Sitting of 10 December 2003

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

    Police
    Mrs. Betty Williams: If he will make a statement on the change in the number of police officers in Wales since 1997. [142069]
    The Parliamentary Under-Secretary of State for Wales(Mr. Don Touhig): On 31 August, there were 7,354 police officers in Wales, an increase of more than 12 per cent. since 1997. In addition, Welsh police forces have received funding for 113 community support officers.
    Mrs. Williams: I thank my hon. Friend for that encouraging answer, and should like to declare that my eldest son is now part of those statistics.
    Does my hon. Friend agree that such an increase in the number of police officers will assist individuals such as my constituent, Mr. Noel Kennerley of Dwygyfylchi, in tackling his neighbour from hell, Richard Lloyd, as the antisocial behaviour route took such a long time? Will my hon. Friend join me in congratulating PC Mike Clements for his co-operation in dealing with that case?
    Mr. Touhig: I am aware of the case of Mr. Kennerley and I pay tribute to him for his bravery and for his commitment to tackling the scourge of antisocial behaviour. I also pay tribute to the police officer involved.
    The Government are determined to introduce measures that will overcome the problems of antisocial behaviour faced by many of our communities. Increased funding for the police service is part of that, and I am delighted that we have put so much extra funding into police numbers and that we have a record number of officers on the beat in Wales.
    Mr. Nigel Evans: Morriston hospital in Swansea has already made it clear that some of the extra police officers will be used to police its accident and emergency unit during Christmas to deal with any drunks who turn up. Will the Minister make it absolutely clear that if anybody—especially someone
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    who is drunk—turns up at an accident and emergency unit over Christmas and attacks a nurse or a doctor, they will receive a hangover that lasts well into 2004?
    Mr. Touhig: I endorse the hon. Gentleman's point, especially given the efforts to provide care and attention in our hospitals, particularly in accident and emergency departments. I have witnessed situations in London where staff have had to take considerable abuse from people who were much the worse for drink, so I endorse his remarks. If anybody is involved in an incident that brings harm to doctors or nurses caring for the public, I hope that they are punished with every severity.

    Aerospace Industry
    Mark Tami: What recent discussions he has had with the First Secretary regarding the importance of the aerospace industry to the economy of Wales. [142070]
    The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): Both my right hon. Friend the Secretary of State and I hold regular discussions with colleagues in the Assembly on a range of issues, including the aerospace industry in Wales.
    The Government recognise the value of the aerospace industry to the Welsh economy. With significantly high levels of investment, we are seeing a new age of assertiveness, development and innovation that is increasingly taking the industry to new levels of success.
    Mark Tami: I thank my hon. Friend for that answer. I am sure that he recognises the success and importance of Airbus at Broughton, so will he help to build on that success by using the short delay on the future air tanker, which the Ministry of Defence is expected to announce, further to press the case for the Airbus-AirTanker project that will help to secure many thousands of jobs in Wales?
    Mr. Touhig: I am aware of my hon. friend's strong commitment to Airbus and to the work at Broughton in north-east Wales. My right hon. Friend the Secretary of State and I have already visited that world-class facility several times. I certainly join my hon. Friend in welcoming the strong Airbus bid for the MOD contract to provide air-to-air refuelling aircraft, and I hope that it is successful. It will underpin our commitment to the continuing development of that important manufacturing industry in north-east Wales.
    Mr. Ian Liddell-Grainger: Given the importance of the aerospace industry not only in Wales but throughout the United Kingdom, there is no doubt that it must not go overseas. Airbus Industries has made a long-term commitment in this country, so will the Minister guarantee, on behalf of the British people and especially the Welsh, to press his right hon. Friends the Secretary of State for Defence and the Prime Minister to ensure that no aerospace jobs are moved overseas?
    Mr. Touhig: I do not think that the hon. Gentleman need have any worries about the efforts made by me, my right hon. Friend the Secretary of State or any of my

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    colleagues, as we shall be exerting all the pressure that we possibly can to ensure that the industry in north-east Wales goes from strength to strength. Much public investment has already gone in: £500 million for the Airbus project at Broughton and £77 million for the Red Dragon project at the Defence Aviation Repair Agency in St. Athan. The Government are committed to that development. That important manufacturing base in Wales has a strong future and we want it to succeed.

    Barnett Formula
    David Taylor: What recent discussions he has had with the First Secretary about the impact of the Barnett formula on the economy of Wales. [142071]
    The Secretary of State for Wales (Mr. Peter Hain): Regular ones. The Barnett formula is a means of calculating changes to the Welsh block from its historic base. Welsh gross domestic product per head increased by 15.6 per cent. between 1997 and 2001.
    David Taylor: The Barnett formula has now reached its quarter century, and its eponymous creator has said that it has become terribly unfair. Does the Secretary of State agree that that deeply unsatisfactory way of distributing Government grant should be replaced by a needs-based formula throughout the United Kingdom—[HON. MEMBERS: "Hear, hear."]—as that would be more equitable for the people of the English regions such as my own, the east midlands, as well as for the people and the economy of Wales?
    Mr. Hain: I thought it interesting that my hon. Friend was cheered by the Welsh nationalists—he might want to reflect on his position—but I understand the very fair point that he makes on behalf of his constituency, North-West Leicestershire, and what I want and what the Government are delivering is record investment right across Britain, rising employment and improved public services. He is nodding his head in agreement. Of course he will understand that Wales has much higher deprivation historically and ill-health problems. There were 35 per cent. more incapacity benefit claimants in Wales than in the east midlands, despite the fact that the population of the east midlands is 1 million higher. So those problems have to be tackled, and the Barnett formula was designed to address that.
    Lembit Öpik: Is the Secretary of State aware of a large, possibly Barnett-related deficit in mid-Wales health provision? For some years, the Royal Shrewsbury hospital has generously subsidised its services to Welsh patients. Does he accept that, with the best will in the world, that cannot continue? Is he willing to discuss whether the extra funding needed to remedy the problem should rightly come from the Welsh Assembly's existing budget, or possibly result from an adjustment to the Barnett formula?
    Mr. Hain: The hon. Gentleman will understand that there is record spending on health provision in Wales, including in his constituency—I am grateful to him for nodding his head in agreement—and that the Welsh
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    health budget has nearly doubled. I understand, however, that the subsidy in his constituency in respect of patients who are treated in Shrewsbury is an issue. I will certainly look into that and discuss it with the Secretary of State for Health and the First Minister.
    Mr. Win Griffiths: My right hon. Friend will be well aware that, apart from the national health service providing excellent care for people in Wales, it makes an important contribution, through employment, to the Welsh economy. What consideration has he given to the fact that it has now been established, through the Yvonne Watts case, that there is such a thing as a waiting time that can be regarded as too long? What implications does that have for the health service and the Barnett formula, given the fact that waiting times in Wales are generally longer than in England?
    Mr. Hain: These matters are being addressed. Of course the health budget that comes from applying the Barnett formula and the consequentials that flow across from the Treasury to Wales are now funding health services, reducing waiting times and improving health services in Wales. That should encourage my hon. Friend to say that things are improving under Labour, both here in Westminster and down in Cardiff as well.
    Adam Price: Professor Maclean of Nuffield college has recently estimated that the Welsh Assembly Government would receive £620 million a year extra under the needs-based allocation. Since there is a range of views on this subject, will the Wales Office consider commissioning an independent study, so that we can have an objective assessment of whether Wales would be better off under a needs-based formula or the present arrangements?
    Mr. Hain: We will continue to keep these matters under review. I note that the hon. Gentleman takes a close interest in them, but he will agree, because this is demonstrated by the facts, that wealth per head, spending and employment have been rising in Wales since 1997, and that Wales has been doing much better than most other parts of the United Kingdom and, indeed, most other parts of the world. He will also be aware that, partly because of the higher deprivation and need, total identifiable Government spending in Wales is 13 per cent. above the equivalent UK average and 18 per cent. above the English average. If the nationalists got their way, as he would wish, and Wales broke away from Britain, it would be plunged into poverty. That is the price that nationalism would have to pay.

    Employment
    Julie Morgan: What plans he has to prevent jobs in Wales moving overseas. [142072]
    The Secretary of State for Wales(Mr. Peter Hain): I will continue to fight to ensure that jobs stay in Wales, and not move overseas. Foreign firms are still choosing Wales as an attractive place to do business. Last year, employment in Wales rose by 61,000.
    Julie Morgan: I thank my right hon. Friend for that reply. What would he say to the staff at Tesco house in Maes-y-Coed road in the Cardiff, North constituency, who in July were taken to the city hall and praised by Tesco for their loyalty, and a few weeks later were told that 230 of their jobs were to go to Bangalore?
    Mr. Hain: I would join my hon. Friend in saying that that treatment is unacceptable, and that we continue to fight, as she does, for more call centre and finance centre jobs in Cardiff and right across Wales. The record shows that more and more jobs in this sector are being created. For example, The Number, which is part of the new directory inquiries network, recently opened a call centre in Cardiff creating 467 full-time and 105 part-time jobs in Cardiff. Whatever the plight of her constituents, under this Government, more and more job opportunities are being created, and her constituents will be helped to find other jobs. I agree with her, however, on her criticism of Tesco.
    Mr. Bill Wiggin: Can the Secretary of State confirm whether Hansard was correct when it reported that he thought that the transfer of call centre jobs to India could actually create a big return for the Welsh economy? Alternatively, was the The Western Mail wrong when it said that he would fight for every call centre job in Wales? Surely he did not make both statements.
    Mr. Hain: First, I welcome the hon. Gentleman to the Front Bench. We look forward to his pronouncements. May I mourn the passing of the hon. Member for Ribble Valley (Mr. Evans), who brought a certain chippy style to the Front Bench, which we very much enjoyed? I am sure that his replacement, with his old Etonian gravitas, will provide us with a different dimension, although with his boss, the right hon. Member for Skipton and Ripon (Mr. Curry) sitting next to him, I am not sure who actually speaks for Wales. We might learn that later from the Conservative party. In respect of his question, were he to read further in Hansard, he would find that both the The Western Mail and Hansard were correct, because I said that I wanted
    "to see all jobs preserved"—[Official Report, 4 December 2003; Vol. 415, c. 655.]
    in Wales and that I will fight to continue to do that.
    Mr. Wayne David: My right hon. Friend will have heard the announcement last week of 170 job losses at a garment factory in Aberbargoed in my constituency. I thank him for the support that he has given to those workers in that difficult situation, but will the Government reaffirm their commitment to long-term investment in quality jobs and quality training? That is the only way forward.
    Mr. Hain: I very much agree with my hon. Friend that that is the only way forward. It is the way forward being driven by our Government in Westminster and by the Labour Welsh Assembly Government in Cardiff. I am sure that he will recall many details of coal communities in his and surrounding constituencies that were absolutely devastated under the Conservatives. I find it astonishing that, given our record of investment, to
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    which he referred, the Leader of the Opposition on a visit to Wales last Saturday said that coal communities had
    "revived very considerably under Margaret Thatcher".
    What an extraordinary statement. Coal communities, including in my hon. Friend's constituency, were decimated under Margaret Thatcher. Under Labour, they are being rebuilt, with more jobs, more investment and higher standards of public services.
    Mr. Simon Thomas: The question asked the Secretary of State what plans he had. So far, the only plan that he has brought forward to stop jobs going out of Wales is to put tolls on the M4. Will he now look at one aspect of the Welsh economy—the 700 jobs lost in Welsh agriculture in the past year? To help prevent those jobs from being lost, I suggest a plan to help local authorities to buy local food to keep Welsh farmers in jobs. Will he do that?
    Mr. Hain: I share the hon. Gentleman's desire and interest in seeing that local produce is used by the local public sector, schools and others. Since he raised the issue of the effect on jobs of the situation on the M4, may I explain to him the reality? The truth is that the M4 at the Brynglas tunnel is increasingly choked with traffic, which affects jobs and the economy of south-east Wales. That is why the Assembly would have the option, as I discussed when I was Minister with responsibilities for transport in Wales a few years ago, of building the M4 relief road around Newport to provide an alternative, which could be tolled and built by the private sector as has been achieved around Birmingham. In that way, drivers in Wales, whether lorries or cars, would have a choice: to travel at perhaps 40 mph through the Brynglas tunnel, or to go around the new relief road and pay a toll. In the end, however, that is a matter for the Assembly.

    Higher Education
    Dr. Hywel Francis: What recent discussions he has had with (a) the First Secretary and (b) the Secretary of State for Education and Skills on the future of higher education in Wales. [142073]
    The Secretary of State for Wales (Mr. Peter Hain): Regular ones—we and our officials have worked closely to agree our proposals to transfer to the National Assembly for Wales responsibility for the remaining elements of higher education funding, including responsibility for student support in Wales.
    Dr. Francis: I thank the Secretary of State for that reply. He will be aware of the successful and excellent widening access strategies in Welsh higher education. For example, at the North East Wales institute of higher education, 50 per cent. of the students are over the age of 30. May I invite him to join me on a journey of hope whose destiny is to guarantee sustainable, fair and equitable opportunities for part-time and full-time adult students?
    Mr. Hain: Indeed, we are increasing the grants for part-time and mature students, and this is part of a new package, under this Government, of raising and

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    widening opportunities for students right across the income level. Since he referred to this matter, may I congratulate my hon. Friend on his work prior to becoming a Member of Parliament with the Community university of the valleys that he initiated—am I right in saying—in Banwen in my constituency? That work, together with the wider work that the Government are doing both here in Westminster and in Wales, is giving new hope to part-time students and to students who never thought that they would have a chance to go to university.
    Mr. Bill Wiggin: Does the right hon. Gentleman think that it is fair that the Assembly has suggested that it will pay the top-up fees for Welsh students studying at English universities or should it be using its money to support students at Welsh universities?
    Mr. Hain: The longer that the hon. Gentleman is on the Front Bench—and I hope that it will be the Opposition Front Bench—he will understand that, if the higher education Bill goes through, this matter will be devolved to the National Assembly so that decisions can be made in Wales. I hope that he will speak up for Wales and encourage that devolution.
    Compared to what we are offering to the students and families of Wales, the hon. Gentleman offers a prospectus for higher education funding that would see, on average, the number of students from each constituency in Wales cut by 400. There would be 400 fewer students from each constituency going to universities under the Conservatives when compared to our higher education proposals, which will increase the number of students getting the chance to go to university. In many cases, they will be from constituencies such as mine and they will be the first people to go to university in their families" history.
    Mr. Wiggin: We think that students should go to university based on the size of their brain and not on the depths of their wallet. How many Welsh MPs does the right hon. Gentleman think agree with him that the Government's policy on top-up fees needs to be tweaked, or is this similar to his comments on the European constitution and is just a "tidying-up exercise"?
    Mr. Hain: We are looking in detail at all the representations made to us in terms of the final proposals that come in the Bill. I remind the hon. Gentleman and the House what the choice is. The choice is between a Labour Government, who are increasing opportunities for students in Wales, who are removing the up-front fee and who are also offering more and more students the chance to go to university, and his policy, which will plunge Welsh universities back into the bankruptcy from which we have rescued them and deny thousands of students in Wales the chance of studying at university. That is the choice; we are confident that the people of Wales will back us in the choice that we are making.
    Ian Lucas: To see excellent examples of widening access, may I invite my right hon. Friend and other Members to visit the exhibition in the Upper Waiting Hall that is being held by the North East Wales institute of higher education in Wrexham? All Members will see what can be achieved and how lives can be changed by widening access to higher education. Is he aware, however, of the difficulties that a border university faces in dealing with students from England and Wales? Does he think that the Government's proposals will improve the position or make it more difficult?
    Mr. Hain: May I first acknowledge the excellent job that the North East Wales institute of higher education does with my hon. friend's support as its local Member of Parliament? I have visited that fine institute and hope that everyone will have the chance to see the exhibition. My hon. Friend will also agree that we are putting record investment into universities and creating record opportunities for students. I am sure that the specific issues that he wants to address will be solved by the new proposals that we are bringing forward—with his support, I hope.

    Police Funding
    Mr. Elfyn Llwyd: What discussions he has held with (a) the Secretary of State for the Home Department and (b) the National Assembly for Wales Government on future policing funding. [142074]
    The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): My right hon. Friend the Secretary of State and I have regular discussions with colleagues about matters affecting Wales, including future police funding.
    Mr. Llwyd: I thank the Minister for that very illuminating answer. May I draw his attention to the fact that the district auditor said recently that all police authorities are being—[Interruption.]
    Mr. Speaker: Order. The House is far too noisy. It is unfair to the hon. Gentleman.
    Mr. Llwyd: The district auditor recently reported that central Government are underfunding all police authorities drastically at this time. North Wales police authority is a responsible authority with an excellent work force and record, but it recently received a settlement that was £1.7 million down on last year. That means that it is in considerable difficulty given that it faces a £2 million increase in pension costs and a £3 million increase in staff costs. Will the Minister lend his support to increasing the authority's funding and also put right the misleading line given by the Home Office saying that Airwave would be paid for centrally because a further £330,000 needs to be brought forward for that?
    Mr. Touhig: Funding in the police service remains a top priority for the Government—indeed, it has increased by 30 per cent. since 2000 and there will be a 3.25 per cent. increase in the general grant for police services in next year's settlement. It is important to

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    recognise that the Government are committed to investment and reform in the police service. We are putting in a funding increase of 4.2 per cent.—£403 million in cash terms—for 2004–05.
    I am aware of the problems with Airwave. My colleagues in the Home Office appreciate that there has already been a good deal of expenditure on Airwave and are reviewing the position.
    Mr. Huw Edwards: When my hon. Friend meets Home Office Ministers, will he draw their attention to the letter from the chief constable of Gwent about the need to maintain resources so that the high detection rate that Gwent has successfully achieved may be sustained and the fight against crime can continue? Will he also join me in paying tribute to the chief constable, Mr. Keith Turner, on his impending retirement?
    Mr. Touhig: I echo the points that my hon. Friend makes about the retiring chief constable of Gwent. He has been a good and able officer who has had a considerable impact on policing in Gwent. Of course, the Government recognise that financial pressures exist and that they vary from one police authority to another. As I said in reply to the previous question, the Government are putting in resources and it is important for the police service to manage them effectively. I certainly urge all members of police authorities to scrutinise carefully the budget and spending proposals put forward by chief constables to ensure that we get value for money.
    Mr. Roger Williams: In the Dyfed-Powys police area, the proportion of the cost of policing that falls on council tax payers has increased from 15 per cent. to 35 per cent. in the past five years due to inadequate police grants. Why do a Labour Government insist on funding local police services through the iniquitous and regressive council tax, which bears most heavily on the lowest paid in society while the rich pay only 1 per cent. of their income?
    Mr. Touhig: In truth, the hon. Gentleman will recognise that there have been all sorts of pressures on the police service over recent years. As I said, the Government have put considerable extra funding into the police service throughout the United Kingdom. It is important that those resources are properly husbanded and managed, and I urge police authorities to ensure that they get value for money. When I chaired a local authority finance committee in a previous incarnation, I often had discussions with the police about various aspects of their budget and I was told that I could not question this or that because they were operational matters. I do not accept that. Such matters should be transparent and the public should know exactly what is going on with funding for the police service. The Government are putting in a great deal of extra resources, which should be welcomed. It is important for the police service to husband them and use them to the best of its ability.

    Waiting Times
    Mr. Jon Owen Jones: What discussions he has had with National Assembly for Wales Secretaries concerning progress in reducing waiting times. [142075]
    The Secretary of State for Wales (Mr. Peter Hain): In the last fortnight, I have met both the First Minister and the Health Minister and discussed waiting times in Wales.
    Mr. Jones: When my right hon. Friend next meets the Health Minister in Wales, will he bring to her attention the excellent chief executive's report on the health service in England, which speaks of increased new capacity, rapidly reducing waiting times and increased choice? Does he agree that one of the great benefits of devolution is that it allows the Governments in Cardiff, Edinburgh, Belfast and London to compare the success of their policies, and that the most successful should be adopted?
    Mr. Hain: I agree that we can learn from each other. My hon. Friend will understand that, under the Labour Government, the health budget in Wales will have doubled by next year compared with what we inherited from the Tories. We are seeing nearly 200,000 more patients than when we took over from the Tories, recruiting more staff, including nurses, consultants and doctors, and building more hospitals—10 new hospitals are being built, compared with 70 closed under the Tories. In addition, waiting times in key areas are decreasing.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Norman Lamb: If he will list his official engagements for Wednesday 10th December.
    The Prime Minister (Mr. Tony Blair): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I will have further such meetings later today.
    Norman Lamb: Does the Prime Minister agree with the conclusions of the Audit Commission that the council tax is "fundamentally flawed" and that this year's increases have a great impact on citizens,
    "particularly those on low and fixed incomes",
    many of whom are pensioners?
    The Prime Minister: I do agree that, as the Audit Commission said in the main part of its report, there are fundamental flaws in the council tax system—which was introduced after the poll tax, I think. However, we have put huge additional sums into local government this year, and it is important that councils understand that they have a measure of responsibility.
    Mr. Andrew Dismore: May I bring to my right hon. friend's attention the excellent work done in schools in my constituency? Perhaps he can find time to pay a visit to one of those schools. However, may I also bring to his attention the dismay felt by heads and parents in my constituency on learning that we were left out of the transitional funding for schools this year? Our schools face a serious financial crisis. Perhaps he can look into the matter—I know that in the past he has taken a personal interest in it—and see what he can do to ensure that our schools have the money that they need to continue to provide high-quality education.
    The Prime Minister: My hon. Friend is right to say that schools in his constituency have had substantial additional investment, and that results in those schools at every level—primary, GCSE and A-level—have improved. However, he has written to me about the difficulties regarding transitional funding, and I assure him that I am looking into the matter.
    Mr. Michael Howard: Is the Prime Minister aware that his Government are spending taxpayers' money advertising his proposals for student funding, including top-up fees, even though, as we all know, there has not been a vote in the House of Commons?
    The Prime Minister: It is important that we bring to people's attention exactly what is going to happen to our universities, but it is also important to recognise that, of course, that can only go through after there has been a debate in this House. I repeat that, every day. the alternatives become clearer: either an abolition of all upfront fees and a fair system of repayment under the Labour party; or, under the right hon. and learned Gentleman's proposals, a huge cut in the number of young people who are able to go to university. He was talking about this subject last week, so I say to him that the more the public look at it, the more they realise that his proposal is elitist, backward and reactionary.
    Mr. Howard: No, no, I am afraid that will not do at all. Let me try again. This was a specific question arising from a radio advertisement—I have the text here, and it says:
    "You cough up zip 'til you're blingin'",
    which, as the Prime Minister will know, means, "You pay nothing until you"re in the money." The advertisement is promoting the Government's policy on student funding, which has yet to pass the House of Commons. Does the Prime Minister approve of that?
    The Prime Minister: Surely, the issue is what is the right policy for the country—(Interruption.] Oh yes, it is.
    Mr. Speaker: Order. Let the Prime Minister answer.
    The Prime Minister: The issue is not some radio advertisement—it is what is the right policy for Britain. Let us look at the alternative, which the right hon. and learned Gentleman does not want to do. Either we abolish up-front fees, and all graduates then pay something back under a fair system of repayment, or we
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    end up cutting by 100,000, possibly 250,000, the number of young people going to university. That is the choice that he wants to run away from.
    Mr. Howard: There is a rather important question that the Prime Minister has to answer here. Does he not think that it is just a little presumptuous to start advertising the new student finance policy when 157 of his own Members of Parliament have signed a motion against it? As a result, the Bill has not even been published yet, and the Prime Minister, with his majority of 170, has had to put back the vote.
    The Prime Minister: I will tell the right hon. and learned Gentleman what I think is presumptuous: it is presumptuous is for the Conservative party to say that it is going to cut taxes at the same time that it is going to cut the funding for universities. Let us be clear about this. The Conservatives" policy is not merely to starve the universities of money in future but to make an immediate cut of £500 million a year—he can put me right if I am wrong—which means 100,000 fewer people at university. Instead of debating radio advertisements, let us debate policy.
    Mr. Howard: That is what the Prime Minister thinks about the proper use of taxpayers" money. Let me remind him of his Government's own rules:
    "Government publicity for proposals which are, or may become, the subject of legislation in Parliament remains a particularly sensitive area. Until such measures have become law, any Government publicity must neither assume nor anticipate Parliamentary approval."
    Is not the advertisement a flagrant breach of the Government's own rules?
    The Prime Minister: Let us indeed debate taxpayers" money. There is a very simple choice on student fees—[Interruption.] Oh yes, there is. Conservative Members can try to duck the choice, but they cannot duck it either now or until the next general election. The issue about taxpayers" money is this: either taxpayers pay for all student finance, irrespective of whether they have been to university, or they have our system. Will the right hon. and learned Gentleman come clean and accept that his provision means that there will be 100,000 fewer students, and in time a quarter of a million fewer? That is unfair, regressive and reactionary, and we will have nothing to do with it.
    Mr. Howard rose—
    Mr. Speaker: Order. Before the Leader of the Opposition starts, Mr. Fabricant is shouting louder than anyone else—
    Michael Fabricant: indicated assent.
    Mr. Speaker: Order. The hon. Gentleman is nodding in agreement, but he is out of order. I have told him not to shout—[Interruption.] Order. I am telling the hon. Gentleman not to shout. He is far too near me.
    Mr. Howard: Is the Prime Minister so indifferent to the abuse of taxpayers" money in contravention of his own Government's rules that he is not even prepared to

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    answer this question? If the Minister responsible for that abuse of taxpayers" money is found to have broken those rules, will he resign?
    The Prime Minister: It is unbelievable. The right hon. and learned Gentleman has five questions on the issue of student finance, and not once is he prepared to debate the real choice. It is not about some advertisement but what is the right thing for the future of this country. In our view, it is right to allow young people to go to university if they have the ability, abolish up-front fees and say that there should be a balance between the taxpayer's contribution and a fair system of repayment after graduation. That is our choice. The right hon. and learned Gentleman has an additional question, so let him, just for once, confirm that under his policy the universities would lose £500 million immediately and hundreds of millions of pounds in future, which could be paid for only by cutting student numbers at university.
    Mr. Howard: Does not the Prime Minister's refusal to answer the question show his arrogance, his indifference to the opinions of his own party and his utter contempt for the views of Parliament?
    The Prime Minister: No, because Parliament will make its decision. The question is what is the right decision for the country. [HON. MEMBERS: "No."] I should have thought that if we are debating university finance, the question is indeed what is the right policy for the country. The right hon. and learned Gentleman can sneer, jeer and make his jibes, but it becomes clearer day by day that when we get down to policy, he has nothing to say about the future of Britain.
    Mr. James Plaskitt: Does my right hon. Friend welcome the Joseph Rowntree report published this week, showing reduced poverty in the United Kingdom, but does he share my concern about even the reduced level of child poverty that still persists? How much more can we do to tackle that?
    The Prime Minister: My hon. Friend is right to draw attention to the progress that the Joseph Rowntree report indicates. With about a million children being helped, there are half a million fewer children in poverty. There have been additional sums in the tax credit system and child benefit, and in the new deal, which has helped many people off benefit and into work. However, he is right to say that we still have more to do. For the first time in a long time, the reduction of poverty and unemployment has become a key Government priority. It is a priority under this Government, but not under the previous Government. My hon. Friend should wait for the announcements of my right hon. Friend the Chancellor shortly.
    Mr. Charles Kennedy: Will the Prime Minister confirm his Government's parliamentary answers to the Liberal Democrats that if one were to levy a 50p top rate of tax for every pound above £100,000 of income, that would generate £4.7 billion? As he knows from my letter to him this week, we would use that money to stop tuition and top-up fees, introduce fair grants, deliver free personal
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    care and lessen the impact of council tax rises—nothing more, nothing less. The Prime Minister may not agree, but will he confirm that those figures add up?
    The Prime Minister: As I constantly try to say to the right hon. Gentleman, if I had to read out his spending commitments, we would need—[HON. MEMBERS: "Go on."] I can, but not in half an hour of Prime Minister's questions. He has spending commitments that total well over £15 billion. Yes, it is correct that he could raise the money to pay for student finance from a top rate of tax of 50 per cent., but he could not do that and meet all his other spending commitments.
    Mr. Kennedy: The Prime Minister says that he wants a serious conversation across the country, but he clearly does not want a serious conversation across the Floor of the House. That is why he continues seriously to misrepresent our policies. May I ask him about his policies? In reply to me last week, the Prime Minister said that raising the top rate of tax to 50p on every pound over £100,00 income would be "unfair"—his word—yet under his current proposals, a graduate who earns above £35,000 a year will pay a combined tax rate and loan repayment of 50 per cent. How can that be unfair for those with an income above £100,000, but fair for those earning above £35,000? Justify that, Prime Minister.
    The Prime Minister: I will justify it. The plain fact is that the rate would not be 50 per cent. for those above £100,000, because the right hon. Gentleman's commitments total far more than any sum—[HON. MEMBERS:"No."] Let me read some of his commitments. He cannot be saying that the only spending commitment he has is on student finance. He also has a commitment on the national health service, on the basic state pension—[HON. MEMBERS:"No."] Well, he has. I have looked—
    Mr. David Heath: Answer the question.
    Mr. Speaker: Order. Mr. Heath, I understand that the Prime Minister is answering the question in his own way.
    The Prime Minister: At the moment, I am answering it in the Liberal Democrat way, because I am reading out spending commitments. There is a £2 billion extra commitment for railways. [Interruption.] They either have these spending commitments or they do not. [Interruption.] Apparently, they do not—so the alternative Budget that they have just produced, which contains more than 40 spending commitments, has now gone as well, has it? I have to say to the right hon. Gentleman that until he gets a serious economic policy, we will not take him seriously on this or anything else.
    Ms Meg Munn: The Gleadless Valley community in my constituency is very pleased to have a Sure Start scheme. However, there are difficulties in obtaining premises for the scheme, because of some of the regulations that must be met. Will my

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    right hon. Friend ensure that regulations for Sure Start schemes do not prevent these valuable services from coming into communities such as Gleadless Valley?
    The Prime Minister: I am very happy to look into the point that my hon. Friend makes. She will know that Sure Start is now helping 400,000 children in some of the most disadvantaged areas of the country. It has been an immensely successful programme and all the evidence is that it is a good long-term investment for the future of the country. I entirely understand the point that she makes, however, and I will look into it and get back to her with a reply.
    Mr. John Maples: According to figures from the House of Commons Library, by next year, and since the Prime Minister's Government came to power, the total tax burden will have risen by a staggering £172 billion. That means that every man, woman and child in this country is paying an average of £3,000 a year more in taxes. [Interruption.] I can give him the figures. but what I wanted to ask him was whether they are correct.
    The Prime Minister: That takes no account of the fact that 1.5 million more people are in work, so of course the tax take goes up. It is like the Tories and their 60 tax rises: if the same computation is used for the Conservatives, the figure was 130 when they were in power. Let us take the £170 billion figure that the hon. Gentleman has just given: when the Conservatives were in power, the figure was £370 billion. Actually, it is all meaningless, because it depends on earnings and the tax take. The real issue is the tax burden, which is less today than in most of the years when his party was in government.
    Mr. David Stewart: Does my right hon. Friend share my concerns about the activities of loan sharks who exploit the poor and elderly and appear at the doors of the vulnerable bearing gifts on the never-never? Is it not the case that we must exploit these loan sharks and ensure that they do not rip off our poor and vulnerable?
    The Prime Minister: The point that my hon. Friend makes is addressed by the White Paper on consumer credit, which was published earlier this week and amounts to the biggest shake-up in consumer credit for about 30 years. The point to which he draws particular attention has led to the new proposal for powers for the Office of Fair Trading to fine and raid the premises of some of these cowboy lenders, if we can put it that way. Loan sharks do enormous damage to some of the poorest people in the poorest communities in the country. He is right to raise the issue, but we are satisfied that the powers that we announced on Monday will make a significant difference.
    Mr. Desmond Swayne: Despite the challenging but achievable target of the timetable to which we are working to put an Iraqi face on Iraqi security, does the Prime Minister understand that such operations inevitably fix large numbers of our troops? Will he ensure that the armed forces can recruit to make up the numbers that they require?
    The Prime Minister: First, in case I have not done so before, let me thank the hon. Gentleman for the service
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    that he gave in Iraq, for which the House and the country should be grateful. Secondly, of course the armed forces have to be able to recruit properly. That is one of the reasons why we are increasing defence spending in real terms. If he will allow me, I would simply pay tribute once again to the magnificent work that is being done by British troops in Iraq. I am delighted to say that other countries such as Japan, notwithstanding the terrorist attacks, are also going to provide troops. He is right that the challenging timetable for handover to the Iraqis is difficult, but I remain confident that, in the end, what we will have in Iraq is a stable and prosperous country. That will be a huge boost to the whole middle east, and it will be due in no short measure to the bravery and courage of our armed forces.
    Kate Hoey: The Prime Minister must know that the majority of the public, including the majority of Labour supporters, want a referendum on the outcome of any European constitution. As he is in listening mode at the moment, will he listen to those people?
    The Prime Minister: I will of course listen to people carefully on that. It is, however, important to wait until we get the results of the intergovernmental conference, which, as everyone knows, we hope will be negotiated this weekend, if not in the coming months. I believe that the constitution will protect all the red lines that we have set out, and as I have said on many occasions, the best way to deal with this is through the House of Commons, just as the previous Government did.
    Mr. Alex Salmond: In the course of the Prime Minister's big con… versation with the electorate, will he speak to people in the Scottish fishing industry, who see the European Convention strengthening the hold of the disastrous common fisheries policy, or to those in the oil and gas industry, who want the energy chapter to be made a red line issue? The Prime Minister cancelled a visit to Scotland tomorrow in order to deal with a crisis in the Convention. When is he going to start representing Scotland's vital interests in Europe?
    The Prime Minister: The way to represent Scotland's vital interests is to go to the European Council properly to negotiate our positions on issues such as energy, not to peddle the complete deception that withdrawal from the common fisheries policy will somehow help the fisheries industry in Scotland or the UK: it will not, and to say that it will is a cruel deception—but that is not untypical of the hon. Gentleman.
    Mr. Michael Clapham: May I tell my right hon. Friend that compensation payments for chronic obstructive pulmonary disease and vibration white finger are now reaching mining families and former miners? However, despite the fact that all the legal fees and disbursements in those cases are paid to solicitors by the Department of Trade and Industry, some—I must emphasise that it is a small number—are charging a success fee. Will he

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    look into the matter and take advice on how we might compel those solicitors to repay miners and their families?
    The Prime Minister: First, as my hon. Friend fairly and rightly says, £1.8 billion will soon have been paid out to former miners and their families under the coal health compensation schemes. I know that he would accept, and believe that many of the mining communities accept, that this would never have happened under any Government other than a Labour Government. It has made an enormous difference to those families. He is right, however, that—in a minority of cases, it is fair to say—there has been concern about difficulties with legal representation. I understand that the Law Society has said that it will investigate all cases of that type as a matter of urgency—and there is the power to refer complaints to the legal services ombudsman—but in the light of my hon. friend's question, I will look further into the matter myself.
    Sir Teddy Taylor: Does the Prime Minister see any prospect of progress being made in Northern Ireland after the recent Stormont elections? Is he aware that in the meantime, taxpayers—and, no doubt, the Chancellor of the Exchequer—are concerned that those who were successful in those elections are being paid 70 per cent. of their parliamentary salary, although they have no parliamentary duties, and 100 per cent. of their office costs allowance, although they do not have offices? That is costing about £40 million, which seems to be a huge waste of money. How long will the Prime Minister let it go on?
    The Prime Minister: I will let it go on for as long as we can try to get a deal together that saves the institutions and allows Northern Ireland to move forward. I am of course aware that it is an anomaly in the present situation. I hope, however, that the hon. Gentleman recognises the enormous boost that the peace process has given to Northern Ireland, and not least to its economy. When we came into office, Northern Ireland had easily the highest unemployment level of anywhere in the UK—now, it does not, and investment and jobs have poured in. Overall, the peace process has been immensely beneficial. Yes, it is true that the anomaly is there, and obviously it cannot go on for ever in these circumstances, but it is still worth maintaining the current situation to see whether we can find a way through, because in the end that is manifestly in the interests of the people of Northern Ireland and of the UK.
    Jim Sheridan: Like many of my generation and background, I did not have the opportunity of going to university, and it therefore never ceases to amaze me that such excitement is generated in this House about university top-up fees. During my right hon. friend's deliberations with the appropriate bodies, will he not forget the many youngsters in all our communities who may not have the necessary qualifications to get into university but are equally important to the long-term prosperity of this country, because they actually produce things that we need?
    The Prime Minister: My hon. Friend makes a very valuable point. It is right that many people need the
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    benefit of good vocational training and of modern apprenticeships, and this Government have implemented a modern apprenticeship programme with 200,000 people in it. It is also important to realise that many people—some from poor backgrounds who are trying to get better skills—will of course have to pay for a certain amount of that themselves. It is important that we have a system that is fair for university students and also fair for people who do not go to university. In the end, this is all about creating a modern, knowledge-based economy in which we have high levels of university education and high levels of vocational skills as well.
    Mr. Adrian Flook: If the Prime Minister gets his top-up fees through the House, will he consider the plight of A-level students who started their course this term? They will finish their exams in 2005, but because of the likely introduction of top-up fees in 2006, none of them will take a gap year. Many of them will therefore forgo doing valuable charity work. Worse, this will also create a logjam for university admissions in October 2005. Will the Prime Minister allow those particular students the chance to opt out of top-up fees?
    The Prime Minister: Let me tell the hon. Gentleman two things. First, our proposal is to abolish up-front tuition fees altogether, so students will not be paying the money that they are paying now at all. Secondly, I suggest that he goes back to his constituency and tells his constituents how many of their children would not be able to go to university at all under his proposals.
    Mr. Gwyn Prosser: Does the Prime Minister share my confidence that the recent announcement of job losses by Hoverspeed and P&O Ferries in Dover is a reflection of a short-term downturn in passenger demand, and that there is every prospect of a return to growth? Does he also agree, however, that this only emphasises the urgent need to continue to regenerate the frail economies of east Kent, and that the best way to achieve that would be to extend the new high-speed channel tunnel rail link into Dover, thus connecting one of the busiest cities in Europe to the busiest ferry port in the world?
    The Prime Minister: I know that my hon. Friend has campaigned hard on this issue, and he will know that we are still considering whether services to Dover could use the channel tunnel rail link. The Strategic Rail Authority is also consulting on improving services throughout Kent. His point about unemployment is right. As I have said to him before, I deeply regret the loss of jobs at P&O, but the most important thing is to help people to get new jobs when their jobs are at risk. I hope that the rapid response service is doing all that it can to help people to find alternative employment. He will know that one of the benefits of the sound economic management of the past few years has been that we now have 1.5 million extra jobs in the British economy.
    Mr. Ian Liddell-Grainger: I shall not make a habit of this. but I must say to the Prime Minister that I am very grateful for the settlement for Somerset. It is not adequate, but it will do.

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    Is he aware, however, that the Liberal Democrat-controlled county council is now morally blackmailing the taxpayers of Somerset into deciding what services we want to have cut over the next year? Does he not find it repugnant that a county council should resort to using the web to discuss what services people want cut?
    The Prime Minister: I was not aware of that, but I am now. It will surprise the hon. Gentleman to know that I totally agree with him. It is important that people recognise that, when the Liberal Democrats get into power on any of these councils, the tune that they sing in here—which is "spend, spend, spend" without there ever being a price—is usually reversed into "cut, cut, cut" in the local authorities.
    I Andy King: I would like to thank my right hon. Friend for meeting me, my parliamentary colleagues and representatives of those who work with the poorest in our country, at a recent meeting in his office, and for his interest in and commitment to eradicating poverty, especially among children, by 2020. Does he agree that that is in contrast with the scandal of the Conservatives, who doubled child poverty? In Warwickshire, children's centres are now coming into being because of the hard work of the Labour-led Warwickshire county council in delivering the Government's agenda, which is to end this scandal once and for all.
    The Prime Minister: My hon. Friend is absolutely right. I would like to make one additional point, which
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    is to stress again the importance of the new deal in reducing poverty in this country. About 800,000 people have now been helped by the new deal: lone parents have been helped off benefit into work; long-term unemployment has been cut; and young people who were consigned to the scrap heap and the dole for years under the Conservatives have been able to get a job. That is why any party pledging to scrap the new deal does not have the interests of the poorest in our country at heart.
    Lembit Öpik: Returning to higher education, but not tuition fees, is the Prime Minister aware of an anomaly preventing federated universities from encompassing campuses that use a local name? For example, Cardiff must call itself university of Wales, Cardiff, not Cardiff university. Given the organisational and branding implications, will he support a simple amendment to remedy that, which I hope to achieve using my private Member's Bill, without charging him a fee?
    The Prime Minister: The answer that I have to give the hon. Gentleman is not exactly earth-shattering, but here it is. We all want Cardiff to maintain its position as a world-class university. The Secretary of State for Wales will consider any proposals for changes to the constitutions of universities in Wales in his capacity as Privy Councillor.

Pre-Budget Report
12.31 pm
The Chancellor of the Exchequer (Mr. Gordon Brown): When in 1997 we made the Bank of England independent, we also froze spending for two years, cut the national debt and imposed the responsibilities of the new deal—hard choices made to restore, as the central objective of British economic policy, the goal of high and stable levels of growth and employment
Today, I can report to the House that British inflation has been at its lowest for 30 years; interest rates are their lowest since 1955; this Christmas, there are more people in work in Britain than at any time in our history; and economic growth in this country is now strengthening. While America, Japan and half the euro area have suffered recessions, the British economy has—uniquely—grown uninterrupted, free of recession, in every single quarter in every single year since 1997. Now is the time for this stable and growing economy to seize the opportunities of the emerging world recovery.
So, with the same strength to take the right long-term decisions for Britain that have guided us through the world downturn, this pre-Budget report sets out the further tough choices that we have to make: first, decisions to lock in our hard-won stability and to fund our additional obligations to the war against terrorism and Iraq; secondly, long-term choices that step up the pace of economic reform to strengthen Britain's enterprise culture, British science and the flexibility of the British economy; and thirdly, even as we come through a world downturn and because we believe that enterprise and fairness can advance only if they advance together, an additional £1 billion a year investment in Britain's children to advance our goal that not just some but all Britain's children have the best possible start in life and that no child is left behind
First, the world economy. While the USA and Japan have been recovering during 2003, growth in our biggest trading area—the eurozone—is expected to be just 0.5 per cent. In Italy, growth is 0.4 per cent.; in France, 0.2 per cent.; and in Germany, zero. But I can report that in Britain growth this year is now expected to be 2.1 per cent., meeting our Budget forecast
When I made our Budget forecast, the Opposition said it was not just incautious and wrong but "a deliberate misrepresentation" of Britain's economic prospects and not to meet it destroyed credibility. I can report to the House that not only have we met our forecast, but cumulatively since 2000 Britain's economic growth has actually been stronger than Japan, the euro area and the USA.
I can tell the House now that Britain has enjoyed the longest period of peacetime growth since records first began in 1870—130 years ago. So, Mr. Speaker, let me share this with the House: my sleepless nights have not been due to the economy nor to the Opposition. I can also tell the House that, looking forward, we expect British growth next year to increase by between 3 to 3.5 per cent. and in 2005 to increase again by 3 to 3.5 per cent.
In a world downturn, Britain has achieved growth with low inflation and with high employment. I can report that since 1997 inflation in Britain has averaged
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2.3 per cent., and that the number of jobs created in our economy now exceeds 1.7 million. Unemployment in America is 6 per cent.; in Germany, Italy and the euro area it is 9 per cent.; in France it is 10 per cent.; in Britain it is just 5 per cent. For the first time in 50 years, British unemployment is lower than that of every one of our major competitors—the euro area, Japan and America.
Even with long-term unemployment cut by 80 per cent. and youth unemployment by 75 per cent., I have read pre-Budget representations that this Government's new deal is said to be an expensive failure and should be abolished. Today, in the pre-Budget report we are setting out the evidence showing that without the new deal, youth unemployment would be twice as high; without the new deal, half the lone parents who have moved into work would not have done so; and without the new deal, unemployed men would be 20 per cent. less likely to get a job. So the challenge of this pre-Budget report is not to abolish the new deal—now, with 2 million people helped, the most successful employment programme in our history—but to strengthen its role in removing for ever the scourge of long-term unemployment in this country
We remain vigilant in regard to both inflation and the continuing risks from global imbalances, an uneven world recovery and geopolitical uncertainties. I also understand the continuing concerns of manufacturers and exporters. It is therefore urgent that world trade talks be resumed
As we achieve more balanced economic growth, fixed investment is growing this year by 2¼ per cent., with growth forecast at 6 to 6½ per cent. next year. Business investment, which was expected at Budget time to fall, is actually rising by three quarters of a per cent. this year, with 3 to 3½ per cent. growth forecast for 2004. The latest manufacturing and industrial production figures show a 1 per cent. growth in just one month, and manufacturing output—which has fallen in both North America and Europe—is expected to grow here by one quarter of a per cent. this year, and then by around 2 per cent. in both 2004 and 2005.
With the housing market and consumer spending growth now—as we forecast—moderating, we expect domestic demand and private consumption to grow by 2½ per cent. this year and in the following two years, building on six years from 1997 in which British households have averaged real rises in income above 3 per cent. a year. With—since 1997–1 million more home owners in Britain, rising household debt has been matched by rising household wealth and lower interest payments.
Because this Government will never take stability for granted, I have announcements designed to entrench that stability. First, the credibility that has come from Bank of England independence and the tough decisions to cut inflation have made possible a proactive, forward-looking approach to interest rates, cutting aggressively at the right time for the economy and, as the economy now strengthens, locking in long-term stability.
The symmetrical inflation target enables the Bank to be both pro-stability and pro-growth. The long-term credibility of our symmetrical target will be enhanced—as the independent Office for National Statistics reports in its paper published today—by adoption of the internationally recognised measure of inflation, the

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harmonised consumer prices index. It is more reliable because, taking account of spending by all consumers, this consumer prices index gives a better measure than the old RPIX measure of spending patterns. It is more precise because, as in America and the euro area, it takes better account of consumers substituting cheaper for more expensive goods. I have therefore written to the Governor of the Bank of England this morning confirming my announcement earlier this year, and confirming that from today the operational measure for inflation will be this consumer prices index, and I am setting the new inflation target at 2 per cent.
I can confirm that pensions, benefits and index-linked gilts will continue to be calculated on exactly the same basis as now. As before, the target will be symmetrical. Should the rate of inflation diverge from the 2 per cent. target by more than 1 per cent. on either side, our open letter system will be triggered. And because discipline in pay setting is essential in both private and public sectors, I have also written today to the public sector pay review bodies, informing them that our inflation target is 2 per cent.
When, in 1997, we also broke from the old annual spending rounds by setting fiscal rules over the cycle and fixed three-year spending settlements, and then paid off more debt in one year than all the debt paid off across all the 50 years since 1945, debt interest payments were reduced to just 2 per cent. of national income—lower than at any time since 1915. Those long-term decisions that we made for stability have enabled fiscal policy during this world downturn to support monetary policy, and therefore to maintain economic growth. This Government will ensure that for the long term, debt levels will remain low and sustainable. In each pre-Budget statement, we will report not just on the medium-term fiscal position, but on the long-term position. Today's report shows that while in Germany, France and the euro area state spending on pensions will rise towards 15 per cent. of GDP by 2050, Britain's figure of 5 per cent. means—I the report—that
"the UK public finances are sustainable in the long term…the UK is in a strong position relative to other countries to face the challenges ahead".
I have to tell the House that to revert to the pre-1980 position—an earnings link with pensions—would, by the end of the period, raise deficits by 3 per cent. a year just to cover this one item, with the long-term sustainability of the public finances undermined. Instead, this Government will proceed on a prudent and sustainable basis.
Essential also for long-term stability is a flexible housing market, and I welcome the interim reports this week of the Miles review on the market for mortgages and of the Barker review into barriers to housing supply. Kate Barker highlights Britain's weak private rented sector, so I will now consult, before the Budget, on a new incentive to encourage the creation in Britain of real estate investment trusts.
With flexibility central to meeting the euro's five economic tests, I am today also publishing our first report on labour, capital and product markets; and as promised in June, the draft euro referendum Bill is published today.
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Since 1997, Britain has created over 100,000 more businesses; there are 170,000 more self-employed. But more enterprising though we are, Britain still lags behind American rates of business creation and success. And just as we took hard decisions that led to a British consensus on stability, I want to build in Britain an even deeper-lasting British consensus: a shared national economic purpose that, building on our historic strengths—Britain's scientific genius, British creativity, Britain's global reach and Britain's stability—means that we become, in this era of globalisation, one of the world's most enterprising, flexible and successful economies.
I want Britain to be the best location for science and for research and development, so I can announce a widening of the successful R and D credit that will include the direct costs of software and power. As the Government examine the Lambert and Sainsbury reviews, and put forward our reforms in the structure and funding of higher education to promote excellence and opportunity for all, the Budget will consider even further improvements, including for research and technology organisations. We will, in addition, consider the right incentives to support one of our great British creative industries: British film. A flourishing British venture capital industry is vital to growth. I will also consult on raising the annual limit for venture capital trusts and enterprise investment schemes to £200,000, and on increasing for two years income tax relief for VCT investments to 40 per cent. We will extend tax relief for the cost of managing investments from investment companies to trading companies.
Small firms in Britain seeking investments of up to £2 million still face an equity gap, so following, again, the model of American small business investment companies, we will create a new framework of incentives for small business investment. We will therefore launch the first round of a new British fund for enterprise capital. To encourage new companies to enter the North sea, I will enhance the tax relief for their costs of exploration. Manufacturers and firms with turnovers up to £22 million will benefit from 40 per cent. capital allowances, which will be worth, over three years, nearly £400 million to manufacturing and industry.
So that British manufacturers and British workers do not lose out from European rules unfairly applied to British firms, the Secretary of State for Trade and Industry and I have asked Mr. Alan Wood of the Engineering Employers Federation and Siemens UK to review how procurement rules are practised in Europe and to make recommendations.
I can announce the following deregulations. Firms applying international accounting standards will not have to submit a second and separate set of accounts to the Inland Revenue. For firms with turnovers below £5.6 million, there will now be no independent audit requirement. I will extend the flat rate VAT scheme whereby firms simply pay a percentage of total turnover, lowering the VAT charged by up to 3 per cent., and for first year start-up businesses by up to 4 per cent. In total, the Government are announcing today 147 regulations for reform or removal. Because half of regulations emanate from Europe, the coming Irish, Dutch, British and Luxembourg presidencies are proposing a joint initiative to drive forward deregulation as we seek more flexible capital, product and labour markets—not just in Britain, but across Europe.

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Our goal is full employment for every region and nation of the United Kingdom, and we are closer than ever to achieving it. While the first stage of Britain's new deal was to move people from welfare into jobs, the next stage is to help people move from low-skilled work into higher-skilled work. I want to announce today that the windfall tax reserve, which was previously allocated for job creation, will now be reallocated to a new deal for skills.
To extend employer training pilots to a third of the country—from 14,000 up to 80,000 employees, most of whom have left school early and have no qualifications—we will provide £190 million in the corning year for time off and for skills training. To further that new deal for skills, everyone on jobseeker's allowance will be assessed for their skills and, starting with pilots for the long-term unemployed, they will attend a mandatory skills course.
Overall, that provides a second chance for adults—either in or out of work and without basic skills—to learn, whether through further education, work-based learning, distance learning or trade union learning. Today, further to boost such skills training, we are publishing a paper on the tax treatment of subscriptions and fees for professional bodies.
Alongside the Allsopp report on regional statistics, which is published today, the Secretary of State for Work and Pensions and I are also publishing today for the first time the full employment plans for each region of the country. For 2,000 enterprise areas, which cover high unemployment communities in a total of 417 constituencies, I can announce that, in addition to fast-track planning and abolishing stamp duty, there will—subject to state aid approval—be first-year 100 per cent. investment allowances to renovate vacant commercial premises.
I can also confirm that, as a result of the Lyons review, we will relocate out of London and the south-east 20,000 civil service jobs—to the benefit of the regions and nations of the UK. Local authorities which successfully promote small business creation should be rewarded for doing so. The Deputy Prime Minister and I propose that any additional business rate income should be shared with local authorities. Although I will consult further before the Budget, we expect local authorities to be eligible, as a result, for an additional £150 million in 2005, £300 million in 2006, rising to £450 million a year for local authorities.
Budget 2002 announced reliefs on income and donations for local amateur sports clubs. The importance of sport to our communities and to our whole country has been demonstrated most powerfully as the England rugby world cup triumph is enthusiastically celebrated all across the United Kingdom. I know that the whole House will want to congratulate the team on their success and also encourage the next generation of sportsmen and women.
There are 100,000 amateur sports clubs in Britain, which deserve greater support. Under our proposals, becoming a community amateur sports club will now bring an entitlement to 80 per cent. rates relief, which is worth between £1,000 and £3,000 a year for a typical club. By doubling today the thresholds at which community clubs are exempt from corporation tax to a
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new rate of £50,000, the vast majority will be exempted from such tax altogether. In partnership with the sports governing bodies, we will now do more to ensure that all sports clubs—roughly, over 100 in each of our constituencies—can share in the considerable financial benefits as they promote sports throughout their communities.
The Home Secretary—who will announce tomorrow the details of our £125 million fund for voluntary and community organisations—the Secretary of State for Culture, Media and Sport and I will report in the Budget on what more we can do in Britain to encourage and help all those prepared to volunteer in school sports and local sports, as well as in community service and mentoring. At the same time, we will also review the Inland Revenue's treatment of football supporters' trusts.
I have two announcements on whisky and spirits. While tobacco fraud, VAT fraud and oils fraud are now in decline, recent trends suggest that despite the freeze in spirits duties for six Budgets, an estimated one bottle in every six of spirits sold in this country is evading duty, so I will now make provision to implement in the next Finance Bill the Rogues report recommendation that we stamp spirits bottles. If, after discussion with the industry, there is still no workable alternative proposed, we will legislate. If we have to impose stamping, the Economic Secretary will discuss with the industry the most cost-effective scheme and I will then consider extending the freeze on the duty on whisky and all spirits, not just for one year but for every year of this Parliament—[Laughter.] And I drink water.
I propose also to consult on a new framework for the tax treatment of green fuels: that we make a commitment to prior announcements, three years ahead, of incentives to increase usage and thus promote investment in new fuel-efficient technologies. The Budget will announce the way forward on that measure and it will also introduce incentives for rebated low-sulphur fuel and gas oils. We will also consult on recycling revenues from landfill tax; extending eligibility for the 80 per cent. reduction from the climate change levy; and, subject to new industrywide commitments on the environment, extending in Northern Ireland until 2012 an 80 per cent. discount on the aggregates levy.
Also published today are measures extending our VAT compliance strategy and closing loopholes that involve trusts, seafarers foreign earnings deductions and tax paid on the personal income of owner-managers of small companies.
Our pension proposals, published also in detail today, include a single set of rules that set the tax-free lump sum at 25 per cent. of the value of an individual's pension fund; more flexible annuity rules; and provision for older workers to draw occupational pensions earlier. Because consultation on the proposed single lifetime tax allowance for pension savings has revealed contrasting interpretations of its impact, I am asking the National Audit Office to provide, by Budget time, an independent evaluation of the numbers affected. Our aim is to secure a broad-based national consensus on the way forward. If a decision is made to proceed, the measures will be introduced in April 2005; otherwise, the current regime will remain in place.

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I come to the coming spending round. In advance of the independent Gershon review of efficiency, the Chief Secretary has written today to all Departments asking them to bring forward their proposals for reform and cost savings in the areas of transaction services, back office services and procurement—where we propose a new Whitehall framework. With modernisation and reform the condition of future spending settlements, the Treasury will in return—for public service agreements—abolish the input and process targets, and we will abolish service delivery agreements entirely. And while local performance standards and local publication of performance data will progressively replace the national targets, the Deputy Prime Minister and I are agreed that, having already set aside for English local authorities next year an additional £3.3 billion, the Government will be prepared to use capping powers where appropriate and necessary to ensure next year reasonable levels of council tax.
I turn now to the public finances. I reported to the House last week on our resolve to ensure that our armed forces are properly supported in all they do. The whole House will wish to thank them for the service they give in peace and in war. I can also reaffirm that we will meet all our international development responsibilities in Iraq and for the war against poverty in Africa and around the world.
To date, the money spent or set aside for the war against terror, including in Afghanistan and for our action in Iraq, is £5.5 billion. I can tell the House that for Iraq £2 billion has been carried forward into the special reserve for 2003–04; and I believe it prudent and right today to set aside a further £500 million for this year, and an extra £300 million for next year—raising our allocations for the war against terrorism and for action in Iraq to £6.3 billion in total.
So, having taken account of those new provisions for Iraq and elsewhere, and the cost of incentives that I have announced for enterprise and other measures to equip Britain to take advantage of the opportunities of the global upturn, our current budget figures for 2003–04, and for the years to 2008, are, in billions: minus 19, minus 8, minus 5, zero, plus 4 and plus 8.
Our first rule is the golden rule that over the cycle we balance the current budget. Having accumulated surpluses at the start of the economic cycle at 2.1 per cent. of national income in 1999, 2.1 per cent. in 2000 and 0.9 per cent. in 2001, we not only meet our first fiscal rule—the golden rule—that we balance the budget, but even on cautious assumptions we have an average annual surplus over the whole cycle of around 0.2 per cent. of gross domestic product, meeting our first rule in this cycle by a margin of £14 billion; and even on the cautious case, moving back to balance by the end of the forecast period.
Our second rule—the sustainable investment rule—is that net debt will be below 40 per cent. of national income. I can tell the House that debt this year is actually rising to 42 per cent. of national income in France, 50 per cent. in Germany, just under 50 per cent. in America and 80 per cent. in Japan. But in Britain, debt in this year and future years will be well below 40 per cent.—at 32.8, 33.8, 34.6, 35.1, 35.4, and 35.5 per
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cent.—meeting our second rule by a margin of £60 billion, and doing so over the cycle and in every single year.
With both rules met, it is right and prudent that—as in America, Japan, France and Germany—we borrow at this, the right time of the economic cycle. Net borrowing adjusted for the economic cycle, which is forecast this year at 3.5 per cent. of national income in Germany, 3.9 per cent. in France, 4.5 per cent. in America and 6.9 per cent. in Japan, is in Britain 2.4 per cent. this year, and in future years it will be 2, 2.2, 2, 1.9 and 1.7 per cent. of national income.
Adjusted for the cycle, our deficit, as I state in our annual convergence report submitted today to the European Union, is and remains—unlike the deficits of those G7 colleagues—below 3 per cent. of GDP and below it in every single year. In each year, before adjusting for the cycle, British borrowing is also substantially below the G7 average and it is falling to just half the level of America.
Let me give the House, in detail, the comparative figures. This year, net borrowing is for France 4.2 per cent. of national income; in Germany it is 4.2; in the USA it is 4.9; and in Japan it is 7.4.—but for Britain it is 3.4 per cent. Next year, net borrowing in France is 3.8 per cent. of national income; in Germany 3.9; in America 5.1; and in Japan 6.8 per cent. In Britain, it is just 2.6 per cent. And in 2005, while for France borrowing is 3.6 per cent. of national income; in Germany 3.4; in America 4.9; and in Japan 6.9; in Britain it is just 2.4 per cent.
So compared with a British deficit reported by the Conservative party 10 years ago of 8 per cent., and an average of 6 per cent. over the early 1990s, net borrowing this year and future years to 2008–9, as a percentage of GDP, is 3.4, 2.6, 2.4, 2.1, 1.9, falling to 1.7 per cent.—with, for this and future years, the cash figures 37 billion, 31 billion, 30 billion, 27 billion, 27 billion and 24 billion—so we are able to meet all our commitments in Iraq and at home; maintain the lowest level of debt in the G7; still announce a deficit that, in each and every year, is substantially below that of America, Japan, Germany and France, meeting all our fiscal rules; and move forward with the spending plans we have set out:£15 billion pounds more a year for education, £59 billion more a year for public services and, by 2008, £41 billion more for health, allowing us to employ, in total, 25,000 more doctors, 20,000 more teachers, 80,000 more nurses and 90,000 classroom assistants, as we invest in and reform our public services.
It is sustained economic growth, built on the foundation of long-term stability and on low debt, that has underpinned our investment plans and makes them affordable for now and the future. And so I can now make two further announcements. The first is on children's benefits—and here I should declare an interest. Nothing is more important to the future of our whole country than the best schooling, services and financial support, ensuring for every child the chance to develop their potential to the full.
For mothers and fathers struggling to balance work and family responsibilities, help with child care costs—once available to just 47,000 parents in 1997—is now available to almost 300,000. But today it is time to begin to face up to a long-standing grievance: that financial

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help for approved child care be offered not just to some families but be available right up the income scale to working families facing child care costs.
So in advance of other decisions that I make in the spending review, I can announce as a first step that for every employee, whatever their income level, employers will be able—as long as the offer is made to every employee—to provide free of both employee national insurance and income tax and free of employer national insurance £50 a week for approved child care.
I can also announce that we will respond to two other long-standing concerns: help with child care costs will now be available when approved child care is provided in the child's own home; and, after consultation, we will widen the definition and therefore the number of approved child carers for whom the £50 a week or tax credits can be offered. We now expect child care places to double from 750,000 in 1997 to 1.5 million by 2006, helping over 2.2 million children in our country.
In April, for the first time our country will pass a milestone in opportunity for our children: a nursery place guaranteed to every three and four-year-old—six months ahead of our planned schedule. But we know also that the most formative years are from the cradle to the nursery school. So for 500 communities in Britain, the Minister for Children will fund school-parent links so that long before schooling begins infants are introduced to early learning and books, and support is on offer in this way to parents. Building from and including Sure Start, neighbourhood nurseries and early excellence centres, I can confirm that over the next five years there will be 1,000 children's centres—children's centres that can become, for parents as well as children, as much a focus of community life as the local school, the local place of worship and the local park. Our goal is a children's centre for every community: this generation meeting its obligations to the next.
We will be judged not just by what we do for services, but by what we do for child benefits. So building upon the new child tax credit—at a cost of £1 billion a year—we will increase, from April, the child element not just by inflation or earnings, but by 13 per cent. an extra payment to be paid to 7 million children of £180 a year, an extra £3.50 a week. And because every child should be born into a world of opportunity, not condemned to poverty, maximum help for the first child—worth just £27 a week in 1997—will rise in April to £58 and, for two children, from just £44 a week in 1997, to £100 a week.
Before housing costs, a two-child family on half average earnings will now be better off than in 1997 by £75 a week—£1 billion more a year to meet, on this basis, our goal for 2004 to reduce child poverty by a quarter, as step by step, we halve child poverty by 2010 and eradicate it in a generation.
I have one final announcement. I stated earlier that, starting in April 2005, local authorities promoting enterprise can receive from central Government £150 million a year extra, rising to £450 million a year. But from April 2004 also, I am now able to do more for local council tax payers: to allocate across the United Kingdom, free of ring-fencing, for local authorities as they set their budgets, an additional £406 million—in England, £340 million extra—making the total available to English local authorities £3.6 billion more next year than this year: cash to meet the needs and concerns of council tax payers.
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Economic stability, enterprise and fairness and the strength to make the best long-term decisions for Britain—I commend this pre-Budget report to the House.
Mr. Oliver Letwin: I draw attention to the interests that are still listed under my name but are now outdated.
It is always a pleasure to listen to the Chancellor on these occasions, and it was genuinely interesting to hear what he had to say, for example, about the housing market and child care, which we shall all study in detail. But why is it that, so often, some of the most interesting bits of the Chancellor's pre-Budget reports never make it into his speeches? Why did he not tell us that table A5 on page 190 shows that the savings ratio has halved? Why, I wonder, did he not choose to tell us anything about the tax receipt figures or about the public spending figures in the report? Does he think that those figures are less important than stamping whisky bottles? We have learned that, with this Chancellor, one needs to look at the small print. I very much doubt, though, that even the small print will say that private sector employment fell last year, that we had a record trade deficit in the last three months or that household debt is now only slightly below our entire annual GDP.
The Chancellor has congratulated himself, with characteristic modesty, on the state of the economy and on meeting his growth forecast—it is indeed a remarkable event when the Chancellor meets one of his own forecasts—but the great question is, if the economy is doing so well, why is he borrowing so much? At the time of the last election, the Chancellor said that he would borrow £10 billion this year. Since then, in a series of reports, he has raised that projection to £15 billion, £24 billion and £27 billion. Today, he has finally admitted that he will have to borrow £37 billion this year. We will have to see whether that forecast proves any more accurate than its inaccurate predecessors.
The Chancellor will have been warned about families who borrow a huge amount on their credit cards, but he is doing the same on the nation's credit card. Why is he doing all this borrowing? Is it because, as the Chancellor is fond of saying, there has been a world economic downturn? No, it cannot be, because the borrowing of £120 billion, which he has just announced, between 2002 and 2006 is taking place after the worst of the downturn, against the background of world economy upturn.
The Chancellor cannot blame the rest of the world for his own borrowing, so what reason is there for the borrowing? Is it because he is not taxing enough? The pre-Budget report tells us that the Government are taking about 50 per cent. more in tax than in 1997. The Prime Minister's promise not to increase tax at all has not stopped the Chancellor raising the equivalent of £16,500 from every household in Britain. We have had 60 stealth taxes: taxes on jobs; taxes on families; taxes on homes; taxes on pensions; taxes on savings; taxes on drivers; taxes on businesses; and of course—the biggest stealth tax of them all—a huge rise in council tax. I grant that his tax revenues have not kept pace with his overoptimistic forecasts, but that is just about the only thing that they have not kept pace with.
The real explanation for the Chancellor's borrowing is not that he has been shy about raising taxes—it is the Chancellor's spending. The Chancellor is spending

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more than £50 million an hour. The saddest thing about the taxes that people are paying now, and the saddest thing about the taxes they will have to pay later to repay the Chancellor's borrowing, is that there is very little sign that all that spending is delivering improvements on the scale that everyone wants to see.
In the past seven years, the Chancellor has allowed spending on Whitehall bureaucracy to grow by almost 50 per cent. That is £6.7 billion a year of additional spending on administration. By the time of the next election, the right hon. Gentleman's open-wallet policy on bureaucracy will have cost the equivalent of about £1,500 in extra tax for each household in Britain. Even he knows that he has a problem. That is why he today, and his spin doctors all week, have been busy making noises about his so-called efficiency review, which is intended to cut back on the extra bureaucracy that he has created.
There is an even more serious problem, however. As my right hon. Friend the Leader of the Opposition has repeatedly told the House, the Chancellor is taxing and spending and failing. We have been promised reform of the public services for years but the reform simply has not happened. Why do the latest official figures show that since 1997 spending by the Government on goods and services has risen by 59 per cent. while outputs have risen by only 14 per cent? Why has 37 per cent. more spending on the NHS produced only 5 per cent. more hospital treatments? Why has the Chancellor been hiring managers in the NHS at three times the rate at which he has been hiring doctors and nurses? Why is inflation in the public sector running five times as fast as inflation in the household sector? Does the Chancellor really think that those figures represent value for money?
The Chancellor should have used this statement to announce a new direction for public services, with choice and responsibility transferred from bureaucrats in Whitehall to parents, patients and professionals. Instead, he has been proceeding on the basis that the only answer to failing public services is more bureaucracy, more targets, more plans, more performance monitoring and more taxes, and when that fails, borrowing today and more taxes tomorrow—except, of course, on amateur sports clubs.
The Chancellor's best defence against the accusation that he has taxed, spent and failed is that he has counterbalanced that with success in monetary policy. The Chancellor has built his reputation on the framework for monetary policy that he put in place in 1997. I have congratulated him on that in the past, and I do so again today. But I hope—[Interruption.]
Mr. Speaker: Order. Hon. Members must allow the right hon. Gentleman to be heard. The Chancellor was heard, and the right hon. Gentleman must be heard.
Mr. Letwin: I hope, however, that the Chancellor is not putting that well-deserved reputation at risk by the way in which, and the time at which, he is changing the inflation index, which is at the heart of that framework. He did not explain satisfactorily why he is changing the index now, when he knows that the harmonised index is
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likely to change in the near future to include housing costs. I hope that he is not doing that as part of his compromise deal with the Prime Minister on the euro—he needs that deal more than ever, now that he is breaching the Maastricht guidelines on borrowing. I hope that he is not doing it to make rises in council tax less visible. Council tax rises forced on councils by the Chancellor and by the manipulations of the Deputy Prime Minister are causing havoc. Council tax rises are the least acceptable face of the Chancellor's strategy for taxing Britain. What does the Chancellor do about it? He tells us today that he is proposing to use capping, which the Labour party derided when in opposition, and just in case that does not work he is imposing an index of inflation that includes no reference to council tax rises.
Can the Chancellor tell us what other implications the change in the index will have? He says that pensions, benefits and gilts will continue to be uprated in the same way as now. I suspect that those words were carefully chosen. What about tax allowances? What about indirect taxes? What about tax credits? I hope very much for all our sakes that the monetary framework will remain robust. It is not only the Chancellor's reputation that relies on that. Both the prosperity of the country and our own ambitious plans for public sector reform depend on a stable anti-inflationary environment.
But micro-economic policy—the policy that sets the framework for the economic decisions of individuals and businesses—matters, too. The Chancellor has talked today about savings and pensions. I note that he has not talked about his £5 billion a year raid on pension funds—or about the Prime Minister's explanation that that was fine because the stock market was in such good shape. I note that he has not talked either about the fact that his vast expansion of means-testing is making more than 50 per cent. of pensioners—and will in due course make more than 75 per cent. of pensioners—dependent on means-tested benefits. I note that he did not mention that a newly retired couple in rented accommodation now need to have saved more than £180,000 to avoid losing between 40p and 85p in the pound in reduced benefits at some time during their retirement. I note that he did not link this misguided, means-tested approach to the fact that the savings ratio has halved. I note that he did not tell us why his forecasts about the number of people who will be affected by his new cap on pensions differ so markedly from independent forecasts. I note, in short, that he did not tell us very much at all about how he is going to make good the damage that he has done to the culture of individual and family saving in Britain. If we are to avoid more and more people becoming more and more dependent on Government handouts in retirement, that culture of saving needs to be rebuilt.
What about the Chancellor's policies announced today for British industry? When the Chancellor addressed the Labour party conference this autumn—in a speech that the Prime Minister will remember—the Chancellor said that he would be using the pre-Budget report to promote "modern manufacturing strength". We will certainly want to look carefully at the measures that the pre-Budget report contains for manufacturers. But the Chancellor has made that kind of promise before. He told another Labour conference in 1995 that he would
"implement an industrial policy so that our manufacturing industries can grow again".

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Since then—or more precisely since the Government came to power—700,000 manufacturing jobs have been lost. The present Chancellor is the longest-serving Chancellor since Lloyd George, and his policies have seen Britain lose 300 manufacturing jobs for every day that he has kept his job in the Treasury.
One of the keys to manufacturing strength is productivity, which the Chancellor used to call
"a fundamental yardstick of economic performance".
So can the Chancellor tell us why it is that productivity has, on average, grown half as quickly in the six years for which he has been at the Treasury as it was growing in the six years immediately before? Has the Chancellor heard the British Chambers of Commerce say:
"British business has a clear consensus on how the Government could improve productivity in the UK: simplify tax and regulation"?
Why does the director general of the CBI say:
"It is clearly the case that the UK has become a more difficult place to do business than it was five years ago"?
The Chancellor uses set-piece occasions such as today's to tell us that he wants to simplify tax and regulation, but his actions contradict his words. If his announcements today were reality rather than rhetoric, why did he impose a fiendishly complex change in stamp duty land tax nine days ago? Why is he imposing 15 new regulations every working day? He has today announced that he will consider abolishing 147 regulations this year. Marvellous! At his present rate of regulating, it will take him 10 days to add that many back on to the burdens borne by business. As the Prime Minister would say, the Chancellor's ambitions are not ignoble. I believe the Chancellor when he says that he wants to improve public services, and I believe him when he says that he wants to improve the prospects for British business. But the sad truth is that his ambitions are not being fulfilled—at least so far as public policy is concerned. That is because, for all his talk of reform, he is—as his neighbour the Prime Minister knows—the biggest single obstacle to reform in Whitehall.
In this pre-Budget report, we should have had announcements on public service reform. Instead, we have unreformed public services from an unreformed Chancellor, who has taxed and spent and failed. The taxpayer is paying now for the Chancellor's spending and will pay more later for his borrowing—but the money is not buying anything like the services that it should be buying, because the Chancellor has placed his faith in a bureaucracy which, instead of exercising effective control, is itself out of control.
In this pre-Budget report we should have had serious measures to reduce the regulatory burden on British business. Instead, business is paying now and is set to continue paying in lost productivity and lost competitiveness as a result of the Chancellor's suffocating blanket of stealth taxes and red tape.
The people of Britain do not want the Government to borrow more on their behalf or to tax them more later to repay that borrowing. What the people of Britain want, and what our families, our pensioners and our businesses want is the prospect of some relief from the ever-increasing burden of tax and regulation. Instead, what this pre-Budget report offers them is the prospect of paying now and paying more later.
Mr. Brown: I have just found the answer to my sleepless nights. Just as I will not take advice from a shadow Chancellor who supported a Government during the last world downturn who ran 15 per cent. interest rates, 10 per cent. inflation, lost 2 million manufacturing jobs, and had 1.5 million people in negative equity, neither will I take advice from the shadow Chancellor and his party on levels of borrowing. For 16 of the 18 years of Conservative Government, they were in deficit; for 11 of those 18 years, the deficit was above 3 per cent; in the Conservative years under the Major Government, the deficit was 6 per cent.; and it rose to 8 per cent.—the equivalent of £80 billion at Today's prices—for two years in 1992 and 1993. Yet the shadow Chancellor has the audacity to try to lecture Labour Members about borrowing.
When borrowing is actually lower than it is in Germany, in France, in Japan and in America, why is the right hon. Gentleman so obsessed about the borrowing figures? There is one reason and one reason only:it is because, as he said in The Daily Telegraph yesterday, his aim is to cut spending. He is on record—he will not be allowed to forget this, because this is something that is at the centre of the pre-Budget report-as calling for a cut in public spending to 35 per cent. of national income, which is an £80 billion cut. The leader of the Conservative party is on record as saying that he wants to cut public spending to 35 per cent. of GDP. Perhaps an even more significant figure—the chairman of the Conservative party, Lord Saatchi—is on record as wanting to go back to the 1950s and to cut public spending to 30 per cent. I have to ask the Conservatives how many hospitals and schools and how many nurses and teachers will be lost.
The shadow Chancellor is wrong on savings. The savings ratio was lower under the Conservative Government in the 1980s. He is wrong on central administration. The costs of central administration were 4.9 per cent. of national income when we came to power; they are now 4.3 per cent. and they are falling to 4.1 per cent. We will take no lectures about the cost of bureaucracy from the party that gave us the poll tax, BSE and many other bureaucratic nightmares that we had to deal with when we came into government.
When the records are looked at, it will be found that the shadow Chancellor and his party have been wrong on every issue of economic policy. Let us remember that they opposed Bank of England independence, they opposed the minimum wage, they opposed the new deal, they opposed our symmetrical inflation target and they opposed our fiscal rules. Today, they are opposing an economic policy that has given us the best growth for the past three years of all the G7 countries and a level of public investment in services that has been surpassed by no one in the last 50 years. At the same time, we are dealing with the problems of investment and reform, and he seems to have forgotten the announcements that I made about reforms in the spending review coming up. The Conservative party was 18 years in government; it is going to be 18 years in opposition.
Dr. Vincent Cable: I am happy to start by acknowledging that, in some key respects, the Chancellor has a very good story to tell. We have low inflation and low unemployment and we have had steady growth and a respectable level of public debt.

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I am afraid, however, that in other respects the statement showed the Chancellor at his worst. He trailed a long stream of complex new tax gimmicks, adding to an already over-complicated tax system. I notice that he spoke even more rapidly than usual when he got to the very dodgy numbers on the Budget. The fact is that there are a lot of red faces in the Treasury about the red ink on the Budget. The number that he has come up with today—a £37 billion deficit for the current financial year—is £10 billion more than he expected a year ago.
How does the Chancellor reconcile his optimism on the golden rule with the assessment of the independent and highly respected national institute that estimated a few days ago that there is a 50:50 probability that he is going to break the golden rule over the cycle, to which he attached so much importance? Can he confirm the story in Today's edition of The Times that he has already written a letter to the European Commission explaining that he will have to break the Maastricht rule for the current financial year?
Is not the problem that, whereas the Government have established—they should be given credit for this—a secure and stable framework for monetary policy, that credibility does not exist in fiscal policy? The reason for that is that the Chancellor decides what assumptions he wants the auditors, the National Audit Office, to investigate. Why will he not throw the Government books open to a completely independent outside assessment?
It is clear from what the Chancellor said that the main reason for the widening deficit is a shortfall in taxation. He made no attempt to explain that. Will he try to explain why the shortfall is so large?
On the spending side, the Chancellor is quite right that the main problem is the Iraq war. On the figures that he gave today, which I understood to be a revised figure of £3.8 billion, is it not the case that the money will run out next September if the cost continues at the current rate of £200 million a month? Is not the brutal truth about this war that the activity that the Government embarked upon with the full support of the Conservative party has resulted in a situation in which British taxpayers will continue to have to pay large sums? Is there not truth in the adage that there is no such thing as a free war?
I have accepted, and I do accept, that there are positive elements in Government economic policy, but will the Chancellor be equally candid in accepting some of the failings? One of the failings is a serious imbalance in the British economy. Why, for example, did the right hon. Gentleman not say a single word about the trade deficit and the balance of payments? Would he not acknowledge that there is potentially a serious problem as a result of spiralling consumer debt and the possibility that that may result in a sharp downturn in spending? Does he not accept the Bank of England's analysis that the housing market is over-valued and could well deflate? Has the Treasury done any serious risk analysis of what could happen if such scenarios evolve? Will he publish it if it has?
In conclusion, may I ask another question? The Chancellor has built a reputation not just for competent economic management but for a genuine concern for
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social justice—probably rather more so than his next-door neighbour. However, can he explain why he now presides over a tax system in which the poorest 20 per cent. of the population pay 42 per cent. of their income in tax but the richest 20 per cent. pay only 44 per cent. of their income in tax? That is why the Liberal Democrats are making proposals not to raise tax, but to create a fairer tax system by lifting the burden of tax, particularly council tax on pensioners, and by asking the best-off people in society to pay a little more.
Before the Chancellor recites the lists from the Prime Minister about Liberal Democrat spending commitments, which the Prime Minister seems to have raided from conference resolutions going back to the days of Campbell-Bannerman, may I ask the Chancellor to face a straightforward question? Why is it unfair and damaging to the economy to have a 50 per cent. tax rate on earnings of more than £100,000—on the earnings of the likes of Lord Sainsbury, Steve Norris and even the Prime Minister—when it is perfectly reasonable, according to the Government, to have a 50 per cent. marginal tax rate on a graduate teacher who, under the Government's proposals, would pay the top rate of tax and another 10 per cent. in top-up fees. It is precisely the Government's lack of sensitivity to injustices and unfairnesses of that kind that is leading to so many of their supporters deserting them.
Mr. Brown: I have great respect for the new shadow Chancellor representing the Liberal party, and especially for the policies on social justice and the other items that he took with him when he moved from the Labour party to the Liberal party and in which he still believes.
Let me deal with the hon. Gentleman's individual points. As I said in my statement, we have submitted our report to the Commission today with a letter to the commissioner saying that, in our view, we meet a prudent interpretation of the stability and growth pact. We believe that a prudent interpretation is one that takes into account a cyclical adjustment of the borrowing.
On Iraq, we have set aside £2.5 billion this year and that is a very considerable amount of public spending to make possible the action that is taken at both a humanitarian and military level in Iraq.
On balance of payments, the hon. Gentleman should look at the figures that were published this morning that show a position that is better than people had expected. We do not have the balance of payments deficit that the Conservatives had in the 1980s.
As far as debt is concerned, I have had this debate with the hon. Gentleman across the Floor of the House. Although it is true that house price debt is at a high level, mortgage interest payments as a share of income are at a far lower level than in the early 1990s. In fact, they are half what they were in the early 1990s
As far as poverty is concerned—I think that our parties share a common approach on social justice and we want to ensure that more children are taken out of poverty—the hon. Gentleman must examine the tax system that we have developed. Although the top rate is 40 per cent., the bottom rate is minus 200 per cent. because the system is based on tax and benefit integration. That is exactly the sort of tax credit system

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that the Conservative party used to support and it is not too dissimilar from the earned income tax credit system in the United States of America. It allows us to pay people money from the Inland Revenue, especially for children, if their incomes are very low. I put it to the hon. Gentleman that the number of families with marginal deductions above 70 per cent. has been reduced under this Government and, indeed, we ended the situation in which people had marginal deduction rates of more than 100 per cent., which applied when we came to power.
The problem that the Liberals have when advocating their tax policies is that whatever they do with their 50 per cent. rate, they would find a spending gap of about £10 billion to £14 billion. That is why the former Liberal Democrat shadow Chancellor, who was replaced only a few months ago—he was probably replaced for saying this—said that
"simply proposing further spending and tax rises at this stage of the Parliament is unrealistic".
The Liberals then announced another 40 spending commitments and sacked their shadow Chancellor.
Mr. John McFall: May I commend the Chancellor for his focus on a sound economic framework and especially on low inflation rates, low interest rates and high employment? I especially commend him for his vision of this country's future with the announcement of full employment strategies and children's centres for every community. Too many adults and children in this country are still left behind, so we must urgently undertake such initiatives. Will he assure me that the initiatives will become a reality in every community and that they will be up and running in a year?
May I address the Chancellor as the chairman of the all-party scotch whisky group and tell him that there is already dismay in the Scottish whisky industry about the stamping of bottles? It is a £2 billion industry that is crucial to manufacturing, so may I have an assurance that he will work with me and the industry to ensure the unanimous introduction of the initiative? As chairman of the all-party group, I could then ensure that, on his sleepless nights, the Chancellor can get his tipple.
Mr. Brown: There will be 1,000 children's centres by 2008, which will include Sure Start centres that will be converted into children's centres. I believe that most constituencies in the country will have a children's centre as a result of that. My hon. Friend will want to work with the Minister for Children, who is developing the proposals, to ensure that his constituencies and others may benefit.
I am pleased that my hon. Friend is here to speak up for the Scottish whisky industry because the former leader of the Scottish National party has now disappeared from the Chamber.
Mr. Michael Weir: I am still here.
Mr. Brown: I look forward to the intervention.
I put it to the House that if one in six bottles of spirits are escaping duty, it is incumbent on a Government who have taken action on cigarette and other smuggling to take action on that. If the industry can come up with a better proposal to deal with the problem, we will
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consider it, but if it cannot come up with a better way to stop the erosion of duty we shall legislate for the stamping proposal in the next Finance Bill. If we have to do that, I shall work with the industry and the Economic Secretary will consult the industry on the most cost-effective scheme. At the same time, we would freeze duty on whisky and spirits for the whole Parliament. We understand the industry's difficulties, but it must work with us to eliminate such loss of revenue, which is completely unacceptable and based not on accident or avoidance, but simple fraud.
Sir Peter Tapsell: As someone who has denounced the growth and stability pact from the day that it was announced, may I congratulate the Chancellor on rather belatedly reaching the same conclusion, which permeated all his rather contemptuously worded comparisons of the international performance of other countries? May we take it from those statistics that France and Germany can be regarded as free to repudiate and break all their treaty obligations to other countries in the European Union from now on?
Mr. Brown: If the hon. Gentleman is saying that the stability pact should reflect the economic cycle, deal differently with countries with low debt than those with high debt, and take account of the needs of investment in our economy, I agree with him entirely—we have advanced that view to the European Union. If he is inviting me to take his advice on every possible occasion, I should remind him that he objected to Bank of England independence. He said that
"it will make the efficient …management of"
the economy
"more difficult, lead to higher levels of unemployment than are necessary and diminish the …prestige of the Bank of England".—[Official Report, 11 November 1997; Vol. 300, c. 763.]
I think that he was wrong.
Mr. Martin O'Neill: I congratulate my right hon. Friend on yet another successful report. I especially welcome what he proposes to do to help small businesses to bridge the investment gap at the same time as offering assistance for bridging the skills gap, which we know is vital for many of our businesses and people. How have circumstances changed on the stamping of whisky bottles? The Treasury rejected that proposal as irrelevant and an undue burden on the industry 18 months ago. Has there been a dramatic change of circumstances or is the measure the Treasury's last card in the pack?
Mr. Brown: New information on trends in the fraudulent evasion of duty on whisky and spirits shows that one in six bottles are evading duty. No Government can or should ignore that and I am sure that my hon. Friend agrees that we have to take action. We did not want to implement the measure when it was proposed in the Rogues report because we did not want to create additional demand on the industry or Customs and Excise. However, evidence shows that one in six bottles are subject to such fraud and we propose that stamping is the best way to deal with the problem, although I am equally happy to listen to alternative proposals from the industry. I repeat that if the measure is introduced, it will

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be our aim to introduce it cost-effectively. We would work with the industry to achieve that and consult on freezing whisky and spirit duty as well. We would not have wished to take such action, but if my hon. Friend looks at the evidence he will see that it will be necessary unless an alternative course to guarantee the end of such widespread evasion of duty is found.
Mr. Michael Fallon: Given that the rise in education spending that was announced last month was premised on a 2.3 per cent. rise in teachers' pay, will the Chancellor confirm that the new 2 per cent. pay guideline that he is giving to the teachers review body today means that teachers' pay rises will be cut to pay for the mismanagement of the public finances?
Mr. Brown: I thought that the hon. Gentleman was against pay policy working in such a way. I told the House that I was informing the pay review bodies for the first time that the new inflation target is 2 per cent., as he would expect me to do. It is for the bodies to make recommendations and negotiations will take place in other areas to resolve pay. One of the interesting features of the past few months has been the fact that expected rises in average earnings have not happened in the way that was perhaps forecast in the Budget, so average earnings in the economy remain generally low. With low inflation, there is no need for inflationary pay settlements.
Mr. Tam Dalyell: Has it occurred to the Treasury that with the £2.5 billion that the Chancellor has set aside for Iraq, it could get half a dozen Scottish Parliament buildings? What figure has been set aside for Iraq next year—2004?
Mr. Brown: The additional figure that I announced today is £300 million. There is money in the special reserve and I shall write to my hon. Friend about the full amounts involved.
Mrs. Gillian Shephard: Will the Chancellor give further details of his proposals for green fuels? When he talks about green fuels, is he referring to biofuels, and does he think that his measures will enable the Government to meet their own targets on reducing CO2, emissions and creating a sustainable energy policy for the UK?
Mr. Brown: Although I have not read the right hon. Lady's book, I appreciate her work on pursuing green fuels and a better environment. We intend to work towards those targets. The measure that I announced today is a new form of consultation and preparation for the industry, and we are talking about biofuels. The aim is to ensure that there is such advance notice of any change and any incentives for the use of a particular type of fuel that the industry is able to respond and the full benefit goes to both the environment and the consumer very soon after the introduction. I think that the right hon. Lady will agree that when such initiatives were taken in the past, insufficient time was given to prepare the industry so that it could make available the types of fuel that were being given the incentives, and consumers
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did not always get the deal that they expected. What I propose is a form of consultation, and I or my hon. Friend the Economic Secretary will be happy to talk to the right hon. Lady about the details.
Ms Sally Keeble: I welcome my right hon. Friend's statement, particularly the commitment to stability, which is the single most important benefit that the Government can provide to my constituents. I especially welcome the new deal for skills, because a skills shortage is the biggest barrier to growth in my constituency. Will he confirm, first, that there will be no glass ceilings—or, indeed, floors—in the new deal for skills, so that people can get access to skills training across the spectrum; and, secondly, that steps will be taken to ensure that everyone has access to skills training, particularly the large number of working women in my constituency?
Mr. Brown: My hon. Friend takes a huge interest in these matters. It is our intention to give people, whether they are in work or out of work, the opportunity to get the skills necessary for them to succeed and for us to succeed in the new global economy. The courses offered go right up the skills grades, but, equally, our priority is to reach the 5 million adults who do not have reading skills and the 7 million or 8 million adults who lack numeracy skills to ensure that they have the skills necessary in a modern economy. Although the employer training pilots extend to a number of different skills and the university for industry offers courses that go right up the skills ladder, we must deal with the big problem that too many of our citizens lack the skills necessary for them to get jobs. I hope that my hon. Friend agrees that the priority in money terms should be on the adult skills programme. However, a range of courses is now rapidly becoming available, including trade union learning courses—I applaud the trade unions for their efforts to improve skills learning in this country—and we wish to expand them in years to come.
Mr. Elfyn Llwyd: First, I congratulate the Chancellor on the child care provisions and help for small businesses that he has announced, and on the relocation of jobs from the south-east, for which we have been pressing for some time. In support of some of his arguments, the Chancellor referred to the Office for National Statistics report. The ONS forecast for Wales is that gross value added per capita will fall to 74.9 per cent. by 2010. It was 88 per cent. in 1998. The Government's target for Wales is 90 per cent. Which announcement today will help to close that gap?
Mr. Brown: The main feature of the Welsh economy on which I thought the hon. Gentleman would congratulate the Government is the big rise in employment that has occurred in the past few months. I believe that 100,000 more people are in employment in Wales than were when we came into power.

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[Interruption.] The hon. Gentleman is saying that more employment is not relevant to a country's economic growth—
Mr. Llwyd: The right hon. Gentleman is not answering the question.
Mr. Brown: We get economic growth by creating employment and opportunities. If the Welsh nationalists do not realise that, they are not fit to go before the electorate.
Mr. George Mudie: One of most important and ambitious Government targets is to abolish child poverty. The Chancellor's announcements on child care are extremely important because they will allow families to take significant steps to increase their income, and his breathtaking increase in child benefits will significantly help us to meet our target. Those measures, combined with the child bonds that we are to debate on Monday, ask the House to congratulate the Chancellor on the steps that he has taken. At risk of being impertinent, does he feel that those steps will allow us to meet our target early?
Mr. Brown: The first target is for 2004, which is not far away. With the extra £1 billion that we are spending, we are determined to take thousands of people out of poverty, before housing costs are taken into account. The real tragedy of the past 20 years in our country is that for 18 of them—from 1979 to 1997—child and family poverty was allowed to increase, so little was done about it, and such an uncaring attitude towards it was taken. Our proposals are not only for wealth, through the Child Trust Funds Bill that my hon. Friend the Financial Secretary will introduce on Monday, but for child benefits, with an additional £3.50 a week from April for 7 million children—not all children—in low and middle-income households in this country. It was possible for us to argue that, during a world downturn, it was too difficult for us to make that additional investment, but I am pleased that there is support from all parties other than the Conservative party, and I hope that, in time, the Conservatives will come to support taking the action that is necessary to reduce child poverty. I hope also that 10,000 children in every constituency in this country will benefit from the change and that it will prove to be a means by which we reduce child poverty. I would like a consensus in the House and in the country on the fact that the best investment for the future that we can make is an investment in our children. I believe that that is what the country wants us to do.
Mr. Edward Leigh: The Finance Act 1998 allows for the Treasury to invite the Comptroller and Auditor General to report on the assumptions underlying the fiscal projections. The trouble is that the Comptroller and Auditor General can report only on the specific assumptions, not on the projections that result from their application. Would not it be a fairer, more transparent and better system if the Chancellor gave the Comptroller and Auditor General full freedom and independence to specify which assumptions he should audit? When will the Chancellor give the Comptroller and Auditor General that freedom?
Mr. Brown: It is interesting that the hon. Gentleman proposes that new direction in both fiscal policy and the organisation of the public finances. Before Labour came to power in 1997, there was no transparency in the system. The assumptions that we are having audited include the unemployment assumption. When they were in power, the Conservatives put in any figure, which is one of the reasons why the public finances got out of control. In addition, they assumed indirect as well as direct cost savings from spend-to-save schemes and figures were put into the documents that had no basis in fact. We have introduced a series of audited assumptions—we have them audited by the National Audit Office—which include unemployment, revenues from VAT, and the trend rate of growth. I think that the hon. Gentleman should applaud us for having a far more open and transparent system of decision making. Perhaps it is time he got his party to get up to date with some of these things.
I applaud the Chairman of the Public Accounts Committee on one thing: he is a known supporter of the new deal and has said that it reduces youth unemployment. I hope that he will persuade his Front-Bench colleagues to abandon their policy of abolishing the new deal.
Mr. Barry Gardiner: The Chancellor has rightly identified the scourge of child poverty and spoke in his report of the reliefs that he has extended for community amateur sports clubs. In the run-up to the Budget, will he investigate the possibility of giving employers incentives to run schemes similar to the ones that he has considered for children, so that the employers of workers who are able to benefit from gyms and exercise in the workplace, perhaps during the lunch break, can benefit from incentives? Obesity in adults as well as in children is also a scourge of this nation.
Mr. Brown: This is in danger of becoming a very expensive afternoon. It is difficult to calculate the cost of accepting my hon. Friend's representations. However, I agree that we must do more in respect of preventive health programmes. The lottery providing money for fitness centres was a good thing to do. As the discussion document on the next 10 years that the Government produced a few days ago said, we shall consider how to encourage and incentivise people to improve their personal health, because doing so results in less pressure on the national health service.
Sir Robert Smith: As much oil and gas remains to be exploited under the North sea as we have extracted to date. If those oil and gas resources are exploited, they provide vital revenue to the Chancellor, but if they remain under the sea, that revenue is forgone. Many jobs in my constituency depend on investment in the North sea, as do 240,000 jobs throughout the country. How does the right hon. Gentleman plan in the Budget to encourage greater exploration and appraisal, to ensure that we maximise the benefit that we get from our North sea oil and gas?
Mr. Brown: I agree that the investment incentives in the North sea for all companies have increased as a result of the changes that we made only last year.

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Equally, I think that the hon. Gentleman will applaud the fact that we have made new arrangements with the Norwegian Government so that gas from the Norwegian sector can be properly dealt with in the British sector and create jobs in Britain for the British economy. The hon. Gentleman is right that many fields in the North sea are not fully exploited. New companies must be attracted, perhaps with different technologies, to enable them to release oil resources for Britain's economy and the betterment, through tax revenues, of our society. That is why we propose to provide an incentive towards the costs of exploration for new companies that have not hitherto operated in the North sea, but which either have the technology or are developing it, enabling us to get at difficult reservoirs of oil in the North sea. The hon. Gentleman has a big constituency and economic interest in this issue, so I hope he will welcome the final detailed proposals in the Budget.
Alan Howarth: My right hon. Friend fairly drew attention to the striking contrast between the healthy and sustainable growth of the UK economy and the torpor of the eurozone economies. When does he anticipate that the European economic affairs Commissioner will announce his conversion to my right hon. Friend's sensible interpretation of the stability and growth pact, and does he agree that the persistence of slow growth in the eurozone contributes significantly to structural imbalances in the global economy and the associated perils?
Mr. Brown: My right hon. Friend has always taken a big interest in these matters. Once Europe looks at what it needs to do to face up to the challenges of the global economy, not only will the stability and growth pact changes that we have proposed be more acceptable to people but, at the same time, economic reform in Europe will move further and faster. A new social dimension that takes into account the need to get people back to work—there are 14 million unemployed—will also be taken up, and we will not have proposals such as those introduced in the past few months on VAT and corporate tax harmonisation. I therefore agree that we need to do more in a European economic strategy to get growth, and I believe that many of my Finance Minister colleagues in Europe accept that. I believe that when the Irish presidency starts in January further proposals on economic reform will be introduced.
Mr. Andrew Mitchell: Will the Chancellor of the Exchequer help us all out by confirming, notwithstanding the more than 60 tax increases made during his time as Chancellor and rocketing levels of council tax, that he is still planning to borrow from the markets over the next three years nearly £100 billion?
Mr. Brown: The hon. Gentleman's opening remark is contentious. If he looked at what he called 60 tax rises, he would see that many of them are tax avoidance measures. Is he telling me that he would not support measures to deal with tax evasion and tax avoidance in this country? Are the Conservatives saying that they
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would never have introduced many of the measures among those 60 increases? As for borrowing, I am not going to take any lectures from the Conservative party about that. It borrowed the equivalent of £80 billion and raised the national debt to 44 per cent. of GDP. It took a Labour Government to come in and sort out the problem.
Lynne Jones: Given the historically low level of net public sector debt under my right hon. Friend's chancellorship, but also the congestion on our roads and the associated break in economic growth and the shortage of affordable housing and the misery that that causes, would it not be prudent for him to budget for substantial and sustained investment in our transport infrastructure and council housing, the most efficient form of affordable housing? Is not an increase in the supply of council housing, which could be made available to economically active families of modest means, the best way of combating the stigmatisation of council housing, which was referred to in Kate Barker's report?
Mr. Brown: If my hon. Friend looks at the detail of the pre-Budget report she will find that in the past few years, and until 2006, we have been doubling public investment, doubling investment in housing and doubling key transport investments. The Government are prepared to make the necessary investment and, in the case of the national health service, ask people to pay a higher rate of national insurance so that we can do so. Those are the right decisions for the future of the country. That is the difference between the Government, who will make those investments, and the Conservatives, who have a policy of cutting public expenditure to 35 per cent. of national income and would make an £80 billion cut in public expenditure. They should be ashamed of themselves.
Mr. Nick Gibb: Table C4 of the Red Book shows net debt for 2003–04 of £27 billion. The Chancellor has now announced that that figure should read £37 billion—£10 billion higher. The rest of the five-year projections are £7 billion, £7 billion, £5 billion and £2 billion higher, making a total of £31 billion higher. Can the Chancellor explain why those figures have been revised upwards by so much in just nine months, and what would they be if they included all the private finance initiative liabilities?
Mr. Brown: First, on the PFI liabilities, we do exactly the same as the previous Conservative Government in assessing public-private partnerships and the responsibilities for off-balance sheet borrowing. If the Conservatives are now telling me that they regard every PFI project as an on-balance sheet project and that in their plan to cut public expenditure to 35 per cent. of GDP they want to cut out every PFI project as well, they are announcing a new policy today. As for the figures mentioned by the hon. Gentleman, I shall look at them. He mentioned net debt, but I think that he was talking about net borrowing. The figures for net borrowing are exactly as I announced in the pre-Budget report to the House this afternoon. There are detailed figures, both on the numbers and percentage of national income, and he should agree that while debt in other countries is

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rising to 50 per cent. and even to 80 per cent. in Japan, our debt is roughly a third of GDP, rising to, I think, 35.5 per cent. at the end of the cycle in 2008.
We have the best record on debt of the G7 countries, because we made difficult decisions, which the Conservative party would not have made, to reduce debt when we came to power and use the spectrum sale, which it would have used for other purposes, to cut debt further. That is why we have low debt interest payments, and why our record of economic management is very different from the failures of the Conservative years, for which the Opposition should still be apologising to the country.
Mr. George Foulkes: The Chancellor's measures for children will be welcomed as much by grandparents as by parents. However, will he confirm that all the measures, including the children's centres, apply as much to Scotland and Wales as to England? If not, will he have discussions with the devolved Administrations to ensure that they do?
Mr. Brown: All the measures on children's benefits apply to the whole United Kingdom, so the £3.50 rise is for 7 million of 12 million children in this country, and will mean £180 per child, whether in Scotland, Wales, Northern Ireland or England. As for the measures on children's centres, that is a matter for the devolved Administration in Scotland, but my right hon. Friend will notice that at the end of my statement I announced £400 million more for UK public spending and £340 million for England. There is an element for Scotland. Wales and Northern Ireland. The Scottish Executive will decide how Scotland's money will be spent, but I know that it wants to invest in children's services. As for tax relief on child care, national insurance and income tax would no longer be paid on that £50 by the employer or the employee, and the measure will be applicable to the whole United Kingdom.
Mr. Quentin Davies: The Chancellor congratulated himself this afternoon because, while the cost of pay-as-you-go national pension schemes on the continent have, in some cases, reached 15 per cent. of GDP, the equivalent figure here is 5 per cent. However, that 5 per cent. is another characteristically bogus Labour statistic, and the Chancellor must know—he certainly ought to—that it makes no provision at all for the cost of the pension credit, housing benefit and other benefits, the burden of which is growing a great deal, as more pensioners become increasingly dependent on means-tested benefits. Will he tell us what the real figure for the state's liability for pensions is? It certainly is not 5 per cent. Am I not right in thinking that it is about 10 per cent.?
Mr. Brown: The hon. Gentleman, not for the first time, is totally wrong. Pension expenditure and pension credit expenditure are included in the 5 per cent. figure that I announced. He is wrong to allege that we deliberately excluded pension credit expenditure from it and that we are misleading anybody about this. He should know that if one links pensions to earnings, one has a bill to pay not just in this Parliament or the next Parliament, but right across the board. That is why it is
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appropriate to count the exact cost of meeting that bill not just in one Parliament, but right across to 2050. If the hon. Gentleman looks at the figures—perhaps he has not done so—he will find that there are deficits that arise from that, which are of the order of 3 per cent. of national income for that one item alone.
That may be why the shadow Secretary of State for Work and Pensions said that "many campaigning pensioners would like to see the earnings link restored…it is not affordable and would not be well targeted…It is a wild and uncosted policy, so it is a dangerous intervention to support it." Those are the words of the shadow Secretary of State for Work and Pensions about the pensions policy of his party. It is interesting to note that the shadow Chancellor says that he does not have a clue how it can be funded. The Conservative party should go back to the drawing board.
Mr. Andy Reed: I am sure that many Labour Members, in particular, welcome the stability in the investment in public services. As my right hon. Friend knows, I have a keen interest in sport and as a rugby player still every Saturday afternoon, and it gave me almost as much pleasure hearing a Scot congratulating the England team as it did being in Trafalgar square on Monday.
On the extension of community amateur sports clubs, although it is important that that tax relief is included, will my right hon. Friend take representations between now and the Budget on increasing the amount of Exchequer funding for sport? We have seen the effect of improving sport at national level, but we need to do that at community level. By supporting community amateur sports clubs throughout the country, we can make a real difference to obesity and the nation's future.
Mr. Brown: I said that this was turning out to be an expensive afternoon. My hon. Friend should be praised for all the work that he has done. It is in no small measure due to his efforts and the efforts of his colleagues in the all-party group on sports, which considers these issues, that the 80 per cent. rate relief has now been given to community amateur sports clubs. I am able to announce today the corporate tax exemptions that will enable more sports clubs to have greater resources to devote to sports and to the community.
I was lucky enough to meet many members of the England team at No. 10 Downing street earlier this week. The Leader of the Opposition was there as well. He seemed to come in the front door, not the back door. From talking to Clive Woodward, the coach who deserves so much praise for his leadership and recognition for what he has done, it is clear that he wishes to see the rebuilding of sports at an amateur and community level. There is enormous good will in the country for what my hon. Friend is recommending. In the course of the spending review, we will look at what we can do for school sports and community sports. I hope he will agree that we have made a good start today by providing better help for 100,000 sports clubs. That, as I said, is probably 100 sports clubs in each of our constituencies.
Several hon. Members Several hon. Members rose—
Madam Deputy Speaker (Sylvia Heal): Order. We must move on to the next statement.

