using staff in post from the Vacancy Survey, March 2002.

  5. Percentages are rounded to one decimal place.

  6. Not available as vacancy information was only collected from Trusts, PCTs and Special Health Authorities.

  General notes:

  1. Vacancy numbers are rounded to the nearest whole number.

  2. Due to rounding, totals may not equal the sum of component parts.

  3. HA figures are based on Trusts, and do not necessarily reflect the geographical provision of healthcare.

  Source:

  Department of Health Vacancies Survey, March 2002

  The information for the number of nurses employed in each of the hospitals located in the Buckinghamshire Health Authority area is not collected centrally at individual hospital level. However, this information is shown by trust and primary care trust (PCT) in table 2.

  Table 2. Number of qualified nursing, midwifery and health visiting staff in the Buckinghamshire area, by organisation as at 30 September 2001

  Qualified nursing, midwifery and health visiting staff—September 2001

  Whole-time equivalent

  Headcount

  Buckinghamshire HA

  2,824

  3,859

  Buckinghamshire HA

  1—

  1—

  Buckinghamshire Mental Health NHS Trust

  344

  401

  Milton Keynes General Hospital NHS Trust

  564

  818

  Milton Keynes PCT

  310

  377

  South Buckinghamshire NHS Trust

  783

  1,090

  Stoke Mandeville Hospital NHS Trust

  547

  750

  Two Shires Ambulance NHS Trust

  54

  70

  Vale of Aylesbury PCT

  222

  351

  1 Five or less and greater than zero.

  Notes:

  1. Figures are rounded to the nearest whole number.

  2. Due to rounding, totals may not equal the sum of component parts.

  3. Due to rounding, totals may not equal the sum of component parts.

  4. HA figures are based on Trusts, and do not necessarily reflect the geographical provision of healthcare.

  Source:

  Department of Health Non-Medical Workforce Census, September 2001.

  Poster 31166
  Mrs. Gillan
  To ask the Secretary of State for Health if he will withdraw poster 31166-Where to find resources. [107190]

  Ms Blears
  The Department has no plans to withdraw poster 31166 and would have no reason to do so.

  Public Health Laboratory Service
  Mr. Drew
  To ask the Secretary of State for Health what proposals he has to secure funding for the Public Health Laboratory Service after its re-structuring in April; and what plans he has to secure employment prospects for all staff employed by the Public Health Laboratory Service after the re-structuring. [105902]
  329W
  Ms Blears
  [holding answer 1 April 2003]As of 1 April, the Public Health Laboratory Service (PHLS) is responsible for producing culture media for microbiology laboratories in the Health Protection Agency (HPA) and some parts of the national health service. The funding for this will come mainly from the purchase of media by the NHS and the HPA, plus some central funding from the Department. The NHS and the HPA have been asked by the Chief Executive of the NHS to continue utilising this media service at existing levels in order to protect the continuity of supply and ensure stability.

  The staff of the four units where this function is carried out remain employees of the PHLS. The employment prospects of all the staff involved will be protected by the change management protocol, which applied to those staff transferring from the PHLS to the HPA or to NHS trusts. An early review of media services is planned which is expected to make recommendations for the longer term.

  Rubella
  Dr. Fox
  To ask the Secretary of State for Health how many cases of rubella were recorded in(a) London and (b) England in each year since 1997. [107726]

  Ms Blears
  The number of confirmed cases of rubella in England and London between 1997 and 2002 is shown in the table. The data for 2002 is provisional and are therefore subject to change.

  Laboratory confirmed cases of rubella, 1997–2002.

  England

  London

  1997

  94

  5

  1998

  120

  5

  1999

  158

  4

  2000

  59

  11

  2001

  38

  12

  2002 (provisional)

  63

  20

  Severe Acute Respiratory Syndrome
  Mr. Bercow
  To ask the Secretary of State for Health how many deaths in the United Kingdom have resulted from severe acute respiratory syndrome. [107928]

  Ms Blears
  There have been no deaths in the United Kingdom from severe acute respiratory syndrome (SARS).

  Skin Cancer
  Mrs. Gillan
  To ask the Secretary of State for Health how many clinical nurse specialists in skin cancer there were on(a) 1 January 2002, (b) 1 July 2002 and (c) 1 January 2003. [107848]

  Ms Blears
  [holding answer 8 April 2003]: The information requested is not collected centrally. The non-medical workforce census collects information annually on the number of nurses employed in the National Health Service as at 30 September each year, but can not distinguish those who are clinical nurse specialists in skin cancer.
  330W

  Smoking
  Chris Grayling
  To ask the Secretary of State for Health what action his Department has taken following the publication by the Schools Health Education Unit of its report into trends in young people's attitudes to smoking. [106623]

  Ms Blears
  The surveys carried out by the schools health education unit are not based upon representative samples; therefore the results and any assertions about trends should be treated with caution.

  The 1998 White Paper, "Smoking Kills", set a target to reduce smoking among 11–15 year olds from 13 per cent., to 9 per cent., by 2010 with a fall to 11 per cent., by 2005. Progress towards this target is monitored by a series of surveys of schoolchildren carried out on behalf of the Department of Health, originally by the Office of Population Censuses and Surveys and since 2000 by the National Centre for Social Research and National Foundation for Educational Research.

  The methodology in sample selection used in the schools health education unit survey does not allow a direct comparison with the Department of Health commissioned data.

  The Government is on course to meet the White Paper "Smoking Kills" target Smoking prevalence has remained unchanged since 2000 at 10 per cent., which is well below the 1996 level of 13 per cent. Nevertheless, the Government is taking positive action to tackle teenage smoking, such as:
  the Tobacco Advertising and Promotion Act 2002 provided a ban on advertising: the cigarettes smoked most by children are also those most heavily advertised.
  tough enforcement on under-age sales; on 13 September 2000 the Government launched an Enforcement Protocol with local authorities to ensure that the existing legislation on under-age sales is properly enforced.
  support for proof of age card schemes which protect shopkeepers and children alike.
  tougher new restrictions on siting of cigarette vending machines. public awareness media campaigns.
  fiscal policy: the high price of cigarettes is a particular disincentive for young people.

  Chris Grayling
  To ask the Secretary of State for Health what assessment he has made of the link between parental smoking and children taking up smoking. [106624]

  Ms Blears
  The independent Scientific Committee on Tobacco and Health, in its 1998 report, concluded that an enquiry from the Office of Population Censuses and Surveys' (commissioned by the Department of Health) showed that: young people whose parents smoke are twice as likely to smoke as children of non-smoking parents; and that young people who perceive no parental disapproval are seven times more likely to smoke than young people who perceive strong parental disapproval. A Royal College of Physicians working party report2 showed that prevalence of smoking among young people is higher in those living with a single parent and is higher still if the lone parent is a smoker.

  1 "Why Children Start Smoking". An enquiry carried out by Social Survey Division of OPCS on behalf of the Department of Health HMSO London 1990.
  2"Smoking and the Young". A Report of a Working Party of the Royal College of Physicians London 1992.
  331W
  Chris Grayling
  To ask the Secretary of State for Health how many anti-smoking clinics have been set up in the NHS; and how many he expects to be opened in the next 12 months. [106632]

  Ms Blears
  The information collected centrally about smoking cessation services does not include the number and type of services in each primary care trust (PCT), as this is a matter for local decision.

  National targets are set for the number of four-week quitters to be achieved; and each PCT is responsible for commissioning smoking cessation services to meet the needs of its resident population. Services are provided in a range of settings depending on local circumstances and needs. They include hospital or general practitioner-based clinics, where smokers receive group therapy, and one-to-one services in primary care and in the community.

  The results of the services show that they have been very successful, with nearly 55,000 smokers successfully quitting between April and September 2002. We expect a substantial increase in the provision of smoking cessation services over the next 12 months as a result of our target for the National Health Service to achieve 800,000 smokers successfully quitting at the four-week stage between 2003–04 and 2005–06. Substantial extra resources, totalling £138 million over the next three years, have been made available to the NHS for this purpose.

  Further details on the performance of the NHS smoking cessation service are contained in the Department of Health Statistical Bulletin 2002/25: Statistics on smoking cessation services in England, April 2001 to March 2002, available at http://ww.doh.gov.uk/public/sb0225.pdf and SH statistical press release 2003/0073.

  Statistics on smoking cessation services in England, April to September 2002, are available at http://www. info.doh.qov.uk/dohIntPress.nsf/page/ 2003–0073/OpenDocument

  Mr. Randall
  To ask the Secretary of State for Health what targets are in place for reduction of tobacco smoking. [106515]

  Ms Blears
  The White Paper, Smoking Kills, published in 1998, set out the following targets for the reduction in prevalence of tobacco smoking:To reduce smoking among children from 13 per cent. the 1996 figure, to 11 per cent. by 2005 and 9 per cent. by 2010.
  To reduce adult smoking in all social classes so that the overall rates falls from 28 per cent. the 1996 figure, to 26 per cent. by 2005 and 24 per cent, by 2010.
  To reduce the percentage of women who smoke during pregnancy from 23 per cent. the 1995 figure, to 18 per cent. by 2005 and 15 per cent. by 2010.
  The NHS Cancer Plan, published in September 2000, set the additional target that smoking rates among manual groups be reduced from 32 per cent. in 1998 to 26 per cent, by 2010.
  The Priorities and Planning Framework (PPF), published on 2 October 2002—see http://www doh.gov.uk/planning2003–2006/index.htm—set out the priorities for the next three years for the National Health Service and social services and
  332W
  described what local organisations and communities need to do to plan for and implement the improvements. Three specific smoking targets were identified:

  In the Cancer section:

  "Reduce the rate of smoking, contributing to the national target of: reducing the rate in manual groups from 32 per cent. in 1998 to 26 per cent. by 2010; 800,000 smokers from all groups successfully quitting at the four week stage by 2006". The 800,000 target is for delivery through the NHS stop smoking (cessation) service.

  In the Reducing Health Inequalities section:

  "Deliver a one percentage point reduction per year in the proportion of women continuing to smoke throughout pregnancy, focussing especially on smokers from disadvantaged groups as a contribution to the national target to reduce by at least 10 per cent. the gap in mortality between 'routine and manual' groups and the population as a whole by 2010, starting with children under one year."

  In the Coronary Heart Disease (CHD) section:

  "In primary care, update practice-based-registers so that patients with CHD and diabetes continue to receive appropriate advice and treatment in line with national service framework (NSF) standards and by March 2006, ensure practice based registers and systematic treatment regimes, including appropriate advice on diet, physical activity and smoking, also cover the majority of patients at: high risk of CHD, particular those with hypertension, diabetes and a body mass index (BMI) greater than 30".

  Guidance to assist local planners in achieving the PPF targets was issued on 14 November and can be found at www.doh.qov.uk/Idp2003–2006.

  Statutory Instruments
  Mr. Bercow
  To ask the Secretary of State for Health if he will list the statutory instruments issued by his Department in the last 12 months, indicating(a) the purpose of each and (b) the cost of each to (i) public funds, (ii) businesses and (iii) individuals. [106327]

  Mr. Lammy
  The number of statutory instruments issued by the Department of Health between 1 April 2002 and 31 March 2003 was 182. These include Orders in Council.

  The purpose of each statutory instrument is outlined in its explanatory note. Where a statutory instrument imposes costs to public funds, local businesses and individuals, a regulatory impact assessment is prepared and placed in the Library.

  Teenagers
  Mr. Amess
  To ask the Secretary of State for Health what plans the Government has to designate teenagers as a specific group for the collection of health statistics. [107706]

  Ms Blears
  The Government have no plans to designate teenagers in this way. Where practicable, relevant and justified, statistical collections include information on the date of birth or age of patients or other statistical subjects. These permit analysis by
  333W
  different age groups of interest. In other areas, the data collected may include analysis by age groups that are relevant for policy, legal or other reasons to the subject matter of the statistics, and these may cover partly or wholly the 13 to 19 age group.

  Mr. Amess
  To ask the Secretary of State for Health how many teenagers with cancer in Southend West are treated in wards for older people. [107704]

  Mr. Lammy
  No statistics are available centrally which allow distinction between adult and children's wards.

  Mr. Amess
  To ask the Secretary of State for Health what steps Southend Primary Care Trust is taking to tackle(a) late diagnosis and (b) mis-diagnosis of teenagers with cancer. [107705]

  Mr. Lammy
  Southend Primary Care Trust board regularly reviews two week cancer waiting times as part of their review of performance indicators. Audit systems are in place for the treatment of cancer patients at the acute trust.

  Tobacco Advertising
  Tim Loughton
  To ask the Secretary of State for Health what discussions he has had with(a) the Office of the Deputy Prime Minister and (b) tobacco companies concerning the removal of billboard tobacco advertising. [106559]

  Ms Blears
  No specific discussions have taken place with the Office of the Deputy Prime Minister or the tobacco companies concerning the removal of billboard advertising. The Department of Health published its consultation document on the regulations to the Tobacco Advertising and Promotion Act 2002 with provisions concerning the removal of billboard advertising and a risk impact assessment. The consultation exercise ran from 22 August 2002 to 15 November 2002, which included the tobacco companies. A copy of the consultation document is available in the Library.

  Waiting Lists/Times
  Mr. Bercow
  To ask the Secretary of State for Health how many patients in the Buckinghamshire Health Authority area waited more than(a) three months, (b) six months, (c) nine months, (d) 12 months, (e) 15 months, (f) 18 months and (g) 24 months for (i) heart operations, (ii) cancer treatment and (iii) hip replacements in 2001–2. [106955]

  Ms Blears
  The information for the number of patients who waited for heart operations, cancer treatment and hip replacements in 2001–02 is shown in the table. It shows the cumulative figures on hip replacement operations or heart operations and procedures and primary diagnosis of cancer (neoplasms), count of finished in year admission episodes, admissions from waiting list and booked cases by waiting time group in National Health Service hospitals, Buckinghamshire Health Authority 2001–02.
  334W

  Waiting time group

  Heart Operations

  Hip replacements

  Cancer treatment (neoplasms)

  More than three months

  1

  369

  343

  More than six months

  0

  290

  258

  More than nine months

  0

  201

  175

  More than 12 months

  0

  140

  120

  More than 15 months

  0

  66

  57

  More than 18 months

  0

  27

  21

  More than 24 months

  0

  9

  8

  1 Due to reasons of confidentiality, figures below five have been suppressed.

  Note:

  HES data include suspended patient waits.

  Source:

  Hospital Episode Statistics (HES), Department of Health.

  Mr. Soames
  To ask the Secretary of State for Health 'what percentage of patients waited over four hours in accident and emergency departments in each West Sussex hospital in each of the last four years. [107593]

  Ms Blears
  [holding answer 7 April 2003]Information on the total time spent in accident and emergency (A&E) AS not collected for individual A&E departments. Information on the total time spent in A&E for each national health service trust has been collected and published since July 2002 on the Department of Health website at http://www.doh.gov.uk/hospitalactivity.

WORK AND PENSIONS

  Benefit Fraud
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions what mechanisms have been put in place by his Department to identify second and further convictions for benefit fraud. [107006]

  Malcolm Wicks
  Following the implementation of the 'two-strikes' provision of the Social Security Fraud Act 2001, we have set up a special database to identify and track people prosecuted for benefit fraud more than once after 1 April 2002.

  Benefits (Verification Compliance)
  Norman Lamb
  To ask the Secretary of State for Work and Pensions (1) if he will make a statement on verification framework compliance by housing benefit departments of local authorities; [107104]

  (2)if he will snake a statement on the success of the local authority verification framework compliance procedure in tackling housing benefit fraud; [107105]

  (3) how many housing benefit departments of local authorities are now verification framework compliant; and how many have not achieved verification framework compliance; [107106]

  (4) if he will make a statement on the additional resources made available by the Government to assist in making local authority housing benefit departments verification framework compliant; [107107]

  (5) whether his Department plans to commit ring-fenced funding to local authority housing benefit departments for (a) IT and administrative support and
  335W
  (b) document imaging systems as a result of the demands created by the requirement for verification framework compliance; [107108]

  (6) whether his Department plans to extend the requirement for verification framework compliance to other providers of benefits. [107109]

  Mr. Willetts
  To ask the Secretary of State for Work and Pensions how many local authorities have not implemented the Verification Framework for housing benefit. [107416]

  Malcolm Wicks
  A total of 327 local authorities have taken up the Verification Framework (VF) so far. They include those who are fully compliant, those who have taken up one or two modules and those who are in the process of implementation. To date, 81 local authorities have not applied to take up VF.

  At present 74 per cent. of housing benefit expenditure is processed through VF. We aim to have 100 per cent. of housing benefit expenditure processed through VF by 2006.

  We are developing a more targeted method of identifying high-risk cases for VF interventions. This will replace the routine checking that is currently carried out on all claims as a matter of course when a claim reaches the end of its benefit period. We want local authorities' efforts to focus on more cost-effective activities and therefore we expect the VF to become more attractive.

  Management information returns indicate that local authorities who operate VF procedures identify 6 per cent. of new claims as being fraudulent or in error and identify in 5 per cent. of renewal claims and at 5 per cent of VF visits an actual or potential overpayment. It is not possible to measure directly how much of this incorrectness would have been found had the local authorities hot been VF compliant.

  The Departmental funding for VF is in the form of a one-off payment for set-up costs and on-going funding for the running of the scheme. The set-up cost is intended for costs incurred in the implementation phase and would cover such areas as training, IT changes, staff recruitment, etc. Each local authority's capacity to implement the scheme would dictate how they would need to spend the set-up costs and it is left to their judgment. Purchase of document imaging systems would be one of their options. The funding is not ring-fenced but conditional upon the local authority delivering the specified outcomes.

  A total of £223 million is available for the VF scheme for three years from April 2003. This represents a 50 per cent. increase on the 2002–03 allocation for set-up costs and on-going funding. This is the biggest increase since the VF was introduced and will help to increase take-up even further.

  The VF was designed specifically for use by local authorities. However, there are already procedures in place to check evidence for other DWP benefit claims.
  336W

  Local Authority Software
  Sir Archy Kirkwood
  To ask the Secretary of State for Work and Pensions which local authorities do not have electronic interfaces with(a) the Pension Service and (b) Jobcentre Plus. [106648]

  Maria Eagle
  Electronic access between local authorities and the Pension Service and Jobcentre Plus is available through remote access terminals. Remote access terminals provide a simple, inexpensive system that greatly speeds up the transfer of information between the Department and local authorities.

  All authorities have access to remote access terminals, with the exception of the Council of the Isles of Scilly, where the housing benefit case load is so small (around 50 cases at August 2002) that it would not be financially viable to invest in the enhanced technology.

  Winter Fuel Payment
  Mr. Willetts
  To ask the Secretary of State for Work and Pensions pursuant to his answer of 24 Febuary 2003 to the hon. Member for Birmingham, Selly Oak (Lynne Jones),Official Report, column 204W, how much he estimates the winter fuel payment will cost in total in 2001–02 prices in (a) 2011–12, (b) 2021–22 and (b) 2051–52, based on the modelling assumption used in the pensions Green Paper that the benefit remains at £200. [107518]

  Maria Eagle
  The information requested is provided in the table.

  Projected expenditure on winter fuel payments

  £ million, 2001–02 prices

  Year

  Projected expenditure on WFPs

  2011–12

  1,516

  2021–22

  1,351

  2051–52

  759

  Note:

  1. Figures rounded to the nearest £1 million.

  Source:

  Long term projections used in the Long term Public Finance Report: an a analysis of fiscal sustainability, HM Treasury, November 2002 and the DWP Green Paper "Simplicity, security and choice" (Annex 3).

LORD CHANCELLOR'S DEPARTMENT

  Antisocial Behaviour Orders
  Dr. Stoate
  To ask the Parliamentary Secretary, Lord Chancellor's Department what measures she is taking to speed up the anti-social behaviour order (ASBO) application process; what proportion of ASBO cases in(a) 2001 and (b) 2002 required (i) one court hearing, (ii) two court hearings and (iii) three or more court hearings to reach a decision; and what steps she is taking to reduce the number of court hearings required in ASBO cases. [105371]

  Yvette Cooper
  Changes to ASBOs, which help speed up the application process, were made under the Police Reform Act 2002. These were accompanied by guidance to all practitioners and the courts. This advises specifically that adjournments should he avoided unless
  337W
  absolutely necessary; and that in order to minimise delays, courts should be forewarned of applications. Courts are being encouraged to consider rigorously requests for adjournments (whilst always acting in the interests of justice), and to use pre-trial reviews in appropriate cases. Figures were only collected for the first time in 2001 and the figures for 2001 are incomplete. In 2001, for 32 per cent. of ASB0 cases it was not known how many hearings they took. 10.5 per cent of ASBO cases were recorded as requiring one court hearing; 15.0 per cent. two court hearings; and 42.5 per cent three or more court hearings in order to determine the application. Up to 30 September 2002, the corresponding figures are 2.25 per cent. not known, 16.25 per cent. for one hearing, 22.50 per cent. for two hearings; and 59.0 per cent. for three or more court hearings.

  As set out in the recent White Paper on anti-social behaviour—"Respect and Responsibility" we are taking steps in the Anti-Social Behaviour Bill to improve further the operation of Anti-Social Behaviour Orders which remain a valuable tool in tackling anti-social behaviour. For instance. Housing Actions Trusts will be able to apply for ASBOs to protect persons who reside in or are in the vicinity of their premises, instead of having to rely on other authorities to seek ASBOs on their behalf. It will also be possible for relevant persons to be joined to proceedings in the County Court with a view to obtaining an ASBO against them where their anti-social behaviour is material to these proceedings. This would enable courts to make more effective use of time by removing the need for a separate hearing for an ASBO.

  Legal Aid
  Mr. Jim Cunningham
  To ask the Parliamentary Secretary, Lord Chancellor's Department what assessment her Department has made of legal aid provision in other EU states; and what lessons have been drawn from these assessments. [106872]

  Ms Rosie Winterton
  [holding answer 8 April 2003]While no formal assessment has been made of legal aid provision in the different legal systems of other European Union states, we work closely with our EU partners to ensure co-operation and information with regard to legal aid policy.

  Legal Services
  Mr. Jim Cunningham
  To ask the Parliamentary Secretary, Lord Chancellor's Department what steps the Department is taking to ensure the future effective delivery of legal services to all sectors of society. [106873]

  Ms Rosie Winterton
  [holding answer 8 April 2003]My Department continues to support the Legal Services Commission in developing the Community Legal Service (CLS). The CLS ensures that publicly funded legal services are targeted more effectively at areas of priority need. Initiatives such as the Methods of Delivery Pilots and the Partnership Initiative Budget are also leading to the development of new and innovative approaches to service delivery.
  338W
  The Government are also committed to the removal of restrictive practices, and is currently considering responses to the consultation exercise on those issues that stemmed from the Office of Fair Trading's report on competition in. professions. The removal of restrictive practices, which cannot be justified in the public interest, could provide an incentive for lawyers to provide innovative, high quality and affordable services to the public.

  Mr. Malins
  To ask the Parliamentary Secretary, Lord Chancellor's Department, what percentage salary increase was awarded to the staff of the Legal Services Commission, broken down by grade, in(a) 2000–01 and (b) 2001–02. [98645]

  Ms Rosie Winterton
  [holding answer 25 February 2003]Salary increases awarded to the staff of the Legal Services Commission are determined by a pay remit which is approved by my Department and HM Treasury.

  In 2000/01 and 2001/02 salary increases to the Commission's staff were based on performance and their existing position in the Commission's pay bands and not grade.

  The Commission's pay bands are constructed around a market rate (median) that has been established following a comprehensive job evaluation exercise carried out by the Commission in conjunction with HayGroup. The Commission sub-divides the pay bands into three: training (the bottom third of the scale); fully effective (the middle third of the scale) and a bar beyond which only those who achieve sustained superior performance can progress (the upper third of the scale).

  The following table sets out the percentage of staff within each performance rating and the average salary increase. To provide more detailed information can be done only at a disproportionate cost.

  Percentage

  Performance rating

  Staff within performance rating

  Average salary increase

  2000–01

  Outstanding

  7.4

  7.5

  Very good

  32.9

  5.3

  Effective

  53.9

  3.7

  Not fully effective

  2.3

  2.5

  Unsatisfactory

  3.5

  0.7

  2001–02

  Outstanding

  8.3

  6.9

  Very good

  35.8

  5.0

  Effective

  49.6

  3.5

  Not fully effective

  3.0

  2.2

  Unsatisfactory

  3.3

  0.1

  EU Directives
  Mr. John Bercow
  To ask the Parliamentary Secretary, Lord Chancellor's Department if she will list the EU Directives and Regulations which have been implemented by the Lord Chancellor's Department since 17 April 2002. [106833]

  Ms Rosie Winterton
  The Lord Chancellor's Department plays a leading role in the UK's EU policy on civil judicial co-operation, human rights and data
  339W
  protection. Nonetheless I am not aware of any Directives on which the Foreign and Commonwealth Office has led on implementation since 17 April 2002.

  EC Regulations are, in general, directly applicable in the member states, without the need for further incorporation into national law. However, some
  340W
  Regulations require UK measures to make them workable and enforceable. Some Regulations enact small or technical amendments. I am not aware of any Regulations on which the Lord Chancellor's Department has led on implementation since 17 April 2002.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Over-30-Month Scheme
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley)
  In 1996 at the height of the BSE crisis the then Government and European partners introduced a raft of measures aimed at protecting public health, supporting the market and restoring consumer confidence in beef.

  The OTMS was introduced to provide an outlet for cattle affected by the over-30-month rule which bans beef from cattle more than 30 months old from being sold for human consumption. It is operated under EU Regulation 716/96 and farmers are paid for animals more than 30 months old which are slaughtered and destroyed. The Scheme costs around £400 million a year, and more than £3.2 billion has been spent on it since 1996.

  The over-30-month rule is currently being reviewed by the Food Standards Agency; although no decisions have been taken, it is possible that the review will lead to changes and that beef from older cattle will again be available for human consumption, subject to testing negative for BSE.

  This possibility offers exciting new challenges and opportunities for the UK beef industry. It has led the Government to take a number of strategic actions to assist the industry in preparing for an orderly return to more normal market conditions.

  Our officials asked the European Commission to reduce the rates paid to farmers for animals entering the OTMS. On 28 March the EU Beef Management Committee unanimously agreed a proposal by the European Commission. The rates for cows will fall by 20 per cent. and the rate for steers, heifers and bulls by 8 per cent. The new rates, which reflect changes to market prices elsewhere in the EU since 1997, are 0.64 euros per kg liveweight for cows and 0.83 euros per kg liveweight for other animals.

  The new rates will come into effect on 28 April and will apply to all animals slaughtered from that date. This action will ensure that taxpayers do not pay farmers prices well above the level that they could expect to get on the market and will help discourage the entry of cattle which may be slaughtered for beef following any changes to the rule.

  Our officials are setting up a core stakeholders group to explore with the industry the way forward if the rule is changed. They will be talking to the European Commission about how any disruption to the beef market can be minimised and any further changes to the Scheme that may be required.
  20WS
  The UK currently imports 30 per cent. or around 290,000 tonnes of its domestic beef requirement. Changes to the rule are expected to allow large quantities of cow beef for manufacturing and some prime beef for retail use onto the domestic market which will assist in reducing the import requirement and increasing the availability of both prime quality and cow beef for export. In order to capitalise on these increased supplies for export and to minimise domestic market distortion, my officials have alerted the European Commission to our intention to seek a change to the 30 month limit in the Date Based Export Scheme (DBES), in line with any change to the over thirty month rule.

  Our officials are also working with stakeholders to ensure that effective arrangements for BSE testing and removal of vertebral column will be in place.

  South Downs National Park
  The Minister for Rural Affairs and Urban Quality of Life (Alun Michael)
  In April 2000, the Countryside Agency decided that the South Downs met the criteria for a National Park. The Agency consulted widely on proposals for a National Park before making a Designation Order on 18 December 2002. The Agency submitted the Order to the Secretary of State on 4 February 2003 and placed it on public deposit from 27 January 2003 to 28 February 2003. As a result, around 5,000 objections and representations, including many expressions of support, have been received. The National Parks and Access to the Countryside Act 1949 requires an inquiry be held into a Designation Order if a local authority has objected and the objection is not withdrawn. Several local authorities have made objections and, so far, have not withdrawn them. Consequently, a local inquiry will be called.

  A letter is being sent to all those who have made objections or representations advising them of the intention to hold an inquiry and what the scope will be. A copy will be placed in the library of the House. The inquiry is expected to start towards the end of this year. In the period up to its start, the Countryside Agency will negotiate with objectors to see if their concerns can be overcome, enabling them to withdraw their objections.

  The Countryside Agency has also advised that a National Park Authority should be established for the South Downs so the inquiry will hear representations on that related issue. Objections will also be heard into the Countryside Agency's Orders to revoke the designations of the Sussex Downs Area of Outstanding Natural Beauty and the East Hampshire Area of Outstanding Natural Beauty. These areas will largely be contained in the South Downs National Park, if the Designation Order is confirmed, and the proposed de-designation is consequent on the proposal to establish a National Park.

NORTHERN IRELAND

  Antrim-Lisburn Railway Line
  The Parliamentary Under-Secretary of State for Northern Ireland (Angela Smith)
  Following a formal submission under Section 60(2) of the Transport Act (Northern Ireland) 1967 from Northern Ireland
  21WS
  Railways, I have decided to give my consent to the discontinuance of rail services on the Antrim-Lisburn railway line in Northern Ireland. I will be informing Northern Ireland Railways forthwith. I am placing a memorandum setting out the background to this decision in the House of Commons Library, the House of Lords Library and the Northern Ireland Assembly Library.

  I should make it clear that this statement relates to the branch line running from Antrim via Crumlin, Glenavy, Ballinderry and Knockmore on to Lisburn. There will continue to be rail services between Antrim and Lisburn via Belfast. The future of services on this line has been under review for some considerable time. I have given this matter careful consideration. I have reached my decision against a backdrop of other competing transportation priorities in Northern Ireland, taking into account financial feasibility, value for money and wider social and economic considerations. The need for services on this line has been assessed according to future population growth and the condition of the existing infrastructure and rolling stock requirements. Translink (the public transport operating group in Northern Ireland) have estimated that to retain regular services on this line would require track maintenance costs of £565,000 per annum and in due course a sum of £13 million to modernise the line. These costs, in addition to the allocation of rolling stock, cannot be justified, at least for the foreseeable future.

  Services on the line have been reduced since June 2001. Prior to this, there were 11 train services each way on weekdays, 9 on Saturdays and 3 on Sundays. Even when full services operated on the line less than 160 passenger journeys per day originated or terminated at stations on the line. In 1998–99 the passenger activity on this line accounted for 0.82 per cent. of the total usage of the Northern Ireland Railway network. Translink estimate that the current average patronage level is in the region of 70 passenger journeys per day.

  Services will, therefore, be discontinued from June 2003 onwards. However, I am approaching this matter in the following manner:
  abandonment of the line is not being considered at this stage;
  the line will be maintained to a standard that will enable trains to use it in emergency circumstances, albeit under strict safety rules and speed restrictions. This arrangement will be reviewed after one year of operation to ascertain the actual usage of the line for diversionary purposes. The review will consider the full range of options for the future usage of the line at this stage;
  Translink is committed to consult proactively with local people affected by the discontinuance of services to ensure that bus substitution and regular bus services are integrated with the aim of providing enhanced bus services; and
  the possibility of the line being modernised to become part of a Belfast-Lisburn-Antrim-Belfast passenger circle line, as envisaged in the "Regional Development Strategy for Northern Ireland 2025", remains a longer-term possibility. This would depend on there being a robust financial, economic, social and transportation case showing it to be a worthwhile use of resources, and on the agreement of the Executive that it was an affordable priority within a future Budget.
  22WS
  In reaching this decision I was fully cognizant of the importance which the Northern Ireland Assembly accorded to improving public transport in Northern Ireland, manifested in the Assembly's approval of the strategic direction and underlying principles of the "Regional Transportation Strategy for Northern Ireland 2002–12" last July. I am fully committed to the development of public transport in Northern Ireland. In the December 2002 Budget, an extra £40 million was allocated for the bus replacement programme over the next 3 years, and an extra £40 million has been allocated for the ongoing modernisation of the core railway network in Northern Ireland over the same period. 'These allocations are over and above the resources already allocated for the purchase of new trains and for rail safety.

  However, significant challenges lie ahead if we are to provide quality and frequently used bus and rail services, and to tackle the wider transportation challenges in Northern Ireland. This will inevitably lead to difficult choices about priorities, and the requirement is to target investment where the value for money and transportation outturns can be fully justified.

  I acknowledge that the discontinuance of services on the Antrim-Lisburn line will be disappointing to communities serviced by the line. However, the cost of maintaining the services could not be justified, given the very low level of passenger usage; and bus substitution services will be made available by Translink. Getting the balance right between competing transportation priorities is a challenge for all of us.

  Discretionary Social Fund
  The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Desmond Browne)
  I am pleased to announce that the Northern Ireland Discretionary Social Fund budget for 2003–04 will be £56.60 million; £11.7 million will be allocated to grants; £44.80 million to loans and £0.1 million will be held as a contingency reserve. The new allocations represent an increase of £5.6 million over the initial gross budget set at April 2002. This increase will be funded through higher loan recoveries, plus an increase in net treasury funding of £1.88 million for this year. The £1.88 million is the first of three annual increases from a £8.2 million boost for the discretionary Social Fund announced in the Autumn 2002 pre-budget Report.

  The Community Care Grant budget has been increased by £0.94 million to £11.7 million. This will provide more help to customers, in particular families with children and the disabled.

  The loans budget has been increased to £44.8 million, an increase of £4.66 million on the initial 2002–03 loans budget. To improve the fairness of the scheme, budgets will be allocated in a way that will over time achieve greater consistency of outcome for customers wherever they live.

  Details of the individual District budget allocations, together with a note explaining the basis on which they

  23WS
  have been made, have been placed in the House of Commons Library today.

TREASURY

  Debt and Reserves Management Report
  The Financial Secretary to the Treasury (Ruth Kelly)
  I am pleased to announce that the Debt and Reserves Management Report 2003–04 is being published today.

  Copies are available in the Library of the House.

LORD CHANCELLOR

  Children and Family Court
  The Parliamentary Secretary, Lord Chancellor's Department (Ms Rosie Winterton)
  I am pleased to announce that the Children and Family Court Advisory and Support Service (CAFCASS) has published its Corporate Plan for 2003 to 2006. The Plan contains details of CAFCASS's Key Performance targets set by my Right Honourable and Noble Friend, the Lord Chancellor. These targets are set out below:In public law no less than 80 per cent. of cases should be allocated within 7 days.
  In private law cases at least 95 per cent. of requests in the month should be allocated 10 weeks before the filing date.
  Carry out during 2003–04 a customer satisfaction survey to inform the development of a service improvement action plan.
  All new recruits to have received induction training within 16 weeks of joining.
  Sickness absence rate of no higher than 5 per cent. (equivalent to 12 days per person per annum).
  Manage our funding to live within, subject to a 1 per cent. tolerance limit, our resource allocation.
  During 2003–04 develop a demonstrably robust methodology for calculating unit costs and assess the baseline position, to inform specific key performance indicators from 2004–05.

  Copies of the Corporate Plan have been placed in the libraries of both Houses. Further copies of the Corporate Plan may be obtained from CAFCASS.

HOME DEPARTMENT

  Rehabilitation Offenders
  The Parliamentary Under-Secretary of State for the Home Department (Hilary Benn)
  The report of the review of the Rehabilitation of Offenders Act 1974, Breaking the Circle, was published in July 2002 The comments of consultees have now been fully considered and the Government's response is published today. Copies of the response have been placed in the Library.

FOREIGN AND COMMONWEALTH AFFAIRS

  Dual-Use Exports (Zimbabwe)
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  24WS
  The Government have approved the export to Zimbabwe of a Travelling Wave Tube (TWT) which has been repaired in the UK. A TWT is radar equipment used for air traffic control.

  The export licence was initially rejected because the TWT appeared on the military list. Its export would therefore have contravened the EU Arms Embargo on Zimbabwe.

  The TWT has since been modified so that it is no longer suitable for military use. As a result, DTI Technologies Unit re-rated the TWT making it now a dual-use good.

  The decision to overturn the original rejection was made after discussion with Export Control section of Defence Intelligence Service. They have established that the equipment is for use at Bulawayo and Harare airports. There is no Zimbabwe air force facility at Bulawayo. There is one near the civil airport in Harare, but the military have their own radar. We are therefore satisfied that the TWT is for civilian use only.

  This decision underlines our policy that targeted sanctions imposed on Zimbabwe should not affect the lives of ordinary people unconnected with the Mugabe regime.

DEFENCE

  Armed Forces Personnel Administration Agency
  The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)
  The Key Targets have been set for the Chief Executive of the Armed Forces Personnel Administration Agency (AFPAA) for the Financial Year 2003–04. The Targets build upon progress made by the Agency since it formed on 1 April 1997, and are set against the following groupings.

  Service Enhancement—Joint Personnel Administration (JPA)

  The delivery of a procurement strategy for JPA by February 2004 to enable the submission of a Main Gate Business Case to the Defence Investment Approvals Board during Financial Year 2004—05.

  Service Enhancement

  In total 96 per cent. of all change projects (Major change) to be delivered within agreed project tolerances; 95 per cent. of all other change to be delivered in accordance with the AFPAA Change Control Steering Group (CCSG) approved plans.

  Delivery of Service

  To make 99.9 per cent. of all pay payments by the due date (excluding late payments caused by events determined to be outside the control of the Agency).

  Error rate of accuracy to be kept within 0.1 per cent. per volume of payments. To make 99 per cent. of all

  25WS
  pension payments (including new awards) by the due date (excluding late payments caused by events determined to be outside the control of the Agency).