Benefits Uprating and Welfare Reform
2.3 pm
The Secretary of State for Work and Pensions(Mr. Andrew Smith): With permission, Madam Deputy Speaker, I should like to make a statement on benefits uprating and the employment measures in the pre-Budget report.
On uprating, I can confirm that national insurance benefits will rise by the retail prices index—2.8 per cent. From next April, retirement pension will go up by £2.15 a week for single pensioners and £3.45 a week for couples. When we came to office, the pension was just £62 a week for a single person. From April it will be £79.60 and £127.25 for couples. In keeping with the Government's aim to provide extra help to poorer pensioners and those who have saved, the pension credit guarantee will rise in line with earnings by over £3 to £105.45 a week for singles and by over £5 to £160.95 for couples. The threshold for the savings element will rise in line with retirement pension. That means that a typical single pensioner will now gain from pension credit on income up to £144 a week, and £212 for a couple.
I am pleased to report that last month, an extra 106,000 pensioners received pension credit. By the end of November more than 2.4 million pensioners were benefiting, with an average household award of £46.40 per week. The application line continues to work well, with 96 per cent. of calls answered within 30 seconds. Each week more and more pensioners are getting this extra money. All of them will gain from the increases I have announced today.
As my right hon. Friend the Chancellor set out, the child element of the child tax credit will rise by £3.50, benefiting 7.2 million children. That means that, by September next year, a single-earner family on half average earnings with two young children will be £3,750 a year better off as a result of all our measures, compared with 1997.
For the fourth year running, non-dependent deductions in income-related benefits will be frozen, benefiting around 180,000 claimants. Most income-related benefits will rise by the Rossi index—1.8 per cent.—in the normal way. I shall place details of the uprating in the Vote Office and arrange for figures to be published in the Official Report.
As well as security for those who cannot work, we are continuing our drive to help into work all those who can. Despite the downturn in the world economy, employment in the UK has continued to grow. We now have more people in jobs than ever before, and for the first time in nearly half a century, the highest employment rate and lowest unemployment rate of the major industrialised countries. That has happened not by accident, but as a result of deliberate choices for economic stability and a new approach to welfare. As the paper entitled "Full Employment in Every Region" which is published today shows, our approach is working. The UK labour market is diverse and flexible. We are better placed than our European competitors to adapt quickly to changes in the global economy.
Through our investment in the new deal and Jobcentre Plus, we have tackled the legacy of mass unemployment. Long-term unemployment, particularly
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among young people, has been slashed. With 1.7 million more people in jobs, and nearly 700,000 fewer on unemployment benefits, we have saved £5 billion on the costs of economic and social failure. Some suggest that the new deals should be abolished, but those figures show that that would be the wrong thing to do. The new deals have helped over 900,000 people into work. Independent research shows that the programmes can pay for themselves. The new deal for lone parents alone is saving the Exchequer £40 million a year.
Even the strongest labour market will have some people who do not connect with the world of work and who will need extra support to move into jobs. Although the numbers moving on to incapacity benefits each year have been reduced by a quarter since 1997, there remain 2.7 million people largely excluded from the labour market, at huge human and economic cost. A large number of them want to work and could work, if given the right help and support to do so. Last year I announced new measures to help them re-engage with the labour market.
The pathways to work pilots, combining work support, rehabilitation and financial incentives, are already under way in Derbyshire, Bridgend and Renfrewshire. Further pilots start next April. I am regularly updating MPs in pilot areas on progress and have been encouraged by the keen interest shown by hon. Members in this groundbreaking initiative. As part of the pre-Budget report, we are announcing that some basic elements of this approach will be extended from next April. Everyone on incapacity benefits will have voluntary access to support from a personal adviser.
Although our programmes have helped 230,000 lone parents into work since 1997, we want to do more. Research shows most lone parents want the choice of combining paid work with the vital job of bringing up a child, but they face many barriers along the way. One of the biggest barriers is child care. That is why we have created places for more than 1.3 million children since 1997. From next April, we will be piloting better use of school facilities outside school hours and in the holidays to provide affordable child care targeted at lone parents.
Today's pre-Budget report goes even further, with new measures to encourage employers to provide affordable child care, which my right hon. Friend the Chancellor has just set out; free child care for all those on the new deal for lone parents in the week before they start work to help them to make that transition; and free child care for lone parents undertaking work search activity in 12 pilot areas. As we remove those barriers, we will do more to help lone parents find work. Today I can announce extra job search support for parents with older children to help them prepare for the labour market and compulsory action plans for all lone parents.
As well as making work possible, we need to make sure that it pays. From next October, lone parents in a number of pilot areas who move into work will have their wages topped up by £40 a week for a year. We know that workless families in London face especially high housing and child care costs, which mean they can often find themselves little better off in work than they were on benefits. So today I can announce that we will extend the £40 a week top-up across the capital both to

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lone parents and to couples with children who have been on benefit for more than a year, making sure that work pays.
As my right hon. Friend the Chancellor said, we will also offer extra support for all jobseeker's allowance claimants aged 25 or over by piloting a mandatory, intensive work-focused course at the six-month stage of unemployment, as well as by providing extra help for those on benefits to enter self-employment. To improve the choices available to older people, those in receipt of pension credit will be able, on a voluntary basis, to access the full range of our employment programmes.
Together, today's PBR measures build on our successful approach and help to continue our drive to full employment in every region. For all those excluded from the labour market, housing benefit reform has an important part to play. From April 2004, people on housing benefit who move into work will no longer be required to submit a full new claim. We have started pathfinders of the local housing allowance in the private rented sector to be introduced in nine areas, allowing people to know in advance what benefit support they will receive. As soon as we can, we will apply a similar approach in pilots in the social rented sector. That will promote greater choice and responsibility and bridge the gap between benefit and work by allowing tenants to budget for their own rent.
In conclusion, today's statements show that this Government are delivering on our pledge of work for those who can work and security for those who cannot. Our measures will ensure that we make further in-roads into child and pensioner poverty, extend the opportunities of disabled people and reform welfare so that rights, responsibility and opportunity go hand in hand.
The House and the country will have noticed how few Conservative Members considered the war against poverty to be an issue meriting their attendance in the Chamber, although the six who are present have now neatly grouped themselves on the Opposition Benches. By contrast, Labour Members are determined to win the war against poverty. Our reforms are creating a labour market that works for the many and not the few and which achieves our goal of full employment throughout the UK—social justice and economic strength together, which is a central purpose of Labour in government.
Mr. Nigel Waterson: I thank the Secretary of State for his usual courtesy in providing an advance copy of his statement to me. I should perhaps also declare my interest, in that I have some private pension provision.
Of course, I noticed the Secretary of State's comment about how many Benches are filled, but I also notice that there is a considerable doughnutting of Government Members around him, and very few of them are out of camera shot. I should like to pass on the apologies of my hon. Friend the Member for Havant (Mr. Willetts); sadly, his flight was cancelled and he is therefore unable to be present. The House will have to make do with one brain, as opposed to two brains.
May I inquire of the Secretary of State why this statement has been made on the same day on which the Chancellor's report has been put before us? It is normal practice for the statement to be made a day or so later. Is this a good day for burying bad news or very little news?
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The Secretary of State had little or nothing to say about the Child Support Agency. Will he please update the House about the implementation of the new model? How long will people have to wait for the new computer system to work properly and for old cases to be migrated to the new system? Does he share my alarm about the evidence on this subject recently given to the Select Committee on Work and Pensions?
Will the Secretary of State also advise the House what steps he is taking to increase the take-up of council tax benefit, which continues to have the lowest take-up of any benefit? The matter bears heavily on older pensioners in areas where council tax has risen sharply, and especially the south-east, in large measure due to Government policy.
I continue to be impressed by the Secretary of State's touching faith in the effect of the new deal, but he rightly conceded that there are still far too many economically inactive people in this country. Will he also advise the House whether he shares my disappointment and that of many disability groups about the continuing lack of success in helping people with disabilities back into work? We know that about 1 million disabled people would like to work, but they are too often deterred by the artificial barriers in the system. Will he please dispel the anxieties caused by recent press leaks suggesting that the Government are going to have a major crackdown on benefits for people with disabilities?
Of course, we welcome any uprating in benefits. We will certainly not follow the example of the Liberal Democrats, who memorably voted against any uprating a couple of years ago. I noted what the Secretary of State had to say about inflation, but will he please give a cast iron assurance that the changes to the inflation index about which we heard will have no detrimental effect on the uprating of the benefits and that the existing inflation measure will continue to be applied to upratings for the foreseeable future?
We will be very interested in the outcome of the housing benefit pilots to which the Secretary of State alluded. We welcome at least some of the measures to improve child care and access to employment advice for older people, although this Government's record on age discrimination has generally been pretty dismal.
We continue to be in the midst of a severe pensions crisis. A dreadful situation is faced by pensioners who have lost everything because their company has gone down and taken their pension fund with it. Will the Secretary of State tell the House how far the Government have got in trying to find ways of compensating those workers? When will we see the pensions Bill? Will it be this year or next year? Many anxious current and future pensioners will be hanging on his answer.
May I also ask the Secretary of State about the pension credit, about which he had a great deal to say? The latest figures on its roll-out have only just been published. They show that there are still only 106,000 new claimants. The total number benefiting is still less than half the number who are eligible. That is hardly surprising given the recent Daily Express poll showing that a third of all older people had not even heard of the pension credit. More than half had no idea how the system worked or how the system worked or how they should claim their money. Nor should anyone be surprised about that. We have

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tried to tell the Government that the new system is too complex and involves too much intrusive means-testing, and that many pensioners will be deterred from applying as a result. Indeed, the Government themselves have set a target—it was confirmed the other day by his junior Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle)—under which 1.4 million of the poorest pensioners will not claim at all. Can he please confirm that that is still his working assumption?
Of course, Opposition Members would encourage all our constituents who are entitled to apply for the credit to do so, but we fear that the Government will not hit even their own modest targets. It will be a lasting legacy of this Government that they will have raised the proportion of means-testing from 38 per cent. in 1997 to 60 per cent. and even more. The Secretary of State and his Ministers should be worried by the increasing level of anecdotal evidence about the practical difficulties of telling people about this complex new system.
The other day, people from the citizens advice bureaux told me that they are starting to hear stories about the 20-minute phone call that we have already heard about taking as long as an hour or an hour and a half. Those may be isolated cases—I would be the first to concede that we are at an early stage—but if not, it is deeply worrying.
Can the Secretary of State tell me whether he intends to raise the pension credit in line with earnings or with prices in the next Parliament, if this Government should survive? Incidentally, the Minister for Pensions, the hon. Member for Croydon, North (Mr. Wicks) sought to rubbish the independent actuarial advice that we received, which said that a couple would have to save £180,000 during their working lives in order not to be reliant on means-tested benefits. If the Secretary of State does not accept that estimate, will he give the House his figure? Surely, he must have one.
Would it not be a lot simpler and much better for poorer pensioners if the Government were to adopt the Conservative party's policy—which has considerable support among Labour Members of restoring the link with earnings? They need to roll back means-testing, restore dignity to pensioners and, above all, ensure 100 per cent. take-up of pension credit.
Mr. Smith: Let me go through those points in order. The hon. Gentleman's point about the timing of the uprating statement is utterly trivial. If he had done even five minutes' research he would have noticed that last year it was made before the PBR and that in many previous years it took place on the same day because of the overlapping content of the two statements.
On the Child Support Agency, if the hon. Gentleman had studied the second quarterly report that we issued, he would have seen that the rate of case clearances of some 40,000 was three times that of the first quarter. Although the performance of the new computer system has been unsatisfactory, it is improving, but clearly needs to improve further. The hon. Gentleman referred to the Select Committee on Work and Pensions, with which we will of course work closely. It is important that it has a full report on what has gone wrong with the new
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system, whose fault it is, what is being done to put it right and when it will be working properly; and I will make it my business to ensure that it gets that report.
The hon. Gentleman mentioned take-up of council tax benefit just a few breaths before he derided the pension credit—yet the pension credit, and our promotion of it, is increasing eligibility to council tax benefit and housing benefit, because some 1.9 million pensioners are either getting more support or getting it for the first time.
The hon. Gentleman said that too many people are on inactive benefits. If the Conservatives really want to help those people, whether they be lone parents on income support or disabled people and those who have suffered ill health on incapacity benefit, they will not do it by abolishing the new deal—they will do it only by extending it. Whatever the hon. Gentleman says about the new deal for disabled people, it has helped 20,000 disabled people into work, thereby transforming lives. We need to build on that help, not abandon it, as the Conservatives would.
The hon. Gentleman queried the link between benefit increases and inflation in the future. To repeat clearly what the Chancellor said, pensions will continue to be uprated with the retail prices index and, during this Parliament, pension credit will be uprated with earnings. The introduction of the new measure for Bank of England inflation-targeting purposes makes no difference to that whatsoever.
The hon. Gentleman asked about the pensions Bill. That is a very important measure to boost occupational pension security, to help people to move more flexibly into retirement and generally to improve provision for people who are planning for their later years. The Bill will be brought before the House as soon as it is ready. The hon. Gentleman would not expect us to do so before it was ready—indeed, I suspect that he would be at the forefront of our critics were we to do so.
I was interested that the hon. Gentleman did not mention—perhaps he has not had time to see it—the important announcement made today by the Inland Revenue in association with my right hon. Friend the Chancellor's statement, whereby we are inviting the National Audit Office independently to scrutinise our assumptions on the 1.4 million cap. This whole package of radical simplifications—rolling eight tax regimes into one and more access to 25 per cent. lump sums—will lead to a terrific reduction in costs. I would have hoped that the hon. Gentleman and his colleagues might welcome that in the interests of building a consensus, but we heard nothing about it.
On pension credit, the hon. Gentleman was, unwisely, tempted to deride my figure of 106,000 extra recipients. Perhaps he had not noticed that that was just for the month of November. Take-up is accelerating and going very well, and I am confident that increasing numbers of pensioners will receive pension credit and that we will beat the 3 million figure that the shadow Secretary of State said that it would take us six or seven years to hit. We will do it much quicker than that.
The hon. Gentleman referred to his party's proposals. The whole country must know by now that his and his right hon. and hon. Friends' sums simply do not add up. Even on their own figures, they would have a £500 million black hole by year four and need £10 billion

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more within 10 years. No wonder the shadow Chancellor had to admit that they face what he called further painful decisions to show how on earth their half-baked policy, which the shadow Secretary of State himself described as wild and uncosted, can be made to appear sustainable. We will take no lectures from them, given their record. With Labour in government, the basic state pension has gone up in real terms by more than £5 for a single pensioner and by more than £8 for a couple—that is more than the Tories chose to put it up by in all their 18 years in office.
Mr. Steve Webb: I thank the Secretary of State for his courtesy in providing a copy of the statement in advance.
Briefly donning my anorak, I thank the Secretary of State for freezing non-dependent deductions for the fourth year running. I welcome that, because growing numbers of young people, particularly those who are poorer, are unable to leave the family home until they are much older, and they are penalised quite harshly through the housing benefit system.
The increase in the child tax credit is welcome, but I wonder whether the Secretary of State could clarify something. He will be aware of the "Give us a fiver, Gordon" campaign that the Child Poverty Action Group and others have been running. That is the amount that they estimate is required to help the Government to achieve their initial target of taking 1 million children out of poverty. Given that the Chancellor has come up with £3.50 instead of £5, can the Secretary of State confirm that he believes that that increase is sufficient to hit the Government's first target on reducing child poverty?
In view of the problems with the family tax credit, can the Secretary of State confirm that 0.5 million families who are entitled to it are not receiving that credit and will therefore not get the money that the Chancellor announced? Given the computer shambles that still exists in the tax credit system, is he confident that even those who have made a claim will get that money seamlessly and painlessly?
For some reason, the Secretary of State did not mention the fact that the Chancellor has frozen the thresholds at which tax credits start to taper away. Can he confirm that that is the case?
The Secretary of State said that there will be compulsory action plans for all lone parents. What does that mean? For a lone parent who has just had their first child, presumably the only necessary action plan is to try to get some sleep. What are the Government going to require of all lone parents? What will one of those action plans look like? Will it say, "Take child to park, change nappies"? How will lone parents benefit? We heard nothing other than that oblique reference.
The Secretary of State mentioned the 1.4 million pension cap. In another place, my noble Friend Lord Oakeshott pointed out that that has a very different effect from that which the Chancellor claimed. I welcome the right hon. Gentleman's reference to allowing the National Audit Office to decide who is right—I think that we know who is right—but I am slightly confused by the Government's position. I have skimmed the Inland Revenue document. It appears to suggest that the solution will be all or nothing and that,
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if the NAO disagrees with the effect of the 1.4 million cap, it will be dropped. What is the status of that issue? I am slightly hazy as to where we are on the matter. Is it all or nothing? Could there be a different figure? Could the system work in a different way?
On the pension credit, will the Secretary of State confirm that today's figure of 2.4 million individual pensioners receiving it is less than half the number of people entitled to do so? While claims can be backdated to this October, will he confirm that anyone who has not been reached by next October—that could easily be 1 million or more people—will lose out permanently because the backdating will stop and they will not be able to get more than a year's pension credit from next October? Will he confirm that those people will lose out for ever?
The one aspect of the right hon. Gentleman's statement that we do not welcome is that of the local housing allowance scheme and its extension to the social rented sector. The idea of the scheme is that people should have shopping incentives and be able to pick and choose between different sorts of rented accommodation. Does the right hon. Gentleman accept that, for my constituents, the idea of a choice between different units of social rented accommodation is a joke, and that there is a massive shortage of such accommodation? The idea of a scheme based on shopping incentives is frankly insulting.
Mr. Smith: I thank the hon. Gentleman for his welcome for our decision on the non-dependent deductions, on the increase in the child tax credit and for our reference to the National Audit Office for independent scrutiny of the taxation of pensions and the cap. He asked about the thresholds for the credits. They are as set out in the documentation. We believe that that is the right thing to do this year, in the context of carrying forward the child tax credit framework as a whole.
The hon. Gentleman asked what the compulsory action plan would involve. Clearly, it will have to be tailored to the circumstances, needs and potential of the lone parent who is having the work focus interview. If they have very young children, for example, it will be important to encourage them in relation to how they work with them in terms of nurturing and development. It would be appropriate, for example, to encourage them to avail themselves of the support of the sure start programme, or for those with older children to liaise with the children's centres.
It would be appropriate for lone parents to take a long-term view of their own personal development and of how they see themselves supporting their child. When visiting the programmes in local communities, I have been struck by the fact that, if we can get lone parents and other young parents to work with their children on nurturing and development, it is not only the children who benefit—all the evidence shows that children progress better and are less likely to live a life of poverty if they have that kind of support—but the parents as well.
There should be more emphasis on training for lone parents with older children, on what they can do to get themselves job ready and on finding out what jobs they will be able to get into. The additional support that we

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announced today—free child care for the week before people start a job and the availability of child care for lone parents looking for a job—should all help to ease what can otherwise be a difficult transition. We have done well to get more than half of lone parents into work, but when we compare the rate of employment among lone parents in this country with the typical rate in the rest of Europe, we still have some way to go. All the evidence shows that, in most cases, lone parents would like to avail themselves of the opportunities being offered because their living standards and their children's prospects would improve.
The hon. Gentleman asked about the take-up of pension credit, and whether I was confident that we would hit our target. I am confident of the progress that we are making. As I was saying to the hon. Member for Eastbourne (Mr. Waterson), it is encouraging to see the take-up rate accelerating and to see the application process working so smoothly. In our constituencies, each of us now has thousands of pensioners who are benefiting from the pension credit. Alongside my announcement today, I am publishing a constituency breakdown, so that all hon. Members will be able to see how people are benefiting in their constituencies.
The hon. Gentleman asked about the progress that is being made on child poverty, and whether we believed that the increases announced today would be sufficient to enable us to hit our target of reducing child poverty by a quarter by 2004–05, which is the first milestone that we have to reach. There are details of that in the pre-Budget report documentation, but the short answer to his question is yes, these are challenging targets, but it is right that they should be and we are confident that we shall progress to hitting them using the measures that we have announced.
Ms Karen Buck: It is difficult to over-state the significance for lone parents and couples in London of the suggested regional wage top-up. I shall he interested to see the details of the proposal, but a number of colleagues and I have been campaigning for such a measure for many years, in recognition of the much higher costs of child care and housing in London and of the fact that we have much lower lone parent participation in the labour market and much higher incidence of child poverty here than in any other region.
Will my right hon. Friend tell us how that provision will be delivered? Will it be via a premium on the tax credit? Will it increase the entitlement to the child care tax credit? Will lone parents in London be expected to have been out of work for a year to qualify for the premium, as couples will be? Will the premium in London stop after a year, and, if so, how do the Government intend to deal with the risk of parents who have settled a child in child care as a consequence of the premium improving their access to employment finding themselves unable to sustain that child care place?
Mr. Smith: I thank my hon. Friend for her welcome for the proposal. Like her, I think that it is difficult to over-state its importance across London, where lone parents and other unemployed parents face particularly high child care and transport costs, especially when
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housing benefit is withdrawn when they enter work. That is why we have introduced the measure, and we believe that it will make a real difference.
I can confirm that it is intended for people who have been out of work for a year. The work search premium is also being introduced in a number of areas, which will give people £20 a week for actively seeking work, as well as the additional help with child care that I mentioned. If they get a job, they will then get the £40 for a year. We have found with previous programmes that, after a year, people have often made the transition into a job and progressed in their work. The premium helps them to meet their initial costs, they have a new social network and outlook and tend to stay in work. Obviously, we shall monitor the provision closely. I shall let my hon. Friend have a note on the details of the calculation and its administration.
Mr. John Redwood: Like all hon. Members, I hope that my private interests in pensions will keep me above means-tested benefits in my old age and away from financial worry. Can the Secretary of State explain to my constituents, whose pension funds have been gravely damaged by the £5 billion smash and grab raid each year by the Chancellor, why it makes sense to damage their pensions, often to the point where schemes are closed or benefits cut, only to give less money back to them in the form of means-tested benefits? Is that not an outrageous mugging of our pensioners? Would it not have been better to have left more tax relief in the funds so that those pensioners, like us, could look forward to less worry in old age?
Mr. Smith: I cannot resist pointing out that the right hon. Gentleman was a member of the Government who oversaw the most calamitous mis-selling of pensions as well as fraudulent abuse of the occupational pension system, which did much to undermine confidence in that system. On pension credit, the Conservatives go on about means-testing, but the truth is that this is a million miles away from the humiliating, intrusive weekly means test of old. What worries them is that we are getting more money to the pensioners who need it most, while at the same time acting to address occupational pension insecurity through the proposed pension protection fund, measures for simplification, measures to take out cost, the development of informed choice, better financial numeracy and all the other measures that form such an important part of our strategy.
On dividend tax relief, I would take more notice of Conservative Members if their party were committed to its reintroduction. It is not, so this is all crocodile tears.
Jim Knight: If, before the 1997 general election, the Labour party had campaigned and pledged to increase employment by 1.5 million and virtually to obliterate youth unemployment, it would have been dismissed as dishonest and unbelievable. The Government's achievement in bringing down unemployment and putting more people in work through the new deal, which both Opposition parties voted against and which the main Opposition party says it would abolish, is an extraordinary tribute to my right hon. Friend the Secretary of State and his Department. However, has he considered a new deal for seaside communities, where seasonal unemployment is a

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particular issue? We need assistance to ensure not only that work pays, as my right hon. Friend says, but that it pays for 12 months a year.
Mr. Smith: I thank my hon. Friend for his praise for the new deal and its achievements. He is right, of course, that nothing could do more damage, setting back the hopes of those who would be assisted by those programmes, than the Conservative party getting the opportunity to end them. The idea that the Conservatives might save money from that to pay for pensions, or indeed to pay for anything else, is ridiculous when we take account of the fact that in cost-benefit terms the programmes are saving us money. The new deal for lone parents, as I mentioned, has been shown by research to save £40 million a year for the Exchequer. As well as the untold human damage that the Conservatives would inflict on many of the most vulnerable members of our community, they would face higher costs from abolishing the new deal, rather than saving money.
I listened closely to what my hon. Friend said about the need for action in seaside towns. My right hon. Friend the Chancellor referred to the document entitled, "Full Employment in Every Region", which we published today. If my hon. Friend studies it, he will see in its extensive analysis some interesting observations on the particular position of the labour market in seaside towns. Of course, action teams, local worklessness pilots and other intensive local programmes complement the new deal; many of them are appropriate to and applied in seaside towns. However, I will continue to listen to him and other colleagues from all parts of the House who represent seaside towns to consider what further needs to be done.
Hywel Williams: On behalf of my party, may I also thank the Secretary of State for sight of his statement? He is a busy man, but I wonder whether he has looked at the New Policy Institute report on poverty and social exclusion. If he has, he will have noticed the statement:
"Wales is noticeably worse than average for…indicators of poverty…children in workless households"
as well as young adult unemployment and concentrations of poverty. Poverty clusters around children in families without work. I wonder how such child poverty will be addressed by the 1.8 per cent. increase, following the Rossi index. To enlighten the House, for a young unemployed person who is under 25, that means a rise from £43.25 to £44.05—the princely sum of 80p.
How will such child poverty be addressed by the lack of any reference, so far as I can see, to the continuing disgrace of the social fund, which nobody seems to mention these days? Just in case the Secretary of State is tempted to refer to getting people into work, I refer to the New Policy Institute report:
"The proportion of people in poverty in households where someone was doing paid work rose from 33 per cent.…to 41 per cent."
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between 1999 and 2002. Therefore, we have an increase in the proportion of people working but in poverty. As a matter of interest for Conservative Members, although I do not know whether they read these reports—
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman has had more than enough time to put his thoughts to the Secretary of State.
Mr. Smith: The hon. Gentleman has made quite a lot of points, so I shall try to do them justice. The new deals of all kinds have been working well in Wales. It is another interesting feature of the analysis that we have published today that throughout the UK unemployment has fallen furthest where it was highest. That shows an evening out of opportunity, which is welcome, notwithstanding the concentrations of unemployment and other deprivation, which, as he points out, can occur in particular communities.
One of the pathways to work pilots, to which I have referred, is working in Bridgend and in the south Wales valleys, where there is a concentration of people who receive incapacity benefit. It is early days yet, but the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), who is the Minister with responsibility for disabled people, and I make it our business closely to monitor the performance of those programmes. The early signs are very encouraging.
On the general point made by the hon. Gentleman about the increase in benefits, I point out that one of the great advantages of the Government's child tax credit approach is that there is seamless support for children, whether or not their parents are in work, so people out of work will benefit from that increase, just as people in work will. As I was telling the hon. Member for Northavon (Mr. Webb), who speaks for the Liberal party, that will be a big factor in helping us to hit our targets to reduce child poverty in Wales, as elsewhere.
Miss Anne Begg: I welcome the Secretary of State reiterating his commitment to the new deal. About three weeks ago in Aberdeen, I helped to launch a new deal called progress to work, which is for recovering and recovered drug addicts. It is crucial that those young people get that specialist and specific help, because without it there is no way that they would ever enter the employment market. I am concerned that those people are the very ones who could be threatened should the Conservative party ever come to power and scrap the programme of new deals.
One of the main routes out of unemployment or off benefit for hard-to-place groups is self-employment. I notice that the Secretary of State said that the Government are thinking of providing extra help for those on benefits to enter self-employment. Can he give an indication of what that extra help might be?
Mr. Smith: My hon. Friend is right. As well as the general benefit of the new deal, there are those specialist elements of the programme, such as the progress to work initiatives to help drug abusers to manage their condition and to get to a position from which they can move into work. It would be an utter tragedy if the Conservative party were able to scrap them.

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As we examine the future of the new deals and our wider array of employment programmes, as well as wanting to simplify what has become, due to its incremental development, a complex structure in terms of eligibility and programme operation, I think that there will be scope—not least through the incentivised employment zone approach—to make more resources available where people with a particularly challenging history or condition are being helped. As a condition of that, however, there must be a rigorous focus on the outcome of those programmes to enable us to have sufficient flexibility in the system, so as better to reward the ones that genuinely help the hardest to help and successfully get them towards the labour market.
It has been a feature of the existing new deal programmes that self-employment is an option. That has already helped many people successfully to start their own business. We want to develop that further with the quality of advice and support that is available. Of course, it will also be helped by the measures for skills, which my right hon. Friend the Chancellor announced in his statement.
Several hon. Members rose—
Madam Deputy Speaker: Order. I must move on to the main business.

European Affairs
[Relevant document: Minutes of Evidence taken before the European Scrutiny Committee (HC 1078-ii).]
Motion made, and Question proposed, That this House do now adjourn.—[Margaret Moran.]
2.48 pm
The Secretary of State for Foreign and Commonwealth Affairs(Mr. Jack Straw): The Italian presidency of the European Union will chair the European Council in Brussels this Friday and Saturday, 12 and 13 December. Today, the House has its customary opportunity to debate the Government's priorities. I also look forward to discussing them with members of the Foreign Affairs Committee when I give evidence to them tomorrow.
The main business of the Council will be negotiations in the intergovernmental conference—the IGC—for a constitutional treaty for the EU. The Italian presidency hopes to conclude those negotiations at this European Council. The Government support that aim. Equally, the Government's fundamental concerns, like those of other member states, will have to be dealt with in any final package that we can agree.
The concerns of the Government were well spelled out in the White Paper, which I published in September and which was debated in the House on 9 September. They include retaining unanimity for treaty change and other matters of vital national interest such as tax, social security, defence and foreign policy, key areas of criminal procedural law, satisfaction in regard to energy, and issues that have emerged as further priorities during our consultations.
Mr. Bob Blizzard: As my right hon. Friend knows, I have pressed him, the Minister for Europe and indeed the Prime Minister on the energy chapter—later to become the energy articles—because of the uncertainty that it has created in the United Kingdom offshore oil and gas industry. The revised wording that my right hon. Friend has secured through negotiation meets not only my concerns—the concerns, that is, of one who represents an oil and gas constituency—but the concerns of the industry. I can confirm that, having just left an industry event organised by the United Kingdom Offshore Operators Association, where industry representatives announced that they were very satisfied with the new wording.
Mr. Straw: I thank my hon. Friend for all his work on behalf of the industry. I am glad to hear its opinions. The result that we have achieved is a consequence of the way in which the two Houses have been involved in the negotiations. Without my hon. Friend's prompting and support, and without the involvement of members of all parties in the House of Commons, I should not have been able to deploy as much weight in the IGC and to secure what I consider a satisfactory result.
It is worth putting on record the amended proposal that arrived from the Italian presidency late yesterday evening, which amends article III-157 with an additional sub-clause stating:
"such laws or framework laws shall not affect a member state's right to determine the conditions for exploiting its energy resources and the structure of its supply without prejudice to Article III-130(2) (c)".

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That article also protects a nation state's use of its own resources.
We must be eagle-eyed to ensure that that text finds its way into any final treaty that we sign, and I promise the House that that will happen. I am extremely grateful to my hon. Friend the Member for Waveney (Mr. Blizzard) for what he has been able to achieve—with, perhaps, a little help from me.
Sir Robert Smith: The proposal obviously came from the Italian Government, but what matters is getting investment into the North sea, reducing the uncertainty and protecting jobs in our constituencies. As the Chancellor recognised in his statement earlier, when pointing out how vital this industry is, it is important for the words to appear in the final text, not just in the draft.
Mr. Straw: We will ensure that they do. I have no reason to think that they will not. They emanated from the Italian presidency because it is running the IGC, but it took a great deal of discussion in the room and privately with our friends in the presidency. We also worked closely with the Government of the Netherlands. I signed a letter to the presidency, jointly with my then counterpart, Jaap de Hoop Scheffer, who is about to take over as Secretary-General of NATO, emphasising that this was the shared concern of two of the largest oil and gas producers in the European Union.
Angus Robertson: Members of the European Scrutiny Committee were provided with the text of the United Kingdom amendment, including the fourth part, which we have been asked not to release because it could damage the UK's negotiating position. I do not want to press the Foreign Secretary on the exact wording, but having looked at the Italian presidency's proposal—which some Members have said they wholeheartedly support—I am slightly worried about the lack of any mention of fiscal safeguards. Can he reassure us that other sections of the draft constitution will deal with that?
Mr. Straw: As the letter from the Dutch Foreign Minister and me made clear, what overwhelmingly concerned us was what had been in the original energy articles, and the possibility that the Commission would use qualified majority voting to take control of oil and gas energy policy issues that are properly a matter for the House of Commons or for unanimity in the Council. Any fiscal regime is a separate issue. At present we are broadly reassured, but as the hon. Gentleman knows we will continue to try to nail down any remaining ambiguities.
Mr. William Cash Mr. William Cash (Stone) (Con)rose—
Mr. Straw: I will give way to the hon. Gentleman, as I always do.
Mr. Cash: The Foreign Secretary announced the other day that there is to be a declaration about the primacy of Union law in the new arrangements, which no doubt he hopes will be settled this weekend. Even if he exercises a tentative veto, it could turn out to be a pyrrhic victory. Does he accept—here I refer to an
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answer given to me by the Minister for Europe on 8 December—that, when it comes to interpreting the constitution in the context of Union law, the issue should be decided in accordance with European Court of Justice rules rather than the rules of UK courts? Would he be good enough to explain which of the two should prevail in terms of the question of the constitution in principle?
Mr. Straw: I think that I can take that as a compliment to us on managing to secure something that the hon. Gentleman sought. I know that he may feel counter-suggestible about Ministers saying yes to some of his proposals.
Annexe 3 of the presidency's latest proposals includes a declaration for incorporation in the final Act concerning article I-5a. It states:
"The conference notes that the provisions of article 1-5a reflect existing Court of Justice case law."
I shall give the hon. Gentleman the short version of my seminar on the primacy of European law as part of a treaty that we have signed. As he will recall from the detailed wording of section 2 of the European Communities Act 1972, we are—and have been for 31 years—subject to European law as it is in treaties, directives and regulations, as interpreted by the Court of Justice. That has been the case ever since we joined the European Union. As the annexe 3 proposal from the presidency makes clear, it will continue to be the case if we have a new treaty.
If the treaty cannot be agreed at this European Council, we will continue to talk for as long as is necessary for us to obtain the right result. As the Italian Prime Minister and Council President, Silvio Berlusconi, said last weekend,
"an agreement at any price would be a serious mistake".
Of course we want an agreement as soon as possible. Those of us who have spent not just many happy hours but many happy days, weeks and weekends in the IGC—much as I admire those around the table—would be delighted to see its conclusion. The overriding question, however, is whether it is in Britain's national interest. That comes before everything else.
Let me reinforce a point that I made a moment ago in responding to my hon. Friend the Member for Waveney. Parliament has never before been involved so fully in the negotiations for an EU treaty. Thanks to the work of our Government and parliamentary representatives in the Convention, Parliament was fully briefed on proceedings there. Since May, towards the end of the Convention process, there have been seven debates or statements on the IGC or the Convention in the House. In September, we published the White Paper. I have twice given evidence since then to the European Scrutiny Committee—the first time, I am told, that a Foreign Secretary has ever done so—and twice attended the IGC Standing Committee, most recently on 1 December. My hon. Friend the Minister for Europe has attended the IGC Standing Committee three times. There have been two reports on the Convention or the IGC by our European Scrutiny Committee, and 13 by

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the House of Lords European Union Committee. All that parliamentary debate has been extremely helpful to the Government in the IGC negotiations, and as I have explained, it has helped to strengthen our negotiating position.
Mr. John Redwood: I pay tribute to the Foreign Secretary for making himself so available on these crucial matters; we are very grateful for the opportunity for such debate. Has he reflected further on the point that I recently raised with him about tabling a proposal to ensure that the European Court of Justice and other European institutions cannot interfere in British tax policy? I know that the Government wish to have a red line, but as he will know, the European Union is already crawling all over corporate tax, even without the draft constitution being in place.
Mr. Straw: The right hon. Gentleman will also be aware that other Governments share our concern in terms of pushing back the Commission's areas of activity in tax policy, and that will proceed. Separately, I can reassure him that ensuring that we get satisfaction in respect of tax being a matter for unanimity will be one of our overriding concerns this weekend, and for as long as the IGC takes.
It is in the nature of any negotiations that a consensus builds up from the relatively straightforward issues to the most difficult. That inevitably means that some of the issues that are key to the United Kingdom, including aspects of qualified majority voting or unanimity, cannot be settled—at least until this weekend—along with similar first-order issues for other countries. For example, Commission size and voting weights is not a first-order issue for us, but it is certainly an issue of profound importance to many member states.
The six meetings of the IGC that I have so happily attended have made considerable progress on many issues, and they have narrowed, but not eliminated, those issues of serious contention. We have been well served by the Italian presidency, and the meetings have been both well chaired and well managed by my colleague and friend Franco Frattini, the Italian Foreign Minister.
The presidency has responded to the six sets of discussions with two packages of proposals, the latest of which—an omnibus version—was tabled late yesterday afternoon in the French text. The English translation became available earlier today, a copy of which I have placed in the Library of the House. It includes the latest proposals, better language on the charter and on energy—we have already dealt with that—and on the so-called passerelle clauses, which are concerned with giving this or any other national Parliament a lock on any future extension of qualified majority voting. But there is still a lot of hard negotiating to be done on tax, foreign policy and other fundamental issues.
Mr. Graham Allen: My right hon. Friend will be pleased to know that I am not going to bend his ear again about the visa application of my constituent Rachel Ringham. Rather, I want to pay generous tribute to him for the way in which he and his colleagues have put themselves out to enable this place
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to be fully informed of what is going on in the IGC. I pay that tribute as one who has raised that issue repeatedly in this Chamber. As my hon. Friend the Deputy Leader of the House is in his place, I should also point out that that is how legislation should be dealt with. Regardless of whether the outcome was the one that people wanted, no one could say that the Foreign Secretary did not do everything possible to keep the House informed.
Mr. Straw: I am extremely grateful to my hon. Friend. That part of the process, at least, I thoroughly enjoyed, and the House and the country are all the better for it. I very much hope that the matter of the visa, which he raised with me this morning, has been resolved or is well on the way to being so.
Keith Vaz: I do not want this debate to sound like a love-in, but I should like to endorse what my hon. Friend the Member for Nottingham, North (Mr. Allen) said: the Foreign Secretary and the Minister for Europe have indeed put themselves before the scrutiny of the House on this issue. But can the Foreign Secretary explain the Government's current position on the charter of fundamental rights?
Mr. Straw: The current position is as we set it out in the White Paper, and my hon. Friend will recall exactly what we said. On page 39, we recited the important safeguards that had already been achieved in the course of the Convention discussions—the so-called horizontal articles, such as article II-51, which states that the charter
"does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks defined in the other parts of the Constitution."
The additional language in annexe 4 of the latest version of the presidency's proposals includes a formal reference to the explanation relating to the charter of fundamental rights. Paragraph 5 of the preamble makes reference to the explanation, and includes the phrase
"and updated, under the responsibility of the Praesidium of the European Convention".
There is also a declaration for incorporation in the final Act:
"The Conference takes note of the explanations relating to the Charter…prepared at the instigation of the Praesidium…which drafted the Charter and updated under the responsibility of the Praesidium, as set out below."
Such text is then reproduced. That is an important development.
Mr. David Heathcoat-Amory: In listing the issues to which the Government still had objections, the Foreign Secretary did not mention economic policy, even though the White Paper makes it clear that they oppose article 14, which insists on the compulsory co-ordination of economic employment policies throughout the member states. Is that still a red line issue? The latest draft from the presidency makes no changes whatsoever, so can the Foreign Secretary assure us that this is still a veto issue?
Mr. Straw: The right hon. Gentleman should not be quite so suspicious in thinking that, just by elision and an attempt to be relatively brief, I was dismissing this issue. As I said, there is a lot of hard negotiating to be done on tax, foreign policy and other fundamental issues, and that includes articles I-11.3, I-14.3. We have been arguing that those should be brought into line with article III-70, in which economic competence is given to member states. That is an issue not only for us but for the Union. At the moment, in respect of the same dossier, in different parts of the draft treaty, either the Union or member states variously have responsibility for co-ordinating economic policy. However, I take the right hon. Gentleman's point.
This is a good moment to remind ourselves of why we are negotiating this IGC. It is because the prize—
Mr. Blizzard: Did my right hon. Friend notice that the right hon. Member for Wells (Mr. Heathcoat-Amory), who was a member of the Convention of the Future of Europe, did not mention fishing in his worthy intervention? Yet last night in this Chamber, Conservative Front Benchers made a major issue of fishing, and suggested that this Government should go to the barricades for the removal of the common fisheries policy from the draft treaty.
Mr. Straw: That is an entirely fair point. The right hon. Member for Wells (Mr. Heathcoat-Amory) is damned by his silence.
Mr. Heathcoat-Amory: Will the right hon. Gentleman give way?
Mr. Straw: No, it is too late.
Mr. Heathcoat-Amory Mr. Heathcoat-Amory rose—
Mr. Straw: That is a separate issue, and there is no question but that we have been round this track on many occasions. The draft constitutional treaty provides for a shared competence in respect of the CFP in article 13. Except for the conservation of marine biological resources under the CFP, in article 12, that accurately reflects the existing arrangements of competences, and does not add to them.
Several hon. Members rose—
Mr. Straw: I want to make some progress, and then I shall of course give way.
Mr. Heathcoat-Amory: On a point of order, Madam Deputy Speaker. When one hon. Member mentions another hon. Member in a debate and clearly misrepresents his position, should not that hon. Member be given an opportunity to respond if he is in his place at the time?
Madam Deputy Speaker (Sylvia Heal): It is not actually a rule of the House, but lies in the hands, and is at the discretion, of the Member, in this case the Foreign Secretary, who is on his feet.
Mr. Straw: I will give way to the right hon. Gentleman.
Mr. Heathcoat-Amory: I am most grateful. Will the Foreign Secretary accept my assurance that, in the Convention on the Future of Europe, I moved an amendment to exclude fisheries from the relevant exclusive competence article? To my great regret, I did not receive the support of the Government representative on the Convention at the time. I was battling for the British fishing industry, which was abandoned by the Government representative.
Mr. Straw: It is no wonder that the right hon. Gentleman's proposal failed, because he was obviously not forensic enough. The fact of the matter is that the fisheries are a shared competence, not an exclusive competence, such as the conservation of marine biological stocks. There are good arguments for that, and they have not changed. I accept the veracity of what he says, but I do not give him many marks for his effort.
Mr. Richard Spring: Will the Foreign Secretary define for the House what exactly a shared competence is.
Mr. Straw: One that is shared between the EU and member states.
Now is a good moment to remind ourselves why we are negotiating in this IGC. As I said, the prize—a constitutional treaty that is right for Britain and for Europe—is very important.
On 1 May next year, eight of Europe's new democracies, along with Cyprus and Malta, will join the EU. Later, Romania and Bulgaria will follow, and the European Council should confirm the target of next year for the two countries to close negotiations, allowing them to join the EU in 2007. The Council will also discuss Turkey's progress towards meeting the criteria for opening EU membership negotiations. As the House knows, the Government strongly support Turkey's prompt accession to the EU once it meets those criteria.
The word "historic" is often overused, but I make no apologies for using it in the context of EU enlargement. Only 14 years ago, the iron curtain divided Europe, with central and eastern European countries trapped under communist dictatorship and sinking into economic and environmental neglect. Joining the EU will mark the culmination of those countries' transition to free and democratic societies and prosperous market economies. It is a tribute to their efforts and energy that they have made that transition so quickly.
Enlargement is overwhelmingly in Britain's interest, which is why successive British Governments have been its strongest supporters. Through enlargement, Britain will gain access to an expanded single market of 450 million people. New partners will help us better face the shared challenges of an uncertain and interdependent world. However, the problem is that the European Union of today has institutions essentially designed for six members, and it needs reform if it is to work effectively with 25. No reform is preferable to a bad reform, and, as I made clear in our White Paper on the constitutional treaty, the EU will carry on under its current arrangements if a new treaty cannot be agreed or ratified by every member state. However, if we can get the IGC right, the prize is a more efficient and effective

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EU that can meet the challenges of enlargement and is focused not on institutional minutiae, but on delivering security and prosperity to its citizens.
Joyce Quin: I greatly welcome what my right hon. Friend is saying. Will he join me in expressing pleasure in the fact that the accession countries have been involved in discussions on the constitution, so they already have a sense of ownership in respect of areas where there is strong agreement? Does he also agree that all the talk about a superstate is complete nonsense, because the last thing that the new accession countries want is to be subordinate to a superpower, based in Brussels or anywhere else?
Mr. Straw: I strongly agree with my right hon. Friend on her last point, and I shall return to that theme later in my speech. On the first point, it is extremely good—and thanks, not least, to our Prime Minister at Laeken—that the new states have been able fully to participate in the IGC. Their view, particularly their strategic view of foreign policy—based on a Europe of independent sovereign nation states—is similar to that of the UK, so I have been able to develop natural alliances with almost all of them.
In an article that I wrote for The Economist in October last year. I set out how the Government wanted a new constitutional treaty for the EU to look. I said then that it should explain
"what the EU is—a union of sovereign states who have decided to pool some of that sovereignty, better to secure peace and prsperity in Europe and the wider world."
I continued:
"It should confirm that the Union exercises only those powers which are explicitly and freely conferred on it by the member states, which remain the EU's primary source of democratic legitimacy."
I also said that the new treaty should
"draw a clear distinction between supranational and national competences".
At the start of the debate on a new constitutional treaty, it was by no means clear that that was the sort of result that we were going to get, and there has long been a debate about how Europe should work. On the one hand, there was the federalist view, which was often the result of a different history from ours or a different political culture. On the other, there were more practical Europeans—similar, I believe, to the vast majority of the British people—who wanted and still want to enhance our prosperity and influence by working together with our neighbours. The sort of constitutional treaty that I described in The Economist last year was based on that practical view.
The Government were clear about what we wanted from the IGC negotiations, but we had a choice in how to get it. We could have accepted everything that the most committed integrationists want—the view of the Liberal Democrat representative on the IGC—or we could have tried to rubbish the whole thing, which, generally speaking, was the approach of the Conservatives. However, we rejected both approaches, making it clear exactly what we wanted and working
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constructively with our partners to get there, while standing firm against changes that we could not accept. As a result, we already have many of the elements of a treaty that endorses our vision of a Europe of nation states that will work efficiently in Britain's interest. The idea of a federalist super state is yesterday's fantasy, not tomorrow's reality. The treaty that we sign will be not a federalist blueprint, but a framework for a Europe of sovereign nation states working together to achieve common aims and to combat shared challenges.
Let me cite what the House of Lords Select Committee on the EU said in a recent report. It said:
"The draft Treaty expressly states that the Union can only act within the limits of the competences which the Member States have conferred on it…We support this approach because the draft Treaty makes plain the intention that the European Union remains a union of sovereign Member States".
Our European partners recognise that, too. The leading French commentator, Alain Duhamel, has said that the Convention's draft treaty set out a great British Europe
There is a myth put about by those who would take Britain out of Europe that paints the EU as a threat to British sovereignty. It is a profoundly defeatist view of what Britain can achieve, and it assumes that cooperation with our neighbours comes at the price of diluting our national character.
This is a moment to remind ourselves of what has been said in the past about various changes to the treaty base of our relationship with the EU. I understand fully why the right hon. and learned Member for Devizes (Mr. Ancram), the deputy leader of the Opposition and shadow Foreign Secretary, cannot be present. I am sorry that he cannot be here because it is worth recalling that, back in 1992, speaking from the Back Benches on the Government side, he shot down those who claimed that Maastricht would lead to a superstate. Indeed, he argued eloquently and persuaded most of the then Opposition, including myself, that we should vote against a referendum on Maastricht. On any analysis whatever, Maastricht represented a much more profound change in the nature of the relationship—setting out the single currency and common foreign and defence policy—than anything in the current treaty.
There were some people—I shall not mention their names, but they can identify themselves—at that time who ranted about the fact that the Maastricht treaty would lead to the creation of a superstate. If we wind forward to the modest set of changes in the Amsterdam treaty, the position of Conservative Front Benchers had changed. Only 27 days after their crushing defeat in the 1997 general election, the right hon. Member for Wokingham (Mr. Redwood)—who had survived. I am happy to say-gave a balanced judgment on the Amsterdam treaty in The Times, when he wrote:
"If we sign the Amsterdam Treaty, we will abolish our country."
Other, slightly more nuanced statements—which would be easy in comparison with the dramatic and apocalyptic view expressed by the right hon. Gentleman—made similar points about the Amsterdam treaty. The country continued, after all, and was not abolished.
Then we came to the Nice treaty, and the right hon. Gentleman decided to ratchet up the hyperbole. On BBC Online, on 19 April 2000, he said:
"The proposed Nice Treaty would do what Guy Fawkes failed to do—blow up parliamentary government in Britain."

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The right hon. Gentleman is an intelligent and pleasant fellow, but he should think about what he predicted would happen after the Amsterdam treaty, which was signed more than six years ago, and what he predicted would happen after the Nice treaty three years ago. Far from our country being abolished or parliamentary democracy being blown up, our country has not only survived but prospered as never before, as was well illustrated by the silence and glum faces on the other side of the House when my right hon. Friend the Chancellor spelled out in every detail the brilliant record of this Labour Government on prosperity and our position in the world, especially compared with our predecessor.
Mr. Redwood: My point was clear: that more and more Government powers were being taken out of democratic hands and given to unelected hands. That has happened and continues to happen, and it does mean the abolition of a democratic Britain. That is why we want the Foreign Secretary to stand up for the rights of the House of Commons, instead of transferring yet more power. The Department of Trade and Industry is discussing 37 major items of policy at present, every one of which emanates from directives and policies from Brussels. It is one of many Departments that are simply doing the will of Brussels, not responding to the democratic wishes of this House.
Mr. Straw: The fundamental flaw in the right hon. Gentleman's remarks is the assumption that everything that is decided by the European Union is against our interests. If that is his view, he should confirm that he wants Britain to withdraw from the EU and that he resiles from the policy of the Thatcher Government—not of this Government—which was to accept, through the Single European Act, qualified majority voting. The Thatcher Government also accepted the fundamental principle of the single market that decisions on the operation of that market had to be agreed by QMV, otherwise what was in the interests of British people, jobs and businesses could be subverted and undermined by other countries that would not observe the law in the same way as we would.
Mr. Gerald Howarth: Will the Foreign Secretary give way?
Mr. Straw: In a moment. The truth is that for most of the time we get our way in the European Union.
Mr. Eric Forth: What a ridiculous thing to say.
Mr. Straw: What that remark illustrates is the profound lack of confidence that the right hon. Gentleman had in the ability of any Government of whom he was a member to ensure that Britain's national interests were properly represented. This Government have much more confidence in Britain and in ourselves than that. We have shown that, by engaging constructively, rather than sulking on the sidelines, we can mould the debate in Europe. We recognise that we can increase our influence, and the security and prosperity of the British people, by working together with our partners.
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Let us take problems such as illegal immigration, drug smuggling or organised crime. We cannot just wait until they reach Dover: we need to act with our partners to tackle them before they get here. So we support measures that would cut out "asylum shopping", and we have already agreed that asylum seekers' claims have to be dealt with in the first EU country in which they claimed asylum. We have agreed common minimum penalties for the most serious cross-border crimes. including terrorism and human trafficking, to ensure that they cannot go unpunished. Our police forces can now run joint investigations into drug traffickers, for example, with colleagues across the channel.
Europe is not just about tackling shared problems: it is of huge importance to Britain's prosperity, too.
Angus Robertson: Will the Foreign Secretary give way?
Mr. Straw: No, I promised to give way to the hon. Member for Aldershot (Mr. Howarth).
Mr. Gerald Howarth: The Foreign Secretary repeats the popular myth that Baroness Thatcher anticipated all the consequences before she agreed to qualified majority voting. It was precisely because she did not anticipate all the consequences that she became disillusioned. The whole purpose of the Single European Act was to achieve a common market in goods and services, which is what most people in this country thought that the common market was about. It was because the European Court, through the acquis communautaire, acquired an extension of power beyond those areas that Baroness Thatcher had foreseen—and received assurances on—that she became disillusioned with the European Union and the direction that it was taking.
Mr. Straw: I was present in the House when the Single European Act was debated. I remember that Baroness Thatcher, in alliance with Geoffrey Howe and Nigel Lawson, her Foreign Secretary and Chancellor, knew full well what was involved in that Act. Although I had, and continued to have, several disagreements with Baroness Thatcher, I would never have suggested that she was not in full possession of her faculties in respect of every decision she made. She knew about the consequences of the Single European Act, just as she knew full well, when she made her fine speech at Fontainebleau in April 1984, about the importance of Europe developing a common foreign policy and defence. The hon. Gentleman can rewrite history as much as he likes, but that is the truth. It was Baroness Thatcher who laid the foundations for a common European foreign and defence policy, which the Conservatives brought into British law through the Maastricht treaty.
Looking ahead, Europe has an ambitious agenda of economic reform to deliver jobs and growth, in which Britain is playing a leading role. One example of that process is the European action for growth initiative, which the European Council will discuss this week. Its aim is to boost competitiveness and growth by encouraging investment in transport infrastructure, telecommunications, research and development and innovation.

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Working with our European partners enhances Britain's security as well as our prosperity. Again, the agenda of the European Council is a good example. The Council will adopt High Representative Javier Solana's European security strategy, which should help us to tackle global security threats more coherently. The Council will also discuss strengthening the EU's relationship with the Arab world. Earlier this week, at the Foreign Ministers' meeting on Monday, we considered the middle east peace process, Iran and Iraq.
Acting together on foreign policy, when it is in our interests to do so, does not diminish Britain's sovereignty; it increases our influence. When I visited Iran in October with my counterparts from France and Germany, Dominique de Villepin and Joschka Fischer, I did so as the Foreign Minister of a sovereign nation state—as did they—working within a common EU position, and what the three of us achieved together, with the backing of the EU as a whole, was far more than ever we could have achieved alone.
It is also clearly in Britain's interests to work for stronger defence capabilities in Europe that complement NATO. The Atlantic alliance has been and continues to be the foundation of our security and we shall do nothing to undermine it, but it makes sense that Europe has the capacity to sort out problems on its own doorstep, such as peacekeeping in the Balkans, without always having to rely on the United States.
Hugh Robertson: Will the right hon. Gentleman give way?
Mr. Straw: As I am just coming to the close of my remarks, I shall not.
Cutting across NATO would weaken our defences and we shall not let it happen, but better European capabilities, for which the US has long argued, will help to strengthen our defence. The new articles tabled by Britain, France and Germany make clear for the first time in the EU treaty that NATO is the basis for the collective defence of its allies. Those draft articles also ensure that so-called structured defence co-operation is handled inclusively within the EU, not exclusively.
By engaging constructively and arguing firmly for what we want, we are helping to shape the debate in the IGC, and in the EU as a whole, in Britain's direction. That is what we were able to achieve in the Convention, and it continues to be our approach in the IGC negotiations. We shall carry on talking and working until we get the right result in those negotiations—for Britain and for a more effective Europe, ready to meet the challenge of enlargement.
3.30 pm
Mr. Richard Spring: I begin by paying tribute to the sometimes dangerous, often unrecognised, but highly professional work undertaken by our diplomats and consular staff throughout the world. Events such as the recent bombing in Istanbul remind us how dedicated our overseas public servants are, and I pay particular tribute to Roger Short, an exemplary diplomat, with whom I was in Istanbul very recently.
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The Foreign Secretary is correct to say that we have had many opportunities to discuss EU matters and I thank him for making himself so freely available. However, it has been six months since we last debated what could broadly be described as "European affairs",and these bi-annual debates provide a useful opportunity to update ourselves—even more so in this debate in view of the importance of recent developments not only in the European Union but in the whole of Europe. Our relationship with all European nations—not only with our EU partners—is a key component of our country's foreign policy interests. We are inextricably bound together by ties of history and geography.
The Balkans are often considered a big potential flashpoint, the area of Europe where violence and conflict are most likely to break out, as has so often been the case in the past. Much has changed since the bloody conflicts in the Balkans in the 1990s, but their legacy remains with us, and even more with populations in parts of the Balkans and the peoples of the whole of that region.
It is right to remember and to pay tribute to the dedication and bravery of the British and other NATO troops who helped to end the inter-ethnic conflicts that killed so many people and displaced so many more. The peoples of former Yugoslavia demonstrated that they were anxious to have that assistance, and progress is being made in that area, although many people are still displaced, too fearful to return to their homes, and much remains to be done in respect of criminal prosecutions.
There is much that is positive and encouraging, however. The former Yugoslav states have made great strides. Such progress is certainly worthy of recognition and encourages me in the hope that one day they will join the EU, and that the prospect of membership will spur them on to further reforms.
A key player in the wings is Russia. The relationship that the UK and our European partners enjoy with Russia is of considerable and growing importance. It has recently assumed a greater role, not merely on the European stage but on the world stage. That development is positive and I hope that Russia will continue to play a part in promoting stability on its borders. In particular, I hope that Russia will exercise her influence as facilitator of a smooth transition to a new, popular, democratic regime in Georgia. I hope very much that President Putin will remain engaged with the EU, NATO and the accession countries in a constructive and positive framework and ensure that democratic values are fully upheld in his country.
The enlargement of the EU is a process that the Conservative party—and, indeed, every hon. Member, to my knowledge—supports and I personally have strongly supported it since its inception. The end of the cold war was the catalyst that brought about the accession process that made all that possible. Countries cut off from the rest of Europe for almost half a century emerged after the Berlin wall fell, and new opportunities and potential have opened to them.
The accession of Latvia, Lithuania, Estonia, Poland, the Czech Republic, Hungary, Slovenia, and Slovakia next May will be a moment to rejoice for us all and symbolic of Europe having finally removed the remnants of the cold-war legacy. Of course, we have

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special links with Malta and Cyprus, too. The accession countries have achieved much reform already in their quest for EU membership. The eastern European countries have transformed themselves into successful, functioning multi-party democracies, with an adherence to the rule of law and respect for human rights and personal freedoms.
Angus Robertson: I agree entirely with what the hon. Gentleman says about enlargement, but does he agree that there is a certain irony in the fact that, among the accession countries, nation states such as Slovakia—a country of 5 million people, without a single centimetre of coastline—will have more direct say over the Scottish fishing industry than the devolved Government of Scotland?
Mr. Spring: I will be happy to refer to the issue that the hon. Gentleman raises in a few minutes if he will bear with me.
Political liberalisation has been matched by economic liberalisation and the values that accompany both. That bodes well not just for the countries themselves, but for existing EU member states, as fresh investment and economic opportunities open up in what was previously the eastern bloc. On their accession, those eastern European countries bring with them not only fresh ideas and expectations, but new challenges for the EU. Those countries do not bring with them the old-fashioned ideas of some existing EU members; they have only recently thrown off the influence of a centralising power, and they aspire to a close relationship with their transatlantic friends, as well as the EU, rather than being forced to make a false choice between the two. Their voices deserve to be heard. Britain should be the champion of the smaller countries of the EU, seeking to protect and promote their interests and creating an EU institutional structure to reflect that.
There are very real question marks revolving around the EU's whole direction and outlook that require much greater flexibility and a willingness to look outwards, rather than inwards, but they also involve the need to modernise the existing structure of common agricultural policy subsidy payments and structural funds. Fundamentally, the EU faces problems associated with its demography. Europe's birth rate is falling, and the population of the EU is ageing and declining. Over the next 50 years, it is predicted that Europe's median age will rise by 11.8 years. The European social model is completely unsuited to address that because of the lack of competitiveness and the human resources of countries such as India and China, which do not have expensive welfare support structures.
A further issue is how we formulate relations with countries on the borders of the enlarged EU. It is important that we come to an accommodation not only with countries in the Balkans, but with countries such as Moldova, Belarus and Ukraine. Not only is that important from the viewpoint of securing the EU's external borders, but, although their possible accession to the EU is many years away, the prospect of membership in the future for such countries will act as a spur to economic and political reform. Furthermore, we very much look forward to the date-we hope, in 2007—when Bulgaria and Romania become EU members.
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In October, I had the opportunity of visiting Turkey—a country to which we are greatly indebted because of its steadfast commitment to NATO during the cold war. Turkey is anxious to join the EU, and I hope that a formal accession process will begin at the end of next year. Turkey is making remarkable progress in its political and judicial reform process, in the latter case assisted by us. Turkey faces a number of obstacles to EU accession. First, there is opposition in France and in Germany, which has a substantial Turkish minority. Prime Minister Erdogan has indicated that he will not press for the free movement of Turkish citizens, which is an issue with Germany in particular. Let me be blunt: it is a matter of the most profound political misjudgment to deny a country a relationship with the EU simply because it is Muslim. Given the current tensions in the middle east and other parts of the Islamic world, what sort of message would be sent out if the EU rejected a Muslim country, not because of any breach of the Copenhagen criteria but because it is Muslim, albeit committedly secular? It would be offensive and would reflect a total and fundamental misreading of one of the most important current geopolitical challenges that we face. Turkey should be judged by entirely dispassionate criteria, and I expect the Government to tell our European partners that loud and clear, as we certainly do.
Elections are imminent in north Cyprus. Obviously, we cannot prejudge the result. Whatever it is, however, a massive effort must be made to establish the basis for a settlement in Cyprus before 1 May. We have the juxtaposition of a prosperous, outward-looking and legally recognised republic of Cyprus entering the EU, while north Cyprus remains relatively impoverished and diplomatically unrecognised by others. The Annan plan must be the basis for a solution. Those who counsel Turkey to wait for a formal acceptance of EU accession before substantial movement to agreement about the island do Turkey no favours. Of course there is pain and mistrust on either side. There are real ties, however, of history, kinship and affection between Britain and Cyprus. We hope that it will not be long before Turkey formally becomes part of the European family of democratic nations.
In addition, Turkey has important relationships in the region, not least among which are its friendly ties with Israel, which are a shining example of how a Muslim country can co-exist productively with the state of Israel. Those long-standing and trusted links will undoubtedly, over time, prove most valuable in that volatile and difficult part of the world.
Turning to the European Council this weekend, it is true that core elements agreed at Nice dealt with accession. At Laeken, however, issues relevant to enlargement and to the EU's future direction were raised. We welcomed the recognition at Laeken that change was required within the EU and that the citizens of its member states wanted the European institutions to be less unwieldy and rigid. The Laeken declaration was clear: within the Union, the European institutions must be brought closer to Europe's citizens, and the Union needs to be more democratic, transparent and efficient. That is the agenda that we have been championing for a long time: an agenda for a flexible, modern EU, not one stuck in a time warp of irrelevant thinking.

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The Labour party, on its big conversation website, states:
"Many citizens feel detached from its"—
the EU's"—
"institutions. Too many of its priorities reflect the problems of the past not the challenges of the future".
Typically, the Government analyse the problem correctly but fail to come up with the right prescription. The Convention on the Future of Europe was a response to the Laeken diagnosis of the challenges facing the EU—to remedy the democratic deficit, to reconnect the EU to the citizens of its member states, and to create an EU capable of meeting the economic and demographic changes of the 21st century. At this point, may I pay a genuine tribute to all those from both Houses—and to those among our MEPs—who sat on the Convention and who, faced with such a daunting task, carried our their work with dedication and a genuine desire to analyse and debate the issues? I am sorry that, despite the best efforts of many of them, what has been achieved by the Convention falls far short of what was needed.
Alas, what has emerged from the Convention, specifically the draft constitution, does virtually nothing to address and respond to the main points that were identified at the Laeken summit as being of such pivotal importance. This weekend, in the "News Review" section of The Sunday Times newspaper, the hon. Member for Birmingham, Edgbaston (Ms Stuart) wrote:
"I am not convinced the proposed constitution as it stands will meet the needs of a Europe of 25 countries. The government does not have to accept it. Enlargement will continue without it. and so will the EU".
The hon. Lady, as we know, is better placed than virtually anybody in the House to understand what really went on at the Convention and what the constitution is really for. In the same article, she said:
"From my experience inside the convention, it is clear that the real reason for the constitution is the political deepening of the union".
Is that not proof, if any were needed, of what we have been saying about the constitution having nothing to do with enlargement but everything to do with the remorseless desire for closer political union?
The Government have failed to engage in the genuine debate about the EU—a debate for which this country is crying out—mendaciously saying that anybody who disagrees with them is in favour of withdrawal. Let us examine the proposed constitution.
Ms Gisela Stuart: I would not blame the Government for not engaging in a debate on Europe. We as politicians from all parties have failed over the past 30 years to engage in a debate with the public about Europe. This is our opportunity to engage in that debate.
Mr. Spring: I have some sympathy with the hon. Lady's point. Over time, there has been a sense of denial about what is going on in the EU and about the objectives of many of our European partners. Time and time again in the House, over many years, there has been
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a projection of reality that does not always accord exactly with the reality itself. I am afraid that we have reached, in this constitution and this Convention, new heights of disconnection between what is perceived among our European partners to be happening and the view projected by those on the Government Front Bench.
In May, the Foreign Secretary said:
"No one should get obsessed about the fact that it will be called a constitution."—[Official Report, 21 May 2003; Vol. 405, c. 1030.]
He implied that it meant very little. Joschka Fischer did not seem to agree. He said:
"We have a draft constitution that is worthy of the word historic".
Lamberto Dini said:
"The constitution is not just an intellectual exercise. It will quickly change people's lives…Eventually the Union will…become an institution and organisation in its own right".
So which is it? I know what I believe. The Government are pathetically in denial of what is obvious to everybody else.
What those quotes illustrate are the Government's blatant attempts to create a false debate on this subject. I am sure that the Foreign Secretary will remember the Prime Minister saying after Nice:
"As for the idea of a future intergovernmental conference, it will deal primarily with the issue of subsidiarity."—[Official Report, 11 December 2000; Vol. 359, c. 355.]
Well, that forecast turned out to be utterly untrue. The constitution deals with subsidiarity only as an aside. The Foreign Secretary has admitted that the current provisions on subsidiarity are inadequate. The only solution is for national parliaments to be able to enforce this principle to protect their rights. The current proposals for national parliaments are totally inadequate. The Government have boasted of how national parliaments can now "vet" proposed EU laws, but what use is this "vetting" given that the Commission can ignore it, when it really should be made to abandon a proposal if enough national Parliaments demand it?
As it stands, the Convention creates constitutional primacy over our unwritten constitution, a single legal personality for the EU and a legally binding charter of fundamental rights. It aspires to a new definition of a common foreign and defence policy and explicitly states and constitutionally enshrines the primacy of EU law, expanding its roles in criminal law, asylum and immigration, economic affairs and energy. How is that not a "fundamental change"? How on earth can anyone describe it as "tidying up"?
Although the Foreign Secretary and others may choose to ignore the cumulative effect of these changes, a ratchet mechanism is clearly at work. Once a power is granted away, rarely, if ever, is it returned. The ratchet turns in one direction only.
Mr. Cash: My hon. Friend may have noticed in today's edition of The Times an interview with my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) in which he says:
"We don't agree with the principle of a constitution that sets in stone the supremacy of a European law-making institution above parliaments…The effect of the constitution would be to make the source of that authority the EU constitution, not the UK Parliament."

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Does my hon. Friend therefore agree that we are saying in express terms that we do not agree in principle with the constitution?
Mr. Spring: We have always made it plain, as the Government originally did, that there is absolutely no need for a written constitution for the European Union. The Government advanced that view, but because they move along in the slipstream of others, they have now adopted a different view.
The Belgian Prime Minister Guy Verhofstadt recently stated:
"we observe that the European Union acquires all the instruments of a federal state…The capstone is the Constitutional Treaty, which must grow to become a genuine constitution"—
some tidying-up exercise! I am afraid that I have as little faith in the Government's red lines as I do in recent anonymous briefings saying that they might consider vetoing the treaty. Several red lines have been adjusted and redrawn in a different place, and the most blatant example of that is seen from the Government's original pledge that the charter of fundamental rights would not be legally binding even though that view was rejected at the time of Nice by the European Commission and others. We await the outcome of the IGC to find out which red lines will remain and in what form. Whatever one's point of view about the proposals, what is before us is undeniably of considerable constitutional importance. In that regard, we trust the people, so today I once again call on the British Government to do the same and hold a referendum, as so many of our European partners are doing.
The regrettable truth is that an outdated bloc mentality still permeates the European Union's policy-making and strategic mindset. That mindset carries with it resonances of the 1950s and a way of thinking that moved the founding fathers of the EU, but it is wholly irrelevant to the needs of the EU today. The Government's policy on the EU has been characterised by an almost total lack of influence or results. I invite one example…just one…of a specific component of the emerging structure of the EU that can be ascribed to British vision, focus and direction. The written constitution and the incorporation of the charter of fundamental rights are clear failures of British nerve and influence. The concepts were originally opposed but then accepted and we have always been carried along in the slipstream of others. By contrast, this Government would never have achieved the creation of the single market, the substantial rebate or the opt-out on the single currency.
On 26 November, the right hon. Member for Birmingham, Ladywood (Clare Short) wrote in The Times:
"the European elite in their enthusiasm for ever-greater integration, which drives inexorably towards a superstate, is dividing itself from the people".
She went on to say:
"The debate in Britain has been painted far too much as a battle between Little Englanders and the rest. But the reality is that pro-Europeans are driving a project that leads inevitably to a superstate, which most of us don't want."
I do not think I could have put it better myself.
It is also extraordinary that the Government have made absolutely no effort to return fisheries to national and local control at the IGC, because there was a golden
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opportunity to do so. It is absolutely clear that the common fisheries policy has failed and that British fishermen get an especially bad deal, and the fact that the British Government failed even to try to put the matter on the agenda is yet another example of their ineffectiveness in Europe. We, with a clearer idea of Britain's priorities in Europe, would have done so. We would have made the restoration of local and national control over our waters a red line, as we will in any future IGC when we are in government.
The Foreign Secretary dismissed the idea of shared competence in a way that did not accurately reflect reality. He knows that article 11 of the draft treaty says:
"The Member States shall exercise their competence"—
we are talking about shared competence—
"to the extent that the Union has not exercised, or has decided to cease exercising, its competence."
That is a very different message from the idea of a competence of equals. It is absolutely nothing of the sort.
Nowhere has failure been more marked than in defence. To enter into a defence agreement with France and Germany that has absolutely nothing to do with enhancing defence capability is monumental folly. The arrangements agreed within NATO at Washington and Berlin make the widest pan-European defence co-operation possible without duplicating NATO structures. The decision has absolutely nothing to do with defence, and everything to do with politics. It undermines the very principle on which NATO was founded and which has guaranteed our security for more than 50 years.
It is argued that the EU planning cell is very small. Does anyone think that those who favour an independent EU defence capability coupled to a common foreign and defence structure will rest content? Of course not. The Times on 1 December reported the comment of Belgian Foreign Minister Louis Michel that
"We can say that the embryo of a European defence is under way and that it's an irreversible process".
I would prefer to believe the sentiments—[Interruption.] We will pass the Foreign Secretary's comment on to the Belgian Foreign Minister, whose record of accuracy on what goes on in the EU is infinitely better than the right hon. Gentleman's.
There are those who have long-held and freely expressed views of Europe being a counterweight to the United States, and who resent the US-British special relationship. There are those in the US who regard with alarm diminishing defence expenditures in Europe and the lack of political will to spend on defence capabilities. They see Europe beginning to create structures outside NATO for exclusively political purposes. Those who take a negative view of European motives and attitudes sense justification for their viewpoint. They find it incredible that our Prime Minister, of all people, should have gone along with it.
Regrettably, the British Government have played into the hands of those people on both sides of Atlantic who favour disconnection. Let us never forget that, whether European or American., we hold to the same democratic values. The world is simply a better place when we work together. The Government's commitment to the separate EU defence identity is an

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act of monumental folly and will yield nothing for our magnificent and rightly admired armed forces.
When the history of this Government is written, their failure to make any real impact on the architecture of the EU will be a defining feature. Just as they completely misunderstood how to react when Europe was divided by the Berlin wall, they have failed to argue for a flexible EU with overlapping and interconnecting relationships, co-operating closely and extensively without the centralisation and harmonisation that so obsess those who systematically and successfully are pushing political union. Throughout, Britain has been a bit-part player, never setting out its stall in the lead-up to enlargement in the way that other European leaders have done so clearly and unequivocally. The account is one of a typically lost opportunity, a failure of influence and abdication of their responsibility to the British people.
3.58 pm
Mr. Menzies Campbell: I should begin by apologising to the House for having to leave early. I have a routine medical appointment early tomorrow in Edinburgh, and in order to keep it I have to make sure that I get to Edinburgh later this evening.
The Secretary of State has been accustomed on these occasions, but not today, to saying that
"Nothing is agreed until everything is agreed."—[Official Report, 27 November 2003; Vol. 415, c. 150.]
In a sense, that theme has already started to run through this debate, because the final version of the document that will be put before the Heads of Government in Brussels this weekend is not available to us—indeed, it cannot be made available. I shall therefore stick to principles that on previous occasions I have enunciated to the House and which will guide my judgment and that of my right hon. and hon. Friends when we hear the outcome of the Brussels summit.
The first of those principles is that we, in common with the Prime Minister and his predecessor, believe that the United Kingdom should be at the heart of Europe. It is in the long-term interests of the United Kingdom to be a member of the single currency. One cannot escape a certain feeling of irony that the draft Bill on a referendum on the single currency should be published today, as nobody believes that it will be utilised before the next election. It is in the best interests of the European Union to have a treaty embodying a constitution that defines the respective powers of Brussels and the member states, and draws together the provisions of the treaty of Rome, the Single European Act, the treaty of Maastricht, the treaty of Amsterdam and the treaty of Nice.
If any Government propose to agree to a major shift in control or any transfer of significant powers from member states to European institutions, or to agree to any alteration in the existing balance between member states and those institutions, there should be a referendum of the British people. The draft treaty fulfils those criteria. As I have said on the four or five occasions when we have debated this matter in the past
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five or six months, there should be a referendum on the constitutional proposals that are likely to emerge from Brussels.
Angus Robertson: Will the right hon. and learned Gentleman give way?
Mr. Campbell: I should like to make a little progress before giving way in due course.
Our proposition on holding a referendum is entirely consistent with the support that my colleagues and I demonstrated for a referendum on the Maastricht treaty when Mr. Bryan Gould tabled an amendment. A number of Conservatives, some of whom are no longer MPs, also supported that amendment. Lord Ashdown was the first party leader to say that if a proposal were introduced to join the single currency, that would raise not just economic but political and constitutional issues, so it, too, should be put before the British people.
The Government have accepted the need for a referendum on a single currency. Indeed, why else would they publish the draft Bill today? The inference must be that they regard such a decision as having constitutional significance. In contradistinction, they do not make the same judgment about the Convention's proposals. I confess that I find it difficult to make that distinction, which appears to drive Government policy. A referendum of the kind that I have suggested would provide an opportunity to reconnect the people of the United Kingdom with Europe and make the case for Europe once again. In that regard, I share the sentiments expressed by the Foreign Secretary towards the end of his speech about the sense of vision that an enlarged European Union brings. If those brave Europeans who formed the European Coal and Steel Community in 1951 had been told that in 53 years' time there would be a European Union with 25 members, including those who, in 1951, were firmly behind the iron curtain and in thrall to communism, I doubt whether they would have believed that their sense of vision, however powerful, was capable of such implementation.
We need some stability in Europe, and there must be an end to the atmosphere of permanent cultural revolution in which Europe has existed for the past 10 years. A constitution would undoubtedly aid that objective. It is quite true, as others have argued—the hon. Member for West Suffolk (Mr. Spring), at least by implication, did so—that enlargement could take place without a constitution. However, I part company from the hon. Gentleman in my belief that that is not much of an enlargement. Indeed, a European Union so constituted and based on existing arrangements would be a recipe for sclerosis and ultimately instability. As I have said previously in the House, the Government are correct to seek to retain a veto on taxation, defence, foreign affairs, social security and own resources. There is common ground on both sides of the House about what the red lines should be. I also believe, as I have said on previous occasions in the House, that the Government are correct to seek to retain a veto on taxation, defence, foreign affairs, social security and own resources. In that regard, there is common ground in all parts of the House.
Angus Robertson: Is the right hon. and learned Gentleman aware of the consternation in the coastal communities of Argyll and Bute, Orkney and Shetland, Aberdeenshire and other parts of the country about the conservation of marine biological resources under the common fisheries policy being entrenched as an exclusive competence in the draft constitution? If it remains there, will it be the position of the Liberal Democrats to recommend a no vote in the referendum that he and I agree should take place?
Mr. Campbell: No, and I suspect it will not be the position of the Scottish national party, either. The Scottish National Party, I guess, like everyone else, will look at what comes out of Brussels in the round, consider what it regards as pluses and minuses and judge whether the final document justifies support. If the SNP takes the view that the hon. Gentleman has just expressed, it may find itself voting against a variety of proposals that it previously supported with some enthusiasm and which the people of Scotland might well regard as being substantially in their interest.
If I may say so, it is idle to speculate on how one would vote on a document that is not in final form and not before us. [Interruption.] The hon. Gentleman says from a sedentary position that the fisheries policy is one of his red lines. I do not remember him describing it as a red line on any of the previous occasions on which we have discussed the topic.
Angus Robertson: For the record—
Mr. Campbell: No. If the hon. Gentleman will allow me, I do not remember him using language to the effect that the fisheries policy was a red line and that the Scottish National party would urge the Government to adopt it as one of their red lines. If I am wrong about that, no doubt I will be corrected, but I have no clear recollection of him having made that point.
Mr. Ian Davidson: Will the right hon. and learned Gentleman clarify how enthusiastic the Liberals are about a referendum on the constitution? Will he tell us whether, as well as speaking for his party in the Commons, he is committing his party in the Lords to support a referendum on the constitution?
Mr. Campbell: I cannot commit my party in the Lords because it is composed of individuals who take their responsibilities seriously and who will vote as they think proper. As regards my enthusiasm, the hon. Gentleman has been present on the four or five occasions that I previously described. He will have noted that my enthusiasm is unlimited and that I believe there are constitutional implications. Indeed, in the principles that I set out a moment ago, I went out of my way to say that it was entirely consistent with the view that the Liberal Democrats have taken on the matter in the past.
Without rehearsing what I said earlier, I believe that where there is a material alteration in the balance between Westminster and Brussels, there is an obligation to put that before the British people. There is a political imperative as much as a constitutional imperative. If we want people to be supportive and to be—if the House will forgive the colloquialism—signed
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up, they are much more likely to be signed up if they believe they have had a hand in the decision-making process.
Against that background, I shall deal briefly with a number of issues that may feature in the discussions in Brussels, starting with the European security and defence policy. Much of the discussion in recent weeks has turned on the issue of a headquarters, although that is not formally part of the constitution that will be under discussion. I have previously expressed reservations about the need for a separate operational headquarters, and I have yet to be persuaded that there is not scope for some form of double-hatting. It is not unknown in NATO and other institutions for individuals to have two sets of responsibilities, which they may be called upon at different times to discharge.
It is helpful and hopeful that the Tervuren option has been eliminated. It is also a relief that all sides publicly acknowledge the primacy of NATO. It also appears no doubt I shall be corrected from the Treasury Bench if I am wrong—that the United States is satisfied by what is proposed, to the extent that it is no longer maintaining any objection. That has appeared to be Mr. Rumsfeld's position in the course of the past week. If that is so, it is an important indicator of the extent to which the proposals may be acceptable.
Mr. Straw: I do not presume to speak for the Government of the United States any more than I do for the Government of any other country, but I think it fair to observe that the United States Government appear to have been reassured by the discussions that took place in the North Atlantic Council and by the significant changes in the draft articles, which we led and which were agreed initially with France and Germany. They are now in the presidency proposals, and the right hon. and learned Gentleman referred to them.
Mr. Campbell: The Foreign Secretary spends more time with Mr. Rumsfeld than I do, and, although he does not speak on behalf of the American Government, I accept, as I think I am bound to do, the analysis, if I may put it that way, that he has given.
It is important to remember that we are talking about a hierarchy of operational control—first, NATO operations; secondly, Berlin-plus operations; thirdly, EU operations using a national headquarters; and, fourthly, EU operations from an EU headquarters. The last of those items seems the least likely. There is a sense in which the concentration on architecture obscures the fact that we should be concentrating on capability. From the characteristically trenchant interview that Lord Robertson gave yesterday morning on the BBC, it was pretty plain that the battle that he has fought over the period of his distinguished occupation of the position of Secretary-General has been about capability. I very much regret the fact that, when this topic is discussed, we spend more time on architecture than capability. If the position now is that there is no longer the same anxiety in the United States about what is proposed, it will be a substantial advance.
I believe that the expenditure of greater financial resources or the better spending of existing resources best secures an ESDP. One of the most interesting statistics to which Lord Robertson referred in

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yesterday's broadcast was that there are more than 1 million men and women under arms in Europe, but that at any one time a maximum of 55,000 can be put into the field. I have every reason to believe that that is a proper analysis, so a lot of time might usefully be spent on capability and, indeed, on embracing the principles of force specialisation, common procurement and interoperability, which are much more likely to give us an effective European defence capability than some of these occasionally arcane discussions about architecture.
I understand that it is expected that a security strategy will be adopted in Brussels. Those who have analysed Mr. Solana's proposals think that much more clarification is required of the circumstances in which Europe would be willing to use force. In some of the later drafts, the word "pre-emptive" has been taken out and the word "preventive" put in. Those are not simply questions of translation, as those words embody significantly different concepts. As far as Europe is concerned, by inclination, particularly since the second world war, and by economic necessity, we are tied to a rules-based approach to international affairs. It will be essential for the European Union to spell out what those rules are in order that a degree of predictability and confidence can be achieved in the strategy.
I understand that some discussion is going on about a mutual defence clause. I am agnostic on that, because I believe that it is unwise to embarrass countries with a tradition of neutrality, such as Austria, Finland, Ireland and Sweden, by insisting on a mutual defence provision that, as far as I can tell, almost exactly mirrors the provisions of article 5 of the north Atlantic treaty. Aside from the issue of legality, it is inconceivable, in the unlikely event that any member of the European Union were to be threatened or attacked, that other members of the EU would not give them military assistance if such assistance was requested. I understand that the neutrals have made the alternative proposal that instead of an obligation there should be a right to request assistance. That is entirely reasonable, because it reflects what would be the reality of the situation and has the consequence of not embarrassing those countries for which neutrality is a matter of considerable importance.
Talk of agnosticism leads me to my next point. I hope that the Government will resist any efforts to make the preamble to the constitution refer explicitly to one religious faith rather than another. There is a variety of religious faiths in Europe, as well as many people who, for their own legitimate reasons, have no faith at all. The comments of the hon. Member for West Suffolk have a particular resonance in that context, because Turkey's entry into the European Union is highly desirable not only for Turkey, but for the European Union. It is worth reminding ourselves that Turkey is a Muslim country with a secular constitution. It could easily find a commitment in the preamble to one form of religion to be an insuperable obstacle. Such a commitment is unnecessary, first, because there is a variety of traditions in Europe and we should not single out one and, secondly, because we should not have a preamble that might well prove to be an insuperable obstacle to a country whose ultimate membership of the European Union—on the assumption that it meets the
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Copenhagen criteria and makes the necessary economic reforms—is entirely in the interests of the European Union.
I would be interested to know what is the Government's position on voting rights. I hope—not piously, but wholeheartedly—that Britain's apparent support for Poland is not based on some narrow political interest. The Nice formula expires in 2009, and it would surely be sensible to review it now. When the review of the finances of the European Union takes place in 2007, it may not be easy to get a settlement if Germany, a net contributor whose attitude will be pivotal, still nurses a grievance that with twice as many citizens as Poland she has virtually the same number of votes. There has to be some effort to look ahead to try to anticipate possible difficulties. Of course, one understands the sensibilities of a proud nation such as Poland. but I would give two pieces of advice to the Polish Government, if I may be so presumptuous: first, they need to take a long view and, secondly, it is very important in these matters not to overplay one's hand.
On foreign policy, there is no doubt that where common positions can be agreed the European Union is greater than the sum of its parts. Assuming that trade is part of foreign policy, I am in no doubt that the European Union's position on the American steel tariffs was successful because EU retaliation, as permitted under the World Trade Organisation rules, constituted a much greater threat to the United States than anything that individual countries might have mustered. Accepting that fact is wholly consistent with the view that the Italian proposal for the extension of qualified majority voting to foreign policy is inappropriate. In my judgment, foreign policy should rest here, just as defence policy should rest here. Those who take a contrary view say that there is an inherent weakness in that position, because it means that Malta, for example, will have a veto. The argument is that the smallest country would be able to thwart the most powerful. That could well lead to frustration but, in my view, the principle of retaining national control over an issue of such importance clearly overrides any such disadvantage.
I have some sympathy with the Government in this debate, because it is necessary for them to fulfil their obligation to inform the House. Inevitably, however, they cannot reveal their hand, except on those issues on which they have already said that they will not give ground. They cannot conduct a public negotiation across the Floor of the House of Commons in advance of the weekend's deliberations. At the risk of overstraining a theatrical or musical metaphor, this debate is not really an overture to Brussels, but something between a dress rehearsal and a preview. We shall have a chance to assess the Government's performance when they report back next week to the critical audience of the British people.
It is true that, technically, we could do without this Convention. There have been reports—I have no doubt that they will be denied—of an apparent difference of emphasis between the Secretary of State and the Minister for Europe, but I would say to them that it is highly desirable that the Government should do all in their power to achieve a settlement that is in Britain's interests. A poor settlement would be worse than no settlement at all, but there is often a rhythm or a time for these issues, and if we were unable to reach an agreement

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this weekend it would leave the process open-ended. It would be a brave man or woman who would then predict when a settlement would ultimately be achieved.
I see that the hon. Member for Birmingham, Edgbaston (Ms Stuart) is in her place, so I shall make just one last point. I was a little surprised by her unexpected burst into print, but I suppose that we should congratulate her on overcoming her natural shyness and modesty in these matters. I feel that what has been attributed to her struck an unduly pessimistic note. I have not yet read the Fabian Society pamphlet, but I shall take an early opportunity to acquire a copy and to read it. It occurred to me that we did not hear the reservations that are now being attributed to her during the consideration of these matters by the House.
Mr. Gerald Howarth: She has seen the light.
Mr. Campbell: Perhaps that is entirely appropriate, as we approach the Christmas season.
I do not share the pessimism that is attributed to the hon. Lady, and neither do my right hon. and hon. colleagues. In proper terms, the constitution is in the interests of the European Union and the United Kingdom, and let us hope that that is what will emerge from Brussels this weekend.
4.22 pm
Ms Gisela Stuart: First, I should like to reply to the right hon. and learned Member for North-East Fife (Mr. Campbell). If he had been in some of the numerous committees at the intergovernmental conference and at the Convention itself, he would have heard many such comments over the past nine months—[Interruption.] And here as well.
While the Foreign Secretary is still in his place, I would like to remind him—if I may be so presumptuous—of some of the things that happened at the Convention, which he might find helpful. If he is told by Convention representatives that it was the Convention that had democratic legitimacy to arrive at compromises and conclusions, he will be justified in rebutting that presumption and saying, "No, it is Heads of Government who have democratic legitimacy to make those decisions." Those who were at the Convention could not bind the institutions that sent them, and the right and proper place for making such decisions is this weekend's meeting.
I would also like to put on record that, in many parts of Europe, the document is being described as a deeply British document. The reason for that is that one of the most significant institutional changes—the creation of the President of the Council—was strongly supported by the British to begin with, and accepted at a later stage with some reluctance, particularly by the smaller countries. I must offer a word of caution. Although that function significantly strengthens the institution that represents member states, it does not necessarily strengthen the representation of the individual member states. I simply point that out. There is a strengthening of that institution, which is undoubtedly recognised.
This weekend, the Secretary of State should keep in mind one thing about the document, which is that it contains three elements. One simplifies the procedures, whether those involve the new legal instruments or the
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decision making of the Council. All that is absolutely essential and it will be beneficial for enlargement. It is quite uncontentious and there would be a great danger if it were lost. The second element brings together various treaty provisions made over the past 50 years, which again I think is an achievement. It should not be lost.
What is contentious is the third element—the political one. If the Government do not feel at the end of the weekend that the political aspects are in Britain's and the Union's interest, they should not agree. It is perfectly possible to move away from the IGC and maintain the elements that are essential for enlargement. Here, I want to say something about the debate on a superstate. In an odd way, I am agnostic about it. If my children and grandchildren want to live in a United States of Europe, it is not up to me to say whether they can or cannot do so, if it is possible to create one.
I do not think that it is possible to create such a superstate, given our thousands of years of history and the commitment of the member states to the nation state but what would be damaging is an attempt to create a superstate that was contrary to a lot of traditions in Europe. It would be damaging for Europe if a small group of people tried to create something that, practically, would not work in the end. That is particularly so on the eve of enlargement, when it is so significant that those countries are coming in.
We must respect the Union's new motto, which is, "United in diversity". To respect that diversity, we need to pay far greater attention to principles of subsidiarity and proportionality. If I have one criticism of the constitution and the document as it stands, it is that I very much hope that the Government, either in the IGC or at a later stage, recognise that that aspect needs to be respected far more in practice.
That takes me to the role of the House. There is, undoubtedly, disengagement among the public in their support of the EU and the House needs to recognise that we have been guilty in respect of, or accomplices in, that disengagement. If half our domestic legislation derives from some Brussels initiative and we do not debate it, people will put all their worst fears and ignorance in one envelope and call it "Brussels", assuming that nothing good ever comes out of it. A lot of good comes out of it, but we need to start to debate it seriously here.
We spend five days discussing the Queen's Speech, which contains the Government's annual legislative programme, but we spend no time discussing the Commission's annual legislative programme. It is about time that we spent equal time on discussing the Commission's programme when the European Parliament discusses it. We had special sittings of the Standing Committee on the Convention and the Standing Committee on the Intergovernmental Conference, but even though this Parliament is the world's second-largest legislative body, with more than 1,000 Members, we struggled time and again in those sittings to be quorate—to find the 13 Members required to be present. Given that six of them had to be there and had no choice, we had to find only another seven.
Mr. Spring: The hon. Lady makes a good and interesting point on scrutiny of Commission proposals, but should this Parliament not like those proposals would she be satisfied as to the adequacy of the so-called

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vetting mechanism, as opposed to some form of rejection mechanism? Does the principle of subsidiarity need to be reinforced by some collective veto for national Parliaments of unwelcome Commission proposals?
Ms Stuart: I would certainly have preferred a stronger mechanism, but the real danger is that of mistaking the little pocket of power represented by a veto for influence. We shall have a problem if we do not take note of Commission proposals early enough here, regardless of whether they are welcome or unwelcome. The use of a red card at the end of the six-week period would constitute a blunt and brutal tool. The threat is actually greater than any influence that it might carry in itself.
Let me give a practical example. Earlier this year, the Italian presidency presented proposals on hallmarking, and industry in Britain began to alert MPs and MEPs. There was a very effective campaign involving MPs and MEPs with assay offices in their constituencies, who told the Government that they would not support the proposals. Eventually, the proposal disappeared. During the last six weeks, no red card would have been as successful as a mechanism enabling early note to be taken of what was coming, and the subsequent forging of alliances at Westminster and with Brussels.
Angus Robertson: Does the hon. Lady agree that, because of the nature of shared sovereignty, in many contexts, it is shared between Brussels and Holyrood rather than the House of Commons? Should not the Government give careful consideration to an early-warning mechanism ensuring that those elected north of the border to deal with these issues can have their rightful say?
At a time when the Government are saying that they want more transparency in the EU and welcoming the opening up of Council of Ministers meetings, is it not time for concordats in the UK to end the confidentiality of relationships involving European matters between the UK Government and the devolved Governments?
Ms Stuart: I must confess that I do not know enough about the concordats to comment on the second question, but I recall attending a Council of Ministers meeting with Scottish and Welsh colleagues. The important part of the proceedings is not one's arrival at the table in the company of a Minister from a devolved Administration; the important part always happens six, nine or 12 months earlier.
The House of Commons needs to be much more strategic and involved much earlier when it comes to Commission proposals; otherwise, we shall see more of what the latest Euro-barometer figures have shown us—about 48 per cent. support for the EU. The problem is disengagement and ignorance rather than genuine concern.
Let me say something about the Commission as an institution. I assume—I rather fear—that, as a result of one of the compromises reached at the IGC, each country will end up with its own Commissioner, and we shall not succeed in reducing the size of the Commission.
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There is a logical incoherence in the fact that, while the Commission is supposed to be a single body representing the interests of the Union and Commissioners are forbidden by the treaty to take or to seek instructions from member states, that single body retains the vestiges of intergovernmentalism. A much smaller Commission would be far more effective. If we fail to reduce the Commission's size, as I believe we will, we should at least ensure that a duty of good governance is placed on it. It is massively disappointing that, for the ninth year running, the Commission has not signed off its accounts. If the Commission were a company, I know what would have happened to it by now.
I wish all who go to the IGC a short weekend, although I doubt that it will be short. I ask them not to be sidetracked by meaningless language such as, "If we do not agree to this, we will be in the slow lane of Europe". What does that mean, other than suggesting that it is desirable to be in the fast lane? None of that makes any sense. What does make sense, in the interests of the European Union and of Britain, is that that document be seen as a good one that provides a sustainable structure. If it is not seen as such, it is better not to sign up to it.
4.34 pm
Mr. David Heathcoat-Amory: I am very pleased to follow the hon. Member for Birmingham, Edgbaston (Ms Stuart). I often found myself on the same side of the argument as her in the Convention on the Future of Europe, on which we both served. The House would expect that, because we were both sent from here to defend and to promote the interests of parliamentary democracy, and more generally to advance the principle of self-government. So it was natural that we agreed more often than we disagreed, and such agreement has been reflected in her comments this afternoon, most of which I support.
As an ordinary member of the Convention, I was often exasperated to discover that the drafting and many of the ideas that we had to consider came from above—from the praesidium—rather than from the working parties and our deliberations in the plenary sessions. So the bottom-up model that we were promised was in fact replaced by a top-down, rather familiar European model of decision making. It is apparent from the hon. Lady's recent pamphlet and from her writings that she, too, suffered from this problem in the praesidium. Many of the ideas advanced did not arise from below, but were promoted and initiated by the presidency, or by the European bureaucracy. But the hon. Lady certainly did her best to protect the interests of national Parliaments generally, and it is a matter of regret to her—as well as to us—that she was unable to strengthen significantly the subsidiarity provisions that, after all, have been part of treaty law for more than a decade.
We were promised that the constitution would provide an opportunity to entrench those provisions more assertively, and to give national Parliaments a real right to prevent the adoption of measures that are clearly against our vital interests. However, none of that is apparent in the draft that we are considering. We have only the right to object and to request a review if the subsidiarity principle is broken, which is really nothing more than we have at the minute. Parliament is already

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entitled to make objections, and the Commission is entitled to reject them. That situation, I am afraid, will continue, and I greatly regret the fact that the British Government have not made this a red line issue by backing up their assurances to this House with real negotiating vigour.
It was exactly two years ago that heads of state published the Laeken declaration, which drew attention to severe defects in the European Union, to public disillusionment with it, to the secrecy, and to the lack of effectiveness and efficiency. It declared that Europe was at a crossroads, and I agree with that analysis. Those same heads of government are now faced with a choice—one that they may well be making this very weekend. It is a choice between an open and democratic Europe that is closer to its citizens, as mandated by the Laeken declaration, or accepting the European constitution in its current form. That constitution, I am afraid, has all the familiar hallmarks: it is technocratic, centralising and undemocratic. That is the stark choice now facing the states of Europe, and I do hope that the Government, even at this late stage, will have the courage to go back to the instructions given to us all when the declaration was first published.
Of course, originally the Government did not want a European constitution at all. That was their established position, and indeed, Laeken alluded only elliptically to the possibility of a European constitution.
It is perhaps amusing—in a death-rattle sort of way—to note that objections to a constitution are still being expressed by Ministers even this week. The Guardian featured an article about the Lord Chief Justice, who advanced the proposition for a written constitution in this country. However, the Lord Chancellor—Lord Falconer—was definite in his objection to the very concept of a constitution. I quote:
"'This is not up for discussion,' a spokesman for the department said. 'If we had a written constitution it would be open to judges' interpretation and lead to a clash between judges and politicians.'"
I rather agree with that, but does the noble Lord take the same view about a written European constitution, which will have exactly the same in-built conflict between the expressed wishes of elected representatives and that of judges, particularly when the constitution that we are likely to adopt is longer, and certainly more obscure, than the treaties that it will replace?
One of the requirements at Laeken was to simplify, but the document that we have to deal with now is longer than the text that it replaces. So we are getting a written constitution, but, oddly, not one that we are writing ourselves. We are importing a written constitution, and I know of no other country in the world that has ever done that. We were told at the start to act like the founding fathers in Philadelphia in 1787, but they wrote their own constitution for their own country. We have participated in a written constitution, which we are going to adopt whether we like it or not.
Mr. Cash: Does my right hon. Friend agree that one of the worst aspects of the arrangement is that the European Court of Justice will be given such extensive power to interpret the constitution that it—the Court
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itself, let alone the judiciary—would become the pre-eminent force in driving European integration forward?
Mr. Heathcoat-Amory: Yes, I summarise the process under way here as powers being transferred from people we elect and can get rid of to people we do not elect and cannot get rid of. I notice that the British judiciary is complaining about Government plans for a supreme court, but the real supreme court will not be in this country: it will be the European Court of Justice. I agree with my hon. Friend about that.
When it became apparent that the Convention on the Future of Europe was drawing up a constitution, the Government then took fright and eventually—I would say rather belatedly—tabled more than 200 amendments. I have a copy of all the amendments here. Sadly, only a small number—about 11—were accepted in the Convention. and the rest have simply been quietly forgotten and dropped. That is a serious matter.
To take one example, asylum is a big issue, which featured prominently in the Prime Minister's party speech this year when he promised legislation and to take control of a system that had clearly broken down. The Queen's Speech promised legislation on asylum and immigration. However, it is the European constitution that will take over responsibility for that area of policy. It contains a long section on all the legislation that can be adopted by majority voting in the new Union under the terms of the constitution. The Government representative in the Convention tabled an amendment to delete those provisions and the right hon. Member for Neath (Mr. Hain), who was the Minister for Europe at the time, emphasised the importance of the issue by saying that it was a "fundamentally important" amendment. Why, then, does it not appear anywhere in the list of red lines in the White Paper? It has simply been abandoned.
The Government do not really understand that the very fact that asylum and immigration will be a shared competence of the new Union means that this House will have only a residual right to legislate in that area. My hon. Friend the Member for West Suffolk (Mr. Spring) asked the Foreign Secretary earlier in this debate what he understood by the term "shared competence". The Foreign Secretary did not know. He said flippantly that it meant a competence that was shared, but the informed answer with which he might have enlightened the House is that when the Union legislates in an area of shared competence, member state Parliaments cannot. It follows that because freedom, security and justice are listed as a shared competence, alongside almost every other policy area that the House addresses, when the Union starts to legislate, we cannot. The promises of the Prime Minister in the Queen's Speech to bring forward Bills are empty. because at the same time his Ministers are agreeing to a European constitution that will prevent him from doing so.
I challenged the Prime Minister on that point at Question Time a month or two ago. He did not appear to know the answer, so I wrote to him. He wrote back a semi-abusive reply, questioning my motives. I wrote to him again, and I understand that my query has now been forwarded to the Foreign Office. I am still waiting for a reply, but it is now very late in the day. We have

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only a few days before everything is signed. It will then be taken through the House on a whipped vote, and it will be too late.
Many of the issues that arose in the Convention on the Future of Europe that the Government complained about have been forgotten. They are no longer red line issues that the Government have promised to defend in the final days of the IGC. I was glad that the Foreign Secretary confirmed that he would still veto the red line issues on the compulsory co-ordination of economic and employment policy. I hope that the same is true for the budget rebate, which is clearly under threat. The draft constitution refers to the modalities of the Union's resources being subject to European laws by majority voting. We know that the Treasury does not like that, so I take it that that is still a red line issue, as is QMV, in any form, on tax and social security. However, those issues remain in the final draft as we enter the endgame.
At least the Government have dropped the absurd conceit that the constitution is only a tidying-up exercise. They have finally admitted that it deals with some big and important issues that they will insist on changing. I am still suspicious that we may be being softened up for a massive fudge at the end, because the Government have been so bad at defending their proposals in Committee. For example, on 20 October, we discussed article 10, the so-called primacy article. It establishes that the constitution, and all the laws flowing from it, shall have primacy over the laws of member states. That is a bald and unqualified assertion of the primacy of the constitution, and all its objectives and obligations. We know that the Government do not like the primacy clause because they tabled an extensive amendment to it in the Convention on the Future of Europe, but they seem to have forgotten that. In the Committee, we pressed the Minister for Europe on the point. He said, in reply to my hon. Friend the Member for Stone (Mr. Cash),
"the hon. Gentleman…invites me to become a Law Officer. Not having any legal qualification in or ministerial experience of that area, I am not sure that I should trespass on that territory."—[Official Report, Standing Committee on the Intergovernmental Conference, 20 October 2003; c. 20.]
He could not answer that point. So the European Scrutiny Committee asked the Attorney-General to come to the Committee to debate those matters, but he has just written to us saying that he will not do so. The Government are thus either unable to answer the points that we are making or do not want to answer them.
Mr. Spring: That is precisely the point. It is disgraceful that the Foreign Secretary had no idea what something as important as shared competences actually meant. We are constantly told that the primacy of EU law is already incorporated in the treaties and that its incorporation in the constitution is thus of no consequence. My right hon. Friend has shown how the Government fought against answering, but is not it extraordinary that the Minister for Europe is so ignorant of one of the cardinal elements of that constitutional arrangement? That is typical of the sloppiness with which the Government have approached the whole matter.
Mr. Heathcoat-Amory: My hon. Friend is right and there are many more such examples. The Minister for
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Energy, E-Commerce and Postal Services appeared before the Committee to discuss the articles relating to trade and industry. We asked him about competition policy, as all competition policy will become an exclusive competence of the Union, even domestic competition policy—the rules to promote competition in our own jurisdiction. Under the terms of the constitution, competition policy unambiguously becomes an exclusive competence of the Union. When we asked the Minister about that, he replied lamely that he would go back to his office and write to us later. Well, we are still waiting for that letter.
The Minister for Europe (Mr. Denis MacShane): As my comments have been prayed in aid, would the right hon. Gentleman also care to read into the record all my lengthy replies to the questions put on the primacy of the Union, rather than selecting the one sentence in which I announced that I was not a qualified lawyer? Perhaps he will read everything that I said so that Hansard can record my reply, otherwise the point he made is neither fair nor accurate and is really quite mendacious.
Mr. Heathcoat-Amory: That is a big word to use against a colleague and I certainly should not use it against the Minister in return. I would not say that he is my favourite living author, but I read what he writes. However, that is no substitute for debate. I shall not accept a mere letter from a Minister defending the position; we want to scrutinise it and subject it to debate. That is the point of Parliament and the object of the European Scrutiny Committee. It was that that the hon. Gentleman denied us when he lamely said that he was straying into legal matters and that he had no answer. Then, when we asked the Government's legal man to speak to the Committee, he said that he would not come. That is my objection.
Mr. MacShanerose—
Mr. Heathcoat-Amory: I will give way again.
Mr. MacShane: The right hon. Gentleman is very kind. I withdraw any adjective that is inappropriate for what has been a friendly and well-mannered debate.
I was actually asking the right hon. Gentleman to repeat not what I said on the issue in a letter but what I said in debate, in Committee, at very great length. We held a proper discussion and I am happy with the points I made. I am happy to repeat them all in my wind-up, although that may take much more time than I shall probably be allotted.
Mr. Heathcoat-Amory: Of course I have the account of the debate—I was there. I know what the hon. Gentleman said and I have read it subsequently, but it did not satisfy us. We wanted to probe and to get to the bottom of the matter. We tried again today when the Foreign Secretary gave us another unconvincing account of the primacy clause. We do not accept his view

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that the constitution merely establishes that the case law of the European Court of Justice should be entrenched in it. Apart from anything else, case law is, by definition, dynamic—it changes—so we are committing ourselves for ever to accept the case law of the ECJ. So much for the idea that the constitution will bring finality and certainty to the division of powers between member states and the Union.
Mr. Wayne David: Much of the right hon. Gentleman's argument is based on the premise that we are discussing a constitution, but does he accept what Sir John Kerr has said—that we are in fact discussing a constitutional treaty?
Mr. Heathcoat-Amory: I do not accept that. The document is called a constitution—[Interruption.] I know that the Government call it a constitutional treaty but if the hon. Gentleman consults the document, he will find that the people who drew it up call it a treaty
"establishing a constitution for Europe".
It is a constitution; it has always been called a constitution, so we are entitled to believe that it is a constitution.
Lady Hermon rose—
Mr. Heathcoat-Amory: I must press on because other hon. Members wish to contribute.
Lady Hermon: Will the right hon. Gentleman give way on that point?
Mr. Heathcoat-Amory: Very well, I will give way once again.
Lady Hermon: I am very grateful indeed to the right hon. Gentleman for giving way, and I apologise for not being present at the beginning of the debate. I had to take part in the Speaker's Committee on the Electoral Commission. May I gently remind the right hon. Gentleman that the principle of the supremacy of Community law was established by a very famous case, with which I am sure that he is familiar: Costa v. ENEL in 1962?
Mr. Cash: 1964.
Lady Hermon: I thank the hon. Gentleman. I stand corrected, the year was 1964—some years before the Conservative party acceded to the European Community, so the principle of supremacy was well known to the Conservative party and the then Prime Minister when the European Communities Act was passed in 1972.
Mr. Heathcoat-Amory: I am not going to engage in a long legal wrangle with the hon. Lady, but I ask her to glance at the article in question, which says that not just the law, to which it refers, but the constitution itself has primacy over the laws of member states. Even if one accepts that the treaty law has a kind of superiority, what we are debating now is whether that law can automatically have primacy over the domestic law that we make in the House.
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Under our constitutional arrangements, Union law only has effect in domestic law by virtue of the European Communities Act 1972, and it has been always understood that we can repeal or amend that Act to disapply EU regulations, laws or directives. Will that still survive if we sign up to a constitution that contains an unqualified assertion that the constitution and all the laws that flow from it have primacy over the laws of member states? That conflict is unresolved. We were seeking to ask the Government about that, but they have refused to answer so far, and we are entitled to our suspicions about the fact that they are not coming clean about some of the fears that they may harbour about the future direction of court judgments, both in this country and in the European Court of Justice.
Mr. Cash: Will my right hon. Friend be kind enough to give way on that very point?
Mr. Heathcoat-Amory: I will give way once again to my hon. Friend.
Mr. Cash: On 8 December, I asked the Foreign Secretary for a precise answer to the very question that my right hon. Friend has just put to the House. In effect, I asked him which would prevail—the European Court of Justice, or the United Kingdom courts—in relation to an Act subsequent to the constitution Act but inconsistent with it? The answer that I received was not only that it would be
"existing European Court of Justice case law"—[Official Report, 8 December 2003; Vol. 415, c. 245W.]—
but that the constitution "should be interpreted accordingly." In other words, it would be up to the United Kingdom courts to interpret whatever emerged from the process and that they would be bound by the European Court of Justice. That is a constitutional revolution.
Mr. Heathcoat-Amory: My hon. Friend, with legal training, makes the point very well. A massive transfer of power and authority is taking place under the constitution. We have before us a revolutionary document, so we need to scrutinise its contents with the very greatest care. We have been unable to do that because Ministers have refused to give straight answers to what we consider to be straight questions.
I have no time now to go into foreign policy—particularly the establishment of a European Foreign Minister, to which the Government no longer object, and the fact that our United Nations Security Council seat must be given up to that Foreign Minister on request—but I want to squash a myth that has been circulating: the Commission will somehow lose relative power to the Council of Ministers under the constitution. It is true that a lot of squabbling is going on about the number of Commissioners. It is rather typical of those in the European elite that they appear to be more interested in who gets the jobs at the top and who becomes President and how many Commissioners there will be than in the other powers of the constitution.
The fact is, however, that under the constitution as it is drafted the Commission gets more and stronger powers. It will get explicit executive powers, powers of enforcement, a monopoly of initiative and the ability to

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negotiate and sign international agreements on behalf of member states across a wide range of policy areas. The Foreign Minister for Europe will be a member of the Commission, and the Commission will get new lawmaking powers in particular to make what will be called a non-legislative Act, which will be binding on everybody—all the people whom we represent—without the intervention of this House. It is an abomination that the least democratic institution in Europe, which sits in private—none of its members are elected—should be able to pass non-legislative Acts as if they were Acts of Parliament. That is a new power that has been put into the constitution. It is therefore a complete myth that the Commission is in any way to become a secretariat supporting and servicing a stronger Council of Ministers.
The truth is that the constitution represents a massive transfer of power upwards to the Union. There are more policy areas in which it will operate, of which I have mentioned some. There is more majority voting in around 37 new areas—I have asked the Government for a precise number, but they cannot give it to me. Majority voting becomes easier under the new formula. In addition, all the people at the top—all the existing EU institutions—become more powerful. The only people who do not become more powerful are the ordinary people of Europe. That democratic deficit—that disconnection between ordinary citizens and European Union institutions—will become worse not better. We have not brought Europe back to the people; we have taken more powers away from the people and the national Parliaments and given them to the new Union.
Nor does the constitution in any sense bring finality or certainty to the division of powers. On that I disagree with the Liberal Democrat spokesman, the right hon. and learned Member for North-East Fife (Mr. Campbell), who has had to leave the Chamber. The incorporation of the charter of fundamental rights opens up a whole new front on new powers to be decided for us. Those shared competences, which I and others have described, again open the way to huge new powers and competences being acquired by the Union at the expense of member states. Our instructions to create that democratic Europe have therefore been completely contradicted.
I end with a solution—I never want it thought that I simply criticise the Government or am in any sense solely negative. Let the Prime Minister give the final decision on all this to the people. After all, it is their rights that are affected. The constitution starts with the following words:
"Reflecting the will of the citizens and States of Europe".
Let us ask the people what they think. In practical terms, and in terms of hard-headed, negotiating tactics, declaring that he will have a referendum would enormously strengthen his bargaining position in the endgame at the intergovernmental conference. He would then not simply have to convince a supine Cabinet and whip the proposals through the House of Commons; he would have to convince his fellow citizens that he had done a good job for them. On those grounds, and on grounds of high principle, he must take that democratic road, however late in the day, and declare that there will be a national referendum.
5.3 pm
Tony Worthington: The right hon. Member for Wells (Mr. HeathcoatAmory) said that he did not have time to go into foreign policy. I want to do so, although I doubt that I will have the same concerns as him.
I want to talk about one aspect of the proposed constitution: the relationship between foreign policy and development policy—the world of international development. I do so as a supporter of the Department for International Development, which has been one of the great successes of this Government. What I fear is that some of DFID's achievements may be undermined, or put under some kind of threat, by the arrangements that are being made in Europe. Those arrangements do not have to lead to a step backwards, but I would like an assurance from the Minister that such points are being taken into account.
DFID has been a great success. That is the experience of members of the Select Committee. Every one of them, of whatever party, feels that DFID has been a major step forward. When we go to the countries to which we give assistance, they are lavish in their praise of DFID in comparison with other international development departments. When we go to the World Bank, the International Monetary Fund or any other international forum, we find that DFID is considered a great step forward. Within a very few years, it has become the pre-eminent international development department in the world.
It was right for the Overseas Development Administration to stop being a section of the Foreign and Commonwealth Office and for it no longer to be controlled by the FCO. However, under the EU, the development and co-operation remit will be moved back firmly to the control of the equivalent of the FCO. That remit would become part of the foreign policy area that is considered by the treaty. Activities in the common foreign policy other than development issues would become pre-eminent and those issues would be downgraded, which would be unfortunate.
EU development assistance and that provided by each of the EU's individual nations come to more than half the development assistance made available in the whole world. If development assistance becomes subservient to foreign policy considerations, I fear that development issues will take a step backwards.
Let me refer to some of the gains that we have obtained from the establishment of DFID. The first and most important is that aid and development have become principled and focused. Our statute now says that the purpose of development aid is to end poverty. We hold to the millennium development goals for ourselves and were influential in saying that they should become an enormous global commitment. It is DFID's ambition that 90 per cent. of our aid will go to the poorest countries by 2006.
British development money cannot be used for purposes other than the reduction of poverty. The International Development Act 2002 insists that development policy is maintained and operated on the basis of its developmental principles, institutions and instruments. That means the reduction of poverty, which is a very simple and powerful purpose.

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We use development assistance for development. It is a long time since the Pergau dam, when aid money was used to provide sweeteners for trade or foreign policy goals. It was important that DFID broke free from the FCO and established its own mandate. I am not criticising the FCO, which has different goals and purposes, but it was important to give development its own pre-eminence and budget.
We banned tied aid so that it became clear to all concerned that the reason for development assistance was not the furthering of British industry, but the needs of the recipient country. That is in total contrast to the United States Agency for International Development, whose money is spent on American goods. It makes it clear that its purpose is to further American foreign policy goals. The principal recipient of the assistance provided by USAID is Israel. That would not happen under our policy, because our goal is the relief of poverty. For example, we would not write in provisions on assistance such as those introduced by the Americans when they consider giving AIDS money to an African country. They may say that it is a condition of the aid that the recipient country's Government buys American genetically modified food, but such an approach is anathema to us. We would not say that a country must embrace American goals before it may receive assistance.
DFID did more than just establish its independence, because the fact that it became independent brought other big players in the British Government along with it. The alliance between DFID and the Chancellor of the Exchequer has been enormously important in getting momentum behind debt relief. DFID does not go round the world as a small and marginal Department. It always has a key economic Minister involved, which is probably why its budget has increased more quickly than those of other Departments. The Chancellor's international finance initiative is the world's only show in town if we are seriously to increase aid, which needs to be done, and achieve the millennium development goals.
The situation in Britain is different from that faced by Development Ministers in other countries. The common position of European countries is similar to the one from which we moved because their senior Foreign Ministers are generally responsible for all external relationships, including development co-operation. European development policies frequently resemble foreign policies rather than development or aid policies.
During the Doha round, there could be no doubt that the Secretary of State for Trade and Industry was fully behind DFID in attempting to deliver fairness to the poorer nations of the world and against the sickening unfairness with which richer countries treat trade. The sustainable development goals of the Department for Environment, Food and Rural Affairs are based on the same principle. It would be interesting to hear about how the Minister for Europe is working actively with DFID to pursue the millennium development goals. Are the goals at the heart of British foreign policy? I shall not be critical of him if his answer is no or say that that is wrong, but if it is his answer, there is not a natural fit between foreign and development policy. I am worried that, as the European constitution develops, we will lose what we have gained.
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I praise the European Development Commissioner Poul Nielson for his contribution over the past few years. He had to work extremely hard to improve the EU's performance on development, and it has improved modestly. He has had some success in asserting development priorities and his policy has been similar to DFID's policy of pursuing the millennium development goals. Who or what will succeed him? He inherited a situation in which development policy was subsumed by foreign policy and great patience was required before the pledge of European development money could be fulfilled. There were multiple Development Commissioners and the allocation of assistance reflected a requirement to keep the neighbours of Europe happy rather than a consideration of need.
The tying in of development and foreign policies could be a major step backwards. Although there is European commitment to the millennium development goals to end poverty, only just over 40 per cent. of European development assistance goes to the poorest countries and the situation remains unsatisfactory. The head of the Overseas Development Institute, Simon Maxwell, gave evidence to the House of Lords European Union Committee. He pointed out that, in 2002, India, which has one of the highest concentrations of poor people in the world, received €14 million in new commitments and that Bangladesh received €32 million. Incredibly, Morocco received €124 million and Romania received €696 million. How can it be justified that Mauritania—a small country—received 15 times more than India in new commitments from the European Union?
In Europe, where the development function has not been separated from the foreign policy function, aid money is not put to best use. My concern is that the gains made by Poul Nielson and those working with him will he lost by aid being returned to stand securely under the foreign policy heading—after all, international development is an alternative form of foreign policy, another means by which we interact with the world. DFID has been extremely successful in that respect, but there is a huge difference between the foreign policy pursued by the United States and that advocated by ex-President Havel of the Czech Republic. Havel said:
"The time when Europe conquered the world is over. I hope the time is about to begin when Europe will stand as an inspiration to other parts of the world. As a source of effective assistance and as an example of how people and nations can live together in peace and co-operation using the world's resources with caution and mutual support."
That is what development assistance should be about; it is not the language of common foreign and security policy. There can be no doubt about the purpose of American foreign policy: it is to pursue the military, business and resource interests of the United States. It is as simple and as brutal as that. However, that form of foreign policy is incompatible with development policy and rests very uneasily under that heading.
Mr. MacShane: I draw my hon. Friend's attention to the White Paper "UK International Priorities: A Strategy for the FCO" which was presented to Parliament last week by my right hon. Friend the Foreign Secretary. I do not want to go into the details, but on page 39 my hon. Friend will find the language that he seeks in respect of progress towards poverty

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reduction, sustainable development, international finance facilities, and the New Partnership for Africa's Development. All that is at the heart of British foreign policy.
Tony Worthington: Perhaps the Minister can say where else in that lengthy document the issue is mentioned. The point is that it contains a token reference to overseas development, but the rest of the document is devoted to other purposes of foreign policy. Obviously a reference had to be made in the Foreign Office paper to matters such as sustainable development, the poorest countries, and the millennium development goals, but if the paper that I have in mind is the one that he cites, it contains little elsewhere about development goals.
Let us consider EU enlargement. That in itself is welcome, but it must be clear that the new 10 member states will come in with their own claims for assistance and for agricultural and military support. The focus of attention in the Community will swing inwards. As the new members join the EU, a new group of neighbours who want EU assistance will come closer. I do not oppose that, but we must not call the provision of such assistance international development.
Our aim in our Budget is to devote 0.7 per cent. of our income to development assistance. It must be made clear that that money is for the poorest in the world in pursuit of the millennium development goals. That funding must not be damaged by foreign policy expenditure robbing the development bank. If assistance is to be given—as it will need to be—to neighbours or those now inside the EU tent, it must not come from the British allocation that we intend to go towards helping the world's poorest people.
Lady Hermon: Great play has been made of the fact that the European constitution gives the European Community the capacity to enter into international treaties but, if my memory serves me well, it could do so before the constitution was drafted. In fact, it signed up to the Lomé convention to help poorer nations. Would the hon. Gentleman's concerns be answered if, following the introduction of the new constitution, the enlarged European community entered into more international treaties such as the Lomé convention to help the world's poor?
Tony Worthington: That is a different ball game. Funding for the Lomé convention, which was replaced by the Cotonou agreement. was not included in the EU's general budget, and was not subject to scrutiny by the European Parliament. The Minister may wish to tell us whether, in the light of what the hon. Lady said about the Lome convention, he favours the budgetisation of the Cotonou agreement. Those special agreements will lose value over time if the Doha rounds come to a successful conclusion because they provide a privileged position for some poor countries, but not others. Doha, if it is ever successful, would bring about an agreement on a principled basis rather than on the basis of previous association with European states. That is another interesting matter that deserves consideration.
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There are concerns about humanitarian assistance under the constitution. I do not mean all development assistance, but the narrow area concerned with emergency relief because of hunger, flooding, war and so on. It is important that humanitarian relief is independent and not subservient to foreign policy. The EU has strengthened that priority over the years, having established ECHO, a distinctive and, to some extent, independent body. The 1996 regulation establishing its legal status says that humanitarian aid
"is accorded to victims without discrimination on the grounds of race, ethnic group, religion, sex, age, nationality or political affiliation and must not be guided by, or subject to, political considerations".
Aid must therefore be given because of need, not because people are on the same side as us.
During the Iraq war, there was severe criticism of the US practice of providing humanitarian relief through the Pentagon. Hon. Members will remember the establishment of General Garner's operation, about which there was widespread apprehension. If humanitarian relief was seen to be associated with people on the side of the combatants, that would remove a precious principle. Bodies such as non-governmental organisations, the Red Cross and the United Nations were not on anyone's side. There have been tragic outcomes in Iraq, and the people responsible for the attacks on the United Nations and the Red Cross are reprehensible in their despicable behaviour. If we are to have satisfactory humanitarian relief operations, we must ensure that the independent approach to humanitarian affairs established by ECHO remains. Parts of the proposed constitutional treaty make it look as if humanitarian aid is part of the foreign policy remit of the European Union. I would welcome assurances from the Minister that the independence of ECHO and other humanitarian efforts will be maintained and not subsumed in foreign policy.
I hope to receive assurances that the huge gains brought about by the establishment of DFID will not be lost. A great deal of our assistance goes through the EU. It is important that the recent relatively modest improvement in European development assistance is maintained. What will replace the post currently held by Commissioner Poul Nielson? What guarantee can the Minister give me that development principles will determine the use of the money given for development policy? We must maintain the improvement that has taken place, which to some extent is taking money away from the neighbours on political grounds, and make sure that it goes towards the millennium development goals. I look forward to the Minister's response.
5.26 pm
Mr. William Cash: This morning we saw the Euro-barometer showing that only 48 per cent. of the people of Europe now support the European Union. Listening to the Foreign Secretary, as I have done on many occasions over the past few months, I do not think he would see an elephant in the room, even if it sat on him. It is crystal clear that there are numerous dangers inherent in what is proposed under the constitution, as I explained in a letter in The Daily Telegraph on 1 December and in a pamphlet entitled "The European Constitution—a Political Time-Bomb" published by the

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European Foundation on 8 October. I shall not repeat those arguments, as they are on the record. I mentioned some other aspects of this matter in the debate on the Queen's Speech when we discussed economic affairs.
I shall briefly point to the big issues that need to be faced this weekend. The entire process has been characterised by mendacity. When people say one thing, they mean another. Shared competence was mentioned, for example. When EU supporters say shared competence, that is not what they mean at all. When they speak of subsidiarity, they mean hierarchy. When they refer to proportionality, they mean disproportionality. When they speak of variable geometry, it is an oxymoron. There is no such thing as variable geometry. Either it is geometry or it is not geometry.
The worst example is that relating to defence. Enhanced co-operation is not co-operation at all. It is the creation of a hard-core Europe dominated by France and Germany. In the words of Thomas Mann, who postulated either a European Germany or a German Europe, it will be a German Europe. The French will not be able to hold out. They are engaged in the modern version of the Maginot line, yet President Chirac is quoted in The Irish Times today as saying:
"The chancellor and I will not accept an accord at any price. We want an accord that reflects our idea of a future Europe."
The article states that
"President Jacques Chirac and Chancellor Gerhard Schröder said they were optimistic about reaching a deal but it must be on their terms."
That is not co-operation; that is an ultimatum. Against that background, it will be interesting to see how the Prime Minister handles the situation.
When those involved refer to structured co-operation, they mean destructive co-operation. When they refer to sustainable growth or a social market economy, they mean an economy with low growth or none, and high unemployment. When they speak of democracy, they mean bureaucracy. That is the problem: the bottom line is that the whole process is about as honest as the accounts of the European Union, which the European Court of Auditors has not discharged for nine years.
We have dealt at some length with the principle of the constitution. It is crystal clear that the words of article I–10, in relation to which I have previously asked the Minister an extensive series of questions, have now arrived at a certain point. The Minister has said that, whether or not there is an Act subsequent to the constitution Act, the wording will be interpreted in accordance with the rules of the European Court of Justice. I hope that the hon. Gentleman will say that that means that the European Court of Justice ruling in the 1964 case of Costa v. ENEL to which the hon. Member for North Down (Lady Hermon) referred, will be displaced as far as the British courts are concerned. It would be very interesting to hear him say that, though, as in doing so he would be contradicting almost everything that the Government have said in the past couple of years.
On the fundamental questions, those of us who have generously been described as Europhobes, little Englanders or whatever can point to a number of modestly reasonable predictions that we have got right. We were right on the exchange rate mechanism and the
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growth and stability pact, and on the European constitution and where it was going. Anyone looking to strike a balance and see where the arguments have been proved right will find that it is among those of us who have consistently argued the case for a European Community that will work, rather than a European Community or European Union—which is what it has turned into—that will be dangerously unstable because of hard-core Europe and will have high unemployment and low growth. Furthermore, reports suggest that that Europe is now infected by a new tendency towards anti-Semitism that is developing in that unstable environment. Some of us—some of our forebears have fought and died for the democratic Europe that we would like to see—have rightly been disillusioned with the way things have been going. The fight will continue. We will face a political and constitutional revolution if the Prime Minister does not veto the treaty this weekend. I do not think he will—so where will that take us?
In conclusion, I return to a point that I made in a speech in Yeovil as long ago as 1995, in which I called for associated status. The argument about being in or out is not about withdrawal but about having a sensible European Union where we can co-operate but into which we will not be absorbed. I suggest that we must move to a new parallel treaty arrangement involving on the one hand a treaty of associated status with the European Union, allowing us to maintain all the best elements of what the European Community could offer, and on the other, a new treaty arrangement ensuring that there was associated status with the United States as well. That would be a true bridge that would depend on the notion of a proper and workable relationship in which we would maintain our sovereignty and independence in relation to the levers of government, but co-operate by treaty on a bilateral basis with the European Union and the United States.
5.34 pm
Mr. Tony Banks: I agree with little of the analysis of the impact of likely developments in the European Union that was given by the hon. Member for Stone (Mr. Cash), but I will say this for him: he is remarkably consistent in what he says. I am only grateful that on this occasion he said it so briefly—I shall try to emulate him in that regard if no other.
I want to raise a couple of issues that are slightly tangential to the debate, but significant to large numbers of people outside, if not inside, this House. Before I do so, I must point out for the record that I speak as an enthusiastic supporter of the European Union and the draft constitution. Nevertheless, in terms of the subject that I want to discuss—sport—the constitution is remarkably inadequate, and a lot of work remains to be done. If we are trying to bring the European Union closer to the people, there is particular relevance in the context of sport, as we have seen in recent events in this country and this city.
I personally want to see a European superstate—it certainly does not frighten me—although we have to make it democratic and accountable. History does not show that political and social development has to stop at the borders of the nation state; and who says that it is the highest form of political, cultural and economic and human organisation that we can possibly aspire to?

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Politically and economically, the imperative has always been towards federations, larger groupings, alliances and single markets. Logically, therefore, the governance of such institutions must reflect that. No hon. Member, whatever their feelings about the European Union and the constitution, would seriously believe that in 50 or 100 years the structures of Europe and the EU will in any way resemble those that we are contemplating today. The trend towards a European unitary state is irresistible. That is not to say that we should simply sit down and let it happen—we have to shape the process to ensure that we maintain a high degree of regional decision making.
I want to leave those heady issues for the moment to consider how the EU affects football in this country and the way in which European football is developing. As hon. Members are well aware, I have been a Chelsea supporter for more than 50 years, despite the fact that I am the Member of Parliament for West Ham: that gives rise to some embarrassing moments from time to time, but I can live with those. I trust that several Members had a chance to see last night's match between Besiktas and Chelsea in the AufSchalke arena in Germany. It is unfortunate that the hon. Member for West Suffolk (Mr Spring), who talked in glowing terms about Turkey, is no longer in his place. I do not disagree with him about the country and its people generally, but I hope that he would join me in condemning the behaviour of the Besiktas fans, which was utterly appalling.
If the scenes that we witnessed on our television screens had been replicated in any football arena in this country, UEFA, the European governing body led by Mr. Gerhard Aigner, would already be denouncing the club concerned, whether it be Chelsea, Manchester United or Arsenal, and demanding that we be struck out of European club competition. I detect more than a whiff of hypocrisy around the halls of UEFA in terms of the way in which it handles clubs and the national team in this country and clubs and national teams elsewhere in Europe. We are still suffering from a reputation as troublemakers in European football, largely derived from the so-called fans who follow the English national team. Club supporters whose clubs are playing in the UEFA Champions league or the UEFA cup behave very well indeed. I travel around Europe a lot with my club, and we certainly do not deserve the kind of treatment that we get from clubs and authorities when we visit the various cities of Europe.
We make European club supporters who come to this country very welcome. Yes, we segregate them, but we do not keep them back for more than an hour after the game has finished until all the transport links have gone, so that they cannot get back to their hotels or to the airport, as I found out had happened in Rome when I was there a couple of weeks ago. We treat them decently. Our police tactics are efficient, effective and sensitive. That is not the experience that we, as football supporters, have when we travel in Europe.
What we ask of our Ministers and our Government is that they stand up for the decent English club supporters and national team supporters when we travel. We do not leave our rights behind. We have dealt with the problems as we see them: our stadiums are well
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regulated, and in no circumstances would we allow the kind of scenes that we saw in Germany last night to be repeated here. Yet we know that if something like that—or even an incident of a far lesser nature—had happened here last night, UEFA would have condemned us. I believe that UEFA should take immediate steps to expel Besiktas from the UEFA cup; anything less would give rise to the justifiable accusation that UEFA was anti-English in its sentiments, its bias, and its hypocrisy. I look forward to hearing Mr. Aigner condemn Besiktas in the same way that I know he would condemn any English club, had its supporters behaved as the Besiktas supporters did last night.
The other subject that I wish to raise is summed up in early-day motion 242, which is tabled in my name and has been signed by 57 Members of all parties. It is entitled, "The effects of EU proposals on English football". It arises from the demands being made by the Commissioner responsible for the Competition Directorate, Mario Monti, who appears poised to issue a statement of objections to the Football Association premier league over the television deal with BskyB. If a prohibition notice is served, the premier league will have two months to respond before a full prohibition notice is served. At that point, the premier league would end up in the court of first instance, with the real possibility that its TV deals would be struck down. If that were to happen, league football in this country could face meltdown.
It appears that the Commissioner does not like the principle of collective selling of broadcasting rights within football. The premier league and the football league have done their very best to try to meet the Commissioner's demands half way; they even split the broadcasting rights into four live packages, which were put to a transparent and open tender policy. The Commissioner now appears to want to overturn a fair, free-market process and to break up the present deal between the premier league and BskyB.
If that happens, a number of dire consequences will follow, and that is not only my view but that of the premier league. If, for example, the premier league were forced to award a set of live matches to another broadcaster in an artificial process, it would achieve—at best—a marginal impact on UK broadcasting markets, but it would have a devastating impact on the premier league's rights, which would be reduced by 40 to 50 per cent. in value. If that were to happen, what would be the impact on the premier league—the most interesting, the most watched, and some would say the most exciting, if not the most technically proficient, football league in the world? If the deal were to be struck down, there would be no premier league matches broadcast on television from August 2004. A number of our premier league clubs—we know that Leeds are the most obvious example, but there are others—face a great many financial problems and some will clearly go straight into administration.
Clubs will be forced to sell off their top players, though God knows where or to whom they will sell them. Youth academies and youth development programmes will be threatened. The premier league's £20 million three-year funding programme for the football league to bail it out of the ITV Digital fiasco will of course go, which will leave a large number of football clubs in a precarious state. The Football Foundation,

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which receives £67 million from the premier league over four years, will itself be threatened and be in crisis, as will the Football Association, due to the loss of revenue. That will have a knock-on effect on the national stadium at Wembley.
Those are the problems that we face. I do not want the House to sleepwalk into such a crisis, which will be faced in football. It will all arise from the actions of the Commission and of Commissioner Monti himself, who appears not to understand that football needs to be organised in leagues. Those leagues need to sell their rights collectively if they are to spread that wealth among the various clubs and prosper.
To suggest, as the Commission is doing, that each club should negotiate individual rights is dangerous nonsense and if it is pushed through it will do enormous damage to football. That is happening in Italy, where the individual clubs are negotiating individual rights. The result of that was a delay to the current season as the small clubs were left with no one ready to take up the broadcasting of their matches. They could not sell their rights and therefore had insufficient revenue to pay either their players or the people who work for them or to make any further improvements to their grounds. Meanwhile, of course, the big Italian clubs were able to secure enormous and lucrative deals, but they did not have anybody to play. That is the nonsense.
Members should consider the conflict in the constitution between the competition sections and the woefully brief and inadequate item on sport. That conflict is obvious and it needs to be reconciled. I must say to my hon. Friend the Minister for Europe—I have spoken to him about this—that the matter is one of great significance to vast numbers of our citizens. If the consequences that I have described come about, I am afraid that, although that will not be the Government's responsibility, they will find themselves, as they inevitably do in such situations, very much in the frame.
We do not want clubs selling individual rights in this country, as our football would be changed absolutely, utterly and for the worst. We would end up seeing countless matches involving Manchester United playing Manchester United reserves or Arsenal playing Chelsea. That is not what people want. [Interruption.] My hon. Friend the Minister for Europe suggests that Chelsea could play Rotherham. Who would Rotherham sell their broadcasting rights to? With great respect to and due regard for Rotherham, I cannot see them being a big draw on terrestrial or satellite television, so Rotherham would likely go out of business. My hon. Friend should bear such issues in mind when he is talking about other issues: these events, which may take place at the lower levels, could have dire consequences for the organisation of our sport.
I pay tribute to the work of the premier league and to David Richards, Richard Scudamore and Philip French, who are doing their best to negotiate. The negotiations are ongoing. As you know, Mr. Deputy Speaker, usually I go straight for it—lashing out, boots and fists flying—but that would not be helpful in this case as the negotiations are poised at a delicate stage and I do not want to disrupt the situation. However, I want the Government to be fully aware of what is going on. I know that the Prime Minister is aware of this matter,
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because I have raised it with him directly, and apprised him of the significance—the potential implications—of
these events.
I believe that the Government understand the situation. I know that they realise how significant premier league football is, what it means to the great majority of our population, and what a political and economic disaster would result if the current deal between the premier league and BSkyB were struck down by the Commission led by Mario Monti. I hope that the Minister will assure me not just that he is acutely aware of the problem, but that he is doing his very best to solve it.
5.50 pm
Andrew Selous: It is always a pleasure to follow the hon. Member for West Ham (Mr. Banks), who is invariably a fluent and entertaining speaker. He was straightforward about his desire to see a European Union superstate. Although I profoundly disagree with his sentiments, I respect his honesty. He probably shares my view that the real difficulty involves those who share his agenda but pretend not to, and approach the objectives espoused by him in a less than straightforward way.
In a debate on European affairs, it is important to step back a little and look at the big picture. Unlike my father and grandfather, who left school to go straight into world wars, I—along with the rest of my generation—have not had to go through that. We should pay tribute to the European Union for playing some part in the preservation of peace on our continent during its creation. As we should all recognise, it is the first duty of any Government to preserve peace and security for their citizens.
It is right for us to welcome enlargement. The Foreign Secretary was right to describe it as historic. The fact that 10 countries that were behind the iron curtain until 1989 are about to join the European family of nations is indeed an historic event that we should all welcome. Let me point out for the record that every member of the Conservative party supported it in the House, and that it can proceed without ratification of the European constitution should that not come to pass.
I also welcome the results of the single market, which was pioneered by the British Conservatives under Lord Cockfield. I pay tribute to successive Governments who promoted that agenda: a common market without tariffs, in which we can sell our goods, is enormously valuable to us.
I have a small caveat, however. I refer to the European Union's behaviour at Cancun. I do not think that it behaved well, in a moral sense, by taking such a protectionist stance in relation to the developing countries. That was raised by the right hon. Member for Birmingham, Ladywood (Clare Short) in a recent article in The Times. The European Union should be careful to maintain a good record in this regard; otherwise, the World Trade Organisation could easily take over its function in ensuring free and fair trade between all nations.
I am a new Member of Parliament, elected only at the last general election. I am well aware of my close link with the 71,000 or so electors of South-West Bedfordshire who sent me here, and to whom I am

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directly accountable. The relationship is very clear: they know who their MP is, and I have a duty to respond to their problems and to be their champion. That is very precious, but it does not happen so far as Members of the European Parliament are concerned, under the existing, regional-based system of proportional representation. When asked who their MEP is and who their MP is, most people are unable to answer the former question with anything like the confidence that they can answer the latter.
The European constitution contains a number of threats to our parliamentary democracy, and such concerns are shared by Members on both sides of the House, regardless of their political tradition. For example, my near neighbour, the hon. Member for Luton, North (Mr. Hopkins), who sits on the Labour Benches, shares many of those concerns. As has already been pointed out, until the possible signing of the constitution this weekend, this country has always had the right to repeal the European Communities Act 1972. With the prospect of that constitution looming before us, it appears that we will lose that right. As a result, for the first time ever, European law will be supreme in this country.
Ms Stuart: The debate about supremacy of law has continued for months, and there seems to be no answer to it. But for the first time, an explicit exit clause will be provided in the constitution, spelling out the ability to leave. How does the hon. Gentleman combine the two arguments?
Andrew Selous: I can answer that question very easily. Neither my party nor I wants to withdraw from the European Union; my point is that we have always had the theoretical right to repeal the 1972 Act. The intolerable tragedy of this debate is that we have not had a straight answer, despite the best efforts of my right hon. Friend the Member for Wells (Mr. HeathcoatAmory) and many others, to the question of what the position will be after we sign the European constitution this weekend, if indeed we do sign it. This is a hugely important issue, and the lack of clarity should worry us all, whatever our perspective on these matters.
We have already talked about the importance of national Parliaments continuing to have a vital and meaningful role in the affairs of the European Union. Reference has been made to the fact that meetings of the European Scrutiny Committee are not terribly well attended on occasion, and I wonder whether my hon. Friend the Member for Eddisbury (Mr. O'Brien) has the explanation for that. He says that when Members do attend those meetings and European Union documents are placed before them, the Chairman will often move at a fast pace, taking 100 pages at a time and asking whether there are any objections to them. On one occasion, my hon. Friend sat up virtually all night to examine such documents in detail. He raised objections to several of them on behalf of British business, and the meeting was duly adjourned. He is under the strong impression that subsequent meetings were set at times when he was unable to attend. Concerns certainly do arise as to how effectively we in this House are able to scrutinise European Union directives and regulations.
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This debate has helped to clarify the question of shared competence. To many people, the phrase "shared competence" will suggest that a national Parliament has some role in the matters being debated by the country in question and the European Union. But it has been made clear during this debate what shared competence means: if and when the European Union decides to legislate in a particular area, at that point the United Kingdom and other EU members cannot. That should be a great worry to us, as should the charter of fundamental rights, which I and many others believe will simply lead to an increase in European Union, judge-led law.
The hon. Member for Birmingham, Edgbaston (Ms Stuart) said that she believes that the real reason behind the convention is furthering the political deepening of the Union. Given the 16 months that she spent as a member of the European Convention, she should know very well about that.
I think that we should look at the EU far more flexibly. If France and Germany wish to forge ahead and form a much closer relationship within the EU, neither we nor any other European country should stand up and stop them. By the same token, however, countries that want to go at a slower pace and retain more powers for their national Parliaments should not be forced to go further than they want.
Above all, we have to get rid of the absurd notion that Britain could be left behind in Europe—a point raised earlier in the debate. Europe is not a bunch of teenagers karting up the M1 to see who can get there first. It is very different from that, being about the relationship between the peoples of respective countries, how they are governed, democracy and accountability—all very important matters. The whole notion of being left behind has no real meaning in the debate. The duty of this Parliament and the British Government is always to secure in our relations with Europe the best possible deal for the British people.
What my constituents and I fail to understand is that if issues about the European constitution are—on the grounds that they are of significant constitutional importance—worthy of being put before the peoples of Denmark, Ireland, the Netherlands, Spain and other countries, why not here? I was in Denmark last week, so I know that the Danes take the issue very seriously indeed. How, then, can the British Government say that these are not constitutionally significant matters, when they clearly are to so many of our EU neighbours? If they are constitutionally important there, why are they not here?
The whole process that led to the creation of a European constitution began with the Laeken declaration, but it had explicit principles and purposes, which we seem to have moved away from rather than towards. The Laeken declaration said that the EU should move closer to its peoples; become more, not less, democratic; and be made more efficient and transparent. No one from either side of the argument seriously believes that the European constitution before us at the moment achieves any of those objectives whatever. It is also important that for the last nine years, the EU's accounts have been qualified. We know that the EU does not even use double-entry bookkeeping. Can any hon. Member name a single reputable or

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properly constituted organisation that does not use such bookkeeping? I find it astounding.
At the start of my speech, I spoke about the importance of defence, which I personally believe is the prime responsibility and duty of any Government. I am very concerned that the current position of the British Government is to reverse a policy that has always been clear about never disrupting the operational importance of NATO. I speak as a former Territorial soldier who has participated as part of the UK delegation in NATO congresses. I remember the briefings that we received from British diplomats, which always stressed that it was important to boost the European capacity within NATO; that the European pillar in NATO was tremendously important, but under-resourced; and that we should always act under the operational command system of NATO.
In respect of those matters, we can say that the establishment of an EU defence headquarters is, at best, wasteful duplication and, at worst, runs the risk of decoupling Europe from the defence support of the United States of America. It could also aid those in the United States who would like that to happen. When we consider that American blood has been shed twice in the last century to keep our continent free, we should reflect on the seriousness of what that could mean. I do not think that we should always follow the United States, or that it is always right in everything it does, but history has shown on many occasions that we were right to act alongside the Americans and that their friendship is precious.
A Labour Member raised the issue of international development aid and made many points that also concern me. The European Union gives five times more aid to countries within Europe and its immediate neighbours than it does to the developing world. That has to be a travesty of the proper principles of international development aid that aid should always go to those who are most in need. The European Union gives India €14 million and Bangladesh €32 million, but it gives Morocco €130 million and Romania €690 million. Romania hopes soon to join the European Union, and no one would seriously claim that it has as much significant poverty as India and Bangladesh. That aid distribution displays a warped sense of priorities.
We have also heard about the real problems of our fishing communities and I was present yesterday when those issues were debated at more length. I am pleased that my party is committed to coming out of the common fisheries policy, because that is the right approach. I wonder how many people realise that the CFP does not apply to the Mediterranean. It applies to all the waters around our own country, but it does not apply to the Mediterranean. That is fine for Spain, Portugal and other countries because the CFP does not apply to some of their offshore waters, but they are able to benefit from the CFP in UK waters.
Mr. Banks: Assuming that we had a Conservative Government who had come out of the CFP, what fishing policy would they implement? Surely the hon. Gentleman does not suggest that no controls on fishing
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or protection of fish stocks are necessary. Without such controls, fishermen would fish out stocks and there would be no fish left for anyone to eat.
Andrew Selous: I agree, and were we to repatriate fishing policy to the UK, as we should do—that is also the policy of the Scottish National party—it would continue to be important to take into account issues such as the sustainability of stocks. However, to give a specific example, haddock in Scottish waters is bracketed with other fish that are threatened to a much greater degree. The UK might be able to differentiate between species in a way that some of the rulings by the European Union have not done in recent months.
I am also greatly concerned that it appears that the UK Parliament is about to lose its authority over asylum policy. Originally, that was one of the Government's red lines, because they wished to retain control over it, but that is no longer the case. People on both sides of the political debate agree that our asylum system is far from perfect, but they agree that it is right that those who seek asylum in the European Union should do so in the first country they come to. Many people will remember the hijacked plane that overflew 12 EU countries before it landed in the UK at Stansted. That example makes my point powerfully. Imperfect as our current asylum policies and procedures are, the British people at least know that the ultimate responsibility and accountability for them lie with Ministers who can be questioned directly by the representatives of the British people in the House.
Those points may seem a little highbrow to many people, but I shall give the House a specific example of the effect of EU directives and regulations in my constituency. To the north of Leighton Buzzard the old Linslade road has a number of bridges, one of which has been strengthened, at a cost to Bedfordshire county council of £150,000 so that it can carry 40-tonnes lorries. That is all well and good and perfectly sensible; we need bridges to carry lorries to support trade and commerce. What could be wrong with that? A European directive required that the bridge be strengthened.
There is a problem, however. Not 100 yd down the road is a bridge owned by British Waterways. It has a weight limit of 7.5 tonnes and British Waterways has informed me that it has no requirement to strengthen the bridge and no intention of doing so. Furthermore, when the parish council of Heath and Reach, the adjacent village, found out that £150,000 of the county council's money had been spent strengthening a bridge, under the direct requirements of an EU directive, while the council had been trying to set up traffic-calming measures for years and years yet had been told by the county council that no money was available, local people were intensely irritated. I am sure that all hon. Members can understand that. Such incidents do the EU no favours.
I am not someone who brings up every example of European idiocies to muddy and blacken the name of the European Union, but where things go wrong and something is obviously not sensible, we need to give serious consideration to the wasting of British taxpayers' money at the insistence of the EU.
I want to conclude by proposing an alternative view to the remarks that we heard earlier about references to Christianity in the EU constitution. I very much hope

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that Turkey, a Muslim country, will join the EU. As a Christian, I have no problem with that and would welcome Turkey to the European family of nations. Turkey would be a welcome and important addition to the European Union. However, reference to Christianity is not a matter of opinion; it is a matter of fact. I shall not back that up by turning to the words of a politician, but shall quote briefly from the poet, T.S. Eliot, who said that
"the common tradition of Christianity…has made Europe what it is…It is in Christianity that our arts have developed; it is in Christianity that the laws of Europe…have been rooted. It is against a background of Christianity that all our thought has significance."
He makes the point more eloquently than any of us in the House could do.
I question the notion that secular humanism is the sensible, moderate, acceptable default position for all our institutions and public bodies. I want to make a small plea for tolerant, loving Christianity, as people of all faiths in this country would probably feel far more comfortable with that than with some type of secular humanist regime. I do not think that Muslims, Hindus, Sikhs or people of any other faith are worried by the fact that the established Church of this country is Christian, nor by the fact that there are Christian prayers before every sitting of Parliament. I hope that the Government will take up that matter and that they will not be offended. I do not believe that it will cause offence to people of any other faith or of no faith at all.
6.14 pm
Mr. Wayne David: For my sins, I have followed the process of drafting the European constitutional treaty for some time. I have read very carefully the 2001 Laeken declaration. I have followed the deliberations of the Convention on the Future of Europe. I have been closely following what has been discussed so far at the IGC, and the parliamentary scrutiny in the House has been very effective indeed so far. Credit has to be given to my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) and the right hon. Member for Wells (Mr. Heathcoat-Amory) on their active participation in the Standing Committee that both Houses have established to scrutinise the whole deliberation process.
Thanks, too, should be given to my right hon. Friend the Foreign Secretary and my hon. Friend the Minister for Europe for their participation in the Standing Committee on the Intergovernmental Conference. That has certainly increased the knowledge of at least a minority of hon. Members about what on earth has been going on in those deliberations. However, it is sad that so few Members of both Houses have attended both those Standing Committees. Frankly, there is no excuse for that because their meetings have been open to all Members. We are constantly told that Opposition Members place such great emphasis on scrutinising things European, but they did not make the effort to play their part in those Committee's deliberations. Unfortunately, the rhetoric does not match the reality.
Andrew Selous: I wonder how the hon. Gentleman would respond to the point that I made in my own contribution: perhaps many hon. Members are not attending those scrutiny Committees because they feel that they will have no real opportunity to contribute to the debate, to get answers, which are not forthcoming—we heard about that earlier—and to influence and change the regulations before them. If hon. Members feel that their time will not be productively spent in that way, perhaps that is the reason why they are not turning up.
Mr. David: I was referring to the Standing Committees that have been following the deliberations of the bodies to which I have referred. The hon. Gentleman is referring to the work of the European Scrutiny Committee, of which I am a member. That Select Committee is not open to all hon. Members. Nevertheless, we are pursuing an active programme of work not only to contribute to the wider debate on the future of Europe, but to scrutinise the legislation that comes to the House from the EU.
Mr. Richard Bacon: Does the hon. Gentleman agree that it would be better if the European Scrutiny Committee, of which I am also a member, were able to meet in public and that the Standing Orders should be changed to enable that to happen?
Mr. David: Speaking personally, I agree, but I want to address later in my contribution how the work of Committees needs to be considered very carefully if agreement is reached on the European constitutional treaty. I hope that that agreement will be reached, and it is important not to believe that we have somehow to put our national interest to one side to secure it. Our national interest has been protected and enhanced so far by the Government—I am sure that that will continue to happen in the deliberations this weekend—but reaching an agreement with our partners is also in Britain's national interest because Europe is at a crucial point in its development.
Next year, we will see the enlargement of the EU from 15 to 25 member states. Although enlargement has happened in the past—it is part of Europe's natural evolution—we have never seen an enlargement of such size and significance before. We would be extremely foolish if we believed that the current arrangements inside the EU could simply be transmuted into a situation where we would still work effectively with 10 more members. Such would not be the case. We need an agreement on the treaty, so that we can move forward to make the EU work more effectively, and those of us who are pro-Europeans certainly want that to happen.
Mr. Kelvin Hopkins: Like my hon. Friend, I have attended many sittings of the IGC Standing Committee. At the last one, I drew attention to the fact that even the Foreign Secretary had said that it was possible that the constitution will not be approved. He seemed fairly relaxed about that, according to the quotation—I am afraid that I was not present when he made that comment. There is also the possibility that a

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number of states might vote down the constitution in their referendums. If that happens, cannot we carry on happily as we are?
Mr. David: I agree with my hon. Friend that it would not be the end of the world if agreement were not reached this weekend. I would still argue, however, that it would be in our national interest, and our best interests, if agreement were reached. The European Union will not suddenly collapse. Enlargement will still occur. If we get agreement on a good treaty, however, things will be better for everyone, and certainly better for the European Union. For that reason, I hope that it will happen.
On enlargement, I referred to the enlargement that will take place next year, but I hope that that will not be the end of the process. I hope that Romania and Bulgaria will join soon thereafter, and Turkey too. I am glad that something of a consensus is emerging in the House about the desirability of a Muslim country such as Turkey joining the European Union. I welcome that. As well as those three states, however, we should open our arms and ensure that there is a warm embrace for the Balkan countries, which are in the process of putting forward applications. If they meet the criteria, both economically and politically, they should be able to join the European Union too. If our vision is of a European Union of that size, it is therefore all the more important that we have a European Union that operates effectively, and that the issues that have been addressed so far are successfully addressed in the foreseeable future.
I want to refer briefly to one or two of those crucial issues. A strong intellectual case exists, if we are serious about making the EU work more effectively with an enlarged membership, to have an extension of qualified majority voting. On the one hand, it is possible to protect our national interest—red lines have been drawn where we will maintain the veto—but at the same time, generally, an extension of QMV is preferable. I am also well aware that this is a controversial area in terms of how votes are weighted in the Council. Perhaps I should declare a slight interest as chair of the all-party group on Poland. I have a great deal of sympathy with the Poles when they say that the formula agreed at Nice should be adhered to, because it is on that basis that the people of Poland cast their votes to join the European Union. I hope that the Government will bear that in mind over the weekend and during the delicate negotiations that will take place.
Andrew Selous: The hon. Gentleman will know well that the Poles are particularly concerned to have some reference to Europe's Christian heritage in the preamble. Does he also share their concerns on that point?
Mr. David: I understand the points that the Poles make, but I think that that is one of the areas on which they may be persuaded that it would be better to adopt a different course. I am therefore optimistic that agreement can be reached on a sensible way forward for all parties.
One of the most important issues to have emerged so far from the draft constitutional treaty is that an objective evaluation of where power will lie in the future
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will point us to the Council of Ministers as giving the future strategic direction of the European Union. There has been concern for many years that the European Commission in particular has been more proactive than it should have been and too assertive. The new treaty will make it absolutely clear that the ultimate power inside the European Union rests with the Council and with the member state Governments. I welcome that.
That is a big issue. One of the smaller issues, but one of considerable importance, is that of subsidiarity and proportionality—unfortunate terms that do not mean a great deal to many people. They are important, because subsidiarity is the principle that defines where decisions are taken. It means that decisions should be taken at the most appropriate level as close to the people as possible. Proportionality means that the EU should not do other than what is necessary for it to do.
There is a protocol at the end of the draft treaty on those two principles and one of the key proposals in it is that national Parliaments should have a new and key role in the EU's decision-making process. I shall be frank with the House. I would dearly have liked to see that protocol strengthened so that, instead of there being a so-called yellow-card proposal, there is a red-card mechanism. However, the distinction between them is more apparent than real. The protocol explains that if the European Commission, after consultation, comes forward with a set of proposals to national Parliaments and one third of those Parliaments object to the proposals on the basis of subsidiarity, the Commission is obliged to take the proposal back and to review it. Given that there is a close relationship between national Parliaments and national Governments, such a warning to the Commission would mean that its proposal would be dead in real political terms. The provision will add something that is new and innovative. It will give greater responsibilities to national Parliaments and this House in particular, which considers its European scrutiny role to be so important.
To return to a point I made earlier, if that important protocol is agreed, it will be incumbent on the House to consider carefully how we conduct our debates on European affairs and how we conduct European scrutiny. Although I have commended the work of the House, its Standing Committees and the European Scrutiny Committee, that will not be enough if the protocol is agreed. It will therefore be important that the House—in its Committees and on the Floor—devotes far more time and effort to European issues. Given that the United Kingdom now has a number of devolved institutions, it is important that a specific and clear relationship is worked out with them on how they can express their views on the European matters that they will be asked to implement.
It is also important that the House develops links with national Parliaments in other member states and with the European Parliament. I shall again be frank, and I speak as a former Member of the European Parliament. All too often, we are parochial and inward looking in our attitudes. We need to take a broader perspective and to be true internationalists. One of the surest ways to do that is to extend our hand of friendship to other national Parliaments and the European Parliament and to make sure that we have meaningful dialogue with them so that we can together develop the EU in the way that we want.

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In September, the Government published a White Paper on their approach to the intergovernmental conference. If we study the White Paper and what has so far been agreed at the IGC, we will be able to see two things. First, we will see that the Government have been true to their words and have consistently argued with a great deal of success for the things that they announced in September. Secondly, we will see clearly that they have been successful in setting the agenda for Europe in a way that was not possible a few years ago. That is important not just in terms of our immediate considerations but in terms of Europe's future development as well.
Finally, I wish to refer to a comment made by Sir John Kerr in the Financial Times on 25 November. He was responding to a point that many Conservative Members have made. They say that we are talking about a constitution for Britain and not a constitutional treaty. There is a key difference, and Sir John Kerr said that the constitutional treaty
"is not a real constitution… Valery Giscard d'Estaing's convention on the future on Europe had no mandate to lay the foundation of a state, and it did not. Instead it drafted a treaty—an agreement between sovereign states—to simplify and replace the current confusion of treaties."
He went on to say:
"It makes no claim…to a grassroots legitimacy bypassing states and governments."
Sir John Kerr is not just any person or diplomat. He is probably one of our most distinguished diplomats and he was the secretary-general of the European Convention.
Mr. Bacon: First, does the hon. Gentleman accept that at the last COSAC meeting in Rome, the document that was circulated in English did not say constitutional treaty on the cover, as the cooked-up document that the Foreign Office has printed does, but constitution for Europe? Secondly, no matter what Sir John Kerr's views are, once the thing goes through—if it gets through—the adjective will get dropped and the document will start to be referred to using a noun.
Mr. David: I am not sure about the use of the English language. It is my understanding and that of Sir John Kerr that we are discussing a constitutional treaty. That is clearly recognised by the Government, which is why the words printed on the cover of the document that we are debating make that crystal clear. The important factor is not only the words that we happen to use, but their legal implications. If the treaty is to have force in Britain, it must be approved by Parliament because we are the sovereign body and that is what counts.
As we approach this important weekend, it is more important than ever for the House to make its collective position clear. We are Europeans and Britons at the same time—being both is not a contradiction. I am proud of being a member of the European. Union, I am proud of being British and, incidentally, I am also proud of being Welsh. In the complex modern world in which we live, we need such a perspective on how we may all live and work together on the basis of mutual respect. As I said early, I hope that the treaty will be agreed so that we may co-operate on that basis in the future.
6.32 pm
Mr. Gerald Howarth: When I
arrived at the House in the early hours of the morning, I saw a splendid-looking John Bull character carrying a placard—it made a great change from the other demonstration that is taking place outside—that said, "No surrender, stuff the Euro, rule Britannia". I would have said that those were entirely my own sentiments if my hon. Friend the Member for Mid-Sussex (Mr. Soames) had not been sitting within striking distance of me.
We have had a good debate, although it is a shame that there were not more Members in the Chamber to participate and listen. I salute the Foreign Secretary for setting a good example to his fellow Ministers on how to treat this place. As my hon. Friend the Member for West Suffolk (Mr. Spring) said, we appreciate the fact that the right hon. Gentleman attends the House assiduously and makes himself available to participate in debates rather than coming only to lecture us.
I also single out the two members of the Convention: the hon. Member for Birmingham, Edgbaston (Ms Stuart) and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). I am sure that the whole House is indebted to them for the extraordinarily hard work that they have put in over the past two years on such an important project. My right hon. Friend has been assiduous and incredibly well focused, and I salute him personally for expressing his arguments so clearly and forcefully.
At the risk of imperilling the political career of the hon. Member for Birmingham, Edgbaston, I think that she has been courageous enough to admit that she has seen the light. All of us will have been horrified, although not entirely surprised, to learn about her discovery that those on the Convention who did not support deeper integration were sidelined, because that speaks poorly of the Convention itself.
My hon. Friend the Member for Stone (Mr. Cash) has been a consistent critic of the accretion of power by the European institutions, and I believe that the whole House owes him a debt of gratitude for his constancy in that respect. The hon. Member for West Ham (Mr. Banks), who, I am sorry to see, is no longer in his place, was a brave man to refer in this week of all weeks to football played with a round ball. As one of those who was at Heathrow terminal 4 in the early hours of the morning when our victorious team returned home from Australia, I thought reference to the game with the round ball was particularly inappropriate. But he is a cheeky chappie and we all love him anyway.
This has been a broad-ranging debate. The right hon. and learned Member for North-East Fife (Mr. Campbell), who we know cannot be in his place because he has had to return to Edinburgh, made a typically gracious contribution. There was much in what he said with which I could agree, although I think that the whole House was interested to learn that Liberal Democrat Members of the other place are not expected to be bound by party policy. The hon. Member for Clydebank and Milngavie (Tony Worthington), whose interest is in development issues, spoke fluently and

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enthusiastically about the work of the Department for International Development.
My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) made a significant point about the importance that we in this country attach to the connection between a Member of Parliament and his or her electorate, and the serious responsibility and accountability issues that flow therefrom. He drew the analogy with the European Union, where not only has such accountability already been lost to a large degree, but there is a great risk that even more will be lost. The hon. Member for Caerphilly (Mr. David) rounded off the debate by saying that, basically, he was in favour of everything—but he is a former Member of the European Parliament, so we might have expected that.
That brings me back to my hon. Friend the Member for West Suffolk, who, in opening the debate for the Opposition, entertained us as is his custom to a well-informed and thoughtful tour d'horizon of European issues.
Mr. MacShane: Was that French?
Mr. Howarth: It was indeed. I speak French and German, which slightly undermines those who have accused me of being a little Englander.
My hon. Friend the Member for West Suffolk drew attention to the Government's woeful failure to protect Britain's essential national interests in the European Union, and he touched on defence—a subject on which, the House will not be surprised to learn, I intend to concentrate, because we face a serious predicament in defence policy that has in large measure been caused by the Government's inability to placate both the US Administration and our EU partners.
As has been acknowledged throughout this afternoon's debate, it is NATO that, since its inception in 1948, has provided for European security. Throughout the cold war, it tied together European and north American security. It provided a counterweight to Soviet power in the east, and without NATO, history might have proved quite different. Today, NATO continues to be relevant to the security environment shaped by the events of 11 September 2001. It remains the only guarantor of European security and the best way to address the capabilities gap between Europe and the United States.
Developments within the EU threaten the primacy of NATO. The European security and defence policy began with unnecessary duplication, and is now beginning to threaten the future of the NATO alliance. We agree that Europe needs to assume a greater role in providing for its own security: currently, only Britain and France spend anything like the amount that needs to be spent on defence. We support the push to increase European defence spending from its current low base of 2 per cent. of GDP and to develop a greater European defence role, but we believe that that increased role for European countries in defence is best achieved through NATO.
NATO already has the planning and command structures in place. It already has the resources, capabilities and experience. European defence would best be achieved through NATO, which brings the advantage of involving north American allies and non-
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EU European countries. NATO has developed links deep into eastern Europe through the partnership for peace. It is therefore best placed to provide regional security in future. However, as I said earlier, it is under threat.
As we speak, there is a struggle between those who recognise that NATO should continue to be the cornerstone of European security and those who are obsessed with the creation of an autonomous EU defence capability which, in the words of the Anglo-French declaration at Le Touquet on 4 February this year, can match
"the worldwide ambition of the EU's Common Foreign and Security Policy".
Some people on the continent want to challenge what they regard as the domination of the United States. Unable to do so on their own, they are trying desperately to drag other EU states with them to create an alternative pole to the United States. As Romano Prodi said at the end of March:
"It is evident that the Iraq crisis has brought us to a new crossroads in transatlantic relations, we must choose a different path."
Jacques Chirac said as long ago as 1999 that the European Union
"could not fully exist until it possessed autonomous capacity for action in the area of defence".
I emphasise the word "autonomous".
There is a serious danger that Britain's national interests will he betrayed if the Government try to assure the United States that we are four-square behind NATO and, at the same time, seek to assure our EU partners that we are at the heart of Europe. However, that is the typical stance of "Mr. Facing Both Ways", our Prime Minister. I remind the House that he famously told The Sun how much he loved the pound, but now tells us that in principle that he is favour of ditching the pound as soon as the five economic tests are met—meaning as soon as the opinion polls indicate that the Government might win a referendum. As long ago as February 2001, the US President said that the Prime Minister had assured him
"that the European defense would no way undermine NATO."
The President said that the Prime Minister had also assured him
"that there would be a joint command"
and
"that planning would take place within NATO".
The Prime Minister repeated those assurances to the President earlier this year. Indeed, an agreement was hammered out under the Berlin-plus arrangements whereby NATO's extensive planning and force generation structures would be made available to the EU in the event of NATO declining to become involved in a military operation. By that means, the EU would have all the cost advantages of having existing structures available to it while avoiding duplication or the risk of establishing a competing institution. Yet, as we know, in September, the Prime Minister finally signed up to structured co-operation with France and Germany, agreeing to an EU planning cell outside NATO, thus flatly contradicting the assurances that he gave President Bush.

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It is hardly surprising that US Secretary of State Colin Powell has expressed his anger. Last Thursday, he said at NATO that the US cannot accept independent EU structures that duplicate existing NATO capabilities. He is not alone in that belief:
"I have been as robust as anyone in my opposition to unnecessary duplication between NATO and the EU. We need more capabilities, not paper armies and wiring diagrams connected neither to soldiers nor to reality."
So said not a US neo-con but Lord Robertson, NATO Secretary-General, at a Royal United Services Institute conference in London last Monday. To remove all doubt, yesterday morning, he told listeners of the "Today" programme:
"We cannot afford any sort of competition between the EU and NATO."
He is right, but it is significant that as he leaves his post, he thought it essential to emphasise the vital importance of not undermining NATO.
As my hon. Friend the Member for South-West Bedfordshire said, the Government risk decoupling the United States from NATO. We will be told that the change is simply a modest one, and does not have the significance that we attach to it. However, I draw the attention of the House to a succession of statements from European leaders that reveal the agenda behind the European security and defence policy. The German Foreign Affairs Minister, Joschka Fischer, described the Anglo-French St. Malo communiquè of 1998 as
"an important step for the development of the European security and defence identity, another pillar of the process of European unification".
Romano Prodi said earlier this year that Europe should abandon the NATO alliance if it wants to have a meaningful say in world affairs.
We need to take note of those clear statements about how European leaders see the role of EU defence in building a greater united states of Europe. Why do we pretend that their motives are different, when they make no secret of their integrationist ambitions? There has been much mention in our debate of the European constitution. As we know, it would, for the first time, include key elements of defence policy in an EU treaty, thus incorporating them at a fundamental level in the new European structure. It is clear that one of the effects will be that the treaty is subject to the European Court of Justice. It creates a judicial identity for the EU.
Everything in the treaty is up for grabs, even though article I-40 speaks of
"the progressive framing of a common Union defence policy"
and states:
"This will lead to a common defence, when the European Council, acting unanimously, so decides."
Although the article goes on to state that the policy of the Union
"shall respect the obligations of certain Member States, which see their common defence realised in the North Atlantic Treaty",
it is hard to see how the existing treaty commitments of member states will survive the progressive acquisition of the attributes of statehood by the EU.
The defence of the whole of Europe, including the UK, has been assured this past half-century by NATO. Those driving the development of an EU defence
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identity are concerned not with enhancing capabilities, but with investing the EU with the trappings of a nation state. They have a Parliament, a supreme court, an anthem, a flag and a currency. Add a common foreign and defence policy and a constitution, and the jigsaw is complete.
This weekend, the final drafting session on the proposed constitution takes place. Just a few weeks ago, Ministers dismissed our warnings by saying that the proposal was simply a tidying-up operation. Now the Government have been forced to accept our judgment and, as my right hon. Friend the Member for Wells said, they are threatening to withhold their consent, but I suspect that that is sabre-rattling rather than any realistic attempt to renegotiate, let alone to walk away from the constitution if they feel that it cannot be justified.
The constitution will result in energy policy, asylum policy, criminal procedure and a raft of other policy decisions being removed from Westminster. We are, as my right hon. Friend said, importing a written constitution into our laws, and importing non-legislative Acts issued by people who are not accountable.
It was reported yesterday that support for the EU project has fallen below 50 per cent. across Europe, even in France, and that it is down to 28 per cent. in the UK. We say that this sovereign Parliament has no right to surrender a vast range of powers that we hold in trust for the British people, without their express consent. In the name of the British people, we demand a referendum now.
6.47 pm
The Minister for Europe(Mr. Denis MacShane): We have had a good debate. I welcome the hon. Member for Aldershot (Mr. Howarth) to his new duties. He began with a bang of anti-Europeanism and finished with a cry of anti-Europeanism, but in the middle there were some solid points, to which I shall return. I see that he has removed the little pound sterling sign from his lapel, obviously under orders not to manifest his earlier crude anti-Europeanism.
The Government have tried to insert Parliament, as we did today, into the heart of our enduring debate on Europe. So far this year, we have had more than a dozen debates on the intergovernmental conference. I and other Ministers have responded to 16 separate Committee reports on the IGC. My right hon. Friend the Foreign Secretary and I have attended eight Committee sittings on the IGC this autumn alone.
We launched a constitutional innovation this autumn by setting up a Standing Committee on the IGC. I cannot find any precedent of a Government subjecting a treaty negotiation to full-scale interrogation by hon. Members while the negotiations were taking place. Important points were raised by hon. Members in that Committee, notably on energy policy. I pay tribute to my hon. Friend the Member for Waveney (Mr. Blizzard), the chairman of the all-party group on the offshore oil and gas industry, for raising those issues. I am happy to report to the House that we now have

1161
language on energy that meets his concerns and ours. As he told the House earlier, that has been welcomed by the North sea oil industry.
Andrew Selousrose—
Mr. MacShane: If the hon. Gentleman will forgive me, I must make progress.
That example shows how parliamentary scrutiny can work if hon. Members come along and take the issue seriously but, alas, the Opposition have not done so. Although both the Foreign Secretary and I were present at that important Standing Committee for its long sittings, no member of the Opposition Front-Bench team bothered to turn up. Of course, hon. Members read out their Rothermere press rants at the Dispatch Box, but leave to others the hard work of ensuring parliamentary scrutiny of the IGC.
At the first sitting of that important Standing Committee, only one Conservative Member was present: the hon. Member for Stone (Mr. Cash)—who else? At the second sitting, he was joined by the right hon. Member for Wells (Mr. Heathcoat-Amory). At the third sitting, that duo was joined by the right hon. Member for Wokingham (Mr. Redwood). That is a golden trio. Out of the 160-odd Conservative MPs, the three anti-Europeans of star quality who helped to destroy the last Conservative Government with their rabid anti-Europeanism were the only ones who bothered to turn up to subject the IGC to parliamentary scrutiny.
Mr. Bacon: Will the Minister give way?
Mr. MacShane: I will not do so, if the hon. Gentleman will forgive me.
The hon. Member for Stone and the right hon. Members for Wells and Wokingham can rest content that their new leader remains determined to uphold the Conservative party as the most extreme anti-European party of any of the major parties of the right in Europe. That is their affair. They are welcome to dwell in the dark recesses of anti-Europeanism for as long as they like, but the British people do not share that position. If I may make a personal statement, I see
"the EU as a huge historical achievement compared to anything Europe has ever seen",
and
"To our vigorous membership of the most hopeful organisation Europe has ever seen I feel a robust commitment which comes from both brain and heart."
Those are not actually my words, but those of Lord Hurd of Westwell. They show how far the Conservative party has travelled into the depths of anti-Europeanism.
My hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) made a particularly powerful contribution. When she was interviewed on "The World at One" about her new pamphlet—I have a copy with me and recommend that all hon. Members give it a careful reading—she told Mr. Nick Clarke that she had advanced many of her arguments in the House or in Standing Committees. I have certainly had useful conversations with her about the issues that she raises
1162
and I agree with much of what she says. She calls for a new Cabinet post for the Minister for Europe. but I am not quite sure how far that will go.
Mr. Straw: Not far.
Mr. MacShane: I hope that that will be recorded by Hansard.
My hon. Friend the Member for Birmingham, Edgbaston will be aware that almost any Question Time involving any Minister will deal with European issues. It is difficult to say "Here is a category called Europe", as Europe now touches transport, the environment and defence, as we have heard, as well as other matters. She referred in the pamphlet to one article in the constitutional treaty:
"Article 24[4] allows for the move from unanimity to Quality Majority Voting",
and said that that was unacceptable in her view. I am glad to report to her that the new draft that we will be discussing in Brussels states:
"If a national Parliament makes known its opposition within six months"
to any such passage,
"the European decision…shall not be adopted."
In a sense, by arguing her case, she has helped in winning a lot of it.
The right hon. Member for Wells taxed me with the confession that I was not a qualified lawyer. I have looked at the Hansard of the Standing Committee on the Intergovernmental Conference, however, and I could read out at interminable length section 2(1) of the European Communities Act 1972, which underlines the primacy of EU law. He is quite clear in what he says about the issue, but treaties are international law. If we sign them, we have an obligation to honour and abide by them. Pacta sunt servanda is the old Latin term, and it is honoured and enforced by tribunals and courts. There is no other way in which we can have relationships with other countries in treaty form. When the constitutional treaty is signed, it will be another European treaty. However, we have a present for him, the right hon. Member for Wokingham and the hon. Member for Stone—article 59, which allows for withdrawal. They should be honest and make it clear that that is now Conservative party policy.
My hon. Friend the Member for Clydebank and Milngavie (Tony Worthington) made an extremely important point about development aid.
Mr. Hopkins: Will the Minister give way?
Mr. MacShane: No, if my hon. Friend will forgive me.
I cannot read out all the references to millennium development goals, humanitarian aid and international development that are in the new Foreign Office White Paper entitled, "UK international priorities", but let me assure my hon. Friend the Member for Clydebank and Milngavie that I am proud, and every Labour Member is proud, of the work of the Department for International Development and the massive increase in international and humanitarian aid that it has achieved. We will never allow a return to the cuts in international aid and Pergau dam policies of the Conservative party.

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The European Union is itself a powerful poverty reduction mechanism—that is why so many poor nations are anxious to join it. The Government do not support budgetisation—a technical point to which my hon. Friend may want to return in due course.
The hon. Member for Stone, who is not here—he apologised in advance for his absence—managed in his first sentence to patronise Germany and France. I say to Conservative Members that this incessant Francophobia and Germanophobia—this rancid hostility to our European partners—does their party, and the House of Commons, no credit.
My hon. Friend the Member for West Ham (Mr. Banks) said that he was in favour of a European superstate. I cannot share that vision, because we are an association based on the nation state, one of the most important manifestations of which remains football. I hope that the behaviour of our football fans during Euro 2004 will finally lay to rest, for this new century, the lingering memories of bad behaviour. My hon. Friend discussed in considerable detail the issue of Commissioner Monti and television rights. That is being dealt with seriously by other Departments.
The hon. Member for South-West Bedfordshire (Andrew Selous) talked movingly about his relationship to his electorate, which we all share. I am therefore surprised that he wants to dissolve it by adopting the campaign by the isolationist Rothermere press for a plebiscite on whether we stay in Europe. Fewer and fewer countries in the EU of 25 are going down that road. The shadow Foreign Secretary, who has just returned from eastern Europe and the Baltic states, found no support there for his incessant clamour for such a plebiscite. He has not yet apologised, nor has any Conservative Front Bencher, for the dispatching of senior Conservative party members and elected representatives to campaign against accession countries deciding in their referendums to join the EU. That was shameful.
My hon. Friend the Member for Caerphilly (Mr. David) underlined the great importance that we attach to the need to strengthen the role of Parliament. I agree that we have a crisis in parliamentary scrutiny, but the system will not be effective unless hon. Members are prepared to turn up to do the work.
The hon. Member for Aldershot made some important points about defence and NATO, but let me quote to him a certain gentleman who said:
"Let me make sure you understand our position. We believe that Europe needs to take"
on
"more of a defence posture and should act independently of NATO—if NATO chooses not to take on the mission."
Those are the words of President George W. Bush; I am happy to quote the President of the United States in support of what the Prime Minister is seeking to achieve.
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We finish where we began. Today, we had the first major statement on Europe by the Leader of the Opposition, who told The Times that he would seek to wreck the constitutional treaty. We have the promise that the Conservatives will spend the next year refusing to accept the new treaty—even, it appears, if it is approved by Parliament. The Conservative party will sing the same old anti-European tunes under its new leader. His former Cabinet colleague, the then Foreign Secretary, now Lord Hurd, writes in his memoirs that, if we failed to ratify such treaties—then, the Maastricht treaty, tomorrow, the new constitutional treaty—
"we would by our foolishness have helped to bring about the nightmare which has always alarmed our predecessors: a continental union influencing British lives at almost every turn over which we had no control."
The Conservatives wish to live that nightmare. The Government will uphold British values and be strong in the European Union. We will support a strong Europe. We will be in Europe and help to run Europe. The Conservatives want us to get out of Europe and to run away from Europe. Their policy has got worse under their new leader. They have nothing to say to the House, to the nation or to Europe.
It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

PETITIONS

  Pension Books
  7 pm
  Mr. Roger Williams: The petition of residents of Brecon and Radnorshire declares:
  That the withdrawal of pension books would limit the degree of choice that pensioners are able to exercise in terms of how they receive their pensions, and that 1,283 people have supported the petition through newspaper campaigns.
  The petitioners therefore request that the House of Commons urge the Government not to abolish pension books.
  And the petitioners remain, etc.
  To lie upon the Table.
  Lembit Öpik (Montgomeryshire): The petition of residents of Montgomeryshire declares:
  That the withdrawal of pension books would limit the degree of choice that pensioners are able to exercise in terms of how they receive their pensions, and that 1,200 people have supported the petition through newspaper campaigns.
  The petitioners therefore request that the House of Commons urge the Government not to abolish pension books.
  And the petitioners remain, etc.
  To lie upon the Table.

Meat Fraud
Motion made, and Question proposed, That this House do now adjourn.—[Paul Clark.]
7.1 pm
Judy Mallaber: I am pleased to have secured this debate on meat fraud, and it is appropriate that I should follow the Minister for Europe, my hon. Friend the Member for Rotherham (Mr. MacShane), who pursued exactly the same issue when he faced a case of meat fraud in Rotherham identical to the one that has recently arisen in my constituency.
We are facing a sophisticated meat mafia that peddles dangerous meat in a way that other criminals peddle dangerous drugs. Julie Barrett, the director of the Chartered Institute of Environmental Health in Wales, said at its conference three weeks ago on cracking down on meat crime:
"Illegal meat is a multi-million pound trade that presents a major and growing risk to public health in the UK. The dangers are not widely understood, systems of detection are under-resourced and poorly coordinated, and the law lacks the necessary teeth to bring perpetrators to book."
In my constituency, the conspirators at Denby Poultry Products made hundreds of thousands of pounds processing and distributing more than 450 tonnes of rotten poultry to shops, supermarkets, schools, hospitals and pubs, undetected over a period of at least five years. Derbyshire police think that the meat even got into their own canteen. I invite the Minister to congratulate the Amber Valley officers, Sue Sonnex and Steve Haslam, whose salary was covered by the Food Standards Agency, and Derbyshire police, particularly Neil Perry, Darren Hunt, Nicholas Mathews, Colin Newton and Greg Dexter, on their surveillance and investigation, which led to five people being jailed for a total of 11 years for conspiracy to defraud, although the ringleader Peter Roberts is still on the run overseas.
A "Panorama" programme a few weeks ago showed footage of the raid. It described the stench of rotting flesh in the plant, rats running over people's feet, and overflowing sewage. It also showed pictures of the diseased meat. I do not welcome the fact that the police have given me their file of dirty photos, but I will happily pass it on to the Minister to have a look at. The meat was transported in unrefrigerated, maggot-ridden vehicles, and high-risk, contaminated poultry waste was taken from slaughterhouses to Denby, along with low-risk animal by-products, allegedly to be turned in to pet food, but in reality mixed and passed on to other processors and distributors and passed off as meat fit for human consumption. Anyone who looks at the video footage or the pictures in my police file would just feel sick. It is disgusting.
We do not know how many people became ill or even died as a result of this. It is all too easy for the issues involved to be given low priority, compared with more obvious and immediate dangers to human life, and for this to be reflected by a lack of urgency when serious cases such as Denby emerge. Ministers must not take this as an isolated crime. They must look at the lessons to be learned, and treat it as a serious public health and criminal issue.
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Why did it take an anonymous informant to tip off Amber Valley's environmental health officers about what was going on, when we supposedly have a licensing and meat inspection system in place? How could a vet visit MK Poultry, the Northampton cutting plant that did much of the distribution, every week, yet not notice containers saying "Reject" and "Unfit for Human Consumption"? What if Amber Valley council officers and Derbyshire police had not been prepared to put in the resources for a massive operation involving more than £1 million of police resources to tackle a conspiracy that was a danger to public health way outside Derbyshire's borders? Why do we only now have an action plan under the waste food taskforce of the Food Standards Agency when an identical meat fraud had happened in Rotherham?
My particular interest arises from the Denby Poultry fraud case, but I want the Minister to consider a range of other serious meat crime issues, including the illegal importation of meat and, specifically, dangerous imports of bush meat through illegal air freight and the illegal killing of animals for delicacies such as smokies. We have had Operation Fox, Operation Aberdeen and Operation Lobster Pot as well as operations in Ceredigion and south Norfolk. We need a consistent campaign co-ordinated across those various illegalities to crack down on meat crime. I congratulate and support the Chartered Institute of Environmental Health and its Environmental Health News on their "Stamp It Out" campaign, which aims to stamp out the illegal trade in unfit meat, which puts the health of us all at risk.
Arising from that, I have a number of issues that I want to raise with my hon. Friend the Minister. I know that she will not be able to deal with them all tonight and some will need to be raised with other Departments, but, above all, I ask her to take meat crime and fraud seriously and to give it priority as a public health issue. I also ask her to meet Amber Valley council officers and the Derbyshire police involved in the Denby Poultry investigation to hear at first hand of the weaknesses in our regulatory and legal system as well as in co-ordination between agencies, preferably with a Minister from the Department for Environment, Food and Rural Affairs, because one of the issues is the way in which this matter crosses Departments.
I ask the Minister not just to leave the issue with the Food Standards Agency, but to keep a close watch on the progress of its work and to give it added impetus. Progress is being made through the waste food taskforce report, but I have heard and received a number of criticisms of omissions from it and of the speed with which recommendations are being implemented. I shall come back to some of those.
The FSA is only one of the agencies involved. It is essential that the FSA functions well—we need it to do so—but any criticism and weaknesses and gaps between agencies undermine confidence. I hope that my hon. Friend will ensure that both all those involved in food enforcement work and the public can have hill confidence in that agency's work and the work of other agencies; she cannot just take a hands-off approach.
On the legal framework, I am calling for a new meat crime offence: to knowingly procure, process, sell, deliver or manufacture foodstuffs that are unfit for human consumption with an intent to defraud the

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consumer and place the public's health at risk. We need a separate criminal offence that will enable us to catch large-scale trading in unfit meat.
Conspiracy to defraud charges had to be used in the Denby Poultry case because offences under existing food safety regulations only carry low penalties—a maximum of two years in prison, even if the case can be taken from the magistrates court to the Crown court—but it is difficult to win conspiracy cases, and preparing them is complicated.
Also, I am told that the courts do not take seriously enough those powers that they do have in food crime cases. We need punitive and deterrent sentences. This is not a minor crime. Perhaps we could consider the criminal offences available to Customs and Excise. We need an offence that can be pursued more straightforwardly. We also need to consider the matter in the context of the police and who should be responsible for tracking down and dealing with meat crime. We need further training of enforcement agency staff on establishing evidence trails that stand up in court.
The next issue involves co-ordination between Departments and agencies. Major weaknesses were identified in the Denby Poultry case. Who has regulatory, licensing and inspection duties in slaughter processing and distribution of meat? Let us go through them: the FSA and the Meat Hygiene Service, DEFRA and the state veterinary service, environmental health and trading standards in local authorities, and now, apparently, the police when regulation fails. The Department of Health, DEFRA, the Office of the Deputy Prime Minister and the Home Office all have an interest.
I shall point out some flaws and gaps that need to be closed to prevent another Denby, but I note that it was primarily the local authority, with some FSA funding and support, and the police that investigated and pinned down the criminals. Things get worse when we add in the other areas of meat crime. On the scandal of illegal meat imports, Customs and Excise and other inspectorates become involved. Following suspicions on the origin of the foot and mouth epidemic, the Cabinet Office, as I understand it, has given the FSA a year to deliver a step change in delivery or lose control to a new centralised agency. In reply to a question that I tabled, the Prime Minister himself stressed the urgency of stamping out the practice.
I understand that a ministerial group chaired by DEFRA was to be established for co-ordination purposes. Has it met? Let me also ask the Minister to press for the establishment of a ministerial group covering all Departments with responsibility for meat crime to review such crime across the board, to look at arrangements for co-ordination to plug gaps and loopholes, and to give impetus and political commitment to the tackling of this threat.
May I ask the Minister to consider specific issues arising from the waste food taskforce report and the Denby Poultry case, or pass them to the relevant Departments? There has been concern about weaknesses and omissions in the recommendations, and in some instances action has seemed unduly slow.
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There is a huge amount of money to be made from meat fraud. We will only be able to prevent the next Denby or Rotherham case if the potential criminal can no longer obtain contaminated meat intended for rendering dirt cheap, then package and sell it on illegally, at a vast mark-up, so that it goes into the human food chain. That will require a robust audit trail of where by-products go from the slaughterhouse and where they end up. Even if they had the time, meat hygiene inspectors would still only have powers to investigate at the slaughterhouse end; DEFRA and state vets have powers relating to the rendering and pet food plants.
We need an independent body or one of the agencies to follow the whole train. We should know now where each slaughterhouse sends its diseased meat so that checks can be carried out on what happens to it at the other end. To follow the audit trail, we need information sharing. DEFRA was first asked back in 2001, by my local police and local authority officers, to provide an electronic database showing all animal by-product premises. Enforcement agencies and those in the industry need such a database to verify disposal routes and methods. Apparently, however, no list will be published until 2005. Why must it take four years? DEFRA may wish to re-license its premises, but that is no excuse for it not to publish the current list now, perhaps on its website. Why is the Meat Hygiene Service not publishing its list of licensed plants until 2004? Why is it taking so long to produce recommendations?
According to "Panorama", supermarkets said that they would accept products that carried a meat hygiene standard stamp of approval, but they need to be able to check where the meat comes from. Without the necessary information, how can anyone check the trail of meat products? Food officers need it in order to establish the legitimacy and traceability of meat during routine inspections of the premises of, for instance, butchers and caterers, and the food trade needs it in order to establish where its meat has come from and where it is going.
I have raised the issue of co-ordination and information sharing in the context of meat fraud, but it covers the whole range of meat crime. It is a serious issue—a weakness that we need to tackle.
Meat Hygiene Service inspectors are at licensed poultry slaughterhouses every day, but at present the service level agreement between DEFRA and the MHS allocates only 15 minutes a month for them to supervise the segregation, storage and disposal of waste—of animal by-products. That is woefully inadequate, and would allow the Denby and Rotherham cases to occur again elsewhere. I understand that the Food Standards Agency says it has doubled NHS resources for this purpose, but is that really adequate to cover 1,400 licensed plants?
Denby Poultry was licensed by DEFRA, and the state veterinary service is meant to visit annually to check the position. I should like the Minister to look into suspicions about whether the failure to supervise animal by-product premises of that kind is due to the fact that the service looks primarily at animal health, rather than public health, issues.
Many issues arise from this case, and a number of the principles involved affect meat crime in general. I am thinking of co-ordination, information sharing and the

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need to establish an adequate and proper regulation system. That is not to say that lessons have not been learned or that recommendations are not being dealt with; but there are omissions from the system, it is too slow, and it needs to be looked at across the board. I hope that my hon. Friend the Minister will get to grips with the situation and take responsibility, but she will need to work with other Ministers.
In the light of the Denby Poultry scandal and the problems of co-ordination between those involved, I cannot for the life of me see how extending privatisation of meat inspection and the MHS can be justified. We clearly cannot trust meat plants to conduct their own private inspections; nor do we want to add to the number of groups involved in meat inspection. So I ask my hon. Friend please to oppose the European privatisation proposals.
I am aware that I have raised a whole range of issues, and I certainly do not expect the Minister to be on top of them all, particularly given that many do not fall within her sphere; indeed, that is precisely one of the problems. The main thing that I want to hear from her tonight is that she realizes—as I am sure she does—that meat crime, specifically the meat fraud experienced in my constituency, is a very serious issue. Indeed, this is a massive issue in terms of crime, involving criminal conspiracy and the making of huge amounts of money from dirty meat. It does not get highlighted and we do not necessarily understand the dangers to public health, so I hope that my hon. Friend can give priority to it.
If my hon. Friend watches the "Panorama" film, of which I have a copy—I do not recommend that she watch it over dinner, as I did—she will hear some interesting "vox pops" from ordinary shoppers. They assumed that proper safety checks were being made throughout the food production and distribution chain, but how are consumers meant to know the dangers and what is going on? They cannot take responsibility for their own health in such circumstances. Much responsibility for their safety rests fairly and squarely with the food brokers—incidentally, a further information gap is that we do not know who the food brokers are—and with the meat industry itself. The industry must look at its own procedures, and it should be brought to book.
All the public agencies and Departments must adopt a more coherent and systematic approach to taking responsibility for tackling meat crime and meat fraud. I urge my hon. Friend to put this issue on the agenda in her meetings with her ministerial colleagues, so that we can indeed stamp out such crime. I want to be able to tell my constituents and friends and family—and, indeed, my hon. Friend's friends and family—that they can sit down and eat their dinner confident in the knowledge that they will not end up in hospital with food poisoning the next day. Let us stamp out this terrible crime. I urge my hon. Friend to take this issue on board.
7.16 pm
The Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson): I begin by congratulating my hon. Friend the Member for Amber Valley (Judy Mallaber) on her choice of subject for this Adjournment debate. Meat fraud is a serious issue, and I can reassure her that all those involved with it in
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government take it seriously. I am very happy to join her in congratulating those who brought the criminals to book.
My hon. Friend mentioned the exercise in Rotherham, codenamed Operation Fox. It was shortly after the conclusion of that case that the Operation Aberdeen investigations began into a serious meat fraud that centred in her constituency. It was those two cases in particular that prompted the Government and their agencies to respond with a series of tough measures to crack down on such crimes. It is important to point out that the Operation Aberdeen investigations revealed that, at that time, the enforcement agencies' performance had not been up to the task; indeed, nor had Government policy succeeded in staying ahead of the criminals' game. Things therefore had to change if enforcers and the Government were to make a serious effort to stamp out this criminal activity. In picking up on the points that my hon. Friend has raised, I can reassure her that substantial progress has now been made.
The Government's efforts started in September 2001, some six months after the first raids in the Operation Aberdeen case, with a seven-point action plan on unfit meat. The action plan was a big step forward in tackling meat scams of the type uncovered in Amber Valley. Its first, and perhaps most significant, action was to extend the staining requirements from red meat to poultry meat by-products. As my hon. Friend will know, many of the issues that arose related to poultry meat.
Judy Mallaber: Will my hon. Friend give way?
Miss Johnson: I will, but if I do so too many times I shall have very little chance to respond to the debate.
Judy Mallaber: One issue that I did not raise, and which my hon. Friend could perhaps look at, is the staining of low-risk, as well as high-risk, waste. Without such staining, it is very hard to know whether low-risk waste is also being used improperly and entering the food chain.
Miss Johnson: I am grateful to my hon. Friend for making that point. The question of low-risk meat gives rise to slightly different issues. Low-risk products have been passed as fit for human consumption, but are not intended for such consumption. That is different from high-risk meat, and the Food Standards Agency currently believes that the staining of low-risk products would not be proportionate to the public health risk in respect of fitness for human consumption.
So the first measure was the staining requirements for poultry, and the second and third measures were to extend the staining requirements from slaughterhouses to cutting plants and cold stores. That was important, because waste is not generated only at slaughterhouses: some is generated later. Those two actions cut off two more avenues for the meat criminal.
The fourth point in the action plan was to encourage the meat industry to adopt a voluntary code of practice on the handling and disposal of animal by-products. That is important because, if we are properly to crack down on meat scams, both Government and industry must each play their part. I am pleased to say that in

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August this year the industry did indeed adopt a comprehensive code of practice, which is now being widely promoted across the industry.
The fifth point in the action plan was to improve enforcement in respect of poultry by-products. The Department for Environment, Food and Rural Affairs, which is responsible for the regulations on animal by-products, has done much to turn the enforcement ship around in the last two years. Completely new enforcement arrangements are now in place, and they have been rolled out with a comprehensive package of guidance and training in partnership with all the enforcement agencies involved. The arrangements are now backed up by revised audit arrangements to ensure that they deliver effective enforcement.
The sixth point in the action plan was to improve traceability within the meat supply chain. The FSA took that forward as part of its programme on traceability. It has been backed up by concrete measures, notably by improved record keeping and certification arrangements. Those were introduced as part of the Government's plans to implement the new EU animal by-products regulation, and include a requirement for movement certificates to be triplicated to ensure that all animal by-products are fully traceable.
The seventh point in the plan was to set up the independent waste food taskforce, which I shall deal with in a minute.
Judy Mallaber: May I ask my hon. Friend to examine more closely her previous point about the audit trail? As I understand it, we still do not have a proper independent auditor. I urge her to consider that point in more detail.
Miss Johnson: I shall come on to that in more detail later, when I clear up some of my hon. Friend's points.
To return to what was in the action plan, the independent waste food taskforce was set up. The aim was to examine not only issues covered in the rest of the action plan, but issues that emerged from the ongoing Operation Aberdeen investigations. To that end, it was important that officers from Amber Valley borough council were members of the taskforce. Indeed, they contributed much to the recommendations that the taskforce eventually made.
The waste food taskforce report was published on the day that it was received by the FSA, which immediately launched a full public consultation exercise on its recommendations. The consultation revealed that stakeholders supported the direction in which the report was pointing and also supported the measures that the Government had taken so far to crack down on meat scams. Following that, in September this year, the FSA adopted a second action plan, with the aim of taking the Government's efforts to combat meat crime several stages further. In that action plan, all 24 of the waste food taskforce's recommendations were to be acted on. Indeed, work has already started or been completed on 22 of the 24 recommendations. The work consists of 55 individual action points by the FSA and DEFRA, 27 of which have already been completed. The action points vary from the high profile to the esoteric, but together amount to a powerful suite of measures to make life more difficult for the meat criminal.
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A key part of the plan is that the FSA and DEFRA are working on a new enforcement scheme for animal by-products in licensed meat plants. The aim here is to replace the old scheme with a new one based on risk. The approach will be one of blanket and blitz, whereby each plant will have a blanket of routine supervision, backed up by blitzes targeted according to risk to trace waste from source through to its destination, in co-operation with the other enforcers involved.
It may be appropriate to say here that many of the problems arose because the agencies and enforcement bodies had not worked together as they should. My hon. Friend is quite right to say that the trick to making it effective is to ensure that that works. Much effort has gone in to ensuring that that is working across the piece. The amount of Meat Hygiene Service resources devoted to animal by-products enforcement has increased more than threefold since the Rotherham and Amber Valley scams, and the aim of this new work is to make the most effective use of existing resources and thus improve the outcomes of enforcement effort.
Further measures include the setting up of a team of 30 trained and experienced local authority enforcers whose role will be to assist investigations of alleged meat scams and to provide intelligence on what is happening in the field. That is backed up by a fund to provide local authorities with extra financial resources to investigate alleged meat scams. The Food Standards Agency is also recruiting two more investigation officers in order to reinforce that effort.
That action will not be the final word. The Food Standards Agency brought the key stakeholders together on 26 November to review the lessons learned from the Operation Aberdeen investigations. Officers from Amber Valley borough council and Derbyshire constabulary took part in that review, and the Food Standards Agency board will now consider the lessons learned. The board will also monitor the progress of the new action plan, and will formally review the outcome when the last of the action points is due to be completed in early 2005. We do think that this is an important subject.
My hon. Friend raised other issues. On the question of co-ordination between Departments and agencies, she mentioned the co-ordination work to be headed by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs. The new Cabinet Committee will meet for the first time on 8 January 2004 and it will consider the issues that my hon. Friend has raised, among others.
Good progress has been made in liaison arrangements between Departments and agencies. A change of culture was necessary and is proceeding rapidly. The number of agencies is not necessarily the issue: what is important is whether the enforcers involved talk to each other. Now that we have changed the culture, liaison with other agencies is seen as part of the enforcers' day job, rather than as an optional extra. Routine and successful liaison is the reason why we have seen excellent enforcement operations recently, such as those in the Harrogate case.
On the waste food taskforce issues, the new rules in the EU animal by-products regulations tighten up the audit trail. I have already mentioned the triplication of movement certificates. I also mentioned the blanket and blitz regime. The Department for Environment, Food

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and Rural Affairs has set up a database of animal by-products premises, which is now available to all enforcement officers and will appear on the Department's website early next year. A database of licensed meat plants will appear on the FSA website shortly and the Meat Hygiene Service is devoting much more time to inspections and enforcement in plants. As I said, it has more than trebled that work. Action is occurring in all those areas.
My hon. Friend also raised the question of penalties. There are penalties greater than the maximum two years' imprisonment under the Food Safety Act 1990, because other charges—such as conspiracy to defraud, which was used in Operation Aberdeen—can be laid. In reality, proving such offences is more difficult than proving the food safety offences. As I mentioned, the EU general food law regulation 2002, which will come into force on 1 January 2005, will make it an offence to place food on the market if it is unsafe. The issue will then be subject to EU legislation, not just UK legislation. Therefore, the UK will not be able to act unilaterally to provide for offences distinct from those in the European regulation. However, the new EU legislation will clearly make a difference.
Judy Mallaber: I am aware that new EU legislation is pending, but we will still have flexibility on how we interpret and introduce it. The point that I raised about
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the new offences needed should not be pushed to one side on the grounds that everything will be done in Europe. I urge the Minister to see whether we can tackle those issues seriously when we argue for such legislation in Europe and when we implement and introduce it here.
Miss Johnson: I shall of course bear in mind the points that my hon. Friend has made. I am not familiar with the detailed requirements of the legislation; however, the point is that negotiations have been completed and we have an obligation to take it forward and implement it according to certain parameters. We shall obviously consider whether, within those parameters, there is scope for us to take up the points that my hon. Friend made. I shall be happy to write to her further about the opportunities for doing that, so that she is aware of the situation in more detail.
Meat fraud is a serious issue and we take it seriously. I must reassure my hon. Friend that there has been a step change in the way in which meat scams are dealt with since the Amber Valley fraud was unearthed. We constantly monitor progress to ensure that we stay ahead of the game.
The motion having been made after Seven o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-nine minutes to Eight o'clock.