  Error rate of accuracy to be kept within 0.1 per cent. per volume of payments.

  Business Improvement

  To determine, implement and maintain a responsive and flexible Business Improvement Plan endorsed by
  26WS
  DCDS(Pers) and have recorded baselines for all areas of improvement contained within the plan by 31 March 2004.

  Efficiency

  To reduce the unit cost by 0.5 per cent. in 2003—04 which will contribute to a 12 per cent. reduction, over a four-year period, from 2002—03 for delivery of core Pay and Personnel Administration.

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.

Indonesia
Baroness Cox Baroness Cox asked Her Majesty's Government:
What is their response to recent developments in Indonesia.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, we are concerned at ongoing violence in various parts of Indonesia, including inter-communal conflict in Maluka and Sulawesi. The UK stands ready to help the Indonesian authorities and local communities to promote reconciliation and begin wider reconstruction work. We continue to work closely with Indonesia on a broad range of important issues, including counter-terrorism. We have developed a significant package of counter-terrorism assistance with Indonesia since the devastating attack in Bali last year.
Baroness Cox: My Lords, I thank the Minister for that encouraging reply. Would she agree that the Indonesian Government are to be congratulated on their endeavours to contain the militant extremists such as Laska Jihad and Jemaah Islamiyah, and to promote reconciliation in Maluka and Sulawesi through the Malino agreements? Could she indicate what specific support Her Majesty's Government might give to promote reconciliation and reconstruction in those areas, where both Muslims and Christians have suffered, with thousands killed, hundreds of thousands displaced, and many entire communities completely devastated?
Baroness Amos: My Lords, I agree that the Indonesian Government are to be congratulated. I think that the whole House would like to congratulate the noble Baroness herself on the role that she has played in the international Islamic Christian Organisation for Reconciliation and Reconstruction in Indonesia.
With respect to the support and efforts that we might make, the noble Baroness will be aware that the Prime Minister exchanged views with President Megawati's special envoy in London on 13th March and that promoting interfaith dialogue remains one of our key objectives in Indonesia. The Department for International Development has also committed more than £4 million to help to establish the UN Development Programme
216
conflict prevention and recovery unit in Jakarta. In the longer term, we think that the Malino process needs to continue with both Muslim and Christian support.
Lord Archer of Sandwell: My Lords, I congratulate the noble Baroness on her excellent work on behalf of interfaith understanding. Although recognising the sheer professionalism of the national police force in promoting the rule of law, does the Minister agree that the trouble is confined to particular localities and that in central Sulawesi the police appear to have an unhealthy relationship with violent extremists? Could our embassy facilitate the attendance of an observer at the trial of the Reverend Damanik whose efforts to bring about reconciliation between Muslims and Christians are obviously not welcome to the authorities?
Baroness Amos: My Lords, we have received a number of letters about that case. It is important that the legal process takes its full course. I take the point raised by my noble and learned friend about having someone observe what goes on at the trial. I shall take that request back to my colleagues and write to my noble and learned friend to let him know the outcome.
Lord Avebury: My Lords, has the noble Baroness noted that all 100 peacekeeping monitors have been withdrawn from their base in Acheh as a result of attacks on their offices and the wounding of two peacekeepers? Will she ask her colleague the Secretary of State to make a call similar to that already issued by the State Department in the US calling on the Indonesian Government to protect monitors and safeguard the peace process, and to ask the European Union to do the same?
Baroness Amos: My Lords, I had better confess to the House that I was not aware that the monitors had been withdrawn until it was drawn to my attention by the noble Lord. We endorse the statement made by the United States Government with respect to the importance of supporting the peace process. As I understand it, ambassadors from the United States, Japan and the EU are meeting the Government of Indonesia today on those matters. We shall of course continue to support the peace process.
Lord Alton of Liverpool: My Lords, the Minister is right to congratulate the Indonesian police authorities on the work they have done in bringing to justice many of those who perpetrated the Bali massacre in which more than 200 people, including 24 Britons, died. However, what progress is being made in bringing to justice the operational head of Jemaah Islamiyah, who remains at large? Will the Minister also compare the treatment of Rinaldi Damanik, referred to by the noble and learned Lord, Lord Archer, with the way in which the head of Laska Jihad simply had charges against him dropped and was released from prison earlier this year?
Baroness Amos: My Lords, I am aware of what happened in the case of the leader of Laska Jihad. Of

217
course it is important that we try to get a degree of consistency, but the Indonesians have an independent legal and judicial system. It is important that that system can operate and operate independently. I am afraid that I am unable to answer the specific question on the Bali massacre about the operational head of the unit. I shall see if we have further information in the Foreign and Commonwealth Office. If we have, I shall write to the noble Lord.
Lord Howell of Guildford: My Lords, I agree with my noble friend Lady Cox, who does marvellous work in the region, that the Minister's reply was very helpful. However, does the Minister recall that, after Bali, the Government's response to the Intelligence and Security Committee inquiry was to the effect that there would be a new organisation for handling and disseminating terrorist intelligence and that it would have new objectives? Can she tell us anything about the progress with that organisation, whether it is in place and whether it is now operating?
Baroness Amos: My Lords, the Government's response to the situation post-Bali was both to look at the security assessments and intelligence reports and at our own consular services. There is now greater coordination not only with regard to the information received from our intelligence services but with regard to the subsequent threat assessments and the use made of those assessments. The noble Lord, Lord Howell, may have seen the response of the Foreign and Commonwealth Office to the Foreign Affairs Select Committee when it raised these issues. As for the consular aspect, we have set up rapid deployment teams which are able to go out very quickly—within 24 hours, or even sooner—should an incident similar to Bali occur in another part of the world.
Lord Elton: My Lords, does the Minister accept that the significance of the massacres goes far beyond Indonesia and relates to inter-religious, interfaith tensions which are now very near the surface as the result of recent military activity in the Middle East? Can she say what steps the Government are taking to facilitate interfaith dialogue in a way which encourages faiths to talk to each other in peace rather than fight each other in war?
Baroness Amos: My Lords, the noble Lord, Lord Elton, is right. There are tensions around the world—the noble Lord may have seen that there was recently a demonstration of 250,000 in Indonesia—and the situation may well worsen. The Government are engaged in a number of interfaith processes around the world, and not only in the Middle East. I shall happily write to him to set those out—and, indeed, to mention some of the work between communities in which we are involved in African countries as well.

Unauthorised Firearms: Amnesty Arrangements
2.44 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What amnesty arrangements they are making for the handing in of unauthorised firearms held by members of the public.
The Minister of State, Home Office (Lord Falconer of Thoroton): My Lords, from 31st March to 30th April of this year, anyone can hand in to the police any unauthorised firearms or ammunition in the knowledge that they will not be prosecuted for having them. We are also encouraging the handing in of unwanted guns, particularly imitations and airguns that are being held for criminal purposes. The amnesty provides people with an opportunity to get rid of guns that they should not have in advance of tough new gun laws.
Lord Campbell of Croy: My Lords, I thank the noble and learned Lord for his reply. Will any amnesty such as the one now being planned be followed by severe, previously publicised penalties for possessing unauthorised weapons—for example, at least a five-year prison sentence?
Lord Falconer of Thoroton: Yes, my Lords, it will. We have already announced that there will be a five-year mandatory minimum sentence for illegal possession of prohibited weapons. That will be introduced by legislation in the middle of this year and will follow the amnesty that is now taking place. We encourage people to hand in illegal weapons as soon as possible.
Lord Mackenzie of Framwellgate: My Lords, does the noble and learned Lord agree that imitation firearms can be just as dangerous as real ones? In fact. for obvious reasons, they can be lethal when brandished by people in the streets. Has any thought been given to the practice in some other European countries whereby toy and imitation firearms must be coloured very brightly to make it clear that they are just toys and imitations as opposed to the real thing?
Lord Falconer of Thoroton: My Lords, I agree with my noble friend. In some circumstances, imitation firearms can be just as dangerous as the real thing, partly because they can be adapted to become lethal and partly because they can be used in the commission of crime. That is why we are introducing a new offence of possessing imitation firearms or airguns in a public place without lawful authority or reasonable excuse. We should consider my noble friend's idea about painting imitations in a particular way and perhaps take it up with manufacturers.
Baroness Walmsley: My Lords, does the Minister agree that we should be tough not only on guns but on the causes of guns and that the illegal drug business is the main reason why so many illegal firearms are held in society? He is no doubt aware of the Trident programme, run by the Metropolitan Police, which is so successfully targeting some of the drugs gangs that carry so many of the firearms. Are similar programmes being implemented by other urban police forces in other parts of the country? If so, are they ongoing? Are the Government supportive of such programmes?
Lord Falconer of Thoroton: My Lords, I agree with that proposition. As the noble Baroness said, Operation Trident is run by the Metropolitan Police. The Metropolitan Police would be the first to say that if you do not get in among the community and get it committed to turning its back on guns, then you will not make the progress that should be made. The work that the Metropolitan Police have done in that respect is incredibly impressive. I have been to many meetings with the community where it was perfectly plain that the Metropolitan Police have been making efforts to gain the community's confidence, so that people will, for example, actually give evidence against those who have committed the gun crime. There is a terrifying statistic. In the year to the end of 2000, 140 offences in Manchester involved firearms, but only one witness came forward. If we cannot persuade people to speak out against crime, we will not be able to fight crime effectively. Are other police forces engaged as well? Yes, they are. Do we support them? Yes, we do.
Lord Hodgson of Astley Abbotts: My Lords, can the Minister tell the House whether he has issued a circular to chief officers of police in connection with the operation of this amnesty? If so, will he further confirm whether the circular requires that in cases where it is believed that a serious offence involving a surrendered weapon has taken place, normal procedures will be followed and urgent inquiries made?
Lord Falconer of Thoroton: My Lords, the amnesty has been prepared and developed in association with the Association of Chief Police Officers. I pay tribute to the association and the work it has done with us in making the arrangements. Everything that has been done has been done between the two organisations, the Home Office and ACPO. If I may, I shall write to the noble Lord on the details of the circular.
Lord Renton: My Lords, what happens to real firearms that have been handed in?
Lord Falconer of Thoroton: My Lords, they are handed in to a police station and then examined by the police. If there is no reason to keep them, for example in relation to the investigation of crime, they are destroyed. If it is considered that they might have an historic or other value, they are kept and looked at.

Israeli-Palestinian Dispute
2.50 p.m.
Lord Blaker Lord Blaker asked Her Majesty's Government:
What recent progress has been made towards a settlement of the dispute between Israel and the Palestinians.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, on 10th March, President Arafat announced the appointment of Mahmoud Abbas to the newly-created position of Palestinian Prime Minister. This is a significant first step towards stronger Palestinian political institutions and a resumption of the peace process.
Yesterday in Belfast, President Bush restated his commitment to publishing and implementing the quartet road map as soon as Mr Abbas is confirmed as Prime Minister. Implementation of the road map is the way forward to a final, comprehensive settlement. We call on the parties to co-operate fully with the quartet to this end.
Lord Blaker: My Lords, I feel sure that, like the noble Baroness, noble Lords will welcome the two events to which she referred. Is it not likely that President Bush will have to spend a lot of time and energy—as he undertook to do—in promoting the road map, bearing in mind that Israel has already put in a great number of amendments to it, including one which could possibly prevent any negotiations at all? On the Palestinian side, there appear to be differences between Yasser Arafat and the newly-appointed Palestinian Prime Minister. Nevertheless, are not these negotiations vital for stability in the whole of the Middle East and for the control of terrorism? Will the noble Baroness give an assurance to the House—I am sure that she can—that Her Majesty's Government will exert every possible effort in supporting President Bush in what he has undertaken to do?
Baroness Symons of Vernham Dean: My Lords, I given that undertaking unequivocally. The Prime Minister has already exerted every possible effort to get us to the position in which we find ourselves today. I agree with the noble Lord that much work remains to be done. We cannot be complacent on the basis of statements made yesterday that a smooth path lies before us. There will be a great deal of difficulty. No doubt many on all sides will not wish the road map well. On the other hand, as the noble Lord, Lord Blaker, noted, the President of the United States, in talking about the hard work that had gone into the peace process in Northern Ireland, said,
"I am willing to spend the same amount of energy in the Middle East".
That is a very heartening phrase from the President of the United States. I know that my right honourable friend the Prime Minister will also wish to put a great deal of effort into this matter in the future.
Lord Sheldon: My Lords, is my noble friend aware that many believe that the road map is a euphemism for a journey that will not end at an acceptable destination, and that unless the United States puts realistic pressure upon Israel the Middle East will remain an area in which conflict will continue?
Baroness Symons of Vernham Dean: My Lords, there is a great deal of truth in what the noble Lord says. Realistic pressure must be brought to bear on all sides, not just upon the Israelis. We need to recognise that there will be enemies of the road map on all sides and that a great deal of straight talking will have to be undertaken not only as regards the Israelis but also as regards others. I say to the noble Lord that it is very important indeed to recognise the phases that have been set out in the road map. I refer to the insistence on ending Palestinian violence—a very important issue for the Israelis—issues about security and other reforms leading to a second phase with the creation of the independent Palestinian state within provisional borders. There is a road map and it behoves us all now to do everything that we can to support it.
Lord Wallace of Saltaire: My Lords, the dates in the road map are now getting rather close. Is it envisaged that as the road map has already been delayed, the stages for the road map will necessarily have to be delayed a little further?
Baroness Symons of Vernham Dean: My Lords, we have to be very careful about that. Once you start moving around certain parts of the road map—the noble Lord can see where I am going here—it opens up the possibility of changing other parts of it and tacking here and there. Then we will find that the road map does not look like the document that we all wish to support at the moment. The important date concerns a permanent status agreement being reached in the year 2005 under phase three, including an agreement on borders, refugees and the status of Jerusalem. That is the objective towards which, I hope all your Lordships agree, it is right for the international community to work.
Lord Clarke of Hampstead: My Lords, does my noble friend agree that any map or route plan must include some reference to the right of Israel to exist within safe and secure boundaries, and that Resolution 242 of the United Nations is as important today as it was when it was first carried?
Baroness Symons of Vernham Dean: My Lords, I agree wholeheartedly. The whole point of the road map is that two states should be able to exist side by side within secure borders and, importantly, be respected as two states within those secure borders by other countries in the region. We attached enormous importance to the statements of Crown Prince Abdullah of Saudi Arabia when he made the point very forcefully that that was the basis on which the Saudi Arabians—who, after all, have had some bitter things to say in the past about our friends in Israel—
222
would be willing to support the measure. So my noble friend is absolutely right: the safety and security of the borders is vitally important. That is why phase one, which deals with security, is so important.
Lord Hannay of Chiswick: My Lords, does the Minister agree that one of the most important matters is to get rid of the pre-condition that no negotiation can take place so long as any acts of violence are occurring, as that hands the agenda to the men of violence who do not want a peace process in the first place? Does she also agree that the road map is not open to negotiation? What has to be negotiated now is the implementation of the road map, not an endless argument about what is in it.
Baroness Symons of Vernham Dean: My Lords, I agree with the point that the noble Lord made about preconditions. If we had worked on the basis of the preconditions, we would not have got anywhere with the peace process in Northern Ireland. I refer to the important remarks of the President of the United States about the implementation of the peace process in Northern Ireland. I am terribly sorry but I have forgotten the second point that the noble Lord made. Will he remind me?
Lord Hannay of Chiswick: My Lords, I asked the Minister whether she agreed that the negotiation has to be about implementing the road map, not arguing about what is in it.
Baroness Symons of Vernham Dean: Indeed, my Lords. That was the point that I tried to make when the noble Lord, Lord Wallace of Saltaire, talked about the possibility of changing some of the dates. The difficulty is that if you start to negotiate on dates for the road map other issues may be put forward as matters that can be renegotiated. It is important to stick with the road map and to talk about the best way of achieving it.
Lord Howell of Guildford: My Lords, although most of us want to see the road map as soon as possible, will not the proposed Palestinian Prime Minister need a few days, first, to gather his full team and, secondly, to establish that he has proper powers and is able to carry forward the kind of issues that we want to see carried forward? Does that not make the case for showing patience for a few weeks until that is clear?
Baroness Symons of Vernham Dean: My Lords, that is precisely why the road map has not been published so far. British diplomats have had meetings with Mahmoud Abbas, otherwise known as Abu Mazen, who is at the moment putting together his Cabinet appointments. At the point that he has formed his government, we hope that he will be confirmed as Prime Minister by the Palestinian Authority. At that point we shall look to see the road map published.

Means Testing
2.58 p.m.
Lord Higgins Lord Higgins asked Her Majesty's Government:
What has been the increase in the number and percentage of individuals and households subject to means testing since the Chancellor of the Exchequer's first Budget.
Lord McIntosh of Haringey: My Lords, in May 1997 there were around 8 million benefit units—that is, 27 per cent of single adults or couples living as married and any dependent children—in Great Britain in receipt of one or more income-related benefits. The latest comparable data available are for May 2001 and show a total of 7.4 million benefit/tax units—that is, 24 per cent—in receipt of one or more income-related benefits or tax credits.
We forecast that by 2003–04 around 11 million tax/benefit units are likely to be in receipt of one or more income-related benefits or tax credits. That figure includes the child tax credit, working tax credit and, from October 2003, pension credit.
I am sorry that that is a complicated Answer but the full facts are even more complicated. If I may, I should like to place a more detailed response in the Library and send it to the noble Lord, Lord Higgins.
Lord Higgins: My Lords, I thank the Minister for that helpful and topical reply. Is it not clear that the Chancellor of the Exchequer is obsessed with means testing and in particular with means-tested tax credits, with the result that the system is now so complicated—the Minister confirmed that—that virtually no one understands it? Does he agree with the PAC report published yesterday that that is a major harrier to people taking up their benefits and that the Government's targets for improving take-up lack ambition? Does he also agree that the effect of all of that means testing is to deter prudent savings, with the result that, as is shown in today's Red Book, the savings ratio has more than halved since 1997?
Lord McIntosh of Haringey: My Lords, I did not agree that tax credits are complicated; I said that the presentation of these figures—with all of the complications about overlap, about who is in receipt and about whether income-related benefits or tax credits are involved—is complicated. The noble Lord, Lord Higgins, asked a complicated Question and he is getting as fair an answer as he can possibly get. As for the Public Accounts Committee, yes, I have seen what it said. The fact is that we have recently published a study of the take-up of benefits and we have shown a substantial increase in, for example, the take-up of the minimum income guarantee for pensioners—there has been an increase of 3 to 4 per cent for the poorest pensioners. I could—but I will not—read out the take-up figures for all such benefits. The impact of this approach is not as the Public Accounts Committee claimed.
Lord Barnett: My Lords, I am sure that my noble friend agrees that means testing has serious economic consequences. I wonder whether the Treasury has now decided that means testing through the tax system is more effective than through cash benefits. If so, has it done any research into those matters, and will he publish it?
Lord McIntosh of Haringey: My Lords, means testing is a pejorative term; it goes right back to the 1930s. I much prefer, more neutrally, to refer to income-related benefits, which is what I did. Income-related benefits cover a wide range of benefits and methods of calculation. For example, the pension credit that will come into effect on 1st October will no longer he tested on a weekly basis; it will be tested through a simple application, which could be done on a freephone number and which will last for up to five years. Under those circumstances, targeted benefits are not the menace that they were many years ago.
Lord Roberts of Conwy: My Lords, the Minister gave the figure for 2003–04. Could he estimate that as a percentage of the population, as was asked for in the Question?
Lord McIntosh of Haringey: My Lords, I was going beyond the Question and trying to be even more helpful. If 8 million is 27 per cent, 11 million, allowing for increases in the population, is more than 27 per cent.
Baroness Byford: My Lords, does the Minister accept that the Government were disappointed by the take-up of the tax credit system? They are spending many thousands of pounds promoting that system. Does the noble Lord also agree that the forms that people are asked to complete are very complex and very long? What are the Government doing to reduce that in order to encourage people to take up the tax credit to which they are entitled?
Lord McIntosh of Haringey: My Lords, the answer to the noble Baroness's last question is that we are cutting down the forms and simplifying them. The answer to the question about advertising is that it is certainly true that we have been advertising in order to increase take-up. For example, when we last had a campaign to advertise the minimum income guarantee for pensioners, by January 2003—by the end of the campaign—we had more than 250,000 additional applications and 150,000 successful applications. Such advertising works: it increases the number of targeted benefits and decreases poverty.
Lord Barnett: My Lords, unusually for my noble friend, he overlooked answering my simple question. What research has the Treasury done into these matters and will he publish it?
Lord McIntosh of Haringey: My Lords, the research was done by the Department for Work and Pensions—I happen to be answering for it at the moment—and was published on 27th March.
Baroness Noakes: My Lords, the Minister referred to the pension credit that will be introduced later this

225
year. Will he say what proportion of pensioners will be subject to means testing once the pension credit is introduced in October?
Lord McIntosh of Haringey: My Lords, if we revert again to the more neutral wording of income-related benefits and to the fact that the testing of applicability for income-related benefit will be a much simpler process than that for the minimum income guarantee, we anticipate that we will have 1.8 million people taking benefit units—taking pension credit—in October this year, rising to 2.8 million by October 2004 and eventually to about 3 million. I am not very good at working out percentages in my head and am sure that the noble Baroness, Lady Noakes, as an accountant, can do much better than I can.
Baroness Noakes: My Lords, perhaps the Minister will agree that the majority of pensioners will be means tested once the pension credit is introduced.
Lord McIntosh of Haringey: No, my Lords, I do not believe that that follows.

Iraq: Humanitarian Aid and Reconstruction
3.6 p.m.
Lord Judd Lord Judd asked Her Majesty's Government:
What will be the role of the United Nations in humanitarian assistance and reconstruction in, and political rehabilitation of, Iraq following the fall of the regime of Saddam Hussein.
Baroness Symons of Vernham Dean: My Lords, as the Prime Minister and President Bush agreed yesterday, the United Nations should have a vital role in the reconstruction of Iraq.
Security Council Resolution 1472 allows for the resumption of humanitarian aid through the Oil for Food programme. We have welcomed the efforts of the United Nations agencies and non-governmental organisations in providing that vital and immediate humanitarian assistance to the people of Iraq.
Her Majesty's Government and the United States Government would welcome further UNSCRs confirming Iraq's territorial integrity, providing for further humanitarian relief and endorsing an appropriate post-conflict administration for Iraq.
We hope to work closely with the United Nations to assist the people of Iraq in establishing an interim Iraqi authority as soon as possible.
Lord Judd: My Lords, I hope that it is in order once more to express our admiration of the courage and professionalism of our armed services in fulfilling the task that is expected of them. I also hope that it is in order to express our concern for the wounded and the bereaved on all sides.
226
I thank my noble friend for that Answer. Does she agree that the UN has a vital role to play in the co-ordination of humanitarian and construction work because many humanitarian agencies feel that they are able to play their part fully only if there is an international presence that is led by the UN? Does she also agree that this is not simply a matter of endorsing arrangements for the political future of Iraq but that if we are looking for stability not only in Iraq but in the Middle East and in the world as a whole—if we are to win hearts and minds—the UN, with the global authority and impartiality that it will bring, is essential to the task of building that political future and bringing into being the arrangements that will be necessary for the Iraqis themselves to take control of their own affairs?
Baroness Symons of Vernham Dean: Yes, my Lords, I can agree with virtually everything that my noble friend said. I join him, as I am sure all noble Lords do, in the admiration that he expressed of the courage and professionalism of our Armed Forces. I add that many noble Lords will have seen with admiration the compassion and humanity of our Armed Forces when dealing not only with civilians but with many wounded combatants from the other side.
Of course the United Nations has a vital role; that was stressed forcefully by my right honourable friend the Prime Minister and the President of the United States. I say to the noble Lord that some international NGOs are already operating in Iraq. He will know that the Red Cross and the Red Crescent are already undertaking some important work. I point out to him that, in view of his passion about the United Nations, he will find a great deal of reassurance if he reads the account of the press conference yesterday, in which the President of the United States three times reiterated the importance of the role of the United Nations.
Lord Wright of Richmond: My Lords, following the reference of the noble Lord, Lord Judd, to hearts and minds, is the Minister aware that, according to the Financial Times this weekend, Mr Jay Garner, who apparently has been appointed interim governor of Iraq, has considerable experience of working in northern Iraq following the Gulf War but that his main business connections have involved the sale of L-3 missiles to Israel and he is on record as praising the Israeli Army's use of remarkable restraint in handling Palestinian unrest? Is that an example of sensitivity?
Baroness Symons of Vernham Dean: My Lords, I believe that we must look at what Mr Garner is being asked to undertake at present in Iraq and at what he is doing, together with his deputies. I remind your Lordships that one of those deputies is a United Kingdom Army officer, who is serving with particular responsibility for international liaison. I consider it to be most important that one of the people playing a vital role in relation to Jay Garner is British. We look to him to ensure that the values that your Lordships would wish to see brought to bear are in the forefront of minds.

227
Of course, people will want to raise all kinds of issues in relation to particular individuals. But we must consider the purpose of ORHA and the fact that, in answering Questions only today, my right honourable friend said that ORHA is only a stage on the way to establishing the Iraqi interim authority, which we hope will be in place very soon.
Lord Howell of Guildford: My Lords, reverting to the Question, does the Minister accept our view that, once it can be organised—it may take a little time—UN expertise will be both welcome and invaluable in all stages of Iraq's rehabilitation? But does she accept that the overriding aims of the coalition and UN agencies in working together must be to meet the immediate humanitarian needs, which are desperate, and to put in place the foundations of a civil administration, placing those operations in Iraqi hands as soon as practicable? Will the Government remind the French that, despite their remorseless hostility to fresh UN resolutions, a new resolution is needed here and now—immediately—to lift the sanctions on the new Iraq?
Baroness Symons of Vernham Dean: My Lords, of course I believe that the role of the United Nations will be, as the noble Lord put it, invaluable. I point out to the noble Lord that humanitarian needs have been covered by United Nations Security Council Resolution 1472, which allowed for the Oil for Food programme to resume and for aid to reach the Iraqi people.
So far as concerns our friends in France, perhaps I should say that President Chirac has expressed the view that, following a necessary stage of ensuring security, there will naturally follow a time of reconstruction with a command that the UN should play what he called a "central role". I do not believe that there is such a world of difference between what the Prime Minister said yesterday about a vital role and what President Chirac said about a central role. I am sure that, with good will on all sides, work can be done to bring about agreements at the United Nations.
Baroness Northover: My Lords, does the Minister agree that the breakdown in law and order in Iraq was sadly predictable? Can she tell us what plans the Government had drawn up in advance to deal with that, and can she give us details of how, when and with whose help those plans will now be implemented?
Baroness Symons of Vernham Dean: My Lords, I believe there is a period in any military conflict when what the noble Baroness described as "a breakdown in law and order" takes place. Like your Lordships, I have seen television pictures of a certain amount of looting. However, I do not consider that that amounts to a complete breakdown in law and order, and I believe that the noble Baroness should be careful not to exaggerate the situation of young people looting objects that they desire into a complete breakdown of law and order. Murder and mayhem are not taking place on the streets, as the phrase "a complete
228
breakdown of law and order" would seem to imply. However, the situation in Basra has been a cause for concern. As a result, the British military have sought to engage on the spot Iraqis who may have authority with the people of Basra in order to contain some of the unruly elements, particularly among younger people, who have sought to take advantage in looting buildings.
The Lord Bishop of Portsmouth: My Lords, does the Minister agree that, thanks to many factors—international communication technology included—this war has been more debated than any other in living memory? Is that not a further argument for healing the wounds of our own international friendships which have been severed and for ensuring that the United Nations is put back in the driving seat as soon as possible?
Baroness Symons of Vernham Dean: My Lords, I agree that 24-hour coverage has meant that we have seen on our televisions some very distressing pictures of what has taken place. I cannot help thinking that in many ways that is a good thing and that we should be confronted with the horror of war. We should know what is going on in our names. I, for one, have supported this military conflict; many of your Lordships have not. But I have not sought to turn my face away from what is being done in my name and I believe it is right that we face up to it.
In respect of the role of the United Nations, of course we need United Nations authority for what happens in the longer term. But it is also important that the coalition and the United Nations work together on this issue in the longer term. I have no doubt that there will be much argument about the precise role of the United Nations—we should not pretend that there will not be. But we can all believe in the principle of the United Nations playing a vital role or, to express it in the French way, a central role.
Lord Desai: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, we are now out of time, I am afraid.

Religion and Global Terrorism
3.16 p.m.
The Lord Bishop of Oxford The Lord Bishop of Oxford rose to call attention to the religious element in global terrorism and appropriate interfaith responses; and to move for Papers.
The right reverend Prelate said: My Lords, although our immediate concern is the military conflict in Iraq, I believe, as many of us do, that the greatest long-term threat is global terrorism. Any study of Al'Qaeda reveals that this is a threat that we need to take very seriously indeed. Al'Qaeda is closely related to a range of independent terrorist groups now operating in some 80 countries, providing a global network with a sharply defined, ideologically motivated strategy. It appears to

229
be well organised, with different departments and different nationalities responsible for separate aspects of the operation, including a successful financial section. It has planned a good number of attacks in recent years—not all of them well reported. It has had a significant base in this country. An analysis of bin Laden's telephone-billing records reveal that from 1996–98 a fifth of his calls—238 out of 1,200—were made to Britain. So this is a threat we need to take with the greatest possible seriousness.
One of the most disturbing aspects of the phenomenon is the misuse of religion. Even more than technical skill and training, Al'Qaeda seeks religious commitment from its members—a religious motivation that will steel them to kill and be killed without fear or scruple. So the concern that lies behind my Question and behind my asking for this debate is the effect that this has had, and is having, on the mainstream Muslim population in this country. My question is: what can we as a society do and what, in particular, can interfaith groups do to support the mainstream, moderate majority?
A book published a few years ago—War of the Flea—analysed guerrilla movements since World War II. The strategy of those movements was not to win great military victories, which of course such groups could not do, but to stay in existence long enough and to be enough of a nuisance until political victory was assured. Winning the political struggle depended entirely on having the support of the wider community on whose behalf they claimed to be engaged in armed struggle. The parallel with Al'Qaeda seems uncannily close. In short, they will succeed only if what they stand for resonates with the wider Muslim world and, in particular, if the religious motivation to which they lay claim is recognised and validated elsewhere.
If the Muslim community around the world and in this country feel alienated from the society in which they live, what Al'Qaeda says and stands for will have reverberations within that community. If, on the other hand, Al'Qaeda is isolated, not just physically but ideologically, it cannot succeed. I return to my question: what can we as a society do and what can interfaith groups do to support the moderate mainstream majority in the Muslim world?
I would like to mention language. People sometimes talk and write of Islamic terrorism. As the noble Lord, Lord Ahmed, pointed out in the House at another time, terrorists are terrorists so why dignify them with the name "Islamic". It is a matter of fact that Al'Qaeda claims that title, but there is no reason why the rest of society and the millions of moderate, decent Muslims should be complicit in its use. It besmirches the name Islam and reinforces any tendencies in our society towards Islamaphobia.
While on the subject of reporting, I make a plea that the media give greater prominence to the views of mainstream Muslim leaders and not just focus on the extremists. There were many Muslim condemnations of 11 th September and there have been Muslim
230
condemnations of suicide bombing as incompatible with the Koran. But so often the men of violence get the headlines.
So far as government policy is concerned, I believe that particular care is required to ensure that action is not taken against particular categories of people just because they are Muslim. Immigration policy is a particular issue here. People from Muslim countries should not be classified indiscriminately as a potential threat just because they are Muslims. That can arouse only resentment in the wider Muslim community that wants nothing to do with terrorism. Similarly we need to be vigilant that Muslim prisoners, such as those at Guantanamo Bay, are accorded the basic legal rights that apply to everyone in a civilised society.
Then, of course, there are the unresolved political questions like Palestine, which are a continuing source of anguish and grievance to the whole Muslim world and which allow a kind of sneaking sympathy for terrorists among some younger people. I am sympathetic to the fears and genuine security needs of Israel and I make no further comment beyond a hope that the kind of commitment that has been shown to win the war in Iraq might be put into winning a durable peace between the Israelis and the Palestinians.
It is not for a Christian to say what the Muslim community might do to strengthen the forces of moderation except to recall that Islam has been one of the great civilising forces in history and that the Wahabi strand of Islam, especially its more extreme elements, is unrepresentative of Islam in history and in the world today. Only a couple of days ago it was reported that a new Muslim council has been formed in France to represent its 5 million Muslim citizens. I look forward to a time when a Muslim equivalent of the Board of Deputies of British Jews in this country can unite the different strands of Islam and help the whole community to speak with a single voice to British society today.
Even here I believe that the wider British society can help. We can try to ensure that on public bodies, major institutions and in all consultations responsible leaders and spokesmen are identified and invited to make their contribution. The religious broadcasting department of the BBC has, I believe, done that to some significant extent by ensuring that there are now regular Muslim speakers on "Thought for the Day". That is just one example of what needs to take place in every aspect of our civic life, for it is in that way that particular people are not only enabled to make their contribution but to become recognised and valued spokespeople for their community.
On the issue of leaders, there is just one question I would put to the Muslim community, although not in my own name because that would not be appropriate. Dr Zaki Badawi, who is one of the best known Muslim spokesmen in the country at the moment, has asked about some of the imams who come from abroad, often from very rural backgrounds, to minister in the mosques in this country. He asks what checks are made by the community to see that they are in fact properly qualified, not just from a religious point of

231
view, but also in their understanding of what it might mean for a Muslim to be a faithful Muslim in our society today.
Finally, I turn to the contribution that I think interfaith groups, and perhaps particularly the Churches, can make to this issue. I am glad to say that many Muslim communities see the Churches as natural allies and we are glad to try to be such. In many of the cities of our country there are close relationships between Christian leaders and Muslim leaders. That was particularly evident after 11th September and at the time of community tensions a year or so ago.
The previous Archbishop of Canterbury—now the noble and right reverend Lord, Lord Carey of Clifton—is associated with two initiatives that could have great value for the future. One is the Muslim-Christian forum, which is in the process of visiting our major cities in order lo listen to Muslim concerns. As I understand it, there have already been visits to about five cities with large Muslim populations. I believe that it will be worth taking notice of what those taking part in the visits hear and eventually report on. Secondly, there is the initiative in the Middle East which brought together Muslim, Jewish and Christian leaders at a very high level and which resulted in the Alexandria declaration. The noble and right reverend Lord, Lord Carey, regrets that he is unable to be here to talk further about that; he is in the United States.
Behind the Alexandria process is a realisation that the peace process in the Middle East so far has not really engaged ordinary people. It has been a matter of leader speaking to leader. It was further recognised that if the process is to move out of political assemblies to engage populations as a whole, then religious leaders could play a key role. The Alexandria process continues and there is a permanent committee for its implementation. A particular contribution is being made by the International Centre for Reconciliation at Coventry Cathedral.
Separate from those two initiatives, but not unrelated, is a meeting in Qatar this week, which was initiated by the previous Archbishop of Canterbury and is being carried on by the present one. I believe that such initiatives and the variety of forms of interfaith work that now go on in our society can play an important role in ensuring that Muslim communities are understood and enabled to play their proper part in contributing to the future of our society in all its aspects. I hope that the Government recognise that and that they will be able, in various ways, to encourage and to support such work. It is of course the initiative and work of the interfaith groups themselves. But government, with their proper responsibility for the health of civil society, can try to ensure that such work is not marginalised but recognised as a key component in enabling the Muslim community to make its contribution to our culture and society and to help British Muslims feel at ease with being such and indeed proud to be such.
Those are just a few points. I hope that other noble Lords will be able to complement them with more and perhaps better ideas. It is the question behind the debate that I believe is the important consideration:
232
what can society as a whole, and interfaith groups in particular, do to strengthen moderate, mainstream, majority Muslim opinion? For on the success of that depends the extent to which Al'Qaeda is ideologically isolated and dies out, or has an increasing resonance within the wider Muslim world, so much of which at the moment is alienated. My Lords, I beg to move for Papers.
3.29 p.m.
Lord Desai: My Lords, I am grateful to the right reverend Prelate the Bishop of Oxford for tabling this Motion. I have only five minutes so I shall have to be very brief. I am sorry that he has done that. On the one hand, we say that Al'Qaeda is not Muslim terrorism and on the other hand we ask, "What are we going to do about Islam? How can we embrace our Muslim friends?". Why single out Islam? In my view—as an Atheist I am sorry to say—every religion preaches peace and it is used as a cause for war. Every religion—Christianity, Judaism, Buddhism and Hinduism—has spawned terrorism. When terrorists adopt a religious garb they are fooling themselves as much as other people, because their purpose is political. It is very difficult to say to someone, "Go and kill a perfect stranger who has done you no harm". We do not do that, unless for crimes of passion. But say to someone, "Do it in the name of God", "Do it in the name of nationalism", or, "Do it in the name of communism", and they will. You need an ideology to cloak your desire to kill.
It is unfortunate that after a century of secularisation the world has gone backwards, and we now have religious movements. In my youthful naivety, I thought that religion might disappear in my lifetime, but it has not. I do mean it seriously. If we are serious about saying that Al'Qaeda is not Muslim terrorism, let us completely forget about trying to be accommodative to religions and so on. It is nothing to do with the Koran, nor with the Bible. By emphasising more and more faith and interfaith councils by having the Alexandria process and so on, we are doing exactly what we should not.
When Al'Qaeda struck, everyone started to read the Koran. It is a very good book. Like all religious books it is mildly boring. I have always found it very difficult to read such books, but some people like them. One would no more say that the Bible is a guide to solving the Northern Ireland problem—because it is not—than say one could fight Al'Qaeda by reading the Koran. Al'Qaeda is not doing anything which has a religious aspect of being Muslim. Its battle is with other Muslim kingdoms, especially the Saudi kingdom. Its battle is a political battle to undermine modernism in Islamic states. That has happened in Egypt for a century or more. There have been religious movements trying to destroy the secular modernistic movement in Middle Eastern countries.
For instance, why do we suddenly assume that Palestine is a Muslim problem? The PLO originally was a secular political party. There are many people in the Middle East and in Palestine who are not Muslims. They are Christians. The founder of the Ba'ath Party,