Preamble
[MR. FRANK COOK in the Chair]

Financial Services Jobs (Outsourcing)
Motion made, and Question proposed, That the sitting be now adjourned.[Mr. Ainger]
9.30 am
John Barrett: I am delighted to have secured this important debate because it highlights not only a local concern for my constituents and those living throughout Scotland's capital, but a national concern, as shown by the number of hon. Members who contacted me before the debate. I am grateful for their interest.
That said, I hope that hon. Members will understand if I concentrate part of my speech on the impact that outsourcing has had on my home city of Edinburgh, which is heavily dependent on the financial services industry. One term that we shall hear a number of times today is "offshoring". That relates to jobs that were formerly done in this country but which have now gone abroad. Local newspaper headlines along the lines of "City hit as 2,350 Aviva jobs go east" and "50,000 jobs lost to India" have, understandably, heightened local concerns, as shown by the number of letters, telephone calls and e-mails that my constituency office is receiving. The issue will also be the subject of debate during tomorrow's meeting of City of Edinburgh council on a motion tabled by the Liberal Democrat group leader, Jenny Dawe.
I want to mention the work of my constituency neighbour, the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), who is present. I hope that he will contribute to the debate. We have already had a joint meeting with interested parties, a practice that I hope can be continued, because one thing is clear: there is cross-party concern on this issue and the concerns are spreading to many homes throughout the country in the run-up to Christmas.
I accept that this is not just a local concern for Edinburgh or even Scotland as a whole; most UK call centre jobs remain in the south-east, and the Lloyds TSB losses will have a massive effect on Tyneside. This is far from just an Edinburgh problem, so I look forward to hearing contributions from other hon. Members on issues local to them. I also accept that outsourcing is not exclusive to the financial services industry. However, the announcements by HSBC, Lloyds and Aviva, which stand out from the rest, show the particular relevance of outsourcing to this industry. That is why I mention it in the title of the debate.
A number of other jobs have already gone overseas, and that has been the case for many years. Last week, I read about sporran and kilt production in India, which is even considering producing whisky and exporting that to Scotland. Today, however, I shall concentrate on the financial services industry.
Much has been written about what is happening in the global marketplace, why jobs have moved in the recent and distant past, who will be the winners and losers, and
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why our colonial past and the spread of the English language have resulted in particular risks for our country. I hope that this debate will add to the debate that is already taking place up and down the country on an issue that will affect thousands of individuals and their families in years to come.
Last week's announcement by the Secretary of State for Trade and Industry about setting up a study of the call centre industry is warmly welcomed. I hope that this debate will allow hon. Members to feed into the early stages of that study. The announcement is welcome partly because it contrasts starkly with the Prime Minister's comments last Wednesday. If he thinks that by saying that the job losses are just the way of the world he will soothe the fears of the people he serves, he is sadly mistaken. The Government, the Department of Trade and Industry and the Secretary of State must not downplay these issues, although admittedly the study recognises that there is a problem that needs to be addressed. Of course, the Government are right to say that we are not in a panic situation yet. However, the problem is part of a trend and we need to address it now, or we will face a very serious crisis in the not too distant future.
Why is the outsourcing of jobs, and financial services jobs in particular, so important? The UK call centre industry employs more than 790,000 people in more than 5,000 call centres. It employs almost 4 per cent. of the working population of Scotland, with nearly 100,000 people working in such centres. The figures for other parts of the country are just as stark. More than 4 per cent. of the employed population work in contact centres in the north-east and north-west of England. In many cases, the rise of the service sector, financial services and contact centres has occurred in parts of the country that suffered from a serious fall in manufacturing. The thought of yet another upheaval in industry in those areas brings dread to many people.
The first Adjournment debate that I secured was on the manufacturing industry in Scotland. In that debate, the former Secretary of State for Scotland, the right hon. Member for Airdrie and Shotts (Mrs. Liddell), made the point that the decline in manufacturing could be tolerated because of Scotland's booming service sector. I did not buy into that argument, but if it is true, the movement, or at least the beginning of the movement, of service sector jobs from Scotland to the Asian subcontinent should deeply concern us.
Answers to my parliamentary questions have revealed a 16,000 net decrease in manufacturing jobs north of the border in the past year. Without question there is greater dependence in Scotland on financial services, and the future of that industry is key to the future of the country. I accept that jobs move and that little in the global market remains the same. I am also aware that it is not all one-way traffic; there are benefits to companies in terms of cost reductions. We will naturally try to encourage jobs to come to our country, and it would be naive to think that other countries will not do the same. We welcome improved opportunities in the developing world so that those ravaged by hunger and poverty can hope that one day their lot will improve.
I would not advocate building barriers and pretending that the outside world does not exist. We have gained much over the years from becoming an

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international trading nation. A new set of problems must now be tackled so that the financial service industry does not become a victim of those who seek short-term financial gain instead of long-term security.
The figures on outsourcing show, perhaps contrary to some comments by the DTI, that people are right to be concerned. Firms have outsourced more than 50,000 jobs that serve UK customers to India over the past two years. India is not the only destination for jobs; South Africa, Malaysia and the Philippines have also gained from outsourcing.
In many cases, the job transfers have formed part of a pilot, but any experiment is carried out for a reason. Steve Tatlow, the assistant general secretary of Lloyds TSB Group union said:
"You don't spend money on a pilot if you don't think it's going to be a success."
If companies find the pilot to be successful, as some already have, surely they will follow it up. What will follow remains the big question and we will have to wait for the answer.
Outsourcing of call centre work is expected to increase by 25 per cent. over the next five years. Andrew Stewart, the managing director of the industry consultant Troika, has warned that 40,000 jobs in life and pensions and general insurance, along with 60,000 in banking, are likely to be moved abroad within the next few years. The announcements made last week by three financial giants—HSBC, Lloyds TSB and Aviva, owners of Norwich Union—have rightly received much publicity. The combined intentions of those companies amount to the transfer of about 7,000 jobs abroad. Those companies stand out because of the numbers involved, but it would be wrong to say that they are alone. The list of companies that have transferred jobs overseas, or are considering such a move, is extensive and includes Powergen, British Airways, British Telecom, Vertex, Thomas Cook, Prudential, Citigroup, JP Morgan, Scottish Widows, National Rail Enquiries, Tesco, Abbey National, Barclays, BSkyB, Royal Sun Alliance and Churchill Insurance. That extensive list shows the scale of the trend.
As was recently reported by the business section of the BBC, the list of processes that can be moved to the Asian subcontinent is almost endless and includes customer reservations, telemarketing, payroll processing, insurance claims and credit card and loan applications. Many contact centre jobs have already gone. Yesterday there was an announcement about legal jobs moving. Tomorrow it will be accountancy. Accountants should be warned that they are next.
It is not difficult to work out the reasons for this turn of events. British Telecom's workers in India are paid approximately 75p to £1.25 an hour compared with the £5 to £10 paid to contact centre staff in the UK. All the evidence suggests that labour costs are on average 40 per cent. cheaper than those in the UK, despite the fact that many call centre workers on the Asian subcontinent have two university degrees.
It would be wrong to suggest that we can compete with such low wages, and we should not try to do so. The Government are to be commended for the work that they have done to improve worker pay, and that
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progress must not be squandered. There are, however, other ways in which the Government can help. I will talk about those in a moment.
As I mentioned, the outsourcing of jobs has taken its toll on workers in Edinburgh. Some 60 of the 187 jobs at Norwich Union in the capital will be lost. That follows earlier job losses in July when the company shed 900 jobs nationwide. Abbey National has plans to move an estimated 100 Scottish Provident jobs from Edinburgh and Glasgow, and last month Lloyds TSB-owned Scottish Widows revealed plans to move several back-office processing jobs to India. All the evidence suggests that in the event of further outsourcing, Scotland in particular will be hit hard. Contact Babel, the call centre industry analysts, produced a report that concluded that Scotland was especially vulnerable to the trend that we are now seeing. It stated that the spectre of "mass unemployment" now hung over Scotland—hardly the backdrop that we want in the run-up to Christmas.
I should make it clear that not all financial companies have taken the decision to outsource. Standard Life, for example, one of the biggest employers in Edinburgh, with around 8,000 staff, has been firm in its commitment to keep jobs in the city and the country. Its director of human resources, Marcia Campbell, said:
"We have no plans to move any customer service roles overseas. We believe that having customer service operations at the heart of the organisation in Edinburgh delivers a real competitive advantage for Standard Life. We have one of the lowest staff turnovers in our industry and the depth of experience which has been built up could not be replicated by moving jobs elsewhere."
Similarly, the Royal Bank of Scotland, which will open its new headquarters in my constituency, employing around 3,000 staff, has confirmed its intentions to keep its call centre and other staff based in the UK. The Bank of Scotland, which employs some 7,000 people in Edinburgh, said after piloting the offshoring of some operations:
"After considering all the facts, we have decided not to pursue this option. We concluded that the best outcome for our staff, shareholders and customers is to continue to employ people in countries in which we operate."
I applaud those views and have carefully filed those comments away should the suggestion of a U-turn ever come about. On the positive side, it does show the corporate responsibility for which many of us in this place push so strongly. The success of large and, in some cases, multinational companies has come from the ability, tenacity and hard work of their UK staff. It is easy to understand the anger of those who feel betrayed when that hard work is repaid by the transfer of their jobs overseas. It is not only the company that deserves the loyalty of its employees; the employees who build it up also deserve its loyalty.
The big question is what we, and the Government, can do. I accept that these questions are not easy to answer, but we must have a strategy and a mechanism to deliver job protection, rather than the void that has existed so far. The study announced by the Department of Trade and Industry comes on the heels of a similar effort in Scotland—the setting up of the financial services strategy group, chaired by the Scottish Deputy First Minister and Minister for Enterprise and Lifelong Learning, Jim Wallace. The group's membership is impressive and includes the chief executive of Standard Life, the Bank of Scotland governor, George Mitchell,

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and the chairman of Scottish Enterprise Edinburgh and Lothian, Jim McFarlane. It is important for the group and the Government to work closely together to formulate a thoroughly integrated strategy for the protection of Scottish and UK financial services jobs.
The Secretary of State for Trade and Industry rightly said that we have a competitive international market. Our heads must not be in the clouds. We must not think that there is a magic solution or, as I said, that we can compete with low wages. I also oppose the view expressed by some that trade barriers should be erected to try to prevent the drift of jobs to places like India. We have a good trading relationship with that part of the world, which benefits us far more than it damages us. We must learn from the experiences of companies like the ones that I mentioned earlier, which have, for whatever reason, decided against outsourcing. What works well for them must be replicated to ensure that the business market remains competitive. Clearly some businesses see the UK as having lost that competitive edge. We need to work towards understanding how and why that has happened and what can be done to regain our pole position.
The various polls of public opinion on the issue of outsourcing have proved interesting. The research group Mitial found that 60 per cent. of the UK public were opposed to the idea of outsourcing jobs and a similar poll found that 78 per cent. believed that companies had not clearly addressed customer opinions on the migration of jobs. That may not be too surprising. However, the survey delivered by the TUC last September found that 63 per cent. of respondents would take the location of jobs into account before making a purchase.
The potential for consumer power is considerable. Several constituents have already contacted me, telling me that they have already cancelled or intend to cancel their policies with a certain financial company not only because of its decision to outsource a substantial number of jobs, but because of the way that the announcement was made. We will have to see whether that attitude and type of action will increase over time.
I am keen for other hon. Members to have an opportunity to contribute to the debate. However, as I have said, there is concern that what we are seeing now may be the thin end of a large wedge and that more substantial outsourcing and job losses will occur soon. The Government take pride in the levels of employment in the UK. Although I accept that such an accomplishment is important, I have to warn the Minister that if she responds to the debate merely by trumpeting the well documented employment figures, she will leave those concerned about the future of their jobs feeling let down.
In the run-up to Christmas, I can imagine the best possible present for the thousands who work in the call centre industry and financial services industry would be a commitment from the Minister that her Department and the Government take the matter seriously, perhaps more seriously than the Prime Minister suggested last week, and that a strategy for the future protection of such UK jobs will be a priority in the new year. I assure
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the Minister that many hon. Members and many thousands outside this place will listen closely to her words.
Several hon. Members rose
Mr. Frank Cook: Order. Those hon. Members who are well versed in the protocols of this Chamber will not be surprised to hear the following announcement. This is a 90-minute Adjournment debate and normal practice is to commence the three winding-up speeches 30 minutes before termination—in other words, at 10.30 am. Seven hon. Members seek to catch my eye, four of whom wrote to alert me beforehand that they wished to speak. I appeal to everyone to make their comments pertinent and as brief as possible, and to be judicious in accepting and responding to interventions. In doing that, hon. Members will help the Chair to allow everyone to speak.
9.47 am
Hugh Bayley: I believe that politicians should tell the truth, even if it makes them unpopular when they are the bearers of bad news. The sooner that we face an unpleasant reality—the reality that India can now do some office jobs more efficiently than we can in Britain—the sooner our businesses will start to adjust to the new competition and the more British jobs we will save.
I regret the loss of financial services jobs, whether those jobs are lost in my constituency-where, following the recent announcement by Norwich Union, the number of redundancies will thankfully be few—or elsewhere in the UK. I want the financial services industry to minimise the number of redundancies and to retrain and redeploy the maximum number of staff, but simply wringing our hands and blaming the companies, or the Government, will not help the workers. That is as useful as shouting at the driver of an express train when it is racing towards us, and asking the driver to stop. We should not pretend to ourselves, or to the public, that protectionism provides an answer. If we put barriers in the way of trade, it is like putting concrete blocks on that railway line. It may derail the train, but it will crash where we are, not where it started the journey, and we are likely to get hurt as well.
So what can we do? We can slow the process if we help financial services companies in this country to operate in an efficient environment. Companies in India get a lot of help from the Indian Government, who are creating new cities and industrial parks to house the new call centres and back-office administration jobs. They are investing to make their IT revolution happen. Norwich Union Life Insurance, which has its headquarters in York, in my constituency, says that City of York council helped it to find new premises when it recently expanded its operations at Monk's Cross and at Clifton, which are both in York, and when it needed to dig up a road at short notice to lay a communications cable. It has a good working relationship with the local authority. However, in some of the other cities in which it operates, it does not have such a helpful and flexible response from the local authorities. It would help industry if York's attitude were more common.
We need to argue through the World Trade Organisation for a level playing field. I read in The Sunday Times a few weeks ago that the Indian quango,

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Software Technology Parks of India, has been given a corporation tax holiday until 2010. We need to amend the general agreement on trades in services, or GATS, to ensure that such unlevelling of the playing field cannot take place. To do that, we need to achieve a deal in the Doha trade round, and to do that, we, as a developed country, need to make concessions to developing countries on agriculture trade reform, which is where developing countries gain most from world trade. It is in our interests to make concessions to developing countries in the trade round so that we get the benefits that we need in GATS at the high-tech end of trade negotiations.
We need also to adjust now; later will be too late. We can already see the train on the track, or as Gary Withers, chief executive of Norwich Union Life, told me earlier this week, we can see the tide coming in. Those who respond early and plan changes at their own pace can avoid many redundancies. For example, earlier this year Norwich Union established 1,200 jobs in call centres in India, which resulted in just 21 redundancies in the UK. The alternative to globalisation is to watch costs in one's company rise, to lose UK customers as a consequence and to end up making emergency job cuts to try to balance the books. That could cost thousands of jobs.
How can it be that one can outsource thousands of jobs to India and lose far fewer in the UK? Suppose that a company wants to create 2,300 administrative jobs. Taking into consideration such factors as the salary, the cost of the premises and the tax paid by the employer, that might cost £19,000 per job in the UK, a total of some £45 million. The same exercise in India might cost £4,000 per job for salary and on-costs, or £10 million in total. To that, one should add the same again, some £10 million, for telecoms links to the UK. A saving of some £25 million could be made, but where would be the benefit to Britain? First, it would be in the telecoms. They might well be provided by BT or Cable and Wireless, so half of the cost of a relocation might come back to the U K. Secondly, the saving of £25 million could be used by the company to develop and market new products in the UK or in other markets overseas in which it has subsidiaries and from which it repatriates profits to the UK.
The expenditure in India could help the British economy, too. If a British company pays sterling for the resources that it buys in from abroad, that sterling will eventually be spent by somebody abroad to buy goods or services from Britain. Even the spending power of the Indians who are earning in the offshore subsidiary will buy goods and services, such as mobile telephones and insurance policies. Aviva, the parent company of Norwich Union, has set up an insurance sales subsidiary in India and the profits from that can be repatriated.
The insurance industry is going through a period of great restructuring. I believe that in 10 years or so, we will end up with six or eight massive global companies. I would like some of those leading companies to be British—perhaps the Pru or Aviva—but if our companies do not retain their competitive edge, they could be swallowed by others. I would rather see
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Norwich Union still in the driving seat, with its headquarters in York, than it becoming a subsidiary of a company with its headquarters in Baltimore or Berlin.
Finally, we parliamentarians should spare a thought for India. When I was a child, our image of India was of a country facing endemic famine:of a man wearing a loincloth and holding a begging bowl. India still has more people living in absolute poverty—on less than $1a day—than any other country. However, it is changing fast. India's skills and hard work, its enterprise and its investment in education, together with our aid, and investment, are turning India into a development success story. It is in our interests that India should prosper, as we would be paying the country less in aid and we would export more goods there. India would benefit from development, but so would we. We do not make ourselves richer by keeping Indians poor.
Several hon. Members rose Several hon. Members rose
Mr. Frank Cook: Order. That was a move in the right direction, but it was not tight enough. We now have 34 minutes to accommodate the six hon. Members who seek to catch my eye. I call Mr. Peter Luff.
9.56 am
Mr. Peter Luff: Thank you, Mr. Cook:five minutes it is.
I agree with every word spoken by the hon. Member for City of York (Hugh Bayley) save for one. India does not want our aid. It is already an economically successful country, and it can develop its own way to success. I speak as chairman of the Conservative Parliamentary Friends of India. I was there recently on a two-week visit, and I saw many of the issues at first hand.
I agree with the hon. Gentleman that there are three basic reasons why we should resist the seductive arguments and tell the truth. First, it is in the interests of the survival and success of British companies. Secondly, it is in the economic self-interest of the United Kingdom. Thirdly, it is about morality—helping India out of the poverty that has afflicted it for far too long. Indeed, the openness of the IT sector in India stands in stark contrast to the many sectors that are still too heavily protected, particularly the retail sector. The success of IT in India is an exemplar to the Indian Government and the Indian people, showing that free trade can bring real benefits; it has been responsible for driving the liberalisation process in India.
I must tell the hon. Member for Edinburgh, West (John Barrett) that that is not a problem, as he said, but a challenge. I concede that it poses a challenge to the British economy, but it is not a problem. That is a big difference. As the Government have said, we need to drive up skills in the UK to enable us to compete in the globalised economy. There is no point in crying over spilt milk or trying to pretend that we can put that genie back in the bottle; it has happened. However, if we do not respond appropriately, our constituents will pay a heavy price.
There is a mythology about India. People say that it is has a low-skill economy. That is not so; highly skilled jobs are now going to India. For instance, Indian bankers are returning from New York, where they

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earned £500,000 a year, to work in Mombai; they are on lower salaries but have a much higher standard of living because of the country's low labour costs. India is changing fast, and those dramatic developments surprise those who are not familiar with the country. In a few years, India and China will rule the economic world. We need to understand that reality and adapt to it. We must not try to resist it. We need to engage with India, not to treat it as a problem.
As the hon. Member for City of York said, through our monstrous agriculture policies, we have for years forced India to export agricultural jobs. For many years before that, during the time of the British empire, we forced India to export its manufacturing jobs to Britain. The boot seems now to be on the other foot, but as the hon. Gentleman said, there is a mutual benefit to be had from responding appropriately. The correct response will lead to gains for all. The hon. Member for Edinburgh, West told us that Tesco's chief executive, Sir Terry Leahy, had spoken about investing in India. Sir Terry said:
"Indeed, by remaining competitive and innovative, we will create an additional 13,500 jobs in the UK this year, and over 2,000 jobs specifically in Scotland."
So a zero sum game is not being played. Of course it is painful for the individuals who from time to time lose their jobs, but more people will gain jobs if we respond appropriately.
Businesses cannot just stand by and watch their global competitiveness being eroded. The US economy has already benefited to the tune of some $16 billion in cost savings, while the British economy has saved only $1 billion. The nightmare scenario of the hon. Member for City of York will come true unless we respond appropriately and achieve the same cost savings. That is the way to maintain effective corporate strength and job creation in the UK. Companies have to make a difficult choice. If they do not outsource, they will probably go under. Some jobs may be lost in the process in the short term, but the gains are considerable.
In the specific context of Scotland, I ask the hon. Member for Edinburgh, West whether he has seen the report by Professor Phil Taylor of Stirling university and Professor Peter Bain of Strathclyde university. It noted that Scotland has had a net growth of 10,000 jobs in call centre employment during the past three years, while in the same period, the number of call centres in Scotland grew from 220 to 290. Of those approached by the authors, 92 centres said that they expected to add more jobs by 2006. Doom and gloom should not be preached. The job losses always make the headlines, and the successes are often ignored.
It is also important to remember that in Britain we are gaining from the outsourcing of call centre jobs from the continent of Europe to Britain. We are gaining employment from other European countries, and I have a word of warning to the Minister on that. We need to maintain not only our skills but job market flexibility, which is also key to that process. What is more, Indian businesses are investing heavily in the UK, including in a call centre in Belfast, and generating jobs in many other sectors too.
My message is simple: we have nothing to fear from the process. We must regard it as a challenge to address honestly and openly, and if we do, India and Britain both gain.
10.1 am
Mr. Jim Cousins: I congratulate the hon. Member for Edinburgh, West (John Barrett) on securing the debate, which is not simply about call centres, but our future knowledge base, because where the call centres go, many ancillary services will follow. We are talking not just about what my hon. Friend the Member for City of York (Hugh Bayley) described as office jobs, but about a great prospect for the future.
Some 1,000 jobs have been lost at Lloyds TSB in Newcastle. We are not losing our old economy, but our new economy—an economy that we have had for only 18 months, announced in the presence of the then Secretary of State and accompanied by a snowstorm of booster press releases. Those employed at the Lloyds TSB centre in Newcastle are largely young people and disproportionately from the British Asian community. The passion for opportunity, coupled with the lack of opportunity, especially in Newcastle, is a feature of that community. I always bear that fact in mind and want to stress it in debates.
Certain features of the financial services sector are of great importance. My hon. Friend the Member for City of York said that all the tax would come back to us, but the Government need to consider the corporation tax situation for companies that relocate. Will we face a major problem with future corporation tax revenues when companies relocate, particularly if that is accompanied by us losing a great part of the knowledge base that is associated with them?
We need to consider what data protection issues arise as a result of relocation because information about British consumers will be held on a massive scale in another jurisdiction. We also face regulatory issues. Every time I ring Lloyds TSB as a customer, I am asked whether I want to buy my gas from the company. In future, changes to financial services will allow banks to sell insurance and other products. What is the regulatory position of sales made over the phone from another jurisdiction? That applies especially to some of the relocations that directly affect insurance, which has important regulatory implications. As someone from Lloyds TSB explained to me at a meeting in the City only last week, call centres are in the front line of our defence against financial crime. How will the relocations affect that? How will British legislation on financial crime be reflected and carried out in relocated call centres?
Parliament recently passed draconian legislation—correctly, I thought at the time—on terrorism that involves money laundering. What implications does that have for the relocation of major information and service delivery centres for finance, banking and insurance services to other jurisdictions? The Government need to apply their mind to such issues rather than simply deliver rather old new Labour lectures on the need for workers to face change.
10.5 am
Annabelle Ewing: I congratulate the hon. Member for Edinburgh, West (John Barrett) on securing this important and timely debate. He set out clearly and concisely the importance of the financial services sector to the Scottish and UK economies and,

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therefore, the importance of call centre and back-office jobs in that sector. Like him, I have a direct constituency interest because Norwich Union, or its parent company Aviva, has a significant operational base in Perth. It was previously the headquarters of General Accident. Sadly, however, with all the subsequent amalgamations in the insurance business, that is no longer the case.
Aviva's announcement last week of its intention to offshore 2,350 jobs next year caused some alarm in Perth among both the Norwich Union staff and the wider population. Fortunately, this time we were assured that there will be no direct impact on jobs in Perth. None the less, the staff remain fearful about what lies ahead.
Financial services sector companies that are off shoring jobs say that it brings great cost savings— 40 per cent. in some cases—and that that is good news for everyone. I wonder if, and to what extent, those savings will be passed on to the consumer. The process appears first and foremost to be shareholder driven, not consumer driven.
Given the time constraints, I shall focus on giving the Minister some helpful suggestions. The Government's response to date has been somewhat disappointing. An initial period of silence was followed by some hand wringing, then the Prime Minister said, "Well, that is the way of the world", and finally, last Friday, the Secretary of State for Trade and Industry was forced to act. The Minister shakes her head. She will have the opportunity to comment when she responds. In any event, it is welcome that the Secretary of State is to commission a study into the sector.
I understand, however, that the study is limited to call centre jobs and offshoring. Will the Minister at least assure us that she will speak to the Secretary of State with a view to making representations to widen the remit of the study to include back-office IT and administrative jobs? That is crucial. As the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) said, it is the added-value jobs that are increasingly being shipped offshore. He also said that we should consider the extent to which the offshoring of jobs in the financial services sector is compatible with legislation, in particular the plethora of European Community single-market financial services legislation, to which all such companies are subject.
The Minister should consider the implications for data protection. Life insurance and health care insurance work are increasingly being off shored. Such work involves extremely sensitive information. Companies are moving from a paper-based approach to scanning paper online, and crucial issues of data protection should be examined. I urge the Minister and the Government to take on board what I think are helpful, constructive suggestions to consider how we can stand up for jobs in Scotland and throughout the UK in the important financial services sector.
10.10 am
Mr. Mark Lazarowicz: I declare an interest as the unpaid chair of a parliamentary group for Scottish Financial Enterprise. I congratulate the hon. Member for Edinburgh, West (John Barrett) on securing this debate.
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Not surprisingly—I am his constituency neighbour—my constituents have expressed the same concerns on this issue, which he set out very well.
I want to take up a couple of points made by my hon. Friend the Member for City of York (Hugh Bayley) and the hon. Member for Mid-Worcestershire (Mr. Luff) about the response that we should make to the move towards outsourcing jobs in the financial services sector and other sectors. It is not my position and, I suspect, that of other hon. Members in the Chamber, that every job that is outsourced should be regarded as a retrograde step. I recognise that in many cases that option makes the best business sense for companies and is in the interest of the remaining employees in this country. However, I cannot accept the argument that outsourcing is always inevitable and that nothing can be done about it. We accept, as an objective of the Government, that we must try to defend our manufacturing industry. As I understand it, decisions taken on the defence industry are specifically designed to maintain employment in this country, and we have heard that the Indian Government do not care to protect employment. Like other hon. Members, I am suggesting that our response to outsourcing should be more discriminating. We should not assume that there is nothing we can do in every case and that outsourcing is an inevitable effect of the global market.
A number of considerations have a bearing on our approach to the loss of jobs and outsourcing. First, when companies choose to outsource jobs, they should be bound by the same rules that would apply if they were transferring their business within the UK or the European Union. They should be prepared to pay the extra costs of the loss of pension rights and other benefits that they would probably have faced if they were transferring jobs within the UK. The same rules should apply if companies are outsourcing jobs outside the European Union. That may mean that some outsourcing would not take place. It would certainly mean that the workers whose jobs would go if companies moved abroad would get better compensation for their loss of employment.
Secondly, it is noticeable that the financial services companies that have made it clear that they do not intend to outsource are extremely successful and have shown a strong commitment to this country. So companies do not need to outsource to be successful. The hon. Member for Edinburgh, West mentioned the Royal Bank of Scotland, which has its headquarters in Edinburgh, and Standard Life, a mutual company. It is clear how important it is for the Government to take decisions to encourage companies to stay owned and headquartered in this country. They should not intervene to prevent people from entering the market, but should encourage strong UK-based companies, particularly in the regions and nations of the UK.
We must encourage new businesses. That applies to Edinburgh and Scotland in general, where the business formation rate is too low. It also applies to part of northeast England. Above all, there must be a recognition of the scale of the threat to the financial services industry in Edinburgh, where it is a major private sector employer, and in other parts of the UK. I welcome the decision taken by the Scottish Executive and the Secretary of State for Trade and Industry to set up a working group on the subject because the issue is

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important, particularly for Edinburgh. I want an action group to be set up for Edinburgh, involving the Scottish Executive, the Government, the city council and industry, to determine the best response to the challenge that we face as a result of outsourcing.
On the morality of responding to the outsourcing of jobs to India or elsewhere, the problem is that such policies will not benefit the landless poor or the urban poor who are on $1 a day or much less. Instead, those policies sometimes benefit the highly educated sectors in those economies and, above all, the financial services companies themselves. Such moves do not necessarily result in sustainable development in those countries. We already know, for example, that some of the jobs that have been outsourced to India are now being subcontracted to China.
I am not arguing in favour of protectionism, but my comments emphasise what a complex phenomenon globalisation is. The issues are not as simple as they sometimes first appear. However, let us not assume that the process is inevitable or that there is no response other than simply sitting back and accepting that such moves will take place. We should recognise that the issue is complex and that Governments in countries such as India are trying to support their jobs and economies. Let us also ensure that we are as proactive in defending our jobs and interests as those other countries are in their own way.
10.16 am
Mr. Robert Key: I congratulate the hon. Member for Edinburgh, West (John Barrett) on raising such an important issue. I have no intention of going over ground that has already been covered in this excellent debate.
A constituent of mine, Kate Williams, drew my attention to the serious impact that outsourcing jobs in the financial services sector has had in my constituency. She e-mailed me on 17 September, saying that she worked in the insurance sector and that the company that she worked for was involved in outsourcing. She said:
"I feel worried for my job, which is sad because I am only 21. Many employers in Salisbury are in the position where outsourcing is a feasible and real option."
She worked for Friends Provident, which has 900 employees in my constituency. It is an excellent company with a record in corporate social responsibility that is second to none. I am grateful to the chairman, the chief executive officer and the Amicus branch secretary for educating me a little on the problem of outsourcing in financial services.
The big conversation now should be about where the new jobs are coming from. In the 1970s and 1980s we lost 4 million jobs in steel, shipbuilding, railways and coal, but the UK defied the prophets of doom and we ended up with lower real unemployment than in 1967. I am old enough to remember the reaction of previous Labour Governments to the winds of economic change, as are other hon. Members in the Chamber. The policy was to subsidise declining industry and technology and to tax sunrise industries and jobs. Who can forget the selective employment tax and the Wilson-Castle fiasco, "In Place of Strife"? Perhaps no-one in that era really
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believed that the nation's whole economy could be transformed in a generation. Well, it was, and we had better believe that it can be again.
In the 1980s and 1990s, the new jobs came from service industries, including financial services, and information technology. Millions of new jobs were created. It was all made possible by the introduction of supply-side reforms in the economy, which made UK plc competitive at home and abroad, and the deregulation of industry and financial markets. The answer to the outsourcing problem for this country does not lie with new regulations or Government-imposed labour market rigidities, yet that is exactly what is happening. The Government are forcing financial services out of the country.
EU employment legislation such as the working time directive is starting to bite in the financial services industries. Growth in the housing market at the same time as a downturn in equity markets has brought new business to the protection market, which is operated by insurance companies and underwriters. There have been huge shortages of trained, senior underwriters. Companies have had to bring people out of retirement to cope, but it is much easier to source the new demand from India. For example, physicians in India are trained to the same standards as our own, are half the price and are quicker to train in assessing medical risk.
The demand does not just affect call centres or clerical jobs, however. India is producing 1 million graduates a year who are hungry for work. The Indian economy has a glittering future. We should also keep an eye on China, as it is not far behind.
The Treasury's new capital regulations for the financial services industries mean that insurance companies have to hold more capital. That leads to rigidity and inefficiency in resource allocation, and to companies becoming internationally uncompetitive. That is a mistake.
The problems have been accelerated by the stakeholder price caps. Ron Sandler's report in summer 2002 criticised the financial services industries for being inefficient, but the price caps that were imposed forced companies to put costs first, even if that meant outsourcing. That shows a failure to understand the financial services market.
The products sold by the financial services industries are now very similar, but what differentiates them for the consumer is the service offered by the company. The harder the Government squeeze companies on cost, the more jobs will be outsourced. The risk-takers running the industries recognise that there is a limit to outsourcing. In India, call centres train their work forces in accent—whether it should be British or American—and in the cultural backgrounds of the markets that they serve. However, for the customer, a policy is often a once-in-a-lifetime purchase, and a good insurance company, such as Friends Provident, wants to stay customer-based, in close contact with and in full understanding of its customers' needs.
The Treasury is sitting on the fence over price capping. The industry wants to know what the new regime will be, and the uncertainty is not helping it. Will the Chancellor please make up his mind? Will he also roll back the 1997 plundering of the financial services

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industries, and restore the 5 billion a year that he took away in dividend tax? Perhaps he will tell us something about that in his pre-Budget statement later today.
It is said that the French and German Governments protect their financial services industries, but I suspect that that is fanciful. Let us talk about language. The Germans, and many other EU nations, are naturally protected against outsourcing, because German is not spoken by people in China, India or anywhere much else. The French may use francophone Africa to outsource some jobs. For the British, however, the world, particularly India arid, in future, China, is our oyster. It is ironic that the genius of the English in exporting our language has become our Achilles heel.
Amicus does not advocate protectionism any more than I do. It reasonably asks employers and the Government where the new jobs are to come from. It also fights for employees in the financial services industries whose clerical jobs are at risk and who will not be able to cope with information technology. As the Salisbury branch officer said, "When their jobs go to India, where will they work—McDonalds?"
The big conversation must be about where the new jobs will come from. I have an informed hunch about that—science. The UK is not just resistant to science; it is anti-science. Powerful pressure groups and the ostrich-like media rant and rave against progress in science and technology, yet science makes the UK a cutting-edge contributor to a new world order. Instead, public opinion and prejudice forces scientists and businesses, especially those in biotechnology and nanotechnology, away from the UK, and discourages young people from studying science at school and university. That trend must be reversed. Future jobs will depend on science education, science education, science education.
Mr. Frank Cook: Thank you, one and all, for maintaining such splendid momentum; it has made my job so much easier.
10.23 am
Paul FlynnThank you, Mr. Deputy Speaker, for ensuring that we all have a chance to speak, by giving us timely reminders on the limits imposed.
My reason for speaking is that, in my constituency, 1.700 people work for Lloyds TSB, and there are several other call centres. The current position is worrying for those workers. I congratulate the hon. Member for Edinburgh, West (John Barrett) on securing the debate. The problems that we experience in Wales are similar to those that he mentioned; my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) experiences a similar situation in her constituency.
We have lost the long-established manufacturing jobs that were highly skilled and permanent, and that we thought would last until our grandchildren's time. Those jobs have been replaced by jobs in call centres, which have always been candy-floss jobs—they look wonderfully attractive when they come in, but quickly disappear, leaving a sickly taste in the mouth. Such jobs are not well rooted, and it has always been a concern
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that the agencies that attract new jobs into the area place far too much reliance on the long-term nature of call centre jobs. I will not repeat the many worthwhile points that have been made by hon. Members. We all see that there is a sad inevitability about what is happening. However, I will take up a point made by the hon. Member for Salisbury (Mr. Key), as he made it political.
When Tony Benn was a Minister, an enterprise was set up in my constituency through the National Enterprise Board. Does anyone remember that far back? The company was known as Inmoss and for nearly 20 years it provided highly skilled, cutting-edge jobs in the high technology business. It was a world leader, and it was set up through a Labour Government enterprise. Sadly those jobs were siphoned out of my constituency. They exist now under a nationalised French company in Grenoble. It is sad that one cannot equate this between one party and another.
I believe that what has been said is right. No one has argued that we should apply protectionism. Many have argued against it. We have protectionism for one industry, farming, and it has a doubly bad effect on developing countries. It subsidises our production, sells it below price to the developing world and puts up barriers to their production. It is unfair to tell workers in our constituencies who face the prospect of losing their jobs, particularly at this time of year, that there should be one rule for agriculture but an entirely different set of rules for them and that they are to be exposed to the full blizzard of international competition and to take the consequences.
It is right to support the Amicus campaign. There is a special value in call centres where we can have direct contact with someone who lives in these islands, and accents and cultural backgrounds are understood. Progress can be made. One accepts that there is a highly competitive business out there, but the rules that were imposed on the financial service industries are correct. There was a long period in which they behaved in a way that could not continue in many areas. For the past 20 years the financial service industries have behaved in a cavalier way towards their customers.
Judging by how their pensions and endowments fared during that time, many people may have concluded that they were more likely to be robbed by someone sitting on the other side of a polished desk, speaking in a soft voice and wearing a pinstriped suit, than by a burglar or a mugger. Unfortunately, if one loses out on pensions, endowments or other financial services, the theft goes on for a much longer period. We have a serious problem here, and the answer must lie in enterprise and innovation, which can ensure that we have jobs with added value.
I am concerned about vulnerable areas such as my constituency, where there have been heavy losses in manufacturing jobs. However, there has not been a drop in employment. Probably more people are employed in my constituency than at any other time in the last 50 years. It is extraordinary how resilient the economy becomes. We must ensure that we at least give the same kind of protection to those jobs as other countries clearly do. We cannot write this off as an inevitable

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force. We cannot stop the train—it is coming—but we can slow it down, and we can ensure that the destruction that it leaves behind is not as serious as it might be.
10.28 am
Brian Cotter: First, I congratulate my hon. Friend the Member for Edinburgh, West (John Barrett) on initiating the debate. It has clearly brought out many interesting points. He produced an enormous number of statistics showing how serious the problem is not just in his constituency, but in many other parts of the country. I am pleased to see that the Secretary of State has initiated an investigation into this. I shall look forward to seeing what comes out of that. There are many issues to be addressed, including the competitiveness of our own service industry.
Although it is regrettable that businesses choose to move their operations overseas, we should draw a few lessons from what is happening. First, we must meet the challenge by identifying how we, as politicians, can make the UK a more attractive place for companies to invest in. Cost is a major factor for many companies choosing to outsource their operations abroad, and many choose to move to places such as India because of the availability of a highly skilled, highly trained work force.
To get businesses to invest in Britain, it is imperative that the Government invest in the British people and equip them with the skills that are needed to keep the UK as a leading international competitor. Despite being the world's fourth-largest economy, we rank 12th out of 15 EU countries and 18th out of 30 countries in the Organisation for Economic Co-operation and Development in GDP per head, which is the best single measure of living standards and competitiveness. The training gap is affecting British productivity, and unless we act to boost the skills of our workers, companies will continue to look abroad to access the skills that they need to make their companies competitive.
Secondly, we must ensure that those who are unfortunate enough to lose their jobs as a result of the announcements have access to maximum support from the relevant Government agencies to help them to find alternative employment as soon as possible. It has been said that call centre workers are today's miners, and many colleagues have referred to manufacturing, where many jobs have been created but in which there is a risk, once again, that those jobs will go. The service industry provides an important boost to many communities where jobs are disappearing, especially in manufacturing.
Our job is to create sustainable communities in different regions of the country, so that the outsourcing of jobs does not have a disproportionate effect on local communities. The Government stressed that the regional development agencies should play a key role in achieving sustainable economic growth in the regions, and the Liberal Democrats supported that, so why are the Government not allowing the RDAs to get on and do it? Why do they have to spend valuable time and money complying with Whitehall diktats? As outlined in a recent National Audit Office report, the Department of Trade and Industry forced one RDA to write a £500,000 corporate plan that was so irrelevant to the
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agency's needs that it had quickly to draw up another. Would not that time have been better spent actively promoting the region's long-term economic expansion rather than wasting time and resources complying with the orders of the vast army of Sir Humphreys in the DTI? As the Minister knows, my party is very concerned about the DTI and centralisation.
Thirdly, despite the distress caused when companies choose to move their jobs overseas, we must resist the urge to plump for protection. It is no use our lecturing other countries on the merits of free trade within the WTO if we restrict the right of British businesses to purchase labour from other nations. Rather than protecting jobs, such an approach would make workers more vulnerable by damaging the long-term competitiveness of British industry and undermining foreign investment. Furthermore, the United States' experience has shown that commercial investment can pay dividends at home. A recent report by McKinsey Global Institute found that every dollar that a US company invests abroad boosts the US economy by $1.45 to $1.47, a point to be taken on board. By investing abroad, UK companies can consolidate their interest in Britain, allowing them to create more jobs at home and attract increased levels of trade and investment, which will sustain the economy in the long run.
We should remember that despite the announcements, Britain retains a strong trade in services, with service exports currently at £82 billion—a situation that we must continue to promote—and imports at £69 billion. It is also likely that the continued outsourcing of jobs to India will force up wage rates there and make the area not quite so attractive in the long run.
Fourthly, although we must ensure that businesses are not hampered by restrictive constraints, we must recognise that they have responsibilities towards both their staff and customers. As such, it is essential that companies wishing to relocate should consult fully with their employees about any proposed changes and offer as many voluntary redundancy packages as possible.
Furthermore, companies wishing to relocate must remember that consumers will vote with their feet if they object to their corporate policy—an issue that we are addressing at the moment. Research by Amicus, which has been referred to already, shows that 68 per cent. of customers take into consideration the location of call centres when purchasing services, and 70 per cent. feel that businesses have a moral duty to remain based in the UK. That is something for businesses to consider.
A British company will have to consider carefully whether it wants to risk its corporate reputation by making such a move—a factor that will influence the market much more effectively than the introduction of restrictive Government regulations. The other point is that customers are unlikely to support the outsourcing of call centres if they believe that the company fat cats, to use a common expression, will be the only beneficiaries of any savings. The companies concerned would be foolish not to pass on savings to consumers.
The chief executive of National Rail Enquiries recently claimed that outsourcing the service to India could save the train operating companies up to £25 million over several years. If the jobs at the two

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existing Newcastle call centres move abroad, there will be an understandable public outcry if passengers do not see the benefit of savings in reduced ticket prices.
Many companies have found that far from improving customer service, the outsourcing of services has upset many consumers, who have been unable to communicate effectively with call centre staff in far-flung corners of the globe. We must accept that the outsourcing of financial services is a phenomenon that is likely to continue if British businesses are to maintain their competitiveness within the global economy. However, the challenge for politicians is not to prevent that happening by protectionist means, but to build an economic and skills base that will make British firms never want to leave.
10.38 am
Mr. Henry Bellingham: I should like to declare my interest as stated in the Register of Members' Interests and to congratulate the hon. Member for Edinburgh, West (John Barrett) on securing this debate. We have had an excellent, wide-ranging discussion and a lot of contributions.
Several companies have been mentioned, including British Airways, Barclays, Aviva, HSBC and, most recently, National Rail Enquiries. I agree with the Liberal Democrat spokesman, the hon. Member for Weston-super-Mare (Brian Cotter), that there is a special dimension to National Rail Enquiries, as taxpayers' money, in the form of grants to the train operating companies, has arguably been used in exporting jobs.
I want to refer to the point about onshoring. I have been contacted by about a dozen constituents who are IT consultants. They are struggling to find work as a result of the extra work permits that have been issued to IT consultants from the Indian subcontinent, and there is certainly an argument that too many permits have been issued.
There is no doubt that the Government's reaction in announcing the study is to be welcomed, but the Secretary of State's comments at the CBI conference were complacent. She appeared to be relaxed, and indifferent to the problems of those individuals. I agree with my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) that this is a challenge rather than a problem, but it is certainly a problem for people who have lost their jobs.
The Leader of the House and part-time Secretary of State for Wales said in the House last week that
"companies that outsource part of their work create a big return for this country".— [0fficial Report, 4 December 2003; Vol. 415, c. 658.]
He welcomed the jobs exodus, saying that it was good news for India's economy and the poor. That is insulting to the people who have lost their jobs and who will have a miserable Christmas. The Government are right to set up the study, but they should listen to what businesses are saying. Towns and cities in east Anglia are also affected, and every business that I have spoken to or corresponded with has made it clear that there are two main reasons for the problem: the skills shortage, and the huge increase in red tape, regulation and employment legislation.
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The skills problem has already been mentioned, especially by the hon. Member for Weston-super-Mare. Despite the Government's claims, the problems of literacy and numeracy are not being resolved fast enough. The Ofsted report published yesterday says that nearly half of teaching in English primary schools is inadequate, mainly because teachers do not know enough about literacy and numeracy, and that a quarter of all I 1 -year-olds—more than 150,000 children—move on to secondary school without reaching the expected levels in English and mathematics. The Government missed their targets last year and will almost certainly do so again this year. Unless we can sort out these basic problems in literacy and numeracy in schools and address some of the vocational skills shortages, we will not deliver to British businesses the pool of skilled labour that they need and deserve.
As my hon. Friend the Member for Salisbury (Mr. Key) pointed out in an interesting and historical discourse, this Government inherited an economy that was in very good shape and a supply side that was the least regulated in Europe and the envy of the world. By 1997, the balance between employer rights and employee rights was probably fair. The work-life balance was also probably just about right. Above all, the previous Government secured an opt-out from the social chapter.
Since then, however, there has been an avalanche of burdens and extra pressures. Individually, those burdens and regulations are not show-stoppers or deal-breakers. It is the combined weight now bearing down on business that is starting to destroy entrepreneurial growth and that, above all, will destroy jobs, especially in small and medium-sized enterprises. The problem has been hidden to some extent by the large number of extra jobs that have been created in the public sector. The result is simple: Britain is no longer the best place in Europe in which to do business.
A recent CBI survey contained worrying findings. Some 70 per cent. of business leaders believe that in the past five years the UK has become a less attractive place in which to do business, and that the situation has worsened since 2002. Two thirds of business leaders believe that the Government place a low priority on delivering a favourable business environment, and 75 per cent. believe that the Government are less business-friendly than they were five years ago. Ministers should certainly take note of those beliefs.
Some 44 per cent. of business leaders are under pressure to outsource activities abroad. That indicates just how globally mobile businesses have become, but it also illustrates the scale of the problem that we are discussing today. The Government must examine some of the home-grown legislation that is being introduced. In the past few years, we have had employment legislation that includes the right to flexible contracts—another home-grown measure—and we now have the Employment Rights Bill. That represents another shift away from management's right to manage. I hope that the Minister of State does not share the Secretary of State's seeming obsession with the work-life balance agenda, they should be talking about skills, lifting the burden of regulation and, above all, listening to business and giving businesses the climate that they want.

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As for Europe, since we gave up the opt-out from the social chapter we now face the agency workers directive. If temporary workers are given full contractual rights after six weeks, that could be damaging; it will add to the pressure on businesses to move abroad. We shall be equally powerless to do anything about the information and consultation directive, which will also put more pressure on business. As my hon. Friend the Member for Salisbury pointed out, although the working time directive does not come under the social chapter because it deals with health and safety, we secured an opt-out for individuals, who can opt out of that directive by agreement with the employer. That is a satisfactory arrangement, and it suits everyone extremely well.
Every business organisation and trade association to which I have spoken has been completely unequivocal about the fact that the individual opt-out is vital to the general health not only of their competitive position but of business generally. It is pretty well mission-critical to the health of British business. Although the Greek presidency tried quite hard to push for the removal of the individual opt-out, it did not reach the agenda of the last Employment Ministers Council. However, it remains in the background and is almost certain to come back at the next Council meeting.
I find it depressing that we are getting mixed messages from the Government. First, Socialist MEPs are pushing hard to have the UK's individual opt-out removed. Stephen Hughes, the secretary of the group of European Socialist MEPs, together with Alejandro Cercas Alonso, has helped put together an "own initiative" report on the subject. The Government have said that they are keen to keep the opt-out. Where do they stand? Do they support their MEPs in Brussels? Will they support the initiative to have it removed, or will they listen to our business organisations, particularly those that represent smaller businesses, who have been pushing hard to keep it? The opt-out is popular with firms and employees alike.
As my hon. Friend the Member for Salisbury pointed out, the supply side of the economy is vital. Unless that is right, and it is maintained at its current level, the atmosphere for business will become a great deal less favourable. Unless the Government, and particularly the DTI, get a grip not only of the skills problems but of the overall regulatory framework, the steady flow of jobs offshore could become a torrent. We need a fundamental change of approach. I hope that the Minister is going to tell us that there will be such a change. If not, the results of next year's CBI survey, -Is Britain a good place to do business?", will be considerably worse than this year's, and those were a great deal worse than last year's. We look to the Minister to take action, and we hope that she will listen to what business is saying.
10.48 am
The Minister for Industry and the Regions (Jacqui Smith): I am grateful to the hon. Member for Edinburgh, West (John Barrett) for leading this useful and constructive debate on an increasingly important subject.
I reassure hon. Members that all Ministers and the Government take the matter seriously. We share the concerns of those immediately affected by plans to send
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financial services work offshore. We know that such announcements are painful, and that they affect many of the communities left devastated by the loss of manufacturing industry 20 years ago. We also take seriously their effect on local employment, not least because, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) pointed out, they fall disproportionately on certain groups. However, we need to put the matter into perspective.
I agree with the hon. Member for Mid-Worcestershire (Mr. Luff) that this is not a zero-sum game. Headlines do not always tell the whole story. They miss the thousands of jobs created or safeguarded by companies choosing to locate in the UK. They also miss the many companies that consider offshoring but choose to stay in the UK. Headlines report the jobs relocated to Asia and other developing countries, but not the 1 million people employed in the UK financial services sector.
Despite the words of doom from the hon. Members for Salisbury (Mr. Key) and for North-West Norfolk (Mr. Bellingham), I must pause to note that, judging by the latter's contribution, Opposition policy on developing the financial services sector mainly comprises people seeing less of their children and working longer hours. I am not sure that that is the most appropriate way to develop the sector. In 2002–03 alone, it saw inward investment creating more than 5,000 jobs. The recent decisions by a number of firms to offshore their back office operations must be set in that context.
As several hon. Members said, the decision about where to locate operations is a commercial matter for companies. Labour costs are one issue that companies may well consider, but there are others. Falling communication costs, coupled with the spread of technology, have made it easier for some services to be provided across long distances and international borders, including in developing countries. However, even if services could be undertaken abroad, companies may also, and many do, factor into their considerations the need or desire to be located close to their customers. For that reason, many companies choose not to offshore.
Those companies, and in particular those that took the decision to offshore but now wish that they had not, say that they failed to envisage the difficulty of managing staff, of maintaining standards when staff are thousands of miles away and of offering proper customer service if staff, however good their education, have never been to the UK. Companies weigh those issues seriously in making their decision.
We do not yet have the information that we need about the scale of or motivation for offshoring. We see examples of activity, but we need to open up the debate on offshoring to understand better what is happening and what motivates both companies that offshore and companies that do not.
Annabelle Ewing: Will the Minister give way?
Jacqui Smith: No.
We must also deal with some fundamental misunderstandings. The first is that the UK call centre industry is in terminal decline. In reality, we have more call centres than any other European country and new

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centres are opening all the time. Estimates vary, but industry experts suggest that there are about 5,500 UK call centres, employing almost 400,000 workers. The skills and vital local knowledge of our work force, the stable economic background created by the Government, and the UK's strong IT and telecommunications infrastructure mean that we remain well placed to attract call centre jobs in a competitive market. Given our language, location, infrastructure and customer service skills, Britain remains in a strong position to attract, in particular, high added-value call centre work.
The second misunderstanding, which was ably identified by my hon. Friend the Member for City of York (Hugh Bayley), is that protectionism offers a solution. Protectionism is clearly not the right response. UK exports are worth £270 billion a year; that includes £86 billion of service exports. Many jobs depend, as my hon. Friend outlined, on open markets abroad. Given our leading position as a global exporter of services, we must keep pressing for further opening up of markets for our exports. We are doing that in Europe through the proposed new services directive and in the wider world through the Doha round of the World Trade Organisation.
We cannot at the same time have a protectionist response to offshoring by companies at home, and nor should we. As we saw when the EU expanded to include poorer countries such as Ireland, Greece, Spain and Portugal, as they have grown, so have we. Our exports to them have increased., generating jobs and profits here, as has their investment in the UK. There will be opportunities to enable developing countries to develop further.
I agree with my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) and with parts of the contribution made by my hon. Friend the Member for Newport., West (Paul Flynn). Instead of taking protectionist measures, we must enable and encourage firms in the UK to invest in new technology and work force skills. I agree with the hon. Member for Salisbury that we must ensure that our excellent science base is translated into business success. We must also move into advanced, high-value activities. We should continue to make the UK an attractive place in which to invest and do business. Our response to competition is not to be complacent, but to recognise the arguments that have been made about protectionism. There are three arguments.
First, we should be raising our game, ensuring that companies and their staff continually upgrade their skills and technologies. That is why in July we published our White Paper entitled "21st century skills—Realising our potential", which outlines the strategy of the DTI and the Department for Education and Skills for tackling the skills challenge. It firmly links skills to productivity, competitiveness and economic performance at national, regional and local levels. It details, for example, the way in which e-skills and other skills have developed, and how that will continue to make the UK an attractive place in which to base that work.
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Secondly, I agree with the hon. Member for Westonsuper-Mare (Brian Cotter) that, where jobs are lost, we must do everything that we can to help people to find new jobs, and new skills, if necessary, as quickly as possible. We shall call on the services of the reformed Jobcentre Plus, particularly its rapid response service, which focuses on redundancies where particularly intensive work is needed.
Thirdly, we are taking action to do even more to build strong and sustainable economies in all regions of the UK. I ask the hon. Member for Weston-super-Mare to return to the NAO report on RDAs, particularly the section that emphasised the progress and success of RDAs over the last five years. Those successes include raising the business birth rate, forging strong partnerships between the regions, universities and business, developing the skills that the regional economy needs, attracting more inward investors and improving local infrastructure.
All that success is important but, as I suggested, there is much more that we need to know and do. That is why, last Friday, my right hon. Friend the Secretary of State announced in her speech to the CBI Welsh conference the publication of a DTI consultation paper entitled "The Impact of Increasing International Competition in Services". Copies have been placed in the Library of the House. The paper outlines the main issues, and highlights areas for further research, and is intended to lead an informed debate giving all stakeholders an opportunity to contribute. We should bear in mind the fact that the consultation will be an important way of addressing some of the issues, such as data protection and financial crime, raised by my hon. Friend the Member for Newcastle upon Tyne, Central, and by the hon. Member for Perth (Annabelle Ewing).
The Secretary of State also commissioned a new call centre competitiveness study to ensure that we maximise the advantages that I have outlined, as we compete worldwide for more high-skill, high-value and high-wage call centre jobs. Our record shows the priority that the Government have given to job creation: there have been more than 1.7 million new jobs since 1997. We know that we cannot rest on our laurels, and our policies will continue to be geared to our long-term economic interests, based on our ability to innovate, to produce high-value added goods and services that need a highly skilled work force, high-calibre managers, forward-looking unions and knowledgeable consumers.
The Government take seriously the issues that this interesting and informative debate has raised. As well as taking the initiatives that I have outlined, we shall be discussing the issues with all interested parties, including employers, trade unions and businesses—both those who have decided to offshore and those who have decided not to—in a round-table seminar in the new year.
The Government will be focusing all their efforts on keeping the UK economy strong and stable, generating more and better jobs by raising skill levels, supporting enterprise and raising business innovation and productivity. We will also be vigilant as regards the impact of globalisation on regional and local economies. We will ensure that the UK economy is best equipped to respond to such challenges and that it has the successful individuals that it needs.

Berkshire Healthcare NHS Trust
11 am
Mr. Andrew Mackay: I commence by thanking Mr. Speaker for granting this extremely urgent debate. It is much appreciated by the people of Berkshire, who are deeply concerned about the financial position of the Berkshire Healthcare NHS trust. Secondly, I convey the apologies of my hon. Friend the Member for Maidenhead (Mrs. May), who is at the Children of Courage awards. She would have been here otherwise, because she takes a keen interest in the problem.
I will put a number of points to the Minister and I trust that she will answer them fully. First, which is the most vulnerable group of people in our society? I suggest that it is the mentally ill and those with mental health conditions and problems, closely followed by their carers, who do an outstanding job, and whom we should commend.
Vulnerable people in my constituency and throughout Berkshire are at their wits' end and are deeply distressed. The reason for that is very simple: it was revealed earlier this year that the new mental health trust that was set up for the county in April 2001 had overspent by £11.9 million and that the deficit had to be made good quickly. That means that there will be cuts of £8.1 million this year. My constituents cannot understand why Ministers are telling them every day on radio and television and in the newspapers that more taxpayers' money than ever before is going into the NHS, when there will be cuts of £8.1 million at the sharp end—where trusts are having to deal with mental health and mental illness in Berkshire. The Minister must tell us why we need the cuts if all that extra money is going in.
The trust has come up with one or two ideas as to where the cuts will fall. It has suggested the drugs budget. If it can make large cuts in the drugs budget, that will imply that it was wrongly prescribing over-expensive and unnecessary drugs, which would be a public scandal. However, I suspect that the drugs that people desperately need will no longer be available and will be replaced by cheaper, weaker and less effective substitutes.
We are told that patients who receive treatment out of area will be brought back into area. In principle, I am in favour of that. However, if patients can be brought back into area, will that, too, mean that there has been a scandalous waste of resources and that patients were unnecessarily going out of area? On the other hand, does it mean, as I suspect it does, that many of my constituents will get inferior treatment because it will be cheaper to look after them in area, even where specialties are not properly available? That would be a disgrace.
We are told that there will be a staff freeze. We all know what that means—when people leave, their positions will not be filled. That is fine if there has been unnecessary over-staffing. However, I suspect that the staff are as necessary as they were when the trust was set up and that reducing staffing levels will mean that certain services and care are no longer available in my constituency. That is deeply unsatisfactory.
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We need the Minister to say why the huge deficit and overspend occurred in such a short space of time—less than two years. Two reasons, or excuses, have been given. One is that the trust had no idea that the deficit and overspend were rising because accounting and auditing were done nationally, and the computer was not working. We have all heard the excuse about the computer being wrong rather than the people, so I have some doubts about that. However, I want the Minister's comments.
The second reason, or excuse, is more feasible. We are told that the trust was not funded properly when it was formed from entities taken from a lot of other organisations and trusts. We are told that, as a result of creative accounting, those other organisations and trusts kept more assets and income than they should have done and, therefore, that the trust never stood a chance. If that is true, whose fault is it? The answer is that it is the Secretary of State's fault. When the Government start changing trusts and creating new trusts, it is the Secretary of State's duty and responsibility to make sure that they are properly funded and set up and that deficits do not occur. So the Minister must tell us why we are in this situation. We need to know who was responsible and what will be done.
We also need to know what will happen next. It cannot be right that, through no fault of their own, vulnerable people and their carers will suffer for other people's mistakes and incompetence. I will not stand idly by and watch the cuts take place. Nor will the people of Berkshire, huge numbers of whom have signed petitions organised by the mental health voluntary action alliance and others. It is essential that the Minister tell us that the Government will intervene to ensure that the cuts do not take place. At a time when, as I said, more money is going into the NHS from taxpayers than ever before, it is inconceivable that vulnerable people should suffer such cuts in services.
Another concern that the Minister must address is accessibility. She will appreciate that access to mental health facilities, treatment and services is vital. Under strategic health authority proposals, most services will be concentrated at Prospect Park in Reading, which is a long way for my constituents and those who live in Windsor, Maidenhead and Slough to travel. That is most unsatisfactory.
There are also suggestions that vital wards—wards 12 and 14—at Ascot's Heatherwood hospital, which serves most of my constituency, will be reduced or abandoned altogether. Today, we want an undertaking not only that the cuts will be reversed, but that there will be good local access and that the very wrong plan to concentrate all resources at Prospect Park will be turned down. The Minister will have had reports of the huge meeting at the Madjeski stadium in Reading just a month ago. All sorts of stakeholders attended and they rejected the proposals virtually unanimously.
I paint a very bleak picture indeed. The county's Members of Parliament, who represent all three political parties, are broadly united in their disgust at what has happened and they are demanding action. There are some very frightened, vulnerable people who do not know what Christmas and the new year will bring. We are all looking to the Minister for an appropriate response.

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In that respect, I should tell the Minister that her colleague, the Minister of State, the hon. Member for Doncaster, Central (Ms Winterton), woefully failed at Health questions recently, when she told me that there was no problem in Berkshire. One can imagine how disgusted the people of Berkshire were when they read the Hansard report of those exchanges. I should also tell the Minister that the written response from the Minister of State, the right hon. Member for Barrow and Furness (Mr. Hutton), failed to address any of the questions that I put to him then or any of those that I am putting to her now. I therefore sought this debate out of desperation.
I intend to sit down two or three minutes early, so that, in the remaining 18 min utes, the Minister has every opportunity to reply in detail to the very serious questions that I have raised.
11.12 am
The Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson): I congratulate the right hon. Member for Bracknell (Mr. Mackay) on securing this debate. I obviously listened carefully to his concerns about the financial position of the Berkshire Healthcare NHS trust. I should say at the outset that I agree that there are significant challenges ahead and that the local NHS needs to respond to them.
Before I deal with the specific issues raised by the right hon. Gentleman, I want to place in context the circumstances faced by the trust in delivering quality services. I am pleased that he did not criticise the quality of those services, but merely the financial position and the issues arising from it. As he will know, the trust provides secondary mental health care, learning disability and substance misuse services for Berkshire and it serves a population of 900,000.
The trust continues to perform well in meeting mental health targets, particularly in its development of crisis resolution teams, which are working across east and west Berkshire and making a real difference to people. The community services have also extended their working hours, including evenings and weekends, so that patients and their carers can access help and support when they need it.
The right hon. Gentleman opened his remarks by saying that vulnerable people were involved. Nobody would disagree with that, least of all me. He also said that carers were concerned about the situation. I understand that, faced with such financial difficulty, people—particularly such vulnerable people—receiving the services and their families will be concerned. The right hon. Gentleman asked why we are in this situation. He is right that record sums of money are going into the NHS, and the NHS in Berkshire is no exception. In the 2002 Budget, the Chancellor announced the largest sustained increase in funding in any five-year period in the history of the NHS. The plans mean that between 2003–04 and 2007–08 expenditure on the NHS in England will increase, on average, by 7.4 per cent. a year above inflation—a national increase of £34 billion. For the three-year period that I have mentioned, Bracknell Forest primary care trust will receive an increase in its revenue allocation of some £20.8 million-29.52 per cent. I am sure that the right
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hon. Gentleman will agree that substantial extra sums are going to the NHS in his area. The issue is not the amount of cash not going into the system. The right hon. Gentleman is right that what we say about money going into the NHS is borne out by the fact of the extra investment.
Our policy is to devolve much of the money to local trusts so that they can buy health care for their populations. Primary care trusts have specific local knowledge and expertise. They are the key drivers for improving health, securing the provision of all health services and integrating health and social care. To reflect that greater responsibility, they now also control 75 per cent. of the total NHS budget.
Before I talk about the general financial position of the trust and what has led to the present circumstances, let me respond to the right hon. Gentleman's comments on drugs budgets. We are not aware of any cuts to drugs budgets. That is not part of the financial recovery plan for the trust.
As to the current position of the trust and the concerns that have been raised, it has already had significant additional resources. Annual expenditure must remain within the resources that have been allocated by Parliament. I am sure that the right hon. Gentleman would not urge on the Government any less discipline than we wish to impose ourselves. It is now the responsibility of strategic health authorities both to deliver overall financial balance for their local health communities and to ensure that each body achieves financial balance. There is a degree of flexibility as to how that is managed locally. Where financial balance cannot be achieved in the current financial year, SHAs can agree to recovery plans that phase the recovery of deficits over a longer period.
Thames Valley SHA has been working closely with Berkshire Healthcare NHS trust since June, and they agreed an outline recovery plan in July. The SHA has also provided interim support for the trust, so that it has more than one year in which to return to financial balance. The trust has made significant efforts to bring its financial position under control, and it needs to continue to do so. I understand from the Thames Valley SHA that the trust is on course to bring down its deficit to around £5 million by the end of March 2004. That is a significant achievement, considering that an overspend of about £11.9 million was projected in June. I cannot disagree with the right hon. Gentleman: the task is challenging. However, I should make it clear that I expect the challenges to be met with a minimum impact on local people. Indeed, both Thames Valley SHA and the trust assure me that, despite the problems, the trust will maintain delivery of safe and secure mental health services and key service targets.
How did the trust come to be in the position that it is in? I can outline some of the key issues for the right hon. Gentleman in that regard. The trust had not signalled any forthcoming financial difficulty, nor, I understand, did any of its papers before the end of the financial year in March 2003 indicate that there were any financial difficulties. It was therefore a surprise when the trust found itself in that position. We could speculate on whether that was appropriate—I would almost certainly share the right hon. Gentleman's view that it was not. I understand that the then director of finance has since left the post.

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The deficit appears to have been caused by a number of factors: the move of the learning disability homes to the independent sector, poor financial controls, investment in the modernisation of services such as the assertive outreach and crisis resolution services, the transfer of the management and provision of services for the people of south Oxfordshire to Oxford mental health trust, and the development of improved services through the transfer of services from Fair Mile hospital to Prospect Park hospital.
Faced with the deficit, the SHA has agreed a recovery plan and, broadly speaking, the trust is on target to deliver on it. Obviously the bulk of the deficit will be reclaimed—recovered, as it were—this financial year. The rest will have to be reclaimed in the next financial year. The right hon. Gentleman did not mention the report that PricewaterhouseCoopers issued and I do not know whether he has seen it.
Mr. Mackay indicated dissent
Miss Johnson: The right hon. Gentleman shakes his head—I am told that the report is available and was part of the public papers of either the SHA or the trust. Berkshire Healthcare NHS trust commissioned the company to undertake a financial review of the process and procedures in the trust, following the emergence of the deficit. As a result, the recovery plan has been agreed. It is leading to the recovery of the substantial part of the deficit, which is expected by the end of March 2004. That should reassure the right hon. Gentleman that the matter is being taken in hand again.
Mr. Mackay: It is all very well to say that the deficit is being reduced. Fair enough, but that is not the problem. The problem is that services have been cut. The only way to make such huge reductions in the deficit is to cut services to the most vulnerable people.
Miss Johnson: I have already said that I expect the challenges to be met with the minimum impact on local people. I am afraid that the right hon. Gentleman has not supplied me with any details about the impact that the recovery of the deficit has had on local people, with which I could address the points. If he wishes to write to me or to the Minister of State, my hon. Friend the Member for Doncaster, Central (Ms Winterton), we shall look at the points in more detail.
There has been a public consultation on the issue, involving a meeting in Reading on 6 November, to which the right hon. Gentleman referred. Around 120 people attended that meeting, where they looked at the options for the proposed new model of care for people with mental health problems in Berkshire. That was an all-day session; it brought together service users, carers, primary care trusts and local authorities. The work focused on a range of possibilities for a hub-and-spoke model, with local services supported by specialised hospital care. Twelve options, using five criteria, were
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considered. The Reading PCT and the Windsor, Ascot and Maidenhead PCTs together, as the lead commissioners for mental health services in the county, are considering the findings of the day to agree the best way forward. Due process of further consultation will be followed, and a full report will also be made to the Thames Valley SHA, which will discuss the options in early January. There is an ongoing process in respect of significant changes—or even more minor ones—to the service configuration.
I shall now discuss the local services in more detail. The main aim of the recovery plan is to bring mental health services even closer to where people live in the community—the hon. Gentleman made the point about the distance of some parts of the county from, for example, Reading. That includes bringing back to Berkshire patients who have been receiving treatment in other parts of the country so that they receive care closer to their families and friends. In response to the financial challenges, the trust is looking more radically at the provision of mental health services locally and how they can be improved.
The trust has developed a vision for local mental health services that will enable the provision of services locally, with a centre of excellence for those needing inpatient care. That model, which was discussed. involved, for example, the possibility of more community support in terms of day care, enhanced crisis services, expansion of community health schemes, closer liaison with accident and emergency, more community rehabilitation, extra support for older people and more day hospital services. That was the type of thing discussed at the meeting on 6 November. All the models were discussed and the comments made are being considered.
There is a lot more work to be done, but hon. Members, including the right hon. Gentleman and the hon. Member for Maidenhead (Mrs. May), can be reassured that work is in hand and that there will be an opportunity for them to express views on behalf of local people as part of that process.
In conclusion, I have taken serious note of the concerns raised by the right hon. Gentleman on this important subject. He and I agree that there are challenges ahead for the Berkshire Healthcare NHS trust. I hope I have reassured him that a lot of extra money has gone into the trust. I expect the health community to respond to the challenges and significant efforts to be made to achieve financial balance. I am sure the right hon. Gentleman will agree with me that that is necessary to achieve sustainable services and to deliver key targets. The Thames Valley SHA and the local health community must continue to support and guide Berkshire Healthcare NHS t rust during this period. I am sure they will welcome the interest, concern and support of their local Members.
11.28 am
Sitting suspended until Two o'clock.

Consumer Credit
2 pm
Mr. Mark Lazarowicz: It is a pleasure, Mr. Cook, to speak in a second debate in Westminster Hall today. I begin by drawing attention to my declaration in the Register of Members' Interests. I am also an unpaid director of the Centre for Scottish Public Policy, which recently received sponsorship for a project from Co-operative Financial Services.
Hon. Members who know of my interest in these issues will be aware that I have spoken from time to time on debates on this subject, and have put my name in the ballot for the draw for Westminster Hall debates. Perhaps I should now start doing the lottery regularly, given that I have managed to come out of a ballot only two days after the publication of the White Paper on consumer credit and at the same time as the pre-Budget report. It certainly makes the debate timely, even if it faces competing attractions elsewhere.
The White Paper has been a long time coming, but that is understandable given the complexity of the proposed measures. I am glad that the time was taken to ensure that the package is comprehensive and will go a long way to tackling the problems that many of us have raised here. The White Paper is valuable not just in what it proposes, but for the information it provides about the impact of heavy levels of debt on individual consumers. Getting into debt does not just affect people's pockets; it can have severe personal consequences. The stress can affect people's health. High levels of debt can cause marriage and other family breakdowns.
The consequences of over-indebtedness are often worse for the lowest income groups who are more likely to have debts with serious repercussions such as eviction, imprisonment, disconnection or repossession. The consequences of getting into debt can be much worse for such people because they are less able to reorganise their lives in the way that people on higher incomes can.
Debt affects the affluent and the poor alike; but escaping the jaws of debt can be much harder for the poor, particularly if they fall prey to loan sharks. Some legal lenders focus on the poor and charge excessive rates of interest. In any debate on debt or credit it must be emphasised that debt is not bad by itself. Most of us now have a mortgage and as a result live in accommodation that we could not have enjoyed unless we had been saving for 20 years or more. Borrowing and lending is at the heart of economic activity. The problem is not debt but over-indebtedness, with people being dragged into debt that they cannot sustain and which has serious consequences.
People get into debt for many reasons and there are many solutions to the problem, but too many people are encouraged, or enticed, into entirely unsuitable credit arrangements and that is a major cause of excessive levels of debt. Cracking down on the businesses and the business practices that bring that about is a major solution to the problem. That is why I welcome the White Paper, and why I wanted to raise the issue of consumer credit again in Westminster Hall.
In the time available, it would not be right for me to comment on every aspect of the White Paper. I shall highlight four areas in which I support the proposals in
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principle, and suggest ideas—and how they might be implemented-that can be developed in detail. I hope my hon. Friend the Minister will consider them; if he cannot respond today, I hope that he will do so on another occasion.
First, I strongly welcome the proposal to make lenders provide standard information, such as the so-called honesty boxes. It is vital that information should be provided in that way. I am glad that the Government and the industry have taken that initiative, and I congratulate the Nationwide building society, which is the first institution to take up the idea. Customers need to know the real rate of interest that they will pay on a loan or a credit agreement and the real cost to them of buying goods or services on credit. They need to be able to compare like with like, and they should not be bamboozled by clever language or glossy advertising designed to obscure the reality of the financial deal that they are being encouraged to sign.
The key is that the information provided must be simple and easy to understand. It is important to be transparent, but transparency loses much of its appeal if it is accompanied by excessive complexity. There is little point in producing so much information that few people bother to read it, and it cannot be effectively drawn to people's attention. I hope that the Government and the industry take that on board when the proposals are developed in the next few months.
There is an argument that if products are so complex that the essential details cannot be set out and explained simply, clearly and succinctly, they should not be on sale to the general public. I should like the Government at least to consider that point.
I am pleased that, in the White Paper, the Government are proposing to widen the current definition of extortionate credit terms. The law already allows loans of that type to be struck down but, in 25 years, few successful challenges to credit agreements have been made. It is disappointing that there are no proposals in the White Paper for extending the definition, but I welcome the fact that the Government have set out a clear timetable for introducing such proposals.
How the definition of extortionate credit is extended is crucial to the success of the strategy in the White Paper. If the redefinition is broad enough, it will encourage lenders to exercise their own self-discipline, which would go beyond any formal regulation by the regulators or by Government. Lenders will be much less likely to risk advertising and selling products that they know are, to be blunt, dodgy—even if they fulfil the strict terms of the rules—if the products are at risk of being struck down later. Extending that definition is crucial to the success of the Government's package.
Malcolm Bruce: I apologise for missing the start of the hon. Gentleman's speech. I have just struggled in after taking two hours to get from Heathrow. He makes an important point. Does he acknowledge the Government's difficulty in this matter? They want a definition that deals with cowboys who rip people off but does not destroy the cash, small-debt market. Interest rates are not the only measure, and the Government must get the balance right.
Mr. Lazarowicz: I accept the hon. Gentleman's argument. That balance must be struck, which is no

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doubt why the consultation on the details has still to take place. However, I was talking about the type of offer or arrangement that everyone knows is wrong or dodgy, but which does not lend itself to the type of solution that the law provides. We must make it clear that such an agreement will not stand up and can be challenged successfully.
What is described as a "stakeholders group" will be consulted on the proposal. I hope that because I have mentioned that group, my hon. Friend the Minister will give an assurance that when he sets it up, it will include representatives of consumer and advice organisations from Scotland, given that the financial sector in Scotland is so important and, of course, the separate Scottish legislation and legal system covering some of this sphere.
The Minister for Employment Relations, Competition and Consumers (Mr. Gerry Sutcliffe): I do not want to stop the discourse that my hon. Friend is unleashing on us, which is welcome, given the White Paper. On the point about the body and Scottish representation, I can give that undertaking now.
Mr. Lazarowicz: I welcome that assurance, which will be welcomed also by the sector in Scotland.
Something must be done about the way in which some lenders market their products. If we spend any time watching daytime television and reading adverts in newspapers, time and again we will see advertising that is designed to prey on the poor and vulnerable. I strongly welcome the Government's proposal in the consultation documents accompanying the White Paper to tighten the rules on consumer credit advertising, but again I have one or two doubts as to whether the proposed new regulations will go far enough. These suggest, among other things, that advertising must be in plain English. With some adverts, the problem is not that they are not in plain English; they are often very plain indeed. The problem is the way in which they are set out and the practice of giving the impression that the service offered—perhaps, say. by a debt management company—is a public service rather than a commercial offer.
I am worried that it is the nature of the shadier end of the business that people will always try to get round, whatever rules are designed to prevent that practice. I wonder whether powers should be given to an appropriate regulator—be it the Financial Services Authority, the Office of Fair Trading, the Department of Trade and Industry or even local councils—to step in and issue a stop notice to end such advertising, in the same way as stop orders can be made in respect of other trading practices.
Last but not least, there must be much wider provision of financial education and free debt and money advice. The White Paper recognises that, which is one of the very good points in it. Much good work has already been undertaken by the industry, as many hon. Members will know. An exhibition in the Attlee suite in Portcullis house shows the work being done on financial education by many financial institutions and advice agencies. I invite hon. Members to visit that exhibition later this afternoon.
Good work is being done, but we must ensure both that there is provision throughout the country and that what is provided nationally fits in well with local advice
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and education. We do not want so much advice to be provided that the public are not sure which is bona fide, which is supported by the independent agencies and by the Government and which is simply commercial marketing masquerading under the cloak of advice. Perhaps there should be a national brand to which independent advice service providers can sign up, so that the public know where to go when they want independent advice and education, as that is so important.
These comments are made in the context of my general welcome for the White Paper. Reforms are urgently needed. I am sorry that they will not be taken forward in the current year's programme. However, I understand why; the measures are complex and it is important to get them right. I welcome the fact that the proposed statutory instrument will be taken forward as soon as possible.
It is essential that the reforms that require primary legislation are included in next year's legislative programme. I understand that the proposals have received wide support across the sector and across parties. I hope that the welcome that they have received will make it easier for my hon. Friend the Minister and the Secretary of State to achieve the necessary time in the Queen's Speech and the Government's programme in the next legislative year.
Mr. Frank Cook: Order. I feel that it might be advisable for me to remind those hon. Members who have not been in Westminster Hall for some time that it is the practice to commence the first of the three wind-up speeches 30 minutes before termination, which means 3 o'clock. I am sure that hon. Members will bear that in mind when making their contributions and accepting and responding to interventions.
2.15 pm
Ross Cranston: I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on securing the debate. I hope that after the debate he will give me some advice on how to be as lucky as he has been in recent times.
I also congratulate my hon. Friend on the work that he has done in setting up the all-party group on debt and personal finance—a group that is much needed in this place. I also congratulate him on hosting this afternoon's exhibitions by a group of agencies that focus on financial education and information, a topic that he emphasised in his speech.
I welcome the White Paper; it is high time that such measures were taken. As early as 1978, I was publishing pieces criticising measures such as the rule of 78. Over the years, I have criticised the Consumer Credit Act 1974 and pointed out the need for it to be amended to accommodate it to the modern credit industry. I congratulate the Minister, and hope that the necessary legislation will be introduced in the next parliamentary Session. It is certainly needed, although a certain amount can be done by means of statutory instruments.
I shall highlight a few issues. The first issue—the need to ensure that credit providers lend responsibly—was raised a number of years ago when Lord Borrie was the director general of fair trading. There is much concern

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at present about over-indebtedness, and it is certainly the case that some parts of the community, generally the lower-income groups, are taking on a burden which may become too great, if, for example, there were illness or family tragedy, and which might, in some cases, lead to personal bankruptcy. The White Paper is useful in bringing together information that demonstrates that such problems are faced particularly by low-income groups.
The British Bankers Association, in the briefing that it produced for the debate, makes the point that over-indebtedness is not generally a problem, and I accept that point. We have a healthy economy, with low inflation and high employment, and over-indebtedness is not faced by the majority of people. However, there are vulnerable people in the community who are potentially over-indebted and so, as my hon. Friend the Member for Edinburgh, North and Leith said in his opening remarks, it is important that financiers and credit providers lend responsibly. I therefore welcome the notion that guidance will be provided. It seems to me that that must be taken into account in the licensing process by the Office of Fair Trading so that if lenders, even reputable lenders, are advertising credit irresponsibly they must be brought to book.
Mr. David Drew: I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on all his work on this subject. I received the memo from the British Bankers Association but I must say that its view that it only engages in responsible lending is completely contradicted by my local citizens advice bureau. It makes it clear that even the most reputable banks often approach people who are clearly in debt on the basis that the bank will be able to secure the money that it is owed regardless of other debts that are being paid. That is a serious problem, and I hope that my hon. Friend will comment on it.
Ross Cranston: I did not completely accept the BBA briefing. As my hon. Friend rightly says, all lenders must ensure that they lend responsibly. The brief produced by Citizens Advice and the work that it has done over several years, particularly the detailed report on over-indebtedness that it produced two years ago, pointed out that even high-street names sometimes promote credit irresponsibly. We must consider the problem across the board.
The licensing system is a powerful tool. It is proposed that we move away from five-year licensing, and I had initial doubts about that. However, I have been persuaded by the White Paper that it is better to award a non-renewable licence as long as there is constant monitoring of all credit providers, as my hon. Friend the Member for Edinburgh, North and Leith rightly said, and action is taken if they step out of line. It is also pointed out in the White Paper that some exemptions, which are no longer defensible given the development of the consumer credit market, will be removed. Powers of investigation comparable to those of the Financial Services Authority are necessary and are proposed in the White Paper, and I welcome that.
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I shall now move on to the topic of extortionate credit bargains, which my hon. Friend the Member for Edinburgh, North and Leith mentioned. The White Paper addresses the issue of whether there should be an interest ceiling. I am sympathetic to the idea of an interest ceiling. Having seen some cases that Citizens Advice has brought forward, with interest rates of more than 1,000 per cent., I understand the argument for a ceiling. However, any ceiling will be arbitrary. I can accept the proposals in the White Paper as long as the extortionate credit bargain provisions are properly enforced.
Historically, the measures in the Consumer Credit Act 1974 have not worked, and that has been a failure on the part of the courts. In outrageous cases, in which interest rates and credit practices were completely unacceptable, the courts found that the tests for unconscionability set out in sections 139 and 140 of the Act were not satisfied. If there were variable interest rates, the courts found that the tests were not satisfied. In a commercial context there must be variable interest rates, but the consumer context is different. None the less, the courts found those to be acceptable under the provisions.
I welcome the proposals in the White Paper to update the 1974 Act and to introduce a broader test of unfairness, and we look forward to seeing the detail. In particular, I welcome the proposals, already included in the Enterprise Act 2002, to enable consumer groups to take collective action on behalf of individual consumers to pursue unacceptable credit practices.
I understand that there is a disagreement between the Department and the National Consumer Council about redress mechanisms. It is important to provide a redress mechanism for individual consumers who get into problems. In other comparable jurisdictions, there is provision for credit tribunals. The courts here have failed, so we must provide another mechanism. What will that be? The National Consumer Council is keen that the financial services ombudsman should provide that service. The White Paper addressed the issue, although it does not come down on one side or the other.
Mr. Sutcliffe: On that matter, we are still consulting. My hon. Friend will know that there is a review of the financial services ombudsman and that discussions with the consumer groups are continuing. We want to be clear about what the redress mechanism will be. We are speaking to the National Consumer Council.
Ross Cranston: I thank my hon. Friend for that. I welcome the Government's commitment to a new redress mechanism, and I hope that a clear conclusion on what that will be can be reached as soon as possible. The financial services ombudsman provides a suitable mechanism that is cheap and quick for consumers in that area. I should like my hon. Friend to consider whether that model, or something based on the ombudsman service, is to be introduced.
I should like to talk about some of the specific provisions. Penalties for early payment are subject to the rule of 78 that I mentioned earlier. The White Paper usefully points out the benefit of abolishing that rule, especially for lone parents and low-income families. I was disappointed that the director-general of the

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Finance and Leasing Association was very critical about that proposed abolition. He has a technical point about the securitisation of consumer credit receivables, and I understand why the problem of retrospectivity concerns him. He says:
"These changes could lead to a trouble-makers' charter where all agreements could potentially be challenged."
He goes on to criticise the removal of existing penalties retrospectively. I welcome the comments of both the British Bankers Association and of the director-general of the Consumer Credit Trade Association, who said:
"I don't think anything in this paper is a surprise."
The issue of early penalties has been raised over many years, so the proposals in the White Paper cannot be a surprise to the industry. As in the book of Daniel, the writing has been on the wall for the rule of 78 for some time; the industry has been found wanting in this area and judgment day has arrived.
Finally, I shall say a few words about new mechanisms. The White Paper mentions in passing the promotion of credit unions. The Economic Secretary to the Treasury, my hon. Friend the Member for Wentworth (John Healey) recently visited the Castle and Crystal credit union in my constituency, which was celebrating its tenth anniversary. That union is developing collection points all around the borough. One in the Castle and Priory ward, which is a deprived ward in my constituency, involves the possibility of using a post office as a collection point.
The big surprise about credit unions is why they have not taken off in this country as they have in other comparable jurisdictions. The Treasury has been doing useful work in trying to promote them. In my constituency, a theatre company called Urban Voice recently visited the Castle and Priory ward to perform an hour-long play called "Living on the Never Never", which highlighted some of the difficulties that people can get into with certain ways of borrowing money. That work is necessary, and we have to promote the idea of credit unions. We need people in deprived communities to be switched on to the notion of putting savings into credit unions and borrowing from responsible bodies such as them.
I want quickly to mention two other institutional changes. The OFT must be an effective enforcement body, but in recent years, competition policy has dominated its agenda. It has responsibilities for consumer protection as well, and it is vital that the resources and commitment of the OFT are addressed to that area. The other institutional change is with legislation. We need amendments to the Consumer Credit Act 1974 on the statute book as soon as possible.
2.31 pm
Mr. Wayne David: I began to take an interest in indebtedness and consumer credit soon after I was elected because I visited my citizens advice bureau in Bargoed for a meeting with its manager. I asked him point blank what issue was brought to the citizens advice bureau more than any other, and without hesitation, he said that the real problem facing people in that community was massive indebtedness. He explained how hundreds of people came in with the most pitiful tales of how they had got into dire situations.
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Soon after that, I began to hold constituency surgeries and have similar cases brought to me by my constituents. I should like to cite two examples that reflect a much wider problem. The first example is of a young woman, who came to my surgery and explained that she was an unmarried mother whose son was on drugs. He had been having difficulties with his local suppliers in paying for his habit. and with the law. She had been in touch with the police, who had been helpful, and then came to me because she was having enormous difficulties with a local loan shark, whom she had met in her local club. She explained how one night, when she was with her friends and feeling upset, someone suggested that she should have a word with this nice, helpful young man, who could provide some ready cash.
Rather naïvely perhaps, the young woman accepted £200 from the man with a vague verbal agreement about her paying it back when she was able. A couple of weeks later, he turned up at her house and started making threats to her, demanding not just the original £200, but a further £200 as interest. There had been no agreement other than a verbal comment and a nod and a wink in a club. Then, when she was unable to pay back that money, the threats, intimidation, bullying and physical violence began. In desperation, she came to me, and we managed to sort something out with the assistance of the police and citizens advice bureau. I suspect that that is just one case among many and will be replicated time and again not just in Bargoed but in many other communities throughout the country.
A second woman who came to my surgery explained that she had taken out a loan of £20,000—a significant sum. She did not have a prosperous background, but she signed a credit agreement to pay an interest rate of only 1.97 per cent. a month. That did not sound much to her, or to me. She did not realise that that is an annualised percentage rate of some 22 per cent. Before she knew it, she was paying back well over £70,000 for a £20,000 loan. She could not meet the repayments and found herself in court, with a bill around her neck of well over £100,000, which was completely beyond her means. She had had no idea that she could possibly get into such a situation. The transaction was perfectly legal as the company that loaned her the £20,000 was properly registered.
I feel strongly about the issue, and very much welcome the Government's initiative. In 2002, the Welsh Consumer Council conducted an in-depth survey of levels of indebtedness in greater Gwent. It concluded that indebtedness was greatest in some of the poorest communities in Wales, mainly in the heads of the valleys. Uncomfortably for me, it confirmed that some of the worst cases of indebtedness and borrowing from unregistered moneylenders were in a Caerphilly borough, part of which I represent. The report concluded that some 7 per cent. of the respondents in the Caerphilly borough who had used credit in the two years before the survey was conducted borrowed from a moneylender, compared with only 4 per cent. overall. The figure of 4 per cent. is bad enough, but 7 per cent. is extremely worrying.
As a result of that survey and my experience, I ran a campaign with my local newspaper, the Rhymney Valley Express. The campaign had three objectives. The first was to alert people to the activities of loan sharks and unscrupulous registered moneylenders. We were simply

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encouraging people to be less trusting and to ask lenders more questions before they got themselves into difficult situations. The concept of public education is very important.
The second objective was to let people know that there are alternatives to moneylenders and loan sharks. We stressed the fact that there are, for example, two credit unions in the Rhymney Valley, which are expanding and proving to be very effective. I am glad that the White Paper refers to credit unions, because they are the alternative to loan sharks for many ordinary people in working-class communities. I encourage the Government to do as the National Assembly for Wales has done and give every possible support to the development of credit unions in this country. The National Assembly has given excellent support to credit unions in Wales through objective 1. That was a tremendous fillip for the movement in Wales, and we are making progress because of it.
The third part of our campaign was arguing the case for legislative changes, especially to the Consumer Credit Act 1974. We made several suggestions to the Government in a seven-point plan, some of which reflected ideas that were mooted nationally and centrally by citizens advice bureaux, and others that arose from our practical experience. The first of our seven points was that the Consumer Credit Act should be changed to outlaw extortionate interest rates. The second was that serious consideration should be given to an interest rate ceiling, which would mean that interest could not be charged above a certain rate. The third was that all credit agreements should be required to show the total amount to be repaid by the borrower over the term of the agreement. Fourthly, we suggested that credit agreements should show the average interest rate for a particular type of loan, alongside the interest rate figure actually charged in the specific agreement.
The fifth point was that all lenders should be obliged to recommend that the potential borrower take independent advice before agreeing to end a loan agreement. The penultimate point was that there should be provisions to make the early settlement of loans fairer and easier. Finally, we said that when the Consumer Credit Act is modified it should be simplified and made more straightforward and understandable.
I recognise that not all those seven points were accepted in the White Paper. On my evaluation, it seems that four of the seven were. That is a significant step forward. As my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) mentioned, there is the crucial reference to replacing the term "extortionate test" with a wider "unfairness test". That is important. However, I would be grateful if the Minister could clarify what it means. I understand that the European example has been taken on board and that we are taking European legislation into account. Given the importance of the terminology, I would appreciate some clarification.
The White Paper is a milestone. There has already been a great deal of consultation and a long gestation period. Many people throughout the country will welcome it. It is a huge step for the Government to take, and I would like to see it firmed up as legislation as quickly as possible.
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No matter what legislation we have, what alternatives to loan sharks there might be or whether loan sharks are outlawed, at the end of the day we need a greater understanding of what indebtedness means. I would like to see greater discussion of credit and indebtedness in schools.
2.42 pm
Malcolm Bruce: I will ensure that the other two winding-up speakers have at least an equal share of the time. I congratulate the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) on the work that he has done on this initiative, which is extremely timely given the publication of the White Paper and the development of public concern about the statistics, which have been a matter of debate in recent months.
I hope that we all recognise that credit is a vital component of a healthy economy. There has been a huge development in credit and the varieties of credit, giving many people more choices and opportunities. Clearly, that has also led to a situation in which some people have been forced, seduced or have in some other way got themselves into a position where they are out of their depth, to use the jargon. It is worth reflecting on one or two statistics that bear that out. Over the last year, 33,945 people have been served with bankruptcy orders; almost the end of the line in terms of failure. That figure is 13 per cent. higher than that for the previous 12-month period. The increase in the latest quarterly statistics is 17 per cent. compared with the equivalent period the year before.
Personal debt has risen by 50 per cent. The average person now owes more than £5,300 in unsecured loans; the average annual household debt stands at more than £37,000. The focus of attention has been on two things—apart from some ill-chosen responses to Select Committees by certain people that should know better—that concentrate the mind. First, there are products that are appropriate and not appropriate for different sorts of debt. Secondly, people do not always realise what they are paying and what it is costing them.
In a way, Mr. Barrett did us a favour—even if he did not do himself a favour—when he admitted before the Select Committee on the Treasury that he would not borrow from his credit card company because it is too expensive. That revelation was compounded when the Office of Fair Trading revealed only two or three weeks later that it had forced Barclays to withdraw its credit card advertisement of 0 per cent. interest for life. It occurred to me that there might have been a change of policy, because if 0 per cent. for life meant what it said, even Mr. Barrett would surely borrow on his bank's credit card. The fact that he chose not to do so was a further reinforcement that the bank did not mean what it said, but something quite different. It is such practice that the White Paper is trying to address—successfully, I hope—by setting up measures and responsibilities that will enable people to be protected and better informed.
It is important that the first recommendation of the White Paper is the duty to lend responsibly. The Minister will be aware that, on the matter of fair trading policy, the Liberal Democrats have suggested that we ought to discuss the duty to trade responsibly. Although

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we did not succeed in getting that point into the Enterprise Act 2002, the concept is being considered by the European Commission and may yet form the foundation of a general trading standard. It would not preclude the need for other specific regulations, but it would give a peg to demonstrate where someone had clearly traded unfairly and, in the context of credit, lent irresponsibly.
As the hon. Member for Edinburgh, North and Leith has said, there are some stark examples in the White Paper of people being drawn into taking out loan after loan, thus compounding their debt until the interest ends up being about five or six times the total capital payment. That is extortionate, even given that long-term loans have a high multiplier. The steps that the White Paper proposes will be effective if we can really work with the grain of the operators in the market, and identify the rogues—the problems and practices that we are trying to eliminate—without destroying the variety of products that people want and can choose responsibly.
I shall mention briefly the role of credit cards, as opposed to bank loans and mortgages. I am astonished by the number of people, even among those who one would think were reasonably confident about financial services, who have significant amounts of credit that they repay monthly on a credit card, but who clearly have access to cheaper forms of credit. One argument is that it serves them right; if they cannot be bothered to use the facilities available to them, perhaps they should pay the extortionate rate. However, helping people by making the comparators and the real costs clear helps the market to operate. That is a proper role for the Government; to give people information to enable them to work in the marketplace with confidence and surety. If something sounds too good to be true, it probably is, but if the regulation that we are putting in place is effective, it might mean what it says. That will be the real test; whether a bargain really is a bargain, rather than a come-on. If we can get that right, it will be extremely beneficial.
I hope that the Minister will not take that amiss because, in other contexts, my colleagues and I have expressed some concern about the cost and size of both regulation and his Department, which has more than 10,000 staff and a budget in excess of £5 billion. I do not say that those services are not required. The right hon. Member for North-East Hampshire (Mr. Arbuthnot) and I have discussed this matter. Have the Government assessed whether they would require extra staff, or a redeployment of staff, and what cost might be involved? I do not say that there is no role for the Department, but it is important that we should know what we are letting ourselves in for.
I should like to address the small loan and cash-based borrowing at what is patronisingly called the lower end of the market, that which involves small amounts of borrowing. I am a strong supporter of credit unions. Although I am not directly involved with one in my constituency, I attend meetings of the very active Strathbogie credit union, which operates over an extensive rural area and to which I am happy to give support. They serve a useful purpose, enabling many people to save, borrow and manage the fluctuations in their incomes. They feel that some FSA regulations are restrictive in their scale of operation, but it is necessary
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to maintain a balance. I would give wholehearted support to any measure that the Government might take to strengthen, deepen and broaden access to credit unions across a wider community.
One of the cash debt collection companies regarded by the Consumer Credit Association as extremely reputable has told me that it is concerned that the measures might adversely affect it. It explains that there are those for whom even a credit union requires too much of a commitment; in particular, one has to save with a credit union before one can start to draw money out. People can find themselves in a situation in which they need money immediately. They are vulnerable and can fall into the hands of people who will exploit them as illustrated in the White Paper; they are locked into a cycle of debt at a disproportionate interest rate, and they are taken for the little that they have.
We have to deal with that, but we must also take account of those who work in the cash-based credit market who maintain that they are giving a genuine service to such people. They do so at a high cost with good reason; they regularly send people to collect debt because—to use movie-type jargon—they have overheads. However, those overheads are real; they have to employ the people to make the collections.
I do not suggest that those firms should not be subject to regulation or investigation, but they have expressed to me their concern that if they were over-gulated—if simple interest rates were attached to some of their agreements, for example—it might make them sound extortionate and make them fall foul of the regulations. If that were the case, they would withdraw from the market. That would leave their clients with nowhere to turn but to criminal money lenders who, it has been suggested, profiteer on contraband cigarettes and alcohol. They have cash that they can use to make more cash by lending it to people who have none and putting the heavy twist on them, both physically and by getting an extortionate amount of money.
Mr. Sutcliffe: I agree with what the hon. Gentleman is saying about small loans and protecting people in the marketplace. I am aware of representations that have come from the licensing agency about which he is talking, and I will take them into consideration.
Malcolm Bruce: I am grateful for that assurance, because I am certain—even without having heard the Conservative contribution—that all of us would like there to be a climate in which lending is open, transparent, understood and fair, and that credit is not operated in a way that is abusive, extortionate and on the margins of reputability. At the same time, we do not want to destroy a vital, viable and diverse market. The figures for the extension of credit are a matter for concern, and could become a serious issue, not just for people at the lower end of the income scale. I am still interested to know what developments the Government expect in the information and education that influence people's understanding and use of credit.
I am amazed, as I have already said, that people whom one would expect to have a reasonably good handle on how to obtain and use credit still manage their finances wrongly. Many use the wrong products and even have wrong balances, either because they do not

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regularly review their finances or because they do not have enough understanding. As the hon. Member for Caerphilly (Mr. David) said, 1.5 per cent. per month works out at more than 20 per cent. a year. Although most people understand the difference, they do not always make the calculation.
Of course, the credit card companies are constantly pushing us. I do not know how many letters I receive a week, but they all go unopened into the bucket. However, I guess it is different for people going through a bad patch when a letter arrives saying that £10,000 is available or that they can transfer their balances. On the other hand, some sharp people can do very well out of transferring balances every six months. One need never pay interest if one shops around, but how many people have the time to do that? The credit companies are hoping for inertia. They want to seduce people into using that money or transferring their balances and accumulated debt onto one card; they want people to build up debts and to pay a heavy rate of interest. We cannot ban or outlaw that, but we can help people to understand the information that they receive. It should be transparent; comparisons should be made on the same basis, and people should understand their rights.
That brings me to the escape and penalty clauses. I raise two slightly contradictory points. People who are paying a reasonably competitive rate of interest— good from the lender's point of view—and who pay regularly may find that their circumstances have changed for the better. They may wish to reduce their indebtedness; it seems wrong that they should face a penal redemption rate, particularly if they are paying a flexible rate of interest. It would be commendable if the Government were to address that issue.
My overhanging concern relates to fixed mortgage rates. That is being discussed in the newspapers, but people are reluctant to go for fixed interest mortgages, particularly if they have experience of lower interest rates. One of the deals that mortgage providers offer is a fixed-interest mortgage for a significant time, but we want that to be longer than two or three years. It should be five years or even 10 years, but borrowers will have to make a risk assessment of what the interest rates will be over those 10 years. However, one consequence of the fixed rate is that people often want to exploit the situation. They will say, "Well, things have improved. I have decided that the flexible rate is cheaper, and I want to opt out." There has to be some balance to the deal; those who take the risk of a fixed rate should share the benefits, but it must be done fairly and equitably
In that context, the White Paper and today's debate are timely. I hope that interest rates do not go up much, but we may be seeing the beginning of an upwards turn. It is clear that if interest rates go up by 1 or 2 per cent., the figures that I gave on the rates of bankruptcy and indebtedness will rise sharply. That could cause problems for the British economy; such a move could result in a significant downturn or slowdown. We need to ensure that when people take out loans, particularly mortgages, they build in a margin for an increase in the interest rate. They must not borrow right to the limit, so that an increase of even 1 or 2 per cent. tips them into a position where they simply cannot manage their borrowing. Of course people should be responsible, but
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the mortgage providers and the regulators should ensure that the information that they make available to the public helps them to be responsible.
2.58 pm
Mr. James Arbuthnot: I echo the congratulations given to the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz). The debate is suspiciously timely; it is almost as if he knew the White Paper was coming. I congratulate him on his prescience and on being so highly informed; the opening of the debate was worthwhile and useful. He gave an interesting analysis of the problem.
I also echo the hon. and learned Member for Dudley, North (Ross Cranston), who congratulated the hon. Member for Edinburgh, North and Leith on his work in the all-party group on debt and personal finance and on the e-mail that he sent us all today about the day of financial education. I am looking forward to visiting the citizens advice bureau, the Financial Services Authority, the British Bankers Association, the personal finance education group and especially "then add the rest", as it says at the end of the e-mail.
Today's debate is worthwhile and timely and we have heard some interesting speeches. The hon. and learned Member for Dudley, North dissected many of the White Paper's details in his usual highly experienced manner. The hon. Member for Caerphilly (Mr. David) gave two moving constituency examples of why the issue is so important. I particularly appreciated the comments that the hon. Member for Gordon (Malcolm Bruce) made about credit unions and the need to strengthen and deepen them. He also expressed fears about people being scared into the arms of criminal money lenders, which we must be careful to avoid in any action taken on this important issue.
There has been a huge shift, in this country and in the world, in the way we run our finances. We used to save money in order eventually to spend it on something that we had decided in advance that we needed. Now, much the more usual course of events is to spend money and then try to work out how to pay it back. If one thinks about it, there is no particular reason why the course we take now should be more fashionable than saving. There is a lot to be said for saving. At some stage we might be able to return to the savings culture that we used to have. However, with tuition fees, the likelihood of graduate debt being about £33,000 by 2010 and the prospect of the savings ratio halving, it might take a long time to do so. I should very much like to see a savings-based society rather than a debt-based society. We can achieve that only gradually, but we should move towards it.
We are now a debt-based society, as the hon. Member for Gordon said. He set out how much debt we have and said that for most of us debt is not a problem. On the contrary, it is a huge convenience and in many ways powers the economy. For all too many individuals, however, the consequences of getting into debt can be devastating, as the hon. Member for Edinburgh, North and Leith said. A quarter of the people who go to citizens advice bureaux with debt problems have visited their doctors because of stress and anxiety. Many people do not even know to go to the citizens advice bureau, while many others find themselves in debt through failures in the benefit or child support systems or for reasons that are none of their doing.

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For such people credit cards are often the way through the problem in the short term, but the expense of credit cards can create much larger problems in the longer term. The hon. Member for Caerphilly said that such people are the most vulnerable in other ways—he was referring to people who live in the heads of the valleys—and he is absolutely right. Those people are likely to suffer most as a result of debt.
I should like to pay particular tribute to the people in citizens advice bureaux, who are the front line of dealing with debt. In my constituency we have two excellent citizens advice bureaux, in Fleet and Bordon, but they are the same all over the country. MPs and the population of the country rely heavily on people in citizens advice bureaux. Those highly trained volunteers are very successful in dealing with problems caused by debt, out of which they are utterly dedicated to helping people. I admire and sympathise with citizens advice bureaux all over the country; many other voluntary organisations do the same thing. I do not know how we would cope without them.
The White Paper, rightly, has been the main subject of today's discussion and a great deal in it is welcome. At first sight, I particularly liked the section on transparency. We would like to see the proposals on easily comparable rates and terms translated into action. The abolition of rule 78 and the penalties for early repayment is welcome. Transparency is essential to understanding debt.
I wonder about some of the details in the White Paper. Will the increase in the size of print mean that people receive masses of large-print bits of paper, which they will not want to wade through, instead of a small illegible piece of paper? A way of not telling somebody something is to tell them so many other things that they get drowned in the mass of paper.
I should like the Minister to address the question of the programme. Page 97 of the White Paper states that the primary legislation is subject to the parliamentary timetable as soon as parliamentary time is available. It is a shame that the White Paper came out a mere two weeks after the Gracious Speech. I wonder whether that means that the legislation will not get into this year's programme.
I do not necessarily want all the points to be dealt with by legislation as opposed to voluntary codes of practice. The Opposition would like to see as much as possible of this creditable move towards transparency being achieved through voluntary codes rather than burdensome regulation. We will, of course, examine the fine print of the primary and secondary legislation. The Government have a history of producing 15 new regulations a day. Although many aspects of the White Paper have been welcomed by the businesses that must respond to it, we want to look at the detail of the regulation and legislation.
Several Members have raised the issue of financial education. The hon. Member for Gordon referred to Mr. Barrett's remarks to the Select Committee. Mr. Barrett's decision not to accumulate debt on his credit card is fine by me, and the Secretary of State's decision not to have a credit card at all is also fine by me. We need the dissemination of knowledge and informed judgments to the whole community. The Consumers Association would like to see a radical overhaul of financial education, which must be right.
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Sir Howard Davies said that we needed to improve financial literacy. We also need a national strategy for improving people's knowledge of their finances and the way in which they work. We must remind people that they should not believe everything they read in an advertisement; if something sounds too good to be true, it probably is.
3.9 pm
The Minister for Employment Relations, Competition and Consumers (Mr. Gerry Sutcliffe): I am delighted to respond to an excellent debate and to contributions from all hon. Members. We may disagree on political issues, but there has been a general welcome for the White Paper.
I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on securing the debate. It is not suspicious; he is clearly a lucky man. I hope that he has the same success in the national lottery. I also congratulate him on his activities on wider consumer affairs issues, because not only has he facilitated the work of the all-party group and work on financial education, he has worked tirelessly on behalf of consumers. When I became the Minister for consumer affairs in June, one of the first letters I received came from my hon. Friend on hallmarking. He was to the forefront of the debate about hallmarking, and I congratulate him on his efforts. He now knows that the Government have been successful in protecting British hallmarking.
One of the reasons I came into politics was to protect, help and support people in our communities and to ensure that they are not exploited. The White Paper has been a long time coming and there has been some criticism about that, but we were right to take the time and to consult widely with a variety of organisations. As was said during the debate, the British consumer credit market is the most mature in the world and has developed greatly over the years. A figure that interested me was that before 1974 there was one credit card—Barclaycard—and annual debt was around £32 million at today's prices. There are now 1,300 credit cards and billions of pounds of debt.
It is important to consider the White Paper in the context of a changed market. I want to put on record my grateful thanks and that of my Department for the work done by many groups in contributing to the White Paper, including consumer groups, citizens advice bureaux, the National Consumer Council and many other organisations that gave the consumers' point of view. I thank also the industry for the way in which it participated and supported the White Paper.
The White Paper is vital to our manifesto commitment to deal with loan sharks. Hon. Members have told us about illegal lending and pressure on individuals.
Ross Cranston: I wish to ask about the hit squads that are foreshadowed in the White Paper. Will they operate against illegal lending? Will they operate in my area of the country, the west midlands?
Mr. Sutcliffe: The good news for my hon. Friend is that the answers are yes and yes. The pilot programme of loan shark hunters will take place in Glasgow and the

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west midlands. It will involve cross-agency working and bring together the police, trading standards officers and local authorities. Part of the problem, to which my hon. Friend the Member for Caerphilly (Mr. David) alluded, is that people do not come forward because they feel threatened. There is a criminal element; some inappropriate lenders use illegal lending to launder money and for various other criminal activities.
The loan shark hunters will be in place—the pilot scheme has received £2 million of investment—and we will ask local authorities and others to consider possible ways of rolling out such schemes across the country to ensure that other people are given that opportunity. The issue is important to the Government and to many MPs. We know of many cases in our constituencies in which people—usually the vulnerable and those on low incomes—are threatened by unscrupulous lenders.
As I said, the White Paper reflects the maturity of the industry and how things have progressed. I was grateful for the contributions made by the hon. Member for Gordon (Malcolm Bruce) and the right hon. Member for North-East Hampshire (Mr. Arbuthnot), to which I shall return in a moment. The British Bankers Association memorandum to us is an example of how things have changed. I cannot resist the opportunity to mention its third point:
"Lessons have been learnt from the last recession. In the late 80s, the UK had enjoyed an economic fool's paradise with: artificially low interest rates followed by a Budget which threw cash at the middle classes in tax breaks, and threw fuel on the blazing housing market by setting a future date for removing dual tax relief —a consumer gold rush to joint ownership concluded the folly in late 1988."
Lessons have been learnt, but I do not know whether the right hon. Member for North-East Hampshire has learned them, as I did not hear him make the point that we are in the situation that we are in partly because of the previous Government's policies.
I was proud to be in the Chamber today for the pre-Budget report and to hear the Chancellor set out the macroeconomic conditions faced by the UK. More people are in work than ever before, which helps credit-related issues. I agree with the right hon. Member for North-East Hampshire that there has been a culture change in how people deal with credit, and I accept and understand that a savings culture is vital. But Britain's progress means that legislation must reflect the current situation. The Consumer Credit Act 1974 is 30 years old, and it is time to ensure that we have a credible Act and a credible regime that meet the requirements.
Individual agreements must be clear, and people must be able to understand what they are letting themselves in for. On the other side of the equation, we must have an effective enforcement regime. New powers have been given to the Office of Fair Trading, which now has the opportunity to investigate to see whether people are lending appropriately and responsibly, and the credit licensing regime is being overhauled. We are telling people that we want a fair marketplace that is still competitive, and the White Paper deals with that.
Every national newspaper carries advertisements for loans, and it is hard to determine how much one must pay back. The idea behind the honesty, or summary, box is to make that clear and simple. There are two ways
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of calculating the APR, which confuses people. The White Paper also considers the possibility of obtaining an agreement to ensure that there is only one way of calculating the APR.
Summary boxes make it clear how much people are borrowing, the length of time over which they must pay and how much they will have to pay back at the end of the period. They will also tell people how much longer it will take them to pay back the loan if they pay only the minimum each month, and how much more they will pay over the lifetime of the loan. We are also consulting on the size of print. We want to ensure that we do not overburden the industry but, for the sake of transparency, it must be clear at the start what people have to pay back and how much they are borrowing.
The form and the content of the credit agreement must be easy to understand. Some forms are very complicated, and people do not understand them. When people are hard pressed, they sometimes enter into loans and agreements that they do not fully understand. All they want to do is to obtain the loan and get the money. We have worked with the industry and with consumer groups to produce credit agreements and forms that are easy to understand.
My hon. and learned Friend the Member for Dudley, North made a good point about the early settlement of loans. I had never heard of rule 78 until I went into the detail. How can it be right to penalise people who want to pay off a loan early? That cannot possibly be appropriate, and I am quite sad that although the White Paper has generally had a good welcome, certain elements in the industry are against the proposals on early settlement of loans. We will return to that because it is important to get it right. Some 70 per cent. of people want to, and do, pay off their loans early and they should not be penalised and charged for that. We accept that there is an administration element and that it is important to have an accommodation for any administration costs, but that rule clearly needs to be changed.
Malcolm Bruce: I agree with the Minister, particularly on short-term, medium-term and variable-interest loans. However. does he accept that there is a potential problem in trying to get people on to fixed-interest loans if they can get an easy early repayment as soon as the market has moved favourably? Clearly, people will not offer fixed-interest loans if they are not equally balanced.
Mr. SutcliffeYes. The Chancellor referred to that this morning, and there will be a survey and report by a group set up to examine what can be done.
We are in an era of new technology, and people want to borrow over the internet. It is important to have online agreements that are sustainable, understandable and protect people's interests.
The credit licensing regime is vital. It is important that people who lend act responsibly and are appropriate people to lend. The details of the regime will ensure that that is what takes place. Lenders will have to make sure that they are appropriate people to lend and that the risk element is well considered. I am particularly pleased about the powers that we are going to give the Office of Fair Trading, trading standards offices and others to hold spot-checks to examine the appropriateness of what lenders do.

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The loan shark hunter regime that we are introducing will enable us to tackle problems such as that raised by the hon. Member for Gordon, who said that we must not stop legitimate lenders lending at low rates, with what appear to be high APR charges. If we removed that situation, their borrowers would be forced into the hands of illegal loan sharks. That was an issue when we considered whether to have a ceiling on interest rates. The hon. Gentleman was right; if the need to collect administration or other charges built into the cost of the loan forced people out of that market, the next people that come along will be the loan sharks and illegal lenders. Although vulnerable people do not often come forward, we will enable people to be prosecuted on evidence that will be collected in various ways. That will push those people out of the marketplace. It is important that they understand that the regime is in place, so that they perhaps cease to prey on the vulnerable in our constituencies.
We are considering the abolition of financial limits, on the basis that people need protecting no matter how much they have borrowed. The issue of consumer redress is important, and the alternative dispute resolution process is something that we will look at when trying to find the best way of dealing with the matter. My hon. and learned Friend the Member for Dudley, North suggested using the financial services ombudsman. We will look at that in light of the review, and if that is the best route we will consider it. We are consulting on that at the moment.
As I have said, we are working with trading standards offices on the pilots in the west midlands and Glasgow to target illegal lenders. They are the worst loan sharks, as my hon. Friend the Member for Caerphilly said, seeking out vulnerable people. The pilot will help us to identify the extent of illegal lending and how best to deal with it in a practical way so that we offer best practice to the other authorities.
I am a strong supporter of credit unions. I have seen in my constituency how they can deal appropriately with people who are outside the normal regimes. However, there is an issue relating to the 12-week saving requirement; people have to save for 12 weeks before they can get a loan from the credit union. Some interesting alternatives have been suggested in Glasgow and elsewhere, and there may be a way of offsetting that by direct grants or whatever. We have to be careful because the aim is to encourage people to save and to play their part in a responsible way. People who are in a crisis need money quickly and must not be forced into illegal lending.
The credit union movement needs to be supported. I have worked with the Financial Secretary to ensure that we do that. Every local authority should have a credit
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union officer. I have a slight concern about there being two national associations and about the infighting between them, which has not helped the situation. That can be resolved. Whether a credit union is community or employee-based, it can contribute tremendously and can offer alternative sources of funding.
My hon. Friend the Member for Edinburgh, North and Leith mentioned the OFT. I pay tribute to trading standards officers. They are the Cinderella service of local authorities. They do not seem to receive adequate funding when the budget is dished out, yet we ask them to do many things; their impact on our communities is tremendous. I hope that the new powers for the OFT and the support that we give to trading standards officers and local authorities will mean that their work is helpful.
My hon. Friend the Member for Caerphilly raised many points. He was particularly moving when describing the cases of intimidation. I welcome his campaign and that of his local newspaper to try to put things right. He had seven recommendations and we have delivered four of them. I hope he feels that that is a step in the right direction. He also made the point about credit unions and how we need to develop them, and asked about the definition of extortionate credit.
The OFT will take account of responsible borrowing, and will help the adjudicator to decide whether a credit transaction is unfair. Unfair practices could include the mis-selling of products, unacceptable high-pressure selling, aggressive debt collection and irresponsible lending. Consumers will be protected in cases of excessive charges for defaulting. That will include measures such as requiring default interest to be fair and reasonable and prohibiting compound interest on cost and charges. Traders will be required to give debtors a set time to pay costs or charges before interest is charged. We are considering whether the proposal should apply also to existing agreements.
We have talked about the maturity of the credit market. The hon. Member for Gordon welcomed the White Paper and explained how he saw the need for a balance between regulation and ensuring that we deliver. Unfortunately, his press release did not quite show the same spirit of consensus on how we approach these issues. However, as these matters go through the House, I am sure that his characteristic fairness will come through and he will admit that the Government occasionally get it right. He reminded me that the Liberal Democrats wanted to do away with the Department of Trade and Industry. Clearly, we have proved that if it did not exist, we would have to invent it.
Time has run out. I welcome hon. Members' contributions. This is a good White Paper and I am sure that people will benefit from it.

Prevenar
3.30 pm
Keith Vaz: I am most grateful to you, Mr. Deputy Speaker, for the opportunity to raise in this Chamber the case of Lachlan Fewster and the availability of the vaccine Prevenar. I am also very pleased that Scott and Maria Fewster are at Westminster today. Scott and Maria Fewster lost their only son, Lachlan, to pneumococcal meningitis in April this year. They state that his death could have been prevented if he had been inoculated with the vaccine Prevenar. Before the attack in April, like all fun-loving youngsters, Lachlan had always been full of energy. He died in hospital within hours of falling ill. Mr. and Mrs. Fewster believe that if Lachlan had received the vaccine he could still be here with us today. Losing a child is one of the most devastating things that can happen to a parent, as my wife and I know only too well, and it is Scott and Maria's commitment to raising awareness about their son's case that has convinced me to raise the issue today.
Childhood immunisation has been one of the greatest successes of modern medicine. In the last half-century, previously life-threatening and disabling diseases such as polio and diphtheria and, thanks to the success of the more recent immunisation programmes, HIB meningitis and meningitis C, have been virtually eradicated in this country. Despite that success, some serious diseases remain. Pneumococcal disease is caused by the bacterium pneumococcal pneumoniae. I apologise for my pronunciation of these words, but I am doing the best I can, considering that they are so technical. Pneumococcal infection can cause a variety of different illnesses, including life-threatening serious disease such as meningitis, pneumonia and blood poisoning. The consequences of serious pneumococcal infection in children can be devastating and potentially more severe than the consequences of other infectious diseases against which children are already routinely vaccinated. Despite the availability of effective antibiotics, serious pneumococcal diseases carry a significant risk of death or severe disability.
Every year, serious pneumococcal diseases, such as meningitis, blood infections and pneumonia, devastate the lives of thousands of British children and their families. Babies and young children under two are most at risk. One of the most devastating forms of pneumococcal disease is meningitis, which is the second most common form of bacterial meningitis in the United Kingdom and among its most life-threatening. Media attention inevitably focuses on meningitis B, and children are immunised against meningitis C, but many parents are not even aware of the pneumococcal form of the condition. Some 15 per cent. of children, or one in six, who contract it will die. Despite rapid medical advances, that figure has sadly remained the same for more than 20 years. The chances of a child dying from pneumococcal meningitis are twice as high as for meningitis B and C. As I mentioned earlier, Lachlan died within hours of contracting pneumococcal meningitis. Furthermore, children who survive infection are twice as likely to suffer long-term and severe neurological complications as children infected with other forms of meningitis. A recent analysis found that one in six children who survived pneumococcal
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meningitis subsequently suffered mental retardation; one in seven developed epilepsy or other seizure disorders; and one in four became deaf. Another recent British study showed that one in four children suffer severe to moderate disability following pneumococcal meningitis. There are many facts and figures, but I want to go beyond the statistics and provide a first-hand perspective and insight into the disease.
The story of Lachlan Fewster was recently brought to my attention when I received a letter from his parents, Scott and Maria. Mr. Fewster is the headmaster of Whitehall primary school in Evington, Leicester—the school at which my mother, Merlyn, taught for a few years when we first moved to the city.
Lachlan was aged just two years and nine months when he died of pneumococcal meningitis in April. He had recovered from the same form of meningitis in March last year after fighting the infection in hospital for nearly a fortnight. At the time, Maria and Scott were told that he had suffered no after-effects. They never dreamed that he would contract the same disease a year later and that it would claim his life.
After Lachlan's death, Scott and Maria discovered that he had been born without a spleen and, as a result, had a significantly reduced immune system. They did not know about it because Lachlan was not screened after birth and he was not considered to be at risk after his first episode of meningitis last year.
In April, the pneumococcal meningitis was stronger and Lachlan lost his fight for life just 10 hours after falling ill. Doctors could not save him, as the bacteria spread so quickly and poisoned all his organs. His parents believe that the tragedy could have been prevented if Lachlan had been given the Prevenar vaccine, which has been licensed but is not routinely available on the NHS.
The knowledge that Lachlan could still be with us haunts the family each day. With my support and that of many others, they are currently campaigning for a routine childhood pneumococcal vaccination. They launched a petition in Leicester last week, which has already received hundreds of signatures.
At present, the NHS provides the vaccine only when a child is deemed to be vulnerable to meningitis—if their immune system is weak, for example. Had Scott and Maria known of their son's reduced immune system they would have insisted that he have an inoculation, and they would have even paid for it themselves. The current price of Prevenar is £120, which would be dramatically reduced if the vaccine were routinely available.
I am glad to say that Maria is expecting a baby in January, but she wants to ensure that her new baby son or daughter is protected. Scott and Maria urge that Prevenar be routinely given to all under-twos. The Fewsters are not alone in their suffering: four children a month die from serious pneumococcal infection such as meningitis, and each time parents are outraged to find that a vaccine is available that may have saved their child.
Research from the campaign group Raising Awareness of Paediatric Pneumococcal Infection and Disease—RAPPID—found an unequivocal response from parents with regard to pneumococcal vaccination. When informed of the facts, 92 per cent. said that they

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were in favour of their children receiving the extra jabs to protect them from the devastating effects of the disease.
As I said earlier, the effects of the infection do not stop at meningitis. When the pneumococcal bacteria enter the bloodstream and multiply, a particularly life—threatening form of serious pneumococcal disease can occur. Septicaemia blood poisoning—can also cause serious organ damage and ultimately death. The disease is also generally acknowledged as the leading cause of severe bacterial pneumonia in children under two years old and overall in any age group. Many people are not aware that babies can develop pneumonia, which is a particularly dangerous condition in young children. In the United Kingdom, it is estimated that one in 200 children are hospitalised as a result of pneumococcal pneumonia before their fifth birthday. Pneumococcal pneumonia is responsible for the most serious types of pneumonia, which sometimes require surgery to repair the damage caused and, as I said, can result in death.
There is growing concern about the use of antibiotics to treat infections, which I understand. Fears about the steady increase in antibiotic-resistant strains of bacteria already seen in many parts of the world are real and becoming a major source of concern in this country. For example, recent figures from Scotland show a tripling of the rates of resistance to penicillin and other antibiotics during the past decade. The problem is twofold. First, the effectiveness of drugs vital in the line of defence against serious diseases such as meningitis is being eroded. Secondly, in an attempt to rationalise unnecessary antibiotic uses for minor viral illnesses, the more serious causes of recurrence, such as those caused by pneumococcal diseases, are being treated later.
A routine immunisation programme to prevent the most serious forms of pneumococcal disease would also produce additional benefits in reducing the amount of less serious illnesses commonly seen in young children. It could help reduce pressure on the perennial problem of NHS beds, reducing the number of GP visits, the prescription of antibiotics and demand for surgical treatment.
The efficacy and safety profile of the pneumococcal conjugate vaccine are not in question. It has been shown to be highly effective as a vaccine, with an established safety profile generated from experience of the nearly 50 million doses administered to more than 10 million children worldwide. The vaccine has been part of the routine childhood vaccination schedule in the United States since its introduction in 2000. There, it is recommended for all children under the age of two and is part of a federal childhood immunisation programme. It has had a huge, immediate and sustained impact on serious pneumococcal disease cases, such as meningitis and septicaemia. Recent data published in the New England Journal of Medicine detailing figures compiled by the US national Centers for Disease Control and Prevention show a 69 per cent. reduction in pneumococcal diseases in children aged under two since universal use of the vaccine was introduced in 2000.
It does not stop there, as there is an added benefit to the rest of the population. Routine immunisation of children in the United States with the pneumococcal conjugate vaccine has been shown to reduce the incidence of serious pneumococcal diseases among unvaccinated children and adults, thereby extending the
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benefits to parents, carers and grandparents. In fact, just a couple of weeks ago at a conference in Cardiff on infection, the potential benefits were applied to the United Kingdom population, showing that a routine immunisation programme could save 2,000 lives a year.
The European Commission granted marketing authorisation for Prevenar in all 15 EU countries on 5 February 2001, effectively meaning that it was available for doctors in the UK. However, little use of the vaccine occurred until January 2002, when the Department of Health recommended Prevenar for infants and young children up to two years of age in groups with conditions that increase the likelihood of infection and children for whom infection is likely to have a worse prognosis. That includes infants or young children without a spleen, with sickle-cell disease, leukaemia and other malignancies, diabetes or HIV, or with respiratory, cardiac, kidney or liver impairment. However, it is widely acknowledged that the vast majority of pneumococcal disease occurs in children who are otherwise perfectly healthy and happy. Through the introduction of a routine immunisation programme, a major health gain could be won for British children.
Prevenar is also recommended for use in at-risk infants and young children in a number of other EU countries, including Denmark, Germany and Italy. Those countries are also considering the introduction of Prevenar as a routine vaccine for all infants and young children in the context of their national immunisation programmes. Other EU counties, such as France and Austria, have already implemented wider use of Prevenar. In France, recommendations for its use in at-risk children from two months to two years of age are particularly wide reaching. Within the EU, Austria has become the first country to make it available.
Government experience with implementing at-risk vaccination programmes in the United Kingdom shows them to be an inefficient way of protecting vulnerable groups and individuals, as there is no established way of measuring compliance with recommendations or associated health outcomes. So why does the Department of Health appear to be so slow in introducing the new vaccine for all children under two? That would be the best way to ensure that the most vulnerable are protected. Cases of meningitis C and resulting deaths have tumbled by a staggering 90 per cent. since the programme began. With the US experience and in the face of the facts, I ask why it has not been introduced.
On the issue of recognising universal vaccination as the most effective way to achieve protection, the Department of Health should be commended for introducing pneumococcal vaccination for all adults aged 65 and over. I have already talked about the effects on young children.
It is also recognised that cost might be a consideration with this particular vaccine. However, on inclusion in the national routine immunisation schedule, the NHS public service agreement would negotiate a contract price for Prevenar outside the basic NHS price for the Department of Health, as it does for all other routine vaccines. Furthermore, considering the widespread benefits of vaccination—not only to those immunised, but to their families and to society as a whole through

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the herd immunity observed in the US—the programme is clearly cost-effective. Ultimately, what price can we put on a baby's life or a child's damaged future?
Can the Minister put on record when the Department of Health intends to introduce the Prevenar vaccine for all children under two as part of routine immunisation? An obvious first step would be to say whether the new immunisation programme is in the Department's identifiable spending plans for 2004—05. If so, when will it be introduced? May I meet the Minister to discuss these matters?
The death of this little boy from Leicester will be with his parents, their family and friends for ever. I hope this short debate, in a small way, can prevent further deaths from happening.
3.47 pm
The Parliamentary Under-Secretary of State for Health (Dr. Stephen Ladyman): I congratulate my hon. Friend the Member for Leicester, East (Keith Vaz) on securing today's debate and on his interest in this matter. My congratulations also go to Scott and Maria Fewster on trying to turn a personal tragedy into a measure to protect all children. It is a tribute to them that they have taken such an interest after what happened to their family.
The Department takes seriously the subject of how best to prevent pneumococcal infections in children. It is of great concern to us. I would be happy to meet my hon. Friend to discuss the matter further. If he contacts my office, we can arrange a meeting as soon as he likes.
We take all vaccine-preventable childhood illnesses seriously. Our vaccination programmes have been enormously successful. Nowadays in this country, we never see a child crippled by polio and wearing callipers, which was not an uncommon sight when I was a schoolboy. That is because polio has been eradicated from Europe through vaccination. Smallpox has become a disease of the past. Cases of diphtheria in children are rare, and tetanus infections in infants are also a thing of the past. We have not seen a death from acute measles in this country for 10 years.
All those diseases used to put children at risk. Immunisation has protected them from those and other preventable diseases for years, and continues to do so. An example of our commitment to childhood immunisation was the introduction of the meningitis C vaccine in November 1999. We were the first country in the world to introduce it, and it has been a huge success: cases of meningitis C in children have been reduced by 95 per cent. since the campaign began.
We were the first country to introduce that vaccine because of the collaborative work of agencies such as the Public Health Laboratory Service—now the Health Protection Agency—the National Institute for Biological Standards and Controls, and the Institute of Child Health, which form the Department's vaccine evaluation consortium. That is a unique collaboration of Government-funded, but independent, organisations and institutions. The consortium was able to carry out the studies needed to show that the vaccines were safe and effective.
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That said, the Department is very careful when considering the introduction of a new vaccine into the childhood immunisation schedule. We have to be sure that it is safe and effective in preventing disease. We must know the number of doses that children need to be protected, and at what age the doses should be given. We need to be confident that introducing a new vaccine into the childhood immunisation schedule will not interfere with the other vaccines being given.
I caution my hon. Friend against drawing on experiences in other countries; such things are not directly comparable because all countries have different immunisation regimes. We have to decide what suits our country, regardless of the risk-benefit analyses of other countries.
We also have to think of the practicalities of introducing a new vaccine into the programme, such as whether that would mean extra visits to the GP's surgery, more injections per visit, or the combination of more vaccines in one injection. Also, we must constantly check that our current vaccines are keeping levels of disease down and consider whether further booster doses will need to be added to the immunisation schedule.
It is also important to remember that not all countries offer the same vaccine programmes. For example, we offer the meningitis C vaccine to infants, but it is not routinely offered in the United States. In the United States, vaccines are offered to infants at two, four and six months of age. In the UK, we use an accelerated schedule, offering vaccines at two, three and four months. Those differences between countries' immunisation programmes depend on many factors, such as the risk of a particular disease in a specific country.
I agree with my hon. Friend that pneumococcal infection in children can be serious. The Department already recommends that the vaccine be given to children among whom pneumococcal infection is more likely to be common or more dangerous. "At risk" children include those with severe dysfunction of the spleen, asplenia, chronic renal disease, immunodeficiency or immunosuppression, chronic heart disease, chronic lung disease, diabetes mellitus, and those with a cochlear implant. We already offer protection to more vulnerable children.
In some instances, the risk factors are clear from an early age, but sadly that was not the case for Lachlan. We are already seeking advice about adding pneumococcal vaccine—and Prevenar in particular—to the routine childhood immunisation schedule. The Joint Committee on Vaccination and Immunisation gives independent expert advice on vaccination issues. It has considered the available evidence, and stated that more information and underlying evidence is needed to gain a better understanding of the impact of offering pneumococcal vaccine to children. The available evidence does not allow for an accurate prediction of the burden of disease that is vaccine-preventable.
However, the Committee is aware that the Department is funding research to find out more about the vaccine. The research is assessing the level of protection that the vaccine offers infants in the UK, the optimal schedule for the vaccine in infants, whether there is a need for a booster dose in the second year of

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life to maintain protection, and the impact of introducing the vaccine into the childhood schedule on the protection given by the other vaccines.
Those are important questions that need to be answered. We are hopeful that the studies will provide the information needed to make a clear, evidence-based decision about the vaccine, and in particular about the benefits that it would bring, the potential risks and the best schedule for giving the vaccine to infants. Some of the trials that examine the protection offered by the vaccines in the UK schedule are close to completion, and the JCVI has been kept informed of their progress.
We are also keeping a close watch on the impact of the introduction of Prevenar on children in the United States. We are especially interested to see whether there is evidence of serotype switching—where the strains of bacteria against which the vaccine protects are replaced by strains that are not vaccine-preventable. That would reduce the effectiveness of the vaccine in protecting against the disease. We also want to assess whether vaccinating children has reduced the rates of disease in older age groups, as my hon. Friend suggested.
There are many uncertainties in the evidence, especially about the amount of disease that is expected to be prevented by a vaccine in both the short and longer term. That is why, as far back as 1996, the then Public Health Laboratory Service put in place an enhanced surveillance system for pneumococcal infections.
The purpose of the enhancement has been to provide us with the best possible estimates of the disease burden to inform our economic modelling, and to serve as a baseline ahead of any introduction of a vaccine. The JCVI is kept closely informed of all the evidence as it develops.
It is important to note that the UK is not alone in awaiting further evidence before making a decision on Prevenar. Other European countries are in the same position. I believe that the US is the only country that routinely offers the vaccine as part of its childhood immunisation programme.
We cannot ignore the financial implications of introducing new immunisation programmes. Prevenar is not cheap. The price that the US Government pays for
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one dose of Prevenar is about the same as that for one dose of all the other vaccines routinely used in our childhood programme. If it were to be introduced into the routine childhood immunisation schedule in the UK, it would cost millions of pounds—probably £100 million or more to protect all children up to the age of two years.
However, I am reassured to hear from my hon. Friend that the price of Prevenar could fall dramatically if it were introduced into the national programme. I should be grateful if he would let me have any relevant information that would allow us to plan for lower prices, since we have based our estimates on the present US Government's contract price, which is already discounted from the private sector price.
We anticipate the possible use of the vaccine in the childhood immunisation programme, once we are reassured about its impact and have completed the risk-benefit analysis. However, I sound one note of caution. In the US, there have been shortages of pneumococcal conjugate vaccine, so that the full recommended schedule could not be implemented, and we would want to address that issue.
We understand the potential benefits, and that is why we are funding trials and studies on the pneumococcal conjugate vaccine's possible use in the UK. Its introduction into the childhood programme has the potential to be a positive step and, as my hon. Friend pointed out, may reduce pneumococcal disease in older unimmunised age groups, particularly where the burden of disease is high. It is also likely to reduce the quantity of antibiotics used to treat infections, which is another concern.
As soon as there is good evidence that the vaccine will deliver real benefits, provision will be made for it in the Department's spending plans. I am sure that my hon. Friend will understand the importance that the Department places on basing its decisions on immunisation issues on independent scientific advice. We take seriously our responsibility to ensure that we have the safest and most effective national childhood immunisation programme. I look forward to meeting my hon. Friend to discuss the matter further.

Gulf War Veterans
3.58 pm
Mr. Paul Tyler: I am pleased to have the opportunity to raise this issue again. I welcome the Minister to the debate, and remind him that I have a special interest in the subject—not a financial interest—as a member of the Royal British Legion Gulf war group.
It might be helpful to hon. Members if I were to explain why I came to be involved. There is a particularly large number of veterans in Cornwall and the south-west because there is a large population of service families in the area. However, after the eventual revelation that many British troops were doused with dangerous levels of organophosphates in 1991, I became involved in the matter as chair of the all-party group on organophosphates. Significantly, for this debate and others in this Chamber, that revelation came after two years of misleading ministerial assurances to me and other hon. Members that none of our service personnel could have been exposed to such a risk.
Throughout the 12 years since the first Gulf war, I have been especially frustrated by and ashamed of the extent to which veterans and their families have been hung out to dry by the Ministry of Defence. They have not received the care and attention that those who serve the nation in our armed forces should be entitled to expect. Surely the least they should receive is consistent support and regular, reliable information. I hope later to demonstrate the more forthcoming attitude of the United States Government and Congress.
My many colleagues across parties and I hoped that lessons had been learned before the Iraq war earlier this year. That was the subject of a similar debate in this Chamber on 5 February. In that connection, I was shocked by the parliamentary answer that I received on Monday to a question that I tabled on behalf of the family of Sergeant Steven Roberts, who came from Wadebridge in my constituency. Sergeant Roberts was the first British fatality in the recent Iraq war. He was killed on 24 March, and there were several outstanding questions about his death that his widow and mother wanted answered. For example, was he ordered to pass on his reinforced flak jacket to others thought to be more vulnerable? Exactly who fired the fatal shot? Did his gun jam?
The Secretary of State told the family in September that the special investigation branch—the SIB—of the Royal Military Police would shortly report, but they have heard nothing since, or at least they had not on Monday. The Minister of State, the right hon. Member for East Kilbride (Mr. Ingram), who is responsible for the armed forces, told me then, more than eight months after Sergeant Roberts's death, that there was still
"evidence … to be collected and … witnesses … to be interviewed."—[Official Report, 8 December 2003; Vol. 415, c. 276—7W.]
Surely the trail must be getting cold.
We have just heard of a similar shocking case. Eight long months after the family of Marine Christopher Maddison from Plymouth were told that his death was caused by an enemy attack near Basra, the MOD has admitted that he must have been killed by so-called friendly fire. What an appalling way to aggravate such a
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tragedy. Those whose loved ones join the services to protect us deserve better. I very much regret that the lessons of what I might call Gulf war I appear not to have been adequately learned for the families of victims in Gulf war 2.
On the illnesses that veterans have experienced, I hope that the Minister will save time in his reply and not bother with the usual linguistic games about the alleged difference between a single Gulf war syndrome and the more general but identifiably distinct Gulf war illnesses. I always refer to the latter, and I think that most of my colleagues do. I am happy to stick with that. The treatment of veterans remains the core issue, whatever the semantics of Whitehall.
The first subject that I shall address under that heading is pensions. My hon. Friend the Member for Hereford (Mr. Keetch) recently established that the MOD has forced victims of Gulf war illnesses to quit the Army rather than being medically discharged. The latter would mean automatic eligibility for a medical pension; the former offers nothing. That system is known as manning control. The National Gulf Veterans and Families Association has claimed that at least 400 of its members have been forced out in that way. The manning control policy is intended to allow the removal of soldiers whose services are no longer required after six, nine or 12 years. Under the policy, they are supposed to be warned 12 months in advance if they are to be discharged.
The Secretary of State has admitted that the MOD' figures for the numbers that were manning controlled were distorted. In a letter to my hon. Friend the Member for Hereford, he said that more had been affected by the manning control system than was originally suggested to my colleagues. Documents shown to The Daily Telegraph reveal that MOD Ministers seem to have misled Parliament over the extent of the manning control policy. Despite claims to the contrary, those leaked documents show that lists of soldiers are still being considered for manning control and sent to their units. Shaun Rusling, to whom I pay great tribute for his indefatigable efforts on behalf of veterans of the National Gulf Veterans and Families Association, rightly described the revelation as a national disgrace.
Vaccination records are an important part in the development of the problems. I draw the Minister's attention to the questions tabled as long ago as January by his noble Friend Lord Morris of Manchester to Lord Hunt, then Under-Secretary of State for Health. Lord Morris asked about the effect of combining anthrax vaccine with other vaccines. The response was that vaccines are licensed by the Secretary of State for Health; the vaccine should be used alone, not in a cocktail. That information was included in the product summary provided to doctors. It was apparent in a matter of a few days from the evidence of Captain Beverley Green, who served in the Gulf in the Queen Alexandra's Royal Army Nursing Corps, that the vaccine was not used alone. The information given by the Under-Secretary in the other place was not helpful.
Lord Morris asked Lord Bach whether the vaccine was licensed at the time of the Gulf war of 1990–91, whether the guidelines were in place, and whether other vaccines had similar limitations. The Under-Secretary in the other place promised that a letter would be written and be placed in the Library. On 7 March, my Liberal

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Democrat colleague, Lord Clement-Jones, asked for a similar response and an undertaking was given. It took until 9 October for the letter to be put in the Library. I followed it up with a question in the House of Commons. It became apparent that it was only in 1998 that the instruction was given that the vaccine should only be used alone. Therefore, it obviously was not available at the time of the first Gulf war.
It was shown in a table summarising information that there was no proper co-ordination with other vaccines at the time of the first Gulf war. It was admitted, amazingly, that there were problems with vaccination records; many personnel did not carry what was described as the BMed27 forms—details recorded on either temporary nominal rolls or BMed27s—and they were often not transcribed on to F Med4s. Therefore, there were no proper records of who had been vaccinated, when vaccination had taken place and whether it was with the notorious cocktail of vaccines, simultaneously.
Perhaps most alarming, the instructions for nerve agent pre-treatment sets, the so-called NAPS tablets, which contain a special bromide, were and are not subject to restriction on co-administration. Therefore, after an eight-month delay between the original question and the answers given to Lord Morris, there was no real information about the situation in 1991 beyond the confession of ignorance and the lack of record.
That admission—the lack of adequate vaccination records—blows to smithereens the assurances given in both Houses about the effective monitoring of all those who were inoculated in the original programme before the 1991 hostilities. As the Minister knows, since 9 October Lord Morris has pursued through several other questions the discrepancies that are still apparent. I do not have time to go through them now, but I hope there will be an opportunity for a face-to-face discussion between Lord Morris, other colleagues in the Royal British Legion group and the Minister.
On the position of other official bodies in the recognition of Gulf war illnesses, the Ministry of Defence may insist that there is no inherent connection between these illnesses and service in the Gulf, but others are equally sure of the likelihood of a connection. I refer to the inquest on Major Ian Hill, the conclusion of which was reported on 25 November. While serving with the Royal Army Medical Corps, Major Hill flew to the middle east in January 1991 to help to set up operating theatres. Within four days of arriving, he was ill with flu-like symptoms. He was diagnosed with bronchial pneumonia, sent home a month later, and failed to recover. He suffered psychological profile changes: he could not sleep, he was irritable, and he had mood swings and short-term memory loss, which are common among those suffering from the Gulf war illnesses. He attributed that to the NAPS tablets that he was given before the war. Consequently, he helped to establish the National Gulf Veterans and Families Association. At his inquest in Warrington, the coroner, Mr. Nicholas Rheinberg, said that he did not
"believe it would do justice to Ian Hill to describe his death as natural causes. I am going to describe his death as natural causes to which his military service in the 1991 Gulf War campaign was a contributing factor."
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That is just the latest example of the Ministry of Defence being out of step with other authorities that are examining the issues.
I shall briefly refer to the American experience, which contrasts with the situation in this country. I am grateful to the intern in my office—she is on loan from the United States—for all the work that she has done, and I will not be able to do it justice given the limited time. The US Department of Defence and the Department of Veteran Affairs established effective counselling services immediately after the 1991 conflict. They were concerned to ensure that soldiers' illnesses were dealt with pre-emptively rather than waiting for them to become established. President Clinton set up a coordinating board and a presidential advisory committee on the subject in 1994.
In 1995, President Clinton issued executive order 12961 and set out a clear statement that the purpose of the committee was to
"determine whether the government is doing all it can to discover the causes of Gulf War veterans' illnesses, and determine whether the government is delivering quality care to those veterans who are ill."
An effective programme of research, examination and monitoring of the health of veterans followed. The committee made a number of recommendations and conducted several large-scale Government research projects, eventually producing its findings in the final report of December 1996. Those findings said:
"Prudence requires further investigation of some areas of uncertainty, such as the long-term effects of low-level exposure to chemical warfare agents and the synergistic effect of exposure to pyridostigmine bromide and other risk factors."
The final report detailed symptoms that all veterans that have suffered ill health in this country would recognise. They included stress that affects
"the brain, immune system, cardiovascular system, and various hormonal responses."
The committee recommended that the
"Department of Defence and the Department of Veteran Affairs should perform long-term mortality studies of Gulf War veterans appropriate for investigating cancer rates in the Gulf War veteran population in the coming decades",
and that the
"entire federal research portfolio should place greater emphasis on basic and applied research on the physiologic effects of stress and stress-related disorders."
It concluded with the following statement, which was posted on its website:
"Approximately 697,000 men and women answered the call to serve in Operations Desert Shield and Desert Storm. In many important ways—through medical care, outreach, and research—the nation has begun to pay its debt to these service members. It is essential, now, to move swiftly toward resolving Gulf War veterans' principal remaining concerns: How many US troops were exposed to chemical warfare agents, and to what degree?"
I wish that we had the same firm statement of purpose from the British Government.

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There have been suggestions in the United States that all the symptoms can be attributed to post-traumatic stress syndrome. However, Congressman Bernie Sanders wrote to the presidential advisory committee to say that that clearly was not the case. He said that there could have been
"many more signatures on that letter. I must tell you that it was not a partisan issue. Democrats, Republicans, conservatives, progressives—all responded because very few people today in the House of Representatives and I expect in the Senate as well, and I expect within the veterans community, and I expect within the United States of America, today accept the conclusion that only stress was the cause of the problems."
Others in the United States have since echoed that view.
I compare and contrast the legislative action that has been taken in the States under the Veterans Benefit Act 2001 with the lack of specific legislation here and our apparent lack of urgency in dealing with the issue. The US legislation dealt specifically with the illnesses that we are considering and tried to address them meaningfully.
Members of the US House Subcommittee on National Security, Veterans Affairs, and International Relations visited the House of Commons, and I was privileged to be one of the Members from both Houses who gave evidence. It was an interesting exchange of views. At the end of it, the previous presidential candidate, Mr. Ross Perot, who was part of the team, said:
"This is not stress. This is troops in combat wounded by chemical agents. Our Government is now being very aggressive on this issue. But our real challenge is to get the British Government to take the same kind of aggressive attitude and get them to react."
I must conclude if I am to give the Minister a reasonable opportunity to reply, and I am happy to do so. I should say that I am not alone in expressing concern about such issues. The hon. Member for East Hampshire (Mr. Mates), a fellow member of the Royal British Legion Gulf war group, is serving on a Select Committee this afternoon but wished to be associated with my remarks. Many of us, inside and outside the House, hope that the Minister will be able to give us a comprehensive progress report today.
More important, I wholeheartedly endorse the view of my colleagues in the Royal British Legion group that continuing MOD confusion, contradictions and contortions reinforce the case for some form of independent inquiry. I appeal to the Minister to agree to meet representatives of the RBL group to explore the best way for such an inquiry to be set up, and to ensure that it is expeditious and avoids the pitfalls of yet more over-legalistic bureaucracy.
4.16 pm
The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin): I congratulate the hon. Member for North Cornwall (Mr. Tyler) on securing the debate. I begin by paying tribute to the work of the all-party Royal British Legion group. I would be happy to attend a meeting of the group if the group's officials thought that it would be helpful and appropriate.
Without doubt, the Government have taken the issue of Gulf veterans' illnesses seriously. I do not want to reflect today on what occurred between 1992 and 1997, but I do know that the Labour party is keeping the commitments that we made to them.
134WH
More than 53,000 United Kingdom armed forces personnel deployed to the Gulf in 1990 to 1991. Only a minority, albeit a very important minority, are ill. We all want to know why. However, there is still no medical or scientific consensus on the cause or causes of ill health among some Gulf veterans. In July 1997, we published a policy statement, "Gulf Veterans' Illnesses: A New Beginning", setting out how the Government would address veterans' health concerns. Many of the commitments that we made in that document have been fulfilled, and it continues to underpin our activities. First, it makes it clear that all Gulf veterans will have prompt access to medical advice from the Gulf veterans' medical assessment programme—GVMAP. Secondly, it makes it clear that there will be appropriate research into veterans' illnesses and factors that might have a bearing on them. Thirdly, it states that the Ministry of Defence will make available to the public the information that it possesses that is of potential relevance.
I shall say a little about each of those areas. The Gulf veterans' medical assessment programme was set up by the previous Government; during the past 10 years, it has seen nearly 4,000 patients, some more than once. The programme's focus was set to provide as full a diagnosis as possible to veterans concerned about their health. The majority of patients seen were well when they were seen. A number of patients referred to the programme have concerns about mental health conditions. Since July 1999, when appropriate, the programme has referred Gulf veterans to a countrywide network of specialist psychiatrists and psychologists for their expert assessment and diagnosis. Veterans who have left the armed forces will use their GP, and any treatment recommended by the medical assessment programme will therefore be carried out within the NHS.
The Ministry of Defence remains committed to the long-standing arrangement that war pensioners should be given priority in NHS hospitals for examination or treatment relating to their pensioned disablement, subject always to the needs of emergencies or other cases that demand clinical priority as determined. I can assure the House this afternoon that my departmental officials continue to liaise with their colleagues in the health service to ensure that periodic reminders about the priority treatment arrangements are issued to hospitals, GPs and other key players in the referral process.
I am pleased to say that the responses to the voluntary Gulf veterans' medical assessment programme satisfaction questionnaires show that 96 per cent. of patients who complete them are satisfied with the service that the programme provides. I encourage all Gulf veterans who are concerned about their health to attend the Gulf veterans' medical assessment programme.
The second issue was research. There is good scientific evidence that as a group, Gulf veterans report more ill health than other comparable groups, but that the pattern of this ill health is not unique to Gulf veterans. They report the same symptoms and conditions in the same rank order as United Kingdom Bosnia veterans do, as do UK military personnel who did not deploy to the Gulf. The only difference is the increased frequency with which Gulf veterans report such symptoms. Some Gulf veterans have recognised medical conditions, but a large number of non-specific, multi-system, medically unexplained symptoms have also been reported.

135WH
It is worth reminding the House that specific diseases, disorders or medical conditions and medical syndromes each have common features such as a set of physical signs and/or symptoms that distinguish them from other medical conditions. Gulf veterans do not present with an identifiable and distinct pattern of symptoms or signs. The consensus of the international scientific and medical community following extensive research on the matter is that there is insufficient evidence to enable such ill health to be characterised as a unique Gulf-related illness or syndrome. For that reason the Government's approach must be guided by the scientific and medical evidence, which is why we do not recognise "Gulf war syndrome" as a medical condition.
I accept the point that the hon. Gentleman made; I, too, refer to Gulf veterans' illnesses. However—I want to reassure him on this point—that does not stop Gulf veterans who are ill claiming a war pension. War pensions are awarded not for a list of disorders but for any disablement that can be accepted as caused or made worse by service. At the end of June 2003, about 2,500 Gulf veterans were in receipt of a war disablement pension. That figure includes awards for both Gulf-related and non-Gulf-related illnesses.
As I said earlier, we want to find out why some Gulf veterans from the 1990 to 1991 conflict are ill. Our current research programme will cost at least £8.5 million to complete. The Medical Research Council provides independent scientific advice on the research programme. Last year my hon. Friend the Member for Kirkcaldy (Dr. Moonie) announced that we had asked the MRC to undertake an independent scientific review of all UK research work that had been carried out into Gulf veterans' illnesses in an international context, and to advise on whether there were any areas appropriate for future research. The MRC's recommendations were published on 22 May 2003.
The Ministry of Defence has taken particular note of the review's conclusions and recommendations for further research. A number of the recommendations were scientifically complex and the MOD is discussing with the MRC how they may be taken forward, the data they are expected to yield and the priorities that should be attached to them.
In that context, the Government are not convinced that a public inquiry would help answer the basic question why some Gulf veterans are ill. In the present circumstances it is only through scientific and medical research that we are ever likely to be able to establish the causes of veterans' illnesses in the Gulf.
The third strand of our approach is openness. The MOD has made a lot of information public in response to inquiries from veterans and others, and continues to do so. Information and reports are made available on our website at www.mod.uk/issues/gulfwar.
The hon. Gentleman raised the issue of my noble Friend Lord Bach's response to Lord Morris, the first paragraph of which I should like to place on the record.
"Further to my letter of 17 September … I am writing in answer to your Parliamentary Question of 4 February … about the medical countermeasures used to protect our personnel during the 1990–91 Gulf Conflict. Again, I would like to say how sorry I am that you have had to wait for so long for me to do so." — [Official Report, House of Lords, 9 October 2003; Vol. 652, c. WA67.]
136WH
My noble Friend rightly gave an apology. However, in respect of what happened in 1991, it seemed as if something new had been revealed in some of the press coverage of that answer. In fact, there was no significant disclosure of any new information in that answer. The key points had been published some years earlier—they were not new.
Mr. Tyler: Why, then, did it take six months to write that letter?
Mr. Caplin: I hope that the hon. Gentleman will forgive me for saying that we have apologised to Lord Morris and he has accepted our apology. The point of the letter and the answer was to place on the record all those issues that had been referred to previously. That is what we did. However, it was nothing new, and nothing that had not been known before in the public domain.
I want to stress that the well-being of the personnel that we deploy is of the greatest importance to us. We have made some important improvements since the 1990–91 Gulf conflict. For example, we have introduced a new operational medical record form which is now in use and should ensure that health events while personnel are on deployment are recorded more systematically than in the past. We have acknowledged that the earlier Gulf conflict revealed shortcomings in our medical preparedness. A number of personnel were not up to date with their service standard vaccination. There is clearly a need to ensure that our forces are ready for worldwide deployment at all times. Vaccination status is an important aspect of such readiness. Our policy guidance has been modified to ensure that troops are routinely immunised, so there should be no need for personnel to receive a combination of vaccines on deployment.
We have improved the briefings that are given to personnel on health-related matters, and Permanent Joint Headquarters now commissions up-to-date medical intelligence briefings for those areas of the world where it is judged that UK forces are likely to operate. Our personnel who are deploying on operations receive pre-deployment and in-theatre briefings on health and hygiene matters, which are based on the assessment made by PJHQ. There are also briefings on the nature and management of combat stress reactions and other psychological stresses of conflict.
Arrangements to limit the effects of post-traumatic illnesses in the armed forces have been developed over a number of years, and they will continue to be reviewed in the light of medical developments in the field of stress management and treatment. Those measures have been applied, where it is appropriate, to Operation Telic. We have expanded the remit of the Gulf veterans' medical assessment programme to allow all regular and reservist service personnel, and MOD civilians who deployed during Operation Telic, to be seen by their doctor. I can tell the House that 13 veterans of Operation Telic have been referred to the programme and I have applied for war disablement pensions.
On 7 May my predecessor announced that we are to look closely at the health of personnel employed during Operation Telic. Three main studies are being conducted. First, there is a study into the physical and

137WH
psychological health of Operation Telic veterans by Professor Wesseley's team at Guy's, King's, and St Thomas' hospitals. Secondly, a study is being undertaken by the Medical Research Council Institute of Environmental Health at the university of Leicester to identify, collect and analyse data on relevant exposures that might have been encountered. Thirdly, the Institute of Medicine in Edinburgh is carrying out a study to establish normative values of urinary uranium in a military population that did not deploy to the Gulf. We also intend to monitor the mortality and cancer rates of Operation Telic veterans.
138WH
The hon. Gentleman asked me about the United States. Perhaps I could write to him on my discussions with Secretary Principi. I assure the House that the Government are committed to addressing this complex and difficult issue and to understanding why some veterans of the first Gulf conflict are now ill. We have made every effort to learn from the lessons of that conflict. Of course, we cannot guarantee that deployed forces will not suffer injury or ill health, but we are doing everything we can to minimise the risks. That is our duty, and we recognise the importance of that obligation.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Four o'clock.

LEADER OF THE HOUSE

  Parliamentary Data and Video Network
  Michael Fabricant
  To ask the Leader of the House whether hon. and right hon. Members will be allowed to remain remotely connected to the parliamentary network during a Dissolution of Parliament. [142800]

  Mr. Hain
  I understand that the Information Committee will be examining Dissolution arrangements in due course.

  Catering
  Mr. Dennis Turner
  To ask the Leader of the House pursuant to his answer to the hon. Member for North-East Hertfordshire (Mr. Heald) on 27 November 2003,Official Report, column 129, what the change in demand for the Members' Dining Room has been since the change in sitting hours of the House. [143580]

  Mr. Hain
  I inadvertently gave a figure of five per cent. for the increase in demand for the Members' Dining Room since the new sitting hours came into effect. The correct figure was 0.5 per cent. based on a comparison of covers served in January-October 2003 against January-October 2002. I am grateful for this opportunity to correct the record.

CONSTITUTIONAL AFFAIRS

  Census 1911
  Mr. Carmichael
  To ask the Parliamentary Secretary, Department for Constitutional Affairs when he plans to release the 1911 decennial population census for England and Wales. [141913]

  Mr. Leslie
  The 1911 census returns, now in the custody of the National Archives, are currently closed for 100 years by Lord Chancellor's Instrument no. 12 of 1966, on the grounds that the information was supplied in strict confidence. s5(2) of the Public Records Act 1958 provides for the extension of the normal 30-year closure period in such cases. The National Archives is, therefore, currently considering ways of making the 1911 census data generally available to the public at the end of the 100 year closure period.

  Legal Finance
  Mr. Dismore
  To ask the Parliamentary Secretary, Department for Constitutional Affairs how much was spent on barristers' fees for criminal legal aid in 2002–03; and how much of this was attributable to payments to Qcs. [141418]
  458W
  Mr. Leslie
  Spending on barristers fees in the Crown court and above during 2002–03 was £317.36 million and £1.4 million for assigned counsel in the magistrates court. £0.4 million was also paid to counsel (both assigned and unassigned) for residual work not covered under the General Criminal Contract. It is estimated that of this amount, £76 million was paid to QCs. It is not possible to give a precise figure because the type of barrister is not always recorded.

  Legal Advice (Matrimonial Disputes)
  Gareth Thomas
  To ask the Parliamentary Secretary, Department for Constitutional Affairs what steps the Legal Services Commission is taking to ensure adequate provision in Wales for legal advice in relation to matrimonial disputes. [142408]

  Mr. Leslie
  In order to ensure adequate provision of legal advice across Wales in all categories of law, including matrimonial disputes, the Legal Services Commission (LSC), the Legal Services Committee for Wales, and the local Community Legal Service Partnership monitor provision on a regular basis. Where gaps in provision are identified, the LSC can re-allocate the number of publicly funded legal matters which suppliers can start in any particular category of law, in order to meet priority needs. In addition, the LSC has just announced that solicitors in England and Wales can start an additional 20,000 legal matters by April 2004.

  Supreme Court
  Mr. Lazarowicz
  To ask the Parliamentary Secretary, Department for Constitutional Affairs whether it is his policy that the proposed Supreme Court for the UK should sit outside London on(a) an occasional and (b) a permanent basis. [142709]

  Mr. Leslie
  It is envisaged that the main permanent base of the Supreme Court will be in London; however, no final decision has yet been taken. That would not preclude the court sitting elsewhere in the United Kingdom from time to time when it is judged appropriate to do so.

WALES

  Small Businesses
  8. Mr. Bellingham
  To ask the Secretary of State for Wales, how much money was spent by the Government on assisting small businesses in Wales in 2002–03. [142076]

  Mr. Hain
  The Welsh Assembly Government provides financial support for small businesses. The majority of this is supplied by the WDA, which contributed more than £75 million in 2002–03. In addition UK Government supports small businesses through cost saving initiatives such as R&D tax credit, the improvement of the Small Firms Loan Guarantee Scheme and raising the audit threshold for SMEs.

  Police Grant
  Mr. Roger Williams
  To ask the Secretary of State for Wales, what recent discussions he has had with the Home Department about the police grant for Wales. [142077]

  Mr. Touhig
  My right hon. Friend and I have regular discussions with colleagues about matters affecting Wales.

  Higher Education
  Ian Lucas
  To ask the Secretary of State for Wales, what discussions he has had with the Education Secretary of the National Assembly for Wales Government concerning the funding of higher education courses in England for students from Wales. [142078]

  Mr. Hain
  Welsh students are currently eligible to apply for fee remission grants to cover tuition costs and for income contingent loans for living costs. From 2004–05, students will also be eligible for the new HE grant of up to £1,000.

  Barnett Formula
  Mr. Win Griffiths
  To ask the Secretary of State for Wales, what discussions he has had with(a) the Treasury and (b) the National Assembly for Wales Government on the outcome of the Yvonne Watts v Bedford Health Authority case on the Treasury block grant for Wales under the Barnett formula. [142079]

  Mr. Touhig
  As the Government is appealing against the ruling in this case, it would not be appropriate for me to speculate on the final outcome of the case. However, funding for the NHS in Wales is a matter for the National Assembly for Wales, which is free to allocate resources from within the block grant as it sees fit. The Government has no current plans to review the Barnett formula which has produced fair and transparent settlements over the years.

  Flooding
  Miss McIntosh
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary about flooding in Wales. [142080]

  Mr. Touhig
  My right hon. Friend and I have regular discussions with Assembly Secretaries about issues affecting Wales, including flooding and flood prevention measures. The Assembly has recently consulted on new flood defence management arrangements for Wales.

  Police Funding
  Gareth Thomas
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary about police funding in Wales. [142081]

  Mr. Touhig
  My right hon. Friend and I have regular discussions with colleagues about matters affecting Wales.

  Community Support Officers
  Mr. Martyn Jones
  To ask the Secretary of State for Wales how many community support officers there are in Wales. [142082]
  460W
  Mr. Touhig
  Funding has been made available for 113 Community Support Officers in Wales.

  In July I met with a group of Community Support Officers based in my own constituency who are already coming to be recognised as a valuable part of the local policing team.

  Parliamentary Constituencies
  Huw Irranca-Davies
  To ask the Secretary of State for Wales what representations he has made to the Boundary Commission for Wales about the fifth general review of parliamentary constituencies in Wales. [142083]

  Mr. Hain
  None.

  Art Acquisition
  Norman Baker
  To ask the Secretary of State for Wales how much his Department has spent on the acquisition of works of art in each year since 1997, broken down by amounts spent on(a) paintings and (b) sculpture; what the single most expensive piece of art purchased by his Department since 1997 was; how much it cost; and what the total revenue raised by his Department through sales of its works of art has been since 1997. [142363]

  Mr. Hain
  The Wales Office was established in 1999. Since then the Department has not purchased or sold any works of art. However, my office does showcase a collection of Welsh artwork loaned to both our offices in Gwydyr House and Cardiff by the Government Art Collection and National Museums and Galleries.

  Big Conversation
  Mr. Heald
  To ask the Secretary of State for Wales what visits(a) he and (b) Ministers in his Department (i) have made and (ii) plan to make using public funds in connection with the Big Conversation; how many civil servants accompanied each Minister in respect of such visits; what the cost to public funds was of visits by (A) each Minister and (B) civil servants in connection with the Big Conversation; and if he will make a statement. [143158]

  Mr. Hain
  I refer the hon. Member to the answer I gave yesterday as Leader of the House of Commons, at column 355W.

  Council Tax
  Mr. Wiggin
  To ask the Secretary of State for Wales what the average council tax in Wales is in 2003–04. [142575]

  Mr. Hain
  Figures published by the National Assembly on 25 March show that the average band D council tax for 2003–04 is £837.

  EU Landfill Directive
  Mr. Wiggin
  To ask the Secretary of State for Wales what discussions he has had with the National Assembly for Wales to ensure Wales plays its part in meeting the commitment to the EU Landfill Directive target of 25 per cent. of 1995 levels by 2010. [140815]
  461W
  Mr. Touhig
  My right hon. Friend and I have regular discussions with Assembly Secretaries about matters affecting Wales. In June 2002, the Assembly published a comprehensive national waste strategy for Wales: "Wise about Waste". It contains challenging targets for local authorities to increase their recycling and composting of municipal waste to 40 per cent. by 2010. The Assembly has also issued guidance to local authorities to assist the development of their own municipal waste management strategies. There has been some early and encouraging progress showing significant increases in recycling and composting: for example eight authorities have reported achieving the initial 15 per cent. target for 2003–04 by 2002–03.

  EU Structural Funds
  Adam Price
  To ask the Secretary of State for Wales what discussions he has had with colleagues in the National Assembly for Wales Government on the repatriation of European funds. [140538]

  Mr. Hain
  I have regular discussions with colleagues in the National Assembly for Wales on the future of European structural funds, and I am keeping abreast with the latest developments.

  Adam Price
  To ask the Secretary of State for Wales what discussions he has had with the Treasury on the repatriation of European structural funding. [140539]

  Mr. Hain
  I have regular discussions with the Treasury on the future of European structural funds, and I am keeping abreast with the latest developments.

  Gross Domestic Product
  Mr. Wiggin
  To ask the Secretary of State for Wales what the Welsh gross domestic product per capita figures are since 1990. [141162]

  Mr. Hain
  The available information is given in the following table. Gross value added (previously known as gross domestic product) is only available at the prevailing price levels in each year.

  Gross value added per capita in Wales, current basic prices:

  Per capita

  £

  Amount

  1990

  7,212

  1991

  7,450

  1992

  7,742

  1993

  8,106

  1994

  8,565

  1995

  9,020

  1996

  9,427

  19971

  9,860

  19981

  10,273

  19991

  10,593

  20001

  10,987

  20011

  11,396

  1Provisional.

  Source:

  Office for National Statistics, regional accounts

  Job Creation
  Mr. Wiggin
  To ask the Secretary of State for Wales how many jobs have been created in Wales since 1997 in(a) the public and (b) the private sector. [141161]

  Mr. Touhig
  Comparing the 12 months to August 2003 with 1997, there has been an increase of 49,000 people employed in the public sector and 61,000 employed in the private sector in Wales.

  Source:

  Labour Force Survey

  Ministerial Visits
  Mr. Wiggin
  To ask the Secretary of State for Wales how many visits he has made to Bangor in his capacity as Secretary of State for Wales. [142574]

  Mr. Hain
  I regularly visit different parts of Wales and have been to Bangor twice in my capacity as Secretary of State for Wales.

  Neath Port Talbot Hospital
  Mr. Wiggin
  To ask the Secretary of State for Wales if he will make a statement on the meeting he had with health officials on 7 November on the future of the Neath Port Talbot Hospital. [141164]

  Mr. Hain
  I attended this meeting as a constituency engagement as the Member of Parliament for Neath.

  Owain Glyndwr (Commemoration)
  Adam Price
  To ask the Secretary of State for Wales what discussions he has had with his colleagues in the National Assembly for Wales Government on the organisation of events to commemorate Owain Glyndwr in 2004.

  Mr. Touhig
  I have regular meetings with Assembly Secretaries on a range of issues affecting Wales.

  I understand that a number of organisations have made representations to the National Assembly about this anniversary. The assembly is considering how the event should be commemorated.

  Regiments
  Mr. Wiggin
  To ask the Secretary of State for Wales how many Welsh regiments he has visited in 2003.

  Mr. Hain
  I recently met Brigadier lain Cholerton prior to him taking up his new post as commander of the senior royal regiment of Wales. I also met with his predecessor. We discussed the possibility of a visit in the near future.

DEFENCE

  Al Yamamah Contract
  Mr. Cousins
  To ask the Secretary of State for Defence who determines the(a) prices, (b) specifications and (c) standards of the items set out in the Al Yamamah contract; and by what procedures prices, specifications and standards are revised. [142584]
  463W
  Mr. Ingram
  Al Yamamah is a Government-to-Government agreement. Its content and all revisions are negotiated and agreed between officials of the United Kingdom and Saudi Arabian Governments.

  Mr. Kilfoyle
  To ask the Secretary of State for Defence what liaison he has had since 3 November with the Serious Fraud Office on the allegations made by Mr. Edward Cunningham relating to the Al Yamamah programme. [142113]

  Mr. Ingram
  None.

  Bearskins
  Mr. Jenkins
  To ask the Secretary of State for Defence how many bearskins the Army has purchased in each of the last five years; and whether these bears are(a) killed in the wild and (b) farmed for their skins. [141855]

  Mr. Ingram
  A total of 694 bearskin caps have been procured over the last five years.

  Calendar year

  Caps procured

  1998

  54

  1999

  166

  2000

  232

  2001

  63

  2002

  179

  Total

  694

  The pelts used in the manufacture of bearskin caps are purchased through a licensed agent and imported under licence from Canada. We understand from manufacturers that the pelts are supplied from bears hunted as part of the quotas established under the Canadian Provinces' conservation plans.

  One bear pelt can make on average between one and two caps. A cap refurbishment programme has been in place since 2001 with the aim of reducing the requirement for new caps to a minimum. A total of 430 caps have been refurbished since this programme began.

  Deepcut Barracks
  Mr. McNamara
  To ask the Secretary of State for Defence what role Ministry of Defence Police officers have had in the reopened police investigation of deaths at Deepcut barracks; and how many potential witnesses were canvassed and interviewed by military personnel in the investigations into the deaths of(a) Mr. Sean Benton, (b) Cheryl James, (c) Mr. Geoff Gray and (d) Mr. James Collinson. [143128]

  Mr. Ingram
  In response to a request from Surrey Police, two Ministry of Defence Police Detective Constables were seconded to the Surrey Police team for the duration of their investigation into the Deepcut deaths. During the secondment the two officers have been at all times under the full operational control of that Force. The details of the investigations are matters for the Surrey Police.

  Defence Export Services Organisation
  Mr. Cousins
  To ask the Secretary of State for Defence whether the(a) costs and (b) offsetting receipts of government-to-government defence export
  464W
  programmes are included in the administration and sales promotion expenses of the Defence Export Services Organisation staff in the central Top Level Budget. [142416]

  Mr. Ingram
  The costs and offsetting receipts of government-to-government defence export programmes are included in the Administration and Sales Promotion expenses of the Defence Export Services Organisation staff in the Central Top Level Budget. Details of these expenses are published in Table 11 (Export of Defence Equipment) of Cmd 5912, the Government's Expenditure Plans (Ministry of Defence) 2003–04 to 2005–06.

  Eurofighter Typhoon
  Mr. Steen
  To ask the Secretary of State for Defence when the contracts will be awarded for the second tranche of the Eurofighter project; how much the contracts will be for; and if he will make a statement on the reasons for the delay. [142303]

  Mr. Ingram
  Intense work is under way involving our partner nations and industry to enable contracts for the second tranche of Eurofighter Typhoon aircraft to be placed as soon as possible. The cost to the United Kingdom is expected to be of the order of £5,000 million. Under the original schedule, the contracts had been due to be placed during 2003 but the programme, including the delivery of Tranche 1 aircraft, has been subject to delay. We are determined to ensure that Industry's proposals for Tranche 2 are soundly based to deliver capability to a schedule against which the Royal Air Force can plan with confidence.

  Norman Lamb
  To ask the Secretary of State for Defence if he will make a statement on the planned interchangeability of weapons between the Eurofighter Typhoon aircraft ordered by the four partner nations. [141978]

  Mr. Ingram
  It will be physically possible to fit and operate any weapon that has been integrated with Typhoon on any nation's Typhoon aircraft, although not all nations would necessarily have the airworthiness clearance and training to use any weapons. There are currently no plans for one nation to use weapons bought by another.

  Norman Lamb
  To ask the Secretary of State for Defence whether gun safety indicators will be fitted to the RAF's operational Eurofighter Typhoon aircraft. [141979]

  Mr. Ingram
  We currently have no requirement for Typhoon to be armed with a gun. For overall armament safety there is a Remote Position Indicator for the Master Armament Safety Switch (MASS), which removes power from all the armament systems on the aircraft, and confirms to the groundcrew, before they approach the aircraft, that the MASS has been set to safe.

  Norman Lamb
  To ask the Secretary of State for Defence what assessment has been made of the speed limitations caused by the external carriage of weapons on the Eurofighter Typhoon; and whether the merits of an internal weapons bay in this respect have been assessed. [141980]
  465W
  Mr. Ingram
  Assessments have been carried out to determine the flight limitations necessitated by the thermal effects of high-speed carriage of weapons on the Eurofighter Typhoon. The merits of an internal weapons bay were assessed during the early design phase of the aircraft. However, this arrangement was rejected because the aircraft was designed primarily for the air superiority role where the rapid availability of weapons mounted on external pylons offers greater operational advantage.

  Norman Lamb
  To ask the Secretary of State for Defence whether the weapons suspension points on the RAF's operational Eurofighter Typhoon aircraft will be compatible with Military Standard 1760; and if he will make a statement. [141982]

  Mr. Ingram
  All the weapons suspension points on the RAF's operational Eurofighter Typhoon will be compatible with Military Standard 1760.

  Norman Lamb
  To ask the Secretary of State for Defence whether a competition process is intended between bidders for a mid-life update to the RAF's Eurofighter Typhoon aircraft; and if he will make a statement. [141983]

  Mr. Ingram
  Typhoon's incremental acquisition strategy means that enhancements to the aircraft's capabilities will be incorporated progressively after its initial entry into service. It is too early in the Typhoon programme to consider whether a formal mid-life update for the aircraft might be needed or how it might best be achieved.

  Future Strategic Tanker Aircraft Programme
  Mr. Gerald Howarth
  To ask the Secretary of State for Defence what the implications are for the UK's acquisition of air tanker aircraft of the US Department of Defense's re-examination of the equivalent programme. [142779]

  Mr. Ingram
  None.

  Hawk Jet Trainer
  Mr. Gerald Howarth
  To ask the Secretary of State for Defence what progress is being made in finalising the contractual arrangements between his Department and BAe Systems in respect of the acquisition of Hawk 128 Advanced Jet Trainers. [141990]

  Mr. Ingram
  Good progress has been made to date with BAE Systems. A contract for risk reduction activities is expected to be signed before the end of the year. Negotiations towards a final contract for Hawk 128 continue.

  Hercules
  Mr. Gray
  To ask the Secretary of State for Defence if he will list the C-130K Hercules airframes, giving the out-of-service dates of each. [142604]

  Mr. Ingram
  [holding answer 8 December 2003]Based on current predictions it is expected that the RAFs Hercules C-130K fleet will be retired around the end of this decade. The out of service dates for individual aircraft have yet to be decided.
  466W
  Mr. Gray
  To ask the Secretary of State for Defence what work is planned to upgrade the C-130K fleet; whether this will include upgrading of the wings; and what effect such upgrades will have on the out-of-service dates of each aircraft. [142638]

  Mr. Ingram
  On current plans it is expected that the RAF's Hercules C-130K aircraft will be progressively withdrawn from service from around the end of this decade to be replaced by A400M aircraft. Consequently there is no upgrade programme for the C130K fleet. However, a small number of aircraft have had their capabilities enhanced to meet the demands of recent operations in Afghanistan and Iraq. This did not include upgrading of their wings.

  Israel
  Norman Baker
  To ask the Secretary of State for Defence what his policy is on the supply to Israel of(a) weapons and (h) machine parts that can be used to enhance that country's (i) nuclear and (ii) biological weapons capability. [142335]

  Mr. MacShane
  I have been asked to reply.

  As with export licence applications for all other countries, licences for the supply of strategic goods to Israel are assessed on a case-by-case basis against the Consolidated EU and National Export Licensing Criteria. The criteria ensure that proper consideration is taken of the risk of the goods being used for either internal repression or external aggression. The assessment includes careful consideration of the possible, as well as the stated, end-use of any equipment supplied.

  The Government would not issue an export licence that was in contravention of the criteria.

  Marine Navigational Aids PFI
  John Thurso
  To ask the Secretary of State for Defence (1) when the public private partnership/private finance initiative project for the provision of MoD marine navigational aids is to be concluded; and what the cost to the Department has been;[142535]

  (2)if he will list the parties involved in the public private partnership/private finance initiative project for the provision of MoD marine navigational aids; [142536]

  (3)what consultation he has had with (a) the Maritime and Coastguard Agency, (b) Trinity House, (c) the Northern Lighthouse Board and (d) the Commissioners for Irish Lights regarding the public private partnership/private finance initiative contract for the provision of marine navigational aids. [142537]

  Mr. Ingram
  The future provision of Marine Services, which includes work relating to marine navigational aids, is the subject of a PPP/PFI Acquisition programme. These services are currently provided by Serco Denholm, under a Government Owned-Contractor Operated (GOCO) arrangement and by the Royal Maritime Auxiliary Service (RMAS). The RMAS are currently responsible for the laying/recovery and annual maintenance of some 205 navigational
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  buoys around the coast of the British Isles. Under current plans, the design authority for navigational buoys and the supply of related mooring materials will also be transferred to the successful bidder.

  Invitations to Negotiate have been issued to Serco Denholm Ltd and a consortium led by Babcock Naval Services Ltd. The RMAS have also been given the opportunity under the Acquisition programme to compete for a package of work similar in scope to their current portfolio. Announcement of the preferred option is planned in early 2005 with the conclusion of the PPP/PFI programme expected in Autumn 2005.

  Maintenance of MOD navigational buoys represents a small part of the future provision of Marine Services programme and it is not possible to identify separately the management costs for this aspect alone.

  Discussions took place with the General Lighthouse Authorities (GLAs), Non-Departmental Public Bodies sponsored by the DIE, in 2001 to determine whether there was scope for the GLAs to take over the maintenance and upkeep of MOD UK navigational buoys. However, it was subsequently decided not to proceed as such an arrangement would provide little benefit to the MOD. No further discussions on this matter have taken place either with public or private sector bodies.

  National Defence Industries Council
  Mr. Keetch
  To ask the Secretary of State for Defence if he will list the industrial members of the National Defence Industries Council; what the criteria are for their appointment; and if he will make a statement. [141843]

  Mr. Ingram
  The industry members of the National Defence Industries Council (NDIC) currently are:Sir Richard Evans: Chairman, Defence Industries Council and Chairman, BAE Systems plc
  Mr. Andrew Davies: Vice President Defence, Intellect
  Mr. Martin Jay: President, Society of Maritime Industries
  Sir David Lees: Chairman, GKN plc
  Mr. Nick Prest: Chairman, Defence Manufacturers Association
  Mr. Gordon Page: President, Society British Aerospace Companies
  Dr. Sally Howes: Secretary, Defence Industries Council
  Mr. Simon Frost: Chairman, Claverham Group
  Mr. Alex Dorrian: Chief Executive Officer, Thales Defence Ltd.
  Mr. Colin Green: President of Defence Aerospace, Rolls-Royce plc
  Mr. Tony Pryor: Chairman Devonport Management Ltd., and Chief Operating Officer Europe and Africa, Kellogg Brown and Root

  The NDIC is the senior body that provides a focus for regular consultation between the Ministry of Defence and industry on questions of defence supply and procurement of mutual concern, and defines areas for joint study.

  Appointment to the NDIC is at the discretion of the Secretary of State. The industry membership comprises the senior representatives of the four main trade associations, senior industrialists, representatives of the service sector and representatives of small and medium-sized enterprises, who are invited on an individual basis.

  Qatar
  Matthew Taylor
  To ask the Secretary of State for Defence whether BAE Systems sought the advice of the(a) Ministry of Defence and (b) the Defence Export Services Organisation on whether commissions for Shaik Hamad bin Jassin bin Jaber al-Thari were legitimate in connection with a defence equipment package for Qatar signed in 1996. [142412]

  Mr. Ingram
  No evidence has been found in available records of advice being sought from the Ministry of Defence (including the Defence Export Services Organisation) on the question of commission payments in connection with a defence equipment package for Qatar signed in 1996.

  Recruitment
  Lady Hermon
  To ask the Secretary of State for Defence what proportion of the armed forces recruitment budget was spent in(a) England, (h) Wales, (c) Scotland and (d) Northern Ireland in each year since 1997; and if he will make a statement. [142676]

  Mr. Caplin
  The total recruiting budget for each Service in each year since 1997–98 was as follows:

  £ million

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  2002–03

  RN/RM

  25.4

  28.5

  28.7

  30.8

  33.1

  29.9

  Army

  53.9

  48.1

  53.0

  55.2

  65.5

  71.8

  RAF

  27.4

  30.6

  27.4

  28.2

  29.7

  31.0

  The proportion of the recruiting budget spent by country was:

  Percentage

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  2002–03

  RN/RM

  England

  81

  81

  81

  80

  81

  81

  Wales

  6

  6

  6

  6

  5

  6

  Scotland

  11

  11

  11

  12

  12

  11

  Northern Ireland

  2

  2

  2

  2

  2

  2

  RAF

  England

  27

  25

  29

  29

  29

  29

  Wales

  2

  2

  3

  oJ

  3

  3

  Scotland

  4

  4

  5

  5

  5

  5

  Northern Ireland

  3

  1

  1

  1

  1

  1

  The remainder of the budget was taken up by National recruiting campaigns and Central costs. The Army's recruiting budget is managed centrally and cannot be broken down in the format requested.

  Territorial Army (Balkans)
  Mr. Flight
  To ask the Secretary of State for Defence how many Territorial Army personnel are serving in the Balkans. [143345]

  Mr. Caplin
  As at 1 December 2003, 182 Territorial Army personnel were mobilised for service in the Balkans.

  Tornado
  Norman Lamb
  To ask the Secretary of State for Defence why new shoulder weapons pylons were not procured for the upgrade of Tornado GR1 aircraft to GR4 standard; and if he will make a statement. [141981]

  Mr. Ingram
  The shoulder weapon pylons on the Tornado GR1 were upgraded to Tornado GR4 standard as part of the Tornado GR1 mid-life upgrade programme. There was therefore no requirement to procure new shoulder weapon pylons.

  Warships
  Dr. Julian Lewis
  To ask the Secretary of State for Defence if he will list significant(a) accidents and (b) fires on RFA Argus within the past six months. [143259]

  Mr. Ingram
  There have been no accidents on RFA Argus in the last six months. However, the ship is currently undergoing a refit and on 2 December a small fire occurred during work on her boiler. Damage was limited to the boiler and Argus is expected to return to service, as planned, early next year.

WORK AND PENSIONS

  Occupational Pensions
  Mr. McWalter
  To ask the Secretary of State for Work and Pensions what help he can offer pensioners who have lost money because the occupational schemes of their insolvent employers have been administered under the Pensions Act 1995 since 6 April 1997. [142110]

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions (1) what the Government's policy is on establishing a compensation fund for payments backdated to 1997 to pension scheme members who would be entitled to final salary pensions where the scheme(a) has been wound up and (b) is being wound up where there are insufficient assets fully to meet the scheme pension liabilities; [142378]

  (2) what proposals the Government have to make the proposed Pension Protection Fund retrospective from the introduction of the Pensions Act 1995. [142382]

  Malcolm Wicks
  The Government have great sympathy for the pension scheme members who have suffered pension losses due to their insolvent company's scheme winding up underfunded. These cases have highlighted the need for urgent action so that their situation can be avoided in the future. This is why we are amending the priority order, introducing the Pension Protection Fund and strengthening the employer debt by introducing the full buy out provision.

  When the introduction of the Pension Protection Fund (PPF) was announced on 11 June 2003, Official Report, column 683, my right hon. Friend the Secretary of State stated that it would be introduced as soon as parliamentary time allows, and that it would apply to the future, not retrospectively.

  Ministers have been meeting those affected by pension losses in order to understand their plight and to listen to suggestions regarding assistance ahead of the PPF's introduction. However, to provide help for those
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  who have already lost out would raise a number of complex and difficult issues, and, as a result, Ministers have emphasised that they do not want to raise false hope in this area.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions (1) what the Government's policy is in relation to the protection of pension rights on employer insolvency under Article 8 of the EU Insolvency Directive of 1980; [142373]

  (2) if he will make a statement on how the Government has complied with Article 8 of the EU Insolvency Directive of 1980. [142374]

  Malcolm Wicks
  Our policy in relation to Article 8 of the EU Insolvency Directive of 1980, is to safeguard certain contributions that members pay into occupational pension schemes.

  We meet our obligations under Article 8 of the Insolvency Directive, as successive Governments have done since it was adopted in 1980. Under the Employment Rights Act 1996 and the Pensions Scheme Act 1993, the Redundancy Payments Directorate, on behalf of the Secretary of State for Trade and Industry, makes insolvency payments from the National Insurance Fund (NIF) to qualifying former employees. The amounts payable from the NIF are subject to statutory upper limits. In addition, the Pensions Act 1995 requires salary-related schemes to meet the Minimum Funding Requirement (MFR), and provides for a statutory priority order for the distribution of a scheme's assets if a scheme, that is required to meet the MFR, winds up.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions (1) what the Government's estimate is of the number of final salary pension funds that(a) have been wound up and (b) are being wound up since the introduction of the Pensions Act 1995; and how many of those employers were (i) solvent and (ii) insolvent at the time of winding-up; [142375]

  (2)what estimate the Government has made of the total value of pensions lost since 1997 as a consequence of final salary pension schemes that (a) have been wound up and (b) are being wound up by (i) solvent and (ii) insolvent employers; [142376]

  (3)if he will list by (a) region and (b) constituency final salary pension schemes which (i) have been wound up and (ii) are being wound up by (A) a solvent and (B) an insolvent employer in each year since 1997. [142377]

  Malcolm Wicks
  The Pensions Schemes Registry (PSR), administered by the Occupational Pension Schemes Regulatory Authority (OPRA), holds information on the number of final salary schemes which are currently in the winding-up process and the number of schemes which have entered and completed winding-up. The registry database is, however, limited in a number of ways as described in the footnote. Consequently, it does not provide all the information requested, though it nevertheless remains the most comprehensive source of information available on the aggregate number of pension schemes in the UK.

  According to the PSR's most recent data, around 1,400 private sector final salary schemes were in the winding-up process at the beginning of September, and

  471W
  around 4,800 private sector final salary schemes have completed winding-up. The data does not permit any further analysis on whether these schemes have commenced/completed winding-up prior to 1997 or 1995.

  It is not possible to split the above by whether they are connected to a solvent or insolvent employer. No alternative data source exists to provide this information. Also, the information collected does not facilitate analysis by region or constituency. As regards estimating the value of pensions lost (due to winding-up), this is also fraught with numerous difficulties. The extent of loss depends on many different factors—such as the maturity of the scheme (that is, the age profile and retirement status of members), and the funding position before starting winding-up. The latter in turn is highly sensitive to investment decisions and conditions in the financial markets. With no information to draw on at an aggregate level, we are unable to comment on the extent of scheme under-funding and losses arising from wind up. The PSR, as mentioned, was not designed originally for the purposes of such analysis, and therefore does not provide information on scheme funding positions and costs.
  Note:
  The Pension Schemes Registry (PSR) is not designed or intended to provide a comprehensive or continuous statistical record of the status of schemes. The PSR registers schemes for tracing purposes and collects the levy from pension schemes, including those in the process of winding-up. New scheme data are being reported to the PSR on a continuous basis. Therefore, the figures are subject to continuous revision. When a scheme has changed status, the previous status of the scheme is not recorded on the Registry. Schemes have up to 12 months to notify OPRA of any status change.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions what estimate the Government has made of the cost of paying compensation backdated to 1997 for pension scheme members who would be entitled to final salary pensions where the scheme is(a) wound up and (b) being wound up and where there were insufficient assets to fully meet the scheme pension liabilities. [142379]

  Malcolm Wicks
  It is not possible to provide an estimate of the cost of a compensation arrangement without a range of assumptions, including assumptions about the nature and level of compensation to be provided, the number of people covered and the degree of underfunding in their pension schemes.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions what the Government's policy is on the guarantee of members' future pension benefits of existing final salary pension schemes in the period before the introduction of the proposed Pension Protection Fund. [142383]

  Malcolm Wicks
  The Pensions Act 1995 makes provision for the payment of compensation to trust-based occupational pension schemes in cases of dishonesty. The compensation scheme should provide some help where the sponsoring employer is insolvent and the value of the scheme assets has been reduced as a result of dishonesty.

  There is legislation currently in place that provides that, when a salary-related occupational pension scheme winds up, any deficiency in the pension fund
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  becomes a debt on the employer. The Government have issued draft regulations designed to strengthen this protection. They state that where a scheme is wound up and the sponsoring employer is solvent, the employer should ensure that there are sufficient funds in the scheme to meet the full costs of the rights accrued by scheme members, unless doing so would put the company itself at risk.

  The current legislation provides a statutory priority order for distribution of assets on wind-up. We have issued draft regulations on a revised statutory priority order that will ensure that the degree of protection offered will reflect the length of time a member has been contributing to the scheme.

  We are planning for both sets of regulations to come into force in early 2004.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions what the Government's policy is on protecting the accrued pension rights inherent in the value of money transferred into employer defined benefit occupational pension schemes from other schemes, to prevent loss of these sums as a consequence of employer insolvency. [142385]

  Malcolm Wicks
  The current legislation which applies when a defined benefit occupational pension scheme winds up does not differentiate between accrued pension rights that have been transferred into a scheme, and other accrued rights that are already in the scheme. We have no plans to alter this position.

  We have announced a package of measures to protect all members of defined benefit occupational pension schemes when their employer becomes insolvent. These include the introduction of the Pension Protection Fund and refinements to the priority order.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions what plans the Government have to reduce the time taken to wind up final salary pension schemes. [142386]

  Malcolm Wicks
  In April 2002, we introduced legislation to speed up the time taken to wind up pension schemes. Trustees are required to make regular progress reports to the Occupational Pensions Regulatory Authority (Opra). Opra can direct that action is taken by those responsible if it considers that the winding up is being unreasonably delayed. Other people involved in running the scheme are required to tell Opra if there are no trustees so that consideration can be given to appointing a trustee. And trustees can apply to Opra for an order to modify the scheme so that it can be wound up.

  In addition, there will be proposals in the recently announced Pensions Bill for the introduction of a more hands-on role for the new Pensions Regulator which will be based on risk analysis. This approach will further facilitate the winding up of schemes and will provide welcome support for trustees.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions what comparative studies the Government
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  has carried out to establish how the cost of providing annuities to employer final salary schemes in wind-up can be of best value to scheme members. [142387]

  Malcolm Wicks
  The Government have not carried out studies into the use of annuities when a final-salary scheme is in wind-up. When a pension scheme is in wind-up, its trustees seek to discharge the scheme's liabilities, using annuities to secure pensioners' incomes.

  Benefit/Scheme

  Administration

  Department

  Passported by Pension Credit Guarantee Credit

  Passported by Pension Credit Savings Credit alone

  Assisted Prison Visits

  England, Scotland and Wales

  Home Office

  Yes

  No

  Court Fees Exemption

  England and Wales

  Department for Constitutional Affairs

  Yes

  No

  Dental Treatment

  England, Scotland and Wales

  Department of Health

  Yes

  No

  Discretionary Grant for the Disabled

  England

  Office of the Deputy Prime Minister

  Yes

  No

  Discretionary Grant for the Disabled

  Wales

  Welsh Assembly

  Yes

  NO

  Home Energy Efficiency Scheme

  England

  Department for Environment Food and Rural Affairs

  Yes

  Yes

  Home Energy Efficiency Scheme

  Scotland

  Scottish Executive

  Yes

  Yes

  Home Energy Efficiency Scheme

  Wales

  Welsh Assembly

  Yes

  Yes

  Improvement and Repair Grants

  Scotland

  Scottish Executive

  Yes.

  No

  Milk Tokens for Pregnant partners

  England, Scotland and Wales

  Department of Health

  Yes

  No

  Optical Vouchers and Sight Tests

  England, Scotland and Wales

  Department of Health

  Yes

  No

  Seat Belts—no need to pay for medical evidence for exemption

  England, Scotland and Wales

  Department for Transport

  Yes

  No

  Legal Aid—Pension Credit Guarantee Credit and Pension Credit Savings Credit will be disregarded in the assessment for financial eligibility for Legal Aid.

  People who qualify for a guarantee credit only or who qualify for a guarantee credit and a savings credit will generally get help through Housing Benefit towards all of their eligible rent payments, provided these are reasonable, minus deductions for any non-dependants living with them.

  People who receive only the savings credit will not be entitled to full Housing Benefit. Instead, the amount of Housing Benefit they receive will depend upon their income (including their savings credit), their personal circumstances and the amount of their eligible rent. However, the personal allowances used in the Housing Benefit calculation have been enhanced to reflect the maximum savings credit figure. This will ensure that people do not lose the gains from the savings credit in the calculation of their Housing Benefit. This enhancement will apply to all Housing Benefit claimants, aged 65 or over, irrespective of whether they are receiving the maximum savings credit or no savings credit.

  Welsh further education tuition fee remission policy is at the discretion of the Further Education College. People in receipt of Pension Credit may (subject to the other criteria) be eligible for a payment from the Social Fund.

  People in receipt of Pension Credit have access to the Social Fund subject to the criteria which apply to the different types of Social Fund payment available.

  Pension Service
  Mr. Webb
  To ask the Secretary of State for Work and Pensions how many pensioners(a) have requested,

  Pension Credit
  Mr. Cousins
  To ask the Secretary of State for Work and Pensions if he will list the passported benefits for(a) Guarantee Pensions Credit, (b) Savings Pension Credit and (c) Council Tax Benefit. [142658]

  Malcolm Wicks
  The principal passported benefits for Pension Credit Guarantee Credit and Pension Credit Savings Credit are in the following table.

  (b)have received and (c) are currently on a waiting list to receive a home visit from the Pension Service local service; and what the average waiting time is before a pensioner can expect to receive a visit. [143082]

  Malcolm Wicks
  The Pension Service is primarily a telephony-based service delivered through a network of pension centres across the UK. However, for a variety of reasons, not all older people are able to conduct their business in this way and require either a home appointment or an appointment at a location convenient to them. These customers are referred to local service. During October 2003 (latest available statistics), 45,925 such customers were referred to local service from pension centres and 43,601 received home appointments.

  There are no 'waiting lists'. The standard for local service is that customers will be offered a convenient home or surgery appointment within 10 working days. Latest available statistics show that this standard is being met in 96.1 per cent of cases. Home visits are sometimes postponed by the customer while relevant documents are obtained or to enable a relative to be present.

  Timber
  Mr. Gardiner
  To ask the Secretary of State for Work and Pensions by what means the policy for purchasing timber and timber products of(a) the Department, (b) the Appeals Service, (c) the Child Support Agency, (d) JobCentre Plus and (e) the Pension Service ensures that they are obtained from legal and sustainable sources. [141343]

  Maria Eagle
  The Department's PFI Estates Partner—Land Securities Trillium—supplies the majority of timber products for the Department and all its executive agencies. They were made aware of the requirement to purchase timber from legal and
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  sustainable sources in September 2000, by e-mail and during the regular progress meetings that are held between the Department and Land Securities Trillium.

  Land Securities Trillium provide an annual report to the Department, giving information on all their suppliers, the type of timber product supplied and details of all supporting verification. This report is then subject to independent verification.

  The roll out of the new Jobcentre Plus service means that there are some contracts for refurbishment of sites that are being let outside of the Department's main PFI estates contract. Details of the model contract specification were circulated to the relevant procurement team. A requirement for evidence of the sustainability of timber was included within all contracts. The Department is currently reviewing what evidence has been supplied to date.

  Winter Fuel Allowance
  John Barrett
  To ask the Secretary of State for Work and Pensions what steps are being taken to encourage men aged between 60 and 65 to apply for the winter fuel allowance for the 2003–04 winter. [142833]

  Malcolm Wicks
  Each year, we are able to identify most men who are likely to become newly eligible for a winter fuel payment using current departmental records and they are sent claim forms automatically with an invitation to make a claim.

  An extensive publicity campaign is carried out from June each year and continues throughout the year. The campaign includes: advertisements in national and local press; a leaflet and poster made available in a variety of venues, a dedicated Winter Fuel Payment Helpline and information on the internet.

  Where a person needs to claim, it is up to them whether they do so. They have until 30 March 2004 to make their claim for this winter.

  John Barrett
  To ask the Secretary of State for Work and Pensions what targets have been set for the number of men aged between 60 and 65 to apply for the 2003–04 Winter Fuel Allowance. [142834]

  Malcolm Wicks
  We expect all those entitled who are not paid automatically, including men aged between 60 and 64, to claim their entitlement to Winter Fuel Payments. In order to achieve full take up we issue claim forms to all those in the target group and publicise the availability of Winter Fuel Payments.

  So far 172,790 claim forms have been issued to men aged 60–64 for this winter. All those who need to claim have until 30 March 2004 to do so.

  Note:

  1. Figures rounded to the nearest five.

  2. Information to identify those likely to be entitled was extracted from the Departmental Central Index based on post codes.

  John Barrett
  To ask the Secretary of State for Work and Pensions (1) what plans he has to revise the qualifying week for winter fuel payments; [142835]

  (2) for what reason his Department chose 21 September as the final qualifying date for the 2003–04 winter fuel payment. [142836]
  476W
  Malcolm Wicks:
  There are no current plans to change the winter fuel payment qualifying week.

  The qualifying week is set in legislation for the third week in September to enable the Department to establish the correct amount of winter fuel payment and make automatic payments to the vast majority of those entitled at the time the payment is most needed.

  Annabelle Ewing
  To ask the Secretary of State for Work and Pensions how many winter fuel payment claim forms have been issued in 2003 in the Perth constituency; and how many claim forms have been submitted. [142654]

  Malcolm Wicks
  The number of winter fuel payment claim forms issued so far this year to people who are likely to become eligible for a winter fuel payment in the Perth constituency is 696, and of those 446 have been returned.

  We are publicising the availability of winter fuel payments and how to obtain a claim form. Those who need to claim for this winter have until 30 March 2004 to do so.
  Note:
  Information to identify those likely to be entitled was extracted from the Departmental Central Index based on postcodes.

  Mr. Woodward
  To ask the Secretary of State for Work and Pensions how many Winter Fuel Payment claim forms have been issued in 2003 in(a) Merseyside and (b) St. Helens; and how many claim forms have been submitted. [142716]

  Malcolm Wicks
  The number of Winter Fuel Payment claim forms issued so far this year to people who are likely to become eligible for a Winter Fuel Payment in Merseyside is 31,005, and of those 20,698 have been returned.

  The number of Winter Fuel Payment claim forms issued so far this year to people who are likely to become eligible for a Winter Fuel Payment in St. Helens is 2,133, and of those 1,547 have been returned.

  We are publicising the availability of Winter Fuel Payments and how to obtain a claim form. Those who need to claim for this winter have until 30 March 2004 to do so.
  Note:
  Information to identify those likely to be entitled was extracted from the Departmental Central Index based on post codes.

DEPUTY PRIME MINISTER

  Central Heating
  Jane Griffiths
  To ask the Deputy Prime Minister (1) what regulations are in place to ensure the safe(a) installation and (b) operation of domestic central heating systems, with particular reference to preventing pollution from oil leakages; [143068]

  (2) what quality standards apply to domestic central heating oil storage tanks in (a) metal and (b) plastic; [143069]

  (3) how many oil-fired domestic central heating installations there are in England. [143171]
  477W
  Phil Hope
  Evidence from the English House Condition Survey indicates that there are around 700,000 oil fired domestic heating installations in England.

  Part J of the Building Regulations covers the pollution risks associated with the installation of domestic oil fired central heating. Ways of meeting the requirement are conveyed in Approved Document J (2002) and include compliance with BS 5410 (1997 amended 2001): Code of Practice for Oil Firing—Part 1: installations up to 45 kW output capacity for space heating and hot water supply purposes, providing secondary containment where a risk assessment indicates this is necessary, and labelling storage systems with what to do if an oil spill occurs. BS 5410 refers to BS 799 Part 5 (1987): Specification for oil tanks for steel tanks and to the industry (OFTEC) standard OFS T100 (1995) Polyethylene oil storage tanks and bunds for distillate fuels. OFTEC has since published OFS T200 as their specification for steel tanks.

  The Control of Pollution (Oil Storage) (England) Regulations 2001, SI 2001:2954 provide minimum standards for domestic tanks where the storage capacity is in excess of 3,500 litres. There are no other regulations specifically covering the prevention of oil pollution from oil leakages arising from the operation of domestic oil fired central heating systems. However, it is a statutory offence to cause or knowingly permit the pollution of "controlled waters" (which includes ground and surface waters) under the Water Resources Act 1991.

  Regeneration
  Mr. Chaytor
  To ask the Deputy Prime Minister what guidance he has issued to English Partnerships in respect of the criteria used in determining allocations to assist housing-led regeneration schemes outside housing market pathfinder renewal areas; and if he will make a statement. [140941]

  Keith Hill
  English Partnerships' remit was set out in the Office of the Deputy Prime Minister's "Sustainable communities: building for the future" which was published earlier this year.

  EP's priorities for expenditure include:
  The 20 per cent. most deprived wards;
  The Coalfields programme;
  Urban Regeneration Company areas;
  Housing Market Renewal Fund pathfinder areas;
  Target areas for major housing growth in the South East of England;
  Strategic brownfield sites in or close to any of the above priority areas or in areas of housing pressure or housing abandonment;
  Other discretionary projects that promote wider regeneration benefits, particularly where EP can add significant value.

  English Partnerships is represented on all regional housing boards and takes their strategies into account when making decisions on specific projects in their regions.

  Local Government Reorganisation
  Mr. Gordon Prentice
  To ask the Deputy Prime Minister if he will amend the financial model used by the Boundary Committee in assessing the costs of 478W
  reorganising local government in the three northern regions to include (a) transitional, (b) opportunity and (c) ongoing costs of change. [142222]

  Mr. Raynsford
  No. The model used by the Boundary Committee looks at the "cost of being in business"—that is, the recurring costs that an authority must incur regardless of the level of service that it provides. Other costs and savings that will result from re-organisation are heavily dependent on the policy decisions of the elected representatives of individual councils and cannot, therefore, be used for modelling purposes without making assumptions about the decisions that will be taken by authorities that have yet to be created. The cost of being in business, being less dependent on such assumptions, provides a sounder basis on which to make comparisons.

  Mr. Gordon Prentice
  To ask the Deputy Prime Minister if he will make it his policy to collect centrally the costs of any reorganisation of local government; and if he will make a statement. [142225]

  Mr. Raynsford
  It is too early to say what the cost of and potential long-term savings from reorganisation might be. It will depend ultimately on the pattern of unitary authorities introduced following referendums and on decisions that the new unitary authorities take about their organisational structure. The Office of the Deputy Prime Minister will discuss how any costs will be funded with local authorities and the Local Government Association nearer the time.

  Housing Market Renewal
  Mr. Gordon Prentice
  To ask the Deputy Prime Minister when he will respond to the bids for resources from the market renewal pathfinders; and if he will make a statement. [142994]

  Keith Hill
  The nine market renewal pathfinders are each required to submit a strategic scheme to outline their proposals on how they plan to spend the Housing Market Renewal fund that they are bidding for and address the issues of low demand. These schemes are assessed by the Office of the Deputy Prime Minister in negotiation with the pathfinder and independently scrutinised by the Audit. Following successful negotiations and a satisfactory report from the Audit Commission the Office of the Deputy Prime Minister will allocate a proportion of the Housing Market Renewal Fund to a scheme.

  £125 million has already been allocated to the Manchester Salford pathfinder for implementation of its scheme over the next two and a half years. Strategic schemes from two other pathfinders, Newcastle Gateshead and Merseyside, have been received and are being assessed by the Office of the Deputy Prime Minister and the Audit Commission. Others are expected over the next few months.

  Regional Assemblies
  Mr. Gordon Prentice
  To ask the Deputy Prime Minister what plans he has to change the voting system in reorganised single tier authorities which may be established following the referendums on regional assemblies; and if he will make a statement. [142572]
  479W
  Mr. Raynsford
  The Office of the Deputy Prime Minister has no plans for reorganisation to affect the voting systems in English local government.

  Mr. Gordon Prentice
  To ask the Deputy Prime Minister what recent representations he has received from organisations in the North West urging the Government to extend the powers and functions of the proposed regional assembly; and if he will make a statement. [142798]

  Mr. Raynsford
  Since it was announced which regions would proceed first towards referendums on 16 June 2003 the Office of the Deputy Prime Minister has received four representations from organisations in the North West region asking the Government to extend the powers of the proposed regional assembly. In addition three individuals urged greater powers.

  Right to Buy Scheme
  Jon Trickett
  To ask the Deputy Prime Minister in what circumstances the Government will overrule a local council's decision as to a property's exemption from the right to buy scheme. [142909]

  Keith Hill
  My right hon. Friend the Deputy Prime Minister may overrule a Council's decision in relation to the Right to Buy in only one circumstance.

  Under paragraph 11 of Schedule 5 of the Housing Act 1985, a landlord may deny a social tenant's application to buy his or her home on the grounds that the dwelling is particularly suitable for occupation by the elderly, having regard to its location, size, design, heating system and other features, and if it was let to the tenant or a predecessor in title of his for occupation by a person who was aged 60 or more (whether the tenant or a predecessor or another person). In determining whether the dwelling is particularly suitable, no regard shall be had to the presence of any feature provided by the tenant or a predecessor in title of his.

  Paragraph 11(4) provides that the question shall be determined by the Secretary of State if the tenant applies to him within the period of 56 days from notification of the landlord's decision. If on receiving such an appeal, my right hon. Friend the Deputy Prime Minister considers that the property does not meet the criteria set out in paragraph 11, he can determine that the Right to Buy application should proceed. The main points on which my right hon. Friend the Deputy Prime Minister will normally expect to be satisfied before determining that a property is in fact particularly suitable for occupation by the elderly are set out in Department of the Environment Circular 13/93. They are that:
  there should be easy access on foot to the dwelling; access is unlikely to be regarded as easy, in an area which is not hilly, if it is necessary to climb three or more steps (in addition to the threshold) and there is no handrail
  the accommodation should be on one level
  in the case of a flat above ground floor level there should be access by lift
  there should be no more than two bedrooms
  480W
  there should be adequate arrangements for heating the living room and at least one bedroom
  the dwelling should be located reasonably conveniently for shops and public transport, having regard to the nature of the area.

  My right hon. Friend the Deputy Prime Minister will also consider other features to which his attention may be drawn.

  Jon Trickett
  To ask the Deputy Prime Minister how many local council decisions on exemption from the right to buy scheme he has overruled since 1997; and if he will make a statement. [142910]

  Keith Hill
  Secure tenants denied the Right to Buy by their landlords under paragraph 11 of Schedule 5 of the Housing Act 1985, on the grounds that their homes are particularly suitable for occupation by elderly persons, may appeal to my right hon. Friend the Deputy Prime Minister. The numbers of such appeals determined since 1997 are set out in the table (the figures do not include invalid or withdrawn appeals):

  Appeals accepted

  Appeals refused

  Total

  1997

  46

  106

  152

  1998

  53

  121

  174

  1999

  70

  150

  220

  2000

  55

  120

  175

  2001

  53

  179

  232

  2002

  71

  243

  314

  2003 (as at 4 December)

  112

  303

  415

  Smoke Alarms
  Mr. Cawsey
  To ask the Deputy Prime Minister what plans he has to make smoke alarms in rented property a legal requirement. [142776]

  Phil Hope
  The Housing Bill 2003 provides that a local housing authority can impose as a condition for a house in multiple occupation to be licensed under Part 2, or for any house subject to selective licensing under Part 3 of the Bill, that the property is equipped with smoke alarms. Schedule 4 of the Bill provides that it is mandatory condition that where smoke alarms are installed they are properly maintained.

  Tenancy Deposit Scheme
  Mr. Steen
  To ask the Deputy Prime Minister when he will respond to the Select Committee on the Office of the Deputy Prime Minister's recommendation that a tenancy deposit scheme should be introduced; and if he will make a statement. [142866]

  Keith Hill
  The government published its response to the Select Committee on 10 November 2003.
  481W
  Mr. Steen
  To ask the Deputy Prime Minister if he will establish a fast track procedure to enable tenants' deposits withheld by private landlords after the termination of their contract to be speedily returned. [142867]
  482W
  Keith Hill
  As indicated by the government's response to the Select Committee on the Housing Bill of 10 November 2003, we are considering detailed proposals.

EDUCATION AND SKILLS

  Modern Apprenticeships
  Mr. Jim Cunningham
  To ask the Secretary of State for Education and Skills what steps he is taking to encourage the take-up of apprenticeships. [141885]

  Mr. Ivan Lewis
  [holding answer 8 December 2003]The Government are wholly behind Modern Apprenticeships as a high quality work-based learning option for young people. We are fully committed to implementing the reforms recommended by the Modern Apprenticeships Advisory Committee under Sir John Cassels, which included a major boost to the marketing of MAs, and to more recent Skills Strategy announcements. Under Sir Roy Gardner a business-led Modern Apprenticeship Task Force is taking a key role in promoting MA to employers and thereby contributing to increased take-up. We have adopted a PSA target for 2004 of 28 per cent. of young people entering a Modern Apprenticeship before the age of 22. We have made sufficient resources available to ensure that we meet this target and are on course to achieve it.

  LEA Staff (Assault)
  Mr. Jenkins
  To ask the Secretary of State for Education and Skills what plans he has to introduce a

  Maintained primary, secondary and all special schools: number of permanent exclusions

  1999/2000

  2000/01

  2000/02

  Number

  Percentage1

  Number

  Percentage1

  Number

  Percentage1

  Portsmouth, South constituency

  Primary2

  0

  0.00

  0

  0.00

  0

  0.00

  Secondary2

  9

  0.17

  10

  0.19

  4

  0.07

  Special3

  0

  0.00

  0

  0.00

  0

  0.00

  Total

  9

  0.07

  10

  0.08

  4

  0.03

  England

  Primary2

  1,226

  0.03

  1,436

  0.03

  1,451

  0.03

  Secondary2

  6,713

  0.21

  7,305

  0.23

  7,741

  0.24

  Special3

  384

  0.40

  394

  0.41

  343

  0.36

  Total

  8,323

  0.11

  9.135

  0.12

  9,535

  0.12

  1 Number of permanent exclusions expressed as a percentage of school population.

  2 Includes middle schools as deemed.

  3 Includes maintained and non-maintained special schools.

  Source:

  Annual Schools' Census

  Higher Education
  Mr. Edwards
  To ask the Secretary of State for Education and Skills what assessment he has made of the paper by the hon. Members for The Wrekin (Peter Bradley) and for Southampton, Test (Dr. Whitehead) on the funding of higher education; and if he will publish his assessment. [142539]

  Alan Johnson
  I shall be writing to my hon. Friends concerning their proposal. A copy of this letter will be placed in the House Library in due course.
  484W
  national incident reporting system for recording physical assaults on (a) teachers and (b) other local education authority staff.

  Mr. Ivan Lewis
  Employers are already required to report to the Health and Safety Executive incidents, including ones resulting from acts of physical violence, which cause injuries to staff resulting in more than three days' absence from work. Local education authorities and other employers of school staff also have their own reporting arrangements. The Government have no plans to add to these systems.

  Civil Servants
  Tim Loughton
  To ask the Secretary of State for Education and Skills how many senior civil servants in his Department are disabled expressed in actual terms and as a percentage of FTE staff. [143067]

  Mr. Charles Clarke
  My Department has two senior civil servants who have declared a disability. This equates to 1.3 per cent. of FTE staff.

  School Exclusions
  Mr. Hancock
  To ask the Secretary of State for Education and Skills how many children have been excluded from(a) primary, (b) secondary and (c) special schools in (i) Portsmouth, South and (ii) England in each year since 1999–2000. [141348]

  Mr. Ivan Lewis
  The information requested is shown in the table.

  Mr. Edwards
  To ask the Secretary of State for Education and Skills if he will meet the vice chancellors of(a) South Bank University, (b) University of Glamorgan and (c) University College Wales, Newport to discuss the future of higher education. [142540]

  Alan Johnson
  I have frequent meetings with vice chancellors in which our proposals for the future of higher education are discussed. However, as a devolved matter, issues related to higher education institutions in
  485W
  Wales such as the University of Glamorgan and University College Wales are a matter for the Welsh Assembly.

  Jeff Ennis
  To ask the Secretary of State for Education and Skills (1) how many universities he expects will be in a position to offer bursaries to students from poorer backgrounds under the Government's new higher education funding proposal; [142902]

  (2) what his estimate is of the percentage of students from poorer backgrounds who could qualify for a bursary under the new higher education funding proposals. [142956]

  Alan Johnson
  We are considering and discussing the contents of access agreements and the duties of the Office for Fair Access, and will make a statement in due course.