233
Michel Aflaq, was a Christian. Why do we suddenly adopt these labels, and, having adopted them out of the kindness of our hearts, say, "The cure to this is to understand religion"? The cure to understanding is that religion is the problem. If we secularise, move away from this and say that these people have nothing to do with religion and that their battle is political and ideological; and if we emphasise those aspects and, as it were, delink terrorism from religion, we will be much better off.
It will be difficult to do because the terrorists will insist more and more that the lead people among them are Muslims—of course they are Muslims. There are terrorists in India who worship the Hindu god and Buddhists in Sri Lanka who kill, despite Buddhism being a non-violent religion. So I feel that we should think very differently about this and not let faith into the problem. Faith will not solve the issue of terrorism. We will have to reinforce what I may call "secular" and "materialist" values. That is the only solution.
3.30 p.m.
Lord Moynihan: My Lords, I would also like to take this opportunity to pay tribute to the right reverend Prelate the Bishop of Oxford, for enabling us to discuss this absorbing and highly pertinent subject. I agree that it is most fitting that, as noted by the right reverend Prelate, our debate is taking place on the final day of the second Building Bridges seminar in Qatar.
The concept of so-called "sacred terror" is as far as it is possible to get from the true meaning of religion, whatever its denomination and its teaching of peace, forgiveness and tolerance. This debate poses difficult but necessary questions about the role of religious factors in the escalation of conflicts and the justification of violence in the name of religion. It asks what happens when liturgy and scripture are used to defend or to authorise violence and when clerical figures assume leadership roles in acts of bloodshed.
As is so often the case, the influence of religious leaders is heightened in times of crisis. As a result, they have the potential to moderate, mediate and defuse tensions on a local level within their own communities.
Equally, faith-based institutions have a similar role to play on a larger national and international stage, as part of a broad strategy to prevent the escalation of inter-ethnic, inter-cultural and inter-religious violence. The 9/11 terrorist attacks made it clear that, important though they are, military, political and legal measures alone will not eradicate the threat posed by terrorism. A broader, more long-term approach is needed as well, which takes into account the ideological and spiritual aspects of the influence of religion upon terrorism. The case for religion to be allowed to teach its true doctrine of love, peace and understanding, is overwhelming. Such teaching includes an understanding of the faiths of others, so that an end may be brought to those conflicts all over the world, which are inflamed by a poor understanding of religion, and exacerbated by ethnic, cultural and historical differences.
234
Religion has the potential to be a big tent under which many nations with differing cultures, spiritualities, devotional practices and theologies can gather in peace and harmony. For this reason, meetings of religious leaders, inter-religious academic dialogue such as that taking place in Qatar as we speak and mutual interfaith co-operation, such as lectures in each other's places of worship, are critical components.
Interfaith co-operation and dialogue can be approached in two ways. The first takes the view that, despite our superficial differences, we are all one people, one church and one global community. While acknowledging the diversity of faiths, it stresses the need for understanding, respect and tolerance. An excellent example of this approach is the annual meeting of the Community of Sant'Egidio.
Secondly, there is the need to address the real differences both within faiths and among them. This is the core idea of the World Faiths and Development Dialogue. It was born of an awareness of how complex dialogue across cultures, disciplines and worlds can be and how differently many religious institutions, for example, see the problems of poverty to that of development institutions. Its aim is to bring together at the table the voices and experience of those different worlds with the common aim of attacking the misery of poverty and helping to build a better world.
The events of September 11th and the dialogue since then have highlighted the complicated effect that poverty has on peace, stability, violence and social justice. There is now a far wider recognition that poverty is one of the major alienating factors in society, which in the right circumstances can nurture and breed terrorism.
Religion and faiths are very much part of this struggle, and must equally be part of the search for answers to the problem. With important exceptions, such as Jubilee 2000, religions have perhaps been too little part of the dialogue and work on global poverty issues and country strategies and programmes. We would be wise to expend more effort and energy in this direction.
I have stressed the central importance of dialogue in the pursuit of peace: dialogue between religions and states, between religions and within religions. It is essential. The twin evils of terrorism and extremism destroy the rule of law, human rights, basic freedoms and democracy and they threaten peace and security. As the noble Lord, Lord Desai, rightly said, our struggle against terrorism is not a struggle against any religion, including Islam. Terrorists are enemies common to all societies. Men, women and children of all faiths and all cultures have been the innocent victims of terrorist attacks and they have a common interest in countering the global threat. It is time that religions and beliefs reclaimed their rightful role and contributed to the process through determined, resolute and ground-breaking interfaith co-operation, partnerships and initiatives.
3.40 p.m.
Lord Avebury: My Lords, to the terrorist who is motivated by a particular kind of religious fanaticism, all existing governments are evil and all must be swept away. We have made little effort to understand the mind-set of people who reach that conclusion or the ideological basis of their thinking. As the noble Lord, Lord Moynihan, implied, we cannot hope to eradicate that kind of terrorism by military action in Afghanistan or Iraq. On the contrary, as President Mubarak has said, we are creating 100 Bin Ladens by that process. Instead, we must consider the doctrines that motivate terrorists and the means by which they are spread around the Islamic world.
The mainspring of religious terrorism is the idea that only those who follow the Salafi or Wahhabi ideals are genuine Muslims, as the right reverend Prelate pointed out. The Salafis, who claim that Islam has not been properly understood by anyone since the time of the Prophet and his immediate followers, have their own interpretation of the Koran and the Sunna. The rest—Shi'a, Sufis and even Sunnis who fail to come up to the standards set by those self-appointed guardians of Islam, are to be hated, persecuted and killed.
They cite a saying attributed to the Prophet:
"This Ummah will split into 73 parties, all of which will go to Hell—except for one party: the one which will follow the same path as that which I and my companions are following today".
Those people say that the Salafi Da'wah, or call, is the only true constant and blessed Da'wah of the Prophet. Hence, anyone who pretends to be a Muslim, but does not adhere to Salafism, is a heretic and a kafir, or unbeliever. That doctrine is taught in Saudi Arabian schools and spread throughout the Islamic world in Saudi-funded madrassas. Those religious schools are attractive to poor families in Indonesia or Pakistan that might otherwise be unable to give their children any education.
So although Saudi Arabia is nominally our ally in the struggle against global terrorism, Saudi money is paying for the establishment of the breeding grounds of terrorism. Ironically, the Salafist view is just as hostile to the rulers of Saudi Arabia as it is to the West. Those who call for the destruction of America do so as a prelude to the replacement of the Saudi regime with a pure Islamic government, the policies of which are not further defined.
The product of the hatred felt by the extremist wing of the Salafist movement is seen in events such as the bombing of US embassies in Nairobi and Dar-es-Salaam; the killing of the French submarine technicians in Karachi; the nightclub bombing in Bali; the attack on the USS Cole; the suicide attack on the French oil tanker off the coast of Yemen; and, of course, 9/11 itself. Those are not isolated atrocities; but neither are they directed by a single, monolithic world organisation. They are the deeds of a number of different groups related to one another only loosely by a common jihadist ideology.
Thus, for example, Jemaah Islamiyah of Indonesia, about which we heard during Questions, whose members perpetrated the Bali bombing, is not part of
236
Al'Qaeda, although its leader, Abu Bakar Bashir, is an outspoken admirer of Bin Laden. In Pakistan, two new brands of terrorist organisation were behind the suicide attack in Karachi—both were coalitions of extremists from a variety of backgrounds.
We should be looking for common ideological or quasi-religious origins behind all those movements, considering what can be done to stop the dissemination of religious hatred at source and helping Muslim states to offer a broader education to the children of the next generation.
3.44 p.m.
Lord Wright of Richmond: My Lords, I, too, welcome the initiative of the right reverend Prelate in introducing this important debate. Of course, I do not approach the subject from the point of view of a theologian, which I am not, but 30 years experience of living in and working with the Arab world and of seeing at first hand some of the tensions and suspicions that have led to what the Motion refers to as,
"the religious clement in global terrorism",
may allow me to point to some aspects of the problem that may not always be obvious to those who see it solely as a problem of how to respond to an Islamic threat. As the noble Lord, Lord Desai, put it: why single out Islam?
First, let us ask ourselves why religious people involve themselves at all in what their opponents describe as terrorism: whether they are Roman Catholic or Protestant fanatics in Northern Ireland; Islamic extremists from Saudi Arabia joining the ranks of Al'Qaeda; or extreme Zionists preaching the expulsion of Palestinians, both Muslim and Christian, from Samaria and Judea.
There are four considerations here, which apply in varying degrees to all of those so-called terrorists. The first is a misunderstanding, by both their co-religionists and by their adversaries, of the message of peace and tolerance that underlies all three great scriptures of the sons of Abraham. Secondly, fear of the threat supposedly posed by religions different from their own—often fed by what I call the baggage of history; whether the Crusades, the Holocaust or the events of September 11th. Thirdly, vengeance for injustices, or perceived injustices, against minorities or their co-religionists, both present and past. Fourthly, the use—or, I should say, the misuse—of religion, often by secular leaders such as Saddam Hussein, to pursue their political ambitions, and the attribution of religious motives to what are essentially nationalist agendas.
The noble Lord, Lord Desai, reminded us that the founder of the Ba'ath Party was a Christian. So was the head of the Popular Front for the Liberation of Palestine, George Habash. There are serious dangers in generalising on this diverse and complicated issue and in ascribing all four motivations of fear. mistrust, misunderstanding and vengeance to every incident of terrorism. But there is a generic problem that requires, as the wording of the Motion implies, a truly interfaith response.

237
In that context, perhaps I may say how much I admire the attempts made by the most reverend Primate the Archbishop of Canterbury, who has this week been in Qatar to try to achieve a greater reconciliation and mutual understanding between Muslims and Christians, as the noble Lord, Lord Moynihan, mentioned. We must all try to correct, or at least explain, the misunderstandings and seeds of intolerance that have their basis in historical conflicts—some as far back as the Crusades of the 12th and 13th centuries, which I have found are still surprisingly fresh in the memories of some Muslim politicians.
Perhaps more importantly, we need an interfaith attempt to distance ourselves from the more extreme fundamentalism of religious leaders—whether the fanaticism of Sheikh Abu Hamza and Osama bin Laden; the racist xenophobia of the late Israeli Minister of Tourism, Mr Zeevi; or the extremism of the more fundamentalist Christian movements in the United States—and to encourage those, such as the young on both sides in the Arab-Israeli conflict, who are genuinely trying to work together for peace and whom some of your Lordships may have seen walking hand in hand during some of the remarkable five-minute programmes broadcast from Ramallah on Channel 4.
Most of all, we need unified and unwavering support for those political initiatives aimed at finding a peaceful settlement to current disputes, whether in Kashmir, Belfast or Gaza. It will not surprise your Lordships that I end with a familiar appeal: that, to whatever faith we belong, we continue to urge the United States Administration to put their full weight behind a solution to the Arab-Israeli conflict, which is not only causing such appalling hardship, deprivation and casualties for all those involved, but which lies at the basis of so much of the religious intolerance and terrorism which it is in all our interests to allay.
Lord Janner of Braunstone: My Lords, I declare an interest. I have followed the noble Lord, Lord Wright, often and have rarely agreed with him more. I am only sorry that he ended up where he did without dealing with the problems of terrorism afflicting that area.
I declare an interest because I was founder president of the Maihonides Foundation, which fosters relations between Muslims and Jews.
I declare an interest because, as a Jewish leader, I have travelled through most of the Muslim world and will continue to do so.
I declare an interest because as Member of Parliament for Leicester West I represented a growing Hindu community and fought against racism against them. A major part of my life was and remains devoted to the battle against racism.
I declare an interest because I went to Durban to the so-called UN Anti-Racist Conference, watched the parade of people with banners saying "Death to the Jews" and sadly ended up leading the Jewish organisations out of that awful occasion.
238
What do we do? The question is how we deal with racism. Of course, racism sometimes has a religious element, but, as my noble friend Lord Desai said, by no means does it always have such an element. We must not blame everything on religion. But what do we do and how do we do it?
The answer came from the noble Lord, Lord Moynihan. We must have dialogue if we are to get anywhere. Recently, I was with a very senior leader of India who said, "Look, without dialogue you don't get peace. But if you have terror, you can't have dialogue. So if you have terror, you can't have peace". He was talking about Kashmir but he could have been talking about the Middle East. Where there is terror—this is at the root of the first part of the right reverend Prelate's debate—you cannot talk to people; you are afraid of them, and you do not relate to them. How do we deal with it? The answer is through dialogue and meeting and listening.
For example, recently I was fortunate to be the guest of the Tunisian Government in Tunisia, meeting people of all religions. I did the same in Morocco and, lately, in Azerbaijan. Most people do not know where it is. There are 35,000 Jewish people in Azerbaijan, yet there has not been one instance of anti-Semitism in recorded memory. We were taken to the mosque, where we were received by the mullah, who brought together the leaders of all the religions and announced that the mosque was making a contribution towards the rebuilding of the synagogue in Baku, their capital.
There is hope in this world when people get together and understand that either we will live in peace or we will die in war. Either we will live with and understand each other, put up with our differences and understand them, or we will say, "We are going to fight you", and then life is hell for all. People are entitled to have their differences, but they are not entitled to destroy each other. There must be respect. If there is no respect, we will not have dialogue; if there is no respect, we will not have peace.
There are organisations in the interfaith movement, which I know very well, such as the Three Faiths Forum. It is led by marvellous people, including Sheikh Zaki Badawi and Sir Sigmund Sternberg. After 9/11, a joint statement was issued by the Archbishop of Canterbury; Cardinal Cormac Murphy-O'Connor; the Free Churches Moderator; the Chief Rabbi, Dr Jonathan Saks; Shaikh Zaki Badawi; and the Reverend Esme Beswick, co-president of Churches Together in England. They set out their fears, hopes and common ground, specifically in Britain,
"to build a society in which different faith communities can flourish side by side in mutual respect and in harmony".
That is our only hope. If we allow the terrorists to flourish, whether across the way in Ireland, in Palestine or Israel, there cannot be dialogue. If there is no dialogue, there cannot be peace. We must strike at terrorism; we must work together; we must respect each other, and, in that way, we must hope to build a country and a world in which, whatever our religions, we can live together in peace and harmony.
3.54 p.m.
Baroness Cox: My Lords, most terrorist movements, such as the Tamil Tigers and the IRA, have no global agenda. But those that have such an agenda and an ostensible religious basis, sadly, operate in the name of Islam. I do not wish to encourage Islamophobia—rather, the reverse. I am therefore grateful to the right reverend Prelate for the opportunity to discuss those issues, to make distinctions and to suggest interfaith responses.
The vast majority of the world's 1.2 billion Muslims are peaceable, law-abiding and often renowned for gracious hospitality. But recent years have seen a disturbing rise in terrorist and militant Islamism. Unless we take that seriously, there will be a backlash against all Muslims, as terrorism breeds fear, and fear is irrational. Therefore, I wish briefly to discuss the religious dimension of Islamist militancy in global terrorism and to suggest examples of appropriate responses.
The Koran contains the oft-quoted verses of peace and of the sword. Resulting inconsistencies have been addressed by the principle of abrogation, in which the later revelations abrogate the earlier and the verses of the sword thereby abrogate the verses of peace. There is therefore a religious mandate in traditional Islam for militant Muslims to undertake jihad holy war—in its militaristic form rather than limit it to a spiritual interpretation of struggle to live a good life.
There is also in traditional Islam the division of the world into Dar El Islam and Dar El Harb the world of Islam and the world of war. In the former, Islam is the ruling power; in the latter, there is an obligation on all Muslims to use all appropriate means to gain supremacy for Islam.
One means is through militaristic jihad, which is evident in many parts of the world today. In Sudan, the National Islamic Front regime is using military and terrorist policies to promote its Islamist agenda. In Nigeria, religious conflict is exacerbated by foreign jihad warriors armed with sophisticated weapons. In Indonesia, President Megawati's moderate government are trying to contain the activities of Islamist militants, such as Jemaah Islamiyah and the thousands of Lasker Jihad warriors, who have been responsible for the deaths of thousands and the displacement of hundreds of thousands of Christians and attacks on Hindus in Central Sulawesi.
Militant Islamism is also a cause for concern in this country. Recent media headlines report the activities of Abu Hamza. May I be forgiven for mentioning that I have been raising the issue for more than three years? In January 2000, I described in your Lordships' House a film on Channel 4 in 1999, which showed Abu Hamza inciting hatred and violence, teaching terrorist tactics, such as devices to bring down aircraft landing at British airports, and urging everyone in his large audience to develop similar terrorist tactics. Abu Hamza has also allegedly been associated with international terrorism—his son was arrested in Yemen for planning terrorist activities. I have repeatedly asked the Government how many men have
240
been trained in this country by Abu Hamza and other radical Islamist clerics, sent abroad to fight jihuds and return with enhanced capacity for terrorist activities here. So far, I have received no reply.
There is therefore clearly an urgent need for appropriate interfaith responses. They must be realistic. It is often said that the West is to blame, directly or indirectly, through inept foreign policies or because it is deemed to cause poverty, which is a breeding ground for Islamic disaffection and militancy. Although Western foreign policy has not always been right or helpful, and while poverty may encourage recruitment to fundamentalist causes, those are not the root problems. Many of Al'Qaeda's leading terrorists are the well-educated élite. Their statements and behaviour demonstrate motivation by extremist Islamist beliefs.
One interfaith response that could foster mutual trust would be for moderate Muslims to support publicly the freedom of individuals to change their religion. Freedom of religion is specified in the Universal Declaration of Human Rights, which UN member states have agreed to respect. But imposition of Shari'a law curtails that freedom and has been a contributory factor in terrorist activities and conflicts such as those in Sudan and Nigeria.
There is also a need to encourage moderate Muslims to contain their terrorist co-religionists. Time permits only one example. On my last visit to Indonesia, I was privileged to help to launch a new interfaith organisation: the International Islamic Christian Organisation for Reconciliation and Reconstruction. Former President Wahid is honorary president. He hopes that we can work together closely to restore traditionally harmonious relationships between Muslims and Christians in areas such as Maluku and Sulawesi, which have been torn apart by conflict, but where moderate traditional Muslim and Christian leaders yearn for peace.
I conclude with a tribute to one of those moderate Muslim traditional leaders who face reprisals by Islamic militants. His house has been attacked and his car stoned. Discussing the risks of participating in an interfaith meeting he told me, "My daughter said `Daddy, if you attend that meeting and you are killed, I will be proud of you'". He is an inspiration for us all.
3.59 p.m.
Lord Alton of Liverpool: My Lords, the work done by the noble Baroness, Lady Cox, for reconciliation between the great religions is much to be admired.
Frequently, religion is seen as the cause of wars, and it is said to be the root of many terrorist organisations such as Al'Qaeda, Hezbollah and the sectarian paramilitary groups in Northern Ireland. Historically, religion appears to have been the principal reason for many conflicts, including the Thirty Years War, the Crusades, which were fought under the sign of the cross, and the Ottoman conquests, which were fought under the banner of the Prophet. However. we are all aware that power, domination, bitter resentments and tribal enmities—we should think for a moment about

241
today's shocking news from the Congo—are equally important contributory factors to violence and instability.
It is less easy to find recent examples of large-scale engagements in which religion could reasonably be advanced as the primary cause of conflict. Nor will it have escaped your Lordships' notice that, in Iraq, there is bitter irony in any comparison of the efforts made by coalition forces at Najaf and Karbala to protect two of the holiest cities in the Shia religion with the depredations of Saddam Hussein's secular tyranny. That said, I readily concede that Saddam would dearly like to have turned the war in Iraq into a religious one.
For examples of religious motivation in current acts of violence, we must look instead at so-called asymmetric warfare, of which terrorism is one representation. Asymmetric conflicts involving largely Christian minorities include those in East Timor, southern Sudan—to which the noble Baroness just referred and which I visited last September—where close on 2 million people have died, Pakistan and northern Nigeria, among others. If there is state oppression, individuals often strike back in the name of their religion. The discontent motivating fundamentalist Islamic militarism is not primarily or even significantly the result of religious persecution; it is more a product of oppression, frustration, poverty, lack of a political voice and damaged pride.
If we in the West seriously wish to tackle the growing threat from what is simplistically referred to as Islamic terrorism, we should consider in depth the whole range of underlying causes of terrorism, rather than attributing it to religious differences. Anyone who has visited Palestinian refugee camps—my noble friend Lord Wright of Richmond referred to that issue—knows that the hopelessness festering there will inevitably breed another generation of suicide bombers, if the cause is not tackled.
In addition to tackling the underlying causes of alienation, we should ensure that the centrally declared tenet of western foreign policy should be the world-wide promotion of freedom of religion and conscience. That would be the best antidote to religiously influenced terrorism. What regime exists anywhere in the world that respects freedom of religion and conscience and is also a haven for terrorists? There is none.
A government's guarantee of freedom of religion and conscience is a cornerstone of a democratic society. Without religious freedom, society is destabilised, deep tensions are created and human dignity is impaired. Where freedom of religion and belief is protected, religiously motivated terrorism will not take root. That will be a major challenge for Islamic societies, but not only for them. As the noble Lord, Lord Desai, said, the rise of Hindu nationalism in India and the growing religious tensions in eastern Europe illustrate that the problem is spread far and wide.
We must be better informed in assessing the situation in individual countries. We could do worse than emulate the United States' International Religious
242
Freedom Act and its appointment of an ambassador-at-large, with a mandate to report annually to Congress on the situation in particular countries. If freedom of religion and conscience is upheld and underlying political grievances are addressed, the causes of religious terrorism will be assuaged. It that does not happen, the future will, I fear, be bleak, and there will be continued threats to global stability and security.
It is timely and welcome that your Lordships should debate such important matters. We are all indebted to the right reverend Prelate for enabling us to do so.
4.4 p.m.
The Lord Bishop of Portsmouth: My Lords, my friend the right reverend Prelate the Bishop of Oxford has worked for a long time as co-chair of the Council for Christians and Jews. That should be acknowledged this afternoon. He is to be warmly congratulated on introducing a debate that it would be an understatement to describe as timely.
I shall take a Jewish starting-point and quote from the Chief Rabbi's book The Dignity of Difference. He writes:
"One of the great transformations from the 20th to the 21st century is that whereas the former was dominated by the politics of ideology, we are now entering an age of the politics of identity".
He goes on to observe, perhaps less uncontroversially:
"That is why religion has emerged, after a long eclipse, to become so powerful a presence on the world stage, because religion is one of the great answers to the question of identity".
I wonder whether there is some mileage in examining more closely the supposed shift from ideology to identity and the re-emergence—the possible re-emergence—of religion as a serious player on the world stage, including Europe. The concept "From ideology to identity" explains many shifts in our national life that come, again and again, before your Lordships' House, in debate and legislation. The Regional Assemblies (Preparations) Bill is one example. The phenomenon of the re-appearance of the chough—a cousin of the crow—with its red bill is described as symbolic of Cornwall. I am not being facetious; I am making a serious point. So many of our attitudes and motivations show a discernible shift from being based on ideology—what we should do on the basis of commonly held political, social or religious views—to being based on identity—who we are in relation to others—with an increasing concentration on boundaries that must be defined and, perhaps, exerted in exclusive ways that can lead to violence, among other things. Al'Qaeda has an ideology, but its ideology is predicated on a strong and exclusive sense of identity.
Secondly, there is the suggestion that, in this changing world, religion is re-emerging because it provides for people one of the answers to the question of identity. Here, I know, we are on tricky ground, but it is right that the debate should encourage us to get onto that ground. I support that suggestion, but not out of any triumphalist sense of relief that, somehow, we can turn the clock back to a pre-Enlightenment view of faith and the world. Anachronism—in

243
philosophy, religion or politics—has never served us well. I welcome the suggestion because it explains many tendencies, including the threat of global terrorism, the export of religious hatred from the Indian sub-continent to this country, which we have discussed in the Select Committee on Religious Offences, as well as more mundane manifestations, such as the increased interest in religion as personal therapy and as a form of self-exploration through new routes that is apparent in bookstalls up and down the country.
In facing such changes, we must grapple with the question of fundamentalism. It is not the same as being traditional or traditionalist. Fundamentalism is another post-Enlightenment phenomenon, first applied to religion as a reaction to excessive change. It can be applied to other areas of life, politics included. A fundamentalist assessment or judgment is usually a bad one; it is easy and quick and applies the letter of the law in an outmoded way in a search for rigidity, in order to take a stand and be seen to take a stand. It is based on identity, rather than ideology. Fundamentalism's main symptom, besides fear, is an inability to be self-critical. Fundamentalism can come across in secularist ways. Secularist fundamentalists, for example, blink at the popularity of church schools in our Muslim and Jewish communities.
As we all know, when we want to make a point strongly—never in your Lordships' House, of course—violence can be a form of communication. The great spiritual traditions of the world's religions contain many strands of profound self-criticism that have pared those traditions of distorted dogma, the seedbed of violence as a way of life. Religious self-criticism is not the preserve of the theologian; it should be the equipment of every struggling believer, including the religious atheists in our midst. Nor does self-criticism lead to a bloodless, cerebral set of beliefs; it can clarify and, I would suggest, help to make us humble.
Fifty-eight years ago today, a German Lutheran pastor was executed in the closing weeks of World War II for his part in the attempt to kill the Nazi dictator a year earlier. Dietrich Bonhoeffer can be properly described as the patron saint of religious self-criticism. He was acutely aware of the need to be faithful to one's religious tradition and to one's belief in its uniqueness, but, at the same time, to be aware of a much changing and exciting world. It is a vocation that I would say is worth following.
4.10 p.m.
Lord Judd: My Lords, Portsmouth is, indeed, fortunate to have the right reverend Prelate among the leaders of that community. This is an important debate, for which we should all be deeply grateful to the right reverend Prelate the Bishop of Oxford.
Last night on "Newsnight", my noble friend Lord Filkin was speaking for the Government in response to anxieties expressed by the Islamic community in the United Kingdom about the war in Iraq. He said that while he respected its position, it was
244
based on their faith and he seemed to imply that, for that reason, the difference in perception between it and the Government could not be bridged.
I wonder if he and the Government would reflect on that. Does not such an approach tend to institutionalise divisions within our society? Can it not be interpreted as the language of exclusiveness rather than inclusiveness? The Islamic community is every bit as much part of the United Kingdom as any other community. In our democracy the insights and global connections which Islamic culture brings to our national life should be welcomed and seriously considered, not, perhaps inadvertently, portrayed as something to be sidelined as separate and predictable.
We are faced with a paradox. The world is inescapably interdependent. But it is deeply divided between those with power and the excluded. We can advocate the redistribution of wealth and resources. We can call for greater social justice. But these, without a redistribution of power, will not, of themselves, bring global stability. The strength of burning resentment at disempowerment cannot be overestimated.
In Chechnya, the Middle East and, now, the Gulf, the intransigence of Russia and the West—not to mention Israel—is counterproductive. It has marginalised the moderates and played into the hands of the extremists who seize the flag of faith for their fundamentalist cause and as their rallying point for the dispossessed.
Meanwhile, in the West, our own value system has become dominated by materialism, by ego-centricity and by quantitative concerns. Indeed, too often our education system is ever more preoccupied with quantity. This culture exacerbates hostility and anger of the dispossessed. It is, I suggest, no accident that amid such selfishness in the United Kingdom and the United States our own simplistic, fundamentalist sects become attractive to some, with their emphasis on a vertical link to God, on self and on personal salvation to the exclusion of social responsibility.
Truth is complex. We need to rediscover the challenge of facing up to that complexity. We need to celebrate diversity and enjoy dialogue. We need to value creativity and originality. We need, above all, to rekindle tolerance, humility, mutual respect and understanding as the hallmarks of civilisation. Wisdom and intellectualism, as distinct from cleverness with its blinkered arrogance, should be at a premium.
With that wisdom and intellectualism, and with them reasserted in our educational system, we may, I hope, come to see that morality has more to do with distinguishing between the good and helpful compromise and the unacceptable compromise than it has to do with denying the validity of compromise at all.
After the horrors of September 11th, President Bush allowed himself to use the fateful word "crusade". History never repeats itself, but there are profound lessons to be learnt from it. The Normans and the Franks were, of course, however dressed up in faith, driven by a search for new land. But what Steven Runciman wrote

245
in A History of the Crusades is perhaps highly relevant to our immediate situation. He wrote:
"The triumphs of the Crusades were triumphs of faith. But faith without wisdom is a dangerous thing. By the inexorable laws of history the whole world pays for the crimes and follies of each of its citizens.
In the long sequence of interaction and fusion between Orient and Occident out of which our civilization has grown, the Crusades were a tragic and destructive episode.
The historian as he gazes back across the centuries at their gallant story must find his admiration overcast by sorrow at the witness that it bears to the limitations of human nature.
There was so much courage and so little honour, so much devotion and so little understanding.
High ideals were besmirched by cruelty and greed, enterprise and endurance by a blind narrow self righteousness; and the Holy War itself was nothing more than a long act of intolerance in the name of God, which is a sin against the Holy Ghost".
4.15 p.m.
Lord Selsdon: My Lords, on 15th October 1999, approximately four weeks before the unfair and unjust eradication of 650 hereditary Peers from your Lordships' House, the most reverend Primate the Archbishop of Canterbury moved a Motion to draw attention to the role of religion in effectively promoting international order and doing away with international disorder.
Eight of your Lordships who have spoken today spoke in that debate. It was quite a remarkable debate, on a Friday—a fish day. None of the right reverend Prelates present today spoke then. I recall, at that time, the words from the prayer used by the right reverend Prelate the Bishop of Portsmouth today—that is, setting aside
"all private interests, prejudices and partial affections".
That is what we must do if we are to combat what is taking place in the world today. In preparing for the debate, I looked at some of my old school books trying to remember. I found reference to a great chap—Titus Livius Patavinus—who wrote 14 years, or thereabouts, after the death of our Lord, that one should forget not the nature of the war or the nature of the enemy. The question is: are we talking about enemies, and what is the enemy?
During debates on the terrorism Bill, I took the liberty of asking the noble and learned Lord, Lord Falconer, whether, if I wrote to him, he would be kind enough to define the difference between a terrorist and a freedom fighter. He said that it would be rather difficult and that he would prefer that I did not write. So I did not write.
On looking at the 240 countries or so in the world, I asked how many were dictatorships—whether led by a king or by a ruler? And if a country has a ruler or a king, is he malevolent or benevolent? Of course, we must accept that the majority of countries in this world are dictatorships in one form or another. But who is the enemy, if there is an enemy, and who are the friends?
Of course, the friends are religion and the Church. If we concentrate more on the 3.5 billion people who
246
are people of the book—that is, Jews, Christians andMuslims—they all say "Don't kill". The Koran says,
"He who kills shall surely himself be killed".
Therefore, aggression and death is against all these three religions. I shall not go on to other parts of the world. But in the previous debate I declared my interests and said that having been involved with trade I had the advantage or the disadvantage of sitting down in almost all the terrorist—or so-called terrorist—areas of the Middle East, with Prelates, great men and others, debating the role of religion.
The strange thing is that on looking at the trade routes, from the silk route and others, one can see that everyone ended up on the pilgrim route to Dakar. If one looks at the distribution of people of Jewish faith—approximately 20 million in the world—one sees that the biggest group is, of course, in Israel itself, then in Dakar, then in Sao Paolo, and then in New York. But the number of Jews in the world is relatively small—the same number as Sikhs. Moreover, on looking at the number of Muslims—842 million—or those who may promote themselves as such, and Christians, one realises that there are divisions in religious society.
But what is terrorism? Terrorism is government by fear. I believe that a terrorist is someone who uses fear to coerce governments or to coerce the community. Therefore anyone who uses fear or terror is in effect a terrorist. When we publish information that frightens the public about sarin and other toxic substances, we border on being terrorists. The United States too has frightened people. It could be argued that the Government of Iraq are a terrorist body.
One of the difficulties and the beauties of the English language—Churchill remarked that Britons and Americans are two peoples separated by a common language—is its interpretation. I find it difficult to accept the fact that there is a "war on terrorism"; that we must combat terrorism is important. Furthermore, two of the more vital factors in all this are the use of religion and the prevention of misinterpretation.
I find that those factors bring three things to people's minds. First, they look for a reason. If they find that the reason is not acceptable, they look for an excuse. Finally, they may have a motive. But the reasons, excuses and motives behind terrorist activities in the world are still very unclear to me.
4.21 p.m.
Lord Hylton: My Lords. I shall concentrate on interfaith responses. I have to declare a non-financial interest as a co-founder of the Ammerdown Centre, situated in Somerset near Bath and Bristol. It adjoins my family's traditional home and benefits from gardens, woods and parkland. It opened in 1973 as a residential centre for ecumenical Christian renewal. with an open approach to all aspects of life in the South West and beyond.
Very soon it was actively engaged in Christian-Jewish dialogue. This broadened into interfaith studies and encounters. Today we support the search for ethics acceptable to the major monotheistic faiths.

247
Like Dr Hans Kung and others, we see such agreed ethics as an essential foundation for long-term peace, in particular in the Middle East, although of course not only there.
The coming year's programme includes a Jewish-Christian summer school, Islamic and Hindu insights into peace-making, a study on non-violence in Gandhi and Martin Luther King, Christian approaches to peace-making and introductions to Buddhism. Many other courses deal with aspects of caring and social service. Every month there is a Taize prayer group, as well as interfaith prayer.
Ammerdown is committed to the theme of reconciliation in all its facets. The trustees wish to help improve race and community relations in Britain, while contributing in any way they can to world-wide peace. At the moment an appeal is in hand to bring the premises up to the requirements of the 21st century and to provide specialist services for some users.
I move now from Somerset to Bosnia in the former Yugoslavia. There, the Reverend Donald Reeves has been successful in bringing together a civic forum in the city of Banja Luka in an area which saw ethnic clearances and atrocities. The forum includes several cultural and political traditions. He has established a project called the "Soul of Europe" with the aim of rebuilding the Ferhadija mosque. Noble Lords may know that this place of worship was built in the 16th century by Sinan, the great Ottoman architect. The beautifully decorated building, situated in the centre of the city, was loved by Serbs and Croats as well as by Muslim Bosnians. Towards the end of the fighting it was totally destroyed, along with 16 other mosques and 10 Catholic churches.
Why, one may ask, should an ancient mosque with no large congregation now be rebuilt? I think there are two reasons. The first is one of justice. It is not right that a small group of extreme nationalists, not representative of most Bosnian Serbs, should be allowed to remove every trace of Islam as if it had never existed. Ethnic clearance and cultural genocide cannot be allowed to prevail.
The second reason is co-operation. This project is the first of its kind anywhere in Yugoslavia or south-eastern Europe. It follows a trail already blazed by St Ethelburga's in the City of London. It is highly significant to the 15 million or so European Muslims. The building can and should be rebuilt by all the faiths working together. It will symbolise the coexistence of Muslims, Christians and Jews that was so typical of life in Sarajevo over many centuries. It points to the kind of plural and culturally diverse Europe that we all want to see rising from the ashes of recent wars. It could provide a good omen for a peaceful Middle East.
Fundraising for the project starts this year. I commend the Soul of Europe project and I trust that your Lordships will help it to create a solid bridge of reconciliation.
4.26 p.m.
Lord Haskel: My Lords, perhaps I may draw the attention of noble Lords to working paper 9074, published by the US National Bureau of Economic Research in September 2002. This paper studies the complex issue of terrorism, its nature and its causes. Time does not allow me to describe the surveys and analyses within the paper, but the writers agree with my noble friend Lord Desai. They conclude that terrorism is not a cry of anger and rage against poverty and deprivation, as the noble Lord, Lord Moynihan, and other noble Lords seem to suggest. It is a violent form of political engagement; violence carried out largely by middle class people.
That rings true for me. First, it rings true because of the huge number of people of all faiths who condemn terrorists acting in the name of God. They condemn terrorists for distorting and perverting religious precepts. As other noble Lords have said, it is a source of deep concern and worry to most Muslims, most Jews and most Christians that religions of peace can be hijacked in this way in order to convince many, especially the young, that violence is the correct path to God.
Secondly, it rings true because although some who commit acts of terror may claim to be acting in the name of God, they are but the tip of the iceberg. Behind them lie the recruiters, the information gatherers, the bomb makers and the trainers. The bureau paper implies that all those support mechanisms are politically motivated, middle class and use religious zealots to commit political violence masquerading as a violent form of theological discourse. I have used the word "masquerading" because this is not religion. It is the violent politicisation of religion.
I agree with my noble friend Lord Desai. What terrorists are attacking is not our religious belief, but our liberal democracy. To defend it, we have to do far more than simply break the link between religion and terrorism. We have to show that maintaining that link negates the essence of our traditional way of life. Otherwise we shall fall into the trap of demonising faith communities. I agree with the right reverend Prelate the Bishop of Oxford that there is absolutely no justification for attacking the Muslim community as a whole for the actions of the few who undertake suicidal attacks and claim to act on behalf of Islam.
Similarly, there is absolutely no justification for attacking Jews in Europe because of those whose actions are perceived to be abusing the human rights of Palestinians. All of us should be alarmed at the reported attacks on Muslims in America, which have grown by some 1,700 per cent since 9/11. Equally, we should all be alarmed at the rise of anti-Semitism, which is undoubtedly flaring up again at this time of heightened international and Middle East tension.
Here I must declare an interest and recommend to noble Lords a book, soon to be published, of recent essays on the current position with regard to anti-Semitism. It was commissioned by the Institute for Jewish Policy Research, of which I have the honour to

249
be the current president. The institute has a long and distinguished record, in particular in the fight against anti-Semitism, racism and xenophobia. This work throws much-needed light on a phenomenon that has generated heated debate over recent months. But readers will be struck by the similarities between the expression of anti-Jewish prejudice and the course and development of Islamophobia.
This brings me to the ecumenism to which the right reverend Prelate referred. I congratulate him on introducing the debate. The right reverend Prelate the Bishop of Portsmouth is right. Ecumenism can teach us to value the differences that make up mankind. This is what makes interfaith work important.
Of course nothing replaces good relations as a means towards understanding and tolerance; of course it has an important place in our liberal society. But it is this very liberal society we are defending against terrorism. We are defending our liberal ideals; our way of life. So those involved in interfaith work have to address the circumstances which allow terrorism to become the means of attacking not only our spiritual and theological beliefs but our way of life.
This means stepping outside the relatively safe dialogue or trialogue on matters spiritual and theological. It means also addressing the issues of human rights abuses, social justice, the suppression of cultural and educational expression, our desire for self-determination. These are the things that terrorism sets out to attack; these are the issues to which we have to give precedence; these are the values that we hold in common.
I agree with my noble friend Lord Janner that mutual understanding and respect for our religious traditions are important, but they cannot come first in the face of terrorism if we are to build a safer world and cohesive societies on the basis of our common concern for the fate of humanity.
4.32 p.m.
Lord Tanlaw: My Lords, it is just possible that the Minister may recall an intervention I made in an earlier debate on Afghanistan when I suggested that the pathogen of global terrorism could not be cured with a Harry Potter solution because it was essentially a Lord of the Rings problem. By that I meant that the use of deadly fireworks such as we have witnessed recently over Baghdad can destroy only a visible enemy on the battlefield; it is not expected to win over the hearts and closed minds of a religious population contained in homes darkened by war.
So how can we identify what has gone wrong with a religion that can breed the violence of 9/11 and its aftermath all around the globe? For a start, it might be helpful if the leaders of an interfaith response could define for lay people what constitutes "spiritual religion" and what constitutes "political religion".
250
The most reverend Primate the Archbishop of Canterbury may have partially supplied the answer in this year's Dimbleby Lecture. If I can paraphrase his words, he said:
"the true believer in the Jewish. Christian and Muslim worlds"—
to which I would add the Hindu and Buddhist worlds—
"must first seek an awareness of his or her relationship with the eternal".
As someone who is a devout pantheist at heart, I feel sure that these words are an acceptable basis of "spiritual religion" as conceived by individual worshippers from all faiths and those who have none.
The most reverend Primate went on to say that,
"political or institutional religion has a history of violence … and that religions have work to do intellectually to defend their basic credibility".
If the most reverend Primate is saying that elements of the world's great religions have had to resort to political fundamentalism because the tenets of their religion have become out of date, then I would have to agree with him. And if this has led to an increased political fundamentalism in Christian, Jewish, Buddhist, Muslim and Hindu societies because their leaders have failed to deliver the eternal hopes and visions of their congregations, then I would also agree with him.
Therefore, is it not a matter of urgency that the intellectual repair work recommended by the most reverend Primate is for religions to modernise without delay by adapting to the global information explosion brought by the Internet, which will be available to every child on the planet soon and which will become the main educational tool for societies in the future?
Is it not a fact that fundamentalist regimes can stay in power only by denying education and information to their people from the earliest age? The madrasahs of fundamentalist Islamic regimes are no substitute for proper schooling and were courageously exposed by Dr Mahatir Mohammed, the Prime Minister of Malaysia, on 29th July 2001 when he said:
"In Malaysia, many of the Malays have had their minds controlled through the abuse of religious teachings by the fundamental Islamic party".
He went on to say that Malay children in the fundamentalist states of Malaysia were denied access to science and technology in the madrasahs because their leaders said that it was against the Koran. This is a distortion of true religion.
By the same token, I understand that some states with fundamentalist Christian administrations in America exclude the works of Darwin from the official educational curriculum because they are considered to be at variance with the book of Genesis. This is a distortion of true science.
Is there any way forward for the future, where the Government and interfaith leaders can agree how political fundamentalism can be stifled at birth and true science and technology taught to our children? As I see it, this can be achieved only by opening the doors of independent single-faith schools to children of all faiths, including those who have none.