  Chris Grayling
  To ask the Secretary of State for Education and Skills what grants OFFA will be involved in distributing and on what basis; and where its funding will come from. [143072]

  Alan Johnson
  We have no plans for the Office for Fair Access to distribute any grants. It will be a regulatory body, not a funding body.

  Chris Grayling
  To ask the Secretary of State for Education and Skills whether it is his policy to intervene to prevent universities charging the full top-up fee to its students. [142516]

  Alan Johnson
  We propose that all universities will be able to charge variable fees of up to 3,000 from academic year 2006/07, provided they have an Access Agreement approved by the Office for Fair Access.

  Annabelle Ewing
  To ask the Secretary of State for Education and Skills what representations he has received from(a) student representative bodies and (b) the university sector in Scotland on the subject of top-up fees. [142730]

  Alan Johnson
  My right hon. Friend has received a number of representations from various stakeholders in Scotland on the subject of variable fees.

  Annabelle Ewing
  To ask the Secretary of State for Education and Skills what written representations he has received from the First Minister of Scotland on the subject of top-up fees. [142765]

  Alan Johnson
  [holding answer 8 December 2003]My right hon. Friend has had a number of discussions with the First Minister of Scotland on the subject of variable fees and other higher education issues.

  Mr. Alan Williams
  To ask the Secretary of State for Education and Skills whether he plans to link the threshold for repayment of tuition fees to(a) the cost of living and (b) average earnings. [143176]
  486W
  Alan Johnson
  We will set out the Government's policies on repayment thresholds for student loans in the new year in the Regulatory Impact Assessment, which will set out the financial implications of the policies announced in the Higher Education White Paper.

  Helen Jackson
  To ask the Secretary of State for Education and Skills what consultation there has been with mature entrants to university on the impact of variable tuition fees. [142601]

  Alan Johnson
  The Department has received a number of representations from a variety of sources following the publication of the White Paper. We have taken steps to stimulate debate about the future of higher education among all interested groups. We want to encourage able students of all ages to take advantage of a university education. Under our proposals for variable tuition fees, every graduate would repay according to their personal financial circumstances regardless of their age.

  Mr. Gordon Prentice
  To ask the Secretary of State for Education and Skills how many universities have indicated their intention to waive fees for students embarking on(a) science, (b) engineering and (c) mathematics degrees; and if he will make a statement. [142785]

  Alan Johnson
  It will be for higher education institutions themselves to decide what level of fees they set for each of their courses from 2006/07 onwards, between £0 and £3,000. I would expect them to consider a range of factors in doing so, including the likely impact of their decisions on demand by students for their courses.

  Student Loans
  Mr. Alan Williams
  To ask the Secretary of State for Education and Skills what proportion of average earnings the threshold for repayment of a student loan was at(a) the time it was introduced and (b) the latest date for which figures are available. [143175]

  Alan Johnson
  The first point at which borrowers could be required to repay income contingent loans was April 2000. At that time the threshold of £10,000 was 44 per cent. of average earnings (£22,4751). In April 2003 the threshold (£10,000) was 40 per cent. of average earnings (£25,1341).
  1 As used in the setting of the repayments threshold for mortgage style student loans.

TRADE AND INDUSTRY

  European Insolvency Directive (Legal Action)
  Mr. Woodward
  To ask the Secretary of State for Trade and Industry what the Government's estimate is of the cost of defending the legal action that the Iron and Steel Trades Confederation and Amicus brought in relation to the implementation of Article 8 of the 1980 European Insolvency Directive. [142502]

  Malcolm Wicks
  I have been asked to reply.
  487W
  At such an early stage in the proceedings, it is not possible to provide an estimate of the costs of defending the action brought by ISTC and Amicus.

  Audit
  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what discussions she has had with(a) UK firms and (b) representatives of the accountancy profession on the decision to raise the audit exemption threshold to £5.6 million; and if she will publish the minutes of such meetings. [140884]

  Ms Hewitt
  On 11 July 2003 the Government published a consultation document on the proposal to increase the audit exemption threshold. The consultation document was sent to some 870 organisations, businesses and individuals, including UK firms and representatives of the accountancy profession. There were 90 responses of which 35 were from UK firms and II from bodies representing the accountancy profession. A summary of the responses is available on the Department's website at http://www.dti.gov.uk/cld/ published.htm

  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what estimate she has made of the change in cost to UK businesses of the reduction in the timescale for rotation of audit partners from seven to five years. [140885]

  Ms Hewitt
  The regular rotation of audit partners plays an important role in upholding auditor independence. The Government welcomed the recommendation by the Coordinating Group on Audit and Accounting Issues (CGAA) last January to reduce the timescale for the rotation of the lead audit partner from seven to five years. The professional audit bodies implemented the recommendation immediately through revised guidance. They pointed out that audit firms would incur some costs in terms of familiarisation and planning (which would vary according to size of firm) in moving to the new five year cycle, but agreed with the CGAA that, as the requirements only relate to firms that are auditing listed and public interest entities, the benefits in terms of safeguarding auditor independence from the client outweighed any such transitional costs.

  Meanwhile the Auditing Practices Board have drafted a new ethical standard which formalises the reduction from seven to five years, and are currently consulting on this and other ethical standards.

  Business Employment
  Mr. Woodward
  To ask the Secretary of State for Trade and Industry what estimate she has made of the number of businesses employing more than(a) five people, (b) 50 people, (c) 100 people and (d) 250 people in St. Helens in each year since 1992. [141306]

  Ruth Kelly
  I have been asked to reply.

  The information requested falls within the responsibility of the National Statistician, who has been asked to reply.
  488W
  Letter from Len Cook to Mr. Shaun Woodward, dated 10 December 2003:

  As National Statistician, I have been asked to reply to your recent question about the number of businesses employing more than (a) five people, (b) 50 people, (c) 100 people and (d) 250 people in St. Helens in each year since 1992. (141306)

  The attached table gives the information you requested for 2003, but only the total number of businesses is available for earlier years.

  VAT-based enterprises in St. Helens 1992–2003

  Employment size band

  Year

  Total

  <5

  5–49

  50–99

  100–249

  >250

  1992

  3,055

  —

  —

  —

  —

  —

  1993

  2,985

  —

  —

  —

  —

  —

  1994

  2,820

  —

  —

  —

  —

  —

  1995

  2,815

  —

  —

  —

  —

  —

  1996

  2,730

  —

  —

  —

  —

  —

  1997

  2,755

  —

  —

  —

  —

  —

  1998

  2,790

  —

  —

  —

  —

  —

  1999

  2,780

  —

  —

  —

  —

  —

  2000

  2,775

  —

  —

  —

  —

  —

  2001

  2,750

  —

  —

  —

  —

  —

  2002

  2,715

  —

  —

  —

  —

  —

  2003

  2,675

  1,765

  820

  40

  25

  20

  Notes:

  Employment size bands not published prior to 2003.

  Counts are of enterprises with main address in St. Helens.

  Counts are rounded to the nearest five to avoid disclosure.

  Source:

  Size Analysis of UK Businesses (ONS)

  Disadvantaged Communities
  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry what targets her Department has set for creating more enterprise in disadvantaged communities; and what progress has been made towards these targets. [143002]

  Nigel Griffiths
  The target is to narrow the gap between VAT registrations in the 20 per cent. most and 20 per cent. least deprived wards in England by one percentage point per year.

  The figures for the last two years for which data are available illustrate that the gap between the two VAT registration rates has narrowed and meets the target, (see Figure 1).

  Figure 1: VAT registrations per 10,000 resident adult population, English wards only

  20 per cent. most deprived wards

  20 per cent. Least deprived wards

  2000

  31

  49

  2001

  30

  46

  Sources:

  ONS Inter Departmental Business Register (special analysis), the Index of Multiple Deprivation 2000, and population estimates from the Office for National Statistics

  Between 2000 and 2001, the gap in the rates narrowed by one percentage point and therefore progress is on track.

  Further details on this target can be found in the DTI Autumn Performance Report (ref. CM 6067), published on Friday 5 December 2003 and on the DTI website shortly.

  Hunting
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry what estimate her Department has made of the(a) number of small businesses which are dependent on hunting for their survival and (b) number of jobs that would be lost in the event of a ban on hunting with hounds. [142830]

  Alun Michael
  I have been asked to reply.

  There are many businesses providing goods and services for the whole range of rural activities. No reliable estimate is possible of how many such businesses are so dependent on hunting that they would fail if hunting is regulated or banned. The Burns Report (paragraph 3.8) said
  "Hunting, as an economic activity, is so small as to be almost invisible in terms of national aggregates."

  The Burns Report, paragraph 3.37, Table 3.5, estimated employment dependent on hunting as the following full-time equivalents:

  Number

  Direct employment by the hunts

  710

  Direct employment by the followers

  1,497

  Indirect employment

  1,992

  Individual employment

  1,525

  Total

  5,724

  Evidence subsequently presented to the public hearings held in Portcullis House suggested that Burns' estimates were too high and that the number of jobs associated with hunting was much smaller.

  Insurance Liability
  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry what discussions she has had within the last year with representatives of the insurance industry on the limitations of insurability in respect of(a) nuclear issues and (b) climate change issues; and if she will make a statement. [141213]

  Nigel Griffiths
  DTI Ministers have not had any discussions with the insurance industry on the limitations of insurability in respect of climate change issues.

  With regard to insurability in respect of nuclear issues, UK nuclear operators have a statutory obligation to cover their liability by insurance. DTI officials have maintained close contact with the insurance industry over the last 12 months and are satisfied that sufficient cover is available.

  Regulations (Consultation)
  Brian Cotter
  To ask the Secretary of State for Trade and Industry what proportion of regulations introduced by the Department have been subject to a consultation period of less than 12 weeks since the introduction of the Code of Practice on Consultations. [142483]

  Nigel Griffiths
  The Cabinet Office Code of Practice on Written Consultation came into effect on 1 January 2001. In the period 1 January 2001 to 31 December 2002,490W
  the Department of Trade and Industry has published 133 consultations covered by the Code, of these consultations 103 lasted 12 weeks.

  Renewable Energy
  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry what assessment she has made of the comparative costs of(a) each renewable form of electricity generation and (b) energy efficiency measures in reducing carbon dioxide emissions; and if she will make a statement. [140942]

  Mr. Timms
  The Department has published estimates of the cost of electricity generation from a variety of forms of renewables and the comparative cost of energy efficiency measures in reducing carbon dioxide emissions. These are contained in a report published in February 2002 available at: www.dti.gov.uk/energy/ greenhousegas/index.shtml.

  The Performance and Innovation Unit at the Cabinet Office also published similar estimates in its 2001 Energy Review. These are available at: www. number-10.gov.uk/su/energy/1.html.

  The energy White Paper published in February 2003 committed the Government to putting the UK on a path to reducing carbon dioxide emissions by 60 per cent. by 2050. Improvements in energy efficiency and increasing the share of renewables in generation will both be important in achieving this objective. The White Paper sets an objective to double the recent rate of improvement in energy efficiency and an aspiration to achieve a 20 per cent. share for renewables in 2020, double the level of the Renewables Obligation set for 2010.

  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what estimate she has made of the cost to public funds of wind turbine construction in the UK to 2010. [140955]

  Ms Hewitt
  To date, the Government have committed £117 million to support early offshore windfarm development. No estimate has been made of the level of funding that may be needed to support future development in this area, but we expect industry to respond to the market for wind turbines created by the Renewables Obligation.

  No direct support is provided for onshore windfarm development except for some small household or community installations under the Clear Skies scheme.

  Mr. Stephen O'Brien
  To ask the Secretary of State for Trade and Industry what estimate she has made of the number of new wind turbines which will be built in the UK by 2010. [140956]

  Ms Hewitt
  The Government have set a target that 10 per cent. of electricity in the UK should come from renewable sources by 2010. However, no targets have been set for individual technologies, such as wind power. Decisions on which technologies to bring forward are left to the industry, consistent with the
  491W
  Government's policy of an open and competitive energy market. We expect the industry to respond to the market for renewables (including wind) created by the Renewables Obligation.

  However, it is acknowledged that electricity generated from wind turbines— both onshore and offshore—will make the largest contribution to the overall target. While we do not publish technology forecasts, it is estimated that to supply 7 to 8 per cent. of our electricity generation by wind turbines by 2010, which is what is likely to be required to achieve our 10 per cent. target, would require in the range of 3,000 to 5,000 turbines, assuming a mix of onshore and offshore devices. There are currently just over a thousand turbines within the UK.

  Small and Medium-sized Enterprises
  Malcolm Bruce
  To ask the Secretary of State for Trade and Industry what assessment her Department has made of the overall productivity of small and medium enterprises since 1997; what the gross value added per employee was in(a) SMEs and (b) large firms in each year since 1997; and if she will make a statement. [143003]

  Nigel Griffiths
  A measure of productivity is gross value added per employee. Data on gross value added per employee are only available on a comparable basis from 1999 onwards. The latest data available are for 2001 (see Figure 1).

  Figure 1: Approximate Gross Value Added per employee1, UK, 1999 to 2001

  1999

  2000

  2001

  SMEs

  31,000

  32,000

  34,000

  Large firms

  34,000

  34,000

  35,000

  1 GVA is calculated at basic prices only. Public administration, education, health, financial intermediation and real estate have been excluded. There have been slight changes to the ABFs coverage over the period.

  Source:

  SBS, based on a special analysis from the ONS Annual Business Inquiry.

  Between 1999 and 2001, the productivity of SMEs has increased at a faster rate than the productivity of large firms, and the gap in productivity has therefore narrowed. In 1999, SME productivity was 93 per cent. of large firms productivity. In 2000, it had risen to 94 per cent. By 2001, SMEs were 96 per cent. as productive as large firms.

  Industrial Diseases (Solicitors' Fees)
  Paddy Tipping
  To ask the Secretary of State for Trade and Industry how much has been paid in fees to(a) solicitors and (b) handling agents in respect of compensation for (i) chronic bronchitis and emphysema and (ii) vibration white finger. [142013]

  Mr. Timms
  [holding answer 4 December 2003]As of 23 November 2003 the total 217 million has been paid in solicitors' costs for respiratory disease claims and 80 million for Vibration White Finger claims.

  The claim handlers, IRISC, are not made aware of the total costs paid to handling agents for processing these claims.

  UK/EU Trade
  Mr. Bellingham
  To ask the Secretary of State for Trade and Industry pursuant to her Answer of 2 December 2003,Official Report, column 24W, if she will make a statement on the goods trade deficit with the European Union for (a) the last year for which figures are available and (b) the previous six years. [142857]

  Mr. Mike O'Brien
  According to figures published by the Office for National Statistics, the UK goods trade deficit with the European Union in 2002 amounted to £20.2 billion. Figures for the previous six years were as follows:

  UK goods trade deficit with the European Union 1996—2001

  £billion, current prices

  1996

  -4.9

  1997

  .4.5

  1998

  -6.3

  1999

  -8.4

  2000

  -5.3

  2001

  -11.7

  Note:

  To some extent the deficit reflects the relative strength of the UK economy

  Source:

  Monthly Review of External Trade Statistics, ONS

TREASURY

  Household Debt
  Malcolm Bruce
  To ask the Chancellor of the Exchequer what the average household(a) debt per quarter and (b) monthly income was in each quarter since 2000, broken down by region. [143124]

  Ruth Kelly
  The information requested falls within the responsibility of the National Statistician, who has been asked to reply.

  Letter from Len Cook to Malcolm Bruce dated 10 December 2003:

  As National Statistician I have been asked to reply to your recent question on a regional breakdown of average household debt per quarter and household monthly income.

  There are no quarterly estimates of household debt available at regional level. However, the following table shows national estimates of average debt levels and monthly incomes for households in each year since 1997. These estimates are derived from the national accounts series for the combined household and non-profit institutions serving households (NPISH) sectors, and are taken from an answer to a previous written question (Official Report, 16 July 2003, column 303W).

  £

  Year

  Average Household Debt (£) during year1

  Average Household Income per month2

  1997

  24,500

  1,950

  1998

  26,000

  2,000

  1999

  28,000

  2,100

  2000

  30,600

  2,200

  2001

  33,500

  2,350

  2002

  37,500

  2,400

  1 Rounded to nearest £500

  2 Rounded to nearest £50

  493W
  ONS does not produce monthly or quarterly data for income by region. The most recent annual estimates for total household income and gross disposable household income for the countries and regions of the UK are available for 1995–1999. Figures at regional, sub-regional and local area levels (NUTS 1, 2 and 3 respectively) were published in a news release on 26 March 2002, available on the National Statistics website at: http://www. statisties.gov.uk/pdfdir/reg0302.pdf

  Income Tax
  Lynne Jones
  To ask the Chancellor of the Exchequer what the average cost of collecting income tax was as a percentage of the amount collected in 2002–03; and what the average administrative cost of paying tax credits has been as a percentage of the amount paid. [142708]

  Dawn Primarolo
  The cost/yield ratio for collecting income tax and the cost of administering tax credits as a percentage of the amount paid will be shown in the Inland Revenue Annual Report for 2002–03, to be published shortly.

  Mr. Kaufman
  To ask the Chancellor of the Exchequer if he will provide an estimate of the additional revenue that would accrue to the Exchequer annually if the top rate of income tax were 50 per cent. [142920]

  Dawn Primarolo
  I refer my hon. Friend to table 1.6 "Direct effects of illustrative tax changes" on the Inland Revenue website www.inlandrevenue.gov.uk/stats/tax_ expenditures/g_t06_1.htm. The figures exclude any estimate of behavioural response to the tax change.

  Lorry Road User Charge
  Mr. Damian Green
  To ask the Chancellor of the Exchequer (1) what the proposed(a) minimum and (b) maximum toll charge is under the Lorry Road User Charge scheme; [142913]

  (2)what the estimated (a) capital and (b) administrative cost is of the Lorry Road User Charge scheme; [142914]

  (3)what the estimated cost to British hauliers is of the planned Lorry Road User Charge. [142915]

  John Healey
  The proposed rates of Lorry Road User Charge have not yet been set. We are still considering a variety of options for how the scheme might work and have yet to go to the market to invite bids, so the estimated capital and administrative costs are not yet known. The Government are committed to reducing fuel duty for those hauliers who pay the Lorry Road User Charge so that overall they will pay no more tax as a result of the introduction of the charge. In our proposals for the charge, we have the broad support of the main haulage trade associations.

  Research and Development Tax Credit
  Mr. Robathan
  To ask the Chancellor of the Exchequer how many research and development tax credit claims for the year ended 31 March 2002 are being investigated. [143350]

  Dawn Primarolo
  Records of the number of inquiries into corporation tax returns do not separately highlight the number of those returns which include a claim for the R&D tax credit.
  494W
  Mr. Robathan
  To ask the Chancellor of the Exchequer how many applications for research and development tax credit for the year ended 31 March are awaiting a result of inquiries into those or previous applications. [143352]

  Dawn Primarolo
  Records of the number of inquiries into corporation tax returns do not separately highlight the number of those returns which include a claim for the R&D tax credit.

  Tax Avoidance
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what plans he has to propose legislation to require companies to register details of tax avoidance schemes with the Inland Revenue. [142706]

  Dawn Primarolo
  The Government have made no specific proposals along these lines, but will keep under consideration its overall approach for tackling tax avoidance, paying attention to the experiences of other fiscal authorities.

  Tax Credits
  Mr. Drew
  To ask the Chancellor of the Exchequer how many letters, phone calls and direct contacts he has received from(a) hon. Members and (b) members of the public on the action to be taken in the case of overpayment of tax credits. [142256]

  Dawn Primarolo
  The records kept of written correspondence, calls received and direct contacts are not classified in a way that permits the extraction of these numbers.

  Mr. Webb
  To ask the Chancellor of the Exchequer how many claims for interim payments relating to child and working tax credit claimants have been made in each month since the tax credits were introduced; how many payments have been made; and if he will estimate the(a) average and (b) total value of these payments. [143077]

  Dawn Primarolo
  The number of individual same day interim payments made through local offices to claimants of child and working tax credits in each month is shown in the following table. Also shown is the number of automatic direct payments made centrally to tax credit claimants in each month.

  2003

  Number of same day interim payments made through local office

  Number of automatic direct payments (million)

  April

  25,000

  8.5

  May

  175,000

  9

  June

  75,000

  9.5

  July

  25,000

  11.5

  August

  10,000

  10.5

  September

  8,000

  11

  October

  6,000

  11.5

  November

  6,000

  11

  Notes:

  1. The numbers of interim payments to July are rounded to the nearest 25,000, and for later months to the nearest thousand. The numbers of automatic direct payments are rounded to the nearest 0.5 million.

  2. No figures are available for the number of claims for interim payments that have been refused.
  495W
  It is estimated that in excess of £100 million tax credits were paid out by the end of November using the interim payments system.

  VAT
  Malcolm Bruce
  To ask the Chancellor of the Exchequer how many enterprises were registered for VAT at the start of each year since 1997; and if he will list(a) the number of enterprises registering for VAT, (b) the number of businesses deregistering from VAT, (c) the number of closures involving bankruptcy or insolvency proceedings and (d) the net gain or loss in the stock of registered enterprises for (i) each year since 1997 and (ii) each month in 2003 broken down by (A) standard industrial classification and (B) region. [143123]

  John Healey
  HM Customs and Excise do not produce detailed statistics of VAT registrations or de-registrations or of insolvencies. The statistics requested at(a), (b) and (d) are published by the Small Business Service; the statistics requested at (c) are published by the Department of Trade and Industry. [More information is available on their respective websites at www.sbs.qov.uk and www.dti.gov.uk].

HOME DEPARTMENT

  Community Punishments
  Vera Baird
  To ask the Secretary of State for the Home Department what financial resources have been allocated for community punishments in the current financial year; and what proportion is directed towards women offenders. [141624]

  Paul Goggins
  Resources are not specifically allocated to local probation areas for community punishment. The Boards receive a general allocation that they are permitted to spend on the range of activities they carry out. Financial information collected from the 42 Boards indicate that they collectively will spend about £75 million on community punishment orders in 2003–04 and a further £20 million on community punishment and rehabilitation orders. The number of women offenders in receipt of community punishment orders is estimated at about 12 per cent. of the total.

  Criminal Cases Review Commission
  Mr. McNamara
  To ask the Secretary of State for the Home Department how many referrals to the Royal Courts of Justice Citizens Advice Bureau Miscarriage of Justice Project have been made by the Criminal Cases Review Commission; and what the working policies and practices of the Commission are for a referral to the project. [141807]

  Paul Goggins
  The Commission does not refer cases to the Royal Courts of Justice Citizens Advice Bureau. However when sending an applicant the statement of reasons, which accompanies the Commission's decision to refer his or her case to the Court of Appeal, a copy of the Royal Courts of Justice Miscarriages of Justice Project leaflet is enclosed. The provision of the Royal Courts of Justice Citizens Advice Bureau's service is also 496W
  referred to in the letter, which accompanies the statement of reasons. It is then up to the individual to decide whether he or she wishes to utilise the service.

  Mr. McNamara
  To ask the Secretary of State for the Home Department how many applications for permission to judicially review a decision not to refer have been made against the Criminal Cases Review Commission; and of those how many(a) were refused leave by a single judge on the papers, (b) refused leave by the court at oral hearings and (c) were granted leave by either the single judge or the court. [141808]

  Paul Goggins
  A total of 67 applications for judicial review have been made. Of these 26 applications for permission for a judicial review have been refused by the Single Judge on the papers. These applications were not renewed. Twenty-four applications have been refused at oral hearing.

  Seven applications have been granted permission, of which one was remitted to the Commission for a further review and two await a decision.

  Six cases were concluded by the consent of the parties and four applications for permission are currently waiting for a decision by the Single Judge or on oral renewal to the full court.

  Mr. McNamara
  To ask the Secretary of State for the Home Department how many re-applications for review of alleged wrongful conviction upon indictment have been received by the Criminal Cases Review Commission in each of the last six years; how many of those have been reinvestigated and completed; and of those how many have(a) resulted in a decision not to refer and (b) been referred. [141817]

  Paul Goggins
  Data are available only for the last three complete years and there have been 25, 52 and 79 re-applications in each of these years. There have been 102 re-applications in the financial year to 30 November 2003.

  One hundred and eighty-four of these re-applications have been completed; 176 of these upheld the original decision and eight re-applications have been referred to the appropriate court of appeal.

  Mr. McNamara
  To ask the Secretary of State for the Home Department how many applications for review of alleged wrongful convictions in Northern Ireland have been received by the Criminal Cases Review Commission; and of those how many(a) were ruled ineligible, (b) were reviewed and a decision not to refer made and (c) were reviewed and referred. [141820]

  Paul Goggins
  The Commission has received a total of 93 applications from Northern Ireland, of which 15 are still open, 14 were closed as ineligible, 52 were closed with a decision not to refer and 12 were referred.

  Criminal Justice System (Public Confidence)
  Mr. Allen
  To ask the Secretary of State for the Home Department what estimate he has made of recent trends in public confidence in the criminal justice system in the Nottinghamshire Criminal Justice Board area; and if he will make a statement. [140597]
  497W
  Paul Goggins
  Responses to the British Crime Survey (BCS) on confidence in Nottinghamshire indicate that confidence in bringing offenders to justice has fallen from 36 per cent. in 2001/2002 to 28 per cent. in 2002–03.

  Improving confidence in the Criminal Justice System is a key priority for both the National Criminal Justice Board and Local Criminal Justice Boards. Nottinghamshire and other Local Criminal Justice Boards have prepared action plans to address local confidence issues. These plans include actions to provide better services to victims and witness, to address the priorities of local communities and to improve communications with the public.

  Identity Cards
  Lynne Jones
  To ask the Secretary of State for the Home Department for what period of time he proposes that identity cards should remain valid. [140510]

  Beverley Hughes
  We expect the validity period of the card to be 10 years.

  However, in order to ensure that the cards, which incorporate technology features such as a microchip function, are reliable, it may be necessary to replace the cards after five years.

  The costs estimates which my right hon. Friend the Home Secretary set out in Command Paper 6020 were based on the assumption that this automatic replacement card would be provided free of charge.

  The scheme would also include an allowance for having a lifetime card validity period for those who have been in retirement for some time.

  Foreign nationals coming to the United Kingdom for more than three months would be issued with a card valid for up to five years depending on the conditions of their clearance. For foreign nationals granted permanent residence the validity period for their cards would be on the same basis as that for British citizens.

  Sir Teddy Taylor
  To ask the Secretary of State for the Home Department what estimate he has made of the cost of introducing identity cards in the UK; and what assessment he has made of the likely benefits. [141327]

  Beverley Hughes
  [holding answer 8 December 2003]My right hon. Friend the Home Secretary announced on 11 November that the Government have decided to begin the process of introducing a national identity cards scheme following the consultation paper published in July 2002.

  The Government are determined to ensure that the development of a national identity cards scheme is managed to the highest standards, and that the major business change and IT challenges which we face are dealt with effectively. A Programme Board has been established, chaired by the Home Office, to co-ordinate and drive forward the different elements of the identity cards scheme. Progress at every stage will be monitored and reviewed as further decisions are taken during the implementation. Before decisions are taken on implementation, there will be an intensive phase of feasibility assessment and prototyping so that decision making is soundly based and risks in the programme are kept to a minimum. Once the Office of Government
  498W
  Commerce (OGC) has confirmed that the programme is ready to proceed, by means of an OGC Gateway Zero review, we will publish draft legislation to enable the scheme to be introduced.

  Set up costs for the first three years have been estimated at £186 million. Costs thereafter will be covered by charges. It would not be appropriate to publish more detailed information while we prepare options for procurement and implementation of the identity cards scheme. However, we are continuing to work with potential suppliers and partners to ensure estimates are accurate, realistic and deliverable.

  An identity card scheme will provide a number of benefits including to help deter and prevent illegal immigration and illegal working and to combat identity fraud enhancing our capability to counter terrorism and serious and organised crime. Identity cards will make it easier to prove entitlement to public services and faster to prove one's own identity for public or private transactions, enabling individuals to assert their identity and that they belong here as well as protecting an individual's own identity from identity fraud.

  John Thurso
  To ask the Secretary of State for the Home Department if he will list the public services for which devolved administrations have responsibility and which he envisages will be included in the compulsory card scheme. [141174]

  Beverley Hughes
  [holding answer 2 December 2003]The powers and responsibilities of each devolved Administration are governed by the Acts of Parliament which established them and by any relevant Transfer of Functions Orders and post devolution Acts.

  It is intended that the draft Identity Cards Bill will include enabling powers so that in the future access to specified public services could be linked to the production of a valid identity card. In the case of services for which the devolved Administrations are responsible, decisions on whether the identity card should be required for access to these services would be a matter for them.

  Ministerial Responsibilities
  Sue Doughty
  To ask the Secretary of State for the Home Department for what reason a single Minister has responsibility for immigration, asylum and terrorism and their implications for Government policy and strategy. [142903]

  Beverley Hughes
  My right hon. Friend the Home Secretary has overall responsibility for immigration, asylum and counter-terrorism issues as part of his ministerial portfolio. On these issues, I provide in-depth support and scrutiny.

  All ministerial appointments are the responsibility of the Prime Minister.

  Pornographic Websites
  Charles Hendry
  To ask the Secretary of State for the Home Department what legal restrictions are in place to ensure that children under the age of 18 do not have access to pornographic internet sites. [140652]
  499W
  Paul Goggins
  The same legal restrictions apply to the publication of pornographic material on-line as they do off-line.

  The Obscene Publications Act 1959 makes it an offence to publish any article which is considered to be obscene; that is, an article which, in the view of the court, tends to "deprave and corrupt" a person likely to see, hear or read it. The Act has been successfully applied to material published via the internet although enforcement is more difficult because the publisher or website operator is frequently based abroad and beyond UK jurisdiction. In addition, the taking, making, distribution, possession or publication of indecent photographs or pseudo photographs of children are all serious criminal offences.

  Given the nature of the internet, we believe that it is not possible to prevent children under the age of 18 having access to pornographic internet websites by legislative means. However, there are ways of reducing the risk of children accessing such material by practical measures and raising awareness.

  For example, a wide range of filtering software packages have been developed to enable schools and parents to restrict the types of websites to which their children have access. The Task Force on Child Protection on the internet, a multi-agency group which was established in March 2001, has set up a sub-group on rating and filtering, to consider how to evaluate and provide advice in the long term on filtering and other safety software products. The sub-group has made an initial report to the Task Force and will report again in due course.

  At the beginning of the year, the Task Force published a single document covering separate models of good practice aimed at providers of chat services, instant messaging and web services, including providers of adult content. We consider that these models are a significant step forward in making the internet a safer place for children. As far as we know they are unique. They are voluntary but were presented to the industry with a strong recommendation that they be used. We are confident that they will be supported, by the major service providers represented on the Task Force and by the Internet Service Providers Association. The effectiveness of the models will be evaluated.

  The Task Force has also run two successful public awareness campaigns highlighting both the huge benefits that the internet has to offer and the potential risks particularly to children of giving out personal information online.

  The Government are determined to deal with paedophile activity vigorously, and in the Sexual Offences Act 2003 we have introduced, among other child protection measures, new offences relating to a person showing a child sexual material. Section 12 makes it an offence to cause a child, for the purpose of obtaining sexual gratification, to look at an image of a person engaging in sexual activity. It carries a maximum penalty on indictment of 10 years imprisonment.

  Terrorism (Organised Crime)
  Sue Doughty
  To ask the Secretary of State for the Home Department if he will make a statement on the relationship 500W
  between drug crime, organised and international crime and terrorism; and what the implications are for Government policy and strategy. [142203]

  Caroline Flint
  We recognise that there are links between some of those involved in drugs and organised crime and terrorist groups. We have therefore introduced a range of powers to deal with this in the Terrorism Act 2000, the Anti-terrorism Crime and Security Act 2001 and the Proceeds of Crime Act 2002, and we continue to work closely with our international partners.

  Timber
  Mr. Gardiner
  To ask the Secretary of State for the Home Department by what means the policy for purchasing timber and timber products of(a)the Home Office, (b)the Assets Recovery Agency, (c) the Criminal Records Bureau, (d) the Forensic Science Service, (e) HM Prison Service, (f) the UK Passport Service and (g) the Immigration and Nationality Directorate, ensures that they are obtained from legal and sustainable sources. [141335]

  Fiona Mactaggart
  A Timber Procurement Bulletin was sent to all Home Office Procurement Units, Agencies and Non-Departmental Public Bodies in June 2003. It is also available on the Home Office Intranet site. The Bulletin included model contract specification clause, promulgated by the Department for Environment, Farming, and Rural Affairs (DEFRA), together with background information and contact points for further information.

  The Department, its Agencies and Non-Departmental Public Bodies have adopted the model contract clause for procuring timber and timber products to actively seek to purchase timber from legal and sustainable sources.

  Victim Support
  Mrs. Brooke
  To ask the Secretary of State for the Home Department what action his Department is taking to monitor discrepancies in referral rates to Victim Support by individual police forces. [140469]

  Paul Goggins
  The Home Office continues to monitor the effectiveness of the arrangements that already exist for the referral by police forces of victims to Victim Support at local level. Home Office guidance is available and there is a protocol in place between Victim Support and the Association of Chief Police Officers that sets out what information needs to he supplied. Provisions in the new Domestic Violence, Crime and Victims Bill will, if enacted, assist with the process of data sharing between criminal justice agencies.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department what action his Department is taking to increase recruitment of volunteers for Victim Support, with particular reference to high crime areas. [140470]

  Paul Goggins
  Victim Support's 12,000 volunteers play a vital role in the delivery of support services to victims and witnesses of crime. As an independent voluntary organisation it is for Victim Support to decide the best approach to take in recruiting and deploying
  501W
  additional volunteers. The organisation has already put in place arrangements to improve its ability to do this. As part of its overall monitoring of Victim Support's work the Home Office will continue to discuss with Victim Support the availability of volunteers within the organisation, including those serving higher-crime areas.

  Mrs. Brooke
  To ask the Secretary of State for the Home Department when his Department expects to complete its strategy for increasing volunteering for Victim Support. [140471]

  Paul Goggins
  The Home Office values the work done by Victim Support's existing volunteers in delivering services to victims and witnesses of crime. As an independent voluntary organisation it is, of course, for Victim Support to determine how best to recruit and retain suitable volunteers to deliver its services. The organisation is currently updating its volunteer strategy and as part of our general monitoring of Victim Support's work we will be discussing this strategy with them. The Home Office is, of course, keen to encourage people to become more active in their communities and volunteering with Victim Support is one of the many ways in which they can do this.

HEALTH

  Physical Activity Co-ordination Team
  Mr. Gardiner
  To ask the Secretary of State for Health (1) if he will list the recommendations the Activity Co-ordination Team has made on a methodology to secure better evidence and data on participation; [140495]

  (2) if he will list the (a) interventions and (b) pilot projects for which the Activity Co-ordination Team has provided funding; [140503]

  (3) if he will list the recommendations the Activity Co-ordination Team has made to his policy of raising mass participation in sport and physical activity. [140505]

  Miss Melanie Johnson
  The Activity Co-ordination Team (ACT) has been established by the Government to increase participation in physical activity and sport. The ACT is not a funding body, but in spring 2004, will provide Ministers with a delivery plan setting out recommendations to co-ordinate cross-Government initiatives to increase physical activity.

  Copies of the terms of reference for the ACT are available in the Library.

  Ankylosing Spondylitis
  Mrs. Helen Clark
  To ask the Secretary of State for Health what information he has collated on the availability of licensed treatments for ankylosing spondylitis. [140487]

  Ms Rosie Winterton
  According to the records kept by the Medicines and Healthcare products Regulatory Agency (MHRA) there are currently 426 marketing authorisations granted for the treatment of ankylosing spondylitis. Most contain Ibuprofen that is indicated for this condition.
  502W
  There is also a European Marketing Authorisation for Infliximab (Remicade) granted by the European Medicines Evaluation Agency (EMEA). This is a prescription-only medicine.

  Of these products, 389 are only available through the prescription of a registered doctor. Of the others, 21 are available by a prescription or a retail pharmacy, 14 are available by prescription, retail pharmacy or general retail outlet, one is only available through a retail pharmacy and one is available by a prescription or general retail outlet.

  Breastfeeding
  Mrs. Brooke
  To ask the Secretary of State for Health if he will take steps to ensure that jars of babyfood are labelled such that breastfeeding is encouraged for six months rather than four. [142587]

  Miss Melanie Johnson
  Current European Commission legislation provides that weaning foods may be labelled as suitable for infants from four months of age. This is due to be reviewed in the new year in light of the World Health Assembly (WHA)) Resolution 54.2 on Infant and Child Nutrition to strengthen activities and develop new approaches to protect, promote and support exclusive breastfeeding for six months. The Government supported the WHA resolution and will be supporting measures to achieve this including the appropriate labelling of weaning foods.

  Care Homes
  Sandra Gidley
  To ask the Secretary of State for Health what the weekly amount paid towards(a) residential homes and (b) nursing homes was in each year since 1997, broken down by local authority. [142050]

  Dr. Ladyman
  This information is available covering the last three years at http://www.doh.gov.uk/public/pss stat.htm and in less detail but covering five years at http://www.doh.gov. uk/paf/.

  Departmental Staff
  Mr. Burstow
  To ask the Secretary of State for Health if he will list the Department's staff by job title, broken down by board directorate. [141109]

  Ms Rosie Winterton
  The information requested on job titles could be provided only at disproportionate cost. Total numbers of staff by payband in each of the Department's three new business groups is shown in the tables.

  Strategy and business development group

  Number

  Fast Stream

  28.7

  Payband 1

  203.8

  Payband 2

  245.5

  Payband 3

  359

  Payband 4

  228.6

  Senior Civil Service

  62.7

  Total

  1,128.3

  503W

  Health and social care standards and quality business group

  Number

  Fast Stream

  14

  Payband 1

  258.5

  Payband 2

  264

  Payband 3

  283.6

  Payband 4

  326 6

  Senior Civil Service

  124.9

  Total

  1,271.6

  Health and social care delivery group

  Number

  Fast Stream

  16

  Payband 1

  112

  Payband 2

  159.1

  Payband 3

  208.4

  Payband 4

  182.5

  Senior Civil Service

  69.6

  Total

  747.6

  Other staff (on secondment, loan, maternity leave etc)

  Number

  Fast Stream

  5

  Payband 1

  66.2

  Payband 2

  65.9

  Payband 3

  82

  Payband 4

  61.6

  Senior Civil Service

  43.3

  Total

  324

  Maternal Deaths (Mifegyne)
  Jim Dobbin
  To ask the Secretary of State for Health how many female deaths in England and Wales have been attributable to the abortion pill RU486 since 1990. [141562]

  Miss Melanie Johnson
  There were eight maternal deaths associated with termination of pregnancy reported to the Confidential Enquiries into Maternal Deaths for the period 1991–99. None of these deaths were attributable to Mifegyne (also known as RU486). The data for 2000–02 are not yet available.

  The Medicines and Healthcare products Regulatory Agency (MHRA), which is responsible for medicines regulation in the United Kingdom, and the Committee on Safety of Medicines (CSM) receive reports of suspected adverse drug reactions to medicinal products via the Yellow Card Scheme. Since marketing authorisation was first granted in 1991, the MHRA and CSM have received two reports of fatal suspected reactions in association with use of Mifegyne. However, the reporting of a suspected adverse drug reaction does not necessarily mean that the drug was responsible. Many factors, such as the medical condition that is being treated, other pre-existing illnesses or other medications might have contributed.

  Flu Vaccine
  Sandra Gidley
  To ask the Secretary of State for Health what the take-up rates for influenza vaccine were at(a) 1 November and (b) 1 December, broken down by health authority. [142053]
  504W
  Miss Melanie Johnson
  Flu vaccination uptake rates for those aged 65 years and over at 1 November 2003 by strategic health authority are shown in the table.

  Data for vaccine uptake rate as at 1 December is not yet available.

  Strategic health authority

  Percentage uptake November 2002

  Birmingham and Black Country

  52.5

  Shropshire and Staffordshire

  59.8

  West Midlands South Health Authority

  56.3

  Leicestershire, Northamptonshire and Rutland

  56.5

  Trent

  60.8

  Bedfordshire and Hertfordshire

  56.9

  Essex

  56.2

  Norfolk Suffolk and Cambridgeshire

  58.8

  South Yorkshire

  58.1

  West Yorkshire

  59.9

  North and East Yorkshire and Northern Lincolnshire

  59.5

  Northumberland Tyne and Wear

  60.6

  County Durham and Tees Valley

  57.8

  Greater Manchester

  55.8

  Cumbria and Lancashire

  54.5

  Cheshire and Merseyside

  58.9

  North East London

  55.5

  North Central London

  48.7

  South East London

  46.6

  South West London

  52.3

  North West London

  50.2

  Hampshire and Isle of Wight

  57.3

  Thames Valley

  54.5

  Surrey and Sussex

  57.2

  Kent and Medway

  57.6

  Avon, Gloucestershire and Wiltshire

  57.2

  South West Peninsula

  54.1

  Dorset and Somerset

  57.1

  Genetically Modified Food
  Gregory Barker
  To ask the Secretary of State for Health what scientific advice he has received on whether children may be more susceptible to allergies and other diverse effects from eating GM food. [138818]

  Miss Melanie Johnson
  To date, the Food Standards Agency is not aware of any research that has been undertaken to determine if children are more susceptible to allergies and other possible effects from eating genetically modified food.

  Gregory Barker
  To ask the Secretary of State for Health what assessment he has made of research conducted worldwide into the effects on the health of children of consuming GM foods. [138819]

  Miss Melanie Johnson
  The Food Standards Agency is not aware of any such research and has not therefore made an assessment. Each genetically modified (GM) food is only approved after a rigorous safety assessment, which is carried out on a case-by-case basis. GM foods have been consumed by millions of people in the United States over a number of years with no reports of adverse effects.

  Group B Streptococcus
  Mr. Hancock
  To ask the Secretary of State for Health (1) if he will make a statement on(a) the latest statistics

  505W
  for children born with Group B streptococcus infection and (b) his Department's current strategy for dealing with it; [140922]

  (2) if he will make it his policy to offer all pregnant women a test for Group B streptococcus. [140923]

  Dr. Ladyman
  A 2001 UK surveillance study identified 376 cases of early onset group B streptococcus (GBS). Other studies have estimated that the prevalence ranges from 0.4/1,000 live births to 1.4/1,000 live births in England and Wales.

  The current position is that routine screening for GBS should not be offered to all pregnant women.

  The recently published National Institute for Clinical Excellence clinical guideline on antenatal care recommends that pregnant women should not be offered routine antenatal screening for GBS because evidence of its clinical effectiveness and cost-effectiveness remains uncertain.

  The UK National Screening Committee (NSC) is currently reviewing the position and has commissioned an assessment of the existing evidence on screening for group B streptococcus in pregnancy against criteria used to assess potential screening programmes to ensure they do more good than harm. The NSC considered a preliminary report of a workshop at its meeting this month and will consider the full report at its meeting in March 2004.

  Mr. Brady
  To ask the Secretary of State for Health whether it is his Department's policy to make screening for Group B streptococcus routinely available to pregnant women in the United Kingdom. [141251]

  Dr. Ladyman
  The current position is that routine screening for group B streptococcus (GBS) should not be offered to all pregnant women.

  The recently published National Institute for Clinical Excellence clinical guideline on antenatal care recommends that pregnant women should not be offered routine antenatal screening for GBS because evidence of its clinical effectiveness and cost effectiveness remains uncertain.

  The UK National Screening Committee (NSC) is currently reviewing the position and has commissioned an assessment of the existing evidence on screening for GBS in pregnancy against criteria used to assess potential screening programmes to ensure they do more good than harm. The NSC considered a preliminary report of a workshop at its meeting this month and will consider the full report at its meeting in March 2004.

  Cytology Services
  Mr. Streeter
  To ask the Secretary of State for Health what assessment he has made of the recent trials of liquid-based cytology; and what the timescale is for introducing this method of cervical screening across the whole NHS. [142205]

  Miss Melanie Johnson
  The National Institute for Clinical Excellence has appraised the use of liquid based cytology (LBC) and based on their recommendation we announced, on 22 October 2003, that LBC will be rolled out nationally across the national health service cervical screening programme.
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  We expect the roll out to take up to five years, due to the retraining of all laboratory staff who read cervical screening tests and all sample takers in primary care. Strategic health authorities have been issued with advice on how best they can roll out LBC for their local populations, laboratories and primary care.

  Men's Health
  Mr. Hopkins
  To ask the Secretary of State for Health how much was spent by the National Health Service taking blood pressure and other health checks into the workplace to provide healthcare for hard to reach groups of men in the last year for which figures are available. [141653]

  Miss Melanie Johnson
  [holding answer 4 December 2003]The amount spent by the national health service from the devolved Department of Health budgets providing workplace health checks is not known centrally.

  Mental Illness
  Dr. Kumar
  To ask the Secretary of State for Health what steps are being taken to(a) identify and (b) treat different classifications of mental illness in (i) women, (ii) people from black and ethnic minority groups and (iii) the general population in each Government Office of the Regions area. [141867]

  Ms Rosie Winterton
  Information regarding the identification and treatment of mental disorder by gender and ethnicity in each locality is not available centrally.

  The national service framework for mental health, published in September 1999, set out seven evidence-based national standards for mental health, designed to improve the quality of services for everyone with mental health needs, regardless of their gender or ethnicity.

  The Government have established a new programme of work through the National Institute for Mental Health to support the development of services that ensure that individuals from black and minority ethnic communities are given fair and equitable treatment. In October, we also launched for consultation: "Delivering Race Equality: A Framework for Action". The consultation ends in January 2004 and full guidance will be issued thereafter.

  The Government have also published this year guidance on Mainstreaming Gender and Women's Mental Health, available at www.nimhe.org.uk, which recommends ways to take action to mainstream gender and women's mental health. It will assist services in delivering gender sensitive and gender specific services.

  NHS Dentistry
  Mr. Pope
  To ask the Secretary of State for Health how many dentists in the Hyndburn constituency(a) offer NHS treatment and (b) have vacancies for NHS patients. [140937]

  Miss Melanie Johnson
  The information requested is shown in the tables.
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  Number of General Dental Service (GDS) dentists in Hyndburn and Kibble Valley Primary Care Trust—30 September 2003

  Number

  Total

  44

  Principals

  43

  Assistants

  1

  VDPS

  —

  Source:

  Dental Practice Board.

  Number of General Dental Service dentists in Hyndburn and Ribble Valley Primary Care Trust registering charge exempt adults, charge paying adults and children under 18 years for NHS treatment—4 December 2003

  Number

  Registering charge paying adults for NHS treatment

  4

  Registering charge exempt adults for NHS treatment

  4

  Registering children under 18 years for NHS treatment

  7

  Note:

  This data has been extracted from the www.nhs.uk website. The information on this site is provided by primary care trusts' webmasters and is used by NHS Direct to advise patients on the availability of dental services in their area.

  Source:

  www.nhs.uk.

  NHS Live 2004
  Chris Grayling
  To ask the Secretary of State for Health which Minister in his Department has responsibility for NHS Live 2004. [141569]

  Ms Rosie Winterton
  My right hon. Friend the Member for Barrow and Furness (Mr. Hutton), the Minister of State, Department of Health, has responsibility for NHS Live 2004.

  Pharmaceutical Trade
  Dr. Tonge
  To ask the Secretary of State for Health what inspection mechanisms are in place in the United Kingdom for short line wholesalers in the parallel pharmaceutical trade. [141700]

  Ms Rosie Winterton
  Short line wholesalers distribute a limited range of medicinal products and often specialise in parallel traded pharmaceuticals known as "parallel imports". They are licensed by the Medicines and Healthcare products Regulatory Agency (MHRA) and are inspected for compliance with good distribution practice at regular intervals.

  Wholesalers who assemble parallel imported products are also required to hold assembly licences granted by the MHRA and are inspected for compliance with good manufacturing practice at regular intervals.

  Dr. Tonge
  To ask the Secretary of State for Health what representations he has had from, and what discussions he has had with, patients' groups concerning the repackaging of medicines from the parallel trade in pharmaceutical products. [141701]

  Miss Melanie Johnson
  To date, the Medicines and Healthcare products Regulatory Agency (MHRA) has not received any representations from, nor had any discussions with, patient groups about the repackaging of medicines from the parallel trade in pharmaceuticals.
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  The MHRA has received some letters from patients, patient carers and health professionals on this matter. In these cases the product labelling has been reviewed and, where appropriate, the parallel importer asked to address the concerns raised.

  In licensing parallel imports, the MHRA ensures the products comply with the appropriate regulations.

  Dr. Jenny Tonge
  To ask the Secretary of State for Health what recent action he has taken to maintain safeguards for patients taking medicines emanating from short line wholesalers. [142200]

  Ms Rosie Winterton
  In order to assure the quality of medicines stored and distributed by wholesalers and safeguard patients, the Inspection and Enforcement Division of the Medicines and Healthcare Products Regulatory Agency (MHRA), on behalf of the Secretary of State for Health, licences all pharmaceutical wholesalers in the United Kingdom and inspects their premises and procedures for compliance with good distribution practice.

  The same standards of licensing and inspection are applied to full-line wholesalers, who deal in the full range of medicinal products available in the United Kingdom and short-line wholesalers, who deal in a more limited range of products. MHRA inspectors in the financial year 2003–04 have, to date, inspected over 250 wholesale sites. The inspections have confirmed compliance by these wholesalers with good distribution practice. There has been no recent necessity for additional action to maintain the safeguards to patients taking medicines emanating from short-line, or full-line wholesalers.

  Research
  Dr. Gibson
  To ask the Secretary of State for Health what plans he has to ensure that all public funded research is recorded and made freely available to(a) patients, (b) health professionals, (c) the public and (d) members of the scientific community. [142505]

  Miss Melanie Johnson
  I refer my hon. Friend to the reply I gave him on 8 September 2003,Official Report, column 256W.

  Stroke
  Mr. Truswell
  To ask the Secretary of State for Health when a specialist stroke service will be established in Leeds; and whether it will include(a)a rapid access neurovascular clinic, (b) an acute stroke unit, (c) a stroke rehabilitation unit and (d) community rehabilitation, including (i) voluntary support groups and (ii) intermediate care, (e) specialist community stroke teams and (f) stroke clubs. [143180]

  Miss Melanie Johnson
  [holding answer 9 December 2003]A specialist stroke unit will be fully established in Leeds by April 2004. It will include all the elements outlined in the question, many of which already exist in the city, with the exception of specialist community stroke teams, which will initially be on a pilot basis.
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  Mr. Truswell
  To ask the Secretary of State for Health how many stroke patients were treated in Leeds in each of the last five years for which figures are available. [143181]

  Miss Melanie Johnson
  [holding answer 9 December 2003]The information requested is shown in the table.

  Admissions

  1998–99

  1,469

  1999–2000

  1,303

  2000–01

  1,962

  2001–02

  1,962

  2002–03

  2,468

  Notes:

  1. Primary Diagnosis (ICD-10 160—164) Selected Cerebrovascular Diseases ("Stroke")—Health Authority of Treatment QDH Leeds—Count of Finished In year Admission Episodes NHS Hospitals, England 1998–99 to 2002–03.

  2. Admissions—admissions are defined as the first period of in patient care under one consultant within one healthcare provider. Please note that admissions do not represent the number of in patients, as a person may have more than one admission within the year.

  3. Diagnosis—the primary diagnosis is the first of up to 14 (seven prior to 2002–03) diagnosis fields in the Hospital Episode Statistics (HES) data set and provides the main reason why the patient was in hospital.

  4. Grossing—figures are grossed for both coverage and missing/ invalid clinical data, except for 2001–02 and 2002–03, which are not yet adjusted for shortfalls.

  Source:

  Hospital Episode Statistics (HS), Department of Health.

  Mr. Truswell
  To ask the Secretary of State for Health how many people in Leeds died from strokes in the last five years for which figures are available. [143182]

  Miss Melanie Johnson
  [holding answer 9 December 2003]The information requested is shown in the table.

  Deaths from strokes1, Leeds2 1998 to 20023

  Number

  1998

  759

  1999

  721

  2000

  663

  20014

  721

  20024

  783

  1 Strokes defined as deaths with an underlying cause of cerebrovascular disease. These were defined using the International Classification of Diseases, Ninth Revision (ICD-9) codes 430–438 for the years 1998 to 2000 and, for the years 2001 and 2002, the International Classification of Diseases, Tenth Revision (ICD-10) codes 160–169.

  2 Deaths of usual residents of Leeds local authority.

  3 Figures are for deaths which occurred in each calendar year.

  4 The introduction of ICD-10 for coding cause of death in 2001 means that data for strokes in this year and 2002 are not comparable with data for earlier years. The interpretation of international coding rules in ICD-10, compared with the rules used in ICD-9, has led to an apparent increase in the number of deaths coded to strokes of 13 per cent. for males and 9 per cent. for females. The figures should therefore be interpreted with caution. The effect of the major changes to mortality statistics in ICD-10 compared with ICD-9 were described in a report published in May 2002.*

  *Office for National Statistics. Results of the ICD-10 bridge coding study, England and Wales, 1999. "Health Statistics Quarterly" 14 (2002), 75–83.

  Source:

  Office for National Statistics.

  Therapeutic Cloning
  Jim Dobbin
  To ask the Secretary of State for Health if he will make a statement on the safety of therapeutic cloning. [141564]

  Miss Melanie Johnson
  The Human Fertilisation and Embryology Authority (HFEA) has not yet issued any licence for human therapeutic cloning research.

  One of the aims of therapeutic cloning research will be to explore new means of deriving stem cells and tissues which may, in future, be used in treatment of serious disease. As with any cell or tissue based therapy, they will undergo comprehensive assessment of safety.

  Work-related Stress
  Dr. Cable
  To ask the Secretary of State for Health what progress has been made towards the creation of a central register for cases of work-related stress in the Department. [141693]

  Ms Rosie Winterton
  While the Department collects data on sickness absence, which includes stress as a master code description, it is not possible to identify whether the cause of stress-related illness or anxiety was work related. It is not possible, therefore, for the Department to create a central register for cases of work-related stress.

  The Department has a number of procedures in place to help managers and staff to be aware of and to reduce work-related stress.

CULTURE, MEDIA AND SPORT

  Olympic Bid
  Mr. Hawkins
  To ask the Secretary of State for Culture, Media and Sport what plans she has to liaise with the owners of the Dome about its possible use as an Olympic venue to assist the bid to host the Olympics in 2012. [143278]

  Tessa Jowell
  Selecting potential Olympic venues and negotiating the terms of their use is a matter for the Olympic bid company, London 2012 Ltd. I understand that the potential owners of the Dome, the Anschutz Entertainment Group, are already engaged in discussions with London 2012 Ltd.

  Sport England
  Kate Hoey
  To ask the Secretary of State for Culture, Media and Sport when she will publish the Quinquennial Review of Sport England. [142859]

  Mr. Caborn
  Stage One of the Quinquennial Review of Sport England was published and laid before the House in July 2001, and performed a useful service in demonstrating the need for the re-organisation of Sport England's funding and other activities.

  It was intended that Stage Two of the Review should include detailed re-organisation proposals. Such proposals were at an advanced stage of preparation when my right hon. Friend the Prime Minister's Strategy Unit commenced its review of sports policy in the spring of 2002. The Strategy Unit's proposals for the

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  re-organisation of Sport England formed a major part of its wider recommendations for the future of sports policy, published as Game Plan in December 2002. They continue to inform the major Sport England reform programme which is now underway, and this programme should be seen as having superseded the proposals which were under discussion during Stage Two of the Quinquennial Review.

FOREIGN AND COMMONWEALTH AFFAIRS

  Racism
  Mr. McNamara
  To ask the Secretary of State for Foreign and Commonwealth Affairs at what level the Government will be represented at the UN High Commissioner on Human Rights-convened regional seminar of experts for Western States, Implementing the Durban Programme of Action, from 10 to 12 December. [142187]

  Mr. Rammell
  The Government will be represented by one official from the Race Equality Unit in the Home Office and one from the Human Rights Policy Department in the Foreign and Commonwealth Office. These were the two departments that led on the government's preparations for the 2001 World Conference Against Racism.

  Afghanistan
  Paul Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what his calculation is of the total opium crop in Afghanistan in each year from 1999 to the present; and what changes have taken place in the amount of land devoted to poppy cultivation since the end of hostilities in 2001. [142865]

  Mr. Rammell
  The United Nations Office on Drugs and Crime (UNODC) conducts an annual survey into the level of opium poppy cultivation and production in Afghanistan. It has reported levels over the past five years as follows:

  Year

  Hectares

  Tonnes

  1999

  91,000

  4,600

  2000

  82,000

  3,300

  2001

  8,000

  185

  2002

  74,000

  3,400

  2003

  80,000

  3,600

  The low level of cultivation and low production figure in 2001 reflect the Taliban ban on opium cultivation; the ban did not however address the underlying causes of poppy cultivation in Afghanistan and was enforced with mix of threat and bribery.

  The UNODC poppy cultivation survey in 2003 has shown reductions in the traditional areas, compared to 2002, but new cultivation in some areas that have not previously been involved in poppy production. The reduction in the traditional areas demonstrates that drug control policy has been effective where the Afghan Government has been able to exert control. Production also tends to move from traditional areas to more marginal and inaccessible areas to protect crops against
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  law enforcement activity. Increasing security and stability in Afghanistan remains key to progress in reducing opium production.

  Arms Trade
  Mr. Byers
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to promote an international arms trade treaty; and if he will make a statement. [142969]

  Mr. MacShane
  I refer my hon. friend to the previous answer I gave the hon. Member for Portsmouth, South (Mr. Hancock) on 23 October 2003,Official Report column 654W.

  Colombia
  Mr. Allan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reasons were given by the Colombian Government for the rates of voter abstention in(a) the Colombian referendum and (b) the municipal and departmental elections of 25 and 26 October. [143186]

  Mr. Rammell
  The abstention rate for the Referendum was high with participation at only 20.04 per cent. Our assessment, based on discussion with Colombian election officials and international observers, is that the security situation played its part, particularly in the more remote and more conflict-ridden areas of Colombia, where despite a state security presence the participation rate was below national average. The complexity of the questions on which citizens were being asked to vote also caused a reluctance to vote.

  The elections had a better turnout of 50.49 per cent. This was about average for Colombian elections. The turnout for the Congressional elections and Presidential elections in 2002 were 42 per cent. and 50 per cent. respectively.

  Foreign Office Staff (School Places)
  Mr. Foulkes
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what proportion of the money his Department spent on school places for children of Foreign Office personnel was spent on the independent sector in each year since 1996; and what he estimates the proportion will be in 2003; [140561]

  (2) what the average cost to his Department was of the school places provided for the children of Foreign Office personnel in independent and private schools in each year since 1996. [140562]

  Mr. Rammell
  Education expenditure for children of Foreign Office personnel since 1996 has been spent almost entirely on fee-charging schools in the private and independent sector. Less than 1 per cent. in each year is spent on boarding fees for state run boarding schools.

  We do not distinguish between private and independent schools. The annual expenditure on education for children of FCO personnel since 1996 is as follows.
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  Financial year

  £

  1995–96

  10,569,861

  1996–97

  11,669,734

  1997–98

  10,547,169

  1998–99

  10,477,132

  1999–2000

  12,114,888

  2000–01

  12,944.790

  2001–02

  13,806,197

  2002–03

  15,990,618

  Gulf War
  Harry Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of the oil-for-food income was allocated to Gulf War reparations through the UN administered Compensation Fund; what amount in pounds sterling that percentage represented from(a) December 1996 to December 2000 and (b) December 2000 to 21 November 2003; and what the amount paid by Iraq in reparations was prior to December 1996. [141116]

  Mr. Mullin
  When the "oil-for-food" scheme was launched in December 1996, the United Nations Compensation Commission (UNCC) received 30 per cent. of the proceeds of Iraq's oil sales, allowing it to make regular compensation payments to successful claimants. This percentage was reduced to 25 per cent. pursuant to Security Council resolution 1330 (2000). On 22 May 2003 the Security Council adopted resolution 1483 (2003), which reduced the percentage of revenue from Iraqi oil sales to be paid into the Compensation Fund to 5 per cent. The total amount paid in compensation to victims of Iraq's invasion and occupation of Kuwait to date is over US$17.5 billion. The figures in pounds sterling are not readily available, nor is a breakdown of the amounts paid between the dates stated.

  Bribery/Corruption
  Hugh Bayley
  To ask the Secretary of State for Foreign and Commonwealth Affairs what advice has been given and on what dates to UK embassies, high commissions and other diplomatic posts abroad about the need to report information about possible cases of international bribery and corruption by UK citizens and companies; which posts have reported cases; on how many occasions; and how many of those reports have been followed up by investigations by UK law enforcement agencies. [141108]

  Mr. MacShane
  I refer my hon. Friend to the replies I gave the hon. Member for Ceredigion (Simon Thomas) on 15 and 28 October respectively,Official Report, columns 264W and 181W. The guidance telegrams referred to there were issued in January 2002, February 2002 and March 2003. We cannot comment on individual reports received in order not to prejudice criminal investigations.

  Liberia
  John Barrett
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the status of Liberia's membership of the International Monetary Fund. [142781]
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  Mr. Mullin
  Liberia is a member of the International Monetary Fund (IMF). But on 5 March 2003 the IMF suspended Liberia's voting rights. Liberia was not sufficiently servicing its significant arrears and failed to address key concerns adequately, including improving transparency and management of revenue and government expenditure, addressing human rights violations and regional interference.

  Now Liberia is under new leadership we are working with key partners, including the IMF and World Bank, to help redevelop Liberia and restore its relations with the international donor community. We understand that the IMF will visit Liberia for discussions with the National Transitional Government.

  North Korea
  Mr. Streeter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what role the UK Government is playing in the six-party talks about the future of North Korea. [142204]

  Mr. Rammell
  The Government has no direct involvement in the six party talks process. We follow developments closely as a permanent member of the UN Security Council, as a Depositary State of the Nuclear Non-Proliferation Treaty, and as a member of the European Union. We are also in direct and regular contact with all the parties involved in the six party talks process, including the Democratic People's Republic of Korea.

  Sri Lanka
  Mr. Drew
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of Sri Lanka on the subject of religious tolerance for Christians. [142257]

  Mr. Mike O'Brien
  I refer my hon. Friend to the answer I gave him on 12 November 2003,Official Report, columns 361–62W. Officials from the British High Commission in Colombo regularly raise this and other human rights issues with the authorities—most recently with the Sri Lankan Ministry of Christian Affairs. However, I have not had discussions with the Government of Sri Lanka specifically on the subject of religious tolerance for Christians in Sri Lanka.

  Sudan
  Mr. Drew
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the peace talks in the Sudan, with specific reference to the situation in Darfur. [142308]

  Mr. Mullin
  We are optimistic about the prospects for peace between the Government of Sudan and the Sudanese People's Liberation Movement. Much progress has been made since the Inter-Governmental Authority on Development (IGAD) sponsored talks re-started in June 2002. Agreement has been reached on the key issues of self-determination for the south and the application of Sharia law. A Memorandum of Understanding on a cessation of hostilities for the duration of the peace talks was signed in October 2002, and a monitoring mechanism established. Most
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  recently, on 25 September 2003, a framework agreement on security arrangements during the interim period was reached.

  The talks, adjourned for Ramadan, re-started in Naivasha on 1 December. Various issues still need to be resolved, notably power and wealth sharing arrangements and the three conflict areas (of Southern Blue Nile, the Nuba Mountains and Abyei). But we are hopeful that the parties will reach agreement this year or early next. We continue to offer the parties and mediators our full support and advice and remain actively involved in helping them reach a comprehensive peace agreement.

  We remain concerned about the situation in Darfur. I discussed the matter with the Sudanese Ambassador on 2 December. We are pressing the Government of Sudan to ensure unrestricted humanitarian access to Darfur. This would allow a fuller assessment of the situation and enable relief agencies to provide support to the most vulnerable. And we are urging all parties to engage constructively in the Abeche peace talks. All sides should know from bitter experience that a military solution is not in prospect, and that peace and reconciliation offer the only real chance of a brighter future.

  Terrorism
  Lembit Öpik
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many United Kingdom nationals were killed in terrorist attacks between(a) 1 June 2002 and 28 February 2003 and (b) 1 March 2003 and 26 November; and if he will make statement. [140774]

  Mr. MacShane
  In the period from 1 June 2002 to 28 February 2003, 29 British nationals were victims of terrorism perpetrated by international terrorists: 28 British nationals in Bali and one British national in Riyadh. Between 1 March 2003 to 26 November 2003, 2 British nationals were killed in a bomb attack in Riyadh and 3 British nationals were killed in the bombing of the British Consulate General in Istanbul. These figures do not include British personnel killed in Iraq. We believe that international terrorists have been involved in some terrorist attacks in Iraq.

  Overseas Posts (Security)
  Lady Hermon
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he has taken to improve security at British high commissions and embassies following the recent terrorist attacks in Turkey. [142670]

  Mr. Rammell
  We keep the security of all out posts under constant review. Immediately after the attack in Istanbul, all Diplomatic Missions were instructed to review their security urgently and, where appropriate, implement security enhancements. In addition, those Missions with a high level of threat sought additional protection from the host government.

  We are now carrying out a detailed assessment of the security of all Missions to identify what more might be done to enhance their security, against terrorist attack in particular

  Western Sahara
  Mr. Drew
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to discuss the revised Baker Plan for the western Sahara with the US Secretary of State following his return from his visit to Morocco. [142258]

  Mr. Rammell
  None. However, we remain in regular contact with members of the United Nations Security Council at all levels on the western Sahara issue.

  Mr. Rosindell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what Government policy is on the dispute between the Moroccan Government and the non-governmental group Polisario. [142277]

  Mr. Rammell
  The United Kingdom supports fully the efforts of the United Nations Security General and his personal envoy, James Baker III, to find a just, lasting and mutually acceptable solution to the western Sahara dispute that provides for self-determination for the people of western Sahara.

TRANSPORT

  Road Traffic Management
  Mr. Dhanda
  To ask the Secretary of State for Transport what plans he has to require the extension of public consultation procedures when road traffic management procedures are proposed by local authorities. [142981]

  Mr. McNulty
  Where traffic management schemes require traffic regulation orders under the Road Traffic Regulation Act 1984 the Local Authorities' Traffic Orders (Procedure) (England and Wales) Regulations 1996 (SI 1996/2489) apply to the making of such orders. Regulation 6 sets out who an order making authority should consult in particular cases. Otherwise it is a matter for authorities as democratically elected bodies to decide whom to consult in taking schemes forward. We have no current plans to amend the 1996 procedure regulations.

  Bicycle Rickshaws
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what assessment he has made of the adequacy of the safety rules governing the use of bicycle rickshaws used on public roads; how many bicycle rickshaws are in use in London; what licensing and insurance rules exist to enable bicycle rickshaws to carry passengers; and what safeguards exist for the general public who hail bicycle rickshaws. [142899]

  Mr. Darling
  Bicycle rickshaws or pedicabs must comply with the Highway Code, road traffic laws, construction and use and road vehicle lighting regulations. We believe these are sufficient as principal measures for safeguarding public safety. Licensing of pedicabs to carry passengers is the responsibility of Transport for London, who we understand are looking at the issue. The numbers of pedicabs used in London is unknown.

  Bingley Relief Road
  Mr. Damian Green
  To ask the Secretary of State for Transport (1) when the Bingley Relief Road is due to be(a) completed and (b) opened; [140926]

  (2) whether a Government Minister will attend the opening of the Bingley Relief Road. [141105]

  Mr. Jamieson
  The A650 Bingley Relief Road will open to traffic at the earliest opportunity after construction is completed and the necessary safety checks have been undertaken. I expect that the scheme should be ready to open to traffic late December/early January. Arrangements are being made for a Minister to officially dedicate the road early in the new year.

  Congestion Charging
  Keith Vaz
  To ask the Secretary of State for Transport which areas(a) have and (b) intend to have a congestion charging system. [142928]

  Mr. McNulty
  London and Durham have road user charging schemes. Nottingham City Council is developing a work place parking levy scheme and Derbyshire County Council is looking at the options for a road user charging scheme at the Ladybower reservoir in the Peak District National Park. Although a number of other authorities have expressed interest, none has firmly committed to the development of a scheme.

  M25
  Mr. Mackay
  To ask the Secretary of State for Transport what the cost was of repairs and maintenance to(a) steel barrier systems and (b) concrete barrier systems on the M25 for the last five years for which figures are available. [142760]

  Dr. Howells
  On the basis of information since September 2001 the figures available for the cost of repairs to the steel barriers on the M25 are:

  Cost of repairs

  £

  September 2001—August 2002

  2,248

  September 2002—August 2003

  3,302

  September 2003—To date

  479,000

  There is an annual budget of £94,000 for maintenance of steel barriers. Most repairs to the barriers are due to accident damage and where possible, costs are recovered from the drivers that are responsible for an accident.

  The concrete barriers on the M25 are designed to be maintenance free after their initial construction. There have been no major repairs required in this period due to accidents.

  Driver and Vehicle Licensing Agency
  Hugh Bayley
  To ask the Secretary of State for Transport on how many occasions in the last full year for which figures are available the DVLA initiated court proceedings against people who were believed not have paid vehicle excise duty; on how many occasions the DVLA(a) withdrew proceedings and (b) lost a case in court because the vehicle keeper showed that he or she had paid VED; how much the DVLA estimates such
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  proceedings cost the taxpayer; what steps the DVLA will take to improve its administration procedures to avoid the commencement of this type of unnecessary proceedings; and if he will make a statement. [140883]

  Mr. Jamieson
  During the year 2002–03, a total of 231,149 prosecutions were taken by DVLA against people who were believed not to have paid vehicle excise duty.

  Proceedings were withdrawn on 18,255 occasions and 1,303 cases were unsuccessful at court. Cases are withdrawn for a variety of reasons, but less than 1 per cent. are as a result of a licence being in force at the time.

  DVLA estimates that the cost of taking each case to court is £45 and requests this amount at every successful prosecution. Last year the agency was awarded £9.4 million in costs by the courts.

  DVLA already takes every opportunity to avoid unnecessary court action. In most cases of alleged unlicensed use of a vehicle, a letter is sent to the registered keeper offering to settle the matter out of court. This also provides the opportunity to produce evidence that vehicle excise duty has already been paid. In addition, procedures have recently been introduced to barcode the licensing transaction at Post Offices. This allows DVLA's records to be updated within three days of the application, thus reducing the risk of inappropriate enforcement action.

  Driving Assessments
  Mr. Chope
  To ask the Secretary of State for Transport if he will make it his policy to include all test centres run by the Driving Standards Agency among the places at which driving assessments recommended by the Medical Adviser to the Driver and Vehicle Licensing Agency can be carried out. [143274]

  Mr. Jamieson
  DVLA's Medical Advisers do on occasions ask drivers to undergo driving assessments in order to help determine their fitness to drive. Referrals are only made to driving assessment centres which are members of the Forum of Disabled Drivers Assessment and Mobility Centres. Such Centres are experienced at assessing drivers with medical conditions and specifically assess the impact of medical conditions upon driving behaviour and whether performance can be enhanced by either tuition or vehicle modification. For these reasons, DVLA prefers to use disability assessment centres rather than ask individuals to take a standard 'pass or fail' driving test. However, if an individual has particular problems in attending at an assessment centre, the Agency is able to refer the individual for a formal driving test with the Driving Standards Agency.

  Mr. Chope
  To ask the Secretary of State for Transport if he will list the places where driving assessments recommended by the Medical Adviser to the Driver and Vehicle Licensing Agency can be carried out. [143275]

  Mr. Jamieson
  A list of the driving assessment centres can be found at pages 37 and 38 of the Agency's booklet "At a Glance Guide to the current Medical Standards of Fitness to Drive". I am arranging for copies of the
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  booklet to be placed in the Libraries of the House. This document is also available on the internet at: www.dvla.gov.uk/drivers/dmedl.htm.

  Fair Trade Products
  Mr. Bercow
  To ask the Secretary of State for Transport whether it is the policy of his Department to use fair trade products, as a matter of course, in(a) sales on Departmental premises and (b) receptions and meetings involving staff and visitors. [142807]

  Mr. McNulty
  The Department's catering contracts have required provision of Fair-Trade beverages since 1999. Fair-Trade tea and coffee is available for staff to purchase from the staff restaurant or to choose when providing hospitality catering for receptions and meetings.

  Haymarket Station, Edinburgh
  John Barrett
  To ask the Secretary of State for Transport what recent discussions he had with(a) the Scottish Executive, (b) Network Rail and (c) others regarding lift facilities at Haymarket railway station in Edinburgh. [142619]

  Mr. McNulty
  Subject to the availability of funding, the SRA is considering how best to prioritise a programme of works to meet the accessibility requirements of the Disability Discrimination Act and will he consulting on draft criteria next year. Stations that have high usage, such as Haymarket, are likely to be given priority.

  Light Dues
  John Thurso
  To ask the Secretary of State for Transport when he expects to publish the results of the Light Dues Review: Meeting the Costs of Marine Aids to Navigation consultation published in May 2002; and if he will publish the responses received. [142527]

  Mr. Jamieson
  In March, in my annual statement on the level of light dues rates, I announced a programme of work to investigate issues raised within the review. We do not intend to publish a separate Government statement to the consultation paper 'Light dues Review: Meeting the Costs of Marine Aids to Navigation'.

  The responses received to the consultation paper will be published on the Department's website following the completion of the Study of the Economic Impact of Light Dues.

  John Thurso
  To ask the Secretary of State for Transport when he expects to publish the results of the economic review of light dues. [142528]

  Mr. Jamieson
  The report on the Study of the Economic Effect of Light Dues will be published as soon as possible following completion of the study, expected in the new year. It will be made available in hard copy and on the Department's website.

  Taxis
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he will undertake a study of(a) the provision of taxi plates by local authorities outside London, (b) the availability of taxi services and (c) the
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  speed of services to the public provided by extended granting of licences; and if he will make a statement on the report by the Office of Fair Trading on the licensed taxi industry. [142900]

  Mr. Darling
  We are currently considering the taxi and private hire vehicle market study report published on 11 November by the Office of Fair Trading, which was based on a range of research. We are now consulting principal stakeholders and are committed to responding to the recommendations within 120 days of the report's publication.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Home Energy Efficiency
  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will list the companies used to supply equipment to homes under the Warm Front initiative; and if she will make a statement. [141940]

  Mr. Bradshaw
  Following a competitive procurement process in 2000 two companies were appointed to supply heating materials for the Warm Front scheme. Those companies are Plumb Centre and Newey and Eyre.

  Air Pollution
  John Barrett
  To ask the Secretary of State for Environment, Food and Rural Affairs what the average air quality levels were in England in each year between 1985 and 1995. [136781]

  Mr. Bradshaw
  Comprehensive information on concentrations of air pollutants in England between 1985 and 1995 is available from the Air Quality Archive at www.airquality.co.uk. The following table shows, for urban and rural air monitoring site sin England, the average number of days for the years between 1985 and 1995 on which levels of any one of a basket of five pollutants (carbon monoxide, nitrogen dioxide, ozone. fine particles and sulphur dioxide) were 'moderate or higher' according to the Air Pollution Information Service bandings. These data are the headline air quality indicator, one of 15 headline indicators of sustainable development.

  Data are missing for some years because there were, at that time, not enough air monitoring sites operating to provide data on all pollutants. Data for 2002 for England are available at www.sustainable-development. gov.uk/indicators/regiona1/2002/h10.htm and for 1987–2003 for the UK at http://www.defra.gov.uk./news/ 2003/030508a.htm.

  When the indicator was established in 1998, the back time series was constructed from results from an increasing set of monitoring sites as the network (particularly the urban network) was developed. Research demonstrated that the increasing number of sites used in the indicator in fact had little effect on the overall trend produced. However, caution should be taken when comparing data for the early years of the urban network, as the number of sites was much lower than present that could have resulted in a lower number

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  of exceedences being detected. The number of urban sites increased from three in 1992 to 35–40 from 1998 onwards, while the number of rural sites has remained fairly constant since it started.

  The table also shows average concentrations of black smoke and sulphur dioxide (SO2) in the UK between 1985 and 1995. These two combustion-generated pollutants are also a good indicator of average air quality for the years in question.

  There is no clear trend in the average number of days of 'moderate' or 'higher' air pollution between 1985 and 1995. There is annual variability due mainly to differences in weather conditions from year to year. Data since 1995 show a long-term improvement in the number of days of 'moderate' or 'higher' air pollution as a result mainly of reduced emissions from road vehicles, electricity production and industry. There is an improving trend in average UK concentrations of black smoke and sulphur dioxide between 1985 and 1995, which have almost halved.

  Average air quality levels between 1985–1995

  England air quality headline indicator (number of days)

  (Micrograms per metre cubed)

  Rural average

  Urban average

  UK average black smoke

  UK average sulphur dioxide-SO2

  1985

  —

  —

  17.5

  41.2

  1986

  —

  —

  17.7

  41.1

  1987

  23

  —

  17.0

  39.1

  1988

  34

  —

  15.9

  36.5

  1989

  58

  —

  14.7

  35.3

  1990

  58

  —

  14.3

  35.6

  1991

  60

  —

  13.4

  32.8

  1992

  52

  —

  11.6

  29.6

  1993

  44

  59

  11.0

  28.2

  1994

  52

  50

  9.0

  24.6

  1995

  53

  50

  10.6

  24.4

  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total amount of recognised carcinogens released to the air was(a) in England and (b) broken down by Government region in each year since 1997. [139191]

  Mr. Bradshaw
  The National Atmospheric Emission Inventory (available on-line http://www.naei.org.uk/) compiles annual air pollutant emissions for the United Kingdom. The most recent year for which emissions have been calculated is 2001. Emissions of four known or probable human carcinogens are calculated: benzene, 1,3-butadiene, benzo[a]pyrene and dioxins. Table 1 shows the national annual emissions since 1997 taken from the National Atmospheric Emission Inventory.

  Emissions are generally calculated using statistics that are available on a national scale (e.g. fuel use). Inventory experts are gathering the regional information in order to undertake the complex process of calculating regional totals. So far, emissions for England have been calculated for 2001, but emissions for each Government region are not yet available.
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  Table 1: UK emissions 1997 to 2001

  Units

  1997

  1998

  1999

  2000

  2001

  Benzene

  kt

  35.8

  31.7

  28.7

  15.7

  15.4

  1,3-Butadiene

  kt

  7.3

  6.4

  5.9

  5.1

  4.5

  BaP

  t

  11.2

  9.7

  8.6

  6.7

  7.2

  Dioxins

  gTEQ

  471

  411

  395

  346

  341

  Table 2: England emissions for 2001

  Units

  2001

  Benzene

  kt

  11.8

  1,3-Butadiene

  kt

  3.7

  BaP

  t

  6.1

  Dioxins

  gTEQ

  272

  Notes:

  1. BaP = benzo[a]pyrene (a carcinogen in its own right and a marker for carcinogenic polycyclic aromatic hydrocarbons in ambient air;

  2. The term dioxin refers to a range of polychlorinated dibenzo-p-dioxin and polychlorinated dibenzofuran compounds. The emissions of dioxins are presented in terms of the sum of the weighted emissions expressed as gTEQs. TEQs weight the toxicity of the less toxic congeners as fractions of the toxicity of 2,3,7,8-TCDD, the most toxic congener.

  Badgers/Bovine TB
  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans the Department has to evaluate the impact on efficacy of culling of the use of anaesthesia in badger setts prior to lethal gassing. [141081]

  Mr. Bradshaw
  The Department has no plans to evaluate the impact on efficacy of culling of the use of anaesthesia in badger setts prior to lethal gassing. The gassing of badgers has been discounted as a culling option because it is considered to be inhumane.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs for how long mycobacterium bovis bacilli can survive in badger setts. [141394]

  Mr. Bradshaw
  It is not known precisely how long M. bovis (the causative organism of bovine tuberculosis) may survive in badger setts. The organism is killed by exposure to ultra violet light and extremes of temperature and humidity, as well as the growth of other bacteria and fungi. The lack of light and relatively constant temperature and humidity conditions found inside a badger sett would favour the survival of M. bovis.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what predictions were made, in explanatory material made available to farmers by her Department as to the percentage of badgers which were to be killed by culling teams engaged in the Krebs trials. [141993]

  Mr. Bradshaw
  In their first report, the Independent Scientific Group on Cattle TB, reported that informal estimates suggested a capture rate of up to 80 per cent. could be expected using cage traps alone. Information made available to farmers by leaflet, refers to "Proactive culling as many badgers as possible from a whole area (about 80 per cent.)" based, in part, on post-culling assessments of trapping efficiency. These assessments were based on field signs and are therefore largely
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  subjective. They are, however, carried out by experienced personnel and give a useful indication of the extent of badger population reduction in proactively culled areas.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what information she has collated on whether significant damage is caused by badgers to ground nesting birds. [142460]

  Mr. Bradshaw
  Badgers are known to predate on ground nesting birds, although such predation is likely to be largely opportunistic. The impact of badger predation on bird populations has not been specifically quantified, but is not thought to significantly affect populations nationally. Locally, however, the situation may he different.

  Bird remains are typically found in about 7.5 per cent. of badger dung in the U.K., and diet studies confirm that badgers eat eggs, nestlings and adult birds. These studies are unable to distinguish between scavenged and killed birds, and do not quantify the importance of birds in the badger diet.

  Defra is currently funding research aimed at providing a scientifically vigorous assessment of the importance of badger predation for ground nesting birds. The project involves a review of current knowledge and intensive field investigations to assess to extent of predation by badgers. The project, which is being undertaken by the Central Science Laboratory, will report its findings in March 2005.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what the welfare implications are for badgers infected with TB; at what stage in the disease they suffer; and how long that suffering can last. [142461]

  Mr. Bradshaw
  In a study by the Central Science Laboratory and Veterinary Laboratories Agency, TB as a cause of death accounted for less than 7 per cent. of badgers found dead. It is difficult to make objective assessment of whether these animals suffer. Typically, individuals may live for many months or even years while infected, showing no overt signs of clinical illness and maintaining normal body weights. Infected female badgers often give birth and successfully rear litters. However, post mortem findings where advanced pathological changes have occurred, particularly in the lungs, indicate that during the final stages of disease there would undoubtedly be an effect on the quality of life of such an animal. This stage is thought to last for a few weeks at most.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs how many times in each of the reactive areas of the randomised badger culling trials badger clearances were carried out. [142463]

  Mr. Bradshaw
  For each of the 10 reactive treatment areas the number of individual clearance operations is detailed in the following table.

  Reactive trial area

  Number of reactive operations completed1

  A1

  10

  B1

  10

  C1

  20

  D1

  4

  E1

  210

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  Reactive trial area

  Number of reactive operations completed1

  F3

  10

  G1

  7

  H1

  4

  11

  3

  J2

  0

  1 Individual reactive operations vary in the extent of the geographical area involved and the number of herd notifications for reactive culling included

  2 Includes an operation halfway through the culling period at the time of suspension of reactive culling on 4 November 2003.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on(a) the adequacy of the resources allocated to the reactive cull component of the Government's randomised badger culling trials and (b) the adequacy of the number of personnel allocated, with particular reference to clerical personnel with sufficient skills, training and experience. [142464]

  Mr. Bradshaw
  The information requested is as follows.

  (a) It has at times been difficult for MAFF/Defra to carry out reactive culling in response to a herd breakdown as quickly as the Independent Scientific Group on Cattle TB (ISG) anticipated its First Report. Resource limitations, including difficulties inherent in the recruitment and retention of appropriately skilled staff, have played a part. Difficulties became apparent in 2002 when, in effect, the impact of the suspension of TB testing in 2001 due to foot and mouth disease meant that two years 1 worth of breakdown notifications required reactive culling, alongside the servicing of culling in the proactive areas. Defra has worked hard since FMD to meet the ISG's expectations both in terms of the time between breakdown and culling, and the number of operations completed. The ISG has helped by making some pragmatic decisions by assisting with priorities and by setting realistic, yet challenging, targets which Defra has either met or exceeded.

  (b) It is considered that the level of clerical or administrative support has been adequate and not had any a diverse impact on the fieldwork for the Randomised Badger Culling Trial.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs how long a reactive culling area must be maintained for statistically valid data to be obtained from the trial in that area. [142465]

  Mr. Bradshaw
  As set out in the Second Report of the Independent Scientific Group on Cattle TB (ISO), the design of the trial is based on accumulating a maximum of 50 triplet years of data to provide a probability exceeding 90 per cent. of detecting a 20 per cent. effect. The ISO committed itself at the outset, to carry out an initial analysis of the data once 100 new breakdowns had been accumulated in trial areas, and to repeat the analysis at six-month intervals.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs how many reactive culling areas were designated during the randomised badger culling trials; and what the dates were on which the trials commenced in each area. [142466]
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  Mr. Bradshaw
  Within each of the 10 reactive treatment areas the number of individual culling areas varies from 0 to 20. I attach a table that presents the requested data clearly.

  Reactive Trial Area

  Number of reactive operations completed1

  Date of Field Operations2

  A1

  10

  3 July 2000

  B1

  10

  24 May 1999

  C1

  20

  15 May 2000

  D1

  4

  25 August 2003

  E1

  310

  17 June 2002

  F3

  10

  29 July 2002

  G1

  7

  19 August 2002

  H1

  4

  15 January 2003

  11

  3

  16 May 2003

  J2

  0

  -

  1Individual reactive operations vary in the extent of the geographical area involved and the number of herd notifications for reactive culling included

  2 Date that traps are first set to catch badgers

  3 Includes an operation halfway through the culling period at the time of suspension of reactive culling on 4 November 2003

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what concerns Professor Bourne has raised with her on the effect of delays in obtaining culture test results for bovine samples on management of the randomised badger culling trials. [142337]

  Mr. Bradshaw
  Professor Bourne wrote to the then Parliamentary Secretary (Commons), Mr. Morley, on 9 May 2003 enclosing a number of reports including one reviewing the implementation of the reactive strategy in the randomised badger culling trial. This pointed out that clearance of the TB testing backlog, caused by the suspension of testing during the 2001 foot and mouth disease outbreak, had overwhelmed culture facilities and contributed to delays in the notification of TB herd breakdowns that triggered reactive culling operations. The paper brought the concerns of the Independent Scientific Group on Cattle TB to the Minister's attention but concentrated on advising the Department on what it could do to improve notification and reactive response times.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what the projected expenditure is by her Department for the next five years on developing vaccines for protecting(a) bovine animals and (b) badgers against TB infection. [141967]

  Mr. Bradshaw
  The content and funding for the future TB research programme is currently under discussion within the Department and is taking account of external scientific advice. TB vaccine development is likely to form an increasingly important part of the research programme.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what the total expenditure since 1973 by her Department and its predecessors has been on developing vaccines for protecting(a) bovine animals and (b) badgers against TB infection. [141977]
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  Mr. Bradshaw
  Work on vaccinating badgers against TB was carried out by MAFF from 1983 to 1990, but the figures for expenditure at that time are not available.

  Much of the development work involves developing candidate vaccines. This work applies equally to vaccines for cattle and badgers so the figures do not differentiate between the two species.

  The major effort on TB vaccine research, in relation to cattle and badgers, started in 1998, subsequent to the Krebs Report on Bovine Tuberculosis in Cattle and Badgers. The following table shows vaccine related research costs for the financial years 1998–99 to date.

  £

  Financial Year

  Vaccine related research cost

  1998–99M

  825,942

  1999–2000

  1,352,204

  2000–01

  1,415,287

  2001–02

  1.505.887

  2002–03

  1,495,314

  2003–04

  1,618,819

  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what recent discussions her Department has had with pharmaceutical companies on the Government's efforts to identify a candidate vaccine for bovine TB. [140840]

  Mr. Bradshaw
  There was input from the pharmaceutical industry into Defra's Chief Veterinary Officer's TB vaccine steering group and the Independent Scientific Group's Vaccine Scoping Study Sub-Committee, whose report is to be published shortly. Officials are also engaged with representatives of the animal medicine industry to discuss possibilities for Government/industry partnerships.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs how many bovine animals were compulsorily purchased and slaughtered as a result of TB infection between 1994 and 1998. [142456]

  Mr. Bradshaw
  The number of cattle slaughtered in Great Britain as a result of TB infection between 1994 and 1998 is set out in the following table:

  Cattle slaughtered1

  1994

  2,773

  1995

  3,451

  1996

  3,881

  1997

  3,760

  1998

  6,083

  Total

  19,948

  1 TB Reactors plus dangerous contacts. Veterinary Officer—Animal Health 1998

  Source:

  The Report of the Chief

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs how many bovine animals have been compulsorily purchased and slaughtered as a result of TB infection since 1998. [142458]
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  Mr. Bradshaw
  The number of cattle slaughtered in Great Britain as a result of TB infection between 1999 and 2002 is set out in the following table:

  Cattle slaughtered1

  1999

  6,772

  2000

  8,353

  2001

  5,916

  2002

  222,886

  Total

  43,927

  1 TB Reactors plus dangerous contacts. Source: The Report of the Chief Veterinary Officer—Animal Health 2002

  2 In 2001, the TB testing and control programme was largely suspended due to the foot and mouth disease (FMD) outbreak. Since testing resumed in 2002, resources have been concentrated on herds with overdue TB tests which would have had a longer period in which to contract the disease. Also the proportion of high risk herds being tested post-FMD is greater than that prior to the outbreak. As a result, the number of TB reactors identified and slaughtered in 2002 is not comparable to those identified and slaughtered in previous years.

  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on her recent decision to end badger culling as a means of countering TB in cattle. [143118]

  Mr. Bradshaw
  [holding answer 9 December 2003]The Independent Scientific Group on Cattle TB (ISO) was appointed by Ministers in 1998 to design and oversee a large-scale field trial, the Randomised Badger Culling Trial (RBCT), aimed at evaluating badger culling as a means to reduce the incidence of cattle TB. The trial involves three experimental treatments: (i) proactive culling, which aims to reduce badger densities to very low levels across entire trial areas, (ii) reactive culling, which seeks to remove only those badgers geographically close to recent cattle TB outbreaks on particular premises, and (iii) no culling (survey only).

  The ISG has advised Ministers that its interim analysis of trial data so far indicates that there has been a 27 per cent. increase in the number of cases of bovine TB (breakdowns) in cattle herds occurring in reactive culling areas compared to the related survey-only areas (where no badger culling took place). The culling of badgers in reactive treatment areas of the RBCT was suspended from 4 November, because of the risk that a further three months of culling would cause additional TB breakdowns.

  On the advice of the ISO, operations will continue in proactive areas because the data for these areas does not yet yield a statistically significant result. The survey-only (control) areas will also continue to be monitored.

  This is a significant step forward in the development of a strategy to control bovine TB. Although we have now effectively ruled out small-scale, reactive culling of badgers, it gives us and the industry a greater impetus to focus our attention on other measures, such as the development of an improved diagnostic test, improved biosecurity and husbandry, and the development of a vaccine.

  Full details available on Defra's website http:// www.defra.gov.uk/animalh/tb/culling/index.htm
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  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what research she has undertaken on whether effective control of bovine TB can be achieved solely by means of herd bio-security and good animal husbandry. [142002]

  Mr. Bradshaw
  An investigation, costing approximately £0.5 million, of potential badger/cattle interactions and how cattle husbandry methods may limit these is being funded by Defra. The final report will be published after the investigation ends in December 2005.

  A survey known as TB99 is under way and assesses potential risk factors that may predispose herds to TB outbreaks. The survey was delayed because of the foot and mouth disease outbreak but is back on course.

  Advice leaflets on the health and welfare of livestock are available from Defra's website. Important advice on preventative strategies for avoiding introduction of cattle diseases, such as bovine TB, can be found in the leaflets "Golden Rules for a Healthy Herd" and "TB in Cattle—Reducing the Risk".

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what advice is given to farmers by her Department on bio-security measures aimed at preventing infection of cattle by TB. [142004]

  Mr. Bradshaw
  Defra has produced a concise list of disease prevention measures (including the need to always know the health status of animals being bought or moved) in the form of a yellow card which was developed with livestock industry representatives and vets. It was sent to all livestock farmers in 2002, and is available on the Defra website.

  The Defra booklets "TB in Cattle—Reducing the Risk", "Golden Rules for a Healthy Herd" and Farm Biosecurity—Protecting Herd Health", which contain guidance on disease control measures, are also available from the Animal Health Divisional Offices or on the Defra website.

  Mr. Paterson
  To ask the Secretary of State for Environment, Food and Rural Affairs what effect delays in obtaining TB culture tests results have had on the reactive cull trial. [142336]

  Mr. Bradshaw
  In the majority of cases TB infection would have been confirmed on gross pathology, in abattoirs, by the presence of visible lesions, so culture results are of significance in only the non-visible lesion cases which were positive to the tuberculin test. Delays in culture results will have contributed in part to delays in the notification process but administrative and logistical delays, including the no cull period, would have a greater significance.

  Dairy Farming
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs how many dairy cows there were in England in each of the past five years; and what the average size of dairy herds was in each year in(a) Cornwall and (b) Devon. [140715]

  Mr. Bradshaw
  The information is in the table.
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  Dairy Cows in Cornwall and Devon 1998—2002

  Dairy Cows

  Holdings

  Average Herd Size

  Devon CC

  1998

  160,039

  2,396

  67

  1999

  163,242

  2,278

  72

  2000

  154,707

  2,151

  73

  2001

  138,789

  1,84375

  2002

  144,148

  1,798

  80

  Plymouth

  1998

  659

  6

  110

  1999

  664

  6

  111

  2000

  —1

  —1

  —1

  2001

  —1

  —1

  —1

  2002

  —1

  —1

  —1

  Torbay

  1998

  351

  1999

  368

  2000

  262

  2001

  268

  2002

  —1

  —1

  —1

  Cornwall and the Isles of Scilly

  1998

  87,936

  1,381

  64

  1999

  89,747

  1.310

  69

  2000

  85,882

  1,281

  67

  2001

  87,513

  1,222

  72

  1 Denotes that the data have been treated to avoid disclosure of information relating to individual holdings.

  Note:

  Figures for 1998 and 1999 show main holdings only, from 2000 onwards minor holdings are also included.

  Source:

  June Agricultural Census

  Farm Subsidies (CAP)
  Andrew George
  To ask the Secretary of State for Environment, Food and Rural Affairs what advice her Department has offered tenant farmers in respect of the extent to which the forthcoming single farm payments will be attributed to(a) the land and (b) the farming activity where decoupled payments will be made under the reformed Common Agricultural Policy. [140813]

  Mr. Bradshaw
  [holding answer 1 December 2003]Entitlements under the Single Payment Scheme will be allocated to farmers, whether owner-occupiers or tenants, rather than to the land or particular farming activities. Farmers may then use any eligible land at their disposal in support of an annual claim for payment against their entitlements. Eligibility for the payment will not be dependent on any farming activity other than keeping all agricultural land on the claimant's holding in good agricultural and environmental condition.

  Foot and Mouth
  Mr. Roger Williams
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will reconsider the payment of slaughter premium on adult bovines slaughtered on farm through the Livestock Welfare Disposal Scheme during the foot and mouth outbreak because the farming businesses were subject to Form D movement restrictions. [142441]

  Mr. Bradshaw
  [holding answer 8 December 2003]No. In deciding to make ex gratia payments equivalent to the Slaughter Premium entitlement, plus interest, on all adult cattle killed in abattoirs under the Livestock 530W
  Welfare (Disposal) Scheme we have taken account of the eligibility conditions applicable to the payment of Slaughter Premium.

  Large Combustion Plant Directive
  Mr. Clapham
  To ask the Secretary of State for Environment, Food and Rural Affairs what the basis was of her decision to recommend to the European Commission on 27 November a national plan rather than an emissions limit value approach on the Large Combustion Plant Directive. [141322]

  Mr. Bradshaw
  [holding answer 4 December 2003]The Government's decision to submit a national plan to the Commission was in order to keep the option open. The Directive requires that any national plan is submitted to the European Commission by 27 November 2003. The Government considers that further analysis is required before taking a decision which implementation approach it is in the UK's interest to adopt. The UK can withdraw the plan if further analysis suggests that the emission limits approach is in the UK's best interest. A decision on whether to withdraw the national plan would be taken before spring 2004.

  Mr. Clapham
  To ask the Secretary of State for Environment, Food and Rural Affairs which of the two options under the Large Combustion Plant Directive other European countries have opted for; what discussions she has had with the Department of Trade and Industry on the option that fits most constructively with their energy policy; and what inquiries she has undertaken to determine the effects of implementing a national plan approach on UK energy jobs during the period in which further analysis on the two approaches is completed. [141324]

  Mr. Bradshaw
  [holding answer 4 December 2003]In addition to the UK, Ireland have submitted a national plan to the European Commission, and that several other Member States are likely to submit national plans.

  Government decisions on implementing the Large Combustion Plants Directive (2001/80/EC) were reached following extensive contacts with all Departments having an interest in the issue. Both approaches are compatible with the Government's energy policy, but this is an area where we expect to undertake more analysis; for example, on issues surrounding security of supply.

  Mr. Clapham
  To ask the Secretary of State for Environment, Food and Rural Affairs what the sensitivities associated with each option under the Large Combustion Plant Directive referred to in the press statement her Department issued on 27 November are; and if she will make a statement. [141325]

  Mr. Bradshaw
  The Government have decided to look further into whether there is a different impact on the coal industry resulting from the emission limits approach to that from the national plan approach method of implementing the revised Large Combustion Plants Directive (2001/80/EC) for plants first licensed before July 1987. In addition there is a possible direct sensitivity to other policies, for example in connection with the UK's implementation of the European Union Emissions Trading Scheme, and the effect of the decision on the security of energy supplies.

  Sea Birds
  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what work her Department is doing to establish the size and distribution of offshore bird populations; and if she will make a statement. [141943]

  Mr. Bradshaw
  The Seabirds at Sea survey is a part Government funded national survey under the JNCC management. The survey does not cover all our seas on an annual basis, but areas of our seas have been selected each year since 1979. In the main our knowledge of the distribution of bird populations in the offshore environment comes from species surveys, many of which have been done in response to development pressures and some of which have been part funded by the country conservation agencies.

  In addition to this work some information is gathered on both numbers and distribution around our coasts from the BTO/WWT/RSPB/JNCC Wetland Bird Survey, which is the part-government funded national scheme for counting waterbirds in the UK. This scheme relies on observers on land and therefore does not provide full coverage of birds that use the open sea.

  The JNCC and WWT are, within their partnership, currently developing a strategy for monitoring sea ducks, divers and grebes, and JNCC will present this to government as formal advice in 2004.

  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what work her Department is doing to establish the size and distribution of offshore populations of the common scoter; and if she will make a statement. [141944]

  Mr. Bradshaw
  The Seabirds at Sea survey is a part Government funded national survey under the JNCC management. The survey does not cover all our seas on an annual basis, but areas of our seas have been selected each year since 1979. In the main our knowledge of the distribution of bird populations in the offshore environment comes from species surveys, many of which have been done in response to development pressures and some of which have been part funded by the country conservation agencies.

  In addition to this work some information is gathered on both numbers and distribution around our coasts from the BTO/WWT/RSPB/JNCC Wetland Bird Survey, which is the part-government funded national scheme for counting waterbirds in the UK. This scheme relies on observers on land and therefore does not provide full coverage of birds that use the open sea.

  The JNCC and WWT are, within their partnership, currently developing a strategy for monitoring sea ducks, divers and grebes, and JNCC will present this to government as formal advice in 2004.

  While there is no national scheme we do know that that the UK wintering population of common scoter is estimated to be 50,000 individuals (Kershaw and Cranswick. 2003. Biological Conservation 111: 91–104) and those of other species can be found on the WWTs website at: http://www.wwt.org.uk/publications/default. asp?PubID = 14
  532W
  The distributions of these birds can be found in the JNCC publication "An Atlas of seabird distribution in north-west European waters" (Stone et al. 1995).

  Mr. Laurence Robertson
  To ask the Secretary of State for Environment, Food and Rural Affairs what progress her Department is making in designating Shell Flat, Liverpool Bay as a special protection area; and if she will make a statement. [141942]

  Mr. Bradshaw
  The Statutory Nature Conservation Agencies are currently verifying survey data for the common scoter population in the Liverpool Bay area, including Shell Flat. Once the data has been scientifically verified a site proposal will be submitted to this Department. English Nature would then undertake a full public consultation exercise before any Special Protection Area is classified.

  Pet Pigs
  Mr. Steen
  To ask the Secretary of State for Environment, Food and Rural Affairs if she will make a statement on licences for walking pet pigs; and what plans she has to bring forward legislation on such licences. [143223]

  Mr. Bradshaw
  Pigs spread pig diseases rapidly. In order to track movements and reduce the potential for disease, pet pig walking licenses were introduced in 1995. The first legislation to require these licenses was the Pigs (Records, Identification and Movement) Order 1995. The Pigs (Records, Identification and Movement) Order 2003 continues to require these licences to be issued by the local Divisional Veterinary Manager.

  Mr. Steen
  To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the number of pet pig walking licences issued; what the cost has been of issuing licences; and what plans she has to require the issue of licences for walking pet sheep. [143224]

  Mr. Bradshaw
  Pet pig walking licences are issued as routine work by Defra Local Animal Health Divisional Offices. They allow Defra to minimise the risk of disease spreading from pet pigs to commercial herds. No central record is maintained. To obtain details of the licences issued would result in disproportionate costs.

  There are no plans to introduce legislation to require pet sheep walking licences.

  Pharmaceutical Crops
  Gregory Barker
  To ask the Secretary of State for Environment, Food and Rural Affairs what representations she has received about proposals to test pharmaceutical crops in the UK. [138806]

  Mr. Morley
  We have received no such representations. Commercial testing of crops for pharmaceutical use is a matter for the industry. The relevant statutory safeguards would need to be complied with, for example in the cultivation of hemp and other similar crops for authorised purposes. There have been no proposals to release GM crops modified for the production of pharmaceutically active components.

  Regulations (Consultation)
  Brian Cotter
  To ask the Secretary of State for Environment, Food and Rural Affairs what proportion of regulations introduced by the Department have been subject to a consultation period of less than 12 weeks since the introduction of the Code of Practice on Consultations. [142490]

  Alun Michael
  The Cabinet Office Code of Practice on Written Consultation came into effect on 1 January 2001. In the period 1 January 2001 to 31 December 2002 Defra has published 141 consultations under the Code, of which 87 lasted for less than 12 weeks.

  Wood for Good Campaign
  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs whether she plans to continue with funding of the Wood for Good campaign beyond the end of 2003; and if she will make a statement. [142228]

  Mr. Bradshaw
  The Forestry Commission is planning to continue to support the wood for good campaign in 2004 through its funding partnership with UK and Nordic producers.

NORTHERN IRELAND

  Big Conversation
  Mr. Heald
  To ask the Secretary of State for Northern Ireland what visits(a) he and (b) Ministers in his Department (i) have made and (ii) plan to make using public funds in connection with the Big Conversation; how many civil servants accompanied each Minister in respect of such visits; what the cost to public funds was of visits by (A) each Minister and (B) civil servants in connection with the Big Conversation; and if he will make a statement. [143155]

  Mr. Paul Murphy
  I refer the hon. Member to the answer provided by my right hon. Friend the Leader of the House on 9 December 2003,Official Report, Vol. 415, column 355W.

  Human Rights
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland (1) if he will list the amendments made to the Northern Ireland Human Rights Action Plan as a result of proposals made by his staff; [141856]

  (2) if he will place in the Library copies of e-mail exchanges between his office and the offices of the Northern Ireland Human Rights Commission that relate to the preparation of the Human Rights Commission Action Plan. [141857]

  Mr. Paul Murphy
  My officials met the Chief Commissioner of the Northern Ireland Human Rights Commission on 6 October and offered some general suggestions, in line with the Commission's independence, about ways in which the Commission might wish to consider strengthening the Action Plan in relation to 534W
  communications, strategy and organisation. No particular amendments were requested either in discussion or by e-mail, since it was understood that the Action Plan would be the Commission's alone.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland what provisions of the Paris Principles govern relations between his officials and members of the Northern Ireland Human Rights Commission. [141858]

  Mr. Paul Murphy
  The Northern Ireland Act 1998 governs relations between the Northern Ireland Office and the Northern Ireland Human Rights Commission. Nonetheless the Government believes relations between the two organisations are in line with the provisions of the Paris Principles.

  Prison Officers
  Lady Hermon
  To ask the Secretary of State for Northern Ireland what meetings he has had with the Northern Ireland Prison Officers Association in relation to recent strike action by prison officers in Northern Ireland. [142669]

  Mr. Paul Murphy
  The lead in the matter of the strike action had been taken by the Minister of State, who had several meetings with the Prison Officers Association. I have been kept fully informed of events but have not been directly involved in meetings with the union representatives.

  Saintfield Yarns
  Mrs. Iris Robinson
  To ask the Secretary of State for Northern Ireland what assistance is being given to the former employees of Saintfield Yarns by government agencies to access(a) re-training and employment opportunities and (b) redundancy and benefits payments before the Christmas period. [142697]

  Mr. Pearson
  Following notification of closure at Saintfield Yarns, the Department for Employment and Learning's Ballynahinch JobCentre offered to the company its job brokerage service and a full range of advisory services relating to training opportunities, redundancy payments and benefit entitlement. This took place over two days on the employer's premises and approximately 100 employees availed of the service. Representatives of the Social Security Agency, Invest NI, Enterprise Ulster, and local training organisations were also involved.

  In addition, representatives from Marks and Spencer and Antrim Carpets were available to discuss job opportunities and to distribute application forms.

  The Department has received 168 applications for Redundancy and Insolvency payments from former employees. These claims are being verified and processed and all eligible applicants are likely to receive a redundancy payment before Christmas. It is also anticipated that all claims for benefit will be processed within the same timescale.

  JobCentre staff are providing continuing support to all who require it.

NORTHERN IRELAND

  Police Oversight Commissioner
  The Secretary of State for Northern Ireland (Mr. Paul Murphy)
  I have today laid before this House a copy of the Oversight Commissioner's third statutory report for the year 2003 which is being published today, in accordance with Section 68(4)(a) of the Police (Northern Ireland) Act 2000.

  I announced by way of a press release issued on 13 February 2003 the extension of the life of the office of the Police Oversight Commission for two years to 31 May 2005.

  I also announced at the same time Tom Constantine's agreement to extend his original three year commitment as Oversight Commissioner until December 2003. Mr Constantine will be succeeded in the New Year by present Chief of Staff Al Hutchinson.

  I would like to take this opportunity to pay a sincere tribute to Tom Constantine, particularly his tremendous commitment and professionalism during his time as Oversight Commissioner.

HOME DEPARTMENT

  Libyan Visa Policy
  The Minister for Citizenship and Immigration (Beverley Hughes)
  Changes in the way visas are issued to Libyan nationals came into effect on 1 December 2003. Libyan nationals coming to the UK in any capacity other than for marriage were previously granted a maximum of six months leave to enter. This restriction has now been lifted. There will no longer be a distinction between Libyan nationals and the nationals of other countries who require a visa to come here.

  Restrictions on visas were the last of a range of immigration measures taken in relation to Libya to remain in force. They have been lifted as a reflection of the improved bilateral relationship between the United Kingdom and Libya, which has seen the recent agreement on Lockerbie. The Government continue to support the Metropolitan Police in seeking Libyan assistance with their investigation into the murder of WPC Fletcher.

DEPUTY PRIME MINISTER

  Building Regulations (Sound Insulation Testing)
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope)
  I have today laid an amendment to the building regulations deferring introduction of pre-completion testing of the sound 82WS
  insulation between new houses and flats to 1 July 2004. This will allow more time for consideration of the results of a consultation into the construction industry's proposals for the robust standard details alternative to testing.

  In the interim, consumers will remain protected by new standards introduced in July this year, which will continue to be enforced by building control bodies.

  Noise is one of the issues that people really care about. We remain committed to improving quality of life and will continue to work with industry to build better, safer and more environmentally friendly homes.

  The revised Part E (resistance to the passage of sound) of the building regulations came into force on 1 July 2003 and introduced requirements for pre-completion testing of sound insulation between dwellings. For dwellings created by conversion work and new or converted accommodation that is not self-contained, the requirements for testing came into force on 1 July 2003. For new houses and flats it was due to come into force on 1 January 2004.

  This later date was to give the House Builders Federation (HBF) time to develop robust standard details—constructions that perform consistently well and so do not need regular testing. The HBF have now done this, and their proposals were subjected to a public consultation which ended on 10 November 2003.

  I will also be taking advice from the Building Regulations Advisory Committee, and will then decide whether or not to amend the building regulations and approved inspectors regulations to allow robust standard details to be used as an alternative to testing.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Fishing Vessels (Satellite Monitoring)
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw)
  In December 2002 the Council of Ministers decided that satellite monitoring for Community fishing vessels over 24 metres should be extended, first to vessels over 18 metres from 1 January 2004 and then to vessels over 15 metres from 1 January 2005. Detailed rules subsequently adopted by the European Commission in October 2003 require Member States to take measures to ensure that satellite tracking devices fitted to fishing vessels do not permit the input or output of false positions and are not capable of being over-ridden.

  To secure the maximum enforcement benefit from vessel monitoring systems it has been decided that tracking devices fitted to UK fishing vessels should be fully "tamper proof" and dedicated to position reporting.

  Since such terminals may not be used by vessel owners or masters for business purposes, and subject to Parliamentary approval, DEER A has decided to meet the costs of fitting tamper proof terminals to those UK registered vessels for which it is the licensing authority. The arrangements will be time limited. They will apply to existing vessels and those that join the fleet before 31 December 2004. It is expected that around 280 vessels will be equipped with tamper proof terminals by the end of 2004 at an overall cost of less than £1 million.

CONSTITUTIONAL AFFAIRS

  Draft Single European Currency (Referendum) Bill
  The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie)
  I have today published, as Cm 6081, a draft Single European Currency (Referendum) Bill. The Chancellor of the Exchequer gave a commitment to Parliament in June 2003 that a draft Bill would be published later this year.

  This draft Bill sets out the Government's thinking on the terms on which any referendum on the European single currency would be held, subject to the five economic tests being met. This shows the Government's commitment to openness and transparency. Both the question and who would he able to vote in any referendum, if the five economic tests had been met, are set out in the draft Bill.

  The Government will report on progress of its reform agenda in the Budget next year. The Government can then consider the extent of progress and determine whether on the basis of it the Government makes a further Treasury assessment of the five tests, which—if positive next year—would allow it at that time to put the issue before the electorate in a referendum.

DEFENCE

  War Pensions Uprating
  The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin)
  The rates of War Pensions and Allowances are uprated annually in April, based on the Retail Prices Index (RPI) in the previous September. The RPI at September 2003 was 2.8 per cent. and this is the amount by which War Pensions and Allowances will be increased.

  The uprating of War Pensions and Allowances for 2004 will take place from the week beginning 12 April 2004.

  The new rates are shown in the following table.

  War Pensions Rates

  (Weekly rates unless otherwise shown)

  Rates 2003 £

  Rates 2004 £

  WAR PENSIONS

  Disablement Pension (100% rates)

  Officer (£ per annum)

  6.465.00

  6,648.00

  Other ranks

  123.90

  127.40

  Age allowances

  40%-50%

  8.30

  8.55

  Over 50% but not over 70%

  12.75

  13.10

  Over 70% but not over 90%

  18.15

  18.65

  Over 90%

  25.50

  26.20

  Disablement gratuity

  Specified minor injury (min.)

  788.00

  810.00

  Specified minor injury (max.)

  5,890.00

  6.055.00

  Unspecified minor injury (min.)

  326.00

  335.00

  Unspecified minor injury (max.)

  7.660.00

  7.874.00

  Unemployability allowance

  Personal

  76.55

  78.70

  Adult dependency increase

  43.15

  44.35

  increase for first child

  10.00

  10.30

  increase for subsequent children

  11.75

  12.10

  Invalidity allowance

  Higher rate

  15.15

  15.55

  Middle rate

  9.70

  10.00

  Lower rate

  4.85

  5.00

  84WS

  War Pensions Rates

  (Weekly rates unless otherwise shown)

  Rates 2003 £

  Rates 2004 £

  Constant attendance allowance

  Exceptional rate

  93.60

  96.20

  Intermediate rate

  70.20

  72.15

  Full day rate

  46.80

  48.10

  Part-day rate

  23.40

  24,05

  Comforts allowance

  Higher rate

  20.00

  20.60

  Lower rate

  10.00

  10.30

  Mobility supplement

  44.60

  45.85

  Allowance for lowered standard of Occupation (maximum)

  46.72

  48.04

  Therapeutic earnings limit

  3,510.00

  3,744.00

  Exceptionally severe disablement allowance

  46.80

  48.10

  Severe disablement occupational allowance

  23.40

  24.05

  Clothing allowance (£ per annum)

  160.00

  164.00

  Education allowance (£ per annum) (max)

  120.00

  120.00

  War widow(er)s' pension (further details in schedule WWP)

  Widow(er)s—private

  93.85

  96.50

  Widow(er)s' (other ranks)

  93.85

  96.50

  Widow(er)—Officer (£ pa max)

  5.786.00

  5.948.00

  Childless widow(er)s' u-40 (other ranks)

  22.50

  23.13

  Childless widow(er)s' u—40 (Officer £pa max)

  5,786.00

  5.948.00

  Supplementary Pension

  60.97

  62.68

  Age allowance
  (a) age 65 to 69

  10.75

  11.05

  (b) age 70 to 79

  20.55

  21.15

  (c) age 80 and over

  30.55

  31.40

  Children's allowance

  Increase for first child

  14.80

  15.20

  Increase for subsequent children

  16.50

  16.95

  Orphan's pension

  Increase for first child

  16.80

  17.25

  Increase for subsequent children

  18.45

  18.95

  Unmarried dependant living as spouse (max)

  91.50

  94.15

  Rent allowance (maximum)

  35.40

  36.40

  Adult orphan's pension (maximum)

  72.15

  74.15

FOREIGN AND COMMONWEALTH AFFAIRS

  FCO Travel Advice/Security of Overseas Posts
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  In this written Ministerial Statement I announce a review of the basis of the FCO's travel advice, and an internal review of the FCO's security strategy for its posts abroad. Terms of reference are annexed. The conclusion of the travel advice review will be placed before both Houses.

  Since September 11 2001, it has been increasingly clear that we face a form of international terrorism which aims not only to take life randomly by suicide attack, but which seeks to use fear and instability to undermine the freedom and prosperity which the terrorists hate.

  Our policy must be to deny the terrorists any advantage. We must take prudent precautions, while minimising the disruption which terrorists want to cause. Some disruption is, of course, inevitable if we are to make likely targets as secure as we can. But we must all be clear that total security is not possible. Everybody who goes about their business in a modern city and elsewhere makes a balanced judgment of risk against security. People continue to go about their daily lives—

  85WS
  vigilantly, amid sound precautions—because they are not prepared to give the terrorists satisfaction. Our determination to maintain as normal a life as possible is a weapon against terrorism.

  It is important that British citizens travelling abroad should have the best possible information on risk, from the Government. We have extensively reviewed and improved our travel advice since Bali. But I have asked officials to look again at some of the underlying issues, in light of recent experience. What is the right balance between information, warning and advice? I am clear that our advice should give the most detailed and timely factual information possible, but in what circumstances should this information be complemented, where appropriate, with advice not to travel? What is the impact and the cost of our warnings not to travel? And what would be the implications of a different approach? We may conclude that the nature of our advice is as good as we can make it, or we may find that improvements are necessary. We will be seeking as many views as possible including, of course, that of Members of both Houses.

  Security is always at the top of our agenda. We keep the security of all our posts under constant review and frequently re-assess the risks and the measures needed to manage them in the light of changing threat levels. Funds have been authorised for the most urgent expenditure. Following the attack on our consulate in Istanbul, which showed that our overseas missions and staff are in the front line, we immediately asked all posts to check their security measures. We are also looking at additional measures we can take at high-risk posts. In addition, we have instigated an internal review of the FCO's security strategy, in particular the balance between security and operational effectiveness.

  The terms of reference for these reviews are as follows:

  TRAVEL ADVICE REVIEW

  Terms of reference

  How can FCO advice best help UK travellers?
  How can our Travel Advice best help its users to make informed, responsible decisions about possible risks overseas, particularly from terrorism, and ways they can minimise them?
  What should be the balance in our Travel Advice between information, warning and advice (ie between description of risks in particular countries and prescription of action in response)?
  How far can risk analysis and its presentation be made more objective (eg through statistical analysis and comparison with non-terrorist hazards)?
  What would be the implications of variations in this balance for the FCO, others in HMG who help produce the Advice, and its users?
  How do we link threat level assessments and public information?
  How far should we take into consideration the capabilities of host governments in reaching decisions on Travel Advice?

  What are the wider implications of FCO Travel Advice?
  In responding to a terrorist attack, how can we ensure prudent precaution does not become over-reaction which risks playing into the hands of the terrorists?
  86WS
  Methodology

  During the Review we will consult key stakeholders:
  Departments within HM Government, including the Home Office, the Department of Trade and Industry, the Department for Transport, the Ministry of Defence and the Cabinet Office;
  Users of Travel Advice, including the travel industry, the insurance industry, the public (via website feedback), and Non Governmental Organisations;
  Analogous governments, including the US, Australia, Canada, New Zealand and European partners;
  Governments of destination countries.

  Timescale
  We aim to complete the Review by the end of January 2004.

  SECURITY REVIEW

  Terms of reference
  To review the basis for the FCO's security strategy. In particular to re-examine the balance between security and operational effectiveness.

  UN Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment
  The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw)
  I am pleased to be able to announce that, today, the UK will ratify the Optional Protocol to the UN Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (OPCAT) when our permanent representative to the UN will deposit the instrument of ratification with the UN Secretary General.

  The UK will become the first member of the European Union and the third country in the world to ratify the Optional Protocol. The UK believes that the Protocol will promote a more intensive and concerted approach to eradicate torture through a preventive system of regular, independent visits to places of detention. We will now undertake a campaign urging other countries to sign, ratify and implement both the Convention Against Torture and the Optional Protocol. The Protocol will come into force when 20 countries have ratified it.

  The UK is committed to the fight against torture. The Foreign and Commonwealth Office's anti-torture initiative, launched in 1998. continues to provide a focus for us on this issue. The UK played an important role in securing the adoption of the Optional Protocol in 2002 by undertaking extensive lobbying of countries around the world to support the Protocol. The follow-up to our ratification of the OPCAT will be an important part of the current phase of the initiative.

HEALTH

  Mental Health Act Commission Report 2001—03
  The Minister of State, Department of Health (Ms Rosie Winterton)
  The Mental Health Act Commission's 10th biennial report, entitled "Placed Amongst Strangers", has been published today. Copies have been placed in the Library.

  Depressive Illness (Children and Adolescents)
  The Parliamentary Under-Secretary of State for Health (Dr. Stephen Ladyman)
  The Department has received new advice from the Committee on Safety of Medicines (CSM) about the use of selective serotonin re-uptake inhibitors (SSRIs) in children under the age of 18 for the treatment of major depressive disorder (MDD). An expert working group of the CSM was established earlier this year to look at the safety of the whole class of SSRIs. The group has already advised on paroxetine and the related anti-depressant venlafaxine. They have now concluded that the balance of risks and benefits for the treatment of major depressive disorder (MDD) in under 18s is unfavourable for the SSRIs sertraline, citalopram and escitalopram and unassessable for fluvoxamine.

  This new advice follows announcements in June and September that paroxetine and venlafaxine should not be used in children and adolescents under the age of 18 years to treat depressive illness. Like paroxetine and venlafaxine, none of these drugs has ever been licensed for use in under 18s, but we know they are used in this age group outside licensed indications, where prescribers make a judgment on their own responsibility that it is the right treatment for a particular patient.

  Only fluoxetine (Prozac) was shown in clinical trials to have a positive balance of risks and benefits in the treatment of MDD in under 18s. There is no evidence to date to suggest that the risks of treatment outweigh the benefits in adults. The CSM expert group has delivered comprehensive advice on the use of SSRIs in children and young people following a thorough review of all the evidence available. This represents the most detailed review to be completed so far and gives parents, young people and those who treat these serious illnesses the information they need to make informed decisions about treatment. The expert group will now focus their attention on finishing a compete review of the safely of the entire class of medicines in adults and young adults.

  Communications to patients and prescribers are taking place today and copies of these materials have been placed in the Library. The benefits of taking these drugs are well established, but we know that some patients suffer significant side effects. Patients over 18 and patients who are benefiting from SSRIs should not be frightened into stopping their medication abruptly. Patients who are experiencing any side effects or are concerned about their treatment should discuss these with their doctor. The Government are committed to ensuring that the wider aspects of suicide prevention remain at the top of the agenda and the National Institute for Mental Health in England has made suicide prevention one of its core policy programmes.

WORK AND PENSIONS

  Pension Credit
  The Secretary of State for Work and Pensions (Mr. Andrew Smith)
  I can now report further progress on the take-up of Pension Credit, which became payable on 6 October.

  There are now 2.06 million pensioner households (over 2.43 million individuals) being paid Pension Credit, including 90,000 new Pension Credit households (over 106,000 individuals) in November. As at 30 November, there are over 1.37 million households (over 1.61 million individuals) now receiving more money as a result of the introduction of Pension Credit. The Pension Credit Application Line, at our four sites across the country, has received 1.64 million calls since it became operational on 7 April, and 96 per cent. of calls have been answered within 30 seconds. Some 490,000 signed applications have been returned to Pension Centres since the campaign began in April. The average Pension Credit award is £46.40 per week.

  Our direct mail campaign is continuing, supported by a major advertising campaign on TV and in the press which began in September. We are continuing to work with partner organisations, such as Help The Aged, Age Concern and Citizens Advice, amongst others, both at a national and local level, to encourage eligible people to take up their entitlement.

  There is plenty of time for pensioners to apply for Pension Credit. To ensure that pensioners do not lose out, there is a twelve month backdating provision until October 2004. This will allow applications to be backdated to October 2003, where entitlement exists, or to the date entitlement begins if this is later.

  I am placing in the Library a set of charts and tables showing progress so far, including regional breakdowns of the number of Pension Credit households and numbers of Pension Credit awards in Parliamentary constituencies in Great Britain. Copies are also available for hon. Members in the Vote Office.

  This is the second of the monthly progress reports on take-up of Pension Credit, which will continue to be provided on a regular basis.

DEPUTY PRIME MINISTER

  Homelessness Grants
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper)
  The Office of the Deputy Prime Minister has announced today resource grants totalling nearly £45 million to local housing authorities in England for 2004–05 and nearly £14 million to voluntary sector agencies. Copies of a list which details amounts to be allocated to individual local housing authorities and other organisations are available in the Libraries of both Houses. These allocations will help local authorities and voluntary sector agencies to sustain progress in reducing rough sleeping and ending all but the emergency use of B&B hotels for homeless families with children, and to go further in preventing wider homelessness problems more effectively, through local homelessness strategies.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Salisbury.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Falconer of Thoroton):My Lords, before business begins, may I take the opportunity to inform the House that I shall be undertaking a ministerial visit to New York and Washington DC on Monday, 15th and Tuesday, 16th December? Accordingly, I trust that the House will grant me leave of absence.

Human Rights
Lord Avebury Lord Avebury asked Her Majesty's Government:
What are the priorities of the Foreign and Commonwealth Office for human rights in 2004.
Baroness Crawley: My Lords, the Foreign and Commonwealth Office's strategy UK International Priorities, a parliamentary Command Paper, was published on 2nd December. It makes clear that promoting human rights, along with democracy and good governance, is a priority for next year and, indeed, for the next 10 years. The thematic areas identified by Ministers as being of particular importance are: combating torture, promoting the abolition of the death penalty, freedom of expression, freedom of religion, child rights and the rule of law.
Lord Avebury: My Lords, I thank the noble Baroness for that reply and the informative and well presented report on human rights by the Foreign and Commonwealth Office, which she mentioned. Does she not agree that it would be a fitting memorial to the late Sergio Vieira de Mello if the international community could create a fund in his memory to remedy the serious shortage of resources; faced by the Human Rights Commission? Will the Government also consider pruning the commission's mandate on subjects of little or no relevance to human rights, and for the remainder, proposing that states that fail to co-operate with the United Nations be named and shamed before each meeting of the commission and that the rapporteurs in question issue written reports for consideration by the commission?
Baroness Crawley: My Lords, I thank the noble Lord, Lord Avebury, for his kind remarks about the annual human rights report, which, noble Lords will know, has been published since 1997. The noble Lord has a wealth of experience of international institutions and their strengths and weaknesses. We recognise that the UN's response to human rights violations around
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the world needs to be further improved. We shall take on board, and look closely at, the areas for improvement that he has raised.
As the noble Lord knows, the UK is working to achieve improvement through practical support for the Office of the High Commissioner for Human Rights and substantial input to the Human Rights Commission. I agree with him that the UN human rights mechanisms play a vital role. Although I would not go so far as to say that the Government will take up his suggestions completely, I shall call on all member states fully to co-operate with the commission and mechanisms such as thematic rapporteurs and country rapporteurs. The UK will always agree to a visit by any rapporteur on those issues.
Lord Archer of Sandwell: My Lords, has my noble friend noticed the paragraph in the annual report that refers to the overloading of the Human Rights Commission's agenda with topics that have very little to do with human rights, at a time when the commission is desperately short of resources? Does she agree, for example, that toxic waste, however important as a topic, does not really belong on the Human Rights Commission's agenda? Can We do anything to discourage that?
Baroness Crawley: My Lords, I think that UN members have agreed that the UN's work in this area must be reprioritised. That restructuring must happen with human rights and throughout the UN's work. The issue of toxic waste relates to sustainable development and ensuring that human rights exist in the future, for which sustainable development is very important.
Lord Lamont of Lerwick: My Lords, when human rights conflict with the need to find co-operation in the war against terrorism, which takes priority? In particular, will the Government take up with the Russian Government the OSCE criticisms of corruption and intimidation in the Russian elections?
Baroness Crawley: My Lords, in response to the noble Lord's last point, we have taken up with the Russian Government very robustly the previous election results and those of last weekend. We note the OSCE's preliminary findings on Sunday's parliamentary elections. We take those concerns very seriously and now await the detailed report of the OSCE's Office for Democratic Institutions and Human Rights. We hope that the Russian authorities will follow up any recommendations made in that report before the Russian presidential elections in 2004.
The war on terror is compatible with the protection of human rights. The United Kingdom Government remain fully committed to human rights. Measures by states to combat terrorism must be proportionate and justifiable. Promoting human rights, democracy, good governance and the rule of law is, in the long term, the best guarantee of our security.
The Earl of Sandwich: My Lords, does the noble Baroness agree that the definition of human rights is so

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widely drawn that it implies a limitless use of resources? In Afghanistan, for example, where corruption comes into the ambit of human rights, as the noble Lord, Lord Lamont, mentioned, there is a very small commission with very limited resources. How will the Foreign Office give it such support, as it could go in any direction?
Baroness Crawley: My Lords, as the noble Earl will know, the Foreign Office contributes regularly to the UN's human rights work. The human rights budget has increased over the past year. We will continue to try to focus that budget far better than in the past. The noble Lord, Lord Avebury, mentioned Sergio Vieira de Mello's tragic and untimely death in Iraq earlier this year. Of course, he was starting to make the UN human rights system more focused and more efficient. It is important that we try to build on his good work.
Lord Howell of Guildford: My Lords, is there not a danger of overlap in all these human rights initiatives? The UN Commission has already been mentioned, there is the Commonwealth Human Rights Fund, the EU human rights initiative, the Africa pool and the global pool. Is there not a danger that we are spreading our sources a little thinly?
Baroness Crawley: My Lords, we try to work as efficiently and effectively as we can with partners on the world stage to make the regime on human rights worldwide as protected as possible. From his great experience, the noble Lord will know that, since 11 th September, we live in a world where it is important to sustain human rights in the growing problems that all countries—democratic and otherwise—face as far as terrorism is concerned.

Scottish Parliament: Voting System
2.45 p.m.
Lord Steel of Aikwoodasked Her Majesty's Government:
Whether, following the introduction of new constituency boundaries in Scotland for the election of Westminster Members of Parliament, they will consider the introduction of the single transferable vote in multi-Member seats for elections to the Scottish Parliament.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin):
My Lords, the Scotland Act 1998 specified the voting system to be used at elections to the Scottish parliament. There are no plans at this time to change that. The case for moving from the present system would need extensive consultation before legislation could even be considered.
Lord Steel of Aikwood: My Lords, I find that a slightly disappointing Answer because, surely, it is inconceivable that we will have in future two different
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sets of constituency boundaries in Scotland—73 for the Scottish Parliament and 56 for the Westminster Parliament. Would it not be more sensible to use the new Westminster boundaries as building blocks for multi-Member seats for the Scottish Parliament?
Lord Filkin: My Lords, I am well aware of the argument made by the noble Lord, and others, about this being a desirable point at which to introduce STV into the electoral system for Scottish parliamentarians. Having said that, the decision to retain 129 MSPs was taken with explicit attention being given to the fact that it would produce non-coterminosity—if I can use that ghastly expression—between the two electoral boundaries. Furthermore, the review of the Electoral Commission in May this year could not find any evidence of a reduction in voting as a consequence. As the House will know, in December 2002, the then Secretary of State made at least a commitment to keep this issue under review; and we stand by that.
Lord Forsyth of Drumlean: My Lords, the Scottish Parliament sits only two days a week at most. Given the extreme concern down the Corridor in the other place about Scottish Members voting on English matters that have been devolved to Scotland, will the Minister consider getting rid of the 129 MSPs altogether and asking the Westminster MPs to sit in the Scottish Parliament on Mondays and Tuesdays, when Westminster could discuss English devolved business. On Wednesdays, Thursdays and Fridays they could come down and discuss UK business. That would save 129 MSPs and all the costs—they are all paid the same amount as in Westminster—and would do something for the hard-pressed taxpayer who is having to pay for the farce of the Scottish Parliament.
Lord Filkin: My Lords, we are always open to consider efficiency measures, however outlandish. But we are clear that devolution to Scotland has been a considerable success and is well supported by people in Scotland.
The Earl of Mar and Kellie: My Lords, the Minister will be mindful that the Scottish Parliament is soon to legislate for STV to be used in the Scottish local government elections. Given that those elections are held on the same day as those for the Scottish Parliament, does the Minister see the sense in having the same electoral system used on the same day? Further, does the Minister see the sense of clarifying the confusion that currently exists about having 73 constituency Members and 56 regional list Members, when STV will produce 129 constituency Members?
Lord Filkin: My Lords, this appears to be a multiple attempt to get me to sign up at the Dispatch Box to STV, which is perhaps more than my job is worth. Having said that, we note with interest the decision by the Scottish Parliament on a devolved matter; namely, that it will legislate to move local government elections to STV. It will be most interesting to watch how that develops.

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If anyone really believes—and I do not think that there is any evidence to support this—-that having the same elections on the same day using different systems is a major problem (it was not a problem in May this year), it is still open to the Scottish Parliament to change the date of the local government elections.
Lord Monro of Langholm: My Lords, if the independent Boundary Commission reports this year or in 2004, will the Minister give me an absolute guarantee that the Government will vote through the report and have the new constituencies in place for 2005?
Lord Filkin: My Lords, the noble Lord will either be pleased or saddened to know that my answer is exactly the same as the one I gave in July this year. The timetable for the review is completely in the control of the Boundary Commission for Scotland and not that of the Government. The only qualification is that, as soon as it has reported, the Act specifies that the Secretary of State for Scotland must bring the relevant order before the House as soon as possible. That is not an open-ended timetable.
Lord Borrie: My Lords, can my noble friend say whether he has received an apology from the noble Lord, Lord Forsyth, for leaving early before the Question had been completed?
Lord Filkin: My Lords, I am absolutely certain that it is already in the post.
Baroness Knight of Collingtree: My Lords, is the Minister aware of the considerable irritation at the continuing unfairness of the east Lothian question not being settled? Will he not take action on that?
Lord Filkin: My Lords, my geographic sense is sometimes faulty, but I had thought that it was the West Lothian question. However, let us put that to one side—it is a slightly old question and may suffer from a bit of decay as a consequence. If you ask in the Dog and Duck whether this is an issue, there will be a resounding silence. The people of the United Kingdom strongly expect this Parliament to be a Parliament for the United Kingdom. I hope that all parties will support that and not be on a drift towards creeping federalism.
Lord Gordon of Strathblane: My Lords, does the Minister agree that if non-coterminosity of boundaries is thought to be a problem, another and perhaps more elegant solution might be to elect two MSPs on a first-past-the-post basis and thereby reduce the number of list MSPs, who are causing quite a bit of bother in Scotland?
Lord Filkin: My Lords, I admire the creativity of that suggestion. I shall duck the question, I think, on several grounds.
Lord Glentoran: My Lords, is the noble Lord aware that we have in Northern Ireland a one transferable
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vote system? Is he also aware that it is a complicated and expensive system and that, in our most recent elections, the election took place on Wednesday but the result was not determined until Friday evening? Is he further aware that in one case—in my county, County Antrim—12 counts were required, and I am not talking about recounts? At the end of the day, the system does not necessarily reflect the wishes of the electorate.
Lord Filkin: My Lords, the blunt answer is, "No, I was not aware of all of that", although as Minister for the Northern Ireland Court Service perhaps I ought to have been. However, I think that this matter requires a degree of maturity on the part of parliamentarians. We should recognise that there is no perfect electoral system in all situations; that different electoral systems have a different mix of advantages and disadvantages; and that the United Kingdom is showing some sense in recognising the benefit of having different electoral systems in different circumstances, without that automatically implying that we are moving towards one single monolithic solution.

Criminal Justice Act: Consolidation
2.53 p.m.
Lord Rentonasked Her Majesty's Government:
Given that much of the legislation dealing with criminal justice has recently been amended by the Criminal Justice Act 2003, whether they will take steps as soon as possible to consolidate that Act and those statutes which were subject to amendment.
The Attorney-General (Lord Goldsmith): My Lords, the Criminal Justice Act received Royal Assent less than three weeks ago. It is too early to say what consolidations might eventually be undertaken as a result of the Act's passage. However, the Government are committed to modernising and consolidating the criminal law with the eventual production of a criminal code in four parts as proposed by Sir Robin Auld. We are currently considering how best that work should be taken forward and will be looking at the Criminal Justice Act 2003 in that context.
Lord Renton: My Lords, while thanking the noble and learned Lord for that helpful reply, may I just point out that the recent Criminal Justice Act is about 450 pages long and that it makes many amendments to 24 previous statutes dealing with criminal law and justice and a few amendments relating to may other statutes? Quite frankly, if there is no consolidation, we shall have a chronic situation in dealing with this matter.
Lord Goldsmith: My Lords, consolidation is not always a straightforward task. In fact, the Criminal Justice Act 2003 itself contains an element of consolidation; for example, the sentencing provisions in Part 12 include a degree of re-enactment of previous provisions. However, to produce a full consolidation

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would place an intensive demand on the time of parliamentary counsel, require resources from departmental lawyers and require that we find a legislative vehicle. So while I understand what motivates the noble Lord in his Question, I hope that what I said before about the programme of codification which we have in mind will meet the objectives about which he is concerned.
Lord Goodhart: My Lords, does the noble and learned Lord accept that there are many other fields of statute law in which consolidation is highly desirable; for example, in the law of leaseholds? Why is it that we have had so few consolidation Acts in recent Sessions, and does the noble and learned Lord agree that consolidation is essential if the tracing of legislation is to be made reasonably simple?
Lord Goldsmith: My Lords, I entirely agree that consolidation is desirable. However, as I just said in answer to the noble Lord, Lord Renton, it is not a straightforward task. It can place intensive demands on the time of parliamentary counsel and the Law Commission, and it would be necessary to use departmental lawyers and administrators. It would also be necessary to find a vehicle for it. However, I understand the noble Lord's underlying point.
Lord Campbell-Savours: My Lords, does not the handling in this House of Clauses 41 and 42 of the Criminal Justice Act, which went far beyond acceptable convention, show that some Members of this House pay lip service to the primacy of the House of Commons? Should not the handling of Clause 42 in particular, on the question of serious fraud cases, become a cause ceélèebre in so far as it is damaging the relationship between the two Houses?
Lord Goldsmith: My Lords, I do not want to comment on the views of individual Members of this House, but I agree with my noble friend's underlying point about the constitutional importance of the primacy of the other place. As for Clause 42, which relates to serious fraud, as the Minister responsible for the Serious Fraud Office, I have real concerns about where we have ended up and about the undesirability—and this goes back way before this particular Act, to the Roskill report, many years ago— of expecting juries to sit 10 or 11 months or even longer listening to complicated matters and reaching a decision on them. I am very worried that we produce a two-tier system of justice—one for the white-collar criminal and one for the blue-collar criminal—by doing it that way.
Lord Carlile of Berriew: My Lords, using perhaps the Terrorism Act 2000 as a good example, does the noble and learned Lord accept that there has been extensive and repeated amendment of even very recent legislation? As a staging post towards codification of the criminal law, would the Government consider
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establishing a free website library so that police officers and others can see an up-to-date version at any given time of all important criminal justice legislation?
Lord Goldsmith: My Lords, when there is new legislation, a great deal of information is provided to those who have to operate with it. The Home Office issues circulars and guidance to the police. The courts, lawyers and other practitioners receive information from the Department for Constitutional Affairs. There are also websites; I am told that the Criminal Justice Act, for example, is explained on a website. As for the noble Lord's particular point on the Terrorism Act, I shall certainly ask for that to be considered.
Baroness Anelay of St Johns: My Lords, is not my noble friend Lord Renton right to have brought the House's attention to the fact that it is important to have consolidation of statute so that there is information which is clear to all about what the law actually means? While welcoming the very constructive answer of the noble and learned Lord, may I invite him to go further? As a first stage towards this review, on each and every occasion that a Bill is presented to this House, could we not have a Keeling schedule so that all matters may be properly debated and the public may see those matters?
Lord Goldsmith: My Lords, as the noble Baroness will recall, during passage of the Bill—certainly during passage of the part for which I was responsible—I made available to noble Lords taking part in the debate not quite a Keeling schedule, which would appear in the Act, but a print of what the statute would look like if the amendments were made.
However, I remind the House that in order to pass the legislation necessary for the protection of the people, we have to focus and concentrate on getting that legislation right. Resource allocations are between getting the legislation right, responding to the concerns of the public and producing something in a consolidated form that is available to lawyers and others to see how the Act looks.

European Union Accounts
3 p.m.
Baroness Blatchasked Her Majesty's Government:
What action they are taking on behalf of the United Kingdom about the Court of Auditors' refusal to sign off the European Union Accounts for the ninth successive year.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the UK Government have been working closely with the European Commission and other member states on a radical reform of the EU's financial management. Indeed, in its annual report, the Court of Auditors

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describes the reforms as "ambitious and fundamental". But that does not mean that everything has been done that should or could be done. The Government are studying the court's report in detail and will consider what further action might now be needed.
Baroness Blatch: My Lords, why do the Government not consider the situation an absolute scandal? If this had been a private company, no doubt by now it would be out of business and, probably, the directors even imprisoned. What is the Government's response to the Chief Internal Auditor, Jules Muis, who appeared on the "Today" programme yesterday? He said:
"We as an internal audit service have been advocating that there should be a new instrument … called an assurance statement by the member states so that there are proper systems in place that will ensure that the money is being used for purposes intended".
Lord McIntosh of Haringey: My Lords, I, too, read the transcript of Mr Muis's interview. I agree with very much of what he said. Indeed, we could be pursuing the matters to which he refers. The noble Baroness, Lady Blatch, will recognise that 80 per cent of the irregularities identified by the Court of Auditors take place in the member states rather than in the Commission. I remind the House that Mr Muis said that Neil Kinnock, the Commissioner in charge of reform, was making a serious attempt to tackle the cultural problems that exist in the Commission.
Baroness Noakes: My Lords, is the Minister satisfied that the UK is above reproach for its financial management and financial controls; that is, procedures in relation to EU funds?
Lord McIntosh of Haringey: My Lords, if 80 per cent of what is going wrong in terms of irregularities in Europe take place in member states, it is unlikely that the United Kingdom is totally free from all irregularities. I say that as a statistical statement rather than from any knowledge of detailed irregularities. At the same time, there are different kinds of irregularities. A great number that can be controlled are those involving over-claims for subsidies, in particular, under the common agricultural policy. On the whole, the United Kingdom has a good record in that respect.
Lord Renton of Mount Harry: My Lords, does the noble Lord remember that in the past the European Court of Auditors has been subject to a great deal of criticism? Not long ago, Sub-Committee A of your Lordships' European Union Select Committee recommended that membership of the Court of Auditors should consist of professional and, preferably, independent accountants, rather than having one former politician put on the Court by each of the member states. Does the noble Lord know whether any progress has been made in that regard?
Lord McIntosh of Haringey: My Lords, I am not aware that that recommendation has received any
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acceptance among other member states. It would require a fairly dramatic change of view in order to achieve that, although I have some sympathy with it.
Lord Willoughby de Broke: My Lords, following on from the point made by my noble friend Lady Blatch, are members of the Commission subject to the same legal constraints as directors of public companies? In other words, if they are seen to be acting in any way fraudulently, would they have their collar felt?
Lord McIntosh of Haringey: My Lords, they are accountable to those who put them there, which is not the same as being accountable to shareholders — nor can it be.
Lord Phillips of Sudbury: My Lords, can the Minister assure the House that the Government are doing everything they can to ensure that the institutions of the EU are being run with proberty and honesty? Is it not the case that there appears to be developing a differential observance of EU law by different member states? Might that not lead to a downward spiral of state adhesion to the legalities of the Union—in effect, the lowest common denominator?
Lord McIntosh of Haringey: My Lords, on the contrary. The accounts to which the original Question refers are the accounts for the year 2002. As of 1st January 2003, new financial regulations have been put in force with the strong support, encouragement and urging of the United Kingdom Government. They involve a completely new budget and accounting rulebook, which is the first updating of the rulebook since, I believe, 1977. The United Kingdom has taken a lead in the matter; indeed, it addresses the issues about which the noble Lord, Lord Phillips, is concerned.
Lord Howell of Guildford: My Lords, our consumer prices index relies on the new formula for European statistics which, presumably, is put together by Eurostat. Are we worried that the finances of Eurostat appear to be in complete chaos and under severe investigation?
Lord McIntosh of Haringey: My Lords, first, I deny that the finances of Eurostat are in complete chaos. There have been particular allegations of irregularity that have been dealt with. Eurostat is under investigation and the people who were considered to be responsible have been removed. Secondly, the consumer prices index, to which the noble Lord, Lord Howell, refers, has been accepted by other member states for some considerable time. It is entirely proper that in the pre-Budget report—which I notice the Opposition did not wish to debate in this House; I cannot think why—that is properly explained. We would have had an opportunity to debate it, which we have been denied by the Opposition.
Lord Stoddart of Swindon: My Lords, can the noble Lord give a latest and best estimate of the amount of

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fraud that has taken place annually? Bearing in mind that he said that 80 per cent of the fraud takes place in individual states, could he say which states are responsible, so that we should know exactly where the biggest problem lies?
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Stoddart, was not listening carefully enough. I did not use the word, "fraud". I said, "irregularities". A very high proportion of what has been identified by the European Court of Auditors as being wrong is genuine mistakes; that is, irregularities that take place and can be, and are, corrected. They are not fraud. There has never been any allegation that these irregularities are fraud.
Lord Stoddart of Swindon: My Lords, could the noble Lord answer my question? What is the best estimate of the extent and the amount of that fraud?
Lord McIntosh of Haringey: My Lords, I have just denied that the figures that I quoted are of fraud. I said that they are irregularities. I cannot answer on terms that do not accord with the facts.
Baroness Blatch: My Lords, does the Minister accept that there is an air of intimidation among the workforce in the European Union? If we take the Chief Internal Auditor's word for it, the workforce is judged more on the degree to which it does not rock the boat than on whether people expose what is occurring. For nine years, the accounts have not been written off. The air of complacency is palpable.
Lord McIntosh of Haringey: My Lords, I have some sympathy with what Mr Muis said in his interview. Indeed, he said what the noble Baroness, Lady Blatch, alleged. That is true in a great number of large organisations. The means of dealing with that is not to attack the individuals concerned, but to put in proper controls. That is exactly what Commissioner Kinnock, Commissioner Schreyer and the Commission generally have been doing.
Lord Stoddart of Swindon: My Lords—
Lord Grocott:My Lords, it is time for the next Question and two interventions are probably above par for the course.

International Arms Trade
3.10 p.m.
The Lord Bishop of Salisburyasked Her Majesty's Government:
Whether the international arms trade would be most effectively regulated through multilateral means.
Baroness Crawley: My Lords, there is already substantial multilateral work to regulate the trade in arms and other strategic goods, most notably the EU Code of Conduct on Arms Exports, for which the Government were a driving force. There is also a variety of other multilateral regimes that work to strengthen international strategic export controls. The UK is an active and constructive member of all the key regimes and appreciates their importance in raising international standards in export controls.
The Lord Bishop of Salisbury: My Lords, I thank the Minister for that reply. Does she agree that, after the passage of the Export Control Act 2002, the secondary legislation which followed it and the pledge given at the last general election to control British arms brokers "wherever they are located" will be unmet because a broker will still be able to transact a deal that is illegal in the United Kingdom simply by crossing the Channel? Will the Government therefore continue to throw their weight behind the drive to obtain an absolutely comprehensive international arms trade treaty?
Baroness Crawley: My Lords, in answer to the right reverend Prelate the Bishop of Salisbury, I believe that the secondary legislation to which he refers that is to come into operation on 1st May 2004 will tighten up on brokerage as regards the control regime for arms exports. We are confident that that will happen. Indeed, we have been a driving force in ensuring that it works across the European Union as well.
The right reverend Prelate asked whether we agree with the work that has been done by Amnesty International and Oxfam on the arms trade treaty. The Government fully support the aim of raising global export control standards. As noble Lords will know, the UK operates some of the most vigorous export control policies in the world and actively works to encourage other states to apply similar principles. We support in principle any measures that will bring the practices of other arms exporters into line with our own.
Baroness Northover: My Lords, does the noble Baroness agree with the recent UN reports on the Democratic Republic of Congo that foreign companies there are fuelling conflict with the rapid spread of small arms? Should not the UK Government take action to investigate properly the British companies listed in the UN report and not simply, as happened yesterday, announce aid for the area?
Baroness Crawley: My Lords, as for the position in the DRC, I shall be happy to reply more fully to the noble Baroness in writing. As I recall, we have asked for evidence of the perpetrations by companies to which she referred. So far, that evidence has not been forthcoming.
Lord Campbell of Alloway: My Lords, reverting to the Question and without any criticism of Her Majesty's Government on this affair, whose words and aspirations are totally laudable, multinational control

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of the arms trade is just a nonsense. Let us consider, for example, the exocets which did so much damage to that ship in the Falklands. Is it not quite ridiculous to pretend that we can ever achieve a multinational agreement?
Baroness Crawley: My Lords, the view taken is that the more multinational control there is, the safer and more accountable would be arms export regimes around the world. That is very much the view taken by the NGOs. However, I agree to some extent with the last point made by the noble Lord, that it is unlikely that that will happen in the near future. None the less, we must strive towards that aim because of the importance placed on strategic export controls in countries' national foreign policies. That is why there is something in the last point made by the noble Lord.
Lord Hylton: My Lords, can the noble Baroness tell the House what proportion of the very large number of bad debts within the Export Credits Guarantee Department are attributable to British arms exports? Does that not indicate that we need much stronger home controls?
Baroness Crawley: My Lords, on the specific issue of bad debt and how that refers to our own regime, perhaps I may write to the noble Lord. I do not have the detailed answer. However, I reiterate the point I made in my first response to the right reverend Prelate the Bishop of Salisbury. Britain has one of the strictest and most transparent arms export licensing systems of any country. Noble Lords may recall that when we came into government in 1997, we banned all torture equipment. That was the first time that such a ban was ever brought into force.
Lord Avebury: My Lords, the noble Baroness said that we have not received any evidence about the allegations made against British companies operating in the DRC connected with the illegal exploitation of resources and hence the illegal flow of arms in that country. Does she realise that, on 19th November, the UN Security Council passed a resolution requiring those states whose companies were named in the expert panel report to conduct their own investigations, not simply to wait until evidence is presented to them?
Baroness Crawley: My Lords, I thank the noble Lord for that information. What I sought to make clear in my earlier response is that we need to see evidence which backs up those allegations, as well as the naming of the companies.

Planning and Compulsory Purchase Bill
3.17 p.m.
Brought from the Commons; read a first time, and ordered to be printed.

Air Traffic Emissions Reduction Bill [H.L.]
Lord Beaumont of Whitley: My Lords, I beg to introduce a Bill to provide for the preparation and implementation of the integrated air transport plan to reduce air traffic emissions. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.— (Lord Beaumont of Whitley.)
On Question, Bill read a first time, and ordered to be printed.

Business of the House: Debate this Day
The Lord President of the Council (Baroness Amos):
My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Forsyth of Drumlean set down for today shall be limited to five hours.—(Baroness Amos.)
On Question, Motion agreed to.

Parliamentary Broadcasting Unit Limited (PARBUL)
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move en bloc the six Motions standing in my name on the Order Paper.
Hybrid Instruments
Moved, That a Select Committee be appointed to consider hybrid instruments and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

L. Campbell of Alloway,

V. Craigavon,

B. Fookes,

L. Harrison,

L. Luke,

L. Sandberg,

B. Wilkins.—(The Chairman of Committees.)

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Personal Bills
Moved, That a Select Committee be appointed to consider Personal Bills and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

V. Allenby of Megiddo,

L. Faulkner of Worcester,

L. Geddes,

L. Slynn of Hadley,

L. Templeman,

B. Thomas of Walliswood.—(The Chairman of Committees.)

Standing Orders (Private Bills)
Moved, That a Select Committee on the Standing Orders relating to private Bills be appointed and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

L. Brett,

L. Geddes,

B. Gould of Potternewton,

L. Greaves,

L. Luke,

L. Naseby,

E. Sandwich.—(The Chairman of Committees.)

On Question, Motion agreed to.
Tax Law Rewrite Bills
Moved, That a Select Committee of six Lords be appointed to join with the committee appointed by the Commons to consider tax law rewrite Bills, and in particular to consider whether each Bill committed to it preserves the effect of the existing law, subject to any minor changes which may be desirable;
That, as proposed by the Committee of Selection, the following Lords be named of the committee:

L. Blackwell,

L. Brightman,

B. Cohen of Pimlico,

L. Goodhart,

L. Haskel,

L. Howe of Aberavon;

That the committee have power to agree with the Commons in the appointment of a chairman;
That the quorum of the committee shall be two;
That the committee have leave to report from time to time;
That the committee have power to appoint specialist advisers;
That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed;
That the procedure of the Joint Committee shall follow the procedure of Select Committees of the House of Commons when such procedure differs from that of Select Committees of this House, and shall include the power of the chairman to select amendments.—(The Chairman of Committees.)
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On Question, Motion agreed to; and a message was ordered to be sent to the Commons to acquaint them therewith.
Parliamentary Office of Science and Technology (POST)
Moved, That, as proposed by the Committee of Selection, the following Lords be appointed to serve as members of the Board of the Parliamentary Office of Science and Technology (POST):

E. Erroll,

L. Flowers,

L. Oxburgh,

L. Winston.

Parliamentary Broadcasting Unit Limited (PARBUL)
Moved, That, as proposed by the Committee of Selection, the following Lords be named as members of the Parliamentary Broadcasting Unit Limited (PARBUL):

L. Brabazon of Tara,

L. Burnham,

L. Paul,

L. Thomson of Monifieth.—(The Chairman of Committees.)

On Question, Motion agreed to.

European Union Constitution
3.18 p.m.
Lord Forsyth of Drumleanrose to call attention to the European Union Constitution; and to move for Papers.
The noble Lord said: My Lords, I wonder whether the Minister can recall that glad and confident morning in 1997, and then when the Government's first annual report promised,
"to make Government more responsive and accountable … to bring politics closer to the people… to restore the public's faith in the political process".
Six years on, the Government took the country into war and, as we now know, exaggerated the threat from weapons of mass destruction and published information—the so-called "dodgy dossier"—which gave a false impression. Within the same year, the same Government intend to give away this country's right to govern itself while deliberately misleading the electorate about what is at stake.
We now have the Prime Minister's "Big Conversation", and the Lord Chancellor, no less, offering votes for 16 year-olds. But it is the same Government who refuse a big conversation on the European constitution, which will alter everything by taking away the voters' ability to achieve change through the ballot box.
Both Houses of Parliament are heading towards being the decorative part of governance, of more interest to tourists and historians than legislators or aggrieved citizens. That is what is at stake. No party has a right to impose a new and irrevocable constitution on the people of Britain without first seeking their express consent.

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The deceit the Government are perpetrating by describing the draft constitution as "no more than a tidying-up exercise" is simply breathtaking. The treaty will create a new union with its own personality. All existing EU treaties will be repealed and our country will be submitting itself to a new external jurisdiction with no obvious benefit to us. At least the single European Act offered the prospect of a single market.
I do not believe that I am being unfair to the Government. At Nice the Government proclaimed their red lines, their lines in the sand, and said that they would not support majority voting on tax, treaty changes, border controls, the EU budget and social policy. That was the Government's position a few short months ago. The new constitution provides for all of these matters to be enacted.
The Government's response to the House's distinguished EU Committee and its recent report on the constitutional treaty has been selectively to quote one rather unfortunately drafted sentence. Both the Prime Minister and Ministers have seized upon the words,
"it is clear that the balance of power is going to shift from the Commission to the member states".
That is palpable nonsense. It is not at all clear. Indeed, the chairman of the committee, at col. 336 of Hansard on 3rd December, explained that it meant the Council. That is altogether different from member states, particularly given the provisions contained within the treaty. I find it astonishing that Ministers should selectively choose that quote and should selectively misrepresent the position in that way.
More importantly, the Minister who is to reply to the debate, the noble Baroness, Lady Symons, gave an explicit undertaking to the House on 9th September— three months ago—to provide an analysis of the draft treaty against existing treaty provisions. She has failed to do so. Why? Voluntary organisations such as the splendid all-party Vote 2004 have been able to do so, as has my right honourable friend David Heathcoat-Amory MP in his tireless campaigning and writing on the subject. With thousands, and increasingly more, civil servants at their beck and call, what is preventing Ministers delivering on a promise given three months ago?
The noble Baroness shakes her head. I shall be very happy to give way if she has an explanation. If she is pretending that she does not know what I am talking about, I should point out that the Government, in their response to the committee's report, referred to that undertaking. They stated:
"The committee are no doubt referring to the undertaking given on 9th September".
In regard to what it wished of Ministers, the committee stated:
"We would expect this document in analysing every article of the draft treaty, to identify in particular which provisions are new and where there are changes to competences and to provision for QMV it will also be important for the Government to set out their understanding of the interrelationship between the provisions
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which effect decision making, including the Passerelle, the right of initiative and the flexibility clause. Such analysis should be made available to the public as soon as possible".
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the noble Lord invited me to explain why I was shaking my head. I did so simply because we do not have a draft treaty yet. I made an undertaking to your Lordships' House that when we have the draft treaty— as we shall have once it has been through the IGC—I shall be able to give the explanations. Your Lordships have fully taken on board that I have already undertaken to do that. That was my sole reason for shaking my head.
Lord Forsyth of Drumlean: My Lords, I find that response staggering. The noble Baroness is saying that the reason she has not done what the Select Committee asked of her, and which she said to the House she would do, is because she does not have a draft treaty. What is that I see before me in the hand of my noble friend? The noble Baroness is really saying that the Government are not prepared to tell us what they are signing up to until it is too late and they have signed up to it. That is disgraceful.
As to the failure to provide this information, if the noble Baroness has not had an opportunity to catch up on this I should tell her that there are at least 40 new areas subject to qualified majority voting. It is all part of the Government's plan to pull the wool over the eyes of voters and to proceed by stealth in giving away our right to govern ourselves.
The Europe Minister, Mr Denis MacShane, has claimed that the European convention was,
"another example of Britain at ease with Europe and influential in Europe".
Of 200 amendments tabled by the Government to the document that the noble Baroness states does not exist, only 11 have been accepted. Eleven out of 200. How influential is that?
Among the failures were the following. Article I-11 on increased co-ordination of economic policies. Mr Peter Hain wrote:
"It is inappropriate here and goes beyond the current treaties".
Result? No change.
Article I-15 on developing the common foreign policy. The noble Lord, Lord Tomlinson, called for a total redraft. He wrote:
"The Union acts on behalf of the member states not the reverse".
Quite right. What was the result? No change.
Article I-27 on creating the European Foreign Minister. Mr Peter Hain wrote:
"We do not accept the title Foreign Minister … this is unacceptable".
Result? No change.

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Article I-40 on creating a mutual defence commitment. Mr Peter Hain wrote on common defence that it was,
"divisive and a duplication of the guarantees that 19 of the 25 member states will enjoy through NATO".
Result? No change.
Article III-167 on border checks and asylum:
"This is a fundamentally important amendment".
Result? No change.
Article III-229 on representation at the UN. Mr Peter Hain wrote that changes are needed,
"to make clear that member states retain the right to speak in their own right at international organisations".
Quite right. Good for him. Result? No change.
As to being at ease with Europe, he should consult his colleague, Gisela Stuart MP, whose European credentials are impeccable. She was quoted in the Sunday Times this week. I do not know whether the Minister found time to read the Sunday Times, but she said:
"I confess after 16 months at the heart of the process—I was on the 13-strong presidium committee which drew up the draft document"—
the one the Minister told us did not exist—
"I am concerned. I am not convinced the proposed constitution as it stands will meet the needs of a Europe of 25 countries. The Government does not have to accept it, enlargement will continue without it and so will the EU".
She also confirmed what everyone knows but the Government deny, when she said:
"From my experience inside the convention it is clear that the real reason for the constitution is the political deepening of the union".
The grotesquely undemocratic nature of the process was underlined by her comments—which are also reflected in the Centre for Policy Studies pamphlet on the European constitution authored by David Heathcoat-Amory—that:
"consensus was achieved among those deemed to matter who made it plain that the rest would not be allowed to wreck the fragile agreement struck".
Revealingly, she went on to state:
"Not all of us went as far as Giscard who told us on one occasion 'This is what you have to do if you want the people to build statues of you on horseback back in the villages you all came from"'.
I will happily raise a statue to Giscard in my village in Scotland in return for his abandoning this shabby and undemocratic project which threatens the whole European ideal.
The three-pillar structure of Maastricht is to be abandoned, with majority voting on justice and home affairs matters. The Council is to be given new powers to ascribe further competences to the EU without a new conference. Under Article I-12, competition law becomes an exclusive competence. Article III-197 creates an EU diplomatic service. Almost all home affairs issues are subject to QMV and interpretation by the European Court of Justice. Article III-168 creates
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a common immigration policy. It is the end of member states' rights of veto over EU policies on immigration, asylum and border control.
Earl Russell: My Lords, is the noble Lord aware that he increasingly reminds me of the English MP who commented on the Union of the Crowns of our two great nations:
"We are English and so cannot be Britons"?
Lord Forsyth of Drumlean: My Lords, I am delighted that in the tercentenary of the Union of the Crowns, the noble Earl should remind me of the most successful reverse takeover by Scotland in its history, when the Scottish Crown took over the English Crown. What we are discussing is the takeover of our right to govern ourselves by people who will be unaccountable in Brussels. If I have reminded the noble Earl of the importance of these issues, I have achieved half my purpose.
As I was saying, Article III-168 represents the end of member states' right of veto over EU policies on immigration, asylum and border control. It is the creation of a country called Europe, with its own Foreign Minister, foreign policy, flag, motto, diplomatic service, prosecutor, supreme court, anthem and all the trappings of a state except for one— accountability to its people.
The charter of fundamental rights, which another Minister of the Crown, Mr Keith Vaz, told us was no more important than the Beano, is now being incorporated in Part II of the constitution and, as such, is legally binding. This has huge implications for labour market flexibility, on which the Chancellor of the Exchequer writes so eloquently, so belatedly and, I think, so hypocritically, in the Daily Telegraph. It also suggests that Mr Vaz has an affection and regard for the Beano which is somewhat remarkable and deeply worrying.
Denis MacShane, our accident-prone Foreign Minister, told the German Focus magazine on Monday that,
"the British situation is very clear, we want an agreement this week. Instead of hoping to obtain a 100% perfect EU constitution, we should concentrate again on the pressing problems of employment and economic growth".
A further deception by this Government is that there is nothing to worry about. Once it has been agreed, Parliament will have its chance to analyse the treaty line by line, in its final terms—the treaty which Mr MacShane and his colleagues are so anxious to approve, however shambolic. The truth is, of course, that we will not be able to alter a single word or comma of it once the Government have agreed it. We will be able only to reject it.
Perhaps the Minister could at least give us one assurance today that not even this Government would contemplate using the Parliament Acts to prevent the necessary legislation being amended by this House to give the people the right to decide this matter in a referendum. It is to the undying shame of this Administration, who have allowed 34 referendums since 1997—one of which allowed the people of

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Mr Peter Mandelson's constituency to vote for a monkey as mayor—that they are still refusing to allow a referendum on the most important constitutional issue, certainly of my lifetime.
Both David Heathcoat-Amory MP—Eurosceptic— and Gisela Stuart MP—Europhile—support a referendum and, in the case of Gisela Stuart, a free vote in Parliament. The opposition parties—at least in the House of Commons, for the Liberals: appear to be taking a slightly different line in the House of Lords, which is "wait and see"—support a referendum on the treaty.
The first 10 words of the treaty are,
"reflecting the will of the citizens and States of Europe".
Who, apart from Humpty Dumpty in Alice in Wonderland, who argued that "words mean what I say they mean", could support a Government who propose to proceed without the consent of the British people to such a treaty? The Minister should take care, for we all know what happened to Humpty Dumpty. I beg to move for Papers.
3.35 p.m.
Lord Radice: My Lords, it is a pleasure to follow the noble Lord, Lord Forsyth, whose speeches in the House of Commons I used to enjoy very much. Indeed, I think he made a House of Commons-style speech today.
According to the noble Lord, the draft constitution is the end of civilisation as we know it. I do not recognise the draft constitution in the words that he used. I shall speak as a supporter of the approach of the draft constitution. I believe it is right to pull together in one document all the various treaties such as the Treaty of Rome, the Single European Act, the Treaty of Maastricht, the Treaty of Amsterdam and the Treaty of Nice, which shape how the EU operates. It is not getting rid of the treaties to put them in one document in words which can be understood by most people.
It is right to set out in clear language for the first time the values and objectives of the European Union, the balance of power—because it is a balance—between the nation states and the European Union and the different types of competences under which the EU is entitled to operate. It is right that, where necessary for UK interests and for the effective working of the European Union, we should take the opportunity to strengthen specific areas of collective action. It is also right that we should equip the European Union to deal with the challenge of enlarging from 15 to 25 members. We never heard anything about that from the noble Lord, Lord Forsyth.
I should add that I also speak as a strong supporter of the European Union and of British membership of the European Union. I make this point—and I will make a few comments about it—only because many people who are most vociferously against the constitution have been vociferously against joining the European Union and, indeed, every treaty that has ever been decided by the European Union.
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I believe that the EU has been a force for good in the world. I quote the evidence of the history of the second half of the 20th century compared with the first. I believe that, with NATO, the European Union has underwritten European peace and stability since the Second World War. Indeed, in helping end Franco-German enmity, it has tackled one of the root causes of two world conflicts. We should occasionally remember that.
I agree with the Government White Paper that the EU represents,
"a model of democracy, tolerance and freedom"
which, by its rules and examples, has helped underwrite democracy, first in Spain, then in Portugal and Greece, and now in the countries of the former Soviet eastern bloc, which, I am delighted to say, will be joining the EU next year.
In addition, the European Union has brought, for more than 40 years, the trade, growth and employment which have been so necessary and vital to the citizens of the EU member states. In the UK, we owe a great deal of our prosperity and more than 3 million jobs to our membership of the European market. We now export three times as much to the EU as to the US and more to France and Germany than to the whole of the developing world. So let us get this in perspective.
Lord Vinson: My Lords, will the noble Lord give way?
Lord Radice: Yes, my Lords, of course.
Lord Vinson: My Lords, is the noble Lord aware that we have this month the biggest balance of trade deficit of £2 billion with Europe? I should have thought that indicated that they need us more than we need them.
Lord Radice: My Lords, I have heard this argument before. There are times when we run deficits with the European Union and times when we run surpluses. It is, de facto, our biggest trading partner, and we will not draw up the drawbridge and get rid of it, even though some Members might like that. I would like to see what the consequences would be for the European Union and the UK if that happened. We are sometimes far too forgetful of the benefits of the European Union, and ignore the costs of withdrawal, which would damage our prosperity, reduce our influence and make us far less effective in the world.
In 2004, we shall carry further the process of democratic change in central and eastern Europe, which began with the fall of the Berlin Wall, by welcoming into the European Union Poland, Hungary, the Czech Republic, Slovakia, the three Baltic states and Slovenia. That is a very good thing indeed. The draft constitution attempts to equip the European Union institutions for that enlargement, in three main ways. First, it proposes to abandon the system of rotating presidencies in favour of a full-time president of the European Council, elected for two and a half years. That will bring far greater coherence and

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consistency to European Union activity. Secondly, it proposes a weighted system of voting in the Council of Ministers, which ensures that votes are according to population. That is better than the somewhat complicated formula agreed at Nice. I favour the dual majority system by which half of the member states would be needed to support a proposal, representing 60 per cent of the EU's population. That is a sensible way in which to proceed.
The vexed issue of the number of commissioners— not mentioned by the noble Lord, Lord Forsyth, who may not want the European Union to work better—is a difficult one. It has not yet been decided or agreed on. While it is not surprising that every country wishes to have a commissioner, one must ask whether that would be too cumbersome when it came to voting or whether we need a dual banking system. I would be interested to hear the Minister's comments and, indeed, what emerges from the IGC on that matter.
Of the areas in which the draft constitution strengthens the European Union's power to act, I shall consider the justice and home affairs area. The constitution will increase the ability to act on immigration and asylum issues. I should have thought that might be of interest to the noble Lord, Lord Forsyth. It is strongly in the British interest to have QMV in that area, because it would certainly help to speed up decisions. I also welcome the idea of a Minister for Foreign Affairs, or Union Minister. It is a somewhat overblown title, but the fact is that that is what he will be called anyway. The post would combine the roles of Solana and Patten. It is very important that the European Union Foreign Minister is accountable to the representatives of the member states through the Council of Ministers.
I shall now deal with the Forsyth challenge that the constitution changes everything. It may be sacrilege to quote the Sun in these holy portals, but it said today in its leader that if the EU summit agrees the constitution,
"it will condemn 450 million EU citizens to become powerless ciphers in an autocratic and largely unelected European superstate… Nation states will lose their right of self-government and law-making",
which is roughly the argument of the noble Lord, Lord Forsyth. In the House of Commons, I once accused the Sun of lying, but I would certainly not do so here. I will just say that that is a grossly inaccurate statement.
Read carefully, the constitution demonstrates that the European Union system is a unique blend of national decision making, intergovernmental decision making and supra-national institutions. Article 1 makes it absolutely clear that the member states by agreement confer competences on the European Union to achieve common objectives that they believe to be necessary. There is a surprisingly small number of cases in which the EU has exclusive competences— four or five of them, or something like that. The competences have to be carried out in accordance with the principles of subsidiarity; that is to say, where they can be better achieved at Union level, and the principle
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of proportionality, which means that action must be proportionate with what is necessary to achieve European Union objectives. I did not hear the noble Lord, Lord Forsyth, mention either of those points.
Lord Forsyth of Drumlean: My Lords, I am most grateful to the noble Lord. He is right that I did not mention that point, but it would have been a point against him. Perhaps he could confirm that the Government lost the battle on the red card/yellow card position. It will not be member states that decide whether subsidiarity should apply, but the Commission.
Lord Radice: My Lords, the noble Lord makes a very useful point, because I am just about to come to that matter. If more than one-third of national parliaments object on grounds of subsidiarity, the Commission is asked to review its activities. The reality is that, if one-third of national parliaments are saying that some activity by the Commission is against the principle of subsidiarity, one may posit that the Commission is going to ignore that, but it is extremely unlikely. Therefore, the yellow card system has a lot to recommend it. We shall see.
There is an extension of qualified majority voting, which I welcome, as it is usually in our national interests, as has been shown time after time. The success of the Single European Act, voted for by the noble Lord, Lord Forsyth, was based on an extension of qualified majority voting. We do hear quite a lot of nonsense, given that it is meant to be the end of civilisation as we know it when we extend areas of qualified majority voting. The Government are absolutely right, however, to insist that there should be unanimity for treaty changes, tax issues, social security, defence, key areas of criminal procedure and European budget matters relating to own resources. They are also right in saying that a veto should be the general rule for common foreign and security policy.
I am sure that the noble Lord, Lord Forsyth, will welcome my last point. Written into the new constitution is the right for a member state to leave the European Union. Never before have we had that written in, so he will probably welcome it. If not, I should like to hear from those who oppose the constitution their positive proposals and vision of the future, and how they see Britain playing a role inside the European Union.
Lord Phillips of Sudbury: My Lords, the noble Lord has kindly invited me to intervene, although I was going to wait until he finished. Would he accept, using his own language, that one can be vociferously critical of key aspects of the draft constitution and vociferously in favour of a referendum and, at the same time, vociferously in favour of the success of the EU and of our membership of it?
Lord Radice: Yes, my Lords, possibly—although I am just about to argue against a referendum. My own view is that, looked at as a whole, the draft constitution treaty shows that the balance has moved away from

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the Commission towards the representatives of the national governments meeting in the Council of Ministers. The Council of Ministers has been strengthened at the expense of the Commission—that is my view.
Negotiations do not have to be concluded this weekend. We can go on if we are not happy and do not achieve our position—but it would be a good democratic principle if they were concluded before the European elections, so that they could be debated on the doorstep.
I am against a referendum. I do not believe that the new constitution is just a tidying-up exercise, as apparently somebody once said. Frankly, however, it is not nearly as important as the Single European Act or the Maastricht Treaty, against which I do not believe the noble Lord, Lord Forsyth, argued when he was in the governments of the noble Baroness, Lady Thatcher, or Mr Major—although he may have done so in private. It is perfectly legitimate to have criticisms of the constitution, but many people who are against it are hoping to use the referendum as a means of opening up the debate about bringing the United Kingdom out of the European Union.
3.50 p.m.
Lord Hurd of Westwell: My Lords, I too am grateful to my noble friend Lord Forsyth for introducing the subject today. We are dealing with a tangled mass of different proposals affecting many parts of our national life and Europe. Some of them are good; some of them are bad; and some of them, as the Minister has already pointed out, are changing all the time as the negotiations continue. The more informed discussion of them there is inside and outside Parliament, the better.
I shall concentrate strictly on the issues of foreign and security policy, which means that I shall leave out many matters of great importance, but shall be able to go into greater detail on those which particularly interest me. This part of the debate flows from the one that we had in this House exactly a week ago, because we have to look at this aspect of the proposals in the light of our view of the world. The world has changed substantially over the past few years and months and the nature of diplomacy and alliances has changed with it. We should all look again at the some of the ancient arguments about Europe in the light of what is happening in the world today.
My own view of European integration has changed in one respect. After the Treaty of Maastricht, I thought that Europe had roughly reached the wise limit for integration. I was and I remain sceptical about further powers for centralised institutions. I saw, and I see, no overwhelming reason why Britain should quickly join the euro. I was and I remain critical of a good deal of what the European Commission does in poking its nose unnecessarily into the nooks and crannies of our national life. All that is unchanged in my mind.
However, because of what has been happening in the world in recent times, on foreign policy and defence, it is right to press rather further and rather
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faster, if we can, down the road of European co-operation in those matters. I worry that the Government have put too much weight on the single strand of the Anglo-American alliance, essential though that remains. It is no longer an adequate means of sustaining an effective British foreign policy. I do not blame the Americans in particular for that. It is not their fault that the disproportion between the two partners, Britain and America, has grown to the extent that British influence is no longer, in the light of recent experience, likely to be effective within the alliance.
There is nothing wrong with being a junior partner. After all, we were a junior partner when D-Day was planned; we were a junior partner when the Gulf War of 1991 was fought. However, on neither occasion, were our policy and our Armed Forces subordinated to the extent that they have been in post-Saddam Iraq. I do not know whether our views on post-Saddam Iraq were not sought or whether they were ignored, but we are certainly caught in a muddle now. The position was described in the Financial Times today as a "quagmire" and it was described in a notable speech by the noble Lord, Lord Skidelsky, last week as "ignominious".
Much alarm has been expressed about proposals for European defence. I share some of those anxieties, but nothing that I have seen contemplated, even by the most far-fetched and hot-headed enthusiasts of European defence, approaches the degree of subordination of our own policy that we have accepted in post-Saddam Iraq. This is not the place to go further into that. I say it simply as an illustration of the reason why my own feelings about European foreign policy and defence have shifted. The main aim of British foreign policy in the immediate future should be to create a valid European-US partnership. Neither "valid" nor "partnership" accurately describes the present situation.
Therefore, when I look at that part of the constitutional proposals, I ask: "Do they advance that aim"? On balance, and in some respects, they do. That is not because machinery is all important—it is not. Machinery in those matters is much less important than political will.
I am not in favour of qualified majority voting for the main European decisions on foreign policy, although I do not see any harm in retaining what we have now, which is a degree of QMV, for the implementation of policies that have already been agreed by unanimity. Therefore, the Government should continue to resist the proposal that was popped into the documents in the past week or so by the Italian presidency that would provide for QMV on main foreign policy decisions.
In my experience, it is a mistake to force the pace on those matters. I remember several occasions when one itched to have majority voting because a majority would have enabled us to do things that were clearly sensible. I remember, for example, the obstinate and, we thought, unreasonable opposition of the Greeks to even decent treatment of the new republic of Macedonia. We longed to be able to out-vote the Greeks and to be able to get on with it, but it would

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have been a mistake, because the Greeks would have taken no notice and we would have been in even further difficulty in the Balkans.
It therefore follows that the common foreign and security policy is not likely in the near future to be comprehensive and to cover every area. It obviously will not, as we have seen with Iraq. If we cannot agree, it is probably better to acknowledge the division rather than to fudge it.
However, machinery is important and it does have some part to play. The noble Lord, Lord Radice, mentioned the proposals for a presidency. There is a presidency now. The trouble with the present arrangements is that they are ineffective to the point of being ludicrous. The six-month rotation means that if one is dealing with some major issue that is likely to last longer than six months, and the Americans, the Japanese or the Russians are involved, they will find after six months that they are dealing with a completely new set of people, who may not know anything much about the matter. That is not a responsible way of behaving if one is serious about trying to have a European voice in those matters.
We have to face the problem that arises at this point—I am surprised that it has not been mentioned already—of a certain anxiety and tension between the big and small states of the European Union. I am glad that it has been increasingly recognised in the past few months that, in the field of foreign policy, the three major powers, Britain, France and Germany, are indispensable and that, quite often, they will want to consult and work together in a way which we always found difficult when I was Foreign Secretary, because the Italians or the Spaniards would make a great row. Europe has to be grown-up about the importance of the role of these three powers and their sometimes acting together. However, we have to recognise that there will be anxiety, and sometimes resentment, among the smaller nations.
If one looks at the proposals, the new president is overwhelmingly likely to be selected from one of the smaller states and not from one of the big three. When I read gossip about our Prime Minister or the German Foreign Minister wanting to hold that position, it strikes me as unreal. The same is true of the Foreign Minister or representative of foreign affairs or whatever he turns out to be called. Those two posts— the President of the Council and the Foreign Minister—will be and should be held normally by competent individuals from states other than Britain, France and Germany. It would then be the case that if we continue to deal as Europeans with the situation in Iran, it would be not only the three Foreign Ministers of France, Germany and Britain who make the next expedition, but those three ministers plus the European Foreign Minister. That would be reasonable.
Another aim of the proposals that has not yet been mentioned in the debate is to end the division or dysfunction between the commissioner who deals with foreign affairs and the position under the Council now held by Mr Solana. We have been wise or lucky enough
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to have chosen for those positions two people—Chris Patten and Javier Solana, with both of whom I have worked closely—who have been sensible enough to work closely together, even though they probably realise that they are working a fairly dotty piece of machinery. That situation could, should and would be improved by the proposals, and we would have one person in charge of both policy and money. I ask the Minister to throw some light on those relationships. As I see it, that person must be anchored in the Council of Ministers and responsible to it, while also being involved in the Commission, when it discusses trade, aid, sanctions and other matters that fall within its remit. That has been discussed but not fully resolved. I hope that the Minister can say something about it, as it is important.
The principle that Europe should speak with a single voice is not new. It was stated famously by my noble friend Lady Thatcher in her speech in Bruges in 1988. She spent much of her time criticising the centralisation of Europe, but she also said:
"I am the first to say that on many great issues the countries of Europe should try to speak with a single voice. I want to see us work more closely on the things we can do better together than alone. Europe is stronger when we do so, whether it be in trade, in defence, or in our relations with the rest of the world".
That is now an accepted aim—accepted, but not fulfilled. It is accepted by the new states, as well as the old ones.
No one should under-estimate the depth of the division and discord inside the European Union over Iraq, but it has disguised the fact that many things are now done on a European basis in a way that would have been inconceivable even 10 years ago. In the Balkans, for example, European countries fought and intrigued against each other for decades; now we act as Europeans. As Europeans, we say to those countries, "Here are the hurdles. Here are the things that you must do in all kinds of spheres, if you want to join the main European family". As Europeans, we are part authors of the road map on Palestine. I can give another small but topical example: when there was a change of regime in Georgia, the question was not what Britain, France or Germany said but what the Europeans said. More important, we all agree and we agree with the Americans that Iran should not be allowed to have nuclear weapons. Perhaps more by luck than by design, we are operating a "soft cop, hard cop" policy, with the Americans taking the harder line and the Europeans undertaking the diplomacy, with the three Foreign Ministers in Tehran. We have the same objective, and we compare notes all the time about how we are getting on. That must be a sensible way of proceeding.
We are not nearly there yet. I have believed for a long time that it is in the interests of Britain and of the world in general that this country should—to use a phrase rather mysteriously attributed to me—continue to punch above its weight. If we are to do that, we must have, as a main priority of our foreign policy in present circumstances, the creation of a valid partnership with the United States, not a rivalry. The rivalry that the

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French sometimes in their dreams propose is unreal and would be unwise, even if it were real. A valid partnership should be our main objective.
I do not know what will happen with the constitution. There are many vagaries and difficulties ahead. Whatever happens to it, I hope that the parts that would strengthen our ability to speak with a single voice in partnership with the United States will be retained and put into action.
4.4 p.m.
Lord Waddington: My Lords, I, too, am grateful to my noble friend Lord Forsyth of Drumlean for initiating the debate. It is a privilege to follow my noble friend Lord Hurd of Westwell, who has so much expertise in foreign affairs.
It has been an interesting two weeks for the Labour Party, which seems, at last, to be waking up to the disaster that might befall it if the Prime Minister signs up to the constitution. Two weeks ago, Clare Short blurted out the truth:
"the reality is that pro-Europeans are driving a project that leads inevitably to a superstate, which most of us don't want".
This week, Miss Gisela Stuart told us of her fears that the constitution could lead to a superstate. She ought to know: she was one of the Labour representatives on the convention.
Up to now, many people have felt that we should be slow to reject a constitution that has been carefully and rigorously hammered out by a body on which the various parliaments of the EU are represented and on which every view has been canvassed and properly debated. Many people thought that that was what had happened and were, therefore, prepared to give the constitution the benefit of the doubt. However, the picture painted by Miss Stuart is not one of careful consideration and debate, with proper regard being paid to the arguments advanced by the representatives of national parliaments—far from it. The picture that she paints is of a constitution, parts of which she describes as utter nonsense, being railroaded through with minimal debate by Giscard d'Estaing and a narrow clique.
I have also read the article to which my noble friend referred. Miss Stuart talks of amendments never being considered, let alone voted on; of large parts of a draft secretly prepared by the president and Sir John Kerr being nodded through without discussion; of revised texts arriving late and only in French; and of a redraft of articles about defence from which all references to NATO has suddenly been deleted. She says that some delegates, herself included, made it clear that the text should be regarded by national parliaments as no more than a basis for discussion, but the president chose to take that as unanimous endorsement of the text. That was that, apart from the reference to statues, which my noble friend mentioned.
The Government say that, in spite of the strange birth of the constitution, the people should have no right to vote on it. They can vote on local mayors and regional assemblies, but, when it comes to something important such as who is to make our laws and
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determine our rights as free citizens, the people should remember their place and keep their mouths shut. Some ask, "Why should the people have a vote, when they were not given one when other treaties were signed?". For goodness sake, we are not talking this time about whether there should be majority voting on this or that, important as that may be. We are certainly not talking about pulling together existing treaties, as the noble Lord, Lord Radice, suggested. We are talking about a constitution. Constitutions are things that states adopt in order—I use the words of Mr Prodi—to mark the birth of a political entity. That is what we are talking about.
The Government say that the constitution will not change the fundamental relationship between the EU and its member states. That is bunkum. Under the constitution, the EU ceases to be a collection of member states that have chosen to share sovereignty over agreed aspects of their affairs and have agreed, as we did in 1972, that measures agreed by the Council of Ministers should become law in member states. The EU becomes a legal entity in its own right. The constitution says so. Look at Title I, Article I, which states:
"this Constitution establishes the European Union".
Look at Article 6, which states:
"The Union shall have legal personality".
Look at Article 10, which states that this constitution,
"shall have primacy over the law of the Member States".
Let me dwell on that for a moment. This constitution, not those laws agreed by the Council of Ministers, shall have primacy over the law of the member states. I gladly give way to the noble Lord.
Lord Radice: My Lords, I do not know whether the noble Lord remembers that when the previous Conservative government, rightly in my view, took Britain into the European Union, they signed up to European law having primacy over UK law in the areas to which we joined up. Here we have another treaty that puts together existing treaties. It establishes a legal entity, but the European Union already has a legal entity. Perhaps the noble Lord did not know that.
Lord Waddington: My Lords, I am sorry to disagree with the noble Lord but I thought that 1 had explained why he is entirely wrong in what he is saying. There is a world of difference between what we did in 1972, which was to say that when the Council of Ministers agreed on a certain measure that measure should become law in every member state and should have primacy over the existing law of those member states, and creating a constitution which shall have primacy over all the laws of the member states, and, furthermore, as I shall explain in a few moments, a constitution which will be interpreted by what is to all effects and purposes a constitutional court. Who will interpret the often ambiguous words of this constitution? The Court of Justice, of course. Does anyone believe that that Court of Justice will start interpreting words and phrases so as to diminish the powers of the EU? There is no hope whatever of that happening.

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One has only to look at the Charter of Fundamental Rights to see the significance of all this. The charter, by guaranteeing the right to asylum in Article 11.18, ensures that the European Court, not our own Parliament, will be the final arbiter of our asylum policy. The Government, after they had stopped comparing it with the Beano, used to say that the charter applied only to EU institutions and did not enlarge the jurisdiction of the court. That is a somewhat difficult argument in the light of the wording of Article 11.51, but that is what they used to say.
Now the Prime Minister has changed tack and seems to admit that the court will have jurisdiction. He tried to calm fears at the CBI by saying that although the court would have jurisdiction, in spite of the plain wording of Title IV of the Charter of Fundamental Rights, he would seek specific assurances that Britain's trade union law would be perfectly all right. However, the point is, if such assurances were obtained, what possible reliance could be placed upon them? Look at what happened over John Major's opt-out from the social chapter. Remember how the response of a devious Commission was to circumvent the opt-out by reintroducing the Working Time Directive under health and safety provisions from which we had not opted out. Look at that and remember that, at the end of the day, what will matter will not be the terms of any assurance but how the court interprets the charter.
Mr Blair talks of red lines. He says that he will retain the British veto on tax, foreign affairs and defence. However, as regards tax, what about Article 14.1, which states:
"The Union shall adopt measures to ensure coordination of the economic policies of the Member States … [who] shall coordinate their economic policies within the Union"?
What about Article 5.2, which states:
"the Union and the Member States … shall assist each other in carrying out tasks which flow from the Constitution"?
I would not put much money on the British veto when the court gets its teeth into those articles.
As to the commitment to keep our veto on foreign affairs and defence, I wonder what will happen when the court comes to interpret Article 15.2. That reads:
"Member States shall actively and unreservedly support the Union's common foreign and security policy … and shall comply with the acts adopted by the Union in this area. They shall refrain from action contrary to the Union's interests or likely to impair its effectiveness".
Will the Government insist on not being bound by Article 15? I hope that the Minister will tell us in her reply. If not, what on earth will happen when the court starts interpreting that?
Of course, I suppose there might have been some attraction in the constitution if it had stated clearly how from now on power is to be divided between the member states and the EU, but far from settling such matters on a permanent basis, it does precisely the opposite. It sets the scene for permanent revolution with member states progressively ceding more and
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more power to the unelected bureaucracy. One has only to look at the provisions about so-called shared competence, to which the noble Lord referred, to see that that is true.
For competence will only be shared so long as Brussels does not want to exercise the power itself. That is what the constitution says. One has only to look at the infamous Article 24.4, which hands to a temporary European Council power to replace requirements for unanimity with qualified majority voting in any area it wishes. One has only to look at the reference to the principle of subsidiarity—on which the noble Lord again relied—in Article 9, and the way it is rendered as good as meaningless by Article 3, which states:
"The Union … shall promote … cohesion and solidarity among Member States".
That, of course, could mean almost anything.
I end by saying that if the Government sign up to this constitution, which could lead to the end of our independence as a nation, without even giving the people a say in the matter, they will cause not just resentment but burning anger.
4.17 p.m.
The Lord Bishop of Salisbury: My Lords, Article 51 of the proposed constitution for Europe commits the Union to maintaining an,
"open, transparent and regular dialogue with the churches and non-confessional organisations".
From these Benches I welcome that commitment and invite the Minister to endorse it.
When the Home Secretary spoke at York at the end of October, he said:
"Faith can be the building blocks and the glue of community. It plays a vital role in people's lives—even for those of us who are not overtly religious. All of us, our basic values, our sense of right and wrong, are shaped by our community and its religious heritage".
No one can deny that the building blocks are lying around. The noble Lord, Lord Forsyth, in introducing this welcome debate, made it clear that he believes that there are plenty of stones over which we might stumble. But what the Home Secretary reminds us is that how we build, how the building blocks are joined, what is the glue—the glue that holds people together across the boundaries of nation and religion—will fundamentally determine the quality of community that the European Union Constitution will offer.
In the matter of glue—the quality of our relationships—the Churches have some experience to offer, and a significant pattern of existing relationships across both confessional and faith boundaries in Europe as well as, for example, in Africa. In this connection noble Lords need no reminding of the impact of the Churches' contribution historically, but it is also important to recognise the way in which the Christian faith builds bridges today and helps to create that community for which we long.
I could name many leaders of public life and servants of good common living through the diocese of Salisbury who have been formed by the Christian faith

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that they profess. There are the head teachers, prison governors, healthcare professionals and politicians, too. I could take noble Lords to the villages whose ancient church buildings have remained the focus of community life as all other services, have been withdrawn. There are any number of volunteers working tirelessly to serve local needs in very direct and practical ways.
Those are all people who have a model of community that is more than that which will serve their own particular and local interests. The roots of the Christian faith are embedded deep within our whole corporate consciousness, as the statistics in last year's census reveal. Any authority that claims an interest in the life and health of the nation, and of the community in Europe, would do well to listen to the voice of the faith communities.
That is not just the Churches. The tapestry of modern multicultural Britain is woven with many rich strands. If we care for the whole, we must attend to those individual threads. I think that people do. Hundreds of people—many hundreds—came to the cathedral in Salisbury this Lent to hear a course of lectures entitled "Understanding Islam". An authority that seeks to listen to the different voices of faith will, I believe, find itself better equipped to build up mutual respect and social cohesion among the people whom it serves.
In its recent note, Working with Faith Groups, the Foreign and Commonwealth Office said:
"Faith communities can help the FCO to understand the world in all its complexity".
The Church of England will want to play its part in interpreting the part of the world that it knows and tries to serve. But I am equally confident that the global faith communities are well placed to introduce different parts of the world to one another, and to sustain and develop relationships.
Let me give an example from the Churches. On the face of it, the Baltic republic of Latvia and the sub-Saharan expanse of the Sudan have little in common. But through our diocesan links—I made the archbishops of both those territories canons at the same moment—I have been able to introduce them and their stories to one another. Much to their surprise, each has discovered that the other's faith was formed in a time of persecution and, as they exchange those quite different histories, they realise that their experience of emerging into the light of day and a new light is not unique. How will they each, in their own communities, help to heal the divisions of the past? Where do the old suspicions continue to handicap public as well as religious life?
In my recent visit to Riga, Archbishop Janis Vanags shared his concerns on whether the Latvian Church's future lies with German evangelicalism, where the ghosts of the Teutonic knights who overran his country many hundreds of years ago still stalk, or with Scandinavian Lutheranism. It is a decision that in some ways mirrors that facing the Latvian state as it approaches membership of the European Union. That is an occasion which the Latvian Church hopes to
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celebrate by inviting the most reverend Primate the Archbishop of Canterbury to give a lecture on the contribution of faith to the future of Europe. Where does that future lie? What will the alliances be? With whom will our sympathies reside? The faith communities, I suggest, can indeed help to explain the world to those who seek to govern it.
I hope that, among all that, Her Majesty's Government will express their unreserved support for Article 51.I look forward to hearing what constructive proposals the Minister brings to us for enabling the,
"open, transparent and regular dialogue",
that they promise between the Churches and the Union, which I take to mean its institutions—the Parliament, the Council and the Commission. The draft constitution deftly employs the three adjectives of open, transparent and regular, which make it clear to me at least that the dialogue will be formal, accessible and accountable, as well as regular. It will not be incidental, covert and apologetic.
Will the Minister please tell us how she, like the Home Secretary, envisages that dialogue being structured? We on these Benches will do what we can to support her turning those lofty aspirations into reality. We are keen on glue: in our minds, it builds a more coherent world.
4.25 p.m.
Lord Howe of Aberavon: My Lords, it is a great privilege to follow the right reverend Prelate in this debate, and to arrive on the scene, as it were, at such a moment of ecclesiastical tranquillity after the fierce exchanges to which we have listened from the noble Lords who preceded him. I shall try to strike a happy medium.
I thank all those who have laboured in this vineyard for so long, particularly those who prepared the report that is the background to this discussion under the chairmanship of the noble Lord, Lord Grenfell. I also give special thanks to my noble friend Lord Forsyth, a friend of long standing. It is many years since I first recruited him as one of my parliamentary private secretaries. I did so then because of his formidable zeal and skill as an advocate, in the hope that I might exploit both to my advantage in support of arguments in which I believed. I seem to have left his zeal and skill undimmed and amplified, so in that respect I was right, but in the other respect I must have made some mistake. But he is still my noble friend.
I was struck by my noble friend's drawing on the experience of a Member of the other place, Gisela Stuart, who impresses all of us who have met her because, in a way, she proves one of the strong virtues of the European Union. As she explains herself, her very existence in transplanting herself from Germany to this country and achieving such success here parallels in a way the achievement of the noble Lord, Lord Dahrendorf, who is not with us today. It represents the ideal of the European Union at its highest, which many of us share, including me.

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On the other hand, Gisela Stuart has expressed the frustration that overcomes all of us who have to deal with the institution over a long period. There is disillusionment as well, sometimes; one has to recover one's balance after many exposures to that sort of experience. She found herself disconcerted, as I have often done, by the euro-visionaries who have, for example, succeeded in implanting in the draft treaty the charter of fundamental rights. I have said on previous occasions that that is a text for which I have no enthusiasm at all. It mirrors and follows the example of documents such as the Spinelli draft treaty and the Genscher-Colombo final Act, all of which we were able to repel in earlier negotiations.
I confess that I am sorry that the charter of fundamental rights has been added so far, as a kind of fifth wheel to the existing institutions. The committee under the chairmanship of the noble Lord, Lord Grenfell, has rightly wondered whether the protective devices to keep it at bay are sufficient to withstand the development of case law by the European Court of Justice, and not to make it more important than any of us would wish. That is an example of the impact of euro-visionaries on too large a scale, and I hope that the Government will yet again examine that point. If they are feeling really bold, they could ask what purpose the charter serves at all by its presence in the treaty, when we already have the European Convention on Human Rights.
The second demonstration of the impact of the euro-visionaries is seen in the extension of the powers of the European Parliament provided for in the draft treaty, which certainly goes further than I should have liked and would have thought necessary. The European Parliament is of course a valuable institution, because it embodies the concept for which we are striving—a coming-together of the peoples of the European Union. To that extent, it is aspirational. The danger is that European Union leaders have so often felt obliged to make obeisances in that direction but those do not represent their own private feelings about the matter. I remember hearing Chancellor Kohl and President Mitterrand speaking with less than enthusiasm about the European Parliament while, in public, giving a different picture of their affections.
Therefore, I do not enthuse over those extensions of power but I do enthuse over the extent to which national Parliaments have been given a role to the point described in the so-called "yellow card procedure". I have said previously that I should have preferred it to be on the red rather than the yellow card basis. I underline the importance of the point made by the Grenfell committee, and accepted by the Government, that that should extend to proportionality. All the safeguards recommended by the committee should be put in place as firmly as possible.
That is one group of people who tend to diminish my enthusiasm. However, I am sorry to say that there is another group of a different kind whom I call the "Euro-denouncers"—those who cannot find language strong enough to denounce the whole enterprise. I am
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sad, indeed, that my noble friend Lord Forsyth has trespassed further than I should have liked in that direction.
It is not sensible to say that this treaty, which is one of a sequence defining the distribution of power necessary for the purposes that we are trying to achieve, gives away the country's right to govern itself in a new and previously unacceptable fashion. If one judges it by that, the one outstandingly new feature in this treaty, as opposed to the previous one, is the right of a country to withdraw from the European Union. That is the novelty and it is expressly set out.
However, the idea of our subjection by agreement to European Community law has been around for a long time. I have here a document published in July 1962 as a supplement to CROSSBOW, then being edited by my noble friend Lord Howell, called The Rome Treaty and the Law, written by Mr Dennis Thompson. It states very clearly:
"One of the important functions of the Community is to make regulations and to give decisions in the future which are immediately binding on all persons who are within the jurisdiction of the member states. This means that the Community, in addition to the national parliaments, has power to make laws which are binding on the citizens of the member states. The national parliaments therefore give up their right to legislate in these particular fields".
Therefore, it is no novelty. It was latterly embodied in the European Communities Act.
Lord Forsyth of Drumlean: My Lords, I am grateful to my noble and learned friend. Of course, I have sat at his feet for a number of years and he is a very distinguished lawyer. Perhaps he could help me with my problem, to which my noble friend Lord Waddington referred. Surely the difference is that we are creating a situation where we no longer proceed by amendment of treaty but create a new entity, which is the European Union, and a constitution. Therefore, how can my noble and learned friend say that this is no different from what we have done before?
Lord Howe of Aberavon: My Lords, because this treaty makes specific provisions. Like any other treaty, it is subject to amendment, as are any of the treaties that we signed previously. We can resile from it; we can modify it; we can do what we like. One factor in it that we are criticising is the extent to which that right to amend may not survive. Therefore, it is no different from the other treaties. It is an extension—
Lord Waddington: My Lords—
Lord Howe of Aberavon: My Lords, forgive me. I do not want to yield on a House of Commons scale, particularly to a series of my noble friends. I should rather they sat at my feet than interrupted me from behind. I do not want to be diverted too much by that.
The trouble is also that there is a pattern among some Euro-denouncers of increasing the ferocity of their language the longer they are in opposition to the established order of things. It is notable that the Labour Party moved into a most denunciatory mood

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in the 1980s. The further away its members seemed to be from regaining office, the more intemperate became their language. I believe I am right in saying that, at one point, the present Prime Minister advocated our withdrawal from the European Community.
A hopeful thing is now happening. Among our party is a regenerating belief that we are in prospect of returning to government sooner than might have been feared. That has led to a welcome development. For example, last week on the "Today" programme, our new leader, Michael Howard, was asked about our attitude to the European Union. Briefly, tersely, robustly and comprehensively he dismissed the idea that we should ever want to leave the European Union. Of course, we want to remain a member of that organisation. That is a very strong reassertion of what is basically common sense.
There is still a tendency, as there was in the Labour Party in the 1970s, to try to trade both ends against the middle and to talk about referendums and renegotiation. We found that, when they came to office in 1974, the Labour government were landed with both those things. They had to go through a process of renegotiation, which achieved nothing, and a referendum, which perhaps achieved the opposite result from that which Mr Tony Benn expected when he first asked for one.
Therefore, I hope that our party will gradually move away from that position and that it will now concentrate on what it should be doing, which is criticising the Government for their shortcomings in what they want to achieve and adding strength to their elbow on the matters on which we agree.
A very important example of that was cited with distinction and clarity by my noble friend Lord Hurd. Two things are manifestly desirable and desired by all of us on both sides of the House. One is the completion of enlargement, extending our European embrace to reach all the countries liberated from the Warsaw Pact. It has been proclaimed by our party time and again that that is an important step for all of us.
The second is an ending of the dangerous tension across the Atlantic, so well summarised by the committee under the chairmanship of my noble friend Lord Jopling in the report entitled A Fractured Partnership?. I agree with every word said by my noble friend Lord Hurd about the importance of overcoming that problem. For that, we need a successful common foreign and security policy along the lines recommended by the Jopling committee, together with the completion of the establishment of a common defence and security policy. All those matters are set in the context of our continued membership of the European Union and they are of enormous importance.
However, there is another group of whom one must also be wary and rather critical. It is the group which I fear has been represented in the policy of the present Government with a degree of discontinuity and uncertainty in their handling of these important negotiations. I do not say a word to criticise the
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Minister, who is to sum up this debate. She has been one of the more competent and shining lights in the proceedings.
In that respect, there is a remarkable contrast between the record of this Government and, if I may say so, that of the government of whom my noble friend and I were members. He was Foreign Secretary for six years; I was Foreign Secretary for six years; and there was a brief interval when our friend John Major was between us in that job. However, in each of our spans in office, we had only two successive Ministers of State with responsibility for Europe—Sir Malcolm Rifkind and the noble Baroness, Lady Chalker. Under the present Government, we have had five so-called Ministers for Europe in six years, including Douglas Henderson, Joyce Quin, Keith Vaz, Peter Hain—who had two other day jobs for much of the time—and Denis MacShane. I believe that is one reason that thus far we have not had as satisfactory a result as we would have wished. There are a number of issues on which we still want to see a strengthening of the treaty along the lines that we favour.
I hope very much—again, this is a point made by the Grenfell committee—that the Government will not be bounced into reaching a conclusion and discarding all the further negotiating points that they still have to deal with by being pressed unreasonably to a timetable to be completed within the next few days. I do not imagine that a presidency under an Irish Prime Minister would be significantly less attractive than one under an Italian Prime Minister. Indeed, I believe that others might take a view different from that.
I hope that our Government will take the opportunity to find a way of reconciling the argument about voting weight. I shall not go into detail on that now. However, above all, I hope that they will accept the advice of the Grenfell committee—I consider this to be one of the most important points—on the passerelle provision of the treaty. That is, indeed, something on which my noble friend and I absolutely agree. So long as that remains in place unqualified, it carries a real threat of being able to get round the safeguards of unanimity where we want them to be preserved. The idea that that provision should be accepted would shock me as much as it would shock any of my noble friends.
However, there are many positive reasons why we wish this treaty to be right, effective, completed and adopted. There are so many advantages to be gained from it that I hope the Government will press in every way that they can to achieve a treaty that we can all endorse as a next step towards Europe being able to assist itself not only in trade matters, as we do, but in foreign policy fields, as we must do, along the lines stressed by my noble friend.
Lord Waddington: My Lords, before my noble and learned friend sits down, I heed his cautionary words that we must not behave too much like the House of Commons. Of course he is right when he says that this treaty is like any other treaty. However, surely one should have regard not just to the treaty but to the product of the treaty. This treaty will be different from

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other treaties in what it brings about, which will be a constitution. Certainly, that is something which none of the other treaties has brought about.
Lord Howe of Aberavon: My Lords, nomenclaturally, if there is such a word, I understand the point that my noble friend makes. However, for decades the European Union has been an organisation with an effective constitution. It is not a super state, a federal state or a confederation. It is a unique creation with the unique equipment of having a community law which applies throughout and a European Court of Justice which adjudicates throughout. All that has been there from the outset and was accepted when we decided to join in 1973. So, it is not a constitution which is any different from that with which we have been living for the past 30 years.
4.41 p.m.
Lord Chalfont: My Lords, I, too, am grateful to the noble Lord, Lord Forsyth, for initiating this important debate. It is a great pleasure and privilege to follow the noble and learned Lord, Lord Howe of Aberavon, although he might not agree with everything that I shall have to say.
The first thing I shall say about the European Union draft constitutional treaty is that, as the noble Lord, Lord Forsyth, said, it has enormous implications for our national sovereignty. Indeed, unless the draft treaty is radically revised and amended, it is difficult to see how the United Kingdom can possibly accede to it.
Other noble Lords have already dealt with some of the aspects of this problem and others will undoubtedly do so. My own brief intervention is specifically to deal in more detail with defence, a matter on which I might claim to have some knowledge. As the noble and learned Lord, Lord Howe of Aberavon, hinted, it is important to approach this matter as calmly, factually and objectively as possible without too much emotion or heated argument about Mr Romano Prodi and the European army.
Perhaps it would be wise to start with that crucial article of the draft constitutional treaty, which is Article 15. The noble Lord, Lord Waddington, has already quoted part of that. With the indulgence of the House, I should like to quote it in full. It is not very long and it is absolutely crucial to the whole argument,
"The Common Foreign and Security Policy
1. The Union's competence in matters of common foreign and security policy shall cover all areas of foreign policy and all questions relating to the Union's security, including the progressive framing of a common defence policy, which might lead to a common defence".
The important part of the article is paragraph 2, which states:
"Member States shall actively and unreservedly support the Union's common foreign and security policy in a spirit of loyalty and mutual solidarity and shall comply with the acts adopted by the Union in this area. They shall refrain from action contrary to the Union's interests or likely to impair its effectiveness".
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As the noble Lord, Lord Waddington, said, the important point about that article is that it is justiciable in the European Court of Justice. It is that court which will interpret that article and no one else.
At present, the common foreign and security policy is not dealt with as a Community matter but as part of what is often called a second pillar of the Maastricht Treaty. It is an intergovernmental matter. The European Commission has no right of initiative and there is no role for the European Parliament. If the European Union wants to negotiate international agreements it can do so only by unanimous agreement.
If this treaty is adopted, all that will change. The Union will have a legal personality. It will have a foreign policy, a foreign minister and a European external action service; in other words, a foreign ministry. It will also have, although this is perhaps not too serious, a flag and a national anthem. All that seems to me to be a matter of some importance to this country and I should like to concentrate for a few moments on the defence aspect of it.
The draft treaty has many references to defence. Despite the comments of the noble Lord, Lord Radice, it is difficult to judge the moment at which decisions regarding defence are covered by unanimous decision or qualified majority voting. However, a number of issues of great concern clearly emerge from a close study of the draft treaty.
The common security and defence policy is to be an integral part of the common foreign and security policy. It is designed to provide the European Union with a policy and to confer upon it a military capacity drawing on civilian and military assets. The Union may use those assets on commitments outside the Union in a number of roles and use capabilities provided by member states. A common security and defence policy is to be established. Member states are to make civilian and military capabilities available to the Union in the implementation of that policy. A European armaments, research and military capabilities organisation is to be established.
Member states are required—again, I quote this important requirement—to support the common foreign and security policy actively and unreservedly,
"in a spirit of loyalty and mutual solidarity".
Perhaps most importantly, there is also to be a mutual defence agreement, which requires member states to come to the assistance of any member threatened with aggression. That obviously cuts right across the mutual defence guarantees implicit in the North Atlantic Treaty.
That leads me to our relationship with the United States, which is integral to our membership of the North Atlantic Treaty Organisation. The special relationship, as it is sometimes called, with the United States has at its heart the sharing of intelligence in military and strategic matters. The way that the draft constitutional treaty is leading us may cause a certain amount of fear and concern in the United States, especially about the sharing of intelligence.