251
This week the Astronomer Royal, Sir Martin Rees, predicted that the risk factor in scientific progress is so high that humankind may not outlive the 21st century. Whether the end comes from the impact of a 10-kilometre asteroid or from a suicidal despot's Doomsday machine is quite immaterial; the end of the world is indeed at hand.
However, all may not be lost, for according to Sir Martin and my noble friend Lady Greenfield it will not be long before human beings can transcend biology by merging with computers to download their brains into silicone hardware, thus recreating themselves as resurrection clones.
Meanwhile, back in the real world, we are still waiting with bated breath for Christendom to agree the computus for Easter Sunday, on which it has been working diligently since the Council of Nicea some 1,678 years ago.
It is my considered view that if the world's great religions are to maintain their credibility with their congregations over the next 10 decades they will have to find answers to the entirely new ethical dilemmas posed by space exploration, designer genes, robotics and nanotechnology, to name but a few. If they do not, their only alternative is to revert to fundamentalism.
4.37 p.m.
Lord Ahmed: My Lords, I, too, thank the right reverend Prelate the Bishop of Oxford for giving the House the opportunity to discuss this important issue.
Some people today would say that any discussion about global terrorism is a discussion about the subversion of the moral argument, propaganda and deception. We are discussing global terrorism and yet most noble Lords who have spoken so far have referred to Muslims and terrorism. From the outset I should like to repeat that there is no such thing as "Islamic terrorism", which is the creation of silly, irresponsible and extremely dangerous spin.
Like all major religions of the world, Islam does not promote terrorism; it is a religion of peace. But when Muslims feel that they are being oppressed, that they are not getting a fair deal, they react very much like other oppressed people in the world.
The noble Lord, Lord Janner, said that in India he met a leader who said,
"Where there is terror you cannot have a dialogue".
You also cannot have a dialogue and peace while there is state terrorism, oppression, rape and torture in countries such as Kashmir.
While we must condemn acts of terror we must also strive to understand the reasons for the terrorists' anger and reaction, however irrational or unacceptable they may seem to us. When the US Navy ship was recently attacked on the coast of Yemen, it should have reminded us that Japanese kamikaze pilots blew up the "Prince of Wales" as she sailed towards Singapore and Burma in the 1940s. Even then there were suicide bombings.
252
But history has shown us that it has a strange relationship with the people we call "terrorists" today. Most of those we consider to be terrorists are regarded by their own people as freedom fighters. Of course, "terrorists" such as Mao, Jomo Kenyatta, M r Begin, the former Prime Minister of Israel, and Mandela are now acknowledged as legitimate leaders in their own countries. I wonder how George Washington was seen by the British government when he fought for American independence.
I would like to say a few words about British Muslims. Many young people are resentful and feel utterly marginalised in a society that continues to be racist and Islamophobic. Yet, as all signs point to dangerous situations developing in our inner cities, the authorities seem oblivious to what is going on. There is a common perception that the Home Office and the Foreign Office have tried to create a new leadership within the Muslim community and, in the process, have deliberately marginalised legitimate leaders of the community—imams, councillors, parliamentarians and grass-roots activists. I am afraid this is not the time to play politics with the community.
A few years ago, many of us celebrated the creation of the Muslim Council of Britain, as an umbrella organisation of the Muslim community based on the structures of boards of deputies. Unfortunately, the MCB has failed to provide leadership and does not relate to the issues of ordinary British Muslims. It is seen more as a middle-class club for a certain section of the community rather than a grass-roots organisation.
We have a community in which individuals elevate themselves to be judges of the Sharia court and groups call themselves the Muslim Parliament of the UK, giving the impression that they have judicial and legislative powers. There are many individuals running Sharia councils for marriage and divorce purposes. I fear that unqualified individuals will practise illegal acts too.
I believe that there has to be a minimum qualification for the imams, as the right reverend Prelate the Bishop of Oxford said; Dr Zaki Badawi has also been saying the same thing. It would be desirable for imams to communicate in English to engage with our youth who no longer speak Urdu, Punjabi or Gujarati. This will bridge the gap that exists between the mosque and the British Muslim youth who are in search of their identity. A growing number of Muslim youth have been influenced by extreme ideologies in colleges and universities. Of course "rent a quote" organisations create problems in the Muslim community as well as in mainstream society.
Finally, let me make it clear that the majority of our people here in Britain want the same as their brethren anywhere in the world—to have respect, to be listened to, to be appreciated and to be taken seriously. They want to engage, participate and work with others. These are historic times for all of us—a time to build bridges, initiate dialogue and deal with real issues affecting real people. Otherwise, we will all reap the dire consequences of our myopic and partisan initiatives.
4.43 p.m.
Baroness Richardson of Calow: My Lords, I, too, am very grateful for the opportunity to take part in this debate. I am glad to have heard the contributions from so many of your Lordships. I want to limit my contribution to some considerations of interfaith relationships within this country.
There is no doubt that global terrorism and the military conflict have had a negative impact on many of our faith communities. There is heightened anxiety and tension. I am glad to have heard the noble Lord, Lord Ahmed, speak about British Muslims; there is more anxiety among British Muslims and in the Jewish community. It is harder to hear the moderate voices because they are vulnerable to suspicion within their own communities. There sometimes seems to be a conflict between loyalty to the United Kingdom and the solidarity that wants to be expressed with faith communities throughout the world. There is particular anxiety among Asian Christians in this country and in other parts of the world.
The heightened tension in the world has had a positive impact on interfaith relationships. Those that were strong already have been immensely strengthened by a determination to stand together in solidarity with each other. Many new initiatives have been taken in places where they were not already strong.
The Churches Commission for Inter-faith Relations, of which I am moderator, issued a leaflet inviting local communities to undertake certain activities together in order to strengthen the role of faith communities within the whole of community life. Mention has been already been made by the noble Lord, Lord Janner, of the invaluable work of the interfaith network which has brought people together in friendship. Those friendships remain strong and provide a strong framework within which new relationships can be made.
I also want to recommend to your Lordships the material that is offered for the week of prayer for world peace, which happens each October. It draws on the sacred writings of all the major faiths in order to offer help to other communities.
There is much work going on. One of the strong pulls is through the respect initiative which grew out of the wonderful, magnificent shared act of reflection and celebration which was held in the Royal Gallery in the millennium. Out of that has flown the very rich stream which is engaging young people to work together in local communities and form friendships across what seem to be barriers in order to make strong relationships upon which communities in Britain can find their own strength.
As has been said, all religions speak peace and want to act against violence. Most recognise that there is a higher authority to whom we are accountable and most seek the common good.
If your Lordships will allow me, I want to offer a simple reflection which comes from the core document of my own faith. Jesus was having a conversation with a lawyer who was troubled in his mind about what faith meant, as to how to relate both to his God and to
254
the community, to whom he had a duty of care. Jesus told him a story about a man who was set upon by thieves and left wounded at the roadside. He was completely ignored by two respected religious leaders of his own faith community and was cared for by a member of a different faith altogether, at great cost to himself. Jesus said, "Go and do likewise". I recognise that it is very much easier to give comfort, support and help to the wounded victim at the roadside than to address the issue of the robbers in their act of terrorism. The only record that I can find of what help Jesus gave in dealing with that is that he said, "Love your enemies and do good to those who hate you". But there is not a great deal of strategy that we can gain from that.
I believe strongly that the suspicion, the hatred, the blame, the in-fighting of one religion with another cannot help in any way in addressing the global terrorism in which all are involved. We need to find those parts of our faith which can give a strong lead.
Early in this debate, the noble Lord, Lord Desai, spoke about the ideology which says, "In God's name, kill". I think all faiths will also say, "In God's name, do good and seek peace and pursue it". If we work together in a strong coalition of faith, in this country and elsewhere, surely there is hope for the future.
Whenever I say the Lord's Prayer, I say, "Thy kingdom come", and I believe that that means for every single person on Earth.
4.49 p.m.
The Earl of Sandwich: My Lords, I fear I will offend against the law of the noble Lord, Lord Desai, by joining in this debate at all. We no longer call ourselves a Christian nation.
We benefit from many religious minorities and, along with them, a strong sense of religious revival. This may, to some extent, be a mourning for our lost religion and especially for a sense of values. We live by humanitarian and not religious rules. Yet many of us who are called Anglican long for the certainty of faith expressed over so many years by our own saints and martyrs. That makes some of us envious of other faiths, as though reluctantly accepting that no revival can ever quite bring us back to where we were. Diversity, instead, is the fashion of our generation.
I remember the innocence of the 1960s, when so many of us left home and traditional religion in search of other ideas and cultures. In my case, the destination was the shrine of a famous Muslim saint, in Nizamuddin. on the southern edge of Delhi.
Looking back, I recognise how well insulated Anglo-Saxons have been in the past century. It is true that it took a fighting spirit to win through two wars and keep others at a distance, but we have to admit the extent to which our privileged caste and our island mentality has kept us away from the world's horrors. Those of us who have continually travelled and visited the poorest countries see how fortunate we are materially yet how deprived we are spiritually. We must recognise that we now live in a changed world in which even diversity is not enough if it has no legal

255
framework. Globalisation has brought improved communications and, perhaps, fairer trade, but it has also forced societies into much tighter arrangements, sometimes against their will.
Countries cannot be squeezed into convenient brackets of tolerance and human rights, just to suit our international lawyers. As noble Lords have said in previous debates, and as the writer Malise Ruthven has described in his new book, A Fury for God, a Manichaean spirit is abroad—a belief that we live in a time of good and evil. We easily assume that all the evil is on the other side, in the Middle East. Yet those who have observed the plight of Palestinians at close quarters see it differently. In his analysis of the Al'Qaeda, Ruthven refers to Sayyid Qutb, the Egyptian scholar who wrote In the Shadow of the Koran in prison and was hanged in 1966, aged 60, as a member of the Muslim Brotherhood. Qutb is a symbol for many educated Muslims who have been, or felt, corrupted by Western civilisation and have rejected American ideals as the embodiment of evil.
Only through such writers can we glimpse the vision of young fanatics all the way from Karachi to Jerusalem, reading the Koran, as many read the Old Testament, who believe that their only way out is the ultimate personal sacrifice. It is an historic religious act, not confined to Islam, but described by all who have witnessed martyrdom throughout the ages. Like so much in the Bible that we have left behind, some of the precepts are easily distorted. While martyrdom is claimed to be acceptable in Islam, suicide has not been sanctioned at any time since the 7th century, when various hadith, or sayings of the Prophet. unambiguously condemned it.
I agree that religion can be no excuse for terrorism, but it may help us to understand it. There are few of us here, if any—even refugees from the ghettos—who have had the experience that develops the mindset of the suicide bomber. I fully take the point made by the noble Lord, Lord Haskel, about the people who are behind that person. But to understand that, I still believe that we must look not only to the Al'Qaeda élite but to the situation of the oppressed. There is no time to go into the Palestinian situation, to which noble Lords have already referred, but reports show how moderate Palestinians feel under occupation—not the fanatics. We know from many sources how close to the margin they are living. Like the noble Lord, Lord Ahmed, I believe that, while they are deemed to be terrorists, they are themselves the victims of terror.
The images that we in the charities are determined to present of a peaceful world of interfaith dialogue, of reconciliation and conflict, of free and fair trade, necessary as they are to us and our supporters and even to our religion, are still pitifully removed from the realities of war, violence, suicide and other forms of brutality that dominate the news. Like other noble Lords, I feel that we can only work harder towards reconciliation. We can only reconcile the two extremes through a greater mutual effort to understand the drama of individual human life struggles.
256
Finally, I can testify to one very effective interfaith channel, in relation to humanitarian aid in the Middle East. I refer to the partnership between Christian Aid and organisations such as Islamic Relief. The benefits of that are felt at both ends, in the field and equally by those supporters in communities such as those in Birmingham who may be experiencing a partnership with another faith for the first time. These are the means by which we can defeat the appalling mistrust bred by terrorism.
4.55 p.m.
The Lord Bishop of Southwark: My Lords, I, too, am grateful to the right reverend Prelate the Bishop of Oxford for enabling your Lordships' House to debate this important issue at this significant time in history.
It would be idle to deny that there is a religious element in many conflicts that face the world today. Superficially, it would be easy to portray the current war in Iraq as a war between Christianity and Islam. There are fundamentalist Christian voices in Bible belt America speaking the language of crusade. There are Islamic voices of protest on the streets of Cairo, Oman and throughout the Middle East shouting the language of jihad. But the ideology of Saddam Hussein and the regime he led was more akin to secular fascism than to Islam. Indeed, bin Laden regarded him as one of his bitterest enemies because of his disinterest in Islam. The fact is that Christians and Muslims were to be found among Saddam Hussein's closest Ministers, and Christians and Muslims together with those of other faiths will have to be involved in rebuilding Iraq, if it is to have a more peaceful and prosperous future.
Of course, there are fundamentalist Muslims involved in global terrorism but, lest we think that Islam has a monopoly in such terror, stories in the news today might point us in a different direction. President Bush has met the Prime Minister in Belfast and engaged with the leaders of political parties in Northern Ireland, seeking to build a democratic and peaceful future in that land. Such a hope would have seemed a utopian dream a couple of decades ago, when terror was common currency on all sides, and Roman Catholicism and Protestantism gave a spiritual undergirding for some of that terror. It is ironic, is it not, that British troops have been so skilled in combating terror on the streets of Basra because of their long experience of combating terror on the streets of London and Belfast?
Another news story today involves yet another great world religion. A new Jewish enclave or fortress has been built in the heart of East Jerusalem in a traditional Palestinian sector. Please God that that symbol does not become one more trigger point for more acts of terror. Nor is it only the Abrahamic faiths—the faiths of the Book—that are prone to terrorist acts.
I am grateful to the noble Baroness, Lady Richardson, for her encouraging words about the work of the interfaith network of Britain and Ireland. I co-chair that network, which exists to promote harmony, respect and co-operation between the world faiths in Britain. We try

257
hard not to be diverted by overseas issues, but global issues have a habit of breaking in—not just Iraq or the situation in Israel/Palestine, but disputes involving other faiths.
We have been most exercised by the strong feelings engendered in the UK by the destruction by Hindus of the 400-year old mosque in Ayodhya because it was claimed on the site of a previous Hindu temple marking the birthplace of Ram. Last year, a train carrying 500 Hindus back from a gathering was attacked and set on fire, and some 58 adults and children were burned alive. Following those deaths, as many as 2,000 Muslims were killed in rioting in Gujarat. Meanwhile, the dispute about self-determination in Kashmir is a longstanding sore between Muslims and Hindus.
With all of that accumulated evidence, I for one do not need convincing that there often is a religious element in global terrorism. There are always those who are prepared not only to die for their faith but to kill for it.
But that is not the whole story. For, if religion is part of the problem of terrorism, it is also part of the solution. All the world's religions, by their very proximity today, are challenged to ask each other what they most deeply believe, and to see how far they can share those beliefs, in order to draw strength from each other on behalf of the human family so as to save it from failure. All of us who are people of faith are faced with the challenge of trying to promote respect for people of other faith traditions and to co-operate with them where possible, at the same time trying to ensure that we are not diluting the essential truth of our own faith but finding fresh and positive ways of living it out.
We should gain encouragement from the experience of 12th and 13th century Spain, where there was an ideological overlap between Islam and Christianity which enriched both religions. Islam was the vehicle by which Christian scholars rediscovered the classical heritage of Aristotle and Plato; and, out of that, St Thomas Aquinas formulated a systematic account of practical faith and civic action which still undergirds much of Christian thinking today.
The ingredients in our religious dialogue are plain: how to disagree with dignity and respect; how to disagree with tolerance; where to bear distinctive witness; the understanding that everyone has the right not to become someone else's clone. But, above all, we should not be standing face to face in argument, but standing shoulder to shoulder in meeting the needs of the wider community. When it comes to working together to serve the world, the Jewish scholar, Hillel, put it briefly but well:
"What is hateful to you, don't do to others".
5.2 p.m.
Lord Wallace of Saltaire: My Lords, this is one of those unusual debates which could usefully have been longer. It would have been helpful if we could have heard for longer from those participating. I am grateful to the Government Chief Whip for the fact
258
that, halfway through debate, a note was passed saying that those winding up on this and the Conservative Front Bench could speak for 10 minutes rather than five. I shall struggle not to take the full amount of time.
We are talking about terrorism and the rationale for terrorism. There have been a whole range of rationales. In terms of state terrorism, there was the Inquisition in Spain, the Gestapo in Nazi Germany and the NKVD in Stalinist Russia. In terms of religious terrorism, there have been assassins, thugs and others; but, most relevant today, those inspired by a rage against the established order, modernity and all the change forced upon traditional society. In 19th and 20th century Europe that was provided by anarchists, revolutionary socialists and nationalists. Today, in much of the developing world, it is provided by those who have found in fundamentalism—most often Muslim, but occasionally Hindu—a rationale for their rage against the modern world.
I take religion to be a system of belief by which we all live; and in that sense, it is an ideology. What we have seen in the developing world to a great extent is that fundamentalist religion has returned to fill the void left by the collapse in the credibility of Communism and Arab nationalism as creeds for the discontented. We all recognise that in societies that are moving at speed—as was pointed out by the right reverend Prelate the Bishop of Portsmouth—from traditional politics and modes of belief to modernity, with all the sharp dislocation of meaning and identity for individuals and groups that that involves, there is a natural tendency for people to want to find an all-encompassing rationale by which they can live.
The reactions in European societies in the late 19th and early 20th centuries—our own violent, nihilistic and sacrificial ideologies which we saw in Germany, Italy, Russia and elsewhere, and which killed many millions of people across Europe—should give us some limited sympathy and understanding for the problems of a developing world which is going through the same process three or four times as fast as we did. It is easy in Britain to be complacent and to say that we never had a revolution. But Britain moved through these processes much more slowly than any other country which followed us.
The divide that we now face is between liberal systems of belief—I use the word "liberal" in the broadest sense, not in any partisan sense—and fundamentalist systems. By "liberal belief" I mean an attitude to the world which accepts that we cannot "know" in the final and ultimate sense; that we have to live with uncertainty. We therefore have to tolerate difference, and that requires us to have a generosity of spirit, to be inclusive in our attitude to others rather than exclusive, and to be prepared to compromise. My favourite verse in the Bible is:
"and now we see as through a glass, darkly".
My favourite Apostle is St Thomas, because he doubted. That makes politics possible; and it makes open society possible. But it requires a self-confident society, at peace with itself—like medieval Muslim Spain, or the kingdom of the two Sicilies or 19th century Britain.

259
On the opposite side, fundamentalist beliefs require certainty, a world divided between the saved and the damned, between good and evil, between Aryans and Slays and Jews, between orthodoxy and heresy; between the righteous and unrighteous. If there is no compromise, no form of politics is possible. There are even those who would say, "We are the chosen people, and others are the unchosen". That is a problem for all religions. We Christians certainly need to be well aware of the dark side of Christianity, of our own religious wars, persecution and intolerance, as we look at the intolerance which now mars other religions.
After all, the Church of England grew out of this and the bitter lessons of near-religious wars within Britain. I grew up within that tradition. However, looking back on it—I say this in the knowledge that the other day I was attacked by the noble Baroness, Lady Blatch, for not being sufficiently patriotic in my attitude to Britain—when I first went, as a choirboy at Westminster Abbey, into the choir school at Westminster Cathedral and realised that the people there had a different sense of nationalism and of what was possible, I was deeply shocked. I had grown up with a whole set of unthinking, anti-Catholic prejudices. When I first met a member of my own party who was also a Catholic—his name happens to be Tordoff—I was quite shaken and surprised. In the process, I learnt to be rather more tolerant to other aspects of my own religion and, by extension, to other religions. I am proud that my children have grown up with a large number of Muslim and Hindu friends and have understood that others have systems of belief which are also liberal and which are worthy of respect.
Fundamentalism in the developing world is rage against the corruption of states and the failure of modernisation—I refer to regimes in the Middle East, in North Africa and in West Africa; for example, Nigeria and the Ivory Coast. It is the discontented young, looking for an answer, with rage against their own states externalised on to the West, which is seen as supporting them, and against the trivialising values, as they see it, of modernity which the West is seen to promote. Terrorism is the outlet. It is, as the noble Lord, Lord Alton, said, a form of asymmetric warfare. We all recognise that this very often applies to the second or third generation in those countries. It is the first educated generation—the children of those who have gained privilege—who do not find the opportunities, the satisfaction or the comfort in a new society, who are among the most rebellious and who are most prepared to sacrifice themselves.
But we should also be concerned about the drift back to fundamentalism within the West, including within the United States—the divide between "good" and "evil" which simplifies American foreign policy. I am not sure that evil is a term that should be used very often in politics or foreign policy. There are those terrible simplifiers who said that we had a clash of civilisations, and who welcomed that idea. There are those who talk about the United States, as the noble Lord, Lord Black, did in a debate a couple of months
260
ago, as a righteous nation, implying that it is above the law of nations, and that others are less righteous and thus have to obey the law more fully.
There are those who preach the theology of hatred on American television, as I have watched when I have been over there on many occasions. There are those who attack and kill people in family-planning clinics because that is what God tells them to do, and those who are affected by all the deep anxieties about modernity that fill the American south.
Then there is the Jewish right, which believes in the right of the Jews to the whole of Israel, with the right to expel Palestinians as necessary. To them, the settlements are God's will. For example, there are those who assassinated Yitzhak Rabin or machine-gunned Islamic believers worshipping at the tomb in Hebron.
Liberals of all faiths need to stand together in dialogue, and we need to stand up for our beliefs in this country and abroad. As the right reverend Prelate the Bishop of Oxford said as he opened the debate, we need to encourage and cherish the Muslim presence in this country as far as we can. The other day as I walked from here towards Westminster Cathedral—it was after all built by the Catholics in Westminster to symbolise that they are accepted in British society—past the Central Hall, I wondered what we will do with the Central Hall after the Methodists have, we hope, reunited with the Church of England. Could it not become the central mosque, as a symbol that Muslims are now also very much part of the religious interfaith community in this country?
Internationally, we need to think about the symbolism of Jerusalem. It is a holy city for three faiths, and is becoming a contested territory among two of them. We are, we hope, coming out of a war in Iraq, but we have a longer struggle against terrorism. We will win that struggle only if the quality of our values and the confidence of our liberal beliefs are sustained.
5.12 p.m.
Lord Roberts of Conwy: My Lords, we are all grateful to the right reverend Prelate for introducing his well-crafted Motion calling attention to the religious element in global terrorism and appropriate interfaith responses. Hopefully, the responses can be global too, but we are on firmer ground when we take a local, national approach.
I am bound to say that one of the more heartening pictures at the start of the war was of the most reverend Primate the Archbishop of Canterbury, flanked by the Chief Rabbi and the chairman of the Council of Mosques and Imams, proclaiming that the war was not religious and,
"could only be a limited means to an end".
That statement had the support of the Roman Catholic Archbishop of Westminster. There is, as we know, a large measure of doctrinal agreement between the great religions on their attitude to war and the conduct of it. Peace is infinitely preferable but, in the

261
event of war, it must be conducted humanely with every attempt made to avoid civilian casualties and damage.
That common theme was given a positive slant by the coalition forces, with their concentration of bombing on command-and-control centres and their affirmation that the war was not against the Iraqi people but for their liberation. The coalition's success in maintaining that stance has been as variable as the fortunes of the war itself. I am sure that we were all happy to see some peaceful scenes emerging from Baghdad today but, regrettably, civilians have been killed and injured, with ugly scenes of carnage and devastation presented on television throughout the world. Al-Jazeera and Abu Dhabi television presentations have had a tremendous impact on the Arab peoples, who tend to see the war as a United States-led invasion to impose western imperial control on the Middle East.
People's perception of the war is the key to the all-important battle for hearts and minds everywhere. The propaganda war is very real. If those perceptions result in widespread antagonism, hatred and anger, they provide a rich recruiting ground for terrorists and a hasty, superficial justification for their vengeful activities. Many, including President Mubarak of Egypt, fear that the war will provide a fillip to the terrorist cause.
We know that a causal starting point for the war was the terrorist attack on New York's twin towers on 9/11. That attack was, as our Prime Minister rightly said,
"an affront to people of all faiths and of none".
It was that event that prompted President Bush to see an axis of evil in Iran, Iraq and North Korea, and to switch from a policy of containment to pre-emptive action against Afghanistan and now Iraq. The aim was to trample on the roots of terrorism, but it was always conceivable that a consequence of war might be an increase in the terrorist threat.
The second half of the Motion seeks "appropriate interfaith responses". That is right, because terrorism has no part in the mainstreams of the great faiths and will never get their total endorsement. There may be temporary and local support, like the Taliban in Afghanistan, but it is never total, never lasting. The great faiths would never have survived as long as they have were they not conducive to the preservation and betterment of mankind, which terrorism by its very nature is not. It is an aberration; it transgresses the limits, and God does not love transgressors, if I may quote the Koran. I therefore have great faith in the faiths themselves to counter terrorism from within, from their inherent goodness and strength. That does not mean, of course, that they should not be helped in every way, including intellectually and spiritually. There must indeed be dialogue.
Incidentally, it would be interesting to know the outcome of the Prime Minister's statement of intent on 12th November last year, referred to by the noble Baroness, Lady Symons of Vernham Dean, on 16th December, to create bridges of understanding
262
between the faiths and discuss the creation of a specific organisation with the Islamic religious leaders in this country. I am sure that she will give us a report of progress.
The Islamic world has been in turmoil for some time and its attitude very critical towards western materialism—"dry, miserable and spiritless", as Osama bin Laden described it. We must evaluate that criticism and try to show that there is a benevolent aspect to material progress. It can improve people's lives. Our ideologies must somehow be reconciled in that context. Jusuf Wanandi of the Centre of Strategic Studies at Jakarta said in an article that we must,
"seek to understand why some Islamist movements harbour such profound resentment",
towards the US and the West. He continued:
"Many Muslims believe that they have been left behind in the march towards progress".
In the context of present-day Iraq, the provision of food, water and humanitarian aid is universally recognised as of paramount importance. Along with the reconstruction and development of a successful economy, it is proof positive that we care for the people and their well-being. After the overthrow of Saddam's regime, we must ensure a system of democratic government that meets the needs of the different peoples within Iraq, possibly on a federal basis, to prevent conflict and promote harmony between them.
Democracy is not easy to establish. I recall a distinguished German, Manfred Rommel, son of the Field Marshal, telling me that democracy would not have survived in West Germany after the war had it not been for the benevolent dictatorship of the Allied occupation forces. There is food for thought in that remark. It makes the American viewpoint on the governance of post-war Iraq understandable. Ultimately, however, as we all know, only good Iraqis can rule Iraq. A sound, democratic system in Iraq could send a powerful signal to the rest of the region where democracy is in short supply. It will not be welcome to all Arab rulers, but there is a widespread feeling that democracy's time has come.
As so many have said, beyond the frontiers of Iraq, there is the just prospect of a Palestinian state and the "road map" to it. I was delighted to hear President Bush's commitment to the road map yesterday. I talked about the possibility, in Israel, in the 1970s, with Abba Eban, the former Foreign Minister. It was a non-starter then. However, we can no longer doubt that the desperate plight of the Palestinians is a virulent sore which suppurates violence in the Middle East. It has to be healed if peace is to have a chance. The faiths can do much to promote this proposal and hasten its implementation, especially if they act in unison, as I think the right reverend Prelate suggested. We hope that we are on the verge of a new order in the Middle East, but the birth may be painful and the labour prolonged.
A fundamental prerequisite of any co-operation between the faiths is knowledge and understanding of each other. I say that with an acute sense of my own ignorance. We know something of the diversity of the

263
Western world, its states and religions, but our knowledge of the Islamic world is very limited, and so errors abound in our preconceived ideas and perceptions. We have seen a number of such ideas exploded as myths in the current war. Of course myths can be costly in terms of human life.
I listened today to the noble Lord, Lord Ahmed, and I noted the exchange that followed his Starred Question on 16th December last year when he asked what the Government meant by "Islamic terrorist", a term deeply offensive to Muslims like himself. Of course terrorism is anathema to mainstream Islam, but that does not prevent terrorists from calling themselves Islamic and seeking endorsement from fundamentalist and radical elements. We must recognise, I think, that there is deep concern across the world about this war and everything related to it. There have been protests in many Western and Islamic countries by people of all faiths. No one can be certain of the ultimate consequences of the war or the outcome of the war against terrorism, but I hope that we all have faith that good will ultimately triumph over evil. We know, too, that that belief is shared by all true believers in all the great faiths. Therein lies our best hope for the future.
5.23 p.m.
Baroness Symons of Vernham Dean: My Lords, I, too, thank the right reverend Prelate the Bishop of Oxford for proposing this debate. It has been wide-ranging and extremely stimulating. I cannot recall another recent debate in your Lordships' House where I thought that every contribution was so well argued and so very thoughtful.
The right reverend Prelate was right to point out that international terrorism continues to pose grave long-term threats to our interests. The terrorist threat from the Al'Qaeda network and the groups and individuals linked to it remains extremely serious, as do the threats from a number of other international terrorist groups. The past year has shown that terrorists will conduct attacks, including against British citizens, in an ever more indiscriminate fashion. The figures behind those tragedies are truly chilling. Eighteen people, including tourists, were killed in Tunisia in April 2002. Seventeen people died in Mombasa in November. Some 202 people, many of them tourists and most of them young, died in Bali on 12th October. Churchgoers have been bombed in Pakistan on a number of occasions. Voluntary health workers, diplomats and expatriates have been murdered in the Middle East.
The death toll is terrible, but every statistic represents an individual human tragedy—mourning for a family and for friends, and horror for a life cut off in a senseless act of barbarism. The noble Lord, Lord Avebury, may be right when he says that although the groups who undertake these outrages are not formally connected, common threads are apparent in their ideology. There are such threads, which may be cultural, religious or political, and we have to examine what they are.
264
There have also been successes in the campaign against international terrorism. With our partners, including many Muslim countries, we have disrupted the bases of Al'Qaeda, in Afghanistan, and we are working together to set that troubled country back on the long path to stability. Nearly 1.5 million people have returned to that country in a testimony to the hope that they feel for its future. Many of Al'Qaeda's senior leadership have been captured. Most recently, Khalid Sheikh Mohammed—the man who planned the 11th September attacks—was detained with the help of the Pakistan authorities.
As a result of increased law enforcement around the world, about 3,000 terrorists have been put behind bars in Europe, including the United Kingdom, in South East Asia, in the Middle East and in the United States. However, Al'Qaeda still exists. It is still issuing its hideous threats. It is still calling people, mostly young and vulnerable, to its doctrine of hatred, to carry out suicidal acts of terrorism. The latest threats are, of course, against this country and the United States. So the Al'Qaeda network remains dedicated, ingenious and global. The threat remains and will continue. That is the reality that we all face.
Our efforts to combat this threat take many forms. The successes of our police and intelligence services, supported as appropriate by our Armed Forces, are rightly praised in public. What we do not hear enough of is the fact that that is a dangerous and difficult task which they undertake on our behalf. It demands dedicated professionalism, experience and real courage to take on groups of terrorists who believe that they have the right to take human life indiscriminately. However, to begin to deal with terrorism effectively, counter-terrorism requires us to address the conditions that terrorists exploit and—as my right honourable friend the Foreign Secretary said—to tackle the phenomenon of failed states where terrorists can often find a fertile environment in which to prepare their attacks and to recruit support, be it active or passive.
Typically, terrorists seek to exploit social and political grievances for their own purposes. I agree with much of what my noble friend Lord Judd said. Like him, I shall not mince my words about this. All too often those social and political grievances are real. In some cases, political exclusion and poverty may be direct factors which fuel the emergence of terrorism and are used by some terrorist groups to justify their actions and to recruit and draw support for their cause.
The noble Lord, Lord Moynihan, in an excellent contribution, spoke about poverty. If some parts of the world continue to grow rich while others remain in abject and grinding poverty, it cannot surprise us if that creates and sustains grievances that become the fertile soil in which terrorism thrives. It is not that poverty leads directly to terrorism—that is not what the evidence shows us. It would be an insult to many poor and decent people to suggest that one leads directly to the other. Rather, poverty, social injustice and—above all—exclusion from hope of a better future are the potent ingredients used to justify terrorism. The truth is that
they are real injustices and real grievances. There is, as