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This matter should at least cause considerable concern in the Foreign Office and the Ministry of Defence. However, it is also significant that the defence working group, which acted in an advisory capacity to the convention that produced this constitution, produced on 20th December last year a report to the plenary session of the convention, which stated that although there was no consensus among member states with regard to what a European defence capability might look like, a number of principles on European defence matters had been agreed. They included crisis management, counter-terrorism, deployment outside the Union and arms capabilities. There were also proposals to enhance the role of the Union to allow it to take responsibility for co-ordinating defensive action, for creating a special military pool for the joint training of troops and the creation of a Union agency for armaments procurement.
I suggest that at the very least—and without being, I hope, in any way alarmist—these proposals would move us very rapidly towards a situation in which this country will eventually lose its exclusive sovereign control, especially over the deployment, training and operational commitments of its Armed Forces. It can be argued, and indeed 1 would argue, that the defence of the realm is the primary responsibility of any sovereign government. It is no good for a government to provide health, education and other public services for its citizens unless they also have sovereign control over the Armed Forces, which they might need in an emergency to protect those services. The implications of this draft treaty are that we shall take a further step towards a militarised European Union separate from NATO.
It is ludicrous to argue that the proposed constitutional treaty is not of the most profound importance. If the Government are contemplating acceding to it, or to anything like the one represented by this draft constitution, it is surely important that the people of this country should have a say in the matter.
The whole structure of international power has changed since the end of the Cold War, and will certainly change again when the war in Iraq is finally terminated. It would be a brave man who would try to describe what the new world power structure will look like. But one thing is, I think, clear: the focus of power is moving away from Western Europe, where the Franco-German power base has been irreparably damaged by recent developments in the United Nations. If we are to retain our status as a sovereign nation state, the time may have come to make some decisions of fundamental importance. At least we should ensure that there is a referendum of the British people before this new constitutional treaty takes its final shape.
4.54 p.m.
Lord Lang of Monkton: My Lords, like other noble Lords, I congratulate my noble friend Lord Forsyth of Drumlean on the timeliness and indeed the liveliness of the debate that he has initiated.
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I participate as a member of the Select Committee on the constitution, although expressing my own views. Our report on the draft treaty was published in October. It was less comprehensive than the reports of the European Union Committee because it was intended to be read in conjunction with that committee's reports. It was confined to identifying the impact of the draft European Union treaty on our own constitution, although we may comment further if and when a Bill to incorporate a treaty into United Kingdom law is published.
The chairman of the Select Committee on the constitution—my noble friend Lord Norton of Louth—spoke about our report when he took part in the debate on the gracious Speech. I understand that it was an entirely unintentional and inadvertent oversight that caused the Minister not to respond to the points he made, but I am happy to give her the opportunity to do so again today.
One of the points my noble friend made, with which I strongly agree, was about the need to identify the constitutional implications of treaties before we sign them instead of afterwards. That is what our report sought to do.
It seems to me that every treaty we have signed since we joined the Common Market in 1973 has had implications for our constitution that were not understood properly at the time. They only emerged later. So, we have backed defensively into subsequent negotiating rounds, trying to rectify the damage inflicted on us by the one before.
Of course over the years we have had some negotiating successes: the Fontainebleau agreement; the opt-outs of Maastricht; the introduction of the principle of subsidiarity; and the completion of the single market that was so vital to our free trade agenda, but which of course brought with it much more European Union baggage in the single European Act than was appreciated at the time.
Overall, the story has been one of a series of rearguard actions, exacerbated by the fact that our national background and attitudes and our legal traditions are not homogenous with much of Europe's. The agenda of many other members, and of the disembodied Brussels bureaucracy, is different from ours. For example, we saw the single market as a way of making Europe economically strong and competitive, as a prerequisite to opening markets and competing globally. Many of our partners just saw it as a precursor to the single currency. I should have thought that the NAFTA—the North American Free Trade Area—had demolished that particular argument. But each round of negotiations in Europe just seems to carry the centralising agenda further forward.
Furthermore, as we now know, a new treaty is not required as a precursor to the new member states' entry next year, desirable though it would be if it only clarified and consolidated the existing accumulation of treaties. We can only hope that the arrival of those new members may help to rectify the present imbalance between the centralisers and the nation states.

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We need a detailed and early analysis of the progress of the draft text from her Majesty's Government. Here I echo the comments of my noble friend Lord Forsyth, to which, I have to say, I thought the Minister's reaction was a little disingenuous.
I gather that the Government intend to produce such an analysis of the final text. But that is too late. It should be easy to share with us sooner the continuous scrutiny and interpretation of the developing text that must be going on within the Foreign and Commonwealth Office and other departments, and to publish regular updates as well as a final appraisal of the final text, which may not appear until next summer.
There may well be much that is useful and worth while in this treaty, as in its predecessors, if only we could take it at face value and separate the benign aspects from the underlying agenda.
One of the central purposes of this treaty—entirely laudable and necessary—was stated to be,
"a simplification of the Treaties with a view to making them clearer and better understood, without changing their meaning".
Those are my italics.
In that objective, the draft treaty clearly fails. It is not a mere consolidation measure of the kind that rattles quickly through our Parliament as we "tidy up" our own laws. Our all-party committee's report reached the view that if the draft treaty was implemented in United Kingdom law it would have a constitutional impact on the United Kingdom. We identified no fewer than 15 areas where that could happen; and we list them in the report. I shall spare the House the full list. My noble friend Lord Norton gave a flavour of those areas in his speech last week, grouping them, perhaps ominously, under the heading, "Confusion, limitation and omission".
We also published the written evidence we received from several distinguished academics. Professor McEldowney of Warwick University pointed out that there was,
"plenty of room for interpretation".
There was "unnecessary vagueness" and there was ambiguity. Vagueness and ambiguity are the hallmarks and the weapons of the Brussels bureaucracy and the fuel of the European courts. They create a centralising vortex.
As is normal, our committee wrote to the Government, to the Lord Privy Seal, Mr Peter Hain, asking him to comment on how the proposed European constitution would affect the constitution of the United Kingdom. We wrote:
"In particular it would be helpful if you would state:
which of the articles in the draft Treaty have potentially significant constitutional implications for the United Kingdom;
what the constitutional effect of the implementation of those articles would be;
how the Government have set about evaluating the effect of any constitutional changes; and
whether the Government have any plans to seek to amend any of these articles during the forthcoming Inter-Governmental Conference".
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We received in reply several bland paragraphs. I shall quote what I believe to be the essence of the Minister's reply. He said:
"The draft Treaty does make some changes to the existing EU Treaties. These are designed to improve the EU's efficiency and effectiveness. The Treaty proposes making co-decision the normal legislative procedure, thus giving the European Parliament a greater say in decision-making. It also proposes the extension of Qualified Majority Voting (QMV) into some new policy areas. But, overall, the draft text does not change the fundamental relationship between the EU and the Member States".
I must say that I find that reply absolutely startling in its complacency. In some minds, clearly, the legend of the mere tidying-up exercise persists.
The Minister continued by stating that other, earlier treaties have introduced more profound changes than this draft proposal. Certainly the original treaty signed in the early 1970s by Edward Heath, about which we long remained largely in the dark, fell into that category, but that hardly strengthens the Government's argument about the quality and nature of the treaty that we are debating today. Indeed, that is a rather puerile response.
Finally, the Minister's reply rests on the argument that the Government will insist on unanimity for treaty change and in the other areas with which the House will be familiar: tax, social security, defence, and so on. But where is the value of unanimity if, at the last ditch, the Government give in? The Government's negotiating posture of so-called red lines is simplistic and wrong. Their red lines will turn to Maginot lines, because the other side will simply go round them and, with weasel words, both sides will claim victory.
This is not a box-ticking exercise; it is about how to advance the broad, long-term, strategic objectives of this country within an open, positive Europe of nation states against the ranks of those who want to submerge us in a centralised, inward-looking, denationalised superstate. They do not even bother to disguise that now.
Is not Europe's written constitution, drafted on a centralising agenda, bound to trample on our unwritten constitution? Their courts will override and displace ours and their governance will override the primacy of our parliamentary democracy unless we and other like-minded nations stop them.
As Professor McEldowney pointed out, although the draft constitution stops short of creating a sovereign state, many of the attributes granted to the European Union—he cited, inter alia,
"conferral of legal personality; the notion of citizenship of the EU … changes in the way decisions may be made without the national vote; the creation of a President and Foreign Minister; and through the proposed document itself a written constitution"—
are analogous to a wholly sovereign state.
It could not be clearer. The draft constitution threatens us with a major step in the wrong direction. It is part of an organic process. As the professor concludes, it "initiates a process". So there is much to fight for. I hope that the Government will indeed fight. There has been loose, spinning talk of the use of the veto in recent days. We shall see. Whatever the final

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outcome, the implications of this treaty are such that if it is ever to be accepted by the people of this country, it must be put to them to decide on. If it could be worth a veto, it is certainly worth a referendum.
5.4 p.m.
Baroness Park of Monmouth: My Lords, I, too, am grateful for the opportunity to draw attention to aspects of the proposed treaty that should continue to give us grave concern. I have spoken in earlier debates about the provision in the treaty that will enable our defence—and, indeed, our foreign affairs—vetoes to be nullified and a decision taken by qualified majority voting if it can be argued, as it will be, that the action involves the implementation of a common strategy.
Common strategies are generally broad statements of policy and principles on the lines of, "Let us help Russia with her economy" or, "Let us advance peace in the Middle East", which are very worthy. Then, some time later, the Council of Ministers could decide to implement that by sending troops to keep the peace in Abkhazia or Palestine. That could happen, and only British troops and some professional French troops could probably perform that dangerous and skilled kind of peacemaking. Our troops are overstretched and the Government are already considering how much easier and cheaper it would be just to have drones instead of aircraft and technology instead of human beings. That will not work in the Congo or in Abkhazia.
We are not prepared, it seems, to spend money on defence. We should therefore be correspondingly careful to ensure that the treaty does not expose us—as do at least two of its clauses—to the danger of a bland foreign policy decision leading to a defence commitment that we shall not be able to veto. It is disquieting that in their response to our report, the Government felt that to exclude CFSP specifically from the flexibility clause, Article I.17, all that they need to do is to,
"ensure the status of CFSP is clear",
without any specific change in the text. They state:
"Revision of the text's wording would not in fact be necessary to achieve this".
I was struck on reading Mrs Gisela Stuart's admirable, courageous and devastating article on the conduct of the convention's proceedings to learn that it was only in the final months that simultaneous translation was available or that delegates could be accompanied by an assistant to give legal advice; that it was a struggle to get documents in English; and that on at least one occasion the English version of a defence document was reproduced in French with the original references to NATO omitted from the text.
In those circumstances, I am not much encouraged to read the Government's response to our report, in which at paragraph 35 we stated that there is a need for clarification of whether matters of CFSP fall within the scope of Article 10. The Government reply that they have,
"sought clarification that this article does indeed, as intended, strongly reflect existing case law".
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If it does, we should get it changed, but the point that concerns me is that it is Jean-Claude Piris, the director-general of the Council's legal service, who has confirmed that that is the case. Did we consult our own legal advisers?
I am not reassured, either, by paragraph 50 of the Government's response to our report, which no longer expressly includes foreign policy—although it specifies treaty change—as a vital area to which QMV should not be extended. Foreign policy decisions can lead to defence decisions and decisions about trade, development and relations with other countries. We cannot afford to be so ready to yield or to be so flexible on the point of unanimity in foreign affairs. I hope that it is true that, as was reported this morning, we are after all to insist on the veto in that area.
It is far from reassuring to find that Article I.12.2 on exclusive competences gives the Union the power to amend the list of those competences in the case of concluding international agreements and lists competition as an exclusive competence on the grounds that it may from time be time be necessary,
"for the functioning of the internal market or because it affects an internal Union act".
Does the legal entity that the Union is taking to itself and the,
"exclusive competence for the conclusion of an international agreement when it is necessary to enable the Union to exercise its internal competence",
mean that we can no longer sign international treaties in our own right, but must see ourselves subsumed within the Union's decision?
What does that do to our national status in the Security Council, or, indeed, in such bodies as the World Trade Organisation? How will it affect our international agreements on, for instance, aviation or in the area of justice? The conferring of a legal entity on the Union must surely lead to limitation or constriction of our own powers to conclude international agreements, which in turn will limit our freedom of action in the much wider world outside Europe—in the Commonwealth, in the UN and in our relations with the Americans and with China.
The answers that we have received from the Government seem always to prefer not to confront the awkward fact that we are being relentlessly propelled along the path laid out by the French, the Belgians and the Germans—the old hands in the EU—to more Brussels bureaucracy and less national independence. What makes it worse is that we are to be part of a grand European strategy, the Solana strategy, warmly welcomed by the Government for its coherent approach to the EU's actions and policies. The Government hope that it will develop more robust positions to tackle global security threats. It is soon to be endorsed and implemented, and—here we go again—the political decisions will be by QMV because they will be part of a common strategy, and the robust action will begin.
It is no surprise that we are told that resolution of the Arab-Israeli conflict is a strategic priority for Europe—that is quite right. But, the strategy states

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that we need to develop a culture that sponsors early, rapid and when necessary robust intervention. Furthermore, it says:
"As a union of 25 members, spending a total of 160 billion Euros on defence, we should, if required, be able to sustain several operations simultaneously".
I hope that the Treasury hears those words but that it remembers that Europe's defence budget probably includes the money spent on conscript forces for normal national defence rather than the ambitious plans for EU intervention. Our own forces already sustain several operations simultaneously— Afghanistan, Iraq, Northern Ireland, Kosovo and such regular commitments as Cyprus and the Falklands. Many more members of our Armed Forces serve outside their own country than any other EU member state. It seems that they can expect more employment under ESDP, but the decision to do so will be a European decision because it will implement foreign policy decisions taken by the EU.
We are often told that articles in the new draft treaty are harmless and that no action is needed to change them because they already figured in some earlier treaty and we lived with them then. If they are against our interests, now is surely the time to change them. The Select Committee stressed at the very beginning of the report that discussion of issues raised by the draft treaty,
"has to be during the IGC, as the subsequent ratification process by national parliaments does not allow an opportunity for amendment of the Treaty, only for its approval or rejection".
The Government, in their reply, agree that Parliament must discuss the draft treaty before it is finalised and signed so that the Government may be guided by Parliament's views, which in turn are supposed to be the views of the country. They remind us that they have attended eight committee sessions on the IGC this autumn, including three of the new Standing Committee on the IGC. They claim that they have given many opportunities to debate the treaty in both Houses.
In the first place, speaking to committees is not the same as a discussion on the Floor of the House. In any case, the claim that we have been able to debate the treaty is simply not true. Apart from a debate in this House on the Government's White Paper in September, well before the Select Committee's report was made available on 10th October—the report was indispensable in beginning to understand the draft of such an arcane convention document—neither House has had a chance to debate the draft in full knowledge of its contents and their implications for the future of our country. I do not count one or two speeches among 52 last Wednesday.
Ministers are apparently prepared to decide all those grave issues under pressure, all to get things settled by the end of this year to meet the demands of the Italians and those of the architects of the treaty— the French, the Germans and the Belgians. Why? Why can we not say now that the decision will be taken in the next five months? That would still be before June 2004, when enlargement takes place. Why are we not
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giving a lead to the Poles, the Spaniards, the Danes and all those countries who have rights but are being bullied and bulldozed into agreeing a deeply tortuous and complex set of rules that will bind them for ever? At the moment they have no voice. Are they not Europeans too? What is the point of their escaping from the Warsaw Pact only to lose their sovereignty without even having the chance to argue? What sort of a Europe is it where the Germans threaten the smaller countries and advise them strongly not to try to hold up the treaty?
If we reject the treaty—and I hope that we shall— we can always negotiate further improvements to the existing treaty in the light of, say, five years' experience of enlargement. Surely that would be both reasonable and practical. I urge the Government to face the fact that if they bind us now to unacceptable conditions there will be no choice but to reject the treaty in toto and start again after a period of learning how the enlarged community needs to be managed.
The alternative, which would be responsible behaviour, is to hold out now for proper negotiations over several months. That would give Parliament time to debate the issue in detail on the Floor of both Houses. On balance, I hope that the Government will decide to stop now and start again, perhaps in 2010, in the light of experience, but that is perhaps too much to hope for. One thing is certain: the country will not forgive Ministers who give in to pressure and accept a potentially dangerous treaty, now that the conditions under which the draft was created are known.
Those of us who argue this point are not thinking in terms of leaving the Union; we are thinking of making it work, in the light of the further experience that enlargement will bring.
5.15 p.m.
Lord Monson: My Lords, it is always a pleasure to follow the noble Baroness, Lady Park, particularly on this occasion. When I re-read yesterday the excellent speech that the noble Lord, Lord Blackwell, made in your Lordships' House exactly a week ago, reinforced by the powerful contributions from the noble Lords, Lord Norton of Louth and Lord Howell of Guildford, I wondered whether I ought to scratch, since they had said most of what I wanted to say and said it much better than I could.
I decided to press ahead for two reasons only. First, the excellent contributions that I have mentioned were scattered at random throughout a long debate covering every sort of defence and foreign policy issue—Iraq, the terrorist atrocities in Istanbul, the problems of Africa, the World Trade Organisation and so on—so they may not have received the attention that they deserved. That is inevitable in Queen's Speech debates encompassing so many important subjects.
Secondly, much has happened on the EU front in the past week; notably, the courageous expose by the admirable Gisela Stuart, who was rightly held up to us six and a half years ago as the very model of what an intelligent young new Labour MP should be—"new"

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in both senses. Moreover, she is indisputably from the heart of Europe in so far as she is Bavarian-born. I shall return to her revelations later.
It has been pointed out that the draft constitution is nothing like a conventional constitution on the lines of the American one, but more like an unusually pretentious party political manifesto written by a large and disparate committee. But style is its least important aspect; it is the content that should worry us. It is not easy to single out what is most objectionable. For me, it is probably Article 10(1) asserting the primacy of EU constitutional law over the laws of member states. That is not just a clarification of the status quo, as is sometimes claimed, certainly not so far as concerns the UK or Germany, but a giant leap forward. If you are standing on the edge of a cliff, a giant leap forward is not always a good idea.
Hard on the heels of that article comes Article 13(2), which provides for the innocuous-sounding "shared competencies", a real Trojan horse, as the noble Lord, Lord Waddington, has reminded us. Not far behind come the passerelle proposals, criticised by the noble and learned Lord, Lord Howe, even by the noble Lord, Lord Williamson of Horton, last week and the Select Committee chaired by the noble Lord, Lord Grenfell, which, it is safe to say, is largely Euro-enthusiastic. I suspect that the passerelle will soon be dropped to a fanfare of trumpets, with Mr Blair claiming a great negotiating victory in the hope that that will divert the nation's attention from all the dangerous stuff that remains in the document.
Article 9(3) contains the subsidiarity proposals. I have always disliked the principle of subsidiarity since it implies that the European Union is the fount of all legitimate power and authority, although it may graciously decide to devolve a fraction of that power from time to time to the ancient nation states of Europe. Those states have ended up enjoying less autonomy in certain fields than Rhode Island, Wyoming, New South Wales or Manitoba. Nevertheless, had subsidiarity worked in practice, one might have swallowed the principle. But it has not worked in practice, and the current proposals do little to improve matters—a small wonder, perhaps, when one reads that only 11 out of the 200 amendments tabled by our Government have been accepted.
Is there anything good in the proposed constitution? Is there an up side? Well, it has dropped all references to "ever-closer union"; but, as many of us suspected, that is mere window dressing. Behind the scenes, the integrationists are harder at work than ever. As Gisela Stuart wrote:
"The convention was riddled with imperfections and moulded by a largely unaccountable political elite set on a particular outcome from the very start. Any representative who took issue with the fundamental goal of deeper integration was sidelined. Anti-Americanism remains one of the less edifying driving forces in the process of European integration. The Convention brought together a self-selected group of the European political elite, many of whom see national parliaments as an obstacle".
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She continued:
"This constitution initiates processes for future development with the end of deeper integration. Where the political climate means certain ideas for future integration are not yet acceptable, the draft Constitution creates a structure for a process to develop later".
Always remember, my Lords, nobody could possibly accuse Ms Stuart of being a little Englander.
Indeed, no less distinguished an individual than Mr Denis MacShane declared only two days ago that,
"there is no end station for Europe",
which takes us back to trains, buses and bicycles and this unstable edifice that will topple over unless one keeps pedalling frantically. An individual who cannot stand back for a while and relax is neurotic. The same applies to institutions.
The irony is that, as the noble Lord, Lord Cockfield, who is no longer in his place, has told us on past occasions, ever-closer union was originally meant to apply to peoples not governments. Ever-closer union between peoples is an excellent idea, provided it is spontaneous and voluntary and not pushed too far. However, even that aspiration is now in jeopardy. Apparent affection for the EU in so many existing member states and those that will join us in four and a half months' time, is only skin deep, inspired mainly by fear—of Russia, Turkey or an unstable and overpopulated north Africa, depending on one's location—combined with a perfectly natural disinclination to look a gift horse in the mouth.
Now that so many former net beneficiaries of the EU have become net contributors, however, coupled with anger at the one-size-fits-all interest rate policy arising from the adoption of the euro and at the selective application of the stability pact—the Portuguese are furious and so are the Dutch, formerly among the Benelux true believers—it is clear that the veneer of affection is wearing away fast. Coupled with a fierce reluctance in the EU institutions to stop interfering in the nooks and crannies of everyday life— in the immortal words of the noble Lord, Lord Hurd of Westwell—and a refusal to roll back the acquis communautaire in any meaningful way, this disaffection will surely grow. Many of the eastern European countries joining in May next year will become disillusioned after the inevitable honeymoon period. Certainly there will be champagne and fireworks to start with, but the mood after four or five years may be very different.
As I said at the outset, a lot has happened in the week since we last debated this subject. There were Gisela Stuart's revelations, and Denis MacShane's calls for "surrender" according to the Sun or the "unfurling of the white flag" according to The Times. However, it was also revealed in the Independent that a Liberal Democrat MEP no less, Nick Clegg, had written of,
"the myth of a European demos".
He went on to say that,
"there is clearly no … pan-European democratic culture which brings all European voters together … the evidence suggests that, far from converging, the European electorates are in many respects diverging from each other.

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The Government should take that on board and not agree to any new constitution that does not go with the grain of human nature rather than against it.
5.25 p.m.
Lord Vinson: My Lords, I am also very grateful to the noble Lord, Lord Forsyth, for introducing this debate, which may well turn out to be an historic one.
The point has already been well made that signing up to the new EU convention in anything like its present form would lead to a massive shift from Westminster to Brussels in the control of our own affairs. Like many of your Lordships, I spent many months of my life encouraging fellow citizens that joining the EU would be beneficial to this country. Like many, I was attracted by the vision of the whole concept.
Over the years, however, I have realised that dreams and reality mostly work out differently and I am no longer convinced that our present, let alone deeper membership of the EU, is beneficial. We should not just be interested in having greater influence over our EU partners; we should be solely interested in what is ultimately for the benefit of the British people.
As I talk to people at all levels, I find that many like myself are beginning to seethe with anger at the tidal flow of pernicious and often wholly unnecessary regulation that is beginning to dominate our working lives. In the past, when a citizen felt that there was some regulatory injustice, he could approach his MP who, in turn, wrote to the department concerned, probably went to see the Minister, and, if a good enough case had been made, the regulation was abandoned or corrected. The reason that citizens now seethe is because it is virtually impossible to right a regulatory wrong. One MP could and can just about deal with the problems of his 65,000 constituents. A Euro MP is swamped by the problems of having well over 600,000 constituents—a figure now likely to rise as the European Parliament is adjusted to suit incoming nations. Regulation without rectification is as bad as taxation without representation. Both are slow time bombs on the political front.
The safety valve of representative democracy is reaching breaking point and every poll indicates that the public is increasingly Euro-sceptic as the vision of a single Europe turns into a nightmare. So, before we sign up for further integration, we should assess where we have come from, where we are, and what economic and social benefits—if any—further integration would give us. That is why I and 50 other Members of the House of Lords have been pressing for a parliamentary inquiry into the advantages and disadvantages of Britain's continuing EU membership. Among those Members are: the noble Baroness, Lady Thatcher, a former Prime Minister; the noble Lord, Lord Weatherill, a former Speaker; the noble Baroness, Lady Mallalieu, a former Labour spokesman on legal affairs; and many influential Cross-Benchers such as the noble Lord, Lord Moran.
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The House of Lords Liaison Committee turned down our request on 1lth November on the grounds that it was inopportune and might indirectly prejudice the negotiations currently going on. However, we believe that the issues are so important and momentous that we are most unwilling to take no for an answer. The timing of the intergovernmental conference on the draft constitution for Europe makes an assessment of EU costs and benefits a matter of compelling urgency. The Prime Minister repeatedly asserts that there are huge benefits to be derived from our membership, but does not provide the factual basis for that assertion. Soon, however, the Government must make a formal decision on whether to ratify the text of the proposed new constitution of Europe. It will lay the foundations of political and legal authority in this country for decades. Given that the Government are holding out against a referendum on the issue, it is truly astonishing that Parliament should be asked to approve such a hugely significant step without being provided with objective information on the benefits of EU membership.
As I wrote to the committee at the time:
"Such a report could clearly show that withdrawal would be unrealistic, impractical and economically and politically damaging. Alternatively it might indicate that, as with Norway and other countries—an associate relationship with the EU would be both achievable and advantageous".
It would also be particularly appropriate at a time when, as I pointed out earlier, our trading deficit with the EU has reached an all-time record high, at £2 billion per month in the negative. That shows that, at least in trading terms, our EC partners need us more than we need them.
Even if the Government succeed at the forthcoming convention in defending the red lines, it will be at the expense of seemingly endless concessions such as the momentously important defence deal under which a group of European military planners will operate outside NATO, greatly to the latter's detriment and to the detriment of our relationship with the United States.
It cannot be repeated enough that if we do not sign up to the convention, we are not condemned to a second-tier relationship with Europe. France and Germany can continue on their own way breaking the rules as they choose and taking with them some of the countries that may want to join them. We—to quote the Sunday Times of the week before last—can,
"stay cheerfully in the slow lane: there lies a faster route to economic growth and certainly to greater freedom".
Indeed, the very brave Gisela Stuart, who has been mentioned more than once tonight, has also been reported as saying:
"Britain should take action now to start 'repatriating powers' from Brussels".
She argues that the EU,
"will not collapse in a heap"
if Britain vetoes the blueprint. She says that the new
constitution is,
"not essential for European enlargement"—
a point that needs very well making.

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If we look across the Atlantic we can see Canada, which keeps its own constitution and currency and yet trades openly with the USA. It is a shining example of the relationship that we could have with Europe. Indeed, many of us thought that that was the type of relationship that we were going to have with Europe.
I believe that it is essential to have a referendum on the new EU constitution. To do so, it is essential to have a top-level inquiry that reveals the economic benefits and disbenefits associated with staying as we are or of further integration.
The Government have a tendency to brush aside debate on the constitutional issues of this country, but these things run very deep in both the human and national psyche. I lost a brother in the last war who gave his life so that this great country, the birthplace of democracy, should continue to govern itself. I for one am not prepared to see us increasingly hand the governance of this country to unaccountable and often corrupt strangers. Without the full facts and without a referendum on the matter, no government could sign up to the new convention with democratic legitimacy. The British people must be asked whether they wish to cross this bridge or whether it is one bridge too far.
5.33 p.m.
Lord Williamson of Horton: My Lords, it has been said that the people have not been sufficiently informed about the new draft treaty. If that is true, it certainly does not apply to me. I have been informed and informed. This is the third time that I have spoken in your Lordships' House on this subject:. Of course I am outdone about 10 to one by the Minister, but to me it seems a lot all the same. None the less, I welcome this debate. I think that the timing is good. We are coming to what could be a decisive meeting at the weekend. We do not know if it will be. However, if it is a decisive meeting, then it is very important that arguments should once again be put forward before that event.
It would certainly be a very important decision to scrap a whole series of treaties defining the roles and responsibilities of the European Union and to replace them with this single draft treaty. Although there are certainly points in the draft treaty which need the most careful attention and possibly amendment, it is none the less worth reflecting that all, or at least a large majority of the representatives of all the national parliaments and all the governments in the convention must have thought that this draft treaty is an advantage for the people and the member states, existing and those shortly to join, of the European Union.
I do not myself find it helpful to discuss the draft treaty in general terms as a "good" or a "bad" treaty, as a blueprint for tyranny, according to the Daily Mail, or as a tidying up exercise, according to a Minister. I take that view because it seems to me that there are big differences in the way in which the draft deals with the different areas—in particular, first, the traditional responsibilities and competences of the Union; secondly, the charter of fundamental rights; and, thirdly, those areas, foreign and security policy and
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issues of justice and home affairs, which are now in the separate intergovernmental pillars 2 and 3 but are brought within a new treaty form in the draft treaty. In short, some changes are marginal and some are significant, but it is not all change.
The first group of issues is in my view the easiest. That is because the short first 16 articles of the draft treaty dealing with the European Union's values, objectives and competences, relations between the European Union and the member states and the rights and freedoms within the European Union are evidently so much clearer and better than what we have now in the much amended Treaty of Rome.
I select just one or two examples from these articles. Article 2 states:
"The Union is founded on the values of respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights".
Those are indeed the values which have attracted hundreds of millions of people to join the community established about 50 years ago by the original six members.
Then again, these articles state:
"The Union shall respect the national identities of the Member States, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government''.
I think that this article is new, but certainly welcome for a country as fiercely independent as the United Kingdom, especially as we have taken important steps recently on the path of devolution.
Then again, Article 9—it has already been quoted, but I think that it is an important article—states:
"the Union shall act within the limits of the competences conferred upon it by the Member States in the Constitution to attain the objectives set out in the Constitution. Competences not conferred upon the Union in the Constitution remain with the Member States".
That also is new. Although implicit before, it is now explicit. I think that that helps to avoid misunderstanding.
In the first part of the treaty, we have also for the first time in a simple form the list of Union competences: exclusive competences—they are very short—such as the common commercial policy; shared competences, such as environment and agriculture; and areas of supporting, co-ordinating or complementary action such as vocational training. I find that much clearer although in substance it is predominantly a restatement of the present position. But I think that that is good.
There is one addition here about which I have heard little comment; namely, energy as a shared competence. That is matched in Part III by a new Section 10, Article III–157, on energy. Is the Minister content with this text? Is she confident that we shall remain 100 per cent in control of the UK's natural oil and gas production? I should like to hear that confirmed. It is an important point which has not been discussed. It is a new competence. We have a lot of old competences, but we here have a new competence.

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There are a number of other improvements in Part I of the treaty and the protocols. For example, there is a greater democratic element through more co-decision between Council and European Parliament. There is a more transparent system of law making through opening up the legislative sessions of the Council to the media and the public. I was in favour of that 10 or perhaps 20 years ago and usually was laughed out of court, though it seems now to be coming into effect. I am glad about that. There is a better definition of EU legislation as regards EU laws, EU framework laws and EU regulations. There is a modestly improved role for this House and other national parliaments in the monitoring of the application of the principle of subsidiarity.
I turn now to the European Charter of Fundamental Rights. The United Kingdom has accepted this before, but not in a treaty; there is a pretty big difference. It is important that the charter, which stems from the best of motives, does not have unintended consequences. I understand that it is for that reason that we have new articles—in particular, Article II–51—governing the interpretation and application of the charter. I suppose that the key text is that which states:
"This Charter does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks defined in the other Parts of the Constitution".
That sounds very firm. Will the noble Baroness confirm that the Government consider that this is a copper-bottomed guarantee against unintended consequences from the inclusion of the charter in a treaty? Although it is in a protocol, it has treaty force.
I turn now to foreign and security policy and justice and home affairs; their treatment is quite different from the basically conservative treatment of traditional competencies. We are invited to take a view on changes and new proposals that would include, in particular, the creation of an enhanced role for a European Union Minister of foreign affairs and the creation of a European armaments and strategic research agency. There is explicit reference to the creation of a common European asylum system and, if it has not already been dropped, the creation of a possible European public prosecutor.
I look forward to hearing what the noble Baroness has to say about foreign and security policy, especially as regards the double-hatted role of the EU Minister of foreign affairs. That is important because he will chair the General Affairs Council; he will contribute towards the preparation of the common foreign and security policy; and he will ensure implementation of European decisions adopted by the heads of state and government in the European Council or by the Council of Ministers. That is the text in Article 27 and Article III–197. However, in my version the words are not exactly the same in the two articles, which is an interesting point. He would also have quite a powerful army, including more than 4,000 staff in foreign missions or delegations, a budget of perhaps £5 billion and 130 missions, which is rather more than many of
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the member states. The EU Minister of foreign affairs would be a powerful post on which I would like further comment.
It could be argued that this would be a more effective system, which I think that the noble Lord, Lord Hurd, suggested. But the Government need to be satisfied that the control by member states guards, in practice, against the risk of over-ambition in European Union foreign policy. We may have had under-ambition in European Union foreign policy—we probably did in the past—but we must watch out for the danger of going in the opposite direction. I hope that we can be quite sure that the Government and other friendly states will ditch the reintroduced Italian proposal under which a proposal from the European Union Minister to the council will automatically have qualified majority voting. That would be quite unacceptable.
Finally, in the debate on the gracious Speech and possibly again today, in the time available, the Minister could not reply to all the questions, except perhaps by recording her replies on a tape recorder and playing it on fast forward. None the less, I recall my question on the passerelle clause. It is a serious point, although I light-heartedly say that the Minister would be well advised to look suspiciously at any clause that has a French name. But I am referring to the passerelle clause in Article 24.4. A number of people have objected to it; I object to it; and the Select Committee has objected to it. That is not surprising because although subject itself to unanimity, it would bypass national parliaments. It would make it possible to transfer areas from unanimity to qualifying majority while bypassing national parliaments. In my view, it is sufficiently important to have a comment from the Government. I hope that we shall have that when the noble Baroness replies.
5.44 p.m.
Lord Willoughby de Broke: My Lords, I, too, am grateful to my noble friend Lord Forsyth for introducing this important debate at this timely moment. I hope that he will not be upset by the criticism that his speech may have been over robust; I do not believe that it was. He should draw comfort from the latest Euro barometer poll published yesterday, which showed that fewer than half of the EU's population—48 per cent to be exact—now support the EU project.
I am pleased but not surprised to note that support for the EU in Britain has slumped to 28 per cent of people polled. In fact, I am surprised that it was that high. Despite that emphatic thumbs down from the public, we are now promised more EU—more of the same—in a constitution that will hand ever more power from member states to the institutions of an EU, which is now disliked and distrusted by the majority of people who live in it.
The means by which the constitution was produced is the perfect example of what has gone so badly wrong with the great EU dream. The Laeken Declaration aimed to bring the EU closer to its citizens and to

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create more democracy, transparency and efficiency, with particular reference to the role of national parliaments. A constitution was mentioned only peripherally in the Laeken Declaration, which stated that,
"in the long run this might lead to the adoption of a constitutional text in the Union".
I repeat, "in the long run". But only 20 months, some two years later, we are presented with a full-blown constitution, which fundamentally changes the relationship between the EU and its member states.
The process was flawed from the start. It always was top down, with a presidency of the three wise (if rather shop-soiled) federalists, led by Monsieur Giscard d'Estaing, who was such a friend to the late Emperor Bokassa. The two British MPs selected as representatives from our Parliament were Gisela Stuart and David Heathcoat-Amory. Noble Lords have mentioned Gisela Stuart: she is a Labour MP and. as my noble friend Lord Forsyth said, of impeccable Euro credentials. David Heathcoat-Amory is a Conservative MP and I would describe him as being broadly Euro-realist. They have both produced a pamphlet summing up their experiences and opinions of the convention process. I am afraid that they make deeply depressing reading for anyone who believes that decisions in the convention were taken in an open and democratic way.
What is so striking is the similarity of their views, even though they are, so to speak, coming from opposite sides of the hill. Gisela Stuart was a member of the 13-member strong Praesidium. In her paper she states:
"In all the proceedings of the Praesidium there was an unspoken assumption that the acquis communautaire was untouchable. The debates focused solely on where we could do more at European level. Any representative who took issue with the fundamental goal of deeper integration was sidelined. And yet the concerted efforts by the Commission and the EP to enhance their influence were not seen as power-grabbing but as being good Europeans".
David Heathcoat-Amory again summed that up in his paper and supports Gisela Stuart. He states:
"The Secretariat of the Convention was drawn from the officials of the Council of Ministers, augmented by the Commission and the EP… To them, criticising the integration process is like calling into question the entire enterprise. The mindset of the Convention was therefore firmly integrationist and instinctively hostile to suggestions that EU powers should be devolved or limited".
These were two of our representatives who spent 16 hard months in the convention working on the coal-face. We should take note of what they had to say about the procedures therein. They both served on working groups and both give telling examples of how conclusions reached by the working groups were either overturned or completely ignored by the presidency.
Gisela Stuart, who—I remind your Lordships—was a member of the Praesidium states in her paper that the agenda in Praesidium meetings was merely indicative and that the mass of paper produced meant that large parts of the text were agreed without adequate debate. She gives numerous examples of important documents, which have already been mentioned, that were produced too late to be properly scrutinised. One example in particular is Article 17 of the flexibility
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clause. According to Gisela Stuart, this was driven through the Praesidium by presenting to the convention a text which did not fully reflect what had been agreed. Is that really what the Government want to sign up to?
So it goes on: a relentless drive from the top to give more power to the unelected centre. Nowhere in the sorry document that is the constitution is there a single proposal to return powers to member states. It is one-way traffic, the EU élites giving themselves more power. In spite of what was said by the noble Lord, Lord Radice, national parliaments are weakened rather than strengthened, while the whole concept of subsidiarity is, I am afraid, fraudulent. It has never worked, no one really knows what it means and the term "subsidiarity" does not even appear in the index of judgments of the European Court of Justice.
It is clear that many new competences have been given to the EU institutions. The noble Lord, Lord Williamson of Horton, just mentioned one of the most important of those, the energy competence, which so far as I know was not mentioned in any of the previous treaties, yet which is proposed as a shared competence in the current constitution. Like the noble Lord, I look forward to the Minister making clear what is the Government's position on that when she comes to wind up the debate.
If the report in today's Telegraph is true, then new and damaging clauses have been added to the constitution during the IGC process, but of course I look forward to the Foreign Office telling us "not to worry" and that "it will never happen". Further, with irony-rich brazenness, France has called on member states not to place national interests above the European cause. The words "pot" and "kettle" come to mind. Before we listen to Mr Chirac's moving appeal, we must ask ourselves: how will Britain benefit from the constitution? The short answer is that we will not. We are ceding power, that much is certain, but in return for what? What will we gain?
We will gain nothing. The EU model is a failure that means low growth, high unemployment, high taxes and pervasive over-regulation. If this is where the so-called "EU fast lane" is leading us, then we should have none of it.
5.53 p.m.
Baroness Strange: My Lords, we are all grateful to the noble Lord, Lord Forsyth of Drumlean, for introducing a subject which will affect all of us, our children and our grandchildren for the next 100 years. I have seven British grandchildren and two French grandchildren who live in France. This constitution will affect them all for the rest of their lives.
I can assure noble Lords that my speech will be almost subliminal as so many noble Lords, including the noble Lords, Lord Waddington, Lord Lang, Lord Willoughby de Broke and Lord Vinson, the noble Baroness, Lady Park, and my noble friends Lord Chalfont, Lord Monson and Lord Williamson have already said much of what I should have liked to say, and have said it very much better. Therefore I shall be brief.

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When I was 10 years old, a very long time ago now, just before the start of the Second World War, I had a dream in my mind about Europe. It seemed to me that so many nations with long histories and traditions, all living so close together, should combine to make themselves the united nations of Europe. They all had different languages, legal systems, currencies, sovereigns and different ways of doing things, yet they all had a great deal in common. Like a family, I felt that they should share those things which they had in common and respect each other's differences. That dream is not happening; it is turning fast into a nightmare in which the individual essences of each country—along with much of their finances—are being sucked into an internal, undemocratic vacuum over which no one has any control.
When a dream becomes a nightmare, there is only one way to stop it and that is to wake up. Gradually, as you wake up, you manage to gain control of the nightmare, to restore sense to it, so that it can return again to being the dream that it once was. We are separate countries and we can never share a foreign policy. Perhaps it might be right one day to share a common currency. We might all have dollars, roubles or yen, but at the moment it would severely damage our economy and might do so for ever. To attempt to share a common defence force is only to split ourselves from NATO, which both the Minister who is to reply to the debate and I believe is something that one should never do. That is because not only has NATO kept us all from war for almost 60 years, and not only because it is backed by the power and strength of our American allies, but because it works. You tamper with anything that works at your peril.
Nor should our judiciary be "harmonised"—which is rather a weasel word—to conform to the practices of other legal systems. Before we knew where we were, the dread Code Napoléon might be back and we would be forced to have 10 months in the year. The Rubicon is lying in wait for us and we must be very careful indeed not to cross it.
Let us wake up from the shades of the European nightmare which can only explode in our faces. Let us start again and rebuild our European dream.
5.56 p.m.
The Duke of Montrose: My Lords, it is a great pleasure to follow my kinswoman the noble Baroness, Lady Strange, in this debate, and I thank my noble friend Lord Forsyth for initiating it. Perhaps noble Lords will forgive me if I express some of my delight at his introduction into the debate of the matter of the 300th anniversary of the Union of Crowns. My direct ancestor, the third Earl of Montrose, had the sword of his ancestor, who had lived 300 years earlier, specially refurbished, along with all his other accoutrements, in order to accompany the King of Scotland in attendance at the new Palace of Whitehall.
We have heard a few exchanges today about the contributions made by Scots in the Chambers of this Parliament, but this is a very good example of an area
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in which the Scots can participate well. If nothing else, that can be seen in this debate. Some five noble Lords resident in Scotland are taking part.
Many noble Lords have shone a light on the big national issues that are contained in our present, as well as our future, relations with Europe. Perhaps I may take one point detailed in the report produced by the committee of which my noble friend Lord Lang is a member.
Lord Forsyth of Drumlean: My Lords, I apologise for interrupting my noble friend. I believe that I did my sums wrongly. In case my noble friend gets into trouble on my account, it is the 400th anniversary of the Union of Crowns. He followed my arithmetic, but in fact it is the 400th anniversary.
The Duke of Montrose: My Lords, I thank my noble friend for that correction. I picked up the date wrongly, but 100 years is neither here nor there.
I want to raise the profile of a small but probably very difficult issue: how will the proposals in the draft constitution affect relationships as regards the European Union between our central and devolved administrations? Taking only one aspect of the constitution, if it was adopted, it would be easy to say that because the proportion of UK votes in the Council of Ministers will fall, we should feel a little worse off. But I think that the devolved administrations will look at those proposals with a certain delight because their presence is to be formally recognised in a number of ways. From what I have been able to read, it would appear that the EU will have to become considerably more familiar with the competences of the devolved authorities.
The most contentious issues appear to lie in the sphere of subsidiarity. The definitions surrounding the "subsidiarity protocol" obviously require to be clarified. No doubt other noble Lords will also have received the briefing from the Law Society in which it points out that the definitions which presently exist are not included in the new treaty. If the EU opens up the sphere where subsidiarity comes into play, it will have to produce a "subsidiarity impact assessment". That is going to have to take account of its impact on regional legislation, which is really quite an interesting point when one considers the many forms of devolved administration to which we are subjecting ourselves in this country.
Noble Lords will be aware that the first requirement of the subsidiarity protocol is a wide consultation to include the regional and local dimensions of the proposed action. Under the present proposals, the EU's only requirement is that it is communicated to the national parliament. The issue then arises that, if the national parliament is not particularly friendly with the devolved administration, what powers will the EU assume to ensure that this requirement is carried out? How can it ensure that there is wide consultation?
Then again, if the national parliament has only six weeks to send its "reasoned opinion" to all the EU bodies and there is a delay in forwarding the proposal,

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will it be able to ensure that an extension is given in order that the devolved administrations have the same six-week time-scale? This is particularly important as it would appear that the devolved administrations are to have a role in deciding whether a particular function in which they have competence should be subject to subsidiarity.
A problem arises in that there is nothing to say that a national parliament may decide that its "reserved opinion" is more valid than the devolved one. Will parliaments have any say in these matters and how will this be possible?
Perhaps the Minister can answer this question: are we getting into a sphere where some new clauses will have to be dreamed up in the concordats that exist between the devolved UK administrations? The devolved administrations will certainly feel that their presence is strengthened by the advancement of the Committee of the Regions to a formal advisory body to the Union as a whole, with the ability to issue its own opinions.
But considering that the Committee of the Regions will now have access to the European Court of Justice, can the Minister tell the House whether a devolved administration aggrieved over a ruling on subsidiarity—probably together with other EU administrations—could use the Committee of the Regions to take the UK Government to court to try to have the ruling overturned?
The two committees of your Lordships' House have certainly done sterling work in drawing our attention to areas where the present proposals will affect life in this country. There can be no doubt that, as a country without a written constitution, as other noble Lords have pointed out, the consolidation of all these treaties into a so-called "constitution", with its implied authority, will be a bigger change for us than for almost any other European country.
It is a pity that the debate is taking place so close to the Prime Minister's final negotiations at the IGC. It is hard to know whether he will take any notice of what we say.
6.2 p.m.
Lord Grenfell: My Lords, it seems as if it was only yesterday—in fact it was a week ago—that I was on my feet testing your Lordships' patience with a 17-minute discourse on what our report on the draft treaty was all about and what conclusions it reached. I promise that I shall not repeat that now. But there were one or two issues in that speech that I need to raise again, more as points of emphasis than making the rash assumption that your Lordships have not read the report.
Perhaps I may take up the point made by the noble Duke, the Duke of Montrose, as to whether it is too late for the Government to take into consideration the proposals and misgivings expressed in the debate so close to the IGC. I share some of his concerns. However, many of the proposals made in the debate have already fallen on the ears of the Government. I mean no discourtesy, but nothing very new has been said. I hope that the Government have already taken
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on board—perhaps as a result of last week's debate— the essentials of the concerns of your Lordships' House.
I should like to pick up on one or two points that have been made in the course of this often very lively debate. The noble Lord, Lord Forsyth, made a very lively speech when introducing the debate. I enjoyed listening to it. I hope that I shall enjoy replying to some of the points he made. I feel that I have to comment on the fact that he is clearly uncomfortable—as I know is the noble Lord, Lord Howell, who raised the point in last week's debate—with the fact that the committee came to the conclusion that power would be shifting from the Commission to the member states. It is important to make absolutely clear why we said that.
The problem may lie in the fact that we have different definitions and conceptions of the Council of Ministers. In the debate last week I said:
"The balance of power is shifting to the Council, the sovereign representatives of the member states of the European Union".— [Official Report, 3/12/03; col. 336.]
So when we say that it is shifting from the Commission to the states, it is perfectly proper to identify the Council as the place in which the member states represent their governments and their nations. I make no excuse for that.
But it is not only that. We were referring, in particular, to the strengthening of the role of the Council through a reform of the six-monthly presidency, which, as the noble Lord, Lord Hurd of Westwell, rightly said, is nonsense and needs to be corrected. We were also saying that clearly a Council president for a once-renewable two-and-a-half year term would add greater coherence. The Government picked this up in their White Paper and said that the reforms to the Council will,
"bring coherence and consistency to the EU's actions, and thereby give the Member States through the Council"—
that is, through the member states—
"much greater capacity to give direction and momentum to the EU's agenda, for example on the Lisbon Process".
That point of view was endorsed by a very large majority of our committee.
Other noble Lords have mentioned that the right to withdraw is an important new departure. I would add only that it is not only a right to withdraw; it is also a right to rejoin afterwards if you wish. That point is occasionally forgotten.
I turn now to the question of the outstanding major issues in the IGC and the views that have been expressed on that. On the voting rights issue, it appears that we are at something of an impasse unless the Italian presidency can come up with a reasonable compromise. We are stuck with the Nice formula. I say "stuck" advisedly because I do not like the Nice formula, which is far too complex and complicated. I do not believe that Spain and Poland will be able to make a terribly good case for insisting on the weighting of their votes under the Nice treaty. But we are stuck with it until 2009 and therefore there is probably a case for waiting a little longer to see how the problem is resolved.

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As to the size of the Commission, it would appear that we are going to be stuck—I use the word again— with one commissioner per state and, for heaven's sake, even two for some states. That would involve the awful prospect of arriving at a Council of 31—which would be absolutely unmanageable—if the larger states were to insist on having two as the price of everyone else having one. I pray that that will not be the case.
The important point is that it is still not too late to find a reasonable comprise. Our committee concluded that the so-called 60/50 formula was a sensible way forward. It was at the time the only sensible one on the table. Since then it has become clear that there are alternatives—you could have 50/50 or 60/60—both of which would allow the smaller countries to create their blocking minorities, which is what they seriously want to have.
This raises the question of the timing of the IGC. In our report, we expressed the view that of course it would be very nice if it could be wrapped up by the end of the Italian presidency. We all like to feel that we have come out at the end of these things with a good result. However, it is essential, in my view, that we do not rush to get a result next weekend. There are major issues outstanding, and it is extraordinarily important that we do not rush them or, worse still, cobble together the kind of fudges that some of us have had experience of in the past. We really should not have such a result on this issue.
We have time; as every noble Lord who has spoken in this debate knows, we have until May 2004 before the new countries accede to the European Union and until June 2004 before the European parliamentary elections take place. That leaves us time in the Irish presidency to work a little more on some issues and ensure that we do not rush next weekend, stopping the clock at midnight or even spilling over into two more days, into making a bad compromise which we will then live to regret. That point was well made by a number of noble Lords, including the noble Baroness, Lady Park. We must not rush these matters.
My third point concerns the noble Lord, Lord Waddington, who, in his usual elegant, terrier-like way, went after many of the points made in the report and the draft treaty. I should like to take him up on the question of legal entity. He intimated that this changed everything, but I do not think that it does. It does not change the fact that competences can be conferred only by the member states. It does not change the fact that member states in the Council still ultimately make the decisions. This is a Union in which the member states have the last word. Article 6 is just one line, stating that the European Union will be a legal entity. It does not go further than that and does not need to, because it has not actually changed anything very much. It has certainly not changed the conferral of powers on the Union or the fact that the member states are ultimately in control.
Lord Waddington: My Lords, surely what the noble Lord says begs the question about whether new
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competences will be found to exist in the rather obscure phraseology of the treaty. That is the whole trouble. The European Court may well conclude that new competences have in fact been conferred on the Union as a result of our signing up to this constitution.
Lord Grenfell: My Lords, I am afraid I do not really share the noble Lord's concern. I thought one of the clearest points in the draft was the setting out and description of those competences and who had the right to confer them—that is, the member states. If that happens, the European Court of Justice is there to take that point, and I hope that it would do so with vigour. Since the noble Lord has mentioned the European Court of Justice, I hope he will correct me if I have misinterpreted his remarks. I had the impression that he was saying it would have jurisdiction over common foreign and security policy. That is simply not the case, as Article III-282 clearly states:
"The Court of Justice shall not have jurisdiction with respect to Articles I-39 and I-40 and the provisions of Chapter II of Title V of Part III concerning the common foreign and security policy".
Of course, Articles I-39 and I-40 refer to the specific provisions for implementing the common foreign and security policy and the common security and defence policy. We need to be quite clear on that point.
Next, is this a constitution? Our committee always found it a problem whether to refer to it as a constitution. It is called a constitutional treaty, but it does not, in fact, make any claim—
Lord Pearson of Rannoch: My Lords, will the noble Lord give way?
Lord Grenfell: My Lords, I was developing my point, but I will.
Lord Pearson of Rannoch: My Lords, so that the noble Lord does not go any further down that route, the draft treaty establishes a constitution for Europe. That is the wording.
Lord Grenfell: My Lords, it is said to be establishing a constitution for Europe, but it does not have many of the features of what we normally know as a constitution. The noble Lord, Lord Waddington, quoted the first 10 words of the draft treaty. It is important to note that the draft treaty does not start with the words, "We, the people". It makes no claim whatever to grass roots legitimacy. In our view, and certainly in my view, it is different.
Giscard had absolutely no mandate to lay the foundations of a state. It was a draft treaty between sovereign states to simplify and replace the confusion of existing treaties and to set out clearly the rules of the conduct of the European Union's business in a European Union of 25 states. You may call that a constitution if you like, but it is nothing like a state constitution. It is certainly more than simply tidying up—I will concede that right away—but it is not the kind of constitution that would be a bottom-up process, starting with the words, "We, the people".

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I should like to say a word or two about the subsidiarity and proportionality items in the draft treaty. I do not think that we lost a battle over the red card—it was not really a battle. A proposal was made, and I think it is right that it did not go any further. I believe that a red card would ultimately devalue the yellow card. People reckon that they can go further and further until they hit the red card and will pay no attention to the yellow card. I would much rather we had a much strengthened yellow card than both a red and yellow card.
Finally, the noble Lord, Lord Willoughby de Broke, said in relation to this point that the draft treaty will weaken national parliaments. I really do not see how you can read that into this draft treaty. I will give just one example, apart from the fact that the subsidiarity mechanism immensely improves the ability of national parliaments to have a say in how the European Union conducts its business. There is something else worth mentioning, and perhaps the Minister could enlighten us.
This morning I received through the Internet a copy of a redrafting of Article IV-7(b) which relates to simplified procedures for revising the constitution; amendment to internal policies. I am afraid I only have the French text—that was all I could get hold of, and I certainly will not impose my French on your Lordships. I will therefore give my own translation of the important part of it. I hope that I translate accurately and not too freely. It says that all initiatives taken by the European Council on the basis of paragraphs 1 and 2—that refers to simplified procedures— is transmitted to national parliaments of member states. In the case of the opposition of a national parliament notified within a delay of six months after its transmission, the European decision foreseen in those paragraphs is not adopted. That is a new power for national parliaments. This is just one example of national parliaments finding that their own powers and influence in running the EU will be improved.
I conclude simply by saying that I do not wish to see a rushed treaty emerging from the weekend's discussions in Brussels. I want time to be taken over it. I believe that the draft treaty was a good starting point—not a blueprint—for governments to seize hold of what was said and knock that into the kind of shape that all of us could accept. In the end, what really matters is that the European Union should have methods of working, guidelines and rules that make a Union of 25, and perhaps more, workable and to the benefit of all the people in Europe.
6.20 p.m.
Lord Stevens of Ludgate: My Lords, it is a great pleasure to follow the noble Lord, Lord Grenfell, who has done so much work on this subject. We are here today to debate the European Union constitution, which has been predicted and wished for by many European leaders for nearly 50 years, in one form or another. We may call it European integration or a federal Europe, but it is heading in the same direction.
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If that is the wish of the majority of countries and of the UK people, so be it, but it is not my wish—nor do I believe it to be desirable, necessary or workable.
In the briefing paper from earlier this year on the Convention on the Future of Europe was a quote from Mr Hain, now Leader of the House of Commons, which is worth repeating. He said:
"A lot of representatives are wondering whether the people who drew up this document have been going to a different convention".
In spite of this, he told the House of Lords Select Committee on the European Union that the treaty was,
"a good deal for Britain".
Obviously, therefore, it appears not to matter that the comments of the UK and some other countries were largely ignored. The Government state that the draft treaty meets key UK goals, because it consolidates the existing EU treaties into a single logically ordered text. They also state that the EU must change because the,
"EU works. But it could work better".
I certainly agree that it could work better. As noble Lords have said, it could start by getting its accounts signed off. In some countries, inaccurate accounts are a criminal offence.
The Government's White Paper states that the draft treaty meets UK goals as, among other things, it provides for a more efficient EU. One of the ways in which it could become more efficient would be to delegate more decision making to its members. However, as pointed out by the Select Committee, not a single competence has been, or will be, returned to member states. Indeed, many new competences are proposed.
I shall concentrate my speech on the economic situation in the EU. The EU, we are told,
"shall work for the sustainable development of Europe based on balanced economic growth a social market economy"—
whatever that is—
"highly competitive and aiming at full employment"—
and so on. That is basically, in my opinion, a load of old waffle. They are worthy objectives, but how on earth are they going to be judged? They are not being fulfilled anyway, even on a loose definition. Growth is not balanced, and France and Germany have unemployment levels approaching 10 per cent.
Let us look at euro-zone trade for a moment. Recent figures from the Bank of France and the Bundesbank show that France and Germany are becoming more reliant on the USA, the UK and other markets for their exports. In the last four years and since the euro was launched, German exports to France grew at less than half the rate of those of the UK—7 per cent versus 13 per cent for the UK. Its exports to the USA grew by 12 per cent. In fact, German exports outside the euro-zone grew at twice the rate within it, and the same is true for France. German exports to non-EU countries now account for 45 percent of its total exports against 43 per cent when the euro was launched. That hardly tallies with the claims made by many, that monetary union leads to an increase in trade between them. The

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Treasury argument, that UK trade within the euro-zone would substantially increase, does not agree with the French and German experience.
Let us turn to old age and pensions. I suppose that I should declare an interest, in that I am a pensioner. The EU population is forecast to drop by the year 2050 from 377 million to 370 million. Germany will lose more than 10 million workers, with the number of workers falling from 50 million to 40 million. Italy will lose 15 million, with the number falling from 35 million to 20 million. The figures were produced by the United Nations this year. In contrast, the UK's working-age population over the same period is forecast to rise modestly to 35 million.
In the USA, there are forecast to be 410 million citizens in 2050, which represents a 43 per cent increase on today's figure. Between now and then, the US working-age population will increase by more than the present working-age population of Germany. In Germany, for every 100 workers, the statistics office forecasts that in 2050 there will be 80 people over 60, compared with the current figure of 43. The German Finance Minister in June this year said that, in 1960, 14 per cent of the federal budget went on funding the state pension programme. The figure is now 29 per cent and, if things remain unchanged, will rise to 80 per cent of the federal budget in 2050. He says that there is, "no way that can function".
France, Germany, Spain and Italy have pay-as-you-go state pension schemes, and the number of pensioners is set to double over the next 30 years. The UK state scheme is small by comparison, partly because it is pegged to inflation rather than increases in average wages. The state pension scheme in Germany takes 11 per cent of GDP compared with 5 per cent in the UK. The European Commission recently forecast that the share of world GDP of the existing members would collapse from 18 per cent now to 10 per cent in 2050.
Let us now consider overseas investment. Foreign companies' investment in the EU dropped by twice as much as that in the UK in 2002, according to Ernst & Young. The UK's share rose to 30 per cent in 2002.I should mention that those figures conflict with the EU figures, but that the EU figures include mergers and acquisitions. Even on EU figures last year, the UK's share of inward investment is still higher than the inflow into France and double that of Germany.
What about the stability pact—"one size fits all"? It was put in place to limit budget deficits to 3 per cent of GDP and backed up by fines and sanctions. France and Germany have breached it, with no fines, no sanctions, no penalties and no assurance that the latest plan will be adhered to. It was a poor pact. It made no allowance for countries' different economies or for structural changes. The circumstances of its collapse by France and Germany has blown the credibility of all formal pacts, including the draft constitution, for the articles of the stability pact are built into the draft constitution. How much sense does it make to discuss a draft when its rules are already breached?
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If the large members cannot behave, what chance is there for the small? There is now a risk that interest rates will have to be raised earlier and higher than otherwise would have been the case. A replacement stability pact has yet to be agreed. If it collapses when it does not suit its largest members, what hope is there for a new constitution? So much for the EU's desire to achieve greater economic integration.
The present draft treaty has no coherent framework for economic policy. A revised draft must take account of a country's specific economic circumstances and an economic reform programme. The collapse of the stability pact will mean that the new countries in the next wave of monetary union have no budgetary or fiscal rules to meet. What a shambles—or, as the Finnish Prime Minister said, "It is a sin".
So for many reasons, including trade, population trends, overseas investment and the stability pact, the European constitution from the UK's point of view needs a radical and total rethink. Given the UK's relatively bright demographic prospects, it would be bizarre to lock our economy into the EU, which is in relentless decline, by agreeing to a constitution that is out of touch with what is going on. Let us not be afraid of the consequences, since we can remain in a European free trade area. Some strange figures have been circulated by the Government of 3 million unemployed if we leave the EU. I have never seen any proper justification for those figures but, as noble Lords have said, the relevant fact is that year in and year out we have a trade deficit with the EU. Is the EU really going to cut that off, and what about the effect on its employment?
Tariffs are much less of a threat to world trade than they were, thanks to GATT, and the USA and steel is a recent example of sanctions being removed.
To conclude, Gisela Stuart, who several noble Lords have mentioned, said this week that,
"the draft is based on a structure reflecting the political and economical attitudes of 50 years ago. The real issue is whether this model for Europe is the most suitable".
Mr Giscard d'Estaing called the draft a great leap forward. Majority voting will be more than doubled, despite Mr Blair's claims that it is a tidying-up exercise. The EU is a byword for bureaucracy. The US constitution is 16 pages long. The draft EU constitution is 246 pages. Even those who have drafted it have little confidence in it. I know that some noble Lords will probably disagree with that comment. They have little confidence in it, but they have put in an opt-out clause. I read in the Daily Telegraph today that a new clause was slipped without debate into the EU constitution two weeks ago that would effectively abolish the veto in broad areas of foreign policy. How on earth can one negotiate on those terms?
The constitution should be rejected and if, after a decent pause, the rest of the EU want to go back to the drawing board, so be it. However, for the reasons that I have outlined, the UK should not. If necessary, let us have a two-speed Europe.
6.30 p.m.
Lord Maclennan of Rogart: My Lords, in seeking to wind up the debate on behalf of these Benches, perhaps I may join those who have thanked the noble Lord, Lord Forsyth, for choosing to initiate it on the eve of what is unquestionably an important meeting of the heads of government to consider the draft constitution. I suppose that it is unlikely that the debate will catch the headlines tomorrow, because certain other discussions on the Chancellor's pre-Budget report will undoubtedly grab more notice. Nevertheless, it is important that this House, which has given great and detailed attention to the proposals for the constitution, should have its own opportunity to formulate proposals and suggestions and generally to enhance the enlightenment of the public.
However, as the noble Lord, Lord Grenfell, pointed out, we have to admit in retrospect that not many new points have been made. Perhaps that is not surprising, because the very open process of the draft constitution's compilation by the convention on which I had the honour to serve as an alternate member has allowed a running commentary on what has been happening. That is not to say that no new points have been made or new emphases given. I draw attention to the remarks of the noble Duke, the Duke of Montrose, for example, who spoke of a matter that has received perhaps less consideration than it should; namely, the effect of the proposed constitution on second-tier government within our own and other countries or perhaps the lack of consideration given by the constitution to that.
The noble Lord, Lord Grenfell, spoke about not being in a hurry. While I broadly agree that diplomatic negotiations should never be hurried, per contra, the advantages of postponement are hard to see at this time. The issues have been well deliberated in the nation states and canvassed in the earlier meetings of council of the IGC. If the forthcoming meeting does not reach agreement on the package of the constitutional draft treaty as a whole, there is a risk that those areas of disagreement will be elevated in importance to the detriment of the recognition of how much of value has already been agreed. That will make the process of agreement a little more difficult, which would be unfortunate.
The whole tenor of our debate has been to question whether the European Union, in considering the draft constitution, is advancing too far and too fast along an integrationist path. It is reasonable to raise the possibility that it is scarcely moving fast enough to keep abreast of the changes in the global society in which the Union is operating. It is surely the case that when the Union does manage in some way to concert its views and take a clear stand—for example, over the imposition of steel tariffs by the United States—it can do much more to protect the national interest of this country than can any single member country on its own.
I listened with great interest to the speech of the noble Lord, Lord Vinson, and to the description given by the noble Baroness, Lady Strange, of her
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nightmare before the last world war. Both of them spoke of their experiences and of thinking about the meaning of that war. I too am old enough to have recollections of it. As a child, I heard the bomb drop which killed 14 people in my street. However, I do not draw from that experience the view that the coming together of the countries that twice initiated a global war in the previous century constitutes a comparable threat to my family, my offspring and, I hope, my descendants. Rather, the reverse is true. One can inject into the debate at this stage just a little passion on behalf of the other point of view to that which has characterised the discussion as a whole.
I am bound to say that if Europe does not accept the challenge of coming together in the way that is proposed, there is no prospect of our standing still with an enlarged European Union and a more awkward method of reaching agreement than is proposed. It is probable that we shall return to the post-Congress of Berlin arrangement, attempting to concert the power of the European countries in the face of attempts by individuals aggressively to wrong-foot each other.
Those efforts to concert failed spectacularly in 1914. What has been done in the post-Second World War period is without parallel in the history of Europe. Notwithstanding the detail of the issues and the importance of the detail, that is a massive achievement to which successive governments in this country have subscribed—the noble and learned Lord, Lord Howe, and the noble Lord, Lord Hurd, who have participated in the debate, were notable members of one of them. In the light of that historical record, Europe is not a suitable subject for partisan divisions. I was so pleased to hear the noble and learned Lord, Lord Howe, remind us of that too-little-remembered passage of the famous Bruges speech of the noble Baroness, Lady Thatcher, where she spoke of the virtue of Europe speaking with a single voice in matters which could not be decided by individual nations seeking to flex their own muscles.
I have not chosen to use the limited amount of time that is available to me to raise the particular points that still fall to be considered. There is not enough time to do it and there have been other opportunities. I think it is the fourth time that I have had the chance to speak about the subject in this House. In any event, it would, to some extent, be a work of super-arrogation. The work that has been done by and on behalf of the House by the Select Committee on the European Union, chaired by the noble Lord, Lord Grenfell, has, together with the Government's response in detail, provided a clear statement of where the balance of concerns in the House lies and of where the Government stand in their response to those concerns. I do not doubt that the report got it just about right, and I embrace most of the views that it expresses, as I understand most of the Government's responses.
Deliberation on these matters has, throughout the two years of discussion, been unusually open. No one can complain about secret agreements secretly arrived at in this case. Representatives of the European Parliament have attended meetings of Ministers. We have had the fullest briefings that any government

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have ever given on every step of the game. We had the opportunity to consider matters such as were raised in this debate by the right reverend Prelate the Bishop of Salisbury relating to Article 51 and the role of the Churches. There is scarcely anyone who can complain about the manner in which the process has been advanced.
That leads me to touch lightly on the remarks made by two of my fellow members of the convention: Ms Gisela Stuart and Mr Heathcoat-Amory. I feel no need to speak about the latter; his expositions have been clear from the beginning. However, some people will have been a little surprised by Ms Stuart's démarche. I am one of them. I never heard her make such complaints during the process, when we shared platforms and joined in discussions on what we considered to be the way ahead. I cannot honestly say that I recognise what she described.
We tabled thousands of amendments. They were not all given equal weight, but we considered a remarkably large number of them, and many were accepted, even at the last minute of the process. I recall an amendment moved by representatives of the national parliaments, the European Parliament and several political parties to provide for a procedure that would allow the citizens of Europe to petition the European Union on matters of significance. That was accepted on almost the last day of the convention's operation. I do not share the sense that an elite was excluding common folk such as myself, a mere alternate from a minority party. I never found a body that was more open to listening and, if one had a good case, to adopting one's views.
Several hares have, once again, been started during the debate. We have seen them run round the course before. I had thought that they had been suitably disposed of—but, alas, no. We heard again that it was a draft agreement that created a new single legal personality. Since the signing of the treaties establishing the European Communities, there has explicitly been a single legal personality. The Treaty on European Union did not spell that out so specifically, but every lawyer in this country who advised those of us who were present—they were drawn from a wide spectrum of backgrounds—took the view that it had always been the case that the Union had a single legal personality. In setting the position out clearly in print, we are simply conforming to the Laeken requirement that we should make more clear what has been less clear.
The same might be said of the supremacy of European Union law. Those who have suggested that the constitution was in some way different from the treaties that preceded it are, to some extent, entering into the metaphysical empyrean, and I am reluctant to follow. I think that those who have advanced that theory, including such distinguished lawyers as the noble Lord, Lord Waddington, would acknowledge that the constitution is intended to be a legal document, not a political document without legal effect. If we are to have that kind of document, we
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must allow it to be interpreted by the highest legal authority in the European Union, the European Court of Justice.
I commend the work that has been done on the constitution that we are discussing today. I hope that it will be seen not only as a point of departure for the next phase of the European Union, in the dangerous world in which we live, but as the matrix of a new, more effective and democratic means by which the Union can reach its decisions and speak with one voice on behalf of its citizens.
6.46 p.m.
Lord Howell of Guildford: My Lords, it has been an excellent debate, with good Scots and Welsh participation, which always provides spice and vigour in our discussions in this kingdom. It is a pleasure to follow the noble Lord, Lord Maclennan of Rogart, with his characteristically thoughtful words. I do not agree with the noble Lord, but he gives great thought to such things. It was nice to hear a speech from the Liberal Democrat Benches. It is surprising that we heard only one, given that the Liberal Democrats usually get so excited and worked up about such matters, but there it is. There was one very good speech, which we have just heard.
Above all, everyone has strongly expressed their thanks to my noble friend Lord Forsyth of Drumlean for such a timely debate. I qualify that only by saying frankly that I am staggered and astonished that it had to be a Back-Bencher who provided the time for issues of such enormous importance, two days before the Government tackle the decisive issues and, possibly— maybe not—solidify matters in concrete. It is deplorable that we did not have a full government-allocated day—I am not talking about the Queen's Speech debate—to examine the matters, before they begin to be signed and sealed by governments and Ministers. However, that is the way it is, so we must be thankful that my noble friend stepped into the breach.
Over the discussion hangs the constantly repeated government mantra that the treaty involves no fundamental change in the relationship between the European Union and the member states. That was said twice in the White Paper, and it has been said again and again by Ministers. The reason why our debate has been so good is that it has made me wonder whether we have reached the point at which the Government must face a few realities.
One of those realities is that the rock on which they have rested their case has begun to crumble and has turned out to be not rock but some kind of substance like polyfilla. The Government cannot go on ignoring the enormous volume of highly informed criticism, questioning the view that the treaty does not amount to much and that we can safely leave it to the parliamentary process to do a little tidying up.
The remarkable Gisela Stuart has been the patron saint of this and many other debates. Practically every speaker has quoted her, and rightly so, because she adds her reflections to a long list of enormously independent legal authority. Having been right at the

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heart of the matter, she rightly says that the constitution reflects the needs of 50 years ago—a backward looking constitution—that it is riddled with imperfections, put together by a self-selected group of the European elite, the Praesidium, and that it raises the most important political issue facing Europe today. She adds for good measure that it is not about democracy and accountability, alas, but all about political deepening of the Union. She questions whether there is any evidence that the people of Europe want that at the moment.
In the face of that kind of comment, I do not see that the Government can just go on calmly holding to their current position. I do not see how they can dismiss the very learned report from the committee chaired by the noble Lord, Lord Norton of Louth, which my noble friend Lord Lang mentioned—a document that raised 15 points of a principle nature regarding the constitution of this country. In the face of that, how can it be said that the constitution is not a vast matter that does not change very much or make very much difference?
In the debate we had a week ago I said that the comments about tidying-up were being greeted with ridicule. The noble Baroness, Lady Symons, asked whether I was also ridiculing the noble Lords, Lord Hannay and Lord Grenfell, whom she called in aid in support of her general case. I would not dare for a moment extend anything but admiration—it would be impertinent not to do so—in the direction of the noble Lord, Lord Hannay, who is one of the most excellent independent adornments of this House. However, in the debate a week ago the noble Lord had a dig at me, which was quite unfair. He said that my views tended towards the negative and exclusive about everything to do with the European Union. That is quite untrue. I have always put forward a vision of a more flexible, subtly articulated European Union network—a truly up-to-date version. I have backed it up, as have my honourable friends in another place, with detailed proposals about going forward to a genuine, not a forced, kind of unity and with the proposition that, on the odd occasions, a single voice is more powerful than the individual voices of the separate European countries, so long as it is the right voice and does not just turn out to be a Franco-German dominance ignoring the views of other countries.
When the noble Lord, Lord Radice, asks what is the vision, I say that we have put forward a very strong vision. We see now the opportunity to build that vision and to keep Europe on the mainstream towards unity and away from this diversion that is threatened by a flawed and ill-formed constitution. The noble Lord, Lord Grenfell, is an old friend, literally, of one of my oldest friends in this House. I certainly do not presume in any way to ridicule the enormously thorough work of the committee chaired by the noble Lord. However, the fact remains that the report contains a key sentence which is wrong. The key sentence that we have all mentioned is that the balance of power will shift from the Commission to the member states. I note that my noble friend Lord Lamont tried vainly to remove that sentence from the report. When I first read the
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sentence, a phrase from Disraeli came to mind. Like a fly trapped in amber, I wondered how the devil the sentence had got there. I studied the report closely to try to understand the sentence.
The noble Lord, Lord Grenfell, explained with his usual good humour, clarity and independence what the sentence meant. It meant that in some respects power would be shifted from the Commission to the Council of Ministers, and that as the Council of Ministers is made up of member states, that meant that the relevant power would be shifted to the member states. I understand that, but it is not quite the same thing, frankly. The Council of Ministers cannot just be described in terms of shifting power to the member states because what is decided in the Council of Ministers is modified by qualified majority voting and many other things. However, I see now what the noble Lord was getting at. The trouble is that the sentence in his hands is understandable, but if it falls into less scrupulous hands, it gets distorted—and that is what has happened. The phrase has been waved around by the Prime Minister, the Foreign Secretary, the noble Baroness and many other Ministers as some kind of bogus evidence that we are all worrying about nothing and that the movement of power is not affected.
It is a pity that that is the case. It is even more of a pity because, when one reads the rest of the committee's report, one discovers that it is full of excellent details which do not support that conclusion at all; in fact, they go quite the other way. I made a list of them. Paragraph 67 states:
"There is, however, no evidence that any competence has been or will be returned to Member States".
That is quite right. In paragraph 73 the committee,
"would welcome further explanation of where the boundaries of shared competences will be set".
That is quite right as no one knows, so I do not know how one can reach conclusions regarding powers. In paragraph 83 the committee wanted to be satisfied that new provisions,
"are not so open-ended that they could lead to a considerable expansion of European Union activity".
You bet! Paragraph 263 states that intergovernmental elements on justice and home affairs will be "reduced to a minimum", and that qualified majority voting marks,
"a significant departure from the current arrangements".
The same paragraph refers to,
"a significant increase in the powers of the European Parliament".
On the rights of initiative, it points out that the powers of member states have been further limited, and that the jurisdiction of the ECJ has been significantly extended. The report goes on and on. It reminds us— perhaps it should remind the Government also as they do not seem to have read those parts of the report— that the measure permits the extension of EU competence in criminal law and proposes very significant changes to the Union's security policy. The report states at paragraph 332 that national Parliaments will lose competence over a whole range of areas. How that matches with the conclusion that

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the Government draw from the report, that somehow it validates their case that nothing much has happened, stretches credulity well beyond breaking point.
Lord Grenfell: My Lords, I am very grateful to the noble Lord for giving way. However, does he accept that I stand by everything that he has read out? He quoted from the committee's report. I do not dispute those quotations. However, the noble Lord puts the weights on to one side of the balance. If he also quoted those parts of the draft treaty where there is a very definite shift towards the member states in terms of greater authority being given to national parliaments and the Council—I dispute what the noble Lord said about the Council—he would see that we were not wrong in saying that the shift is towards the member states.
Lord Howell of Guildford: My Lords, we may have to differ on that. The noble Lord always has been passionate about balance. The report is balanced but when you take the sentence that I mentioned out of context—as the Government have had no scruples in doing—the balance is destroyed. That is what happens if one does not keep these sentences carefully locked up and one allows them to run around without a lead.
The debate moved on to the central question of the significance of the shift of power the other way—to the European institutions. That is a key matter in terms of the Government's argument. My noble friend Lord Waddington made an unanswerable case that although Community law always had superior authority from 1972 onwards, it is now embodied in a constitutional document which is not just another treaty. It is a legal writ, a legal form. What is written down in it carries powers and will be judged in the courts. I say to the noble Lord, Lord Maclennan, that many of these points were in the Maastricht Treaty and other treaties, but never before have they been enshrined and embedded in a higher law—in a constitution. That is why the case is unanswerable for having a referendum; it is not just a parliamentary matter. That is why we want a referendum. On that there was a deathly silence from the Liberal Democrats.
Lord Maclennan of Rogart: My Lords, I am most grateful to the noble Lord for giving way so that I can inject another moment of Liberal Democrat intervention. I shall do so briefly, because he is near the end of his speech. The reality is that nothing in the document suggests that it is in any way different in kind from the previous constitutional treaties of Maastricht, Amsterdam, Nice and so forth. Nothing declares that the document is superior in a different way from earlier treaties that have been the foundation of the rule book for the European Union.
Lord Howell of Guildford: My Lords, as the late Ernest Bevin was fond of saying, "I've heard different". In our view, the document is constitutional. It enshrines such matters; they become justiciable in
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the European Court of Justice, which becomes a higher court. I must move on, because the debate has been very full.
The defence issues, which were not looked at very deeply in the European Union Committee's report, were raised by the noble Lord, Lord Chalfont. They have been raised by the neutrals in recent days, who have reminded us that they are not prepared to go along with mutual defence pacts or clauses that automatically and inevitably incorporate them in defence of the Union not by willing decision—many neutral-country soldiers are involved in present operations—but by law. The committee expressed the hope that no operational EU command structure would emerge, and urged that it should not be encouraged in paragraph 284, which quotes a witness as saying that,
"none of these structures pretends to provide an operational EU military command structure either at the strategic or the tactical levels. There are no standing EU headquarters … Any such EU operational command structure would duplicate existing NATO and national assets".
I am terribly sorry, but what the committee says should not happen has happened. We now have an operational command structure proposed that is to be reinforced in the treaty, greatly to the dismay of the Americans, who are deeply worried at structured co-operation, and, again, to the dismay of the small countries.
I was glad that my noble friend Lord Hurd, in a very distinguished speech, spoke about the smaller countries. That is an enormously important issue. I favour another vision, that of a more equal Europe, yet it seems to be a vision fading in the welter of arguments about the weighting of votes, a Commission that excludes the smaller countries, a president who may perpetuate differences if he is the wrong president at the wrong time, a stability pact that apparently applies to only the small fry and not the big boys, being told to shut up over Iraq, and a general sense of domination by the bigger powers in a Union that is supposed to be one of equal countries. The UK should be far more vigorous in championing the smaller nations, as my noble friend Lady Park of Monmouth rightly suggested.
I shall mention the issue that apparently worries the Prime Minister now; namely, that if he sticks to the red lines on tax, defence, foreign affairs and energy—let us hear a little more about that this evening—he will somehow get out of line with the French and the Germans, and that a two-speed Europe will develop. That appears to be his worry according to this morning's newspapers. It is not my worry. If there are to be two speeds, the fast lane will run round the edge of the European Union. It will be Poland, Estonia, Scandinavia, the United Kingdom, Portugal and Italy. That will be the peripherique on which wise statesmen and policy makers will keep their national vehicles. It is the slow centre that will move forward, as it is perfectly entitled to do, in a more ponderous way.
We should bend our efforts to support and bring out that newer Europe and reject the antique and backward-looking constitution project, which is bad

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for us and bad for Europe. According to the Foreign Secretary, it is now anyway not apparently necessary. Going back to Gisela Stuart for a moment, I should say that she tells us that when she puts "Giscard" into her laptop computer, it insists on printing out "discard". There may be a lesson for us all in that.
In that marvellous speech at the beginning, my noble friend Lord Forsyth rather brutally compared Ministers to Humpty Dumpty and the unhappy events that he encountered. 1 read this morning that, given good counselling, proper medical technology and sensible treatment, it would have been possible to save Humpty Dumpty and put him together again. That is indeed the treatment that we now offer. Rejection of our offer will be greatly regretted. It will leave not just Ministers, but higher and more valuable issues such as European unity itself in pieces on the ground, instead of being put together again.
7.6 p.m.
Baroness Symons of Vernham Dean: My Lords, I, too, thank the noble Lord, Lord Forsyth of Drumlean, for initiating the debate and getting us off to such a very energetic start. It has been described as lively by the noble Lord, Lord Grenfell, and even fierce by the noble and learned Lord, Lord Howe. It has certainly prompted quite a number of contributions that have been as different in their content as in their presentation, and the debate has been wide-ranging, so I shall do my best to answer as many of the points and arguments as I can. There has been good Scots participation, as the noble Lord, Lord Howell, said, but perhaps I can do my bit to boost the Welsh side.
Today marks the 12th occasion since May that Members of this House or another place have had the opportunity to debate the draft treaty. Ministers have appeared eight times before different parliamentary committees. The sittings of the Standing Committee on the TGC have given a full opportunity to Members of both Houses to question Ministers on the progress of negotiations. In addition, the Government have responded to 16 reports of committees of both Houses, most lately to the full and comprehensive report of the European Union Committee at the end of October, following the contribution of the Constitution Committee.
I thank the noble Lord, Lord Williamson of Horton, for his measured reflections on the opportunities that we have had for those debates. I say very gently to the noble Lord, Lord Howell of Guildford, that the Government initiated a debate on 9th September, in very good time for the IGC. It was remarked on at the time, and it lasted some eight hours. We have also produced what I hope that noble Lords can agree have been full and speedy responses to all the reports, showing the importance that we attach to the work of the European Union Committee and the contribution of the parliamentary committees towards informing our stance on the negotiations.
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As the noble Lord, Lord Maclennan of Rogart, said on 20th November:
"My Lords, is it not almost unprecedented to have repeated sittings of joint committees of the two Houses during IGCs? The Government have introduced that novel procedure, which is welcome".—[Official Report, 20/11/03; col. 2049.]
As he remarked today, I think agreeing with the noble Lord, Lord Grenfell, we have had a running commentary, which for our part the Government have very much welcomed. I thank the noble Lord, Lord Grenfell, and his committee again. I also thank very particularly the noble Lord, Lord Norton of Louth— sadly, I do not see him in his place—for his committee's contributions to the debate on the IGC. We greatly appreciated the 41st report of the European Union Committee and the 9th report of the Constitution Committee. I know that the Foreign Secretary has written to both noble Lords to thank them very much and give them his personal appreciation of the hard work that has gone into those reports.
I was a little sorry that the noble Lord, Lord Forsyth, chose to call into question my sincerity in saying that analysis of the draft would be forthcoming. Another Member of the Opposition was a little more courteous in putting the same point. I gave that undertaking, and analysis will be forthcoming once the final draft is ready. It is still under negotiations, as the noble Lord, Lord Hurd of Westwell, was kind and fair enough to acknowledge. It is not really possible to give a day-by-day account of negotiation. The process of trying to reach agreement is an arduous and complex one in which my friends in another place have been very heavily engaged.
I turn to the prospects for the IGC. Many of your Lordships have been quite stern in urging the Government not to risk agreement if that agreement would go against our national interests. The Italian presidency plans to conclude the intergovernmental conference negotiations on the draft EU constitutional treaty at this European Council. The Government support the aim of concluding the IGC in December this year rather than continuing into the Irish presidency. However, I assure your Lordships—I hope that the noble Baroness, Lady Park, in particular, will take note of this—that we shall support that aim only if we see our fundamental concerns properly addressed in a final package.
As my noble friend Lord Radice made clear, our concerns include our insistence that unanimity should remain in areas of vital national interest, such as taxation, social security, defence, key areas of criminal procedural law and the system of own resources. The Government set out their position on those issues very clearly in the White Paper.
The Government are satisfied with progress in the IGC so far. Recent discussions—most lately at the IGC of 8th December—were based on a paper circulated by the presidency. It contained a series of proposals for amendments to the draft EU constitutional treaty drawn up by the Convention on the Future of Europe. Unfortunately, they did not

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meet all our concerns, and I wish to be clear on that point. However, we are considering revised proposals which are being tabled.
I remind the noble Lord, Lord Forsyth, that there has been no formal agreement on any single point of the draft treaty. That is for heads of state or governments by common accord at the European Council. The Government will only sign up to a treaty that serves this country's interests—a point upon which the noble Lord, Lord Howell, laid great emphasis. It was a point also emphasised in the very well argued contribution of the noble Lord, Lord Lang, and of course by the noble Baroness, Lady Park of Monmouth.
I listened very carefully to what the noble Lord, Lord Grenfell, said on that point. I concur with his assertion that we do not have to reach an agreement this weekend. We should not reach a bad compromise which we shall live to regret. The noble Lord was right. I shall draw his remarks and those of other noble Lords who have been very forceful on this point to the attention of my right honourable friend the Foreign Secretary.
However, I remind the noble Lord, Lord Vinson, that, as we said in the White Paper, if a new treaty cannot be agreed or ratified, the EU would continue under its current arrangements. It would have the same functions as it has today. It would not collapse. But the failure to reform would, indeed, undermine the existing institutional balance within the EU, and it is that which we seek to address.
I assure noble Lords that we shall continue our dialogue with Parliament. That is very important. Tomorrow, the Foreign Secretary will go before the Foreign Affairs Committee. Following the European Council, on 17th December the Minister for Europe will appear before the European Scrutiny Committee, and next month he intends to accept an invitation from the Lords EU Select Committee.
The noble Lords, Lord Forsyth, Lord Waddington and Lord Vinson, and many others spoke about their desire for a referendum on this subject. As is the custom in this country, the Government intend that the treaty should be ratified through the parliamentary process and that Parliament should have the opportunity to scrutinise the treaty in full. That was the way in which this Government dealt with the Treaty of Nice; it was the way in which we dealt with the Treaty of Amsterdam; and, indeed, it was the way in which the Conservative government dealt with the Single European Act and the Treaty of Maastricht.
Again, I believe that the Opposition have fallen into the trap of telling the Government, "Don't do as we did when we were in power. Do as we tell you now". They have attempted to make this somewhat opportunistic argument respectable by cloaking it as a claim that the treaty represents a fundamental change in constitutional terms. Perhaps inevitably in addressing a debate where opinions are so strongly held, those contributing tend to stress the overwhelmingly persuasive nature of their own
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argument and the inadequacy of that of their opponents. The Opposition claim that the new treaty is a fundamental shift in the constitutional position; others claim that the treaty contains nothing new. The truth, as is so often the case, lies somewhere in between and is probably a great deal more prosaic.
A constitutional treaty for the EU would consolidate what already exists and what has already been agreed. In that respect, the consolidation does not in and of itself change the constitutional relationship between members and the EU. It brings together a plethora of measures. It makes them more easily understood and more accessible to individuals. That must be welcomed, as I believe the noble Lord, Lord Williamson, welcomed it. However, in addition, there are new elements, such as the early-warning mechanism for national parliaments. For the first time, we have a draft treaty which makes clear that any powers not conferred upon the Union by member states remain with them. However, that does not amount to a fundamental and significant change in the relationship between the EU and member states. That is my view.
Lord Forsyth of Drumlean: My Lords, I am most grateful to the Minister for giving way. If what she says is correct and this is simply a consolidation, why are so many other member states, which are not required by their constitutions to have referendums, putting this matter to their people in a referendum?
Baroness Symons of Vernham Dean: My Lords, I want to be absolutely clear in my response to the noble Lord. I am not saying that this is simply a consolidation. I am emphatically not saying that. I said that there is an element of consolidation. If the noble Lord had been a little more patient, he would have heard me say that there are new elements, and those are very important. The question is whether they constitute a fundamental shift in the relationship. The noble Lord contends that they do; others in your Lordships' House say that they do not. We have different systems from those of other member states.
This matter will be a question of judgment. Other member states wish to make that judgment, but many agree with the view of the United Kingdom Government that it is not an issue upon which a referendum should be held. I believe that at present the balance is in favour of those who are not holding a referendum. However, the noble Lord is right to say that many remain undecided on this issue.
I recognise that many noble Lords will be sceptical on this point, as is, no doubt, the noble Lord, Lord Forsyth. The noble Lord, Lord Howell, was a little concerned about citing the Lords committee, which said that a considerable range of matters had already become the subject of EU law in earlier treaties. The extension of EU law seems relatively limited by comparison, and we repeat our earlier conclusion that it is clear that the balance of power will shift from the Commission to member states.
I considered the speech of the noble Lord, Lord Grenfell, on this issue during the debate on the gracious Speech to be thoughtful and thorough. We

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emphasised the position and he did so again today. It is very different from the analysis of the noble Lords, Lord Vinson and Lord Willoughby de Broke. I believe that the noble Lord, Lord Forsyth, accused the Government of seizing upon the quote. However, I might equally have quoted, as I did last week, the noble Lord, Lord Hannay, who is very independent. He said on 9th September that this would not be the most significant or far-reaching of European treaties. I also quote the noble and learned Lord, Lord Howe, who said:
"I hope very much that my own party will consider carefully the wisdom of committing ourselves in advance to a referendum on this issue before we know what is going to emerge".—[Official Report, 9/9/03; col. 180.]
I recognise that it is discomfiting for Members of the party opposite for our Lords committee not to agree with them on that point. However, I say to the noble Lord, Lord Howell, that he gave the noble Lord, Lord Grenfell, an adequate opportunity to reply to the points that he made, and he received the answer as, indeed, we all did.
I shall draw this matter, too, to the attention of my right honourable friend. But I have to tell your Lordships that today I have not heard any compelling reason to change the way in which this country ratifies treaties. We in this country have a very strong parliamentary democracy. I believe that that provides the best way to ensure that there will be detailed scrutiny and accountability.
The noble and learned Lord, Lord Howe of Aberavon, raised the issue of the European Charter of Fundamental Rights. We supported that charter at Nice nearly three years ago as a political declaration. However, we did not consider it to be clear enough for legal use. We and other member states have worked very hard in the Convention on the Future of Europe to obtain greater clarity and greater legal certainty. As your Lordships will know, my noble friend Lady Scotland has been particularly involved in that work.
The convention text makes clear in Article II-51 that the charter,
"does not extend the field of application of Union Law beyond the powers of the Union",
or establish any new power or task for the Union or modify powers and tasks defined in other parts of the constitution. Therefore, the Government will make a final decision on incorporation of the charter into the draft constitutional treaty only in the light of the overall picture that emerges at the IGC.
The noble Lords, Lord Howell, Lord Williamson of Horton, Lord Grenfell and Lord Radice, all concentrated some of their remarks on the role of national parliaments. The Government have been a leading advocate of the convention for strengthening the role of national parliaments in Europe and also for strengthening subsidiarity, meaning that the EU does only what it cannot leave to national governments to do for themselves. On previous occasions I have been a little disappointed that your Lordships have not paid that aspect of the draft treaty more attention. However, I was very pleased to hear today the comments of the noble Lord, Lord Radice.
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Parliament will have a mechanism to send back proposals for EU laws if those laws do not add value. Some may remain dissatisfied with the role accorded to national parliaments, but what we have is an important step forward. It will be the first time that national parliaments have been given a formal role at EU level. It is a powerful role: it requires the Commission to maintain, amend or withdraw a proposal that is opposed by one-third of national parliaments. In practice, that indicates a blocking minority. As stated in paragraph 123 of the 41st report of the Select Committee on the European Union, the mechanism, if made to work effectively would,
"represent an important development of democracy in the Union and … would help to confirm that the European Union is a union of Member States".
I know that committees of both Houses have begun to consider how Parliament can make best use of the mechanism. Certainly, I hope that all noble Lords and others will take the opportunity it offers to demonstrate the extensive knowledge of and interest in these affairs.
The noble and learned Lord, Lord Howe, the noble Lord, Lord Williamson, and other noble Lords, asked about the passerelle clause. The passerelle clause is unacceptable as it stands in the draft treaty. The presidency proposals submitted last week have an alternative wording in annex 30, but that does not meet our concerns. We have made clear all along during negotiations that we would find acceptable a situation in which the Council could, by unanimity, agree to a shift of powers from unanimity to QMV in respect of a particular dossier or area of activity. We could do so provided—this is the important part—that there was a lock that required every national parliament to endorse that decision. I hope that that deals with the points made by the noble Lords, Lord Vinson and Lord Grenfell.
Finally, as regards the importance constitutionally of what we are considering, we all heard the noble and learned Lord, Lord Howe of Aberavon, say gently to the noble Lord, Lord Forsyth, that it is not sensible to say that this draft treaty takes away our right to govern ourselves in a new and unacceptable fashion. I hope that those of your Lordships who have come to the conclusion that it does will carefully reflect on the comments of the noble and learned Lord and, indeed, those of the noble Lord, Lord Grenfell. Perhaps they were not quite as fierce as those of the noble Lord, Lord Forsyth, but I, for one, found him very much more persuasive.
I turn to the question of primacy as raised by the noble Lord, Lord Waddington. The noble and learned Lord, Lord Howe, answered him convincingly. The primacy issues are not new. Parliament knew in 1972— I refer to the European Communities Act—that there were these consequences. Indeed, Parliament has known every time it has supported a treaty since. On the question of the legal personality raised by the noble Lord, Lord Waddington, and answered very well by the noble Lord, Lord Maclennan—we have discussed this on a number of occasions—we already have a legal personality in the European Union. A Question on

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that issue was raised earlier this year. I believe there have been two Questions on this issue and it is one that your Lordships' committee dealt with very effectively when it gave its judgment that there was nothing new in this particular aspect.
The noble Lord, Lord Hurd, the noble and learned Lord, Lord Howe, the noble Lord, Lord Chalfont, the noble Baroness, Lady Park of Monmouth, and the noble Lords, Lord Williamson of Horton and Lord Howell of Guildford, raised the issue of CFSP. Strong CFSP is good for Europe, good for Britain and, I believe, good for the world. It has been a goal of successive governments, both Conservative and Labour. Back at the 1984 Fontainebleu Council, the then government called for the progressive attainment of a common external policy. To hear some noble Lords on the Benches opposite, one would not have thought that was the case. We want to improve the coherence of EU external action and CFSP to make them more effective and efficient. Of course we will not agree on everything—Iraq showed that earlier this year—but where we can have one voice we are more influential because of it. I agree strongly with the noble Lord, Lord Hurd, in his excellent contribution on this point. We should try to create a valid EU-US relationship. I hope that we shall have the opportunity to debate that in greater depth next Monday.
We believe that the draft treaty can provide us with that. It can be done by instituting a full-time chair of the European Council who would increase Europe's global influence and enhance the EU's ability to deliver. By merging the roles of Messrs Patten and Solana it would tend to improve the coherence between the Commission and the Council's external action and create a European external action service to assist this new post. We welcome the fact that such a person will be accountable to the Council for CFSP. It is very important to have that accountability. It would ensure that foreign policy co-operation will remain subject to its own distinct procedures just as it has since a common foreign policy was set up 10 years ago in the Maastricht Treaty. That will be key to its success.
The noble Lord, Lord Hurd, raised particular questions on this issue. I shall write to him about the relationships and how we hope they will work. To answer the point raised by the noble Lord, Lord Chalfont, and the noble Baroness, Lady Park, CFSP was introduced under the Maastricht Treaty. It was the Amsterdam Treaty which defined how the policy should be settled and how implementation should be taken forward. But the important issue is that under this draft treaty CFSP remains in the hands of member states, so unanimity remains the general voting rule for CFSP issues.
ESDP is slightly different, and I welcome the discussion we had on future developments. It is no secret that, like many other member states, the Government did not support the convention proposals on structured co-operation and mutual defence. Our objections, and the principles from which they derived, were made very public in the White Paper. It is also well known that we have been working with our
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partners to find a constructive way forward. However, I reiterate as I have done on many occasions that NATO remains the cornerstone of our security. The NATO Article V guarantee remains the basis for the mutual defence of all members.
Ultimately, it is on the ability to conduct operations that ESDP will be judged. We believe that the IGC ESDP package which is now on the table, by refining the scope of the ESDP operations and focusing on qualitative and quantitative improvement in capabilities will increase our ability to deliver. On the specific point raised by the noble Baroness, Lady Park, on whether we can still sign international treaties in our own right, the answer is yes, we can. The Government would not agree to a position where we could not make our own policy decisions on matters of foreign policy as we did in Iraq. We shall continue to make those decisions in the interests of this country.
The noble Lord, Lord Monson, spoke of what he described as the apparent affection that people have for Europe and said that such affection in many countries was prompted by fear, which was a sharper spur. I am sorry he should think that, particularly when 10 states have recently demonstrated their enthusiasm through lengthy negotiation and an unprecedented desire to join us. We shall be welcoming them wholeheartedly in April next year. Turkey, too, wants to start negotiations with us.
Important questions on energy were raised by the noble Lords, Lord Williamson and Lord Willoughby de Broke. We are working with presidency legal experts and our allies to clarify precisely the meaning of the articles and to tighten the text. I emphasise to noble Lords that these are very important points. They have been raised by the Foreign Secretary and the Prime Minister. We have raised them together with our friends in the Dutch Government. We shall sign up only when we are satisfied that the concerns we have raised on this issue will be met.
The right reverend Prelate the Bishop of Salisbury raised questions on Article 51. We welcome the reference to Article 51. In the United Kingdom we are increasingly including dialogue with the faith communities in policy development, for example on the outreach programme organised by the Foreign Office. I should be delighted to talk to the faith communities in this country about how we might take forward under the auspices of Article 51 the kind of issues in which the right reverend Prelate was so interested.
The noble Duke, the Duke of Montrose, raised interesting questions on the regions. We believe that this is a major advance, one that is most welcome and which the Government supported in the draft treaty. The subsidiarity protocol, in which the noble Duke was particularly interested, provides for the national parliaments to consult regional and local authorities. We are very glad that the scrutiny committee has already begun to consider ways of implementing the mechanism in full consultation with the devolved Assemblies. I hope that the noble Duke is pleased to hear that and if he has any ideas of his own I should be pleased to discuss those with him.

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The noble Lord, Lord Stevens of Ludgate, asked questions not strictly on issues under the constitution. But I assure him that economic growth is being discussed at the IGC this week when heads of government will be asked to endorse the European action for growth. Member states have welcomed that initiative. We shall see how those discussions go.
I welcomed the reports of the EU Select Committee and the Constitution Committee. We have considered them in great detail. No one is brushing any of these issues aside. I hope that my full answers today and on previous occasions give some substance to that claim. I was very glad that the EU Committee report acknowledged that the Government,
"has continued in the open spirit of the Convention".
As I have said, the opportunities for parliamentary scrutiny of the proposed draft treaty have been, we believe, unprecedented. Those opportunities have enabled our approach to the negotiations to be informed by the views of parliamentarians. Of course it is right that we should do so, as the noble Baroness, Lady Strange, argued.
The noble Lord, Lord Howell of Guildford, is a thoughtful and thorough man and, if I may say so, I thoroughly respect him, but I felt for him today because he is a fair man too. The noble Lord tried very hard, particularly in his argument on the Lords report, but I think he had his answer—and he had it more than once.
The European Council may mark the end of the IGC negotiations. Whether it does or does not, further meetings may prove necessary. The Government will sign up to a treaty only if we believe that it advances this country's interests. The Italian Prime Minister and Council president, Silvio Berlusconi, said at the weekend that,
"an agreement at any price would be a serious mistake".
The many noble Lords who have argued that are not alone in doing so.
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Furthermore, we will not ratify any treaty that emerges without Parliament first giving its approval. But if we get this treaty right, tomorrow's EU will not only be bigger than today's, but it will be a great deal more effective. We would have a treaty that, in the judgment of this House's EU Select Committee,
"sets out for the citizen what the EU is";
has measures such as the subsidiarity mechanism which,
"enhance democracy in the Union",
and others such as the European Council chair which increase,
"the efficiency of the Union",
and would lead to a shift of power from the Commission to the member states. There is a great deal to play for here. I hope your Lordships will give their full support to the Government in doing our best to bat for Britain on this. Like next year's enlargement of the Union, that would be good for Britain and good for Europe.
7.32 p.m.
Lord Forsyth of Drumlean: My Lords, we have had a very interesting debate. I thank the Minister for the way she has answered the debate and the points that have arisen and all noble Lords who contributed to it. I must say that I do not think that she should look for a statue of her on horseback to be raised in her village immediately, but she certainly made a good fist of putting the Government's case.
I should like to congratulate the noble Baroness on speaking for 25 minutes without mentioning Gisela Stuart. Given the tenor of the debate that was quite an achievement because most noble Lords found it necessary to mention her. I am sure that the House will understand why the noble Baroness could not bring herself to do so.
The hour is late. We shall see how things turn out in the days to come. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.
House adjourned at twenty-seven minutes before eight o'clock.

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