265
the noble Earl, Lord Sandwich, said, real oppression in the world. That is not to justify terrorism. However, we who have the means to do so need to address those issues. That means active, real effort to come to grips with the very conditions which, if left to fester, provide the environment in which the roots of terrorism grow and are nurtured.
Well before the events of 11th September 2001, the UK was actively engaged in working to spread the benefits of increasing world prosperity to the least developed and developing countries of the world. We are doing so through aid, but also—arguably every bit as importantly—through trade. We have worked hard to spread respect for human rights and adherence to the rule of law and to promote democracy and good governance. We are at the forefront of international efforts to reduce poverty, working to cut debt, remove unfair trade barriers and tackle killer disease. Those are all issues on which my right honourable friend the Secretary of State for Trade and Industry and I would like to engage more not only with religious leaders in the House of Lords but also with religious leaders throughout the country and from all faiths.
The noble Lord, Lord Selsdon, in his very interesting contribution, reflected on what the definition of terrorism should be. I disagree with some of what he said but I agree strongly with him that terrorism has its roots in many causes and that we have to examine those causes very honestly. The noble Lord, Lord Alton, was right: we have to look at all those possible—what he described as underlying—reasons which may be camouflaged in the religious reasons with which terrorists seek to justify their actions.
Let us acknowledge that regional conflicts fan the flames of terrorism. One of the regions where Her Majesty's Government have focused particular attention is on helping to defuse the tensions in the Middle East. In the Middle East we have seen an almost complete breakdown of trust between Israelis and Palestinians. As the noble Earl, Lord Sandwich, said, it has been made worse by every suicide bombing, by every missile, by every young person killed in a discotheque and by every retaliation and house demolition. Most British citizens—Muslim and non-Muslim alike, those of the Jewish faith, those of us who are Christians, and those of no faith at all—hope that we can secure the peace settlement between Israel and the Palestinians.
Earlier this afternoon we spoke of what happened yesterday and of the appointment of Mahmoud Abbas, who has now taken up the awesome responsibility of Prime Minister of Palestine. Yesterday's announcement from Hillsborough concerning the commitment of the United Kingdom and the United States not only to the publication but also to the implementation of the road map constitutes a real step forward. But of course I recognise that there is scepticism. Scepticism is born of hitter experience in this case. But I urge all your Lordships to support a move which I believe is the best chance for peace that has arisen in a very long time.
266
I agree strongly with what the noble Lords, Lord Wright of Richmond and Lord Roberts of Conwy, said; namely, that the problems in the Middle East, for which religion is often cited as a justification, are a huge underlying cause seeking to justify terrorism. By tackling the Middle East problem we also tackle that terrorism.
As many of your Lordships acknowledged, terrorist groups have long used religion to justify their crimes. My noble friend Lord Desai urged us to delink religion and terrorism. I wish that we could do so. But the linking of religion and terrorism is widespread, deep-seated and, as my noble friend said, it has become distorted and abused. It is not a new phenomenon and Islam is not the only religion to have been used in that way. As the right reverend Prelate the Bishop of Portsmouth said, what is new is the emergence of fundamentalism. He and the right reverend Prelate the Bishop of Southwark were right to remind us that all religions have their fundamentalists. Some in secular life also espouse fundamentalist beliefs.
The right reverend Prelate asked us to consider self-criticism. I believe that he was absolutely right to do so. But, if I may say so, I suspect that his wise words will not reach their target. I give the example of Osama bin Laden. He seeks to use Islamic texts and scriptures to legitimise his attacks: attacks that have targeted civilians on a massive scale and resulted in the deaths of many innocent people—Muslims and non-Muslims alike.
As I said in this House on 16th December last year, Islam is a faith of peace. But, appallingly, as a result of atrocities such as those perpetrated by ArQaeda. for some, Islam and terrorism have become inextricably linked. That is tragic. My noble friend Lord Ahmed was right to remind us how wrong such a linkage is. The right reverend Prelate the Bishop of Southwark was right to remind us that religion is often used as a cover for terrorism. A terrorist is a terrorist whatever his or her religion. Let us be clear that people like Osama bin Laden are responsible for this tainting of the Islamic faith.
I agree with the noble Baroness, Lady Cox, that such actions and hatred—the sort of comments that we have heard in the racist rhetoric of Abu Hamza, and others who preach his dreadful message—are an anathema to the overwhelming majority of Muslims. The fact is that the majority of Muslims—indeed, the majority of all people—abhor any violence of that nature. But, sadly, many terrorist organisations describe themselves as Islamic, either in the titles that they give themselves or in the descriptions of their aims. In effect, they hijack the fine name of Islam for their own dreadful ends. As the right reverend Prelate the Bishop of Oxford made clear—my noble friend Lord Haskel was also right to remind us of this—it is not only Islam that unfairly attracts such distorted labels but also other religions, including Judaism.
The noble Baroness, Lady Richardson of Calow, in her call for a strong coalition of faith was also right to remind us of what unites the great faiths of the world

267
in the pursuit of good and the help that we can give each other in pursuing good against the evil that is so often perpetrated.
The noble Lord, Lord Tanlaw, raised the question of differentiating between political religion and spiritual religion. By political religion I understood the noble Lord to refer to those who seek to politicise their religion for a secular end. He described those who seek to create new, modern political structures informed by fundamental precepts of their religion. That is not peculiar to one religion either, as the noble Lord made very clear in his address. Fundamentalism of a blinkered nature in all religions of the world distorts lives and the relationships between those who espouse religious faiths. But we have to be careful here. Political religion may well be eccentric rather than damaging. In no way does it automatically equate to violence or terrorism. I considered that part of the noble Lord's analysis unnecessarily bleak.
The right reverend Prelate the Bishop of Oxford asked what could be done to support the mainstream rather than the extremes in faith. I agree with the noble Lord, Lord Moynihan, and my noble friend Lord limier of Braunstone that dialogue has to be the key to unlocking this problem. Religious leaders have a key role to play in developing greater understanding and mutual respect, particularly in those communities riven by violence and mistrust. Interfaith dialogue can, and does, promote real alternatives to violence. As the right reverend Prelate said, and the noble Baroness, Lady Cox, in a fine speech, it can be a tremendous force for good in the world.
In January 2002 the Alexandria Declaration brought three of the world's great religions together to work for peace in the Middle East. Here I must commend the personal commitment of the noble and right reverend Lord, Lord Carey of Clifton, to the Alexandria Declaration and the process that followed it. With the Alexandria Declaration, senior Muslim, Jewish and Christian leaders have committed themselves to work together to promote a peaceful settlement to the Israel/Palestinian conflict; to support calls for a cease-fire and an end to the violence; to oppose incitement, hatred and misrepresentation of others; to help create an atmosphere where present and future generations will live together in mutual respect and trust and to ensure followers of the three faiths respect the sanctity of the Holy Land, which is holy to us all.
The Alexandria process has the wholehearted support of Her Majesty's Government. As many of your Lordships made clear, including particularly the noble Lords, Lord Alton and Lord Hylton, the net goes far wider than the problems in the Middle East. I assure the right reverend Prelate the Bishop of Oxford that the Government are playing a full role in promoting interfaith dialogue at home and abroad and in particular helping to build links between communities in the United Kingdom and communities overseas. We are focusing on ways to encourage Muslims to speak out more in opposing the extremist minority or the violent fringe. We are associated with numerous groups and forums and are increasing our outreach to the Muslim community as a particular
268
priority. Ministers regularly meet with leading representatives of the Islamic community in this country and with influential religious and community leaders overseas to discuss matters of concern.
My right honourable friend the Foreign Secretary recently visited South East Asia in the wake of the Bali bombing and spoke of the importance of promoting understanding between the West and the Islamic world. In Indonesia, which we discussed earlier this afternoon, and which a number of your Lordships visited last year, we have promoted interfaith dialogue. A delegation of UK Muslim councillors also visited that country to share their experiences. In addition, a number of UK visitors to Indonesia have undertaken speaking engagements with the influential moderate Muslim community. I thank the noble Baroness. Lady Cox, for all her valuable work as regards Indonesia and the Sudan.
We are reaching out through our parliamentarians to leaders in Egypt, Saudi Arabia, Iran, Morocco and Tunisia. We have all remarked on the fact that the most reverend Primate the Archbishop of Canterbury has been in the Gulf this week attending the interfaith conference hosted by the Emir of Qatar. That is another excellent example of the steps being undertaken by faith communities to build dialogue.
I thank the noble Lord, Lord Hylton, for reminding us about groups outside government in the established Church, which take their own initiatives to grow interfaith dialogue. I am grateful to him for his heartening description of what is happening in this respect in former Yugoslavia.
Much work is being undertaken in the Foreign Office to develop closer relationships with the Muslim community at home and abroad. I shall single out a few instances. Since 2000, we have supported and funded Hajj delegations. I remember well the valuable help that the noble Lord, Lord Ahmed, gave me in trying to set up that initiative. It involves a partnership between government and the Muslim community and has also been led by the noble Lord, Lord Patel of Blackburn. This year's delegation, which included eight medical staff, helped about 10 per cent of 15,000 British pilgrims. The noble Lord can take much credit for having been part of the trigger that got that going. We have also been running successful Islamic awareness training courses for our staff.
My noble friend Lord Ahmed spoke about what is happening in the United Kingdom. My honourable friend Mike O'Brien has planned a series of outreach visits to regional communities in the UK, and my noble friend Lord Filkin is undertaking a complementary programme as the Home Office Minister. I say gently to my noble friend Lord Judd that my noble friend Lord Filkin has worked assiduously on promoting that interfaith dialogue.
I shall write further to those noble Lords who I know are interested in these matters about the other work being undertaken. We are planning a seminar on faith and foreign policy as part of a multifaith week at the FCO. Planning is in its early stages but I should be

269
happy to talk to any noble Lord who wishes to be associated with that work about ways in which we are able to develop that in future.
The noble Lord, Lord Roberts of Conwy, spoke about the current conflict in Iraq. One of the most frequently stated objections to the conflict is the claim that it will tend to fuel terrorism. I believe that there is an argument that the reverse is true. When one looks at the faces of the civilians in Basra, who are starting to believe that the time of oppression will soon be over, or at the faces of young soldiers who are surrendering to the coalition and who ask, "When will I be executed?" only to be given food, water and reassurance, one sees testaments to the fact that this conflict will not inflame terrorism but suffocate it.
I listened carefully to the words of the noble Lord, Lord Wallace of Saltaire, who urged us to look critically at ourselves. He was absolutely right; disconcertingly, he quite often is. We as individuals must look constantly at our own attitudes. One of the points in which I place most hope is that of the tolerance of young people. They share friendships between races, cultures and faiths, and most of us could learn a great deal from that. That is not because they are set aside from their own culture, faith or race, but because they live in a world in which living together day by day comes far more naturally than it did to many of us when we were young. They have grown up in a multifaith, multicultural society in this country—in a United Kingdom in which we seek to involve and encourage political, religious, cultural and ethnic diversity. With all of the shortcomings that are so obvious in our society today, that tolerance and acceptance makes me feel much more optimistic about the future.
5.44 p.m.
The Lord Bishop of Oxford: My Lords, I am grateful to the noble Baroness for her comprehensive reply to this debate and to all noble Lords who took part, especially, if I may say so, those who spoke out of their own deep commitment to interfaith dialogue of one kind or another.
It is a sad fact that so many Muslim societies and communities feel alienated in our world today, hostile to US power, disgusted by western lewdness, sometimes oppressed and, as the noble Lord, Lord Ahmed said—he was referring to Muslim communities in this country, and particularly to young people—resentful and marginalised. They feel, as the Minister said, excluded from the hope of a better future.
That, as we are all aware, is the breeding ground for terrorism. When those communities take religion seriously, as they do, when terrorists speak to that sense of alienation by offering an alternative better world that can come about only by destructive acts of violence, and when they can gain the allegiance of those alienated young people by a religious call to commitment to kill and be killed, we have a very serious situation indeed. Religion is being misused, as every noble Lord pointed out. However, we must face
270
the sad, brutal fact that misused religion is a powerful destructive force. As the noble Lord, Lord Wallace of Saltaire, put it, it is a rage against the established order and a rage against corrupted states; it is a creed for the discontented.
I am particularly grateful to those noble Lords who addressed this sense of exclusion and who are concerned to find ways of strengthening the moderate mainstream majority, thereby helping them to be valued, to know themselves to be valued and to be fully participating members of our society and the world as a whole. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Atlantic Salmon
5.47 p.m.
Lord Forsyth of Drumlean Lord Forsyth of Drumlean rose to call attention to the plight of Atlantic salmon; and to move for Papers.
The noble Lord said: My Lords, it is a great pleasure to be given the opportunity to raise the plight of the Atlantic salmon. I feel that doing so on Budget day and on the day on which Baghdad appears to have fallen is rather like trying to fish for salmon on a cold winter's day with a floating line. However, I hope to cast a few flies in the direction of the Minister and gain the Government's support for action in this crucially important area.
I begin by thanking publicly Mr Andrew Wallace, the director of the Association of Salmon Fishery Boards, Mr Paul Knight, who is the director of the Salmon and Trout Association, and Fay Hieatt, from the River Tweed Commissioners. All of them have spent considerable time talking to me about some of the issues with which they are concerned. I also thank officials in the Scottish Executive and the Minister's office, who have been extremely helpful. I have given the Minister an indication of some of the matters that I want to raise.
I also say "Thank you" to the noble Lord, Lord Nickson—of Renagour—who is battling at this very moment to get from Pitlochry, where the annual general meeting of the Association of Salmon Fishery Boards, of which he is president, is taking place. He has been held up because Heathrow controllers are in short supply. I am sure that the whole House will be understanding of the fact that he is not here at the beginning of this debate; his contribution will be very welcome indeed.
I am a recent convert to fishing. When I ceased being a member of the government, I found that fishing took up quite a lot of my time. I do not believe that there is a finer sight in nature than a leaping salmon. It is a fantastic sight—one of the grandest sights that one can see. Yet this extraordinary creature is in mortal peril. According to the World Wildlife Fund—or WWF, as it now calls itself—it has all but disappeared in Germany, Switzerland, the Netherlands, Belgium, the Czech Republic and Slovakia, and it is on the brink of extinction in Estonia, Portugal, Poland, the United
States and parts of Canada. Indeed, 90 per cent of the world's population of Atlantic salmon are now concentrated in four countries: Iceland, Norway, Ireland and Scotland. Even in Scotland, according to WWF, it is endangered in 37 per cent of the rivers.
I appreciate that most Members of the House who are taking part in this debate are even more expert in these matters than the noble Lord, Lord Nickson, and certainly more expert than me. But it is important to remember that these fish are genetically programmed to return to the river from whence they came—indeed, to the very spot in the river where the egg that produced them hatched—and that, once a wild population has gone from a river, it has probably gone for ever.
I know that the Minister does not have responsibilities in Scotland, but I believe that what has happened on the west coast of Scotland should give us all considerable cause for concern. We have seen the salmon and sea trout populations completely collapse, and I do not believe there is now any doubt that fish farming has been a major contributor to that catastrophe.
I once thought—indeed, it happened during my watch at the Scottish Office—that salmon farming would help to save the wild fish. I believed that it would bring down the price of salmon, that there would be less poaching and that it would be good news for the wild fish. That has sadly proved to be a delusion. Poorly managed farms have had a disastrous impact on the wild population. I am told that last year 400,000 fish escaped from fish farms into the wild, resulting in interbreeding, which damages the gene pool, and competition for food and scarce resources.
The siting of cages at the mouth of rivers means that the smolts—the young fish—going out to sea are ruthlessly attacked by sea lice, which are in far heavier concentrations than would occur in nature because the fish in the cages are in very high concentrations. Indeed, a piece of research in Norway showed that in one river where cages of farmed fish were placed at the mouth, 80 per cent of the smolts were lost through sea lice attacks. The sea lice cluster on the heads of the young fish like death crowns and weaken and, ultimately, kill them.
In fairness, the industry and the Scottish Executive recognise that there is a problem. Indeed, only in the past few weeks we have seen the publication of a report on agriculture. But, like so many others, it is yet another example of a report which is good on words and short on action. It talks about more research rather than what is needed—that is, tough controls to deal with fish farming and effective enforcement of proper codes of conduct.
I know that the industry has come forward with a voluntary code of conduct, and I am the last to argue for regulation. But the trouble with voluntary codes of conduct is that the good guys obey them and the bad guys get on with farming in the bad old ways, which have caused so much damage to the environment. With regard to the escapes, I believe that at the very least farmed fish should be tagged so that we are aware
272
of where they are going and what the consequences are. Many people have called for a public inquiry into the environmental impact of fish farming. I am bound to say that I have some sympathy with that view.
I was fishing on the Tweed at the end of last year—which is why I decided to try to secure this debate in the House—when one of the best gillies on the Tweed, Colin Bell, told me that there were plans to set up a fish farm to rear 3 million to 4 million smolts on the Ettrick, which is within the Tweed's catchment area. I told him that he must be wrong: there was an understanding that there would be no more fish farms on the east or north coasts of Scotland. As with so many things said by gillies, he turned out to be absolutely right. There is, indeed, a proposal from a Norwegian company to turn a trout farm into a smolt farm. It would not be allowed to do that in Norway but in Scotland we do not have the necessary controls to prevent such a thing happening. Escapes into the Tweed would be absolutely disastrous, and the possibility of the spread of disease and parasites is most concerning.
Salmon fishing is not only a pastime for a few rich people who go up to the Tweed: it is very much a way of life for the rural communities. In the Borders, salmon fishing employs 520 people and produces a local income of some £13 million. When the noble Lord, Lord Nickson, reported as part of the task force which I set up when Secretary of State, he estimated that the value to Scotland alone of salmon caught on the rod was some £350 million.
Drift-netting has been a big issue in Scotland. I am delighted to see that my noble friend Lord Monro will speak later in the debate. During his watch, he was instrumental in persuading MAFF to phase out the north-east drift-nets, which are responsible for taking some 33,655 salmon. That was a great cause célèbre in Scotland. I remember that John Gummer and other Ministers considered us to be very tiresome, but it was an important matter. To the credit of the Minister and Mr Elliot Morley, the phasing out of the north-east drift-net fishery has been accelerated. The Minister came forward with £0.75 million to help to buy out the netsmen, but I am told that agreement has now been reached on a figure of £3.34 million to buy out 80 per cent of the netsmen. That is fantastic progress. The sum of £3.34 million leaves something of a gap, but I understand that the Minister—again, to his credit—has increased his offer to £1.25 million and that the private sector is finding £1 million. Therefore, there is a gap of £1 million.
I do not know what the noble Lord, Lord Sewel, who did so well when he was in the Scottish Office, thinks about this, but the Scottish Executive is refusing to pay a penny on the grounds that this is an English fishery. However, the Scots are the principal beneficiaries of fish travelling up Scottish rivers. Here is a chance to save 25,000 salmon every year which will go to the Tweed, the Dee, the Forth and the Tay, but the Scottish Executive cannot find the money. That is ridiculous. The documentation must be completed in

273
May because the season starts in June, so the Members of the Executive had better wake up when they return from their electioneering.
I note that during the debate in the Scottish Parliament, which was quite good, Rhona Brankin, the then Fisheries Minister, when asked about this matter, said:
"We take the matter seriously and are in discussions with MAFF about it".
She then said:
"If the number of fish returning to our rivers continues to decline, there is a real danger that there will be too few spawning fish to ensure that the juvenile population is maintained at safe levels. I am afraid the picture is bleak".
Quite so. The picture will be bleak if Ministers in a devolved Administration, which is supposed to help Scotland, allow this opportunity to slip away.
If the Atlantic salmon has an epitaph, I believe that it will be "Lost at sea". Again, the noble Lord, Lord Nickson, estimated that the black hole into which the smolts are disappearing at sea is taking something in the region of a million more fish than it took 20 or 30 years ago; in other words, the survival rate of the smolts has fallen from 15 to 25 per cent to 5 to 15 per cent. I believe that the pelagic trawlers—I see that the noble Lord, Lord Nickson, is now in his place—are a major source of that loss of young salmon. Some estimates put the numbers as high as 900,000. These fish are being killed by people fishing for mackerel and herring in the northern North Sea and are then dumped over the side as bycatch discards. It is a huge waste of resources, and I wonder whether the Minister can tell us what action he is taking to change this ludicrous system.
Similarly, I know that the subject of seals is controversial, but why cannot we have a seal commission, in the same way as we have a red deer commission, to deal with the trebling of the population which has occurred among the seals? Again, the task force of the noble Lord, Lord Nickson, estimated that seals catch 470,000 fish, and that is on a fairly conservative basis.
I return to the subject of drift-netting. I praised the Minister for his actions on the north-east drift-net fishery. But I have to say that the answer that he gave to the noble Lord, Lord Mason, in February when asked what representations the Government were making to the Irish in respect of Irish drift-nets—the answer was "none"—was wholly unsatisfactory. That is the Irish drift-net fishery, which the drift-net fishermen themselves wish to give up. People are able to buy out of it although it costs a huge amount of money to administer. It takes at least a quarter of a million fish every year, which affects the rivers in Wales, in the south-west of England, as well as in Spain, France and Germany.
The great hero of that sad tale is a man called Orri Vigfusson, an Icelandic vodka distiller, who has almost single-handedly set up the North Atlantic Salmon Fund, which has seen Greenland, the Faroes and Iceland all give up their netting. It is helping with
274
the north-east case, but the Irish refuse even to consider a dialogue. I believe that the Government have a duty to take action. I hope that the Minister will give the House an undertaking that he will take action. Why should it be left to private interests in the south-west of England to argue with the EU Commission that the Irish are in breach of the habitats directive.
Finally, I ask the Minister what has happened to the legislation on the Warren report. That was set up by Jack Cunningham—a keen and enthusiastic fisherman—when he was Secretary of State. It was a splendid report and its recommendations were accepted, but there is no DEFRA Bill in the current Session. We could have had a Bill to deal with this situation. Can we have a Bill in the next Session? I venture to suggest that these matters are far more important than cottaging and other matters that appear to have crept into the legislative programme.
Your Lordships will realise that time is running out for me. But time is also running out for these magnificent creatures, the Atlantic salmon. Britain has a special responsibility. We are blessed with the population of Atlantic salmon. I do not know why anyone wants to be a Minister; it is jolly hard work. The noble Lord will know what hard work it is. But if you are a Minister you can make a difference. I say to the Minister that this is his chance; this is his opportunity to make a difference, to use his considerable energy and power and enthusiasm to act to ensure that this wonderful fish, this king of fish does not go the way of the panda, the Bengal tiger and the snow leopard. My Lords, I beg to move for Papers.
6.2 p.m.
Lord Mason of Barnsley: My Lords, I congratulate the noble Lord, Lord Forsyth, on being fortunate in securing a two-and-a-half hour debate on this subject. As he will notice from the list of speakers, there is a wealth of knowledge and experience to follow. I feel that I am among a gang of Scots who know all about fly fishing, salmon fishing and the salmon itself, but I do not know much myself. I put down a marker that the signs indicate failing health. The noble Lord suggests it is more than that; that the salmon are in dire straits and in peril.
First, I turn to the Scottish salmon fish farms. I assume that the Minister will understand the situation as his briefing note will have mentioned that the viral disease of infectious salmon anaemia has been cleared and that compensation has been paid to owners. I would like to know what the cost was financially, how many farms were closed and what was the loss to the fish stocks. The only reason I mention that is that I remember well the effects of the whirling disease and the stocks that were lost then.
The overall picture of the Scottish fish farms is not a pleasing one. Research shows that farmed fish adversely affect wild salmon. There is interbreeding by escapees and there are diseased fish and parasites. Excrement can be found around and beneath the cages and genetically farmed fish are taking their toll on the wild salmon. Therefore, that is a continuing threat.

275
How has the production of farmed salmon cut back the stocks of wild salmon? Is it likely, as some already suggest, in order to stop the spread of fish disease affecting the wild salmon in the coastal waters, that fish farms may have to move inland into contained, disease-free ponds? Maybe the experiments in farmed cod will lead the way in doing that.
Another allied plight which is a threat to the wild salmon is escapees from the net pens. Research has shown that as much as 40 per cent of the Atlantic salmon caught by fishermen in areas of the North Atlantic Ocean are of farmed origin. I find that incredible. And that is not necessarily all from the Scottish farms.
On a further question of saving the wild salmon, I draw attention, as the noble Lord, Lord Forsyth, did, to the activities of Orri Vigfusson, who acts under the North Atlantic Salmon Fund. The fund is helping to buy out the netsmen and drift netters; it is negotiating and providing funds as well as there being funds from government sources. Therefore, I ask to what extent NASCO (the North Atlantic Salmon Conservation Organisation) and the Government are assisting him in his endeavours to make representations to the Irish Republic regarding their drift netting operations. I am led to believe that their netters took 237,000 salmon in one season, with well over 100,000 taken illegally, and with seals taking them in the nets. That is nearly a quarter of all the salmon caught in Europe. If that situation were bought out, there could be a genuine recovery of the wild Atlantic salmon.
I turn my attention to the North Sea drift netting fishery. Salmon trawlers, trawling the North Sea, using very lengthy nylon filament gill nets—they are white and practically invisible—indiscriminately take thousands of salmon that are returning to their spawning grounds in the Yorkshire Esk and the Scottish salmon rivers. But, worryingly, they take marine mammals as well, such as porpoises and dolphins, and diving birds. When the gill nets break they become ghost net killers of all those species. Silently, unseen, they plunder the seas of marine and bird life and, unlike hemp nets, they continue to do so for years.
Is the Minister aware that among the fishing nations of the Atlantic and in NASCO and its council we are constantly being embarrassed—only Ireland and probably Greenland still use gill nets. So diplomatically we are constantly in the dock. I ask why we allow that practice to continue, especially when one bears in mind those who want a ban: NASCO, the Salmon & Trout Association, all the conservation organisations and the fishing and tourism organisations in Scotland.
As the Minister knows, I am aware of some progress in this matter. A slow, phased payout has begun, but I guess that there are still between 60 and 70 operators in the North Sea. To what extent has the Minister worked with the group associated with the noble Lord, Lord Moran, on this and noted Orri Vigfusson's views and his activities? Is it time that we brought the gill net practice to an end, spent a few more pounds, bought out the gill netters and ended the shame on our country in the council of NASCO?
6.7 p.m.
Lord Thomas of Gresford: My Lords, I congratulate the noble Lord, Lord Forsyth, on drawing attention to the modern peril of the wild salmon as he described it. I have an interest in two River Dees. The Welsh Dee runs quite close to my home in Wales and I hope to be standing up to my neck in the Scottish Dee for the whole of next week, as I have for the past 25 years, carrying out my usual conservation fishing.
It is interesting to compare the experiences of the two rivers. From the late 1960s, the Welsh River Dee went into gradual decline. Over the past 10 years, the River Wye in Wales collapsed, while the River Usk is doing quite well. No specific reason has ever been detected for the difference between the various Welsh rivers. There are no fish farms, for example, that affect those rivers. Having sat for many rainy days in the hut, various ideas have been put forward: the change of sheep dip, the agricultural run-off that kills off insect life and affects the young salmon and the young parr—all sorts of theories have been put forward. It is difficult to ascribe any particular reason for what has happened.
However, the Welsh River Dee has recovered significantly. Indeed, 2002 was a good year. The salmon counted at Chester weir was 7,319, which may be a small figure for Scotland, but it is good for Wales and it is the second highest figure in 12 years. This spring was a very good run as well. As for sea trout, in 2001 they reached a record level of 18,500 fish.
We have our own problems. Industrial pollution killed off a vast quantity of fish—over 100,000—in July 2000. Again last year there was industrial pollution in the Welsh Dee below the Maerdy Hatchery, although its impact was small. We still have estuary netting, which kills about 1,000 fish a year, although there is a marked decline in the licences that are now applied for. In the Welsh Dee, the rod catch last year was 470. That is about the 10-year average, although in the previous year it was over 600. Of those, 202 were returned to the river, which was 43 per cent of the catch.
The Scottish Dee is undoubtedly the premier spring salmon fishing river, bar none. It is known world-wide. In the early 1990s, the River Dee fishery board in Scotland identified a rapid and significant decline in multi-winter salmon stocks and took energetic measures to halt it. It instituted a policy in 1995 of catch and release, which was highly unpopular. It banned spinning. However, since the introduction of that policy, no fewer than 16,000 salmon have been released to go on to breed. The present voluntary policy is for a 100 per cent catch and release. In fact, about 90 per cent of fish caught are returned. Last year that amounted to about 9,000 fish. The code confines spinning to the spring and forbids the sale of rod-caught salmon.
As for netting, some three years ago the Dee board bought out the district's coastal fishing nets. Various hatcheries have been instituted in the spawning tributaries at Dinnet and elsewhere which augment the river's ability to produce smolt, with fry and parr

277
planted out in the major middle and upper tributaries of the river. In addition, there is an intensive and urgent programme to improve in-stream and riparian habitats.
The results are encouraging. If the work is put in, there can be results. Although the river is not what it was—and next week I am unlikely to catch anything whereas 25 years ago I would have expected five or 10 salmon between the three rods in the particular beat that I fish—things have improved over the past three years. I am told—I have to believe it next week—that things are looking good for the beginning of this year. So, with the necessary endeavour, salmon fishing can improve.
I call your Lordships' attention to the importance of Europe. The Welsh European Funding Office announced in February that a total of £2.4 million had been awarded to the key Fishing Wales project by the European Union's Objective 1 European Rural Development Fund. That grant is of course matched by funds from partner organisations including the National Assembly government. It is designed to improve 178 kilometres of river, primarily the spawning tributaries. It will tackle erosion of river banks and vegetation loss caused by cattle grazing; the effects of conifer forests on water and habitat quality; and the construction of new fish passes which will open up 80 kilometres of suitable habitats for spawning fish. An element of that money is marked out for angling clubs and fishery owners to work in order to attract more angling visitors to Wales, which will of course generate much-needed revenue in local communities. The aim is to attract 1,000 new anglers to Wales in the coming years.
Scotland does not have that advantage. The Scottish Executive has proposed to the European Union that the River Dee should be one of the candidates for designation as a special area of conservation. However, only the main stem of the Dee is so far covered by the proposed designation and it is to be hoped that there will be a further submission for the spawning tributaries where much of the conservation work takes place.
The Dee is recognised as having particular importance for three species—the Atlantic salmon, freshwater pearl mussel and the otter—which depend upon the maintenance of high water and habitat quality and sympathetic management. The Commission will make a decision in the autumn or early next year. It should make some European money available in Scotland for salmon conservation. That is not as satisfactory as the position in Wales where matters are more advanced.
Mortal peril indeed, but conservation requires hard thinking, detailed planning and constant work by dedicated people that is backed by sufficient funding. It is not just for the benefit of those of us who fish, but for the preservation of the treasures we are privileged to enjoy both in Wales and in Scotland.
6.15 p.m.
Baroness Golding: My Lords, I, too, wish to congratulate the noble Lord, Lord Forsyth, on obtaining this very important debate. I declare my interest as chairman of Second Chance, which is a fishing charity for children, as an executive member of Get Hooked on Fishing, as a member of the Salmon & Trout Association and as a committee member of the Atlantic Salmon Trust. In doing so, I pay tribute to the officers and members, past and present, who have done so much to promote the conservation and protection of wild salmon stocks.
There were two significant acts of an incoming Labour Government with regard to the future of salmon. The first was the bringing together of the responsibility for the environment, agriculture and fisheries into one department—DEFRA—so that we now have only one set of Ministers to deal with. That is a great advantage.
The second act was that of that avid fisherman, Dr Jack Cunningham, who immediately announced a review of fisheries legislation and set up the Warren committee under the chairmanship of Professor Lynda Warren. It produced the Salmon and Freshwater Fisheries Review, which made 196 recommendations. I also need to declare an interest in that the report was dedicated to my late husband, John, who sat on the committee and who died before the report was published.
I, therefore, have more reason than most to suggest to the Minister that the many hours of work put in by those on that committee should not be left on the shelf at DEFRA to gather dust, but that Parliament should find the time for a fisheries Bill to implement all its recommendations.
I also wish to stress the importance of the need for a substantial United Kingdom contribution, both financial and in kind, towards NASCO—the North Atlantic Salmon Conservation Organisation—which is the international co-operative salmon research project investigating the reason for the increase in salmon mortality at sea.
I am convinced that collaborative action involving both governments and the private sector is essential if salmon stocks are to thrive. The United Kingdom should be seen to be giving a strong lead in identifying potential research projects and in seeking the finance to attack this major problem.
There is already strong evidence of the threat posed by near-surface pelagic trawlings in the Norwegian Sea. It has been estimated that 1 million smolt a year, as well as returning adults, are taken in buoyed-up trawls. The necessity to devise and enforce measures, such as the lowering of the head rope by as little as 10 metres on these trawlers, needs urgent government negotiation.
Another issue for enforcement is the regulation of aqua culture. Although this is mainly a Scottish matter, the United Kingdom has an international responsibility following an agreement in NASCO under the Oslo resolution. The two most important aspects of this resolution are: first, integrated sea lice

279
control by a combination of co-ordinated fallowing and treatment, which is aimed at reducing the number of egg-rearing lice to zero; and, secondly, the prevention of escapes in order to avoid inter-breeding.
While raising a mainly Scottish issue, I, too, would like to know why the Scottish Parliament cannot see the sense of contributing to the buy-out of North East drift nets or, at the very least, underwriting some of the money that is desperately being raised to guarantee the second half of the buy-out. Can my noble friend shed some light on the thinking of the Scottish Parliament?
I also add my voice to the threat from the parasite giro dactylus salaris—I wish that that was Welsh; I could manage that better—which has already devastated several Norwegian rivers. Although the import of wild salmoids is prohibited, we must urgently warn anyone who has fished abroad of the need to disinfect tackle and clothing before he returns. The parasite has already spread from Scandinavia through Europe to Spain. It can also be carried by some coarse fish; and there is an equal need for the import of coarse fish to be better controlled. Posters and information at all points of entry into this country would be a considerable help in warning everyone of that danger. Perhaps the Minister could ask that those points display such posters.
Before I sit down, I pay tribute to the work being done by the rivers trusts to clean up and improve river flow and the environment of rivers such as the Tamar, the Wye and the Usk. That makes a valuable contribution to the life of our rivers. We who care about salmon owe them a great debt of gratitude.
6.21 p.m.
Lord Monro of Langholm: My Lords, I, too, congratulate my noble friend Lord Forsyth on obtaining this debate. It is a privilege to follow such distinguished fishermen as the noble Lords, Lord Mason and Lord Thomas, and the noble Baroness, Lady Golding. I seem to have been involved in salmon and salmon legislation for much of my parliamentary life—some of which has been extremely frustrating.
If we take as read—because time is short—the economic importance of salmon to the ecology, tourism, hotels, ghillies, river-watchers and other direct employment, we can move on to what can be done about it. It is important to recognise just how many jobs can be involved in helping to promote a river. In the current edition of The Field, I read that in the Kola peninsular in Russia, 75 people are employed in the fishing side of that development.
Do the Government agree that that is important to the countryside? Why does it take so long for the Government to act? Can they not bring together some of their agencies? The Countryside Agency has just produced a report on the countryside that does not mention fishing or salmon. What about the Environment Agency, which is responsible for matters such as pollution? It does not seem to be taking much action. What about English Nature? They all seem to live in ivory towers; it is the Minister's job to bring them together.
280
When I was a fisheries Minister—I advise no one else to take on that job if they can possibly avoid it—I was driven to despair by the Ministry of Agriculture, Fisheries and Food, as it then was, and its reluctance to resolve the North East drift net fishery. I am glad that we have made substantial progress, even if it has not been eliminated, as it was in Scotland more than 40 years ago. I believe—I am sure that the noble Lord, Lord Nickson, will put us right—that we are now down to 69 licences, which can be reduced to 17 if the £1 million can be found before the licences become current again on 1st June.
Can the Government help further? I know that they have been helpful in providing money, but buying out the licences is a key issue and we need £1 million—bearing in mind that a huge amount of voluntary money has already been put in. I really cannot go on. I am driven mad in this House that whenever I mention Scotland, the Minister says that that has nothing to do with us. We are a United Kingdom. Ministers must take joint responsibility for things that matter to both countries. Salmon is a key issue. What is happening in England is ruining fishing in Scotland.
Ministers must cease dodging the issue of where responsibility lies for the environment. I express enormous gratitude to Orri Vigfusson of the North Atlantic Salmon Fund, the noble Lord, Lord Nickson, who has done so much, my noble friend Lord Moran, who has given a tremendous lead in dealing with salmon legislation, and all the trusts and organisations supporting salmon, such as the Salmon and Trout Association, the Tweed Commissioners, who are doing a wonderful job, and the district salmon boards.
Ten years ago, Orri Vigfusson negotiated the deal with the Faroes, Iceland and Greenland to remove the nets, but that 10 years is about to run out. Are the Government helping him to renegotiate those important agreements on salmon netting in the North Atlantic? DEFRA Ministers frequently talk about biodiversity, sustainability and other such jargon, yet the North East drift nets set a dreadful example to Ireland. The interceptory and drift nets are a real danger, as all noble Lords who have spoken have pointed out.
The European Commission asked the Irish to cut their catch by 40 per cent. The Irish said, "Yes, of course we will", but did not; they cut it by only 7 per cent, which had little impact on the situation. It is most important that our Government—the United Kingdom Government—get on to the Irish to say, "Look here, we have really had enough of this drift netting. It sets a dreadful example for conservation. What are you going to do about it?" Is the Irish catch in breach of the water framework and habitat directives? I understand that the Wessex and Wales boards are to take Ireland to court over that. Are the Government helping them to prepare their case and giving them money to help them in the courts?
We really must have some action. We cannot all sit on our fences and watch them crumbling underneath us; we must do something. That is why we are getting so depressed that we are on a plateau with so little happening.

281
I turn to other things that could help salmon fishing. Scottish National Heritage and English Nature are notoriously reluctant to deal with predators. They throw up their hands in horror at the idea of licences to deal with herons, cormorants or mergansers. How many licences have been issued during the past season to deal with cormorants, mergansers and herons? All right, one can flap one's arms at herons on a pond, but one cannot deal with them up and down 50 miles of river.
My noble friend rightly asked: what about seals? We must do something about seals. I know that it is a difficult question for Ministers but, after all, they have got hold of the poor old hedgehog and do not mind having them cleared out of North and South Uist—to the horror of many. Sometimes, it is right to put nature in the right direction. Seals have become an immense problem for salmon fishing.
Are the Government, through the Environment Agency, addressing the important issue of pollution—the noble Baroness, Lady Golding, mentioned disinfecting tackle and so on when one moves from one river to another. We must stop disease passing from one river to another.
Lastly, I mention fish farms, which have already been mentioned. I know that they want to set a high standard and produce the finest quality salmon in Scotland. Good luck to them, including my noble friend Lord Lindsay and his team in Perth. But they must bear in mind the problems caused by the escape of salmon from the nets and the pollution that occurs underneath the nets, which are important.
Those are some points for the Minister to think about. I hope that he will not escape by saying that he has not got his kilt on tonight, because it is important that UK legislation on salmon farming is UK-wide, not just for Scotland, England, Wales and Northern Ireland separately. I am glad that we are having this debate, and I hope that we will have some action after it.
6.30 p.m.
Lord Cameron of Lochbroom: My Lords, I declare an interest as a member of the Salmon and Trout Association. Like others, I am a rod-and-line angler, which I regard as probably the least effective form of hunting and catching salmon, at least in my personal experience, and therefore paradoxically the most effective conservation instrument short of total prohibition on all forms of catching salmon.
We recognise the problem. I pay tribute to a seminal study of that problem, which was internationally recognised as such, in the two reports of the committee chaired by Lord Hunter, dated 1963 and 1965 respectively, on the Scottish salmon and trout fisheries. I have had the privilege of fishing in Lord Hunter's company over many years. Very recently, just before this debate and in preparation for it, I went down to have a conversation with him. He is a still hale and hearty 90 year-old. He remains in constant touch with what is going on in the fisheries world, including
282
contact with Orri Vigfusson. He pays great tribute to what Orri has achieved for salmon fishing throughout the world.
The earlier report was concerned with the problem arising from the then recent development of drift-net fishing for salmon in waters off Scotland and the Tweed. In September 1962, the Scottish Office, in advance of a review by the Hunter committee and pending its advice, introduced an interim prohibition against the use of the method and the landing of salmon so taken. It was subsequently confirmed following the issue of the first interim report in 1963. One of the conclusions was as follows:
"Drift-net fishing has introduced a serious risk of overfishing and has the added disadvantage that a permanent drift-net fishery would frustrate or prevent the scientific management of individual salmon rivers and their most economic exploitation".
Those are wise words.
I add in parentheses that one might say that the Scots do not need to pay some tribute such as a Danegeld for the removal of the English drift-net fisheries; they have already taken their own steps by using orders under the sea fishing legislation to prevent fishing of that character off Scotland. That was done 40 years ago. Nevertheless, I have no doubt that it could be said that the Scottish Executive, acting in the interests of the United Kingdom, might make a contribution.
The need for a holistic approach to the problem is underlined in the first chapter of the first interim report. It states:
"The problem of the Scottish salmon fisheries cannot be understood without knowledge of the life history of the Atlantic salmon".
Later, it adds:
"As salmon spend part of their life in fresh water and part in the sea, no one interested in one part can afford to disregard the other".
At the end of the day, in the second report, the committee said:
"The homing of salmon and sea trout is an established fact and is the key to the proper management of salmon and sea trout fisheries".
We have advanced in scientific knowledge since then. Enough is now known, I suggest, to recognise that all interests, national and international, should come together to produce a permanent solution that encompasses protection throughout the life cycle of the species. But the United Kingdom—I stress, the United Kingdom—must put its house in order first while seeking to be part of the co-operative international effort to secure prohibition of commercial exploitation that involves interception of mixed stock at sea, particularly through by-catch, as has already been said. It should also work towards the removal of the remaining fixed engines for fair compensation and the discontinuance of drift-net fishing of salmon, again for fair compensation, in favour of an in-river management system.
The United Kingdom approach should proceed on a clear and consistent principled philosophy underlining its policy to the problem of trying to at least arrest the decline of the species. A change of approach to the

283
problem requires the adoption of that in legislation, administration and management throughout the United Kingdom, recognising the general economic benefits of a well-managed system for salmon fishing for the United Kingdom and elsewhere generally. The development of that natural resource should aim at improving fisheries and providing a system of management that will replace unknowns with measured quantities, whereby salmon fisheries are moved away from hunting in the direction of farming. The methods of controlling the fisheries to be adopted should be capable of more than merely maintaining the spawning stock. They should secure not merely sufficiency but abundance. After all, nature provides a safety net by gross over-insurance. That should be recognised and sought.
Much has been said about what has already been done. A joint effort by the United Kingdom and others is needed to secure the return of this fine species to all the rivers from which it has been lost and to ensure that, in rivers where it remains, the species is improved to the point where it can be good both for commercial purposes and for the angler.
6.36 p.m.
Lord Sewel: My Lords, I, too, congratulate the noble Lord, Lord Forsyth, on securing this debate. He has almost succeeded in taking us back to pre-devolution days in that the subject is of obvious and particular interest to Scots and to Scotland. But the subject can be tackled only on a UK basis if it is to be tackled effectively, which is why, quite rightly, we are debating it in this House. Without disrespect to the noble Duke, the Duke of Montrose, many noble Lords, when they approach the topic, have fond memories of the contribution made from the Opposition Front Bench on this issue by the late Lord Mackay of Ardbrecknish.
When I had some responsibility for this policy area, I believed that the general debate was not helped by the vehemence of those who sought to identify a single villain. That temptation has been avoided this evening. It has been generally recognised that the issue is much more complex and complicated than trying to pin the blame on one particular activity or group of individuals. The culprits are well known. The main sinners have been rehearsed this evening—the predators, piscivorous birds and seals. Many of us have reached the stage of believing that the case for more active management of the seal population needs to be at least reviewed in the near future.
It has not been mentioned that, on the other hand, we have the case of the impact of commercial sand eel fisheries on stocks. I have some doubt about its effect. If it had an effect, it would occur much more on the east coast of Scotland than the west coast. The view is held very strongly in some branches of the Scottish judiciary that that is the only possible explanation.
There has been a general decline in drift netting, as has been pointed out. One of my great regrets was that we were not able to build faster on the work of the noble Lord, Lord Monro, and finally to resolve the issue of the North East drift-net fishery. The noble Lord, Lord Forsyth of Drumlean, and my noble friend
284
made the point that an opportunity existed to resolve the issue once and for all. It would be a tragedy if that opportunity were allowed to slip. I recognise the inhibitions that the Minister has, but I hope that he will be able to convey to colleagues in the Scottish Executive the strength of feeling in the House on the issue.
One of the newer points that have emerged with increasing power is the impact of the by-catch. It deserves immediate action. The scale of the effect of the by-catch on stocks is now accepted. It can have a devastating effect on the population.
I must return—in the sense that it was years ago—to fish farming and, in particular, the effect of sea-lice infestation. It is undoubtedly the case that some fish farms are located in areas in which, with hindsight and the benefit of the knowledge that we now have, we would not have wished to see them located. I also recognise the work done by the industry, particularly under the encouragement of the noble Earl, Lord Lindsay, to clean up its act. There has been progress. There is an external concern that the dumping of fish—particularly the dumping of Norwegian-farmed fish—will have an impact on our industry. The cost-drivers faced by the industry will be so severe that it may not be able to carry forward the improvements that have been started. It is a great shame that our European colleagues have not been able to stand up to that problem with any degree of robustness.
The presence of fish farming—I accept that that is a significant issue—does not help us to understand the difficulties faced by the east coast rivers from time to time. I say that because it is a complex interplay of factors that will enable us to understand the plight of the Atlantic salmon. We should, as I said, resist the temptation to pin responsibility on one villain.
If we are looking for a universal explanation—not a sole explanation—of the situation, we should consider the effects of global warming, the change in sea temperatures and the consequential effect on the food chain. I believe that, in the longer term, such things will have, perhaps, the most devastating effect. Alas and clack, not even the Minister can deal with that satisfactorily.
I have no interest to declare. I am not a fisherman. However, I consider that this is one of the most interesting and, perhaps, troublesome issues to get one's head around. It is important, and I trust that the Government will advance on a broad front, rather than focusing on a particular issue.
6.43 p.m.
The Earl of Shrewsbury: My Lords, I add my congratulations to my noble friend Lord Forsyth of Drumlean on securing the debate. I declare an interest as an enthusiastic fly fisher, mainly in pursuit—largely unsuccessfully—of salmon and sea trout, and as a keen tier of flies. Only my bank manager knows how much I have spent on my passion in the past few years, but my wife, unfortunately, knows well how few fish have succumbed to my piscatorial skills. She constantly

285
reminds me exactly how much each fish has cost. I am also a member of the Salmon and Trout Association and of the Game Conservancy Trust.
Many noble Lords will have greater knowledge of the subject than I, but I welcome the opportunity to give a few of my views on the subject of salmon, in general, and fishing, in particular. The debate provides a wonderful opportunity to speak about a sport followed by many. I am sad that my late noble friend Lord Mackay of Ardbrecknish is no longer with us, for he would have provided us tonight with the benefit of his wide and expert views and his experience of the subject. He was an expert fly fisherman who delivered a range of casts that were poetry in motion. I know that he caught many fish and released most of them.
I have been fishing for 30 years. In that short time, I have witnessed a substantial decline in the salmon and sea trout species in the rivers that I fish in. So many experts have so many theories about the causes of the demise in fish populations, but I suspect that there are three root causes, with many lesser factors contributing. First, there is overfishing on the high seas and in coastal waters for sand eels. My experience is mainly of the east coast of Scotland, but I understand that that is not so much of a problem on the west coast. Secondly, there is poor management and control of the watersheds supplying rivers. Thirdly, there is the pollution of watercourses. Seals are a huge problem on the east coast.
Much is being done to rectify the mistakes of the past, but I have a horrid feeling that too little is being done too late. It is a constant struggle to raise funds to finance improvements to catchment and rivers, and I applaud those who strive so hard to achieve long-term solutions for our salmon and sea trout fisheries. In particular, I applaud the work done by Orri Vigfusson.
My experience is mainly of the River Deveron in north-east Scotland. Once the top-rated sea trout river in Scotland, it was described in a poem by Martin Wood as,
"the river of rivers, the weaver of dreams".
It was where, on 21st October, 1924, Mrs Morison caught on a fly and landed her giant fish of 61 pounds, with a length of 52 inches and a girth of 32 inches—it makes one's mouth water—in a pool known as the Lower Wood of Shaws. I have fished that pool, and I never came away with anything. That intrepid fisher would be shocked beyond belief today to learn that the Deveron had suffered a massive decline in its fish population, notwithstanding the fact that the nets in the estuary were bought out some years ago. Last year and again this year, my riparian landlord, a former chairman of the Deveron River District Salmon Fishery Board, gave his tenants instructions that all sea trout were to be returned, unless damaged, and asked them to make every effort not to fish for that species because they existed in that river in such tiny numbers.
Wherever I fish these days, catch-and-release is practised—rightly so—with an occasional silver cock fish being taken. But, sadly, there are still those greedy
286
fishers who kill every fish of all colours, and they must be stopped. I am certain that catch-and-release is a major part of the way forward.
I am a fly fisher primarily, and I loathe spinning. Although it is obvious that I am biased, I firmly believe that spinning for salmon and sea trout should be disallowed on all rivers, unless waters are at exceptionally high levels. But tell that to the hordes of fishermen on the River Moy in Ireland and one would likely face a lynch mob.
Many boards are taking positive action to enhance and improve their rivers and catchment areas. The River Deveron board, chaired by Robert Shields, has set up a charitable trust, and its work includes, among several projects, the improvement of the redds; stabilisation of banks; improvements to weirs, passes and fish ladders and to silt water running off from close-lying fields. It also has plans to establish a hatchery, but all that costs large sums of money. Such projects should be grant-assisted by government—by the Scottish Executive, in Scotland—especially as they ultimately benefit from the improvements to the local economy of such usually less favoured areas. The improvements that are achieved do not just benefit the local economy; they benefit the wider regional environment. North of the Border, it is vital that the Scottish Executive support the fishing sport industry. They have much to gain in tourism alone. Measures such as the Land Reform Bill did not help.
I am passionate about salmon fishing and about the rivers and the environment where I pursue my sport. I am passionate about the wildlife that those areas support. It is their habitat. We must not allow further decline, and we must support improvement, so that our children can enjoy that legacy.
6.49 p.m.
Lord Moran: My Lords, we must be grateful to the noble Lord, Lord Forsyth of Drumlean, for giving us the first opportunity for some time to discuss salmon problems.
I should declare my interests. I am chairman of the Moran committee, which met this morning. It represents the principal fishery and angling organisations in England and Wales and puts points on which we all agree to the Government and the Environment Agency. I am an executive vice-president of the Salmon and Trout Association and president of the Welsh Salmon and Trout Anglers' Association. I have a small fishery in Wales, on the upper Wye, and, like the noble Earl, Lord Shrewsbury, I am a fly fisherman and a fly tier. I should add that I have been pursuing the conservation of salmon in this House, and outside, for close on 20 years. It was, I think, some 16 years ago that my noble and learned friend Lord Cameron dealt deftly and courteously with our amendments to the Salmon Bill.
I want to make, in a very summary way, five points. First, I turn to legislation. Dr Jack Cunningham set up the Review of Salmon and Freshwater Fisheries under the chairmanship of Professor Lynda Warren. Its valuable report was published three years ago, and the

287
response of the Government came two years ago. Good progress has been made on the many recommendations which did not require legislation. But now we need urgently a Bill dealing with those matters that do need primary legislation.
The Moran committee was dismayed to learn that there might not be room for such a Bill in the next Session, when four years will have elapsed since the report came out. The Bill is unlikely to be controversial and its introduction, by the Government that set up the review in 1988, would be widely welcomed.
On 11th March, I wrote to Elliot Morley supporting Professor Warren in calling for an early Bill. Mr Morley replied on 26th March saying that the Government remained fully committed to this sector and that DEFRA would continue to press for a suitable slot. I hope that one will be found soon and I should be glad to hear from the Minister about this.
One important point which needs to be included in this legislation is Recommendation 110 of the Warren report which stated:
"No compensation should be paid to owners or occupiers of fisheries, or other interested parties, for the effects of measures adopted for conservation purposes", and that consequently,
"Section 212 of the Water Resources Act 1991 should be repealed".
The case is set out in the report on page 105, paragraph 10.9. Until that section of the Water Resources Act is repealed, the Environment Agency hesitates to bring in some much needed conservation measures because of its likely liability to compensation claims.
Secondly, I turn to Irish drift-nets, but the noble Lord, Lord Forsyth, and a number of other noble Lords, have put the case fully. Can the Minister confirm that this fishery is seriously hampering the regeneration of so many of our salmon runs and tell us what the Government have said to the Irish authorities about it? Now that good progress is being made, with the help of the Government, to reduce substantially the catch of our own drift-nets off north east England, we are in a stronger position to press them to reduce their interceptory fishery. This we should do.
My third point is about the Environment Agency and fisheries. The agency has an excellent fisheries department and a good number of admirable fisheries' scientists. Their work on salmon is valuable, although they tend to concentrate a little too much on purely restrictive measures and not enough on habitat restoration.
The agency does, however, seem dedicated to promoting boating and canoeing and to getting more people onto the rivers with scant regard to its duty to maintain, improve and develop fisheries. The navigation and fisheries departments seem to have little to do with each other. There is a real need for the agency not to overlook its fisheries responsibilities, as the Warren committee said, and to ensure that an integrated approach to these matters is followed. I
288
have tried hard to impress this on the agency but it seems curiously reluctant to deal with this in an even-handed way.
My fourth point is about transgenic salmon. I corresponded with the noble Lord, Lord Whiny, about this last year and he sent me some useful and comprehensive letters, for which I was, and am, grateful.
The potential risk is enormous. By injecting into salmon eggs a copy gene from the ocean pout, which is a growth promoter, salmon can be made to continue to grow in the winter as well as in the summer, 400 to 600 per cent faster than normal fish so that marketable salmon can be produced in 12 to 18 months. NASCO produced guidelines for action in 1997, stating that the parties—including the United States—should,
"take all possible actions to ensure that the use of transgenic salmon, in any part of the NASCO convention area, is confined to secure, self-contained, land-based facilities".
It is therefore strange and worrying that the United States authorities are giving careful thought to an application from an American company—A/F Protein—which is not confined to such facilities. If these monster salmon are raised in sea cages some will inevitably escape. Once in the environment they cannot be recalled. The action is irreversible. We simply do not know what the consequences would be. They might well be disastrous.
The Government have told us that sterilisation is not 100 per cent effective. It is therefore not the answer. Consequently, I am glad that I was able to persuade the Government to inquire from the United States authorities last year how matters stood. I should like to know from the Minister what the situation is now.
My fifth and final point is about the Severn Barrage. The Government's recent energy White Paper foreshadowed a vast increase in the production of renewable energy. It seems, therefore, possible that the Severn Barrage project might be revived. I pointed out some of the dangers 15 years ago—Hansard, 30th November 1987 at col. 804. The plan for pumping would mean that a yard long fish, swimming frantically against a current sucking them through the turbines, would inevitably be cut to pieces, while smolts passing through turbines would lose many of their scales and would have poor prospects for survival. I fear that the barrage might well spell the end of migratory fish in the Severn, the Wye and the Usk. That would be a tragedy.
I think that all this matters a great deal—economically and environmentally. We have the good fortune to have in Great Britain this great fish which still runs in many of our rivers, although in diminished numbers. We must seek to ensure that in the country in which our children and grandchildren will live, salmon will still run up our rivers.
6.56 p.m.
Lord Kimball: My Lords, it is most appropriate that my noble friend Lord Forsyth should have introduced this debate in the 100th year of the Salmon and Trout

289
Association, of which I and many others are members. In its annual report, I particularly liked the contribution by the noble Lord, Lord Mason, in which he stated that it was,
"educating thousands of youngsters in the art and sport of flyfishing".
I also liked what the chief executive of the Countryside Alliance said:
"A beacon of stability and normality in a troubled world".
However, the issue that I am most worried about in the annual report of the Salmon and Trout Association is a reference in the director's report that,
"There are serious concerns over the legal precedents being set for other field sports. Angling does not measure up to the utility argument".
I should like to make just three points. First, I turn to the issue of illegal poaching around our coast. Whatever the noble and learned Lord, Lord Cameron, may have said, it still goes on to an enormous amount. I would also like to include sand-eels, seals and sawbill ducks.
As long ago as 1935, the returning salmon and grilse from Iceland were mapped out. The fish would come around our Scottish coasts and make their way down to Northumberland and Yorkshire, where they would fall to the drift nets. The choice of any fish is always the river of its birth, but if that river is too low, they will continue on down the coast in concentric circles until they hit the Tyne and the Tees, turn around and come back again. That knowledge is shared by the nets men, who during the weekly close time from their legal netting do not waste their time.
For 15 years, I was chairman of the Naver and District Fishery Board. We put our bailiffs to sea. For the first year we picked up nine miles of illegal net between Loch Eriboll and the Caithness boundary. Wherever there is a mixture of salt water diluted by fresh water, the salmon come up to the surface. In many cases, they cannot possibly run those rivers. But the effect is that they come up to the surface and with a drift net of only three feet, every lobster pot marker can be used to put down an illegal drift net.
I am sorry to say that very few bailiffs will go to sea today, and that is most important. It is no good sending for the fishery cruiser because everyone knows when it is coming. Periodically, we used to telephone Aberdeen and people came up in a rubber dinghy. They would go around and pick up some of the nets. But the bailiffs are necessary if this is to be controlled.
On the issue of sand-eels, it is incredible that we allow the Danes to take all the sand-eels around our coast in order to fuel their power stations. A smolt going out to sea needs an adequate supply of sand-eels to provide it with sufficient food in order to reach the plankton off Greenland, where it will grow and return as a salmon or a grilse.
My noble friend Lord Monro mentioned seals. The seal population is growing at a rate of 9 per cent per year. They are counted by using a helicopter, so a great many seals dive and are not properly counted. We had been able to prevent new breeding colonies of seals
290
being established on the north coast by using our estuary nets, thus allowing us to kill them. However, I am afraid that the estuary nets are no longer working, so we have no method of destroying the seals, which are now establishing new breeding colonies. I remember being told, "The fish are in the bay, so the season is about to begin". I do not believe that it was because the fish had arrived in the bay; it was the seals following the fish because they knew that the fish were coming.
My noble friend Lord Monro also mentioned the problems posed by sawbill ducks. They are a great menace to parr. You can obtain a licence to kill them but the licence is valid only for the months of April and May. Later in the year, once the birds have hatched, is when the real harm is done. You want to be able to do in the sawbill ducks throughout the year.
Unfortunately, cormorants are totally protected. I should like to see, quite simply, a no-fly zone established for all cormorants. The cormorant is in fact a sea-nesting bird. For that reason, I should like a no-fly zone set up for all cormorants above the high-water mark.
My noble friend has done the House a great service in initiating this debate. I hope that we shall be able to look forward to another 100 years of the Salmon and Trout Association.
7.2 p.m.
Lord Jauncey of Tullichettle: My Lords, I should like to begin by thanking the noble Lord, Lord Forsyth, for raising this very important matter in the House. At the same time, I think it is appropriate to stress what an enormous economic asset a salmon river in which salmon are still running can be to the neighbourhood, whether that be in Scotland, in England or in Wales. The spin-off from such a river in the form of local employment, hotel occupancy and so forth is a matter of considerable importance to rural economies. I say no more on this matter other than to refer to what was found by Lord Hunter in his 1962 report, which stated to the effect that every rod-caught fish was worth around 10 times as much as a net-caught fish to the general economy.
Lest there be any doubt about it, I should also like to stress that salmon fishing is not a sport only for the toffs, as I think it is sometimes perceived. Many opportunities are available for people of small means to fish for salmon, certainly in Scotland. I happen to be fortunate enough to be a member of two local angling clubs which between them fish on some 10 to 12 miles of the river Erne. Friends whom I meet on that river come from all walks of life. A shop assistant in an ironmonger's is the secretary of one of the clubs, while a retired builder's labourer is another member. The clubs are widely representative.
Perhaps I may mention a matter referred to by the noble Lord, Lord Forsyth; namely, the problems associated with fish farms. Last week I had the advantage of attending a meeting with Mr Jeremy Reid, the executive director of the North Atlantic Salmon Trust. I gather that there is hope that, through

291
the use of in-feed medicine coupled with an occasional bath and fallowing, the problem of sea lice infestations in salmon farms can be brought to an end. Of course that is not to say that all the problems of disease and pollution will be solved, but it appears that there is a chance that one adverse aspect of salmon farming can be addressed and the problem terminated.
I was going to make a few remarks about drift-nets, but much has already been said on that subject. I wish only to remind the House that, until the 1960s, drift-netting for salmon was virtually unknown, the reason being that the only nets which could be used for drift-net fishing were made of rope. They were too thick, so the salmon saw them and avoided them. Only with the advent of monofilament netting, which is more or less invisible to salmon and of enormous length, could drift net salmon fishing be undertaken to any great extent.
I commend the action of the Minister, Mr Elliot Morley, in generously making available funds for the buy-out of the north-eastern nets, which it is estimated take some 80 per cent of the salmon going to Scotland. As regards the Irish nets, I too endorse what has been said: could not the Government put pressure on the Irish Government to restrict further the use of those nets? Or, better still, could they not encourage them to become involved in a buy-out? There can be no doubt that these nets, as interceptory nets, are robbing—I use the word advisedly—other rivers. After all, an interceptory net which takes fish indiscriminately can be regarded very much like a farmer who removes the oat crop from his neighbour's field, having done nothing to cultivate or maintain it.
Finally I turn to the question of seals. I have made a few calculations on this. In his report, the noble Lord, Lord Nickson, estimated that in 1995 the grey seal population stood at 105,800. Seals eat between four and 11 kilograms of fish per day. If one applies the lower estimated increase of 6 per cent by 2003—the noble Lord referred to a "substantial" increase—in the seal population, each animal eating some 14 pounds of fish a day, or 2.28 tonnes per year, making a total of 320,000 tonnes of fish a year, then that amounts to a great many fish. Of course the seals do not take only salmon; indeed, salmon may constitute only a small part of their diet, but by any view the seal population makes an enormous inroad into inshore whitefish stocks. That is particularly unfortunate when we consider the problems being encountered on the north-east coast of Scotland. Boats are being decommissioned or laid up for lack of fish, yet the seals multiply and thrive.
Under the terms of the 1970 Act, seals can be culled other than in the close time. A licence can be granted outside the close time,
"for the prevention of damage to fisheries".
If the seal population is to be allowed to continue to increase and eat without inhibition, we may reach a stage where the sea around the north-east coast of Scotland becomes simply a breeding and feeding ground for seals, until such time as they die of starvation or disease. I strongly urge the Government to press for some form of reduction in the seal population and to urge their colleagues in the Scottish Executive to do likewise.
7.10 p.m.
The Earl of Lindsay: My Lords, I, too, thank my noble friend Lord Forsyth for introducing the debate. I declare two interests. I am a fly fisherman and, more importantly, I am the chairman of Scottish Quality Salmon, a membership scheme to which two-thirds of the Scottish farmed salmon industry belong. It is not a trade association in the normal sense of the word. It is a quality scheme exclusive to companies which opt to be independently inspected and certified to standards that exceed legal requirements. The standards cover product quality, environmental management, fish husbandry and best practice.
My noble friend Lord Forsyth and others have set out the facts and figures, which speak for themselves. What has not been stressed is that the facts and figures go back many decades from the end of the Second World War. Throughout the 1950s and the 1960s, the extreme trends currently being experienced were already significant and detectable.
As my noble friend pointed out, the problem occurs throughout the wild salmon range, from the US eastern seaboard up to Canada and around to Iceland, and from the Spanish coast up past the UK, Ireland and Norway and into the Russian rivers. Given the historic length and the geographic breadth of the problem, it is hardly surprising that a wide number of factors have been identified as being of possible significance.
A member of one of the wild fish trusts has worked out that some 27 possible factors could account for the current trend. My noble friend Lord Forsyth referred to four and other noble Lords have mentioned a few more. A considerable number of factors need to be taken into account. I join with the noble Lords, Lord Thomas of Gresford and Lord Sewel, in recognising that there is a complex, multifactorial problem. Anyone seeking a single villain is doing the wild salmon an injustice because many issues need to be taken into account.
Salmon agriculture, with which I am involved in terms of standards, has been mentioned by a number of noble Lords and has attracted a considerable amount of attention in recent years. I should re-emphasise that the decades prior to the introduction of salmon farming into Scotland saw the initiation of the decline we are currently experiencing. I was interested to see in the press recently that in 1970 the Prince of Wales was writing to the Prime Minister and Ministers to complain about the decline in the numbers of wild salmon and sea trout in the 1950s and the 1960s. So concerns similar to the ones that we have today were raised 30 or 40 years ago.
The geography of salmon farming perhaps puts the industry in a better perspective. As has been pointed out by the noble Lord, Lord Thomas, there are serious declines in areas where there are no fish farms and, interestingly, there is some encouraging recovery in areas where there are fish farms. So the complexity of the issue is undoubted.

293
Whatever the interrelationship between salmon agriculture and wild salmon, Scottish Quality Salmon decided that it would commit to systems that avoided the doubt about salmon agriculture that had been created. That commitment has been absolute and complete. It is also unique. A system has been adopted that is unprecedented elsewhere in Scottish agriculture, European agriculture or global agriculture.
The roots of Scottish Quality Salmon's commitment to the environment are to be found in its mandatory code of practice, which covers some of the issues critical to the survival of the wild Atlantic salmon. In addition to its codes of practice and statutory constraints, it has imposed on itself an absolute prohibition on any kind of genetic modification, either in terms of the fish or the fish feed. The noble Lord, Lord Mason, and other noble Lords expressed their fear in this regard. Scottish Quality Salmon is determined that it will never play a part in the Scottish industry.
The most dramatic development has been the introduction of ISO 14001 accredited environmental management systems. These involve imposing probably the most comprehensive and rigorous environmental responsibilities. They are independently inspected and monitored; they are compliant with international standards and criteria; and the entirety of the regime is properly and independently accredited. They have enabled a considerable amount of progress to be made in addressing the issues raised by noble Lords.
It has also enabled us to achieve for the first time, with some consistency, the prospect of zero ovigerous lice in fish farms. A number of noble Lords have raised concerns about lice. Like the noble Lord, Lord Moran, I can confirm that under the new regime that we have introduced, with access to proper treatment lice will soon be properly and completely under control. We shall apply the same discipline to achieve full containment, with escapes down to zero in the same way that we want to get lice down to zero.
This underpins the success of the tripartite initiative in Scotland, which has involved wild fish interests, the Scottish Executive and Scottish Quality Salmon, in creating area management agreements between wild fish and farm fish interests at a loch level in order that issues of common interest can be jointly managed.
Scottish Quality Salmon's second mandatory commitment is to assist local wild fish interests in their endeavours. I have today contacted one of our members, Marine Harvest Scotland, to inquire what it has done in the past two years to assist wild fish interests. Of the many schemes it mentioned, I shall refer to four. It has donated 40,000 to 50,000 sea trout smolts to the Loch Maree system; it has helped a number of fisheries boards and local angling groups to set up their own hatcheries, providing equipment, training and assistance; it has re-stocked the River Eilt system from Loch Ailort stocks; and it has currently about 250,000 sea trout fry, properly sourced so that they can be donated back into the river systems. Such
294
work is vital. As my noble friend Lord Shrewsbury said, such restocking involves huge costs and there is a great willingness to help.
I echo the noble Lord, Lord Sewel, in flagging up climate change. Anyone who has visited the Marine Laboratory in Aberdeen will realise the enormity of the impact of changing sea temperatures in mid-Atlantic. I do not have time to quote the American data on this issue, but there are equally dramatic findings in relation to the Pacific salmon. There has been a two degree centigrade change in temperature in the middle of the Pacific.
I support those who believe that by-catch is one of the vital areas where more necessary endeavour, to use the phrase of the noble Lord, Lord Thomas, is needed. Not only have perhaps nearly one in four post-smolts from all western European rivers been taken by the North Norwegian fishery, but recent statistics from Iceland show that some 200 one-and-a-half kilos to two kilos salmon will be taken for every 800 tonnes of herring caught off Iceland. These are very serious statistics.
7.19 p.m.
Lord Nickson: My Lords, in congratulating the noble Lord, Lord Forsyth of Drumlean, on this debate, I should like to apologise to your Lordships for not being here to hear his opening words and to declare the reason for it as well as my interests. I am president of the Association of Scottish District Salmon Fishery Boards. I was conducting its annual general meeting in Pitlochry this morning and my plane, unfortunately, was half-an-hour late. I was also chairman of the Atlantic Salmon Trust and the North Atlantic Salmon Fund (UK), and am chairman of the Conon District Fishery Board.
I have been thrilled by this debate. Hardly a word has been spoken with which I would disagree. Many noble Lords who have spoken today spoke also in the last debate, which the noble Lord, Lord Sewel, will remember very well, on 30th July 1997—I had a debate following the task force which the noble Lord, Lord Forsyth, has set up. Since then, your Lordships have not had another opportunity to debate it, and much has happened in those six years. But, as has often been said, the decline in Atlantic salmon and sea trout has generally continued.
I want to concentrate on one issue, which has already been mentioned—the current buy-out of the north-east drift nets. Along with my noble friend Lord Moran, I must have seen every Minister of Agriculture, from the noble Lord. Lord Walker of Worcester, to the noble Lord, Lord Waldegrave of North Hill. All Ministers at those meetings had three things in common: they were extremely courteous; they were extremely sympathetic to what we said; and they did absolutely nothing about it. Therefore, I congratulate my successors in the Atlantic Salmon Trust and the North Atlantic Salmon Fund (UK) who, following the Warren report, have been much more successful in persuading this Government to do something which their predecessors did not and put up some money to help the buy-out of the drift nets.

295
We listened to three people speaking in Pitlochry this morning. Andrew Whitehead, the director of the North Atlantic Salmon Fund (UK), conducted all the negotiations, saw 67 out of the 69 netsmen and resurrected the negotiations after they had collapsed in October. As your Lordships probably know, the start of the negotiations seemed a curious process. The Environment Agency went to the netsmen, who naturally thought there was a vast pool of limitless money. The price for which they originally asked was £11 million, which was clearly hopeless. A formula was then produced which allied the average catch with the age of the netsmen. That was not very clever for a netsman aged 62 with quite a catch because he was not going to get very much money and of course he wanted to go on netting until he was well into his seventies. So that failed; there was a big gap, and the negotiations had to be called off in October. Then word came back that many netsmen individually would like to take part.
The current state of play is that the funds raised, including the £1.25 million put forward by DEFRA, plus what has been substantially promised, mainly from the Tweed and Tay, amounted to £2.2 million in total. The amount required is £3,300,954. There is a gap of £1.1 million. As of today, I think a bank loan will be in place to provide the money, which has to be paid in two tranches on 31st May this year and 31st May next year. But there is still a huge requirement to guarantee that money in six weeks' time. To date, £350,000 has been underwritten. There is an underwriting gap of about £750,000.
I spoke to the district fishery boards today about the boards which are most directly affected in Scotland we must remember that 80 per cent of the fish that are caught come up to Scotland. The rivers that benefit-the Tweed, Forth, Tay, Esks, round to the Dee and any smaller rivers in between—are required to put up the bulk of the money. Tweed and Tay have done so. I think and hope that when the noble Lord, Lord Thomas of Gresford, is fishing next week, he will make it very clear up and down the Dee that they need to dip deeply into their pockets. I have said the same to the Esks today.
But then I said to all other rivers, from the Spey round anti-clockwise to the Allan and the Nith, if we let this go, nobody will ever talk to us again. It has to be achieved, because how can Orri Vigfusson conceivably keep negotiating with the Greenlanders and the Faroese when they say, "The Brits are just catching our fish off their own coast anyway"? How can the Government possibly be urged, as they have been today, to talk to the Irish Government—and let us not forget the Northern Irish drift nets—when our nets are still there? We have about six weeks to achieve this.
I told those rivers in Scotland which will not benefit that they must go back to their boards. Last week I persuaded my own hoard, the Conon, to put up £10,000 towards this. We will not benefit. If every river that does not directly benefit put up money on the same scale, the figure would reduce by about £250,000. That would be significantly helpful to the project.
296
That is how I wanted to use my time. Any influence that your Lordships have to see that we must grasp this opportunity would be helpful. As the noble Lord, Lord Forsyth, was saying so eloquently when I came in, it is the single biggest issue that we face at the moment.
7.26 p.m.
Lord Livsey of Talgarth: My Lords, it is an enormous privilege to speak in this debate. I congratulate the noble Lord, Lord Forsyth, very much on initiating this debate. I declare an interest in that I fish on the River Usk. I was a member of Aberystwyth Angling Association for 14 years and my father-in-law was the secretary of Castle Douglas Angling Association for 10 years.
The plight we are talking about is the plight of the king of fish. It is a truly magnificent creature, with a brilliant and amazing life cycle, as many have said. I believe its life is an epic story, and this debate has threaded its way through that epic story. Those of your Lordships who may at a young age have read Salar the Salmon by Williamson, know that the salmon had an epic life in those days, but, my word, when we look at the problems that salmon are confronted with these days there is no comparison whatsoever with that prewar situation.
I grew up between the rivers Usk and Wye and the salmon was the greatest prize of all. Indeed, salmon was not for toffs, it was also for Taffs in my part of the world. The miners of south Wales are fantastic fly fishermen; they participated then and participate now in many aspects of fly fishing.
Many thousands of salmon were caught in the nets in the Wye. Fifteen years ago there were regular catches of over 8,000 salmon on the rods. Now we are down to 400 or 500, a very sad state of affairs. In fact, the River Wye has very few salmon indeed, yet it was undoubtedly the greatest salmon river in England and Wales in its time. The spring run had salmon up to 45 pounds every season when I was a youngster. On the Usk, the spring runs contained salmon of 30 pounds. What has happened is nothing less than a huge tragedy to those fisheries over the years. This is repeated, as noble Lords have said, all over the country. Indeed, I inform my noble friend Lord Thomas that I fish in another Dee—the River Dee in Galloway—which is a very good river.
We have had some tremendous contributions in this debate. I pay particular tribute to the noble Lord, Lord Moran, whom I know very well from my area for the work that he has done. I shall mention some of the points that he made in a minute.
We know that there are more than 3 million fishermen and women in the United Kingdom at least—some say 5 million. It is the greatest leisure sport that there is, and I am pleased to see that youngsters are being encouraged to start fishing at an early age. I started at the age of five, and the sport has never left me and has occupied many happy hours over the years. When young people are introduced to fishing, they take it up with alacrity and enthusiasm.

297
That may be the way ahead for many of our youth, but are they going to have anything to catch? That is the problem.
What has happened over the years, and why? Pollution and acid rain have produced poor quality water in upland streams and has not been good for rearing young fish. Sheep dip has not helped. We have seen many nefarious substances in sheep dips, some that kill humans and some that kill just about everything that lives in the river. Something must be done about that. Smolts are having a hard time at sea, as we have heard. Drift netting in the North Sea is problematical—even more so on the Irish west coast, where 237,000 salmon are caught annually. Clearly, that matter must be addressed urgently, which can be done only by co-operation between governments.
Drift netting is extraordinary. We have heard of drift nets that go on for many miles behind the trawlers. People have told me that some nets stretch for as far as 40 miles; I do not know whether that is an exaggeration. The gap between south-west Scotland and Northern Ireland is regularly fished with nets that go right across that gap at the top of the Irish Sea. Exploitation of the Greenland fishery and salmon feeding grounds is another vexed question that has been only partly resolved.
The advances in technology of trawlers, in terms of sonar sighting of fish and more effective methods of fishing, have also taken their toll. The issue of fish farming and the consumption of sand eels associated with that—they often provide the fish feed for the farm salmon—has also been problematical, as has the use of chemicals and the escape of farm salmon.
All that has had a huge impact on tourism. In my part of the world, ghillies have lost their jobs and there are hardly any left, especially on the River Wye.
Headwaters need to be cleaned up and opened up to improve matters, and there is a problem with predators, especially mink and goosanders. Indeed, one brood of goosanders in five weeks can consume as many as 25,000 fry. That is an extraordinary statistic. Some of those predators must be eliminated, and I am pleased that the Government have said that they will make efforts to eliminate mink, which destroy many things in the countryside, including fish.
Some points were made to me by the Carmarthenshire Angling Association about the River Towy, which runs through Carmarthen. The rod catch in 1975 was 1,300 salmon, whereas in 1998 it was 360. Likewise, the nets caught 670 salmon in 1975, while last season they took 20.
The impact of the Irish drift nets on English and Welsh salmon stocks has been enormous. Indeed, Ireland itself licenses 435 miles of drift nets on the west coast alone. We all know how many salmon have been caught that way. In England and Wales, seven out of 16 designated rivers are failing to reach minimum conservation targets in special areas of conservation. That part of the European habitat directive is not being met because of that situation. The Irish receive 700,000 euros for their fisheries guarantee fund.
298
What can be done? I suggest the following agenda. Drift netting should be banned and nets should be bought out in the interests of preventing the extinction of salmon. The problems in the North Sea have been addressed fully in the debate, and I fully back what has been said. I certainly back what the noble Lord, Lord Moran, said about the introduction of UK legislation, especially as a result of the Warren committee's recommendations. It is overdue and urgent, and I hope that the Minister will find the time to get that into the legislative programme as soon as possible.
We should prevent fishing for sand eels and secure international agreements, especially with the Irish, and get the British Government to put the case and meet the Irish. That would be in the interests of the Irish, too. Much tighter regulation on salmon farming must surely occur. It might improve the situation if we put a moratorium on the sale of wild fish—there should be no market for the sale of wild fish, as in New Zealand.
The problem of global warming is also threatening. The Atlantic Salmon Trust and Federation held a symposium in August 2002, entitled "Salmon at the Edge".
Noble Lords: Time!
Lord Livsey of Talgarth: My Lords, I realise that I have only 10 minutes. I am just finishing.
In fact, "Salmon at Sea" was the title. The symposium focused on the decline of survival of smolts, crossbreeding with farm salmon, and the 900,000 smolts that are caught by mackerel fishers. All governments should co-operate on the Atlantic coast. There should be a closure of the mixed stock netting that goes on and we must establish a right to protect Atlantic salmon. As Wilfred Carter said at that meeting:
"What hope for the world if we cannot conserve the salmon in its environment?"
Baroness Farrington of Ribbleton: My Lords, before the noble Duke speaks, I should explain that an error was made on the speakers' list. Both the noble Lord, Lord Livsey, and the noble Duke, the Duke of Montrose, should have been allocated 10 minutes each.
7.38 p.m.
The Duke of Montrose: My Lords, I start by thanking my noble friend Lord Forsyth for introducing this telling and essential debate. It is with some trepidation that I attempt to wind up from these Benches, in the face of so much expertise from around the House.
If nothing else today, we are correcting an omission. The noble Lord, Lord Nickson, has already pointed out that the Floor of this House has not seen a debate on major salmon and fresh water issues since he presented his report of the Scottish salmon fisheries taskforce, on 30th July 1997. In the meantime, the Salmon and Freshwater Fisheries Review Group's

299
Warren report was brought out in March 2000. The Government's response came out in February 2001. Neither has been the subject of anything more than a few preliminary questions by persistent fishermen such as the noble Lord, Lord Moran.
When we get back to the old question of man's impact on nature, it is always interesting to see, as my noble friend Lord Lindsay said, how the same old arguments repeat themselves—and, if I am not much mistaken, by many of the same characters who appeared in the debate in 1997.
I must declare an interest as owner of part of a salmon fishery in Scotland. However, unlike the noble and learned Lord, Lord Cameron, my knowledge does not go back to the Hunter reports.
The publication in 1997 of the Nickson report and the debate that followed it provide a useful benchmark. Given the nature of salmon, the report had to take into account the whole fishery of the British Isles. It is interesting to assess what progress has been made since the report's conclusions were drawn.
On the questions surrounding land management, the noble Lord, Lord Thomas of Gresford, mentioned that there are now polices that discourage riparian grazing and allow the establishment of buffer zones along rivers. Much work has also taken place in forestry management to avoid the release of silt from new drainage and to remove conifers from around river margins, where they can contribute to acidification.
On pollution, we now have much stronger regulation of both point source pollution and diffuse source pollution, such as is being introduced under the nitrate vulnerable zone legislation. This factor may contribute to an improvement in the rivers of Wales mentioned by the noble Lord, Lord Thomas.
On water extraction from rivers and other sources, we are to see, for the first time, comprehensive centralised control on extraction following the passage of the Water Bill which is presently before this House. Also to come is the implementation of the EU Water Framework Directive, which, despite the fact that water is still a government-controlled industry in Scotland, has already been introduced in Scotland by primary legislation.
Perhaps I may express one worry in that regard. At the moment, there appears to be a further threat to capital investment in many west coast Scottish rivers—mentioned by the noble Lord, Lord Nickson. But in this case it is due to the uncertainty introduced through the Scottish land Bill and the crofting community's right to buy. I know that this is not an issue for the Minister in this House, but it underlines the fact that, if we value salmon fishing, adequate long-term finance is required. As the noble Lord, Lord Nickson, emphasised, we ignore that point at our peril.
One of the recommendations of the Warren review was that there should be an accelerated procedure in emergencies for making by-laws. In their response, the
300
Government promised to give that further consideration. Will the Minister tell the House what progress has been made?
On the question of primary legislation, mentioned by the noble Lord, Lord Moran, and the noble Baroness, Lady Golding, perhaps I may remind the Minister that the Nickson report recommended in 1997 that a Bill to consolidate salmon fisheries legislation should be presented to Parliament as soon as possible. The matter was raised again in the Warren review. Even in a Written Answer in another place on 16th December 2002, the Minister stated the Government's intention to introduce new proposals for salmon and freshwater fisheries to implement the agreed changes. Will the Minister give the House an insight into when we are likely to see a White Paper or some indication of what the Government propose?
I must pay tribute to my noble friend Lord Monro for his work over the years on drift netting and on so many other aspects of fishing. As many speakers have said, drift netting remains a major bone of contention. It has been the subject of a campaign for 40 years.
The UK has four areas in which drift netting has taken place. It is now banned in Scotland—and has been since 1962 and the ban has been extended to trawls and gill nets. Northern Ireland is now subject to a buy-out programme which, according to a report in the Belfast Telegraph last November, had achieved a 60 per cent buy-out for a cost of £2 million in compensation, with the hope that it will finally reach 80 per cent.
My noble friend Lord Forsyth and the noble Lord, Lord Nickson, gave an up-to-date picture of the situation in the North East of England. In their response to the Warren review, the Government said that they would introduce a power to,
"restrict the numbers of net licences for economic and social reasons",
but,
"it should not be used to deprive netsmen solely and mainly dependent on fishing for their livelihood".
In conjunction with what the noble Lord, Lord Nickson, has told us, implementation has been held up for want of other funding, with considerable blame being directed, even in this House, at the Scottish Executive. I ask the Minister: how many licences have been surrendered in that fishery since the report in 2000, and is the ultimate target of the Environment Agency in this area total closure or a reduction to 17, as was mentioned by one of my noble friends earlier; and is that considered adequate?
The biggest issue, as so many speakers have said, remains the west coast Irish drift net fishermen. The efforts of the Irish Government to reduce catches have so far resulted in a reduction of only 8 per cent. This and other frustrations are probably behind the effort that is being made to apply the EU habitats directive, where Atlantic salmon is listed in Annex 2, relating to the conservation of species, to this fishery.
When the directive was considered at the time of the Nickson report, it was thought to apply only while salmon were in fresh water. Do the Government have

301
any evidence that this can now be used in the marine situation? As my noble friend Lord Monro so ably put it, can they see their way to taking this issue forward?
The majority of speakers have highlighted another area where considerable damage is being done by Russian pelagic fishing-boats and the by-catch which has to be thrown away. It may help the noble Baroness, Lady Golding, if I tell her that the Scottish Executive has taken this matter up with the Russian Federation. Do the Government have any plans to assist in solving this problem? It is an area where the UK Government could exert some influence.
I look forward to hearing the Minister's reply to what has been at times a sharp and incisive debate.
7.46 p.m.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, if the noble Duke felt trepidation in replying to the debate, I must say that I do.
I am grateful to the noble Lord, Lord Forsyth of Drumlean, for raising this subject for debate. Both the preparation and the debate itself have certainly informed me. Frankly, until that point my knowledge of salmon fishing was virtually nil. I have never fished, and am never likely to—I have neither the patience nor the masochism! However, I recognise that it does, in practice, give a large number of people an enormous amount of enjoyment, as it does to many noble Lords who are present. It is also the case that I have no direct responsibility for fisheries. Tributes have rightly been paid to Elliot Morley, who has done much in this field over recent years, as did many of his predecessors.
I have an additional problem, in that I shall not be tempted by the noble Lord, Lord Monro—or even by my noble friend Lord Sewel—to override the devolved powers of the Scottish Executive and shall have to disappoint him if he expects me to do so.
On the other hand, in my ramblings in England, Scotland and Ireland, I have seen the salmon run, and leap, in both natural and artificial surroundings. It is a magnificent creature. It would undoubtedly be a tragedy for us all if this fish disappeared. The figures for the long-run decline indicate that we are faced with a serious problem. I can assure noble Lords that Her Majesty's Government are determined to do something about that where they can.
This is a complex issue. As my noble friend Lord Sewel said—as did the noble Lord, Lord Livsey—there are at least 27 causes for the decline in the numbers of salmon. Some of the culprits have been identified in the debate. I did not list all 27, but I noted: fish farms; nets; sand eels; seals; the Irish; and cormorants. There are quite a lot of factors involved.
Some other factors, which are not clear culprits—such as climate change and the total management of estuaries—are at least as important as these identifiable causes. That is one of the reasons why it is not all doom and gloom. Salmon fisheries in some of our rivers have improved significantly, as the noble Lord,
302
Lord Thomas, indicated. While his noble friend Lord Livsey bemoans the situation on the Wye, there are other Welsh rivers which have improved. Indeed, it has recently been announced that on the Tweed—mentioned by the noble Lord, Lord Forsyth, in his opening remarks rod catches for 2002 were the highest for a decade. Stocks are also increasing on many other rivers. I understand that 20 per cent of last year's rod catch in England and Wales came from rivers that did not support salmon fisheries 40 years ago. So there is hope when we manage our resources effectively. Salmon have even passed by this Chamber, which would certainly not have been possible 40 years ago.
Nevertheless, this is an extremely serious problem and a number of measures are needed to deal with it. In 1998, ICES advised that the Atlantic salmon were in decline throughout their range and that extreme caution should be exercised in their management. Consequently, in England and Wales, the Environment Agency has advertised a package of measures to help conserve salmon stocks, particularly spring run fish. These so-called "national salmon by-laws" were confirmed by Ministers and came into effect in April 1999. The measures include delaying the start of the salmon netting season, restricting the use of certain baits and methods and the mandatory release of all salmon caught by rod and line before 15th June—which happens to be my birthday—each year.
Further local restrictions have been introduced where necessary and the Environment Agency is to carry out a review of the effectiveness of these national measures. So a lot has been done internally in terms of river management. Additionally, as the noble Lord, Lord Livsey, and the noble Duke said, various other measures to restrict the pollution of our rivers will help.
More widely, there are considerable problems with drift nets to which various noble Lords referred, particularly in relation to the drift net fisheries on the north-east coast and especially as they affect fish returning to Scottish waters. The UK Government have long acknowledged those problems. I shall return to the point.
However, the Government's overall approach to salmon fisheries has been very much informed by the Warren report, to which my noble friend Lady Golding and others referred. It recommended that the Government should provide pump-priming funding to launch compensation arrangements to accelerate the voluntary phase-out of fisheries such as those in the North East. The recommendation was accepted and the Government are providing substantial funds for the objective. The noble Lord, Lord Nickson, updated us on the rather difficult negotiations. I tell the noble Duke that the fishery is subject to measures that are designed eventually to reduce the number of netsmen to zero. Since the phase-out began in 1992 it has been reduced from 142 to 69.
The discussions on the voluntary buy-out are, as I said, continuing. The issue of further funding is doubtless due to be considered by others in the context of the latest information which we received today. I

303
shall not comment further on the responsibilities or otherwise of the Scottish Executive in these matters, but no doubt they will take note of your Lordships' debate and of developments.
The Irish are the other group affected by the target. Of course many other salmon net fisheries operate in UK waters, including those of the Russians, but it is widely accepted that the Irish drift net fishery takes salmon from English and Welsh as well as Irish rivers. The issue is therefore of concern to the Irish and the British Governments. The British Government have been in discussions with the Irish, and it is true that the Irish experts largely agree with us. However, the politics of fisheries in Ireland has hitherto prevented the Irish Government from taking effective measures. Nevertheless, we continue to approach them in that respect. As for the other governments, including the Russian Government, I shall have to write to the noble Duke. I am not aware of the precise situation in relation to Russia.
As I said, the framework of our policy on the management of salmon and fresh water fisheries was set by the Warren report—which made almost 200 recommendations, all but five of which the Government fully or largely accepted. Many of the recommendations have been taken forward by the Environment Agency and the relevant government departments. Although it recommends action for application in England and Wales, the recommendations also apply elsewhere. Among the many issues which the review report highlighted was the need to continue and improve communication and collaboration between governments and the industry on fisheries management.
The majority of the recommendations can be and are being carried through without primary legislation. I appreciate that a number of noble Lords have expressed disappointment that we have not yet had a salmon and fresh waters fisheries Bill to introduce some of these measures. Discussions on the programme to be announced in the Queen's Speech are never revealed in advance, but I can assure your Lordships that DEFRA remains committed to such legislation.
As for the Scottish position, a similar review carried out by the noble Lord, Lord Nickson, has meant that most of the recommendations have been implemented. Implementation of some of the measures in Scotland has not required primary legislation, but others will not be implemented without it.
It is clear that many of the more complex problems cannot be resolved locally, nationally or by national legislation but demand a collective awareness and agreement at a wider, international level. That is where NASCO—the North Atlantic Salmon Conservation Organisation—has a vital role to play. Although its only regulatory role is to establish quotas for salmon fisheries off Greenland and the Faroe Islands, it is also a very important source of co-ordination for international research and provides a very useful forum for discussion of matters such as the effects of fish farming and the potential impact of genetically modified organisms.
304
The noble Lord, Lord Forsyth, raised particular concerns about the proposed salmon farm on the River Ettrick. Although I recognise the significance of that case, I would, even in an English planning decision, be prevented by my lawyers from commenting. I am also subject to a constitutional bar on commenting on matters in the planning system in Scotland. However, I think that the tone of this debate recognises that the Ettrick situation could have implications for salmon fisheries which need to be taken into account.
Generally, it is clear that fish farming—or aquaculture—has many advantages, not least the relatively cheap supply of fish to consumers in the United Kingdom and abroad. We are also aware of some of the downsides of aquaculture. It is important to recognise that the decline of the North Atlantic salmon began long before the start of significant levels of fish farming in this country. Fish farming therefore cannot be recognised as the main or initial cause of the salmon decline. Indeed, fish farming albeit not sea fish farming—has been a well-established feature of the British landscape for many years. However, the Government recognise the concerns. There is a significant problem with escapes—400,000 is the usually accepted figure—on which, to minimise them, sea fish farmers need proper advice. The prevalence of sea lice and other fish parasites and diseases also cause significant problems particularly for young salmon.
It is necessary to maintain a balance between the advantages of aquaculture and fish farming and the need, as the noble Earl, Lord Lindsay, said, to improve it. I understand that the Scottish Executive has safeguards in place to protect the marine environment and that they are constantly revising them.
There are other threats to salmon. My noble friend Lady Golding mentioned the parasite, whose Latin name I shall not attempt to pronounce. I shall simply refer to it as GS. That parasite originated in the Baltic and spread to Norway, where it wiped out salmon stocks in more than 20 rivers. It has also been found on the Continent. It is already a notifiable disease here but would be a serious problem were it to break out here. We need to ensure that precautions are taken. There is a need for the public, and especially those involved in recreational fishing both here and abroad, to recognise the problem.
Although GS cannot survive in seawater, it can survive for several days in damp freshwater conditions. Therefore, it could be brought here in plastic bags, fishing equipment and so on. It is important that those who engage in recreational fishing are aware of that. In April last year DEFRA and SEERAD published a code of practice to raise awareness of that problem and to avoid the introduction of GS to Great Britain. The code gives detailed information about the activities that could potentially result in the introduction of that parasite. We expect soon to issue a new leaflet in the series, Keep Fish Diseases Out which gives more guidance on preventive measures. We intend to give the leaflet wide publicity.

305
Another threat mentioned by my noble friend Lord Mason and, in some detail, by the noble Lord, Lord Moran, was that of genetically modified salmon. There is considerable concern about that matter. Research activity has been carried out in the United States. No genetically modified salmon is farmed in the UK and any application to do so would have to go through a very extensive and rigorous review process. There is no sign of that even beginning to happen. I have corresponded with the noble Lord, Lord Moran, on the situation in the United States in that regard. The latest situation is that the applications to farm such salmon in the United States have not been processed. Therefore, the potential problem is no greater than it was a few months ago.
As regards marine fish farming in Scotland, I understand that legislation in Scotland now allows Scottish Ministers to make orders enabling planning authorities to discharge planning functions in relation to marine fish farming developments up to the three mile limit. That is an important extension of their powers.
The Government are providing some £9.8 million grant-in-aid in England and Wales to help the Environment Agency's fisheries function achieve its key aims and objectives.
As my noble friend Lady Golding said, the creation of DEFRA brought within the ambit of one government department responsibility for most of the key functions affecting freshwater fisheries, including water quality, agriculture and other matters which affect the management of fisheries and of rivers. That is an important development. We are still in the process of bringing that together.
I probably have time to discuss one or two other threats to salmon mentioned by a number of noble Lords. The noble Lord, Lord Monro, and others mentioned birds that predate on fish, in particular cormorants. The noble Lord, Lord Kimball, also mentioned that matter. We are aware that cormorants have extended their range and now overwinter and feed at many inland water sites. But although the population has increased, the indications are that it is now stabilising. But it can nevertheless have a very serious localised effect. It may be helpful to explain the legal position on licensing of ways to deal with such predators.
Fishery managers may apply for licences under the provisions of the Wildlife and Countryside Act 1981 to shoot piscivorous birds on a local basis and for a limited period of time. I stress that where licences are issued, this is done primarily to aid scaring rather than culling and to provide point defence for fish at particular locations and during vulnerable times in their life history. These licences are not permanent but are available in certain circumstances.
306
I say to the noble Lord, Lord Kimball, that angling is a sport that is clearly enjoyed not only by a large number of your Lordships but also by many millions of citizens. I regret in a sense that the matter has been raised again but I understand why it has been. I reiterate Her Majesty's Government's support for angling and for the wider issues of freshwater fishery management. I make it absolutely clear that we have no intention whatever of introducing legislation to restrict or ban angling. I hope that your Lordships, particularly those who have spoken in the debate, enjoy many years of fishing, in particular fishing for salmon. I once again thank the noble Lord, Lord Forsyth, for initiating the debate and thank other noble Lords who participated in it. I thank them for the information they provided.
8.6 p.m.
Lord Forsyth of Drumlean: My Lords, I confess that when I tabled the Motion and was successful in the ballot I panicked because I wondered whether anyone would speak on the subject. I could not have dreamt that there would be such an array of talent, knowledge and expertise. Indeed, I am embarrassed that so many of the contributions, to which I cannot refer individually, came from noble Lords who have made it their life's work to try to do something about the decline of salmon stocks.
I sympathise with the Minister's plight in responding to the debate but I hope that he will take away three points from it. First, there is consensus across this House in all parties and on the Cross Benches on the need for action. Secondly, there is frustration at the inability to move forward on legislation in England and Wales following the work that was carried out. The noble Baroness, Lady Golding, made a tremendous plea for action in that respect, to which I am sure the Minister will feel able to respond.
Thirdly, I refer to the urgency of action on drift netting. I appreciate the Minister's difficulty in respect of devolution. But devolution was never intended to prevent our acting on an issue which affects the whole of the United Kingdom. That message has come out loud and clear. Therefore, I hope that the Minister will discuss that matter with his colleagues, reflect on his new-found knowledge and recognise that that is an urgent and important matter.
The Minister said that he did not have the patience to be a fisherman. However, he is a Minister.
If he listens to the speeches he will realise that the patience of fishermen has run out. He as a Minister can do his country, and indeed the international community, a singular service if he focuses on the arguments put forward tonight. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Code of Practice on Time Off for Trade Union Duties and Activities 2003
8.8 p.m.
Lord Davies of Oldham Lord Davies of Oldham rose to move, That the draft code of practice laid before the House on 10th February be approved [15th Report from the Joint Committee].
The noble Lord said: My Lords, the code was first introduced in 1978. It has been revised several times since then to reflect changes to trade union law and to employment practices more generally. ACAS has produced this latest version of the code in response to the Employment Act 2002. Section 43 of that Act provides rights to union learning representatives—ULRs—to "reasonable" time off with pay to carry out their functions and to undergo training. The Act also gives the right to "reasonable" time off without pay to union members wishing to access the services of ULRs.
Union learning representatives are lay union representatives. Their main function is to advise union members about their training and educational and developmental needs. They are particularly effective at raising interest in training and development, especially among the lowest skilled workers and those with literacy and numeracy problems.
Unions have had a long-standing interest in training matters, but ULRs are a new phenomenon. Just six years ago, there were very few of them indeed. Now, I am glad to say, their numbers have grown to more than 4,500.
The Act specifies that either ACAS or the Secretary of State may produce a code containing practical guidance in two areas: first, the time off entitlements to ULRs and, secondly, what training should be sufficient for ULRs to begin carrying out their functions. In the event, the Government thought that it was more appropriate for ACAS, with its wealth of employment relations experience, to produce the code. ACAS issued an initial draft last year for consultation. Fifty responses were received, the majority of which were generally supportive.
The bulk of the draft code before us incorporates guidance contained in the existing code. Much of the wording is therefore unaltered. However, some minor changes were made to update the text. For example, paragraph 11 states that unions and employers might wish to negotiate about "family friendly policies". Another small change at paragraph 16 relates to the entitlement of lay representatives to time off to accompany workers to disciplinary and grievance hearings. That right was introduced in the Employment Relations Act 1999 and came into effect in September 2000.
As I said earlier, the most significant changes to the code concern the addition of guidance about ULRs. Paragraphs 13 and 14 cover their time off entitlements. Those paragraphs, together with Section 4 of the code, give guidance on what factors or circumstances should be taken into account when assessing whether time off for ULRs would be "reasonable".
The second strand of the code's guidance relates to the application of the "training condition". The Act requires ULRs to be sufficiently trained to carry out their duties either at the time they begin functioning as a ULR or within six months of that date. That latter time limit provides for individuals to receive paid time off to receive the initial ULR training.
The code of practice gives guidance at paragraphs 22 to 26 on what may constitute "sufficient training" in practice. Useful examples are given on how employees could demonstrate that they have received sufficient training. They include attendance at a training course or the shadowing of an experienced ULR. Relevant previous experience may also help to demonstrate that that condition is met.
We did not want the training condition to be restrictive or narrow. That is why we did not want it to be tied to any specific qualification. People learn in different ways. Formal learning leading to a qualification suits some people but not others.
Noble Lords may be aware that the Joint Committee on Statutory Instruments made a number of observations on the code. Those observations relate to Section 199(3) of the Trade Union and Labour Relations (Consolidation) Act 1992, which provides that the code must contain guidance on time off for trade union activities that are connected with industrial action.
The committee recognised that the code's wording is sufficient to meet the requirements of Section 199(3). However, it reported that the code did not specifically refer to those parts of the text that fulfil the requirement under that section. The committee considered that an explicit cross-reference to Section 199(3) would make matters clearer. We are grateful to the committee for its views, which we take extremely seriously. The code is designed to provide practical guidance to trade unionists, employers and individuals when they apply the ULR entitlements at the workplace. It is therefore written in a style which is accessible to the practitioner audience. The absence of a cross-reference does not significantly weaken the purpose of the code. However, the Government will certainly draw the committee's observations to the attention of ACAS and invite it to give them due consideration when the code is next revised.
ACAS has drawn on its rich pool of knowledge of employment regulations to revise the code. The text is based heavily on the existing code, which has worked very well and given helpful advice to many thousands of practitioners. I am confident that the latest version will maintain that excellent record and that it will prove invaluable guidance to all concerned. Therefore, I strongly commend the code to the House for approval.
Moved, That the draft code of practice laid before the House on 10th February be approved [15th Report from the Joint Committee].—(Lord Davies of Oldham.)
8.15 p.m.
Baroness Blatch: My Lords, the House will be grateful to the Minister for explaining the code. It

309
received a fairly full discussion in another place and a number of questions arose from that. I want to reinforce one or two of those matters and add one or two myself.
First, I want to refer to a point which I do not believe was made in another place. The noble Lord referred to there having been 50 responses. It seems to me that, when one thinks of the number of employers, that level of response is fairly pathetic, especially if the CBI, which is responsible for companies employing very large numbers of people across the country, is counted as one of the 50. By and large, the CBI does represent larger companies. Often when burdens are placed on industry, the larger companies are far better able than medium and small-sized companies to meet the costs involved. I do not know whether, in responding to the debate, the noble Lord will be able to say what the department thinks of the level of response. On the basis of 50 responses, I believe it is difficult to determine how the code was received by employers.
Next, I turn to the report of the Standing Committee on Delegated Legislation. I refer to the first column of the report—col. 3—where the committee discusses the number of ULRs. My understanding is that the number will rise substantially to 22,000 union learning representatives. I quote from the report:
"We believe that with the new statutory rights there could be more than 22,000 ULRs in place by 2010 supporting as many as 250,000 workers".—[Official Report, Commons Sixth Standing Committee on Delegated Legislation, 2/4/03; col. 3.]
That is one ULR per 11 workers. Is that really what the noble Lord is advocating? What would the cost of that be to industry and what is the impact assessment to employers expected to be in 2010, particularly for medium-sized and smaller employers? That seems to me to be an enormously high ratio.
On the general point of education, I do not want to say anything that would argue against the importance of people continuing to improve their skills. Whatever the level of skills, there should always be an opportunity to go to the next level. But the predominant talk about the kind of skills addressed by the ULRs is that they are mainly basic skills. That predominantly forms the work of ULRs. If one looks across the piece in education, there are further education colleges, a university for industry, learndirect and learning and skills councils, not to mention the fact that the skills mostly referred to are basic skills, which frankly should have been mastered when the young people were at school.
Therefore, one wonders why there needs to be another complete layer of people who are concerned with improving skills in the workplace. Of course, there is a responsibility on employers, and one recognises that. But the Adult Literacy Basic Skills Unit—I believe that it has a new name these days—also deals with adult literacy and numeracy and basic skills. I wonder whether the noble Lord is able to comment on that.
On reading partly the code and partly the report of the debate in another place, I found it difficult to know exactly who these people are and what they are. What
310
is their job description? Do they have a full-time job description? Does the work form part of their normal work? Are they normal employees of companies who take on the work as an extra duty? If they do, what is the minimum qualification required to undertake the whole business of addressing the education and skills needs of other employees? It seems to me that, if they are in that position, they should be fairly skilled themselves, but I am not sure whether they need a minimum level of qualification.
The other point is that peppered throughout the code is the word "reasonable". In another place the Minister was not able to throw much light on what that meant. It seemed that if a challenge was made it would presumably be left to tribunals to determine what was reasonable. But I believe that it is incumbent on someone to have a view about what would be a reasonable action on the part of employers, what would be unreasonable, and whether "reasonable" takes into account the size of a company, its ability to meet the training needs of its workforce and the inability of some very small firms to do so. I believe that more than 90 per cent of companies in this country employ fewer than 50 employees. So you are talking about large numbers of companies with small numbers of employees.
Another question for the Minister is on the compulsory nature of the code. Why can we not leave it to the good will of the employers, co-operating with the unions? The Minister in another place spoke of the high level of co-operation between unions and employers. If that is the case, why do they need a compulsory code? A compulsory code smacks of "You must do this or else", and the "or else" is judged by the standard of reasonableness. As we do not know what "reasonableness" means, it seems to be a difficult proposition for employers.
My final point is on burdens. Whenever we receive a code or a regulation or a statutory instrument from the Government that will have an impact on employers—usually the impact is one of cost and time but it is taken in isolation. One considers this to be a laudable activity; it concerns improving the skills of the workforce, with which it is hard to argue. But putting this code alongside all the other regulations on employers means that for many it will add up to a burden that they simply cannot absorb. If this is a compulsory activity for employers, they will have no choice. They either comply or they go to court, or, worse, they go out of business altogether. We know that that has been the case and that some have gone out of business simply because of the weight of regulation.
The code means time off for the union learning representatives, for union members and for their representatives and it means time off for part-timers for trade union activities. It will also increase the burden on business, so it would be helpful if the Minister could let the House know the cost of the so-called predicted 22,000 ULRs—I notice that there could be more than 22,000—who will serve only 250,000 workers, a fraction of the workers in this country. What will be the impact on the employers

311
who will have to meet their proportion of the costs, and what will it mean for a workforce, where a substitute workforce will be required to cover for those taking time off? If we are to pass a code of practice like this in Parliament, we owe employers and employees an explanation.
Baroness Sharp of Guildford: My Lords, I too thank the Minister for explaining this new code of practice. As he said, it puts into effect the proposals in relation to statutory trade union learning representatives, which were incorporated, with support from these Benches, into last summer's Employment Act.
The purpose of the trade union learning representatives is to facilitate access to learning in the workplace. At present, as the noble Baroness, Lady Blatch, made clear, the emphasis is on basic skills. There are some 7 million adult employees in this country—approximately 25 per cent of the workforce—without a level 2 qualification, which means that they do not have a qualification equivalent to five A to C grade GCSEs. Many of them have no qualifications at all. Many of those people have problems with basic literacy and numeracy, which, in turn, has knock-on effects on their ability to cope with more complex job responsibilities; for example, reading health and safety requirements on new machinery. That inhibits their performance in the workplace. A perennial problem of British industry is its low productivity performance.
Pilot studies found that trade union learning representatives were an effective way of encouraging people with low skills levels to upgrade their skills. Often such people did not wish to reveal their lack of competence to their fellow workers, let alone to management, but many of them have been willing to talk to their trade union colleagues about those issues, seeing them as neutrals in whom they can confide. The success of the pilots encouraged the Government to incorporate the trade union learning representatives into the 2002 legislation.
On these Benches we back the proposals 100 per cent. We share the Government's concern with the lack of basic skills in the workforce and we are pleased to see the success of the pilots. Building on them, the whole learndirect initiative plays an important part in the basic skills agenda. These initiatives are, as I understand them, complementary to the trade union learning representatives rather than being competitive with them. Many basic skills initiatives work with the trade union learning representatives.
We welcome therefore the extension of the role of trade unions into the training function and the prospect that every unionised workplace will have such learning representatives. We are not worried about these issues because we think that—and many empirical studies have shown this—increased skills increase productivity. That is very much to the advantage of particularly small and medium-sized firms where the big problem of upgrading of, so to speak, hi-tech in low-tech industry really lies. One
312
needs to concentrate on upgrading their skills. Getting in at the bottom and working bottom up is so important.
Baroness Blatch: My Lords, I am grateful to the noble Baroness for giving way. Does she not agree that some companies in the first place cannot even afford the time off for their employees? It is a vicious circle. If they cannot afford the time off, then the choice for them is to go out of business or to be taken to court.
Baroness Sharp of Guildford: My Lords, I point out that these apply only to places that are unionised. Many very small industries are not unionised at the moment. That is perhaps one of their problems.
We think that ACAS has struck the right balance in these proposals. It is obviously sensible to make sure that such people are properly trained before putting them into a position where they are advising others. We endorse these proposals.
Lord Davies of Oldham: My Lords, I am grateful to both noble Baronesses who have contributed to the debate. I shall try to answer as accurately as I can the specific questions which the noble Baroness, Lady Blatch, introduced into it. On the issue of consultation, representatives of smaller businesses did reply to it. ACAS certainly sent out its document for the widest possible consultation. The Institute of Directors, for instance, responded to it, as did the British Metals Recycling Association. That association contains many small companies. I recognise—I think we always feel this with any form of consultation—that if we have less than a 100 per cent response then we have not consulted everyone. It would always be advisable and best if we could. It is in the nature of these documents. It is a free country. People make up their own minds whether or not they respond. What we do have is an overwhelmingly positive response.
The noble Baroness contends that that is principally because the larger companies would respond, but it is also the case that the larger companies are rather more involved in this work than the very smallest. As the noble Baroness, Lady Sharp, indicated, the very small companies are less likely to have trade union representatives and therefore less likely to come within the scope of this measure. I accept the point that we would always want to get a 100 per cent response to consultation if that were ever possible.
On the issue of basic skills, the noble Baroness referred to young people. I reassure her and confirm her in her own knowledge that we are not talking just about young people. The idea that the literacy and low skill levels of this country are attributable only to the 20 years in which the Conservative Government were in control of education would not be a fair charge to make. The story goes a long way back in terms of low level of skills in this country. What is different is that we now have an administration that is setting out to address it at the very highest level.

313
I am grateful for the remarks of the noble Baroness, Lady Sharp, in which she established the context for this code and the work to be done. It is in the context which the Chancellor put in his speech this afternoon on the Budget of how much we need to increase productivity. That does of course require the necessary investment and support to our industry in all kinds of ways. However, it also needs a significant level of skills in industry, as we know that by every international measure Britain compares very poorly in that respect. It is a key aspect in our relatively low level of productivity.
That is why—although, as the noble Baroness rightly said, other agencies such as the Basic Skills Agency are involved in that work and doing an excellent job—there cannot be too much provision of opportunity to enhance skills among people. They must, by definition, have had a poor educational experience of some kind in the past and a dearth of opportunities, otherwise they would enjoy the skills that they require but clearly do not have. That is robbing them of their opportunities and, what is more, is robbing us in the wider society of the ability to benefit from their enhanced skills.
That is why we consider that feature as important in contributing to the training opportunities of the country. Why is it compulsory? If all employers took such a keen interest in the development of their workforce, their training, education and opportunities for enhancement, they would have responded positively, in the way pleaded by the noble Baroness, to the measure and considered it as an opportunity to enhance their productivity and therefore their potential profit.
In fact, of course, the charge that the noble Baroness laid at our door—the limited response—is part and parcel of what we know to be a generation-long problem, if not longer, of the relatively little attention paid to training and skills opportunities in this country. Employers must take their share of responsibility for that.
The noble Baroness asked about the definition of "reasonableness". She no doubt knows that there is no statutory definition of "reasonableness" as, on the whole, the law is not constructed by theoretical philosophers and the definition of reasonableness is often contested by competing interests. However, within the framework of employment law and the relationship between employers and trade union representatives, we all know what we mean by reasonableness. We mean where a bargain can reasonably be struck.
The noble Baroness is right to say that that will vary between a large company, which can allocate more time to a larger number of employees to engage in such activity, and a smaller company that needs the activity and energy of the people who work for it devoted overwhelmingly to the work that ensures that the company continues in business. But that is why the concept of reasonableness is there: because the bargain needs to be struck. I am happy to say that, on the
314
whole, reasonableness works rather well in British industry at present. We have a basis of co-operation and understanding on which people are able to strike bargains within a framework of law.
The law is necessary to ensure that trade unionists have rights and that employers have obligations to respond to them. Nevertheless, what must be achieved in the relationship between them must be reasonable. That is why that term appears in the code.
On the question of how many ULRs will appear, I am tempted to say, in the vernacular, "The more, the merrier", but that might be too jocular. Let me state the obvious point. There are 100,000 full-time trade union representatives in this country. The figure cited of 22,000 by 2010 would mean that the number involved in that essential work would be only one-fifth of the total present number of full-time trade union representatives doing union work. I said full-time; I meant full-time and lay people who perform trade union work and are defined as trade union representatives.
So we do not seek an expansion above and beyond what obtains at present. Those people will be far in excess of the number of ULRs. Far from being excessive—I think that the noble Baroness cited the figure of one in 11 workers—
Baroness Blatch: My Lords, I did not say that the figure was excessive; I said that the figure cited by the Minister in another place was 22,000 for 250,000 workers. I simply said that that is one to each 11 employees.
Lord Davies of Oldham: My Lords, I see that a slight misunderstanding has crept in. The Minister may have made an error; it is not unknown for Ministers to do so. But I must accept that the noble Baroness has quoted him accurately. She will recognise that, if such an error occurred, it was the result of a slip of the tongue. Clearly, with 22,000 new ULRs, there will not be one ULR to 11 workers in this country; otherwise, the workforce will have been decimated to such a level that the crisis would be far beyond the scope of education or this code. There is something wrong with the figures. I do not have them with me.
I recognise that the noble Baroness queries the figures purely as part of a genuine enquiry and to seek reassurance that the numbers we propose will involve only one fifth of the present number of trade union representatives engaged in some lay trade union activity. From what I know, British industry has not come to a halt with 100,000 trade union representatives. I am sure that the noble Baroness will concur with that fact if with no other that I put forward.
So I recognise the anxieties. Costs are involved—they are bound to be part of investment in people's skills development. The noble Baroness's question is quite right. I know how she strives—as, I hope, I do in a much humbler capacity—to enhance the educational achievements of school-leavers to reduce the skills deficit in British industry. But we have inherited the

315
substantial problem of people who work in industry at present. We know that, for all sorts of reasons, we will never be totally successful with such education in schools. Therefore, training at the workplace will always be an essential investment. The code simply enjoins employers and trade unions to play their part in investing—through direct resources and, even more valuably, time. In doing so, they will be working in partnership. On that basis, I commend the code.
Baroness Blatch: My Lords, before the noble Lord sits down, he has not answered my questions. I did not argue against training in the workplace; I started my speech by saying how important it was. I asked what was the financial impact assessment of the order. A financial impact assessment is supposed to be made of all Bills, orders and regulations in this House.
My other question, which was not referred to, is what is the minimum educational qualification of a person holding ULR status?
Lord Davies of Oldham: My Lords, I apologise for not replying specifically to the question on costs. I am hoping to build on the point made by the noble Baroness, Lady Sharp, that the cost must be balanced against the benefit from the enhanced skills of the workforce. The cost will be £6.3 million in the first year, rising to £26.1 million after eight years, when the ULR numbers have risen to 22,000. On that basis, the figures are not insignificant, but, given the training investment that we make in this country, neither should they cause undue concern.
On qualifications, we do not believe that the training of ULRs should be approached on the basis of qualifications. People will be able to do the job on the basis of experience in the workplace. After all, we will be asking ULRs not to be trainers specifically but to introduce to those with needs the opportunities and signposts directing them to available help and resources to meet their needs. Within that framework, ULRs will play a very important part in the workplace of adding to the total resources that we develop to enhance the skills of the nation.
On Question, Motion agreed to.

Coal-mining
8.39 p.m.
Lord Hardy of Wath Lord Hardy of Wath rose to ask Her Majesty's Government what they are doing to develop clean coal technology and to maintain the mining engineering industry within the United Kingdom.
The noble Lord said: My Lords, the matters to be raised in the debate this evening are of considerable significance and relevance. They touch on the White Paper. I recognise that, in that document, the Government took the long view and offered not merely hope but a degree of intention. Some refinement of short-term policy is required, especially if the Government are to fulfil their aspirations with regard to the economic supply of energy and to serve the
316
environmental cause. Some decisions will need to be made relatively soon, and I hope that I shall be able to mention them.
The White Paper confirmed that the United Kingdom would see a marked reduction in carbon emissions by 2050. No one could argue against that; planetary survival may make it essential. However, that view has led to the widespread suspicion that coal combustion and coal-mining will have to end in these islands. That would be unwise and unnecessary. Technological advance has made that clear. Coal can be burnt cleanly.
There are two current approaches that should be pursued. Existing power stations could be retro-fitted with the relevant equipment. High-temperature, super-critical boilers can be used, offering thermal efficiencies at least 20 per cent above those currently achieved. A more modern plant with such equipment could save considerable emissions of carbon and save a good many hundreds of thousands of tonnes for emissions trading.
The other approach is, perhaps, the more significant—modern coal gasification. It would certainly comply with the Kyoto aims, and it would produce hydrogen, which will be an important fuel source, and it could capture the carbon emission. If CO2 storage could proceed rapidly, such developments would be extremely attractive. The White Paper says that the future of coal-fired electricity generation depends on clean coal technology. Clean coal technology now allows that condition to be met.
In recent weeks, the United States Government, despite all their other interests and concerns, have provided 2 billion dollars for such a plant. There is another plant in Florida, run, I think, by Texaco. There is a demonstration plant in the Netherlands. We could go ahead rapidly here. I hesitate to give the name of the place because my pronunciation of Welsh names is not particularly good. It has an indecipherable name, and I am not insulting anyone present by saying that except my noble friend. I shall not try to say the name. It is near Seven Sisters, and it would burn anthracite and petrocoke that had already been cleaned. That plant could serve the Principality well.
There is a very relevant project in Yorkshire that could proceed. The noble Lord, Lord Ezra, will recall Hatfield colliery. He will have visited it during his long tenure of the chairmanship of the Coal Board. Hatfield colliery can now expect a substantial future because, beside it, there will be—there could be—two such plants. The first already has full planning permission, and the second has outline permission. Those two plants could go ahead without delay, and they would make a substantial contribution to our energy requirements. They would capture the CO2. They would produce hydrogen, and the CO2 could be stored readily, as the plants are not that far from the North Sea.
I note that Her Majesty's Government have some anxiety about the legal position with regard to carbon storage. It does not seem to worry the Norwegians, who already do it. In any case, I do not believe that

317
since it is being stored sub-sea, there would be any international objection to that sensible and profoundly desirable development.
Coal has been mined in South Yorkshire for many centuries. The first recorded evidence of mining was in the year 1296 in what was at that time the parish of Wath-upon-Dearne. There are very few collieries in the county now but large numbers have existed. Indeed, there were 12 collieries in my constituency when I was elected to the Commons in 1970. There were another 25 within a three mile radius of the constituency boundary—I believe, just one is left now.
Therefore, very few people work in the industry today. However, there is an almost tribal interest in it because it was a dominant part of our economy for many generations. There is an increasing awareness that although the pits in our area have largely gone, coke still has a considerable future. The same argument applies to coal-mine methane. At the weekend, there was an interesting television programme which attracted considerable interest in my region.
Methane is a noxious gas. Over the years it must have killed thousands of people—or, perhaps, scores of thousands of people—in the mining industry. So those who have any interest in mining feel very resentful that still it is allowed to enter the atmosphere when it could be sensibly transformed into electricity—sites are largely quite close to the national grid. It could therefore make a good contribution.
There is an overwhelming anxiety about gases like carbon dioxide, but methane is 22 times more noxious than the normal greenhouse gases that we tend to be excited about. The Germans, perhaps more thriftily, take a much more advanced view.
A number of us—the noble Lords, Lord Ezra and Lord Oxburgh and my noble friends Lord Dormand and Lord Jenkins—have met Ministers a number of times during the past two years. We have had a courteous and interested reception, but action is still not taken. Those of us who live in the coal fields object to the poison from beneath our feet poisoning people some distance away. It is unnecessary; it could be turned to very useful purpose.
There is a school of thought that coal mining should cease. But that is a foolish proposition, partly because if it ceased in Britain, that reduction would have very little effect on the total amount of mining on this planet. India, China and the United States would continue to mine vast quantities of coal and the reduction of our contribution would scarcely be noticed in a planetary sense.
However, if mining did cease, the mining engineering industry would not have a home base. Given that we have invested a lot of money in clean coal technology, that would be throwing away the investment we have made. It would also be foolish for another reason. In the 13 collieries currently operated by UK Coal, there were no recorded major or significant accidents in o seven of those collieries in February. The total rate for injury accidents in the mining industry in February was 2.5 per 100,000 man
318
shifts. That is a situation which would not have been credible 50 years ago when there was a considerable toll of life and limb in the industry.
It is not only safety that has been served, productivity has soared. Of the 16 coal-faces operated by UK Coal in February, seven produced over 5,000 tonnes a day. Two faces—Kellingley and Howarth—produced over 7,000 tonnes a day, and February was not the best of the past 12 months.
At the same time, development work has proceeded. At seven of the collieries in UK Coal, which is the majority of our collieries in Britain, the rate of advance in development work exceeded the target by over 50 per cent. Those achievements are not entirely unexpected. The noble Lord, Lord Ezra, and our late and lamented colleague, Lord Haslam, were well aware, during their chairmanships of the industry, that productivity was gradually, but definitely and remorselessly, extending. We do not have the thin seams that my noble friend Lord Lofthouse would work in when he was a young man.
But the Government have been wrong and they have been wrong before. I shall explain another reason why I think that error should be accepted as a possibility. When the industry was privatised, the government of the day produced a prospectus which listed the coal reserves for each colliery. Of the collieries now in the ownership of UK Coal, the prospectus listed coal reserves of 26.1 million tonnes. Since 1994, a great deal of mining has gone on and those collieries may already have produced 26.1 million tonnes of coal, but the reserves today at those collieries stand at 63 million tonnes. That needs some explanation, and the explanation is quite simple.
In the 1980s I had an opportunity to visit a huge mining engineering exhibition held at the National Exhibition Centre in Birmingham. I attended a lunch there, which was addressed by Mr McGregor. In his speech, Mr McGregor made a very important announcement, saying that there were no coal reserves in the United Kingdom unless they could be profitably mined immediately. Some people clapped and gave him a standing ovation. I remained seated because I regarded that view as silly then and idiotic today. It is an idiotic view because at the time when Mr McGregor spoke, the industry was still working thin seams and we had not yet seen the great technological advances that have now been made. The cost of producing coal then stood at around 1.45p per gigajoule. We are now producing coal in the United Kingdom for 1.05p per gigajoule, which offers a very considerable bargain to industry and domestic consumers if we link that high productivity and use those reserves in a clean way—and now we can.
At the same time, in the White Paper the Government recognise clearly that CHP has a role to play; it should have a role. The Government want to see 10,000 CHP plants in operation, but the present target is only 5,000. I accept that many of them are not using coal, but if coal is mined cleanly and the cost remains sensible, coal could increase its share. One hopes that the Government's intention to secure a national system of 10,000 CHP plants is realised.
But the Government flirts with renewables. The recently published Select Committee report stated that the Government have spent £20,000 in support of clean coal technology, but £20 million on renewables. Some of those renewable sources would be ridiculously expensive. Some of them are not entirely acceptable. I worry about wind power. If we have to rely to any great extent on wind power, we shall need to retain back-up energy supplies for those days when the wind does not blow strongly and the windmill sails do not turn, which would be extremely costly.
When we were discussing the Utilities Bill a day or two ago, my noble friend may recall that I expressed a particular point. In the coal-fields, we knew that the government of the day—not this Government—tried to force open-cast mining on to communities that did not want it. They did not want the noise, the disturbance and the general upheaval often associated with that form of mining. The local authorities did not want it because they had been elected by the communities that were resisting it. But those local authorities knew that if an application was rejected and the applicant appealed, the government would grant the appeal and it would cost the local authority for no good purpose. A few days ago I demanded—or courteously requested, I hope—that the Government should give an assurance that there would be no arm-twisting to force communities desperate to protect their landscape and environment to accept windmills; in effect, having them thrust on them. I made that point especially as wind power is an expensive option, given the requirement for back-up.
Other schemes have been considered, which also may not be terribly attractive. If coal were to be burnt dirtily and there were no alternatives, as a green supporter for many years, I would accept that wind power is necessary. But it is not necessary for us to take that route.
I turn to the argument about nuclear power. I do not suggest that it should never he operated. My fear is that it should never be allowed to fall into the hands of tyrants, of whom we still have quite a few about. I also recall visiting Chernobyl. I stood and looked at that monument of horror, and of courage, thinking of the people who went in after the explosion. They knew that they would die as a consequence. I travelled there and witnessed that horror. I then had to travel out through the deathlands surrounding it for a considerable distance. After that, I recognised the fact that, until we can solve the problem of storing nuclear waste, we cannot be certain about the technology—even though we know that the plants operating today are as safe as they can be.
I take the view that CHP is important and that the Government are to be commended for their commitment to it. But I also take the view—as I hope will the House—that we should get on with developing clean coal technology and modern gasification to guarantee a supply of energy which can be burnt cleanly.
I trust that I have not exceeded my time. The list of speakers refers to 12 minutes, but a correct mathematical calculation suggests that 15 minutes is not unreasonable.
8.55 p.m.
Lord Lofthouse of Pontefract: My Lords, I thank my noble friend Lord Hardy for introducing the debate. As I have sat here over the past 10 or 15 minutes, I have had a feeling of pleasurable nostalgia. For many years my noble friend and I sat together during similar debates in another place when we were lighting to maintain a reasonably sized coal industry. Unfortunately we were not very successful.
Before I come to the main contents of my speech, with the permission of the House I shall take the opportunity to pay tribute to my noble friend Lord Mason. On 14th April, my noble friend—a lad from the pits—will have completed 50 years' service in the House of Commons and the House of Lords.
I recall a time in 1968 when my noble friend Lord Mason was the Minister of Power. It is appropriate to mention this because in my speech I shall refer to the Drax power station and I know that my noble friend's influence at that time was instrumental in establishing Drax as a coal-fired power station. The miners were indebted to him then and they have been indebted to him ever since. I am certain that no other miner has represented his area—in my noble friend's case, the Barnsley coal field—in Parliament for 50 years. As a former miner myself, I have great pleasure in paying tribute to him.
Against the background of the energy White Paper that most clearly placed the environment at the heart of this country's energy policy, I wish to draw attention to one aspect of the electricity market which is, perversely, benefiting most those who pollute the atmosphere and penalising those who have invested to reduce harmful emissions.
Coal-fired generation currently contributes 32 per cent of the country's electricity supply, which uses some 51 million tonnes of coal a year. Of that, last year around 60 per cent was imported with the remainder, some 19 million tonnes, coming from British pits. A large proportion of this—some 7.3 million tonnes—was burnt at the Drax power station, the largest coal-fired plant in western Europe. I regret that the trend over the past few years has been one of increasing imports of coal against falling demand for British coal.
Aside from the issue of price, which I do not want to go into this evening, the other reason for the increasing switch from UK sources to abroad is the relatively high sulphur content of most British coal. On average, British coal has a higher sulphur content than imported coal; that has a sulphur content of 1 per cent or less, whereas currently available coal from the UK averages a sulphur content of between 1.8 and 1.9 per cent.
Of course, through burning lower sulphur imported coal, power stations are able to remain within their emission limits under the integrated pollution control regime, as in Part 1 of the Environmental Protection

321
Act 1990, whereas burning British coal may cause them to breach these limits. This also avoids coal-fired stations having to invest the large sums required to fit flue gas desulphurisation—known as FGD—plant.
Meanwhile, the two stations that have invested in FGD are well equipped to burn British coal through mitigating the SO2 emissions by some 90 per cent. The downside is that Drax has not only spent £680 million in fitting FGD plant, it has to meet the running costs of about £30 million a year. Your Lordships will recognise that this is obviously a major competitive disadvantage compared with all the other plants that have no abatement equipment and therefore do not need to meet these extra costs.
The perverse result of this is that production of coal burn is shifting from clean plants to dirtier ones. For example, the amount of coal burned at Drax has fallen from around 11 million tonnes per year in 1996 to some 7.3 million tonnes for 2002. Your Lordships will, I am sure, recognise that not only is more pollution being emitted into the atmosphere because of the increasing coal burn at unabated plant, but there is a real disincentive for the use of British coal.
Current market conditions, in particular the low market price for wholesale electricity, and the lack of more stringent emissions regulations, act as a distinct disincentive for other power plants to invest in expensive clean-up equipment such as FGD plant.
Giving the use of unabated plant a significant commercial advantage surely cannot be the intention of the Government's energy policy when so much importance has been attached to reducing harmful emissions. It seems somewhat illogical that plant with FGD is not used to its full extent, so ensuring the lowest possible emissions per gigawatt of power produced before output from unabated plants. Instead, I regret the reverse is happening, with load factors shifting from abated plant to unabated plant. It appears to me that the problem is that the current merit order for the running of power stations takes no account of environmental factors, and optimum efficiency is not being obtained. Unfortunately, and somewhat surprisingly, this issue did not even merit a mention in the White Paper.
I note that Ministers acknowledge in the White Paper that they should not seek to interfere with the market to obtain their objectives. Can it then be assumed that policy instruments such as the revised large combustion plant directive and other European directives, which complement well the White Paper's environmental aspirations, will be stringently and robustly applied with a view to achieving a running order that prioritises the utilisation of the cleanest and most efficient plant?
In this context, an area of concern is that the revised large combustion plant directive allows plant to opt out in exchange for a limit, in terms of operational hours, on their output. Such a choice would appear to be totally contrary to the Government's stated environmental objectives.
322
I cannot help but think that the opt-out regime, allowing plant 20,000 operational hours over eight years, is unnecessarily lenient and will have a significant negative environmental impact unless total emissions from those plants choosing to opt-out are restricted through a more stringent application of UK environmental regulations. I suggest to my noble friend the Minister that the effect of tougher environmental regulations should be a merit order of plant utilisation that means that the cleanest and most efficient plants are used first and used to maximum capacity. It is only through allowing such a running order that the market will signal and incentivise investment in clean coal technology.
Surely, it will be in the commercial interests of generators to invest in FGD plant with the result of considerable reductions in harmful emissions, a level playing field for producers and a greater chance for coal from UK pits to compete. To do nothing is to accept that SO2 emissions are higher than they need be, which is hardly the message that the Government want to send out.
In conclusion, one of the key objectives of the Government's energy policy, as outlined in the White Paper and as stated by the Minister in his reply to the recent debate on fuel supply, is security of supply. It will not be too many years before coal provides the largest indigenous source of primary energy material in the UK. To damage that supply in the short term by discouraging generators from burning British coal is not only short-sighted but reckless, if I dare use that word.
The International Energy Agency forecasts that some 38 per cent of the world's electricity will be generated from coal by 2020. As the White Paper acknowledges, here in the UK more efficient and environmentally friendly cleaner coal technologies have a major role to play in making the continued burning of coal acceptable to people and governments as they pursue policies in support of sustainable development. It is essential to ensure that coal-fired generation continues its important role in the country's energy mix. The onus is on the industry to continue to make it more environmentally friendly through investment in abatement plant as well as in other clean coal technologies.
I strongly suggest to my noble friend the Minister that the onus on the Government is not to penalise those who invest in abatement plant but to introduce new measures that will put the environment first and to continue to encourage research into clean coal technology.
9.9 p.m.
Lord Ezra: My Lords, I should like to join in the appreciation expressed by the noble Lord, Lord Lofthouse of Pontefract, to the noble Lord, Lord Hardy of Wath, for introducing this debate.
The noble Lord, Lord Lofthouse, said that this was in some ways a nostalgic occasion. For those associated with the coal industry, any occasion for speaking about coal, with its great and turbulent

323
history, quickly becomes nostalgic. We have heard some memories from the two eminent speakers who came before me, about their experience of that industry.
I concur with the congratulatory remarks of the noble Lord, Lord Lofthouse, about the noble Lord, Lord Mason of Barnsley. I had the pleasure of working very closely with the noble Lord, Lord Mason, when he was Secretary of State for Energy. He undoubtedly made a big contribution to the coal industry at that time.
The White Paper, to which reference has properly been made, considers, among many other issues, the future of coal. At present, coal provides about a third of the fuel going into power stations. I can well remember when coal provided the whole of the energy supply to power stations, but now it is down to a third. But, on present trends, the prospect is that by the year 2020 it will virtually have been eliminated from power stations. At that stage, the supply of gas to power stations could amount to something like 90 per cent. That would be a serious development, bearing in mind that at that stage over 70 per cent of the gas would then have to be imported from distant and uncertain places.
So one way of mitigating this situation would be by making more progress than hitherto in the application of clean coal technologies. The White Paper makes it clear that there can only be a real future for coal if these technologies are developed. Now is the time to move ahead rapidly in that direction. Indeed, as the noble Lord, Lord Hardy, pointed out, there are already proven technologies. This is not a question of research and development; it is a question of applying technologies that already exist. In the shorter term, as he pointed out, coal generating plant could achieve CO2 emission reductions of 20 to 25 per cent by retrofitting advanced super-critical boiler and turbine systems, which are readily available.
Greater reductions could be achieved by the construction of integrated gasification combined cycle powers plants (IGCCs). As the noble Lord, Lord Hardy, pointed out, there are two plants awaiting the go-ahead. One is in Onllwyn, in South Wales, which he forbore from pronouncing—I hope that I have got the pronunciation roughly right, as I quite frequently visited the Principality in my time in the coal industry; the other is at Hatfield, near Doncaster.
The ultimate objective must be to link IGCC systems with carbon sequestration and storage, and using the carbon extracted for enhanced oil recovery—EOR, as it is now becoming known. The White Paper makes it clear that EOR could yield an additional 200 million tonnes or 1.5 billion barrels of oil from the North Sea over 20 years. At present, the production rate is about 130 million tonnes and diminishing, so this could be quite a big contribution to extending the oil reserves being extracted from the North Sea. The trouble is that, because of depleting oil reserves, the opportunity for enhanced oil recovery only exists for the short term. According to the White Paper, CO2 injection would need to start by the period 2006–2008.
324
If that is so, work has to be done urgently to construct a plant and get it into operation. We cannot waste time. To be fair to the Government, that urgency is recognised in the White Paper. A study has already started to look into the feasibility of proceeding with an EOR plant. That is to report by about August, with proposals as to how this could be proceeded with.
As the noble Lord, Lord Hardy, pointed out, in the United States they have moved ahead much faster than we have in this area. Recently, a most ambitious project was launched aiming at zero emissions from coal-fired plant. Zero emissions means that coal could be placed on the same basis as renewables. You cannot get below zero. It could be something quite remarkable. It is known as the FutureGen project. It would be of a 275 megawatt capacity (equivalent to a medium-sized power station) and cost 1 billion dollars (or £650 million), 80 per cent funded—I emphasise that—by the US Government. In the words of the American Secretary of Energy, that would,
"turn coal from an environmentally challenging energy service into an environmentally benign one".
Is the UK participating in that project, either at governmental or commercial level?
In view of the developing prospect of energy import dependence for the first time in our history—we have never before been as likely to have to depend so much on imports as we will in the next 20 years—and in view of the substantial reserves of coal and of the technologies now available for minimising the environmental impact of coal use, there is a strong case for accelerating support for clean coal technology and ensuring that, at long last, one or more plants come on stream as soon as possible.
Among others, I have for many years been urging for a plant to come into operation in this country. We have been told that we are doing a great deal to export technological know-how in the combustion of coal and particularly of clean coal. However, unless we have a plant to demonstrate, the effect of seeking to export that technology will be minimised and people will go to the United States, to the Netherlands and to other countries where there are plants in operation.
I have heard rumours that the Government have in recent months been diverting resources away from work on clean coal technologies to renewables and other activities. I hope that the Minister will deny that and assure the House that more rather than fewer resources will be earmarked for clean coal technology and development.
As I pointed out, the White Paper makes it clear that we have to move fast to take advantage of enhanced oil recovery in the North Sea. That can be done through the injection of CO2 recovered from clean coal technologies. I conclude by asking the Minister whether he can confirm that it is the Government's firm objective to achieve those developments and to ensure that our abundant coal reserves can be exploited in the years ahead using the new technologies, thus reducing excessive dependence on energy imports.
9.18 p.m.
Baroness Miller of Hendon: My Lords, I, too, thank the noble Lord, Lord Hardy of Wath, for introducing this important and interesting debate. I was also very pleased to hear the tribute from the noble Lord, Lord Lofthouse, to the noble Lord, Lord Mason, for his great contribution to the coal-mining industry.
Electricity is a most important component of our domestic and industrial life. In the past 50 years, the whole energy mix of this country has changed drastically. In 1950, to generate electricity we used 10.4 per cent crude oil and 89.5 per cent coal. By 2000, the figures changed dramatically: coal had sunk to just 32 per cent and gas had overtaken it as a primary source of power, comprising 43 per cent of the fuel employed in electricity generation. Of course the so-called "dash for gas" was understandable in the light of the vast reserves that became available to us from the North Sea and the fact that, if one has to burn a fossil fuel, gas is cleaner and safer than coal or oil. However, our dwindling North Sea supplies mean that we shall shortly become large-scale importers and that our reserves will run out within a decade. We will then become dependent on imports from places such as Algeria, the Sahara and Russia.
The adverse effect of that large-scale importation of gas on our balance of payments illustrates one reason why the noble Lord, Lord Hardy of Wath, has introduced this debate. We cannot put ourselves in a situation where we are too heavily dependent on any one source of generating electricity.
I quote from the Coal Authority's recent response to the consultation on energy supply:
"Diversity is not an end in itself, but just one of the possible means of enhancing security of supply".
As other noble Lords have said, the Government have placed a great deal of emphasis on renewable sources, mostly wind power. But as I pointed out to your Lordships during the debate on the energy White Paper, to meet the Government's target for renewables by 2020, we would have to build a further 19,930 wind farms or, to put it another way, three a day. That is a most difficult target. But whether it is a target or an aspiration, a reliance on a projected 20 per cent supply of electricity from renewable sources by 2020 is something that we absolutely cannot rely on in our current projections.
Before I leave the subject of renewables I touch on one coal-based renewable source, coal-bed methane, in itself a potential pollutant unless properly treated, but the exploitation of which would add to energy supplies without adding direct costs to the consumer. The Coal Authority has had no approach from the Government on the prospects of using that resource. Perhaps the Minister will tell us when he replies to the debate what financial means and regulatory support are being contemplated for coal-bed methane as part of the drive to exploit renewable sources of power.
The simple fact is that, even if the Government were somehow able to reach their target of 10 per cent of our electricity supplies coming from renewable sources by 2010, that would not keep pace with the 1.5 per cent
326
per annum growth in electricity demand projected by the National Grid, let alone replace diminishing coal-fired capacity.
While mentioning diminishing capacity—which has to be replaced from somewhere—we cannot overlook the fact that our declining nuclear capacity is programmed to fall to almost nothing in the next 15 years.
Irrespective of the generation power source, we could still have temporary shortages of electricity. That would happen if we reduced our own generating capacity or allowed it to be degraded. It will especially happen if we fail to maintain an adequate margin of spare capacity because of the Government's dithering over the establishment of new power stations. Then we might have to rely on short-term imports of electricity. From where would we import it? We might import it from France, but I am not sure that we would want that.
Diverse but viable sources of fuel are essential. That brings me to the greater use of coal. As Aneurin Bevan pointed out in May 1945,
"this island is made mainly of coal".
Because of the economics of coal-mining, today we import more coal than we produce. In 2001 we produced 32.1 million tonnes but imported 35.5 million tonnes. Paradoxically, it is cheaper to import coal from South Africa, Australia, Colombia or America than to dig it up from under our feet. Although coal, rightly, has a reputation as a dirty, highly polluting fuel, the abundant reserves from all around the world make the supply secure. It is safe and stable to transport, store and use. But, above all, using modern technologies coal can be burnt cleanly. That is the nub of this present important debate.
If we are to have a secure, multi-sourced supply of electricity, we cannot, and must not, ignore coal as a major part of it. But if we are to make the fullest possible use of coal as part of our electricity generation fuel mix, our obligation towards the environment demands that we should use clean coal rather than the material which produces smog, fog, acid rain and greenhouse gases.
Although the United Kingdom has a leading place in the three forms of clean coal technology, its share of the world market in that technology fell by 1½ per cent in 1999. That is because we have not made adequate demonstrable use of it domestically. Large-scale demonstration plants have been opened in Spain and Holland, as the noble Lord, Lord Hardy, mentioned. I fear that unless something is done with government support and co-operation, the fruits of the exploitation of this technology will follow the course of many other British engineering feats and will simply disappear overseas.
According to the brief that I received from AES Drax, the Government are not supporting this new technology or encouraging its use for our domestic electrical supply. Allowing for the possibility that something in the brief may have been a bit of lobbying, it makes a number of claims: that burning a mixture of petroleum coke and coal produces more heat with less

327
fuel; that emissions of oxides of nitrogen, effluent, dust and metals will reduce; and, despite that, it says that the current operation of the energy market and environmental regulations mean that the cleanest coal-fired generation plants are at a disadvantage with coal plants offering no abatement of harmful emissions.
I would like to hear from the Minister in his reply to this debate about what steps the Government are taking to encourage, by the sensible application of regulations, the use of this technology for the benefit of our own electrical supply and of our technical export industry.
The Coal Authority, in its submission in reply to the consultation, said that,
"the single most important action the Government can take to provide the necessary investment climate would be to rationalise the current confusing mix of carbon control measures and organisations, and bring certainty to the issue of carbon taxes".
It went on to say that,
"the current system lacks certainty, transparency, and unfairly burdens the generation and use of electricity compared with other sectors".
I hope that the Government will take the opportunity afforded by today's important debate to respond to the Coal Authority's specific points.
There is no obvious replacement of the 24 gigawatts of coal-fired generation other than gas but if, as is currently planned, only 12 gigawatts of capacity is fitted with flue gas desulphurisation, the present coal-fired capacity will be halved by 2020. In fact, retrofitting of supercritical boilers could be commenced almost immediately, subject to sufficient regularity clarity, as both the Coal Authority and AES Drax request. That was also mentioned by the noble Lord, Lord Ezra. Such regulation would need to be framed so as to ensure a satisfactory payback over the expected lifetime of each project.
February's White Paper set out a number of government measures to promote cleaner coal technology. Those will of course be very welcome so long as the Government translate their fine words into positive action. We will all hope that the Minister's response to this debate will give details of the practical steps that they are now taking to achieve that end. The Secretary of State told the other place in its debate on the White Paper that,
"we are … on course to meet not just",
our Kyoto targets,
"but, we believe, the more challenging … target … of a 20 per cent. reduction by 2010".—[Official Report, Commons, 24/2/03; col. 31.]
However, figures from government sources admit that UK emissions of CO2 are now higher than in 1997, and Friends of the Earth estimates that in 2010 emissions will be just 3.5 per cent below 1990 levels.
I quote the words of my colleague, the honourable Member for Reigate, who said,
"the Government's current policy framework is presiding over the third annual rise in CO2 emissions, and an increase in generation from coal fired plants NOT fitted with Clean Coal Technology … and the confident expectation is that they will miss their target for renewable electricity generation by 2010".
328
Dithering over the future of clean coal technology will cost us dear both as regards our environmental commitments and the security and continuity of our supply of electricity.
On the urgent issue of supporting and encouraging by every means possible the development and use of clean-coal technology as a major part of our electricity fuel mix, I cannot do better than to quote the shadow Secretary of State for Trade and Industry, who said:
"Ducking hard decisions today risks the lights going out tomorrow".
9.29 p.m.
Lord McIntosh of Haringey: My Lords, I join everyone who has congratulated my noble friend Lord Hardy on introducing this debate and, indeed, I congratulate all speakers on the quality of their contributions. I also join my noble friend Lord Lofthouse and others in expressing my regard for the fact that my noble friend Lord Mason has spent 50 years in Parliament. I quite understand why he did not stay for the debate. He did, after all, participate in the two-and-a-half hour debate which finished just before this one. He was able to speak about the joys of fly-fishing, which is perhaps more to his taste now than the coal industry. But we should have liked to hear from him on this subject as well.
That is particularly appropriate in the context of the energy White Paper. As my noble friend Lord Hardy said, the White Paper presents a long view because the whole matter of environmental pollution is a long-view issue. It is now virtually certain that global warming is caused by our increasing use of fossil fuels. The Royal Commission on Environmental Pollution recommended—it is reflected in the White Paper—that we should reduce the emission of gases by some 60 per cent by 2050. We have also committed to the Kyoto target of a reduction in gas levels of 12 per cent by 2010. We have already made some progress towards that due to the switch from coal-fired to gas-fired generation. I shall not go into the merits or otherwise of the "dash for gas". I am less sympathetic to it than the noble Baroness, Lady Miller. Nevertheless, that must be the reason we have achieved some progress here, but it means that it will be very difficult to continue to do so after 2012. Both for environmental and business reasons, we simply cannot sit back and let global warming happen.
Of course, coal has many benefits as a fuel for power generation. As a number of noble Lords said, that is mainly because of the security of supply that it provides. But it is also because it is easily transported and stored and because we still have large indigenous reserves, although I believe that geological conditions limit the extent to which they can be exploited. Coal technology is a mature technology. We know all about it.
However, coal has major disadvantages in that it emits gases which, if not controlled, are damaging to the environment. We have measures in place to deal with the acid rain gases such as sulphur dioxide and nitrogen oxides. My noble friend Lord Lofthouse, in particular, referred to the use of FGD to eliminate

329
sulphur dioxide. I believe that that goes some way to reducing the difference in cleanliness between our domestic coal and imported coal. He is right that imported coal has lower levels of sulphur.
However, the real problem now comes surely not so much from acid rain gases but from carbon dioxide. It is still the case that coal-powered plants emit twice as much carbon as natural gas-fired power plants. If we are to continue with coal, we must use it more cleanly than we do at present.
There are restraints which are beyond our control. Reference has been made to the Large Combustion Plant Directive, which will mean increasingly demanding emission standards. If any plant does not meet them, they will have to be phased out by 2015. The emission trading scheme is not particularly helpful. That comes into force in 2005, but it does not really favour coal as a source of power.
Therefore, how will coal respond to those challenges? We have already supported the development of cleaner coal technologies for many years. We have not done so to the extent of £20,000, as my noble friend Lord Hardy suggested, but a programme of around £8.4 million is in place for 40 research and developments projects and a similar amount is available for the transfer of cleaner coal technology to countries such as China and India and for the promotion of British exports. That programme is focused on technologies that use coal more efficiently. It has been a finite programme but we shall review it and update it this year. Although it is a finite programme there is no prospect that it will come to an end.
Not much was made of the mining equipment side in debate. I agree with my noble friend Lord Hardy that our mining equipment industry depends on us continuing to have a home base. We have been active in supporting the mining equipment industry. With the Association of British Mining Equipment Companies we have been supporting an extensive programme of overseas activities; within Trade Partners UK we have been developing a cleaner coal export strategy; and we have been helping them to promote coherent export strategies across the coal sector.
We have also been using the technology transfer and exports programme to promote UK power generation technologies such as cleaner, more efficient boilers to reduce carbon emissions. We are also considering some support for another project that has been referred to, retrofitting a supercritical boiler to an existing coal-fired plant that could act as a showcase for promoting the exports of that technology, particularly to countries such as India and China.
We are invited by the words of the Unstarred Question to look into the future of the cleaner use of coal, in particular by capturing and storing the carbon away from the atmosphere. I was challenged directly by the noble Lord, Lord Ezra, about the US FutureGen project. Of course, they are starting from a
330
different base. They have far more of a coal industry than we do; 55 per cent of their power generation is from coal. Therefore, the investment base for them is of a different order compared with ours. However, we see advantages in collaboration, and although we have made no decisions about joining with them, we are actively exploring that.
There are two main carbon capture technologies that can improve the carbon effectiveness of coal that already exist for its transportation and injection deep beneath the ground. The first one is using supercritical and ultra-supercritical pulverised fuel boiler technologies. Those technologies can offer not the zero emissions that FutureGen is talking about, but 15 to 20 per cent CO2 savings. They can be retrofitted to existing plant. We are considering the possibility of support for retrofitting to which I referred.
The second capture technology is gasification and the combined cycle turbine—integrated coal gasification combined cycle, or IGCC, to which reference has been made and which can produce at least 15 to 20 per cent and possibly as much as 80 per cent savings with carbon capture. Reference has been made already to the two IGCC plants that are in prospect: the Valley's energy project in Onllwyn and the Hatfield project near Doncaster. Both my noble friend Lord Hardy and the noble Lord, Lord Ezra, referred to those and we are supportive of them and hope that they succeed.
Less has been said this evening about the storage of CO2 produced from coal plant which can be applied to either of those main technologies. That involves transporting it either to a depleted oil or gas well or to aquifers beneath the ground. Certainly, the combination of these technologies provides the opportunity to overcome the disadvantages coal currently suffers. So we are looking at the feasibility of securing significant CO2 savings, both from carbon capture and from storage.
Locking carbon away deep underground provides the prospect of material savings. It could be used, as the noble Lord, Lord Ezra, said, to enhance the recovery of oil. There is technical evidence which indicates that it could be used to flush out some of the oil which otherwise would not be extractable. As the noble Lord reminded us, the White Paper said that we should undertake an implementation study in order to see what can be done to get a project off the ground as quickly as possible because we recognise that we have a small window of opportunity before the fields start to be decommissioned. I cannot confirm to him when the report will be available. He is right to remind us and to jog our elbow on this subject. If I learn any more about it I shall write to him.
Before I go on, I should say a word about the abatement plant issue, which was raised by my noble friend Lord Lofthouse and by the noble Baroness, Lady Miller. It is encouraging that two major coal-fired power plants can survive in the current market

331
despite the effectiveness of the new electricity trading arrangements for reducing produce prices. That they are planning to fit FCD suggests that there is a rational business decision to be made and that they could survive with the production of cleaner power. I say to that, "All power to their elbow". It should certainly be encouraged.
However, there are problems with the technologies that I have been describing. I must be honest about that. There is the doubt whether the storing of carbon under the seabed in the North Sea is legal under our international obligations. The cost of capturing and storing carbon is prohibitive at the moment. It could be between £125 to £340 per tonne of carbon abated. It would become less if EOR were to be adopted. Even so, there are still problems about being sure that the carbon will not leak back into the sea and the atmosphere. We must have a regulatory framework
332
for that and for the storage and transportation of the carbon, and we would need to have co-operation with the other countries which share the North Sea with us.
I apologise for having been technical to some extent, but this is a technical subject and it deserves a serious answer. In the light of the time, I shall resist the temptation to talk about the other matters that were raised in debate, such as wind farms, nuclear, even combined heat and power, or indeed the more general issues of the survival of the coal industry. This has been a valuable and well-informed debate about a particular subject, which is the development of clean-coal technology. I am grateful to noble Lords who have taken part. I hope that they will feel that the Government are certainly not neglecting this important subject.
House adjourned at sixteen minutes before ten o'clock.

  CAFCASS Corporate Plan
  CAFCASS Corporate Plan
  European Convention on Human Rights, Protocol 7
  European Convention on Human Rights, Protocol 7
  Ram Doctrine
  Ram Doctrine
  HM Prison Brixton
  HM Prison Brixton
  Rehabilitation of Offenders
  Rehabilitation of Offenders
  Immigration Detention Centres: Visiting Hours
  Immigration Detention Centres: Visiting Hours
  Registration as a British Citizen
  Registration as a British Citizen
  Military Service: Compensation Arrangements
  Military Service: Compensation Arrangements
  Iraqi Prisoners
  Iraqi Prisoners
  BSE: Over Thirty Month Scheme
  BSE: Over Thirty Month Scheme
  Tobacco Advertising
  Tobacco Advertising
  Railways: Rimini System
  Railways: Rimini System
  Gatwick to London Rail Tickets
  Gatwick to London Rail Tickets